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news you can trust I ** wednesDAY 01 april 2020 I vol. 19, no 532
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FG opens test centres in Kaduna, Maiduguri, Kano, Sokoto
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resident Muhammadu Buhari on Sunday ordered a total lockdown of Lagos, Ogun and the Federal Capital Territory (FCT) from 11pm on Monday to curb the spread of
the deadly coronavirus. He, however, later extended the take-off date for Ogun to Friday. While the lockdown is bound to have huge impact on people’s lives and livelihoods in all the affected states, it is specifically putting to test the dynamism of Lagos, Nigeria’s commercial nerve-centre
which is home to over 20 million restless inhabitants. On Monday, the announcement caused panic withdrawals at banks’ automated teller machines in Lagos, with scores of residents making frantic efforts to get enough money to stockpile food and other daily needs. “I have to withdraw as much
Lagos, Abuja economy grounded as presidential directive takes effect See page 30
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as I can so I do not get stranded within this period,” young Emeka Umanu, who spent one hour and 15 minutes at a Zenith Bank ATM at Okota, Lagos, said. “When you visit ATMs at a period like this, the response you get most times is ‘out of service’ or ‘unable to dispense cash’,” Umanu said. The number of Nigerians with Continues on page 34
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Coronavirus: Buhari’s lockdown order tests Lagos’ dynamism ODINAKA ANUDU, MICHAEL ANI (Lagos) & Tony Ailemen (Abuja)
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MTN to push ahead with Nigeria IPO amid market rout
SEGUN ADAMS
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TN Group Ltd will push on with a plan to reduce its majority stake in its Nigerian operations through an initial public offering (IPO), though turmoil caused by the coronavirus may require the sale to be done in smaller chunks than anticipated. The impact of the pandemic on international financial markets doesn’t change the importance of selling part of the 79 percent shareholding to local investors, Chief Financial Officer Ralph Mupita said in an interview. However, the rest of a threeto-five-year plan to dispose of 25-billion rand ($1.4 billion) of assets will probably take a back seat for now, he said. “In Nigeria, we still want to do part of our retail offer, even if it’s a smaller part of the total planned sale,” Mupita said. “We are applying our minds to doing this at the moment.” Continues on page 34
Inside
Dated Brent falls to $17 as physical, futures markets diverge P. 2 L-R: Etsu Ndagi, commander, 9 brigade, Ikeja Army Cantonment; Hakeem Odumosu, commissioner of police, Lagos Command; Babajide SanwoOlu, Lagos State governor; Ibrahim Aliyu, commander, Nigeria Navy Ship (NNS) Beecroft, Apapa, and Abdulfatai Sanusi, director, Department of State Services (DSS), during a media briefing after the State Security Council meeting at Lagos House, Marina.
COVID-19: Corporate governance and business sustainability P. 32
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news Coronavirus: Nigeria’s fate hangs on decisive leadership, personal responsibility CALEB OJEWALE & SEGUN ADAMS
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ithout decisive leadership and personal responsibility, the spread of coronavirus in Nigeria could reach unprecedented levels that will overwhelm the country’s grossly inadequate medical facilities. With an estimated 100,000 hospital beds to a population of 190 million people and less than 50,000 doctors, if expanded mass testing reveals the coronavirus has spread far beyond the cases already identified, experts fear the country could fare worse than developed countries that have seen their facilities stretched. Nigeria could be facing no more than three imminent deaths and 187 infections by
April 22, or a grimmer scenario with almost 130,000 imminent deaths, according to a recent study by Lanre Akinbo, managing director, Wizer Advisory Limited, that suggests the best path for the country based on mathematical projections. There are 135 confirmed cases of coronavirus infections in Nigeria as at 3pm on Tuesday, with eight recoveries and two deaths recorded. Under a business-as-usual scenario, by April 23 infections would be at 2.32 million, with 73 already dead and 129,857 facing imminent death while around 195 million people will be at risk, according to the study. “Assuming a 5.6 percent mortality rate, we should expect about 73 deaths by that date. However, the bigger challenge is the ≈130,000 ‘des-
tined deaths’ (death of infected people that would not have occurred by 23 April, because death occurs about three weeks after infection),” the report said. According to Carter Mecher, a public health adviser who worked with the Obama and Bush administrations in the US, quoted by New York Times, “By the time you have a death in the community, you have a lot of cases already. It is giving you insight into where the epidemic was, not where it is, when you have something fast moving.” But the aggressive fight against COVID-19, through social distancing and similar measures, would reduce infections to 1,763 with 26 deaths and 99 imminent deaths while 197 million would be at risk. The study projects, on the other hand, that by April 22,
20 percent contact reduction would reduce infection to 246,905 with 36 deaths and 13,827 looming deaths. 50 percent contact reduction would reduce infection to 6,029 with 11 deaths and 338 imminent deaths, while 75 percent contact reduction would slow infection to just 187 with three deaths and 10 imminent deaths. The study noted, by factoring total hospital bed capacity at an estimated 100,000, that if the baseline scenario unfolds, the country’s healthcare system would reach a tipping point before the end of April 2020. “If we assume a hospitalisation rate of just 10 percent arising from COVID-19 infections, the number of sick people will exceed the number of hospital beds by over 130 percent!” it said.
Social media misinformation complicates Nigeria’s fight against coronavirus ISAAC ANYAOGU
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he Nigerian Centre for Disease Control (NCDC), a government agency in the forefront of the fight against COVID-19, has its task made more difficult by the flood of misinformation, especially on social media. “Beware of unverified messages on social media!” the agency warned on Twitter following the counsel by a respected traditional ruler on alternative remedies for COVID-19. On March 30, Adeyeye Enitan Ogunwusi, the Ooni of Ife and spiritual ruler of the Yoruba, Nigeria’s second-biggest ethnic group, on social media platforms proposed the use of traditional herbs in the fight against the global coronavirus pandemic. “These DO NOT protect against #COVID19: Consuming hot lemon, palm oil, ginger or garlic, gargling with salt water and drinking or spraying dettol on your body,” the NCDC warned. An entrepreneur and a chartered accountant, Oba Ogunwusi is more qualified to make pronouncement on a company’s balance sheet but that did not prevent him from recommending herbal cure. The same is true for many Nigerians who use social media platforms and feel no restraint in posting false information without a concern for the consequences. During the Ebola outbreak in 2014, two people
died and at least 20 were hospitalised, all because of a social media prank urging people to drink excessive amounts of salt water to avoid catching the Ebola virus. The NCDC now has its work cut out. It has to fight both a virus and idiocy on a shoe-string budget. Chikwe Iheakweazu, director-general of NCDC, in a recent televised interview said a huge part of the agency’s funds are now spent in messaging. NCDC is fighting a difficult battle urging Nige-
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rians to stay home, it has no power to restrain them from tweeting unverified information, sometimes outright pranks started on WhatsApp messaging platform before it goes viral. The NCDC is also warning that some people are replicating its accounts on Instagram and posting information pretending to be from the agency even while it is in the process of verifying its accounts with Instagram. Social distancing rules imply that many Nigerians have held closely to
their phones. According to the Digital 2020 Global Overview Report, 169.2 million Nigerians have mobile (phone) connections. This represents 83 percent penetration of the total population of 203.6 million people. Fifty percent of the population live in urban areas. 85.49 million Nigerians have internet access. This represents 42 percent of the total population. 27 million of them have social media accounts that they Continues on page 34
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Play defence with these names amid market selloff BALA AUGIE
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TN Nigeria and Airtel Africa are good defensive stocks amid the gloom caused by the coronavirus pandemic that is ravaging the economy and causing selloff in the equities market. Defensive stocks are hot cake because their revenue and profits are less sensitive to the well-being of the overall economy. “They are a good buy because they pay good dividend over a period of time,” said Wale Agbeyangi, group managing director of Cordros Capital Limited. Analysts expect better numbers from the telecom companies in the months ahead as data usage will surge among populace because Nigerians will make use of their smartphones to browse more while they stay safe at home. Recent data on key industry fundamentals published by the Nigerian Communications Commission (NCC) showed that the total number of broadband subscriptions grew 1.8 percent month on month (m/m) and 19.0 percent year on year (y/y) to 73.5 million. Furthermore, broadband penetration expanded to 38.49 percent in January 2020 from 37.80 percent in December 2019 and 32.34 percent in January 2019. In a related development, the Nigerian Bureau of Statis-
tics published data on active voice subscriptions within the country for fourth quarter (Q4) 2019 which showed a sturdy 6.9 percent (y/y) increase to 184.7 million subscriptions from 172.8 million subscriptions in Q4 2018. MTN Nigeria share price closed at N90 as of 2:00pm in Lagos, its prelisting price, from an all-time high of N141 on August 30 2019. It listed on the Nigerian Stock Exchange last year to become the second largest company by market cap. Airtel Africa closed at N298, which compares with an all-time high of N350 on September 20 2019; it trades at 4.03 times earnings. These companies have the ammunition to overcome the headwinds as evidenced in a robust cash flow position. The combined free cash flow of MTN Nigeria and Airtel Nigeria hit N518.76 billion in 2019, a 32.26 percent increase from the N390.26 billion figure for 2018. Investors pay attention to the free cash-flow because it shows them the extent to which a firm has the financial impetus to settle outstanding debt, fund future expansion plans and pay future dividend. These firms are generating enough extra to cash to continue achieving growth as average combined free cashflow to sales ratio increased to 28.56 percent in December 2019 from 23.60 percent in December 2018.
Dated Brent falls to $17 as physical, futures markets diverge DIPO OLADEHINDE
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rent and West Texas Intermediate futures are holding above $20 a barrel, while prices of actual barrels are in freefall. The difference between paper market trades and the real barrels has widened to multi-decade highs in some cases, suggesting financial flows are supporting the futures market, according to analysts. With demand weakening and Saudi Arabia and Russia continuing their price war, Dated Brent, the benchmark for about two-thirds of the world’s physical oil, was assessed at $17.79 a barrel on Monday, the lowest since 2002. In North America, WTI in Midland, the capital of the Permian region, traded at just over $12 a barrel, while some lesser known grades have posted negative prices. Refineries in South Africa and Canada have shut down while others in major consuming countries, such as India, are cutting back. Saudi @Businessdayng
Arabia is unleashing a flood of oil to Europe and traders expect Aramco to slash prices for Asia further. To make matters worse, space to store the huge oversupply is quickly running out. “Global storage capacity will be exhausted” by the end of the second quarter, Morgan Stanley analysts including Martijn Rats said. “At that point, Brent would need to fall to $15-$20 to balance the market.” Brent futures are signalling a historic glut is emerging. The May contract is trading at a discount of about $14 a barrel to November, a more bearish super-contango than the market saw even in the depths of the 2008-09 global financial crisis. “The Kingdom intends to increase its crude oil exports, starting from May, by about 600 thousand barrels per day, bringing the total of Saudi petroleum exports to 10.6 million barrels per day,” an official at the Saudi Arabian Energy Ministry said on Monday, as carried by the official Saudi Press Agency.
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Epidemic of fear: Addressing misinformation and panic in infectious disease outbreaks Adaeze Oreh
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few weeks ago, Masaka, the last patient receiving treatment for Ebola, the deadly viral haemorrhagic disease was discharged in the Democratic Republic of Congo (DRC) with a clean bill of health. For the country with the world’s second largest outbreak of Ebola on record, it was a good reason to celebrate. With no new cases for over two weeks, if the country can go without any new cases for 42 days, it will be the first time since August 2018 that the DRC will be considered free of a virus that has claimed the lives of over 2,200 Congolese. A huge breakthrough for sure, but the world hardly noticed. Why? COVID-19. As the world comes to grips with addressing the massive and swift-moving pandemic, we must remember to learn from past outbreaks. As a Senior Health Policy Adviser with Nigeria’s Federal Ministry of Health, I was part of the effort to combat Ebola in West Africa between 2013 and 2016. One of the lessons we learnt then was that messages on infection prevention and control delivered by trusted community leaders, were critical to ending the three-year crisis. In many communities across Liberia, Guinea and Sierra Leone, there was widespread disbelief in the existence of Ebola. People believed that the outbreak had been fabricated for financial gain and was a ploy of the government,
police and military to strong-arm people to attend treatment centres in the company of health workers in strange looking “space suits.” This disbelief heightened tensions and hostility between locals and response teams. The dynamic only changed when response teams began to involve respected community chiefs and, religious and youth leaders who used local languages and storytelling to explain to their people what the virus was, how it spread and the urgent need for changes in community practices. As a result, the infection rate finally began to decrease. Unfortunately, the same spread of misinformation is hindering the prevention and treatment of the novel corona virus. From India to France to Nigeria, misinformation and harmful advice such as drinking hot water, spurious chemicals and sun exposure have spread like wild-fire to hundreds of millions at the other end of smartphone screens. In fact, the French government had to issue a statement telling citizens that cocaine is not protective against COVID-19. The impact of this spread of misinformation can be seen in the global panic, plunging economic markets and nose-diving oil prices that have been described as an “epidemic of fear”. This fear and panic have led to the stealing of N95 masks from local hospitals and emergencies, leaving health workers without the necessary protective gear to carry out their jobs. The wide-ranging effects of the virus on the global economy are evident in tumbling financial markets, closure of companies, schools and places of worship; travel restrictions and entire country lockdowns across Europe and now increasingly observed across several countries in Africa including
Nigeria. As the Ebola outbreak started to wind down, the World Health Organization (WHO) rightly advocated investing in primary health care to prevent outbreaks. Clearly, however, resources are needed not only for strong emergency responses in disease outbreaks and for building primary healthcare structures that will outlast emergencies, but also for efforts to effectively inform the public during epidemics and pandemics. In China, France, Italy, United Kingdom, United States and Nigeria, governments have had to reactively respond to the many “rumours” and “untruths” circulating in societies about the corona virus due to gaps in communication between government and the people that have allowed falsehoods to circulate in the public. What this has done has made the people distrustful of official statements, leading them to continually seek “reliable” information from often “unreliable” sources on the internet. In the DRC, people were very mistrustful of health workers – both local and international – leading to numerous attacks on health workers and clinics during the outbreak. Similar to the West African outbreak, misinformation was spread that Ebola did not exist, and that the outbreak was financially motivated. This is not dissimilar to the many conspiracy theories circulating around COVID-19. There is a huge inequality and neglect of access to healthcare in Africa, which has been acknowledged to drive grievance and mistrust. However, we have seen that even in higher-resource settings when systems are stretched and overwhelmed, ultimately, human survival instincts kick in. Distrust of authority is evidently not the exclusive
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The impact of this spread of misinformation can be seen in the global panic, plunging economic markets and nose-diving oil prices that have been described as an “epidemic of fear”. This fear and panic have led to the stealing of N95 masks from local hospitals and emergencies, leaving health workers without the necessary protective gear to carry out their jobs
Covid-19, human rights and civic space in Nigeria
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ockdown, social distancing, contacttracing, self-isolation, quarantine, testing, face-masks, and sanitizers: these are the buzzwords of the moment, triggered by the massive spread of Corona virus, popularly known as the COVID-19 pandemic. With the virus spreading rapidly and ravaging the world, causing thousands of deaths and incalculable social and economic losses, countries of the world are rolling out measures each passing day to both control the spread of the virus and mitigate the impact on affected populations. Nigeria’s considerably low-infection rates witnessed in the early days of the pandemic dramatically turned around with over 80 confirmed cases and one fatality across 10 states recorded as of March 29, 2020. Not only that, 4,370 people of interest suspected of COVID-19 infection are being traced. The sharp rise in the disease toll saw the Nigerian government imposing restrictions and mitigating measures to contain disease spread, with implications on the fundamental human rights of citizens and the civic space in general. The emergency doctrine in Section 45 of Nigerian 1999 Constitution has often been cited to justify the plethora of restrictive measures rolled out to combat the pandemic. At SPACES FOR CHANGE | S4C, a policy research and advocacy non-profit organization, we have been tracking and documenting a host of COVID-19 disease control measures at the federal and state levels that have enormous potential for abuse, and shrink the civic space. Having extensively analyzed the Nigerian government’s COVID-19 containment measures within the context of the country’s human rights obligations, the following observations need to be emphasized: Nothing demonstrates the tensions between rights and containment measures during health emergencies more than the blanket recommendation for the public to avoid mass gatherings and
close contacts with people. Any State invoking Section 45 of Nigerian Constitution to justify derogation from constitutionally-protected guarantees must comply with rigorous due process provisions relating to proportionality, notification of derogation measures, exclusion of the non-derogable provisions, non-discrimination, and temporariness of exceptional measures and consistency of those measures with the state’s existing obligations under international human rights law. Certainly, the COVID-19 pandemic fits within the definition of “a public emergency which threatens the life of the nation” entitling the Nigerian State to invoke derogation measures. The federal government has yet to declare a state of emergency, but have gone ahead to implement measures that curtail rights and freedoms, putting a big question mark on the legality of governmental actions. Declaring a state of emergency connotes that the rights-derogating measures are temporary and limited to the extent strictly required by the exigencies of the situation. As of March 26, 2020, Nigeria has reportedly conducted a total of 178 COVID-19 tests compared to South Africa’s 15,500 tests over the same period. Low testing figures, compounded by the lack of adequate databases for contact details, and has forced the government to trace suspected patients primarily through public appeals. Low response to public appeals is probably prompting the proposal to use the police and the military to enhance contact-tracing. The use of coercive action should be discouraged because of the potential to instill fear and anxiety, including social stigma. While global borders remain shut, high-profile infected persons cannot travel abroad as they used to, and have to fall back on the health facilities abandoned for decades to rot and under-perform. While massive healthcare reforms are anticipated in the long term, the risk of preferential treatment
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for high-profile infects looms large. Substantiated media reports reveal cases of alleged preferential treatment for foreign nationals and high-profile patients. These treatment patterns fuel fears that COVID-19 response measures may perpetuate inequalities in access to health care in critical times like this. Urgent steps must be taken to restore public confidence in the health systems by ensuring all persons—irrespective of their social and economic background, identity, sex, religion, ethnic group, sexual identity—have equal access to healthcare. The disease-containment approaches adopted across the country especially by state governors, reinforces fears of deliberate governmental clampdowns on civic freedoms using COVID-19 as an excuse. Closure of state waterways, air and land borders, fall within the realm of federal question jurisdiction. As the above make clear, various state governors are invoking the doctrine of necessity, exercising powers ungranted by the constitution in the name of containing the spread of corona virus. The right to move about freely throughout Nigeria and to reside in any part of Nigeria is a constitutionally protected right. (Section 41). Interstate state border closures not only breach the right to free movement, but could also hamper the rapid response initiatives to contain virus spread, including the delivery of essential food supplies, medical, humanitarian and surveillance services. Train services stopped, flights suspended and land borders shut will hinder medical personnel from reaching hard-to-reach localities in great need. There is ample evidence that the pandemic may trigger states to enact a wave of restrictive legislations that shrink the civic space. The Lagos State Emergency Coronavirus Pandemic Bill 2020, sponsored by Speaker Mudashiru Obasa, scaled the first, second and third readings and eventual passage at lightning speed. There was little or no
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preserve of Africans. We have seen it in China, in the US and Italy in response to the fear and uncertainty of the corona virus. National, state and local governments now need to make it a point to address health communications as a vital part of any outbreak response. This should not be left to the disease control bodies alone but should be in collaboration with them to disseminate information to the populace using mass public enlightenment strategies. Such communication must be multi-sector driven – involving health, information and communication ministries, accredited organisations such as WHO, telecommunications, information technology and social media corporations – utilising trained volunteers where manpower is constrained, to deliver clear and coherent messages to the public. This would avoid contradictions and dispel confusion and the spiralling panic that would otherwise ensue. People are far less likely to distrust a system that clearly and consistently communicates updates and prevention strategies regarding the lives and wellbeing of their families and communities. When citizens trust the information released by their governments on infection control measures, panicdriven stigmatisation, stock-piling and thefts of commodities and supplies will cease and only then will we stand a fighting chance against the outbreaks and “infodemics” threatening the lives of millions across the world. Adaeze Oreh is a family physician, Senior Health Policy Adviser with Nigeria’s Federal Ministry of Health and Fellow of the West African College of Physicians. She was involved in emergency preparedness during the 2013 – 2016 Ebola outbreak in West Africa and is also a Senior Fellow for Global Health with the Aspen Institute.
Victoria Ibezim-Ohaeri opportunity to engage the public or the broad spectrum of stakeholders that may be affected by the proposed law. Tracing contacts or having contacts surrender themselves for isolation is meaningless where the state lacks the manpower or capacity to conduct testing on a very large scale. The plans by the Lagos State Government to set up more isolation centres across the state as well as 3 testing centres with the capacity to test 100 people per day, is forward looking. The federal government’s release of N10 billion grant to Lagos State and another N5 billion to the Nigeria Centre for Disease Control (NCDC) for tackling the raging pandemic, is also a bold step in the right direction. It is hoped that these grants, including private donations from numerous stakeholders, would be judiciously applied towards the procurement of the critical medical supplies, ventilators including the technical, human and infrastructural resources needed to conduct large-scale testing, isolation care and treatment. On 24 March, 2020, the Nigerian Presidency barred certain media houses from covering its activities. The actions were reportedly taken to contain the spread of COVID-19. The ban which will last for a yet-to-be specified period, will limit the ability of journalists to accurately cover and report presidential initiatives to defeat COVID-19. The ban represents a threat to press freedom, prompting stakeholders to warn that the pandemic should not be a ‘time for unnecessary pettiness, victimisation … (and adoption of measures) completely at variance with national interest.’ Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Victoria Ibezim-Ohaeri is the Executive Director of SPACES FOR CHANGE
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How COVID-19 will force Nigeria’s financial sector to innovate Ashley Immanuel
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n Monday morning, hundreds of employees at Nigeria’s leading banks woke up, bathed, brushed their teeth, and put on their business attire. They trimmed their beards and applied makeup. Then they sat down in front of their computers, switched on their webcams, and reported for work. Despite Lagos’ notorious traffic, banks and other financial service providers in the nation’s largest city typically require employees to come to the office daily. They are now scrambling to figure out how to cope in a world in which both employees and customers are sequestered at home. Unaccustomed to cultures of remote work, some banks want to see staff suited and booted and reporting on camera by 8am. However, responding to the COVID-19 pandemic will require the Nigerian financial sector to work differently, both during the immediate crisis and in the longer term. In the immediate term, innovation will need to focus on survival. Nigerians will need more credit when their income is interrupted, yet they may also struggle to repay those loans until regular economic activity resumes. Some financial institutions, such as Microfinance banks, may be put at risk if customers are unable to repay loans for a period. Some measures, such as the Central Bank of Nigeria’s N50 billion Targeted
Credit Facility, are being introduced to help bridge the gap. Some financial service providers have responded by reducing fees and finding other ways to support customers. EFInA had provided grant funding to a FinTech called Riby to expand access to financial services via cooperatives. In the wake of COVID-19, Riby is planning to provide a one-month moratorium on loan repayments for customers, and to use its existing network of agents and customers to provide last-mile delivery of donated money and goods to households in need. The crisis may also act as a catalyst for certain digital services. Nigeria is home to several digital platforms, including e-commerce sites such as Jumia, some of which may see a boost in business as markets and restaurants close. Some governments are encouraging use of mobile money in order to reduce risk of transmitting disease through handling cash. As inter-state movement becomes restricted and bank branches close, mobile money could also become a more attractive option for sending money to family or friends. Longer-term, we run the risk of more Nigerians becoming financially excluded as a result of this crisis, at the exact moment when they as individuals and the overall economy would need their participation the most. Global evidence suggests that access to financial services can help households weather financial shocks and can contribute to economic growth. Yet the EFInA Access to Financial Services in Nigeria Surveys found that financial inclusion dipped
following the last recession. Companies that can innovate and extend low-cost, digitally enabled services to the Nigerian mass market will have an enviable customer base when the economy recovers. Building this business case will require support from regulators, including evaluating regulations on fees and pricing to help financial service providers reach low-income customers profitably. Over the past decade, Nigeria has fallen behind several other African countries in terms of financial inclusion, as mobile money has taken off in those markets but remained low in Nigeria (only 3 percent of Nigerian adults used mobile money in 2018). EFInA’s research indicates that the newly established category of Payment Service Banks has the potential to drive financial inclusion, including in underserved areas. Accelerating the deployment of Payment Service Banks may be one of the most efficient ways to expand financial access following the COVID-19 pandemic and set the “digital rails” that Nigerians can use to access other services that will improve their lives, such as pay-as-you-go solar solutions. In some ways, this pandemic can provide perspective about other crises, current and future. As of the date of writing, there have been approximately 30,000 deaths globally from COVID-19. Each year, approximately 1 million children die in Nigeria alone, mostly from preventable illnesses. COVID-19 is reminding us of what we already knew: we need to urgently invest in access to healthcare for all Nigerians.
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Longer-term, we run the risk of more Nigerians becoming financially excluded as a result of this crisis, at the exact moment when they as individuals and the overall economy would need their participation the most.
Ashley Immanuel is Head of Programmes at Enhancing Financial Innovation & Access (EFInA. She leads EFInA’s efforts to provide credible information about the Nigerian financial sector that can be used to create a more inclusive financial system.
There, but for the grace of God, go I
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o our dear Minister of Works, Chris Ngige, who once rationalised that the two out of every three doctors our nation produces, flee to other countries, not because of the poor working conditions, obsolete facilities and hugely inadequate remuneration they receive here, but because we have more than enough doctors already; I would love to have your thoughts now sir. Now that every country on earth, including ours, needs all the health workers it can get, does the “exportation” of Nigerian doctors, which he had then celebrated as a worthy “achievement” seem like such a great idea? Because of the desperate need for more hands, the UK government gave a clarion call for retired National Health Service (NHS) staff to please volunteer their services, in the interest of the nation. As robust as their health service is, bolstered by the multitude of Nigerian doctors now plying their trade in the Queen’s own country, the British government is still worried about it becoming overwhelmed. Similarly, the Trump administration which almost from the onset, gained global notoriety for its unfriendly immigration policy, is now beckoning on doctors of other nationalities to apply for working visas to the US. Like I’ve often said, both actions and inactions will always have consequences. The fact that it may not always come immediately doesn’t mean it won’t come. It always does. I believe there are at least two types of ignorant people in this world. One class is of those who simply don’t know. They just don’t possess the required knowledge. The second are those who, surprisingly, don’t lack the knowledge, but somehow lack understanding. So our leaders cannot be accused of a lack of “education” in the first instance, nonetheless, some may still be regarded as uneducated, evidenced by their often flawed reasoning. One thing I have heard time and time again during interviews of US citizens, whether they be doctors, nurses, government officials or the average Joe, since the current coronavirus pandemic began to hit the USA hard is, “this is
America”. Though the way each has said it has varied, non-have uttered it in the manner we say, “this is Nigeria”. None has offered it as an excuse for non-performance by government or anyone, for that matter. It’s in fact the direct opposite. This is an America they all believe in, and a country which they’re ever so quick to proudly remind us, is the greatest nation on earth. Although this repeated reminder hasn’t slowed down, the recent intonation betrays a sense of disappointment, rather than one of pride. To the American, “this is America” is the very reason why they don’t have any excuse for things not to work as they should. The politicians continue to utter it in an effort to reassure their people that as a nation, they are up to the task. They have many past victories to point to, which demonstrate their ability to overcome whatever comes their way. To the average American, “this is America” means there is every reason for them to have high expectations and it’s a call for their leaders to live up to it. Wouldn’t it be wonderful if, “this is Nigeria” were to mean to every Nigerian, “we expect nothing short of the best” rather than, “you should know better than to expect anything more”? Unfortunately, we find ourselves lumbered with the cross of having political leaders who to me, are like modern day Pharaohs. I’ve asked myself and those close to me if they think our leaders will have a rethink during this period of global crisis and change their ways. Fair question, don’t you think? Will facing a problem which they have no power or control over, force them to put away selfish thinking? Unlike the myriad of the nation’s problems which they have used their own hands either to create or exacerbate, while believing in the ability of their filthy war chest to always provide them with alternatives; money this time around appears to be no defence. With this dire situation staring us all in the face, it matters not your tribe, religion or social status. There remains no equivalent like installing two or three generators in your house to provide the electricity you refused to use your position to provide for the populace. Neither is there an equivalent like
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chartering an aircraft, to avoid plying pothole infested roads you refused to repair. For all intents and purposes, their ill-gotten loot has been rendered largely useless as they can’t on a whim, decide to fly themselves or their loved ones to their beloved Western safe havens, to escape the imminent coronavirus explosion in the country. Coronavirus has quickly become an uninvited leveller. But will they learn? Since the preferred nations are far more interested, at least for now, in protecting their own, than gaining from anyone’s filthy lucre, will our leaders learn? Will they finally recognise the futility in squirreling away the commonwealth and leaving the country comatose in the process? Especially as nation after nation has closed its borders to non-indigenes. Will they, as many of their oppressed compatriots have done, see it as some sort of karma catching up with the leaders? Do you think they will in any way, wisen up? To be honest, I very much doubt it. Much like the Biblical Pharaoh whose heart was so calcified, and only thawed briefly when calamity came crawling to his doorstep as a result of his refusal to change his ways, I don’t see our leaders changing unless they feel the full force of their actions directly. As long as it remains remote, they will learn nothing. Human beings are fundamentally creatures of routine who so often revert to their old modes of behaviour once the moment of crisis passes; particularly when they’re lucky enough to narrowly escape any damaging consequences. It’s only when they find themselves victims of their own callous actions that it may dawn on them that no amount of money can make any man invincible. The surest protection against calamity is to obey God and to do right by all. Does this crisis which quite clearly exposes our precarious nature as human beings, present us with a possible watershed moment in our socio-political history? It certainly provides us with a golden opportunity to reflect, with the hope that common sense and more rational thought, inherent in a less self-centred attitude, will be allowed to float to the fore. Will the harsh reality
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Micro insurance is one way to expand access to healthcare. The EFInA Access to Financial Services in Nigeria 2018 Survey found that less than 2 percent of Nigerian adults have insurance. However, 31 million Nigerian adults said that they would be interested in micro insurance, 20 million of whom own mobile phones. Last, COVID-19 can force us to face future crises. For years, we heard warnings that we would be unprepared for the next global pandemic; now it is upon us, and we are unprepared. Perhaps this will be a wake-up call to take other global threats seriously, particularly given that some climate experts expect Lagos to be under water by the end of this century if we do not act quickly. The financial sector can innovate to support more climate-friendly initiatives; one example is the recent issuance of green bonds in Nigeria, which provide an opportunity to attract foreign and domestic investment for environmentally friendly projects. In Nigeria, we have 200 million people. We have rural areas and large cities, teeming with people and entrepreneurs. We now have COVID-19. We have uncertainty. We have opportunity. With restrictions on movement, we have time to sit quietly, to reflect, and to think. We need ideas.
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Character Matters with Daps
Dapo Akande of closed national borders impel or even compel our leaders and regular folks alike, to conduct themselves differently? Will it conduce positive social behaviour? Will it expose the foolishness in relying on the material defences we put so much trust in? A battalion of policemen as security provides no immunity when a viral disease comes lurking. If anything, it only increases one’s chances of contracting it. A functioning and robust health system, on the other hand, just may. Are we going to be smart enough to recognise this moment of remarkable global uncertainty for what it is? An opportunity, even if of sheer providence, to set ourselves on a completely different trajectory that will ultimately lead to good and conscientious governance? Time, as always, is sure to tell. As for me, I won’t take the risk of holding my breath. One thing I do know though is that things could turn the corner for the better, post these terrifying times that men are literally dropping like flies, if only we etch these simple but heavily pregnant words on our hearts, from this time forward. These words could serve to counter any temptation which may come our way to hoard for ourselves that which is meant for all, in a vain attempt to live forever, at the expense of others: “There, but for the grace of God, go I”. Changing the nation...one mind at a time. Akande is a Surrey University graduate with a Masters in Professional Ethics. An alumnus of the institute for National Transformation and author of two books; The Last Flight and Shifting Anchors. Contact: dapsakande25@ gmail.com
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Wednesday 01 April 2020
BUSINESS DAY
Editorial Publisher/Editor-in-chief
Frank Aigbogun
The arrogance and impunity of Nigerian political elite Obeying self-isolation guidelines would have limited exposure
editor Patrick Atuanya DEPUTY EDITOR John Osadolor, Abuja NEWS EDITOR Chuks Oluigbo MANAGING DIRECTOR Dr. Ogho Okiti EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, STRATEGY, INNOVATION & PARTNERSHIPS Oghenevwoke Ighure ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai COPY SALES MANAGER Florence Kadiri DIGITAL SALES MANAGER Linda Ochugbua GM, BUSINESS DEVELOPMENT (North)
Bashir Ibrahim Hassan
GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu
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hen in 1998 Olusegun Obasanjo was asked why he was seeking political office as president after leaving office 20 years earlier as military head of state, Obasanjo did not mince words, saying that he was coming to stop executive arrogance and also to arrest recklessness in governance. Obasanjo recalled, among other things, that when he was leaving office in 1978, the Nigerian National Shipping Line (NNLS) had about 20 ships in its fleet. 20 years after, instead of increasing the number, the fleet was depleted to just one ship. That, for him, was part of recklessness in governance. The former president left office 13 years ago, and what are clearly arrogance, impunity and recklessness are on generous display among the political class. They move about with ego and behave as though they are demi-gods. Though these traits were also noticeable during the military era in government, they are quite manifest among otherwise democrats in governance. It seems to us that arrogance and impunity run through the veins of the country’s political elite. At no other time in the life and
democratic development of this country had the political elite demonstrated so much impunity in governance than the last two general elections in the country conducted in 2015 and 2019. Elections were so manipulated without recourse to the electoral laws that the results cannot pass any integrity test anywhere in the world. Today, the entire world is in crisis because of the coronavirus pandemic. The way and manner the disease entered and now spreading all over the country is simply horrific and that is a function of the recklessness and arrogance of the country’s political elite. By the last count, Nigeria has recorded 111 cases of COVID-19 infections and apart from a case of community transmission, all others have come from persons who returned from high-risk countries and instead of self-isolating, they went about meeting people and transmitting the virus to them. It is painful to note that most of the people who are guilty of this misdemeanour are top people in government. A major protagonist in this drama of pain is President Muhammadu Buhari’s Chief of Staff, Abba Kyari. Kyari recently visited three countries that are currently dealing with a significant COVID-19 emergency. He went to Germany in the company of
Saleh Mamman, minister of power, and James Momoh, executive chairman, Nigerian Electricity Regulatory Commission, for discussions with Siemens on improving the country’s power supply. They returned to Nigeria passing through the United Kingdom and Egypt. Upon his return, Kyari ignored guidelines by the Nigerian Centre for Diseases Control (NCDC) to self-isolate for 14 days. The NCDC guidelines require all returning travellers to Nigeria and anyone who has been in close contact with a confirmed case of COVID-19 to self-isolate. The guidelines stipulate how returnees are required to move from arrival point in Nigeria to place of self-isolation where they would be monitored during the 14-day period. The chief of staff did not do any of these guidelines, thus endangering everyone that came in contact with him, including the president. Like most Nigerians, we are deeply angry at this sort of impunity and recklessness. We are all the more saddened that the political class is leading an act of gross irresponsibility such as this at a time when the whole world is struggling with the safety of their citizens. We believe that leaders whether political, social or religious should lead by example. The younger generation of
Nigerians are not happy that those they should emulating are the ones showing bad examples and, by so doing, retarding the growth of the country. It is regrettable that the Nigerian political elite are the ones that flout court orders, resist court summons, embezzle public money and use same to force themselves back to power and influence. Apparently, it seems that these leaders don’t ever stop to think through their actions and the danger they are posing for both the present and the future of the country. In the case of those infected with the deadly virus and ignored the NDDC guidelines, it is lamentable that they seem not to know that they are setting precedents. We are of the view that in the absence of official sanctions for violating the guideline on self-isolation, as those who should pass and enforce the law are themselves reckless, some Nigerians may be taking a cue from their leaders. In the present circumstance, we foresee danger if Nigerians take a cue from their leadership on compliance with health and safety measures, because such action is fatal. If that happens, it would take less than a week for Nigeria to be in a similar situation as Italy given the weak health infrastructure in the country.
