The Nation Newspaper

Category: Issues

  • Showdown looms over minimum wage

    Showdown looms over minimum wage

    Citing sharp decline in national revenue triggered by fall in oil prices, some governors have threatened to stop paying the N18, 000 minimum wage or retrench workers. But organised labour has dismissed the threat as a joke. To labour, it is a ploy to frustrate negotiation for upward review of the national minimum wage as required by law. Already, labour is mobilising its affiliates for a showdown, should the governors make good their threat. Assistant Editor CHIKODI OKEREOCHA reports.

    Governor Adams Oshiomhole of Edo State is known for his fierce rejection of injustice and an outstanding resolve to stand up to it. He demonstrated this attribute during his days in the labour movement where he was former President of Nigeria Labour Congress (NLC). So, when the comrade governor, as Oshiomhole is popularly called, recently announced his readiness to lead a protest to force some state governors to back down on their threat to reduce the N18, 000 monthly minimum wage or embark on massive retrenchment of workers, not a few Nigerians took him serious.

    To Nigerians, especially workers, Oshiomhole’s readiness to personally lead the battle against his governor colleagues whom he said have the capacity to pay the N18, 000 minimum wage, it was clear signal that indeed, a major showdown is imminent. The labour leader hinted this much when he said: “it is clear from all indicators that 2016 is likely to be very tough with the continued decline in revenue and rising expectation on the part of our people and with many state governments, local governments, and perhaps, even some federal agencies defaulting in the payment of salaries and allowances. The level of strike activities in the economy is going to be very high…”

    He spoke penultimate week in Benin, the Edo State capital, during a meeting with traditional rulers from Edo Central Senatorial district. In an apparent reference to the governors’ threat to lay off workers, he said the level of unemployment in the country is already unacceptably high, warning that “it could get even higher if we are not careful.” While pointing out that Edo State has been trying to ensure it sustains the tradition of meeting her wage obligation because the consequences of not doing so are huge, he reiterated the fact that the welfare of the people remains the main business of state governors hence they should be able to pay the N18,000 minimum wage.

    Sometime last year, some state governors touched the raw nerves of workers when they announced that they would no longer pay the N18, 000 minimum wage in view of the sharp decline in revenue caused by falling oil prices. The governors, under the aegis of Nigeria Governors’ Forum (NGF), had after their meeting in Abuja, stated that the N18, 000 minimum wage was imposed on them when oil sold for $126 as against the price of $41 per barrel. This was the price at the time the governors pushed the argument. Oil price hit an all time low of $32.66 per barrel last week, the lowest since 2002.

    The NGF’s statement, conveyed by its Chairman, Governor Abdul’aziz Yari of Zamfara State, said: “The situation is no longer the same compared to when we were asked to pay N18, 000 minimum wage, when oil price was $126 per barrel and continued paying N18, 000 minimum wage when the oil is $41, and the source of government expenditure is oil, and we have not seen prospects in the oil industry in the near future.” He said the way out of the situation was the diversification of the economy with attention to agriculture and mining.

    Governor Abiola Ajimobi of Oyo State was more direct when he stated that there was no way the country could continue with a situation where expenditure was more than income. He inadvertently drew the battle line between the governors and labour when he said, “We are faced with a situation where we either have to reduce cost through salary reduction or downsize. All these we don’t want to do but prefer to have a roundtable with the President, ministers and economists to look for means of getting out of this problem.”

     

    Labour threatens fire and brimstone

     

    However, if Ajimobi and his colleagues expected to get labour’s understanding, they were wrong. Labour would hear nothing of either reducing cost through salary reduction or downsizing. And by the time the labour movement comprising the Nigeria Labour Congress (NLC) and its various affiliates started taking turns to condemn and call the governors’ bluff, it became clear that the options dangled before them failed to hit the right chord.

    For instance, as far as NLC President Comrade Ayuba Wabba is concerned, the governors’ threat was mere ploy to frustrate the demand for an upward review of the N18, 000 minimum wage. Wabba has at various fora, stated that the five- year period stipulated for the review of the minimum wage had lapsed, hence NLC is working in collaboration with the Trade Union Congress (TUC) to arrive at a new minimum wage to be presented to government.

    For instance, at a recent courtesy call by the NLC to Senate President Bukola Saraki, in Abuja, Wabba said NLC will submit a new minimum wage to the National Assembly (NASS), as N18, 000 minimum wage is no longer reasonable because of the current economic reality. He recalled that the last time the Minimum Wage Act was propagated by NASS was in 2011 and is due for evaluation.

    Wabba’s words: “The five-year circle during which the National Minimum Wage is due for review is here. The devaluation of the naira from N150 to $1 to about 242 to $1 today underscores the grim situation for salary earners in the country, against the fact that our economy is import driven.

    “The devaluation in simple economic terms means that the purchasing power of the ordinary Nigerian wage earner is grossly devalued. As a result, Congress will soon submit a New Minimum Wage demand, which we hope will be negotiated by the tripartite negotiating team.”

    The National Minimum Wage Act was signed into law by former President Goodluck Jonathan in 2011 after both houses of the National Assembly passed it into law, with a proviso for it to be reviewed upwards after five years. Wabba said NLC hopes that when the end product of negotiation for a review is brought before NASS for legislation, it will be treated with dispatch.

    The NLC President vowed to make the states ungovernable for any governor that tinker with the current minimum wage. “We will ensure that any governor that tries to reduce the N18, 000 minimum wage will not have rest in his domain until the right thing is done. Reducing the minimum wage is something that cannot be defended,” he threatened.

    Although, Wabba admitted the challenges in the economy, he said this does not mean that only the workers should suffer the consequence. He pointed out that if political office holders still collect the same salaries nationwide, there is no justification for anybody to think of tinkering with the minimum wage.

    But as workers await the presentation of a new minimum wage by NLC, the immediate past National President of National Union of Electricity Employees (NUEE), Comrade Mansur Muhammed Musa, suggested an upward adjustment of the minimum wage from N18, 000 to at least, N54, 000.

    He told The Nation that without such upward review, workers will continue toiling until they visit their graves and that is not what labour is all about. “There should be dignity in labour. So, N18, 000 minimum wage is out of the question. We should come together and demand for N54, 000 minimum wage,” he insisted.

    Comrade Musa described the governors’ threat as huge joke. “They (governors) have told us they cannot pay the minimum wage, but they have not told Nigerians whether they cannot also pay the maximum wage, because we know they are taking the maximum wage, he said, asking, “is it only the minimum wage of N18, 000 that they are giving to workers that they cannot pay?”

    The NUEE chief insisted that there are areas of wastages in the country that needed to be curtailed to free up resources to pay workers a new minimum wage of N54, 000. Hear him: “If we can reduce these areas of wastages we won’t have problems. Go to any of the Government Houses, nobody drives a golf car; they are all driving jeeps. Look at the convoy of governors when they are going from one place to another; look at the cost of fuel for their vehicles, personnel, and other allowances; you can go on and on and on.”

    Comrade Musa has an ally in the Secretary-General of Association of Senior Civil Servants of Nigeria (ASCSN), Comrade Bashir Lawal. The ASCSN scribe in a statement made available to The Nation wondered why governors who have not deemed it fit to reduce their humongous salaries and allowances are bent on jettisoning the N18, 000 monthly minimum wage.

    “Given the current high cost of living, the N18, 000 monthly minimum wage cannot even last the average worker one week yet, the governors are bent on reducing it. This is very unfortunate,” he said, alleging that “governors allocate to themselves, on the average, one billion naira monthly as security vote and spend nothing less than N18, 000 daily to feed one of their animal pets or buy recharge cards for one of their children, or worse still for one of their numerous girl friends.”

    Lawal stressed that if state governments could reduce wastages, tackle corruption, and moderate their greed, there would be enough money to pay enhanced minimum wage and carry out meaningful development in their states.

    He also pointed out that there is no state in the country that does not have natural resources, but instead of harnessing them they (governors) prefer to wait for monthly handouts and of late, bailouts from Abuja to administer their states.

    Comrade Lawal therefore, advised governors who are tired of governance because of fall in revenue allocation to resign and allow more serious minded individuals who are prepared to harness resources of the states for the benefit of the people including workers, come in.

     

    How crashing oil prices put

    governors, labour on war path

     

    In fairness to the governors, things have not been looking up for the economy. Since June 2014 when crude oil prices started tumbling, the Federal Government’s finances, and by extension, State Governments’ have been under tremendous pressure. Oil prices, which averaged $112 per barrel by June 2014, have continued to crash, with Brent hitting an all time low of $32.89 per barrel, last week.

    The International Monetary Fund (IMF), which predicted that crude oil prices may slump to as low as $20 per barrel this year further raised the blood pressure of Nigerian authorities especially the governors. This is so considering the fact that crude oil revenue accounts for about 90 per cent of Nigeria’s foreign exchange earnings.

    With the 2016 budget benchmark oil price of $38 per barrel, it means that if IMF’s prediction comes true, Nigeria’s economy will be in for more turbulence, as there won’t be any buffer for the budget. It also means, by extension, that state governors will be left with no choice than to make good their threat to either stop paying the N18, 000 minimum wage or lay off workers.

     

    Fed govt’s position

     

    The Federal Government through the Minister of Labour and Employment, Senator Chris Ngige has said the review of salaries of workers at the moment is not on the table because of the country’s economic challenges. He said other tiers of government that have more money could pay higher wages.

    Ngige, who spoke when the leadership of NLC visited him recently, however, said the minimum wage was an issue that was not contestable since it was a product of legislation backed by an Act of NASS.

    The minister said the NLC leadership was quite aware that the governors were playing politics with the issue, stressing that anybody that wants a review of the Minimum Wage Act should approach NASS or ask the President to send an Executive Bill.

     

     

     

    The coming weeks and months would determine whether the governors are merely playing politics with the minimum wage controversy or responding to the sustained pressure on their finances caused by the prevailing economic realities. But whichever way it goes, labour appears poised to force down the hands of the governors if they make good their threat.

     

     

     

     

  • Showdown looms over minimum wage

    Showdown looms over minimum wage

    Citing sharp decline in national revenue triggered by fall in oil prices, some governors have threatened to stop paying the N18, 000 minimum wage or retrench workers. But organised labour has dismissed the threat as a joke. To labour, it is a ploy to frustrate negotiation for upward review of the national minimum wage as required by law. Already, labour is mobilising its affiliates for a showdown, should the governors make good their threat. Assistant Editor CHIKODI OKEREOCHA reports.

