BusinessDay 01 Mar 2021 by BusinessDay

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news you can trust ** monday 01 march 2021 I vol. 19, no 767

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One Italian in, 1,905 dead: Nigeria’s race against COVID-19

Rise in renewables sees decline in oil discovery skills STEPHEN ONYEKWELU

Temitayo Ayetoto

Continues on page 30

Dangote Cement plc

410.25

covid-19: one year after

hen COVID-19 h i t I y a b o’s 70-year-old m o t h e r, s h e and her siblings whispered to the doctors not to disclose it to her, though the “COVID-19, Infectious Diseases Centre” sign was visible all over the isolation centre in Yaba. They feared she would die of anxiety long before the virus pounced on her underlying illnesses - diabetes and hypertension. But when the Lagos commissioner for health visited, and COVID-19 kept springing out of his words as he moved around the ward, Iyabo’s mother started panicking. Though Mama Iyabo was semi-literate, the children successfully convinced her that COVID-19 was not the only dis-

FGN

Spot ($/N) 26-Aug-21 5-Mar-21 23-Jul-30 30-Apr-25 20-May-27 27-Feb-34

$-N 470.00 480.00 1m £-N 658.00 665.00 Currency Futures 31-Mar-21 419.08 €-N 574.00 580.00 ($/N)

Benchmark Sovereign & Corporate Bonds

enewable energy has continued its blazing rise, creating a growing market for new jobs and causing a decline in demand for oil discovery skills that were once the dream of science and engineering inclined students. The demand for oil accelerated with the invention of the motor car in the 19th Century. As car ownership grew so did the demand for oil to make the petrol (gasoline) use as fuel. This is changing rapidly. Continues on page 30

Inside

Nigerians work hardest to buy internet data P. 31 L-R: Ogoh Okiti, MD, BusinessDay Media Limited; Femi Adesina, SA to the President on Media; Rasheed Ayo Oyebode, Oba of Iragbiji; Aminu Ado Bayero, Emir of Kano; Adegboyega Oyetola, governor, Osun State, and Kafayat Oyetola, fIrst lady of Osun State, during the BusinesDay National Discourse and Good Governance Award, with theme ‘Rewarding Excellence in Governance’ held at Transcorp Hilton in Abuja. Picture by Tunde Adeniyi

Apapa: Residents, businesses in high spirit as sanity returns to port city P. A4

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Beyond elite’s ‘harassment’: A fair assessment of President Buhari’s government GLOBAL PERSPECTIVES

OLU FASAN

resident Buhari recently complained that Nigeria’s elite were treating his government unfairly. Speaking after revalidating his party membership in Daura, Kastina State on January 31, President Buhari said: “No, Nigeria’s elite are not interested in rating the competence of my government, but they are interested in harassing us with all the efforts we are making.” To be sure, Buhari has always argued that he inherited a “state of decay and rot” but has “worked so hard with limited resources” to make things better. In his New Year’s message in January, the president said, “I call upon all Nigerians to carefully recall the circumstances of our coming to office, the facts on the ground and the resources at our disposal since 2015 with the accomplishments of this administration.” So, Buhari’s angst with the Nigerian elite, whoever they are, is that they are not giving his government the credit it deserves. But how true are President Buhari’s claims? Well, the truth is that he, indeed, inherited a bad situation, but it is also true that he has made the bad situation a lot worse through bad policies, unwise actions and, indeed, inactions. It is simply not true that he has improved the situation he met in office. That said, it would be unfair to say that President Buhari’s administration hasn’t achieved nothing in its nearly six years in office. No government, however bad, can have no achievement at all. So, before we come to his administration’s failings, let us look at its achievements. For me, there are, broadly speaking, three! First, President Buhari has supported many Nigerians to secure important international jobs. For instance, history will record that it’s under his administration that a Nigerian, Dr Ngozi OkonjoIweala, became the first African and the first female Director-General of the

World Trade Organisation. President Buhari deserves credit for nominating Dr Okonjo-Iweala for the WTO top job and for standing by her candidacy through thick and thin. He did the same thing for Dr Akinwumi Adesina, supporting his election and re-election as president of the African Development Bank, also standing by him in difficult times. These diplomatic victories are good for Nigeria and President Buhari should be credited for his role in achieving them. Second, the Buhari administration has made some progress on infrastructure, particularly railways, albeit almost entirely debt-funded, with Chinese money and firms being front and centre of it. But the government’s claim of a “rail revolution” has some truth in it; the railways, Buhari’s pet infrastructure, are, indeed, being resuscitated. Third, President Buhari has signed into law several critical bills that had gestated and languished for several years, even decades. Notable among these are the Companies and Allied Matters Act (CAMA) 2020, which replaced the 30-year-old Companies and Allied Matters Act of 1990, and Nigeria’s first-ever Federal Competition and Consumer Protection Act 2018. These laws are not perfect but, given how long we talked about the need for them, their enactments by Buhari’s administration are significant, and to his credit. But, let’s face it, all these achievements, laudable as they may be, are easy wins. None of them requires great competence. For instance, any president can nominate a citizen for an international job, even if he lacks the international clout to secure victory for him or her. Dr Okonjo-Iweala said in one interview that while the Nigerian government provided basic assistance, she relied mainly on her own resources and global network of contacts to campaign for her selection, and, as we know, without the election of President Biden she wouldn’t have got the job. Indeed, Dr OkonjoIweala explicitly admitted that in her acceptance speech, saying, “Without the recent swift action by the Biden-Harris Administration to join the consensus of the membership on my candidacy, we would not be here today.” Equally, any president can sign contracts with China for rail constructions, funded by China and executed by Chinese firms. Given how willing China is,

in pursuit of its strategic Belt and Road Initiative, to fund and build railways overseas, no government should take too much credit for China’s debt-financed infrastructure projects. Indeed, infrastructure socialism, where government solely funds infrastructure projects through borrowings, without private investment or financing, is no real achievement. The Buhari government recently formed the Infrastructure Corporation of Nigeria Limited (InfraCorp), a publicprivate infrastructure fund. But, despite InfraCorp, Nigeria lacks the policy and institutional environment to attract serious private infrastructure investment. Finally, any president with a parliamentary majority can secure the enactments of bills and sign them into law. Furthermore, with weak administrative and institutional capacities, the new laws will face huge implementation challenges. So, truth is, President Buhari has simply picked the low-hanging fruit. On his key election promises, he completely comes a cropper. In a democracy, elected politicians are judged by their manifesto commitments. In 2015, President Buhari ran on a platform of economic revival, national security and anti-corruption. But on each of these, he has, nearly six years in power, failed woefully to deliver on his promise. What exactly has Buhari done on the thorny issues of economic deterioration, worsening insecurity and endemic corruption? The answer is not much at all! Take the economy. It is in a terrible shape. The economy is certainly a lot worse today than what Buhari inherited in 2015. Since then, there have been two recessions, making him a two-recession president. Recently, some were praising President Buhari for the economy’s unexpected exit from recession, as the GDP grew by 0.11% in the fourth quarter. But really? What kind of recovery is that? How will that sluggish growth reduce poverty in Nigeria? About 3.5m young Nigerians enter the working age every year, where are the jobs for them? Under Buhari’s government, Nigeria became the “poverty capital of the world”, and business failures, capital flight, inflation and unemployment have skyrocketed. And why? Well, because of bad policies and unwillingness to undertake critical reforms. The Buhari government’s entrenched protectionism and

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The Buhari government’s entrenched protectionism and interventionism has done irreversible damage to private-sector dynamism, business growth and investor confidence

Dr. Fasan, a London-based lawyer and political economist, is a Visiting Fellow at the London School of Economics. e-mail: o.fasan@lse.ac.uk, twitter account: @olu_fasan

Agricultural production and development of the Nigerian economy

he agricultural sector is seen as an engine that contributes to the growth of the overall economy of Nigeria. Despite efforts, the sector is still characterized by low yields, low level of inputs and limited areas under cultivation due to government dependence on a mono-cultural economy based on oil. The sector faces many challenges, notably an outdated land tenure system, lack of access to finance, poor road network, supply-chain linkages, violent conflicts, outdated system of agriculture etc. Still, the relationship between agriculture and development in Nigeria cannot be overemphasized. As a roadmap to attaining development, the 2030 Agenda for Sustainable Development, adopted by all United Nations Member States in 2015, provides a shared blueprint for peace and prosperity for people and the planet, now and into the future. At its heart are the 17 Sustainable Development Goals (SDGs), which are an urgent call for action by all countries - developed and developing - in a global partnership. They recognize that ending poverty and other deprivations must go hand-in-hand with strategies that improve health and education, reduce inequality,

and spur economic growth. Nigeria is a member state of the United Nations and if the SDGs is anything to go by, it shows that 70% of the development target group of the SDGs live in rural areas and are dependent on agriculture for a living. Invariably, reducing poverty, improving nutrition and general well-being of the population would imply improving the livelihood of this majority and this hinges critically on the performance of the agricultural sector. Nigeria’s budget is usually earmarked based on crude oil price while the agricultural sector is not much on the scene but that contributes more to the development in the country. According to the latest report released by the Nigerian Bureau of Statistics (NBS), in 2020, agriculture provided 23.63 percent of Nigeria’s total Gross Domestic Product (GDP), followed by trade 14.94 percent and telecommunication 12.18 percent. The oil sector, which is one sector that is usually given more attention, contributed only 8.16 percent to the GDP in 2020. In 2019, the oil sector contributed 8.78 percent while agriculture contributed 25.16 percent. If we even pry further, we will see that trade, telecommunica-

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tion and the manufacturing sector contributed more to the GDP of Nigeria when compared to the oil sector. So why so much noise about the oil sector? If we go down history, we will realize that agriculture has been the mainstay of the economy since independence and despite several bottlenecks; it remains resilient and sustains the populace. In the 1960s, Nigeria was the world’s largest exporter of groundnut, the second-largest exporter of cocoa and palm produce and an important exporter of rubber and cotton. A recent report by StatiSense, an international statistics firm with expertise in providing data services such as analytics, research, reporting, etc, has shown that Nigeria is the largest producer of Pineapples in Africa and the 7th producer in the world. Nigeria also took second place as the largest producer of Tomatoes in Africa and the 11th producer in the World. The report which was released in December of 2020, showed the position of Nigeria as regards the agricultural production capacity, referencing documents from the UN Food and Agriculture Organization (FAO), which is a specialized agency of the United Nations that

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interventionism has done irreversible damage to private-sector dynamism, business growth and investor confidence. A president whose body language and policy instincts are hostile to the private sector cannot engender confidence in an economy. A central bank governor whose reflex policy response is to ban things, rather than pursue marketbased reforms, cannot inspire business confidence. A country without a single market-based exchange rate, but rather multiple exchange rates that create arbitrage opportunities, can’t boost investor confidence or be an attractive investment destination. Truth is, Nigeria needs to be seen as a good place to do business, as an attractive investment destination. But the Buhari government doesn’t care about such things. It behaves arrogantly and ignores calls by the IMF and other international economic institutions for structural reforms. As a result, the economy is comatose, with the possibility only of a weak or anaemic recovery. What about national security? Well, Nigeria faces greater threats to its security and internal cohesion today than it did before Buhari became president in 2015. Everyone knows that the security situation is worsening and deteriorating. As I write, the BBC has just reported that at least 300 girls are feared kidnapped by gunmen in Zafara State. Under Buhari, terrorists and armed bandits are literally in control! Finally, what about corruption? Well, despite nearly six years of a much-hyped anti-graft war, the recent verdict of Transparency International says it all: Nigeria is the second most corrupt country in West Africa! Say no more! So, Nigeria’s elite are not unfairly harassing President Buhari’s government. Any assessment of his government shows that, at best, it is only picking the low-hanging fruit and, at worst, it’s making bad decisions and avoiding critical reforms. True, Buhari inherited a bad situation, but he has made it utterly worse. Saying that is not harassment; it is a fair assessment!

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VICTOR EJECHI leads international efforts to defeat hunger. The data also revealed that Nigeria is the largest producer of Yam in the World, accounting for over 70 to 76 percent of world production. Nigeria also came in the fourth position with 2.4 percent in the production capacity of Oil Palm Fruit in the world with Indonesia taking the first position with 59.8 percent, Malaysia 24.1 percent and Thailand percent. The relationship between the agricultural sector and other sectors should not be a competition but rather be viewed as interdependent where supply and demand in sectors can be accommodated through strengthened linkages. Neglect of the agricultural sector in favour of the oil sector will only lead to slow economic growth and inequality in income distribution. Therefore, even though agriculture may be unable to singlehandedly transform an economy, it is a necessary and sufficient condition in kickstarting industrialization in the early stages of development. Victor Ejechi is the Media and Communications Specialist with StatiSense

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BASHORUN J.K RANDLE

rom “The Times” of London (Wednesday July 15, 1998) we have the following front page letter with the headline: “NIGERIAN LESSON” duly signed by Sir Peter Smithers: “Sir, During the negotiations for the independence of Nigeria the view of the Secretary of State at that time, with which I agreed, was that in Nigeria we should attempt to put together a large and powerful state with ample material resources, which would play a leading part in the affairs of the continent and of the world. This was attractive but it involved forcing several different ethnic and cultural groups into a single political structure. The negotiations were complex and very difficult, the chief problem as I remember relating, significantly, to the control of the police and the military. In the retrospect of 40 years it is clear that this was a grave mistake which has cost many lives and will probably continue to do so. It would have been better to establish several smaller states in a free-trade area. In exculpation it must be said that we did not then have the examples

of the collapse of Yugoslavia and of the Soviet Union before our eyes. I should now be clear for but the wilfully blind to see that it is extremely dangerous to force diverse racial and social entities into a single rigid political structure such as that which is being built upon the foundation of the Maastricht treaty. Recent history suggests that it would be best to complete the development of the Common Market and to call a halt to political integration in Europe.” Amongst the heaps of documents downloaded by Julien Assange / Wikileaks was a statement credited to Alhaji Othman Ngelzarma, Miyetti Allah leader on Saturday 6th February, 2021: Headline: “INSECURITY: SETTLEMENTS FOR HERDSMEN IN STATES ONLY RECIPE FOR PEACE. •You can’t ban open grazing without showing herders where to graze •their cattle •South benefits more from cow than North. “We have lost over three million cows as a result of cattle rustling. This has made so many families to become poor and because their children are poor (and ignorant) with no education, prevalence of drought and proliferation of arms, so they become easy prey for initiation into crimes. That is the reason whenever you catch them, if you interview them, they will tell you that N5 million was collected as ransom, but they were given N20,000 or N50,000 out of the money. That goes to show you that there are some big guys behind the

whole thing (kidnapping).” Corroboration was provided by the front page of “Vanguard” newspaper of February 6, 2021 with the following bold headlines on its front page: R-E-V-E-A-L-E-D •“KIDNAP MERCHANTS SPONSOR OPERATIONS, COLLECT RANSOM, PAY KIDNAPPERS TOKEN FEE.” •“BANDITS ARE AGENTS OF SOME MASTERS IN CITIES “ -Sheikh Gunmi •“THEY COLLECT MILLIONS BUT REMAIN RAGTAD; THEY ARE FRONTS” -Senator Shehu Sani •“OUR HUNTERS ONCE CHASED THEM, THEY RAN INTO A WAITING JEEP AND ZOOMED OFF” Edo Traditional Ruler •“HOW THEY CONNIVE WITH RESIDENTS OF SOME COMMUNITIES” •“I EXPOSED YORUBA, FULANI KIDNAPPERS” -IganganSeriki Fulani, sacked •from Oyo by Sunday Igboho Even more startling was a document that was allegedly filched from the FBI (Federal Bureau of Investigation). The caption was “WHITE SUPREMACISTS URGE MEMBERS TO SPREAD CORONAVIRUS TO AFRICANS, JEWS, COPS.” The jumbled report read as follows: “White supremacists are encouraging their members to spread coronavirus to African Americans, Jews and law enforcement, according to the FBI. African Americans have

‘ It is extremely dangerous to force diverse racial and social entities into a single rigid political structure

been hit hardest by the coronavirus, contracting and dying of the virus at disproportionate rates. Now the FBI reports that white supremacists, neo-Nazis and other extremist groups are encouraging followers infected with the coronavirus to spread the deadly disease to Black people, Jews and members of law enforcement. ABC News recently obtained an alert sent by the FBI’s New York office that warned that “members of extremist groups are encouraging one another to spread the virus, if contracted, through bodily fluids and personal interactions.” The alert, which was sent to local police departments, said extremist groups were directing members to use spray bottles to spread infectious fluids, people reported. The groups also advised members to leave “saliva on door handles” at FBI offices throughout the country, spit on elevator bottons and spread the virus in “non-white neighbourhoods,” the brief states according to MSNBC. “White Racially Motivated Violent Extremists have recently commented on the coronavirus stating that it is an ‘OBLIGATION’ to spread it should any of them contract the virus,” the FBI brief said.

J.K. Randle is a former President of the Institute of Chartered Accountants of Nigeria (ICAN) and former Chairman of KPMG Nigeria and Africa Region. He is currently the Chairman, J.K. Randle Professional Services. Email: jkrandleintuk@gmail.com

Achieving board effectiveness using board committees

he composition, mix and structure of the Board of Directors of a Company and the effectiveness of the decision making process are key elements of sound corporate governance. A Board Committee consists of Directors mandated to carry out specified functions assigned by the Board. The establishment of Board Committees is one way of achieving greater efficiency in the performance of the Board’s oversight functions, thereby strengthening the Governance structure. The Companies and Allied Matters Act (CAMA) allows the Board to exercise its powers through Committees consisting of such members of the Board as it deems fit. Section 9.1 of the SEC Code of Corporate Governance for Public Companies provides that the Board “should determine the extent to which its duties and responsibilities should be undertaken through Committees”. It goes on to recommend the establishment of a Governance and Remuneration Committee, a Risk Management Committee and any other Committee that the Board may deem appropriate, depending on the size, needs or industry requirements of the company. The various industry Codes have similar provisions. The Nigerian Code of Corporate Governance 2018 recommends the establishment of the Nomination and Governance, Remuneration, Audit and Risk Management Committees. It further recommends that each Committee should be composed of at least three members with a majority of Independent Non-Executive Directors. The Board may combine any of the responsibilities of Board committees, taking into consideration the size,

needs and other requirements of the Company. All members of the Audit committee should be financially literate and should be able to read and interpret financial statements. At least one member of the committee should be an expert and have current knowledge in accounting and financial management. Beyond regulatory compliance however, Board Committees if properly structured are indeed quite useful to the overall efficiency and effectiveness of a Board. Generally, Board Committees focus on specific areas, thereby allowing the Board concentrate on more strategic issues. An effective Committee structure allows the Board to focus expertise where it can best be utilized, and also manage the flow of information so Directors are not unduly burdened with too many details that may hinder rather than facilitate effective decision making. Committees are usually charged with drilling down on specific issues; generally assume responsibility for forming an opinion on such issues and making recommendations to the Board. They are at liberty to seek independent professional advice at the expense of the company and seek clarification from senior management as required. An effective Board is composed of Directors with diverse experience, skills and expertise. To maximize the benefits of this diversity, Committees should comprise of Directors with relevant skills and competences in specific areas. Membership of Committees also affords Directors the opportunity of gaining better insight into the business of the company in respect of which they have oversight responsibilities. www.businessday.ng

When used effectively, Committees can increase the Board’s ability to carry out its mandate. It is however key to note that while the Board may delegate some responsibilities to Committees, the Board as a whole retains ultimate oversight responsibility over the affairs of the Company Whilst Committees would make recommendations to the Board based on extensive consultations and deliberations, the Board has to approve such recommendations before they become effective. To ensure the effectiveness of the Committee structure, the Board should ensure that Committees are composed of Directors with the relevant skills and who are able to devote sufficient time to Committee work. The Board should also ensure that the requisite information is made available to its committees in a timely manner. Below are some of the elements that would ensure Board Committee effectiveness: Committee Charters It is recommended that Board Committees have specific Charters or terms of reference setting out their roles and responsibilities in the area of membership, quorum, scope of work, as well as authority and reporting obligations. Effective Committee Chairs As with the Chairman of the Board, the role of the Committee Chairman is an important one and the effectiveness of the incumbent ultimately determines the effectiveness of the Committee. Thus the Board should carefully select Committee Chairs, taking cognizance of availability, strength of character, relevant skills set (knowledge, experience, proven leadership and people’ management) respect

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BISI ADEYEMI from peers, etc. Accountability to the Board The Board must clearly communicate to Committees its expected reporting format, substance and frequency of receiving such reports. Usually, the expectations of the Board are encapsulated in the Committee Charters. The Board should ensure that the performance of its Committees is evaluated annually to ensure that they continue to be effective. An emerging trend that makes for even greater effectiveness is the attendance of nonCommittee members of the Board at Committee meetings. This practice ensures that deliberations at the Board meeting are more inclusive as the non-Committee members would have had the benefit of the reasoning that went into recommendations by the Committee to the Board. To retain the utility of the Committee system, it is important that the composition be refreshed periodically whilst ensuring that Directors with relevant expertise and experience sere on Committees to which there experience and qualifications are best suited.

