BusinessDay 02 Apr 2020

Nigerian doctors battling Covid-19 urge full compliance with lockdown to avert disaster ANTHONIA OBOKOH

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he special centres springing up in Lagos to manage the deadly coronavirus might be empty today while the total number of confirmed cases in Nigeria is yet below 200, but

doctors fighting the outbreak are warning against letting down guards in delusion as the worst may still be ahead of the country.

Lagos, Nigeria’s commercial capital, began a 14-day lockdown only on Monday and residents have been caught flouting the stay at home order or are

complaining, but one senior doctor at the centre of battle to contain the debilitating disease told BusinessDay in Lagos that the level of compliance with the lockdown still needed to be raised.

And this is why.

“Working with a population

of 20 million in Lagos, if we assume that 0.1 percent of this may become infected, that will give us something like 200,000 cases in Lagos alone,” the doctor told our reporter.

“And you cannot even say this is the worst-case scenario yet.

The number of beds in the cen-

tres today is around 300 and not all have ventilators. So, you can see the kind of risk we are talking about and why the people must be made to fully comply with the lockdown,” he said.

According to the doctor, “The Continues on page 32

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news you can trust I ** thursDAY 02 april 2020 I vol. 19, no 533 LOLADE AKINMURELE & ENDURANCE OKAFOR

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n a situation where Nigeria is able to contain the outbreak of coronavirus, the economy could still go on to contract by as much as 3.4 percent in 2020 as global oil prices tumble, according to estimates by global consulting firm, McKinsey & Company.

That would be a growth decline of almost 6 percentage points from the country’s 2.27 percent GDP growth in 2018.

“That would represent a reduction in GDP of approximately $20 billion, with more than twothirds of the direct impact coming from oil-price effects, given Nigeria’s status as a major oil exporter,” McKinsey & Company Continues on page 32

Inside

Lekki Deep Seaport receives $221m equity funding from China Harbour P. 6 Challenges of COVID-19 on autism community, caring for the child and keeping hope alive P. 28

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McKinsey expects 3.5% slump in Nigeria GDP for 2020 Even if Covid-19 is contained

L-R: Devlin Hainsworth, MD, Foods Division, Flour Mills of Nigeria plc (FMN); Gbolahan Lawal, commissioner for agriculture, Lagos State, and Boye Olusanya, group chief operating officer, FMN, at the official handover of food products donated by FMN, as part of its commitment to mitigate the impact of the lockdown instituted to reduce the spread of coronavirus across Nigeria.

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Research&INSIGHT A WEEKLY PUBLICATION OF BUSINESSDAY RESEARCH & INTELLIGENCE UNIT(BRIU)

In association with briu@businessday.ng

08098710024

How coronavirus threatens 75% of Nigerian economy TELIAT SULE

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frica’s biggest economy, Nigeria, recorded its first case of the novel disease, coronavirus on the 27th of February 2020. But as at March 30, 2020, the total number of confirmed cases had risen to 135 with two deaths.

This is still far below the cases in other countries. Many observers have attributed this to the number of tests being carried out daily in this country which is below what is obtainable elsewhere.

How the coronavirus tests are conducted is actually not the focus of this write-up but rather, some of its implications for the Nigerian economy. By the rule of the thumb, when the coast is clear, coronavirus might have affected about 75 percent of the nation’s gross domestic product (GDP).

Towards the end of 2019, the Nigerian National Assembly passed the 2020 Appropriation Bill, where crude oil benchmark was set at $57/barrel. The oil revenue accounts for about 75 percent of Nigeria’s revenue. With the coronavirus pandemic, demand for crude oil crashed, resulting in the oversupply of the product.

OPEC and Russia moved to further strengthen their alliance so that production cut would be implemented; the talks failed and afterwards, price war ensured.

Saudi Arabia, which boasts of over 10 million barrels of crude oil per

Source: NBS, BRIU

day with over $500 billion in external reserves believed it could force the Russians into an agreement.

As a result, the kingdom enticed European customers with significant price cuts. Russia remained unperturbed as they believed they could weather the storm. The prices of crude oil further crashed in the market, and presently, it is heading to $15 a barrel.

The Nigerian 2020 appropriation bill is among the first sets of casualties because the continuous downward trend in crude oil prices made a mess of the budgetary document. As a strategic response, an emergency meeting of the stakeholders was held to the effect that the budget benchmark for crude oil was reduced by 47.

4 percent to $30/barrel. Even at that, there is no solution in sight as many forecasts have said that crude oil may trade at about $10 per barrel unless OPEC and Russia or OPEC and USA strike a deal.

Presently, with the reduction in budget benchmark for crude oil, the Nigerian economy has been deflated by almost 50 percent.

The spread of the coronavirus pandemic has affected about ten states in Nigeria. To contain the spread, about seven states are in a lockdown, and the restrictions came from either the federal government directives as in the case of Lagos, Ogun and Abuja, or self-imposed by state governors as in the case of Kaduna, Rivers, Imo, Osun and Ekiti states, among

Source: NBS, BRIU

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others.

Nigeria’s commercial centre, and the administrative city, Lagos and Abuja are the epicentres with 81 and 25 confirmed cases. Next in line is Oyo State with 8 confirmed cases. Ogun State has 4 cases while Enugu, Edo and Bauchi have 2 cases each, Osun, 5, and Ekiti, Rivers and Benue states have a case each; Kaduna, 3. Eight of those confirmed cases have been discharged just as Nigeria has also recorded two deaths since the index case surfaced in Lagos.

Government response has been commendable, with the mobilisation of health personnel as well as managing the public expectations and the implementation of preventive measures.

Notwithstanding, the Nigerian economy, as well as other countries battered by this disease will still count their losses at the end of the day. Nigeria’s gross domestic product (GDP) is broadly classified into three sub groups which are agriculture, industries and services.

Based on the measures taken so far, the services sector is the most affected. This is because shortly after the pandemic started to spread, the government of the federation imposed a ban on international flights in and out of the country.

The services sector accounted for 53.62 percent and 52.60 percent of Nigeria’s GDP in 2018 and 2019 respectively. Within the services sector are the trade, air, sea and road transportation; education, information and communication sub sectors, among others. All the sectors are significantly affected.

It is interesting to know that

@Businessdayng

local airline operators airlifted 2.87 million passages in the first quarter of 2018 and 3.13 million passengers in the second quarter of the same year. In 2019, passenger movements within the local airports reached 2.99 million in first quarter and 3.37 million in the second quarter. In both years, the local wings of the Muritala Muhammed Airport in Lagos and Nnamdi Azikiwe Airport in Abuja were the preferred choices of the local air travellers as they accounted for over 60 percent of the passenger movements.

On the international wing, 980,411 and 1.07 million international passengers used Nigerian airports in the first and second quarters of 2018. In 2019, the total international departures and arrivals in the first and second quarters equalled 1.11 million and 2.12 million passengers, with Lagos and Abuja the leading destinations, according to the data sourced from the National Bureau of Statistics (NBS). With the global ban on international movements, the gains the Nigerian aviation sector recorded in the first and second quarters of the last two years will be greatly affected.

Another sub sector that will be significantly affected is the industry sector which has its workforce impacted by the lockdown; distribution of goods affected, and with skeletal services being performed by the deposit money banks, there is little manufacturing firms can do now as it is clear that majority of them might not perform optimally with a partially functioning financial system. The industry sector in 2018 and 2019 accounted for 22.24 percent and 22.25 percent of the country’s GDP. Therefore, the combined sectoral GDP of industries and services in either 2018 or 2019 amounted to 75 percent on the nation’s GDP. The impact could be more than this guestimate.

The states affected in Nigeria control about 55 percent of the Nigerian economic activities if we use their contributions to full year 2019 IGR as proxies for their GDP weights. Lagos accounted for 30.1 percent of the IGR of the 36 states of the federation in 2019; Rivers accounted for 10.9 percent; FCT Abuja, 5.6 percent; Ogun, 5.4 percent and Kaduna, 2.9 percent.

Put together, the coronavirus pandemic is a whirlwind that blows nobody any good.

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news community transmission of COVID-19 NNPC appoints Custodian & Allied, Allianz Nigeria Rising strengthens case for social distancing lead underwriters for 2020/2021 insurance cover ISAAC ANYAOGU

Modestus Anaesoronye

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he Nigerian National Petroleum Corporation (NNPC) has appointed Custodian & Allied Insurance Company Limited and Allianz Nigeria as lead underwriters for its insurance risks in 2020/2021 business year.

Custodian & Allied will lead NNPC’s oil assets and liabilities cover for the period, while Allianz Nigeria will lead its non-oil assets cover during the same period.

The appointment, which took effect from April 1, 2020, will last for a one-year period to terminate on March 31, 2021.

Worldmark Insurance Brokers and Hogg Robinson Nigeria were retained as insurance brokers for the country’s oil corporation insurance risks.

The appointment followed the submission of bids by different underwriters and brokers which commenced on Tuesday, November 12, 2019 at the corporation’s headquarters in Abuja.

Custodian, a leading insurance company with extensive experience in oil and gas underwriting, has at various times in the past led the consortium.

Feelers from other industry practitioners allude to the fact that this year’s NNPC

bid process was professionally handled and adjudged the best.

Attempts to reach Toye Odunsi, Custodian and Allied Insurance MD, to comment on the development proved abortive, while sources in Allianz Nigeria could not also be reached for confirmation and comments.

NNPC had said that selection of brokers and insurance companies for coverage of its assets and non-assets risks for the 2020/2021 business year would be strictly based on track record and service excellence.

Mele Kyari, group managing director of NNPC, had said then that the evalua-

tion and selection process would be transparent and accountable in keeping with the corporation’s Transparency, Accountability, and Performance Excellence (TAPE) agenda.

He said there would be a level playing field for all the bidders to guarantee the emergence of the best among them based on their respective track record and commitment to excellence.

He stated that NNPC was desirous of engaging reputable and competent professional brokers that could provide unparalleled and exceptional valuation and insurance services to sustain its drive for excellence service delivery.

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ew cases of coronavirus infections bei ng re c o rd e d in Osun, Ekiti and other states indicate that community spread is rising in Nigeria, underscoring the increased need for social distancing which some government activities may even compromise.

Akin Abayomi, Lagos State commissioner for health, while briefing journalists on March 31 said that cases of community transmission were rising.

Community transmission means people have been infected with the virus in an area, including some who are not sure how or where they become infected, says the United States Center for Disease Control (CDC).

Large crowds converging at centres chosen by state governments to distribute food may soon become COVID-19 vectors unless smarter ways are devised to distribute critically needed provisions for lowly Nigerians.

Nigerian prisons have always been inadequate to house all the inmates sent there such that overcrowding has become a norm.

Though there has been a

directive from the minister of interior to decongest custodial centres, many are still overcrowded.

“Kaduna Custodial Centre was built to house 540 inmates. It currently has well over 1,200 inmates. Urgent decongestion is better than a jail break. A COVID-19 outbreak in there would be catastrophic,” said Oluwafunke Adeoye, who works for a non-profit devoted to human rights, in a social media post.

Adeoye also said that the Ikoyi Custodial Centre was built to house 800 inmates but “there were 3,360 inmates locked in there” as at March 2020.

“Social distancing or selfisolation would be impossible.”

As the Nigerian police begin a crackdown on defaulters of the lockdown directive issued by the president, their characteristic overzealousness and brutality will lead to a boost in the numbers of people detained, further helping community spread of the virus.

The remark by Hakeem Odumosu, Lagos State commissioner of police, in a television programme that official ID cards are Continues on page 32

Banks’ credit to real sector nears 5-year high to N17trn The usually fully occupied Marina Car Park was empty on Wednesday as Lagosians observe the 14-day lockdown directive by the Federal Government to curb the spread of COVID-19.

Pic by Pius Okeosisi

Nigeria must prepare for a big hit in a prolonged recession, say UK experts

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embers of a webinar panel of experts organised by the Financial Times yesterday said Nigeria would take a big hit from the current collapse in oil price and the prolonged recession that would follow the deadly coronavirus pandemic that has gripped economies of the world.

The panel was asked to examine how deep the economic recession would be and whether countries of the world were putting up the right response.

The panel moderated

by Chris Giles, the FT’s economic editor, was

composed of Lord Adair Turner, former chair of the UK Financial Services Authority, Rain Newton Smith, chief economist of the British Confederation of Industry, and Martin Wolf, the FT’s chief economics commentator.

A global audience attracted to the webinar participated in vote with most of them saying they expected to see a prolonged, difficult economic period or a recession ahead.

According to the panellists, people of the world were most likely to raise demand for agile, capable, quick thinking and acting government in their different countries at the end of the coronavirus www.businessday.ng

pandemic.

They also said they expected there to be an explosion in unsustainable debt in the global oil industry while a country like Nigeria would take a big hit from the oil price collapse and the economic shrinkage that it will force.

In addition, the experts said for the UK, the matter of a quick Brexit settlement was off the front burner although they expect that the European Union would survive the economic crisis that is unfolding.

One issue which they agreed was difficult to handle was the balance between pushing for the health of the nations and

the need to keep economies around the world going because of the impact of the lockdown imposed by different governments.

They called the joggling a new normal but agreed that the lockdown would need to be tough enough to work well in delivering desired results at short time to enable the shackles to be dismantled.

None of them expected the lockdown to go when the world is still grappling with bed shortages and the absence of ventilators around the world.

The panellists also said they do not expect any significant clampdown on capitalism when the pandemic is over.

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... as LDR policy pays off ... analysts divided on lenders’ loan book growth Q1 2020 HOPE MOSES-ASHIKE & BUNMI BAILEY

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he Nigerian banking sector recorded the most credit growth to the real sector of the economy in almost five years, hitting N17.1 trillion in the fourth quarter of 2019.

The breakdown of the sectoral credit shows that oil & gas and manufacturing sectors got credit allocation of N3.42 trillion and N2.62 trillion, respectively, to record the highest credit allocation as at the period under review.

The National Bureau of Statistics (NBS) released its sectoral banking sector report on Wednesday, which showed that year-on-year deposit money banks’ credit to the economy stood at N13 trillion in 2015, rose to N16.1 trillion in 2016, contracted to N15.7 trillion in 2017, further declined to N15.1 trillion in 2018, and picked up the most to N17.18 trillion in 2019, helped by the @Businessdayng

policies of the Central Bank of Nigeria (CBN).

To spur growth in the economy, CBN in October 2019 raised the Loan-to-Deposit Ratio (LDR) of banks to 65 percent, after the September 30 deadline given to the banks to raise LDR to 60 percent.

Gbolahan Ologunro, a research analyst at Lagos-based CSL Stockbrokers, said it was clear that CBN policies in trying to direct banks to lend to the real sector have been effective. Apart from the LDR policy, banks were also restricted from participating in the Open Market Operations (OMO) bills which supported more lending to the economy.

From the demand side as well, he said corporates and individuals were also restricted from investing in the OMO bills which meant that corporates would make records to banks in terms of getting liquidity for investment purposes.

Thursday 02 April 2020

BUSINESS DAY

news Covid-19: Why NERC must rally round electricity market amid pandemic scare HARRISON EDEH, Abuja

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mid the global disease scare posed by the deadly coronavirus pandemic, experts want the Nigeria Electricity Regulatory Commission (NERC) to rally round the Nigeria’s electricity market while making case for a post COVID-19 sustainable electricity market driven by a structured efficient market.

The global economy is already witnessing a downturn amid the COVId-19 scare, industry analysts said the Nigerian electricity market policy makers must commenced the process of rallying round the market in such a manner that investor confidence is not eroded after the pandemic.

Already, the Nigerian government had directed the Vice President to head the panel of

post COVID-19 economic sustainability era; this is as industry analysts make case for an efficient electricity market for a post-COVID-19 era while also rooting for intervention that will bolster market efficiency.

“The market must be reset beyond the tariff review to drive efficiency. For instance, a loan at a single digit interest rate for the Meter Access Providers to meter about 4.6 million Nigerians is inevitable to drive market efficiency,” Chuks Nwani, an energy lawyer and power sector governance analyst, said.

“The government must find a way to ensure loan at a single digit interest rate for Meter Asset Providers while ensuring a flexible payment plan of at least five years moratorium in such a manner that will ensure everyone is metered, and to assist the Meter Asset Providers and drive efficiently meter driven market,” Nwani said.

According to Nwani, “The government must find a way to build confidence on the investors. For instance, the same way the Central Bank of Nigeria and the Finance Ministry is rallying round to resuscitate the economy post-coronavirus era that must be the way to drive intervention into the power sector to sustain investors’ confidence into the sector.”

Recall, the reform process of the power sector was backed by the Electricity Power Sector Reforms Act of 2005, which was the law that even gave birth to the establishment of the Nigerian Electricity Regulatory Commission (NERC) as the policemen of the sector.

However, several problems that pre-exist before the privatisation still rear its ugly heads post privatisation prompting uproar and the public picky each time the regulator tries to increase the tariff.

World Autism Day: ‘People with Autism have their own aspirations, dreams, God-given potential’ ANTHONIA OBOKOH

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anaging director/CEO of Guaranty Trust Bank plc, Segun Agbaje, speaking about the bank’s Orange Ribbon initiative as Nigeria joins the rest of the world to commensurate World Autism Day, says with autism being reported constantly, it is crucial that we continue to educate people around us, promote awareness and acceptance of individuals with autism.

“People with Autism have their own aspirations, dreams and God-given potential, just like any other person; they just require a little more support to live fulfilling lives. We strongly believe that reaching out and supporting these children and adults who are often the most vulnerable in our society is how we truly demonstrate our shared

humanity,” Agbaje states.

According to Agbaje, as a bank, we are delighted to be a part of this great initiative and it gives us so much joy that we can impact our society and enlighten people on the need to create more enabling environments for children living with autism.

“The bank will continue to be a Voice for people living with Autism by constantly investing in initiatives that help them lead better lives and by partnering with like minds at home and around the world who share in our belief in a world full of support and attention and free from stigma and prejudice, against people with special needs,” he said.

Over the years, there have been various themes that have sought to highlight the needs and propose ways of addressing the challenges faced by Autistic

people, their families and immediate environment.

According to the United Nations, the 2020 theme is “The Transition to Adulthood”. As expected, adulthood is typically equated with becoming a full and equal participant in social, economic and political life of one’s community. However, the transition to adulthood remains a fundamental challenge for anyone with autism majorly because of the lack of opportunities and support devoted to this phase of life.

The World Health Organisation states that one in 160 children live with Autism Spectrum Disorders (AUD) worldwide.

Further statistics show that 135 million established cases of Autism in the world, with more than one million children and teenagers suffering from the condition in Nigeria.

FG may extend lockdown to other states, as Osun overtakes Ogun Tony Ailemen, Abuja

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here are indications that the current lockdown ordered

by President Muhammadu Buhari may be extended to other states following revelations by the Nigeria Centre for Disease Control (NCDC) that Osun has overtaken Ogun state with nine new cases.

According to the latest figures released by NCDC, the number of confirmed cases of Covid-19 in Nigeria rose by 12 additional cases, bringing the total figures to 151, from 139 on Tuesday, the highest in one day so far.

Minister of health, Osagie Ehanire, had on Tuesday, said Federal Government health officials were chasing over 5,000 persons suspected to have had contacts with those already infected by the dreaded virus.

BusinessDay gathered that the Presidential Task Force on the Coronavirus pandemic,

headed by the Secretary to the Government of the Federation, Boss Mustapha, may call for the extension of the lockdown to other states not yet covered by the order.

The PTF Covid-19 team, which usually brief the nation daily, has the responsibilities to advise the government on needed actions to halt spread.

The PTF is the strategic decision and coordinating body for the National Response on Covid-19.

The body was responsible for the development of the National Response Strategy for Covid-19, which is constantly reviewed as dictated by developments.

Coronavirus cases in Nigeria have been traced to have been linked to travellers who returned from high risk countries of China, Europe and the United States of America, as well as Nigerians who hadcontactswithinfectedpersons In a bid to control further spread, President Muhammadu Buhari had on Sunday ordered www.businessday.ng

lockdown of Lagos, Abuja and Ogun, which where the high risk states.

The NCDC had on Wednesday afternoon confirmed the new cases in Osun, Edo and Ekiti states.

“Twelve new cases of #COVID19 have been reported in Nigeria; 9 in Osun, 2 in Edo and 1 in Ekiti State.

“As at 12:30pm 1st April there are 151 confirmed cases of #COVID19 reported in Nigeria. Nine have been discharged with two deaths.

“As at 12:30 m 1st April, there are 151 confirmed cases, 9 discharged, 2 deaths,” the tweets @ NCDCgov reads.

A breakdown of the cases in Nigeria shows that Lagos has continued to lead with 82 case , while FCT followed with 28.

Osun has now overtaken Ogun with 14 cases, Oyo 8, followed by Ogun with 4, Edo also 4, Kaduna, 3, Enugu-2, Bauchi-2, Ekiti-2, while Rivers and Benue have one each. https://www.facebook.com/businessdayng

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Oga-Coro, humbled humanity and a changing paradigm…. New Englishes in Nigeria

ik MUO

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radio OAP (99.3FM) the other day advised that we should address CORO with some respect because it was (and is still) holding all of us by the juggler. In effect, CORO is the BOSS right now, deciding what we do, how we do it, where we can go and even where we cannot go and that is across the globe that is why I have addressed it as Oga-Coro.

Bob Marley is my most favourite musician of all times to the extent that I have a life-size portrait of him in my country home and another, smaller one at my office. I saw and still see him as a sane “madman” a hard-core philosopher and a prophet largely ignored by the people.

I just remembered him as I was reminiscing about Coro and particularly, his song, Natural Mystic. Hear him “There’s a natural mystic blowing through the air... many more will have to suffer, many more will have to die... things are not the way they used to be… one and all got to face the reality…, can’t keep them ( natural mystic) down…don’t tell no lie!” What else was the prophet talking about in 1977 if not Coro? It is apparently natural, it is mysterious, it is blowing in the air, people are suffering and dying and still counting and we should not lie about it!

Everywhere is empty, including St Peters Square. Places we perceived as impenetrable have been infiltrated, including Buckingham Palace and Aso Rock. Even before declaring a formal lockdown, streets, event centres, business districts across the globe are empty.

Italy is dealing with death on a wholesale bases and is about surrendering. Spain and France are in dire stress and the US is running out of options. Here in Nigeria, Aso-Rock (Executive), National Assembly (Legislature) and our courts (the judiciary) are all “working from

home”; our imperial Governors have run for cover; they can no longer drive in their crazy convoys and no longer terrorise us with overzealous security operatives. Our arrogant Senators have gone underground and even Professors, our shining lights and purveyors of ideas and solutions, have been visited by merciless agent of death. Our egos have been punctured; our collective psyche is bruised and despair pervades the air.

The whole globe is engaged in this epic battle against an unknown and unseen enemy; patients are sprawling helplessly and hopelessly on the floors of Tier1 hospitals abroad; people who hitherto prided themselves about their human rights have all surrendered, as democratic governments issue and brutally enforce lockdowns, with Italy making it an offence to spread coro.

Governments that were hitherto so sure of everything are now unsure of all things and do not know whether to order, advise or request people to stay at home and lawyers are talking about force majeure, frustration, incapacitation of parties and similar terms. Crimes, crises and evils have been globalised and “Prayer for Nigeria in distress, “prayer against coro” and “God of mercy and compassion” have become the favourites among Catholic faithful’s. Even leaders that were not so religious are calling on God and the global economy is staggering like a drunk sailor. On Sunday 29/3/20, my family attended Mass. We arranged chairs in the sitting room, faced the African Independent Television and followed in a mass streamed from Port Harcourt and attended by 4 priests, 3 mass servers and lectors and a 5-man choir. It was a virtual mass with spiritual communion. That is the reality we face today.

Within three months of this ravenous scourge across the globe and 6 weeks in Nigeria, a new paradigm is emerging. The whole humanity has been humbled. Our prideful, boastful and sure-footed tendencies have faded away. Whoever thought that US will be short of medical consumables or that Trump could ‘stammer’ in front of cameras or contradict himself? We now realise that all is vanity and that we are all the same, ordinary human beings

and that our possessions, positions and connections CANNOT help us. Coro has “commonalised”, communalised and equalised us. As aptly captured in a recent viral message: “All of a sudden, wealth no longer counts; private jets are useless. We are confined to just 1 room in our mansions; the 20,000 capacity church auditoria are empty; there are no parties to attend and nowhere to lavish money. All of a sudden, the only thing that matters is just to breathe” and Coro-free status.

We have realised that we are in the same boat and that we either survive together or we perish together. As Pope Fancis declared in the Urbi ET Orbi ceremony of 27/3/20, “we are on the same boat, called to row together, each of us need comforting each other.

We cannot go on thinking of ourselves; together we can live. The storm has exposed our vulnerability and uncovers those false and superfluous certainties around which we have constructed our daily schedules: our projects, habits and priorities’ for us in Nigeria, we have been forced to the reality that home (our country and our families) is the best. Whoever knew that a time will come when our big men who have access to all the resources, private or public, genuine or tainted, will wish to go for check-up or undertake treatment abroad or birthday in Dubai and they CANNOT because they just CAN’T? We are all forced to stay in Nigeria and to stay with our families; even those who cannot stay in Nigeria for two weeks at a stretch and those who would rather stay at their “guest houses” than go home are now singing “home, sweet home”.

It is now clear to us that United we stand (even while maintaining physical distance. Some people are physically close but socially apart!). Without rejoicing at peoples misfortunes, we have also seen that some of the evils we do may well live with us. Those who failed build operational health management system, for which trillions have been budgeted over the years, have suddenly been forced to patronise these derelict health infrastructure. Check out the cartoon of a politician protesting as he was being wheeled into health centre, which is his ‘constituency project’ to his community. The fact that “an aid to

‘

Within three months of this ravenous scourge across the globe and 6 weeks in Nigeria, a new paradigm is emerging. The whole humanity has been humbled. Our prideful, boastful and sure-footed tendencies have faded away

the president” is being treated in Lagos, despite the sinful funding budgeted annually for Aso Rock Clinic says it all.

As the Private Sector Coalition against COVID19 said “the world is being dragged through a tunnel of despair, doom and uncertainty, with collective fear of the unknown putting civilisations and economies at risk….

It is time to take responsibility for one another and truly be our brothers/sisters keeper”. Sometimes ago, a group of US artistes declared that, “there comes a time, when the world must come together as one, there are people dying , and it’s time to lend a hand to life.. We’re all a part of God’s great big family”. This is the time, except that it is not just for Africa or Haiti. And just the other day, one funny character (@etetibass) who modified the song reminded us that we are a part of one huge quarantine but together we can survive. We have also been called by this unfortunate times to be creative and to exploit inherent opportunities because even during the Biafran War, people were making genuine money.

I wish to close with this statement attributed to Bill Gates that Coro has is “reminding us that we are all equal, regardless of our culture, religion, occupation, financial situation or how famous we are. It is reminding us that we are all connected and something that affects one person has an effect on another. It is reminding us that the false borders that we have put up have little value as this virus does not need a passport. It is reminding us, by oppressing us for a short time, of those in this world whose whole life is spent in oppression.”

This is the new paradigm; a paradigm for a new humbled humanity composed of common, ordinary people. I pray that we do not go back to our OLD WAYS as soon as Coro goes. Surely, it must go!

Meanwhile, there is only one known sure-banker against this rampaging and rapacious monster and it is free: STAY @ HOME!!!

Note: The rest of this article continues in the online edition of Business Day @ https://businessday.ng Dr Muo is of the Department of Business Administration, OOU, Ago-Iwoye

COVID-19 and accountability

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t is interesting (or is it intriguing) that many highly placed Nigerian are coming out openly and sincerely to confess romance with the deadly Coronavirus. This is commendable but, Nigeria being a country where sincerity is a road less travelled, I am curious about the “sincerity” of the confessions. I believe COVID-19 is not partisan in its choice of victims, but then, where are the confessions of the “non-highly” placed Nigerian? Are some not also testing positive? While not making light of the situation, I ask: is it that testing positive of the virus is becoming correlated with social status? Or is it that there would soon emerge an elite club of coronavirus positives?

Or is it that the funds coming in now from various individuals and organizations and some top politicians toward combating the disease would be “allocated” to the COVID-19 positives?

With just one or two deaths so far and dozens of confessions, it seems to me that the COVID-19 is attracting more attention than the deadlier book haram and its other criminal cousins that have claimed thousands of lives of ordinary Nigerians.

Well, no matter the allure, testing positive of the deadly virus is neither edifying nor glorious enough to be coveted. If it is prideful to test positive, that’s alright but not at the expense of the poor masses of this country. That is why the question of accountability over the funds being realised to

combat the disease is critical.

I read that the University College Hospital Ibadan wrote an open letter to “well-meaning groups and associations” soliciting assistance to upscale its isolation centre. If a Teaching Hospital that opened its doors to patients in 1957 (63 years ago) is orphaned in terms of finance and infrastructure, then how can a General Hospital in my town cope with the current situation? A university college hospital of the status of UCH should not be in want of manpower, tools, electricity supply and functional infrastructure after more than six decades of existence. This is not just unfortunate and laughable, but also pathetic. It is also evident that many State governments in Nigeria are not ready to deal with the pandemic. Except for one or two, I have not heard State Governors boastingly confessing the measures they have in place to curtail COVID -19 pandemic. They are still on the drawing board and perhaps waiting for the Federal Government for direction and resources.

These actions or inactions show that matters relating to the pandemic are currently being treated in silos. There is currently nothing substantial in the COVID-19 narratives that render unto the government a predisposition to pursuing strong policies beneficial to the masses. This won’t help to achieve the desired result. All this show the gross social irresponsibility we face as a country.

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If that isn’t the case, there ought now to be a serious commitment in terms of provision of required facilities and joint coordination of activities.

Well, beyond the provision of facilities and other materials, there will also be the need to provide evidence of achievement of “value for money” in the use of the resources provided to combat the virus. This is to ensure that COVID-19 does not unduly benefit the already rich and wealthy, many of whom are currently the main testimonials of the disease. Accountability is imperative given that fighting corruption is a major task of the present administration. I believe we all know that the adverse consequences of lack of accountability in Nigeria are real and fiercer than those posed by the combined unholy activities of Boko haram and the murderous herdsmen and kidnappers. So, let’s treat accountability in the case of COVID-19 with a positive mindset.

I know demanding accountability in Nigeria where patronage and corruption have been established and documented as endemic is a herculean task. We have waited too long and allowed corruption to run wild, thus, making accountability real has been a mirage. This is not because government functionaries and politicians do not know what accountability is but they refuse to know what it is. I wonder what is difficult acknowledging that accountability is simply the duty to provide an ac-

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Francis Iyoha count (by no means necessarily financial account) or reckoning of those actions for which one is held responsible! Now, the opportunity has come to act accountably by confessing accountability the same way that “being COVID-19 positive” is being confessed. One without the other would be a disservice to the nation. No tradeoff, no mutual exclusiveness.

The funds coming in would be quite enormous and Nigerians do not expect the government to exhibit any façade of accountability in the matter of COVID-19. There should be no opportunity for corruption and wealth redistribution leading to more wealth inequality. No. Let the funds be utilized judiciously and be accounted for expeditiously to the delight of Nigerians. I trust and believe we can put away our weakly and sickly greed for public funds.

Professor Iyoha is of the Department of Accounting, Covenant University. He wrote viafoiyoha@ican.org.ng

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The make-believe world of the Nigerian mind

Remi Adekoya

W

hen I was 14, I was firmly convinced I was Barcelona material. I had the talent of a young Maradona and if Barca’s scouts ever saw me play, they’d fall over themselves to sign me. I knew this because guys who’d seen me play in my Lagos secondary school had told me this. Well, one guy really. But still. I was in JSS2, he was a senior and after watching me play once, he said I was the Maradona of my set. After that, there was no convincing me otherwise. It was just a matter of time. Well, you can guess how that story ended. Not with me playing for Barcelona. But you’d be surprised how long I held on to the delusion I would. Because I wanted it to be true. That is why delusions are a powerful thing.

Some say corruption is Nigeria’s greatest problem. Low educationlevels, say others. Then there are those who insist the root problem is “the system,” however you want to understand what exactly “the system” means. These are all major issues.

But I don’t think they are actually the main problem. I think the primary problem of Nigeria is a cross-class

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multigenerational penchant for delusional thinking. A strong tendency to ignore facts, figures and reality in favour of fanciful assumptions we want to believe are true.

This has nothing to do with education. “One of the commonest manifestations of under-development is a tendency among the ruling elite to live in a world of make-believe and unrealistic expectations,” wrote Chinua Achebe in his 1983 book “The trouble with Nigeria.” Delusionary thinking is a virus that has long infected all levels of Nigerian society.

Let’s go back two weeks. Reports were flying in from all over the world of the havoc Covid-19 was wreaking on some of the richest best-developed nations on earth. Countries which have invested trillions of dollars into their healthcare systems over the years. Yet because the virus had not yet hit Nigeria, local Twitter was awash with more or less smug comments about how Covid-19 was exposing all these “so-called” developed nations.

Some suggested European countries battling the virus needed to learn from Nigeria how you handle such emergencies. For these voices, the fact Nigeria saw off Ebola in 2014 clearly proved the country can deal with any medical catastrophe. The popular tone was positively triumphalist. How to explain such attitudes in a country which budgets N2100 $5 per citizen for healthcare?

Nigeria’s 2020 health budget is N427 billion, equivalent to just over $1 billion. Over 70 percent of this amount - N336 billion – is earmarked for recurrent expenditure, medical staff salaries. Forty-six billion naira is earmarked for capital expenditure (medical infrastructure and equip-

ment) while just 44 billion naira is set aside for the Basic Healthcare Fund (actual service delivery) which comes out to 220 naira per citizen for the year.

