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C M Y K<br />
BRENT CRUDE<br />
GOLD PRICE<br />
COCOA PRICE<br />
MARKETS AND COMMODITIES MONITOR POWER GENERATION 24/03/15 Money<br />
US $ 67.98<br />
BDC NSE Close FMDQ Close Peak<br />
4,044.6mw<br />
$ 1,215.40<br />
USD 220<br />
POUND 338<br />
+92.81<br />
–0.51 Lowest<br />
3,334.5mw<br />
$ 3,059.00 EURO 245 34,208.30 $/N197.67 Collapse<br />
Nill<br />
Insurance can help fund befitting<br />
funerals for one’s parents<br />
P. 38<br />
NEWS YOU CAN TRUST I ** MONDAY 18 MAY 2015 I VOL. 13, NO 97 I NGN300<br />
FG to grant incentives to<br />
embedded power operators<br />
OLUSOLA BELLO<br />
The Federal Government<br />
favours granting<br />
incentives to the<br />
operators of embedded<br />
power generation<br />
in the country, in order to<br />
encourage further investment<br />
in the sector.<br />
The incentives would come<br />
in the form of tax holidays and<br />
cost reflective tariff, with a committment<br />
to removing encumbrances<br />
in the system.<br />
Chinedu Nebo, minister<br />
of Power disclosed this on the<br />
sideline of the official commissioning<br />
of the Niger Delta<br />
Power Holding NDPHC/NIPP<br />
330/132/33kv Oke Aro Transmission<br />
Substation in Lagos on<br />
Thursday.<br />
The idea of embedded power<br />
is coming more into focus because<br />
it is much easier and proficient<br />
to do several 20 megawatts<br />
power stations than one 200<br />
megawatts unit which would<br />
take between three and five years<br />
to build, Nebo added.<br />
An added advantage is<br />
that the smaller units can be<br />
deployed within a year, he<br />
further said.<br />
Nebo observed that embedded<br />
generation is the fastest way<br />
to bring electricity to Nigerians,<br />
adding that there is a policy<br />
which gives that direction for the<br />
scheme, and that what government<br />
is working on, is to provide<br />
incentives to investors because<br />
it is easier and more proficient<br />
to build small generating powers<br />
plants than big ones.<br />
Embedded power generation<br />
is a situation where a generator is<br />
directly connected to the distribution<br />
network. It is also a useful<br />
means of dedicating power<br />
to state and local government<br />
eligible customers and others.<br />
The parties involved would<br />
have to agree on a tariff to be<br />
paid, as distinct from the official<br />
electricity tariff.<br />
It would provide reliable<br />
supply of energy, critical for viable<br />
industrial activity. It would<br />
also minimise line losses and<br />
voltage sag, as closeness to load<br />
results in more efficient power<br />
transmission.<br />
Other qualities of embedded<br />
generation include substitute<br />
for main supply, source<br />
of power in areas without grid<br />
supply, and backup standby<br />
generation which ensures<br />
regular supply and provision<br />
Continues on page 4<br />
L-R: Uyi Akpata, senior country partner, PricewaterhouseCoopers; Mike Ikpoki, chief executive officer, MTN Nigeria,<br />
and Udom Inoyo, executive director, ExxonMobil, at the MTN Golf Tournament 2015 which was held at the Lakowe Golf<br />
course in Lagos at the weekend.<br />
BPP saves N99.192bn from contract awards in 2014<br />
ELIZABETH ARCHIBONG<br />
The nation’s procurement<br />
system saved N99.192<br />
billion from contracts<br />
awarded in 2014.<br />
The savings were from 229<br />
requests from 21 ministries,<br />
departments and agencies. The<br />
total requests were 298.<br />
This is contained in the latest<br />
reports of the Bureau for<br />
Public Procurement (BPP)) in<br />
which the agency noted that it<br />
certified contracts worth N1.409<br />
trillion for the 21 MDAs. Only<br />
the request by the Office of the<br />
Auditor-General of the Federation<br />
(OAGF) was endorsed with<br />
cuts.<br />
In 2013, the BPP made<br />
N57.951 billion in savings from<br />
contracts awarded to different<br />
sectors of the federation and<br />
gave certificate of no objections<br />
for contracts worth N1.118 trillion.<br />
The capital budget for the<br />
year 2014 was pegged at N1.119<br />
trillion, the disparity in the figure<br />
approved had been explained by<br />
Emeka Ezeh, director-general<br />
of the BPP, to include running<br />
projects.<br />
However, the amount saved<br />
from the requests made by different<br />
agencies of the federation<br />
in 2014 can be ploughed back<br />
into other parts of the economy.<br />
According to the Bureau’s<br />
2014 annual report obtained by<br />
our correspondent, of the savings<br />
made, the highest amount<br />
was recorded from the Federal<br />
Capital Territory Administration,<br />
a whopping N1.8 billion.<br />
The figure was saved from a<br />
request of N133.5 billion made<br />
by the administration for 39 projects,<br />
of which 35 were approved.<br />
The Bureau also saved the<br />
sum of N817.8 million from the<br />
N10.2 billion worth of contract<br />
requested by the Ministry of<br />
Environment for three projects.<br />
A total of N3.9 million was<br />
saved from the Ministry of<br />
Trade and Investment from the<br />
N480.4 million requested for<br />
two projects.<br />
The sum of N2.2 billion was<br />
saved from N20.7 billion re-<br />
Continues on page 4<br />
Insurers Q1 earnings<br />
dip over non-renewal<br />
of FG group life<br />
insurance<br />
MODESTUS ANAESORONYE<br />
Insurance companies’ first<br />
quarter 2015 earnings have<br />
fallen short of projection,<br />
reflecting a tough business environment<br />
and the impact of<br />
the country’s recently concluded<br />
general elections, which slowed<br />
economic activity and created<br />
uncertainty in the business environment,<br />
BusinessDay investigations<br />
show.<br />
The insurance sector in Nigeria<br />
contributes barely 0.65<br />
percent to GDP and less than 1<br />
percent in penetration, making<br />
it the third largest in Africa with<br />
premium size of about N300<br />
billion as at the end of the 2014<br />
financial year.<br />
Analysts who spoke to BusinessDay<br />
over the poor outing of<br />
most insurance companies in<br />
their first quarter results, said the<br />
non-renewal of the Federal Government’s<br />
group life insurance<br />
and police insurance scheme<br />
in the first quarter, significantly<br />
affected the premium size of<br />
companies and the industry.<br />
The Federal Government’s<br />
group life insurance and the<br />
police insurance scheme account<br />
for nearly 10 percent of life<br />
insurance companies’ annual<br />
premium, and amounted to N9<br />
billion in the 2013 financial year,<br />
with the FG employee scheme<br />
accounting for N5.7 billion and<br />
police scheme N3.7 billion.<br />
As at April 30, 2015, twenty-six<br />
insurance companies out of 49<br />
Inside<br />
Continues on page 4<br />
News 6<br />
Comment 10<br />
Editorial 12<br />
The Economist 14<br />
Business Intelligence 28<br />
Start-Up Digest 31<br />
City File 36<br />
Money 38<br />
Real Sector Watch 48
2<br />
Monday 18 May 2015
Monday 18 May 2015<br />
3
Monday 18 May 2015<br />
4 BUSINESS DAY<br />
NEWS<br />
Insurers Q1 earnings dip over non-renewal of...<br />
Continued from page 1<br />
registered firms had submitted<br />
their first quarter 2015 accounts<br />
to the National Insurance<br />
Commission (NAICOM),<br />
which reflected low premium<br />
as a result of poor business environment<br />
during the review<br />
period, when compared with<br />
the same period in 2014.<br />
An insurance CEO who<br />
preferred anonymity said no<br />
insurance company would<br />
meet its first quarter projection<br />
this yeas, as a result of<br />
poor business environment<br />
since the beginning of the year.<br />
“The postponement of the<br />
elections affected us most,<br />
because that was the peak of<br />
insurance renewal for the current<br />
year.”<br />
He added, “as soon as the<br />
elections were postponed<br />
many clients, both private<br />
and corporate, withdrew their<br />
interest and had to wait to see<br />
the outcome of the elections,<br />
and that affected our performance<br />
seriously.”<br />
The CEO, however said<br />
normalcy was returning to<br />
the business following the<br />
successful and peaceful conduct<br />
of the general elections,<br />
adding that the NNPC had<br />
just renewed its group life and<br />
consolidated insurance assets<br />
this quarter.<br />
“We are beginning to see<br />
business renewals now from<br />
individual and corporate clients<br />
and we hope we recover<br />
in the second quarter, to enable<br />
us meet our projection<br />
for the year.<br />
The Federal Government,<br />
through its consultant broker,<br />
had late December, issued<br />
credit notes to insurance companies<br />
for its employees group<br />
life insurance for 2015, but had<br />
to withdraw them five days<br />
later when it became clear that<br />
government was not going to<br />
release money for premium<br />
payment at that time.<br />
This however worsened<br />
when the political environment<br />
was heated up over electioneering,<br />
until now that a<br />
new government is coming in.<br />
Tosin Runsewe, chief client<br />
officer, Mansard Insurance<br />
plc, had earlier in the year,<br />
expressed concern over declining<br />
government revenue<br />
over falling oil prices and depreciation<br />
of the naira, which<br />
he observed might affect premium<br />
income of insurance<br />
companies.<br />
Also, Bola Temewo, president,<br />
Chartered Insurance<br />
Institute of Nigeria said there<br />
was no doubt that businesses<br />
had been facing hard times,<br />
particularly as the economy<br />
faced difficult times as result<br />
of dwindling oil prices, falling<br />
government revenues and<br />
depreciating value of the naira.<br />
L-R: Victor Onyenkpa, partner & head, tax regulatory and people services, KPMG; Gabriel Foluso Fasoto, past president,<br />
The Chartered Institute of Taxation of Nigeria (CITN); Mark Anthony Dike, president; James Kayode Naiyeju, past president,<br />
and Taiwo Oyedele, partner, tax & regulatory services, PwC, at the ongoing 17th annual tax conference with the theme<br />
‘Inclusive Economic Growth and Sustainable Development: Fiscal Imperatives, Prospects and Challenges’ in Abuja.<br />
Pic by Olawale Amoo<br />
FG to grant incentives to embedded power...<br />
Continued from page 1<br />
of ancillary services such as<br />
voltage or frequency control.<br />
According to the minister,<br />
embedded generation is the<br />
key, and the commission has<br />
been directed by government<br />
to do all that is necessary to<br />
make the scheme work.<br />
Commenting on the importance<br />
of the commissioned<br />
transmission substation, Nebo<br />
said: “ The problem we always<br />
have is because we lack transmission<br />
infrastructure, there<br />
is so much congestion in the<br />
Lagos line”.<br />
He said it was necessary to<br />
expand capacity and create redundancy,<br />
so that current and<br />
voltage coming to Lagos would<br />
always be stable and reliable.<br />
“This gives relief to Ikeja<br />
West substation and makes<br />
it easier for very good quality<br />
power to get around to consumers”,<br />
he said.<br />
Vice President, Namadi<br />
Sambo who also is the chairman,<br />
board of directors of the<br />
Niger Delta Power Holding<br />
Company, said he was impressed<br />
by the gigantic power<br />
transmission infrastructure,<br />
Oke-Aro 330/132/33kV which<br />
also has a distribution leg for<br />
the benefit of the two states.<br />
Sambo further said : “Here<br />
in Oke- Aro today, we are witnessing<br />
another great feat of<br />
this administration in power<br />
infrastructure capacity expansion<br />
to boost economic and<br />
industrial development of the<br />
country.<br />
In Lagos, the two distribution<br />
companies.i.e Ikeja Electricity<br />
Distribution Company<br />
and Eko Electricity Distribution<br />
Company both accounted<br />
for over 40% of all power consumption<br />
in Nigeria. ”<br />
This according to him is<br />
understandable from the fact<br />
that Lagos, which used to be<br />
our political capital before the<br />
advent of Abuja, is still Nigeria’s<br />
commercial and industrial<br />
capital hub with a large<br />
concentration of industries<br />
located in the state and the<br />
adjoining Ogun state.<br />
“Prior to the advent of Oke<br />
Aro substation, there were only<br />
3nos 330/132/33kV substations<br />
in Lagos. One of these three,is<br />
Ikeja West 330/132/33kV Substation<br />
which was the major<br />
marshalling point for all power<br />
plant that flows its generation<br />
into Lagos, this development<br />
which had thrown the state<br />
into a state of great congestion<br />
with limited space for<br />
safe expansion of capacity for<br />
increased flows into Lagos<br />
and environs. All the 330kV<br />
power lines from the Benin<br />
and Oshogbo 330kV hubs of<br />
the national grid - which were<br />
also serving as evacuation lines<br />
for NIPP new power plants at<br />
Omotosho as well as Olorunsogo,<br />
terminated there. Even<br />
330kV evacuation lines for<br />
older major power plants such<br />
as Egbin in Lagos also terminated<br />
at Ikeja West”.<br />
BPP saves N99.192bn from contract awards...<br />
Continued from page 1<br />
quests made by the Ministry of<br />
Police Affairs for four projects.<br />
Out of the N16.3 billion worth<br />
of contracts requested by the<br />
Ministry of Agriculture for nine<br />
projects, N2.7 billion was saved<br />
and seven projects approved.<br />
The Ministry of Transport<br />
made requests for N44.9 billion<br />
for 19 projects and savings of<br />
N2.044 billion was made from<br />
the requests. A total of N1.2 billion<br />
was saved from a request<br />
of N20.7 billion made by the<br />
Ministry of Water Resources for<br />
seven projects.<br />
The BPP also saved N257.3<br />
million from the Ministry of<br />
Women Affairs,from request of<br />
N816.9 million for two projects.<br />
Also N69 billion was saved from<br />
the Ministry of Works, from requests<br />
of N741.4 billion made<br />
for 47 projects, out of which 32<br />
were approved.<br />
The sum of N8.1 billion was<br />
saved from the Ministry of Niger<br />
Delta Affairs from the N111.6<br />
billion request made for 19<br />
projects.<br />
From the Ministry of Aviation,<br />
savings of N510.59 million were<br />
made from requests for N4.6 billion<br />
made for 18 projects, out of<br />
which 13 were approved.<br />
Also N333.5 million was saved<br />
from requests for N4.8 billion<br />
made for seven projects, while<br />
N1.041 billion was saved from<br />
requests of N14.3 billion made<br />
by the Ministry of Education for<br />
26 projects, of which 16 were<br />
approved.<br />
The finance ministry made a<br />
request for N151.323 billion for<br />
15 projects and N1.3 billion was<br />
saved. Furthermore, N64.4 million<br />
was saved from a request<br />
for N234.7 million made for ten<br />
projects by the Ministry of the<br />
Interior. Also,N26.480 million<br />
was saved from a N1.651 billion<br />
request made by the Ministry of<br />
Labour and productivity for two<br />
projects.<br />
The sum of N1.7 billion was<br />
saved from the Ministry of Petroleum<br />
from a request for N52.8<br />
billion made for eight projects,<br />
while N3.8 billion was saved<br />
from N49.3 billion requested<br />
by the power ministry for 53<br />
projects, out of which 21 were<br />
approved.<br />
N71.5 million was saved<br />
from the N645.5 million request<br />
made by the Ministry of Special<br />
Duties for five projects, while<br />
N1.1billion was saved from the<br />
N17.6 billion request made by<br />
the Office of the Secretary to the<br />
Government of the Federation<br />
for 12 projects.<br />
The sum of N1.1 billion was<br />
saved from the N11.4 billion<br />
requested by the Presidency for<br />
projects, out of which 39 were<br />
approved.<br />
Meanwhile, the Federal Executive<br />
Council in 2014 approved<br />
the award of a total of<br />
104 contracts to 12 sectors of<br />
the economy in the sum of N1.1<br />
trillion.<br />
The Ministry of Works had<br />
the highest number of contracts<br />
(30), followed by the<br />
Federal Capital Territory (16)<br />
while the federal ministries of<br />
environment, commerce and<br />
petroleum resources had one<br />
contract each.<br />
STANBIC IBTC MUTUAL FUNDS<br />
08/05/2015<br />
Stanbic IBTC Nigeria Equity Fund<br />
Offer price N8,957.42<br />
Bid price N 8,806.01<br />
Stanbic IBTC Ethical Fund<br />
Offer price N0.91<br />
Bid price N0.90<br />
Stanbic IBTC Guaranteed<br />
Investment Fund<br />
Offer price N158.24<br />
Bid price N158.09<br />
Stanbic IBTC Balanced Fund<br />
Offer price<br />
Bid price<br />
Stanbic IBTC Bond Fund<br />
N1,764.05<br />
N1,748.80<br />
Offer price N134.41<br />
Bid price N134.41<br />
Annualized Return 9.99%<br />
Stanbic IBTC Iman Fund<br />
Offer price N152.19<br />
Bid price N149.78<br />
Stanbic IBTC ETF 30<br />
Closing NAV Per Unit N106.71<br />
Stanbic IBTC Money Market Fund<br />
Yield 3.37% 06/05/15<br />
www.stanbicibtcassetmanagement.com<br />
“Past performance is not an<br />
Te1: +234 1 2801266<br />
indication of future performance”
Monday 18 May 2015<br />
5
6 BUSINESS DAY<br />
Monday 18 May 2015<br />
NEWS<br />
MPC: Analysts see major policy rates remaining unchanged<br />
PDP says it won’t change identity<br />
…predicts further devaluation of naira after installation of new administration<br />
HOPE MOSES-ASHIKE<br />
As the Monetary<br />
Policy Committee<br />
(MPC) begins<br />
its meeting<br />
today to end<br />
tomorrow, analysts expect<br />
major policy rates to remain<br />
unchanged while predicting<br />
further devaluation of naira<br />
over time, after the installation<br />
of new administration.<br />
In the plethora of issues<br />
to be considered, the recent<br />
pressure on exchange rate,<br />
declining external reserves,<br />
rising price level and slowing<br />
domestic economic growth<br />
will likely take the centre<br />
stage, Ayodeji Ebo, head,<br />
investment research and his<br />
team of analysts at Afrinvest<br />
said in a report.<br />
Consequently, they voted<br />
for the MPC to retain MPR<br />
at 13%, public sector CRR at<br />
75%, private sector CRR at<br />
AMAKA ANAGOR<br />
20%, liquidity ratio at 30%,<br />
NOP at 0.5% and maintain<br />
status quo on exchange rate<br />
policy to allow the incoming<br />
administration settle<br />
down before grappling with<br />
any major monetary policy<br />
issue.<br />
The committee in the immediate<br />
past meetings has<br />
taken certain bold policy decisions<br />
relating to currency<br />
devaluation, Net Open Position<br />
(NOP) and the Monetary<br />
Policy Rate (MPR) in the<br />
light of daunting fiscal and<br />
monetary policy challenges.<br />
The RDAS (Retail Dutch<br />
Auction System) was closed<br />
in February 2015 while all<br />
demand for FX was directed<br />
to the interbank market even<br />
as the CBN continues to intervene<br />
intermittently at the<br />
interbank market to moderate<br />
volatility swings.<br />
The analysts noted that<br />
since the last MPC meeting<br />
that ended on March 24,<br />
2015, performance of the<br />
Nigerian financial market<br />
has been mixed with a divide<br />
between the period before<br />
and after the elections that<br />
was held on March 28, 2015.<br />
In the fixed income market,<br />
average bond yields rose<br />
to 15.4% before the elections.<br />
However, with the successful<br />
conduct and the attendant<br />
political risk moderation,<br />
bond yields currently trade<br />
on an average of 14.5 percent.<br />
The Afrinvest report indicated<br />
that financial system<br />
liquidity level has been on<br />
an increasing trend between<br />
the last MPC meeting and<br />
now. In March, average liquidity<br />
was at N207.9 billion<br />
while it declined to N233.2<br />
billion in April. Irrespective<br />
of the sustained hawkish<br />
policy stance of the CBN,<br />
liquidity level has been quite<br />
high in May with an average<br />
balance of N477.6 billion.<br />
Overnight and Open Buy<br />
Back (OBB) rates continue<br />
the usual oscillatory trajectory<br />
in response to the prevailing<br />
liquidity levels.<br />
According to the report,<br />
the foreign exchange rate<br />
at the interbank market has<br />
been trading at a tight band<br />
-- between N199.00/US$1.00<br />
and N199.75/US$1.00 - since<br />
March 2015. This is consequent<br />
on the elimination<br />
of RDAS window and the<br />
CBN’s intermittent interventions<br />
which shut out liquidity<br />
in the market even as<br />
demand remains in excess.<br />
The analysts believe the<br />
induced stability in the FX<br />
market may not be sustainable<br />
given the level of external<br />
reserves (US$29.7 billion)<br />
and reduced prospect<br />
for accrual with low level of<br />
crude oil prices. The external<br />
reserves which has fallen<br />
13.9% YTD can barely cover<br />
six months of import.<br />
L-R: Chidi Agbapu, co-CEO, Planet Capital Limited; Nnamdi J. Okonkwo, managing director, Fidelity Bank plc; Christopher<br />
Ezeh, chairman, Fidelity Bank plc and Tony Anonyai, co-CEO, Planet Capital, at the signing ceremony held recently for<br />
the offer for subscription of N30bn Fixed Rate Bonds issued by Fidelity Bank plc. Planet Capital acted as lead issuing<br />
house to the offer.<br />
Investor flags-off full construction of $729m marine, land-side infrastructure of Lekki Port<br />
Lekki Port LFTZ Enterprise<br />
(LPLE) has<br />
issued notice-toproceed<br />
to its engineering,<br />
procurement and<br />
construction (EPC) contractor,<br />
China Harbour Engineering<br />
LFTZ Enterprise, to<br />
commence full construction<br />
activities for Lekki Deep Seaport<br />
located at Lagos Free<br />
Trade Zone (LFTZ) in Ibeju-<br />
Lekki area of Lagos State.<br />
Lekki port, which will be<br />
the deepest seaport in sub-<br />
Sahara Africa with a draft of<br />
16.5 metres, is scheduled to<br />
become operational in 2019.<br />
“This is a major milestone<br />
on the project and<br />
it marks the beginning of<br />
the 41-month construction<br />
period for the largest maritime<br />
project in the country<br />
and we are flagging off the<br />
construction today by releasing<br />
an advance payment<br />
of $58.5 million to the contractor,”<br />
said Haresh Aswani,<br />
managing director of Lekki<br />
Port weekend in Lagos, during<br />
the notice-to-proceed<br />
ceremony.<br />
According to him, the<br />
total contract value for<br />
construction of all marine<br />
and land-side infrastructure<br />
for Lekki Port stands<br />
at USD$792 million while<br />
the total cost of this phase<br />
of the project is estimated at<br />
USD$1.65 billion.<br />
Aswani, who stated<br />
that the port facility when<br />
completed would have the<br />
capacity to handle postpanamax<br />
container vessels<br />
of about 10,000 Twenty<br />
Equivalent Units (TEU),<br />
added that the port will commence<br />
operations with annual<br />
throughput capacity<br />
of 1.5 million TEU, which is<br />
expected to rise to 2.7 million<br />
TEU.<br />
“The port will be<br />
equipped to handle around<br />
16.7 million metric tons of<br />
liquid cargo and 4.0 million<br />
metric tons of dry bulk cargo<br />
annually”, he stated.<br />
Stating that the completion<br />
of Lekki Port would<br />
help in solving the longstanding<br />
congestion problem<br />
currently existing at<br />
Apapa ports, Aswani noted<br />
that it will help in creating an<br />
enabling environment and<br />
spur massive investments<br />
along the free trade zone<br />
corridor including the entire<br />
Nigerian economy.<br />
He further disclosed that<br />
the port will generate direct<br />
and induced employment<br />
for about 170,000 persons<br />
and will have an economic<br />
impact of $361 billion over<br />
the concession period.<br />
While pledging its support<br />
for the project, Sanusi<br />
Lamido Ado Bayero, managing<br />
director of the Nigerian<br />
Ports Authority (NPA), who<br />
described the investment<br />
in Lekki Port as the much<br />
needed investment in the<br />
nation’s economy, stated<br />
that it will not only help in<br />
decongesting Apapa but will<br />
also create huge employment<br />
in the country.<br />
In a move aimed at encouraging<br />
more people<br />
to register in the statewide<br />
exercise, the Lagos<br />
State Residents’ Registration<br />
Agency (LASRRA) has<br />
begun mass distribution<br />
of residents’ cards to about<br />
three million residents so far<br />
registered since the exercise<br />
commenced more than one<br />
year ago.<br />
Olayinka Fashola, the<br />
general manager of LASR-<br />
RA, told journalists at the<br />
weekend that the distribution<br />
starting with the state<br />
civil servants was expected<br />
to take care of fourteen thousand<br />
workers and proceed in<br />
phases.<br />
“Before anyone comes<br />
up to collect his permanent<br />
resident card (PRC), he/she<br />
RAZAQ AYINLA, Abeokuta<br />
Conscious of environmental<br />
hazards<br />
inherent in<br />
blasting and mining<br />
limestone around the<br />
limestone belts in Ewekoro<br />
Local Government Area of<br />
Ogun State, Lafarge WAPCO<br />
Operations, an operational<br />
business of Lafarge Africa,<br />
has begun construction of<br />
housing units for the relocation<br />
of about 1,000 people in<br />
its host community.<br />
The construction of<br />
housing units (first phase)<br />
and other agreed facilities<br />
for the entire people of Oke-<br />
Oko, Sekoni, one of Lafarge<br />
WAPCO’s host communities<br />
OWEDE AGBAJILEKE, Abuja<br />
As the ruling People’s<br />
Democratic Party<br />
(PDP) is set to assume<br />
the new status<br />
of an opposition party<br />
come May 29, the party has<br />
ruled out changing its identity.<br />
To this end, the party<br />
has insisted that it is still the<br />
truly national political party<br />
with strength and spread to<br />
regain pre-eminence.<br />
It, therefore, stated that<br />
it is not contemplating a<br />
change of identity, noting<br />
that the unassailable vision<br />
of its founding fathers remains<br />
timeless in building<br />
a Nigeria of the collective<br />
wish and aspirations of all<br />
citizens.<br />
A statement by Olisa<br />
Metuh, the national publicity<br />
secretary of the PDP,<br />
on Sunday said that having<br />
been the guardian of Nigerian<br />
democracy for 16 years<br />
during which it nurtured<br />
and blossomed democratic<br />
governance as well as etched<br />
its name in the pantheon of<br />
good governance “the PDP<br />
will not in the circumstance<br />
of ephemeral loss of power<br />
change its identity or its<br />
time-honoured characteristic<br />
values”.<br />
The party said though it<br />
is resolutely committed to its<br />
present structures, it would<br />
not close its doors to other<br />
political parties wishing to<br />
be assimilated into its fold as<br />
the best vehicle for the fulfillment<br />
of political aspirations<br />
of all Nigerians regardless of<br />
tribe and religion.<br />
“We have a name, tradition<br />
and values. 16 fruitful<br />
years as the guardian of<br />
Nigerian democracy cannot<br />
be nullified by the reason of<br />
temporary setback. We shall<br />
rise beyond all and regain<br />
our rhythm. Our colour remains<br />
green, white and red<br />
and power still belongs to<br />
the people. And to assert that<br />
we are proud of the successes<br />
of our successive leaders<br />
in taking Nigeria to its present<br />
height is an understatement,<br />
which the passage of<br />
the next four years under the<br />
APC will certainly prove”, the<br />
party said.<br />
It added that the fact that<br />
the PDP is going into opposition<br />
would not mitigate<br />
its ability as the flagship of<br />
democracy, maintaining<br />
that it will soar higher in<br />
proving credible alternative<br />
as a constructive opposition.<br />
Lagos begins mass distribution of residents’ cards<br />
would have been sent a short<br />
message to that effect. And<br />
in the message, such person<br />
will be told where to go for<br />
the collection of the card.<br />
And this marks the expiration<br />
of the registration life<br />
circle.<br />
“And for today, we will be<br />
distributing cards mainly to<br />
the civil servants. And that<br />
was why we have decided to<br />
organise it here. At the end<br />
of the day, we will be moving<br />
to the auditorium within the<br />
secretariat, also to distribute<br />
the cards. And this will elapse<br />
at the end of this month.<br />
“Beginning from June,<br />
the cards will be transferred<br />
to the local councils. This<br />
we believe will bring the<br />
card closer to their owners,”<br />
Fashola said on Friday.<br />
Lafarge begins housing units<br />
construction for host community in Ogun<br />
in Ewekoro on 60 acres of<br />
land, was conceived by the<br />
cement company to relocate<br />
the people to a more<br />
environment-friendly place<br />
where blasting and mining<br />
of limestone would not affect<br />
them.<br />
Speaking at the inauguration<br />
of housing facilities<br />
held at new Oke-Oko,<br />
Sekoni in Ewekoro recently,<br />
Adepeju Adebajo, managing<br />
director, Lafarge Africa,<br />
disclosed that the relocation<br />
of the people and their<br />
deities was initiated by the<br />
management to secure its<br />
host community from the<br />
environmental hazards of<br />
limestone blasting and mining.
Monday 18 May 2015<br />
7
8<br />
Monday 18 May 2015
Monday 18 May 2015<br />
9
Monday 18 May 2015<br />
10 BUSINESS DAY<br />
COMMENT<br />
comment is free<br />
Send 800word comments to comment@businessdayonline.com<br />
IN THE NATION<br />
KAYODE SOREMEKUN<br />
Prof Soremekun, a previous Ford<br />
Foundation, Fulbright and Rockefeller<br />
scholar, is a Visiting Member of the<br />
Editorial Board, BusinessDay.<br />
GREGORY KRONSTEN<br />
Gregory Kronsten, Associate Director<br />
Head, Macroeconomic & Fixed<br />
Income Research, FBN Capital<br />
We still have to contain<br />
ourselves for ten days<br />
before the formal<br />
handover to the new<br />
administration, and thereafter for<br />
the first indications of fiscal policy<br />
and for ministerial appointments.<br />
This is the downside of the US-style<br />
lengthy period of transition. We<br />
will assume: that the APC has no<br />
issues with the Fiscal Responsibility<br />
Act of 2007; that therefore it is<br />
not going to indulge in a borrowing<br />
spree to meet its spending commitments;<br />
and that it will not increase<br />
direct tax rates on individuals or<br />
companies outside the oil sector.<br />
Gross federally collectible revenue<br />
amounted to N10.19trn in 2014<br />
(vs N10.89trn in the year’s budget),<br />
and is projected at N9.78trn in<br />
the 2015 budget approved by the<br />
National Assembly (but awaiting<br />
the presidential sign-off). The APC<br />
has a revenue gap to fill before its<br />
manifesto pledges to low-income<br />
Nigerians.<br />
The reaper in the tower<br />
spective on History. As scholars,<br />
what they encountered as History<br />
was a condescending attitude on<br />
the part of western scholars. According<br />
to such western scholars,<br />
Africa had no history before the<br />
coming of the white man. But<br />
these two scholars along with<br />
their peers said no! Therefore,<br />
they brought into play a novel<br />
historiography which, among<br />
other things, stressed oral history.<br />
In the process, a new corpus of<br />
knowledge was built up and the<br />
Trevor-Ropers of this world were<br />
given a much more comprehensive<br />
insight and education about<br />
the notions and methods of African<br />
History.<br />
Specifically, Ajayi edited, with<br />
lan Espie, A Thousand Years of<br />
West African History. In this work,<br />
Ajayi and his colleagues impressively<br />
demonstrated that an authentic<br />
African past existed before<br />
the Caucasians came calling. As<br />
regards Ayandele, it is apposite to<br />
recall his groundbreaking work,<br />
The Educated Elite and the Nigeria<br />
Society.<br />
In a rather interesting and<br />
revealing way, Ayandele showed<br />
up a unique situation in which<br />
the supposed dregs of society,<br />
who were taken away as slaves,<br />
eventually returned to the Nigerian<br />
space, with new skills and<br />
attitudes which enabled them to<br />
dominate the Nigerian society.<br />
He went on to demonstrate how<br />
education has in fact been used as<br />
a tool of exploitation of the Nigerian<br />
society, rather than as an instrument<br />
of emancipation. These thoughts<br />
could well have been uppermost in<br />
the mind of this historian who, after<br />
a thoughtful examination of the<br />
various sub-national groups in Cross<br />
River State, declared that this was an<br />
atomistic society that was perpetually<br />
at war with itself. In a Freudian<br />
way perhaps, Ayandele could have<br />
been speaking about the entire Nigerian<br />
social formation itself.<br />
Beyond the core indices of teaching<br />
and research in academia, these<br />
two historians also played prime<br />
roles in university management<br />
at the highest levels. Ayandele’s<br />
pioneering role at the University<br />
of Calabar will continue to be remembered<br />
and cherished by all the<br />
stakeholders of higher education<br />
in Nigeria. As an Ogbomoso man,<br />
he was certainly not in his own primordial<br />
territory. But times have<br />
changed and not necessarily for<br />
the better. Universities have since<br />
become mere ethnic enclaves in<br />
which the post of vice-chancellor<br />
is reserved for the son of the soil.<br />
It is arguable here that this<br />
ethnic flavour or sheer ignorance<br />
could well be responsible for the<br />
rather muted response to the passage<br />
of another intellectual icon,<br />
Professor Nwokolo. Nwokolo was<br />
a Professor of Medicine at the<br />
University of Nigeria, Nsukka. On<br />
reading the obituaries of this accomplished<br />
academic, it was evident<br />
that in the medical profession,<br />
Nwokolo served the entire country.<br />
This was clearly evident from the<br />
advertisement put out by the Nigerian<br />
National Post-Graduate Medical<br />
College. Hundreds of Nigerian<br />
medical doctors across the country<br />
benefitted from his tutelage and<br />
forensic profile as a lecturer and<br />
examiner in the area of Medicine.<br />
News also filtered in that another<br />
Nigerian academic, a sociologist,<br />
Professor Dayo Akeredolu-Ale,<br />
also passed on. In these times,<br />
entrepreneurship happens to be<br />
the buzz-word. But a measure of<br />
amnesia exists here. It is hardly<br />
remembered that the scholarship<br />
on entrepreneurship was largely<br />
pioneered by Akeredolu-Ale.<br />
Perhaps the most numbing dimension<br />
of this narrative relates to<br />
the demise of Professor Adekunle<br />
Amuwo. Compared to the other<br />
Understandably, we<br />
have all been consumed<br />
by the elections<br />
and their aftermath.<br />
In the process,<br />
we have lost sight of other news<br />
items which ought to engage our attention.<br />
My specific reference here<br />
is to the spate of deaths that has<br />
besieged the Nigerian university<br />
system. The reaper has certainly<br />
been busy in the Ivory Tower. The<br />
departed vessels of knowledge<br />
include Professors Ade Ajayi, Emmanuel<br />
Ayandele, Nwokolo, Dayo<br />
Akeredolu-Ale and, much more<br />
recently, Adekunle Amuwo.<br />
In various ways, these individuals<br />
served meritoriously in our first<br />
generation universities. The first<br />
two, i.e., Ajayi and Ayandele, were<br />
leading members of the Ibadan<br />
School of History. It was indeed a<br />
School, because these two historians<br />
along with their contemporaries<br />
espoused an Afro-centric perprofessors,<br />
he was relatively young.<br />
He died rather early at the age of<br />
59. Since we are in the same generation,<br />
I am more familiar with<br />
him. Kunle, as he was popularly<br />
known in academic circles, was<br />
vibrant, full of energy, and earnest<br />
about the Nigerian condition or<br />
non-condition! The latter variable<br />
could have been responsible for his<br />
early demise.<br />
Kunle Amuwo virtually left the<br />
University of Ibadan in a huff. He<br />
subsequently moved on to a variety<br />
of academic jobs in Southern<br />
Africa before settling in at the<br />
Brussels-based, International<br />
Crisis Group (ICG) from where<br />
he headed to Covenant University<br />
(CU), Ota. It was in CU that he died<br />
a week ago. He was a worthy intellectual<br />
sparring partner. Certainly,<br />
the intellectual community within<br />
and outside Nigeria will miss this<br />
great scholar.<br />
Taken together, Professors<br />
Ajayi, Ayandele, Nwokolo, Akeredolu-Ale<br />
and Amuwo in their<br />
respective ways nurtured the tree<br />
of knowledge in Nigeria and the<br />
wider world. May their souls find<br />
peace in the beyond and may the<br />
good Lord in his infinite mercies<br />
comfort and protect their primary<br />
and secondary relatives.<br />
Send reactions to:<br />
comment@businessdayonline.com<br />
Ten days to go, and then some fiscal colour to the pledges of change<br />
We will step around the minefield<br />
that is the payment by the<br />
NNPC of its dues to the federation<br />
account. This is dangerous territory.<br />
The emir of Kano and former<br />
governor of the CBN, Sanusi<br />
Lamido Sanusi, has ensured that<br />
the subject remains topical with<br />
his measured contribution last<br />
Thursday to the Financial Times.<br />
Public relations people have<br />
suggested that the new administration<br />
produces a short audit of<br />
the NNPC’s finances soon after<br />
assuming office as a statement<br />
of intent.<br />
Another powerful message<br />
would be the removal of the<br />
remaining fuel subsidies. Local<br />
media sources report that<br />
employees of the Subsidy Reinvestment<br />
and Empowerment<br />
Programme (SURE-P) are being<br />
laid off. This would tell most observers<br />
that there will no longer be<br />
any subsides to reinvest. The 2015<br />
budget has N143bn for subsidy<br />
payments; even with deregulation,<br />
this allocation is too low<br />
because of payments arrears to<br />
the marketing companies. One<br />
broader point is that deregulation<br />
would be, at best, fiscally<br />
neutral because the FGN would<br />
have to offer some palliatives in<br />
compensation so as to “sell” the<br />
idea to the public and avoid the<br />
about-turn forced upon the PDP<br />
government in January 2012.<br />
There is a bolder step involved,<br />
As scholars, what they<br />
encountered as History was<br />
a condescending attitude<br />
on the part of western<br />
scholars. According to such<br />
western scholars, Africa had<br />
no history before the coming<br />
of the white man. But<br />
these two scholars along<br />
with their peers said no<br />
too. The outgoing administration<br />
established SURE-P, stressing both<br />
its autonomy and the standing of<br />
its top officials. The underlying message<br />
was that Nigerians might have<br />
little faith in their elected government<br />
but that they could trust such a<br />
standalone body. The removal of the<br />
programme (and other comparable<br />
bodies) invites Nigerians to give the<br />
government and the public sector<br />
the benefit of the doubt.<br />
This is our personal take. Members<br />
of the Buhari camp have,<br />
however, given the impression that<br />
supervision and regulation across<br />
the economy will be enhanced. Government<br />
agencies could be merged<br />
but given sharper teeth, and standards<br />
of governance would improve<br />
in the process.<br />
The slide in the oil price and the<br />
failure of the FGN to build substantial<br />
fiscal buffers have highlighted<br />
the paucity of non-oil revenue<br />
collection, which totalled N3.4trn<br />
(gross) in 2014 or 3.8 per cent of<br />
GDP. Rather than increase direct<br />
tax rates, the new administration<br />
may focus on collection and the<br />
strengthening of the revenue agencies.<br />
Leaving aside the size of the<br />
informal sector, too few companies<br />
are paying their taxes. MTN Nigeria<br />
has said that its contributions across<br />
all tiers of government represent 10<br />
per cent of total non-oil collection.<br />
Broadening the base requires<br />
more and better paid staff but also<br />
a hearts and minds campaign. A<br />
former governor of the South African<br />
Reserve Bank told us that in<br />
his country contract awards in the<br />
public sector above a low threshold<br />
were conditional upon the receipt<br />
of a statement from the revenue<br />
services that the beneficiary was<br />
current with their tax obligations.<br />
Faced with the loss of contracts<br />
which are often the core of their<br />
business, the vast majority of<br />
companies would pay their taxes<br />
and obtain a bona fide certificate<br />
of compliance.<br />
On the cutting of wasteful expenditure,<br />
the outgoing government<br />
has already made savings by<br />
the elimination of ghost workers<br />
and pensioners, and by tighter<br />
procurement procedures. The APC<br />
in power is expected to prune the<br />
number of public agencies and<br />
implement the recommendations<br />
of the Oronsaye report. Changes in<br />
the law are required in many cases.<br />
Research by BusinessDay in December<br />
2014 found that senators<br />
receive the equivalent of US$2.1m<br />
annually including allowances. In<br />
a global context this does not look<br />
good, and Nigerians may have<br />
objections on value-for-money<br />
grounds. In this extreme case, the<br />
legislators themselves would have<br />
to agree to a change (reduction).<br />
Asset sales are another form of<br />
deficit financing, and have been<br />
little aired in crystal ball gazing<br />
beyond 28 May. We would value<br />
greater transparency. A recent<br />
CBN press release corrected a local<br />
media report on FGN spending in<br />
H2 2014 and noted that the deficit<br />
in the period was “financed mostly<br />
from privatization proceeds”. Some<br />
colour would have been welcome.<br />
As to possible sales, the Buhari<br />
camp has been quiet although the<br />
current CBN governor, Godwin<br />
Emefiele, has floated the possibility<br />
that the FGN sells some or all<br />
of the NNPC stake in the unincorporated<br />
joint ventures with the<br />
oil majors. Still on the oil sector,<br />
whenever the petroleum industry<br />
bill is passed in some form, the<br />
FGN could hold the first bidding<br />
round for new acreage since 2007<br />
and generate some signature bonuses<br />
for deficit financing.<br />
As we wait impatiently for the<br />
handover and the strands of the<br />
new fiscal policy, we would stress<br />
one constraint that receives little<br />