Bisi Adeyemi is the Managing Director, DCSL Corporate Services Limited. Kindly forward comments and reactions to badeyemi@dcsl.com.ng.

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The Nigerian Army: Understanding the psyche of a bully ‘ The Nigerian DAVID HUNDEYIN

n June 2013, at the Ido-Osi NYSC orientation camp in Ekiti State, I had my first encounter with the Nigerian army in its true form. My camp commandant, a certain Lt. Col Gold decided to address all of us ‘white fowls’ one day with a spine-chilling comment. He said and I quote: “If I get an order to shoot all of you now, I will do it without thinking twice.” I have never forgotten the smirk on his face when he made this comment. It was extra chilly for me because I knew that the fellow in question was not lying or exaggerating. Just a few days before, I had been forced to call in a favour using my family name to get him to back off from sexually harassing a female corps member whom I was friends with. I have never been able to forget the look of utter terror on her face when she revealed to me that he had ordered her to report to his quarters after hours. These memories remained largely in my subconscious until the story

emerged last week of the Nigerian Army’s atrocities following its violent crackdown in Obigbo, Rivers State. Dozens of young women coming back from their places of work were abducted by soldiers and taken to their barracks in Imo, then subsequently Abuja, where they were repeatedly raped and assaulted for nearly 3 months. Once again I was reminded that this is the true face of the Nigerian Armed Forces - a foul, despicably power drunk, violent and thoroughly undisciplined militia group with political legitimacy. Bullying and narcissism go hand in hand Something that my childhood did for me was that it completely inoculated me from the concept of being bullied in future, by exposing me to extreme forms of torture and bullying at a very tender age. Where most children see their mother as a source of warmth, love, tenderness and affection, I was forced to learn very early on what it felt like to be brutally beaten, burned and to suffer fractures simply depending on what side of the bed my mother woke up on. This gave me a very keen and unencumbered insight into the mind of a bully and how it works. I was too young to be able to resist or fight back, so all I could do was learn how the bully’s mind worked and try to always stay one-step ahead. The most important thing I came to understand about bullying is that it goes hand

in hand with narcissism and a false, inflated self-image which needs external validation. A bully is not satisfied to merely be stronger than you and to prove it, but also needs validation from people around - especially the victim - affirming either that they are indeed stronger, or that they are wonderful, excellent people. A bully does not typically want to be acknowledged as a bully in public, so they will often bully the victim into becoming loud evangelists of their righteousness and rectitude. In my case, while surviving everyday without suffering serious injury or even loss of life at my mother’s hands was not a given, I won a nationwide essay writing competition titled “Peak Mom of the Year.” Mom of the Year she absolutely was not, but it was very important to her ego for her to be recognised this way. The Nigerian Army does something similar to this with its constant protestations of innocence, its call to ‘patriotism,’ its denunciation of alleged ‘5th columnists’ and its relegation of its proven atrocities to “a few bad eggs.” The Nigerian Army as we know, is a colonial institution set up to protect the state from the citizens, and this remit has not changed since independence. Its usual tactic of committing civilian massacres, burning down geographical areas, carrying out mass rape and dumping bodies into mass graves or water bodies is a matter of historical fact. Nobody can deny that

Army as we know, is a colonial institution set up to protect the state from the citizens, and this remit has not changed since independence

which produced the advertisements; on behalf of the client who paid for these; and placement in the media which exposed it to the public. Whereas advertising was traditionally seen as the creation and distribution of persuasive messages by or on behalf of the clients, there is now a new sense in which it is largely seen from the practitioners’ perch to be “a moving set of interlocking pieces and parts involving multiple players/ promoters who are constantly and continuously evolving, emerging, and adapting so that the field is being reinvented on almost a daily basis” according to the American Northwestern University Illinois’s emeritus professor of advertising, Don Shultz. Shultz traces how he was influenced by the AAA (American Advertising Association) in 1993 to understand how, the then disharmonious communication instruments of Public Relations. Advertising, Direct Marketing, Media etc could be harmonized as an orchestra for the benefit of the brands and ideas. Every new medium engages advertising in not-always accurately predictable encounters to yield challenges and opportunities that characterize historical periods. So, it is with the internet which by the mid-1990s showed itself with other e-brand promotions to have the capacity to change the entire advertising landscape. These changes are still with us leading to the phenomenal new developments, which have come to be described by various sobriquets, including the TBWA characteristic philosophy of Disruption. To some observers, disruption is evidence that advertising is dying or in fact dead because it is a strategic move away from the tradition of agencies producing marketing messages for clients who are often not much involved

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CHARLES C. OKIGBO & KELECHI S. NWOSU

in the process. But to others, disruption is evidence that traditional advertising is dead because the impactful agency of the moment must be more than the producer of staid messages. As Jean-Marie Dru, Chairman of TBWA Worldwide agencies explained it, disruption is actually “disruptive innovation” which means more than the formulaic “thinking outside the box” to include focusing on products, services, platforms, and messages that are not necessarily linear, traditionbased, and reflective of linear thinking. The old ways should be supplanted by different and more appropriate innovative methods. For any company, especially an advertising agency to perform excellently in our new world of constant change, it must think disruptively, create disruptively, and act disruptively in everything it does. In his words “We must try to avoid anything that leads to linear or incremental growth. We seek disruption.” In a 2016 paper “The future Advertising or whatever we’re gonna call it” published in Journal Of Advertising, Prof Don Schultz suggests that challenge for predicting the future of advertising also lies in the fact that there is no acceptable definition for advertising . He suggests that a set of three postulates will be responsible for the definition of advertising in theory and practice in future . “Three scenarios are proposed for the future of advertising: (1) creeping incrementalism; (2) reversal of buyer/seller roles, and (3) reinvention of the field. The author suggests that those scenarios will develop and play out based on the developmental speed and acceptance of the various technologies identified.”[i] Similarly, Sarah Begley in an article in Time Magazine makes the following as-

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Nigerian citizens are terrified of the army - but the army wants more than just fear. It also wants respect, honour, reverence and gratitude from the very subjects of its atrocities. Fixing a narcissistic bully So how can this dumpster fire state of affairs be rectified? How do you repair an army that is fundamentally and irretrievably unfit for purpose? How do you build genuine trust and respect for an institution that has spent 60 years trying its level hardest to prove that it is not worthy of the slightest hint of these things? The answer is actually simpler than it might seem. To put it plainly, the entire command structure of the army needs to be fired unceremoniously. Every commanding officer who is steeped in the toxic bullying culture learned from the National Defence Academy needs to be decommissioned or retired forthwith. From Captain to General, the command system of the army must be purged to remove all traces of African Bush Militia culture. Of course this would come with the significant risk of a coup attempt by the famously well disciplined and non-treasonous officer cadre. So who is the president that will be brave enough to bell this particular rabid cat? That is why I used the word ‘simple.’ I never said it would be easy. Hundeyin is a writer, travel addict and journalist majoring in politics, tech and finance. He tweets @DavidHundeyin.

Advertising is dead, but long live advertising!

any advertising teachers, practitioners, users of this important genre of persuasive communication say that it is now dead, although we dare say that thisis hardly the case. Advertising is resilient enough to withstand all the knocks and shocks, and will indeed become stronger and more useful to the media, marketers, governments, nonprofit organizations, and the wider publics of consumers. Yes, advertising as we taught and practiced it before the millennium appears to be dying, but gloaters eager to sing its dirge or compose its obituary are likely to be disappointed because the soul and spirit of advertising, its life essence will be with us for a long time, if not forever. The essence of advertising has become more ubiquitous and nearly omnipotent than we can imagine, and so it is folly to think that advertising is dying. Yes, there is disruption, convergence, fusion, some confusion, realignment of roles and functions, some usurpation, disintegration, disaggregation, and many other new developments, yet the essence of advertising remains. Teaching advertising to mass communication students at the University of Nigeria and the University of Lagos in the 1980s and 1990s, we emphasized the traditions of the classical models of the full-service agency, represented by the pioneering A. J. Ayer, and later David Ogilvy, and closer home Messrs. I. S. Moemeke of Lintas, ‘Biodun Shobanjo of Insight, and Akin Odunsi of Rosabel, among others. It was this classical model that held sway in the founding of our advertising agency Concept Unit in Lagos in 1984, and even up to its affiliation with the global advertising and publicity giant TBWA in 2000. Advertising was simply managing the tripartite relationship among the agency

sertion: “In the future, advertisers will ask not what their customers can do for them, but what they can do for their customers. Or so argues Andrew Essex, the former CEO of advertising agency Droga5, in “The End of Advertising,” which highlights how brands must do more to break through in the age of ad blockers and commercial-free streaming. Consider Lego and American Girl, which sell toys through movies designed to entertain their target audience, or Citibank, whose sponsorship of New York City’s bike-sharing program did wonders for its brand. (During the two years following Citi Bike’s launch in 2013, the number of people who said they would consider giving their business to Citibank rose by 43 percentage points, according to company data.) Eventually, Essex writes, it may even become commonplace for corporations to sponsor infrastructure projects, like highways and bridges, as consumers continue to applaud brands that are “looking to add value to people’s lives rather than annoy them.” Advertising is a profession for creative, innovative, unusual, curiosity-engendering, and multifaceted ideas. As long as these are not out of fashion, the essence of advertising will live on. In a broad sense of the term, from its pioneer days to the current age of virtual communication, everything we do as people is advertising. Advertising may appear to be dying, but don’t mourn it yet.

Professor Charles C. Okigbo teaches strategic communication, advertising, public relations, and mixed-methods social research at North Dakota State University (USA). Kelechi S. Nwosu is the MD/CEO of TBWA Nigeria. He is also a volunteer teacher at the Advertising Practitioners Council of Nigeria, APCON.

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Monday 01 March 2021

EDITORIAL PUBLISHER/EDITOR-IN-CHIEF

Frank Aigbogun EDITOR Tayo Fagbule

DEPUTY EDITORS Lolade Akinmurele John Osadolor, Abuja NEWS EDITOR Osa Victor Obayagbona NEWS EDITOR (Online) Chuks Oluigbo MANAGING DIRECTOR Dr. Ogho Okiti EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha GM ADVERT Ijeoma Ude GM CONFERENCES Obiora Onyeaso GM BUSINESS DEVELOPMENT (North) Bashir Ibrahim Hassan GM BUSINESS DEVELOPMENT (South) Ignatius Chukwu GM DIGITAL SUBSCRIPTION SALES Rerhe Idonije BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai COPY SALES MANAGER Florence Kadiri

COVID-19 one year after: Letting our guards down

t is one year of the Coronavirus pandemic in Nigeria. It is just like yesterday because events have been so fast-paced that a lot of people are being taken unawares, falling victims albeit unconsciously. A second, more virulent, wave of the Coronavirus pandemic is underway in Nigeria but as a people, we have become too distracted by the vicissitude of a floundering economy to notice. It is now time to bring back some of the measures that helped to keep the deadly pathogen in check. The clearest evidence of a second wave of the virus is that, in the past 14 days, over 5,000 new coronavirus cases have been recorded in Nigeria, bringing the total number of infections to over 73,000. On December 13, Nigeria recorded about 796 new cases higher than the peak infection recorded on July 1 of 790 cases, after lockdown measures were eased in major cities. Following the death of the

General Officer Commanding (GOC) 6 Division, Port Harcourt, Major- Gen. Johnson Irefin, the Nigerian Army has said that 26 of its personnel have tested positive for the virus. The Lagos state governor, Babajide Sanwo-Olu, and the chief justice of the Supreme Court have tested positive for the virus. Even the COVID-19 task force chairman, Boss Mustapha, had to go into isolation as his own family members have been sickened by the coronavirus. While not suggesting that these people got infected because they were careless, their experience provides a powerful reminder that a blasé attitude towards this deadly virus is dangerous. Nigeria’s chief justice, Muhammadu Tanko, travelled to Dubai to battle the virus but millions of Nigerians cannot afford this type of care, which is why we all need to be cautious. Many have argued that the economy cannot afford another lockdown considering that it is in a recession but there are other things we can do to protect our-

selves. A few months ago, many of us would not leave our homes without a face-covering and many had bottles of hand sanitizers in the container holder of their cars. We avoided large gatherings and maintained physical distancing from others. We need to revert to these ways of doing things. The Nigerian Centre for Disease Control (NCDC), on November 30, issued a public health advisory, warning against non-essential travels. It recognised that people wanted to travel and be with family and friends but warned that the COVID-19 virus does not spread on its own, but spreads when people move around. This means that by travelling across countries and cities, there is a higher risk of transmission, especially to rural areas where existing health infrastructure is already weak. Despite these warnings, local flights were virtually booked and road transport companies across the country reported huge patronage during the yuletide. We cannot treat warnings from the government agency responsible for checking the spread of the

virus as if they were suggestions and not expect consequences. This situation mirrors what occurred in the United States where the Centre for Disease Control warned Americans to avoid travel to see family members and loved ones over the Thanksgiving holidays but many ignored the warning. This resulted in a spike in COVID-19 infections and deaths. Nigeria has entered a dangerous phase of community transmission and contact tracing will be harder because the process of monitoring movement into the country has been lax. COVID-19 testing is still expensive and our hospitals are not properly equipped to deal with the rising number of COVID-19 cases. We must remain alert that COVID-19 is a contagious illness easily contracted in any public place where people are present. Despite a seeming return to normalcy, the virus will be part of our reality for the foreseeable future. There are no indications that we will get enough vaccine in time to prevent new infections, hence we must stay vigilant.

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Monday 1 March 2021

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Monday 1 March 2021

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Monday 1 March 2021

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Monday 01 March 2021

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Monday 01 March 2021

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PHOTOSPLASH

Dignitaries at 2021 BusinesDay’s Good Governance Award, with theme “Rewarding Excellence in Governance” at Transcorp Hilton in Abuja

L-R: Rasheed Ayo Olabomi, Aragbiji of Iragbiji, with Yerima Saleh, commissioner of works, Borno State.

L-R: Rasheed Ayo Olabomi, Aragbiji of Iragbiji, with Ogoh Okiti, MD, BusinessDay Media Limited.

L-R: Rasheed Ayo Olabomi, with Maxweel Gidado, chief of staff to Adamawa State governor.

L-R: Rasheed Ayo Olabomi, with Ude Oko Chukwu, deputy governor, Abia State.

L-R: Femi Adesina, SA to the President on Media, with Moses Okeze, representing governor, Kogi State.

L-R: Femi Adesina, SA to the President on Media, with Ladan Salihu, chief of staff to Bauchi State governor.

L-R: Aminu Ado Bayero, Emir of Kano, with Adegboyega Oyetola, governor, Osun State.

L-R: Ogoh Okiti, with Nuhu Sani, representing governor of Jigawa State.

L-R: Ogoh Okiti, with Nasir Isa Kwarra, representing governor of Nasarawa State.

L-R: Ogoh Okiti, with Darlington Okere, representing governor of Ebonyi State.

L-R: Ogoh Okiti; Aminu Ado Bayero, Emir of Kano, and Adegboyega Oyetola, governor, Osun State

L-R: Ogoh Okiti; Charles Akinola, chief of staff to Osun State governor, and Adegboyega Oyetola, governor, Osun State.

L-R: John Osadolor, director, BusinessDAY Media, with Femi Adesina, SA to the President on Media.

L-R: Patricia Kupchi, federal commissioner, National Population Commission, with Nasir Isa Kwarra, representing governor of Nasarawa State.

Rabi Yahaya Ahmed, MD/CEO, Adamawa Investment Property Development Company Limited.

L-R: Timothy Owoeye, speaker, Osun State House of Assembly, with Abdullahi Binuoy, deputy chief of staff to Osun State governor .

L-R: Timothy Owoeye, speaker, Osun State House of Assembly, with Charles Akinola, chief of staff to Osun State governor .

L-R: Bala Buba Jada, special adviser to Adamawa State governor on Inter Party Affairs, with Abdulrahman Bobbeei, special adviser to Adamawa State governor on Political Matters.

L-R: Abubakar Isa, deputy majority leader, Adamawa State House of Assembly, with Shusli Babs, member, Adamawa State House of Assembly.

L-R: Timothy Arowoogun, group head, public sector, West, First Bank of Nigeria Limited; Abdullahi Binuoy, deputy chief of staff to Osun State governor, and Adebisi Salaudeen, relation manager, public sector, First Bank of Nigeria Limited.

L-R: Ogoh Okiti; Femi Adesina; Rasheed Ayo Oyebode, Oba of Iragbiji; Aminu Ado Bayero, Emir of Kano; Adegboyega Oyetola, governor, Osun State, and Kafayat Oyetola, first lady, Osun State.

L-R: Bashir Hassan Ibrahim,GM, business development, North, BusinessDayMedia, Faiban Akagha, executive director, operation, and Ogoh Okiti,

L-R: Adegboyega Famodun, chairman, APC Osun State; Rasheed Ayo Oyebode, Oba of Iragbiji, and Kayode Aderanti, former AIG.

L-R: Kayode Aderanti, former AIG, with Femi Adesina, SA to the President on Media.

L-R: Ogoh Okiti, with Patience Oniha, DG, DMO.

L-R: Babatunde Lawrence Ayeni; Amobi Yususa; Femi Fakeye; Olubukola Oyewo , and Olalekan Afolabi, Osun State members of the House of Representatives.

Ogoh Okiti, MD, BusinessDAY Media Limited.

Gbagyi Cultural Troupe entertaining the guest at the 2021 BusinesDay’s Good Governance Award, with theme “Rewarding Excellence in Governance” held at Transcorp Hilton in Abuja. Pictures by TUNDE ADENIYI.

L-R: Kunle Adeniyi, chairman, information, Osun State House of Assembly; Usamot Dodo, chairman, committee on Services Matters, and Bayo Olodo, chairman, Finance, Ethics and Privilege.

L-R: Darlington Okere, representing governor of Ebonyi State, with Nasir Isa Kwarra, representing governor of Nasarawa State.

