BusinessDay 20 Jul 2017

NEWS YOU CAN TRUST I **THURSDAY 20 JULY 2017 I VOL. 14, NO 399 I N300 @ g 

FG’s fiscal deficit jumps 101% 

to 9-year high of N1.1trn 

LOLADE AKINMURELE 

The Federal Government 

of Nigeria’s fiscal 

deficit has risen 

sharply to a nine-year 

high of N1.1 trillion in 

the first quarter of 2017, according 

to the Central Bank, as low 

oil prices took a toll on revenues, 

even as the government raised 

spending. 

A fiscal deficit is the difference 

between revenues and 

expenditure. It is a deficit when 

expenditure exceeds revenues. 

The deficit is a 101 percent 

increase, compared to the first 

quarter of 2016, when the government 

incurred a spending 

deficit of N531 billion. Compared 

to the same period of 2014 

and 2015, it is a 724 percent and 

67 percent increase, respectively. 

On a quarterly basis, the deficit 

rose 56.7 percent from N680.8 

billion in the fourth quarter of 

Dana congratulates 

winners of BusinessDay’s 

State Competitiveness, 

Good Governance 

Award 2017 P. 38 

2016. 

In the first quarter of 2017, the 

FG’s retained revenue came to 

N608 billion, while expenditure 

totalled N1.67 trillion. 

Pressed to spend its way out 

of an economic slump, the first 

such slump in over two decades, 

Nigeria approved a 2017-spending 

plan of N7.4 trillion in May, 

even though it lacks the revenues 

to back it up. 

The budget has a N2.36 trillion 

deficit, but underperforming 

oil and non-oil revenues 

have stoked the deficit and 

forced government to borrow at 

a frantic pace, with fears that the 

deficit, based on the first quarter 

trend, may be exceeded by the 

end of the year. 

Funding the deficits could 

swell Nigeria’s debt profile. The 

Federal Government’s total domestic 

debt stock, as at March 

Continues on page 4 

L-R: Spencer Onosode, secretary, Gamaliel and Susan Onosode Foundation; Darren Walker, president, Ford 

Foundation; Ese Onosode, chairman, Delta Economic Summit Group, and Innocent Chukwuma, regional 

director, West Africa, Ford Foundation, during the Ford Foundation event, with the theme, Impact Investing 

for Social Change, in Lagos. 

Pic by Pius Okeosisi 

Paylater,Remita, 

Firstbank, Rack Centre, 

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headline BusinessDay 

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... as FinTech funding 

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FRANK ELEANYA 

Paylater, Firstbank, Remita, 

Wema ALAT , Rack Centre 

and Mainone have thrown 

their weight behind Business- 

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taking place tomorrow. 

The summit comes at a time 

Inside 


Nigeria’s 

suspension 

from EGMONT 

Group will hurt 

economy 

– Senate 

P. 4 

New oil policy 

targets long 

term sales of 

petroleum 

products 

P. 4

2 

Thursday 20 July 2017

Thursday 20 July 2017 

3

4 BUSINESS DAY 

C002D5556 


NEWS 

Nigeria’s suspension from EGMONT 

Group will hurt economy – Senate 

OWEDE AGBAJILEKE, Abuja 

Worried about the 

grave economic 

implication of 

Nigeria’s suspension 

from the 

EGMONT group, the Senate has 

taken steps to avert expulsion. 

The EGMONT Group is a network 

of national financial intelligence 

units and is the highest 

inter-governmental association of 

intelligence agencies in the world, 

with 154 member countries. It provides 

the backbone for monitoring 

international money laundering 

activities. 

Nigeria became a full member 

of the group in 2007 during the 

administration of former President 

Olusegun Obasanjo. 

However, at its July 7, 2017 

meeting in China, Nigeria’s Financial 

Intelligence Unit (NFIU), the 

agency of government that represents 

the country at the meetings 

of the group, was suspended till 

January 2018 with a threat of an 

expulsion if the country does not 

meet the standards of the group 

with regard to its operations. 

It cited inability of the Federal 

Government to make the NFIU 

FG’s fiscal deficit jumps 101% to nine year-high of... 

Continued from page 1 

2017 rose 8 percent to N11.9 

trillion, from N11.05 trillion as at 

December 2016, while external 

debt stood at $US 39 billion, according 

to data from the Debt 

Management Office (DMO). 

“The deficit explains why the 

government has been borrowing 

massively, stoking interest rates 

and crowding out the private 

sector,” said Johnson Chukwu, 

CEO of Lagos-based financial 

advisory firm, Cowry Assets. “The 

challenge of such public borrowing 

is that it stifles credit to the 

productive (private) sector and 

would have a negative effect on 

the speed at which the country 

can exit recession. 

“Revenue has tanked and the 

government needs to take bold 

measures to cut down recurrent 

expenditure, to engender frugal 

spending,” Chukwu told BusinessDay. 

autonomous from the EFCC, interference 

of the acting chairman 

of the anti-graft agency, Ibrahim 

Magu in the affairs of the NFIU and 

divulging confidential information 

concerning EGMONT Group to 

the media. 

The global body stated that 

if Nigeria fails to comply with 

the group’s demands for a legal 

framework granting autonomy 

to the NFIU by January 2018, the 

country would be expelled from 

the organisation. 

If this happens, Nigeria will 

no longer be able to benefit from 

financial intelligence shared by 

the other 153 member countries, 

including the United States, United 

Kingdom, Qatar, Saudi Arabia, 

Germany and Italy, among others. 

The Senate is blaming the Ex- 


L-R: Saidu Mohammed, COO, Gas and Power NNPC; Chinwuba Oby Laura, regulating liaison officer, AITEO; Ibe 

Kachikwu, minister of state for petroleum resources; Samira Buhari, manager public sector and corporate relationship, 

AITEO, and Bekeme Masade, founder/CEO CSR-in-Action, during the 6th Sustainability in the Extractive 

Industries (SITEI) conference, theme “Building Local for Global” held in Abuja, yesterday. Pic by Tunde Adeniyi 

Pabina Yinkere, head of institutional 

business at Lagos-based 

investment bank, Vetiva Capital, 

urges the country to focus on 

growing its revenues. 

“The bulk of our revenue comes 

from oil, which we do not have 

control over (in terms of prices), 

for production, which we have 

some control on, we must ensure 

output is steady, or even grow it 

from current levels,” Yinkere said 

in an interview. 

Nigeria should also strive to 

raise its tax collections by enforcing 

better compliance, according 

to Yinkere. 

The CBN figures show that 

Federal Government’s retained 

revenue for the first quarter of 

2017 based on provisional data, 

amounted to N608.11 billion. 

This was below the proportionate 

quarterly budget estimate 

and the receipts in the preceding 

quarter by 9.9 and 31.0 percent, 

respectively. 

Of the total revenue, the Federation 

Account accounted for 

58.6 percent, while Federal Government 

Independent Revenue, 

VAT, and others (NNPC Refund 

and Exchange Gain) accounted 

for 12.8, 10.9, 9.3, 5.3 and 3.1 per 

cent, respectively. 

At N1.67 trillion, the CBN data 

indicated that the Federal Government’s 

expenditure for the 

first quarter of 2017 was above 

the provisional quarterly budget 

estimate and the level in the preceding 

quarter by 6.9 and 7.3 per 

cent, respectively. 

The development, relative to 

the proportionate quarterly budget 

estimate, was attributed to the 

rise in capital expenditure. 

A breakdown of the total expenditure, 

showed that the recurrent 

expenditure at 63.3 percent 

still dominated, while capital and 

statutory transfers accounted for 

31.7 and 5.0 percent, respectively. 

Nigeria’s economy, which vies 

with South Africa’s to be the largest 

on the continent, shrank by 

1.5 percent last year, the first contraction 

since 1991, after revenue 

from oil, its biggest export, fell by 

almost half. 

About 30 percent of the budget 

will be spent on roads, rail, ports 

and power, to help stimulate business 

activity. 

Spending on capital projects 

to promote exports and in the 

oil-producing Niger delta region, 

is expected in the second half of 

the year. 

“Capital projects are likely to 

suffer, as revenues underperform,” 

said Muda Yusuf, director-general 

of the Lagos Chamber of Commerce 

and Industry (LCCI). 

Indications are that the Federal 

Government continues to struggle 

with its revenues, even beyond the 

first quarter. The Federal Government’s 

gross revenue was N458.42 

billion in May, 48.8 percent short 

of the monthly budget estimate of 

N894.76 billion, according to the 

Central Bank of Nigeria (CBN)’s 

monthly report. 

This has been the trend 

New oil policy 

targets long term 

sales of petroleum 

products 

…Nigeria targets 2.5m to 3m b/d 

crude production in 2 years 

…Over 30 individuals already 

in line for refinery financing 

scheme 

…As FEC approves National 

Social Protection Policy, 

National Employment Policy 

ELIZABETH ARCHIBONG 

Nigeria’s Federal Executive 

(FEC) Council on Wednesday 

approved a National Oil 

Policy which amongst other things, 

targets long term sales of petroleum 

products, which is the main 

source of the country’s revenue. 

In implementing the policy, 

officials say the government will 

hitherto consider geographical 

markets in long term contracting 

and sales of its oil, as opposed to 

the currently structured contracting. 

“How we sell our crude is going 

to be looked at, there is a lot of geographical 

market, we need to look 

at long term contracting and sales, 

as opposed to systemic contracting 


throughout this year. Actual revenues 

have flunked government 

targets plagued by huge slippages 

in non-oil revenues and low oil 

prices and production to a less 

extent now. 

The country’s non-oil revenue, 

expected to relieve oil as the government’s 

dominant source of 

cash, came in at N1.13 trillion in 

the first five months of 2017. 

That is half the size of a N2.2 

trillion five-month target set by the 

government (federal and states) 

for 2017. 

Various analysts, and more 

recently, the World Bank, have 

expressed concerns over Nigeria’s 

debt profile, citing the inadequacy 

of current revenues to sustain 

interest rate payments. 

At the recent IMF/World Bank 

Spring Meetings in Washington, 

Catherine Pattillo, Assistant Director 

and Head of Fiscal Policy and 

Surveillance Division of the IMF, 

pointed out that Nigeria’s interest 

payment to tax revenue has more 

than doubled to 66 percent.


5



C002D5556 

NEWS 

Truck driver killed, banks set ablaze in Apapa 

JOSHUA BASSEY & HOPE MOSES-ASHIKE 

Frustration, anger boiled 

over in Nigeria’s premier 

port city of Apapa 

on Wednesday, as a truck 

driver was shot dead and 

two commercial banks set 

ablaze by angry truck drivers 

in ‘revenge.’ 

Olarinde Famous, spokesperson 

of the Lagos State 

Police Command, who confirmed 

the incident, said the 

trigger-happy mobile policeman 

had been arrested. 

For keen observers of developments 

within Apapa in 

the last two weeks, the bloody 

incident may not present a 

surprise, as Apapa is synonymous 

with disorderliness and 

insanity on the road. 

Traffic gridlock within the 

environs has worsened since 

the start of remedial work on 

collapsed section of Ijora- 

Wharf Road, penultimate 

Monday. This is even as the 

alternative Mile 2-Tincan axis 

towards Creek Road remains 

in shambles, with haulage 

trucks and petroleum tankers 

Taleveras says third party contract meets international standards 

KELECHI EWUZIE 

Taleveras, a leading global 

energy and services company, 

active in all key areas 

of the oil and gas industry: upstream, 

midstream and downstream, 

says that all its third party 

contracting meets international 

standards. 

The company, while reacting 

to an online publications relating 

to a case against Atlantic Drilling 

Fluids, reiterates that the legal 

case is not against Taleveras or 

Igho Sanomi. 

In a statement signed by Alex 

School, legal counsel to the company, 

it discloses that “in relation 

to the US department case 

against Atlantic Drilling Fluids, 

Taleveras and the other two major 

oil trading houses (Glencore 

and Arcadia) were not faulted 

for embarking on a legitimate 

Over 460,000 unclaimed PVCs 

in custody - new Edo REC 

IDRIS UMAR MOMOH, BENIN 

Edo State office of the 

Independent National 

Electoral Commission 

(INEC) says over 460,000 

unclaimed Permanent Voters 

Cards (PVCs) by registered 

voters in the state are still in 

its custody since 2016. 

The new INEC state resident 

commissioner, Obo 

Effanga, made the disclosure 

at a stakeholders’ meeting on 

the Continuous Voters Registration 

(CVR) on Wednesday 

in Benin City, the state 

capital. 

“We have a total of 

1,900,423 registered voter in 

Edo State prior to the continuous 

voter registration. 

At the end of 2016, we have 

distributed 1,445,749 PVC 

while over 460,000 voters 

are yet to collect their PVCs. 

We have also registered additional 

38,448 voters during 

the CVR,” he said. 

Effanga also disclosed 

that the commission had 

registered 38,448 voters during 

the ongoing CVR in the 

parked indiscriminately on 

every available space. 

Trouble, it was gathered, 

started Wednesday morning 

when a mobile policeman 

shot the trailer driver. 

It could not be ascertained 

what infuriated the policeman. 

However, unconfirmed 

reports said he was angered 

by the refusal of the driver 

to give money demanded, 

which is common practice 

between security agents and 

truck drivers in Apapa. 

According to eyewitnesses, 

the verbal attacks that 

followed resulted in skirmishes 

amid which the mobile 

policeman opened fire, 

which fell a truck driver. One 

of the witnesses, who craved 

anonymity, told BusinessDay 

at the scene of the incident 

that the mobile policeman 

escaped into a bank. 

Angered by the death of 

their colleague, truck drivers 

joined by horde of hoodlums 

were said to have mobilised 

to the bank to demand the 

killer mobile policeman be 

released to them, a request 

transaction, as all payments 

were made based on legitimate 

third party contracts with private 

companies and not NNPC.” 

It observes that this process 

involves verification of the contracts 

with the issuing authority 

to authenticate and “further 

compliance with our lending 

banks internal due diligence processes.” 

This is not different from 

international trading standards 

performed by the numerous international 

and major oil and gas 

companies operating in Nigeria. 

According to the company, 

“The ultimate aim of contracting 

is to off-take crude oil from 

asset productions. It is worthy to 

note that neither Taleveras nor its 

associated companies lifted any 

oil from this production. Terms 

of the agreement were breached 

and hence a legal dispute and 

appropriate filings made in restate, 

which ended this week, 

saying six additional registration 

centres had been created 

in the state to afford more 

people the opportunity to 

register and carry out their 

civic responsibility. 

While cautioning prospective 

eligible voters 

against double registration as 

the commission is poised to 

prosecute those found wanting, 

he called on the people 

to support the commission 

through sensitisation of the 

people on the need to come 

out to register, noting that it 

was the only way to exercise 

their franchise. 

He however assured that 

the commission would remain 

neutral in its assignment, 

and advised politicians 

not to always fraternise with 

the election body but the electorate 

that would determine 

their fate during elections. 

Speakers at the stakeholders’ 

meeting however 

appealed to the new REC to 

be fair to all party and work 

towards ensuring credible 

election in the state. 

turned by other policemen 

attached to the bank. 

The rioting drivers were 

said to have gathered disused 

tyres and set Diamond Bank 

building ablaze and also 

torched a nearby Sterling 

Bank, specifically targeting 

air conditioners and ATM 

counters. The rioters were 

seen molesting bank staff and 

customers before the security 

officers arrived. 

Soldiers were seen joining 

policemen from Area ‘B’ 

Police Command, Apapa, 

to arrest the situation with 

several gunshots fired into 

the air to scare the rampaging 

truck drivers. Amid fears of 

possible escalation of the riot 

and to avoid more damage, 

other banks in Apapa hurriedly 

shut operations, and 

were seen evacuating their 

staff and customers. 

Meanwhile, the management 

of Diamond Bank and 

Sterling Bank confirmed 

there was a fire incident as a 

result of mob action at their 

Creek Road, Apapa branches 

on Wednesday. 

spected court of jurisdiction.” 

In setting the record straight, 

the statement says one of Taleveras 

core activities since 2000, 

is sourcing, trading and engaging 

in third party contracts, inclusive 

of oil and gas upstream 

operations. Taleveras, due to its 

capacity, trading expertise and 

financial strength, continues to 

source and engage in procuring 

third party oil contracts. 

Taleveras performs on these 

contracts handling the physical 

delivery, risk management and 

logistics from start point to its 

numerous first class end users 

and major refiners. 


NPA surpasses revenue target in Q1 

AMAKA ANAGOR-EWUZIE 

Hadiza Bala Usman, 

managing director, 

Nigerian Ports Authority 

(NPA), said on 

Wednesday that the authority had 

surpassed its revenue target in the 

first quarter of the year following 

gradual return of business activities 

to Nigerian seaports. 

Speaking on a live television 

interview on CNBC Africa, Usman 

said the NPA had an attendant 

decline in revenue since the recession, 

which resulted to low 

business activities at port such that 

many oceangoing vessels exited 

Nigerian ports. 

“We had a revenue projection 

of N16 billion but we were able 

to make N118 billion in the first 

quarter. Though, we had attendant 

decline in revenue since the 

recession but we are now seeing 

an increase in the exportation of 

agricultural produce since 2017 

such that we had been able to surpass 

our revenue projection for the 

KELECHI EWUZIE 

first quarter of 2017,” Usman said. 

According to Usman, the NPA 

is working to set-up a standard 

operating procedure for the export 

of agricultural produce. 

“We have also worked to see 

how to increase the export of agricultural 

produce and solid minerals 

in our ports and our terminal 

operators are keen on doing that 

and they have started developing 

special desks in their respective 

terminals to assist agricultural 

and solid minerals exporters to 

fast track export of their cargoes,” 

he said. 

The NPA boss, who said that 

the NPA has a revenue projection 

of 250 billion for 2017, also stated 

that the authority is hopeful to 

attain the projected revenue, 

substantial amount would be 

dedicated to building and upgrading 

existing infrastructure around 

the ports while the remaining 

would go to the Federal consolidated 

revenue fund for national 

development. 

To achieve our revenue target 

for the year, the NPA boss assured 

Nigerians that no new tariff would 

be introduced on port operators 

and users of port services but 

would retain the current tariff 

regime at the port. 

Noting that many terminal 

operators in the past has increased 

their tariff without government 

approval, Usman said that the 

NPA would sanction any terminal 

operator that increased tariff 

on terminal handling without 

obtaining government approval 

as stipulated in the concession 

agreement. 

“We have also gained the 

presidential approval to de-categorise 

oil and gas cargo and that 

approval was given to the NPA in 

the last two months. Oil and gas 

cargo does not exist anymore and 

all cargo would be handled across 

the new categorisation and we 

only recognise cargoes in line with 

the approved categorisation. And 

every terminal would be allowed 

to handle oil and gas cargo,” she 

added. 

Summit to address critical career options for Nigerians 

Critical issues students 

encounter when making 

career choices as a strategy 

to boost the future workforce 

in Nigeria will engage professionals 

from various walks of life at a 

workshop in Lagos soon. 

The workshop organised by 

Global Interns Nigeria, a studentcentred 

organisation, will address 

challenges faced by students who 

find it difficult to make proper 

career choices before entering 

tertiary institutions, leading to 

a large number of them losing 

interest in their course of study 

and also finding it difficult to 

secure satisfactory job. 

Olufunmilayo Modupe, CEO 

of Global Interns Nigeria, said the 

workshop was aimed at enhancing 

the perception of students 

on the right career path and 

prospects associated with them. 

Modupe said the event, 

which is the first phase of career 

guidance workshop dubbed 

“The Career Connect Series” 

for students in high schools and 

universities, would take place 

August 22, in Lagos. 

She stated that the workshop 

will help teenagers to understand 

the meaning of career choices 

through engaging sessions suitable 

for learning and networking. 

“It promises to be practical and 

interactive sessions between 

Group urges FG to investigate NDDC abandoned projects in Ondo communities 

Leadership of Ijaw Consultative 

Forum has called 

on the Federal Government 

to investigate the alleged 

abandonment of a bridge project 

and several others in some 

communities awarded to a 

contractor by the Niger Delta 

Development Commission 

(NDDC) in Ese Local Government 

Area of Ondo State. 

The call was contained in 

… targets N250bn annual revenue in 2017 

a statement signed and made 

available to newsmen in Ondo 

State by the group national 

coordinator and the national 

secretary, Suffy Uguoji and 

Inkinyoulemo Peremini, respectively. 

Suffy said the bridge that 

linked the riverine Arogbo- 

Ijaw and Agadagba-Obon 

communities in the local government 

was awarded to contractor 

about 10 years ago after 

the payment of mobilisation 

fee by the NDDC. 

He also called on the authorities 

of the NDDC to complete 

some of the abandoned 

projects in some communities 

in the local government area. 

The coordinator also appealed 

to the state governor, 

Rotimi Akeredolu, and the 

NDDC to compel the contractor 

handling the project to go 

back to site or re-award the 

contract to another contractor 

with close monitoring. 

He however urged the 

government to find a lasting 

students and facilitators,” she 

assured. 

Modupe further explained 

that students are stereotyped 

when making career decisions, 

which were sometimes in line 

with the desire of their parents, 

without looking at the prospects 

or satisfaction in their choices. 

Global Interns Nigeria is a 

student-centred organisation 

connecting college and high 

school interns of predominantly 

Nigerian extraction to lifelong 

rewarding internship jobs and 

volunteering programmes in Nigeria 

and Ghana. It also provides 

professional and sound career 

advisory services to all its student 

subscribers. 

L-R: O’tega 

Emerhor, 

chairman, 

Transcorp 

Hotels plc; Chris 

Ngige, minister 

of labour and 

employment, and 

Tony Elumelu, 

chariman, 

Transnational 

Corporation of 

Nigeria plc, at the 

30th anniversary 

celebration of 

award-winning 

Transcorp Hilton 

Abuja. 

solution to the bridge project 

with a bid to ease and facilitate 

transportation of goods 

and services in the riverine 

communities. 

“It must be noted that the 

undaunted economic challenges 

are so enormous in our 

environment that we can not 

afford to miss the link bridge 

which is bound to boost our 

business activities in Arogbo 

community, which is an island 

that is totally cut off from the 

hinterland.


7

8 



Harvard 

Business 

Review 

Global Business Perspectives 

BUSINESS DAY 

9 

CONNECTING THE WORLD ONE BUSINESS AT A TIME 

All-clear for big banks raises fears of a return to risk 

The JPMor gan Chase bank branc h 

It took a decade — and $200 

billion in fines — but the big 

banks are back. 

The Federal Reserve’s 

passing grade for all 34 of the 

institutions it checks annually for financial 

soundness, the first all-clear 

since the Fed tests began in 2011, is 

a watershed moment. 

The immediate winners include 

investors as well as bank executives, 

who could see their already-ample 

pay packages expand further. Even 

as the broader market fell on July 

6, bank stocks surged as investors 

cheered the big dividend increases 

announced by J.P. Morgan Chase, 

Wells Fargo, Citigroup and others 

following the Fed’s statement. 

Looking out further, many big 

institutions might have more flexibility 

to lend, a major factor in 

promoting the long-term growth of 

businesses. At least in theory, the 

greater capital that the banks now 

hold and less stringent oversight of 

the financial sector by Washington 

could give the economy a shot in the 

arm after years of caution. 

“It’s not a sudden thing. It’s 

been a long time coming,” said Guy 

Moszkowski, managing partner at 

Autonomous Research U.S., an independent 

firm in New York. “But 

American banks are more soundly 

capitalized today than at any time 

in my career, which started in 1979.” 

On the other hand, critics fear 

that the easing of regulatory pressure 

and a more laissez-faire-oriented 

White House could set the stage 

for a return to the bad old days of 

enormous leverage and freewheeling 

deals until the music inevitably 

stops. 

“This isn’t the time to put the 

brakes on regulation,” said Mark T. 

Williams, a banking expert at Boston 

University and a former bank 

examiner for the Federal Reserve. 

He noted that, with the 10 largest 

American banks holding 80% of all 

banking assets, “this concentrated 

financial power residing at the top 

banks should be carefully monitored.” 

It was exactly 10 years ago this 

July, as the housing bubble collapsed, 

that the first cracks in the 

country’s economic edifice appeared. 

Within 18 months Bear 

Stearns and Lehman Brothers were 

gone, and once-invincible names 

such as Citigroup and Bank of 

America teetered on the edge, necessitating 

a federal bailout. 

The economic and psychological 

scars of the financial crisis and the 

ensuing recession linger, as do the 

industry’s public-relations woes. 

In terms of financial metrics 

such as earnings, dividends for 

shareholders and the ability to absorb 

potential losses in the event of 

a recession, however, the financial 

sector clearly has turned a page. 

The banks tested by the Fed now 

have a $1.25 trillion capital cushion, 

compared with less than half that in 


In a July 5 statement, Michael 

Corbat, chief executive of Citigroup, 

said, “Today marks a significant 

milestone for Citi and our shareholders.” 

The Fed’s assessment, he 

said, demonstrated that “Citi has 

the ability to withstand a severe 

economic scenario and remain well 

capitalized, while also substantially 

increasing our level of capital return.” 

Although President Donald 

Trump has promised to roll back 

many of the rules imposed after 

the financial crisis while appointing 

regulators with a much lighter 

touch, many bank analysts say that 

memories of 2008 and the penalties 

that followed nonetheless will inhibit 

risk-taking in the future. 

“Parts of the industry had a 

near-death experience, while some 

financial institutions actually had 

a death experience,” Moszkowski 

noted, adding that, as was the case 

following the crash of 1929, “the legislative 

and regulatory response was 

quite harsh.” 

“(The 2008 crisis) forced the U.S. 

banking system to recognize its 

losses and recapitalize itself quickly,” 

Moszkowski said. “The lack of 

that type of pressure in Europe has 

contributed to what has been a longer 

period of weakness and recovery 

there.” 

With European banks still hobbled, 

American banks have benefited 

in recent years, boosting their 

share of global revenues from underwriting 

and advice on mergers 

and acquisitions. 

Nearly a decade of historically 

low interest rates, engineered by the 

Fed, also has helped banks rebuild 

their financial fortunes, even as savers 

and investors watched the yields 

on their money-market accounts 

and certificates of deposit shrink. 

“The banking industry has pretty 

radically de-risked its balance 

sheet,” said Chris Kotowski, a senior 

research analyst at Oppenheimer. 

For example, he said, in 2007 

banks held more than $250 billion 

dollars’ worth of corporate bonds 

on their trading desks and other 

accounts. By April 2017 that figure 

stood at only a little more than $54 

billion. 

The current rate of delinquencies 

on products such as credit cards and 

commercial-real-estate loans is half 

what it was during previous periods 

of healthy economic growth, 

Kotowski added. 

At the same time, while banks 

may have the ability to lend more 

freely, anemic demand for credit 

and slow economic growth are likely 

to restrain new loan growth. The Fed 

is only now in the process of slowly 

raising interest rates in the face of 

what policy-makers see as stronger 

economic growth. If rates keep 

moving up, higher borrowing costs 

for businesses and consumers most 

likely would offset whatever benefit 

slightly easier credit from a healthier 

banking system provides. 

There are other shifts by big 

banks, wrought by the financial crisis 

and the long economic recovery 

since then, that won’t be reversed. 

After shedding tens of thousands 

of workers and shuttering hundreds 

of branches, the banking industry 

isn’t about to go on a hiring or building 

spree. 

“Necessity is the mother of invention, 

and banks have been 

forced to operate more cheaply,” 

Moszkowski said. “Changing customer 

behavior, like use of mobile 

banking, has also enabled them to 

cut back on branches and staff.” 

While bankers themselves might 

be more cautious about lending or 

about blurring the distinction between 

traditional banking and Wall 

Street-style trading, one element of 

the go-go years has made a comeback 

recently: big pay packages for 

top executives. With the big rally in 

bank stocks since the election in November, 

the options packages and 

other stock-based incentives that 

bank executives received in recent 

years have swollen in value. 

“Executive compensation hasn’t 

declined since the financial crisis,” 

Williams said. “It’s gone up.” 

In 2016 J.P. Morgan Chase chief 

executive Jamie Dimon received 

a total pay package of $28 million. 

In 2006 his overall compensation 

equaled $27 million. 

For his part, Kotowski believes 

that memories of Lehman, plus the 

enormous fines paid to regulators, 

will serve as a check on appetite for 

risk for years to come. 

“Even if bankers all started behaving 

like drunken sailors tomorrow,” 

Kotowski said, “it would take 

years before problems arose.” 

(Nelson D. Schwartz is an economics 

writer for The New York 

Times.) 

2017 Harvard Business School Publishing Corp. Distributed by The New York Times Syndicate



C002D5556 

COMMENT 

CHRISTOPHER AKOR 

Chris Akor, a First Class 

graduate of Political Science, 

holds an MSc in African Studies 

from the University of Oxford and 

is BusinessDay’s Op-Ed Editor 

christopher.akor@businessdayonline.com 

With the recent dismissal 

of the asset 

declaration case 

against the Senate 

President, Bukola 

Saraki, not many people are still 

optimistic that the anti-corruption 

fight of this administration will still 

bear much fruit. The two-man panel 

of the Code of Conduct Tribunal did 

not even deem it necessary to call 

the Senate President to enter his 

defence as it unanimously upheld 

the no-case submission filed by the 

Saraki. According to the Chairman 

of the CCT, the evidence adduced by 

the prosecution was “so unreliable 

that no reasonable tribunal could 

convict” anyone based on it. 

Saraki’s acquittal is the latest in a 

series of high profile corruption cases 

the government has lost or bungled 

in the last two years. The most painful 

part is not even that the cases are 

lost but the way the judges dismiss 

the cases. Just like in Saraki’s case, 

most of the judges do not even bother 

to call on the accused to enter their 

defence. They just simply uphold 

the “no case” submissions of the 

accused after the prosecution had 

laboured in vain, over many months 

or years, trying to prove their cases. 

Justice Jude Okeke, in dismissing 

the case against Justice Ademola, his 

comment is free 

Send 800word comments to comment@businessdayonline. 

What is needed to salvage Nigeria’s 

shambolic anti-corruption fight? 

wife and Joe Agi, spoke the minds 

of many judges who handle cases 

of corruption in Nigeria when he 

advised prosecution agencies to 

“ensure proper investigation of matters 

before proceeding to court” and 

that “the court of law cannot rely on 

mere speculations to condemn any 

defendant”. 

True, our anti-corruption agencies 

are so weak and lack the capacity 

to successfully prosecute 

corruption cases. Shoddy and lazy 

investigation and incompetent 

prosecution often combine to scuttle 

many of such cases. Besides, the 

corrupt often fight back, according 

to acting president Osinbajo, with 

tremendous resources by spending 

lavishly on “Ogbologbo lawyers” to 

outwit clueless prosecutors. 

But the weakness and incapacity 

of our anticorruption agencies alone 

do not explain the failure to successfully 

prosecute corruption cases. As 

Olu Fasan, one BusinessDay’s most 

incisive columnist argued, “...all over 

the world, corruption is notoriously 

difficult to detect and successfully 

prosecute.” The main reason being 

that “the legal principle ‘He who asserts 

must prove, not he who denies’ 

puts excessive legal and evidential 

burden on the prosecution and allows 

the accused, who usually have 

unlimited resources, often stolen 

money, to frustrate the prosecution. 

And, of course, the court is limited to 

the evidence adduced by the parties, 

and can’t inform itself by adducing 

its own evidence. It must come to 

a decision, even if the evidence is 

inadequate or inconclusive. In these 

circumstances, the prosecution that 

can’t adduce probative evidence to 

prove to its case will lose out.” 

We know from history that the 

real cause of corruption is the 

absence of a real and capable 

state. However, in the fight 

against corruption in Nigeria, 

the emphasis is not on the creation 

or building of a capable 

state (strong institutions as well 

as institutions of restraints) 

but on the enactment of laws 

and creation of agencies that 

are still subject to the whims 

and caprices or in the Nigerian 

parlance “the body language” 

of the ‘big man’ 

But we cannot just shrug our hands 

and lament. Corruption is one of the 

greatest impediments to development 

and until it is successfully stopped or 

curtailed, we cannot successfully fight 

poverty, diseases and other by-product 

of underdevelopment. The respected 

columnist, lawyer and political economist 

therefore proposes a reversal of 

the burden of proof in corruption cases 

“so that where someone is accused, 

say, of receiving a bribe or of being in 

possession of unexplained wealth, the 

onus is on the accused to prove that 

he or she is not guilty of the offence.” 

Of course, that proposal isn’t entirely 

new. As he pointed out himself, 

quite a number of countries – both 

developed and developing – have successfully 

reversed the burden of proof 

with positive results. The overriding 

consideration is the “prevalence of corruption 

worldwide and the difficulty 

of proving intention, even where the 

circumstances are strongly suggestive 

of criminality.” 

I am neither a lawyer nor a legal 

expert and do not readily comment 

on matters I’m not very conversant 

with. But if I must air my views, I think 

this proposal, while persuasive and 

logical, will be very problematic in Nigeria 

and will create more problems 

than it is meant to solve. While the 

weakness and incapacity of prosecutorial 

authorities is often cited for the 

loss of most of these cases, a nuanced 

reading of events will reveal a different 

story – the lack of political will to 

ruthlessly and dispassionately fight 

corruption in Nigeria. This, for me, 

accounts for the failure of our various 

anti-corruption wars since 1999 

and not the weakness or incapacity 

of prosecutorial agencies. 

For instance, it was clear from the 

outset that the arraignment of Saraki 

at the CCT was for purely political 

reasons. While being arraigned at the 

CCT, the Senate president was subjected 

to a harsh and rigorous media 

trial as well as adverse public opinion 

to force his resignation or impeachment. 

To further drive the pressure, 

both the Senate President and his 

deputy were arraigned in court for 

forging the order rule book of the 

Senate. But once the goal of removing 

him from office wasn’t achieved, 

the government virtually abandoned 

the cases. While it discontinued the 

case on forgery of Senate rule book, 

the one at the CCT was allowed to 

continue but prosecuted shoddily. 

Certainly, only one outcome was 

possible. 

