BusinessDay 22 Jun 2017

For Nigeria, simply exiting recession is no victory 

LOLADE AKINMURELE 

Nigeria is widely tipped 

to exit its first recession 

in a quarter of a 

century this year, but 

it will be by the skin of its teeth 

…Protect private capital, Doyin Salami urges FG 

and at a rate so underwhelming 

it may elude its people. 

The government projects a 

2.5 percent growth, while the 

International Monetary Fund 

(IMF) forecasts the economy will 

expand 0.8 percent, the slowest 

rate since 1998. Both projections 

offer no cheer when Nigeria is 

put in proper context. 

Home to some 180 million 

people, Nigeria has averaged a 3 

percent population growth in the 

past decade. GDP growth below the 

rate at which the country produces 

people is no meaningful economic 

recovery and would further deepen 

Continues on page 37 

MARKETS AND COMMODITIES MONITOR FMDQ Close (Rate & Prices) 

COMMODITIES EXCHANGE RATE FMDQ Close (Rate & Prices) 

Oil US $45.74 

NSE Close BDC TRAVELEX Foreign Exchange 

Treasury bills 

FGN Bonds) 

$-N367.00 367.00 Market 

Spot $/N 3M 6M 5Y 10Y 

GOLD $1,245.40 -897.71 

£-N463.00 465.00 I&E FX Window 365.86 

-0.03 -0.98 0.00 0.20 

COCOA $ 1,854.00 33,477.89 

€-N410.00 410.00 CBN SMISWindow 320.00 

18.53 19.05 16.16 16.29 

20Y 

-0.00 

16.03 

NEWS YOU CAN TRUST I **THURSDAY 22 JUNE 2017 I VOL. 14, NO 379 I N300 @ g 

Nigeria’s oil exports to top 

two million barrels in August 

...as crude oil prices enter bearish territory …NNPC records N5.27bn loss in April 

ISAAC ANYAOGU, With Agency Report, & 

HARRISON EDEH, Abuja 

Nigeria’s oil export 

is expected to exceed 

two million 

barrels per day (bpd) 

in August but this 

is coming at a time oil prices 

look bearish, falling below US$45 

Wednesday, a seven month low. 

As at yesterday evening, Brent 

crude, with which Nigeria’s crude 

oil grade is benchmarked, was 

selling at US$44.84 per barrel, 

closer to the 2017 budget price of 

US$44.50. 

Crude oil prices have fallen by 

more than 20 percent this year 

already, an indication say oil analysts 

that the prices have entered 

bearish territory. This is the worst 

performance for oil prices in the 

first six month of any year since 

1997, according to oil traders with 


L-R: Abdulrahman Dambazzau, minister of interior; Audu Ogbeh, minister of agriculture; Okechukwu 

Enelamah, minister of industry, trade and investment, and Anthony Anwukah, minister of state for education, 

at the Federal Executive Council meeting in Abuja, yesterday. 

Inside 

Manufacturers 

abandon DisCos 

for private 

power suppliers 

P. 4 

Experts point 

way to improve 

education as FEC 

admits fallen 

standard 

P. 37 

Brexit survey 

predicts 

two years 

of complex 

negotiations 

P. 10 

How 

communication 

failure is heating 

up Nigeria over 

Biafra 

P. 11

2 

Thursday 22 June 2017

Thursday 22 June 2017 

3

4 BUSINESS DAY 

C002D5556 


NEWS 

Manufacturers abandon DisCos for private power suppliers 

ODINAKA ANUDU 

Nigerian manufacturers 

are increasingly 

abandoning power 

distribution companies 

popularly 

called DisCos, for private companies 

that can provide 24-hour 

incremental and quality electricity 

at cheaper rates. 

Manufacturers say they are 

toeing this line on account of the 

poor quality of power supply they 

get from DisCos, which tend to 

disrupt production activities at 

factories across the country. 

Already, the Manufacturers 

Association of Nigeria, through 

its recently formed MAN Power 

Development Company, has 

signed an agreement with Tower 

Energy Solution & Systems Limited 

for the supply of between six 

and 10 megawatts (MW) of electricity 

to Henry Carr Industrial 

Cluster in Ikeja, Lagos. 

MAN is on the verge of agreeing 

with Negris Group for the 

supply of up to 80 MW of electricity 

to Odogunyan in Ikorodu 

industrial cluster. 

The organisation is also talking 

with solar power supply firms in 

northern Nigeria, where there is 

limited gas supply to enable clusters 

in Kaduna, Kano and other 

parts of the north to have incremental 

power at cheaper rates. 

Similarly, a negotiation is in the 

pipeline with Sahara Energy, Geogrid 

LighTec Limited and other 

companies for the supply of power 

to industrial clusters, according 

to Ibrahim Usman, chairman of 

MAN Power Development Com- 

Continued from page 1 

many now saying that they can 

rule out the possibility of oil prices 

falling to US$40 per barrel, which 

will be more than US$4 below 

Nigeria’s price 2017 price target. 

Current prices are only slightly 

above the prices seen in November 

2015 when OPEC members 

and 10 other non-members met in 

Austria to cut production to shore 

up prices and reduce a supply glut. 

Nigeria’s is exempted from an 

agreement by OPEC members to 

cut oil production and that has 

allowed it to expand production 

after a significant drop in militant 

activities in the South South, enabling 

oil firms to resume production 

from previously shut oil wells. 

According to preliminary loading 

plans compiled by Reuters, 

…as electricity quality, supply drop 

pany Limited. 

“Right now, manufacturers 

would rather pay a little extra and 

get quality power,” Usman said in 

Lagos. 

“The particular case works in 

Lagos because there is gas. We 

have Tower that is already producing 

35MW and it is ready to deploy 

more on incremental basis. If we 

are going to the north, where there 

is no gas, we will be talking of solar, 

biomass, wind or hydro. It is a case 

by case basis because what is happening 

in Lagos may not necessarily 

be what we need in Uyo, Aba, 

Kano or Kaduna,” he said. 

Nigerian manufacturers are 

hard hit by poor power supply, 

which gulps 40 percent of their 

expenditure. They spent N25 billion 

in 2014 and N59 billion in 2015 

Nigeria’s oil exports to top two million barrels... 

Nigeria’s crude oil export will hit 

2.02 million bpd in August as 67 

cargoes are scheduled in August, 

with an additional 97,000 bpd of 

Akpo condensate. 

The export plan is the highest 

since March 2016, which was 

scheduled at roughly the same 

level until a militant attack on 

the Trans Forcados Pipeline shut 

down Forcados exports in February 

of that year. 

Reuters said Forcados loadings 

resumed in late May, after operator, 

Royal Dutch Shell lifted force 

majeure on the grade early this 

month. While Bonny Light, also 

operated by Shell, is now under 

force majeure due to a pipeline 

leak on one of its two export lines, 

the grade is still flowing with 

loading delays of roughly 10 days, 

traders said. 

Nigeria’s engagement with 

militants in the Niger Delta is 

paying off, as a lull in militancy is 

leading to resurging production 

and will further put pressure on 

efforts by OPEC to trim output to 

beef up prices. 

Amrita Sen, Energy Aspect’s 

Chief Oil Analyst, told CNBC 

Africa that while she would not 

dare predict the level at which 

oil prices could stabilise, she 

refused to rule out the possibility 

that prices could slip below $40 a 

barrel in the short-term. 

“This is like a falling knife right 

now, I genuinely haven’t seen 

sentiment this bad ever,” Amrita 

Sen, the co-founder and chief oil 

on power, including alternative 

sources such as USP and Inverters, 

according to MAN. Small 

and medium manufacturers use 

diesel and petrol but large enterprises 

have gas plants and use 

Low-Pour Fuel Oil (LPFO) which 

is expensive. 

Dangote Cement is installing 

a coal-fired plant, while Ashaka 

Cement is already on coal. 

L-R: Osarodion Ogie, secretary to the Edo State Government (SSG); Phillip Shaibu, deputy governor, Edo 

State; Godwin Obaseki, governor, Edo State; Anselm Ojezua, Edo APC chairman, and Julius Ihonvbere, 

former Edo SSG, at a workshop for new political appointees in Benin City. 

analyst at Energy Aspects said. 

“We have had clients emailing 

saying they have been trading this 

for 20 or 30 years and they have 

never seen something like this,” 

she added. 

Production recovery from 

Nigeria and Libya is billed to add 

further pressure to the market. 

The increase comes as Libyan oil 

production is also rebounding, 

hitting 85,000 bpd this week and 

targeting 1million bpd by July. 

Libya and Nigeria were both 

exempt from OPEC-organised 

production cuts with non-member 

nations of 1.8 million bpd, 

and their resurgence has added 

to a glut of light sweet crude in 

the Atlantic Basin that is holding 

benchmark oil prices near seven- 


“The idea is to be able to put 

manufacturers together in clusters 

and arrange for power, which can 

be supplied through providers 

that will engage in power supply 

through hydro, solar, gas and will 

remove the cost of manufacturers 

getting involved in producing 

their own power, “ said Reginald 

Odia, chairman of the Economic 

Policy Committee of MAN and 

director of the MAN Power Development 

Company. 

“You need to run your plants 

and those plants need energy,” 

Odia added, after a presentation 

by Negris Group for the supply 

of up to 80MW to Odogunyan in 

Ikorodu industrial cluster. 

The Phase 1a of Negris Group’s 

power supply will inject 10 MW 

into Ikeja Disco’s substation and 

targets 33 MW double current 

grid within six months. The Phase 

1b of the arrangement involves 

upgrading capacity by 2X35 MW to 

achieve 70MW within 18 months, 

while the second phase will add 

more capacity to the turbines to 

hit 140MW in 24 months. 

Manufacturers will bear a capacity 

charge, which depends 

on the net dependable capacity 

of a power plant and contractual 

capacity. They will also bear a 

distribution change cost and a 

fuel charge based on the current 

gas price. 

“For commercial rate, per 

square metre of gas is about $7.8, 

but we are pushing to get gas at 

a cheaper rate. Gas is still being 

charged in dollars, so charges here 

depend on the exchange rate. If 

gas is cheaper or charged in naira, 

cost of power will be less,” said 

Sobanwa Kunle, general manager 

of Negris. 

According to Wole Ayoola, 

president of Negris, the company 

was desirous of playing its 

own part to make Nigeria selfsufficient. 

“Our power is relatively cheaper 

than self-generation. In selfgeneration 

you have to think 

about spare parts; you have to 

think about operation and general 

wear and tear and you have 

to replace equipment. But in this 

case, if you are a manufacturer that 

makes paper, you are not in the 

business of generating power but 

making paper. Rather than having 

a team of power engineers, in the 

long run if you have a number of 

people that come together and 

take the headache away from you 

and enable you to focus on the 

ones that generate money for you,” 

Ayoola said.

Thursday 22 June 2017 C002D5556 BUSINESS DAY 5 

Etisalat Group’s share price gains 

after decision to cut off Nigeria ties 

LOLADE AKINMURELE 

Etisalat Group’s share price 

on the Abu Dhabi securities 

Exchange was among 

the top 10 performing 

stocks yesterday, after the company 

announced that it has been 

forced by a consortium of banks 

to transfer its ownership in Etisalat 

Nigeria to United Capital Trustees. 

The company’s share price 

was up 0.29 percent to close at 

AED 17.35 (N1, 496.81) Wednesday, 

with more than 1.5 million of 

its shares traded, according to data 

culled from Bloomberg. 

“The Nigerian unit has been a 

drag on the group company,” said 

Ayodeji Ebo, managing director of 

Lagos-based Afrinvest Securities 

Limited. “That they have cut off 

ties with the Nigerian unit probably 

boosted investor confidence 

and lifted their share price,” Ebo 

said by phone. 

“Investors will be inquiring 

why the company has gone under 

and when they find it can be linked 

to the naira devaluation, it raises 

the country risk,” Ebo added. 

The Telco, with a total market 

capitalisation of 150 billion AED, 

was not immediately available to 

give a comment. The company 

reported net revenues of AED 52.4 

billion and net profit of 8.4 billion 

for 2016. 

Etisalat Group which owns 45 

percent ordinary shares and 25 

percent preference shares in Etisalat 

Nigeria announced on June 

20 that following a default in facility 

agreement with a consortium of 

Nigerian banks and inability to 

reach a restructuring agreement, it 

received on July 9 an enforcement 

notice which requires it to transfer 

100 percent of its shares to United 

Capital Trustees by June 15 which 

was later extended to June 23. 

The Group also noted that it 

has already written off to nil in its 

books, its shareholding in Etisalat 

Nigeria with its only financial 

exposure to its Nigeria subsidiary 

limited to AED 191 million (N16.5 

billion). 

Etisalat had been in talks with 

Nigerian banks to restructure 

a $1.2 billion trade facility after 

missing repayments, but those 

discussions failed to produce an 

agreement on restructuring the 

debt. 

The company initially asked 

lenders to convert the dollar portions 

of its loans into naira to 

help it overcome the shortage of 

hard currency on the interbank 

market but this was rejected by 

the lenders. 

The Telco went on to propose 

a five percent equity stake to creditor 

banks, to resolve the debt crisis, 

but that also collapsed. 

A number of firms invested 

aggressively in Nigeria in the era 

of high oil prices but are struggling 

to repay loans or keep operating, 

as the oil producer suffers from a 

slump in global crude prices that 

has hammered its revenues, its 

currency and dollar reserves. 

NERDC defuses concerns over 

new curriculum 

STEPHEN ONYEKWELU 

Nigerian Educational Research 

Development 

Council (NERDC) has 

defused concerns that new 

basic education curriculum 

has collapsed some subjects 

and runs the risk of obliterating 

religious identities in democratic 

state. 

Some stakeholders have 

said that for instance, Christian 

Religious Studies (CRS) is no 

longer part of the curriculum 

raising doubts over the curriculum’s 

ability to promote 

religious plurality. 

“The claims peddled on 

social media platforms and 

a national daily are to say the 

least speculative, false and unfounded,” 

the NERDC stated in 

a recent document. 

Specifically, as regards the 

Religion and National Values 

Curriculum, some of these 

claims have been that: CRK 

no longer exists in school but it 

is a theme in Civic Education; 

Islamic Arabic Studies/French 

subjects have been introduced 

in the new curriculum; and 

that a pupil/student will study 

either Islamic Arabic studies 

or French. 

Other claims include: Chris- 

tian students, based on the 

claims above will be left with 

no option than to study Islamic 

Arabic Studies since French 

teachers are more or less nonexistent 

in schools. 

According the NERDC, Religion 

and National Values Curriculum 

contents are planned 

for all children to take Social 

Studies, Civic Education and 

Security Education themes and 

separate classes should be run 

for CRS theme and IS themes. 

The NERDC has mandate 

to develop Curriculum for Basic 

and Senior Secondary Education 

levels. The process of Curriculum 

Development ranging 

from High Level Policy Committee 

on the review of National 

Curriculum, made up of eminent 

Nigerians, stakeholders 

in education, parents, market 

women, faith based organisations, 

traditional rulers, Non- 

Governmental Organisations, 

Community Based Organisations, 

National Association of 

Proprietors of Private Schools 

(NAPPS), Nigerian Union of 

Teachers (NUT), Association 

of Nigerian Conference of Principals 

of Secondary Schools 

(ANCOPS) and International 

Development Partners and 

Organised Private Sector. 

SAMUEL ESE, YENAGOA 

A 

group of Chinese businessmen 

has indicated interest 

in partnering the Bayelsa 

State government in boosting 

the economy by investing in 

key sectors to create jobs and 

provide opportunities for other 

businesses to grow. 

Receiving the team led by Xue 

Yuebin in Government House, 

Yenagoa, Governor Henry Seriake 

Dickson expressed appreciation 

for the visit, and explained 

the zeal of his administration’s 

efforts in revolutionising the state 

economy. 

Bayelsa State is the new investment 

destination having 

been adjudged as one the safest 

states in Nigeria, as well as having 

an abundance of natural 

resources like oil and gas, among 

others, Governor Dickson said. 

The governor stressed that being 

in Bayelsa captured the entire 

Nigerian market and beyond, as 

the state was at the heart of the 

Gulf of Guinea. 

In his words: “We are pleased 

to have you as a partner to see 

how we can utilise you to promote 

prosperity and create 

jobs. We are working on the 

Eco-Industrial Park, the land has 

been acquired, clearing will start 

almost immediately and we are 

working with our multi-national 

partners to see how we can utilise 

the abundant gas resources 

right there, convert it to power 

to generate 24 hours non-stop 

electricity for the first time in any 

NEWS 

Chinese group to invest in Bayelsa 

state in Nigeria. 

“All these are to give the investing 

public from your country 

and other countries the great 

opportunity to come to Bayelsa 

and be located at the Industrial 

Park with access to everything. 

Let me add that being in Bayelsa 

captures the entire Nigeria market 

and even beyond because 

Bayelsa is at the heart of the Gulf 

of Guinea.” 

The leader of the delegation 

and chairman of Wave Investment, 

Xue Yuebin, who is also a 

leader of the Communist Party 

in China, said the team had spent 

several days going round the 

state to inspect areas of interest 

for investment, and some of the 

laudable ongoing and completed 

projects of the state government. 

Yuebin expressed optimism 

that the entrance of members of 

the private sector from the Asian 

country to the state would also 

help to consolidate the existing 

relationship between Nigeria 

and China. 

He thanked the governor for 

the warm reception accorded 

them and his efforts in creating 

an enabling environment to attract 

investors to the state and for 

businesses to thrive. 

Earlier, Dickson’s chief economic 

adviser, Duate Iyabi, explained 

the reason for the visit 

and highlighted areas of interest 

for investment by the visiting 

team as well as the desire of manufacturers 

of BMW automobiles 

to setup a market to sell the cars 

at relatively cheap prices.


NEWS 

Govt to lose revenue from de-categorisation 

of port terminals - INTELS 

… battles NPA over de-categorisation of port terminals 

AMAKA ANAGOR-EWUZIE 

INTELS Nigeria Limited has 

criticised the move to decategorise 

port terminals by 

the Nigerian Ports Authority 

(NPA), saying it was not in the nation’s 

best interest, as it will result 

in huge revenue loss to the Federal 

Government. 

Dominic Onwuchekwa, a 

senior legal manager of INTELS 

Nigeria, said this while giving his 

witness statement on oath filed at 

the Federal High Court Abuja in 

a case instituted by the company 

against NPA and four others. 

Onwuchekwa stated that the 

proposed de-categorisation of 

the terminals will not only jeopardise 

the prospect of the plaintiff 

recovering its investments under 

the concession agreement signed 

with the Federal Government, 

but that it will also undermine the 

commitments made to its lenders. 

“De-categorisation will lead 

to a situation whereby all terminals 

will charge the lower fee of 

$1.2 per ton (even for oil and gas 

CEOs want government to tackle inflation rate 

IHEANYI NWACHUKWU 

CAC refutes report on internal disharmony among staff 

ISAAC ANYAOGU 

cargoes for which $5.83 per ton 

should be paid) in order to attract 

patronage from port users, but on 

the other hand short-changing the 

government itself and the people 

of Nigeria,” Onwuchekwa said in 

the Witness Statement on Oath. 

He further averred that in 

discharging its obligations in accordance 

with the terms and conditions 

of the various Lease Agreements 

(including the Concession) 

with the Federal Government, 

INTELS expended huge sums of 

money in upgrading port facilities 

and building infrastructures 

as well as developing specialised 

oil and gas designated terminals 

based on the need and requirements 

of the oil and gas industry 

world-wide. 

“Conservatively, the Plaintiff 

has, thus far, expended over USD2 

billion out of its own resources 

without amortization in various 

projects and has budgeted additional 

USD5 billion in phased 

Port Terminals development and 

infrastructural renewal,” he stated. 

He said the huge investment 

… as FG says committed to steering Nigeria out of recession 

Nigeria’s inflation rate 

has been on the decline 

since this year, 

but its remaining above 12 

percent is still a source of 

concern to most chief executive 

officers. 

Most of them who were 

panellists at the third edition 

of ‘NSE Bloomberg CEO 

Roundtable’ were unanimous 

in their submission that Federal 

Government policies 

should wrestle inflation. 

Ahead of most analysts’ 

consensus, May 2017 inflation 

rate came in at 16.3percent 

year-on-year (y/y), but down 

from 17.2 percent in April. 

The CEOs include Andrew 

Alli, CEO, Africa Finance Corporation; 

Funke Opeke, CEO 

MainOne; Demola Sogunle, 

CEO Stanbic IBTC Bank; Graham 

Hefer, MD, Okomu Oil 

Corporate Affairs Commission 

(CAC) says 

there is no risk of any 

industrial disharmony within 

the commission causing any 

impediment on the ease of doing 

business in reaction to an 

earlier story in BusinessDay expressing 

the concern by some 

staff of a possible internal strife. 

Godfrey Ike, head of public 

affairs of CAC, in a letter addressed 

to BusinessDay, says, 

“The Commission had issues 

bothering on welfare between 

officials of Amalgamated Union 

of Public Corporations, Civil 

Service Technical and Recreational 

Service Employees 

(AUPCTRE), and the management. 

“The Federal Ministry of 

Labour has since intervened 

and mediated on the issues 

involved, of which both parties 

have agreed on the terms and 

the issues amicably resolved.” 

Palm Plc; Ngozi Adebiyi, CEO, 

Outsidein HR. 

The consensus of these 

panellists, which had Mark 

Bohlund, senior Economist 

Africa/MiddleEast Bloomberg 

Intelligence as discussants was 

for Federal Government to 

create enabling environment 

for private sector to thrive and 

contribute to the economic 

growth of the nation. 

Themed, “Innovating out 

of Nigeria’s Recession: Exploring 

New Paradigms for 

Nigeria’s Economic Growth”, 

the conference was headlined 

by the Minister for Finance, 

Kemi Adeosun with over 150 

participants, including African 

captains of industry, 

government officials, dealing 

members and key influencers 

in attendance. 

The latest figures released 

by the National Bureau of 

Statistics (NBS) show that the 

In a story published on 

June 12, the CAC chapter of 

AUPCTRE, had told our correspondent 

that lack of proper 

sensitisation, poor remuneration 

of low cadre workers in 

comparison with management, 

lack of collaboration and an 

unmotivated workforce may 

scuttle the executive order on 

the ease of doing business. 

Ike says this is not the case, 

as “CAC is well positioned to 

continue to play its leading role 

towards providing an enabling 

environment for business to 

thrive in Nigeria. The Commission’s 

registration process has 

been strengthened. Customers 

and investors can now access 

the services of the Commission 

online through the Company 

Registration Portal (CRP). This 

ensures smooth service delivery 

with 24 hours timeline for 

company registration. 

“Furthermore, the Commission 

regards its workforce as its 

greatest asset and will always 

by INTELS in five concessioned 

port terminals across the country 

were made in response to the 

Federal Government’s quest and 

demand for investment in port 

infrastructure development in 

Nigeria. 

“In addition to the above, 

the Plaintiff had also expended 

these huge expenses because it 

had entered into and executed 

5 nos. Lease Agreements on the 

Concessioned Port Terminals 

which life span were 25 years 

with option of renewal for a 

further term on each terminal,” 

Onwuchekwa stated. 

He said INTELS’ investment 

in the concessioned 

terminals was “based on the 

assurances and comforts from 

the 1st - 5th Defendants, especially 

the 3rd Defendant’s 

(NPA) categorization of Ports 

and Terminals, stating that the 

company “was persuaded into 

financing huge capital intensive 

projects for the benefits of 

the 1st- 5th Defendants and the 

people of Nigeria”. 

economy shrank by 0.52percent 

in the first quarter (Q1) of 

2017 raising hopes that Nigeria 

is close to exiting recession. 

Participants at the forum 

deliberated on how to lift the 

Nigeria growth trajectories 

and examined sustainable 

growth factors that can rebuild 

economic fundamentals, address 

structural vulnerabilities 

and forge new sources of 

growth. 

Oscar Onyema, CEO, NSE, 

noted that the NSE Bloomberg 

CEO Roundtable was borne 

out of the need to bring leaders 

from various sectors of 

the economy to discuss and 

proffer solutions to pertinent 

issues affecting their sectors 

and examine global trends 

applicable to them. “The NSE 

Bloomberg CEO Roundtable 

has turned into a special dialogue 

platform in terms of 

both shape and content.” 

ensure that their welfare is given 

utmost priority.” 

Acting President Yemi Osinbajo, 

on May 18, had signed 

three executive orders expected 

to change some of the ways 

government businesses and 

operations are conducted. The 

orders stipulate sanctions and 

punitive measures that will be 

imposed where necessary. 

According to statement 

from the government, the orders 

will ensure the promotion 

of transparency and efficiency 

in the business environment 

designed to facilitate the ease 

of doing business in the country. 

They will also ensure support 

for local content in public 

procurement by the Federal 

Government. 

The orders were also meant 

to ensure timely submission of 

annual budgetary estimates by 

all statutory and non-statutory 

agencies, including companies 

owned by the federal government. 

C002D5556 



7

8 



9



C002D5556 

COMMENT 

CHRISTOPHER AKOR 

Chris Akor, a First Class 

graduate of Political Science, 

holds an MSc in African Studies 

from the University of Oxford and 

is BusinessDay’s Op-Ed Editor 

christopher.akor@businessdayonline.com 

There appears to be subtle 

admission by the president 

and the administration’s 

minders that the 

war on corruption cannot 

and may not be adequately and 

comprehensively fought within the 

ambit of the rule of law. 

This has led to debates about the 

feasibility of Western liberal democracy 

in post-colonies like Nigeria 

where the very existence of the state 

is being threatened by grand corruption, 

insecurity, social disorder, 

poverty, hunger and inequality. 

There are those who think that the 

national priority should be about 

solving these existential problems 

and not about the fine details of democracy 

– excessive rule-based systems 

and fractious conflicts – which 

may not be exactly what the country 

needs right now. For these people, it 

is better to develop our unique style 

of governance that fits our kind of 

society and designed to solve our 

problems rather than a wholesale 

adoption of a system of governance 

that clearly does not suit us and may 

actually hinder the achievement of 

national goals. 

FEMI JOHNSON 

Femi Johnson, an international affairs 

enthusiast writes from Lagos 

Multinationals as 

well as domestic 

businesses and 

business leaders 

across the world are still nervous 

and uncertain about the effects 

of a post-Brexit era on their business 

operations. 

A recent study by global law 

firm Hogan Lovells –advisors to 

major multinationals around 

the world – in collaboration with 

Oxford Economics, gives some 

insight into business sentiments 

towards the post-Brexit world 

and its impact on long-term 

business strategy in investment 

decisions and competitiveness. 

The aim of the Hogan Lovells 

Brexometer survey was not to 

predict the future but rather try 

to understand the present views 

of a post-Brexit world. 

Given the uncertainty over 

the economic implications of 

Brexit, there is a lack of confidence 

in the direction of negotiations. 

53 percent of UK 

businesses have shown support 

for some kind of transitional 

agreement. 

Such agreement could delay 

the full impact of Brexit and 

mitigate some of that uncertainty. 

UK financial and insurance 

companies showed the greatest 

enthusiasm for transitional arrangements 

with 75 percent in 

support, because if transitional 

Democracy or development? 

These arguments are not new 

anyway. They mirror the debates 

in the 1960s and 70s largely among 

new and emerging states over what 

model of development to choose 

from between the liberal Western 

capitalist and Soviet socialist 

models. Interestingly, quite a lot 

of African independence leaders 

chose to go with the socialist model. 

Their main argument then was that 

being newly independent nations, 

they were so much in a hurry to 

develop; to catch-up with the West, 

as it were, and could not afford the 

luxury of the gradualism inherent 

in the liberal democratic model. 

In no time therefore, most African 

states experienced a transition 

from Western liberal democracy to 

‘one party’ states or ‘no party’ states. 

In rationalising this shift, leading 

proponents of the one party state 

such as Tanzania’s Julius Nyerere 

argued that two or multi party politics 

may only be justified in cases 

where the parties are divided over 

some fundamental issues. But in 

new nations where there is actually 

no major policy or fundamental 

disagreement beyond the one overarching 

goal of achieving socioeconomic 

development within the 

shortest possible time, it is absurd 

to have party competition(s) as it 

will merely encourage the growth of 

factionalism and conflict, which the 

new states hardly have time for. The 

only competition that may be entertained 

is between individuals in 

one party and not between parties. 

Others abolished parties altogether 

and with time, democracy or any 

But like I have argued 

time and again, the development 

of viable national 

institutions and not 

personal rule is the real 

harbinger of sustainable 

growth and development 

and not some autocratic 

or dictatorial posturing 

of leaders. Any growth or 

development not built on 

institutions could quickly 

unravel 

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tutionalisation of democracy – with 

its inherent fractious competition - 

could lead to a relapse into violence 

and conflict. 

This school of thinking was 

further reinforced by the experiences 

of South East Asian countries 

that largely spurned the Western 

liberal model and were still able to 

industrialise almost at a breakneck 

speed. Almost all those countries 

like China, South Korea, Taiwan, 

Singapore etc were virtual dictatorships. 

In Africa, the shining example 

was Rwanda, where, after leading his 

band of exiled Tutsi militias to stop 

the genocide and took over control 

of the country in 1994, the strongman, 

Paul Kagame has led Rwanda 

to socio-economic recovery and 

growth that it has become one of 

the best performing nations in Africa 

economically and has become one 

of the most attractive destinations for 

foreign direct investment in Africa 

today. Of course, the West largely 

funded the post-war economic recovery 

in Rwanda. However, ridden 

by the guilt of its failure to stop the 

genocide and a fear of relapse, the 

West allowed Paul Kagame to appropriate 

and personalise all powers 

while outwardly maintaining pretentions 

to democracy. 

So, given the level of rot and 

decay in the Nigerian system, it is 

understandable that some Nigerians 

are beginning to question the 

suitability of liberal democracy in 

Nigeria. The belief is that with its 

insistence on rules, procedures and 

processes, and the legal requirement 

of presumption of innocence until 

with harmful effects on African 

farmers’ competitiveness. With 

more than 60 percent of Africa’s 

economically active population 

working in agriculture, the 

subsidies take an important toll 

on the livelihoods of a majority 

of Africans. 

In a situation where the UK 

was to leave the EU, there would 

not be a strong voice within the 

EU advocating for the livelihoods 

of African farmers. In sum, there 

are a number of ways through 

which Brexit could have an impact 

on African countries, starting 

with its impact on the global 

economy, a more introverted 

British outlook when it comes 

to global development issues, as 

well as decreased bilateral development 

assistance and trade. 

From a political standpoint, 

Brexit is bound to have effects 

on not just the UK/EU political 

environment but also on the 

socio-political and economic environment 

for African countries, 

including Nigeria. To a large extent, 

the conception of regional 

economic blocs in Africa has 

been predicated on the success 

of the European Union. 

So what can be done internally 

to reduce the adverse effects 

of Brexit? For Nigeria, a 

reduction of dependence on the 

UK through real diversification 

of the economy will be a positive 

step. As African countries begin 

to attain middle income country 

proven guilty, the big thieves could 

always game the system and make it 

difficult to ensure a largely corruptfree 

polity, which many Nigerians 

believe is a sine qua non for rapid 

economic growth and development. 

But like I have argued time and 

again, the development of viable 

national institutions and not personal 

rule is the real harbinger of 

sustainable growth and development 

and not some autocratic or 

dictatorial posturing of leaders. Any 

growth or development not built on 

institutions could quickly unravel. 

Zimbabwe was the toast of the world 

in the 1980s and 1990s but has now 

unravelled. Rwanda, with the insistence 

of Paul Kagame to become life 

president, is facing the prospect of 

unravelling too. 

In conclusion, I fully agree with 

Francis Fukuyama that the development 

of a capable state that is 

accountable and ruled by law is one 

of the crowning achievements of 

human civilisation. It is the absence 

or weakness of institutions or more 

appropriately, a capable state that is 

at the root of corruption. In Nigeria 

and other developing countries, corruption 

serves largely to grease the 

wheels of inefficient bureaucratic 

government machines leading to 

efficient outcomes. Common sense 

therefore dictates that an effective 

war against corruption must 

involve the strengthening of state 

institutions. 

Brexit survey predicts two years of complex negotiations 

arrangements are not agreed, 

financial institutions would 

run the risk of being unable 

to conduct businesses across 

a UK/EU border unless they 

obtain local authorization in 

the country in which they wish 

to do business. 

This includes businesses 

outside the UK/EU, thus the 

implications of Brexit are not 

limited to the UK/EU. In fact 

Brexit poses huge economic 

consequences to the African 

continent. Africa is one of the 

largest beneficiaries of UK aid. 

In 2015 Africa alone received 

GBP2.54 billion in UK aid. 

Of this amount, some of the 

largest benefactors of aid on 

the continent were Ethiopia 

(GBP331.4 million), Nigeria 

(GBP 253.5 million), Sierra Leone 

(GBP 213.8 million), South 

Sudan (GBP205.2 million) and 

Tanzania (GBP 199.7 million). 

During the Ebola outbreak in 

Liberia, the UK’s Department 

for International Development 

(DFID) donated 16 percent 

of its budget to the Ministry 

of Finance in Liberia through 

the EU3. 

With Brexit, there likely will 

be a change in UK development 

assistance over medium term, 

but analysts have suggested 

that in the short term, commitments 

will still be met between 

the UK and the continent as it 

will be difficult to completely 

pretentions to democracy. 

In the 90s, and early 2000s, especially 

after the collapse of the Soviet 

Union and the triumph of the western 

liberal democracy model, the debate 

shifted to a question of sequence. 

Which should come first – democracy 

or economic development? Those 

that argue for democracy believe it 

could create the enabling environment 

for economic development. 

Opponents however contend that for 

poor, fragile states just coming out of 

conflict situations especially, the real 

and existential need is for economic 

development and that democracy 

cannot function without some minimum 

level of socio-economic development. 

Using copious examples 

from different parts of the world, they 

showed how insistence on the instierase 

the social interventions. In 

the medium-long term however, 

there is strong concern that focus 

will be more on domestic affairs 

and the UK may gradually over 

look Africa. 

Also, for a country like Ghana, 

having attained middle income 

status: the more it improves economically, 

the more rapidly aid 

will decline. 

In terms of the outcomes of 

theBrexit negotiations, the Hogan 

LovellsBrexometer found that 

the difference between businesses’ 

perception of best and 

worst case outcomes is vast. The 

worst case implies a collapse in 

investment and new employment 

opportunities, as well as a 

total re-assessment by the UK of 

the necessity to invest in global 

businesses. 

According to the survey, in 

the best case for example, 27 

percent of German companies 

will continue to invest in the UK 

in a post-Brexit world while in 

the worst case just 3 percent of 

German companies will continue 

to invest. 

For years, the UK has criticized 

the current subsidies European 

countries have in place, which 

have hindered African farmers’ 

trade capacities. In his argument 

in favor of the “leave” option, 

James Duddridge voiced his 

concerns over the EU’s Common 

Agricultural Policy (CAP), which 

puts in place subsidy systems 

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status, like Ghana recently did, 

foreign aid may begin to dry up. 

Government, corporations 

and individuals must begin to 

look inward to help bring African 

solutions to African problems. 

Leaders across the continent 

should deliberately work to 

reduce the continent’s vulnerability 

to external shocks like the 

Brexit referendum outcome. 

Perhaps one of the most important 

revelations from the 

survey is that, while 93 percent 

of UK companies understand 

the impact Brexit may have on 

their business and country, some 

(albeit a minority) have not yet 

developed plans to manage 

those impacts. 25 percent of all 

respondents have sought external 

help, and a majority have not 

considered the possible impact 

of Brexit beyond their own internal 

expectations. 

Businesses that are proactive, 

prepared and have already 

started planning are markedly 

more upbeat than those who 

have so far faced Brexit more 

passively. But now is not the time 

for businesses simply to hope 

for the best. With negotiations 

beginning soon in earnest, now 

is the time for proactive actions 

to mitigate the foreseen and anticipate 

the unforeseen effects of 

a post-Brexit world. 

•The Hogan Lovells Brexometer 

survey was released in 

March 2017.


COMMENT 

STEVE NKWOR MIRM (UK) 

Steve Nkwor a risk management consultant 

and writes from Lagos, Nigeria. He 

can be reached on snkwor@snaconsulting.org 

There are first steps in 

ERM implementation. 

To begin with, appropriate 

Tone-at-the- 

Top needs to be set. 

We already considered this in the 

immediate past article. Following 

from that, a sponsor of the project 

would need to come on-board to 

steer the ship. This overall leader 

of the project is what we are considering 

in this article. He or she 

may need to appoint a consultant. 

A roadmap, with clear milestones, 

should also be produced and a 

project team constituted. 

There are those that opine 

that implementing ERM, with a 

project plan as outlined above, 

prolongs its go-live and therefore 

a waste of resources. To such 

minds, it would suffice to just create 

the ERM function, designate a 

head and then kick-start it. 

Should ERM implementation 

strictly then be approach 

as a project? Is there a need to 

designate a Sponsor? Would it 

be a duplication of roles to have 

ERM: Project Sponsor 

a project manager and a project 

sponsor? What key results should 

the ERM project sponsor deliver? 

These are pertinent questions we 

will endeavour to address in this 

article. 

A simple definition of a project 

is that it is a set of interrelated 

tasks to be executed over a fixed 

period and within certain cost 

and other limitations. Strictly 

speaking, every ERM implementation 

involves the design 

and deployment of interrelated 

framework components. ERM 

projects, irrespective of scale, 

have milestones that are to be delivered 

within budget. This makes 

it fit more aptly into this definition. 

Constituting a project to design 

and deploy ERM framework 

remains one very practical way to 

train and kick-start the function. 

All these are best achieved within 

the leadership of an executive 

sponsorship of the project. 

A topic like this becomes very 

important because the term 

‘project sponsor’ is too often 

misconstrued to mean a moneybag 

whose main responsibility is 

to secure the project funds and 

then show up at the commissioning 

stage for a thumbs-up. This is 

a destination syndrome. It is not 

the picture of an ERM sponsor. 

ERM projects are implemented 

to activate a cycle - the risk management 

cycle - and not to hit a 

destination. All the well known 

Strictly speaking, every 

ERM implementation 

involves the design and 

deployment of interrelated 

framework components. 