South Africa - population 56 million - has a healthcare budget 12 times the size of Nigeria’s, at $12 billion. According to the most recent World Bank figures, fellow African nations like Angola, Egypt, Gabon, Morocco and Tunisia all spend more per capita on healthcare than Nigeria. Just for one Western example, Britain’s £140 billion healthcare budget is roughly six times Nigeria’s entire national budget.

Yet despite these stark realities and the fact many Nigerians have personally experienced the country’s shoddy healthcare system, when Covid-19 eventually hit, causing confusion, Nigerian Twitter went ablaze with “but how is this kind of mess possible” posts. People acted surprised. That surprise is hard evidence of delusionary thinking. On what evidential grounds could anyone have possibly expected otherwise?

The Ebola case was a lucky break: a combination of admittedly excellent reactions from the Lagos state government and heroics performed by individual Nigerian doctors and nurses. But it was a one-off. Yet Nigerians chose to believe it was somehow proof of a systemic resilience.

This is not about being “negative”. It is about acknowledging reality. Nigeria is a society which, while regularly complaining it is badly run, deep down refuses to accept the hard facts about just how far behind the rest of the world it has fallen in just about every aspect of human development. Because acknowledging that would offend the sizeable Nigerian

‘ Nigeria is a

society which, while regularly complaining it is badly run, deep down refuses to accept the hard facts about just how far behind the rest of the world it has fallen in just about every aspect of human development

ego. Meanwhile, average life expectancy in Nigeria is 54 years, lower than the likes of Zimbabwe (61), Congo (60), South Sudan (57) and Somalia (57). Average life expectancy in sub-Saharan Africa is 61.

Only three countries in the world have a lower life expectancy rate than Nigeria: Chad (54), Lesotho (53) and Central African Republic (52). This statistic alone exposes the country for what it is. Yet you will still hear some Nigerians high and low claiming national greatness. But what, if not delusional, is a country of 200 million people with a budget of $30 billion that thinks of itself as “rich”?

Bangladesh has double Nigeria’s budget - $62 billion. Bangladeshis wouldn’t dream of calling their country rich. But try convincing Nigerians otherwise.

I understand it can be tempting to delude yourself you are something you are not if that makes you feel better about yourself. But there are certain realities you cannot run away from forever. You cannot build a successful state on fantasies. Maybe, just maybe, this experience will be the reality call that jolts Nigerians high and low out of the make-believe world Chinua Achebe wrote about four decades ago. It is time to face up to the reality of where the country is today. Behind most of the rest of the world in just about everything.

Acknowledging that reality is a necessary first step towards the groundedness, clarity and sense of purpose that is needed to change it.

Dr Adekoya is a journalist and political scientist. He has written for the UK Guardian, Foreign Policy, Foreign Affairs, Washington Post and Politico among others. He tweets @ RemiAdekoya1

Nigeria cannot handle a shutdown?

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ast week, I argued against lockdown as the only means of stemming the spread of the novel Coronavirus steadily spreading across the country. My reason is simply that it is virtually impossible to achieve a lockdown in Nigeria because the majority of the citizens are living in extreme poverty, live by the day and cannot afford or survive a lockdown. What is more, the urban poor mostly live in overcrowded squalid shanties with no access to electricity, running water or modern toilet facilities. Hundreds of thousands of others can’t even afford the luxury of shanties and live on the streets. Therefore, concepts like self-isolation, social distancing and quarantining make very little sense in such context.

I criticised the mainly elite and middle class Nigerians who propose such options as unimaginative and even narcissistic for wanting to sacrifice the poor (who did not play any role in the importation or spread of the disease in the first place) to ensure their own survival. The touted solution of locking down the country is tantamount to giving the poor two unpalatable options: death by Covid-19 or death by hunger. I pointed out that rich countries currently ordering lockdowns have a very high standard of living and on top of that provide palliatives and pay out to their citizens to survive the lockdown. For example, the United States alone as at last week had a record 3.3 million people filing for unemployment claims and the Congress passed a $2 trillion economic relief package.

But Nigeria is broke. With oil now selling below $20 (below the production cost in Nigeria) and Nigeria facing another recession,

it is clear the government cannot provide the needed palliatives to ease the sufferings of the poor during a lockdown. Nigeria is also grossly ill-equipped and ill prepared to handle a pandemic of this nature because of its decrepit and collapsed health infrastructure. If the health infrastructure of the United Kingdom, with a health budget of £140 billion, is overstretched and buckling under the strain of Covid-19, one can only imagine what will happen in Nigeria with three times UK’s population but with a total national budget of only £25 billion. We have neither the capacity for mass testing nor the capacity to care for those suffering for those with the disease. Besides, with little or no supply of public electricity, Nigeria cannot successfully compel majority of its citizens to remain indoors under the sweltering heat.

I therefore gave a hint of the strategy Nigeria can adopt to tackle the virus by pointing to its overwhelming young population. I avoided going into details because I believe this is a medical issue and as a non-specialist, I am reluctant to dabble into such matters. But my readers have challenged me to lay out an alternative plan for tackling the dreaded pathogen without lockdown, social distancing and all other borrowed Euro-American concepts.

I believe the choice must not either death by hunger or death by Covid-19. We can evolve a wholly Nigerian solution to this pathogen based on our unique circumstances and, above all demographic composition, which will allow the poor to earn their living and skilfully manage the pathogen until it goes away.

In any case, as we would soon discover, poor Nigerians will not remain indoors and watch their children die of hunger. They will chose

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to rather contract the virus than die of hunger.

According to data from the World Health Organisation (WHO) and other countries battling the epidemic, the most vulnerable population are the old (70 years and above) and those with pre-existing medical conditions. Still, according to WHO, more than 80 percent of patients have mild symptoms and will recover withhold any medical intervention, 14 percent will have severe symptoms including pneumonia and shortness of breath, 5 percent will have critical symptoms including respiratory failure, and 2 percent of cases are fatal, with the risk of death increasing with age.

It is therefore clear that Covid-19 disproportionately affects the old. Luckily, Nigeria has an overwhelmingly young population with the median age being 17.9 years. Compared to the median age in Italy of 45.4 years, of China – 37 years, of America - 38.2 years and of Spain – 44.9, this presents Nigeria with a clear advantage. Families can be urged to isolate and care for their old and infirm while the government and healthcare system concentrate on the few that might need critical medical attention. The government should roll out a comprehensive sensitisation campaign about how to prevent the infection of the old and infirm and also, about possible medications to take in cases one experiences mild symptoms. Since the results of a couple of scientific research show promise in the use of hydroxychloroquine sulphate and Azithromycin and the approval of the drugs as emergency treatments to hospitalised patients by the American Food and Drug Administration (FDA), and the availability of the drugs over the counter in Nigeria, Nigerians will surely

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CHRISTOPHER AKOR

self-medicate. It is left for the government to decide whether it wants to sensitize people on the effective and harmless use of medications where necessary or whether it will continue towing the Euro-American line even when it is obvious it cannot control public access to these drugs.

If over 80 percent of those who contract the virus will have only mild symptoms and would not need hospitalisation, and if only 3.1 percent of Nigerians are 65 years and above, commonsense will dictate that government should concentrate its efforts at protecting the old and infirm from getting infected than shutting down a country of overwhelmingly poor and young people, who constitute 97 percent of the population, in the vain hope of arresting the spread of the virus when the horse has already bolted. The best time to shut the door was in January when there wasn’t any reported case in Nigeria or even in February when the Italian was diagnosed with the pathogen.

But, of course, the government continued to indulge the peripatetic tendencies of the elite and middle class, who have now imported the virus into the country. Shutting down the country now does not and will not make arrest the spread of the virus. It will only lead to consequences the government does not expect and cannot handle.

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BUSINESS DAY

Thursday 02 April 2020

Editorial Frank Aigbogun

Nigerian political elite and Dubai property market

editor Patrick Atuanya

Authorities must scrutinise high-end property transactions involving Nigerian elites

Publisher/Editor-in-chief

DEPUTY EDITOR John Osadolor, Abuja NEWS EDITOR Chuks Oluigbo MANAGING DIRECTOR Dr. Ogho Okiti EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, STRATEGY, INNOVATION & PARTNERSHIPS Oghenevwoke Ighure ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai COPY SALES MANAGER Florence Kadiri DIGITAL SALES MANAGER Linda Ochugbua GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu HEAD, HUMAN RESOURCES Adeola Obisesan

T

he Nigerian political elite are a special breed who, after contesting and winning elections, become affluent, influential and “honourable” members of the society. Armed with these sobriquets, they turn round as demigods among the masses, sneering and exhibiting unbridled arrogance and impunity.

In Nigeria, politics and political office is the easiest and surest highway to instant wealth. And the politicians generally make a mince-meat of opportunities deposited on their laps by poor folks.

From an irritatingly flamboyant lifestyle and nauseating arrogance fuelled by unexplained and inexplicable wealth, this class of Nigerians quickly graduate to crass materialism as shown in their exotic cars and luxury villas in choice locations around the world.

Dubai property market easily lends itself these ego-trippers. Over the last decade, Dubai has become “an oasis for Nigeria’s corrupt political elites.” The country remains one of the most spectacular destinations in the world and this is reflected in its iconic architecture, magnificent skylines, exclusive shopping and beautiful coastline.

This is where Nigerian PEPs buy and own homes. By the last

check, 800 luxury properties in Dubai are linked to Nigerian politicians who have committed N146 billion to acquire those assets in a foreign land.

It is sad to note that until 2016, when the Center for Advanced Defense Studies (now known as C4ADS) acquired the data of a private database of Dubai real estate information (dubbed the ‘Sandcastles’ data), there had been a dearth of specific information about Nigerian PEPs’ properties in Dubai.

It is mind-boggling to note that just a handful of these PEPs are in the Sandcastles data and they fall into eight broad categories. A breakdown of the 800 properties linked to them shows that suspected PEP proxy has 226; known Nigerian law enforcement agency suspects, 216; PEPlinked businessperson, 91; security sector leader, 71, and governors, 69 properties.

Others are legislators who have 45 properties linked to them; Department/Agency head, 25; minister, 24; Nigerian National Petroleum Corporation official, 19; Presidency staff member has 13 while a judge has just 1. These properties are located in exclusive and expensive areas in Dubai including Palm Jumeirah Island, Dubai Marina, Jumeirah Golf Estate, among others. These areas are the equivalents of Banana Island in Lagos and Asokoro in Abuja.

Experts’ argument, which we share, is that if these 800 properties were built in Nigeria, besides the multiple jobs they would have created, the properties would have provided homes for close to 5000 persons, given an average of six persons per family. That would also have reduced the country’s everwidening housing demand-supply gap appreciably.

It is pertinent for us to point out that the N146 billion ‘invested’ in the Dubai economy is as substantial as it is misguided and to make a sense of that huge sum is to place it side-byside with allocations to critical sectors in Nigeria’s 2020 budget.

N146 billion is well over 50 percent of N262 billion allocated to the ministry of Works and Housing which got the highest sectoral allocation. This means that the money that have been illegally taken away and ‘invested’ in property in Dubai is more than the budget for housing separately.

It is also estimated that this money is equal to two-thirds of Nigeria Army’s annual budget and over three times the annual budget of the country’s Independent National Electoral Commission (INEC).

Furthermore, Aliko Dangote, President/CEO, Dangote Industries, is committing N73 billion to the reconstruction of the 35-kilometre

Apapa-Oshodi Expressway in Lagos, meaning that the N146 billion politicians have ‘invested’ in property in foreign land can reconstruct 70 kilometres of roads in Nigeria.

But N146 billion is just part of the many outflows to overseas economies. A couple of reasons have made the outflow to Dubai property market possible. Besides the land reform in Dubai which allowed foreigners free-hold in property ownership, the Nigerian elite face few obstacles transferring large sums of money to Dubai.

Secondly, we learnt painfully that banks or other money transfer agents in both Nigeria and the UAE do not appear to be reporting large or otherwise suspicious transactions by PEPs to national authorities which is why the PEPs and their associates find Dubai a welcoming destination for unexplained wealth.

In unequivocal terms, we condemn this unwholesome trade/investment facilitated with our commonwealth. We call for continued monitoring by Nigerian and Emirati authorities.

The authorities, along with national and international actors, should step up their scrutiny on high-end property transactions involving Nigerian elites to ensure that these purchases are not being made with pilfered public funds.

EDITORIAL ADVISORY BOARD Imo Itsueli Mohammed Hayatudeen Afolabi Oladele Vincent Maduka Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Mezuo Nwuneli Charles Anudu Tunji Adegbesan Eyo Ekpo Wiebe Boer Paul Arinze Boye Olusanya Ayo Gbeleyi Haruna Jalo-Waziri Clement Isong

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Opportunities in corona for Nigeria The Public Sphere

CHIDO NWAKANMA

T

he coronavirus bears a huge SWOT signboard. While many are focused on the Strengths and Weaknesses in the management of the situation by federal and state governments, as well as the Threats to citizens, others see Opportunities writ large. Search for opportunities is the essence of business so it is not surprising that business executives in Nigeria and across the world are fixated on the O in the SWOT of Coronavirus.

As we enter Day 4 of the mandatory lockdown of Lagos, Ogun and FCT, virus outbreak response is one of the headline-grabbers. On the first day of Lockdown Lagos, Ogun, FCT, Nigerians, individual and corporate, have raised N30billion approximately for various coronavirus containment efforts. It is inspirational. It is amazing.

GTBank kicked off the corporate good acts by announcing and effecting three days later its donation of a 100-bed hospital tent at the Onikan Stadium. The federal government announced N15billion, with N10billion to the Lagos State Government and N5bil-

lion to the Nigerian Centre for Disease Control. Governor Jide Sanwoolu has earned deserved plaudits for the public face of his handling of the matter with Lagos as the epicentre. Similarly, Dr Chikwe Ihekweazu at the NCDC has been stellar.

Other corporates followed in donating to a fund orchestrated by the Federal Government. Donors have been generous and large-hearted. The big boys mainly from banking and oil and gas dropped a billion each. They include Femi Otedola, Abdulsamad Rabiu, Aliko Dangote, Herbert Wigwe, Segun Agbaje. Other huge donors include Mr Jim Ovia (1billion), Dr Paul Enenche (N2billion worth of items).

Access Bank, GTBank, Zenith Bank all gave N1 billion each. The NNPC led a consortium of oil industry players to donate N11 billion naira. Former vice president Atiku Abubakar gave N50 million, musician Tuface Idibia gave N10 million. Former governor of Lagos Bola Tinubu gave N200 million.

Abia State gubernatorial hopeful Dr Alex Otti gave a bouquet of gifts, including a duplex as isolation hospital, in Umuahia and Aba. He has not put a figure to the bequest because he keeps responding to the identified needs following his initial donation. Former president Olusegun Obasanjo donated a 32-room facility in Abeokuta. That can fetch at least 50 hospital beds with some executive rooms. The donations continue to come in.

It is the Nigerian Spirit in activation.

The Nigerian Spirit activates in dire situations. It comes along to do the seeming impossible. It takes on the inertia and negativity that regularly char-

acterises our land and turns it around into action and positives. Remember the World Junior Soccer Championship Nigeria 99? We performed wonders that stunned FIFA in getting stadia ready in weeks!

The scale and speed of the donations speak to both opportunity and possibilities. It is disconcerting that donors would drop cash. Permit me to suggest from this side of the aisle that everyone should adopt the GTB model. N1billion each can build a decent hospital. Build it and donate it to Nigeria.

Otherwise, the Federal Government should deploy N30billion into chunks of N5billion to build one standard healthcare facility with comprehensive laboratory facilities in each of the six geopolitical zones. Let us assign specific tasks to the funds before auditors tell us in two years that the money went into “sundries”.

Boss Mustapha, Secretary to the Government of the Federation, chairs the Presidential Task Force on Covid’19.

One of the five core tasks of the PTFCovid19 is to “lay a foundation for scientific and medical research to address all emerging infectious diseases”.

That section of its objectives leapt at me as I read it. Let us look elsewhere for comparison “The federal government is open for coronavirus business, and the scramble to get some of it is on”, The New York Times reports about the situation in the USA following the passage of a $2 trillion stimulus fund.

The scramble is by companies offering to bring to the table the results of their researches into coronavirus and other infectious diseases or those with

‘

The scale and speed of the donations speak to both opportunity and possibilities. It is disconcerting that donors would drop cash. Permit me to suggest from this side of the aisle that everyone should adopt the GTB model

o doubt, the virus called Corona is in power around the world, killing innocent lives and rendering big nations helpless. COVID 19 is an unexpected game-changer, and its memory will linger on just like the Spanish flu that ravaged the world in 1918 with scores of deaths and economic effects.

Nigeria go survive. The world will survive the Coronavirus. Africa go survive the viruses in power, ravaging her people whether we like it or not. Veno Marioghae, a Nigerian singer, released a song, Nigeria go survive in 1984 when there was a clamour for social amenities. In the song, Veno said we go survive even if they drink or steal our oil. She reminded us of our endowments- the cocoa in the west, rubber in Benue, palm wine in the east and groundnut in the north of Nigeria. Her song was a ray of hope for the deprived Nigerians when it was released with encouragement for Nigerians (Andrew don’t check out) not to check out of the country. Three decades after her song, there are still deficiencies in social amenities and failure of institutions in Africa to protect her people from her leaders who have been enriching their pockets and families to the detriments of the majority living in poverty.

The pandemic called COVID-19 is a virus that will expose the deficiency in Africa’s health care system and social amenities. Coronavirus is levelling the ground between the rich and the poor, the majority and the influential minority in power. The Andrews cannot check out for medical tourisms to enjoy the facilities of the developed world. Spain, Italy, UK and USA where the leaders would have flown to with the taxpayers’ money are struggling to cope even with their advanced medical capacity.

Now that we are all locked down in Africa, and the world cannot help with aids and grants, the next song is which way Africa and Nigeria.

Which way Nigeria? Sonny Okosun’s song released in the same 1984, highlighting the

social injustice. In the song, Okosun said we made mistakes during the oil boom, some people have many things while many have nothing, we gained independence many years, and we are yet to start. It appeared we are not learning from history and the ravaging virus is not this one that affects everyone equally but the one we developed and encouraged with our decaying values. Even with the Coronavirus, it is still a case of George Orwell’s animal family.

All animals are equal, but some are more equal than the other.

Take Nigeria, for example. The 131 people tested positive, 8 discharged and 2 dead as at the time of writing is a good figure for a population of 200million people. The fear is the state and capacity of Nigeria’s healthcare system to cope with the increasing spread of the virus imported into the country through inevitable travelers and indiscipline on the part of the people who refuses to be tested at the point on entry. The healthcare system is grossly inadequate for half of the population, and its quality cannot be attested for by those who are responsible for building it. If not for the global presence of Mr Corona, the Chief of staff and the governors tested positive so far would have been airlifted abroad for treatment. Even as it is, they would have a preference above the people they are to serve. The available testing kits and spaces in the hospitals will be for the very important personalities as we call them.

Now that the foreign medicals which are the first option and the desired one is not available, the available is now desirable. It is a battle of influence for the available COVID19 facility.

Africa and Nigeria have survived lots of self and leadership inflicted havocs like civil wars, corruption, poverty and killings before the COVID-19. I am sure we will survive this notwithstanding how it turns out. Are we going to learn or change? Will the songs Nigeria go survive and which way Nigeria still be relevant in the next three decades?

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From the Abacha loots to the huge dollars found with Omar al-Bashir, Sudan’s ousted president, to the uncovered institutional corruption and leaders’ greed, we have enough resources to build the best healthcare system for our people. We are endowed with enough resources to support our population in times of need like this. The social media clamour of some day-dreaming people for the government to credit the bank accounts of the 40million Nigerians with bank identification numbers (BVN) with money to cushion the effects of the lockdown is doable except for the reaping impacts of our ‘viruses in power’ (VIP).

We have been ravaged with the effects of the viruses in power in the past, in the present or in the future. Our money is with the few we have elected or selected and created a system to protect. Now that no one can take a medical vacation, they will grab the few available facilities as if the lives of the rulers are superior to the lives of the electorates.

At this trying time, we cannot but thank the private sectors and the corporate world that is taking the lead to save lives in Nigeria.

Whether they are allies to the VIP or benefitted from government policies is not relevant.

What matters is their availability to fund and support the course to save humanity with their legitimately earned resources. The names on the list of the committees of the Private Sector Coalition against COVID19 are heroes and the very important personalities of this time.

All the companies and their shareholders that are contributing to save lives are essential friends of Nigeria. Imagine these private sector personalities have the fund they have invested in providing employments stalked in foreign accounts like some of our VIPs, the benefits of their support at this crucial time of need would have been lost forever.

We cannot deny Lagos as the Centre of excellence given the response from Babajide Sanwo-Olu and his team. Lagos is now the

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a multitude of new products that tackle the conditions that corona virus has brought on the world from various angles. The newspaper adds, “The boomlet has left the federal agencies responsible for regulating cleaning supplies, medical devices and medicines working overtime on requests to certify products for use in coronavirus response — and to clamp down on fraud.”

In other words, coronavirus would lead to new products and services from American industry. There is a stimulus fund on the back of which their firms are willing to do new things or do the old ones better. Notice that they are also battling fraud, such as the one whereby Nigeria claims it would continue spending on school feeding on schools shut because of coronavirus pandemic.

The tenth wonder of the world is from Nigeria, truly.

Very few Nigerian companies are coming to the table with innovative or regular products and services. Government is not saying anything to those who have spoken about what they can do. Innoson Motors confirmed that it can retool to produce ventilators. Mum. Prof Maurice Iwu says he has capacity to produce a treatment. Mum. Under that section of its remit, Boss Mustapha’s PTFCovid19 can empanel a team to see what we can make out of this crisis.

Experts have advised that we should never miss the opportunities in crisis.

Nwakanma is a Visiting Member of the BusinessDay Editorial Board and serves on the Adjunct Faculty at the School of Media and Communication, Pan Atlantic University, Lagos. Email chidonwakanma@ gmail.com.

COVID 19: Africa go survive the ‘viruses in power’

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13

Positive Growth with Babs Babs OlugbemI new medical tourist centre ahead of the seat of money and power- the almighty Abuja. Even before Abuja could gather her thought, SanwoOlu’s team knows the way to go. We can claim Abuja stole Lagos’ curfew agenda and stepped Lagos down for Abuja to make the announcement. Afterall the big brother must be relevant at this time. And the President must do his most important duty- to show Nigerians he’s alive and healthy to read speeches prepared by people who needed the power than him.

With Nigeria’s five hospital beds per 10,000 population and less than 25000 hospitals according to the ministry of health’s health facility census a decade ago, there is need for the lessons of the COVID19 not to be ignored.

No doubt we need strong institutions. We cannot rely on the current political structure and most of the personalities in power who are entrenched with the use of religion and ethnic sentiments to remain relevant for their benefits alone. We need people like the private sector leaders with different agendas and mindset aside from getting rich to be the people power to survive any coming virus after COVID19 and to tame the virus of hunger, unemployment, poverty and all other poor indexes in Africa.

Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Babs Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, Positive Growth Africa. He can be reached on babs@babsolugbemi.org or 08025489396.

@Businessdayng

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Thursday 02 April 2020

BUSINESS DAY

cityfile Group donates PPE to contain Coronavirus in Abuja JAMES KWEN, Abuja

F

axx Stores and Trading Nigeria Limited, an indigenous company has donated assorted Personal Protective Equipment (PPE) to health workers in the Federal Capital Territory (FCT) to assist in the fight against the spread of the Coronavirus.

The quipment donated include 200 (400 units) of face masks, 52 units of full personal protective suits, and 150 hand sanitisers.

Handing over the items to the FCT administration, the CEO of the company, Francis Abu, said the donation was in appreciation of the government’s efforts in curbing the coronavirus pandemic since its outbreak in Nigeria.

Abu, who commended the FCT administration for the treatment of the cases identified in the Abuja, appreciated the emergency response team for making available additional bed spaces for asymptomatic patients of the virus.

“In times of unforeseen and unexpected crisis of this nature and magnitude, it is imperative that we come together as a community to assist government and together, we can play an important role in addressing this emergency and helping those affected by it.

“In light of this, and in a move to help curtail further spread of this virus and alleviate the shortage of medical supplies in the country, Faxx Stores wish to donate these items to the administration for onward distribution to health workers on the frontline working day to day to combat the virus,” he said.

Receiving the items, the FCT minister of state, Ramatu TijjaniAliyu said the donation was in line with the administration’s vision of take responsibility and be one’s brother’s keeper.

Egbeada Market stalls under lock and key.

Lagos releases N1.8bn to pay pension arrears JOSHUA BASSEY

L

agos State government has taken a further step to ensure that the aged and retirees do not suffer undue hardship during the restriction order, as it ensured seamless payment of N1.8bn bond arrears to 418 pensioners on Friday, 27th March 2020.

The state commissioner for

Covid-19: Yoruba group interfacing with herbal specialists for cure REMI FEYISIPO, Ibadan

O

odua Redemption Alliance (ORA), a Yoruba socio-cultural group says it is interfacing with local herbalists towards finding a cure for COVID-19.

The group has also called on the governments of the Yoruba states- Lagos, Ogun, Oyo, Osun, Ondo, Ekiti and Kwara and prominent Yoruba indigenes, to support the cause.

Speaking in Ibadan, the president of the group, Victor Taiwo said as part of its determination to help in finding a cure for the virus, the group a team was interfacing with local herbalists and that the management of the University of Ibadan was ready to assist with its facilities.

“The Yoruba race is blessed

with local herbs which are good enough to cure incurable diseases given the right atmosphere and inspiration.

According to him, the group has also sent out a team of researchers to explore our local herbalists. “After taking the samples of their drug agents, we consulted with a professor who is one of the leading pharmacologists in the country serving in the University of Ibadan who encouraged us to make every effort toward fighting the global menace.

“Today, we are in motion.

And so, the next line action is to call on our state governments in Yorubaland as well as the well-todo among us to rise to the occasion by supporting the required funding of this exercise. As we speculate, this endeavour might succeed in saving the world. www.businessday.ng

Establishments, Training and Pensions, Ajibola Ponnle said that the gesture was one of the many by the government to ensure that elderly citizens are not affected by the effects of the COVID-19 pandemic.

Ponnle said that the usual bond presentation ceremony did not hold in compliance with the directive against gathering of more than 25 persons in any location, saying, however, that

the Lagos State Pension Commission (LASPEC) transferred the bond certificates of the 418 pensioners to their respective Pension Fund Administrators (PFAs) for the pay-out of accrued rights.

While giving notice that the verification exercise for the pensioners under the Defined Benefit Scheme has been postponed, the commissioner hinted that the Civil Service Pensions

Office was exploring alternative verification methods to be announced in due course.

She assured that LASPEC offices remain available virtually and advised pensioners with any inquiries to contact the official via a telephone.

The commissioner encouraged pensioners in the state to remain indoors, stay safe and observe the widely publicised social distancing methods.

Kaduna revokes license of private school over rape of 9-yr pupil

K

aduna State government says it has withdrawn the license of Liberation College Tirkania, Kaduna, over alleged rape of a nine-year pupil by the proprietor, one Samuel Ejikeme.

The state commissioner for education, Shehu Makarfi said on Tuesday that the school was closed down on the directive of Governor Nasir El-Rufai.

According to Makarfi, the state commissioner for human services and social development, Hafsat Baba, who reported the incident, said Ejikeme confessed to raping the nine-year girl on tape.

“This compelled the ministry of education to act immediately by withdrawing the license and

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shutting down the school.

He said further that the withdrawal of the license was in line with the power vested on the Kaduna State Quality Assurance Authority Board, in Part IV, section 17(1) of the law establishing the authority.

“The Kaduna state government is, therefore, calling on all parents and guardians to withdraw their children or wards from the school,” he said.

The commissioner said that the state government would continue its investigation to ascertain the veracity of the allegation while the suspect remains in detention.

He said that Governor ElRufa’i had also directed the state Urban Planning Development Agency (KASUPDA) to look into @Businessdayng

the school’s development permit and take further action within two weeks.

Hafsat Baba, who reported the incident on her twitter handle @HafsatMohBaba, expressed sadness over the incident.

She lamented that school administrators that were supposed to be pillars of support and protection to children were turning to sexual predators.

“Please parents should speak more to their daughters and sons to ease exposure of these beasts in human skin,” she said.

El-Rufa’I had on his twitter handle: @el-rufai, directed the Kaduna Quality Assurance Authority to immediately withdraw the school’s license and close down the facility.

Thursday 02 April 2020

BUSINESS DAY

Investor

15

In association with

Helping you to build wealth & make wise decisions Market capitalisation

NSE All Share Index

NSE Premium Index

The NSE-Main Board

NSE ASeM Index

NSE 30 Index

NSE Banking Index

NSE Insurance Index NSE Consumer Goods Index NSE Oil/Gas Index

946.98 931.17

242.49

114.37

355.66

216.29

1,592.21

1,046.50

847.72

247.49

118.09

327.02

211.50

1,550.49

1,041.07

840.12

2.06

3.25

Week open (20-3–20)

22,198.43

N11.568 trillion

1,853.18

911.00

734.99

Week close (27-3–20)

21,861.78

N11.393 trillion

1,847.61

886.49

734.99

Percentage change (WoW) Percentage change (YTD)

-1.52 -18.55

-0.30 -12.69

-2.69 -23.03

0.00 0.00

-1.67 -20.94

-30.64

-6.14

-8.05 -44.84

NSE Lotus II

-2.21

-2.62

-19.44

-15.49

NSE Ind. Goods Index

-0.52 -3.21

NSE Pension Index

-0.90 -3.21

Coronavirus alters outlook of Nigerian equity market …analysts see opportunity in healthcare stocks Iheanyi Nwachukwu

I

f the spread of Coronavirus (Covid-19) is not curtailed as soon as possible, the Nigerian equities market will continue to sink and the market will experience further decline.

As Coronavirus continues to rear its ugly head in Nigeria, the nation’s equities market is one of the worst hit as dealers now trade remotely in an already pressured market.

Following the order of President Muhammadu Buhari on Sunday March 29, cessation of all movements in Lagos, Ogun and the FCT commenced from 11pm on Monday March 30 for an initial period of 14 days. The lockdown is part of the government efforts to check the spread of Coronavirus in Nigeria.

As at last weekend (March 27), the cumulative value of Nigeria’s listed stocks was N11.393trillion, which implies that investors have lost N1.6trillion year-to-date (Ytd) when compared to N13.019trillion they were valued as at January 3, and a negative return of -18.55percent.

Analysts expect the record bearish performance to continue in the coming week as Nigeria’s economic outlook remains uncertain.

Crude oil which is the major source of Nigeria’s foreign exchange (FX) earnings now trades at a record low. As the beginning of this week,

Brent crude traded at $23.30 per barrel signaling a worsening of prospects for crude in a world ravaged by the deadly Coronavirus outbreak. Naira was recently ‘adjusted’ to N380/$.

“Looking ahead, we still see sizeable legroom for further downslide in risk assets as investors continue to run towards safety in the face of the fast-spreading

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coronavirus pandemic and the rout across global markets”, according to Lagos-based research analysts at Cordros Capital.

“The market saw some bargain hunting as we ravel with the Virus.

If the menace continues into the year, the market will be suppressed further. If it is curtailed in the shortest time, the market will still remain subdued on the back of reduced

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confidence that has plague the economy even before the outbreak of COVID-19”, FSDH research analysts said.

“The outbreak of COVID-19 has severely altered the outlook of the Nigerian equity market, reversing the gains recorded in the wake of the year. Its impact has sent the NSE ASI to a record low level”, FSDH Research analysts said in their macroeconomic

@Businessdayng

review of first-quarter of 2020.

“Despite the decline in participation in the market generally, investment inflow was largely dominated by domestic investors.

On the other hand, outflow was dominated by foreign investors given the weak global confidence across equities markets due to the Coronavirus pandemic”, the analysts noted.

The Nigerian equity market continued to shed foreign and local participation as total transactions dropped by 37percent to settle at N148.5 billion in February 2020.

Domestic investors displayed apathy as foreign participation expanded to 49.04percent up from 29.86percent in January while domestic participation stood at 51.96percent down from 70.14percent in January.

“We expect to see continued interest in Healthcare stocks, as fiscal and monetary actions in Nigeria are tilted towards improving the state of the existing healthcare system.

Also, we expect buying interests in stocks with strong fundamentals, as the current relatively lower prices provide attractive entry points for investors,” said United Capital Research analysts.

“We anticipate a positive trading pattern due to the attractiveness of most counters at current price levels, though the continued spread of the Coronavirus as well as the Continues on Page 16

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Thursday 02 April 2020

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

Investor’s Square

United Capital Investment Views

Equity Market: Healthcare stocks steal the spotlight!

I

n the previous week, the broad performance of the equities market continued on a downward spiral, as investors fled positions in the wake of weaker oil prices and the COVID-19 pandemic.

As a result, the NSE All Share Index dipped -1.5percent weekon-week (w/w), with year-todate (YtD) loss worsening to -18.6percent. Also, investors lost value worth N174.8billion, as market capitalization closed lower at N11.4trillion. Notably, the size of the sell-offs were smaller than the preceding week, evident by the drop in average value and volumes traded by -54.2percent and -48.3percent to N3billion and 290.2million respectively.

Across the sectoral indices under our coverage, three out of five closed in the red territory.

The best performer for the week was the Insurance (+3.3percent) sector, buoyed by strong gains in WAPIC (+23.8percent) and NEM (+18.9percent). The Banking (+2.1percent) sector followed suit, propelled by

ACCESS (+9.4percent), UBA (+7percent) and ZENITH (+6.3percent).

O n t h e l o s e r s’ s i d e , the Consumer Goods (-8.1percent) sector recorded the most losses, as prices of NB (-15percent), NESTLE (-10percent) and DANSUGAR (-10percent) declined. The Oil & Gas (-2.2percent) sector also fell, owing to TOTAL (-10percent), OANDO (-7.2percent) and CONOIL (-9.9percent). Finally, the Industrial Goods (-0.5percent) sector recorded the least losses amid price decline in WAPCO (-7.9percent).

