business day

60 Pages·2017·9.68 MB·English

businessday mark et monitor
Commodities NSE Bitcoin Everdon Bureau De Change FMDQ Close
BUrSe $n6t5 O.6il0 BNNie1gs3tg8lee0 s t G a i n +e2r.85pc BTNo2itg1ag7l.e6s t L o s e -r4.98pc N4,078,840.34 +5.56pc $-N B3U6Y0 . 0 0 3 S6E3L.0L0 FMOaRrEkIeGtN EXC H A N SGpEot $/N T R E3AMS UR Y B I L6LMS 5 Years FGN1 B0O YNeaDrSs 20 Years
Cocoa Powered by £-N 497.00 506.00 I&E FX Window 360.25 0.83 -0.13 -0.04% 0.00% 0.12%
42,148.40 0.38
US $2,146.00 €-N 438.00 448.00 CBN Official Rate 306.00 15.22 15.57 13.54% 13.71% 13.45%
Nigeria-South Africa Chamber embarks on trade mission to South Africa
...Page 4
NEWS YOU CAN TRUST I **WEDNESDAY 21 FEBRUARY 2018 I VOL. 14, NO 550 I N300 @ g
US-based PE firm Milost Analysts dispel fears over CBN’s
circular on capital generation,
dividend payout ratio
said eyeing Unity Bank
IHEANYI NWACHUKWU
E
arly this week, stakehold-
ers and investors in the
Nigerian financial market
HOPE MOSES-ASHIKE & with the matter confirmed to vices firm, Japaul Oil. tion,” the source added. woke to a frenzy following the re-
LOLADE AKINMURELE BusinessDay. “A deal is in the works for Unity’s share price fell 9.2 lease of a circular by the Central
If a deal goes through for Unity bank and a due diligence percent to N1.48 as of Tues- Bank of Nigeria (CBN) titled “Re:
M
ilost Global, a Unity, it would be the third process is ongoing,” a source day, February 20, according to Internal Capital Generation and
New York based investment made by Milost in told BusinessDay on condition Bloomberg data. The tier 2 lender Dividend Payout Ratio”.
private equity 2018 alone, following the acqui- of anonymity. has a market capitalisation of Contrary to earlier jitters that
firm is in Nigeria sition of luxury real estate player, “They (Milost) flew into the N17.8 billion and its one-year trailed the release of the circular,
to close the ac- Primewaterview limited for $1.1 country last week and are cur- return of 78 percent is among the many analysts yesterday allayed
quisition of tier-two lender Unity billion (N396 billion) and a $350 rently holding talks with stake-
bank plc, two sources familiar million facility for maritime ser- holders for a possible acquisi- Continues on page 4 Continues on page 38
GenCos fret over FG’s inclusion of
Azura IPP in N701bn power guarantee
… Azura allays fear of possible default
Bulk Electricity Trader (NBET)
ISAAC ANYAOGU
of its obligation to pay for power
C
oncerned that their supplied to the national grid in
share of the pie could December by Azura.
be significantly re- This situation could open old
duced, power genera- wounds as the inability of elec-
tion companies are fretting over tricity Distribution Companies
the decision of the Federal Gov- (DisCos) to settle their market
ernment to include the Azura invoice led to power Generating
Edo IPP among beneficiaries of Companies (GenCos) threaten-
the N701billion power guaran- ing to shut down power plants.
tee fund announced last year. The Federal Government per-
BusinessDay learnt that this suaded the Central Bank to set
decision was to forestall a pos-
sible default by the Nigerian Continues on page 38
Nigeria dealmaking off to
L-R: Amaju Pinnick, president, Nigeria Football Federation (NFF); Gianni Infantino, president, FIFA; Akinwunmi record start as 2018
Ambode, governor, Lagos State, and Francis Peters, deputy managing director, AITEO Group, during the deals cross $1bn P. 33
Aiteo/NFF Awards in Lagos. Pic by Olawale Amoo
2
BUSINESS DAY Wednesday 21 February 2018
3
Wednesday 21 February 2018 BUSINESS DAY
4
BUSINESS DAY C002D5556 Wednesday 21 February 2018
NEWS
Reps query NEMA boss over Nigeria-South Africa
Chamber embarks
N9.6bn Libya returnees’ fund on trade mission to
South Africa
the committee, observed that According to the commit- accounted for.