    Governor Adams Oshiomhole of Edo State is known for his fierce rejection of injustice and an outstanding resolve to stand up to it. He demonstrated this attribute during his days in the labour movement where he was former President of Nigeria Labour Congress (NLC). So, when the comrade governor, as Oshiomhole is popularly called, recently announced his readiness to lead a protest to force some state governors to back down on their threat to reduce the N18, 000 monthly minimum wage or embark on massive retrenchment of workers, not a few Nigerians took him serious.

    To Nigerians, especially workers, Oshiomhole’s readiness to personally lead the battle against his governor colleagues whom he said have the capacity to pay the N18, 000 minimum wage, it was clear signal that indeed, a major showdown is imminent. The labour leader hinted this much when he said: “it is clear from all indicators that 2016 is likely to be very tough with the continued decline in revenue and rising expectation on the part of our people and with many state governments, local governments, and perhaps, even some federal agencies defaulting in the payment of salaries and allowances. The level of strike activities in the economy is going to be very high…”

    He spoke penultimate week in Benin, the Edo State capital, during a meeting with traditional rulers from Edo Central Senatorial district. In an apparent reference to the governors’ threat to lay off workers, he said the level of unemployment in the country is already unacceptably high, warning that “it could get even higher if we are not careful.” While pointing out that Edo State has been trying to ensure it sustains the tradition of meeting her wage obligation because the consequences of not doing so are huge, he reiterated the fact that the welfare of the people remains the main business of state governors hence they should be able to pay the N18,000 minimum wage.

    Sometime last year, some state governors touched the raw nerves of workers when they announced that they would no longer pay the N18, 000 minimum wage in view of the sharp decline in revenue caused by falling oil prices. The governors, under the aegis of Nigeria Governors’ Forum (NGF), had after their meeting in Abuja, stated that the N18, 000 minimum wage was imposed on them when oil sold for $126 as against the price of $41 per barrel. This was the price at the time the governors pushed the argument. Oil price hit an all time low of $32.66 per barrel last week, the lowest since 2002.

    The NGF’s statement, conveyed by its Chairman, Governor Abdul’aziz Yari of Zamfara State, said: “The situation is no longer the same compared to when we were asked to pay N18, 000 minimum wage, when oil price was $126 per barrel and continued paying N18, 000 minimum wage when the oil is $41, and the source of government expenditure is oil, and we have not seen prospects in the oil industry in the near future.” He said the way out of the situation was the diversification of the economy with attention to agriculture and mining.

    Governor Abiola Ajimobi of Oyo State was more direct when he stated that there was no way the country could continue with a situation where expenditure was more than income. He inadvertently drew the battle line between the governors and labour when he said, “We are faced with a situation where we either have to reduce cost through salary reduction or downsize. All these we don’t want to do but prefer to have a roundtable with the President, ministers and economists to look for means of getting out of this problem.”

     

    Labour threatens fire and brimstone

     

    However, if Ajimobi and his colleagues expected to get labour’s understanding, they were wrong. Labour would hear nothing of either reducing cost through salary reduction or downsizing. And by the time the labour movement comprising the Nigeria Labour Congress (NLC) and its various affiliates started taking turns to condemn and call the governors’ bluff, it became clear that the options dangled before them failed to hit the right chord.

    For instance, as far as NLC President Comrade Ayuba Wabba is concerned, the governors’ threat was mere ploy to frustrate the demand for an upward review of the N18, 000 minimum wage. Wabba has at various fora, stated that the five- year period stipulated for the review of the minimum wage had lapsed, hence NLC is working in collaboration with the Trade Union Congress (TUC) to arrive at a new minimum wage to be presented to government.

    For instance, at a recent courtesy call by the NLC to Senate President Bukola Saraki, in Abuja, Wabba said NLC will submit a new minimum wage to the National Assembly (NASS), as N18, 000 minimum wage is no longer reasonable because of the current economic reality. He recalled that the last time the Minimum Wage Act was propagated by NASS was in 2011 and is due for evaluation.

    Wabba’s words: “The five-year circle during which the National Minimum Wage is due for review is here. The devaluation of the naira from N150 to $1 to about 242 to $1 today underscores the grim situation for salary earners in the country, against the fact that our economy is import driven.

    “The devaluation in simple economic terms means that the purchasing power of the ordinary Nigerian wage earner is grossly devalued. As a result, Congress will soon submit a New Minimum Wage demand, which we hope will be negotiated by the tripartite negotiating team.”

    The National Minimum Wage Act was signed into law by former President Goodluck Jonathan in 2011 after both houses of the National Assembly passed it into law, with a proviso for it to be reviewed upwards after five years. Wabba said NLC hopes that when the end product of negotiation for a review is brought before NASS for legislation, it will be treated with dispatch.

    The NLC President vowed to make the states ungovernable for any governor that tinker with the current minimum wage. “We will ensure that any governor that tries to reduce the N18, 000 minimum wage will not have rest in his domain until the right thing is done. Reducing the minimum wage is something that cannot be defended,” he threatened.

    Although, Wabba admitted the challenges in the economy, he said this does not mean that only the workers should suffer the consequence. He pointed out that if political office holders still collect the same salaries nationwide, there is no justification for anybody to think of tinkering with the minimum wage.

    But as workers await the presentation of a new minimum wage by NLC, the immediate past National President of National Union of Electricity Employees (NUEE), Comrade Mansur Muhammed Musa, suggested an upward adjustment of the minimum wage from N18, 000 to at least, N54, 000.

    He told The Nation that without such upward review, workers will continue toiling until they visit their graves and that is not what labour is all about. “There should be dignity in labour. So, N18, 000 minimum wage is out of the question. We should come together and demand for N54, 000 minimum wage,” he insisted.

    Comrade Musa described the governors’ threat as huge joke. “They (governors) have told us they cannot pay the minimum wage, but they have not told Nigerians whether they cannot also pay the maximum wage, because we know they are taking the maximum wage, he said, asking, “is it only the minimum wage of N18, 000 that they are giving to workers that they cannot pay?”

    The NUEE chief insisted that there are areas of wastages in the country that needed to be curtailed to free up resources to pay workers a new minimum wage of N54, 000. Hear him: “If we can reduce these areas of wastages we won’t have problems. Go to any of the Government Houses, nobody drives a golf car; they are all driving jeeps. Look at the convoy of governors when they are going from one place to another; look at the cost of fuel for their vehicles, personnel, and other allowances; you can go on and on and on.”

    Comrade Musa has an ally in the Secretary-General of Association of Senior Civil Servants of Nigeria (ASCSN), Comrade Bashir Lawal. The ASCSN scribe in a statement made available to The Nation wondered why governors who have not deemed it fit to reduce their humongous salaries and allowances are bent on jettisoning the N18, 000 monthly minimum wage.

    “Given the current high cost of living, the N18, 000 monthly minimum wage cannot even last the average worker one week yet, the governors are bent on reducing it. This is very unfortunate,” he said, alleging that “governors allocate to themselves, on the average, one billion naira monthly as security vote and spend nothing less than N18, 000 daily to feed one of their animal pets or buy recharge cards for one of their children, or worse still for one of their numerous girl friends.”

    Lawal stressed that if state governments could reduce wastages, tackle corruption, and moderate their greed, there would be enough money to pay enhanced minimum wage and carry out meaningful development in their states.

    He also pointed out that there is no state in the country that does not have natural resources, but instead of harnessing them they (governors) prefer to wait for monthly handouts and of late, bailouts from Abuja to administer their states.

    Comrade Lawal therefore, advised governors who are tired of governance because of fall in revenue allocation to resign and allow more serious minded individuals who are prepared to harness resources of the states for the benefit of the people including workers, come in.

     

    How crashing oil prices put

    governors, labour on war path

     

    In fairness to the governors, things have not been looking up for the economy. Since June 2014 when crude oil prices started tumbling, the Federal Government’s finances, and by extension, State Governments’ have been under tremendous pressure. Oil prices, which averaged $112 per barrel by June 2014, have continued to crash, with Brent hitting an all time low of $32.89 per barrel, last week.

    The International Monetary Fund (IMF), which predicted that crude oil prices may slump to as low as $20 per barrel this year further raised the blood pressure of Nigerian authorities especially the governors. This is so considering the fact that crude oil revenue accounts for about 90 per cent of Nigeria’s foreign exchange earnings.

    With the 2016 budget benchmark oil price of $38 per barrel, it means that if IMF’s prediction comes true, Nigeria’s economy will be in for more turbulence, as there won’t be any buffer for the budget. It also means, by extension, that state governors will be left with no choice than to make good their threat to either stop paying the N18, 000 minimum wage or lay off workers.

     

    Fed govt’s position

     

    The Federal Government through the Minister of Labour and Employment, Senator Chris Ngige has said the review of salaries of workers at the moment is not on the table because of the country’s economic challenges. He said other tiers of government that have more money could pay higher wages.

    Ngige, who spoke when the leadership of NLC visited him recently, however, said the minimum wage was an issue that was not contestable since it was a product of legislation backed by an Act of NASS.

    The minister said the NLC leadership was quite aware that the governors were playing politics with the issue, stressing that anybody that wants a review of the Minimum Wage Act should approach NASS or ask the President to send an Executive Bill.

  • Mobile payment: Overcoming connectivity hitches

    Mobile payment: Overcoming connectivity hitches

    Mobile payment is where the world is heading and Nigeria cannot afford to be left behind. Banks, telecoms and start-up technology firms are all strategic partners in the payment ecosystem. New technology firms and other operators are navigating the connectivity challenges to give customers the seamless services they need, writes COLLINS NWEZE. 

    As 30-year-old lawyer Stephens Michael waited outside the courtroom for his colleagues, his smartphone beeped with a familiar SMS message alert. It was another reminder for him to pay his electricity supply bills.

    In three minutes, he opened his mobile money platform and the payment was made. A few years ago, he could only have imagined how he would be able to make such payment with such ease without going to the bank.

    Step aside cash, cheque and credit cards; a consumer can use his mobile phone to pay for a wide range of goods and services. Mobile money has come to represent the new face of banking– but not without some hitches.

    Expectedly, mobile money is yet to be fully embraced by the banking populace because of poor connectivity provided by telecom operators (Telcos).

    The era of brick and wall banking is fast fading away. It is now being replaced by mobile banking. In a world where companies think first of cost, and then profit, the need to get things done fast, and cheaply cannot be overemphasised.