ERM projects, 

irrespective of scale, have 

milestones that are to be 

delivered within budget 

risk management standards endorse 

the risk management process 

as a cycle. This makes ERM a going 

concern journey. Irrespective of 

whether an organisation is forprofit 

or not-for-profit, the picture 

of an ERM sponsor is one that is 

meant to champion the design and 

deployment of a framework and to 

deliver on the initial risk reports. An 

ERM sponsor is therefore one that 

sits on the project to walk-the-talk 

of management buy-in. He/she 

brings the sail or sink drive to the 

project and this often makes the 

difference between success and 

failure. 

The project sponsor and the project 

manager will, under preferred 

arrangements, be working closely 

from start to finish. ERM projects 

should begin with milestones that 

are approved by the management 

or board. This outlines project 

deliverables and the turn-around 

C002D5556 

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deadlines. The project manager’s 

responsibility is to make the dayto-day 

calls on the project. While 

the sponsor authorises the project, 

the project manager executes it. It 

is the responsibility, therefore, of 

the sponsor to provide clear leadership, 

secure project resources, 

ensure project is on time and on 

budget, engaging the necessary 

stakeholders and championing of 

the project at the executive level to 

secure continued buy-in. 

To address the question: ‘what 

key results should the ERM project 

sponsor deliver?’ The sponsor 

should, in the first place, deliver a 

common language for risk communication 

in the organisation. It 

should also deliver the integration 

of strategy, risk management and 

the decision making processes 

of the organisation. The sponsor 

should, in addition, deliver 

a process that cascades the organisation’s 

risk appetite through 

to core processes’ tasks. It is also 

part of the sponsor’s call to deliver 

a clear structure of risk defence 

system that put risk ownership, 

risk control and risk audit functions 

in clear perspectives. 

Risk identification is very central 

in an organisation’s risk management 

process and the project 

sponsor should deliver a model. 

In order for the organisation to 

properly manage solvency or economic 

capital, the project sponsor, 

should in addition, deliver a 

BUSINESS DAY 

11 

system for own risk and solvency 

assessment. This should be a fitto-size 

measurement structure 

for market, credit and operational 

risks. It should also deliver a model 

for risk control. Last of all, it should 

deliver the desired initial risk 

reports. 

Overall, organisations that engage 

a sponsor in implementing 

ERM often utilise and benefit from 

project management. They effectively 

manage finish-to-start project 

dependency. They thus allow 

framework design, for instance, to 

finish before its deployment starts, 

the same way land is acquired before 

a building erection can start. 

Start-to-start project dependency 

is also better managed. Objectives 

setting, as a culture for instance, 

will be allowed to start before risk 

identification will start. This way, 

risk will not be identified out of 

context. ERM projects do, in addition, 

manage finish-to-finish dependency. 

This allows risk assessment 

to finish before economic or 

solvency capital measurements 

can finish, for instance. Start-tofinish 

project dependency will 

equally be well managed. The new 

culture that ERM embeds will be 

allowed to start before the existing 

one can finish or be outlawed. 


comment@businessdayonline.com 

CHIDO NWAKANMA 

Vice President YemiOsinbajo 

scored a bull’s eye with his 

identification of the pathogen 

causing the eruption 

and inflammation of ethnic animus 

across Nigeria recently. Speaking 

June 14 to Influencers from the South 

East, and before them those from the 

North,Osinbajo pointed to the failure 

of communication. 

The Vice President stated: “It is 

also clear that wars sometimes start, 

not with bullets, but with words. 

Hateful, incendiary speech, opening 

floodgates of blood. The tongue, like 

the pen, is often mightier than the 

sword – because it is what pushes the 

sword into action. When we throw 

words like stones in a marketplace, we 

do not know who or what it will hit.” 

The issue, of course, is the narrative 

around BiafraExit and NigRemain. 

Since 2015, public communication 

in Nigeria has tended towards the 

negative and the extreme. Discussionon 

the elections was provocative, 

insulting and aimed at drawing blood. 

It was par for the course, some said, as 

political communication is warfare. 

However, the amplification of ethnic 

sentiments in our political sphere 

dates back to the run up to the 2011 

elections after the death of President 

Umaru Musa Yaradua. 

Unfortunately, it has continued. 

President MuhammaduBuhari reduced 

the halo of the Presidency with 

his emotive comments and conduct 

that further polarised the nation. It 

was that negative mindset that enabled 

the flowering of the New Biafra. 

There are many views and arguments 

for and against the BiafraExit. 

Whatever the case, communication 

around the putative republic has been 

less than salutary. 

Two Hs have characterised the 

narrative around the New Biafra. They 

How communication failure is heating up Nigeria over Biafra 

are hate and hubris. Proponents of 

the New Biafra speak with arrogance 

about alleged Biafran exceptionalism. 

They point to many Igbo firsts, 

the progress of the Igbo individually 

since the civil war and their ability to 

survive in harsh environments like 

the cactus as grounds for confidence 

in the success of a New Biafra. They 

then undermine these positives by diminishing 

other ethnicities and even 

preaching hatred against the various 

groups. The arrogance extends to 

claiming territories outside core Igbo 

land as parts of the New Biafra and 

dismissing the objections of persons 

from those areas peremptorily. 

War veteran and general, President 

MuhammaduBuhari worsened 

the situation with the maladroit handling 

of a prickly situation. Note that 

MaziNnamdiKanu had commenced 

his Radio Biafra and its vile outpourings 

two years before the ascendancy 

of Buhari. There was before that the 

Movement for the Actualisation of 

the Sovereign State of Biafra since the 

Obasanjo government. The Goodluck 

Jonathan government watched Kanu 

askance, keeping a distance. Buhari 

went for the jugular, same as he did 

ill-advisedly with the Niger Delta agitators, 

and ended up turning a fringe 

movement into the mainstream. His 

pronouncements on the division of 

the spoils of office and actual conduct 

in thedeployment of state power 

worsened the feeling of alienation. 

Negative emotions have driven 

the conversation around Biafra. A 

conglomeration of youths from the 

North raised the decibel of negativism 

with their pronouncement on June 

6, 2017,asking Igbos to quit Northern 

Nigeria. As with the New Biafra, the 

tone and tenor of their remarks were 

combative and filled with the two Hs 

of hate and hubris. They matched and 

exceeded Kanu and his Radio Biafra in 

the quantum and vehemence of their 

invectives and hatred of the Igbo. 

Nigeria is now on a knife-edge arising 

from wrong policies but more from 

the narratives around the traditional 

struggle for preferment amongst groups 

in a diverse polity. 

The explosion of platforms in Media2.0 

has worsened the failure of 

public communication. The Nigerian 

situation today vividly illustrates the 

pitfalls and dangers of the new media 

order. We have lost the gatekeeping 

role prevalent in old media to a free for 

all. Opinion formation takes the form 

of who shouts the loudest, without 

the benefit of peer review and test for 

taste, validity, appropriateness, ethics 

and fair comment. Gatekeepers in 

time past checked for these attributes 

to minimise harm. 

The era of citizen journalism sees 

a deluge of information without communication. 

There is so much out there, 

from all the ethnicities. 

There is a discernible vacuum in 

the media space. The era of dominant 

media organs to which citizens turned 

for direction is gone. There are no such 

organs anymore either in the print or 

online, leaving a dangerous space now 

filled by all manner of platforms. The 

result is the current anomie. 

Effective communication is purposive 

and persuasive. It is planned, 

with clear objectives, milestones and 

messages. The New Biafra says its 

intendment is to cause Nigeria to hold 

a referendum to determine whether 

persons in the demographic would 

want to stay on in the country. Because 

the messaging has been diffuse and obtuse, 

it has not been persuasive. Rather 

it has brought out the beast in the other 

rather than winning their empathy and 

support. 

Messaging by IPOB has been 

full of bile and hatred against other 

ethnicities. They post false narratives 

on various issues, including religion. 

The most recent are trending video 

and audio messages of attacks on 

Igbos in the North or the sighting of 

ammunition in vehicles in the East, 

all of which are false. 

It would seem that rather than 

the stated objective, IPOB and the 

BiafraExit movement want to force 

the motion by deliberate provocation 

of other groups, thus putting the lives, 

relationships and well-being of its 

primary stakeholders at significant 

risk all by its actions. 

The sole credit of the IPOB campaign 

is forcing a renewed discussion 

of the structural and other inequities 

of the Nigerian federation. Each day, 

new revelations indicate the complicity 

of the current federal government 

in deepening the fissures through outright 

disregard for the laws of Nigeria 

on Federal Character and the sensibilities 

of other groups. But IPOB’s 

communication has been deleterious, 

particularly so to its primary audience. 

Among the functions of communication 

that experts identify are 

integration, socialisation and mobilisation. 

Integration involves providing 

to all persons and groups “access 

to the variety of messages that they 

need to understand each other and 

to appreciate others’ living conditions, 

viewpoints and aspirations”. The media 

contribute to the socialisation process 

by providing a “common fund of 

knowledge” enabling full functioning 

of citizens. The motivation function 

involves “the fostering of individual 

or community activities, geared to the 

pursuit of agreed objectives” (Mac- 

Bride, 1980). 

The absence of persuasive communication 

has hampered integration 

in Nigeria particularly in the last two 

years. Communication traditionally 

would attempt to influence beliefs, 

attitudes, motivations and behaviours 

of its audience about an idea, object, 

or other persons. A grand project such 

as the New Biafra requires strategic 

communicationto create awareness, 

understanding, acceptance in some 

cases, or at least empathy for it in others. 

Effective communication avoids 

distorting messages during the communication 

processes. Communication 

is effective when it leads to the 

sharing of information accurately between 

sender and receiver and causes 

the desired response. It should generate 

and retain the effect you want. 

Communication of the New Biafra 

also calls for reflection by professionals. 

IPOB has triggered the Agenda Setting 

function of the media by placing 

the matter of an independent country 

on the burner of discourse. Agenda setting 

theory posits the interplay of forces 

in the socio-economic environment, 

and this is playing out. 

However, agenda setting is not a 

theory of persuasion. Diffusion of innovation 

is one of the most prominent 

theories of strategic communication. 

Application of this theory or any theory 

or model of persuasion lacks in the 

current narratives, for and against the 

proposition. 

There is a need for better communication 

in the public sphere in 

Nigeria. The proponents of Biafra need 

to deploy strategic communication 

and use the principles of persuasion or 

social influence enunciated by Robert 

Cialdini and the experts in psychology 

and communication. 


comment@businessdayonline.com



C002D5556 

EDITORIAL 

PUBLISHER/CEO 

Frank Aigbogun 

EDITOR-IN-CHIEF 

Prof. Onwuchekwa Jemie 

EDITOR 

Anthony Osae-Brown 

DEPUTY EDITOR 

John Osadolor, Abuja 

NEWS EDITOR 

Bill Okonedo 

EXECUTIVE DIRECTOR, 

SALES AND MARKETING 

Kola Garuba 

EXECUTIVE DIRECTOR, OPERATIONS 

Fabian Akagha 

EXECUTIVE DIRECTOR, DIGITAL SERVICES 

Oghenevwoke Ighure 

CHIEF FINANCE OFFICER 

Folashade Odusanya 

MANAGER, SYSTEMS & CONTROL 

Emeka Ifeanyi 

HEAD OF SALES, CONFERENCES 

Rerhe Idonije 

SUBSCRIPTIONS MANAGER 

Patrick Ijegbai 

CIRCULATION MANAGER 

John Okpaire 

GM, BUSINESS DEVELOPMENT (North) 

Bashir Ibrahim Hassan 

GM, BUSINESS DEVELOPMENT (South) 

Ignatius Chukwu 

Time for solution to housing sector challenges 

Notwithstanding the 

many housing sector 

challenges bordering 

on poor infrastructure 

base, long, 

costly and tortuous property 

registration process, lack of enabling 

laws, etc. Nigeria is, arguably, 

a huge real estate market. 

Though there are reasonable 

efforts by public and private 

sector operators at providing 

adequate and decent accommodation 

for the citizenry in 

line with the National Housing 

Policy, these efforts are yet to 

yield the desired results on account 

of obvious challenges. 

At the federal government 

level, there is a new scheme 

called the Federal Integrated 

Staff Housing (FISH) being implemented 

to address the housing 

needs of civil servants who 

find it difficult to climb the property 

ladder. The scheme is also 

aimed to bridge the housing deficit 

estimated at 17 million units. 

FISH is based on the National 

Housing Policy, which also aims 

to provide affordable and decent 

housing for Nigerians and, 

according to Babatunde Fashola, 

minister of power, works 

and housing, the new housing 

scheme has been put in place to 

drive the housing policy. 

We align with the rest of Nigerians 

who believe that given Fashola’s 

antecedents while in office 

as governor of Lagos State, he is 

just the right candidate to push 

through progressive policies that 

will engender the needed solution. 

We believe too that he understands 

the business of government 

in providing an enabling 

atmosphere for investors going by 

strategies being adopted in the implementation 

of the FISH scheme, 

which, he says, is also part of government’s 

multi-faceted approach 

to economic development. 

The implementation of the new 

scheme now becomes more urgent 

bearing in mind that it is part of 

government’s efforts at creating 

economic activities aimed at 

empowering people all over the 

country. 

At a time like this when income 

is dwindling, workers on site will be 

happy getting paid from contractors 

as that will enable them to take 

care of their families and patronise 

food vendors. It gladdens our heart 

that, according to the minister, the 

ministry is training artisans like 

carpenters and bricklayers to be 

relevant technically. 

Again, it is interesting for us to 

note that many real estate industry 

players, especially the big names, 

share the housing provision dream 

of the minister for the country. At 

the moment, the country needs 

almost one million housing units 

delivered annually to fill its housing 

demand-supply gap. 

Nigeria offers high returns on 

investment, especially in prime 

real estate, because of its fast 

growing populations, but it needs 

to encourage investors by creating 

the enabling environment. We 

agree with Fasunwon Deji, managing 

director, Propertymart Real 

Estate Investment Limited, who 

says policy makers need to ensure 

that access to long-term finance 

is guaranteed to enable investors. 

Creating the enabling environment 

requires closing the gaps in 

government-run infrastructure 

to guarantee efficient urban 

development. Roads, electricity, 

security, etc are significant areas 

that the government needs to invest 

in to ensure that developers 

employ best practice residential 

and commercial property 

standards. 

We deem it pertinent for government 

to promote favourable 

macroeconomic policies which 

will in turn encourage private 

sector investors to partner with 

it in providing low-cost mass 

housing. These policies, we believe, 

must result in low interest 

rates, stable exchange rates and 

low inflation to encourage investors 

to move into mass housing 

projects that could encourage 

low-income earners to move 

from rented to their own affordable 

mortgage-backed homes. 

It is our hope that these policies, 

coupled with a broader 

economic growth stimulation 

that results in lifting more Nigerians 

above the poverty line, will 

make low-cost housing actually 

affordable for the low-income 

earner. 

To make all these happen, we 

advise that processes for land acquisition, 

construction permits 

and property registration must 

be simplified and automated in 

line with global best practice. 

As a country, we cannot continue 

with a culture that frustrates 

estate developers and 

discourages prospective home 

owners. A situation where prospective 

property owners have 

had to wait for years to secure 

necessary approvals and documentation 

is, to say the least, 

anti-growth and unproductive. 

Like Deji, we want controversial 

legislations such as the 

1978 Land Use Act and the 2012 

National Housing Policy revisited 

to tackle aspects of their implementation 

that stifle the growth of 

the real estate sector. 

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COMPANIES 

& MARKETS 

COMPANY NEWS ANALYSIS AND INSIGHT 

Sterling Bank to 

encourage women to be 

self-conscious 

P14 

ABO Capital acquires school, reinforces 

new education funding trend 

…a possible model to bridge Nigeria’s funding gap 

STEPHEN ONYEKWELU 

ABO Capital, an 

Angolan investment 

firm 

has acquired 

Complexo Escolar 

Privado Internacional 

(CEPI) in Luanda, Angola’s 

capital city reinforcing a 

growing trend among private 

equity firms in Africa 

and a possible model for 

Nigeria. 

Terms of the deal for the 

768-pupil facility were not 

disclosed. Also known as 

the Turkish School, CEPI 

started life in 2007 and 

enrolment has expanded 

consistently, reaching 768 

pupils in the current academic 

year. 

The increase in the size 

of the student body has 

forced the school to build 

new facilities and the investment 

by ABO Capital 

will help bring the construction 

project to completion. 

The move is a first step 

in building an educational 

platform for ABO Capital, 

which plans to open up 

three additional schools in 

Source: Nigeria Budget Office 

the near future. 

Recently, AfricInvest, a 

mid-market private equity 

firm with US$1 billion in assets, 

backed International 

Community School, a private 

school in Ghana, in a 

preference share deal. The 

investment was the sixth 

for AfricInvest’s third private 

equity fund, which is 

now 50 per cent deployed. 

This is a model that 

could help bridge Nigeria’s 

education funding gap and 

improve both access and 

quality. Average annual 

budgetary allocation to 

education in Africa’s biggest 

economy in the last 

four years was N472 billion, 

9.36 per cent of an 

average annual budget of 

N5.05 trillion. This has left 

an annual funding gap of 

16.64 per cent, that is, N840 

billion. United Nations 

Educational, Scientific 

and Cultural Organisation 

(UNESCO) benchmark for 

education allocation is 26 

per cent of national budget. 

Dalberg, a global development 

advisory firm 

estimates that there is a 

funding gap of over US 

$1trillion for education in 

sub-Saharan Africa (SSA) 

and says there is an urgent 

need to direct attention 

towards the education system. 

SSA has more than 

30 million primary and 90 

million secondary school 

children currently outside 

the system. And with about 

nine million children out 

of school, Nigeria has the 

highest population of out 

of school children (OOSC) 

in the world. 

United Capital lists funds on 

NSE to diversify investment 

United Capital Asset 

Management on Monday 

listed 2 billion units 

of United Capital Wealth for 

Women bond and 100,000 

units of United Capital Nigeria 

Eurobond Fund on The Nigerian 

Stock Exchange (NSE). 

The listing followed the 

successful completion of the 

bonds’ initial public offering, 

which achieved subscription 

level of 52.67 per cent, with 

over 111 units. 

The listing followed approval 

of the allotments for 

the bond by the Securities and 

Exchange Commission (SEC). 

The bond will remain open for 

subscription due to the openended 

structure of the fund. 

Jude Chiemeka, Managing 

Director of United Capital 

Asset Management Ltd., said 

the Eurobond Fund and the 

United Capital Wealth for 

Women Fund were to meet 

the diversified investment 

portfolio needs of indigenous 

and global clients. 

Chiemeka said that the 

two new funds would further 

solidify the company’s position 

as a market leader in the 

African investment banking 

space. 

He stated that the current 

economic challenges had 

altered investment interests 

in the market. 

He added that “we designed 

these new products 

specifically to suit the changing 

needs of our clients. 

“The two products would 

help in deepening the market 

and increase choice of investing 

in the Nigerian capital 

market.” 

Chiemeka explained that 

the other newly launched 

Fund, the United Capital 

Wealth for Women Fund, 

would encourage women to 

imbibe savings culture, provide 

an avenue for women to 

be financially independent. 

According to him, it will 

also create sustainable foundation 

for women’s financial 

empowerment and development 

in Nigeria. 

He said that a maximum of 

80 per cent of the fund’s assets 

would be invested primarily 

in naira denominated fixed 

income and high yielding 

instruments. 

Chiemeka added that 20 

per cent would be invested 

in “carefully selected quoted 

stocks on the exchange.” 

L-R: Oscar Onyema, President, African Securities Exchanges Association (ASEA), after signing a 

Memorandum of Understanding (MOU) with Paul Smith, President/CEO, CFA Institute to foster a better 

relationship between the two organisations at Nigerian Stock Exchange in Lagos.

14 

BUSINESS DAY 

COMPANIES & MARKETS 

Sterling Bank to encourage women 

to be self-conscious 

Sterling Bank Plc says its 

“One Woman” product 

is to encourage women to 

be self-conscious and embrace 

their inner beauty to meet 

financial, business and their 

personal needs in Nigeria. 

The bank made this known 

in a statement on Tuesday in 

Lagos during the launching of 

the product on how women 

should stop self-doubts and 

take care of themselves. 

It said that the product 

was designed to honour the 

legacies of women of the past, 

those who stood up for change 

Crunchies Fried Chicken 

(CFC) Limited, the leading 

fast food outlet in 

the South-East/South-South 

regions of Nigeria, has opened 

a new outlet in Aba, the commercial 

hub of Abia State. 

The outlet, situated at 

Abayi, along Aba-Owerri Road, 

brings to two, the firm’s outlets 

in the commercial city. 

Jude Nwosu, managing 

director, CFC Limited said that 

apart from providing good 

food, which Crunchies is 

known for, the facility, will also 

provide good ambiance for 

family recreation. 

“It is our policy to continue 

to expand, because for every 

outlet that we open, we reduce 

unemployment and we are 

happy doing this, even against 

all odds,” Nwosu said. 

“We all know that Nigeria 

is in recession right now, but 

we have continued to survive”. 

“Our philosophy in 

Crunchies is not only to provide 

good food for people, but 

also to provide employment 

and inspire others to take a 

cue from us and make Nigeria 

a better place”. 

He continued, “We decided 

to do something different, to 

expand our scope in different 

States, as it is usual with us. 

For its quality furnishing 

and interior decoration 

services, Rosemary’s, a 

soft furnishing firm with presence 

in Lagos and Abuja, has 

been recognised for quality 

as Africa’s Best-in-Class Furnishing 

and Interior Decoration 

Company of the Year 

at the 2017 African Brand 

Leadership Merit Awards. 

The award was presented 

to the company at the annual 

African Brand Congress programme 

held in Lagos recently. 

Speaking at the event, the 

Chief Executive Officer of 

Rosemary’s, Ezinne Kufre- 

Ekanem, said “despite keeping 

our doors open profitably 

for 14 unbroken years, we still 

feel as excited as if we are just 

and fought for the rights of 

women. 

The bank said that the 

product was also designed 

for women of the present who 

toiled night and day to support 

the family and those around 

the world who used their 

voices to help make the world 

a brighter place for women. 

“Under the One-Woman 

proposition, the bank has developed 

unique value propositions 

tailored specifically for 

women.” 

“The value proposition 

comprises an array of differ- 

“It is to show our confidence 

in the economy of those 

cities and also to show how 

grateful we are to our customers, 

who in the past years have 

supported our businesses in 

those areas, to say thank you 

and thereby bring our outlets 

closer to their doorsteps, to 

provide better service and 

quality products to our numerous 

customers. 

The intent of our expansion 

programme is to show our 

confidence in the economies 

of these areas, to remove from 

unemployment line, the young 

ones, who have just graduated 

from college and while we are 

doing that, also we mentor 

other businesses that they can 

invest in. 

Nwosu explained that 

Crunchies, will continue to 

provide excellent service and 

quality products to their numerous 

customers. 

“What we have done is 

to provide excellent service 

and better quality products 

and wider range of products 

to our numerous customers. 

Before now, we were doing 

the normal fast food business 

of rice and chicken and all that, 

but right now we have added 

the Chinese variation, because 

we have found out that in 

most areas where we play that 

customers will always ask for 

starting out in business. Every 

day, we meet new clients 

who challenge us with very 

interesting briefs and make us 

learn and stretch as we serve 

to make them home proud. 

The journey is only beginning 

for us at Rosemary’s”. 

She expressed gratitude 

to its long standing clientele 

and their continued referrals 

which has been the bedrock 

of the company’s sustained 

success despite the challenging 

operating environment 

for small and medium scale 

enterprise in the country. 

Kufre-Ekanem further 

thanked the organisers for 

the recognition and the staff 

of the company for their continued 

contribution to its 

daily drive in making African 

homes proud despite the 

ent value-added offerings to 

meet financial, business and 

personal needs of women 

in Nigeria and to foster support 

by providing platforms 

for women to support other 

women,” it said. 

The bank said that to this 

end, it would be powering 

women through the Sexually 

Confident Woman programme 

holding in Lagos 

this June. 

It said the programme 

would feature prominent 

women who would speak at 

the event. 

Crunchies opens new outlet in Aba 

GODFREY OFURUM, Aba 

simple things as “Spring Roll”, 

Chinese Rice and so on. 

So, we decided to bring it 

under one umbrella and make 

sure that our customers get 

this service in good time. 

Crunchies Fried Chicken 

Limited, was established in 

2002 in Aba, the commercial 

hub of Abia State, but opened 

its doors to customers in September 

2003, while Crunchies 

Plus, was inaugurated in December 

2014, with four outlets 

located in Asaba, Delta State, 

Uyo, the capital of Akwa Ibom 

State, Calabar in Cross Rivers 

State and Onitsha, the commercial 

hub of Anambra State. 

The fifth outlet located in 

Umuahia, the capital of Abia 

State, was inaugurated in 2015. 

The facilities provide a range of 

dishes, including Chinese cuisine. 

The firm currently has 16 

outlets in the South-South 

and South-East regions of the 

country, with Asaba, Calabar, 

Uyo and now Aba, topping 

with two outlets, each. 

According to Nwosu, “I can 

say thus far that we have been 

able to establish our brand, establish 

ourselves and I believe 

that customers in these regions 

have accepted our services and 

the confidence that they have 

built around us, is the reason, 

why we have been able to 

expand in such a fast manner”. 

Firm earns recognition as best-in-class for 

quality furnishing, interior decoration 

CHUKA UROKO 

difficult operating climate. 

Rosemary’s, a niche-focused, 

home comfort company established 

in 2003 specialises 

in interior design and soft 

furnishing with a deep belief 

in personal service. 

The company was also 

voted Nigeria’s ‘Most Creative 

Business at the SuccessDigest 

Enterprise Awards 2007’. 

In its notification and congratulatory 

message preceding 

the award, Desmond 

Esorougwe, Secretary of the 

African Brand Congress Organising 

Committee and 

Samaila Mande, Chairman, 

Technical Committee, said 

the 2017 award was earned on 

merit based on the technical 

committee’s research report 

on the interior decoration 

and furnishing industry. 

Business Event 

C002D5556 


L:R: Faith Irabor, special project executive, VAS2Nets Technologies Limited; Manager, James McNab, 

Basebone, and Samuel Madu , media and content manager, VAS2Nets Technologies Limited , at the 

2017 West Africa Mobile Awards where VAS2Nets won Innovation Award in Lagos recently. 

Bovi Ugboma (second right), Ace comedian / Glo ambassador, with Glo subscribers, from left, Dan Nwokedi, 

Ijeoma Egeonu, and James Udofia at the Benin edition of the ongoing Glo Laffta Fest in Edo State. 

L-R: Gbenga Kolawole, deputy marketing manager, Visibility & BTL, Tecno Mobile; Hamzat Quadris 

from Community Primary school Ilupeju; Alfred Ogar, coordinator, Talent Boom Initiative; Tom Divine 

from Ilupeju Primary School; Saliu Sakayawu from Majokolate Primary School and Attai Oguche, deputy 

marketing manager, Offline Events and Sponsorships, Tecno Mobile Nigeria, at the TECNO Foundation 

scholarship award ceremony for Public Primary school pupils, marking Children’s day celebration as part 

of the Foundation’s annual CSR initiatives in Lagos recently. 

L-R: Iroegbu Obiora, representing the general manager, Nigerian Content Development, Chevron Nigeria 

Limited; Prince Nwosa, project controls manager, Hyundai Heavy Industries Company (HHI); Akpelu Paul 

Kelechi, graduating trainee, project management training; Adike Kopiam, monitoring supervisor, Nigerian 

Content Development and Monitoring Board (NCDMB) with Giorgio Macchiavello, managing director, 

Dorman Long Engineering Limited, during the Human Capacity Development Initiative Training (HCDIT) 

Stream 1 Close- Out Ceremony which was executed by Dorman Long Engineering Limited, facilitated by 

NCDMB and Chevron Nigeria Limited, sponsored by HHI at Dorman Long Engineering Idi-Oro, Lagos.

Thursday 22 June 2017 C002D5556 

BUSINESS DAY 15 

L-R: Ololade Oyeniyi, customer support partner, MTN Nigeria; Gambo Audu, regional security manager North, MTN Nigeria; Ismaila 

Mohammed, vice chairman, Guruku IDP; Salih Salid, secretary, Guruku IDP, and Zainab Abdul, customer relations officer, MTN Nigeria, at 

the donation of relief materials to the Guruku Internally Displaced Persons (IDP) in Nassarawa State. 

Forte Oil mulls N20 bln share sale 

BUNMI BANJO 

Nigeria’s Forte 

Oil Plc plans 

a 20 billion 

naira ($66 

million) 

share sale to institutional 

and high net worth investors 

and has applied for 

regulatory approval, the 

company said on Monday. 

Nigerian companies 

are going through a tough 

time brought on by low oil 

prices which tipped the 

economy into a recession, 

depleted the country’s 

foreign reserves, weakened 

the currency and 

caused chronic dollar 

shortages, frustrating 

businesses. 

The energy firm said 

The Africa Leadership 

Initiative – West 

Africa (ALIWA) in 

partnership with the Aspen 

Global Leadership 

Network (AGLN) has announced 

the graduation of 

her 5th class in ten years. 

The Africa Leadership 

Initiative West Africa is a 

program aimed at raising 

a new breed of community 

spirited leaders who have 

achieved notable success 

in their fields – to tackle 

the core developmental 

needs of our country. 

The recently graduated 

fellows were nominated 

through a rigorous selection 

process based on their 

track-record of compelling 

achievements and 

participated in a two-year 

long class comprising of 

four residential seminars. 

During this time, they each 

had to commit to carrying 

out a high-impact Leadership 

Venture of their own 

choosing — vetted and 

approved by their peers. 

Of the initial 25 Ghanaians 

and Nigerians that 

registered at the beginning 

of the 2015-2017 

session, 17 Fellows graduated; 

10 of whom are 

Nigerians. The class was 

named ‘Karfi Kuo’ meaning 

‘Group of Strength’ 

which originated from the 

Hausa (Nigeria) and the 

Twi (Ghana) dialects. 

The graduation of the 

‘Karfi Kuo’ class took place 

at the historic Aburi region 

in Ghana. The Nigerian 

Fellows of the class 

are: Ayisha Osori; Conthe 

capital raising exercise 

will be done through 

public offer for shares in a 

book-building process to 

help price discovery. 

In an email to Reuters, 

Forte oil said its core investor, 

Zenon Petroleum and 

Gas Limited, owned by billionaire 

Femi Otedola, with 

a total stake of 78.08 percent 

in the company, will not 

participate in the offer. 

Several firms including 

Guinness Nigeria, reported 

losses last year due 

to the weak economy, and 

are set to raise funds from 

existing shareholders. 

In 2016, Forte posted 

a 24 percent fall in pretax 

profit, which knocked it 

shares down 74.4 percent. 

This year, the shares 

have fallen 34.2 percent, 

ALIWA announces graduation of 17 new fellows 

FRANK UZUEGBUNAM 

giving it a market value 

of 68.8 billion naira ($226 

mln). It ended 4.98 percent 

down to 52.81 naira on 

Monday, underperforming 

the main index which 

gained 0.96 percent. 

On Monday Forte said 

it was on track to achieve 

its target for 2017 and that 

based on its performance 

so far it could payout half 

of its earnings as dividend. 

It said its fuel distribution 

and power business 

accounted for 95 percent of 

its operating profit and that 

it hoped to announce its 

half-year audited account 

before July 31. 

“The outlook remains 

positive on the back of the 

renewed peace in the Niger 

Delta, while the passing 

of the (oil industry gov- 

sultant, Founder of Advocates 

for Change & Social 

Justice, and former 

Chief Executive Officer 

of the Nigerian Women’s 

Trust Fund; Ayodeji Adewunmi; 

President and 

Chief Executive Officer of 

Jobberman; Clare Omatseye; 

Founder and Managing 

Director of JNC International 

Nigeria Ltd; Kelechi 

Ohiri; Chief Executive 

Officer, Health Strategy 

and Delivery Foundation 

(HSDF); Mohammed Abu 

Ibrahim; Chief Executive 

Officer, Environmental 

Management & Dev. Systems 

; Muhammad Sani 

Abdullahi; Commissioner, 

Budget and Planning, Kaduna 

State, Nigeria; Olaniyi 

Yusuf; Managing Director 

of Accenture Nigeria; Sanyade 

Okoli; Chief Executive 


ernance bill) by the Senate 

is another positive,” it said. 

Last year the energy 

firm planned to raise 100 

billion naira in debt or 

equity for expansion. It 

later sold 9 billion naira in 

five-year bonds. 

Nigeria’s IPO market 

has dried up for almost a 

decade following a stock 

market crisis with regulators 

struggling to revive 

it. In March, the SEC proposed 

to cut listing fees to 

attract issuers. 

Last year, stocks shed 

40 percent in dollar terms 

after the naira fell by a 

third due to central bank’s 

currency curbs. This year, 

stocks have recovered after 

the bank in April allowed 

investors to trade 

the naira at market rates. 

Officer, Alpha African Advisory 

Limited; Tokunboh 

George-Taylor; Managing 

Director of Hill+Knowlton 

Strategies Nigeria; Waziri 

Adio; Executive Secretary, 

Nigeria Extractive Industries 

Transparency Initiative 

(NEITI) 

ALIWA has successfully 

graduated 87 Fellows 

from West Africa, 

39 of who are Nigerians 

that have passed through 

the fellowship program 

over ten years. These 

Fellows join the Aspen 

Global Leadership Network 

(AGLN), a growing, 

worldwide community of 

entrepreneurial leaders 

from business, government 

and the non-profit 

sector — currently more 

than 2,400 “Fellows” from 

over 50 countries. 

Aviation group launches 

drone services in Lagos, 

Jo’Burg, Cape Town 

MIKE OCHONMA 

Worldwide business 

aviation 

company Execu- 

Jet has announced that it 

has added unmanned air 

vehicle (UAV) services to 

its activities at its African 

bases in Lagos, Johannesburg 

and Cape Town. 

With this move, ExecuJet 

sources says the 

company will, however, 

be able to deploy UAVs to 

any place in the continent, 

to meet customers’ needs. 

According to Gavin Kiggen, 

ExecuJet Aviation Africa 

director, “UAVs can be 

used in various ways, from 

wind turbine inspections 

and crop monitoring, to 

covering sporting events 

and filming for television 

and movies. Industry experts 

believe that Africa is 

one of the most progressive 

regions when it comes 

to drone technology.” He 

Heritage Bank grows 400 

agent banking outlets 

…Expands to Badagry 

HOPE MOSES-ASHIKE 

In its resolve to meet the 

financial needs of the 

alarming number of market 

women, artisans and 

underserved population 

who are unbanked, Heritage 

Bank Plc has deepen its retail 

banking structure by growing 

its agent banking base to 400 

‘Corner Shops.’ 

This is in line with the financial 

inclusion strategy of the 

Central Bank of Nigeria, as Heritage 

Bank Plc launches agent 

banking services at the coastal 

town of Badagry in Lagos State. 

The bank, over the weekend, 

commissioned an agent, Thy 

Grace, to provide a range of 

financial services to customers 

in the neighbourhood of 

Mowo under the Badagry Local 

Government. 

Ifie Sekibo, managing director/CEO, 

Heritage Bank 

explained that the bank has 

continued to set standard in the 

launching of ‘Corner Shop’ to 

cater for the need of traders and 

artisans at different locations 

across the country. 

According to him, the shop 

is aimed at giving the unbanked, 

especially in the rural areas the 

opportunity to enjoy financial 

services without the risk and 

stress of walking kilometres in 

order to visit a bank branch. 

However, speaking at the 

commissioning in Badagry, 

the Zonal Business Coordinator, 

South-West, South-South, 

Agent Banking, Heritage Bank, 

Oluwakemi Adewunmi, described 

the feat as a major 

breakthrough that would relieve 

the people living in the 

noted. 

UAVs include surveying 

and mapping even 

as the company will be 

providing the necessary 

training to its staff, through 

its South African Civil Aviation 

Authority-certified 

partner, to ensure that 

they can execute customer 

requirements efficiently 

and safely. 

“The market for drone 

technology in the commercial 

sector has been 

increasing in recent years 

and is expected to grow 

at a rate of over 19 per 

cent between 2017 and 

2020, as the technology becomes 

more widely used,” 

he highlighted. 

ExecuJet operates in the 

Asia-Pacific, Caribbean, 

Europe, the Middle East 

and Latin America as well 

as in Africa. It manages 165 

business jets around the 

world and has more than 

1,000 employees. 

Ikogazebbe community of the 

stress they hitherto faced in 

transacting banking services. 

She said with the new Agent 

commissioned to represent 

Heritage Bank in the locality, 

banking services would no longer 

constitute a headache, but 

rather would be stress-free for 

all categories of bank customers. 

According to her, anybody 

can benefit from the services 

of the agent whether you are 

a customer to Heritage Bank 

or another bank. Adewunmi 

explained that customers can 

open bank account, deposit 

cash, transfer money even to 

other banks and also pay bills. 

In view of the peculiarity of the 

community, she disclosed that 

the agent deploys mobile POS; 

adding that the device would 

make the agent make banking 

services available at the doorsteps 

of customers. 

With the inclusion of Thy 

Grace, she said Heritage Bank 

now boasts of about 400 agents 

it has established in different 

parts of the country. She commended 

the agents for their 

commitment over the past 

two years that Heritage Bank’s 

campaign for financial inclusion 

started. 

Her words: “The level of 

their loyalty is very high and 

commendable. Our agents 

maintain a clean record and 

they have been effective.” 

In his remarks after receiving 

the Certificate of Authorisation 

to carry out agent banking 

on behalf of Heritage Bank, 

Hunyingan Pius Mifrinso, promoter 

of Thy Grace, commended 

the bank for the approval 

given to him.

16 



I 

NVESTO 

Helping you to build wealth & make wise decisions 

R 

C002D5556 

In association with 

BUSINESS DAY 

17 

Week open (09 – 06–17) 

Week close (16 – 06–17) 

Percentage change (WoW) 

NSE All Share Index 

33,276.68 

33,810.56 

Percentage change (YTD) 25.81 33.58 

NSE Premium Index The NSE-Main Board 

Market capitalisation 

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

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

1.60 

N11.504 trillion 

N11.692 trillion 

2,231.99 

2,264.91 

1.47 

1,490.16 

1,515.26 

1.68 

1,174.72 

1,171.01 

-0.32% 

1,512.35 

1,546.79 

25.87 -1.57% 29.42% 

394.94 

414.65 

126.29 

140.75 

145.77 

712.65 

806.05 

810.15 

2.28% 4.99% 3.57% 0.51% 

312.68 

345.42 

330.91 

-4.20% 

51.16% 15.42% 13.68% 5.83% 

Five stocks exceed 100% in YtD gain 

…as investors record over N2.6trn value increase 

Stories by IHEANYI NWACHUKWU 

Investors in five listed 

companies –May & 

Baker Nigeria Plc, Fidson 

Healthcare Plc, Cement 

Company of Northern 

Nigeria Plc, Stanbic IBTC 

Holdings Plc, and Transnational 

Corporation of Nigeria Plc –have 

recorded impressive growth in 

their stocks prices. 