KEHINDE AKINTOLA, Abuja
MICHAEL ANI
all the “documents submitted tee, the director general could Members of the commit-
T
he House of Rep- by the agency contradicted not convince lawmakers on tee claimed that while there The chairman of the Nige-
resentatives com- his (DG’s) explanations and how about N8 billion from the were documents showing that ria-south Africa Chamber
mittee on emer- he could not account for how service wide votes was utilized NEMA had received funds of Commerce (NSACC) ,
gency and disaster about the money was expend- by the agency, adding that Foluso Philips, is leading a trade
management on ed.” ecological funds were also not Continues on page 38 mission of Nigerian firms visiting
Tuesday queried the utilisation South Africa for the first NSACC
of N9.6 billion spent by Na- trade mission since the inaugu-
tional Emergency Management ration of the new president of
Agency (NEMA), drawn from South Africa, Cyril Ramaphosa.
Service Wide Votes and reha- The mission will take place
bilitation of Libya returnees. from 11th- 17th March 2018 and
Breakdown of the funds to will bring together leaders in
be accounted for include: N8 business, to focus on creating
billion released from the ser- opportunities for Nigerian busi-
vice wide votes; money drawn nesses, as well as strengthening
from the ecological funds as Nigeria’s economic and trade re-
well as N1.6 billion approved lationships with South Africa. The
for resettlement of Nigerian relationships that are born out of
returnees who were evacuated these meetings will foster incred-
from Libya. ible partnerships for Nigeria and
The Committee passed South Africa, economically and
the resolution during the culturally for years to come.
2017/2018 budget defence of The mission begins with a
NEMA, which was presented stop in Johannesburg on Mon-
by Mustapha Maihaja, NEMA day 12th March 2018, where
Director General. there will be excursion and
The lawmakers observed media coverage for delegates by
that out of total sum of N1.6 South African Tourism. This will
billion released to NEMA, only be followed by a business semi-
N1.8 million was utilized leav- nar by the Gauteng Growth De-
L-R: Abdullahi Abdu Zuru, vice chancellor, Usmanu Danfodiyo University, Sokoto (UDUS); Kennedy Uzoka,
ing the balance of over N1.42 GMD/CEO, United Bank for Africa (UBA) plc; Aminu Tambuwal, governor, Sokoto State, and Ibrahim Puri, velopment Agency in Sandton,
billion largely unaccounted for. executive director, North, UBA plc, when the management of UBA led by GMD/CEO paid a courtesy visit to the Johannesburg on Tuesday, 13th.
Ali Isah, Vice chairman of Governor of Sokoto State after the commissioning of the pedestrian bridge built and donated to the Usmanu The visit will continue with a
Danfodiyo University by the UBA Foundation in Sokoto on Monday
seminar on “Nigeria Economic
Outlook 2018” by South Africa-
US-based P.E firm Milost said eyeing Unity... first economic recession in a the acquisition, another source Nigeria Chamber of commerce
quarter of a century. told BusinessDay. in Johannesburg, and a busi-
Continued from page 1 vices, PWC, said. However, things have started Unity bank has some 240 ness seminar by Western Cape
top three banks with the highest “Ultimately the interest of to look up since the rally in oil bank branches. Investment and Trade Promo-
return in the period. depositors and other stake- prices and improved dollar According to its website, tion Agency (WESGRO) in Cape
The bank’s net income in the holders are more critical than liquidity. Milost says the purpose of its Town on Thursday, 15th March.
