Federal government extends ban on international flights

Due to the COVID-19, the Nigerian government has extended ban on international flights in the country

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A warning sign advising users to be aware of their surroundings while playing a video game. Stefan Heunis/AFP via Getty Images

Electronic banking fraud in Nigeria: how it’s done, and what can be done to stop it

A warning sign advising users to be aware of their surroundings while playing a video game. Stefan Heunis/AFP via Getty Images

By Oludayo Tade, University of Ibadan

Six years ago, a cashless policy became fully operational in Nigeria. The aim was to encourage electronic transactions with a view to reducing the amount of physical cash in the economy. The logic was that this would minimise the risk of cash-related crimes.

But a major downside of the policy has been pervasive electronic banking fraud (e-fraud). Although the cashless banking system was designed to foster transparency, curb corruption and drive financial inclusion, it’s threatened by the growing perpetration of fraud.

About N15.5 billion was lost to bank fraud in 2018. About 60% of the fraud was perpetrated online owing to available internet-based and tech-rated banking services.

Our research investigated dimensions of electronic fraud in Nigeria. We found three: internal fraud carried out by banking staff; external fraud carried out by ordinary Nigerians; and collaboration between fraudsters and banking staff.

We found that inefficient supervision, non-performance of oversight by regional heads of banks, and poor follow-up on customers’ addresses (Know Your Customer) accounted for the fraud that took place.

Our study provides the banking industry, banking public and investors with critical pointers on how to reduce fraud.

Different types

Our study involved collecting data as well as conducting interviews with 30 people. These included victims of bank fraud, bank customers who did not subscribe to the cashless policy and fraud detectives at the Economic and Financial Crimes Commission (EFCC).

These were the common patterns we uncovered.

Insider fraud: By insider, we mean those working with banks or those in a relationship with account holders. Here, the fraud was exclusively executed by members of staff in the banking system who exploited the strategic position they held in the system and their grasp of how it works. Banking institutions and customers were their victims.

An example we came across during our research was the case of a N90 million (US$452,261) fraud perpetrated by an account officer of a major eatery in Lagos State. The job of this account officer was to collect the eatery’s takings and deposit them at the bank. A fraud detective told us that:

As the account officer he would collect money on a daily basis and was expected to credit the company’s account. However, he would collect money on Monday and lodge it and collect on Tuesday and not lodge it. He was missing one day out. He did this continuously until he was able to rake in N90 million. At this time, when the eatery management raised the alarm on their account, he ran away and could not be found. We however used his sister to arrest him. We were only able to recover N8 million naira from him. He had used part of the money to organise his wedding, had a baby and almost completed a four-bedroom bungalow at another area in Lagos.

Bank fraud is often successful because many Nigerians don’t subscribe to transaction alerts. The eatery management trusted their account officer but did not know that he was dishonest.

Outsider fraud: These perpetrators were external to the banking system. They thrived on their internet skills and sometimes on their understanding of the victims’ routine and identity.

An example we came across was the fraudulent use of bank verification numbers (BVN). These were made compulsory by the Central Bank of Nigeria in 2014. All bank account holders had to undertake biometric registration. The intention was to ensure security and check fraud.

But fraudsters have found a way to cheat the system by sending bank customers false emails asking for their bank verification details. As one victim explained to us:

I needed to make some transactions and I headed for my bank. I had called my account officer ahead of time. On getting to the bank, I connected my computer and got a mail from a supposed same bank. I was asked to click on a link and supply my BVN details for update of my account or face service suspension on the account. I just clicked the link and supplied my details and behold, N1 million debit alert came on my phone within five minutes! I was shocked and devastated but before we could do anything they had withdrawn everything.

Collaborative fraud: This involved collaboration between bank staff and fraudsters outside the banking system. Banks and individual account holders were the victims. For example, bank staff could provide account details of customers to the collaborating fraudster.

Governance gaps

Despite this weak governance architecture, which is still not fraud proof, bank executives reported having in place mechanisms which had limited the incidence of fraud. One was sending out information to customers who subscribed to electronic alerts. Through this, banks contact and send anti-fraud messages to their customers.

Owing to reputational risk, banks try to refrain from public prosecution of erring staff. We found that banks adopted shaming as a mechanism for instilling discipline within their organisations while attempting to ease out “bad eggs” through flagging of their images on computers and across the banking industry.

There is a need to check fraud through customer awareness and financial literacy education.

While fraudsters continue to design new ways of working on customers’ vulnerabilities, Nigerian banks need to use the Cybercrime Act to prosecute offenders as a way to boost confidence in the banking sector and deter fraud in the future.

Oludayo Tade, Researcher in criminology, victimology, electronic frauds and cybercrime, University of Ibadan

This article is republished from The Conversation under a Creative Commons license. Read the original article.

African governments and the looming debt repayment crisis after Covid-19

It is almost a law of nature. Just as the female praying mantis eats her mate after copulation, so too can borrowers and lenders fall swiftly out of love. One minute they are sweetly wooing each other to consummate a deal. Then, the moment it is done, they are at each other’s throats.

So it is odd that African governments and their creditors have not yet fallen out. They have plenty to quarrel about. Africa’s debt crisis has been simmering for some time. Two years ago the imf was already anxious about a growing number of African countries in “debt distress” or at high risk of it. This crisis was brought to the boil by covid-19, which has caused economies to shrink and tax revenues to plunge. Governments have ramped up spending to fight the virus. Investors are scared. In recent weeks the bonds of nine countries have traded at prices indicating that they might not be repaid.

The imf and World Bank have lent emergency cash, but a financing gap of at least $44bn remains. Various bigwigs have called for debt relief, including Abiy Ahmed, Ethiopia’s prime minister, and Larry Summers, a former American treasury secretary. Yet neither borrowers nor lenders seem enthusiastic.

The g20 club of countries has agreed to suspend bilateral debt-service payments for the rest of this year for the world’s 73 poorest countries, if they ask. Yet uptake has been low. In seven weeks fewer than half of eligible countries have requested assistance. Only seven have been given it.

Struggling governments are not asking for help because they fear being seen as deadbeats. “We need to make sure we are protecting our hard-earned access to international capital markets,” says Amadou Hott, Senegal’s minister of economy. “The best way to do it is, at any cost, to protect our commitments with private creditors.” This, he adds, is the view of all the African finance ministers to whom he has spoken.

Most of the 21 African countries that have sold bonds abroad have done so for the first time only in the past decade. Long-term borrowing is even more recent, but in 2018 eight African countries successfully issued 30-year bonds. This borrowing is expensive. Interest rates on foreign-currency government bonds sold by African countries are roughly seven percentage points higher than those sold by rich countries, because investors see them as riskier.

Asking for help could confirm that view. Romuald Wadagni, Benin’s finance minister, writes that taking advantage of the g20 offer could be treated as a default by private creditors, even though they are not directly involved. Moody’s, a credit-rating agency, says it may downgrade its assessment of Cameroon, Pakistan and Ethiopia because they went for it. To avoid this fate, Senegal plans to shun the offer. Kenya says it will do likewise, because the small print would restrict its ability to borrow commercially.

Even if African countries were to take up the offer of help from bilateral creditors (these are usually governments or their export-finance arms), including the biggest of them all, China, they would still have other worries. Roughly a third of sub-Saharan Africa’s government debt is owed to private investors. Bondholders alone are owed $115bn. The mere act of asking private creditors for leniency would probably lead to a credit downgrade. And actually renegotiating repayment terms would probably be classed as a default, say rating agencies.

For the most troubled countries, such as Zambia, the point is moot. In 2012 it was able to borrow more cheaply than Spain. Now it is priced right out of the market and has hired Lazard, a financial advisory firm, to help it restructure its debt. Angola, which needs to hand over $500m to private bondholders this year and almost certainly more to China, has also begun talks.

But for countries such as Ivory Coast, Ghana and Senegal, which owe private creditors as well as g20 governments, the judgments are tougher. Stopping payments for a while would free up funds to fight the coronavirus. But after the crisis they will need cash from investors.

Under pressure from the g20 to offer debt relief, private creditors have come up with a grudging proposal. The Institute of International Finance, an industry group, has proposed allowing struggling governments to take a payment holiday. Afterwards, they would have to pay back everything they owe, including extra interest. This resolves little, since it would simply store up trouble, leaving weary countries with an even bigger mountain of debt to climb. And even in the short run it locks African governments into a catch-22. To have even a slim chance of avoiding being deemed in default, they will have to agree to new repayment terms that leave creditors no worse off than now. But if they ask, they risk a downgrade with no guarantee that private creditors will agree.

Vera Songwe of the un Economic Commission for Africa hopes to find another solution. She favours creating a new body that would borrow cheaply and then lend money to governments. However, it would need backers with deep pockets willing to guarantee that private lenders would not take a loss. It has found few volunteers.

There is not much time to act. African bond issuers face a wall of payments starting in 2022 (see chart). Many hope they are just experiencing a short-term cash crunch. But unless their economies rebound quickly—or they get more help from the rich world—a wave of defaults seems inevitable. If so, it may be better to take the hit and restructure debt now, while hoping that credit markets have short memories. Ken Ofori-Atta, Ghana’s finance minister, pointed out in a webinar hosted by Harvard University that rich countries were taking extraordinary measures to protect their economies, while telling Africans to stick to the rules. “You really feel like shouting: ‘I can’t breathe,’” he said. ■

This article appeared in the Middle East & Africa section of the print edition under the headline “Thanks, but no”

Buhari laments Covid-19 impact on Nigeria

Nigeria’s President Muhammadu Buhari has lamented the impact of the coronavirus pandemic on Africa’s biggest economy following stringent measures imposed to contain coronavirus outbreak.

In the capital Abuja, and the commercial hub Lagos, businesses were closed for more than four weeks before restrictions were eased from 4 May. Inter-state passenger travel is still banned across the country, while school and restaurants are closed.

President Buhari has said the country has no money to import food and urged farmers to get back to work to produce enough food for the country.

Mr Buhari said the increase in the number of coronavirus cases in the country was frightening.

The International Monetary Fund predicts that Africa’s economy will contract by 1.5% points in 2020.

Nigeria was to proceed to a second phase of easing restrictions last week, but the task force in charge of fighting the pandemic said the country was not yet ready for full reopening of the economy.

Mr Buhari opted for private Eid prayers in State House as opposed to the usual large celebrations he holds every year.

He urged Nigerians to follow the ministry of health’s guidelines to prevent the spread of coronavirus.

Nigeria’s Channel TV shared a video of the president speaking after Eid prayers at State House:

Nigeria has so far confirmed 7,839 cases of coronavirus including 226 deaths.

How to transition your offline business online

By Rabiat Mustapha

The world as we all know has gone digital. Everything is now been done online, businesses are not left out of this. In the business world where technology dominates, business owners are beginning to understand the impact of an online presence for their business and how this could improve their brand growth, survival and profitability.T

echnology base marketing strategy are been employed to keep business activities afloat and increase brand visibility. With the substantial increase in the number of active social media users, businesses can reach out to their target customers online in no time and with little cost by having an online presence and visibility. Below are steps on how you can transition your offline business online;


So you’ve decided to move your business online, who are your target customers? What are they interested in? Why should they buy from you? What value are you offering? Identify their demographics and behavior and determine how your product will fit into their lifestyle. Having knowledge about this will help you understand their needs/wants and how you could modify your product or service to suit their needs.


Check out your competitors online selling the same product or offering the same service as you. Identify their strategies; who are their customers? What niche do they dominate? How do they attract their customer? e.t.c. An analysis of what your competitors are doing will give you an insight into the opportunities and threats in your industry and how you can position yourself effectively to stay ahead.


Moving your offline business online means leveraging various social media platforms to reach out to you target market. First, you need to know what platform your target customers are more likely to utilize. Facebook, Twitter, Instagram, LinkedIn, PInterest are platform business owners could optimize in creating brand awareness for their business, expand their customer base and promote their activities.


Great content attracts the right audience who need your products and who are likely to patronize your business. Whatever content you create should be related to what product you sell or what service you offer. For instance, if you are a Financial Consultant and offer advisory service, you could create contents related to personal finance or on how people can invest their money with high return on invest within a specific period. When people see value in what you do, they are most likely to pick interest in your business profile giving you the opportunity to convert them into potential client.


Your offline and online business should be identified as the one brand. Creating an online space for your business does not translate to ditching your offline business, both should be integrated to enable you reach several audience and build a trusted and reliable brand. You can also get your online customers engage in your offline business or persuade them to visit your offline store.

Coronavirus strips Bitcoin of its ‘safe haven’ tag

The price of Bitcoin has plunged to its lowest level in 11 months, endangering hopes that it can serve as a safe haven asset during the worsening coronavirus pandemic. 

The cryptocurrency, whose advocates describe it as “digital gold”, fell as low as $4,832 per coin (£3,859) on Thursday according to CoinDesk, a 38pc drop from the previous 24 hours and a 53pc decline from the same time last month.

The sell-off accelerated rapidly following President Donald Trump’s announcement that the US would ban all incoming travel from continental Europe except for existing permanent residents.


By contrast, the price of one ounce of physical gold has risen by about 5pc over the past 24 hours and fallen by roughly 7pc over the course of a month, having advanced steadily by about 25pc over the past year. 

It came as the FTSE 100 plummeted to its lowest level since 2012, with stock markets across the world being pummelled by the economic waves made by the exponential spread of Covid-19.

Arcane Research, a cryptocurrency market analysis firm, said in a note: “It looks like institutional traders are taking a break from Bitcoin in this unstable period, with growing fear related to the coronavirus.”

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The company said that the sell-off was likely to be caused by stock market turmoil forcing traders to sell off liquid assets in order to keep their margin accounts above a certain level, with Bitcoin being an easy asset to shrug off.

Simon Peters, a market analyst at the online trading service eToro, told the Independent: “Previously seen as a possible safe haven in difficult times, investors now seem to be selling out to take back liquidity in case the coronavirus spreads even further. In a time of uncertainty, many investors might feel it is better to own cash or gold rather than more speculative cryptocurrencies like bitcoin.”


Bitcoin’s fans and boosters say that it is a better long-term store of value than precious metals because the mathematics that underlie the currency put an iron ceiling on the number of coins that can ever exist. But since its creation Bitcoin has been highly volatile, with enormous bubbles and price swings.

Anthony Pompliano, a well-known Bitcoin advocate, dismissed the sell-off as the short-term effect of “weak hands” panicking in a “liquidity crisis”, predicting that coronavirus-related fiscal stimulus from central banks would soon drive even more people to adopt the currency.

Bill Gates steps down from Microsoft board


  • Bill Gates is leaving Microsoft’s board, the company announced on Friday.
  • Gates co-founded Microsoft in 1975 with Paul Allen, who died in 2018.
  • Gates is among Microsoft’s top shareholders, owning 1.36% of shares, according to FactSet.

Microsoft announced on Friday that Bill Gates is leaving the board, effective Friday. Gates is also stepping down from his position on the board of Berkshire Hathaway.

“I have made the decision to step down from both of the public boards on which I serve – Microsoft and Berkshire Hathaway – to dedicate more time to philanthropic priorities including global health and development, education, and my increasing engagement in tackling climate change,” Gates said on LinkedIn. “The leadership at the Berkshire companies and Microsoft has never been stronger, so the time is right to take this step.”

“With respect to Microsoft, stepping down from the board in no way means stepping away from the company,” Gates said. “Microsoft will always be an important part of my life’s work and I will continue to be engaged with Satya and the technical leadership to help shape the vision and achieve the company’s ambitious goals. I feel more optimistic than ever about the progress the company is making and how it can continue to benefit the world.”


Gates co-founded Microsoft in 1975 with Paul Allen, who died in 2018. Gates was CEO until 2000 when Steve Ballmer took over the role. Microsoft’s current CEO, Satya Nadella, took over in 2014. Gates was director of the board at Microsoft until 2014 but began dedicating more of his time to the Bill & Melinda Gates Foundation in 2008.

Gates is among Microsoft’s top shareholders. He owns 1.36% of shares, according to FactSet. The company went public in 1986 and is now one of the most highly valued companies in the world with a market cap of $1.21 trillion.

“It’s been a tremendous honor and privilege to have worked with and learned from Bill over the years,” said Microsoft CEO Satya Nadella.

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“Bill founded our company with a belief in the democratizing force of software and a passion to solve society’s most pressing challenges. And Microsoft and the world are better for it. The board has benefited from Bill’s leadership and vision. And Microsoft will continue to benefit from Bill’s ongoing technical passion and advice to drive our products and services forward. I am grateful for Bill’s friendship and look forward to continuing to work alongside him to realize our mission to empower every person and every organization on the planet to achieve more.”

Africa hit by oil price free fall

The big fall in the price of oil in recent days is hitting the economies of countries in Africa that depend heavily on income from exports of the commodity.

Members of the Opec cartel like Algeria, Angola and Nigeria are especially at risk.

The price of oil went into free fall, after Russia refused to continue its pact with Opec to reduce production, which prompted Saudi Arabia to increase output.

Brent crude oil, the benchmark traded in London, is below $40 (£31) a barrel, about 25% down on last week’s price.


Algeria says a “rapid decision to balance the market” is needed, while Nigeria believes fellow Opec members might need to reconsider production cuts, because the sharp drop in prices may force the group to change strategy.

Nigeria’s government has admitted state spending will have to be curbed, to account for reduced oil revenues.

The credit ratings agency Fitch, whose assessments guide how much it costs countries to borrow money, says it will reconsider its analysis of the economies of Angola, Nigeria and Gabon.

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Fitch is concerned that Nigeria may spend much of its foreign reserves trying to prop up the value of its naira currency.

Its rival credit ratings group Standard & Poor’s has revised its estimate on the average price of Brent crude oil, down to $40 a barrel this year.

South Africa goes into recession again

South Africa’s battered economy has entered its second recession in two years. It shrank by 1.4% in the fourth quarter of 2019.

This follows a further 0.8% contraction in the third quarter of last year. The country continues to battle persistent power cuts which have hampered manufacturing, agriculture and mining.

The latest contraction was larger than many economists had projected.

The figures show that the economy only grew by 0.2% in the whole of last year, well below the levels needed to put a dent on South Africa’s record unemployment, which is hovering around 30%.


Power cuts are expected to continue for another 18 months, meaning South Africa’s economic woes will continue.

The recession will further complicate President Cyril Ramaphosa’s reform agenda, which includes slashing the public sector wage bill, rooting out corruption and turning around failing state companies.

The news of South Africa’s recession will dampen any hopes of the country avoiding a ratings downgrade.

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Moody’s is the only ratings agency that still has South Africa above junk status and it is due to make an announcement later this month.

#TheCamp20: West Africa’s premier entrepreneurship conference to hold March 7th

Every March of each year, hundreds of young start-ups, youths and entrepreneurs gather in Lagos gather to be trained  and be inspired by 18+ world class thoughts leaders, innovators, business practitioners, successful entrepreneurs, content creators digital media experts in the annual entrepreneurship conference – #TheCamp. This year’s event runs from the 7th to 8th of March. As long as technology continues to be the paradigm of the future, this event will continue to expand in scope and capacity.