Their year-to-date (Ytd) price 

change shows growth in excess of 

100percent. This remarkable feat 

also comes on the heels of over 

N2.6trillion Ytd value increase 

recorded by investors in listed 

Nigerian equities. 

May & Baker Nigeria Plc is 

the best performing stock on the 

Nigerian bourse this year with a 

record 487.2percent increase to 

N5.52. 

In addition to the 

aforementioned companies, 

other stocks that have impressed 

investors as it relates to their price 

increase this year are: Access 

Bank Plc, Airline Services & 

Logistics Plc, Beta Glass Plc, FBN 

Holdings Plc, Fidelity Bank Plc, 

Flourmills Nigeria Plc, Oando 

Plc, International Breweries Plc, 

Okomu Oil Palm Plc, Presco Plc, 

PZ Cussons Nigeria Plc, Skye 

Bank Plc, and United Bank for 

Africa Plc. All these stocks have 

exceeded 50percent price gain 

year-to-date. 

A look at the Ytd performance 

of some of these stocks as at 

Tuesday revealed that investors in 

Access Bank Plc shares with price 

at N9.79 have gained 66.8percent 

this year. Also, Air Service & 

Logistics Plc rallied by 80.8percent 

Ytd to N4.52; Beta Glass Plc 

at N52.17 gained 72.1percent 

already; Cement Company of 

Northern Nigeria Plc recorded 

Ytd increase by 114.8percent to 

N10.74; FBN Holdings Plc has 

risen by 99.1percent this year to 

N6.67; while Fidelity Bank Plc 

share price has risen by 56percent 

this year to N1.31. 

Further check shows that 

the share price of Fidson 

Healthcare Plc at N3.14 has 

risen by 145.3percent this year; 

Flourmills Nigeria Plc at N29.5 

has increased by 59.5percent in 

2017; International Breweries 

Plc also rose by 65.7percent to 

N30.65. 

Okomu Oil Palm Plc has 

achieved 74.7percent growth 

in its share price this year to 

N70.18; Oando Plc at N7.65 

has increased this year by 

N62.8percent; Presco Plc at N76 

has increased by 89.5percent 

Ytd; PZ Cussons Nigeria Plc 

share price at N22 grew by 

51.7percent this year. 

Also, Skye Bank Plc which 

grew by 60percent this year 

stood Tuesday at 80kobo; 

Stanbic IBTC Holdings Plc at 

N32.9 has increased this year 

by 119.3percent; Transcorp Plc 

at N1.76 grew by 102.3percent; 

while UBA Plc at N8.85 has 

achieved 96.7percent growth 

this year. 

The bull situation at the stock 

market is evidence that many 

investors have responded to 

positives in the macro-economy. 

Also, recent and emerging 

fundamentals of quoted 

companies have continued to 

show strong performance, giving 

investors the reassurance of good 

returns on investments even as 

Nigerian economy nears exit of 

recession. 

Interestingly, the Nigerian 

Stock Exchange (NSE) All Share 

Index (ASI) which opened at 

26,874.62 points rose to 34,375.60 

points Tuesday indicating Ytd 

return of 27.91percent, while the 

value of listed Nigerian stocks 

rose from year-open level of 

N9.246trillion to N11.887trillion. 

NSE Lotus II 

1,841.59 

2,127.89 

2,112.81 

-0.71% 

14.73% 

NSE Ind. Goods Index 

2,176.44 

2,001.22 

1,995.59 

-0.28% 

25.09% 

NSE Pension Index 

810.04 

1,188.17 

1,214.68 

2.23% 

49.95% 

FBNQuest research 

sees decent growth 

posted by PFAs 

Th e assets under 

management (AUM) of 

the regulated Nigerian 

pension industry 

increased by 21.1percent year-onyear 

(y/y) in April to N6.49trillion 

($21.2bn). 

“This is a decent annual 

increase when we allow for the 

arrears in pension (and salary) 

payments to employees of state 

governments and public agencies 

that emerged in the campaigning 

for the elections in 2015. 

“It would appear that the 

FGN’s several initiatives to bolster 

state government finances have 

made an impact. Certainly the 

monthly distributions by the 

Federation Account Allocation 

Committee have not picked up,” 

said FBNQuest research in their 

recent note. 

“Holdings of FGN paper 

amounted to 71.4percent of 

AUM in April, compared with 

67.5percent one year earlier. We 

can see a sharper rise in positions 

in Nigerian Treasury Bills (NTBs), 

to 15.7percent from 8.6percent. 

The pension funds have a 

particular interest in the long 

bonds for matching purposes. 

More generally, they may feel that 

they had been missing out in the 

NTBs market, where the CBN has 

been setting the stop rates at more 

than 22percent since August at 

primary auction and open market 

operations (OMO).” 

“The industry’s holdings of FGN 

bonds at end-March represented 

45.7percent of the stock of the 

paper. The data does not capture 

the recent surge on the stock 

market, to which offshore investors 

have returned with new money (in 

addition to recycled dividends) 

and some domestic institutions 

have followed their lead. 

“The share of domestic 

equities in AUM actually declined 

to 7.4percent in April from 

8.7percent one year earlier. We 

welcome the timely monthly 

data releases from PenCom. 

We would welcome even more 

independent industry analysis 

allowing investors to compare 

the performance of the pension 

funds,” FBNQuest research stated.


C002D5556 


I NVESTOR 


Equities Investment: Risk and Rewards (Part 1) 

Understanding Equities 

Investments 

Equities investment 

stemmed from the 

need for businesses 

to raise capital to 

meet current 

funding requirements or 

funding growth plans. The 

organization raises equity 

capital from investors in 

exchange for ownership of 

shares in its business. The 

alternative to equity capital 

is for companies to borrow, 

either directly as a loan from 

a bank, or by issuing debt, 

known as bonds. 

In simple investor 

terms, Equities also known 

as “stocks” or “shares” are 

units of a company which 

basically implies the fractional 

ownership interest in that 

business or corporation 

thus making the investors 

stockholders or shareholders. 

Ownership is measured by 

the number of shares the 

investor holds as investment. 

This represents a claim on the 

company’s assets and earnings. 

Equities are classed as 

growth assets as they are 

essentially linked to the 

revenue of the company’s 

business. They appeal to 

investor classes- retail 

and institutional investors 

because they offer attractive 

income opportunities and 

exposure to a broad range 

of industries and sectors 

that provide growth and 

diversity within an investment 

portfolio. Shareholders 

receive proportionate 

benefit from the business’ 

profit distributions– called 

dividends or capital gains 

and or increase in share 

price. Equities investment 

also entitles the shareholder 

to the firm’s assets in the case 

of liquidation as well as offers 

the right to vote in members 

of the board of directors and 

other important decisions 

facing the company. Some 

investors consider equities 

investment as a long-term 

strategy to maximize wealth. 

Shares may be bought and 

sold among stockholders in 

response to changes in market 

price. Existing shareholders 

can exit their investments 

by selling shares to others. 

Whilst buying increases 

share ownership, selling 

liquidates investment and 

share ownership. 

Types of Equities 

Investments 

Equities Investments fall 

into two main categories – 

Ordinary or Preference: 

•Ordinary or Common 

shareholders represent 

the majority of shares held 

by investors. Ordinary 

shareholders usually have 

one vote per share that entitles 

participation in the election 

of the board of directors. 

Ordinary shareholders can 

earn dividends which can 

increase as the company 

grows but payment is not 

guaranteed. In the event of 

liquidation, they also have 

rights to any assets remaining 

after all other claims are paid. 

•Preference shares have 

fewer rights than ordinary 

shares, except in the payment 

of dividends. Preference 

shareholders earn specific 

dividend on a regular basis 

and have first call on the 

companies’ dividends. In 

the event that a company 

is liquidated, preference 

shareholders have prior 

claim to assets over ordinary 

shareholders. Preference 

shareholders do not hold 

voting rights; thus no power 

in decision-making 

Other types of Equities 

investments are Warrants and 

Depositary Receipts. 

Benefits of Equities 

Investment 

•Capital Appreciation: As a 

company grows & earns profit, 

it usually chooses to reinvest 

the profit to grow through 

increasing market share and 

product development. With 

the increasing growth of the 

company, the market price of 

the stock increases, leading 

to capital appreciation for the 

investors. Capital appreciation 

is a primary benefit of equities 

investments. 

•Dividend: Certain 

companies pay out regular 

dividends to investors. 

Investing in such companies 

may therefore guarantee an 

investor a stream of regular 

income in the form of dividends. 

Paying dividends also offers 

a good way for companies to 

communicate their financial 

stability and profitability to the 

corporate sphere. 

•Liquidity: Stocks are 

traded daily based on 

prevailing market price. This 

makes them a highly liquid 

investment. This means that 

an investor can sell their 

stocks whenever they want 

to. Trading and settlement of 

stocks takes a few days to settle, 

depending on the market. 

•Diversified Portfolio: 

Equities investments allow 

for diversification and small 

scale investment. An investor 

can therefore buy stocks 

of different companies at 

different times in different 

economic sectors. If the 

price of a stock drops at the 

exchange, other stocks can 

make up for the loss. 

•Limited liability: One 

of the unique features of 

owning equities is the notion 

of limited liability. Despite 

owning fractional shares in 

a company, creditors of the 

business can’t come after 

investor’s personal assets 

in the event of lawsuit/ 

settlement/liquidation. This is 

because shareholder’s liability 

is limited to the amount 

invested in the company. 

Corporate control: Equities 

come with certain rights 

including the voting rights 

to which the investors are 

entitled. The level of corporate 

control depends on whether 

the equity is common or 

preferred and on the size of 

your shareholding. 

Risk of Equities 

Investment 

•Economic risk: The 

economy of a country 

plays a major part in the 

performance of the capital 

market. The economic 

risk includes growth of the 

country, inflation, interest 

rates, balance of payment, 

current and capital account 

deficit, among others. A 

good example is the Nigerian 

recession of 2016 and the 

negative effect on stock prices 

of listed companies. 

•Industry risk: Industry 

risk refers to risks faced by 

the companies due to the 

sector they operate in. Apart 

from rare instances, these 

set of factors particular to 

an industry group will drag 

down the industry’s overall 

performance. For example 

a tax increase in the cement 

industry may adversely affect 

the profits of the cement 

producers due to the sharp 

decline in the sales volume. 

•Performance risks: A 

company’s fundamentals is 

largely dependent on how it 

handles its financial activities 

like borrowing, working 

capital management, interest 

payments, and receivables. If 

a company is highly leveraged, 

there could be chances that 

the company may not meet its 

outstanding liabilities and can 

go bankrupt. Best investments 

target companies with strong 

fundamentals and future 

growth prospects that are likely 

to outperform the market. 

•Currency risks: Where a 

company operates in different 

markets, it will be dependent 

on deriving revenues from 

outside the country. Any 

fluctuations in currency will 

directly impact the company’s 

profit and shares. The foreign 

exchange crisis in Nigeria 

which began in 2015, affected 

both multinationals in Nigeria 

and foreign portfolio investors 

trying to exit the market. 

To be continued next week 

Investor’s Square 

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

other capital market operators? 

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

E-mail: investor@businessdayonline.com 

Africa investor index 

Company Ticker Sector Country Price Price MKT P/E Shares 

US$ Chan. on Cap in issue 

the week SMn Mn. 

SAB Miller SAB SJ Beverages South Africa 60.77 -1.1% 97,877.54 34.8 1,610.64 

Anglo American AGL SJ Mining South Africa 12.97 -3.8% 16,578.53 -7.9 1,278.50 

Sasol SOL SJ Oil & gas South Africa 29.66 -2.7% 19,319.92 9.2 651.39 

MTN Group MTN SJ Telecommunications South Africa 9.02 -2.5% 16,210.07 15.8 1,797.23 

Standard Bank SBK SJ Banking & finance South Africa 11.36 -4.5% 18,144.09 10.7 1,596.58 

Anglo Platinum AMS SJ Mining South Africa 21.79 -4.3% 5,846.53 118.8 268.30 

ANGLOGOLD ASHANTI LTD ANG SJ Mining South Africa 11.05 -4.8% 4,512.01 -94.8 408.22 

Tullow Oil plc TLW GN Oil & gas Ghana 4.16 1.0% 3,791.49 381.7 911.38 

Maroc Telecom IAM MC Telecommunications Morocco 13.73 1.0% 12,067.70 20.2 879.10 

DANGOTE CEMENT PLC DANG NL Building Materials Nigeria 0.62 16.8% 10,531.89 15.5 17,040.51 

Orascom Construction OCIC EY Construction Egypt 12.06 0.2% 2,495.10 74.0 206.92 

Attijariwafa Bank ATW MC Banking & finance Morocco 44.40 1.5% 9,037.61 16.2 203.53 

Nigerian Breweries NB NL Breweries Nigeria 0.98 11.4% 7,385.83 28.4 7,562.56 

Banque Marocaine du Commerce BCE MC Banking & finance Morocco 20.66 0.1% 3,707.40 15.9 179.46 

Telecom Egypt ETEL EY Telecommunications Egypt 0.58 0.4% 988.19 7.6 1,707.07 

VODAFONE EGYPT VODE EY Telecommunications Egypt 3.44 0.2% 825.07 6.1 240.00 

Banque Centralw Populaire BCP MC Banks Morocco 27.99 -0.6% 4,006.41 18.7 182.30 

Lafarge LAC MC Building materials Morocco 215.05 -3.1% 5,038.95 24.3 23.43 

Douja Prom Addoha ADH MC Real Estate Morocco 4.90 0.6% 1,579.24 13.5 322.56 

Sonatel Sn SNTS BC Telecommunications Brvm 39.55 0.5% 3,954.69 12.4 100.00 

Guaranty Trust Bank GUARANTY NL Banking & finance Nigeria 0.11 -2.7% 3,205.61 7.9 29,431.18 

Zenith Bank ZENITH NL Banking & finance Nigeria 0.06 5.5% 2,010.56 5.3 31,396.49 

CGI CGI MC Real Estate Morocco 43.68 0.1% 804.00 14.4 18.41 

Guinness Nigeria PLC GUINNES NL Beverages Nigeria 0.23 5.3% 372.09 -41.7 1,591.13 

Commercial International Bank CIB EY Banks Egypt 4.65 6.0% 5,363.44 15.9 1,153.87 

First Bank FIRSTBAN NL Banks Nigeria 0.02 32.5% 738.23 3.6 35,895.00 

Abu Kir Fertilizers ABUK EY Chemicals Egypt 13.34 9.5% 1,121.88 9.9 84.13 

East African Breweries EABL KN Breweries Kenya 2.36 0.4% 1,869.52 24.8 790.77 

Safaricom Ltd SAFCOM KN Telecommunications Kenya 0.22 3.5% 8,880.10 18.1 40,065.43 

Mauritius Comm. Bank MCB MP Banking & finance Mauritius 6.43 0.1% 1,532.50 7.5 238.19 

Mobinil EMOB EY Telecommunications Egypt 5.03 -4.3% 502.53 - 100.00 

T M G HOLDING TMGH EY Real Estate Egypt 0.44 3.1% 903.93 17.9 2,063.56 

Poulina Group Holding PGH TU Holding Companies-Divers Tunisia 3.29 -0.1% 592.14 14.1 180.00 

Ecobank Transnational Inc ETIT BC Banks Brvm 0.03 0.1% 491.59 2.0 15,952.70 

STANBIC IBTC BANK PLC IBTCCB NL Banks Nigeria 0.09 1.1% 864.94 8.1 10,000.00 

State Bank Mauritius SBM MP Banking & finance Mauritius 0.03 0.1% 983.34 11.2 31,000.00 

Barclays Bank Kenya BCBL KN Banking & finance Kenya 0.09 4.7% 481.58 7.1 5,432.00 

Banque De Tunisie BT TU Banking & finance Tunisia 3.20 -0.1% 480.42 13.1 150.00 

Equity Bank Limited EQBNK KN Banking & finance Kenya 0.39 3.3% 1,459.05 9.2 3,773.67 

Kenya Comm. Bank Ltd KNCB KN Banking & finance Kenya 0.39 2.6% 1,192.01 6.3 3,025.21 

Africa investor Ai40 Weekly Commentary – 12 June 2017 

South African mining and 

a mix of banking equities 

tracked by the Ai40 

Investor’s Index led the gains 

last week. Notably, JSE-listed 

miners notched an impressive 

performance after falling into 

the Biggest Losers category in 

the last review. Despite this, the 

Index continued to slip as it fell 

by another 0.19 points from last 

week’s value of 95.16, to close 

Friday at a value of 94.97. 

In the US, stock markets 

were mixed at the end of 

last week as the Dow closed 

Friday at a record high while 

the Nasdaq posted its worst 

weekly performance of 2017. 

The Nasdaq – which is a techheavy 

index – was pulled down 

by almost 2% due to an abrupt 

drop in tech stocks. In the 

absence of fundamental or 

technical reasons for the selloff, 

Market Watch attributed 

capital outflows to “simple 

profit-taking [and] a rotation 

to other names.” In Europe, 

drama unfolded in the UK 

election last week as Prime 

Minister Theresa May’s ruling 

party lost a majority and in 

the aftermath; the pound fell 

to a two-month low in erratic 

trade. In oil markets, news 

of increasing US inventories 

renewed investor scepticism 

about the OPEC’s ability to 

rebalance markets via output 

cuts. A barrel of Brent was 

trading at $48.15 while “US West 

Texas Intermediate was up 0.5 

per cent in late trade at $45.88” 

according to Financial Times. 

At Friday’s close, the Dow 

Jones Industrial Average rose 

by 0.42%, or 89.44 points, 

to close the week at a new 

high of 21,271.97. The Nasdaq 

Composite Index fell by 1.8%, 

or 113.85 points, to end the 

week at a value of 6,207.92, 

while the S&P 500 was down 

marginally by 0.08%, or 2.02 

points, to close Friday on a 

value of 2,431.77. According to 

Investopedia, global markets 

recorded mixed performances 

as “Japan’s Nikkei 225 fell 

0.83%; Germany’s DAX 30 fell 

0.06%; and, Britain’s FTSE 100 

fell 0.32%.” 

Gainers 

JSE-listed mining firms 

and various banks tracked 

by the Index dominated 

the Gainers List last week. 

Coming from the very bottom 

of the heap to the top spot, 

AngloGold Ashanti was up by 

9.8% last week. Stock for Anglo 

American fared similarly well 

with a 6.8% gain. Gold bullion 

prices neared the $1300 mark 

last week and naturally, gold 

miners on the Index saw an 

increase in share value. As a 

safe haven asset, gold enjoyed 

gains due to “rising political 

worries and some weak U.S. 

economic data” according to 

Barron’s. 

Financial stocks also 

performed fairly well last 

week, as shares for First Bank 

were up 7.5% while Banque 

Centrale Populaire of Morocco 

gained 6.8% and stock for 

Barclays Bank Kenya rose by 

6.6% 

Losers 

Brvm-listed Ecobank 

Transnational was the worstperforming 

stock on the Index 

last week with a decrease 

in value of 5.5%. This was 

followed closely by Lafarge as 

the building materials stock 

was down 5.4%. Still in North 

Africa, shares for Cairo-listed 

Abu Qir Fertilizers fell by 4.4%. 

Stocks for Nigerian 

Breweries and Sasol were 

down 3.9% and 3.2% 

respectively. 

For more on the Ai40 Index, 

please visit the Africa investor 

website at www.africainvestor. 

com.


BUSINESS DAY19 

I R 

United Capital investment views 

The Bulls hold on to the baton 

NVESTO 


Investors raise equity stake in 

cost-pressured Julius Berger 

Last week, the Nigerian 

equity market managed 

to shake off what started 

as a bearish week, thanks 

to a sharp mid-week rally which 

helped offset earlier profitbooking. 

As such, the domestic bourse 

was able to sustain a w/w uptrend 

in the week ended 16th June, 

as the All Share Index (ASI) 

advanced +1.6percent week-onweek 

(w/w) to settle at 33,810.56 

points. 

YTD return increased 

to +25.8% even as market 

capitalization advanced 

N187.9bn to N11.7bn. Opening 

this past week, the system 

liquidity was extremely tight on 

the back of naira settlement for 

FX sales, coupled with OMO 

issuance which moderated 

system liquidity by N5.3bn. 

This was apparent in the 

money market (MM) rates as 

the OBB and ON rates surged 

99.0% and 108.2%, to settle 

at 116.7% and 126.6% in that 

order on Monday. Despite the 

provision of funding for PMA 

which held mid-week, rates 

declined further to close the 

session at 16.3% (OBB) and 

17.3% (ON). MM rates trended 

in line with liquidity dynamics 

on Thursday, OBB (6.3%) and ON 

(6.8%) rates shrunk 10.0% apiece 

amid N358.3bn maturity which 

hit the system. 

Closing the week, MM rates 

settled at 15.2% and 15.7% (OBB 

and ON) respectively, down 

14.2% and 15.1% w/w. Going 

into the new week, we expect 

the ASI to sustain uptrend as 

genuine interest in Nigerian 

equities by FPIs continues to 

dwarf sell pressure from profit 

takers. We see a mixed close 

for the FI markets this week, as 

investors digest the implication 

of the May headline inflation 

figure which came in lower as 

expected. This in our view clearly 

buttresses the expectation of 

marginal downward trend in 

yield. That being said, expected 

stringency in the money market 

on the back of FX intervention as 

well as OMO issuance presents 

some downside. 

Domestic Economic & 

Financial Markets Review and 

Outlook 

Investor optimism in 

Nigeria lingers amid pressure 

on oil prices 

Despite output cap extension 

by OPEC members in May-17, 

global oil prices continued 

downbeat as inventory level 

stays stubbornly high. Libya 

restored production on 

Thursday (15/06/17) after 

output disruptions by armed 

factions at the country’s Sharara 

and Wafa oil fields earlier in 

the year, reduced production 

by 252,000b/d. This came just 

a week after Nigeria lifted force 

majeure on its Forcados oil 

terminal, adding 250,000b/d to 

its output level. We recall that 

Libya and Nigeria (both OPEC 

members) were both exempted 

from the output cap agreement 

by OPEC in December-16 and 

May-17 due to production 

disruptions. However, a rebound 

in local production level from 

both producers will add 0.5mb/d 

...ASI ends ‘skirmish week’ on front foot …as company diversifies into Oil & Gas sector 

to global output. 

Expectedly, oil prices touched 

7month low in the prior week 

tumbling 17.4% YTD and 

settled at $47.3/b on Friday. 

Increasing inventory level from 

US shale producers has kept 

prices under pressure so far in 

Q2:2017, offsetting gains from 

OPEC’s output deal reached 

in December 2016 and May 

2017. Yet, supply from new non- 

OPEC members is expected to 

keep the market flooded with 

crude oil into 2018 according 

to the International Energy 

Agency (IEA) which noted on 

Wednesday (14/06/2017) that 

supplies from these new entrants 

will more than meet expansion in 

demand for crude. 

Notwithstanding the above, 

recent optimism in the Nigerian 

economy was buoyed by 

additional positive headlines 

during the week. Last Monday, 

the Acting President signed the 

2017 budget into law, ending the 

prolonged period of delay in the 

passage of the N7.3tn pro-growth 

spending plan. Also, the CBN 

noted that the total transaction 

volume at the Investors & 

Exporters (I&E) window in the 

last 6 weeks settled at $2.2bn, 

as investor confidence in the 

Nigerian economy strengthens. 

On Thursday, the National 

Bureau of Statistics (NBS) stated 

that headline inflation rate 

had moderated from17.2% in 

April-17 to 16.3% in May-17 

driven by core and imported 

food items although food prices 

stay elevated. While we maintain 

our position that the Nigerian 

economy is set for a rebound 

by Q2:2017, we caution that 

sustained pressure on global oil 

prices remains a threat to the 

improving economic outlook of 

the country. 

Equities: ASI on a 24-month 

high 

Financials [Banking (+5.5%) 

& Insurance (+5.2%)] and 

Consumer Goods (+1.3%) tickers 

enjoyed investors patronage in 

stocks like ZENITH (+10.6%), ETI 

(+13.2%), GUARANTY (+6.7%), 

STANBIC (+6.9%), MANSARD 

(+12.1%) and NB (+5.1%). On 

the flip side, the Oil & Gas sector 

index depreciated w/w, as 

investors took profit in FO (-13.6), 

SEPLAT (-1.8%), TOTAL (-3.9%) 

and MOBIL (-7.6%). 

Investor sentiment, 

measured by market breadth, 

however ended below unity 

at 0.9x (relative to 3.8x in the 

previous week) as 26 stocks 

advanced against 29 decliners. 

Activity level also closed the week 

mixed as average value traded 

inched higher by +9.8% w/w to 

N6.4bn while average volume 

traded edged lower by -11.7% 

w/w to 547.4m units. Going into 

the new week, we expect the ASI 

to sustain uptrend as genuine 

interest in Nigerian equities 

by FPIs continues to dwarf sell 

pressure from profit takers. 

Money Market: MM rates 

close at 15.2% (OBB) and 15.7% 

(ON) 

Opening this past week, the 

system liquidity was extremely 

tight on the back of naira 

settlement for FX sales, coupled 

with OMO issuance which 

moderated system liquidity by 

N5.3bn. This was apparent in the 

money market (MM) rates as the 

OBB and ON rates surged 99.0% 

and 108.2%, to settle at 116.7% 

and 126.6% in that order on 

Monday. In the second trading 

session of the week, dealers’ 

expectation of possible naira 

refund to the system by the Apex 

bank exerted downward pressure 

on MM rates as rates tumbled 

96.2% on average despite OMO 

issuance which moderated 

system liquidity by N2.1bn. OBB 

and ON thus closed the day at 

24.2% and 26.9% respectively. 

Despite the provision of 

funding for PMA which held 

mid-week, rates declined 

further to close the session 

at 16.3% (OBB) and 17.3% 

(ON). MM rates trended in 

line with liquidity dynamics 

on Thursday, OBB (6.3%) 

and ON (6.8%) rates shrunk 

10.0% apiece amid N358.3bn 

maturity which hit the system. 

Closing the week, MM rates 

settled at 15.2% and 15.7% 

(OBB and ON) respectively, 

down 14.2% and 15.1% w/w. 

This week, anticipated CBN 

intervention in the FX market 

is expected to further pressure 

the system liquidity with the 

multiplier effect of higher 

MM rates. 

FUND PRICE OF PFAs AS AT JUNE 16, 2017 

S/N PFAs 

CURRENT PRICE 

1 CrusaderSterling Pensions 3.4448 

2 Premium Pensions 3.3900 

3 ARM Pension Mgrs. 3.3666 

4 Stanbic-IBTC Pensions 3.2509 

5 Legacy PFA 3.1535 

6 NLPC PFA 3.0035 

7 PAL Pensions 2.9500 

8 Trustfund Pensions 2.8800 

9 First Guarantee Pension 2.8628 

10 SigmaVaughn Pensions 2.7520 

11 Leadway Pensure PFA 2.7233 

12 AIICO Pension Managers 2.6427 

13 Fidelity Pensions 2.3980 

14 APT Pensions 2.3978 

15 FUG Pensions 2.3465 

16 AXA Mansard 2.3197 

17 OAK Pensions 2.2567 

18 IEI Anchor Pension Managers 2.0632 

19 Investment One Pension Mgrs. 2.0328 

20 IGI Pension Fund Managers 1.7710 


Th e strategic 

entry by Julius 

Berger Nigeria 

Plc, a leading 

construction company 

into the Oil & Gas sector 

may have encouraged 

stock buyers to increase 

their equity stake in the 

company. 

Julius Berger Nigeria 

Plc recently announced 

strategic partnership 

and joint investment 

agreement with Petralon 

Energy Limited for 

the acquisition and 

development of oil fields 

in Nigeria. 

“The alliance is in line 

with the strategic goal of 

Julius Berger Nigeria Plc to 

diversify into the Oil and 

Gas Sector”, the company 

said in a note to investors 

at the Nigerian bourse. 

Petralon Energy is an 

African Exploration & 

Production company, set 

up to acquire, develop, 

and operate assets in 

the oil and gas sector, 

including, but not limited 

to farm-in opportunities 

(with indigenous 

and international oil 

companies), marginal 

fields, and bid rounds & 

concessions. 

Julius Berger Nigeria Plc 

is a leading construction 

company engaged in the 

planning and construction 

of civil engineering works 

in Nigeria and a foremost 

contractor to Nigerian 

Governments. The 

multinational company 

construction portfolio 

includes infrastructure, 

industry, building and 

facility services. 

Before now, the shares 

of Julius Berger Nigeria Plc 

were on offer as investors 

remained sceptical over 

future returns driven by 

cost pressures, FX losses 

which punctured the 

company’s first-quarter 

(Q1) earnings. 

Market watchers 

believe that the increasing 

competition in the 

construction sector, 

particularly from Chinese 

construction companies 

with growing presence 

across the country 

threatens the market share 

of Julius Berger Nigeria Plc 

and restraints its revenue 

growth. 

Julius Berger kickedoff 

the 2017 financial year 

on a weak note as shown 

in its results for the firstquarter 

(Q1) ended March 

31, 2017. Pressured by the 

elevated operating costs, 

Q1’17 earnings before 

interest and taxes (EBIT) 

declined 36percent yearon-year 

(y/y) to N1.8 

billion. 

Further dampening 

the 3-month results 

and effectively dragging 

bottom-line to a loss 

(like the last two quarters 

of 2016) was a Foreign 

Exchange acquisition loss. 

In the first-quarter 

period, the company 

recorded foreign exchange 

(FX) acquisition loss 

of N2.1billion; while 

administrative expense 

rose to N7.4billion against 

N5.7billion in Q1’16, 

an increase of about 

N1.7billion. 

Bilfinger SE own 

16.5percent equity in 

Julius Berger Nigeria 

Plc; Watertown Energy 

Limited (10percent); 

Goldstone Estates Limited 

(19.9 percent); and others 

(53.6percent). 

Julius Berger Nigeria Plc 

reported Q1’17 revenue 

grew to N34.15billion, 

from N33.24billion in 

Q1’16; but a loss-after-tax 

(LAT) of N427 million for 

Q1’17 period, compared 

to the N951 million profit 

after tax (PAT) reported in 

the corresponding period 

of 2016. 

It recorded loss before 

tax (LBT) of N17.1million 

against N1.64billion 

profit before tax in the 

corresponding Q1’16. 

The recent demand for its 

share has pushed the price 

above most analysts target 

price (TP) after pressured 

earnings in Q1. 

While updating their 

model, research analysts 

at Lagos-based Vetiva 

Capital Management 

Limited revised their 

target price (TP) for Julius 

Berger Nigeria Plc shares 

to N25.92, down from 

previous target of N32.38. 

Meanwhile, after a 

record 52-week low of 

N34.83, the company’s 

share price at N 43.87 on 

Tuesday after topping the 

gainers table shows it is 

on course to earlier record 

52-week high of N50.93. 

Aside a recent positive 

on its share price, analysts 

had noted Julius Berger 

was shaping up to be a 

repeat of 2016 after a 

delayed passage of the 

2017 budget. 

Recall that in the 

financial year ended 

December 31, 2016, Julius 

Berger Nigeria reported 

full year loss-after-tax of 

N3.8billion as a result 

of massive hit from FX 

acquisition costs in tune of 

N14.2 billion for the year. 

The company which is 

among the NSE-30 with 

N189.645billion in market 

capitalisation; while its 

trading information show 

shares outstanding at 

1.32billion units.



C002D5556 

INTERVIEW 


C002D5556 

BUSINESS DAY 

21 

INTERVIEW 

Government must interface with the private sector for 

its housing programme to succeed - REDAN President 

UGOCHUKWU CHIME, President, Real Estate Developers Association of Nigeria (REDAN), in this interview with JOHN OSADOLOR, 

speaks on germane issues relating to the development of the real estate sector of the Nigerian economy. Excerpt: 

dustry, comparing ourselves with 

multiplier effect potential of the 

industry, we have a long way to go. 

If you look at the housing sector, 

there is something you will 

see, what you will see is that there 

are critical components in the 

housing sector, we have the land 

component. Land is where every 

development takes place, whether 

it is residential real estate, commercial 

real estate, industrial real 

estate, tourism real estate or agricultural 

real estate, it takes place 

on land. Now our emphasis has 

been on industrial and residential 

real estate. the next issue is the 

finance component, the next one 

are the off-takers that will buy/stay 

in those houses. 

The fourth component is the 

developer, who is the one that 

mixes the factors of production. 

He is the manager of interest of 

these three others. If he gets into 

the land components, you will have 

issues from land ownership, who 

owns the land, issues of acquisition 

of the land and compensation, 

issues with titling(C of O,/ 

Leases), issues with plan approval 

of what you should develop, the 

land administration, the type of 

activities that should take place on 

the land, issues with devolution of 

titles. In the case of residential real 

estate for mortgage, it will be title 

transfer from the developer to the 

off-takers, from the off-takers to the 

primary mortgage bank, from primary 

mortgage bank to secondary 

mortgage institutions like Federal 

Mortgage Bank of Nigeria. That is 

as regard to land. 

We have issues with each of 

these sub-segments. In terms 

of finance, we have issues with 

financing those developments, 

whether it is in terms of construction 

finance or off-takers finance, 

whether it is commercial buyers 

or Federal Mortgage Banks or with 

private investors, or individuals 

who invest their internally generated 

revenues or equity into those 

houses. We have issues with interest 

regime, funding mismatch 

etc. Also whether housing is the 

preferred investment destination 

for their money is a different thing. 

There are sectors that are looking 

for that same finance. Finance is a 

coward, it goes to the area where it 

can be pampered, where it can get 

relatively higher return on investment 

for the same risk level. 

The third aspect are the people 

who will need those houses. Why 

do they need those houses, what 

price are thy willing to pay, what is 

the gap between their desires and 

ability to pay? The affordability factor 

and that for me is a huge issue 

that we have not been able to think 

about. Now REDAN at their own 

capacity sits in the middle, trying 

to mix these factors of production. 

When you go to financial institution, 

they don’t ask you how you 

got the land, but the character of 

the title you hold determines how 

they will listen to you. So what we 

are trying to do as REDAN is to have 

us work together with all the players 

in the housing value chain with 

a view to improving the transaction 

dynamics and interfaces. 

We determine the equilibrium 

point in our operations, whereby 

we can have a system where each 

person agrees to play their roles 

and responsibilities and get the 

benefits from their roles in an equitable 

format. So that the system is 

well managed and so that the transaction 

dynamics are well defined 

with a clear-cut road maps. When 

we have a clear-cut road map, it 

becomes easy for people to access 

the entry and exit from the sector. 

And if that is done, it enables us to 

define the next element and that 

element is what are the competitive 

advantages of investing in this 

sector .and we are looking at it as 

a group of stakeholders not as an 

individual, and that is the stage we 

are in the national housing sector. 

We are in the stage of understanding 

the roles, trying to define the 

clear-cut and pattern of what we 

should do, who should do what 

and what we should not be done. 

That is what REDAN has set out 

to do because over the years, we try 

to run this industry and we discover 

as developers that a failure in the 

part of anyone of these stakeholders 

leads to a failure on our ability 

to deliver as the manager of interest 

of other stakeholders. 

A failure of the government to 

pay compensation for the land 

leads to restiveness in that community; 

work stoppages and sometimes 

loss of life and/or property. 

Failure of government to give title 

as at when due, causes delays in 

sale and title transfer, thereby compounding 

the interest element on 

the construction finance. 

So we decided to proactively 

engage all the stakeholders, so 

that we can come together and 

make sure that we have a seamless 

agreement on who should do what 

and at what time interval you are 

supposed to do it. That agreement 

will form a road map, that road 

map is not final, it will be modified 

as we go along. We may start small 

but can upscale our activities as 

time goes on, making reference to 

the experience that we shall have 

jointly and it will be clear to all 

that as we are moving from a point 

to another, these are the things we 

need to change in our definition of 

issues, definition of roles, definition 

of output for each party. For 

example we can effectively reduce 

transaction time for each envisaged 

activity. As at today, we have 34% as 

a compliant cost across the chain, 

that is too high. When you compare 

it, that if I buy share Nigeria Stock 

Exchange against central securities 

clearing system and they issue me a 

paper which enables me to trade on 

those shares at less than 5%, which 

means if I have 20% appreciation in 

share price, I can walk home with 

15%, if you have that for housing 

and the cost of registration and 

What is the state of 

the Real Estate 

business in Nigeria 

today? 

The real estate sector 

is still at the infancy stage in 

Nigeria, in view of the fact that the 

paradigm shift from individuals 

going to buy land, design their perceived 

property type, and build it, 

to mass production or outsourcing 

of that function to another organization 

called a developer have not 

been captured in our psyche and 

philosophy of operation. In developed 

countries less than 0.5% of the 

people design and build their own 

houses. They buy houses almost 

like the way we buy food from 

the shelf from the supermarket. 

They go to an online portal and 

check the house type, price, the 

Neighborhood and other features 

of the house and then commence 

transaction. 

So we have a lot to catch up 

with regard to international global 

standard of the real estate and the 

rest of them. So when you look 

at the players in the industry, we 

have a huge gap. There has been a 

paradigm shift in home-ownership 

approach, and the key thing for us 

to do, is to begin to advocate, teach 

one another, open our minds to issues 

and getting us to understand 

what we don’t understand. Getting 

us to have a mutual beneficial 

understanding of the way forward 

so as to liberate the potential that 

is involved in the housing industry 

for employment, economic growth 

and shelter provision. 

The 2002 coming into existence 

of REDAN (Real Estate 

Developers Association of Nigeria), 

MBAN(Mortgage Bankers 

Association of Nigeria) and 

BUMPAN(Building Materials Producers 

Association of Nigeria) was 

a welcome development in articulating 

the private sector players in 

housing development in Nigeria. 

Hitherto, we have seen that government 

is not a very good player 

because of the challenges of rapid 

political changes, bureaucracy and 

huge ‘interests’. The challenges that 

are there in terms of changes in 

party in government, changes in 

government policies, changes in 

individuals who head organizations 

and the character it brings to 

bear upon the institution to start 

all over again. So the private sector 

are more sustainable as key drivers 

in affordable housing delivery and 

that is why we can say that it is at infancy 

but yet has a good potential. 