Notably, following the

announcement of policy measures by the CBN to mitigate the economic impact of the COVID-19 outbreak, which included a N50billion credit support and a N100.0bn intervention fund to healthcare sector players, we saw buying interests in domestic healthcare stocks. This included: FIDSON (+10.9percent), GLAXOSMITH (+2.7percent), MAYBAKER (+8.9percent), MORISON (+9.1percent), NEIMETH (+20percent) and UNIONDAC (+18.2percent).

Elsewhere, in terms of corporate actions, SEPLAT released its 2019 audited financial results, which showed Revenue dipped 6.2percent to N214.2billion, while PAT from continuing operations rose 80.5percent to N81billion. The company also declared a final year dividend of $0.05/share.

A l s o, b a n k i ng na m e s – FIDELITY and STERLING – recorded a 14percent and 1percent increase in Gross Earnings to N215.5billion and N150.2billion respectively.

PAT also grew by 24percent

and 15percent to N28.4billion and N10.6billion respectively, with the companies declaring dividends of N0.2/share and N0.03/share respectively.

Finally, investor sentiment was upbeat with a market breadth of 1.2x, as 32 stocks gained w/w, while 26 stocks lost value.

This week, we expect to see continued interest in Healthcare stocks, as fiscal and monetary actions in Nigeria are tilted towards improving the state of the existing healthcare system. Also, we expect buying interests in stocks with strong fundamentals, as the current relatively lower prices provide

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attractive entry points for investors.

Money Market: A liquid week Financial system liquidity stayed liquid for the most part of the prior week as naira inflows outweighed outflows. Notably, inflows were in the form of retail FX refunds to banks, OMO maturities (N186.3billion), FAAC credit to states and local governments (N367.5billion) as well as bond coupon payment (N18.1billion). Meanwhile, outflows were in the form of bond sales (N50billion) as well as wholesale and retail FX debits.

Despite the net-inflows of funds, the CBN stayed off the OMO market as foreign investors (the only players a l l o w e d t o p a r t i c i p at e ) remained on the sidelines. Also, average interbank funding rates –Open Buy Back (OBB) and Over Night (OVN) rates –which traded at sub-5percent for the major part of the week spiked to 16.5percent at the end of the week amid retail FX funding debits on Friday.

At the secondary market segment, we observed some renewed buying interest as players with idle liquidity sought for outlets. Thus, average NTB and OMO yield decline by 31basis points (bps) and 99bps w/w, to close at 3.7percent and 15.6percent respectively.

This week, in the absence of any surprise debit by the CBN we expect the financial system to stay liquid as c. N293.9billion maturities are scheduled to hit the system in the form of OMO (N198.3billion) and NTB (N95.7billion). Also, given the buoyant liquidity position, we expect the CBN to rollover FG’s NTB maturing at relatively low rates.

Bond Market: A successful March bond auction At the primary bond market, heavy funds flowed into the Mar-2020 bond auction as local investors remained hungry for double-digit yields. While a total of N50billion was offered across the reopened 5-year note as well as new 15-year and 30-year bond, total competitive demand was significant at N189.3billion (total bid to cover: 3.8x vs 2.8x at the Feb-2020 auction).

•Have you been shabbily treated by your registrar, stockbroke r or other capital market operators?

Let us know and investor will help you investigate and report back.

E-mail: iheanyi.nwachukwu@businessdayonline.com

Economy and Market

Foreign inflows into Nigerian stocks hit record low Iheanyi Nwachukwu

F

oreign inflows into Nigerian equities reached record low of N18.97billion in February against an outflow of N52.37billion. This is against inflow of N23.81billion and outflow of N46.5billion in January.

Foreigners who hitherto were major buyers of Nigerian equities accounted for just N141.65billion or 36.92percent of stocks traded in first two months into this year while domestic investors accounted for N242.01billion or 63.08percent.

The Nigerian Stock Exchange (NSE) report shows the stock market recorded N148.50billion in total transactions as at February out of which N71.34 were by foreigners (48.04percent) while

N77.16billion or 51.96percent were by domestic investors.

Domestic retail investors accounted for N29.56billion while domestic institutional investors accounted for N47.60billion.

Over a thirteen (13) year period, domestic transactions decreased by 72.30percent, from N3.556trillion in 2007 to N985billion in 2019 while

foreign transactions increased by 53.08percent from N616billion to N943billion over the same period.

Total domestic transactions accounted for about 51percent of the total transactions carried out in 2019, while foreign transactions accounted for about 49percent of the total transactions in the same period.

Coronavirus alters outlook of Nigerian...

Continues from Page 15

declining Crude oil prices continue to pose a threat”, said Vetiva Research analysts.

B efore now, analysts at Financial Derivatives Company had last month predicted persisting negative market sentiment due “to weak economic fundamentals, low incentive to trade – international investors, unattractive to profit seekers - repeatedly reported losses despite attractive valuations, and low liquidity – low daily trade relative to market capitalisation”.

The stock market benchmark performance indicator - the NSE All-Share Index (ASI) and Market Capitalisation had depreciated by 1.52percent and 1.51percent to close the week ended March 27 at 21,861.78points and N11.393trillion respectively.

All other indices finished lower with the exception of NSE Banking, NSE Insurance, NSE-AFR Bank Value and NSE MERI Value which appreciated

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by 2.06percent, 3.25percent, 3.47percent and 2.93percent while NSE ASeM Index closed flat.

Thirty-five (34) equities appreciated in price during the review trading week, lower than thirty-five (35) in the preceding week. Thirty (30) equities depreciated in price, higher than twenty- seven (27) equities in the preceding week, while ninety-nine (99) equities remained unchanged, lower than 101 equities recorded in the preceding trading week.

The market recorded total turnover of 1.452 billion shares worth N14.918 billion in 21,828

@Businessdayng

deals in contrast to a total of 2.804 billion shares valued at N32.559 billion that exchanged hands the preceding trading week in 31,715 deals.

The Financial Services industry (measured by volume) led the activity chart with 1.224 billion shares valued at N10.590 billion traded in 14,944 deals; thus contributing 84.32percent and 70.99percent to the total equity turnover volume and value respectively.

The Conglomerates followed with 50.261 million shares worth N61.457 million in 442 deals, and the Consumer Goods industry, with a turnover of 47.276 million shares worth N2.509 billion in 2,225 deals.

Trading in the top three equities namely, Zenith Bank Plc, Guaranty Trust Bank Plc and FBN Holdings Plc (measured by volume) accounted for 713.795 million shares worth N8.610 billion in 8,608 deals, contributing 49.18percent and 57.71percent to the total equity turnover volume and value respectively.

Thursday 02 April 2020

BUSINESS DAY

17

Investor Helping you to build wealth & make wise decisions

COVID-19 is changing everything including global IPO market Iheanyi Nwachukwu

T

he “Global IPO trends” report released by E&Y has shown how Coronavirus (COVID-19) and other global factors, such as dramatic fluctuations in oil prices, have had a pervasive impact on the Initial Public Offering (IPO) ecosystem.

I P O ma rke t s ro d e o n t h e momentum carried from fourthquarter (Q4) of 2019 into the first two months of 2020. However, activity slowed dramatically in March 2020 as a result of market turmoil not seen since the global financial crisis in 2008.

The experts in the report raised questions on whether the beginning of this decade is the end of the bull, adding that the impact on market volatility, equity indices and valuations will continue for the foreseeable future, “with a recovery not practical until Coronavirus (COVID-19) is under control.”

“The developing outbreak of the coronavirus disease (COVID-19) has superseded all other geopolitical and trade issues that affected Initial Public Offering (IPO) activity in 2019”, the report stated.

The report which E&Y releases every quarter looks at the IPO markets, trends and outlook for the Americas, Asia-Pacific and Europe, Middle East, India & Africa (EMEIA) regions. It provides quarterly insights, facts and figures on the IPO market and analyses the implications for companies planning to go public in the short and medium term.

E&Y regional IPO leaders believe that the medium-to-long term IPO pipeline will continue to grow in major markets.

Implications for IPO candidates IPO candidates looking to go public in 2020 face capital market volatility, risk on business growth and serious supply chain disruptions. IPO candidates considering an IPO will need to be prepared to complete the IPO quicker in narrower, and may be short-notice transaction windows.

Also, they will need to think about digital options for remote roadshows; demonstrate resilience to the supply and demand shocks; prepare well with an IPO readiness assessment; adjust to more cautious IPO valuations as investors re-appraise their overall asset allocation; and consider other alternative funding or exit options such as debt, private capital, mergers and acquisition (M&A).

IPO leaders’ views “Riding on the momentum from Q4 2019, global IPO markets continued to perform well in the first two months of 2020. The unexpected and novel events surrounding COVID-19 took a toll on the global health of equity markets and, together with other

global market factors, have caused market turmoil not seen since the global financial crisis.

“This extreme market volatility makes any ambitions to go public highly uncertain. IPO candidates facing funding and liquidity challenges should also consider alternative funding mechanism as well as preparing to be ready when the next IPO window opens again”, said Paul Go, EY Global IPO Leader.

“IPO activity across the Americas saw a rise in Q1 2020 by volumes and proceeds compared with Q1 2019.

While COVID-19 and oil tensions have largely dried up IPO activity for now, IPO preparation continues and the IPO pipeline is growing, as issuers look for opportunities to be prepared for calmer and more conducive markets”, said Jackie Kelley, EY Americas IPO Leader.

“Although COVID-19 has had some impact on IPO activity in the short term, with government policies and economic stimulus packages in place, IPO markets should see some improvement in the quarters to come,” said Ringo Choi, EY Asia-Pacific IPO Leader.

“In a historically slow first quarter, COVID-19 has impacted capital markets sentiment, as EMEIA is more www.businessday.ng

exposed to any impacts to crossborder supply chains. Combined with record levels of market volatility, IPOs were postponed which lowered IPO activity in Q1 2020. We see IPO candidates even more challenged to determine the right timing and pursue the right de-risking IPO strategies that provide access to funding for further growth. With central banks and governments in a ‘whatever it takes’ mode, we expect IPO activity to pick up in H2 2020”, said Martin Steinbach, EY EMEIA IPO Leader.

IPO market in review …

Vibrant stock markets in the America supported steady IPO activity in the first two months of firstquarter (Q1) 2020. However, there was a notable drop in IPO activity in March 2020. In America, IPO pipeline continues to build, but activity this year will largely depend on COVID-19 perception, market conditions and tone of the US presidential election.

IPO activity in Asia-Pacific remained robust through the first two months of 2020 –in Q1 2020, IPOs rose 28percent by deal volumes and 110percent by proceeds compared with Q1 2019.

In this region, COVID-19 has supplanted geopolitical and trade

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tensions, and the US presidential election as the top issue affecting IPO activity in 2020. E&Y expects to see a balance between more traditional sectors and high tech as various 5G, pharmaceutical and property management companies continue with their plans to go public in 2020.

In Europe, Middle East, India & Africa (EMEIA), the IPO markets showed mixed results in Q1 2020.

There, IPO activity got off to a slow start in January, picking up the pace in February and then falling off in March.

IPO numbers fell 31percent compared with Q1 2019, while proceeds rose 133percent. In EMEIA region, economic activity remains vulnerable to increasing disruptions for the remainder of the first half (H1) of 2020. As such, E&Y said it does not expect IPO activity to improve until the second half of 2020 at the earliest.

Global IPO activity in the first two months of 2020 was 29percent higher by deal numbers and 242percent higher by proceeds compared with the same time period in 2019, largely carried by Asia-Pacific and US exchanges. With the sudden drop in equity indices across many markets, the global equity markets have been thrown into turmoil. Governments @Businessdayng

have responded by introducing policies and economic stimulus packages to inject liquidity into the financial system and provide aid to industries that are most vulnerable.

Meanwhile, central banks are cutting interest rates and implementing supportive monetary policies.

For the Middle East and Africa regions, the recent spread of COVID-19 and the fluctuation in oil prices are impacting the region.

Businesses and investors are likely to proceed with caution in the coming months. Amid ongoing market volatility, IPO-bound companies will need to take extra care with de-risking mechanisms, particularly related to transaction type, investor appetite and IPO fitness.

Market volatility in EMEIA rose substantially to record levels, based on the VDAX, VFTSE and VSTOXX during March 2020 as the COVID-19 outbreak raised fears of an economic downturn in this region. With indices and valuation levels falling and market risks rising with volatile markets, many IPO-bound companies have postponed their plans to go public.

As an importing and exporting region, EMEIA is more exposed to any impacts to cross-border supply chains. With many of China’s factories shut in February, which slowed supply, and with the spread of COVID-19 throughout Europe slowing demand and supply, EMEIA is feeling the economic impact as countries work to contain the impact of COVID-19. As a consequence, IPO activity in EMEIA was subdued in Q1 2020.

Sectors have been differentially impacted by COVID-19. While technology, health care and industrials remain largely unaffected, consumer staples, consumer products (such as travel), retail sectors are feeling the downward effects. In Europe, with selected countries in quarantine and others trying to stem the spread of COVID-19, Q1 2020 European deal numbers fell 25percent below Q1 2019 numbers, which were much lower than Q1 2018. However, by proceeds, Europe saw a 225percent increase over Q1 2019 due to notably higher average deal size this quarter. In the UK, IPO deals began to flow, albeit more slowly than expected, following the exit of the UK from the European Union (EU). The UK posted 25percent fewer number of deals in Q1 2020 compared with Q1 2019, but proceeds were up 329percent.

The Middle East and Africa regions rode the momentum from Q4 2019, launching seven IPOs raising $929million in total in Q1 2020, an increase of 75percent in deal numbers and 620percent in proceeds over Q1 2019. In India, as the decline in economic growth continues, Q1 2020 deal numbers are down 50percent over Q1 2019, while proceeds are up 43percent over the same time last year.

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Thurssday 02 April 2020

BUSINESS DAY

Harvard Business Review

ManagementDigest

A more sustainable supply chain erónica H. Villena, Dennis A. Gioia and Judith Auritt Klein

I

n recent years a rising number of multinational corporations have pledged to work only with suppliers that adhere to social and environmental standards. Typically, these MNCs expect their first-tier suppliers to comply with those standards, and they ask that those suppliers in turn ask for compliance from their suppliers — who ideally ask the same from their suppliers. And so on.

The aim is to create a cascade of sustainable practices that flows smoothly throughout the supply chain, or, as we prefer to call it, the “supply network.”

It’s an admirable idea, but it’s been hard to realize in practice. Many of the MNCs that have committed to it have faced scandals brought about by suppliers that, despite being aware of sustainability standards, have nevertheless gone on to violate them. Consider the fallout that Nike and Adidas suffered for using suppliers that were dumping toxins into rivers in China.

What’s more, those scandals involved first-tier suppliers.

The practices of lower-tier suppliers are almost always worse, increasing companies’ exposure to serious financial, social and environmental risks. In this article we describe various ways that MNCs can defuse the ticking time bomb those risks represent.

WHERE THE PROBLEMS ARE To understand the situation, we conducted a study of three supply networks. Each was headed by an MNC considered to be a “sustainability leader” — one in the automotive industry, one in electronics and one in pharmaceuticals and consumer products. We also studied a representative set of each MNC’s suppliers — a total of nine top-tier and 22 lowertier suppliers, based variously in Mexico, China, Taiwan and the United States. What we discovered was that many were violating the standards that the MNCs expected them to adhere to.

We found problems in every country we studied. In Mexico we visited five lower-tier suppliers; all lacked environmental management systems. In China and Taiwan we visited 10 lowertier suppliers, all of which had marginal environmental practices, dangerous working conditions and chronic overtime issues. In the United States we

studied seven lower-tier suppliers and found that three had high concentrations of airborne chemicals.

The problem, ironically, often starts with the MNCs themselves. They frequently place orders that exceed suppliers’ capacity or impose unrealistic deadlines, leading supplier factories to demand heavy overtime from their workers.

First-tier suppliers, for their part, rarely concern themselves with their own suppliers’ sustainability practices. That’s often because they’re struggling with sustainability issues themselves.

For MNCs, there are special challenges in governing lowertier suppliers. There’s often no direct contractual relationship, and a particular MNC’s business often doesn’t mean that much to the lower-tier supplier.

If American and Japanese automakers rely heavily on a certain seat maker, for example, they can demand that it adhere to their sustainability standards.

But that seat maker may have a hard time getting its suppliers to follow suit.

Lower-tier suppliers are also the least equipped to handle sustainability requirements.

They often do not have sustainability expertise or resources, and they may be unaware of accepted social and environmental practices and regulations. And typically they don’t know much about the sustainability requirements imposed

by MNCs — but even if they do, they have no incentive to comply. MNCs, too, are handicapped by ignorance. They frequently don’t even know who their lower-tier suppliers are, let alone what capabilities they have.

All these concerns mean that lower-tier suppliers are unquestionably the riskiest members of a supply network. If they www.businessday.ng

have poor or dubious sustainability performance, then an MNC that does business with them can endanger its reputation and suffer profound repercussions — losing customers, being forced to find new suppliers or having its supply chain disrupted. To reduce such risks, MNCs need to include both first-tier and lower-tier suppliers in their sustainability programs.

BEST PRACTICES The three MNCs in our study have taken a number of steps to promote suppliers’ social and environmental responsibility: — They have established long-term sustainability goals.

— They require first-tier suppliers to set their own long-term sustainability goals.

— They include lower-tier suppliers in the overall sustainability strategy.

— They task a point person on staff with extending the firm’s sustainability program to first- and lower-tier suppliers.

Firms can also borrow some of the specific strategies that our MNCs use to spread good practices throughout their supply networks. These fall into four broad categories: — DIRECT APPROACH: The MNCs we studied set and monitor social and environmental targets for their first-tier suppliers regarding second-tier suppliers. The automotive corporation, for instance, has a strong commitment to supplier diversity. It requires its first-tier suppliers to allocate 7% of their procurement spending to minority suppliers. The first-tier suppliers we interviewed noted that the MNC periodically checks to see if the target is being met and creates opportunities to help them network with minority lower-tier suppliers.

— INDIRECT APPROACH: The MNCs we studied delegate

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elements of lower-tier-supplier sustainability management to their first-tier suppliers. This approach is effective because the MNCs are hands-on: They offer training to suppliers and provide some incentives for implementing sustainability practices. Most of the first-tier suppliers we interviewed told us that such training had led them to make substantial changes in their manufacturing processes and to begin asking their suppliers to adopt similar sustainability standards.

— COLLECTIVE APPROACH: The MNCs we studied are all founding members of industry associations focused on developing sustainability standards, providing assessment tools, and offering training to first- and lower-tier suppliers.

One notable association is the Responsible Business Alliance, whose members include IBM, Philips and Apple.

Collaborative initiatives have many benefits. They can increase efficiencies for suppliers, who can use a standardized self-assessment to satisfy many customers and thus avoid duplication. These initiatives can also draw in more suppliers, because suppliers that have many customers with the same sustainability requirements tend to be more willing to participate.

Additionally, when MNCs help their first-tier suppliers become full members of an industry association, those suppliers must then comply with industry standards, which means they have to assess their own suppliers’ sustainability.

— GLOBAL APPROACH: The MNCs we studied make a point of collaborating with international institutions and nongovernmental organizations that share their goals. For instance, all three corporations have joined the United Nations Global Compact, an interna@Businessdayng

tional effort to promote corporate social responsibility. The three MNCs also participate in the Carbon Disclosure Project’s Supply Chain Program, a global data-collection platform in which suppliers disclose information about their carbon emissions.

ROOM FOR IMPROVEMENT Multinational corporations that want to embed fair labor practices and environmental responsibility throughout their supply networks can start by adopting the sustainability strategies used in our study. But all corporations can and should do more. They should send their suppliers a more consistent message that economic, social and environmental requirements are all important. They should make the same message clear to their procurement officials and create incentives for them to pursue not only economic goals but also environmental and social goals. Those officials should take a handson approach to collecting data about suppliers’ capacity, monitoring their sustainability performance and engaging with them in improvement projects.

The MNCs should also work directly with their suppliers’ procurement units on the best ways to disseminate sustainability requirements throughout their supply networks. The danger of not acting is clear: A supply chain is only as strong as its weakest link.

Verónica H. Villena is an assistant professor of supply chain management at the Smeal College of Business at Penn State University. Dennis A. Gioia is the Robert and Judith Auritt Klein professor of management at the Smeal College of Business.

Thursday 02 April 2020

BUSINESS DAY

COMPANIES & MARKETS

19

COMPANY NEWS ANALYSIS INSIGHT

FINANCIAL SERVICES

EFG Hermes revenue hits EGP 4.8bn …Net profit expands 36% Y-o-Y to EGP 1.4bn in 2019 HOPE MOSES-ASHIKE

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FG Hermes, the leading financial services corporation in Frontier Emerging Markets (FEM), reported a net profit after tax and minority interest of EGP 1.4 billion in FY19, up 36% Y-o-Y, on the back of a 20% Y-o-Y expansion in revenues to EGP 4.8 billion.

Revenue growth for the year was supported by both the Group’s Investment Banking platform, which reported a 12% Y-o-Y rise in revenues to EGP 3.6 billion, and non-bank financial services (NBFI) platform, which saw its revenues reach EGP 1.2 billion, up an impressive 52% compared to the same figure for 2018. Growth at the NBFIs platform was primarily driven by the Group’s microfinance solutions provider, Tanmeyah, which saw its top line reach the EGP 1.0 billion mark in FY19, up 66% Y-o-Y. “I am particularly satisfied with our progress in expanding our NBFI’s product offering,” said EFG Hermes Holding Group CEO, Karim Awad. “Today, our NBFI footprint encompasses leasing, microfinance, fintechenabled consumer finance, mortgage finance, factoring and will soon include in-

surance, giving us greater flexibility to overcome challenges posed by global and regional market conditions and support profitability.”

Accounting for 71% of the Group’s revenues in FY19, fee and commission income grew 23% Y-o-Y to EGP 3.4 billion supported by revenues generated by fees and commissions’ three verticals.

The Group’s sell-side businesses reported a 9% Y-o-Y rise in revenues to EGP 1.5 billion in FY19.

The expansion came on the back of a 16% Y-o-Y rise in revenues by the Brokerage division which reached EGP 1.2 billion driven by higher revenues generated by the Group’s Saudi Arabian, Kuwaiti, Emirati and Frontier operations and the Group’s Structured Products. EFG Hermes’ Investment Banking division saw a 10% Y-o-Y decline in revenues to EGP 328 million, despite a higher and more diversified deal count for the year.

“The year was filled with

milestones for our sell-side platform. Our brokerage division continued to hold on to its number one spot in terms of market share in Egypt, Abu Dhabi, Dubai, Nasdaq Dubai, and Kuwait, while further expanding its presence in Nigeria, Kenya, and Pakistan. In parallel, our investment banking team successfully advised on multiple IPOs both in the MENA region and across the wider FEM space, with the division selected as a joint bookrunner in Saudi Aramco’s his-

toric IPO. In the final quarter of the year, in line with our strategy to enhance the Group’s DCM capabilities, our DCM-dedicated team successfully completed both Egypt’s first short term securitization transaction and its first short-term bond transaction. The successful conclusion of these two transactions demonstrates our ability to promptly capitalize on changing regulation and incessantly lead innovation across the Egyptian finance industry,” added Awad.

L-R: Marketing Services Manager, UAC Restaurants, Mrs Eustesia Ogunsusi; a beneficiary, Mrs Udeme Bassey; and Marketing Manager, UAC Restaurants, Mrs Ethel Mba, during the company’s distribution of hand sanitizers and nose masks at Ile-Epo market along Lagos Abeokuta Expressway, Lagos…

CONSUMER GOODS

Buy-side recorded revenues of EGP 624 million in FY19, up 15% Y-o-Y. The solid year-on-year growth was supported by the sale of Vortex Energy’s wind assets in 1Q19, which saw the Group’s Private Equity division report revenues of EGP 341 million, up 133% versus last year’s figure. On the other hand, Asset Management revenues decreased 29% Y-oY to EGP 283 million.

Capital markets & treasury operations, which represented 29% of the Group’s revenues in FY19, saw revenues rise 14% Y-o-Y to EGP 1.4 billion in FY19, largely on the back of higher interest income and realized capital gains.

Group operating expenses rose 17% Y-o-Y to EGP 3.0 billion in FY19, with the rise attributable to higher salaries following a rise in Tanmeyah’s headcount versus last year, an increase in the variable portion of employee expenses in line with revenue growth, and higher operating expenses across both the entire NBFIs platform and Tanmeyah in particular.

In light of the recent political situation and events in Lebanon, and in an effort to reflect a prudent stance amid a very fluid situation; EFG Hermes undertook a 36% haircut (FV re-assess-

OIL & GAS

Cadbury makes new appointment appoints Nigel Parsons as director MTNN back to listing price OLUFIKAYO OWOEYE

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onsumer goodsgiant, Cadbur y Nigeria Plc has announced the resignation of a Non-Executive Director, Gawad Abaza with effect from April 1 and the appointment of Nigel Parsons as his replacement.

The makers of beverage drink Bournvita in a notice to the exchange commended the outgoing director for his ser vice and immense contribution towards the success of the company while he was a director on the board and wished him all the best in his future endeavours.

Abaza, who has been on the board of the Cadbury since 2016 and served on a number of board committee.

The new director, Parsons a South African by birth, studied commerce at the University of Natal and Business at the University of Wales. He currently leads the operational strategy and commercial delivery of Mondelez International in Australia, and is responsible for approximately 2,000 employees and a portfolio of iconic c h o c o l at e, b i s c u i t a n d candy brands which include Cadbury Dairy Milk chocolate, Oreo, Belvita biscuit, the natural con-

fectionery company and Pascal. He has held other roles such as Commercial Director, Australia; Sales Director, Asia, Middle East and Africa; Sales Director, Australia; and Head of Corporate Grocery, Australia.

Parsons sits on the Australian Food and Grocery Council’s Board Sub-Committee, where he provides solutions for key industry initiatives and focus areas.

After a disappointing 2016 result, which saw Cadbur y plunge into a loss of N296.4million on the back of an economic recession, the food and beverage maker seems to have gained momentum.

But even more impressive

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was how the numbers have surged in the last six years.

In its 2019 full-year unaudited result, Cadbury shrugged off a harsh operating environment coupled with a cash-strapped consumers to record a 9percent jump in revenue to N39.32bn from N35.97bn recorded in same period in 2018. It grew its profit before tax from N1.22bn in 2018 to N1.54bn in 2019.

A trend analysis further shows that it grew its Profit Before Tax from a loss of N562.87million in 2016 to 360million in 2017.

Shares of Cadbury traded at N on the floor of the Nigerian Stock Exchange as at Tuesday.

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as market sell off worsens

OLUFIKAYO OWOEYE

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t the close of trading on Monday, shares of MTNN lost 10percent to end trading at N90. This is the same price the shares was first traded when it listed by introduction some 10 months ago. It also remained unchanged at N90 at the close of trading on Tuesday.

The double whammy effect of worsening Coronavirus epidemic and crash in global oil price has continued to dampened investors morale leading to them dumping the stock. @Businessdayng

The stock which was sought after by investors as everyone wants to have a slice of the much coveted bellwether stock.

Investors also sold off stocks of tier-1 banks forcing the All-share index to tank by 2.4percent to 21,330.79 points – the biggest move since falling 2.9percent on March 19. Consequently, Month-to-Date and Yearto-Date losses increased to -18.6 percent and -20.5percent respectively.

The sell off continued on Tuesday as the Banking index lost 1.12percent after sell off by investors in tier-1 stocks.

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Thursday 02 April 2020

BUSINESS DAY

COMPANIES&MARKETS

Business Event

COVID-19: INTELS builds two isolation centres at Onne Seaport AMAKA ANAGOR-EWUZIE

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n support of the Federal Government’s efforts to curtail the spread of the Coronavirus (COVID-19) pandemic, the Nigeria’s oil and gas logistics giant, INTELS Nigeria Limited, has donated two facilities to the Port Health Services (PHS) of the Federal Ministry of Health to serve as isolation centres at Onne Port, Rivers State.

While handing over one of the centers on Monday 30th March, Amaopusenibo Mike Epelle, general manager, Legal and Corporate Services of INTELS, said the isolation centres, located at both the Federal Ocean Terminal (FOT) and the Federal Lighter Terminal (FLT), Onne Port, were donated by the company to quarantine sick persons and any suspected case discovered by the Port Health Services on visiting vessels.

“So far, we have not recorded any case of COVID-19 infection here at Onne Port but that is not to say that we should become complacent. We commend the Federal and Rivers State Governments’ efforts aimed at protecting the public

health,” Epelle said while handing over the isolation centre at the FLT to Port Health officials.

According to him, these isolation centres were part of INTELS’ support to complement the efforts of the government to containing the spread of the disease.

Epelle also said that INTELS is following strict work place safety measures outlined by relevant authorities including the World Health Organisation (WHO), the Nigeria Centre for Disease Control (NCDC), Nigerian Ports Authority (NPA) and Port Health Services in ensuring the safety of its workers in its areas of operations in Onne, Warri, Calabar and Lagos.

“INTELS is committed to the wellbeing of its staff.

Health and safety of all our workers and visitors to our facilities remain a major priority in our management policy.

Accordingly and in line with best global practices, we have initiated the creation of policies, guidelines and procedures targeted at preventing the spread of the coronavirus disease in our facilities,” he said.

He assured that workers are well educated on the safety

measures to adopt at all times while those who can work remotely have been asked to work from home. “Only essential duty staff is required to be at their duty posts under the strict observance of requisite safety measures.”

Epelle further emphasised that minimising contact among workers, clients, and customers by replacing face-to-face meetings with virtual communications and implementing telework was key, adding that INTELS has been able to achieve this, in addition to implementing other measures.”

Ibitein Benebo, South South Zonal Coordinator of Port Health Services, who received the keys to the isolation centres, thanked INTELS for the donation and assured of judicious use of the facilities.

Nigeria has a total of 135 confirmed cases of COVID-19 infections as at 3pm on Tuesday, according to the Nigeria Centre for Disease Control (NCDC). Two of those infected have died. Globally, 803,011 have been infected with the disease out of which 39,025 have died while 172,396 have recovered as at 3pm on Tuesday.

Computer Village, Ikeja been lockdownin compliance with the Federal Government to curb the spread of the Corona Virus iin Nigeria.

Pic by Olawale Amoo.

Popular traditional Nkwo-Orji market tables overturned in compliance with the Imo State directive to curb the spread Covid 19 in the state.

First Bank donates N1bn in fight against CONVID-19 OLUFIKAYO OWOEYE

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ier-1 lender, First Bank has announced the donation of N1 billion to facilitate the fight against the Coronavirus pandemic in Nigeria.

This follows similar donations by other top corporates in the country, especially banks, many of which are acting in accordance with agreements reached by the CBN’s Bankers’ Committee.

According to the bank, the N1 billion donation would enable the Federal Government to acquire some critical medical equipment such as testing kits, as well as provide isolation centres which are essential in the ongoing fight against CONVID-19.

“Furthermore, First Bank has donated N1 billion towards the joint effort which no doubt will go a long way to rapidly expand health facilities especially Testing, Isolation and actual treatment as well as the ICU facilities

being promoted as part of the Nigerian Private Sector Coalition Against COVID-19 (CACOVID) intervention,” the bank said in a statement.

The bank said it would continue to look out for new ways through which it can offer help to Nigeria during this crisis period. The pandemic has wrought negative health and economic impacts on the country and elsewhere. Noting that after a review of its business continuity plan it is prepared to deliver essential banking services to Nigerians going forward.

Stephen Akintayo Foundation donating relief materials to Internally Displaced Persons (IDP) Camp in Maiduguri, Borno State.

Foundation donates N2m worth of relief package to vulnerable Nigerians AMAKA ANAGOR-EWUZIE

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tephen Akintayo Foundation has donated relief materials worth N2 million to orphanages and the most vulnerable in Nigeria as part of effort to cushion the effects of the economic lockdown imposed in Lagos, Ogun and FCT by Federal Government to contain the spread of Coronavirus, otherwise known as Covid-19 in Nigeria.

Gideon Orphanage and Widow homes was the first beneficiar y of Stephen Akintayo relief donation of N250,000, Tivid Orphanage Home Int’l also received

N250,000 relief donation while Maiduguri Internally Displaced Persons (IDP) Camp will also benefit through an NGO that will buy and distribute food items as well as medicine for the hospital in the IDP Camp.

Meanwhile, a total of N1 million was given to www. ginido.com, an e-commerce website to distribute groceries worth N1 million to communities in Ajegunle and other areas.

Reacting to this, Stephen Akintayo, the founder, described the period as a season to think of indigent and vulnerable people in the society, who find it difficult to cater for three decent meals www.businessday.ng

in a day.

“We need to be our brothers’ keepers by ensuring that those who do not have benefit from our deeds of kindness as this will also go a long way in helping people stay off the street in line with the Federal and States Governments efforts to contain the spread of the Coronavirus epidemic in Nigeria,” said Akintayo, who doubles as the chief executive officer of Gtext Homes, owner of estates across the country.

He also called on other Nigerians including corporates and individuals to see the need to give to the vulnerable in the society

L-R: Mazen Mroue, chief operating officer, MTN Nigeria; Lynda Saint-Nwafor, executive, chief enterprise business officer, MTN Nigeria, and Olubayo Adekanmbi, executive, chief transformation officer, MTN Nigeria, at the launch of the Prudential Zenith Life Mobile Payment Service in partnership with MTN Nigeria in Lagos.

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@Businessdayng

Thursday 02 April 2020

BUSINESS DAY

Corporate Social Impact

21

Onuwa Lucky Joseph (08023314782) Editor.