Perhaps, the most perplexing of 

the cases was the one against the former 

minister of Niger Delta, Godsday 

Orubebe, who was accused of diverting 

N2 billion. It was an embarrassed 

Attorney General that confirmed 

that the N1,965,576,153.46, which 

Orubebe allegedly diverted, “has 

not been expended, but is awaiting 

further contract decisions and directives 

from the ministry of Niger-Delta 

Affairs”. It was obvious that the trial 

was a phantom one. 

We know from history that the real 

cause of corruption is the absence 

of a real and capable state. However, 

in the fight against corruption in 

Nigeria, the emphasis is not on the 

creation or building of a capable state 

(strong institutions as well as institutions 

of restraints) but on the enactment 

of laws and creation of agencies 

that are still subject to the whims and 

caprices or in the Nigerian parlance 

“the body language” of the ‘big man’, 

who use the agencies to prosecute his 

political battles. Obasanjo was most 

famous for this. 

Nigeria, just like Uganda and 

many other African countries claiming 

to fight corruption, may just be 

engaged in what Harvard’s Ricardo 

Hausmann terms ‘isomorphic mimicry’ 

– the creation of institutions 

that act in ways to make themselves 

“look like institutions in other places 

that are perceived as legitimate,” but 

which in reality are not. Nigeria’s 

anti-corruption war thus far involves 

the use the media to demonise, to 

persecute, and to destroy people’s 

personal and political capital and 

has nothing to do with rooting out 

corruption in the country. Surely, 

no one will suggest that the burden 

of proof be reversed in such a polity! 

Send reactions to: 

comment@businessdayonline.com 

EJIKE NWOLISA 

Nwolisa is an economist based in 

Lagos 

The economics of madness 

Economics is not often associated 

with the insane. The discipline 

is anchored on human rationality. 

However, economics 

cannot be completely separated from 

“societal madness”. For instance, mental 

ill-health and poverty has a cyclical 

relationship; poverty increases the risk 

of mental disorder and having a mental 

disorder increases the likelihood 

of descending into poverty. Research 

has consistently shown that economic 

crises negatively affect the population’s 

mental health. A holistic look at the 

lives of ordinary people whose mental 

state have been turned upside down by 

economic policies buttresses this fact. 

According to Michael Foucault, the 

author of Madness and Civilization, 

madness is not a natural unchanging 

thing but rather depends on the society 

in which it exists. How a society treats 

their mad people is a reflection of their 

humanity and advancement. In USA, 

the state of Indiana once legalized the 

sterilization of lunatics, idiots, criminals 

and imbeciles to prevent their 

procreation. England enacted Lunacy 

Act to confine lunatics, the ancient Romans 

created fools courts for amusement 

and Australia once regarded 

madmen as special beings endowed 

with supernatural powers. All these 

ill treatments of mad people changed 

over time as mankind realized that no 

one is completely immune to insanity. 

Madness is everywhere and can 

commence at any time. An unexpected 

event can abruptly change the 

most reasonable and intelligent man 

into a roving idiot. Economic hardship 

for example can severely damage our 

human sensibilities. This is a painful 

reminder of how close man is to the 

edge of reason. 

It is possible to harness the positives 

of the mentally challenged for the 

good of the society. Some researchers 

even claim that creativity can be linked 

to a certain degree of madness. In our 

own society, despite their challenges, 

the mentally challenged have continued 

to contribute to our national GDP 

in their own unique ways over the 

years, though unreported. This might 

sound bizarre, illogical, inhuman or 

unethical but it is certainly factual. 

Before you think that the author is 

insane, pause a little and ponder over 

the following everyday scenes in our 

cities and villages. 

Scenario one: During work rush 

hours, do we not see drug addicts/ 

street urchins and quasi mad men 

controlling traffic? If we do, it is unfair 

not to acknowledge their contribution to 

economic growth. If time is money then, 

anything that helps to reduce travel time 

surely contributes to national economic 

growth. 

Scenario two: In our market places, 

we have mad men music orchestra that 

produce sweet melodies that are appreciated 

well enough for passers-by to part 

with their hard earned money in recognition 

of their special talents. Music is about 

organizing chaos when so many people 

with so many instruments come together 

to create something harmonious. The 

synchronization of these mad men’s 

make shift musical instruments confirms 

that indeed order can come out of 

chaos. The elite can pay thousands to be 

entertained but mad men are providing 

entertainment services free of charge to 

the common men who cannot afford the 

fees charged by professional entertainers. 

If happy people make a prosperous nation 

then these special people contribute 

to national prosperity. 

Scenario three: In our villages, the 

quasi mad people (drunkards and 

charlatans) hiding under the cover of 

the spirit of irresponsibility often reveal 

dreaded truths that sane men could not 

dare to make public. Thus, the speech of 

a ‘mad man’ which ought to be worthless 

could indeed be of immense economic 

benefits since in all human interactions 

(economic transactions inclusive) availability 

of authentic information can be 

the key determinant to success. 

Scenario four: if there is no madness 

to mimic, the comedians who now make 

good money mimicking drunkards and 

their likes will not be in existence today. 

Jesters as professionals have withstood 

civilization over the ages. Till today, 

the speech of a madman is money and 

playing the fool is now a multi-billion 

naira profession. 

It might interest the policy makers to 

know that psychiatric service is one of 

the few professions that defy economic 

cycles. As economic woes worsen, drift 

to madness increases. In the same token, 

as economic prosperity advances, 

drift to binge drinking and other wild 

lifestyles of drugs and ecstasy which 

ultimately leads to addictions become 

the order of the day. In both cases, the 

psychiatric profession experiences a 

boom. 

While this set of really mad people 

highlighted above truly deserves our 

help, there is another set of mad people 

who genuinely deserve our condemnation. 

Tragically, this special set of people 

will never believe that they are indeed 

mentally degraded but their actions 

and inactions manifest madness of a 

higher order. 

Consider the following set of “mad 

men” - pastors who humiliate, molest 

and dupe their congregations; 

politicians who brazenly steal from the 

national treasury(some hide money in 

cemeteries and sewages, others burn 

stolen money in cemeteries for spiritual 

protection); our men in uniform 

who bully and sometimes kill without 

provocation innocent citizens they are 

supposed to protect; our lecturers who 

trade marks for sex and money thereby 

flooding the labour market with unemployable 

graduates; drivers who 

drive against the traffic, who endanger 

their lives and lives of others for no just 

reason; unclad ladies who walk about 

half naked distracting the few productive 

people.The madness of greed in 

our society today is one of our greatest 

banes as a nation. The list is endless. 

Unfortunately, this group of “special 

people” constitute security risk to 

our national economic development. 

They inflict their greatest damage on 

the psyche and values of the populous. 

With their actions and apparent 

success they foster on the nation the 

notion that “hard work does not pay”. 

Consequently, the citizens and other 

economic agents often make choices 

that are not in the overall interest of the 

economy, after all “if you can beat them, 

you join them”. 

The prevalence of corrupt leaders 

(a special set of mad men stealing what 

they don’t need) in our society has ensured 

that even the good ones with the 

very best of intentions will be treated 

with skepticism. The resultant impact 

is that the positives of expectation effect 

are lost. It is therefore more difficult for 

policies and programmes that worked 

well in other climes to function effectively 

in our own environment. 

Note: the rest of this article continues 

in the online edition of 

Business Day @https://businessdayonline.com/


COMMENT 

BONGONOMICS 

BONGO ADI 

Bongo Adi, PhD is a faculty member 

of Lagos Business School 

There are undoubtedly, 

more schools today - 

primary, secondary 

and tertiary - than there 

has ever been in Nigeria’s 

history. This has translated 

to an ever increasing higher level 

of schooling for an individual Nigerian, 

measured by number of 

years spent in formal education. 

From a low of less than two years 

in 1950, the level of schooling for 

any random person in Nigeria has 

tripled to more than 6 years today. 

This increasing trend has marched 

on with a simultaneous explosion 

in the number of schools and 

colleges. 

But this triple increase in the 

average number of years spent 

in school and the explosion in 

number of schools seem to have 

largely proceeded to the detriment 

of quality and relevance. While 

schools and schooling have expanded, 

quality, competence and 

relevance have progressively deteriorated, 

even becoming abysmal. 

The situation has become so bad 

to the order that a typical university 

graduate today has educational 

competence that sometimes rivals 

that of a 4th grader in 1976. The 

Economist in January argued that 

just 1 in 4 of secondary school 

students in countries such as Nigeria 

could reach the basic level of 

attainment in standardized international 

tests. 

Deteriorating quality is unfor- 

comment is free 

Send 800word comments to comment@businessdayonline. 

Our education - The ticking time bomb 

tunately, not the only problem 

our education faces. As bad as it 

is, our schools are grossly insufficient 

to meet the demands of the 

teeming population that is 65% 

young people. So, even the bad 

school is not enough to go round. 

Although schools seem to have 

mushroomed out of every nook 

and cranny of this country, yet 

there seems to be a huge shortfall 

in availability and the gap between 

supply and demand looms large. 

It is on record that 2 out of every 

5 Nigerian children aged 6 - 11 

are out of school. According to 

a 2016 UNESCO report, Nigeria’s 

out of school children totals more 

than 10.5 million which accounts 

for 47% of total out of school children 

in the world - the largest in 

the world. To the North of the 

country, the dismal statistics is 2 

out of every 3 infants out of school. 

Alongside these trends is the 

increasing loss of confidence in 

public schools which has fueled 

the explosion of private schools 

across the three levels of education 

in the country since 1983. Between 

2006 and 2016, enrollment 

into private secondary schools in 

Nigeria grew from 11% to almost 

42%, a three-fold increase over a 

decade. The public secondary 

schools that produced the bulk 

of Nigeria’s current class of leaders 

have all but become an effigy 

of what they used to be. Their 

dismal state is evidently manifest 

in the Cowbell Mathematics 

competition which has been won 

by a disproportionate number of 

private secondary schools over the 

past 19 years of the competition. 

Proceeding to the tertiary level, 

the University of Ibadan, ranked 

801st in 2016 by Times Higher 

Education is the only Nigeria university 

appearing in the top 1000 

universities in the world. Our 

universities have progressively 

become a mere totem and a rite of 

Without sound 

educational system, 

all the talks about 

competitiveness, 

innovation, 

knowledge-based 

economy, productivity, 

economic 

diversification remain 

mere political rhetoric 

passage for young people. Trapped 

in antiquated teaching technologies 

and less than medieval conditions, 

they have become increasingly 

incapable of producing functional 

education. Science, Technology, 

Engineering and Mathematics 

(STEM) education lag behind other 

countries in Africa. The recent 

World Economic Forum’s Human 

Capital Optimization Index shows 

that on a scale of 1 (worst) to 7 (best) 

Nigeria scores 2.6, below the global 

average of 3.8. Kenya, Rwanda, 

Mauritius, Cote d’Ivoire, Zambia 

and Ghana all score above 4. The 

conclusion to this is that Nigeria’s 

educational system is not able to 

compete in the new global system. 

To underscore the link between 

university education and economic 

development, the Nobel Prize in 

Economics have been awarded 3 

times to economists whose major 

contribution has been on the link 

between education or human capital 

and economic growth. Theodore 

W. Shultz (1979), Gary Becker (1992) 

and James Heckman (2000) made 

significant contributions to understanding 

the link between education 

and economic growth. Education 

C002D5556 

can increase the human capital 

inherent in the labour force, which 

increases labour productivity and 

thus transitional growth toward 

a higher equilibrium level of output. 

Education can also increase 

the innovative capacity of the 

economy, and the new knowledge 

on new technologies, products, 

and processes promotes growth. 

Finally, education can facilitate 

the diffusion and transmission of 

knowledge needed to understand 

and process new information and 

to successfully implement new 

technologies devised by others, 

which again promotes growth. 

It is therefore disturbing when 

the government continually decrease 

allocation to education and 

still make policy statements in the 

manner of boosting competitiveness, 

innovation, productivity etc., 

as if these can be conjured up out 

of outer space. 

California as a state in the United 

States of America houses almost 

all the most valuable companies 

in the world today. Alphabet, Microsoft, 

Facebook, Apple, Amazon, 

Dell etc. are all based in Silicon Valley, 

California. It has been shown 

that the Silicon Valley technology 

cluster was attracted by California 

Institute of Technology and Stanford 

University - two academic 

institutions at the forefront of most 

advanced research and development 

in information and communications 

technology. These 

companies feed off the knowledge 

developed in these educational 

institutions in a mutually synergistic 

way. 

Without sound educational 

system, all the talks about competitiveness, 

innovation, knowledgebased 

economy, productivity, 

economic diversification remain 

mere political rhetoric. There is 

a very strong positive correlation 

between country’s investment in 

education and its growth. Coun- 

BUSINESS DAY 

11 

tries that have developed have rode 

on the back of the academic-industrial 

complex, whereby Research 

and Development is co-produced 

between the academia and the 

industry. 

Our education will continue to 

lack relevance unless there is a connection 

between what happens in 

industries and what lecturers and 

their students do in the classroom 

and laboratories. Unfortunately, 

this linkage is completely nonexistent 

in Nigeria today and there 

is no clear policy towards addressing 

this disconnect. 

At the same time, the world 

of work is rapidly changing as 

new technologies and processes 

disrupt established ways of doing 

things. This calls for new skillsset 

to cope with rapidly changing 

workplaces. But before this can be 

achieved, there is the other necessity 

of building the infrastructure 

that would enable an adaptive 

system to ensure that trends are 

timely identified and requisite 

interventions made. It is said that 

today’s students need “twenty-firstcentury 

skills,” like critical thinking, 

problem solving, creativity, and 

digital literacy. The ILO posits that 

an additional 280 million jobs will 

be required come 2019. Therefore, 

in order not to be left far behind, 

policies must be enacted to ensure 

that frameworks and incentives are 

installed so that those jobs can be 

created and filled. Robust education 

systems – underpinned by 

qualified, professionally trained, 

motivated, and well-supported 

teachers – will be the cornerstone 

of this effort. As new development 

unravel our oil economy and 

unveils a post-oil future, it will be 

tragic if we fail to anticipate these 

transitions whose necessity can no 

longer be denied. 

Send reactions to: 

comment@businessdayonline.com 

RALPH AKPAN 

Ralph Akpan is an energy consultant 

with experience spanning over two 

decades with proven track records 

Despite the difficult operating 

conditions in 

Nigeria’s upstream oil 

and gas sector over the 

last few years, Nigerian companies 

are beginning to demonstrate the 

technical achievements that can 

be delivered if indigenous engineers 

are given the opportunity 

to innovate. 

As recently as 6 years ago, while 

30% of Nigerian upstream assets 

were in the hands of Nigerian oil 

and gas companies, only 5% of 

Nigerian production could be attributed 

to local ownership. 

Today, not only has that ratio 

improved dramatically following 

acquisitions of IOC assets by 

indigenous companies, and the 

steady growth of production from 

indigenous owned assets, but 

Nigerian engineers are starting to 

come into their own. 

In-country technological development 

requires the commitment 

and active participation 

of all stakeholders –from the 

development of enabling policies 

by the government, to private 

Investment in indigenous technology solutions improving 

efficiency in the Nigerian oil and gas sector 

sector players’ commitment to 

indigenous talent development 

and the provision of the financial 

resources to grow local capacity in 

a sustainable way. 

While many of our engineers 

were developed and trained by the 

IOC’s and can claim to be globally 

relevant, it has taken longer for a 

Nigerian company to own not just 

the financial benefits of an oil and 

gas asset, but to be at the cutting 

edge of technological development 

as well. 

Take the Ebok field offshore 

Akwa Ibom as an example. Already 

delivering 70% of Nigeria’s 

marginal field production with 

over 25,000 bpd, the technical 

team behind Ebok’s success are 

not willing to be complacent, 

especially in an environment 

of relatively low and potentially 

volatile oil prices. The need for 

production optimization and 

maximum reliability in a maturing 

field has never been greater. 

That is why the team at Oriental 

Energy Resources have been fo- 

cused on improving the company’s 

ability to detect faults in critical 

field infrastructure, before they 

can cause significant damage and 

downtime. 

The technology systems used 

in oil production are extremely 

complex and dynamic, and faults 

can appear at multiple points. Gas 

locking, changes in fluid characteristics, 

plugged pumps, and stuck 

valves are just some of the things 

that can degrade the performance 

of vital systems. 

Take the Electrical Submersible 

Pump (ESP). Regarded as one of 

the most critical components for 

oil production, it can be susceptible 

to this sort of degradation, with 

significant consequences on uptime, 

production targets, company 

revenue and government royalties. 

Understanding where faults can occur 

and actively ensuring that they 

don’t can be the difference between 

thousands of barrels of oil production 

every day, enabling the asset 

owner to maximize production and 

minimize costs. 

To effectively detect faults and 

better manage operations of the 

ESP technology, Oriental Energy 

Resources’ technical team have 

developed a data analytics system. 

The system conducts knowledge 

discovery and prescriptive analyses 

through multi-dimensional 

data flows, in order to detect 

events and subsequently, provide 

management recommendations to 

address and solve potential problems 

before they arise. The system 

is made up of an input devices 

layer, which retrieves information 

from multiple sources, and manages 

and stores production data 

for wells in multiple geographical 

locations across the world; subsequent 

layers – data collection and 

aggregation, cleaning and preprocessing, 

processing and event 

detection, intelligent control and 

real-time information publishing 

– then take the data collected and 

proffer recommendation-based 

production optimization methods 

for the ESP system. 

Test results demonstrate that 

the proposed methodology can 

be efficiently used in a wide range 

of ESP systems for performance 

management and surveillance, and 

so optimize production operations. 

Led by Technical Manager 

Obehi Eremiokhale, the Oriental 

Energy Resources technical team 

believe this is the first of many 

indigenous innovations that can 

continue to drive down costs, 

and increase efficiency across the 

industry. Innovation is vital in any 

engineering operation, and by 

investing in technology, and local 

talent, Oriental are demonstrating 

that they can deliver solutions 

that improve uptime and reduce 

cost that are entirely domestically 

designed and implemented. 

By investing in developing technical 

and educational capacity 

across Nigeria, Oriental believes 

that it can stimulate greater investment 

in domestic capacity, the 

introduction of new ideas and encourage 

the next generation to look 

for ways to add value to Nigeria’s oil 

and gas sector.

Thursday 20 July 2017 C002D5556 BUSINESS DAY 13 

COMPANIES 

& MARKETS 

COMPANY NEWS ANALYSIS AND INSIGHT 

First Bank debuts 

Financial Literacy 

Programme in Ebonyi 

State 

P14 

African Alliance turns profitable 

on reduced contract liabilities 

BALA AUGIE 

African Alliance Insurance 

Plc reported 

a better than expected 

results for its 

latest quarter as the 

Nigerian Life insurer returned 

to profitability, thanks to a reduction 

in changes in contract 

liabilities. 

For the year ended December 

2016, African Alliance recorded 

a profit after tax of N3.02 

billion from a loss position of 

N4.92 billion the previous year. 

Six out of the nine analysts 

polled by BusinessDay had 

forecast a profit of N3.50 billion. 

The return to profitability 

was underpinned by a 60.64 

percent reduction in contract 

liabilities to N5.14 billion and a 

159.25 percent spike in fair value 

gain on investment properties. 

Reduction in contract liabilities 

also bolstered underwriting 

performance as the Nigerian 

insurer recorded underwriting 

profit of N1.21 billion, an 

improvement from the N4.95 

billion loss recorded last year. 

African Alliance is profitable 

and there are no threats to 

its going concern status as its 

combined ratio (CR) of 56.70 

percent is lower than the 100 

percent global threshold despite 

mounting claims expenses. 

The combined ratio is calculated 

by taking the sum of 

incurred losses and expenses 

and then dividing them by 

earned premium and many 

insurance companies believe it 

is the best way to measure the 

success of an insurer since it 

does not include investment income, 

and only includes profit 

that is earned through efficient 

management. 

African Alliance claims 

expenses increased by 42.88 

percent to N7.26 billion on 

the back of the devaluation of 

the Naira by the Central Bank 

of Nigeria. 

Claims ratios moved to 49.48 

percent in December 2016 as 

against 35.77 percent ad at December 

2015. This means the 

insurer paid N49 for every unit 

of premium collected. 

African Alliance and other 

insurance firms are operating 

in a tough environment held 

hostage by illiteracy, poverty, 

and cultural beliefs that prevent 

people from taking insurance 

cover. 

In some parts of the country, 

taking up a life insurance is a 

taboo because most people see 

such a package as a premonition 

of their own death. 

The aforementioned impediments 

are on top of other 

changes such an economic 

downturn brought on by a sharp 

drop in oil price since mid-2014 

and a severe dollar shortage 

and weak regulations by government. 

The insurance sector’s Gross 

premium to GDP ratio of 0.4 

percent in 2015 was well below 

that of South Africa (14.7 

percent) and Malaysia (4.8 

percent). 

Nigeria’s economy contracted 

by 0.52 percent in 2016 

and inflation for the month of 

June stood at 16.10 percent, 

according to a recent report 

by the National Bureau of Statistics 

(NBS). 

Inflation has been above the 

upper end of the central bank’s 

target band of 6 percent to 9 

percent for two years. 

African Alliance felt the 

pinch of Nigeria’s macroeconomic 

challenges as gross premium 

written (GPW) dipped by 

4.80 percent to N14.255 billion 

as at December 2016. 

The Nigerian insurer’s operating 

expenses were flat at 

N2.39 billion while underwriting 

expenses dipped by 12.13 

percent to N1.06 billion in the 

period under review. 

The Company’s total assets 

stood at N45.33 billion as 

at December 2016 while total 

shareholder’s fund was N5.74 

billion the same period. 

Manufacturing needs to contribute 20% of Nigeria’s potential $1 trillion economy 

… As experts advocate stakeholder engagement for sector growth 

ODINAKA ANUDU 

Experts want Nigeria’s 

manufacturing sector 

to contribute at least 

20 percent to Nigeria’s 

gross domestic product (GDP), 

insisting that the country can 

only be counted among the 

giants if output in its economy 

reaches up to $1 trillion. 

They say there is a need for 

constant engagement between 

the public and the private sector 

the economy. They argue 

that this is the only way the government 

can properly understand 

the needs, requirement 

and enablers of the manufacturing 

sector so as to provide 

the environment in which the 

sector can thrive. 

Asue Ighodalo, chairman of 

Sterling bank, while speaking at 

the inaugural conference of the 

Association of Company Secretaries 

and Legal Advisers in the 

manufacturing sector (ACSLA), 

said that a country that plans to 

settle comfortably in the first 

world must have a GDP tending 

towards one trillion dollars with 

at least 20 per cent contribution 

from the manufacturing sector. 

“A GDP contribution of the 

manufacturing sector of less 

than nine per cent is totally 

unacceptable. Before we tackle 

government, what have we 

done? I believe that if all our 

companies are well governed, 

you comply and provide the 

financial statements that are 

reliable, and then you can 

engage government,” Ighodalo 

said. 

He called on the government 

and its agencies to encourage 

export by reducing the 

bottlenecks for obtaining export 

permit. 

“I also believe that in ensuring 

their companies are properly 

governed, that’s also a low 

hanging fruit, so they can start 

work from those areas,” he said, 

while speaking on the theme: 

‘Setting a new agenda for sustainable 

economic growth – the 

imperative of forging a public/ 

private sector engagement’. 

Oscar Onyema , chief executive 

officer of the Nigerian 

Stock Exchange (NSE), 

stressed the need to build a 

viable and legal frame work 

for the manufacturing sector. 

“The benefits the exchange 

offers the manufacturing sector 

is global, diverse, nucleus 

and all encompassing. The 

exchange is of the opinion 

that the sustainable economic 

growth cannot be success- 

fully achieved without a firm 

handshake between the public 

and private sector with 

both sectors leveraging on the 

financial infrastructure, technology 

and above all benefits 

that the exchange provides 

for the ease and efficiency of 

doing business in Nigeria and 

towards the development of the 

economy in general,” Onyema 

said through his representative 

Irene Robinson-Ayanwale, who 

is the legal adviser and head 

of the legal department of the 

Exchange. 

Manufacturing contributes 

just about 9 percent to the Nigeria’s 

GDP, estimated to have 

a maximum size of $440 billion. 

Muda Yusuf, director-general 

of the Lagos Chamber 

of Commerce and Industry 

(LCCI), observed that since the 

economy is largely operated by 

the private sector, there is need 

for the chamber to be consistent 

in its advocacy. 

He argued that the resources 

from the budget cannot 

make any dramatic impact on 

the problems that need to be 

addressed. 

“Most of the sectors like ICT 

are almost 90 percent private 

sector, education too where 

government is supposed to 

take a lead is almost taken over 

by the private sector. Transportation, 

oil and gas, hospitals, 

manufacturing, among others, 

this is another failure of governance,” 

he said. 

“This is to tell you that it is 

the private sector that is actually 

driving this economy and 

therefore if we are the one driving 

it, we need to ensure that we 

have the right policies and we 

have the right institutions, and 

we can only get that through 

a very structured engagement 

with government. We need to 

strengthen our engagement,” 

he said.

14 

BUSINESS DAY 

COMPANIES & MARKETS 

Actis builds first pan-African 

higher education network 

C002D5556 


STEPHEN ONYEKWELU 

Actis, a leading investor 

in growth 

markets, has built 

the first pan-African 

private higher 

education network bringing 

together the leading tertiary 

education institutions in 

North and Southern Africa. 

The network, which is 

called Honoris United Universities, 

is designed to harness 

the collaborative intelligence 

and the pioneering efforts of 

these institutions to educate 

Africa’s next generations of 

leaders and professionals. 

There are over 600 accredited 

universities in Africa. 

Luis Lopez, newly appointed 

CEO of Honoris United 

Universities, expressed delight 

at introducing Honoris United 

Universities, which he said is a 

unique platform providing international 

quality education. 

“It is rooted in the vision of 

the founders of the member 

institutions. Aware of the vital 

need for their communities to 

develop human capital, they 

have each worked for decades 

to build relevant and demanding 

academic models with the 

dual objectives of developing 

the employability and the 

life skills of their graduates,” 

Lopez said. 

This initiative will help 

African universities take their 

proper place in resolving African 

challenges and in terms 

of development, science, technology, 

and all the economic 

output that should come from 

it. 

Wellington Oyibo, professor 

of medical parasitology 

and director of the Research 

and Innovation Centre at the 

University of Lagos in said 

that when universities come 

together to share strengths 

the multiplier effects would 

be enormous, given that North 

and Southern Africa universities 

have different set of 

strengths. 

“When these strengths are 

shared, and leveraged upon, 

development could easily 

be escalated across the subregions,” 

Oyibo told Business- 

Day in a phone interview. 

Actis began with “beacon” 

markets in Francophone 

Africa. In December 

2014, it made an investment 

in Université Centrale 

Group, the leading 

post-secondary education 

group in Tunisia. In 2016, 

the platform expanded to 

Morocco, creating a Northern 

Africa Hub through its 

investment in Université 

Mundiapolis. Mundiapolis 

L-R: Tunji Kazeem, chief risk officer, Nigerian Stock Exchange (NSE); Babalola Obilana, executive director, Stanbic IBTC Asset Management 

Ltd (SIAML); Bunmi Dayo-Olagunju, chief executive, SIAML; Haruna Jalo-Waziri, executive director, business development, NSE; Ifeoma 

Esiri, chairman, SIAML; Shuaib Audu, executive director, SIAML; Titi Ogungbesan, chief executive, Stanbic IBTC Stockbrokers Ltd; Tony 

Ibeziako, head, domestic primary markets, NSE, and Oladele Sotubo, executive director, Stanbic IBTC Pensions Managers Ltd, during the 

bell ringing ceremony for the listing of the SIAML Dollar Fund at the NSE in Lagos. 

Pic by Pius Okeosisi 

is renowned for its international 

approach and focus 

on employability. 

Honoris United Universities 

will first settle in South 

Africa, an important Anglophone 

beacon market that 

will anchor the platform in 

Southern Africa. Subject to 

regulatory approvals, Honoris 

has entered into an investment 

agreement with Management 

College of Southern Africa, 

better known as “MANCOSA”, 

and the REGENT Business 

School. Together, MANCOSA 

and REGENT are South Africa’s 

leading private distance 

learning institutions, focused 

on providing accredited, accessible 

and affordable education. 

These agreements in Morocco 

and South Africa mark 

the genesis of the pan-African 

education leadership 

position that Honoris United 

Universities seeks to cement. 

As a whole, Honoris United 

Universities will offer more 

than 100 degrees in fields 

including Health Sciences, 

Engineering, IT, Business, Law, 

Architecture, Arts and Design, 

Media, Education and Political 

Science. Delivery is focused 

on student success and accessibility 

and includes a blend of 

on-campus, learning centers 

and distance learning. 

First Bank debuts Financial 

Literacy Programme in 

Ebonyi State 

First Bank of Nigeria 

Limited (FBN) 

has expanded its 

Financial Literacy 

programme to the Eastern 

part of the country with the 

launch of its Financial Literacy 

programme for Secondary 

Schools in Ebony State, under 

the auspices of the FirstBank 

FutureFirst Programme. 

The initiative launched 

in 2013 in partnership with 

Junior Achievement Nigeria 

and the Lagos State Empowerment 

& Resource Network 

(LEARN) is designed to empower 

students of secondary 

schools with requisite 

knowledge of financial literacy 

and career counseling 

to equip them with knowledge 

of money management, 

early entrepreneurship skills, 

and financial independence 

whilst stimulating the development 

of a savings culture 

at an early age. 

The FutureFirst Financial 

Literacy Programme is an 

ongoing Corporate Responsibility 

initiative of FirstBank 

which aligns with the Bank’s 

Sustainable Finance objective, 

a key focus area of the Bank’s 

Corporate Sustainability and 

Responsibility Strategy. The 

Bank has recorded immense 

success in implementing the 

programme in Lagos, Port 

Harcourt, Enugu and Abuja 

which saw staff volunteer their 

time and resources to teach 

students in over 80 secondary 

schools, impacting over 60,000 

students and committing over 

220,000 staff volunteering 

hours since the programme 

was launched. 

In order to further expand 

its reach with the financial 

literacy agenda to Nigerian 

youths, FirstBank has 

spread its tentacles to Ebonyi 

State, South-Eastern Nigeria, 

launching the FutureFirst Financial 

Literacy Programme 

in the State with the Commissioner 

for Education; the 

Secretary to the State Government; 

Head of the State Board 

of Education; 30 principals 

of selected schools and staff 

of the Bank in attendance. 

Subsequently, FirstBank staff 

volunteers were trained by 

Junior Achievement Nigeria 

as part of the requisite trainthe-trainers 

exercise and 

assigned to schools. School 

teachers in the state were also 

trained to ensure sustainability 

of the programme. Thirty 

schools are currently participating 

in the financial literacy 

exercise in Ebonyi State with 

more schools to follow. 

FirstBank’s Future First Financial 

Literacy Programme 

is in line with the CBN’s drive 

for financial inclusion which 

seeks to ensure financial 

inclusion for the unbanked 

having a strong bearing on 

financial stability, economic 

growth and development for 

the citizenry. 

SNEPCo launches health 

campaign in Abuja 

…treats over 4,000 people 

ANTHONIA OBOKOH 

The Shell Nigeria 

Exploration and 

Production Company 

(SNEPCo) 

has launched its first medical 

outreach in the federal 

Gidan Mangoro community 

of Karu in Abuja capital territory. 

The outreach aims to treat 

more than 4,000 beneficiaries 

and provide medical supplies 

to five local primary schools, 

in a bid to improve the overall 

health and raise the awareness 

of the risks associated 

with inadequate personal 

healthcare. 

The two-day programme 

is the latest phase of Shell’s 

Health-in-Motion programme, 

which was rolled 

out in the Niger Delta in 2005. 

Bayo Ojulari, managing 

director of SNEPCo, said the 

crusade aims to take free promotionary, 

preventive and 

curative health services to the 

hard-to-reach communities 

in Nigeria. 

“We hope to be able to 

support the efforts of government 

at all levels in providing 

accessible healthcare to the 

people,” said Ojulari, who was 

represented by Akinwumi 

Fajola, Shell’s regional community 

health manager. 

Ojulari further advised 

against ignoring early signs 

of health challenge that could 

make it difficult for prompt 

and effective management by 

medical officers. 

The exercise provided 

indigenes the opportunity 

to see health experts who 

provided full range of health 

services for free. 4,224 people 

from the community benefitted 

from different health services 

such as eye and dental 

check, mass deworming, 

cardiovascular screenings. 

Other services include HIV 

& malaria testing and breast 

and cervical cancer screenings 

services. 

3 women were treated on 

the spot with cryotherapy, 

for early stages of cancer of 

the cervix; 17 women with 

breast lumps had free mammograms 

done; 600 people 

with impaired vision received 

reading glasses as those requiring 

further management 

were referred to the General 

Hospital Karu. 

Besides rendering free 

health services, team also 

leveraged the opportunity to 

educate the community. 

The medical outreach was 

held in collaboration with 

the Abuja Municipal Area 

Council (AMAC) and had in 

attendance representative of 

the FCT Minister, Mathew 

Ashikeni; the traditional ruler 

of Karu, His Royal Highness, 

Emmanuel Kyauta Yewp; and 

Chairman of AMAC, Abdullahi 

Adamu Candido.

Thursday 20 July 2017 C002D5556 

BUSINESS DAY 15 


Reliance Infosystems 

wins Microsoft-Partner- 

Of-The-Year Award 

Business Event 

MIKE OCHONMA 

Reliance Infosystems 

Limited, 

an information 

technology service 

provided 

has won the 2017 Microsoft 

Partner of the Year Award for 

Nigeria. 

Microsoft recognized Reliance 

Infosystems Limited as 

its top Nigeria partner, based 

on the company’s outstanding 

field service, innovation, 

and implementation 

of customer solutions based 

on Microsoft technology. 

Microsoft awarded winners 

from several countries at the 

Microsoft Inspire Conference 

in Washington, D.C. United 

State recently. 