Monday 01 March 2021

BUSINESS DAY

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Britain and Big men, bigEurope money

How to make African politics less costly Tackling patronage requires understanding how it works

YISHA OSORI, a Nigerian lawyer and author, has vividly described running for political office in her country. She twists the arms of party elders, flatters their wives and hands over wads of banknotes—the cleaner the better. “Without money”, she concludes, “most aspirations would evaporate like steam.” Politics costs money everywhere, but the link between cash and power is especially corrosive in Nigeria and across much of Africa. In rich democracies parties choose candidates and subsidise their campaigns. In many African ones aspiring politicians pay vast sums to run on a party ticket and then shell out even more to cover their own costs. They give voters handouts, which serve both as bribes and as hints of future generosity. Once in office, they keep spending: on constituents’ school fees, medical bills, funeral costs and construction projects (see article). Individual politicians, in effect, act as mini welfare states. Some 40% of ambulances in Uganda are owned by MPs. Their spending often dwarfs their official salaries. This is bad for Africa. When a life in politics costs so much, the impecunious and honest will be excluded. Many MPs will either be rich to begin with, or feel the need to abuse power to recoup their expenses, or both. Even if they are not corrupt, MPs are a poor substitute for a genuine welfare state. Their largesse may go to those who ask loudest, or to a

favoured ethnic group. So long as states are weak, it makes sense for voters to ask their MPs for handouts, rather than for better laws or help to navigate the bureaucracy. It is also rational for MPs to neglect legislative work in favour of gifts and pork, if this is what voters say they want. But as Africa develops, this should change. As voters grow richer, they will be harder to buy. As governments grow more effective, MPs will have fewer gaps to fill. Alas, these shifts could take decades. Africans need something better, sooner. Outsiders often suggest tougher campaignfinance laws, but these seldom

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work. They are often ignored. And laws copied from the West tend to miss the point, by regulating spending by parties before elections, rather than by sitting MPs. Better would be to take a different approach. One aim would be to strengthen institutions that expose and punish corruption. Last year Malawians booted out the graft-ridden regime of Peter Mutharika thanks, in large part, to independent judges. Politicians who see graft punished are more likely to stay clean. Another aim would be to encourage parties to run on policies, rather than ethnicity

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or patronage. African NGOs, trade unions and business groups should nudge them in this direction—or help set up alternatives. New parties, such as Bobi Wine’s National Unity Platform in Uganda, are gaining popularity partly because they oppose the old rot. Philanthropists could give them money—and ask nothing in return. The essential thing is to curb MPs’ informal role as sources of welfare. The longterm fix would be to make local governments work properly. A stopgap is to improve Constituency Development Funds. These are pots of public money to be spent largely at

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the discretion of MPs. More than a dozen African countries have them. They are not as grubby as they sound. Research from Kenya finds that voters judge MPs on how they use these funds, so they offer some accountability. With greater transparency, they would offer more. Africa has grown more democratic in the past 30 years. Multi-party elections are common, albeit often flawed. Opposition parties are gaining ground. Most leaders leave office peacefully, rather than in coups. Politics is becoming more competitive. The next step is to make it less costly.

Monday 01 March 2021

BUSINESS DAY

In Association With

Tea and tributaries

In no region is China’s influence felt more strongly than in South-East Asia The region has a complex relationship with its giant neighbour

AST YEAR a remarkable if informal confederacy formed online across Asia, in scarcely the time it takes to boil a kettle: the Milk Tea Alliance. Its members were young activists, mostly in South-East Asia. All had disparate agendas at home. But they united in pushing back at a perceived growing menace—authoritarian China’s overweening presence in the region. It began when a Thai heartthrob, Vachirawit Chivaaree, star of “2gether”, a drama popular across Asia, retweeted a collection of cityscapes that innocently described Hong Kong as a country. Thousands of jingoist Chinese internet trolls called for a boycott of Mr Vachirawit’s show. He apologised. But the trolls found an old Instagram post from Mr Vachirawit’s girlfriend that seemed to indicate her support for Taiwan as a country separate from China. It further nourished their rage. Soon Thai netizens were fighting back with witty memes. Chinese patriots responded by insulting the Thai king and prime minister, who had come to power in a coup, as inept. The Thai gadflies were jubilant: they could not agree more. Their deft turning back of Chinese criticisms brought applause from young people in Hong Kong and Taiwan, who are no strangers to China’s heavy hand. Others in South-East Asia resentful of strongman rule, such as that of President Rodrigo Duterte in the Philippines, also cheered. Thus the alliance was born, named because of popular variations of tea drunk across Asia. In mainland China tea is drunk without milk. But Taiwan’s bestknown beverage is milky boba tea with chewy tapioca balls; Hong Kongers drink tea with milk, a British holdover; and Thailand’s tawny tea is sweetened with condensed milk. Others have since joined. After Chinese soldiers fought a deadly brawl with Indians guarding their two countries’ disputed border, Indian netizens added masala chai to the brew. And after the army seized power in a coup in Myanmar on February 1st, photos of laphet yay, Burmese milk tea, flooded social media. The Milk Tea Alliance is far from cohesive, or purely antiChina. Lambasting China is part of a critique of domestic authoritarian rule, says Frank Netiwit, a young Thai activist at the forefront of protests calling for more democracy. In Myanmar the anger is overwhelmingly directed at Gen Min Aung Hlaing and the army.

China has long had the backs of the region’s autocrats. It described the coup in Myanmar—in which Aung San Suu Kyi, the country’s leader, and hundreds more were arrested—as a “major cabinet reshuffle”. It has growing investments in South-East Asia and seeks political influence to protect them. But South-East Asian rulers are prickly and nationalistic. Most chafe at any suggestion that they are in China’s pocket. The Milk Tea phenomenon underscores how, for all that SouthEast Asians often welcome China’s economic engagement, it also comes with added complications to which China’s leaders often appear oblivious. South-East Asia, Murray Hiebert argues in “Under Beijing’s Shadow”, is a microcosm of China’s global ambitions—signalling how its diplomats, corporations and even its armed forces might operate elsewhere in future. More than anywhere, SouthEast Asia is bound to feel China’s presence. South-East Asia begins where China leaves off—in the mountainous border regions of northern Vietnam, Laos and Myanmar. Many groups that make up modern South-East Asia’s mosaic of ethnicities have their origins farther north. Imperial China claimed primacy over the rulers of South-East Asia. Vietnam, Thailand and Burma (now Myanmar) were important tributaries. Tributary relations fostered trade, including in exotics such as jade that have come to define Chinese taste. Emigrants (mainly men) from southern China began to seek livelihoods in the European settlements of Batavia (now Jakarta) and Manila. In the 19th and early 20th centuries they www.businessday.ng

flocked to British and French rubber plantations and tin mines, or sought fortunes in the entrepots of Singapore and Rangoon (now Yangon). Sojourners at first, most stayed. Today, some 33m SouthEast Asians claim Chinese ethnicity. In Malaysia and Indonesia, they form significant minorities—and in Singapore the majority. In Cambodia, Thailand and elsewhere, distinctions are often absurd—the Thai royal family is of recent Chinese descent. Crazy rich South-East Asians South-East Asia’s “overseas Chinese”, Charlotte Setijadi of Singapore Management University points out, have played crucial roles in the story of modern China. They were key backers of those seeking the overthrow of the imperial Qing dynasty and the establishment of a modern republic. More recently, SouthEast Asian nationals of Chinese descent helped kick-start China’s own industrial transformation. The commercial success of many overseas Chinese families is notable—and in part a result of the political marginalisation of ethnic Chinese in colonial and successor independent states. China welcomed their capital and managerial nous following its opening after 1978. Today the ten-country Association of SouthEast Asian Nations (ASEAN) is a key link in the supply chains of a China-centred electronics sector. A third of China’s integrated circuits come from South-East Asia, along with three-fifths of computer imports. Now capital is flowing the other way, from China to South-East Asia. Investment has grown almost 30-fold in

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the past decade, to nearly $40bn. South-East Asia’s ethnic-Chinese tycoons are still intermediaries in the region’s economic relationship with China. But the Chinese state is also asserting itself, in ways that South-East Asians recognise carry benefits—but also risks. China’s economic interaction with South-East Asia has happened chiefly by sea. That is changing. China’s industrial centre of gravity is shifting away from the coast towards the south-west and its borders with Myanmar, Laos and Vietnam. For this new heartland, nearby South-East Asia is an obvious market, a source of inputs, and a ready route to the sea. The chief obstacles to a push south are geographical—the impassable borderlands. To overcome them, China has engaged South-East Asia in a frenzy of cross-border infrastructure (see map): new roads, a gas pipeline through Myanmar to a deepwater port at Kyaukphyu on the Bay of Bengal, and a planned high-speed rail through Laos eventually connecting Kunming with Singapore. Most of these projects are presented as part of President Xi Jinping’s Belt and Road Initiative. In SouthEast Asia China presents its plans as commensurate with ASEAN’s own desire for regional integration. The Asian Development Bank calculates that if developing Asia is to keep up growth, eliminate poverty and deal with the effects of climate change, then it will need to invest $1.7trn a year in infrastructure over 15 years. Mr Xi and other Chinese leaders harp on about the “win-win” benefits of economic co-operation—as well as emphasising Chi@Businessdayng

na’s non-interference in others’ affairs. That is balm to the region’s authoritarians. South-East Asia’s post-colonial states are young and insecure. Their leaders bridle at any perceived challenge to sovereignty—or to their right to rule. Yet, for all the advantages, many South-East Asians find the Chinese presence sometimes overwhelming and the protestations of non-interference insincere. Chinese investment comes with strings attached. Lenders and construction firms insist on Chinese workers. Contracts are often opaque and grossly overpriced (some to include bribes needed to win them). China-linked corruption was a factor in the electoral defeat in 2018 of Malaysia’s prime minister, Najib Razak, and his party, which had ruled since independence. So, too, was the Chinese ambassador’s appearing to campaign openly for the ethnic-Chinese party in the ruling coalition—so much for non-interference. Meanwhile, under-the-table donations to political parties in Malaysia and Indonesia, says a senior diplomat from the region, are often an entry ticket for doing business. Chinese money is assumed to have been behind Mr Duterte’s successful bid in the Philippines for the presidency in 2016. Some Chinese-backed projects, above all the high-speed railway for tiny, impoverished Laos, have little economic rationale and the environmental costs can be high. An exceptional drought in 2019 in the lower Mekong was exacerbated by Chinese dambuilding interrupting the river’s seasonal flows, on which millions of Cambodian and Vietnamese fishermen depend. In Cambodia, Laos and Myanmar, Chinese landgrabs mean deforestation.

Monday 01 March 2021

BUSINESS DAY

TECHTALK Innovation

Apps

Start-up

Gadgets

Ecommerce

IOTs

Broadband Infrastructure

NITDA to realign its 2007 act with digital economy ideals

he Director General, National Information Technology Development Agency, NITDA, Mallam Kashifu Inuwa Abdullahi, CCIE, Wednesday, presented a proposal for the realignment of ‘NITDA Act 2007’ with the tenets and ideals of Digital Economy Policy of the current administration, and indeed, the 4th Industrial Revolution before the relevant committees of both chambers of the National Assembly. Making a valid point before the legislators, Mallam Abdullahi asserted that our technology driven world is filled with promises but also challenges. He clamored for the need to keep up with the trend of accelerating changes within the IT ecosystem by stressing the need for the review of the ‘NITDA ACT 2007’. He also hinged the need for the review on President Muhammadu Buhari’s (GCFR) transformation agenda and Digital Economy policy. The DG started by explaining how, in today’s world, people rely on different social media handles to make informed decisions. He cited the example of Google for definition/meanings, news report, or navigation; NETFLIX for recommendation on trending movies; AMAZON or ALIBABA sites for what to buy; as well as other social media handles like Facebook, Twitter, Instagram, etc. He explained further on the volatility of the human species, saying; “The kind of information we store on our phones and other technological gadgets make the human brain susceptible to the possibility of being hacked”. While expressing concern over the vulnerability of human species which he said is being threatened by the emerging technologies; he

Mallam Kashifu Inuwa Abdullahi, Director-General, National Information Technology Development Agency (NITDA),

posited that; “Technology disruption is the most disturbing and the least understood”. Adding that; “Technology is taking over the only thing that differentiates us (humans) from other animals”. He stated that, the era is marked by advancement in digital transformation and artificial intelligence, as he made reference to Mckinsey Global Institute’s latest report ‘on what the future of work will mean for jobs, skills and wages’, that postulates the displacement of about 20,000 million jobs by the year 2030. Mallam Abdullahi submitted that, keeping up with the global pace has compelled the need to urgently mutate and realign the cur-

rent ‘NITDA ACT 2007’ to meet the present outlook of the emerging technology in order to secure a place for Nigeria in the emerging global digital economy and 4th industrial revolution. He concluded by appreciating all the Senators, Honourable Members, and representatives from the office of the Attorney General and Ministry of Justice for their presences and contributions. He charged them to become the pivotal of the 2021 NITDA ACT that would position Nigeria into becoming a leading digital economy in Africa and major player in the global arena. The Chairman, Senate Committee on ICT and Cybercrimes, Senator Yakubu

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Oseni, in his remarks, affirmed that the ICT revolution has accelerated the pace of globalization. He agrees with the DG that Nigeria cannot afford to lag behind. He promised that his committee will work assiduously with the house committee and other relevant stakeholders to ensure accelerated passage of the new amendment act for NITDA. “The world has moved into the blazing digital ecosystem, accelerating at the speed of light, with very effective and disruptive innovation and models, such as; Internet of Things (IoT), Big Data, Robotics, Machine learning, Cloud Computing, Artificial Intelligence, Blockchain implementation and other emerging technologies…” he explained. He further emphasized that there is ardent need to raise the bar for digital readiness, in order to benefit from the unending economic and developmental opportunities that it presents. The Senator applauded the NITDA move towards improving its digital space and pledges the support of his committee to the actualization of passing the bill into law. While delivering his own remarks, Hon. Abubarkar Lado, the Chairman, House of Representative Committee on Information and Communication Technology, added that, the importance of making all necessary amendments in regards to enacting an enabling law for NITDA, as the Apex body in regulatory and development of ICT in Nigeria, is long overdue. He said, in a sector where technology changes almost every minute, the legislation should be robust enough to accommodate the nature of the ecosystem. He also promised the support of his committee in the passing of the NITDA Amendment bill into law.

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Bank IT Security

Space technology, a necessary tool in achieving digital transformation — DG NITDA

he Director General, National Information Technology Development Agency (NITDA), Mallam Kashifu Inuwa Abdulahhi, CCIE said that to achieve Digital Transformation in Nigeria, there is need was to efficiently use of the vast opportunities embedded in the Space Technology ecosystem. Abdullahi made this call yesterday at the Corporate Headquarters of the Agency when he met with delegates from the Nigerian Institute of Space Engineers (NISEng) led by its National Chairman, Engr Dr. Okpanachi George, who came to seek for possible collaboration with the agency. The NITDA boss said that it is a good development for federal government agencies to partner with private organizations, adding that NITDA as the regulator of IT in the country, has put in place, policies and created an enabling environment for producers and professionals to come in and create innovations which will sustain a digital Nigeria. He further stated that contrary to beliefs that satellites are obsolete, emerging technologies is now transforming the Space technology ecosystem which will evolve a new chapter and give rise to enormous transformation in the industry. Abdullahi averred that the agency is excited to partner with the NISEng because he believes the collaboration will drive innovations, as the Space Technology Ecosystem is everywhere and encompasses different sectors like the Communications, Agriculture and Security. He said that the Artificial Intelligence and Robotics play a key role in the

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digital space and NITDA through its National Centre for Artificial Intelligence and Robotics (NCAIR) will collaborate with the NISEng in coming up with ideas which will transform the country through initiatives such as the Research and Development, Blockchain, Artificial Intelligence and Innovations. The DG added that capacity building is an important factor in research and development and the agency will give its support in capturing all demography especially the young start-ups in order to create a robust local content which will prepare and position the country for the Fourth Industrial Revolution. He said the agency is really looking forward to the collaboration because he believes the two organizations will exploit all possible innovations, ideas and commercialize them which in turn will consequently transform NISEng into a competitive, globally standard institute and sustain a digital Nigeria as a whole. Earlier in his remarks, Engr Dr. Okpanachi thanked the NITDA DG and management staff for taking time out of their busy schedule to receive them. He said he had been following NITDA’s activities for some time and is greatly marveled at the agency’s dynamism and passion in sustaining a digital Nigeria. He particularly thanked the DG for sending a representative to the institute’s 10th National Conference and Annual General Meeting in the previous year and seeks a further and deeper collaboration with NITDA on programmes that are insightfully valuable for national and professional development.

Monday 01 March 2021

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Friday 26 February 2021

Top Gainers/Losers as at Friday 26 February 2021 LOSERS

GAINERS Company

Opening

Closing

Change

LASACO

N1.12

N1.23

0.11

WEMABANK

MBENEFIT

N0.37

N0.4

0.03

N0.2

N0.21

0.01

OANDO

N3.35

N3.45

0.1

NAHCO

N2.22

N2.28

0.06

COURTVILLE

Company

ASI (Points)

Opening

Closing

Change

N0.7

N0.63

-0.07

DEALS (Numbers)

CHAMPION

N2.8

N2.52

-0.28

SUNUASSUR

N0.73

N0.66

-0.07

VOLUME (Numbers)

N6.1

N5.75

-0.35

VALUE (N billion)

N1.12

N1.06

-0.06

AFRIPRUD MANSARD

39,799.89 4,465.00 507,254,782.00

MARKET CAP (N Trn)

2.442 20.823

Stock investors lost N1.4trn in February Iheanyi Nwachukwu

f t e r J a n u a r y ’s rally which placed the stock market of Africa’s largest economy as the continent’s best, investors became worse off in February with a record dip of -6.16percent. Investors in the market were caught in the web of huge capital loss cumulatively valued at about N1.36trillion, BusinessDay trend watch shows. Yields uptick in the fixed income (FI) environment contributed to the record bearish outing witnessed in the equities market in February. The month of February which opened with total value of Nigeria’s listed equities at N22.186trillion and the market’s benchmark performance indicator (All Share Index) at 42,412.66points closed at N20.823trillion and 39,799.89 points respectively. Despite the record dip in February, stocks that topped

other underperformers in the market are: ABC Transport (-10.5percent), Africa Prudential (-8percent), Beta Glass (-9.7percent), BUA Cement (-6.9percent), Ca d bu r y ( - 5 . 6 p e rc e nt ) , Caverton (-7.3percent), Conoil (-9.4percent), Cutix (-7percent), DAAR Communication (-16.7percent), Dangote Cement (-10.2percent), Deap Capital (-20percent), and Ecobank Transnational (-13.3percent). In the absence of positive news capable of reversing this negative trend, the record bearish sentiment

will continue in March which is the peak of earnings season. Though, the market’s new low as a result of price crash offers opportunity for bargain hunting for cheap banking and consumer goods stocks with strong fundamentals, particularly those with records of dividend payments year-on-year. Other top laggards are: FCMB (-9 percent), FTN Cocoa (-25.8percent), John Holt (-5.9percent), Nigerian Breweries (-7.1percent), Neimeth (-17.9percent), Oando (-6.8percent), Pharma Deko (-10percent), Stanbic

Why NAHCO Board recalled GMD/CEO after 21 days suspension

he Board of Directors of Nigerian Aviation Handling Company Plc (NAHCO Aviance) on Thursday notified the Nigerian Stock Exchange (NSE) that it has recalled Adetokunbo Fagbemi, the Group Managing Director and Chief Executive Officer. The company said in a statement to the NSE signed by Bello Abdullahi, Dikko & Mahmoud Solicitors, its company secretary that the GMD/CEO was suspended by the Board at its meeting held on January 27, 2021. Why the suspension “The suspension was due to the Management’s failure to diligently secure the delivery of a purchased equipment from the vendor within the contracted period and Management’s inability to provide satisfactory/acceptable reason for the unreasonable long delay,” it said. The statement also said that “the suspension was in line with the Board’s earlier

decision that if a certified bill of laden for the equipment was not received by February 2, 2021, the GMD/CEO shall proceed on suspension with half pay until receipt of acceptable evidence of equipment shipment from the manufacturer. The suspension commenced from February 3, 2021 and the Group Executive Director –Corporate Services. Olumuyiwa .A. Olumekun acted as the Group Managing Director/ CEO.” Board receives evidence of departure and arrival dates of the equipment from manufacturer “The Board is however pleased to inform the investing public and the Exchange that on, Tuesday, February 24, 2021, a satisfactory evidence of departure and arrival dates of the equipment has been received by the Board from the equipment manufacturer”, it further noted. Consequently, the Board at its emergency meeting www.businessday.ng

held on February 24, 2021 recalled the Group Managing Director/Chief Executive Officer, Adetokunbo A. Fagbemi from the suspension and she has resumed work. Full year 2020 scorecard shows decline across topto-bottom line figures Nigerian Aviation Handling Company Plc’s unaudited financial statements for the period ended December 31, 2020 shows it group revenue dropped to N7.330billion from N9.996billion in 2019. Also, gross profit decreased to N2.285billion in 2020 from N3.432billion in 2019. Profit Before Tax (PBT) of N428.593million in 2020 is far below PBT of N1.340billion the company reported in 2019, while its Profit After Tax (PAT) of N171.313million in 2020 is far below PAT of N717.199million in 2019. Basic earnings per share printed pretty lower at 10kobo in 2020 against 44kobo in 2019.