    But the biggest challenge facing both the internet and mobile banking, has been connectivity hitches. Stakeholders, especially banks and start-up technology firms, are abandoning telecommunication networks to create alternative channels needed to support mobile money services.

    In many cases, poor connectivity provided by telcos hinder seamless completion of transactions. Some customers explained that the fear of getting transactions completed at record time without hitches has prevented them from doing banking the mobile way.

    For instance, Adanna Obi, a Lagos sales girl, lamented her experience in using mobile money platforms. “I tried to send money to my brother in Aba, using mobile platform, but the transaction was stalled because of poor network. I went to my bank’s banking hall to make the deposit.Until banks solve connectivity challenges and build confidence in the network, I will not try it again,” she said.

    Cases like this have prompted banks to rethink their mobile money strategies. Hence, to achieve a seamless mobile money services, a consortium of six banks and Unified Payments has inaugurated PayAttitude, an electronic payment scheme that allows transactions in both online and offline platforms.

    There are also technology payment firms, such as Paga, which is fast making mobile payment ad pleasure and necessity. Paga Co-founder Jay Alabraba said infrastructure challenge is a subject of concern to businesses. “Recently, we were at an event hosted by one of the large international organisations and infrastructure was the subject and how it affects small and large size businesses, from the stand point of power, cost of connecting telecoms and the reliability of such connection.

    “We built Paga to work in inadequate infrastructure environment; this is not importing software and assumes it is going to work. We have taken into account the fluctuations we will have in power, or telecommunication networks, or other types of infrastructure challenges. The technology is built to work in emerging markets where technology challenge exists, we use an appropriate technology,” he said.

    Chairman, PayAttitude, Victor Etuoku, who announced the participating banks as FirstBank of Nigeria Ltd, Zenith Bank Plc, Access Bank Plc, Diamond Bank, Skye Bank Plc and United Bank for Africa Plc said the lenders are commitment to making the project succeed.

    He said the collaboration with Unified Payments on PayAttitude is expected to drive innovation in service delivery, convenient mobile payment system and making Nigeria’s financial system the “safest and fastest growing amongst emerging markets.

    “PayAttitude guarantees subscribers the confidence and comfort of successful mobile payment for goods and services at merchant locations at all times, notwithstanding the challenges of telecommunication or unavailability of network in the merchant’s bank or the customer’s bank,” he said.

    Managing Director/CEO, PayAttitude, Agada Akpochi, said the challenges of telecommunication, or unavailability of network in the merchant’s bank or the customer’s bank, will no longer delay transactions.

    FirstBank, in a statement, affirmed that no doubt Unified Payments and PayAttitude would redefine the domestic payments ecosystem that had been plagued with numerous challenges.

    The bank said the lender is working to constantly provide dynamic and relevant solutions that will improve the lifestyle of its customers while ensuring the safety and security of their funds.

    It noted that with the developments in the electronic money industry, it became imperative for the payments industry to look inward for a solution that will guarantee successful retail payments of Point of Sale (PoS) terminals without depending where online real-time communication is not required between the acceptance device and the customers’ accounts in the bank.

    Beside being part of the PayAttitude platform, Access Bank Plc went a step further by inaugurating a new multi-banking payment solution, PayWithCapture.

    The platform, a mobile payment solution allows customers to make payments by scanning a merchant’s pre-generated code using the camera of their mobile device.

    The product, the lender explained, can be linked with different payment cards, giving users options on payment instrument of their choice.

    The bank’s Group Managing Director, Herbert Wigwe said: “Forging growth in mobile payment solutions requires inclusiveness. For the potential of mobile payment technologies to truly explode, it is important that we begin to see it as more than a bank initiative but more of a consumer initiative. That is where inclusiveness comes in”.

    Alabraba said the mobile payments service firm, has announced the launch of its new business focused service line – Paga for Business.

    Suitable for large-to-small businesses, the product is a one-stop-shop solution for any business looking for a smart way to collect payments from its customers in person, online, or remotely, anywhere in the world. The solution, he added,  also allows businesses to disburse cash, airtime  to any bank  account or phone number in real-time.

    Alabraba said Paga does not compete with the banks since its funds are saved with the banks. He, however, admitted that there are places where it clearly competes with banks and there are more places where it collaborates with banks to do what it is doing.

    “Certain banks have licences to do mobile payments. There are places you can extend what we are doing beyond where people do it today. For example, you don’t find many banks pursuing collections of payment by small or medium businesses the way we do”.

    He said people who do business  may not necessarily be in the rural areas, adding that because they are not banked, they are not finding the efficient ways to make payments. But somehow, he explained, “there is a gap and that is the place we play as well. Half of our customers are banked, just that they find Paga to be a lot efficient, creating more options for them to access their services.”

    Managing Director of Airtel Nigeria, Segun Ogunsanya, has called for a review of the current mobile money model, saying a telco-led model will help expand retail banking, thereby driving financial inclusion in the unbanked segment.

    Telecoms companies are not permitted to provide their own mobile money services as the current model approved by the financial regulator, Central Bank of Nigeria (CBN), empowers banks to provide mobile money services while telecoms companies play only a supporting role.

    Speaking at the yearly lecture of the Chartered Institute of Bankers in Nigeria (CIBN) in Lagos, Mr. Ogunsanya said for the mobile money market to reach its full potential, it is important that restrictions on telcos activity in mobile money are lifted.

    The CBN has also admitted that its mobile money expectations are not met, despite N5 billion annual turnover recorded by operators. CBN Director, Banking Supervision, and Chairman, Nigeria Electronic Fraud Forum (NeFF), ‘Dipo Fatokun defended the bank-led model, saying the CBN does not regulate telcos and will not give them total control of the project. He said the CBN will continue to monitor progress being made in the mobile money space.

    He said: “It is not correct that we have not made progress in mobile money. It is right that our expectations on mobile money has not fully been met and probably because we were very ambitious in setting the target”.

    He regretted that most of the mobile money transactions are for subscription payment, and remittances, like mobile wallet sending money to account in the bank, or account in the bank sending money to mobile wallet.

    Fatokun said apex bank believes that mobile money and agent framework is the frontier of cashless boom.

    “Mobile money is the next thing expected to transform CBN’s cash-less policy. The apex bank believes that such initiative will aid both telecommunications and banking industries to further serve Nigerians better,” he said. Nigeria’s telecoms subscriber base, put at 131 million as of September, last year by the Nigerian Communications Commission (NCC), should play a major role in bringing the unbanked into the formal banking system.

    With over 50 per cent of Nigeria’s adult population unbanked, mobile banking could be the catalyst that will help quicken the adoption of banking services by this critical segment of the population. Offshore portfolio managers appear to be similarly persuaded and they are already positioning to take advantage of the expected growth in mobile money.

     

  • Ad/PR business: Fresh threat for older agencies

    Ad/PR business: Fresh threat for older agencies

    The Nigerian marketing communication industry has experienced monumental growth in the last two decades. Having enjoyed bumper harvest before the current recession, new players have merged to challenge older players’ dominance of the public relations and advertising media segment of the industry. To overcome the new threat, experts and stakeholders urge older agencies to innovate or die, writes ADEDEJI ADEMIGBUJI

    After decades of boom, the Nigerian marketing communication business has, in recent times, witnessed a downturn.

    From the boom occasioned by the telecoms revolution in the new millennium, which brought the likes of MTN, Airtel, Glo and Etisalat to the era of banking consolidation, the marketing communication industry enjoyed good times until the global economic recession of 2008 and the global oil price fall in 2013 hit the industry.

    With budget cut, more demands from clients, businesses are no longer guaranteed for older business concerns in the sector. In their boom days, only few big agencies in the businesses of public relations (PR), Advertising (Ad)and media buying are top earners that share the biggest businesses. This was the scenario as industry observers say when one big agency loses a business, it goes to another big agency rather than the start-ups.

    However, with growing competition, quest for new ideas, innovation, the paradigm has shifted. The new start-ups that are barely six years in operation now pose a big threat to bigger ones who have been in the marketing communication business for over 10 years. With size no longer determinant of who gets which juicy business anymore, clients are now paying attention to agencies who deliver impact than the razzmatazz.

    For instance, in the creative segment of the industry, start-ups such as Noah’s Ark and X3M Ideas are giving bigger agencies a run for their money.  Dominant players such as Insight Communication, Rosabel, STBMcCann, PrimaGarnet Ogilvy, DDB, Bate Cosse among others now jostle for businesses and industry awards for professional excellence with those earlier regarded as fringe players.

    In the last five years, records showed that the start-ups have retained top four positions in the Lagos Ideas Festival (LAIF), a brainchild of Association of Advertising Agencies of Nigeria (AAAN). The award reflects how busy the agencies are and how their works stand out from others every year.

    For instance, in last year’s  edition, Noah’s Ark, a creative advertising agency, emerged the overall best. The agency won a total of 10 awards including a Grand Prix, five gold, two silver and two bronze plaques to emerge the number one agency for 2015. The agency beat old generation agencies such as Insight Communications Limited, DDB among others. The agency has been in the top four since day one when it started operation.

    Also, X3M Ideas also remains at the top of the ladder in the creative industry since inception. The agency in the  2015 LAIF demonstrated its unflinching innovative and creative consistencies for an impressive third year running as a young agency. X3M Ideas coasted home with three Gold medals, two Silver and three Bronze to emerge the 4th on the 2015 LAIF medal table.

    The result shows the three-year old agency as the youngest, revolutionary and most consistently improved over the last three years of its entry into the AAAN fold. X3M Ideas as the future-forward marketing communications agency, made its debut at the LAIF awards in November 2013. The agency, which opened shop on August 2012 barely a year then, recorded one gold, two silver and one bronze medals although it entered only part of its works done between August and December, 2013.

    Its second time appearance at the LAIF was two years ago. The agency won two gold, five silver and six bronze medals, carting home an impressive 13 medals, hence it did not only sustain  its initial tempo but showed an improvement over the previous performance.

    Beyond awards, the two leading new generation agencies also edged out big ones at various business pitches. Noah’s Ark also displayed competence against big agencies while pitching for Airtel advertising business. From the five agencies invited for the main pitch after broader credential presentations, Insight Communications, Centrespread Advertising and Noah’s Ark Advertising were selected winners.

