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N100 Vol. 001. 04 Monday May04 - 10, 2015

L-R: Vice-Chairman, UBA Plc, Ambassador Joe Keshi; Group Managing Director/CEO, UBA Plc, Mr. Phillips Oduoza and Chairman, UBA Plc, Mr. Tony O. Elumelu, CON, at the 53rd Annual General Meeting of the Bank held in Lagos

QUOTE

“When businesses and people have more access to finance, everyone benefits.” Ban Ki-MoonUN Secretary-General

Why APC Must Tackle Power Challenge for Industrial Growth

MTN: The 21-Nation Telecom Brand

Ben Onyedika

There are strong indica-tions that the Nigerian National Petroleum Cor-

poration (NNPC) may sought relieve from the nation’s strate-gic reserve estimated at N94.5

billion worth of PMS (petrol) to cushion the effect of the cur-rent fuel scarcity nationwide.

The NNPC says the nation has enough stock of petrol in Port Harcourt, Warri and Cala-bar to service the country for 27 days at a national consump-tion rate of 40 million litres per

day even as it has stepped up other efforts to end the distri-bution challenges in the fuel supply system.

NNPC blamed the current scarcity on the strike action by the National Association of Road Transport Owners (NAR-TO) and the Petroleum Tanker

Drivers (PTD) who have refused to lift petroleum products from the coastal depots in protest of the huge amounts they are being owed by the major mar-keters.

“We are however, working towards a speedy resolution of the issues to ensure a hitch-

free distribution of products across the country”, the Cor-poration stated in a statement.

It appealed to NARTO and PTD to call off the strike in the interest of the country and not unleash unnecessary hardship on Nigerians.

Meanwhile, the Federal Gov-

ernment says it had paid N156 billion debt to oil marketers in line with its commitment to prioritise payments in spite of revenue constraints.

The Minister of Finance Dr Ngozi Okonjo-Iweala, said the payment had two components

Continues on PAGE 2

NNPC May Tap N94.5bn Reserve to End Fuel Scarcity

The growth pro-jection of Ni-geria could lift to 6-7 per cent in the coming

decade on the plank of growth-friendly policies by successive governments in the country.

This is one of the key findings from a report from PricewaterhouseC-

oopers(PwC) economists on The World in 2050: Will the Shift in Global Economic Power Contin-ue? The report presents long-term projections of potential Gross domes-tic Product (GDP) growth up to 2050 for 32 of the largest economies in the world, covering 84% of to-tal global GDP.

Indeed, Nigeria, Viet-nam and the Philippines are notable risers in the global GDP rankings in the long term, reflecting rela-tively high projected aver-age growth rates of around 4.5-5.5% per annum over the period to 2050.

Andrew S. Nevin, PwC Nigeria’s Chief Economist and co-author of the re-

port, comments:“According to our long

term projections, Nige-ria could sustain average growth of around 5-6% per annum in the long run, fol-lowing projected growth of around 6-7% in the rest of this decade, assuming broadly growth-friendly policies are pursued. While foreign investment has in

absolute terms long been focused on the oil sector, portfolios are becoming increasingly diversified, moving towards the pow-er, agriculture and min-ing areas of the economy that have demonstrated a comparative advantage in emerging markets vis-à-vis the West.”

Continues on PAGE 2

Unveiling the April 2015 IMF Regional Economic

Outlook: Sub-Saharan Afri-ca, Ms. Antoinette Sayeh, Director, IMF African De-partment commented:

“Sub-Saharan Africa’s economy is set to register another year of solid eco-nomic performance with growth expected to expand 4½ percent in 2015. The region will continue being one of the fastest growing in the world—

Continues on PAGE 2

Nigeria’s GDP Projected on 7% in Coming Decade

IMF Projects 4.5% Growth for Sub-Saharan Africa in 2015

Business Journal May 04 - 10, 2015

2 Newswww.businessjournalng.com

Continued from PAGE 1

comprising `I Owe You’ (IOU), given in March and interest on payment.

“The first consists of the cash backing of the N100 billion IOU which the mar-keters were given in March. The second is N56 billion in interest payments for the marketers according to the PPPRA template.

This leaves a balance of N98 billion certified by PPPRA as the amount owed the marketers,” she said

She explained that the N156 billion was the latest in a series of significant payments made to the oil marketers within the last five months. She explained that these included over N300 billion in two instal-ments in December last year and N31 billion in in-terest differentials recent-ly. She said in all, oil mar-keters had received over N500 billion within the past five months.

Okonjo-Iweala urged the marketers to appreciate the efforts being made by the government to meet up with their payments.

“The Federal Govern-ment has made maximum effort, inspite of the well-known fact that the fall in oil prices has significantly reduced national revenues, to prioritise payments to marketers. For the sake of Nigerians who are bearing the brunt of fuel scarcity, the marketers should re-ciprocate in the spirit of di-alogue and co-operation in which we have always tried to engage them,” she said.

The Executive Secretary, Major Oil Marketers Associ-ation of Nigeria (MOMAN), Mr. Obafemi Olawore, said the Association appreciates the gesture and commend-ed the Federal Government for fulfilling its promises.

Olawore, however, said the association will not take any corresponding action until its members receive payment alert from their respective banks.

The MOMAN scribe said the association was ready to commence importation and distribution of fuel to end the suffering of Ni-gerians at fuel stations once the money hit their accounts. He emphasised that the members will not work with any paper prom-ise without cash backing.

NNPC May Tap N94.5bn...

Continued from PAGE 1 The report also stated that

emerging economies of Ni-geria, Indonesia and Mexico could push the UK and France out of the top ten economies of the world by 2050 provided they are able to build their in-stitutions to global standards, diversify their economies and sustain growth friendly poli-cies.

Nevin said: “Over the past decade, Nigeria has boasted superior economic growth and, with the right reforms and investments, Nigeria could become one of the world’s leading econ-omies by 2030, with further progress by 2050. Nigeria’s potential advantages for fu-ture growth include a large consumer market, a stra-tegic geographic location, and a young and highly en-trepreneurial population.”

The report also contains projections based on GDP at market exchange rates, without this relative price adjustment. On that basis, China is projected to over-take the US in around 2028, while India would clearly be the third largest economy in the world in 2050, but still some way behind the US.

Overdependence on natu-ral resources could also im-pede long-term growth in countries such as Nigeria, Russia, and Saudi Arabia un-less they can diversify their economies over time.

“In short, while our anal-ysis confirms that emerging markets have huge poten-tial, they can also be an in-stitutional minefield – both managers and investors need to tread carefully.

Overall, Nigeria continues to be an attractive place to invest not because it is an oil producer, but because of the immense size of its domestic market and the extraordinary commercial energy of its people, which remains largely untapped.”

Nigeria’s GDP...

IMF Projects 4.5%IMF Projects 4.5% Growth for...Continued from PAGE 1second only to emerging

and developing Asia. That said, the economic ex-

pansion will be at the lower end of the range experienced in recent years, mainly reflect-ing the impact of the sharp decline of oil and commodity prices over the last six months. But the impact of this shock will be highly differentiated across the region.

Sayed explained that Sub-Sa-haran Africa’s eight oil export-ers have been hard hit by the price decline, and expects their average growth in 2015 to be about 1¼ percentage points lower than in 2014 in response

to this shock. She added however, that for

the rest of the region, growth prospects remain favourable as the countries are enjoying the benefits of lower oil import bills, although some are also feeling the impact of lower prices for their non-oil com-modity exports. Growth is pro-jected to be particularly strong in most low-income and more fragile countries, and this will help to reduce poverty levels.

“In Guinea, Liberia and Sier-ra Leone, the Ebola outbreak is beginning to be controlled, with a sharp decline in the incidence of new infections. However, 2015 will be another

difficult year, with economic activity expected to be sig-nificantly depressed. The IMF has provided $390 million of assistance to help these coun-tries, including $100 million of grants for debt relief—the first instance of such assistance by a development partner.

“While the baseline scenario is for solid growth, policy mak-ers need to remain mindful of risks that could still cloud the outlook. In particular, global fi-nancial conditions are tighten-ing just as the region’s frontier markets are increasingly rely-ing on Eurobonds to finance their large investment needs.

The deteriorating security

situation in some areas could also strain budgets and have an adverse impact on the near-term growth outlook, especial-ly in the agricultural sector, while weakening prospects for foreign direct investment.

“For the region’s eight oil exporting countries, fiscal ad-justment is a priority; policy makers should support an ad-justment by allowing exchange rates to depreciate, where flex-ible exchange rate mechanisms are in place. Most countries have already initiated policy adjustment.

“The current circumstances also highlight the urgent need for policies that favor structur-

al transformation to diversify sub-Saharan Africa’s produc-tion base and promote greater integration into global trading networks.

This will help the region cre-ate jobs for the rapidly growing young population as the region is set to experience a signifi-cant demographic transition in the next decades. By 2030 or so, the number of people reaching working age in the re-gion will exceed that in the rest of the world combined.

This offers a tremendous op-portunity for sub-Saharan Afri-ca, which, if properly tapped, could create a powerful engine for long-term growth.”

KPMG International has received top per-former ratings for its shared services and outsourcing advisory

capabilities on the Internation-al Association of Outsourcing Professional’s (IAOP) 2015 World’s Best Outsourcing Ad-visors list.

Using a rigorous method-ology that scored applicants on size and growth, delivery excellence, and programs for innovation, the independent judging panel – which includes IAOP buyer members – grant-ed KPMG the highest possible rating for delivery excellence and size/growth, and a distin-guished rating for its cross-cli-ent innovation programs.

The judges acknowledged KPMG’s delivery excellence per its examples of three long-term client engagements that collectively address the entire

sourcing advisory lifecycle – strategy, design and implemen-tation of business processes in HR, finance and accounting, IT transformation, and Managed Governance Services (MGS).

A key component of the ap-plication focused on programs for innovation area, which IAOP describes as “demonstrated through specific programs and resulting outcomes that pro-duce new forms of value for customers.” KPMG’s response highlighted the following ex-amples:

• Its pioneering Phar-maceutical GBS Benchmark Group. The consortium’s objec-tive is to extend knowledge of global business services (GBS) through open, peer-based dis-cussions on key management and operational issues. Current members include most of the world’s top pharmaceutical

companies, and membership is open to all pharmaceutical and medical device organizations globally.

• Its Managed Gover-nance Services (MGS), a full-ser-vice approach to managing third party spend that balances operational effectiveness, com-pliance, and risk management. It combines governance expe-rience, specialized resources, data, and a proprietary tech-nology platform, Governance Workplace® to enable clients to enhance the value of their services portfolios and gain greater value from their provid-er relationships.

• KPMG Lighthouse for Advanced Data and Analytics, a centralised solution center that supports KPMG globally. Its mission is to deliver target-ed data and analytics solutions to clients in concert with the different functions and service

lines across the member firms within the global KPMG net-work.

“Through our establish-ment of Centers of Excel-lence, acquisition of highly seasoned team members, and investments in innova-tive technology solutions, we continue to position our-selves as the clear choice for clients who want to achieve large-scale sustainable change,” said David J. Brown, Global Lead, Shared Services and Outsourcing Advisory, KPMG International and Prin-cipal, Advisory, KPMG in the US.. “The client references we obtained for use in our World’s Best Outsourcing Advisor application, and the scores we received from the IAOP judges, underscore the transformational value we deliver to our clients.”

KPMG Rated High on 2015 World’s Best Outsourcing Advisors List

R-l: Founder Zinox Group, Sir Leo-Stan Ekeh; Managing Director/CEO, VDT Communications and Keynote Speaker, Mr. Biodun Omoniyi, and President, Association of Telecoms Companies of Nigeria (ATCON), Mr Lanre Ajayi, at the Beacon of Information and Communication Technology (BoICT) Lecture and Awards 2015 organised by Nigeria Communications Week in Lagos


3


4www.businessjournal.com.ng

Business Eventswww.businessjournalng.com

; L-r: Senior Manager, Sales, Lagos/South-West Region, MTN, Gbenga Olalandu; MTN Retail-er, Awobajo Olusegun; GM, Business Development, MTN, Kolawole Oyeyemi; MTN Retailer, Eze Edith, Sales and Distribution Executive, MTN, ‘Tsola Barrow, and another Retailer, Bakare Taiwo, at the unveiling of MTN TruTalk Win-a-Home promo for retailers in Lagos

L-r: Executive Director, Thompson & Grace Investment Ltd, (T&GIL), Engineer Ekemini Amos; President/Managing Director, Thompson & Grace Investment Ltd, Dr. Isaac Thompson Amos; Executive Secretary, Nigerian Content Development & Monitoring Board, Dr. (Eng.) Ernest Nwapa, and GM Monitoring, NCDMB, Engineer C.P. Okorie, at the commissioning of T&GIL multi-million Naira engineering facilities in Port Harcourt, Rivers State.

L-r: Managing Director/CEO, Seagate Global Services Ltd, Dr. Wilson Arikpo; Security/Safety Officer attached to Exxonmobil, Chief Lawrence Onuigbo-Oriaku; Former President, Insti-tute of Safety Professionals of Nigeria, Eze (Prof) Okunamiri Innocent F. and Zonal Director, (South West), Federal Ministry of Labour and Productivity, Dr. (Mrs) Ifeoma Igweze-Anyan-wutaku, at the 2nd Nigeria Safety and Security awards/Lecture in Lagos

L-r: Product Manager, Access Bank Plc, Mr. Tosin Adeyemi; Founder of SPAN, Mrs. Sarah Boulos; Salsa winners, Korede Oyerrogba and Nneka Obiora; Brand Manager, PepsiCo, Segun Ogunleye and President, International Dance Organisation Nigeria, Mr. Ice Nweke, during the cheque presentation to winners of IDO Salsa Competition 2015 in Lagos.

; L-r: CEO, Chocolate City Group, Audu Maikori; Managing Director, Microsoft Mobile Devic-es and Services, Joseph Umunakwe; Winner #MakeItHappen# Microsoft Lumia 535 Dual SIM ‘Passion to Empire’ activation campaign, Emmanuel Okena; CEO, House of Tara, Tara Fela-Durotoye; and Co-founder Jobberman, Opeyemi Awoyemi at the announcement of the 5 winners of the campaign, held at Intercontinental Hotel, Lagos.

L-R: Perm. Secretary, Rivers State Ministry of Education, Michael West; Rivers State Com-missioner of Education, Dame Alice Lawrence-Nemi, GM, External Relations, Nigeria LNG, Kudo Eresia-Eke; MD, Tianjin, Peter Lin and Assistant Company Secretary, NLNG, Ikechukwu Eke during an agreement signing ceremony of NLNG-funded N4.5bn construction of Bonny Model Secondary School in Port Harcourt.

L-r; Commissioner for Market Competition and Rates, Nigerian Electricity Regulatory Com-mission (NERC), Mr. Patrick Umeh; Deputy General Manager, Engineering, Mr Abdul Mo-hammed and NERC Chairman, Dr Sam Amadi, at a meeting of Consumer Advocacy Groups in the Nigerian electricity supply industry in Abuja

; L-r: Service Manager, Lenovo Technologies West Africa, Ms. Nkechi Okolo; Marketing Man-ager, Smartphones, Lenovo Technologies West Africa, Mr. Bolade Oyekanmi and Executive Director, Mobile Business Group, Lenovo Technologies Middle East & Africa (MEA), Mr. Sha-shank Sharma at Lenovo’s inaugural breakfast meeting and introduction of the Lenovo S90, Lenovo S60 and Lenovo P70 smartphones in Lagos


5Editorialwww.businessjournalng.com

Business Journal Newspaper is published weekly by Egelon Communication Company. Suite B2, Glory Shopping Complex, 229, Ikotun-Idimu Road, Council Bus-Stop, Idimu, Lagos. Phone: 08023088874, 07058919138. Email: [email protected]. Publisher/Editor-in-Chief: PRINCE COOKEY.

© 2015 All rights Reserved

Cartoon

Publisher/Editor-in-ChiefPrince [email protected] Lagos BureauAbraham Adewole

Snr. CorrespondentBlessing Ikeme

Abuja BureauChris Onwuka

Kaduna BureauHaruna Mohammed

PH BureauAmaechi Okonkwo

Aba BureauLarry Akunne

Head of Marketing/AdvertElvis Ebigwu

Digital ConsultantBamidele Owotoke.

Design ConsultantKelechi Okoro

Logistics ConsultantGodspower Cookey

Secretary/AdminLatifat Adedayo

Body of AnalystsHaniel UkpaukureChris OkekeOla Gam-IkonAdemola AkinbolaMuideen IbrahimAyo Adekunle

Board of Editorial AdvisersDr. Justus UrantaEngr. Titi Omo-Ett uMr. Chike MokwunyeMr. Chris UwajeMr. Gbolahan Olutayo

After all the tension unleashed by the Presidential elec-tion that threw up Muhammadu Buhari, a retired army Gen-

eral and former Head of state, as President-elect on March 28, it is now clear that change has already happened in Nigeria.

However, how the in-com-ing government harnesses the massive goodwill conferred on it and drives with passion to accomplish greater change will count far more than the resonat-ing euphoria that is now being witnessed all over.

In response to the wind of change blowing across the country, the entire world is full of expectations that Buhari’s coming should launch Nigeria to

new thresholds of nationhood and prosperity.

Certainly, his victory connotes a mandate given to him by the electorate to deal decisively with such loathsome issues as inse-curity, corruption, culture of impunity and indiscipline that have been on the ascendancy nationwide.

On the economic front, expectations are also high that deep-seated change needs to happen without delay in such critical sectors as pow-er, oil and gas, financial and transport sectors. This is in addition to making the busi-ness environment a lot more competitive, while also urgent-ly putting in place verifiable initiatives aimed at diversifying the economy to absorb the

shocks of the wild oscillations of the global oil market.

While government needs to expedite the passage of a pro-Nigeria Petroleum Industry Bill (PIB) into law, adept policy steps now need to be taken to revive trade and industry, dilate productivity possibil-ities and address the coun-try’s unconvincing exchange, interest and inflation rates. This is necessary if the badly depleted external reserves that can hardly support six months imports must be sustainably built up again.

In addition, the new gov-ernment needs to run at the gazelle’s speed to achieve the roads, rail, maritime and air aspects of the transport sector, while creating job opportuni-

ties to address the stifling real-ity of poverty, unemployment and inequality in the land and engage the country’s youth in more meaningful and regener-ating endeavours.

The new government must ensure that the scope of in-frastructure and institutional deficits is not restricted to the economy. There is also the car-dinal need to work on the so-cial and interpersonal aspects of infrastructure. This implies that enormous work needs to be done in the areas of educa-tion, health, sports, recreation and youth development.

Above all, we must not make the mistake of not working in-tensively on the infrastructure of the human mind to instil discipline and ensure Nigerians

truly believe in the country be-yond singing the national anthem and reciting the national pledge.

This is necessary if we must achieve real national rebirth. Addressing these challenges will definitely be Herculean, but the in-coming administration will have no excuses if it fails.

This underpins our posi-tion that only able and willing race-horses must be appointed as members of the cabinet and dexterous kinetic managers as heads of departments and agencies of government respon-sible for policy transmission and implementation.

Overall, Buhari must do every-thing humanly possible to work hard and walk the talk to finish well and strong.

Time to Work for Nigeria


6 Shelterwww.businessjournalng.com

France, Japan, South Africa and Uganda co-sponsored the Resolution 25/6 of UN-Habitat Governing Council that ap-proved the Interna-tional Guidelines on Urban and Territorial

Planning.The Resolution calls upon ‘interna-

tional financial institutions, devel-opment agencies, and UN-Habitat to assist interested member States in using and adapting the Guidelines to their territorial and national con-texts, where appropriate, and further developing tools and monitoring indicators.’

The Guidelines are a source of inspiration and a global reference framework that will inform the New Urban Agenda and the unfolding Sustainable Development Goals. The Guidelines will act as a compass for decision makers and urban profes-sionals while developing urban and territorial planning frameworks.

In the lead up to its approval, the Guidelines were discussed with a broader audience during two side events that gathered around 120 per-sons representing national and local governments, development partners, urban professionals, research and academia and civil society organisa-tions.

The first side event was organised by the United Nations Centre for Regional Development (UNCRD)con-sidered how the Guidelines can instill best practice in urban and territorial planning and foster engagement towards Habitat III.

The second side event was organ-ised by the Uganda, discussed the varying implementation strategies across the multi-scale continuum of planning, while looking at practical tools and services that can support the use and adaptation of the Guide-lines.

Dr. Joan Clos, Executive Director of UN-Habitat stated that ‘urban planning is in crisis today, but that, the principles and recommendations contained in the Guidelines can help to tie together different objectives while pointing to the crucial ques-tions of equitable and sustainable development.’