attention. If the APC is to deliver<br />
a good part of its pledges, it has<br />
to work closely with a productive<br />
assembly. For most of the past<br />
four years, the presidency and the<br />
majority in both houses belonged<br />
to the same party. The assembly’s<br />
agenda, however, was often driven<br />
by its institutional rather than its<br />
party political loyalties. This did<br />
not solely emerge in the annual toings<br />
and fro-ings over the budget.<br />
Send reactions to:<br />
comment@businessdayonline.com
Monday 18 May 2015<br />
comment is free<br />
Send 800word comments to comment@businessdayonline.com<br />
BUSINESS DAY<br />
Life after school – The sublime hot pursuit of excellence<br />
11<br />
COMMENT<br />
J.K RANDLE<br />
Randle is Chairman/Chief Executive JK<br />
Randle Professional Services<br />
Chartered Accountants.<br />
Let me make it perfectly<br />
clear at the outset that I<br />
make no claim whatever<br />
to any medical qualifications.<br />
It was my grandfather<br />
Dr. J.K. Randle who was one of<br />
our nation’s pioneer medical practitioners.<br />
I am a chartered accountant<br />
by profession and I cannot fail to<br />
recognize that my grandfather had to<br />
his credit scholarships and endowments<br />
which he bequeathed in 1928<br />
for the study of medicine. However,<br />
on the debit side was his insistence<br />
that all his children should study<br />
medicine or forfeit their inheritance!<br />
My father, J.K. Randle, opted out and<br />
I fully endorse his choice.<br />
All the same, I am most grateful to<br />
the Lagos Teaching Hospital for inviting<br />
me to deliver today’s lecture to<br />
the graduating students of: (i) School<br />
of Community Health Officers Training;<br />
(ii) School of Health Information<br />
Management; (iii) School of Medical<br />
Laboratory Sciences; (iv) School of<br />
Medical/Psychiatry Social Work; (v)<br />
School of Midwifery; (vi) School of<br />
Nursing; (vii) School of Post-Basic<br />
Nursing; and (viii) School of Basic<br />
Dental Nursing.<br />
About ten years ago I was similarly<br />
honoured to be invited to deliver<br />
the Oritsejolomi Thomas Memorial<br />
Lecture in honour of the first Provost<br />
of the College of Medicine/Medical<br />
Director of the Lagos Teaching<br />
Hospital. On that occasion I was<br />
not rewarded with a doctorate but<br />
I hope I shall fare better this time!<br />
Permit me to heartily congratulate<br />
the students who are graduating<br />
after acquiring vital skills and critical<br />
knowledge as well as having been<br />
found worthy in CHARACTER.<br />
However, it is not enough to commend<br />
the students. We must also<br />
acknowledge and applaud their<br />
teachers for their commitment and<br />
determination to do the medical<br />
profession proud (albeit at a somewhat<br />
subsidiary level) while at the<br />
same time rescuing our beloved<br />
nation from the crass ignorance of<br />
the vital role played by those whose<br />
destiny is to support the doctors,<br />
surgeons, pharmacists, opticians,<br />
etc who are the “generals” of the<br />
medical profession. My dentist is<br />
in the audience and he insists that<br />
I must add dentists to the exclusive<br />
list of angels or face his wrath at our<br />
next encounter as regards which he<br />
has confirmed my appointment for<br />
noon on Wednesday of next week. I<br />
bow to the dictates of self-preservation<br />
and I am ready to hail dentists<br />
as super-angels!<br />
At the risk of repeating what your<br />
remarkable teachers, lecturers and<br />
professors would already have told<br />
you, I must nevertheless remind you<br />
that the past is not the future. Hence,<br />
your focus should be on the future,<br />
not the past.<br />
It is not unlikely that your sojourn<br />
in the various schools under<br />
the umbrella and protection of<br />
Lagos Teaching Hospital would have<br />
provided you with a considerable<br />
measure of order, peace, and tranquillity<br />
in a secure (almost insular/insulated)<br />
environment. Now, as you venture<br />
into the world of harsh realities,<br />
you must craft a vision of the future<br />
you desire for your own self-fulfilment<br />
and actualize it by ensuring that it is<br />
driven by the right strategy which will<br />
inevitably involve making sacrifices<br />
now in order to reap a bountiful harvest<br />
later as you progress on the ladder<br />
of achievements and success. I must<br />
however warn that the competition is<br />
waiting to snare and frustrate you by<br />
dangling the temptation of settling<br />
for less than what you deserve. This is<br />
sometimes euphemistically ascribed<br />
to a new genre now known as “Stomach<br />
Infrastructure”. The first casualties<br />
of that fatal choice are morality and<br />
self-respect. After stomach infrastructure<br />
which is always a moving lowest<br />
Nigeria is too poor for our<br />
leaders to act like multibillionaires,<br />
and Nigeria<br />
is too rich for the people<br />
to be poor. When you<br />
seek public office, you<br />
seek it to serve and lead<br />
by example. You don’t<br />
seek public office to play<br />
lord over the people who<br />
voted you into office<br />
common denominator anyway,<br />
what would be left is a gaping hole of<br />
unfulfilled ambition and legitimate<br />
aspiration to make your own unique<br />
contribution to building a better nation<br />
where nobody is permanently<br />
oppressed, marginalized or violated<br />
on account of their ethnicity, religion<br />
or gender. Your teachers are entitled<br />
to believe that they have sufficiently<br />
equipped you to go beyond the limit<br />
and thereby surpass them. That is<br />
the best reward you can give them<br />
in appreciation of their diligence,<br />
resourcefulness and care.<br />
Perhaps, I should share with you<br />
the verdict recently delivered by<br />
the European Union [EU]. Michel<br />
Arion, the EU Ambassador and<br />
Head of Delegation to Nigeria and<br />
ECOWAS, was quoted as follows:<br />
“Nigeria is a rich country, but Nigerians<br />
are regrettably poor. It is a<br />
rich country that should not depend<br />
on aid from foreign donors. I think<br />
government at all levels in Nigeria<br />
should ponder. To really develop<br />
the Nigerian economy in a sustainable<br />
way, the core issue will be to<br />
redistribute social benefits through<br />
fiscal measures, particularly taxation<br />
and social measures, using safety<br />
nets. Strengthening the institutions<br />
is absolutely key in this regard. In<br />
the North, development indicators<br />
in the area are unacceptably worse.”<br />
We must accommodate the sanguine<br />
commentary of Yemi Adebowale:<br />
“Arion is absolutely right. We all<br />
know this. The EU Ambassador is<br />
not telling us anything new. We are<br />
all aware of the rich resources of this<br />
country. Unfortunately, corruption<br />
and inept leadership have made it<br />
impossible for this country to attain<br />
its full potentials. In the last 32 years,<br />
we have simply been moving round<br />
in a cycle (circle), from one inept<br />
administration to the other. I have<br />
my fears that we would most likely<br />
be doing the same thing in the next<br />
four years. The handwriting is already<br />
on the wall.”<br />
We should also create space for<br />
the intervention of newly elected<br />
senator, Ben Murray-Bruce: “Nigeria<br />
is too poor for our leaders to act like<br />
multi-billionaires, and Nigeria is too<br />
rich for the people to be poor. When<br />
you seek public office, you seek it to<br />
serve and lead by example. You don’t<br />
seek public office to play lord over the<br />
people who voted you into office. The<br />
leadership of Nigeria is consuming all<br />
the resources of our people and leaving<br />
the rest of us in abject poverty.”<br />
Before we close the circle, we<br />
should create room for the feisty<br />
avowal of Edwin Clark. I refer to the<br />
front page publication of Saturday<br />
Punch of April 13, 2015. Headline: “I<br />
WON’T DIE BECAUSE JONATHAN<br />
LOST ELECTION – Clark”.<br />
We are entitled to extract the<br />
right lessons from the observations<br />
of Clark, especially with regard to<br />
“Why should I die?” We must not be<br />
selfish. Rather we should expand the<br />
space sufficiently to accommodate a<br />
question that must be of particular<br />
interest to you all: “Why must patients<br />
die?” To my mind, the answer lies in<br />
the zeal with which we address the<br />
Sublime Hot Pursuit of Excellence.<br />
Send reactions to:<br />
comment@businessdayonline.com<br />
Britain embraces federalism...<br />
Continued from back page<br />
Clegg, resigned immediately.<br />
Both parties are now looking for new<br />
leaders.<br />
Now, what factors shaped the outcome<br />
of the general election? Well, a<br />
lot of forces were at work. First, a key<br />
cause of Labour’s downfall was its<br />
poor reputations on economic management<br />
and leadership. David Cameron<br />
was miles ahead of Ed Miliband<br />
on the two critical questions: who is<br />
better able to manage the economy?<br />
And who is a more credible leader?<br />
The truth is that, despite the painful<br />
austerity measures, the economy has<br />
done reasonably well under Cameron’s<br />
leadership, with unemployment<br />
below 6 percent and inflation at<br />
zero percent. By contrast, Labour was<br />
widely blamed for amassing huge<br />
debt and deficit when they were last<br />
in power. The Tories used this against<br />
Labour to devastating effect. For instance,<br />
everywhere David Cameron<br />
went during the election campaign<br />
he brandished a note left behind by a<br />
former Labour finance minister, who<br />
wrote: “I’m afraid there is no money”.<br />
Cameron used this note to argue that<br />
Labour was reckless with the public<br />
finances while in power and couldn’t<br />
be trusted again on the economy.<br />
And it worked. British voters dislike<br />
parties that are fiscally irresponsible!<br />
Furthermore, Miliband was seen<br />
as anti-business and too left wing.<br />
He did not appeal to business and<br />
aspirational voters.<br />
However, the second, perhaps<br />
more powerful, cause of Labour’s<br />
failure was the effect of Scottish and<br />
English nationalisms. Last year, the<br />
Scottish people voted 55.3 percent to<br />
44.7 percent against independence<br />
from the UK. Instead, they decided<br />
that Scotland should have a strong<br />
voice in Westminster. In other words,<br />
they wanted MPs who would fight<br />
the Scottish corner aggressively in<br />
London. And the only party they felt<br />
could provide this robust and aggressive<br />
representation was the SNP,<br />
which has been stridently against<br />
Scotland being governed from London.<br />
Thus, Labour became the victim<br />
of Scottish nationalism by losing<br />
all but 1 of its 41 seats in Scotland!<br />
At the same time, however, the fear<br />
that SNP MPs would “invade” London<br />
and prop up a minority Labour<br />
government, as the SNP promised,<br />
stoked English nationalism. Many<br />
English voters believed that a Labour<br />
government supported by Scottish<br />
nationalists who wanted to break<br />
up the UK would not be legitimate.<br />
It is estimated that about 2 percent<br />
of English voters switched, at the last<br />
minute, to the Conservative party<br />
to prevent a Labour government,<br />
supported by the SNP. Even the UK<br />
Independence Party (UKIP) eroded<br />
Labour support in England because<br />
of the fear of a minority Labour<br />
government propped up by the SNP,<br />
although UKIP also capitalised on<br />
Labour’s perceived weak record on<br />
immigration. So, in the end, Labour<br />
lost heavily because of its poor ratings<br />
on economic competence and<br />
leadership, and also because of rival<br />
nationalisms: the English and the<br />
Scottish!<br />
As for the Lib-Dem, their massive<br />
defeat was of a cruel nature. They had<br />
gone into coalition with the Conservative<br />
party in 2010 to help stabilise<br />
the country, given the Tories couldn’t<br />
govern alone. But Lib-Dem supporters<br />
hated the alliance, which wasn’t<br />
helped by the fact that the party later<br />
broke its promise not to support any<br />
increase in tuition fees. Of course,<br />
in any coalition, the small parties always<br />
get slaughtered when things go<br />
wrong. So, the Lib-Dem paid a heavy<br />
price for going into alliance with the<br />
Conservative party, and for breaking<br />
their election promises.<br />
The key issue about the May 7 general<br />
election, however, is the central<br />
role that nationalisms played in it, and<br />
the implications of this. For instance,<br />
no one can ignore what happened in<br />
Scotland, as the SNP leader Nicola<br />
Sturgeon has loudly stated! Almost<br />
everyone now agrees there should<br />
be a new constitutional settlement.<br />
The influential Times of London recently<br />
called for a “full constitutional<br />
convention” to agree a new relationship<br />
between the nations of the UK.<br />
And a growing number of influential<br />
politicians think federalism is now the<br />
only way of keeping the UK intact. For<br />
instance, the Mayor of London, Boris<br />
Johnson, believed to be the next Tory<br />
leader after Cameron, said that “there<br />
must be some federal structure”. One<br />
Scottish leader and elder statesman,<br />
Lord Owen, even put it more starkly:<br />
“Many Scottish people are ready to<br />
vote for separation unless they are<br />
presented with a new constitutional<br />
federal structure for the UK that<br />
allows Scotland to feel the fullest<br />
autonomy of nationhood within a<br />
federal state”. Few, indeed, believe<br />
things can be the same again in the<br />
UK, constitutionally and politically,<br />
after the seismic nature of the election.<br />
More significantly, the re-elected<br />
Tory Prime Minister David Cameron<br />
gets the message. As he put it in a<br />
statement after his re-election, “We<br />
must bring together the different<br />
nations of our United Kingdom. With<br />
our plans, the governments of these<br />
nations will become more powerful,<br />
with wider responsibilities”. He<br />
added, “In Scotland, our plans are<br />
to create the strongest devolved<br />
government anywhere in the world<br />
.… And no constitutional settlement<br />
will be complete, if it did not offer,<br />
also, fairness to England”. In other<br />
words, the proposed constitutional<br />
settlement would mean a significant<br />
devolution of powers to the four nations<br />
of the UK – England, Scotland,<br />
Wales, and Northern Ireland. It<br />
would mean, in effect, a federal UK!<br />
There are three lessons for Nigeria<br />
from the momentous British<br />
events. First, economic competence<br />
and leadership matter in elections.<br />
In 1992, when running for the US<br />
presidency, Bill Clinton coined the<br />
phrase: “It’s the economy, stupid!”<br />
That statement has been quoted<br />
endlessly. And it’s true! For instance,<br />
General Buhari won the presidency<br />
because President Jonathan was<br />
widely perceived to be weak on the<br />
economy and on leadership. Of<br />
course, it’s now Buhari’s turn to demonstrate<br />
economic competence and<br />
leadership in running the country. If<br />
he fails, his party would struggle with<br />
re-election in 2019.<br />
Secondly, small parties in coalitions<br />
always get slaughtered, a lesson<br />
for the APC South West. The APC is a<br />
grand coalition of different parties,<br />
but it’s the alliance between the North<br />
and the South West that won the party<br />
the presidency. APC South West is<br />
clearly a junior party in the coalition,<br />
with just four states, yet it was the king<br />
maker. If the Buhari government fails<br />
to deliver on the party’s promises,<br />
APC South West would pay a heavy<br />
price. It would suffer the same fate<br />
as the Lib-Dem if its alliance with<br />
the North did not produce tangible<br />
results for Nigerians or, for that matter,<br />
left the Yorubas dissatisfied.<br />
Finally, as I wrote recently in an<br />
article titled “A vision for the united<br />
nations of Nigeria”, ethnic nationalism<br />
is as strong in Nigeria as it is in the UK.<br />
Clearly, if the UK, a very conservative<br />
country, is moving towards a new<br />
constitutional settlement based on a<br />
federal structure, Nigeria has no excuse<br />
for ducking the issue. If General<br />
Buhari rejects the report of Jonathan’s<br />
National Conference, he should<br />
convene his own constitutional convention<br />
to agree a new political and<br />
constitutional settlement for Nigeria.<br />
The issue will not go away!
12 BUSINESS DAY<br />
Monday 18 May 2015<br />
EDITORIAL<br />
PUBLISHER/CEO<br />
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Nigeria’s next petroleum minister<br />
It is no longer a secret<br />
that the Nigerian economy<br />
depends so much<br />
on hydrocarbon resources.<br />
The statistics<br />
over the years have remained<br />
the same: about 85 percent of<br />
the country’s earnings and<br />
over 90 percent of its foreign<br />
exchange come from the oil<br />
and gas industry.<br />
While the talking points<br />
over the years have been on<br />
how to diversify the economy,<br />
it is also critical that the<br />
oil and gas sector is wellmanaged<br />
at this point in time<br />
that the country seems to be<br />
moving towards a national<br />
rebirth. That is why stakeholders<br />
in the oil and gas<br />
industry as well as watchers<br />
of the economy are watching<br />
with keen interest to see who<br />
will emerge as Nigeria’s next<br />
petroleum minister.<br />
Expectations are that Nigeria’s<br />
next petroleum minister<br />
should be an experienced,<br />
thorough-bred technocrat<br />
who is deeply knowledgeable<br />
about the industry, with no<br />
baggage of any sort. There<br />
is also the need to reverse<br />
the trend whereby the role<br />
of group managing director<br />
(GMD) of the Nigerian National<br />
Petroleum Corporation<br />
(NNPC) has been diminished<br />
by “successive powerhungry<br />
petroleum ministers”.<br />
This is why we agree with<br />
the Centre for Petroleum<br />
Information (CPI) which said<br />
in a recent commentary that Nigeria’s<br />
next petroleum minister<br />
“should be charismatic enough<br />
in the international circuit and<br />
yet very effective in the domestic<br />
front”, “should be focused<br />
on shaping and giving bite to<br />
policies rather than competing<br />
with NNPC GMD for day-to-day<br />
operational duties”, and “must<br />
be reputable, visionary, deeply<br />
knowledgeable about the industry,<br />
experienced, not conflicted<br />
in any way, and very patriotic”.<br />
We also agree with Emeka<br />
Ene, chairman of the Society<br />
of Petroleum Engineers (SPE),<br />
Nigeria Council, that the oil<br />
and gas industry in the coming<br />
dispensation should be driven<br />
by technocrats. According to<br />
Ene, “The Nigerian oil and gas<br />
industry is a complex industry<br />
and therefore requires complex<br />
solutions by experienced hands<br />
and technocrats. Technocrats<br />
will be in the position to look<br />
at the investment flows, match<br />
them with the technology flows,<br />
the local content requirement<br />
as well as the inherent demands<br />
that are not just demands for the<br />
rights of the stakeholders.”<br />
Without a doubt, given the<br />
mounting high expectations of<br />
Nigerians on the incoming Buhari<br />
administration, one clear<br />
route of getting things done right<br />
is putting in place a minister of<br />
petroleum with enough strong<br />
will and determination to push<br />
through policies and initiatives.<br />
Such policies will include the<br />
issues of correct pricing and<br />
subsidy on petroleum products.<br />
This may be the first acid test<br />
that the Buhari administration<br />
will have to confront.<br />
At the industry level, the next<br />
petroleum minister will have to<br />
guide President Buhari on legal<br />
and fiscal framework regarding<br />
the industry, key among<br />
which is what to do with the<br />
draft Petroleum Industry Bill.<br />
BusinessDay has argued in a<br />
previous editorial that one way<br />
out could be to do away with the<br />
largely controversial bill and<br />
seek other ways of moving the<br />
industry forward.<br />
The incoming petroleum<br />
minister must, within the shortest<br />
possible time, decide what<br />
to do with Nigeria’s comatose<br />
refineries – whether to privatise<br />
them or carry out a real turnaround<br />
within a given timeframe<br />
to get them back on their feet.<br />
The minister must also brace up<br />
to the challenge of tackling the<br />
issue of allocation of oil blocks<br />
and bid rounds in a transparent<br />
manner using global best<br />
practices. We recall here the<br />
botched second marginal fields<br />
bid round which fizzled out after<br />
so much noise.<br />
Furthermore, the next petroleum<br />
minister should chart<br />
a way forward for the gas sector<br />
and ensure that the gas master<br />
plan is implemented to the fullest<br />
and also have a foothold on<br />
the issue of gas flaring.<br />
The Federal Government<br />
some years ago initiated a policy<br />
to boost Nigeria’s crude reserves<br />
to 40 billion barrels by 2010 and<br />
hit 4 million barrels per day of<br />
crude oil production. However,<br />
the country has stagnated at a<br />
reserve base of 36 billion barrels<br />
with daily crude oil production<br />
hovering under 2 million barrels.<br />
The petroleum minister<br />
Nigeria needs at the moment<br />
should devise creative incentives<br />
and ways of funding Joint<br />
Venture operations to ensure<br />
that we grow our reserves and<br />
also increase our production<br />
output.<br />
Another nagging issue is the<br />
minister’s consent. While some<br />
stakeholders accept that obtaining<br />
the minister’s consent<br />
is desirable prior to completing<br />
certain transactions in this very<br />
important industry, it is our<br />
view that it is also important to<br />
have clearer rules beyond the<br />
Petroleum Act as regards timing<br />
for the grant of consent. This is<br />
because delays in the granting<br />
of consent, which could be<br />
upwards of two years, can pose<br />
a huge drawback to oil and gas<br />
transactions.<br />
We, therefore, urge the incoming<br />
Buhari administration<br />
to take these issues into<br />
consideration in selecting the<br />
next petroleum minister and<br />
ensure that it puts a round peg<br />
in a round hole in order to move<br />
the nation’s oil and gas sector<br />
forward.<br />
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Monday 18 May 2015<br />
13
Monday 18 May 2015<br />
14 BUSINESS DAY<br />
In Association With<br />
Business<br />
The oil industry<br />
After OPEC<br />
American shale firms are now the oil market’s swing<br />
producers<br />
BIG companies making<br />
big bets on big<br />
oilfields, while a cartel<br />
of oil-producing<br />
states fixed the price<br />
to keep itself rich and others,<br />
including the oil majors, profitable.<br />
That, in caricature, was<br />
how the oil industry once ran.<br />
That model now seems broken.<br />
On May 13th the International<br />
Energy Agency, representing<br />
the main oil-consuming<br />
countries, said a global oil glut<br />
was building, as Saudi Arabia<br />
pumped oil frantically in<br />
a continuing battle for market<br />
share with American shale-oil<br />
producers. The shale firms have<br />
proved a lot more resilient, and<br />
a lot more productive, than the<br />
Saudis and other members of<br />
OPEC, the producers’ cartel,<br />
had expected. Last November,<br />
with prices already slipping,<br />
OPEC’s members stopped trying<br />
to agree production quotas<br />
among themselves, sending<br />
crude tumbling further. Their<br />
hope was that this would force<br />
rival producers, especially in the<br />
American shale beds, to slash<br />
investment. As supply tightened<br />
drastically, the oil price would<br />
rebound. This has not happened.<br />
Prices have staged only<br />
a partial recovery: West Texas<br />
Intermediate (WTI), one of the<br />
main benchmark prices for<br />
crude, was just above $100 a year<br />
ago and hit a low of around $44<br />
in March; it had recovered to just<br />
$60 by the middle of this week.<br />
If the glut persists, the price is<br />
likely to slip back. As OPEC oil<br />
ministers prepare for a meeting<br />
in Vienna next month, a draft<br />
paper leaked to the Wall Street<br />
Journal said that even in its most<br />
optimistic scenario, the price<br />
will not exceed $76 a barrel until<br />
after 2025. It also considered a<br />
scenario in which it fell below<br />
$40. OPEC denied that the draft<br />
existed, but the conclusions ring<br />
true: the chances of a return to<br />
triple-digit crude prices look<br />
slim.<br />
The big oil multinationals,<br />
such as BP, Chevron, Exxon-<br />
Mobil, Shell and Total, have responded<br />
to the weaker oil price<br />
by cost-cutting, and postponing<br />
and cancelling some of their<br />
exploration projects (although<br />
Shell this week got a provisional<br />
go-ahead to restart a $6 billion<br />
project in the Arctic, troubled by<br />
delays and accidents). However,<br />
the output of the shale firms has<br />
proved surprisingly robust, even<br />
though they have cut their number<br />
of rigs significantly since the<br />
peak last October.<br />
One reason for this is canny<br />
hedging by some shale producers,<br />
which means they are in<br />
effect getting paid above the<br />
current market price. But many<br />
unhedged producers have also<br />
continued to pump oil, since<br />
the market price is still above<br />
the marginal cost of producing<br />
another barrel, even if it doesn’t<br />
cover the upfront costs of drilling<br />
the well. Most important of<br />
all, their productivity has continued<br />
to improve in leaps and<br />
bounds. Wells that used to take<br />
35 days to complete now take<br />
17, says Daniel Yergin of IHS,<br />
a research firm. The amount of<br />
oil produced per dollar invested<br />
will rise by 65% this year, he says.<br />
Better seismic data, improvements<br />
to the fracking liquids<br />
pumped into wells and more<br />
intensive deployment of rigs are<br />
all helping.<br />
In all, IHS reckons that 80% of<br />
the new capacity this year will be<br />
profitable with WTI at $50-$69<br />
a barrel. As its price has edged<br />
above $60 in recent days, some<br />
shale companies have begun<br />
to talk about increasing output<br />
again. The size of the “fracklog”,<br />
the pipeline of ready-to-roll<br />
projects awaiting better prices,<br />
is contested. But the principle is<br />
clear: American shale firms have<br />
become the new “swing producer”<br />
of the global oil market.<br />
Its main influence used to<br />
be OPEC, and particularly the<br />
Saudis, switching the taps on<br />
and off to try to rig the price.<br />
Now the market is increasingly<br />
led by the American frackers,<br />
ramping their drilling up and<br />
down in response to global<br />
prices. Petromatrix, a consulting<br />
firm, has coined the phrase<br />
“shale band” for the price range<br />
between $45 and $65: below that<br />
range, American production<br />
falls sharply; above it, it surges.<br />
If so, there should be a tendency<br />
for prices to stay within that<br />
range.<br />
The greater the proportion of<br />
the world’s oil supply that comes<br />
from fracking, the stronger this<br />
effect will be. The American government’s<br />
Energy Information<br />
Administration has in the past<br />
three years raised its forecast of<br />
American oil output in 2020 by<br />
3.1m barrels per day to 10.6m—<br />
the equivalent of adding another<br />
producer the size of Iraq. There<br />
is scope to reduce production<br />
costs further through the consolidation<br />
of what is still a fragmented<br />
fracking business. This<br />
week, in the first big deal of its<br />
kind since the oil-price drop,<br />
Noble Energy said it would buy<br />
Rosetta Resources, a smaller<br />
and indebted rival, for $2 billion,<br />
paid in shares. More such<br />
deals are likely. Paul Stevens of<br />
Chatham House, a think-tank<br />
in London, expects a “flurry of<br />
mini-mergers”.<br />
As American production continues<br />
to rise, pressure will grow<br />
on the government to ease its<br />
restrictions on exports of crude.<br />
In the meantime America’s imports<br />
are diving—they fell below<br />
those of China last month. Other<br />
countries, from Russia to Argen-<br />
Continues on page 15<br />
DIVERSE ISN’T<br />
JUST WHO WE ARE,<br />
IT’S HOW WE DO BUSINESS<br />
An enormous variety of natural resources<br />
and agricultural offerings coupled with a<br />
growing domestic market mean that Nigeria<br />
trades touch every corner of the globe.<br />
Think about how far your business can go<br />
with the right connections.<br />
Come talk to us.<br />
www.stanbicibtcbank.com<br />
Stanbic IBTC Bank PLC RC 125097<br />
SBSA 183611 01/15
Monday 18 May 2015<br />
BUSINESS DAY<br />
In Association With<br />
15<br />
After OPEC<br />
Continued from page 14<br />
Business<br />
Parental leave<br />
More hands to rock the cradle<br />
Both parents should be paid to spend time at home with<br />
their babies<br />
tina, have promising shale beds.<br />
Although they lack America’s<br />
expertise, finance and legal<br />
system, they may eventually<br />
begin to produce oil from them<br />
in significant quantities.<br />
All this leaves the Western<br />
oil majors in an uncomfortable<br />
place. They are used to overseeing<br />
huge, high-risk, long-term<br />
projects, and have not shaken<br />
the habit of indulging in costly<br />
bespoke solutions which delight<br />
their engineers but give their<br />
accountants nightmares. Mr<br />
Yergin of IHS notes that there<br />
are 328 standards within the<br />
industry just for valves. Contrast<br />
this with the shale firms,<br />
whose wells are small, cheap<br />
and drilled quickly using standardised,<br />
interchangeable parts.<br />
The current weakness in prices<br />
will eventually force the oil majors<br />
to strain themselves to find<br />
cheaper and more flexible ways<br />
of working, however. Oswald<br />
Clint of Sanford C. Bernstein,<br />
another research outfit, thinks<br />
that the majors have scope to cut<br />
perhaps tens of dollars a barrel<br />
from their breakeven prices.<br />
Unless some large-scale conflict<br />
erupts that takes out some<br />
of the world’s biggest oilfields,<br />
the oil industry may be heading<br />
for a new normal in which<br />
the price of crude oscillates in<br />
the mid-double digits. The one<br />
thing that might make it break<br />
out of this range and head back<br />
above $100 is a surge in demand.<br />
However, economic growth and<br />
energy consumption have decoupled<br />
in the rich world; and it<br />
is an open question if emerging<br />
economies will be as wasteful<br />
of energy in coming decades as<br />
the established ones were in the<br />
past century. Ever more affordable<br />
renewable-energy sources,<br />
and cheap gas, are proving increasingly<br />
attractive alternatives<br />
to many users of oil products.<br />
Paul Sankey of Wolfe Research,<br />
a New York-based outfit,<br />
believes that underinvestment<br />
resulting from the recent sharp<br />
dip in crude may lead to one last<br />
spike in the oil price; but after<br />
that, he reckons, the “oil age<br />
is over”. Even if that proves an<br />
exaggeration, a return of OPEC’s<br />
dominance seems a distant<br />
prospect.<br />
IN AMERICA there is nothing we<br />
wouldn’t do for moms—apart from<br />
one major thing,” said John Oliver,<br />
a British-born comedian, in his<br />
television show, “Last Week Tonight”,<br />
on May 10th (Mother’s Day). The<br />
“major thing” he was speaking of is paid<br />
maternity leave, which, as he pointed out,<br />
is standard in all but two of 185 countries<br />
surveyed by the International Labour<br />
Organisation (ILO): America and Papua<br />
New Guinea. In America some women<br />
who work for the federal government<br />
or larger firms can take 12 weeks’ leave<br />
unpaid after giving birth. In a handful<br />
of states new mothers get a few weeks<br />
at a low wage, funded by a payroll tax.<br />
By contrast, in Britain new mothers can<br />
take a year off, and during much of it part<br />
of their salary is replaced by the government.<br />
Sweden grants more than a year’s<br />
paid maternity leave—even to women<br />
who were not previously employed.<br />
America would do well to take note.<br />
Many countries are proud of their maternity<br />
leave, and rightly so: the social and<br />
economic benefits of making it possible<br />
for working mothers to spend time with<br />
their newborn children are clear. But<br />
many of those countries have failed to<br />
follow the argument through to its conclusion.<br />
The gains from maternity leave<br />
would be multiplied if countries extended<br />
it to apply to fathers, too.<br />
Mothers who struggle to combine<br />
work with child care often sacrifice<br />
work. That lowers their lifetime earnings<br />
and leaves them and their children<br />
more likely to end up poor. Much of<br />
Europe introduced paid maternity<br />
leave in the 1970s. Since then dozens of<br />
other countries have found that giving<br />
new mothers a reasonable amount of<br />
time off work—the ILO recommends<br />
at least 14 weeks—increases women’s<br />
participation in the labour force.<br />
The Papas and the Mamas<br />
But there are problems. Overly<br />
generous provision sometimes harms<br />
women, rather than helping them.<br />
Those who take long spells off work<br />
see their skills grow rusty and fail to<br />
gain experience and promotions. And<br />
although gender discrimination at<br />
work is illegal almost everywhere, some<br />
employers still avoid hiring women<br />
they think will be away a lot.<br />
Paid paternity leave can help. Nearly<br />
half the world’s countries now offer<br />
new fathers short periods at home;<br />
a growing number let mothers cede<br />
some maternity leave to their partners<br />
while they go back to work. Several<br />
European countries have started to<br />
reserve some of that leave for fathers<br />
to encourage them to make use of the<br />
opportunity: in Sweden couples get an<br />
“equality bonus” for splitting their time<br />
off more evenly.<br />
Fathers and offspring benefit. When<br />
a woman hands her baby to the father<br />
and heads out of the door to work, he<br />
learns how to be a better parent. The<br />
hands-on habits he picks up persist:<br />
fathers who take even short paternity<br />
leave play a bigger role in child-rearing<br />
years later. An international study<br />
found that they were more likely to<br />
brush their toddlers’ teeth, feed them<br />
and read to them. Babies whose fathers<br />
take paternity leave go on to do better<br />
in cognitive tests at school. Fathers<br />
are generally keen on their progeny,<br />
so some time to bond with them is a<br />
boon. Some men who thought that<br />
child care would not be much fun discover<br />
that they rather like it. Mothers<br />
are big winners, too. If both sexes are<br />
likely to take time off for child care,<br />
there is less temptation for employers<br />
to discriminate against women. Timeuse<br />
studies show that even when both<br />
parents work the same amount, the<br />
mother usually does more child care<br />
and housework. More hands-on fathering<br />
should cut down on this “second<br />
shift”, which is a big reason why many<br />
mothers work part-time or in jobs for<br />
which they are overqualified.<br />
That leads to gains for society as a<br />
whole. Few young women these days<br />
expect to have to choose between<br />
motherhood and work. In most countries<br />
they are now better educated<br />
than their male peers, which suggests<br />
that careers figure prominently in their<br />
plans—and makes losing them from<br />
the workforce an even bigger waste.<br />
Parental leave that is generous, but not<br />
too generous, is essential if mothers are<br />
not to be forced out of work by lack of<br />
support, or eased out by a surfeit of it.<br />
And ensuring that fathers take a share<br />
of it minimises the risks and amplifies<br />
the gains.
Monday 18 May 2015<br />
16 BUSINESS DAY<br />
In Association With<br />
Finance<br />
The size of the subsidy<br />
Finance’s Bermuda<br />
Quantifying the size of tax breaks for borrowing is<br />
no easy matter<br />
HOW valuable are tax breaks for debt?<br />
Most governments say how much mortgageinterest<br />
relief costs them in forfeited revenue.<br />
But the second type of tax break—interest<br />
deductibility for companies and financial<br />
firms—is harder to get to grips with. As the<br />
financial system has got bigger and fiddlier,<br />
no-one really knows how much interest the<br />
world’s firms pay. National accounts, the<br />
figures of publicly listed firms and the limited<br />
tax statistics that exist all give very different<br />
answers.<br />
To come up with estimates (see table), The<br />
Economist has used national-accounts data<br />
because they should show the broadest range<br />
of activity. We make adjustments that lower<br />
the tax break’s size. We include net rather than<br />
gross interest for non-financial firms. For financial<br />
firms we include an estimate of interest paid on<br />
debt but not that paid by banks on deposits. In America<br />
we exclude partnerships and “pass-through” entities<br />
that pay no corporate tax. There is nonetheless a lot of<br />
uncertainty about the figures. National accounts use<br />
a crude definition of “financial firm” that can include<br />
not just banks but many other entities—for example,<br />
the assets of investment funds, which may not pay corporation<br />
tax. The aggregate figures net the profits and<br />
losses of firms, and so may fail to capture loss-making<br />
firms that would not be liable for tax under any regime.<br />
Some investors who own shares are exempt from tax<br />
on dividend income. This may partly cancel out the<br />
bias toward debt at the firm level. We have not tried to<br />
capture this effect.<br />
Two conclusions can be drawn from this exercise.<br />
First, governments need to improve their data collection.<br />
Second, notwithstanding this, it seems that tax<br />
breaks for debt today<br />
Business<br />
Technology and health<br />
To sleep,perchance<br />
Screens before bedtime harm sleep. The effect is<br />
biggest for teenagers<br />
PITY the poor pineal gland,<br />
tucked behind the thalamus in<br />
a gap between the brain’s hemispheres.<br />
It has a simple task—to<br />
make melatonin, a hormone that<br />
regulates sleep. In days gone by, it<br />
would start doing so after sunset,<br />
ramp up to a maximum in the<br />
middle of the night, and then<br />
taper off toward the morning. The<br />
result was regular, dependable<br />
periods of sleep and wakefulness.<br />
Modern life, though, is confusing<br />
for the pineal because its<br />
signal to start work is the absence<br />
of light—specifically, of blue light.<br />
This part of the spectrum radiates<br />
by the bucketful from lightemitting<br />
diodes in the screens<br />
of phones, tablets and laptop<br />
computers. As far as the gland is<br />
concerned, that turns night into<br />
day. Study after study has suggested<br />
night-time use of screenbased<br />
gadgets has a bad effect<br />
on peoples’ sleep. Indeed, things<br />
are getting worse as screens get<br />
smaller and are thus held closer to<br />
the eyes. As a consequence there<br />
is a tidy market in devices and<br />
apps which regulate the amount<br />
of blue light a screen emits. The<br />
latest research suggests one group<br />
of people—teenagers—may be<br />
particularly susceptible. Those<br />
in their mid-teens already have<br />
unusual sleep patterns. Left to<br />
themselves, they stay up late and<br />
sleep in in the morning because<br />
their melatonin cycles start and<br />
finish later than those of adults.<br />
Add teenagers’ reputations for<br />
being glued to their screens and<br />
it certainly seems reasonable to<br />
hypothesise that adolescents, in<br />
particular, will suffer from sleepdisruption-by-gizmo.<br />
One study, published in October<br />
by researchers in Switzerland,<br />
tracked the self-reported sleepiness<br />
and alertness of boys aged<br />
15 to 17 over the course of two<br />
weeks at home in which they wore<br />
either glasses fitted with filters<br />
that blocked blue light, or else<br />
clear glasses of similar design, for<br />
several hours before they went to<br />
bed. The team then repeated the<br />
experiment in a laboratory, and<br />
measured the youths’ melatonin<br />
levels and reaction times over<br />
the course of the evening. All the<br />
results pointed the same way:<br />
minus blue light, participants<br />
were more ready for bed. In February,<br />
research on nearly 10,000<br />
Norwegian adolescents aged<br />
between 16 and 19 confirmed<br />
what casual observation might<br />
suggest. Almost all used computers,<br />
phones and the like in the<br />
hour before they went to bed. The<br />
data also showed that gadget use<br />
was closely correlated with sleep<br />
patterns. The more the teenagers<br />
looked at screens, the longer they<br />
took to get to sleep and the less<br />
time they slept during the course<br />
of a night.<br />
A third piece of work, published<br />
this week in Lighting Research<br />
and Technology, by Mariana<br />
Figueiro and her colleagues<br />
at the Rensselaer Polytechnic<br />
Institute in Troy, New York, also<br />
studied people aged between<br />
15 and 17. Though Dr Figueiro<br />
looked at only 20 teenagers, her<br />
results were so much at variance<br />
with those of work she had done<br />
previously on adults that they<br />
seem worth following up.<br />
On the first night of each experiment,<br />
participants wore orange<br />
glasses to screen out blue light,<br />
and took samples of their own<br />
saliva at one-hour intervals until<br />
bedtime. The following night, they<br />
repeated the procedure, but without<br />
the glasses. On glasses-free<br />
nights, volunteers’ melatonin levels<br />
were 23% lower after an hour<br />
of looking at a screen, compared<br />
with their levels on begoggled<br />
nights. After two hours, they were<br />
38% lower.<br />
Dr Figueiro’s previous studies<br />
with adults yielded falls in melatonin<br />
of only 14% after two hours<br />
in front of a computer. In the matter<br />
of sleep and screens, it seems,<br />
teens really are different. Not that<br />
such knowledge will make a jot of<br />
difference to their behaviour.