COVID 19: Corporate Nigeria rises to the challenge Onuwa Lucky Joseph

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ovid 19, alongside its Nigerian pet monikers such as Covik 1 9, Colodia Driveus, korobia virus, Corona Vampuss, Vairio Gorillas, etc. has been, for good reasons, the staple of the news media in the past couple of weeks. Everyone is on edge, especially as it’s been picking on the crème de la crème.

Amongst the biggest scalps of the extremely rude virus to date (31/03/20) are Abba Kyari, Chief of Staff to President Muhammadu Buhari, Bala Mohammed, Governor of Bauchi State, Nasiru El Rufai, Governor of Kaduna State, Seyi Makinde, governor of Oyo State and Muhammed Babandede, Comptroller General of Nigerian Immigration Services. Many more might show up before this publication.

Other notable names include Professors Oluwabunmi Olapade-Olaopa and Obafunke Denloye, provost and deputy provost respectively of the University Of Ibadan College Of Medicine. Those two are right there in the frontlines.

Hopefully, a lot of these names will recover as we’ve seen a majority of infected people do, both home and abroad. The regular folks who get infected, even though they are in the numeric majority, are usually nameless, but the statistics clearly indicate that it’s more of the really regular folks that will come down with the after effects of the virus.

Interest in Covid 19 spiked up considerably nationwide after the announcement by President Muhammadu Buhari on 28th of March, 2020 that Lagos, Abuja and Ogun State would be permanently locked down from 11pm Monday the 30th of March. We are not debating the wisdom of that action which didn’t give people enough room or resources to stock up on food for the 14-day mandatory stay at home period.

What gladdens our heart is that, last week, even as we highlighted the efforts of the private sector as represented by Amazon, Microsoft, Facebook, Apple, Roche, LVMH, etc., to help palliate the effects of the Wuhan virus, all we could do was hope that our own private sector would find it in itself to do likewise. We are glad to report that the Nigerian corporate sector has shown by its action and commitment that it is indeed willing to put up a stalwart effort in the fight against Covid 19, anchored by Aliko Dangote, richest man in Africa and one of the continent’s biggest industrialists.

As he said in a tweet, “The Coalition Against Covid 19 is an initiative I am leading together

Aliko Dangote

Herbert-Wigwe

with other private sector leaders, and our common goal is to support ongoing government initiatives with our resources in the fight against COVID 19.

We are in this together and I am optimistic we will overcome.”

Amen, we say.

Heartwarming it is to see that the vigorous engagement we advocated here at Corporate Social Impact (CSI) is being implemented. At government’s instance, it does seem, considering that CBN Governor Godwin Emefiele, on 26th March, laid down the guidelines for membership of the various committees of the Private Sector Coalition. Specifically for the Funding Committee, he, at the behest of the FG, insisted that any organisation that desires to be on it, must put down at least N1Billion towards the effort. Which might explain why a lot of ‘N1Billions’ are on the list. We expect to see more of them.

The objectives of the Coalition, according to Emefiele, are, to • Mobilize private sector thought leadership, • Mobilize private sector resources • Increase general public awareness, education and buy-in • Provide direct support to private and public healthcare’s ability to respond to the crisis • Support Government effort Some big hitters have been quick to contribute to the fund. According to a document signed by Dr. Mahmoud Isa-Dutse, Perm Sec Ministry of Finance, early responders were • Aliko Dangote – N1Billion • Abdulsamad Rabiu - N1Billion • Femi Otedola - N1Billion • Tony O. Elumelu - N1Billion • Segun Agbaje - N1Billion • Herbert O. Wigwe - N1Billion • Jim Ovia - N1Billion • Dr. Paul Enenche – N2Billion (Items worth) • Access Bank - N1Billion • GTBank - N1Billion + 110Bed intensive Care Centre to Lagos State • Zenith Bank - N1Billion • UBA – N2Billion + N1 billion to Lagos State + N500 million to Abuja, N1 billion to the remaining 35 states in Nigeria, N1.5 bilwww.businessday.ng

lion to UBA’s presence countries in Africa - N1 billion for Medical Centres with equipment & supplies • NNPC (in consonance with oil companies) - N11Billion • Atiku Abubakar – N50Million • TuFace Idibia - N10 Million • Akaninyene Adiaka – N100,000 • Psalmist Ekpedeme – 100,000 • Ben Legacy O – 500,000 Other Contributors Since that 28th March document was released, other corporates and individuals who have chimed in with their contributions include • Mr. and Mrs. Modupe and Folorunsho Alakija – FAMFA Oil – N1Billion (N250m to National Center for Disease Control, NCDC + N250m to Lagos State Government + N50m to the African Center of Excellence for Genomics of Infectious Diseases + N100m to Medical Workers on the Frontline in Lagos + N100m to Medical Workers on the Frontline in Abuja + N245m for Supply Of Medical Equipment to relevant organizations + N5m to DR Ameyo Stella Adadevoh (DRASA) • First Bank - N1Billion • Mike Adenuga – N1Billion to FG + N500Million to Lagos State • Emeka Offor - $30 Million (Worth of Medical Equipment and Books) • Unity Bank – N1Billion • Polaris Bank – 400 specialised hospital beds and mattresses • Sterling Bank – N250m + a dedicated account for citizens to donate to in aid of the Covid effort.

(Bank Name: Sterling Bank/Account Name: COVID Donations/ Account Number: 0076813615) • Bola Ahmed Tinubu – N200 Million • Union Bank – N50Million • Stanbic IBTC – N250Million • Keystone Bank – N1Billion • Ecobank – N100m worth of stay safe awareness messages on radio stations nationwide • Kessington Adebutu (Alias Baba Ijebu) – N300 Million to Lagos State Govt • Obijackson Group – 4,000 masks and 200 units of protective clothing for care providers

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Paul Enenche

in Anambra State Banks yet missing in action are Fidelity Bank, FCMB, Providus Bank, Titan Bank, Standard Chartered Bank, Citibank, etc. We reckon that in the next couple of days, their announcements will make landfall.

TELECOMS SECTOR The Telecoms sector is gently getting into the fray, gingerly testing the depths with one foot, it would seem, with its support coming more in kind than cash.

Airtel donated 40 mobile phones complete with a Closed User Group (CUG) to the Port Health Services, effort to track and verify passenger information at local and international airports.

MTN, according to its Chief Corporate Services Officer, Tobechukwu Okigbo, has provided “1,200 telephone lines, which we have credited with N100,000 monthly for voice and sms. We are also providing 3GB of data a month to those lines. We’ll provide airtime and data to those lines for 6 months in the first instance. We will continue to provide airtime and data to those lines after that period as required.” As well, some customers have started reporting a bonus of 10 daily free messages from MTN Glo contribution seems covered under the Mike Adenuga contribution.

9Mobile is yet to register its contributions. Understandably, as the company is trying to steady the boat. However, like Dr. Isa-Dutse’s acknowledgment letter said, ‘no amount is too small’.

We trust that 9Mobile nor go fall our hands.

INSURANCE SECTOR AXA Mansard has announced a donation of N100M worth of insurance. This in all likelihood is in concert with the Nigeria Insurers Association (NIA), whose members have decided to give insurance covers to all health works nationwide who are involved in managing the pandemic. The cover is for a maximum of N1Million for death or for permanent disability. @Businessdayng

Despite the insurance cover support, the generality of Nigerians, based on an informal survey CSI conducted, are of the view that the insurance sector does not pick its fair share of CSR bills, leaving all the heavy lifting to the banks. Nigerians expect the big insurance companies, to, at least, put in a decent showing this time around.

OTHER SECTORS Nigeria needs to hear from the Manufacturing Sector, the Food and Beverages Sector, the Health Sector, specifically the Pharmaceuticals, the Hospitality Sector, the Marketing Communications Sector, etc. Nigeria’s organised private sector is more than banks and telecoms. Hopefully, by next week, there will be a clearer picture and we shall do the fill-ins for those currently missing if they get in. And if they do not, we also shall report their noninvolvement. This is a national emergency that requires all hands working together for a speedy resolution.

ACCOUNTABILITY: This, we cannot stress enough.

Even as the donations in billions and millions keep streaming in, the concern of many Nigerians is how efficiently and effectively the moneys would be deployed for the reasons stated by the donors. Many would like to see trusted specialist NGOS entrusted with some of the funds to ensure it gets right down to the designated targets. As we all know, a big part of this fight is not just those infected, but even more the potential victims who are willing to dare any consequences in order to get their daily bread. If measures are not put in place to curtail the movement of this clearly desperate group, all of this effort would end up a sham.

So, despite the promise by the Committee to do an audit after this is all over, it is critical that donors and the general public be given weekly updates, not just of emerging and liquidated Corona cases, but also of moneys received and how (and where) they were spent.

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Thursday 02 April 2020

BUSINESS DAY

Corporate Social Impact

Nestlé Nigeria empowers youth with technical skills

Best Graduating Student- TTC Agbara: L-R Taiwo Olayade, Best Graduating Student, Mr. Walid Hbaika, Nestlé Agbara Factory Manager, HRH Alagbara of Agbara, Engr. Martins Adeleke, Country City and Guilds Manager, Mr. Sola Akinyosoye, Country Human Resources Manager, Nestlé Nigeria.

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t the graduation of batch four of its Technical Training Center in Ogun State recently, Nestlé Nigeria reiterated its commitment to youth empowerment under its global flagship program, ‘Nestlé Needs YOUth’ which aims to help 10 million young people worldwide access economic opportunities by 2030.

Through Nestlé Needs YOUth initiatives, the company has reached over 12,000 young Nigerians through career fairs, entrepreneurship programs and skills training, equipping them to find decent employment or profitable entrepreneurship.

Nestlé Technical Training Centers (TTC) at Agbara and Abaji are a key part of the company’s efforts towards ensuring that youth within its communi-

ties are future ready. With the aim to bridge the technical skills gap, participants receive vocational training in machining, mechanical fitting operations, electrical operations, instrumentation operations and automation. The training follows an intensive 18-month theoretical and practical engineering syllabus, which culminates in the prestigious City and Guilds of London technician certifications.

Speaking at the graduation ceremony attended by stakeholders, community leaders and parents, Mr. Sola Akinyosoye, Nestlé Nigeria’s Head of Human Resources, said, “Nestlé is determined to help young people develop future ready skills that will position them to find decent employment or create their own businesses if

Graduating Class of 2020, Nestlé Technical Training Center, Agbara

they choose to do so. We believe strongly that communities cannot thrive if they fail to create opportunities for future generations.

We will therefore continue to invest in education and capacity development of youth to help reduce the burden of unemployment. I am proud of the quality of graduates produced by this scheme and particularly glad, that all the graduates we are celebrating today have been employed by Nestlé Nigeria.”

Also speaking at the event, The Nigeria Country Manager, City & Guilds, Engineer Martins Adeleke commended the performance, hard work and enthusiasm of the graduates, pointing out that the best graduating student of the set who also came out tops in Africa is now recognized internationally.

Reflecting on his experience, top graduating student, Taiwo Olayade, said, “The Technical Training Program was a great boost to my intellectual prowess and has broadened my sphere of academic knowledge, thus giving me a professional edge in the corporate world. Having been trained in Nigeria and Switzerland, I am confident to say that I have acquired the needed skills and outstanding practical experience for employability in this great program”.

With an estimated youth unemployment rate of 20 percent as at 2019, there is an urgent need to enhance the Industrial Sector which is one of the backbones of Nigeria’s economy, creating jobs and providing sustainable means of livelihood for multiple players across its value chains. Training

the next generation of technical specialists will help accelerate industrialization.

Nestlé Nigeria PLC opened her first Technical Training Center at her Agbara factory in 2011 and the Abaji Center in 2017 to reach more participants. The program has been supported by the Swiss Embassy in Nigeria since inception and recently got the attention of the Industrial Training Fund (ITF) which now supports the training Center in Abaji in collaboration with Nigeria Employers Consultative Association (NECA). To date, over 100 participants have successfully completed the program with over 90% employed directly by Nestlé.

(Kindly send feedback to 08023314782 / csrmomentum@gmail.com)

Rihanna donates $5 million to on-the-ground coronavirus relief efforts Brooke Marine

W

hen Rihanna created the C la ra L i o n e l Foundation in 2012, its goal was to fund “groundbreaking education and emergency response programs around the world.”

CLF typically responds to natural disasters, and a life threatening virus is no exception. Today, as the spread of the coronavirus reaches nearly every portion of the globe, the nonprofit organization has pledged to donate a hefty sum in order to aid in the fight against the spread of COVID-19.

According to an announcement on the foundation’s site, five million dollars will be donated to organizations including Direct Relief, Feeding America, Partners in Health, The World Health Organization’s COVID-19 Solidarity Response Fund, the International Rescue Committee. The goal is to provide funds

to on-the-ground response teams, food banks serving at-risk communities, aid in the distribuwww.businessday.ng

tion of masks and respiratory supplies, and an acceleration of testing in places like Haiti, Ma-

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lawi, and Native communities.

While the federal government stalls on making quick decisions that could save thousands of lives, local communities have started their own funds to help save small businesses and protect those who still must go to work while everyone else stays home to distance themselves in a healthy way.

And some celebrities have just decided to take matters into their own hands when it comes to responding to this particular crisis. Christian Siriano has a team of sewers working from home to make protective medical masks to provide to New York healthcare professionals, Pyer Moss founder Kerby Jean-Raymond has turned his New York office into donation centers, and Miuccia Prada donated six ICUs to hospitals in Italy. It extends beyond the fashion world, too, as Bethenny Frankel is also manufacturing and delivering half a million medical masks with her organization B Strong.

Now, Rihanna has made the @Businessdayng

move towards aiding the crisis with CLF’s five million dollar donation.

CLF has previously responded to global crises with emergency grants, as was the case with Hurricane Dorian, and investing in emergency preparedness models and education in high-risk areas.

CLF’s goal with its five million dollar coronavirus donation is to protect “those who will be hit hardest by this pandemic,” according to the foundation’s executive director Justine Lucas. “Never has it been more important or urgent to protect and prepare marginalized and underserved communities,” she said in a statement.

The entrepreneur has yet to make a personal statement on the matter, but at least we know Rihanna was already preparing her teams for social distancing— just look at the Fenty Beauty TikTok House, a supreme model for quarantine.

• (Culled from wmagazine.

Thursday 02 April 2020

Retail &

BUSINESS DAY

consumer business Luxury

Malls

Companies

Deals

23

Spending Trends

CONSUMER SPENDING

Panic buying to drive food inflation to yet another record high BUNMI BAILEY

T

he marginal respite felt by Nigerian consumers in the moderation of increasing food prices known as food inflation may not be felt in March 2020.

There is every indication that the food sub-index will accelerate in March, to a two-year high as a result of COVID-19 induced panic buying amid the structural challenges affecting food supply.

According to the National Bureau of Statistics (NBS), month-on-month basis, food prices rose but at a slower pace by 0.87 percentage points, the lowest since February 2019 to 14.90 percent in February as against 14.85 percent in the preceding month. Analysts attributed the slow pace to the impact of the border closure gradually fading off.

“Increased demand for food items seen in the second half of March over fears of lockdown, led to higher prices, and will most likely

push food inflation above 14 percent mark, Damilola Adewale,” a Lagos-based Economic researcher said.

In mid-March, BusinessDay survey of markets across Lagos showed that consumers flooded the

markets due to the increasing number of COVID-19 cases and a partial lockdown, making traders take advantage of the excess demand by hiking prices of food items.

For example, a 50kg of

tomatoes rose by 50 percent to N9,000 in March from N6,000 in February, a bag of pepper rose by 25 percent to N10,000, a medium-sized yam increased by 28.6 percent to N900 and a 50kg bag of yellow Garri increased by

3.3 percent to N9,200.

For headline inflation, there are expectations for it to also rise, making it to a possible 23-month high.

From the NBS, for February 2020, the inflation rate rose by 0.07 percentage points to 12.20 percent from 12.13 percent recorded in January 2020; the present inflation rate is the highest in 22 months. Food inflation contributes than 50 percent to inflation.

Abiola Gbemisola, analyst at Lagos-based Chapel Hill Denham said, “We expect headline inflation to reach about 12.4 percent, driven by consumers buying at higher prices, food insecurity in the north and the planting season. So, a combination of these will impact inflation.”

But Ayorinde Akinloye, a consumer analyst at CSL Stockbrokers does not expect food inflation to accelerate further but to increase at a reducing rate like in February “I don’t think panic buying will lead to a massive increase in food prices because it happened during the last week of March. So,

I don’t expect it to have a significant impact,” he said.

Before the emergence of this global pandemic, Nigerian consumers were struggling with squeezed disposable income evidenced by the four-year continuous downtrend in real income per capita The Nigerian economy is yet to recover fully from a recent recession as the growth of the wider economy which printed at 2.27 percent in full year 2019 underperforms population growth rate estimated at some 3 percent.

This indicates that Nigerians are getting poorer even as GDP per capita or income per head, a perfect proxy for living standard, fell by 40 percent between 2014 and 2018, official data show.

Also, data from the National Bureau of Statistics on Gross Domestic Product (GDP) by Income and Expenditure approach at 2010 purchaser’s values show that consumption expenditure of households has been declining at varying pace since it rose by 1.5 per cent in 2015.

COMPANY

Coca-Cola, McDonald’s, others redesign logos to interpret social distancing

C

o c a - C o l a, McDonald’s, Audi, Volkswagen and a few other corporate conglomerates are responding to the Covid-19 pandemic by temporarily redesigning their logos to interpret social distancing.

Their resigned logos is said to reflect advice for people to remain at least two metres away from anyone who is not in their household.

The advice, which has been given by governments around the world including the UK, is an effort to slow down the rate at which Co-

vid-19 will spread and ease the burden on healthcare services.

The messages and logos created to promote social distancing have pros and cons, according to two experts in the design field.

“Our current global situation is no joke. It’s a serious matter,” Douglas Sellers, executive creative director for firm Siegel+Gale told CNN Business.

“And brands designing social distancing logos have the potential to diminish the severity of what we are going through. The creativity, paswww.businessday.ng

sion, and thought that goes into wanting to help, educate, and be part of the physical distancing movement is

a worthy note,” Sellers said.

Coca-Cola Coca-Cola is currently running an ad in New York’s

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deserted Times Square that shows each letter of its logo separated with the slogan “Staying apart is the best way to stay connected.” The brand typically celebrates togetherness and love in its ads.

Audi and Volkswagen Two automotive companies that share ownership, Audi and Volkswagen, tweaked their logos for their social media accounts.

Audi separated its four rings in a short video telling people to stay at home and keep their distance.

Volkswagen also promoted a similar video with @Businessdayng

inspirational messages and separated the V and W. Nike Nike didn’t tweak its logo, but it launched a large social media campaign with its global roster of star athletes including NBA player LeBron James and golfer Tiger Woods. Sports ground to a halt in the past few weeks because of social distancing rules and the ban on large gatherings, like in stadiums.

The campaign encourages people to play inside.

Nike had to close several of its global stores because of the virus.

24

Thursday 02 April 2020

BUSINESS DAY

ENERGYREPORT Oil & Gas

Power

Renewables

Environment

Oil industry steps-in to stem Coronavirus scourge, rallies round government olusola Bello

O

ne of the things giving Nigerians hope amid the coronavirus pandemic is the prompt response by the Nigerian oil and gas industry which has shown commitment to dousing the impact of the disease in the country as part of its corporate social responsibility.

The oil and gas industry is one of the sectors that is experiencing a devastating effect of the disease globally. Since late last year when the outbreak of Coronavirus disease otherwise called Covid-19, attracted the attention of the world, it has been one long and unpalatable story of human miseries and death on one hand, and economic devastation on the other hand.

The death toll from the disease is in thousands, and still counting in Italy, the United States of America, the United Kingdom (UK), France and Spain. Other countries are not spared from the human gloom occasioned by the pandemic, with Nigeria, South Africa, among other African countries, having recorded deaths of their citizens.

Mele Kyari (r), group managing director, NNPC inspecting some of the items donated for mitigation of Coronavirus

Nigeria has been having its own share of the tragedies occasioned by the disease.

For instance, there are two cases of reported deaths from the disease and about 121 confirmed cases of those that have proved positive for coronavirus.

On the economic side, the country has not been able to sell many of its crude oil cargoes because industries across the globe are down.

More worrisome is the fact that the price of crude oil is now as low as $23 per barrel

this week.

The pandemic’s direct impact on Nigeria’s revenue potential, according to the Atlantic Council, an American Atlanticist think tank in the field of international affairs, is that COVID-19 would cause the country to suffer the biggest loss in the continent with $15.4bn, representing about 4 percent of the nation’s GDP This means that all the deepwater projects and other projects onshore proposed by both international oil and independent companies slated

for sanctions would have to be put on hold and this is not too good for the country’s economy. That is why the collective efforts of the Nigerian Petroleum Industry to support the Federal and State governments to curtail the spread of Covid-19 pandemic in the country is most welcomed One is therefore not surprised that the oil and gas industry has come with a helping hand to rescue Nigerians from the scourge of the disease by donating

Nigerian gasoline price review to N125 and pursuit of fuel subsidy removal Olusola Bello

T

he announcement of a N20 reduction in the price of Petroleum Motor Spirit, PMS has received mixed reactions across the country. For the petroleum industry which will feel the wider impact, it has come as a big break for the downstream marketers in the country.

Taking a deeper look at the recent announcement by the Ministry of Petroleum Resources, the policy gains is subject to the government retaining a free market, by setting gasoline pump prices in line with prevailing global oil prices.

According to FBNQuest Research, despite this policy move, an immediate boost to product sales volumes in H1, 2020 is not likely due to the impact of the global coronavirus pandemic, which will affect social, religious and economic activities in major Olusola Bello, Team lead,

cities such as Lagos.

In context there are indications that there will be increased petroleum importation activities by marketers, following the recent official figures that shows Lagos accounting for 55 percent of national gasoline consumption in the country. The organisation said the Federal Government will have to take a bold decision when the global economy restarts and oil markets strengthen. There are two options which are; either to continue with the price modulation or revert to the subsidy regime.

It is understandable that the government’s new found flexibility is driven by rapidly declining global oil prices resulting from the health pandemic and an ongoing dispute between two of the world’s largest oil producers Russia and Saudi Arabia.

Going strictly by the FG’s statement, FBNQUEST said, it could be inferred that we have seen the last of gasoline

Graphics: Joel Samson.

subsidies. “Nevertheless, we recall that a similar price modulation mechanism was introduced in 2016/17 when oil prices were also subdued.

Subsidies were subsequently re-instated as prices increased”.

Key takeaways from the structural adjustments to the gasoline price the firm said are: • Market forces will henceforth determine the price of all petroleum products; • Pricing bands will be determined by the Petroleum Products Pricing Regulatory Agency (PPPRA) and will be disclosed every two weeks and • All marketers are now allowed to import petroleum products, ending the Nigerian National Petroleum Corporation (NNPC’s) monopoly.

Yesterday’s announcement was a follow on from a -14% (or N20/litre) reduction in gasoline pump prices to N125/l the day prior.

While there is hope that global efforts to control the

www.businessday.ng

spread of COVID-19 yield favorable results in the short term, the timing on a resolution (if ever) of the RussiaSaudi Arabia row is harder to call. There are indications that OPEC+ might be irreparably broken which could potentially result in relatively lower oil prices beyond this year. The next OPEC meeting is scheduled to hold on the 9th of June, 2020. Therefore, it is very likely that oil prices will remain subdued at around US$30/barrel levels in H1 2020.

Under this scenario, the FG’s resolve to maintain the newly introduced marketdriven pricing regime will likely not be tested as the expected market price for gasoline should comfortably remain below the previous N145/1 pricing ceiling, all things being equal. It is also important to note that the present situation could change quickly and as such to not totally write off the possibility of an emergency OPEC+ meeting before June, 2020.

money and materials to help stem down the spread of this deadly disease. This is one of the highest level of Corporate Social Responsibility by the industry to its host community.

Led by the Nigerian National Petroleum Corporation ( NNPC) the industry made a donation of about N11 billion.

The joint intervention initiative will assist the government in equipping isolation centers across the country and providing ventilators, test kits, coveralls, medicines, ambulances and other essential medical supplies.

Mele Kyari, group managing director of NNPC who led the team said in recognition of the impact of Coronavirus (COVID -19) pandemic on the Nigerian population and the economy, the Nigeria Oil and Gas Industry embarked on an Industry-wide collaborative initiative to support the effort to combat the pandemic and its attendant impact.

“The intervention initiative is in alignment with the on-going Federal Government’s efforts and in collaboration with the NCDC to curb the pandemic. It is aimed at supporting our national healthcare delivery facilities and covers three key thematic areas: Provision

Ibadan Disco assure customers of uninterrupted services

I

badan Electricity Distribution Company (IBEDC) has re-stated her commitment to ensure regular power supply in the event of a national shutdown due to COVID-19 in Nigeria.

The Distribution Company says its statutory duty will not be crippled by the pandemic as the management is prepared to service its esteemed Customers through various online platforms for payment, vending of power and resolving customers’ complaints.

The Company in its bid to help prevent the spread of COV-19 is scaling down people presence in business locations to limit physical interaction between employees and customers until the situation improves.

The management par-

Email: energyreport@businessdayonline.com, Tel: +234-8023020011

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of medical consumables; Deployment of logistics and in-patient support system; and Delivery of medical infrastructure. The three thematic support initiatives amount to USD30million (N11bilion naira) and will be delivered in phases, starting today,” Mele Kyari said.

The increasing demand for medical services, medical consumables covering testing kits, medical protective suits and ambulances to the highly impacted areas across the federation informed the intervention of the Oil Industry.

The NNPC helmsman added that as a responsive and responsible Industry, the Oil and Gas Industry is taking this action to strengthen the collective national resolve to stem the pandemic.

Aside from the industrywide coordination, the NNPC on its own has contributed some strategic and essential medical equipment which it handed over to the University of Abuja Teaching Hospitals in Gwagwalada, the Federal Capital Territory.

Other individual companies that have contributed towards arresting the scourge of the disease includes: AYM Shafa Limited, N50 million and Famfa oil and gas which also donated about N1billion.

@Businessdayng

ticularly instructed all Customer Relationship Officers, Commercial Line Workers and any other employee that interfaces with the customer to stop their activities immediately until they are well equipped to handle the situation.

Similarly, Gloves, hand sanitizers and medical masks have been distributed across its franchise to ensure the safety of all the staff on essential duties who cannot work remotely.

This is to further reduce physical contact in order to comply with the social distancing prevention protocol.

Thursday 02 April 2020

Innovation

BUSINESS DAY

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

25

TECHTALK

Broadband Infrastructure

Bank IT Security

Why Nigeria’s off-grid space struggles to keep lights on FRANK ELEANYA

D

espite the opportunity Nigeria’s endless power generation problem represents for alternative sources of electricity, the country still wallows in darkness in a twenty-first century in which peers are exploiting renewable energy to grow power generation capabilities.

While Morocco has diversified its energy sources with 35 percent of the country’s electricity generated from renewable energy at the end of 2018, Nigeria still struggles to barely keep its national grid working while doing too little to leverage it’s abundant renewable energy resources.

Despite having an installed generation capacity of 12,500 megawatts generated

by GenCos, Nigeria currently generates less than 4,000 megawatts of electricity from its national grid.

In recent times the government has stepped up its discussions on exploiting renewable energy sources. A part of this effort is the target by the Nigerian Electricity Regulatory Commission (NERC) to generate a minimum of 2,000MW of electricity from renewables by the year 2020.

However, experts say the country has a better chance of reaping the benefits of renewable energy by actively encouraging the involvement of start-ups.

Start-ups in solar energy have a combined installed capacity of about 57,000 megawatts of solar energy according to dataonre.powerupng. com.

Lagos, Nigeria’s largest city and the centre of its commercial activities, has 213 solar panels spread across the state says Mukhtaar Tijani, general manager Lagos State Electricity Board (LSEB) which was

established in 1980. The solar panels are mostly powering the traffic lights in the city.

So why are start-ups unable to reach their full potential in a country with humongous energy needs?

Substandard products To start with, the influx of substandard products leaves many clients with bad experiences. Beyond having disgruntled clients, the substandard products hinder the perception and adoption of renewable energy.

“We can’t be allowing just any kind of batteries or PV module into the Nigerian market. This thing is creating distrust or discrediting the renewable energy industry,” said Ernest Akale founder of Electric City Energy, a renewable energy company located in Abuja.

Tunde Oyeledun, a renewable energy vendor also said he is petrified when after installation, a client calls.

“My mind goes straight to battery failure even before picking the call,” he said via a tweet.

Ad e t ay o Ad e gb e m l e, founder of PowerUp Nigeria, a renewable energy advocacy group, told BusinessDay that the influx of substandard products has been a problem

since the beginning of the market.

But it is not all gloom for the sector.

“Efforts of key notable drivers, namely Heinrich Boell Foundation, who laid the foundation for the Renewable Energy Association of Nigeria, then later, the Rural Electrification Agency (REA) under the leadership of Damilola Ogunbiyi, have actually changed the direction of the

Sector,” Adegbemle said.

However, more work still has to be done on standardisation of solar energy products that come into the country, especially batteries and solar panels.

Absence of a cohesive legal framework Although NERC is the overall regulator of all electricity generating entities in Nigeria, the Rural Electrification Agency (REA) and the

Nigeria Renewable Energy Round-table (NiRER) are the most visible in the off-grid space.

REA is an agency of the government with a mandate to promote access to electricity in rural communities which means its functions are limited to companies working on projects in these communities. This has partly fueled the perception that renewable energy is mainly for rural communities.

NiRER is merely a coalition of stakeholders within the off-grid space. Its activities and decisions are limited and binding only its membership.

NERC has on several occasions issued guidelines for the off-grid space but operators are concerned that these policies are not far-reaching enough partly because they lack the force of law. This also affects the extent to which the regulators can enforce standardisation.

“We need regulators that would test every product that comes into the country to ascertain it is up to standard, before being sold to the general market,” Okereke Chukwunonso, founder of Innovate Energy, told BusinessDay. “We also need solar engineers and companies to get certified or get a license before they can operate because there are a lot of companies that don’t know what they are doing.”

NiRER had in February set up the NiRER Committee of Experts on the Development of a Renewable Energy Bill.

The bill is yet to be submitted to the National Assembly for consideration.

Beyond getting the bill to become a law, experts also want NERC to review the mini-grid regulation to enable more developers to participate in the sector, and the RoI insured.

Poor access to funding Despite the fall in the unit

cost of renewable energy products globally, due to increased mass production, in Nigeria start-ups still struggle with mobilising finance from investors to scale their operations.

Less than three start-ups received funding above $1 million in 2019, the same period when the technology ecosystem in Nigeria outpaced their peers in Africa in terms of investments.

Various funds from institutions such as the Africa Development Bank (AfDB), Nigeria Energy Access Fund (NEAF), Climate Investment Fund and the Bank of Industry (BOI) have been set up in favour of businesses in the space.

Despite the existence of these funds only a few start-ups are able to access them.

Some founders told BusinessDay that access to the funds is usually cumbersome and information regarding the funds and the vetting process is insufficient, hence the reason a few start-ups have repeatedly accessed them at the expense of the larger pool.

“Funding organisations like AllOn Energy, USAID, PowerAfrica and the likes should actually focus more on the objective of getting funds across to developers and ideas that can actually work. I will also say it is foolishness to fund a $1 million project, and not able to use $10, 000 to ensure you advocate and get good policies out there, Good policies are meant to insure your investments,” Adegbemle said.

Finally, data about the space is still warehoused in silos, so it is making it difficult to assess exactly what impact the advocacies and fundings have been having on the sector.

“This is what DataOnRE is hoping to solve, so we can actually run/have a full business intelligence overview on the Sector,” Adegbemle said.

Seven health start-ups win #COVID19InnovationChallenge by Ventures Platform FRANK ELEANYA

S

even health startups have successfully made it through the #COVID19InnovationChallenge and have been selected by Ventures Platform and Lagos State Science and Research and Innovation Council (LASRIC) to develop solutions to mitigate the rapid spread of COVID-19 in Nigeria.

For winning the challenge, the startups will receive a $2,000 grant and opportunity for further funding, as well as access to virtual workspace and mentorship

from some of Africa’s top healthcare, business and technology leaders to help scale their company.

The seven were chosen from 500+ applicants who submitted applications over 6 days. Ventures Platform, and its judging panel that comprised members of the VP team, representatives of the Nigerian Center for medical practitioners, selected the top 33 projects and startups to move to the next stage. Due to the urgency of the COVID-19 pandemic, the top 33 were emailed to submit a video pitch and 15 projects were selected to pitch virtually to

a panel of seasoned judges rather than in-person pitch.

The final seven are: Wellvis Health offers solutions that promote primary care; by improving the health of the public through continuous access to personalized health information. It was founded by Wale Adeosun. Prunedge a technology company that develops innovative solutions to improve the efficiency of processes, the livelihood of people and aid decision making within organizations. It was founded

by Joel Ogunsola.

Infodemics uses existing social hierarchies in a

community to efficiently and effectively communicate health risks. It was founded

by Nestor Inimgba.

Wellahealth a digital triage bot that provides guidance based on Nigeria Centre for Disease Control guidelines and logs responses for follow up by public health as needed. The founder is Ikpeme Neto. MyServiceAgent - an AI-powered intelligent IVR system founded by Mayowa Ayodeji that can communicate with 100s to 1000s of callers simultaneously and intelligently and disseminate correct information from the Nigeria Centre for Disease

Control as well as pass on the data to the NCDC to act on swiftly.

Innover Technologies - the startup founded by Okorie Tochukwu is committed to using technology to solve problems. Their solution for the project is named COVID-19 Nigeria.