The Camp West is West Africa’s premier conference and entrepreneurship programme for start-ups and young entrepreneurs. The mission is to discover and bring together start-ups and young entrepreneurs in West Africa to share ideas, learn and network while helping them understand the market trends, insights, meet key industry players and connect them to resources they need to build their brands.

The event which started in 2015 has seen in attendance over 200 young entrepreneurs and start-ups from across Nigeria, as well as 5 West African countries including Ghana, Liberia, Benin Republic and Cameroon. We bring over 13 speakers, hosts and panellists with different ideas and experiences. 

Themed “DISRUPT”, we are going to be shifting our focus to the businesses that are driving the West, the ideas that have worked, the challenges being faced by young entrepreneurs and how to overcome them, how technology is aiding growth and the tools that is needed to disrupt the market or be the ideas disrupting the current trends while building and uniting our communities. 

The Camp 2-day programming focuses on ideas, trends, insights, business practices and policy that leverage technology to build and manage businesses, transform industries and communities across West Africa.

The last edition of the event – #TheCamp19 with the theme ‘TIME’ was made possible by the contribution and support from over 20 brands across the sub-region  



The Camp is committed to ensuring women are an integral part of conference programming and ongoing initiatives. Hence, women are represented in all panels, sessions and the general programming throughout the conference.


This is a session to breakout and eat a quickly made West African food commonly considered as stressful meals to make.

One thing we have come to understand from our deeply rich culture in the West is that the best conversations happen with a meal at hand, and that the best moments are between the times we savour a new delicacy with a new friend, so, why not use this opportunity to meet and converse richly with that new friend?


The best time to get challenged is in between sessions that just brought you new ideas, but the best time to get inspired is in a session that helps you understand you can begin your personal branding by yourself. How about learning news ways to brand yourself while you wait for the flow of income to higher another?


This session will bring the light on what the future will look like when the African youths are digitally powered and the lots we hope to achieve with it.


This session will broaden our minds on the power we posses with our stories and the distance they can go to shape the society positively.

#TheCamp20 will be held at Sunfit International, by Apple Junction, Festac Town, Lagos.

 To learn more about #TheCamp20, visit: http://bit.lytchome/.  For the latest news and updates, follow The Camp West on Twitter via @TheCampWest or on Facebook via facebook.com/TheCampWest

#TheCamp20 Partners include: The Guardian, Google, Mediafits, Miaz Designs, Edubridge, Meccil Concepts, Sun Newspapers, etc.

Kenya bans slaughter of donkeys

Kenya’s agriculture minister has banned the slaughter of donkeys and ordered the closure of all donkey abattoirs in the country.

Peter Munya gave the owners of the Kenya’s four donkey abattoirs a month to transition to slaughtering other livestock such as cattle and goats. The minister said those who did not comply would have their businesses closed.

Mr Munya’s announcement came late Monday, after speaking to a group of farmers who protested outside the ministry offices.

Farmers say an increase in demand has led to rampant theft of their donkeys. In rural Kenya, donkeys are an essential part of life, relied on to fetch firewood and water among other uses, and it is a taboo to eat donkey meat in some communities.


There are fears in Kenya that the country’s donkey population could be wiped out if nothing is done to stop the slaughter rate.

It is estimated that as many as one thousand donkeys are being slaughtered every day, and that the population could be wiped out in ten years.

Exports to China are driven by the demand for the gelatine produced from boiling their skins.


When the first donkey abattoir was set up in 2016, an adult donkey sold for about $50 (£39), but prices have skyrocketed to about $200 (£154), according to a recent report by the Africa Network for Animal Welfare.

How to access the micro, small and medium enterprises development fund

By Ujunwa Onuegbu

The MSME Development Fund was launched by the CBN on August 15, 2013 with a share capital of N220 billion. The Fund was established in recognition of the significant contributions of the Micro, Small and Medium Enterprises (MSME) sub-sector to the economy and the existing huge financing gap.

You can access up to N500,000 for Micro-business and N50 million for Small and Medium Enterprises (SME) at a maximum interest rate of 9% per annum.

Repayment of loan is maximum of one year for Micro-business and five years for Small & Medium Enterprises.


Are you a woman in business? This loan is for you! As part of gender inclusion, 60% of the Fund is reserved for women and 40% for others; including persons with disability (2%) & Start-up businesses (10%).

Objectives of the MSMEDF

The broad objective of the Fund is to channel low interest funds to the MSME sub-sector of the Nigerian economy through Participating Financial Institutes (PFIs) to:

  • Enhance access by MSMEs to financial services;
  • Increase productivity and output of microenterprises;
  • Increase employment and create wealth; and
  • Engender inclusive growth

Participating Financial Institutes (PFIs)

  • Microfinance Banks
  • Commercial Banks
  • Cooperatives
  • Financial Companies
  • NGO-Microfinance Institutions
  • Development Finance Institutions, i. e, Bank of Industry & Bank of Agriculture


Enterprises to be funded under the Scheme include:

a. Micro Enterprises

b. Small and Medium Enterprises (SMEs)


  • Agricultural value chain activities
  • Cottage Industries
  • Artisans
  • Services
  • Renewable energy/energy efficient product and technologies
  • Trade and general commerce

Small & Medium Enterprises (SMEs)

  • Manufacturing
  • Agricultural value chain activities
  • Services
  • Renewable energy, energy efficient product and
  •  Technologies

Other economic activity as may be prescribed by the CBN.

Note: Only 10% of the Commercial component of the Fund is channeled to trade and commerce.

Also, Nigerian Agricultural Insurance Corporation (NAIC) Insurance is compulsory for primary agricultural production.


A viable business plan and any other document requested by the bank.

Example: First Bank’s Required Documents are:

  • Formal application for a credit Facility.
  • Certificate of Incorporation.
  • Memorandum and Article of Association (MEMART).
  • Board Resolution to Borrow.
  • Feasibility Study/Business Plan.


  • With your Business Plan go to any  PFIs of your choice
  • Request for loan
  • Your bank will discuss your request and provide you the fund

Be informed that the Central Bank of Nigeria did not authorize or appoint any agent to sell forms or collect any fee to access the Fund.  ONLY FORM AVAILABLE UNDER THE FUND IS THE FORM TO BE FILLED BY PARTICIPATING FINANCIAL INSTITUTIONS (PFIs) – to enable them access the Fund and IT IS FREE.

You’re therefore advised to beware of the activities of fraudsters and report anyone that approaches them with the fake forms to the law enforcement agencies.

The second-biggest diamond in history leaves Africa

The largest rough diamond discovered since 1905, the 1,758-carat Sewelo, was revealed with great fanfare last April, named in July and then largely disappeared from view. Now it has resurfaced with a new owner — and it’s not a name you might expect.

Louis Vuitton has bought the Sewelo, the biggest diamond discovered since 1905.Credit…Grégoire Vieille/Louis Vuitton.

It is not, for example, Jeff Bezos, the richest man in the world, on the hunt for a trophy asset. It is not a royal family, searching for a centerpiece for a new tiara. It is not the De Beers Group, who could be seen as the creator of the diamond market and owner of the Millennium Star diamond, which, uncut, was a 770-carat stone.

It is not even the diamond specialist Graff, the owner of the Graff Lesedi La Rona, a 302.37-carat diamond that is the world’s largest emerald-cut sparkler.

It is Louis Vuitton — the luxury brand better known for its logo-bedecked handbags than its mega-gems, which has been present on Place Vendôme, the heart of the high jewelry market, for less than a decade.


And it is the latest sign, following the $16.2 billion purchase of Tiffany by the French behemoth LVMH (the parent company of Louis Vuitton) in November, that LVMH is out not just to compete, but to utterly dominate the high jewelry market. Taken together, the double punch of purchasing (brand and stone) in less than two months is the luxury equivalent of shock and awe.

“There are less than 10 people in the world who would know what to do with a stone like that or how to cut it and be able to put the money on the table to buy it,” said Marcel Pruwer, the former president of the Antwerp Diamond Exchange and the managing director of the International Economic Strategy advisory firm. “To buy and then sell what could be a $50 million stone, you need the technical qualifications, as well as the power to write the check and take the risk.”

Michael Burke, the chief executive of Louis Vuitton, declined to say how much the company had spent on the stone, though he acknowledged it was in the “millions” and that “some of my competitors, I believe, will be surprised” that Vuitton was the purchaser.

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“Nobody expects us to put such an emphasis on high jewelry,” Mr. Burke said. “I think it will spice things up a bit. Wake up the industry.”

According to Jeffrey Post, the curator in charge of gems and minerals at the Smithsonian Institution, “if you buy a diamond like that, it gives you immediate credibility.” It is also, especially in the case of the Sewelo, more risky than you may imagine.

The Karowe diamond mine in Botswana.Credit…Mine Karowe / Lucara Diamond Corp.

Discovered in April 2019 at the Karowe mine in Botswana (owned by Lucara Diamond Corp, a Canadian miner), the baseball-size Sewelo is the second largest rough diamond ever mined.

The largest was the 3,106-carat Cullinan diamond, which was discovered in South Africa in 1905 and eventually yielded two enormous high-quality stones — one of 530.4 carats and one 317.4, both now part of the British crown jewels, as well as many smaller stones.

The Sewelo is also the largest rough diamond ever found in Botswana (a country that has become the poster child for responsible mining) and the third very large diamond discovered in Karowe.

The mine also produced the 813-carat Constellation, uncovered in 2015 and sold for $63 million to Nemesis International in Dubai, a diamond trading company (in partnership with the Swiss jeweler de Grisogono) and the Lesedi La Rona, discovered in 2016 and sold to Graff for $53 million.


When Lucara held a competition to name the Sewelo, 22,000 Botswana citizens submitted entries. “Sewelo” means “rare find” in Setswana.

Unlike both the Constellation and the Lesedi, however, it is covered in carbon (at the moment it looks like a big lump of coal), which makes exactly what kind of diamond material is inside a “mystery,” according to Ulrika D’Haenens-Johansson, a senior research scientist at the Gemological Institute of America.

It also makes “the risk that much greater,” Mr. Pruwer said. When the stone was unearthed, there was a fair amount of speculationthat it may be worth significantly less than its not-quite-as-giant siblings.

The profitability of any large stone depends on its yield: how many gem-quality carats can be gotten out of it once cut to maximize the price, which is in turn a function of the impurities in the stone — though, as Ms. D’Haenens-Johansson points out, even the impurities have value in a stone this size. They can reveal when the diamond was created and at what depth in the earth.


The mine, which has examined the diamond through a tiny “window” in the dark covering and scanned it with lasers, describes the stone as “near gem quality,” with “domains of high-quality white gem.” There are thousands of gradations of diamonds, ranging from D-flawless (the most rare) to industrial stones used in cutting and manufacturing.

“Is it D or D-flawless, and how big is the flawless part? I don’t know,” Mr. Burke said, acknowledging that the purchase “took a little bit of guts and trust in our expertise.” (To be fair, LVMH can afford it; its revenues in 2018 were 46.8 billion euros, or $52 billion.)

Still, Mr. Post said, “You don’t buy a stone like that unless you have some plan for what you are going to do with it and some belief that there is enough clear material that you can cut it and make a profit.”

The Lesedi La Rona diamond at Sotheby’s in 2016.Credit…Donald Bowers/Getty Images for Sotheby’s

Mr. Burke said when he showed the stone to Bernard Arnault, the majority owner and chief executive of LVMH, and “he had it in his hand, he smiled.” A smile from Mr. Arnault, a famously taciturn executive, is the equivalent of a scream of triumph from another chief executive.

After all, along with the potential profits, LVMH also bought the less quantifiable, but nevertheless palpable, bragging rights to the diamond in an industry where mythology and romance are part of the price.

Mr. Burke said that when his team suggested that Vuitton consider buying the Sewelo, his initial reaction was: “What took you so long?”

“It’s a big, unusual stone, which makes it right up our alley,” he said. It is also the first time Vuitton has bought a rough stone without having presold it to a client. (According to Mr. Pruwer, most branded fine jewelers buy stones that are already cut and polished.)

The 302.37 carat Graff Lesedi La Rona.Credit…Donald Woodrow

“We are experimenting with a different way of bringing a stone to market,” said Mr. Burke, who said Vuitton would not cut the stone until it had a buyer, and that the company did not plan to hang on to the stone as a showpiece, the way Tiffany has kept its 128.54-carat namesake stone.

Vuitton’s partners in Antwerp are building a scanner able to see through the stone’s coating, though with the imaging already in place, including a CT scan, they have estimated it may yield a 904-carat cushion-cut diamond, an 891-carat Oval or several stones of between 100 and 300 carats.


As for the fact that the acquisition happened around the same time as the Tiffany acquisition, Mr. Burke said it was a coincidence. Yet he acknowledged, with some understatement, that LVMH “typically likes to become leaders in whatever field we go into.”

And if the Sewelo doesn’t prove to be quite as lucrative as LVMH is betting? “I’ll go jump in a river,” Mr. Burke said.

What Nigeria can do to avoid World Bank’s ‘worst case scenario’

In its latest report on Nigeria, the World Bank issued a stark warning: that the country risks becoming home to a quarter of the world’s destitute people in a decade unless policymakers act to revive economic growth and lift employment. Wale Fatade, from The Conversation Africa, asked Professor Sheriffdeen Tella to explain what can be done to avert such an outcome.

No coordination on macroeconomic policies in Nigeria Red Confidential/shutterstock

Why has President Muhammadu Buhari’s government failed to get the economy growing in a way that creates jobs?

The Nigerian economy is public sector driven. This simply indicates that public sector pronouncements, particularly with respect to the annual budget, serve as the basis for the private sector’s actions on production generally. They rely on fiscal policy in decision making because of the volume of funds and involvement of the government in production processes.

And the private sector has been marginalised because it has been unable to raise the necessary credit to expand. This is because the public sector borrows a lot from the banks through the Central Bank’s financial instruments and also because the Central Bank interest rate policy makes cost of borrowing very high.


That in itself stalled employment generation by the private sector.

In addition, the government has continuously resorted to external borrowing. As a result debt servicing takes up between 25% and 50% of Nigeria’s revenue. This is on top of having problems generating revenue.

A third problem is that there has been no coordination on macroeconomic policy. The fiscal policy maker – the national treasury – introduced an expansionary fiscal stance. This simply means the ministry of finance proposes more funding of old projects and introduction of new projects, which results in deficit budgeting. But the monetary authority – the central bank – has been following contractionary monetary policy, like restricting banks from offering credit to the private sector by introducing high interest rates and liquidity reserves.

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Another failure has been government’s focus on infrastructure like power and roads. It’s been mistaken in thinking that this was all that was required. And even in these areas there have been no appreciable improvements.

All these factors have resulted in the slow growth over the past few years.

But people in government seem not to accept opinions from outside their circle. When reports such as the one from the World Bank are not favourable, they ignore them instead of analysing them and taking precautions.

What does the government need to do to avoid the scenario set out by the World Bank in its report?

The first thing would be for it to believe the report, and to see the content as a challenge to be tackled to avoid the catastrophe that’s been predicted. Once the government believes there is a problem, the economic team of the president must be given the assignment to work out solutions.


I suggest that a long term national plan be put in place. I learnt recently that the current government is working on one. It should be “planning with the people” and not “for the people”.

Secondly, the government must continue to promote agriculture for food and industrial raw materials. At the same time there must be an incentive for industrial production to reduce the cost of production. This should include tax relief and cheap credit facilities. To free up money for credit extension, the government must borrow less from the banks. The effect of these steps will be enable businesses to expand, leading to job creation. In turn, newly employed people will pay tax and boost the fiscus.

Thirdly, the government must stop taking out new external loans and start renegotiating existing ones to give it some money to spend in its annual budget.

Tied to this, a different form of domestic borrowing must be initiated. Government can float short term bonds – of one to two years’ duration – to be subscribed to only by individuals and corporate bodies, not banks.

It must also continue to promote the consumption of locally produced food and goods and invest massively in education and health.

Within a decade, we could see the outcome of such investment in healthy, educated and skilled citizens and a gradual fall in population.


Can the government afford to remove fuel subsidies and trade restrictions?

All countries have subsidies. The welfare schemes in the UK, the US, Germany and Japan ensure that children are taken care of and that the aged and the unemployed are supported. There are no such social safety nets in Nigeria.

The removal of the fuel subsidies would create hardship and accelerate arrival at the poverty levels set out by the World Bank.

But government should ascertain the actual level of subsidy. At the moment there is over-invoicing of imports (paying more than they are worth) and under-invoicing of exports (getting less than they are worth). These both result in negative effects on the country’s reserves and balance of payments.

The country should also attract private sector participation in the oil sector downstream. Nigeria should have many more examples of the refinery being established by Dangote Oil Refinery. This is being built by a joint venture company made up of international and local companies.


New refineries can be built in less than three years. Once these are in place the issue of subsidies can be revisited.

Trade restrictions, too, are a feature of all economies. If trade restrictions will change the trend for good, and I believe so, let it be.

The fuel subsidy cannot be totally removed but should be reduced as domestic production increases.

Why Nigeria produces Scrabble champions

IN THE hot, golden light of an Abuja afternoon two men spin a rotating Scrabble board, oblivious to the flies buzzing around them. The opening moves in the word-building game are relatively low-scoring: “writer” for 26 points, followed by “pool”, “ow”, “or” and “li”. But the scores soon stack up, including two 50-point bonuses for getting rid of all seven letters for “mediant” (the third note of a diatonic musical scale) and “deracine” (from déraciné, a French noun and adjective for someone who has been uprooted).

In less than 20 minutes, the time allowed for a professional game, Eta Karo beats Ben Quickpen by 461 points to 410.

Both men are members of the triumphant Nigerian team that last month won the World English-language Scrabble Players Association championship for the second time running. Four of the team’s eight players made the top ten, out of 118 competitors.


Scrabble found fans in Nigeria in the 1980s. It was made an official sport in the early 1990s. Prince Anthony Ikolo, the coach of the Nigerian national team, reckons there are now around 4,000 players in more than 100 clubs around the country (compared with about 2,000-2,500 members in 152 clubs in America and Canada combined). He wants to ensure that “all nooks and crannies in this country have a Scrabble board.” For now, the game’s best players hail from the better-educated south, particularly Lagos and the oil-producing states.

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It helps that some states hire Scrabble players as civil servants. Mr Quickpen gets 70,000 naira ($195) a month from Bayelsa state for coaching younger players. He still finds time to play for four hours every day, six days a week. Godswill Akpabio, a former governor and now senator for the southern state of Akwa-Ibom, puts on a yearly tournament. This year the first prize was worth $10,000. Not for nothing is he known as the “Pillar of Scrabble in Africa”.

Good Nigerian players tend to have an encyclopedic knowledge of short words, which they often deploy instead of longer ones in order to block their opponents and conserve useful letters such as S, E and R. Money seems to be their main motivation. Top players can make more than $4,000 a year, a useful income boost in a country where more than half the population makes less than $1.90 a day. “As a people we believe in profits,” says Mr Ikolo. “If there is no prize money it won’t be competitive.”