IBTC (-9.2percent), Sterling Bank (-16.2percent), Studio Press (-10.1percent), Sunu Assurance (-26.7percent), UBA (-5.8percent),University Press (-7.8percent) and Wema Bank (-8.7percent). “Void of any significant positive event capable of lifting investors’ sentiment, the ASI continued on its downward slope amid persistent sell pressure. With the anticipation of some corporate earnings hitting the market in the coming week, we expect the market to trade mixed, with a bit of cherry picking activities in some counters and continued sell pressure driven by the outflow of funds from the equities market to the Fixed Income market”, said analysts at Lagos-based Vetiva Securities. At the close of trading session on Friday February 26 –the last trading day in the review month –Nigeria’s stock market’s year-to-date (ytd) return furthered into the negative territory to -1.17percent.

Global market indicators FTSE 100 Index 6,468.71GBP -183.25-2.75%

Nikkei 225 28,966.01JPY -1,202.26-3.99%

S&P 500 INDEX 3,834.35USD +5.01+0.13%

Deutsche Boerse AG German Stock Index DAX 13,757.29EUR -122.04-0.88%

Generic 1st ‘DM’ Future 31,127.00USD -244.00-0.78%

Shanghai Stock Exchange Composite Index 3,509.08CNY -75.97-2.12%

Africa Prudential: Zubaida joins Board as independent non-executive director

n pursuit of its business diversification strategy, Africa Prudential Plc has appointed Zubaida Mahey Rasheed to its Board of Directors as an Independent Non-Executive Director. The appointment is to strengthen the Company, as it seeks to consolidate on its digital transformation drive and pivoting from its core registrar business to providing digital solutions and technology services. Zubaida is a distinguished technocrat with over four decades experience in public and private sectors. Her appointment became effective from February 24, 2021, subject to the approval of the Securities and Exchange Commission. She worked with NITEL Plc for 23 years, rising to the position of Executive Director. She gained significant experience in Corporate Strategic Management of Human and Material resources, for organisational

success and was responsible for the overall marketing portfolio of the organization up to its time of privatisation. Since 2008, she has been the CEO of Zaiydah Haleem Resources Nigeria Limited, a private company involved in training programmes and Consultancy and Supplies. She is equally serving as Deputy Coordinator of Technical Working Group (TWG) for the preparation of Medium-Term National Development Plan (MTNDP) 2021-2025 & Nigeria Agenda 2050 (Business Environment, Trade, Competitiveness and Product Space Mapping). Zubaida has a BSc degree in Economics from Ahmadu Bello University obtained in 1977. She is a member of the Nigerian Institute of Management and Associate member, National Institute of Marketing, Nigeria.

The Umm Fariha Network launches Halal Investment Club for women Modestus Anaesoronye

he Umm Fariha Network has launched the Halal Investment Club for Women at its first Muslimah Wealth Conference organised in partnership with Wealth Paradigm Ethical Advisory. Zahra Z. Abdulkareem, business strategist & founder of The Umm Fariha Network said the women’s network is paving the way for greater participation of Muslim women in business, finance and wealth creation. The Umm Fariha Network (TUFN) at the launch recently hosted the Muslimah Wealth Conference with an aim to equip women with the knowledge, tools, resources and networks they need to regain financial stability and actively work towards attaining financial freedom. The full-day virtual con-

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ference featured wealth mapping workshops by Zahra Z. Abdulkareem and Maryam S. Mohammed, a knowledge sharing session with Business Leaders Moshood Olajide, CFO, Ardova Plc and Yinka Yusuf, Partner, PwC who commended the organisers and said - “This is a step in the right direction to nurture financial literacy, financial freedom and empowerment in today’s Muslim woman”. The conference also featured a highly engaging panel session on building passive income streams with Authors & Serial Entrepreneurs Na’ima B. Robert, Award winning Author of From my Sisters Lips and Samiah Oyekan-Ahmed, Founder of The Giftsource. Samiah gave kudos to the organisers and commented that - “It’s not enough to just teach our sisters how to generate money, it’s actually more important to teach them the importance of growing that money to achieve true financial inde@Businessdayng

pendence”. The highlight of the conference was the launch of the Umm Fariha Investment Club for empowered women. The investment club aims to reduce the barriers faced by women when it comes to investing, building wealth and attaining financial independence. By pooling together and investing as a club, their members are able to overcome some of these barriers and access more lucrative opportunities as a collective. Maryam S. Mohammad, director, Wealth Paradigm and Conference Speaker said - “I am very proud to be part of this maiden club. Muslim women now have another avenue to build wealth and have their money work for them in line with their Islamic values. With the global pandemic, inflation and rising uncertainty around income and sustainable wealth, there has never been a better time to be part of such”.

Monday 01 March 2021

BUSINESS DAY

COMPANIES&MARKETS Northern Nigeria flour mills sees first nine-month profit in five years MERCY AYODELE

orthern Nigeria Flour Mills (NNFM), a listed miller on the Nigeria Stock Exchange has turned the corner to post its first nine-month profit in five years, thanks to the surge in revenue. The Kano-based miller recorded a profit of N51.2 million for the nine-month period ended 31st December 2020 from a loss of N212.2 million in the same period of 2019. The company says the increase in profitability came on the back of increased revenues and sales volume. Revenue surged 29 percent to N6.45 billion in the period compared to N5.0 billion in the first nine month

of 2019. The profit growth can also be traced to a 270 percent surge in investment income to N35.9 million from N9.7 million in the same period of 2019. B o r ro w i n g c o s t a l s o dropped 49.7 percent to N146.9 million in the ninemonth period of 2020 compared to the N292 million in the same period of 2019. Shares of the company remained flat at N7.02 at the

close of trade, Thursday. The miller’s basic earnings per share stood at N29 per share from a negative share price of N119 per share in the periods under review. Cost of sales was up 12.8 percent to N5.98 billion from N5.3 billion in the nine-month period of 2019. Despite the surge in sales cost, gross profit rose to N470.6 million com pared to loss of N299 million a year before. NNFM

saw its selling and distribution expenses rose 130 percent to N60.3 million compared to N26.2 million in 2019. Administrative expenses also jumped 37.8 percent to N321.8 million to N233.4 million in the periods under review. The company paid no tax in the nine-month period of 2020 compared to a tax of N6.1 million paid in the same period of 2019. Operating profit grew by 127.8 percent to N162.2 million from N77.1 million in the same period of 2019. “ The Management is working towards improving margins in the next quarter,” the company explained in its financials. Northern Nigeria Flour Mills Plc is a milling company. The Company produces flour and semovita.

L-R: Robert Giles, senior banking advisory retail banking, Access Bank Plc; Tolulope Agbaje, winner of transact and win promo; Victor Etuokwu, executive director retail banking, Access Bank Plc, and Chioma Afe, group head retail marketing and analysis, Access Bank, during the presentation of car prize transact and win promo in Lagos.

re e n w i c h Me rchant Bank Limited, a financial services provider with focus on high-end financial products and services, has announced the appointment of Bayo Rotimi as its new managing director/chief executive officer. He joins Greenwich Merchant Bank with over 27 years’ experience as an investment banking professional, having previously worked at Fountain Trust Merchant Bank, Lead Merchant Bank and FCMB Capital Markets Limited. He was, until recently, the chairman of the Investment Committee of ARM’s Discovery Aggressive Growth, Ethical, Money Market, Fixed In-

INIOBONG IWOK

igeria’s strongest player in the voice over IP rebrands, Native Talk, has announced its commitment to strengthening its B2B market through the launch of its flagship B2B SIP connect service as a white-label solution for service providers. Native Talk has made a name for itself as Nigeria’s fastest-growing telecommunications company and one of the strongest players in the enterprise telephony market in Nigeria. The SIP trunking offering will enable service providers to expand their voice services to customers through Native Talk B2B SIP network reach and unified communications portfolio, without major upfront investment in building their solution. In turn, their business customers will benefit from a new way to transform their voice network with a potential 55 per cent network cost saving based on traffic and pattern calculation. The company also introduced a new comprehensive channel partnership program - Native Talk Partner Network; purpose-built to enable its partners to solve their customers’ communication needs by leveraging its unique combination of Cloud-Based PBX and Enterprise Phone Lines. Nat i ve Ta l k Cha n n e l

Manager, said in the announcement, “Our channel partners are instrumental to our company’s growth and the Native Partner Network will ensure everything we do – from the development of our products and solutions to our sales, support and marketing frameworks – supports them. As partners use a more consultative sales approach, they are looking for on-the-ground sales support and technical expertise, easy onboarding and an efficient service delivery process. Native Talk’s Strategic management consultant, PR and Corporate Communications, Chidiadi Madumere said the goal of the organization is to be recognized as a B2B communications service provider. “Native Talk has been primarily a B2B communications player for a few years now, but now our branding is catching up,” Madumere said Founded in Lagos, Nigeria in 2014, Native Talk offers companies of all sizes, Enterprise Phone Lines, CloudBased PBX and Call Center Services. It’s features covers: localized telephone numbers, toll-free numbers, call routing, automated interactive voice responses, IVR, that direct callers to the right department, call queuing, and more. Native Talk platform also serves up analytics, showing metrics such as missed call rates and average wait times.

Grange School wins 2021 COBIS Mangahigh Maths competition JOSEPHINE OKOJIE

Greenwich Merchant Bank appoints Bayo Rotimi as MD /CEO MICHAEL ANI

Native talk rolls out channel partnership, B2B sip for service providers

come and Eurobond Funds with over N110 billion under management. Rotimi is an expert in corporate finance, capital raising (debt, equities, and hybrids) and financial advisory services (mergers & acquisitions, corporate

restructuring, privatisation advisory and project finance). He is a member of the Institute of Directors; Associate of the Certified Pension Institute, and Chartered Institute of Bankers. He is also a member of the Advisory Board of the Enterprise Development Centre (EDC) of the Pan Atlantic University. He tea ch e s St rate g i c Planning at the EDC and actively supports its various development initiatives such as the Expertsin-Residence program that mentors SMEs. Rotimi was an external member of Faculty at the Lagos Business School between 2009 – 2013 where he taught Finance on the MBA, Executive MBA, and Senior

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Management Programs. Speaking on the appointment, Kayode Falowo, chairman, Greenwich Merchant Bank, stated that Rotimi’s track record and pedigree speak for themselves and offer a reassuring nexus between the corporate ideals that Greenwich is reputed for and proactive dynamism required to stay on the cutting-edge of innovation, product development and stakeholder satisfaction. Bayo Rotimi, as MD/ CEO, will provide leadership and direction to the Management Team and be responsible for driving the Company’s overall strategic objectives and operational performance towards delivering optimal value for stakeholders in line with global best practice.

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range School, Lagos, Nigeria’s leading British International co-educational school, has been awarded first place at the 2021 Council of British International Schools (COBIS) Mangahigh Maths competition. The competition gathers COBIS from all over the world to compete for medals and points by playing and winning activities on the Mangahigh Website. The competition lasted from the 1st to the 10th of February, 2021. Grange School gathered 59,340 points to secure the win. The school fought off stiff competition from a host of other schools to emerge the winner in this competition. “I am so proud of the dedication and the enthusiasm with which Grange’s pupils approached this competition. We could not have enjoyed the @Businessdayng

success that we did without the hard work of our staff, particularly the Mangahigh Champions who drove participation,” said Abra Stoakley, head of Grange School. “Grange’s success in this international competition is entirely down to our determination, as a School, to triumph,” Stoakley said. Grange School is a coeducational private day and boarding school offering the British Curriculum to a multicultural community of nursery through to secondary school. Founded in 1958 by a group of interested parents who desired to provide standard education equivalent to that which was obtainable in the United Kingdom, the school has remained consistent with the achievement of the ideals of its founders. Located at the Ikeja GRA in Lagos, Grange School has a catalogue of its past students who are leading in their fields of endeavours, across the continents.

Monday 01 March 2021

BUSINESS DAY

COMPANIES&MARKETS

Business Event

Andersen restrategise, adopts new brand name MODESTUS ANAESORONYE

ndersen Global has announced a rebranding strategy for Africa, in line with its move to the unified brand name of Andersen, which is being rolled out globally. The firm initially viewed tax as a driver of legal, with members firms adopting the brand names of either Andersen Tax, Andersen Legal or Andersen Tax & Legal. Andersen’s strategy is to provide a global platform with global service lines that can be reproduced in any country. The firm which was formerly known in Nigeria as Andersen Tax Nigeria now becomes Andersen Nigeria, while Andersen Legal, South Africa, becomes Andersen South Africa. The firm’s partners in Nigeria, in a press conference Tuesday in Lagos, expressed excitement about the name change, saying it is the right step in the right direction aimed at solidifying the Andersen brand as a premium

business. The company’s par tners who spoke at the press conference included Oladipo Maiye, head, Oil, Gas & Power Services; Joshua Banifo, head, Transfer Pricing; Lateef Surakatu, head, Business Advisory Practice and Amaka Samuel, associate Transfer Pricing. They said the name change will allow the firms to provide more services tailored at meeting the clients’ needs as the company becomes a one-stop-shop for all their clients providing arrays of services including tax and legal advice. While promising to continue to provide best in class services to all its teeming clients, they said the name “Andersen” is synonymous with excellence and professionalism. They said with the development, the firms will provide other services to the clients beyond tax. “A lot of our clients required a lot of services beyond tax, our client will be happy with the latest development.” Meanwhile, Mark Vor-

satz, chief executive officer (CEO) of Andersen Global, in an interview with Law. com recently said, “It was important to make clear to the market that we were independent and did not provide audit,” adding that “this was because the firm had required the right to all the brand names of the defunct auditing firm, Arthur Andersen in the 184 countries of the world seven years ago.” Vorsatz further added, “Operating under the single Andersen brand will demonstrate the firm’s unified and seamless approach incorporating both legal and tax. “Andersen has a separate law firm and tax firm arrangement in South Africa, but the plan is for these to eventually be integrated. Andersen already rebranded in the US in 2019 and Europe, Latin America and the Middle East in 2020,” Vorsatz said. He added that the firm is rebranded by region to manage the roll-out in an organized, meaningful way and to address the characteristics within such regions.

L-R: Oladipo Maiye, Partner and Head, Oil, Gas and Power Services; Joshua Bamfo, Partner and Head, Transfer Pricing Services; Omawunmi Martins, Head, Marketing and Branding; Lateef Surakatu, Partner and Head, Business Advisory Services and Amaka Samuel-Onyeani, Associate Director, Transfer Pricing, all of ANDERSEN at the press conference to announce the change of name from Andersen Tax Nigeria to ANDERSEN in Lagos

L-R: Oluwaseun Adebayo, regional trade marketing administrative officer, MTN Nigeria; Bayo Onafuwa, regional manager, customer relations (South West), MTN Nigeria; Adesope Adefunke, director, National Primary Health Care Development Agency (South West Zone); Uzezi Enyia-Okey, team lead, customer relations, MTN Nigera, and Akinrinade Steve, coordinator, National Primary Health Care Development Agency, Oyo State, at the What Can We Do Together (WCWDT) Phase 4 handover of medical equipment to the General Hospital, Apata, Ibadan, Oyo State, recently

Lagos partners EbonyLife, Del-York to grow capacity in filmmaking business AMAKA ANAGOR-EWUZIE

etermined to empower the next generation of filmmakers within the state with creative skills, the Lagos State Ministry of Tourism, Arts and Culture has partnered EbonyLife and DelYork creative academies to launch Lagos State Creative Industries Initiative (LACI) to provide practitioners with world-class skills. This is aimed at making Lagos a destination for a skilled, well-trained workforce for the creative industries, thereby boosting the state’s economy. LACI is a continuation of Lagos State’s commitment to supporting creative industries, as Lagos drives towards leading Africa in this area and being recognised as a centre of excellence for filmmaking. Uzamat Akinbile-Yusuf, the commissioner for tourism, arts and culture, said during the launch in Lagos recently, that the establishment of Lagos State Creative Industries Initiative (LACI) is a critical step towards making Lagos the hub for Africa’s creative industries. According to her, LACI’s objectives are in line with two of Lagos State’s development pillars including education

and technology as well as entertainment and tourism. It will also help to attract film productions from around Nigeria, Africa and the rest of the world. Akinbile-Yusuf further said that LACI will serve as a training platform for practitioners in the creative industry on the use of modern technology to enhance the content and quality of Nigeria’s entertainment. As part of its strategy to fast-track the output of LACI, she said, Lagos State is partnering with EbonyLife Creative Academy (ELCA) and Del-York Creative Academy (DCA) to enhance the skills and exposure of approximately 1,500 practitioners in the state’s creative industry. “In 2021, EbonyLife Creative Academy will offer free, practical three-month courses for up to 480 learners, covering all aspects of filmmaking and media content production. Through its Creative Lagos programme, Del-York will offer a hybrid of online and offline courses for approximately 1,000 students, in filmmaking, media, arts, technology, and digital marketing,” Akinbile-Yusuf said. The outcome, she said, is to enable practitioners with world-class skills to build www.businessday.ng

companies that provide investment and employment for youths. Mo Abudu, chief executive officer, EbonyLife Creative Academy, expressed her delight at the partnership with Lagos State through LACI. “Without the support of the Lagos Ministry of Tourism, Arts and Culture, we would not be able to provide filmmaking courses of this quality free of charge. Our most talented people cannot afford to go abroad for training. So, EbonyLife Creative Academy is bringing world-class trainers to Lagos which will create an amazing opportunity for anyone wishing to improve their technical skills,” she said. Linus Idahosa, the founder of Del-York Creative Academy, commended the state government’s unwavering commitment to the creative industry. “Our creative Lagos project will harness talent, technology and technical education to ensure that all participants are exposed to the cutting edge of innovation, making them invaluable to local and global film production companies and creating high-quality content in Lagos. We are delighted to be a part of this groundbreaking initiative,” Idahosa added.