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EDITORIAL ADVISORY BOARD Imo Itsueli Mohammed Hayatudeen Afolabi Oladele Vincent Maduka Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Mezuo Nwuneli Charles Anudu Tunji Adegbesan Eyo Ekpo Wiebe Boer Paul Arinze Boye Olusanya Ayo Gbeleyi Haruna Jalo-Waziri Clement Isong
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COVID 19 & our governors: Unprepared & unserious! Franklin Ngwu
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n an interview with African Independent Television (AIT) about two weeks ago on the ‘Implications of the Coronavirus (COVID 19) on our States’, I pointed out that Nigerians are yet to see a proactive approach from any of our governors even though the commendable efforts of Babajide Sanwo-Olu are noted. With the increasing spread of the virus to other parts of Nigeria and the reactive postures from our states, the unpreparedness of our Governors becomes more apparent. Recalling that the COVID 19 that started in China in January 2020 and entered Nigeria on 27th February, has killed over 34, 000 people with over 722, 000 confirmed cases in about 199 countries and territories around the world, the unserious disposition of most of our governors is discouraging. Even with the infection of two governors, other governors are still behaving as if the COVID 19 is a Federal Government problem with no properly equipped isolation centers in most states and ad-hoc committees just being created. As if they are oblivious of what to do, all the actions so far have been very reactive with no detailed examination of
the health and socio-economic implications to their states. On health aspect, it is just copy and paste- quickly create an isolation center, restrict movements and possibly close borders. Just as they do in Lagos for instance, so we will do in our state with limited or no consideration of the peculiarities of their respective states. Moreover, while the COVID 19 is primarily a health challenge, it is important that we appreciate that the socioeconomic impacts of the virus might be higher than the health consequences. This is an aspect that our governors seem not to properly appreciate or prefer to ignore with the possible belief that it will be perceived as the responsibility of the Federal Government. With Nigeria ranked as the poverty capital of the world with over 100million Nigerians described as extremely poor, the socio-economic impacts of the COVID 19 on Nigeria and particularly the poor can only be imagined. As majority of them (poor Nigerians) only able to feed themselves and their families based on their daily toils, the question that should concern every governor is how these Nigerians in their respective states will survive during this COVID 19 crisis and lock-down. In a well governed environment, an informed and skilled team of experts should have been set up by each state governor since January 2020 to strategize and plan on how to effectively manage the COVID 19 crisis. We should have seen and read properly thought and detailed COVID 19 policy paper of every state in Nigeria. Expectedly, the policy paper should contain good understanding of COVID 19 and robust examinations of the
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As the pandemic will have significant negative consequences on the livelihood of majority of Nigerians, it is expected that every state governor should provide meaningful support in both financial and non-financial ways especially to the poor and vulnerable of every state
health and socio-economic impacts on our respective states based on identified scenarios. And then the strategic plans of the states on the effective ways to mitigate and manage the crisis. Two key scenarios that can be used include, first- the spread and duration of the virus are limited and short, and second, the spread and duration of the virus are wide and prolonged. With these two scenarios that imply different impacts on the states in terms of health challenges, revenue, unemployment, poverty, insecurity, business environment and other governance factors, our states will be in a better position to plan strategic responses particularly as it affects groups like the civil servants, businesses, students, the poor and other vulnerable groups. As the pandemic will have significant negative consequences on the livelihood of majority of Nigerians, it is expected that every state governor should provide meaningful support in both financial and non-financial ways especially to the poor and vulnerable of every state. The above is how to respond to crisis such as COVID19 and not the unplanned and unprepared ways we are seeing from our governors. Moreover, the COVID 19 pandemic has clearly further exposed the poor state of our health sector. Of the 36 states and FCT, it seems that it is only Lagos and possibly two other states that can be said to have a reasonable public health sector. The remaining states can only be described as below standards and unserious. This is the reason why the governments of most developed countries are evacuating their citizens from Nigeria even when their countries
are experiencing worse COVID 19 challenges than Nigeria. With the global exposure of pandemics such as COVID 19, it should be clear to our leaders that the sustainable solution to our health challenges is in proper development of our health sector as the alternative of travelling abroad might not be feasible in certain situations such as this. If it was possible, most politicians and rich men would have travelled abroad for better medical treatment. Interestingly with COVID 19, we will all survive or die here! Given our unpreparedness for this pandemic, it seems that we did not really learn much from our recent experience with Ebola. If we did, our approach to this crisis would have been different. With the hope that we will survive COVID 19 the way we survived Ebola, it is hoped that our leaders and especially the governors will appreciate their leadership responsibility and properly develop our society especially our health sector. As a friend muted, there is a benefit to ordinary Nigerians with this COVID 19. It does not discriminate between rich and poor, Hausa, Igbo or Yoruba, Man and Woman, Muslim or Christian. All of us are equal before Corona and it is teaching us to appreciate that we are same-human beings and that what affects one affects the other. As such we should be fair and concerned for the wellbeing of all and sundry. Dr. Ngwu is a Senior Lecturer in Strategy, Finance and Risk Management, Lagos Business School and a Member, Expert Network, World Economic Forum. E-mail- fngwu@lbs.edu.ng
A look at aviation regulations from a health perspective
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n recent times, the world has been faced with a major health challenge ; the COVID -19 pandemic. A number of countries have placed partial or total travel bans on ships or aircrafts from certain parts of the world where the COVID- 19 is on rampage. The major reason for the said bans is to curb the spread of the COVID -19 virus and to safeguard the health of citizens of such countries. There were also calls from various quarters urging the Nigerian government to place travel bans accordingly in order to reduce the chances of anyone with the virus coming into the country. The Nigerian government eventually heeded these calls and placed travel bans accordingly to safeguard the health of its citizens. A lot of questions might be going through the minds of many at a time like this on whether aviation regulations to safeguard the health of citizens in Nigeria are in existence or not. This article will attempt to highlight existing health related provisions of aviation regulations in Nigeria. Nigerian Civil Aviation Authority(NCAA) is the regulatory body for aviation in Nigeria. It became autonomous with the passing into law of the Civil Aviation Act 2006. The Act not only empowers the Authority to regulate Aviation Safety without political interference but to also carry out oversight functions of Airports, Airspace, Meteorological Services, etc as well as economic regulations of the industry. The NCAA also has a number of regulations which deal with various aspects of aviation. Part 18 of the NCAA regulations has a number of provisions that deal specifically with health related issues. Some of these health related provisions are as follows; Preventing the entry of an aircraft Section 18.8.9.3 provides that no airport operator shall prevent any aircraft from landing at any international airport for public health reason(s) unless such action is taken in accordance with the International Health Regulations (IHR) 2005 of World Health Organization (WHO).
This indicates that an Aircraft can be stopped from entering into Nigeria as a result of public health reasons. However, this can only be done in accordance with the IHR of WHO. Article 28 of IHR, 2005 states that subject to Article 43 or as provided in applicable international agreements, a ship or an aircraft shall not be prevented for public health reasons from calling at any point of entry. However, if the point of entry is not equipped for applying health measures under these Regulations, the ship or aircraft may be ordered to proceed at its own risk to the nearest suitable point of entry available to it, unless the ship or aircraft has an operational problem which would make this diversion unsafe. Article 43 of IHR, 2005 provides that a country shall base their refusal to allow an aircraft to enter upon: (a) scientific principles; (b) available scientific evidence of a risk to human health, or where such evidence is insufficient, the available information including from WHO and other relevant intergovernmental organisations and international bodies; and (c) any available specific guidance or advice from WHO. Furthermore, a country wishing to prevent the entry of an aircraft into its territory shall provide to WHO the public health rationale and relevant scientific information for it. WHO shall share this information with other countries. After assessing information provided and other relevant information, WHO may request that the country concerned to reconsider the prevention of entry of an Aircraft. A country that intends to implement travel bans/ restriction measures has an obligation to inform WHO, within 48 hours of implementation, of such measures and their health rationale unless these are covered by a temporary or standing recommendation by WHO. A country implementing a travel ban or restriction, shall within three months review such a measure taking into account the advice of WHO. Proof of vaccination There are instances where an individual is required to have been vaccinated against certain diseases and also show proof of such vaccina-
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tion before he or she can be allowed to enter into a country. Section18.8.20.1. of the NCAA Regulations provides that in such cases where proof of vaccination or prophylaxis is required by national authorities under the IHR (2005) e.g. yellow fever, the Authority shall accept the International Certificate of Vaccination or Prophylaxis prescribed by the WHO in the IHR (2005). Disinsection and disinfection of aircraft. The NCAA regulates both disinsection and disinfection of Aircrafts. Disinsection refers to the process of getting rid of disease causing insects while disinfection refers to the process of getting rid of disease causing microbes. NCAA has a duty to limit any routine requirement for the disinsection of aircraft cabins and flight decks with an aerosol while passengers and crews are on board, to same-aircraft operations originating in, or operating via, territories that they consider to pose a threat to their public health, agriculture or environment.- 18.8.18.1. The NCAA is also required to periodically review the requirements for the disinsection of aircraft and shall modify them, as appropriate, in the light of all available evidence relating to the transmission of insects to Nigeria via an aircraft. The NCAA is also to ensure that any insecticide or any other substance used for disinsection does not have a eleterious effect on the structure of the aircraft or its operating equipment. Flammable chemical compounds or solutions likely to damage aircraft structure, such as by corrosion, shall not be employed. Section 18.8.19 provides that NCAA is to ensure that disinfection of aircrafts is carried out as follows; (a) the application shall be limited solely to the container or to the compartment of the aircraft in which the traffic was carried ;(b) the disinfection shall be undertaken by procedures that are in accordance with the aircraft manufacturer and any advice from WHO ;(c) the contaminated areas shall be disinfected with compounds possessing suitable germicidal properties appropriate to the suspected infectious agent ; (d) the
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ULOAKU EKWEGH disinfection shall be carried out expeditiously by cleaners wearing suitable personal protective equipment. Public health, emergency medical relief, and animal and plant quarantine facilities Section 18.8.21.1. of the regulations provides that the NCAA, in cooperation with airport operators, has a duty to ensure the maintenance of public health, including human, animal and plant quarantine facilities at international airports. Section 18.8.21.2 went further to provide that the NCAA shall ensure that there are, at or near all their major international airports, facilities and services for vaccination or revaccination, and for the delivery of the corresponding certificates. The NCAA is also ensure that handling and distribution procedures for consumable products (i.e. food, drink and water supplies) on board aircraft or in the airport are in compliance with the IHR (2005) and relevant guidelines of the World Health Organization, the Food and Agriculture Organisation and national airport regulations.- 18.8.21.5. Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Ekwegh is a private legal practitioner with over 15 years legal experience in law firms and as in-house counsel. She is also a fellow of the Institute of Management Consultants. Email: uloekwegh@yahoo.com
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Wednesday 01 April 2020
BUSINESS DAY
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How crowd-farming platforms link smallholder farmers to finance Josephine Okojie
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o h n c h u kw u i s a 39years old engineer who lives and work in Lagos- Nigeria’s commercial ner ve center, has a 20 hectares farmland of maize, rice and soybeans in Jigawa and yet he has never been to a farm. Despite lacking the practical knowledge of farming, Chukwu harvest tons of crops yearly and makes over N500, 000 from farming each year. “I have no practical knowledge of farming and I have never been to a farm but I have two farms in Jigawa State,” he said. Not only is the business very profitable but also helping Nigeria meets its funding needs to boost food production and ensure food security. Vivian Adegoroye, a banker with a top money deposite bank in the country is also a farmer by proxy. “I have been into farming since 2018 and the journey has be en exciting and rewarding. I have a 10 tons rice farm in Kebbi and I have never been to kebbi state before,” Adegoroye told BusinessDay. “I could have these farms
through my investments in Thrive Agric- a company that connects sponsors to farmers and the returns on my investment has been excellent,” he added. C h u kw u a n d V i v i a n are some of the investors leveraging on crowdfarming platforms such as Farmcrowdy, Thrive Agric a n d A g royi e l d s a mo ng others to make investments on smallholder farmers to expand their production, thereby, creating wealth for
Ogun facilitates N505m credit for cassava farmers under ABP Josephine Okojie
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he Ogun state government has facilitated about N505 million credits for about 2,403 cassava farmers registered under the Central Bank’s Anchor Borrowers Programme (ABP) initiative. Each of the farmers will be credited with N210, 273 across the 20 Local Government Area of the state. “This giant stride is part of Ogun State Anchor Borrowers Programme’s resolve to link registered farmers to credit, land, inputs, technology and assured markets; which are all part of Ogun agric v i s i o n o f a g r i c u l t u ra l industrialization, food security and job creation,” s a i d Ad e o l a O d e d i na, Commissioner for Agriculture in Ogun State. “ This is the first in a lineup of activities
that would also have the farmers linked to inputs -herbicides, agrochemicals, and improved planting materials,” Odedina said. He noted that a minimum of 2,403 jobs (direct and indirect) have been created by the initiative in the state. The commissioner advised other registered farmers who are yet to benefit from the ABP credit scheme should follow updates from the Ogun State Ministry of Agriculture or send SMS only for enquiries to 0703 552 4929 or 0903 790 9008. “Work is in progress for applicants who claimed to have their own lands and these have been verified by Central Bank of Nigeria (CBN) with physical and digital geo-tagging,” he said. He added that land clearing and preparation, ver ifications and geotagging by the Ogun State Ministry of Agriculture, CBN and other stakeholders, are currently ongoing. www.businessday.ng
themselves. Th e l i ke s o f f i nt e c h organisations such as Fa r m c ro w d y , T h r i v e Agric, Agroyields Nigeria, Agrecourse and Growsel are firms behind the initiative which is reshaping the way people participate in farming and food production using their online platform to invest. The organisations function through their various platforms and train farmers in smart farming
techniques as well as supplying them with inputs and technical support to boost their output. The opportunity has allowed many Nigerians who do not want to be involved in the farming own a farm and venture into agribusiness. The country currently has a total of 31 crowd-funding platforms for investors to invest in any farms of their choice. “ Fa r m c row d y ha s recorded close to 1,000
unique far m sponsors, aggregated a combined 4,000 acres of farmland i n Nig e r ia f o r f a r m i ng purpose and grown over 150,000 organic chickens to date,” Onyeka Akumah, co-founder and CEO, Farmcrowdy said recently d u r i n g t h e f i r m’s f i r s t anniversary in Lagos. Supporting smallholder farmers with finance Over the years, lack of finance has remained one of the major factors bedeviling the country’s agricultural sector and this impediment has continued to prevent farmers from investing in basic inputs, such as quality seeds, fertilizers, and small-scale irrigation facilities among others needed to raise productivity and generate sustainable income. But all that is fast changing owing to the new league of proxy farmers in the country. “Despite contributing about 30percent to Nigeria’s GDP and 70percent to the country’s labour force, most farmers in Nigeria are still entangled in poverty, a problem that stems from a lack of funds to access modern farm inputs, which in turn drastically reduces
their output,” Jerry Oche, CEO, Growsel said in a statement. “ To c ha n g e t h i s f o r farmers and ensure they have the required finance to expand their production areas and boost productivity, we create a meeting point for farmers and farm sponsors who are willing to invest,” Oche said. According to experts, such financing models to farmers will increase private capital investment in the country’s primary agriculture and integrate po orer s e ctions of the population into a sustainable process of economic growth and development. In turn, this will reduce poverty by providing jobs, directly and indirectly, that will serve as a stimulus to the Nigerian economy and agricultural sector. “We believe an innovative national agriculture system, that supports smallholder farmers, would grow the economy and eradicate hunger. That is why we are committed to providing support for smallholder farmers in Nigeria” said Deborah Adesuwa Ameli, chief operating officer, Agroyields in an interview with BusinessDay.
How to invest in moringa tea bag processing factory Olumakinde Oni
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oringa is a food, medicine, and forage crop. Moringa c u l t i vat i o n i s ga i n i n g popularity in Nigeria in recent times. Many Nigerians are now establishing Moringa plantations and consuming a lot of the products. The health benefits of moringa are limitless. Mo r i nga ha s a st ro ng antioxidant effective against prostate and skin cancers. It is an anti-tumor and an anti-aging substance. It modulates anaemia, high blood pressure, diabetes, high serum or blood cholesterol, thyroid, liver and kidney problems. It also has strong antiinflammatory properties ameliorating rheumatism, joint pains, arthritis, eczema, and lupus. It is effective against digestive disorders including colitis, diarrhoea, flatulence (gas, ulcer or gastritis.
It is an anti-bacterial, anti-microbial and anti-viral agent, it is effective against urinary tract infection, typhoid, Syphilis, dental carries and toothaches, fungus, thrush, common cold, Epstein-Barr virus, Herpes – simplex, HIV AIDS, war ts parasites, worms, schistosomes, and trypanosomes. It is a detoxifying agent, it is effective against snake and scorpion bites. With all the health benefits of Moringa listed above, a Moringa tea produced in Nigeria, well packaged with aggressive marketing strategies will sell like hot cake. A moringa-tea production factory is nothing but a goldmine that will turn around the fortunes of the promoters. Technical Information Moringa plantations are springing up in Nigeria and it has been well established that Nigeria has the potentials to grow millions of hectares of Moringa, hence the raw materials supply can
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never pose any problem. Not only this, the awareness of the usefulness of moringa is gaining ground every day. Mo r i n g a l e av e s a re plucked, washed, sterilized and well dried. The dried leaves are later milled into powdery form and now flavoured. T h e re a re d i f f e re n t flavours such as strawberry, vanilla, ginger, and others. The next step is to package in permeable tea bags. Tea bags are now stuffed in small packs. Attractive and good packaging is a pre-requisite to market acceptability. Seriousminded investors can be put through the technicality. Financial Implication A sum of N8.75 million will be required to set up this project. The breakdown is given below: • Pre-Investments N250, 000 • Accommodation N2, 500,000 • Plant and Machinery N3, 000,000 @Businessdayng
• Utilities - 2,000,000 • Ta k e - o f f Wo r k i n g Capital 1,000,000 Total N8, 750,000 ========== A well-packaged feasibility report/Business plan is a pre-requisite to project take-off and finance s ourcing. This can be provided for serious-minded investors. Profitability The project has the potential to generate a turnover of N300 million on annual bases with a minimum pre-tax profit of N130 million already computed. This is another income and job-generating opportunity that has far-reaching positive effects on the Nigerian Economy. Serious-minded investors can be assisted in the establishment of this project. Contact author on 08023058045 or olumakindeoni2@ yahoo.com and nucleusventuresnigltd@ yahoo.com
Wednesday 01 April 2020
BUSINESS DAY
COMPANIES & MARKETS
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Company news analysis insight
BANKING
Keystone Bank donates N1bn to increase fight against Coronavirus ENDURANCE OKAFOR
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s part of the effort to combat the deadly Coronavir us outbreak in Nigeria, the management of Keystone Bank today announce d the donation of N1 billion for the purchase of relief materials, critical care facilities and protective gear to contain the spread of the virus. The pledge was made during the Bankers’ Committee meeting held recently to support the Central Bank of Nigeria in its bid to raise funds for the fight against coronavirus pandemic through the newly-formed Nigerian Private Sector Coalition Committee against COVID-19. Olaniran Olayinka, the Acting Managing Director of the bank explained that the decision to make the pledge is part of the bank’s Corporate Social Responsibility pillar to provide an enabling environment by improving the well-being and health of the communi-
ties wherein we operate. “What w e have is a situation that calls for an inclusive support for humanity. A time that all hands must be on deck
to support the assiduous effort the government is making to manage the situation,” Olayinka said. According to him, the lender’s decision to sup-
port the government’s effort is consistent with its unshakable resolve to promote health initiatives which is a key pillar o f t h e b a n k s’s c o r p o -
L-R: Babajide Sanwo-Olu (left); Lagos State Governor, ), Segun Agbaje (second left) managing director, Guaranty Trust Bank (GTBand Commissioner for Health, Akin Abayomi (right), during the unveiling of the 110-bed Isolation Center at Mobolaji Johnoson Stadium, Onikan, Lagos Island, constructed by the Lagos State Government and GTB, in Lagos.
Lagos ranks top on Q4 ’19 voice & data subscriber ranking
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agos State has the highest number of subscribers in terms of active vo i c e p e r St at e i n Q 4 2019 with 23.55million and closely followed by Ogun and Kano States with 11.18 million and 1 0 . 9 8 m i l l i o n re s p e ctively while Yobe and Gombe States have the least number of subscribers with 2.2 million Similarly, Lagos State has the highest number of subscribers in terms o f a c t i ve i nt e r n e t p e r
United Nations Environment Finance Initiative working to achieve a sustainable future,” he said. Keystone Bank also assured that it is firmly committed to its promise of supporting Nigerians to thrive and “this means showing up when it matters most.” While acknowledging that a time like this when there is Coronavirus outbreak is one of such moments, Olayinka expressed optimism that the cur rent pandemic will soon be a thing of the past. “I am very confident that the current prevailing health challenge will soon be an episode in the footnote of our history; We have the capable human resources, the will of the part of the government and the support of every Nigerian to end the pandemic at the earliest possible time,” Olayinka said adding that the donation is one of other support initiatives put in place by the bank to support the fight against the pandemic
INDUSTRIAL
TELECOMMUNICATION
OLUFIKAYO OWOEYE
rate social responsibility plans. “It is also crucial in our role as a signatory to the principles of responsible banking by the
State in Q4 2019 w ith 16,66million closely followed by Ogun and Kano States with 7.8 million and 7.4 million respectively while Bayelsa and Ebonyi States have the least number of subscribers with 916 thousand and 1.078million respectively In a telecoms data for Q4 2019 released by the National Bureau of Statistics show that a total of 184.6 million subscribers were active on voice as against 179.2 million in Q3 2019 and 172 mill i o n i n Q 4 2 0 1 8 . Th i s
represented 3.08percent increase in voice subscr iptions Quar ter on Quarter and 6.87percent Year on Year. Similarly, a total of 126 million subscribers were active on internet as against 123 million in Q3 2019 and 112 million in Q3 2018. This represented 2.37percent growth in internet subs cr iptions Quar ter on Quarter and 12.50percent Year on Year. MTN has the highest share of voice subscription, this is closely followed by AIRTEL, GLO,
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EMTS and others respectively. Similarly, MTN has the highest share of i nt e r n e t s u b s c r i p t i o n and followed by AIRTEL, GLO, EMTS and Others Specifically, MTN has a total of 68.76million voice subscribers in Q4 as compared to 65.3million in Q3 2019, while GLO has 51.7million as compared to 49.21 million in Q3 2019; Airtel has 50,18million from 48.9million recorded in Q3 2019, and 9mobile dropped to 13.6million from 15.3 million in Q3 2019.
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Beta Glass sees Q4’19 revenue hit N29.4billion, posts N5.5bn profit OLUFIKAYO OWOEYE
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l a s s - m a k e r, Beta Glass 2019 full year revenue for the period ended 31 December stood at N29.4billion from N26.3billion in full year 2018. Cost of sales increas e d to N21.billion from N19.94billion in 2018, leaving gross profit at N7.8billion from N6.38billion in 2018. The company’s selling and distribution expenses jumped to N97.93 billion from N81.16billion in 2018, Administrative expenses declined to N1.41billion from N1.24billion in 2018. @Businessdayng
Profit Before Tax during the period stood at 8.20billion from N7.18billion while Profit after tax jumped slightly to N5.58billion from N5.05billion. Beta Glass’ $30million investment to expand its furnance capacity is expected to be completed in June this year. When it becomes operational, the facility would increase the plant’s annual capacity by 35,00tons and also pioneering the use of narrow press and blow technology in West Africa With recent growth in pet bottles, and cans, Beta Glass has in recent times faced with increased competition.
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Wednesday 01 April 2020
BUSINESS DAY
COMPANIES&MARKETS
Business Event
TECHNOLOGY
Zoom dumps snooping Facebook code from iOS app as shares surge continues OLUFIKAYO OWOEYE
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oom, a video conferencing company says it has removed the data-sharing code from the app, after series of backlash by users. Zoom in a statement said the ‘Login with Facebook’ feature was implemented “in order to provide our users with another convenient way to access our platform”. That login feature – found on several apps – is applied by using a Facebook SDK (software development kit) that connects users of the app to Facebook’s Graph API (Application Programming Interface) when the app is launched. The SDK can then share information with third parties, even if a user doesn’t have a social media account with Facebook. Facebook requires app makers to share this information with users in privacy policies, however Zoom’s made no explicit
mention that the social me dia company w ould have access to user data if there was no linked account. Zoom says it was “recently made aware that the Facebook SDK was collecting unnecessar y device data” and has since removed the code and an updated version of the iOS app is now available on the App Store. According to Zoom’s statement the app did not share any sensitive information, like user names, emails and phone numbers, but “included data about users’ devices such as the mobile OS type and version, the device time zone, device OS, device model and carrier, screen size, processor cores, and disk space”. This coincides with Motherboard’s findings from last week. In the ‘What’s New’ section of the app, Zoom says that, despite the Facebook SDK being removed, users will still be able to log in with their Facebook accounts if they have one.
Users have been recommended to update the app to enable the changes. Z o om has issue d an apology for the “oversight” and the company says it “takes its users’ privacy extremely seriously As the global markets continue to grapple with the effect of deadly coronavirus, investor appetite is shifting towards stocks of companies that are perceived to benefit from the growing number of people around the world working from home and social distancing. Shares of Zoom Communications has been on the increase as investors continued to bet that the teleconferencing company would be one of the rare winners from the coronavirus pandemic. On Monday, its shares ballooned 4.15percent,the s t o c k i s u p m o re t ha n 100percent since the beginning of the year, with download more than doubled this year, and recent gains coming on signs of higher usage
OIL & GAS
Famfa Oil donates N1bn in fight against CONVID-19 OLUFIKAYO OWOEYE
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i g e r i a’s r i c h est woman, Modupe Alakija, through her Fa m f a O i l L i m i t e d ha s announced the donation of N1billion to support Nigeria’s fight against CONVID-19. The billionaire businesswoman disclosed this through her social media page this morning.
The Lagos State Government and the National Centre for Disease Control would get N250 million, African Centre of Excellence for Genomics of Infectious Disease would get N50million, N100 million would go to Medical workers on the frontline in Abuja; supply of medical e quipment to rele vant organisations worth N245million and the Dr. Ameyo Stella Adadevoh
Health Trust Fund gets N5million. “ We w i l l w o r k w i t h t h e s e o rga n i z at i o n s t o determine their specific requirements in the furtherance of our collective fight against Covid-19. We will also oversee the procurement of these products and facilities to ensure that our contribution is deployed in the most impactful,” the statement said
Parah Family Foundation postpones 3rd annual fertility conference over COVID-19 Segun Adams
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he 3rd annual Fertility conference of the Parah Family Foundation (PFF) is working with its partners and Key stakeholders to identify a future date for its 3rd annual fertility conference, after postponing the event in line with safety measures to curb the spread of CO-
VID-19, t he non-p rofit has said. The event was previously scheduled to hold on Saturday, 21st march, 2020 but had to be moved in compliance with the federal and state governm e n t ’s p r e c a u t i o n a r y regulations to prohibit gathering of persons over fifty (50) and a preventive move against Covid -19 spread which is now a global pandemic. www.businessday.ng
T h e C o n v e n e r, P F F, Dayo Odukoya, said on Friday that Parah Fami l y Fo u n d a t i o n v a l u e s the health and safety of all participants which is its highest Priority. “The foundation PFF apologizes for the Inconveniences caused all registered person she said the purchased tickets remains valid for the conference at a future date to be communicated later” said Odukoya.
L-R: Odedere Ifeoluwapo, assistant brand manager, adult premium non-alcoholic drinks, Guinness Nigeria; Auscar Ikoro, CEO Consumer Choice; Ifeoma Agu, senior brand manager, adult premium non-alcoholic drinks, Guinness Nigeria, and Cynthia Ufele, assistant brand manager, adult premium non-alcoholic drinks, during a private dinner to celebrate the brands’s winning of its Consumer Choice Award at the GRA, Ikeja, Lagos.
L-R: Funso Oni, spare parts manager, Massilia Motors; Adekunle Jaiyesimi, DMD CFAO Motors; Mike Edwards, brand ambassador, Mitsubishi Motors; Thomas Pelletier, managing director, Massilia Motors/country delegate CFAO Group in Nigeria; Funmi Abiola, head marketing and communications, Massilia Motors, and Hakeem Sanusi, marketing officer, Massilia Motors at the Role Swap Day at Mitsubishi Motors Nigeria.
L-R: Uche Mukolo , Network Director ,Women Who Code; Chinelo Madueke, Head, Innovation Lab, thehatch; Damilola Olukoju, Front end Programmer, Inlaks; Maria Simeon, Senior Software Developer, Inlaks ;Anu Onifade, Senior Software Engineer, Andela and Omolabake Lemboye - Software Engineer, Andela at the Code Jam workshop by Women Who code, hosted at thehatch Innovation Lab on Saturday in Lagos.
Temitope Jemerigbe (5th r), MD/CEO, DKK Nigeria; and Mr. Jenkins Alumona, MD/CEO, SOL Group, flanked by participants at the ongoing SOL PR Academy holding in Lagos.
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Wednesday 01 April 2020
BUSINESS DAY
17
cityfile NUPENG distributes safety gears to tanker drivers, others JOSHUA BASSEY
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igeria Union of Petroleum and Natural Gas Workers (NUPENG) has started distributing hand sanitisers and safety gears to its various operational locations, drivers stop-over spots and loading points to help members including tanker drivers fight against the Coronavirus pandemic. The hand sanitisers come in 10 litres transparent jerry cans to serve as refill for dispensers with other safety kits, such as hand gloves and mouth masks which we had already distributed across to all our zonal offices in Port Harcourt, Kaduna, Warri and of course Lagos. “As you may be aware,
we have 154 petroleum loading depots across the country, but as we are talking we have 120 of these numbers in active operation. Besides that, Petroleum Tanker Drivers (PTD) branch of NUPENG have about 300 places across the country that serve as their stop-over-point for resting and recreation, we will be distributing these items to all these places too. Conservatively, we will be sending out about a thousand of these items every week until the siege is over,” said William Akporeha and Afolabi Olawale, president and general secretary of NUPENG in a statement. The union said it would also provide further logistics and support to members as deemed necessary.
Lockdown: Police warns against disobedience in Kwara SIKIRAT SHEHU, Ilorin
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he police in Kwara State have warned the residents to strictly adhere to the directive of the government at this critical time of Coranavirus pandemic. Spokesperson of the Kwara police command, Ajayi Okasanmi, quoted Kayode Egbetokun, the Commissioner of Police (CP) in the state as saying that in spite of the efforts of the police in ensuring compliance, some commercial motorcyclists, tricyclists and commercial motorists are bent on sabotaging this great effort. He s a i d c o m m a n d would do everything within the ambit of the law to ensure that this effort of the government and that of the police to enforce compliance were not frustrated. “The command also wishes to advise peddlers of fake news to please go
on holiday at this time. Corona virus is a respecter of nobody and surely fake news or unfounded allegations against those who are fighting its scourge are not what is needed at this time to defeat the virus.” The spokesperson said that only the right pieces of information should be disseminated to the public. He said circulating falsehood or unsubstantiated allegations against the law enforcement agencies at this time would do no good to the efforts of government in this regard. The Command will appreciate good citizens with genuine reasons to complain against police’s actions to do so directly to the Commissioner of Police and not resort to the mischief of unfounded social media tantrum. The Commissioner of Police can be reached on the following phone numbers 08060072069 08125275046,” Okasanmi said. www.businessday.ng
Customers queuing at Ecobank, Ikotun, Lagos to be sanitised before going into the bank to make transaction.
Pic by Pius Okeosisi
Stimulus package targets aged, vulnerable residents- Lagos JOSHUA BASSEY
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agos State government says the stimulus package announced in the wake of the Coronavirus pandemic is targeted at the vulnerable and residents who are 60 years and above. Persons in this category have been receiving mes-
sages from the Lagos State Residents’ Registration Agency, (LASRRA) having been selected to benefit from the food package unveiled by the state government on Friday, March 27. The state commissioner for agriculture, Gbolahan Lawal, made the clarification on Monday, explaining that text messages LASRRA were sent to the
aged asking them to reply with a “YES”, “FOOD YES” or “SWITCH YES” if their registered home address with the agency remains valid. Lawal noted that the ministry of agriculture, in collaboration with LASRRA devised the initiative to ensure fairness and evenness in the distribution of the stimulus packages. He
emphasised that Lagos residents duly registered with LASRRA will access similar social benefits in the future. He, therefore, urged recipients of the SMS to respond promptly, stressing that responses would be collated and beneficiaries would receive stimulus food packages from the state government.
Covid-19: Agboyi-Ketu LCDA fumigates streets … residents say exercise shoddy DESMOND OKON
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he environmental department of Agboyi/Ketu local council development area (LCDA), Lagos has commenced the fumigation of public places and streets as part of the measures to contain the spread of the Coronavirus pandemic. The LCDA led by Dele Oshinowo is also carrying out sensitisation of the residents on how to avoid contracting the virus, also known as Covid-19. The team was seen on Monday distributing fliers to enlighten the people preventive measures. Peter Bamishaye, supervisor for the environment, Agboyi/Ketu LCDA said that the exercise was to complement the efforts of the state government in ensuring safety of the residents. “As the state is doing its own, we in the LCDA need to complement that ef-
forts; that is the reason why the Dele Oshinowo-led administration of Agboyi/ Ketu LCDA said that the environmental department should go out to fumigate and sensitise the populace,” he said. He said it was imperative for the LCDA to fumigate the communities, especially public places and health centres, so that they could be “safe for people during this time”. With Lagos as the cynosure of the virus, the state government is making effort to contain it including the passage of a bill to help the government enforce its numerous orders regarding limiting the spread, as well as disinfecting streets and major public centres. While there are also projections that the cases could rise up to 39, 000 within the metropolis, Bamishaye explained that the increase in Lagos was due to the state’s status as an economic nerve centre of the country.