This article appeared in the Middle East and Africa section of the print edition under the headline “Why Nigeria produces Scrabble champions”

10 ways to survive the long January money scarcity

It’s not easy to save at the best of times – and it’s even tougher if you’re prone to some last-minute spending. None of us want to miss out on that party invite or weekend away. Now you won’t have to.

Use booking websites to find restaurants with special offers such as freebies, set menus and reduced rates. Photograph: Sergio Marcos/Stocksy United

You’ve heard it a million times: the secret to staying on budget is to plan ahead. But, for many of us, that’s easier said than done. We work so hard that we don’t have time to organise things far in advance, nor are we able to devote as much energy to our finances as we should. But, also, it’s simply a lot of fun to be spontaneous and make the most of opportunities that come up.

For that reason, it isn’t always easy to stick rigidly to a budget. Last-minute expenses, invitations for weekends away, or celebrations with friends and family can often come up unexpectedly. But if you’re canny with it, you can be spontaneous without going overboard. So here are 10 smart ways to spend that even the busiest person can stick to.

Many cinemas have special deals and cheaper tickets at certain times. Photograph: Klaus Vedfelt/Getty Images

Eat out smart
When a friend suggests lunch or an evening meal on the town that you hadn’t planned for, you don’t have to miss out. Using restaurant-booking websites, you can find restaurants near to you that have special offers such as free prosecco, two- or three-course meals, or afternoon tea at reduced rates.

Get rewarded for spending
One great way to earn back some of your spending money is to use a cashback credit card. If you choose one that doesn’t have a limit on the amount of cashback you could earn – such as the American Express Platinum Cashback Everyday Credit Card – you’ll be paid back a proportion of your spending as cashback. The more you spend, the greater the reward, meaning that if you use your credit card for everyday spending as well as big-ticket items, you can reap the rewards in cashback. (See Important information panel.)

Set aside extra cash each month for last-minute social commitments 
If you know you’re liable to go big on going out, or you regularly need to find extra cash for last-minute social occasions, add a contingency to your budget so you don’t end up short at the end of the month. If you don’t use it one month, you can carry it forward towards a bigger item later. Make sure you’ve set aside enough to cover all your regular and necessary expenses such as rent or mortgage and utility bills before you calculate your spending money.

Buy an annual pass
Some museum and gallery exhibitions charge a comparatively high fee for a one-off ticket, but offer annual passes for the cost of two or three visits. These memberships often also include free guest or child passes, so if it is somewhere you’ll visit regularly, you can save a lot of money over the course of a year. Ask whether they have an introductory rate for new members.

Use an app
There are lots of money apps you can use to alert you if your spending is higher than you’d like. Different apps provide different services, from providing smart insights on your spending and showing an overview of your finances, to alerting you to where you could reduce unnecessary expenses. Be specific with your needs when you look for the app for you, and always read customer reviews to see how others have benefitted.

Make the most of retailers’ loyalty cards
Many stores and supermarkets give points on shopping that can be used as part payment in-store or exchanged for vouchers and money off. Often, the deals available are more generous than the face value of the points if you decide to convert them into meal vouchers or money off on days out.

Enjoy the big screen
There are plenty of ways to go to the cinema for less. Some have deals on certain days and secret blockbuster screenings at reduced rates. Afternoon showings and Sunday mornings are often cheaper, too.

Get your culture on the cheap
If the theatre is more your thing, you can turn up at the box office a few hours before a performance and ask for reduced seats. Some websites list popular shows for £25 per person or less. Many theatres set aside a number of cheaper tickets for under-25s, over-60s and students of all ages, too.

Be flexible about your thrills
While many theme parks and attractions offer the cheapest price for advance tickets, some online bookings are valid for three months to a year from the date of purchase. So if you fancy an adrenaline rush, or a fun day out for the kids, you can pre-book and then decide later when you want to go. It’s particularly useful if you want to combine your trip with a favourable weather forecast.

Last-minute getaways
Whether it’s a holiday cottage by the sea, a winter sojourn in the sun, or a weekend city break, leaving it to the last minute to book can bag you a bargain. Lots of travel sites use dynamic pricing, which means that what you pay will change in response to supply and demand. If you are flexible enough to have your suitcase packed and ready to head off within 24 hours, you can snap up some incredible deals. Hotels would rather fill a room than leave it empty, and might even throw in dinner to encourage you to stay. Being spontaneous can be wonderful.

Important information

Applicants must be UK residents, aged 18 years or older. Approval subject to status. Terms and exclusions apply to earning cashback. See americanexpress.com/uk for more information. 5% cashback on your purchases made in the first 3 months up to £100. Cardmembership begins from Card approval.

Introductory offers are not available to anyone who currently holds or has held any other American Express personal Card in the past 24 months. Cashback will be payable at a rate of 0.5% on spend up to £5,000; 1% on spend more than £5,000. There is a minimum annual spend of £3,000 to receive cashback. Cashback is not earned on non-purchase transactions.

American Express Services Europe Limited has its registered office at Belgrave House, 76 Buckingham Palace Road, London, SW1W 9AX, UK. It is registered in England and Wales with company number 1833139 and authorised and regulated by the Financial Conduct Authority.

This content is sponsored by American Express

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A border patrol force may not solve Nigeria’s smuggling problem

In August, Nigeria closed its border with Benin without notice. Then, in October, the customs service announced that all goods trade would remain entirely, and indefinitely, banned across all land borders. Finally, on November 14 came the announcement that Nigeria, Benin and Niger would form a joint border patrol force.

By Joachim Jarreau

Nigeria’s total land borders are 4,477 km long. The border with Benin is 809 km long; the one with Niger is 1,608 km long.

The reason given for the closures was that smuggling had reached alarming proportions, in particular with Benin.

Since the 1970s a large share of trade at those borders has avoided customs and controls. Using 2011 data, we estimated that the value of unofficial cross-border flows from Benin to Nigeria was about five times higher than official ones – those recorded in customs data.

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This is due to several factors. Geography and history are often mentioned. These borders are said to be “porous”: they are relatively easy to cross. Terrain in this area is largely flat. Bush roads across the borders are numerous and can easily be travelled with light vehicles, cars or motorcycles. And the lagoon which spreads over the border in the south allows for crossing on pirogues.

However, the scale and persistence of smuggling across the border has more fundamental causes. Nigeria has a restrictive trade policy, imposing high duties, or even import bans, on many products. This creates price differences between Nigeria and its neighbours: imports from third countries are cheaper in neighbouring markets than they are in Nigeria.

In turn, these price differences create an incentive for smuggling goods across the border.


The border patrol will not address this fundamental cause. Moreover, the experience from the past three decades also suggests it is unlikely to succeed.

Trade policy

For decades, Nigeria has attempted to restrict imports of food, such as rice, alternatively by imposing prohibitive tariffs on them or banning them altogether.

This policy was supposed to deliver self-sufficiency. This is probably not a good policy objective, as it would deprive Nigeria of the gains from specialisation. But the experience of the past three decades has also proven that it is not a feasible objective. For example, the ban on rice imports goes as far back as 1986. It has not delivered on the promise of self-sufficiency. Nigeria currently produces 6.8 million metric tonnes of rice, while consumption is at 7.8 million metric tonnes.


Any argument that protection would allow domestic rice production to build up and become competitive has lost credibility by now.

Meanwhile, the effect of high tariffs and import bans is to raise the price of some food items in Nigeria. This benefits the producers of those items, but consumers are hurt. It also fosters smuggling, as well as corruption.

Why a border patrol won’t work

The costs of patrolling a border that long are tremendous. The country’s taxpayers, as well as those of neighbouring countries, will thus be financing an expensive policy which serves to maintain high food prices in Nigeria.

Moreover, it is well-known that cross-border smuggling is only made possible by wide-scale corruption.


The same factors that make smuggling profitable – import bans and duties – also sustain corruption, as the cross-border price gap is large enough to cover the costs of this activity, including bribes.

We recently conducted a study on informal trade on Benin’s border with Nigeria. Data from the survey, conducted by Benin’s statistics office, show that the payment of bribes is the norm in this sector, with above 80% of traders reporting they’d made a payment during their crossing of the border.

It is not clear that the border patrol should put an end to this practice. Stricter control at the border makes the business of smuggling riskier, but also more profitable as domestic prices rise. The measure might end up only raising bribe prices.

Even if the policy does succeed in restricting trade flows, this will hardly benefit Nigerians. The more effective the ban is, the higher the price of imported products on Nigerian markets.

Nigeria today | Read more

The Nigerian customs office is claiming that revenues have increased. But this cannot be taken as a proof of success. It means that Nigerian consumers are now paying higher indirect taxes on their food consumption. This is not good news for the poor.

The border patrol is a costly effort to enforce a policy of high import barriers. This policy benefits producers of protected goods, at the expense of consumers.

The experience from over three decades has shown that smuggling and corruption are natural byproducts of this policy.

Minister of Communication, Dr Isa Pantami

Buhari renames Ministry of Communication

President Muhammadu Buhari has renamed the nation’s communication ministry to the Federal Ministry of Communication and Digital Economy.

In a statement on Wednesday by the ministry’s spokesperson, Philomena Oshodin, it said the president renamed the ministry based on the request of the minister, Isa Pantami.

The Minister of Communications, Isa Pantami, will now ”properly position and empower the ministry to fulfil his digital economy objectives,” the statement added.

“The Ministry which supervises the ICT Sector has been renamed the Federal Ministry of Communications and Digital Economy to further expand its mandate to capture the goals of digitalisation of the Nigerian economy in line with the Economic Growth and Recovery Plan (EGRP), one of the key agenda of the present administration,” the statement said.

According to the statement, the former name ”was not only limited in pursuing the objectives of a digital economy but obsolete as it did not reflect the trends as emphasised by the International Telecommunications Union (ITU)”.

“ICT contribution to the country’s Gross Domestic Product (GDP) stood at 13.8 per cent in the second quarter of 2019. The change of nomenclature will propel the Ministry to reposition its strategic objectives as laid out in the priority areas of this administration while accelerating growth and social inclusion,” it added.

It cited examples of ”global and African economies like Scotland, Thailand, Tunisia, Benin Republic and Burkina Faso among others who have adopted deliberate strategies and created Ministries of Digital Economy in line with global best practice”.

In a letter containing his approval, Mr Buhari reportedly said the request is in line with global best practice which will further reflect the priorities of his administration.

The approved name was announced and adopted by the Federal Executive Council on Wednesday.

Civil servants ordered to wear ‘made in Kenya outfits’

Kenya’s government has ordered civil servants to wear locally tailored clothes to work on Fridays and during public holidays.

The order is meant to boost the local manufacturing industry, a key plank in President Uhuru’s Kenyatta so-called Big 4 Agenda.

The order was communicated in a circular signed by Solicitor-General Kennedy Ogeto, who has confirmed its authenticity to Kenya’s Daily Nation newspaper.

It reads:Quote Message: Pursuant to the achievement of the Big 4 Agenda and specifically the expansion of manufacturing by producing better goods and creating local employment, I direct that all members of staff shall on all Fridays be dressed in decent, smart casual Kenyan-produced and tailored attire.”

Pursuant to the achievement of the Big 4 Agenda and specifically the expansion of manufacturing by producing better goods and creating local employment, I direct that all members of staff shall on all Fridays be dressed in decent, smart casual Kenyan-produced and tailored attire.”

It is unclear whether there will be disciplinary measures against those who don’t comply.

President Kenyatta and his deputy William Ruto led by example during Sunday’s Heroes’ Day celebrations in the coastal city of Mombasa, wearing Kenyan-made attires.

Cabinet ministers and other state officials also wore similar outfits.

The Ghanaian construction industry employs over 320,000 people and more than 2% of young people. Wikimedia Commons

Ghana’s construction industry is lively but needs regulation

Over the past two decades, Ghana’s construction sector has both contributed to and benefited from a rapidly growing economy. The government is investing in rail, road and property projects across the country amid strong demand created by an expanding urban service economy. This is reflected in the increased spend in the 2019 budget.

The Ghanaian construction industry employs over 320,000 people and more than 2% of young people. Wikimedia Commons
The Ghanaian construction industry employs over 320,000 people and more than 2% of young people. Wikimedia Commons

In 2016 and 2017, construction contributed 13.7% to GDP. It remains among the fastest growing of the 21 sub-sectors of the economy, according to Ghana Statistical Service data and it employs at least 3% of the labour force.

Ghana has joined the group of frontier emerging markets. It is moving towards becoming an advanced economy characterised by political stability, rapid economic growth and industrialisation. But rapid urbanisation could also create slums if infrastructure does not keep pace.

My research looked into whether the construction industry has the policies and strategies it needs in place to continue supporting Ghana’s economic growth. I found that it needs to be structured and regulated to be more competitive.

This is not happening as fast as it should.

Construction and economic growth

Frontier emerging economies are characterised by relatively low per capita income, high unemployment and low activity in business and industry. Though Ghana has created a structural and economic environment that inspires some confidence in attracting global investments, much still needs to be done and the political dispensation needs to remain stable.

One theory is that construction industry activities are critical in driving faster development towards emerging economy status. Known as the Bon Curve, it suggests that, as a nation migrates from developing country status to an emerging economy, it must be fully prepared to tap into the increasing volumes of construction activities that are critical in driving the accelerated development expected.

A construction sector index developed by the academic Victor Osei shows that the industry in Ghana has improved significantly over the last two decades. Osei also demonstrated that there has always been a positive relationship between construction activities and growth of the wider economy.

In theory, the Ghanaian construction industry should be at the point of being able to propel that economic growth. It employs over 320,000 people and more than 2% of young people, as well as providing more training and apprenticeship opportunities to young people than any other sector. This can only happen if appropriate strategic action plans are put in place. These include efforts to integrate the informal sector.

Industry players have called for an industry development agenda which would provide an overall structure and direction. Efforts have been made towards drafting a construction industry development authority bill.

Progress however has been slow. One reason is the lack of a unified construction industry body to lobby the government to pass the bill. Attempts to bring various professional bodies together have been met with apathy. Civil engineers, planners, architects, surveyors involved in the sector are instead on entrenching their positions within the sector.

The industry bodies are also generally uncompetitive. This is because they have remained traditional. They have failed to transform current economic demand into an opportunity to compete with international players and to access new markets in, for instance, the sub-region.

Informal and wasteful

This is consequent on the lack of deliberate policy direction in raising first-class contractors to be global competitors. Because of the transient nature of activities in the sector and its ability to absorb relatively large numbers of unskilled workers, the sector is also heavily informal.

Above all, it appears that the political elite are using the industry to consume wealth. This happens when projects are discontinued upon a change of government or completely abandoned. This leads to locked-up capital in several abandoned projects.

Even though the constitution of Ghana mandates succeeding governments to continue projects started by their predecessors, it rarely happens. Completed projects that have turned into white elephants are constantly in the news and the political class plays the blame game.

There are lessons to be learnt from emerging economies such as China, Brazil, South Africa and India, whose contractors are beginning to influence the international market. They all have an apex body regulating and providing a deliberate construction industry development agenda. They have taken steps to enhance productivity and efficiency; set performance standards and integrate new technologies for efficiency. They have also improved occupational safety, health and environmental practices. They encourage technology transfer including export of construction products.

The global construction space is becoming more technologically advanced. Ghana cannot afford to remain stagnant and uncompetitive. There have been several calls for government policies to support better project management practices.

The starting point would be to pass the construction bill into law. That would provide space to pursue the construction industry developmental agenda, in tandem with Ghana’s quest to become a firmly rooted middle income economy.

Border closure forces Nigeria inflation surge

  • President Buhari closes borders to stop rice smuggling
  •  Monthly food-price growth quickens for first month in four

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The shutdown of Nigeria’s land borders to tackle rampant food smuggling and encourage an agricultural revival in Africa’s top oil producer is having an unintended side effect: higher inflation.

A spike in food prices saw the annual consumer-inflation rate rise to 11.2% in September, after falling to a 3 1/2-year low in the preceding month, the National Bureau of Statistics said Tuesday. Food-price growth accelerated for the first time in four months, rising 1.3% from August.

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n late August, Nigerian President Muhammadu Buhari ordered the partial closing of its boundary with Benin to curb smuggling of rice, a staple. His administration further tighten the screws on Monday by banning trade across all land borders to force neighbors Benin and Niger to halt food smuggling into the continent’s most-populous nation.

“The key factor for prices has been the partial closure of the land border with our neighbors,” said Omotola Abimbola, an analyst with Chapel Hill Denham Securities Ltd. “We have stable fuel and energy prices, and we are in the harvest season. Inflation should be lower.”

With a population barely 5% of Nigeria’s, Benin has turned into the world’s No. 2 exporter of rice while Nigeria is expected to be the biggest buyer of the grain this year, according to the U.S. Department of Agriculture.

“At some point it has to be Nigeria first — we have to protect our own industries,” Finance Minister Zainab Ahmed said on Monday.

The policy has hurt food sellers in the capital, Abuja, who say Nigerians prefer imported food items because they’re more affordable. Prices of imported products such as rice, palm oil and frozen chicken have gone up by more than 50%, they say.

“I can already see this border closing affecting us terribly, especially with December around the corner,” said Grace Auta, 45, who sells goods at a food stand in the bustling Wuse market in Abuja. An increase in wholesale prices forced her to more than double the price of a 50-kilogram (110-pound) bag of rice.

“Already we are seeing drop in sales; we don’t have enough money to take in products as we normally would,” said Auta.

Cocoa production is an important cog in Ghana’s economy. Wikimedia Commons

Ghana’s cocoa farmers are trapped by the chocolate industry

The chocolate industry is worth more than $80 billion a year. But some cocoa farmers in parts of West Africa are poorer now than they were in the 1970s or 1980s. In other areas, artificial support for cocoa farming is creating a debt problem. Farmers are also still under pressure to supply markets in wealthy countries instead of securing their own future.

Cocoa production is an important cog in Ghana’s economy. Wikimedia Commons
Cocoa production is an important cog in Ghana’s economy. Wikimedia Commons

In research published last year I explored sustainability programmes designed to support cocoa farming in West Africa. My aim was to identify winners and losers.

I looked at initiatives such as CocoaAction, a $500 million “sustainability scheme” launched in 2014, and concluded that they were done in the interests of large multinationals. They did not necessarily relieve poverty or develop the region’s economies. In fact they created new problems.

To sustain their livelihoods, the cocoa farmers of Côte d’Ivoire and Ghana need to diversify away from cocoa production. But multinational chocolate companies need farmers to keep producing cocoa.


Farmers choose to diversify their crops for a host of reasons. These include a reduction in the resources they need to produce a crop (such as suitable land), and a reduction in the price they can get for the crop.

Cocoa farming requires tropical forestland. This is limited; it is not possible to keep expanding to new land to keep producing cocoa. So when the land is exhausted, farmers would benefit from diversifying to products like rubber and palm oil. They do not need to grow cocoa for its own sake.

A great deal of diversification occurred during the cocoa crisis of the 1970s in Ghana. Cereal output increased from 388,000 tonnes in 1964/1965 to over 1 million tonnes in 1983/83, and decreased when cocoa was “revitalised”. The same was the case with coconut, palm oil and groundnut.