Monday 18 May 2015<br />
17
18<br />
Monday 18 May 2015
Monday 18 May 2015<br />
COMPANIES<br />
& MARKETS<br />
COMPANY NEWS<br />
ANALYSIS AND INSIGHT<br />
Dry construction achieves 50%<br />
market acceptance, pushes for<br />
increased interest<br />
P.22<br />
BUSINESS DAY<br />
19<br />
‘CFOs need to embrace<br />
digital technologies… or get<br />
left behind’<br />
P.24<br />
BD FINANCE MONDAY NOTE<br />
UBA, GTBank outperform<br />
tier-one peers in Q1’15<br />
… as tier one banks’ total asset hits N16.03trn<br />
PATRICK ATUANYA AND BALA<br />
Lenders in Africa<br />
largest economy<br />
Nigeria have defy<br />
analysts expectation<br />
as first quarter<br />
(Q1) earnings surged amid<br />
Central Bank of Nigeria’s<br />
(CBN) increase in interest<br />
rate and a slump in oil price<br />
that culminated in the devaluation<br />
of the naira.<br />
The cumulative total asset<br />
of tier one banks hits<br />
N16.03 trillion, which is 20<br />
percent of the rebased GDP<br />
of N80.22 trillion.<br />
UBA records highest<br />
profit growth<br />
The five tier one banks<br />
Continental Re’s profit climbs amid rising expenses<br />
… Q1 net income up 37.98%<br />
BALA AUGIE<br />
Continental Re achieved ing operations across Africa with 2.15 percent in 2014.<br />
the double digit growth in with a view to consolidating The improved returns South African’s insurance<br />
penetration is the fast-<br />
Profit growt (%) Assets growth net (%) income CIR growth amid (%) a NPL 30.67 (%) percent<br />
increase in insurance The reinsurance compaing<br />
the resources of the est in the whole world.<br />
L and its D share growth (%) of the ROAE market. (%) ROAA (%) mean Total asset the (N'billion) company 1 yr NSE is us-<br />
Returns %<br />
benefit and underwriting ny plans to open a construction<br />
property and engineerer<br />
profit.<br />
lenges befalling insurance<br />
owners in generating high-<br />
Analysts identified chal-<br />
expenses to N3.96 billion,<br />
and a 10.24 percent rise ing risk services unit in South Continental Re’s total companies operating in<br />
Continental Reinsurance<br />
plc first quarter<br />
(Q1) net income<br />
climbed 37.98 percent<br />
amid rising operating<br />
Banks<br />
expenses, as the Nigerian<br />
company continues to seek<br />
inorganic growth through<br />
aggressive expansion across<br />
Africa.<br />
The impressive result<br />
means the company has<br />
recorded growth at the bottom<br />
line with United Bank<br />
for Africa (UBA) leading the<br />
pack with a 34.71 percent<br />
increase in Q1 2015 profits,<br />
while Access Bank, Zenith<br />
Bank, GTBank, and FBH<br />
Holdings recorded profit<br />
growth of 18 percent, 17<br />
percent, 15 percent and 5<br />
percent, respectively.<br />
GTBank and UBA, the<br />
most efficient in Nigeria<br />
We believe that these<br />
lenders’ ability to cut costs<br />
while increasing profits as<br />
evidenced in reduced cost to<br />
income (CIR) ratio is responsible<br />
for the high return on<br />
investments to shareholders<br />
in the first quarter of the year.<br />
GTBank and UBA are<br />
the most efficient lenders in<br />
Nigeria; at the moment both<br />
banks recorded the highest<br />
return on shareholder’s<br />
investment. GTBank’s 29.03<br />
percent return on average<br />
equity (ROAE) and UBA’s<br />
24.80 percent (ROAE) are<br />
the highest in the banking<br />
industry (see table).<br />
UBA is the most cost<br />
efficient as it recorded the<br />
highest reduction in CIR of<br />
7.50 percent, outperforming<br />
peers. This explains its<br />
34.71 percent profit growth<br />
amid regulatory induced<br />
costs such as the AMCON<br />
charge.<br />
The lower the cost to<br />
income ratio the more efficient<br />
a bank, and the higher<br />
the ratio the less efficient<br />
the lender is in reducing<br />
costs while increasing profit.<br />
UBA has the lowest NPL<br />
ratio<br />
Nigeria lenders have well<br />
diversified loan portfolios<br />
given their aggressiveness<br />
to lending to the oil and gas<br />
explorers, telecoms and the<br />
real sector.<br />
UBA is improving its<br />
Risk Management Strategy<br />
(RMS) and also improving<br />
on its quality of loan portfolios<br />
given its NPL ratio of 1.6<br />
percent, is the lowest among<br />
the tier one banks.<br />
The average NPL ratio<br />
of 2.58 percent of tier one<br />
banks is below than 5 percent<br />
benchmark set by the<br />
CBN.<br />
Spot light on tier one banks Q1 results<br />
Banks Profit growt (%) Assets growth (%) CIR growth (%) NPL (%) L and D growth (%) ROAE (%) ROAA (%) Total asset (N'billion) 1 yr NSE Returns %<br />
GTBANK 15 5.33 -3.26 3.06 12.12 29.03 4.39 2,484 15.5<br />
UBA 34.71 7.29 -7.5 1.6 -2.9 24.8 2.4 2,964 -27.03<br />
ZENITH 17 4.9 -3.9 1.7 24.1 20.5 2.9 3,938 2.94<br />
ACCESS 18 2 -3.71 2.1 2.3 19.2 3.1 2,136 -27.93<br />
FBNH 5 17 -1.66 3.9 4.4 17 2 4,511 -24.55<br />
Source: Company financials, BusinessDay Finance note<br />
Spot light on tier one banks Q1 results<br />
Consolidated Hallmark<br />
premium income spike<br />
means impressive result<br />
BALA AUGIE<br />
Consolidated Hallmark<br />
Insurance<br />
plc is on a growth<br />
trajectory as premium<br />
income spiked 61.47<br />
percent, an impressive performance<br />
that means the Nigerian<br />
company is tapping<br />
into the country’s growing<br />
economy.<br />
For the first three months<br />
through March 2015, Consolidated<br />
Hallmark’s gross<br />
premium income surged<br />
61.47 percent to N1.97 billion,<br />
from N1.22 billion the<br />
same period of the corresponding<br />
year (Q1) 2014.<br />
The company’s underwriting<br />
capacity is efficient<br />
as net premium earned<br />
moved by 4.45 percent to<br />
N993.96 million in Q1 2015<br />
as against N950.75 billion<br />
the previous year. Gross<br />
premium written spiked<br />
by 47.22 percent to N2.12<br />
billion.<br />
Underwriting profits<br />
were up 12.40 percent to<br />
N712.81 million in 2015<br />
from N373.20 million in<br />
2014.<br />
Analysts say though<br />
Consolidated Hallmark recorded<br />
growth in premium<br />
income, the industry’s contributions<br />
to the economy<br />
remain abysmal.<br />
The insurance sector<br />
contributed less than 1 percent<br />
to the total rebased<br />
GDP of N80.22 trillion. This<br />
compares with South Africa’s<br />
insurance contribution<br />
of 15 percent to its GDP and<br />
Kenya’s contribution of 3.40<br />
percent contribution to its<br />
$53 billion economy.<br />
GTBANK 15<br />
in<br />
5.33<br />
operating<br />
-3.26<br />
expenses<br />
3.06<br />
to Africa.<br />
12.12<br />
This strategic<br />
29.03<br />
plan is<br />
4.39<br />
assets increased<br />
2,484<br />
by 12.62<br />
15.5<br />
Africa largest economy as<br />
N109.80 million.<br />
boost specialist skills in percent to N30.83 billion culture, general mind-set<br />
UBA 34.71 7.29 While Nigeria -7.5 is a low 1.6 other areas, -2.9 including 24.8 actuaries<br />
and information in 2014, while total share-<br />
2.4 in 2015 from N28.20 2,964 billion -27.03<br />
premium environment,<br />
ZENITH 17 Consolidated 4.9 -3.9 Re was efficient<br />
in its underwriting ca-<br />
support underwriters. 9.71 percent to N16.21<br />
1.7 technology, 24.1 to advise 20.5 and 2.9 holders’ fund 3,938 jumped by 2.94<br />
ACCESS 18 2 -3.71 2.1 2.3 19.2 3.1 2,136 -27.93<br />
pacity as insurance premium The company’s earnings billion in 2015 as against<br />
FBNH overcome the low premium 5 revenue 17 increased -1.66 by 18.47 3.9 per share 4.4 (EPS) rose 17 by N14.77 2 billion 4,511 in 2014. -24.55<br />
income environment. percent to N4.82 billion in 33.33 percent to 8k in 2015 The company’s shares<br />
For the first three months 2015, compared with N4.0 as against 6k in 2014. rose 1.02 percent to N0.99<br />
through March 2015, Continental<br />
Re’s net income Net Insurance Premium moved to 5.26 percent in Lagos on Wednesday, the<br />
billion the previous year. Return on equity (ROE) by the close of market in<br />
increased by 37.98 percent Income were up by 20.54 2015 as against 4.17 percent<br />
in 2014, while the months. It market capitali-<br />
biggest advance in two<br />
to N837.29 million from percent to N4.40 billion in<br />
N606.80 million the same 2015 from N3.65 billion in return on average assets sation was N10.27 billion<br />
period of the corresponding 2013.<br />
(ROA) jumped to 2.71 percent<br />
in 2015, compared standing was 10.37<br />
while total shares out-<br />
year (Q1) 2014.<br />
Continental Re is expand-<br />
billion.<br />
of people to insurance and<br />
lack of human capital, poor<br />
corporate governance issue,<br />
poor business infrastructure<br />
facilities and lack of<br />
awareness on the part of<br />
consumers on the uses and/<br />
sustainability of insurance<br />
products.<br />
Consolidated Hallmark<br />
has overcome the headwinds<br />
as profit after tax<br />
(PAT) increased by 12.25<br />
percent to N285.17 million<br />
in 2015 from N254.03 million<br />
in 2014.<br />
Profit before tax (PBT)<br />
followed the same growth<br />
trajectory as it jumped by<br />
12.43 percent to N419.83<br />
million in 2015, as against<br />
N373.40 million in 2014.<br />
The company’s reinsurance<br />
expenses surged by<br />
262.02 percent to a record<br />
N977.75 million, while management<br />
expenses reduced<br />
by 29 percent to N216.89<br />
million.<br />
Management expenses<br />
moved by 18.60 percent to<br />
N303.64 million in 2015 from<br />
N255.96 million as of March<br />
2014.<br />
The future of the insurance<br />
industry is auspicious<br />
as Nigeria’s young and growing<br />
population opens the<br />
doors of opportunities for<br />
the sector to tap into.<br />
“Even at 2.6 percent annual<br />
growth rate would have<br />
accommodated 4 million of<br />
the population,” said Bismarck<br />
Rewane, CEO, Financial<br />
Derivatives Company, at<br />
the 2015 Insurance Sector<br />
Outlook.<br />
“Stable economic growth<br />
projected at 6.2 percent is<br />
favourable for business and<br />
insurance as an important<br />
arm of the financial services<br />
market would benefit,” said<br />
Rewane.<br />
Consolidated Hallmark’s<br />
share price closed at N0.50<br />
on the NSE, while market<br />
capitalisation was N3 billion.
20<br />
Monday 18 May 2015
Monday 18 May 2015<br />
21
22 BUSINESS DAY<br />
Monday 18 May 2015<br />
COMPANIES & MARKETS<br />
Dry construction achieves 50% market<br />
acceptance, pushes for increased interest<br />
Business Event<br />
CHUKA UROKO<br />
After four yours of<br />
pushing for market<br />
acceptability,<br />
dry construction,<br />
a viable building alternative<br />
method to the conventional<br />
wet construction, has<br />
achieved 50 percent interest<br />
and it is aggressively pushing<br />
for more.<br />
Nigerite, which is promoting<br />
the relatively new<br />
building solution in Nigeria,<br />
says it is building momentum<br />
to launch this alternative<br />
building method again this<br />
year and, according to Jesse<br />
Onovre, an architect in the<br />
company, their reason for<br />
championing dry construction<br />
was to disabuse people’s<br />
mind and belief that it was<br />
not viable.<br />
Onovre disclosed to BusinessDay<br />
on the sideline of Lagos<br />
Architects Forum (LAF)<br />
organised recently by the<br />
Lagos State chapter of the Nigerian<br />
Institute of Architects<br />
(NIA) that his company, beyond<br />
marketing its product at<br />
the forum, was also using the<br />
opportunity to let the public<br />
know that dry construction<br />
remained a very viable alternative<br />
to wet construction<br />
that involved use of brick and<br />
mortar.<br />
Nigerite, a principal sponsor<br />
of this year’s LAF, has as<br />
its flagship product - Kalsi,<br />
which is its brand for dry<br />
walls with basic elements<br />
that make it possible for the<br />
product to be used to build<br />
a house and also be used for<br />
both internal and external<br />
works.<br />
“We have been pushing<br />
for dry construction for about<br />
four and half years now. We<br />
are building momentum over<br />
time and that is why we are<br />
launching it again this year.<br />
The reaction to Kalsi wasn’t<br />
too lovely; I remember I had<br />
several presentations to people<br />
and they didn’t understand<br />
it very well; many said<br />
they didn’t want to be used as<br />
guinea pigs for this and it was<br />
like that for about two years<br />
when we started,” he said.<br />
Continuing, he said, “after<br />
the third year, some people<br />
including the architects<br />
tested it and found out that<br />
it enhanced their jobs. Now,<br />
people have been coming for<br />
it and more are also keying<br />
into it. Overall, the response<br />
has been impressive, still<br />
growing though, and better<br />
than what we had before. I<br />
would say we have like 45 to<br />
50 per cent acceptance so far;<br />
but it can be better.”<br />
The Kalsi board solution<br />
offers this alternative at a<br />
cheaper cost, Onovre said,<br />
saying they were trying to let<br />
buyers know that it was possible<br />
to demystify the process<br />
of building.<br />
“Kalsi is not being sold as<br />
a product but as a building<br />
solution; so it comes with<br />
other items like the galvanised<br />
steel and cement board.<br />
Experts knowledgeable in dry<br />
construction say that whereas<br />
there are some wastages in<br />
brick and mortar, which are<br />
not always factored into the<br />
construction, with the Kalsi<br />
solution, wastages are taken<br />
off the shoulders of the building<br />
owner,” he said, citing the<br />
pipe used which was already<br />
prefabricated, saving cost in<br />
employing artisans coming<br />
to chisel metals.<br />
It would be recalled that<br />
Nigerite recently refurbished<br />
its reception office using the<br />
Kalsi solution to serve as a<br />
testimony to stakeholders,<br />
create more awareness for<br />
the Kalsi brand as well as<br />
demonstrate that Kalsi can be<br />
used to complement buildings<br />
and open area offices.<br />
Custodian and Allied shareholders laud dividend<br />
culture as firm grows revenue to N25bn<br />
L-R: Parikshit Chandna, head, consumer electronics; Sunil Kumar, director, consumer electronics;<br />
Chukwuma Ofoma, head of channel, consumer electronics and Jae Hak Lee, business development<br />
manager, home appliances, all of Samsung Electronics West Africa, during the media briefing on<br />
Samsung AC technical forum/launch of Samsung “DVM (Digital Variable Multi) Super” system AC and<br />
smart inverter air conditioners in Lagos. Pic by Pius Okeosisi<br />
L-R Chidi Ajaegbu , president , ICAN, congratulating the newly elected president of the PAN African<br />
Federation of Accountants (PAFA) Asmaa Resmouki of Morocco at the just concluded African Congress<br />
of Accountants in Mauritius recently.<br />
MODESTUS ANAESORONYE<br />
Shareholders of Custodian<br />
and Allied plc<br />
have commended<br />
the board and management<br />
of the financial<br />
services group for sustained<br />
dividend culture and increased<br />
value creation for<br />
shareholders.<br />
This is as the company<br />
recorded positives in all<br />
indices, posting a total gross<br />
revenue of N25.20 billion<br />
as against N24.68 billion in<br />
2013, showing a 2.1 percent<br />
increase. Total asset moved<br />
up by 7.03 percent, from<br />
N45.65 billion to N48.86<br />
billion at the end of 2014<br />
financial year.<br />
Profit before tax also appreciated<br />
by 18.73 percent,<br />
moving from N4.34 billion<br />
in the previous year to N5.15<br />
billion in the review year,<br />
while profit after tax rose by<br />
13.6 percent from N3.60 billion<br />
to close at N4.09 billion.<br />
Earnings per share grew by<br />
11 percent, from 63 kobo to<br />
70 kobo at the end of 2014.<br />
The shareholders, who<br />
spoke at the 20th annual<br />
general meeting of the company<br />
in Lagos, said the firm<br />
had remained committed to<br />
increasing shareholder value<br />
despite the harsh operating<br />
environment and very fierce<br />
competition in the nation’s<br />
underwriting market.<br />
Custodian and Allied<br />
paid out a total of 18 kobo<br />
per share in the full-year<br />
result for the period ended<br />
December 31, 2014. This is a<br />
cumulative of additional 12<br />
kobo per share as final dividend<br />
and interim dividend<br />
of 6 kobo per share paid in<br />
September of the review year.<br />
The company is a group of<br />
financial services firm with<br />
subsidiaries in general insurance<br />
business, life insurance<br />
business, trustees business<br />
and pension administration.<br />
The secretary general,<br />
Independent Shareholders<br />
Association of Nigeria, Adebayo<br />
Adeleke, commended<br />
the board management of<br />
Custodian for always ensuring<br />
that dividends were paid<br />
on a yearly basis in spite of<br />
the challenges in the operating<br />
environment.<br />
“We are happy that you<br />
are able to post impressive<br />
result during the operating<br />
year 2014, as well as for<br />
paying the shareholders a<br />
dividend of 18 kobo for the<br />
year,” he said.<br />
Another shareholder,<br />
Kabiru Salaudeen also expressed<br />
appreciation to the<br />
company’s management<br />
for its policy on consistent<br />
dividend payment, saying<br />
the organisation was one of<br />
the few insurance companies<br />
that paid its shareholders<br />
interim and final dividends<br />
for the period.<br />
Ade Ojo, chairman of the<br />
company, said in spite of the<br />
tough national economy,<br />
regulatory headwinds and<br />
myriad of challenges of 2014,<br />
the company did not only<br />
survive but progressed on all<br />
fronts during the year.<br />
“It is very gratifying to<br />
note that all of the subsidiaries<br />
were profitable during<br />
the year. We are happy<br />
with our management for<br />
an impressive result despite<br />
the difficult terrain in which<br />
it operated in 2014,” he said.<br />
On future outlook, Ojo<br />
noted that the national economy<br />
outlook for 2015 was<br />
challenging with significant<br />
headwinds from political<br />
and national security issues<br />
- inflation, foreign exchange,<br />
stock market and external<br />
reserve concerns, but expressed<br />
confidence, saying<br />
“I am however, absolutely<br />
confident in our management’s<br />
ability to survive and<br />
thrive in the difficult terrain.”<br />
Wilson Ideva, managing director, Aliyu Dikko chairman, board of directors and Nasiru Idris, company<br />
secretary all of Premium Pension Limited during the 10th Annual General Meeting in Abuja.<br />
R-L: Shade Jaji, head of service, Lagos State; Adebiyi Mabadeje, commissioner for science and<br />
technology, Lagos State; Governor Babatunde Fashola of Lagos State; Nike Animashaun, permanent<br />
secretary, Ministry science and technology, Lagos State, and Zaid Saimua, MD, Palmyra Construction<br />
Company, at the commissioning of the new Lagos State Ministry of science and technology in Lagos .<br />
Pic by Francis Abiagam.
Monday 18 May 2015<br />
23
24 BUSINESS DAY<br />
Monday 18 May 2015<br />
COMPANIES & MARKETS<br />
INTERVIEW<br />
‘CFOs need to embrace digital<br />
technologies… or get left behind’<br />
Adebayo Sanni, Oracle country director, and Gbemisola Aruwayo-Obe, director, Business Application Cluster of Oracle Nigeria, in this interview with<br />
BusinessDay’s Daniel Ojabo and Edozie Ifebi, talk about role of technology in driving digital innovation and bottom-line performance. Excerpt:<br />
How do you see the role of CFOs<br />
today, especially with the advent of<br />
technology<br />
In today’s digital age, the role<br />
of CFO’s has actually evolved,<br />
compared with what it used<br />
to be in the past where their<br />
responsibilities were tied specifically<br />
to just keeping scores and<br />
book keeping into an era where they<br />
are in the fore front of innovation –<br />
innovation that is actually driving<br />
through disruption.<br />
The CFO role has evolved from<br />
just book keeping to providing and<br />
supporting organizations with innovations<br />
that allow companies to be<br />
more competitive and also, outside of<br />
being more competitive, looking for<br />
new areas of business to run.<br />
This however, has to be done<br />
from a collaborative point of view.<br />
The CFO and the CIO have to work<br />
together, as the CFO itself cannot<br />
survive or the CIO either. Collaboration<br />
is what starts to drive things like<br />
talent development, revenue generation,<br />
and growth in the organisation.<br />
As we go along, we see that the<br />
CFOs are actually playing a critical<br />
role in this digital revolution.<br />
Do you believe companies are<br />
leveraging technology enough, in<br />
a manner that can yield significant<br />
changes in bottom-line performance,<br />
particularly in the banking sector<br />
That’s a good question. I think if<br />
you look at the banking sector, it is<br />
probably the sector that has actually<br />
benefited the most from technology<br />
in Nigeria.<br />
A lot of banks are starting to look at<br />
data that they are gathering by implementing<br />
certain technologies. That is,<br />
looking at data gathered to help give<br />
them informed decisions in terms of<br />
the kinds of customers they can work<br />
with, trends in customer behaviours,<br />
and this is starting to build up. So if<br />
you look at it, I believe we are still in<br />
the baby phase.<br />
Having read your article titled<br />
“Data-driven insights allow CFOs<br />
to expose new opportunities for<br />
competitiveness,” you said not all<br />
industries were at the same stage<br />
of maturity with respect to innovation.<br />
Now, in the Nigerian market,<br />
what sector would you rank top in<br />
terms of maturity with respect to<br />
innovation<br />
For me, I would rank the telcos top<br />
most because it is either they innovate<br />
or they die. After the telcos, then<br />
you have the banking sector, then<br />
we have the MRDs (Manufacturing,<br />
Retail and Distribution), and then we<br />
have the public sector.<br />
What role does Oracle play in assisting<br />
CFOs with respect to digital<br />
innovation<br />
I think what is important is, for<br />
CFOs the reality is that we need a<br />
new type of talent for the 21st Century.<br />
The important part is making<br />
sure that they understand the fundamentals<br />
and as we start to build it<br />
up, they need to have some soft skills.<br />
Those soft skills are what are actually<br />
important for them to be able to understand<br />
the effect and the beauty of<br />
technology.<br />
Now, if you look at what Oracle is<br />
doing in terms of being able to support<br />
that, we have several solutions<br />
that are in place that can actually<br />
help in terms of allowing the CFOs<br />
themselves to be able to implement<br />
the solution that has actually been<br />
put in place, to be able to take that<br />
data and to be able to interpret it and<br />
in turn, to be able to take decisions<br />
that actually help drive innovation.<br />
So, Oracle continues to support<br />
the customers and CFOs in that regard<br />
through various sets of trainings.<br />
We have the next source of forces...<br />
we have cloud, mobile and we have<br />
big data. The CFO needs to embrace<br />
these technologies. If they don’t, they<br />
will be left behind. If you look at Face<br />
book today, Face book is currently the<br />
world’s most popular media house<br />
and yet they don’t create content.<br />
Everybody is on Twitter, everybody<br />
is on Face book. Alibaba is the most<br />
valuable retailer in the world, and yet<br />
they have no inventory. Everybody is<br />
on Whatsapp, it processes 3 billion<br />
messages per day and yet they don’t<br />
have any servers.<br />
Why is it imperative for CFOs to<br />
embrace digital innovation? What<br />
are the benefits for the CFO and the<br />
organisation as a whole<br />
We don’t yet have examples here<br />
in Nigeria, obviously. CFOs need to<br />
de-emphasise from tangible assets<br />
to intangible assets. Like I mentioned<br />
earlier, Face Book doesn’t create content.<br />
We all have Face Book accounts,<br />
we create content for Face Book,<br />
people advertise on Face Book which<br />
is how Face Book makes their money.<br />
Whatsapp, we are all on Whatsapp...<br />
now it is also influencing investors.<br />
Investors are looking at paying more<br />
for companies that are embracing top<br />
platforms for innovation and growth.<br />
Companies that are growing faster<br />
are companies that have business<br />
models that are embracing the cloud,<br />
mobile and big data. So, if CFOs<br />
don’t understand how to leverage<br />
these technologies, they will be left<br />
behind. They need to analyse data<br />
to attain a deeper insight into the<br />
data that they have. They also have to<br />
gather unstructured data from various<br />
social media platforms – twitter,<br />
Face book, etc. They can’t ignore it<br />
anymore; it is a trend that has come to<br />
stay. Companies that have leveraged<br />
on these technologies are making<br />
more money. Research by Deloitte<br />
revealed that companies that have<br />
developed their business model<br />
to leverage on these technologies<br />
are making 80 percent more than<br />
companies that are emphasising on<br />
tangible assets. So, it’s a fact.<br />
When you start to look at CFOs<br />
Adebayo Sanni<br />
“Our database has<br />
never been hacked<br />
and there is a reward<br />
out there if it is ever<br />
done. Oracle has all<br />
the security certifications<br />
in the industry...<br />
it is more secured to<br />
be on the cloud than<br />
even on-the-premise<br />
right now<br />
and their role, I think the fundamental<br />
part of it is to look at how the internal<br />
processes can be streamlined.<br />
Once you start to look at streamlining<br />
internal processes, you drive<br />
innovation and you get a huge cost<br />
reduction.<br />
McKinsey did a survey and said<br />
that the impact of cost reduction via<br />
streamlining internal processes was<br />
able to reduce by about 36 percent.<br />
If you now look at it, what do you<br />
now get as a result of cost reduction<br />
in driving innovation with the solutions<br />
she just described? It also gets<br />
to a point where you are helping the<br />
organisation itself become more<br />
competitive. So, in a world where<br />
competition is fierce, this is how you<br />
stand out because you are reducing<br />
your overall cost, becoming more<br />
competitive, you are looking for new<br />
ways of creating destruction and<br />
more importantly, you are driving<br />
revenue growth.<br />
So, I think once you have all of<br />
that, those are some of the benefits<br />
that an organisation gets by really<br />
streamlining internal processes. So it<br />
is not just really from a customer side,<br />
you come back in and that’s the real<br />
role of the CFO. So apart from being<br />
a business advisor, they just also provide<br />
strategic direction for the organisation<br />
and that’s where it’s evolving<br />
from just book keeping into this new<br />
role where they sit as the strategic<br />
adviser to the organisation to drive<br />
innovation reducing cost, making<br />
the company more competitive and<br />
also looking for way to improve profitability<br />
and revenue generation. So,<br />
the companies that are not adopting<br />
these as she just mentioned just end<br />
up being left behind and the margin<br />
we are seeing between the companies<br />
that are adopting these digital<br />
transformation or digital technology<br />
is getting wider and wider. Eventually,<br />
every business will become a<br />
digital business without any doubt<br />
but the ones in the forefront are the<br />
ones that are going to benefit more.<br />
What specific technological<br />
model do you recommend to<br />
help firms do better in their data<br />
analysis<br />
First, they have to recruit the<br />
right talent, people that have the<br />
requisite ability to mine data, and<br />
analyse it in a meaningful way that<br />
people can read and derive value<br />
from it. Also, since they already<br />
have a finance team, they will have<br />
to re-train and re-orientate them.<br />
MBA programmes have now introduced<br />
technology as part of their<br />
curriculum, so that participants can<br />
embrace technology. Oracle is also<br />
working with universities, making<br />
sure that in the curriculum these<br />
technologies are taught to accounting<br />
and finance students, so that<br />
when they graduate, they can deploy<br />
the skills they have acquired already.<br />
These are two ways CFOs can get and<br />
nurture the right talent.<br />
Some challenges faced by CFOs<br />
include financial loss as a result of<br />
cybercrime and internal collusion<br />
by company staff. How can technology<br />
help to forestall this<br />
Users believe that when they purchase<br />
a solution, they have the best at<br />
that point in time. But technology is<br />
dynamic. It is always changing. And<br />
there are people out there whose sole<br />
job is to study your processes and try<br />
to spot loopholes in them to exploit.<br />
The CFO needs to continuously look<br />
at his internal processes and upgrade,<br />
as well as continue to retrain his staff<br />
to ensure the effectiveness and efficiency<br />
of the process. So CFOs have<br />
to repeatedly hone their processes.<br />
What is your take on the cloud<br />
computing market in Nigeria<br />
Are Nigerian companies beginning<br />
to think in the direction in<br />
terms of adopting it<br />
I think it is inevitable. It is the future.<br />
Cloud is one of the 5 key digital<br />
disruptors that we have today outside<br />
of mobile, internet of things and<br />
social. The sooner companies start<br />
to embrace it, the better. Nigeria is<br />
no exception.<br />
Some of our customers are now<br />
waking up to the reality that cloud<br />
computing is the future. Surprisingly,<br />
the information at their disposal is<br />
not adequate. Institutions like the<br />
banks will have concerns for security<br />
when putting their information on<br />
the cloud. We as Oracle are helping<br />
our customers go through this<br />
change. We are partnering with<br />
them. We are developing a roadmap<br />
of three to five years, to go along with<br />
the customer through this change.<br />
What has the ERP market been<br />
like<br />
Oracle is synonymous with the<br />
Enterprise space, but we are also<br />
going in to the SME space with our<br />
Cloud offering. With as little as 5 users,<br />
you can have Oracle ERP. That’s<br />
the beauty of our cloud offering. We<br />
have ERP in the cloud; we have Enterprise<br />
Performance Management<br />
solutions in the cloud also. So, it is<br />
available to you. You don’t need to<br />
implement or buy hardware, and the<br />
scalability is there. The cost to acquire<br />
this solution is reduced. It is a pay-asyou-go<br />
subscription.
Monday 18 May 2015<br />
BUSINESS DAY 25<br />
COMPANIES & MARKETS<br />
ABUCCI targets 50% revenue<br />
expansion from exhibitors<br />
… to encourage business facilitation for members<br />
HARRISON EDEH, ABUJA<br />
Abuja Chamber<br />
of Commerce<br />
and Industry<br />
(ABUCCI) has<br />
revealed plans<br />
to improve its revenue base<br />
by 50 percent at the forthcoming<br />
trade fair involving<br />
both local and foreign<br />
participants.<br />
Through business facilitation,<br />
the Chamber aims to<br />
galvanise proper networking<br />
of various businesses<br />
and create an avenue for<br />
closing up of business deals<br />
and signing of memorandum<br />
of understanding<br />
among various parties.<br />
Tony Ejinkonye, president,<br />
ABUCCI, said at the<br />
pre-10th Abuja International<br />
Trade Fair conference,<br />
that the chamber<br />
would be riding on the<br />
improved security conditions<br />
in the country to<br />
bring businesses together<br />
in its bid to diversify the<br />
country’s revenue base and<br />
create opportunities for the<br />
youths.<br />
The fair, which would<br />
take place between September<br />
18 and October 2,<br />
would target the promotion<br />
and growth of industry and<br />
concentrate on the promotion<br />
of non-oil exports, the<br />
president explained.<br />
The fair is expected to<br />
see more participants due<br />
largely to the nation’s improved<br />
security apparatus,<br />
with the recorded feat in<br />
the nation’s fight against<br />
the dreaded Ebola virus,<br />
which he said affected last<br />
year’s fair.<br />
“For this year’s exhibition,<br />
we are expected<br />
to have up to 150 foreign<br />
exhibitors because of the<br />
peaceful atmosphere we<br />
have in the country, unlike<br />
the previous year, when we<br />
have 65 exhibitors only,”<br />
he said.<br />
Also, Adetokunbo Kayode,<br />
first deputy president<br />
of the Chamber, said more<br />
businesses would have<br />
opportunities for proper<br />
networking as the Chamber<br />
had prepared the ground<br />
for effective collaboration<br />
targeted at business facilitation<br />
of various businesses.<br />
“This year, we would<br />
be leveraging on ICT for<br />
the management of the<br />
fair, and to promote management<br />
of the fare. For<br />
instance, we are organising<br />
as part of this fare, an<br />
international ICT event,”<br />
Kayode said.<br />
“Our role is to promote<br />
the business of our members.<br />
In mining for instance,<br />
we intend to expose our<br />
members to the opportunities<br />
that are available in the<br />
country, like the kaoline,<br />
the mines ands steel sector,<br />
among others,” he said,<br />
saying various government<br />
agencies with outstanding<br />
research findings would<br />
also be exhibiting such<br />
findings for the business<br />
community to advance the<br />
commercialisation.<br />
Skye Bank revs up retained earnings<br />
to scale up investment<br />
Skye Bank’s submitted<br />
full-year 2014<br />
results to the Nigerian<br />
Stock Exchange<br />
(NSE) show a significant<br />
appropriation to retained<br />
earnings, demonstrating<br />
the bank’s ambition to play<br />
and dominate the tier 1<br />
retail banking space.<br />
Retained earning, which<br />
is an indicator of a company’s<br />
plans for growth in<br />
the future, was grown 70.6<br />
percent from N19.73 billion<br />
in the 2013 financial year to<br />
N33.7 billion in 2014. The<br />
numbers helped swell the<br />
bank’s total equity level to<br />
N132.26 billion from N121.4<br />
billion, a 9 percent rise.<br />
The IFRS compliant results<br />
show operating income<br />
was up marginally to<br />
N69.33 billion from N68.5<br />
billion, indicating increasing<br />
efficiency in cost management.<br />
This was on the<br />
back of a 2.4 percent rise<br />
in interest income from<br />
N105.3 billion to N107.85<br />
billion.<br />
Interest income is an<br />
indicator that helps explain<br />
how well a bank is doing in<br />
its maturity transformation<br />
quest.<br />
The bank’s headline and<br />
bottom-line profits in the<br />
period under review were<br />
tempered by impairment<br />
charges, regulatory payments<br />
and higher operating<br />
cost, including cost<br />
of acquisition Mainstreet<br />
Bank among other costs.<br />
These muscled-down pretax<br />
profit 46.7 percent from<br />
N19.65 billion to N9.74 billion.<br />
The bank has over the<br />
last year grown assets 27<br />
percent from N1.12 trillion<br />
to N1.42 trillion, helping<br />
to provide a stronger cover<br />
for deposit liabilities. The<br />
metric improved to 1.5 from<br />
1.3. This is as the bank has<br />
grown deposits 15.7 percent<br />
to N952.3 billion from<br />
N823.3 billion.<br />
A robust deposit base<br />
is an indication of a bank’s<br />
strong marketing ability,<br />
especially in the area of<br />
attracting and mobilising<br />
deposits.<br />
The group’s liabilities<br />
consisting of deposit base<br />
and other accruals rose to<br />
N1.29 trillion during the<br />
period compared with N995<br />
billion achieved a year ago.<br />
Speaking on the results,<br />
Timothy Oguntayo, the<br />
bank’s group managing<br />
director/CEO, said in spite<br />
of the challenging operating<br />
environment, the bank<br />
carefully grew its risk assets<br />
portfolio, attained a 15.7<br />
percent growth in deposits,<br />
supported customers in<br />
critical and productive sectors,<br />
and declared a fairly<br />
decent profit.<br />
The recent acquisition<br />
of Maintreet Bank, which<br />
has resulted into a much<br />
larger franchise of over<br />
450 branches, provides the<br />
bank with enhanced capacity<br />
to provide easier access<br />
to its teeming customers,<br />
and explore various opportunities<br />
in diverse segments<br />
of the Nigerian economy,<br />
Oguntayo said.<br />
The results have some<br />
good news for investors<br />
who have watched their<br />
investment grow in the last<br />
financial year, making it one<br />
of the fastest growing banking<br />
stock on the NSE.
26<br />
Monday 18 May 2015
Monday 18 May 2015<br />
27
Monday 18 May 2015<br />
28 BUSINESS DAY<br />
BUSINESS INTELLIGENCE<br />
The real managers in<br />
billion-dollar sports<br />
A growing number of private banks and wealth managers are<br />
targeting sports stars as a lucrative – and needy – sector<br />
TARA LOADER WILKINSON<br />
Editor in Chief, Wealth-X<br />
There’s a lot of money<br />
to be made in sport,<br />
never more clearly evidenced<br />
than last weekend’s<br />
fight between<br />
Manny Pacquiao and Floyd Mayweather,<br />
which has been called<br />
the richest in boxing history.<br />
Thirty-eight-year-old Mayweather,<br />
an undefeated fiveweight<br />
world champion, could<br />
take home as much as US$180<br />
million in revenues from Saturday’s<br />
fight, including pay-perview<br />
subscriptions, arena tickets,<br />
sponsorship, merchandise and<br />
broadcast sales.<br />
Thirty-six-year-old Filipino<br />
fighter Pacquiao, a six-time welter<br />
weight world champion, pocketed<br />
around US$120 million, swelling<br />
his net worth by around a third to<br />
around US$300 million, according<br />
to Wealth-X.<br />
Mayweather and Pacquiao battling<br />
in the boxing ring on 2nd May<br />
at the MGM Grand in Las Vegas.<br />
(Getty Images)<br />
Meanwhile in football, the<br />
richest football league players<br />
include Real Madrid star Cristiano<br />
Ronaldo with US$230 million in<br />
assets and Argentine forward Lionel<br />
Messi with US$180 million,<br />
according to Wealth-X.<br />
Earnings in sport – from sponsorship<br />
and wages – are on the<br />
up like never before, says Peter<br />
Cormack, financial planner at<br />
UK-based wealth manager Towry.<br />
“Sports industry revenues will<br />
always rise mainly due to the<br />
interest from companies buying<br />
TV rights and the money that this<br />
generates.” Earlier this year broadcasters<br />
Sky and BT agreed to pay a<br />
record £5.1 billion (US$7.7 billion)<br />
for live Premier League TV rights,<br />
a 70 percent increase on their current<br />
deal. Under the new contract,<br />
168 games will be shown at an<br />
average cost to the broadcasters<br />
of £10.2 million per match, underlining<br />
the eye-watering costs<br />
associated with sports. And bigger<br />
TV audiences translate to golden<br />
handshakes for players. Deloitte<br />
predicts that Premier League<br />
clubs’ player spending will total a<br />
record £2.5 billion in 2016/2017.<br />
Among the most affluent<br />
sports today are football, golf,<br />
tennis, basketball, car racing<br />
and boxing, some for their eyewatering<br />
wages and some for<br />
their lucrative sponsorship deals.<br />
The wealthiest F1 drivers have a<br />
combined US$1.6 billion between<br />
them, according to Wealth-X,<br />
with German seven-time world<br />
champion Michael Schumacher<br />
at the top of the list with a US$780<br />
million fortune. As for basketball<br />
players, the top ten richest NBA<br />
players have combined assets of<br />
US$1.7 billion, lead by LA Lakers<br />
guard Kobe Bryant, who has assets<br />
of US$290 million, and Cleveland<br />
Cavaliers player LeBron James,<br />
with US$280 million.<br />
“Sportspeople never used to<br />
be rockstars,” said Mike Byrne, UK<br />
director at Wealth-X.. “But over<br />
the last ten years compensation<br />
has gone through the roof, and<br />
looks set to continue as long as<br />
the fan base grows.”<br />
Stars are compensated differently<br />
according to the sport.<br />
Team players like footballers and<br />
basketball players earn more<br />
money from contracts and wages<br />
and the best get supplementary<br />
sponsorship deals. Solo athletes<br />
like F1 drivers, tennis players and<br />
golfers rely more on winnings<br />
and endorsements, said Byrne.<br />
And while they may be at the top<br />
of their game on the pitch or the<br />
track, but when it comes to managing<br />
their money, sports stars<br />
keep getting their fingers burned.<br />
Which is why a growing number of<br />
private banks and wealth managers<br />
are targeting sports stars as a<br />
lucrative – and needy – sector.<br />
Earlier this year it was reported<br />
that a number of sports VIPs had<br />
been linked to an alleged tax<br />
avoidance scheme run by London<br />
film firm, Ingenious Media. Those<br />
linked included footballers past<br />
and present Gary Linekar, David<br />
Beckham, Steven Gerrard and<br />
Wayne Rooney, and former England<br />
cricketers, including ex-England<br />
Captain Michael Vaughan,<br />
Paul Collingwood, Matthew Hoggard<br />
and Ashley Giles who are<br />
reportedly liable for unpaid tax.<br />
(Ingenious Media denies these<br />
allegations and believes the partnerships<br />
to be bona fide commercial<br />
film partnerships. Ingenious<br />
and HMRC are currently involved<br />
in proceedings before the First<br />
Tier Tribunal over the tax status of<br />
the partnerships.) Meanwhile ex-<br />
England goalkeeper David James<br />
was reportedly declared bankrupt<br />
last year after he allegedly lost<br />
over £7 million on bad property<br />
bets and gambling. Meanwhile in<br />
the US, as many as 78 percent of<br />
NFL players are either bankrupt or<br />
under financial stress within two<br />
years of retiring. In the NBA, 60<br />
per cent are bankrupt within five<br />
years, according to a 2009 report.<br />
The reason, more often than<br />
not, comes down to bad advice.<br />
“The problem is that sportspeople<br />
often get very wealthy,<br />
very young, and are often not<br />
well-versed in accounting matters,”<br />
pointed out Lee Goggin, cofounder<br />
of Findawealthmanager.<br />
com, a London-based guide to<br />
wealth advisors.<br />
Sports stars have uneven income<br />
streams and an uncertain<br />
end to their career from the threat<br />
of injuries. While some are able to<br />
go into sports coaching, media,<br />
or even like ex-footballer Robbie<br />
Fowler, property investment masterclasses,<br />
many have no obvious<br />
career post-thirty.<br />
“The taxman does not take this<br />
peculiarity into account either,”<br />
pointed out Goggin.<br />
These types of clients require<br />
a “really 360 solution which encompasses<br />
some hardcore tax<br />
planning and jazzy structures,”<br />
he added. Guernsey image rights<br />
are a way sports stars can monetise<br />
their recognisable features<br />
and then structure that (and bequeath)<br />
it as an asset in its own<br />
right.<br />
Wealth managers including<br />
UBS, Coutts, Barclays Wealth,<br />
HSBC Private Bank, Schroders<br />
and Standard Chartered Private<br />
Bank have specialist sports wealth<br />
management desks to cater to<br />
millionaire sports stars. US investment<br />
banking giant Morgan<br />
Stanley recently opened a specialist<br />
unit in the US, and at the<br />
other end there are middle-tier<br />
advisers like Smith & Williamson<br />
and Wetherby’s.<br />
It is a changing playing field.<br />
Coutts is now advising its sports<br />
star clients to prepare themselves<br />
for the power of social media. As<br />
the influence of sport grows, this<br />
will be the next big money-maker,<br />
said Simon Hopes, executive<br />
director, sports & entertainment<br />
at Coutts.<br />
“Because of social media, image<br />
rights have never been more<br />
important. It is vital that sports<br />
men and women have expert<br />
representation to maximise their<br />
earnings opportunities in this area<br />
and grow their brand judiciously,”<br />
he said.<br />
“Digital content needs controlling<br />
as whilst incredibly powerful,<br />
the potential for catastrophe is<br />
huge,” added Hopes.<br />
Players clearly need more advice<br />
as they earn more and as media<br />
evolves. For wealth managers<br />
there is a big opportunity as well<br />
as growing competition.<br />
Those agencies that flourish<br />
will be those that can offer full<br />
service packages that will incorporate<br />
contract negotiation, brand<br />
management, digital and social<br />
media content management, merchandising,<br />
image rights and intellectual<br />
property or forge trusted<br />
partnerships to ensure that these<br />
services are fully exploited.<br />
A version of this story previously<br />
appeared in digital magazine<br />
Adoreum.-Wealth-X<br />
Managing shareholder<br />
associations<br />
ADEBISI ADEYEMI<br />
Institutional Shareholders<br />
and indeed individual<br />
shareholders are key<br />
stakeholders in any organization<br />
and play a significant<br />
role in corporate governance.<br />
The focus here is on Shareholder<br />
Associations and how<br />
managing them effectively is<br />
an important aspect of stakeholder<br />
management which is<br />
essential to the success of every<br />
company.<br />
The emergence of “Independent”<br />
Shareholder Associations<br />
in the wake of the<br />
privatization and commercialization<br />
program of the Federal<br />
Government was an indication<br />
that Nigerian investors were<br />
no longer solely interested in<br />
the economic value of their<br />
shares, but also in the influence<br />
over corporate strategy<br />
and management afforded<br />
by ownership. Some of the<br />
Shareholder Associations have<br />
become powerful lobby groups<br />
seeking to be appeased by<br />
Board and Management. While<br />
some of these Associations<br />
provide beneficial input to the<br />
Company, others have become<br />
notorious for their “rabble<br />
rousing” activities at General<br />
Meetings, thereby losing the<br />
opportunity to make meaningful<br />
contributions to Company<br />
performance.<br />
The Securities and Exchange<br />
Commission (SEC)<br />
had attempted to regulate the<br />
activities of Shareholder Associations<br />
by issuing a Code<br />
of Conduct for Shareholder<br />
Associations. This initiative<br />
was an attempt to address<br />
observed negative practices of<br />
Shareholder Associations in<br />
the capital market, particularly<br />
conduct during general meetings<br />
and their interaction with<br />
Management outside the general<br />
meetings. The Code was<br />
intended to foster an adherence<br />
to the highest standard of<br />
ethical conduct by Shareholder<br />
Associations.<br />
According to the Code,<br />
Shareholder Associations are<br />
required to be registered with<br />
both SEC and the Corporate Affairs<br />
Commission (CAC). Mem-<br />
Adeyemi is managing director,<br />
DCSL Corporate Services Limited<br />
(badeyemi@dcsl.com.ng)<br />
bers and officers of Shareholder<br />
Associations are barred from<br />
attending general meetings of<br />
a company in which they are<br />
not shareholders and required<br />
to conduct themselves with<br />
decorum during general meetings.<br />
The success of the Code<br />
thus far in achieving its avowed<br />
objectives remains doubtful.<br />
Managing the relationship<br />
with Shareholder Associations<br />
should be a priority and<br />
if properly channeled, their<br />
activities could constitute a<br />
positive force in shaping the<br />
direction of corporate decision<br />
making in companies. The following<br />
strategies are suggested<br />
towards getting the best out of<br />
Shareholder Associations:<br />
•Accreditation – To give<br />
effect to the SEC Code of Conduct,<br />
it is advised that the<br />
Company Secretary should<br />
institute an accreditation process<br />
through which only those<br />
Associations compliant with<br />
the Code are recognized.<br />
•Shareholder Education<br />
– Members of Shareholder<br />
Associations could benefit tremendously<br />
from relevant training<br />
that would expose them to<br />
best practice.<br />
•Adequate Disclosure -<br />
Shareholders should be kept<br />
informed through annual reports,<br />
interim reports and<br />
other strategic communication<br />
of material information relating<br />
to the companies’ business,<br />
directors and management.<br />
Companies should put in place<br />
an Investor Relations Policy<br />
to promote regular, effective<br />
and fair communication with<br />
shareholders.<br />
•Website - The company’s<br />
website should be easily accessible,<br />
user friendly and<br />
updated regularly.<br />
•Investor Forum – Board<br />
and Management should meet<br />
with Shareholder Associations<br />
periodically to afford a platform<br />
for keeping them upto-date<br />
with the company’s<br />
performance and other matters<br />
of interest.<br />
Concerns have been raised<br />
as to whether more shareholder<br />
involvement would disrupt<br />
the very mechanism that<br />
makes the running of public<br />
companies practical- i.e. centralizing<br />
power in the Board<br />
of Directors. It is important<br />
to strike a balance between<br />
shareholder involvement and<br />
the practical considerations of<br />
running a company efficiently.<br />
By encouraging and creating<br />
the appropriate fora for constructive<br />
engagement with<br />
Shareholder Associations, the<br />
Board can help to set the tone<br />
and expectations for good governance.