Commenting on the 

award at the award ceremony; 

Corporate Vice President, 

One Commercial Partner, 

Microsoft, Ron Huddleston 

said that the 2017 Partner 

of the Year Award winners 

and finalists represent the 

most valued and innovative 

solutions within our partner 

community. 

“It is an honour to recognize 

our top partners providing 

their expertise and 

solutions to solve complex 

business challenges. Hearty 

congratulations to each winner 

and finalist on this tremendous 

achievement.” He 

said. 

When asked why the company 

was selected for this 

award, CEO, Reliance Infosystems 

Limited; Olayemi 

Popoola said expressed how 

elated he was to be rewarded. 

“I am happy because we 

strive to provide impeccable 

innovations and solutions to 

customers. I believe we are 

now in the spotlight in terms 

of leading the partner ecosystem 

in Nigeria for Microsoft 

because we imbibe creativity 

and innovation in most of our 

engagements with Microsoft 

customers.” 

“Furthermore, we organize 

periodic workshop for 

different industries on how 

they can leverage Microsoft 

solutions in enhancing 

business processes. One of 

these is the Technology meets 

manufacturing events held in 

May, 2017. 

Reliance Infosystems specializes 

in designing and 

implementing business critical 

information technology 

solutions, uniquely combining 

our proven intellectual 

property with premier partner 

technologies to provide 

our customers with the competitive 

edge needed to succeed 

in today’s business and 

technology. 

L-R: Retired Justice George Oguntade; Adegboyega Kazeem, managing director, IBILE Microfinance 

Bank; Akin Oyebode, executive secretary, The Lagos State Employment Trust Fund (LSETF); Wale 

Raji, member, Federal House of Representatives Epe Constituency, and Oba Kamorudeen Ishola 

Animashaun, Oloja of Epe, during the cheque presentation ceremony to LSETF for Hon. Wale Raji 

Women Empowerment Scheme in Epe – Lagos. 

Free Trade Zone receives 

N1.8trn China boost 

. . . As UNIDO Partners Oyo on Industrialisation 

L-R: Emeke Ikade; Nath Orji; Anselm Madubuko, Apostolic Leader, and Paul Obazele, all of Revival 

Assembly, at a press conference to announce the 15th Azusa Conference in Lagos. 

AKINREMI FEYISIPO, Ibadan 

China plans to inject 

up to $5bn (N1.8tr) 

into the development 

of the newly 

established Polaris-Pacesetter 

Free Trade Zone, located 

along the Lagos-Ibadan Expressway, 

at the first instance. 

This is as United Nations 

Industrial Development Organisation 

(UNIDO) partnered 

the Oyo State Government 

to develop an industrial 

policy and strategic document 

poised to give the state’s 

industrialization initiatives a 

major boost. 

Abiola Ajimobi, executive 

governor of Oyo State, 

disclosed that close to150 

investors from Asian countries, 

especially China, had 

signified their preparedness 

to invest in the state’s FTZ, 

with assurances that seven 

of the companies would 

begin business by the end 

of the year. 

Ajimobi said that the state 

had comparative advantage 

for massive industrial development, 

judging by its 

vast arable land mass, huge 

population, concentration of 

research institutes, as well as 

its peaceful and secure environment. 

“We are proud and happy 

to have been recognized as 

worthy of being the first state 

to benefit from this industrial 

development policy in 

Nigeria. Without sounding 

immodest, this is in acknowledgment 

of our commitment 

to industrialization,” Ajimobi 

said, adding that Oyo State is 

ranked 5th in ease of doing 

business in Nigeria because 

of the enabling environment 

it has created. 

“We have made peace 

and security the cornerstone 

of our pyramid of development. 

Similarly, we have 

provided social and physical 

infrastructure. These are the 

sine qua non of industrial 

development. We are happy 

to announce that China alone 

is investing $5bn dollars in 

our free trade zone.” 

The document of the partnership 

with UNIDO was 

presented to Ajimobi by Jean 

Bankole, UNIDO’s representative 

to ECOWAS and 

regional director of Nigeria 

regional office hub at the 

Governor’s office, Ibadan. 

Bakole said, “Our main 

job is to support economic 

growth and transformation 

in Africa. We are here to see 

how we can build a roadmap 

to develop various sectors. 

Oyo State is the first to benefit 

from the partnership because 

it already has an industrial 

policy in place. 

``UNIDO is now developing 

a new country programme. 

The document we 

are presenting today was prepared 

in collaboration with 

the state government. This 

document raises a number 

of challenges, which is not 

peculiar to Oyo State. 

“Our business is now to 

turn these challenges to opportunities. 

Few of the challenges 

include poor power 

supply, dominance of informal 

sector, low level technology, 

lack of interagency 

synergy.” 

The Commissioner for 

Trade, Investment and Cooperatives, 

Taibat Adeyemi- 

Agaba, also said that UNIDO 

developed new industrial 

policy with active collaboration 

of the state. 

According to her, the policy 

had the input of internal 

and external stakeholders, 

which she said would make 

it the best in the Southwest 

region when its implementation 

began. 

L-R: Eason Duan, brand manager - West Africa, Tecno Mobile; Nnamdi Ezeigbo, MD/CEO, SLOT Systems 

Ltd.; Attai Oguche, deputy marketing manager, PR, Offline Events and Sponsorships Tecno Mobile 

Nigeria; and Jesse Oguntimehin, deputy marketing manager, Digital, Tecno Mobile Nigeria, at the launch 

of the Tecno Camon CX Manchester City Limited Edition at Renaissance Hotel Ikeja Lagos 

L-R: Munzali Jibril, president and chairman of council, Nigerian Institute of Management (NIM), (Chartered); 

Akpan Ekpo, director general, West African Institute of Financial and Economic Management, Lagos/guest 

speaker; Pat Anabor, national treasurer, NIM, and Tony Fadaka, registrar/CEO, NIM, at the NIM 2017 

distinguished management lecture, with the theme “Overcoming the Knowing-Doing Gap: Filling the Void 

between Economic Policy Formulation and Implementation’ in Lagos, yesterday. Pic by Olawale Amoo

16 



I 

NVESTO 

Helping you to build wealth & make wise decisions 

R 

C002D5556 

In association with 

BUSINESS DAY 

17 

Week open (09 – 07–17) 

Week close (16 – 07–17) 

Percentage change (WoW) 

NSE All Share Index 

32,459.17 

33,261.66 

Percentage change (YTD) 23.77 33.81 

NSE Premium Index The NSE-Main Board 

Market capitalisation 

NSE ASeM Index NSE 30 Index NSE Banking Index NSE Insurance Index NSE Consumer Goods Index NSE Oil/Gas Index 

Year Open 26,874.62 N9.247 trillion 1,695.51 1,203.79 1,189.69 1,195.20 274.32 

2.47 

N11.187 trillion 

N11.464 trillion 

2,213.38 

2,268.73 

2.50 

1,438.51 

1,473.81 

2.45 

1,174.61 

1,174.61 

0.00 

1,466.01 

22.43 -1.27 26.01 

389.12 

1,506.10 412.85 

126.29 

139.38 

140.60 

712.65 

763.32 

768.75 

2.73 6.10% 0.88% 0.71% 

312.68 

317.50 

324.85 

2.31% 

50.50% 11.33% 7.87% 3.89% 

Year-to-date gains: Fidson, 

Stanbic close-in on May & Baker 

Stories by IHEANYI NWACHUKWU 

The stock of May & 

Baker Nigeria Plc 

has recorded the 

highest returns 

this year but not 

without hot chase from that 

of Fidson Healthcare Plc and 

Stanbic IBTC Holdings Plc. 

Year-to-date (Ytd), May 

& Baker Plc is leading other 

stocks following a record 

181.9percent growth in its 

price at N2.65. 

Also, Fidson Healthcare 

Plc stock price advanced to 

N3, indicating year-to-date 

growth of 134.4percent. 

Stanbic IBTC Holdings Plc 

with share price at N31.50 

recorded impressive growth 

of 110percent Ytd. 

Also, United Bank for 

Africa Plc stock impressed 

the market with a record 

price growth of 95.6percent 

this year. The bank’s share 

price stood at N8.80 as at 

Tuesday. 

For the past couple of 

weeks, the Nigerian All Share 

Index (ASI) has been trading 

firmly above its 30,000points 

threshold, thanks to policy 

developments and soft data 

announcements that have 

supported the benchmark, 

said analysts at Lagos-based 

United Capital Plc. 

As corporate earnings get 

underway, the analysts think 

this might be one of the most 

important earnings session 

in a long time. 

With the earnings season 

gearing up, not a few market 

watchers expect investors to 

turn attention to corporate 

earnings releases by some of 

these outperformers. 

The duo of expected 

improvement in corporate 

earnings and corporate 

rewards in terms of interim 

dividends should act as 

catalysts that will propel 

stock prices higher than 

their current levels. 

Other stocks that have 

outperformed the NSE ASI 

which recorded year-to-date 

growth of circa 24.4percent 

as at Tuesday include Cement 

Company of Northern Nigeria 

Plc at N9.7 (ytd growth of 

94percent); Airline Services 

& Logistics Plc at N4.78 

(91.2percent); Beta Glass 

Plc at N57.47 (89.5percent); 

FBN Holdings Plc at N5.93 

(77percent growth); and 

International Breweries 

Plc at N30 (62.2percent ytd 

growth). 

Also, Presco Plc share 

price at N64.54 grew by 

60.9percent this year; while 

Okomu Oil Palm Plc at 

N63 grew by 56.8percent. 

Transcorp Plc share grew by 

57.5percent to reach N1.37; 

while Zenith Bank Plc at 

N21.53 achieved ytd growth 

of 46percent. 

In addition, Oando Plc 

share price at N6.81 achieved 

44.9percent growth this year; 

PZ Cussons Plc share price at 

N21 achieved 44.8percent in 

Ytd gain. 

NSE Lotus II 

1,841.59 

2,004.11 

2,034.34 

1.51% 

10.47% 

NSE Ind. Goods Index 

2,176.44 

1,936.37 

1,993.24 

2.94% 

24.94% 

NSE Pension Index 

810.04 

1,113.46 

1,148.14 

3.11% 

41.74% 

Venture Capital deal 

value records new highs 

on uptick in mega-deals 

In the second-quarter (Q2) of 2017, 

global venture capital (VC) deal 

value increased by 55.3percent to 

$40.07billion propelled by an uptick in 

mega-deals around the world. 

According to Venture Pulse Q2 

2017 — the quarterly global VC trends 

report published by KPMG Enterprise, 

the United States led VC investment, 

accounting for $21.8 billion, followed 

by Asia ($12.7 billion) and Europe 

($4.1 billion). 

The increase in funding was 

strongly affected by a continued 

resurgence in mega-deals, including 

Didi Chuxing’s record-breaking $5.5 

billion round and Toutiao’s $1 billion 

Series D round. 

Globally, there were nine deals at 

or over $500 million in value during 

the quarter including Mobike ($600 

million) from Asia and Outcome 

Health ($600 million) from the United 

States. Europe also saw one of its largest 

funding rounds ever with Improbable’s 

$502 million Series B raise. 

While deal value increased, the 

total number of deals fell for the fifth 

straight quarter in Q2’17. The ongoing 

decline has affected the earliest deal 

stages the most, with angel and seedstage 

deal count down for the ninth 

straight quarter – from a high of 2,674 

in Q1 2015 to just 1,310 this quarter. 

In spite of the decline in transaction 

volume, the venture environment 

remains healthy and vibrant, with 

median valuations increasing at all 

stages of investment on a global level. 

Late stage valuations, in particular, 

demonstrated exceptional strength 

this quarter, leaping from $175 million 

in 2016 to $260 million in 2017, year 

to date, the largest median increase 

observed this decade. 

“The IPO markets gained strong 

momentum ending the second 

quarter which should set up for a 

strong second half of 2017,” said 

Brian Hughes, National Co-Lead 

Partner, KPMG Venture Capital 

Practice, and a partner for KPMG in 

the US. “Venture capital invested has 

improved significantly this quarter, 

with large deals in Asia, the Americas 

and Europe.”


C002D5556 


I NVESTOR 


United Capital Investment View 

Large-caps lift main index 

...ASI advances w/w 

Nigerian equities 

delivered positive 

returns in the week 

to July 14, with the 

All Share Index (ASI) 

up 2.5%. Lingering optimism in 

the market encouraged investors 

to take position in stocks that were 

sold-off in the previous week’s 

bearish streak. In all, the ASI 

settled at 33,261.7 points, dilating 

YTD return to 23.8% as market 

capitalization added N276.6bn to 

settle at N11.5tn. In this past week, 

system liquidity opened N78.4bn 

short and liquidity was further 

tightened by OMO auction which 

moderated system liquidity by 

N16.1bn in the first trading 

session of the week, raising OBB 

and ON to 25.3% and 28.2% 

respectively. 

Despite the provision of 

funding for bond auction which 

held mid-week, system liquidity 

eased as the OBB and ON fell to 

14.3% and 15.2% in that order. 

Towards the end of the week 

however, N75.5bn OMO maturity 

provided further easing as the 

MM rate trended lower to 7.3% 

(OBB) and 8.2% (ON). 

Closing the week, stringency 

returned to the money market on 

the back of another OMO auction 

which mopped up N25.8bn via 

sale of the Jan-2018. Open buy 

back (OBB) and Overnight rates 

thus closed the week at 9.0% 

and 9.8%, declining from 15.0% 

and 15.3% at the end of the 

previous week. Looking ahead, 

we expect sentiments to be 

dictated by expectations around 

H2-2017 earning scorecards. 

We see a mixed close for the FI 

markets this week, with yields 

most likely reflecting system 

liquidity dynamics amid CBN’s 

intervention at both forward and 

spot FX market. 

Broad-based global rally 

after dovish Yellen 

In the US market, equity 

benchmarks closed the week 

firmly in positive territory. Players 

reacted positively to Federal 

Reserve Chairwoman – Janet 

Yellen’s comments before 

the House Financial Services 

Committee. Yellen made remarks 

on tapering that will begin 

sometime this year and that a 

limited number of gradual rate 

increases will extend over the next 

few years. Overall, the tech-laden 

NASDAQ added 2.7%, S&P 500 

traded 1.5% higher and the DJIA 

advanced 1.1%. 

European markets also logged 

solid gains across the indices we 

cover , thanks to Federal Reserve 

Chairwoman - Janet Yellen’s 

comments about gradual policy 

tightening which lulled fears 

that the Fed was moving too 

fast. Overall, UK’s FTSE added 

+0.4%, the CAC was up +1.8%, 

Germany’s DAX inched higher by 

+2.0% and pan-European STOXX 

600 edged up by +1.8%. 

Performance across the 

BRICS classification was bullish 

as players priced in positive 

sentiments from the US. Overall, 

India’s BSE Sensex (+5.0%), South 

Africa’s JSE (+2.4%), China’s 

SCHOMP (+0.1%), Russia’s RTSI 

(+4.9%) and Brazil’s IBOV (+4.8%) 

were upbeat. 

Equities: Large-caps lift 

main index 

On the markets, the Banking 

index (+6.3%) recorded the 

strongest performance on the 

backdrop of buying interest in 

ACCESS (+8.4%), GUARANTY 

(+5.8%), UBA (+5.9%), and 

ZENITH (6.5%). Similarly, 

the Industrial Goods (+2.1%), 

Consumer Goods (+0.6%) and 

Oil & Gas (+2.8%) indices were 

upbeat as players took profit 

in counters like DANGCEM 

(+2.0%), WAPCO (+4.0%), 

SEPLAT (+1.7%), FO (+15.3%), 

MOBIL (+9.9%), NESTLE 

(+0.2%), PZ (+2.4%), GUINNESS 

(+1.6%). 

Investor sentiment measured 

by market breadth was upbeat 

at 2.4x (relative to 0.3x in the 

previous week) as 39 stocks 

appreciated against 16 decliners. 

Activity level closed the week 

stronger as average value traded 

inched higher by 13.8% w/w 

to N2.8bn and average volume 

edged lower by 19.9% w/w to 

254.4 units. Looking ahead, we 

expect sentiments to be dictated 

by expectations around H2-2017 

earning scorecards. 

Money Market: rates price 

in system liquidity dynamics, 

ease w/w 

In this past week, system 

liquidity opened N78.4bn 

short and liquidity was further 

tightened by OMO auction 

which moderated system 

liquidity by N16.1bn in the first 

trading session of the week, 

raising OBB and ON to 25.3% 

and 28.2% respectively. Despite 

the provision of funding for bond 

auction which held mid-week, 

system liquidity eased as the OBB 

and ON fell to 14.3% and 15.2% in 

that order. 

Towards the end of the week 

however, N75.5bn OMO maturity 

provided further easing as the 

MM rate trended lower to 7.3% 

(OBB) and 8.2% (ON). Closing 

the week, stringency returned to 

the money market on the back 

of another OMO auction which 

mopped up N25.8bn via sale of 

the Jan-2018. Open buy back 

(OBB) and Overnight rates thus 

closed the week at 9.0% and 

9.8%, declining from 15.0% and 

15.3% at the end of the previous 

week. Going by the patterns of 

recent CBN actions and the level 

of system liquidity, we expect to 

see more OMO issuances this 

week, which will likely see key 

money market rates close the 

week higher. 

Fixed Income Market: T-bills 

extend bearish sentiment 

In the Fixed Income (FI) 

space, average yield across 

maturities relayed a bearish 

sentiment w/w. Specifically, 

profit-booking across maturities 

in the T-bills space drove a bullish 

close to the market as average 

yield rose by 44bps w/w to close 

the week at 21.0%. However, 

average bond yield was mostly 

flat, coming in at 16.2%. There 

was bond auction mid-week, 

where-in the 5-year, 10-year and 

20-year instruments were sold. 

At the end of the auction, spot 

rate came in at 16.2%, 16.3% 

and 16.3% for 5, 10 and 20-year 

instruments respectively. We 

see a mixed close for the FI 

markets this week, with yields 

most likely reflecting system 

liquidity dynamics amid CBN’s 

intervention at both forward and 

spot FX market. 

Currency Market: Naira 

appreciates in the parallel 

market 

At the spot market, the 

naira appreciated to N305.9/ 

USD from 306/USD in the 

previous week. Parallel market 

rate also appreciated to 365.5 

from 367.5/USD. However, the 

newly introduced Investors’ 

& Exporters’ window saw an 

appreciation to N362.8/USD 

(vs. N365.0/USD in the previous 

week). Oil prices rose from 

$47.9/b to $49.0/b. The outlook 

of the naira remains tied to the 

spate of CBN’s intervention in 

the spot and forward markets as 

well as the better price discovery 

in the I&E FX window. 

FUND PRICE OF PFAs AS AT JULY 14, 2017 

S/N PFAs CURRENT PRICE 

1 CrusaderSterling Pensions 3.4679 

2 Premium Pensions 3.4268 

3 ARM Pension Mgrs. 3.3952 

4 Stanbic-IBTC Pensions 3.2697 

5 Legacy PFA 3.1834 

6 NLPC PFA 3.0275 

7 PAL Pensions 2.9757 

8 Trustfund Pensions 2.8918 

9 First Guarantee Pension 2.8848 

10 SigmaVaughn Pensions 2.7676 

11 Leadway Pensure PFA 2.7551 

12 AIICO Pension Managers 2.6690 

13 APT Pensions 2.4676 

14 Fidelity Pensions 2.4210 

15 FUG Pensions 2.3544 

16 AXA Mansard 2.3291 

17 OAK Pensions 2.2771 

18 

Investment One Pension 

Mgrs. 

2.1252 

19 IEI Anchor Pension Managers 2.0799 

20 IGI Pension Fund Managers 1.7853 

21 NPF Pensions 1.3014 

Investor’s Square 

•Have you been shabbily treated by your registrar, stockbroke r or 

other capital market operators? 

Let us know and investor will help you investigate and report back. 

E-mail: investor@businessdayonline.com 

Africa investor index 

Company Ticker Sector Country Price Price MKT P/E Shares 

US$ Chan. on Cap in issue 

the week SMn Mn. 

SAB Miller SAB SJ Beverages South Africa 59.93 1.5% 96,526.61 34.8 1,610.64 

Anglo American AGL SJ Mining South Africa 14.56 7.6% 18,609.65 -9.0 1,278.50 

Sasol SOL SJ Oil & gas South Africa 28.66 4.5% 18,668.80 9.0 651.39 

MTN Group MTN SJ Telecommunications South Africa 9.21 6.7% 16,550.71 16.3 1,797.23 

Standard Bank SBK SJ Banking & finance South Africa 11.52 7.0% 18,399.87 11.0 1,596.58 

Anglo Platinum AMS SJ Mining South Africa 23.70 3.9% 6,358.25 131.0 268.30 

ANGLOGOLD ASHANTI LTD ANG SJ Mining South Africa 9.74 2.7% 3,977.12 -84.7 408.22 

Tullow Oil plc TLW GN Oil & gas Ghana 4.06 -0.4% 3,704.38 381.7 911.38 

Maroc Telecom IAM MC Telecommunications Morocco 14.57 0.2% 12,809.51 21.2 879.10 

DANGOTE CEMENT PLC DANG NL Building Materials Nigeria 0.64 -0.3% 10,924.84 16.8 17,040.51 

Orascom Construction OCIC EY Construction Egypt 12.13 -0.4% 2,510.65 74.0 206.92 

Attijariwafa Bank ATW MC Banking & finance Morocco 46.27 -0.5% 9,417.78 16.7 203.53 

Nigerian Breweries NB NL Breweries Nigeria 0.98 -2.3% 7,385.83 28.4 7,562.56 

Banque Marocaine du Commerce BCE MC Banking & finance Morocco 21.11 0.1% 3,788.48 16.1 179.46 

Telecom Egypt ETEL EY Telecommunications Egypt 0.57 -2.2% 971.49 7.7 1,707.07 

VODAFONE EGYPT VODE EY Telecommunications Egypt 3.82 -0.4% 917.25 6.8 240.00 

Banque Centrale Populaire BCP MC Banks Morocco 31.13 -1.4% 4,006.41 20.6 182.30 

Lafarge LAC MC Building materials Morocco 236.06 0.5% 5,531.29 26.3 23.43 

Douja Prom Addoha ADH MC Real Estate Morocco 5.07 -0.4% 1,635.76 13.9 322.56 

Sonatel Sn SNTS BC Telecommunications Brvm 41.76 0.4% 4,175.90 12.9 100.00 

Guaranty Trust Bank GUARANTY NL Banking & finance Nigeria 0.11 3.4% 3,304.27 8.3 29,431.18 

Zenith Bank ZENITH NL Banking & finance Nigeria 0.07 4.0% 2,112.06 5.8 31,396.49 

CGI CGI MC Real Estate Morocco 44.17 0.5% 813.05 14.4 18.41 

Guinness Nigeria PLC GUINNES NL Beverages Nigeria 0.19 -0.7% 307.49 -45.5 1,591.13 

Commercial International Bank CIB EY Banks Egypt 4.86 7.1% 5,608.67 16.5 1,153.87 

First Bank FIRSTBAN NL Banks Nigeria 0.02 -3.2% 665.05 3.6 35,895.00 

Abu Kir Fertilizers ABUK EY Chemicals Egypt 13.28 -2.9% 1,117.09 9.8 84.13 

East African Breweries EABL KN Breweries Kenya 2.44 -0.9% 1,928.40 25.8 790.77 

Safaricom Ltd SAFCOM KN Telecommunications Kenya 0.23 -0.1% 9,024.89 19.2 40,065.43 

Mauritius Comm. Bank MCB MP Banking & finance Mauritius 6.50 0.3% 1,547.75 7.5 238.19 

Mobinil EMOB EY Telecommunications Egypt 6.03 17.5% 603.13 - 100.00 

T M G HOLDING TMGH EY Real Estate Egypt 0.43 -2.1% 877.32 17.3 2,063.56 

Poulina Group Holding PGH TU Holding Companies-Divers Tunisia 3.35 -0.9% 602.23 14.5 180.00 

Ecobank Transnational Inc ETIT BC Banks Brvm 0.03 0.4% 499.63 2.0 15,952.70 

STANBIC IBTC BANK PLC IBTCCB NL Banks Nigeria 0.10 -2.3% 966.27 9.4 10,000.00 

State Bank Mauritius SBM MP Banking & finance Mauritius 0.03 0.3% 993.12 11.2 31,000.00 

Barclays Bank Kenya BCBL KN Banking & finance Kenya 0.09 0.4% 510.71 7.5 5,432.00 

Banque De Tunisie BT TU Banking & finance Tunisia 3.33 -1.0% 498.80 13.8 150.00 

Equity Bank Limited EQBNK KN Banking & finance Kenya 0.37 1.9% 1,404.41 9.0 3,773.67 

Kenya Comm. Bank Ltd KNCB KN Banking & finance Kenya 0.38 3.9% 1,162.89 6.2 3,025.21 

Africa investor Ai40 Weekly Commentary – 17 July 2017 

Last week, the Ai40 

Investor’s Index 

enjoyed robust gains 

and set a new record 

for the year’s high. Telecoms 

and banking stocks were the 

star performers in the period 

under review; particularly 

from Egypt and South Africa. 

For the second week in a row, 

equities from Nigeria took 

up the bulk of the spots on 

the Losers List. However, the 

Index gained 1.42 points (or 

1.49%) from its last reading 

of 95.35, to close Friday at a 

value of 96.77. 

Following releases of key 

economic data on Friday, 

equity markets in the US 

ended the week higher. 

Investors digested a mixed 

bag of earnings reports from 

major banks which continue 

from today. Treasuries and 

gold (both considered safe 

haven assets) recorded gains 

following “poor data on retailsales 

and inflation” according 

to Market Watch. In Europe, 

markets closed the week with 

mixed performances after 

the start of the US earnings 

season and a meeting 

between the French and U.S. 

presidents. According to FT, 

oil prices enjoyed a fifth day 

of gains on Friday as the price 

of a barrel of Brent reached 

$49. 

At Friday’s close, the Dow 

Jones Industrial Average was 

up by 0.39%, or 84.65 points, 

to close the week at a value 

of 21,637.74. The Nasdaq 

Composite Index gained 

0.61%, or 38.03 points, to 

end the week at a value of 

6,312.47. The S&P 500 was 

up by 0.47%, or 11.44 points, 

to close Friday on a value of 

2,459.27. According to the 

Investopedia, “International 

markets were mixed over the 

past week. Japan’s Nikkei 225 

rose 0.96%; Germany’s DAX 

30 rose 1.96%; and Britain’s 

FTSE 100 rose 0.18% 

Gainers 

The Index’s best performer 

last week was Cairo-listed 

Orange Egypt – a telecoms 

company – with a gain of 

17.5%. Also from Egypt, shares 

for Commercial International 

Bank (the country’s largest 

listed lender) ended the 

week 7.1% higher. Stock for 

Anglo American was up by 

7.6%. Last week Bloomberg 

reported that the miner 

“plans to redevelop the 

historical premises of its De 

Beers diamond unit after 

choosing the building as its 

preferred option for a new 

London headquarters.” 

Still with South Africanlisted 

equities, Standard Bank 

and MTN gained 7% and 

6.7% respectively. 

Losers 

For the second week in a 

row, Nigerian stocks tracked 

by the Index featured heavily 

on the Losers List. At the 

bottom of the heap was First 

Bank with a loss of 3.2% last 

week. Stanbic IBTC Bank and 

Nigerian Breweries were both 

down 2.3%. 

Egyptian chemicals 

firm Abu Qir Fertilizers was 

down 2.9% while shares 

for Telecom Egypt were in 

negative territory by 2.2%

Thursday 20 July 2017 C002D5556 BUSINESS DAY 19 

I 

NVESTOR 


Analysts maintain Sell ratings for Unilever 

stocks despite improved H1 results 

IHEANYI NWACHUKWU 

Last week Friday, 

Unilever Nigeria Plc 

released its unaudited 

interim financial 

statements for the six 

months (H1) ended June 30, 


The H1’17 results 

The company’s income 

statement for six month 

period shows revenue 

grew to N45.105billion from 

N32.277billion in the preceding 

H1’2016 period; up by 

39.74percent. 

Gross profit grew 

to N13.907billion from 

N10.353billion in H1’16; an 

increase of about 34.33 percent. 

Operating profit also 

grew from N2.161billion in 

corresponding H1 period of 

2016 to N6.394billion in H1’17; 

a remarkable growth of about 

195.9 percent. 

Profit before taxation (PBT) 

increased to N5.044billion 

from N1.487billion in H1’16; 

up 239.16percent. Its after tax 

profit for the period under 

review grew by 236.23 percent to 

N3.676billion from N1.093billion 

in H1’16. Demand for shares of 

Unilever Nigeria Plc increased 

following the results. It gained 

N1.81 last Tuesday, from N36.38 

recorded Monday to N38.19. 

Analysts’ views 

In their first reaction to these 

results, FBN Quest research 

analysts said “We believe this is 

as a result of weaker competition 

stemming from crowding-out 

of importers. Also, gross margin 

was above 30percent (Q2), the 

second time since 2015 which 

can be attributed to the CBN’s 

intervention in the FX market 

which has made FX more 

accessible for importation of 

raw materials. As such, it is safe 

to say that the company is well 

on its road to recovery.” 

FBN Quest analysts believe 

that with plans for a Rights 

Issue, Unilever “intends to 

de-lever its balance sheet and 

partly raise funds for planned 

local manufacturing capacity 

expansion for its Personal Care 

business in the South-West 

region.” 

“Year to date, Unilever 

shares have significantly 

underperformed the NSE ASI. 

We expect the market to react 

positively to these numbers. 

We rate the stock Neutral. Our 

estimates are under review,” FBN 

Quest analysts added. 

By rating the stock Neutral, 

the analysts expect the stock to 

perform in line with the NSE 

All Share Index over the next 12 

months or specified investment 

horizon. 

Research analysts at Lagosbased 

Capital Bancorp Plc in 

their recent commentary on 

Unilever results said, “Though 

the company’s earnings for the 

period has slightly surpassed our 

forecast estimate (CBP revenue 

forecast HY’17: N41.34 billion, 

Actual HY’17: N45.10 billion) we 

restate that our forecast earnings 

do not suggest a sustained bull 

run on the company share price 

in the short term except our 

projections are significantly 

surpassed and therefore reiterate 

our SELL recommendation on 

the company shares”. 

FMDQ OTC Market Summary 

Fixed Income, Currency markets turnover reaches new highs of N12.62trn 

Takings) accounted for 

28.91percent (29.13percent in 

May) of total turnover for the 

reporting period. 

FX Market 

Transactions in the FX 

market settled at $8.52bn in 

June, an increase of 29.87percent 

($1.96bn) when compared 

with the value recorded in May 

($6.65bn). The CBN sold a total 

of $1.476bn through various 

interventions conducted during 

the period under review. 

The apex bank also 

maintained its marginal rate 

for the Secondary Market 

Intervention Sales (SMIS)– 

Wholesale Forwards intervention 

at $/N320; and $/N357 for Small 

and Medium-sized Enterprises 

(SMEs) and Invisibles. 

In the month under 

review, the CBN official spot 

rate experienced a slight 

depreciation, losing 45kobo 

to close at $/N305.90 from $/ 

N305.45 at the beginning of the 

The analysts recalled 

Unilever’s press release early in 

the year indicating its interest 

to sell off its spread business, 

“which we expect would shrink 

the percentage contribution of 

its food business to revenue and 

may as well affect the overall 

revenue base of the company.” 

“Though profit after 

tax grew significantly for the 

period under review to N3.67 

billion (versus N1.09 billion in 

HY’16) representing a rise of 

236.23percent, the company’s 

liquidity ratios and valuation 

multiple improved but remained 

uninspiring. 

“In our view, we expect 

long-term and positive investor 

sentiments towards the company 

shares to be visible only when 

the company continues on its 

improved path to profitability 

…increases by 32.98percent in June 

IHEANYI NWACHUKWU 

Transaction turnover 

in the Fixed Income 

and Currency (FIC) 

markets for the month 

of June amounted to N12.62trn; a 

32.98percent (N3.13trn) increase 

from the value recorded in May 

and a 34.65percent (N3.24trn) 

increase year-on-year (YoY), 

FMDQ latest OTC Monthly 

shows. 

The report further shows 

that the Treasury Bills (T.Bills) 

segment continued to dominate 

market share, accounting for 

43.22percent (40.73percent in 

May) while FGN bonds recorded 

6.22percent (5.23percent in May) 

of total turnover in June. 

Activities in the Foreign 

Exchange (FX) market 

accounted for 21.60percent 

(24.88percent in May) while 

Money Market (Repurchase 

Agreements [Repos]/Buy -Backs 

and Unsecured Placements/ 

month. The Naira strengthened 

in the parallel market by N6, 

closing the month under review 

at $/N366; further narrowing 

the gap with the Investors’ & 

Exporters’ (I&E) FX Window 

which closed at $/N366.44. 

Total volumes traded in 

the I &E FX Window settled at 

$1.81bn for June, an increase 

of 37.73percent ($0.49bn) 

when compared with volumes 

recorded in May ($1.32bn). So 

far, the total volumes traded on 

the I &E FX Window since its 

inception stand at $3.74bn. 

Inter-Member trades stood 

at $0.95bn in the month of June, 

an increase of 67.75percent 

compared with trades recorded 

in May, and an increase of 5.46 

percent YoY. Member-Client 

trades stood at $5.85bn in June, 

an increase of 39.59percent 

($1.66bn) from the previous 

month. Member-CBN trades 

stood at $1.73bn in June ($1.81bn 

in May), representing a decrease 

into FY’17 and beyond as 

well as rewarding passionate 

shareholders with improved 

dividend,” the analysts at Capital 

Bancorp Plc stated. 

Also, research analysts at 

Vetiva Capital Management 

Limited recalled that UNILEVER 

opted for a package resizing 

(that is introduced smaller sizes 

for products) in the Home Care 

segment. 

“We believe this might 

have been a more welcome 

development for cash-strapped 

price sensitive consumers. 