three months through Septem- who owns the bank so this is The NPL ratio of deposit African tour among other things These sessions will unite busi-
ber 2017 was N352 million. a positive development,” Oye- money banks stood at 15.18 in Nigeria is to meet up with the ness executives to illustrate an
According to its full-year dele said. percent as at September 2017 management of our portfolio unprecedented strength of eco-
2016 financial report, Unity’s Oyedele noted that the eco- from 10.13 in December 2016, companies such as Primewa- nomic growth, and showcase the
shareholding structure is domi- nomic challenges of the past while their loans and advances terview Holding Nigeria Limited business and job opportunities
nated by bad bank, Asset Man- few years have increased the declined by 1.3 percent to recently acquired for $1.1 bil- available to both interdependent
agement Corporation of Nige- vulnerability of some banks N15.9 trillion in September lion, Femab Properties Limited; economies.
ria (AMCON) which owns 4.02 and other businesses. 2017 from N16.1 trillion in De- Japaul Oil & Maritime Services The break in between these
billion shares and accounts for This is reflected in the high cember 2016, data made avail- Plc to discuss concluded deals sessions will serve as an op-
34.42 percent of total outstand- non-performing loan ratio in able by the Nigeria Deposit and other current transactions portunity for more personal,
ing shares. the banking sector. The chal- Insurance Corporation (NDIC) among those includes the clos- one-to-one interaction between
Pan African Capital Nomi- lenges also reflect in the de- indicated. ing of a large Nigerian bank ac- those at the event. These smaller
nee holds 1.48 billion shares, pressed stock values of listed Milost’s senior leadership quisition which was previously scale discussions will enable
which works out to 12.67 per- banks, however the long term team that is headed by Man- announced. a more critical and mutual
cent, while Thomas Etuh, IBAD fundamentals of the sector aging Partner & CEO, Kim Milost last year announced understanding of culture and
Limited, and EL-Amin Ltd hold remains promising. Freeman and Senior Partner & a $255 million financing term economy, which would not be
1.05 billion, 717.7 million and Most financial and invest- Chief Investment Officer Solly sheet for capital Bank of Mongo- possible in presentation set-
615.88 million shares respec- ment analysts believe that S. Asibey landed in Nigeria lia Ltd and Soyombo Insurance tings. These steps will help not
tively. Their holdings work out Nigerian banks would have on Sunday February 18, 2017, Ltd, their sister company, the only build bridges between
to 9.01 percent, 6.14 percent to shore up their capital base accompanied by Isilo Capital financing is expected to be com- companies but initiate the stra-
and 5.54 percent of total out- this year, which could result Partners’ team that is led by prised of $55 million in equity tegic partnerships that can
standing shares. in increased rights issue, IPO, CEO Tiny Diswai, on a one capital and $200 million in debt. mutually benefit the growth of
It is no surprise that a foreign mergers and acquisitions. week visit. Milost will also be meeting parties involved.
private equity firm is interested Nigerian banks have been Milost had earlier showed with government officials that On Friday, 16th, there will be
in acquiring a Nigerian bank, battling with the problem of interest in the bank which has include the Central Bank, Nige- another excursion and media
according to Taiwo Oyedele, huge Non-Performing Loans over 250 branches, and has now rian Stock Exchange, the Ooni coverage for delegates in Cape
head of tax and regulatory ser- (NPLs) occasioned by Nigeria’s returned to Nigeria to conclude of Ife among others. Town by South African Tourism.