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The fumigation exercise covered areas like Akinyemi, Adisa Balogun, Mascara, Ketu axis, Alapere Estate, Alapere Police Station, and other locations within the local government. The residents of the area, however, described the fumigation exercise as shoddy and doubted its efficacy in actually curbing the viral spread. “For thorough fumigation of a whole area, it should be more than 30 minutes. But they didn’t spend up to 10 minutes,” Adebusola Okiki, a fumigation worker, complained. The residents said the local government officials did not get into their compounds, but rather concentrated only on the gutters and shops. They also stated that there was no sign that the streets had been fumigated as the ground showed no wetness and people returned to their activities within minutes. “They didn’t get into people’s compounds. Fu@Businessdayng
migation is something that should be obvious. But it didn’t look as if an area was fumigated. “When you fumigate, you should still feel the impact even after 20 minutes, but as soon as they left, the whole street became active again,” another resident of Akinyemi said. According to Okiki, they did a light fumigation, so, “it’s not going to be effective.” In a phone conversation with our correspondent, Bamishaye addressed the concerns of the resident, saying the focus was on congested streets and promised to take the feedback into cognizance. “People trek from Adisa Balogun to the Health Centre. So, we’re looking at where people are passing. It’s a continuous process and we’re equally expecting comments from people and we’ll take those comments into our plan to cover more grounds,” he explained.
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Insurers adjust strategies as Coronavirus pandemic impact market operations … NAICOM offer palliatives Modestus Anaesoronye
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Sunday Thomas, acting commissioner for Insurance
The Commission also said that waivers will be granted in respect of delayed submission of renewal documents by Insurance Brokers, Loss Adjusters and Insurance Agents during the period of the COVID-19 pandemic, while all meetings earlier scheduled to hold with the Commission have been suspended till further notice. With the believe that insurance principles hinge and centers on prevention rather than control measures, NAICOM therefore urges insurance operators to comply with safety precautions issued by the National Centre for Disease Control (NCDC) and the Federal Government of Nigeria, from time to time. Coronavirus will come and go hopefully, but companies will still have to account for their activities to the shareholders during the year, in terms of volume of business and also bottom line. To brace for this, a number of insurers are devising means to not only remain in business but also continue to offer quality service and good experience to the customers. Daniel Braie, managing director/CEO, Linkage Assurance Plc said his Company has ensured that its customers are reached via internet and other mobile platforms to minimiz faceto -face or direct contacts at this time. www.businessday.ng
Daniel Braie, MD/CEO Linkage Assurance
Braie further noted that with the lockdown, “our business continuity plan will enable us to continue to work from our remote locations and still deliver the same quality of service that we have been known for, the Linkage CEO said. “with announcement by the President Mohammadu Buhari of a 14 days lockdown in Lagos, Abuja and Ogun State due to the Covid 19 outbreak, the company would like to inform its customers the initiatives to ensure operational continuity.” Braie said “We have activated our systems i.e. online platforms to enable us to continue to provide insurance services during this period with uninterrupted accesses to our offerings. “We remain accessible through our e-commerce website for self-service and assistance to Renew your policy, Purchase insurance covers and Report claims.” The Nigerian Insurers Association while encouraging members of the public to observe all precautionary measures including observing the requisite social distancing and working from home, reminded them of the need to stay safe and also stay insured all the time. Yetunde Ilori, director general of the NIA said members of the public should minimize physical visits and transact their insurance businesses in-
cluding claims processing by using the various alternative channels provided by member companies. “For purchase of third party motor Insurance, they can visit the Association’s online platform or call telephone no as it presents the unique experience of convenience of purchase from the comfort of their homes. The NIA which is the umbrella body of all Insurance and Reinsurance companies in Nigeria also said its members have activated their business conti-
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We remain accessible through our e-commerce website for self-service and assistance to Renew your policy, Purchase insurance covers and Report claims
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‘
he global pandemic, Coronavirus (COVIT-19) which origin has been traced to Wuhan in China that has caused large scale deaths and distortion in health sector across the world is taking huge toll on businesses, including the insurance sector. While physical sales through company marketers or agents and brokers have been hugely affected as result of reduction in physical contacts with customers to avoid spread of the disease, individual consumers have also slowed down patronage. They are most concerned now about meeting basic needs of survival, particularly when many countries and states are on lockdown or near lockdown as means of reducing spread of the virus. Besides that, a lot of activities and programes aimed at developing the insurance market have also been cancelled or postponed to future dates, while the National Insurance Commission NAICOM has also offered palliatives to support operation of companies. NAICOM in response to the Coronavirus pandemic ravaging the global economy including Nigeria has offered palliatives to insurance companies and intermediary service providers in the industry. The Commission in a statement signed by Pius Agbola, director, Policy and Regulation on behalf of the Commissioner for Insurance said due to the negative impact of Coronavirus (COVI 0-19) on the mobility/interaction of persons as well as conduct of business in Nigeria and the world over, the Commission has reviewed the potential impact on the insurance sector and has taken some measures. Agbola said submission of first quarter returns have been extended by one month, in the interim.
Tope Smart, chairman NIA
nuity and disaster recovery strategies by providing the necessary support for the wellbeing of employees, clients and other stakeholders They are also ensuring delivery of quality services to clients through prompt payment of genuine claims; deployment of alternative channels for effective provision of insurance services to customers. Among major industry events affected by the Coronavirus Pandemic include the 47th African Insurance Organisation (AIO) Conference and Annual General Assembly which was originally scheduled to hold in Lagos from May 31st to June 4th 2020 and now shifted to October 3-7th 2020 tentatively. According to Ilori, the decision to postpone the conference which has been ratified by the Executive Committee of African Insurance Organisation at its meeting on 20th March 2020 followed the outbreak of dreaded Coronavirus disease (COVID -19). The Association has also suspended all its monthly technical committee meetings until further notice and would encourage members to hold virtual meetings where necessary. Wale Bamore, group managing director/CEO, Royal Exchange Plc said the company is well aware of the dangers COVID19 poses on its business and the country at large. @Businessdayng
He said “measures have been taken to protect our systems and ensure business continuity while providing quality service and customer experience to all our customers and stakeholders. Bamore said “we advise all our existing and potential clients to contact the company through our digital channels – website, live chat, email, mobile app and contact centre. Ademola Abidogun, managing director /CEO, Guinea Insurance Plc is trying as much as possible to reduce face-to-face meetings and implementing flexible working arrangement plans. Abiodun said “our approach to this global tragedy is to stay informed, keep calm, communicate with all stakeholders and create contingency plans while also, focusing on providing first-rate service to our numerous customers far and wide through our digital channels.” Je a n B a p t i s t e N t u kamazina, secretary general of the African Insurance Organisation also sent a message of support and solidarity to all members and partners affected in one way or another by the Coronavirus pandemic and encourages them to strictly adhere to the preventive measures prescribed by their respective Governments and the World Health Organisation.
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Wednesday 01 April 2020
BUSINESS DAY
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NIA forms consortium to provide free cover for COVIT-19 health workers …puts death benefits, permanent disability at N1mn reach Modestus Anaesoronye
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s part of its response action and to support government eff o r t s t ow a rd s containing the Coronavirus (COVIT-19), the Nation’s insurance industry has formed a consortium to provide free cover for all heath workers involved in managing the pandemic across the country. The insurers under the umbrella body of the Nigerian Insurers Association (NIA) said the cover will offer death benefits to the tune of N1 million and permanent disability to the tune of N1 million. This is as the NIA has also ordered for COVIT -19 testing kits and protective materials worth over N100 million for donation to the NCDC to be used by the health workers saddled with the responsibility of managing victims of the pandemic. Tope Smart, chairman of the NIA who made the
Tope Adaramola, assistant executive secretary, Nigerian Council of Registered Insurance Brokers (L) handing over award plaque to Feyi Smith (R) for presentation to Paulinus Offorzor, executive director, Technical, Universal Insurance Plc in Lagos recently.
disclosure during a press conference in Lagos said the Association has already contacted the government, the Nigerian Centre for Disease Control (NCDC) and the Ministry of health to get the
data and number of health workers engaged for the exercise nationwide. Smart who was surrounded by other CEO’s in the industry said “as we commend the various ini-
Universal Insurance to emerge big post recapitalisation
tiatives of the Presidential Task Force, State Governments, Ministry of Health, Nigeria Centre for Disease Control (NCDC) to contain the spread, the NIA in aligning with the private sector
would like to support these efforts. He said arrangements are on to procure testing kits and protective materials for the use of medical personnel saddled with this
Allianz names Robert Africa head of Property, Energy,Construction Modestus Anaesoronye
Modestus Anaesoronye
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nderwriting firm, Universal Insurance Company Plc said it will emerge a mega company post recapitalization, as the industry continues its capital raising exercise slated to end by December 2020. Insurance industry in Nigeria is going through a recapitalisation exercise that will require operators shore up their paid-up share capital to as much as 300 percent. The exercise, which commenced on 20th May 2019 and to end on 31 December 2020, requires that life companies increase their paidup share capital from N2 billion to N8 billion; General Business from N3 billion to N10 billion; Composite Business from N5 billion to N18 billion; and Reinsur-
ance companies from N10 billion to N20 billion. Paulinus Offorzor, executive director, Technical Universal Insurance Plc made the disclosure in when the company received award in Lagos. Universal Insurance was rewarded for its sterling performance coupled with innovative product design and development Offorzor said the board and management are working assiduously to continue to deliver on its mandate as a risk management firm, assuring that Universal Insurance would emerge a mega underwriting firm post recapitalization of the sector. “On behalf of my managing director, Ben Ujoatuonu who is unavoidably absent, the board, management and staff of Universal Insurance Plc, I am delighted for this wonderful recognition. I am overwhelmed by this award www.businessday.ng
because we were just doing what we needed to do; unaware that somebody somewhere was watching our back. He said the award posses a greater challenge for the universal family to continue to put smile on the faces of her esteemed customers. Universal Insurance Plc, one of the highly innovative and proactive insurance companies in Nigeria, has blazed the trail and surmounted many hurdles in the past. The company which was established by the Eastern Nigeria Government in partnership with the African Continental Bank in 1961 through an association of Eastern Nigeria Development Corporation and Pearl Assurance Limited of London, has restructured its management and operations for the challenges ahead.
responsibility, stating that the materials will be delivered to the Nigeria Centre for Disease Control (NCDC). “In line with our profession as risk managers, NIA has decided to arrange a special life insurance cover for all health personnel and allied professionals who are attending to victims of COVID-19.” “We have therefore decided to provide the following benefits to those who may be exposed to the following risks in the course of their duties. These benefits apply to all medical personnel all over the nation. According to him, the frontline staffs are exposed to a lot of risks and as an Association we felt the need to provide cover for them against their exposures. “We shall be liaising with Ministry of Health, the Nigeria Centre for Disease Control (NCDC) and the State Governments to provide us with detailed information about these personnel so we can arrange appropriate cover.”
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obert Ter Morshuizen has been appointed head of Property, Energy and Construction at Allianz Global Corporate & Specialty effective from April 1, 2020. He will be reporting to Thusang Mahlangu, Africa CEO; Chris van Gend global head, Engineering and Construction at AGCS; and Thierry Portevin, AGCS global head of Property. Robert has been a Senior Risk Engineer at Allianz Risk Consulting since 2013 before being appointed in the role. A Mechanical Engineer, Robert worked very closely with Property and Construction and provided the insights and data that enabled both teams to underwrite quality business for AGCS Africa through risk surveys. “I am pleased to have a person of Robert’s caliber to lead Property, Energy and Construction,” says Thusang. “We are strongly com-
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Robert Ter Morshuizen
mitted to providing sound technical expertise and superior customer service in both lines of business, so I look forward to his contribution in strengthening our efforts in our technical knowhow, customer experience and profitable growth.” About Allianz Global Corporate & Specialty Allianz Global Corporate & Specialty (AGCS) is a leading global corporate insurance carrier and a key business unit of Allianz Group. We provide risk consultancy, @Businessdayng
Property-Casualty insurance solutions and alternative risk transfer for a wide spectrum of commercial, corporate and specialty risks across 10 dedicated lines of business. Our customers are as diverse as business can be, ranging from Fortune Global 500 companies to small businesses, and private individuals. Among them are not only the world’s largest consumer brands, tech companies and the global aviation and shipping industry, but also wineries, satellite operators or Hollywood film productions. They all look to AGCS for smart answers to their largest and most complex risks in a dynamic, multinational business environment and trust us to deliver an outstanding claims experience. Worldwide, AGCS operates with its own teams in 33 countries and through the Allianz Group network and partners in over 200 countries and territories, employing over 4,300 people.
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Wednesday 01 April 2020
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COVID-19: Automakers converting factories to make ventilators Kia tips Song
global president to lead new midterm plan
MIKE OCHONMA Transport Editor
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o help out during the current coronavirus pandemic, automakers across the globe are answering calls from respective governments to help make more ventilators and face masks. Already, Fiat has commenced converting one of its car plants in China to start making about one million masks a month. The carmaker wants to start production in the coming weeks, wrote its chief executive Mike Manley in an email. General Motors, Ford and Tesla in the US have all pledged their support to offer resources to make more ventilators, along with Japanese carmaker Nissan and Formula 1 teams in the UK. Other major car firms are looking at ways they can shift manufacturing towards ventilators. Major car plants in the US, Europe and Asia have halted production to try to help prevent the spread of coronavirus. But they are still pledging to help make ventilators and other vital medical equipment. Ford on Tuesday said it was working with GE Healthcare and 3M, another health industry manufacturer, to design modified respirators and ventilators, which could be produced using fans, batteries and other parts that Ford typically uses for its cars. However, Ford has already started making transparent face shields, to complement existing protective gear for hospital staff, with the first 1,000 set for delivery at three Detroit-
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area hospitals this week. It expects to produce about 75,000 of such shields this week. The firms said they did not have a set timeline for delivery of the products. Last week, Formula 1 teams in the UK said they hoped to find “a tangible outcome in the next few days” to help increase the supply of medical equipment. Working with the government and health authorities, F1 said it had experts in design, technology and production capabilities who could help out. Nissan is part of a consortium, including sports car firm McLaren and aerospace company Meggitt, looking to develop a new medical ventilator. “We are fully focused on the project,” McLaren said in a statement, but warned of the “limited time and scale of the challenge”. Indian billionaire Anand Mahindra said his company, The
Mahindra Group, would begin work immediately to explore how its factories could make ventilators. The conglomerate is the world’s largest tractor maker and India’s biggest electric vehicle manufacturer, according its website. Industry followers had said it could take more than a year for carmakers or aerospace factories to start making ventilators. President Donald Trump had tweetd on Sunday: “Ford, General Motors and Tesla are being given the go ahead to make ventilators and other metal products, FAST, Go for it auto execs, let us see how good you are”. It came after the US Food and Drug Administration (FDA) announced that it had reduced barriers in the medical device approval process to help speed up the production of ventilators. “Medical device makers can more easily make changes to ex-
isting products, such as changes to suppliers or materials, to help address current manufacturing limitations or supply shortages. Other manufacturers, such as auto makers, can more easily repurpose production lines to help increase supply’’. US Health and Human Services Secretary Alex Azar said in a statement. However, some experts have warned that carmakers may not find it easy to switch production. Jens Hallek, head of ventilator manufacturer Hamilton Medical said the materials and the components needed to build a ventilator are “highly specific” and require “specialised knowhow”. “These are extremely sensitive machines with not only comes with a lot of hardware, but also a lot of software. If one of the components does not work correctly, the whole machine shuts down and cannot be used any more,” he said.
ia has tapped Ho-sung Song, current head of its global operations division, as its new president to lead the South Korean automaker’s new mid-term plan. Song, 57, takes the reigns April 1 from Han-woo Park, who will stay on in an advisory role, Kia said in a statement on Friday. Park, 62, currently holds the title of president and CEO. A Kia spokeswoman said the board of directors would decide later about a possible CEO appointment. Song’s extensive overseas experience gives him a good foundation for spearheading the next phase of Kia’s business plan, the Korean automaker said. Before leading the company’s global operations division as executive vice president, Song was president of Kia Motors Europe, head of the company’s export planning group and president of Kia Motors France. His extensive overseas experience gives him a good foundation for spearheading the next phase of the automaker’s business plan. His first task will be leading the Plan S business plan unveiled in January which targets a shift from internal combustion technology toward electric and autonomous vehicles through a $25 billion investment blitz. Kia will offer 11 electric vehicles by 2025, targeting a 6.6 percent global share of the EV market. It also aims to get 25 percent of its global sales from ecofriendly vehicles by 2025. As part of the rollout, a dedicated EV arrives in 2021.
Coscharis group scales down operations on Covid-19 …President/CEO urges observance to safety rules MIKE OCHONMA
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ollowing the recent global outbreak of the Coronavirus pandemic, Coscharis group, strong players in Nigeria’s automotive business has advised its customers, staff and and other critical stakeholders to remain calm and take precautionary and safety measures as instructed by the world health organisation (WHO) and the Nigerian Center for Diseases Control (NCDC). Cosmas Maduka, president of Coscharis Group, owners of several automotive brand franchises including Rolls Royce Cars in Nigeria said the conglomerate have been following with great details the global developments as it relates to the Covid-19 health situation which is really unprecedented and one virus
that has brought the whole world to a standstill. As a responsible corporate entity, Maduka said, the company is adherwww.businessday.ng
ing strictly to government and the health institutions’ advice to ensure the safety of its assets that are made up of the staff and other stakeholders.
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‘’We have therefore put in place critical safety precautions in line with required guidelines across all our facilities and business concerns. In line with the Lagos state Governor’s directives, all our Lagos based offices have been directed to drastically scale down number of their staff that will be coming to the office to achieve the required social distance directives while others work from home to be able to continually deliver value for all our stakeholders’’. Some of the measures already put in place the Coscharis boss said are the hand held scanners to check the temperature of all visitors and staff coming in and out of its office facilities. There are automatic and manual dispensers in all touch points within its locations coupled with consistent cleaning of critical areas of all our buildings where human traffic occurs. @Businessdayng
Likewise, all offshore business trips for staff have been put on hold while the foreign partners are advised to stay in their various countries for the period till further notice. ‘’During this challenging period, while we would be exploring options that will reduce physical engagements where it is necessary, to the barest minimum otherwise, we encourage our customers and stakeholders to utilize other platforms like telephones, emails and our website as credible options to engage for our services’’. Cosmas Maduka said. He pledged the company’s support to every efforts of the government to control the spread of this unfortunate virus and encourages every citizens and foreigners alike to remain responsible as possible while describing the situation as just a phase that will soon fade away in our lifetime.
Wednesday 01 April 2020
BUSINESS DAY
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Hilux’s upcoming facelift gets perkier 2.8 engine ..Google’s Kuffner joins Toyota board
MIKE OCHONMA
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oyota’s Hilux pickup has already been on sale for four years, and that means a midlife nip and tuck is due. That could happen as early as this year, according to a new report which says that a facelifted Hilux range, complete with new features such as Android Auto and Apple CarPlay connectivity, is set to launch in Australia in July or August. At this stage there is no word on when the model would reach some African markets including Nigeria as the models imported into the African market are sourced from Thailand, but the local versions do tend to mirror the Thai equivalents in most aspects. So it is inevitable that local models will eventually be upgraded in a similar fashion. According to information, the Hilux is set to receive a “tougher” looking front end design, but the biggest news for local fans is the likely upgrade of the current 2.8-litre turbodiesel engine. The model is to receive a major overhaul, and this will include a power increase, although exact figures are not known at this stage. For the record, the current 2.8 TD produces 130kW and 450Nm. Toyota is also said to be working on a more
hardcore Hilux that will serve as a direct rival to the Ford Ranger Raptor. Some rivals such as the Nissan Navara 2.3D and the nextgeneration Isuzu D-Max 3.0 produces 140kW and 450Nm respectively. Indeed, the upgraded Hilux range will need all the ammunition it can get to face up to the next-generation Ford Ranger, which is likely to hit the market around 2022. Meanwhile,Toyota has nominated James Kuffner, the present chief executive officer of its automated driving and robotics arm, to join the board of directors from June, signaling a shift in President Akio Toyoda’s priorities away from oldschool automotive to nextgeneration new mobility. Kuffner will be the second
non-Japanese director on the Toyota board pending his approval at the company’s annual shareholders’ meeting, expected sometime in June. He has described his mission to develop selfdriving cars for Toyota as the “moonshot” of his generation. The American computer expert will retain his title as CEO of the Toyota Research Institute Advanced Development (TRI-AD) and take on a new title as chief digital officer, the company statement said. Kuffner will also be appointed an operating officer at the parent company; he currently holds a title there of senior fellow for advance research and development (R&D) and engineering. Kuffner replaces Didier
COVID-19: VW, Audi change logos to boost social distancing ...Car market expected to recover in summer MIKE OCHONMA
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ike most industries, the automotive sector is in lockdown in most regions of the world, including Europe, Asia, North and South America and Africa. And as social distancing becomes an everyday reality in the global fight against the coronavirus pandemic, Volkswagen and Audi are hoping to drive the message home with ‘revised’ logos. In the Volkswagen logo, the traditionally attached ‘V’ and ‘W’ letters are seen separated to signify the distance that one should be keeping from each other, while Audi has effectively done the same thing by delinking the four rings that have been associated with the brand since the 1930s. Apparently, these are not permanent changes as the revised changes will not be
COVID-19: FRSC shuts down Driver’s License capture centres nationwide
seen in the revised logos on actual cars, but for now, they are being used to promote the lifestyle changes that people across the globe are being asked to make. At the time of filig this report, there were over 660, 000 cases of coronavirus reported across 196 countries, with over 21,000 deaths linked to the virus. Almost 70,000 of the coronavirus cases are in Italy, which is looking set to overtake China’s tally within days, with over 5000 new infections having been reported in the previous
day alone. Meanwhile, Volkswagen expects the car market in Germany to recover in the summer after the automaker was forced to suspend output due to the coronavirus pandemic. Juergen Stackmann, VW brand’s sales and marketing chief, “We assume that Germany will return to normal in the summer. The standstill cannot last longer than summer. Society and the economy cannot withstand that. We must learn how to live with the virus”. VW is looking into new rules to ensure factory workers can keep their distance from each other on the production line, Stackmann said. One of the lessons from the crisis was the need to invest more in e-commerce and VW had already launched initiatives in online car trading that it would now accelerate, he said.
Leroy, 62, the French chief competitive officer who will be giving up that role. Leroy is the top non-Japanese executive at the country’s biggest automaker. He will stay on as chairman of Toyota’s European business and remain an advisor to the parent company. The other non-Japanese on the Toyota board is Philip Craven, an outside independent director. He is from the UK and served as president of the International Paralympic Committee. Kuffner helped to build Google’s autonomous car when he worked in the company’s robotics division. He joined Toyota in January 2016 after working in Google’s robotics division where he was part of the initial engineering team
that built the tech company’s self-driving car. At Toyota, Kuffner helped set up the $1 billion Toyota Research Institute in Silicon Valley to develop artificial intelligence that will be the backbone of automated and connected vehicles. In 2018, he was tapped to be CEO of the $2.8 billion TRI-AD, a separate business set up in Tokyo to spearhead Toyota’s attempt to bridge the gap between research and the showroom floor. “The prototypes and the preproduction vehicles that the team is building here at TRI-AD are going to be the most intelligent supercomputer on wheels,” he said last year after TRI-AD opened its office in downtown Tokyo. “We’ve called it the moonshot of my generation”.
Stallion gifts rice and fish to Covid-19 hospitals across Nigeria MIKE OCHONMA
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tallion Empowerment Initiative, the philanthropic arm of Stallion Group, has pledged its support to the local governments of all states across Nigeria by committing to provide locally produced rice and fish free to all the government run hospitals dedicated to Covid-19 for next 3 months. Anant Badjatya, chief executive officer of Stallion Group has further committed one staff bus each for the five governments run COVID-19 hospitals in Lagos. The Group will also provide drivers and fuel for these buses. This arrangement the Stallion CEO said will help ensure safer and comfortable transportation of our health care workers who are in the frontline in this fight against the virus. Sunil Vaswani, chairman Stallion group also stated that “These are exceptionally difficult times and urgent emergency resources have to be de-
ployed to cope with the needs of affected states and support their health care systems. At Stallion group, our top priority is the health and safety of our employees, customers and our community’’. ‘’There is nothing greater than the safety of the people of this country and it’s our responsibility to support the government and the community in this time of need. We are deeply grateful to every health care worker and person who has risked their life to fight this pandemic and will continue to support them’’. The company chairman said. Stallion group also commended the proactive efforts of the government and all the corporates who have come forward in this trying times of need of the nation and stands in solidarity with the health care personnel, the police, the immigration personnel, the customs, the aviation authorities, factories working to produce essential items in this time of need, and all people acting responsibly to contain the pandemic.
ollowing the lockdown directive by President Muhammadu Buhari on the COVID-19 Pandemic on Sun 29 March, 2020, the Corps Marshal, Federal Road Safety Corps, Boboye Oyeyemi has ordered the shutdown of Driver’s License database in Abuja with immediate effect, in line with the president’s directives to lockdown. As a result of this, the Drivers License Centres will not be able to process licenses nationwide. Applicants can go via the by-pass mode to process for the license to be delivered after the lockdown period. Corps Public Education Officer, Bisi Kazeem in a statement said that the shutdown is aimed at sustaining existing endeavours already in place by the federal government to curtail further spread of the menace. He added that the Corps Marshal had in the wake of the pandemic directed all DLCs to maintain maximum hygiene through provision of adequate water, soap and alcohol-based sanitizers at the Centres. The corps marshal had earlier advised applicants to avoid physical capture at this critical moment when the world is battling a common enemy (COVID-19), and explore the bypass option which is the online processing of the National Drivers License without physical presence of the applicant at the DLCs. However, the driver’s license will only be collected upon resumption after the lockdown. It is therefore to be noted that the By-Pass option is applicable only to applicants who intend to renew their licenses not fresh applicants. This is hereby reiterated as part of the Corps’ concerted efforts to curb the spread of the global health challenge. The closure of the DLCs will not affect the operational formations of the corps as operatives have been deployed to render required essential services in collaboration with other security and intelligence agencies at all levels to enforce both the Presidential and State Government’s directives on restriction of movement and sit at home among others. The corps marshal has notified the chairman and secretary of the Joint Tax Board (JTB) about the effect of the temporary shutdown of the DLCs nationwide.
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Wednesday 01 April 2020
BUSINESS DAY
BANKING Assessing CBN’s policies in containing impact of Covid-19 on economy HOPE MOSES-ASHIKE
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he Central Bank of Nigeria (CBN) and the banking community have been working assiduously to contain the impact of Covid-19 pandemic, which has continued to spread across the globe. The outbreak of the Covid-19 has resulted in the weakening performance of global output growth since January 2020, reflected in losses in global stock values, declining primary commodity prices, disruptions to the global supply chain associated with large-scale global lockdown of mega metropolis and whole countries; and social distancing. Also, there have been adverse shocks to global capital flows; vulnerabilities and uncertainties in major financial markets; as well as rising corporate debt in the advanced economies and public debt in some Emerging Market and Developing Economies (EMDEs). Consequently, global output growth in 2020 is projected to fall significantly below the initially projected level of 3.3 per cent. The International Monetary Fund (IMF) says the coronavirus crisis has caused a global recession. Reports show that rich nations have spent over $9 trillion so far on tackling the economic fallout from Coronavirus. And more spending is on the way as governments try to ensure there is a functioning economy post the pandemic. In Nigeria, the CBN Staff projections indicate that real GDP in the first quarter (Q1) and Q2 2020 will slow because of the tepid global demand, resulting from the recent outbreak of COVID-19, depressed global aggregate demand and supply, and the oil price war which has resulted in supply glut and decline in crude oil prices.
Godwin Emefiele, CBN governor
This muted outlook for the first half of the year may thus dampen overall growth prospects for 2020. Tackling the negative effects of COVID’19 on the economy will require unconventional monetary policy, said Uche Uwaleke, professor of finance and capital markets at the Nasarawa State University Keffi. The apex bank has already risen to the challenge through the stimulus packages it rolled out recently. The Nigerian banking sector regulator took decisive action to safeguard the Nigerian financial system and the economy from the emerging headwinds. One of the key policies is the provision of extended moratorium on loans by an additional one year beginning from March 2020. This is to ease pressure on loan repayments. The bank also reduced interest rates from nine to five per cent on its existing intervention programmes over the next one year. It created a N50 billion fund to support households and Small and Medium Enterprises (SMEs) www.businessday.ng
affected by COVID-19; introduced credit support for the healthcare sector; introduced regulatory forbearance to consider temporary and time-limited restructuring of loan terms and tenors to households and businesses affected by COVID-19, and strengthened the loan-to-deposit ratio (LDR) policy. The bank also announced an intervention fund of N1.1 trillion to cushion the adverse effects of the Coronavirus outbreak on the economy. The sum of N1 trillion from this amount will be used to support local manufacturing to boost import substitution, while the balance of N100 billion will be used to support the health services sector and products through the provision of loans to the pharmaceutical companies, hospitals and other health practitioners to build new hospitals and health facilities or expand existing ones to first class health centres. This is in addition to the N1.5 trillion private sector driven Infraco Project fund, designed to target the construction
of critical infrastructure across the country. In addition, pharmaceutical companies would be assisted through loan interventions to re-establish drug manufacturing firms in Nigeria and curtail the spread of the corona virus. “It is expected that through these interventions, about N3.5 trillion would be injected as stimulus to support the Nigerian economy during this trying time,” Godwin Emefiele, governor of the CBN, said. Analysts in the financial services sector have seen these interventions as welcome development. Ayodele Akinwunmi, relationship manager, corporate banking, FSDH Merchant Bank Limited, said the efforts of the CBN and banks to support the economy through granting credits at concessionary terms are very commendable. However, he said monetary policies have their own limitations and cannot completely protect the economy against the impacts of the Covid-19. “We need strong and
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bold fiscal and trade policies to mitigate the adverse impacts of the Covid-19 and to build a resilient economy, even long after the Covid-19 issue is over,” Akinwunmi said. Following the drop in oil price to as low as $23 per barrel occasioned by the outbreak of coronavirus and the declining external reserves to about $36 billion, the foreign exchange pressure resumed leading to the dollar trading at N420 at black market. Consequently, the regulator moved the FX sales rate to Foreign Portfolio Investors (FPIs) to N380.2/$, from N366.7/$, in a move that suggests a technical devaluation of the naira. On March 21, the CBN adjusted the official exchange rate to N360 per dollar from N307/$. Emefiele said the exchange rate of N380 per dollar at the Investors and Exporters (I&E) forex window was not devaluation but an adjustment. Uwaleke said, “I think that in view of the drop in forex demand occasioned by the fall out of the COVID 19, the CBN could have delayed this action especially coming few days after the CBN Governor had assured the nation that no devaluation was in the offing. While the upward ‘adjustment’ in exchange rate may increase foreign portfolio investment in the near term and temporary halt capital flight, it rubbishes the 2020 federal and state budgets predicated on N305 to the dollar.” He said this was especially against the backdrop of the fact that the capital provision in the budget had huge dollar component. He said it also presented a major headwind to the country’s capacity to service public debt given the growing proportion of foreign debt, exacerbating in the process the fiscal imbalance. “Furthermore, as an import-dependent economy, a major risk will be to inflation. In the months ahead, @Businessdayng
the Manufacturing and Non-manufacturing Purchasing Managers Index may contract due to high cost of inputs with adverse effect on the already high unemployment rate. This will be compounded by the impending deregulation of the downstream sector with NNPC ceasing to be the sole importer, as oil marketers are compelled to access forex at market-determined exchange rates.” He explained that even at the current price of N380 to the dollar at the autonomous Forex market, not a few think the naira was overvalued. “By implication, the exchange rate is likely to rise further. The result is that speculators take over the market, politicians in particular see incentive to hold dollar as a store of value and if our experience is anything to go by, even when oil price recovers, the exchange rate will remain sticky downward.” He pointed out that the action by the CBN had a signalling content that should not be underestimated. With external reserves of nearly $36 billion enough to finance many months of imports well in excess of the 3 months international threshold, the CBN ought to have continued to defend the value of the naira while it fine-tunes demand management strategies to further contain the pressure, he said. “If Nigeria has witnessed some level of macroeconomic stability postrecession, consistent with the objective of the ERGP, it is primarily due to the effort of the CBN in ensuing exchange rate stability. This latest upset in the forex market could reverse gains already made,” he further said. Before the outbreak of coronavirus, the CBN had introduced some policies targeted at growing and stabilising the economy. Such include the Loan to Deposit Ratio (LDR), Open Market Operation (OMO) among others.
Wednesday 01 April 2020
BUSINESS DAY
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Shipping, port operations critical to containing Coronavirus pandemic - SAN amaka Anagor-Ewuzie
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he Shipping Association of Nigeria (SAN) has added its voice to calls made by other maritime industry stakeholders on the need for the Federal Government to keep essential services, including the seaports and cargo operations going during the prevailing Coronavirus otherwise known as COVID-19 pandemic crisis. Val Usifoh, chairman of SAN, said in a statement issued in Lagos at the weekend that the association was concerned about the implications of shutting down the ports and/or not allowing ships to berth and operate. “If cargo inflow is halted in any way, this will have immediate repercussions on the country’s provision of basic items and necessary input for the few industries still surviving, including small and medium scale enterprises and the social consequences in Nigeria would be huge,” he stated.