Some of the beneficiaries of the revolving loan by the CFAO Group in Epe, Lagos.

L-R: Diran Ayanbeku, member, Project Development Institute (PRODA); Daniel Onjeh, board chairman, PRODA, and Oso Adetunji, lawyer, PRODA, during an investigative hearing on the procurement deception, staff victimization and ongoing management problem in project Enugu under the ministry of Science and Technology, at the National Assembly, in Abuja. Pic by Tunde Adeniyi

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Monday 01 March 2021

BUSINESS DAY

REAL SECTOR WATCH

Manufacturing investments decline 74 percent in first half 2020 GBEMI FAMINU

nvestment inflows into Nigeria’s manufacturing sector declined significantly in the first half of 2020 by 74 percent to N62.08 billion from N248.45 billion in the same period of 2019, according to data from the Manufacturers Association of Nigeria (MAN). The decline was attributed primarily to the outbreak of the Coronavirus pandemic, which disrupted economic activities globally and locally. “The manufacturing sector was set for better performance with high expected for 2020. Unfortunately, COVID-19 pandemic came with its distortionary impact, leading to the worst performance of the sector in decades. The extreme measures taken to stem the spread of the pandemic, peculiarly the lockdown on economic activities that was most detrimental to the sector. “The huge decline in investment in the period was attributed to the onslaught of the COVID-19 pandemic and the associate measures implemented to contain the spread including the economically abrasive lockdown that brought manufacturing activities to a near halt,” MAN stated in its most recent half year economic review. The drop in investments also affected the overall performance of the sector, especially as many manufacturing firms were forced to either suspend or shut down operations during the period under review, thereby reducing the number of players in the sector.

Consequentially, the sector slowed by -4.1 percent during this period according to the GDP data released by the National Bureau of Statistics (NBS). Furthermore, with Nigeria ranking 131st out of 190 countries surveyed on the 2020 World Bank’s ease of doing business index, business experts assert that due to the recurrent challenges in Nigeria’s business environment and insecurity challenges, investors are forced to take flight for the proverbial greener path, scaring away prospective investors. Despite the drop in manufacturing investment inflow in the first half of 2020, Lagos the largest commercial hub in Nigeria and Ogun state maintained their positions as choice locations for investors

during the period. Experts however believe that investment inflow will improve in the medium to long term following the partial border reopening and the implementation of the African Continental Free Trade Area (AfCFTA) “The reopening of the land borders should provide succor to the manufacturing sector even as the kick-off of AfCFTA serves as an avenue for manufacturers to penetrate new African markets and for investors to flood the market” Jide Babatope, a Lagos-based analyst said. In H1 2020, Lagos, which includes Apapa and Ikeja industrial zones got investments valued at N22.47 billion out of the total N62.08 billion worth of invest-

ments recorded while Ogun followed closely with N21.32 billion. Kwara and Kogi also seemed to ignite the interest of investors as it achieved N7.69 billion worth of investment during this period. Ambrose Oruche, acting DG, MAN said manufacturers are more attracted to locations that will make business easy to run, adding that some factors are responsible for investors preference which include available infrastructure, security, ease of doing business, port availability and proximity. “Lagos and Ogun state provide access to markets driven by its population, in addition, Lagos promises high security which many investors appreciate, Ogun state also is ranked the highest in the ease of doing business with

its business-friendly policies and environment, “Another important factor is the availability of the ports in Lagos which makes it easier to receive goods especially when the market is of close proximity. Long-distance between ports and market or consumers will affect competitiveness, quality, and quantity of the goods” Oruche added. For the sectoral investments, the chemical and pharmaceutical subsectors topped the charts for investment inflow, as it gulped N26.6 billion worth of investments during this period while the food beverage and tobacco subsector followed closely with N18.76 billion. According to experts, the two sectors managed to get more investment attention because they are providers of essential items which, became highly preferred by consumers following the outbreak of the pandemic. The pulp, paper, printing, and publishing sector also recorded investments worth N7.85 billion. The review also showed that the N62 billion worth of investments was made in land and building, plants and machines, furniture, and equipment, motor vehicles as well as assets under construction. “Analysis of investment in the sector in the first half of 2020 shows that Land & Building ranked first with investment valued at N19.91 billion, Plant and Machinery ranked second with investment worth N18.85 billion, investment in Asset under construction stood at N17.61 billion, Furniture and Fittings stood at N4.54 billion and Motor vehicle, N1.16 billion.” it stated.

Fostering economic growth through industrial revamp in Akwa Ibom JOSEPHINE OKOJIE

he industrial sector of any country is a catalyst for economic growth and if properly utilized will foster an impressive GDP performance and an agile economy. An impressive GDP serves as one of the indices of the economic wellbeing of a nation as it reflects other fundamental metrics that guarantee sustainable development, such as employment and inflation control. The sustainable successes of these traditional economic giants and the rise of emerging ones, like the UAE, and China has consistently proven to us that creating an enviable economy is no rocket science; it only takes a visionary leader and a succession of others loyal to the vision through integrity, transparency, and teamwork. Over the years, many countries, with the United Arab Emirate as the prime example, have raised their GDP to a high level through vigorous industrialization of their economies. From countries that

were mediocre in the early 1980s, they have risen to become the most flourishing countries that attract the best brains around the world to propel them to produce world-class products and services. Akwa Ibom, with a population of over five million and landmass of 6,900 square kilometers has made giant strides in tandem with the vision set for the state governor, Udom Emmanuel to transform the “Land of Promise” which was primarily a civil servant state into an economically stable state through sustainable and strategic industrialization. Udom’s industrialization program has seen the birth of Ibom Airline with a fleet of four aircraft; establishment of an electric meter factory with capacity to produce about one million units of meters annually. His vision again attracted Turkish investors to set up a syringe manufacturing factory located in Onna Local Government Area with capacity to produce 350million units of 2ml, 5ml, and 10ml disposable syringes annually. www.businessday.ng

The first factory to produce toothpicks and pencils in Nigeria was set up in Akwa Ibom. This development has put an end to the importation of these basic products from China and other neighboring countries. The state also has established a plastic manufacturing plant at its Industrial Park in Itu. The plant has the capacity to generate one billion naira annually in addition to generating 10,000 jobs for the people of Akwa Ibom. There is also a fledgling Coconut Oil Factory in Mkpat Enin Local Government Area of the state with capacity to generate about 1,500 direct jobs contributing about $20million to Internally Generated Revenue (IGR). While presenting the 2021 budget, tagged: “Budget of Industrialization for Poverty Alleviation” to the House of Assembly, Udom said: “Our strategy for the development of this state has been the need to rapidly industrialize her, and create employment and wealth opportunities for our people. We have done exceed-

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Governor Udom Emmanuel

ingly well in this regard through the over 20 industries we have attracted so far to this state, more of which would have attracted, if we were not hit by the COVID-19 pandemic.” He further pledged: “As the world opens up post-COVID-19, @Businessdayng

we will accelerate our pace in this area and continue to attract viable industries that would help with our strategic and sustainable developmental plans. We remain committed to the realization of our plans on ‘Power for All’ by 2021.” Facts and figures also affirm that the Akwa Ibom governor is not resting on his oars as he stays focused on the five-point agenda — small and medium scale enterprises development; infrastructure, security, human capacity development; agriculture and rural and riverine area development. In 2021, the state citizens are assured of more positive development from the governor who has already given a hint of the other developments in the offing when he disclosed his plans to establish, at least, one petrol refinery, one power plant, one petrochemical plant, one Liquefied Natural Gas (LNG) plant, one fertilizer manufacturing plant, and one steel plant in the state before the end of his administration in 2023.

Monday 01 March 2021

BUSINESS DAY

START-UP DIGEST

In association with

Meet Debo, an entrepreneur giving glamour to farming JOSEPHINE OKOJIE

any young Nigerians are abandoning farming and rural communities, choosing to migrate to urban centers in search of white-collar jobs. But Debo Thomas, founder of Hastom Nigeria – an agricultural firm based in Ogbomosho, Oyo state has decided to stay in the rural area and venture into the agricultural sector to tap farming opportunities. Since starting his farming venture, the young farmer has built a successful business and is now changing the narrative and image of farming in Nigeria. Debo who is a crop and cattle farmer was motivated to going into agriculture when he identified an opportunity in cashew nuts supply chain. Before becoming a farmer, the young entrepreneur was into the sales of computer and telephone accessories at the premises of Ladoke Akintola University of Technology (LAUTECH). He could barely make any sales whenever the students were on holiday or strike. In search of another business that is not LAUTECH determined, Debo ventured into poultry business, which collapsed eight-months after establishment. The young entrepreneur says that inadequate knowledge about the poultry business in the country killed the business. “I went into poultry business but the investment failed because I went into the business without the required skills,” he says. Determine to succeed as an entrepreneur; Debo was back again searching for investment opportunities in the agricultural sector. Soon, he identified an opportunity in the real estate of farmland. “I noticed that people interested in agriculture are mostly from the city and their major

Debo Thomas

problem is farmland and in Ogbomosho, we have abundant land. So, I started helping people to purchase their farmland,” he says. “When we sold about 100 acres of farmland in two months, then I was convinced that land sale for agriculture was the right business for me at that point,” he adds. With time, he saw another opportunity in cashew farming and he quickly took advantage and ventured into the production of the crop. Today, Debo has cultivated cashew trees on 550 acres and has 430 herds of cattle. He has also sold about 3,000 farmlands since establishing his business in 2013. His initial start-up capital was from the money he made on his previous business. Since starting, his business has grown very fast as it has expanded despite slow economic growth. The key to this

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is determination. The business now has a platform – Hastom Farms, where individuals can invest in cashew and livestock production. He currently has over 200 hundred direct and indirect employees working on his cashew plantation. He tells Start-Up-Digest that the business plans to expand its operation into the processing and exporting of cashew nuts in the short run. According to him, plans are already on-going to start a processing factory next year May. “We have started putting our processing plant in place and planning to open it in May next year but the aggregation of cashew will start by February.” “We plan to expand our production to 8, 000MT of raw cashew nuts and 3,000 of processed shelf cashew nuts,” he notes. “You cannot process cashew when you do not have

enough shelled cashew nuts and that is why our focused has been on planting in the last three years,” Debo explains. He adds that business will commence exporting Nigeria’s cashew to India and Vietnam next year, while he notes that Hastom is getting offers from the United Arab Emirates and Hong Kong. It has not all been rosy for Debo as he surmounts numerous challenges to scale his business. He tells Start-Up-Digest that finding the huge infrastructural gaps in the country remains the major hurdle confronting his business. He notes that young people will only find agriculture attractive when the government provides the needed infrastructure to aid farming as well as adequate capital and technology. He identifies the high cost of interest rate, inadequate capital for long term investments and insecurity in the country as other major factors limiting his plans. He urges the Federal Government to enact economic policies that will drive growth and development while calling for the provision of vital infrastructure to enable young entrepreneurs to succeed. In evaluating the Nigerian cashew value chain, he says that processing remains the biggest investment opportunity that the country can harness for economic growth and diversification. He urges the government to support the processing of the crop and should give it the kind of attention currently being given to oil palm. He calls on the government to spur local consumption of cashew by supporting the production of the crop to drive down price as Nigerians want to consume it but cannot easily afford it. On his advice to other entrepreneurs, he says “be focus and start small. Keep the vision alive and grow big.” “Be honest because honesty will speak for your business,” Debo says.

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How Ogunwale helps SMEs find business clarity IFEOMA OKEKE

ukola Ogunwale, chief executive officer of Business Coach Zone is helping hundreds of individuals and Small and Medium Enterprises (SMEs) find clarity in their careers and businesses. Ogunwale said SMEs need the expertise to grow their businesses and that the Business Coach Zone is helping owners develop necessary templates and structures to help improve their businesses. She assured that when business owners interact with courses developed by the Business Coach Zone they gain the vital skills and tools needed to help them successfully scale their organisations. She hinted that her organisation also helps people in careers to understand and inculcate the notion of working as entrepreneurs, so they can take ownership of their job functions and grow as they help their organizations to grow. Ogunwale who is also a cofounder of i-Fitness Gym and a founder of Coach B Fitness Zone disclosed to BusinessDay that she was inspired to commence her SME coaching business to fill the knowledge gap that entrepreneurs face in business know-how and profitability. “Passion alone is not sufficient to build a company. There must be industry knowhow, there must be a determination to provide the solution to problems people are grappling with,” she said. “Entrepreneurs need to keep good records to ensure that they are not just doing business activities but are making a good profit,” she further said. She noted that businesses are at their best when owners are at their own best. “Not everyone goes to school for a Master’s degree in Business Administration

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Bukola Ogunwale

before they start their businesses. Some people are fortunate enough to go for MBA, but the concepts may not be broken down or relatable to their business terrain. Hence, there is a need for business clarity for entrepreneurs if they are going to contribute significantly to the economy of their countries,” she explained. The lawyer-turned- SME coach stated that many female entrepreneurs found their way into the business world because they had a passion for it, they had the funds for it, or they lost their jobs and needed to do something else. She noted that many do not take time out to be trained in the business aspect of their passion, and this is a major reason why their businesses struggle, adding that Business Coach Zone fills this gap by training entrepreneurs regardless of their reasons for starting a business. She assured that they will gain clarity, overcome the hurdles and attain success She disclosed that her organisation which has been running for three years now has successfully helped hundreds of women to reach their goals, helping clients who had never done business before to set up profitable businesses.

Monday 01 March 2021

BUSINESS DAY

Access Bank Rateswatch KEY MACROECONOMIC INDICATORS

Current Figures Comments 0.11 Q4 2020 — higher by 3.73% compared to –3.62% in Q3 2020 Decreased by 0.6% in January’ 2021 from N39.57 trillion in December’ 2020 39.34

Indicators GDP Growth (%) Broad Money Supply (N’ trillion) Credit to Private Sector (N’ trillion)

30.55

Increased by 1.4% in January’ 2021 from N30.15 trillion in December’ 2020

Currency in Circulation (N’ trillion)

2.83

Decreased by 2..7% in January’ 2021 from N2.91 trillion in December’ 2020

Inﬂation rate (%) (y-o-y)

16.47

Increased to 16.47% in January 2021 from 15.75% in December 2020

Monetary Policy Rate (%)

11.5

Adjusted to 11.5% in September 2020 from 12.5%

Interest Rate (Asymmetrical Corridor)

11.5 (+1/-7)

Market Analysis and Outlook: February 26 – March 5, 2021 Global Economy

The US economy advanced an annualized 4.1% in Q4 2020, slightly higher than

trading activities will remain pressured by proﬁt taking from investors. the advance estimate of a 4% growth, the second estimate showed according Money Market to the U.S. Bureau of Economic Analysis. Upward revisions to residential ﬁxed Cost of borrowing declined last week boosted by the Open Market

Lending rate changed to 12.5% & Deposit rate 4.5%

investment, private inventory investment, and state and local government

External Reserves (US$ million)

35.58

Oil Price (US$/Barrel)

66.26

February 26, 2021 ﬁgure— an increase of 2.59% from the prior week

Oil Production mbpd (OPEC)

1.34

January 2021, ﬁgure — a decrease of 2.26% from December 2020 ﬁgure

February 23, 2021 ﬁgure — a decrease of 2.69% from February start

NSE ASI & Bond

₦21.03 trillion, respectively the preceding week. This week, we expect that

spending were partly oﬀset by a downward revision to personal consumption

Operations (OMO) repayment of ₦476 billion. Short-dated placements such as Open Buy Back (OBB) and Over Night (O/N) rates declined to 5.67% and

expenditures. However, the economy slowed from a record 33.4% expansion 6.33% from 20% and 20.5% the previous week. The slightly longer dated in Q3 as the continued rise in COVID-19 cases and restrictions on activity instruments such as 30-day and 90-day Nigerian Interbank Oﬀered Rate

FX Market N/US$

moderated consumer spending. For full year 2020, the American GDP (NIBOR) settled at 2.41% and 5.12% from 1.69% and 3.05% the prior week.

contracted 3.5%, the worst performance since 1946. Elsewhere, the Indian

economy expanded 0.4% year-on-year in the ﬁnal quarter of 2020 as revealed

This week, rates are expected to climb to double digits territory due to anticipated retail Secondary Market Intervention Sales (rSMIS). Foreign Exchange Market

by the Ministry of Statistics and Programme Implementation (MOSPI) . It is the

External Reserves & Oil price

The naira depreciated across most market segments last week. The Nigerian

Inﬂation Rate

ﬁrst expansion in three quarters as the government opened economic Autonomous Foreign Exchange Rate (NAFEX) declined by ₦2.23 to close at activities in phases from June after a coronavirus lockdown in late-March. The ₦410.48/US$. The parallel market lost N4 settling at ₦482/US$ while at the contraction for ﬁnancial year 2020/2021 was estimated slightly higher at 8%

from 7.7% which would be the biggest drop ever.

STOCK MARKET

26/2/21

2 Weeks Ago 19/2/21

Change (%)

39,799.89

40,186.70

(0.96)

Market Cap(N’tr) 20.82

21.03

(0.96)

Volume (bn)

0.51

0.31

64.81

Value (N’bn)

2.44

2.91

(15.93)

Indicators

Last Week

NSE ASI

MONEY MARKET NIBOR

Last Week 2 Weeks Ago Rate (%) Rate (%)

Tenor

Change (Basis Point)

26/2/21

19/2/21

OBB O/N CALL

5.67

20.00

(1433.0)

6.33 8.50

20.50 14.33

(1417) (582.5)

30 Days 90 Days

2.41 5.12

1.69 3.05

72 207.1

same as preceding week. At the Investors' and Exporters' window, the

Domestic Economy

COMMODITIES MARKET

Indicators

illiquidity persisted as the demand for funds continue to outweigh supply. We

26/2/21

Energy 66.26 Crude Oil $/bbl) Natural Gas ($/MMBtu) 2.73 Agriculture

1-week Change (%)

YTD Change (%)

2.59 (12.78)

2.79 (10.67)

The Central Bank of Nigeria Governor said the decision to prohibit deposit expect rates to trade around current levels this week as the apex bank money banks, non-banking institutions and other ﬁnancial institutions from selectively meets FX demand amidst pent-up demand pressure. facilitating trading and dealings in cryptocurrency was in the best interest of Bond Market

Nigerian depositors and the country's ﬁnancial system. The statement was

Cocoa ($/MT)

2607.00

7.91

34.66

Coffee ($/lb.) Cotton ($/lb.) Sugar ($/lb.)

139.20 89.10 16.61

7.08 (1.30) (1.54)

6.91 14.97 8.35

Wheat ($/bu.) Metals Gold ($/t oz.) Silver ($/t oz.) Copper ($/lb.)