In South Africa, the housing 

sector contributes about 30% to 

the GDP; in Nigeria it is about 5%, 

which means we have a long way 

to go. We cannot even compare 

with countries that have about 

60% housing sector contribution 

to their GDP, like USA and United 

Kingdom. So in terms of where we 

are and where we need to be, not 

only in comparing ourselves with 

them but comparing ourselves 

in deploying potential of the inother 

things come to 34%, it means 

that for me to trade that asset, I 

have to get something above 34%. 

What we are trying to do is that 

for each of us, including the media, 

who should be at the forefront of 

our advocacy to create an enabling 

environment where each party 

understand themselves and their 

next partner in the transaction 

chain and how they can interface 

properly with their direct partners 

and the likely effect of the interface 

with other direct partners. 

This is where REDAN position 

itself. Not only crying out every 

time about land and finance, but 

also interface with people, looking 

at so many other things because we 

have come to accept our role that 

no other person can play this role 

for us. When a man who wants to 

buy a house says it is too costly, he 

does not want to know about the 

building material costs; compliance 

cost etc. So if we have to address 

this issue, we will address it 

on a comprehensive platform that 

allows even the people to 

know where they are going 

wrong and ask each person involved 

in the chain to reduce his 

interest to accommodate the interest 

of everyone. 

That is where we are today in 

REDAN. We have signed MOUs 

with a number of the organizations. 

We are now at the stage of bringing these 

people together. We interface with building 

material producers, state government, 

federal mortgage bank, ministry of 

power, works and housing, CBN, among 

others. So we are now trying to bring 

them together to fulfill our core role of 

being the manager of interests. 

We have done that with artisan training. 

We have MOU with institutions who 

are involved in training artisian because 

we have poor competence and skills 

among our artisans. We also identify 

that among ourselves as developers, 

we need to have an enhanced skills to 

be able to manage the interest of these 

stakeholders. We are working on that 

with the University of Lagos 

Centre for Housing where we can obtain 

a Master’s degree and it is the first in 

the country. We also have the same understanding 

with Shelter Afrique which 

is the Pan African Housing organization. 

So we need to be able to do what has to 

be done to move this sector forward. 

What is the effect of recession on 

the sector, consumer buying capacity 

and manpower development? 

It has affected adversely every segment 

of the sector. The cost of the imported 

components of building materials 

went very high. The cost of the locally 

produced component did not increase 

with the same ratio. We have visited 

some of the local material producers 

to encourage them to know that we are 

there for them. We have had interface 

with cement producers, tiles producers, 

roofing sheet producers and other 

producers of building materials and 

we have given them useful advise on 

quality and process enhancement. We 

also assured them of increase capacity 

and turn-over if they can reduce some 

prices and enhance quality and they appreciated 

our input. We are now having 

meetings on monthly basis with federal 

mortgage bank, mortgage association 

of Nigeria and real estate association 

of Nigeria, so that we can sit down and 

begin to look at what we can do to help 

each other perform better. That is where 

we are now and we intend to enhance 

going forward. 

It is making the strategy more creative 

and aiming to have economics 

of scale. We have changed so many 

things, one of the things we have to 

end is youth restiveness. We have discovered 

that when you come and take 

somebody’s land that he was using for 

agriculture and start using that land for 

housing development, there have been 

a change of use for that land but there 

is no change of skill for the person who 

owns that land. 

So what REDAN has come up to 

propose is that, for every 20 houses put 

in a place, you must train a youth in that 

locality in the construction industry 

related skill because that is the current 

use of his land. The farming skills he had 

before is no more useful for the construction 

terrain that you are now using his 

land for. So we have come up with 

a policy, it was not induced by government 

but internally generated 

by us because we are interested in 

Nigerian people. We are saying for 

every 20 houses you build, as you 

are using that land, train the youth 

of that place, so that their skills will 

be in line with the current use of 

their land and still be useful within 

their locality. This is an innovation 

that we have introduced, so we are 

looking at every aspect of our operation 

to be able to do the needful and 

that is what we are doing. 

How many people have benefitted 

from that training? 

As at now, it is a new initiative. 

We have the first set of 120 youths 

who have gone through that training. 

It is gaining traction; we believe 

that by the end of this year we 

should be looking at 3,000. We are 

enhancing it, by next year we will 

upscale it. We are going to work with 

government to have a policy that 

things have to change, government 

must begin to look away from one 

aspect of the value-chain and begin 

to hear what REDAN is saying. In 

REDAN we know we that we are 

responsible to the people, and as 

part of our corporate social responsibility, 

we must look at people that 

we have taken away their land and 

have changed the purpose of their 

land from farming to real estate. 

What value are you giving them in 

return, how will that youth be involved 

in the development process 

of their land? That for me is what we 

are trying to do. Our target is that if 

government is targeting under the 

APC manifesto one million housing 

units, that tells us that we just have to 

multiply that same number with the 

number of youths. If you divide one 

million by 20 you will have 50,000 

mandatorily trained youths per annum 

that is our target for each of the 

community not just from anywhere. 

We want people trained in a formal 

institution; we want to train people 

and that is what we are already doing, 

that is our target and that is what 

we also want government to put in 

place by way of policy. 

What is REDAN doing about 

the 17 million housing deficit? 

What we are doing is to first get 

the statistics, that figure was not 

empirically derived. But I do know 

that the figure could be higher or 

lower but the reality is that it’s a 

realistic figure because once you 

prove by the delivery mechanism, 

some of those who never thought 

they could own homes will begin to 

desire to own homes. So when you 

talk of 17 million it is okay, even if 

it is 10 million it is still something, 

even if it is five million. 

Our production capacity as 

at now is less than 100,000 housing 

units per annum, so there is a 

problem. We have to upscale; I don’t 

worry myself about the 17 million; 

we are about to work out something 

with various organizations. We are 

going to mine data from the various 

State Ministries of land that allocates 

land, mine data from planning 

approval authorities, from development 

control institutions and town 

planning institutions across the 

country; we are going to mine data 

from other sources to be able to look 

at what the deficit is. 

I also know that the National 

Bureau of Statistics and Nigeria 

Institute of Social and Economic Research 

are working on something. 

The forthcoming census, they have 

included in it some data on housing, 

so we are working in concert with 

these institutions. The Department 

of Statistics of the Central Bank of 

Nigeria is working on something 

because they have come to appreciate 

that fiscal and monetary policy 

must look at the housing indices 

because the problem we had in 2008 

in USA emanated from the housing 

sector. Nigeria is coming up to that 

level that in future crisis in housing 

will affect other micro economic 

institutions and indices; they are 

interested in that. We are working 

with them because we have understood 

our role as REDAN and we are 

working with them to generate data 

for planning. 

They can now say if we invest 

N100 billion in the housing sector 

this is the number of jobs that it 

will create. The former Minister of 

Finance, Dr Ngozi Okonjo-Iweala 

told us that when you create a house 

you will have a total of 8 million 

permanent and non-permanent 

employment. For me, that is a huge 

number. If we are able to build one 

million houses as the APC mentioned 

in their manifesto, that is 8 

million employment. Even if it is 

only two million permanent jobs, 

that is huge. The data have to cut 

across not just the input factors of 

the process but also the outcome 

in terms of employment, multiplier 

effect to the economy and support 

to our GDP increase that is what we 

are looking at. 

What is the relationship between 

REDAN and the Government? 

We are hoping to be singing from 

the same hymn book. I have been 

the chairman of my state housing 

development corporation. One of 

the things that I have come to appreciate 

is the fact that, it is difficult 

for us to sing from the same hymn 

book because the man sitting as the 

political head of Federal Housing 

Authority or Federal Mortgage Bank 

or the Minister is not in control of 

the factors around him. There are 

environmental factors outside his 

office that affect him. That is why 

for us to have a sustainable platform, 

government will not be a player. For 

proper planning and efficiency, 

government ought be the enabler. 

We have not had that in Nigeria; it 

is not the fault of the current APC 

government; it has been there from 

time, government have always for 

political interest decided to become 

a player on the field instead of being 

an umpire and it has failed. We are 

meant to build social housing for 

the poor; they have abandoned that 

segment and are now involved in 

building duplexes which are meant 

for the rich, and have left the poor 

that they should serve. The same 

way at the federal level before the 

APC government came, the government 

then decided to do ministerial 

housing scheme as a player in the 

field. A player at the same time as 

well as a referee, muddling up the 

entire setting. 

The current government even 

went a bit higher by saying ‘we 

don’t interface with other players; 

we want to do it alone, no interface 

with the private sector. We don’t 

want to recognize the role the private 

sector is playing’, that for me 

is not the way forward. But being 

that they have not been in government 

for long, just two years, we 

will give it to them, hoping that by 

now they must have seen the obvious 

challenges. You cannot operate 

effectively with the exclusion of the 

private sector. I think it is something 

I would strongly advice the Minister 

and other State Governments let us 

sit down under a national housing 

forum and determine what to do, 

to make sure that the housing sector 

produces to capacity in terms 

of employment, multiplier effect 

to the economy, GDP increase and 

shelter. Because the truth of the 

matter is that, housing is no more 

about shelter provision but 

about employment. We have 

about 65% youth unemployment 

in the country, according to the 

National Bureau of Statistics. The 

way to go is not to go and dash 

them money. But we need to have 

an enduring sustainable industry, 

activities that will soak in these 

youths, and that for me is what we 

must look forward to. 

What is the funding situation 

of the housing sector? 

The funding situation is the same 

in every part of the economy. It is 

very dry. If you look at the reality 

on ground today, 20 years ago we 

were funding literally everything as 

government but we realize we cannot 

go that way again. Privitization 

and commercialization has come 

to stay. The current global approach 

is that private capital, funds on a 

sustainable basis, growth in any 

economy whether it is foreign direct 

investment or local investment in 

conjunction with foreigners. But for 

any investor to invest in any sector 

the return on investment must be 

okay. You don’t regulate return on 

investment, if you regulate return on 

investment and it is not acceptable 

by the players in that sector they will 

move to another sector. Dangote is 

involved in almost everything, if you 

close one sector he moves to another 

sector, therefore the core issue 

for me when it pertains to housing 

is how do we make the system to be 

okay for investors to invest in. 

As for us the key issue should 

then be where are we, and what 

should we be doing in respect to 

making sure that if you are going 

to be an investor whether the investment 

is from government or 

private sector, commercial bank or 

anybody, how do they come in and 

exit? The exit strategy for housing 

now is not clearly defined and made 

as smooth as possible and reduce 

the difficulty involved in it, thus it 

will still be difficult for people to invest 

in the sector and if it is difficult 

for them to invest in the sector you 

can’t get the needed finance. If you 

put a government provided fund it 

will be difficult to recycle that fund 

because it will be a one-way traffic. 

Finance in housing is supposed 

to be able to be recycled and it can 

only be recycled when the wheel 

for cycling is well oiled and that 

is not yet done. Whether in terms 

of infrastructure, processes and 

restructuring various institutions 

are involved in it. That is why we 

are having the national housing 

forum to let people know that we are 

not saying in REDAN that we need 

construction finance but if I get construction 

finance and I build those 

houses and am trapped for the next 

seven months who pays the cost of 

funds for what is not my fault?


22 BUSINESS DAY 

C002D5556 

BUSINESS 

TRAVEL 

‘FG should address visa on arrival, others 

in implementing the Executive Order’ 

Obi Mbanuzuo is the Accountable Manager and Chief Operating Officer, Dana Airlines. 

In an interview with IFEOMA OKEKE, he talks about some of current challenges facing 

airlines and how the government can address ease of doing business across the airports. 

What things 

do you 

want to see 

improve 

over time 

at the airport through the 

new executive order? 

The ease of doing business 

is the most important 

thing. Sometime ago, we 

were all thinking we will 

have visa on arrival and we 

all rejoiced. Visa on arrival 

is not the way we know it to 

be in other places. There was 

one of our security personnel 

that we needed to send for 

the International Civil Aviation 

Organisation (ICAO) 

training course in Kenya. All 

he did was get on a plane, fly 

to Nairobi and showed them 

his passports and documents. 

After these, he paid 

the fee and in ten minutes, 

he was issued a visa. For our 

own visa on arrival, we had 

to first of all write a letter 

to Nigerian Immigration 

Service with his details. We 

had to go to Abuja to get approval 

for him to come. We 

also sent him the original of 

the approval and kept a copy 

here. When he landed, we 

also had to go through some 

more procedures. I can only 

talk from the airlines’ point 

of view. How do we have 

airports without navigational 

aids and airfield lightening? 

Obi Mbanuzuo 

So everything should be 

done to ease business across 

our airports. 

What are the causes of 

bird strike and how can 

they be addressed? 

Bird strike means birds 

hitting an airplane’s engines, 

which automatically affects 

the operations of that aircraft. 

In Africa it is warm all 

the time and there are a lot 

of grasses and vegetation 

around the airports. If you 

go to the United States, their 

airports are concrete. Birds 

like vegetation, because of 

this the airports are supposed 

to have bird prevention 

measures to scare off 

the birds. But unfortunately 

some of our airports do not 

do that. There are measures 

put in place to scare away 

the birds which are used in 

other countries as well. One 

of our bird strikes was in 

take-off and the other one 

was in landing. The damage 

can take a lot of money to fix. 

Airline operators have 

complained that aircraft 

Air Peace has announced 

that it has 

given its expansion 

project a big push 

with the arrival of one of the 

new aircraft it acquired to 

increase its fleet size to 22. 

According to the airline, 

the new aircraft, a Boeing 

737-300, arrived at the Murtala 

Muhammed Airport, 

Lagos on Friday and was 

warmly received by excited 

Air Peace staff. 

The aircraft flew into Lagos 

from the Nnamdi Azikiwe 

International Airport, 

Abuja, where it landed at 

about on Thursday, with Allen 

Onyema, the Chairman/ 

Chief Executive Officer of Air 

Peace on board. 

The new aircraft is the 

13th so far acquired by Air 

Peace in less than three years 

of its commercial flight operations. 

The airline, it would be 

recalled, took delivery of its 

12th aircraft, also a B737, in 

February this year. The carrier 

is finalising arrangements 

for bringing in other aircraft, 

including B737, B777 and 

Embraer 145 jets, it recently 

acquired to increase its fleet 

size to 22. 

While the B777 aircraft 

would be deployed to service 

the airline’s international 

routes, including South 

Africa, London, Guangzhou- 

China, Dubai, Mumbai and 

Atlanta, the B737s would 

strengthen the carrier’s 

expansion to more destinations 

in the West Coast 

of Africa, including Lome, 

Abidjan, Douala, Dakar and 

leasing cost more in Nigeria. 

Why is this so? 

Economically, it does not 

make sense to buy an aeroplane. 

To buy an airplane 

takes a lot of capital. But the 

fact is that to lease an airplane 

in Nigeria, operators face the 

same risks they face for insurance. 

These challenges also 

make the leasing company 

charge more when leasing 

airplanes to Nigerians. Generally 

airlines tend to own 

maybe about 30 to 40percent 

of their fleet and lease the 

remaining 60 to 70percent. 

For example an airline with 

700 air planes may own only 

about 40 of those airplanes 

and the rest are all leased 

from brand new. He can 

use it for about 30years and 

return it to the owner, then 

the owner can now start leasing 

it to us in Africa. Emirates 

airline can never get a plane 

second hand and a lot of 

their airplanes are leased and 

after ten or fifteen years, they 

return it. In accounting, there 

are huge disadvantages in 

buying airplanes compared 

to leasing. 

How does airline insurance 

work in Nigeria? 

As an airline operator 

by law, we have to insure 

the people we carry and 

the staff. Most airlines in 

Niamey. Air Peace currently 

operates daily flights from its 

Lagos hub into and out of 

Accra-Ghana. 

Speaking on the arrival 

of the new aircraft, Onyema 

assured that Air Peace was 

“committed to investing in 

equipment and services 

the world choose different 

levels of cover. For aircraft 

insurance, if for example I 

own the aircraft, I can decide 

not to insure it since it’s my 

property but it is not a wise 

move. You must always insure 

the people on board. 

The owner of the airplane 

will decide to what value 

he will insure the airplane. 

If it is a leased airplane the 

owner of the airplane will 

decide how much the user 

will insure the airplane. 

Why is it that local and 

international insurance 

companies share the risks 

in insuring aircraft? 

Airlines will like to be free 

to shop around for insurance 

companies both locally and 

internationally. Most times 

our local insurance will put 

the risk outside the country. 

It will be very difficult for a 

local insurance company to 

take on risk all by itself and 

if something happens, it will 

be disastrous for the company, 

so they decide to spread 

the risk by reinsuring. This 

also gives the insured party 

more confidence. Forex has 

continued to be a challenge. 

Sometimes airlines do not 

get foreign exchange to pay 

for the insurance. Airlines 

pay more for insurance in 

Nigeria than abroad. 

Air Peace boosts expansion drive with 13th aircraft 

IFEOMA OKEKE 

L-R: Abdulmunaf Yunusa Sarina, president, Azman Air; Samson Fatokun, area manager, South-West 

Africa, IATA; Kashim B.Shettima, chairman, SkyJet; Acting President Yemi Osinbajo; Nogie Meggison, 

chairman, AON; Jacky Hathiramani, CEO, Dana Air, and Allen Onyema, CEO, Air Peace, during a 

meeting with airline stakeholders. 

that make travelling more 

comfortable, convenient 

and seamless for the flying 

public.” 

“The arrival of our newest 

aircraft underscores the 

depth of our resolve to make 

a huge difference in the 

Nigerian aviation industry. 

We are matching our huge 

expansion project with the 

right equipment and people 

to ensure the delivery of the 

best flight services to our 

valued guests. 

“In a couple of weeks, 

more B737, B777 and Embraer 

145 jets will be joining 

to increase our growing 

fleet to 22. We are ready 

and determined to cover 

more Nigerian cities with 

our Embraer jets. We will 

also deploy more B737 

aircraft to strengthen our 

regional operations, which 

we started with our first 

flight into Accra-Ghana 

on February 16. We will 

soon launch more routes 

in the West Coast of Africa, 

including Lome, Abidjan, 

Douala, Dakar and Niamey,” 

he added. 

Experts to discuss 

one year accident 

free commercial 

aviation at 13th 

Akwaaba Travel 

Market 

Experts in the aviation 

industry in Africa 

will be gathering 

at the 13th Akwaaba 

African Travel Market to 

x-ray the successes recorded 

in the sector during 

the 2016 operational 

year. 

It was a year with Commercial 

Jet hull loss in 

Africa, the safest year in 

Commercial Aviation in 

Africa. This is against the 

backdrop of decades of 

problematic safety level 

in Africa. The 13th Akwaaba 

Africa Travel Market, 

Aviation Day, will be 

holding at Eko Hotel and 

Suites from September 

10th– 12th 2017. 

This year’s Aviation 

Day with the theme “One 

Year Commercial Free 

Accident Aviation. What 

Did Africa do right?” is 

expected to have aviation 

professionals from global 

aviation organisations, 

like the International Air 

Transport Association, 

(IATA), African Civil Aviation 

Commission, AFCAC, 

African Airlines Association, 

(AFRAA) and Chief 

Executives of airlines in 

the continent. 

The 12th edition of the 

travel and tourism conference 

with the theme 

‘The State of Aviation in 

Africa Why do Airlines 

Fail’ which was well attended 

by travel experts 

examined the challenges 

bedevilling African carriers 

with a view to proffer 

solutions to the problem 

inhibiting the growth of 

airlines in the continent. 

At the event it was revealed 

that 37 Airlines 

collapsed in Africa within 

a decade. 

The 13th edition of Africa 

Travel and Tourism 

Conference is aimed at 

transferring knowledge 

covering travel, hospitality 

and aviation sectors 

from globally rated 

experts. Apart from the 

annual Exhibition which 

offers participants the opportunity 

to expose their 

Product to the Travelling 

Public and travel trends 

in a face to face format, 

the 13th AKWAABA African 

Travel Market will 

be imparting knowledge 

to its various participants 

through seminar, networking, 

exposure and 

provision of new skills.


C002D5556 

Life in Recession 

How Nigerians are struggling to survive 

BUSINESS DAY 

23 

If you want to contact the writer of this story 

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

chinwe.agbeze@businessdayonline.com 

Hairstylist in dire need of a shop 

CHINWE AGBEZE 

Name: Yisa Idiat 

Origin: O gun 

State 

Dependants: Three Children 

Business: I braid people’s 

hair for a living. I had one small 

kiosk around Oshodi but last 

year, when the Lagos state government 

destroyed all the shops 

by the gutter, mine was affected. 

I don’t have money to get another 

shop and my customers say 

they cannot come to my house 

to braid their hair because they 

don’t like where I stay. 

My husband who was a trailer 

driver abandoned the children 

and me because I did not give 

him a male child. 

He used to visit us once in a 

while but the last time he visited, 

which was two years ago, he told 

me he was out of job and had no 

money to give us. Since then, he 

has not called or visited us. 

Profit: When I had a shop, 

I used to make enough money 

to put food on my family’s table 

because customers were coming 

but that has changed. To eat now 

is even a very big problem for us. 

School fees: I have moved 

my children to public school. 

So, the burden of paying their 

school fees is no longer there. 

Most times when they drive 

my children away from school 

because they don’t have books, 

someone around me would give 

me money to buy the book for 

my child. 

House rent: My rent has 

expired and my landlord said 

I should move out. As you can 

see, the room is leaking badly 

but it’s still better than nothing. I 

don’t even have money to renew 

the rent. 

Impact of recession: This 

period has been hard on my 

family. Feeding my children has 

not been easy. A custard bucket 

of garri is now sold for between 

N1,000 and N1,200, it was not 

this bad. 

Sometimes, when it gets very 

tough, my neighbours used to 

help me out but they don’t do that 

anymore because times are hard. 

Yisa 

We just manage to feed. I know if 

I had a shop, I would have been 

able to make ends meet. 

Yisa braiding a customer’s hair. 

Challenges: I want to be able 

to feed my family because this has 

become a very big problem for 

us. I really need a shop so I can 

work and make money to take 

adequate care of my children. 

Retail & Consumer Business 

Luxury Malls Companies Deals Spending Trends 

Power Oil partners Ondo on medical outreach 

…extends health camp to 15 locations 

CHINWE AGBEZE 

Power Oil has taken another 

laudable step by 

extending its health camp 

initiative to Ondo state, 

offering its medical outreach to 

the indigenes, with the backing 

of the state’s Ministry of Health. 

This was disclosed recently 

during an event in the heart of 

Isinkan market to mark the official 

flag off of the health camp project 

in the state. The event was graced 

by key representatives from the 

market committee and representatives 

from the ministry of health. 

The health camp is active in 15 

locations across Nigeria including 

Ondo State, offering free basic 

medical check up to indigenes in 

the area of BMI check, Blood Pressure 

and free medical consultations. 

The camp intends to move 

from one local government area to 

another, ensuring that all indigenes 

benefit from the health project. 

Applauding the rate at which 

the initiative is spreading across 

the country within a short space 

of time, Amisha Chawla, Brand 

Manager, Power Oil said, pointed 

out that the plan is to extend the 

reach of its health campaign to the 

entire nation. 

Chawla said, ‘‘at the end of 

2016, the project was present in 

nine locations and before the 

end of the second quarter of 

2017; we have grown into setting 

up 14 camps in 13 locations pan 

Nigeria.’’ 

Omotayo Azeez, public relations 

manager, Power Oil noted 

that the medical teams are present 

in two locations in Lagos, 

Oyo, Ogun, Kwara, Abuja, Kano, 

Kaduna, Enugu, Anambra, Edo, 

Rivers, Delta, Imo and now, Ogun 

State. 

Akinsete Olayinka, director, 

L-R: Opeyemi Awojobi, National Coordinator, Power Oil Health Camp; Akinsete Olayinka, director, hospital services, Ondo state 

ministry of health; Omotayo Azeez, public relations manager, Power oil; Toyin Adeyalo- Ogundare, deputy director, hospital services, 

Ondo state ministry of health, during the official flag off of power oil health camp recently in Akure, Ondo state. 

hospital services, Ondo state 

Ministry of Health, pledged the 

ministry’s readiness to provide the 

required backing to ensure that 

everyone in the state benefits from 

the health initiative. 

‘‘It’s a great challenge that the 

company has decided to take up 

with the health status awareness 

project and the Ministry are delighted 

to welcome the Power Oil team 

into Ondo State,’’ Olayinka said. 

Adunni Bolarinwa, head of 

Isinkan market, who was visibly 

elated, commended the management 

of Power Oil for the positive 

impact they are making in the lives 

of Nigerians. 

Power Oil health camp project 

is a daily and on-going exercise 

that offers free basic medical 

health check-ups to communities 

in the area of Body Mass Index 

check, blood pressure and free 

medical consultation. 

The health camp is also into 

partnership with Ogun State 

Ministry of Health, Ogun State 

Ministry of Women Affairs and 

Social Development, in Ogun, 

Oyo, Delta, Edo, Kaduna, Lagos 

State Ministry of Women Affairs 

and Poverty Alleviation and, Edo 

Women for Agriculture.

24 

BUSINESS DAY C002D5556 Thursday 22 June 2017 

Retail & Consumer Business 

LG faults Samsung’s 70 percent energy saving machine 

…displays array of washing machines 

BY OUR REPORTER 

The purchase of 

washing machines 

is surfing 

with the rise of 

Nigeria’s middle 

class. Consumers irrespective 

of their social standings 

are always seeking to look 

their best. 

For many consumers 

who feel the need to look 

good as well as focus on 

things that matters most, 

owning a good washing 

machine is a necessity and 

not a luxury. 

The washing machine, 

perhaps more than any other 

appliance, freed many 

working women from the 

drudgery of handling their 

laundry in the home front. 

LG Electronics said its 

washing machines are designed 

taking the interest 

of its teeming consumers 

which is their topmost priority 

into consideration. 

‘‘The human-centric features 

of our washing machines 

appeals to consumers 

anywhere in the world,’’ 

said Ogunbayo Olugbenga, 

an official of LG Electronics 

Nigeria. 

According to the electronics 

giant, some of their 

expanded range of Washing 

machines include; Turbo 

Wash, 6Motion, Twin Wash, 

Front Load/ Top Load. 

‘‘This is against the background 

that most washing 

machines are able to carry 

out just one wash motion, 

this necessitated the introduction 

of the LG 6-Motion 

Washing Machine which 

has the capacity to replicate 

6 different wash motions 

for every fabric type,’’ Olugbenga 

said. 

Continuing, he said, ‘‘LG 

washing machine’s DD motor 

makes it possible for 6 

different motions which 

include scrubbing, stepping, 

swing and rolling motion 

like a real hard wash would 

do. It is fabric sensitive and 

as such help to select appropriate 

motions for better 

washing performance with 

less damage by selecting 

stepping or scrubbing for 

stains and swing or rolling 

for delicate clothes’’ 

LG Electronics has also 

found some producers of 

conventional washing machines 

to be making bogus 

claims aimed at deceiving 

unsuspecting consumers. 

According to Olugbenga, 

Samsung’s 70 percent energy 

saving claim is baseless. 

‘‘Unlike other washing 

machine brands who are 

laying claim to saving 70% 

energy when using cold water 

offers significant saving 

over conventional washing 

machines using cold water 

is been found to be untrue 

and totally misleading. 

‘‘It is a known fact that in 

general using 15 degree tap 

water can save 60-70% of energy 

compared to 40 degree 

heated water. LG washing 

machines genuinely save 

60-70% energy in 15 degree 

tap water cycle compared to 

40 degree warm water cycle,’’ 

he said. 

In 2015 LG DD (Direct 

Drive) in its washing machines 

was certified by Verband 

Deutsher Rlekrotechniker 

as a product with a life 

span of 20 years which is the 

longest to be so certified by 

VDE in recent times. 

‘‘This is to confirm the reliability 

and durability of LG 

washing machines which 

is what every consumer 

desire in a product. There is 

no doubt LG washing machines 

has won the heart of 

consumers all over the world 

and has indeed proven to be 

unbeatable when it comes 

to true value and performance,’’ 

Olugbenga said. 

It has been discovered 

that there have been 

claims and counter claims 

about makers of washing 

machines laying claims to 

unsubstantiated product 

functionality. 

In a bid to confirm the 

veracity of the various claims 

by such misleading electronics 

firms over which 

washing machine truly saves 

energy, an investigation was 

launched into the matter by 

visiting various electronics 

showrooms in Lagos in 

other to get a first-hand information 

about this claims 

and counter claims. 

Our findings revealed 

that indeed LG washing machines 

can help to conserve 

energy up to 70% in relation 

to the kind of water being 

used at the material point in 

time which is between 15-40 

degrees for both tap water 

and warm water depending 

on what is being used. 

The latest range of washing 

machines from LG electronics 

are equipped with 

innovative inverter Direct 

Drive motor which aids 

cleaner and greener washing 

and makes the washing 

machine more energy-efficient, 

durable and quieter 

with less vibration compare 

to other brands of washing 

machines in the market. 

It is of interest to note 

that this technological innovation 

the first of its kind 

in the world has been in existence 

since the late 1980’s. 

For a worry-free clean LG 

has backed up the DD motor 

with a 10-year warranty 

to ensure it lives out the 

expected cycles which is 

approximately 4,400 washing 

cycles. 

‘‘Consumers are advised 

to use more of LG washing 

machines as that is the only 

way their can get true value 

for their money. Whatever 

claims LG lays on its washing 

machines can be verified 

when subjected to integrity 

test as it has nothing to hide. 

Life can only better with 

LG Electronics,’’ Olugbenga 

added. 

Global retail update 

Blockbuster grocery 

deal 

In its biggest transaction 

to date, Amazon has 

announced that it is acquiring 

organic grocer Whole 

Foods, which will give the 

online giant hundreds of 

physical stores. The all-cash 

transaction is valued at US$ 

13.7 billion. Grocery competitors 

lost a combined 

market value of US$ 21.7 

billion when the news was 

made public. 

Walmart buys Bonobos 

The only retailer with the 

size, scale and funds to take 

on Amazon, has made another 

move to gain more online 

power by buying men’s 

clothing company Bonobos 

for US$ 310 million in cash. 

With the purchase, Walmart 

aims to widen its appeal to 

younger consumers. 

Nestlé considers sale 

The Swiss food giant 

explores options to get rid 

of its US confectionery business, 

including Butterfinger, 

Crunch and Laffy Taffy, 

which generated revenue of 

about US$ 920 million last 

year. Nestlé could fetch US$ 

3 billion for the division. 

Sainsbury’s eyes Nisa 

The British supermarket 

operator is closing in on 

a GBP 130 million deal to 

acquire the smaller convenience 

chain, which 

currently operates over 

3,000 stores. In light of the 

proposed Tesco-Booker alliance, 

Nisa has no choice 

but to consider its options, 

says LZ Retailytics. 

Rewe supports independents 

The supermarket division 

of the Cologne-based 

retail group plans to reinforce 

free entrepreneurship. 

It’s approximately 1,100 

independent shopkeepers 

may in future have the option 

to become sole shareholders. 

The move is seen 

as a step to differentiate 

from offline and online 

competition. 

Eroski promotes locals 

The Spanish retailer is 

poised to start a campaign 

alongside 80 suppliers in 

the Navarra region to support 

the local agri-food 

community. Eroski has purchased 

EUR 1 billion worth 

of products from the region 

in the last five years and enjoyed 

a 10% sales increase in 

this segment. 

Meat safety rules 

In a bid to stamp out 

tainted meat, China’s Food 

Safety Law is requiring all 

regions to establish a “standardised 

safe meat supermarket”. 

The initiative will 

become compulsory. The 

new rule is designed to 

help consumers feel at ease 

when buying meat. 

Targeting China’s middle 

class 

Baby food maker Bubs 

Australia has signed a partnership 

with online retailer 

Kaola.com to sell its infant 

formula to the high-end 

Chinese market. This comes 

after supermarket giant 

Woolworths has inked a 

deal with the e-commerce 

platform to offer its private 

label products. 

Aube lands in Sydney 

Japanese beauty and 

retail group Aube, which 

operates 110 beauty hair salons 

in its home country and 

eight locations overseas, has 

launched its first store in the 

Australian metropole. Consumers 

are offered the latest 

Japanese hair products and 

state-of-the-art techniques. 

Market reacts 

Shares in Whole Foods 

and Amazon have soared 

following last week’s announcement, 

while bricksand-mortar 

retailers such as 

Target, Walmart and Costco 

took a massive hit. However, 

there were some beneficiaries 

of the announcement, 

including British e-grocer 

Ocado. 

Going public 

Under the cloud of Amazon’s 

Whole Foods deal, US 

meal-delivery service Blue 

Apron and European food 

delivery start-up Delivery 

Hero are preparing their 

market listing. The former 

has launched a US$ 150 

million IPO and the latter is 

set to raise around EUR 927 

million. Analysts are watching 

with interest. 

Exec appointments 

Candy giant Mars has 

tapped Sandeep Dadlani, 

former president of Infosys, 

as its new chief digital 

officer. Netherlands-based 

food retailer Ahold has promoted 

Nick Bertram as 

president of its US operations. 

Looking out for staff 

Discounter Lidl has reintroduced 

surveillance 

cameras in some of it stores, 

nearly ten years after removing 

them amidst a staff 

spying scandal. The retailer 

says installation will 

be in consultation with its 

employees. Meanwhile, 

Belgian retailer Colruyt is 

seeing improvements in 

the working conditions of 

its suppliers with its regular 

company-wide audits. 

Amazon’s next play 

Speculation is mounting 

that the online retail 

giant is deepening its push 

into vehicle sales (paywall). 

Those close to the scheme 

say it plans to expand its current 

trial into another major 

European market, possibly 

the UK. Meanwhile Spanish 

supermarket chain Dia 

plans to grow its partnership 

with the e-commerce heavyweight 

to bring its groceries 

to more cities in Spain. 

Sustainable leaders 

Coop Switzerland has 

been named the world’s 

most committed retailer in 

sustainable development in 

a study of 148 global retailers 

across one hundred criteria. 

German retailer Rewe 

has also been recognised for 

its focus on sustainability, 

receiving the NACS Sustainability 

Award for 2017. 

Ferrero for innovation 

The confectionary giant 

is opening its first Asian innovation 

centre, to be based 

in Singapore. The site will 

be home to several strategic 

innovation functions, 

including health and nutrition, 

new raw materials and 

research and development. 

Yirendai ramps up 

China’s largest peer-topeer 

lending platform has 

plans to boost its profile 

with an expanded product 

offering, including wealth 

management, as it seeks to 

shrug off concerns about a 

regulation-induced slowdown 

of the sector. 

Fashion forward 

Recruitment activity for 

Uniqlo Vietnam has fuelled 

rumours the Japanese fastfashion 

player is headed 

for the market. Affordable 

luxury brand ba&sh has 

made its Asian debut in 

Hong Kong while Chanel 

has opened a pop-up boutique 

in Singapore. 

Analysts: Chinwe Agbeze, Stephen Onyekwelu

25 


BDLegalBusiness 

Objection to jurisdiction? 

Speak 

now, or remain 

silent forever! 

C002D5556 

BUSINESS DAY 

Research Intelligence Practice Management Industry Report Partnerships 

INSIDE 

Detail Solicitors 

host maiden 

yacht race 

Pg 26 

Photo File 

Pg27 Pg 27 

Court quashes 

UACN purchase 

of Lekki 

property 

Contractual resolutions as solution 

Pg 23 

to discontent in Niger Delta 

In this edition, Tolulope Aderemi, Partner, Perchstone & Graeys attempts to throw light on how an Impact Benefit Assessment/ 

Agreement (IBA) can minimize the agitation in the Niger Delta and Oil Producing Communities - providing a contractual resolution 

between Host communities, the Federal Government and the International Oil Companies (IOCs). He speaks of proprietary 

and compensatory rights and where they arise. Excerpts… 

Pg 28 

ON IMPACT BENEFIT ASSESSMENT 

The whole idea of an Impact Benefit Assessment 

(IBA) is to look at ways and 

means by which, we can pacify all the 

parties involved in exploration and 

to avert conflict in future; between 

Oil Producing Communities on one hand and 

the IOCs and government on the other hand. 

We need to pay attention on sustaining our 

production level. For a long time, we have not 

been meeting our Organisation of the Petroleum 

Exporting Countries (OPEC) quota and as you 

know, failure to meet this quota translates to 

loss of revenue. If there’s loss of revenue, then 

we will not be able to fund infrastructure. There’s 

no doubt that there is a rebounding effect of our 

inability to manage the Niger Delta situation on 

our economy. We must be creative in resolving 

these issues. 

DOES IMPACT BENEFIT MEAN THAT THERE 

IS A PROPRIETARY RIGHT TO THE NIGER 

DELTA? 

Not necessarily. What the IBA suggests is 

that, there exist compensatory rights – which 

means that where exploration activities which 

usually culminates into ecological damages are 

carried out in your locality, you will be entitled 

to compensation. 

ON ASSESSING DAMAGES 

There is no doubt that the activities of the iOCs 

will cause some form of ecological damage to 

the means of livelihood in the regions/localities 

where they carry out exploration. These exploration 

activities are carried out in the waters, while 

the communities rely on the same water for their 

livelihood, e.g. fishing, etc. Therefore, as a global 

standard, the IOCs are expected to compensate 

these communities for all of these damages. 

To this extent, and in order to create a fair 

balance for both parties, the Impact Benefit 

Agreement (IBA) seeks to determine the extent 

of damage; the impact it has had on the subjects, 

and to measure the level of compensation due 

each community or individual affected. Adopting 

the same method as land matters, there will 

be need to enumerate and determine the value 

of the land/location in question, based on a 

number of parameters. 

HAVEN’T THERE BEEN ASSESSMENTS BY 

STATUTORY BODIES CREATED FOR THIS 

PURPOSE? 

We do not think any of the past development 

boards did any real assessment in this regard, 

which is why they ran into murky waters, i.e. 

OMPADEC Oil Mineral Producing Areas 

Development Commission (OMPADEC), 

Niger Delta Development Board (NDDB), the 

Niger Delta Development Commission (NDDC), 

which is still struggling with this feat. And this is 

because the level of damage is never ascertained 

before handouts are passed to the host communities 

and thus never adequate to resolve the 

real issues. Most often than not, these ‘handouts’ 

or compensations end up in the wrongs hands, 

which of course has led to lots of conflict situations. 