    Prior to the selection, the prospective handlers submitted and defended their financial requirements, with a view to availing the client the opportunity to align demands with its realistic budget and financial projection. However, when issues related to finance and the decision to split the account came up, Insight management and Airtel could not agree, hence the need to draft in Centrespread, which was said to have come third in the exercise. To this end, Centrespread and Noah’s Ark are now the handlers of Airtel’s advertising business.

    However, when issues relating to finance and the decision to split the account came up, Insight management and Airtel could not agree, hence the need to draft in Centrespread, which was said to have come third in the exercise.

    In the media buying segment of the market, the big players such as MediaReachOMD, Media Perspective, Capital Media, StarComms Media, MediaComm have lost sleep with the entry of new players-MediaFuse, SBI among others. In a recent report, MediaReachOMD lost multimillion dollar Dano Milk’s advertising business to Vizeum, a media affiliate of Media Fuse Dentsu Aegis.

    The incumbent agency lost the advertising business following a pitch involving Media Fuse’s Vizeum Nigeria, PHD, and MediaReach OMD. Arla Foods, fifth largest milk manufacturer in the world and maker of Dano Milk, said the new agency is expected oversee the firm’s advertising businesses-media strategy, planning, buying-Arla across sub Saharan African markets including Nigeria, Senegal, Cameroun and Cote D’Ivoire.

    The Nation gathered that Arla Foods tested the agencies with a brief to run a campaign for Dano Milk and found Vizeum Nigeria capable of managing the firm’s brand portfolio across sub-Saharan Africa. Transition meetings are expected to take place this month with campaigns planned to begin from the first quarter of this year.

    To create a winning edge against dominant players in the industry, Media Fuse, founded by the former Managing Director of Carat Media Perspective, entered into affiliation with Dentsu Aegis Network, a global marketing conglomerate.  In line with Dentsu Aegis Network’s expansion plans and on-going investment into the African market, Media Fuse after the affiliate venture agreement now operate as Media Fuse Dentsu Aegis Network, joining the strong network of Dentsu Aegis Network brands in sub-Saharan Africa such as Carat, iProspect, Isobar, Posterscope and Vizeum.

    “With this development, Nigeria and indeed, the West African sub-region is set for fresh impetus in brand building and communication experience with global access to tested tools, capacity building processes and the fiscal discipline that the Dentsu Aegis Network is known for on the global stage,” said Chief Executive Officer (CEO) Media Fuse Dentsu Aegis Network, Emeka Okeke.

    Also, within few months of operation, another media agency, SBI, tagged ‘Next Generation’ agency, has within one year of operation cornered juicy account eyed by bigger agencies. The agency now parades DealDey, Konga, Forte Oil, Techno, Eco Bank, Lafarge, and other multinational businesses as clients despite stiff competition between old and new generation media buying and planning agencies.

    Business pitch in the PR business segment of the market also reveals growing profile of new agencies. Despite that The Quadrant Company (TQC), pioneer PR agencies, remains the most structured PR agency in Nigeria, the agency too is not losing sleep as a result of growing credentials of new players. While the agency appears unruffled with the loss of some accounts such as Etisalat, GE, and Guinness Nigeria among others in the last two years to new and fringe players, it remains a model. Yet, the threat of competition such as Brooks & Blakes, Chain Reaction, Xlr8 and few others remains a big factor.

    Recently, the new agencies displayed their might in MTN, Guinness and Etisalat business pitch. In the pitch for the MTN account, two new agencies – Brooks and Blakes and DKK Associates – emerged winners of the PR Accounts of MTN Nigeria 12 years after it domiciled with Marketing Mix, another older agency.

    The process to appoint new agencies began when nine agencies were invited for presentation. The agencies include, JSP Communications, Mediacraft and Associates, Black House Media, Brooks and Blakes and Lead Communications. Others are; Soulcom Communications, DKK Associates, and the former handlers of the account -Marketing Mix and XLR8. But Brooks and Blakes and DKK eventually won the business.

    Brooks and Blake Nigeria Ltd, a perception management company, according to industry observers, represents the face of the future in the PR community. The agency’s profile shut up few years ago when it was appointed to handle the Diageo accounts. Industry analysts say the success of Orijin, SNAP and Guinness products in the last three years could be linked with the agency. As a result, it has won a few industry awards, including the Marketing World’s PR Agency of the Year. This notwithstanding, some industry watchers are of the opinion that Brooks and Blakes may not have the required structure to sustain the tempo of the MTN brand but the way the agency handled the MTN/NCC fine debacle has convinced market players about the competence of the agency.

    Why are the new agencies winning?

    The Managing Director of SBI Media, Mr. Rotimi Bankole said: “I think ‘bigness’ is relative. For us as SBI, we only consider a company/competitor big if it is able to do the near-impossible advert placement when all odds seem to be in place and at the same time being able to generate savings for the client. We are not intimidated by the ‘bigger names’; rather, they spur us to work even harder. So rather than see this as a competition, we see it as a collaboration of Media Agencies for the greater goal of our industry.”

    Also, the Acting Managing Director of Rosabel, an old generation creative agency, Mr. Clement Omemu, said one of the reasons the start-ups ventured into the business was because they are disgruntled and tired of the norm.

    “This young generation feels there are different ways of doing things. So they become restless and they are tired of doing things the same way. What do they tell us? Doing the same thing the same way all the time is insanity,” he said, adding that if older agencies fail to innovate, they will lose more grounds to the new players.

    Also, the Executive Director, Chain Reaction Nigeria, Mr. Lere Ojedokun said global trend is affecting PR landscape. He said with competition, segmentation and innovation becoming the new lexicon in the industry clients are now demanding for new ideas and constrained by budget.

    Meanwhile, the Executive Creative Director, Insight Communication, Chima Okenimkpe, said many old generation agencies fail to transit to new market realities as a result of lack of insight on the part of the founders. He said though Insight Communication is a second generation agency and over 30 years old, the creative philosophy of the founders have made the agency retain its lead in the industry.

  • Apapa gridlock: Senate to the rescue

    Apapa gridlock: Senate to the rescue

    The Senate Committee on Marine Transport visited the Lagos Port Complex and the Tin-Can Island Ports to assess the impact of the gridlock that has done much damage to business on the access roads. At a meeting with the committee by government agencies and stakeholders, how to tackle the gridlock was discussed, reports Maritime Correspondent OLUWAKEMI DAUDA.

    THE Senate Committee on Maritime Transport has visited the Lagos Port Complex and the Tin Can Island Ports to assess the impact of the gridlock that has for long crippled the roads leading to the facilities. Led by its Chairman, Senator Ahmed Sanni Yerima, the committee had a feel of the gridlock as its convoy was trapped in the traffic.

    The c  ommittee members which were Senators Kabiru Gaya; Ighoyota Amori; Isiaka Adeleke; Theodore Orji; Clifford Ordia and others, were forced to drive against the traffic from Liverpool end of the road to the port.

    After passing through the second entrance of the Tin Can Ports, their vehicle got stuck in between the container-laden trailers. At this point the lawmakers alighted from their vehicle to assess the failed portion of the road

    After the assessment, the vehicles could not move forward or make a u-turn, but had to reverse under a very dangerous condition.

    Seeing the problem they were faced with, one of the lawmakers lamented: “This is a disgrace to our country. I didn’t know that the situation in Apapa is as bad as this. There is an urgent need for us to address this problem because this is where the government makes a lot of money.”

    The Committee Chairman could not agree less. Describing the situation as “a serious national disaster” which must be tackled, Senator Yetima said the gridlock had severe consequences not only on the road users and the state, but also on the national economy.

     

    Govt agencies make

    presentations

     

    At a stakeholders’meeting with the lawmakers, the Managing Director, Nigeria Ports Authority (NPA), Malam Habib Abdullahi called for the revival of the rail system, noting that efficient rail lines connecting the ports with other states would decongest the ports and reduce the pressure on the Lagos roads.

    The NPA boss urged the Committee to look not just at the ports, but at other issues that contributed to the menace. Abdullahi said there was the need to import petroleum products through ports outside Lagos.

    On his part, the Acting Director-General, Nigerian Maritime Administration and Safety Agency (NIMASA), Pastor Haruna Baba Jauro, lamented the effect of the gridlock on the economy. He complained that staff productivity had also been affected, as many are emotionally and physically drained and harassed by armed robbers on their way to and from work.

    The NIMASA boss bemoaned a situation where staff of the agency are forced to sleep in the hotels at Apapa because of the gridlock.

    The Executive Secretary, Nigerian Shippers’ Council (NSC), Mr. Hassan Bello, corroborated NPA’s position and lent his voice to a trucking policy that would set standards and regulations.

    According o him, between 5,000 and 7,000 trucks ply the Apapa corridor daily, when the roads could only support  between 2,000 and 3,000 trucks. The remaining numbers, he said, constitute nuisance by causing the gridlock in the area.

    The NSC boss called for the immediate repair of all the failed sections of the road, registration of trucks coming to Apapa under a company name, install electronic gate system and call-up cards and institute a sound legal framework.

     

    Loading bay

     

    Another way out of the Apapa gridlock, according to Bello, is the construction of loading bay or parking lots for trucks coming into the ports to pick consignments or drop empty containers.

    It is on record that most of the trucks parked along the port access roads such as Wharf, Commercial and Creek Roads are laden with empty containers. Many of the drivers of such trucks use the roads leading to the port for parking their vehicles, thereby reducing the space meant for other road users.

     

    Agents urge Buhari to

    address gridlock

     

    Speaking with The Nation after the stakeholders’meeting with the lawmakers, the Association of Nigerian Licensed Customs Agents (ANLCA) urged President Muhammadu Buhari to address the gridlock on the major roads leading to Apapa Ports in Lagos.

    Its National President, Alhaji Olayiwola Shittu, said vehicular congestion, which is at the root of the gridlock, has added to the cost of clearing goods from the port, besides driving away businesses in the area.

    He pointed out that importers were diverting their cargoes to neighbouring countries because of the gridlock, while new investors are being discouraged from coming to the area. Residents, it was said, are also looking for homes outside the area.

    Shittu said Apapa is not only reputed for maritime activities, manufacturers have also taken advantage of the ports to site companies in the suburbs for quick access to imported raw materials and for easy export.

     

    Stakeholders record N5b

    loss daily

     

    The gridlock takes toll on the Federal Government and relevant stakeholders with daily revenue loss estimated at N5 billion. The gridlock hampers free movement of goods and persons, with tanker drivers converting major access roads into Apapa ports to parking lots.