Monday 18 May 2015<br />
29
30<br />
Monday 18 May 2015
Monday 18 May 2015<br />
BUSINESS DAY<br />
31<br />
Start-Up DIGESt<br />
TOOLKIT FOR ENTREPRENEURSHIP<br />
‘I started my<br />
business with<br />
N25,000’<br />
Page 32<br />
For sponsorship enquiries<br />
call - 0806 054 7811,<br />
0802 601 1296<br />
Tourism: The<br />
diamond in the<br />
dirt<br />
Page 34<br />
Establishing a modern bakery<br />
OLUMAKINDE ONI<br />
Bread is a major product<br />
of bakery and<br />
about the most demanded<br />
all over the<br />
world. The implication<br />
of this is that demand for<br />
bread is automatic. Consumption<br />
of bread cuts across all ages,<br />
gender and races. Bread is taken<br />
virtually every minute. It can be<br />
taken as breakfast, or lunch or<br />
even as a dinner. It is a readymade<br />
food that does not demand<br />
further preparation, except for<br />
those who want to toast it.<br />
Raw materials for bread production<br />
are readily available.<br />
The major raw material is wheat<br />
flour, which is heavily imported<br />
into the country.<br />
Bakery can be managed by<br />
middle or low level manpower.<br />
The ease of set-up needs not be<br />
over- flogged.<br />
Bakery belongs to the smallscale<br />
group. Its establishment<br />
will create more jobs and wealth.<br />
Other benefits include reduction<br />
of food crisis and social vices<br />
as well as stemming of hunger.<br />
Establishment of bakery is<br />
profitable. Our investigation has<br />
revealed that percentage return<br />
on sales is about 40, while that of<br />
return on investment is above 200.<br />
In view of the above, bakery<br />
establishment is recommended<br />
for serious-minded and forwardlooking<br />
investors.<br />
Technical information<br />
The major raw material for<br />
bread production is wheat flour.<br />
Other ingredients are sweeteners,<br />
yeast, butter flavour, printed<br />
nylon and the raising material.<br />
Food regulatory authorities<br />
frown at the use of potassium<br />
bromade (a raising element)<br />
as it has great side effects on<br />
people’s health.<br />
Equipment needed for bakery<br />
are milling machine, blending,<br />
moulds and roller. The production<br />
process involves milling,<br />
dough mixing, rolling, cutting,<br />
dough filling and baking. Slicing<br />
Financial implication<br />
Pre-investments - N100,000<br />
Accommodation - N300,000<br />
Plant and Machinery - N3,250,000<br />
Utilities - N1,500,000<br />
Working Capital/Others - N1,000,000<br />
TOTAL - N6,150,000<br />
can also be done if the desire is to<br />
produce sliced bread. To be successful<br />
in bakery project, there<br />
must be a good product and<br />
packing, but the investor must<br />
be cautious about credit sales.<br />
Note: The scope can be lower<br />
or higher depending on the financial<br />
strength of the investor.<br />
The first step in project implication<br />
is preparation of feasibility<br />
study/business plan showing<br />
the technical, financial and market<br />
details of the project.<br />
This can be provided for seriousminded<br />
investors.<br />
Annual Turnover N26 million<br />
Annual Net Profit N10.5 million<br />
% return on sales: 40.4%<br />
%return on Investment Above 200%<br />
This is no doubt a good project.<br />
Serious- minded investors<br />
can be assisted in realising this<br />
project.<br />
Contact: 08023058045, olumakindeoni2@yahoo.com<br />
Packaged fufu powder for local, export markets<br />
What has prompted<br />
the writer about this<br />
project is a result<br />
of recent investigation<br />
carried out in which it<br />
was discovered that there has<br />
been tremendous change in the<br />
consumption pattern of people,<br />
both at home and abroad, on the<br />
need to eat fufu being prepared<br />
by them from the powder.<br />
It was further discovered<br />
that existing producers in Nigeria<br />
couldn’t meet up with<br />
the demand of the users of this<br />
all-important product. Not only<br />
that, export market for fufu<br />
powder is widening every day.<br />
In this regard, forward-looking<br />
and aggressive investors can<br />
capitalise on this viable investment<br />
opening.<br />
Investment justification<br />
Raw materials for production<br />
of fufu powder are readily available<br />
in Nigeria, as the basic raw<br />
material is cassava. Nigeria is<br />
the second largest producer of<br />
cassava in Africa after Zaire and<br />
fifth in the world.<br />
About 10 million metric tons<br />
of `raw cassava are produced in<br />
Nigeria annually. Nigeria has<br />
the potential (land and human<br />
resources) to produce more than<br />
100 million metric tons per annum<br />
of cassava tubers.<br />
The demand for fufu powder<br />
in Nigeria and abroad cannot<br />
be overemphasised. Fufu is very<br />
rich in carbohydrate and the<br />
smooth texture, when prepared,<br />
is an attraction. Fufu powder<br />
produced from factories and<br />
well packaged will gain instant<br />
acceptability from consumers.<br />
The profitability of the project is<br />
not in doubt as it costs a maximum<br />
of N80, 000 to produce a<br />
ton, which is currently being<br />
sold at N150,000 (minimum) in<br />
the market.<br />
A profit of N70,000 per metric<br />
Continues on page 33
Monday 18 May 2015<br />
32 BUSINESS DAY<br />
Start-Up DIGEST<br />
How Airtel’s ‘Catapult-A-Start-Up’<br />
drives entrepreneurship<br />
ODINAKA ANUDU<br />
Start-Up DIGEST<br />
#BDStartupDigest<br />
Team<br />
Editorial Direction<br />
Ikenna Obi<br />
Staff Writers<br />
Oluyinka Alawode<br />
Odinaka Anudu<br />
Josephine Okojie<br />
Graphics<br />
Monday Aghaeze<br />
Contact:<br />
startupdigest@businessdayonline.com<br />
Follow us on twitter@Digeststartup<br />
On May 7 and<br />
8, 2013, the<br />
Responsible<br />
Business Summit<br />
was held in<br />
London, the United Kingdom.<br />
The rationale behind<br />
the summit was to fashion<br />
out how best businesses<br />
could marry profitability and<br />
social responsibility.One<br />
of the strongest and most<br />
salient take-aways from the<br />
event was that ‘businesses<br />
cannot be successful when<br />
the society around them<br />
fails’.<br />
In Nigeria, many corporations<br />
look away while one<br />
out of three start-ups dies<br />
within three years. But Airtel<br />
Nigeria, a leading telecoms<br />
operator, has demonstrated<br />
that it is not only a responsible<br />
corporation but also a<br />
responsive one, with a solid<br />
plan to catapult start-ups to<br />
conglomerates.<br />
Recently, Airtel launched<br />
an entrepreneurial initiative<br />
tagged ‘Catapult-a-Start-up’,<br />
a platform which aims to<br />
inspire innovation and assist<br />
start-up service providers<br />
towards actualising their<br />
business goals and dreams.<br />
Airtel provided this<br />
platform for budding service<br />
providers to receive<br />
advanced mentoring from<br />
industry veterans, funding,<br />
marketing, and also improve<br />
their skills to become successful<br />
using their creativity.<br />
The firm made it explicitly<br />
clear from the outset<br />
that start-ups interested in<br />
participating in the programme<br />
should submit their<br />
ideas and presentations to<br />
the ‘Catapult-a-Start-up’<br />
website at www.cas.ng, for<br />
evaluation.<br />
Further procedures were<br />
equally clear. After the initial<br />
evaluation, selected startups<br />
would be invited to pitch<br />
their ideas to a panel of esteemed<br />
judges who would<br />
do a thorough evaluation<br />
and select the best start-up<br />
proposals.<br />
The promoters of the selected<br />
start-up proposals<br />
would then be supported<br />
with a cash prize of N1 million,<br />
including mentoring,<br />
funding, marketing and a<br />
chance to integrate their<br />
developed apps and services<br />
on the Airtel platform, gaining<br />
direct access to the telco’s<br />
large customer base.<br />
L-R: Tomi Davies, chairman and founder, Mobile Monday; Zubair Abubakar, co-founder/CEO, Chop Up; Roht Arora, assistant<br />
marketing manager, Airtel; and Nitin Anand, vice- president, data products and services, during the Airtel Catapulta-Startup<br />
prize presentation in Lagos recently<br />
Speaking during the<br />
launch in Lagos, Segun Ogunsanya,<br />
managing director<br />
and chief executive officer,<br />
Airtel Nigeria, said that Airtel,<br />
as an innovative and<br />
forward thinking brand, initiated<br />
the programme in line<br />
with its vision to encourage<br />
innovation and empower<br />
young Nigerians by creating<br />
opportunities for them to<br />
bring their business ideas to<br />
fruition.<br />
“At Airtel, we are passionate<br />
about building a community<br />
for young talented<br />
Nigerians. We are aware of<br />
the abundance of young<br />
people who are blessed with<br />
the skills to develop relevant<br />
apps with most of them not<br />
having the opportunity to<br />
showcase or develop their<br />
skills,” Ogunsanya said.<br />
“Through the Catapulta-Start-up<br />
programme, we<br />
aim not only to identify talent,<br />
but also to encourage<br />
local content. The apps and<br />
services developed by these<br />
start-ups will ride on Airtel’s<br />
superior 3.75G network in<br />
Nigeria and the large customer<br />
base. Airtel will continue<br />
to go the extra mile at<br />
empowering them to succeed<br />
in their respective endeavours,”<br />
he added.<br />
True to his words, winners<br />
have emerged in Airtel’s<br />
‘Catapult-a Start-up’.<br />
One thing that stands out<br />
all the winners is that their<br />
businesses exude creativity<br />
and are all targeted at solving<br />
current problems of the<br />
country.<br />
We usher you into the<br />
world of Samson Abioye,<br />
CEO, Check Right (Pass.<br />
Ng), based in Ikoyi, Lagos,<br />
one of the winners. Abioye<br />
runs Pass.ng, which is an<br />
examination testing platform<br />
for students, targeted<br />
at secondary school leaving<br />
students preparing to sit for<br />
major examinations in Nigeria<br />
such as the West African<br />
Senior School Certificate<br />
(WASSCE), the National Examinations<br />
Council (NECO)<br />
and the Unified Tertiary<br />
Matriculation Examination<br />
(UTME).<br />
The firm enables candidates<br />
to take tests and<br />
prepare themselves with<br />
the chance of getting better<br />
ahead of the exams.<br />
“We think we were selected<br />
by Airtel because we have<br />
a good idea. We can scale<br />
very fast and we are delivering<br />
a product that is needed<br />
in the market as people want<br />
to pass,” said Abioye.<br />
“The app is currently being<br />
deployed on playstore<br />
and the service is available<br />
on our website (www.pass.<br />
ng). It costs N100 for a day to<br />
access full test; N200 a week<br />
and N500 a month,” Abioye<br />
further said, adding, “With<br />
the cash donation from Airtel,<br />
we hope to develop our<br />
service more, example in the<br />
area of audio-video tutorials.<br />
So it will help us improve our<br />
services as we are not yet<br />
where we want to be.”<br />
Another winner is Ovo<br />
Emorhokpor, CEO, Yuzah,<br />
based in Lagos, with an online<br />
platform, www.yuzah.<br />
com.<br />
Yuzah is an online market<br />
place that connects buyers<br />
and sellers of diesel who<br />
meet and transact businesses<br />
on daily basis.<br />
Emorhokpor, whose online<br />
firm has had 1,000 orders<br />
since December 2014,<br />
said, “We believe we were<br />
chosen because Airtel recognised<br />
our service solves a<br />
problem on two angles. For<br />
the customers it is a convenient<br />
way of getting diesel,<br />
and for the sellers, it helps<br />
them get across to buyers”.<br />
“Airtel has an experience<br />
in the tele-marketing space<br />
and is also a trusted brand.<br />
The firm has a wide network<br />
of partners around the country<br />
which can also benefit us;<br />
its number of subscribers is<br />
s huge target we could tap<br />
into,” Emorhokpor said.<br />
Odunayo Eweniyi, chief<br />
quality officer, and Joshua<br />
Chibueze, chief marketing<br />
officer, PUSH CV, Yaba,<br />
Lagos, were joint winners.<br />
Push CV is an internet company<br />
that enables efficient<br />
recruitment by providing<br />
pre-screened candidates<br />
for employers and recruitment<br />
agencies. It is an online<br />
employability program coorganised<br />
by companies like<br />
GT bank, Airtel and McKenzie,<br />
among others, according<br />
to Eweniyi and Chibueze.<br />
“We are currently in the<br />
last stage of the training<br />
and will be providing 5,000<br />
qualified candidates to present<br />
to employers,” they said,<br />
adding, “We believe we were<br />
chosen by Airtel because we<br />
have a good idea.”<br />
Olusegun Bright, Chief<br />
Technical Officer, Match Up,<br />
based in Ilupeju, Lagos, was<br />
also among the winners. The<br />
firm helps find and connect<br />
people, especially singles between<br />
the ages of 18 and 45.<br />
“The app is not currently<br />
being deployed anywhere.<br />
But it will be on play store<br />
once it is ready. The app is<br />
free to download and payment<br />
is made on subscription<br />
basis,” Bright said.<br />
According to Bright, his<br />
firm was chosen by Airtel not<br />
just because of a good idea<br />
but for its several great ideas.<br />
“We understood how our<br />
idea will work in tandem<br />
with Airtel. Its mentorship is<br />
superb. We have learnt a lot<br />
and also the clout of having<br />
Airtel as a partner is beautiful,”<br />
he added.
Monday 11 May 2015<br />
BUSINESS DAY<br />
33<br />
Start-Up DIGEST<br />
‘I started my business with N25,000’<br />
Abimbola Odunusi is the chief executive officer of Sweet N Savy Couture. She is a banker<br />
and an entrepreneur with a vast experience in the fashion industry. In this interview with<br />
JOSEPHINE OKOJIE, she reveals how she manages her careers as a banker and a designer.<br />
When did you start the<br />
business?<br />
I<br />
started my fashion<br />
business in 2012,<br />
but got the business<br />
registered last year.<br />
I have been designing<br />
since 2002. I went<br />
into sowing because of<br />
those designs I was making.<br />
After my university education,<br />
while I was waiting<br />
for the National Youth<br />
Service Corps (NYSC), I<br />
decided to attend a fashion<br />
school. After my NYSC,<br />
I got a job with a fashion<br />
line, where I learnt how to<br />
source for good fabrics and<br />
also how to talk to customers<br />
and get the fabrics for<br />
them. All the fabrics for<br />
my business are sourced<br />
locally. I go to Yaba and<br />
Eko-Idumota for them.<br />
What inspired you to<br />
move into the business?<br />
I see that a lot people<br />
have good fabrics but really<br />
don’t get to put them<br />
together in a better way<br />
that would make them<br />
look beautiful. I design<br />
clothes and make people<br />
look unique. Basically it’s<br />
about making unique pieces<br />
that will make others tell<br />
you that you look bright.<br />
A woman brightens up<br />
when people tell her she<br />
is beautiful. This is what<br />
I want to achieve for my<br />
clients. Before I started my<br />
fashion line, I had a nasty<br />
experience with a tailor<br />
who used to spoil my fabrics.<br />
You need to build that<br />
confidence so that your<br />
client can trust you. I even<br />
have to make free dress<br />
for some of my colleagues<br />
so that I can make them<br />
trust me. And when others<br />
see it, they would want to<br />
patronise me.<br />
What was your start-up<br />
capital?<br />
Abimbola odunusi<br />
I started my business<br />
with N25, 000 by buying<br />
sewing machines and accessories<br />
like needles,<br />
threads and zips.<br />
Who are your target<br />
clients in the business?<br />
I specialise in only female<br />
clothes. So I target female<br />
clients, both old and<br />
young. The fashion industry<br />
is highly populated, so<br />
as a fashion designer with<br />
a fashion line, you need<br />
to distinguish yourself to<br />
remain relevant in the industry<br />
and to your clients.<br />
Your client needs to trust<br />
you before they give you<br />
their fabrics and money to<br />
make their dress.<br />
Have you received any<br />
external support from any<br />
organisation, apart from<br />
clients that have helped<br />
the business grow?<br />
I have not received any<br />
external support from any<br />
organisation. You really<br />
don’t need much to start a<br />
fashion business.<br />
Tell me a little about<br />
your background, that<br />
is, your educational and<br />
work backgrounds?<br />
My name is Abimbola<br />
Odunusi. I am a banker<br />
and I have a fashion line<br />
called Sweet N Savy Couture.<br />
I am a graduate and<br />
went into the fashion industry<br />
immediately after<br />
my university education<br />
before I got my job with<br />
a bank.<br />
How far would you say<br />
the business has grown<br />
since starting?<br />
Since starting, my business<br />
has grown, but I have<br />
limited its growth because<br />
I have to combine my<br />
banking job and my fashion<br />
business. During the<br />
festive season, I don’t take<br />
many jobs so I can deliver<br />
on time to my clients. Since<br />
I started working, I had to<br />
slow down on my fashion<br />
business.<br />
Do you have employees,<br />
full-time or parttime?<br />
I don’t have any employee.<br />
I do most of the<br />
stuffs alone and give the<br />
sewing out to other tailors<br />
to speed up the process. I<br />
sketch a lot and do most of<br />
the designs myself.<br />
What challenges have<br />
you faced since starting<br />
your business?<br />
The biggest challenge I<br />
face is merging my job as<br />
a banker and my fashion<br />
business. It has really being<br />
very stressful.<br />
Another major challenge<br />
I face is power, because<br />
I do most of my job<br />
in the night and there is<br />
always no light at that time.<br />
What is your advice to<br />
other entrepreneurs?<br />
Passion! If you want to<br />
go into fashion, you must<br />
have passion for it to be<br />
a success. Be good looking<br />
and confident so that<br />
people see good designs on<br />
you and want you to make<br />
same for them.<br />
Continued from page 31<br />
Packaged fufu powder for local...<br />
ton of fufu powder produced<br />
is therefore possible.<br />
Other social and economic<br />
benefits derivable<br />
are employment generation,<br />
rural income generation,<br />
import substitution<br />
(thereby conserving our<br />
foreign exchange) reduction<br />
in social vices and<br />
increase in value added<br />
non-oil export.<br />
Production technology/<br />
technical information<br />
Fufu powder can only<br />
be produced via good fermentation<br />
and the use of<br />
stainless steel equipment.<br />
Fufu powder processing<br />
involves washing and<br />
peeling of raw materials,<br />
chipping, fermentation,<br />
pulverisation, sieving,<br />
sedimentation, sieving,<br />
de-watering, drying and<br />
packaging. Implementation<br />
procedure involves<br />
feasibility study prepara-<br />
tion (can be provided on<br />
request). Finance sourcing,<br />
plant and equipment<br />
sourcing, procurement of<br />
appropriate accommodation,<br />
recruitment of personnel,<br />
raw materials procurement<br />
and commercial<br />
production take-off.<br />
Profitability<br />
Daily net profit of<br />
N70,000 has been computed,<br />
working for a con-<br />
Financial Implication<br />
The project will cost a sum of N5,100,000 broken<br />
down as follows:<br />
1. Pre-investments 100,000<br />
2. Plant and Machinery 2,000,000<br />
3 Accommodation (Rental) 500,000<br />
4. Utilities 1,500,000<br />
5. Working capital for take-off 1,000,000<br />
Total<br />
N5,100,000<br />
servative figure of 200<br />
days in a year will yield<br />
N14 million net profit on<br />
annual basis. This is no<br />
doubt a good source of<br />
livelihood for Nigerians,<br />
especially retired civil<br />
servants, public servants,<br />
bankers, corporate bodies<br />
looking for means of livelihood<br />
and diversification.<br />
Investors can be assisted<br />
in the establishment of the<br />
project.
Monday 18 May 2015<br />
34 BUSINESS DAY<br />
32 Start-Up DIGEST<br />
Mentoring Notes<br />
Tourism: The diamond in the dirt<br />
Wa n l e<br />
A k i n -<br />
boboye,<br />
founder<br />
of La<br />
Campagne Tropicana<br />
Beach Resort, Ikegun,<br />
Lagos, is a man of many<br />
firsts. A true visionary<br />
and entrepreneur, he has<br />
taken tourism in Nigeria<br />
by storm through his<br />
numerous projects and<br />
made an indelible mark<br />
in a hitherto undefined<br />
and under-exploited industry.<br />
His interventions<br />
span about 30 years since<br />
returning to these shores<br />
after a study stint in the<br />
United States.<br />
Akinboboye’s La Campagne<br />
Tropicana has<br />
been described as a beach<br />
resort that is entirely an<br />
African themed enclave<br />
but enjoys a blend of natural<br />
and sophisticated<br />
aesthetics. In 2013, it was<br />
named the best beach<br />
resort in Nigeria and in<br />
2014 it was named the<br />
best beach resort in West<br />
Africa in the annual Africa<br />
Travel Award organized<br />
by Akwaaba.<br />
Tourism, as an enterprise,<br />
made very little<br />
sense when the 29-yearold<br />
Akinboboye made<br />
his entrance and almost<br />
everyone he approached<br />
had one major reason or<br />
the other why it could not<br />
be done. But like a true<br />
Wanle Akinboboye<br />
entrepreneur, he persevered,<br />
and today, La<br />
Campagne Tropicana is<br />
a shining example of a<br />
beach tourism enterprise<br />
in Nigeria.<br />
Wanle Akinboboye’s<br />
The seven laws of ideas<br />
As far as Nigeria is concerned, one can<br />
safely say no understands the subject of<br />
branding as much as charismatic branding<br />
maestro and founder of Alder Consulting,<br />
Leke Alder.<br />
Recently, Mr Alder was at Covenant Christian<br />
Centre’s intellectual fair The Platform, Abuja on<br />
May 1st where he spoke about how entrepreneurs<br />
can improve themselves, identify and execute<br />
business ideas successfully. “If you can generate<br />
N1000 you can generate $100 million. All you<br />
need is intelligence and doggedness,” he opined<br />
during his session.<br />
The creative expert also shared seven foundational<br />
pieces of intelligence to act upon to<br />
transform intangible thoughts into multimillion<br />
dollar revenue streams. According to Adegoke<br />
Oyeniyi, the founder of Enterprise54.<br />
com, a pan-African entrepreneurship intelli-<br />
MENTOR TIPS<br />
gence media agency, these seven principles can guide<br />
a young entrepreneur in the transition from idea to<br />
business.<br />
•Ideas need a worthy host - someone to incubate<br />
and nurture it. Ideas always look for worthy hosts and<br />
can depart if not taken seriously.<br />
• Ideas take over the life of the host. All successful<br />
ideas are run by people who are totally, totally committed<br />
to what they do. You must be totally committed.<br />
•Ideas become you. That’s why companies take on<br />
the persona of their founders. Only Richard Branson<br />
can start an airline, call it Virgin and get away with it!<br />
•Ideas like to multiply.<br />
•Nothing is impossible to ideas. Just think big.<br />
Ideas don’t know impossibility.<br />
•An idea cannot grow bigger than the host. Expand<br />
your mind. God has no problem with thinking. You<br />
cannot accommodate a large vision with a small mind.<br />
passion for the promotion<br />
of African culture as well<br />
as his strides in tourism<br />
has distinguished him on<br />
a global scale. He became<br />
the ambassador for tourism<br />
for the World Conference<br />
of Mayors in 2010<br />
and currently doubles as<br />
special adviser on tourism<br />
to the governor of<br />
Ondo State, among others.<br />
But he wasn’t nearly<br />
done. He went on to start<br />
the La Campagne Club,<br />
Ikeja, Atunda Entertainment,<br />
Corporate Guards,<br />
and Motherland Beckons<br />
– a platform designed to<br />
sell Africa to the world,<br />
urging Africans in diaspora<br />
as well as individuals<br />
interested in Africa<br />
worldwide to visit Africa<br />
on a recurrent basis.<br />
Success is a magnet,<br />
though. The US-trained<br />
tourism enthusiast was<br />
visited in his Akure base<br />
recently by an envoy from<br />
the government of Cote<br />
d’ Ivoire. Their mission<br />
was to present a request<br />
by President Alhassan<br />
Qattarato to the Ondo<br />
State Governor, Olusegun<br />
Mimiko, to release<br />
Otunba Wanle Akinboboye,<br />
his special adviser<br />
on tourism, to help in the<br />
development of the country’s<br />
tourism sector.<br />
According to the envoy,<br />
Cote d’Ivoire – an<br />
agricultural giant and<br />
largest producer of cocoa<br />
in Africa - is looking to<br />
diversify its economy with<br />
focus on tourism as a veritable<br />
source. The country<br />
had last year signed<br />
an agreement Akinboboye,<br />
for the building of<br />
African-themed resorts<br />
(a replication of La Campagne<br />
Tropicana Beach<br />
Resorts) in different locations<br />
across the country.<br />
He had also been honoured<br />
in Cote d’Ivoire<br />
with a chieftaincy title<br />
– Chef Ole Tribu de Paouflor<br />
Izuerioula Region de<br />
Marahoue, which comes<br />
with responsibility of superintending<br />
over 151<br />
villages in the region de<br />
Marahoue.<br />
Across Nigeria, Akinboboye<br />
is seen not only<br />
as a resort owner and<br />
job creator, but a talent<br />
moulder as well. Over the<br />
years, he has nurtured interests<br />
in resort development,<br />
entertainment, and<br />
fashion. He even works<br />
in rural communities as<br />
a philanthropist. Some of<br />
his major discoveries are,<br />
‘the drummer girl’, ‘Aralola<br />
Olamuyiwa’ popularly<br />
known as ‘Ara’; and ‘Oluwatoyin<br />
Oluwaferanmi<br />
Akinola’ also popularly<br />
called ‘Afe Onikoko,’ who<br />
like her predecessor is<br />
a marvel to watch as a<br />
world-class artist.<br />
While we cannot begrudge<br />
the Ivorians their<br />
appreciation and pursuance<br />
of mastery, one can<br />
only hope that the governments<br />
of the remaining<br />
35 states and indeed<br />
the Federal Government<br />
of Nigeria do not fail to<br />
avail themselves of the<br />
potentially huge revenue<br />
to be made from standard<br />
tourism. Better still, we<br />
hope local entrepreneurs<br />
can emulate the steps of<br />
Akinboboye. Tourism is a<br />
diamond in the dirt.<br />
NOTE: This article<br />
was developed by Lara<br />
Sanni. For information/<br />
inquiries on entrepreneurship<br />
in Nigeria and the<br />
Mara Mentor initiative,<br />
email:support@mentor.<br />
mara.com. You can also<br />
join the largest entrepreneurship<br />
community in<br />
Nigeria on www.mentor.<br />
mara.com or download<br />
the Mara Mentor app on<br />
Android, Apple, Blackberry<br />
and Nokia stores.
Monday 18 May 2015<br />
35
Monday 18 May 2015<br />
36 BUSINESS DAY<br />
CITYFile<br />
Fashola urges artisans to<br />
take insurance policy<br />
JOSHUA BASSEY<br />
Governor Babatunde Fashola of Lagos<br />
State has urged tradesmen and artisans<br />
operating in the state to take insurance<br />
policies against risks associated with<br />
their businesses in order not to shut down<br />
their businesses in the event of occurrences<br />
that are beyond their capacities to handle.<br />
Fashola spoke at the 6th Tradesmen and Artisans’<br />
Day, in Lagos, an event marked annually<br />
by the state ministry of commerce and industry<br />
with the aim of bringing the artisans into the<br />
formal economy, and better position them to<br />
benefit from training programmes to better<br />
and sharpen their skills for greater productivity.<br />
The Tradesmen and Artisans’ Day celebration<br />
was initiated in 2010, and so far,<br />
thousands of them have benefited from<br />
training programmes organised by the<br />
ministry in collaboration with Lagos State<br />
Technical & Vocational Education Board<br />
(LASTVEB).<br />
According to the governor, with the impressive<br />
performance being recorded by<br />
the artisans and tradesmen, it was necessary<br />
that they begin to gradually move away from<br />
old beliefs and embrace new ways of doing<br />
business and sustaining the growth, by taking<br />
insurance policies.<br />
The governor also called on the artisans<br />
and tradesmen to organise themselves into<br />
clusters, adding that it was easier for them<br />
access and benefit from government’s programmes<br />
as a group than as individuals.<br />
“Clustering together will enhance exchange<br />
of ideas among you,” Fashola stated.<br />
Oluseye Oladejo, the special adviser to<br />
Fashola on commerce and industry, while addressing<br />
the group, the said that a total of 9,780<br />
artisans and tradesmen drawn from different<br />
registered associations had been trained on<br />
vocational skills. According to Oladejo, of this<br />
figure, 2,000 had recently gone through eightweek<br />
intensive training. They were presented<br />
with certificates of completion.<br />
Bola Sanusi, president of Lagos State<br />
Council of Tradesmen and Artisans (LAS-<br />
COTA), however, placed some demands<br />
before the government including the need<br />
to complete the Gberigbe enterprise zone<br />
with standard workshops for the artisans. He<br />
explained that if completed, the workshop<br />
would reduce the costs of their operations.<br />
NDLEA raids Indian hemp<br />
joints in Benin<br />
IDRIS UMAR MOMOH, Benin<br />
Edo State command of the Nigeria Drug<br />
Law Enforcement Agency (NDLEA)<br />
has arrested over 30 persons in Benin<br />
in connection with alleged dealing on cannabis<br />
drugs.<br />
CityFile gathered that the operation was<br />
carried out by the armed unit of the antidrugs<br />
agencies.<br />
The raid was however said to have<br />
caught some dealers and consumers of<br />
marijuana cannabis, popularly known as<br />
“Indian hemp”, unaware.<br />
Some of the popular joints raided by<br />
NDLEA include Ugbiyoko, Upper Ekenwan<br />
Road by Power Line, Ekenwan Park, popular<br />
Dekin spot off Owina among others.<br />
Residents within the affected areas commended<br />
the command for rising up to its<br />
responsibility in view of the ongoing reports<br />
of cult clash which has left no fewer than 25<br />
persons dead.<br />
The officials were also said to have seized<br />
several bags of India hemp.<br />
One of the residents at Owina area,<br />
off Ekekhuan Road, simply identified as<br />
Dickson, who witnessed the operation,<br />
described the arrest as timely.<br />
The new waste sorting facility at Solous in Alimosho area of Lagos.<br />
10mw expected from waste<br />
recovery facility in Lagos<br />
JOSHUA BASSEY<br />
A<br />
waste recovery facility that<br />
enables sorting and conversion<br />
of waste into other useful<br />
materials has begun operation<br />
in Lagos.<br />
The facility, which is being developed<br />
in phases, is sited within the Lagos Waste<br />
Management Authority (LAWMA) landfill<br />
site, Solous in Alimosho. It would see the<br />
investor, West Africa Energy in partnership<br />
with Lagos State government, graduating<br />
from waste recovery (first phase) to<br />
the production of energy (2nd phase) and<br />
organic fertiliser (3rd phase).<br />
The company intends to complete the<br />
cycle in 2020 when, according to them,<br />
they would make Alimosho landfill-free.<br />
No fewer than 130 skilled and unskilled<br />
labour and waste collectors would be<br />
required to keep the facility running.<br />
According to Paul O’Collaghan, chief<br />
executive officer of West Africa Energy,<br />
at least 10 megawatts of electricity, would<br />
be produced from the waste dump from<br />
the middle of 2016. About $20 million is<br />
to be invested in the energy production<br />
alone. “Our vision is to make Alimosho<br />
landfill-free by 2020,” said O’Collaghan<br />
Babatunde Fashola, Lagos State governor,<br />
who praised the vision, said it<br />
would generate more jobs for the locals<br />
and affordable energy for the immediate<br />
surroundings.<br />
“I make bold to say that this first material<br />
waste recovery facility in Lagos<br />
Nigeria is to operate on the Built-Operate-<br />
Manage and Transfer (BOMT), partnership.<br />
It has tenure of 12 years.<br />
“The government equity contribution<br />
was provision of the land for the construction<br />
of the facility whose aim is primarily<br />
to ensure waste segregation and support<br />
Police grapple with rising cases of child theft in A/Ibom<br />
ANIEFIOK UDONQUAK, Uyo<br />
The police in Akwa Ibom are currently<br />
grappling with increasing<br />
cases of child theft involving<br />
hoodlums and gunmen invading<br />
private residences and snatching underaged<br />
children for reasons yet to be known.<br />
According to checks by CityFile, several<br />
children have been stolen and taken away<br />
from their parents by a syndicate with<br />
links in neighbouring states where the kidnapped<br />
children are believed to be sold at<br />
exorbitant prices to childless couples who<br />
are in desperate need of children.<br />
Last year, security operatives smashed<br />
a syndicate when investigations took<br />
them to two states including Abia and<br />
Anambra. A Catholic priest was allegedly<br />
involved and was helping the security<br />
operatives unravel the circumstances<br />
leading to the disappearance of some<br />
children from Akwa Ibom. A notorious<br />
child kidnapper was also arrested by the<br />
security operatives in the process.<br />
The police have also made several<br />
arrests involving some parents allegedly<br />
selling their babies while a baby factory<br />
was also uncovered in the state. Two<br />
weeks ago, two children were snatched<br />
from their parents when gunmen invaded<br />
a private residence in Nsit Ubium local<br />
government area of the state as the children<br />
were asleep in the night.<br />
According to police sources, gunmen<br />
invaded a compound in Ikot Akan, Nsit<br />
Ubium local government, gained access<br />
to the rooms in which the children were<br />
sleeping and made away with two children,<br />
Beauty Inyene Achibong, aged four<br />
years and the landlord’s child. That was<br />
on March 24 this year, the source added.<br />
Further investigations showed that<br />
the Beauty was later found abandoned<br />
the PSP programme in the state provides<br />
easy access to waste for the company from<br />
Solous landfill sites.”<br />
The governor said the facility would<br />
provide raw materials for plastic paper<br />
and metal manufacturers throughout Lagos<br />
and beyond in commercial quantities.<br />
He added that in addition to job creation,<br />
the facility supports the immediate environment<br />
technically, educationally and<br />
financially as industrialists and students<br />
could visit and learn more about waste<br />
management.<br />
”This is multi-use facility that receives,<br />
separates and prepares recyclable materials<br />
for the end user manufacturers,”<br />
he said.<br />
Ola Oresanya, managing director,<br />
LAWMA said that with the completion<br />
of the facility, the dream of generating<br />
power for the state through waste soon<br />
be actualised.<br />
in a ‘no man’s land’ in the boundary between<br />
Abia and Akwa Ibom States near<br />
Ukwa East local government area of Akwa<br />
Ibom State.<br />
Police sources in the child and welfare<br />
department of the Akwa Ibom State police<br />
command who confirmed the incident<br />
said that an Okada rider, Michael Adienyongwe<br />
from Azumini Ndoki in Ukwa East<br />
local government area of Akwa Ibom State<br />
found the child crying by the roadside.<br />
According to the source, policemen<br />
from the criminal and investigation<br />
department (CID) of Akwa Ibom police<br />
command were drafted to the place by<br />
Gabriel Achong, the state commissioner<br />
of police, adding that “that was how<br />
Beauty was recovered and reunited with<br />
the family.”<br />
Sadly, the landlord’s child that was<br />
kidnapped same day with Beauty has not<br />
been found, the police said.
Monday 18 May 2015<br />
37
Monday 18 May 2015<br />
38 BUSINESS DAY<br />
This is M NEY<br />
A daily guide to your Personal Finance<br />
• Savings<br />
• Travel<br />
• Debt & Borrowing<br />
• Utilities<br />
• Managing your Tax<br />
Insurance can help fund befitting<br />
funerals for one’s parents<br />
...as Leadway launches family benefit plan plus<br />
MODESTUS ANAESORONYE<br />
Burial ceremonies<br />
and the<br />
associated expenses<br />
are a<br />
huge burden<br />
for many families, particularly<br />
in this part of the<br />
world. When it is for aged<br />
parents, the glamour and<br />
fanfare that follow it not<br />
only hit the purse but become<br />
an issue of worries<br />
when the wherewithal is<br />
not there.<br />
Many times, people are<br />
forced to borrow or sell<br />
their properties to meet<br />
a burial expense, which<br />
therefore makes this natural<br />
demand an important<br />
expense that should ordinarily<br />
be provided for.<br />
Here, insurance has<br />
come with a reprieve,<br />
not just to give you rest<br />
of mind to go about your<br />
normal business, but<br />
to provide you with the<br />
needed fund to give your<br />
making life beautiful for its<br />
customers.<br />
Also speaking at the<br />
product launch held at the<br />
Corporate office of Leadway<br />
Assurance in Lagos,<br />
Shadrack Sivhugwana, the<br />
general manager, life diviaged<br />
parents a befitting<br />
burial when they pass on<br />
without having to worry.<br />
And where you pass on<br />
before the beneficiary<br />
parents and spouse, the<br />
insurance cover takes<br />
care of your dependants<br />
for a certain period of<br />
time.<br />
Leadway Assurance<br />
Company Limited, well<br />
aware of this challenge,<br />
has launched a new Life<br />
product named the Leadway<br />
Family Benefit Plan<br />
Plus(LFBPP).<br />
The product is a multilife<br />
policy designed to<br />
cover funeral expenses for<br />
the assured lives (spouse,<br />
parents and/or parentsin-law<br />
that are named in<br />
the policy) and the policy<br />
holder (person who purchased<br />
the policy). The<br />
policy helps to alleviate<br />
and bury the worries associated<br />
with the funerals<br />
for elderly loved ones.<br />
Giving details of the new<br />
product, Femi Adebayo,<br />
head, life retail, explained<br />
that the policy provides funeral<br />
benefits in respect of<br />
all the assured lives as long<br />
as their death precedes<br />
that of the policyholder.<br />
The policy also provides<br />
other benefits including<br />
offering additional monthly<br />
payments to the beneficiaries<br />
of the policyholder<br />
in the event of his demise.<br />
The Family Benefit Plan<br />
Plus, in his own words, was<br />
one of the ways in which<br />
Leadway Assurance was<br />
sion, said he expected that<br />
the “…demand for funeral<br />
insurance will be the main<br />
driver of insurance growth<br />
in Africa in the next couple<br />
of years.”<br />
He therefore invites the<br />
public to take advantage<br />
of the new product and be<br />
prepared when the inevitable<br />
happened.<br />
Established over 45<br />
years ago, Leadway is<br />
a composite insurance<br />
company underwriting<br />
both Life and General<br />
Insurance business with<br />
23 branches spread across<br />
Nigeria.<br />
Leadway’s reputation<br />
has been attained by the<br />
continuing pursuit of improvements<br />
to maintain<br />
its competitive advantage<br />
within a very soft market<br />
environment. The company<br />
also offers subsidiary<br />
financial services like<br />
Bonds, Secured Credit,<br />
Miscellaneous financial<br />
losses and Fund/Portfolio<br />
management.<br />
Contentment should not be taken as complacency<br />
Contentment is the<br />
ultimate financial<br />
principle that<br />
everyone should<br />
have. Being content with<br />
what your situation, the<br />
stuff you already own, and<br />
the career you already<br />
have, is such an amazing<br />
skill to practise, but do not<br />
confuse contentment with<br />
complacency.<br />
Being content with what<br />
you have doesn’t mean you<br />
can simply sit back and<br />
wait for life to happen to<br />
you. There’s a difference<br />
between feeling satisfied<br />
and happy with what you<br />
have, and simply giving up.<br />
Strive for financial<br />
freedom<br />
The point of my article<br />
last week was not to<br />
encourage giving up on<br />
financial goals. It’s not<br />
healthy to say, “I can never<br />
make X amount of money,<br />
so I’ll just stop trying.”<br />
Instead, you should be<br />
happy with what you have<br />
already been blessed with,<br />
while still striving for financial<br />
security and freedom.<br />
Have financial goals and<br />
stick with them, while being<br />
content in your current<br />
situation.<br />
This process will look<br />
different for all of us. Sure,<br />
it would be nice to have a<br />
larger home and a bigger<br />
paycheque, but I’m not going<br />
to wait for those things<br />
to come before I start loving<br />
my life.<br />
Yet on the other hand,<br />
I’m not going to stop putting<br />
money away for a new<br />
home, or give up on reaching<br />
other financial goals.<br />
Whether I reach my financial<br />
goals or not, I will be<br />
content (well, practising<br />
contentment — it is an ongoing<br />
battle, amen?).<br />
Happiness is not found<br />
in money<br />
The most important<br />
thing to remember is that<br />
your happiness is not tied<br />
to your money or material<br />
possessions. You will<br />
always find people living<br />
below poverty and people<br />
making millions who share<br />
one thing in common —<br />
they are discontent with<br />
what they have.<br />
The point is that you<br />
will not be happier once<br />
you pay off debt, once you<br />
pay off your house, or once<br />
you make a million dollars.<br />
Why? Because while those<br />
are all wonderful financial<br />
goals to strive for, they<br />
should not be the determiner<br />
of your happiness<br />
and attitude.<br />
Change your mindset<br />
Maybe if we take a step<br />
back from the dollar signs<br />
and look at contentment<br />
in another area of life, it<br />
will be easier to see how<br />
it applies to our finances.<br />
Let’s talk about weight loss,<br />
since that is on my brain<br />
due to just having a baby<br />
two months ago.<br />
No matter how much<br />
you weigh, it is healthiest<br />
to be content with who you<br />
are. This doesn’t mean you<br />
should say that you love<br />
yourself as you are and<br />
keep shoving Twinkies in<br />
your mouth.<br />
Instead, it should be<br />
recognised as more of a<br />
process of being happy<br />
with yourself, while pursuing<br />
a healthier path for<br />
health’s sake, rather than<br />
always wishing you were<br />
someone else or thinking<br />
that you’ll be more<br />
happy/organised/a better<br />
person/etc. once you lose<br />
50 pounds. I’m sure we all<br />
know of people who have<br />
lost weight and still battle<br />
with loving themselves.<br />
Contentment does not<br />
mean giving up<br />
I truly hope this makes<br />
sense because financial security<br />
and freedom is more<br />
than just a number’s game.<br />
Many of us have money issues<br />
that are deeply tied to<br />
our emotions, and if we do<br />
not take control of them we<br />
will never experience true<br />
joy in life.<br />
Contentment is about<br />
being satisfied in who we<br />
are as people and with the<br />
blessings we already have.<br />
Don’t stop striving to pay<br />
off debt. Keep saving your<br />
money and investing so<br />
you can have a well-funded<br />
nest egg.Just remember<br />
that you shouldn’t<br />
wait to be content until<br />
all of your financial goals<br />
are met. An extra million<br />
dollars will not cure a discontent<br />
heart.