No real impact assessment was done, and 

which is why we commend the Vice President’s 

visit to the Niger Delta to assess situations in the 

region. 

WHY IBA? 

We propose an IBA because its provisions are 

very clear, and it also has stabilization provisions 

in it, such that where there is a change in law or 

policy, it would naturally affect the contractual 

terms we both have. 

NATURE OF THESE CONTRACTUAL RESO- 

LUTIONS? 

For the first time, we are proposing a ‘Contractual 

Resolution’ NOT just between the IOCs 

and the Oil Producing Communities, but more 

with government’s implicit back up. So while 

this relationship is a bilateral one, it is also has a 

superintendent – which in this case would be the 

government because, whatever the government 

does or does not do will have an effect on the 

‘Contractual Resolution’. 

For the first time, we will be looking at a 

Contractual resolution to the discontent, 

and conflict issues in the Niger Delta, such 

that what the Niger Delta activists have 

been agitating for several years, will now be 

reduced into contracts in terms of rights. The 

rights they have claimed before now have 

been propriety rights, which they cannot efficiently 

claim, but now they will be disposed 

to the right to a clean environment, which the 

Impact Benefit Agreement is set to achieve for 

host communities.

26 BUSINESS DAY C002D5556 Thursday 22 June 2017 

INDUSTRYFILE 

Detail Solicitors host maiden yacht race 


It was an exciting moment for lovers 

of water sports as Detail Commercial 

Solicitors (DETAIL), an enterprising 

Lagos law firm, held the maiden edition 

of ‘DETAIL Pursuit Race’; sailing 

competition. 

The sailing competition, which held on 

Saturday at June 10, 2017 at the Lagos Yacht 

Club, Onikan, Lagos, was graced by special 

dignitaries, especially clients of Detail Commercial 

Solicitors, members of the yacht club 

and other invited guests. 

As well, a total of 24 boats comprising; nine 

Lightning, 11 Hobie, and four Mixed Monohull, 

participated in this first annual race, which 

produced winners in different categories who 

were awarded trophies for their commendable 

performances on water. 

One of the highlights of the day was the presentation 

of trophies to the winners, especially 

Eddie Avy and Gabriel Hunsa, who emerged 

the overall winner of the maiden edition of 

DETAIL Pursuit Race. 

NBA Abuja 

launches health 

insurance plan 

Explaining the rationale behind the sponsorship 

of the race, Ayuli Jemide, lead partner, 

DETAIL, said after trophy presentation to the 

winners that the law firm was pleased to support 

the Lagos Yacht Club’s sailing activities and also 

give back by sponsoring the race. Jemide also 

assured the leadership of the yacht club of the 

law firm’s commitment at making the DETAIL 

Pursuit Race an annual event. 

Excited over the successful hosting of the 

maiden race, David Kruyt, Commodore, Lagos 

Yacht Club, thanked DETAIL for sponsoring 

the race while looking forward to a continued 

partnership, and encouraging more Nigerians 

to participate in boat yachting beefing up the 

membership of the club from its 70 percent foreign 

and 30 percent Nigerian ratio. 

Besides the exciting activities on water, the 

boat race witnessed live music amid food and 

drinks at the yacht club, while DETAIL further 

presented its corporate branded goodies to 

guests and participants. 

L-R: Dolapo Kukoyi, Partner; Ayuli Jemide, Lead Partner; Odunola Onadipe; Lead Administrator; 

Toun Olumide; Interface Manager; Susan Sim-Ifere, Client Service Officer; Samson Enikanoselu, Senior 

Associate; Seun Lofinmakin, Associate Partner; Ifedayo Adeoba Senior Associate; and Abiodun 

Oyeledun, Senior Associate, all of Detail Commercial Solicitors. 

The Abuja Branch of the Nigerian Bar 

Association, also known as Unity 

branch, on Friday launched its Lawyers 

Health Insurance Plan (LHIS), which is 

expected to provide health cover for lawyers. 

Speaking at the launch the Chairman 

of the Branch, Ezenwa Anumnu disclosed 

that the Health plan is an initiative of the 

Branch. 

The Lawyers Health Insurance Plan 

(LHIP) is a bespoke Health Insurance plan 

specially designed for lawyers bearing in 

mind the uniqueness of legal practice and 

health needs of Lawyers and gives you access 

to over 30 hospitals within the FCT 

and includes: 

General and Specialist Consultation 

prescribed medicines and laboratory tests; 

Accidents & Emergencies: Resuscitative or 

lifesaving initial treatment 

Management of chronic diseases – consultation, 

prescription drugs & laboratory 

tests; Accommodation (including feeding); 

Sessions X-Rays; Laboratory & Diagnostic 

Tests; Routine Immunizations; Optical: Eye 

testing, Lenses, Frames & Contact, Lenses; 

Primary Dental Care – relief of pain, fillings, 

nonsurgical, extractions, preventive care, 

scaling and polishing; Dental care; Ante- 

Natal Care + Delivery (including Caesarean 

Delivery); Intensive Care Services 24 hrs. 

Surgeries including day case procedures 

(minor and intermediate surgeries only); 

and Selective Health Screening (Health 

checks), i.e. Personal Health Assessment 

Limited to Basic (Physical, BP, Urinalysis) 

HIV/AIDS Care & Treatment. 

It cost 15,000 per person per year and the 

Plan takes off July 1st 2017 with minimum 

of 200 participants and can be extended to 

other family members under the Principal 

participant. It can also be accessed within 

and outside the FCT. 

L-R: Julian Hardy, 2nd place winner, Mixed 

Monohull class category; Larry Ettah, Group 

MD/CEO, UAC Nigeria Plc; and Mark Sutton 2nd 

place winner Mixed Monohull class category. 

L-R: Pauline Voyeau, 1st place winner, Hobie 

class category; Mipe Okuseinde, Senior Counsel, 

Sub-Saharan Africa, Uber; and Marc Coakley, 

1st place winner, Hobie class category. 

Nigerian bar morns the passing of the 

man simply known as ‘’jam-jam’ 

Me of the Nigerian Bar are mourning 

the passing of a quintessential Bar 

Man; one highly recognised for 

his deep values and strong commitment to 

the concerns of the bar, Musa Ibrahim also 

known as ‘Jam-Jam’ 

In a statement signed by the General 

Secretary of the Nigerian Bar Association 

(NBA), Isiaka Olangunju stated, 

“The President of the Nigerian Bar Association 

commiserates with his family and 

the entire members of the NBA for the passage 

of a leader of the Bar at this particular 

time and prays that Allah SWT will forgive 

his shortcomings and grant him Aljannah 

Firdaus.” 

Jam-Jam was a past Attorney General and 

Commissioner for Justice of Katsina State, 

a Life Bencher and quintessential bar man 

who contributed immensely to the development 

of the Bar by his several thought provoking 

opinions on issues during deliberations 

at NEC and Annual General Meetings 

of the association. 

Some members of the bar have been giving 

tributes to the departed barman. 

“As a man of deep faith, you could say 

passing in the holy month of Ramadan is 

befitting of his values & service. Jam-Jam 

was one of the nicest people you could meet. 

Humble despite his reach; honest to a fault. 

He was on the Open Bar Initiative platform. 

I have ribbed him on occasion but he ways 

could speak truth to power & stand up for 

deep conviction. Fair to a fault & courteous 

without fail. He was a Life Bencher. Terrific 

man. May the Almighty fogrive his flaws & 

grant him Jannatul Firdausi. RIP Jam-Jam.” 

PROFESSOR CHIDI ODINKALU 

“May his gentle soul Rest In Peace. Amen. 

Jam Jam has paid his dues. The Bar and 

the Profession will sorely miss him.” –J.K. 

GADZAMA, SAN 

“Jam Jam was a member of Open Bar Initiative 

and he made great contributions to 

the debates that took place on this platform. 

He is the epitome of Bar leadership as he 

always spoke truth to power. May his soul 

L-R: Ayuli Jemide, Lead Partner, Detail Commercial 

Solicitors and Eddie Avy, overall winner. 

rest in peace.” -SILAS JOSEPH ONU 

“Jam Jam, a quintessential Bar man and 

lover of our profession has been seized by 

death. Oh, may God in his infinite mercy 

grant him eternal rest and forgive him. My 

deepest condolences to the Bar, his branch 

and his entire family.” -LUKA 

“May Allah grant Jam Jam Aljannah fridaus 

and grant all that he left behind the fortitude 

to bear the great loss . Ameen. The ebullient 

Jam Jam was a great friend, ally , admirer 

and friend of the vintage Aketi. The Bar will 

surely miss the consummate Bar Man per 

excellence” -O.J. 

“Jam-Jam was the historian of the Bar. He 

was abreast of all landmark issues pertaining 

to the Bar. He had a way with dates and 

the personalities that shaped Bar events 

and activities. He loved the Bar and attended 

almost all Bar activities in the last 

three decades. May his soul rest in peace. 

–FESTUS O. 

“My condolences to d family of jam jam, 

a bar man to d core. May his soul RIP.” -E. 

Anosike



C002D5556 

BUSINESS DAY 

27 

ARBITRALREVIEW 

Objection to jurisdiction? Speak now, 

or remain silent forever! 

KOLAWOLE MAYOMI 

Despite the increased use of 

arbitration as a mode of commercial 

dispute resolution, the 

delineation of the jurisdiction 

of an arbitral tribunal remains 

a knotty issue. This is because tribunal’s jurisdiction 

(i.e. authority to adjudicate over a 

dispute) sustains the legality of the arbitral 

proceedings. 

A challenge to the jurisdiction of an arbitral 

tribunal is usually a preliminary matter for 

the arbitral tribunal to determine. Section 

12(3) of the Arbitration and Conciliation Act 

provides that it must be raised before the 

arbitral panel in timely manner and cannot 

be raised afterwards unless the grounds for 

delay are justified. 

In Nigerian National Petroleum Corporation 

v. Klifco Nigerian Limited, the Supreme 

Court of Nigeria considered the issue of a 

timely challenge to the jurisdiction of an 

arbitral tribunal. 

Facts 

The Nigerian National Petroleum Corporation 

(NNPC) contracted with Klifco (Nigeria) 

Limited (Klifco) for the supply of twenty-four 

cargoes of Vacuum Gas Oil (VGO) at the rate of 

one cargo per month. The contract was slated 

for two years certain and commenced on 7th 

October 1994. However, as at 1999 NNPC had 

only supplied five cargoes of VGO. Rather than 

sue for breach of contract, Klifco preferred novation 

and parties agreed to substitute the old 

contract with a new contract. The new terms of 

the contract substituted the supply of VGO for 

the supply of 19 cargoes of Low Pour Fuel Oil 

(LPFO) at the same rate. However, while the 

old contract contained an arbitration clause, 

the new contract did not. 

As at 2000, NNPC had failed to supply any 

of the agreed nineteen cargoes of LPFO to 

Klifco, and the matter was referred to arbitration. 

The arbitral tribunal heard the dispute, 

and delivered an award in favour of Klifco. 

Dissatisfied, NNPC filed proceedings at the 

Federal High Court to set aside the arbitral 

award. NNPC argued that the arbitral tribunal 

lacked jurisdiction to entertain Klifco’s claims, 

as the effect of contract novation did not extend 

to the arbitration clause. The Federal High Court 

accepted these arguments, and set aside the 

award aside on this basis. Klifco appealed to the 

Court of Appeal, which allowed the appeal and 

partly upheld the award. NNPC then appealed 

to the Supreme Court of Nigeria. 

The Appeal 

One of the principal issue that was canvassed 

before the Supreme Court was whether the 

Court of Appeal was right to hold that the arbitration 

tribunal had jurisdiction to entertain 

the matter. On this point, NNPC argued that the 

arbitration clause in the first agreement did not 

extend to the new contract and as a result the 

arbitration clause in the old contract could not 

confer jurisdiction on the arbitration tribunal 

in respect of the new contract in the absence 

of the parties’ agreement to extend the arbitration 

clause to the novated contract. Dissenting, 

Klifco argued that the modification of terms of 

the obligations in the original contract with new 

terms did not extinguish the arbitration clause 

and so the arbitration tribunal had jurisdiction 

to entertain the dispute. 

Decision 

The Supreme Court noted that the general 

position of the law is that the issue of jurisdiction 

can be raised at any stage of the proceedings, and 

even on appeal to the Supreme Court for the first 

time. That said, the Court held that the general 

position of law does not apply to arbitration 

proceedings, considering Section 12(3) of the 

Arbitration and Conciliation Act which expressly 

provides that a plea that an arbitral tribunal 

lacks jurisdiction may only be raised before the 

tribunal not later than the time of submission of 

the points of defense. It may, however, be raised 

after the stipulated time if the tribunal finds that 

the delay was justified. The Supreme Court then 

pronounced that: 

“An appeal on the issue of jurisdiction can be 

entertained by the High Court provided there 

was no submission to jurisdiction. A party who 

did not raise the issue of jurisdiction before the 

arbitral panel is foreclosed from raising it for the 

first time in the High Court. The reason being 

that the foundation of jurisdiction in an arbitration 

is submission. In this matter, the appellant 

[NNPC] participated in the arbitral proceedings. 

At no time did he raise the issue of jurisdiction of 

the arbitral panel to hear the dispute. The clear 

interpretation of the appellant’s conduct is that 

it submitted to jurisdiction. It cannot raise the 

issue of jurisdiction on appeal.” 

Comment 

The decision of the Supreme Court in this case 

is highly commendable. The Supreme Court 

made a clear distinction between challenging 

the jurisdiction of court and challenging the 

jurisdiction of an arbitral tribunal. The jurisdiction 

of a court may be raised at any stage of the 

proceedings even up to the Supreme Court. This 

often results in a colossal waste of wasted time 

and efforts if a party waits for the case to climb 

up to the Supreme Court level before raising 

the joker-card of lack of jurisdiction for the first 

time to deliberately scuttle an adverse judgment. 

Whilst this ambush tactic may still hold sway in 

litigation, the Supreme Court has admirably outlawed 

this practice in arbitration proceedings. 

Since the aim of opting for arbitration is to 

settle commercial disputes in a fast and efficient 

manner, a party who disputes the jurisdiction 

of an arbitral tribunal must take timeous steps 

before the arbitral tribunal, within the stipulated 

period, to raise such a challenge. The rule that 

the Supreme Court has laid down is this: a 

belated objection to jurisdiction would not 

be entertained; any party who knows of any 

reason why the Tribunal should not exercise 

jurisdiction should speak up before the 

Tribunal, or be foreclosed from raising such 

objection forever! 

• Arbitral Review is published every fortnight in 

LEGALBUSINESS. The Column highlights topical 

issues, pitfalls and developments relating to the 

law and practice of commercial arbitration. Feedback 

and comments are welcome at: kmayomi@ 

spaajibade.com 

PHOTO FILE 

L-R, Afam Osigwe, Immediate Past General Secretary of the Nigerian Bar Association (NBA), Mba 

Ukweni, SAN and Francis Ekwere, Immediate Past 1st Vice President of the NBA, during the commissioning 

of the NBA Uyo Cooperative House in Akwa Ibom State. 

Constitutional Lawyer and Human Rights Activist, Mike Ozekhome, SAN,in a meetingwith the Lamido 

of Adamawa, His Royal Majesty, Alhaji (Dr) Barkindo Aliyu Mustapha, at the Lamido’s palace in 

Yola, Adamawa state, to discuss unity and peaceful co-existence amongst all Nigerians,irrespective 

of tribe, religion, language, gender and political persuasion.

28 BUSINESS DAY C002D5556 Thursday 22 June 2017 

DOCKET 

Court quashes UACN purchase of Lekki property 

A 

Lagos High Court, Ikeja 

has nullified the sale of 

a parcel of land in Lekki, 

Lagos to UACN Property 

Development Company 

Plc by Knight Rook Limited. 

Justice Abisoye Bashua declared 

the sale null and void, in his judgment, 

following a legal action filed 

against the two defendants by Grant 

Properties Limited and Fibigboye Estates 

Limited over the rightful owner 

of the contested property. 

The court also awarded N20 million 

general damages against the 1st 

defendant (UACN) for depriving the 

claimants of the peaceful and quiet 

enjoyment of the property as well as 

N300, 000 cost. 

In his decision, the judge declared 

that: “The deed of assignment 

assigning 2.4321 hectares of land 

within Igbokushu village, Eti-Osa 

local government area, Lagos within 

the Victory Park Estate to the 1st 

defendant is null, void and of no 

effect. 

“An order is made nullifying 

SEYI ANJORIN, Abuja 

The case against the former 

Attorney-General of the Federation 

(AGF) and Minister 

of Justice Mohammed Adoke SAN, 

a former Minister of Petroleum Resources, 

Dan Etete, Oil giant, Shell 

Nigeria Exploration Production 

Company and Eni Spa and four others 

over their alleged involvement in 

$1.1 billion Malabu oil deal has been 

further adjourned till the October 

26, 2017. 

The adjournment according to 

the Prosecution Counsel, Johnson 

Ojogbane was as a result of the inability 

of the Federal Government 

to secure the attendance of the 

defendants in the matter. 

According to him , most of them 

are outside the country and the 

government is making efforts to 

make then attend their trial or be 

extradited. 

Adoke, who served under former 

President Goodluck Jonathan, is fac- 

SEYI ANJORIN, Abuja 

Jide Omokore, Chairman Atlantic 

Energy Drilling Concept 

Limited, has again for the second 

time been granted permission 

by Justice Nnamdi Dimgba, of an 

Abuja Federal High Court to travel 

out of the country. 

He had earlier in April been 

granted permission to travel 

abroad for medical treatment. 

Omokore is standing trial 

alongside Atlantic energy brass 

development limited, Atlantic 

energy drilling company limited, 

Victor Briggs, Abiyemembere and 

David Mbanefo, on a nine-count 

amended charge of criminal diversion 

of about $1.6billion alleged to 

be proceeds of sale of petroleum 

products belonging to the federal 

the deed of assignment purportedly 

executed by Knight Rook Limited in 

favour of UACN Property Development 

Company Plc., covering 2.4321 

hectares of land within Igbokushu 

village, Eti-Osa local government area, 

Lagos within the Victory Park Estate. 

“An order of perpetual injunction 

is hereby made restraining the 1st 

defendant, its servants, agents and/ 

or privies, successors-in-title and 

assigns, including anyone acting for 

or on their behalf from further encroaching 

or trespassing on the parcel 

of land, measuring approximately 

50.349 hectares situate at Igbokushu 

village, behind Okunnu Housing 

Estate, Lekki Peninsula Scheme 11, 

Government Estate, Eti-Osa area of 

Lagos known as Victory Park Estate 

and covered by certificate of occupancy 

dated December 6, 2002 and 

registered as No. 28 at page 28 in 

volume 2003c in the land registry.” 

The judge also dismissed the 

counter-claim by the 2nd defendant 

affirming that it validly sold the 

property to the 1st defendant. “The 

Malabu oil: Again FG fails to arraign Adoke, Etete and others 

ing two separate criminal charges, 

following his alleged involvement 

in oil bloc fraud. 

He was accused of playing a 

major role in an alleged fraudulent 

deal that saw the transfer of ownership 

of a disputed Oil Prospecting 

License, OPL, 245, to two multinational 

oil companies, Shell Nigeria 

Exploration Production Company 

and Nigeria Agip Exploration Ltd. 

It will be recalled that the prosecution 

had informed the trial 

Judge, Justice John Tsoho of the 

Federal High Court Abuja, that the 

Federal Government is experiencing 

some difficulties in serving the 

former AGF, since he is outside the 

jurisdiction of the court. 

According to the prosecution 

counsel, the Economic and Financial 

Crimes Commission (EFCC) 

has the power to arrest anybody 

anywhere but when the person is not 

within the jurisdiction of the court, 

(outside the country) it becomes 

difficult. 

$1.6bn fraud : For the second time, Omokore gets leave to travel 

government. 

Rotimi Jacobs, prosecuting 

counsel for the Federal Republic 

of Nigeria, had informed the trial 

court at the resumption of sitting 

about the new application seeking 

for the permission, he however 

did not object to it but, that it must 

be undertaken within the court’s 

long vacation due for July 10, 2017 

to September 10, 2017. 

Justice Dimgba in a short ruling 

granted the permission on the 

grounds that Omokore must sign 

an undertaking to embark on the 

trip between July 11, 2017 and 

September 10, 2017. 

The prosecution also informed 

of another application filled by 

the 5th defendant (Abiyemembere) 

challenging the jurisdiction 

of the court, on the grounds that 

counterclaim of the 2nd defendant/ 

counterclaimant is contradictory, 

inconsistent and not cogent and lack 

any evidential value and it is hereby 

dismissed in its entirety,” he held. 

The case of the claimants was 

that the 2nd defendant is the owner 

of the land at Victory Park Estate. 

The claimants obtained load facility 

from four banks and as security and 

in lieu of execution of legal mortgage, 

claimants transferred its shares in 

2nd defendant to the four banks with 

agreement to transfer back the shares 

upon liquidation of the loan. 

A memorandum of understanding 

was executed, which incorporated 

the relationship between the 

claimants and the four banks. The 

project implementation committee 

vested with the control of the Estate 

did not sell any portion of the land 

but one Yemi Adeola and Justina 

Lewa executed a deed of assignment 

to the 1st defendant after the banks 

have transferred the debt to Asset 

Management Company of Nigeria 

(AMCON). 

He also said, if the order seeking 

to arrest Adoke is granted, it will 

become easier for security agents to 

liaise with the International Police 

(InterPol) to initiate extradition 

moves. 

After listening to the submissions 

of the Federal Government, the trial 

Judge, Justice John Tsoho directed 

government to make a proper application 

before the court adding that such 

applications are not done orally. 

The judge also said if Adoke was 

already arraigned before the court 

and was attempting to escape, it 

would have become proper to issue 

such a warrant of arrest. 

EFCC had in December 2016, 

charged nine suspects, including 

the former AGF, Adoke, over their 

alleged involvement in the Malabu 

oil scandal. 

Adoke was accused of illegally 

transferring more than $800 million 

purportedly meant for the purchase 

of the OPL 245 to Dan Etete and 

Malabu Oil. 

the prosecution filed additional 

proof of evidence, which would 

allow the prosecution call more 

evidence. 

Jacobs however sought the 

court for an adjournment to enable 

him file his written address 

in opposition to the application. 

Counsel representing the 5th 

defendant averred before the 

court that, with a new proof of 

evidence being filed before it, 

there was a need for the defendant 

to approach the court for 

interpretation, as the prosecution 

has to proof the need for the additional 

proof of evidence. 

Justice Dimgba adjourned 

hearing on the application challenging 

jurisdiction to June 22, 

2017 and July 5, 2017 for ruling and 

possibly, continuation of trial. 


GLOBAL REPORT 

Divorce and its financial consequences 

are to be administratively separated 

Financial proceedings will be 

‘administratively de-linked’ 

from divorce proceedings in 

the UK, across courts nationally on 

19 June following a successful pilot, 

family division president Sir James 

Munby and HM Courts & Tribunals 

Service deputy chief executive Kevin 

Sadler said, in a letter published on 

Tuesday June 13, 2017. 

The administrative de-linking was 

piloted at the south-west regional 

divorce centre in Southampton last 

month. 

Munby and Sadler said that the 

pilot achieved its aim of introducing 

a more streamlined process, reducing 

by up to two weeks the delays 

experienced by court users as files are 

transferred between courts. 

Days before the pilot began, Mun- 

U.S. Supreme Court strikes down citizenship law 

The U.S. Supreme Court on 

Monday struck down a law that 

makes it easier, in some cases, 

for children born overseas to an unwed 

U.S. citizen mother to acquire 

citizenship at birth than children born 

to an unwed U.S. citizen father. 

The court ruled, in an opinion 

(PDF) by Justice Ruth Bader Ginsburg, 

that the law violates the equal 

protection clause. Ginsburg’s opinion 

was joined in full by Chief Justice 

John G. Roberts Jr. and Justices Anthony 

M. Kennedy, Stephen G. Breyer, 

Sonia Sotomayor and Elena Kagan. 

Justice Neil Gorsuch did not take part 

Nearly half of judges say independence 

not respected by government 

Nearly half of UK judges do not 

believe the government respects 

the independence of the judiciary, 

a Europe-wide benchmarking 

study suggests. 

Responding to the statement ‘During 

the past two years I believe my independence 

as a judge has been respected by 

the government’, 42.7% of UK judges 

‘disagreed or strongly disagreed’. This 

was well behind Poland’s figure of 

73.6% - but compared poorly with 

Sweden’s 3%. 

The survey is the second report on 

the Independence, Accountability and 

Quality of the Judiciary carried out by the 

European Network of Councils for the 

Judiciary (ENCJ). It was published on the 

day that the new lord chancellor David 

Lidington spoke of the need for a ‘strong 

and independent judiciary’. 

The UK was not immune from what 

Law firms test ‘Mansfield rule’ to promote more 

women and minorities into leadership roles 

Thirty large law firms have 

pledged to test a new “Mansfield 

rule” that requires 30 

percent of its leadership candidates 

to be minorities and women. 

The rule is named after Arabella 

Mansfield, the first woman admitted 

to practice law in the United States, 

report the Am Law Daily (sub. req.) 

and the Wall Street Journal Law 

Blog. 

The rule requires women and 

by and Sadler told family division 

liaison judges that the centralisation 

of divorce and dissolution proceedings 

into 11 specialist divorce centres 

in 2015 had ‘shone a spotlight on the 

way in which related financial applications 

are dealt with and it is clear 

that this process can and should be 

improved’. 

Currently, if a contested financial 

application is made, the whole 

proceedings are transferred to a local 

court. The pilot administratively 

de-linked financial proceedings from 

divorce so that the main divorce proceedings 

remained in the specialist 

centre; staff and judiciary at the local 

hearing centres worked independently 

on the contested financial 

proceedings. Consent applications 

remained at the divorce centres. 

in the opinion. 

The law concerns citizenship 

for children born abroad when one 

parent is a U.S. citizen and the other 

is not. 

The law allows unwed U.S. citizen 

mothers to transmit their citizenship 

to children born abroad if the mother 

has lived in the United States for just 

one year before the child’s birth. A 

five-year U.S. presence, including two 

years after age 14, is required for U.S. 

citizen parents if the parent is married 

or the father is unwed (an easing 

of a previous 10-year requirement, 

with at least five years after age 14). 

the report identifies as ‘a number of worrying 

trends... that need to be addressed’. 

One was the number of judges saying 

that over the past two years that they had 

‘been under inappropriate pressure to 

take a decision... in a specific way.’ The 

UK figure was 5.3%; pressure was most 

likely to come from ‘court management’, 

‘government’ and ‘other judges’. 

In Spain, 64.3% of respondents 

agreed or strongly agreed that judges 

had been appointed other than on the 

basis of ability and experience in the 

past two years; in the UK the figure 

was 17.8%. 

Media attacks on judges’ decisions 

are another concern. However only 

5.4% of UK judges believed that over the 

past two years decisions had been inappropriately 

influenced by the media. The 

influence of social media ‘is increasing in 

nearly all countries’, the report notes. 

minorities to comprise at least 30 percent 

of the candidates for leadership 

and governance roles, equity partner 

promotions, and lateral positions, 

according to a press release (PDF). 

Caren Ulrich Stacy, CEO of the 

Diversity Lab, is partnering with the 

law firms in the pilot project. The 

firms will “help us form the idea, put 

it into fruition, see what works, see 

what doesn’t work,” she told the Am 

Law Daily.

C002D5556 

BUSINESS DAY 

29 


TechTalk 


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

Bitcoin plummets unexpectedly after record run 

CALEB OJEWALE 

As at last week Monday, 

the value of 

one bitcoin had 

reached $3,000 

and the impressive 

gains were predicted to 

continue till the cryptocurrecy 

goes as high as $5,000 to one 

bitcoin. By this week, the value 

of bitcoin had nosedived, with 

data from CoinDeck showing 

it initially dropped to as low 

as $2,207 on June 16, and by 

Monday June 19, was hovering 

around around $2,600. 

It would appear the impressive 

gains earlier reported 

are now diminishing. From 

January 1 to June 5 2017, the 

price of bitcoin grew from 

below $1000 to over $2,900, 

a 190 percent growth in less 

than 6months, and if the trend 

continues the price is expected 

to hit $5,000 before the end of 

the year. 

Other crypto-currencies 

also showed some growth, 

such as Ethereum which in the 

same time period grew from 

$8.40 to over $250 per Ether, a 

growth of about 3,000 percent, 

while Stellar Lumens grew 

from $0.0025 to $0.04, a growth 

Information technology professionals’ assembly to hold next week 

CALEB OJEWALE 

Computer Professionals 

(Registration Council of 

Nigeria), the Agency of 

the Federal Government 

charged with the regulation, control 

and supervision of the computing 

profession and practice in Nigeria 

has scheduled its Year 2017 Information 

Technology Assembly/ 

Annual General Meeting with the 

theme, “IT For Good Governance 

And Economic Transformation” 

from Wednesday 28th – Thursday 

29th June, 2017 at the International 

Conference Centre, Abuja. 

Vincent Ele Asor, the president/ 

chairman of council of CPN, said 

in a statement that the IT Professionals’ 

Assembly, which is the 

flagship of all IT programmes in 

Nigeria, is an exclusive networking 

event for Information Technology 

(IT) decision makers, IT consultants, 

upcoming IT entrepreneurs, 

start–ups, IT practitioners, teachers 

and IT Systems administrators. 

The Assembly is also a platform 

for some of the industry’s most innovative 

technology distribution 

and service providers to showcase 

rate of 1,600%. All cryptocurrencies 

appear to be currently 

enjoying an upward 

surge in price, and investors 

are predicting that the trends 

will continue. In the same period 

though, the price of gold 

inched up by a paltry 10%. 

This is however not the most 

recent loss of value by Bitcoin. 

A fortune reports noted that 

since hitting a then record 

high of over $2700 on May 25, 

the digital currency Bitcoin 

had gone into a sharp correction, 

losing nearly 30% of its 

value in just two days, according 

to numbers from Coin- 

MarketCap. A broad range of 

cryptocurrencies, including 

Ethereum, Ripple, Litecoin, 

Dash, and Monero also declined, 

in most cases dropping 

even more steeply. 

Going by antecedents, the 

decline might not be the floor. 

The cryptocurrency rally over 

their products and services; and 

for participants to appreciate the 

emerging technologies, trends, 

and risks that are associated with 

transforming the various industries 

using IT. 

Yusuf Kazaure, MD/CEO Galaxy 

Backbone Limited, is expected 

to deliver the Keynote Address at 

the Assembly. Other sub – themes 

to be considered at the Assembly 

include: Leapfrogging National 

Development Using Technology; 

Transforming National Potentials 

to Social Empowerment and 

Economic Advantage through IT; 

Cyber Infrastructure Protection 

Strategies; Leveraging on Software 

to Achieve Transparency, Trust 

& Good Governance in Nigeria; 

Smarter Environment with Internet 

of Things (IoT); and ‘Fighting 

Corruption with Emerging Technologies’. 

At a recent parley with journalists, 

Vincent Asor enumerated the 

functions and responsibilities of the 

computer professionals’ council to 

include the following: 

*To determine the standards of 

knowledge and skills to be attained 

by persons seeking to become 

members of the computing profession 

and improve those standards 

from time to time as circumstances 

may permit. 

*To secure, in accordance with 

the provision of the Act, the establishment 

and maintenance of 

a register of persons seeking to be 

registered under the Act to practice 

the computing profession and the 

the past six months is strongly 

reminiscent of a Bitcoin bump 

that unfolded from October to 

December of 2013, when the 

price skyrocketed from under 

$130 to over $1100. That was 

followed not just by a correction, 

but by a long, slow 

decline that had prices pared 

back to just over $200 within a 

year, followed by two years of 

steady, but slow, growth. 

It has however been suggested 

that it is unlikely that 

publication from time to time of the 

list of such persons. 

According to him, Act 49 of 

1993, makes it mandatory for all 

persons and organizations seeking 

to engage, or engaged in the 

sale or use of computing facilities 

and the provision of professional 

services in computing as well as the 

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

the same precise pattern will 

repeat itself, mostly because 

the ecosystem of startups and 

services surrounding cryptocurrency 

is vastly more robust 

now than it was four years 

ago. But a vital lesson still 

holds: cryptocurrency prices 

are volatile because very few 

speculators actually understand 

the technology or its 

potential, leaving it vulnerable 

to reactive, emotion-driven 

swings. 

use of computational machinery 

and techniques related thereto to 

be registered by the Council and 

licensed to carry out such activities. 

He stated that, it is illegal to engage 

in computing and professional 

practice without satisfying registration 

and possession of a current 

valid license.


C002D5556 


CITYFile 

Residents protest incessant 

power cuts, over-billing by EEDC 

Two containers fell at Barracks Bus/Stop, along Apapa-Wharf Road, to further worsen the traffic situation in Apapa,Lagos, on Tuesday. 

Pic by Olawale Amoo 

Edo moves to establish cattle grazing agency 

A 

bill for a law to establish the Edo 

State Cattle Rearing and Grazing 

Agency has passed second reading 

on the floor of state House of 

Assembly. 

Bright Osayande (APC-Ovia North 

East 11), who led the debate for the passage 

of the bill, said the incessant killing 

of defenseless farmers and the needless 

destruction of crops by herdsmen was a 

call for concern. 

“The criminal activities of these herdsmen 

have earned the group the reputation 

of being the fourth most dreaded 

group, according to the Global Index for 

Terrorism (GIT). 

Militancy: Army deploys drones 

in riverine areas of Ogun 

RAZAQ AYINLA, Abeokuta 

As part of measures to check the resurgence of 

militancy and criminal activities, including murder, 

kidnapping and looting, in the riverine areas of 

Ogun State, the Nigerian Army has started training 

and deployment of drones, aimed at flushing out militants 

believed to be re-grouping at Iwopin area of the state. 

It would be recalled that militants earlier flushed out 

in Mowe, Ibafo and Arepo areas of the state reportedly attacked 

ill-equipped Marine Police Base located at Iwopin, 

Ogun Waterside, killing a police sergeant and carting away a 

gunboat. The militants also unleashed terror on the residents 

and robbed a filling station in the area. 

The Nigerian Army subsequently battled the re-grouped 

militants as it launched a manoeuvring exercise at Iwopin 

riverine area where the Artillery of Nigerian Army led by Basil 

Adonkie, a brigadier general and commander, 35 Artillery 

Brigade, Alamala, Abeokuta, deployed drones and other 

intelligence security mechanisms to check the militants. 

Speaking with Cityfile in Abeokuta, Adonkie said “the 

exercise is aimed at checking activities of bandits, especially 

the militants in the Makun area and build the confidence of 

the people in the government of the day.” 

He added, “The exercise and other military activities in 

the area will assist in fishing out militants and therefore, 

cooperation of the people is highly solicited for the success 

of the operation. We must also warn the populace not to harbour 

any militants or criminals during and after the exercise. 

“People should remain calm and go about their lawful 

businesses without any fear of molestation or intimidation 

from anyone. The Nigerian Army is ready to protect the 

territorial integrity of Nigeria, and work with other security 

agencies to guarantee security of lives and property across 

the country.” 

“Their activities have taken a different 

dimension as the herdsmen now take 

their cattle to school premises for grazing,’’ 

he said. 

Osayande drew the attention of the 

house to a newspaper publication, which 

drew global attention to the herdsmen’s 

invasion of Ohovbe primary school in 

Ikpoba Okha local government area of 

the state. 

He called on the lawmakers to make 

deliberate efforts at giving members 

of the public a feeling of protection by 

regulating the activities and menace of 

herdsmen through stiff penalties. 

Deliberating on the bill on Tuesday, 

MIKE ABANG, Calabar 

Foly Ogedengbe, the majority leader of 

the house emphasised the need to hold a 

public hearing on the issue, adding that it 

was high time government criminalised the 

unrestrained behavior of the herdsmen. 

Other lawmakers argued in favour of the 

passage of the bill. 

Justin Okonoboh, the speaker, decried 

the spate of incessant killings resulting 

from clashes between farmers and herdsmen. 

Okonoboh emphasised the need for a 

public hearing with a view to engendering 

robust contributions to the bill. 

He, however, referred the bill to the 

house committees on agriculture, environment 

and judiciary for further input. NAN 

5 banished for treason against 

Obong of Calabar 

Following an alleged attempt 

to unseat the Obong 

of Calabar, Ededem Ekpo 

Okon Abasi, five Efik warlords 

of Efe Ekpe Iboku Utan have 

been banished, ostracised and 

stripped of all privileges associated 

with Efik royal ceremonies, 

rituals and events. 

A member of the palace and 

a High Chief in Obong’s Council, 

Etubom Otu Efa, while addressing 

newsmen in Calabar, gave 

the names of those sanctioned as 

Etubom Okon E J Eyamba, Chief 

Adam Efa Eyamba, Chief Ekpenyong 

E. Eyamba, Chief Inyang 

Henshaw and Chief Joseph Ene Ita 

together with many of their lodge 

members. 

Etubom Efa said the accused 

“committed sacrilege, abomination 

and treason by releasing 

Mmonyo when the Obong of 

Calabar is still alive and when the 

Iyamba of Efe Ekpe Iboku Utan 

is not dead, and further using it 

to pull an alien Ekpe and person 

unconnected to Efik Royalty,” and 

that “the privilege of custody of 

Mmonyo ubong Efik has been 

withdrawn from Efe Ekpe Iboku 

Utan till further notice.” 

He said Mmonyo, which is always 

in custody of Iboku Utan Royal 

House, is seen as a sceptre of kingship 

which could only be brought 

out from its shrine after the death of 

an Obong or during coronation of 

another Obong. In Efik tradition, the 

Mmonyo must not be seen when the 

occupant of the throne is still alive. 

Bringing it out publicly is regarded 

as a declaration of the demise of the 

occupant of the throne, hence a very 

serious crime. 

Another chief, Etubom Essien 

Efiok, explained that the alleged acts 

of sacrilege were very serious and 

carry grave implications for the Efiks 

that the Obong of Calabar himself 

had to lead the Ekpe Efik, other royal 

lords and Etuboms “to stand up, do 

the needful and inform the ancestors 

of steps taken to cleanse the land.” 