Meanwhile, growth in the Food 

segment underperformed for the 

second straight quarter (down 

2percent quarter-on-quarter) 

whilst revenue in the Personal 

Care segment stayed relatively 

flat quarter-on-quarter (q/q)”, 

Vetiva analysts noted. 

of 4.49% ($0.08bn) month-onmonth 

(MoM) and a decrease 

of 21.46% ($0.77bn) YoY. 

The 12th Naira-settled OTC 

FX Futures Contract NGUS JUN 

21, 2017, with total open contracts 

worth $657.07mm, matured 

and settled within the reporting 

month, whilst a new 12-month 

contract–NGUS JUN 21, 2018– 

for $1.00bn was introduced 

at $/374.67. This also marked 

the first time the settlement 

amount was paid in favour of 

the contract seller (CBN), as the 

Nigerian Autonomous Foreign 

Exchange Fixing (NAFEX) on the 

settlement date closed lower than 

the contract rate Fixed Income 

Market (T.Bills and FGN Bonds). 

Turnover in the Fixed 

Income market in the month 

under review settled at ₦6.24trn, 

a 43.03percent (N1.87trn) 

increase MoM. Transactions in 

the T.Bills market accounted for 

87.41percent of the Fixed Income 

market, from 88.67percent the 

They noted that while Unilever 

recently obtained regulators’ 

approval for N58billion Rights 

offering aimed at repaying its 

outstanding liabilities, “we are yet 

to include this in our valuations 

as we await the eventual outcome 

of the process. Thus, we expect 

finance expenses to remain the 

major earnings dampener in 

the near term – pending the 

completion of the rights issue”. 

Vetiva analysts also favoured 

sell rating for Unilever stocks. This 

analysts give sell rating to stocks 

that “we consider overvalued, 

but with good or weakening 

fundamentals, and where 

potential return below +5percent 

is expected to be realized between 

current price and analysts’ target 

price.” Their Target Price for 

Unilever is N25.01. 

About the company 

previous month. Outstanding 

T.Bills at the end of the month 

stood at N8.51trn, a decrease 

of 3.98percent MoM (N8.87trn 

in May), whilst FGN bonds’ 

outstanding value increased by 

1.44percent (N0.09trn) MoM to 

close at N7.03trn in the period 

under review. 

Trading intensity in the Fixed 

Income market for the month 

under review settled at 0.62 and 

0.11 for T.Bills and FGN bonds 

respectively, from 0.43 and 

0.07 recorded for the previous 

month. Maturities up to one (1) 

month became the most actively 

traded, accounting for turnover of 

N1.65trn in June. 

The sovereign yield curve 

remained stable, as short-and 

medium-term yields gained an 

average of 0.01percent while 

long-term yields declined by 

an average of 0.01percent. The 

spread between 10-year and 

3-month benchmark yields 

closed negative at -4.08percent 

Unilever Nigeria Plc, one of 

the leading multinationals on the 

Nigeria Stock Exchange (NSE), 

engages in the manufacture 

and marketing of foods and 

food ingredients, and home and 

personal care products. Parent 

company, Unilever Overseas 

Holding B.V. owns a 60.04percent 

share in Unilever Nigeria. 

Listed on the Consumer 

Goods sector of the Nigerian 

Stock Exchange (NSE) main 

board, Unilever Nigeria Plc 

shares outstanding stood 

at 3,783,296,250 units with 

Market Capitalisation of about 

N137.636billion. 

Products 

The Company’s segments 

are Food Products, Home Care 

and Personal Care products. 

Its Foods Products segment 

includes sale of tea, savory and 

spreads. The Company’s Home 

Care segment includes sale of 

fabric care, household cleaning 

and water purification products. 

The international brands 

include Close-Up toothpaste, 

Pepsodent toothpaste, LUX 

beauty soap, Lifebuoy soap, 

Rexona, Vaseline lotion and 

Vaseline Petroleum Jelly in 

the Personal Care Unit of the 

business; Blue Band Margarine, 

Lipton Yellow Label Tea and 

Knorr bouillon cubes in the 

Foods Unit; and OMO Multi- 

Active Detergent, Sunlight 

washing powder and Sunlight 

Dish washing liquid in the Home 

Care Unit. Other Regional and 

local jewels include the Pears 

Baby Products range and Royco 

bouillon cubes. The Company 

has manufacturing sites in 

Oregun, Lagos State and Agbara, 

points for June (-3.31percent in 

May) as the sovereign yield curve 

remains downward sloping. 

Money Market (Repos/ 

Buy-Backs and Unsecured 

Placements/Takings) 

Activities in the Secured 

Money Market (Repos/Buy- 

Backs) settled at N3.51trn in 

June, 34.28percent (N0.89trn) 

more than the value recorded in 

May. On a YoY basis, turnover 

on Repos/Buy-Backs recorded 

a 26.34percent (N0.76trn) 

increase. Unsecured Placements/ 

Takings closed the month at a 

turnover of N0.13trn, a decline 

of 8.91percent (N0.01trn) MoM 

and 66.74percent (N0.26trn) YoY. 

Market Surveillance 

The number of executed 

trades captured on the E-Bond 

trading system for the month 

of June amounted to 19,948 as 

against 17,436 recorded in May. 

Executed T-Bills and FGN bonds 

trades increased by 47.60percent 

and 16.70percent respectively.

20 

BUSINESS DAY 

21 

CEO 

PAUL SMITH 

CFA, President/CEO of the CFA Institute 

INTERVIEW 

Interview with Public Sector Leaders 

C002D5556 



C002D5556 

BUSINESS DAY 

‘CFA will help Nigeria improve the quality of her financial market infrastructure’ 

PAUL SMITH, CFA, President/CEO of the CFA Institute, visited Nigeria recently to discuss Nigeria’s business environment with the authorities and how the CFA Institute can help the 

country improve its financial markets as a vehicle for attracting the much needed investments. During the visit, Paul Smith met with industry regulators including the National 

Pensions Commission (PenCom), Securities & Exchange Commission (SEC) and the Minister of Industry, Trade and Investment. He also paid a courtesy call on Nigeria’s Acting President, 

Prof Yemi Osinbajo. He discussed the outcome of these meetings with Onyinye Nwachukwu, BusinessDay’s Abuja Bureau Chief. 

What do CFA charterholders 

do? 

We are investment 

managers working 

mainly within the 

financial services industry which 

covers a whole range of disciplines 

such as insurance, investment 

banking, asset management and 

allied services but our focus is really 

on the investment industry. So 

you will find CFA charterholders 

working in the fund management 

companies, pension fund management 

companies, sovereign 

wealth fund, investment banking, 

private equity firms, etc. They 

make investment decisions i.e. 

they decide which investment instruments 

such as equity, bonds, 

etc. are appropriate to buy, the 

sectors to invest each asset class, 

the quantity, etc. all with the aim 

of achieving a specified goal for 

their clients or business. 

CFA Charterholders also serve 

as personal financial advisers or 

wealth managers where they advise 

individuals on the appropriate 

solutions for their short and 

medium term investments and/or 

how to provide for their pension. 

Anything around the investment 

decision-making world is our call. 

We therefore see our role as primarily 

as investment professionals, 

who have a duty of care and 

loyalty to our clients. This ensures 

that the advice we give our clients 

places their interests first hence 

ensuring they benefit first from the 

advice. We view ourselves as always 

sitting on the same side of the 

table with our clients. Secondly, 

the CFA charterholder is equipped 

with the technical education on 

investment or wealth issues. You 

see advising people on how to 

invest their money is a technical 

business similar to a doctor advising 

his patient on his health. So as 

doctors look after your health, we 

(CFA Charterholders) look after 

your wealth. 

CFA Charterholders also work 

with the mutual funds. In this role, 

the job entails working with portfolios 

and ensuring the attainment 

of the fund mandate. For instance, 

assuming there is a Nigeria Equity 

fund that is looking to form a Nigerian 

index. Under that scenario, 

the CFA charterholder will run the 

fund with the view of trying to do 

just that within a specified risk 

boundary. So that is the benefit 

that you have when you engage 

an adviser who demonstrates 

that they have more skills than 

someone who do not have the 

qualification. 

Why are you in Nigeria? 

The main reason is to support 

the local Nigerian Society, I have 

never been to Nigeria but for us 

at the Institute, it is a fast-growing 

market in terms of candidates 

for the CFA exams as well as CFA 

charterholders. So my main reason 

for visiting is to find out how 

to support the CFA charterholders 

in the country in their mission to 

improve the quality of the local 

investment industry, as that is the 

basic challenge. 

The second reason is that I 

came to learn about the Sub-Saharan 

Africa, which is now becoming 

a focus, in the next 5-10 years, for 

the CFA Institute. We have been 

very successful in North America 

and Asia, becoming increasingly 

so in South America & Europe 

but in Africa, we have not been as 

successful as we ought and would 

like to be. So this is part of a loitering 

program, if you like, so in the 

process of time, I will be in Kenya, 

Uganda and Rwanda. I am just trying 

to extend my knowledge of the 

Sub-Saharan African countries so 

that we can better bring the CFA 

charter to a large part of the African 

society. In summary, my two 

reasons are to speak and spend 

time with our members in the Society 

here and to learn a little bit 

more about Africa and its potential 

for our professional body. 

How do you describe the 

Nigerian market to investors? 

Basically, I think in terms of 

attracting foreign capital into 

Nigeria; the higher the quality of 

the investment community, the 

more likely foreigners are going 

to invest. As everybody knows that 

Africa, and in particular Nigeria, 

has a huge potential of opportunities 

however there is a mismatch 

between the skills that Nigeria has 

to handle the incoming money 

and to deploy it effectively and 

sensibly for the society’s use which 

is what foreigners want. There is a 

huge gap between the potential of 

the country and the ability of the 

country to attract foreign money, 

and we see our role as being a 

bridge. The more CFA charterholders 

in Nigeria, the higher the 

quality of investment in Nigeria 

and the more interest foreigners 

will have for investment. This is 

because investments is about trust 

and CFA Charterholders are well 

trusted globally. 

Do you then think our challenge 

here is one of advisory? 

I think it is one of trust and 

intermediation, the work that an 

investment manager is doing is 

that of intermediation between 

providers of funds and the users 

of the funds and that relationship 

is based on largely on trust. The 

foreign investor usually do not 

understand Nigeria and is therefore 

will be concerned with the 

security of their investment and 

so having a high quality intermediary 

process will make it easier for 

such a foreign investor to make 

the decision. If they are convinced 

that there are opportunities that 

can be explored in a trust oriented 

environment, then no foreigner 

can look at Africa with any other 

eye, but that this is a place where 

the future should be built. 

Why are investments not 

flowing into Nigeria as expected? 

I think the challenge is probably 

due to lack of human infrastructure 

which obviously works 

hand in hand with the appropriate 

legal structures. You know people 

expect there to be enforceable law 

and consistent regulations overtime 

as these are the key ingredients 

that foreigners look for in 

Africa. What highly skilled people 

provide is a continuous improvement 

of the investment markets 

although it is not the answer but it 

We therefore see our role as 

primarily as investment professionals, 

who have a duty 

of care and loyalty to our clients. 

This ensures that the 

advice we give our clients 

places their interests first 

hence ensuring they benefit 

first from the advice 

is part of the process of improving 

the markets in a country. Other requirement 

for an attractive investible 

environment is a government 

that is consistent in its policies and 

makes it easy to transact business 

in the country; cutting through red 

tapes and making sure that there 

is protection of property interest 

and corruption is at its minimum. 

All of these things go hand in hand 

with high quality governance. So 

it’s not just one thing, it is a mix 

and we don’t feel we are the most 

important of that mix but just a 

piece of it. 

On the other hand, whenever 

I come to Africa, I am always encouraged 

by the fact that when you 

talk to the average African whether 

in Nigeria, Egypt, Kenya or South 

Africa they are full of energy, full of 

ambition, very well motivated and 

enthusiastic about their country. 

All the members of the CFA Society 

Nigeria are volunteers, who 

are working and contributing to 

Nigeria enthusiastically and I see 

that spirit wherever I go in Africa. 

The government may not be the 

ones that the people deserve in Africa 

but I think that will change over time. I 

think things are changing for the better. 

Our role is to help Africa achieve a higher 

standard with members that are ready to 

contribute to their country. 

How did your meeting with the 

authorities go? 

Very well, the Acting President was 

very gracious and I was incredibly impressed 

by his high intelligence and 

charisma; he is an individual who has 

the ability to cut through what the CFA 

charter stands for within a few minutes 

of explanation. He understood clearly 

how we could help Nigeria in terms of the 

ethical standards, which is embedded in 

our global training and part of what we 

bring to the market. He offered us every 

possible help that we require to help 

entrench ethical values in the Nigerian 

business sphere. The honourable Minister 

of Industry, Trade & Investment, who 

is a CFA charterholder, provided support 

in most of the conversations and the Acting 

President was welcoming and willing 

to help grow the CFA ideals in Nigeria. He 

actually asked us when we will be setting 

up in Nigeria (he chuckles). 

We are working very closely 

with the Securities and Exchange 

Commission (SEC), National Pension 

Commission (PenCom) here 

in Abuja and we hope to continue 

working with them to introduce 

some initiatives in the Nigerian financial 

market aimed at improving 

the quality of the financial market 

infrastructure. 

A few things that need to be 

done were identified and this 

included resolving the technical 

challenges within the pension industry 

on investment performance 

reporting, deepening the securities 

market and introducing derivatives 

and a few other things required 

to aid the growth of the securities 

market. 

There is also a lot to do around 

the human capacity building part. 

The CFA Institute can also bring 

a lot of expertise and add value 

to the pension fund regulations, 

the derivatives market, corporate 

governance, etc. We are not-forprofit 

but interested in investing 

in Nigeria, we want to work with 

the government to raise standards 

especially with respect to human 

capital development in the 

investment industry, retirement 

schemes, corporate governance 

and capital market development - 

these being the major areas identified 

from today’s meetings. We had 

very good meetings with the Pen- 

Com and SEC, we are working with 

them on investment performance 

standards and training. 

We know that our capital 

market is not deep enough, 

what do you think is responsible 

and how do you think we 

can deepen it? 

Well, it’s always a “chicken and 

egg”, there is need to mobilize more 

domestic savings before you can 

have a deep capital market, that 

is what I was emphasizing in my 

visit to PenCom – it is amazing 

though how quickly the pension 

fund market is growing in Nigeria. 

In addition, you also have the Sovereign 

Wealth Fund, these pool of 

funds must be used creatively to 

deepen the capital market. It was 

very interesting to hear PenCom 

state that 5% of the pension funds 

can be invested in infrastructure, I 

mean that is forward thinking, very 

strategic and clever although it is 

easy to say and harder to do but 

that is really the right approach. 

There is no magic work to improve 

the capital market - it has to come 

from developing domestic savings 

first which you do through having 

good products for people to invest 

in, adequate returns on savings, 

mutual funds, insurance products 

and other products are ways you 

can help Nigerians to save in a profitable 

fashion and the other side of 

that is having good regulations to 

help the money flow to where the 

economy can safely use it. 

For instance, there are financial 

needs in power generation, roads, 

rail or port and other types of infrastructural 

spending, education, 

healthcare; all these basic amenities 

and infrastructure require 

funding to get Nigeria to a higher 

level of development. 

How can the CFA Institute 

help the SEC, NSE and the 

stakeholders in the industry? 

The CFA Institute have the international 

best practice; we are 

active in 155 countries around the 

world, and have generated a lot of 

research ourselves to help various 

stock exchanges in developing new 

initiatives which can be executed 

in this market. We can also act as a 

convener; bring foreigners, experts 

to Nigeria to help advice as well. We 

can hold events to publicize SEC/ 

NSE events /initiatives and provide 

trainings on specific topics such as 

corporate governance, ethics, and 

investment management topics 

as well. 

What is the CFA membership 

like, globally? 

We have about 145,000 members 

and that is growing by about 

6,000 to 7,000 annually. So it is a 

large organization, we think there 

are about a million people who 

work around the world in the investment 

management sphere and 

we think about 145,000 are CFA 

charterholders or people who are 

studying to become charterholders. 

Our penetration is about 14 or 

15 percent of the global market, we 

would like it to be 100 percent not 

because we are a perfect organization 

but because we think anybody 

who looks after other people’s 

money should have the best qualification 

just as is the case in the 

medical field. We find however that 

this is not the case with too many 

financial institutions not having 

people with the right qualification 

for the job they are doing, resulting 

in the low reputation investment 

profession at large has amongst 

investors. Most investors do not 

believe investment professionals 

add enough value to their lives. 

This is because most of us are not 

properly trained but are in the profession 

to make a lot of money out 

of their clients which is not being 

professional. What the CFA Institute 

is doing globally, and through 

our Society in Nigeria and working 

with the regulators is to improve 

the quality of the profession. 

So why do you think CFA 

Institute is not yet successful 

in Africa? 

We have not really put our 

resources in Africa the way we 

should. Usually, the way we develop 

in a new country or continent 

is first through working with the 

regulators. We therefore have to do 

a lot of work to do with the regulatory 

authorities; Securities and 

Exchange Commissions, the Securities 

Exchanges – both Stock Exchanges 

and the OTC Exchanges, 

Central Banks, Pension Regulators, 

Insurance Regulators, etc. We need 

to create the awareness of the body 

of knowledge embedded in the CFA 

programs. We also need to get them 

to understand the core benefits of 

these programs together with the 

benefits of having well-trained 

staff. This is the first issue. 

Secondly, we need to work on 

the supply side; that is working 

with the Universities and Employers. 

For the Universities, we 

goal is to get them to understand 

why they should incorporate and 

teach the CFA curriculum and for 

Employers, the objective is enlighten 

them as to why they should 

employ CFA charterholders and 

the benefits charterholders bring 

to their business. This will ensure 

there is a pool of highly skilled and 

well trained people working to 

global standards with a call of ethical 

excellence which is the heart of 

everything. 

How successful are your 

discussions in Africa? 

Well, similar to the CFA Society 

Nigeria, we have a society in Kenya, 

Egypt and South Africa, so we 

have about 3,000 charterholders 

in Africa till date. Compare that to 

Hong Kong where I live, we have 

8,000 charterholders in a country 

of 7 million people. So we have a 

long way to go in Africa in terms 

of our charterholder base. Like I 

said, there is a need to work with 

Regulators, Universities and Employers 

in each country, find the 

people who really want to work 

with us to improve the fabric of 

the financial community. We help 

countries in capacity building by 

having excellent globally trained 

people who can run business from 

the perspective of being true professionals, 

like you would expect a 

lawyer, an accountant, a doctor to 

be professionals in their services to 

their clients. 

How has the response been 

like in Africa? 

Excellent, there is no shortage of 

appetite for what we have in Africa. 

Firstly, we provide a very accessible 

global and technical education and 

secondly, the call of the ethical 

content behind the program is next 

to none. These two things, I think, 

are really appealing in Africa. Africans 

wants to be on a level playing 

field with American, Europeans, 

Chinese and our qualification gives 

that. A young Nigerian sits the same 

examinations as a young American 

does so it is very rare qualification 

that is globally transposable and 

globally recognized. Anybody 

doing business with a CFA charterholder 

in Nigeria, United States 

of America, United Kingdom, Germany 

or any other country knows 

that the person is trained to the 

same level of standard regardless 

of residency. It is a very powerful 

tool of engagement. 

Are there CFA test centers 

here? 

No, there is currently no test 

center in Nigeria; the nearest test 

centre is in Ghana. Nigerian candidates 

have had to travel across 

two countries to get to a test centre. 

In spite of that, it is amazing and a 

huge tribute to young Nigerians, as 

we have about 2,000 young Nigerians 

who do this journey every year 

to sit for the CFA exams. We are 

aware that this is a huge expense, 

time commitment and strenuous so 

I am determined to ensure that Nigeria 

have test centres; one in Abuja 

and one in Lagos so Nigerians can 

sit for the CFA exams conveniently 

here. My belief is that we should 

be able to have our first test centre 

within eighteen months and the 

second within three years. So two 

test centres in the next three years.



C002D5556 

BUSINESS 

TRAVEL 

High operating standards, certifications key 

to attracting global airline partnerships 

Stories by IFEOMA OKEKE 

High air operating 

standards, 

attaining and 

maintaining 

the International 

Air Transport Association, 

IATA Operational 

Safety Audit (IOSA) certification 

have been identified 

as the key factors that could 

attract international airlines 

to enter interline agreement, 

also known as codeshare 

with domestic airlines in 

Nigeria. 

A codeshare agreement 

is an aviation business arrangement 

where two or 

more airlines share the same 

flight. Sharing, in this sense, 

means that each airline 

publishes and markets the 

flight under its own airline 

designator and flight number 

as part of its published 

timetable or schedule. 

A seat can be purchased 

on each airline’s designator 

and flight number, but is 

operated by only one of these 

cooperating airlines, commonly 

called the operating 

carrier. 

BusinessDay’s checks 

show that no single domestic 

airline codeshares with 

foreign airlines operating 

in the country. Experts say 

this development could be 

harmful to the sector, as 

connectivity remains the 

major driver of any aviation 

sector. 

Raphael Kuuchi is the 

Vice-President, International 

Air Transport Association 

(IATA) for Africa have said 

that connectivity not airlines 

is what Nigeria needs and 

this can be made possible 

Cross section of American Express Global Business Travel team and Air France-KLM team. 

when airlines codeshare. 

“For the mega carriers, 

they have standards. If an 

airline wants to partner with 

you and you realised that 

the standard of that airline 

are not up to the standard 

of your airline, chances are 

that they may reduce the 

value of your product. It is 

a major concern. Secondly, 

most of the major carriers 

want the smaller carriers 

in Africa to have minimum 

IOSA certification. 

“They want you to be 

able to operate through 

the IATA clearing house. If 

I have to sign a code-share 

with you and all you are 

doing is to control all your 

sales directly and you are 

not in the clearing house, 

how can I get my money? 

We need to put a structure 

in place to really be able to 

achieve this. 

“Because of these, most 

mega carriers say they don’t 

want to do any deal unless 

you come up to that level. 

That is the simple explanation 

why most foreign airlines 

will not go into codeshare 

with African airlines,” 

Kuuchi said. 

Kuuchi disclosed that 

in the last few years, IATA 

lost a good number of African 

airlines, which have 

come on-board the IOSA 

register because they could 

no longer meet up to IATA 

standards. 

BusnessDay checks show 

that before now, about five 

out of eight domestic operational 

airlines in Nigeria 

were IOSA certified, after 

two years, a good number 

have fallen off the list. 

Tayo Ojuri, is an industry 

expert and Chief Executive 

Officer, Aglo Limited, an 

aviation support service 

told BusinessDay that maintaining 

IOSA certification, 

operating high safety and 

maintenance standards and 

having excellent flight track 

customers service are basic 

conditions to attract international 

codeshare. 

Ojuri explained that customers 

service talks about 

the service on-board, the 

service on ground and on 

time departure. 

“For example, Emirates 

and Qatar Airways are really 

big airlines and connect several 

destinations. To attract 

these airlines to codeshare, 

domestic airlines must meet 

up to some basic international 

standards,” he added. 

BusinessDay’s checks 

show that in a bid to expand 

network between North 

America, Europe and India 

Delta Airline started codeshare 

with Jet Airways and 

KLM. 

Emirates code shares with 

Bangkok Airways available 

on Thai routes and other 

South East Asian destinations. 

The airline also code 

shares with Flybe available 

on UK destinations. 

Etihad Airways code 

shares with Aer Lingus, Air 

Canada, Air Baltic to ply 

Dublin, London-Heathrow, 

Manchester and Amsterdam 

routes. 

“The fact that some of 

our domestic airlines are not 

IOSA compliant is sufficient 

for the foreign airlines not to 

codeshare routes with them. 

IOSA is a global safety standard 

for all airlines operating 

international air transportation 

services. The Abuja 

Declaration 2012 has made 

it mandatory for African 

airlines to comply with IOSA. 

“There are also other best 

practices in international airline 

operations that go with 

the codeshare such as the 

Bill Settlement Plan, (BSP), 

which is an IATA mode of 

payment for tickets sold on 

codeshare routes. 

“The truth is that, unlike 

the foreign airlines that are 

mostly owned by their government 

or the public, our 

domestic airlines are single 

ownership and they hardly 

make known to the public 

nor the regulatory agency, 

the true statement of their 

financial accounts or their 

balance sheet even as demanded 

by the national 

civil aviation regulations 

(NCAR),” John Ojikutu, secretary 

general of the Aviation 

Round Table, ART and 

chief executive officer of 

Centurion Security & Safety 

Consults told BusinessDay. 

“Aside from the Medview 

airline that recently got 

quoted in the capital/stock 

market, all our domestic airlines 

are single ownership; 

which of the foreign airlines 

that are generally quoted in 

either London or NY stock 

market would want to do 

business with the Nigerian 

airlines that their commercial 

business activities are 

generally not transparent?,” 

Ojikutu said. 

Nigerians to benefit from Emirates’ 

discount offer to Dubai 

Emirates is offering 

Nigerian travellers 

the opportunity to 

visit Dubai with a 

special Economy and Business 

Class return airfare that 

includes a free third piece of 

luggage of up to 23 kg and a 

“My Emirates Pass”. 

Under the special offer, 

an Economy Class ticket 

from Lagos to Dubai costs 

875dollars for low season 

and 941dollars for high seasons, 

while Business Class 

goes for 3827dollars for all 

seasons. The fare offer is for 

a limited time only and tickets 

must be booked between 

July 13th and 26th 2017, 

while travel must take place 

between 16th August and 

30th November 2017. The 

cost of the ticket includes 

airport taxes. 

Emirates is also offering 

a 3rd piece of luggage of up 

to 23kg for Economy Class 

and up to 32kg for Business 

Class, as well as a ‘My 

Emirates Pass’, which can 

be used for exclusive offers 

and discounts across 

Dubai. 

The ‘My Emirates Pass’ 

gives customers special 

discounts at over 120 world 

class restaurants and hotel 

dining outlets in Dubai. Exclusive 

offers are also available 

on a range of leisure 

activities including visits to 

championship golf courses, 

thrilling theme parks or 

luxury spas across the city. 

With year-round sunshine, 

world-class shopping 

and restaurants, stunning 

beaches and iconic buildings, 

Dubai offers something 

for the whole family. 

Visitors to Dubai can use 

My Emirates Pass to enjoy 

some of the city’s newest 

attractions including mustsee 

places like Dubai Parks 

and Resorts featuring three 

theme parks: Bollywood- 

Parks Dubai, MOTION- 

GATE Dubai, as well as the 

region’s first LEGOLAND® 

Park and LEGOLAND® Water 

Park. 

Lufthansa airlifts 60m passengers first half of 2017 

In the first half of the year, 

around 60 million passengers 

were transported 

via Lufthansa airlines, 

17.2% more than in the first 

half of 2016. Overall, the Lufthansa 

Group carried more 

passengers than ever before 

in the first half of 2017. The 

seat load factor has reached 

a historical peak of 79%. The 

figure was 2.7 percentage 

points higher than in the 

previous year. 

The airlines also welcomed 

on board around 12 

million passengers in June 

2017. This shows an increase 

of 18% compared to the previous 

year’s month. The available 

seat kilometers were 

up 12.3% over the previous 

year; at the same time, sales 

increased by 15.9%. The seat 

load factor improved accord- 

ingly, rising 2.6 percentage 

points to 82.8%, compared to 

June 2016. 

The currency adjusted 

pricing environment in June 

was positive. 

Cargo capacity increased 

2.9% year-on-year, while 

cargo sales were up 8.1% in 

revenue ton-kilometer terms. 

As a result, the Cargo load factor 

showed a corresponding 

improvement, rising 3.3 percentage 

points in the month. 

Overall, the cargo capacity in 

the first half of 2017 was 2.9% 

higher than in the previous 

year. At the same time, cargo 

sales in this period increased 

by 7.1%, resulting in a load 

factor of 2.7 higher percentage 

points. 

Network Airlines 

The Network Airlines 

Lufthansa German Airlines, 

SWISS and Austrian Airlines 

carried 8.8 million passengers 

in June, 6.7% more than in the 

prior-year period and therefore 

up to 5.1% more than the 

previous year’s month. 

Compared to the previous 

year, the available seat 

kilometers increased by 2.6% 

in June, at the same time 

the number of flights were 

reduced by 1.9%. 

The sales volume was up 

6.2% over the same period, 

raising the seat load factor 

by 2.8 percentage points to 

83.2%. In the first half of the 

year, the Network Airlines 

carried 45.5 million passengers 

and therefore 5.9% more 

than in the same period of 

the previous year. During this 

period, the seat load factor for 

Network Airlines increased by 

3 percentage points to 79.3%.


C002D5556 BUSINESS DAY 23 

CITYFile 

ANGWA BOROR 

FLOOD 

Two Hours rainfall 

that flooded million 

of naira properties 

away in Angwa 

Boro along Kaduna 

road in Tafa Local 

Government Area 

of Niger State on 

Tuesday. 

Pic by Tunde 

Adeniyi 

Calabar tank farm fire: 

Victims get 2m from NEPZA 

… eyewitnesses relive experience 

MIKE ABANG, Calabar 

Victims of Saturday’s tank farm fire 

at the Calabar Free Zone Enterprise 

(FZE) in Cross in River State, 

have received their first major 

financial relief from the Nigerian 

Export Processing Zone (NEPZA). 

Emmanuel Jime, managing director of 

NEPZA, announced the donation of N2 

million to victims on Tuesday. The FZE was 

engulfed in fire on Sunday, leading to the 

death of about persons, while several others 

sustained varying degrees of injuries. Jime 

was at the enterprise zone to assess the level 

of damage to property. 

The MD, who also visited the University 

of Calabar Teaching Hospital (UCTH) where 

some victims are receiving treatment, described 

the incident as monumental tragedy 

not only to the people of Cross River State, 

but to the entire nation. 

‘’The tragedy is of monumental proportion, 

it shouldn’t have happened. I think 

the spirit of human race is that we are able 

to overcome and we have seen the spirit 

on display here at the University of Calabar 

Teaching Hospital. In the face of very daunting 

challenges, this hospital has done tremendously 

well, so far lives have been saved, 

as an authority, there is very little we can do , I 

Community seeks FG’s protection over renewed boundary clash 

ANIEFIOK UDONQUAK, Uyo 

Communities in Ibiono, Itu and 

Uruan local government areas 

of Akwa Ibom State have sought 

Federal Government’s protection 

over the renewed border skirmishes 

with Ikot Offiong community in Odukpani 

local government area of Cross 

River State. 

Several houses and other property worth 

million of naira have been reportedly destroyed 

in the lingering boundary dispute 

have directed the head of the CFTZ to initiate 

a process of a little token of two million naira 

to aid the victims” 

Thamos Agan, the Chief Medical Director 

(CMD) of UCTH said many people caught 

in the fire were battling varying degrees of 

burns. He disclosed that six persons were 

brought dead, eleven others with severe 

burns of 60-90 degrees, while four persons as 

at Tuesday were dead, bringing the number 

of dead to ten, while seven others are receiving 

treatment at the hospital. 

The Calabar FZE in Esuk Utan community 

is host to several tank farms belonging 

to different oil marketers. The fire was alleged 

to have resulted from the illegal activities of 

one of the tank farm operators. 

Cityfile gathered that a vessel was supplying 

Premium Motor Spirit (PMS) popularly 

known as petrol to two of the tank farms 

around 2:00am on Sunday. The distance 

between the vessel and the tank farm is 

about a kilometre. 

While the discharge was going on, a staff 

of one of the tank farms, identified as Sunny, 

opened the pipes inside their premises to 

siphon petrol. It was believed he was working 

with others and had been successful for 

a while until the pressure from where he 

was siphoning flung him off. It could not be 

ascertained what caused this. But the man 

between the two states while many lives 

have been lost on both sides from repeated 

the attacks. 

The latest clash erupted barely few days 

after stakeholders from the affected areas 

held a peace meeting attended by traditional 

rulers, youth leaders and the deputy 

governor of the two states. The meeting was 

to bring an end to the hostilities and wanton 

destruction of lives and property. 

According to Ekong Demson, a community 

leader from Ibiono Ibom local government 

of Akwa Ibom State, the people of Ikot 

was confirmed to have died on the spot. 

The petrol now flowing in huge quantities 

filled the premises and flowed through 

gutters back into the river and into the Esuk 

Utan community. This was around 4:00 am. 

Members of the community were said to 

have woken up to see petrol flowing through 

their gutters and decided to scoop the product 

for themselves. 

It is believed there must have been a spark 

which set off a fire and killed six of them on 

the spot. The fire followed the petrol through 

the gutters back to the vessel that supplied it 

but the men on board managed to stop the 

fire from engulfing the vessel, using sophisticated 

fire-fighting equipment. 

However, a fishing settlement on the waterfront 

nearby was not so lucky. The settlement 

which also serves as a fish market was razed 

and seven residents lost their lives. According 

to eyewitnesses, several wooden canoes and 

engine boats were caught in the inferno. 

Three vessels in the adjoining Nigeria 

Ports Authority (NPA) were also affected 

by the fire. The fire also affected the tank 

farm where the problem started but it was 

also checked by sophisticated fire-fighting 

equipment in the premises. 

A staff of one of the tank farms, who 

craved anonymity, narrated the incident. “I 

saw someone whose entire legs had melted 

in the fire. It was only his bones that were 

sticking out. I do not know if he would survive. 

It was very horrible. 

Offiong allegedly hired “mercenaries from 

Cross River State armed with sophisticated 

weapons to attack defenceless fishermen 

along the river in Itu, killing one person 

from Idu Uruan and seized several boats 

and fishing nets.’’ 

Demson alleged that 17 armed mercenaries 

were arrested by the security operatives 

in May at the same location but were 

later released adding that key functionaries 

from the neighbouring state and at federal 

levels were neck deep in the sponsorship 

of the crisis. 

Briefs 

Ebonyi to launch ‘war’ 

against cultism 

Ebonyi Government says it will begin 

massive clampdown cult groups 

from August in order to rid the state 

entirely of cultists. 

The governor, David Umahi said this 

in Abakaliki during the launch of the 

state’s new security outfit, code-named 

‘Neigbourhood watch’. 