663.00

(0.49)

52.94

Market, on its directive to institutions under its regulation. Describing the

1752.74 26.70 417.20

(1.77) (2.84) 3.55

33.03 55.32 27.27

operations of cryptocurrencies as dangerous and opaque, the CBN Governor

NIGERIA YIELDS

made last week during the brieﬁng of a joint Senate Committee on Banking,

The Federal Government of Nigeria (FGN) bond market witnessed strong demand as market participants continued to cover short positions amidst the heightened system liquidity stemming from Federal Accounts Allocation

Insurance and Other Financial Institutions; ICT and Cybercrime; and Capital Committee (FAAC) inflows, as well as the coupon payment on the 2028 bond yesterday. Yields on the five-, seven-, ten-, and twenty-five-year debt papers finished at 3.43%, 6.74%, 7.67% and 11.55% from 3.71%, 8.55%, 8.10% and said the use of cryptocurrency contravened an existing law noting the fact

INTERBANK

TREASURY

BILLS

Last Week Rate (%)

2 Weeks Ago Rate (%)

Change (Basis Point)

Tenor

CBN oﬃcial window, the naira remained stable winding up at ₦379/US$,

TRUE

that cryptocurrencies were issued by unregulated and unlicensed entities

11.71%. The Access Bank Bond index increased 10.90 points to settle at 3,844.22 points last week. This week, we expect yields to inch up slightly

which made it contrary to the mandate of the Bank, as enshrined in the CBN owing to the reduced liquidity in the system. Act (2007) declaring the Bank as the issuer of legal tender in Nigeria. He Commodities

FOREIGN EXCHANGE MARKET

Last Week Rate (N/$)

Market

26/2/21 Ofﬁcial (N) Inter-Bank (N)

379.00 410.48

2 Weeks 1 Month Ago Ago Rate (N/ Rate (N/$) 1 Mnth $) 3 Mnths 19/2/21 26/1/21 6 Mnths 379.00 379.00 408.25

0.65

0.94

2.15

1.65

more than $5.83 billion foreign loans that have been approved but not yet

1.97 2.20

41 106

disbursed, the Debt Management Oﬃce (DMO) has said. The DMO listed a

2.38

12 Mnths

3.27

0.00

482.00

478.00

480.00

created or backed by any central bank. In a separate development, Nigeria has

crude output following a violent winter blast in Texas that forced the shutdown of wells and processing plants. Bonny light, Nigeria's benchmark crude jumped 2.59% to close at $66.26 per barrel. Precious metal prices went south as soaring long-term yields spooked investors away from the metal as it became less attractive because it does not oﬀer interest. Consequently,

ACCESS BANK NIGERIAN GOV’T BOND INDEX

Indicators

Last Week

2 Weeks Ago

Indicators

26/2/21

19/2/21

Index

3844.22 3833.32

2 Weeks AgoChange Rate (%) (Basis Point)

26/2/21

19/2/21

5-Year 7-Year

3.43

3.71

(27.3)

6.74

8.55

(181.5)

10-Year

7.67

8.10

(42.2)

Mkt Cap Net (N'tr)

15-Year

11.10

10.95

15.2

YTD return (%)

Mkt Cap Gross (N'tr)

$1,784.35 per ounce. Silver settled at $26.70 per ounce, a 2.84% drop from

percentage of the loans would come from the International Development preceding week. This week, oil prices might tick further upwards as risk-oﬀ

0.28

Association, a member of World Bank Group. The outstanding loans from the sentiments in stock markets add upside potential to the oil market. group stands at about $3.27 billion. Another $1.25 billion is supposed to come Expectations of a robust economic recovery fuelled by the vaccines' rollout

8.82

8.80

0.19

from the Export-Import Bank of China.

56.50

56.05

0.45

-35.89

-36.33

0.44

10.71

14.6

YTD return (%)(US $)

11.55 11.28

11.71 11.19

(16.4) 9

TREASURY BILLS PMA AUCTION

364 Day

gold prices dipped 1.77% or $31.61 to ﬁnish at $1,752.74 per ounce from

0.29

10.86

91 Day 182 Day

commitment to more than $37.8 billion. According to the DMO, a larger

12.56

25-Year 30-Year

Tenor

Change (Basis Point)

The disbursement of the loans will take the country's total foreign debt

12.59

20-Year

Disclaimer This report is based on information obtained from various sources believed to be reliable and no representation is made that it is accurate or complete. Reasonable care has been taken in preparing this document. Access Bank Plc shall not accept responsibility or liability for errors of fact or any opinion expressed herein. This document is for information purposes and private circulation only and may not be reproduced, distributed or published by any recipient for any purpose without prior written consent of Access Bank Plc.

Oil prices remained bullish supported by the expected slow return of US

number of foreign loans that were to be disbursed as at December 31, 2020.

Last Week Rate (%)

Tenor

declared that cryptocurrency was not legitimate money because it was not

1.27

9 Mnths

BDC (N)

19/2/21

0.76

393.65

Parallel (N)

BOND MARKET AVERAGE YIELDS

26/2/21

Amount (N’ Rate (%) Date million) 0.55 11,388.75 27-Jan-2021 47,476.88 1.3 27-Jan-2021 123,113.73

27-Jan-2021

bullions this week. Stock Market Indicators at the Nigeria Stock Exchange closed the week on a bearish note

Monthly Macro Economic Forecast

amidst proﬁt-taking by investors as stocks went up within the week. The

Variables

downtrend was majorly in sectors such as ﬁnancial services and consumer

Exchange Rate (NAFEX) (N/$)

goods sector. The All-Share Index (ASI) and market capitalization dipped by Inﬂation 0.96% to 39,799.89 points and ₦20.82 trillion from 40,186.70 points and

Sources: CBN, Financial Market Dealers Quotation, NSE, NBS, Energy Information Agency, Oilprice, Bloomberg and Access Bank Economic Intelligence Group computation. * Crude oil (Bonny Light) is as at the previous day.

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and more government spending might drive yield higher and spell doom for

Rate (%)

Crude Oil Price (US$/Barrel)

Mar’21

Apr’21

May’21

408

410

16.7

16.89

16.95

For enquiries, contact: Rotimi Peters (Team Lead, Economic Intelligence) (01) 2712123 rotimi.peters@accessbankplc.com

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@Businessdayng

Monday 01 March 2021

BUSINESS DAY

COVID-19: CBN’s intervention policies saved banking sector HOPE MOSES-ASHIKE

ebruar y 27, 2021, marked one year the first Coronavirus (COVID-19) case was dictated in Nigeria. As at today, Africa’s largest economy recorded 1.5 million samples tested, 154,476 confirmed cases, 20,863 active cases; 131,722 discharged cases and 1,905 deaths, according to Nigeria Centre for Disease Control (NCDC). The pandemic disrupted every sector of the Nigerian economy of which the banking industry is no exception. The lockdown declared by the Federal Government at the end of March 2020 to contend the impact of the pandemic disrupted businesses, lives and livelihood. Data from the National Bureau of Statistics (NBS) show that financial institutions contracted by -2.48% in the fourth quarter (Q4) 2020 from 6.80% in the third quarter (Q3) 2020 and 22.33% in Q4 2019. Analysts in the financial services sector were of the opinion that though the pandemic affected the banking

sector last year, the impact was not grave as the policies and interventions of the CBN saved the industry. In response to the impact of COVID-19 on key economic variables such as inflation, exchange rate, interest rate and external reserves, the fiscal and monetary authorities took unprecedented measures to prevent the economy from going into a tailspin. “Our first objective was to restore stability to the economy by providing assistance to individuals, SMEs and businesses that had been severely affected by the pandemic, as well as by the lockdown measures,” Godwin Emefiele, governor of the CBN said. Some of the measures taken by the monetary and fiscal authorities include: Policy makers across the globe have been faced with a dual challenge of trying to address a public health crisis, and a major economic challenge. The spread of the virus along with the corresponding containment measures, led to a significant slowdown in global growth in the first half of 2020.

First Bank unveils FirstSME accounts to boost nat’l growth

irst Bank of Nigeria has unveiled SME specific accounts designed to reinforce the bank’s role in putting SMEs at an advantage to contribute to national growth and development. The SME accounts – which are in two variants – FirstSME Classic and FirstSME Deluxe – are offered to SMEs, irrespective of industry, and tailored to have SMEs exposed to a wide range of services and opportunities that are essential for their growth and role in strengthening national development. A statement by Nigeria’s premier financial institution on Sunday, listed features of these accounts to include access to temporary overdrafts (TODs) and other facilities subject to meeting risk adjustment capital (RAC) of each product, immediate enrolment on all digital platforms and free access to First Bank SME events. Others are free access to extensive business promotional and networking opportunities on the SMEConnect portal, and access to a wide range of discounted and promotional offers.

According to the bank, other opportunities available to holders of FirstSME account is the SMEConnect initiative of First Bank which is a platform through which SMEs access the bank’s unique propositions that will equip them with the essential tools needed for the growth of their business. “The SMEConnect portal is also designed to help SMEs identify various gaps that hinder their business growth. With First Bank’s over 126 years of impacting the economy, the bank’s SME innovative business diagnostics tool will also help proffer tailored solutions, while creating avenues for business improvement, profitability and sustainability,” the statement said. According to Adesola Adeduntan, CEO of the First Bank,“FirstBank is delighted to unlock several opportunities for SMEs to thrive. Our FirstSME account is one of the numerous opportunities designed to empower SMEs to continually drive impact as the backbone and contributors to employment and economic growth.”

news

COVID-19: One year after

Fewer Nigerians have access to financial services Endurance Okafor

h i l e C OVID-19 pandemic gave rise to online transactions in Nigeria and resulted in a boost to digital financial services, the impact of the virus outbreak brought more harm than good to the country’s financial inclusion drive. Nigeria’s failure to meet its 80 percent financial inclusion target of 2020 is one of the direct impacts of the pandemic as it broadened the inequality gap and displaced the financially underserved population. Financial inclusion means that people have access to basic financial services like a savings account, credit and insurance. A higher exclusion rate in Nigeria could lead to a poorer population as lack of access to credit and insurance puts them at an economic disadvantage. Through its National Financial Inclusion Strategy (NFIS) of 2012, the Central Bank of Nigeria (CBN) set a target to ensure 80 percent of Nigeria’s adult population have access to financial services by the end of 2020. But the Januar y 2021 data from the Nigeria InterBank Settlement System Plc

coming 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, head of Programmes at Enhancing Financial Innovation & Access (EFiNA) said. The Good The COVID-19 pandemic was a catalyst to Nigeria’s e-commerce industry as it induced lockdown and social distancing forced a lot of consumers to shop online. This resultantly presented an opportunity for a push to more digital solutions, including digital financial services. Data from NIBSS and other sources shows that the volume and value of electronic financial transactions increased following the pandemic, and some financial service providers reported increased uptake of their digital services. “This is likely driven largely by people who are already banked using some new digital financial services or using digital channels more,” Immanuel said. On how the pandemic deepened Nigeria’s digital financial inclusion, especially with the underserved segment of the cycle, Immanuel said, for example, someone who was previously banked

but still travelled to the market to purchase goods with cash may have started using an online delivery service and making payments electronically, or that person may have taken a loan from a FinTech for the first time. “When banked Nigerians start using more or additional digital financial services, that is beneficial for the Nigerian financial system and economy but does not drive financial inclusion in the sense of helping unbanked or financially excluded adults access formal financial services for the first time,”. She said. The Bad Even though EFInA is currently conducting a nationwide Access to Financial Services in Nigeria Survey to provide more specific data about the impact of the pandemic on financial inclusion, findings have shown that the pandemic has likely exacerbated existing inequalities. According to the World Bank’s data, 51 percent of Nigerian males had bank accounts in 2017 compared to the 27 percent recorded for females. This shows a 24 percentage gap between the male and female, bigger than the 20 percentage points gap that was recorded in 2014 when the total male with account was at 54 percent with females was at 34 percent.

L-R: Tokunbo Abiru, senator representing Lagos East; Olamilekan Adeola, chairman, Senate committee on finance; Femi Gbajabiamila, speaker, House of Representatives, and Babajide Sanwo-Olu, governor, Lagos State, during the 16th Executive Legislative Parley titled: “A Consensus Agenda for Rebuilding Lagos”, in Lagos on Friday. NAN

Osinbajo disagrees with CBN on prohibition of crypto market …says Emefiele may be acting in fear FRANK ELEANYA

ice President Yemi Osinbajo on Friday disagreed with prohibition of the cryptocurrency market by the Central Bank of Nigeria (CBN). According to the VP, the market requires a robust regulation and not prohibition. “Cryptocurrencies in the coming years will challenge traditional banking, including reserve banking, in ways

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(NIBSS) shows Nigeria had 46 million Bank Verification Numbers (BVN), meaning more than half of the country’s adult citizens are still without bank accounts. While EFiNA is yet to publish the 2020 financial inclusion figures for Africa’s most populous country, its last report shows that over 36.6 million Nigerian adults were without bank accounts in 2018. Financial inclusion analysts blame the Nigerian Government for the country’s slow inclusion rate as it delayed in implementing policies like mobile money, a telco-led financial inclusion initiative that helped to boost access in Ghana and Kenya and for failing to tap into the COVID-19 induced opportunity to onboard its excluded population. During the peak of the pandemic, Brazil, the South American country with almost the same population size as Nigeria onboarded about 10 million of its unbanked population in less than 24 hours of launching ‘Coronavoucher’ an emergency aid programme set up to give support to 54 million of its citizens who became financially vulnerable as a result of the coronavirus crisis. “Longer-term, we run the risk of more Nigerians be-

that we cannot yet imagine, so we need to be prepared for that seismic shift,” the VP in a video posted on his official Twitter handle. Osinbajo’s position is in clear contrast with the one held by Godwin Emefiele, governor of the CBN. During a joint Senate committee on banking, insurance and other financial institutions, ICT and cybercrime; and capital market on Tuesday, February 23, 2021, Emefiele had said the issuance of cryptocurrencies by

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unregulated and unlicensed entities was contrary to the mandate of the CBN. “Cryptocurrency is used to describe the activities of traders in an electronic dark world where transactions are extremely opaque, not visible and not transparent. “These are people who deal in transactions that do not want to be trailed,” Emefiele said. But the VP speaking at the bankers’ committee conference organised by Vanguard Newspaper suggested the @Businessdayng

CBN governor may be acting in fear. “Cryptocurrency should be innovatively regulated, not prohibited; we must act with knowledge not fear,” he said. The VP further said it is in the place of both the monetary authorities and SEC to provide a robust regulatory regime that addresses these serious concerns without killing the goose that might lay the golden eggs. “And it makes sense since total ban is impossible,” Osinbajo said.

Monday 1 March 2021

BUSINESS DAY

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Monday 01 March 2021

BUSINESS DAY

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Monday 01 March 2021

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news One Italian in, 1,905 dead: Nigeria...

Continued from page 1

ease treated at the centre

and that she only had a simple infection well under control. “God bless you,” she said to Iyabo, after being discharged and told she had been down with COVID-19 and would have to restrict interactions with others for the next two weeks. “If I had known that it was COVID from the onset, I might not be here. Maybe fear and high blood pressure would have killed me,” the old woman said. The septuagenarian is among the 131,722 people, who though in the vulnerable demography, survived the pandemic in Nigeria, officially. The first of the 1,905 who have died was Suleiman Achimugu, the ex-managing director of Pipelines and Products Marketing Company, a subsidiary of the national oil company. Among the high profile deaths are Abba Kyari, chief of staff to President Muhammadu Buhari, and Abiola Ajimobi, former governor of Oyo State. What began as a public health crisis imported by an Italian in Lagos who tested positive to SARS-CoV-2 on February 27, 2020, morphed into many things, escalating insecurity and causing a major economic crisis. The pandemic has unsettled individuals, small and large businesses. How Nigeria’s public health sector responded to the Ebola outbreak offered optimism. The structures used to curtail the more deadly virus were still in place and could buy the country some time. The coronavirus proved evasive and its rate of transmission sent many quickly into hospital wards, exposing lapses in an already fragile healthcare infrastructure. All the over the world, the spread of the disease was fast and furious, outmaneuvering measures to curb it and overwhelming even countries with the most advanced healthcare facilities. The number of those dying from the virus alarmed the world as it tracked pandemic in real time.

What was the fate of those with poor healthcare systems? In Nigeria, the picture got even clearer when some of Nigeria’s high and mighty had to be whisked into Lagos because the hospitals that could come to their rescue were all in the commercial capital and so few. Average Nigerians on the other hand grappled with rejections at public hospitals that were ill-equipped to detect the virus. The country initially had to make do with the available equipment for checks at all its entry points while it waited for makeshift isolation and treatment centres built from scratch across many states thanks to one of the largest private-sector interventions in Nigeria’s recent history, estimated at N21 billion. But the collection of samples and testing remained challenging as the government’s facilities neared a tipping point. Thirteen laboratories country-wide with the capacity to test 1,500 samples daily were producing only 600 tests daily on the back of low sample collection. By June, Nigeria had completed only 48,000 tests compared with Ghana’s 197,000; Mauritius’ 104,000; Uganda’s 86,000; Kenya’s 61,000 and South Africa’s 550,000. More than half the tests done in South Africa were accounted for by the private sector. In most cities in Nigeria, it took an average wait of four days to get samples collected because of the number of those waiting to be tested at the available government testing centres. And even after the sample had been taken, it took another three days to receive the result. In those seven days, an individual with the virus is left to infect several others while waiting for a test result before being taken into isolation. With all available resources devoted to testing for and treating the virus, patients with other illnesses in need of medical attention were denied access. Doctors who lacked rapid testing kits and personal

Rise in renewables sees decline in oil... Continued from page 1

One sign of this changing energy landscape is that Royal Dutch Shell, one of the biggest employers of petroleum geoscientists and engineers, is cutting investment in fossil fuels and focusing on electric cars. The energy transition is underway. Shell has agreed to buy Ubitricity, owner of the largest public charging network for electric vehiclesintheUnitedKingdom,as the oil major expands its presence along the power supply chain. Other oil majors have long begun to reduce their exposure to fossil fuels too. This trend is shrinking the market for oil discovery skills. According to data provided to SAFE from Texas Tech University, in 2019 the United States’ 22 petroleum engineering programmes enrolled nearly 2,000 seniors. This was

roughly 1,800 fewer than in 2016. In total, more than 4,500 US undergraduates were perusing petroleum engineering degrees in 2019, down 60 percent from three years before. Imperial College London has announced it will suspend its Masters of Science in Petroleum Geoscience at the end of the academic year 2020-21. Stanford University has modified and renamed its petroleum engineering programme. It now called Energy Resources Engineering and offered by the Department of Energy Resource Engineering in the School of Earth, Energy, and Environmental Sciences. In Saudi Arabia, King Abdullah University has also modified and renamed what used to be its petroleum engineering programme.ItisnowcalledthePhysical and Geological department. These universities are suspending, expanding, modifying andupgradingthesecoursesinorder to reassess the skillset needed www.businessday.ng

protective equipment ran the risk of exposure to the virus if they attended to patients without testing them. The Nigeria Centre for Disease Control (NCDC) licensed private laboratories to join the government effort to diagnose the virus months after the queue for those desperate to test for the deadly virus grew longer. By then Nigeria had confirmed nearly 20,000 cases and 500 dead at the peak of the first wave of the pandemic.

government areas. In Lagos, the epicentre of COVID-19 in Nigeria - with over 34 percent of the country’s total case-load as well as over 18 percent of deaths, there are 21 accredited laboratories and four public health laboratories testing for COVID-19 currently. And despite coming late into the picture, private labs accounted for 45 percent of a total of 236,212 samples tested as of December 2020, cumulatively marking 24.6 percent of the total tests done across the country,

University, Ede, Osun State; the NCDC, the Centre for Human Virology and Genomics (CHVG); Nigerian Institute of Medical Research (NIMR); the Centre for Human and Zoonotic Virology (CHAZVY); College of Medicine University, Lagos University Teaching Hospital (LUTH); and the Lagos State Ministry of Health Bio-Safety Level 3 (BSL-3) Bio-Bank facility. In addition to the list of the things done right is the adoption of rapid testing kits as complementary means of testing for the