CmapIT Analytics a GIS and Data Visualization software that helps to analyze geospatial data and its variables and also visualize it; data variables concerning the coronavirus outbreak and how it can be tracked & visualized so that predictions are accurate. It was founded

Team: Frank Eleanya, frank.eleanya@businessdayonline.com; Caleb Ojewale, caleb.ojewale@businessdayonline.com www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

by Abiri Oluwatosin Niyi.

Ventures Platform opened applications for their #COVID19InnovationChallenge to find, support, fund and grow products and services that could potentially help millions of Africans through this pandemic.

The 5-day Bootcamp is intended to help the selected founders and startups work with selected stakeholders to finalize solutions and launch.

NCDC will give selected startups an accurate understanding of the real-time situation and will work with the startups to ensure they make the most impact possible.

26

Thursday 02 April 2020

BUSINESS DAY

Garden City Business Digest Highbrow areas and PHED’s steady power supply experiment • Residents spending N78/kw/h on gens may gladly embrace N60 instead of current N33 Ignatius Chukwu

T

he Port Harcourt Electricity Distribution Company (PHED) has concluded plans to supply 24-hour power to some dedicated clusters under a project that may kick in soon.

The scheme called ‘Project 24/7’ would select one area in each city and would require two different levels of power purchase agreements to pull off the project.

The first step is said to be to get the consent of the dedicated highbrow residents for the steady power supply and the amount they would likely want to pay. This may embolden PHED and their partners to secure power from independent suppliers and channel it to the dedicated areas.

The first of such meetings took place at the Hotel Presidential in Port Harcourt last week targeting the Government Reserved Area (GRA) Phase Two which covers the Hotel’s. A presentation that seemed to give insight into how power supply works was made by Ernest Edga, Team Lead, Project Management Office (PMO) of 4Power, a partner to PHED.

Independent power is a must for steady power supply Let independent power come in to rescue inadequate supply problems in Nigeria.

In Port Harcourt, we have designed an experiment called Project 24/7 (meaning supply of power 24 hours a day). We want to experiment with GRA Phase 2; the Presidential Hotel Area). This is targeting critical mass such as GRAs. If it works, others may follow.

Tariff: Port Harcourt people are paying N33 per kilowatt/ hour at the moment. This may go up N50 and then to N66. By our calculations and investigations, supplying self through generators is average

of N78. So, we want to meet each other half-way: we supply you steady power but at a price higher than normal but not up to cost of self-supply.

On the part of the PHED, it is going to be a major investment because we will sign a power purchase agreement with the supplier to pay what we lift unfailingly. We must thus reach an understanding (or deal) with the cluster (GRA 2) to pay what we agreed with them. This is the way it works.

We want to bring in an independent power supplier and use TCN as back up. We want to have a model in each city where we operate. We

also have the estate option.

Residents will register as an association (cooperative) and come and sign a power purchase agreement (PPA) with us.

Cost is the tricky one We are conscious of the fact that if our cost is higher than self-power cost, they will take us out. Our target is 21,000 customers. Note that the public power supply situation in Port Harcourt may get worse because NLNG headquarters and the NDDC headquarters are all coming in. They will shake the power system, though NLNG is however on independent system.

Some of the residents wel-

comed the scheme and called it a good initiative but said the price would decide. They said big companies in the marked area may easily afford the high tariff but that many others may not afford to pay. Some asked to know why Lagos people paid less than Port Harcourt people.

Reacting, Edga used the case of Madogo in Lagos versus Port Harcourt.

He went on: In Lagos, I pay N26 per kw/h and it may soon rise to N49. Average bill for PH residents’ category will soon be about N60. Many wonder why Lagos is cheaper.

This is because what it takes to service 1000 households is far cheaper there. One pole serves many people.

But PH has issues. You need about 13,000 transformers to service the city. You will find that 33kv serving communities that won’t pay.

Lagos has high density and so pay lower tariff but Niger Delta has the highest tariff.

About 86 per cent of Niger Delta consumers is made up of residents (that are to pay lowest rates by law) while Lagos has 66 per cent. There is also heavy unproductive use of power in the Niger Delta.

Pleasure (such as watching television/cable) does not pay the bills.

A nearby state is courting us (4Power Company, a partner in the PHED) to come. They are bringing in 35 companies but they need steady power. The problem is that it is difficult to get certain factors right. We are looking beyond N60 for Project 24/7.

People say Bonny people do not pay for light, but they forget that the NLNG and other companies are under ambush to supply power there free.

They are groaning but the community is like holding them hostage. Some of the companies there are looking for a way out. They may adopt phased withdrawal.

Discos in distress Discos are not making money but losses. Government is still subsidizing power.

The grid is the issue. Power silos system will help. If you deregulate completely, investors will come.

Akwa Ibom State governor, Emanuel Udom, is building two plants in the communities.

The plants must not be hooked to the grid. The state wants to break away from the national grid and hand over to private discos. Its like they are not being paid for power supplied to the grid and they are also not getting power to their people.

The deal will soon come on stream.

Gov Wike; soldiering against COVID-19, now looking at palliatives Port Harcourt

by Boat

IGNATIUS CHUKWU

G

ov Nyesom Wike of Rivers State is one of the governors after Lagos that took string measures to wage war against any COVID-19 virus penetrating into the state. Apart from encouraging people to wash hands, sanitise and keep social distances, he followed by shutting down the boundaries of the state. This was seen as extreme measure, but he explained his reasons.

He also set up a committee on massive awareness led by the Commissioner of Information and Communications, a pastor, Paulinus Msirim, who swung into action, organizing series of trainings for different sectors of the Rivers community including the media. The governor’s network stopped a positive person from flying to PH from Abuja.

Soon, as expected, the virus spill found space to penetrate the Wike gauze. A 19-year-old model was declared positive after visiting some

cities of the world. This created news fears. The governor realized that his protocol had been breached.

The shutdown of boundaries created panic.

Many visitors to PH rushed to leave the state before 6pm of Thursday last week. Thereafter, travellers began massing at the boundaries especially Abia and Bayelsa boundaries. Goods and food items coming into the state were halted. This caused panic and alarm.

Next, the governor shut down all markets in the state from Wednesday last week. The resolve of the government was tested with the famous Oil Mill Market that attracts traders from other states and most of Niger Delta. This, too, created another level of panic.

Each day, the governor issued fresh broadcast which heightened anxiety but seemed to bring the people to the full consciousness of the risks at hand.

When the people seemed not to get it clear into their heads that war was at hand, the governor struck. He suspended a local council chairman that did not act fully. He announced curfew in busy Diobu, Obiri-Ikwerre areas, etc.

Now, the people understand its war.

The governor updated his curfew later on Tuesday, March 31, 2020, thus: “This is to inform members of the public that the curfew imposed at Education Bus Stop to Agip Junction, Ikwerre Road and Obiri Ikwerre Junction to Ozuoba, Rumualogu and Choba is for 24 hours with effect from today, March 31,2020 till further notice.”

The governor was however urged to march bans with palliatives. He responded. Now, food corridor has been created to allow food pass.

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Market centres to be created. It was learnt that March salaries have been paid.

The masses expect more palliatives such as food centres to help the poor and stimulus to vulnerable persons but the his media aide, Simeon Nwakudu, says: “With the Presidential address, Governor Wike has been vindicated for taking very profound steps to protect Rivers people. Agreed, the steps are tough, but it is for the good of Rivers people. Nothing is perfect, but steps must be taken to check the spread of coronavirus.

“Several other states have emulated Governor Wike by shutting their boundaries to visitors.

With the Federal Government taking it a notch higher for FCT, Lagos and Ogun States, those who eke out a living by insulting Governor Wike

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will continue to have sleepless nights.

“If the developed countries with their facilities and medical proficiency are working hard to check the spread of coronavirus, then that is simply the way to go for now.

“Those who post pictures of bags of rice, tintomatoes, groundnut oil, hospital beds and tents as the ultimate are merely enjoying ephemeral benefits. The only medicine for now is to protect the population.”

Wike’s most biting action came in the Monday March 30 broadcast; Excerpts; Following the violation of the market closure order, the Rivers State Government has imposed a dusk to dawn curfew on Obiri-Ikwerre Junction( Ozuoba, Rumualogu) to Choba and from Education Bus Stop to Agip Junction .

In a Broadcast on Monday, Rivers State Governor, Nyesom Ezenwo Wike said that the State Security Council reached the decision after it monitored compliance with the State Government’s directive.

He said: “With effect from Tuesday March 31, 2020 there will be a dusk to dawn curfew from Obiri-Ikwerre Junction( Ozuoba, Rumualogu) to Choba and from Education Bus Stop to Agip Junction, Ikwerre Road .

“All beer parlours and public drinking joints are hereby closed because they have suddenly become an extension of night clubs that were earlier shut down.

“Any beer parlour or public drinking joint found to be open shall be acquired by the State Government.

“All landlords are advised to warn their tenants who use their property as beer parlours or public drinking joints to adhere to this directive.

@Businessdayng

Thursday 02 April 2020

BUSINESS DAY

27

Investing in Rivers State

Gov Wike happy with churches on compliance •But APC chieftain says virus has exposed the state govet on health Ignatius Chukwu

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ov Nyesom Wike of Rivers State has expressed appreciation to the Christian faithful across the state for complying with the directive of maintaining social distance during the first Sunday after the order on church service to check the spread of coronavirus.

Addressing journalists after he led the Task Force on enforcement of the ban on public and religious gatherings to monitor compliance on Sunday, Gov Wike said that the churches ensured that each service had about 50 worshippers as agreed during the meeting at Government House, Port Harcourt.

Governor Wike, accompanied by the Service Commanders, monitored compliance at the Saint Thomas Anglican Church, Mile Two Diobu, Saint John’s Anglican Church, Rumueme Deanery, Saint

Peter’s Anglican Church, Rumuepirikom Deanery, Holy Trinity Anglican Church, Rumuapara District, Abundant Life Evangel Mission Cathedral. All of these were in the city, though the local councils are to monitor at local levels.

They also monitored compliance at the Saint Andrews Anglican Church, Rumuobiokani, Saint Michael’s Anglican Church, Rumuomasi Deanery, the Eternal Sacred Order of Cherubim and Seraphim, Mount of Grace, Elekahia, Saint Barnabas Anglican Church, Elekahia Archdeaconry, Saint Paul’s Cathedral, Diobu.

The team moved through Corpus Christi, Port Harcourt, Living Faith Church, Kaduna Street, DLine and Churches on Aggrey Road in Port Harcourt. All the churches visited had running water, soap and hand sanitizers to disinfect worshipers before and after service.

Governor Wike said: “The compliance is very much appreciated, except for two churches that did not

Governor Nyesom Wike

completely comply; Saint Thomas Anglican Church and Holy Trinity Rumuapara.” BusinessDay also gathered that the team stormed at church at Elimgbu area near Rumukwurushe, but the governor said he had told the implicated churches not to tempt him into shutting them down.

He went on: “In all, we are satisfied with the total compliance. That shows that the people appreciate what we are talking about. For us, the safety of our people remains key. We are happy today.”

Meanwhile, a critic, media consultant and chieftain of the All Progressives Congress (APC), Eze Chukwuemeka Eze, does not seem to be impressed by all that the state government has done.

Eze said Wike’s actions were full of orders and bans without a single palliative or help to the people. He questioned the absence of salaries to workers, palliatives, test kits, etc.

He called for donation of salaries of Wike and his aides to show example.

Eze said: “The state does not have any Covid-19 test centre and most sadly, without any organized or strategic framework to enable residents who are symptomatic or asymptomatic or those who are reasonably suspicious of coming in contact with any case or suspected case to present themselves for test.

Nonetheless, the governor hurriedly embarked upon a complete lockdown without any consideration for the above factors and this simply portrays him as grossly flippant in the administration and welfare of the good people of Rivers State.”

Saying he supported stay at home order, Eze opined that it is grossly irrational and conspicuously suicidal for Gov. Wike to order closure of markets and other places of bazaar without first putting into consideration the effects of the implementation of such directive on the citizens especially, the poor of society.

DPR orders oil firms to reduce offshore workforce

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gainst the backdrop of the spread of the coronavirus pandemic in the country, the Department of Petroleum Resources had directed oil and gas firms to reduce the workforce on offshore platforms.

All travels to and from offshore/ remote locations shall strictly be in line with the guidełines and procedure for travel to offshore/ swamp location and obtainment of offshore safety Permit 2019, the

Director, DPR, Sarki Auwalu, said in a circular.

He said only staff on essential duties should be nominated and permitted to travel to offshore/ remote locations.

Auwalu said, “Non-essential staff current(y at offshore/remote locations should be withdrawn with immediate effect. Staff rotation less than 28 days/28 days is hereby temporarily suspended.

This implies that staff are rewww.businessday.ng

quired to stay a minimum of 28 days at these locations per rotation.” According to him, Sections 4.3 and 4.4 of the guidelines still apply.

Auwalu said, Representation by government agencies at offshore/ remote locations shall be limited to a maximum of one person per rotation. “You are to ensure strict compliance with the above while we continue to monitor the situation and provide updates as required.”

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RIWAMA Sole Administrator appeals to service providers to step up action to reduce spread of virus

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he Sole Administrator of the Rivers State Waste Management Agency (RIWAMA), Felix Obuah, says the Agency is challenged by the circumstance of the period

Felix Obuah

more than ever to step up action and has ordered that the Service Providers rise up to the demand.

Obuah noted that being in forefront of the relentless efforts of the State governor, Nyesom Wike, to ensure that the checkmate of the coronavirus pandemic is watertight, all Service Providers must work round the clock to rid all nooks and crannies of the State of any refuse dump.

He said for no reason will any Service Provider be found wanting this time, stressing that the sit-at-home and or curfew order by the state government exempts all workers on essential duties including the Service Providers and their workers.

The RIWAMA boss reminded Service Providers of the high need of their services this time, and urged them to ensure that their drivers and workers wear protective gears.

Business owners in Rivers cry out Sam Esogwa

T

he closedown of markets in Rivers State by Governor Nyesom Wike as part of measures to check the spread of corona virus may be a step in the direction for some residents, but for business owners, it is a bad omen or what is generally referred to in local parlance as “bad market”.

This is because they are finding it difficult to make sales now unlike in the past, coupled with the high cost of food stuff and its scarcity.

On Saturday, when the markets in Port Harcourt officially closed down, in line with the Rivers State governor’s directive, the few business owners who opened, such as canteen operators, shop owners, filling stations and fruit sellers in Diobu, usually a busy area, complained of poor sales and patronage as majority of the residents stayed back in their homes due to the covid-19 scare and shutting down of markets.

Charles Onyenyirionwu, a shop owner in Mile 3 who sells household items, said the situation did not only affect him but also affected all the sectors, adding that the people are suffering for a strange disease they did not know anything about.

“It is not affecting me alone but everybody. You can see the road, everywhere is dry. As you can see, @Businessdayng

some even still travelled today.

And they’re complaining that they don’t know when they (government) will open the market. This issue of corona virus, I don’t know what is corona virus. It’s only God that knows what is corona virus and what is the sickness,” he said.

Charles said although he is not angry over the situation, the government should have tried to help the poor masses with relief materials or money to cushion the effect of the market shutdown.

He said: “I will not be annoyed about the government shutting down the market and whatever.

It’s for our own good and benefit.

Some people are not happy as government shut down their business and the market because they did not even bring anything to help the poor masses. The big men, it doesn’t concern them, even if you shut down everything. The government should find a way to help the people.”

A canteen operator, Madam Rose, also lamented over the effect of the market shutdown, adding that she did not make any meaningful sale on Saturday due to absence of people. She said the high cost of food stuff on Friday made things more difficult for them.

Another canteen owner in Diobu, Caroline Okike, confirmed the adverse impact of the lockdown of Mile 3 market, which she said made many of her customers not to come out. She said prices have gone through the roof.

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Thursday 02 April 2020

BUSINESS DAY

feature

World Autism Awareness Day Challenges of COVID-19 on autism community, caring for the child and keeping hope alive

Kemi Ajumobi

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hen Nwanze Okidegbe’s son was diagnosed with Autism at the age of two and half years, he was in denial. Nwanze, who was former Chief Economic Adviser to the President of Nigeria in July 2011, thought that he would outgrow his son’s diagnosis and continued to hope for change. However, though residing in America, with passing years of medical interventions and research, he came to the realization that it has no cure and that he could not wish it away. That realisation was followed by acceptance and the desire to do something about it. Hence the birth of the foundation, Ike Foundation For Autism (IFA), where he is President and Founder.

“The reason why I started the Foundation is two-fold. First, is to increase the awareness of autism in Nigeria and eliminate the stigma associated with it while providing services to autistic community that improves their quality of life. Second and most important to me is to use my family as a source of hope and service to others.” Nwanze said.

According to the Centers for Disease Control and Prevention (CDC), Autism spectrum disorder (ASD) is a developmental disability that can cause significant social, communication and behavioral challenges. The learning, thinking, and problem-solving abilities of people with ASD can range from gifted to severely challenged. Some people with ASD need a lot of help in their daily lives; others need less.

In Nigeria, a study found 11.4% children with ASDs according to diagnostic criteria for childhood autism, and 51.2% of children demonstrated a lack of expressive language in cases of ASDs in the age group researched.

Sadly, Nigeria does not have a policy in place for neurodevelopmental disorders; perhaps because the figures aren’t adequate because many parents are in denial or some prefer to keep mute on the issue as they prefer that no one is aware they have a special needs child.

Today, being World Autism Awareness Day (WAAD), the idea is to put a spotlight on the hurdles that people with autism and others living with autism face every day. Thanks to WAAD, activities are planned every year to increase and develop world knowledge of children and adults who have ASD. That is not all, World Autism Awareness Day goes one step further to celebrate the unique

talents of those with autism, while putting a huge focus on the warm embrace and welcome that these skills deserve through community events around the globe.

Nurturing a special needs child isn’t easy however, most of the parents of such children have often summoned up courage to pull through.

“I give all the credit to my wife. She had to give up her successful career as a Pharmacist to nurture him and take care of his other siblings. Taking care of an autistic child is not a walk in the park. It is very demanding.” Nwanze said adding that “There is also a danger that all attention is given to the special needs child at the expense of the siblings. I cannot describe how she managed and continues to manage it but it takes a toll” Said Nwanze.

According to Okidegbe, “Autism is a spectrum and no two persons on the spectrum are the same. What works for one person may not work for the other.

It has no cure but it is treatable.

Some are high functioning while some cannot lead independent lives. One commonality is that, most persons within the autism spectrum have communication and behavior challenges.” He explained.

“Early interventions for children with Autism Spectrum Disorders have been documented to positively influence prognosis. So, identifying the symptoms of Autism in early years and instituting intervention, improves the educational and vocational opportunity for individuals with Autism.”

Muideen Owolabi Bakare, Chief Consultant Psychiatrist (Consultant Special Grade 1), Head, Child and Adolescent Unit, Fedwww.businessday.ng

eral Neuro-Psychiatric Hospital, Enugu, told BusinessDay in an exclusive chat.

He said that this ultimately leads to an opportunity to contribute to economic development of their community, with appropriate policies in place that can mitigate discrimination of the patients and the parents and promote community inclusion.

According to Bakare, “The advantage of caring for children with Autism is that it helps them to get involved in community participation, contributing their own quota to development of their community, rather than being a persistent burden and source of drain to the community resources” It is sad to know that there have been various misconceptions about children with special needs.

Muideen says it has been documented that knowledge and awareness about Autism is largely limited in sub-Saharan Africa. Usual areas of misconception are the etiological or causative factors that are almost always attributed to spiritual origin like witchcraft among other obnoxious belief.

“This affects the help seeking behaviour among the parents and relatives, seeking spiritual interventions from traditional religious practitioners and the relatively new religions of Christianity and Islam. Exorcism, making sacrifices often include the types of interventions often sought before coming in contact with orthodox practitioners, leading to late intervention and poor prognosis.” He said.

Following the same line of thought with Bakare, in another exclusive chat with BusinessDay, Kure Hajara, Senior Registrar in

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‘

In Nigeria, parents with autistic children are on their own. There is little or no help from the government and those parents with limited means leave their children to waste

Paediatrics at the National hospital, Abuja says “The care for an autistic child is nearly as important as the care for any child with any chronic illness. This is because an autistic child is a child trapped in his own world and finds means of communicating with the external world which is in turn interpreted as abnormal behaviour.

So, it’s our duty as Physicians to lead them through life by communicating and understanding them, guiding them through task with specific tools and helping parents with specific skills to be able to cope with the stress.” Hajara advised.

Sadly, the burden of COVID 19 is upon us and special needs children cannot be ignored.

Muideen explains that parents with children with autism should equip themselves with @Businessdayng

information about COVID-19 such as modes of transmission, simple preventive strategies such as good hygiene, like frequent hand washing, social distancing and avoiding crowded environment.

“Extra caution needs to be taken to ensure the children with Autism engage in frequent hygienic practices at this period, limit hospital, church and other visits as much as possible this period and ensuring the children are within the watch of the parents.

They should keep in touch with their doctors and other professionals through phone or other IT consultations. They may want to engage the children in learning through electronic media like Tablets and computers at this period in lieu of physical presence in school or vocational environments.”

Muideen recommended.

For Nwanze, “COVID-19 is particularly difficult on autism community. Many children on the autism spectrum are very hyperactive and always in motion. That makes it difficult for parents to keep them confined in the house. Parents will have to find out the activities that their children like and try to engage them with such activities.

I want the parents to know that they are not alone. IFA is always searching for and sharing activities that parents may consider for their children. We are in it together and this phase will pass. Do not lose hope. God will give us all the strength to soldier on.” He said.

On the need for government’s intervention, Nwanze says “In the USA where I live, the government provides educational and health services to autistic persons up to the age of 18 years and after that, social security and medicare kicks in for the rest of the autistic persons’ life. The private sector organisations and philanthropists support autism organisations with donations and CSRs.” However, the case in Nigeria is different. “In Nigeria, parents with autistic children are on their own.

There is little or no help from the government and those parents with limited means leave their children to waste.

I will appeal to government to support special needs children and their families. A society is judged by how they take care of the least among them. History will judge us harshly if we do nothing. The private sector organisations provide some support but they can do more. I also appeal to them to increase their support to special needs causes.”

He implored.

Thursday 02 April 2020

BUSINESS DAY

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BUSINESS TRAVEL COVID-19: How to get flight refunds and cancel your tickets for Tokyo Olympics Stories by IFEOMA OKEKE

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he Tokyo 2020 Olympic and Paralympic Games have been postponed until 2021 amid the coronavirus pandemic.

Many who have booked travels to Japan just for the event this summer may well be wondering what their options are and whether they can cancel.

These are the key travel questions and answers.

The second Tokyo Olympics was due to start on 24 July and end on 9 August 2020. The Paralympics were scheduled for 25 August to 6 September 2020.

But the International Olympic Committee (IOC) has announced: “The IOC President and the Prime Minister of Japan have concluded that the Games of the XXXII Olympiad in Tokyo must be rescheduled to a date beyond 2020 but not later than summer 2021, to safeguard the health of the athletes, everybody involved in the Olympic Games and the international community.

“It was agreed that the Olympic flame will stay in Japan. It was also agreed that the Games will keep the name Olympic and Paralympic Games Tokyo 2020.”

Many people have booked through Team GB Live, which is “Team GB’s official travel company” and “the only Authorised Ticket Reseller for Tokyo 2020 in Great Britain”.

All of its packages appear to be Olympics-specific, which means you are now entitled to a full refund of

the trip within 14 days of the postponement being made – which I calculate takes us to 7 April 2020.

The sports travel firm may offer you an alternative trip – typically a guarantee that you can get exactly the same deal for whenever the Games are rearranged – but it is your choice whether to accept this or take a refund (in cash, not vouchers).

If you have booked what amounts to a city-break in Tokyo, which includes flights

and accommodation during the Olympics but not event tickets, it is possible to get some refunds.

Legally, if the travel provider can still offer the trip, then it is free to impose its normal terms and conditions – which are likely to mean you lose some or all of your money.

Many would-be participants in the Tokyo Marathon earlier this month were in this position.

There are four main op-

Air cargo essential to fight against COVID-19

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he International Air Transport Association (IATA) and its members continue to support governments in their efforts to contain the spread of COVID-19. Since the crisis began, air cargo has been a vital partner in delivering much-needed medicines, medical equipment (including spare parts/ repair components), and in keeping global supply chains functioning for the most time-sensitive materials.

This has been done through dedicated cargo freighter operations, utilization of cargo capacity in passenger aircraft and with relief flights to affected areas.

Air cargo is also instrumental in transporting food and other products purchased online in support of quarantine and social distancing policies implanted by states.

The dramatic travel restrictions and collapse of passenger demand have severely limited cargo capacity.

IATA calls on governments to take urgent measures to ensure that air cargo will be available to support the global fight against COVID-19.

“Over 185,000 passenger

flights have been cancelled since the end of January in response to government travel restrictions. With this, vital cargo capacity has disappeared when it is most urgently needed in the fight against COVID-19.

“The world’s fleet of freighter aircraft has been mobilized to make up this capacity shortfall. Governments must take urgent measures to ensure that vital supply lines remain open, efficient and effective,” Alexandre de Juniac, IATA’s Director General and CEO said.

IATA suggests that the governments must see air cargo as an essential part of

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the fight against COVID-19 and take the following actions: Exclude air cargo operations from any COVID19-related travel restrictions, to ensure life-saving medical products can be transported without disruption, ensure that standardized measures are in place so that air cargo can continue to move around the world with minimal disruptions, exempt air cargo crew members, who do not interact with the public, from 14-day quarantine requirements and support temporary traffic rights for cargo operations where restrictions may apply.

IATA also suggest that governments remove economic impediments, such as overfly charges, parking fees, and slot restrictions to support air cargo operations during these unprecedented times.

“Air cargo carriers are working closely with governments and health organizations around the world to safeguard public health while also keeping the global economy moving. Today, as we fight a global health war against COVID-19, governments must take urgent action to facilitate air cargo.

Keeping cargo flowing will save lives,” said de Juniac.

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tions open to you.

Plan to go ahead with a city break in Tokyo anyway; while it is not what you intended, the Japanese capital is enthralling and will provide a great experience. And you could build in trips beyond the city, using the formidable rail network and the superb-value Japan Rail Pass even to visit the imperial city of Kyoto in a day (nearly 300 miles away but only 2h40m each way on a bullet train).

See if you can persuade the travel company to offer either postponement or a credit note/travel voucher to the value of your trip.

Wait to see if your flights end up being cancelled as a consequence of the coronavirus crisis, in which case you get a full refund.

Cancel your trip now and see what can be recouped after cancellation charges.

If you have booked flights and accommodation separately, you have some rights.

Much the same advice applies as for a package, though it is made more complicated by having two separate bookings, with organisations possibly having separate policies.

Option one above is still recommended – and if (say)

the hotel allows free cancellation but the airline does not, then you could plan a great two-week trip around Japan.

For extra costs, e.g airport parking and hotels in the UK, and additional trips booked separately in Japan, all you can do is ask the providers nicely and hope they will at least offer the chance to rebook.

For those who really want to go to the Olympics whenever they are rescheduled, it is suggested that whenever new dates are announced, there may be a huge surge in bookings for flights, accommodation and packages, with resulting prices far higher than normal for whatever season it happens to be.

Do not get caught up in this wave of demand. Instead, wait until around six weeks before the Opening Ceremony and check out air fares for trips that arrive just after the start and leave either just before the end or a week or two beyond it.

While you will not get a ticket for the Men’s 100m final, you are sure to have great experience and can enjoy events such as the Women’s and Men’s marathons – and quite possibly pick up tickets for other events.

New NANTA president pledges to address challenges of travel agencies in Nigeria

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usan Akporiaye, the newly elected National Association of Nigeria Travel Agencies, (NANTA) has pledged to confront challenges facing its members and come up with effective strategies to address them.

In a statement issued by Akporiaye, she stated, “We must admit that while we have global challenges brought on

by COVID-19. We also do have some pertinent local challenges facing our members and their businesses which we must confront and come up with effective strategies to address.

“In due course the incoming executives shall engage and consult with all of you as stakeholders in order to establish and validate our priorities.

“I will then be articulating these priorities with strategies on how to move us forward.”

She acknowledged the huge challenge to re-access the agencies’ reach and physical engagement process in view of COVID 19 and the impact on global Travel.

She however noted that @Businessdayng

the association is conscious of the pressure to rebound and gain immediate foothold yet determined to guide its members to follow established federal and states governments protocols on COVID 19 and practice safety and social distancing as recommended by health officials globally.

She explained that the association has digitally taken over and all the legal protocols for hand over have taken place overseen by the Board of Trustees.

“On one hand you are assured of continuity because i was one of the outgoing executives of the last administration. On the other hand this is the birth of a new beginning as the incoming exco takes over under my leadership as the 44th President of NANTA. “This statement is to assure you all including our friends and Principals that NANTA is united and in safe hands under my watch,” she said.

She encouraged stakeholders to provide inputs for continuous engagements whether physical or digital.

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Thursday 02 April 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

Banks stand to make billions from US small business rescue

Federal loans will be forgiven if recipients use them to cover payroll and other costs Brendan Greeley and Robert Armstrong

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anks stand to collect billions of dollars in fees on the $350bn in loans that are being offered to US small businesses as part of the federal response to the coronavirus pandemic.

Under the $2tn relief package signed into law by Donald Trump on Friday, the Small Business Administration will offer the loans through banks and credit unions to cash-strapped businesses employing under 500 people.

The full amount of the loan will be forgiven if it is used for payroll, mortgage interest, rent or utilities in the two months after the money is received. Less will be forgiven if the employees are sacked or salaries cut.

Any amount that is not forgiven will accrue interest at a 0.5 per cent rate and the principal will come due in two years, the SBA said on Tuesday as it shared details of its “pay cheque protection” programme.

Banks will receive processing fees, paid by the federal government, for making the loans. The fees will vary with loan size: 5 per cent for loans under $350,000, 3 per cent for loans under $2m, and 1 per cent for loans greater than $2m. The loans will not incur a capital charge.

It is essentially a grant programme that, if the borrower doesn’t use the money to pay their employees, turns into a super-low interest loan Sam Tuassig, Kabbage Borrowers will need to fill out a two-page form and document that they were in business as of mid-February. Lenders will not need to wait for SBA confirmation

Donald Trump signs the coronavirus stimulus relief package in the Oval Office on Friday © AP

before providing cash in hand, as soon as Friday. Businesses will be eligible to borrow the equivalent of 2.5 times their average monthly payroll with a cap of $10m.

“Speed is the operative word,” said Jovita Carranza, the SBA’s administrator. “Applications for the emergency capital can begin as early as this week, with lenders using their own systems and processes to make these loans.”

According to the SBA, there are 30m businesses with fewer than 500 employees in the US, employing 60m people, almost half of the private workforce. The National Federation of Independent Business, an advocacy group, says about three-quarters of its members have been affected by the crisis.

Since the president signed a rescue package, the SBA has been under pressure to release details of the programme. As customers disappear from all but a short list

of essential businesses, business owners have been uncertain about a crucial question: whether to keep their staff on payroll, or release them to collect beefed-up unemployment insurance cheques.

Karen Ginther, who works for the Seattle chapter of Score, an organisation that works with the SBA to mentor small businesses, said one typical email from a business owner came to her at 3am on Tuesday. It asked: “Can you help me make some decisions? I don’t understand how all of this works. I have been learning and taking webinars, reading. I am so confused what the right thing is to do. I don’t want to lose my employees.”

Claudia Sahm, a former research section chief at the Federal Reserve, said offering banks feebased incentives to administer and distribute loans — which function like grants — is a way to make up

for the limited capability of the SBA to administer a programme that senior administration officials say could pull in millions of application requests.

Small businesses “are used to going to their local bank to get loans”, said Ms Sahm, now at the Washington Center for Equitable Growth. This will make it easier for banks to act quickly on existing relationships. It also means the SBA will rely on banks to contact their own clients, giving large banks and favoured clients an advantage.

“It’s great that the government has done this so quickly,” said Wendy Cai-Lee, chief executive of Piermont Bank, a digital start-up bank that specialises in lending to small and midsized businesses.

“The challenge is in the execution.

Banks are still waiting for guidance from the SBA . . . My concern is how quickly we can get the money into the hands of small businesses”,

given that they may struggle with the required paperwork.

Coronavirus business update How is coronavirus taking its toll on markets, business, and our everyday lives and workplaces?

Stay briefed with our coronavirus newsletter.

Sign up here The SBA has also laid out a role for agents, such as attorneys or accountants, who can help prepare documents, and can claim some of the lenders’ processing fee.

Sam Tuassig, head of policy at Kabbage, a fintech that makes small business loans, said: “It is essentially a grant programme that, if the borrower doesn’t use the money to pay their employees, turns into a super-low interest loan.”

Initially, only federally insured banks and credit unions will be eligible to make the loans. Mr Tuassig said Kabbage was eager to participate, but that it remained unclear whether online lenders and fintechs would be allowed to do so. The Treasury’s statement on Tuesday said that “additional lenders” were encouraged to apply to the SBA for approval.

Online lenders are an increasingly important source of capital for small businesses, particularly the very smallest. The Fed’s 2019 Small Business Credit Survey found that a third of small businesses seeking loans applied to online lenders, and that speed of decision making was the key reason for choosing the online lenders.

“We can do what most banks do and do it in a faster way,” Bernardo Martinez, US managing director of Funding Circle, the UK-based online lender, told the Financial Times last week. “We can reach customers that don’t have access otherwise.”

Stocks retreat after worst quarter since 2008 financial crisis Coronavirus outbreak worsens in US and new surveys point to heavy global economic toll

Adam Samson and Hudson Lockett

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new quarter has brought a fresh jolt of volatility to global equity markets, with stocks in Europe and Asia dropping as the coronavirus crisis worsens in the US and pressure on economies around the world mounts.