According to him, not only will millions of people working in the informal sector most likely lose their source of income, but also there is likelihood of massive lay-off of staff employed in the formal sector and shortage of basic necessities. He also said that keeping the ports open during the pandemic will ensure continued revenue stream for the government through
the Nigeria Customs Service (NCS) ‘especially now when cash is needed’. In other West African territories, he stated, ship agencies are considered essential services and have been given ‘key service’ approval to remain open. “Shipping carries 90 percent of world freight movements, therefore interrupting that flow has dire consequences for a nation like
Nigeria which is reliant on import of essential items including drugs, chemicals and raw materials,” Usifoh, who is also the former chairman of the Port Consultative Council (PCC), and former chairman of the Port Industry Anti-Corruption Standing Committee (PIACSC), said. He, however, commended the Federal and State governments for ‘doing their best’ to curb the spread of
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icky Haastrup, chairman, Seaport Terminal Operators Association of Nigeria (STOAN), has asked the Federal Government to map out plan for the relocation of petroleum depots, otherwise known as tank farms, from Apapa. Speaking against the backdrop of the March 15 explosion that took place in Abule Ado, Ojo area of Lagos State, which claimed over 23 lives and displaced more than 500 people from their homes; Haastrup urged the Federal Government to take urgent steps to avoid a repeat of Abule Ado catastrophe in Apapa by moving tank farms away from residential and crowded areas like Apapa Port City. “We are concerned about the preponderance of tank farms in Apapa, which is a port area and a high-density town. With more than 60
tank farms operating in the area, the port, workers and residents of Apapa are sitting on a keg of gunpowder. We pray it does not explode, so we appeal to the Federal Government to urgently see to the relocation of these tank farms to avert a future carnage,” she said. She said that in addition to bad roads and absence of truck parks in Apapa; the large number of tank farms and oil depots has contributed to traffic congestion in the area. “Tank farms should normally be located several miles away from the city and from the port area for safety reasons,” she said. Haastrup also called for more efficient traffic management system in Apapa to enhance the movement of vehicles while ongoing construction work lasts. She advised the Federal Ministry of Works and the Lagos State Government to open up inner roads to allow for free flow of traffic. The STOAN Chairman also www.businessday.ng
Vicky Haastrup
advised the Nigeria Customs Service (NCS) to concentrate more on trade facilitation, rather than revenue generation to clear congestion at the ports. She called for the streamlining of government agencies at the port and the reduction of congestion at the port gates, which is as a result of multiple checks by various government agencies. “We observed that the volumes of containers handled
vices to their customers,” he added. Recall that last Wednesday, the United Nations Conference on Trade and Development (UNCTAD) called on governments across the world to keep maritime trade moving by allowing commercial ships continued access to ports worldwide and by facilitating the rapid changeover of ships’ crews. Mukhisa Kituyi, UNCTAD Secretary-General, explained that as the world battles the coronavirus pandemic, the global maritime transport industry is playing a critical role in the response. Kituyi said commercial shipping remains critical to moving the world’s food, energy and raw materials, as well as manufactured goods and components including vital medical supplies, “which are sorely needed at this time and items that are necessary for the preservation of many jobs in manufacturing – without which modern society cannot function”.
Taiwo Afolabi free medical outreach benefits 120 persons in Ibadan
Abule Ado explosion: Haastrup calls for relocation of Apapa tank farms amaka Anagor-Ewuzie
COVID-19 in the country. “The latest order by President Muhammadu Buhari that cargo ships that have been at sea for more than 14 days be allowed to berth are helpful because it will allow vessels waiting over the past month on Lagos waters to berth and discharge. The bottleneck is that with the low level of deliveries out of Lagos ports as a result of well-known challenges, not much impact will be made on the berthing delay and cargo throughput,” he said. Usifoh assured that major shipping lines and their agencies in the country are open to providing essential services including seamless online transactions to shippers. “All shipping companies are complying with the directives of relevant authorities including the World Health Organisation (WHO) and the Nigeria Centre for Disease Control (NCDC) with regards to measures aimed at containing the COVID-19 pandemic, while rendering essential ser-
at the ports have continued to witness geometric growth, while the supporting port infrastructures, especially the port access and Customs clearing processes, have continued to drag on the efficiency of the ports. Since the first quarter of 2019 into the first quarter of this year, volumes have been growing by 20 percent as a result of the closure of Nigeria’s land borders. The unanticipated growth has posed a major challenge to container terminal operators,” she explained. She however advised Customs to automate its clearing and cargo release system in order to clear the backlog of cargoes at the port. “The scanners at the port are not working, while almost all the cargoes landed at our ports are subjected to 100 percent physical examination. In Lagos ports, up to 70 percent of the containers are subjected to physical examination. These have to change to allow for free flow of trade,” she added.
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total of 120 persons have enjoyed free dental and medical care at the Taiwo Afolabi Free Rural Dental Outreach which was held at the popular SangoOjurin market in Ibadan recently. The rural community health outreach, which was organised by the University Of Ibadan Association Of Dental Students and sponsored by SIFAX Group, is a free medical mission targeted at rural communities in Oyo State. Some of the ser vices the beneficiaries enjoyed include body mass index (BMI) measurement, blood pressure test, random blood g l u c o s e m e a s u re m e nt, blood pressure measurement, dental clerking, examination and referrals, extractions and scaling and polishing. Medical personnel deployed for the event included doctors, medical and dental students from @Businessdayng
the University College Hospital, Ibadan. There was also health talk on the imperative of maintaining good oral health. Olumuyiwa Akande, Corporate Communications Manager, SIFAX Group, who represented the company at the event, said the sponsorship of the programme was part of the humanitarian initiatives designed to provide support for indigent people. He said the outreach was also in line with the company’s belief that a healthy citizenry translates to a healthy nation. Adejumo Michael, president, University of Ibadan Dental Students Association, said the aim of the outreach was to create oral health awareness in the society. He noted that SIFAX Group’s support for the outreach has helped to not only reach many rural persons but also equip the students with adequate field knowledge needed for them to excel in dentistry.
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Shippers decry NASS plan to return SON back to Nigerian seaports …Presence to thwart clearing process, Ease of Doing Business amaka Anagor-Ewuzie
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hippers under the aegis of Shippers Association of Lagos State have decried the alleged plans of some stakeholders including the National Assembly members in pressuring the trading public to accept the Standards Organisation of Nigeria (SON) back to the port. According to them, there was no guarantee that even if SON is admitted into the port, substandard materials will cease to enter the country. “SON was among those that the Federal Government asked to operate outside the ports because their presence was not helping the Ease of Doing Business policy. The truth is that shippers have not found any relief in the proliferation of Government Agencies in cargo examinations within our port com-
plexes,” said Jonathan Nicol, president of the association. Nicol, who stated this on phone, also told our correspondent that the issue has dragged on for several years and even the Nigeria Customs Service, has explained that whenever they need SON to clarify sub-standard materials in the port, they would be invited. While expressing surprise as to why SON is hell bent on returning to the port to complicate clearing processes with their sampling methodologies which results in holding the goods in detention, he said Nigeria does not have up to 3 percent of substandard goods entering the country through the seaport. “The Senate Committee on Industries should be concerned, at this time, with stopping the influx of substandard items through trade laws between countries involved with the manufacturing of substandard items. This used to be the case, like
in those days with India and China. Trade was restricted due to these countries involvement in production of substandard goods,” he advised. He pointed out that Standards Organisation was active in checkmating such products, especially fake electrical cables, which is extremely dangerous and some electronic gadgets like cell phones that were destroyed
recently. Nicol also advised the Senate to be more concerned with enacting trade laws that would encourage the protection of cargo, create incentives for cargo owners, involve in the reduction of cost of doing business in Nigeria and encourage entrepreneurship since government cannot provide employment for every eligible Nigerian. Assuring that Shippers
Association would not encourage smugglers to destroy Nigeria trade platforms, Nicol said the level of invasion of government agencies in the port should be reduced drastically. “We are desirous to feel the impact of the Nigerian Senate in seeking the passage of National Transport Commission (NTC) under whose jurisdiction this issue will be domiciled,” he said.
According to him, NTC will introduce New Port Order that will not encourage anybody other than the shipping and terminal operators to have access into our ports while other operators can conduct their businesses within their office domain. “Port business should be driven by technology. In some countries, you hardly see the Customs in the ports. The Customs only have access to the goods at the exit gate. All transactions are driven by technology. Cargoes are scanned from Port of Origin with miniature films of all items in the container or cargo and sent electronically to Customs to simplify clearing processes,” he added. Recall that the Senate Committee on Industries led by Bayo Osinowo, said recently during its oversight function visit to the Lagos laboratory complex of SON that it would ensure the return of the SON to the nation’s seaport.
Coronavirus: Buhari orders Nigerian seaports to remain operational …Two weeks lock-down to help decongest the port - SALS amaka Anagor-Ewuzie
P
resident Muhammadu Buhari has finally doused tension in the minds of port industry stakeholders by ordering that all seaports in Lagos should remain operational in accordance with the guidelines issued
earlier as the nation battle to contain the Coronavirus outbreak. According to Mr. President, who gave the directive during a nationwide broadcast on Sunday, vehicles and drivers conveying essential cargoes from these ports to other parts of the country would be screened thoroughly before departure
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from the ports by the Ports Health Authority. Recall that President Buhari had directed on Friday that Nigerian Ports Authority (NPA) and other governmental agencies in the port, would only allow vessels that have been at sea for more than 14 days to berth in Nigerian ports. He said such vessel can
only be allowed if the crew have been tested and confirmed disease-free by the Port Health Authorities. Mr. President stated that the 14-days restriction on vessels does not apply to vessels carrying oil and gas products, which according to him, has minimal human contact. Reacting, Jonathan Ni-
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col, president of Shippers Association of Lagos State, who commended NPA’s proactive effor ts since Coronavirus outbreak, said the two weeks partial lockdown would help to decongest the ports and eliminate the protracted Apapa traffic jam, if massive evacuation of empty containers is carried out.
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“We hope the Apapa traffic would disappear after the two weeks lock-down. Government Agencies should assist the Nigerian Ports Authority to achieve this objective. The Port Health and the Federal Ministry of Transportation should synergies to curtail the dreaded Coronavirus within port complexes,” he added.
Wednesday 01 April 2020
BUSINESS DAY
27
FINANCIAL INCLUSION
& INNOVATION
Fate of 36m unbanked Nigerians in limbo amid coronavirus lockdown …as stress test hits country’s financial inclusion
Stories by Endurance Okafor
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ith the lockdown of Lagos, Ogun and FCT on Monday following the increasing rate of coronavirus cases in the states, the fate of Nigeria’s unbanked population of almost 40 million is unknown. Nigeria’s financially excluded population who are mostly at the bottom of the economy with a high dependency on their informal dayto-day transactions for survival are expected to take the most heat from the lockdown. “It is going to be a tough time for the unbanked population in these states because it is an emergency period. They are going to be mostly hit by the exercise and especially those in the informal sector who live on their daily earnings, “a commissioner of finance from one of the states told BusinessDay on the condition of anonymity. To curtail the spread of the deadly coronavirus, President Muhammadu Buhari on Sunday said “based on the advice of the Federal Ministry of Health and the NCDC, I am directing the cessation of all movements in Lagos and the FCT for an initial period of 14
days with effect from 11pm on Monday, 30th March 2020. This restriction will also apply to Ogun State due to its proximity to Lagos and the high traffic between the two States.” According to the president, commercial establishments such as processing, distribution and retail companies; petroleum disruption and retail entities, power generation, transmission and distribution companies; and private security companies are exempted from the lockdown. The residents of Lagos, Ogun and FCT were instructed by the president to “stay in their homes.” All businesses
and offices within these locations were ordered to fully close during the lockdown with the inclusion of financial institutions. “This is going to be a major stress test for financial inclusion, but we must not delay: the time to act is now,” Eric Noggle, Senior Research Director, Informing Decisions with Data warned before the president ordered the lockdown. As banks closed their branch offices from Tuesday, their skeletal services coupled with the restrictions in movement is expected to push more customers to use their digital banking services. The unbanked and digi-
tally underserved population will, however, have the most difficulties in carrying out financial transactions in the period of the lockdown, industry sources said. “We are fully aware that such measures will cause much hardship and inconvenience to many citizens. But this is a matter of life and death. If we look at the dreadful daily toll of deaths in Italy, France and Spain,” President Buhari said. According to Chuba Ezekwesili, co-founder and partner at Future Africa, what will determine efficiency is the ability for the banks or financial institutions like NIBSS or Inter-
switch to operate and respond to issues while they run a skeletal system during this period of remote work. “It might mean slower responses as these institutions adjust their system towards a different way of working,” Ezekwesili said. Even in the absence of the pandemic, Nigeria still operates a cash-based economy. This is despite the cashless policy drive by the Central Bank. This implies that a large number of the financially included population will still have to visit the ATMs for cash to transact with the foodstuff vendors for example, as a large segment of this kind of small and informal businesses do not rely on the digital payment system. As of Monday afternoon, queues were starting to grow longer than usual at ATMs in Lagos, as many fear the ATMs may soon run out of cash. Data by NIBSS shows that Nigeria has about 17,518 ATMs servicing over 70 million people with active bank accounts. These machines are likely to face more pressures as more people are hoping to withdraw money for necessities. “I no longer allow my customers to pay through bank transfers. Most of the time,
the transfers will bounce back and I will be at a loss,” a petty trader who identified herself as Iya Beji said. If Iya Beji were to be in Ghana or Kenya, the case would have been different as the informal market in some of those African countries depends largely on mobile money for financial transactions. Telco-led financial inclusion model in most African countries has led to tremendous progress in the number of people with access to financial services. It is however not the case in Nigeria owning to its Bank-led inclusion model. The latest figures by EFInA put Nigeria’s financial inclusion rate at 63.2 percent, meaning as much as 36.8 percent or 36.6 million adults still lack access. Telecommunication operators’ push to offer mobile money services in Nigeria received the official nod of the regulator, the Central Bank with the issuance of guidelines for players to apply for the licence in October 2018. But a year and almost six months after the Central Bank loosened its policy to accommodate new players in Nigeria’s financial services industry; the direction of the mobile money initiative remains unclear.
How COVID-19 will force Nigeria’s financial sector to innovate Ashley Immanuel
O
n Monday morning, hundreds of employees at Nigeria’s leading banks woke up, bathed, brushed their teeth, and put on their business attire. They trimmed their beards and applied makeup. Then they sat down in front of their computers, switched on their webcams, and reported for work. Despite Lagos’ notorious traffic, banks and other financial service providers in the nation’s largest city typically require employees to come to the office daily. They are now scrambling to figure out how to cope in a world in which both employees and customers are sequestered at home. Unaccustomed to cultures of remote work, some banks want to see staff suited and booted and reporting on camera by 8am. However, responding to the COVID-19 pandemic will require the Nigerian financial sector to work differently, both during
the immediate crisis and in the longer term. In the immediate term, innovation will need to focus on survival. Nigerians will need more credit when their income is interrupted, yet they may also struggle to repay those loans until regular economic activity resumes. Some financial institutions, such as microfinance banks, may be put at risk if customers are unable to repay loans for a period. Some measures, such as the Central Bank of Nigeria’s N50 billion Targeted Credit Facility, are being introduced to help bridge the gap. Some financial service providers have responded by reducing fees and finding other ways to support customers. EFInA had provided grant funding to a FinTech called Riby to expand access to financial services via cooperatives. In the wake of COVID-19, Riby is planning to provide a onemonth moratorium on loan repayments for customers, and to use its existing network of agents and customers to provide last-mile delivery of
donated money and goods to households in need. The crisis may also act as a catalyst for certain digital services. Nigeria is home to several digital platforms, including e-commerce sites such as Jumia, some of which may see a boost in business as markets and restaurants close. Some governments are encouraging use of mobile money in order to reduce risk of transmitting disease through handling cash. As inter-state movement becomes restricted and bank branches close, mobile money could also become a more attractive option for sending money to family or friends. Longer-term, we run the risk of more Nigerians becoming financially excluded as a result of this crisis, at the exact moment when they as individuals and the overall economy would need their participation the most. Global evidence suggests that access to financial services can help households weather financial shocks and can contribute to economic growth. Yet the EFInA Access to Financial Services in Nigeria
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Surveys found that financial inclusion dipped following the last recession. Companies that can innovate and extend lowcost, digitally enabled services to the Nigerian mass market will have an enviable customer base when the economy recovers. Building this business case will require support from regulators, including evaluating regulations on fees and pricing to help financial service providers reach low-income customers profitably. Over the past decade, Nigeria has fallen behind several other African countries in terms of financial inclusion, as mobile money has taken off in those markets but remained low in Nigeria (only 3% of Nigerian adults used mobile money in 2018). EFInA’s research indicates that the newly established category of Payment Service Banks has the potential to drive financial inclusion, including in underserved areas. Accelerating the deployment of Payment Service Banks may be one of the most efficient ways to expand financial
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access following the COVID-19 pandemic and set the “digital rails” that Nigerians can use to access other services that will improve their lives, such as pay-as-you-go solar solutions. In some ways, this pandemic can provide perspective about other crises, current and future. As of the date of writing, there have been approximately 30,000 deaths globally from COVID-19. Each year, approximately 1 million children die in Nigeria alone, mostly from preventable illnesses. COVID19 is reminding us of what we already knew: we need to urgently invest in access to healthcare for all Nigerians. Microinsurance is one way to expand access to healthcare. The EFInA Access to Financial Services in Nigeria 2018 Survey found that less than 2% of Nigerian adults have insurance. However, 31 million Nigerian adults said that they would be interested in microinsurance, 20 million of whom own mobile phones. Last, COVID-19 can force us to face future crises. For @Businessdayng
years, we heard warnings that we would be unprepared for the next global pandemic; now it is upon us, and we are unprepared. Perhaps this will be a wake-up call to take other global threats seriously, particularly given that some climate experts expect Lagos to be under water by the end of this century if we do not act quickly. The financial sector can innovate to support more climate-friendly initiatives; one example is the recent issuance of green bonds in Nigeria, which provide an opportunity to attract foreign and domestic investment for environmentally friendly projects. In Nigeria, we have 200 million people. We have rural areas and large cities, teeming with people and entrepreneurs. We now have COVID-19. We have uncertainty. We have opportunity. With restrictions on movement, we have time to sit quietly, to reflect, to think. We need ideas. Ashley Immanuel is the Head of programmes at EFInA.
28
Wednesday 01 April 2020
BUSINESS DAY
INTERVIEW
‘Property market will emerge stronger after the coronavirus crisis’
Like wild fire, the coronavirus pandemic is spreading across the globe, impacting markets and economies of the world. Real estate is not insulated from all these. In Nigeria, the impact of the virus on the property market is quite visible. But some real estate firms and investors remain afloat, moving ahead of the virus. LandWey Investment Limited is one of such firms. In this interview, OLAWALE AYILARA, the company’s Founder and Chief Executive Officer, shares his thoughts on the coronavirus and how it is impacting on the property market. He also speaks on how his company is responding to the virus. He speaks with CHUKA UROKO, Property Editor. Excerpts
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he whole world today is in crisis over the sweeping impact of coronavirus which the World Health Organization has described as a health emergency. How is LandWey Investment responding to the pandemic? As a forward thinking and innovative company, we had previously discussed the option of operating virtually and we had begun plans towards implementing that for Quarter 3. Really, what this pandemic did was move up the timeline we initially set. We’ve also had to reschedule major organizational activities to support the efforts of the government in curbing the spread. At the moment, our employees are safely working from home, the business is fully operational and our virtual operations platform is active. Like in other economies of the world, real estate in Nigeria is already hit. As an investor in this sector of the economy, what are your concerns? My major concern is the wellbeing of every citizen and that we are all safe. As a CEO and an investor, I’m concerned about what comes after the pandemic. What would be the state of the economy, how will it affect our business? How do we recover from it? What measures do we need to put in place to ensure that our investments and that of our clients are secure. But more importantly how can we innovate our business to ensure that the economic impact is minimal. If you were to advise the government, what would you tell them to do for real estate in this crisis period, considering that the sector can impact the economy positively? The Real Estate sector is an integral part any economy because it provides not only shelter but also an instrument used by all. At least for now, we can’t build businesses in the air or on sea, we need land to build our hospitals, schools, restaurants, and any other business we run. Therefore, it is important that government provides the necessary support, whether in terms of loans, favorable regulations or endorsement that this sector
nerships with world class architects, engineers and designers. Tell us about these world class partners? Everything concerning the project has been put on hold Apart from being a difficult business environment, Nigeria is also a very competitive market where competitors go all out to out-do and outwit. What have been your experience and attitude to competition in this crowded market? At LandWey, we focus on the industry, not the competition, and we compete with our last achievement. That way, we are constantly innovatin—setting the bar higher. We set high targets for ourselves, based on our vision to build a sustainable brand, driven by excellence as a top leader in the real estate sector with the largest market share.
requires to thrive. Wise investors know that real estate is one of the most secure forms of investment because you can’t lose everything (provided you invested in properties with valid documents). So, what better way to protect your wealth if not Real Estate? In the immediate term, after we have overcome this pandemic, government should consider Public Private Partnership options with real estate firms and work actively towards providing more affordable housing, so that we can get more people off the streets and reduce the risk of spreading any other virus like the Corona virus Because of the rampaging virus, transactions in the property market have dried up completely—no inspections due to the social distancing rule. What has been your experience so far? Do you see that affecting house price too? Well, when you say inspections, yes, physical inspections have reduced but not dried up. We’ve been able to leverage the use of technology over the years to prepare us for such a time as this. We have been using VR technology to create a unique experience for our clients and for this period, the virtual tour function on our website has become very useful www.businessday.ng
for our sales team to hold virtual inspections with clients, right from the comfort of their homes and without missing out on the opportunity to invest. And yes, there will be a change in the pricing, which will be as a result of inflation, as the economy struggles to recover from the losses What do you think will be the future of the property market in Nigeria after the coronavirus crisis? In my opinion, it will be stronger like never before, as people come to see it for what it really is. It is security for your income and future. Housing is a necessity for all, whether you are renting or you own. So, for as long as that remains the case, real estate will always align with the principle of supply and demand. In Nigeria particularly, we are still experiencing urbanization with increased population growth. With less dependency on oil revenues, other sectors are beginning to thrive and most of which will require one type of real estate or another, be it land, residential, commercial or industrial. So, I truly believe that property market beyond these uncertain times is promising. Now, let us look at your
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ambitious mixed-use project—The Audacious Skyline at Eko Atlantic City. At what stage of development are you now? Based on an in-depth research and market insights, we decided to put that project on hold and divert our resources to our newest projects, Urban Prime One, Two and Three. These projects meet the current market demands and we felt it would be much beneficial to target a certain market segment to provide land, a mix of apartments, terrace and semi-detached housing units within our estates. With the present state of the global economy, what are your concerns in respect of that gigantic project that will rise 28 floors? Any plan to scale it down to reflect the current economic realities? This project has been put on hold for that same reason but, we will continue to watch how things improve and re-evaluate our options accordingly. You were once quoted as saying that you were ready and equipped to take on that project because you were armed with robust experience in construction as well as strong part@Businessdayng
Increasingly, technology is narrowing the space for professional practice and also for yield-hungry investors like you with its disruptive impact. How true is this? How prepared are you to retain your market share in spite of everything? Retaining our market share has never been a concern of ours. From the inception of LandWey, we understood that technology has come to stay and the best way to stay ahead was to embrace it totally. As I previously explained, we are and will continue to leverage on technology and ensure that our brand is sustainable and is able to evolve no matter what. To what extent do you leverage technology, particularly Proptech, in your operations? What benefits have you seen, especially in your return on investment and bottomline? Proptech has come to stay and we are always looking for novel ways to transact business, while still delivering value to our clients. So, it has been quite beneficial. It has helped us think of complementary services outside of the traditional real estate business. Through it, we have launched subsidiaries like Alausa.ng and Crowdownership, with more still in the pipeline.
Wednesday 01 April 2020
BUSINESS DAY
29
BBrroouugghhtt ttoo yyoouu bbyy
HOW THE GLOBAL RECESSION WILL Globalisation and the AFFECT YOUR BUSINESS Economics of Covid 19 of offices and non-essential businesses will reduce productive effort and output. Take as examples, the closure of a Chinese fabric manufacturing company that produces input for a Nigerian fashion line or the shutdown of bars in Lagos. In both cases, Nigerian businesses will be required to slow down or halt production. Moreover, with stay-athome policies and the uncertainty that comes with the pandemic, non-essential commodities will be less sought after.
The International Monetary Fund (IMF) has officially Governments around the world, Nigeria inclusive have declared the global economy to be in recession as introduced travel restrictions from high-risk countries to try a result of the COVID-19 pandemic, a recession to contain the spread of the virus. The Nigeria government considered at par with or worse than the last global has, in addition, announced that all passenger aircraft both he On world turned economic activities, only time time he world turned economic activities, only financial crisis. the back of this, 80 of the worlds commercial and private flights have been suspended from “as have were” on requested its will will assistance tell. But But for foroperations now, China China “as itit were” on its tell. now, 195 countries already in the country effective from Monday March 30, head within the head within the appears to be COVID-19 free, appears to be COVID-19 free, from the IMF. The G20 has accordingly announced 2020 for 14 days. spatetotaling of just just ONE spate of ONE and economic activities haverecently announced a 40 percent cut in and economic have fiscal measures USD5 Trillion which is over activities Delta Air Lines MONTH and we are are still still resumed MONTH resumed across across flights, the country. country. the 6% of globaland GDP.we the largest reduction in its history, surpassing even watching and and gasping gasping at at unun- Clearly, post September watching Clearly, the the Chinese Chinese economy11 cuts. “The speed of the demand falloff economy On Tuesday March 31, IMF’s Executive(in Board approved folding events. Asthe the global folding events. As the global (in foretaste of ofis unlike whatanything other we’ve seen — and we’ve seen a lot in our aa foretaste what other a framework for alike newaaround of bilateral borrowing, across to business,” Ed Bastian, Delta’s chief executive, wrote in a economy reels like drunken economy reels drunken economies across the globe globe economies the succeedthere agreements currently in place through note tosuffered employees. sailor, there are huge huge economsailor, are economare 2020. nowThese witnessing, suffered are now witnessing, andimplications other measuresacross are being taken to enable the Fund ic implications across indusic indussignificant devastation in in the the significant devastation supports members through and beyond the ongoing tries anditssectors sectors and of course course tries and and of first two two months months HOSPITALITY of 2020 2020 and and& SERVICES first of pandemic. The United States Congress also approved an Beyond the numerous bans and lockdowns, the fight against as always, there there are are losers losers and and the as always, the general general feeling feeling isis that that the the unprecedented stimulus package of US2.3Trillion amidst the coronavirus is being waged by encouraging people to winners. Now Now officially officially dede- nightmare winners. nightmare is far from over. In is far from similar moves by the governments of the United Kingdom stay atover. home In and avoid travel, slashing demand for flights, clared ascountries. Pandemic of of global global this clared as aa Pandemic this period, period, retail retailhotel sales felland by restaurant bookings. Canceled flights and sales fell by and other rooms impact, projections of potenpotenimpact, of 20.5% yearare on year, year, industrial 20.5% year on By way ofprojections relief, governments of proactive countries hotelindustrial rooms could affect service-industry workers. If people tial global infections rangeto support tial global infections range output was down down 13.5% and travel plans and cancel flights and hotel output was 13.5% initiating aggressive policy responses businesses, continue to and delay between 500m at its its most most fixed asset asset investment by 25%. between at fixed investment 25%. workers and500m the growing rank of the unemployed. These rooms,by service-industry workers will likely be laid off. people travel across across the the globe globe people travel conservative and overmaintaining half of of liquidity Leading sectorslike likeits itsaviation aviation conservative and over half efforts are geared towards in markets Leading sectors for economic economic and and leisure leisure acacfor and injecting to create the necessary conditions RETAIL/CONSUMER GOODS the world’sstimulus population (close and motor motor vehicle industries the world’s population (close and vehicle industries tivities. tivities. for four robust recoveryhuman from thisbeings) shock to thewhich global economic With people stocking up several necessities such as to four billion billion human beings) which are collapsed during this to are collapsed during this Asessentials the coronavirus coronavirus crisis period, rages As the crisis rages system. But the undeniable fact to is the war is still food items and home for the isolation at its highest. highest. There seem seem to thatperiod. period. at its There on, medical medical facilities in the the on, facilities in raging with in lockdowns, travel bans and other stringent supermarkets and online delivery services are expected be noand doubt in anyone’s anyone’s mind be no doubt mind most advanced nations are advanced nations are measures stillthe place, drastic relief measures being introduced to record a like growth most in demand as customers continue to that this isis most fate Other Other major major economies economies that this thein most drastic fate like overwhelmed. Leadersriceand and Leaders have limited scope to achieve positive impact. stockpile goods suchoverwhelmed. as toiletries, hand sanitizers, and that has has befallen befallen the the world world in in the the United United States States of of AmeriAmerithat citizens alikeescalates. have been been comalike have comNigeria, like many, will be hit on two fronts. Directly as a other food items as citizens the pandemic Restaurants the last last century century to to date. date. ca, the the United United Kingdom Kingdom and the ca, and pletely blindsided. Nigeria’s result of the increase in cases in the country, and indirectly, and fast food chains have deployed mainly Nigeria’s the use of pletely blindsided. Europe have not fared much Europe have not fared much due to our closeness with badly hit China, our number delivery services as an market alternative option. However, stock market shed NGN2.2Trn stock shed NGN2.2Trn As at the last last count, count, global casbetter, with withour thesebreweries, marketsrestaurants, still in As the global these markets still oneat infrastructure financier andcastrading better, partner, plus catering and events will in two two months months andindustries the bloodbloodand the es wereon402,054 402,054 with 17,507 counting their losses losses as the the es were their as reliance global oil with prices 17,507 which havecounting also been badly likely witness the reverse dueis thefrom lockdown, letting istofar far from over.banning of letting over. deaths, with all 195 countries Coronavirus pandemic con- and deaths, with countries Coronavirus conaffected by bothall the195 pandemic and a trade war between pandemic social gatherings general restrictions on movements Nigeria has now now recorded Nigeria has recorded of the world affected. The The tinues tinues to to cause cause massive massive human Theover of the affected. human Russia andworld Saudi Arabia.. and activities. newsprint, paperof stationery over 40 cases cases ofand COVID19 40 COVID19 industry general will likely face very a hit as most activities top 33 hit hit countries countries are are China, China, and and economic economic losses losses ininthese these top in including senior public including very senior public In response to United the pandemic, government go electronic during this period and as some businesses Italy and the the United Statesthe ofNigerian nations. On the the back back of these these Italy and States of nations. On of officers and and personalities. personalities. Our Our officers announced with on Sunday, March 29, 2020 developments, that States with the chooseInternato sustain newly learned models. America with 81,171, 63,927 developments, the InternaAmerica 81,171, 63,927 economy has has also also witnessed witnessed economy the highest occurrences of the pandemic which are Lagos, and 46,168 46,168 infections infections and and tional tional Monetary Monetary Fund Fund (IMF) (IMF) other and other drastic drastic adverse adverse impact impact Ogun and Abuja will bedeaths on lockdown FINANCIAL SERVICES 3,277, 6077 and 582 deaths re- effective has in in Monday, statement issued on on 3,277, 6077 and 582 rehas aa statement issued in the shortest shortest time₦2.3 with crude the with crude March 30, 2020, for 14 days with few exemptions for The Nigerian Stock in Exchange (NSE) time lost trillion in spectively. In In Africa, Africa, the the worst worst Monday Monday 23 23 March March forecasting forecasting oil spectively. oilNigeria’s pricesfirst crashing from over prices crashing from certain services deemed essential. This is expected to the three weeks after case - an 18% over drop. hit are South Africa, Egypt that COVID -19 will trigger hit are South Africa, Egypt that COVID -19Uncertainty will trigger USD60to below USD30 and USD60to below USD30 restrict business activities in the areas. in financial markets has implications for theand real and Algeria. global recession that could could and aa global recession that predicted to fall fall businesses to USD20 USD20 predicted to to OtherAlgeria. states across the nation are deploying curfews economy. When investors lose money and lose be worse than the global fibe worse than the global fiwhilst the yield on FGN 6.75% the yieldand on FGN 6.75% alongside work from home policy for both public and capital, spending bywhilst both individuals firms will drop, China, where the pandemic pandemic nancial crisis of ofand 2008-2009, China, where the nancial crisis 2008-2009, Eurobond issued at aa yield yield of Eurobond issued at of private sector organizations in order to curtail the spread value is lost in pensions and other institutional funds. first broke out has has today today been been but but with with aa hope hope of of recovery inhit its first out recovery in of thebroke disease. The price of oil lowest in 17to declining 7%, haslevel spiked toyears, 12.8%. In 7%, has spiked 12.8%. In declared wholly freehas ofvarying CO- impacts 2021. declared wholly free of CO2021. The pandemic naturally on different from $59 to $28 perresponse, barrel within a Central month as Bank aBank resultof of response, the Central of the VID19 bringing both ray some businesses sectors and industries.both Withinaa industries, lower demand and aNigeria, lack of coordination between OPEC VID19 bringing ray Nigeria, CBNhas hasnow now marked CBN marked willhope fare better others depending howagain, they are and Russia to reducedown supply.the Once again, theworld’s world’s econoof hope that than the virus virus can can be on Once the econoof that the be down the exchange exchange rate rate of of the the structured supply lines, internal processes and For the Nigeria, where USD revenue from oil production is 31% mies are witnessing witnessing the underfought toinaaterms haltof(not (not without mies are underfought to halt without USD for for NGN from NGN360 NGN360 NGN from distribution methods. of the 2020 budget to revenue and oil accounts for 90%to of belly of of globalization. globalization. Hand significant loss of of lives) lives) and and aa belly Hand significant loss to NGN376 NGN376 to NGN380 NGN380 to to foreign exchange - the effect of the sharp and persistent in hand hand with with opportunities opportunities specterof of the thehuge hugecosts costsof of the the in specter USD1. With With the the fall fall in in dedeUSD1. AVIATION, TRANSPORTATION & in oil price will lead to cuts in government spending and such as as access access to tofallboth both global mand attack of the the virus virus to to aa Nation. Nation. such global attack of mand from from China China and and Saudi/ Saudi/ TOURISM INDUSTRY net exports, two critical components of economic output. funding and and global global markets markets Russia there will will be be long long lasting lasting efef- funding IfIf there Russia price price war, war, Nigeria Nigeria isis Aviation and Tourism are naturally almost at a standstill due Reduced economic activity will also affect the performance for domestic domestic companies, companies, come reportedly fects ofgovernment the nature nature and quanfor come reportedly facingcostchallenges challenges fects of the and quanfacing to both bans and voluntary cancellations of of our deposit money banks whose of capital vulnerability to borderless borderless cri- as moving tum oftrips, antiseptics sprayed moving its crude crude atEurobond an acceptacceptvulnerability critum of antiseptics an business conferences,sprayed events, holidays, conferencesto has been raised the yield its on the FGNat and sisnow such as “imported” “imported” finan-corporate liberally, drugs Flights administered able price. price. sis such as finanliberally, drugs administered able and social activities. in most areas are restricted correspondently debt of Nigerian issuers also rise cial crisis and and now borderless We We appear appear headed headed back back to to to the victims victimsand and of the the near near cial crisis borderless to and of to the evacuations movements of medical personnel and now sharply. recession with with half half of of the the proprodiseases easily transported transported as as recession total shut down of personnel domestic diseases easily total shut of domestic supplies and down of security monitoring lockdowns,