But such diversification is more recently being prevented by multinationals and other stakeholders who want cocoa cultivation to continue. Multinationals that depend on cocoa as a raw material openly (and rightly) regard diversification as a risk to their business. So they keep spending on cocoa farming inputs.

Why there’s a limit to cocoa

In West Africa, cocoa has historically been cultivated using slash and burn farming. Forest was cut down and burned before planting, and then, when the plot became infertile, the farmer moved to fresh forestland and did the same again.

The new land offered fertile soil, a favourable microclimate and fewer pests and diseases. Growing the cocoa took less labour and yielded more.

This explains the link between cocoa farming and deforestation in Côte d’Ivoire and Ghana. A recent investigation showed that since 2000, Ivorian cocoa has been dependent on protected areas. Almost half of Mont Peko National Park, for example, which is home to endangered species, as well as Marahoue National Park has been lost to cocoa planting since 2000.

In Côte d’Ivoire, the area covered by forest decreased from 16 million hectares – roughly half of the country – in 1960 to less than 2 million hectares in 2005.

Forestland is finite. Slash and burn is no longer an option, because so much of the forest is gone. In West Africa, planters are now staying on the same piece of land and reworking it.

This has created its own set of problems.

Rising costs and threats

In both Ghana and Côte d’Ivoire, several estimates of the cost of maintaining a cocoa farm show that the investment costs required for replanting have approximately doubled. One estimate of labour investment put the replanting effort at 260 days per hectare, compared with 74 days per hectare for planting using slash and burn.

The extra labour needed for sedentary cultivation is leading to child trafficking and child labour in cocoa cultivation. Child trafficking generally occurs when planters are searching for cheaper sources of labour for replanting.

Planters who have successfully diversified into other crops have stopped using child labour. In the cocoa industry, however, the use of child labour is increasing. For example, the number of child labourers in the Ivorian cocoa industry increased by almost 400,000 between 2008 and 2013.

There has also been a massive increase in the use of fertilisers and pesticides to aid cocoa production without slash and burn.

The increased input (labour, fertilisers and pesticides) for replanting land amounts to a higher production cost. It cannot be adjusted by price setting. Cocoa producers have no control over price; they are price takers. So the higher production cost reduces the profit made by cocoa farmers.

This explains why cocoa producers in Côte d’Ivoire are poorer now  than they were decades ago.

In Ghana, the government, through the cocoa marketing board, COCOBOD, has managed the transition from slash and burn to sedentary farming. The government created a mass spraying programme to control diseases and pests. It also subsidised fertiliser and created a pricing policy that has sometimes amounted to a government subsidy this links need users to subscribe. Due to the extra free input provided by the government, sometimes supported by NGOs and multinational corporations, farmers have not become poorer in Ghana. But the approach has led to huge debt for COCOBOD. For example, COCOBOD incurred GHc2 billion (US$367 million) debt for subsidising the price of cocoa for the year 2017.

Although cocoa planters are faring well in Ghana, it is not clear that Ghana’s cocoa sector is really a success story. The shift to debt financing has artificially produced the success.

The way forward

Cocoa “sustainability” activities are not the way forward. Cocoa sustainability is a new form of colonisation in Africa, because its real goal is to prevent African planters from diversifying away from cocoa into other crops. These programmes keep the cocoa industry going under deteriorating conditions.

The way forward is to switch from cocoa to crops that do not require forestland (new or exhausted), extra fertilisers or more labour.

Research has shown that cocoa planters in Côte d’Ivoire who have diversified into other crops, such as rubber, have succeeded in escaping poverty.

But that is seen as a major threat to the supply of raw material to Western multinationals. One representative of a large chocolate multinational explained “my enemy is not my competitor in the purchase of cocoa, but the rubber industry.”

In conclusion, Ghana and Côte d’Ivoire have to think about what is best for them instead of what is best for the chocolate industry and consumers in the developed world.

Oil and gas is the lifeblood of Nigeria’s economy. Wikimedia Commons

Bloomgist In-depth: the $9.6 billion judgment debt that hit Nigeria in London

Nigeria has received a legal hiding after a UK court awarded a private company a US$9.6 billion judgment debt against the West African nation. The ruling has generated significant attention in both domestic and international media. This is understandable given that the sum amounts to 20% of the country’s foreign reserves. This means it poses a significant threat to its economy.

Oil and gas is the lifeblood of Nigeria’s economy. Wikimedia Commons
Oil and gas is the lifeblood of Nigeria’s economy. Wikimedia Commons

The big question is: What went wrong? How did Nigeria end up in this costly situation? For the answer, we must look back to January 2010 and a gas supply contract that went horribly wrong.

The Background Story

On 11 January 2010 Process and Industrial Development (P&ID), a company based in the British Virgin Islands, signed a contract with the Federal Government of Nigeria. This contract is called a gas supply and processing agreement. Nigeria’s government agreed that, over a 20-year period, it would supply natural gas (wet gas) to P&ID’s production facility.

In return, P&ID would process the wet gas by removing natural gas liquids and return approximately 85% of it to the government in the form of lean gas. This lean gas was to be returned at no cost to the Nigerian government.

Based on this agreement, Nigeria was supposed to arrange for the supply of wet gas to P&ID’s gas processing facility which it intended to build in the country’s Cross Rivers State. This required the government to construct pipelines and arrange facilities for transporting the wet gas. The government failed to do this for three years.

P&ID viewed this failure as a repudiation of the contract. In simpler terms, this means that the government renounced their obligation under the contract. Consequently, in March 2013, P&ID began an arbitration action against the government before a London tribunal.

Clause 20 of the agreement, which both parties signed, provided that any disputes were to be resolved by arbitration with the seat of arbitration being London, England or any other place agreed by the parties. Nigeria tried to contest this, but its appeal to have the tribunal sit in Nigeria failed.

At the tribunal, P&ID claimed that it had invested $40 million in the project even though it had not acquired the land or built any facilities for gas processing. It claimed damages of about US$6.6 billion dollars: the amount of the net income it would have earned over the 20-year period of the agreement.

In response, the government argued that the damages claimed were not a fair and reasonable consequence of the government’s breach of the agreement. This is because P&ID never commenced building the gas processing facility. It also argued that P&ID should be awarded only three years’ worth of income as by that time, the company should have found some other profitable investment which would reduce its losses from the breach.

Similarly, the government objected to the measure of estimated expenses and income stream which P&ID used to calculate its damages claim.

The tribunal’s decision

In July 2015 the tribunal decided that by failing to fulfil its obligations, the government had repudiated the agreement. P&ID was therefore entitled to damages.

In January 2017, the tribunal by a majority of 2 to 1 made a final award of US$6.597 billion together with interest at the rate of 7% starting from 20 March 2013 until payment is made. The 7% interest reflects what P&ID would have paid to borrow the money or earned by investing the money in Nigeria.

Following the tribunal’s award of damages, in March 2018, P&ID brought an action before the Queen’s Bench Division of the English Commercial Court. It wanted permission to enforce the damages awarded by the tribunal. Despite delays by the Nigerian government, on 16 August 2019, the court made an order enforcing the tribunal’s final award which now stands at about $9.6 billion.

In making this award, the court noted that the damages awarded were purely compensatory and not intended to punish the Nigerian government. The court also confirmed that there were no public policy grounds on which the award should not be enforced. This decision converts the arbitration award to a legal judgement.

This case perhaps highlights issues with Nigeria’s ability to effectively manage its oil and gas resources as well as its facilities. Between January and June 2019 alone, it is reported that Nigeria lost 22 million barrels of crude oil.

These losses have been largely attributed to pipeline vandalism and aged pipelines. The Nigerian National Petroleum Corporation recently spent billions on oil pipelines maintenance. But other problems, such as corruption and fraud in awarding security surveillance contracts for pipelines, persist.

Next steps

The $9.6 billion appears to be the largest amount of damages awarded against Nigeria to date. Evidence however suggests this is not the first time that Nigeria has failed to meet its contractual obligations. In 2016 it was reported that investors in Nigeria’s power sector threatened to pull out due to the government’s failure to meet its contractual obligations.

This case also demonstrates an ongoing issue with the government’s attitude to critical infrastructural projects. The Mambilla hydroelectric power project is a case in point. In spite of the huge potential offered by the project, it has been plagued by several controversies ranging from corruption and embezzlement of funds to the “irregular” awarding of contracts, and a general lack of political will.

The Nigerian government is yet to pay the judgement debt. Allegations of domestic and international conspiracy surrounding the agreement continue to abound. For now, the government has said that it intends to appeal the amount awarded.

Oludara Akanmidu, Lecturer in Law, De Montfort University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

The successful entrepreneurship formula working for Nigeria

By Okoro Samuel

Over the years,the amount of business visionaries in Nigeria has grown endlessly to an extremely decent number.

Truly! It will baffle and irritating once payment four – about six years inside the tertiary institution (contingent upon their determination of career),and not verify a better than average occupation.

Subsequent to moving on from the tertiary foundation, serving your father land with all enthusiasm and satisfaction, and you wrap up not getting the salaried activity you since quite a while ago wanted for.

One can consider American express that there’s a need for the adolescents and person’s to go into enterprise to make openings for work for themselves, to downsize the speed of state and furthermore sway lives totally.

Moreover, there’s furthermore need for those that don’t understand satisfaction inside the nine – five employment to wander into one thing they extravagant doing to make the more drawn out term they need at any point wished.

The thought or the psychological frame of mind behind beginning one’s business is named ENTREPRENEURSHIP. The overall population relapse from enterprise because of they either extravagant remaining in their temperature of being paid month to month, no extra cash-flow to startup a business or they’re not set up for the strain concerned.

In any case, the overall population neglect to appreciate that one doesn’t get the opportunity to have most to startup a business. A large portion of the universal firms we tend to see around began with pretty much nothing, additional time the intensity and furthermore the drive drove them more to the present tallness they’re as of now.

An entrepreneur could be one that sets up a business or organizations, going for broke inside the expectation of benefit though. Entrepreneurship is the ability and disposition to create, sort out and deal with a business adventure nearby any of its dangers in order to make a benefit.

The number of entrepreneurs in Nigeria are quite higher than entrepreneurs in other parts of Africa. Considering the economic push in Nigeria , youths are out to make a difference for themselves.  Seeing the hustle and industrious spirit in Nigerians, most willing hands has placed it upon their selves to empower this youth to bring their desired innovations to life.

Programs Empowering Youths Include:

  • The Tony Elumelu Entrepreneurship program
  • Youth Empowerment and Development Initiative (YEDI).
  • Youth Empowerment Nigeria (YEN)  and the host of many other programs.

Challenges Entrepreneurs Face.

Most entrepreneurs face the challenge of sorting for investors and funding. This challenge has hindered most business owners thereby holding their business back. Most times, the problem of sorting investors can be related to the entrepreneur himself simply because they haven’t pitched their ideal to potential clients. They have to learn how to position themselves and business in order to draw massive investors to their business.

Entrepreneurship has benefits ranging from

  1. Opportunity To Own Your Business
  2. Deliver Your Full Potentials
  3. It Gives you Room To Pursue your Interests
  4. It gives you the opportunity to solve Problems And Make A Difference In The Process
  5. It Gives Room to Create Your Future

Examiners’ have come to understand that business visionaries are the foundation of present day economies. It is their significant commitments that assistance society develop all in all. One reason the United States is such a dynamic, creative, and prosperous country is a result of the various business people that take their plans to the following dimension paying little mind to the dangers included.

Business visionaries make occupations and enhance and develop the economy.

The imagination and effect of U.S. Business visionaries was obviously recognized in president Obama’s 2010 condition of the country address; he expressed:

“Presently, the genuine motor of employment creation in this nation will dependably be America’s organizations. Be that as it may, government can make more specialists. We should begin where most employments do. In independent companies, organizations that start when a business visionary takes a risk on a fantasy, or a specialist chooses his time, he turned into his own manager. Through sheer coarseness assurance, these organizations have endured the subsidence and they’re prepared to develop.” Obama

The a great many little and medium estimated firms begun by Entrepreneurs give the advancements and make occupations natural for monetary development and improvement.

Numerous products and ventures we underestimate were presented by business people: Telephone, the car, the plane, cooling, the PC and going with programming, were altogether designed by them.

As indicated by Schumpeter (1975) capital and yield development in an economy depends essentially on the business visionary. The nature of execution of the business visionary decides if capital develops quickly or gradually, and whether the development includes advancement where new items and creation strategies are created.

The distinction in monetary development rates of nations is to a great extent because of the nature of their business people. Elements of creation, land, work and capital, will lie torpid or become inactive without the business visionary who composes them for profitable endeavors. The business visionary is, along these lines, a significant specialist of development, advancement and specialized advancement.

China’s hazardous monetary development in the course of recent years is expected to a great extent to evacuating proprietorship, bureaucratic, and money related points of confinement on the pioneering drive of the Chinese individuals. At the core of other quickly developing economies, for example, India and Brazil are various Small and Medium scale fabricating, retail, IT, specialized, and monetary firms.

In the United States, the world ‘s greatest economy, 75% of the 16 million organizations are kept running as sole ownership (entrepreneur.com). The U.S. Independent company Administration perceives that ‘private company is basic to our financial recuperation and quality, to building America’s future, and to helping the US contend in the present worldwide commercial center.

In many creating nations, including Nigeria, little and medium undertakings keep running as indicated by the dreams, gifts, openings and assets of business people and are known to realize work creation, give employments to ladies and youth, spread the profits of financial improvement, help create rustic territories, assemble residential reserve funds for speculation, teach new aptitudes and inject new innovation, and add to social and political security.

As Nigeria seeks after different monetary improvement plans including the National Economic Empowerment and Development Strategy (NEEDS), the thousand years Development Strategy Vision 2020, a center piece of the national technique must be to develop and fortify the dynamic components of the MSMEs, to a great extent casual, business part.

As a country Nigeria, and Africa all in all, must not bear the cost of not to put resources into MSMEs. Their financial future relies upon it. The remarks and approach duties of President Paul Kagame of Rwanda ought to be noted. He has announced “Business enterprise is the surest way” for Rwanda and Africa to create. Kagame lets us know:

In the old Rwanda, everybody searched for an occupation in government due to the advantages and the security. Be that as it may, these days they are imagining that the private division holds the guarantee of a superior life for their families and themselves.

Lion’s share of African nations need to work under befuddling guidelines and approaches that are always showing signs of change. Import guidelines specifically are incredibly exacting in numerous territories and this makes it extremely hard to take part in significant worldwide exchange and raises costs. The irregularity is likewise viewed as unsafe for merchants and makes some modest off out and out.

Aside from the information concerning Nigeria that is in this way far reaching and inconsistently negative, there is by all accounts an acknowledgment of the significant job and spot of innovation inside the improvement and progression of the state. inside the previous couple of years, there are the new businesses of net bistros, new net Service providers, PCs in certain resources, and property center points that offer access to information at high speeds. The Nigerian government has made and embraced approaches advancing the work of innovation in training. The Nigerian approach 1999-2003, could be a far reaching abridgment of President Obasanjo’s strategies and core values for the state. The strategy states: “Government can give sensible quality training for all Nigerians, the Universal Basic Education and mass Adult achievement programs will be sought after decisively” and especially, “Government can deliver motivators to extend access to information and designing which can encourage jump froging in order to hamper longer range of improvement.” The approach even prescribes associations with national and worldwide offices together with the global association Transfer of information through Expatriate Nationals program or TOKTEN in light of the fact that usually noted.

Be that as it may, a significant qualification among developed and developing countries commonly exists in the wide disparity between approach declarations and arrangement usage. Regularly, indications of this imbalance territory unit found inside the degree that approaches zone unit clear and quantifiable which application is steady. commonly developing countries embrace radiant approaches and pointers that may, if very much authorized, change the fates of their voters anyway unfortunately, they’re on a regular basis not finished. In the event that Nigeria finishes its new laws directing training and innovation with activity and usage, and furthermore the people of Nigeria accomplish their scholastic objectives and gifted potential with the devices realistic to the globe.

Entrepreneurship is the key to an innovative society. Let’s brace up and take up Entrepreneurship in order to build sustainable development in Africa and Nigeria.

Okoro Samuel is a Business Strategist, sales expert, an entrepreneur, writer, and a blogger. He coach entrepreneurs on how to grow and become outstanding competitors in business. 

South Africa really need to start taxing it’s wealth citizens

It’s well-established that South Africa has one of the most unequal income distributions in the world. Despite significant efforts by the State to stimulate inclusive growth, the income gap between the rich and the poor has continued to widen in post-apartheid South Africa.

A less explored topic is that of wealth inequality and, relatedly, the potential use of wealth taxation to reduce wealth inequality while also further diversifying the sources of much-needed government revenue.

An important consequence of a highly unequal distribution of wealth in society is the undermining of social, political and economic norms. For instance, high wealth inequality creates an imbalance of political power between citizens as the wealthy can potentially influence the political process unfairly. This can, in turn, reduce the optimum workings of a democracy.

At the same time, the concentration of a society’s wealth in the hands of a few reduces the mobility of wealth. This, in turn, limits its productive use in society.

Given that there are direct benefits from the holding of wealth (over and above the income streams which it generates which are already taxed via the income tax system), we argue that wealth is a legitimate tax base in its own right.

Why a wealth tax

Wealth inequality in South Africa is not only intolerably high, with Gini coefficients of 0.93 in 2010/11 and 0.94 in 2014/15, it is also not reducing. Wealth inequality is much higher than income inequality (which has a Gini coefficient of about 0.67) and significantly higher than global wealth inequality.

In 2015, the wealthiest 10% of South Africa’s population owned more than 90% of the total wealth in the country while 80% owned almost no wealth. These findings resonate with more recent findings documented in reports produced by Oxfam (2018) and the World Bank (2018).

There’s a clear racial dimension to this inequality with an average African household holding less than 4% of the wealth held by an average White household.

It’s a challenge to economic development when the bottom 80% of the population own no wealth, especially when a vibrant middle-class is a key ingredient in economic progression, as evidenced in advanced economies.

Thomas Piketty in his book Capital in the 21st Century indicates that much of the economic success experienced in advanced economies in the 20th century has been as a result of increased ownership of assets among the middle-class. This is certainly not the case in South Africa.

Piketty also stresses that wealth inequality is by no means an accident but a product of patrimonial capitalism.

The case of South Africa is unique. In addition to patrimonial capitalism, the prevailing extreme levels of wealth inequality and low inter-generational mobility of wealth are also a result of the structural inequities created by apartheid. These disparities being passed down from generation to generation.

Evidently, effective measures of redress would strongly warrant the intervention of the state.

We therefore propose that the South African government should consider creating an annual net wealth tax with three objectives. The first would be to collect reliable wealth data. This will reveal what people own and enhance the integrity of the income tax system by allowing SARS to compare people’s income and wealth. The second would be to contribute towards curbing wealth inequality, albeit imperfectly. The third would be to generate government revenue, though we stress that international evidence suggests this is generally low.