According to Umahi, the onslaught 

will be devastating as it will not spare cult 

members whether in government circles 

or other sectors of the state. 

“We have compiled the names of individuals 

in the state’s governance who 

have decided to remain cultists, including 

those in the House of Assembly and 

other places. 

“We would identify, publicly disgrace 

and prosecute them as I am constructing 

new prison buildings to give those of high 

calibre decent accommodation,” he said. 

The governor urged members of the 

new security outfit to desist from drinking 

inside bars or other drinking joints, noting 

that it constituted an offence to do so. 

Police arrest courier with 

N17m drugs in Kano 

The police in Kano have arrested a 

22-year-old man, Stanley Arinze, for 

allegedly transporting hard drugs 

(Tramadol) worth N17.2 million from Lagos 

to Kano. 

The public relations officer in Kano, 

Magaji Majiya said the suspect was arrested 

on July 16. 

“Arinze who resides at Jaba Quarters in 

Kano is an indigene of Anambra state; he is 

in police custody for transporting 25 cartons 

of hard drugs (Tramadol tablets) valued at 

N17.2 million from Lagos to Kano.’’ 

He said that the drugs were concealed 

in LG Plasma TV to beat security agents 

on the road. 

“The suspect passed through security 

checks from Lagos, but the trailer was intercepted 

along Kano Eastern Bye-pass by 

vigilant detectives” he said. 

The police spokesperson said that the 

suspect had confessed to the crime, and the 

detectives had swung into action to arrest 

his accomplices. 

NAFDAC arrests 4 men in Aba 

for revalidating beverages 

The National Agency for Food, Drug Administration 

and Control(NAFDAC), 

Abia office, has arrested four men in 

Aba for allegedly revalidating beverages. 

Olisa Okeke, the Abia coordinator of NAF- 

DAC, said that the arrested men relabelled 

the beverages with new expiry dates. 

Okeke said a joint team from Lagos and 

Abia offices led by Emeka Onwuasonya arrested 

the men at Eziukwu market on Monday. 

The coordinator said that the suspects 

were caught revalidating drinks in cans and 

dairy products at the time of the arrests. 

He said that the men had been moved 

to Lagos for further investigation and prosecution. 

Okeke said it was unfair for people to 

fake or revalidate products, knowing it was 

harmful to the body. 

According to him, NAFDAC has devised 

new means of tackling the menace and 

would not relent in its efforts to check the 

perpetrators.

24 


24 BUSINESS DAY C002D5556 

POLITICS 


Lagos council polls wobble on 

back of legal tussle, uncertainties 

NATHANIEL AKHIGBE 

Candidates of about 

twelve political parties 

will on Saturday compete 

for the positions 

of chairmanship and 

councillorship in the 20 Local Government 

Areas (LGAs) and the 37 

Local Council Development Areas 

(LCDA) in Lagos State. According 

to information available on the 

Lagos State Independent Electoral 

Commission (LASIEC)’s website, 

the competing parties include Accord 

Party (AP), Action Alliance 

(AA), Alliance for Democracy (AD), 

All Progressives Congress (APC), 

People’s Democratic Party (PDP), 

Labour Party (LP) and All Progressives 

Grand Alliance (APGA). 

Others are United Democratic 

Party (UDP), United Progressive 

Party (UPP), KOWA Party (KP), 

National Action Council (NAC) and 

People’s Democratic Movement 

(PDM). 

The journey to the exercise has 

witnessed huge drama and the 

level varied from one party to the 

other. Expectedly, there have been 

serious intrigues in the ruling party 

in the state- the All Progressives 

Congress (APC). 

Given the wheeling and dealing 

that have characterised the process, 

some political pundits are not very 

optimistic that the elections would 

produce worthy outcome, with 

many of the pundits seeing the possibility 

of a deluge of legal tussles 

after the exercise. 

Those who hold this view point 

to the protests and much talk about 

alleged imposition of candidates in 

some of the parties. 

As if he envisaged what was to 

happen during the acrimonious 

All Progressives Congress (APC) 

primaries at Teslim Balogun, Muiz 

Banire (SAN), the APC national 

legal adviser, in a letter addressed to 

the State Chairman, Henry Ajomale, 

warned that the process to select 

flag bearers for the local government 

elections in Lagos should not 

be manipulated in favour of certain 

candidates. He also opposed the 

decision of the Lagos chapter of the 

party to conduct primaries election 

for all the aspirants in a centralised 

location. 

“As the custodian of the party 

constitution, it is of utmost necessity 

for me to say immediately that this 

will not be in consonant with the 

letter and the spirit of the constitution. 

The (APC) constitution confers 

the power to designate the venue of 

such council primaries in the party 

executive of the local government”, 

Banire said, stressing that in other 

states, local government primary 

elections were never done in centralised 

locations. 

An Ikeja Lagos State High Court 

presided over by Justice Doris Okuwobi, 

had on July 7, held that no pri- 

Muiz Banire 

maries were held by the APC on May 

27, 2017, in respect of Odi-Olowo 

LCDA, in a suit filed by Hakeem 

Abolaji Saka, against the APC and 

LASIEC, and thus ruled that fresh 

primary be conducted in the LCDA. 

The Applicant had prayed the 

Court, among other things to declare 

null and void the said primaries 

and to state that no primaries 

were held on the said date, in respect 

of the Odi-Olowo APC LCDA 

chairmanship office for the forthcoming 

election. As at last week, 

names of many candidates for the 

LCDA were said to still be missing 

from the list. 

In the suit, Saka prayed the 

court to declare that: “Any primaries 

held were contrary to Article 

20(i), (ii), (iii) and (iv) of the Party’s 

Constitution; the state chapter of 

the party did not hold primaries as 

there were no delegates. Names of 

imposed candidates were drawn 

up as returned with a view to sending 

to LASIEC 2nd Defendant as 

candidates of the party. Any list of 

returned APC Candidates is null and 

void as they did not emerge from 

democratic primaries as provided 

for by the party’s Constitution.” 

The National Conscience Party 

(NCP) also instituted a legal action 

against the LASIEC, over legality of 

requirements in the guidelines for 

registration of candidates and rejection 

of 77 party names submitted 

to it for validation. The opposition 

party described the developments 

as “undemocratic and dangerous” 

for the forthcoming LGA elections 

in the state. All the candidates of 

NCP were said to be missing on 

the list. 

Last week, apprehension so 

took the better part of a number of 

stakeholders from different political 

parties that many of them rushed 

to the secretariat of the LASIEC to 

ascertain both validated and invalidated 

candidates as released by the 

commission. 

I am not talking 

about hurriedly 

put together 

enlightenment 

session with its 

attendant 

anxiety; I am 

talking about 

long term planning 

which gets 

everybody ready 

Earlier, Ayotunde Phillips, chairman 

of LASIEC, had explained that 

parties could still present substitutes 

for the invalidated, who would 

make the final list after meeting 

eligibility criteria. 

Taiwo Gbenga, Port Harcourtbased 

political analyst, who is currently 

holidaying in Lagos, posits 

that if the allegation of imposition 

of candidates levelled against the 

ruling party is not resolved to the 

satisfaction of all aggrieved members, 

it may boomerang to hurt the 

APC in the state ahead the 2019 

general election. 

“It just shows that political parties 

in Nigeria are not ready yet for 

internal democracy. A situation 

where party leaders always want to 

impose candidates on the party is 

not healthy and it is largely responsible 

for the kind of people we elect 

into offices. 

“Aspirants must be allowed to 

test their popularity within the 

party. If the processes that produce 

aspirants are not credible it can only 

result in the emergence of people 

who will be loyal to those who 

imposed them and not the electorates. 

The controversy that trailed the 

Lagos primaries is a statement that 

we are not ready yet,” he said. 

It also noted that the list containing 

the names of validated candidates 

for the posts had been pasted 

on the notice board at the Yaba, 

Lagos office of the commission for 

the observation of candidates and 

interested members of the public. 

According to reports, while some 

candidates had been validated, 

others have the validation of their 

candidacy pending, since they 

could not present either evidence 

of tax clearance, their Curriculum 

Vitae or both for clearance, as they 

were asked. 

Some of the contentious requirements 

for the guidelines include: 

N50, 000 fees for chairmanship 

form, resignation from jobs six 

months before the elections, evidence 

of three years tax clearance 

and Lagos State Residents Identity 

Card, among others. 

Emeka Ejiogu, a Lagos-based 

political analyst, said the controversy 

and legal tussle that trailed 

the polls show lack of preparedness 

of the political parties, the state 

electoral commission, candidates 

and electorates as well, saying that 

those are key issues to be focused 

on, if lessons are to be learned from 

it for future local government polls. 

“You can see that candidates 

themselves were not adequately 

prepared for this election; otherwise, 

how do you explain the 

number of them yet to be duly validated? 

The wise thing to do would 

have been for the political parties 

and the LASIEC to work together 

in terms of educating both the candidates 

and the voters about all the 

requirements. 

“I am not talking about hurriedly 

put together enlightenment session 

with its attendant anxiety; I am talking 

about long term planning which 

gets everybody ready. If everyone 

has done the needful there would 

not have been this high number of 

candidates who are yet to be validated 

few days before the elections. 

This is not good enough,” he said. 

He also noted that Lagosians’ 

interest in the local government 

polls is very low, a problem he laid at 

the doorstep of the media, which he 

said did not do enough to inform the 

people of the importance of the tier 

of government closer to the people. 

“Perhaps, Nigerians are not following 

local government elections 

because the state governors have 

hijacked local government. That is 

why we are calling for autonomous 

of the local administration in Nigeria. 

This is actually the government 

that is closer to the people. If the 

local government is given the place 

it truly deserves development of 

Nigeria will be very rapid. 

“At the moment, it is state governors 

that controls funds meant 

for local government and decides 

which project they want to embark 

on in a given local government. 

Some governors actually do projects 

in local government controlled by 

their party and neglect oppositioncontrolled 

local governments. This 

is part of the restructuring of Nigeria 

that we are calling for,” he said.

C002D5556 

BUSINESS DAY 

29 


TechTalk 


Innovation Apps Fin-Tech Start-up Gadgets Ecommerce IOTs Broadband Infrastructure Bank IT Security 

Embracing disruptive technology in 

Nigeria’s financial system (1) 

CALEB OJEWALE 

Te chnology has 

changed the way of 

life in many spheres 

of human endeavour, 

and though often 

scary in view of security concerns, 

financial systems have 

been significantly impacted as 

well. 

Let’s say you are a bank executive. 

Imagine that you are 

competing against a truly global, 

multi-service, low-cost, digital 

bank: customers accessing 

their accounts through their 

mobile phones, paying with a 

tap on their wearables, sweeping 

savings to an ETF portfolio 

(designed by an AI (artificial 

intelligence) engine based on 

their savings goals and risk appetite 

profile) offering no-fee, 

cross-border payments. Imagine 

if you faced a competitor bank 

like this, with a low and nimble 

footprint, prototyping new services 

quickly, managing regulatory 

compliance transparently, 

using an AI system to limit fraud 

losses, and hedging currency risk 

using cryptocurrencies. This scenario, 

presented in a PWC report 

on FinTech 2020 does not exist 

today. But in the next few years, 

Senate committee lauds MainOne’s data centre 

capacity to achieve ICT objectives 

FRANK ELEANYA 

In view of Nigeria’s efforts to 

meet its global objectives in 

information and communications 

technology (ICT), 

MainOne’s data centre has been 

applauded for setting global standards 

and helping the government 

deepen ICT knowledge in the 

country. 

The commendation was made 

when the Senate Committee on 

Information and Communications 

Technology and Cybercrime led 

by its chairman, Senator Buhari 

Abdulfatai paid a courtesy visit to 

MainOne’s Data Center, MDXi in 

Lagos on Thursday, 13 July, 2017. 

The committee said the purpose 

of the visit was in fulfilment 

of its pledge to work with relevant 

agencies to ensure that Nigeria 

meets its ICT objectives. 

During the visit, the committee 

it is a very real possibility. 

PWC’s Financial Services 

Technology 2020 and Beyond: 

Embracing disruption, noted 

that global investments in Fin- 

Tech more than tripled in 2014, 

reaching more than $12 billion. 

In comparison, banks spent an 

estimated $215 billion on IT 

worldwide in 2014, including 

hardware, software, and internal 

and external services. This is a 

material number, and because 

it is so highly targeted, the Fin- 

Tech spending will really make 

an impact. 

The sentiment appears to be 

shared in Nigeria as many banks 

appear to be betting big on Fin- 

members who were taken on a 

tour of the data centre facility, acknowledged 

the capacity available 

on MainOne’s submarine system 

and data center, which it said 

represents the most significant infrastructure 

of its kind in Nigeria. 

With MainOne’s capacity, the 

committee stated, the country’s 

broadband penetration rate can 

increase beyond the 21 percent 

reported by the Nigerian Communications 

Commission (NCC) 

given the rising consumption 

levels for data and connectivity 

services. 

Senator Abdulfatai noted that 

delay in licensing Infrastructure 

Companies (InfraCos) and deploying 

network infrastructure 

after licensing posed a major 

threat to the achievement of the 

nation’s technology goals which 

largely depends on broadband 

infrastructure to be provided by 

Tech in redefining their business 

models as they aim for bigger 

portions of the market share. 

Uzoma Dozie, CEO, Diamond 

Bank plc, said in an exclusive 

interview with BusinessDay, that 

“there are many things that we 

are going to be doing with Tech 

start-ups because it is important 

we do so. And I think there’s an 

opportunity for FinTech and 

small businesses to collaborate 

and grow further.” 

There are small businesses 

that cannot afford to buy a big 

ERP product or a banking application 

but through FinTech, their 

needs can be met seamlessly, 

and cost effectively. 

InfraCos. 

He however assured that the 

Nigerian senate will do all within 

its powers to facilitate ICT/broadband 

development and give legal 

substance to ICT policies including 

the National Broadband 

The senate chairman also reiterated 

the importance of having 

Nigerian institutions host data 

locally within the country in order 

to ensure national security, drive 

job growth, improve the quality 

of online services and guarantee 

Nigerian’s participation in the 

emerging global digital transformation. 

Funke Opeke, MainOne’s chief 

executive officer lauded the senate 

committee’s efforts in ensuring 

the development of ICT across 

the country through its support 

of homegrown enterprises and 

called for legislation especially 

in the areas that will positively 

“A classic example is PayStack 

which is providing payment 

solutions that are more cost 

effective for those types of businesses 

where one can just plug 

and play, and we are also creating 

avenues for that,” said Dozie. 

PWC’s report notes that the 

financial services industry has 

seen drastic technology-led 

changes over the past few years. 

Many executives look to their 

IT departments to improve efficiency 

and facilitate gamechanging 

innovation – while 

somehow also lowering costs 

and continuing to support legacy 

systems. Meanwhile, FinTech 

start-ups are encroaching upon 

established markets, leading 

with customer friendly solutions 

developed from the ground up 

and unencumbered by legacy 

systems. 

Customers have had their 

expectations set by other industries; 

they are now demanding 

better services, seamless experiences 

regardless of channel, and 

more value for their money. Regulators 

demand more from the 

industry too, and have started 

to adopt new technologies that 

will revolutionise their ability to 

collect and analyse information. 

And the pace of change shows no 

signs of slowing. 

impact on infrastructure development 

including possible interventions 

to address the high 

cost of capital crippling telecoms 

companies which has significantly 

slowed down new infrastructure 

projects in Nigeria. 

She further stated that what is 

needed is bridging the gnawing 

gaps in the ICT industry. 

“Nigerian content is arguably 

the most globally recognized 

African content today, but South 

Africa and Kenya are perceived 

as leaders in Africa because of 

the infrastructural gaps in the 

country. Ma 

inOne has made significant 

investments in ICT infrastructural 

development in Nigeria and West 

Africa and will continue to do so, 

but we require full government 

support to enable the ICT industry 

in Nigeria surpass other countries,” 

Opeke said. 

Team: Frank Eleanya, frank.eleanya@businessdayonline.com; Caleb Ojewale , caleb.ojewale@businessdayonline.com 

Microsoft appoints 

Akin Banuso 

as General 

Manager for Nigeria 

CALEB OJEWALE 

Microsoft has announced 

the appointment 

of Akin Banuso 

as the new General 

Manager for Nigeria. Described as 

a seasoned technology professional 

and thought leader within the 

technology ecosystem, Banuso will 

lead the company’s digital transformation 

drive in one of the most 

dynamic, innovative and largest 

economies on the continent. 

“I am very excited to lead the 

Microsoft business in Nigeria. Our 

mission is to empower every person 

and every organization on the 

planet to achieve more, and I see 

so much potential in Nigeria. Since 

2000, Microsoft has been partnering 

in Nigeria’s efforts to empower 

citizens through the development 

of Nigeria’s local software and 

information technology services 

industry. I am delighted to be at 

the forefront of this effort. Having 

collaborated with Microsoft over 

the last few years, I have first-hand 

knowledge of the talent within the 

team, and I’m really looking forward 

to working with them to bring 

the vision to life,” said Banuso. 

Nigeria has shown continued 

expansion, including diversification 

within the oil sector and considerable 

infrastructure investment 

in the Information &Communication 

Technology (ICT) Industry 

vertical. Microsoft firmly embraces 

this tremendous economic and 

social progress, with Banuso at the 

helm, read a statement a statement 

by Microsoft Nigeria. 

Banuso has held many senior 

positions within the Information 

& Communication Technology 

Industry over the past 20 years. 

He joins Microsoft from Dell EMC 

where he spent the last 12 years in 

various positions including Storage 

Practice Manager for Dell Services 

UK, Global Solutions Architect, 

EMEA Cloud and Converged Solutions 

Business Manager, Country 

Manager for Dell Nigeria and Country 

Leader for Ghana. Prior to Dell 

EMC, he held various leadership 

roles with customer organizations 

such as Banque Paribas, Shell 

and Friends Provident in the UK. 

Banuso has also held positions at 

Siebel (Oracle), HP and Accenture. 

As country General Manager, 

Banuso hopes, among many things, 

to address the challenge of local innovation. 

“While most technology 

trends, innovations and consumer 

products come from the West and 

the East, Africans are realising that 

for us to solve the continent’s technology-related 

challenges, we have 

to find African solutions,” he says.

30 

BUSINESS DAY C002D5556 Thursday 20 July 2017 

Retail & Consumer Business 

Luxury Malls Companies Deals Spending Trends 

LG showcases cutting-edge 

technologies at Elan expo exhibition 

…offers consumers innovative products at pocket friendly prices 

Stories by CHINWE AGBEZE 

It was an assemblage of leading 

brands in the technology industry 

at the Landmark event 

centre in Victoria Island, the 

venue of the Elan Expo exhibition 

which held on July 13- July 

15, 2017. 

West Africa HVAC, an event 

which is the first of its kind provided 

a unique platform for notable brands 

to display their latest technology as 

it hosted its maiden edition tagged, 

‘‘Air conditioning, installation system, 

refrigerator, water treatment 

and insulation’’. 

The three-day event offered unrivalled 

opportunity for companies 

to make public statements in terms 

of their positioning in the industry 

and new offerings they would bring 

to the table. 

The venue of the event was alive 

and filled to capacity with exhibitors, 

dealers and visitors. For the exhibitors, 

it was a veritable platform to 

expose their brand to participants. 

LG Electronics, one of the top 

brands at the expo did not disappoint 

industry observers with the 

display of their various innovative 

products which made an impressive 

mark at the exhibition. 

LG’s stand had more visitors 

as participants kept trooping in to 

catch a glimpse of the brand’s latest 

products. 

Some of the arrays of products 

displayed at the stand include; 

L-R: Hari Krishna Elluru, head corporate marketing, LG Electronics West Africa operations; Saheed Adeyemi, sales manager, LG electronics 

West Africa operations; Paul Mba, LG Electronics West Africa operations, and Vijay Bakshi, sales head, LG electronics west Africa operations 

during the CAC Elan Expo exhibition at Landmark event centre in Lagos. 

Multi V IV Pro, Multi V S Outdoor, 

4WAY Cassette, Ceiling Concealed 

unit, Floor standing 5HP and the 

All New Gencool Cool Air Conditioner, 

which was one of the products 

prominently displayed at the 

exhibition. 

‘‘The All New Gencool AC comes 

with a dual inverter and has a 10- 

year warranty on the dual inverter 

compressor. It has a 40percent 

torque vibration reduction resulting 

in the quietest operation of outdoor 

unit,’’ said Vijay Bakshi, sales head, 

LG Electronics West Africa. 

Continuing, Bakshi said, ‘‘it has 

a 15 degrees tilted skew fan which 

minimizes the surface friction of the 

blade when in contact with the air. 

It also has a faster cooling technology 

that operates at a higher speed 

with more stability, cooling air up to 

40percent faster thereby saving up to 

70percent energy when compared to 

conventional air conditioners’’. 

While commenting on the company’s 

performance at the exhibition, 

Cholyoung Park, general manager, 

Air Solution, LG Electronics 

West Africa Operation, applauded 

the brains behind the event saying 

the idea was a laudable one. 

“We are proud to be part of this 

exhibition, and as it was clearly 

observed, LG Electronics displayed 

its array of unbeatable innovative 

products which has stood it out 

among other brands,’’ Park said. 

According to Bakshi, LG’s Multi V 

5 Ocean Black fin heat exchanger is 

a leading example of the new technologies 

which have been designed 

to tackle problems head-on. 

‘‘It enhances corrosion resistance 

and has long lasting performance. 

It’s designed from the ground up to 

offer durability with conventional 

models that operates a 3-sided heat 

exchanger alongside an impressive 

4-sided heat exchanger,’’ he said. 

He also said that the brand’s 

corrosion resistance technologies 

allows the Multi V to pass the ISO accelerated 

corrosion test conducted 

by an independent test organization 

paving the way for a validation of the 

test result by the global certification 

organization UL, Underwriters 

Laboratories. 

‘‘This product would be available 

in the country later in the year for 

organizations and consumers who 

are already hitching to get one. 

No doubt, the West Africa HVAC 

exhibition left a lasting impression 

in the minds of companies, visitors 

and all participants. LG Electronics 

also used the opportunity to show 

that they are a brand to beat in the 

industry as consumers continue 

to get the assurance that life can 

only get better with LG Electronics 

products. 

Association of lottery operators declares 

support for Lagos at 50 Mega Raffle 

STEPHEN ONYEKWELU 

The association of lottery 

operators, under 

the umbrella of National 

Union of Lotto 

Agents and Employees has 

declared its support and readiness 

to spread the good news 

to pundits and all Lagosians as 

the Lagos 50 Mega Raffles enter 

week four. 

Arising from a meeting with 

the organisers of the raffle, the 

body declared that the Mega 

Raffle is a credible programme 

designed to enrich Lagosians 

as they join in the celebration 

of the 50 years of existence of 

the state. 

With this development, Lagosians 

can now have access to 

Lagos at 50 Mega Raffle tickets, 

which goes for N50 only and 

now available with lotto agents 

across the states. 

According to Gregory Olatunji, 

the General Secretary of 

the association, the Lagos at 50 

mega raffle is a credible programme 

well designed to give 

back to the society especially 

at this austere time. 

“We have studied the 

modalities and patterns of 

the Lagos at 50 Mega Raffle 

and can boldly say that it 

is a credible programme 

designed to give back to 

Lagosians as the state marks 

her 50 years of existence. The 

organisers have also demonstrated 

incredible passion 

towards achieving the set 

objectives” Olatunji said. 

“We as a body are therefore 

encouraging our members to 

embrace the programme by 

spreading it to the nooks and 

crannies of the state. It is designed 

to give everybody equal 

opportunity and we appreciate 

that” he said. 

Speaking about the new 

development, Adedayo Ayoade, 

the Chief Operating Officer, 

Betnow Company, the 

organisers of the Mega draw, 

expressed his joy over the show 

of commitment and encouraged 

members of the public to 

go out enmass and purchase 

the raffle ticket to be eligible for 

the daily draw. 

“Giving back to Lagosians 

is the main motive behind this 

project which is attached to 

the Lagos at 50 celebrations. It 

is our belief that well-meaning 

Lagosians deserve to enjoy and 

celebrate with the state hence 

the project. The mega raffle 

gives out N50, 000 to 5 winners 

daily; N100, 000 to 5 winners 

daily and a mega winner of 

N500, 000 daily to one winner. 

At the end of the draw, two 

lucky winners will also be going 

home with N5miillion jackpot” 

he stated. 

Global retail update 

Unilever fights for food 

unit 

The Anglo-Dutch food 

group is reportedly 

involved in a GBP 2 

billion bidding war 

with US meat processor Hormel 

to buy the food division 

of Reckitt Benckiser. But Unilever 

will need some secret 

sauce to make this acquisition 

taste good, according to an 

insider. 

Lidl up in arms 

The discount giant is firing 

back at Kroger, denying 

any wrongdoing after the 

US supermarket operator 

accused Lidl of trademark 

infringement, claiming it 

an attempt to tarnish the 

German chain’s reputation. 

Meanwhile, Kroger tackles 

its own underfunded pension 

problems with a US$ 1 billion 

contribution. 

A bride’s nightmare 

In yet another retail failure, 

Alfred Angelo Bridal 

Signature Stores has unexpectedly 

closed its 60 US 

stores and filed for Chapter 

7 bankruptcy, leaving untold 

numbers of shocked 

customers in a panic. Many 

frustrated brides vent their 

annoyance on social media. 

Hypermarket strategies 

French retailer Casino 

believes it has found the right 

balance for its Géant hypermarkets 

with permanent prices, 

loyalty and promotions, 

while Kaufland is reversing its 

strategy in Germany. Instead 

of reducing the product variety, 

as planned a year ago, it is 

now re-listing a lot of articles. 

Blending online and offline 

Chinese e-commerce 

giant Alibaba has opened 

another three Hema stores, 

expanding its network to 13 

across the country. The physical 

sites also serve as fulfilment 

hubs for online orders. 

Shoppers can scan items for 

more information. 

Payment partnership 

South Korean tech com- 

pany Samsung has teamed 

up with payment service 

Paypal. Users will be able 

to choose the latter as their 

preferred method of payment 

on Samsung’s payment 

app. The offer will 

initially be available in the 

United States 

Warehouse megadeal 

A Chinese consortium has 

bought warehouse operator 

Global Logistic Properties 

for US$ 11.6 billion, the largest 

deal of its kind in Asia. 

The premium paid reflects 

the booming demand for 

warehouse space thanks to e- 

commerce giants like Alibaba 

and JD.com. 

Fashion fallout 

Apparel giant Topshop’s 

floundering Australian operation 

has seen half its stores 

close as administrators restructure 

the retailer. Department 

store chain David Jones’ 

sales have fallen for the year, 

with the company blaming 

the decline on Australia’s 

weak consumer confidence.


C002D5556 

BUSINESS DAY 

31 

Retail & Consumer Business 

Power Oil, Nigeria’s 

healthy cooking 

oil brand took its 

annual health 

awareness walk 

tagged ‘ Power Oil Walk- 

HeartOn’ to Enugu and Port 

Harcourt, last week Saturday. 

The event which is in its 

third edition ran in both cities 

simultaneously on the same 

day witnessed massive participation 

as people turned 

out in their large numbers for 

the walk. 

The annual heart health 

awareness walk is strategically 

designed to promote a 

healthy lifestyle and remind 

Nigerians of the benefits of 

a daily fitness routine by encouraging 

them to walk at 

least thirty minutes a day to 

stay fit and healthy. 

Registration of participants 

commenced very early 

on Saturday morning at both 

locations. Led by Charles 

Ndukwe, commissioner for 

Youth and sports in Enugu 

state, the participants 

walked from Nnamdi Azikwe 

stadium, which is the kickoff 

venue of the exercise to 

Ogui road, towards Otigba 

roundabout and back to the 

stadium. 

In Port Harcourt, the Rivers 

state capital, the exercise 

started at the Liberation 

stadium to Elekahia road 

towards the Air force junction 

Power Oil takes WalkHeartOn 

to Enugu, Port Harcourt 

…records impressive turnouts …Abuja, Ibadan on Saturday 

and back to the stadium. 

The commissioner for 

Youths and Sports praised 

the brand for partnering with 

Enugu State on the project. 

He also considered the 

initiative a worthy one as it 

encourages everyone especially 

the youths to imbibe the 

culture of exercising which 

is in line with the vision of 

the state. 

Amisha Chawla, brand 

manager, Power Oil said, ‘‘it 

is actually the first time having 

Enugu on board on the 

WalkHeartOn project and I 

must say the excitement being 

exhibited by the indigenes 

is indescribable’’ 

‘‘It was such great feelings 

to record this magnitude of 

crowd joined in on a good 

course as this,’’Chawla said. 

She also confirmed that 

the expectation of crowd was 

greatly surpassed in both 

locations as people came out 

L-R: Alionye Emmanuel (MC Bonus), comedian; Ukeje Okechukwu 

(Nigga Raw); Charles Ndukwe, Commissioner for Youths and 

Sports, Enugu State; Charles Okazi, a participant during the Power 

Oil WalkHeartOn 3.0 in Enugu State. 

en masse to join the healthy 

walk. The comedians and 

guest artists in both cities, 

Nigga Raw and MC Bonus 

in Enugu, and Sound 

Sultan and Funnybone in 

Port Harcourt participated 

actively during the walk. 

This encouraged the participants 

and demonstrated 

to them the importance of 

leading a healthy lifestyle 

by taking a healthy walk for 

a healthy heart. 

Mercy Akpotha, one of the 

participants in Port Harcourt 

commended Power Oil for 

investing time and resources 

to ensure that Nigerians stay 

healthy. 

“I have not had this kind 

of exercise in a long while 

and I must say, it was so much 

fun. Thanks to the Power Oil 

brand for bringing up this 

health awareness initiative 

to remind and encourage us 

to stay on top of our healthy 

game,”Akpotha said. 

Omotayo Abiodun, public 

relations manager, Power Oil, 

who took part in the Port Harcourt 

exercise, said the high 

record of participants during 

the walk far exceeded their 

expectation. 

Abiodun also confirmed 

that the grand finale of the 

exercise will hold simultaneously 

in Abuja and Ibadan this 

Saturday adding that it will be 

another blockbuster. 

‘‘Woli Arole and Sanyeri 

will join the walk in Ibadan 

while Sound Sultan and MC 

Bonus will be in Abuja for the 

same exercise. 

‘‘They will take turns to 

perform before and after the 

walk while participants are 

treated to freshly made finger 

foods which will be prepared 

on the spot,” Abiodun said. 

Power oil health camps 

which were also available 

offered free basic medical 

checks for participants to 

ascertain their health status, 

including blood pressure, 

BMI and general medical 

consultation. The organisers 

say the camps will also 

be present in Abuja and 

Ibadan this Saturday during 

the walk. 

Power oil WalkHeartOn 

health awareness project 

started in 2015 in Lagos to 

promote fitness and healthy 

living amongst Nigerians. In 

2016, it further expanded into 

five cities across the country 

-Lagos, Ibadan, Owerri, PHC 

and Abuja. 

Life in Recession 

How Nigerians are struggling to survive 

If you want to contact the writer of this story 

call: +234(0) 803 889 1567, +234(0) 802 223 8495. 

chinwe.agbeze@businessdayonline.com 

Petty trader worried over daughter’s medical bills 

Name: Funke Adeyanju 

State of Origin: Ogun State 

Dependants: Four children 

Business: I used to sell 

bread, biscuits, chin-chin 

and other handy snacks in 

front of my house in Ikotun 

but the business packed up 

after my daughter had an 

accident in October 2016, 

which gulped the little money 

I had, leaving me broke. 

Her boss in a photography 

studio, where she 

worked as an apprentice, 

had sent her on an errand. 

On her way back, a car hit 

the motorcycle she boarded 

and sped off. 

She was rushed to Igando 

General Hospital but 

we had to take her to a traditional 

bone setter to cut 

down cost. She was there for 

seven months but there was 

no improvement. The bones 

could not be set and the sore 

could not heal. 

We took her to Igbobi 

Hospital, paid N20,000 

for tests but were told she 

would be admitted. We had 

to pay N10,000 daily. So, we 

left Igbobi for Ikeja General 

Hospital, Ikeja. 

She was admitted at the 

hospital but when we could 

no longer pay her bills, we 

were told to take her home. 

Now, we go to the hospital 

once in three days. 

How much is the bill? 

We were given a total bill of 

N418,200. They said the leg 

needs surgery but I don’t 

know where to get that kind 

of money from. My husband, 

a motorcyclist, has 

given up hope since his motorcycle 

developed a series 

L-R: Omowunmi Adeyanju, petty 

trader’s daughter and Funke Adeyanju, 

petty trader in their house in Ikotun, 

Lagos. 

of faults a month ago. 

Profit: I made profits 

from the business while it 

lasted, enough to contribute 

towards the upkeep of the 

family. 

School fees: My children 

stopped going to school in 

March this year because 

there was no money to pay 

their school fees. 

House rent: Our house 

rent expired in November 

2016. My brother-in-law 

was kind enough to give us 

a room to live in. 

Feeding: Since my 

daughter had the accident, 

we have been living on the 

goodwill of others. Some 

people give us money to 

buy food. 

Challenge: I want my 

daughter to be able to walk 

again. 

Analysts: Chinwe Agbeze, Stephen Onyekwelu

32 BUSINESS DAY C002D5556 

BUSINESS 

MARITIME 

SHIPPING LOGISTICS MARITIME e-COMMERCE 


Forex scarcity, poor infrastructure biggest 

challenge to efficient port operations - Travers 

...As JPS wins European Quality Award 

Stories by 

UZOAMAKA ANAGOR-EWUZIE 

Scarcity of foreign 

exchange required 

by terminal 

operators to 

settle their annual 

dollar obligations to the 

Nigerian Ports Authority 

(NPA) and the poor state of 

road infrastructure leading 

to the two major seaports in 

Lagos (Apapa and Tin-Can 

Island Seaports), have been 

identified as major setback 

to effective port operations 

in Nigeria. 