Monday 18 May 2015<br />
This is M NEY<br />
A daily guide to your Personal Finance<br />
• Savings<br />
• Travel<br />
• Debt & Borrowing<br />
• Utilities<br />
• Managing your Tax<br />
BUSINESS DAY<br />
39<br />
How to learn from<br />
your budgeting<br />
mistakes<br />
Every one of us<br />
has made mistakes<br />
with our<br />
money, and we<br />
will continue<br />
to make mistakes in the<br />
future. These are indisputable<br />
facts. However,<br />
the way we react to these<br />
mistakes is critical in our<br />
ability to grown and improve<br />
as human beings.<br />
We all encounter<br />
budget failures caused by<br />
overspending. The same<br />
methodology can be applied<br />
to financial budget<br />
failures to learn from our<br />
failures. We can use these<br />
lessons grow stronger,<br />
and avoid repeating the<br />
mistake.<br />
My personal mistake<br />
For example, a person<br />
training for a marathon<br />
runs much longer one<br />
day out of each week.<br />
I’m currently training<br />
for my fifth marathon,<br />
and I choose to have my<br />
long runs on Saturday.<br />
My training has been going<br />
extremely well, and<br />
when I left my driveway<br />
at 8:30am last Saturday I<br />
had no reason to believe<br />
my 16 mile run would be<br />
any different.<br />
Unfortunately, after<br />
only a few miles I could<br />
tell my mind wasn’t in<br />
the right place. My mental<br />
state deteriorated<br />
from there, and I actually<br />
ended up ending my run<br />
after 13 miles. My body<br />
and brain were completely<br />
exhausted.<br />
It was at that point I<br />
had a choice to make. I<br />
could either wallow in my<br />
failure, or I could reflect<br />
on what caused that run<br />
to fail. Thinking back, I<br />
realised I had overdressed<br />
for the morning weather<br />
which was 15 degrees<br />
warmer than the days<br />
previous.<br />
I also thought about<br />
how I didn’t go through<br />
my usual stretching routine<br />
as I was in a hurry to<br />
get started. I remembered<br />
downing a huge bottle of<br />
Gatorade six miles into<br />
the run, whereas I usually<br />
drink small amounts at a<br />
time. I had not followed<br />
my usual routine, and all<br />
of those things may have<br />
contributed to my run not<br />
going as planned.<br />
If you find yourself in<br />
a similar situation with<br />
your budget, here are<br />
some ways to overcome a<br />
mistake before it gets too<br />
far gone.<br />
Identify the mistake<br />
Ask yourself what was<br />
different during the time<br />
frame of the budget failure.<br />
If you’re successful<br />
most weeks, but every<br />
now and then you overspend,<br />
focus on what was<br />
out of the ordinary.<br />
Here are some of<br />
common ones that have<br />
caused me trouble in the<br />
past: Did you forget to<br />
plan your meal causing<br />
you to eat out?<br />
Did you have an unexpected<br />
car maintenance<br />
expense?<br />
Did you forget about<br />
an event or celebration<br />
that used up some of your<br />
funds?<br />
Did you not track<br />
spending causing you to<br />
exceed your self-imposed<br />
spending limit?<br />
Plan for the future<br />
Next, identify what<br />
you’re going to do to prevent<br />
the same mistake<br />
from happening again.<br />
Whether it be forcing<br />
yourself to meal plan as<br />
part of your grocery shopping,<br />
or putting events on<br />
a big calendar on your<br />
refrigerator door take action<br />
to ensure your success.<br />
Recovering from a<br />
budget failure, and learning<br />
from it are two very<br />
different activities. Recovering<br />
means you are<br />
able to cut spending in<br />
another area to make<br />
your budget whole again.<br />
That’s great, but without<br />
identifying the root cause<br />
of why, and how, you<br />
broke your budget, you<br />
are doomed to repeat the<br />
same mistake.
Monday 18 May 2015<br />
40 BUSINESS DAY<br />
This is M NEY<br />
A daily guide to your Personal Finance<br />
• Savings<br />
• Travel<br />
• Debt & Borrowing<br />
• Utilities<br />
• Managing your Tax<br />
Battling to conquer<br />
challenges of financial goals<br />
MODESTUS ANAESORONYE<br />
Life has never<br />
been easy no<br />
matter how you<br />
look at it. People<br />
who have<br />
achieved greatness in life<br />
have at one point or the<br />
other encountered one<br />
challenge or the other,<br />
and it is their ability to<br />
counter these challenges<br />
that make them great.<br />
Therefore, in pursuing<br />
your financial goal, be<br />
ready to meet some uncommon<br />
challenges and<br />
also make up your mind<br />
to face them squarely to<br />
be able to get to the next<br />
level.<br />
In appreciating these<br />
challenges, which most<br />
times are called problems,<br />
we are ordinarily<br />
weighed down and feel<br />
discouraged. Some people<br />
at this point lose hope<br />
lem Solving and Decision<br />
Making” presented<br />
by Rajive Sharma at one<br />
of Phillip Consulting<br />
Training Series, problem<br />
is described as “an<br />
obstacle which makes<br />
it difficult to achieve a<br />
desired goal, objective<br />
or purpose. It is also referred<br />
to as a situation,<br />
condition or issue that is<br />
yet unresolved.<br />
While problem solving,<br />
is the act of narrowing<br />
down the possibilities,<br />
choosing a course of action,<br />
and determining the<br />
action’s potential consequences.<br />
According to Sharma,<br />
in solving any problem,<br />
the first step is to agree<br />
that there is a problem<br />
and concluding whether<br />
it needs to be resolved;<br />
second stage is take responsibility<br />
of the problem<br />
by putting energy<br />
and communicating authority;<br />
the third stage is<br />
and fall by the wayside.<br />
But those who are determined<br />
to succeed see<br />
these obstacles or challenges<br />
as part of the building<br />
process that must be<br />
surmounted to get to the<br />
next level.Jim Collins,<br />
prolific writer in one of<br />
his books, called this situation<br />
one that must be<br />
conquered. He described<br />
as “Confrontation of Brutal<br />
Facts”. Meaning, facing<br />
the problem headlong<br />
without fear and getting<br />
solution that would enable<br />
you move on with<br />
your goals.<br />
Experts who have<br />
identified problem as<br />
part of the growing process<br />
said there is always a<br />
solution, and that is why<br />
people who made discoveries<br />
succeeded in their<br />
ventures, otherwise no<br />
process has been without<br />
challenges.<br />
In a course titled<br />
“Critical Thinking: Probdefining<br />
the problem by<br />
asking critical questions<br />
like - Who caused the<br />
problem, what will happen<br />
if the problem is not<br />
solved, where does the<br />
problem occur, when<br />
does the problem occur,<br />
why is the problem occurring<br />
or how should<br />
the process or system<br />
work?<br />
In providing these answers,<br />
it is already clear<br />
what to do with the problem,<br />
having known that<br />
root cause then solution<br />
is near. As you climb you<br />
ladder of financial goals,<br />
don’t be discouraged by<br />
challenges and obstacles,<br />
find solution to the confronting<br />
problems and<br />
move on.<br />
Why living in a tiny house is better<br />
The American<br />
Dream has always<br />
been based around<br />
the ideal of home<br />
ownership, with the idea<br />
that bigger is better. In fact,<br />
last year’s statistics show<br />
that the average American<br />
home is 2,600 square feet,<br />
up from 2,400 during the<br />
housing boom years.<br />
But even though average<br />
home sizes are increasing,<br />
there’s a small but growing<br />
trend in the opposite direction:<br />
tiny houses. Documentaries<br />
on tiny house dwellers<br />
highlight the incredible contrast<br />
between the average<br />
American home and the<br />
average tiny home, which<br />
is less than 500 square feet.<br />
Although tiny homes still<br />
account for less than 1 percent<br />
of real estate sales, their<br />
appeal is increasing among<br />
many people who are tired<br />
of upside-down mortgages,<br />
the cost and time consumption<br />
of accumulating and<br />
maintaining 2,600 square<br />
feet of possessions, and have<br />
a desire to live a simpler<br />
life.Even if you’re content<br />
to keep living the American<br />
Dream, consider these four<br />
financial advantages of living<br />
in a tiny home.<br />
Freedom from debt<br />
Some statistics indicate<br />
that as many as 65 percent<br />
of tiny home dwellers have<br />
no credit card debt, whatsoever.<br />
Furthermore, 68<br />
percent don’t have a mortgage<br />
payment. At an average<br />
of $23,000, self-built tiny<br />
homes are cheaper (and nicer)<br />
than traditional housing<br />
options in that price range,<br />
and are designed to last as<br />
long as full-size houses.<br />
Not only do tiny houses<br />
themselves cost less to build<br />
or purchase, since storage<br />
space is minimal, they provide<br />
freedom from excess<br />
consumerism (the pursuit<br />
of which often plunges people<br />
into debt).<br />
Those who choose to live<br />
in tiny homes must choose<br />
their possessions carefully,<br />
a lifestyle that naturally results<br />
in less spending, less<br />
accumulation of stuff, and<br />
consequently, less debt.<br />
Not only this, but the<br />
cost of storing, shopping for,<br />
and replacing items drops<br />
significantly, freeing up the<br />
household budget as well as<br />
the schedule.<br />
Lower overhead expenses<br />
With less than 500 square<br />
feet of space to heat or cool,<br />
utility bills commonly run<br />
under $20. Add to this the<br />
reduction of property taxes,<br />
large appliances, other<br />
equipment, and home repair<br />
expenses, and your<br />
household budget looks<br />
even better.<br />
Even the grocery bill<br />
goes down — with less<br />
storage space, a tiny home<br />
discourages hoarding or<br />
excess accumulation of<br />
food and consumables.<br />
Your entire overhead decreases<br />
when you live in a<br />
tiny house.<br />
Freedom to spend<br />
Wait, didn’t I just mention<br />
that tiny homes discouraged<br />
consumerism?<br />
Yes, but with more leeway in<br />
the budget due to less debt<br />
and lower expenses, there<br />
will be more freedom to<br />
spend and save in ways you<br />
want to, rather than ways<br />
you have to.<br />
For instance, some retirees<br />
may find it beneficial to<br />
have more money to save for<br />
their rising healthcare costs<br />
or to invest more money into<br />
their IRA. Younger people<br />
who want to travel may<br />
likewise have the funds to do<br />
so without going into debt.<br />
Impacting others and<br />
the economy<br />
After Hurricane Katrina,<br />
tiny homes became a popular<br />
construction strategy<br />
for relief organisations who<br />
found them to be more durable<br />
than trailers. In the last<br />
decade, many non-profit<br />
organisations have been increasingly<br />
utilising them as<br />
a cost-efficient way to fight<br />
homelessness and the need<br />
for low-income housing.<br />
Even though many<br />
homeowners are worried<br />
about the impact of tiny<br />
homes on their property<br />
values or taxes, they may, in<br />
fact, boost the economy by<br />
leading to more land development,<br />
and increase current<br />
property values because<br />
of their effect on density.<br />
Advantages to living in<br />
a tiny house<br />
Regardless of your personal<br />
preferences or space<br />
needs, the cost-efficiency<br />
and other advantages of tiny<br />
houses can’t be denied.<br />
Considering this, it’s no<br />
wonder more people are<br />
turning away from “The<br />
American Dream”, which<br />
has sadly led to oppressive<br />
consumer debt, and deciding<br />
to live large in a whole<br />
new way.
Monday 18 May 2015<br />
This is M NEY<br />
A daily guide to your Personal Finance<br />
BUSINESS DAY<br />
• Savings<br />
• Travel<br />
• Debt & Borrowing<br />
• Utilities<br />
• Managing your Tax<br />
41<br />
Money mistakes that (mostly) women make<br />
We all make<br />
money<br />
mistakes,<br />
but some<br />
bad financial<br />
moves seem to<br />
be more characteristic of<br />
women. I’m sure there are<br />
plenty of male-specific<br />
money mistakes too, but<br />
as a woman, I can probably<br />
write better about my<br />
own gender. So here they<br />
are – money mistakes that<br />
women tend to make.<br />
Spending too much<br />
on clothes and shoes<br />
If you’ve read my previous<br />
posts on this blog, you<br />
already know I believe that<br />
Women Should Save More,<br />
and Spend Less on Designer<br />
Shoes. It’s not that looking<br />
good or being fashionable<br />
are not important<br />
– it’s just that it’s absolutely<br />
possible to look great on a<br />
budget, and buying into<br />
the “you must spend ridiculous<br />
amounts of money<br />
on clothes or you won’t get<br />
a promotion” theory is, in<br />
my opinion, a big mistake.<br />
Expecting a 2-months’-<br />
salary engagement ring<br />
Seriously, the only people<br />
who benefit from the<br />
“two months’ salary” rule<br />
are the people in the diamond<br />
and jewelry industries.<br />
It’s a stupid rule that<br />
begs to be broken. Who<br />
in their right mind would<br />
spend 2 months’ salary on<br />
a ring?<br />
If you’re financially well<br />
off, own your house, have<br />
a big emergency fund and<br />
nice size nest egg, great – by<br />
all means spend as much<br />
as you want on a ring. But<br />
for the average couple, taking<br />
such a huge chunk of<br />
money and putting it into<br />
something that is likely going<br />
to depreciate, instead of<br />
putting it in an emergency<br />
fund or as a down payment<br />
on a house, just doesn’t<br />
make sense. And buying<br />
that ring with credit is even<br />
worse.<br />
Competing with Mrs.<br />
Jones<br />
I’m including this in the<br />
list even though men fall<br />
for it too, because I believe<br />
that women compete on<br />
different things than men.<br />
Men probably compete<br />
more than anything else<br />
on the cars they drive, but<br />
women focus more on the<br />
house. Both are of course<br />
mistakes, and both are very<br />
human – but it’s good to be<br />
aware of our tendency to<br />
spend more just to keep up<br />
with the Joneses and avoid<br />
it when possible.Engaging<br />
in Recreational shopping<br />
and in “retail therapy”<br />
Extremely common<br />
among women, these behaviors<br />
are destructive and<br />
can burn serious amounts<br />
of money in a short time,<br />
or – worse – get women<br />
into debt. Have you seen<br />
the movie Confessions of a<br />
Shopaholic?<br />
It’s not a very good<br />
movie, but it’s entertaining<br />
and it really captures the<br />
pleasure that shopping can<br />
bring, and the deep trouble<br />
it can cause. I’ve recently<br />
read that many women<br />
have clothes in their closets<br />
that still have tags attached,<br />
and that many of them hide<br />
purchases from their husbands.<br />
That’s insane!<br />
Relying on marriage to<br />
save them<br />
You can’t build a huge<br />
debt, consistently spend<br />
more than you earn and tell<br />
yourself that it will all work<br />
out once you get married.<br />
What if you never get married?<br />
What if you fall in love<br />
with a poor man? What if<br />
he ends up leaving you and<br />
stops supporting you financially?<br />
Do you really want to<br />
be dependent on another<br />
person for your survival?<br />
Women in the past were<br />
completely dependent on<br />
their fathers, then on their<br />
husbands. We’ve worked<br />
hard to free ourselves and<br />
become financially inde-<br />
pendent. Do you really<br />
want to rely on another person<br />
to save you from your<br />
own mistakes? If you’re an<br />
adult, you should be able<br />
to take care of yourself, and<br />
that includes handling your<br />
finances – responsibly.<br />
“Playing nice” at work<br />
This is a tough one. It’s<br />
been shown in research<br />
after research: women ask<br />
for less than men at work,<br />
and as a result they get less.<br />
They’re also less assertive<br />
when it comes to asking for<br />
promotions and raises. We<br />
women tend to be less confident,<br />
and we feel that we<br />
must play nice. The problem?<br />
There are other studies<br />
that show coworkers and<br />
employers indeed expect<br />
women to play nice, and<br />
that assertive behavior is<br />
seen as unattractive and<br />
a turnoff when a woman<br />
displays it, but not so when<br />
displayed by a man.<br />
So what is a woman<br />
to do? It’s hard to say for<br />
sure, but if you can manage<br />
to ask for more – nicely<br />
– I guess that would be the<br />
way to go. Personally, I find<br />
this need to walk a fine line<br />
between getting what you<br />
want while keeping your<br />
“femininity” and demanding<br />
it like a man infuriating.<br />
If I want a raise, why can’t I<br />
just go to my boss and tell<br />
them “I don’t make enough<br />
money to properly take<br />
care of my family. I need a<br />
raise?”<br />
In addition, there’s also<br />
the notion that unfortunately<br />
many women and<br />
their employers share: that<br />
a woman is the secondary<br />
provider and so her income<br />
is less important. This<br />
couldn’t be further from he<br />
truth, especially in turbulent<br />
financial times – a family<br />
where both partners are<br />
good earners is much less<br />
at risk of losing everything<br />
if one of the partners loses<br />
their job.
Monday 18 May 2015<br />
42 BUSINESS DAY
Monday 18 May 2015<br />
BUSINESS DAY<br />
Cowry Weekly Financial Markets Review & Outlook<br />
<br />
Nigeria’s Q1 2015 real GDP Growth Slows to 3.96%<br />
amid Sustained Rise in Inflation...<br />
In the just concluded week, the National Bureau of Statistics published major<br />
macroeconomic indicators which mirrored the prevailing challenges. On the one hand,<br />
the local economy saw slowed growth in real Gross Domestic Product (GDP) amid<br />
sharp decline in global crude oil prices which negatively impacted on contribution of oil<br />
and gas in the review period. On the other hand, inflation rose at a faster pace following<br />
the devaluation of the local currency relative to the U.S. Dollar – thus increasing the<br />
cost of imported items. In Q1 2015, the real GDP grew year-on-year by 3.96% to N16.05<br />
trillion in the first quarter of 2015. The growth rate was slower than 5.94% recorded in<br />
the preceding quarter. In nominal terms, GDP grew by 4.32% to N21.04 trillion in the<br />
review period. Slowdown in growth was mainly attributed to worsened performance in<br />
the oil sector (output declined by 8.15% in Q1 2015, worse than 6.61% in Q1 2014) amid<br />
plummeted global crude oil prices. The services and agricultural sectors saw increased<br />
growth and contribution to real GDP. However, the industrial sector saw declines in<br />
both contribution and growth. In the services sector which witnessed a 4.70% growth,<br />
contribution to real GDP increased to 54.56% of total output (higher than 52.99% in<br />
Q1 2014). Trading activities accounted for 17.77% of real GDP (better than 17.35% in<br />
Q1 2014) having grown by 6.47% while information and communications activities<br />
contributed 11.47% to real GDP (higher than 10.89% in Q1 2014) following year-onyear<br />
growth of 9.49%. Industrial sector which recorded negative growth of 2.53%<br />
contributed 25.65% (lower than 27.36%). Mining and quarrying activities – of which<br />
crude oil & natural gas accounts for 98.49% – contributed 10.61% to real GDP (lower than<br />
11.98%) having registered a 7.91% decline in output while manufacturing accounted<br />
for 10.20% (lower than 10.68% in Q1 2014) having registered a 0.70% growth in output.<br />
The agricultural sector grew by 7.04% and contributed 19.79% to real GDP (higher than<br />
19.65%). Growth in the agricultural sector was propelled by crop production, livestock<br />
production and fishing. Similarly, inflation rate increased year-on-year to 8.7% in<br />
April, faster than 8.5% in March. The increase in inflation rate was mainly driven by<br />
Core Inflation which increased to 7.7% in April, from 7.5% in March. Food Inflation<br />
also rose to 9.5% in April, higher than 9.4% registered in March as a result of increases<br />
in most of the groups that constitute the food index. Imported food inflation rose to<br />
9.42% in April, stronger than 9.21% in March. The afore-stated numbers suggest that<br />
Nigeria’s oil export based economy appears poised for further slowdown in the short<br />
run as weakened revenues and increased inflation are likely to impact negatively on<br />
consumption. Thus, debt may be required to finance investment initiatives needed<br />
to spur growth. On a positive note, however, Nigeria may benefit from forecast<br />
improvement in global oil market conditions, which according to OPECs’ monthly oil<br />
market report for May, suggests likely boost in global crude oil demand. Global demand<br />
in 2015 is projected to rise by 1.18 million barrels per day (stronger than 0.96 mbd<br />
growth in 2014). Meanwhile non-OPEC oil supply growth is expected to grow by 0.68<br />
mbd (lower than 2.17 mbd in 2014). Thus, expected demand for OPEC crude in 2015<br />
has been revised upwards by 0.3mbd to 29.3 mbd. Nigeria’s external reserves rose weekon-week<br />
by 0.37% to USD29.78 billion as at Thursday 14, 2015 amid increase in global<br />
crude oil prices – OPEC’s reference basket price climbed by 1.11% to USD63.13 a barrel.<br />
Equities Market Recovers by 15Bps on Non<br />
Financial Equities…<br />
In line with our expectation, the equities market closed in the positive having<br />
witnessed renewed bargain hunting activities. The overall performance measure,<br />
the NSE ASI firmed by 15bps to 34,429.52 points while market capitalisation<br />
rose by N18.57 billion to N11.69 trillion. Non financial stocks generally closed<br />
in the green – the NSE Consumer Goods Index revved by 0.66% to 864.08 points;<br />
the NSE Oil/Gas Index rose by 0.62% to 381.84 points; while the NSE Industrial<br />
Index increased by 0.14% to 2,217.2 points. However, the NSE Banking Index lost<br />
0.19% to close at 396.51 points while the NSE Insurance Index fell by 0.14% to<br />
146.91 points. Skye Bank Plc (FY Dec 2014), a deposit money bank, announced<br />
a 3.29% increase in gross earnings to N136.74 billion; however Profit After<br />
Tax declined by 47.44% to N9.74 billion. The decline in bottom line mainly<br />
reflected a 58.21% increase in loan loss expenses to N18.99 billion. Similarly,<br />
National Salt Company of Nigeria (FY Dec 2014), a producer of refined salt,<br />
declared a 3.81% increase in turnover to N11.25 billion while Profit after Tax<br />
declined by 30.84% to N1.86 billion. This week, we anticipate sustained positive<br />
performance in the equities market amid bargain hunting opportunities.<br />
Naira Remains Steady at Most Market Segment…<br />
In the just concluded week, the foreign exchange markets experienced relative<br />
calm, week-on-week at most market segments. The local currency appreciated against<br />
the US Dollar at the parallel or “black” market segment rising by 0.23% to close at<br />
N221/USD from N221.5/USD as at Thursday May 14. The CBN clearing rate, interbank<br />
rate and Bureau De Change rate held steady at N197/USD, N199.10/USD and N220/<br />
USD respectively. Meanwhile, the Central Bank initiated talks with banks and other<br />
non-bank financial institutions on how to loosen FX trading restrictions amid fears on<br />
the long run stability of the Naira and threat to external reserves. Also, the Financial<br />
Markets Dealers Association announced its intention to submit proposals to the<br />
apex bank that will help curb speculative activities. We expect further stability of<br />
the Naira as the various CBN’s policy measures continues to limit market demand.<br />
NIBOR Increased amid Tightened Liquidity …<br />
In line with our expectations, Nigerian Interbank Offered Rates (NIBOR)<br />
increased for all tenor buckets despite matured 182-day treasury bills worth N81<br />
billion via open market operations. Week-on-week, NIBOR for overnight funds, 1<br />
month, 3 months and 6 months tenors advanced to 13.54% (from 9.29%), 14.76%<br />
(from 13.16%), 15.69% (from 14.42%) and 16.61% (from 15.78%) respectively. This<br />
week, treasury bills worth N296.13 billion will be auctioned via the primary market<br />
and open market operations: 91- day bills worth N32.43 billion; 133-day bills worth<br />
N185.80 billion; 182-day bills worth N22.82 billion and 364-day bills worth N55.68<br />
billion. On the other hand, treasury bills worth N160.94 billion will mature via the<br />
primary market and open market operations: 91- day bills worth N32.43 billion; 133-<br />
day bills worth N50 billion; 182-day bills worth N22.82 billion and 364-day bills worth<br />
FGN Monthly Bond Auction Yields Decline Month on<br />
Month …<br />
In the just concluded week, at the over-the-counter market, Federal Government<br />
bond prices strengthened amid primary market auctions. The Federal Government<br />
auctioned N60 billion in 3 different bond denominations: N20 billion in the 5-year<br />
15.54% FGN FEB 2020 bond (yield fell to 13.85% from 14.45%), N20 billion in the<br />
10-year 14.20% FGN MAR 2024 note (yield declined to 13.48% from 14.22%) and<br />
N20 billion in the 20-year 12.1493% FGN JUL 2034 paper (yield moderated to<br />
13.88% from 14.46%) respectively. At the OTC market, the 10-year, 16.39% FGN<br />
JAN 2022 paper advanced by N1.18 (yield fell to 13.49%); the 7-year, 16.00% FGN<br />
JUN 2019 note appreciated by N0.47 (yield decreased to 13.59%); the 5-year, 15.10%<br />
FGN APR 2017 bond rose by N0.23 (yield fell to 13.63%); while the 3-year, 13.05%<br />
FGN AUG 2016 bond gained N0.24 (yield declined to 13.59%). However, the 20-<br />
year, 10.00% FGN JUL 2030 bond lost N0.06 (yield rose to 15.46%). Also, Federal<br />
Government Eurobond prices on the international capital market declined on<br />
sell pressures. Week-on-week, the 6.75% FGN JAN 2021 note tanked by USD0.12<br />
(yield increased to 5.19%); the 5.13% FGN JUL 2018 debt lost USD0.03 (yield rose<br />
N55.68 billion. We expect liquidity enhancement from Federal Accounts Allocation<br />
Committee funds disbursement and a resultant moderation in interbank rates.<br />
to 4.08%); while the 6.38% FGN JUL 2023 bond weakened by USD0.20 (yield<br />
advanced to 5.50%). This week, we expect resumed bargain hunting at the OTC<br />
market on the back of likely liquidity enhancement from FAAC disbursements.<br />
Cowry Weekly Stock Recommendations As At Friday 15 May 2015<br />
Boko Haram Proves That It Is Not Yet<br />
Defeated…<br />
In the out gone week, Islamic insurgents, Boko Haram, proved that its<br />
capacity may have been degraded but it has not yet been defeated as it carried<br />
out surprise attacks on some communities around Maiduguri, the Borno State<br />
capital, on Wednesday night, killing about fifty people and destroying properties.<br />
However, the Nigerian military swiftly responded to the surprise attack, killing<br />
scores of the Boko Haram members and subsequently imposed a twenty<br />
four hour curfew on Maiduguri. Meanwhile, President-elect, Muhammadu<br />
Buhari, and the President of Chad, Idriss Derby, held a closed door meeting<br />
at the Defence House on Monday to discuss strategies to end the insurgency.<br />
At the end of the meeting, Muhammadu Buhari revealed that both leaders<br />
agreed to expedite the commencement of a comprehensive review of the<br />
security situation in the region as soon as the incoming government kicks off<br />
as a first step towards restoring regional stability. In another development,<br />
ahead of May 25 deadline for exchange of handover notes, the All Progressives<br />
Congress (APC) refuted claims by the Peoples Democratic Party (PDP) that<br />
the Presidential Transition Committees from both sides had been having<br />
fruitful meetings – accusing the government’s side of being uncooperative<br />
by withholding key information on the state of affairs in the nation, in line<br />
with APC’s terms of reference. With the continued bickering by both sides,<br />
we are concerned that the planned smooth transition may not be attained<br />
and the efforts of both committees may be largely unproductive despite the<br />
recent meeting between President Goodluck Jonathan and General Buhari<br />
to moderate tensions between both sides of the transition committee.<br />
Disclaimer<br />
This report is produced by the Research Desk of Cowry Asset Management<br />
Limited (COWRY) as a guideline for Clients that intend to invest in<br />
securities on the basis of their own investment decision without relying<br />
completely on the information contained herein. The opinion contained<br />
herein is for information purposes only and does not constitute any offer<br />
or solicitation to enter into any trading transaction. While care has been<br />
taken in preparing this document, no responsibility or liability whatsoever<br />
is accepted by any member of COWRY for errors, omission of facts, and any<br />
direct or consequential loss arising from the use of this report or its contents.<br />
Cowry Asset Management Limited (Member of the Nigeria Stock Exchange)<br />
Plot 1319 Karimu Kotun, Victoria Island Lagos Tel: +234-1-2715008-9; +234-1-2716614-5 www.cowryasset.com
Monday 18 May 2015<br />
44 BUSINESS DAY<br />
LIVE @ THE STOCK EXCHANGE<br />
Stock Market Update As At Friday 15 May 2015<br />
Company<br />
No of<br />
Deals<br />
Closing<br />
Price (N)<br />
Quantity<br />
Traded<br />
Value of<br />
Shares (N)<br />
Company<br />
No of<br />
Deals<br />
Closing<br />
Price (N)<br />
Quantity<br />
Traded<br />
Value of<br />
Shares (N)<br />
2ND-TIER SECURITIES<br />
AGRICULTURE<br />
Crop Production<br />
FTN COCOA PROCESSORS PLC 1 0.50 5,000 2,500.00<br />
OKOMU OIL PALM PLC. 5 28.44 6,070 168,701.00<br />
PRESCO PLC 33 30.00 260,615 7,834,857.00<br />
Crop Production Totals 39 271,685 8,006,058.00<br />
Livestock/Animal Specialties<br />
LIVESTOCK FEEDS PLC. 3 2.40 60,027 144,064.80<br />
Livestock/Animal Specialties Totals 3 60,027 144,064.80<br />
AGRICULTURE Totals 42 331,712 8,150,122.80<br />
CONGLOMERATES<br />
Diversified Industries<br />
A.G. LEVENTIS NIGERIA PLC. 1 1.62 10,000 15,400.00<br />
JOHN HOLT PLC. 2 0.90 293 251.98<br />
S C O A NIG. PLC. 4 4.44 11,480 48,445.60<br />
TRANSNATIONAL CORPORATION OF NIGERIA PLC 128 3.19 22,516,315 72,031,381.00<br />
U A C N PLC. 43 40.00 221,423 8,866,339.62<br />
Diversified Industries Totals 178 22,759,511 80,961,818.20<br />
CONGLOMERATES Totals 178 22,759,511 80,961,818.20<br />
CONSTRUCTION/REAL ESTATE<br />
Building Structure/Completion/Other<br />
COSTAIN (W A) PLC. 8 0.81 9,040 7,350.80<br />
G CAPPA PLC 1 14.46 69 948.06<br />
Building Structure/Completion/Other Totals 9 9,109 8,298.86<br />
Infrastructure/Heavy Construction<br />
JULIUS BERGER NIG. PLC. 23 51.70 65,462 3,410,406.12<br />
Infrastructure/Heavy Construction Totals 23 65,462 3,410,406.12<br />
Real Estate Development<br />
UACN PROPERTY DEVELOPMENT CO. LIMITED 18 10.25 90,171 936,676.80<br />
Real Estate Development Totals 18 90,171 936,676.80<br />
Real Estate Investment Trusts (REITs)<br />
UPDC REAL ESTATE INVESTMENT TRUST 1 10.00 100 1,000.00<br />
Real Estate Investment Trusts (REITs) Totals 1 100 1,000.00<br />
CONSTRUCTION/REAL ESTATE Totals 51 164,842 4,356,381.78<br />
CONSUMER GOODS<br />
Automobiles/Auto Parts<br />
DN TYRE & RUBBER PLC 7 0.50 37,728 18,864.00<br />
Automobiles/Auto Parts Totals 7 37,728 18,864.00<br />
Beverages--Brewers/Distillers<br />
CHAMPION BREW. PLC. 10 7.09 374,459 2,536,688.48<br />
GUINNESS NIG PLC 42 155.00 158,502 24,485,968.63<br />
INTERNATIONAL BREWERIES PLC. 17 20.00 2,728,423 54,592,046.95<br />
JOS INT. BREWERIES PLC. 1 1.92 3,080 5,636.40<br />
NIGERIAN BREW. PLC. 75 155.18 394,032 60,939,430.67<br />
PREMIER BREWERIES PLC 1 3.43 438 1,427.88<br />
Beverages--Brewers/Distillers Totals 146 3,658,934 142,561,199.01<br />
Beverages--Non-Alcoholic<br />
7-UP BOTTLING COMP. PLC. 21 176.00 18,853 3,345,059.94<br />
Beverages--Non-Alcoholic Totals 21 18,853 3,345,059.94<br />
Food Products<br />
DANGOTE FLOUR MILLS PLC 31 4.64 116,785 522,568.29<br />
DANGOTE SUGAR REFINERY PLC 38 6.60 452,243 2,921,891.69<br />
FLOUR MILLS NIG. PLC. 106 35.00 1,838,359 64,336,489.05<br />
HONEYWELL FLOUR MILL PLC 33 3.47 1,015,943 3,563,898.29<br />
NATIONAL SALT CO. NIG. PLC 59 8.00 1,119,039 8,936,213.80<br />
UNION DICON SALT PLC. 2 11.84 1,092 12,285.00<br />
Food Products Totals 269 4,543,461 80,293,346.12<br />
Food Products--Diversified<br />
CADBURY NIGERIA PLC. 11 39.90 25,309 981,770.99<br />
NESTLE NIGERIA PLC. 28 900.00 9,182 8,232,524.98<br />
Food Products--Diversified Totals 39 34,491 9,214,295.97<br />
Household Durables<br />
VITAFOAM NIG PLC. 81 6.38 2,273,569 14,330,196.43<br />
VONO PRODUCTS PLC. 4 0.94 86,049 80,911.06<br />
Household Durables Totals 85 2,359,618 14,411,107.49<br />
Personal/Household Products<br />
P Z CUSSONS NIGERIA PLC. 32 29.00 532,096 15,348,226.48<br />
UNILEVER NIGERIA PLC. 39 45.03 358,792 16,155,961.95<br />
Personal/Household Products Totals 71 890,888 31,504,188.43<br />
CONSUMER GOODS Totals 638 11,543,973 281,348,060.96<br />
FINANCIAL SERVICES<br />
Banking<br />
ACCESS BANK PLC. 169 6.18 32,844,240 203,394,173.17<br />
DIAMOND BANK PLC 57 4.37 7,355,610 32,340,552.71<br />
ECOBANK TRANSNATIONAL INCORPORATED 60 21.56 1,061,562 22,942,599.13<br />
FIDELITY BANK PLC 62 1.89 4,481,499 8,448,663.16<br />
GUARANTY TRUST BANK PLC. 184 29.50 7,626,747 225,063,774.50<br />
SKYE BANK PLC 119 2.17 15,673,980 33,114,000.59<br />
STERLING BANK PLC. 30 2.15 2,343,376 4,985,837.37<br />
UNITED BANK FOR AFRICA PLC 132 5.20 15,794,169 81,668,936.80<br />
UNION BANK NIG.PLC. 27 10.50 61,430 646,049.79<br />
UNITY BANK PLC 73 2.23 5,214,620 11,377,433.19<br />
WEMA BANK PLC. 29 0.99 1,919,713 1,901,326.22<br />
ZENITH INTERNATIONAL BANK PLC 144 22.22 1,766,721 39,390,810.80<br />
Banking Totals 1,086 96,143,667 665,274,157.43<br />
Insurance Carriers, Brokers and Services<br />
AIICO INSURANCE PLC. 15 1.00 1,098,485 1,098,495.00<br />
CONTINENTAL REINSURANCE PLC 16 0.99 1,344,894 1,330,725.06<br />
CORNERSTONE INSURANCE COMPANY PLC. 1 0.50 18,000 9,000.00<br />
GREAT NIGERIAN INSURANCE PLC 3 0.50 500 250.00<br />
CONSOLIDATED HALLMARK INSURANCE PLC 1 0.50 1,000 500.00<br />
INTERNATIONAL ENERGY INSURANCE COMPANY PLC 5 0.53 485,648 250,462.12<br />
MANSARD INSURANCE PLC 1 3.00 14,000 42,840.00<br />
MUTUAL BENEFITS ASSURANCE PLC. 2 0.50 21,000 10,500.00<br />
N.E.M INSURANCE CO (NIG) PLC. 33 0.68 2,418,938 1,650,831.40<br />
PRESTIGE ASSURANCE CO. PLC. 1 0.50 1,950 975.00<br />
SOVEREIGN TRUST INSURANCE PLC 1 0.50 400 200.00<br />
STANDARD ALLIANCE INSURANCE PLC. 1 0.50 90,000 45,000.00<br />
WAPIC INSURANCE PLC 45 0.54 1,359,770 727,360.48<br />
Insurance Carriers, Brokers and Services Totals 125 6,854,585 5,167,139.06<br />
Micro-Finance Banks<br />
NPF MICROFINANCE BANK PLC 48 1.26 2,862,248 3,653,328.30<br />
Micro-Finance Banks Totals 48 2,862,248 3,653,328.30<br />
Other Financial Institutions<br />
AFRICA PRUDENTIAL REGISTRARS PLC 44 2.99 579,008 1,734,214.97<br />
CUSTODIAN AND ALLIED PLC 18 4.17 157,000 654,880.00<br />
FBN HOLDINGS PLC 296 8.99 7,080,630 63,119,430.39<br />
FCMB GROUP PLC. 91 3.00 11,464,164 34,499,989.82<br />
ROYAL EXCHANGE PLC. 3 0.50 16,950 8,475.00<br />
STANBIC IBTC HOLDINGS PLC 21 30.00 135,149 4,095,463.73<br />
UBA CAPITAL PLC 53 1.49 1,799,362 2,683,120.19<br />
Other Financial Institutions Totals 526 21,232,263 106,795,574.10<br />
FINANCIAL SERVICES Totals 1,785 127,092,763 780,890,198.89<br />
HEALTHCARE<br />
Healthcare Providers<br />
UNION DIAGNOSTIC & CLINICAL SERVICES PLC 1 0.50 1,000 500.00<br />
Healthcare Providers Totals 1 1,000 500.00<br />
Medical Supplies<br />
MORISON INDUSTRIES PLC. 1 1.82 1,621 2,804.33<br />
Medical Supplies Totals 1 1,621 2,804.33<br />
Pharmaceuticals<br />
FIDSON HEALTHCARE PLC 26 3.20 366,200 1,159,763.00<br />
GLAXO SMITHKLINE CONSUMER NIG. PLC. 27 44.20 135,408 5,869,006.90<br />
MAY & BAKER NIGERIA PLC. 16 1.60 733,413 1,171,023.47<br />
NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 23 1.10 1,569,426 1,844,173.25<br />
NIGERIA-GERMAN CHEMICALS PLC. 1 6.32 68 408.68<br />
PHARMA-DEKO PLC. 3 2.13 1,100 2,423.00<br />
Pharmaceuticals Totals 96 2,805,615 10,046,798.30<br />
HEALTHCARE Totals 98 2,808,236 10,050,102.63<br />
ICT<br />
Computer Based Systems<br />
COURTEVILLE BUSINESS SOLUTIONS PLC 2 0.50 15,100 7,550.00<br />
Computer Based Systems Totals 2 15,100 7,550.00<br />
IT Services<br />
COMPUTER WAREHOUSE GROUP PLC 1 4.00 300 1,140.00<br />
IT Services Totals 1 300 1,140.00<br />
Processing Systems<br />
CHAMS PLC<br />
Processing Systems Totals 1 2,924 1,462.00<br />
ICT Totals 4 18,324 10,152.00<br />
INDUSTRIAL GOODS<br />
Building Materials<br />
ASHAKA CEM PLC 15 20.47 83,742 1,734,924.00<br />
BERGER PAINTS PLC 12 10.00 52,350 522,642.28<br />
CAP PLC 11 43.00 42,541 1,743,561.00<br />
CEMENT CO. OF NORTH.NIG. PLC 19 10.50 172,690 1,750,476.35<br />
DANGOTE CEMENT PLC 26 178.50 64,128 11,441,950.23<br />
DN MEYER PLC. 1 0.83 200 158.00<br />
FIRST ALUMINIUM NIGERIA PLC 3 0.50 6,099 3,049.50<br />
IPWA PLC 1 0.50 421 210.50<br />
PAINTS AND COATINGS MANUFACTURES PLC 2 1.27 11,000 13,420.00<br />
PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1 3.64 750 2,857.50<br />
LAFARGE AFRICA PLC. 38 98.20 418,425 41,065,621.19<br />
Building Materials Totals 129 852,346 58,278,870.55<br />
Electronic and Electrical Products<br />
CUTIX PLC. 3 1.58 50,000 79,630.00<br />
NIGERIAN WIRE AND CABLE PLC. 1 0.50 8 4.00<br />
Electronic and Electrical Products Totals 4 50,008 79,634.00<br />
Packaging/Containers<br />
AVON CROWNCAPS & CONTAINERS 2 1.52 119,349 181,410.48<br />
BETA GLASS CO PLC. 2 33.00 35 1,212.75<br />
Packaging/Containers Totals 4 119,384 182,623.23<br />
Tools and Machinery<br />
NIGERIAN ROPES PLC 1 7.46 71 503.39<br />
Tools and Machinery Totals 1 71 503.39<br />
INDUSTRIAL GOODS Totals 138 1,021,809 58,541,631.17<br />
NATURAL RESOURCES<br />
Chemicals<br />
B.O.C. GASES PLC. 2 5.11 300 1,458.00<br />
Chemicals Totals 2 300 1,458.00<br />
Metals<br />
ALUMINIUM EXTRUSION IND. PLC. 2 10.43 1,000 9,910.00<br />
Metals Totals 2 1,000 9,910.00<br />
NATURAL RESOURCES Totals 4 1,300 11,368.00<br />
OIL AND GAS<br />
Energy Equipment and Services<br />
JAPAUL OIL & MARITIME SERVICES PLC 1 0.50 500 250.00<br />
Energy Equipment and Services Totals 1 500 250.00<br />
Integrated Oil and Gas Services<br />
OANDO PLC 234 17.81 5,766,287 102,787,888.50<br />
Integrated Oil and Gas Services Totals 234 5,766,287 102,787,888.50<br />
Petroleum and Petroleum Products Distributors<br />
CONOIL PLC 12 39.92 22,000 885,429.47<br />
ETERNA PLC. 10 2.70 282,173 762,806.41<br />
FORTE OIL PLC. 35 173.23 153,736 26,194,334.13<br />
MOBIL OIL NIG PLC. 15 151.30 17,095 2,596,130.23<br />
MRS OIL NIGERIA PLC. 5 50.54 4,421 212,296.42<br />
TOTAL NIGERIA PLC. 26 150.00 74,977 11,262,542.35<br />
Petroleum and Petroleum Products Distributors Totals 103 554,402 41,913,539.01<br />
Exploration and Production<br />
SEPLAT PETROLEUM DEVELOPMENT COMPANY LTD 11 387.00 1,415 564,549.90<br />
Exploration and Production Totals 11 1,415 564,549.90<br />
OIL AND GAS Totals 349 6,322,604 145,266,227.41<br />
SERVICES<br />
Advertising<br />
AFROMEDIA PLC 1 0.50 1,000 500.00<br />
Advertising Totals 1 1,000 500.00<br />
Automobile/Auto Part Retailers<br />
R T BRISCOE PLC. 15 0.92 159,667 146,893.64<br />
Automobile/Auto Part Retailers Totals 15 159,667 146,893.64<br />
Courier/Freight/Delivery<br />
RED STAR EXPRESS PLC 10 4.92 347,790 1,706,561.00<br />
TRANS-NATIONWIDE EXPRESS PLC. 22 1.06 950,864 1,007,917.84<br />
Courier/Freight/Delivery Totals 32 1,298,654 2,714,478.84<br />
Employment Solutions<br />
C & I LEASING PLC. 59 0.69 8,258,977 5,608,724.04<br />
Employment Solutions Totals 59 8,258,977 5,608,724.04<br />
Hospitality<br />
TANTALIZERS PLC 1 0.50 500 250.00<br />
Hospitality Totals 1 500 250.00<br />
Hotels/Lodging<br />
IKEJA HOTEL PLC 14 3.79 424,200 1,481,888.92<br />
TRANSCORP HOTELS PLC 2 9.63 10,050 91,957.50<br />
Hotels/Lodging Totals 16 434,250 1,573,846.42<br />
Media/Entertainment<br />
DAAR COMMUNICATIONS PLC 1 0.50 30,000 15,000.00<br />
Media/Entertainment Totals 1 30,000 15,000.00<br />
Printing/Publishing<br />
ACADEMY PRESS PLC. 3 1.00 56,500 56,380.00<br />
LEARN AFRICA PLC 9 1.15 85,523 98,366.24<br />
UNIVERSITY PRESS PLC. 24 6.03 611,359 3,538,323.57<br />
Printing/Publishing Totals 36 753,382 3,693,069.81<br />
Road Transportation<br />
ASSOCIATED BUS COMPANY PLC 4 0.56 582,643 324,737.22<br />
Road Transportation Totals 4 582,643 324,737.22<br />
Transport-Related Services<br />
AIRLINE SERVICES AND LOGISTICS PLC 6 2.11 70,653 156,143.13<br />
NIGERIAN AVIATION HANDLING COMPANY PLC 57 6.80 1,667,358 11,183,713.30<br />
Transport-Related Services Totals 63 1,738,011 11,339,856.43<br />
SERVICES Totals 228 13,257,084 25,417,356.40<br />
EQTY Board Totals 3,515 185,322,158 1,395,003,420.24<br />
CONSUMER GOODS<br />
Food Products<br />
MCNICHOLS PLC 2 1.50 550 863.50<br />
Food Products Totals 2 550 863.50<br />
CONSUMER GOODS Totals 2 550 863.50<br />
ASeM Board Totals 2 550 863.50<br />
Equity Activity Totals 3,517 185,322,708 1,395,004,283.74
Monday 18 May 2015<br />
LIVE @ THE STOCK EXCHANGE<br />
BUSINESS DAY<br />
45<br />
FTSE, Stanbic IBTC develop<br />
Nigeria IPF benchmark<br />
...New benchmark comprises of NSE listed equities<br />
HEANYI NWACHUKWU<br />
FT SE Group<br />
(FTSE), the<br />
global index provider,<br />
has developed<br />
the FTSE<br />
Nigeria Investable Pension<br />
Fund (IPF) Benchmark.<br />
The new index is the first<br />
of its kind in the region, encapsulating<br />
Nigerian listed<br />
companies while adhering<br />
to National Pension<br />
Commission (PenCom)<br />
regulation on investment,<br />
safeguarding good corporate<br />
governance for users.<br />
It has been created as<br />
a replicable index as well<br />
as a performance benchmark,<br />
in close collaboration<br />
with Stanbic IBTC<br />
Pension Managers Limited,<br />
Nigeria’s largest pension<br />
fund.<br />
The index methodology<br />
has been designed to adhere<br />
to PenCom’s Regulation<br />
on Investment of Pension<br />
Fund Assets, ensuring<br />
that a strong emphasis is<br />
placed on governance and<br />
best practice.<br />
Benchmark constituents<br />
are comprised of FTSE<br />
Frontier Index Series companies<br />
listed on the Nigerian<br />
Stock Exchange, which<br />
are then screened for taxable<br />
profits, dividend, free<br />
float, sector and individual<br />
stock weighting.<br />
Jonathan Cooper, managing<br />
director, research &<br />
analytics, FTSE, said: “As<br />
FTSE’s global presence<br />
continues to expand, we<br />
are pleased to launch this<br />
new innovative benchmark<br />
featuring companies from<br />
Africa’s largest economy.<br />
“Corporate governance<br />
plays a vital role in all equity<br />
markets and is integral<br />
to investor confidence,<br />
leading to significant demand<br />
for benchmarks of<br />
this nature. This is reflected<br />
in Stanbic IBTC Pension<br />
Managers’ support during<br />
its development and<br />
immediate adoption on<br />
completion. We look forward<br />
to developing more<br />
indices for this exciting<br />
market.”<br />
Demola Sogunle, chief<br />
executive officer, Stanbic<br />
IBTC Pension Managers<br />
Ltd, said: “Stanbic IBTC is<br />
committed to the growth<br />
and development of the<br />
financial market. This commitment<br />
is part of the reason<br />
why we are very excited<br />
to be part of this welcome<br />
development.<br />
“The IPF is necessary<br />
for measurement of the<br />
performance of the equity<br />
portion of Pension Funds.<br />
It fulfils that need to have<br />
an index that is investable,<br />
transparent and independent.<br />
We believe that it will<br />
encourage more participation<br />
in the market as inves-<br />
tors would be able to track<br />
companies that pension<br />
funds typically invest in.”<br />
Chinelo Anohu Amazu,<br />
director general, PenCom,<br />
said: “The Commission is<br />
delighted with this commendable<br />
initiative by<br />
FTSE, as it would provide a<br />
good benchmark for Nigerian<br />
Pension Fund Administrators<br />
(PFAs) and PenCom,<br />
to better assess and monitor<br />
the performance of the equities<br />
portfolio of individual<br />
pension funds.”<br />
FTSE had announced<br />
the launch of the FTSE<br />
Frontier Markets Index Series<br />
in September 2014.<br />
The benchmarks covers<br />
26 countries defined as<br />
Frontier by FTSE’s Country<br />
Classification process, and<br />
captures the performance<br />
of large, mid and small cap<br />
equity securities from eligible<br />
markets. There are 39<br />
Nigerian companies currently<br />
included in the index.<br />
Champion Breweries returns<br />
to profitability<br />
Champion Breweries<br />
plc has recorded<br />
substantial<br />
improvement<br />
in its results with a record<br />
leap in turnover from<br />
N2.2bn recorded in 2013 to<br />
N3.3bn in 2014.<br />
The Company which repositioned<br />
to attract credit,<br />
also returned to profitability<br />
and generated a profit<br />
of N25.5m as against a loss<br />
of N543.9m declared for<br />
the previous year.<br />
Senas Ukpanah, chairman,<br />
Champion Breweries<br />
plc, who stated this in Lagos<br />
at the company’s 39th<br />
Annual General Meeting<br />
put the company’s loss<br />
before tax at N1.07bn from<br />
N1.73bn recorded the previous<br />
year.<br />
This, according to him,<br />
was due to high impact of<br />
finance cost of N1.08bn as<br />
against the previous figure<br />
of N1.18bn.<br />
Ukpanah lauded shareholders<br />
for supporting<br />
the last recapitalisation<br />
exercise of the Company,<br />
saying the N13.7bn rights<br />
issue was successful as it<br />
was over-subscribed by<br />
shareholders.<br />
While lamenting the<br />
challenging economic environment<br />
under which<br />
the company operates, he<br />
said “despite the overall<br />
stagnating market, Champion<br />
Breweries was able to<br />
achieve operational profits<br />
as well as complete pay-off<br />
of its long-standing debts<br />
and reduced the interest<br />
burden carried over the<br />
years.”<br />
Ukpanah, who also expressed<br />
optimism on bright<br />
prospects for the Company<br />
said “our ship has set sail<br />
to navigate into greater<br />
heights and positive prospects.<br />
Strategies are being<br />
put in place to grow our<br />
dear brand- Champion Lager<br />
Beer- and significantly<br />
expand our markets within<br />
the South-South region in<br />
the incoming years.”<br />
The shareholders applauded<br />
the Board’s effort<br />
and the turnaround plan<br />
being implemented for the<br />
Company while appealing<br />
for more efforts by the<br />
Company Management<br />
to make Champion Lager<br />
Beer more competitive.