    Consequently, containers, which ought to have been cleared and evacuated from the ports still litter various terminals, accumulating demurrage. Vessels are also stranded on the high seas as there is no room at the terminals to discharge cargoes.

    ANLCA spokesman, Dr. Kayode Farinto, while speaking with The Nation on the poor state of the ports said agents have given the Federal Government a 30-day ultimatum to address the situation or risk the ports being shut down in protest. According to him, the N5 billion daily loss is only a conservative estimate, pointing out that a lot of businesses located in Apapa have folded up since workers can no longer access their working places.

     

    Solutions

     

    The Chairman, Seaport Terminal Association of Nigeria (STOAN), Victoria Haastrup, said the gridlock being experienced in Apapa is a direct consequence of system failure in the oil and gas industry logistics chain.

    Haastrup, who is also the Executive Vice Chairman of ENL Consortium Limited, operators of Terminals C and D, Lagos Port Complex Apapa, said the only way to solve the gridlock is to immediately suspend the lifting of imported petroleum products from tank farms in Apapa by road.

    “There must be immediate suspension of the evacuation of petroleum products from Apapa by road. The authorities must immediately activate the use of barges for petroleum products evacuation. Petroleum products meant for the northern part of the country should be moved to Lokoja and Baro Ports by barges while the trucks collect them from there rather than coming to Apapa,” she said.

     

    Indiscipline

     

    For Senator Ordia, another way to tackle the gridlock is to address the indiscipline of motorists on the roads, especially drivers of old vehicles. He said because of the indiscipline and unruly behaviour of the drivers, all lanes on both sides of the roads are occupied. “They are the kings of the roads. They do not bother about any other road user,” he said.

    The Senator also observed that drivers use these roads as makeshift toilet facilities. They also drive against the traffic and cross the demarcation and embankment separating the two lanes of the roads at will. Apart from being an eyesore, he said the sorry situation gives the country a negative image.

    Senator Yerima added: “We have noticed the challenge and we believe that this is not only affecting the operations of the port and residents in Lagos, but the entire economy.

    “We hope that at the end of this interaction we are going to come up with a permanent solution…we will look at the short term, the medium term and at the end of the day, our objective is to achieve a permanent solution.”

    He promised that whatever the Committee is able to take along to the Senate, it has resolved to pursue to a logical conclusion. He also assured that in a bid to provide a lasting solution to the gridlock, the government would mobilise contractors building the 500-truck capacity holding bay opposite the Tin Can port so that work can resume immediately.

  • Silver lining in a down market

    Silver lining in a down market

    The negative market position at the stock market belies ongoing regulatory initiatives and several contrarian stocks with considerable positive returns. In this report, Capital Market Editor, Taofik Salako, reports that low prices, regulatory initiatives and comparably competitive fundamentals of quoted companies have primed the market for a rousing performance in the medium to long term

    For investors, quoted companies, operators, regulators and other stakeholders in the capital market, it has been a challenging time. Nigerian equities crashed to three-year low last week after sustained price depreciation brought several quoted companies to their lowest values in recent years. The stock market opens today with a negative average year-to-date return of -21.32 per cent, implying that, on the average, investors have lost more than one-fifth of their investment portfolios so far this year. That was a staggering loss of N2.1 trillion. Against widely held expectations of modest positive return or at worst, a flat performance or slight negative return in 2015, the market appears to be rolling towards a worse performance than 2014, when it lost N1.75 trillion or -16.14 per cent.  With inflation rate at 9.3 per cent, inflation-adjusted average year-to-date return at the Nigerian stock market now stands at about -30.6 per cent, simply implying that average investors have lost nearly a third of the real value of their investments.

    But the Nigerian market is not alone. Across Africa, 20 of the 24 Exchanges have been experiencing varied forms of downtrend. With the exception of the JSE Stock Exchange of South Africa, African Exchanges have mostly followed their national macroeconomic decline. Other advanced and emerging markets also showed a tinge of the downtrend. In the United States, the Dow Jones Index has returned -8.63 per cent while the NASADAQ Composite Index has lost 2.45 per cent. In the United Kingdom, the FTSE 100 Index UK indicated average year-to-date return of -7.68 per cent.

     

    Macro background to micro performance

    Group Head, Financial Advisory, GTI Capital, Mr. Hassan Kehinde, said the stock market, which had been bogged down by political and policy risks during the political transition period, was affected by post-transition uncertainties and foreign exchange crisis, which led to the exit of influential foreign investors.

    There is analysts’ consensus on the linkage between the macroeconomic indices and Nigeria’s political transition and the lukewarm performance of the capital market. The fall in crude oil price, Nigeria’s major foreign exchange earning resource, from a $100 per barrel to a $49 sell rate in January, triggered a foreign exchange crisis, which has continued to haunt the country. The price slump meant decrease in the national foreign reserve, which forced devaluation of Naira. With additional pressure on the Nigerian economy, many foreign investors became frightened with the possibility of additional currency risk. The fright-exit of foreign investors, decreased national productivity and uncertain fiscal and monetary outlook combined to create a sustained sell down at the stock market. Instructively, foreign investors account for the largest transactions and trades on the Nigerian stock market.

    Anxieties around the elections in April further worsened the run as some investors were worried. To the relief of most Nigerians, the elections were peaceful and a new wave of change was ushered in with the election of President Muhammadu Buhari. The market quickly reacted to this with 8.30 per cent rise in the immediate days after the presidential election in what has been termed the Buhari Bounce. But as the new government struggled with and delayed composition of its executive cabinet, the excitement started to wane.

    Analysts at Afrinvest Securities- a Lagos-based investment firm, said uncertainties around fiscal and monetary policies, especially foreign exchange, have been major driving forces for the market downtrend.

    “Specifically, the economic and political risk of the country is currently too high for multinational and foreign investors. Factors influencing this includes dwindling price of Brent Crude Oil, uncertainly of the post-election period, decreasing value of Naira and unfavourable foreign exchange. Local investors are further affected by the increased volatility of the market,” managing director, Finawell Capital Limited, Mr. Tunde Oyekunle said.

     

    Diamonds in the rough

    The negative overall market performance however belies the resilience of several stocks at the stock market, in terms of corporate earnings and share price appreciation. Most dividend-paying companies have sustained payouts while several stocks currently carry double-digit positive returns. On dividend pay outs, some companies have also maintained their dividend and bonus payments. For instance, Nestle Nigeria paid a dividend per share of N18.50,  Total Nigeria paid N8 while Forte Oil distributed a cash dividend of N5.20 per share. Stocks with double-digit returns included Seven-Up Bottling Company, Nascon Allied Industries, Vitafoam Nigeria, Unilever Nigeria, Lafarge Africa, Cutix, Beta Glass and University Press among others.

    “Opportunities still exist for investors in stocks, in spite of the current downturn in the capital market. If you look at large, mid and small cap securities; mid cap securities have done well, they have returned about six per cent positive. Now the whole market is about 18 per cent down and that is because of the weight of the large-cap securities. So, it is important for investors to dig deeper and understand the dynamics of the market. Investors also need to understand that there have been significant sell-offs between last year and this year and it could present opportunity,” chief executive officer, Nigerian Stock Exchange, Oscar Onyema said.

    Most analysts agreed with Onyema. Most stocks have hit rock-bottom price and several are trading below book value.Shrewd investors that come into the market to buy low now stand to gain more in the medium to long-term. “The rebound in market breadth suggests bargain hunters are already taking position. Despite the decline in earnings, current market valuation of stocks still presents a sizeable upside for long term investor,” Afrinvest Securities, a Lagos-based securities firm, stated. Many pundits hold that this should be the greatest wealth creation moment in the capital market, citing the typical Warren Buffet style. Globally regarded as the oracle of stock-picking, Warren Buffett’s fond saying is: when the mood of crowds is at its darkest, that’s the time to buy; when the masses are in a trading frenzy, run for the exits.

    In August 2015, the NSE, South Africa’s Johannesburg Stock and Kenya’s Nairobi Stock Exchange announced a collaboration to improve liquidity on Africa’s exchanges through cross listings of Exchange Traded Funds (ETF’s). Executive Director, Business Development, NSE, Haruna Jalo-Waziri , said the collaboration underscores the commitment to provide investors with a wide range of investment products to help them realise their financial goals. “ETFs are becoming attractive to many investors offering them portfolio diversification and reduce cost of investing. We are proud once again to be collaborating with reputable exchanges in Africa to bring this new and exciting investment opportunity to bolster trade across multiple markets,” Haruna Jalo-Waziri said.

     

    Strengthening the regulatory framework

    As share prices continue to totter on the negative, capital market regulators have stepped up efforts to improve the market technological and regulatory architecture. These past 11 months have seen several initiatives by the NSE, Securities and Exchange Commission (SEC) and the all-stakeholders committee, otherwise known as Capital Market Committee. The NSE has begun implementation of its Minimum Operating Standards (MOS), which seek to ensure stockbroking firms have adequate technology, human resources and structures to safeguard investors’ interests. The NSE also recently coordinated central launch of online mobile stock-trading portals that promise to bring the tech-savvy generation into the market. The Exchange has won several accolades for its regulatory enforcement and strict insistence on best practices and good corporate governance. So far this year, the NSE has received four awards. These included “Best Corporate Social Responsibility Award” at the 2015 African Business Awards in New York, “African Regulator of the year award” at the 6th African Business Leadership Awards organised by African Leadership magazine in London, Lagos Chamber of Commerce and Industry Award “for promoting best practice reporting and corporate disclosure and the “financial institution of the year” by the Oil & Gas Year (TOGY) Nigeria.

    The CMC, where the NSE plays a major role as a self regulatory organisation (SRO), has spearheaded the implementation of the 10-year capital market master plan. Director, general, Securities and Exchange Commission (SEC), Mr. Mounir Gwarzo, outlined that seven major initiatives are expected to be fully implemented by the end of this year. These priority areas included dematerialisation, e-dividends, direct cash settlement, reduction of transaction costs, unified licensing model across money and capital markets, obtaining liquidity status for non-interest capital market products and strengthening market institutions by completing the recapitalisation exercise.