Simon Travers, managing 

director of Josepdam 

Port Services (JPS) Nigeria 

Limited, concessionaire in 

charge of Terminal A of the 

Tin-Can Island port, who 

said this in Lagos recently, 

said that scarcity of foreign 

exchange was a massive 

challenge to terminal operators 

in Nigeria owing to the 

fact they have an obligation 

to pay to the NPA in dollar 

to cover for throughput fee 

and royalty. 

“We have been asking 

the NPA to allow us pay 

our obligations to them in 

naira because of the high 

exchange rate, but NPA refused 

on the ground that it 

also has an obligation to pay 

to government in dollar,” he 

lamented. 

Recall that in 2006, after 

the Federal Government 

concessioned cargo handling 

operations to private 

terminal operators on lease, 

the NPA assumed the landlord 

status, which mandated 

the concessionaires to pay 

L-R: John Apata, maintenance manager; Aindero Oladele, operations manager; Simon Travers, 

managing director and Friday Enamegbai, commercial manager. All from Josepdam Port Services 

(JPS) Nigeria Limited at an event held last week in Lagos to unveil the prestigious European Quality 

Award, given to the company by European Committee in Switzerland recently. 

throughput, lease, royalty 

and other categories of fees 

to the NPA. 

Some of the fees were 

paid in dollar, which was not 

an issue at the beginning 

but the situation changed 

two years back when the 

cost of foreign exchange 

skyrocketed as the prices 

of crude oil, Nigeria’s main 

source of foreign exchange, 

fell in the international market. 

According to Travers, 

poor road infrastructure, 

which limits movement 

of cargo in and out of the 

port terminals, was another 

challenge that draws back 

port operations as lots of 

man-hour is lost on traffic 

in and out of the ports. 

“One of the challenges 

that we are having at the 

moment as regards to port 

business is poor infrastructure. 

The road infrastructure 

at the port has become very 

appalling. And for us to 

encourage trade in Nigeria, 

there is need for free flow 

of cargo from the terminal 

to the hinterlands and this 

is becoming the biggest 

challenge against doing 

business in our ports today,” 

stated Travers. 

JPS boss also expressed 

worries over the blame 

game between the Federal 

and Lagos State Governments 

regarding who has 

the responsibility to fix the 

port roads in Lagos (Apapa- 

Oshodi Expressway and 

Ijora-Apapa/Wharf road), 

which have been in sorry 

state over the past five years. 

“We have been asked as 

NPA’s stakeholders to assist 

and we are willing to but the 

Federal Government needs 

to start from finding solution 

to the traffic gridlock by 

removing trucks off the road 

to ease movement of cargo.” 

Despite these challenges, 

Travers disclosed that 

the terminal was recently 

given European Quality 

Awards for its progression 

in productivity, effectiveness, 

environment and staff 

welfare. He said that the 

company, which has been 

under the surveillance of 

the organisers of the award 

since the past two years, was 

nominated for the international 

award and also invited 

to be part of the award 

conference in Switzerland. 

“It was an international 

award organised by European 

Committee. The 

organisers of the award 

collected information and 

statistics on companies’ 

performance, which was 

reviewed and we came out 

the overall best among other 

companies from different 

continents and industries,” 

he added. 

According to him, the 

management of JPS recognises 

the company’s 

partners that include stevedores, 

security officers, 

domestic and other staff, 

whose efforts in one way 

or other contributed to the 

success recorded in the 

past. 

On the significance of 

the award, he said: “This 

award is extra ordinary 

important because it shows 

that we have been recognised 

outside Nigeria. 

We had competitors from 

different industries and 

parts of the world including 

China, Sovereign America 

etc but we came out on top. 

It also allows us to enter the 

international market and 

several foreign investors 

have started talking to us 

on possible partnership 

that would enable them to 

develop their businesses in 

Nigeria.” 

Stating that the international 

award was just the 

first of many awards JPS 

would win, he assured Nigerians 

that the company 

would be at the forefront 

of quality, productivity and 

effectiveness. 

“Our ability to develop 

our staff to become more 

productive was the reason 

why we are investing 

in training and building 

training facilities as part of 

the vision we have towards 

arriving at where we want 

to be in the next five to 10 

years time. 

“We are putting up more 

finance to develop the terminal 

in five years time. 

Though, there are hiccups 

on the way but we are going 

to get there. Our vision 

is to make JPS the best bulk 

terminal in Nigeria. We have 

started but we need to put 

more standards, go green 

and be more productive 

and effective. This is why 

we have managed to get this 

award.” 

The JPS boss however 

disclosed that the company’s 

next stage is to invest 

in increasing the productivity 

of vessels calling the 

terminal by improving their 

turnaround time from three 

to five days on berth to one 

or two days on berth. “We 

are restricted by the number 

of berths that we have but 

we can say that we are the 

busiest terminal in Lagos. 

He also said that JPS has 

and will continue to invest 

in training of its staff to enhance 

the ability of staff to 

deliver on their responsibilities. 

In terms of staff welfare, 

we have built new training 

facility of international standard 

on our facility and new 

staff canteen.” 

He further disclosed that 

the terminal is going into 

e-banking to reduce the 

volume of human traffic in 

the terminal and make for 

ease of payment for customers. 

“We appreciate our 

staff, contractors, customers 

and all our stakeholders for 

enabling us get to where we 

are today 

Immigration promises to support LADOL’s job creation, local content drive 

The Nigeria Immigration 

Service (NIS) 

has assured the Lagos 

Deep Offshore 

Logistics base (LADOL) of 

an enabling operating environment 

to enhance jobs 

creation and full implementation 

of Local Content Act 

on the facility. 

Modupe Anyalech, 

comptroller of Immigration, 

Lagos Seaport/Marine Command, 

who gave the assurance 

during a working visit 

to LADOL Free Zone (LFZ) 

in Lagos recently, called on 

government agencies such 

as Nigeria Export Processing 

Zones Authority (NEPZA), 

Customs Service, Civil Defense, 

and the Nigerian Navy, 

who operate at the base to 

support LADOL. 

“LADOL is out to create 

jobs and sustain local content 

drive, I think all they 

need from us is encouragement 

and we will do our part 

to encourage them. We look 

forward to when LADOL will 

achieve their desire, which is 

becoming 100 percent local 

base in the next couple of 

years,” she said. 

The LADOL base in Apapa 

pilotage district, Lagos, 

is currently playing host to 

the integration yard for a 

Floating, Production, Storage 

and Offloading (FPSO) 

oil production platform to 

be operated by Total Exploration 

and Production. 

The project valued at over 

$3.8 billion and being undertaken 

by Korea-based 

Samsung Heavy Industries 

(SHI) with LADOL as the 

local content partner, is currently 

providing thousands 

of direct and indirect jobs to 

trained Nigerians in lucrative 

offshore operation. 

The Immigration chief 

also noted that the company 

has successfully created a 

peaceful and conducive environment 

for all agencies to 

work in LADOL’s industrial 

village of international standards. 

“I really want to commend 

NEPZA, they are doing 

well. And I want to appeal to 

other government agencies 

to also remain focused in 

working as a team because 

we cannot do it alone, we 

need each other. If Immigration 

is here and there is no 

customs, the work process 

would not be complete. And 

if there is no Navy, the work 

process is also not complete,” 

she said. 

Amy Jadesimi, managing 

director of LADOL, 

who commended the Immigration 

Service for their 

immense support to the 

company, said that “we look 

forward to many more years 

of working successfully and 

closely with the government 

agencies in LADOL, helping 

us to make Nigeria West 

Africa’s hub for maritime, 

fabrications and oil, gas and 

logistics services.


C002D5556 

BUSINESS DAY 

33 

GARDEN CITY 

BUSINESS DIGEST 

Niger Delta royal fathers ready 

to fight for NDDC as credibility rises 

- Decries N1.7 trillion outstanding, ready to return to court as MD pleads for calm 

IGNATIUS CHUKWU 

Traditional rulers 

and royal fathers in 

the oil region filed 

out last week in Port 

Harcourt pledging 

to rise and fight for the Niger 

Delta Development Commission 

(NDDC) on various fronts 

especially over outstanding 

remittances by the Federal 

government. 

The royal fathers under the 

aegis of Traditional Rulers of Oil 

Mineral Producing Communities 

of Nigeria (TROMPCON) 

told the NDDC boss, Nsima 

Ekere, that they had once gone 

to court for N700Bn outstanding, 

and are prepared to return 

to the law. 

The meeting on July 11, 2017 

took place at the 8th floor of the 

NDDC Tower on Aba Road in 

the Garden City and was described 

as a strategic courtesy 

call. The national chairman of 

TROMPCON, the paramount 

ruler of Mgbirichi in Imo State, 

Akuwueze Ikegwuruka, demanded 

for the three per cent 

annual budget of the NLNG as 

demanded by law to NDDC. 

He went on: “We expect the 

best from your team carefully 

selected by President Muhammadu 

Buhari. So far, the partnership 

between TROMPCON 

and the NDDC has yielded 

much, example is the birth of 

the Partnership for Sustainable 

Development (PSD) forum 

series that is now part of the 

NDDC activities. Please sustain 

the tempo of this partnership.’ 

He went on; “We demand 

the NLNG to comply with Section 

14; sub section 1(b) which 

requires three per cent (3%) 

of the annual budget of every 

oil and gas company in the oil 

region to be sent to the NDDC 

as compulsory contribution for 

the development of the Niger 

Delta. This is a requirement of 

the law. There should be no 

more delay in this.” 

On budgets, he said; “We 

also demand that the National 

Assembly should play vital 

role in helping the NDDC to 

development the Niger Delta 

by at least passing the annual 

budgets of the Commission at 

the right time. So far, it has always 

been subjected to undue 

delays. We urge them to act fast 

henceforth. We also condemn 

interferences in the budget process 

of the Commission. This is 

not healthy.” 

TROMPCON said it wants 

a platform to articulate antibunkering 

activities and other 

vices troubling the oil region. 

L-R: The eze,Akuwueze Ikegwuruka in warm handshake with NDDC boss, Nsima Ekere. 

“We intend to host an international 

conference to campaign 

against kidnapping, pipeline 

vandalism, cultism, invasion of 

herdsmen that makes farming 

difficult, etc. We implore the 

NDDC to be at the vanguard 

of this crusade so we can host 

the conference. We the traditional 

fathers in the region are 

ready to support and assist the 

NDDC.” 

The chairman of the Bayelsa 

State chapter, the king, Frank 

Okurakpo, hit the nail on the 

head thus: “We have made 

informal contacts with your 

administration and you have 

been responsive. NDDC is our 

pride in this region and we are 

ready to download our ideas 

for success. Let Nigerians know 

that traditional rulers are totally 

behind this Commission.” 

Reeling out their war machines 

for the region, the king 

added; “We took the Federal 

Government to court for five 

years for N700Bn case. The FG 

wanted to give us N6Bn but we 

said no. How can we collect 

N6Bn for where N700Bn was 

involved? Now, the matter has 

been thrown out of the court. 

We are striving to go to appeal.” 

The royal fathers don’t seem 

tired of working. He said; “We 

want to lend our technical expertise 

to the NDDC. Most of us 

are seasoned professionals and 

bureaucrats. We desire to give 

you a technical team to work 

with you closely. The pattern 

of developing the Niger Delta is 

unique and therefore requires a 

unique approach. We can come 

in there.’ 

Politics seems not their mettle. 

“We are apolitical but every 

politician is our son or daughter. 

We can support any good 

son to office. NDDC ought to 

support us to support our subjects. 

Most of us worked for the 

NDDC but were not paid. Most 

of us lost our houses through 

bank loans due to unpaid debts. 

Work without payment is very 

dangerous. We see you as a 

very mature manager, please 

use your maturity to intervene.’ 

The NDDC boss however 

created relief when he revealed 

how the President Muhammadu 

Buhari, despite his ailment, 

had instructed the Ministry of 

Finance to resolve the actual 

amount owed by the FG with 

the management of the NDDC. 

He said the action was in progress. 

In another event, the MD 

revealed the actual amount the 

NDDC filed with the FG as N1.7 

trillion outstanding. 

The vote of thanks by 

NDDC’s executive director, 

project, a fellow in engineering, 

Samuel Adjogbe, seemed 

to underline the new determination 

in the Commission on 

how the region should pursue 

development and economic 

boost. “We have to surrender to 

peace. We have shown enough 

anger, now is time for peace. It 

is time to attract investments. 

Building roads alone will not 

bring development, except 

investments.” 

Port Harcourt by Boat 

With 

IGNATIUS CHUKWU 

Electricity theft and debts 

have become an albatross 

especially in the Niger 

Delta where the Port 

Harcourt Electricity Distribution 

Company (PHED) is operating 

with a monthly loss of over N2Bn. 

By end of 2016, the Disco had 

posted a cumulative overhang 

of N98Bn. Now, the company 

seems to tackle customer grievances 

arising from alleged excessive 

billing with carrot. 

In the past few months, customers 

have cried out, saying 

there was a nig jump in what 

N2bn monthly loss: 

PHED heals over-billing anger with prompt mediation 

they were paying and what they 

have been asked to pay. Some 

brandished bills that showed a 

jump from N5,000 few months 

ago to N15,000, others showed 

rise from N7,000 to N19,000, despite 

claims by the PHED officials 

that they had not been permitted 

tariff increase. 

Some groups such as the Elelenwo 

group protested in writing 

through their lawyers while some 

other organised themselves in 

bands to protest at local power 

stations. 

The PHED has been uncharacteristically 

professional in 

these circumstances. They have 

calmed frayed nerves, collected 

the protests and invited the 

groups for immediate dialogue, 

with days. 

The secretary of the group 

from Elelenwo, Elder I. Ogbonna, 

said they were surprised the 

quick attention and response 

they got. All issues were trashed 

and handshakes were seen across 

the table. They commended John 

Onyi, head, public Relations, for 

mature handling, even as they 

looked forward to the implementation 

of all the issues agreed 

on. Some other individuals who 

also returned from dialogue 

with PHED have managed some 

smiles. The underground activities 

of Spark Media (headed by 

Chinedu Amah), the consulting 

firm working with PHED, have 

also added professional touches 

to the way customer grievances 

are being handled, let alone the 

robust approach from Godwin 

Orovworiro (PhD), the author 

who brings his wealth of experience 

and academic prowess to 

bear in handling the intractable 

customer issues over bills. 

PHED and all Discos have 

much to share with consumers 

but the information gap had destroyed 

goodwill over the years. 

Discos especially PHED have 

inherited attitude liabilities and 

the distrust that ruled and ruined 

the relationship between 

the then government power 

agency (NEPA) and the investors 

(Discos). The case of the Niger 

Delta seems worsened by old order. 

Most communities had free 

power supply or paid peanuts 

from IOCs. Now, the favour has 

dried up and anger has risen up. 

Energy theft and bills failure 

have been on the increase in the 

Port Harcourt district (Rivers, 

Bayelsa, Akwa Ibom and Cross 

River). Company sources said 

by end of 2016, Port Harcourt 

Electricity Distribution (PHED) 

had lost N98Bn. This is part of 

the over national debt of over 

N900Bn owed the 11 Discos in 

Nigeria, a phenomenon that 

is said to hamper investments, 

sustainability, and growth of the 

energy sector as funds are starved 

of gas suppliers, power generators 

(Gencos), the transmission 

segment, and the Discos. 

Apparently worried by the 

enormity of the debt crisis at 

national scale, the Nigerian Electricity 

Regulation Commission 

(NERC) ordered the Discos to 

start public forums to educate 

Nigerians, professional bodies 

and unions on the need to respect 

the electricity chain by paying 

bills, shunning theft and reporting 

corrupt Disco officials. 

This was where Orovwiroro 

said PHED loses 62 per cent 

of revenue every day and only 

recovers a mere 47 per cent of 

energy supplied by the Genco 

and imbedded sources. He said 

vandalism, theft and corruption 

add up to rob the company of 

the needed revenue. He said 

PHED needs 784 mw of power 

to distribute to the four states but 

that it gets a mere 250mw, but that 

Port Harcourt as a city consumes 

86 per cent of the power given to 

PHED. 

Orovwiroro said many efforts 

have so far been made to improve 

services and win the confidence 

of customers including establish- 

ing 24/7 call centre, dedicated 

line for reporting corruption, establishing 

a website (www.phed. 

ng.com) for easy transactions, 

setting up of seven power lines 

to deliver uninterrupted power 

supply to dedicated consumers, 

and the recent website called 

S4-Report to report all odd thing 

especially power outage to help 

consumers get instant response 

so as to pay bills without bitterness. 

The manager said efforts have 

been made to resolve contested 

bills to create rapport with consumers 

and boost revenue. 

These efforts must have led to 

the new attitude and policy which 

the customers have hailed. The 

bottom line however would be 

creating justice in billing system 

just like in the telecomm industry 

where one gets what he pays for. 

Power is actually more difficult 

to distribute but Nigerians would 

only believe the Discos when they 

believe what the bills say.



C002D5556 

Read Ambitiously 

Smartphone makers 

join Apple’s battle 

against Qualcomm 

TRIPP MICKLE 

A 

group of leading smartphone 

manufacturers are 

joining Apple Inc. AAPL 

0.35% in a legal battle against 

Qualcomm Inc., QCOM -0.30% 

claiming that the chip maker 

charges excessive patent licenses 

and violates antitrust laws. 

Taiwan-based contract manufacturers 

Compal Electronics Inc., 

2324 -0.48% Foxconn Technology 

Group, Pegatron Corp. 4938 

-0.51% , and Wistron Corp. 3231 

-0.33% planned to file a lawsuit 

against Qualcomm late Tuesday 

night in federal district court in 

San Diego, according to Theodore 

J. Boutrous, an attorney at Gibson, 

Dunn & Crutcher LLP who is representing 

the four. 

The companies, which assemble 

iPhones and iPads for 

Apple and other gadgets for other 

brands, are broadly challenging 

Qualcomm’s licensing practices 

with them as illegal, according to 

a draft copy of their complaint. 

Apple, which is covering legal 

fees associated with the manufacturers’ 

defense, said it would 

file a separate motion Tuesday 

to consolidate the manufacturer’s 

countersuit and its own suit 

against Qualcomm. 

The planned moves come after 

a series of escalating legal blows 

between Apple and Qualcomm, 

which sells chips used in many 

smartphones and licenses technology 

used in nearly all of them. 

Apple sued Qualcomm in January 

in the U.S. claiming unfair 

business practices, and the four 

contract manufacturers—which 

have the direct licensing agreements 

with Qualcomm that cover 

iPhones and iPads—later stopped 

paying royalties on Apple’s behalf. 

Qualcomm sued the four in May 

over the nonpayment, setting up 

their planned countersuit Tuesday. 

Qualcomm has said that its licensing 

agreements with the contract 

manufacturers are independent of 

Apple. Qualcomm also has asked 

federal trade authorities to block 

imports of some iPhones and iPads 

as part of the broader dispute. 

Qualcomm says its licensing 

practices are fair, and that Apple 

is merely trying to reduce its costs 

at a time of slowing iPhone shipments. 

At a conference in Aspen 

Monday, Qualcomm Chief Executive 

Steve Mollenkopf said he expects 

the dispute to be settled out 

of court, just as Qualcomm settled 

a similar patent dispute in 2008 

with cellphone maker Nokia Corp. 

ECB Chief Mario Draghi expected 

to reinforce tightening signals 

TOM FAIRLESS 

When European 

Central Bank 

chief Mario 

Draghi faces the 

media on Thursday 

after the bank’s latest policy 

meeting, he is expected to let 

stand his hint three weeks ago on 

a possible reduction of the ECB’s 

giant bond-buying program. 

Mr. Draghi had rocked financial 

markets into buying euros 

and selling euro bonds by indicating 

in a June 27 speech in Sintra, 

Portugal, that the bank would 

start slowly winding down the 

program, known as quantitative 

easing, which has underpinned 

eurozone financial markets since 

its launch in early 2015. 

Few investors think he will 

signal a change in that course on 

Thursday. Most argue that the 

ECB needs to adjust its policy 

mix soon anyway, in response to 

an accelerating eurozone economy. 

Mr. Draghi’s speech late last 

month did part of the work in 

preparing financial markets for 

an imminent policy shift, they say. 

Any backtracking now “would 

only cause confusion and unwelcome 

volatility given that financial 

markets have already positioned 

themselves” for a policy change, 

said Marco Valli, an economist 

with UniCredit in Milan. 

Growth in the 19-nation bloc is 

expected to reach 3% in the second 

quarter on an annualized basis, the 

Where are the dips? The weird, 

unsettling rise of global stocks this year 

STEVEN RUSSOLILLO 

Stock markets go up and 

down: It is a fact of life. Except 

in 2017. 

Three major stock-market 

benchmarks in the U.S., Europe 

and Asia have avoided pullbacks 

this year, commonly defined as 5% 

declines from recent highs. Never 

in at least the past 30 years have all 

three indexes—the S&P 500, MSCI 

Europe and MSCI Asia-Pacific 

ex-Japan—gone a calendar year 

without falling at some point by 

at least 5%. 

In good years and bad, markets 

tend to fluctuate wildly, with stock 

indexes often falling by doubledigit 

percentages before bouncing 

back. That hasn’t been the case 

this year, another reflection of the 

historically low volatility that has 

gripped the world. The CBOE Volatility 

Index, or VIX, finished Friday 

at its lowest since 1993. 

Of course, 2017 is only a little 

more than half over, and plenty can 

change in the back half of the year. 

But the last time equity markets 

went this deep into a year without 

all three of those benchmark indexes 

suffering at least 5% pullbacks was 

nearly a quarter-century ago, in 1993, 

according to The Wall Street Journal’s 

Market Data Group. All three 

finished that year with sharp gains. 

Many investors say they are 

optimistic that the steady grind 

higher will continue and defy 

historical odds that suggest the 

markets should eventually falter. 

That is because earnings growth 

appears to be accelerating globally, 

economic growth is improving and 

central banks largely remain accommodative, 

even amid recent 

moves to tighten policy. 

The rise of quantitative trading 

and the flood of money into passive 

strategies such as exchange-traded 

funds have also dampened volatility, 

investors and strategists say. 

ETFs owned nearly 6% of the U.S. 

stock market in the first quarter, the 

highest share on record, according 

to an analysis of Federal Reserve 

data by Goldman Sachs . 

fastest pace in around a decade. 

Economic sentiment is close to a 

10-year high, unemployment is 

falling rapidly, and bank lending 

is picking up strongly, according 

to ECB data published on Tuesday. 

All that suggests the ECB can 

afford to take its foot off the gas. 

Its bond-buying program is currently 

due to run at €60 billion ($69 

billion) a month at least through 

December. 

“With the eurozone cyclical 

recovery going strong and the 

bank lending channel mostly 

unclogged, the floor is clear for 

Draghi to tiptoe slowly in the 

general direction of the exit on 

Thursday,” said Teunis Brosens, 

an economist with ING Bank in 

Amsterdam. 

Despite its initial reservations 

about QE, the ECB has proceeded 

aggressively, boosting its balance 

sheet to around $4.9 trillion—larger 

than the U.S. Federal Reserve’s. 

ECB officials have stressed that 

they will move very cautiously in 

winding down the program, wary 

of triggering an adverse market 

reaction that could upset the 

recovery. They have in mind the 

Federal Reserve’s policy error four 

years ago, when a hint that its own 

QE program would end triggered 

market turmoil around the world 

and a surge of more than 100 basis 

points in U.S. Treasury yields. 

Recent market movements 

in Europe, though, are probably 

acceptable to the world’s second-most 

powerful central bank, 

analysts say. German 10-year government 

bond yields have risen 

by about 30 basis points since 

Mr. Draghi’s speech last month, 

to around 0.6%. The euro is up 

around 4 cents against the dollar, 

hitting $1.1583 on Tuesday, its 

highest level in more than a year. 

Robots are replacing workers where you shop 

SARAH NASSAUER 

Last August, a 55-year-old 

Wal-Mart WMT -0.22% 

employee found out her 

job would now be done 

by a robot. Her task was to count 

cash and track the accuracy of 

the store’s books from a desk in 

a windowless back room. She 

earned $13 an hour. 

Instead, Wal-Mart Stores Inc. 

started using a hulking gray machine 

that counts eight bills per 

second and 3,000 coins a minute. 

The Cash360 machine digitally 

deposits money at the bank, 

earning interest for Wal-Mart 

faster than sending an armored 

car. And it uses software to predict 

how much cash is needed 

on a given day to reduce excess. 

“They think it will be a more 

efficient way to process the 

money,” said the employee, who 

has worked with Wal-Mart for a 

decade. 

Now almost all of Wal-Mart’s 

4,700 U.S. stores have a Cash360 

machine, turning thousands of 

positions obsolete. Most of the 

employees in those positions 

moved into store jobs to improve 

service, said a Wal-Mart spokesman. 

More than 500 have left the 

company. The store accountant 

is now a greeter at the front door, 

where she still earns $13 an hour. 

“The role of service and customer-facing 

associates will 

always be there,” said Judith 

McKenna, Wal-Mart’s U.S. chief 

operating officer, in an interview. 

But “there are interesting 

developments in technology 

that mean those roles shift and 

change over time.” 

Shopping is moving online, 

hourly wages are rising and retail 

profits are shrinking—a formula 

that pressures retailers from 

Wal-Mart to Tiffany & Co. to find 

technology that can do the rote 

labor of retail workers or replace 

them altogether. 

As Amazon.com Inc. makes 

direct inroads into traditional 

retail with its plans to buy grocer 

Whole Foods Market Inc., Wal- 

Mart and other large retailers 

are under renewed pressure to 

invest heavily to keep up. 

Economists say many retail 

jobs are ripe for automation. A 

2015 report by Citi Research, coauthored 

with researchers from 

the Oxford Martin School, found 

that two-thirds of U.S. retail jobs 

are at “high risk” of disappearing 

by 2030. 

Self-checkout lanes can replace 

cashiers. Autonomous 

vehicles could handle package 

delivery or warehouse inventory. 

Even more complex tasks 

like suggesting what toy or shirt 

a shopper might want could be 

handled by a computer with 

access to a shopper’s buying 

history, similar to what already 

happens online today.


C002D5556 

BUSINESS DAY 

35 

Live @ the Stock exchange 

GAINERS 

Top Gainers/Losers as at Wednesday 19 July 2017 

Company Opening Closing Change 

SEPLAT 475.02 485 9.98 

GUINNESS 63 66.1 3.1 

OKOMUOIL 63 64.5 1.5 

PZ 21 22.05 1.05 

STANBIC 31.5 32.49 0.99 

LOSERS 

Company Opening Closing Change 

NESTLE 920 903.5 -16.5 

PRESCO 64.54 61.32 -3.22 

DANGCEM 210 208 -2 

MRS 37.3 35.44 -1.86 

FLOURMILL 26.25 25.15 -1.1 

Stock market trends further north 

...as Seplat leads 24 gainers againts 22 losers 

Iheanyi Nwachukwu 

& Hezron Atunde 

Nigerian equities 

market further 

extended gains 

on Wednesday 

as stocks of Seplat 

Petroleum Development 

Company Plc, Guinness Nigeria 

Plc and twenty-two (22) 

others were on demand at 

the Nigerian bourse. 

At the close of trading 

Wednesday, 24 stocks advanced 

against 22 losers 

which led to 0.23 percent 

growth in the market All 

Share Index (ASI). 

At the close of trading on 

the Nigerian Stock Exchange 

(NSE) the value of listed 

stocks rose by N27.022 billion 

while the Year-to-Date (YtD) 

return stood at 24.71 percent. 

The NSE All Share Index 

closed at 33,514,93 points 

against the preceding close 

of 33,436.61 points, while 

the equities market capitalisation 

closed at N11.550 

trillion as against preceding 

day close of N11.523 trillion. 

The volume of stocks traded 

increased stood at 331.430 

million while the total value 

of stocks traded in 4,055 

deals was N33.244 billion. 

Seplat Petroleum Development 

Plc led the list of 

gainers after its share price 

rose by N9.98, from N475.02 

to N485, while Guinness Nigeria 

Plc followed with N3.1 

gain, from N63 to N66.1. 

The share price of the 

Unilever Nigeria gets regulatory 

approval for N58.9bn Rights Issue 

Unilever Nigeria Plc 

has now received 

the approval of the 

Securities and Exchange 

Commission (SEC) 

and the Nigerian Stock Exchange 

(NSE) in respect of its 

Rights Issue. 

Following shareholder 

approval received in May, 

the company plans to raise 

N58.85billion by way of rights 

to existing shareholders. 

This is on the basis of 14 

new shares for every 27 shares 

held by shareholders, whose 

names appeared in the register 

of members of the Company 

as at June 28, 2017 at an issue 

price of N30 per share. 

The transaction is part of 

the Company’s strategy to 

drive sustained and steady 

growth despite economic 

headwinds. 

At the signing ceremony 

which held at Unilever Nigeria’s 

head office in Lagos, on 

July 13, 2017, Yaw Nsarkoh, the 

Managing Director of Unilever 

Nigeria, commented “Through 

this Rights Issue, we will be 

able to reinforce our financial 

flexibility to support our 

growth initiative and also give 

shareholders an opportunity 

to consolidate their shareholding 

position. The proceeds of 

the Rights Issue will be used 

to repay our outstanding foreign 

currency denominated 

liabilities, purchase additional 

raw materials required for our 

products and to meet other 

working capital requirements 

in other to build long term 

value for all stakeholders.” 

Nnaemeka A. Achebe, 

chairman, Unilever Nigeria 

Plc also commented saying 

“The Rights Issue reiterates 

our confidence in Unilever 

Nigeria’s robust future and 

commitment to building a 

more enduring business in 

the Nigerian market. We acknowledge 

with deep appreciation 

the unwavering 

support we have received 

from our stakeholders and 

shareholders even in trying 

times which has enabled 

Okomu Oil Plam Plc gained 

N1.5, from N63 to N64.5. PZ 

Cussons Nigeria Plc rallied 

from N21 to N22.05, adding 

N1.05; while Stanbic IBTC 

Holdings Plc gained N0.99, 

from N31.5 to N32.49. 

More second quarter (Q2) 

earnings scorecards like that 

of Africa Prudential Plc, Secure 

Electronics, and Guinea 

us deliver positive result. We 

implore you to participate in 

the Rights Issues as you will be 

re-confirming your support for 

the Company”. 

Unilever Nigeria remains 

committed to purpose driven 

growth underpinned by the 

“Unilever Sustainable Living 

Plan” which is the blueprint 

for achieving our vision to 

make sustainable living commonplace 

and grow its business, 

whilst decoupling our 

environmental footprint from 

our growth and increasing our 

positive social impact. 

Speaking at the end of the 

ceremony, Funso Akere, the 

Chief Executive of Stanbic IBTC 

Capital Limited, commended 

the management of Unilever 

Nigeria for the commitment 

they have shown towards executing 

the Rights Issue and for 

giving Stanbic IBTC Capital a 

free hand to guide the process. 

Stanbic IBTC Capital Limited 

is acting for Unilever Nigeria 

Plc as Issuing House for the 

Rights Issue. 

Market Statistics as at Wednesday 19 July 2017 

ASI (Points) 33,514.93 

DEALS (Numbers) 4,055.00 

VOLUME (Numbers) 331,430,651.00 

VALUE (N billion) 3.244 

MARKET CAP (N Trn 11.550 

Insurance Plc were released 

for investors at the NSE. 

Nestle Nigeria Plc led 

the basket of decliners as 

its share price dipped from 

N920 to N903.5, down by 

N16.5; Presco Plc followed 

from N64.54 to N61.32, 

down by N3.22; Dangote 

Cement Plc lost N2, from 

N210 to N208; MRS Oil 

Nigeria Plc also lost 1.86 

from N37.3 to N35.44; while 

Flour Mills Nigeria Plc lost 

N1.1 from N26.25 to close 

at N25.15. The financial services 

sector led Wednesday 

activities chart as investors 

exchanged Zenith Bank 

Plc 33.133 million shares 

valued at N727.818 million; 

followed by United 

Bank for Africa Plc’s 28.249 

million shares exchanged 

for N251.712 million; and 

FBN Holdings Plc’s 26.559 

million shares traded for 

N160.748 million. 

Stock traders exchanged 

Custodian and Allied Plc’s 

25.246 million shares worth 

N85.856 million; while they 

exchanged NEM Insurance 

Nigeria Plc’s 24.563 million 

shares valued at N29.805 

million 

PEARL Awards to hold in November 

… awards in three broad categories 

The PEARL Awards 

Nigeria is set to 

hold the 2017 

Awards Nite, which 

comes up on Sunday November 

26, 2017 at the prestigious 

Eko Hotel & Suites 

Lagos, with the theme 

“Winning with Tenacity”. 

The Annual PEARL Awards 

nite has been a platform 

where quoted companies 

and key stakeholders in 

the capital market are rewarded 

for their contributions 

to the growth of the 

market and the economy 

in general. 

This year’s event, expected 

to host the ‘who 

is who’ in the corporate 

Nigeria, will feature Awards 

in three broad categories, 

namely, Main Competitive 

Category; Special Recognition 

Awards Category 

and Honorary Awards 

Category. The Main Competitive 

Awards would be 

determined using globally 

acceptable parameters that 

UBA crosses 2.08bn units of its 

shares from SSIT at N9.47 per share 

United Bank for 

Africa Plc had 

announced 

the crossing of 

2,080,104,955 units of its 

ordinary shares from the 

Staff Share Investment 

Trust Scheme (SSIT) to 

the Group, at a price of 

N9.47 per share. 

This transaction implements 

the Special Resolution 

of UBA’s shareholders, 

passed at the Annual 

General Meeting held on 

Friday, April 08, 2016, to 

cancel shares held under 

the SSIT. 

Upon cancellation of 

the 2,080,104,955 units of 

ordinary shares, the outstanding 

shares of UBA 

will be reduced from 

36,279,526,321 units to 

34,199,421,366 units. 

Implementation will 

increase the annualised 

2017 First Quarter Earnings 

Per Share (EPS) of 

the Group by 6.1%, from 

N2.46 to N2.61, translating 

to a Price to Earnings Ratio 

of 3.4x. 