The how

The process of creating a net wealth tax in South Africa should ideally begin with a simple form of an annual net wealth tax. We would suggest that the net wealth tax rate should initially be at a low rate (possibly even zero).

This will allow an assessment of who owns what by making wealth disclosure mandatory for all citizens.

This will create an environment of transparency and over time will provide a much clearer picture of the net wealth tax base in South Africa. It would also allow further analysis to help set an effective wealth tax rate that does not promote tax migration and capital flight.

If a non-zero wealth tax rate were to be applied, it should be progressive in nature, for example, by providing a high threshold below which no tax is payable. In turn, this data would provide the South African Revenue Service with improved data to test whether high net worth individuals are being taxed correctly within the income tax system.

The valuation of assets has often ranked high among the list of challenges when creating an effective net wealth tax that keeps costs low. In fact, net wealth taxes have been ineffective in many countries. This has been due to poor or complex methods of valuation, or simply the high costs of administration.

Assets which lend themselves to easy valuation and which could be taxed under a net wealth tax include fixed property. This is already taxed at local government level but could attract an additional national tax. The OECD also supports the idea of taxing property because taxing property has less distortionary effects when compared to other wealth taxes.

Municipal valuations (albeit of varying quality) already exist to provide a good starting point for a national property tax. A national property tax would require a concerted effort to improve the quality of valuation rolls across all municipalities and district councils to avoid the horizontal equity legal challenges seen in other countries (as was the case in Germany).

Cash and some financial assets such as defined contribution retirement funds are easy to value and are thus an easy target for a wealth tax. We would suggest, however, that in an initial net wealth tax, retirement funds should be excluded because of possible distortionary pressures on savings. Currently the retirement of many South Africans is severely underfunded. In addition, it would be inequitable to tax defined-contribution pension funds but not defined-benefit funds (such as the government employees pension fund).

We would also suggest that personal assets such as luxury vehicles, works of art and jewellery be excluded because of valuation difficulties. Worldwide, such assets are under-reported, undervalued and/or hidden.


It’s evident that economic inequality is rife in South Africa. Income and consumption inequalities are high and wealth inequality is even higher – much higher than global wealth inequality. Persistent high wealth inequality has the potential to undermine social, economic and democratic values.

A net wealth tax imposed in a society with notorious levels of inequality and a pattern of class overlaid with race, may not be a panacea for the need to generate sufficient revenue to reduce the deficit before borrowing. However, apart from the revenue collected, it would add considerable legitimacy to the overall tax system. Such a tax policy should accommodate a revenue-neutral shift from taxes on employment to taxes on capital and investment income.

It is not our argument that tax is the only available instrument to address the inequities of income and wealth. Other methods of redress include land reform, the provision of infrastructure and increased access to quality health and education.

The chapter was written by Samson Mbewe, Ingrid Woolard and Dennis Davis. It appears in The state of the nation: poverty & inequality: diagnosis, prognosis and responses edited by Crain Soudien; Vasu Reddy; Ingrid Woolard published by HSRC

DHL is bringing E-shop to Africa E-commerce space, for good

By: Fumnanya Agbugah – Ezeana

World leading logistics company, DHL, on April 11, 2019, launched DHL Africa eShop, an e-commerce application for global retailers to sell goods to Africa’s consumers market. The app brings more than 200 retailers from the United States of America and United Kingdom to an online platform present in 11 African markets which include South Africa, Nigeria, Kenya,Ghana, Rwanda, Botswana and Uganda.

According to TechCrunch, DHL Africa’s eShop will operate using a white label service, Link Commerce owned by shopping startup MallforAfrica. The white label usually refers to a product or a service that is produced by a company and can be sold and rebranded by another marketer, business owner or entrepreneur to make it seem like it belongs to them.

While the company that owns the white labelled product focuses on the technical jargon, a person purchases on a white-labelled service, avoiding the hassle and general stress that comes with learning how to build a solution with little to no knowledge. Same goes for the business owner who can now allocate time and resources to building a solid market plan and connecting with customers, according to a post by FlutterWave.

In addition to MallforAfrica, DHL will also partner with several payment companies, including Nigeria’s Paga and Kenya’s M-Pesa. The company will leverage its existing delivery structure on the continent to get goods to the doorsteps of its clients through its DHL Express shipping, tracking and courier service.

In a statement, DHL Express CEO for Sub-Saharan Africa referred to the DHL Africa eShop app as something that “provides convenience, speed, and access to connect African consumers with exciting brands.” However, the launch of the app will affect Africa’s e-commerce space greatly, especially the Nigerian e-commerce industry that is experiencing a lot of challenges. Several platforms have closed shop and Jumia, one of the country’s leading e-commerce platform plans listing on the New York Stock Exchange (NYSE).

Given Africa’s huge appetite for foreign goods, the launch of DHL’s application could also spell doom for the African e-commerce industry because a lot of people will prefer to buy directly from retailers in the United States and the UK rather than buying from the local online stores for fear of buying fake products.

At the moment, the benefit of this deal to MallForAfrica still remains unclear and all efforts to reach the company to provide more insight on this deal proved abortive.

SOURCE: This story was first published by The Nerve Africa

Innoson tells GTB: Convert the money to shares for us, stop wasting your time

Innoson Motors Limited in Nnewi has advised Guarantee Trust Bank (GTB) to stop deploying more resources into stopping the execution of the court order made against it.

The motor company said the refusal, last Friday, of the Federal High Court sitting in Ibadan to hear or grant the bank an injunction to restrain Innoson from continuing to levy execution against it is a clear indication that the bank had nothing more to do.

Speaking about the case on Monday, Cornel Osigwe, Public Relations Officer of Innoson, advised the bank to convert the debt into shares for Innoson insteading of engaging in wasteful  and desperate means to prevent the execution of court’s verdict.

“GTB’s bid to stop Innoson from taking it over nosedived last week Friday, April 5th, 2019 as the Federal High Court sitting in Ibadan refused to hear or grants it an injunction to restrain Innoson from continuing to levy execution against it; the court also refused to stay execution,” he said.

“Despite the decision of the Supreme Court on February 27th 2019 dismissing the appeal by Guaranty Trust Bank (GTB) and affirming thereby the concurrent judgment of Court of Appeal, Ibadan division and Federal High Court Ibadan which ordered GTB by way of Garnishee Order Absolute to pay Innoson Nigeria Ltd the sum of N2.4 Billion with a 22% interest, per annum, on the judgment sum until the final liquidation of the judgment debt, the bank is yet to comply with this order.

“In order to stop Innoson from continuing with taking over its assets in execution of the aforesaid judgment GTB approached the Federal High Court, Ibadan on Friday, 5th April 2019 and requested the court, through a motion, to stay execution and or for an injunction restraining Innoson from continuing with executing a judgment which the Supreme Court has affirmed when it dismissed the GTB’s appeal against the Court of Appeal’s decision affirming the High Court’s judgment and order in favour of Innoson.

“We have previously stated that in a garnishee proceedings, once an order of garnishee nisi is made, the garnishee is required by law to set the amount involved aside and will not allow the judgment debtor to withdraw from it; and if the order is made absolute, the garnishee pays the money to the judgment creditor and incurs no liability for doing that but if the order is not made absolute the garnishee returns the money to the judgment debtor.

“It will be recalled that the order was made absolute since 29th July 2011 and GTB held unto the money from that time and is using it for its business. It follows that by the time the order was made absolute it was no more the judgment debtor’s money but rather that of Innoson Nigeria Ltd who is the judgment creditor; if a garnishee refuses to comply with the order, then, it becomes a judgment debtor, as GTB has become in the present case, against whom execution of the order will issue.

Innoson Nigeria Ltd is aware that GTB had earlier deposed to an affidavit in the court that its banking operation will be seriously and adversely affected, and also its capital base eroded if it complies with the order of the court.

“Based on the foregoing and in furtherance of the letter to GTB by Counsel to Innoson Nigeria Ltd, McCarthy Mbadugha & Co on March 25th, 2019 that it pays the N2.4B Judgment debt to Innoson Nigeria Ltd with the accrued interest of N6,717,909,849.96, Innoson Nigeria Ltd therefore demands from GTB that if it’s banking operation will be seriously and adversely affected, and its capital base eroded as a result of the N8.8bn judgment debt, that it should as a matter of utmost urgency convert the said sum or part of it into shares and allot same to Innoson Nigeria Ltd. This will save taking it over in the manner Innoson is doing.”

SOURCE: Sahara Reporters

Bandits are jeopardizing the chance of building strong mining business in Zamfara

Conflicts and rural banditry have been a challenge in Nigeria for decades, especially in resource-rich parts of the country. The menace has been traced to the increasing challenge of poverty, unemployment and poor exploitation of resources.

In Zamfara, a northwestern state in Nigeria, thousands of lives have been lost to banditry, which the government believes has been re-enforced by illegal mining. In a bid to address this, the Nigerian government directed that mining activities in Zamfara and other affected states in the country be suspended with immediate effect, citing “intelligence reports that have clearly established a strong and glaring nexus between the activities of armed bandits and illicit miners”. While this is a move to end the killings, it puts the budding mining sector at risk.

Since the news, we have been inundated with phone calls and emails from sector stakeholders, especially the honest and hardworking miners and investors in Zamfara, who are worried sick about what could happen following the Nigerian government’s directive. With just one negative headline, the investments and hard work of several years can be permanently frustrated.

Informal/illegal mining is not new in Nigeria. In fact, it is rampant in several parts of the world. This is because while global extraction trends show that mining operation size matters, it won’t give much needed employment numbers. This reality has made informal mining thrive in several countries of the world, especially places with high poverty rates.

In Nigeria, artisanal or small-scale mining (ASM) is presently largely (<90%) informal, but it offers opportunities for poverty reduction and decent employment. More than 500,000 households (2-4 million people) in the country depend directly or indirectly on artisanal mining for their sustenance. This is similar in several mining economies. As a result, global mining giants have been working with civil societies and governments to find an alternative to banning artisanal mining, an unsustainable option because millions of people rely on it for their livelihood.

Rather, they have been collectively working on programmes designed to bring the, often informal artisanal mining sector, into the formal economy in ways that benefit miners, their communities, the mining sector, as well as their national economies. Such programmes involve registering artisanal miners, helping them organise themselves into associations and co-operatives, and establishing a set of auditable standards for environmentally and socially responsible artisanal mines. This is what Kian Smith has been working on achieving in Nigeria, a country that has many compelling reasons to develop its mining sector.

Despite its economy being the largest in Africa and 21st largest in the world, with a labour force of about 80 million people, poverty level in the country is still high. Unemployment is above 23 percent and national average poverty rate is at 46 percent, with the incidence of poverty (headcount index) highest in some of the mining states of northern Nigeria.

Source: Oxford Poverty and Human Development Initiative’s Global Multidimensional Poverty Index (MPI) Databank

Statistics show that the states with high levels of poverty — Zamfara, Kebbi, Kaduna, Niger, Gombe, Taraba and Niger — have rich mineral endowments and vast ASM activity.

We are concerned that with Zamfara being the highest Nigerian state on the poverty level Index, suspending an important source of income to an already impoverished state may further fuel the insecurity crisis with the inclusion of other criminal activities for sustenance.

Another concern we have is about the Nigerian government handicapping the mining industry and development of Zamfara state by announcing a directive that might see the country indirectly blacklist itself as a mining destination in the world. We believe there are better ways to tackle the insecurity concerns which really stem from poverty.

Is poverty driving ASM or is ASM prolonging the cycle of poverty? It is the area of highest productivity (as we mentioned, 90 percent of the sector’s activity is ASM) in the sector, but least documented contribution to public revenue. How can we tackle the issue of poverty and also increase public revenue? Like most mining economies are beginning to realise, stopping ASM activities is not an option.

By registering artisanal miners as businesses, offering to pay their royalties, building their capacity and giving them transparent and fair markets, Kian Smith Trade & Co. is involved in proffering solutions to the perceived threats by artisanal mining and ensuring the economic impact of their activities is felt. In the last two months, we have registered over 100 artisanal miners with the Corporate Affairs Commission (CAC) as businesses. We have also assisted 72 miners open accounts with Stanbic IBTC Bank PLC. Starting next week, we will be assisting many others to open accounts with Zenith Bank PLC.

We receive calls daily from Zamfara, mostly from miners and dealers looking for assistance in legalizing their businesses and building their capacity.

The cooperation we have enjoyed from these miners, dealers and bankers assures us that despite the violent clashes being reported, people working in the mining sector in Zamfara and other areas that have witnessed violence linked with mining, are hungry for a holistic intervention and want to become a notable part of the gold economy of Nigeria, which Kian Smith is working assiduously to help build.

Meanwhile, Kian Smith continues to source gold from various sources ahead of the June 2019 opening of Nigeria’s first ever gold refinery. We know our Zamfara supply line will have to be suspended for the duration of the security operations in the area or when the government lifts suspension on mining activities in the state. We hope this happens soon, so that the people of Zamfara can continue to enjoy the value we have been able to bring by sourcing gold for our refinery locally.

Kian Smith will continue to work with development organisations, both locally and internationally, to ensure due diligence and safety of miners, as well as curb illegal mining in Nigeria.

SOURCE: The Nerve Africa

Reader Center: GTBANK cannot afford to pay Innoson 8 billion Naira

All the options for GTBANK to overturn the initial ruling ordering them to pay Innoson Motors 2 billion Naira has been exhausted, and the first ruling, compares to the later would have been, from all indications the best ruling the bank would have received, but in the process of trying to avoid paying debts, the money has risen to to 8 billion Naira due to a monthly interest capped at 22%.

Now that they’ve gotten to this point, the questions remains are they going to pay? If yes, how and what are the risks?

Divine Mmeje wrote;

If they try paying that money it will expose them to a lot of risks, that’s their dilemma and even the declared 2018 profit was a pre-tax profit.

The Board chairman should Come to her Bank’s rescue, because if media that is rooted in financial times buys into this, the bank share will at least drop, and it’s not healthy for them.”

Yes this is a good side of it, and further more, it is going to expose them to some financial investigations and lots of loopholes are going to be opened and and it may likely going to attract more questions about their tax declarations and many other financial management within the bank.

Jasper Ahamefule wrote;

“GTB can’t pay that money, it will kill them. Forget that noise about market value. We are talking liquids cash. When it was 2.6 billion they couldn’t pay, is it now that it is 8.8 billion? They can’t even try instalment because that debt is capped at 22% interest. So instalment won’t work.

It is either they pay in full cash or let Innosson take over because at such amount, he becomes the highest shareholder.”

The process of finding out the good answer to this question will be long, but one point is would 8 billion make Mr Innocent Chukwuma the highest shareholder of the bank? Well, according to our readers, that would be determined also by his initial share at the bank (if he has any) and how much share is it.

Divine Mmeje Wrote;

“That would be determine by if he is the highest shareholder, the highest shareholder has how many shares, those should be the question before you say Innoson is the biggest shareholder.

Unless Mr. Innocent has a bigger share prior to now that he can add to this new one, that is the only way he can be the biggest shareholder enough to take over the bank.”

This is open to our readers, what do you think about this developing story?

Have any comment our contribution? Send it to us at infobloomgist@gmail.com Or Whatsapp +2349065647671

Innoson obtains order to shut down GTBank nationwide

Innoson Vehicle Manufacturing Company has obtained an order to shut down all Guarantee Trust Bank, GTB properties all over Nigeria

Innoson Nigeria Limited has obtained a writ of Fifa from the Federal High Court in Awka, Anambra State, against Guaranty Trust Bank (GTB) to effect the judgment given by the Federal High Court in Ibadan and upheld by the Supreme Court of Nigeria. 
This was made known in a press release issued by Cornel Osigwe, the head of corporate communication of Innocent Nigeria Limited.

Writ of FiFa (Writ of Fieri Facias) is a leave of court to execute a judgment obtained by a judgment creditor in a legal action for debt or damages by levying on the property of the judgment debtor.

In 2014, the Federal High in Ibadan had ordered GTB by way of Garnishee order absolute to pay N2.4billion to Innoson with a 22% interest, per annum, on the judgment sum until the final liquidation of the judgment debt.

However, GTB appealed this decision at the appeal up to the supreme court. But, according to Innosson, the Supreme Court on February 27, 2019, dismissed GTB’s appeal and upheld the decision of both Federal High Court and the Appeal Court.

The Statement read: “The Chairman of Innoson Group, Chief Dr. Innocent Chukwuma, OFR has through a Writ of FiFa taken over Guaranty Trust Bank PLC for and on behalf of Innoson Nigeria Ltd as a result of the bank’s indebtedness to Innoson Nigeria Ltd. In a landmark decision on February 27th 2019, the Supreme Court of Nigeria dismissed GTB’s appeal — SC. 694/2014 — against the judgment of Court of Appeal, Ibadan Division.

“The Court of Appeal, Ibadan division had in its decision of 6th February 2014 dismissed GTB’s appeal against the Federal High Court, Ibadan Division.

“Thus, the Court of Appeal affirmed the judgment of the Federal High Court, Ibadan Division which ordered GTB by way of Garnishee order absolute — to pay N2.4billion to Innoson with a 22% interest, per annum, on the judgment sum until the final liquidation of the judgment debt. Rather than obey the judgment of the Court of Appeal, GTB approached the Supreme Court to challenge the Court of Appeal’s decision.

“However in a ruling delivered by Honourable Olabode Rhodes-Vivour JSC on Wednesday, February 27th2019, the Lord Justices of the Supreme Court (JSC) dismissed GTB’s appeal and thus affirmed the concurrent judgment of both the Court of Appeal and the Federal High Court, Ibadan Division which ordered GTB by way of Garnishee order absolute — to pay N2.4billion to Innoson with a 22% interest, per annum, on the judgment until the final liquidation of the judgment.
“The Judgment debt of N2.4bn has an accrued interest as at today of about N6,717,909,849.96 which results to about N8.8 billion.

“Based on the Supreme Court’s decision of 27th February 2019 the counsel to Innoson, Prof McCarthy Mbadugha ESQ, had approached the Federal High Court, Awka Division for leave to enforce the judgment having obtained certificates of Judgment from the Ibadan Division of the Federal High Court.
“Having obtained the requisite leave, the Federal High Court issued the necessary process for levying execution — the Writ of Fifa.”

The motor company and GTB had been in a long legal battled over alleged indiscriminate charges on Innoson’s account with the bank. 

GTB later claimed that Innoson fraudulently brought in vehicle parts with forged documents. However, the motor company denied this allegation, saying the allegation was an effort of defect from the real issue of ineptness against him.

“We have taken over GTBank in Awka and Nnewi,” Osigwe subsequently announced, adding that “other branches are coming soon”.

Additional reporting by Sahara Repoters, Frank Ovie and Linda Bassey

Buhari’s victory is dangerous for Nigeria’s economy – Analysts

Nigeria’s President Muhammadu Buhari has been declared winner of the 2019 presidential poll by INEC, the country’s electoral commission defeating his closest rival Atiku Abubakar with about four million votes. While the incumbent is currently being congratulated on his re-election by fellow leaders across the world, Bloomberg says his victory is bad for the Nigerian economy.