5
Wednesday 21 February 2018 BUSINESS DAY
6
BUSINESS DAY Wednesday 21 February 2018
7
Wednesday 21 February 2018 BUSINESS DAY
8
BUSINESS DAY Wednesday 21 February 2018
9
Wednesday 21 February 2018 BUSINESS DAY
10
BUSINESS DAY C002D5556 Wednesday 21 February 2018
COMMENT
comment is free
Send 800word comments to [email protected]
SMALL BUSINESS HANDBOOK State-owned microfinance banks fail to exploit captive markets
efforts, most of which are anchored It is actually hard to government worker.It is actually hard to good advice and counsel from any-
on cash hand-outs given to the people. contemplate that a microfinance bank body except those who are subject to
contemplate that a
But they are typically short term in na- owned by a state government does not them and invariably have little or no
ture; hardly consistent, and generally microfinance bank owned by control the home appliance finance innovative opinions to contribute. This
lacking in the staying power required and utility payments that constitute arrogance of power is often put to work
a state government does not
of any potent remedy for a multi- much of the activity on the accounts as a ploy to ward off critical reviews
dimensional problem like poverty. control the home appliance of the workers.They fail so woefully to and opinions. That way, we are able to
EMEKA OSUJI
What we find is that microfinance pro- see the opportunities entailed in this significantly mask the deep gullies of
finance and utility payments
Dr Emeka Osuji grammes are lunched by subnational captive market and in harnessing it. For error and incompetencethat are often
School of Management and governments, sometimes with much that constitute much of the commercial banks to stoop so low to at the base of many political, economic
Social Sciences
Pan Atlantic University fanfare, and huge sums are named as activity on the accounts of round off workers in the states, with all and social decisions. This also helps
seed fund for the programme. Shortly the problems associated with their very to chip away on the good will of the
Lagos. [email protected] @Emyosuji
afterwards, and typically after the first the workers low pay, and still make tons of money, is leadership. As a result, despite efforts
wave of publicity accompanied most a major indictment of the microfinance to achieve success, the system lags
O
ver privileged undera- probably by a few cash hand-outs, banks owed by state governments.How behind because it is fraught with error.
chievers! That was the the curtain falls. Quite often also, this ing, and particularly in combination with could they be so unimpactful that com- This leaves the people in frustration as
term we used to desig- wave of cash hand-out is creatively the Law of large Numbers. They seem to mercial banks would come in to provide thing that ordinarily work elsewhere
nate the more privileged choreographed to fall on party loyalists be unable to relate poverty to lack of eco- workers of the state with home equip- seem not to work for us.
children of the rich, who and other collaborators. Thereafter, nomic activity, mostly occasioned by lack ment leases, hire purchase facilities and When, in 2005, the Central Bank
allowed us, their poorer and less privi- everything will die down – not just the of finance. If they did, they would have all manner of microfinance services of Nigeria introduced the micro-
leged counterparts to beat them in class noise but the entire programme. The seen that if there was any microfinance while the state-owned banks wither? finance programme as a poverty
and other endeavours at school. It was a funds handed out to loyalists, which institutions in Nigeria that would suc- Part of the problem is that those in reduction strategy, there was wild
most derogatory term, probably venge- should not have been so in the first ceed, it would be those owned by state government are intolerant of critical excitement. It was felt that at last,
ful and spurred by resentment, we used place, is never recovered talk less of be- governments. They would have seen the opinion, especially when it comes some formal strategic direction
as if to get back at them for being born ing recycled to other needy people. It power in numbers and how to use them from non-party members. As a result, was established to drive the war
into rich homes while the rest of us were is often a one-off event aimed at a par- to tackle poverty. much wisdom is shut out from the af- against poverty. It was felt that for
not. That was “bad belle” at work during ticular group of people, and once they Sadly, these states appear to have cut fairs of government. At the same time, once, since the failed Rural Banking
those youthful days. That term seems are served the programme vaporises. short their wisdom and vision limiting those that are part of government are Programme of 1977, something very
to still be appropriate today, not only Evidently, such programmes lack the them to the establishment of the banks. careful not to hold contrary view, deep was being done to bring bank-
for rich kids who fail to hold their own, integrity and transparency, which are They are unable to see the huge captive even if superior, so as not to be seen to ing services to the grassroots. And it
despite all their family endowments, critical ingredients of enduring public market that is entailed in the large num- criticise a government of which they was expected that enclaves such as
but also for certain institutions in our programmes and good governance. ber of civil servants paid by the states. are a part. Consequently, government the civil servants of states naturally
polity – the state-owned microfinance The more difficult part to under- They do not see the instant success, often becomes impervious to good fitted the requirement for microfi-
banks that are underperforming in the stand is that some state governments which the banks would become if they ideas, creating the impression that they nance services. They are already a
midst of privileges entailed by their state had the wisdom and vision to set up attempted to harness the resources in the are less intelligent than those outside block, akin to the Groups that micro-
ownership. their own microfinance banks but do states. If they did, every state would own government. There is no such thing finance institutionshelp to form for
There are not many states in Nigeria not appear to know what to do with and operate a successful microfinance as lower intellect among government ease of dealing with clients. Sadly,
that have truly seriously focused on them, as though their vision was not institution. Instead, what we have is that officials. What you have is a system in the state-owned microfinance banks
the microfinance strategy of poverty accompanied with mission. Their some state governments make a specta- which political expediency and cor- have failed to profit from the inher-
reduction, to any news-making extent. wisdom appears to have ended with cle of cash hand-outs done without the rectness limit the ability of the intel- ent advantages the captive markets
Of course there are several poverty the launch of the banks. Strangely, they input of their microfinance banks. ligent to apply his intellect. of civil servants offeredfor effective
reduction efforts going on in the states. do not seem to understand the power Imagine that the salaries of all workers Besides, there is so much arrogance and profitable microfinancing.