The drafting of the Guidelines was supported by an Expert Group through a broad-based consultative and participatory process and based on evidence, good practices and lessons learnt from different contexts and at different planning scales.

The Experts were nominated by their respective national govern-ments, associations of local author-ities, associations of professional planners and international institu-tions, representing experience and

practice from Africa, Asia, Europe and America. UN agencies and members of the Committee of Permanent Rep-resentatives at UN-Habitat were also consulted and briefed throughout the process of developing the Guidelines.

The process of drafting the Guide-lines had benefited from the financial and technical contribution from the government of France through the Ministry of Foreign Affairs, the gov-ernment of Japan through the Minis-try of Land, Infrastructure, Transport and Tourism the Prefectural Gov-ernment of Fukuoka, the Municipal Government of Fukuoka and Seinan Gakuin University in Fukuoka.

The Guidelines complement the International Guidelines on Decen-tralisation and Strengthening of Local Authorities (2007) and the Interna-tional Guidelines on Access to Basic Services for all (2009), which were also adopted by the Governing Coun-cil of UN-Habitat and implemented in a number of countries

Nigeria Ship with oil rig. In the background

is the Nigerian city of Lagos. • Total value of UN-Habi-

tat investments (2008-2015): US$

4,348,613• Total number of UN-Habitat

projects (2008-2015): 8 projects• Main donors: Government

of Nigeria, ECOWAS, Germany, Feder-al University of Technology, European Commission and, the Africa, Caribbe-an and Pacific Secretariat

• Implementing partners: government agencies, Ministries of Housing and Urban Planning, Youth and Sports, Planning and Budget, Energy; ECOWAS, UNIDO, BMZ/GIZ, UNDP

UN Habitat Approves Int. Guidelines on Urban, Territorial Planning

The drafting of the Guidelines was supported by an Expert Group through a broad-based consultative and participatory process and based on evidence, good practices and lessons learnt from different contexts and at different planning scales


7Shelter

The surging cost of rental housing has squeezed a rising pro-portion of U.S. families since the Great Reces-sion struck in 2007.

For more than one in four renters, housing and utilities consume at least half their family income, according to an analysis of Census data by Enterprise Com-munity Partners, a nonprofit that helps finance affordable housing. The number of such households has jumped 26 percent to 11.25 million since 2007, a sign that the 6½-year-old recovery from the recession has given scant relief to much of the country.

The government defines housing costs in excess of 30 percent of income as burdensome.

“It means making really difficult trade-offs,” said Angela Boyd, a vice president at Enterprise Com-munity Partners. “There are daily financial dilemmas about making their rent or buying groceries.”

The crisis reflects one of the shortcomings of the recovery: Wages have failed to match rising rental prices. At the same time, construction has failed to keep pace with demand from renters. The recession pushed more mil-lennials, former homeowners who faced foreclosure and low-wage workers into rental housing.

A result is that 2.3 million more families face pressures that leave them perilously close to homeless-ness. It’s a reality faced by Lisette Duarte, a 37-year-old living in a two-bedroom apartment with her family in northeast Los Angeles.

Duarte’s husband lost his job as an electrician more than three years ago. With both their son and daughter on the autistic spectrum and in need of care, he chose to stay at home while she worked a job requiring a 90-minute com-mute each way. The lost income forced them out of a three-bed-room house and eventually into a hotel, where vouchers over the course of five months helped them save for a security deposit for an apartment.

About a year ago, the fami-ly moved into a two-bedroom apartment in the Highland Park neighborhood where Duarte had grown up. Two-bedrooms in that gentrifying community rent for an average of about $1,600 a month, according to the online service Apartment List. The expense, along with utilities, consumes half of Duarte’s paycheck.

The family relies on prepaid cellphones. They don’t dine out or go on vacations. Whatever extra

income they have often goes for health care.

More than 30 percent of renters in California, Florida, New Jersey and New York state devote at least half their incomes to housing and utilities, according to the analysis. Other than Alaska, South Dakota and Wyoming, at least 20 percent of renters in every state face simi-larly high costs relative to income.

The analysis was developed for a “Make Room” awareness campaign sponsored by Enterprise Communi-ty Partners. As part of the cam-paign, pop stars such as Carly Rae Jepsen of “Call Me Maybe” fame, who sang for the Duartes, are per-forming concerts in the homes of financially distressed tenants.

Decades of barely rising pay has contributed to the problem. Average hourly wages have risen just 2.1 percent in the past 12 months, according to the Labor Department, while rental prices have climbed 3.7 percent, the real estate firm Zillow said last week.

Many renters lack the income to pay the cost of maintaining and operating these buildings, said Barry Zigas, director of housing policy at the Consumer Federation of America and a trustee at the nonprofit Mercy Housing.

Mercy Housing has a portfolio of 12,000 units for low-income peo-ple and senior citizens. It costs an average of roughly $500 a month to manage each unit, Zigas said. A monthly rent of $500 would mean that anyone working full time for

a minimum wage would devote more than a third of his or her income to housing.

Either the tenants must fork over a greater share of their pay each year or landlords may let buildings fall into disrepair.

“Low-income renters are getting caught in a total squeeze play, as are the owners of the properties,” Zigas said.

The Great Recession caused waves of foreclosures and layoffs that pushed more Americans into renting. More than 36 percent of people now rent, compared with 31 percent before the recession began in late 2007. The increased demand has yet to be matched by construction and renovations.

In March, the National Low Income Housing Coalition reported a shortage of 7.1 million apart-ments for low-income renters. The shortages are most pronounced in Nevada, California, Arizona, Ore-gon, Florida, Colorado and Utah.

Construction firms are building apartment complexes at an annual pace of roughly 321,333 this year, according to the Commerce De-partment. The rising rental prices suggest that construction hasn’t kept pace with demand, according to economists.

For renters such as Duarte, the plan is that her husband can eventually return to work as their children reach adulthood, easing some of their financial pressures.

“I hope that we never encounter homelessness again,” she said

More Americans Spending Half of Pay on Housing• Analysis finds 26% surge since Great Recession

in US families who face burdensome rents


8 Bankingwww.businessjournalng.com

Nina Vucenik

What needs to hap-pen for everyone in the world to have access to a trans-action account by 2020? And, more

importantly, why does it matter? This was the issue the president

of the World Bank Group, UN Secre-tary-General, UN Secretary-General’s Special Advocate for Inclusive Finance for Development, private and public sector leaders discussed at an event, Universal Financial Access 2020, during the 2015 World Bank Group-IMF Spring Meetings.

Some 700 million people worldwide gained access to an account between 2011 and 2014, but 2 billion still remain outside the formal financial system.

The Universal Financial Access goal envisions that all adults will have ac-cess to a transaction account by 2020 to store money, pay bills, and send and receive payments. Such access can help people better manage risks and escape poverty.

The panelists stressed the impor-tance of public-private partnerships to expand financial access to millions of people, and discussed what role each can play to make it happen.

All panelists committed to what they can do and how many financially exclud-ed people they plan to reach by extend-ing their work and services.

Other private-sector coalition part-ners, not present at the event, also pledged considerable commitments which were read onscreen.

The Bank Group will support govern-ments and private sector to reach up to 1 billion people who are financially excluded.

“The World Bank Group’s role is to convene and energize a coalition of partners -- and also to step up our work. Over the next five years, our institution commits to enabling as many as 1 billion adults who are now financially excluded to gain access to a transaction account,” said World Bank Group President Jim Yong Kim.

“Financial inclusion is a lynchpin for

achieving other development goals” said Ban Ki-moon, UN Secretary Gener-al, noting that “without stronger part-

nerships, we cannot make our priorities successful.”

Public-private partnerships play a

huge role in enabling sustainable and scalable financial access, said H.M.

Queen Máxima of the Netherlands, the UN Secretary-General’s Special Advo-

cate for Inclusive Finance for Develop-ment, noting the role that regulators have in creating an environment for the private sector to innovate.

Jaime Caruana, General Manager of Bank for International Settlements, talked about complementarity, propor-tionality, and co-operation as being are critical for a balanced approach.

However, as Ajay Banga, CEO of Mas-terCard, pointed out “It’s not just access to accounts that matters, but usage of those accounts.” He added that tech-nology isn’t the issue, but that the focus should be on business models and scale.

Benno Ndulu, Governor of Central Bank of Tanzania, talked about the need to develop financial products that meet the needs of the unbanked. Tanzania cut in half the number of financially ex-cluded in four years with new technolo-gy. “Innovation takes courage!” he said.

These accounts will benefit people and change the course of their lives, ex-plained Arundhati Battacharya of State Bank of India, a country where 415 mil-lion adults are unbanked.

“If we reach Universal Financial ac-cess by 2020, we have a better change to end poverty by 2030,” concluded President Kim.

“When businesses and people have more access to finance, everyone bene-fits,” summed up Ban Ki-Moon.

Universal Financial Access 2020:The Role of Private Sector, Govts, Multilaterals

ENLARGEThe Monetary Authority of Sin-

gapore said all banks in the coun-try would be assessed for their systemic importance annually.

Singapore’s central bank last Thursday named seven local and international banks that it con-siders “systemically important” to the island nation and said that it would increase supervision of them.

The banks named by the Monetary Authority of Singapore

in its initial list include Citibank, Standard Chartered Bank, Hong-kong and Shanghai Banking Corp. among the international banks.

In addition, three local banks—DBS Group Holdings Ltd., Oversea-Chinese Bank-ing Corp. and United Overseas Bank—and Malaysia’sMalayan Banking Bhd. are also on the first list.

The identified banks will be required to locally incorporate their retail operations and will

be subjected to higher capital requirements, the Authority said.

These banks are “assessed to have a significant impact on the stability of the financial system and proper functioning of the broader economy,” the Authority said.

All banks in Singapore will be assessed for their systemic importance annually based on several factors including their size, interconnectedness and complexity, it said.

• Banks including Citibank, Standard Chartered required to locally incorporate retail operations and subjected to higher capital requirements

Singapore Designates 7 Banks as ‘Systemically Important’


9Banking

Earnings Update: Surpass-es Estimates on Impressive Growth in Non-Interest In-come

Unity Bank Plc (“Unity” or “the Bank”), recently released its au-dited FY:2014 and unaudited Q1:2015 results on March 19, 2015 and April 9, 2015 respectively on the floor of the Nigerian Stock Exchange (NSE).

The results show strong and im-pressive growth in both top and bot-tom line. We present the highlights of the FY: 2014 and Q1:2015 results as well as our post capital reconstruction FY:2015 forecast below.

Gross Earnings up 23.0% and 10.3% Y-o-Y in FY: 2014 and Q1:2015

The Bank’s topline grew 23.0% Y-o-Y from N62.8bn (+17.7% higher than our N65.7bn FY:2014 estimates) in FY:2013 to N77.3bn in FY:2014 defy-ing the odds that pervaded the sector.

In the same line, Unity sustained its positive form in Q1:2015, with a 10.3% Y-o-Y topline growth (N15.0bn in Q1:2014 to N16.5bn Q1:2015). The telling gross earnings growth in FY:2014 was achieved on the back of a strong expansion in non-interest in-come (+38.4%) and interest income (+19.9%), bolstered by 16.2% Y-o-Y up-surge in loans and advances.

However, the gross earnings’ growth recorded in Q1:2015 is prin-cipally due to the 127.8% Y-o-Y spike in non-interest income as interest income dropped 8.3% Y-o-Y. Similar-ly, the Bank returned to profitability (N10.7bn in FY:2014) as against a loss (-N22.6bn) in FY:2013. Sustaining the positive momentum, the Bank posted a 35.7% Y-o-Y growth in PAT to N3.6bn in Q1:2015 from N2.7bn in Q1:2014.

That said, the trailing EPS settled at N1.00 in Q1:2015 (Post capital recon-struction). A further review shows the ROAE and ROAA settled at 20.5% and 2.6% respectively in FY:2014 from neg-ative positions in the previous year. However, in Q1:2015, the annualised ROAE and ROAA moderated to 14.9% and 2.8% respectively.

Improved Efficiency as CIR down to

62.7% in Q1:2015Unity’s Cost to Income Ratio (CIR)

improved significantly over the pe-riod to settle at 62.7% in Q1:2015 from 69.1% in FY:2014 and 271.1% in FY:2013. The consistent improvement may be attributed to the significant growth recorded in both interest and non-interest income in FY:2014.

Despite the stiff competition for de-posits in the banking space, the Bank’s Cost of Funds declined to 5.9% in FY:2014 from 7.7% in FY:2013 howev-er grew marginally to 6.1% in Q1:2015. Consequently, Unity’s Net Interest margin (NIM) improved from 13.0% in FY: 2013 to13.4% in FY:2014 and 13.5% in Q1:2015.

Risk Assets Grew 16.2% in FY:2014; 4.3% in Q1:2015

In a bid to stay above waters, the Bank grew its risk assets by 16.2%

Y-o-Y from N202.6bn in FY: 2013 to N235.5bn in FY: 2014. In line with oth-er banks in Q1:2015, the Bank grew its loan book marginally by 4.3% from N219.3bn in FY:2014 to N228.8bn in Q1:2015.

Surprisingly, the Bank’s impairment charges reduced 30.5% Y-o-Y, from N21.6bn in FY:2013 to N15.0bn in FY:2014 on the back of write backs. As a result, the Bank’s Cost of Risk mod-erated to 6.4% in FY:2014 from 10.7% in FY:2013.

However, in Q1:2015, impairment charges increased 12.8% to N0.3bn as Cost of Risk inched up slightly to 6.7%. Loan to Deposit ratio grew significant-ly from 66.8% in FY:2013 to 85.0% in FY:2014, higher than the 80.0% statu-tory requirement. This limits Unity’s ability to take advantage of lending opportunities in 2015 except signif-icant capital (Tier-1 & Tier-2) and de-posits are mobilised.

“SELL” rating despite Reconstruc-tion of Share Capital

The new management of Unity has made substantial improvements to the Bank in the last year as observed in the consistent Q-o-Q growth in both top and bottom line. In addition, the unre-lenting efforts of the management to recover its non-performing loans and improve its risk management process on fresh loans have been yielding pos-itive results.

Against this backdrop, we have projected an 11.0% growth in gross

earnings to N86.1bn in FY:2015, to be boosted by impressive growth in non-interest income. We forecast a conservative growth of 12.8% in loans and advances on the back of increased retail lending to bolster interest in-come.

That said, we forecast a 26.3% growth in PAT to N13.5bn, translating to an EPS of N0.28 in FY:2015. Follow-ing a recent share reconstruction of one (1) new share for every ten (10) shares, Unity’s shares outstanding re-duced to 11.7bn from 116.9bn, hence trailing EPS jumped 989.2% (N1.00 per share as Q1:2015 vs. N0.09 per share in FY:2014).

We expect the Bank’s ability to pay dividend to shareholders in the com-ing years to improve given a com-pressed shares outstanding.

As a result of the reconstruction, the share price of Unity is currently at N4.52 from the previous N0.50. The Bank currently trades at a P/BV and P/E of 0.7x and 4.9x relative to Tier-2 average of 0.7x and 5.2x respectively. We have applied both the relative and absolute valuations to value Unity and we arrived at a 12-month Target Price of N1.88.

Based on the current price of N4.52 as at April 28, 2015, the counter offers a downside of 58.4%, hence we have placed a SELL recommendation on the Bank.

Source: Afrinvest Research

UNITY BANK PLC: Reaping the Fruit of New Brooms

The new management of Unity has made substantial improvements to the Bank in the last year as observed in the consistent Q-o-Q growth in both top and bottom line.

Henry SemenitariMD/CEO, Unity Bank Plc


10 Insurance Pensionwww.businessjournalng.com

MD/CEO

WHY PRESTIGE IS A PREFERRED INSURER:

• The Company is managed by three experienced Indian Expatri-ates and run by well experienced Ni-gerian Team of 76 employees.

• The Company is blended with Indian and Nigerian Insurance market experience.

• Prompt claims settlement • Customer friendly relations

WHY INDIAN EXPERIENCE IS OF USE?

• Indian Market size of Non-Life Insurance Premium is INR: 700 Billion ($12 Billion)

• New India’s contribution is

around 16% ($2.33 Billion) • We have various channels

for business procurement • We have Network of office

up to the tire 7 in nook and corner of the Country.

• We have different other lines of business such as Health In-surance, Bancassurance, Agricultural Insurance in a big way.

PRESTIGE STRENGTHS:• Is equipped with an IT plat-

form called GIBS and is Web based • Three ways of communica-

tion by personal contact, email and SMS is activated now.

• Portal services available for major business partners to provide effective services

• Automatic online upload of Motor and Marine Certificates to NIID

• Claims are being attended on Specified Time Lines

OUR FOCUS ON:• Product innovation• Technology• Customer service• Intermediaries

OUR PROPOSAL:• Quotes will be attended on

time • We provide competitive

Rates in line with the Risk and Market • Our Marketers will patro-

nise you and our Management Team will be in touch with you.

• Renewal Reminder shall be by three way communication

• Prompt settlement of Claims

Vision‘ To be the most respected, trust-

ed and preferred non-life insurer in Nigeria’

Our Charter‘Highest priority to customer

needs, Courtesy and caring occupies pride

place in our work culture.Our ‘commitments’ are to ‘act cour-

tesy, fairly and reasonably in all our dealings with the customers’

Insurance Market: The Indian Expe-rience

Prestige Assurance Plc: 60 Years of Prestigious Service

Dr. Balla SwamyMD/CEO


11Insurance Pension

In order to arrive at an overall assessment of the digital risks of large companies followed by the effective minimisation of these risks, Munich Re has

concluded a partnership agreement with Hewlett-Packard, the American technology company.

The two companies have joined forces to offer a combination of risk assessment, defensive measures and insurance cover to provide the most comprehensive possible protection against cyber risks.

Munich. Cyber crime costs German companies an average of USD 8.1 mil-lion per year; in the USA the annual cost per company is as high as USD 12.7 million.

If the best possible protection is to be achieved, both the technical and organisational security arrangements and the insurance cover must be customised and coordinated to suit the particular situation.

It is only in this way that compa-nies can protect themselves effective-ly against cyber risks and their con-sequences. Munich Re is therefore working with Hewlett-Packard and other selected technology partners so that it is in a position to under-stand and assess the specific digital risks of major companies as precisely as possible.

Major industrial clients gain mul-tiple benefits from this new collab-oration with Hewlett-Packard (HP): “By having an outstanding partner for information security we can offer our clients much, much more than just

insurance” explained Nils Diekmann, Underwriter for Cyber Risks at Mu-nich Re.

“Optimal protection for our clients requires the right balance of IT secu-rity measures and a cyber insurance solution.”

HP’s principle contribution is its technical and organisational exper-tise in risk identification, measures for risk minimisation and forensic investigation in the event of a claim. Munich Re’s principle strength is its ability to assess digital risks from an underwriting point of view, to devel-op a customised insurance solution and to provide the client with rapid support in its recovery after a claim.

The insurance solution is based on a modular approach and affords not only financial support for the compa-ny’s own losses or third party losses after data theft. The very detailed analysis also enables Munich Re to offer clients insurance cover, for example against lost sales resulting from reputational loss, business interruption or contractual penalties.

Jürgen Seiter, Regional Sales Director of HP Enterprise Security Services, also sees the collaboration as a win-win partnership:

“The modular approach of Munich Re is an ideal fit with our security ser-vices which create an individualised map of the specific risk profile of our customers. By using the combination of our services and Munich Re’s in-surance cover, our customers achieve the greatest possible protection against cyber risks.”

Munich Re, HP Co-operate on Cyber Security

Swiss Re reported a strong Group net in-come of USD 1.4 billion for the first quarter of 2015.

Property & Casualty Reinsurance again led

the positive contributions from all Business Units. Life & Health Rein-surance net income increased to USD 277 million and the segment is on track to meet its return on equity target for the year.

Corporate Solutions continued to generate profitable growth with

a net income of USD 167 million. Admin Re delivered excellent net income growth and gross cash gen-eration in line with expectations. Despite the on-going challenges from further declining interest rates and market uncertainty, Swiss Re delivered a strong return on invest-ments of 3.9%. Swiss Re is on track to reach its 2011-2015 financial targets by the end of this year.

Michel M. Liès, Swiss Re’s Group Chief Executive Officer, says:

“The current market and interest rate environment continues to be

very challenging. For that reason, I am all the more pleased to say that we have been able to further grow our business profitably and achieve strong results thanks to our client-centred, differentiated approach and diversified business model. In addition, the result shows our ability to manage our risk portfolios to better mitigate challenges and seize market oppor-tunities.”

Swiss Re’s Group net income of USD 1.4 billion in the first quar-ter of 2015 was 17% higher than

the USD 1.2 billion reported for Q1 2014. Premiums earned and fee income of USD 7.6 billion for the Group was in line with the prior-year quarter. Measured at constant foreign exchange rates, premiums earned and fee income increased by 7%.