    “Our focus at SEC, the NSE and other stakeholders is to continually engage and bring the domestic investors back to the market as we think they are very critical in lifting the market up. The market is well regulated and operators are following a strong regulation regime and we are putting in strong processes to make sure the operators are fit, strong and proper. Markets go up and down, what is more important is the fundamentals of the market,” Gwarzo said on the outlook of the Nigerian market. The electronic dividend (e-dividend) portal, which basically automatically transfers dividends to a shareholder’s bank account, whatever the status or type of the account, has been launched. Direct cash payment is scheduled to take off by January 2, 2016. As against the current general practice whereby the payments for investors’ transactions go into the accounts of the brokers for onward disbursement to their clients, the general practice under the ‘direct cash settlement’ will be to send the net proceeds directly from the clearing and settlement system straight to the investors’ accounts. SEC had in September concluded the recapitalisation exercise for market operators and it is currently undertaking post-recapitalisation audit preparatory to the release of the final list of compliant market operators later this month. SEC, after CMC quarterly meeting two weeks ago, launched the Capital Market Master Plan Implementation Committee- a highly influential advocacy group for the market; Corporate Governance Scorecard-a review mechanism for best practices and the National Investor Protection Fund (NIPF)-a fund dedicated to compensating investors for non-market risks. SEC provided the NIPF with take-off grant of N5 billion.

    But there is need for government to align its fiscal and monetary policies with the yearnings of the capital market. Several years after privatisation, privatised companies have demurred from listing their shares, other nationally strategic companies see no incentives to list, listed companies receive little or no special status from national economic policies and the capital market is relegated to the background in government economic management. These have compounded the shallow domestic participation in the Nigerian capital market. Less than three per cent of Nigerians are participating in the Nigerian stock market, less than 0.2 per cent of Nigerians have ever invested in collective investment schemes otherwise known as mutual funds and foreign investors account for some 60 per cent of retail transactions at the market. Beyond the efforts of SEC, NSE and the CMC, government needs to stimulate the market with friendly policies. Notwithstanding the foggy pre-dawn, the daybreak appears near for the market.

     

  • How technology can boost food production

    How technology can boost food production

    Nigeria’s 170 million population is projected to increase to 250 million by 2050. With the growth rate significantly faster than that of food production, experts say there is the need to raise food production by about 70 per cent between now and 2050 or risk a serious food crisis. To avert the crisis, they are canvassing the deployment of modern technologies to address the challenges and harness the opportunities in the food industry. DANIEL ESSIET reports.

    Nigeria’s population is projected to hit 250 million by 2050, and domestic demand for food will automatically rise, driven by the predicted population growth. This, according to the Managing Director, Dizengoff Nigeria, Mr. Richard Hargrave, will make it very difficult to feed everyone.

    Specifically, Hargrave and other experts noted that the population growth rate is faster than that of food production. They warned that unless food production is raised by about 70 per cent, between now and 2050, a serious food crisis may be staring the country in the face.

    Hargrave was, however, quick to add that since food production does not meet  demand, a viable option for agricultural and food industries is to increase production  through innovative technologies.

    Addressing a forum at the just-concluded Agro Expo in Lagos, on the topic: “Tomorrow’s Technology Today’, Hargrave said one sure way of boosting production  is by getting more farmers to adopt modem technology.

    According to him, advances in modern technology and innovation will be required to produce the significant yield increases needed to boost food production. He said there is a parade of new technologies and scientific breakthroughs, such as vertical farming, green houses, aquaponics and others, for farmers and food industries.

    Hargrave said through facilities, such as green houses, which Dizengoff Nigeria is using to empower farmers, food production has been increased with less water used and fewer chemical inputs.

    He made a case for improved value chain performance to offer income opportunities for farmers, processors and other operators in agribusiness. He, however, said achieving the full potential of technologies to boost food production requires effective leadership.

    He, therefore, said government must invest or encourage investment in roads and infrastructure to facilitate food production. According to him, government’s policy should aim to achieve increase in agric exports, improve food security, and create new jobs and income for rural populations.

    He said the Agricultural Transformation Agenda (ATA) of the previous administration could address the broader constraints of achieving agricultural productivity growth and food security, with co-ordinated national strategies and investment plans for agriculture.

     

    Vertical farming to the rescue

    The challenge of feeding a growing population is pushing the concept of urban farming to new heights. Since arable land is not sufficiently available for farming in the urban areas of the country, Hargrave called for the establishment of vertical farms.

    Vertical farming as a component of urban agriculture is the practice of cultivating plant life within a skyscraper greenhouse or on vertically inclined surfaces. Intended to bring large-scale food production to places where most of the consumption occurs, vertical farms are farms on high-rise farm buildings that might produce everything from algae-based biodiesel to salad greens, eggs, beef, and milk.

    Hargrave explained that vertical farms are tailor made skyscrapers containing multiple levels of viable farmland to provide year-round food production in a controlled, parasite-free environment.

    According to him, vertical farming practised on a large scale in urban centres in places such as Lagos has great potential to supply enough food in a sustainable way to comfortably feed the increasing population in that mega-city.

    Apart from allowing year-round food production without loss of yields due to climate change or weather-related events, the system, Hargrave noted, eliminates the need for large-scale use of pesticides and herbicides, creating an environment that encourages sustainable urban life.

     

    Aquaponics also

    According to experts, aquaponics, which is a combination of fish and plant production using aquaculture and hydroponics systems, also holds promises of increasing food production. It is an intensive sustainable agricultural production system that connects hydroponic and aquaculture systems to produce multiple cash crops with reduced water and fertiliser inputs.

    An aeroponics system cultivates leafy greens, such as arugula and watercress, in growing cycles of 18 days, compared with 60 days or more in conventional agriculture. It is highly suited for small farm producers targeting local markets and agri-tourism opportunities. In an aquaponic system, wastes produced by fish become beneficial fertiliser for hydroponically grown plants (ie plants grown inside water).

    The most common aquaculture (raising fish) system used in aquaponics (growing fish and plants within the same system) is the Re-circulating Aquaculture Tank System (RAS). Here, the tank becomes the base nutrient and water reservoir that flows to the hydroponic subsystem and is usually re-circulated back to the tank.

    This is an intensive, usually high-fish-density production system that allows for build up of waste nutrients from fish feed to levels that can benefit plant growth. Pond water may contain harmful microorganisms and algae, so the use of well water or municipal water sources when using RAS aquaponics is recommended.

    Dizengoff Nigeria, for instance, has identified various agro technologies and  is making  it available to farmers  in Nigeria to support competitive Small and Medium Enterprises (SMEs) in agribusiness.

    The Vice-Chancellor, Federal University of Technology, Akure, Prof. Adebiyi Daramola, said the agriculture transformation agenda can be realised by harnessing and enabling the entrepreneurial skill and spirit of young people. He said this should be at the forefront of every food security and growth agenda of the government.

    Delivering a  paper titled: Agriculture: A Panacea for Youth Unemployment in Nigeria at the 15th Prof. A.A. Adegbola Memorial Lecture organised by Ikorodu Division Human Resource Development Board (IDHRDB) in Lagos, Prof. Daramola noted that young people often see agriculture as outdated, unprofitable and hard work.

    He, however, said there should be technology support to open up a myraid of opportunities for entrepreneurship along the entire agribusiness value chain. According to him, innovation and technology, often regarded as  pre-conditions for successful entrepreneurship, should be supported to increase the nation’s competitiveness, productivity, growth and also create more jobs.

    He said increased involvement of youths in agribusiness will help reduce unemployment. “The enhanced agribusiness, according to him,  throws open opportunities for employment in marketing, transport, cold storage and warehousing facilities, credit, insurance and logistic support services’’.

    According to him, what is needed is to better prepare youths technologically to meet the challenges and take advantage of new opportunities in agriculture to improve their livelihoods.

    At a recent international  fora, the Chief Executive of Pan-African Agribusiness and Agro industry Consortium (PANAAC), Lucy Muchoki, said her organisation has been able to identify key innovations. PANAAC, she said,  has been sensitising farmers and mobilising support for the  commercialisation of the technologies.

     

  • ‘Why concrete road is best’

    ‘Why concrete road is best’

    The rate at which asphalt roads fail has become alarming. This has  provoked debate on the way forward. Experts urge the Federal Government to explore the use of concrete roads because of their durability, Assistant Editor OKWY IROEGBU-CHIKEZIE writes.

    A World Health Organisation (WHO) report adjudged Nigerian roads the most dangerous in Africa. The report, which focused on road traffic deaths in selected African countries, said Nigeria accounts for the highest fatalities with 33.7 per cent per 100, 000 population yearly.

    According to the report titled: “Road safety in the WHO African region”, more than one in four traffic accident deaths in Africa occur on Nigerian roads. It added that road accident is the third leading cause of death in Nigeria.

    The report said Nigeria has the second worst traffic fatalities in the world. South Africa closely trailed Nigeria, coming second with 31.9 per cent per 100,000 population, followed by the Democratic Republic (DR) of Congo, Ethiopia, Kenya, Tanzania and Uganda. The fatality figures for USA and Britain are 15 and seven per cent. The report, apart from calling to question the safety of roads in Nigeria, highlighted the recklessness of drivers, the poor maintenance of vehicles and the numerous dilapidated roads with several bad spots that have become death traps.

    The heavy reliance on road transport as opposed to other modes of transport is believed to be partly responsible for the increasing number of road failures and the attendant carnage. More importantly, experts say the use of asphalt roads, which is less durable than concrete roads, contributes to road failures.

     

    The clamour for concrete

    Many professionals and stakeholders in the built environment are clamouring for a change of strategy and approach in road construction and management.  The clamour is not without justification. For instance, experts say while concrete roads have a long service life of 40 years, asphalt roads last for 10 years. Aside their durability, concrete roads are more environmentally friendly compared to asphalt roads.

    That is not all. Concrete roads do not require frequent repairs or patch works like asphalt roads. Besides, advancements in concrete technology have reduced the cost of concrete paving while improving performance greatly. For instance, the average life span of concrete pavements is 27.5 years before repair, while asphalt pavements have an average life span of only 15.5 years before repair. Also, studies show that concrete interstate pavements cost 13-28 per cent less in the long run than asphalt interstate pavements.

    Studies have also shown that maintenance costs were reduced by 75 per cent when concrete was used to pave roads. Furthermore, researches have confirmed that vehicles consume less fuel on concrete roads. Specifically, a vehicle, when run over a concrete road, consumes 15-20 per cent less fuel than that on asphalt road. This, according to experts, is because a concrete road does not get deflected under the wheels of loaded trucks. Unlike asphalt roads, concrete roads do not get damaged by the leaking oils from the vehicles or by the extreme weather conditions like excess rain or extreme heat.