Monday 18 May 2015<br />
46 BUSINESS DAY<br />
CITN<br />
17th Annual Tax Conference<br />
Day 3 of the 17th annual tax conference<br />
Fred Omaka (l), council member, CITN, with Adefisayo Awogbade, registrar/chief<br />
executive, CITN<br />
Daniel Bako (l), with Adedayo Adesina, honorary treasurer, CITN<br />
Kamoru Agigun, (l), past president, with Kunle Quadri, past president,<br />
both of CITN<br />
Taiwo Oyedele, partner, tax & regulatory services, PwC, presenting hos<br />
paper at the conference<br />
Sunday Jegede, (l), past president, with Cyril Ede, deputy vice president,<br />
Bothe of CITN<br />
Mark Anthony Dike, (l), president CITN, with James Kayode Naiyeju, former<br />
accountant general of federation<br />
L-R: Victor Onyenkpa, partner & head, tax regulatory and people services,<br />
KPMG: James Kayode Naiyeju, former accountant general of federation,<br />
and Taiwo Oyedele, partner, tax & regulatory services, PwC<br />
Victor Onyenkpa, partner & head, tax regulatory and people services, KPMG,<br />
presenting his paper at theconference<br />
Cross section of the participant at the conference<br />
Ade Ipaye (l), attorney general of Lagos State, with Mike Kofi Afflu, president,<br />
Chartered Institue of Taxation Ghana<br />
Elemanya Ebilah, chairman, annual tax conference committee; Godwin Oyedokun,<br />
head research and technical department, CITN, and Monday Akonafua,<br />
P.A to the CITN president<br />
Akin Akinsehinwa (l), chairman, Ondo State Board Internal Revenue, with Tunde<br />
Fowler, executive chairman, Lagos State Internal Revenue Service<br />
Pics by Olawale Amoo
Monday 18 May 2015<br />
47
48<br />
BUSINESS DAY<br />
REAL SECTOR WATCH<br />
Monday 18 May 2015<br />
“The big secret in life is that there<br />
is no big secret. Whatever your<br />
goal, you can get there if you’re<br />
willing to work.”<br />
-Oprah Winfrey<br />
“You see, in life, lots of people know<br />
what to do, but few people actually<br />
do what they know. Knowing is not<br />
enough! You must take action.”<br />
-Anthony Robbins<br />
Exports are quite erratic and their<br />
pattern is often different from GDP<br />
cycles, also because they heavily<br />
depend on other countries’ events<br />
-Valentino Piana<br />
Local footwear struggling<br />
to compete with imports<br />
ODINAKA ANUDU<br />
Samuel Achara is a smallscale<br />
footwear maker in<br />
Aba, the economic capital<br />
of Abia State in South Eastern<br />
Nigeria.<br />
His make-shift shop at York<br />
Street mini market in Abia South<br />
Local Government Area costs him<br />
less than N3,000 ($15) every month.<br />
But he still coughs out more than<br />
N8,000 ($40) within the month to<br />
pay a myriad of levies and taxes that<br />
come with different nomenclatures.<br />
As in the usual Nigerian manner,<br />
the revenue collecting agents<br />
are fierce-looking young men aged<br />
between 22 and 40, claiming to<br />
represent the state or the local government<br />
area. Refusal to ‘cooperate’<br />
with them is as dangerous as rejecting<br />
the modern-day armed robber’s<br />
demand to relinquish your property<br />
or money.<br />
By a dint of hard work, Achara’s<br />
Vision Shoes Production, a firm with<br />
three staff members who are mainly<br />
apprentices, can ‘finish’ at least four<br />
pairs of shoes each day. The firm<br />
opens at exactly 7:00am each day<br />
and closes at 6:30pm.<br />
But the shoemaker struggles<br />
to get its raw materials from the<br />
Northern part of Nigeria, where<br />
traders of animal skins prefer to sell<br />
to representatives of Italian, Dutch<br />
and Chinese firms that pay twice or<br />
three times higher.<br />
Achara’s firm now resorts to<br />
sourcing its animal skins from Cameroon,<br />
Chad and China. Achara’s<br />
adhesives, which serve as glue for<br />
leather, are often imported from<br />
China as no known manufacturer<br />
produces it locally.<br />
But he is still cautious of Chinese<br />
adhesives, which, though are<br />
cheaper, cannot compare with those<br />
of Italians and the Dutch that are<br />
superior, not easy to come by and are<br />
often inaccessible to foreign firms.<br />
Achara is also attracted to an offer<br />
from one of the new generation<br />
banks with several branches in Aba.<br />
The bank wants to offer him a loan<br />
of N1 million ($5,000) to expand, but<br />
is demanding an interest rate of 18<br />
percent payable in 12 months.<br />
However, he decides to settle for<br />
a relative who lends him a loan of<br />
N500,000 ($2,500) at an interest rate<br />
of 13 percent, which is equivalent to<br />
Central Bank of Nigeria’s Monetary<br />
Policy Rate, the benchmark interest<br />
rate for financial institutions in<br />
Nigeria.<br />
The deplorable state of Aba roads<br />
makes access to the market difficult.<br />
To Achara, Aba roads are the most<br />
deplorable in the South East, making<br />
accessibility to customers difficult,<br />
but armed robbers’ onslaught easy.<br />
Due to inconsistent and intermittent<br />
electricity supply in Aba,<br />
Achara’s firm has to acquire three<br />
generators, all of which run for more<br />
than seven hours each day.<br />
“In fact, my ‘landing’ cost of production<br />
for a pair of shoes is about<br />
N2,200 ($11), but an imported pair<br />
of shoes is sold for N2,000 ($10),”<br />
said Achara, in a chat.<br />
“We are in business to make<br />
profit. I will have to pay for my shop<br />
as well as taxes and levies. I will pay<br />
my apprentices some stipends and<br />
take care of my family, because this<br />
is my source of livelihood,” he said.<br />
“But tell me, how will I set my<br />
market price?” he asked rhetorically,<br />
almost mechanically.<br />
This paints the gory picture of<br />
the state of local footwear makers in<br />
the country, who play in an industry<br />
worth $680 million, creating 700,000<br />
direct and indirect jobs, according to<br />
Olusegun Aganga, minister of industry,<br />
trade and investment.<br />
In Abia State alone, there are<br />
more than 30,000 footwear makers,<br />
mainly small-scale. Added with<br />
other leather wear players such as<br />
bag, belt and trunk box manufacturers,<br />
the number increases to 80,000,<br />
according to Nnabugwu Osondu,<br />
secretary, Abia State Shoe, Bag,<br />
Belt and Trunk Box Association,<br />
who spoke with BusinessDay in a<br />
telephone chat.<br />
In Aba, Lagos, Kaduna, Kano,<br />
Onitsha, and other parts of the<br />
country where footwear is made,<br />
the complaints have been similar:<br />
poor access to finance, raw material<br />
challenge, poor infrastructure<br />
and lack of adequate/sophisticated<br />
machinery. According to Osondu,<br />
“we sincerely need finance to drive<br />
this industry.<br />
“We often approach banks for<br />
finance, but they give us difficult<br />
conditions that we cannot meet. It is<br />
difficult because many of us are in the<br />
small- and medium-scale category.”<br />
Aba shoemakers have now resorted<br />
to the use of the synthetic leather,<br />
often called the plastic leather, imported<br />
from China, because they<br />
find the price of animal skins from<br />
Northern Nigeria prohibitive, he said.<br />
Hamman Haruna, managing<br />
director of Hamman Shoes, Kaduna,<br />
lamented that the constant use of<br />
diesel had kept on increasing his<br />
cost of production and continued<br />
to make his products unable to<br />
compete with imported ones.<br />
Coupled with high cost of production<br />
is poor perception of madein-Nigeria<br />
footwear by local consumers.<br />
Currently, local footwear<br />
makers put foreign labels on their<br />
products because they must sell<br />
their products, which if seen as<br />
locally-made, may not be taken too<br />
seriously by consumers.<br />
“If we cannot be proud of our<br />
own products, then we are encouraging<br />
our artisans and local manufacturers<br />
to use foreign labels on<br />
their products,” said Thank-God Injima,<br />
managing director, Nwadiche<br />
Shoes, Aba.<br />
“I was surprised to hear a senator<br />
in Nigeria confess in Abuja, in one<br />
of the trade exhibitions I attended<br />
recently, that he booked for some<br />
products to be imported from China.<br />
But a friend of his informed him<br />
that he could source those items in<br />
Aba, which he succeeded in getting.<br />
However, instead of being proud to<br />
say that the items were produced<br />
in Aba, he claimed that he sourced<br />
them from China, thereby depriving<br />
Aba and the country of the credit,”<br />
Injima narrated.<br />
Rasheed Olaoluwa, CEO, Bank of<br />
Industry, Nigeria’s frontline development<br />
bank, in a chat during a factory<br />
inspection in Ogun State, said:<br />
“We need to get over this inferiority<br />
complex among our citizens. We<br />
should be proud and see a product<br />
made in the country as our own.”<br />
Olaoluwa further berated Nigerian<br />
businessmen who advise local<br />
manufacturers to put foreign labels<br />
on their products, saying the practice<br />
was inimical to the country’s<br />
economic progress.<br />
Even though Frank S.U Jacobs,<br />
president, Manufacturers Association<br />
of Nigeria, sees this type of<br />
branding as a sharp practice and<br />
misinformation, the practice seems<br />
to have persisted.<br />
But one thing that stands out<br />
among shoemakers, especially those<br />
in Aba, is that their products are not<br />
as inferior as it is painted by some local<br />
consumers. This is evidenced in<br />
the fact that locally made shoes from<br />
the area are already being shipped<br />
to West and East African markets.<br />
But one fact that should not be<br />
hidden is that locally-made products<br />
are not as competitive in the<br />
international market as they should<br />
be owing to comparatively lower<br />
quality.<br />
Ayotola Oluwaseun, CEO, Olariwaju<br />
Lagos-leather Products Designers<br />
and Crafters, said more<br />
emphasis should be placed on improving<br />
the quality and consistency<br />
of locally-made footwear.<br />
“I’m impressed with their products,<br />
because it shows some level of<br />
craftsmanship, but emphasis should<br />
be placed on improving the quality<br />
and consistency of their products,<br />
which is a key part,” Oluwaseun<br />
said, at a two-day market meeting,<br />
organised by the Leather Product<br />
Manufacturers Association of Abia<br />
State (LEPMAAS) and facilitated by<br />
Growth and Employment in States<br />
GEMS 1, held recently.<br />
According to him, a couple of the<br />
artisans he spoke with produce very<br />
limited quantities of shoes, because<br />
they run their production manually.<br />
He advocated for procurement<br />
of better machines/equipment to<br />
make them consistent at every point.<br />
“Let us make products that<br />
scream Nigeria, so that when we take<br />
it to the outside world, they would<br />
see that the product is different,” he<br />
said. But the governments at federal,<br />
state and local levels have failed to<br />
create the right environment for this<br />
sector to thrive.<br />
Taxes are still multiple. The outgoing<br />
government, which promised<br />
to initiate plans to increase revenue<br />
accruable from the industry to N20<br />
billion annually and double its $680<br />
million worth, did not live to its<br />
words. Power supply situation has<br />
worsened with the new electricity<br />
managers who keep complaining<br />
of gas shortages and lack of funds.<br />
Experts say Nigeria’s economic diversification<br />
mantra can never be realised<br />
as long as a sector like leather/<br />
footwear is still under-exploited.
Monday 18 May 2015<br />
49
Monday 18 May 2015<br />
50 BUSINESS DAY<br />
POLITICS<br />
Policies • Issues • Debates<br />
‘Prompt payment of workers’ salaries my major satisfaction<br />
Elected executive chairmen in the 18 local government areas of Edo State clocked two years<br />
in office recently. In this interview, Jimoh Ijegbai, executive chairman of Owan East Local<br />
Government Area, spoke with IDRIS UMAR MOMOH on what makes his administration thick,<br />
particularly prompt payment of salaries. Excerpts:<br />
It is two years of your<br />
administration as the<br />
elected executive chairman<br />
of Owan East Local<br />
Government Area.<br />
How far have you been able<br />
to carry on the governance of<br />
the council?<br />
We have done quite a lot in<br />
the area of health, school, road,<br />
water and electricity. Since we<br />
came in we have embarked on<br />
massive construction of schools<br />
across the 11 wards in the local<br />
government. In the past two<br />
years, we have constructed a<br />
total of 18 schools equipped with<br />
furniture and commissioned.<br />
They include 14 blocks of three<br />
classrooms; two blocks of 6<br />
classrooms were reconstructed<br />
and constructed among others.<br />
In the past two years the<br />
council has distributed over<br />
200,000 free exercise books to<br />
pupils in the public primary<br />
schools across the council free<br />
of charge. Each pupil was ensured<br />
that they get at least six<br />
free exercise books. The council<br />
has also distributed over 3,000<br />
benches/desks to public primary<br />
schools. These were done so<br />
as to enhance hitch-free learning<br />
ability of our pupils and reduce<br />
financial burden on the part of<br />
their parents in the provision of<br />
learning materials.<br />
The council has done wonderfully<br />
well in the health sector.<br />
We participated in all programmes<br />
that have to do with<br />
immunization, primary healthcare,<br />
completed and upgraded<br />
facilities in our referral centre<br />
in Afuze. We constructed a new<br />
health centre at Emai, Afuze.<br />
Across the 11 wards in the local<br />
government area all our Primary<br />
Health Care centres are doing<br />
excellently well.<br />
In the area of electricity we<br />
have extended electricity to<br />
some communities that were<br />
before now not enjoying the<br />
facilities. We have bought and<br />
installed transformers in some<br />
communities like Ake, Uanhumi,<br />
Ihievbe, Afuze among others.<br />
The council bought and installed<br />
500KVA transformer in Ohanmi,<br />
500KVA in Ihievbe, extension<br />
of electricity supply to Igboro<br />
community, purchase of 500KVA<br />
transformer for Ake, construction<br />
and installation of 500KVA<br />
at Uanhumi, Erha, Igbirra camp<br />
in Uokha, Afuze among others.<br />
The transformers distribution<br />
is across the 11 wards in the<br />
council.<br />
In transportation sector,<br />
we bought eight new buses to<br />
Ijegbai<br />
boost our fleets. The council has<br />
opened route to Abuja. Plans are<br />
also underway to commence<br />
operation in Lagos route.<br />
Four water projects have so<br />
far been executed in the locality<br />
and we are in the process<br />
of embarking on constructing<br />
additional eight water projects.<br />
The purpose was to ensure meeting<br />
up the implementation of<br />
the Millennium Development<br />
Goals (MDGs) which unfortunately<br />
I think Nigeria is going<br />
to miss. Water and sanitation<br />
is one of the key components<br />
in meeting the MDGs goals and<br />
as such people should have access<br />
to safe drinking water. As<br />
one of the requirements, we<br />
feel that as we go ahead in the<br />
21st Century people should not<br />
be going to the stream to fetch<br />
water. They should have access<br />
to safe drinking water. This is<br />
our motivation and it is geared<br />
towards meeting the MDGs. We<br />
have water project in Uanhumi,<br />
Ago-Gbodo, Oroe and Igbirra<br />
camp in Warrake.<br />
Also, the council participated<br />
in a lot of state-sponsored sporting<br />
competitions with a view to<br />
taking our youths away from the<br />
streets. We hosted the first and<br />
second editions of the late Michael<br />
Imoudu memorial sports<br />
competition here in Afuze.<br />
In overall we have done extremely<br />
well in all sectors of<br />
governance in the local government.<br />
But our major challenge<br />
is the downturn in the economy<br />
which is telling very much on<br />
Nigerians as we speak. But to<br />
the glory of God even though<br />
the Federal Government has not<br />
been able to pay our April salary,<br />
the council has paid its workforce<br />
up to date. We however,<br />
hoped sincerely that there will be<br />
improvement in the finances of<br />
the council to enable us perform<br />
better than we have been doing.<br />
We hoped that with the coming<br />
of the new government we are<br />
going to see improvement especially<br />
in the area of the collection<br />
of revenue at the federal level<br />
which has not been transparent<br />
before now.<br />
We hope to see improvement<br />
in ensuring that whatever is<br />
due to the federation account is<br />
achieved and all the federating<br />
units that are the three tiers of<br />
governments get what is actually<br />
due to them. That is what we<br />
are earnestly praying for come<br />
May 29.<br />
The period we used to hear<br />
of 400,000 barrels of crude oil<br />
stolen on daily basis we pray that<br />
it will go away with this out-going<br />
administration, and with the<br />
coming of the APC presidentelect,<br />
General Muhammadu<br />
Buhari administration we are<br />
going to see a new thing totally<br />
different from what we are currently<br />
experiencing in the outgoing<br />
government because as<br />
it is today, no man can actually<br />
plan with the budget because<br />
it is subject of vagaries that are<br />
beyond your control.<br />
What has been the miracle<br />
behind the council meeting<br />
its workforce obligations,<br />
especially in the payment of<br />
salaries and other financial<br />
commitments in spite of the<br />
aforementioned challenges?<br />
Councils are different and<br />
they are being governed by<br />
different managers. The teams<br />
we have in Owan East Local<br />
Government Area are wonderful<br />
one. We have that foresight<br />
of setting aside certain money<br />
every month for the payment of<br />
salaries but with the dwindling<br />
allocation we have gone into<br />
our savings and it is eventually<br />
now that we are exhausting it.<br />
We used to set aside one month<br />
salary so that at any giving time<br />
even before federal allocation<br />
comes we will pay our staff. Consistently,<br />
since last year, we have<br />
been having shortfall of funds<br />
from the federal allocation and<br />
that has made us to go into the<br />
savings. But thank God that as at<br />
today, we have paid our salary up<br />
to the month of April.<br />
We are embarking on serious<br />
revenue drive within the ambit<br />
of the law. We know the areas<br />
that we can harness our IGR and<br />
those we cannot go into. We have<br />
a filling station where we sell<br />
petroleum products, we are into<br />
transportation and any other<br />
collectible revenue that is due to<br />
us by law we are doing it to ensure<br />
that whatever shortfall we<br />
are able to augment so that we<br />
don’t wake up one day and not<br />
be able to pay our staff because I<br />
believe that the workers deserve<br />
their wages. Having worked for<br />
30 days and you asked workers to<br />
wait for first to fifth months the<br />
motivation will be very low and<br />
calling on them to come to work<br />
will be a bit difficult and not to<br />
talk that they have responsibility<br />
to even offer to their respective<br />
families.<br />
So, we will continue to try<br />
within our means to ensure that<br />
we meet up with our obligations<br />
and we are very hopeful that<br />
by the time the president-elect<br />
assumes full leadership of the<br />
country, the revenue accruing<br />
to the federation account will<br />
substantially increase and I<br />
think that was the fulcrum of the<br />
APC governors’ meeting with<br />
the president-elect recently in<br />
Abuja, because a lot of states and<br />
local governments are defaulting<br />
in the payment of their salary<br />
obligation to their staff which<br />
to me is the least thing that anybody<br />
will think of at all. If you are<br />
holding office you should be able<br />
to pay your workers at the end of<br />
the month.<br />
Is there any plan by the<br />
council authorities to set up<br />
any other economic venture<br />
in addition to the filling station<br />
and transport firm to<br />
boost its internally generated<br />
revenue before the end of<br />
your tenure?<br />
If I have my way, we will go<br />
into serious mechanized agriculture.<br />
Owan East is noted for<br />
its good fertile soil and I think<br />
that if we have the resources to<br />
be able to buy tractors and other<br />
agricultural equipment that will<br />
enable us to go into mechanized<br />
farming we will not hesitate to do<br />
it. I believe that the country will<br />
go back to agriculture if eventually<br />
that will be the only way out<br />
of the situation we have found<br />
ourselves at the moment.<br />
Would you recommend<br />
the council’s IGR model to<br />
the leadership of other local<br />
governments or state governments<br />
across the country?<br />
It depends on whatever the<br />
administrator in the various<br />
councils or state governments<br />
has as a policy. They have to<br />
choose whether to adopt our<br />
model or not. It is a voluntary<br />
decision. They have to choose<br />
which economic model to follow<br />
or not. Every government<br />
has its own tactics and policy on<br />
whatever it wants to do. I believe<br />
that every government will have<br />
to look at where its comparative<br />
advantage is higher because if<br />
you go into transport system<br />
and you are in a place where the<br />
population is not that very much<br />
it will be a waste. It cannot be a<br />
wholesale recommendation to<br />
everybody that you must go into<br />
this line of business.<br />
How has the council implemented<br />
its budgetary allocation<br />
to develop and boost<br />
agricultural sector annually?<br />
We have been trying our best.
Monday 18 May 2015<br />
Policies • Issues • Debates<br />
BUSINESS DAY<br />
51<br />
POLITICS<br />
Remembering Jonathan’s good deeds<br />
CHUKWUEMEKA EMERE<br />
As you take a bow on<br />
May 29, President<br />
Goodluck Jonathan,<br />
you will go down in<br />
history as a leader<br />
who insisted to the last minute<br />
that your ambition did not<br />
worth the blood of any Nigerian.<br />
Before the general election,<br />
not many people gave you the<br />
benefit of doubt to deliver a<br />
successful poll. Many more<br />
became soothsayers overnight<br />
to the point of singing the requiem<br />
of the Nigeria state. They<br />
said Nigeria’s breakup was imminent.<br />
They quoted and tried<br />
to support their fears with what<br />
they claimed had been said by<br />
some foreigners many years<br />
ago. For them, 2015 general<br />
election was a time bomb.<br />
Despite a deluge of criticisms,<br />
you held tenaciously to<br />
the mantle of leadership in the<br />
face of challenging socio-political,<br />
religious and economic<br />
situation of the country. They<br />
dressed you in many garbs.<br />
They called you ‘Mr. Go Slow’;<br />
they said you were bereft of<br />
ideas. Not many people acknowledged<br />
the challenge of<br />
office and the burden upon<br />
your shoulders. And no one<br />
was ready to lend a helping<br />
hand. It was Jonathan’s problem,<br />
they say.<br />
You ran a re-election campaign<br />
with the initial full support<br />
of leadership of your party;<br />
in fact, the national headquarters<br />
of the PDP ensured that no<br />
other person contested the primaries<br />
with him; they moved<br />
from one part of the country<br />
to another with you, during<br />
the campaigns, but today,<br />
Jonathan is alone. You have<br />
been deserted by the National<br />
Working Committee (NWC)<br />
members who now claim they<br />
were not being carried along<br />
and that their counsel was not<br />
sought during the campaign,<br />
REMI FEYISIP0.<br />
Governor Rauf Aregbesola<br />
of Osun State has<br />
said the challenges the<br />
state is facing presently<br />
is temporary and that his<br />
administration would fulfill all<br />
its promises to the people.<br />
Aregbesola stated that his administration<br />
has fulfilled every<br />
promise made to the people, saying<br />
every other promise made<br />
that has not yet been fulfilled,<br />
would soon be fulfilled.<br />
“We will not disappoint the<br />
people who trusted us and keep<br />
giving us the mandate to govern.<br />
It is not in our DNA to disap-<br />
Jonathan<br />
The Bayelsa man is now the<br />
sacrificial lamb. I admire the<br />
way you have reduced all that<br />
to something unserious- smiling<br />
and maintaining his pleasant<br />
disposition.<br />
In defeat, you have turned<br />
out to be a role model and have<br />
been commended globally. By<br />
your prompt intervention and<br />
deployment of sagacity, you<br />
prevented bloodshed and anarchy<br />
that could have probably<br />
headed the country into disintegration.<br />
You also restored<br />
the dignity of the Nigerian<br />
state that appeared to have<br />
been eroded in the eyes of the<br />
outside world.<br />
Not only that the 2015 general<br />
elections have been acclaimed<br />
as one of the best in<br />
point, whatever challenges we<br />
are facing can only be temporary;<br />
our commitment and<br />
passion to serve our people is<br />
undiminished.<br />
“We remain resolute to lay<br />
a solid foundation and preside<br />
over the most peaceful and the<br />
most prosperous era in the annals<br />
of this state. We shall fulfill<br />
our mandate because our best is<br />
yet to come,” he said.<br />
Speaking during the RLG<br />
product Discovery Day held at<br />
the RLG Adulawo Technology<br />
City, Ilesa-Akure Expressway,<br />
he said the People’s Democratic<br />
Party (PDP) is the harbinger of<br />
Nigeria’s problem.<br />
RLG plant, a public-private<br />
partnership arrangement between<br />
RLG Ghana and Osun is<br />
the biggest in Africa and the first<br />
of its kind in Nigeria.<br />
Aregbesola stressed that given<br />
the potential of the electronic<br />
market in Nigeria, RLG is a necessity<br />
which when in full operation,<br />
will be able to assemble all<br />
kinds of electronic gadgets from<br />
mobile phones, LCD TV, desktop<br />
computers and any electronic<br />
device imaginable.<br />
He added that RLG has<br />
recorded a significant breakthrough<br />
with GSM service providers<br />
partnering with it.<br />
According to him, “RLG has<br />
received an order for 50,000<br />
phones each from Airtel Nigeria<br />
recent history by stakeholders,<br />
your subsequent input is indeed<br />
remarkable and rewarding.<br />
You doused tension where<br />
necessary in the event of unfriendly<br />
attitude by so called<br />
enemies of progress. You spoke<br />
out loudly assuring that all is<br />
well. At the ward level, you and<br />
your wife, Patience, were patient<br />
enough to cast your votes<br />
in the midst of underperforming<br />
electronic capturing machine;<br />
you kept your cool and<br />
calm too. You spoke out, urging<br />
the electorates to take it kindly<br />
with the smart card readers,<br />
the INEC staff generally. Others<br />
would have reacted differently.<br />
Where allegations of complicity<br />
were rife in some collation centres,<br />
you continued to applaud<br />
the performance of INEC.<br />
Your calm disposition was<br />
mistaken for weakness, all for<br />
the sake of peace of the nation.<br />
You are the most abused<br />
President of all time. You are<br />
a kitchen, kindergarten, ‘moi<br />
moi’ President. Your Presidency<br />
is least honoured, a disaster<br />
for the polity. Your detractors<br />
are now beating their chest<br />
in remorse of conscience, accusing<br />
the devil for their misgivings.<br />
You bore all these insults<br />
and aspersions stoically,<br />
the Socrates of our time, the<br />
Ghandhi and Mandela of our<br />
age. You are now a rising star<br />
to behold, a living saint, saint<br />
Goodluck. You are now highly<br />
priced jewelry for doing your<br />
job well for our fatherland,” the<br />
retired civil servant said.<br />
“When the zero moment<br />
arrived, you were again superlative.<br />
In the elections proper,<br />
your men in the field told the<br />
level of complicity in the electoral<br />
process by other stakeholders.<br />
PDP youth wing was<br />
prepared to go on the prowl<br />
awaiting your next line of action<br />
to reject the outcome of<br />
the elections based on the<br />
alleged irregularities, even<br />
prepared to go the extra mile.<br />
But where electoral process is<br />
compromised, you seemed to<br />
have given blanket cover. You<br />
ignored all the calls from the<br />
field about massive upsurge of<br />
underage voters in their tens of<br />
thousands. Where outrageous<br />
and unimaginable figures were<br />
posted in favour of opponents,<br />
without record of any void<br />
votes, you have not made any<br />
calls for further investigations.<br />
You allowed the sleeping dog<br />
lie, all for the peace of the polity.<br />
When your political opponents<br />
nursed the fear that you<br />
would not accept defeat, is this<br />
not predicated on the allegations<br />
of electoral malpractices?<br />
But you offered an olive branch<br />
instead never giving a bite, all<br />
for posterity. We may ask where<br />
lies your sins? You are now a<br />
virtuous man; you have now<br />
become a household name for<br />
good reasons. Your untimely<br />
call to General Muhammadu<br />
Buhari, winner of the presidential<br />
election calmed frenzied<br />
nerves.<br />
The expected inevitable,<br />
war, confusion and eventual<br />
disintegration were not to be.<br />
Everyone buried the hatchet.<br />
You have not even proceeded<br />
to the tribunals or the courts<br />
to delay the process. The certificate<br />
saga which bedeviled<br />
the APC President elect is now<br />
swept under the carpet. Everyone<br />
is speaking about the high<br />
expectations of the incoming<br />
administration.<br />
You have laid a solid foundation<br />
for future leaders to<br />
emulate to throw in the towel<br />
when ovation is loudest. Nevertheless,<br />
President elect General<br />
Muhammadu Buhari: you have<br />
enormous task ahead of you:<br />
the responsibility of unifying<br />
all the segments of Nigeria and<br />
indeed to run an all inclusive<br />
government, the best option.<br />
As President elect, you must<br />
endeavour to imbibe the culture<br />
of humility which is the<br />
hallmark of credible leadership<br />
quality exemplified by Mr.<br />
President’s show of magnanimity<br />
in defeat in the Presidential<br />
polls.<br />
We proudly applaud Mr.<br />
President in this regard for his<br />
consistency. Moreover, Mr.<br />
President Goodluck Jonathan,<br />
at the very beginning of this<br />
process, assured Nigerians that<br />
“his ambition does not worth<br />
the spilling of blood of any<br />
citizen of Nigeria” and he kept<br />
his word. This singular action<br />
of Mr. President would surely<br />
earn him a place in the world’s<br />
Guinness book of Records.<br />
Emere is a retired civil servant<br />
We’ll deliver all our promises to the people - Aregbesola<br />
and Globacom,” stressing that<br />
the company has provided direct<br />
employment to 150 workers.<br />
Aregbesola pointed out that<br />
the next phase of its operation<br />
will provide employment to<br />
1,500 salespersons who will man<br />
the kiosks and other sales outposts<br />
for RLG products as it enters<br />
the mobile phone markets.<br />
He flayed critics and naysayers<br />
who last year alleged that<br />
RLG was for the purpose of<br />
the election that was to come<br />
up later in the year, thanking<br />
God that such critics have been<br />
proven wrong.<br />
According to him, “they predicted<br />
that OYES would fail,<br />
they predicted that O’MEALS<br />
would fail, they even predicted<br />
that O’REAP would fail. Then of<br />
course, they predicted that we<br />
would not win re-election.<br />
“They also predicted that the<br />
alliance that produced the All<br />
Progressives Congress (APC)<br />
would collapse in six months.<br />
Then, they predicted that the<br />
APC Presidential Candidate<br />
would not win the election.<br />
“We can now laugh at their<br />
puerile and malicious predictions<br />
that were doomed to fail<br />
ab initio. When their predictions<br />
failed, their next move now is to<br />
cowardly attack our families,”<br />
the governor told the gathering.