At one point or the other, most subna- they could wield over poverty if those are paid into the state microfinance bank. associated with power in our present
tional governments have made public banks were used according to the Imagine also that this bank finances all system of government, which makes Send reactions to:
spectacle of their poverty reduction time-tested principles of microfinanc- the household requirements of all state the ruling class, often quickly, reject [email protected]
OSEBUMERE ODIA To sustain the infrastructure renewal in Lagos
Osebumere Odia is a Lagos-based
Economist and technopreneur
more productive. In addition, social and value and potential in the unbundling of government to become more impactful at transformers or repair of damaged trans-
It is pretty obvious now, that there is commercial activities in Oshodi will cre- NEPA/PHCN. We can only imagine by how restoring infrastructure. Poor taxation ef- formers in their neighborhoods. Others
a deliberate massive infrastructure ate livelihoods for many people includ- much, regular and predictable power will ficiency has meant that despite the famed complain that they are still required to
renewal drive across Lagos. What ing some who may have otherwise been impact the businesses of artisans and small IGR success over the years, only a small pay levies before their earth roads are
may not be so obvious are the deeper disposed to crime. The overall economic enterprises including hair/beauty salons, fraction of taxable adults and businesses graded, while others still complain about
implications of this drive, which we will multiplier will be considerable. business centers, bakeries, hospitals, su- in Lagos actually shoulder the entire tax lack or scarcity of social services in their
try to highlight with a few examples. But If you live in the Ogba-Agege axis, permarkets and dozens more. burden of the state. neighborhoods including health centers,
more importantly, we will shed some chances are that you spend an average Elsewhere, Lagos is investing in secu- In contending with the challenge of and even police posts.
light on the imperative of government of six to seven hours in traffic everyday rity. There have been huge investments better efficiency in its taxation regime, Lagos needs to revive the use of con-
becoming more efficient in generating the especially if you work on the Lagos Is- in street lighting and security-bolstering Lagos must embrace more creativity. It spicuous outdoor hoardings beside road
resources to fund these projects. land. The reason is simple. Population equipment, facilities and manpower. A must strive to be more systematic and construction works, which proclaim that
For many years, Oshodi was best growth on that axis has long exploded Lagos Security Trust Fund has also seen painstaking in its enumeration of tax- “tax payers’ money” is “in action”. Citizens
characterized by traffic jams, crime and way beyond what the infrastructure in the corporate world contributing funds able citizens, businesses and properties. must be increasingly prodded to see the
disorder. Today, Oshodi is undergoing that neighborhood can cope with. As and equipment towards synergizing gov- In so doing, it needs to avidly deploy impact of their taxes, if not directly on the
an overhaul on a huge scale. It is being the population has surged so has the ernment efforts. A “neighborhood watch” technology. Modern GPS systems can streets in which they live, then at least in
turned into a modern transportation number of motor vehicles and physical initiative, which is a community policing assist with property identification and the major access roads that connect their
hub, defined not only by connectivity structures in that axis. The Agege-Ogba strategy, was inaugurated not long ago. enumeration for instance. Instructively, neighborhoods and other aspects of life
but also by convenience. In due course, axis is a nightmare to traverse on a typi- The above and more are some of the recent news reports indicate that Lagos in the state that impact them directly and
Lagosians needing to be transported to cal workday. elements that have long helped to set Lagos will now employ software in ensuring indirectly.