London’s FTSE 100 dropped 3.7 per cent while Frankfurt’s Dax and Paris’s CAC 40 were down roughly 4 per cent. The Europe Stoxx 600 fell 3.2 per cent and S&P 500 futures pointed to a slump of more than 3 per cent.

The falls, which follow the worst quarter for global markets since the 2008 financial crisis, came after President Donald Trump warned that nearly 250,000 people could die in the US from

Covid-19, and suggest that many investors are not ready to jump back in to risky bets.

Italy and Spain, the two worsthit countries in Europe, have shown some signs of improvement in recent days, as the centre of the coronavirus crisis quickly shifts to the US. “Europe seems to have reached, if not [passed], the peak in new infections,” said Marco Wagner, economist at Commerzbank. “In the US, on the other hand, the situation is becoming more acute.

A flattening of the infection curve is still not apparent.”

On Tuesday, Mr Trump warned Americans of a “very, very painful two weeks” ahead while Anthony Fauci, a top government health official, said people should be prepared for high fatalities.

Coronavirus business update How is coronavirus taking its www.businessday.ng

toll on markets, business, and our everyday lives and workplaces?

Stay briefed with our coronavirus newsletter.

Sign up here The world’s biggest economy, like many others, has already shown severe signs of strain from the lockdowns prompted by the pandemic, with the number of people seeking unemployment benefits shooting late last month to a historic high of 3m.

In a sign of the heavy blow faced by investors globally, the UK’s biggest banks announced after the close of trading on Tuesday that they would scrap billions of pounds worth of dividends under pressure from the country’s top financial regulator.

Bank shares dropped on Wednesday, with HSBC down about 9 per cent, and Barclays, Lloyds Banking Group and Royal

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Bank of Scotland falling about 5 per cent.

Business executives in the eurozone, Japan and South Korea reported a marked deterioration in the factory sector in March compared with February, according to purchasing managers’ indices that are closely watched by investors as leading economic indicators.

Robert Carnell, Asia-Pacific head of research at ING, said Wednesday’s Asia PMI readings confirmed a “grim picture” for manufacturers. He added that “the prospect for most economies’ manufacturing sectors as they head into the second quarter is for even more weakness, exacerbated where lockdown measures are newly enacted or tightened”.

Most Asian markets were lower, with Japan’s Topix down 3.7 per cent and South Korea’s Kospi off 3.9 per cent. China’s CSI 300 @Businessdayng

slipped 0.3 per cent.

The Institute for Supply Management is also set to publish its latest reading on the US factory sector, which is considered to be one of the best forward-looking proxies for the rate of change in US gross domestic product. Economists polled by Reuters expect the ISM gauge to sink to 45 in March from 50.1 the previous month. A reading so far below 50 points to a contraction in the sector.

Global equities had rallied over the last week as investors pinned their hopes on huge stimulus efforts by policymakers and the eventual slowing of the spread of Covid-19.

The yield on 10-year US Treasuries, viewed as a haven during times of market uncertainty, slipped 0.09 percentage points to 0.611 per cent. Yields fall as bond prices rise.

Thursday 02 April 2020

BUSINESS DAY

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FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Coronavirus sell-off leaves investors keeping their distance ‘It’s too late to sell and too early to buy,’ says one fund manager Katie Martin

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any investors still reeling from the brutal first quarter of 2020 are reluctant to believe it is safe to dive back into risky bets.

Key benchmarks including the S&P 500 in the US have bounced strongly since the coronavirus pandemic first tore through markets in late February. Starting from their low point in late March, US blue-chip stocks have soared by 17 per cent.

The rebound is one of the biggest since the aftermath of the Wall Street Crash in 1929, but still leaves stocks down 20 per cent so far this year. The recovery largely reflects the firepower deployed by central banks to calm a financial system that was brought to a sudden halt by lockdowns of cities and countries around the world.

But while calm has been restored, many investors think it simply marks a new phase in the markets’ struggle to adapt to a rapidly shrinking global economy stung by both the virus and a collapse in the price of oil. The violent phase of the adjustment has passed, they say, but the perils to investments have not.

“The way we put it is: it’s too late to sell and too early to buy,” said Kasper Elmgreen, the Dublinbased head of equities at Amundi, Europe’s largest asset manager.

“I’m pretty sceptical of the current bounceback that we have seen.”

The darkest point of the market

The violent phase of the adjustment has passed, many investors think, but the perils to investments have not © AFP via Getty Images

crisis in mid-March resembled the shake-out that many fund managers remember from 2008. Stock indices in major economies were dropping by about 10 per cent each day. The dollar was rattling higher at an alarming speed as companies hoarded greenbacks just like households stockpiled pasta.

Perhaps most concerning of all, the government bond markets started to malfunction, removing fund managers’ ability to hedge against sliding stocks and threatening to tip the financial system into chaos. Large parts of the corporate bond markets were untradeable — investors could not offload their holdings at any price.

“March was like a bomb went

off; two bombs, in fact, with the virus and [the oil shock],” said James Athey, an investment manager at Aberdeen Standard Investments.

“That hit vulnerabilities in markets, but it was . . . not an economic shock.

It was ‘get me out of here at all costs’.”

The picture changed only when governments and central banks unleashed their full firepower at the crisis, promising to help shield business and households from insolvency, to buy financial assets in huge quantities, to pump liquidity into short-term funding markets and to quench the global thirst for dollars.

“Policy responses have saved the system,” said Salman Ahmed, chief investment strategist at Lombard Odier Investment Managers.

The virus is a global health crisis and the efforts to control it — shutting down human interaction and activity — have created an economic crisis. But, Mr Ahmed said, measures to soothe the dollar and the debt markets had prevented this from becoming a financial crisis, too.

“That could have brought the system down, but it has eased,” he said. “When we had moves of 9 to 12 per cent every day, that was not just the virus. A lot of the damage was caused by systemic risk. We could still have 3 to 5 per cent moves, but central banks have tried to make sure this remains a virus crisis.”

A slow grind lower for stocks and riskier parts of the bond

markets may lie ahead. “We are past peak panic, but not yet at peak pessimism,” said Mr Athey.

Companies are cancelling dividends and stock buybacks to absorb the hit to economic growth, which also threatens further debt downgrades and defaults. Bets that some assets are cheap rely on earnings expectations that are now well out of date and subject to unprecedented uncertainty.

The spread of the virus across North America could spark a renewed sell-off. “The market is not priced for the US to be shut down for months on end,” said Mr Athey.

Some investors are dipping a toe back in, including hedge funds seeking to grab what they judge to be bargains. Toby Nangle, global head of multi-asset at Columbia Threadneedle in London, lauded policymakers’ determination “to prevent the public health crisis metastasising into a global financial crisis”, adding: “All else equal, we will be deploying more portfolio risk.”

Upping risk will not be a straightforward job. “We are looking for companies with a strong balance sheet and the liquidity to survive” in a period with little to no revenues, said Mr Elmgreen at Amundi.

Sectors, including infrastructure and air transport, “have been absolutely annihilated”, he said. “If you are running a business, you don’t know if you are going to be there in one month, two months, three months. But you can find companies that have strong balance sheets and can weather the storm.”

UK bank shares plunge after sector halts dividends on BoE warning Falls wipe billions from HSBC and Standard Chartered valuations and trigger retail investor backlash in Hong Stephen Morris

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K bank stocks plunged on Wednesday after the sector halted dividends and buybacks in response to the Bank of England’s warnings against paying out billions of pounds to shareholders during the coronavirus pandemic.

HSBC and Standard Chartered — which are both headquartered in London but do the vast majority of their business in Asia — fell more than 8 per cent and over 7 per cent, respectively, wiping billions from their valuations and causing a backlash among Hong Kong retail investors.

Before the dividend announcement, HSBC had fallen 23 per cent this year, around half as much as its more UK-focused peers. It was due to pay out $4.2bn in dividends in two weeks’ time.

“From a UK policy perspective it is understandable [ . . .] but this is damaging in Asia and around the

Shares of Standard Chartered, which is headquartered in London but does the vast majority of its business in Asia, fell more than 7% © Getty Images

world,” said Ronit Ghose, an analyst at Citigroup. “UK institutional investors and Hong Kong retail investors own bank shares for the dividend. This isn’t billionaires and hedge funds, a lot of these people are ordinary folk.”

The declines for UK lenders focused on their domestic market were also significant. Barclays — which was due to pay a £1bn diviwww.businessday.ng

dend on Friday — dropped over 7 per cent, and Lloyds and RBS both fell more than 5 per cent.

In a series of co-ordinated statements on Tuesday evening, Lloyds, RBS, Barclays, HSBC, Santander and Standard Chartered said they would cancel their dividends for 2019 and refrain from setting cash aside for investor payouts this year. They also

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pledged not to carry out any share buybacks.

Their announcements were made as the Prudential Regulation Authority, the supervisory arm of the BoE, published a statement welcoming the dividend cancellations.

The regulator also said it “expects” the banks and Nationwide, the building society, to refrain from paying any cash bonuses to senior staff and signalled they should stop setting money aside for variable pay during the “coming months”.

Coronavirus business update How is coronavirus taking its toll on markets, business, and our everyday lives and workplaces? Stay briefed with our coronavirus newsletter.

Sign up here The banks said they had made the dividend move following a “formal request” from the PRA and that the decision would allow them to “serve the needs of businesses and households” during the coronavirus shutdown, which @Businessdayng

will drive millions of Britons out of work and thousands of small businesses into bankruptcy.

In letters to each of the chief executives of the six banks and Nationwide, published late on Tuesday night, the BoE warned that it was “ready to consider use of our supervisory powers” if they did not comply with its recommendations on dividends and bonuses.

By bowing to the regulator’s wishes on dividends, the banks have avoided being subjected to formal action. But the decision to cancel last year’s payouts — worth £7.5bn — will prove unpopular with some investors, especially retail shareholders who rely on the payout for their income.

“Regulatory uncertainty has once again reared its head,” said Joseph Dickerson, an analyst at Jefferies. “Perhaps most importantly, should the present economic situation prevail for the remainder of the year, it is not beyond the wit of man that some banks might need rights issues.”

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news McKinsey expects 3.5% slump in Nigeria...

Continued from page 1

six weeks when all current infections including those infected quietly run their course that we can know what is happening.”

On Tuesday, doctors at the epicenter in China shared experiences with their Nigerian counterparts via a webinar to which BusinessDay was invited.

Junwei SU, one of the doctors on the call who works with the Zhenjian University Teaching Hospital in Fahzu (where 1,300 patients have been treated for the coronavirus infection without any death or infection to its staff ), told her Nigerian colleagues it was very essential to mount an effective ‘identi-

fy and isolate’ programme that keeps all confirmed cases in approved isolation centres for treatment.

According to her, “This Covid-19 virus is so powerful in transmission and no effort should be spared in protecting the general population.”

Nigeria now has 151 confirmed coronavirus cases with two deaths but has been unable as yet to ramp up the number of those tested daily.

By March 25, 2020, only 262 persons had been tested in Nigeria, but that figure is expected to go up significantly on back of the testing kits donated by the Chinese billionaire Jack Ma.

said in a report published Wednesday.

With the contraction rate projected by the New Yorkbased consulting firm, the highest crude oil exporting nation in Africa will be witnessing its worst growth in decades. Nigeria reported its largest contraction in 25 years in 2016 when it reported a growth of -1.62 percent.

“A contraction of that magnitude at a time prices are rising can only spell an entry into stagflation which means declining output, rising prices and higher unemployment,” Obinna Uzoma, chief economist at EUA Intelligence, said.

The crash in the price of crude oil and dwindling revenues as a result of the impact of the coronavirus pandemic on the global economy is a risk that may fuel a contraction for Africa’s largest economy in 2020.

Other than the slowdown in global economic activities amid the coronavirus outbreak, the rift between Saudi Arabia and Russia has resulted in a glut in the crude oil market which has sent crude price southwards.

As a result, Nigeria’s external reserves fell below $36 billion mark in March, touching its lowest levels in 29 months.

The reserves which show the nation’s ability to weather external shocks dropped to $35.7 billion as at March 24, according to Central Bank data.

That’s the lowest level

“Contact tracing is one of the major problems the country is going to have,” warned Francis Faduyile, president, Nigerian Medical Association, while answering questions on a programme on Channels Television recently.

According to information from the Ministry of Health, officials have been unable to trace the contact of those who had returned abroad relying on people to voluntarily heed their counsel to selfisolate.

Contact tracing is the process of identifying, accessing and managing people who have been exposed to a disease to prevent onward transmission. During the Ebola epidemic of 2014, contact tracing was helpful for rapid identification of people at the onset of symptoms and promptly isolating them.

According to the WHO, experience from previous Ebola crises demonstrated contact tracing had

posed serious challenges.

The factors, according to a WHO study, include wide geographical expanse of the EVD outbreak (involving urban and rural areas), insufficient resources (human, financial and logistics), community resistance and to some extent limited access to affected communities.

Health officials engaging in contact tracing need to be skilled in the assessment of the COVID-19 symptoms, interviewing techniques and counseling, according to experts.

It is not clear how much efforts have been in place since the last Ebola outbreak to re-skill officials.

Contact tracing in Nigeria is further beset by familiar challenges with inadequate data, dishonest documentation, and fear of stigmatisation which may prompt some to keep their symptoms quiet and increase the likelihood of the disease spreading.

Nigeria has shut down

economic activities in Lagos and Abuja, and Ogun State will soon follow.

Other states have similarly started a lockdown and creating social distancing guidelines.

Medical experts say this is not the time to be complacent, especially as Nigeria lacks healthcare facilities that can contain a wide spread of the virus.

The United States prevaricated when the first community spread case was unravelled with government officials calling experts alarmists. Within days the disease grew in geometric proportions and now there are over 3,800 deaths and over 185,000 infections at the time of this reporting.

Faduyile reassured that a diagnosis of the coronavirus does not translate to a death sentence considering that case-fatality ratio is between 2 and 4 percent, indicating that those infected have a higher chance of recovering from the virus than it killing them.

Ogbonnaya Onu (2nd r), minister of science and technology; Mohammed Bello Umar (r), permanent secretary, Federal Ministry of Science and Technology; Pauline Tallen (2nd l), minister of women affairs and social development, and Abiodun Akinlade (l), former chairman, science and technology committee, House of Representatives, at the closing ceremony of the Science, Technology and Innovation Expo 2020 in Abuja.

Nigerian doctors battling Covid-19...

Continued from page 1

modelling we are doing assumes our peculiar handicaps – small testing size and our not-so-successful efforts at contact tracing.

If you imagine that a high percentage of those infected may not even know and these people are out there still infecting people.

So, you could really have an explosion in a matter of weeks as has occurred in many other cities around the world.”

He said if anyone is complaining about the lockdown, he or she would need to consider what is happening in Italy and

Spain where hospitals have been overwhelmed by the number of cases of infected people for whom beds and ventilators cannot be found.

“We are talking about planning for an emergency,” he said. “You don’t just plan for only what you can see as this will no longer be emergency. You have got to go beyond what you know or can see. We cannot afford to underestimate or under-prepare.”

While urging strict adherence to the lockdown, the doctor said, “Yes, it is true that we are not yet seeing a deluge but it will not be until another four-

Rising community transmission of...

Continued from page 6

not sufficient proof that a person is engaged in essential services opens a path for unscrupulous police to abuse Nigerians.

Already, there are social media posts of residents being abused, including an unconfirmed fatality in Ikorodu. Our correspondent witnessed several people detained and led into a police station for violating the restrictions imposed on movements.

Health officials warn that community spread elevates the need for more precautions like social distancing. The droplets that someone creates when he sneezes or coughs can remain in the air and infect someone else for 30 minutes, increasing the risk for community spread, experts warn.

Nigeria’s response to the coronavirus threat has largely been reac-

tive as suspected cases have been patients who observed symptoms and presented themselves for evaluation.

According to the Nigerian Centre for Disease Control (NCDC), there are close to 1,000 suspected cases of coronavirus in Nigeria. 151 people have tested positive of which nine have been discharged, with two deaths recorded.

NCDC is also trying to trace the contact of over 6,000 people who may have returned to the country from high-risk areas and those who may have had contact with them.

New cases being announced may indicate that infected people are now reaching the final stages of their incubation, unravelling challenges with tracing contacts of individuals who tested positive for coronavirus after returning to the country.

since October 2017, when the country managed to limp out of five quarters of negative growth. External reserves at the time stood at $34.3 billion.

With economic activities in Nigeria almost at a standstill amid coronavirus lockdown, the bottom lines of most businesses in the country are likely to take the most hit from the virus outbreak.

To curtail the spread of the deadly coronavirus, President Muhammadu Buhari on Sunday directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days with effect from 11pm on Monday, 30th March 2020. The restriction will also apply to Ogun State due to its proximity to Lagos and the high traffic between the two states.

Meanwhile, the number of confirmed cases of Covid-19 in Nigeria rose by 12 additional cases bringing the total figures to 151, from 139 on Tuesday.

According to McKinsey, in scenarios in which the outbreak is not contained, Nigeria’s GDP growth rate could fall to -8.8 percent for 2020, representing a reduction in GDP of some $40 billion.

“The biggest driver of this loss would be a reduction in consumer spending in food and beverages, clothing, and transport,” Acha Leke, senior partner at McKinsey & Company, said.

A negative GDP expansion for Nigeria will mean a lot of the country’s industries will be disrupted, as compiled from economists.

“The stock market will also continue to decline as a weaker economy will mean weaker company earnings and spark a recession selloff on top the coronavirus and oil price selloff and unemployment will hit the roof,” Uzoma of EUA Intelligence said, adding that Nigeria is not prepared for such turmoil but “that could be our reality very soon”.

Since 2017 when oil-dependent Nigeria emerged from its economic recession, not only has the country’s economic growth been sluggish but only a few sectors triggered the expansion, further undermining the country’s capacity to create enough jobs to meet the growing number of labour market entrants.

Out of about 4.8 million Nigerians who entered the country’s labour market between 2015 and 2018, about 635,000 jobs were created within the period, indicating only a job was available for every eight people who joined Nigeria’s economically active workforce.

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COPING WITH LOCKDOWN Compliance with lockdown order weakens in parts of Lagos …as residents’ anxiety for sustenance grows JOSHUA BASSEY & TEMITAYO AYETOTO

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f Muhammad Umar and his colleague, Nasiru Abba, don’t hit the streets in a day, getting hands in the mouth could become a hassle. Despite the implementation of the lockdown order by President Muhammadu Buhari to prevent an out-of-hand crisis from COVID-19 spread, the duo combed the popular automobile spare parts market at Ladipo, Mushin, in search of scrap metals.

The sack with Umar was very scanty as the beehive of buying and selling activities that churns out aluminium scraps has been grounded.

But they wouldn’t give up search because they needed to exchange the scraps for food items with their client by evening, Abba said, complaining about the impact of the lockdown on people struggling to live above a dollar like himself.

“We can’t afford to stay without working. We have to gather these scraps to get some food to eat,” Abba said.

Many Lagos residents, mostly of low-income cadre, are anxious about the means to sustain themselves barely two days into what some term a compulsory holiday.

Food items sellers continued to ply their trade, as hawkers of carbonated beverages roamed deserted streets in the hope of making some

money amid fear of exhausting their savings before the end of the 14-day lockdown.

Checks within the commercial city on Wednesday showed an increase in the number of vehicles on the roads compared with Tuesday. Many believe this is an indication that the lockdown may prove tough to fully comply for 14 days running Lagos is Nigeria’s biggest commercial city with an estimated population of over 22 million people majority of who survive on daily income.

Residents had raised concern from day one of the directive that the lockdown would unleash hardship on the people in the absence of an economic stimulus that targets the citizens directly and would act as incentive for the citizens to comply.

Nigerians have complained that if they escaped the coronavirus, “hunger virus” would become a bigger threat in a country where nearly 80 percent of the estimated 200 million people are poor.

Although the Lagos State

government is providing food for indigent citizens who are 60 years and above, that, however, is tied to the Resident Card, an identification which less than 10 percent of the state’s population possesses.

On Idimu-Egbeda/IyanaIpaja road, BusinessDay observed an increase in the number of vehicles and pedestrians on the road.

At the Idimu police area command, close to the Isheri round-about, there was heavy traffic buildup with policemen on duty strug-

Covid- 19: one of the Edo State isolation centres at Stella Obasanjo Hospital, Benin City.

gling to turn vehicles back.

One of the motorists who spoke to BusinessDay said he was headed for a pharmacy to buy drugs for his sick child at home, and insisted the police should allow him passage.

He complained that a pharmacy within his neighbourhood in Idimu does not have the particular drug he needed and was therefore driving to Egbeda when the police stopped him.

Even though their shops were shut, few auto spare parts traders at Ladipo hung

Pix Churchill Okoro,

close to their gates, anticipating quick sales. One of them who didn’t want to be named said staying at home without any support was scary. He criticised the government for only emulating lockdown strategy from countries leading containment of the coronavirus pandemic without provision of relief materials.

The trader is not the only one disappointed about lack of support for relief materials. Even some individuals at the centre of political mobilisation in communities were equally disenchanted, wondering why they have only heard of relief materials (basically food items) from the state government but were yet receive anything.

Since the coronavirus began to spread, billions have flowed into the state buffers and public office holders have taken personal responsibility to donate food items, hand sanitisers, face masks and hand gloves to people.

At the same time, it has turned out to be another avenue to gain political followership and loyalty.

In Mushin Local Government Area, for instance, where Bolaji Ayinla and Olayiwola Sobur, members of the House of Representatives under the ruling All Progressives Congress (APC), have distributed food materials, it has been done through existing political architecture.

Acid test for stay-at-home order as hunger visits families CHUKA UROKO

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s w e l l - i nt e n tioned and important as the Federal Government’s stay-athome order is, that order is passing through an acid test as many residents of the affected states, especially Lagos, are out on the street, citing hunger and discomfort in their families.

This is happening barely 48 hours into the order that is scheduled to last for an initial 14 days, meaning that probably before the end of the first one week, the order must have died.

Some residents have even threatened to protest if the order persists without safety nets from the government.

Amobi Obidiegwu is a middle-aged man with an eight-member family living in Ejigbo, a Lagos suburb.

Until 2018, he was a staff

of a beverage producing company in Ikeja, Lagos where he served as an office assistant, but he lost his job when the company decided to downsize its operation.

Obidiegwu has since then trained as an iron fitter, moving from one construction site to another to eke out a living and fend for his family. He is a daily-pay worker whose income depends on his going out to search for work at construction sites.

For him, the stay-athome order handed down to the residents of Lagos, Abuja and Ogun which restricts all forms of movement amounts to mercy-killing because the only way he and his family can continue to live is by his going out to get money and buy their needs. But now, he cannot move about.

“It is good that government wants to save us from the deadly disease, but I think that for people like www.businessday.ng

me, what will kill us fast is hunger. As I am talking to you now, I don’t know from where our next meal will come. My house is empty and hunger is just by the door,” Obidiegwu told BusinessDay on Wednesday morning.

Reminded that the stayat-home order was for his own good and that of his children, an angry Obidiegwu agreed but asked why nothing was coming from the government to help the poor. The Federal Government had, as part of measures to contain and curtail further spread of the deadly coronavirus in the two major cities of the country as well as Ogun State, directed that movement should be restricted and that people should stay in their homes for the next 14 days, beginning from 11pm Monday, March 30, 2020.

In Lagos, compliance

level was quite high on Tuesday. But just 24 hours later, a good number of the residents are becoming restive and impatient, citing hunger and discomfort in their homes due to lack of electricity and other social amenities to keep them indoors.

Ordinarily, Lagos is a very difficult and challenging environment where many of the residents are daily income earners. For people in this group, hunger has taken a disquieting position in their families, forcing them out to the streets in search of whatever they can lay hands on for survival.

“I don’t really know how long we have to be in this mess; government has directed that we should stay at home but has not made any provision for us; no food in the house; no money to buy anything and there is no light that can even make you stay

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indoors,” Gbenga Osunyomi, a vehicle licensing agent, complained to BusinessDay. Osunyomi, who has not been having it easy on account of the slowdown in the economy, said he had expected the government to give out money to people to cushion the effect of the coronavirus. “Even if they cannot give us cash, why not give out foodstuff as it is done in other countries?” he queried.

Dr iving through the streets of Lagos shows that many residents are really uncomfortable with the presidential directive. So many people are out on the street, discussing in clusters and making a huge joke of the precautionary measures put in place, especially social distancing.

Apparently, a lot of the people do not understand the meaning and essence of the stay-at-home order @Businessdayng

by the government, creating the impression that they are doing government a favour by staying in their houses and avoiding contact with people on the street who may be infected.

“Coronavirus is not just a health problem; it is also an economic crisis which is why the government is trying hard to ensure that it does not spread to a point where it will not be controllable.

By asking people to stay indoors, government trying to make it easy to contain the virus and also to save the economy from total collapse,” Jude Oloyide, a health worker at a Lagos hospital explained Wednesday.

Oloyide observed that many people were yet to come to terms with what is on ground, advising that government has to step up enlightenment, “because many will die for lack of knowledge”.

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Thursday 02 April, 2020

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INSIGHT

COVID-19: Contracting issu

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Dr. K.U.K. Ekwueme kekwueme@olaniwunajayi.net

Olabisi Makanjuola bmakanjuola@olaniwunajayi.net

Abayomi Okubote aokubote@olaniwunajayi.net

Force majeure A force majeure event is an intervening event which affects the capacity of a contracting party or parties to fulfill their contractual obligations. Nigerian courts have defined force majeure as something unexpected and unforeseen happening, making nonsense of the real situation envisaged by parties.1 Crucially, force majeure is strictly a contractual provision and therefore only entails what parties delineate it to contain in their contracts. Typically, force majeure provisions would include acts of God, diseases, fires, earthquakes, natural disasters, outbreak of diseases, epidemics and pandemics.

It is pertinent to note that inability to perform a contractual obligation as a result of an event, without more, cannot trigger a force majeure provision. A party seeking to rely on a force majeure provision must establish a nexus between the force majeure event sought to be relied upon and his inability to perform2. It is for this reason that contractual disputes post the pandemic would be rather tenuous, because whilst the effects of Covid- 19 cannot be denied, the connection between the pandemic and various industries differ.

Typically, force majeure provisions would not automatically excuse the obligations of a party upon the occurrence of the force majeure event, however, some contracts provide that should the force majeure event subsist for more than a certain period, the

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affected party may elect to terminate the contract. We see that the existence of such a risk whereby parties may opt out of contracts should the pandemic last for an extended period, has alarmed businesses and business owners, and forced them to watch with bated breath the progression of the pandemic, with hope that a resolution is near.

How does this affect contracting parties during this pandemic?

In relation to the effect of the pandemic on contractual obligations, it would be useful for contractual parties to properly examine their contracts to ensure that the force majeure provisions are wide to include events such as the Covid- 19 Pandemic.

Where the provisions are wide enough to include the Pandemic, parties should ensure that they may invoke force majeure under their contracts in line with the prescribed procedure under such a contract.

It is arguable that the phrase ‘Act of God’ is wide enough to cover the Pandemic. The phrase has been defined as an event which involves no human agency, is not realistically possible to guard against, is due directly and exclusively to natural causes and which could not have been prevented by any amount of foresight, plans, and care3. The phrase has been applied to natural disasters such as earthquakes, storms and we see no reason a pandemic (which has not been proven to be as a result of human intervention) that is adversely ravaging the globe should not fall under the phrase.

Frustration of contracts Generally, frustration of contract is the premature determi-

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nation of an agreement between parties, owing to the occurrence of a supervening event, or change of circumstance so fundamental that it is regarded by law as striking at the root of the agreement4. A contract is therefore frustrated where, subsequent to its formation, and without fault of either party, it is incapable of being performed due to an unforeseen event (or events), resulting in the obligations under the contract being radically different from those contemplated by the parties to the contract5.

The legal consequence of frustration is that the contract is automatically terminated at the point of frustration. This does not mean that the contract is void ab initio (“from the beginning”); only future obligations are discharged.

However, parties are still to perform obligations which fell due for performance before the frustrating event6.

The events which have been listed by Nigerian courts as super-

‘

The shutdown of businesses has certainly affected businesses that are heavily reliant on their trading partners and global trading relationships

‘

Introduction s the Novel Coronavirus (COVID-19) continue to impact and ground human activities globally, World leaders scramble to mitigate the deleterious effect of the rapidly spreading virus on the global economy and where businesses are concerned, millions worldwide have shut down, complying with various Governments’ “stayat-home, stay safe” orders. The consequence of the shutdown on businesses has certainly affected businesses that are heavily reliant on their trading partners, global trading relationships, and supply chains to fulfil their contractual obligations. Various issues with respect to the effect of the pandemic on contracts would indubitably arise. In this series, we explore some of these contractual issues in a bid to assisting contracting parties make informed decisions with respect to their rights and obligations under their existing contracts.

@Businessdayng

vening and thereby constituting frustration include: (i) subsequent legal changes or statutory impossibility; (ii) outbreak of war; (iii) destruction of the subject matter of the contract or literal impossibility; (iv) Government requisition of the subject matter of the contract; and (v) cancellation by an unexpected event7. We see that the Pandemic easily plugs into more than one category of supervening events as held by Nigerian courts.

How does this affect contracting parties during this pandemic?

It is likely that as a result of the spread of the virus, non-performing contracting parties may seek to rely on the common law concept of frustration, and argue that the Pandemic is a supervening event, thus rendering them unable to fulfill their contractual obligations. In this light, we envisage that parties may raise frustration as a defence with respect to actions against them for breach of contract.

We note that the focus of the court will be on the parties’ specific contractual obligations and whether they have radically changed as a result of the spread of

Thursday 02 April, 2020

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ues a company. In relation to lending, a MAC clause is used in most loan agreements to enable a lender to call a default, and therefore to demand early repayment of a loan if there is an unforeseen adverse change in a borrower’s position or circumstances. With respect to a company, it relates to any event, circumstance, change or effect that, individually or in the aggregate, is materially adverse to the business, condition (financial or otherwise), assets, liabilities or results of operations of the Company and the Company Subsidiaries, taken as a whole.8

Material adverse change A Material Adverse Change (MAC) clause is ‘transaction/deal’ specific.

Thus, what will be a MAC event under one contract/transaction might not be a MAC event under another. Usually, parties carefully negotiate contract terms that deal with MAC and take into consideration the relevant circumstances of each party. Consequently, the definition of MAC is unique to each contract.

In the field of corporate finance, mergers and acquisitions, a MAC event is a change in circumstances that significantly reduces the value of

Renegotiation of contractual relationships The impact of Covid- 19 cannot be overstated, and we envisage the impact to extend to contractual relationships, thereby leading to an increase in demand by contracting parties to renegotiate the terms of their agreements. Whilst there would typically be provisions to cushion the effect of unforeseen events, the extent of the impact of the Virus is still yet to be fully realised, so that even those ‘cushion www.businessday.ng

‘

The impact will affect contractual relationships, thereby leading to an increase in demand by contracting parties to renegotiate the terms of their agreements

‘

the Virus to the extent that requiring a party to comply with its contractual obligations would mean requiring it to do something fundamentally different from that which it originally contracted to do. In other words, it will be important for the court to identify the consequences of the Pandemic on the parties’ ability to perform the specific contract in question. Thus, cases will be decided by the courts based on their peculiar facts and circumstances.

How does this affect contracting parties during this pandemic?

The Pandemic could have significant impacts on businesses and ultimately the values of companies. This may lead to investors pulling out from mergers and acquisitions transactions. Borrowers might be significantly affected, and banks could be tempted to call in loans where there it is evident that there is a material adverse change in the position or circumstances of its borrowers. However, as stated earlier, MAC events are not at large and must fall within the provision of a MAC clause in a contract for it to be triggered. The onus therefore lies on a party that alleges the occurrence of a MAC event to prove it.

We note that in triggering the acceleration of a loan repayment based on a MAC clause, it is not enough for there to be an adverse change, same must be material9.

An adverse change is held to be material if it significantly affects a borrower’s ability to perform its obligations and to repay the loan and must not merely be temporary. Since the global position is that the Pandemic will undoubtedly come to an end (although a firm date cannot be ascertained), we take the view that the Pandemic may be viewed as a temporary10 circumstance, that businesses will recover from.

In this guise, lender banks may find it difficult establishing before Nigerian courts, that the Pandemic caused a MAC.

provisions’ may be inadequate in combatting the effects of Covid19. For instance, where parties have agreed to a moratorium period, the extent of the impact of the Pandemic could very well render such a moratorium period inadequate, especially because the initial term of the contract has not stricto sensu been observed due to the intervening nature of the Virus on business in general, and the government imposed locked down.

We have already seen the impact of the Virus on oil prices (oil being the bedrock of the Nigerian economy), and this would invariably affect the stability of the Ni-

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gerian economy by resulting in a shortage of foreign exchange. The simple deduction would be that foreign exchange denominated facilities may become too onerous for parties, and parties would be seeking a conversion of such facility, or that due to the fall in oil prices, parties can simply not obtain enough foreign exchange to service their loans.

How does this affect contracting parties during this pandemic?

We recommend that parties examine their contracts in detail and begin to intimate counterparties about the prospects of a renegotiation of terms, or a possible suspension of the said contracts till a time to be agreed by the parties, depending on the outcome of the Pandemic. This is particularly important for industries that have been hit harder by the effects of the virus.

Interpretation of contracts In interpreting contracts, the role of the court is simply to give effect to the intention of parties as expressed in the terms of the contract, and nothing more11. In the absence of any ambiguity in the contract, the only interpretative jurisdiction of the court is to make pronouncement on the clear and unambiguous agreement and agree with them12.

The courts have however employed various interpretation devices to as much as possible, give effect to the intention of parties.

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How does this affect contracting parties during this pandemic?