The investment result was strong at USD 1.1 billion (vs USD 1.1 billion in Q1 2014). The annualised return on investments increased to 3.9% in the first quarter of 2015 (vs 3.7%).

The Group’s Swiss Solvency Test (SST) ratio was 223% as reflected

in the submission to FINMA at the end of April 2015, reaffirming the Group’s very strong capital position.

David Cole, Swiss Re’s Group Chief Financial Officer, says:

“The first quarter has seen all Business Units deliver a very good start to the year. We’re especial-ly pleased that our Life & Health business is on track to meet our profitability target. We’ve also been able to achieve a strong investment result despite ongoing low interest rates amid an environment of finan-cial repression.”

Swiss Re Reports $1.4bn Income in Qtr1 2015


12www.businessjournalng.com

Energy

Africa’s Short-term Priority: Tackle Shock of Lower Oil PricesM

anaging the impact of sharply lower oil prices is sub-Saharan Africa’s short-term policy priority, IMF

African Department Director, Antoi-nette Sayeh said.

She told a news conference during the 2015 IMF–World Bank Spring Meetings in Washington D.C. that the sub-continent is set to remain one of the world’s fastest-growing regions this year.

But although the economic outlook continues to be favourable, growth would this year likely settle in the lower end of the range of the past few years, Sayeh stated, mainly reflecting the impact of the sharp decline in oil prices on the region’s oil exporting economies such as Nigeria and Ango-la.

Sayeh said sub-Saharan Africa is set to post another year of solid per-formance in 2015, and an expected growth rate of 4 ½ percent this year would leave the region’s growth performance second only to that of emerging and developing Asia.

“That said, the economic expan-sion this year will be at the lower end of the range experienced in the recent years. This mainly reflects the impact of the sharp decline of the oil and commodity prices that we have witnessed over the last six months,” Sayeh stated.

Hard-hit Oil ExportersThe oil shock would have very dif-

ferentiated effects on sub-Saharan Africa’s diverse economies, she said. Oil exporters would be hard hit and, with generally limited room for ma-neuver on budgets, significant fiscal adjustment would dent their growth outlook.

Oil importers, conversely, stand to benefit from lower oil prices, although gains would be partly offset by lower prices for their non-oil commodity ex-ports. But infrastructure investment and strong consumption would likely support growth there—particularly in low-income countries.

Another, more domestically in-duced problem area for the region is the Ebola outbreak that has affected Guinea, Liberia, and Sierra Leone. While slowly abating, the disease con-tinues to exact a heavy economic and social toll in those countries.

In addition, security-related risks have recently come to the forefront, including in the Sahel and Kenya. “Be-yond the unbearable humanitarian costs they have on societies, these incidents, if they were to escalate, would also pose serious fiscal risks and further deter domestic and for-eign investors,” Sayeh said.

Rapid ReversalExternally, global financial condi-

tions could tighten as U.S. monetary policy normalisation proceeds. The large fiscal and current account defi-cits in some sub-Saharan African coun-tries could leave them vulnerable to a

rapid reversal in market sentiment and to a cut in external financing.

The uneven global recovery could also disappoint, notably in Europe and China—which are sub-Saharan Africa’s main trade partners.

In the short run, dealing with the oil shock will be the region’s policy pri-

ority, Sayeh declared. Fiscal spending cuts among oil exporters should focus on non-priority recurrent spending, although cuts in public investment would also be unavoidable.

“The drop in oil prices also provides a unique opportunity to advance polit-ically difficult energy subsidy reforms across the region,” Sayeh observed. The fall in commodity prices was also a reminder to advance economic di-versification.

Tremendous Opportunity for Long-term Growth

Beyond the immediate challenges, long-term growth prospects remain very favorable for the region. But the current commodity price shock is a powerful reminder of the need to

make rapid progress toward econom-ic diversification.

Demographic trends are on the side of the region: by 2030 or so, the num-ber of people reaching working age in sub-Saharan Africa will exceed that of the rest of the world combined.

“This offers a tremendous oppor-

tunity for sub-Saharan Africa which, properly tapped, can be a strong en-gine for growth going forward”, Sayeh said.

Responding to reporters’ questions, Sayeh said energy subsidy reforms are politically difficult because consumers have to be convinced that whatever savings arise from cutting subsidies will be put to good use.

Show Examples“We certainly encourage our mem-

ber countries to make sure that they communicate clearly to their popula-tions about what they intend to do with the gains from subsidy reduc-tion, and to actually show some ex-amples of how they might use those resources, to convince people that it is worth going down that path,” Sayeh said.

Asked about policies to offset the impact of electricity shortages in sub-Saharan Africa, Sayeh noted that power outages are affecting both low-income and emerging market economies in the region. Sayeh urged governments to make space in their budget for these and other essential development expenditures, both by boosting revenue mobilisation and improving the efficiency of spending.

Sayeh also cited the use of pub-lic-private partnerships to free up infrastructure financing and to intro-duce private sector innovations that can improve performance. Such part-nerships have risks that would also need to be properly managed in a reg-ulatory framework that takes account of those risks, and in which procure-ment practices maximise returns for the public sector.

Other policy options could include power utilities generating more of their own revenue. Sayeh noted that several countries in the subcontinent have public sector power utilities that are not permitted to recover their costs through tariffs.

Sayeh said electricity tariff reforms would be an important part of a pack-age of energy sector reforms that countries can take forward to provide more electricity.

Debt LimitsAsked to identify a tipping point

between ramping up infrastructure investment and possibly eroding debt sustainability, Sayeh cautioned that the bond financing tapped by some coun-tries in the region in recent years might become more costly as the United States normalises its monetary policy.

Sayeh noted that the IMF has been working on revisions to its debt limits policy, partly in light of countries’ need to make more room for borrowing to finance infrastructure, while at the same safeguarding borrowers’ debt sustainability.


13Energy

Maria van der Hoeven

The plunge in oil prices may be good for consumers and the global economy, but it could also encourage greater use of fossil fuels and thereby hurt efforts to

make our planet’s energy system more sustainable. Policy makers from around the world -- many of whom are meeting this week at UN climate talks in Lima -- can prevent this by taking advantage of cheaper oil to make meaningful chang-es in the way we price energy. But this moment will not last forever: the time to act is now.

Today’s bear market in oil is merely reflecting the changes in supply and demand that were set loose by the bull market of the last several years.

The more than 50 percent increase in U.S. oil production in recent years re-sulted at least in part from high prices. Similarly, prices played a key role in ef-forts to make cars and trucks consume less fuel, which has translated into low-er oil demand growth worldwide.

As supply has outpaced demand, oil prices have fallen nearly 40 percent from their June peaks. Some observers are likening this era to the bear market in oil that began in the mid-1980s.

Back then, policy makers in certain countries could have taken advantage of the plunge in oil prices to tighten vehicle fuel-efficiency standards, which would have protected motorists from the inevitable run-up in prices.

But instead they generally took a laissez-faire approach, and consumers

flocked to larger, thirstier vehicles. When oil prices began rising, owners of those vehicles paid dearly at the pump.

What a difference a protracted spell of high prices makes. Formerly a lag-gard, the United States raised fuel ef-ficiency standards for new light-duty vehicles by more than 14 percent be-tween 2008 and 2013; standards will be tightened further in the years to come, reducing U.S. dependence on oil by 2 million barrels a day by 2025, according to the U.S. government.

This will improve U.S. energy secu-rity and curb emissions of the green-house gases that are causing the plan-et to warm. And if past experience

offers any lessons, now is not the time to ease up -- especially given the press-ing need to transform our planet’s en-ergy system.

With its heavy reliance on fossil fu-els, the current system is on course to deliver at least a 4-degree Celsius increase in global temperatures if no changes are made. It is no secret that we need radical action, but efforts thus far have been sluggish at best. In the International Energy Agency’s annual assessment of efforts to trans-form the energy system, renewables represent the only bright spot in an otherwise-bleak picture of clean-ener-gy progress.

But now there is a ray of hope: with the drop in oil prices delivering a shot of economic stimulus to consumers around the world, policy makers have leeway to take actions that even a year ago would have been unthinkable.

It all depends on national circum-stances, of course, but two areas spring to mind. The first is eliminating subsidies to fossil-fuel consumption. In 2013, governments around the world spent $550 billion on these sub-sidies, which encourage waste.

Reforming such subsidy schemes is difficult, as the short-term costs im-posed on certain groups of society can be burdensome and induce political

opposition. But such opposition may well be muted now, in the current cli-mate of lower oil prices, than it would have been a year ago.

By the same token, policy makers in major energy consuming countries should take advantage of the oil mar-ket’s collapse to introduce carbon pric-ing, taxes or low-carbon mandates, or to strengthen existing schemes.

Such actions would encourage more efficient use of energy, would boost the economic case for carbon cap-ture and storage, and would promote low-carbon energy sources such as re-newables and nuclear power.

Moreover, higher taxes on transport fuels would help finance clean energy research, development and deploy-ment. If such schemes are designed properly, and put in place in an envi-ronment of lower energy prices, eco-nomic discomfort can be minimised. Indeed, many studies suggest they can yield a net economic benefit.

The worst course of action would be complacency in the face of low oil pric-es. We saw this 30 years ago, but back then the prospect of climate change barely registered as a policy concern.

Today, we know otherwise: policy makers must keep a long-term per-spective. They have a once-in-a-gener-ation chance to get us back on track. Let’s hope they seize this moment.

--Maria van der Hoeven is Executive

Director of the International Energy Agency (IEA), an autonomous organi-sation which works to ensure reliable, affordable and clean energy for its 29 member countries and beyond.

Cheap Oil’s Make-Or-Break Moment for Clean Energy

Improving Economic Outlook Lifts Demand Growth Forecast; Supply Increases on OPEC Surge

The IEA Oil Market Report for April raised its forecast of 2015 global oil demand by 90

000 barrels per day (90 kb/d) to 93.6 million barrels per day (mb/d), a gain of 1.1mb/d on the year, informing subscribers that the notable acceler-ation from 2014’s 0.7mb/d growth builds on cold first-quarter tempera-tures and a steadily improving global economic backdrop.

Global supply rose by an estimated 1mb/d during March, to 95.2mb/d, as OPEC production recorded its highest monthly increase in nearly four years. Year-on-year gains totalling a whop-ping 3.5mb/d were split between OPEC and non-OPEC production.

OPEC crude oil output soared by 890 kb/d in March, to 31.02mb/d, on sharply higher Saudi Arabian, Iraqi and Libyan supplies.

The OMR “call on OPEC crude and stock change” was revised marginally higher for the current quarter, to 30.35mb/d, above the group’s official production ceiling, but left un-changed for full 2015 from the March Report, at 29.5mb/d.

OECD industry stocks slipped by 1.7mb in February, despite a massive 36.4mb build in crude oil stocks.

Preliminary data show OECD invento-ries up a counter-seasonal 29.2mb in March, as US crude holdings extend-ed recent builds and refined products defied seasonal trends.

Global refinery crude demand is ex-pected to fall seasonally to 77.3mb/d in the current quarter, from 78mb/d

in the first quarter of the year. While Atlantic Basin refiners mostly

completed turnarounds in the last quarter, Asian refinery maintenance is set to ramp up sharply this quarter, with up to 2.5mb/d of distillation capacity offline at its peak in May.

The IEA Oil Market Report for April 2015


14 Manufacturingwww.businessjournalng.com

Blessing Ikeme

In a recent interview on a radio station, Metro FM, the spokesperson for the All Progressives Congress (APC), Alhaji Lai Mohammed, assured Nigerians that the in-coming APC government will guaran-

tee at least nine hours of electricity supply in the first 6-12 months of the Muhammadu Buhari administration.

According to Mohammed, the APC government will prioritise power sup-ply, which it has identified as pivotal to a robust economic transformation.

However, considering that such promises of regular power supply by successive administrations have been made in the past and repeatedly un-fulfilled, this latest assurance counts for little with Nigerians.

To be sure, Nigerians will definitely love to have regular power supply as that will astronomically transform the country’s economy, but they are wary of promises. They would prefer the government dispense with promises and just get right to work and make it happen.

The promise by the party’s spokes-person underlines how important the issue of power supply is to our national life. Indeed, as Nigerians set an agenda of immediate issues to tackle for the in-coming government, power generation features as number one on everybody’s list.

Experts say the administration needs to fully appreciate the chal-lenges bedeviling the sector if it must succeed where others have failed.

The first step to tackling the power supply challenge, stakeholders say, is to complete the power sector reforms started by the out-going government of President Goodluck Jonathan. The industry experts called for the review of the reforms in such a way as to identify lapses that could immediately be corrected. They argue that the objective for the privatisation of the power sector has not been met, which explains why the economy is still struggling to gen-erate 4,000MW of power almost two years after the privatisation exercise.

The out-going government had projected that by 2014, the country would be generating over 10,000MW of power from the privatised power sector. Unfortunately, the reality on ground, four months after the 2014 deadline, is discouraging.

According to recently released figures by the Federal Ministry of Power, as of April 12, 2015, the country’s peak generation was 3,263.6MW, while the energy sent out was 2,988.72MW.

Prof. Charles Ofoegbu, former Head of Exploration, Nigerian Nation-al Petroleum Corporation (NNNPC), said it is an irony that today, the country has generating power plants and yet power generation keeps dropping.

“The privatisation of the power sector needs to be reviewed. The in-coming government needs to do this before it can get the issue of power supply right. We keep inau-

gurating power generating plants, but I had warned in the past that power supply would keep diminish-ing and we have discovered that we are not making progress but rather retrogressing in the sector. This is beginning to happen because we are getting shorter hours of power supply whereas we are inaugurating many distribution and generation firms,” Ofoegbu said.

Ofoegbu is of the view that the power situation has remained poor despite the best efforts of the Jonathan administration because an adequate gas master plan was not implemented to complement the privatisation of power assets.

“The reason for this is because we did not implement an adequate gas master plan. It has not been fully implemented and you are beginning to put in place generating points on a master plan that is not implemented. We don’t have adequate gas supply. There are some power stations that we have in this country that don’t have pipes that take gas to them.”

Indeed, the issue of gas supply for power generation continues to be a key area neglected in the power supply equation. Inadequate supply of gas for power generation is a major problem to achieving the de-sired megawatt target. Often, we are told that sabotage of gas pipelines constitute a major supply obstacle. The Buhari administration must find a way to address this.

Chairman of Transcorp Group which operates the Transcorp Ughelli Power Limited, a power generat-ing company, Tony Elumelu, said gas availability remains the second biggest challenge to adequate power supply.

According to him, “many plants in the country can produce more than

they currently do, but limited avail-ability �of gas makes it difficult to produce according to the companies’ individual �capacities.”

Commentators have identified the need to unbundle the Transmission Company of Nigeria (TCN) for the privatisation exercise to make any sense.

They argue that the usual ineffi-ciency that characterises government institutions will not allow it function efficiently. And considering that it is the final piece of the power supply puzzle, it would be counter-produc-tive for the government to continue to hold on to it.

Elumelu had at a power industry conference last year called for the privatisation of the TCN, because, according to him, it is “grossly inefficient” because of the out-dated transmission systems in use. Elumelu said for every 100MW of power gen-erated and sent to �the transmission company, 40 percent is lost.

The Chief Executive Officer, Nigeri-

an Electricity Regulatory Commission (NERC), Dr. Sam Amadi, agreed that there is need to review the power sector reforms to improve the pro-cess and the industry.

“A government that comes into power has a responsibility of making policies. It can change policies, improve existing ones or can more vigorously pursue existing policies. So, through due process, the National Electric Power Policy, which also led to privatisation, can be reviewed by the in-coming government to meet certain demands and improve the industry.”

Analysts believe once the power sector is decisively addressed to en-sure regular power supply, the much talked-about industrial revolution will become a reality. They point to the fact that industrial growth can only occur if the necessary infrastructure, such as regular power supply, has been put in place.

The need for electricity, whether for personal or industrial use, is para-

mount for the growth of a nation. Many industries have died and

many continue to hemorrhage from high costs due to huge overheads on power generation.

For instance, the tyre making industry, which used to be vibrant, with many players such as Dunlop and Michelin, died from unsustain-able cost of doing business, which made their products uncompetitive compared with imported ones.

The textile industry is another sor-ry story. The industry used to be one of the highest employers of labour few years ago. Unfortunately, high overheads from cost of power gener-ation led to the collapse of hundreds of textile mills.

Today, the few remaining players continue to run at a loss. According to the erstwhile President of the Manufacturers Association of Nigeria (MAN), Chief Kola Jamodu, 40% of the production cost of manufacturers goes into the provision of electrici-ty, as against 5-10% in other similar economies.

The lack of reliable power supply and the constant blackouts cause severe economic damage. The cost of alternatives such as petrol or diesel generation is at least six times the cost of a reliable power supply. This affects productivity, efficiency and ultimately growth.

A regular power supply will impact both the formal and informal sectors of the economy and kick-start the industrial growth. The modern world is dependent on access to informa-tion, which in turn is only possible with a reliable and constant source of electricity.

Many cottage industries that can drive economic growth will need regular power supply to survive. For instance, shoemaking, furniture making, printing presses, and clothe making are some of the businesses that will benefit hugely from regular power supply.

A report in The Guardian newspa-per of UK by Adam Smith argued that “the reliable provision of affordable electricity has the potential to tackle both the symptoms and the causes of poverty.”

Indeed, many artisans such as carpenters, welders, iron benders, etc, who have had to abandon their trade for commercial motorcycle (Okada) business, will easily pick up their trade.

The army of unemployed youth will be gainfully employed as overheads fall and businesses become profitable and are able to expand their oper-ations. The multiplier effect on the economy of a regular power supply is very huge and cannot be ignored.

As Nigerians await the in-coming government with high expectations, the Buhari administration will lay an indelible marker and win doubters over if it can re-engineer the power sector and ensure regular supply of electricity.

Nigerians will certainly be waiting to get the 9-hour daily supply power in 6-12 months as promised by Lai Mohammed.

Why APC Must Tackle Power Challenge for Industrial Growth

A Power Plant

The Reign of Generators


15

We have the pleasure to invite Insurance & Reinsurance Firms in Nigeria to participate in the Special Report: Leading Insurance & Rein-surance Companies in Nigeria for the 42nd AIO Conference and General Assembly slated for May 24-27, 2015 in Tunis, Tunisia.

The AIO is the largest gathering of insurance regulators, professionals, investors and financial media from Af-rica, Asia, Europe and North America.

THEME“African Insurance in the Face of

Mass Events” The Conference and General As-

sembly will be jointly hosted by the Fédération Tunisiennes des Sociétés d’Assurances (FTUSA) and Société Tu-nisienne de Réassurance (TUNIS RE).

Welcome Address by President of the Local Organising Committee

The Tunisian Federation of Insurance Companies “FTU-SA” and Tunisian Reinsurance Company “TUNIS RE” are honored to host the 42nd AIO Conference and General Assem-bly from 24th to 27th May in Gammarth, Tunisia.

The conference will be organ-ised under the auspices of the African Insurance Organisa-tion “AIO”.

This conference presents a good opportunity for a valu-able exchange of ideas and experiences in order to support

business exchange between the different partners of our indus-try.

On behalf of all members of the Organising Committee, we would like to welcome you to Gammarth.

Wishing you a pleasant stay in Tunisia!

Mrs. Lamia Ben MahmoudPresident of the Local Com-

mittee Chairman of the Tunisian Rein-

surance Company “TUNIS RE”

Objectives of Special ReportThe objectives of the Special Report include:

• Showcase Leading Insur-ance & Reinsurance Firms in Ni-

geria to International Audience• Opportunity for Firms to

Market Services to Global Mar-ket

• Enhance Corporate & Brand Image of Participating Firms among Global Operators

• Opportunity for Profes-sional Networking & Business Engagement

• Opportunity to Attract Foreign Investment/Players into the Nigerian Market

Requirements for Participation

• Corporate Profile• Current Annual Report

(quoted companies)• Corporate Photograph of

MD/CEO• Advert Support

DEADLINE: Monday, May 11, 2015.

For further enquiries and participation, pls call 08023088874, 07058919138 or email [email protected].

Special Report

The 42nd AIO Conference & General Assembly 2015

TUNISIA 2015

Lamia Ben MahmoudChairperson, 42nd AIO Organising Committ ee

Special Report on Leading Insurance & Reinsurance Companies in Nigeria


16 Manufacturing

Blessing Ikeme

The Minister of Industry, Trade and Investment, Mr. Olusegun Aganga, has said the economy can only achieve the much desired

diversification if quality infrastructure are put in place.

The minister made this observa-tion in Abuja at the opening of the new office complex of the Standards Organisation of Nigeria.

The minister lamented the unusu-ally high rejection rate of Nigerian exports in the international market and attributed the development to lack of accredited laboratories in the country where the products could be tested before being shipped abroad.