any part of Lagos may simply converge Today, a process to redress that prob- apart from its contemporaries as a state that that sales taxes deducted from patrons Government should also show citi-
at Oshodi. Because it is a transportation lem is ongoing. As was done recently is truly working. These achievements are of hotels and entertainment outlets are zens pictorial visualizations of completed
hub, it is innately a commercial melting on the Ajah axis and the Abule-Egba largely attributable to skillful generation of promptly remitted to government. Its projects. Doing so could considerably as-
pot. In addition to the intelligent net- axis, respectively, both of which shared revenue internally. sundry ministries departments and suage not only the inconvenience associ-
work of road exchanges that are being similar problems, a flyover is undergo- The recent infographic report by agencies need to join forces to ensure that ated with the ongoing construction, it will
constructed with Oshodi as the locus, ing frenetic construction on the Agege BudgIT the civil society watchdog regard- constant enumeration of people, busi- significantly whittle away at the resistance
therefore, high rise structures are also axis of Lagos. When concluded, it will ing the capacity of states to meet recurrent nesses and institutions produces reliable people may have to paying taxes.
springing up. By the time the developers considerably enhance the commuting expenditure obligations on the basis of their harmonized data not only for taxation but Paradoxically, despite its efforts at
take their leave, Oshodi would have been experience in that axis, and mitigate the internally generated revenue is instructive. also for full scale development planning. infrastructure renewal, Lagos clearly still
linked directly to the Lagos International congestion challenges. Of Nigeria’s 36 states, Lagos was at the head Government also needs to more has a huge unmet need in these areas.
Airport through the International Airport Besides roads, bridges and other of only 4 states which generate enough aggressively communicate its successes Huge investments are still required in
road, a road which is undergoing its own physical infrastructure, another area revenue internally to fund their recurrent to enable citizens better appreciate the such areas as roads, bridges, schools,
massive transformation into a 10-lane where the state is aggressively working expenditure obligations. connection between these successes healthcare, public transportation, security
expressway. The bedlam of old would to make a difference is power. The state Lagos, however, needs to better man- and the taxes which they are required and many more.
have been transformed into a modern governor, Akinwunmi Ambode has age and communicate its IGR regime for to pay. In so doing, government has a Hopefully, with an increasingly
transport interchange, not unlike Victoria vowed that round-the-clock electricity better outcomes into the future. duty to engage citizens who are irked by adroit taxation regime, government will
Station in London. availability would be achieved in the state Only last December, for instance, Mu- the fact that while they pay their taxes speedily redress these areas where it has
There will be shopping malls, cafés, over the next 12 months, via what the dashiru Obasa, Speaker of the Lagos House and levies promptly, on the micro level, under-invested over the years, in so doing,
cinema halls, and lots of other commer- state calls the embedded power project. of Assembly lamented that only 300,000 development does not appear to get to serving as a beacon and inspiration to
cial outlets and conveniences in Oshodi. Essentially, it would be distributing inde- properties of the more than two million tax- them as rapidly as it ought to. There are other states in the Federation.
Creating order on the Oshodi axis will pendently produced power to residents able properties in Lagos, actually pay Land many especially in the more remote parts
by enhancing commuting efficiency in and businesses within the state. Use Charge in the state. Land Use Charge of Lagos who lament that despite paying
Lagos enhance the efficiency of economic When this eventually happens, is a property tax that if well consolidated their taxes, they are still required to pay Send reactions to:
transactions, making the economy far Lagos would have fully unlocked the across the state, ought to empower the such levies as “transformer levies” for new [email protected]