It remains to be seen how this role of the courts may change in relation to post- Pandemic litigation on breach of contract, and the expected debate as to whether the Virus can be implied into a contract as amounting to frustration, in the absence of force majeure provisions. Some may take the view that any form of ‘compassion’ adopted by judges would amount to ‘judicial sentiments’13 as opposed to giving effect to parties’ intentions.

We however believe that the courts would appreciate the commercial realities of a post Pandemic era, and do justice based on the peculiar facts and circumstances of each case.

Conclusion Covid- 19 has thrown up much uncertainty across the globe, and the effects which are already being felt, will continue to compound. Situating the effect of the Pandemic in the context of commercial contracts and litigation is an arduous task. It is hoped that contracting parties would be more understanding in these turbulent times and take measures to preserve contracts rather than opting out of them, except were doing so is inevitable in the circumstances.

Courtesy: Olaniwun Ajayi LP, Lagos

36

FT

Thursday 02 April 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

Banks stand to make billions from US small business rescue

Federal loans will be forgiven if recipients use them to cover payroll and other costs Brendan Greeley and Robert Armstrong

B

anks stand to collect billions of dollars in fees on the $350bn in loans that are being offered to US small businesses as part of the federal response to the coronavirus pandemic.

Under the $2tn relief package signed into law by Donald Trump on Friday, the Small Business Administration will offer the loans through banks and credit unions to cash-strapped businesses employing under 500 people.

The full amount of the loan will be forgiven if it is used for payroll, mortgage interest, rent or utilities in the two months after the money is received. Less will be forgiven if the employees are sacked or salaries cut.

Any amount that is not forgiven will accrue interest at a 0.5 per cent rate and the principal will come due in two years, the SBA said on Tuesday as it shared details of its “pay cheque protection” programme.

Banks will receive processing fees, paid by the federal government, for making the loans. The fees will vary with loan size: 5 per cent for loans under $350,000, 3 per cent for loans under $2m, and 1 per cent for loans greater than $2m. The loans will not incur a capital charge.

It is essentially a grant programme that, if the borrower doesn’t use the money to pay their employees, turns into a super-low interest loan Sam Tuassig, Kabbage Borrowers will need to fill out a two-page form and document that they were in business as of mid-February. Lenders will not need to wait for SBA confirmation

Donald Trump signs the coronavirus stimulus relief package in the Oval Office on Friday © AP

before providing cash in hand, as soon as Friday. Businesses will be eligible to borrow the equivalent of 2.5 times their average monthly payroll with a cap of $10m.

“Speed is the operative word,” said Jovita Carranza, the SBA’s administrator. “Applications for the emergency capital can begin as early as this week, with lenders using their own systems and processes to make these loans.”

According to the SBA, there are 30m businesses with fewer than 500 employees in the US, employing 60m people, almost half of the private workforce. The National Federation of Independent Business, an advocacy group, says about three-quarters of its members have been affected by the crisis.

Since the president signed a rescue package, the SBA has been under pressure to release details of the programme. As customers disappear from all but a short list

of essential businesses, business owners have been uncertain about a crucial question: whether to keep their staff on payroll, or release them to collect beefed-up unemployment insurance cheques.

Karen Ginther, who works for the Seattle chapter of Score, an organisation that works with the SBA to mentor small businesses, said one typical email from a business owner came to her at 3am on Tuesday. It asked: “Can you help me make some decisions? I don’t understand how all of this works. I have been learning and taking webinars, reading. I am so confused what the right thing is to do. I don’t want to lose my employees.”

Claudia Sahm, a former research section chief at the Federal Reserve, said offering banks feebased incentives to administer and distribute loans — which function like grants — is a way to make up

for the limited capability of the SBA to administer a programme that senior administration officials say could pull in millions of application requests.

Small businesses “are used to going to their local bank to get loans”, said Ms Sahm, now at the Washington Center for Equitable Growth. This will make it easier for banks to act quickly on existing relationships. It also means the SBA will rely on banks to contact their own clients, giving large banks and favoured clients an advantage.

“It’s great that the government has done this so quickly,” said Wendy Cai-Lee, chief executive of Piermont Bank, a digital start-up bank that specialises in lending to small and midsized businesses.

“The challenge is in the execution.

Banks are still waiting for guidance from the SBA . . . My concern is how quickly we can get the money into the hands of small businesses”,

given that they may struggle with the required paperwork.

Coronavirus business update How is coronavirus taking its toll on markets, business, and our everyday lives and workplaces?

Stay briefed with our coronavirus newsletter.

Sign up here The SBA has also laid out a role for agents, such as attorneys or accountants, who can help prepare documents, and can claim some of the lenders’ processing fee.

Sam Tuassig, head of policy at Kabbage, a fintech that makes small business loans, said: “It is essentially a grant programme that, if the borrower doesn’t use the money to pay their employees, turns into a super-low interest loan.”

Initially, only federally insured banks and credit unions will be eligible to make the loans. Mr Tuassig said Kabbage was eager to participate, but that it remained unclear whether online lenders and fintechs would be allowed to do so. The Treasury’s statement on Tuesday said that “additional lenders” were encouraged to apply to the SBA for approval.

Online lenders are an increasingly important source of capital for small businesses, particularly the very smallest. The Fed’s 2019 Small Business Credit Survey found that a third of small businesses seeking loans applied to online lenders, and that speed of decision making was the key reason for choosing the online lenders.

“We can do what most banks do and do it in a faster way,” Bernardo Martinez, US managing director of Funding Circle, the UK-based online lender, told the Financial Times last week. “We can reach customers that don’t have access otherwise.”

Stocks retreat after worst quarter since 2008 financial crisis Coronavirus outbreak worsens in US and new surveys point to heavy global economic toll

Adam Samson and Hudson Lockett

A

new quarter has brought a fresh jolt of volatility to global equity markets, with stocks in Europe and Asia dropping as the coronavirus crisis worsens in the US and pressure on economies around the world mounts.

London’s FTSE 100 dropped 3.7 per cent while Frankfurt’s Dax and Paris’s CAC 40 were down roughly 4 per cent. The Europe Stoxx 600 fell 3.2 per cent and S&P 500 futures pointed to a slump of more than 3 per cent.

The falls, which follow the worst quarter for global markets since the 2008 financial crisis, came after President Donald Trump warned that nearly 250,000 people could die in the US from

Covid-19, and suggest that many investors are not ready to jump back in to risky bets.

Italy and Spain, the two worsthit countries in Europe, have shown some signs of improvement in recent days, as the centre of the coronavirus crisis quickly shifts to the US. “Europe seems to have reached, if not [passed], the peak in new infections,” said Marco Wagner, economist at Commerzbank. “In the US, on the other hand, the situation is becoming more acute.

A flattening of the infection curve is still not apparent.”

On Tuesday, Mr Trump warned Americans of a “very, very painful two weeks” ahead while Anthony Fauci, a top government health official, said people should be prepared for high fatalities.

Coronavirus business update How is coronavirus taking its www.businessday.ng

toll on markets, business, and our everyday lives and workplaces?

Stay briefed with our coronavirus newsletter.

Sign up here The world’s biggest economy, like many others, has already shown severe signs of strain from the lockdowns prompted by the pandemic, with the number of people seeking unemployment benefits shooting late last month to a historic high of 3m.

In a sign of the heavy blow faced by investors globally, the UK’s biggest banks announced after the close of trading on Tuesday that they would scrap billions of pounds worth of dividends under pressure from the country’s top financial regulator.

Bank shares dropped on Wednesday, with HSBC down about 9 per cent, and Barclays, Lloyds Banking Group and Royal

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Bank of Scotland falling about 5 per cent.

Business executives in the eurozone, Japan and South Korea reported a marked deterioration in the factory sector in March compared with February, according to purchasing managers’ indices that are closely watched by investors as leading economic indicators.

Robert Carnell, Asia-Pacific head of research at ING, said Wednesday’s Asia PMI readings confirmed a “grim picture” for manufacturers. He added that “the prospect for most economies’ manufacturing sectors as they head into the second quarter is for even more weakness, exacerbated where lockdown measures are newly enacted or tightened”.

Most Asian markets were lower, with Japan’s Topix down 3.7 per cent and South Korea’s Kospi off 3.9 per cent. China’s CSI 300 @Businessdayng

slipped 0.3 per cent.

The Institute for Supply Management is also set to publish its latest reading on the US factory sector, which is considered to be one of the best forward-looking proxies for the rate of change in US gross domestic product. Economists polled by Reuters expect the ISM gauge to sink to 45 in March from 50.1 the previous month. A reading so far below 50 points to a contraction in the sector.

Global equities had rallied over the last week as investors pinned their hopes on huge stimulus efforts by policymakers and the eventual slowing of the spread of Covid-19.

The yield on 10-year US Treasuries, viewed as a haven during times of market uncertainty, slipped 0.09 percentage points to 0.611 per cent. Yields fall as bond prices rise.

Thursday 02 April 2020

BUSINESS DAY

37

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Coronavirus sell-off leaves investors keeping their distance ‘It’s too late to sell and too early to buy,’ says one fund manager Katie Martin

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any investors still reeling from the brutal first quarter of 2020 are reluctant to believe it is safe to dive back into risky bets.

Key benchmarks including the S&P 500 in the US have bounced strongly since the coronavirus pandemic first tore through markets in late February. Starting from their low point in late March, US blue-chip stocks have soared by 17 per cent.

The rebound is one of the biggest since the aftermath of the Wall Street Crash in 1929, but still leaves stocks down 20 per cent so far this year. The recovery largely reflects the firepower deployed by central banks to calm a financial system that was brought to a sudden halt by lockdowns of cities and countries around the world.

But while calm has been restored, many investors think it simply marks a new phase in the markets’ struggle to adapt to a rapidly shrinking global economy stung by both the virus and a collapse in the price of oil. The violent phase of the adjustment has passed, they say, but the perils to investments have not.

“The way we put it is: it’s too late to sell and too early to buy,” said Kasper Elmgreen, the Dublinbased head of equities at Amundi, Europe’s largest asset manager.

“I’m pretty sceptical of the current bounceback that we have seen.”

The darkest point of the market

The violent phase of the adjustment has passed, many investors think, but the perils to investments have not © AFP via Getty Images

crisis in mid-March resembled the shake-out that many fund managers remember from 2008. Stock indices in major economies were dropping by about 10 per cent each day. The dollar was rattling higher at an alarming speed as companies hoarded greenbacks just like households stockpiled pasta.

Perhaps most concerning of all, the government bond markets started to malfunction, removing fund managers’ ability to hedge against sliding stocks and threatening to tip the financial system into chaos. Large parts of the corporate bond markets were untradeable — investors could not offload their holdings at any price.

“March was like a bomb went

off; two bombs, in fact, with the virus and [the oil shock],” said James Athey, an investment manager at Aberdeen Standard Investments.

“That hit vulnerabilities in markets, but it was . . . not an economic shock.

It was ‘get me out of here at all costs’.”

The picture changed only when governments and central banks unleashed their full firepower at the crisis, promising to help shield business and households from insolvency, to buy financial assets in huge quantities, to pump liquidity into short-term funding markets and to quench the global thirst for dollars.

“Policy responses have saved the system,” said Salman Ahmed, chief investment strategist at Lombard Odier Investment Managers.

The virus is a global health crisis and the efforts to control it — shutting down human interaction and activity — have created an economic crisis. But, Mr Ahmed said, measures to soothe the dollar and the debt markets had prevented this from becoming a financial crisis, too.

“That could have brought the system down, but it has eased,” he said. “When we had moves of 9 to 12 per cent every day, that was not just the virus. A lot of the damage was caused by systemic risk. We could still have 3 to 5 per cent moves, but central banks have tried to make sure this remains a virus crisis.”

A slow grind lower for stocks and riskier parts of the bond

markets may lie ahead. “We are past peak panic, but not yet at peak pessimism,” said Mr Athey.

Companies are cancelling dividends and stock buybacks to absorb the hit to economic growth, which also threatens further debt downgrades and defaults. Bets that some assets are cheap rely on earnings expectations that are now well out of date and subject to unprecedented uncertainty.

The spread of the virus across North America could spark a renewed sell-off. “The market is not priced for the US to be shut down for months on end,” said Mr Athey.

Some investors are dipping a toe back in, including hedge funds seeking to grab what they judge to be bargains. Toby Nangle, global head of multi-asset at Columbia Threadneedle in London, lauded policymakers’ determination “to prevent the public health crisis metastasising into a global financial crisis”, adding: “All else equal, we will be deploying more portfolio risk.”

Upping risk will not be a straightforward job. “We are looking for companies with a strong balance sheet and the liquidity to survive” in a period with little to no revenues, said Mr Elmgreen at Amundi.

Sectors, including infrastructure and air transport, “have been absolutely annihilated”, he said. “If you are running a business, you don’t know if you are going to be there in one month, two months, three months. But you can find companies that have strong balance sheets and can weather the storm.”

UK bank shares plunge after sector halts dividends on BoE warning Falls wipe billions from HSBC and Standard Chartered valuations and trigger retail investor backlash in Hong Stephen Morris

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K bank stocks plunged on Wednesday after the sector halted dividends and buybacks in response to the Bank of England’s warnings against paying out billions of pounds to shareholders during the coronavirus pandemic.

HSBC and Standard Chartered — which are both headquartered in London but do the vast majority of their business in Asia — fell more than 8 per cent and over 7 per cent, respectively, wiping billions from their valuations and causing a backlash among Hong Kong retail investors.

Before the dividend announcement, HSBC had fallen 23 per cent this year, around half as much as its more UK-focused peers. It was due to pay out $4.2bn in dividends in two weeks’ time.

“From a UK policy perspective it is understandable [ . . .] but this is damaging in Asia and around the

Shares of Standard Chartered, which is headquartered in London but does the vast majority of its business in Asia, fell more than 7% © Getty Images

world,” said Ronit Ghose, an analyst at Citigroup. “UK institutional investors and Hong Kong retail investors own bank shares for the dividend. This isn’t billionaires and hedge funds, a lot of these people are ordinary folk.”

The declines for UK lenders focused on their domestic market were also significant. Barclays — which was due to pay a £1bn diviwww.businessday.ng

dend on Friday — dropped over 7 per cent, and Lloyds and RBS both fell more than 5 per cent.

In a series of co-ordinated statements on Tuesday evening, Lloyds, RBS, Barclays, HSBC, Santander and Standard Chartered said they would cancel their dividends for 2019 and refrain from setting cash aside for investor payouts this year. They also

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pledged not to carry out any share buybacks.

Their announcements were made as the Prudential Regulation Authority, the supervisory arm of the BoE, published a statement welcoming the dividend cancellations.

The regulator also said it “expects” the banks and Nationwide, the building society, to refrain from paying any cash bonuses to senior staff and signalled they should stop setting money aside for variable pay during the “coming months”.

Coronavirus business update How is coronavirus taking its toll on markets, business, and our everyday lives and workplaces? Stay briefed with our coronavirus newsletter.

Sign up here The banks said they had made the dividend move following a “formal request” from the PRA and that the decision would allow them to “serve the needs of businesses and households” during the coronavirus shutdown, which @Businessdayng

will drive millions of Britons out of work and thousands of small businesses into bankruptcy.

In letters to each of the chief executives of the six banks and Nationwide, published late on Tuesday night, the BoE warned that it was “ready to consider use of our supervisory powers” if they did not comply with its recommendations on dividends and bonuses.

By bowing to the regulator’s wishes on dividends, the banks have avoided being subjected to formal action. But the decision to cancel last year’s payouts — worth £7.5bn — will prove unpopular with some investors, especially retail shareholders who rely on the payout for their income.

“Regulatory uncertainty has once again reared its head,” said Joseph Dickerson, an analyst at Jefferies. “Perhaps most importantly, should the present economic situation prevail for the remainder of the year, it is not beyond the wit of man that some banks might need rights issues.”

Thursday 02 April 2020

BUSINESS DAY

FT

38

ANALYSIS

Will the coronavirus crisis rehabilitate the banks?

Lenders that triggered financial crash are now being asked to funnel stimulus money to companies and individuals David Crow, Stephen Morris and Laura Noonan

O

n the day that Lehman Brothers filed for bankruptcy in September 2008, the front page of the Financial Times carried a photograph of John Thain, the then chief executive of Merrill Lynch. He was getting into his car after hours of talks at the Federal Reserve Bank of New York, and looked like a man who had stared into the abyss. In the following days more pictures would emerge of bankers leaving crisis meetings with policymakers, their ashen faces a portent of the horror to come.

As coronavirus rages and brings the global economy to a near standstill, bankers are once again roaming the corridors of power. In early March, Donald Trump summoned the chief executives of Bank of America, Citigroup and other large lenders to the White House, while Rishi Sunak, the UK chancellor, has held meetings and calls with their counterparts in Britain.

But this time is different, bankers say. Rather than being admonished for their role in causing the 2008 crisis, they are being called on to help distribute unprecedented stimulus programmes worth trillions of dollars designed to save the global economy from collapse.

Although governments and central banks are providing much of the cash, lenders are being asked to serve as the “transmission mechanism” to ensure support finds its way to the companies and consumers who need it most.

Mike Corbat, chief executive of Citigroup, says the US lender is in “daily contact” with the White House and regulators, “relaying information . . . [on] what we’re seeing in the marketplace . . . what’s under stress”. In France, the finance minister and bank governor now speak daily to Frédéric Oudéa, chief executive of Société Générale, a bank that became a pariah in 2008 following a rogue trader scandal.

“The difference with 2008 is that we were seen as the problem then, everybody today knows the problem is the virus,” Mr Oudéa says. “We are one of the activities that has to function . . . we are the doctors of the economy.”

While that description will jar with some, the difference in the tone of the discussions between governments, policymakers and banks has surprised some veterans of the financial crisis. “I don’t want to quote [former Goldman chief executive Lloyd] Blankfein and say we’re doing ‘God’s work’, but at least it feels like we’re on the side of the good this time round,” says one banker who advised the UK government in 2008.

Whether banks can maintain this new-found trust depends in large part on their ability to withstand coronavirus and its aftershocks. That in turn rests on whether post-financial crisis reforms — some of which the banks

© FT montage; Getty; Bloomberg; Shutterstock | Barclays’ Jes Staley; Citi’s Mike Corbat; Santander’s Ana Botin and SocGen’s Frédéric Oudéa

are lobbying furiously to relax — have left the system strong enough to survive. Banks appear to have passed the first test: a short but pronounced period of market mayhem and a co-ordinated drawdown of hundreds of billions of dollars of credit by corporations feeling the strain. One policymaker says that, faced with the coronavirus fallout, the global banking system of 2007 would have already imploded by now.

Jes Staley, chief executive of Barclays, says that “by any measure, the financial markets have traded and demonstrated volatility never seen before,” noting the “significant value destruction happening in pools of assets”. But, so far at least, the system is operating as it should.

“It’s pretty extraordinary that with this amount of distress you haven’t seen more failures in asset management companies.”

He adds that the potential harbingers of a full-blown financial meltdown have not yet happened, such as a mutual fund preventing investors from making withdrawals. “There are just a lot of things you’d expect to happen before you start to see a real crisis,” says Mr Staley.

The real test of the resilience of banks and the wider financial system is yet to come. Huge swaths of the global economy, from airlines to retailers, have seen their revenues all but evaporate. Many companies and consumers will default on their loans, leading to a string of excruciating credit losses for banks that will hit profitability and blast a hole in their balance sheets. Meanwhile, ultra-low interest rates introduced by central banks to support the economy during the pandemic will put extra pressure on profits generated from lending.

“Everything in the world is on hold, and this cannot not be reflected in the financial world,” says Romain Boscher, chief investment officer for equities at Fidelity www.businessday.ng

International. “Banks are still too big to fail, but also too crucial to disappear.”

Standard & Poor’s, the rating agency, last week warned that the US banking industry — which generated $195bn of profits last year — could swing to a $15bn loss in the next 12 months. Analysts at Berenberg say US and European lenders are facing an average 30 per cent plunge in profits this year and next. “Confronted with reduced activity, lower-for-longer interest rates, inflexible costs and higher loan losses, the outlook for bank earnings is one-way traffic,” they wrote in a recent note to clients.

Despite these headwinds, some bank executives have projected confidence. Ana Botín, executive chairman of Santander, the eurozone’s largest lender, told a financial services conference in March that the bank was forecasting only a 5 per cent drop in earnings this year, and that it expected no impact on its capital levels or midterm financial targets. Appearing via video link from a locked down Madrid, Ms Botin said those estimates were based on a “V-shaped” recession — a sharp shock followed by a rapid recovery, but stressed this was only one possible scenario.

However, some bankers say that such talk is premature, bordering on wishful thinking.

“If someone can tell me when they think [the virus] is going to be contained globally, and we will get back to a normalised global economy, then I can tell you what the credit cycle will look like,” says an executive at a rival global bank.

“But given that no one can predict that, I find it hard to see people going out and being so confident.”

The depth of credit losses hinges on the amount of risk that countries are willing to share with the banking sector. Governments and central banks have rolled out fiscal and monetary stimulus programmes on a scale not seen

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since the second world war, ranging from central bank-backed credit facilities to loan guarantees and bailouts for industries including the US aviation sector.

One Swiss bank executive says that absent such extraordinary support, banks’ loss-absorbing capital buffers “would have been like a brolly in a hurricane”.

One banker advising the UK government — which has earmarked £330bn for corporate loan guarantees and a commercial paper financing facility — says the schemes are untested. In particular, he warns that the guarantees will only apply to future lending.

“It’s for new money, not for all the loans we’ve already made that are going to go bad.”

Bank executives have also warned that new accounting rules in Europe — which force lenders to set aside provisions for bad loans at an earlier date — will aggravate the problem by quickly impairing capital buffers and crimping their ability to lend at the very moment companies and consumers need cash. Policymakers are sympathetic, and have taken steps to reduce the shock of the new regulations. On Friday, regulators agreed to soften the impact of similar rules in the US. But relaxing the rules will only buy time. “If the world blows up and all this government intervention doesn’t work, then this will eventually get to banks,” says the banker advising the UK government. “It will be an old-fashioned credit loss crisis, but on a scale not seen before.”

Even if banks can absorb the losses, some of the actions taken by policymakers will hurt the sector in the long run. Although recent interest rate cuts by the US Federal Reserve and the Bank of England are intended as a temporary measure, the 2008 crisis showed that central banks can struggle to increase rates once an immediate economic shock has @Businessdayng

passed. Meanwhile, a boom in first-quarter trading revenues for investment banks will probably only provide a short-term fillip.

Standard Chartered’s head of finance Andy Halford warns that “incredibly low interest rates” could cause corporate and retail depositors to move their cash out of accounts that have tended to pay a higher rate of interest in exchange for having the deposit locked up for a specific period of time. “Banks like to have deposit stickiness that can be used to underpin lending,” he says. “[If] there is less inclination to put money into sticky pots, there is less confidently there for circulation into the system.”

The coronavirus crisis might have given banks an opportunity to repair their public image, but it also brings new reputational risks.

As the transmission mechanism for doling out state aid, they will be required to perform a thorny task: deciding which companies should receive financial assistance and which would have struggled to survive regardless of the virus, and should therefore be cut loose. One policymaker says “picking winners and losers” could provoke a longterm public and political backlash against the banks.

“We want to avoid any moral hazard . . . governments should not just shell out money,” says Lars Machenil, chief financial officer of BNP Paribas, the French bank. “If a company, an airline for example, was in good shape in February then the government guarantees are [there] just to get it through the Covid-19 period.”

Mr Corbat says banks must walk a “fine line” between “being as supportive as we can be” without “in any way calling into question the soundness” of the bank or the financial system. “The last thing that we all want to see is . . . our consumers, our small businesses and our big businesses coming out of this . . . [with a] precariously bigger or larger position of indebtedness.”

39

Wednesday 01 April 2020

BUSINESS DAY

FT

NATIONAL NEWS

Global stocks tumble after dire warnings on virus toll US stocks open sharply lower following worst quarter since 2008 Adam Samson, Mamta Badkar and Hudson Lockett

A

new quarter brought a fresh jolt of volatility to global equity markets on Wednesday, with Wall Street opening down as the coronavirus crisis worsened in the US and pressure on economies around the world mounted.

The S&P 500 fell 3.7 per cent as trading began, with banks and technology stocks particularly hard hit. The Nasdaq Composite declined 3.1 per cent.

London’s FTSE 100 dropped 3.7 per cent while Frankfurt’s Dax and Paris’s CAC 40 were down roughly 4 per cent. The Europe Stoxx 600 fell 3.2 per cent.

The new leg down for global equities, which followed the worst quarter for markets since the 2008 financial crisis, came after President Donald Trump warned that up to 240,000 people could die in the US from Covid-19.

Italy and Spain, the two worsthit countries in Europe, have shown some signs of improvement in recent days, as the centre of the coronavirus crisis quickly shifts to the US. “Europe seems to have reached, if not [passed], the peak in new infections,” said Marco Wagner, economist at Commerzbank. “In the US, on the other hand, the situation is becoming more acute.

A flattening of the infection curve

President Trump issued a warning about the spread of coronavirus in the US that inflamed fears about the potential damage to the world’s largest economy © AFP via Getty Images

is still not apparent.”

On Tuesday, Mr Trump warned Americans of a “very, very painful two weeks” ahead while Anthony Fauci, a top government health official, said people should be prepared for high fatalities.

Coronavirus business update How is coronavirus taking its toll on markets, business, and our everyday lives and workplaces?

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Sign up here The world’s biggest economy, like many others, has already

shown severe signs of strain from the lockdowns prompted by the pandemic, with the number of people seeking unemployment benefits shooting late last month to a historic high of 3m.

In a sign of the heavy blow faced by investors globally, the UK’s biggest banks announced after the close of trading on Tuesday that they would scrap billions of pounds worth of dividends under pressure from the country’s top financial regulator.

Bank shares dropped on Wednesday, with HSBC down

about 9 per cent, and Barclays, Lloyds Banking Group and Royal Bank of Scotland falling about 5 per cent. US banks tracked their European counterparts lower, with broader KBW bank index, one of the most widely tracked measures of the performance of the US banking sector, down 6 per cent.

Business executives in the eurozone, Japan and South Korea reported a marked deterioration in the factory sector in March compared with February, according to purchasing managers’ indices that are closely watched by investors as

leading economic indicators.

Robert Carnell, Asia-Pacific head of research at ING, said Wednesday’s Asia PMI readings confirmed a “grim picture” for manufacturers. He added that “the prospect for most economies’ manufacturing sectors as they head into the second quarter is for even more weakness, exacerbated where lockdown measures are newly enacted or tightened”.

Most Asian markets were lower, with Japan’s Topix down 3.7 per cent and South Korea’s Kospi off 3.9 per cent. China’s CSI 300 slipped 0.3 per cent.

The Institute for Supply Management is also set to publish its latest reading on the US factory sector, which is considered to be one of the best forward-looking proxies for the rate of change in US gross domestic product.

Economists polled by Reuters expect the ISM gauge to sink to 45 in March from 50.1 the previous month. A reading below 50 points to a contraction in the sector.

Global equities had rallied over the last week amid quarterend portfolio rebalancing, and as investors pinned their hopes on huge stimulus efforts by policymakers and the eventual slowing of the spread of Covid-19.

The yield on 10-year US Treasuries, viewed as a haven during times of market uncertainty, slipped 0.09 percentage points to 0.611 per cent. Yields fall as bond prices rise.

Zambia’s bonds drop on expected restructuring

Investors brace for wave of debt defaults across emerging-market countries and companies Tommy Stubbington and Laurence Fletcher

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a m b i a ’s b o n d s h a v e slumped after the country’s government called in advisers to help restructure its debt, as investors worry that the coronavirus crisis could trigger a wave of defaults in emerging markets.

The copper exporter was already struggling with a growing debt burden, much of it in the form of loans from China, before the pandemic caused big outflows from emerging-market debt funds and a plunge in metals prices. On Tuesday, Zambia’s finance ministry contacted banks asking for advice on restructuring up to $11.2bn of foreign debt, according to Bloomberg.

The ministry also said it will not restructure without first consulting creditors and it aims to get its debt on a sustainable footing.

The country’s dollar bonds, which have long traded at a sharp discount to their face value, tumbled further to around 38 cents on the dollar. The bonds traded in the low 60s at the start of the year.

“This is the government recognising what the market already

knew,” said Kevin Daly, a fund manager at Aberdeen Standard Investments. “They have been relying on Chinese loans for big infrastructure projects but the debt just isn’t sustainable.”

Zambia’s currency, the kwacha, is among the worst performers in www.businessday.ng

the world so far this year, losing 22 per cent of its value against the dollar.

The coronavirus pandemic has hit emerging economies hard, prompting fears that many may struggle to service their overseas debt. Ecuador’s Congress, for

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example, last week called on the government to suspend debt payments to free up cash to fight the virus.

“The big question we have is who is next?” said Mr Daly, adding he thought oil producers in the emerging world could also @Businessdayng

run into trouble.

“Everything that was weak before the crisis is now getting destroyed,” said one emerging markets hedge fund manager.

“Zambia was stressed before, and now it’s properly distressed.

The dominoes are starting to fall now, I think we’ll definitely see more [emerging market] corporates restructure.”

Angolan bonds have also dropped sharply. A 10-year bond sold by the oil-rich nation in November, to bumper demand from investors, is trading at roughly 35 cents on the dollar.

Zambia first tapped bond markets in 2012, when the glamour for high-yielding dollar assets allowed it to borrow more cheaply than Spain. Further sales followed in 2014 and 2015, and the country has roughly $3bn of dollar bonds outstanding.

Uday Patnaik, head of emerging market debt at Legal & General Investment Management, said a restructuring of the bonds could be a precondition for Zambia receiving emergency aid from the IMF. “The IMF will only lend to you if they think your debt is sustainable,” he said.

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Sale of cooking gas is excluded from banned services during Covid-19 lockdown - NALPGAM IFEOMA OKEKE

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he Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) says the selling of Liquefied Petroleum Gas (LPG), also known as cooking gas, is exempted from the lockdown put in place by both the Federal and Lagos State governments to contain the Coronavirus pandemic.

NALPGAM made the clarification in a statement issued

by Bassey Essien, its executive secretary on Wednesday in Lagos.

Essien said: “The President of the Federal Republic of Nigeria in his broadcast on Sunday 29th March, 2020 with respect to the coronavirus pandemic and some of the measures taken to curtail the spread of the virus announced the lockdown of Lagos and Ogun States and Abuja effective 11pm Monday 30th 2020 with restriction of movements except for essential services.

“Same pronouncement has been adopted by state governors to restrict human and vehicular movements within their domains.

“For the avoidance of misinterpretation of the directive, NALPGAM had sought for a clarification with the Lagos State Ministry of Energy and Resources on the inclusion of gas plants and retailer outlets as essential services to the people, as a result of the place of Lagos State in the social economical position of the country.”

The fact that people have to stay indoors for two weeks in the first instance, entail that households must cook and eat for the stay at home order to be effective, he said.

“While the directive listed petroleum products and petrol stations as essential services, the association needed a clarification on the status of gas filling plants and cooking gas retail outlets as cooking is essential to the survival of households,” he said.

According to Essien, the clarification was also sought to avoid the overzealousness of security personnel in enforcing the order.

He said the Lagos State government through the Ministry of Energy and Mineral Resources granted the approval that gas plants and cooking gas retailers and their personnel were classified as essential service providers and their product essential in ensuring the sustainability of the people’s continued stay at home to curtail the spread of Covid-19.

Therefore, LPG plants are part of the Essential Services and are thus exempted from the Lockdown and should thus be granted access to the smooth running of their facilities and operations, and also free movement of their personnel from their homes to the facilities.

Nigeria most vulnerable as Saudi/Russia oil price war goes full-blown this month Olusola Bello

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ffective Wednesday, the price war between the two world’s largest oil producers, Saudi Arabia and Russia went into top gear with the consequences weighing heavily on Nigerian revenues, as Nigeria depends solely on crude oil for her foreign earnings and economic growth.

The two countries are set to increase production dramatically this month, after an agreement between OPEC and its allies to lower output expired at the end of March.

Prices could continue to fall as producers flood the market with increased production levels that are likely to last “until June at

least,” Ravi Krishnaswamy told CNBC. Oil prices have fallen more than 60 percent since the beginning of 2020 amid the coronavirus crisis and a price war led by Riyadh and Moscow. The price of crude fell to as low as $23.03 per barrel this week, a situation that has also made Nigeria adjusts its pump price to N123 a litre.

Analysts say there are possibilities that the price could still be adjusted further down, depending on how the price war turns out.

Saudi Arabia could potentially claim the top spot. State-owned Saudi Aramco said in a statement last month that it would provide 12.3 million bpd of crude oil in April. That is nearly 2 million bpd more than an estimate for March,

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according to Refinitiv Eikon data Russia’s Energy Minister Alexander Novak said his country could increase its production by 200,000bpd to 300,000bpd in the short term, and 500,000bpd in the longer term. Its output was around 11.3 million bpd in February.

The crash in crude oil prices means volume is especially important for oil-dependent Nigeria, and as there will be no OPEC output limits to adhere to this month after, the country can pump at will.

The current drop in oil prices is hitting the country hard, making a big dent on government revenues and threatening the viability of upstream projects.

Experts are however of the view that even if every country

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decides to produce at will, it may not be able to produce beyond 2.3million barrels per day giving the fact that the country has been too lackadaisical about exploration activities. To achieve this may take a few years.

They also say even at this volume of production Nigeria would have to sell it commodity at a highly discounted rate to be able to create market for it, and the revenue from it may not make so much impact on the economy.

According to Petroleum Economist, the country is bracing up to take a big hit from the collapse in oil prices resulting from the end of the OPEC+ agreement and the Covid-19 pandemic.

Nigeria is particularly vulnerable as it has yet to fully recover from the previous crash in 2014.

@Businessdayng

Nigeria’s 2020 budget is based on an anticipated oil price of $57/bl, but the decline in the price of the Brent benchmark crude has forced the government to revise this to $30/bl while maintaining proposed production volumes at 2.18m bl/d, condensate inclusive.