“We all say we want to diversify the economy with a view to in-creasing our income from non-oil products. But there is no way we can achieve this without having quality infrastructure such as the laboratory, Aganga said.

He said within the last five years, over 103 Nigerian products exported to other countries were rejected for not meeting acceptable international quality standards. Aganga said the high volume of rejected products was not acceptable. He said when compared with other countries like South Africa with only about six rejects or Ghana with seven rejects, the country’s high number of rejects does not augur well for the econo-my.

The minister, however, said that

with the reforms that had been carried out by the current admin-

istration within the last four years, Nigeria now has an internationally

accredited laboratory in Lagos which would help to check the drift.

“For instance, we could not export yam to the United Kingdom because we do not have a laboratory to test it here. Those who export products in Nigeria take them to Ghana to test them and the credit goes to Ghana. If you compare the 103 Nigerian products rejected to that of other Af-rican countries like South African and Ghana, who only have between six to seven rejects, ours is unacceptable.”

He explained that hopefully, since the laboratory in Lagos meet interna-tional standard, any product tested there would be acceptable anywhere outside the country, thus saving the huge revenue being lost by manufac-turers and the country.

Only Quality Infrastructure Will Help Diversify Economy-Aganga

The Managing Director, Bank of Industry (BOI), Mr. Rasheed Olaoluwa, has stated that the

bank will soon reduce its non-performing loans (NPL) portfolio to below the global benchmark of 3%.

Olaoluwa revealed this at a recent induction of 10 Nigerian companies into the Hall of Fame,an initiative introduced in October 2014 to reward customers of the bank who did not default on loans given to them by the bank. The Hall of Shame was also established to punish loan defaulters.

At the induction, Olaoluwa announced that 24 compa-nies were blacklisted for failing to repay their loans. The bank also threatened to publish the names of direc-tors of the defaulting compa-nies on its website to serve as a warning to members of the public and other financial institutions.

The Bank of Industry said it recovered N1.3 billion in non-performing loans in the last quarter of 2014 after the establishment of the Hall of Fame and Hall of Shame for customers.

The Chief Risk Officer, BOI, Dr. Ezekiel Oseni, said the programme had hastened the pace of recovery of non-per-forming loans by the bank. He said between October and December when the programme was initiated by the bank, the total amount recovered from non-per-forming loans stood at N1.3 billion. He added that the rate of recovery of NPL by the bank had been generally impressive.

He said: “As of December 31, 2013, our NPL ratio was 12.98 per cent. By the end of December 2014, the ratio improved to 5.81 per cent.At the end of March, 2015, the non-performing loan ratio came down to 4.09 per cent.”

Oseni said the total amount of non-performing

loans recovered by the bank between January and March 2015 was N403 million.

“Our target is that our non-performing loan ratio should not go beyond three per cent in accordance with global best practices,” he stated. He attributed the improvement in the NPL ratio to a lot of measures put in place by the bank to check-mateloopholes associated with lending.

Oseni said: “First, we started the implementation of the enterprise-wide risk management framework which brought up some other departments within the division. Then the staffing was improved.We have more experienced staff. Almost every employee has gone through risk management trainings.Where we do not have the capacity for some of the trainings, the manage-ment engages or collaborates with organisations that can provide that capacity.”

BOI Recovered N1.3bn NPL in 4th Qtr 2014, Target Below 3%

Rasheed OlaoluwaMD/CEO, Bank of Industry


18Travel Tourismwww.businessjournalng.com

The difficulties experi-enced by aviation in-dustry‘s players in the crisis period have cer-tainly affected speed of overall industry development. New efficient engines, 3D

printing, Google Glass, iPads on board and many other stuff is affecting the way we fly - the struggle for survival have launched a whole bunch of new technologies, a process which is not likely to stop in the nearest future.

Now almost no one doubts the fact that the aviation industry is on the verge of a new round of evolution. As the industry continues on its rapid growth path, AeroTime is delighted to guide our readers through top 10 most several fundamental challenges that will probably shape industry‘s fu-ture.

1. The Game of DronesDo not be surprised when once you

will hear massive buzzing around. No, these are not a swarm of mosquitoes – these are the drones.

In his lab at Pennsylvania, Vijay Ku-mar and his team build flying quadro-tors - small, agile robots that swarm, sense each other, and form ad hoc teams — for construction, survey-ing disasters and far more. The re-searchers at General Robotics, Auto-mation, Sensing, and Perception Lab (GRASP) are developing “swarms” of unmanned aerial vehicles (UAVs) that work in a team.

Some of these unmanned aerial ve-hicles (UAVs) are capable of flying their entire mission without any human in-teraction at all except possibly for the landing where a person intervenes using remote control. These devic-es take hundreds of measurements each second, working cooperatively toward particular mission. Kumar says that the convergence of computation, communication, and consumers has a huge potential for the industry.

While a single drone has limited battery life, a swarm could overcome this limitation. The robots would be ideal for future work in search and rescue, first response, and law en-forcement fields.

2. The Big Bang DataHow does the vast quantity of data

collected from each aircraft get inte-grated with that from other aircraft and satellites? How will it be stream-lined and delivered to allow for effec-tive decision-making? With 35 million flight departures per year, data is crit-ically important for any planning de-cision made by airlines and airports.

Sponsored by the Defense Ad-vanced Research Projects Agency (DARPA) and funded by $25 million annually for four years, XDATA is a re-search effort to develop new compu-tational techniques and open-source software tools for processing and ana-lyzing big data, motivated by defense needs, but applicable across many government agencies and other civil-ian purposes without depending on the satellite-based Global Positioning System.

Brining a revolutionary approach, big data would reduce deviations for

airlines and airport operations, com-pose taxi times from one side of the pier to another, reducing the likeli-hood of ramp conflicts or numerous delays. By combining these key ele-ments of data management, MRO op-erations can be greatly economised as well.

3. The Walking UndeadImagine ejecting from aircraft with-

out a parachute – sounds like some-thing from a Die Hard or a superhero movie, does not it? Yet, this could be the future of pilots, made possible by hi-tech exoskeletons. These babies have polymer gel muscles five times stronger than natural ones, so you could literally buy clothing that gives you superhuman strength.

How about that, Wolverine?Lockheed Martin has received a

contract through the National Center for Manufacturing Sciences (NCMS) to evaluate and test two FORTIS exoskel-etons. This marks the first procure-ment of Lockheed Martin’s exoskele-tons for industrial use.

The FORTIS exoskeleton is an un-powered, lightweight exoskeleton that increases an operator’s strength and endurance by transferring the weight of heavy loads from the user’s body directly to the ground. The ben-efit of this newfound strength (aside from feeling like a superhero) is that it enables workers to go for long peri-ods without needing a break.

The suit minimises muscle fatigue, which increases productivity – could be much of use both for engineers, maintenance, rescue, military use and more.

4. SupernaturalDo you remember about the aug-

mented reality in the Matrix or In-ception? Seems like augmented real-ity is the next big step in safety and information for pilots. Mainstream flight simulation developers have discovered some fantastic methods of circumventing or enhancing basic limitations, bringing a super-duper natural and realistic experience in pi-lots training.

From Google Glass to Garmin’s new D2 pilot watch, we’re beginning to get

a preview of the trend toward wear-able electronics that very well could transform the whole experience of how we fly in the future. Some pilots have already started testing next step after Google Glass, a miniaturized computer in a pair of eyeglasses, for a number of flight-related functions, in-cluding completing electronic check-lists, viewing charts and maps, and calling up weather information.

Traffic display will be more realistic and show other aircraft in a super nat-ural framework rather than as target diamonds on a panel display or tablet computer screen.

5. The Breaking Bad FuelTechnological advances in elec-

tric-powered flight today will not only make the act of flying cheaper. Crucially, they also promise to revo-lutionise how the aeronautics indus-try impacts the global environment. Today, Boeing’s 747 use five gallons of fuel every mile. This means that about 36,000 gallons of fuel are being burned during a 10-hour flight.

Companies such as Safran S.A., Boeing, Airbus, and Raytheon have already revealed plans to re-conceptu-alise the modern airplane. At Boeing, engineers have created the SUGAR Volt concept plane which combines electricity and fuel to power flight, much like a hybrid automobile does.

Airbus recently unveiled a bat-tery-powered aircraft called an E-Fan, which the company is hoping to sell in the recreational market by 2017, and eventually create commuter planes within 20 years. There is a lot at stake in the race to innovate: the electric aircraft market is projected to reach over $22 billion in the next fifteen years.

6. The Scanner DiariesBeware-one day airport security

will actually see what you are thinking about!

The Neurocam being developed by the Tokyo-based team constantly scans your brain waves and records 5-second animated GIF.

Those clips are date- and loca-tion-stamped, and stored in a video diaries for subsequent review. In its

current prototype form, the neurocam uses an integrated smartphone as its brains, storage medium, and camera.

In the future, the project team aims to create an emotional interface, which could link a range of devices and services to people’s individual thoughts and feelings, creating un-limited potential not only for airports surveillance.

7. The Lord of the HelmetsIt appears that soldiers using An-

droid and Windows systems during missions is a thing we’ll see in a not-so-distant future. The Raytheon Com-pany has developed a wearable device and display to help pilots navigate and see where their foes are even after they leave the cockpit.

Raytheon’s new ‘Aviation Warrior’ system is helping to make pilots all-knowing and all-seeing, with state-of-the-art situational awareness tech-nology that can be worn by the pilot. The Aviation Warrior system consists of a wearable, centralized data pro-cessing computer that provides maps, sensor imagery, video and messaging data from multiple military networks.

The device is integrated with a survival radio and GPS. The data processing computer couples with a razor-thin, wearable display that controls all solider-worn equipment and aircraft systems. While inside the cockpit, the system communicates with a helmet that features hostile fire indicators, 3D audio and the ability to show critical flight information in a heads up display.

8. Fast and Furious: Mach 2A 4 hour hypersonic plane trip from

Sydney to London, the stuff of science fiction, is about to take a step closer. Hyper airliners have been the objects of numerous recent and ongoing de-sign studies.

JAXA, Japan’s national aerospace agency, proposed its long-term vision JAXA2025 to develop a jet that can carry 300 passengers at Mach 2 speed and cross the Pacific Ocean within two hours.

JAXA is developing the pre-cooled turbojet engine (PCTJ), which can op-erate from take-off to Mach 5 continu-

ously. The engine has already demon-strated at ground experiments and a flight experiment. The economic suc-cess of such a project is still unclear, and as a consequence the project has been met with limited interest from Japanese aerospace companies like Mitsubishi Heavy Industries so far.

9. Print Wars: Episode I – The 3D Strikes Back

Additive manufacturing is already transforming the way aircraft are done throughout the world.

Unlike traditional manufacturing methods that mill or cut away from a slab of metal to produce a part, ad-ditive manufacturing (also referred to as 3D printing) “grows” parts directly from a file using layers of fine metal powder and an electron beam or la-ser.

Distributing engines along the trail-ing edge of wings and in the rear of the fuselage can theoretically cut fuel consumption by 20 percent and decrease an aircraft’s weight. The air-craft of the future will have a “bionic” fuselage, composed of complex parts printed using additive layer manufac-turing.

10. Transformers: The Revenge of the Roads

You’ve always known it was just a matter of time before the world demanded some kind of flying ma-chine which would replace the au-tomobile.

One such novel approach is the PAL-V (personal air land vehicle), a sort of flying motorcycle conceived in Europe that converts from a road-going three-wheeler into a gy-rocopter that appears to fly as well as it drives — which is to say very well in both regards.

Where the Transition and other proposed flying cars have suffered from a lack of lateral stability in flight and mechanical complexity on the ground, the PAL-V flies as well as any gyrocopter you’re likely to see and, thanks to its ingenious suspension system, drives like one of the best three-wheel motorcy-cles to hit the streets.

The 10 Technologies Shaping Future of Aviation


19


20 Brands Marketing Advertising

www.businessjournalng.com

MTN: The 21-Nation Telecom BrandProfile and StructureLaunched in 1994, MTN Group is

a leading emerging markets mobile operator which is at the forefront of the technological changes sweeping the world.

We invest significantly in advanced communications networks, connect-ing more than 203, 8 million people in 22 countries across Africa and the Middle East. In the past five years alone, our capital expenditure has ex-ceeded R130 billion in the countries where we operate.

In pursuit of our vision to lead the delivery of a bold, new Digital World to our customers, and our mission to make our customers’ lives a whole lot brighter, we leverage the talent of our 25 424 employees to offer innovative products and a quality customer experience. We recognise the value of diversity within a group with a solid organisational culture.

Working with integrity, we value our relationships with the communi-ties in which we work, our customers and employees, our shareholders and the media, governments and regulators, as well as suppliers and business and industry partners.

We recognise the importance of these stakeholders, among others, in the sustainability of our business.

MTN Group Limited’s head office is in Johannesburg, South Africa, where the Group is listed on the exchange operated by the JSE Limited under the share code “MTN.”

MTN has operations in Afghani-stan, Benin, Botswana, Cameroon, Ivory Coast , Cyprus, Ghana, Guinea Bissau, Guinea Republic, Iran, Liberia, Nigeria, Republic of Congo (Congo Brazzaville), Rwanda, South Africa, Sudan, South Sudan, Swaziland, Syria, Uganda, Yemen and Zambia.

MTN also has ISP licenses in Namibia and Kenya and a Value Added Service licence in Ethiopia.

Vision and Strategy StrategyThe role that telecommunications

plays in people’s lives has changed

rapidly in the last decade. Not so long ago, traditional voice

services defined the telecommunica-tions industry. Now they are just one of a growing range of services that impact many areas of our lives.

The need for a broader digital offering has led MTN to refresh its

vision and mission and refine its strategic objectives.

This is to ensure that we maintain our leadership position in communi-cations in emerging markets and sus-tain a business model that maximises value for all our stakeholders.

DabengwaGroup President & Chief Executive Officer Ikpoki

CEO, MTN Nigeria


21Brands Marketing Advertising


22 Businesswww.businessjournalng.comWest Africa

China, Equatorial Guinea in $2bn Infrastructure Pact

China’s biggest lender by assets, Industrial and Commercial Bank of China, said recently it had signed an infrastructure pact worth $2 billion

with the oil-rich West African nation of Equatorial Guinea.

The agreement was signed fol-lowing a meeting in Beijing between Chinese President Xi Jinping and Equatorial Guinea President Teodor Obiang Nguema, marking the latest Chinese investment in the continent and its resources.

The deal will include providing “financial support” to Equatorial Guinea’s government as well as Chi-nese enterprises there, ICBC said in a statement.

China has sought to broaden financial support for its companies investing abroad as part of a policy drive known as “going out”.

“There are growing numbers of cooperation areas between our two countries, and the prospects are very bright,” Chinese Premier Li Keqiang told Obiang on Wednesday, accord-ing to a government statement.

The two countries should deep-en their “traditional friendship”, Li added.

ICBC called Africa the “strategic and developmental heart of ‘going out’” for firms the bank supports.

“Equatorial Guinea is a central African country that has developed relatively well,” the government said. “The government in recent years has

supported expanded investment into infrastructure development, and the need for infrastructure projects is enormous.”

Many Chinese development and aid projects have drawn condem-nation from rights groups for their support of governments with poor rights records and lack of transparen-cy, including Zimbabwe, Sudan and Angola.

China has said it will not follow the path of “Western colonists” in Africa by sacrificing countries’ long-term interests or environments.

Beijing says it follows a policy of non-interference in other countries’ domestic politics that is welcomed in Africa.

Equatorial Guinea, a tiny Sub-Saha-ran African nation, boasts the highest GDP per capita in Africa, thanks to a hydrocarbon boom. But it is also notorious for corruption and ranked 144 of 187 states on the U.N.’s 2014 Human Development Index.

A 2004 U.S. Senate probe showed millions of dollars channeled by Obi-ang and relatives into the disgraced Riggs Bank.

Obiang, in power since 1979, is Africa’s longest-serving head of state. Rights groups say he has enriched himself and his family while many of his people go hungry.

China is Africa’s biggest trade partner, and has sought to tap the continent’s rich resources to fuel its economic boom.

Critics, including some African leaders, have said Chinese projects bring little benefit to Africans, with materials and workers brought in from China.

PICTURES: (Top)Equatorial Guinea’s President Teodoro Obiang Nguema Mbasogo (L) shakes hands with Chinese Premier Li Keqiang before a meeting at the Great Hall of the People in Beijing, China, April 29, 2015.(Below) A section of African Map

An international maritime tri-bunal has ruled that Ghana can continue developing a $4.9 billion dollar offshore oil project in an area caught

up in a border dispute with Ivory Coast but must not start new drilling.

The decision is positive for the government of Ghana and for British firm Tullow, which leads a consortium developing the “TEN” field and has already drilled the wells it needs to begin production in mid-2016.

A moratorium would have denied the West African state’s government revenue it needs as it seeks to restore economic stability with the help of an International Monetary Fund aid programme.

Ivory Coast in February asked the Hamburg-based International Tribunal for the Law of the Sea (ITLOS) to issue a moratorium on oil activity by Ghana in the disputed area while legal hear-ings are held.

The decision did not judge the merits of the case and the court is ex-pected to make a final ruling in 2017. Analysts have said that precedent suggests it is unlikely to redraw the customary equidistant boundary.

“Following this ruling, the TEN Project can move ahead and we will now await instructions from the Government of Ghana with regard to implementing those provisional measures that have been ordered by ITLOS,” said Tullow spokesman, George Cazenove.

The tribunal said Ivory Coast had not provided evidence to show that continued oil development at the Tweneboa, Enyenra and Ntomme (TEN) Project would harm the marine environment.

It also accepted Ghana’s contention that the environmental impact of the project was adequately monitored and to suspend operations would, in fact, harm the environment by allow-

ing wells and other equipment to fall into disrepair.

“An order suspending all explora-tion or exploitation activities conduct-ed by or on behalf of Ghana in the disputed area, including activities in respect of which drilling has already taken place, would therefore cause prejudice to the rights claimed by Ghana,” the ruling said.

It directed all parties to take the necessary steps and to cooperate to prevent harm to the marine environ-ment in the disputed area.

Revenue from TEN is important for the government as it seeks to rebal-ance an economy whose GDP growth is expected to slow to 3.9 percent in 2015.

For years, the economy grew strongly through exports of gold, oil and cocoa but a fall in commod-ity prices and problems including a stubborn budget deficit have curbed its development.

‘Ghana Can Continue Development in $5bn Ivory Coast Oil Dispute’


23CorporateAnalysiswww.businessjournalng.com

Chris Okeke

Stockholders of Unilever Plc are betting their lives over the future of their stock fol-lowing record impressive performance in the Q1 of 2015 just announced.

Ahead of its Annual General Meeting coming up Tuesday, May 12, 2015, the company had announced a 7 and 8 per cent dip in revenue and operating mar-gins respectively for the 2014 full year against the 13.1 percent of the 2013 fi-nancial year but the trend was reversed in the Q1 2015.

But why would investors stake their in-terest in a company that has just posted a below par performance after the full 12 months of the 2014 financial year even when it is obvious the company is over geared?

The answer is in the future outlook of the conglomerate that has made tough business decisions which would evolve a Unilever that is better placed to thrive within the ever increasing volatility, un-certainty, complex and ambiguous oper-ating business environment.

The company has deliberately refo-cused on the route to market consumer needs and aspirations, product quality, capacity expansion and zero business waste.

The route to market transformation according to the company involved ra-tionalisation of trade inventories which obviously introduced one off pressure to the 2014 performance. However, in the medium to long term, Unilever is expecting an upward trend in all critical parameters.

The Board Chairman, HRH Igwe Nnae-meka Achebe in a statement to share-holders of the company pre-empts any backlash of its fundamentals and says the company would be doling out N378.3 million which amounts to 10k per share as dividend to its shareholders.

In his words: “The Board was caught between delivering shareholders expec-tation on dividends and providing the right financing platform for it to deliv-er its growth targets. It is not however clear if the decline in dividend pay-out resulted in any form of improvement in the company’s dividend yields which the ultimate is for every investor. Dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its share price.

In the absence of any capital gains, the dividend yield is the return on invest-ment for a stock. It is also a way to mea-sure how much cash flow you are getting for every Naira invested in an equity position. For instance, if two companies both paid annual dividends of N1.50 per share, but company A’s stock is trading at N10 while X’s company’s stock is trad-ing at N30, then A has a dividend yield of 15 percent while X is only yielding 5 percent.

Thus, assuming all other factors are equivalent, an investor looking to sup-plement his or her income would likely prefer A as stock over that of X because of its high yield though X has a higher stock price.

For Unilever, it is however not certain if the 10k at N43 share price it is paying

this year would be better than the yield for last year.