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The Banking Industry is not just hit like others but must by EDUCATION SECTOR definition play a key role in the recovery of the economy. In a matter of weeks, coronavirus (COVID-19) has changed Accordingly, the Central Bank of Nigeria (CBN) has, in how students are educated around the world. Those conjunction with the Banking Committee announced a shopping. As we we all change change downat of of supplies supplies could of drugs, drugs, shopping. As all down of changes give us a glimpse how education change N50Bn Stimulus package comprising of loans to households our mode mode of work, work, school and manufacturing tools, proprofor school the better - and the worse - in the long tools, term. our of and manufacturing and working capital and term loans to MSMEs and SMEs. With theOnline coronavirus duction spreading across Asia, play, the rates Technology, Online duction rapidly equipment etc.Europe, from the Technology, equipment etc. from They have also implemented a reductionplay, in interest theGames Middle and East, United is States and lesson Africa, Education, Online Games and theChina China is aa huge huge lessoncountries on the the Education, on from 9% to 4% on all intervention funds to businesses. Online haveand taken swift and decisive actions to mitigateintethe imperative of backward backward inteDigital Technology and Netfimperative of Digital Technology NetfThe Minister of Finance already announced cuts to nondevelopment of a full-blown In thecontrol past weeks, grationpandemic. and having having control of lixfirm could be winners. winners. gration and of lix could be critical capital expenditure. Unless oil prices up, critical there have been multiple announcements and supply lines. With Withsuspending government expenditure like roads and other infrastructure spending supply lines. government closing schools and universities. will also take a hit. Our dollar reserves at Investment the Central Bank Lessons backing, local local manufacturers manufacturers Investment Lessons backing, of 28 March 2020, over 1.7 billion learners were out of of Nigeria (CBN) have dropped from $45It last year in should explore explore opportunities opportunities Itbillion essential inAsinvesting investing to should isis essential to school due to school closures in response to COVID-19. summer to $35 billion today. As a resultrecognize of the shortage to redesign redesign their their models. models. recognize the impact impact of of boom boom to the According to UNESCO monitoring, over 100 countries have in foreign exchange earnings, the CBN has “devalued” the As governments finally under(when luxuries like cars, perAs governments finally under(when luxuries like cars, perimplemented nationwide closures, impacting nearly 90% of naira from an official rate of ₦307 to ₦360 per dollar. The items, stand the the critical critical importance importance fumes, fashion items, holidays, stand fumes, fashion holidays, the world’s student population. dollar exchange rate for foreign investors was also changed of not theonlyentire entire health sector resorts and and cruises cruises thrive) andimpact of the health sector resorts thrive) and School closures students, teachers, and from ₦360 to ₦380. value chain chaineconomic particularly pharburstmarkets marketswhen when onlyessenessenparticularly pharburst only families, but have value far-reaching and societal maceuticals, medical investigamaceuticals, medical investigatials are required. This means tials are required.consequences. This means The devaluation, or as the CBN called it, realignment, has tions, equipment production tions, equipment your diversification decisions diversification decisions Although it is too early to judge how reactionsproduction to COVID-19 been praised by experts as it leads to theyour closer alignment and primary primary healthcare. The healthcare. must goallows beyond geographiwillgeographiaffect education and systems around the world, thereThe is a must go beyond between Nigeria’s multiple exchange rates. It also jected oil oil revenue in jeopardy, jeopardy, jected revenue in Nigerian government which possibilityversus of it having a lasting effect on the trajectory of Nigerian government which cal, asset class (equity versus cal, asset class (equity the Nigerian government to earn more naira from its and foreign foreign exchange exchange reserves reserves debt) and learning hasdigitization. traditionally invested invested very very has traditionally debt) and sectoral issuesinnovation to the the and issues to currently low dollar oil sales. One barrel of oil atand $30 sectoral now
under intense intense pressure pressure ifif the the nature under little in in health health and and education education nature of ₦9.2 the products products of of the the little of the gives the government ₦10.8 billion, an increase from Federal Government Government contincontin- companies Federal ENTERTAINMENT SPORTS clearly facing the the implicaimplicaisis clearly facing companies whose whose securities AND securities billion at ₦306. ues to tothis defend the Naira. ues defend The impact of the tions coronavirus on choices the global filmThe and tions of of such such choices now. The now. you invest invest in. This This way you enenWhile movethe will Naira. reduce the dollar required to meet you in. way you Everyone seems to be be countcountentertainment industries is significant and likely to grow Everyone seems to Central Bank of of Nigeria Nigeria has foreign exchange demands, it also has sure negative Central Bank has sure thateffects your entire entire portfolio that your portfolio affecting attendancesignaled at film festivals, cinemas, shows, ingNigeria’s losses as as economic economic activiing losses on equity and fixedactiviincome markets. With the signaled changing approach aa changing approach not losing losing at the the same time. time. isis not at same clubs and other public events. The industry may witness ties grind grind to aa halt, halt, businesses ties to naira losing value to the businesses dollar, foreign investors are moreerosion withits itsrecent recentdecision, decision,(as (aspart part The global global erosion of of value value with The production disruptions, delayed release of new films, face reduced reduced activities and inin- assets face and reluctant to holdactivities naira-denominated as such, of its its NGN3Trn NGN3Trn COVID19 COVID19 of onand account of aadisruptions major disasdisason account of major in distributions, as well as canceled premiers more inclined to sell offoperational their naira assets.ter comes yet higher higher operational comes yet economic package) package) and and workworkeconomic ter like like this this does does and notconcerts. erase the the not erase The financial impact will likely be felt by costs to to meet meet new new governgovern- underlying costs ing with the Bankers’ Commiting with the Bankers’ Commitunderlying intrinsic intrinsic value of value of studios, filmmakers, theater owners, and more for an COMMUNICATIONS INDUSTRY ment-imposed standards standards (e.g the ment-imposed (e.g tee,recently, to support support the country’s country’s tee, to the the stocks stocks of of well-run well-run compacompaextended period. Most the release of Wonder The term “Data is life” has become relevant in the forPublic Public Transporters, banks,morenies for Transporters, banks, leading pharmaceutical comleading nies with with viable viable products products and and Woman 1984 was delayed frompharmaceutical June to August, the comTokyo past months than it had ever been. The world at the shopkeepers) where where they’re they’re established shopkeepers) panies to import and produce panies to import and produce established demand over time. demand over time. Olympics until 2021. ,the Cannes Film Festival and all moment relies on global connectivity to access information not completely completely shut shut down. down. So not needed drugs, through FX fafaneeded drugs, FX So depressed prices offer an(football sporting events leagues, the through NBA, to mention a depressed offer an from individuals, businesses, organizations and nations of prices Restaurants, Clubs, Clubs, PlayPlay- opportunity Restaurants, cilities. Assuspended. initiatives like this this cilities. As initiatives like few )around has been However, the opportunity to invest invest againthe inworld to again in the world together. As state and local governments have grounds and and businesses businesses concon- companies grounds continue, expected that, indoor industry, games, Netflix and that, other itit isis expected companies with strong strongentertainment funda- continue, with fundaimposed lockdowns across the country, organizations sidered non-essentials non-essentials are shut shut sidered are inhouse/digital entertainment companies will thrive this this space space expected to in open this isis expected to open mental. deploying the “work from home” strategymental. have increased period. down. Others like banks banks are to to The down. Others like are up immediately. immediately. The current crisis likely to to up current isis likely their reliance on enterprise teleconferencing tools like suchcrisis maintain skeletalGoogle operations. maintain operations. bring in its wake wake an an acceleracceleras Microsoft skeletal Teams, hangouts and Zoom.in Schools bring its CONCLUSION Thechurches medical operatorsseveral are online Conclusion The medical are and are operators deploying platforms ated shift in intothe the way way we we work, work, Conclusion ated shift As nations we continue grapple with the containment of open out buttostruggling struggling to battle battle Asto the world continues tobattle battle open but to reach audiences. Since the pandemic, has the world continues to learn there and do do business. business. As we we As learn and As Covid-19, with its massive implications for public health and been an unprecedented surge in internetlearn traffic how use the huge huge humanitarian impact the scourge scourge with inadequate inadequate humanitarian impact the with learn howfrom effectively we we can can the effectively lives, businesses and individuals must also critically examine millions of homebound computer performance COVID19 pandemic, pandemic, the the ecoecoresources and at at great great risk users. to The resources and risk to work and learn learn the remotely, the COVID19 work and remotely, the impact of the pandemic on economic activities on both of companies like MTN and Airtel, nomicimplications implicationscannot cannotalso also life.telecommunication Demand for for luxury luxury goods nomic life. Demand goods potentials of of certain certain technolpotentials technola short and long-term basis. The impact is significant, and internet serviceitems providers, consumer technology social become evident. be overlooked. overlooked. In In managing managing be and fashion fashion items and groomgroomand and ogy products products ogy become evident. changes must be made. Investors must re-examine the platforms such as Instagram and Zoom and entertainment the to adverse fallouts, markets the adverse fallouts, ing has has naturally naturally dropped dropped as as This ing This could could be be aa sectors good time timeare toexposed good to they and rebalance their markets portfolios platforms like DSTV and Netflix is expected to increase. and investors investors must tocritically critically and must people tackle tackle existential existential issues issues people investmore morein inVPN, VPN, onlineededinvest online accordingly. New investors are encouraged position examine theeducation, opportunities for the opportunities for ucation, artificial artificialforintelligence intelligence ucation, the few positive examine fallouts in the technology, MANUFACTURING INDUSTRY realignment of investment prirealignment of investment priAre there any Winners at Are there any Winners at and digital technology. indoor-entertainment and health and pharmaceutical and digital technology. Factories across the world are experiencing a slow-down. orities, asset asset allocations allocations and and of of all? industries all? Forward looking companies orities, Forward looking companies In China, where the coronavirus first appeared, industrial government budgetloss spending. government budget spending. On the and flip reside, significant revenue in many The pharmaceutical pharmaceutical industry, The industry, may look at harnessing and re- the look harnessing production, sales and investment all fellmay in the firstat two The Emerging Emerging Africa Capital The Africa Capital sectorsgains is already the cashflows of businesses, laboratories, medical equiptaining the efficiency gains of impacting laboratories, medical equipefficiency of months of the year, compared with sametaining period inthe 2019. which is their by lifeblood. Without to new cash, such Group leading African Group isisaccess aa leading African ment,makes home delivery food, globally remote and flexible working by ment, home delivery food, remote flexible working China a third of manufacturing andand is the businesses are at risk. Intervention offered by the provider of funds Capital Raising, provider of Capital Raising, food marts, marts, supermarkets and reducing reducing office office space, space, physical world’s largest supermarkets exporter of goods.and food physical CBN as wellutilias rate cuts on specialized funds will hopefully Wealth Management, Trusts Wealth Management, Trusts The most direct hit will come from theconsumables, restrictions on power drugs and toilet-ware stores consumables, power and drugs and toilet-ware stores and utilioffer some relief for qualifying businesses. and Asset Asset Management SerSerand Management movement around the world and dein Nigeria. The shutdown ties. are experiencing experiencing huge deties. are huge vices. The huge huge impact impact of of the the shutshut- vices. mand. Due Due to to panic panic and and binge binge The mand.
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BUSINESS DAY
Wednesday 01 April 2020
COPING WITH LOCKDOWN
Lagos, Abuja economy grounded as presidential directive takes effect OLUSOLA BELLO, JOSHUA BASSEY, AMAKA ANAGOR-EWUZIE, Lagos, & TONY AILEMEN, Abuja
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agos, Nigeria’s buzzing commercial city with an estimated population of 22 million people, was a near ghost town on Tuesday, March 31, as the presidential 14-day stay-at-home directive to contain the Covid-19 pandemic came into effect. Economic and social activities were indeed grounded in total compliance with the directive, as citizens remained indoors amid fears that the spread of the killer virus could get worse in days ahead. The situation was the same in Abuja, the nation’s capital, where public and private offices, business premises, markets and malls remained shut. Major roads in both cities were devoid of the usual traffic congestions as vehicles disappeared, except a few seen on essential duties. Security and safety personnel drawn from the police, army, civil defence, neighbourhood watch and Federal Road Safety Corps were all over the cities. They
were seen at multiple checkpoints along major roads where they stopped and demanded identification from occupants of vehicles on essential services. The empty streets, however, provided the opportunity for youths who engaged in football. In Alimosho area of Lagos, almost all the shops were locked. However, market women selling foodstuff were seen in their numbers at the popular Ijesha Market. “I had to trek from my house to the nearest gas depot on our road to refill my cylinder this morning to cook for my children. There was no motorcycle (Okada) or tricycle (Keke) because they have all shut down,” said Aishat Yusuf, a middle aged woman. She worried that the greatest challenge with the lockdown will have to do with having enough food at home for the two weeks. Ade Suraji, an Okada rider, expressed the concern that the lockdown will put him out of business for the next 14 days and this will impact on his family’s welfare. “Government said we should stay at home for 14 days without telling us how
to survive or feed our children. What I see is that hunger would kill many of us before Coronavirus get to us,” said the father of three. Fuel tankers were, however, seen on major roads heading for Apapa to lift petroleum products. Filling stations and tanker drivers are among those exempted from the lockdown. At one of the filing stations, an official who spoke to BusinessDay decried low patronage. According to the official, it is contradictory asking people to stay at home and expecting the filling stations to open. Only three filling stations were open to the public on the stretch of Alapere leading to the old tollgate through Ojota and Ikorodu road to Alaka. Other filling stations barricaded their entrances. It was observed that the few that opened for business recorded very low patronage. In Abuja, security operatives were seen on major streets and highways to enforce the directive restricting movements of people and vehicles. The FCT enforcement team headed by Atta Ikha-
ro was also seen moving around major parts of the capital city to enforce compliance. At the Kuje area council, a team of police officers working with the Police Community Relations Committee (PCRC) carried out a joint enforcement plan. They had moved around Kuje town in the early hours to sensitise the community on the need to comply with the lockdown directives. President Muhammadu Buhari had on Sunday ordered lockdown on Lagos, Ogun and FCT. While the lockdown on Lagos and FCT took effect from 11 pm of Monday, Ogun will join on Friday. President Buhari had followed up on Monday with the signing of the Covid-19 Regulations, 2020, giving legal backing to the various measures outlined in his national broadcast on March 29, 2020. By 2pm on Tuesday, the number of confirmed cases in Nigeria had risen to 123. Lagos is leading with 81; Abuja-25; Ogun- 4, Enugu-2, Ekiti- 1, Oyo- 8, Edo- 2, Bauchi- 2, Osun-5, Rivers-1, Benue- 1,and Kaduna- 3.
Obafemi Awolowo Road Ikeja to Computer Village in Lagos deserted on Tuesday. Pic by Olawale Amoo
How to contain COVID-19, by Chinese doctors ANTHONIA OBOKOH
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number of elite Nigerian doctors w e re p rov i d e d key lessons by a team of Chinese doctors on how they have managed to contain the deadly coronavir us pandemic courtesy of the International Finance Corporation. COVID-19 is prevalent over most countries in the world. In Africa, it has affected about 48 out of 54 countries, including Nigeria. Since Nig er ia’s first case was announced on Februar y 27, 2020, the cases have continued to rise, reaching 135 as at March 31, according to the current data from the Nigeria Centre for Disease Control (NCDC). The NCD C says it is tracing over 6,000 people that have contacts with confirmed cases of the c o ro n av i r u s e p i d e m i c (COVID-19) as it has so far tested about 600 people. The lessons offered by a webinar began with a presentation by Dr Jifang Sheng, director of infectious diseases at the first affiliated hospital of Zhenjiang University School of Medicine, FAHZU and m e mb e r o f t h e e x p e r t team for COVID-19. Sheng highlighted effective screening and isolation as key points in managing COVID19, noting that hospitals must do well to avoid contamination of patients and their families and friends. “Firstly, each hospital should have well organised entry and exit procedures and should be particularly careful with pregnant patients,” Sheng
said. He suggested that hospitals must train their staff including ambulance attendants and ambulance must be decontaminated once after each use. “Doctors should avoid misdiagnosis and hospitals should give enough rest and help to their staff at times like this,” Sheng advised. Ajibike Oyewunmi, director of quality and patient safety at Lagoon Hospital, Lagos, and consultant to IFC, provided the Nigerian perspective, stating that Lagoon was quick to activate its disaster planning which was first tried during the Ebola crisis. “The hospital has ramped up procurement of personnel protection equipment and does screening of incoming patients at the entrance while those with fever, chest symptoms and travel history are quickly isolated,” Oyewunmi said. “ L ag o o n ha s p rov i d e d its expertise to the Lagos State government’s coronavirus effort.” Junwei SU, one of the Chinese doctors, in answer to a listener’s question, said it was critical that all Covid-19 sufferers are cared for in isolation in hospital to prevent the spread of the disease. “COVID-19 is very powerful in transmission and no effort should be spared in isolating and treating patients in designated hospitals to protect the general population,” she said. Meanwhile, FAHZU has processed about 1,300 coronavirus patients and has so far recorded no death.
Police say ID not enough for essential workers as Lagos commences lockdown SEGUN ADAMS
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arely 24 hours into lockdown, law enforcement officers in Lagos have begun ‘harassing’ essential services workers over the interpretation of the conditions under which certain individuals are to be exempted from the statewide curfew. According to Lagos Commissioner of police Hakeem Odu-
mosu, who spoke on TVC Monday, workers in essential services must prove that they are on duty in addition to providing their identity cards to be allowed on the road. “…the fact that I am a doctor, police man or journalist, am I on duty?” said Odumosu, casting uncertainty over how essential workers, even with proper identification, can carry out their muchneeded duty amid the COVID-19 pandemic. “ID only tells us who you are www.businessday.ng
and where you work,” he said. The new criterion by the police casts ambiguity and creates room for abuse of power. It also differs fundamentally from the president’s directive. President Muhammadu Buhari in his address on Sunday declared a 14-day total lockdown in Lagos, Ogun and Abuja – the worst-hit state by COVID-19 – but said essential workers would be allowed to continue operation although there were certain conditions on
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some categories of workers. No condition required essential workers to prove they were on duty. In his address, President Buhari said the order does not apply to hospitals and all related medical establishments as well as organizations in health care related manufacturing and distribution. Furthermore, he said, commercial establishments such as; food processing, distribution and retail companies; petroleum @Businessdayng
distribution and retail entities, power generation, transmission and distribution companies; and private security companies are also exempted. “Although these establishments are exempted, access will be restricted and monitored.” While Workers in telecommunication companies, broadcasters, print and electronic media staff who can prove they are unable to work from home are also exempted.
Wednesday 01 April 2020
BUSINESS DAY
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tax issues Is the Attorney General of the Federation Nigeria’s new taxman? (1) Basirat Mutairu
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Nigeria. The said powers are then delegated on the AGF as the Chief Law Officer of the Federation, thus, empowering it “to review and investigate infractions against all the laws of Nigeria.” Therefore, the AGF argued that he has power to investigate and prosecute all defaulters in relation to duties to pay taxes, levies and duties that are imposed by extant Nigerian laws. Based on the foregoing, it is relevant to review the sacrosanct issues raised in the preceding paragraphs, to wit; the constitutional powers of the President as the head of the Executive arm of Government and its administration thereof, and whether the President did delegate these powers as alleged. This article will therefore examine the legality of the powers of the AGF to carry out this exercise or administer other legislative provisions on tax administration in Nigeria and the desirable standard practice. Constitutional powers of the President as the head of the Executive and the authority to delegate Section 5 of the 1999 Constitution of the Federal Republic of Nigeria (as amended) (‘CFRN’ or the ‘Constitution’) vests the executive powers of the Federation on the President. The section further prescribes that these powers may be “exercised directly by him or through the Vice-President, Ministers of the Government of the Federation or officers in the public service of the Federation.” The powers may be exercised in respect of all laws www.businessday.ng
made by the National Assembly and all matters with respect to which the National Assembly has power to make laws. Particularly, section 148 of the CFRN stipulates that “the President may in his discretion assign to the VicePresident or any Minister of the Government of the Federation, responsibility for any business of the Government of the Federation including the administration of any department of government.” The AGF occupies the dual office of the Minister for Justice. As a result, he is a person to whom the powers of the President as aforesaid can be delegated under section 148 CFRN. The pertinent question to ask is whether this power was in fact delegated by the
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Based on the foregoing, it is relevant to review the sacrosanct issues raised in the preceding paragraphs, to wit; the constitutional powers of the President as the head of the Executive arm of Government and its administration thereof, and whether the President did delegate these powers as alleged
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Introduction n recent times, the Attorney General of the Federation (AGF) acting on behalf of the Federal Government of Nigeria (‘FGN’) issued Notices similar to Notice of tax audit/investigation to certain high-profile companies requesting them to show compliance with statutory requirements, payment of certain taxes and import duties owed to the FGN. The AGF via this action sought to recover taxes payable on visible and invisible transactions to wit; Withholding Tax (WHT), Value Added Tax (VAT) and Import Duties. The companies were required to turn over documentary evidence showing complete and effective discharge of their said statutory obligations. Many commentators have faulted this intervention by the office of the AGF especially as it had deviated from the traditional role of that office and apparently reached into the jurisdiction of other agencies of government. Essentially, the most notable criticism was the question of legitimate authority, bordering on whether the AGF could validly carry out this exercise in the circumstance that relevant statutory oversight for administration and collection of taxes/levies had been vested by legislation on agencies such as the Federal Inland Revenue Service (FIRS), Nigerian Customs Service (NCS) and the likes, respectively. From news reports on the matter, Nigerian telecommunication giant, MTN Nigeria Communication Limited (MTN) was one of the companies that received these Notices. The AGF alleged that the company owed about $2billion in outstanding tax revenue to the Government of Nigeria. MTN eventually instituted an action at the Federal High Court Lagos challenging the authority of the AGF to carry out the exercise. In the action, MTN requested the court amongst other reliefs sought, to declare the AGFs’ action as illegal and subsequently vacate the alleged outstanding tax liabilities. The AGF in its response filed in court posited that its powers to conduct the exercise stems from the provisions of the Nigerian Constitution, which vests all executive powers on the President of the Federal Republic of
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President to the AGF. The AGF in his pleadings in court did not put forward any document or instrument evidencing delegation. Thus, it is not unreasonable to assume there was no such delegation. By extension, the Minister of Agriculture may in the future, while purportedly acting on behalf of the President also conduct a tax audit by virtue of being a Minister of the Federation. To veer off this point of absurdity, it is imperative to take note of the provisions of section 174 of the Constitution which speaks exclusively to the powers of the AGF and is reproduced below: “174(1) The Attorney-General of the Federation shall have power - (a) to institute and undertake criminal proceedings against any person before any court of law in Nigeria, other than a courtmartial, in respect of any offence created by or under any Act of the National Assembly; (b) to take over and continue any such criminal proceedings that may have been instituted by any other authority or person; and (c) to discontinue at any stage before judgement is delivered any such criminal proceedings instituted or undertaken by him or any other authority or person. (2) The powers conferred upon the Attorney-General of the Federation under subsection (1) of this section may be exercised by him in person through officers of his department. (3) in exercising his power under this section, the Attorney@Businessdayng
General of the Federation shall have regard to the public interest, the interest of justice and the need to prevent abuse of legal process.” The above section clearly outlines the roles of the AGF in the administration of justice and this may serve to explain the intention of the drafters of the Constitution. Furthermore, the Latin phrase “expression unius est exclusion alterius” a statutory construction which implies that where one or more things of a class are expressly mentioned, others of the same class are excluded serves to provide additional clarity. The Supreme Court also echoed this view in Attorney General of Lagos State v Attorney General of the Federation by stating that “express mention of one thing in a statutory provision automatically excludes any other stipulations which would otherwise have been applied by implication.” While the constitution is not a statutory construct, notwithstanding, the decision of the learned Justices will serve to properly highlight the dysfunction inherent in this matter. By categorically stating the powers of the AGF, other blanket roles which may be assumed stands eroded by the provision. Additionally, the AGF ought to take into consideration, the provision of sub-section (3) cited above in exercising its powers, and, usurping the powers of duly established government agencies as in this case is not in that interest. Legislative provisions on tax administration The notable taxes queried by the AGF are: Withholding tax, Value Added Tax and Import duties- which are ordinarily collected by the FIRS and the NCS. Section 2 of the Federal Inland Revenue Service (Establishment) Act (FIRSEA) stipulates that the FIRS “has the objective to collect, administer and account for taxes listed in the First Schedule to the Act.” By implication, the duty and authority to administer the Companies Income Tax Act (which is the basis for the imposition of WHT) in this instance and Value Added Tax Act rests on the FIRS. To emphasize the importance of this duty, Section 25 of the same Act reiterates the powers of the FIRS to administer the taxes. Basirat Mutairu, Deal Advisory, Mergers & Acquisitions - Tax KPMG Advisory Services
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Wednesday 01 April 2020
BUSINESS DAY
Corporate governance
COVID-19: Corporate governance and business sustainability Olayimika Phillips
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he recent outbreak and rapid global spread of the Coronavirus Disease (Covid-19) has without a doubt had devastating effects on the global economy. Away from the increasing daily reported deaths, many companies have had to shut down operations or transition to remote working either as a precautionary measure or due to government directives. As a ruinous outcome, millions of employees have been rendered redundant, with several employment relationships terminated or placed on hold. Generally, there is a palpable feeling of panic amongst both employers and employees as they face an uncertain future as the full but eventual impact of the pandemic remains to be seen. These events have brought to the fore the compelling importance of business continuity and succession plans in the administration of businesses. Understandably, while a lot of focus is being placed on the pandemic and the resulting fallout, there is a key lesson to be learnt from a corporate governance perspective which has itself been severely impacted by Covid-19. The administration of most companies has grounded to a screeching halt, due to inability to hold meetings: general, board, committee and/or management, which are crucial to chartering a course through the present crisis. Thus, the actions of the board of directors (the Board) in preparing for times such as this becomes very important. Essentially, the Board being perhaps the most critical organ of a company due to its responsibility for overall management, steerage and financial performance should have developed certain policies and plans which include the business continuity plan and business succession plan. Developing a business continuity plan is very important for every company and is a key objective of the Board. A continuity plan helps a company to anticipate, prevent, mitigate
and manage risks that comes with disruptions to operations during the period of emergencies such as this. Whilst some dire circumstances such as recessions, economic meltdowns and political instability are typically reasonably foreseen, they may sometimes be unforeseen when ride the tide of epidemic or disease outbreaks and could cause untold hardship and even result in the demise of the company. A continuity plan does not only provide a company with steps that would be taken to respond to risks occasioned by an emergency, it also helps to make the company resilient having planned ahead for its sustainability and viability notwithstanding the surrounding circumstances. Beyond this, the presence of a continuity plan ensures that a company’s obligations to stakeholders especially its customers and employees continue to be met, despite any emergencies. Vitally, a company should not wait until the occurrence of an emergency before developing a business continuity plan. The plan, which will have trigger events, ensures that the operations of the business continues to run as a cohesive whole. Depending on the nature of the company’s business, such plans would typically address remote working, virtual meetings, alternative means of providing services, issues www.businessday.ng
of employee compensation where the business has to shut down, among other key drivers for the business to ensure that any disruptions are kept to the barest minimum. Research has however shown that many companies do not have continuity plans in place. The outbreak of Covid-19 should therefore serve as a reminder of the need for the Board to quickly develop a business continuity plan. Undoubtedly, the advantages of having a continuity plan are numerous as it also affords a company the immediate flexibility and adaptability required during an emergency. In addition, the ability of a company to run its affairs with minimal operational disruption during an emergency
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A proactive board should thus have in place business continuity and succession plans to manage the risks and disruptions that these emergencies could cause
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goes a long way in attracting and retaining investors’ confidence. In addition, it gives the company a competitive edge over its competitors who were unprepared or unable to function during the period of the emergency. Furthermore, another key plan to be developed by the Board is a succession plan to manage the risks associated with loss of personnel due to such emergencies. It is not unlikely that members of the Board or senior management may be unable to discharge their duties to the company due to infection from Covid-19 or even travel restrictions as a result of the pandemic. Such a real possibility, if not properly managed, may impact the company negatively particularly with respect to market competitiveness and business continuity. It is for this reason, amongst others, that the Board should have a succession plan in place. A succession plan would ensure that the company is always well managed and directed at all times even in the event of change in the membership of the Board, and also ensure that there is no leadership vacuum in the company. In addition, the presence of a succession plan can also impact the ability of a company to attract investment as investors are usually interested in knowing the succession plan in making investment decisions. @Businessdayng
It is important to note that in developing a succession plan, the Board should address certain points, including promotions, qualifications, training and retention of younger staff, determining vacancies to be filled from internal promotions and those to be sourced externally. Furthermore, it is crucial that key roles such as the Chairman and Managing Director have suitably qualified and experienced understudies who may be able to step in when needed. Undoubtedly, having a succession plan would guarantee a seamless change of leadership. It is for this reason that the importance and need for succession planning is codified in the Nigerian Code of Corporate Governance, 2018 (the Code) which emphasizes the role of the Board in establishing and implementing the succession plan. Crucially, the Code mandates the Board to make provisions for succession in emergency situations. In conclusion, businesses are often confronted with internal, external, micro or macroeconomic emergencies which could cause untold hardship and result in total shutdown. A proactive board should thus have in place business continuity and succession plans to manage the risks and disruptions that these emergencies could cause.
Olayimika is a Partner in the law firm of Olaniwun Ajayi LP and has over 34 years of professional experience. She specializes in corporate governance, providing pragmatic solutions to the diverse challenges which confront corporates at different growth stages and serves on the board of several companies (listed and privately held).”
Wednesday 01 April 2020
BUSINESS DAY
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Wednesday 01 April 2020
BUSINESS DAY
news MTN to push ahead with Nigeria IPO... Continued from page 1
The ever busy Mile2/Oshodi Expressway in Lagos deserted on Tuesday in compliance with the Federal Government lockdown order Pic by Pius Okeosisi to curb the spread of the coronavirus in the country.
Coronavirus: Buhari’s lockdown... Continued from page 1
the virus has surpassed 130 and there are possibilities that the number may hit 39,000 in the coming weeks if good social distancing is not observed by the public, Akin Abayomi, Lagos State commissioner for health, said. Meanwhile, the Federal Government on Tuesday announced plans to open additional test centres in Kaduna, Kano, Maiduguri and Sokoto States in continuation of its containment strategies. Osagie Ehanire, minister of health, who stated this in Abuja at the second briefing of the Presidential Task Force on Coronavirus, reiterated that all tests are at no costs to any individual. He also disclosed that results from the monocular labs would be recognised as genuine by the Federal Government. Ehanire said additional efforts were being put in place to support the current efforts, adding that already, hundreds of ad hoc staffs have been recruited while retired NCDC staff have also been recalled to strengthen the current efforts to halt further spread of the virus. While a lockdown has become a global best practice, analysts say it may create a ripple effect on residents of Nigeria’s commercial hub. Lagos residents who have been forced to stay at home will struggle to have regular electricity to preserve their food or watch favourite programmes on television. Many will rely on gen-
erators and will run out of cash in two weeks, Onyeka Okechukwu, a small business owner, said. Many may not have regular cash supply as pressure on ATMs crowds out many families in need of cash. A lot of families will struggle to feed as the Lagos State government’s food supplies remain limited to 200,000 households. Buhari’s Government Enterprise and Empowerment Programme (GEEP) stimulus may not work as it relies mainly on the operations of businesses to work. In Italy, Spain, the UK, the United States and other countries where lockdown is in place, families are provided with food to dissuade them from trooping outside. The US President Donald Trump has pushed $1.2 trillion stimulus to enable families get direct payments of $1,000 and above within two weeks. Nigeria has almost 100 million extremely poor people, some of whom live in Lagos. Nigeria could have resorted to the use of Point of Sale (POS) transactions, but that would not be possible since retail businesses are not expected to operate in the state. “There will be a lot of social stress,” Muda Yusuf, director-general of the Lagos Chamber of Commerce and Industry (LCCI), said. “We have quite a large number of population that lives on daily income. What we could have done
is cash transfer. In Lagos, almost 80 percent of the people have bank accounts. When you do transfer, which is a better and wider framework, you let people determine what their priorities are,” Yusuf said. He explained that the country has not done well to those who are vulnerable. Data from the Nigerian Interbank Settlement System (NIBSS) show that the volume of POS transactions stood at 41.3 million in January 2020, a drop by 4.83 million from the N46.13 million in December 2019. Similarly, the value of POS transactions fell from N372.68 billion in December 2019 to N313.42 billion by the end of January 2020. The decline was despite the number of registered PoS terminals by the banks increasing from 446,453 to 449,998 within the same period. Sick patients may be endangered as transportation and logistics to hospitals become very difficult. Also, lack of any means of transportation would also add to the growing list of problems as workers on essential duties without their own cars struggle to get to their areas of assignment. “I understand lockdown is a good way considering the way the virus is spreading, but I think government has to come up with more palliative measures to make life easy for people that would stay at home,” said Moses Hammed, a research analyst at financial services firm, Investment One. “Where people are
asked to stay at home and don’t have anything to do, you might see crime rate increasing,” he said. Many Lagos residents won’t have access to clean water this period. They rely on boreholes and now expensive packaged water. The water needs of Lagos are put at over 700 million gallons per day. The state has capacity of a little over 200 million gallons per day, but actually produces and distributes between 145 to 150 million gallons each day from its facilities, leaving a huge gap of over 500 million gallons, according to Lagos Water Corporation (LWC). The Manufacturers Association of Nigeria (MAN) advises the government to extend tax holiday to companies on corporate tax, and waive the Value Added Tax (VAT) after the lockdown while reducing the burden of personal income tax as a way of increasing the disposable income of an average Nigerian worker. Wale Olusi, head of research at United Capital, said the lockdown would restore Lagos economy, citing the lockdown of Wuhan as an example that it is not totally wrong. “I do not think the government is happy enforcing the lockdown seeing how much the country is losing, but we need to flatten the curve as we can’t afford to allow what is happeni ng in other countries to happen due to the fact that we do not have the required number of bed spaces, neither do we have the health care system that can contain the pandemic of this scale,” he said.
MTN is disposing of part of its largest division after a series of disputes with Nigerian authorities, most recently over tax payments and the withdrawal of cash from the country. The plan is to sell about a 15 percent stake to local investors, reducing MTN’s ownership to about 64 percent. MTN Nigeria Communications Ltd was listed in Lagos last year, and is the country’s second-biggest publicly traded company with a market capitalisation of $4.8 billion. Nigeria is MTN’s biggest market, accounting for a third of overall 2019 revenue and almost 40 percent of earnings before interest, taxes, depreciation and amortisation. The Johannesburg-based company is also the biggest provider of telecom services in the country, with almost 69 million customers, according to the Nigerian Communications Commission (NCC). The drastic fall in oil prices, hurting major producers including Nigeria, and the outbreak of the coronavirus have weighed on MTN’s share price, which hit 15-year lows last week. The stock has since rallied for six straight days, and traded as much as 21 percent higher in Johannesburg on Tuesday – the biggest jump in two decades.