    Also, asphaltic roads produce lots of highly polluting gases at the time of melting it for paving, suggesting that less fuel consumption by the vehicle running on a concrete road means less pollution.

     

    Professional bodies, experts speak

    The Nigerian Institution of Structural Engineers (NISTRUCTE) has called on the nation to switch over to the use of concrete for road construction.   The engineers made this submission at the institution’s just-concluded 28th Annual Conference in Abuja, with the theme: Structural Engineering Excellence in an Environment inundated with collapse.

    •Ilugbekhai
    •Ilugbekhai

    Its President Mr. Samuel Ilugbekhai, said: “Concrete pavements have been found durable and last longer than bituminous roads. The time has come when Nigeria should step up the use of concrete for roads especially now that the country has increased its potential to produce cement at lower prices and even exporting to other countries.”

    He lamented that the country’s dilapidated roads have become death traps, while the economic cost to the nation is becoming too high.

    Its Vice President, Mr. Eddy Atumonyogo, said concrete pavements are very good because they last longer and could be used for busy roads, especially in the state capitals.

    Mr. Oreoluwa Fadayomi, said concrete pavements have been in use all along but that the difference now is that the conversation may shift to adopting it to replace bitumen totally.

    An engineer, Mr. Aliyu Aziz Abubakar, said the viability of concrete pavements should be looked at particularly now that the country’s manufacturing sector produces cement more than average national need.

    Chairman, Sea Dredge Construction Company, Mr. Ayo Folorunsho, said concrete roads are the future and the way to go. He argued that although the cost may be high in the short run, it will be economical in the long term given the increasing capacity of cement companies in the country. He said more people die from bad roads than collapsed buildings, urging the country to take the issue of concrete pavements more seriously.

    The Abia State government may have taken the lead in making the required switch. The state government has successfully completed a road using cement technology, which is also known as rigid pavement technology in road construction.

    The state, which is experimenting with this technology in road construction on three roads, has completed the 400 metres ENUC Road, off Udeagbala in Aba State. According to the State Governor, Mr. Okezie Ikpeazu, the technology is more durable and more sustainable and will be extended to other roads in Abia.

    He said the construction engineers are currently using a mixture of crush rock-based materials and other items to achieve a thickness fill and compaction to the level of 300mm and then cast with concrete reinforcement with 8mm to 10mm high tensil (mash of wires) reinforcement bars over the stabilised base course before treatment with prime coat and asphaltic concrete.

    The governor said though the cost of this technology is higher than the conventional construction methods, the state government chose to experiment with it as a way of strengthening the load bearing capacity of some roads in the state and boost the strength and quality of the finished work.

    Ikpeazu added that roads constructed with this technology have a sustainability guarantee of 10 to 20 years. He stated that the cement technology will address the challenges raised by the soil examination conducted on the three roads, noting that the process involves soil stabilisation.

    Experts say soil stabilisation is a process of introducing materials that have properties, which the routine construction materials or naturally occurring materials lack to further strengthen pavement and improve the load bearing capacity of the roads.

    He said the cement technology is used in the construction of airport run-ways, tarmac and places that carry high load bearing capacity, machines and equipment. The governor said it is a good solution for achieving sustainable roads in the country. He said it is better and of a higher value than the conventional method of using only asphalt. “Concrete lasts longer, no potholes and with less need for maintenance and repairs,” he added.

    An engineer, Mr. Onwuka Uchendu, could not agree less. He said the use of concrete for road construction has the added advantage of not creating potholes or craters that cause wet weather accidents. He further said concrete roads are highly durable and more environmentally friendly compared to asphalt roads.

    Uchendu however, argued that concrete roads have some draw backs such as high paving cost compared to asphalt road. He said: “In the case of concrete roads, if it breaks the whole concrete slab will need to be replaced. Also, in rainy season vehicles tend to slip or slide on concrete road due to rain and snow.

    Continuing, he said asphalt is still less costly compared to concrete. Moreover, it takes less time to build an asphalt road than a concrete road. “Asphalt dries faster, it is a recyclable material. It can be used again and again by melting it and can be re-layered over the old layer. Furthermore, it provides better traction and skid resistance for vehicles, he added,” he argued.

    At the NISTRUCTE Annual Conference, President Muhammadu Buhari, represented by the Permanent Secretary, Federal Ministry of Works, Mr. D.S. Kigbu, regretted the number of Nigerians who die as a result of bad structures. He tasked the engineers to step up action to put an end to collapse of structures and other engineering problems.

    The President of the Nigerian Society of Engineers (NSE), Mr. Isaac Ademola Olorunfemi, an engineer, who was represented by Mr. Olatunde Akinteye, said the Society was considering an infrastructural scorecard for states in the country to ginger governments in their developmental strides.

    The use of concrete for road construction works may be one of the yardsticks for assessing states in the area of road infrastructure. With Abia State showing the way, experts say that states and indeed, all the tiers of government should immediately begin the switch to concrete road to halt the increasing carnage on the nation’s estimated 194, 000 Km road network.

     

    Organised Private Sector opinion

    Chairman of Dangote Cement, Aliko Dangote during the week reiterated his plea to the Federal Government to urgently consider the use of concrete roads in the country.

    Speaking with reporters at the weekend, he said, it would be to the benefit of Nigerians and even the Federal Government to embrace the option of using concrete for roads in the country. Aside being cheap, he said concrete roads are more durable and that its maintenance cost is near zero.

    He said: “We are pushing for Nigeria to do a concrete road. It is cheaper to do a concrete road that will last 50 years than to do a bitumen road. It will also help in eliminating corruption because if you go and build a bitumen road, it will have to be adequately maintained unlike a concrete road that is very durable.”

     

  • BVN’s slow, steady lift of naira, foreign reserves

    BVN’s slow, steady lift of naira, foreign reserves

    Initially, many saw no reason for the Bank Verification Number (BVN), believing that it will aid the fraud it is supposed to curb. But now, BVN’s implementation, especially for foreign exchange (forex) buyers, is showing results – there is an improvement in foreign reserves. It will also strengthen naira as more Bureaux de Change (BDCs) return unutilised dollars, writes COLLINS NWEZE. 

    Bureaux De Change (BDCs) are, for the first time, in over a decade, beginning to take regulations seriously. Previously, it was unthinkable to have a BDC operator return unutilised foreign exchange (forex) to the Central Bank of Nigeria (CBN) as required by law.

    Presently, BDCs that are unable to sell the $50,000 weekly allocations from the CBN now return the unutilised funds since the implementation of Bank Verification Number (BVN) for forex buyers began.

    The naira is expected to rebound against the dollar in the coming weeks as more BDCs return unutilised funds to CBN coffers. The funds, which, before now, were held up in BDCs’ vaults, will contribute  to CBN’s defence of naira. The funds will also be channeled to manufacturers and other real sector operators that thrive on forex.

    General Manager, Travelex Nigeria, Anthony Enwereji, said the company sells a dollar at N203.89, and that the implementation of BVN for forex buyers would  strengthen the naira against the greenback.

    He said the policy wouldf have a long-term positive impact on the naira  and improve reserves.

    The foreign reserves have remained above $30 billion in the last two weeks, after the CBN introduced measures checking forex speculators.

    The CBN had mandated BDCs to get BVNs of customers buying forex from them. Although the policy implementation, which started on November 1, has reduced the volume of dollars sold by BDCs, it has also made forex transactions more transparent.

    The apex bank has been able to get a grip on the local currency movement on the interbank market, keeping the naira at between 197 and 197.5 on the interbank market in the last one week.

    The BVN, which captures customers’ biometric data, such as fingerprints, provides a unique identification for them and equally protects their bank accounts from unauthorised persons.

    CBN Governor Godwin Emefiele said the biometric technology involves the recording of a person’s unique physical traits, such as fingerprints and facial  features. The record, he said, will be used to identify the person later.

    He said the BVN became exigent, following the increasing incidents of compromise in conventional security systems, such as password and Personal Identification Number (PIN) of customers, which has led to loss of funds. There is, therefore, a high demand for greater security for access to sensitive or personal information in banks.

    The CBN insists that the adoption of BVN as a condition for the purchase of forex is expected to reduce  multiple purchases, round tripping and illicit transfer of funds. It will also facilitate the enforcement of authorised limits for forex sales to end users, sanitise the retail segment of the market and engender policies that will facilitate better allocation of forex, based on genuine demands.

    It insists that BVN provides the unique identity of each customer for the purpose of achieving effective “Know Your Customer” (KYC) principle and fraud prevention.

    It says the BVN is neither a payment instrument nor an account number and, therefore, cannot be used to access any account by unauthorised users. The banks, BDC operators and regulators use BVN to validate the identity of a customer, using finger prints and photographs obtained at the point of enrolment.

     

    Enrolment continues

     Although the registration deadline elapsed on October 31,  stakeholders, including banks, have continued to urge customers to  register. The Consumer Right Awareness Advancement and Advocacy (CRAAAI) also urged Nigerians to register for their BVN.

    Its Chairman, Mr. Moses Igbrude, who spoke at a stakeholders’ forum on identity management in the economy, said identity management is a broad administrative area that deals with identifying individuals in a particular system.

    He listed the system to include country, network, or an enterprise and controlling their access to resources within that system by associating user rights and restrictions with the established identity.

    He added that the role of technology in modernising the sector has witnessed a paradigm shift from the traditional methods of banking to digital channels, which involve enormous levels of electronic data capture (EDC) of customer’s information. “Everybody needs security; if people are identified before they commit any crime, they  will be identified easily,’’ he said.

    Many of the bank customers, who spoke  said although the deadline had elapsed, the continuous registration exercise supported by the CBN is a welcome development. Sadiq Moshood, a tailor based in Mushin, a suburb of Lagos, said restrictions on unregistered customers’ accounts are already enough punishment, and urged unregistered customers to do so. “I think it is in the overall interest of the banks and customers that the BVN project succeeds,” he said.

    Another customer, James Chukwu, said he has enrolled on the BVN network because he does not want to expose his account to fraudsters. “I understand the BVN will help protect my account from fraudsters and make it easier for all my accounts in every bank to be linked. I believe the exercise will help promote banking security,” he said.

    The apex bank has directed banks to ensure uninterrupted enrolment of customers on the BVN platform. Its Director, Corporate Communications, Ibrahim Mu’azu, said although the time frame for the initial enrolment has elapsed, the exercise continues indefinitely.