“If President Muhammadu Buhari wins another four-year term it will probably mean more political interference in Nigeria’s economy and slower growth,” research by Bloomberg Economics shows.

This sentiment was echoed by ratings agency Moody’s in a note shared with TheNerve Africa.

“Nigeria’s credit challenges remain and include a low growth environment, very high exposure to fluctuations in oil prices of government revenues and export earnings, weak institutions, and high levels of corruption,” said Aurelien Mali, Vice President at Moody’s.

Since 2015 when Buhari was first elected president, the country has been in dire economic strait, going into recession and slightly recovering at a time regional neighbours were posting impressive growth. Although a fall in oil prices took its toll on the nation, policy uncertainty under Buhari and his blatant disregard for the rule of law scared investors away. Worse, any time he is called into question over actions that are detrimental to the economy, he gets defensive. Last year, foreign direct investment into Nigeria, Africa’s largest economy dropped 36 percent to $2.2 billion. This decline saw Ghana overtake Nigeria as the country with the highest FDI in West Africa, recording an inflow of $3.3 billion. Nigeria also became the country with the highest number of poor people in the world, overtaking China. Unemployment also rose to 23.1 percent in the third quarter of 2018.  

President Buhari’s fight against corruption has also been less than impressive, with his party members facing allegations of corruption seem to be getting a free pass. It took more than two years of outcry and the nearness of the presidential poll for the country’s Economic and Financial Crimes Commission to arrest former Secretary to the Nigerian government Babachir Lawal who was sacked over corruption allegations. The governor of Nigeria’s Kano State had a key role to play in ensuring the state with one of the highest number of voters in the country support the president’s re-election bid, so when he was caught on video receiving wads of dollars, President Buhari, who was once known to abhor corruption was convinced the video must have been doctored. Governor Umar Ganduje repayed Buhari’s decision to look away with more than a million votes.

There are other members of President Buhari’s ruling All Progressives Congress who are under investigation or even undergoing trial for corruption, but were candidates in the just concluded National Assembly elections. Like the chairman of the ruling party said, once politicians join the party, their sins are forgiven. But not for long; Buhari’s re-election did not come easy. He garnered 15,191,847 votes against Atiku’s 11,262,978. He won 19 states against Atiku’s 17, plus the capital Abuja. This is despite the corruption-ridden label that seem to have stuck on the latter and his party, the PDP.

Thus, the president is expected to review his first term in office and strive to correct his mistakes and put the country back on a path of economic prosperity. Despite failing to fulfill his campaign promises, he was re-elected. That should count for something.

“The new Administration will intensify its efforts in Security, Restructuring the Economy and Fighting Corruption,” President Buhari said in his victory speech, although he believes a foundation has been laid to achieve improved security, fight corruption and grow the economy. But he seems to concede that nepotism reigned during his first term and so, he would correct this.

“We will strive to strengthen our unity and inclusiveness so that no section or group will feel left behind or left out,” he promised.

Regardless of what they think a Buhari second term means for the country, analysts see a better year for Nigeria in 2019. According to Bloomberg Economics, the opening of the Egina offshore oilfield operated by Total, this month and the Dangote refinery expected next year will deliver a near-term boost. The United Nations Conference on Trade and Development (UNCTAD) had also stated this in its Global Investment Trends Monitor released in January.

But analysts doubt his government would be able to build on gains from such projects. Bloomberg Economics expects Nigeria to keep losing ground in real GDP per capita against its peers in Sub-Saharan Africa.

One way to start well is ensuring it does not take him another six months from May 29, to set up his cabinet. The Economic Recovery and Growth Plan (ERGP) is an important plan his government should see through; he needs to ensure capable hands are appointed to his cabinet to ensure the country benefits from the plan.

SOURCE: The Nerve Africa

Between MTN CEO and the Ugandan Government

The sudden rift between the Ugandan Government and the South African Telecom giant MTN is raising questions all over the country. The rift has developed so deep to the point of deporting The Telecom CEO
Wim Vanhelleputte.

Sudden deportation

Ugandan police say the head of telecommunications company MTN Uganda – a unit of South Africa’s MTN group – has been deported for national security reasons.

The company’s chief executive, Wim Vanhelleputte, was put on a plane to his native Belgium on Wednesday evening.

There has been no official explanation.

Last month, three foreign nationals working for MTN Uganda were also deported.

One of them, Elsa Mussolini, said she had been accused of inciting violence and funding the Ugandan opposition politician, Bobi Wine.

The musician turned politician is a critic of President Yoweri Museveni.

MTN was taken unaware

South African telecoms giant MTN has said it is unaware of the reason behind the deportation of its CEO from Uganda.

Reports emerged on Thursday night that Wim Vanhelleputte, a Belgian national, was driven to the international airport and forced onto a flight out of the country.

The authorities say it is in relation to an on-going investigation into claims that staff at the company have worked to undermine Uganda’s national security.

In January, three other senior managers were also deported.

At the time, Elsa Mussolini, the company’s former General Manager for Mobile Financial Services, said she was deported over accusations she had been funding the operations of the opposition politician Bobi Wine.

But MTN, which operates in Africa and the Middle East, says it has not been given precise reasons for its CEO’s deportation.

The company has also been locked in a public row with the government over the renewal of its operating licence.

President Yoweri Museveni questioned why the industry regulator had set the renewal fee at $58m (£45m) – down from $100m.

Last month, President Museveni met the MTN Group CEO Rob Shuter on the sidelines of the World Economic Forum in Davos.

After the meeting, the president tweeted that the company needs to list shares on the Uganda Securities Exchange to ensure some of its profits remain in the country.

He also accused MTN Uganda of under-declaring call volumes to avoid paying tax.

The company said in a statement that it is fully committed to respecting and operating within the laws of Uganda.

While progress remains to be made, Nigeria has a growing high-technology sector

Nigeria isn’t buying into Africa’s free-trade area – but should

In March 2018, 44 African countries took perhaps the most significant step yet to advance a vision for greater intra-African trade by signing the Framework Agreement on the African Continental Free Trade Area (AfCFTA).

While progress remains to be made, Nigeria has a growing high-technology sector
While progress remains to be made, Nigeria has a growing high-technology sector. Photo: Nene Obichie/Wikipedia, CC BY

By January 2019, that number had grown to 49 out of the 55 AU member states, of which 16 had completed steps to ratify the agreement. The ambitious project seeks to remove tariffs on 90% of the goods traded between the signatories to the agreement, and gradually eliminate other non-tariff barriers to trade in goods and services.

Beyond the initial hype surrounding the Kigali summit of 2018, Africa has not been immune to the debates around the economics of free trade that has come to define the 2010s. In Abuja, Nigeria’s capital, policymakers and lobbyists worry about the collapse of tenuous local industries and of losing economic clout in the region. Nigeria is Africa’s largest economy, making it the most notable non-signatory to the AfCFTA deal. The president of Nigeria’s largest labour union – which has successfully lobbied against Nigeria’s participation in AfCFTA – has described the AfCFTA as “an extremely dangerous and radioactive neo-liberal policy initiative… that seeks to open our seaports, airports and other businesses to unbridled foreign interference never before witnessed in the history of the country”. Yet, Nigeria currently has the largest concentration of people living in extreme poverty in the world, with the worst hit group being children and teens under the age of 15. Even worse, this number is growing. Something has to give.

As always, this is a story of untapped potential. Trade between the 55 African Union member states is about 18% of total exports from the continent, compared to 69% in Europe, 59% in Asia and 31% in North America. This is particularly important when considering that manufactured goods make up a much greater proportion of intra-Africa trade than trade with the rest of the world which is mainly focused on raw materials. Despite this, and the fact that Africa is the second most populous continent, Nigeria’s main trade partners are all from Europe, Asia and the Americas.

To be clear, and in contradiction to concerns about loss of sovereign power, the AfCFTA as currently proposed is about economics, not politics. Not only is the AfCFTA is a basic trade agreement – it is neither a customs union nor a single market – but also, Nigeria is a regional military and political power and so has no foreign interference resulting from AfCFTA to fear. Furthermore, free trade agreements have numerous precedents all over the world, none of which has been directly implicated in the sort of collapse in sovereignty being alluded to. It is in fact undeniable that Lagos State, Nigeria’s most economically successful region, owes its rise to its historical status as Nigeria’s premier trading seaport. Lagos’ economy has continued to grow consistently since the 1880s and today employs more people than ever.

Lagos is Nigeria’s largest city in population and economic terms. Ulf Ryttgens/WikipediaCC BY

Boosting manufacturing, innovation and prosperity

As Nigeria’s government continues its consultation, it is important to note some of the potential benefits of the AfCFTA.

  • Nigeria’s isolationism makes it difficult for local businesses to scale abroad and thus makes them less attractive for foreign direct investment. By giving businesses access to a larger market beyond their home countries, the trade agreement would allow the establishment of industries in Africa that are simply not profitable now, foster the scaling of industries and lead to the development of entirely new industries to take advantage of the growth in inter-African relations.
  • With its rapidly growing population of almost 200 million occupying a territory almost twice the size of France, Nigeria simply has more workers and consumers than anywhere else in Africa. For many businesses, there is no other place in Africa that can offer such scale. This will provide a competitive advantage to Nigeria in firm considerations of where to cite facilities and do business.
  • Liberalising trade facilitates the sort of knowledge sharing that is crucial for innovation. Multinational firms often have greater expertise than local firms, gained from operating in several countries over long periods. These firms, attracted by the AfCFTA will expose local firms to their best practices and technologies often through partnerships and sometimes through competition. This sort of exposure will challenge entrepreneurs in the country and give them greater access to the skills and partnerships they need to be dynamic in today’s world.
  • Sheltering firms from foreign competition removes the incentives for these firms to be more competitive and consequently produce better products for consumers at cheaper prices. It also leads to market distortions. For instance, supermarket shelves in Africa’s biggest cities are populated with toothpicks, toilet paper, rice, and chocolate imported from Europe and Asia when these goods can otherwise be sourced cheaply from Nigeria or other neighbouring markets in the absence of tariffs. These manufactured products are sold at a premium and because their production process is not restricted to extraction alone, they are more labour-intensive and consequently create more jobs. These jobs are lost because it is often easier to trade with other continents than it is to carry out intra-Africa trade.

There is also the case to be made for entrepreneurship in Nigeria. About 40% of Nigerians aged 18-64 are entrepreneurs, almost three times the global average. As evidenced in Alaba International Market, perhaps the biggest new venture incubator in the world, most of these entrepreneurs work in retail. The AfCFTA would give them more options for sourcing and consequently drive their costs down. Non-retail entrepreneurs would also benefit from the ability to build more sophisticated value chains for improved operations.

It is important to acknowledge concerns about the industrial decline. As with any measure of this scale, AfCFTA is not without downside risk for Nigerian businesses and its economy. Perhaps the biggest such risk associated rests on the fact that Nigerian businesses are hobbled by inadequate power and transportation infrastructure and may well suffer when exposed to the competition that a free-trade agreement fosters. Nigeria’s policymakers would do well to focus on the root of the problem, not its manifestation. Rejecting the trade agreement in an attempt to the country’s struggling manufacturing industry would be bound to impede economic growth.

In 1962, two years after successfully advocating for national independence, Nnamdi Azikiwe, Nigeria’s first president, imagined that:

“by abrogating discriminatory tariffs, we create a free trade area over the entire continent and thereby expand the economy of all African countries involved, thereby raising living standards and ensuring economic security for African workers”.

Indeed, the roots of the AfCFTA can be traced back to two bedrock conventions, the Lagos Plan for Action for the Economic Development of Africa (1980) and the Abuja Treaty Establishing the African Economic Community (1991). Perhaps Nigeria’s policymakers should look to its history for a bold vision of its future.

SOURCE: The Conversation/global

There is everything wrong with the new Gillette advert

Losing customers for targeting ‘toxic masculinity’

Gillette is facing serious backlash one day after debuting its “We Believe” ad campaign combating “toxic masculinity.”

Many critics charged it assumes most men are misogynistic.

According to a press release, the ad begins with “a compilation of actions commonly associated with ‘toxic masculinity,’” including online bullying, laughing at misogynistic TV shows and “mansplaining” an idea to a female work colleague.

But “something changed” not long ago, the ad says, referring to the #MeToo movement. It shows clips of men defending others from bullying and hurtful behavior.

A narrator says: “We believe in the best in men. To say the right thing, to act the right way. Some already are. But some is not enough. Because the boys watching today will be the men of tomorrow.”

In a London Daily Mail column, Piers Morgan noted the Gillette ad came the same week as an American Psychological Association report that condemned traditional masculinity as “harmful.”

Morgan said that, until now, he was a prolific consumer of Gillette products because of the company’s celebration of manhood in its ads over the years. But no more.

He said the “incessant poisonous war on gender has culminated in the very word ‘man’ being decried as an abusive term, to the extent that Princeton University actually issued a ridiculous four-page memo instructing students to only use gender-neutral language.”

The APA was outdone, he said, by the Gillette ad, calling it an “ugly vindictive two-minute homage to everything that’s bad about men and masculinity.”

He said the “subliminal message is clear: men, ALL men, are bad, shameful people who need to be directed in how to be better people.”

“It’s one of the most pathetic, virtue-signalling things I’ve ever endured watching.”

Rush Limbaugh told his listeners on Tuesday he was being overwhelmed with email “from people who are beside themselves over this new Gillette commercial aimed at millennial men.”

“And, by the way, I don’t blame you. If you are among the crowd righteously offended and indignant over this, Gillette is obviously being run by millennials,” he said. “This is the danger. Millennials grow up and they get management jobs at various corporations, and they become in charge of advertising and marketing, and this is what’s happening now.”

Limbaugh continued:

And now you have a bunch of millennials that are in marketing departments and ad agencies. So it’s a double whammy. The people putting together the marketing plan, the advertising plan are themselves the same age-group being targeted. And they, of course, are the product of a bunch of ill-education and political correctness that they have been indoctrinated with while at college.

And so they really believe that men are bad news as designed; that men in their natural state are predators; that men in their natural state exhibit masculinity that is toxic and dangerous to women and children, and it needs to be erased.

So you’ve had a bunch of people grow up who’ve been taught this and believe this, just like you have a whole bunch of white people that have been raised to believe that they are the scourge of earth and that they and their whiteness have had an unfair privilege and that they themselves have to accept the blame for the suffering they have caused all minorities on earth. And they end up believing it, too, and they end up becoming advertising directors.

Fox News cited a comment on YouTube, where the ad had nearly 3 million views by Tuesday morning.

“As a very successful, loving, and responsible husband (married 32 years) and father of two confident young adults (male and female), I find this ad INCREDIBLY insulting,” the commenter wrote. “Gillette has NO BUSINESS assuming most men are bad and misogynistic. I’m not buying ANOTHER product from these self-important morons. How DARE you, Gillette…”

Another wrote, “How to insult 99% of your market lol.”

Gillette’s brand manager said the company felt compelled to comment on “what’s happening today.”

But some customers, Fox News said, vowed to stop using Gillette’s products, which apparently is benefiting the Dollar Shave Club.

“Welcome to the Club,” the shaving and toiletries brand wrote in a Twitter post.
Read more at https://mobile.wnd.com/2019/01/gillette-just-cut-own-throat-with-man-hating-ad/#fDuyxgQcBQrEo2Wj.99

Companies will do better if employees are not silenced

In “dad’s army”, a British sitcom about a home-defence force, Sergeant Wilson would often query his commander’s various orders with the languid phrase “Do you think that’s wise, sir?” His scepticism, although it was often ignored, was usually justified.

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Many employees must be tempted to echo Sgt. Wilson on a daily basis when they see their bosses headed down the wrong track. But caution, for fear of appearing insubordinate or foolish and thus possibly at risk of losing their jobs, often leads workers to keep silent.

A culture of silence can be dangerous, argues a new book, “The Fearless Organisation”*, by Amy Edmondson, a professor at Harvard Business School. Some of her examples are from the airline industry. One was its deadliest accident: a crash between Boeing 747s in the Canary Islands in 1977 when a co-pilot felt unable to query his captain’s decision to take off based on a misunderstanding of instructions from air-traffic control. Another case was that of the Columbia space shuttle in 2003; an engineer who may have diagnosed damage to the shuttle’s wing before the flight felt unable to speak as he was “too low down” at nasa.

The stakes may be lower than life or death in most organisations, but companies also suffer when people keep schtum, Ms Edmondson believes. The mis-selling scandal in 2016 at Wells Fargo, an American bank, for example, related to its culture. The lender encouraged staff to persuade clients to buy additional products and for a while achieved levels of “cross-selling” that were twice the industry average rate.

Pressure on employees was intense. At some branches, staff were not allowed to leave until they met their daily target. Bonuses were based on sales figures and people who failed to meet the targets were fired. This was not a place where workers were likely to question the wisdom of the strategy. It is hardly surprising that employees resorted to subterfuge such as opening fake accounts to meet their goals.

Similar problems emerged at Volkswagen, which was caught up in a scandal over diesel emissions from 2015. The engines of its diesel models did not meet American emissions standards and engineers devised a system to fool the regulators. Ms Edmondson says the company’s culture had been one based on intimidation and fear; Ferdinand Piëch, its longtime boss, boasted of telling engineers they had six weeks to improve the bodywork fitting on pain of dismissal. In the circumstances, engineers were understandably unwilling to mention the bad news on emissions standards and instead worked around the problem.

In a corporate culture based on fear and intimidation, it may appear that targets are being achieved in the short term. But in the long run the effect is likely to be counterproductive. Studies show that fear inhibits learning. And when confronted with a problem, scared workers find ways of covering it up or getting around it with inefficient practices.

The answer is to create an atmosphere of “psychological safety” whereby workers can speak their minds. In a sense, this is the equivalent of Toyota’s “lean manufacturing” process, which allows any worker who spots a problem to stop the production line.

This does not mean that workers, or their ideas, are immune from criticism, or that they should complain incessantly. The book describes how the success of the second “Toy Story” film was due to a rigorous editing process, in which the early script was revamped. Pixar, the production firm, created what it called a “Braintrust” to give feedback to film directors. The rules were that feedback should be constructive and about the idea, not the person, and that filmmakers should not be defensive in response.

And psychological safety is not about whistleblowing. Indeed, if an employee feels the need to act as a whistleblower by speaking to external authorities, that suggests managers have not created an environment within the firm where criticism can be aired.

Nor is such a culture only about safety or avoiding mistakes. As mundane tasks are automated, and workers rely on computers for data analysis, the added value of humans will stem from their creativity. But as Ms Edmondson’s book amply demonstrates, it is hard to be either constructive or creative if you are not confident about speaking out.

* Subtitled “Creating Psychological Safety in the Workplace for Learning, Innovation and Growth”. Published by Wiley.This article appeared in the Business section of the print edition under the headline “Permission to speak”

SOURCE: The Economist

Briefing: Here are 10 things to know about Access Bank, Diamond Bank merger

The management of Diamond Bank on Monday announced its merger with Access Bank.

A statement by Uzoma Uja, the bank’s Secretary/Legal Adviser, said the transaction will be completed by the first half of 2019.