“There is a lot more work to do because very few of our hospitals were built for this trial in terms of protecting healthcare workers, making sure we have the capability and a good supply of logistics,” Richard Ajayi, board chairman, Lagos State University Teaching Hospital (LASUTH), told BusinessDay, applauding the authorities for the how it has managed the pandemic so far. “We need to articulate a strategy to ensure we double it down. A lot of healthcare workers have died primarily because our healthcare system

is not designed to protect them. We need to solve that and even supply chain issues,” he said. What went right? The accreditation of some private laboratories for diagnoses of COVID-19 was some of the right decisions made in response to the pandemic in the country. Testing capacity has also been ramped up to over 70 laboratories, feeding the tracking system of the NCDC with clearer information of prevalence among travellers as well as community transmission in states and local

the state government said. Apart from testing, Nigeria equally got it right with genomic sequencing of the disease by producing the first data on the genetic make-up of the virus in Africa. Once the first COVID-19 case was confirmed, Nigeria mapped information on the genetic make-up of the virus in 72 hours, the shortest time frame in the world. The feat came from a collaboration between the African Centre for Excellence for the Genomics of Infectious Disease (ACEGID), Redeemer’s

virus, particularly at points of care. After seeing the painful gaps associated with the long wait for the usual test results from standard laboratories and the escalating rise in infection rates during the second wave, the NCDC kicked off rapid testing in five hospitals in Abuja. Vaccination Nigeria, like most countries, is scrambling to buy as many doses of vaccines in a global race to control the pandemic. Frontline healthcare workers and other first responders are expected to benefit first. Expectations have been raised multiple times over promises of doses arriving from manufacturers in the US, UK, Russia and China. But what seems most feasible is the pledge of 16 million Astrazeneca vaccine doses, which Osagie Ehanire, minister of health, on Thursday confirmed would arrive next week. Boss Mustapha, chairman of the COVID-19 task force on Sunday said 4 million doses were expected tomorrow. That appears more realistic following the delivery to Ghana of the first consignment of 600,000 doses of Astrazeneca vaccines from COVAX, the global initiative led by the World Health Organisation, on Wednesday. The minister hangs Nigeria’s hope of vaccination on manufacturers, assuring it is prepared to store and administer. Beyond vaccination, experts and stakeholders say that Nigeria must learn from the hard lessons the pandemic has taught and take adequate investment in public health infrastructure as a cue for better preparedness for the next outbreak. According to Bill Gates, one of the biggest financiers of health globally, Nigeria does not have to divert its very limited resources for health into trying to pay a high price for COVID-19 vaccines. He suggests the country take up as much as it can from donations such as COVAX, and focus the most of funds available for health on repairing the primary healthcare system of the country.

in today’s broader earth energy industry to be able to come up with new fit-for-purpose courses. “Universities keep or shutdown programmes mostly due to demand. I suspect the energy transition has discouraged many people from pursuing degrees in geoscience and petroleum engineering resulting in low demand levels, hence the decision to stop those programmes,” Joe Nwakwue of the Society for Petroleum Engineers Nigeria. Nwakwue is quick to point out that in Nigeria he is aware that a lot of curriculum adjustments are afoot to reflect these realities. But argues that based on Nigeria’s reserve/production ratio for oil and gas of 56 and 72 years, respectively, the country will still need a constant supply of talents to optimally recover and deploy these resources for economic growth and development. “It will be self-defeating not to do so. I suspect a lot of these departments will be renamed to Energy Engineering or studies or such other names that reflect

our present realities.” Nevertheless, Nigerian universities have a reputation for teachingfromoldnotes.Although the country is still an oil economy - the sad thing is that the people graduating are not finding jobs. There are about 13 petroleum engineeringdepartmentsinNigeria with an average class size of 50 students. This means they graduate about 500 students annually. “The industry can only support 100 new graduates yearly because it is not labour intensive. However, petroleum engineering and geoscience are based on the analytical subjects of mathematics, physics, chemistry and geography. These analytical skills will remain in demand,” Lateef Akinkpelu, a petroleum engineer and energy consultant at the Centre for Petroleum, Energy Economics and Law at the University of Ibadan, says in a phone interview. “If the universities don’t listen, the best thing is for students and parents to be aware and not enrol their wards for petroleum,” Elizabeth Obode, a research as-

sistant at Texas A&M University Qatar told BusinessDay. The fossil fuel industry is challengedandwouldremainsointhe neartomediumterm,expertssay. However, it still provides the world’s dominant energy supplying above 90 million barrels of oil per day. It has been forecasted that it will take a long time before any other energy source will replace those volumes. The best estimate is that it is still some 50 years away before that will happen. “It is also important to recognise that training in petroleum disciplines prepares students for a career in related fields,” Nwakwue states. The International Energy Agency (IEA) has projected that by 2025, renewable will become the largest source of electricity generation worldwide. “By that time, renewables are expected to supply onethird of the world’s electricity – and their total capacity will be twice the size of the entire power capacity of China today,”

Fatih Birol, the IEA executive director, notes. Renewables are not limited to solar, wind and hydro. Green hydrogen, another renewable energy source is rising. China is focusing on building a fuel-cell supply chain and developing hydrogen-powered trucks and buses as part of a 15-year plan for new-energy vehicles. President Xi Jinping in September 2020 set a 2030 deadline for China to begin reducing carbon emissions. The world’s most populous nation is targeting to have 1 million fuel-cell vehicles in operation by 2030, according to an energy savings vehicle development plan drafted by authorities, despite 2,700 such cars selling in the country last year. Renewables rise is supported by financial incentives in a number of countries. In the US for instance, several federal government tax credits, grants, and loan programmes are available for qualifying renewable energy technologies and projects.

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Monday 01 March 2021

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news

covid-19: one year after

Energy sector takes a toll from lockdown ISAAC ANYAOGU & DIPO OLADEHINDE

hen the first case of COVID-19 was reported in Nigeria, February, Jude Emelike was providing support services to vendors at an oilrig in Eket, Akwa Ibom State. The next month, March, President Muhammadu Buhari announced a lockdown to contain the spread of the virus. Following this, the Department of Petroleum Resources, the sector regulator issued a circular directing oil company to relieve nonessential workers as part of COVID-19 measures. Jude was declared a nonessential staff and sent home. One year after he is yet to return to work. The project has run into trouble including the layoff of workers, suspension of service contracts, and even the oil major executing the project, ExxonMobil, has seen the worst erosion of its profits in history all a fallout of a pathogen that paralysed the world. The spread of COVID-19 has shaved 30 percent of global oil demand and prices have fallen to 20-year lows. This situation led to a price war among key producers, Russia and Saudi Arabia and oil-dependent economies like Nigeria saw how vulnerable their economies, as half of the government revenue, were wiped off. Upstream sector Nigeria’s upstream sector has long been troubled by uncompetitive production costs, insecurity, poor fiscal terms, and a prolonged contracting cycle. The lockdowns announced, which led to the removal of the critical non-essential staff, made things worse. It did not even seem pragmatic to produce massive quantities of crude oil, as Nigerian cargoes struggled to find buyers. But for operators, restarting a shut-in well presents a unique challenge. Local oil firms who financed assets through debt could no longer generate revenue. Some banks restructured loans, which were nearly N5 trillion in the second quarter of 2020, allowing obligors breathing space to generate cash flows, while other banks issued moratoriums on loan repayments. Nigeria had to cut its oil production benchmark volume twice in its 2020 budget revisions to help oil producers’ efforts to shore up prices. Oil ser vicing firms struggled Since exploration has mostly been halted due to poor demand, drilling contracts was deferred or cancelled. Nigeria’s rig count fell from 23 in February 2020 to six rigs in July. The gradual easing of lockdown restrictions, resumption

ofinternationalflightoperations, theopeningoffactoriespropped up oil prices, and consequently oil field servicing firms gradually returned to work but not everyone had their jobs. Deregulation reality for downstream sector The lockdowns cut demand for refined petroleum products by half and impacted investments into the sector. Total plc, 11 plc, MRS, Ardova, and Conoil major downstream players suffered worse revenue declines ever. The Federal Government on March 19, 2020, announced full deregulation of the downstream sector opting out of subsidy payment that gulped a whopping N10 trillion in the last 10 years. This reality was forced on the government due to low oil sales, rising government debt and high running costs. Impact on power sector According to a PriceWaterhouseCoopers (PwC) study, the impact of COVID-19 was most felt by electricity distribution companies (Discos) in terms of the inability of customers to pay their bills and the resultant reduction in revenue collections. For instance, the lockdown led to shutting down of all but essential commercial activities across the country. Consequently, the electricity demand from industrial and commercial customers reduced significantly while the residential market increased expectedly. “This has led to a distortion in the cost subsidy quality of the tariff and reduces the cash flows to operators,” PwC said. DisCos have a lower tariff for residential customers, sometimes even below the average cost of supply, as compared to that for commercial and industrial consumers. The above development means the lower tariff-paying consumers are cross-subsidised by commercial and industrial consumers, which led to a noticeable revenue loss for DisCos due to the reduction in demand from commercial and industrial customers. “The reduction of demand affects the ability of the tariff to effectively cross-subsidise the lower-tariff paying consumers.” Nigerian Electricity Regulatory Commission (NERC) eventually approved a tariff increase in April, but it could not take effect until November 2020 when it adopted the service-based tariff. Moving forward The coronavirus has exposed the threats in the energy sector but corrective actions and policies are yet to keep pace. Nigeria is not moving fast enough to enact a progressive Petroleum Industry Bill, remove gas pricing barriers to investments locally, and concession failing assets like refineries to investors. www.businessday.ng

Nigerians work hardest to buy internet data FRANK ELEANYA

he average Nigerian will need to work 27 minutes 55 seconds for 1 gigabit (GB) internet data, says a new report from Surfshark, a global privacy protection company, as the global average is 10 minutes. The same report shows Nigeria at the bottom of countries with affordable internet. While Israel tops the list of most affordable internet globally, Nigeria, Columbia and Honduras not only have the slowest internet, it costs their citizens more in hours to buy. Nigeria ranks 85 out of 85 indexed countries. People in the most populated country in Africa have to work 33 hours 42 minutes to afford the cheapest broadband internet in a month. The global average is three hours 48 minutes a month. On the surface, the report may be shocking given that network providers in Nigeria have in recent time engaged

in a price war that has seen data prices fall to as low as N200/1GB. Also, a report by Alliance for Affordable Internet (A4AI) classified Nigeria among countries in Africa with the cheapest internet data. A4AI, however, uses a “1 for 2” measure for affordable internet - affordable internet is where 1GB mobile broadband data is priced at 2 percent or less of average monthly income. The Surfshark ‘Digital Quality of Life’ Index assessed 85 countries on five metrics: internet affordability, internet quality, electronic infrastructure, electronic government, and electronic security. It found that 75 percent of the researched countries have to work more than the global average to afford the internet. Globally, mobile internet (internet access that is obtained through a portable modem or other device, such as a mobile phone) is nearly 23 times more affordable than fixed broadband (high-speed connectivity for public use of

at least 254 Kbit/s or more in one or both directions). Generally, the average time for work to afford the cheapest 1GB of mobile internet is about 10 times. “Any country’s digital advancement has a tangible relation to its economic potential and population’s overall wellbeing. In the COVID-19 era, it’s even more important as most of the employees face working full time online,” Vytautas Kaziukonis, CEO of Surfshark, said, noting, “Since work from home realities vary widely by location, Surfshark’s research on internet affordability and quality aims to establish a common ground for further conversation.” The disparity in affordability between countries can also determine the quality of opportunities available to their citizens, which directly affects the quality of life they live and contributions they make to the economy. In Nigeria where over 82 million citizens - representing 40 percent of the population

- live on less than $1 a day, inequality is an everyday reality for the average person. With the current exchange of N380 to the dollar, it means over 82 million people manage to eat, drink, cloth, pay bills and transport themselves on less than N380. The N200 for 1GB in seven days is therefore competing with the less than N380 daily income. There are other reasons for disparities in internet affordability between Nigeria and other countries. These may include differing levels or lack of competition in broadband markets, different degrees of ICT policy adoption, cost of infrastructure developments, lack of innovation, or even geographical disadvantages. The broadband market in Nigeria has seen little activity. In 2020, when the COVID0-19 was at its peak, investment in broadband practically halted. Investment in fixed broadband internet remains at less than 1 percent of total investments in the telecom industry.

L-R: Doyin Salami, chairman, Nigeria’s Economic Advisory Council; Ben Akabueze, director-general, Budget Office; Nneka Onyeali-Ikpe, managing director/CEO, Fidelity Bank, and Bismarck Rewane, CEO, Financial Derivatives, at a day summit on the economy by bank CEOs, organised by the CBN/Bankers’ Committee and Vanguard Newspapers in Lagos, weekend.

covid-19: one year after

Insurance value proposition, service delivery redefined for customers …as digitalisation becomes unavoidable choice Modestus Anaesoronye

he impact of COVID-19 pandemic in the past year in Africa’s most populous nation has redefined the insurance value proposition, service delivery to customers and operational model for underwriting companies. A situation that was almost like the end of the world when it started here has created new opportunities for product development and innovation, particularly in health insurance and disruption policies. But most importantly, it has also impacted the way product is distributed to customers.

When the pandemic was first reported on February 27, 2020, the first challenge faced by most insurance companies was how to develop a business continuity plan, as the lockdowns and fear of the pandemic forced offices to operate remotely. Therefore, the big deal was how to continue without losing contact and relationship with customers. This development resulted in increase in the desire for digitalisation of services to ensure continuity of product distribution, claims reporting, claims filing and claims payment. When it became obvious that the insured consumers

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could no longer be reached one-on-one as it has always been, insurers had no option but to invest in technologies that would enable them to deliver their services uninterrupted, while operating remotely. Today, it is almost a common practice to see insurance companies comfortably do their business transactions from remote locations, with a larger percentage of their workforce operating from home without much difficulty. COVID-19, some described as a blessing in disguise, again openedtheeyesofinsurerstothe need for new products that take care of business interruptions for both individuals and corporates. @Businessdayng

The lockdown period witnessed a lot of business interruptions, event cancellations, loan failures, contract failures, rising rent debt, failure in credit facilitation and many others, which could be covered under disruption policies insurance. Sunday Thomas, commissioner for Insurance/CEO, National Insurance Commission (NAICOM), said during an interview that considering that most lossesarisingfromthepandemic were not adequately covered by existinginsurancepoliciesduring the period, it had become obvious that current insurance product offerings were not adequate torespondtoemergentrisksand needs of our society.

Monday 01 March 2021

BUSINESS DAY

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Monday 01 March 2021

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Monday 01 March 2021

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NEWS

COVID-19: One year after

Two-bedroom flats are now hot properties in rental market

Travel sector struggles with COVID-19 realities

…Surulere, Ijegun top renters preferred destinations

…fake COVID results, low test centres cause hitches

CHUKA UROKO

IFEOMA OKEKE

ne year after Nigeria detected its first COVID-19 case, the travel industry, which is one of the sectors hardest hit by the impact of the pandemic, is still struggling to fully embrace current realities referred to as ‘new normal’. While airport authorities have since taken certain measures to contain the spread of the virus, such as enforcing social distancing, wearing of nose mask, baggage disinfection before flight, temperature checks before entering airport premises and use of hand sanitisers, the prevalence of fake COVID test results, low test centres and poor profiling and tracing of passengers have continued to cause hitches in travel. Olumide Ohunayo, an aviation analyst told BusinessDay that Nigeria needs to join the rest of the world

in getting vaccines across and ensuring that certification given to passengers testing for COVID-19 goes beyond just printing and downloading, to the use of barcodes that can be verified, as this will help to reduce prevalence of fake results. “The rapid antigen testing is something the government should introduce so passengers don’t go through the stress they are currently going through to get to Dubai and other countries with exorbitant fares,” Ohunayo said. Seyi Adewale, chief executive officer - Mainstream Cargo Limited, told BusinessDay that since the COVID era, there has been standard operating procedures at all airports, adding that airlines and support services such as catering, ground handling and security have been reviewed to include COVID-19 mitigating and preventing processes and procedures. Adewale said port health services have been optimised

and their relevance in the aviation space more appreciated while governments now tacitly use COVID-19 restrictions as a tool against perceived ‘unfriendly countries’ and use same to covet or assist perceived ‘friendly countries’ He noted that aviation despite having approximately one percent contribution to global GDP and having an approximate 35 percent impact in terms of value has endeared governments to give unprecedented bailouts to the sector in order to ensure economic sustainability. “We now see conversion of passenger aircraft or flights for the use as cargo aircraft or flight. This is because cargo flights have reduced restrictions and are more profitable in this era and airlines have been made to procure and have a healthy inventory of HEPA filters,” he said. He, however, recommended that testing centres should be within airports especially international airports or in its

proximity. He further advised that there should be more hotels built within airport domain as seen largely in developed economies, adding that this is important due to rapid flight disruptions or changes to flights, COVID-19 based restrictions during traveling or in-transit. In addition, he said passengers may need to isolate or rerun tests and reside therein until results come out without going back to the city. “There is a need to establish globally acceptable ‘Right of the Traveller/Passenger’ to avoid discrimination, extortion or abuse during this pandemic era. “There should also be global harmonisation of accepted test results as some countries only accept PCR Test while others accept other types of tests such as LAMP. This is confusing to international passengers and many are extorted or exploited in the process,” Adewale explained.

L-R: Ikem Nweke, chief operating officer, Page Financials; Segun Akintemi, CEO, Page Financials; Thomas Isibor, head, ACCA Nigeria, and Aderonke Adebule, business development manager, ACCA Lagos and West Region, during the official certificate presentation to Page Financials as ACCA approved employer (Professional Development and Trainee Development, Gold).

MPC members want CBN to extend loan forbearance by 12 months Hope Moses-Ashike

head of March 1, 2021 (today), which is the expiration date for moratorium on the Central Bank of Nigeria (CBN) intervention facilities, members of the Monetary Policy Committee (MPC) have urged to regulator to extend the forbearance by 12 months. They gave the advice in their personal statement for the January 2021 MPC meeting, released by the CBN on Thursday. This is expected to spur grow th in the economy through giving more time for loan repayment and making

cheap credit available to critical sectors of the economy. The CBN March 16, 2020 granted all Deposit Money Banks leave to consider temporary and time-limited restructuring of the tenor and loan terms for businesses and households most affected by the outbreak of COVID-19 particularly oil & gas, agriculture, and manufacturing. “I am supportive of extending this forbearance by an additional twelve months, which would enable Deposit Money Banks (DMBs) to continue providing reprieve to households and businesses through lower interest rates and repayment moratoriwww.businessday.ng

ums,” Kingsley Obiora Isitua, MPC member said in his personal statement. On 27 May 2020, the CBN approved regulatory forbearance for the restructure of loans of Other Financial Institutions (OFIS) impacted by the outbreak of COVID19. The initiative is part of CBN’S policy measures to mitigate the impact of the pandemic on Nigeria’s economy. The CBN Circular dated 27 May 2020 with reference number FPR/ DIR/GEN/ CIR/06/55 (the “27 May 2020 Circular”) sets out the scope of CBN’S approved regulatory forbearance for restructuring of credit facilities in the OFI sub-sector as follows:

(i) A further one-year moratorium for CBN’S intervention facilities offered through participating OFIS effective from 1 March 2020. (ii) A reduction of interest rates on CBN’S intervention facilities through OFIS from 9 percent to 5 percent per annum effective March 1, 2020. Adeola Festus Adenikinju, member of the MPC said in his personal statement that there is a need for robust oversight on the financial sector and that the CBN must use all tools necessary to ensure that current forebearance granted to bank customers are not withdrawn prematurely.