    He said customers who were yet to register are to do so to avoid restrictions on their accounts.

    “Account holders, who are yet to obtain their BVN, are enjoined to register at their banks. There are two steps in the BVN process. The first step is to obtain a BVN, while the second step requires the account holder to link the BVN with his or her bank account(s),” he said.

    Mu’azu said an individual can enrol for a BVN without necessarily having an existing bank account. Such individual can then submit the acquired BVN at any bank he/she wishes to open an account.

    He said linking BVN to other accounts is a one-stop-shop, which enables account holders to register and link their BVN to their accounts at one location, irrespective of the banks in which they have their accounts. All these are aimed at making the process as seamless as possible.

    “The BVN is neither a payment instrument nor an account number and therefore, cannot be used to access any account by unauthorised users,” he said.

    The BVN was introduced in collaboration with the Bankers’ Committee on February 14, last year, to ensure a unique identity for all bank customers and other users of financial services with the use of the customers’ biometrics. Initially, it was estimated that all customers would, within a period of 18 months, complete enrolment in the new system of customer identification. The enrollment for the scheme can be done in banks across the country.

    The Nigeria Interbank Settlement System (NIBSS), which guides the modalities of the project, is working on ensuring the success of the exercise by collaborating with telecoms firms to create a platform through which bank customers can confirm their registration status.

     

    Telecom operators step in

     Already, NIBSS has collaborated with one of the country’s telecoms service providers, Etisalat to roll out the BVN Query Service.

    Speaking on the service, the NIBSS Managing Director, Ade Shonubi, said the initiative was in response to growing public demand for confirmation of BVN status by those, who have enrolled on the platform. He added that the BVN Query Service will boost such efforts like KYC for banks.

    Chief Marketing Officer, Etisalat Nigeria, Francesco Angelone, said the partnership with NIBSS on USSD BVN Notification Service was in line with the telco’s commitment to continue to create value for the consumers across all sectors, including the banking and telecoms industries.

    “We are happy to be the first to offer this product among the operators because we believe that innovation is the way the telecoms industry must lead,” Angelone said.

     

  • ‘Why concrete road is best’

    ‘Why concrete road is best’

    The rate at which asphalt roads fail has become alarming, provoking a debate on the way out. Many, including leading industrialist and Africa’s richest man, Aliko Dangote, are voting for concrete roads because of their durability, Assistant Editor OKWY IROEGBU-CHIKEZIE writes.

    A World Health Organisation (WHO) report adjudged Nigerian roads the most dangerous in Africa. The report, which focused on road traffic deaths in selected African countries, said Nigeria accounts for the highest fatalities with 33.7 per cent per 100, 000 population yearly.

    According to the report titled: “Road safety in the WHO African region”, more than one in four traffic accident deaths in Africa occur on Nigerian roads. It added that road accident is the third leading cause of death in Nigeria.

    The report said Nigeria has the second worst traffic fatalities in the world. South Africa closely trailed Nigeria, coming second with 31.9 per cent per 100,000 population, followed by the Democratic Republic (DR) of Congo, Ethiopia, Kenya, Tanzania and Uganda. The fatality figures for USA and Britain are 15 and seven per cent. The report, apart from calling to question the safety of roads in Nigeria, highlighted the recklessness of drivers, the poor maintenance of vehicles and the numerous dilapidated roads with several bad spots that have become death traps.

    The heavy reliance on road transport as opposed to other modes of transport is believed to be partly responsible for the increasing number of road failures and the attendant carnage. More importantly, experts say the use of asphalt roads, which is less durable than concrete roads, contributes to road failures.

     

    The clamour for concrete

    Many professionals and stakeholders in the built environment are clamouring for a change of strategy and approach in road construction and management.  The clamour is not without justification. For instance, experts say while concrete roads have a long service life of 40 years, asphalt roads last for 10 years. Aside their durability, concrete roads are more environmentally friendly compared to asphalt roads.

    That is not all. Concrete roads do not require frequent repairs or patch works like asphalt roads. Besides, advancements in concrete technology have reduced the cost of concrete paving while improving performance greatly. For instance, the average life span of concrete pavements is 27.5 years before repair, while asphalt pavements have an average life span of only 15.5 years before repair. Also, studies show that concrete interstate pavements cost 13-28 per cent less in the long run than asphalt interstate pavements.

    Studies have also shown that maintenance costs were reduced by 75 per cent when concrete was used to pave roads. Furthermore, researches have confirmed that vehicles consume less fuel on concrete roads. Specifically, a vehicle, when run over a concrete road, consumes 15-20 per cent less fuel than that on asphalt road. This, according to experts, is because a concrete road does not get deflected under the wheels of loaded trucks. Unlike asphalt roads, concrete roads do not get damaged by the leaking oils from the vehicles or by the extreme weather conditions like excess rain or extreme heat.

    Also, asphaltic roads produce lots of highly polluting gases at the time of melting it for paving, suggesting that less fuel consumption by the vehicle running on a concrete road means less pollution.

     

    Professional bodies, experts speak

    The Nigerian Institution of Structural Engineers (NISTRUCTE) has called on the nation to switch over to the use of concrete for road construction.   The engineers made this submission at the institution’s just-concluded 28th Annual Conference in Abuja, with the theme: Structural Engineering Excellence in an Environment inundated with collapse.

    •Ilugbekhai
    •Ilugbekhai

    Its President Mr. Samuel Ilugbekhai, said: “Concrete pavements have been found durable and last longer than bituminous roads. The time has come when Nigeria should step up the use of concrete for roads especially now that the country has increased its potential to produce cement at lower prices and even exporting to other countries.”

    He lamented that the country’s dilapidated roads have become death traps, while the economic cost to the nation is becoming too high.

    Its Vice President, Mr. Eddy Atumonyogo, said concrete pavements are very good because they last longer and could be used for busy roads, especially in the state capitals.

    Mr. Oreoluwa Fadayomi, said concrete pavements have been in use all along but that the difference now is that the conversation may shift to adopting it to replace bitumen totally.

    An engineer, Mr. Aliyu Aziz Abubakar, said the viability of concrete pavements should be looked at particularly now that the country’s manufacturing sector produces cement more than average national need.

    Chairman, Sea Dredge Construction Company, Mr. Ayo Folorunsho, said concrete roads are the future and the way to go. He argued that although the cost may be high in the short run, it will be economical in the long term given the increasing capacity of cement companies in the country. He said more people die from bad roads than collapsed buildings, urging the country to take the issue of concrete pavements more seriously.

    The Abia State government may have taken the lead in making the required switch. The state government has successfully completed a road using cement technology, which is also known as rigid pavement technology in road construction.

    The state, which is experimenting with this technology in road construction on three roads, has completed the 400 metres ENUC Road, off Udeagbala in Aba State. According to the State Governor, Mr. Okezie Ikpeazu, the technology is more durable and more sustainable and will be extended to other roads in Abia.

    He said the construction engineers are currently using a mixture of crush rock-based materials and other items to achieve a thickness fill and compaction to the level of 300mm and then cast with concrete reinforcement with 8mm to 10mm high tensil (mash of wires) reinforcement bars over the stabilised base course before treatment with prime coat and asphaltic concrete.

    The governor said though the cost of this technology is higher than the conventional construction methods, the state government chose to experiment with it as a way of strengthening the load bearing capacity of some roads in the state and boost the strength and quality of the finished work.

    Ikpeazu added that roads constructed with this technology have a sustainability guarantee of 10 to 20 years. He stated that the cement technology will address the challenges raised by the soil examination conducted on the three roads, noting that the process involves soil stabilisation.

    Experts say soil stabilisation is a process of introducing materials that have properties, which the routine construction materials or naturally occurring materials lack to further strengthen pavement and improve the load bearing capacity of the roads.

    He said the cement technology is used in the construction of airport run-ways, tarmac and places that carry high load bearing capacity, machines and equipment. The governor said it is a good solution for achieving sustainable roads in the country. He said it is better and of a higher value than the conventional method of using only asphalt. “Concrete lasts longer, no potholes and with less need for maintenance and repairs,” he added.

    An engineer, Mr. Onwuka Uchendu, could not agree less. He said the use of concrete for road construction has the added advantage of not creating potholes or craters that cause wet weather accidents. He further said concrete roads are highly durable and more environmentally friendly compared to asphalt roads.

    Uchendu however, argued that concrete roads have some draw backs such as high paving cost compared to asphalt road. He said: “In the case of concrete roads, if it breaks the whole concrete slab will need to be replaced. Also, in rainy season vehicles tend to slip or slide on concrete road due to rain and snow.

    Continuing, he said asphalt is still less costly compared to concrete. Moreover, it takes less time to build an asphalt road than a concrete road. “Asphalt dries faster, it is a recyclable material. It can be used again and again by melting it and can be re-layered over the old layer. Furthermore, it provides better traction and skid resistance for vehicles, he added,” he argued.

    At the NISTRUCTE Annual Conference, President Muhammadu Buhari, represented by the Permanent Secretary, Federal Ministry of Works, Mr. D.S. Kigbu, regretted the number of Nigerians who die as a result of bad structures. He tasked the engineers to step up action to put an end to collapse of structures and other engineering problems.

    The President of the Nigerian Society of Engineers (NSE), Mr. Isaac Ademola Olorunfemi, an engineer, who was represented by Mr. Olatunde Akinteye, said the Society was considering an infrastructural scorecard for states in the country to ginger governments in their developmental strides.

    The use of concrete for road construction works may be one of the yardsticks for assessing states in the area of road infrastructure. With Abia State showing the way, experts say that states and indeed, all the tiers of government should immediately begin the switch to concrete road to halt the increasing carnage on the nation’s estimated 194, 000 Km road network.

     

    Organised Private Sector opinion

    Chairman of Dangote Cement, Aliko Dangote during the week reiterated his plea to the Federal Government to urgently consider the use of concrete roads in the country.

    Speaking with reporters at the weekend, he said, it would be to the benefit of Nigerians and even the Federal Government to embrace the option of using concrete for roads in the country. Aside being cheap, he said concrete roads are more durable and that its maintenance cost is near zero.

    He said: “We are pushing for Nigeria to do a concrete road. It is cheaper to do a concrete road that will last 50 years than to do a bitumen road. It will also help in eliminating corruption because if you go and build a bitumen road, it will have to be adequately maintained unlike a concrete road that is very durable.”