PREMIUM TIMES brings you ten things to note about the deal and the banks involved:

1. Access Bank is not new to merger and acquisition. Beginning 2011 and effectively in 2012, Access Bank took over the defunct Intercontinental Bank Plc. Although the integration was alleged to be riddled with controversies as reports said over a thousand staff of Intercontinental Bank were laid off during the process, the bank emerged stronger and bigger after the acquisition.

2. With the new merger, both banks (Access and Diamond) hope to leverage on their distinct potentials to build a stronger bank. Access Bank boss, Herbert Wigwe, said both banks have complementary operations and similar values, and a merger with Diamond Bank, with its leadership in digital and mobile-led retail banking, could accelerate Access’ strategy as a significant corporate and retail bank in Nigeria and a Pan-African financial services champion.

3. The merger, the banks hope, will create Nigeria and Africa’s largest retail bank by customers.

4. The Board of Diamond Bank said it believes that the merger is in the best interest of all stakeholders including, employees, customers, depositors and shareholders and has agreed to recommend the offer to Diamond Bank’s shareholders.

5. The merger has however not been completed. The bank said the completion of the merger is subject to certain shareholder and regulatory approvals.

6. Access Bank says it has a strong financial profile with attractive returns and a robust capital position with 20.1 per cent CAR as at September 30, 2018.

7. The proposed merger would involve Access Bank acquiring the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares in Access Bank via a Scheme of Merger.

8. Based on the agreement reached by the boards of the two financial institutions, Diamond Bank shareholders will receive a consideration of N3.13 per share, comprising of N1.00 per share in cash and the allotment of two (2) New Access Bank ordinary shares for every seven (7) Diamond Bank ordinary shares held as at the implementation Date. The offer represents a premium of 260% to the closing market price of N0.87 per share of Diamond Bank on the Nigerian Stock Exchange (“NSE”) as of December 13, 2018, the date of the final binding offer.

9. Also important is that immediately following completion of the merger, Diamond Bank would be absorbed into Access Bank and it will cease to exist under Nigerian law. The current listing of Diamond Bank’s shares on the NSE and the listing of Diamond Bank’s global depositary receipts on the London Stock Exchange will be cancelled, upon the merger becoming effective.

10. The new transaction is expected to be completed in the first half of 2019.

How long to be a millionaire in different countries?

How long does it take to earn $1m in different countries?

INFLATION may have ruined “How to marry a millionaire” as a good film title, but there is still something magical about $1m. How long would it take for an average person to earn that special sum? To find out The Economist looked at how much the main breadwinner in an average household makes each year (before tax). 

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On this measure, America creates the swiftest millionaires, and also the most (around 5m households, or 4% of the total). South of the border, Mexicans can expect to toil for three centuries to earn the same. For those struggling to imagine $1m, consider this: stacked up and denominated in $100 notes, it would reach over a metre high and weigh ten kilograms (22 lb).

Two international banks close Nigerian offices

HSBC and UBS closed their offices in Nigeria. The Central Bank of Nigeria said this in a report on Friday as it revealed foreign investment had fallen sharply from a year ago.


The CBN said foreign direct investment in Nigeria fell to N379.84bn ($1.2bn) in the first half of the year from N532.63bn ($1.7bn) a year earlier.

It did not give reasons for the banks’ closure.

The central bank s aid the outlook for the Nigerian economy in the second half was “optimistic” given higher oil prices and production but rising foreign debts and uncertainty surrounding the 2019 presidential election were drawbacks, according to Reuters.

Investor confidence in the country has been shaken since the central bank in August ordered MTN to bring back $8.1bn to the country, part of the profits the South African telecoms firm sent abroad.

A HSBC research note dated July 18 said a second President Muhammadu Buhari term “raises the risk of limited economic progress and further fiscal deterioration, prolonging the stagnation of his first term, particularly if there is no move towards completing reform of the exchange rate system or fiscal adjustments that diversify government revenues away from oil.”

The CBN also said three lenders failed to meet its minimum liquidity ratio of 30 per cent, without naming them.

It added that non-performing loans had dropped to 12.4 per cent as of June 2018 from 15 per cent a year ago, still a long way above its five per cent threshold.

“To further consolidate on the improvement, the Central Bank of Nigeria directed banks to intensify efforts at debt recovery, realisation of collateral for lost facilities and strengthening their risk management processes,” it said in the report.

SOURCE: Sahara Reporters

Making workplace better for disabled employees

Companies can make work far easier for disabled employees, if they want to.


One consolation for Mr Takeuchi was his work environment and the support it gave. That was because he ran his own company—GoCardless, which processes direct-debit payments for businesses. The firm’s board waited patiently while his health improved. It also helped that the business could move offices. At the previous site, the desks were tightly packed and it was difficult to manoeuvre a wheelchair. The new office is more open and has parking spaces, so he can drive a specially adapted car to work. He comes in later than others, as it takes a long time to get ready in the morning.

Few disabled people have such an accommodating workplace. In 2015, 35% of Americans with physical disabilities were employed, compared with 62% of those without. A recent survey by the Toyota Mobility Foundation of 575 wheelchair users across five countries (America, Brazil, Britain, India and Japan) found that 39% had been unable to work because of mobility problems. Only 4% felt they had suffered no negative effects while working or job-hunting.

Even the most treasured employees face difficulties. August de los Reyes is a designer who works for Google, having previously been employed by Pinterest and Microsoft. When he was at Microsoft, he had an accident that broke his back, leaving him paralysed from the chest down. He is fortunate to have a powered wheelchair and nursing assistants that can help him get to work. But travelling for business now is much harder than it used to be, he says; planes cram more people in, for instance. His wheelchair needs 1.5 metres to turn 360 degrees, making cramped spaces very tricky.

Mr de los Reyes’s difficulties emphasise the importance of his area of expertise: design. Disability, he argues, is simply a mismatch between a person’s ability and their environment. In that sense, disability is designed into the world. Imagine that your home had been built by cats. Entrances and exits would be small flaps; that is all a cat would need. Humans would be trapped inside, rendered immobile by a particular environment.

In her book, “Mismatch: How Inclusion Shapes Design”, Kat Holmes recounts a wartime example of how a rigid approach to design can go wrong. America’s Air Force took the bodily measurements of its pilots and used the average to design the cockpit. After many unexpected crashes, a researcher took ten of the most important measures and found out how many of 4,000 pilots matched all of them. The answer: zero. Instead of forcing everyone to conform to the average, the best approach was to make the seat adjustable.

Wheelchair ramps are probably the most obvious example of a design change aimed at making environments more inclusive. But several everyday objects and processes have their origins in approaches designed to deal with disability. The original intent of the tv remote control was to help people with limited mobility. Vint Cerf created some of the early email protocols in part to find a way to communicate with his wife; he was hard of hearing and she was deaf. Some of the drive to develop speech recognition and voice commands came from the need to help disabled people.

Ms Holmes says the ideal is “universal design”, which creates an environment that can be used in the widest possible range of situations without any need for adaptation. For disabled workers, this means that all the elements of a workplace need to be accessible: entrances, lifts, meeting rooms, coffee facilities and, not least, toilets. If it is difficult for people to travel to meetings, firms must provide videoconferencing. And disability is not just about mobility. People with poor vision can be helped by increasing the colour contrasts on computer displays, for example.

Unless employers are aware of these problems, however, they will not try to solve them. And unless they hire people who are disabled, they will not find out how helpful innovative design can actually be. In the right businesses, such as consumer electronics, that unfamiliar perspective could even help companies come up with better products.

SOURCE: This article was first published on The Economist with the title: Better by design.

MTN is Africa's largest mobile phone company

$2bn Nigeria telecoms dispute delayed

A hearing between telecommunications firm MTN and Nigeria’s central bank has been adjourned until December.


The Central Bank of Nigeria has accused the South African company of illegally transferring $8.1bn (£6.3bn) abroad, which is against the country’s foreign exchange regulation.

MTN says it has done nothing wrong.

The Nigerian government has also demanded $2bn in related taxes from the telecoms giant, which makes about a third of its annual core profit in Nigeria.

Last week, Nigeria’s Finance Minister Zainab Ahmed said the fine had been damaging for Nigeria.

Speaking at the 24th Nigerian Economic Summit in the capital, Abuja, she added that investors should not be worried that they would be next.

Cover photo: MTN is Africa’s largest mobile phone company. Photo: Getty Images

Coke to launch sugar-free fanta in Kenya

Soft drinks Company Coca-Cola Beverages Africa (CCBA) is expanding its sugar free range of beverages targeting increasingly health-conscious consumers.


The company says it will next month introduce Fanta Zero adding to the existing Sprite Zero, Stoney Zero and Coke Zero being sold in Kenya.

“We will be bringing Fanta Zero in two weeks completing the range of Zero sugar soft drinks already available in Kenya,” said CCBA managing director Daryl Wilson.

Coca-Cola has been aggressively diversifying its soft drinks in Kenya including the introduction of its milk-juice blend under the Minute Maid range.

The milk infused juice was part of the line-up from the new Sh2.7 billion production line that allows for hot fill drinks, hence removing the need for preservatives.

“We are evolving our recipes to offer drinks that provide benefits like nutrition and hydration; and reduction of sugar by reformulating the sugar content in some of our products,” said Coca-Cola.

The water range has also been diversified to include flavoured sparkling water, which according to Mr Wilson, will be expanded in the near future to include flavoured still water.

In July, the soda maker introduced a lemon-flavoured carbonated drink dubbed Schweppes +C geared at reaching the adult consumer not served by its existing soda range.

The company has been forced to look for alternatives for its core business mode to cater for depressed global sales for soda as more and more consumers push for healthier drinks given the changing lifestyles.

Coca-Cola is banking on innovation and diversification of its soft drinks products in the country to grow sales.

In 2016 and 2017, the company invested Sh9.3 billion in its production and packaging lines to cater for the new brands alongside its mainstay soda, juice and water products.

According to the firm, its investments in Kenya have included Sh8.5 billion ($85 million) in infrastructure and Sh4.4 billion ($44 million) in distribution over the past five years.

Cover photo: A Fanta production line at the Coca Cola plant in Nanjing, China. Coca-Cola has been diversifying its soft drinks in Kenya. PHOTO | AFP 

REVEALED: Nigerian government is a part owner of MTN

The federal government of Nigeria is a part owner and shareholder of the troubled telecommunications giant, MTN Nigeria, checks by PREMIUM TIMES have shown.

MTN Nigeria office

The details, which is not entirely new but largely unknown to many analysts and Nigerian citizens, are coming to the fore amidst a long-running row between the Nigerian authorities and the telecom firm.

The Central Bank of Nigeria had in August sanctioned MTN Nigeria and four commercial banks for alleged financial infractions.

The CBN demanded a refund of about $8.13 billion (about N2.5 trillion at N306.15 to a dollar) allegedly repatriated illegally out of Nigeria through four banks, including Standard Chartered Bank, Stanbic-IBTC, Citibank and Diamond Bank.

The banks were also ordered to refund various amounts totaling N5.87 billion.

While Standard Chartered was asked to refund N2.5 billion, Stanbic IBTC was to refund N1.9 billion; Citibank, N1.3 billion; and Diamond Bank was asked to refund N250 million.

The banks were accused of committing “flagrant violation of extant laws and regulations of the Federal Republic of Nigeria, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 and the Foreign Exchange Manual, 2006.”

Details showed about $35.5billion was repatriated by Standard Chartered Bank based on illegally issued CCIs, while about $2.6billion, $1.8 billion and $348.9million fraudulently issued by Stanbic IBTC, Citibank and Diamond Bank respectively between 2007 and 2015.

Besides, the CBN said further investigations revealed that on account of illegal conversion of MTN shareholders’ loan to preference shares (interest free loan) of $399.6million, about $8.13 billion was illegally repatriated by MTN.

Further details showed MTN shareholders invested about $402.6million between 2001 and 2006 through the inflow of foreign currency cash transfers and equipment importation evidenced by the CCIs issued by Standard Chartered, Citi Bank and Diamond Bank.

Although the affected banks denied wrongdoing, by September, the CBN had debited the banks.

At the height of the controversies generated by the development in September, MTN was slammed a separate sanction by Nigeria’s attorney general to the tune of about $2 billion dollar over tax concerns.

The telecoms firm took the matters to court and is now negotiating with the apex bank for a favourable resolution.

Nigerian government’s Investment in MTN

In the middle of the controversies, there have been insinuations in and outside the media that the telecoms giant is being persecuted by the Nigerian authorities. A few analysts suggested, even, that the matter would have been otherwise if the nation had a major stake in the company, aside being chiefly a regulator.

Checks by PREMIUM TIMES Wednesday, however, showed that the Nigerian government is an investor and stakeholder in MTN Nigeria, through the Nigeria Sovereign Investment Authority (NSIA), the nation’s investment agency.

PREMIUM TIMES searched through the annual report and account of the Nigeria Sovereign Investment Authority (NSIA) between 2014 and 2016 and details showed that the nation has investment in MTN Nigeria.

Titi Olubiyi, the NSIA spokesperson, also confirmed to PREMIUM TIMES Wednesday night that the agency’s investment in the telecom giant, which commenced in 2014, is still valid.

The NSIA came to being on May 27, 2011, after the then president signed the Nigeria Sovereign Investment Authority bill into law.

The NSIA was created with the mandate of driving sustained economic development for the benefit of all Nigerians while its vision is anchored on building a savings base for the Nigerian people, enhancing the development of Nigeria’s infrastructure and, ultimately, providing stabilisation support in times of economic stress occasioned by depleting oil revenues.

When probed during a telephone chat Wednesday, Mr Olubiyi disclosed that details of Nigeria’s investment in MTN could not be accessed by PREMIUM TIMES but the agency is aware of the rows between the government and MTN.

The spokesperson added that having done its due diligence and market analysis adequately prior the investment, the NSIA is convinced that its investment in MTN and other conglomerates it invested on behalf of the Nigerian government is secured.

MTN Nigeria is 75.81 percent owned by MTN International (Mauritius) Limited (MTNI); 18.7 percent held by Nigerian shareholders through special purpose vehicles; 2.78 percent owned by Mobile Telephone Networks NIC B.V and 1.76 percent owned by Public Investment Corporation SOC Limited. https://www.mtnonline.com/about-mtn/corporate-information

It is not clear why the government would not want to disclose the size of its share in the company although it is clear public funds were used for the acquisition.

It is clear however that its share would be under 18.7 per cent given the spread of equities.

On Tuesday, MTN Group warned shareholders to exercise caution in dealing with the company’s securities amidst plans to settle amicably with Nigerian authorities.

“They (shareholders) are advised that MTN Nigeria Communications Limited continues to engage with the relevant Nigerian authorities to ensure a mutually acceptable resolution to the matters concerning the Central Bank of Nigeria and the Attorney General of the Federal Republic of Nigeria,” the telecom group said in a disclosure sent to the Johannesburg Stock Exchange, JSE, South Africa, where it is listed.

“Accordingly, shareholders are advised to continue to exercise caution when dealing in the Company’s securities until a further announcement is made,” it added.

Ubah, Kashamu, others top list of Nigeria’s non-paying debtors

The Asset Management Corporation of Nigeria (AMCON) on Monday released the list of debtors it claimed have failed to negotiate successfully with the corporation.


The list, which contains about 105 names, came months after the asset management company said it would need the support of other relevant agencies to ensure that obligors pay up their debts.

The managing director and chief executive of AMCON, Ahmed Kuru, had in July promised to publish the list of delinquent debtors and directors who have failed to reach or refused to reach settlement resolution with the corporation.

Mr Kuru said after failed negotiations, AMCON would name, shame and embark on take-over of properties of delinquent debtors.

Top on the list published by AMCON on Monday is Capital Oil and Gas Industries Limited owned by Ifeanyi Ubah, with its current exposure put at N115 billion.

It was followed by NICON Investments Limited owned by Jimoh Ibrahim, with N59 billion exposure; Bi-Courtney Limited owned by Wale Babalakin, with over N40 billion; Josephdam & Sons Limited owned by the Kuteyi family with N39 billion exposure; and Tinapa Business Resort of Cross River State Government, with N30 billion exposure.

They are the biggest debtors on the list.

The name of a former minister of power, Barth Nnaji, appeared alongside others as main promoters of Geometric Power which owes N29 billion. Mr Babalakin, once again, was named as the main promoter of Roygate Properties, which owes over N28 billion. Similarly, Shell Development Petroleum Company, promoted by Shell Staff, had its exposure put at N26 billion.

Former governor of Enugu State and Peoples Democratic Party Enugu East Senatorial Candidate, Chimaroke Nnamani, also appeared on the list with a debt of N42 billion owed to AMCON under the names of Iorna Global Resources, Sammy Beth Interbiz Limited, Camden Resources Limited, Riverside Logistics Limited and Rainbownet Limited.

The Olofa of Offa, Gbadamosi Muftau, was also named with a debt of N12 billion under Zarm Stores Limited just as a former CEO of Intercontinental Bank, Erastus Akingbola, was named with over N10 billion exposure under the company Octopus Trust Nigeria Limited.

Also on the list of debtors is Buruji Kashamu, a senator, who reportedly owes the corporation N13.015 billion. A former governor of Plateau State, Joshua Dariye, is also on the list. According to the list, the former governor who is currently serving a 14 year jail term for corruption charges owes AMCON N6.8 billion.

Usman Nafada, a senator who is presently gunning for the governorship seat in Gombe seat under the platform of the People’s Democratic Party (PDP), also had his name on the list with over N400 million exposure.

AMCON in its release said it published the names pursuant to its statutory mandate and in compliance with a CBN directive, having exhausted all avenues of ensuring that the debtors propose acceptable resolution terms.

“Nevertheless, the Corporation is still open to amicable resolution of these debt within a reasonable time, failing which it shall continue to exercise all powers as provided by law to recover the debts,” it said.

The list is expected to generate controversy as at least one of the named debtors, Mr Babalakin’s Bi-Courtney, has denied owing AMCON.

In a letter addressed to PUNCH newspapers and sent to PREMIUM TIMES by his lawyers, Mr Babalakin said none of his firms owe AMCON any money.

Many shops have run out of essential items like bread. Photo: EPA

No cash, no bread, no KFC as Zimbabwe currency crisis deepens

A deepening unease is settling over Zimbabwe as the country’s fragile local currency loses value at an alarming speed, prices soar, local and foreign businesses close their doors, and people wonder whether their savings are about to be wiped out once again, as they were during the economic collapse and spectacular hyperinflation that tore through the country a decade ago.

Many shops have run out of essential items like bread. Photo: EPA

“We are suffering. Inflation is too much. Every minute, every hour, every day, the prices are just changing,” said a wholesale trader who did not want to give his name.

KFC has closed its local outlets citing “these difficult times,” while supermarkets have been rationing some items, and mining companies and other key exporters are complaining about a lack of access to foreign exchange reserves.

“I’m very worried. It’s going to be just like 2008. Or maybe worse,” said Grace Chitambara, a nurse waiting in her car in a mile-long queue for petrol in the capital, Harare.