The company’s fundamentals looked nothing but benign in 2014, no thanks to a spike in cost of sales which account-ed for 66 percent of turnover, the com-pany’s turnover declined to N56 billion from the N60 billion recorded in the 2013 financial year.

The N5 billion decline or 7 percentage points dip was the highest in the compa-ny’s last 5 years of operation. This devel-opment resulted in a significant decrease in profitability. Gross profit was down by more than N2 billion or 10.15 per cent while operating profit was further de-pressed by 40 percent to N4.614 billion from N7.790. PBT slumped further by almost N4 billion to N2.87 billion from N6.793 billion achieved the previous year. According to the statement, PAT also declined by 49 per cent to close at N2.412billion from N4.724 billion.

The performance was not without costs as Cost of Sales went down by 5.24 per cent to N35.584 billion and account-ed for 64 per cent or N64 of every N100 of turnover when compared with the N63 of every N100 in 2013. Operation-al Cost to Income Ratio for the year was also on the rise by 92 per cent against 87 percent of previous year.

Margins- the much profit the company was able to squeeze out of every Naira of

turnover was down by 8 percent when compared with 13 percent of 2013 but current ratio was up. PAT margin also nosedived within the 12 months of 2014 to 4 percent.

But how efficient and liquid is Unile-ver? The current ratio which measures the ability of a company to pay its short term debts could be used as a gauge. The ratio is mainly used to give an idea of the company’s ability to pay back its short-term liabilities (debt and payables) with its short-term assets (cash, invento-ry, receivables).

The higher the current ratio, the more capable the company is of paying its ob-ligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point.

In the 2014 financial year, Unilever was only able to boast of 59 per cent its total liabilities. In other words, additional liquidity or gap of over 41 percent still needs to be bridged if the company were to meet up with its obligations for the period under review.

The task before the Board on May 12, 2015 is to convince its shareholders that the N12 billion short term facility which is attracting 14 percent interest will not put their investments at risk even after the restructuring and rationalisation ex-ercise.

UNILEVER PLC: Time to Adjust the Gear for Better Performance

Mr. Yaw NsarkohManaging Director/CEO, Unilever Nigeria Plc


24 ICTwww.businessjournalng.com

Ten years on from the World Summit on the In-formation Society (WSIS), the Information Society is today truly with us.

By the end of 2014, some 2.9 billion people or 40% of the global population will be online (ITU, 2014). At current growth rates, half of the world’s population will be online by 2017.

Technology commentators are often seduced by the promise of a hyper-connected world, focusing on embedded ambient intelligence, au-tomated Machine to Machine (M2M) traffic, ubiquitous connectivity and the ‘Internet of Everything.’

However, the real information rev-olution may lie in the growing day-by-day use of Internet-enabled devices in all parts of our lives. And it is this era of mass connectivity – delivering small, but incremental changes to the ways in which each individual does things – that promises to transform development and global welfare.

Mass connectivity with broadband can improve our lives in a myriad of ways – by providing better access to health services, enabling financial inclusion through m-payments, em-powering people through online ed-ucation, and creating transparency in government, for example.

Broadband can no longer be viewed as just another infrastruc-ture, but is today a powerful force for change. Recent discussions have focused on a ‘two-speed’ Internet.

Today, the Internet may be an Inter-net of 2.9 billion different ‘speeds’, in terms of how each individual Internet user relates to online networks and society as an online citizen.

Taken cumulatively, these incre-mental changes add up to sweeping social transformation. Worldwide, mobile phone subscriptions will ex-ceed 6.9 billion by the end of 2014, with three quarters of these subscrip-tions in the developing world and over half in Asia-Pacific (ITU, 2014 2). The total number of unique mobile phone users may be around 3.4 bil-lion people by 2014

Today, the marriage of Internet with mobile promises greater Inter-

net connectivity, at faster speeds, to more people than ever.

Emarketer anticipates that 1.76 billion people will use smartphones by the end of this year 4, while Er-icsson estimates that, by 2019, there could be 5.6 billion smartphone sub-scriptions, of which 2.6 billion will relate to LTE.

QuotesHigh-Speed Mobile By the end of

2019, there may be 5.6 billion smart-phone subscriptions.

Source: Ericsson Mobility Report June 2014

Growth in Mobile Services Mo-bile-enabled services, by vertical, 2005-2013.

Source: GSMA, “Financing Innova-tion”, July 2014.

ITU: Our Future Built on Broadband

Broadband can no longer be viewed as just another infrastructure, but is today a powerful force for change. Recent discussions have fo-cused on a ‘two-speed’ Internet.

Smartphone shipments to the Middle East and Africa saw unprecedented year-on-year growth of 83% in 2014, according to - Q4 2014 Hand-

sets Tracker released by International Data Corporation (IDC).

Spurred by the increased availability of cheaper models and dual-SIM devic-es, the global advisory and consulting services firm announced that smart-phones accounted for 41.9% of all mo-bile handset shipments to the region in 2014, up from 27% in 2013, with the overall handset market expanding 19.6% in volume year on year.

Feature phones have been hit hard by the increased availability of more affordable smartphones, with ship-ments down 4.5% year on year in 2014.

Indeed, smartphones priced under $100 captured 20% share of the MEA smartphone market in 2014, up from just 5% in 2013. Additionally, market share of smartphones in the $100–200 price bracket increased eight percent-age points in just one quarter, from 25% in Q3 2014 to 33% in Q4 2014.

Meanwhile, smartphones priced in

the higher-end $250–500 bracket have seen their share of the overall market fall from 23% in Q3 2013 to 18% in Q4 2014.

“Many new vendors have been eager to get into the region’s burgeoning smartphone space, with a number of them launching phones in this growing price band,” says Nabila Popal, IDC’s Research Manager for handsets and display solutions in the Middle East and Africa. “This strategy of targeting the mid and low end of the market has contributed significantly to the success of vendors like Huawei and Lenovo.”

The growing popularity of dual-SIM smartphones is also helping shape the market, with shipments of such devices increasing 34% year on year in Q4 2014.

“Vendors such as Samsung and HTC launched variants of their flagship S5 and HTC One M8 models with dual-SIM capabilities,” says Isaac T. Ngatia, a Senior Research Analyst at IDC Middle East, Africa, and Turkey. “Demand for such devices stems from the fact that a growing band of con-sumers want to enjoy cheap cross-net-

work calls and offers from multiple telcos and therefore retain more than one SIM card for their personal use.”

The majority of the growth in the smartphone category was witnessed in countries that have larger populations but previously had low penetration rates.

For example, smartphone shipments to Nigeria and Kenya increased 135% and 112%, respectively, year on year in 2014, while Pakistan saw growth of 105% over the same period.

“The increased appetite for smart-phones in Pakistan is being driven by a combination of the deployment of 3G networks across the country and the wider availability of more affordable devices,” says Popal. Meanwhile, the more mature GCC smartphone market expanded 31.8% year on year in 2014, contributing to the region’s penetra-tion rate reaching an impressive 72.6%.

The overall handset market’s vendor dynamics also changed by the end of 2014. Although Samsung maintained its number-one position in MEA, its smartphone share fell from 51.5% in 2013 to 43.8% for 2014. Huawei and

Apple followed in second and third place with shares of 8.9% and 7.8%, re-spectively. The same trend can be seen quarter on quarter, with Samsung’s share dropping 7.8 points from Q3 to Q4 2014, while Huawei and Apple saw their shares increase 5.1 points and 2.7 points, respectively, over the same period.

“Apple’s growth is primarily due to the incredible success of its iPhone 6 and iPhone 6 Plus models, which finally placed the vendor in the large screen size segment that had previous-ly been dominated by Samsung,” says Popal. “Many users that had made the switch from Apple to Samsung specif-ically for the larger screen sizes have now started to switch back.

Meanwhile, Huawei has experienced a wave of growth in the mid to low-end segment, with its Honor 3 and Ascend Y series enjoying great suc-cess. The vendor has struck the right balance between quality and price, particularly in some of the region’s more emerging markets where it is even killing the local competition.”

Like in other global markets, the MEA market witnessed a massive 58% increase in the shipment of iOS devices in Q4 2014 compared to Q3 2014. Android shipments increased by only 3.8% over the same period, while Blackberry OS continued its declining trend after a temporary increase in Q3 2014.

Smartphone Shipments to Middle East, Africa Witness 83% Growth


25ICT

Customers of MTN Mobile Money and M-Pesa in East Africa will be able to transfer money to each other following an agreement between MTN

Group and Vodafone Group to inter-connect their mobile money services.

This interconnect collaboration be-tween the region’s two biggest mobile money operators will enable conve-nient and affordable international remittances between M-Pesa custom-ers in Kenya, Tanzania, Democratic Republic of Congo and Mozambique, and MTN Mobile Money customers in Uganda, Rwanda and Zambia.

Under the terms of their Memoran-dum of Understanding, MTN Group and Vodafone Group will also share best practice and work together to define the rules and standards of mo-bile-based remittances in Africa.

Vodafone Director of Mobile Money Michael, Joseph said: “Our agreement with MTN to connect our mobile mon-ey wallets in East Africa is a fantastic example of co-operation and interop-erability between competing mobile operators. By working together, we will deliver cheaper, faster money transfers, improving the lives of many people living in the seven countries

involved.” MTN Group Head of Mobile Finan-

cial Services, Serigne Dioum said: “Af-ter successful launches in Ivory Coast and Benin in West Africa, we are looking enthusiastically at the collab-oration with Vodafone in East Africa. Together, we aim to build a scalable model that will accelerate remittance roll-out across the continent.”

About Vodafone Vodafone is one of the world’s

largest telecommunications compa-nies and provides a range of services, including voice, messaging, data and fixed communications. Vodafone has mobile operations in 26 countries, partners with mobile networks in 55 more, and fixed broadband opera-

tions in 17 markets. As of 31 Decem-ber 2014, Vodafone had 444 million mobile customers and 11.8 million fixed Broadband customers.

About MTN Group Launched in 1994, the MTN

Group is a leading emerging market operator, connecting subscribers in 22 countries in Africa and the Middle East. The MTN Group is list-ed on the JSE Securities Exchange in South Africa under the share code: “MTN.” As of 31 December 2014, MTN recorded 223,4 million subscribers across its operations in Afghanistan, Benin, Botswana, Cam-eroon, Cote d’Ivoire, Cyprus, Gha-na, Guinea Bissau, Guinea Republic, Iran, Liberia, Nigeria, Republic of Congo (Congo-Brazzaville), Rwanda, South Africa, Sudan, South Sudan, Swaziland, Syria, Uganda, Yemen and Zambia.

MTN Mobile Money, Vodafone M-Pesa to Interconnect Mobile Money Services

PRODUCTS FOCUS

Samsung Galaxy S6


26 CSR Digestwww.businessjournalng.com

The fourth annual Smarter Sustainabil-ity Reporting Con-ference organised recently in London was by all accounts a great success. We heard from a range of

experts, raised several challenges and discussed the finer points of what makes reporting smarter. Here is a selection from my opening comments to the conference as everyone braced themselves for an action-packed day:

“G4 has emerged as the leading reporting framework with close to 1,000 reporters now having started their reporting journey with G4 or transitioned to G4. Has G4 made a difference? We do see a new relation-ship emerging with materiality but many reports are still written with a shopping list mindset – a list of ‘everything good that we did’. The G4 transition is still working itself out, but it’s a positive development. GRI has even introduced the G4 EXAM – to prove that people who write reports really can.

The European Directive for non-fi-nancial reporting came into force in December 2014 with around 6,000 organizations expected to get on the train by 2018. Will they just show up or will they use the reporting process to add value? In other countries, such as Taiwan and Singapore, reporting has become mandatory. Sustainabil-ity reporting is apparently not going to disappear. But what will make it smarter?

In 2014, more companies than ever reported to the Carbon Disclosure Project. CDP now reports impacts across a range of topics – climate change, water, sustainable cities, forests, and supply chains on the basis of data submitted by 4,500 of companies representing over a third of the world’s invested capital. This is a database too large to ignore.

The IIRC continued its journey and its search for identity as more com-panies start to pilot the framework to explain how they create value for investors. The UN Global Compact launched a program for Boards of Di-rectors so that Directors can actually learn what’s going on. SASB has pub-lished more and more standards, but

when you get beyond the hype, you realize that in some cases, you need to be a rocket scientist to understand the actual performance measures. The jury is still out on whether companies will adopt these standards and if they do, and how they will influence materiality processes.

And talking of materiality, there is still no agreement across the board on what it actually means for sustainability and despite even more declarations of harmonization and collaboration talks, all we are seeing is more and more declarations of har-monization and collaboration talks.”

Here are some of the things that others said throughout the confer-ence (and a short reaction from me).

Mardi McBrien, Managing Director, Climate Disclosure Standards Board (CDSB) : “In 2007, at the World Eco-nomic Forum, companies were saying there are too many ways to report cli-mate change. Investors were saying, “well, we don’t use it anyway”.”

Err. What’s changed?Nelmara Arbex, Chief Advisor

on Innovation in Reporting, Global Reporting Initiative (GRI): “Personally, I believe that reporting promotes change and innovation. Reports used

to talk about the past. Now they should be talking about the future.”

I agree. But when exactly does the future start?

Sarah Grey Markets Director, International Integrated Reporting Council (IIRC): “Smarter Sustainability Reporting is a pretty big issue for business. Sustainability is about hav-ing a strategic impact in the market. Hopefully some of the integrated reporting thinking will help sustain-ability reporting having that strategic impact.”

Hopefully.Verity Lawson, Sustainability

Reporting Manager, British American Tobacco: “I think especially for an or-ganization like us that is operating in a very controversial sector, it is par-ticularly important that stakeholders can place trust in what we report. So the robust frameworks and processes such as independent assurance and GRI are particularly helpful. But while it is encouraging to see all the devel-opments – G4�s focus on materiality, the IR framework, the harmonization talks – frankly it is very overwhelming for reporting companies.”

Harmonization is great in theory. The problem is, it’s always theory.

Neil Barrett, Vice-President, Sus-tainable Development, Sodexo: “It’s

really about using sustainability re-porting to create actions that will be of value to our clients. Increasingly our clients want to understand how we are helping them in their own sus-tainability journey”.

It is great when reports are useful as part of regular business processes. And when clients know what to do with them!

Shaun Davis, Group Director – Safety, Health, Wellbeing & Sustain-ability, Royal Mail: “Reporting is all about engagement and taking people with you. We shouldn’t forget how powerful it is as an engagement tool to talk to people about sustainability environment, safety well being etc.”

Louise Tyson, Head of Reporting, BP: “A lot of work goes into prepar-ing information for reports and this is wasteful if it’s mot material. Less is more. In the last three years we have cut our reporting by 30%. We are hoping that more concise reporting targeted to what our stakeholders want to know will help us answer their questions better.”

Irene Jakobi, Sustainability Manag-er, Telekom Austria: “Now we have taken a more creative approach. Our first reports were more classic with hands and people and green trees. In 2008, we started to make a shift to more communicative content.”

If you want creative, look at Tele-kom Austria’s reports!

Megan Mitrevski-Dale, Associate Director, Corporate Responsibility and Sustainability Communications, Coca-Cola Enterprises: “Starting in 2005 we set ourselves a target to reduce our operational carbon foot-print by 15% by 2020. OK, we said, operations means our manufacturing facilities and field sales offices. But as we started to go through it, we real-ized that that’s only part of the story. If our product gets to a store and its not in a cooler, no-one will buy it. Then we realized that our main carbon footprint isn’t in our opera-tions. It is actually in our vending and cooling facilities.

15 Insights from The Smarter Sustainability Reporting Conference


27ThePovertyGapwww.businessjournalng.com

Tosin Ayinde

On March 8 2015, the world celebrated the International Women’s Day.

This year’s theme was tagged ‘Equality for

Women is Progress for All.’ This histor-ic celebration dates back to 1908 in far away New York, United States where some women garment makers died in controversial circumstances after calls to ameliorate poor working conditions and other undue gender discrimination meted to them by their employer were rebuffed.

Two years after their demise, an in-ternational women conference was convened and what is known today as International Women’s Day was unan-imously adopted as a symbolic day to press for women’s rights.

Thereafter, women’s empowerment has become very popular world-wide owing to the fact that empowering women who constitute a large percent-age of the disadvantaged class leads to economic growth and development.

This celebration has helped to high-light globally, the essence of gender inclusiveness and its importance in driv-ing social and economic development. In truth, women bring a large amount of passion and dedication to bear on most of life issues and situations.

In Nigeria, both the public and pri-vate sectors have demonstrated com-mitment through collaborative efforts targeted at alleviating poverty and creating employment through women empowerment initiatives, leveraging education and agriculture that are con-sidered as vital to optimising women’s potential.

For instance, the government’s YOU-WIN Programme is especially targeted at female entrepreneurs while the Brit-ish American Tobacco Nigeria Founda-tion (BATNF), and other organisations in the private sector have continued to be at the vanguard of public/private part-nerships to empower women.

Sustainable development is only possible when women and men enjoy equal opportunities to optimise their potential through equal participation in the development process, which is what many of the initiatives seek to achieve.

In a bid to encourage women farmers and also boost agricultural productivity, the Central Bank of Nigeria provided about N1 billion special funds to Quint-essential Business Women Association (QBWA), a group that seeks to empow-er women across the country.

Mrs. Shimite Katung, President of QBWA said the funds are meant for members of the group, and some of the members have already benefited from this initiative.

“We have disbursed funds to two states as pilot study and it worked per-fectly. We are thinking of expanding to 10 additional states. Most of our benefi-ciaries are smallholder farmers who cul-tivate farming products such as cassava, rice, yam, etc.

Having identified inadequate funding as a major setback in their line of busi-

ness, we divided them into groups to enable them access the funds as a team. We also ensure safe delivery of their farm products to their final destination so as to enable them to re-pay the loans.”

Similarly, the Ogun State government, through the Ministry of Women Affairs and Social Development, in collabora-tion with Ecobank recently granted cred-it facilities to the tune of N100 million to 3,850 women across 20 local govern-ment areas in a bid to alleviate poverty in the state.

The Commissioner for Women Affairs and Social Development, Mrs. Elizabeth Sonubi, disclosed that the initiative was an integral component of the mission to rebuild the state.

“The empowerment initiative of the present leadership in the state is tar-geted at women across the state, par-ticularly those in the rural areas to help improve their lives and ultimately reduce poverty to its barest minimum.”

It is noteworthy that BATN Founda-tion has been in the frontline of private sector initiatives in social development and women empowerment. It has con-sistently demonstrated this strategic thrust by investing in women through agricultural interventions that are aimed at alleviating poverty and creating sus-tainable employment.

Guided by this mindset, BATN Foun-dation, in collaboration with the Ogun State Ministry of Agriculture, & Chi Farms Limited organised a two-day poul-try production training for women in the state capital, Abeokuta.

The event was put together to honour women at a time the whole world was celebrating them; this was also in rec-ognition of the fact that agriculture is a critical area of empowerment for women that has positive ripple effects within the family and across the community.

The training programme was aimed at equipping both existing smallhold-er farmers and start-ups with requisite knowledge and skills on contemporary methods and techniques of operating successful poultry farming, to enable them migrate from subsistence to com-mercialised farming.

Mrs. Omolara Adeyemi, a beneficiary of the training programme, said: “What I have learnt in this training is enough for me to move my poultry farming business to a higher level. I want to thank the or-ganisers for putting together this special programme.”

The participants were exposed to non-operational aspects of poultry farming such as packaging, branding, customer service and after-sales service techniques that could facilitate the suc-cessful management of poultry business.

A unique highlight of the programme is that some men also partook in the training that was originally designed to empower and celebrate women.

Olalekan Bakare, male, and a gradu-ate who was based in South Africa but relocated to Nigeria earlier this year, ex-plained the motivation behind his partic-ipation in the programme.

“I want to appreciate BATN Founda-tion for initiating this kind of programme. I graduated about five years ago, and travelled to South Africa in search of greener pasture. I relocated to Nigeria a few months ago to start my own poultry business. I have built my pen already, but I have not commenced operations. For me, this programme is just in time, be-cause I have learnt a whole lot on how to

manage my farm.”Responding to the involvement of

men in the programme, Mrs. Oluwaseyi Ashade, Sustainability Manager, BATN, said:

“We are committed to supporting the government’s effort in creating employ-ment and supporting rural development, thereby reducing poverty through sus-tainable agricultural initiatives designed to meet the needs of smallholder farm-ers in rural communities across Nigeria.

Our strong mission is to drive sus-tainable agriculture using best practic-es, which we believe is the way forward for every country that desires economic growth. We are glad some men partici-pated in the programme.

For us, their involvement is an en-dorsement of the BATN Foundation’s initiative by the people of Ogun State. BATN Foundation believes in an inclu-sive culture as everyone’s success in agriculture and the poultry value chain is very important to the success of agri-culture in Ogun State.”