He added that prior to this, the 

Ekpe Efik and other Ekpe principalities 

in Calabar metropolis and Iboku 

Esit Edik had “placed Efe Ekpe Iboku 

Utan leaders under combined, universal 

Ekpe sanction on January 28, 

2017,” and that the sanction “means 

no Ekpe initiate is allowed to invite, 

visit, sit, play or interact with Efe Ekpe 

Iboku Utan or its Mbong Ekpe, in any 

Ekpe related matter till further notice.” 

GODFREY OFURUM, Aba 

Residents of Crystal Palace 

area of Aba-Port Harcourt 

road have decried incessant 

power cuts and high 

electricity billing by the Enugu 

Electricity Distribution Company 

(EEDC). 

The residents also appealed to 

EEDC to install new transformers in 

the area, noting that the one serving 

them at the moment is small and 

always overloaded. 

Chike onwuka, a trader and one 

of the protesters, attributed incessant 

power cuts in the area to overloading 

of the transformer. 

He also argued that consumers 

are paying through their noses 

for electricity not utilised and appealed 

to the management of EEDC 

to be compassionate with consumers, 

by not being arbitrary with their 

billing. 

In his words, “The tariff is high, 

despite the fact that power is not 

regular. “For the month of May, 

my bill was N12,000, just for one 

month, for a 3 bed-room apartment 

with no heavy equipment in it”. 

“Even the rationing, which the 

company deployed to reduce overloading 

of the transformer is not 

working. The arrangement here is 

that we take 15 days of the month, 

while another street takes 15 days 

as well, but out of the 15 days, we 

hardly see light for more than 2 

days”. 

Meanwhile, the EEDC has attributed 

their inability to deploy 

prepaid meters to all electricity 

consumers in Aba to high cost of 

meters. 

Vincent Ekwekwu, manager, 

operations, Enugu Electricity Distribution 

Company (EEDC), who 

revealed during a town hall meeting 

in Aba, explained that the company 

spent about N10 billion in 2016, to 

acquire prepaid meters to ensure 

satisfactory services to its customers, 

adding that every customer 

would be metered with time. 

Eid-il- Fitri: Ambode 

to host Muslims 

Lagos State governor, Akinwunmi 

Ambode is to celebrate 

with Muslims in the 

state, by hosting devotees 

to Eid-il-Fitri party in designated 

centres across the 20 local government 

areas of the state. 

A statement from the state ministry 

of Home Affairs said all Muslims 

in Lagos, after observing the Eidil-Fitri 

prayers on Sunday, June 25, 

2017, were expected to attend the 

get-gogether, from 11 am to 2pm, 

at a centre that falls within their 

respective local governments. 

The state government had always 

been hosted the Eid-il Fitri gettogether, 

in the State House, Ikeja, 

but the Ambode led administration 

is decentralising the hosting ceremony 

to the grassroots, to cover 

all 20 local government areas, to 

enable as many Muslims as possible 

get involved and be part of the 

celebration.


C002D5556 

BUSINESS DAY 

31 

GARDEN CITY 

BUSINESS DIGEST 

Ecuador courts PH Chamber 

of Commerce on investment hubs 

- Targets partnerships on Panama hats, chocolate, coffee, tuna fish, etc 

IGNATIUS CHUKWU 

Ecuador seems to target 

two major business 

cities in the 

north and southsouth 

Nigeria one of 

which is Port Harcourt, to build 

business hubs that would promote 

commerce with Nigeria. 

This may involve the processing 

of key commodities such as 

cocoa into chocolate, all kinds 

of coffee, tuna fish, prawns, etc. 

The most exciting could be a 

direct channel of importing 

Panama Hats which actually 

come from Ecuador. 

In this new push, Ecuador 

seems to court Port Harcourt 

and Kano business hubs. 

Its ambassador to Nigeria, 

Leopoldo Rovayo Verdesoto, 

led a delegation of embassy 

staff to the leadership of the 

Port Harcourt Chamber of 

Commerce in the week, after 

Kano, all to deepen trade between 

the two countries 

The ambassador said his 

team was showcasing investment 

opportunities in Ecuador, 

‘highlighting opportunities 

and policies put in place 

by the Ecuadorian government 

for smooth running of businesses 

for investors and the 

Chamber. 

He dropped a hint. “Let 

me tell you a secret, the hats 

imported through the Panama 

Canal are sourced from Ecuador, 

but because it is transported 

through the Panama Canal, 

it is brandished as Panaman 

Port Harcourt by Boat 

With 

IGNATIUS CHUKWU 

In the heat of the Boko 

Haram violence, militancy 

in the south-south, 

violence and killings in 

the east, herdsmen menace 

in the middle belt, and other 

mass destructions going on 

in other areas of the country, 

this column recommended 

Ecuadorian ambassador to Nigeria, Leopoldo Rovayo Verdesoto (r) with PHCCIMA president, Emi Membre- 

Otaji (l) in Port Harcourt 

Hat. Basically we can directly 

have an arrangement and collaboration 

to supply these hats 

in Nigeria because we are here 

to build bridges and partnerships 

and connect Ecuador to 

Nigerian businesses.” 

Making further remark during 

the visit at the PHCCIMA 

Secretariat, Verdesoto commended 

efforts by the PHC- 

CIMA in providing significant 

support to businesses and 

contributing to stimulating the 

local economy which according 

to him falls within statutory 

chamber objective. 

He said PHCCIMA was 

strategic to his pursuit 

of healthy partnership as a 

chamber that has consistently 

maintained growth as the 

second largest and most active 

Chamber of Commerce in 

Nigeria. 

Ecuador, according to 

him, has a lot of prospects 

which have been enhanced 

with government effort to promote 

public policies focused 

on knowledge and innovation, 

diversification, partnerships, 

security and incentives for 

foreign public-private investments 

among others. 

According to the Ecuadorian 

envoy, “We are interested 

in export/import from both 

countries in products like 

shrimps, tuna fish, straw 

hats, palm hats, all varieties 

of coffee, prawns; even in 

the area of partnering to tap 

from the huge value-chain in 

cocoa production, and chocolates 

which Ecuador is wellknown 

for- as well as other 

products that can interest the 

state and Nigeria as a whole.” 

It was gathered that Ecuador 

would like Nigerian investors to 

try the business environment 

it has created. The country 

could also link their investors 

to build plants in Nigeria with 

local businessmen for products 

where Ecuador has achieved 

comparative advantage in efficiency. 

Receiving the ambassador 

and his delegation, the President 

of Port Harcourt Chamber 

Of Commerce, Emi Membere- 

Otaji, a medical doctor cum 

investor, expressed gratitude 

for forging a relationship and 

creating awareness about 

Ecuadorian investment opportunities 

and partnerships. 

Membere-Otaji said it was 

evident that PHCCIMA has 

built significant reputation 

in partnerships plus requisite 

knowledge, expertise and 

experience needed in virtually 

all areas of human endeavor. 

He said: “In PHCCIMA, our 

major objective is to ensure 

that businesses thrive and to 

create opportunities. I want 

to assure you we will take this 

message to our members and 

begin to peruse into potent 

areas we can partner and 

invest. My distinguished ambassador, 

you have come to 

the main stay of investors in 

the country. Apart from being 

the capital of oil and gas, Port 

Harcourt is the commercial 

nerve centre for a variety of 

businesses. So, this is home 

to businesses and we will 

partner with you and ensure 

we further strengthen 

the ties”. 

PHCCIMA treasurer, Maraizu 

Uche, suggested the constitution 

of a bilateral committee 

between the chamber and Ecuador 

businesses to facilitate 

healthy partnership. PHC- 

CIMA, according to him, 

has established high degree of 

credibility over the years and 

this is why it has continued to 

soar and attract collaborations 

from countries and groups of 

repute. “We will like to have a 

sectoral breakdown of interest 

areas to enable interested investors 

to narrow their search”. 

More on Victims’ Compensation Scheme 

a National Victims Compensation 

Scheme (NVCS) 

to reduce pain, anger, desperation 

and vengeance. 

Anger was building up. The 

column suggested that a 

high-powered committee 

be set up to receive claims 

along laid down rules and 

recommend compensation 

to worthy victims. 

The column admits that 

there are provisions for victims 

to claim from convicted 

offenders and other insurance 

provisions for losses but 

found that not is the process 

too slow and ineffective but 

that unknown offenders like 

terrorists do not stay behind 

to pay compensation. 

Immediately after the 

publication, the then presi- 

dent, Goodluck Jonathan, 

merely asked the panel he 

set up to rehabilitate Boko 

Haram members to also help 

their victims. That was neither 

far reaching nor fundamental 

enough. Of course, 

the move stopped at pronunciation 

stage. It needed to 

deep thinking; a bill would be 

sponsored, and an agency set 

up with strict rules to avoid 

abuse or manipulation. It 

was suggested that a percentage 

of the fund be deducted 

from the allocations of states 

where the losses took place. 

There are reasons for this. 

Nigeria hardly has a mechanism 

for harvesting ideas 

from citizens. 

Now, more cries are ringing 

out from injured quarters. 

Many are angry that each 

time a scheme is rolled out, it 

is always for those who killed 

and maimed; Boko Haram 

fighters being paid to stop 

killing, militants being paid 

to stop destroying pipelines, 

cultists being paid to stop 

mayhem, etc. Those with 

peaceful agitations hardly 

get attention, let alone compensation, 

according to the 

erudite senator, Magnus Abe, 

echoing what MOSOP’s Ledum 

Mitee shouted for years. 

In all of this, people wonder 

what is there for the victims 

of these mass killings and 

destructions. People lost 

loved ones, people lost their 

whole livelihoods, businesses, 

property, etc, and nobody 

says anything about it. 

We have continued to 

argue that the theory of 

Victimology warns that if a 

victim is not properly pacified 

and rehabilitated, he 

could become the offender 

of tomorrow and pile up his 

own victims. A key theory 

in Criminology is that the 

State should mete enough 

punishment to an offender 

so as to pacify his victim. 

This is because before State 

punishment was introduced, 

it was the duty of a victim or 

his family to avenge harm. 

The State came in to halt this 

and would decide what measure 

of harm to visit on an 

offender to pacify the victim 

in such a way that urge for 

vengeance does not continue 

in the heat. 

Another day 

for widows 

- ‘You will never walk alone’, says 

Eugenia Marcus of Freshview 

Most women who 

lost their husbands 

end up catering 

for the kids 

alone, especially in the new 

African family system where 

inheriting wives seems to die 

fast. This has turned widows 

to single parents for a life time. 

Now, a non-governmental 

organization (NGO), Freshview, 

seems to offer a fresh 

approach to the issue of widowhood 

by offering support 

to them in terms of training, 

skills, and empowerment to 

forge ahead. This could be because 

she who wears the shoe 

knows where it pains. Other 

groups including Hearts run 

by a female pastor, Joy Azaka, 

have floated foundations and 

help widows’ nights in Port 

Harcourt. This is another day 

for them. 

The founder of Fresh View, 

Eugenia Marcus, is a widow, 

too. She may have found a way 

to break through the shackles 

and wants to liberate other 

widows through bead making, 

soap, pastry making, juice, 

make-up, etc. 

Marcus would not want 

to talk alone, and so, she has 

lined up one of Nigeria’s most 

captivating female motivational 

speakers, Tara Fela-Durotoye, 

founder and CEO of 

the House of Tara, as keynote 

speaker. Fela is used to Port 

Harcourt and its female entrepreneurs 

eager to rise above 

poverty. 

Freshview Empowerment 

Initiative hopes to groom widows 

into a new army of entrepreneurs 

and winners of bread 

with ease to make widowhood 

less torturous. 

Government also introduced 

rehabilitation of an offender 

in addition to reduce 

his tendency to do it again, 

but the principal aim is to 

take vengeance out of the 

hands of the victim into the 

hands of constituted authority 

to avoid ‘do me I do you’. 

In all of this, the victim 

should be the principal focus/person 

in a crime, not 

the offender. There is urgent 

need for a national scheme 

to compensate victims of violence 

from unknown sources 

and to strengthen the punishment 

system and getting 

claims from known offenders 

and/or their estates. (This 

suggestion can be expanded 

and submitted if the government 

should care).



Harvard 

Business 

Review 

Global Business Perspectives 

CONNECTING THE WORLD ONE BUSINESS AT A TIME 

A British election delivers a new shock to the uncertain global economy 

To a global economy 

already amply stocked 

with anxiety-provoking 

variables, Britain added 

another with its recent 

election. 

A vote designed to bolster 

the government’s mandate instead 

yielded fundamental confusion 

over who is in charge as 

the nation prepares for fraught 

negotiations in its pending divorce 

from the European Union. 

Prime Minister Theresa May 

had called the election on the assumption 

that her Conservative 

Party would emerge stronger, solidifying 

her negotiating position. 

Instead the electorate’s stunning 

rebuke of her leadership has left 

her relying on the support of a 

small, socially conservative rightwing 

party in Northern Ireland in 

order to form a government, intensifying 

uncertainty about future 

commercial dealings across 

the English Channel. 

Investors took the latest turmoil 

in Britain as a prompt to unload 

the British pound. As European 

markets began trading on 

the day after the snap election, 

the currency slipped as much as 

2% against the dollar. The country’s 

benchmark stock index, 

however, gained around 1%. Analysts 

said that the rise occurred 

because many of the companies 

that make up the index do a majority 

of their business overseas 

and therefore benefit from a 

cheaper pound. 

It may also have been because 

the shocking electoral 

outcome has the potential to 

diminish the looming economic 

costs of Britain’s exit from the 

European Union, commonly 

known as Brexit. It has enhanced 

the possibility that a chastened 

government led by May will now 

take a less confrontational approach 

to Europe and seek a way 

to keep Britain within the bloc’s 

large single marketplace. 

As Britain prepared for its 

face-off with Europe, the prime 

President Donald Trump and British Prime Minister Theresa May walk along the 

West Wing Colonnade at the White House in Washington. 

minister was adamant that her 

country would impose strict 

limits on immigration, a posture 

seemingly enhanced by recent 

terrorist attacks. However, 

limiting immigration appeared 

certain to cost Britain inclusion 

in the European single market, 

a swath of the globe holding 

some 500 million relatively affluent 

consumers. 

European authorities consistently 

have emphasized that 

Britain’s continued inclusion 

in the single market would require 

that it abide by the bloc’s 

rules — not least, a provision 

that people be allowed to move 

freely within its confines. 

In the parlance of the moment, 

Britain appeared destined 

for a so-called “hard Brexit,” in 

which it would sever itself from 

the single marketplace, raising 

the prospect that ultimately tariffs 

might constrain trade across 

the English Channel. 

This redrawing of the basic 

geography of European commerce 

was playing out just as 

President Donald Trump was 

disavowing regional trade deals 

across the Atlantic and Pacific, 

while variously threatening 

trade hostilities with Canada, 

China, Germany and Mexico. 

The results of this election 

could change that trajectory, 

however. 

It is unclear how long May’s 

government will hold together. 

Even with the support of the 

Democratic Unionist Party from 

Northern Ireland, it retains only 

a narrow majority in parliament. 

However, the unexpected new 

political configuration might 

compel Britain to relinquish its 

pursuit of immigration limits in 

an effort to keep itself within the 

single market. 

In short, the election has 

complicated the assumption 

that Britain is headed irretrievably 

toward the exits, producing 

a moment in which seemingly 

everything may be up for reconsideration. 

Perhaps counterintuitively, 

however, the election results 

also appeared to increase the 

possibility of an unruly Brexit in 

which Britain crashes out of the 

European Union absent a deal 

governing future interaction. 

May formally initiated the divorce 

proceedings in March, setting 

the clock ticking on a twoyear 

negotiating window within 

which Britain and Europe must 

settle financial terms and strike 

an agreement on trade. That was 

always going to be complicated, 

being subject to the influence of 

domestic politics in each of the 

other 27 members of the European 

Union. 

Now the talks are to unfold 

in an atmosphere in which May 

must tame an unruly party 

whose fiercest advocates for 

Brexit may be emboldened by 

her narrow majority, with the 

prospect of still another election 

later this year. All of this heightens 

the possibility that the twoyear 

clock may expire without a 

deal, a scenario known in Brexit 

vernacular as “going over the 

cliff edge.” As the metaphor implies, 

it could get ugly. 

Britain now sends nearly 

half its exports to the European 

Union, a flow of goods that 

would be impeded by its departure 

from the single market. 

London’s future as a dominant 

global financial center 

also would be imperiled. Global 

banks have established regional 

headquarters in the city, relying 

on so-called passports that allow 

them to serve clients across 

Europe as if the bloc were one 

country, with a single set of regulators. 

If Britain abandons Europe 

without a deal, the banks 

would have to satisfy regulators 

in multiple countries. Many of 

the transactions they now handle 

in London for European clients 

would be effectively illegal. 

Worries about the economic 

impact of Brexit have 

been weighing heavily on the 

pound, which plunged after the 

June 2016 referendum that unleashed 

Brexit. With Britain at 

risk of suffering barriers to trade, 

it has lost some of its considerable 

luster as a place for companies 

to invest, making its money 

a less desirable currency to hold. 

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

The British election has 

played out even as other sources 

of uncertainty have gnawed at 

the global economy. 

Beyond his bellicose threats 

of confrontation on trade, President 

Donald Trump has revoked 

American participation in the 

multinational Paris Accords to 

combat climate change, heightening 

a sense that a global order 

long shaped by American engagement 

now is fundamentally 

uncertain. 

Perpetual existential threats 

to the euro, the currency shared 

by 19 European countries, were 

eased last month by the election 

in France, which saw the defeat 

of right-wing candidate Marine 

Le Pen, who had threatened to 

pull her nation out of the common 

currency. However, elections 

due in Italy later this year 

or early in 2018 may elevate the 

Five Star Movement, which has 

been gaining strength in part 

because of its talk of scrapping 

the euro. 

Add to the list of variables the 

fact that now Britain is scheduled 

to sit down with European 

leaders to haggle over Brexit 

only days after its leadership 

suffered a major setback at the 

polls. 

The key question is whether 

this latest wave of uncertainty 

marks a step back from Brexit, 

one that could restore a sense of 

calm, or whether it means more 

chaos at a time when the world 

craves capable leadership. 

“The outlook for Brexit is 

now very unclear,” said Mujtaba 

Rahman, managing director for 

Europe at Eurasia Group, a risk 

consultancy, as the sun rose over 

London. “The odds of a softer 

Brexit have increased as a result 

of the outcome last night. At the 

same time, it also does increase 

the odds of a cliff-edge Brexit.” 

(Peter S. Goodman is a London-based 

economic correspondent for The New 

York Times.)


33



C002D5556 

China companies to get greater global 

scrutiny after msci lays out red carpet 

GREGOR STUART HUNTER 

MSCI Inc.’s MSCI -2.44% 

decision to include 

mainland Chinese 

shares in its global 

benchmarks for the first time could 

prompt changes to how companies 

are run, even if the initial amount of 

capital inflows won’t be enough to 

effect a sizable shift in the country’s 

markets, analysts and brokers said. 

One of the world’s leading index 

providers, MSCI said overnight that 

it would admit 222 Chinese stocks 

to benchmarks such as its Emerging 

Markets Index, which is tracked by 

funds with some $1.6 trillion of assets 

under management world-wide. 

The approval, which came after 

three years of rejections by MSCI, 

was greeted with a shrug by investors 

Good at texting? It might land you a job 

KELSEY GEE 

Your next job interview might 

happen via text message. 

Srsly. Claiming that prospective 

hires are too slow 

to pick up the phone or respond to 

emails, employers are trying out apps 

that allow them to screen candidates 

and conduct early-stage interviews 

with texts. 

“People don’t want to have that 

ten-minute [phone] conversation 

any more if they could just reply 

with a quick text,” said Kirby Cuniffe, 

chief executive of staffing firm Aegis 

Worldwide LLC. After Aegis recruiters 

reported that fewer potential 

hires were answering their phones, 

the firm decided to try texting. Since 

March, Indianapolis-based Aegis 

and Priceline Group ’s restaurantbooking 

service OpenTable have 

been using Canvas, a messaging 

app from Canvas Talent Inc. for textbased 

job interviews. 

The app suggests interview quesin 

mainland China on Wednesday. 

By the midday break, the Shanghai 

Composite Index rose 0.2%, while its 

Shenzhen counterpart gained 0.1%. 

The tepid response was viewed 

in the market as a reflection of the 

relative caution apparent in MSCI’s 

decision. After discussions with 

major fund managers including 

BlackRock, the index provider said it 

would admit roughly half the largest 

number of companies it considered 

including in past years. 

MSCI estimates some $17 billion 

will flow into Chinese markets—both 

from passive funds that automatically 

track its indexes and active fund 

managers—when the country’s 

stocks are included a year from now. 

That is a fraction of the Shanghai and 

Shenzhen markets’ combined $7.5 

trillion market capitalization. 

tions employers can use, such as: 

“What motivates you?” 

Its software analyzes candidates’ 

responses. Interviewers can 

rate answers with a thumbs-up or 

thumbs-down visible only to the 

employer and share transcripts 

of those text exchanges with coworkers. 

Canvas charges employers 

around $300 per recruiter, and 

competes with similar apps such 

as Monster Worldwide Inc.’s Jobr. 

The use of smartphone-based 

tools for job interviews shows how 

employers are trying to adapt to 

young workers’ communication 

habits. Some 12% of millennials— 

defined as those born between 

1980 and the early 2000s—prefer 

the phone for business communication, 

according to a 2016 report on 

internet trends from venture-capital 

firm Kleiner Perkins Caufield & Byers. 

By contrast, 45% prefer chatting 

online or exchanging messages by 

email or text. 

Read Ambitiously 

Oil returns to bear market 

STEPHANIE YANG, 

The cartel’s output cut “has The oil market has also been 

been deemed an OPEC failure and more volatile this spring. Traders 

ALISON SIDER & TIMOTHY PUKO 

a U.S. production win,” said Tony have crowded into bullish positions, 

only to reverse suddenly 

Headrick, energy analyst at CHS 

Oil prices are back in bearmarket 

territory, frustrat- 

Hedging. 

when the market failed to respond 

While oil prices have enjoyed to positive data or news that OPEC 

ing OPEC members that 

gains in short spurts over the past was extending its cuts. Tuesday’s 

cut production in an attempt 

to boost prices and renewing 

year, U.S. prices closed down 2.2% move marked oil’s eighth loss 

to $43.23 a barrel Tuesday. They of more than 2% in the past two 

fears that falling prices could spill 

have fallen in four of the past five months. 

into stocks and other markets. 

sessions to a new low for the year. Investors are starting to worry 

A persistent glut has weighed 

Prices are down 20.6% since Feb. that oil’s steady declines may start 

on prices for most of the past three 

23, marking the sixth bear market to drag down other markets. When 

years, a blow to investors who believed 

that the Organization of the 

for crude in four years and the first the oil-price plunge gathered steam 

since August. Crude prices have lost at the end of 2015, analysts blamed 

Petroleum Exporting Countries’ 

62% since settling at $115.06 a barrel 

three years ago. A bear market is in other commodities, emerging 

crude in part for sparking selloffs 

move this year to limit production 

would provide relief. 

typically defined as a decline of 20% markets and other risky assets. 

Instead, U.S. producers ramped 

or more from a recent peak, while a The S&P GSCI index, which 

up production when the world was 

bull market is a gain of 20% or more broadly tracks commodity prices, 

already swimming in oil as OPEC 

from a recent trough. 

fell 1.2% Tuesday. The S&P 500’s 

members, Russia and other producing 

nations curtailed output. 

“We’re seeing this decline amid energy sector, already the worstperforming 

group of stocks in 

some major OPEC production 

U.S. oil production is up 7.3% to 

restraints,” said Jim Ritterbusch, the index, dropped an additional 

9.3 million barrels a day since OPEC 

president of energy-advisory firm 1.2%. Seven out of the 10 worstperforming 

stocks in the S&P 500 

announced plans in November to 

Ritterbusch & Associates. “That’s 

cut output, and the number of active 

rigs in the U.S. is at a two-year 

the huge difference” compared with this year are energy stocks, according 

to FactSet. 

previous bear markets. 

high. 

Forget trump-generated volatility. The world is awash in calm 

STEVEN RUSSOLILLO 

Investors had hoped the U.S. 

presidential election would 

usher in a new bout of market 

volatility. Instead, calm not only 

has persisted, but has spread. 

Based on one commonly used 

measure, Asian equities are near 

their least volatile this century. In 

Europe, large price swings in eurozone 

stocks have largely subsided. 

And in the U.S., Wall Street’s “fear 

gauge,” known as the VIX, has been 

trading near historic lows for much 

of the year. 

“A very supportive Trump trade 

is gone,” said Dwyfor Evans, head 

of macro-strategy for Asia Pacific 

at State Street Global Markets in 

Hong Kong. “Nobody talks about it 

anymore. Instead, people are getting 

concerned that this has been 

a very extended period without 

any adverse reactions in markets. 

They don’t want to get caught when 

things turn.” 

The phenomenon—which analysts 

attribute to a confluence of ongoing 

central bank support for markets, 

improving corporate earnings 

and, some say, misguided investor 

complacency—marks a turnabout 

from what investors expected last 

year after Donald Trump won the 

U.S. presidential election. 

Then, investors hoped Mr. 

Trump’s growth plan, combined 

with his unconventional approach, 

would generate outsize swings and 

restore the potential of individual 

stock picking, as investors could 

wager on which companies and 

sectors would benefit or suffer most. 

While the U.S. stock market has 

risen since then, volatility hasn’t. 

That is because without the significant 

policy changes that were 

expected by investors from Mr. 

Trump, easy central bank policies 

have continued to be a dominating 

influence on markets, buoying asset 

classes. 

The calm, analysts say, is one 

reason investors are intrigued with 

markets like that for bitcoin. That 

virtual currency has moved this 

year by as much as 14% in a day. It 

topped $3,000 last week and then 

promptly fell 27% before rebounding 

a bit.


BUSINESS DAY 35 

Read Ambitiously 

Barclays, four former top executives charged with 

fraud over fundraising with Qatari investors 

MAX COLCHESTER & MARGOT PATRICK 

British prosecutors charged 

the former chief executive of 

Barclays PLC with fraud and 

illegal payments, the most 

prominent and most senior banker 

to be charged with crimes relating to 

the global financial crisis. 

John Varley, Barclays’ chief from 

2004 to 2011 and a longtime member 

of London’s financial firmament, 

was charged Tuesday alongside 

three other former Barclays executives 

and the bank itself over a cash 

infusion that rescued Barclays at 

the peak of the financial crisis. The 

men face jail time if convicted, and 

Barclays could be fined. 

Britain’s Serious Fraud Office has 

spent five years probing how Barclays 

wooed Qatari investors to prop 

up the bank during the 2008 financial 

market meltdown. In total, Barclays 

raised £11.8 billion ($15 billion) from 

How Amazon made some shorts a lot of money 

BEN EISEN 

A 

plunge in shares of grocers 

and other retailers 

netted short sellers a lot 

of money after Amazon. 

com announced a deal to buy 

Whole Foods Market on Friday. 

Investors betting against shares 

of food and staples retailers within 

the S&P 500, which includes 

Whole Foods and 33 other companies, 

made nearly $80 million 

between Friday and Monday, according 

to IHS Markit data. 

While Amazon’s deal for Whole 

Foods gave to many of the short sellers, 

it also took away. Whole Foods’ 

29% share price increase Friday 

subtracted $186.2 million from the 

shorts’ profits in the sector. A 1.3% 

rise in the shares on Monday subtracted 

another $7.6 million. 

Investors viewed Amazon’s 

investors through two emergency 

cash calls, in June and October 2008. 

To seal the latter of those transactions, 

Barclays said in filings it paid 

£322 million in “advisory services” 

to Qatari investors—an agreement 

that wasn’t initially disclosed to 

shareholders, Barclays has acknowledged 

in filings. In November 2008, 

the bank provided a $3 billion loan 

facility to the State of Qatar, according 

to the Serious Fraud Office. The 

charges filed on Tuesday relate to 

the payment and the loan, the fraud 

office said. 

The Serious Fraud Office charged 

the bank, the former chief executive 

John Varley, former senior investment-bank 

executive Roger Jenkins 

and two other former executives with 

conspiracy to commit fraud. Messrs. 

Varley and Jenkins, along with the 

bank, were charged with providing 

unlawful financial assistance in 

connection with the $3 billion loan. 

acquisition of Whole Foods as a 

threat to other grocers, already 

suffering from increased competition 

and narrow margins. Costco 

Wholesale fell 7.2% on Friday, 

while CVS Health dropped 3.8%, 

Kroger sank 9.2% and Wal-Mart 

Stores slid 4.7%. The tremors were 

felt across most of the group of 

stocks at the end of last week. 

Shares fell as the companies, 

“digested the disruptive potential 

of the sector’s new well-capitalized 

interloper,” said Simon Colvin, 

vice president at IHS Markit, 

in a report. 

Short sellers borrow shares to 

sell them, hoping to buy them back 

at a cheaper price later and pocket 

the difference. If the stock rises, as 

it did in Whole Foods’ case, shorts 

lose money. If the stock falls, as the 

grocery store shares did, they can 

make big gains. 

Fed’s Evans says rate rise could wait until December 

MICHAEL S. DERBY 

Federal Reserve Bank of 

Chicago President Charles 

Evans said Tuesday that the 

U.S. central bank can wait 

until the end of the year before 

making the decision to raise rates 

again, while adding it could start 

reducing the size of its balance sheet 

Bank of England governor sees weak wage growth delaying rate rises 

PAUL HANNON 

Bank of England Gov. Mark 

Carney on Tuesday said 

that while rate setters’ tolerance 

for above-target 

inflation is coming to an end, it is 

too early to raise the key interest 

rate for the first time in a decade. 

In a rescheduled speech to 

bankers at Mansion House in London, 

Mr. Carney said weak wage 

before that. 

“We are now at a point where 

we can afford, having raised the 

rates twice [in 2017], we can wait 

a little bit” to see if unexpectedly 

weak inflation over recent months 

starts to perk back up, Mr. Evans told 

a gathering of Wall Street Journal 

reporters. He said it is possible “we 

could wait until the end of the year” 

growth raised questions about the 

strength of domestic inflationary 

pressures, and he was unsure how 

the economy would respond to 

talks between the U.K. government 

and the rest of European Union on 

the terms of their separation. 

“From my perspective, given 

the mixed signals on consumer 

spending and business investment, 

and given the still subdued 

domestic inflationary pressures, 

and next move interest rates higher 

at the December meeting, if that is 

what the economy’s performance 

calls for. 

“We’ve had too many experiences” 

of forecasting higher inflation 

only to see it fall short of expectations, 

Mr. Evans said as part of his 

argument that the Fed has time 

to decide on its next interest rate 

action. And even if the Fed holds 

steady for a while, he observed 

the central bank’s official forecasts 

“don’t say when [increases] are going 

to take place.” A year-end move 

would still conform to what is the 

current Fed outlook, he said. 

The official was interviewed 

in the wake of last week’s pivotal 

Federal Open Market Committee 

meeting. At that gathering, officials 

boosted their short-term interest 

rate target range for the second time 

this year, to 1% and 1.25%, and laid 

out a plan for reducing their $4.5 

trillion balance sheet, most likely 

later this year. Mr. Evans is currently 

an FOMC voting member. 

The Fed also signaled that most 

officials are looking to around 

one more rate increase in 2017, 

maintaining a view policy makers 

have held for a while now. But that 

outlook is increasingly being called 

into question in light of a spate of 

recent economic data that shows 

inflation trends cooling rather than 

rising back to the central bank’s official 

2% rise target. 

That has caused some to question 

whether the Fed should hold off 

on raising rates again until there is 

firmer evidence inflation is indeed 

moving back to desired levels. Last 

Friday, Minneapolis Fed chief Neel 

in particular anemic wage growth, 

now is not yet the time to begin 

that adjustment,” he said. 

After Mr. Carney’s comments 

the pound fell 0.5% to $1.2674. 

The pound’s depreciation since 

the June 2016 vote to leave the EU 

has pushed up import prices and 

inflation. At its meeting earlier 

this month, the BOE’s Monetary 

Policy Committee voted to leave 

the key interest rate unchanged 

at a record low of 0.25%. 

However, three members dissented 

in favor of raising the Bank 

rate, the largest vote for such a 

move since the central bank last 

tightened policy in July 2007. 

“Different members of the 

MPC will understandably have 

different views about the outlook 

and therefore on the potential timing 

of any Bank rate increase,” Mr. 

Carney said. “But all expect that 

any changes would be limited in 

scope and gradual in pace.” 

Mr. Carney voted to leave the 

rate unchanged, but his comments 

suggest he views an increase 

as inevitable, although 

possibly some months away. 

“Arguing to wait and see how 

the economy will react to the Brexit 

negotiations—which have only 

just begun and will last at least two 

years—suggests that Carney may 

be prepared to delay raising rates 

for a long time,” said Allan Monks, 

an economist at J.P. Morgan .

36 BUSINESS DAY C002D5556 

NEWS 

CBN promises to assist Aba entrepreneurs 

… takes financial inclusion to Ogun farmers, SMEs 

UDOKA AGWU, UMUAHIA & HOPE MOSES-ASHIKE, LAGOS 

Governor of Central 

Bank of Nigeria 

(CBN), Godwin 

Emefiele, has 

urged entrepreneurs 

in Aba, Abia State, to avail 

themselves of the various facilities 

provided by the apex bank to 

grow their businesses. 

Emefiele, who stated this at 

Ariaria International Market during 

the CBN Fair in Aba, with the 

theme, ‘Promoting Financial 

Stability and Economic Development,’ 

said one of the functions 

of CBN was developmental and 

functional to help grow the economy, 

adding that the apex bank had 

extra burden than other banks. 

The CBN governor, who 

PenCom embarks on enrolment 

exercise for retiring federal employees 

National Pension Commission 

(PenCom) has concluded 

arrangements 

to embark on a nationwide preretirement 

enrolment exercise 

for retiring employees of Federal 

Government Treasury Funded 

Ministries, Departments and 

Agencies for the purpose of payment 

of retirement benefits. 

The exercise is intended for 

employees in the service of the 

Federal Government Treasury 

funded MDAs who are due to 

retire between January and December 

2018, by virtue of attaining 

60 years of age or 35 years in 

service, whichever is earlier, and 

65 years or 70 years of age for 

employees of tertiary institutions. 

The enrolment exercise also 

involves those who have already 

retired but are yet to be enrolled. 

Employees who are thus 

due for retirement under the 

categories mentioned above are 

to attend the enrolment exercise 

with the originals and photocopies 

of their letter of Appointment, 

Transfer and Acceptance of Service 

(Where applicable), as well 

as originals and photocopies of 

their Birth Certificate or Declaration 

of Age, says Emeka Onuora, 

head, corporate communications, 

PenCom. 

Other documents required 

for the exercise include originals 

and photocopies of promotion 

letters and pay slips, including 

grade levels and step as of 30 June, 

2004, grade level and step as of 

January, 2007, grade level and 

step as of July, 2010, grade level 

and step as of December 2013, 

as well as promotion letter and 

pay slip indicating current grade 

level and step. 

Furthermore, the participants 

at this exercise, are to bring along 

a letter from the Ministry, Department 

and Agency signifying 

retirement and first appointment 

dates, grade level and step as at 

30th June 2004, grade level and 

step as of January, 2007, grade 

level and step as at July 2010,as 

well as the current grade level and 

step, their staff identity card, Acceptance 

of voluntary retirement 

(in the case of voluntary retirees), 

authenticated past records of service, 

evidence of registration with 

a Pension Fund Administrator 

indicating personal identification 

number(PIN) and one passport 

photograph. 

spoke through Isaac Okorafor, 

acting director of public communication 

and coordinator of 

the programme, said the CBN 

was ready to help SMEs in Aba 

as “they have the ingenuity and 

creativity to produce enough for 

home use and export some. Everybody 

wants to engage in production 

to grow our economy.” 

He noted that prevailing 

recession had provided opportunity 

for people of Aba, particularly 

leather and garments 

clusters, to grow the economy, 

and therefore urged the people 

to form co-operative societies so 

as to enable them benefit from 

one of the apex bank’s intervention 

programmes - Anchor Borrowers 

Programme. 

Also, Veronica Aqua, CBN 

branch controller, Umuahia, 

urged them to always contact the 

branch for clarifications on how 

to access any of the intervention 

products of the bank. 

Meanwhile, in continuation 

of its enlightenment campaign, 

aimed at bringing more people 

into the formal financial sector, the 

CBN on Tuesday held a seminar 

for farmers and Small and Medium 

Scale Enterprises (SMEs) operators 

in Abeokuta, Ogun State. 

The apex bank used the opportunity 

provided by the financial 

inclusion fair to educate 

participants on its numerous real 

sector intervention programmes. 

These programmes, the bank 

said, are geared towards enhancing 

the wellbeing of Nigerians 

L-R: Rasheed Adegbenro, senior vice president, strategy and development, centre for Values in 

Leadership (CVL); Francisca Ukabiaka, senior manager, human resources and admin; Anthony Osae- 

Brown, editor, BusinessDay, and Uchenna Achunine, chief operating officer, CVL, during a courtesy 

visit of CVL management team to BusinessDay head office in Lagos, yesterday. Pic by Olawale Amoo 

MODESTUS ANAESORONYE 

and promoting economic development 

in general. 

Speaking on the theme of the 

seminar, “Promoting Financial 

System Stability and Economic 

Development,” CBN’s deputy 

director, Consumer Protection 

Department, Khadijah Kasim, 

said the bank took its enlightenment 

campaign to Abeokuta 

in order to inform the people 

about its activities, interventions 

and recent developments in the 

financial system. 

“We want to interact with 

you one on one. The bank’s 

officials are here to talk to you 

about rights and responsibilities 

of bank customers, how we can 

lodge complaints to CBN if we 

have issues with our financial 

service providers. 

“You will also be informed 

about different efforts of the 

CBN to ensure that every Nigerian 

is financially included, so 

that all of us can enjoy enormous 

opportunities that abound in 

this space,” she said. 

In his welcome address, the 

Abeokuta branch controller of 

CBN, Babatunde Amao, called 

on the farmers and SME operators 

to make constructive criticisms 

and suggestions that could 

serve as useful contributions 

towards pulling the country out 

of recession. 

According to Amao, the CBN 

recognises the importance of the 

city, and the fact that Abeokuta is 

home to most prominent Nigerians, 

some of whom are dead and 

some are still living. 

Also, Xavier Okon, a senior 

manager in the development 

finance department of the CBN, 

explained to participants that 

the apex bank helped to solve 

the problems most businesses 

face in Nigeria, especially that of 

long-term financing needs that 

commercial banks cannot meet 

because their funds were mainly 

short term in nature. 