MTN Nigeria shares traded in Lagos are down some 20 percent this year, and close at N90 per share on Tuesday. The benchmark Nigerian All Share Index has returned -31 percent in the past year. “We of course have no visibility on how all of this could play out, but the business currently has a resilient balance sheet and is highly cash generative, with most of our business coming from pre-paid contracts,” Mupita said. MTN’s cash position was bolstered by the sale of 14 billion rand in assets last year, including stakes in telecom-tower companies in certain African markets. Some of that was paid in dollars, which provides a currency hedge against the weakening rand, the CFO said. MTN also has a credit facility that can be accessed if needed, he added. MTN expects an increase in data usage as more and more of its markets go into lockdown due to the outbreak of the coronavirus. MTN said earlier this year that it had committed to investing the sum of $1.6 billion in its Nigerian operations to strengthen its network and systems. “We want to make sure that our networks have resilience and capacity,” Mupita said. “We are looking at where we can drive broader coverage.”
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run actively. It takes only handful to start a dangerous rumour. Though 135 people in Nigeria have been infected with the coronavirus and two people have since died, many Nigerians still think the virus is a hoax designed to siphon public funds. Social media platforms by their nature are potent in transmitting information to a global audience in real time. Once the broadcast media was hailed for its speed and immediacy but in the age of social media, it is crawling. The lack of gatekeepers ensures that the audience is fed information that is not subjected to the refining process media houses subject news. “The 2019-nCoV outbreak and response has been accompanied by a massive ‘infodemic’ – an over-abundance of information – some accurate and some not – that makes it hard for people to find trustworthy sources and reliable guidance when they need
it,” says the World Health Organisation (WHO). Due to the high demand for timely and trustworthy information about Covid-19, WHO says its technical risk communication and social media teams have been working closely to track and respond to myths and rumours on social media channels (including Weibo, Twitter, Facebook, Instagram, LinkedIn, Pinterest). Some social media companies say they are fighting back by demoting rumours and elevating posts from respected sources. Facebook, for example, claims users see on average only 10 percent of their news feed. But the efforts are complicated because even respected sources sometimes tweet or publish false information and online blogs and news sites who source news from these tweets further the lie. Bots and fake accounts mirror real ones in design and undiscerning people believe this information.
Wednesday 01 April 2020
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Coronavirus: Edo condemns arbitrary hike in prices of food items, begins monitoring
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he Edo State government has warned traders and sellers of food items against being insensitive to the plight of residents by hiking the price of food items and other household essentials as fallout of measures by the state government to contain the spread of the coronavirus (Covid-19). In a statement, permanent secretary, Ministry of Wealth Creation, Cooperatives and Employment, Joel Edionwele said it is unfortunate that some citizens were exploiting the national public health concern caused by the coronavirus outbreak to make gains. Edionwele disclosed that to ensure the safety of all residents, the state government has commenced monitoring of prices of essential commodities throughout the state, adding, “Any person found to be anti-government or the people will be treated according to the law.” The statement read, “The general public is hereby reminded that COVID-19 pandemic is a global phenomenon and therefore calls for sacrifice and lending support to the most vulnerable in the society. “In Edo, the state government under the leadership of Governor Godwin Obaseki
has put measures in place to ensure that citizens are safe and are able to pull through this period with minimum discomfort. “In spite of this effort of government, it is sad to note that some citizens are making life unbearable for others by arbitrarily increasing the prices of food items like sachet water and other household items.” Edionwele continued, “We must all endeavour to assist in any way possible to reduce the hardship that may be associated with the restriction in movement. It is in this regard that the Edo State Government wishes to appeal to traders and sellers of food items and household essentials to refrain from exploitative tendencies. No citizen should cash in on this period for any reason.” “To ensure the safety of all, the state government through the Ministry of Wealth Creation, Cooperatives and Employment and its agencies has commenced monitoring of prices of essential commodities throughout the state. Any person found to be antigovernment or the people will be treated according to the law. Citizens are encouraged to report any person engaged in profiteering to the ministry or the Police,” he added.
Coronavirus: Edo tasks regulatory agencies on authentic drugs to manage pandemic IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin
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do State government has urged all drug regulating agencies in Nigeria to ensure that only authentic and effective drugs are used in managing the novel coronavirus (COVID-19). The state governor, Godwin Obaseki, gave the charge in commemoration of the International Drug Checking Day, marked every March 31. Obaseki listed some of the drug regulating agencies to include the National Agency for Food Drug Administration and Control (NAFDAC) and the Standards Organisation of Nigeria (SON). According to Obaseki, while there is no authorised drug with concrete evidence to treat the new virus yet, relevant agencies of government must intensify efforts at protecting citizens from fake and substandard drugs, which litter the market with promise to cure the virus. “While medical experts and scientists battle to produce the
right drugs to remedy this public health crisis, some unscrupulous elements have flooded the streets and markets with shadowy therapies and drugs for cure. This is abysmal and unfortunate. “As we join the rest of the world in marking the International Drug Checking Day, it is imperative that we ensure people are educated on drugs and made aware of their effects, especially now that the entire world is being ravaged by COVID-19,” he said. The governor said COVID-19 pandemic is a wake-up call to all drug regulating agencies such as NAFDAC, SON, the National Institute for Pharmaceutical Research and Development (NIPRD) and Pharmacists Council of Nigeria (PCN), among others, to ensure that only verified and authentic drugs were made available for public consumption. While condemning the indiscriminate consumption of
… acquires 25 ventilators chloroquine, he assured that the state government would work with the State Ministry of Health, Nigeria Medical Association (NMA) and pharmaceutical associations to immediately swing into action to reach patent medicine stores to regulate the sale of medicines, especially chloroquine. He however, advocated increased awareness on drug usage and checking as well as the sensitisation and knowledge sharing to further empower more Nigerians to make informed decisions about their health and safety. The governor said the International Drug Checking Day was celebrated yearly to raise awareness regarding drug checking. He noted that drug checking is a harm reduction practice that helps drug users avoid ingesting potentially more dangerous adulterants found in street drugs. He further explained that drug checking services also
assist emergency medical professionals and public health agencies in identifying trends in illicit drug markets, so they can better serve the needs of the community. Meanwhile, the state government has so far acquired 25 ventilators for the management of the virus. Ventilator is used to support COVID-19 patients whose lungs may have been attacked by the disease. The state deputy governor, Philip Shaibu, made this known on Monday during a press briefing by the state COVID-19 response committee at Government House in Benin City. “We are also working to increase the number of ventilators and other equipment in our isolation centres. “At the moment, we have received additional 12 ventilators today bringing the total to 25 ventilators at the isolation centreS in Stella Obasanjo Hospital and also in Irrua and Auchi centres,” he said.
BUA redeems N1bn pledge to CBN …provides additional N300m to Edo, Sokoto, Ogun for Covid-19 relief support
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UA has redeemed its pledge of N1 billion to the fight against COVID-19 in Nigeria by way of a confirmed funds transfer to the COVID-19 relief fund account with the Central Bank of Nigeria. In addition, the company also announced another donation of N300 million to Sokoto, Edo and Ogun states to assist in galvanising a coordinated response and adequate preparedness in the fight against the COVID-19 pandemic in these states. The donations to Sokoto and Edo states were on behalf of its cement subsidiary, BUA Cement, which has its major operations in those states, while Ogun was also selected as a beneficiary due to its proximity to Lagos, which had been the epicentre of the virus in Nigeria. This development comes exactly a day after the chairman of the Group, Abdul Samad Rabiu, announced a cash donation of N1 billion to Nigeria’s response to the virus and also, another do-
nation to nine states for medical and emergency kits and supplies including face masks, testing kits, safety goggles, gloves, personal protective gear - which have already been ordered and should be delivered soon. In his comments on the additional donation of N300 million to Edo, Sokoto and Ogun states, Rabiu said although these states had been identified for this intervention in the first instance, “BUA is monitoring the situation closely and is also looking at other states that may need additional help. We will continue engaging with these states and relevant partners including the NCDC in the areas where they need support to win this fight against COVID-19.” Rabiu also urged other wellmeaning Nigerians – individuals and corporates alike, to join hands in supporting the efforts to put the virus in check in Nigeria, financially and otherwise. “Our country needs us now more than ever. This is the time to come together and support.”
Obaseki appoints Okungbowa as new Head of Service
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do State governor, Godwin Obaseki, has approved the appointment of Anthony Osas Okungbowa as the state’s new Head of Service. This followed the retirement of the former Head of Service, Isaac Ehiozuwa, after the mandatory 35 years of service. In a statement, Secretary to the State Government, Osarodion Ogie, said, “This is to inform the general public and in particular Edo State Public Service that with the retirement of Mr Isaac Ehiozuwa as Head of Service,
following the mandatory 35 years of service, His Excellency, Mr Godwin Nogheghase Obaseki in exercise of his powers under Section 208 of the Constitution of the Federal Republic of Nigeria 1999, has approved the appointment of Mr Anthony Osas Okungbowa as Head of the Civil Service of Edo State.” Ogie said Anthony Osas Okungbowa is a serving permanent secretary in Edo State Civil Service, adding, “This appointment takes effect from 1st April, 2020.”
Lockdown at Airport Road going to Ile Zik along Lagos Abeokuta Expressway, Lagos, yesterday.
COVID -19: Kano commissioner makes case for media inclusion in palliative support Adeola Ajakaiye, Kano, & REMI FEYISIPO
… respect journalists as essential service providers, Oyo NUJ cautions security
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Aliko Dangote, to establish a 600-bed isolation centre in Kano State. “The state government is aware of the tremendous impact that the pandemic is having on the economy general, particularly, the media sector, and we are looking at a way of providing palliative to some of the radio and television houses operating in the state,” he stated. Governor Abdullahi Ganduje announced the philanthropist’s gesture at the inauguration of a 37-member fundraising committee set up to provide succour to the vulnerable in the state. Governor Ganduje said the isolation centre to be established by Dangote would be established at the Sani Abacha Stadium, Kofar-Mata in Kano metropolis. The governor noted that the
ano State commissioner for information, Mohammed Garba, has suggested the need for the media sector to be included in the palliative support the Federal Government is rolling out to businesses affected by COVID-19 pandemic. Garba observes that there is the need for governments at all level to support the media because of the negative impact pandemic is having on the sector. The commissioner made the observation on Monday, at a day workshop entitled ‘COVID-19: How Prepared is the Media in Handling Disaster’ organised by the Kano State Council of Nigeria Union of Journalists (NUJ), for journalists in Kano. The suggestion is coming on the heels of a promise made by the president of Dangote Group,
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isolation facility to be established at the stadium would complement the already earmarked two isolation centres by the government in the state. He disclosed that the committee was formed to raise funds to assist the poor people and the downtrodden in order to cushion the effects of lockdown in the state. “There are people who are economically weak and must be affected during this trying time. That is why we decided to form a committee to raise money in order to help them cushion the effects,” he said. “The state government had put everything in place, in terms of prevention and cure, to ensure that the disease “do not ravage the state,” the governor said. The governor, also appealed @Businessdayng
to retired health workers to volunteer to partake in the effort to fight coronavirus pandemic in the state, urging those interested to register with the state Ministry of Health. It would be recalled that today (Monday) has been declared fasting day against the outbreak of Coronavirus in the state. Also, Oyo State Council of NUJ has cautioned security agencies in the state to respect journalists as essential service providers as the dusk to dawn curfew declared by state began. While saying that journalists are major stakeholders in the efforts to curtail the spread of coronavirus, the union called on heads of security agencies in the state to caution their officers from harassing journalists in the discharge of their duties during the period of the curfew.
36 BUSINESS DAY
Wednesday 01 April 2020
news
Covid-19: ATCIS pressures telcos to 100 days after Nigeria filed fraud charges against P&ID, company fails to respond lated terms of its agreement paying the negotiated sum, set national) Ltd – part of the P&ID slash tariffs for calls, data ISAAC ANYAOGU by failing to provide gas for the aside the settlement agreement group of companies – to Grace ENDURANCE OKAFOR
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ssociation of Telephone, Cable TV and Internet Subscribers (ATCIS) has called on telecommunications companies in Nigeria to reduce tariffs for voice and data services on their networks in the light of the current disruption triggered by coronavirus pandemic. The masses consumer advocacy body stress that as most companies have resorted to remote operations and people are dealing with movement restrictions, everyone is left with voice calls, small messaging service (SMS) and internet services to keep up with daily business trends and social realities. In a statement signed by Prince Sina Bilesanmi, national president of ATCIS, ATCIS urges the operators to be patriotic and not exploit the disruption caused by the pandemic as an opportunity to rake in easy money. “With self-isolation, and with a federal government directive that many institutions be closed as well as curfew in some states to ensure that the spread of the virus is curtailed, this will naturally lead to change in consumer behaviour,” Bilesanmi says, adding that the changes are
reflected in the uptake in the usage of collaborative tools to communicate, to do business and work from home as well as e-learning starting from primary, secondary to tertiary institutions. According to the statement, the situation at hand is a very delicate one and the only way “we can have a breakthrough is by prioritising patriotism above personal gains and gratifications. Everyone is caught almost unprepared by COVID-19, therefore forcing us to abandon our places of works and start working from home.” To curtail the spread of the deadly coronavirus, President Muhammadu Buhari on Sunday said, “Based on the advice of the Federal Ministry of Health and the NCDC, I am directing the cessation of all movements in Lagos and the FCT for an initial period of 14 days with effect from 11pm on Monday, 30th March 2020. This restriction will also apply to Ogun State due to its proximity to Lagos and the high traffic between the two states.” According to the president, the residents of Lagos, Ogun and FCT were instructed to “stay in their homes.” All businesses and offices within these locations were ordered to fully close during the lockdown with the inclusion of financial institutions.
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ver three months after Nigeria filed allegations of fraud against British Virgin Island firm, Process and Industrial Development (P&ID), in a United Kingdom court, the company has failed to respond definitively to these allegations. “Barring an initial statement insubstantially maintaining that the award is ‘enforceable’, the shell company has yet to provide any formal response to the claim,” a statement from the office of Nigeria’s attorneygeneral said. Nigeria is embroiled in a fight with P&ID over a failed 2010 deal to develop a gas processing plant over which it was inflicted a $9bn judgment which has now risen to $10bn. P&ID claimed Nigeria vio-
power plant it wants to build for the country. This frustrated the construction of the gas project agreed to during the government of former President Umaru Yar’Adua and deprived P&ID the potential benefits expected from 20 years’ worth of gas supplies with “anticipated profits of $5 to $6 billion”. The arbitral tribunal unanimously decided that the Federal Government had repudiated the GSPA by failure to perform its obligations under the GSPA and awarded P&ID was entitled to $6.6 billion in 2017. Former President Goodluck Jonathan’s government reached an out-of-tribunal agreement for the payment of $850 million and passed on disbursement to the administration of President Buhari. Buhari balked at the idea of
and challenged the enforcement of the award before the English Commercial Court. But the London court added $2.4 billion in interest making it $9bn. The judge granted Nigeria’s request for a stay on any asset seizures while its legal challenge is pending, but ordered it to pay $200 million to the court within 60 days to ensure the stay. It also must pay some court costs to P&ID within 14 days. The original decision on Aug. 16 converted an arbitration award held by P&ID to a legal judgment, which would allow the British Virgin Islands-based firm to try to seize international assets. Nigeria then began investigating the company through the EFCC and found evidence of two bank transfers totalling $20,000 made by Dublin-based Industrial Consultants (Inter-
Taiga, a Nigerian government lawyer who oversaw the award of the gas plant contract. The payments, in 2017 and 2018, were made from an Industrial Consultants account at Allied Irish Banks and were purportedly for “medical costs”, Bala Sanga, the lead prosecutor, said in the interview. Based on this new evidence it called ‘seismic’, Nigeria filed fraud charges against P&ID but the company has failed to respond to the charges. “It is increasingly clear that this was a highly orchestrated scam, involving a cover-up by ministers at the highest levels of office in the previous administration,” said the statement from Kirsty Macintosh, communications associate at Londonbased consultancy representing Nigeria.
Covid-19: After Israel, US, UK plan to evacuate their citizens from Nigeria Innocent Odoh, Abuja, & IFEOMA OKEKE, Lagos
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o l l o w i n g S u n d a y ’s evacuation of about 270 Israeli citizens via Air Peace from Nigeria to Israel over the ravaging Covid-19 (Coronavirus), the United States and the United Kingdom have put strategy in place to evacuate their citizens in the coming days. The US Consulate in Nigeria on Monday confirmed multiple emergency flights to evaluate its citizens out of Nigeria. In a statement on its official Facebook page, the Consulate said the flights would depart Lagos and Abuja this week, and advised its citizens not to rush to the airport as they would be contacted directly when the flights were ready. In the meantime, the Consulate has told its citizens to be patient and continue to self-isolate using the term “shelter in place” and wait for further information. It has assured that the US Department of State remains committed to the welfare of its constituents abroad. The US ambassador to Nigeria, Mary Beth Leonard, in her reaction to the global pandemic, said, “It is difficult time where our entire global community is affected by COVID-19. We recognise the importance of collective and
coordinated action to combat this pandemic. Together our global community will triumph over this disease.” Meanwhile, the British High Commissioner to Nigeria, Catriona Laing, in a video message to UK citizens who have temporary residence in Nigeria and wish to return home, said an arrangement had been made for them to travel back to the UK. She said even though the Nigerian government had closed the Abuja and Lagos airports to international flights from March 23, the government had made concession for humanitarian and evacuation flights. “Our priority is those of you who are visiting temporarily and those who are vulnerable, the government of Nigeria has however made acceptance for humanitarian and evacuation flights. So, we are now working intensively to look at all options for evacuation flights,” Laing said. Furthermore, the US government insists on a 14-day self-isolation, noting that if a citizen tests positive after the 14 days, he/she would not be allowed to board the flight back home. Currently (as at the time of this report), Nigeria has 135 confirmed cases of the pandemic and two recorded deaths and eight recovered compared to the US’ 164,266 total confirmed cases with 3,170 deceased and about 5,507 recovery. www.businessday.ng
L-R: Onipede Babatunde, corps officer, Lagos Neighborhood Safety Corps (LNSC) Ifako/Ijaye; Omirin Adeyinka, director, ministry of agriculture, Lagos State, and Toba Oke, chairman, Ifako/Ijaye Local Government, during a their monitoring visit to a temporary subsidised shopping channel centre created by the Lagos State government at Fagba Junior Grammar School, Iju, Lagos. Pic by Olawale Amoo
Migo CEO selected as Endeavor Entrepreneur NERC confirms BusinessDay exclusive story, says tariff hike delayed for 3 months
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ounder & CEO of Migo, Ekechi Nwokah, has been welcomed into the global network of Endeavor, a mission-driven, global organisation leading the high-impact entrepreneurship movement. Endeavor’s mission is to build strong entrepreneurship ecosystems in growth markets, including Nigeria, by selecting, mentoring, and accelerating the best high-impact entrepreneurs to drive economic growth and job creation. Formerly known as Mines, Migo is a cloud-based platform that partners with banks, mobile operators, retailers and payment processors in emerging markets to provide credit to underserved consumers. “Migo is an exciting highgrowth company that is improving financial access for millions in Nigeria. As the company expands beyond Nigeria, starting with Brazil, which is one of Endeavor’s largest markets, we look forward to supporting Ekechi and his team on their mission to bring retail credit to billions of underserved people all over the world,” said Eloho GihanMbelu, managing director & CEO of Endeavor in Nigeria. “Ekechi is a dedicated,
technical founder and a strong role model for high-impact entrepreneurs in Nigeria,” GihanMbelu said. To become an Endeavor Entrepreneur, candidates go through a rigorous selection process which culminates in an International Selection Panel by vetted and trusted mentors, drawn from Endeavor’s extensive network of over 4,000 mentors across the world. Ekechi was successfully selected along with seven entrepreneurs leading six companies from six countries.
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he Nigerian electricity regulator, NERC, on Tuesday confirmed BusinessDay’s exclusive story, saying the planned tariff hike which was to take off today has been delayed for three months. James Momoh, NERC chairman, in an order released on Tuesday directed all distribution companies to submit a detailed plan for the attainment of full recovery of prudent costs and allowed return on capital revenue requirements by 30 June 2021. The revenue recovery and financial sustainability plans
shall be submitted to the Commission no later than 21 April 2020. The plans shall include a path, with timelines, for transiting customers to a higher quality of service. NERC also directed the DisCos to submit revised Performance Improvement Plans based on the key objective of improvement in service for and use customers and transiting to full revenue recovery no later than 21 April, 2020. According to the commission, the approved plans shall form the basis for future tariff reviews and full cost recovery.
Covid-19: Lagos postpones public service promotion examinations MARK MAYAH
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Ekechi Nwokah
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agos State government has announced the postponement of its public service promotion examinations. The promotion examinations were billed for between 7th and 14th April, 2020 for grade level 13 to 15. BusinessDay gathered that the postponement was sequel to the Head of Service circulars; CIR/HOS/’20/Vol. 1/037 dated March 20, 2020 on curtailing the spread of Covid-19 in Alausa Secretariat and other Government Establishments and CIR/ HOS/’20/Vol. 1/038 dated March @Businessdayng
20, 2020 on Postponement of the Year 2020 Promotion exercise. Aside, the postponement was also attributed by the need to take precautionary measures against the Pandemic Corona Virus (COVID -19). Confirming the postponement, the director, Lagos State Examination Board, Supo Gbadegesin, said the postponement “is indefinitely.” He said: “The Year 2020 Public Service Examination, originally programmed to hold from 7th to 14th April, 2020, has been postponed indefinitely till further notice.
Wednesday 01 April 2020
BUSINESS DAY
news Ventilators, oxygen: NDDC rolls out N1.045bn to defend Niger Delta states against COVID-19 Ignatius Chukwu
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he Niger Delta Development Commission (NDDC) is joining the war against COVID-19 with N1.045 billion to defend the nine states. It has however shut down its operations. Speaking in his office at the NDDC headquarters in Port Harcourt, the Commission’s acting managing director, the professor of microbiology, Kemebradikumo Pondei, declared that the interventionist agency was making available N775 million to support the nine states under its mandate. He added that it would release another N270 million to fast-track the establishment of isolation centres in the 27 senatorial districts across the region. Pondei, who last week pledged to collaborate with other stakeholders in the fight against the COVID-19 pandemic, said the NDDC would contribute in the
area of treatment because most of the activities so far had been on prevention. He said: “We are exploring avenues to see if we could intervene in providing ventilators and facilitate the procurement of oxygen. We are also looking at the drugs that have been used so far in other climes for treatment. The NDDC is going a step above what others are doing.” As part of its response to the COVID-19 pandemic, the NDDC on Monday announced a total shutdown of its services. An internal memorandum signed by the NDDC acting executive director, finance and administration, Ibanga Bassey Etang, and addressed to the Commission’s directorates, departments and units, stated that the shutdown would last till further notice. Management noted it could recall key staff, if need be. It added: “Directors/Heads/ Units of such essential services as security, plant operators etc should
workout ways of covering such duties during the shutdown and forward same to the office of the Ag EDFA accordingly.” The Commission reminded staff to adhere strictly to the World Health Organisation (WHO) standard on preventive measures by ensuring personal hygiene which included washing of hands with soap and water and sanitising of hands, maintaining of social distance and staying away from public places when necessary. It also directed staff to follow stipulated guidelines by the Federal Ministry of Health, Nigeria Centre for Disease Control (NCDC) and other relevant health agencies of government to curb possible spread of the virus. The Commission had earlier directed a partial shutdown of the Commission on March 26, 2020, following the Federal Government’s directive that staff on SGL 03 – 12 should work from home until further notice.
Lagos lockdown: Shippers seek continuous evacuation of containers to decongest ports … as NSC deploys buses to ease movement of freight agents AMAKA ANAGOR-EWUZIE
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orried by the likely cost implication of piling up un-cleared containers at ports, Shippers Association of Lagos State (SALS) has called on port industry players to take the opportunities created by free flow of vehicular traffic during the 14-day lockdown in Lagos, to decongest the ports. Jonathan Nicol, president of SALS, who commended NPA’s proactive efforts in dealing with issues in the port since Coronavirus outbreak, said the two weeks lockdown would help to decongest the ports and eliminate the protracted Apapa traffic, if massive evacuation of empty containers was
carried out. “We hope the Apapa traffic would disappear after the two weeks lockdown. Government Agencies should assist the Nigerian Ports Authority to achieve this objective. The Port Health and the Federal Ministry of Transportation should synergies to curtail the dreaded Coronavirus within port complexes,” he advised. Meanwhile, the Nigerian Shippers Council (NSC) is perfecting arrangement to deploy coaster buses in strategic locations in Lagos to help ease the transportation challenges freight forwarders may encounter during the period of lockdown. Boniface Aniebonam, founder of National Associa-
tion of Government Approved Freight Forwarder (NAGAFF), who disclosed this in a statement on Tuesday in Lagos, said the approval to deploy the buses was granted by Hassan Bello, executive secretary of the NSC. “We have it on good authority from the ES of NSC that coaster buses are being deployed at strategic locations in Lagos to help freight forwarders to ease transportation to the ports,” Aniebonam said. He however disclosed that some banks were not taking responsibility to deal with issues relating to Form M registration, adding that the information had been passed on to the executive secretary of NSC and Registrar of CRFFN to investigate and follow up.
CSR-in-Action prepares 2019 Benchmarking Reports with EY
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leading sustainability advocacy and social enterprise, CSR-in-Action Advocacy, a CSR awareness and advancement initiative, has announced the commencement of the 2018/2019 edition of its flagship report on corporate responsibility, the Corporate Sustainable Investor Report (CSIR) - previously known as the Collective Social Investment Report - with Ernst & Young (EY), a reputable business consulting firm. Launched in 2012 at the 17th Nigerian Economic Summit, with Tony Elumelu, chairman, UBA Group and founder, Tony Elumelu Foundation, former minister of National Planning Commission, Usman Shamsuddeen, and Frank Nweke Jr., director-general, Nigerian Eco-
nomic Summit Group (NESG), the CSIR is a one-stop databank for measurable non-financial information on businesses in Nigeria with a focus on the private sector. It also includes public/private enterprise, foundations and multilateral organisations. The Report will feature the CSR-inAction Corporate Citizenship Index (3C-Index) - West Africa’s premier index of companies sustainability practise. As part of efforts to maintain excellent delivery of the Report, CSR-in-Action has re-engineered the report-development process into four clear phases of delivery: upgrade of the indices to cover economy, governance, environment and social impacts; data collation by independent third parties and reviewed companies
through direct submissions from companies, desktop research, and sustainability and financial reports; review by EY and final approval by our Board. All of this is to ensure that the Index and the Report are at least of equivalent standards to internationally acclaimed indices such as the FTSE 4 Good and the Dow Jones Sustainability Index. In the words of Bekeme Masade-Olowola, executive director, CSR-in-Action, “Partnerships are ever more crucial to our success this year. An intrinsic part of being responsible is responsiveness and we trust that more companies will respond to our quest for information in a timely manner. Our approach to stakeholder engagement and management is so much more sophisticated that we expect more robust data.
CBN suspends cheque clearing till further notice Hope Moses-Ashike
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entral Bank of Nigeria (CBN) has suspended indefinitely cheque clearing in the nation’s Clearing System starting from March 31, 2020. The suspension follows a na-
tionwide broadcast by President Muhammadu Buhari ordering the restriction of movement in Lagos, Ogun and Federal Capital Territory, Abuja, as a result of the persistent spread of Covid-19 in the country. A statement signed by Sam www.businessday.ng
Okojere, director, banking services department, stated that no fresh cheque instrument would be allowed to pass through the clearing system on March 31, 2020. Only returned cheque would be treated on the said date. https://www.facebook.com/businessdayng
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Coronavirus: NHIS releases three months funds for enrollees Godsgift Onyedinefu
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n response to the COVID-19 (Coronavirus) pandemic in Nigeria, the National Health Insurance Scheme (NHIS) says it has effected an early and immediate release of funds for the payment of capitation and fee-for-service for its enrollees for the second quarter (April to June) of 2020. This, the Scheme said, is to guarantee uninterrupted access to healthcare services by enrollees of the Scheme and ensure that no enrolee will be turned back from any facility for non-payment of appropriate fees by any Health Maintenance Organisations (HMOs). Ayo Osinlu, head, media and public relations in a statement issued on Tuesday, said the scheme took the step to ensure that the looming threat of COVID-19 was not compounded for the enrollees by inability to access healthcare services at the points of need. Responding further to the situation, NHIS has issued guidelines to the HealthCare Facilities (HCFs) and the HMOs on certain actions to be taken towards protecting the interests of the enrollees in the current situation, Osinlu stated. He explained that the guidelines contain concrete provisions to prevent service failure, and also ensure that enrolees enjoy prompt and effective healthcare services in spite of general restrictions and outright lockdown in certain parts of the country. “The guidelines gave clear order to healthcare providers to ensure the safety and protec-
tion of their personnel against COVID-19 infection, provide timely and appropriate level of care for all NHIS enrolees as may be required, and ensure that no NHIS enrollees is denied access to care. “It also directed the providers to note that all NHIS and HMO Call Centres are open 24hours daily. They are also to ensure the issuance of authorization codes and resolution of all other issues, ensure prompt report of all cases of denial of authorization codes by HMOs, as well as maintain high index of suspicion and promptly report suspected cases to NCDC or State Ministries of Health,” Osinlu said. Osinlu added that the guidelines for the HMOs instructed them to also ensure the safety and protection of their personnel against COVID-19 infection, ensure prompt payment of capitation and fee-for-service to all healthcare facilities, while also ensuring the provision of timely and appropriate level of care for all NHIS enrolees by the healthcare facilities. He also said the HMOs are, by the guidelines, required to ensure that no NHIS enrolee is denied access to care, while their call centres are to be open 24hours daily, for prompt issuance of authorization codes and to resolve all other issues that may arise. “They are equally directed to log all cases of issued or denied requests for authorization code by healthcare facilities,” he said. The Scheme advised all its stakeholders to adhere strictly to Local, State and Federal Public Health recommendations to curb the spread of COVID-19 in the country.
Covid-19: Operators foresee mortgage loans repayment default as economy weakens CHUKA UROKO
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he mortgage industry in Nigeria and the world over is at the receiving end of the ravaging impact of the coronavirus pandemic, which has weakened the global economy, operators in the industry have said. The operators are concerned that the virus is taking toll on household, national and global economy, meaning that nobody is thinking of taking up mortgage while the capacity of those who have already taken is being eroded by governments policy measures put in place to curtail the spread of the disease. “Yes, I foresee loan repayment default. Coronavirus is a
global problem that is affecting everybody. Now it has moved from being a financial to an economic crisis. What we have at hand is a health crisis. People are now more concerned about their survival than anything else,” Niyi Akinlusi, CEO, Trustbond Mortgage Bank, explained to BusinessDay. Continuing, Akinlusi noted, “If people are not healthy, they cannot work and if they cannot work, they cannot earn income and don’t forget that mortgage is given to people based on their income.” He added that even those who were healthy cannot go out because of government’s sit-at-home order. Clearly, coronavirus is a great threat to the economy given that people are no longer spending having been confined to their homes. “It
is through spending that an economy grows,” Akinlusi emphasised. He is, however, optimistic that nations, including Nigeria, would come out of this scourge stronger and better having learnt a couple of lessons. He hopes too that after the crisis there will be increased demand for housing, noting that, at the moment, not many people have good houses and easy access to water. The worry in the mortgage industry is also palpable in the housing sector where developers are concerned about their sector in particular and the economy in general. “My major concern is the well-being of every citizen and that we are all safe. As a CEO and an investor, I am concerned about what comes
after the pandemic. I am also concerned about what would be the state of the economy and how it will affect our business?” Olawale Ayilara, the founder/CEO of LandWey Investment, said. Ayilara, who spoke in an interview with BusinessDay last weekend, wondered how businesses would recover from the pandemic. He was not sure what measures government would put in place to ensure that investments and that of their clients are secure. “But, more importantly, how can we innovate our business to ensure that the economic impact is minimal,” he queried, disclosing that, as a forward thinking and innovative company, they had earlier discussed the option of operating virtually.
Nigerian miners close operations to contain spread of Covid-19 STEPHEN ONYEKWELU
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iners in Nigeria have closed operations to help contain the spread of Coronavirus to which Nigeria has lost two lives. This came in a press statement signed by Kabiru Mohammed, the national president of Miners Association of Nigeria, and Dele Ayanleke, national secretary of the association. The association says closure of operations guarantees compliance with President Muhammadu Buhari’s effort to slow and flatten the curve of the viral pandemic’s spread. The president on Sunday gave directives that have locked down Lagos State with 81 of the country’s 135 cases, Ogun State with four cases and the Federal Capital Territory with 25 cases. The virus has since spread to 10 other states. “The Association has been monitoring, with patriotic interest, the developments and all measures being taken to mitigating the effects of this monumental health challenge,” the press release said. Mining activities take place mostly in rural communities with a lack of functional health and other basic amenities, infiltration of illegal immigrants and high level of
social contacts and interactions among the mineworkers and other camp dwellers, “the Association has come to the conclusion that the state of our mining sites is not in tandem with “social distancing” as a major weapon to combat the spread of “COVID-19”.” It is in light of the above that, the National Executive Council of Miners Association has directed members across the nation to close mining operations forthwith until Nigeria survives this global emergency. The Association has also appealed to other non-member miners to heed this patriotic directive in the overall national interest. This directive is imperative in view of the volatility of social interactions in mining communities and the high rate of mobility of mineworkers, even across the borders. Any window of entry offered the virus into any of a minefield may spell doom and scuttle all efforts at curbing its spread. “While we are not unaware of the cumulative economic and operational costs of the adherence to this directive on the investments of our members and other miners, we plead that they should regard this call as our sacrificial contributions to deliver our nation, fellow citizens, ourselves and other residents from the pandemic of Coronavirus.”