A total of 99 trainees registered for the programme on the first day, while the second day saw about 114 people participating in the programme. About 70 percent of the trainees were wom-en, while 30 percent were men on the

first day. The second day witnessed 75 percent were women while 25 percent were men.

Describing the strategy being used in fostering economic growth and devel-opment, Ms. Abimbola Okoya, General Manager, BATNF, told the participants and other stakeholders that investing in agricultural initiatives make sound eco-nomic sense to the Foundation.

“Our main focus at BATNF is to drive sustainable agriculture to alleviate pov-erty by migrating smallholder farmers from subsistence farming to commer-cialised farming through various inter-ventions schemes such as potable water supply, vocational skills development, agricultural development and environ-mental protection,” said Okoya.

“That is why BATNF has partnered with Ogun State Ministry of Agriculture and CHI Farms Limited in supporting the government’s initiatives to create wealth and alleviate poverty in the state.”

Speaking on the Foundation’s plan, Okoya said that the training programme will be extended to other communities in order to spread its benefits to a great-er number of people.

“The Foundation has invested in cas-sava and maize production in which we plan to empower some smallholder farmer groups especially co-operatives in those areas (Egba and Ijebu commu-nities in Ogun State) before the end of the year. We have a lot of initiatives this year, and we will be partnering CHI Farms, Agricultural Development Pro-gramme and the Ogun State Ministry of Agriculture.”

Alhaji Bashiru Bakare, Director, Plan-ning, Monitoring and Evaluation, Minis-try of Agriculture who represented the Ogun State government, lauded BATN Foundation for developing the empow-erment initiative at a time the govern-ment is rebuilding the state through agricultural production.

“The Ogun State Government has significantly developed the agricultur-al sector, and will continue to support any laudable initiative that is consis-tent with the vision of the state with respect to creation of wealth through agricultural initiatives. Already, we have provided the enabling environment for economic development to thrive in the state and this is reinforced by this BATN Foundation intervention.”

The poultry production training for women is part of BATN Foundation’s contribution to alleviating poverty through capacity building initiatives designed for smallholder farmers across rural communities in Nigeria.

With a little over 50 percent of Ni-gerians living in rural communities and a sizeable portion being women, initiatives such as the BATNF’s Poultry Training Programme will help benefi-ciaries increase their income, which will consequently lead to a better standard of living for the beneficiaries and their families.

Ultimately, the community and the entire country will benefit as the in-creased productivity will make an im-pact on the nation’s Gross Domestic Product GDP).

Poultry Farming: Panacea for Poverty Alleviation, Empowering Women


28 Health Carewww.businessjournalng.com

The Board of Executive Di-rectors of the World Bank Group, last month, ap-proved a $500 million In-ternational Development Association (IDA) credit for

Nigeria. The IDA is the window of the World

Bank which offers grants and low- to zero-interest rate loans for projects and programmes that boost economic growth, reduce poverty, and improve standard of living.

The facility granted Nigeria was de-signed to bring about significant im-provements in maternal, child, and nu-trition health services for women and children in the country.

Domestic reforms aimed at improv-ing cogent primary healthcare indica-tors in the country and engagements with multilateral funding agencies and donors fructified the credit.

In 2012, Prime Minister Jens Stolten-berg of Norway and Chelsea Clinton, in her capacity as Board Member of Clin-ton Health Access Initiative (CHAI), ar-rived in Nigeria to join President Good-luck Jonathan and (then) Honourable Minister of State for Health, Dr. Mu-hammad Ali Pate, to launch the Saving One Million Lives (SOML) initiative with support from CHAI.

The rationale for the initiative was that in Nigeria, an estimated one mil-lion mothers and children die each year from preventable causes. As a result, the Federal Ministry of Health decid-ed to set new goals to improve quality healthcare from 2013 and save the lives of Nigerian mothers and children.

Health sector experts and stakehold-ers credit Dr. Pate as the initiator of the SOML initiative. He had come into Nigeria’s healthcare limelight following his trailblasing work at the National Pri-mary Health Care Development Agency (NPHCDA), where he served as the Ex-ecutive Director from 2008 to 2011. Prior to his appointment, Nigeria was one of the four polio endemic PAIN countries; the others being Pakistan, Afghanistan and India.

Dr.Pate tackled the polio epidemic headlong. By June 2009, he had insti-gated a grassroots-oriented campaign of engaging respected traditional rulers in the North, under the leadership of the Sultan of Sokoto, to assist with de-livery of the immunisation programme messages in combination with the development of an effective primary healthcare system. A decade earlier, the national immunisation programme had suffered severe setbacks, especially in the North.

The effectiveness of the strategic ap-proach adopted by Dr. Pate caught the attention of the international and local stakeholders in less than two years of his appointment. In 2010, incidences of the Wild Polio Virus (WPV) fell to only 11 cases from a staggering figure of 803 in 2008.

His work also entailed the consoli-dation of the National Programme on Immunisation (NPI) into the broader framework of NPHCDA, in line with in-ternational best practices. The merger sought to address old issues of struc-tural constraint, fiscal decentralisation, mismatched burden of disease and low quality spending.

This effort resulted in the strength-ening of core diagnostics, systems development and human resources capacity development within the new NPHCDA. With the critical arms of the agency thus strengthened, the national Midwives’ Service Scheme (MSS) was launched, to mobilise midwives to se-lected primary healthcare facilities in rural communities to increase the pool of skilled birth attendants and boost delivery of services.

The overarching objective of this programme was to significantly reduce high maternal and child mortality and morbidity. The level of work done to achieve the targets of the MSS paved the way for the Saving One Million Lives initiative.

Subsequently, at the time of his appointment as Minister of State for Health by President Goodluck Jonathan in July 2011,Dr. Pate already had a clear focus on what his priorities were, name-ly continued fight for polio eradication and mobilization of public-private coa-lition for SOML. Nigeria is now at the verge of being declared polio-free by the World Health Organisation.

However, Dr. Pate resigned his ap-pointment in 2013 to take up a profes-

sorial chair at the United States’ Duke University’s Global Health Institute. The position would see him serve as Senior Adviser to the Seattle-based Bill and Melinda Gates Foundation (a major player in Nigeria and other developing countries in the fight against major dis-eases like Polio), among other high-lev-el engagements.

Nevertheless, this high profile exit from Nigeria’s health policy sector, raised concerns on continuity of some of the programmes that had begun to gain traction under the purview of Dr. Pate.

To address the concerns, he offered to continue to provide his services on part-time basis as chairman of the Pres-idential Task Force on Polio Eradication and the public-private coalition for Sav-ing One Million Lives initiative, in fulfil-ment of his previous commitments to“ see to conclusion of these important national priorities.”

It becomes obvious that Dr. Pate, a consummate Nigerian health profes-sional, has a strong passion and excep-tional commitment to improvements in healthcare delivery in Nigeria, espe-cially to the most vulnerable groups.It always instils confidence when donors

are able to associate someone of this quality with a development programme they are giving funding consideration.

The $500 million credit will serve as a necessary fillip to the policy drive to-wards a Nigeria where maternal, child, and nutrition health services for wom-en and children would be significantly improved. Not least because of the ex-isting constraint in the fiscal space as a result of the sharp drop in oil prices.

The healthcare challenges the $500million credit is supposed to help address are enormous. Nigeria ac-counts for 14% of all annual maternal deaths worldwide, second only to India at 17%. Similarly, the country accounts for 13% of all global deaths of children under the age of five years, again sec-ond only to India at 21%.

To address the challenge of estimat-ed annual 900,000 maternal and child deaths, SOML focuses on increasing the use of high-impact reproductive and child health and nutrition interventions, and improving the quality of these ser-vices; strengthening monitoring and evaluation systems and measurement data; encouraging private sector inno-vation; and increasing transparency in management and budgeting for Prima-ry Health Care (PHC) in the country.

The World Bank Group says it is ex-pected that the new health operation will start implementation on August 1, 2015 and run till December 2019.

The Bank’s support for SOML will uti-lise the Programme-for-Results (PforR) instrument to encourage a greater fo-cus on results, increase accountability, improve measurements, strengthen management, and foster innovation.

Importantly, the PforR funds will only be disbursed to the Federal and State governments for independently verified improvements in key services such as vaccination coverage among young children, rates of contraceptive use, Vitamin A supplementation, skilled birth attendance, HIV counselling and testing among women attending ante-

natal care, and preventing new malaria infections among children by using in-secticide-treated bed nets.

Also, the Federal and State govern-ments will receive incentive payments for effective tackling of governance and management issues in the health sector and for improving the quality of basic health services.

The incoming administration of Gen-eral Muhammadu Buhari now has the responsibility of successful utilisation of the IDA credit. Based on the passion of the President-elect to serve, there is high hope that the $500 million fund-ing will deliver its objectives, and that further general improvement in health-care delivery in Nigeria will be realised over the next four years.

Appointment of a competent Nigeri-an with experience in result-based bud-geting as Minister of Health will boost the chances of success in the imple-mentation of health policies and foster judicious use of available resources.

The need for such a professional to have exposure to the international health policy community and global funding agencies cannot be over-em-phasied, considering the significant international resources to be mobilised for healthcare under the Sustainable Development Goals which will replace the Millennium Development Goals in 2015.

The WHO asserts that “the enjoy-ment of the highest attainable standard of health is one of the fundamental rights of every human being.” This means children should have access to healthcare when they need it. It also implies that pregnant women should be able to receive antenatal care and deliver safely with the assistance of skilled birth attendants.

Chinedu Moghalu is Head, Corporate Communication Department, Nigerian Export-Im-port Bank

NIGERIA: The $500m World Bank Support for Maternal, Child Health


29Stock Marketwww.businessjournalng.com


30 Digestwww.businessjournalng.com

Non Oil Sector

By 2050, it’s expected that the world’s population will reach 9.2 billion people and majority of this growth has been predicted to occur in developing

countries like Nigeria, which has a lot of untapped land space and water for agriculture. Thus in order to keep up with the rising populations and income growth, global food production must increase by an estimated 70 percent to be able to feed the world.

The answer to that daunting chal-lenge lies in real time data gathering and analysis. Precision agriculture involves the collection of real-time data on weather, soil, air quality and crop maturity as well as equipment, labor costs and its availability, to provide analytics which can be used to make smarter decisions.

The wealth and security of a country comes from its land and hence what is needed is sustainable, high-tech and high productivity agriculture which will be remunerative and help provide both food and energy security. Precision agriculture, which can provide precise inputs like water, fertilizer, insecticides at the right time to crops, can help bring in the next green revolution.

It can be said that the practice of precision agriculture was enabled by the advent of GPS and GNSS. The farm-er’s and/or researcher’s ability to locate their precise position in a field allows for the creation of maps of the spatial variability of as many variables as can be measured (e.g. crop yield, terrain features/topography, organic matter content, moisture levels, nitrogen levels, pH, EC, Mg, K, etc.)

According to Wikipedia.com, Precision Agriculture (PA) or satellite farming or site specific crop manage-ment (SSCM) is a farming management concept based on observing, mea-suring and responding to inter and intra-field variability in crops. Crop vari-ability typically has both a spatial and temporal component which makes sta-tistical/computational treatments quite involved. The holy grail of precision agriculture research will be the ability to define a Decision Support System (DSS) for whole farm management with the goal of optimizing returns on inputs while preserving resources.

With precision agriculture, control centers collect and process data in real time to help farmers make the best decisions with regard to planting, fer-tilizing and harvesting crops. Sensors placed throughout the fields are used to measure temperature and humidity of the soil and surrounding air.

Global Adoption and Features of Precision Agriculture

Currently, precision agriculture technologies are being used by larger companies as it requires robust IT infrastructure and resources to handle the monitoring. Originating from the United States of America and European countries where farms are generally big (over 100 hectares), it sees extensive use of Global Positioning Satellite (GPS) for precise mapping of farms and with appropriate software, informs the

farmer about the status of his crop and which part of the farm requires inputs like water, fertilizer and pesticide etc.

Precision agriculture in western countries is also characterized by in-creased mechanization with the use of heavy farm machinery (average power 100-200 kW) for all the farm and field operations such as sowing, harvesting, weeding, baling etc. The machinery runs on fossil fuels and uses about 63 percent of the total energy used in farming, which is a significant amount.

PA for small farms, on the other hand, can use small farm machinery and robots which may also be amena-ble to run on renewable fuels like bio oil, compressed biogas and electricity produced on farms by agricultural residues. The energy efficiency of the machinery and operations could also be improved.

For small farms, precision agriculture may include sub-surface drip irrigation for precise water and fertilizer applica-tion to the crops and robots for no-till sowing, weed removal, harvesting and other farming operations. Some of these robots are already being used on small farms in the US and Europe, with

vigorous research and development taking place, it is expected that they may be deployed on a large scale in the near future.

Similarly drones are being used quite regularly in Japan and US for insecticide application to the crops. Use of drones for agriculture is proverbial “turning swords into ploughs!” Most of these robotic machines and drones are small in size and hence are very suitable and excellent match for small farm applica-tions. Thus small farms size in Nigeria is a blessing in disguise and ripe for large scale application of precision agriculture.

Benefits of Precision AgricultureFarmers and farms are the backbone

of any country since they can produce food, fuel (agricultural residues) and wealth from the land. Precision agri-culture techniques and technologies have been adjudged to maximize food production, minimize environmental impact and reduce cost.

PA management practices can significantly reduce the amount of nutrient and other crop inputs used while boosting yields. Farmers thus obtain a return on their investment by

saving on phytosanitary and fertilizer costs. The second, large-scale benefit of targeting inputs in spatial, temporal and quantitative terms concerns envi-ronmental impacts. Applying the right amount of inputs in the right place and at the right time benefits crops, soils and groundwater, thus the entire crop cycle.

High tech PA can help tackle the non-availability of inputs and labour on time which is the biggest stumbling block to increase productivity of farms and remuneration for farmers, as well as manage water input as majority of farms are rainfed and with the change of weather patterns, availability of rain water has become very unpredictable.

PA in the US and other countries has shown tremendous increase in productivity, lowering of inputs and hence increased remuneration to the farmers. Besides it has helped improve the quality of land with no-till farming and less water usage.

Adoption of PA can help to produce tremendous rural wealth in a sustain-able and environmentally sound way. The most important beneficial compo-nent of its adoption, will be in creating a huge resource of engineers, scientists and agriculturists to develop various components of the technology.

Precision Agriculture Activities in Nigeria

With the aim to enhance farm output in Nigeria, a week-long training workshop on PA was recently con-ducted by Coordinators and Assistant Coordinating Officers of West Africa Agricultural Productivity Programme (WAAPP) drawn from several universi-ties, research institutes and Agricultural Development Projects across the coun-try ) in collaboration with Clemence and Geoconsult.

The workshop which held in Kaduna, was aimed at acquainting participants with Precision farming techniques in terms of using technologies such as Global Positioning System (GPS),

Geographic Information System (GIS), Remote Sensing, and Yield Monitors Guidance Systems for various rate application.

According to the National Project Coordinator of WAAPP, Prof. Damian Chikwendu, the training would expose participants to unending possibilities and applications in everyday field oper-ations, thus participants were urged to seize the opportunity of the platform to improve their knowledge to enable them join hands in the current drive to take the country to a level of sustain-able agricultural development and food security.

The Way Forward For Precision Agriculture

With the increased penetration of mobile devices into rural areas, it is been envisioned that a time will come when smaller farms and co-ops could use mobile devices and crowd sourcing to optimize their own agriculture.

As technology grows, a scenario whereby a farmer can take a picture of a crop with his phone and upload it to a database where an expert can assess the maturity of the crop based on its coloring and other properties; people could provide their own reading on temperature and humidity and be a substitute for sensor data if none is available, is a possible reality.

There is a need for excellent engi-neers from science and technology focused institutions to design machin-ery like robots and drones for PA. This can be facilitated by establishing a new branch of engineering called Agricul-tural Mechanotrics or robotics where faculty and students from almost all branches of engineering will interact and collaborate to develop smart systems for PA.

Another way forward is when scientists from agriculture research institutes, engineers from the academ-ic world, industry and farmers work together in developing PA.

PA can provide a platform for indus-trial Corporate Social Responsibility (CSR) activity. After all helping the rural poor improve their livelihood through high tech farming should qualify as a CSR activity. The government can pro-vide support via policies and infrastruc-ture, as well as funds to the technology industry so that they get more engaged in agriculture and PA activities.

Precision Management Practice and Sustainable Agriculture

Consequently, precision agriculture has become a cornerstone of sustain-able agriculture, since it respects crops, soils and farmers. Sustainable agricul-ture seeks to assure a continued supply of food within the ecological, econom-ic and social limits required to sustain production in the long term. Precision agriculture therefore seeks to use high-tech systems in pursuit of this goal.

Without excellent manpower and consequently good research and development, PA will not succeed. As demands on the world’s food supply chain increases, it has become a matter of necessity to maximize agriculture resources in a sustainable manner.

Source: Agronigeria

The Advocacy for Precision Agriculture, Food Security


31Analysiswww.businessjournalng.com

Haniel Ukpaukure

The casual reader of the title of this article who knows nothing about public rela-tions will ask the natural question – what is the dif-

ference between the two? In what way is management of crisis different from crisis management?

Surprisingly, there are many sup-posed public relations practitioners who use the two terms inter-chang-ingly to mean the same thing.

The truth is that while both terms refer to crisis and its management, they are not exactly the same thing. One involves employment of appro-priate and relevant techniques to nip a crisis in the bud, while the other is about using the same or other tech-niques to put out a fire that has bro-ken out.

For a good practitioner, therefore, it is ideal to notice in time what might look like early signs of fire in the form of smoke, for the purpose of ensuring that even the first flame does not be-come visible, let alone develop into a real fire.

A general disquiet among employ-ees about unusual delays in payment of salaries could be early signs of smoke, which could develop into a fire in the form of a labour crisis.

An organisation that understands that public relations objectives are better achieved when actions are tak-en proactively would employ the tech-nique of communication to address the issue before it gets out of hand.

The economy is bad; everybody knows that. The company is passing through difficult times, as sales have slumped, no thanks to the bad econ-omy. The staff may be aware of that. But do not assume that it is enough to make them understand why salaries have been late in coming, recently, es-pecially if they have been performing their tasks diligently, without fail. In dealing with issues that are potential crises, there should be no room for assumptions, which could proof to be costly.

It would not take more than a meeting with officials of the workers’ union to ensure the disquiet does not develop into a crisis. The workers may know what the company is passing through. But a formal communication to them, through a meeting, would achieve the twin objectives of show-ing them the company cares about their existence and also making them feel a sense of belonging, when they are brought into the picture.

Perhaps, they have been feeding on information from the grapevine about the reasons for late payment of salaries. A formal meeting with work-ers’ representatives would afford the company the opportunity to explain not just the cause of recent develop-ments, but efforts it is making to mit-igate the effects. This would achieve for the organisation the understand-ing, sympathy and support of a very critical public in its trying period.

Besides, it could also result in a sit-uation in which workers resolve, with-out prompting, to put in more effort,

in the hope that going the extra mile in their allotted tasks could improve the fortunes of the company, which would result in regular payment of salaries.

In a situation such as this, the com-pany would have succeeded in the management of a crisis by snuffing out the unseen fire that is responsible for the smoke. This would ensure the fire never breaks out.

Compare this scenario with a situ-ation in which the company decides to ignore the disquiet that has virtu-ally engulfed the company, expecting workers to know why salaries have not been regular, after all, the situ-ation has not always been the case. Can’t they understand that sales have not been impressive since the rate of the Naira made a huge fall against the Dollar, which increased the cost of imported raw materials, against the background of generally low pur-chasing power? They should even be grateful to the company for preferring the option of delayed payment of sal-aries to job cuts!

Well, the organisation will have more than a plateful when the fire breaks out in form of a labour crisis, with the attendant consequence of loss in man-hour, negative publicity, fall in share price if it is quoted on the stock exchange and public perception of it as an organisation that cannot meet its basic obligation to its work-ers.

Whatever it does at this stage to quell the crisis is known as crisis man-agement, which is different from man-

agement of crisis, which we saw in the first case.

An organisation that understands the importance of public relations must be prepared to deal with man-agement of crisis and crisis manage-ment at one time or the other. It is not every time crises give signs before they break out. What this means is that while it is preferable to have to engage in management of crisis, un-foreseen circumstances could throw up crises that were not anticipated, forcing the organisation to engage in crisis management

The sudden death of the chief ex-ecutive officer in an organisation without a clear succession plan could ignite a power struggle among top ex-ecutives, for instance, those at the lev-el of executive directors, who would all naturally feel eminently qualified to fill the vacuum.

Think of a development that could cause division in the board, manage-ment, right down to the staff, with sympathy and support split in favour of two or more potential chief exec-utive officers. It would take skillful crisis management to steer the organ-isation out of a major crisis that could negatively affect its operations and, by extension, its image, over a long period.