This process is value 

accretive to shareholders, 

as the enterprise value of 

include Turnover Growth; 

Return on Equity; Profit Margin 

Ratio and Share Price 

Appreciation among others. 

According to a release 

signed by Olalekan Adekoya, 

Secretary, Board of 

Governors, this year’s edition 

promises to be an outstanding 

nite of glamour, 

funfair and celebration of 

excellence. Additionally, 

there would be other side 

attractions that will include 

exclusive red carpet reception, 

cocktails and high class 

executive networking opportunities 

, among others 

the Group remains unchanged. 

The unit holding 

of all shareholders 

remains the same, whilst 

their respective percentage 

holding in UBA Plc 

will increase. 

For example, a shareholder 

who owns 362.8 

million units, which 

translates to 1% of the 

bank’s equity before the 

cancellation of SSIT, will 

still own same number 

of units after the cancellation 

of SSIT, but 

the implied percentage 

holding will increase to 

1.06% of the Bank’s equity, 

as the cancellation of 

SSIT shares reduces the 

outstanding shares and 

increases the percentage 

holding of all other 

shareholders on a pro 

rata basis. 

The cancellation of 

SSIT shares has no impact 

on the liquidity and capital 

adequacy ratio of the 

Bank. UBA Plc continues 

to maintain strong liquidity 

and capital adequacy 

ratios, which stood at 41% 

and 19.4% respectively, as 

at March 31, 2017. 

The PEARL Awards Nigeria 

instituted in 1995 is a 

private sector, not-for-profit, 

non-partisan and Non-Governmental 

Organization initiative 

to reward companies 

quoted on the Nigerian Stock 

Exchange for Operational 

and Stock Performance 

based on objective and globally 

accepted parameters, 

thereby enhancing vibrancy, 

growth and development of 

the market. 

Similarly, the PEARL 

Awards Nigeria after 2 decades 

(1995-2016) of publishing 

the Nigerian Stock 

Market Annual (NSMA) has 

decided to rest the publication 

and replace it with a 

stronger and richer online 

publication. Thus, effective 

from this year, PEARL 

Investors’ Review would 

be published online on a 

quarterly basis while the 

bumper edition would be 

published in hard copy and 

presented publicly at the annual 

Awards Nite.

36 



Nigeria’s suspension from EGMONT Group will hurt... 


ecutive for Nigeria’s expulsion 

from the global body, for failing 

to take action to make the Nigeria 

Financial Intelligence Unit (NFIU) 

autonomous. 

Specifically, the legislative body 

expressed concern that if Nigeria’s 

expulsion from the global financial 

intelligence group comes into effect 

in January 2018, this will send 

a signal to the international community 

that the country is not safe 

for investment, as it has failed to 

comply with international convention 

and rules, regarding the fight 

against corruption. 

Accordingly, the Senate resolved 

to pass a legislation making 

the Nigeria Financial Intelligence 

Unit (NFIU), currently domiciled 

with the Economic and Financial 

Crimes Commission (EFCC), autonomous 

and independent. 

It mandated its Committee on 

Anti-Corruption and Financial 

Crimes to within four weeks, submit 

a draft bill establishing NFIU as an independent 

and autonomous body. 

This followed a motion by 

Chukwuka Utazi, Chairman Senate 

Committee on Anti-Corruption 

and Financial Crimes, at plenary 

on Wednesday. 

Consequently, the development 

will hamper the country’s ability to 

recover stolen funds abroad, as well 

as affect the international rating of 

Nigerian financial institutions by 

restricting their access to international 

transactions. 

“Informed that if expelled, 

the United Nations Convention 

Against Corruption (UNCAC) 

Implementation Reviewing Group 

will be served a notice against 

Nigeria, and most countries, including 

the United States, the UK, 

Germany, Switzerland, among 

others, would alert their financial 

institutions and services, through 

the issuance of advisories, such as 

the Financial Criminal Enforcement 

Network Advisory and Foreign 

Assets and Cash Directive, 

to warn them to apply extra care 

and diligence in transacting with 

Nigeria and Nigerians. 

Paylater,Remita, Firstbank, Rack Centre, ALAT &... 


when financial technology (Fin- 

Tech) is increasingly dominating 

the financial space and attracting 

more funds than e-commerce, 

which used to be the glamour 

sector for tech investors. 

Data from YS Research shows 

that investments in Fintech hit 

US$1.8 billion in the first six 

months of 2017 led by by Paytm’s 

$1.4 billion in funding from Soft- 

Bank in May. This is compared 

to US$1.5 billion raised by e- 

commerce in the same period. 

FinTech is seen as disrupting traditional 

banking practices, as more 

wealth is transferred from the older 

generation used to traditional banking 

into the hands of the younger 

generations or millennials, who are 

used to doing their banking on and 

through digital channels. 

A research in the US shows 

that 64 percent of high net worth 

individuals under the age of 40 

expect to access their accounts 

via a website and 54 percent expect 

to use digital channels such 

as mobile applications, social 

media, or video. 

The BusinessDay Fintech 

Summit 2017 themed ‘Harnessing 

the Power of Disruptive Innovation 

in Fintech,’ will hold 

on Friday, 21 July, 2017 at the 

Landmark Event Centre. 

Nigeria has not been immune 

from the changes in the financial 

services industry globally, as FinTech 

firms are redrawing the competitive 

landscape and blurring the lines that 

define players in the sector. 

The financial services industry 

in Nigeria is undergoing a transformation, 

driven by trends in 

consumer behaviour and changes 

in the financial landscape. 

Subsequently, innovation and 

technology have brought about 

a radical change in traditional 

financial services. 

According to Frank Aigbogun, 

chief executive officer of BusinessDay 

Media, “The Business- 

Day Fintech Summit is an opportunity 

for players in the financial 

The huge political and economic 

implications of such actions 

are better imagined. An expulsion 

might also, under certain conditions, 

attract the imposition of financial 

transaction limit, including 

the withdrawal, by certain countries, 

of scholarships to students of 

Nigerian origin. 

“Concerned that the valiant 

efforts of the Senate Committee 

on Anti-Corruption and Financial 

Crimes, to avoid this suspension, 

including leading the Nigeria Delegation 

to many meetings of the 

Financial Action Task Force (FATF) 

to impress upon them Nigeria’s 

readiness and willingness to be accorded 

full membership, were not 

complemented by the Executive 

branch, especially the recognised 

three line Ministries of Justice, 

Finance and the Interior, and repeated 

pleas and correspondences 

for action to avert this suspension 

went unheeded,” Utazi noted. 

The Senate therefore urged the 

three line Ministries of Justice, Finance 

and Interior to do all within 

their powers to ensure that Nigeria’s 

suspension is immediately 

reversed and ensure that all conditions 

specified by the EGMONT 

Group are met, to re-admit and 

improve Nigeria’s standing within 

the Group. 

It called on the Executive to include 

in any supplementary budget 

estimate that may be presented 

to the National Assembly before 

the end of the year, a separate budget 

for the NFIU, in view of the need 

to lift the suspension of the country 

as soon as possible. 

In his remarks, Senate President 

Bukola Saraki, who presided over 

plenary, expressed concern that 

the suspension is a set back in 

the present administration’s fight 

against corruption. 

He called for swift response to 

ensure that the country’s suspension 

from the EGMONT Group 

is lifted. 

He said: “One of the things that 

we need to do, is to ensure that we 

pass this bill as soon as possible, 

to give independence to NFIU 

and any of the other activities 

that must have led to this must 

be stopped. And the Committee 

on Anti-Corruption should carry 

out their oversight to ensure that 

the sooner we get the suspension 

lifted, the better for our image and 

the fight against corruption”. 

C002D5556 

BUSINESS DAY 

37 

NEWS 

New oil policy targets long term sales of petroleum... 


we have been doing,” Emmanuel 

Ibe Kachikwu, Nigeria’s minister of 

State for Petroleum Resources told 

journalists at the post FEC briefing. 

Nigeria, Africa’s top oil producer, 

struggling to exit its worst 

ever economic recession in 25 

years, depends mostly on revenue 

from its oil resources to drive the 

economy, even as it recently commenced 

moves to generate more 

income through non oil sources 

like tax. 

FEC’s approval of the policy 

comes a month after a National 

Gas Policy was approved by Council, 

to drive changes in policy that 

will make gas a hub of the nation’s 

economy. The last review of the 

oil policy was done 10 years ago, 

amidst dynamic changes in the 

sector. 

The gas policy document built 

on the policy goals of the Federal 

Government for the gas sector, 

as presented in the 7 Big Wins 

initiative(www.7Bigwins.com) 

developed by the Ministry of Petroleum 

Resources and the National 

Economic Recovery & Growth Plan 

(ERGP 2017-2020). 

The policy targets the exit of 

Philip Shaibu, 

deputy governor, 

Edo State (r), 

handing over the 

signed MoU between 

Edo State 

Government 

and the Catholic 

Relief Services 

(CRS) to Godwin 

Obaseki, governor, 

Edo State. 

services and financial technology 

sector, to meet and address the 

issues that have arisen as result of 

the unprecedented growth being 

witnessed in FinTech. 

“Fintech represents an opportunity 

for big and small businesses 

in Nigeria. Many researchers 

have also shown how harnessing 

the growth in the industry will improve 

the country’s GDP, hence 

the BusinessDay FinTech summit 

is an opportunity for all players 

to size up the opportunities in 

the sector, as well as learn how to 

navigate the risks and challenges. 

To achieve the set objectives 

of the Summit, the discussions 

will focus on key areas such as 

current and future trends in the 

sector, such as next generation 

payments, people-to-people 

lending, blockchain technology, 

security and biometrics, bank-inbox, 

and robo-advisory. 

There will also be discussions 

on new and existing regulations 

to keep up with the rapidly evolving 

FinTech landscape, as well as 

the overall development of the 

regulatory environment to support 

FinTech in Nigeria. 

Panelists will also review the 

FinTech entrepreneurial landscape 

in Nigeria, as well as exploring 

tenable business models 

to sustain existing start-ups, as 

well as foster and attract new Fin- 

Techs into the growing industry. 

There will also be opportunity 

to address facilitating and improving 

the FinTech ecosystem in 

Nigeria, through meaningful collaboration 

and engagement with 

financial institutions, universities, 

research institutions, technology 

experts and government 

institutions, to facilitate growth 

and innovation in the sector. 

A comparative analysis of Nigeria 

in relation to the growth drivers 

and benchmarks set by key global 

ecosystems, as well as how to tackle 

cyber security threats in Nigeria 

and exploring counter measures 

to attain a cyber ecosystem will 

be undertaken by notable experts. 

Sponsors of the BusinessDay 

Fintech Summit include Paylater, 

First Bank Limited, Remita, 

Wema ALAT, Rack Centre, Banwo 

& Ighodalo, MainOne and Paga. 

importation of fuel in 2019 and also 

captures “the cash calls changed 

we have done which enables the 

sector to fund itself through incremental 

volumes, it captures the 

reorganisation in the NNPC for 

efficiency and enables accountability. 

It captured the issues in the 

Niger Delta and what we needed 

to do as a government, to focus 

on stability and consistency in the 

sector,” Kachikwu told newsmen. 

Apart from the fact of fluidity in 

pricing and uncertainty in terms 

of the price regime in crude, the 

oil policy will push “for a refining 

processing environment to move 

away from exporting as it were, to 

refining petroleum products. That’s 

one change you will see. Those are 

the fundamentals, it’s a document 

that if well executed, will fundamentally 

take the change process 

that we began in 2015 to its logical 

conclusion, hopefully in the next 

couple of years”. 

Meanwhile, the minister also 

said the government is targeting 

crude production of 2.5million 

to 3million barrels per day, in the 

next two years, if the Organisation 

of Petroleum Exporting Countries 

(OPEC) environment rules permit. 

According to Kachikwu “We 

targeting to recover our full barrels. 

We are working hard at it. Over a 

longer time and provided OPEC 

environment permits, I think I see 

a potential to be between 2.5m and 

3m barrels a day, if the OPEC rules 

allow me to do that. But again, we 

are all looking at market flows this 

year and the whole of the pricing 

challenges that go with how much 

we pump into this market”. 

Already, a steering and technical 

committee has been put in 

place, headed by chief operating 

officer in the NNPC and are currently 

meeting with individuals 

who are willing to put money into 

the refineries. 

The minister said already over 

30 people have indicated interest 

in the financing of the refineries. 

“I need to state this clearly, this 

is not a sale, this is not a concession, 

this is a financing scheme. 

“They are going to go through 

the usual due process mechanism 

to see who qualifies for that 

financing. What we have resolved 

however, which we have at least 

a landing, is that each of the refineries 

would be repaired by the 

individual company that built the 

refinery. 

“Who does the work is different 

from who does finance the work 

to be done. We are still dialoguing 

who is going to get the financing 

opportunity but who is going to 

get the contracting opportunity to 

do the work is already decided,” he 

explained. 

He said the government is not 

putting any money into the scheme 

as it will be a sector-led effort, 

and they will recover their money 

through incremental volumes 

that will arise from the production 

increase, arising from the repairs. 

Council also approved a National 

Social Protection Policy, 

which seeks to provide social justice, 

equity and inclusive growth, 

using a transformative mechanism 

for mitigating poverty and 

unemployment in Nigeria. Government’s 

N500billion Social Investment 

Programme was drawn 

from this policy, Minister of State 

for Budget and National Planning, 

Zainab Ahmed told newsmen at 

the briefing.

38 BUSINESS DAY C002D5556 Thursday 20 July 2017 

NEWS 

Dana congratulates winners of BusinessDay’s State Competitiveness, Good Governance Award 2017 

IFEOMA OKEKE 

Dana Airline, one of 

the few operating 

domestic airlines in 

Nigeria, supported 

BusinessDay in its competitive 

and good governance 

award of 2017. 

This is part of the ways 

the airline shows commitment 

in fulfilling its values 

to consistently promote and 

celebrate excellence, hard 

work and worthy courses that 

can change the country for a 

better. 

This is as Jacky Hathiramani, 

the CEO of Dana Air, 

congratulated the winners of 

BusinessDay’s States Competitiveness 

and Good Gov- 

Investor window records 

$48.73m turnover 

HOPE MOSES-ASHIKE 

The foreign exchange market 

on Wednesday recorded a 

daily turnover of $48.73 million 

at the investors and exporters 

window, showing a decrease of 

24.73 percent from $64.74 million 

recorded on Monday. 

At the same window, the 

nation’s currency depreciated 

by N4.03k to close at N367.60k 

on Wednesday from N363.57k 

quoted the previous day, data 

from the FMDQ revealed. 

The local currency on 

Wednesday traded at between 

N365 and N366 per dollar, the 

same level since over two weeks 

at the black market. 

The Central Bank official 

naira exchange rate at the interbank 

spot market, which jumped 

to N315 per dollar on Tuesday 

dropped to N305.35k on Wednesday. 

This represents a loss of 

N9.65k or 3.06 percent against 

the US dollar. 

At the Nigerian Foreign Exchange 

Fixing (NiFEX), naira was 

quoted at rate of N325.00k per 

dollar. Analysts said on Tuesday 

night that the official rates jumping 

to N315, if sustained show 

tactical depreciation of naira by 

the CBN. 

Ayodeji Ebo, managing director, 

Afrinvest Securities limited, 

said if this development will be 

sustained, it would show greater 

confidence in the market as 

foreign investors are waiting for 

the convergence of the exchange 

rates at the NiFEX and investors 

and exporters window. 

“With the CBN official rate at 

N315, NiFEX will also be forced 

to depreciate. As it progresses, we 

will see how rates will converge at 

NiFEX with less intervention from 

the CBN”, Ebo told BusinessDay 

by phone. 

The nation’s currency on 

Tuesday weakened across foreign 

exchange market segment. At the 

investors and exporters window, 

naira fell by N1.36k against the 

US dollar closing at N363.57k 

compared to N362.21k traded the 

previous day. 

The local currency also weakened 

by about N1.00k to close 

at the rate of N367 per dollar on 

Tuesday as against N366 per dollar 

traded the previous day at the black 

market. The CBN on Monday enhanced 

liquidity in the inter-bank 

foreign exchange market to the 

tune of $195 million supply. 

Figures released by the Bank 

show that it offered the total sum 

of $100million to the wholesale 

segment, while the Small and 

Medium Enterprises (SMEs) 

segment received the sum of $50 

million. 

ernance Award held recently 

in Abuja. 

Hathiramani, while 

speaking with newsmen 

at the award ceremony in 

Abuja, said, “We are proud 

to have supported this award 

which is designed to inspire 

competition amongst state 

governments. We believe 

that this award will encourage 

our governors to continue 

to deliver on their electoral 

promises to our people 

and bring about not just good 

governance but dividends of 

democracy.’’ 

Speaking further, the 

Dana boss also congratulated 

the Imo State Governor 

Rochas Okorocha for bagging 

the award for Educational 

Development in Imo State 

and all the nominees, saying 

their nominations, irrespective 

of who got the awards, 

was an indication that they 

were all making efforts to 

better the lots of their people. 

“All the governors nominated 

tonight are winners. Irrespective 

of who got awards, 

for them to have been nominated 

shows that they are 

all making effort to impact 

the lives of their people and 

followers. I particularly want 

to also congratulate the governor 

of Imo State, Rochas 

Okorocha for jointly winning 

the award for Educational Development 

with the Governor 

of Sokoto. 

“You would recall that 

the Imo state Government 

entered into a partnership 

with us recently to boost 

tourism drive, create jobs and 

increase commercial activities 

and one of the objectives 

of this award is to encourage 

our governors to seek ways to 

improve internally generated 

revenue and make judicious 

use of scarce resources and I 

commend the efforts of the 

Imo state governor in this 

regard,” he said. 

The award categories include: 

Transparency in Governance, 

Urban and Rural 

Infrastructure Development, 

Education Development, 

Agricultural Development, 

Tourism Development, Fastest 

Growing State Economy, 

Housing Development, Promotion 

of Made In Nigeria, 

Ease of Doing Business and 

Most Improved in Peace and 

Security. 

Also, in aligning with the 

Federal Government’s efforts 

to raise the level of entrepreneurial 

skill acquisition and 

empower youths in Nigeria, 

Dana Air has partnered 

KinabutiFashion House and 

Pulse.ng, few weeks back 

to help youths particularly 

models across the country 

to achieve their dreams by 

providing them with a platform 

to showcase their talents 

through Dare 2 Dream 

season 2. 

Dare 2 Dream, a brainchild 

of Kinabuti Fashion 

House, is a motivational 

modelling contest with a 

strong element of youth 

empowerment that is aimed 

at discovering budding 

talents as well as helping 

to nurture them. Dana Air 

on the other hand, has always 

been responsive to the 

cause of youth empowerment 

as evident in its drive 

to always support credible 

initiatives that supports the 

younger population in their 

chosen careers. 

Dana Air, the official 

airline partner of the State 

Competitiveness and Good 

Governance Award, is one of 

Nigeria’s leading airlines with 

over 27 daily flights from Lagos 

to Abuja, Port Harcourt, 

Uyo and Owerri. The airline 

is reputed for its world-class 

in-flight service, on-time 

performance and innovative 

online products.


Edo to privatise Benin Specialist Hospital 

for optimal healthcare services 

… sings MoU for over 2m mosquito nets 


Edo State Governor Godwin 

Obaseki says his administration 

has resolved to 

privatise the Specialist Hospital 

in Benin City to provide worldclass 

healthcare services. 

According to Obaseki, the 

privatisation of the hospital 

will put it at par with the best 

hospitals in the world, and will 

serve the healthcare needs of 

Nigerians who ordinarily would 

have travelled abroad for such 

services. 

The logic of his administration 

is to woo those who have 

the resources to travel abroad 

for treatment to Edo State, for 

standard healthcare services 

instead of travelling abroad, the 

governor said. 

The accruing resources from 

the medical tourists will be 

channelled to provide affordable 

healthcare services for the 

ordinary Edo people across the 

state, he said. 

He made this position known 

at the signing of a memorandum 

of understanding (MoU) between 

Edo State government 

and the Catholic Relief Services 

(CRS), which will provide over 2 

million treated mosquito nets for 

Edo citizens. 

The governor added that 

many people suffer from malaria 

compared to renal failure, and 

stressed that primary healthcare 

was key to improved health of 

the people. 

“We are going to invest massively 

in our primary healthcare 

system,” the governor assured. 

The MoU is important as it 

emphasises what the administration 

stands for and it is the beginning 

of cooperation between 

this administration and the CRS 

and other donor bodies in providing 

affordable healthcare for 

the people of Edo State, he said. 

This administration places 

high premium on the healthcare 

of the people, the governor said, 

which explains why he appointed 

the Deputy Governor Phillip 

Shaibu to head the Edo State 

Long Lasting Insecticide Treated 

Net Campaign Committee. 

“I hope we will make history 

by emerging the first state in 

the country to totally eliminate 

malaria. Our counterpart fund 

is available and we are working 

round the clock to ensure 

that the time line we set for 

ourselves for the rollout, which 

is August 20 this year, is met,” 

he said. 

The leader of the team for 

CRS Ikhimioya Uchechuku 

commended the governor for 

the collaboration and expressed 

their readiness to work with the 

administration to ensure that 

malaria was a thing of the past 

in the state. 

The high point of the event 

was the signing of the MoU. 

Uchechuku signed for CRS while 

the secretary to the state government, 

Osarodion Ogie, signed 

for the state government. 

9Mobile, formerly Etisalat, available for 

new investors - management 

DANIEL OBI & JUMOKE AKIYODE 

Management of 9Mobile 

telecom, a transition 

new brand 

identity from Etisalat Nigeria, 

says it is willing to accept good 

offers from both foreign and 

local investors. 

Formally unveiling the 

new brand identity in Lagos 

yesterday to media stakeholders, 

Boye Olusanya, CEO, 

9Mobile, however said the 

new management was prepared 

to manage the business 

for a long haul. 

“We are here today with a 

brand that exists for Nigerians. 

If at any point in time, someone 

comes in with an offer 

that is attractive, the investors 

would have the right to do 

whatever they want to do with 

the brand,” Olusanya said. 

It should be recalled that 

on July 10, 2017, Etisalat was 

given three weeks to phase 

out its brand in Nigeria, after 

its Abu Dhabi arm recently 

pulled out and new board 

members were appointed to 

run the affairs the company 

following failed negotiations 

with its lenders over a missed 

payment of the $1.2 billion 

loan taken out from a consortium 

of 13 Nigerian banks 


As a result, the telco had 

to select a new brand name 

and identity, which it says is 

not a product of chance, but 

was carefully thought out and 

deliberated to represent its 

Nigerianess (Naija-centricity) 

from the 0809ja heritage and 

the fact that it has operated in 

Nigeria for nine years. 

Olusanya harped on the 

fact that the company would 

continue to serve its over 21 

million subscribers, having 

the same focus on the youth 

and providing even better 

offerings. 

“With the launch of our 

new brand, our commitment 

to providing our subscribers 

with best-in-class telecommunications 

services continues. 

We live in a digitalised 

world and 9mobile is positioned 

to deliver more platforms, 

products and services 

using the power of technology. 

The name change does 

not change what we stand for. 

This is business as usual for 

us,” he said. 

The new CEO said all materials 

of the telecom company 

would bear the new 

brand identity, but this would 

be replace on a gradual basis, 

saying the departure of any 

partner of the company absolutely 

had no bearing on 

quality of service subscribers 

would get as the staff had not 

changed. 

Funke Ighodaro, chief financial 

officer, 9Mobile, said, 

“The immediate focus of the 

business is to drive value for 

the benefit of its customers. 

The approach and timing of 

the rebranding is evidence of 

the agility and responsiveness 

of the business.” 

According to Ighodaro, the 

website and social media handles 

have also been changed 

to represent the new brand. 

C002D5556 BUSINESS DAY 39 

NEWS 

L-R: Barnabas Gemade, a senator; Abdullahi Sule, acting group managing director, Dangote Sugar Refinery plc, and Sam Egwu, chairman, 

Senate Committee on Industry, during the Senate committee on industry oversight visit to Dangote Sugar Refinery in Lagos, yesterday. 

NMRC to launch second tranche N20bn bond issuance, Q3 2017 

ONYINYE NWACHUKWU, ABUJA 

Nigeria Mortgage Refinance 

Company 

(NMRC) will, within 

the third quarter of 

2017, re-launch into the capital 

market a second tranche bond 

issuance of N20 billion to raise 

additional funds for housing 

refinancing. 

This is coming almost a year 

since the refinancer planned a 

re-launch into the bond market 

but was constrained due to the 

country’s harsh macroeconomic 

environment. 

The bond is the second 

tranche of the Series-1 of 

NMRC 15- year 14.9 percent 

fixed rate under a N140 billion 

medium-term note programme 

due in 2030 and is 

part of government’s effort to 

finance the nation’s increasing 

housing deficit. 

NMRC also plans to issue 

to issue some Sukkuk bonds of 

up to N2 billion before the end 

of 2017, according to Charles 

Inyangete, the Company’s 

Chief Executive Officer. 

The NMRC, after a successful, 

debut, N8bn bond showing 

in 2015 later announced it 

would go back to the market by 

the third quarter of 2016 for a 

second tranche bond issuance. 

Inyangete confirmed that 

high inflation and interest 

rates have seriously delayed 

the planned N20bn bond issue, 

but that the company has now 

overcome those challenges. 

“We are about to go to the 

market for the N20bn,” he 

stated. 

“You need to have a conforming 

portfolio and today 

you may have heard that originating 

of mortgages is not 

as easy and straight forward 

because of the environment, 

though we are gradually overcoming 

the hurdles that has 

held down the speed of creating 

mortgages, we now also 

have a way of creating new 

mortgages through the warehouse 

fund,” he said, responding 

to BusinessDAY question 

on what could have dragged 

the planned second tranche of 

about 20 billion. 

In 2015, the NMRC 

launched its first N8bn bond 

issue and was later listed on 

the FMDQ OTC platform in 

September same year to create 

long-term funding for mortgage 

financing. 

Inyangete confirmed at 

the just concluded annual 

Housing conference in Abuja 

that the N8bn raised is already 

fully invested and that they are 

currently investing part of their 

own retained profit. 

He specifically said that till 

date, NMRC has refinanced 

conforming mortgages of its 

member-banks in excess of 

N8.5 billion. 

“We are about going to the 

market for a Sukkuk because 

we are making submission to 

the Securities and Exchange 

Commission (SEC). We are 

also going to the market for a 

bigger portfolio of mortgages, 

so all of these are what is going 

to drive the market going 

forward.” 

“The Sukkuk is a small sized 

transaction in the order of 

about 2 billion or slightly less, 

the essence of it is to test the 

market for Sukkuk and have 

the processes and strategies 

properly set out. 

He said one of their member 

banks has a Sukkuk portfolio 

which is not very large 

and that they are using that 

portfolio to go to the market. 

“So we have approval of “sharia 

boat free” so we are now just 

going through the Securities 

Succour as Reps initiate establishment of kidney treatment centre 

... chide NAFDAC over public enlightenment 

KEHINDE AKINTOLA, ABUJA 

Succour will soon come 

the way of over 30 million 

Nigerians suffering 

from kidney related diseases, 

otherwise called renal failure, 

as the House of Representatives 

passed through second reading 

the bill that seeks to establish a 

National Renal Centre. 

With about 17,000 new cases 

of kidney diseases recorded 

yearly, Nigeria is also faced with 

dearth of nephrologists, despite 

the alarming rate of people 

diagnosed with kidney disease. 

In a recent statistics from 

Bayelsa State, approximately 

one in a dozen of participants 

evaluated had Chronic Kidney 

Disease (CKD). In Nigeria, 

as in many other developing 

countries, accurate data on the 

community prevalence of CKD 

are lacking, principally due to 

unavailability of a national renal 

registry. 

Leading the debate on the 

bill, Bede Eke, who sponsored 

the bill, noted that while the rich 

could afford to buy the choice 

of foods, the poor that form the 

larger chunk of the population 

could not afford the resources. 

While urging the Federal 

Government to take proactive 

steps to forestall the GMO 

products by demonstrating the 

needed political will to fund the 

establishment of critical health 

facilities, the lawmakers emphasised 

the need for National 

Agency for Foods, Drugs Administration 

Control (NAFDAC) to 

perform its statutory functions 

of ensuring that foods and other 

consumable items were safe for 

human consumption. 

Some of the lawmakers 

who spoke in favour of the bill, 

include: Edward Pwajok; Beni 

Lar; Sergius Ogun; Oghene 

Egoh; Fred Agbedi, and Joseph 

Albert, frowned at the adulterated 

foods, soft drinks and 

alcoholic drinks and drugs in 

circulation. 

The lawmakers, who bemoaned 

the huge number of 

Nigerians invading Indian Embassy 

for visa to access medical 

treatment for renal related 

diseases, harped on the need 

for President Muhammadu 

Buhari’s administration to provide 

necessary resources for the 

establishment of Renal Centre 

in each of the 36 states of the 

Federation and FCT. 

Eke said: “Before now, kidney 

disease or failure was given 

little attention because it was 

not rampant, but recently the 

number of Nigerians had been 

diagnosed of kidney failure and 

its mortality rate has risen to an 

alarming level that government 

must act quickly to tackle the 

menace posed by kidney disease 

to her citizens. 

“The increasing burden of 

chronic kidney disease and 

end-stage renal disease presents 

a challenge for both developed 

and emerging countries like 

Nigeria. Medical experts have 

revealed that more people die 

every day from kidney related 

diseases than malaria and HIV/ 

AIDS in Nigeria. 

“Estimates suggest that one 

out of every seven Nigerias has 

one stage of chronic kidney 

disease. Unfortunately, out of 

50,000 patients, who should 

ideally be on dialysis, less than 

1,000 are currently on dialysis as 

at today because of inadequate 

facilities. 

and Exchange Commission for 

their own approval.” 

On increasing appetite for 

Sukkuk bonds, he explained, “It 

is a compliant instrument for 

those who don’t want to invest 

in products that are non-sharia 

compliant, the Sukkuk is an 

alternative. 

“To have an Islamic product 

as part of our portfolio of 

products is very useful, it also 

respond to any masses desire 

to be included in the way we 

do our business that means 

to include a segment of the 

market that is looking for a noninterest 

product,” he added. 

In his presentation, he said 

Nigeria needs N3.5 trillion is 

needed annually to provide for 

700,000 housing deficits 

“In fact some figures put it 

for as high 900,000 and so if you 

look at that it means the entire 

budget of the ministry of work, 

power and housing is way short 

of that expectation but again 

that is why we need the capital 

market and this is why we need 

to tie a product to the need. 

“Those are some of the 

things that need to be done so 

that we can provide houses to 

meet the need of the people,” 

he explained. 

LG election: Lagos 

extends movement 

restriction 

JOSHUA BASSEY 

Lagos State on Wednesday 

announced the extension of 

the restriction of movement 

for the July 22, 2017 local government 

election, from 7am to 3pm. 

The state government had 

earlier announced that the restriction 

would start from 8am till 2pm. 

Steve Ayorinde, commissioner 

for information and strategy, in 

a fresh statement on Wednesday, 

said the restriction had to 

be slightly expanded to allow for 

a smooth conduct of the local 

government elections and unhindered 

participation. 

He reiterated the call for a 

peaceful and orderly conduct by 

the electorates during the polls to 

usher in new chairmen and councillors 

in the 20 local governments 

and 37 local council development 

areas of the state. 

According to Ayorinde, the 

state government and security 

agencies will leave no stone unturned 

in ensuring a free and fair 

election, while ensuring safety of 

electoral officials and voters.


FT 

TIMES 

C002D5556 

BUSINESS DAY 

A1 

Central bank mis-steps 

raise concerns 

Page A3 

Auto industry - lex in depth - Together 

in electric dreams 

Page A4 


- 

FINANCIAL 

World Business Newspaper 

UK asserts right 

to return EU 

nuclear waste 

ANDREW WARDN & ALEX BARKER 

Britain has put the EU 

on notice that it has the 

right to return radioactive 

waste to the bloc 

after it leaves, in an attempt 

to increase the UK’s negotiating 

clout on the vexed issue of 

nuclear regulation. 

UK officials hope raising complex 

questions over what should 

happen to Britain’s stockpile of radioactive 

materials - some of which 

originate in EU countries including 

Germany, Italy and Sweden - will 

convince Brussels to take a co-operative 

approach to the nuclear issue. 

“It might just be a reminder that 

a boatload of plutonium could end 

up at a harbour in Antwerp unless 

an arrangement is made,” said one 

nuclear expert who has advised the 

government. 

Britain has imported spent nuclear 

fuel from the rest of Europe 

since the 1970s for reprocessing 

at the state-owned Sellafield plant 

in Cumbria - producing reusable 

uranium and plutonium, but also 

radioactive waste. 

A paper setting out the UK position 

for Brexit negotiations stressed 

the right “to return radioactive waste 

. . . to its country of origin”, in what 

one British official described as a 

coded warning to Brussels about 

the EU’s interest in reaching a con- 

The boss of Telefónica put 

forward an interesting 

proposal at a recent breakfast 

at the Financial Times’ 

offices in London. Customers, suggested 

José María Álvarez- Pallete, 

should have control of their own 

data. They should be able to see 

how their data are used, and they 

should be able to take it with them 

on leaving the service provider. 

Mr Álvarez-Pallete’s suggestion 

was not casual. Telefónica is 

working on a platform called Aura, 

a personal data space that would 

hold all the interactions that a 

customer had with the company. If 

the customer wanted, for example, 

to show their telephone payment 

sensus. 

The paper also highlighted the 

responsibility of EU countries for 

some “special fissile materials” - the 

most dangerous and tightly regulated 

types of nuclear substances, 

including plutonium - derived from 

imported spent fuel. Almost onefifth 

of the UK’s 126-tonne stockpile 

of civilian plutonium at Sellafield 

comes from overseas. 

Nuclear regulation has become 

one of the knottiest issues in the 

early stages of negotiations about 

the UK exiting the EU because 

Britain must untangle itself from 

the Euratom treaty governing the 

civilian use of atomic technology 

in Europe. 