Commander Rapid Response Squad (RRS) DCP Olatunji Disu enlightening youth who were playing football in Ikosi Road on the need to observe social distancing and wash their hands regularly to avoid the spread of COVID-19 in Lagos. Pic by Olawale Amoo
Reps donate two months’ salary to Covid-19: LIRS extends deadline for filing of annual returns to May 31 fight against Covid-19 James Kwen, Abuja
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he 360 members of the House of Representatives have resolved to donate their two months’ salary to the fight against the Covid-19 pandemic in Nigeria. Speaker of the House, Femi Gbajabiamila, who announced this Tuesday, said the twomonth salary donation would be independent of the contributions by individual lawmakers to alleviate the hardship that their constituents face at this time of national emergency. Gbajabiamila said starting from March salary, the lawmakers’ donation would be transferred directly to the National Relief Fund Account for the fight against Covid-19. In a video message to Nigerians as part of the response to the Covid-19 pandemic, the speaker said: “We have in the House of Representatives jointly committed to contributing one hundred per cent (100%) of our salaries for the next two months to the fight against Covid-19 in Nigeria. “Our contribution will sup-
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port provisions for the welfare of frontline medical professionals and health workers, and other interventions to provide for the wellbeing of all Nigerians through these trying times. “Accordingly, I have directed the Clerk to the National Assembly to see to it that all members’ salaries are transferred to the National Relief Fund for this month and the next. “This is independent of ongoing individual efforts by members to alleviate the suffering brought on by this virus and to improve the living conditions of citizens in their various constituencies”. He said the House would exercise its oversight power to ensure faithful administration of all emergency funds and contributions made so far to ensure they serve the purpose for which they were intended. According to Gbajabiamila, the House has already mandated the Committees on Health and Disaster Preparedness to diligently oversee the distribution of items donated by local and foreign donors to ensure proper management.
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s a result of the coronavirus pandemic altering socio-economic activities around the world and as part of the ongoing efforts to mitigate the effect on businesses and taxpayers, the Lagos State Internal Revenue Service (LIRS) has extended the deadline for filing of Annual Returns for Individual taxpayers including self-employed persons for two months from April 1 to May 31, 2020. A statement signed by Monsurat Amasa, head, corporate commutations, a copy of which was made available to BusinessDay, said: “Statutorily, the filing of annual returns expires on the March 31st of every fiscal year, and attracts stiff penalties for defaulters. With this extension as announced by LIRS, taxpayers are given a breather.” Quoting Ayodele Subair, chairman of LIRS, the statement said the extension of deadline of the Annual Returns is in response to appeals made by taxpayers as well as a policy shift by @Businessdayng
the agency to assuage the effect of COVID-19 on the taxpayers and residents of Lagos State. “We implore the taxpayers to access our eTax platform for all tax operations and administration matters, including filing of annual returns from the comfort of their homes and offices. They can do this, by simply logging on to the eTax platform via https://etax.lirs. net or calling our Customer Care Centre on 0700 CALL LIRS (070022555477),’’ he further said. While further updates on business operations and alternative payment platforms of the service can be obtained by visiting the LIRS website, (www.lirs.gov.ng), and its various social media handles, the management and staff of LIRS appeal to the residents of Lagos State to support the efforts of the Lagos State Government ably led by Babajide Sanwoolu by adhering strictly to the COVID-19 safety guidelines as issued by relevant health authorities.
Wednesday 01 April 2020
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FINANCIAL TIMES
World Business Newspaper
Coronavirus pandemic boosts popularity of Trump and Johnson US president and UK prime minister among 10 leaders whose approval ratings have risen Kiran Stacey and Jim Pickard
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he coronavirus pandemic has boosted the poll ratings of almost every major democratic leader, according to an FT analysis of polling data from around the world. The approval rating for the leaders of 10 of the biggest democracies has risen on average by nine points, according to an analysis of data from pollster Morning Consult. UK prime minister Boris Johnson’s standing has improved more than any other leader, the polls show, with US president Donald Trump also receiving an uplift despite sustained criticism of his handling of the crisis caused by the virus. Jeff Cartwright, Morning Consult vice-president, said it was natural for leaders’ approval ratings to rise when they are “in the spotlight” during times of crisis. “How the pandemic evolves and its ultimate outcome, however, will be the deciding determinant of whether constituent support holds,” he said. Mr Johnson’s poll rating has jumped more than 25 percentage points since the start of 2020, turning him into one of
Donald Trump’s approval rating has gone up despite sustained criticism of his handling of the pandemic © Bloomberg
the most popular leaders in the democratic world, with a net approval rating of 29 per cent. This is behind only Narendra Modi, India’s prime minister, and President Andrés Manuel López Obrador of Mexico. Although Mr Modi is one of the few world leaders whose poll numbers have fallen in the past few months, he still enjoys some of the highest net approval of any world leader, with a 63 per cent positive rating. Mr Trump’s approval rating has risen by 5 percentage points
since the turn of the year, which is enough to give him some of his highest ratings since he became president in 2017. This is likely to be a concern for his Democratic opponents ahead of the US presidential election in November. Democrats will be particularly frustrated that Mr Trump’s approval rating has risen during the crisis, despite what critics say have been mis-steps and the US recording more coronavirus cases than anywhere else in the world.
The US president initially cast doubt on the severity of the disease, comparing it with a seasonal flu and declining to release social distancing guidelines until two weeks ago. Nancy Pelosi, the Democratic speaker of the House of Representatives, has said that Mr Trump’s delay in acting had cost lives. Mohamed Younis, editor in chief at the pollster Gallup, said: “The concerning thing for Democrats here is that the president’s approval rating has gone up among independent
and Democrat voters, not just Republicans.” Angela Merkel has also enjoyed a revival in popularity as Germany’s chancellor along with French president Emmanuel Macron and Scott Morrison, Australia’s prime minister. The question for many opposition politicians and campaigners is how quickly this jump in support for sitting governments during the coronavirus crisis might last. The most recent high water mark for a US president is the 84 per cent net rating enjoyed by George W Bush in the aftermath of the September 11 terrorist attacks. His standing fell after that, but it took another two years for more Americans to disapprove than approve of the job he was doing. “The George W Bush example shows that these things last, and they last for quite a long time,” said Tim Bale, professor of politics at Queen Mary’s University. “But nothing lasts forever.” The popularity of then-UK prime minister Gordon Brown jumped in the aftermath of the 2007 foot-and-mouth disease outbreak when he had just become leader. Just four months later, he had a minus 36 net approval rating.
Fed sets up scheme to meet booming foreign demand for dollars Central bank meets global shortage of greenbacks after scramble for safety
James Politi, Brendan Greeley, and Colby Smith
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he Federal Reserve has taken a new step to meet the global demand for dollars, setting up a facility that would allow central banks and international monetary authorities to enter into repurchase agreements with the US central bank and trade US Treasuries for dollars. The Fed said the new facility would work in tandem with the dollar swap lines already established by the central bank with its peers across 14 different countries as the coronavirus pandemic has spread across the world. In recent weeks the greenback’s value has risen sharply as investors have flocked to safe assets, and companies have scrambled to offset the blow to revenues from economic shutdowns. This has resulted in a global
shortage of dollars that has hit emerging markets particularly hard, adding to concerns about the fallout for the global economy. Volatility in the Treasury market — the world’s largest and most liquid debt market — has further added to investors’ angst, having surged this month to its highest level since the global financial crisis, according to a Bank of America measure implied by options prices. The temporary facility for foreign and international monetary authorities, or FIMA, will allow foreign central banks and international organisations with accounts at the New York Fed to “temporarily exchange their US Treasury securities held with the Federal Reserve for US dollars, which can then be made available to institutions in their jurisdictions,” the Fed said in a statement. “This facility should help support the smooth functioning of the US Treasury market by prowww.businessday.ng
viding an alternative temporary source of US dollars other than sales of securities in the open market,” the US central bank added. It should take out some of the panic that investors were starting to feel when they saw such a deep and liquid market shut down. Seema Shah, chief strategist, Principal Global Investors Brad Setser, senior fellow for international economics at the Council on Foreign Relations, said the Fed’s scheme would mostly help countries that already had a significant stockpile of foreign reserves, such as Taiwan, Hong Kong and Thailand — and potentially even India and China — support their financial institutions. However, it would not be as useful for countries lacking in foreign reserves, such as Turkey, South Africa, Lebanon or Indonesia, which would still have to turn to the IMF to weather the crisis.
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Gennadiy Goldberg, a rates strategist at TD Securities, said the Fed move was important because it simultaneously addressed the global scramble for dollars as well as strains that have emerged in the Treasury market. “It allows foreign central banks to very quickly raise cash instead of exacerbating illiquidity in an already illiquid market,” he said. Moreover, according to Seema Shah, chief strategist at Principal Global Investors, it should help to improve sentiment among market participants. “It should take out some of the panic that investors were starting to feel when they saw such a deep and liquid market shut down.” The move is part of a flurry of actions taken by the Fed to contain the damage from the coronavirus to the US and global economies. The US central bank has lowered its main interest rate close @Businessdayng
to zero, announced unlimited purchases of US Treasuries and mortgage-backed securities guaranteed by government agencies, and resurrected a series of facilities dating back to the 2008 financial crisis to support ailing credit markets. The Fed also has a crucial role in providing loans, loan guarantees and other help to corporate America as part of the $2tn stimulus package recently passed by Congress. On the international front, the Fed this month established swap lines with the European Central Bank, Bank of Japan, and the Bank of England, and their counterparts in Canada and Switzerland. It then extended those facilities to include other central banks including Mexico, Brazil, Australia and Singapore. Mr Setser said that even central banks that had established a swap line with the Fed could make use of the new dollar facility as an alternative, depending on their needs.
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COMPANIES & MARKETS
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Regulators across Europe clash over bans on short selling Some countries prohibit bets on lower prices, while others warn bans make matters worse Philip Stafford, Laurence Fletcher and Robert Smith
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hen share prices tumbled at record speeds in February and March, some regulators in Europe turned to a playbook used in the last two financial crises, and banned the short selling of shares. France, Spain and Italy issued one-day prohibitions against betting on falling share prices for selected companies — and then longer bans of between one and three months, applied to all stocks listed on their domestic markets. Belgium, Austria and Greece swiftly followed suit, while Esma, the pan-European regulator, demanded tighter standards on reporting of short positions. Markus Ferber, an influential European MEP, urged a co-ordinated ban across the continent. But the clampdown has been partial. Other regulators, including the UK’s Financial Conduct Authority, opted against such measures, saying it set a “high bar” for imposing bans. The German watchdog, BaFin, has said nothing publicly but has so far imposed no restrictions. The divergence has created headaches for investors and traders trying to navigate a patchwork of rules. “Everyone has different interpretations and it’s guesswork right now,” said Mark Spanbroek, vice-chairman of Epta, which represents Europe’s proprietary traders. Ivan Cosovic, founder of data group Breakout Point, which analyses hedge fund short-selling activity, said that in the wake of the various bans, “rebalancing and risk adjusting is not possible any more in [an] envisioned, uniform way.”
Short selling has been blamed for inflaming volatility during times of stress © FT montage; Bloomberg; Getty Images
Short selling is a practice widely used by hedge funds and involves managers borrowing shares and then selling them, hoping to buy them back later at a lower price before returning them and pocketing the difference. The practice has long been blamed for inflaming volatility during times of stress, while some complain that short-sellers callously profit from the economic misery of others. Several hedge funds made millions shorting banks such as Northern Rock in the 2007-08 crisis, for example. Earlier this month short-sellers drew a rebuke from the new Bank of England governor Andrew Bailey, the former FCA chief, who used an interview with the BBC to tell them: “Just stop what you’re doing”.
The recent round of bans is an echo of 2008, when authorities faced the worst turmoil in 70 years. Aiming to stem the panic, they imposed temporary short selling bans on financial stocks. European regulators also applied bans on financial stocks in the depths of the eurozone crisis in 2011-12. But critics of the moves note that stocks continued to fall heavily for months after restrictions came into force. The FCA said there was “no evidence” that short selling had been the driver of recent drops in shares. “Most European [authorities] have not introduced such bans. Nor has the United States or any other major financial market,” the regulator pointed out. The bulk of Europe’s hedge fund industry is based in London and falls under
the FCA’s remit. “A general pan-EU ban on short selling for securities traded in the EU only makes sense selectively for certain companies and sectors and even then its effectiveness is doubtful,’ said Thomas Richter, chief executive of BVI, the German funds association, whose 114 members hold €3.4tn in assets. The execution of the bans has also been haphazard. France, for example, did not make public a one-day ban until after the market had opened. Investors were unclear which stocks were included in the ban, and which were not. BaFin then put out a statement to clarify that instruments related to Euro Stoxx and MSCI indices were exempt from the prohibitions, as the shares affected by the restrictions
did not exceed certain weightings within the indices. Sam Tyfield, a partner at law firm Shoosmiths in London, interpreted the update as a “powerful statement” that the German regulator “doesn’t see the advantages of the bans”. Bans could even make matters worse. A 2011 paper from the US Federal Reserve found that curbs on short selling increased the overall costs of trading. Short sellers “are unpopular because they deliver messages that people would rather not hear,” the Fed concluded. Similarly, a 2018 study by the European Systemic Risk Board found that banned stocks were more likely to default or experience more volatility than unbanned ones. “It is not, and never has been, true that bans have any other, positive effect on market activity or price levels,” said Nandini Sukumar, chief executive of the World Federation of Exchanges, a trade association. Many regulators also accept that short selling is widely used by investors and market makers to protect themselves against sharp moves, and is an important mechanism for pricing shares. Some fund managers hedge positions that are betting on a rise, such as through a bond or a derivative trade, by balancing it with a “short” on the equity. The practice, known as pairs trading, is a common strategy. Market makers, meanwhile, complain that the restrictions mean they cannot meet Mifid rules that they supply both buy and sell quotes. “Statements by highly respected and influential politicians will fuel . . . instability, as it adds another uncertainty factor,” said Mr Spanbroek of Epta.
Wall Street heads for worst quarter since 2008 Global equities have shed a fifth of their value since the start of the year Peter Wells, Adam Samson, Hudson Lockett and Daniel Shane
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S stocks were on track for their biggest quarterly drop since the financial crisis on Tuesday as they wobbled between positive and negative territory in their final trading session of the period. A rally over the past week, as investors warmed to the emergency actions of global governments and central banks, has saved Wall Street from notching up its worst quarter since the Great Depression, but stocks still remain down 18 per cent since the start of the year. The S&P 500 was up 0.3 per cent shortly before lunchtime in New York, having opened in negative territory. The tech-heavy Nasdaq Composite fared best, up 1.3 per
cent, while the Dow Jones Industrial Average added 0.3 per cent. Equities in Europe regained their poise, having taken some comfort on Tuesday from tentative signs the Chinese economy is stabilising after Covid-19 lockdowns stifled activity in February. For the US, though, a new forecast for gross domestic product published by Goldman Sachs suggested a 34 per cent annualised contraction in the second quarter, indicating it is still to see the worst of the crisis. The bank is now predicting a US unemployment rate of 15 per cent by mid-year. The broad MSCI measure of developed and emerging market equities has shed a fifth of its value over the past three months in the sharpest drop since 2008. London’s FTSE 100 has fared worse, down 25 per cent in its heaviest rout since 1987. “This bear market has been unusual, not because of the scale www.businessday.ng
of the decline but rather because of the speed and the volatility,” said Peter Oppenheimer, chief equity strategist at Goldman Sachs. Wall Street stocks took just 16 days to tumble 20 per cent from their record high, easily eclipsing the previous record for swiftest tumble into a bear market that was set in 1929 at 44 days, noted Mr Oppenheimer. The Europe-wide Stoxx 600 and London’s FTSE 100 were up 1.5 per cent and 0.9 per cent, respectively, in afternoon trading in Europe. China’s CSI 300 climbed 0.3 per cent, with Hong Kong’s Hang Seng up 1.9 per cent. Mr Oppenheimer said there was “encouraging evidence coming out of China and some other countries as production and demand start to recover”. China’s National Bureau of Statistics purchasing managers’ index reading of 52 marked a sharp
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jump in manufacturing activity in March from a record low of under 36 in February. Any reading above 50 indicates growth. “The shape is almost a perfect V and offers a glimpse of hope that economic effect might be shortlived,” said Daniel Bergvall, economist at SEB. Investors have kept a close eye on China’s recent PMI readings for signs of how the world’s secondbiggest economy is faring and the extent to which large-scale stimulus efforts have succeeded. Mr Bergvall said investors had already priced in what is expected to be a historic contraction in global output during the second quarter, which begins on Wednesday, and are instead looking for signs on how and when the world’s economy will recover. “Sentiment has recovered substantially after the stimulus and slowing contagion pace,” said Ken @Businessdayng
Cheung, chief Asia currency strategist at Mizuho Bank, who said the figures could be “an encouraging sign of China’s recovery ahead”. Analysts warned against reacting too exuberantly to the numbers. “This does not mean that output is now back to its pre-virus trend,” said Julian Evans-Pritchard, senior China economist at Capital Economics. “It simply suggests that economic activity improved modestly relative to February’s dismal showing.” Elsewhere, oil prices rose after a tumultuous start to the week in which West Texas Intermediate, the US marker, dropped below $20 a barrel. WTI was up 2.9 per cent at $20.66 a barrel on Tuesday while international benchmark Brent crude gained 0.3 per cent to $22.80. Sovereign bond yields trimmed their rise from earlier in the session, leaving the 10-year US Treasury yield up 0.01 percentage point to 0.68 per cent. Yields fall as prices rise.
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ANALYSIS FT Amazon auditions to be ‘the new Red Cross’ in Covid-19 crisis | Free to read This could be the group’s finest hour but there are concerns about workers being put at risk Dave Lee and Patricia Nilsson
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eff Bezos did not build the Amazon empire with social distancing in mind. At a facility in Texas last week, employees entered the break room to discover most of the microwaves had been removed in an attempt to stop people congregating as they heated their lunch and reduce the risk of contracting coronavirus. “Everything takes much longer,” says Peter, a worker at the warehouse. “People are all over each other.” The tables, big enough to accommodate four, are now strictly for one person. To ensure staff have enough time to practise social distancing, lunch breaks have been increased — by five minutes. “The only thing that they seem to care about is productivity,” says Peter. Last week Amazon provided him, and his colleagues, a letter to give to police in the event they are stopped while trying to get to work. “The employee is providing essential work to support Amazon’s delivery of critical supplies,” the letter reads, “allowing members of the community to remain at home.” Keeping employees like Peter healthy and at work is what stands between Amazon’s finest hour, or the breakdown of the most sophisticated logistics ecosystem ever created. The potential perils for Amazon are enormous. Before the onset of the pandemic, the company was already facing scrutiny from regulators and politicians about its market power. If it is seen to be pushing employees to take excessive health risks during the crisis, the political pressure will intensify. New York’s attorney-general Letitia James has already called for an investigation over the “disgraceful” firing of Chris Smalls, a worker who on Monday helped organise a walkout at a facility on Staten Island, New York. Amazon said Mr Smalls was guilty of “violating social distancing guidelines and putting the safety of others at risk”, having been told to quarantine at home. However, if it can keep its operation intact, investment analysts predict Amazon will emerge stronger and more powerful than ever, just as Ford and General Motors cemented their position as allAmerican corporations by helping the second world war effort. Amazon could become a company admired for keeping housebound citizens healthy, fed and watered — acting at times as though it were an extension of the emergency services. “Every crisis has got villains, victims and heroes,” says Eric Mc-
Nulty, an expert in crisis leadership at Harvard University. “Right now, it’s pretty clear that the virus is the villain and Amazon has a chance to be the hero. The moment is right to do a really good thing.” But, he adds: “They could end up the villain if they wind up putting people in harm’s way.” As the extent of the challenge has become clear, Mr Bezos, the chief executive, decreed in midMarch that only essential goods — medical supplies and household staples — would be allowed into its warehouses. It would mean, temporarily, cutting off everything else from the “everything” store. “I get it,” says James Thomson, a former Amazon manager who now advises third-party sellers. “Amazon is the new Red Cross.” Amazon needs about 270,000 workers to turn up each day to keep its US logistics operation running smoothly, according to logistics expert Marc Wulfraat. “It’s a huge number of people to report to work, given the situation,” he says. Globally, the company’s entire workforce totals 800,000. “We don’t yet know how severe it is,” he says of the probable impact of coronavirus in the US, but he points to the hardest hit parts of Europe, where staffing levels are estimated to be down about 30 per cent, for signs of things to come. “If that’s the case, they need to hire an additional 100,000 people.” That effort is under way. On March 16 Amazon announced it planned to employ 100,000 additional workers across North America and Europe in just a matter of weeks, recruiting some of those recently laid off or temporarily out of work. As part of the move, Amazon said it would also up its US rate of pay from $15 to $17 an hour. Later, it increased overtime payments, too. But as demand surges, the cracks have started to appear. Amazon customers shopping in the past week have been told the earliest they can expect to receive some items is by the end of April — or in some cases not at all. Others found popular items, www.businessday.ng
such as hand sanitiser or respiratory masks, marked up by more than 2,000 per cent. Almost 4,000 third-party sellers have been kicked off the platform for price gouging, Amazon says, accounting for tens of thousands of listings. Users of Prime Now and Amazon Fresh — the sub-two-hour delivery services, used mostly for groceries — are being warned stocks are in short supply, and delivery windows are much longer than usual. Prime Pantry, another option for non-perishable foods, has been shut down, as have many of Amazon’s bricks-and-mortar stores. Apart from Whole Foods, the organic food retail chain it acquired in 2017 for $13.7bn, Amazon’s food infrastructure is in its infancy. Faultlines here are natural, analysts say, for a company that has been built around shifting books and other objects, rather than apples and oranges. To combat this, Amazon has in the past week tried to tempt some of its warehouse workers into fulfilling door-to-door grocery deliveries instead, offering an additional $2 per hour on top of the extra $2 already added. A leaflet pitched the opportunity to workers as a chance to be “exposed” to other areas of Amazon’s business. Amazon’s logistics network, a marvel of efficiency and autonomy, has expanded rapidly in recent years as it doubled down on a strategy of reducing delivery times for customers who paid a $119-a-year Prime membership fee. Amazon’s ability to offer oneday delivery for Prime subscribers in the US was heralded by investors as a triumph, and was credited with driving the company’s market capitalisation over $1tn in February. Today its value is over $950bn. Globally, Amazon says it now utilises 277m sq ft of floor space for logistics, not including its corporate offices or cloud computing data centres — a more than 80 per cent increase since the end of 2016. A further 60m sq ft is expected to be added in the next 18 months.
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Much of that growth is to support the company’s “last mile revolution”, referring to the final steps that take a package to a customer’s door, the most expensive stage of the ecommerce process. As Amazon sought to wean itself off FedEx, in 2017 the company began setting up almost 200 delivery stations across the US. Unlike the huge fulfilment centres, these stations could be situated much closer to communities, and can handle as many as 120,000 packages a day. It was in a delivery station, in Queens, New York, where the first case of coronavirus within Amazon’s US infrastructure was confirmed on March 18. Workers staged a walkout, but the facility was back up and running less than a day later. At least 26 more cases of Covid-19 have emerged, spread across 13 other states, according to voicemail messages received by employees from their line managers, and verified by the Financial Times. One facility, a large warehouse in Kentucky, has been shut down at the request of the state’s governor after at least three cases were discovered. Amazon says the closure has “no impact” on deliveries of goods in the area. The US cases follow a pattern already well established in Europe. It has been just over a month since a branch of Italy’s largest union asked Amazon to protect 1,600 workers at a warehouse based in Castel San Giovanni, only half an hour’s drive away from the town of Codogno, the country’s first major cluster of coronavirus infections. Massimo Mensi, a local representative of Amazon Global Alliance, an international network of labour unions, says workers were not being given masks. “Amazon has said it needs more time, but we have continued pressing them because there is no time — people are dying,” he says. Workers in Amazon’s Castel San Giovanni warehouse were until Friday on strike for two weeks. They returned to work after being allowed to set up an internal @Businessdayng
health and safety committee. Two other large centres in the town of Passo Corese near Rome and the northern municipality of Torrazza Piemonte near Turin are threatening to strike. Christy Hoffman, general secretary of international federation UNI Global Union, says there have been cases of Amazon workers contracting coronavirus in Italy and Spain. “They are not always closing warehouses to disinfect, but more worrying is that Amazon is not creating work conditions where people can respect rules to stay at least one metre away from each other,” she says. Although Amazon has offered two weeks of paid leave to workers who contract Covid-19, Ms Hoffman argues there is no incentive for workers who feel ill but cannot immediately be tested to stay at home. The next pressure point for Amazon is likely to be the UK, which last Monday went into lockdown and hosts the most Amazon warehouses outside of the US. Mick Rix, national officer at the UK’s GMB Union, says he wrote to Amazon three weeks ago demanding emergency procedures be put in place to protect its roughly 30,000 employees and 25,000 contractors in the country, without hearing back. “Amazon refuses to recognise trade unions and they will not communicate with us,” he says. Logistics leader 270,000 Workers required by Amazon each day to keep its US logistics operation running smoothly. Its global workforce is about 800,000 277m sq ft Amazon’s global floor space for logistics, not including corporate offices or cloud computing data centres, a rise of over 80% since end-2016 <200 US ‘delivery stations’ which handle the ‘last mile’ of shipments to customers. Some can handle as many as 120,000 packages a day
Continues on page 42
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Wednesday 01 April 2020
BUSINESS DAY
FT
NATIONAL NEWS
The tragedy of two failing superpowers To address the pandemic, China and the US must not only function. They must function together Martin Wolf
H
istory accelerates in crises. This pandemic may not itself transform the world, but it can accelerate changes already under way. One ongoing change has been in the relationship between China, the rising superpower, and the US, the incumbent. Being a superpower is not just about brute strength, it is also about being seen as a competent and decent leader. After victories in the second world war and the cold war, the US was such a leader. Despite rising economic strength, China is not. But times can change. The coronavirus may accelerate the process. Kishore Mahbubani, a former Singaporean diplomat, has written a characteristically provocative book on the struggle for primacy between the two superpowers under the provocative title The answer, he suggests, is not yet. But it might. This is not just because of its scale, but also because of American mistakes, including false perceptions of Chinese reality. Perhaps the most important conclusion to draw from his analysis is that global influence derives mainly from one’s own choices. China and the US have each made big mistakes. But the US failure to create widely shared prosperity at home, and its bellicosity abroad, are proving crippling. The dismal presidency of a malevolent incompetent is one result. Now has come the virus, an event not considered in this book. It casts a harsh light on the competence and decency of the superpowers. It has done the same on EU solidarity (or its absence), the effectiveness of states, the vulner-
ability of finance and the capacity for global co-operation. In all this, the performance of the US and China is of pre-eminent importance. So what have we learnt? The novel coronavirus, which is causing such social and economic havoc, emerged in China’s Hubei province. There seems little doubt about this. The US National Institutes of Health state that it originated in bats. Irresponsibly and tragically, the local authorities suppressed news of the infection, causing a delay of at least three weeks in the response. That let the virus spread across the world. Thereafter, however, the Chinese state took brutal action, bringing the disease under control in Hubei and halting its spread across China. Relative to population, China’s mortality rate has been very low. Both the initial suppression of bad news and the scale of the response are characteristics
of a repressive, yet effective, state. (See charts.) Effective response to the disease will have had a big economic cost in China. But the state encouraged employers to retain their employees, while also providing support to enterprises to do so. The official urban unemployment rate has risen very little. The largest group of victims has, as usual, been migrant labour. China can now reopen the economy, though there is a risk of a second wave of the disease as it does so. The US has had its own forms of denial, emanating shamefully from President Donald Trump himself, together with huge failures in ramping up testing and providing equipment, as has the UK. Columbia University’s Jeffrey Sachs has written devastatingly of the ill will and ineffectiveness on display. Infections are spreading at fearful speed across the coun-
try. It could get worse. Italy and Spain show how much worse. Yet the US has the additional drawback of a defective health system. The US, like other high-income countries, has now responded with “social distancing”, although Mr Trump has only reluctantly extended it, and a fiscal response, worth $2tn. Roman Frydman of New York University, argues that this is neither big enough, given the scale of the American economy, nor well-focused: only a 20th of this sum is going to hospitals, while state and local governments are short-changed. Worst of all, argues veteran anti-corruption campaigner, Frank Vogl, is a $500bn fund for big corporations likely to be under Mr Trump’s unsupervised control, which is contrary to the will of Congress. The fundamental American principles of democracy and individual freedom remain attrac-
tive to many around the world, despite the global rise of populist autocracy. The vigour of its private economy may yet save us all. But today the US is losing its reputation for elementary competence, already badly battered by its long list of futile wars and the financial crisis of 2007-09. Parts of government, notably the Federal Reserve, remain effective for now, though who knows what would happen in a second Trump term? But the fundamental capability of the often despised “administrative state” — the bulwark of any complex urban civilisation — really matters. At these times of crisis, its absence is lethal. A government at war with science and its own machinery is now very visible to all. For those of us who believe in liberal democracy, these US failures hurt: they give credence to the idea that autocracy works better. But the death of decency and competence in core western governments matters beyond even this. The arrival of the pandemic is a global moral challenge. It is necessary to tackle the spread of disease, manage financial shocks, stabilise the economy and help the weak. The US has to play a big part. There remains no alternative to its role. We have been reminded that no man is an island in a pandemic. As Gordon Brown argues: “Out of this crisis must come reforms to the international architecture and a whole new level of global co-operation.” If this is to happen, some states must lead. Any global order rests on co-operation among powerful states. China and the US must not only function. They must function together, recognising the many interests they share, while tolerating their deep differences.
Amazon auditions to be ‘the new Red Cross’ in Covid-19 crisis | Free to read Continued from page 41 Amazon has so far declined to comment on the true severity of the coronavirus spread, other than to confirm specific cases discovered by the FT using internal sources, social media posts and other news outlets. Its policy is to only directly inform workers who had been on the same shift as a sick employee, leaving the rest of that location’s workforce, and the wider public, in the dark. Whether or not a person is sent home can also be decided using security camera footage, according to a memo sent to staff at a warehouse in Houston, Texas, after a worker there was diagnosed with coronavirus. “We determined via camera footage where the individual last worked and sanitised that area in addition to our current cleaning procedures,” the memo, seen by the FT, read. “Also, we find any person who was closer than 6ft to that individual for more than 15 mins and reach out to those individuals for a [check-up].” It was concerns for their safety and anger at a lack of informa-
tion that led Mr Smalls and other workers to walk out at the Staten Island facility on Monday. “Amazon’s inaction has left workers with no other choice but to walk out of a potentially unsafe work environment to protect their own and everyone’s health. Enough is enough,” says Dania Rajendra, director of Athena, a US workers rights’ non-profit group. The extent to which coronavirus within Amazon facilities presents a health risk beyond the company’s walls is unclear. A study published in The Lancet suggested it may be possible for Covid-19 to survive on cardboard for 24 hours, and other surfaces for longer. More problematic is transmission via the delivery drivers currently handling about 1,000 packages a week each. “We use a different van every day,” says Joey, a driver who works for an independent Amazon distributor in southern California, adding that drivers do not have “enough wipes to clean, or the right gloves”. As demand has increased because of coronavirus, he says he www.businessday.ng
is typically making 150 stops on his shift. “Nobody is complaining about the work,” he adds. “Just give us the equipment we need.” Amazon has said it is taking “extreme measures” to keep its facilities safe: increasing distance between warehouse employees, loosening security processes to speed up movement, eliminating stand-up meetings — all moves corroborated by several employees. But staff report a desperate scramble to comply with the orders. “When we put down social distancing markers on the floor,” says John Hopkins, a worker at a delivery station near San Francisco, “the guy doing it didn’t even have a tape measure — he was just eyeballing it. With the number of people in there yesterday I don’t think it’s even possible for compliant social distancing to occur.” To make sure lower level managers have complied with directives, Amazon has been surveying workers directly at their workstations via the monitor used to display productivity quotas and other data. Last week they were asked:
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“Do you still participate in group meetings in person?” Amazon says its “leaders” are meeting every day to monitor the situation and are “consulting with medical experts to ensure the safety of our sites, employees, partners and customers”. The company says it is “supporting the individuals” who have been diagnosed with Covid-19, and told those who may have been in close contact that they are allowed to stay at home on full pay. But in a letter to employees, Mr Bezos did acknowledge a lack of safety supplies. “We’ve placed purchase orders for millions of face masks we want to give to our employees and contractors who cannot work from home,” he wrote. “But very few of those orders have been filled.” He added: “I’m sad to tell you I predict things are going to get worse before they get better.” If and when things do start to improve, analysts say Amazon is positioned to win big. Consumers will have had their day-to-day habits changed by coronavirus @Businessdayng
lockdowns — accelerating adoption of ecommerce among older demographics, particularly for groceries and other essentials. “For the older generation, the pharmacies and the grocery stores have been part of a routine where they go out and engage with other people and see other people,” says Jefferies analyst Brent Thill. “And I think that dramatically changes going forward.” In a Jefferies study of US consumer habits conducted last week, 34 per cent of respondents said they were spending more on Amazon since coronavirus hit — with health supplies and household goods seeing the biggest rise, followed by groceries. Coronavirus may also serve to hasten Amazon’s ambitions in healthcare. In Seattle, Amazon Care — the division which typically handles internal staff needs — is working with a Gates Foundation-backed initiative to distribute Covid-19 testing kits to residents. A similar scheme is planned in the UK. The moves build on its 2018 acquisition of online pharmacy PillPack.