A sudden crisis could also erupt through the death of a factory work-er, especially in a company that does not consider employee safety and safe work environment a priority. Here, the company finds itself fighting the fire in more than one direction. While

it contends with having a corpse on its hands if there is no insurance policy for factory workers, it also worries about how to provide answers that would inevitably come from the gov-ernment through the police and the courts.

There is also the worrisome ques-tion of how to restore confidence in the entire factory workforce who may rightly see the same fate befalling them in due course. Central to the crisis, of course, is the negative pub-licity the incidence would attract to the organisation, which could portray it as one that cares nothing about the safety and welfare of its staff.

In the two cases – whether manage-ment of crisis or crisis management – the organisation must employ appro-priate and relevant public relations tools in the most effective manner to ensure its integrity, image and reputa-tion remain intact.

As we have seen in this article, while management of crisis is always pref-erable because it is easier and more convenient to handle, since it involves preventing the fire from breaking out, crisis management is unavoidable, in so far as it is not possible to predict what would happen the next moment or the next day.

No matter how proactive an organ-isation may be, the occasion will al-ways come when the public relations manager must face the unpleasant task of putting out a fire that has bro-ken out.

In a way, this is when his skills and expertise are best measured.

Management of Crisis or Crisis Management?

ENTREPRENEURSHIPWITH MUIDEEN ADEBAYO IBRAHIM

I decided to write on this topic this week because of the rate at which business-es die prematurely in Nige-ria. Infact, it is alarming and

frightening, which really call for serious concern and all hands must be on deck.

I was in a meeting sometime last year when a woman lament-ed that the rate at which busi-nesses die or fail in Nigeria is quite alarming and I was able to share my thoughts with her and others at that meeting. It is on that note that I decided to also share with my ardent readers how to build a sustainable busi-ness.

Oxford Advanced Learner’s Dictionary defined Sustainable as something “that can continue or be continued for a long time”.

In other climes such as India, China, America and Germany just to mention but a few, there are some companies that have existed for over 150 years.

Statisticsbrain.com assert-ed in one on their publications that 55% of businesses fail be-fore attaining five years whilst 71% fail before 10 years. I think to a large extent, a lot of busi-nesses fail in Nigeria as a result of so many factors prominent amongst which are; in-compe-tence, complacency, attitudinal challenge, un-balanced experi-ence or lack of managerial expe-rience, neglect, fraud, disaster, lack of corporate governance, lack of infrastructural facilities, lack of (5Ps) passion, persever-ance, persistency, patience and prayer.

According to a report pub-lished by the Bank of Korea on May 14, 2008 whilst investigat-ing 41 countries, there were 5,586 companies older than 200 years. Of these, 3146 are locat-ed in Japan, 837 in Germany, 222 in the Netherlands and 196 in France. It is quite unfortunate that no Nigerian company made

that list. I think this is something we must all ponder about.

In 2011, some companies in India were celebrated because they survived over a century (100 years) some of which are: Bennett, Coleman & Co., Dabur, Indian Hotels, Tata Steel, Kir-loskar Brothers TVS (Maker of Keke Maruwa or Keke Napep as called in Nigeria), The Economic Times just to mention but a few.

Come to think of it, where is Adeola Odutola Tyre, Tate & Lye, Okin Biscuits and others too numerous to mention? In-fact, l am yet to come across an indigenous Nigerian company that is over a 100 years old.

It is sad and disheartening that in this part of the world, it is ‘one man show syndrome.’ The mentality of some founders is that after all, it is my business and I can run it the way and manner I like. As a result, a lot of businesses have gone to the great beyond-whereas, in other

parts of the world, we have busi-nesses that have lived from gen-eration to another generation.

In the Book entitled: Built To Last: Successful Habits of Visionary Companies written by Jim Collins & Jerry I. Porras, the authors took a critical look at truly exceptional companies that have stood the test of time.

Jim and Jerry looked at 18 companies founded before 1950,that is (from 1812 to 1945).

The companies are as list-ed infra: 1812; Citicorp, 1837; Procter & Gamble, 1847; Philip Morris, 1850; American Express, 1886; Johnson & Johnson, 1891; Merck, 1892; General Electric, 1901; Nordstrom, 1902; 3M, 1903; Ford, 1911; IBM, 1915; Boeing, 1923; Walt Disney, 1927; Marriott, 1928; Motorola, 1938; Hewlett – Packard, 1945; Sony and 1945; Walt Mart.

The aforementioned compa-nies were founded by people

like you and my humble self. But one thing those companies all have in common when founded by their various founders is to build sustainable businesses.

Infact, the characteristics of the companies are ‘visionary’, ‘enduring’, and they were all more than successful because of their strong brands and pres-ence all over the world.

Other characteristics of those 18 companies are: resiliency, strategic planning, goals set-ting, charismatic CEOs, perse-verance, change management, core ideologies, core values and patience amongst others. Not only that, many of them are now role models and icons for the practice of management around the world.

You too can build a sustain-able company/business. What you need is just a shift in par-adigm and to have a positive mindset. It is not too late! The time to start is now!

At this juncture, it is pertinent to share with you survival tips so as to stand above board at all times and build a sustainable business:

First: Develop a good market-ing and business plan that takes into account customer needs, competition, pricing and pro-motional strategies.

Second: Have a good knowl-edge of business law or better still hire a lawyer whilst trans-acting a serious business with third party.

Third: Keep a good inventory of your products and/or services, train, motivate your employees.

Fourth: Make sure you have experience, expertise and talent to run your business. Plan every business from start to finish and embrace corporate governance.

Lastly: Know your market and define how much of it you will be able to capture.

Conclusively, sustainability is a journey, not a destination.

Building a Sustainable Business

Muideen Adebayo [email protected] or 08037221517 (SMS only)


32Books Arts Culturewww.businessjournalng.com

Author: Julie Agnes Omeike

Move Forward Nigeria!The book is an interesting genre of literature that attempts to engulf enterprising youths

and young minds- a grasp for the steady growth of Nigeria’s indigenous economic develop-ment. Fun loving articles also emerged from the author’s motivational stories culled from her literary works.

The book has impact on talent, creativity and reformation of family, lifestyle norms and values existing in the Nigerian society.

The fantastic content of poems illustrate Nigerian values for adolescents and the grow-ing child, the typical ‘Omode’ as the writer emphasises, creates a calling for the learning culture of the youths at home and within the society.

Facets of modern cooking, Mama’s cooking Pot and African tattoo are inculcated in her poems to describe the era of modern civilization. She warns aggressively on African Tattoo and the dangers surrounding addiction to western culture.

Motivational articles on being the best you can be can be highly beneficial to young minds and entrepreneurs. Her popular Tamia’s Story has received resourceful influence, with a brighter concept for relevance to the role of the media in Nigeria.

Her literary piece on common business gestures captivates the regular role of every busi-ness-person, it provides the true secret tips of gaining successful business sales.

‘Buyers can be very impatient, especially when they have a thousand and one things to do at the same time. The tone of a selling voice should be receptive, benevolent and informative.’

Catch the glimpse on handling relationships in your adolescent age and inspiring modes on curbing family lifestyle and enterprise in a harmonious manner from her fiction works which she terms as ‘fiction –realism.’

I leave a note on one of her inspiring poems ‘Life’s Little Lessons’ an excellent food for thought.

Art Delight is now available at Terra Kuture, V/Island and Glendora Shoprite, Ikeja.

Book Review

Art Delight (The Classic Collection)

Nigeria’s “Pride of Africa” in secondary education, Olashore International School has restated its commitment to retain

Nigeria’s strong culture and value system in its core structure, even as it strives to ensure Olashore Schol-ars are adequately prepared for the competitive global market.

Olashore International will also keep Nigeria’s history on the radar, given the fact that most young Ni-gerians are not conversant with the country’s history.

This assurance was given by the

Chairman, Board of Governors, Prince Bimbo Olashore at the con-clusion of an international excur-sion programme to France and a number of countries, by students of Olashore International School.

“The world has indeed become a global village and we must be active players in the world stage, not just spectators. But even as we also help our students become global citizens, we must also help them understand our history so they can better appreciate where they are coming from and where they should be going.”

To help amplify personal develop-

ment and experience, the Olashore School Europe Biennial trip was structured to connect the students to global culture, history and lin-gua-franca in the unique Olashore style.

The trip was well rounded, engag-ing to 68 students and 5 members of staff, following a programme that revolved around history, Geography, Culture, Art, Music and language. The 7-day tour in France shed more light on the essence and benefit of OIS learning outside the classroom.

The Principal of Olashore interna-tional School, Mr. Derek Smith, also pointed out that “Olashore educa-

tion is much more than academic excellence. We apply the education-al philosophy based on Kolb’s learn-ing cycle where experience followed by reflection leads to learning. Olashore’s trips and excursions are based on this experiential approach to learning. The common thread is the focus on positive outcomes and social development.

“The trips involve a range of activities including climbing, canoe-ing, cognitive challenges and direct teaching alongside cultural activ-ities, museum visits, local school visits and community interactions. This is all part of learning beyond

the classroom and shaping Olashore school students for the future as well as preparing them to take the next steps as the Nigerian grown global leaders for the 21st Century.”

The Olashore ‘Beyond the Class-room’ programme includes special guided trips to local and interna-tional destinations including Obudu Cattle Ranch, Republic of Benin, South Africa, UK, Dubai and France.

The school also holds a special community service every year, so students learn from an early age the principle of greatness through service.

Olashore School Imbibes History, Culture on Europe Tours


33Maritimewww.businessjournalng.com


34 Automobilewww.businessjournalng.com

GMC’s U.S. sales jumped 20 percent last month and have advanced 16 percent to 167,005 this year in a hot truck market.

The Detroit 3, Nissan and Hyun-dai all posted U.S. sales increases for April as the industry appeared poised to stretch its streak of gains to 14 months.

FCA US’s 5.8 percent advance from a year-earlier marked the au-tomaker’s 61st consecutive monthly gain. Nissan Group and General Motors were back in the winning column after March sales declines. Ford Motor Co. ended a two-month skid, while Hyundai defied analysts’ forecasts of a drop.

All of the companies were among the biggest spenders on incentives last month, according to TrueCar.

The automakers were the first to report results for a month that was projected to climb 5.9 percent to 1.47 million light vehicles, accord-ing to the average estimate from 12 analysts surveyed by Bloomberg.

The seasonally adjusted sales rate for light vehicles is forecast by analysts to come in at 16.7 million. That would be down from March’s 17.1 million but up from 16.1 mil-lion in April 2014.

GM projected an April SAAR of

16.7 million. Chrysler’s forecast was 16.6 million after stripping out 400,000 medium- and heavy-duty trucks included in its estimate.

The last time U.S. sales fell vs. the year-ago month was February of last year.

Company ResultsFord’s April sales rose 5.4 percent

from a year earlier. The Ford brand was up 4.9 percent, while Lincoln advanced 20 percent. Ford said re-tail sales gained 7 percent and fleet deliveries were up 1 percent.

General Motors posted a 5.9 percent increase. Chevrolet gained 3.4 percent and GMC rose 20 per-cent. Cadillac’s 14 percent advance marked just its second gain in the last seven months. Buick fell 5.2 percent.

Jeep’s U.S. deliveries jumped 20 percent to 71,759 last month, an April record. Sales of the new Ren-egade totaled 4,214 in its first full month on the market, FCA said.

Volume advanced 4.3 percent at the Ram brand and 26 percent at the Chrysler brand, while slip-ping 16 percent at Dodge and 13 percent at Fiat. Dodge sales have been hurt by the discontinuation of the Avenger midsize sedan, and suspension of Caravan minivan output to retool a plant in Wind-sor, Ontario.

FCA’s overall light-truck sales slipped 1 percent while car volume rose 29 percent last month.

Nissan Group, meanwhile, said its sales rose 5.7 percent from a year earlier.

The Nissan Division was up 5.4 percent, while Infiniti advanced 8.8 percent.

Hyundai’s U.S. sales rose 2.9 percent to 68,009 last month, set-ting an April record, the company said in a Twitter posting. Some analysts had projected a decline for Hyundai.

Detroit 3, Nissan, Hyundai Tally April Sales Gains

The father of a pregnant woman killed by shrap-nel from an airbag that deployed during an auto accident in Malaysia sued

Takata Corp. and Honda Motor Co. in the U.S.

Law Suk Leh, 42, died when a metal fragment sliced into her neck in the July 2014 low-speed crash, ac-cording to the lawsuit filed in Miami federal court. Her daughter, deliv-ered after the mother’s death, died three days later.

Ten automakers, including Honda and Toyota Motor Corp., have re-called since 2008 about 24 million vehicles globally with Takata airbags, according to Reuters estimates.

The National Highway Traffic Safe-ty Administration has said the air-bags’ inflators may malfunction if ex-posed to consistently high humidity, deploying with too much force and

shooting metal pieces into drivers and passengers.

Leh’s death is one of six, including five in the U.S., blamed on shrapnel expelled through Takata airbags. At least 105 injuries are connected to the flaw, U.S. Sen. Bill Nelson, D-Fla., said.

Chris Martin, a Honda spokesman, and Jared Levy, a Takata spokesman, declined to comment on the lawsuit.

Law Ngee Chiong, Leh’s father, sued in the U.S. because “the defec-tive inflator at issue” was made in LaGrange, Ga., attorney Kevin Dean said in an interview. He sued on be-half of her estate and the estate of his granddaughter.

Borneo Island Leh, who was driving a 2003 Hon-

da City on Borneo Island in Malaysia on July 27, was traveling at about 20 miles (30 kilometers) an hour when

she was hit by another vehicle at an intersection, according to the law-suit. She died in an ambulance on the way to a hospital, according to the suit. Leh was survived by a 10-year-old son, Dean said.

Chiong’s lawsuit has been com-bined with about two dozen airbag personal-injury and death claims before U.S. District Judge Federico Moreno in Miami for pretrial rulings and evidence-gathering. Attorneys in these cases filed a combined com-plaint claiming Takata, Honda and others hid airbag defects for years.

Class actions against Takata, Hon-da and multiple automakers claiming loss of vehicle value tied to the re-calls are also combined before More-no in Miami. The car owners’ lawyers also filed a combined complaint on contending the companies con-cealed quality problems and inflated the cost of cars and trucks.

Honda, Takata Sued over Airbag Shrapnel Death in Malaysia


35StockReportCelebration of Corporate Death

www.businessjournalng.com

A week after the House of Representatives passed the 2015 Budget, the Upper Chamber fulfilled its part of the Appropriation pro-

cess by passing a N4.5tn budget. This is N134.4bn in excess of the N4.4tn submitted by the Executive arm late 2014.

Meanwhile, recurrent expenditure was reduced slightly by N0.5bn to N2.6tn while capital expenditure was scaled down by additional N85.9bn to N557.0bn from N642.8bn proposed by the Executive arm. Effectively, this implies that recurrent expenditure is approximately five times the capital expenditure.

Drafted on the assumption of US$53.0 oil benchmark, exchange rate of N190.00/US$1.00, 2.3m bar-rel per day crude oil production, 5.5% GDP growth rate and 1.1% Deficit to GDP ratio, we think the 2015 appro-priation bill as passed by the National assembly seemed disconnected with present realities in the economy in a number ways.

The most telling amongst the shortcomings of the budget includes the outright exclusion of fuel subsidy payment by both the Upper and Low-er Chambers. Fuel scarcity appears to have remained a recurring subject across major cities of the Federation in recent time.

The oil marketers have blamed events in the currency market and most recently non-inclusion of sub-sidy payment in the 2015 budget as passed by the House of Representa-tives as reasons for cutting supply.

Nevertheless, we noted that the Minister of Finance has already made it clear that approximately N156.0bn will be paid to oil marketers today (April 30, 2015) to avert the crisis in the sector. On that note, we wonder how government intends to reconcile the exclusion of subsidy payment in the budget with the N156.0bn subsidy payment to be made to oil marketers.

That said, Recurrent Expenditure (N2.6tn) is also expected to be about five times the capital expenditure (N557.0bn) in the 2015 appropriation bill. Juxtaposing this with programmes and plans of the Buhari led in-coming administration which appears broad-ly expansionary, we wonder how ap-propriate the 2015 Appropriation Bill would be for the next government.

Ultimately, we think the realities on ground portray the 2015 budget as a “paper-tiger” that would be promptly reviewed by the next administration to become effectual.

Global Equities Market Review and Outlook

Global equities market perfor-mance under our coverage this week was broadly bearish as Q1:2015 eco-nomic data released in the US during the week shows slower GDP growth (+0.2%) relative to expectation (+1.0%).

Against this backdrop, the NASDAQ and S&P 500 Indices slumped 2.1%% and 0.8% W-o-W respectively. Simi-larly, the UK FTSE Index slipped 1.5% W-o-W as investors’ confidence on de-veloped markets performance wanes.

In the Eurasian region, France CAC

was down 2.8% W-o-W, Japanese NIK-KEI slumped 2.5% W-o-W even as the German DAX fell 2.1% W-o-W. We believe this performance may not be unconnected with the US GDP data which moderated as harsh weather condition, mixed effect of cheaper oil and faltering global recovery weigh down on the world’s largest economy.

However, the Hong Kong HANG-SENG sustained its positive outing, adding 0.3% W-o-W.

Performances across the BRICS market were also largely bearish. The Brazilian IBOVESPA declined 1.8% W-o-W reversing last week’s gains, as the Indian SENSEX (-1.6 %) and the South African FTSE (-1.5%) both trend-ed southwards.

On the other hand, the Chinese Shanghai Composite Index stayed bullish appreciating 1.1% W-o-W. Nonetheless, the Russian RTS closed flat as against prior week’s apprecia-tion.

Contrary to the rest of the world, major markets across Africa within our coverage advanced W-o-W as the Nigerian All Share Index improved 0.6% W-o-W on gains in bellwether stocks. The Kenya NSE 20 and the Gha-na GSE advanced 0.6% W-o-W apiece. However, Egypt EGX 30 dipped 0.7% to emerge the lone decliner.

Daily Equities Market Review and Outlook

The Nigerian Equities Market re-versed a 4-day losing streak as the All Share Index (ASI) gained 1.9% to close the week at 34,708.11pts. Like-wise, market capitalization improved N214.6bn to settle at N11.8bn. To-day’s upsurge was largely driven by gains in DANGOTE CEMENT (+4.8%), NIGERIAN BREWERIES (+3.9%) and GUARANTY (+1.6%). Activity level measured by total volume and value traded improved as volume traded ap-preciated 30.1% (374.6m units) while value traded increased 18.1% to close at N3.8bn.

The NSE sector performance was mixed as the Consumer Goods Index

led sector advancers with 2.0% as NIGERIAN BREWERIES (+3.7%) and GUINNESS (+3.7%) rallied. Close-ly trailing was the Industrial Index, which appreciated 1.9% as senti-ment on DANGOTE CEMENT(+4.8%) strengthened on impressive Q1:2015 earnings numbers, even as the Bank-ing Index rose 1.1%. Nevertheless, the Oil & Gas Index depreciated 1.6% due to price decline in FORTE OIL(-5.0%). Similarly the Insurance Index dropped 1.1%.

Market breadth as measured by the ratio of advancers to decliners improved (1.2x) today as 29 counters advanced in contrast to 24 decliners. Top on the gainers table today were PRESCO(+10.2%), FIDSON (+9.2%) and VITA FOAM (+7.6%) while the highest losing stocks werePAINT COM (-5.0%), FORTE OIL (-5.0%) and DAN-GOTE SUGAR (-5.0%). The equity mar-ket was awash with more Q1:2015 results today as listed companies rushed to meet the 1-month submis-sion deadline for unaudited results. Hence, we expect further investors’ reaction to these results in the com-ing week.

Weekly Equities Market Review and Outlook

The Nigerian Stock Market trad-ed predominately in the red save for the last trading day this week eras-ing previous losses. The streams of positive quarterly results that were released gradually boosted investors’ sentiment most especially on Thurs-day (+1.9%). As a result, the NSE-ASI advanced 0.6% WTD settling at 34,708.11 points at the close of trade this week. Likewise MTD and YTD swung positive at 9.3% and 0.1% re-spectively. On the other hand, market activity was down W-o-W as the ag-gregate volume traded declined 43.4% W-o-W to 1.2bn units while aggregate value traded for the week shed 30.4% W-o-W to N12.0bn.