Leaders of the UK nuclear industry 

are lobbying the government to 

find a way of remaining part of Euratom 

or, if that proves impossible, to 

negotiate an extended transition 

deal to allow time to establish a new 

regulatory system. 

However, both options would 

require continued jurisdiction 

by the European Court of Justice; 

something Theresa May, UK prime 

minister, has resisted so far. 

Those arguing for Mrs May to 

compromise have highlighted the 

threat of disruption to UK supplies 

of nuclear fuel, reactor parts and 

medical isotopes used in cancer 

treatments if Britain fails to reach a 

deal with Brussels. 

Give us back our own 

precious data 

SARAH GORDON 

schedule to a credit scoring company, 

they would be able to do so. 

To the journalists present, the 

proposal seemed radical. Why 

would Telefónica want to give our 

precious data back to us? We have 

become accustomed to treat as 

totally normal the idea that data 

gatherers - whether a telecoms 

company, a social media platform 

such as Facebook or a utility like 

an electricity provider - have first 

dibs on our information: what we 

do, how much we spend, where 

we go, what we watch, the food we 

eat, what music we like or the state 

of our health. In the UK, this has 

been most recently, and glaringly, 

manifested by news that a National 

Health Service trust handed over 

Continues on page A2 

Theresa May 

Trump cannot make America govern itself again 

EDWARD LUCE 

Let us give Donald Trump 

a pass. The last time Congress 

enacted a serious 

law was more than seven 

years ago, which was well before 

he turned up. That was Barack 

Obama’s healthcare reform, 

which is turning into Trump’s 

nightmare. He just cannot get that 

law off the books. 

Congress is a sausage factory 

that has forgotten how to make 

sausages. Now Mr Trump wants it 

to make the largest sausage imaginable: 

a big tax reform package. 

But what does Mr Trump know 

about sausages? 

The answer is little. Passing 

serious bills requires the clarity of 

Ronald Reagan, the grit of Lyndon 

Johnson and the patience of Job. 

Mr Trump lacks all three qualities. 

In contrast to his attacks on 

critics, such as what he describes 

as the Fake News media, Mr 

Trump’s promotional skills are 

limited. 

It is hard to think of a memorable 

Trump tweet on tax reform. 

Mr Trump is better at tearing opponents 

down than building the 

case for change. The chances are 

that he will fail to pass tax reform, 

just as he has failed to repeal and 

replace Obamacare. 

The blame for this does not rest 

solely on the current president’s 

shoulders. His election followed 

Capitol Hill’s six most fallow years 

since the Reconstruction era after 

the civil war. Though it is America’s 

first branch of government, 

Congress has ceased to function 

in a serious way since 2010. The 

Republican party, which saw its 

role as stopping Mr Obama from 

passing anything, even if he had 

gone more than halfway to meet 

them, bears most of the responsibility. 

Failed initiatives include 

an immigration overhaul and 

fiscal reform. 

Having acquired a habit of 

blocking, Republicans have forgotten 

how to score. But the one 

thing that unites Republicans of 

all kinds, Trump included, is the 

strong desire to cut taxes. It does 

not matter much how they are 

cut, or which ones are targeted. 

The party’s sole ideological glue 

is a desire to lower them. Other 

pieties, such as balancing budgets, 

are easily dispensed with. 

It ought to be a simple matter, 

therefore, for Mr Trump to build 

momentum around a big tax cut 

and damn the consequences. Yet 

his chances of success are slim. 

There are two reasons for this. 

The first is that Mr Trump 

has no appetite for the intricate 

horse-trading required to win. 

This is true even at the best of 

times. But these are the worst. 

Mr Trump is increasingly distracted 

by the Russia investigations, 

which absorb most of his 

bandwidth. According to aides, 

Mr Trump spends most of his 

evenings watching recordings of 

cable news shows just as obsessed 

with Russia as he is. He then calls 

around friends in New York, Flor- 

ida and elsewhere to comment on 

how unfairly he is being treated. 

Mr Trump’s obsession with “Fake 

News” criticism is his first, second 

and third priority. Anyone who 

doubts that should analyse his 

tweets and the odd hours at which 

he sends them. Tax reform does 

not feature. 

The second is that Republicans 

are no longer a governing 

party. To be fair, this holds only 

at the federal level. There are 

plenty of Republican mayors and 

governors who do a good job of 

solving practical concerns at the 

local level.


A2 BUSINESS DAY 

C002D5556 

FT 

NATIONAL NEWS In association with 

The logic behind China’s treatment of a dissident 

JAMIL ANDERLINI 

Liu Xiaobo, the great Chinese 

public intellectual 

and Nobel laureate died 

last week while serving 

an 11-year sentence for 

peacefully disagreeing with oneparty 

rule in his country. 

His death last week was a farcical 

spectacle of cruelty. His liver cancer 

Give us back our own... 

Continued from page A1 

data on 1.6m patients to Deep- 

Mind, the artificial intelligence 

arm of Google, a decision that the 

regulator says “ failed to comply 

with data protection law”. 

We have little idea what personal 

data companies own about 

us, what they do with it, or where 

they store it. This does not just 

raise issues about privacy, but also 

security. It is also profoundly disempowering. 

Most people believe 

they should have as much control 

as possible of their intellectual 

property or their physical selves. 

So why should someone else own 

our data? 

There are, of course, good reasons 

why companies would resist 

handing back control. Customers’ 

data provides valuable information, 

which can be used to make 

those customers more profitable. 

Whether it is targeted advertising, 

or a customised news feed, our data 

are manipulated to keep us loyal to 

service providers or to tempt us to 

spend money. 

Dictating our preferences in 

this way, though, is something we 

should consider resisting. It is comfortable, 

but dangerous, to be fed 

music we already like, or news that 

we want to read. It would be better, 

perhaps, if we could tell companies 

our preferences, broadening our 

interest and knowledge rather than 

forever narrowing it. 

And for many companies, the 

personal nature of customer data 

is not necessarily its most useful 

quality. Once anonymised and aggregated, 

data cannot be attributed 

back to specific individuals, but 

can still be used by the companies 

who gather it to hone or develop 

products and services that respond 

to customers’ wants. 

This could provide a possible 

pathway to future data control that 

pleases everyone. Several organisations, 

like CitizenMe or People.io, 

are working on private accounts 

that allow individuals or organisations 

to keep their own data in one 

place and choose when to share 

the information with others. The 

catchily named Hub of All Things, 

was not discovered or acknowledged 

by his captors until he had 

just weeks to live, his medical treatment 

was little more than a fig leaf 

and his dying wish to leave China 

was rejected. 

The government arranged a 

hasty burial at sea so that his grave 

could never serve as a shrine to the 

country’s most famous dissident, 

and his brother was paraded before 

Margaret Thatcher 

the media to thank the Communist 

party and the government for his 

mistreatment. 

Given its roots as a revolutionary 

movement, the party understands 

very well the power of charismatic 

martyrs like Liu, which is why it 

takes him and his message so seriously. 

Already pervasive levels of state 

censorship have reached new 

heights in the past week and the 

government has lashed out angrily 

at western media for their coverage 

of Liu and his untimely death. 

Beijing’s public argument boils 

down to this: Liu was convicted in 

a Chinese court so he is a common 

criminal, awarding him a Nobel 

Prize was a “blasphemy” and none 

of this is the business of anyone 

outside China. 

Branch out to avoid a Brexit capital markets crunch 

REZA MOGHADAM 

It could just be confidence 

talking when EU officials 

shrug off warnings about 

the coming hit to capital 

markets from Brexit. After 

all, the reasons for optimism have 

lately been plentiful: a widening 

economic recovery, the defeat 

of Euroscepticism at the polls, 

hopes for deeper reforms led by 

France and Germany, and unified 

positions on key issues, including 

Brexit. 

But Europe’s ease about capital 

market prospects reflects more 

than just a surfeit of general confidence. 

It is rooted in two substantive 

assumptions. The first is that 

the City of London’s global investment 

banks, lacking the regulatory 

“ passport” to service EU clients 

from London after Brexit, can 

seamlessly set up shop on the continent, 

with few gaps in the range 

or price of services provided. The 

second is that, were gaps to arise, 

these could be filled by EU banks. 

Both assumptions are flawed. 

Consider first the move of the 

City’s largest investment banks, 

mainly US and British, to the 

continent. If they are to answer 

directly to EU supervisors, they 

must set up EU subsidiaries. But 

a subsidiary, as a legally separate 

entity, is expensive, duplicating 

not only fixed costs such as management 

and information systems, 

but also capital costs. 

A subsidiary needs more capital 

since it cannot diversify risk in 

the small continental market as 

effectively as in London. The parent 

needs more capital as loans to 

the subsidiary from London count 

as outside exposures. The result: 

lower bank profitability and return 

on equity, and so pressure to scale 

back services or raise prices. 

Consider next the EU banks. 

Could they not easily step into the 

breach? No. The investment banking 

arms of EU banks are based 

in London, where they access 

a high-volume, low-cost global 

market as branches. As such, they 

are overseen by EU supervisors 

and capitalised as consolidated 

entities, without the duplication 

of fixed costs or capital needs that 

subsidiaries endure. 

Whether the EU banks can 

continue as branches after Brexit is 

unclear - the UK has left the issue 

open for negotiation. What is clear 

is that, were the UK, like the EU, to 

insist that the other side’s banks 

access its markets as subsidiaries, 

European banks would also see 

higher costs. 

Some of these cost problems 

will no doubt ease as continental 

markets mature and grow. But 

that day is still some way off: the 

required ecosystem of bankers, 

traders, lawyers and technology 

is simply missing in Europe. For 

now, London is the only town in 

the game. Unless something is 

done, a European capital crunch 

is on the cards. 

One way forward would be 

for the EU and the UK to allow 

branches to operate in each other’s 

jurisdictions - rather than 

force the other side to set up 

subsidiaries. As technical as the 

distinction between branches and 

subsidiaries may seem, the fact 

remains that a branch’s capital and 

governance costs are reckoned at 

the level of the parent, which substantially 

lowers costs and avoids 

a disruption in capital markets. 

The real rationale, expressed by 

some officials in private, is this: China 

has managed to lift 800m people 

out of poverty over the past four 

decades with its mix of economic 

reforms and political repression, 

and people like Liu, with their nonviolent 

idealism , calls for individual 

freedom and willingness to die for 

their beliefs, pose a potent threat to 

one-party rule. 

Thatcher’s prized 

rebate hampers 

Brexit bill talks 

ALEX BARKER 

More than three decades 

after Margaret 

Thatcher secured a 

rebate on British contributions 

to the EU, the budget 

deal has become a focus of the 

first phase of Brexit talks. During 

negotiations this week that made 

only “slow progress” across the 

board, participants said Britain’s 

financial settlement stood out as 

the toughest subject, with neither 

side budging from its opening 

stance. 

Following hours of to and fro 

over the exit charge, which the 

EU estimates to be up to €100bn 

gross, negotiators hit an issue that 

has divided Brussels for more than 

three decades: the justification for 

Britain’s rebate and its link to farm 

payments. 

The “UK correction” secured by 

Thatcher, prime minister, in 1984 

carries hallowed status for the ruling 

Conservative party. Under the 

agreement, the UK receives an annual 

reduction in its contributions 

that in any given year is equivalent 

to 66 per cent of the UK’s net contribution 

in the previous year. 

The EU’s insistence that the 

rebate is tied in any exit bill to 

post-Brexit agriculture payments 

highlights the unexpected political 

snags emerging as negotiators 

grind through the divorce. 

Other sensitive topics range 

from the complications of UK 

immigration law in the common 

travel area with Ireland, to nuclear 

waste, and family reunion rights of 

EU citizens in Britain. 

While there was some convergence 

in discussions on citizen 

rights, goods on the market and 

nuclear co-operation, progress 

was limited compared with the 

substantial differences that remain, 

according to people familiar 

with the deliberations. 

The most serious stalemate was 

on money. 

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Central bank 

mis-steps 

raise concerns 

MEHREEN KHAN 

Investors are increasingly 

concerned over mis-steps 

in global monetary policy, 

propelling central banks to 

the top of market risks this month, 

according to a major survey of 

money managers. 

A shift in communication from 

the European Central Bank in recent 

weeks has driven the euro to 

its highest level in 14 months and 

prompted a sell-off in eurozone 

bond markets, as investors adjust 

to the prospect of a scale back in 

emergency stimulus measures. 

In a sign of the new found unease 

over central bank policy, just 

under half of fund managers surveyed 

by Bank of America Merrill 

Lynch (48 per cent) thought global 

monetary policy has become 

“too stimulative” for a brightening 

world economy - the highest 

proportion since April 2011. 

The change in sentiment 

comes after the ECB’s shift in its 

communication over the path 

of its bond-buying programme. 

Investors will be scrutinising its 

last major policy decision before 

the summer break today, when 

China has slashed the 

price of dozens of top 

drugs from multinationals 

such as Roche, 

GlaxoSmithKline and AstraZeneca 

by as much as 70 per cent as 

a condition of adding them to a 

government health insurance 

scheme. 

Thirty-six drugs, mainly developed 

by overseas companies, 

will see average cuts of 44 per 

cent to last year’s retail prices, 

making them cheaper in China 

than “neighbouring regions”, the 

social security ministry said in a 

statement. 

The move makes the medicines 

eligible for state co-payment, 

which pharmaceutical 

companies and analysts say will 

bring the products within the 

reach of more people, boosting 

overall sales. 

China, the world’s secondlargest 

pharmaceutical market 

with sales worth $117bn in 2016, 

is crucial for multinationals. 

The cuts, following lengthy and 

sometimes bitter negotiations 

with Beijing, underline how the 

world’s biggest drug companies 

FINANCIAL TIMES 


the governing council gathers for 

its July meeting. 

Mario Draghi, ECB president, 

roiled European markets last 

month when he hinted at a tightening 

in the central bank’s quantitative 

easing programme, which 

has been running since March 

2015. Draghi cited the eurozone’s 

broad-based recovery and steadily 

falling unemployment rate as reasons 

for optimism, even as inflationary 

pressures have remained 

subdued. 

Eurozone inflation remains below 

the ECB’s target of just under 2 

per cent at 1.3 per cent in June. But 

over three-quarters of investors 

surveyed said they expect higher 

inflation in the single currency 

area over the next 12 months. 

The prospect of an ECB tightening 

has sparked a correction in the 

bond market. Germany’s 10-year 

Bund yield has more than doubled 

to 0.56 per cent in the past month, 

while the euro has surged to its 

highest since May 2016. 

Bond yields, which move inversely 

to prices, rise on the prospect 

of tighter monetary policy 

through higher interest rates or a 

withdrawal of QE. 

Beijing slashes western drug prices 

before inclusion in insurance scheme 

TOM HANCOCK & WANG XUEQIAO 

are co-operating with the ruling 

Communist party’s drive to 

reduce medicine prices even 

though it has slowed revenue 

growth for some products. 

Most of the 36 drugs targeted 

in the latest negotiations are still 

under patent protection. 

Reductions for drugs treating 

cancer - an increasing portion of 

China’s disease burden - were 

particularly deep. The price of 

Roche’s breast cancer antibody 

Trastuzumab will fall 67 per cent 

compared with the average price 

last year, while the price of its 

lung-cancer drug Erlotinib will 

be cut by 58 per cent. 

Prices for two drugs used to 

treat breast cancer, AstraZeneca’s 

Fulvestrant and GSK’s 

Lapatinib will fall 56 per cent and 

41 per cent respectively. Bayer’s 

liver and kidney cancer drug 

Sorafenib will be halved in price. 

“These are drugs which treat 

common diseases, and it will 

be no problem to achieve largescale 

sales. Some are close to 

patent expiration, and by lowering 

their price now will be able 

to fend off competition more 

easily in future,” said Joe Jin, a 

healthcare industry partner at 

consultancy Roland Berger. 

THOMAS HALE 

High-yield bonds and 

non-performing loans 

are not the most obvious 

of combinations. 

So when private equity group 

AnaCap launched a €325m highyield 

bond this month to help buy 

bad debt, it caught the attention 

of investors. 

The deal, priced at a yield of 

roughly 5 per cent, was issued to 

fund purchases of NPLs in Italy 

and Portugal, giving a new set of 

buyers exposure to Europe’s most 

pressing financial conundrum. 

Europe’s €1tn non-performing 

loan problem is at a critical point. 

Last week, EU finance ministers 

made new recommendations to 

speed up the development of a 

market for the debt. 

But the market has evolved of 

its own accord. Last week, Bain 

Capital announced new deals in 

Spain and Portugal. On Monday, 

UniCredit finalised a sale of bad 


Japanese corporate issuers attract record sums 

amid regional boom in dollar bond sales 

Japanese companies have 

tapped bond markets for 

record amounts this year, 

taking advantage of investors’ 

continued demand for yield amid 

a boom in the region’s dollar debt 

markets. 

So far this year $195.3bn of yen 

and dollar-denominated bonds 

have been sold, according to Dealogic, 

10 per cent more than at the 

same point in 2016. The previous 

year-to-date record was $187bn 


A rise in sales of dollar bonds 

has driven the boom. The $59.8bn 

sold is almost twice that of five 

years ago - a trend echoed across 

C002D5556 

loans to Pimco and Fortress. 

“We’re seeing increases in balance 

sheet allocation to the asset 

class among particularly the US 

banks,” says David Edmonds, of 

Deloitte. 

While private equity and credit 

firms make up the bulk of demand 

for portfolios of bad loans, they 

also typically raise financing from 

investment banks but also from 

bond markets, as with the AnaCap 

deal, in a bid to boost the profitability 

of their investments. 

Funds have raised $300bn in 

capital, Deloitte says, and the 

amount of potential financing 

could be even higher - creating a 

vast market of which banks and 

lenders may gain a share. 

Big US investment banks, including 

Citi and Morgan Stanley, 

are seen to be eyeing opportunities 

for growth in financing 

Europe’s NPL market, taking advantage 

of the challenges facing 

the domestic European banking 

sector, according to bankers and 

the region. 

The dollar boom has prompted 

debate over whether it marks a 

maturing of Asia’s international 

bond markets or is a fad that will 

fade when interest rates rise definitively. 

The region’s bond markets 

are historically far smaller 

and more fragmented than those 

in Europe and the US. 

A bond sell-off, pushing borrowing 

costs higher, has not 

deterred corporate borrowers, 

however. 

Last week SoftBank, the large 

telecoms to technology group, 

sold $4.5bn in junk-rated perpetual 

bonds - a global record for 

such an issue. 

Bankers are confident the 

BUSINESS DAY 

US banks eye European non-performing loans 

Mario Draghi 

PETER WELLS & JENNIFER HUGHES 

A3 

analysts. 

“The US banks . . . are among 

the most keen to lend right now,” 

says Justin Sulger, head of credit 

at AnaCap. “ Obviously the European 

banks are still going through 

greater restructuring . . . It’s a big 

growth opportunity.” 

Lending against NPL portfolios 

provides banks with a form of indirect 

exposure to the asset class, 

with attractive earnings in an 

otherwise low-yield environment. 

In peripheral Europe, the loans 

banks provide to buyers of NPLs 

typically earn them a spread of 4 

per cent over the benchmark rate. 

Investors and financiers are 

looking for the next set of opportunities. 

Ireland is seen as 

an active source of NPL activity, 

while the failure of Banco Popular 

and its purchase by Santander is 

expected to generate significant 

NPL business in Spain. Popular 

had masses of toxic real estate 

loans that Santander is now expected 

to sell. 

trend can continue at least a few 

more quarters given that Japanese 

companies’ interest in overseas 

acquisitions is expected to continue. 

“ Japanese corporates in the 

past relied on bank loans for dollar 

funding,” said Ryota Suzuki, cohead 

of Japan debt capital markets 

for Bank of America Merrill Lynch. 

“But their funding needs are getting 

bigger and bigger.” 

They therefore needed to raise 

money in the market, he said. 

“Japanese issuers are very active 

in expanding internationally and 

they will also have some refinancing 

needs. I think for at least a 

few more years, this trend will be 

continuing.”

C002D5556 

A4 BUSINESS DAY 


FT 

ANALYSIS 


Auto industry - lex in depth - Together in electric dreams 

TOM BRAITHWAITE 

While Tesla’s share 

price soared, investors 

treated 

the traditional 

carmakers as if 

they were seriously ill. But the 

gloom surrounding the incumbents, 

which still have strengths 

the upstarts lack, seems overdone. 

Cars attracted frenzied speculation 

from the start. As Warren 

Buffett likes to point out, most 

investors got burnt: of 2,000 US 

car companies at the start of the 

20th century three endured. “Of 

course, the thing you should have 

been doing,” the Sage of Omaha 

has remarked more than once, 

“was shorting horses.” 

Investors are once more captivated 

by cars, this time electric 

and autonomous ones. Unlike 

100 years ago, however, there are 

not 2,000 companies on which to 

bet. Some might look to Google 

parent Alphabet or Apple, the 

technology groups for whom 

cars are just a large research cost; 

most, though, alight on Tesla, the 

electric carmaker. 

Yet it is not certain that Tesla 

has the staying power of a General 

Motors rather than the shorter 

life of a Winton Motor Carriage 

Company or one of the other 

original also-rans. And while 

the market seems to have identified 

traditional carmakers as the 

“horses”, they are not heading 

for the knacker’s yard and could 

adapt to a new market. 

At Tesla, chief executive Elon 

Musk is a magnetic evangelist for 

his company, convincing shareholders 

to supply more cash to 

fund factories and cars. They have 

poured in more than $7bn since 

the 2010 initial public offering. 

Additional shares bring dilution 

which should reduce the price, 

but it has marched higher, up 50 

per cent this year. Even analysts 

at Goldman Sachs, Tesla’s preferred 

underwriter for the share 

sales, now reckon no one should 

buy them: its price target of $180 

is almost 50 per cent below the 

current level. 

With a $50bn valuation despite 

no profits, negative free cash flow 

and frequently missed delivery 

targets, Tesla is a compelling 

counterpoint to the complaint 

that markets are fixated on the 

short term. It has lost money 

every year since going public 

in 2010 and burnt almost $7bn 

of cash along the way. Despite 

promising to reach positive free 

cash flow, Tesla has only achieved 

it in four of 34 quarters: capital 

spending usually overwhelms the 

cash coming in. 

Listen to Mr Musk at the annual 

meeting last month and 

that is not a surprise. He swept 

from solar roof tiles to powering 

a Hawaiian island, to a plan for 

a car that would drive itself from 

California to New York without 

any human intervention, to 20 

vast “gigafactories” producing 

batteries, to a prototype truck that 

would be unveiled in September. 

“It’s not inconceivable I would 

do an electric plane,” he said, 

adding “no, I’m not saying we’re 

going to add a nuclear fusion reactor. 

I’m just saying it fits.” 

Yet Tesla delivered only 76,000 

cars last year. Morgan Stanley 

analysts forecast it will not surpass 

1m until 2028. Toyota, Volkswagen 

and GM each produce 

about 10m cars a year out of 

global sales of 90m. For the Model 

3, its new mass-market car priced 

at $35,000, Tesla has said it will 

produce 5,000 a week at some 

point in 2017 and 10,000 a week 

at some point in 2018. There were 

400,000 initial deposits of $1,000. 

But the deposits are refundable 

and the car is not yet on the roads, 

though it says it will be delivered 

on schedule. Seeking to rein in 

demand, even Musk is imploring 

people not to buy it; orders placed 

now do not have hope of delivery 

until the end of 2018. 

By then there will be more 

competition. GM has shown with 

the Chevy Bolt that it can make 

an electric car with both a range 

- 238 miles on one charge - and a 

pricetag similar to the Model 3. 

If the Bolt falls short on style, 

then companies including BMW, 

Daimler, Nissan and VW will deliver 

more alluring models in the 

next two years. VW plans 10 new 

models by then and for electric 

vehicles to account for 20-25 

per cent of sales by 2025. Honda 

wants two-thirds of its vehicles 

to be partly electric-powered by 

2030, a goal that includes petrol/ 

electric hybrids such as the Accord. 

Volvo went a step further 

this week, announcing the end 

of the purely petrol engine in its 

cars from 2019. Having previously 

focused on hydrogen fuel cell 

technology, Toyota, too, is ramping 

up its electric ambitions. 

Even if the Model 3 succeeds, 

it is hard to imagine Tesla ever 

matching the sales of the biggest 

carmakers. Yet it is valued as if 

it will. VW, GM and Toyota each 

sell about 10m cars a year and 

make a combined $34bn in net 

income between them. Tesla, 

with consistent losses and less 

than 1 per cent of its volume, 

overtook GM this year to become 

the most valuable US carmaker. 

Finding another way to live up 

to its enterprise value requires a 

leap of faith that Tesla can attain 

and exploit an advantage in some 

other technology - batteries or 

autonomous cars perhaps. 

This week Tesla has hit trouble; 

whether it is a bump in the road 

or something more serious remains 

to be seen. Weak sales data 

fed the narrative that potential 

customers were forgoing existing 

models and waiting for the 

cheaper Model 3; the shares are 

off almost a fifth from their recent 

high. More than most companies, 

Tesla needs its inflated stock price 

since it relies on the stock market 

Mark Fields 

for funding. 

Plenty of sceptics have lost 

money betting on the shares to 

fall. S3 Partners, which tracks 

short sellers, estimates their losses 

are $4bn this year. It does not 

mean the short sellers are wrong: 

the road to success for Tesla still 

looks incredibly narrow. 

Strength of the incumbents 

While Tesla soars, the broader 

industry is being treated as if it is 

seriously ill, with a price/earnings 

multiple that is about the lowest 

in 20 years. Traditional carmakers 

have inspired no faith in their 

ability to adapt to new technology. 

Doubts are understandable. As 

recently as 2009, GM and Chrysler 

were going through bankruptcy. 

The emissions scandal that cost 

VW and other car manufacturers 

billions of dollars struck only two 

years ago. 

In May, a month after Tesla 

overtook its market value, Ford 

ousted chief executive Mark Fields 

for failing to push fast enough into 

the future. GM has made bolder 

bets, paying $581m for Cruise Automation, 

a San Francisco-based 

autonomous driving company; 

investing $500m in Lyft, the ridehailing 

company; and launching 

Maven, a car-sharing app, with 

the surprising admission that, 

when city dwellers buy a car, it 

depreciates “fairly rapidly, you 

use it 3 per cent of the time, and 

you pay a vast amount of money 

to park it for the other 97 per cent 

of the time”. 

However, this is not being rewarded 

in the market any more 

than Ford’s more cautious approach. 

GM trades at a depressed 

multiple of five times expected 

earnings. Investors believe in future 

car technologies, but not that 

the current carmakers will profit. 

The same divide is reflected 

among suppliers. Intel paid $15bn 

in March for Mobileye, an Israeli 

company that makes sensors for 

driverless cars and not much in 

the way of profit: the price works 

out at more than 100 times core 

earnings, not dissimilar to Tesla’s 

valuation. Nvidia, whose chips 

are used in self-driving technology, 

has seen its shares triple in 

a year. 

Federal-Mogul on the other 

hand, founded in Detroit in 1899 

and a maker of less glamorous 

parts such as pistons and gaskets, 

was valued at $1.7bn, just 2.5 

times core earnings, when it was 

acquired this year by Carl Icahn. 

Delphi, another large supplier, 

made the decision to split into two 

and was immediately rewarded 

with a 10 per cent increase in the 

stock price. Shareholders assume 

the advanced electronics division 

will be valued more attractively 

once shorn of the engine division. 

Yet the gloom surrounding 

the incumbents seems overdone. 

Ford’s free cash flow is about 

$13bn, enough to buy back all of 

its own depressed shares within 

three years. Low interest rates 

have helped prolong a period of 

bumper sales. US sales, which 

fell to a rate of 9m in 2009, remain 

close to 17m a year, although sales 

are now declining. 

President Donald Trump may 

enjoy torturing carmakers for 

their overseas plants but he is 

hardly going to upend their business 

models with tough environmental 

rules and incentives. Mr 

Trump tweeted this week: “Gas 

prices are the lowest in the US in 

over 10 years! I would like to see 

them go even lower.” 

Indeed, gas prices in the US 

are about $2.50 a gallon, while 

they have spent most of the past 

decade closer to $4. While investors 

become excited by electric 

cars, Ford is selling gas-guzzling 

pick-up trucks in record numbers. 

Change will come, but judging 

the pace is crucial. Opec, which 

has a vested interest, predicts that 

fewer than 7 per cent of vehicles 

on the road will be fully electric 

as far away as 2040. The oil producers’ 

cartel also assumes the 

number of cars will double from 

today to 2bn. Tech evangelists 

scoff at this, claiming more will be 

electric and more will be shared 

and autonomous. 

But even under more radical 

forecasts - UBS predicts electric 

vehicles, including hybrids, will 

account for 14 per cent of sales by 

2025 - there will still be plenty of 

petrol-powered cars. If investors 

remain so down on the industry, 

private equity firms should be 

able to strike bargain deals for 

cash generative companies.

BUSINESS DAY 

Fact Check 

NEWS YOU CAN TRUST I THURSDAY 20 JULY 2017 C002D5556 

TopfiveFacts 

Trivial 

100% 

Juices expressed directly from a fruit or vegetable 

(not concentrated and reconstituted). 

Is that product made from 

100 percent fruit juice? 

Some fruit juice 

manufacturers 

have their juice 

labelled ‘100%’ 

juice implying 

that everything in that 

pack of juice was expressed 

from a fruit but 

is there any truth in this 

The percentage of juice must be disclosed 

on the label but that doesn’t stop exaggerated 

advertising. A 2013 research conducted by 

Michigan state university extension on ‘fruit 

juice’ revealed that the ingredients list is very 

helpful in determining the nutritional content 

of the product. 

A research conducted 

by Dyets Inc, a diet 

research firm tried to 

squeeze facts from fiction 

about 100% fruit juice. 

The study which was 

conducted in March 2015 

stated that juices directly 

expressed from a fruit or 

vegetable (not concentrated 

and reconstituted) 

shall be considered to be 

100% juice and shall be 

declared as ‘100% juice, 

which is in line with the 

United States code of 

Federal Regulations. 

However, when reconstituted 

from juice 

concentrate, the US Food 

and Drug Administration, 

FDA defines 100% 

juice according to Brix 

concentrations representative 

of those originally 

expressed from the 

fruit. 

In its 2001 study which 

claim? 

What does ‘100%’ 

juice mean? 

100% juice on the label 

means that there’s just 

juice, fruit, or vegetable, 

in the container and contains 

no sugar. 

looked at ‘The use and 

misuse of fruit juice in 

paediatrics’, the American 

Academy of paediatrics, 

said that unless 

a juice is 100% juice it 

shouldn’t be given the 

labelled as such. 

According to a 2012 

research by Welch health 

and Nutrition, 100 percent 

fruit juice has is 

squeezed from whole 

fruit without added sugar, 

just natural fruit sugars 

along with vitamins, 

minerals and plant nutrients. 

The concluded that ‘it 

is important to remind 

consumers to check labels 

and look for 100 percent 

fruit juice to ensure 

no sugar has been added. 

How can you tell if 

the product is made 

from 100% juice? 

The percentage of juice 

must be disclosed on the 

label but that doesn’t 

stop exaggerated advertising. 

A 2013 research conducted 

by Michigan state 

university extension on 

‘fruit juice’ revealed that 

the ingredients list is very 

helpful in determining 

the nutritional content of 

the product. 

The study also shows 

that a lengthy list of ingredients 

is another clue 

that a product is not 100 

percent fruit juice, but 

rather a fruit flavoured 

drink or fruit juice blend. 

According to the study, 

the ingredients are listed 

in descending order by 

dominance of weight, and 

substances listed first are 

of the greatest weight. 

The study concluded 

by advising consumers 

to be aware if water was 

added to make the juice, 

which it pointed out was 

the case for fruit juice 

from concentrate, in such 

cases, it will likely be the 

first ingredient. 

One serving of 100 percent 

orange juice supplies 

100 percent of the vitamin 

C that your body needs. 

Read the product label 

carefully, as a product 

may contain 100 percent 

of your daily vitamin C, 

but that does not mean 

the product is 100 percent 

fruit juice. Vitamin C can 

be added to a juice drink 

but again, this does not 

make it 100 percent fruit 

juice. 

It is advisable, the 

study says for consumers 

to look at the product label 

to find the percentage 

of fruit juice. The only way 

to confirm if the fruit juice 

is 100 percent pure is to 

read the ingredient list. 

But again, some adverts 

are misleading. 

Labelling rules 

According to American 

Academy of paediatrics, 

juice drinks in general 

contain between 10% 

and 99% juice and added 

sweeteners, flavours, and 

sometimes fortifiers, such 

as vitamin C or calcium. 

These ingredients they 

say must be listed on the 

label, according to FDA 

regulations. 

According to FDA, unless 

a beverage is 100% 

juice, companies are not 

allowed to refer to it as 

a juice without jumping 

through some other 

hoops. 

If a drink is diluted to 

less than “100% juice,” 

the FDA’s rules stipulate 

that the word “juice” must 

be qualified with an additional 

term like “beverage,” 

“drink,” or “cocktail.” 

Conclusion 

Consumers are advised 

to educate themselves 

with facts by reading the 

nutrition facts label for 

each of the products before 

purchase or stick to 

homemade juice to be 

certain the product is 

made from 100percent 

fruit juice. 

2001 

The American Academy of paediatrics, said juice 

drinks in general contain between 10% and 

99% juice and added sweeteners, flavours, and 

sometimes fortifiers. These ingredients they must 

be listed on the label. 


A research conducted by Michigan State University 

extension on ‘fruit juice’ revealed that a 

lengthy list of ingredients is another clue that a 

product is not 100 percent fruit juice, but rather 

a fruit flavoured drink or fruit juice blend. 


Dyets Inc, a diet research firm conducted 

a research to squeeze facts from fiction 

about 100% fruit juice. 

100% 

The only way to confirm if the fruit juice is 

100 percent pure is to read the ingredient list. 

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