Lagos signs agreement with investors 

on 3,000mw embedded power project 

ISAAC ANYAOGU 

Lagos State Governor 

Akinwunmi Ambode, 

on Tuesday, signed an 

agreement with investors to 

generate 3,000 megawatts of 

power over the course of seven 

years, sources tell Business- 

Day. 

Tagged the “Lagos State 

Embedded Power Programme” 

has the objective to 

deliver 3,000mw incremental 

electric power to drive the 

burgeoning economy of Lagos 

at the cost of $3 billion, subject 

approval by the Nigerian Electricity 

Regulatory Commission 

(NERC). 

The first phase which will 

be commissioned before the 

end of the first quarter of 2018, 

is expected to deliver 520mw 

incremental power, while additional 

1,070mw will be delivered 

by the fourth quarter of 

2018. The balance of 1,410mw 

will be completed by 2022. 

According to details of the 

agreement seen by Business- 

Day, Lagos government will 

provide three months rolling 

bank guarantees to support the 

Power Purchase Agreements 

(PPAs), which will be signed 

between the distribution companies 

and the embedded 

power providers (EPPs), to 

enhance bankability of the 

projects. 

In the agreement, Lagos 

state government will secure 

gas for the projects through 

provision guarantee to gas 

suppliers using its Ibile Oil and 

Gas company. 

“Given the intractable challenges 

of local gas market, and 

to guarantee uninterrupted gas 

supply to the EPPs, Lagos State 

has finalised arrangements 

with reputable international 

gas suppliers to deploy a floating 

storage and regasification 

unit (FSRU) to be moored on 

Lagos waters and this will be 

further supported by trucking 

of LNG from the South-South 

(in the short-term),” said the 

document. 

According to the agreement, 

the required liquidity 

for the transaction volume 

of about N4trillion is largely 

private sector funded, selfliquidating 

and employing 

series of contingent financial 

instruments. 

Voters from Kogi West 

Senatorial District have 

made good their threat 

to recall their embattled senator, 

Dino Melaye, as they submitted 

results of their collected 

signatures to the Independent 

National Electoral Commission 

(INEC) in Abuja. 

The constituents, who 

stormed the headquarters of 

INEC on Wednesday, brought 

the results in six bags for each of 

the local government areas in 

the senatorial district. 

The local governments 

where they gathered results 

from are Ijimu; Kabba/Nunu; 

Lokoja; Yagba West; Yagba East, 

and Mopa/Moro. 

The members led by Olowo 

Cornelius were however ushered 

in to see INEC chairman, 

Mahmood Yakubu, but the 

press was not allowed into the 

meeting. 

Addressing newsmen after 

their meeting with INEC chairman, 

Cornelius said although 

what was required for a recall 

was 50.1 percent of electorate; 


Kogi West submits signatures 

to INEC for Melaye’s recall 

OWEDE AGBAJILEKE, ABUJA 

they were able to garner 52.3 

percent. 

He noted that polling centres 

were setup where electorate 

came with voters cards to cast 

their ballot, explaining that it 

took one week for them to collate 

the results from the polls. 

While he denied that the 

Kogi State governor, Yahaya 

Bello, was sponsoring them, 

Cornelius said they decided 

to recall their senator because 

he had become inaccessible 

and unreachable and was not 

representing them responsibly. 

He claimed that the senator 

had neither held a town hall 

meeting in the constituency 

since he became senator nor attracted 

any constituency project 

for them. 

He said: “We are not satisfied 

with his representation in the 

Senate. The people know who 

is representing them well. The 

Senate is a place for responsible 

people not for rancour and tyranny. 

People of Kogi West have 

had to bear with him for two 

years. Two years is enough to 

assess a senator. We are at a stage 

of a journey of no return.” 

FG, Germany sign €10m aid to eradicate polio in Nigeria 

LAIDE AKINBOADE-ORIERE 

In order to completely get 

rid of polio in Nigeria, the 

Federal Government and 

the Government of Germany 

have signed €10 million aid 

agreement. 

The agreement that was 

signed in Abuja between Geoffrey 

Onyeama, foreign affairs 

minister, and Bernhard Schlagheck, 

German ambassador to 

Nigeria. 

Onyeama said the €10 million 

grant would facilitate Nigeria’s 

quest to totally eradicate 

polio in the country. He was 

unhappy that the Federal Government 

efforts were hampered 

by activities of terrorism 

in the North Eastern part of the 

country. 

According to Onyeama, “I 

just have to take this opportunity 

to express our profound 

gratitude to the government of 

Germany for this support. As you 

know we have come very close to 

eradicating polio in the world, 

but you know there are still one 

BDCs fund accounts for $129m as naira stabilises 

HOPE MOSES-ASHIKE 

Bureau De Change 

(BDC) operators on 

Wednesday funded 

their accounts to collect 

the second tranche of the 

$40,000 weekly dollar sales 

from the Central Bank of Nigeria 

(CBN) today. 

About 3,225 BDCs collected 

the first tranche of 

$20,000 on Tuesday. The same 

number of BDCs is expected to 

receive another $20,000 today, 

making a total of $129 million. 

Naira remained stable after 

trading on Wednesday at N367 

per dollar at the black market. At 

the investors and exporters window, 

dollar exchanged at the 

rate of N365.86k while it closed 

at N305.85k at the interbank 

spot foreign exchange market. 

Aminu Gwadabe, president, 

Association of Bureau 

De Change Operators of Nigeria 

(ABCON), said the exchange 

rate had flattened for 

or two issues. 

``And, the problem we have 

in the north east has exacerbate 

the situation and made it more 

difficult to eradicate. However 

we really appreciate the fact that 

they are partners who has taken 

with us.” 

The German ambassador 

said the grant would go a long 

way in achieving the desired 

goal, as “Germany is to support 

Nigeria with €10 million to eradicate 

polio in Nigeria. 

``We have engaged with the 

government of Nigeria for some 

time mostly under the assistance 

of the WHO and we want to continue 

with our engagement. As I 

said together with government 

of Nigeria we had achieve some 

remarkable successes here in 

Nigeria, on some outstanding 

issues. 

``We want to increase 

and consolidate our engagement 

and that is actually 

what we just did, I hope 

very much that polio will be 

removed from the country 

before long.” 

almost past two weeks and do 

not expect to see further shift 

from the current position. 

“I expect to see the stability 

of the naira to continue,” 

Gwadabe told BusinessDay 

on phone yesterday. 

Concerning the request 

by BDCs for increase in the 

weekly allocation and the 

review of the buying rates, 

Gwadabe said the CBN was 

watching and reviewing the 

market and would take decision 

at the appropriate time. 

External reserves have declined 

to $30.21 billion as of 

June 16, 2017, down from $30.9 

billion in May 11, 2017, according 

to data from the CBN. 

Isaac Okorafor, acting director, 

corporate communication, 

CBN, said at the Bankers Committee 

meeting brief that the 

central bank would ensure it 

sustained intervention to support 

the naira and that the CBN 

was comfortable with its external 

reserves level of $30.2 billion.


C002D5556 

BUSINESS DAY 

37 

NEWS 

Experts point way to improve education as FEC admits fallen standard 

ELIZABETH ARCHIBONG & STEPHEN ONYEKWELU 

The Federal Executive 

Council (FEC) admitted 

yesterday, the need to address 

fallen educational 

standards in Nigeria, as 

experts point the way forward. 

“Today at council we discussed 

many issues but the most important 

was education. Members agreed that 

the fallen standard in education is so 

serious that we will need a ministerial 

retreat to look at all the issues. There 

are a lot of issues and all of them are 

crying for attention” Adamu Adamu, 

minister of education said. 

Education data report published 

by the National Bureau Statistics in 

February 2016 shows that the country 

has a total enrolment of 23 million 

children in public primary schools 

with 574,579 teachers resulting in 

an average teacher to student ratio 

of 1 to 40 comparable to what is obtainable 

in most parts of Africa but 

twice higher than what is obtained in 

Europe and America and even most 

parts of Asia. 

The high student teacher ratio 

means that most students in these 

classes are not getting enough attention 

from teachers since the classes 

are overcrowded. This poor attention 

is compounded by the fact that 

only 11 percent of teachers in public 

primary schools actually have an educational 

degree, while 56 percent have 

the minimum National Certificate of 

Education (NCE). The remaining 33 

percent of teachers have other undefined 

qualifications. 

“Education is the best economic 

policy in modern economies. Any 

country that has most of its workforce 

engaged in low skill, low income 

economic activity reaps low productivity 

and cannot be competitive in 

today’s digital, globalised economy. 

This boils down to the quality, nature 

and delivery of education from the 


poverty levels. 

The country’s GDP per capita 

will probably shrink 4 percent to 

$2,123 in 2017, marking the third 

straight year of a decline, according 

to data compiled by BusinessDay. 

This compares poorly with South- 

Africa’s $5,589 and Egypt’s $3,684. 

After hitting a peak of $3,268 

in 2014, average incomes in Nigeria 

have tanked since oil prices 

tumbled and the economy pared 

back on almost a decade of robust 

growth. 

“That we will come out of recession 

this year is a given, it is if we 

will grow rapidly enough to ensure 

inclusiveness that now matters,” 

said Doyin Salami, a member of the 

Nigerian Monetary Policy Committee 

(MPC). 

“If Nigeria grows at any rate 

below 3 percent, it will put further 

pressure on average incomes. So 

for us, simply coming out of recession 

is too little an ambition for us,” 

Salami said at the Nigerian Stock 

Exchange (NSE) Bloomberg CEO 

roundtable held recently in Lagos. 

African peers, Ivory Coast, Ethiopia 

and Kenya, will probably grow 

an average of 7 percent this year, 

which is perhaps the kind of growth 

Nigeria should be gunning for. 

But for the Nigerian economy 

to grow at a rate comparable to the 

very basic level to the very top” said 

Obiageli Ezekwesili at a recent education 

convention, in Lagos. 

On the poor quality of graduates, 

experts have pointed to the poor 

infrastructure at universities and lack 

of opportunity to practise theories. 

“First is the issue of infrastructure 

and where students can practise the 

theories- unfortunately the industrial 

backbone has been very weak 

and the entire economy has been 

run as one big consumer market, 

dominated by imports from all over 

the world, especially China” said 

Oyewusi Ibidapo-Obe, former vicechancellor, 

University of Lagos in an 

emailed note. 

Michel Puchercos, country chief executive officer for Lafarge Africa Plc (l) with Babatunde Raji Fashola, 

minister of power works and housing, during a courtesy visit to the minister in Abuja. 

For Nigeria, simply exiting recession... 

aforementioned African countries, 

stimulating private capital is essential, 

according to Salami. 

This, he said, will help stimulate 

the six primary drivers of the 

economy, which include Agriculture, 

Trade, Telecommunication, 

Oil and Gas, Manufacturing and 

Real estate. 

“Yet if we don’t protect private 

capital, we won’t get private capital,” 

he said, “It is however not clear 

to what extent we can tolerate a 

price mechanism that will help us 

move away from last year’s opaqueness,” 

Salami added. 

Recovering oil output and prices 

are the biggest factors tipped to 

lift Nigeria from recession this year. 

The World Bank predicts an 

expansion of 1.2 percent in GDP, 

while Moody’s Investor Service 

sees 2.5 percent growth, buoyed 

by higher oil prices and the relative 

calm in the Niger-Delta, which 

could see production increase to 

the two million barrels daily mark. 

Already, the country’s biggest 

export terminal, Forcados, is back 

on onstream and will add some 

300,000 barrels to total output. 

Although in the last one week, 

oil prices have been sticky downwards, 

falling below $50 a barrel, 

after OPEC’s output cut extension 

was received in gloom. 

“Secondly, the institutions themselves 

need to be upgraded both for 

the humanware as well as the soft 

and hardware to enable the students 

study in a 21st Century environment. 

We have started to have “in-breeding” 

in our University System. This is antiinnovation 

and progress” Ibidapo- 

Obe said. It is refreshing then that the 

FEC on Wednesday stepped down a 

proposed road map for the education 

sector ,admitting that the dire state 

needed more than just a blue print. 

Education minister, Adamu 

Adamu, who briefed journalists 

alongside Femi Adesina, presidential 

spokesman said Council discussed 

the lone issue of education and has 

“Oil is never going to provide 

the inclusive growth the economy 

thirsts for and our continued reliance 

on it will burn our fingers, 

especially as market dynamics 

change,” said Olutola Mobolurin, 

chairman of financial advisory 

firm, Capital Bancorp. 

“What government should be 

focusing on is to see how to better 

stimulate savings and ignite the 

entrepreneurial spirit of the people 

that they can create jobs for themselves 

and others,” Mobolurin said 

by phone. 

The oil sector accounts for only 

10 percent of GDP, compared to 

Agriculture which accounts for 25 

percent, but structural imbalances 

make the former the single largest 

contributor to Nigeria’s economy, 

which thrives on petrodollars. 

In the first three months of 2017, 

the oil sector recorded a negative 

growth of 11.64 percent, according 

to the National Bureau of Statistics 

(NBS). Compared to Q4 2016, the 

oil sector grew by 14.86 percent, 

and a gradual recovery of the sector 

will help propel Africa’s largest 

economy back to positive growth. 

Over the three months, output 

from the oil sector was affected by 

relatively lower domestic crude 

oil production, as the effect of 

militants’ attacks on crude oil & gas 

decided to convene an inter-ministerial 

retreat in two weeks, where all the 

ministers will have the opportunity 

to contribute ideas to help revamp 

the sector. 

These problems call for more than 

a roadmap but a complete overhaul 

of the sector Adamu said. “Initially 

we had prepared a blueprint but FEC 

felt the issues are beyond that because 

there are crises in all the areas of education, 

in out of school children, in 

technical education and training, in 

Information Communication Technology 

(ICT), in all the areas you can 

think of. Ministers are going to start 

talking to themselves and come out 

with solutions. 

facilities in 2016 lingered. 

The non-oil sector exited the 

negative growth region, growing 

by 0.72 percent y/y in Q1-2017 

(compared to -0.33% y/y in Q4- 

2016 and -0.18% y/y in the corresponding 

quarter of 2016) supported 

by activities in agriculture, 

manufacturing, information and 

communication, transportation, 

and other services. 

Given its teeming population, 

the economy needs to grow in the 

region of 7 percent, otherwise an 

economic rebound would elude 

the citizens, according to Andrew 

Nevin, chief economist at PriceWaterhouseCoopers 

(PWC). 

“This is only possible with an investment 

led recovery,” Nevin says. 

Nigeria requires between N25 

trillion- N30 trillion of annual investment 

to reach a GDP growth 

rate of 5-7 percent, according to 

PWC’s estimates, but is getting less 

than 20 percent of its needs. 

Government is providing 

around N2 trillion of this, indicating 

that required growth will only 

happen with significant inflows of 

private investment. 

Getting the required investment 

to achieve robust and inclusive 

growth, will require clarity in exchange 

rate, sustained focus on 

fighting corruption and efforts to 

improve the ease of doing business, 

according to Nevin. 

“There will be a ministerial retreat 

in the next two weeks to look at the 

issues and from there, we will take off 

in what we are doing” Adamu added. 

Analysts have at different times 

called for the declaration of a state of 

emergency in the education sector, 

following the decline in quality of 

education and standards in schools 

across the country. He also addressed 

the issue of withdrawal of religious 

education in the curriculum of secondary 

schools, stating that it was 

mere rumours, contending that the 

social media had made it difficult by 

spreading falsehood. 

“The issue of Christian religious 

knowledge that all the national media, 

social media took up and deceived 

even the leadership of the Christian 

Association of Nigeria because they 

believed it. I read in the papers that 

they asked the acting president to 

confirm, there is no truth in it at all. 

“It was just somebody’s imagination, 

probably somebody who wishes to 

raise tension in the country after the Biafra 

issue and then the quit order given 

to some young people in the north so 

the person just followed suit trying to 

stoke the embers of religion. There is 

no truth whatsoever I repeat” he said. 

The minister further explained 

that there was a policy in 2012 which 

was given effect in 2014 that is even 

before the advent of present administration. 

“One of the things I did as 

minister, was to speak to the National 

Council on Education, to disarticulate 

history from the social studies curricula 

because we believe we want our 

young people to know our history. 

“You cannot know who you are 

without knowing who your ancestors 

were in the past. And the National 

Council of Education did accept and 

agree that the teaching and learning 

of CRK has been made compulsory 

for all Christian students and teaching 

and learning of Islamic studies is 

compulsory for all Muslim students” 

he added. 

Briefs 

Uber founder Travis Kalanick resigns 

Uber boss Travis Kalanick has 

resigned as chief executive after 

pressure from shareholders. 

His resignation comes after a 

review of practices at the firm and 

scandals including complaints of 

sexual harassment. 

Ford to move US production 

of Focus to China 

Ford is to move US production of its 

new Ford Focus car to China in 2019, 

despite having faced pressure to keep 

manufacturing jobs in America. The 

carmaker said the decision would not 

lead to layoffs in the US. 

The firm in January scrapped plans 

to move US production to a new $1.6bn 

(£1.3bn) plant in Mexico after criticism 

from Donald Trump. 

Etsy cuts 15% of its workforce 

Etsy is acknowledging that it 

needs to be more “nimble.” 

On Wednesday, the company 

said it is cutting another 140 jobs, 

or 15% of its current workforce. 

That’s in addition to trims it made 

in May, when it let go of another 

90 people.



C002D5556 

LIVE @ THE STOCK EXCHANGE 

GAINERS 

Top Gainers/Losers as at Wednesday 21 June 2017 

Company Opening Closing Change 

CONOIL 38.5 40.42 1.92 

CAP 34.2 34.99 0.79 

CCNN 10.74 11.27 0.53 

UACN 17.55 17.9 0.35 

NASCON 9.8 10 0.2 

LOSERS 

Company Opening Closing Change 

NESTLE 910 900 -10 

DANGCEM 213.97 205 -8.97 

7UP 93 90.01 -2.99 

WAPCO 54.2 52 -2.2 

NB 168 166 -2 

Market Statistics as at Wednesday 21 June 2017 

ASI (Points) 33,477.89 

DEALS (Numbers) 5,876.00 

VOLUME (Numbers) 508,732,080.00 

VALUE (N billion) 6.396 

MARKET CAP (N Trn 11.576 

Conoil stocks on demand 

amid N4.3bn Full Year profit 

…proposes N2.15 billion total dividend 

Stories by 


The stocks of Conoil 

Plc were 

on demand 

yesterday at the 

Nigerian Stock 

Exchange (NSE) as the 

nation’s foremost indigenous 

petroleum marketer 

declared an impressive 

profit before tax (PBT) of 

N4.28billion for the 2016 

financial year. The profit 

represents an impressive 

24.1percent growth against 

N3.45billion profit in 2015. 

The company’s financial 

performance at the 

Nigerian Stock Exchange 

(NSE) shows persistent resilience 

amidst challenging 

economic conditions in the 

country. 

As more investors 

moved to raise wager on 

Conoil Plc stocks at the nation’s 

bourse Wednesday, 

its share price gained most 

by N1.92, from N38.5 to 

N40.42. 

The company’s result for 

the year ended December 

31, 2016 shows growth 

across all key financial indices. 

Its profit after tax 

(PAT) increased from N2.30 

billion in 2015 to N2.84 

The Securities and 

Exchange Commission 

(SEC) has 

commended the 

Debt Management Office 

(DMO) on arrangements 

to issue the maiden 

N100billion Sukuk in the 

Nigerian Capital Market. 

In a statement by the 

SEC “This is a major milestone 

for Nigeria as it will 

catalyze the development 

of non-interest capital 

market products. The issuance 

of this Sukuk follows 

diligent advocacy efforts 

from the Securities and 

Exchange Commission 

(SEC) on the need to issue 

the instrument in order 

to serve as an alternative 

product for investors”. 

Mike Adenuga, chairman, Conoil Plc 

billion, representing a 23 

percent rise. 

Its revenue increased 

from N82.9 billion to 

N85.02 billion. Accordingly, 

the frontline major oil 

marketer, in line with its history 

of progressive dividend 

policy, has proposed a total 

dividend payout of N2.15 

billion to be ratified by its 

shareholders at its next annual 

general meeting. 

The company’s earnings 

per share increased 

Sukuk, the non-interest 

equivalent of bonds, 

is becoming increasingly 

attractive as a preferred 

option for funding infrastructure 

development 

and indeed economic 

growth across the globe. 

Several countries across 

diverse continents have 

increasingly issued noninterest 

financial instruments 

to fund their infrastructure 

deficit. The 

trend is also fast gaining 

pace in Africa, with notable 

Sukuk issuances 

by South Africa, Senegal, 

and the Government of 

Cote d’Ivoire. 

As the Federal and 

State Governments 

seek alternative funding 

sharply by 23 percent from 

333kobo in 2015 to 409 kobo 

in 2016. 

Analysts say this performance 

has further raised 

the bar of the strategic positioning 

of Conoil Plc as 

truly the nation’s marketer 

of choice. 

The company attributed 

the full year 2016 performance 

to its sustained culture 

of financial discipline, 

prudent and efficient execution 

of projects and plans, 

sources for infrastructure, 

Sukuk is considered as a 

viable option. 

In 2013, the SEC had 

issued Rules on Sukuk 

Issuance in Nigeria following 

which the State Government 

of Osun raised 

N11 Billion (about $50 

Million) in Nigeria’s first 

Sukuk issuance which was 

oversubscribed. 

In ensuring that the 

Nigerian Capital Market 

plays a significant role in 

the success of Nigeria’s 

maiden sovereign Sukuk 

issuance, the Securities 

and Exchange Commission 

(SEC) supported the 

Debt Management Office 

(DMO) specifically in the 

area of capacity building 

aggressive product development 

and marketing, 

supported by cutting-edge 

customer service delivery. 

Recall that at the last 

annual general meeting 

of the company, Mike Adenuga, 

chairman, Conoil 

Plc had assured shareholders 

that in the face 

of the gloomy economy, 

the company will always 

strive to be one of the fastest 

growing and profitable 

companies in the country. 

He assured that it will 

consolidate its gains and 

ensure greater returns on 

investment for its teeming 

shareholders. 

While promising that 

the company’s ultimate 

goal to its customers will 

always be excellent service 

and quality products, the 

erudite business mogul 

maintained that its promise 

for its shareholders 

remains maximum value. 

“We will drive our business 

to greater heights by 

re-establishing commanding 

presence in the retail 

business, lubricants, aviation, 

liquefied petroleum 

gas, specialized products 

and non-fuel retail services 

“, Adenuga assured. 

SEC commends DMO, CBN, PENCOM on Sukuk 

and participation at the 

Capital Market Committee’s 

sub-committee on 

non-interest products. 

This journey has led 

to this historic proposed 

issuance of Nigeria’s N100 

Billion, 7-year Sukuk, 

which would not only 

facilitate the mobilization 

and allocation of funds 

within the economy but 

would serve to position 

the country as a gateway 

for foreign and domestic 

investors. The issuance 

would also further deepen 

the Nigerian Capital Market 

by promoting financial 

inclusiveness while providing 

an additional asset 

class of tradable liquid 

instruments for investors. 

Stock market halts uptrend 

with record 2.61% dip 

… NSE review market indices 

In line with most analysts’ 

belief, some 

stock investors at 

the Nigerian bourse 

on Wednesday moved 

to book profit on recent 

gains which led to a record 

2.61percent decline in the 

All Share Index (ASI). 

Following a value loss 

of about N310billion in 

just yesterday’s trading, 

the Year-to-Date (Ytd) 

return moderated to 

24.57percent. 

The Nigerian Stock Exchange 

(NSE) All Share 

Index (ASI) closed lower 

at 33,477.89 points against 

the preceding day close of 

34,375.60 points while 

Market Capitalisation 

closed at N11.577 trillion 

against preceding day 

close of N11.887 trillion. 

The volume of stocks 

traded increased by 

29.69percent, from 

392.26million to 

508.73million, while the 

total value of stocks traded 

increased by 51.67percent, 

from N4.217 billion 

to N6.397 billion in 5,876 

deals. 

Conoil Plc led the table 

of 13 gainers against 37 

losers led by Nestle Nigeria 

Plc. Coinoil Plc rallied 

from N38.5 to N40.42, 

adding N1.92; while Nestle 

Nigeria Plc lost N10, 

from N910 to N900. 

The Financial Services 

sector led the activity 

chart with 429.79million 

shares exchanged for 

N4.757 billion; while Consumer 

Goods followed 

with 19.34million shares 

traded for N611million. 

The Nigerian Stock 

Exchange (NSE) has announced 

the expected 

review of the NSE 30, and 

the six sectoral indices of 

the Exchange, which are 

NSE Consumer Goods, 

NSE Banking, NSE Insurance, 

NSE Industrial, NSE 

Oil & Gas and the NSE 

Lotus Islamic Indices. 

These indices are normally 

reviewed bi-annually 

(June and December) 

except for NSE Pension 

index that is reviewed 

once in the year (December). 

The review will witness 

the entry/re-entry as 

well as exit of some major 

companies. The composition 

of these indices after 

the review will be effective 

on July 1, 2017. 

The NSE-30 and NSE 

Industrial Indices are 

modified market capitalization 

index with the 

numbers of included 

stocks fixed at 30 and 10, 

respectively. The Stocks 

are selected based on 

their market capitalization 

from the most liquid 

sectors. 

The liquidity is based 

on the number of times 

the stock is traded during 

the preceding two quarters. 

To be included, the 

stock must have traded for 

at least 70 percent of the 

number of times the market 

opened for business. 

The Exchange is aware 

that the number of the 

stocks included in some 

of the indices may not 

be practically suitable 

for optimal portfolio diversification; 

however, 

the numbers would be 

reviewed as sector conditions 

change. 

The Nigerian bourse 

began publishing the NSE 

30 Index in February 2009 

with index values available 

from January 1, 2007. 

On July 1, 2008, The 

NSE developed four sectoral 

indices and developed 

the NSE Pension 

Index in 2013, with a base 

value of 1,000 points, designed 

to provide investable 

benchmarks to capture 

the performance of 

specific sectors. 

The sectoral indices 

comprise the top 15 most 

capitalized and liquid 

companies in the Insurance 

and Consumer 

Goods sectors, top 10 

most capitalized and 

liquid companies in the 

Banking and Industrial 

Goods sector and the top 

seven most capitalized 

and liquid companies in 

the Oil & Gas sector. 

The indices, which 

were developed using 

the market capitalization 

methodology, are rebalanced 

on a biannual basis 

-on the first business day 

in January and in July.


Nigeria’s oil exports to top two million barrels... 


month lows. 

The bearish outlook for the 

oil industry comes as NNPC released 

it financial performance 

record for April this year showing 

it recorded a trading deficit 

of N5.27Billion in April, 2017. 

The NNPC blamed the challenging 

environment in which it 

operated for the loss. 

The deficit,which was revealed 

in its April report however 

indicated a 6.20 percent 

decrease from the previous 

month’s record of N5.62Billion. 

In its April, 2017 Financial 

and Operations Report, the 

corporation said the Group operating 

revenue for the months 

of March 2017 and April 2017 

stood at N354.65billion and 

N327.47billion respectively, 

though representing 149.27 

percent and 135.64 percent 

respectively of monthly budget. 

But operating expenditure 

for the same periods 

were N360.19billion and 

N326.88billion respectively, 

which also represent 171.77 percent 

and 156.16 percent of budget 

for the months respectively. 

The NNPC blames the deficit 

to expenses by its subsidiaries, 

including huge expenses 

NPMC/NPSC/ML and lowered 

NPDC revenue 

“Other factors that impacted 

the overall NNPC’s performance 

include production shutdown 

of Trans Niger Pipeline (TNP) 

and Nembe Creek Trunk Line 

(NCTL) due to pipeline leakages, 

shut down of Bonga Terminal for 

TAM and existing Force Majeure 

declared by SPDC as a result of 

the vandalized 48-inch Forcados 

export line after the restoration 

on 17th October, 2016,” the 

Corporation stated in the report. 

Meanwhile, total crude 

processed by the three 

refineries(KRPC,PHRC& 

WRPC) for the month 

of April 2017 was 

447,738MT(3,282,814.13bbls) 

which translates to a combined 

yield efficiency of 87.83 percent. 

Notably,for the month of 

April 2017, the three Refineries 

produced 307,946MT of finished 

petroleum Products out of 

447,738MT of Crude processed 

at a combined capacity utilisation 

of 24.59 percent compared 

to 13.46 percent combined capacity 

utilization achieved in the 

month of March 2017. 

The corporation also attributed 

improved operational 

performance is attributed to 

increase in crude oil available 

for production by 23.89 percent 

33” Export Lager Beer has 

unveiled ‘City of Friends’ 

at the Sheraton Hotel, Ikeja, 

Lagos. The City of Friends is a 

platform to encourage friends 

to celebrate one another, and 

highlight the time-tested values 

of friendship. 

The three-day event will 

bring together friends from 

across Nigeria to celebrate the 

values of friendship in an atmosphere 

of music, dance and fun. 

The celebration, which is 

scheduled to open on July 28, 

will culminate with the grand finale 

on July 30 - a day set aside by 

the United Nations to promote 

the role that friendship plays 

in promoting peace in many 

cultures across the world. 

“We are taking advantage 

of this globally recognised day 

relative to last month total available 

crude oil for refining. 

It further expressed optimism 

that the ongoing revamping 

of the Refineries will enhance 

capacity utilisation once 

completed. 

With respect to the dollar 

payments to Federation 

Account,a total export sale of 

$158.03 million was recorded in 

April 2017.This is $203.92 million 

lower than the preceding 

month’s performance of $361.95 

Million. 

Moreso,crude oil export sales 

contributed $71.81(or45.44%) 

of the dollar transactions compared 

with $255.50 Million contribution 

in the previous month. 

Also,export Gas sales 

amounted to $86.21 Million in 

the month. The April 2016 to 

April 2017 Crude oil and Gas 

transactions indicate that Crude 

oil and Gas worth $2,279.54 Million 

was exported. 

Also, total export proceeds of 

$142.12 million were recorded 

in April 2017 as receipt against 

$404.55Million in March 2017. 

Most notably, contribution 

from crude oil amounted to 

$71.81million;while Gas and 

Miscelleneous reciept stood 

at $70.29 million and $0.013 

million. 

The total export proceeds 

reciept of $142.12 Million was 

remitted to fund the JV cash 

Call for the month of April 2017 

to guarantee current and future 

production. 

As regards naira payment 

into federation account, the domestic 

crude oil and Gas receipt 

during the month amounted to 

N142.09 Billion, consisting of 

N2.23 Billion from Domestic Gas 

and the sum of N139.86 Billion 

from domestic crude oil. 

Out of the naira receipt, the 

sum of N46.54 Billion was transferred 

to joint Venture Cash 

call(JVCC) being a first line 

charge and to guarantee continuous 

flow of revenue stream 

to federation account, the report 

revealed. 

Meanwhile, NNPC transferred 

the sum of N95.56 billion 

into federation account during 

the month under review from 

the net domestic crude oil and 

gas receipt. This includes Gas 

receipts of N2.23Billion.No 

refund was made to FG in respect 

in respect of N450 Billion 

indebtedness as the debt has 

been fully repaid. 

From April 2016 to April 

2017, Federation,JV,and FG 

received the sum N798.63 

Billion and N75.96 Billion 

respectively. 

“33” Export unveils ‘City of Friends’ 

AKOBI UGOCHUKWU 

of friendship to deepen the 

brand’s core proposition to its 

consumers by unveiling the City 

of Friends,” said Franco Maria 

Maggi, marketing director, Nigerian 

Breweries, while speaking at 

the launch. 

“For three days, consumers 

and friends of “33” Export will 

come together to celebrate the 

values of friendship – loyalty, fun, 

companionship, and goodwill - 

in a festive atmosphere courtesy 

of the number one friendship 

beer.” 

Artistes billed to perform at 

the City of Friends include Femi 

Kuti, 2face Idibia, Orezi, 9ice, 

MI Abaga, Wande Coal, Cynthia 

Morgan, Seyi Shay, YCee, Phyno, 

Flavour, Small Doctor, and many 

others. 

“33” Export Lager Beer is a 

national premium beer brand 

committed to the values of 

friendship. 

Leadership of the House 

of Representatives on 

Wednesday directed National 

Health Insurance 

Scheme (NHIS) to halt the proposed 

accreditation of Health Management 

Organisations (HMOs) 

pending the conclusion of ongoing 

investigation into the utilisation of 

the N351 billion paid without commensurate 

results. 

Speaker Yakubu Dogara gave 

the directive during the investigative 

hearing on the compliance rate of 

HMOs to the NHIS contributions 

and utilisation of funds by healthcare 

providers and inhumane 

treatment of enrollees, held at the 

instance of the House Committee 

on Healthcare Services, chaired by 

Chike Okafor. 

The speaker, who was represented 

by Chukwuka Onyema, 

deputy minority whip, noted that 

the scheme established in 1999 

with overall purpose of securing 

universal health coverage and 

access to adequate and affordable 

healthcare for all Nigerians had 

failed. 

NEWS 

L-R: Lynda Saint-Nwafor, chief enterprise business officer, MTN Nigeria; Aisha Pamela Sadauki, director, MTN Foundation, and Dennis 

Okoro, director, MTN Foundation, at the closing ceremony of the 2017 21days of Y’ello Care in Lagos, yesterday. Pic by Olawale Amoo 

N351bn scam: Reps, labour call for forensic audit of NHIS, HMOs 

... as HMOs accuse NHIS of warehousing billions accrued into ICT pool fund 

KEHINDE AKINTOLA, ABUJA 

Governor Godwin 

Obaseki of Edo State 

has announced the appointment 

of Julius Ihonvbere, 

the immediate past secretary 

to Edo State government as 

chairman, Strategic Planning 

Team, Governor’s Office. 

The appointment was contained 

in a statement signed 

by the Secretary to the State 

Government, Osarodion Ogie. 

The governor also announced 

the appointment 

of Crusoe Osagie, a former 

deputy news editor and senior 

industry correspondent 

with ThisDay Newspaper, as 

special adviser, media and 

communication strategy. 

Others are Osaro Idah, 

the current committee chair- 

“The importance of this 

scheme cannot be overemphasized 

as no nation can achieve a 

healthy milestone in the health 

sector without having such a health 

finance scheme mandated to 

check health services and avert 

what would otherwise be a national 

health crisis should there be 

no NHIS. 

“Health care in Nigeria is financed 

by tax revenue, out-ofpocket 

payments, donor funding, 

and health insurance (social and 

community). The NHIS has presented 

a scorecard that points to 

the fact that a lot more needs to be 

done to reposition the scheme. The 

scheme and the delivery partners 

have been subjected to various 

criticisms, challenges and complaints 

ranging from untimely 

payment by healthcare providers 

from the HMOs to unsatisfactory 

health services to enrollees. 

“Regrettably, there is no mechanism 

to protect vulnerable families 

from the catastrophic effects 

of the exorbitant cost of heath care 

services in Nigeria. Poor families, 

who constitute over 67 percent of 

our population (well in excess of 

100m Nigerians), cannot afford to 

Obaseki approves appointment 

of 7 special advisers 

IDRIS UMAR MOMOH, BENIN 

man of agriculture and member 

of Protection of Private 

Property (PPP) committee 

as special adviser on Political 

and Community Matters, 

Joe Okojie, immediate past 

commissioner for agriculture 

and national resources to Adams 

Oshiomhole, as special 

adviser, agriculture and food 

security programme, Joseph 

Eboigbe, as special adviser on 

economic and development 

planning. 

Also appointed are Gowon 

Yakubu, as special adviser on 

special duties, and Joan Oviawe, 

special adviser on basic 

education. 

The statement said the 

appointees would be swornin 

this Friday, at the EXCO 

Chambers of the Government 

House. 

pay hospital bills even for treatment 

of malaria in public health facilities, 

nor for routine antenatal services,” 

the speaker said. 

However, in his presentation, 

Tunde Oladele, who spoke on 

behalf of Health and Managed 

Care Association of Nigeria accused 

NHIS management of warehousing 

multi-billion naira (0.5% of the funds 

accrued to the HMOs) set aside for 

establishment of ICT platform since 

inception of the scheme. 

Oladele, who frowned at the 

misgivings against the HMOs, 

argued that the HMOs managing 

the private sector health scheme 

emphasised the need to make the 

NHIS private sector driven. 

“All the reports submitted 

pointed to a private sector driven 

health insurance programme with 

primary health care providers as 

risk bearer at the primary level and 

health maintenance organisations 

as the risk bearer at the secondary 

and tertiary levels. 

“Globally, social health insurance 

programme is prepaid by 

design with healthcare service 

properly defined as the risk is cross 

subsidised with contributions from 

the healthy and the sick and poor 

Bayelsa seals oil-servicing firm over N109.5m tax 

SAMUEL ESE, YENAGOA 

Bayelsa State Board of Internal 

Revenue has sealed 

the premises of Hilong 

Oil Services and Engineering 

Company Limited, an oil servicing 

company to Shell Petroleum 

Development Company of Nigeria 

(SPDC), over unpaid taxes 

totalling N109,533,306.69. 

It is the first time that the 

board is going hard on corporate 

tax defaulters in the state since 

the state government began a 

strong campaign to improve 

internally generated revenue following 

a fall in the price of crude 

oil and gas in the international 

market. 

Bayelsa internally generated 

revenue had shot up to N1.13 

billion in March this year according 

to figures announced 

by the state deputy governor, 

Gboribiogha John Jonah, at 

the last monthly transparency 

briefing. 

and the rich,” he said. 

According to the documents 

submitted by Issac Adewole, minister 

of health to the House, 5.25% 

of monthly salary of Federal Civil 

Servants and 15% premiums paid 

by state and local governments’ 

workers had been remitted into the 

scheme since 2005. 

Adewole, who was represented 

by Wapanda Balami, director, Hospital 

Services, Federal Ministry of 

Health, urged the House to provide 

for stiffer sanction against fraudulent 

operators. 

On his part, Boiboi Kaigama, 

president, Trade Union Congress 

(TUC), emphasised the need to 

conduct independent forensic 

audit of NHIS account. 

In his remarks, Mao Ohabunwa, 

chairman, Senate Committee 

on Healthcare Services, lamented 

that poor management had defeated 

the objectives of setting up 

the NHIS of universal health coverage 

in the country. 