The Consumer Goods (+0.7%) and the Industrial Goods (+2.8%) sectors trended northwards respectively. On

the contrary, the Banking, the Insur-ance and the Oil & Gas sectors all trended southwards, depreciating 1.7%, 2.3% and 6.9% in that order as sell pressure was sustained on key counters in the sectors during the week

Market breadth was negative, settling at 0.8x as 36 stocks ad-vanced while 41 stocks declined. 105 stocks however closed flat. PRES-CO (+14.6%), NPF MICRO FINANCE (+13.8%) and AG LEVENTIS (+11.8%) were the best performing stocks for the week, while UNITY BANK(-22.2%), DANGOTE SUGAR (-13.8%), MAY & BAKER (-12.8%) and ACCESS (-11.1%) were the market laggards. We expect the market sentiments to improve in the week ahead as investors react to some impressive Q1:2015 results posted at the close of the week.

Money Market Review and OutlookLiquidity within the market surged

during the week hence average mon-ey market rates for the week dropped to 8.3% for the Open Buy Back rate (OBB) and 9.0%for the overnight rate relative to previous week’s 15.1% and 16.2% respectively. This was driven by bonds maturity worth N535.0bn which hit the system.

Liquidity level further increased on Tuesday with an opening balance of N812.2bn while Standing Lending Facility (SLF) accessed from the CBN by the Deposit Money Banks (DMBs) closed at N91.0bn. As such the OBB and Overnight rates declined margin-ally to 8.0% and 8.8% respectively.

On Wednesday however, liquid-ity opening balance declined to N712.7bn, pushing money mar-ket rates higher to 8.6% (OBB) and 9.3% (Overnight). This decline in li-quidity was as a result of OMO auc-tions during the week (Monday and Wednesday worth N268.0bn and N331.4bn apiece).

Amid net inflow of N93.4bn to-day from the OMO auction worth N258.0bn and OMO maturity of N351.4bn, the OBB and Overnight rates closed the week lower at 8.3% and 8.8% respectively. In the com-ing week, liquidity level is expected to increase slightly as T-bills worth N150.6bn and FAAC allocation for March are anticipated to hit the sys-tem.

Foreign Exchange Market Review and Outlook

Despite dollar auction sales worth US$91.2bn by international oil com-panies on Monday, the naira closed flat at N199.10/US$1.00 at the in-terbank market. This rate was main-tained throughout the week. Similar-ly, the CBN’s clearing rate steadied at N197.00/US$1.00 for the week.

As a follow up to the CBN’s with-drawal limit on overseas card holders to US$50,000 (from US$150,000) per annum and daily cash withdrawals to US$300, the Apex bank has further clarified that customers’ cards linked to domiciliary accounts overseas are not affected. Although we suspect that demand for the dollar by trav-elers may increase locally as a result of this decision, we expect exchange rate to continue to trade within the

current level at the interbank seg-ment of the forex market in the com-ing week.

However, at the BDC segment of the forex market, the naira de-preciated by N3.00 or 1.3% WTD to N220.10/US$1.00 from N223.10/US$1.00

Bond Market Review and OutlookAgainst the backdrop of the bull-

ish sentiment which drove a rally in the fixed income space last week, the market took a breather this week. Hence average yield rose 17bps to 14.7%, even as investor sentiment varied along the term structure.

Trading activities in the fixed in-come market however did not com-mence until Tuesday due to IT re-lated malfunctions that prevented trading activities from taking place on Friday and Monday.

Activities however picked up strongly on Tuesday after the sus-pension on trading was lifted with volume and value of T-bills and bonds instruments traded reached a 6-day high. Investors played more at the short to medium end of the curve while the JUL-2034 and JUL-2030 in-struments majorly drove volume in longer term instruments.

The shorter term instruments which experienced significantly rally last week witnessed correction this week as dealers quoted higher yields. This was traceable to profit-taking and the aggressive OMO mop-ups (N847.2bn in total) conducted by the CBN this week to rein in the liquidity influx on OMO bills (N366.0bn) and FGN bonds (N535.0bn) maturities.

OMO bills were allotted at relative-ly high yield of 14.0% for all tenors (vs 10.0%, 12.8% and 13.0% rates for the 91, 182 and 368 days tenor T-bills were allotted last week). This had a more telling impact on yields on shorter term debts, as all short term rates inched higher.

In contrast to the bearish activities at the shorter end of the curve, deal-ers quoted lower yields for long ten-ured securities with the NOV-2028, MAY-2029 and NOV-2029 instru-ments witnessing a W-o-W decline in yields.

Despite the mixed sentiment along term structure, the sovereign yield curve majorly maintained its normality. However, a slight inver-sion at the longer end of the curve remained noticeable where the 20Y benchmark instrument traded at a slight discount to the 15 year bench-mark bonds.

We expect bargain hunting to take precedence in the FGN bonds mar-ket next week, especially across the short to mid-termed tenors. Liquid-ity in the money market is expected to improve on the back of liquidity injection from FAAC allocation and settlement of maturing treasury bills (N153.6bn).

Our short to mid-term outlook for the market remains moderately bull-ish as we expect investors to further re-price financial assets based on low-er political risk and the recent stabili-ty in the forex market.

Source: Afrinvest Research

Nigeria’s 2015 Appropriation Bill: Legislators Adopt the Ostrich Strategy


36www.businessjournalng.com

PoliticalEconomy

Lisa Vives

Nigeria’s president-elect is already making waves with his pledge to attack corruption, start-ing with the missing 20 billion dollars allegedly

swiped from the Nigerian National Petroleum Corporation during the previous administration.

Muhammadu Buhari pledged to pursue the claim of former Central Bank governor, Lamido Sanusi, who was suspended last year by former president Goodluck Jonathan after he warned of massive mismanagement by the oil corporation. His claim was never investigated by the ex-presi-dent.

“This issue is not over yet,” de-clared Buhari, who will be sworn in on May 29. “Once we assume office we will order a fresh probe into the matter… We will not allow people to steal money meant for Nigerians to buy shares and stash (them) away in foreign lands.”

Buhari’s warning to those who pocketed national funds thrilled Africans as far away as Zambia and prompted an editorial in The Post newspaper.

“Nigerian President-elect General Muhammadu Buhari’s message on corruption brings some hope for that country and our continent,” wrote The Post’s editor in a piece viewed 1,294 times.

The editorial continued: “We wish this was the message we were getting from our own President, Edgar Lungu. But it is not. If there is anything Edgar hardly talks about, it is corruption.

“What we have in Zambia today is a corrupt government... This is a government where those in leader-ship are the ones getting government contracts. They are the suppliers of government. Leaders and cadres of the ruling party are the ones doing business with government.

“If one scrutinises all government contracts, it will not be difficult to discover that almost all of them have been given to people connected to

the ruling party and its leadership.... When one criticises such practices,

he is seen to be hurtful, frustrated.“Look at how quickly those in the

leadership of government, from pres-ident to the lowest cadre, become rich! What is the magic? Where is the money coming from? It is from corruption, from bribes, from selling government policy. There is no other source of that money other than corruption.”

Africans surveyed by the group Afrobarometer in 2013 expressed similar views and many believe the situation has deteriorated in the last decade.

In the survey of 34 countries, 56 percent of the 51,000 people surveyed thought their governments were doing “fairly badly” or “very badly” in the fight against corruption. Only 35 percent said their govern-ments were doing “fairly well” or “very well”.

Among those most dissatisfied by official efforts to end corruption were Nigerians and Egyptians at the top, followed by Zimbabweans, Ugandans and Sudanese, Kenyans, Malians, Tunisians, Togolese, Tanzanians and South Africans.

Nigeria’s Anti-Corruption Pledge Resonates in Far-Off Zambia


37

View photoLeaders from Asia and Africa pose

for a group photo before the start of the Asian-African Conference …

Leaders of Asian and African na-tions called on Wednesday for a new global order that is open to emerging economic powers and leaves the “obsolete ideas” of Bretton Woods institutions in the past.

Their calls came at the opening of a meeting of Asian and African na-tions in Jakarta to mark the 60th an-niversary of a conference that made a developing-world stand against colonialism and led to the Cold War era’s non-aligned movement.

Among the leaders listening were Japanese Prime Minister Shinzo Abe and Chinese President Xi Jinping, who were expected to meet on the sidelines of the conference, the latest sign of a thaw in relations between the Asian rivals.

Sino-Japanese ties have chilled in recent years due to feuds over the two neighbours’ wartime past, as well as territorial rows and regional rivalry. Bi-lateral talks in Jakarta could promote a cautious rapprochement that began when Abe and Xi met at a summit in Beijing late last year.

Abe, in an apparent reference to China’s growing military assertiveness,

told the conference that the use of force by the “mightier” should never go unchecked.

The Japanese prime minister also said Japan had pledged, “with feel-ings of deep remorse over the past war”, to adhere to principles such as refraining from acts of aggression and settling international disputed by peaceful means.

It was not immediately clear if the remarks would satisfy China’s desire for Japan to acknowledge its wartime past, but a Japanese official told Reu-

ters Abe and Xi would meet.Xi had earlier told the conference

that “a new type of international rela-tions” was needed to encourage co-operation between Asian and African nations, and said the developed world had an obligation to support the rest with no political strings attached, the Xinhua news agency said.

New World OrderIndonesian President Joko Widodo,

the conference host, said those who still insisted that global econom-

ic problems could only be solved through the World Bank, International Monetary Fund and Asian Develop-ment Bank were clinging to “obsolete ideas.”

“There needs to be change,” he said. “It’s imperative that we build a new international economic order that is open to new emerging economic powers.”

The IMF and World Bank were at the center of the post-World War Two monetary order created by the United States and Europe at the Bretton Woods Conference in New Hampshire in 1944.

Widodo made no mention of the China-backed Asian Infrastructure In-vestment Bank (AIIB) that is seen as a competitor to the Western-dominated World Bank and Asian Development Bank, but Indonesia is one of nearly 60 countries that have offered to be founding members of the AIIB.

The United States and Japan have not thrown their support behind the bank, which is viewed as a threat to U.S. efforts to extend its influence in the Asia-Pacific region and balance China’s growing financial clout.

Zimbabwean President Robert Mug-abe told the conference that Asian and African countries “should no longer be consigned to the role of exporters

of primary goods and importers of finished goods”.

He called it a “role that has his-torically been assigned to us by the colonial powers and starting from the days of colonialism”.

Indonesia invited heads of state and government from 109 Asian and African countries, but according to a conference official, 21 leaders turned up, which commentators have said shows the group is no longer relevant.

The world order has changed dramatically since nearly 30 heads of state gathered in 1955 in the Indo-nesian town of Bandung to discuss security and economic development away from global powers embroiled in the Cold War.

Together they accounted for less than a quarter of global economic output at that time, but today they contribute to more than half of the world economy. Many of the Bandung countries, such as China and India, are now themselves at top tables like the Group of 20 and wield significant economic power.

Widodo said the group may be meeting in a changed world but still needed to stand together against the domination of “a certain group of countries” to avoid unfairness and global imbalances.

DiplomaticZonewww.businessjournalng.com

Xenophobia Row Exposes Rivalry Between Nigeria, South AfricaJoe Brock & Nqobile Dludla

The recall of Nigeria’s top diplomat after a spate of xenophobic attacks in South Africa follows several similar spats that expose the two countries’ deep

rivalry for economic and political dominance in Africa.

Nigeria’s Acting High Commission-er to South Africa Martin Cobham said he had been “invited” to Abuja to discuss this month’s anti-immi-grant attacks in South Africa, which have killed at least seven people.

Televised images of armed gangs attacking immigrants and looting for-eign-owned stores in Johannesburg have sparked a backlash in Nigeria, where hundreds protested in front of shops owned by South African brands like MTN and Shoprite.

South Africa’s foreign ministry called Cobham’s recall an “unfortu-nate and regrettable step”, before taking a swipe at Abuja for its own record on protecting foreigners.

Last September, a church hos-tel collapsed in Lagos, killing 115 people, most of them South African. Nigeria was criticised for its slow response to the disaster and what some saw as a haphazard rescue effort.

“It would be curious for a sisterly country to want to exploit such a painful episode for whatever agen-da,” a foreign ministry statement said in response to Cobham’s recall.

“We did not blame the Nigerian

government for the deaths and more than nine months’ delay in the repa-

triation of the bodies of our fallen compatriots.”

Such tit-for-tat slights are becom-ing increasingly common.

Weeks after the hostel collapse, South Africa seized $9.3 million from a private jet carrying two Nigerians, funds Abuja said were for a legiti-mate arms deal. South Africa said the deal was being conducted without relevant permits.

Abuja accused South Africa of xenophobia when Nigerians were deported after staff at Johannesburg airport believed their yellow fever certificates were fake. Arik Air, Nige-ria’s biggest airline, briefly canceled flights to South Africa.

CannibalsNigeria banned 2009 film “District

9”, a hit movie directed by a South African that depicted Nigerians as cannibals, criminals and prostitutes who had sex with aliens.

Rows over Hollywood movies and yellow fever certificates are reflective of a more serious battle for economic dominance and control over Africa’s representation on the global stage.

“It’s no secret that Africa’s would-be superpowers don’t like each other very much,” Analyst Simon Allison wrote in a column in the Daily Maver-ick, a leading South African political online newspaper.

“For all their lofty talk of unity and pan-Africanism, both Nigeria and South Africa are actually locked in a fierce struggle to be sub-Saha-ran Africa’s pre-eminent superpow-er.”

Nigeria overtook South Africa as

the continent’s biggest economy last year after re-basing its GDP. Pretoria said the numbers reflected Nigeria’s larger population and not the sophistication of their respec-tive economies.

“Despite what was said publicly, Nigeria’s rebasing was resented by the South African government,” a Pretoria-based Western diplomat told Reuters.

Diplomats say that when South African politician, Nkosazana Dlami-ni-Zuma, the ex-wife of President Jacob Zuma, won a close race to chair the African Union Commission in 2012, Nigeria strongly backed her opponent.

Both countries are also lobbying for a permanent position to repre-sent Africa on the United Nations Security Council.

Given their political and eco-nomic heft -- together, the two economies are larger than the rest of sub-Saharan Africa’s combined -- relations between South Africa and Nigeria could be decisive for the future of a continent of 1 billion people.

“Nigeria and South Africa are like two prisoners in the same cell of poverty, inequality and bad leader-ship,” Nigerian writer and political commentator, Elnathan John told Reuters.

“Together, they could muster the strength to break their bonds and overpower the jailer but instead they spend time feuding with each other in a needlessly fractious relationship.”

Jacob ZumaSouth African President

Muhammadu BuhariPresident-Elect, Nigeria

African, African Nations Challenge ‘Obsolete’ World Order


38 Sportswww.businessjournalng.com

The fight on May 2 between Floyd May-weather Jr. and Manny Pacquiao is one that boxing fans and writers have sought more than

any other in recent years, even though both fighters have passed their respective peaks.

But no matter the occasion remains massive, what with May-weather’s status as the highest earn-ing athlete in sport, the fact he is only two fights away from matching Rocky Marciano’s 49-fight unbeaten record, and the veneration accorded Pacquiao as a national hero in the Philippines.

Then there is the bad blood that exists between Pacquiao’s trainer, the widely respected Freddie Roach, and Mayweather’s father, Floyd Mayweather Snr., who will be in his son’s corner.

Some of the hype surrounding the fight has gone as far as laying claim to it being the biggest in the history of boxing.

While, yes, the projected $300 million the fight will generate undoubtedly qualifies it as the most lucrative fight there’s ever been in boxing, in terms of its wider significance and impact, it pales in comparison to some of the classic fights of the past.

Mayweather Vs Pacquiao: The $300m Fight of History• The Most Lucrative Fight Ever-The Greatest?

Mayweather and Pacquiao at a news conference before their historic $300m fight on May 2, 2015.

The NBA announced recently that it will play its first ever exhibition game in Africa on August 1 at Ellis Park Arena in

Johannesburg, South Africa.Team Africa will tip-off against

Team World and will feature two-time NBA All-Star, Luol Deng, born in South Sudan, as its Captain. The Miami Heat star will lead a roster made up of first and second generation African players.

Team World will be led by eight-time NBA All-Star, Chris Paul of the Los Angeles Clippers.

The game will be hosted in aid of Boys & Girls Clubs of South Africa, SOS Children’s Villages Association of South Africa and the Nelson Mandela Foundation.

I Love This Game! NBA Unveils First Game in Africa Aug 2015


39

May 04 - 10, 2015

TheLanternPRINCE COOKEY0802 308 [email protected].

Business Journal Newspaper is published weekly by Egelon Communication Company. Suite B2, Glory Shopping Complex, 229, Ikotun-Idimu Road, Council Bus-Stop, Idimu, Lagos. Abuja Bureau 08035977833 PH Bureau: 08099573476 Phone: 08023088874, 07058919138. Email: [email protected]. Publisher/Editor-in-Chief: PRINCE COOKEY.

“The unemployment situation in Nigeria currently has reached a level of national crisis. This is because in economics, if an economy records 5 per cent unemploy-ment, you can say there is full employ-ment, but once it is 30 per cent and above, it is crisis.”

Prof. Akpan EkpoDirector-General West African Institute for financial

and Economic Management (WAIFEM)

Last week, Indonesia stood its ground on its declared war on hard drugs through the firing squad execution of eight convicted drug offenders despite global

appeals for clemency. The eight-4 Nigerians, 2 Austra-

lians, 1 Brazilian and 1 Indonesian paid the ultimate price for daring to challenge the Death-For-Drug-Deal-ers-Law in Indonesia.

For months, the international media followed the death penalty on the convicted drug dealers and the ensuing campaign to free them from violent death.

First, the appeals came from their concerned home governments, and later, from global citizens and institutions opposed to the death penalty.

Then, in the early hours of April 29, 2015, Indonesia carried out the executions, clearly defying all the appeals for mercy and once again, restating its commitment to punish drug peddlers via death penalty.

Natural EmotionAs human beings, many felt pity

for the eight men. But for some, they deserved what they got.

The natural emotion was bent on giving them a second chance to amend their fractured lives for good after a long spell in jail in the course of the judicial process leading to their conviction. The second emo-tion was the mystery and sanctity of death over nothing but possessing and peddling drugs.

Unfortunately for the eight men, the Government of Indonesia applied the Law of Indonesia on Hard Drugs without Human Emotion. And they died!

Why Hard Drugs?After the emotions came the ques-

tion: why hard drugs?Over the years, and despite every

effort by governments and institu-tions around the world, a number of men and women, driven by factors unknown to humanity, believe that transporting and peddling hard drugs is the only way to make a living.

Their weird belief has propelled them to defy all warnings, all dan-gers and all laws across borders, to engage in their illicit drug deals to the detriment of certain citizens in many countries.

Indeed, the debilitating effect of hard drugs has compelled many nations to initiate strict legislations to counter the drug trade to protect vulnerable segments of their popula-tion from self-destruction.

Unfortunately, for such govern-ments, the drug barons always have their way, either legally or illegally.

The Sweet in Hard DrugsWithout any doubt, there is sweet-

ness in hard drugs as this report from the United Nations Office on Drugs and Crime (UNODC) clearly illustrates:‘In 2007 and 2008, cocaine was used by some 16 to 17 million people worldwide, similar to the number of global opiate users. North America account-ed for more than 40 per cent of global cocaine consumption (the total was estimated at around 470 tons), while the 27 European Union and four Eu-ropean Free Trade Association countries accounted for more than a quarter of total con-sumption. These two regions account for more than 80 per cent of the total value of the global cocaine market, which was estimated at $88 billion in 2008.’

Paying the PriceIt is on record that not only the

peddlers pay the price. Those who try to stop them also pay the price.

On a recent visit to the Nigeri-an Drug Law Enforcement Agency (NDLEA) in Lagos for visa documen-

tation, l was rudely confronted by faces pasted on a huge notice-board at the entrance of the main building.

Those were innocent faces of NDLEA officers killed by drug dealers or missing-in-action in the course of their duty to stop the drug barons and save society from drug-induced mental breakdown. These men and women, of various ages, and from

various parts of the country, paid the price.

The Nigeria in Indonesia Execution

Of the eight drug offenders executed by Indonesia, four were Nigerians! Not an Olympic or Commonwealth Gold Medal. It is an embarrassment to Nigeria!

The Nigerian government has tried over the years through the NDLEA to educate and stop Nigerians from peddling in hard drugs--the govern-ment failed. As they’d say, in Naija, the people are always ahead and faster than the government.

As hard as the government tried and continues to try, the drugs barons always have their way, until one or two are caught and paraded before the cameras.

What Next?The men have died. So-what next

for Nigeria?Despite the operational challeng-

es, including killing and kidnapping of its operatives, the NDLEA deserves our collective support to appreciate their efforts and elevate their spirits beyond the challenges.

The NDLEA deserves more fund-ing, human capital capacity, strategic training and high-level equipment to operate more effectively and save the nation from the Indonesia scenario.

Last time, it was in Singapore. Last week, the theatre of drug death moved to Indonesia.

Where will it reappear next?

The Indonesia Executions

Main Global Cocaine Flows (2008)

Global Heroin Flows from Asian Points of Origin

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