Monday 18 May 2015<br />
52 BUSINESS DAY<br />
Harvard<br />
Business<br />
Review<br />
MondayMorning<br />
In association with<br />
ANDRIS A. ZOLTNERS,<br />
P.K. SINHA AND SALLY E.<br />
LORIMER<br />
Technology trends that matter to sales teams<br />
The convergence<br />
of mobile, analytics,<br />
context-rich<br />
systems and the<br />
cloud is transforming<br />
the sales process<br />
and enabling buyers and<br />
salespeople to engage with<br />
each other more effectively.<br />
Recently, Gartner, an information<br />
technology research<br />
and advisory company, listed<br />
10 top strategic technology<br />
trends. Some have significant<br />
implications for sales forces,<br />
including:<br />
1. COMPUTING EVERY-<br />
WHERE: Through the proliferation<br />
of mobile devices,<br />
buyers and salespeople can<br />
reach each other anywhere,<br />
anytime.<br />
2. ADVANCED, PERVA-<br />
SIVE AND INVISIBLE ANA-<br />
LYTICS: By layering analytics<br />
seamlessly on top of linked<br />
data on customers, sales activities<br />
and salespeople, companies<br />
can deliver the right<br />
assistance to salespeople and<br />
customers at the right time.<br />
3. CONTEXT-RICH SYS-<br />
TEMS :Data and analytical<br />
insights can be tailored for<br />
specific situations faced by<br />
customers and company<br />
personnel. The customization<br />
aligns perfectly with how<br />
salespeople think and work.<br />
4. CLOUD COMPUTING<br />
AND SOFTWARE-DEFINED<br />
INFRASTRUCTURE: These<br />
enable fast deployment and<br />
scaling of systems to keep up<br />
with the changing needs of<br />
the business, the customers<br />
and the sales force.<br />
Consider these examples:<br />
A telecom company developed<br />
a filtering model<br />
that used advanced analytics<br />
to recommend to account<br />
salespeople which products<br />
and services to offer to each<br />
customer based not only on<br />
past purchases within that<br />
account but also on purchases<br />
in other accounts with<br />
a similar profile (i.e., “data<br />
doubles”). The model also<br />
forecasted the size of the opportunity<br />
and the likelihood<br />
of purchase at each account.<br />
The data and technology enabled<br />
the sales force to better<br />
match products with customers,<br />
driving stronger uptake<br />
of new product lines and improving<br />
the opportunities for<br />
cross-selling and up-selling.<br />
A company in the financial<br />
services industry examined<br />
millions of phone<br />
records and listened to dozens<br />
of calls to identify how<br />
to improve the sales process.<br />
Using advanced analytics, the<br />
company produced simple<br />
but groundbreaking insights.<br />
First, by focusing on just seven<br />
of the 14 target industries,<br />
salespeople could increase<br />
profits by 16%. Second, by<br />
shifting calls to the right time<br />
of day, salespeople could<br />
triple the probability of a sale<br />
and increase profits by 20%.<br />
Third, by adopting the sales<br />
techniques used by top performers,<br />
salespeople could<br />
enhance their results.<br />
As new trends emerge,<br />
sales forces must constantly<br />
and creatively adopt and<br />
adapt new technologies to<br />
improve sales processes and<br />
better serve customers.<br />
(Andris A. Zoltners is a<br />
professor emeritus of marketing<br />
at Northwestern University’s<br />
Kellogg School of<br />
Management. He and P.K.<br />
Sinha are co-founders of ZS<br />
Associates. Together with<br />
Sally Lorimer, they are co-authors<br />
of “Building a Winning<br />
Sales Management Team:<br />
The Force Behind the Sales<br />
Force.”)<br />
(C) (2015) Harvard Business Review. Distributed by New York Times Syndicate
Monday 18 May 2015<br />
Harvard<br />
Business<br />
Review<br />
MondayMorning<br />
BUSINESS DAY<br />
In association with<br />
53<br />
What tesla and apple both know<br />
about entering new markets<br />
RON ADNER<br />
Electric carmaker<br />
Tesla recently<br />
made headlines<br />
w h e n i t<br />
announced<br />
plans to enter the market<br />
for battery-based, powerbackup<br />
systems for homes,<br />
businesses and utilities.<br />
With its elegantly designed,<br />
cleverly branded Powerwall,<br />
Tesla has the potential to<br />
deploy a true ecosystem<br />
strategy to jump-start what<br />
has so far been a productbased<br />
market.<br />
The battery-based<br />
business has been a decadelong<br />
disappointment for<br />
both incumbents and startups.<br />
But Tesla could succeed<br />
- and transform the market.<br />
Tesla could leverage<br />
what I call “ecosystem<br />
carryover”: using positions<br />
in existing market spaces<br />
to create a new marketspace<br />
position. Ecosystem<br />
carryover was Apple’s<br />
secret sauce in entering the<br />
then-established market<br />
ALEXANDRA SAMUEL<br />
Yes, you receive<br />
more<br />
emails than<br />
you can reply<br />
to or even<br />
read. Yes, the same goes<br />
blog posts, articles and<br />
newsletters. And yes,<br />
the number of your<br />
LinkedIn connections,<br />
Twitter contacts and<br />
Facebook friends feels<br />
overwhelming.<br />
But digital overload<br />
is also a professional<br />
asset that challenges us<br />
to make constant, systematic<br />
choices about<br />
where we’ll invest our<br />
time and attention. Thus<br />
we develop habits that<br />
make it easier to manage<br />
all the distractions<br />
and requests - not just<br />
the digital ones - that<br />
can blow us off course.<br />
Digital overload helps<br />
you hone your ability to<br />
focus. As author Daniel<br />
Goleman has noted, the<br />
for smartphones - and<br />
changing the game. It wasn’t<br />
the iPhone’s uniqueness<br />
that persuaded mobile<br />
operators to break from<br />
previous industry norms;<br />
rather, it was the assured<br />
support of iPod buyers<br />
happy to upgrade to this<br />
next-generation device.<br />
Ecosystem carryover<br />
is the key to successful<br />
market convergence. This<br />
mechanism links initially<br />
separate markets into<br />
what looks like - after the<br />
fact - a single coherent<br />
opportunity. It’s easy to<br />
forget that MP3 players and<br />
mobile phones were once<br />
regarded as separate market<br />
opportunities. So, too, were<br />
electric cars and homeenergy<br />
management.<br />
For Tesla, the ability<br />
to pursue an ecosystem<br />
carryover strategy is twofold:<br />
The company’s<br />
position with Tesla car<br />
owners - a customer base<br />
characterized by loyalty and<br />
high disposable income.The<br />
power of Elon Musk, Tesla’s<br />
Turn digital overload to your advantage<br />
ability to effectively focus<br />
and direct attention<br />
is a core competency of<br />
effective leaders.<br />
Digital overload forces<br />
us to choose: Will I<br />
answer that email, or<br />
finish my PowerPoint<br />
deck? Will I catch up<br />
on professional news<br />
on LinkedIn, or browse<br />
Twitter?<br />
To make these decisions<br />
efficiently, we<br />
need to develop guidelines<br />
that help us consistently<br />
(and over time,<br />
instinctively) determine<br />
what information merits<br />
our attention.<br />
Setting up digital systems<br />
makes us more efficient<br />
across the board.<br />
Creating email rules<br />
and filters, Google news<br />
alerts and Twitter lists<br />
helps translate our priorities<br />
into automated<br />
systems: Once configured,<br />
they manage those<br />
constant decisions<br />
about which messages,<br />
founder and chairman of<br />
SolarCity, the leader in<br />
home-based solar-power<br />
installation, to convince its<br />
distribution channels that<br />
Powerwall can win big.<br />
If Tesla can skillfully<br />
leverage these relationships,<br />
it should be able to build<br />
a compelling competitive<br />
advantage that won’t erode<br />
through product imitation.<br />
Consider the performance<br />
of Apple’s highly respected<br />
rivals in the smartphone<br />
market: Even though they’ve<br />
delivered products nearly<br />
identical to Apple’s, they’ve<br />
only been able to capture<br />
slivers of the profit pie.<br />
Tesla’s move into the<br />
battery storage arena offers<br />
a great lesson in ecosystem<br />
strategy. The next test is its<br />
execution.<br />
(Ron Adner is a<br />
professor of strategy<br />
and entrepreneurship at<br />
Dartmouth College’s Tuck<br />
School of Business and<br />
author of “ The Wide Lens:<br />
What Successful Innovators<br />
See that Others Miss.”)<br />
news stories and people<br />
are a priority.<br />
By creating a digital<br />
notebook system for<br />
projects, you’ll get adept<br />
at digital note-taking<br />
and retrieval so that all<br />
your work is more accessible<br />
and collaborative.<br />
And by focusing<br />
your LinkedIn network<br />
on the people that matter<br />
most, you can find<br />
a valuable new connection<br />
whenever you<br />
need it.<br />
So let’s stop treating<br />
this digital overload as<br />
a problem and instead<br />
recognize it for what<br />
it is: an opportunity to<br />
strengthen our focus<br />
and get smarter about<br />
how we use digital tools.<br />
(Alexandra Samuel is<br />
an expert in online engagement<br />
and the author<br />
of “ Work Smarter with<br />
Social Media.” )<br />
Brought to you courtesy of First Bank Nigeria
54<br />
Monday 18 May 2015
Monday 18 May 2015<br />
55
Monday 18 May 2015<br />
56 BUSINESS DAY<br />
THOMSON REUTERS<br />
Luxembourg’s Prime Minister Xavier Bettel poses with his partner, Belgian Gauthier Destenay (L), after their wedding ceremony at Luxembourg’s<br />
city hall, May 15, 2015. Luxembourg’s prime minister on Friday becomes the first serving leader in the European Union to marry<br />
someone of the same sex, and only the second worldwide - and all in a tiny, mostly Catholic country often considered rather conservative.<br />
Bettel, 42, and his civil partner Gauthier Destenay are among the first gay men to exercise their right to wed since the Grand Duchy in<br />
January become the latest EU state to extend full rights to same-sex marriages. REUTERS<br />
Washington state governor declares<br />
drought emergency<br />
VICTORIA CAVALIERE<br />
Washington<br />
state Governor<br />
Jay<br />
Inslee declared<br />
a<br />
statewide drought emergency<br />
on Friday, saying<br />
drought conditions due to a<br />
lack of snowpack are some<br />
of the worst on record in a<br />
region normally known for<br />
its drizzly weather.<br />
In an announcement in<br />
the state capital of Olympia,<br />
Inslee said the drought<br />
had “deepened dramatically<br />
in the past few weeks,”<br />
with conditions expected to<br />
worsen as the hot summer<br />
months approach.<br />
VW group sales fall for first time in years<br />
• April sales down 1.3 pct to 853,200 cars -VW<br />
• Monthly sales have risen at least since Dec 2010 -VW data<br />
Volkswagen group sales<br />
fell for the first time in<br />
at least four and a half<br />
years in April, raising pressure<br />
on the German carmaker to<br />
fix trouble spots laid bare by<br />
the shock ouster of Chairman<br />
Ferdinand Piech.<br />
Deliveries at the 12-brand<br />
group, including luxury division<br />
Audi and sports-car maker<br />
Porsche, slid 1.3 percent<br />
year-on-year to 853,200 cars,<br />
VW said on Friday, as slowing<br />
momentum in China and a<br />
drop in Latin American sales<br />
outweighed gains in Europe.<br />
Monthly sales at Europe’s<br />
largest automotive group have<br />
not shrunk at least since Decem-<br />
The emergency declaration<br />
will free up funds and<br />
water rights to help counties<br />
most in need, Inslee said.<br />
Rain totals in the state<br />
were equivalent to prior<br />
years, Inslee said. But the<br />
snowpack, which melts<br />
into streams, lakes and<br />
rivers and is vital to water<br />
supplies, was only 16 percent<br />
of average.<br />
“What we lack is snow,”<br />
Inslee said. “We are calling<br />
it a snowpack drought.”<br />
Washington, know as<br />
the Evergreen State due to<br />
its abundant green forests<br />
kept lush by heavy precipitation,<br />
is one of several<br />
western states struggling<br />
under drought conditions.<br />
ber 2010, according to company<br />
records checked by Reuters.<br />
The drop in April, published<br />
by VW after German<br />
stock markets had closed for<br />
the week, reflects the 4.8 percent<br />
decline published earlier<br />
this week in core brand sales<br />
which account for 60 percent<br />
of group deliveries.<br />
“While we felt tailwinds in<br />
Western Europe and North<br />
America and could increase<br />
group deliveries strongly in<br />
some places, South America<br />
and Eastern Europe remain<br />
challenging, especially due<br />
to the market development<br />
in Russia,” VW sales chief<br />
Christian Klingler said in a<br />
California is enduring<br />
its worst drought on<br />
record, and that state’s<br />
mountain snowpack,<br />
which usually provides<br />
about a third of the state’s<br />
water, is at the lowest level<br />
on record, according to<br />
state officials. Drought<br />
emergencies have also<br />
been declared in parts of<br />
Oregon and Nevada.<br />
Officials in Washington<br />
state were still deciding<br />
which agricultural areas will<br />
receive additional water resources<br />
and other support,<br />
Inslee said. In some regions,<br />
water was being shifted<br />
creek-to-creek and fish were<br />
being hauled to more abundant<br />
water, Inslee added.<br />
statement.<br />
Volkswagen Chief Executive<br />
Martin Winterkorn has<br />
pledged to tackle problems<br />
- such as weak profitability at<br />
the core VW brand and underperformance<br />
in the United<br />
States - that have come into<br />
focus after being flagged by<br />
Piech, prompting a public<br />
showdown with the CEO and<br />
the Chairman Piech’s ouster.<br />
While VW is struggling to<br />
revive business in the U.S. due<br />
to a lack of models in lucrative<br />
crossover segments, the<br />
Wolfsburg-based carmaker<br />
is also grappling with slowing<br />
demand in China, a steady<br />
source of group profit in past<br />
“We are seeing things<br />
happen at this time of year<br />
we just have never seen<br />
before,” the Democratic<br />
governor said. “On the<br />
Olympic Peninsula - where<br />
there would normally be 80<br />
inches (2 meters) of snow<br />
today in the mountains - the<br />
glacier lilies are blooming.”<br />
State officials have estimated<br />
$1.2 billion in crop<br />
losses associated with the<br />
drought, he said.<br />
Drought conditions also<br />
mean the annual wildfire<br />
season could be longer and<br />
more destructive, Inslee<br />
said. Last year, Washington<br />
state endured one of its<br />
worst wildfire seasons on<br />
record.<br />
years and destination of more<br />
than a third of its models.<br />
“The risks from the (VW<br />
brand) sales numbers and<br />
China news pose material<br />
downside risks to earnings<br />
per share” at VW, Morgan<br />
Stanley said on Thursday in a<br />
note to analysts. “We think the<br />
upside for the group is being<br />
overestimated.”<br />
The group did not break<br />
out regional sales figures<br />
for the month of April but<br />
said that deliveries in Brazil<br />
were down 26.7 percent at<br />
200,400 vehicles in the first<br />
four months of 2015, while<br />
sales were up 0.2 percent at<br />
1.19 million in China.<br />
The forgotten task...<br />
Continued from back page<br />
quintessentially French.<br />
From the fissiparous divisions<br />
of warring dukedoms<br />
from Normandy to<br />
Angouleme in the eighteenth<br />
century, the French<br />
forged a single state and<br />
nation, united together<br />
by their love of liberty,<br />
equality and fraternity. The<br />
revolution and Bonaparte<br />
did their part. Succeeding<br />
generations of statesmen<br />
from Louis XIV to Cardinal<br />
Richelieu to Charles de<br />
Gaulle, Pierre Mendes-<br />
France and François Mitterrand<br />
took up the mantle<br />
of nation building and<br />
never relented. For them,<br />
France is an eternal idea<br />
to be nurtured, sustained<br />
and advanced forever.<br />
Is Nigeria a country?<br />
Juridically, yes. Are we a<br />
nation? Sadly, not yet.<br />
The task of the coming<br />
generations of leaders is to<br />
give our people a sense of<br />
nationhood. That cannot<br />
be achieved by sectionalising<br />
and privatising government.<br />
We need a broadbased<br />
government that has<br />
a place for everyone. There<br />
are various other vehicles<br />
that can enhance nation<br />
building. One of them is<br />
the railways. I have always<br />
harped on the fact that<br />
railway workers in postindependence<br />
Nigeria<br />
were people who felt they<br />
belonged together. The<br />
parents of both Azikiwe<br />
and Ojukwu worked in<br />
the railways. Hausa became<br />
the first language of<br />
their children. When the<br />
S.Africa unions expected to sign<br />
public sector wage deal -sources<br />
Most of South Africa’s<br />
public sector<br />
unions are expected<br />
to accept the government’s<br />
7 percent final wage<br />
hike offer on Friday, averting<br />
a potentially crippling strike,<br />
two sources said.<br />
About 1.3 million teachers,<br />
police officers and<br />
health workers were voting<br />
this week on the government’s<br />
offer.<br />
“It is almost a certainty<br />
we will put pen to paper<br />
this afternoon,” one source<br />
told Reuters.<br />
“The majority unions<br />
will sign and we expect a<br />
deal to be signed this afternoon,”<br />
said a second source.<br />
Unions initially wanted<br />
15 percent but lowered<br />
their demand to 10 percent<br />
as the government, under<br />
pressure to contain costs<br />
during a period of slack<br />
railways died Nigerians<br />
became strangers to one<br />
another. Other unifying<br />
vehicles include football,<br />
sports and youth and development<br />
programmes.<br />
The NYSC was once a<br />
great unifying vehicle, but<br />
I doubt if it still is. The unity<br />
schools did their part,<br />
but they are a shadow of<br />
what they once were. I do<br />
hope and pray this message<br />
will not be lost on<br />
our new leaders. Nigeria<br />
can be fixed. Our country<br />
can be made to work. But<br />
we must begin, as it were,<br />
from the basics. We have<br />
to give our people a sense<br />
of purpose and collective<br />
destiny. The great Cambridge<br />
political philosopher<br />
Sir Ernest Barker,<br />
on his study of Greek political<br />
theory, taught that<br />
prosperous democracies<br />
can only emerge where<br />
the people have sense of<br />
collective spiritual identification.<br />
Toleration as a political<br />
virtue has been harped<br />
upon since the times of<br />
John Locke and Thomas<br />
Jefferson. Nigerians must<br />
learn to be more tolerant<br />
and more respectful<br />
of one another’s cultures<br />
and belief systems. A great<br />
deal of it must begin from<br />
the classroom. We should<br />
bring back the study of history<br />
in the curriculum and<br />
ensure our young people<br />
understand the glory that<br />
was Nigeria in the past, the<br />
challenges of the moment<br />
and the promise of greatness<br />
that is our manifest<br />
destiny.<br />
economic growth, dug in<br />
its heels.<br />
The state offered to adjust<br />
salaries in the second<br />
and third years to average<br />
South Africa’s consumer<br />
price index (CPI) plus one<br />
percent. For the current<br />
year it proposes average<br />
projected CPI, forecast by<br />
Treasury at 4.8 percent,<br />
plus 2.2 adjustment.<br />
Besides the salary hike,<br />
the government has offered<br />
a medical aid increase of<br />
28.5 percent and a housing<br />
allowance of 1,200 rand.<br />
Five years ago, just after<br />
South Africa hosted<br />
the Soccer World Cup,<br />
hundreds of thousands<br />
of public sector workers<br />
shut down schools and<br />
hospitals in a protracted<br />
and violent strike, the last<br />
major industrial action in<br />
the sector.
Monday 18 May 2015<br />
BUSINESS DAY<br />
57<br />
THOMSON REUTERS<br />
Congo tells UN its offensive against<br />
Rwanda rebels going well<br />
LOUIS CHARBONNEAU<br />
The army of Democratic<br />
Republic<br />
of the Congo has<br />
been making progress<br />
in an offensive<br />
against Rwandan rebels in the<br />
country’s conflict-torn east,<br />
despite the withdrawal of<br />
United Nations support for the<br />
operation, Kinshasa told the<br />
U.N. Security Council.<br />
In a May 8 letter to the president<br />
of the 15-nation council,<br />
Raimonda Murmokaite,<br />
released on Friday, Congo’s<br />
U.N. mission also reiterated<br />
its desire to agree on an “exit<br />
strategy” for the withdraw of<br />
the U.N. peacekeeping force<br />
in Congo, MONUSCO.<br />
Western diplomats say a<br />
months-long Congolese army<br />
(FARDC) campaign against<br />
the Democratic Forces for<br />
the Liberation of Rwanda<br />
(FDLR) rebels has achieved<br />
little and revived doubts about<br />
the will and capacity of Congo<br />
to defeat a group at the heart of<br />
decades of conflict in Africa’s<br />
Great Lakes region.<br />
Kinshasa has a different<br />
view, and described the operation<br />
in a positive light.<br />
“These operations continue<br />
to have encouraging results,”<br />
Congo’s U.N. Ambassador<br />
Ignace Gata Mavita wrote<br />
to Murmokaite. “In South<br />
Kivu, the Uvira, Shabunda<br />
and Mwenga roads have been<br />
entirely cleared of FDLR sanctuaries,<br />
headquarters and<br />
command structures.”<br />
“The efforts of FARDC will<br />
now focus mainly on the Kalehe,<br />
Kabare and Walungu roads<br />
in this province, as well as the<br />
roads of North Kivu province<br />
that have not yet been cleared<br />
of FDLR,” he added.<br />
United Nations peacekeepers<br />
and FARDC had<br />
jointly planned a military<br />
campaign to take on the<br />
FDLR, which includes former<br />
soldiers and Hutu militiamen<br />
responsible for Rwanda’s 1994<br />
genocide, after it failed to<br />
meet a January deadline to<br />
disarm.<br />
But MONUSCO withdrew<br />
planned support for the anti-FDLR<br />
operations, which<br />
would have ranged from food<br />
and transport to surveillance<br />
drones and attack helicopters,<br />
after Congo appointed two<br />
generals to head the offensive<br />
who are both accused of human<br />
rights abuses.<br />
In March, the Security<br />
Council refused to cut<br />
the number of MONUSCO<br />
peacekeepers in Congo until<br />
progress was made in the<br />
campaign against the FDLR,<br />
snubbing government calls<br />
for a decrease.<br />
Dozens of armed groups<br />
operate in eastern Congo,<br />
where a 1998-2003 conflict<br />
killed millions of people,<br />
mostly from hunger and disease.<br />
Both state and rebel<br />
forces have been accused by<br />
rights groups of rape, killing<br />
civilians and other war crimes.<br />
In 2013, MONUSCO’s<br />
3,000-strong U.N. intervention<br />
brigade helped Congolese<br />
forces defeat Tutsi-led M23<br />
rebels who had seized swaths<br />
of North Kivu. U.N. sanctions<br />
experts, Kinshasa and Western<br />
governments had accused<br />
Rwanda of supporting M23.<br />
Saudi man gets life in U.S. prison for<br />
ties to Africa embassy bombings<br />
JOSEPH AX<br />
A<br />
Saudi man whom U.S.<br />
authorities described<br />
as a top Osama bin<br />
Laden deputy was sentenced<br />
to life in prison on Friday in<br />
connection with the deadly<br />
1998 bombings of U.S. embassies<br />
in Kenya and Tanzania.<br />
Khalid al-Fawwaz was<br />
sentenced by U.S. District<br />
Judge Lewis Kaplan after<br />
being convicted of four conspiracy<br />
counts in New York<br />
in February.<br />
He was not charged with<br />
helping to plan the attacks,<br />
which killed 224 and injured<br />
more than 4,000. Instead,<br />
prosecutors said he was bin<br />
Laden’s “bridge to the West”<br />
in London, disseminating<br />
the al Qaeda leader’s violent<br />
messages to media outlets<br />
and sending supplies to the<br />
group’s members in Africa.<br />
U.S. authorities also accused<br />
al-Fawwaz of running<br />
an al Qaeda training camp in<br />
Afghanistan in the 1990s and<br />
helping to establish a cell in<br />
the Kenyan capital of Nairobi<br />
that later conducted surveillance<br />
ahead of the embassy<br />
bombing there.<br />
Several victims and relatives<br />
on Friday urged Kaplan<br />
to impose a life sentence.<br />
“I worship the same God<br />
you say you do,” said Ellen<br />
Karas, an embassy worker<br />
left permanently blind by the<br />
August 7, 1998, bombing in<br />
Nairobi. “But my God is not a<br />
vengeful and angry God. My<br />
God is full of love.”<br />
Edith Bartley, whose father<br />
and brother died in the<br />
Nairobi blast, said the attacks<br />
had caused her “unbearable<br />
pain and sorrow.”<br />
“Mr. Al-Fawwaz, you are a<br />
travesty to the human race,”<br />
she said.<br />
Before the sentence<br />
was imposed, al-Fawwaz<br />
turned and addressed the<br />
victims, saying words could<br />
not express his sadness at<br />
the “tragic violence that occurred.”<br />
“I do not support violence,”<br />
he continued. “I never<br />
intended for any of my<br />
activities to contribute to it.”<br />
His statement echoed<br />
the defense his lawyers presented<br />
at trial, portraying<br />
him as a peaceful dissident<br />
who shared with bin Laden a<br />
desire for reform in their native<br />
Saudi Arabia but turned<br />
away as bin Laden grew increasingly<br />
radicalized.<br />
“My goal was reform, not<br />
rebellion,” al-Fawwaz said<br />
on Friday.<br />
But Kaplan rejected that<br />
assertion as “untruthful,”<br />
saying al-Fawwaz clearly<br />
supported bin Laden’s<br />
threats against Americans.<br />
In a statement, Manhattan<br />
U.S. Attorney Preet Bharara<br />
said, “Fawwaz conspired<br />
with a murderous regime,<br />
and the result was a horrific<br />
toll of terror and death.”<br />
Al-Fawwaz was arrested<br />
in London in 1998 and extradited<br />
in 2012 following a<br />
legal battle. He is the 10th<br />
defendant convicted in connection<br />
with the bombings,<br />
according to prosecutors.<br />
The case is U.S. v. al-Fawwaz,<br />
U.S. District Court for<br />
the Southern District of New<br />
York, No. 98-1023.
Monday 18 May 2015<br />
58 BUSINESS DAY<br />
Access Bank Rateswatch<br />
KEY MACROECONOMIC INDICATORS<br />
Indicators Current Figures Comments<br />
GDP Growth (%) 3.96% Q1 2015—a decrease of 198 basis points over Q4 2014<br />
Broad Money Supply (M2) (N’ trillion) 16.55 Decreased by 1.55% in Feb‘2015 from N16.81trillion in Jan’15<br />
Credit to Private Sector ( N’ trillion) 18.64 Increased by 2.53% in Feb’2015 from N18.18 trillion in Jan’15<br />
Currency in Circulation ( N’ trillion) 1.62 Decreased by 2.41% in Feb’2015 from N1.66 trillion in Jan 2015<br />
Inflation rate (%) (y-o-y) 8.7 Increased to 8.7% in April 2015, it was 8.5% in March 2015<br />
Monetary Policy Rate (%) 13 Raised to 13% in November 2014<br />
Interest Rate (Corridor) 13 (-/+2) Deposit rate changed to 11 & Lending to 15%<br />
External Reserves (US$ million) 29.79 May, 14 2015 figure — an increase of 0.37% from month-start<br />
Oil Price (US$/Barrel) 66.76 May. 15 2015 figure — a decrease of 1.04% from $67.46 in 1week.<br />
Oil Production mbpd (OPEC) 1.93 November 2014 figure— an increase of 0.52% from Oct 2014 figure<br />
STOCK MARKET<br />
COMMODITIES MARKET<br />
Indicators Friday Friday Change(%) Indicators 15/5/15 1-week YTD<br />
Change Change<br />
15/5/15 8/5/15<br />
(%) (%)<br />
NSE ASI 34,439.52 34,388.12 0.15<br />
Energy<br />
Crude Oil $/bbl) 66.76 (1.04)<br />
22.63<br />
Market Cap(N’tr) 11.70 11.68 0.16 Natural Gas ($/MMBtu) 3.01 9.45<br />
(0.66)<br />
Agriculture<br />
Volume (bn) 1.63 1.61 0.92 Cocoa ($/MT) 3.10 5.02 4.31<br />
Value (N’bn) 14.43 21.50 (32.90)<br />
Coffee ($/lb.) 138.15 2.71<br />
(16.09)<br />
Cotton ($/lb.) 66.45 1.22 9.22<br />
MONEY MARKET<br />
Sugar ($/lb.) 12.98<br />
(0.23) (11.70)<br />
Wheat ($/bu.) 513.25 7.77<br />
(14.49)<br />
NIBOR<br />
Metals<br />
Tenor Friday Friday<br />
Change Gold ($/t oz.) 1,217.20 2.70 1.61<br />
(%) (%) (Basis Point) Silver ($/t oz.) 17.49 6.91 8.36<br />
15/5/15 8/5/15<br />
Copper ($/lb.) 291.10 (0.12)<br />
2.57<br />
Call 13.5417 9.2917 425<br />
NIGERIAN INTERBANK TREASURY BILLS TRUE YIELDS<br />
7 Days 0.0000 0.0000 0<br />
30 Days 14.7638 13.1585 161<br />
Tenor Friday Friday<br />
Change<br />
(%) (%)<br />
60 Days 0.0000 0.0000 0<br />
15/5/15 8/5/15<br />
90 Days 15.6932 14.4175 128<br />
1 Mnth 13.12 10.59 254<br />
2 Mnths 13.25 10.88 237<br />
FOREIGN EXCHANGE MARKET<br />
3 Mnths 13.44 10.92 252<br />
Market Friday Friday<br />
1 Month 6 Mnths 14.03 12.56 146<br />
(N/$) (N/$) Rate (N/$) 9 Mnths 14.85 14.76 9<br />
15/5/15 8/5/15<br />
15/4/14 12 Mnths 14.99 14.98 1<br />
Official (N) 197.0 197.00 168.00<br />
Inter-Bank (N) 199.10 199.10 189.14 Access Bank Nigerian Gov’t Bond Index<br />
BDC (N) 0.00 0.00 0.00<br />
Parallel (N) 0.00 0.00 0.00 Indicators 15/5/15 8/5/15 Change (%)<br />
Index 2,068.54 2,057.36 0.54<br />
BOND MARKET<br />
Mkt Cap Gross (N'tr) 6.12 6.08 0.54<br />
AVERAGE YIELDS<br />
Mkt Cap Net (N'tr) 4.25 4.23 0.51<br />
YTD return (%) 5.00 4.43 0.92<br />
Tenor Friday Friday<br />
Change YTD return (%)(US $) -1.23 -1.28 0.09<br />
(%) (%) (Basis Point)<br />
15/5/15 8/5/15<br />
TREASURY BILLS (AUCTION)<br />
3-Year 13.66 13.86<br />
(20)<br />
5-Year 13.67 13.85<br />
(17)<br />
Tenor<br />
Amount<br />
(N' million)<br />
Rate (%) Date<br />
7-Year 13.63 13.79<br />
(15) 91 Day 45,177.87 10.09 06-May-2015<br />
10-Year 13.59 13.80<br />
(21) 182 Day 23,432.8 12.89 06-May-2015<br />
20-Year 16.56 16.40 16<br />
364 Day 82,000 13.40 06-May-2015<br />
Disclaimer<br />
This report is based on information obtained from various sources believed to be<br />
reliable and no representation is made that it is accurate or complete. Reasonable<br />
care has been taken in preparing this document. Access Bank Plc shall not take<br />
responsibility or liability for errors or fact or for any opinion expressed herein .This<br />
document is for information purposes and private circulation only and may not be<br />
reproduced, distributed or published by any recipient for any purpose without prior<br />
express consent of Access Bank Plc.<br />
Sources: CBN, Financial Market Dealers Association of Nigeria,<br />
NSE, Energy Information Agency, Bloomberg and Access Bank<br />
Economic Intelligence Group computation<br />
For enquiries, contact: Rotimi Peters (Team Lead, Economic Intelligence)<br />
(01) 2712123 rotimi.peters@accessbankplc.com<br />
Market Analysis and Outlook: May 15 - May 22, 2015<br />
Global Economy<br />
In China, the People’s Bank of China (PBoC)<br />
lowered its benchmark lending and deposit<br />
rates by 25 basis points to 5.10% and 2.25%<br />
respectively amid concerns over the<br />
nation's economy. The cut, which is the third<br />
in six months, follows other measures<br />
designed to spur growth in China, including<br />
tax cuts. China'sexpanded at its slowest<br />
pace in six years in thequarter at 7%,<br />
weighed down by a cooling property market.<br />
Initial indicators and industry surveys for<br />
April released over the last few weeks had<br />
signaled a further loss of momentum<br />
heading into the second quarter. In<br />
particular, Inflation remained soft, while<br />
exports and imports both decreased in April.<br />
In other news, the Eurozone economy grew<br />
by 0.4% in Q1 2015, official figures show.<br />
This is the fastest quarterly growth rate for<br />
2years. Although the latest figure was<br />
slightly below analysts’ expectations, it<br />
shows growth in the bloc has been gathering<br />
momentum slowly over the past year.<br />
Specifically, France’s economy grew at its<br />
fastest rate in nearly two years, expanding<br />
by 0.6% in Q1 and strongest since Q2 2013<br />
when the economy grew by 0.7%. On the<br />
other hand, Germany’s economy expanded<br />
by just 0.3%in the review period. This is<br />
below analysts’ estimates of 0.5% and down<br />
from 0.7% seen in Q4 2014. Germany’s<br />
growth was held back by a fall in exports. In<br />
t h e U K , l a t e s t f i g u r e s s h o w t h a t<br />
unemployment has continued to fall and the<br />
number of people in work has continued to<br />
rise. In Q1 2015, the number of people out of<br />
work fell to 1.83 million – down 35,000 from<br />
Q4 2014 and lowest for seven years. At the<br />
same time, the total number in work rose to<br />
31.1million in the period under review.<br />
Average pay for employees, excluding<br />
bonuses, rose by 2.2% in the quarter<br />
compared with a year earlier. The figures<br />
mean that regular pay is now growing at its<br />
fastest rate for nearly four years. It is also<br />
the seventh month in a row that the rate of<br />
regular pay increases has outperformed the<br />
prevailing annual rate of inflation, as<br />
measured by the consumer prices index.<br />
Domestic Economy<br />
The Nigerian economy expanded at a slower<br />
pace during the first quarter of 2015. More<br />
specifically, real GDP growth at factor cost<br />
slowed to 3.96% y-o-y during Q1 2015,<br />
down from 5.94% y-o-y in Q4 2014. The<br />
NBS highlights that the oil industry<br />
contracted by 8.15% y-o-y in Q1, mainly on<br />
account of a drop in crude oil output to 2.18<br />
million bpd from 2.24 million bpd in Q1 2014<br />
a year earlier. On a slightly more positive<br />
note, crude oil output has remained<br />
relatively stable during the last two<br />
quarters. The non-oil sector grew by 5.59%<br />
in real terms in Q1 2015 from the 8.21%<br />
recorded one year previous. In related<br />
development, Nigeria’s consumer price<br />
inflation continued its upward trend in April.<br />
The overall Consumer Price Index (CPI)<br />
increased by 0.8% m-o-m in April, which<br />
raised the year-on-year (y-o-y) rate to<br />
8.7%, up from 8.5% in March, according to<br />
new figures released by the National Bureau<br />
of Statistics (NBS). The faster pace of the<br />
Headline index is attributed to increases in<br />
m o s t C l a s s i f i c a t i o n o f I n d i v i d u a l<br />
Consumption by Purpose (COICOP)<br />
Divisions which contribute to the headline<br />
index, with the exception of slower<br />
increases in Recreation and Culture, and<br />
Communications Divisions. The food subindex<br />
(consisting of both farm produce and<br />
processed food) increased by 0.9% (m-om),<br />
which took the y-o-y increase to 9.5%.<br />
Meanwhile, the so-called core price index<br />
(excluding farm produce but including<br />
processed food) recorded inflation at 7.7%<br />
y-o-y in April, up from 7.5% y-o-y a month<br />
earlier.<br />
Stock Market<br />
Last week, there was a reverse of previous<br />
week’s dull performance. Equities closed<br />
the week on a bullish note over broadened<br />
appetite by investors on account of<br />
impressive score cards released by bluechip<br />
companies. Major movements were<br />
seen in highly capitalised banking stocks as<br />
sentiment stayed positive. The Nigerian<br />
Stock Exchange All Share Index (NSE ASI)<br />
added 0.15% to close at 34,439.52points<br />
from 34,388.12points recorded the week<br />
earlier. Similarly, market capitalization rose<br />
to N11.70trillion from N11.68trillion during<br />
the same period. Market optimism is<br />
expected to persist this week given<br />
anticipated positive financials from bluechip<br />
establishments.<br />
Money Market<br />
Last week, the Nigerian Interbank Offered<br />
Rate (NIBOR) continued its upward<br />
movement across tenors. The uptick was<br />
driven majorly by outflows of about<br />
N154billion in treasury bills and N60billion<br />
FGN Bond auction. Maturing T-bills of<br />
N81.01billion last week was unable to ease<br />
market tightness. Rates may trend<br />
southwards this week in anticipation of<br />
inflows from maturing T-bills totalling<br />
N302.5billion.<br />
Foreign Exchange Market<br />
For the fourth consecutive week, the<br />
exchange value remained flat to close at<br />
N199.1/US$. The naira exchange rate has<br />
remained unsurprisingly stable following the<br />
introduction of the 'order-based' system in<br />
February with the CBN bid/offer rate also<br />
stable at N196.00/N197.00. This week, we<br />
expect the local unit to remain range-bound.<br />
Bond Market<br />
Average bond yield moderated downwards<br />
across most maturities for the week ended<br />
May 15, 2015. The continued decline in<br />
yields was due to increased investors'<br />
appetite for government securities despite<br />
liquidity tightness. The Access Bank Bond<br />
Index rose by 0.54% to close the week at<br />
2,068.54points from 2,057.36 the previous<br />
week. Market Capitalization also climbed by<br />
N40billion, or 0.54%, to N6.12trillion. Yields<br />
may likely trend downwards this week as<br />
market participants maintain the buying<br />
pressure. A clearer direction may be seen as<br />
the CBN hold its MPC Meeting today Monday<br />
May 18, 2015 and tomorrow Tuesday May<br />
19, 2015.<br />
Commodities Market<br />
Crude oil (Bonny light) prices descended to<br />
$66.76 per barrel from $67.46 reached the<br />
week earlier. Oil prices have fallen on the<br />
back of supply from Saudi Arabia. Expected<br />
conclusions on the Iran nuclear deal may also<br />
be driving prices down. On the other hand,<br />
gold and silver prices increased to $1,217.20<br />
and $17.49 per ounce from $1,185.20 and<br />
$16.36 respectively, reached the week<br />
earlier. The yellow metal is being supported<br />
by a weakening economic outlook for the<br />
U.S., which has eroded expectations of a Fed<br />
rate hike, and consequently weighed on the<br />
dollar. This week, oil prices may stay around<br />
current levels above the $60 mark due to the<br />
net-off between constant supplies from<br />
Saudi Arabia and tensions in the Middle East.<br />
MONTHLY MACRO ECONOMIC FORECASTS<br />
Variables<br />
May’15 Jun’15<br />
Jul’15<br />
Exchange Rate<br />
(Official) (N/$) 198.00 198.50 200.00<br />
Inflation Rate (%) 8.8 8.9 8.9<br />
Crude Oil Price ` 64.14 65.20 67.15<br />
(US$/Barrel)<br />
* Revised
Monday 18 May 2015<br />
BUSINESS DAY<br />
59<br />
THOMSON REUTERS<br />
Family members of officers killed in the line of duty are escorted to seats of honor at the National Peace Officers’ Memorial Service at the<br />
U.S. Capitol in Washington May 15, 2015. REUTERS<br />
Carl Icahn invests $100 mln in<br />
ride-sharing service Lyft<br />
In an uncharacteristic<br />
move, activist investor<br />
Carl Icahn’s Icahn<br />
Enterprises LP made<br />
a $100 million investment<br />
in Lyft Inc., adding momentum<br />
to the ride-sharing<br />
company’s rapid expansion<br />
but leaving its cash pile far<br />
behind rival Uber.<br />
Icahn joins a long list of<br />
backers for the three-year<br />
old startup, including Andreessen<br />
Horowitz, New Yorkbased<br />
technology hedge-fund<br />
Coatue Management, Chinese<br />
e-commerce giant Alibaba,<br />
and hedge fund Third Point<br />
Management.<br />
Lyft, known for cars displaying<br />
a pink moustache<br />
logo, uses a smartphone app<br />
to match riders with paid<br />
drivers who use their own cars<br />
rather than livery vehicles, a<br />
service similar to one offered<br />
Portugal has received at<br />
least three bids for the<br />
struggling state-owned<br />
flag carrier TAP in its second<br />
attempt to privatise it since<br />
2012, sources said on Friday,<br />
as the government prepared<br />
to give an update on the<br />
process.<br />
With Friday’s 1600 GMT<br />
deadline for binding offers<br />
now past, Transport Secretary<br />
Sergio Monteiro and<br />
Treasury Secretary Isabel<br />
Castelo Branco will hold a<br />
news briefing at 8 p.m. (1900<br />
GMT), a spokesman at the<br />
economy ministry said.<br />
A source with knowledge<br />
of the process told Reuters<br />
Brazilian-American businessman<br />
David Neeleman<br />
had presented a bid. Neeleby<br />
Uber Technologies Inc.<br />
But Uber, with a global<br />
presence, more diverse services<br />
including limousine-like<br />
rides, a global presence, and<br />
aspirations of expanding into<br />
logistics, is a much bigger<br />
company. It carries a $40 billion<br />
valuation compared to<br />
Lyft’s $2.5 billion.<br />
Lyft backers question<br />
whether Uber’s broader mandate<br />
amounts to a valuation<br />
that is effectively 16 times<br />
greater than Uber. In many of<br />
its international markets, including<br />
China, Uber is facing<br />
tough competition from entrenched<br />
local players, while<br />
in others, such as Korea, it<br />
faces legal hurdles.<br />
Uber fans say that building<br />
a global brand ultimately will<br />
make the company a stronger<br />
player, even if it faces setbacks<br />
in some markets along the<br />
way.<br />
Technology has been a<br />
big part of Icahn’s investment<br />
focus, with bets like Apple,<br />
Nextflix and eBay, but he<br />
generally does not invest in<br />
companies as young as Lyft,<br />
which was founded in 2012.<br />
Last year, Icahn accused<br />
Andreessen Horowitz partner<br />
Marc Andreessen, who was a<br />
board member of eBay at the<br />
time, of having a conflicted<br />
role because of Andreessen’s<br />
venture investments that<br />
competed with eBay.<br />
On CNBC, Andreessen<br />
compared Icahn to a lying<br />
six-year-old. Now that he and<br />
Icahn will be co-investors in<br />
Lyft, he is making light of the<br />
past squabble.<br />
“All’s fair in love, war and<br />
ride-sharing,” Andreessen<br />
said in a statement emailed<br />
to Reuters.<br />
One of Icahn’s managing<br />
directors, Jonathan Christodoro,<br />
will join Lyft’s board,<br />
Lyft said in a statement on<br />
Friday.<br />
Brait bets on British high street<br />
with $1.2 bln New Look deal<br />
• Brait’s second major deal in a month<br />
• Enters fiercely competitive UK fashion retail market<br />
TIISETSO MOTSOENENG<br />
African investment<br />
heavyweight Brait SE<br />
will pay $1.2 billion for<br />
virtually all of budget clothes<br />
retailer New Look, giving<br />
it a substantial presence in<br />
Britain’s fiercely competitive<br />
fashion retail market.<br />
The deal, announced on<br />
Friday, puts Brait, whose top<br />
shareholder is South African<br />
retail mogul Christo Wiese,<br />
in the middle of the crowded<br />
British high street, where<br />
New Look vies with Primark,<br />
part of AB Foods, Next and<br />
H&M.<br />
New Look, owned by private<br />
equity groups Apax and<br />
Permira, as well as founder<br />
Tom Singh, has 600 stores in<br />
the UK and Ireland and trades<br />
from a further 200 across Europe,<br />
North Africa, the Middle<br />
East and Asia including China<br />
where it wants to expand.<br />
It is the second big deal<br />
in a month for Brait, one of<br />
Africa’s largest investment<br />
houses which is also buying<br />
fitness chain Virgin Active.<br />
Brait will take a 90 percent<br />
equity stake in New Look for<br />
780 million pounds ($1.23<br />
billion), giving the retailer an<br />
enterprise value of 1.9 billion<br />
pounds, which includes 1<br />
billion pounds in debt. The<br />
remaining stake will stay in<br />
the hands of the founding<br />
family and management.<br />
Brait shareholder Momentum<br />
Asset Management,<br />
which has more than 1.6<br />
billion rand funds under its<br />
custody, said it was a strategic<br />
move into the British market<br />
that should be less risky than<br />
some African ones.<br />
“It’s a lot of money Brait is<br />
paying and the UK market is<br />
highly competitive,” Wayne<br />
McCurrie, fund manager at<br />
Momentum, which, according<br />
to Thomson Reuters data,<br />
owns a stake worth just under<br />
$10 million.<br />
“But on the bright side it<br />
is not as risky as Nigeria, for<br />
example, and over time to<br />
diversify is actually a logical<br />
strategic move.”<br />
Portugal gets at least three bids in TAP airline sale -sources<br />
SERGIO GONCALVES<br />
man is the founder of U.S.<br />
airline JetBlue and CEO of<br />
Azul Brazilian Airlines.<br />
“It was a bid presented by<br />
the holding company of David<br />
Neeleman, with partners,”<br />
the source said.<br />
Another source close to<br />
the privatisation process said<br />
Brazilian-Colombian investor<br />
German Efromovich, who<br />
controls Latin America’s Avianca<br />
via his holding Synergy<br />
and who had already bid for<br />
TAP once, also made an offer.<br />
The source would not give<br />
details on whether Efromovich<br />
was bidding alone or with<br />
partners. A newsletter published<br />
by Airline Economics<br />
magazine reported earlier<br />
Efromovich was bidding, as<br />
well as U.S. fund Greybull<br />
Capital.<br />
A third source close to<br />
Portuguese investor and aristocrat<br />
Miguel Pais do Amaral,<br />
who has interests from media<br />
to mining, said Pais do Amaral<br />
had made a bid via his<br />
private holding company,<br />
Quifel.<br />
Heavily indebted TAP was<br />
hit by a 10-day pilots strike<br />
earlier this month, which the<br />
government warned could<br />
discourage bidders. But it<br />
vowed to go ahead with the<br />
sale and said it still hoped get<br />
competing bids.<br />
The government is selling<br />
a 61 percent stake in TAP,<br />
retaining a 34 percent stake<br />
that can be sold in two years.<br />