While applauding the ongoing 

efforts by the House to reposition 

the scheme, Ohabunwa emphasised 

the need to put necessary 

measures in place to address various 

challenges facing the scheme. 

Sealing the premises of the 

company at Elebele Light Industrial 

Estate on Wednesday, 

Robert Lokoson, director of 

compliance of the board, told 

journalists that the action would 

send a message to other firms 

that have been defaulting in their 

tax payments. 

Lokoson stated: “The Bayelsa 

State Board of Internal 

Revenue having obtained the 

necessary court order hereby 

levy this distrain on the 

properties of Hilong Oil Services 

and Engineering Company 

Limited for a tax debt 

of N109,533,306.69 owed to 

Bayelsa State government. To 

recover that money that is why 

we have come this far.” 

He explained that the firm 

had refused to respond to several 

correspondence on the issue 

and that if it still refused to begin 

negotiations after 14 days, the 

board would go back to court to 

institute a case.


FT 

TIMES 

C002D5556 

BUSINESS DAY 

A1 

Liquid Telecom secures $600m 

for Africa push 

Page A3 

Kim Jong UN’s regime - From feudalism 

to crony capitalism 

Page A4 


- 

FINANCIAL 

World Business Newspaper 

Saudi king promotes 

favoured son to 

crown prince in 

succession shake-up 

SIMEON KERR 

Saudi Arabia’s King 

Salman has promoted 

his favoured son, Mohammed 

bin Salman, 

to crown prince in a 

shake-up of the established 

succession order that clears the 

young royal’s path to the throne. 

The prince replaces Mohammed 

bin Nayef, his cousin, who 

was also removed from his post 

as interior minister, where he 

oversaw domestic security and 

the kingdom’s counter- terrorism 

policy. 

The move cements the elevation 

of Prince Mohammed, who 

as deputy crown prince has 

been the driving force behind 

the Gulf state’s ambitious plans 

to overhaul the oil-dependent 

economy, including the planned 

partial privatisation of Saudi 

Aramco. 

Speculation has swirled during 

the past two years that the 

elderly king would promote his 

31-year-old son so that he could 

inherit the throne directly. Over 

that period the prince has become 

the public face of the Saudi 

leadership at home and abroad. 

The turnover at the top of 

the royal family was made by 

a majority decision of 31 of 34 

Fed banker makes case 

for balance sheet cuts 

SAM FLEMING 

A 

senior Federal Reserve 

policymaker has batted 

aside investor concerns 

that US officials made 

an error in lifting interest rates 

against a backdrop of weak inflation, 

arguing the central bank 

should forge ahead with plans to 

reduce its balance sheet. 

Patrick Harker, president of 

the Federal Reserve Bank of 

Philadelphia, said he advocated 

policymakers “pause” on rates in 

the coming months while they 

started to pare back the bank’s 

asset holdings. But he stressed 

his business contacts were being 

“really pressured” by demands 

for wage rises given the strong 

members of the kingdom’s allegiance 

council, a royal body set 

up to oversee the succession, the 

official news agency reported. 

Mohammed bin Nayef was 

valued by the US as a close 

partner in counter- terrorism operations 

but appeared isolated at 

home. He pledged allegiance to 

the new crown prince, the news 

agency reported. The move risks 

creating splits within the ranks of 

the ruling al-Saud family, given 

private concern among some 

family members at the rise of 

the inexperienced Prince Mohammed. 

The shake-up also comes at 

a time when the Gulf is facing 

its biggest crisis in decades after 

Saudi Arabia and three Arab 

allies cut diplomatic ties and 

transport links with Qatar, alleging 

that the Gulf state sponsored 

terrorism. 

That decision reflected the 

kingdom’s increasingly interventionist 

foreign policy, which 

has been overseen by Prince 

Mohammed, including Riyadh’s 

military campaign in Yemen. 

The young royal has courted 

foreign leaders, including President 

Donald Trump of the US, 

and the world’s top executives as 

he has sought to lure investment 

to back his reform plans. 

jobs market, and he expected 

inflation should assert itself. 

“We need to get on with this,” 

he said, referring to the Fed’s plan 

to phase out reinvestments of the 

proceeds of maturing securities 

on its $4.5tn balance sheet. “We 

have been talking about it for 

a long time; it has been part of 

our plan. The economy is strong 

enough now where we can start 

to do what we have said we are 

going to do.” 

Harker’s words come as the 

Fed and Janet Yellen, its chair, 

face down criticism from investors 

over last week’s decision 

to lift rates by a quarter-point 

despite three successive months 

of soggy inflation data and recent 

Continues on page A2 

Patrick Harker, president of the Federal Reserve Bank 

Scandal-hit Uber faces leadership 

vacuum after Kalanick forced out 

LESLIE HOOK 

Uber was facing a leadership 

vacuum after 

the departure of chief 

executive Travis Kalanick, 

a move that divided investors 

after it left the world’s largest 

private tech group with its three 

top executive posts vacant. 

Mr Kalanick, one of the founders 

of the ride-hailing company, 

was forced out by a group of 

investors without a successor in 

place after months of turmoil that 

have decimated the top ranks of 

the group. 

The move by the investors 

flies in the face of Silicon Valley’s 

founder-first culture, an ethos 

that reveres the wisdom of founders 

such as Steve Jobs and Mark 

Zuckerberg and overlooks their 

shortcomings. 

But some leading investors 

expressed concern that a chief 

executive from outside the company 

might not be able to maintain 

Uber’s rocket-like growth. 

“If the CEO is just a seasoned 

operator and not a visionary on 

transportation, we are never going 

to reach our potential,” said 

Bradley Tusk, an adviser to, and 

shareholder in, the company. 

“Uber should be a $500bn 

company in 10 years that owns 

transportation in the way Amazon 

owns retail and Apple owns 

personal technology,” Mr Tusk 

said. “A seasoned operator alone 

isn’t going to achieve this.” 

Mr Kalanick, who has seen 

Uber buffeted by accusations of 

sexism and come under personal 

attack for his aggressive behaviour, 

said he had decided to step 

aside “at this difficult moment in 

my personal life”. Mr Kalanick’s 

mother died last month in a boating 

accident. 

“I love Uber more than anything 

in the world,” he said. “I 

have accepted the investors’ 

request to step aside so that Uber 

can go back to building rather 

than be distracted with another 

fight.” 

The task now facing Uber’s 

board will be to hire a new chief 

who can right the ship at the 

$62.5bn company, as well as other 

executives, including a chief 

financial officer, chief operating 

officer, and general counsel. Uber 

has seen nearly a dozen top-level 

departures in 2017. 

The board has been considering 

executives from big, mature 

companies such as GE or other 

industrial titans for the roles, according 

to one investor. 

“I think this is a disaster,” said 

a different investor, pointing 

out that when Apple fired Jobs, 

it floundered until he returned. 

“The board better know what 

they’re doing because the success 

of the company from this point 

on is completely their responsibility.” 

Kalanick’s judgment and leadership 

have increasingly been 

questioned by investors after a 

series of setbacks this year, including 

a lawsuit over self-driving 

car technology and a software 

program that was used to mislead 

regulators. 

An investigation into more 

than 200 cases of harassment 

resulted in 20 people being fired 

this month.


A2 BUSINESS DAY 

C002D5556 

FT 

Fed banker makes case... 

NATIONAL NEWS 

China’s stock market is given a test, not a pass 

To listen to the stockbrokers, 

it is a “pivotal 

moment”, a “major step 

forward” that will “bring 

Chinese equities into 

mainstream investment”. MSCI, 

the index provider, has decided to 

include mainland Chinese shares in 

its main global and emerging market 

benchmarks. The talk of a watershed 

is misguided, however. This is a test 

Continued from page A3 

tepid gross domestic product 

growth. 

Market-implied inflation expectations 

have drooped since 

the Fed meeting, and some traders 

are betting the central bank 

will have to soft-pedal its tightening 

process. 

The Philadelphia Fed president 

is a rate-setter on the Federal 

Open Market Committee 

this year, and he has been at the 

hawkish end of the policy spectrum 

in arguing for rate rises. 

He acknowledged the central 

bank’s policy forecasts were “a 

little more aggressive” than what 

the market had priced, stressing 

that “if in fact inflation is softening, 

then I would revise my stance 

of policy”. 

There may “possibly” be one 

more rate increase this year, according 

to Mr Harker’s forecast, 

following on from the rises in 

March and June. 

One scenario would see the 

Fed starting to phase out reinvestments 

before it went ahead 

with another rate rise, he suggested. 

“It is prudent for us to 

pause on the next rate increase; at 

some point, and I would assume 

it is this year, cease reinvestment; 

and see how the markets react. 

We can take our time to do this. 

We don’t have to be in a rush.” 

Mr Harker was speaking in his 

office after visiting the Philadelphia 

Shipyard, which has been 

using an apprenticeship programme 

to bolster the supply of 

skilled workers. The central banker 

said that there was “very little 

slack” left in the jobs market and 

that the so-called Phillips Curve, 

which relates low joblessness to 

inflation, would kick in. “There is 

a rate [of unemployment] below 

which you are going to start to 

see a significant acceleration of 

wages,” he said. “You look at this 

labour market and you do have 

to question when we are going 

to start to see some increases in 

inflation. We know from history 

that when that happens it happens 

pretty quickly.” 

for Chinese stock markets, not a certification 

that they have met global 

standards or that future integration 

is assured, or even likely. 

Consider the extreme caution 

with which MSCI has decided to 

represent mainland stocks in its 

indices. The Shanghai and Shenzhen 

markets together make up 

the second-largest equity market in 

the world by capitalisation, at some 

Jeff Bezos, Amazon’s founder 

$7tn. Yet the shares in just 222 largecap 

companies will be included by 

MSCI. All of them are already part of 

the so-called stock connect scheme, 

which allows global investors to buy 

and sell A-shares in freely tradable 

Hong Kong dollars. This solves (for 

now) the problem of China’s tight 

currency and capital controls. 

When the indices are updated in 

about a year’s time, the mainland 


companies will be included in the 

index at only 5 per cent of the weight 

of their full market values. The shares 

will therefore represent less than 

1 per cent of the MSCI’s emerging 

markets index, and 0.1 per cent of its 

world index. The 1.2 per cent rise in 

the mainland indices after the MSCI 

announcement reflected both the 

fact that the change was expected 

and its ultimately modest size. 

Amazon goes back to the future of food 

JOHN GAPPER 

Just when we thought we 

understood Amazon, it surprises 

us. We are used to 

observing an online retailer 

that cuts prices relentlessly to undermine 

brick and mortar stores. 

It has now decided to buy Whole 

Foods Market, a premium chain 

for Americans who can afford 

fancy cheese and fish. 

If it wanted to turn physical, 

the Amazon of our imagination 

might have followed Aldi, 

the private German retailer, by 

investing $5bn to expand its US 

discount stores, or have directly 

taken on Walmart’s 3,500 grocery 

and hardware Supercentres. 

Jeff Bezos, Amazon’s founder, is 

instead entering the top end of 

the grocery market by offering 

$13.7bn for Whole Foods. 

This suggests either that Mr 

Bezos has lost his bearings or 

that many people think about 

Amazon in the wrong way. In 

fact, it is not so much an online 

discounter as a vast convenience 

store. Making things easier, either 

by cutting prices or by delivering 

goods simply, is his master plan. 

The Whole Foods deal brings 

to mind not Walmart, Aldi, or 

Kroger, the largest traditional US 

supermarket, but a company that 

predated them: the Great Atlantic 

and Pacific Tea Company. A & P 

was a precursor of US supermarkets 

and the way that it combined 

efficient technology with high 

street grocery outlets provides 

clues to Bezos’s thinking. 

Before A & P, Americans 

shopped at small-town stores 

that were “often run in a haphazard 

manner” and purchased 

their supplies from “a byzantine 

collection of jobbers and middle 

men that was rife with corruption”, 

according to Paul Ellickson, 

an economics professor at Rochester 

university. 

Like an early 20th-century 

Amazon, A & P cut through all of 

that. In 1913, it opened “economy 

stores” on high streets, supplying 

them through its own network of 

warehouses and delivery trucks. 

It offered its own private label 

brands, which were fresher and 

less likely to be out of stock. A & P 

expanded to 16,000 stores in 1930 

as economies of scale allowed it 

to undercut independents. 

It eventually became a victim 

of its own success. Smaller operators 

lobbied for it to be curtailed 

and price discrimination was 

banned by the 1936 Robinson- 

Patman Act to stamp out discounting. 

It went into decline, 

replaced by large supermarkets 

built by Kroger and Safeway in 

warehouse districts and away 

from high streets. 

But the combination of Amazon 

and Whole Foods suggests 

that history is starting to repeat 

itself. The supermarket itself 

has reached an apotheosis in 

huge suburban stores run by 

Walmart, as well as Carrefour and 

Tesco in Europe, and many shoppers 

are looking for alternatives. 

Amazon’s Whole Foods deal is an 

experiment rather than the solution, 

but it is intriguing. 

The supermarket’s strength is 

becoming its vulnerability in an 

age when technology is changing 

the rules of retailing. It reduces 

costs and prices by grouping 

together many kinds of goods in 

one place, from tins of beans to 

fresh fish and meat, and persuading 

shoppers to bear the cost of 

final delivery. 

Yes, there is already representation 

of the Chinese economy elsewhere 

in the emerging market index; 

Chinese companies listed in Hong 

Kong or the US represent more than 

a quarter of it. These companies, 

however, meet certain standards of 

disclosure, governance, and ownership 

structure. This is not to say that 

the US or Hong Kong markets are 

perfect. 

Fury over 

Norway’s record 

oil offering 

RICHARD MILNE 

Norway has infuriated 

environmental groups 

by opening up a record 

number of Arctic 

blocks for oil exploration. 

Norway’s oil ministry is offering 

93 blocks in the Barents 

Sea, located entirely in the Arctic 

Circle, with applications by 

companies expected by the end 

of November. 

The move to open up new 

areas in the Arctic - including 

parts that were until recently 

covered in ice, as well as blocks 

close to an important nesting site 

for birds - was met with dismay 

by environmentalists. 

“It’s just a perfect example of 

the dichotomy of Norway as a 

leading environment nation. We 

are telling everybody else what 

to do. But for us, it’s not even 

business as usual; it’s escalating 

business as usual,” Nina Jensen, 

Norway head of the wildlife 

charity WWF, told the Financial 

Times. 

Oil companies are optimistic 

about the prospects in the Barents 

Sea. Several chief executives 

have told the FT they think it will 

be the world’s next big oil region 

in the world. 

Norwegian officials estimate 

about 18bn barrels of oil equivalent 

could be found in the Barents 

Sea, from the northern part 

of mainland Norway up to the 

Svalbard archipelago and beyond 

to the border with Russia. 

Norway’s centre-right government 

talked about a “ green 

shift” in its economy after oil 

prices fell in 2014. But they are 

now pushing ahead with plans 

to open up new areas including 

about 20 blocks close to Bear 

Island, an uninhabited outcrop 

midway between mainland Norway 

and Spitsbergen. 

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@ FINANCIAL TIMES LIMITED 2015 

Liquid Telecom 

secures $600m 

for Africa push 

NIC FILDES 

Liquid Telecom has 

raised $600m via a 

bond issue to pursue 

further acquisitions 

and expand its superfast 

broadband network across 

Africa, as it continues to see 

opportunity in the continent’s 

densely populated and fastgrowing 

cities. 

The business, which is based 

in London and is owned by 

Zimbabwe’s Econet Wireless, 

has been linked with an initial 

public offering after it turned 

down “multibillion-dollar offers” 

from unnamed investors in 

the past two years. 

Liquid Telecom acquired 

South African fixed-line operator 

Neotel from Tata Communications 

for $430m last year after 

a deal to sell that business to 

Vodacom, Vodafone’s business 

in the country, did not materialise. 

That has boosted its revenue 

in the year to February 28 

to $594.6m and its gross profit 

to $359.6m. The Neotel deal also 

increased its network reach to 13 

countries and its customer base 

Etsy, the online market 

for artisan and handmade 

goods, is to trim 

its workforce by 15 per 

cent in an effort to combat 

problems that have led to shares 

falling a third since a listing two 

years ago. 

The Brooklyn-based company 

said yesterday it would 

shed 140 jobs, bringing the 

number of eliminated positions 

to 230, or about 22 per cent of its 

headcount compared with the 

end of 2016. 

The cuts come as Josh Silverman, 

the new chief executive, 

looks to make Etsy leaner and 

focus on driving sales at Etsy. 

com, according to someone 

familiar with the company’s 

plans. Since taking the lead of 

Etsy last month, Mr Silverman, 

former chief at Skype, has aimed 

to make the ecommerce site 

nimbler and to centre resources 

on the largest growth opportunities. 

This means prioritising 

its core marketplace over niche 

initiatives such as Etsy Studio, a 

sub-site aimed at “do it yourself” 

FINANCIAL TIMES 


to 113,000. 

Liquid Telecom supplies fibre 

cable lines across south, central 

and eastern Africa and also provides 

network services to some of 

Africa’s biggest telecom groups, 

including MTN, Orange, Bharti 

Airtel and Vodafone. 

The $600m capital raising 

comes alongside a new $100m 

credit facility, as the company 

looks to keep up with demand for 

connectivity in markets including 

Kenya, Rwanda and Uganda. 

Data traffic is expected to rise by 

a third a year to 2020 according 

to the company. 

Nick Rudnick, chief executive, 

said integrated fibre networks 

were being offered on a multinational 

basis for the first time 

which created opportunities for 

“an enormous amount of growth”. 

“Customers in Nairobi can 

connect in Kigali with the same 

speeds as seen in western markets,” 

he said. 

“It is the first time on a multinational 

scale this has been 

possible on the continent. It is 

the kind of service seen in Europe 

some years ago and Africa 

is catching up.” 

Etsy sheds 15% of jobs 

as sales growth slows 

ANNA NICOLAOU 

crafts, this person said. 

Despite nearly $3bn in sales 

made on its site last year, Etsy - 

which offers about 45m goods, 

many made by individual artists 

- has seen transaction growth 

slow as its search engine grapples 

with matching buyers and 

sellers with complex and quirky 

demands. 

The staff reduction “puts us 

at our fighting weight”, Silverman 

told Fortune. The cuts will 

be made primarily to marketing, 

product management and 

general and administrative positions. 

Etsy expects to incur costs 

of $6m to $8.8m as part of the 

move, on top of the $6.5m-$8m 

it expects to spend related to job 

cuts announced in May. 

The group’s shares rose 0.6 

per cent yesterday. The stock has 

gained almost 20 per cent this 

year and is up 43.4 per cent over 

the past 12 months. The company, 

which has about 30m active users 

compared to Amazon’s 300m, 

lost $400,000, undershooting 

forecasts for a $500,000 profit, 

on sales of $96.9m for the three 

months to the end of March. 

BEN MCLANNAHAN & LAURA NOONAN 

Tidjane Thiam 


Cyber security start-up wins SoftBank backing 

HANNAH KUCHLER 

Cybereason, a cyber security 

start-up that uses artificial 

intelligence to track hackers 

as they move through a 

network, without the need for human 

supervision, has raised $100m from 

SoftBank to fuel its expansion. 

Founded by a former officer from 

Israel’s 8200 unit, which specialises in 

offensive cyber security, Cybereason 

uses machine learning to try to replicate 

the tactics he used to hunt hackers 

in the military. 

Lior Div, co-founder and chief executive 

at Cybereason, said his product 

scans the network to tell customers 

“the full story”: whether you are under 

attack right now, where are the intruders 

in the network and how they are 

moving from one machine to another. 

C002D5556 

Credit Suisse is doubling 

down on leveraged finance 

as the bank tries 

to get back to “business 

as usual” after a difficult couple of 

years of cuts and retrenchment. 

Leveraged finance is the bank’s 

biggest calling card in the US, a 

legacy of its late-1980s acquisition 

of First Boston. 

Switzerland’s second-largest 

bank aimed to bolster that business 

while reinforcing its already 

dominant position in Europe, said 

Jim Amine, head of the investment 

banking and capital markets 

division in New York. 

The push comes as Credit 

Suisse enters the second half of 

a three-year restructuring plan 

put in place in October 2015 by 

Tidjane Thiam, chief executive, 

which included a radical paringback 

of its trading unit. 

The bank is also fresh 

from completing a SFr$4.1bn 

(US$4.2bn) capital raising, patching 

up a hole left by a $5.3bn 

settlement in January with the 

US government for mis-selling 

mortgage-backed securities. 

The bank has ranked number 

four in US leveraged-loan origination 

for the past couple of years 

and number three in Europe, the 

Middle East and Africa, according 

to Bloomberg. 

“Post-2008, global investment 

banks have been trying to define 

what their areas of competitive 

advantage are,” said Mr Amine, 

who was hired by CSFB in 1997 

and spent his first 11 years in 

leveraged finance. 

“We still think there’s room to 

grow in Emea, because it is earlier 

in the credit cycle and it has more 

room to run.” 

The overhaul of Credit Suisse’s 

trading business under Mr Thiam 

has been dramatic: risk-weighted 

assets in the global markets unit, 

which includes stocks as well as 

bonds, slipped to $52bn at the 

end of March this year, down from 

$115bn when the restructuring 

“When you have an adversary behind 

an attack, you need to be much 

more aggressive, have an almost offensive 

mindset in order to deal with 

the problem,” he said. “The old guard 

[of cyber security companies] is simply 

not doing it.” 

Cybereason recently discovered a 

cyber espionage attack on a large global 

corporation based in Asia, where 

the sophisticated attacks, known as 

an “advanced persistent threat” or 

APT, tried to steal proprietary business 

information. 

During what the company dubbed 

Operation Cobalt Kitty, it was able 

to tell how the attackers entered the 

system through spear-phishing attacks 

- fake targeted emails sent to senior 

management - and compromised 

more than 40 PCs and servers. 

Cybereason already has a joint 

BUSINESS DAY 

A3 

Credit Suisse to bolster leveraged finance business 

began. 

Most of the cuts were in distressed 

debt. 

“We feel like the heavy lifting 

is behind us and the bulk of the 

restructuring is done,” Brian Chin, 

head of global markets, said. 

“Now we’re poised to get back to 

business-as-usual-type discussions 

and activities and actually 

poised to grow a bit.” 

Amine said the changed regulatory 

environment in the US 

provided a better backdrop for 

growth in activities such as leveraged 

lending. 

In 2013, government agencies 

combined to put curbs on banks 

underwriting loans where the total 

debt burden would amount to 

more than six times the acquirer’s 

earnings before interest, tax, depreciation 

and amortisation. 

This week the US Treasury 

recommended that framework 

be reopened for comments and 

refined, as part of a long list of 

measures that would loosen 

many Obama-era restrictions. 

venture in Japan with SoftBank, which 

was an existing investor. SoftBank was 

responsible for the full $100m this 

round, but the money did not come 

from its $93bn technology fund. Investors 

in previous rounds included 

defence contractor Lockheed Martin 

and venture capital firms CRV and 

Spark Capital. 

Sales of the product, designed to 

replace other endpoint protection 

software, have soared 500 per cent 

in the past year, the company said, 

as it increased its headcount by 200 

per cent. 

Cybereason will use the new capital 

to expand internationally, as the 

majority of its customers are in the 

US and Japan, improve its technology 

and make bolt-on acquisitions 

or so-called acqui-hires for talented 

technical teams.

C002D5556 

A4 BUSINESS DAY 


FT 

ANALYSIS 


Kim Jong UN’s regime - From feudalism to crony capitalism 

BRYAN HARRIS 

Once associated with 

Stalinist bureaucracy 

and famine, 

North Korea’s market-based 

reform 

effort has led to higher wages 

and private enterprise - making 

it harder to pressure the state 

through sanctions. 

Woken before dawn, the 

group of foreign journalists were 

stripped of their mobile phones 

and piled on to a bus. They were 

in Pyongyang and, officials insisted, 

about to witness a “big 

and important event”. Tensions 

were high amid fears that the US 

could target the North Korean 

capital and a show of force from 

the Kim Jong Un regime seemed 

imminent. 

The destination struck a different 

note, however. When 

reporters disembarked, they 

were greeted not with the sight 

of an intercontinental ballistic 

missile, but instead a wide boulevard 

lined with skyscrapers. The 

world’s press had been brought to 

bear witness to the April opening 

of Ryomyong Street - a construction 

project that has become a 

symbol for North Koreans of their 

nation’s economic development. 

Since ascending to power five 

years ago, Mr Kim has openly put 

economic growth at the heart of 

his agenda, alongside the development 

of nuclear weapons - a 

dual-track policy known as the 

“byungjin line”. 

The result has been gradual 

market-based reforms that have 

led to swift growth in private 

enterprise and an uptick in the 

standard of living that defies 

western preconceptions about 

the erstwhile Stalinist state, according 

to a host of North Korea 

experts, intelligence sources, 

former residents and business 

visitors. 

“North Korea has gone from 

a very tightly controlled state 

socialist economy to basically a 

marketising economy,” says Sokeel 

Park of Liberty in North Korea, 

a group which helps scores 

of people defect every year. “It 

may be two steps forward, one 

step back, but it seems in the long 

run it will be very difficult to truly 

repress and move back to a staterun 

economy.” 

At a time when the US is trying 

to squeeze the Kim regime 

through new sanctions - pressure 

that is likely to rise as a 

result of the death of US student 

Otto Warmbier who was jailed 

in North Korea - the economy 

is showing signs of vitality that 

could make it even harder to exert 

leverage on Pyongyang. 

Any analysis of the North 

Korean economy has to proceed 

with some caution. Reliable 

economic data for the isolated 

nation are scarce and estimates 

vary wildly. Forecasts for 2015 

growth in gross domestic product 

per capita ranged between -1 per 

Andray Abrahamian 

cent by the Bank of Korea in Seoul 

to 9 per cent from the Hyundai 

Research Institute. 

“The challenges of accurately 

computing North Korea’s GDP 

are many and are derived principally 

from a paucity of credible 

macroeconomic data,” says Kent 

Boydston, analyst at the Peterson 

Institute for International 

Economics. 

But for close watchers of the 

reclusive nation, the signs of 

change are clear. Notably, wages 

have surged, as has the growth 

of a moneyed class known as the 

donju. “The changes are obvious 

when you go to Pyongyang. There 

is vehicular traffic and the city has 

a skyline like never before,” says 

a former US intelligence official, 

pointing out the growing use of 

previously rare items like solar 

panels and air conditioners. 

The reforms, which have led to 

a boom in de facto private enterprises, 

have been almost entirely 

implemented informally, with 

little mention in the state media. 

Mr Kim cannot be seen to question 

the ideological legacy of his 

father and grandfather - the previous 

leaders who both decried 

the free market - for fear of raising 

questions about his own position, 

says Andrei Lankov, a prominent 

Seoul-based academic who lived 

in Pyongyang. 

“Kim Jong Un has decided 

to do something his father was 

afraid of - he has started introducing 

significant elements of 

the market economy,” adds Prof 

Lankov. “He has basically said 

it is OK now to do business, but 

that does not mean liberalising 

politics.” In effect, Mr Kim is taking 

early steps to implement the 

sort of model followedby both 

China and Vietnam, which have 

promoted growth through market 

reforms while maintaining 

tight political control. 

‘A better life’ 

Kim leaves few obvious fingerprints. 

Analysts say he has operated 

partly by not doing anything 

to damage grassroots private 

business. At the same time, the 

selection of senior officials to 

work in the economic area suggests 

that Mr Kim has an eye on 

growth. Presiding over the opening 

of the skyscraper-lined boulevard 

in April was Pak Pong Ju, 

who was ousted as prime minister 

in 2007 for pushing market-based 

reforms but who now oversees 

the economy. 

Lim Kang-taeg, a researcher at 

the Korea Institute for National 

Unification, points out that “market 

activities are occurring within 

the boundary of the state’s control”. 

He added: “Kim Jong Un is 

viewed as a practical figure as he 

tolerates market activity to some 

extent, seeking to give people a 

better life.” 

The result, according to North 

Korea watchers such as Prof 

Lankov, is “a significant improvement 

in living standards” and 

economic vibrancy, most evident 

in the flourishing number of restaurants 

and markets. 

Known as jangmadang, these 

markets - both official and unofficial 

- have proliferated rapidly in 

recent years and are now increasingly 

the norm for purchasing 

consumer goods. According to a 

survey of more than 1,000 defectors 

by the Korea Development 

Institute, a state-run think-tank 

in Seoul, more than 85 per cent 

of North Koreans now use these 

markets for food, compared with 

6 per cent who rely on state rations. 

Wages have also appeared to 

increase exponentially in recent 

years. According to the institute, 

salaries in the official state sector 

have increased more than 250 per 

cent in the past 10 years to about 

$85 (more than 75,000 North Korean 

won) a month, while wages 

in unofficial “side” jobs, such as 

private enterprises, have boomed 

more than 1,200 per cent. Lee 

Byung-ho, then head of South 

Korea’s intelligence service, estimated 

earlier this year that 40 per 

cent of North Korea’s population 

is engaged in some type of private 

enterprise. 

“The North Korean economy is 

the illegal - or unofficial - economy,” 

says Daniel Tudor, co-author 

of North Korea Confidential , a 

book on the country’s emerging 

capitalism . “North Korea is going 

from feudalism to crony capitalism.” 

These unofficial enterprises 

are typically set up within government 

ministries, where wealthy 

individuals can bribe officials 

for the right to establish a company, 

says Tudor. Unfettered 

by the state, that individual will 

then pursue his own enterprise, 

returning a cut, typically 30 per 

cent of income, to officialdom 

every month. “It is like a form of 

tax,” says Tudor. 

In addition to the tacit acknowledgment 

of private business, 

Kim has implemented 

broader agricultural and industrial 

reforms, allowing managers 

greater responsibility and 

autonomy. 

“The biggest misconception 

about North Korea is that it is all 

state-run,” says Andray Abrahamian 

of Choson Exchange, which 

supports entrepreneurs in North 

Korea by providing business and 

marketing training. “Kim’s brand 

is associated with the economy 

and that rhetorical association 

has been matched with an increase 

in the quality of life and 

consumer goods.” 

For Mr Abrahamian, who has 

visited North Korea 29 times, 

there are even early signs of 

emerging North Korean conglomerates, 

or chaebol as the 

business groups are known in 

South Korea. 

“There is something of a conglomeratisation 

taking place, 

not dissimilar to what you see in 

Japan or South Korea. There are 

certain sectors that are proving 

more profitable and there is a 

scramble to get in,” he says. 

Mr Abrahamian points to the 

example of Masikryong, a group 

that runs a ski resort, produces 

bottled water and operates buses 

and tours. Air Koryo, the national 

airline, which also runs one of 

Pyongyang’s handful of taxi companies 

and recently began selling 

tinned pheasant, also fits the bill. 

‘Instinct for isolationism’ 

After surging ahead of its 

southern neighbour in the immediate 

aftermath of the Korean 

war, the North Korean economy 

began to stumble in the latter half 

of the last century, eventually hitting 

rock bottom with a devastating 

famine that killed hundreds 

of thousands in the mid-1990s. 

Although it has since been 

boosted by the development of 

grassroots capitalism, it has yet to 

harness what Kwon Goohoon, a 

Goldman Sachs economist, calls 

its “strong untapped potential”, 

including an abundant labour 

force and bountiful natural resources 

such as coal, uranium 

and iron ore. 

Even with the modest signs 

of reform the economy remains 

stifled by power shortages, decaying 

equipment and sanctions 

enforced after Pyongyang’s 

nuclear weapons tests. For Mr 

Park, the investing environment 

is treacherous and undercut by 

North Korea’s “strong instinct for 

isolationism”. 

“Which entity sanctions North 

Korea the most? It is the North 

Korean government,” he says, 

pointing to the example of the 

Ebola crisis in 2014 when Pyongyang 

shut its doors to its few 

thousand yearly visitors, despite 

the absence of the disease in the 

region.

BUSINESS DAY 

Fact Check 

Have airports across Nigeria actually commenced 

implementation of executive order? 

About a month 

ago, Yemi Osinbajo, 

acting 

President of 

Nigeria signed 

the three executive orders 

with the potential 

to significantly change 

some of the ways government 

business and operations 

are conducted in the 

country. 

While implementation 

has begun across various 

sectors of the economy 

including the aviation sector, 

there seems be focus 

on the five international 

airports which include 

Murtala Muhammed International 

Airport, Ikeja, 

Lagos, Mallam Aminu 

Kano International Airport, 

Kano, Nnamdi 

Azikiwe International 

Airport, Abuja, Akanu Ibiam 

International Airport, 

Enugu and Port Harcourt 

International Airport, Port 

Harcourt. 

As implementation 

begun across these airports, 

government agencies 

such as the Federal 

Airports Authority of Nigeria, 

(FAAN), Nigeria 

Civil Aviation Authority, 

(NCAA), the Nigerian 

Airspace Management 

Agency, (NAMA), Nigeria 

On the communication system, NAMA 

has also failed to procure and install 

serviceable communication equipment, 

making it difficult for pilots and air traffic 

controllers to communicate. 

affecting the ease of doing 

business in the country 

support for local content 

in public procurement 

by the Federal Government, 

and timely submission 

of annual budgetary 

estimates by all government 

agencies, including 

companies owned by the 

Federal Government. 

According to NCAA, it 

has put in place adequate 

measures to ensure full 

and sustained compliance 

with the Presidential 

Order at the nation’s 

airports. 

Muhtar Usman, the 

director general, Nigerian 

Civil Aviation Authority 

(NCAA), has directed all 

Aviation Safety Inspectors 

(ASI) to monitor the 

level of compliance with 

the Executive Order (EO) 

alongside their statutory 

oversight responsibilities 

at the airports as enshrined 

in the Nigerian 

NEWS YOU CAN TRUST I THURSDAY 22 JUNE 2017 C002D5556 

Meteorological Agency 

(Nimet) and Accident Investigation 

Bureau (AIB) 

have had to issue several 

releases, made several 

promises and taken steps 

to show its compliance 

but have consistently focused 

on the five international 

airport, especially 

Lagos and Abuja airports. 

The executive orders 

which stipulate sanctions 

and punitive measures 

for violations also provide 

specific instructions on a 

number of policy issues 

Civil Aviation Regulations 

2015 (Nig.CARs 2015). 

On its part, NCAA has 

prepared a standard document 

outlining its core 

functions and services, 

appropriate charges, fees, 

licenses, waivers and other 

tax-related processes in 

adherence to the Executive 

Order (EO). 

Also, the Nigerian 

Airspace Management 

Agency (NAMA), says it 

has begun the process of 

implementing the directive. 

Fola Akinkuotu, the 

Managing Director of 

NAMA, said the agency 

had already updated its 

website showing the requirements, 

conditions 

and procedures for doing 

business or obtaining services 

in the organisation. 

These include all fees 

and timelines necessary 

for the processing of applications 

for the services 

of the agency, he said in 

a statement on Sunday in 

Lagos. 

Saleh Dunoma, Managing 

director of FAAN 

said there would be no 

more multiple checks at 

the airport to ease seamless 

operations so that 

other participating agencies 

will find it easy to 

implement their bit of 

the Executive Order. In 

addition to these, infrastructures 

are being put 

in place at the Lagos and 

Abuja airports. 

FAAN therefore ban 

luggage checks at the departure 

hall of the Murtala 

Muhammed International 

Airport, Lagos. 

“The Executive Order 

does not give room for 

pre-checks on luggage. All 

checks should be done in 

designated areas. Luggage 

should not be checked at 

the departure hall,” Dunoma 

had said in a circular 

issued to all operators at 

the airport. 

He said, “We have to 

meet the deadline set by 

the Executive Order. There 

are strategies in line with 

the order, but the concerned 

agencies need to 

meet regularly to ensure 

that these strategies are 

adhered to and improved. 

While operators and 

stakeholders continue to 

commend the compliance 

level at the various 

busy airports in Nigeria, 

one will wonder why the 

implementation appears 

to be slow at the other 23 

domestic airports across 

the country. 

On the level of the implementation, 

the NCAA 

has failed to put in place 

adequate measures to 

ensure full and sustained 

compliance with the Presidential 

Order at the other 

23 nation’s airports. While 

implementation is done 

in Lagos and Abuja, implementation 

is slow at 

other airport. It therefore 

behoves on the agency to 

sanction and call agencies 

who do not comply 

to order. 

NAMA on its part has 

failed to install equipment 

that will aid visibility at 

the airports, which has 

made it difficult for some 

airlines to land, while others 

were forced to either 

cancel flights or delay flight 

operations. 

On the communication 

system, NAMA has also 

failed to procure and install 

serviceable communication 

equipment, making it 

difficult for pilots and air 

traffic controllers to communicate. 

Checks carried out by 

BusinessDay show that 

aside from airports in 

Kano, Port Harcourt, Abuja 

and Lagos, by 7:30 pm air 

operations in most airports 

in Nigeria cease operations 

as a result of poor airfield 

lighting facilities for airplanes 

to take off or land 

at night. 

FAAN which happens 

to be the agency that generates 

most revenue have 

also not lived up to its expectations 

in providing 

the needed infrastructures 

across various airports to 

aid seamless operations. 

In fact, facilities across 

domestic airports are still 

left without regular maintenance 

and most of them are 

now in dilapidated state. 

The airports lack hi-tech 

equipment, proper scanning 

machines and good 

air conditioning system. In 

some airports, the runways 

either lacked lighting or 

they were poorly marked. 

TopfiveFacts 

Trivial 

$69 million 

Domestic airlines pay an average total 

sum of $69 million annually for aircraft 

insurance covers. 

2,505,612 passengers 

The total number of passengers to pass 

through Nigerian airports was 2,505,612 for 

first quarter of 2017. 

543 flight dispatchers 

Presently, Nigeria has 543 licensed 

flight dispatchers. 

1,532 aircraft maintenance 

engineers 

Records by the Nigeria Civil Aviation Authority, 

(NCAA) show that there are 1,532 licence aircraft 

maintenance engineers. 

627,406 international 

passengers 

For domestic travel, MMA in Lagos was the 

airport to account for the largest number 

of international passengers, with 627,406 

passing through in the first quarter of 2017. 

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Ghana Office: Business Day Ghana Ltd; ABC Junction, near Guinness Ghana Limited, Achimota – Accra, Ghana. 

Tel: +233243226596: email: mail@businessdayonline.com Advert Hotline: 08116759801, 08082496194. Subscriptions 01-2950687, 07045792677. Newsroom: 08022238495 

Editor: Anthony Osae-Brown. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.

BusinessDay 22 Jun 2017

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