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gundimu Iseoluwa is a 39year old man working in an oil company and living in Lekki area of Lagos. He was among those caught in the web of worsening economic conditions occasioned by COVID-19 pandemic. Iseoluwa was laid off two months ago from his job as an engineer in the oil firm. To make matters worse, Iseoluwa’s N1.5 million rent which he has been paying annually for a three-bedroom apartment expires next month. His plan now is to relocate to an area that attracts between N500, 000 and N750,000 and downsize his accommodation to 2-bedroom flat. He has also narrowed his search to places like Surulere, Yaba and Okota. Iseoluwa is not an isolated case. There are many more like him who may have taken pay cuts or lost their jobs. In a bid to avoid embarrassment from their landlords, these tenants have started looking for smaller apartments. They reason that with income reduced, they have to cut down on expenses and the first thing they seem to want to cut down on is rent. Children’s school fees are next in consideration. Estate surveyors and valuers plus other realtors say they are receiving phone calls of people looking for small size, budget-friendly family units to rent. Big size family units like 3 and 4-bedroom, terraces and duplexes are no longer in high demand which is a reflection of consumers shrinking wallets. “That is the reality in the market at the moment. People are losing jobs or taking pay cuts. These people can no longer afford their current accommodation. But they must live somewhere even without jobs. So, they are looking for smaller units like one-bedroom or 2-bedroom flats. Today, over 60 percent of those looking for homes to rent or buy are for these small size units,” MKO Balogun, CEO, Global PFI, confirmed to BusinessDay. Already, investment interest is growing to respond to this market reality. Investors are now refocusing and rethinking their products offering at both the high and low end markets which has seen both intra and inter-area movement of renters. The opportunity, according to them, is compelling. Africa Capital Alliance (ACA) and UAC Property Development Company (UPDC) are leading the pack in providing luxury small size family units. ACA’s Blue Water Lagos is a contemporary mixed-use development comprising five 17 to 20 storey residential build@Businessdayng

ings. The Phase 1 of the project called Sapphire Residences offers over 130 units that are predominantly 2-bedroom apartments. Obi Nwogugu, Principal at ACA, told BusinessDay that almost the entire units have been sold out. In Surulere, Lagos, where estate agents and landlords are making brisk business arising from high demand for 2-bedroom apartments by renters, BusinessDay found out that investors have turned many parts of the area into huge construction sites, doing what is, arguably, gentrification at its best. “Because of its flexible location that makes it easy for residents to go to either the Mainland or the Island with ease, this area is in hot chase and properties here have become hot cakes. We are finding it difficult to cope with demand,” Uche Ibezim, a professional estate agent said. In Aguda, Ijeasha and Itire areas of this market node, BusinessDay found out that many old houses were being pulled down and new ones being developed. Also, some old houses were being remodeled to respond to the new demand from home seekers. According to Ibezim, due to high demand, landlords were marking up their rents almost on daily basis, explaining this is the reason people are changing address. “You see people from the Island moving to Surulere, Ilupeju, Gbagada and Yaba, while low income earners in these locations have been forced by rent increases to move to the suburbs like, Egbeda, Ikotun, Okota and Ijegun,” he said. He noted that in these suburbs, despite the poor state of infrastructure, landlords are also increasing rents, citing Ikotun and Ijegun where house rent for 2-bedroom apartment has gone up from N180,000 per annum in 2019 to between N250,000 and N400,000, depending on the age of the property. Though this trend is not so pronounced in the highbrow locations of the Island, experts say it seems imminent with economic condition getting worse despite Nigeria exiting recession. “A tenant paying N15 million rent per annum will perhaps step down to a 10 Nmillion rent property,” explained Gbenga Olaniyan, principal partner at Gbenga Olaniyan and Associates and CEO, Estate Links Limited. “This cascades all the way down as someone paying N2 million suddenly realises he can’t afford it and wants to rent a flat of N1 million,” he added, disclosing that his firm has not witnessed any inter-area movements but more of intra-area searches where renters seek cheaper accommodation in the same location.

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Monday 01 March 2021

news

Apapa: Residents, businesses in high spirit as sanity returns to port city CHUKA UROKO & JOSHUA BASSEY

t was a moment of joy for businesses and residents of Apapa, Nigeria’s premier port city, as they celebrated the milestone achieved at the weekend by the introduction of an electronic call-up system that has ensured trucks are no longer littering their environment, thus bring back sanity to the troubled city. After years of untold hardship and deaths, sanity returned to Apapa, a once thriving port city brought to its knees by protracted traffic gridlock. Apapa had in the past several years defied effort to solve its traffic problem. The efforts, including a presidential task team, were blighted by corruption. The take-off of the electronic call-up system (Eto App) introduced by the Nigerian Ports Authority (NPA) has done what could pass easily as a magic and residents and businesses in the port city are in high spirit as they celebrate this

uncommon feat. “If you have been to Apapa in the past you will know what I am talking about. Our businesses went down, property lost value and people were dying,” an elated resident, Chukwuma Vincent, said. “We call on NPA to sustain this. I drove through to my house for the first time in many years and I cried. I thought we had no government in Nigeria again. This is worth celebrating and I can only hope it lasts,” Vincent said. To underscore their appreciation of what has happened, Vincent said they were on mountain of prayers now, telling God that “any evil fashioned against our governor, Babajide Sanwo-Olu, Hadiza Bala Usman, the NPA managing director, Apapa Local government chairman and the current Apapa traffic task force members will not prosper. God bless Apapa Local government, God bless Lagos state, God bless Nigeria. Kudos to the team.” Another resident who did not disclose his name want the

local government authorities to come and clean the road that had been made dirty by the rampaging trucks now that they are out of the way. According to this resident, what has happened is really is “tear inducing... it really has been quite a psychological and physical ordeal... Apapa! I am almost scared to believe... it’s been that terrible to my everyday mental state ...” He prayed God to save Nigeria, touch the hearts of our Every-Leader in every position do right by us all, thanking God for this beginnings. In a spirit of ecstasy, another resident exclaimed, “Wow; please, has anyone property to sell? Swimming pool and all that? I am now interested!” Ayo Vaughan, chairman of the Apapa GRA residents association, had expressed optimism in the electronic call-up system, appealing to the NPA authorities and the Lagos State government to ensure that it was free from human influence and manipulation. On Saturday, when BusinessDay monitored the com-

mencement of the new call-up system, it was a tale of two worlds at the two major routes to the ports. Whereas the Western-Avenue-Ijora BridgeWharf Road axis was a success story with the whole stretch free of trucks, the same story could not be told of the ApapaOshodi Expressway, which still had heavy presence of trucks, especially between Coconut Bus Stop and Tin Can Port First Gate. However, there was a significant improvement on Sunday. Driving into Apapa from the Ijora end of the Iganmu axis was a pleasure on Sunday as the trucks that usually lined up the roads and bridges had gone. BusinessDay observed that the stretch of Ijora-Apapa Bridge connecting the Area B’ Police Command was free of trucks, thus allowing easy and seamless movement into Apapa. A security operative who spoke with our correspondent, said they had been working hard since Saturday, February 27 when the e-call up became effective, to maintain order

and ensure that only trucks with valid permit get through to the port. “Only trucks with valid permit are allowed. In fact, none is even allowed to leave their park without being called up. The directive from the government of Lagos State and the NPA is very simple, no valid permit, no entry. Any violation of this order means impoundment of such truck,” said the security operatives. “This is the beginning of a better journey time for our citizens within the Apapa seaports and environ. This electronic system has limited interface with security operatives and unions, which usually cause the gridlock problem. It will be a simple case of possessing electronic clearance. If you don’t have it, you don’t have any reason to be around the seaports,” Sanwo-Olu assured. BusinessDay’s assessment of the mood around the port reveals that people were open and even hopeful about the effect of the newly introduced electronic call-up system in the long run. But the immediate

impact did not sit well with importers and agents. According to Onyekachukwu Emechebe, chairman of Maritime Container Haulage Association, the system is expected to favour members and cut off the overbearing extortion from security officers. Members expend N100,000 to N400,000 to move goods. But, in spite of this, concerns and doubts remain over efficient implementation and sustainability of the new system. “Before you introduce a thing, all stakeholders should come together, but with what they are trying to do it seems the lesser evil will be out of the way while the mighty ones high-jack it,” Emechebe. “It will restore sanity if they will comply with it. Something like this has been introduced before but was not upheld. There was a time all trucks were led to Lilypond Transit Truck Park before heading to the main port. But while others queue at Lilypond for weeks, you will see officials flying trucks directly to the port. That the discouraged people.”

Picture (l) shows how impounded trucks were turned back by NPA’s security team stationed at Area B Police Command Headquarters on Sunday. while picture (r) show empty Apapa Bridge. Pic by Desmond Okon

Goods worth millions of naira destroyed as fire razes shops in Edo Churchill Okoro, Benin

oods worth millions of naira were on Saturday night consumed by fire at some parts of Oregbeni Market along Ramat Park in Ikpoba-Okha Local Government Area of Edo State. According to e yew itnesses, the fire started at about 9pm and destroyed many shops, including container shops and makeshift stores. However, as of the time of filing in this report, the cause of the fire has not been ascertained, and the fire had been extinguished by fire fighters. A victim, who initially declined comment, later said it was irrelevant to speak on what happened because help would not come from those in authority. In his words, “Are you going to help me if I talk to you?

I want to be left alone.” An eyewitness, who gave his name as Peter, said, “At about 9pm, we saw smoke billowed up into the sky from one of the shops and before we knew what was happening, the whole place was on fire. “Before the fire fighters came to the scene, the fire had already burnt the shops and razed goods worth millions of naira. Most of the shop owners could not salvage their goods as the shops were destroyed before their arrival.” According to another eyewitness, John Izu, they are still in shock as to the cause of the fire because there was no electricity in the area when the fire started. “This is an electronic shop and goods here worth over N10 million. I know the owner and he is currently at the hospital because of the incident,” he said. www.businessday.ng

Mines, steel minister to deliver ICM lecture MIKE ABANG, Calabar

inister of mines and steel development, Olamilekan Adegbite, will be the keynote speaker at the quarterly webinar series of the Institute of Change Management (ICM). In a statement by Nat Osewele, the president of the Institute, on behalf of the Governing Council, notes that the theme of the webinar is Unlocking Opportunities in Disruptive Times - The Mining Sector as the Game Changer for Nigeria. At the event, which holds on March 18, at 3pm, the minister will use the opportunity to make some policy statements about the mines ministry, particularly the much talked about economic diversification plan of the Federal Government and the contributions of the mining sector in this effort. The webinar series is part of the Institute’s social responsibility initiative to the change

management community and Nigeria as a whole. The event, which usually attracts large participation, will be attended by ICM members and other professionals, including members of the business community, the academia, media and foreign participants. The statement also notes that the ICM annual lecture series for 2021 with the theme: Change Begins from the Mind - Breaking Barriers to Development Through Innovation and Change Mindset comes up on July 15, at the Golden Gate Restaurant, Ikoyi. Participation in both events is free, and details regarding zoom link/access will be released later. The Institute is the professional body with the mandate to regulate, train and certify change management practitioners in Nigeria. Its mission is to build skilled and competent professionals to support businesses, organisations, agencies, institutions etc. as they adapt to a changing world.

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DevEast, partners mull Eastern Nigeria Economic corridor

evEast, a non-profit economic advocacy foundation, and its partners have embarked on a long-term project to champion the economic development of Eastern Nigeria. On March 12, the development partners will gather experts across the South-South/SouthEast to discuss the Eastern Nigeria Economic Corridor, the foremost economic bloc in Nigeria. The workshop is themed 2021 Eastern Nigeria Economic Outlook: Envisioning a New Economic Corridor. The event, according to organisers, will be held in partnership with several economic actors including chambers of commerce, professional groups in the former Eastern Region and will feature professionals across several fields, but especially key focus sectors like oil and gas, critical infrastructure including transport and logistics, telecoms, shipping, manufacturing, human services. Collins Onuegbu, founder @Businessdayng

of DevEast, said, “There are 11 states in the South East and South South regions of Nigeria. As an economic unit, this bloc has a GDP of $111 billion - creating an Economic Corridor that is one of the biggest in Africa. This corridor also hosts the oil/gas industry that has been the mainstay of the Nigerian economy for the past 50 years. Its population of about 75 million makes it the fifth largest populated country in Africa after Nigeria, Ethiopia, Egypt, and DRC.” Continuing, he said, “Its small landmass means that there are 75 million people in an urbanised small landmass that are connected. There are at least 10 midsize cities in the bloc and tens of tertiary cities, creating a connected bloc that is reachable by road in about three hours end to end. Its connection to the Atlantic Ocean makes it easy for the development of an integrated transportation system that includes roads, ports, rivers, and airports, both local and international.

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Towards a new Nigeria: From federal fatherism to a commonwealth AKINWUMI ADESINA

our Excellency, Gove r n o r A k e re d o l u , like an athlete on the fourth and final lap of a 400-metre race, you must now run for the home stretch with your eyes fixed at the finish line, which is ahead of you. It is a race for Legacy; for you and for the people of Ondo state. You stand today as governor of Ondo state for a second time by the grace of God, be the instrument to change things more radically. Make your second term one of double blessings for the people, make growth more inclusive, harness the dynamism and entrepreneurship of the youth and the power of the industrious women of Ondo state. This is the time to consolidate, this is the time to readjust, this is the time to move at a faster pace than you ever have. Now there is always a tendency for complacency during a second term with the pressure of running for re-election no longer a factor. In such situations, the sense of urgency can easily evaporate, therefore with an eye on history this is the time to reignite your vision. When the pages of history are turned let them be turned to remember you for the exceptional good that you have done for the people of Ondo state. Your excellencies, ladies and gentlemen, as Ondo state and all other state thrive and prosper, Nigeria will thrive and prosper. As a minister of Agriculture in Nigeria, I had a great opportunity to work with all the state governors and state governments when I launched the agricultural transformation agenda that revolutionized Nigeria’s agriculture and food security and we turned agriculture into a business. I recognise that success required that I work very closely with all state governments of the federation regardless of party affiliation. I am reminded that we are all members of the same body, the eye cannot say to the mouth that I have no need of you, the hand cannot say to the head, well I have no need of it, all members of the body are important and indeed we give great attention to our weakest parts. Without a state there will be no Nigeria, therefore Nigeria can only be as strong as its constituent States. Ondo state is rich in resources. Nigeria has the second largest deposit of bitumen in the world with an estimated 37 billion barrels of bitumen reserves, the bulk of which is found in Ondo state.

Adesina

This vital resource remains untapped in Nigeria. Given its vast resources in bitumen, Ondo state should have the best roads in Nigeria, wouldn’t you think? But several of its roads are barely tarred with bitumen. Your Excellencies, this is the irony of Nigeria, it imports what it has in abundance and leaves it own resources untapped. The total value of bitumen reserves in Nigeria is worth up to $1.5 trillion with an estimated 16 billion barrels in Ondo state, a potential state wealth from bitumen alone could be worth $657 billion according to a state of states report. The paradox however is that Nigeria has spent over N300 billion importing bitumen. The publication of the state of state 2018 shows that the vast deposits of bitumen can help Ondo state to break into the asphalt shingles market estimated to be worth $10 billion globally by 2022. It could become a leading exporter of bitumen into Africa through the Africa Continental Free Trade Area. Ondo state also has abundant deposits of metals, minerals such as granite, gold, marbles, gemstones, lignite and theorite. The state has one of the largest gas deposit in the world, it could also become a leading exporter and processor of cocoa and earn at least $1 billion per year according to the state of states 2018 report. Ondo state’s wealth is not seen, it’s locked underground, the state ranks number 13 out of the top 20 States in Nigeria in terms of its GDP estimated at $8.4 billion, now that is the irony of Nigeria States. They are poor in the midst of plenty, they do not maximally explore or lever-

age what they already have in abundance. The federal system of monthly grants has simply paralyzed them with stupendous resources all concentrated at the centre, the states are ever dependent on the centre. With the magnetic field of federal revenue allocation, states are constantly pulled powerlessly into perennial dependency. State governors now spend more time in Abuja than they actually do in their own state seeking the monthly federal manna. This financial privilege creates a sense of helplessness and overdependence on the centre. Like a pendulum, ever moving from side to side in constant motion, so too has this unfortunate dependency become seemingly unstoppable. The truth however is that to survive and thrive States must become financially independent of the centre in Abuja. The United States of America from which Nigeria derived its federal system is essentially a coercive federalism. The federal government uses conditional grants to the States to mainly support social infrastructure and insurance programs, essentially these carrots together stays to do whatever the centre expects. Nigeria system is essentially a revenue-sharing system, it is less restricted compared to the US federal system, however in the United States whose political system we have borrowed, most of the resources of the state come from taxes, personal income taxes, corporate taxes, property taxes and consumption taxes as well as administrative fees. Federal grants account for only a small fraction of the resources of the State now the

opposite is the case in Nigeria, where federal revenue allocations are the lifeline of state governments, cut it off and 92 percent of Nigerian states will fail. To be clear only three states in Nigeria can survive without a federal revenue allocation. This is a federalism of physical dependency, it is a federalism that is physically unhealthy for the state and the federal government because Nigeria depends on oil for over 70 percent of government revenues and a decline in the price of oil creates fiscal and economic volatilities that reverberate across the states. What is needed is greater economic and fiscal autonomy for the states, the issue is less about state or regional autonomy but financial and economic viability of Nigeria’s constituent states. Now if Nigeria were to be a conglomerate Firm, as a firm, it will not be economically viable because 92 percent of its constituent subsidiary companies are not viable without the support of the Holding Company. Nigeria’s federalism does not grow its constituent entities it simply makes them perpetually dependent, the Nigerian system is therefore not federalism but fatherism. The agitation for decentralization can be understood when viewed in the light of the craving for greater autonomy, well let us face it political autonomy is meaningless unless it is backed by greater fiscal self reliance at the state level which tend to copy systems that are not well suited to our context. The United States that we copied from does not control resources at the state level, instead the states generate the bulk of their income from taxes, this is

not the case in Nigeria you can only tax people that have liveable income and that is not the reality. Nigeria has an estimated 87 million people living in extreme poverty; you cannot tax people who can barely afford to eat. This debilitating poverty makes the country highly vulnerable to social and political risks and it provides for anti-social behaviour and recruitment by insurgents and terrorists. Poverty provides a supermarket for terrorists. Your Excellencies, ladies and gentlemen the level of indebtedness of Nigeria is extremely high at N22 trillion, the debt stock of states is over N4.1 trillion. The three states with the highest revenues also have the highest levels of debt. Without incomes and rising debt, many states are essentially not viable. Nigeria’s inequality is also extreme with over 50 percent of the youth not having jobs; rural areas are now zones of economic misery with high rates of poverty and extremely high birth rates. Now this double whammy continues to perpetuate an intergenerational transfer of poverty. Poverty comingled with high levels of unemployment and underemployment has led to an astonishing rise in crime, banditry and kidnappings. To extricate ourselves from this quagmire, Nigeria must seriously tackle problems of extreme rural poverty, hopelessness, the unemployment and underemployment of its largely youthful population. Now it is impossible to keep the lid on a kettle that is boiling. When the kettle boils, you need to lift the lid and let the heat out. For stable government, the people must be allowed space to express themselves. If nations and states are about people, then people’s hopes and aspirations, demand and sometimes their complaints must be heard. We are all leaders and sometimes leaders think all is well when actually it is not. One of the great dangers of leadership is to rely on others to tell you what is going on, effective leaders must connect themselves. You can delegate tasks but you cannot delegate your vision and responsibility. Effective leaders must listen, they must respect, they must feel, they must communicate, and they must act in the best interest of all.

Extract from an inauguration lecture delivered by Akinwumi Adesina, president, African Development Bank, during the swearing-in of Governor Rotimi Akeredolu for a second term in Ondo state.

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