Another five percent will be<br />
offered to TAP employees.<br />
Brazilian Vice President<br />
Michel Temer said last month<br />
he had discussed the sale of<br />
TAP with Brazilian airlines,
60<br />
Monday 18 May 2015
Monday 18 May 2015<br />
NewsXtra<br />
Jonathan seeks forgiveness from<br />
Nigerians he may have offended<br />
ELIZABETH ARCHIBONG, Abuja<br />
President Goodluck<br />
Jonathan<br />
has sought forgiveness<br />
from<br />
Nigerians who<br />
he may have offended while<br />
in office.<br />
Speaking during a farewell<br />
service organised for<br />
the outgoing first family<br />
on Sunday at the Aso Villa<br />
Chapel, the president said<br />
no one is perfect and there<br />
is no way he would not have<br />
stepped on toes. He added<br />
that this would not have<br />
been deliberate.<br />
He noted that there are<br />
times when one would take<br />
a decision in the best interest<br />
of all but even friends<br />
would misunderstand the<br />
situation.<br />
MODESTUS ANAESORONYE<br />
The National Insurance<br />
Commission<br />
(NAICOM)<br />
has dissolved the<br />
board of the International<br />
Energy Insurance (IEI) following<br />
allegations against<br />
some directors of the company,<br />
among others.<br />
In its place, a threemember<br />
interim board has<br />
been appointed to oversee<br />
the affairs of the company<br />
while necessary investigation<br />
is being conducted.<br />
As part of this intervention,<br />
the chief executive<br />
officer and some key officers<br />
will proceed on leave<br />
to pave way for a thorough<br />
investigation of the affairs<br />
of the company, Rassaq<br />
OWEDE AGBAJILEKE, Abuja<br />
First Lady, Patience<br />
Jonathan, has harped<br />
on the need for women<br />
to use their positions<br />
to positively impact<br />
the society and the less privileged.<br />
She gave the challenge<br />
on Sunday in Abuja at the<br />
Miss United Nations Nigeria<br />
Pageant 2015 while congratulating<br />
Precious Chikwendu,<br />
winner of the 2014 edition<br />
of the pageant in Kingston,<br />
Jamaica.<br />
According to her, Chikwendu<br />
brought honour to<br />
Nigeria by virtue of her not<br />
only winning the crown, but<br />
the hosting right for the Nigerian<br />
version of the pageant.<br />
Represented by Peace<br />
Nnaji, the president’s wife,<br />
however, added that the<br />
beauty of a woman grows<br />
with the passing years.<br />
“So for the eight (years)<br />
that one has been there,<br />
definitely one is not perfect.<br />
We have certain done things<br />
that probably we wouldn’t<br />
have done that way, but we<br />
didn’t do things deliberately.<br />
So for those who we<br />
have offended it was not<br />
deliberate, it was circumstances<br />
of the office. So we<br />
also plead that those people<br />
should forgive, we think we<br />
have done our best.<br />
“You can do your best<br />
and your friends may misunderstand<br />
you. Today, we<br />
are talking about leaving. It<br />
is only God that knows why<br />
things go the way they do.<br />
Ordinarily May 24 would<br />
have been the last service<br />
here. But that 24th, we will<br />
all go to the National Christian<br />
Centre for the inauguration<br />
service. So for me<br />
Using her Snow White<br />
Foundation NGO, the outgoing<br />
queen, Chikwendu,<br />
said she adopted a life cycle<br />
approach of development<br />
focusing on children, families<br />
and the larger community<br />
with emphasis on the less<br />
privileged.<br />
It was gathered that contestants<br />
at the 2015 Nigerian<br />
version of the pageant were<br />
assessed on the basis of character,<br />
personality, conversational<br />
skill, beauty, fashion<br />
and intelligence.<br />
The pageant had a category<br />
for spinsters, married<br />
women, single mothers as<br />
well as teens.<br />
Winners of the teens and<br />
married women categories<br />
would be further groomed<br />
and would join Miss United<br />
Nations (Nigeria) to represent<br />
Nigeria at the main<br />
Miss United Nations Pageant<br />
holding in July in Kingston,<br />
Jamaica.<br />
and my wife, this is our last<br />
day of worship here. The<br />
congregation will continue<br />
until new government takes<br />
over”, he said.<br />
This is the last Sunday<br />
the first family will be officially<br />
worshipping at the<br />
Aso Rock Villa Chapel.<br />
Meanwhile, the vice<br />
president-elect, Yemi Osinbajo,<br />
was absent at the farewell<br />
service which would<br />
have seen the president<br />
officially handing over the<br />
chapel to him.<br />
However, speaking to<br />
newsmen after the Sunday<br />
service, the Aso Rock<br />
chaplain, Obioma Onwuzurumba,<br />
said the vice<br />
president-elect, had been<br />
duly invited but was unfortunately<br />
absent. He sent a<br />
representative in his stead.<br />
NAICOM dissolves International Energy Insurance board<br />
First lady urges women to be responsible<br />
Salami, head, corporate<br />
affairs, NAICOM, said in a<br />
statement on Sunday.<br />
The action, Salami said,<br />
is pursuant to the powers<br />
conferred on the commission<br />
by the enabling laws<br />
to intervene in the affairs of<br />
the company as a result of<br />
financial reporting failures,<br />
allegations made against<br />
some of the directors, and<br />
board squabble necessitating<br />
regulatory action in the<br />
interest of policyholders<br />
and other stakeholders of<br />
the company.<br />
Members of the interim<br />
board include Muhammad<br />
Ahmad, the former<br />
director-general of the National<br />
Pension Commission<br />
(PENCOM), who will<br />
serve as its chairman; Daisy<br />
Ekineh, a former commissioner<br />
of the Securities<br />
and Exchange Commission<br />
(SEC), and Bridget<br />
Adeyinka, a one-time acting<br />
managing director of<br />
Societe Bancaire Nigeria<br />
Ltd, now Unity Bank.<br />
The board is mandated<br />
to conduct forensic investigation<br />
into the affairs of<br />
the company and identify<br />
factors and persons<br />
responsible for the erosion<br />
of shareholders’ value.<br />
The appointment which<br />
takes immediate effect<br />
shall be for an initial period<br />
of six months, subject to<br />
renewal, if necessary.<br />
The company remains a<br />
going concern with capacity<br />
to continue to underwrite<br />
all types of general<br />
insurance business, Salami<br />
stated.<br />
Buhari respects ruleof-law,<br />
due process,<br />
says Amaechi<br />
Governor Chibuike<br />
Amaechi of Rivers<br />
said on Sunday that<br />
the president-elect, Muhammadu<br />
Buhari, had respect<br />
for rule-of-law and due process<br />
as a democrat.<br />
Amaechi disclosed this<br />
at a thanksgiving service<br />
in Port Harcourt organised<br />
by the campaign organisation<br />
of Dakuku Peterside,<br />
Rivers gubernatorial candidate<br />
of the All Progressives<br />
Congress (APC) in the justconcluded<br />
general elections.<br />
The service was to celebrate<br />
God’s faithfulness<br />
throughout the election period.<br />
He urged supporters of<br />
the APC to prepare their<br />
petitions against those that<br />
compromised the elections<br />
in the state and perpetrated<br />
different forms of malpractices.<br />
BUSINESS DAY<br />
61
Monday 18 May 2015<br />
62 BUSINESS DAY<br />
NewsXtra<br />
Emeke Anene (r), directorate head, South, Heritage Bank Limited, representing the GMD/CEO of the bank (Ifie<br />
Sekibo) and Adams Oshiomhole (l), governor, Edo State, presenting dummy cheques to the three male finalists -<br />
Korio Alex Olotptip from Kenya (m); Leul Gabriel Salassie, an Ethiopian (2nd r) and Amos Mitel from Kenya at the 3rd<br />
Okpekpe Road Race, which was held at the weekend. Heritage Bank sponsored the race as official banker.<br />
Transition in e-commerce gains traction<br />
as operators expand market scope<br />
BEN UZOR<br />
The electronic<br />
commerce industry<br />
is undergoing<br />
a process<br />
of transition,<br />
which has seen many operators<br />
move from just focusing<br />
on Business-to-Consumer<br />
(B2C) to enabling<br />
Business-to-Business (B2B)<br />
services, BusinessDay investigations<br />
show.<br />
This development is<br />
driven by the need to deepen<br />
profit margins in a highly<br />
competitive market. Many<br />
operators are aggressively<br />
embracing an innovative<br />
business model predicated<br />
on the development of strategic<br />
mechanisms on their<br />
platforms to accommodate<br />
potential sellers and buyers<br />
of products. The implication<br />
of this innovative strategy is<br />
that e-retailers are no longer<br />
just in the business of selling,<br />
but now grant access to<br />
other businesses to trade on<br />
their platforms.<br />
Omobola Johnson, minister<br />
of communications<br />
technology, had said that<br />
the country’s e-commerce<br />
JOSHUA BASSEY<br />
The organised labour<br />
under the aegis<br />
of Trade Union<br />
Congress of Nigeria<br />
(TUC) says that the incoming<br />
government of Muhammadu<br />
Buhari would need to<br />
start with the declaration of<br />
a state of emergency in the<br />
power sector to show its<br />
determination to tackle the<br />
market has a potential value<br />
of $10 billion with about<br />
300,000 online orders currently<br />
being made daily.<br />
Market observers are of<br />
the view that e-retailers are<br />
keen on further expanding<br />
the scope of the market<br />
beyond its current potential<br />
by targeting the nation’s<br />
17.6 million Small Medium<br />
Enterprises (SMEs).<br />
With the online marketplace,<br />
e-retailers are fostering<br />
entrepreneurship by<br />
positioning micro-SMEs<br />
before a large homogeneous<br />
audience to generate<br />
better sales.<br />
“We realised that for our<br />
services to be really valuable<br />
to society, we had to<br />
build a platform for anyone,<br />
not just Konga, to sell and<br />
prosper. Konga had to build<br />
a platform that allowed every<br />
entrepreneur and business<br />
in Nigeria and beyond,<br />
equal opportunity to reach<br />
millions of customers”, said<br />
Gabriel Gab-Umoden, head<br />
of marketing, Konga.com.<br />
Konga launched its marketplace<br />
called Konga Mall<br />
last year and within the first<br />
three months, generated a<br />
sales revenue of over N600<br />
protracted power failure in<br />
Africa’s biggest economy.<br />
The congress’ concern<br />
comes as electricity supply<br />
across Nigeria continues<br />
to dwindle leaving the nation<br />
heavily dependent on<br />
petrol and diesel to power<br />
the economy despite the<br />
privatisation of the sector<br />
over two years ago in what<br />
was said would bring about<br />
some improvement from<br />
the abysmal performance<br />
million, according to Sim<br />
Shagaya, the company’s<br />
chief executive officer, in an<br />
interview with BusinessDay<br />
recently. Konga mall essentially<br />
acts as an online<br />
marketplace for sellers and<br />
buyers alike to compete<br />
against each other for a<br />
variety of items.<br />
According to Phillips<br />
Consulting, the local online<br />
shopping sector grew<br />
from N49.9 billion to N62.4<br />
billion between 2010 and<br />
2011, and from N62.4 billion<br />
to N78 billion between 2011<br />
and 2012, representing a 25<br />
percent increase in each<br />
period.<br />
Local e-retailers are already<br />
engaged in a heated<br />
battle for online shoppers,<br />
with many of them providing<br />
attractive pricing,<br />
easier delivery options, as<br />
well as aggressive marketing<br />
techniques to beat the<br />
competition.<br />
Seeking greener pastures,<br />
many e-retailers are<br />
plugging into the global<br />
trend of online marketplace<br />
which really entails<br />
the deliberate transition<br />
from Business-to-Consumer<br />
(B2C) to Business-to-<br />
Business (B2B) services.<br />
“In the next few years,<br />
online retail marketplace<br />
will be a major success story<br />
that will contribute largely<br />
to the nation’s Gross Domestic<br />
Product”, Jeremy<br />
Doutte, managing director,<br />
Jumia.com, said in a recent<br />
report accessed by BusinessDay.<br />
The company foresees<br />
e-commerce contributing<br />
up to 20 percent to Nigeria’s<br />
GDP, riding on the back<br />
of rising internet access,<br />
budding middle-class and<br />
a proliferation of mobile<br />
devices. Nigeria had about<br />
74 million mobile internet<br />
users as at November 2014,<br />
says the Nigerian Communications<br />
Commission<br />
(NCC).<br />
On the global scene, e-<br />
retailers such as Amazon,<br />
eBay, Alibaba including online<br />
classifieds like Online<br />
Exchange have all created<br />
platforms that enable people<br />
to buy and sell. Recent<br />
data on marketplaces of<br />
some giant retailers like e-<br />
Bay and Amazon show that<br />
they have over 116 to 117<br />
million active users on their<br />
marketplace platforms.<br />
in the days when the sector<br />
was 100 percent owned and<br />
run by government.<br />
Bobboi Kaigama, president<br />
of TUC at the National<br />
Executive Council (NEC)<br />
meeting held in Lagos,<br />
weekend, said rather than<br />
improve, supply across the<br />
country had “gone from bad<br />
to worse”.<br />
“Electricity has reduced<br />
from 4,000 to 800 megawatts.<br />
We believe that incoming<br />
administration<br />
should declare a state of<br />
emerge on power sector,’’<br />
said Kaigama.<br />
He also noted that the<br />
incoming administration<br />
should be prepared to increase<br />
the salaries and allowances<br />
of workers from<br />
the current N18, 000 because<br />
of rate of inflation and<br />
increase in exchange rate.<br />
According to Kaigama,<br />
the minimum wage of<br />
FG’s distributable revenues fall to lowest in 5 years<br />
Federal Government’s<br />
revenues distributable<br />
to the three tiers<br />
of government hit<br />
a five-year low in April, the<br />
accountant general, Jonah<br />
Otunla, said weekend, due<br />
to frequent shutdowns of<br />
oil trunklines and export<br />
terminal pipelines.<br />
The total revenue distributable<br />
in April including VAT<br />
of N75.16 billion is N388.339<br />
billion ($1.95 billion).<br />
Gross revenues of<br />
N282.062 billion received<br />
for the month was lower<br />
than the N315.044 billion received<br />
in March by N32.982<br />
billion.<br />
However, an increase in<br />
the average price of crude<br />
oil from $55.34 in February<br />
to $56.03 in March brought<br />
about a $21.67 million gain<br />
in revenue. Non-oil revenues<br />
performed better in<br />
April than in March.<br />
The distributable statutory<br />
revenue for the month is<br />
N282.062 billion. The sum of<br />
N6.33 billion was refunded<br />
by the state owned energy<br />
firm, NNPC, to the Federal<br />
Government. Also, there is<br />
an exchange gain of N24.786<br />
billion which is proposed for<br />
distribution. (Reuters)<br />
Boko Haram loses 10 more camps in Sambisa Forest<br />
The Defence Headquarters<br />
on Sunday<br />
said an unconfirmed<br />
number of<br />
Boko Haram members fell<br />
to the superior power of the<br />
military in the ongoing offensive<br />
in Sambisa Forest.<br />
The military authority<br />
also said its forces on<br />
Saturday captured and<br />
destroyed 10 additional<br />
camps used by the terrorists.<br />
This is contained in a<br />
statement issued by the<br />
director of defence information,<br />
Maj-.Gen. Chris<br />
Olukolade, on Sunday in<br />
Abuja.<br />
Olukolade said the<br />
`Dure’ camp which was<br />
one of the most prominent<br />
camps in the forest witnessed<br />
the fiercest battle as<br />
workers “which is less than<br />
90 dollars can no longer<br />
meet the needs of many<br />
families.”<br />
The labour leader said<br />
it was sad that presently<br />
some state governments<br />
had yet to pay the N18,000<br />
minimum wage while some<br />
are owing workers.<br />
“Nigerian workers are<br />
wealth creators so we demand<br />
a fair deal,’’ he said.<br />
On petroleum, Kaigama<br />
troops descended heavily<br />
on it before it finally fell.<br />
He said four of the<br />
camps were located in a<br />
place called `Iza’ within the<br />
forest, while three others<br />
were noted to be recently<br />
established by the terrorists<br />
before the assault began.<br />
“One soldier died from<br />
one of the land mine encountered<br />
in the operation,<br />
while two others were<br />
wounded.<br />
“The terrorists lost a<br />
number of vehicles mounted<br />
with anti-aircraft guns as<br />
well as armoured vehicles.<br />
“Some of the terrorists<br />
who escaped from the<br />
camps died as they ran into<br />
troops’ ambush in some<br />
escape routes from the forest,’’<br />
he said.<br />
Rosabon partners Mutual Benefits Insurance<br />
Rosabon Financial<br />
Services, Nigeria’s<br />
leading financial<br />
intermediary and<br />
equipment leasing firm, is<br />
now been insured by foremost<br />
insurance company,<br />
Mutual Benefit.<br />
This partnership will not<br />
only see Mutual Benefit<br />
providing comprehensive<br />
insurance for some of Rosabon’s<br />
investments but also<br />
to further give customers<br />
assurance that Rosabon is<br />
here to stay and ready to<br />
serve.<br />
“Customers can now<br />
enjoy the benefits that this<br />
partnership adds to some<br />
of our products. They can<br />
be rest assured that in the<br />
TUC urges Buhari to start with state of emergency in power sector<br />
face of unforeseen circumstances,<br />
their assets are safe<br />
and secure. This is in a bid<br />
to erase any doubts that<br />
individuals or organisations<br />
may have in placing<br />
their funds with Rosabon”,<br />
says Chidimma Onyeokoro,<br />
group head of strategy and<br />
marketing.<br />
The award-winning<br />
company is licensed by<br />
the Central Bank of Nigeria<br />
(CBN) and offers numerous<br />
financial packages under its<br />
credit, lease and treasury<br />
departments.<br />
Forming this synergy<br />
with Mutual Benefit is yet<br />
another statement of Rosabon’s<br />
constant obsession<br />
with customer satisfaction.<br />
said that the Federal Government<br />
should address<br />
the controversies with the<br />
marketers to resolve the<br />
demand and supply deficit<br />
of the continued scarcity of<br />
petroleum products.<br />
He said that there was<br />
the need to take a concrete<br />
step on local refining to stop<br />
the issue of importation of<br />
petroleum products and<br />
payment of subsidy.
Monday 18 May 2015<br />
AIB to release reports of four air crashes<br />
SADE WILLIAMS<br />
There are strong indications<br />
that the<br />
Accident Investigation<br />
Bureau<br />
(AIB) may at any<br />
moment from now make full<br />
public disclosure of at least<br />
four air crashes reports that<br />
had occurred in the country<br />
in recent time.<br />
Information gathered<br />
from a source close to the<br />
Ministry of Aviation on Sunday<br />
revealed that the impending<br />
reports were those<br />
that occurred between 2006<br />
and 2010.<br />
The source, who did not<br />
want to be named because<br />
he was not authorised to<br />
speak on the issue, confided<br />
in BusinessDay correspondent<br />
that among the reports<br />
that would be released to the<br />
public in the next few days<br />
by the bureau, is that of the<br />
Odengene Air Shuttle (OAS)<br />
Helicopters crash in Warri on<br />
November 10, 2006.<br />
Also, the Bristow Helicopter<br />
crash of August 3, 2007<br />
would be released by the<br />
agency, while the accident<br />
involving Wings Aviation<br />
JOSHUA BASSEY<br />
aircraft of March 15, 2008<br />
would also be released to<br />
the public. The other report<br />
that is expected to be made<br />
public was the one involving<br />
Aero Contractors on August<br />
21, 2010. However, AIB had,<br />
at different times, released<br />
interim reports of some of the<br />
accidents, but the final impending<br />
reports would be the<br />
last that would be released on<br />
the accidents by the bureau.<br />
The source told our correspondent<br />
that Osita Chidoka,<br />
the minister of aviation,<br />
wanted the reports published<br />
before the May 29,<br />
2015 handover date.<br />
The source explained that<br />
with the release, some of the<br />
report of the crashes, which<br />
had claimed hundreds of<br />
lives in recent time, would be<br />
in the public domain, while<br />
their causes and probable<br />
prevention would be worked<br />
upon by the Nigerian Civil<br />
Aviation Authority (NCAA)<br />
and operating carriers in the<br />
sector.<br />
Tunji Oketunbi, the<br />
spokesman for AIB, in a telephone<br />
interview with our<br />
correspondent, confirmed<br />
that the agency was planning<br />
to release some accidents<br />
reports, but declined to speak<br />
further. He said: “It is true that<br />
we are planning to release<br />
some accident reports, but<br />
we are still finalising the arrangements.<br />
This is a continuous<br />
exercise in AIB. As<br />
soon as reports are ready, we<br />
will release in the interest of<br />
the flying public.”<br />
It would be recalled that<br />
the OAS Helicopters carrying<br />
four people crashed on<br />
November 10, 2006 on the<br />
outskirts of Warri, Delta State,<br />
killing one person while others<br />
were seriously injured.<br />
Military officials on the<br />
scene had said that the owner<br />
of OAS was on board when<br />
the helicopter went down but<br />
the names of the passengers<br />
were not released. Officials<br />
said, however, that two of the<br />
passengers were foreigners.<br />
On the Wings Aviation,<br />
the aircraft, a Beechcraft<br />
1900D with registration<br />
marks 5N-JAH was declared<br />
missing for over six months<br />
before it was found on August<br />
30, 2007 by hunters at<br />
a village in Obanlinku Local<br />
Government Area of Cross<br />
River State.<br />
...union suspends picketing, insists on probe of management<br />
The Federal Ministry<br />
of Labour and<br />
Productivity has<br />
intervened in the<br />
protracted crisis between<br />
the management of the<br />
National Identity Management<br />
Commission (NIMC)<br />
and workers under the aegis<br />
of Association of Senior<br />
Civil Servants of Nigeria<br />
(ASCSN).<br />
The ASCSN had been<br />
picketing NIMC offices all<br />
over the country in protest<br />
against alleged plan by<br />
the management to sack<br />
1,000 workers, just as it insisted<br />
at the weekend that<br />
the out-going administration<br />
of President Goodluck<br />
Jonathan or incoming Muhammadu<br />
Buhari’s should<br />
probe into how funds released<br />
to NIMC to produce<br />
national identity cards for<br />
Nigerians had been spent.<br />
Chris Onyemenam, the<br />
director-general of NIMC,<br />
has, however, denied allegation<br />
of embezzlement of<br />
N30 billion leveled against<br />
his management and plans<br />
to sack 1,000 workers, describing<br />
them as “false and<br />
misrepresentation of facts”.<br />
At a tripartite meeting in<br />
Abuja on Friday attended by<br />
officials of the ministry, the<br />
leadership of ASCSN, and<br />
the NIMC management, all<br />
NewsXtra<br />
L-R: Akeem Adesina, divisional head, operation and technology; Waheed Olagunju,<br />
executive director, small and medium enterprises; Mohammed Alkali, executive director,<br />
large scale enterprise, and Rasheed Olaoluwa, MD/CEO, all of Bank of Industry (BoI), during<br />
the bank’s one-day interactive session on various achievements of the bank in Lagos at<br />
the weekend.<br />
Pic by Pius Okeosisi<br />
Ministry wades into NIMC, workers’ crisis<br />
parties agreed to maintain<br />
status quo ante and abide<br />
by the directive of the ministry<br />
contained in its letter<br />
Ref. No/ML.HB/8242/1/20<br />
of February 18, 2015 to the<br />
commission ordering it<br />
to put on hold any plan to<br />
sack pending the outcome<br />
of the reconciliation process<br />
started by the ministry<br />
following a trade dispute<br />
declared by the ASCSN. The<br />
meeting came on the heels<br />
of trade union actions embarked<br />
upon by the ASCSN<br />
throughout last week during<br />
which activities in all<br />
the offices of NIMC in the 36<br />
states and Abuja were paralysed<br />
by ASCSN members<br />
who picketed them.<br />
Abia is fertile for investment<br />
CHARLES AJUNWA<br />
As the process of<br />
deepening democracy<br />
continues to<br />
take root in Abia<br />
State and the state becoming<br />
one of the safest and<br />
most secured in the country,<br />
there is no gainsaying the<br />
fact that Abia is more than<br />
fertile for increased investments.<br />
Huge investment opportunities<br />
exist in Abia.<br />
There are investment opportunities<br />
in oil and gas, agriculture,<br />
mineral resources,<br />
tourism, real estate and<br />
education.<br />
Mineral resources<br />
abound in commercial<br />
quantities in the state, but<br />
yet untapped. They include<br />
kaolin, galena, granite, gypsum,<br />
tar sand, phosphate<br />
and black marble, copper<br />
and gold.<br />
Tourism and hospitality<br />
industry remains a fertile<br />
ground for investors with<br />
the increasing mobile population<br />
of the state.<br />
Also huge investment<br />
opportunities exist in real<br />
estate, for middle and high<br />
scale housing developments,<br />
especially in the<br />
urban areas of Umuahia,<br />
Aba and Ohafia.<br />
In the area of agriculture,<br />
Abia has fertile land and<br />
the area of comparative<br />
advantage for foreign and<br />
local investment is in the<br />
production of cassava, while<br />
opportunities abound in<br />
cocoa processing and beverages,<br />
rice milling and fruit<br />
canning.<br />
With improved energy<br />
expected from two new<br />
power stations in Aba, the<br />
NIPP at Alaoji and a private<br />
power station promoted by<br />
Geometric Power Limited<br />
(GPL) at Osisioma, Aba,<br />
Abia State, the state is now<br />
ready to attract more investments.<br />
His Excellency, Governor<br />
Theodore Orji at the<br />
Canada-Nigeria investment<br />
conference held recently in<br />
Toronto encouraged investors<br />
to come over to the state<br />
to invest, as the doors of the<br />
state are open for them and<br />
other foreign investors.<br />
Orji said: “At the meeting,<br />
we told them different areas<br />
of interest, where they could<br />
invest in, such as oil and<br />
gas, environmental control,<br />
mining, agriculture and<br />
industry. After the meeting<br />
I still held another meeting<br />
to meet the investors, and I<br />
am sure they will come over<br />
soon”.<br />
The prevailing peace in<br />
Abia State, especially in the<br />
Aba area, its commercial<br />
hub, is catching the attention<br />
of foreign countries that<br />
are interested in investing in<br />
the state.<br />
Gov. Theodore Orji<br />
Abia State in February<br />
2013 played host to three<br />
envoys, namely Jeffrey<br />
Howkins, the United States’<br />
consular-general in Nigeria;<br />
Boon Intiratana, the commercial<br />
councilor of the<br />
Royal Thai Embassy and<br />
Hoang Ngoc Ho, Vietnamese<br />
ambassador to Nigeria, a<br />
feat that is unprecedented in<br />
the history of the state.<br />
While the Kingdom of<br />
Thailand is interested in<br />
partnering the state in agriculture,<br />
tourism and agroprocessing,<br />
Vietnam proposed<br />
trade cooperation in<br />
agriculture, manufacturing,<br />
construction, pharmaceuticals,<br />
textile and services.<br />
Abia, apart from having<br />
a large concentration of micro,<br />
small and medium entrepreneurs,<br />
also has great<br />
potential in agriculture, as<br />
rice, maize, cassava, rubber<br />
and cashew are cultivated in<br />
commercial quantity.<br />
Governor Orji, while<br />
hosting Hawkins, urged the<br />
United States’ government<br />
to explore opportunities<br />
for business and other collaborations<br />
with the state.<br />
The governor expects the<br />
United States to find Abia a<br />
veritable ground for direct<br />
investment in agriculture,<br />
education, science and<br />
technology, among others.<br />
According to him, USA<br />
remains an important partner<br />
in trade and education<br />
with Nigeria as well as a<br />
model of democracy.<br />
It is agreed everywhere<br />
that economic development<br />
cannot thrive in an atmosphere<br />
of terror. For this<br />
reason, the return of peace<br />
in Abia State, especially Aba,<br />
remains one of the biggest<br />
achievements of the Governor<br />
Orji-led administration.<br />
This great feat to restore<br />
peace and engender economic<br />
development has<br />
been applauded by individuals<br />
and groups within<br />
and outside the country.<br />
Labaran Maku, former<br />
minister of information,<br />
during his ‘Good Governance<br />
Tour’ of the state<br />
acknowledged that the relative<br />
peace in the state has<br />
brought back hope, not only<br />
to investors, but also to all<br />
BUSINESS DAY<br />
63<br />
people of the state.<br />
For instance, the Nigerian<br />
National Petroleum<br />
Corporation (NNPC) depot<br />
at Osisioma, Aba, which<br />
was shut down as a result<br />
of pipeline vandalism, has<br />
been rehabilitated and it is<br />
now running.<br />
The closure of the facility<br />
about eight years ago did not<br />
only bring untold hardship<br />
to so many families, but also<br />
caused the death of some,<br />
who couldn’t bear the difficulty<br />
and hunger.<br />
Consequently, the decision<br />
of the present administration<br />
in the state to invest<br />
in security was to provide<br />
a conducive environment<br />
for businesses to thrive and<br />
subsequently create job<br />
opportunities for the unemployed.<br />
And today, millions of<br />
jobs have come on stream,<br />
as marketers are now lifting<br />
fuel from the depot and<br />
factories in Aba that closed<br />
down as a result of fuel are<br />
also back.<br />
To safeguard the pipelines,<br />
the state government<br />
engaged soldiers and youths<br />
of pipeline host communities.<br />
This partnership is<br />
working.<br />
The pipelines are now<br />
safe, enabling NNPC to<br />
pump products regularly to<br />
the depot.<br />
The Federal Government<br />
repaired the pipelines<br />
while the state government<br />
is working hard to ensure<br />
security with community<br />
leaders.<br />
The period between 2008<br />
and 2010 was indeed very<br />
trying for the Federal Government<br />
and particularly<br />
the people of Abia State and<br />
especially residents of Aba,<br />
following the spate of kidnapping<br />
and armed robbery<br />
in the area. During that period,<br />
stories of kidnapping<br />
and band robbery were<br />
common across the state.<br />
Even little children of<br />
nursery and primary school<br />
ages were not spared by<br />
the kidnappers, who made<br />
major Abia communities<br />
unsafe. This situation made<br />
the state to be regarded as<br />
a haven for bandits and<br />
criminal gangs.<br />
Apparently tired of the<br />
scenario and in an attempt<br />
to ensure that total anarchy<br />
was not allowed to take over<br />
when there is a democratically<br />
elected government,<br />
Governor Orji approached<br />
President Goodluck Jonathan,<br />
who approved the<br />
deployment of soldiers in<br />
September 2010.<br />
And now, peace has returned<br />
in Abia and the city<br />
of Aba has been adjudged<br />
as one of the safest in the<br />
country.<br />
Ajunwa is the chief press<br />
secretary to Abia State governor.
BUSINESS DAY<br />
THE WEALTH<br />
OF NATIONS<br />
Economy, finance, banking,<br />
policy, world economics<br />
OBADIAH MAILAFIA<br />
Mailafia is an economist with a<br />
DPhil from Oxford. He has also<br />
served as deputy Governor of<br />
the Central Bank of Nigeria.<br />
The great Swiss<br />
historian Jacob<br />
Bruchkhardt, in<br />
his eponymous<br />
work, The Civilisation<br />
of the Renaissance<br />
in Italy, famously<br />
described the state as “a<br />
work of art”. Bruchkhardt<br />
sought to understand the<br />
rise of the modern territorial<br />
state in the Italian<br />
Peninsula during the Renaissance.<br />
His particular<br />
interest was in city-states<br />
such as Florence, Venice,<br />
Sicily and others. He<br />
reached the fascinating<br />
conclusion that the citystate<br />
of the Renaissance<br />
could best be depicted as<br />
a work of art. As a connoisseur<br />
of the arts myself, I<br />
found this enigmatic depiction<br />
of the state both elegant<br />
and fascinating. Michelangelo<br />
spent several<br />
years painting the Sistine<br />
This year’s general<br />
election in the UK,<br />
held on May 7, will<br />
be remembered<br />
for its momentousness.<br />
In many ways it defied<br />
expectations and predictions,<br />
and has set Britain<br />
on an irreversible constitutional<br />
course. For a<br />
start, British voters turned<br />
the opinion polls on their<br />
heads and confounded the<br />
pollsters and the pundits.<br />
For months and up till the<br />
eve of the election, all the<br />
opinion polls said Labour<br />
and the Conservatives<br />
were neck-and-neck. They<br />
turned out to be wrong.<br />
The Tories ended up with<br />
2 million votes and almost<br />
100 more parliamentary<br />
seats than Labour. The<br />
Scottish National Party<br />
(SNP) also virtually annihilated<br />
Labour in Scotland,<br />
while the Liberal<br />
Democrats (Lib-Dem) was<br />
reduced to a rump. These<br />
are seismic changes, and<br />
have implications for the<br />
UK and lessons for Nigeria.<br />
I want to explore them<br />
in this piece, but, first, a<br />
The forgotten task of nation building<br />
Chapel in the Vatican. It<br />
was a task that demanded<br />
total concentration, effort,<br />
inspiration and, of<br />
course, high ability. When<br />
he completed that work he<br />
earned his place among<br />
the immortals. I am also<br />
reminded of the immortal<br />
works of the other great<br />
renaissance artists – Leonardo<br />
da Vinci, Raphael<br />
and others. Great works<br />
of art speak to us not only<br />
of beauty but also of truth,<br />
purity and immortality.<br />
When we envision the<br />
state as a work of art we<br />
understand it as an entity<br />
that is built by inspired<br />
statesmen. It requires<br />
time, patience, inspiration,<br />
ability and sheer nobility<br />
of spirit. To build a great<br />
state is to become an artist<br />
of the human spirit. Just<br />
as a great work of art presupposes<br />
a great artist, a<br />
great nation-state similarly<br />
presupposes a great statesman<br />
and stateswoman.<br />
In our day and age great<br />
statesmen and women<br />
are in short supply. It’s<br />
not only an African problem;<br />
it is a worldwide<br />
phenomenon. The British<br />
people who have lived<br />
together for centuries as<br />
Scots, Welsh, Irish and<br />
English narrowly missed<br />
breaking up their union<br />
in a recent referendum<br />
in Scotland. We have not<br />
seen the end of the matter<br />
refresher on the British<br />
electoral system.<br />
As many know, the UK<br />
operates a parliamentary<br />
rather than a presidential<br />
system. Thus, unlike the<br />
US president, the British<br />
prime minister is not directly<br />
elected by the people.<br />
Instead, UK voters<br />
elect individual MPs in<br />
650 constituencies across<br />
country. In truth, however,<br />
when voters elect a constituency<br />
MP they are by<br />
proxy electing the prime<br />
minister, because the party<br />
leader whose party has<br />
the required number of<br />
MPs becomes the prime<br />
minister. The winning<br />
line or overall majority is<br />
326 seats. Now, if a party<br />
has the largest number<br />
of seats than each of the<br />
other parties but does not<br />
have the overall majority,<br />
it can’t govern, except in<br />
one of two circumstances.<br />
First, it can try to run a minority<br />
government in the<br />
hope that the other parties<br />
would support some of its<br />
programmes and not collude<br />
to bring it down. But<br />
NEWS YOU CAN TRUST I MONDAY 18 MAY 2015<br />
yet. The giants that straddled<br />
the political stage in<br />
Britain, from Elizabeth I to<br />
Gladstone, Clement Attlee,<br />
Churchill, Macmillan and<br />
Margaret Thatcher have<br />
been replaced by little<br />
men who have no vision<br />
of the greatness of British<br />
civilisation and of its<br />
place in the world. Beyond<br />
Baroness Thatcher, British<br />
politicians have largely<br />
forgotten the task of nation<br />
building.<br />
The Canadians have<br />
been more successful at<br />
it. For decades, it was not<br />
a question of if but when<br />
Quebec would break from<br />
the Canadian federation.<br />
It took statesmen such<br />
as Pierre Trudeau to give<br />
Canada a sense of renewed<br />
purpose and destiny.<br />
Trudeau was a brilliant<br />
scion of illustrious Quebecois<br />
family. He was perfectly<br />
bilingual in French<br />
and English. After studying<br />
Law and Political Science<br />
in Quebec he went across<br />
the Atlantic to the London<br />
School of Economics for<br />
graduate work. He also<br />
seized the opportunity to<br />
travel around Europe and<br />
Asia. His heart and mind<br />
was enlarged by his experiences.<br />
He was determined<br />
to rebuild Canada as a nation<br />
that would be at peace<br />
with itself and the world.<br />
And I think he succeeded<br />
tremendously.<br />
Nations do not emerge<br />
out of the nebulous ether.<br />
Nations, as the historian<br />
Hugh Trevor-Roper (Lord<br />
Dacre) tells us, are “inventions”<br />
– constructed<br />
with the vision, determination<br />
and dexterity of<br />
great artists. Consider the<br />
case of Tanzania, a country<br />
replete with ethnic<br />
and religious divisions.<br />
Julius Kambarage Nyerere<br />
gave Tanzanians a sense<br />
of collective nationhood<br />
by making Kiswahili a national<br />
language. He also<br />
educated a whole generation<br />
of Tanzanians to feel<br />
that they are one people<br />
with one destiny. He put<br />
emphasis on literacy and<br />
education, patriotism and<br />
pan-Africanism. Today,<br />
Tanzanians are a much<br />
more united people than<br />
Kenyans and Ugandans.<br />
Nyerere will go down<br />
in history as one of the<br />
greatest statesmen to have<br />
come out of our benighted<br />
continent.<br />
Much ink has been<br />
spilled in giving gratuitous<br />
advice to President-elect<br />
Muhammadu Buhari. I<br />
myself have been one of<br />
the culprits. Beyond and<br />
above all the nostrums<br />
that have been on offer,<br />
almost nothing has been<br />
said about nation building.<br />
In our day and age, countries<br />
rise and fall by virtue<br />
of economic management<br />
this won’t produce a stable<br />
government. Alternatively,<br />
and this is a better option,<br />
it can form a coalition with<br />
another party. That’s what<br />
happened in 2010 when<br />
the Conservative party<br />
won 302 seats, short of<br />
the overall majority, but<br />
more than Labour’s 256.<br />
The Tories then entered<br />
into coalition with the Lib-<br />
Dem, which had 56 seats.<br />
This gave the coalition government<br />
a majority of 76<br />
seats, enough for them to<br />
govern for five years. They<br />
did successfully until this<br />
year’s election put them<br />
asunder!<br />
Indeed, what happened<br />
in the May 7 general election<br />
was nothing but a<br />
political earthquake. It<br />
left the fates of the political<br />
parties shattered and<br />
destroyed the fortunes of<br />
key politicians. Let’s start<br />
with the parties. The Conservative<br />
party increased<br />
its seats from 302 in 2010<br />
to 313 this year to form<br />
the next government, with<br />
a majority of 12 seats. Of<br />
course, that’s a slim majority,<br />
but it’s enough to govern<br />
assuming all the Tory<br />
MPs support their party<br />
at all times, which is a tall<br />
order. As for Labour, their<br />
seats dropped nationally<br />
from 256 in 2010 to 235<br />
this year. Labour lost seats<br />
across the country, but it<br />
was in Scotland that the<br />
real wipe-out took place:<br />
from 41 Scottish MPs in<br />
2010, Labour now has just<br />
1! The Lib-Dem suffered a<br />
terrible blow too: they had<br />
56 seats in 2010, but now<br />
have just 8; they also lost<br />
10 of their 11 MPs from<br />
Scotland. The biggest beneficiary<br />
of last week’s election<br />
rout, however, was<br />
the SNP. They had just 6<br />
Westminster MPs in 2010,<br />
but after almost wiping<br />
out the other parties from<br />
Scotland on May 7, they<br />
now have 56 of Scotland’s<br />
59 MPs, leaving only 1 MP<br />
each for Labour, the Tories<br />
and the Lib-Dem.<br />
But if you think the<br />
election was “cruel, merciless<br />
and crushing” for<br />
the losing parties, as Nick<br />
Clegg, the former Lib-Dem<br />
Continues on page 56<br />
Britain embraces federalism after an election defined by nationalism<br />
and prosperity that goes<br />
with it. I am the first to<br />
know about the primacy<br />
of economic policy. But<br />
beyond that, we can never<br />
even begin to know what<br />
to do about the economy<br />
until we forge that fellowfeeling<br />
that makes us feel<br />
we are one people with<br />
one collective destiny.<br />
That is the task of nation<br />
building.<br />
I believe that the traumas<br />
the Nigerian people<br />
have endured in the last<br />
two decades are partly<br />
reflective of the crisis of<br />
nationhood. There was a<br />
time when Nigerians felt<br />
they belonged together.<br />
Something cracked along<br />
the way. We have become<br />
a fractious and divided<br />
people – deeply suspicious<br />
of one another. The dubious<br />
federal structure that<br />
the British left us, in which<br />
the North overwhelmed<br />
the other federating units,<br />
was bound to exacerbate<br />
ethnic suspicions. The<br />
military coups deepened<br />
those suspicions as did<br />
the gruesome civil war. The<br />
long years of military tyranny<br />
did nothing to unite<br />
our people. The military,<br />
which had been one of<br />
the unifying institutions<br />
across the country, became<br />
a vehicle of disunity.<br />
The collapse of the civil<br />
service also did great harm<br />
to nation building. Although<br />
nobody ever owns<br />
up to the fact, it is a truism<br />
that there is a subliminal<br />
feeling among the dominant<br />
ethnic groups that an<br />
Igbo man could never be<br />
trusted with the High Magistracy<br />
of our republic. The<br />
nearest person that came<br />
to it in 1999 was Emeka<br />
Anyaoku, former Commonwealth<br />
Secretary-<br />
General. Unfortunately,<br />
he himself never wanted<br />
it. As a consequence, many<br />
among the remnants of<br />
Ndigbo have retreated to<br />
the dubious cocoon of<br />
Biafra. Oduduwa Republic<br />
has been a project that has<br />
been long in the making,<br />
with its flag, constitution<br />
and anthem. As for Arewa,<br />
their Usmaniyya Caliphate<br />
project has been hatched<br />
with the sword and with<br />
blood – much of it against<br />
the hapless people of the<br />
Middle Belt.<br />
I was once asked by<br />
a distinguished French<br />
intellectual whether Nigeria<br />
is a country at all.<br />
My instinctive reaction<br />
was annoyance. But then,<br />
when I thought deeply<br />
about it, I realised it was a<br />
very legitimate question. I<br />
studied in France and have<br />
drunk deep from the fountain<br />
of French culture and<br />
civilisation. The concepts<br />
of state and nation are<br />
leader put it, consider the<br />
decapitations of key politicians.<br />
As the Financial<br />
Times put it, it was “the<br />
most dramatic defenestration<br />
of UK political leaders<br />
in memory”. Labour lost its<br />
shadow chancellor, a truly<br />
big beast in the party, Ed<br />
Balls. The party’s shadow<br />
foreign secretary, Douglas<br />
Alexander, also lost<br />
his seat – wait for it – to<br />
a 20-year-old final year<br />
politics student at Glasgow<br />
University, Mhairi<br />
Black, who is believed to<br />
be the youngest MP in<br />
the UK since 1667. Even<br />
the leader of the Scottish<br />
Labour party, Jim Murphy,<br />
lost his seat. On the<br />
Lib-Dem’s side, it was,<br />
indeed, a punishing night,<br />
as all the party’s senior<br />
ministers in the coalition<br />
government were wiped<br />
out. The voters booted out<br />
no fewer than five Lib-<br />
Dem ministers, including<br />
Vince Cable, the Secretary<br />
of State for Business, who<br />
once worked for Shell in<br />
Nigeria.<br />
Of course, in those circumstances,<br />
it was untenable<br />
for the party leaders<br />
to keep their jobs; they<br />
had to take responsibility<br />
for their party’s abysmal<br />
failure. So, it wasn’t surprising<br />
that they fell on<br />
their sword. The Labour<br />
leader, Ed Miliband, and<br />
the Lib-Dem leader, Nick<br />
Continues on page 11<br />
GLOBAL<br />
PERSPECTIVES<br />
OLU FASAN<br />
Fasan, a London-based lawyer<br />
and political economist, is a<br />
Visiting Fellow at the London<br />
School of Economics.<br />
o.fasan@lse.ac.uk<br />
@olu_fasan<br />
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