Concern is rising – along with prices – following a series of unexpected government announcements regarding plans for a new 2% tax on money transfers, and for possible changes to a controversial local currency which had been pegged, one-to-one, to the US dollar.

Fuel imports stopped abruptly, trading has been badly affected, and many businesses have stopped accepting the local bond notes – known here as Zollars or Zim bollars – which black marketeers are now valuing at four, or even five, to the US dollar.

Digging out of a hole

“There’s no need to panic,” insisted Energy Mutodi, deputy information minister with the governing Zanu-PF.

“What we’re seeing is simply the result of speculative behaviour. People started to hoard. But this should normalise in the next few days. Zimbabweans need to know they are safe under Zanu-PF. The government is committed to reforms, so we need people to really be patient.”

Almost a year after former President Robert Mugabe was ousted following a military coup, Zimbabwe’s government – led by his former party Zanu-PF – is still trying to dig its way out of an economic hole caused by years of reckless spending, corruption, policy uncertainty and sluggish exports.

“It’s a pretty big hole. We’re suffering the effects of many, many years of misgovernance. We’ve been living beyond our means and it has come to a crunch,” said economist Ashok Chakravarti.

Zimbabwe’s new finance minister has recently won some international support for his attempts to chart a path towards financial stability – a path that involves significant spending cuts and privatisation, alongside plans for the foreign debt repayments necessary to unlock new international loans.

‘You can rig an election, but you can’t rig an economy’

But many here remember how their savings were seized by the government in 2008, and worry about the extent to which Zanu-PF is willing, or able, to tackle entrenched corruption.

“It’s a complete dog’s breakfast – a man-made dog’s breakfast,” fumed opposition MDC Alliance MP Tendai Biti, a former finance minister in Zimbabwe’s short-lived unity government, who points to the disputed election that kept Zanu-PF in power.

“People have no confidence in this regime. You can rig an election – as they did on 30th July 2018 – but you can’t rig an economy, you can’t rig a supermarket or a gas station. So, we have a fundamental crisis of legitimacy. Ordinary men and women are suffering because of self-induced policy distortions. It’s madness. This is a basket case.”

In 2009, Zimbabwe scrapped its own by-then-worthless currency and relied instead of a range of foreign currencies until 2016, when the bond note was added to the mix, amid deep concerns that it would be used to hide more corruption and unchecked government spending.

No-one here underestimates the size of the mess that Mr Mugabe left behind in Zimbabwe, or the deep divisions within Zanu-PF, or the scale of the challenge ahead, but some analysts believe that the new cabinet is, slowly and erratically, making some of the right steps.

The crisis has led to a shortage of fuel with motorists having to queue for petrol. Photo: EPA
The crisis has led to a shortage of fuel with motorists having to queue for petrol. Photo: EPA

“There’s an enormous deficit of trust – a lack of confidence,” Mr Chakravarti acknowledged.

But he believes the government must be given more time, and that the sharp fluctuations in the value of the local bond are inevitable, and perhaps necessary.

“We have to accept there will be a currency adjustment. Prices for a lot of non-essential items, in particular, are going to increase. We have tough times ahead. But governments do turn a new leaf and I think they should be given a chance to show what they can do. Things can change. The turnaround can be quite quick.”

Cover photo: Many shops have run out of essential items like bread. Photo: EPA

EU plan to deepen ties with Africa

By Andrew Walker

European Commission President Jean-Claude Juncker’s proposed new alliance with Africa to deepen economic relations and boost investment and jobs involves a “continent-to-continent” free trade agreement.


The proposal could help create up to 10 million jobs in Africa in the next five years alone, Mr Juncker said (see earlier post).

It builds on a patchwork of deals that are already in place which give almost all countries in Africa extensive tariff free access to the EU’s market.

However, Mr Juncker’s proposal is more comprehensive.

Africa has a programme for building a continent-wide free trade arrangement of its own, which most countries have signed – the most notable omission is Nigeria, whose president has been reluctant.

One issue is how effectively Africa could come together to negotiate collectively – something the EU has been doing for many years.

The proposals also envisage more opportunities for Africans to boost skills by, for example, studying at European universities.

They also call for support for African countries with reforms to improve the climate for business and increased financial assistance.

The EU is proposing a total of 40bn euros ($46bn; £35bn) in grants over the seven years from 2021.

What does the EU have to gain from this?

The EU wants to expand its engagement with Africa as an increasingly important region of the world.

In another part of his speech, Mr Juncker called for reform in how the EU deals with immigration, which has been politically difficult in several EU countries.

Promoting economic development could reduce the incentives for Africans to seek a more prosperous life in Europe.

EU proposals:

  • Facilitate African students to study at European universities
  • Help Africa to improve the climate for business and increased financial assistance
  • Provide a total of $46bn in grants over the seven years from 2021

MTN in more troubles as Nigerian government demands $2 billion tax from telecom giant

The Nigerian government has slammed South African telecoms giant, MTN Group, with a $2 billion tax demand, Premium Times reports.


The new tax bill incurred by the telecom firm over the last decade comes amid controversies generated by the government’s directive to MTN to hand over $8.1 billion it accused the firm of illegally sending abroad with the collusion of four banks.

MTN said it had been in talks with Nigeria’s Attorney-General, Abubakar Malami, over concerns around tax compliance; but it was billed all the same.

The company in a statement said it was billed for importation of foreign equipment and payments to foreign suppliers, all spread across a period of about ten years.

“In this process, his (the Attorney-General’s) office made a high-level calculation that MTN Nigeria should have paid approximately $2.0 billion in taxes relating to the importation of foreign equipment and payments to foreign suppliers over the last 10 years,” MTN said.

The firm added, however, that its total payment of around $700 million over the 10-year period fully settled the amount owed under the taxes in question.

Reuters reports Tuesday that shares in the telecom firm dropped 5.6 per cent to 81.95 rand as at noon, bringing losses since last week to nearly 25 per cent. Last Thursday, the telecom firm was issued $8.1 billion demand over concerns around repatriation of funds.

The latest demands come two years after Africa’s biggest telecoms company agreed to pay more than $1 billion to end a dispute with Nigeria over unregistered SIM cards.

MTN, in its reaction, described the latest demands by Nigerian authorities as “regrettable and disconcerting”.

The company said it will “continue to engage with the relevant authorities on all these matters, and we remain resolute that MTN Nigeria has not committed any offences and will vigorously defend its position.”

Here’s why you should tell your co-workers how much money you make

It’s unlawful for private sector employers to prohibit employees from discussing wages and compensation. Take advantage of that protection.

So how much do you make?


It’s a loaded, deeply personal and often uncomfortable question. Along with our weight and age, our salary is a number to which we’ve assigned almost incomparable value.

And, when we’re asked, what many of us really hear is this: What’s your worth as a person?

“Money is so tied up with really complex and difficult emotions, like shame, success, fear of failure and how people view you,” said Brianna McGurran, a money expert at the personal finance blog NerdWallet. “So when you’re talking about how much you earn, or how much you’re saving, a lot of people end up tying that to their self-worth.”

She added: “Salary is so close to our identity. It’s the core part of all of this.”

That money — along with sex, politics and religion — is a topic best avoided in polite conversation is a cultural concept many of us are raised on, and taboos around discussing income can be particularly sensitive.

But unlike not disclosing what’s in your savings account or your 401(k), there are direct, concrete consequences for falling victim to salary secrecy, including wage suppression and a lack of transparency around pay inequity, which disproportionately affects women and minorities.

“Let’s face it, it’s 2018 and there’s still serious disparities in pay based on race and gender,” said Angela Cornell, the director of the Labor Law Clinic at Cornell Law School.

“So policies that discourage or prohibit employees from discussing these are problematic not just because of the National Labor Relations Act’s clear prohibition,” she said, “but also because they can make it difficult for employees in the private sector to learn that there are unlawful disparities.”

Yes, it’s O.K. — and perfectly legal — to talk about it

What many workers don’t realize is that it is unlawful for private sector employers to prohibit employees from discussing wages and compensation, and it has been since the National Labor Relations Act was passed in 1935. (There are exceptions, including for supervisors, agriculture workers and domestic employees.)

Open discussion of salaries among peers and co-workers, experts said, is a powerful tool to fight pay inequity. Not only does it serve both selfish and altruistic means — it simultaneously puts you and your co-workers in a better position during salary negotiations — but pay transparency can even protect companies by “minimizing the risk of disparate treatment claims and increasing job satisfaction for workers,” Ms. Cornell said.

Still, prohibiting or discouraging workers from openly discussing salaries, whether codified or implicitly built into a company’s culture, is somewhat commonplace in workplaces.

“It’s been the law of the land for many years that employers can’t have policies or practices or discipline employees for discussing wages,” Ms. Cornell said. “But that doesn’t mean it hasn’t been a common practice.”

Horror stories of employees facing punishment for sharing salaries aren’t difficult to dig up.

Elizabeth, who requested her last name not be used because of the sensitivity of discussing her salary, worked in sales at an arts company and this year shared her salary with a junior co-worker who was up for a promotion. That co-worker, during her own salary negotiation, let slip to a manager that Elizabeth had shared her salary.

“I got a call on my work phone to come to the board room,” Elizabeth said. Her manager was there — “it was very dramatic, with the lights off” — and she told Elizabeth she wasn’t allowed to share her salary, and she was creating a “bad environment,” Elizabeth said.

Knowing that she was legally in the right, Elizabeth brushed off the encounter, and 10 minutes later her manager rushed over to apologize.

“She had gotten reprimanded herself from our H.R. department,” Elizabeth said. Still, that experience was a major factor in Elizabeth’s decision to leave the company a few months later.

Even the savviest among us can get caught up in the pressures of salary secrecy.

“I can remember in the not-too-distant past having been discouraged from talking about wages,” Ms. Cornell said. She added that years ago she learned through a conversation about salaries with a male co-worker that he was making about $50,000 more than her, and that there was “no objective justification for the disparity in pay, but he had been in the position for a longer period of time.”

“That is not a good thing,” she said. “It can lead to low morale, and there was no objective justification about the disparity in pay.”

Kristin Wong, author of “Get Money: Live the Life You Want, Not Just the Life You Can Afford” and a personal finance contributor for The New York Times, recalls when she was reprimanded for discussing her salary with a co-worker:

After a few months on the job, my friend whispered that she’d received a small raise. Armed with this knowledge, I politely made the case for my own, without mentioning anything but my work ethic and commitment. My boss relented, but reprimanded me in the process.

“This is why I don’t like my employees talking about money,” she said.

You don’t have to read too hard between the lines to grasp the real meaning: Employers can get away with paying workers less when those workers don’t talk about money.

Changing tides

In just the past few years, cultural norms and legislation have begun to unravel some of the forces that discourage open salary discussion, sometimes even tilting pay negotiations in favor of employees.

A handful of states, including California, Connecticut and Massachusetts, have banned employers from asking job candidates for a salary history, which shifts some leveraging power back to candidates. In 2014, President Barack Obama signed an executive order “prohibiting federal contractors from retaliating against employees who choose to discuss their compensation.” And in some industries, including the news media, unionization has become a powerful force in fighting for worker wages.

Evan, a social media strategist in Atlanta who also requested his last name not be used, knows firsthand the benefits of open salary discussions.

After interviewing for jobs at competing marketing agencies last year, he realized he was being paid below the market rate for someone at his experience level. He told co-workers his discovery, and he said many of them were in the same situation.

“Eventually rumors started flying about: ‘Hey, this person said this to leadership; this person is also complaining about it,’” he said.

After initially responding with halfhearted gestures and speeches about workplace culture, Evan said, leadership at the agency eventually succumbed to the pressure and gave every employee a raise.

“People got what they wanted,” he said.

Jill Duffy, a writer, said for years she has been open about sharing her salaries, and that she has been able to use that knowledge to “negotiate raises because of the information I got.”

“I went in feeling confident about my worth and my value and what the company could afford to pay me,” she said.

Other times, Ms. Duffy said, having that information is “just sort of confirming suspicions” that a company can afford to pay more than it currently is.

The best approach: Win-win

Having these conversations is much easier said than done, but there are ways to gain confidence in discussing your salary.

Most important, Ms. McGurran said, is to be open and genuine, framing these conversations as beneficial for everyone involved. She suggests starting with people who are more senior than you, “maybe someone who has helped bring you on, or a previous manager, or someone who you really trust and wants to see you succeed.” This can give you a bigger-picture view of your company’s salaries.

From there, try to approach peers, co-workers or fellow alumni in off-campus, laid-back settings, all while keeping the focus on the salary and not the person.

“Try not to make it about your peer or colleague,” she said. “It’s not about trying to fish around for gossip,” Ms. McGurran said. She added that the websites LinkedInPayScale and Salary can be good resources to find a baseline. (For even more advice on salary negotiations, read this article.)

Ms. Duffy, the writer, agreed that a win-win approach is the best way to get salaries out in the open.

“When you come at it from that clear sense of, ‘I’m doing this for both of our benefit, I’m not doing this to shame you,’” she said, “people are generally more willing to share.”

Ms. Duffy added, “It’s important to know your own worth.”

Tim Herrera is the founding editor of Smarter Living, where he edits and reports stories about living a better, more fulfilling life. He was previously a reporter and editor at The Washington Post. @timherrera  Facebook

Nigeria fines Diamond Bank, other top banks $16m over ‘illegal transfers’

Nigeria’s central bank has fined four leading banks a combined sum of $16m (£12.3m) after they were accused of helping the country’s largest mobile phone operator, MTN, to illegally transfer $8bn abroad, reports BBC Africa business correspondent Dami Ade-Odiachi.


The banks and MTN have been ordered to refund the money

The banks under fire are Standard Chartered Bank, Stanbic IBTC, Citibank and Diamond Bank.

They were first investigated for breaching Nigeria’s foreign exchange rules in 2016 but were eventually cleared by the Senate, the upper house of parliament.

Nigeria’s laws allow for the repatriation of funds but with certain restrictions.

MTN has denied the allegations of illegally transferring money abroad.

Stanbic IBTC said in a statement that it was engaging the central bank over the issue. The others are yet to comment.

MTN is Africa’s largest phone company and was hit with a $5bn fine by Nigeria’s telecommunications regulator in 2015 for failing to comply with a government order to disconnect five million unregistered numbers. The fine was later cut to $1.7bn.

MTN has over 50 million Nigerian customers and the country accounts for over 30% of the company’s business.

Cover photo: The MTN Group hired a former U.S. attorney-general Eric Holder to challenge a U.S.$3.9 billion fine imposed by Nigeria’s Communications Commission for failing to disconnect unregistered users. Photo: All Africa

Apple becomes world’s first trillion dollar company in the world

Computing and mobile phone giant beats Amazon to landmark after its shares hit $207.05.


Apple became the world’s first trillion-dollar company on Thursday, as a rise in its share price saw it touch the landmark before its closest rival for the honour, retail giant Amazon.

The computer and mobile phone giant, co-founded to sell personal computers by the late Steve Jobs in 1976, reached the watermark after its shares hit $207.05, the day after it posted strong financial results.

The company’s fortunes were turbocharged by the launch of personal gadgets such as the iPod in 2001 and the iPhone in 2007. Since then 18 different iPhones have been launched and more than 1.2bn of the devices have been sold.

Apple hit the $1tn (£767bn) mark after reporting better-than-expected sales figures for the third quarter, pushing shares of the iPhone giant higher and easing the value of the company up from $935bn.

“Growth was strong all around the world,” Apple finance chief Luca Maestri said.

Stress is killing American workers

Poor health care and job insecurity shorten lives.


WORK can make you sick and shorten your life. That is the argument of a hard-hitting book* by Jeffrey Pfeffer, a professor at the Stanford Graduate School of Business. In an obvious way, that claim is outdated. Health-and-safety rules help explain why deaths from accidents in American workplaces fell by 65% between 1970 and 2015. But one problem has not gone away: stress. As many as 80% of American workers suffer from high levels of stress in their job, according to a survey entitled “Attitudes in the American Workplace”. Nearly half say it is so debilitating that they need help.

Firms are at least aware of the issue. A study in 2008 by Watson Wyatt (a consultancy that is now part of Towers Watson) found that 48% of organisations said job-related stress affected performance. But only 5% of employers said they were doing anything to deal with the matter.

Mr Pfeffer’s book focuses on America, where the problem seems particularly acute. One survey found that 55% of employees log into their e-mails after 11pm (in contrast, a new French law gives employees the right to ignore e-mails after their working day has ended); 59% do so on holidays. That is, if they actually take a break at all; more than half of American workers eligible for holiday do not use all the time allotted. All told, Mr Pfeffer calculates that work-related issues may be responsible for as many as 120,000 American deaths a year. A comparison with Europe suggests that around half of those deaths could be eliminated.

One reason for Europe’s better record is the provision of universal health care. Mr Pfeffer reckons that the absence of health insurance for all, and its often limited nature where firms do provide it, is the biggest single contributor to America’s higher work-related death rate. One survey estimated that being uninsured increased mortality risk by 25% among working-age adults. Many insured workers have restricted cover. In 2015 a Gallup survey found that almost a third of Americans delayed medical treatment in the previous year owing to the cost. None of this is good for businesses. Workers in poor health are less productive; they also tend to leave work, meaning higher staff turnover.

Mr Pfeffer is also critical of America’s work culture, in which firms are quicker than peers elsewhere to shed labour. “Increased employee fear, disengagement and reduced effort frequently swamp any positive direct effects that come from cutting costs by reducing the payroll,” he argues. And if unemployment strikes, poor health may well follow. Americans who lose their jobs are 22% more likely to experience a heart attack, after controlling for factors such as smoking, drinking and obesity.

Mr Pfeffer thinks that the growth of the gig economy may make matters worse still. Freelance workers are less likely to have health insurance. They may also suffer higher levels of stress, over their unreliable incomes and irregular hours. Broadly speaking, jobs that give individuals more autonomy and control increase motivation and also make individuals healthier, Mr Pfeffer writes.

Many will think Mr Pfeffer overstates his case. Some of the problems he describes are rooted in society as a whole, not business in particular. The design of health-care systems is a political choice, rather than a business one. A general rise in unemployment, caused by an economic downturn, is not the fault of individual businesses. The stress for workers of a hire-and-fire culture cuts less deep when unemployment is at record lows, as today. Much as the gig economy spells job insecurity for some, for others it means greater control of their working lives. And some behaviour, such as the unwillingness of Americans to take holidays, is long-standing.

But Mr Pfeffer is right to call attention to the problem of stress, and persuasive that job insecurity and the ubiquity of electronic communication have added to the pressure in the past 20 years. A big change in America’s health-care system is unlikely. So the best hope may lie in a change in corporate behaviour.

The author cites firms such as Aetna, an insurance group, and Barry Wehmiller, a manufacturer, which have introduced policies such as wellness programmes and a higher minimum wage, without sacrificing profits. That model worked in the past for Quaker-run British confectionery businesses such as Cadbury and Rowntrees. Mr Pfeffer’s book is a powerful argument for looking at it again.

* “Dying for a Paycheck: How Modern Management Harms Employee Health and Company Performance—And What We Can Do About It”, published by Harper Business

SOURCE: Business Insider/The Economist