Wednesday 01 April 2020
Harvard Business Review
BUSINESS DAY
43
ManagementDigest
That discomfort that you’re feeling is grief Scott Berinato
S
ome of the HBR edit staff met virtually the other day — a screen full of faces in a scene becoming more common everywhere. We talked about the content we’re commissioning in this harrowing time and how we can help people. But we also talked about how we were feeling. One colleague mentioned that what she felt was grief. Heads nodded in all the panes. If we can name it, perhaps we can manage it. We turned to David Kessler for ideas on how to do that. Kessler is the world’s foremost expert on grief. He co-wrote with Elisabeth Kübler-Ross “On Grief and Grieving: Finding the Meaning of Grief Through the Five Stages of Loss.” His new book, “Finding Meaning: The Sixth Stage of Grief,” adds another stage to the process. Kessler also has worked for a decade in a three-hospital system in Los Angeles. He served on their biohazard team. His volunteer work includes being an LAPD Specialist Reserve for traumatic events as well as having served on the Red Cross’s disaster services team. He is the founder of grief.com, which has over 5 million visits yearly from 167 countries. Kessler shared his thoughts on why it’s important to acknowledge the grief you may be feeling, how to manage it and how he believes we will find meaning in it. The conversation is lightly edited for clarity. HBR: PEOPLE ARE FEELING ANY NUMBER OF THINGS RIGHT NOW. IS IT RIGHT TO CALL SOME OF WHAT THEY’RE FEELING GRIEF? Kessler: Yes, and we’re feeling a number of different griefs. We feel the world has changed, and it has. We know this is temporary, but it doesn’t feel that way and we realize things will be different. Just as going to the airport is forever different from how it was before 9/11, things will change and this is the point at which they changed. The loss of normalcy; the fear of economic toll; the loss of connection. This is hitting us and we’re grieving. Collectively. We are not used to this kind of collective grief in the air. YOU SAID WE’RE FEELING MORE THAN ONE KIND OF GRIEF? Yes, we’re also feeling “anticipatory grief.” Anticipatory grief is that feeling we get about what the future holds when we’re uncertain. Usually it centers on death. We feel it when someone gets a dire diagnosis or when we have the normal thought that we’ll lose a parent someday. Anticipatory grief is also more broadly imagined futures. There is a storm coming. There’s something bad
out there. With a virus, this kind of grief is so confusing for people. Our primitive mind knows something bad is happening, but you can’t see it. This breaks our sense of safety. We’re feeling that loss of safety. I don’t think we’ve ever collectively lost our sense of general safety like this. Individually or as smaller groups, people have felt this, but all together this is new. We are grieving on a micro and a macro level. WHAT CAN INDIVIDUALS DO TO MANAGE THIS ALL THIS GRIEF? Understanding the stages of grief is a start. But whenever I talk about the stages of grief, I have to remind people that the stages aren’t linear and may not happen in this order. It’s not a map but it provides some scaffolding for this unknown world. There’s denial, which we say a lot of early on: This virus won’t affect us. There’s anger: You’re making me stay home and taking away my activities. There’s bargaining: Okay, if I social distance for two weeks everything will be better, right? There’s sadness: I don’t know when this will end. And finally there’s Acceptance. This is happening; I have to figure out how to proceed. Acceptance, as you might imagine, is where the power lies. We find control in acceptance. I can wash my hands. I can keep a safe distance. I can learn how to work virtually. WHEN WE’RE FEELING GRIEF THERE’S THAT PHYSICAL PAIN. AND THE RACING MIND. ARE THERE TECHNIQUES TO DEAL WITH THAT TO MAKE IT LESS INTENSE? Let’s go back to anticipatory grief. Unhealthy anticipatory www.businessday.ng
grief is really anxiety, and that’s the feeling you’re talking about. Our mind begins to show us images. My parents getting sick. We see the worst scenarios. That’s our minds being protective. Our goal is not to ignore those images or to try to make them go away—you mind won’t let you do that and it can be painful to try and force it. The goal is to find balance in the things you’re thinking. If you feel the worst image taking shape, make yourself think of the best image. We all get a little sick and the world continues. Not everyone I love dies. Maybe no one does because we’re all taking the right steps. Neither scenario should be ignored but neither should dominate either. Anticipatory grief is the mind going to the future and imagining the worst. To calm yourself, you want to come into the present. This will be familiar advice to anyone who has meditated or practiced mindfulness but people are always surprised at how prosaic this can be. You can name five things in the room. There’s a computer, a chair, a picture of the dog, an old rug and a coffee mug. It’s that simple. Breathe. Realize that in the present moment, nothing you’ve anticipated has happened. In this moment, you’re okay. You have food. You are not sick. Use your senses and think about what they feel. The desk is hard. The blanket is soft. I can feel the breath coming into my nose. This really will work to dampen some of that pain. You can also think about how to let go of what you can’t control. What your neighbor is doing is out of your control. What is in your control is staying six feet away from
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them and washing your hands. Focus on that. Finally, it’s a good time to stock up on compassion. Everyone will have different levels of fear and grief and it manifests in different ways. A co-worker got very snippy with me the other day and I thought, That’s not like this person; that’s how they’re dealing with this. I’m seeing their fear and anxiety. So be patient. Think about who someone usually is and not who they seem to be in this moment. ONE PARTICULARLY TROUBLING ASPECT OF THIS PANDEMIC IS THE OPEN-ENDEDNESS OF IT. This is a temporary state. It helps to say it. I worked for 10 years in the hospital system. I’ve been trained for situations like this. I’ve also studied the Spanish Flu. The precautions we’re taking are the right ones. History tells us that. This is survivable. We will survive. This is a time to overprotect but not overreact. And, I believe we will find meaning in it. I’ve been honored that Elisabeth Kübler-Ross’ family has given me permission to add a sixth stage to grief: Meaning. I had talked to Elisabeth quite a bit about what came after acceptance. I did not want to stop at acceptance when I experienced some personal grief. I wanted meaning in those darkest hours. And I do believe we find light in those times. Even now people are realizing they can connect through technology. They are not as remote as they thought. They are realizing their phones have phones, and having long conversations. They’re appreciating walks. I believe we will continue to find meaning now and when this is over. WHAT DO YOU SAY TO SOME@Businessdayng
ONE WHO’S READ ALL THIS AND IS STILL FEELING OVERWHELMED WITH GRIEF? Keep trying. There is something powerful about naming this as grief. It helps us feel what’s inside of us. So many have told me in the past week, “I’m telling my coworkers I’m having a hard time,” or “I cried last night.” When you name it, you feel it and it moves through you. Emotions need motion. It’s important we acknowledge what we go through. One unfortunate byproduct of the self-help movement is we’re the first generation to have feelings about our feelings. We tell ourselves things like, “I feel sad but I shouldn’t feel that other people have it worse.” We can — we should — stop at the first feeling, I feel sad. Let me go for five minutes, to feel sad. Your work is to feel your sadness and fear and anger whether or not someone else is feeling something. Fighting it doesn’t help because your body is producing the feeling. If we allow the feelings to happen, they’ll happen in an orderly way, and it empowers us. Then we’re not victims. IN AN ORDERLY WAY? Yes. Sometimes we try not to feel what we’re feeling because we have this image of a “gang of feelings.” If I feel sad and let that in it’ll never go away. The gang of bad feelings will overrun me. The truth is a feeling moves through us. We feel it and it goes and then we go to the next feeling. There’s no gang out to get us. It’s absurd to think we shouldn’t feel grief right now. Let yourself feel the grief and keep going.
Scott Berinato is a senior editor at Harvard Business Review.
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Wednesday 01 April 2020
BUSINESS DAY
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Volume
PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 211,494.09 5.95 -1.65 121 5,950,269 UNITED BANK FOR AFRICA PLC 170,997.11 5.00 1.00 195 14,497,443 ZENITH BANK PLC 367,338.98 11.70 -2.09 615 29,650,351 931 50,098,063 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 141,786.41 3.95 -1.25 211 8,405,760 211 8,405,760 1,142 58,503,823 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 1,831,906.17 90.00 - 72 509,481 72 509,481 72 509,481 BUILDING MATERIALS DANGOTE CEMENT PLC 2,210,153.81 129.70 - 157 516,740 LAFARGE AFRICA PLC. 148,191.72 9.20 -1.08 143 3,548,960 300 4,065,700 300 4,065,700 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 320,408.06 544.50 - 5 284 5 284 5 284 1,519 63,079,288 REAL ESTATE INVESTMENT TRUSTS (REITS) SFS REAL ESTATE INVESTMENT TRUST 1,386.00 69.30 - 1 10 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 1 409 UPDC REAL ESTATE INVESTMENT TRUST 8,405.05 3.15 - 3 130,000 5 130,419 5 130,419 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 1 3 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 1 3 1 3 6 130,422 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 52,512.75 55.05 - 14 54,973 OKOMU OIL PALM PLC. PRESCO PLC 36,450.00 36.45 - 8 43,500 22 98,473 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,500.00 4.25 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,770.00 0.59 - 3 63,500 3 63,500 25 161,973 DIVERSIFIED INDUSTRIES JOHN HOLT PLC. 217.92 0.56 - 0 0 1,903.99 2.93 - 0 0 S C O A NIG. PLC. TRANSNATIONAL CORPORATION OF NIGERIA PLC 26,827.67 0.66 -2.94 35 1,817,612 U A C N PLC. 20,745.34 7.20 -2.70 44 2,870,127 79 4,687,739 79 4,687,739 BUILDING CONSTRUCTION ARBICO PLC. 423.23 2.85 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 29,106.00 22.05 - 44 244,623 ROADS NIG PLC. 165.00 6.60 - 0 0 44 244,623 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,468.48 0.95 - 0 0 0 0 44 244,623 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 6,263.60 0.80 - 15 21,900 GOLDEN GUINEA BREW. PLC. 829.98 0.81 - 0 0 GUINNESS NIG PLC 55,197.65 25.20 - 32 68,168 INTERNATIONAL BREWERIES PLC. 131,624.14 4.90 - 35 129,339 NIGERIAN BREW. PLC. 205,120.54 25.65 0.59 48 1,332,961 130 1,552,368 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 108,000.00 9.00 - 69 316,975 FLOUR MILLS NIG. PLC. 87,133.07 21.25 2.16 39 1,292,325 HONEYWELL FLOUR MILL PLC 7,771.59 0.98 - 3 20,410 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 22,520.23 8.50 - 24 35,985 UNION DICON SALT PLC. 2,993.06 10.95 - 0 0 135 1,665,695 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 12,771.77 6.80 - 17 43,163 NESTLE NIGERIA PLC. 606,382.03 765.00 - 101 272,206 118 315,369 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 5,316.09 4.25 - 2 10,000 2 10,000 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 17,470.10 4.40 - 33 744,249 UNILEVER NIGERIA PLC. 63,195.06 11.00 4.76 61 2,234,230 94 2,978,479 479 6,521,911 BANKING ECOBANK TRANSNATIONAL INCORPORATED 81,655.50 4.45 - 47 380,672 FIDELITY BANK PLC 51,575.14 1.78 0.56 73 5,229,614 GUARANTY TRUST BANK PLC. 520,931.87 17.70 -1.12 553 16,870,482 JAIZ BANK PLC 14,142.84 0.48 -9.43 12 475,953 STERLING BANK PLC. 33,108.98 1.15 -4.17 17 303,455,868 UNION BANK NIG.PLC. 192,196.97 6.60 - 14 72,067 UNITY BANK PLC 4,909.52 0.42 - 9 447,624 19,287.23 0.50 6.38 31 1,068,889 WEMA BANK PLC. 756 328,001,169 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 8,610.96 0.76 -1.32 22 1,784,037 AXAMANSARD INSURANCE PLC 18,375.00 1.75 - 2 500 CONSOLIDATED HALLMARK INSURANCE PLC 2,439.00 0.30 - 0 0 CORNERSTONE INSURANCE PLC 8,837.70 0.60 3.45 2 1,010,000 909.99 0.20 - 0 0 GOLDLINK INSURANCE PLC GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,611.16 0.22 - 2 70,278 LAW UNION AND ROCK INS. PLC. 4,081.51 0.95 - 6 101,000 LINKAGE ASSURANCE PLC 3,280.00 0.41 - 0 0 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 1 80,000 NEM INSURANCE PLC 10,930.64 2.07 9.52 8 273,140 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 2,960.40 0.55 - 0 0 REGENCY ASSURANCE PLC 1,333.75 0.20 - 0 0 SOVEREIGN TRUST INSURANCE PLC 2,272.89 0.20 - 1 200,000 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 2 101,000 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 5 209,850 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 5,997.92 0.25 - 8 193,340 59 4,023,145 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,629.63 1.15 - 2 53,000 2 53,000
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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 6,784.62 1.05 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 5,671.82 1.36 - 0 0 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,400.00 3.70 - 20 189,122 CUSTODIAN INVESTMENT PLC 34,703.00 5.90 - 10 101,381 DEAP CAPITAL MANAGEMENT & TRUST PLC 495.00 0.33 - 0 0 FCMB GROUP PLC. 29,704.07 1.50 -3.33 79 9,654,403 ROYAL EXCHANGE PLC. 1,029.07 0.20 - 1 397 255,270.71 24.30 - 68 1,105,484 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 13,200.00 2.20 0.45 47 2,055,649 225 13,106,436 1,042 345,183,750 HEALTHCARE PROVIDERS EKOCORP PLC. 2,991.61 6.00 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 923.82 0.26 - 4 80,000 4 80,000 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 593.50 0.60 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 5,299.36 2.54 - 12 25,638 GLAXO SMITHKLINE CONSUMER NIG. PLC. 5,261.86 4.40 10.00 27 286,313 3,692.00 2.14 9.74 16 280,400 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 911.60 0.48 - 5 116,887 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 325.23 1.50 - 1 30 PHARMA-DEKO PLC. 61 709,268 65 789,268 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 -4.76 1 100,000 1 100,000 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,000.21 0.34 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 216.00 2.00 - 12 1,165 287.07 0.58 - 0 0 TRIPPLE GEE AND COMPANY PLC. 12 1,165 PROCESSING SYSTEMS CHAMS PLC 1,033.13 0.22 - 16 15,205 E-TRANZACT INTERNATIONAL PLC 10,962.00 2.61 - 1 235 17 15,440 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,123,311.48 298.90 - 1 250 1 250 31 116,855 BUILDING MATERIALS BERGER PAINTS PLC 1,941.82 6.70 - 2 74,030 BUA CEMENT PLC 1,195,411.70 35.30 - 3 1,278 16,240.00 23.20 - 14 59,401 CAP PLC MEYER PLC. 265.62 0.50 - 0 0 1,769.32 2.23 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 19 134,709 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,192.12 2.03 - 0 0 2,465.85 1.40 - 2 50,000 CUTIX PLC. 2 50,000 PACKAGING/CONTAINERS BETA GLASS PLC. 34,998.04 70.00 - 1 5 GREIF NIGERIA PLC 388.02 9.10 - 0 0 1 5 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 22 184,714 CHEMICALS B.O.C. GASES PLC. 1,685.79 4.05 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 3 5,000 3 5,000 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 77.00 0.35 - 0 0 0 0 3 5,000 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 5 161,500 5 161,500 INTEGRATED OIL AND GAS SERVICES OANDO PLC 25,484.40 2.05 - 23 109,194 23 109,194 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 58,019.78 160.90 - 35 98,814 ARDOVA PLC 17,974.24 13.80 - 2 5,100 CONOIL PLC 9,125.47 13.15 - 9 46,912 ETERNA PLC. 3,116.91 2.39 - 2 6,540 MRS OIL NIGERIA PLC. 4,206.05 13.80 - 7 4,971 TOTAL NIGERIA PLC. 32,695.95 96.30 - 34 48,635 89 210,972 117 481,666 ADVERTISING AFROMEDIA PLC 1,509.28 0.34 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 15,796.05 1.62 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 235.27 0.20 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,779.06 3.00 - 5 25,701 TRANS-NATIONWIDE EXPRESS PLC. 421.96 0.90 - 0 0 5 25,701 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 2 36,000 2 36,000 HOTELS/LODGING CAPITAL HOTEL PLC 4,259.15 2.75 - 0 0 IKEJA HOTEL PLC 1,870.92 0.90 -9.09 1 300,000 TOURIST COMPANY OF NIGERIA PLC. 7,076.28 3.15 - 0 0 TRANSCORP HOTELS PLC 30,401.62 4.00 - 1 750 2 300,750 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 3,960.00 0.33 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 205.63 0.34 - 1 500 LEARN AFRICA PLC 771.45 1.00 - 0 0 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 427.10 0.99 - 1 1,000 2 1,500 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 580.20 0.35 - 0 0 0 0 SPECIALTY INTERLINKED TECHNOLOGIES PLC 688.80 2.91 - 0 0 SECURE ELECTRONIC TECHNOLOGY PLC 1,126.31 0.20 - 0 0
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Wednesday 01 April 2020
BUSINESS DAY
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45
46
Wednesday 01 April 2020
BUSINESS DAY
Live @ The Exchanges Market Statistics as at Tuesday 31 March 2020
Top Gainers/Losers as at Tuesday 31 March 2020 LOSERS
GAINERS Company
Opening
Closing
Change
UNILEVER
N10.5
N11
0.5
FLOURMILL
N20.8
N21.25
0.45
N4
N4.4
0.4
MAYBAKER
N1.95
N2.14
0.19
WAPCO
NEM
N1.89
N2.07
0.18
ACCESS
GLAXOSMITH
Company
ZENITHBANK
Opening
Closing
Change
N11.95
N11.7
-0.25
UACN
ASI (Points) DEALS (Numbers)
N7.4
N7.2
-0.2
N17.9
N17.7
-0.2
VOLUME (Numbers)
N9.3
N9.2
-0.1
VALUE (N billion)
N6.05
N5.95
-0.1
MARKET CAP (N Trn)
GUARANTY
21,300.47 3,448.00 422,004,923.00 1.724 11.100
Market declines further as investors sell banking stocks Stories by Iheanyi Nwachukwu
N
igeria banking stocks were mostly offered for sale in ongoing remote trading, causing a record 0.14percent decline in the Nigeria Stock Exchange (NSE) All Share Index (ASI) on Tuesday March 31. Having declined in the first two sessions of this week, market watchers expect a mixed trading session in Wednesday, with continued sell off in some counters and bargain hunting in others. Top on the list of stocks offered include Zenith Bank, GTBank, and Access Bank. NSE banking index dipped most by -1.12percent while NSE insurance index advanced most by +1.63percent. Stock dealers in 3,448 deals exchanged 422,004,923 units valued at N1.72billion. Sterling Bank, Zenith Bank, GTBank, UBA and FCMB
were actively traded stocks. At close of trading session on Tuesday March, the Nigerian Stock Exchange (NSE) All Share Index (ASI) decreased from day open high of 21,330.79 points to 21,300.47 points while the value of listed stocks decreased from N11.116trillion to N11.100trillion, losing N16trillion. The stock market’s year-
to-date (ytd) negative return increased to -20.65percent. Zenith led the losers league after its share price moved from N11.95 to N11.7, losing 25kobo or 2.09percent. It was followed by UACN which dipped from N7.4 to N7.2, after losing 20kobo or 2.70percent. GTBank share price dropped from N17.9 to N17.7, down by 20kobo or
1.12percent. Access Bank stock reach new low of N5.95 from N6.05, after losing 10kobo or 1.65percent. Amid the negatives, investors raised bets in stocks like Unilever and Flourmills. Unilever share price increased from N10.5 to N11, adding 50kobo or 4.76percent while that of Flourmills rose from N20.8 to N21.25, up by 0.45kobo or 2.16percent.
A
burden of providing decent accommodation for the victims of the pandemic. In a statement, the Company’s Management explained that the move was made in recognition of the fact that the crises at hand was not one that could be solved by the state government alone, but by all stakeholders, especially
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a strategic stakeholder like Berger Paints Nigeria Plc. “We are proud to be part of the urgent processes that will enhance lasting solution to eliminate the scourge of coronavirus in Nigeria. This is the basis upon which the Board and Management approved the donation of our products to the Lagos State Government towards building more isolation centres to be established in the state. “As a good corporate citizen, we identify with Governor Babajide Sanwo-Olu and his administration on the on-going rigorous efforts being made to
FTSE 100 Index 5,663.82GBP +100.08+1.80%
Nikkei 225 18,917.01JPY -167.96-0.88%
S&P 500 Index 2,635.21USD +8.56+0.33%
Deutsche Boerse AG German Stock Index DAX 9,935.84EUR +119.87+1.22%
Generic 1st ‘DM’ Future 22,290.00USD +123.00+0.55%
Shanghai Stock Exchange Composite Index 2,750.30CNY +3.08+0.11%
FCT Court arraigns 22 years old man for impersonating Vetiva Capital
A
22-year-old man, Jeremiah Onochie has been arraigned before a Federal Capital Territory Court sitting in Abuja for impersonating Vetiva Capital Limited and obtaining money from members of the public with a promise of 100 percent interest within one hour. Vetiva Capital Management Limited is a Financial Service company incorporated in Nigeria and is duly regulated and registered by the Securities & Exchange Commission and the Nigerian Stock Exchange to carry on business as an Issuing House, Market Maker and Fund/Portfolio Manager. Also, it carries out business of Trusteeship and Stockbroking. During the arraignment before Senior Magistrate Ibrahim Mohammed of FCT Court 6, it was gathered that Vetiva Capital Management Ltd on January 08, had written a petition against three individuals namely Jeremiah Chukwu Onochie, Hussaini Abdulrasheed and Chinonso Ndu for impersonation and obtaining money from members of the public with the promise of 100percent interest within an hour. One of the suspect Jeremiah was tracked and arrested by Securities and Exchange Commis-
curtail further spread of this coronavirus in the State. Our support is consistent with our corporate social responsibility policy.”,said Anjan Sircar, Berger Paint’s Managing Director. The Management noted that aside the donation, the Company was interested in supporting the state g ov e r n m e n t ’s l a u d a b l e initiatives and disclosed that there were ongoing strategic discussions on how to further assist the state government towards improving the lot of indigenes within the state through vocational training and education.
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sion Police Unit for impersonation by posing and claiming to be the Managing Director of the company. Furthermore, the suspect it was alleged, opened a WhatsApp group which he used to lure investors and promised victims 100percent profits within one hour of investing. He also opened a bank account with UBA Bank Plc and used POS to move the money out of the account within the shortest possible period. The prosecution told the court that bank records showed that about N500,000 was deposited by different investors at different time to the bank account, and there was almost immediate movement of money out of the account. “However, Onochie claimed that on the day he collected this ATM card at the bank on his way from the bank on November 18, 2020, he was ambushed by armed robbers on that same day. The armed robbers at gun point took his ATM Bank Card, the PIN Number and his Bank Account Number and threatened him not to inform the police or even think of reporting to the bank talk more of blocking and changing his account and pin number.
Union Bank ramps up support for the fight against COVID-19 in Nigeria
U
Coronavirus: Berger Paints provides paints for Isolation Centre s a re s p o n s i b l e social citizen and as part of its strategic partnership with the Lagos State government, a frontline manufacturer of paints and allied products, Berger Paints Nigeria Plc has supported the State government’s efforts in combating the devastating Coronavirus (Covid 19) p a n d e m i c t h ro u g h t h e provision of paints towards building more isolation centres in the State. The gesture, consummated last weekend is expected to reduce the financial
Global market indicators
nion Bank has announced additional donations totalling N300million as part of its multi-pronged approach to tackle thespread of Coronavirus in Nigeria. As part of the Private Sector Coalition Against COVID-19, Union Bank has contributed N250 million into the fund set up by the coalition to raiseN120billion to fight the outbreak in Nigeria. In addition, the Bank also made a further donation of N50million to the Lagos State Covid-19: Emergency Food Response programme which was setup to support low income families who will be directly impacted by the statewide restrictions in place to limit the spread of the disease. Lagos State currently has the highest number of COVID19cases in Nigeria. Commenting on the Bank’s active efforts @Businessdayng
to tackle COVID-19 in Nigeria, the Chief ExecutiveOfficer of Union Bank, Emeka Emuwa, said: “The fight against Covid-19 requires all hands-on deck with close collaborationbetween the public and private sector. Union Bank is committed to supportingNigeria’s response to ensure the country avoids a pandemic. We will especially belooking to support ordinary Nigerians who will be disproportionately impactedeconomically at this time.” Last week, as part of its immediate response to the outbreak, the Bank made an initial donation of N50million ($130,000) into a $500,000 fund set up by 54gene, an Africangenomics research, services and development company working closely with the Nigeria Centre for Disease Control (NCDC) to fight the COVID-19 menace.
47
Wednesday 01 April 2020
BUSINESS DAY
PrivateEquity &fundraising
Private equity eyes industries crippled by coronavirus: ‘They have been waiting for this’ MICHAEL ANI
T
he coronavirus pandemic is shutting down entire sectors of the economy and putting millions of Americans out of work, but one corner of Wall Street may find opportunity amid the carnage: private equity. The group, which includes investment giants Blackstone, Carlyle and KKR, has a record $1.5 trillion in cash ready to deploy and has been actively seeking deals across the struggling travel, entertainment and energy industries, according to a half-dozen investment bankers who declined to be identified to speak candidly about potential clients. “They have been waiting for this type of market dislocation,” the head of mergers at a major Wall Street firm told CNBC. “I don’t think they wanted something quite this bad, but they did want a pullback in valuation.” Private equity firms have been stockpiling cash in recent years as rising markets made it harder for them to invest, accumulating a record pile of “dry powder” for deals. The industry typically buys undervalued companies with borrowed money, taking them private to spruce up operations for an eventual sale. The high company valuations that kept them at bay collapsed this month amid widespread business closures and quarantines of some of the world’s largest cities. But the confluence of forces at play — an oft-maligned section of Wall Street seeking money-making opportunities in an election year and amid an unprecedented global crisis that has caused thousands of deaths — could invite greater scrutiny on the industry. Critics including Sen. Elizabeth Warren have said private equity firms enrich themselves at the expense of workers and the companies themselves, which sometimes end up in bankruptcy. “Vulture investors, especially in private equity, are waiting in the wings to scoop up scores of struggling businesses on the cheap,” tweeted Rohit Chopra, an FTC com-
SOURCE: PWC
missioner. The first deals are likely to be investments rather than full-on takeovers, the bankers said. Transactions known as PIPEs, or private investments in public equity, are one way companies under distress can quickly raise cash. The buyer gets shares at a discount, and the new stock typically dilutes the holdings of existing shareholders. “Private equity is trying to do PIPEs all over the place right now,” said a senior investment banker at another top Wall Street firm. The targets are “every industry where stock prices” have collapsed, this person said. One example of a PIPE made during the last crisis: In 2008, Leonard Green & Partners bought a 17 percent stake in Whole Foods for $425 million, an investment that yielded more than $1 billion in profit when shares recovered a few years later. While travel, entertainment and energy companies are in obvious need for cash infusion as demand has evaporated, over the longer term, the coronavirus pandemic could favor industries including health care and home security, according to
a presentation from management consultant Bain. Don’t take the money For now, bank advisors are mostly telling corporations to ignore private equity money as lawmakers close in on a massive stimulus bill. The details of the $2 trillion bill, including the forms of relief struggling companies will get and at what terms, needs to be known first. Another reason for a delay in deals: One banker said that private equity investors “only want to invest in the strongest companies” like makers of consumer staples, or top restaurant chains, and these companies aren’t yet willing to take on expensive forms of capital. Still, even with anticipated federal aid like potential bridge loans, for many businesses, the crisis and its aftermath will take months, if not years, to play out, and collapsing revenue and share prices make them vulnerable to takeovers. Last week, Goldman Sachs warned its clients to expect a rise in hostile takeovers and shareholder activism, according to a presentation sent to clients. The bank told clients that a shareholder rights plan, known as a poison pill, “is the
single most effective takeover protection device” the companies can use, according to Vox, which obtained the memo. A Goldman spokeswoman confirmed its authenticity. To be sure, private equity firms are also exposed to the coronavirus-induced downturn because they already own wide swaths of corporate America, including struggling retail shopping and entertainment properties. Even before the pandemic struck, lenders were increasingly concerned about defaults from companies owned by the PE industry. As a result, many private equity firms are in “defense mode” across their portfolios, said one investment banking head. Barbarians at the Gate Still, because the industry’s management fees are based o n i nv e s t m e nt s t hat a re locked up for years, private equity firms “should be quite resilient in the current market backdrop,” JMP Securities analyst Devin Ryan said Tuesday in a research note. Pr ivate equity became widely known in the 1980s as a generation of corporate raiders including Carl Icahn and T. Boone Pickens sought
bigger and bigger deals, culminating in the $31 billion takeover of RJR Nabisco in 1989. The industry has swollen in size since the financial crisis, adding $4 trillion in assets in the last decade, as institutional investors including pensions and insurance companies seek out higher returns in a low-yield world. Last year, shares of PE firms Apollo and Blackstone soared roughly 90 percent after they changed their corporate structure to take advantage of the 2017 corporate tax overhaul. While the market for leveraged loans has fallen off in recent weeks, leverage of roughly six times a target’s earnings is still available for private equity deals, according to the head of mergers quoted at the beginning of this article. Parties are having conversations about investments in hotels, restaurants, movie theaters and casinos, among other companies. “These are fundamentally good businesses that are going to have a terrible year,” the banker said. “There’s an opportunity for private equity to go in there and take a meaningful stake or buy the company at a valuation they could not have gotten before.”
BusinessDay PRIVATE EQUITY & FUNDRAISING (Team lead: LOLADE AKINMURELE - Analysts: MICHEAL ANI, ... Graphics: David Ogar ) Businessday’s Private Equity and Fundraising section is a weekly publication that provides in-depth analysis on private equity trends and tracks deal activity in Nigeria.
Email the PE & F team loladeakinmurele@gmail.com
Continues on page 34
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BUSINESS DAY Wednesday 01 April 2020 www.businessday.ng
Mira Mehta: Daring to conquer where giants have stumbled CALEB OJEWALE
I
t is hard to find an American leaving the comfort of their country, a Harvard Business School degree in the bag, to come and farm one hectare of land in Nigeria. From working to save children in Nigeria, to farming only one out of three hectares of land as all she could afford at the time, and now growing this to a 500-hectare holding, with a tomato processing unit in the works, Mira Mehta, CEO, Tomato Jos Incorporated, has recreated the famed American dream, right on Nigerian soil. When Mira Mehta, whose company owns Tomato Jos Farming and Processing Limited, came to Nigeria in 2008 to work with the Clinton Health Access initiative, her job entailed working with the Federal Ministry of Health and a few state Ministries of Health to try and increase the usage of paediatric HIV drugs. The objective was to get more efficacious drugs into the system and into the hands of patients. A year later, in 2009, she saw another problem in Nigeria, one millions of farmers grapple with every year and a cause of poverty for many: post-harvest losses. In Nigeria, it is estimated that at least 40 percent of tomatoes produced in the country are lost between farm and market. After months of toiling, many farmers lose almost half of their harvest from the farm, when in transit, and before it eventually gets to the market. Yet, Nigeria as at 2016 was noted in the Agriculture Promotion Policy (APP) document as having a 1.4 million metric tonne deficit for tomatoes. Mehta saw both a problem and an opportunity at the same time. When she was initially deployed to Nigeria, she used to work at the Aminu Kano Teaching Hospital but lived in Abuja and would commute by road everyday she was to be at work. On one of those trips, she noticed around January and February in 2009 that looking around, “everywhere was red because it was covered in Tomatoes; The Road, next to the road, the Rocks next to the road,” she said in an interview. “Everywhere I looked I could see tomatoes and dried onions on the side of the road, it was just this amazing sight, and I was so surprised I asked the driver, what’s going on? Why is this happening? And he said well, ‘there’s an oversupply so the farmers can’t sell the tomatoes’. The price was not favourable (at that time of the year) so they are trying to dry the tomatoes and maybe sell them in the rainy season.”
Mira Mehta
It was at this moment she thought within herself, “There must be something else that can be done with the tomatoes”. Coincidentally, she also recalls that it was around the same time she was learning how to cook Nigerian food such as stew, Jollof, Moi Moi and other delicacies, many of which required using tomato paste. “Then it dawned on me; I just saw all these tomatoes on the road so why can’t we be making these tomatoes into paste?” That was how the idea first came to her in 2009, but she did not do anything about it until 2013 and 2014 when the business actually started. Origin of ‘Tomato Jos’ The initial plan was to set up in Jos as according to Mehta, the tomatoes from Jos are recognized across the country as high quality, and they tend to fetch a premium in the market. Another catch, however, she was further drawn to the phrase “Tomato Jos”, which is a pidgin or Igbo epithet, as a name a person could call their favourite
girl because she is so sweet and fresh. “With the name ‘Tomato Jos’ I feel I can project a brand that is proudly Nigerian, that signals high quality to consumers, and that we can have a lot of fun with when we do our marketing and promotions,” she said. She had intended to set up Tomato Jos in Plateau, but when she came back to Nigeria in 2014, there was an offer to farm for free on a corner of one Zimbabwean farmer’s land. The man named Bruce Spain had a feed mill in Nasarawa State, and offered her some land to farm. “I was broke so I took the offer for free land,” she said. When the time came to look for a permanent location for Tomato Jos, the company searched in Plateau, Nasarawa, Gombe, Adamawa, Kano, Bauchi, Katsina and Kaduna. Eventually the land chosen (in Kaduna) emerged as the best option but by that time the company had already established itself under the Tomato Jos name. “So even though we are in Kaduna, we
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With the name ‘Tomato Jos’ I feel I can project a brand that is proudly Nigerian, that signals high quality to consumers, and that we can have a lot of fun with when we do our marketing and promotions
still call ourselves Tomato Jos,” she said. Preparing to become a leading tomato processor Mehta left Nigeria in 2012 to go to Harvard Business School and in her second year at the business school, while talking to some of her friends who are Nigerians mentioned the idea to set up a tomato Factory. One of them told her “go look up tomato processing in Nigeria on Google because Dangote is doing what you’re saying,” she recalled in an interview, to which she exclaimed “What! No way”. So she went online and saw different articles on tomato processing in Nigeria, and rather than get discouraged, said to herself “this could actually be a real business. If the richest man in Africa thinks there’s an opportunity, maybe I should do my homework too”. During the last semester of business school, I really was just trying to put together a business plan to understand tomato processing and if the operational and financial feasibility make sense. She would later visit different processing facilities, for instance in California then had phone calls with processors in Italy. She also talked to a few processors in China. According to her, every single person she spoke with said, “the most difficult part of this business is the farming. The processing is actually not as difficult as the farming”. Now that it was established the farming had to be fixed before processing could be viable, the first step then became
how to farm commercially, the right quality tomatoes at the right price points. Once that was achieved, the company decided to teach small holder farmers how to farm the right type of tomatoes and achieve the right price points. “Now that we have also achieved that, the next step that we are finally taking is to actually put the processing facility in place,” she said. Changing the narratives of poor yield and quality in tomato farming In the first year when she farmed on one hectare, the farm yield was eight tonnes per hectare. “We were very discouraged because we thought we were coming in with all this special knowledge from California and we ended up just performing the same as the average farmers or just barely better than them” she recalled. However, over the years the company’s productivity has steadily increased and this past year, the farm yields were 36 tonnes per hectare, many times more than the four to seven tonnes yield recorded by local farmers. This, however, did not happen overnight. It took five years to achieve this feat. It was a combination of many things including irrigation, which is important, fertilizer; just like people, plants need to have nutrients in order to grow. There is also use of pesticide, land preparation etc and according to her “generally, what we found is that you cannot just do it in one season”. Setting the future in motion In January, the company had a groundbreaking ceremony for its tomato processing factory, with groundbreaking formalities performed by Nasir El Rufai, Governor of Kaduna State, Godwin Emiefiele, Governor of the Central Bank Nigeria (CBN), John Coumantaros, chairman, Flour Mills of Nigeria Plc, Mary Beth Leonard, US Ambassador to Nigeria and Mira Mehta, CEO, Tomato Jos. At scale, the company expects to farm and support farmers on more than 3,000 hectares of land, source 150,000 tons of tomatoes, and produce 10 percent of the tomato paste and tomato products consumed in Nigeria. Tomato Jos’ also says it primary goal is to produce branded, retail-packaged tomato mix and paste, which will be sold to distributors and marketers in Nigeria. Beyond tomato, the company intends to engage in year-round crop cultivation of maize, soya, wheat, and other crops, as well as food processing and value addition for the Nigerian and West African markets.
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