Diran Fawibe, chairman/ chief executive of IESL/Doris Joint Venture, said presently Nigeria could hardly produce up to 2.6 million barrels per day, which it did just a few times in the past. He, however, stated that if the country was able to improve national production through exploration it might be able to produce above 2 million bpd. This will, however, depend on market availability while the crude is also discounted.

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Covid-19: Edo increases isolation centres capacity to 280-bed … as construction of over 100 screening points ongoing in 18 LGAs

IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin

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do State government says it has increased its isolation capacity to 280-bed for the management of Coronavirus (Covid-19) pandemic cases in the state.

The state governor, Godwin Obaseki, who made the disclosure in a broadcast in Benin City on Tuesday, said government had also increased the number of ventilators to 28, Intensive Care Units (ICU) to 10 while over 100 screening centres were being set up across the 18 local government areas to contain the spread of the virus.

Obaseki said the state government was deploying its resources to confront the pandemic, saying, “The pandemic is real, and like the rest of the world, we are fighting to get ahead of the outbreak and protect our people. So far, we have two confirmed cases in Edo State.

“Edo State plan to combat the COVID-19 virus is centred on creating awareness, training the state’s healthcare workforce, and screening, testing and providing prompt treatment.

“We now have Isolation Centres with a total of 280 beds located at the Stella Obasanjo Hospital Benin, University of Benin Teaching Hospital, Irrua Specialist Hospital and the

Auchi General Hospital.

“In addition, we have secured 25 additional ventilators increasing the total number of ventilators to 28. 10 Intensive Care Units now exists in the state to take care of critical cases.

“To this end, we are ensuring that everyone living in Edo state whether in the cities or rural areas is provided with ample information about the COVID-19 virus so that they can protect themselves and their families.

“We are providing training for over 6,000 Healthcare professionals from public and private institutions so that they can have appropriate information and tools to support and care for our people.

“We stand a good chance to win the fight against Covid-19, if we all obey the social distancing measures and the government’s stay-at-home order as prescribed. This is what will help us reduce further spread of the virus.”

The governor added that establishment of over 100 screening points across the 18 local government areas were ongoing in the teaching hospitals, general hospitals, primary health centres and private hospitals in the state.

LASU develops new self-test Mobile App to support fight against Covid-19 KELECHI EWUZIE

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epartment of Computer Science, Lagos State University, Ojo (LASU),hasdeveloped amobileapptoenableindividuals do a self-test of Covid-19.

This action, according to the institution, is part of efforts of LASU to create awareness to the general public on the ongoing coronavirus pandemic.

In a statement by Ademola Adekoya, coordinator, centre for information,pressandpublicrelations,LASU,andmadeavailableto BusinessDay,LASUnotesthatthis innovation was led by Benjamin Aribisala,aprofessor,ablyassisted byotherteammemberswhichinclude: Oluwatoyin Enikuomehin; Olusola Olabanjo; Abdulazeez Saheed, and Abdulazeez Anjorin

of Microbiology Department.

The statement further says the software has been tested and certified by the Provost, Lagos State University College of Medicine (LASUCOM), Ikeja, and will be available on Playstore from April 7, 2020.

Meanwhile, Abiodun Adewuya, provost, Lagos State University College of Medicine, has urged well-meaning Nigerians to curtail the spread of Covid-19 through the production of Word Health Organisation approved standardhandsanitizerandspray.

The production of the sanitizer and spray powered by the College was spear headed by the College Technologists According to Abayomi Ajikobi, the vice chairman, National Association of Academic Technologists (NAAT)

LASUCOM, “The production, which is still ongoing, started on Friday, March 27, 2020.”

He lauded the Provost for his pro-activeness in financing the production of the hand sanitizers, adding that the efforts of his members in the last one week, which included their participation in a day WHO seminar on blood collection which took place at the Medical Research Centre (MRC) in the College premises, was in readiness toserveasvolunteer workers in any of the isolation centres in the state.

On his part, Olanrewaju Adigun Fagbohun, vice chancellor, LASU, has lauded senior members of staff who, in the last one week, since the work-from-home directive of the Lagos State government, remained at their duty poststoensurethattheday-to-day

administration of the University was not completely grounded.

Fagbohun reserved special mention to members of staff on essential duties (security, health centre, works and services and some members of staff below level 11 who had to be present for some special assignments) The vice chancellor observes that as a University, the LASU community are not insulated from the inconveniences that came with the halting of our daily activities as a result of the COVID-19 pandemic.

He urged all to strictly adhere to necessary precautions such as constant washing of hands, maintaining social distancing, avoiding hugging and handshakes, and contacting the authorities when we notice any of the symptoms of the virus.

FG begins disinfection, decontamination of FCT Onyinye Nwachukwu, Abuja

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ederal Government says it will commence the disinfection and decontamination of the Federal Capital Territory (FCT) beginning with the Ministries, Department and Agencies (MDAs) buildings as well as

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markets.

Minister of environment, Mohammed Mahmood, announced this Wednesday at a press briefing by the Presidential Task Force on COVID-19 in Abuja.

The disinfection is one of the critical steps government is adopting to check further spread of the disease, Mahmood said.

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According to Mahmood, this has become necessary given that droplets from a carrier of the dreaded can stay on surfaces for a while and then get others infected.

Federal Airport Authority of Nigeria (FAAN) had announced on Tuesday that the commencement of the decontamination and disinfection of the Nnamdi Azikiwe

@Businessdayng

International Airport’s new international terminal against Covid-19.

This was revealed in its twitter account @FAAN_official.

Nigeria has already recorded 151 Coronavirus cases, according to the Nigeria Centre for Disease Control (NCDC), with several of them imported from abroad.

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Why Africa needs coordinated governance to stunt Covid-19 spread Temitayo Ayetoto

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frica will require more than having young majority population and harsh climatic conditions to stunt the spread of the deadly coronavirus currently destabilising normalcy across the world.

Governments across the continent especially need to harness sound coordination of efforts at pushing the pandemic to a standstill, The Mo Ibrahim Foundation has urged in a new report calling for improved health structures and better data to win the crisis.

There is an urgent need to act on the lessons learned from the Ebola outbreak of 2015 and address the specific weaknesses of Africa’s health structures including unhindered citizens, says the report entitled ‘Covid-19 in Africa: A Call for Coordinated

Governance, Improved Health Structures and Better Data’.

This is coming as the World Health Organisation, African Region (WHOAFRO) said on Tuesday afternoon that over 5,000 cases of coronavirus have been confirmed in Africa with over 157 deaths, with South Africa, Algeria and Burkina Faso most affected by the outbreak in the region.

South Africa has 1,326 confirmed cases with three deaths, making it the country with the highest number of cases, while Egypt has a total of 40 deaths making it the highest, WHOAFRO said via an update through its official Twitter account.

Only 10 African countries provide free and universal health care to their citizens. Health care in 22 countries is neither free nor universal, stirring inevitable need for governments to make

swift improvements.

Although 43 African countries have capacity to test for COVID-19, according to Africa Centres for Disease Control and Prevention (Africa CDC), The Mo Ibrahim Foundation laments that they are less prepared for the effective point of entry screening and monitoring of travellers and treatment of cases.

Data coverage on health facilities and health outcomes in Africa is low. Only eight African countries have complete birth registration systems, impacting the timely production of data, crucial during health emergencies. Quality statistics and the funding and autonomy of national statistics offices are essential for all stages of evidencebased decision-making and policy formulation.

“Efforts to strengthen and enhance preparedness could help to save lives. With the gen-

eral weakness of health structures, from human resources to equipment and supply chains, working together is critical now more than ever,” the report says.

“Many National Public Health Institutes (NPHIs) have been created after health systems failed to respond to crises due to fragmented and insufficient responses. Finding ways to collaborate and work together to fight this challenge, protect lives and improve health capabilities is critical,” it says.

According to the 24-page analysis, Africa has shown increasing improvement in Public Health Campaigns – +0.6 since 2008 according to the IIAG – with 20 countries seeing an improvement in score. But 15 countries have also registered a decline, necessitating national information and awareness-raising campaigns to tackle misinformation and fake news.

Coronavirus: NSC seeks free access to banks, agencies staff to facilitate port operations

…commits N10m in fight against Covid-19 pandemic AMAKA ANAGOR-EWUZIE

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he Nigerian Shippers’ Council (NSC), port economic regulator, has listed 21 industry players including banks, Nigeria Customs Service, Nigerian Ports Authority, Port Health Services, banks, shipping line agencies and terminal operators, whose services are required to enable seamless operations during the 14-day lockdown in Lagos.

According to the Council, field and operational officers as well as essential staff of all the agencies as well as organisations involved in cargo clearance at the port shall be granted freedom of movement to and from ports, upon presentation of valid means of identification.

Speaking in a statement issued in Lagos recently, Hassan Bello, executive secretary of the Council, said the present situation had indeed caused unimaginable disruption on the logistics supply chain such that users and providers of services are seemingly unable to carry out their obligations for reasons beyond their control.

“The President has made it clear that ports should stay operational. Port workers, users and providers of services as well as government agencies are part of essential services and should

have unfettered access to the ports. The President also directed that there should be movement of cargo as long as they have been subjected to necessary checks. For cargo delivery and evacuation from seaports to be effective, interstate cargo movement by road and rail should not be restricted,” Bello solicited.

Stating that the Council has been inundated with complaints that banks are not offering services with respect to port operations, Bello pointed out that such development would hamper cargo clearance from the ports.

He assured cargo owners that the attention of banks have been drawn to the notice by the Federal Ministry of Finance and Central Bank of Nigeria, which allows skeletal operations in the financial system during the lockdown, adding that port operation as indicated by the President, is also an essential service.

“Nigeria Shippers’ Council, as Port Economic Regulator is conscious of the fact that obligations, responsibilities, duties and rights may have been frustrated. Therefore, the Council is discussing with all parties so that a balanced solution can be achieved especially on the issue of demurrage and incentives to facilitate the clearance of goods from the ports,” he said.

Lekki Deep Seaport receives $221m equity funding from China Harbour …appoints Du Ruogang as new CEO AMAKA ANAGOR-EWUZIE The ever busy Third Mainland Bridge without a single vehicle as part of the 14 days total lockdown directive by the FedPic by Pius Okeosisi eral Government to curb the spread of the Coronavirus in the country.

Covid-19: FG begins payment of N10,000 each to 48,000 rural poor in Nasarawa Solomon Attah, Lafia

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n a bid to cushion the effect of stay-at-home directive, as part of measures to curtail the spread of Covid-19, the Federal Government has begun the payment of N10,000 to 48,000 rural people in Nasarawa State.

The gesture, which was part of Federal Government’s conditional Cash Transfer policy, would be spread across rural communities of Lafia, Awe, Wamba, Akwanga, Kokona and Nasarawa local government areas of the state.

At the flag-off of the programme with state distribution committee members at the Government House in Lafia, Governor Abdullahi Sule disclosed that the payment of the N10,000 conditional cash transfer programme of the Federal Government was to commence Wednesday.

The governor said his administration held in high esteem the credibility and confidence reposed in the state by the Federal Ministry of Humanitarian Affairs and Disaster Management, and as such the opportunity would

not be jeopardised.

He added that all precautions and preventive measures against the spread of Covid-19 must be adhered to in order to keep the state safe, saying, “The payment of N10,000 each to beneficiaries of this programme in the state will commence tomorrow in six local governments.”

He further stated that the state was in the process of procuring foodstuffs and other essentials that would reduce the hardship faced by the people at this trying moment, and also to protect the people against the Coronavirus pandemic.

The governor assured that every kobo donated as support to the fight against Covid-19 would judiciously be utilised for the purpose it was meant.

In their separate remarks, the commissioner for information, culture and tourism, Dogo Danladi Shammah and that of local government and community development, Aliyu Turaki, maintained that government at the federal and state levels were aware of the plight of the people at this moment and were doing everything possible to support the masses. www.businessday.ng

T-Bill auction records N66bn failed transactions amid low investment vehicles ENDURANCE OKAFOR

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ore than N65.79 billion worth of unsuccessful transactions were recorded at the Nigerian Treasury Bills (T-Bills) auction conducted Wednesday by the Central Bank of Nigeria (CBN) on behalf of the Federal Government of Nigeria (FGN) due to the excess liquidity in search for investments options.

Fixed-income investors seeking high-yielding securities were thus disappointed, as attempts to buy the Federal Government short-term debt instruments at attractive rates were denied as currenteconomiccrisispresented fewer investment opportunities.

“There is strong liquidity in the market but not enough investment vehicles,” Ayorinde Akinloye,aresearchanalystatCSL stockbrokers, said.

Investors bid at rates that were as high as 3.75 percent, 4.85 percent and 10 percent on the 91day, 182-day and 364-day bills, respectively.

Subsequently, the apex bank lowered rates to 2.2 percent, 3.2 percent, on the 91-day, and 182daymaturities;afurtherdropfrom the 2.6 percent and 3.4 percent recorded in the previous auction.

Investors’ rush for the long term maturity crashed the rate to 4.4 percent away from the 5.6 percent reported in the last auction.

“Stop rates dipped across all tenors due to limited investment options,” Ayodeji Ebo, managing director, Afrinvest Securities Limited said.

Analysis of the market result seen by BusinessDay on Wednesday showed that investors jostled for the N95.6 billion the CBN sought to raise at the auction with N161.39 billion, meaning investors oversubscribed by a whopping N65.79 billion.

“Opportunities to put money into right now are limited. As banks de-risk their portfolio and hold more liquid assets to act as a buffer for the tsunami of loan defaults that are coming,” Obinna Uzoma, chief economist at EUA Intelligence said, adding that more money is therefore parked in treasury Bills.

A breakdown of the result revealed the bid for the 91 -day maturity was investors were willing to pay more than the CBN was offering. While the CBN offered N10 billion investors were willing to subscribe with N20.7 billion, a total of N10.7 billion was reported as failed transactions.

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he Lekki Port LFTZ Enterprise Limited (LPLEL) said on Wednesday that it has received a total of $221,047,248 as equity funding from China Harbour Engineering Company (CHEC), one of the shareholders in seaport project, currently under construction at the Lagos Free Trade Zone, Ibeju-Lekki.

“I am pleased to confirm that Lekki Port has received the $221,047,248 equity funding from China Harbour Engineering Company. The payment was received on Monday, 30th March 2020,” Biodun Dabiri, chairman of Lekki Port LFTZ Enterprise Limited, said in Lagos at the end of a board meeting held on Tuesday via teleconferencing, according to a statement issued on Wednesday.

Dabiri said the equity injection, coming at a time when the world is battling the coronavirus pandemic shows CHEC’s deep commitment to the success of the port project, which would greatly contribute to fast-tracking the timely delivery of the project and bringing about economic prosperity to Nigeria as a whole.

This is coming barely five months after the Lekki Port LFTZ Enterprise Limited sealed a deal in Lagos in October 2019 with the China Development Bank (CDB) for the funding of the Lekki Deep Seaport project to the tune of $629 million.

The signing of facility loan agreement was then seen as a major step towards the port project’s financial closure, which indicated that the project would @Businessdayng

move to the construction stage, and it was expected to be delivered in 2021.

Lekki Deep Seaport, a multipurpose port that is being built at the heart of the Lagos Free Trade Zone, will be one of the most modern ports, supporting the growing trade across Nigeria and the entire West African region.

The shareholders of the project are the Nigerian Ports Authority, the Lagos State Government, China Harbour Engineering and Tolaram Group.

At completion, Lekki Port would consist of three container berths that would receive the first generation container ships with the ability to accommodate 1.2 million Twenty-foot Equivalent Units (TEUs) of containers in the first phase.

Dabiri also announced the appointment of Du Ruogang as the new chief executive officer for Lekki Port LFTZ Enterprise Limited (LPLEL) with immediate effect.

He said Ruogang is expected to oversee the overall business planning, development and management of the company.

Ruogang, while accepting the appointment, said he would collaborate with all key stakeholders including the lenders, insurers, and EPC contractor as well as government regulators to ensure the smooth and successful development of Lekki Port.

Ruogang has robust experience in port investment, financing and operation and holds double bachelors in Engineering Management and Industrial Design from Tianjin University, China. He has been with CHEC since 2007.

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Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 204,385.05 5.75 -3.36 211 14,109,438 169,287.14 4.95 -1.00 157 6,161,153 UNITED BANK FOR AFRICA PLC ZENITH BANK PLC 357,920.03 11.40 -2.56 800 38,672,478 1,168 58,943,069 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 139,991.64 3.90 -1.27 262 14,936,741 262 14,936,741 1,430 73,879,810 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,002,884.08 98.40 9.33 118 1,781,766 118 1,781,766 118 1,781,766 BUILDING MATERIALS DANGOTE CEMENT PLC 1,990,331.26 116.80 -9.95 103 1,287,082 LAFARGE AFRICA PLC. 148,191.72 9.20 - 44 476,284 147 1,763,366 147 1,763,366 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 320,408.06 544.50 - 13 3,561 13 3,561 13 3,561 1,708 77,428,503 REAL ESTATE INVESTMENT TRUSTS (REITS) SFS REAL ESTATE INVESTMENT TRUST 1,386.00 69.30 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 8,405.05 3.15 - 0 0 0 0 0 0 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 0 0 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 1 10,000 52,512.75 55.05 - 4 3,064 OKOMU OIL PALM PLC. PRESCO PLC 36,450.00 36.45 - 6 14,311 11 27,375 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,500.00 4.25 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,920.00 0.64 8.47 9 547,135 9 547,135 20 574,510 DIVERSIFIED INDUSTRIES JOHN HOLT PLC. 217.92 0.56 - 0 0 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 26,421.19 0.65 -1.52 36 1,723,403 TRANSNATIONAL CORPORATION OF NIGERIA PLC U A C N PLC. 19,304.69 6.70 -6.94 30 4,095,453 66 5,818,856 66 5,818,856 BUILDING CONSTRUCTION ARBICO PLC. 423.23 2.85 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 29,106.00 22.05 - 48 164,671 ROADS NIG PLC. 165.00 6.60 - 0 0 48 164,671 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,468.48 0.95 - 4 17,330 4 17,330 52 182,001 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 6,263.60 0.80 - 12 28,150 GOLDEN GUINEA BREW. PLC. 829.98 0.81 - 0 0 GUINNESS NIG PLC 49,721.69 22.70 -9.92 16 229,965 INTERNATIONAL BREWERIES PLC. 143,712.07 5.35 9.18 51 1,367,511 NIGERIAN BREW. PLC. 198,323.17 24.80 -3.31 54 6,170,291 133 7,795,917 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 106,800.00 8.90 -1.11 75 2,968,864 FLOUR MILLS NIG. PLC. 78,522.27 19.15 -9.88 21 375,683 HONEYWELL FLOUR MILL PLC 7,771.59 0.98 - 19 211,275 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 22,520.23 8.50 - 18 35,525 UNION DICON SALT PLC. 2,993.06 10.95 - 0 0 133 3,591,347 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 13,335.23 7.10 4.41 31 476,264 NESTLE NIGERIA PLC. 606,382.03 765.00 - 98 165,505 129 641,769 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 5,316.09 4.25 - 4 18,080 4 18,080 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 17,470.10 4.40 - 2 6,060 UNILEVER NIGERIA PLC. 56,875.55 9.90 -10.00 38 641,030 40 647,090 439 12,694,203 BANKING ECOBANK TRANSNATIONAL INCORPORATED 74,315.68 4.05 -8.99 29 1,118,952 FIDELITY BANK PLC 50,705.89 1.75 -1.69 92 10,654,319 GUARANTY TRUST BANK PLC. 516,517.20 17.55 -0.85 477 22,252,257 JAIZ BANK PLC 14,142.84 0.48 - 8 102,943 STERLING BANK PLC. 31,669.46 1.10 -4.35 12 225,283 UNION BANK NIG.PLC. 192,196.97 6.60 - 6 79,820 UNITY BANK PLC 4,909.52 0.42 - 9 103,432 WEMA BANK PLC. 18,515.74 0.48 -4.00 16 473,898 649 35,010,904 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 8,497.65 0.75 -1.32 19 2,937,408 AXAMANSARD INSURANCE PLC 18,375.00 1.75 - 2 200,006 CONSOLIDATED HALLMARK INSURANCE PLC 2,439.00 0.30 - 0 0 CORNERSTONE INSURANCE PLC 8,837.70 0.60 - 0 0 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,537.92 0.21 -4.55 8 1,718,000 LAW UNION AND ROCK INS. PLC. 4,081.51 0.95 - 12 1,676,000 LINKAGE ASSURANCE PLC 3,280.00 0.41 - 4 37,705 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 0 0 NEM INSURANCE PLC 10,930.64 2.07 - 6 39,500 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 2,960.40 0.55 - 1 10 REGENCY ASSURANCE PLC 1,333.75 0.20 - 1 1,000 SOVEREIGN TRUST INSURANCE PLC 2,272.89 0.20 - 0 0 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 1 10,000 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 6,237.84 0.26 4.00 8 588,084 62 7,207,713 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,629.63 1.15 - 2 3,000 2 3,000

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 6,784.62 1.05 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,671.82 1.36 - 0 0 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,200.00 3.60 -2.70 8 229,772 CUSTODIAN INVESTMENT PLC 32,938.44 5.60 -5.08 21 668,448 DEAP CAPITAL MANAGEMENT & TRUST PLC 495.00 0.33 - 0 0 FCMB GROUP PLC. 29,704.07 1.50 -0.67 75 4,676,621 ROYAL EXCHANGE PLC. 1,029.07 0.20 - 0 0 STANBIC IBTC HOLDINGS PLC 255,270.71 24.30 - 17 92,189 UNITED CAPITAL PLC 12,360.00 2.06 -6.36 85 3,878,117 206 9,545,147 919 51,766,764 HEALTHCARE PROVIDERS EKOCORP PLC. 2,991.61 6.00 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 888.28 0.25 -3.85 9 2,107,200 9 2,107,200 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 593.50 0.60 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 5,299.36 2.54 - 14 65,557 GLAXO SMITHKLINE CONSUMER NIG. PLC. 5,261.86 4.40 - 33 445,079 MAY & BAKER NIGERIA PLC. 3,692.00 2.14 - 8 39,100 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 911.60 0.48 - 0 0 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 55 549,736 64 2,656,936 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 3 316,012 3 316,012 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,000.21 0.34 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 216.00 2.00 - 5 75 TRIPPLE GEE AND COMPANY PLC. 287.07 0.58 - 1 2,105 6 2,180 PROCESSING SYSTEMS CHAMS PLC 986.17 0.21 -4.55 15 1,352,512 E-TRANZACT INTERNATIONAL PLC 10,962.00 2.61 - 0 0 15 1,352,512 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,123,311.48 298.90 - 12 1,768 12 1,768 36 1,672,472 BUILDING MATERIALS BERGER PAINTS PLC 1,941.82 6.70 - 3 236 BUA CEMENT PLC 1,195,411.70 35.30 - 2 145 CAP PLC 16,240.00 23.20 - 2 4,793 MEYER PLC. 265.62 0.50 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,769.32 2.23 - 0 0 PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 7 5,174 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,192.12 2.03 - 0 0 CUTIX PLC. 2,465.85 1.40 - 8 69,684 8 69,684 PACKAGING/CONTAINERS BETA GLASS PLC. 34,998.04 70.00 - 2 7 GREIF NIGERIA PLC 388.02 9.10 - 0 0 2 7 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 17 74,865

CHEMICALS B.O.C. GASES PLC. 1,685.79 4.05 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 1 10,000 1 10,000 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 77.00 0.35 - 0 0 0 0 1 10,000 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 0 0 0 0 INTEGRATED OIL AND GAS SERVICES OANDO PLC 25,484.40 2.05 - 13 128,788 13 128,788 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 58,019.78 160.90 - 7 83 ARDOVA PLC 17,974.24 13.80 - 4 20,845 CONOIL PLC 9,125.47 13.15 - 7 35,354 ETERNA PLC. 3,116.91 2.39 - 1 1,500 MRS OIL NIGERIA PLC. 4,206.05 13.80 - 2 680 TOTAL NIGERIA PLC. 32,695.95 96.30 - 19 13,652 40 72,114 53 200,902 ADVERTISING AFROMEDIA PLC 1,509.28 0.34 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 15,796.05 1.62 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 235.27 0.20 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,686.42 2.90 -3.33 8 515,673 421.96 0.90 - 0 0 TRANS-NATIONWIDE EXPRESS PLC. 8 515,673 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,259.15 2.75 - 0 0 IKEJA HOTEL PLC 1,870.92 0.90 - 2 180,000 TOURIST COMPANY OF NIGERIA PLC. 7,076.28 3.15 - 0 0 TRANSCORP HOTELS PLC 30,401.62 4.00 - 0 0 2 180,000 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 3,960.00 0.33 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 205.63 0.34 - 0 0 LEARN AFRICA PLC 771.45 1.00 - 1 150 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 1 50 UNIVERSITY PRESS PLC. 427.10 0.99 - 0 0 2 200 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 580.20 0.35 - 0 0 0 0 SPECIALTY INTERLINKED TECHNOLOGIES PLC 688.80 2.91 - 0 0

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44

Thursday 02 April 2020

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Wednesday 01 April 2020

Top Gainers/Losers as at Wednesday 01 April 2020 LOSERS

GAINERS Opening

Closing

Change

Company

Opening

Closing

Change

MTNN

N90

N98.4

8.4

DANGCEM

N129.7

N116.8

-10.7

INTBREW

N4.9

N5.35

0.45

GUINNESS

N25.2

N22.7

-3

CADBURY

N6.8

N7.1

0.3

FLOURMILL

N21.25

N19.15

-0.38

UNILEVER

N11

N9.9

-0.06

N25.65

N24.8

-0.05

Company

NAHCO LIVESTOCK

N2.5

N2.6

0.1

N0.59

N0.64

0.05

NB

ASI (Points) DEALS (Numbers) VOLUME (Numbers) VALUE (N billion) MARKET CAP (N Trn)

21,100.54 3,415.00 154,550,658.00 1.767

N

MTNN Plc occupied topmost position after its share price moved up from N90 to N98.4, adding N8.4 or 9.33percent.

International Breweries Plc followed after rising from N4.9 to N5.35, up by 45kobo or 9.18percent and Cadbury Nigeria

Plc from N6.8 to N7.1, up 30kobo or 4.41percent.

The NSE ASI and market capitalisation decreased to 21,100.54 points and N10.996trillion respectively from preceding day high of 21, 300.47 points and N11.100trillion.

In 3,415 deals, Nigeria

equity dealers exchanged 154,550,658 units of stocks valued at N1.767billion.

Banking stocks were actively traded. They are stocks of Zenith Bank, GTBank, FBN Holdings, Access Bank and Fidelity Bank.

SEC activates business continuity process

I

n compliance with the Federal Government’s directives on the cessation of movement in Lagos, Ogun and the Federal Capital Territory, the Securities and Exchange Commission (SEC) has activated its business continuity process.

Consequently, staff of the Commission are working remotely while all its electronic channels remain open to provide the necessary support to capital market stakeholders.

This was stated in a circular dated March 31, 2020 and released by the SEC. According to the SEC, In light of the global pandemic of the Coronavirus Disease

Nikkei 225 18,065.41JPY -851.60-4.50%

S&P 500 Index 2,495.29USD -89.30-3.46%

Deutsche Boerse AG German Stock Index DAX 9,544.75EUR -391.09-3.94%

Generic 1st ‘DM’ Future 21,091.00USD -660.00-3.03%

Shanghai Stock Exchange Composite Index 2,734.52CNY -15.78-0.57%

FBNQuest Research:

Some likely winners amid the lockdowns Gregory Kronsten

A

Iheanyi Nwachukwu

Iheanyi Nwachukwu

FTSE 100 Index 5,454.57GBP -217.39-3.83%

10.996

Dangote Cement, other stocks drag NSE ASI to new low igeria’s equities market continued its decline for the third consecutive day this week caused this time by sell off in Dangote Cement Plc and other large cap stocks.

The Nigeria Stock Exchange (NSE) All Share Index (ASI) fell by 0.94percent at the close of remote trading session on Wednesday April 1.

Dangote Cement Plc recorded the highest decline after its share price moved from N129.7 to N116.8, losing N12.9 or 9.95 percent.

Guinness Nigeria Plc followed after decreasing from N25.2 to N22.7, down by N2.5 or 9.92percent and Flour Mills Nigeria Plc which was also down from N21.25 to N19.15, after shedding N2.1 or 9.88percent.

On the advancers list,

Global market indicators

(COVID-19) and in furtherance to the Commission’s circular of March 24, 2020, the Commission wishes to provide additional guidance to the Capital Market as follows: “All public companies are required to continue to make material disclosures to investors on the impact of COVID-19 Pandemic on their business operations.

“They should also continue to disclose the trend and outlook for the company, and updates on implementation of business continuity plans.

Public companies are to publish these disclosures on their websites and on other relevant media.

“Public companies who plan to conduct AGMs are required to ensure that the conwww.businessday.ng

duct of the meetings comply with the provisions of the Companies and Allied Matters Act, the Investments and Securities Act, the SEC Rules and Regulations, relevant government and health circulars and guidelines issued in this regard.

Debt Issuers are also expected to continue to engage Trustees to ensure that relevant disclosures are provided. Trustees are required to provide updates to the Commission accordingly.

The Commission enjoins all CMOs to continue to monitor the real and potential risks COVID-19 may have on their business operations and the discharge of services to investors and clients, stating that for further guidance, the Commission may be contacted through

the dedicated email addresses for filing CMOs returns.

The SEC enjoined all Issuers and Trustees who may require further guidance to contact the Commission through the following email addresses:quotedcoyreturns@ sec.gov.ng,offerapplications@ sec.gov.ng, and dhpostoffer@ sec.gov.ng The SEC added that it will continue to engage and collaborate with all stakeholders to ensure that the capital market remains resilient.

“While we work to maintain market stability, we encourage everyone to continue to comply with all directives issued by the Federal Government and relevant agencies during this challenging period” the SEC added.

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s we try to picture our lives post-coronavirus, we could decide that we will return to our old habits or alternatively, we could conclude that the world will never be the same again. In practice, the reality will fall between the two extremes.

We can still identify a few very likely trends, however.

The first is that ‘new world’ companies will emerge from the crisis stronger. Amazon has made itself very useful by transporting medical supplies on behalf of governments (such as the UK).

As we sit at home under varying degrees of lockdowns, it delivers the orders that some of us would previously have fulfilled by visiting stores.

Mo b i l e t e l e p h o ny i s another winner as we are obliged to make use of conference calls and video conferencing for routine conversations with colleagues and clients that we often held face-to-face in the office.

The handful of US corporations capitalised at more than $100billion (led by Alphabet, Amazon, Apple and Facebook) are set to grow in influence and reach.

It will be more difficult for governments to rein them in on the grounds of their perceived monopolistic practices or poor conduct such as failing to close down terrorist or socially harmful sites.

Secondly, e-banking has received a boost from our being confined to our homes.

The loser is likely to be cash transactions for health reasons and for practicality. We may well maintain the habit of paying for goods and service by card.

The CBN cash-lite and financial inclusion programmes appear healthier in this light.

Thirdly, the crash in the oil price due to the weakening of domestic demand that was

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already evident before the onset of the virus has given fresh legs to fossil fuels.

The argument for the substitution of crude has weakened with the price at +/- $25/barrel. Oil companies are adjusting by deferring share buybacks and capital spending, led by the majors. Governments of oil producers have to adjust with fiscal retrenchment too, Nigeria being one of many examples.

Developed countries may be tempted to adjust but have signed treaties and made policy pledges in the name of renewables. A huge international conference on climate change is planned for Glasgow (Scotland) at the end of the year.

The more indebted oil companies in the Permian Basin and elsewhere look vulnerable with the current oil price but the greater result of the crash is surely another lease of life for the industry.

The cost of filling up the tank has nosedived where pricing is set by the market. The economic case for the electric car or hybrid suddenly looks less convincing.

Companies with an agenda of moving away from oil or gas fuelled power for their production may think again. Those segments of the airline industry that survive will feel that, once government closures of airports are lifted, they will be able to rebuild their businesses.

There are other winners and losers that we will examine as we drill down into industries.

Almost all of us are nervous about change and may be clinging onto the hope that the impact will be less than feared and that our leaders are overstating the risks in their responses (as they must, otherwise they would be slaughtered by their voters).

Kronsten is Head, Macroeconomics and Fixed Income Research, FBNQuest

Thursday 02 April 2020

BUSINESS DAY

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45

46

Thursday 02 April 2020

BUSINESS DAY

Garden City Business Digest Highbrow areas and PHED’s steady power supply experiment • Residents spending N78/kw/h on gens may gladly embrace N60 instead of current N33 Ignatius Chukwu

T

he Port Harcourt Electricity Distribution Company (PHED) has concluded plans to supply 24-hour power to some dedicated clusters under a project that may kick in soon.

The scheme called ‘Project 24/7’ would select one area in each city and would require two different levels of power purchase agreements to pull off the project.

The first step is said to be to get the consent of the dedicated highbrow residents for the steady power supply and the amount they would likely want to pay. This may embolden PHED and their partners to secure power from independent suppliers and channel it to the dedicated areas.

The first of such meetings took place at the Hotel Presidential in Port Harcourt last week targeting the Government Reserved Area (GRA) Phase Two which covers the Hotel’s. A presentation that seemed to give insight into how power supply works was made by Ernest Edga, Team Lead, Project Management Office (PMO) of 4Power, a partner to PHED.

Independent power is a must for steady power supply Let independent power come in to rescue inadequate supply problems in Nigeria.

In Port Harcourt, we have designed an experiment called Project 24/7 (meaning supply of power 24 hours a day). We want to experiment with GRA Phase 2; the Presidential Hotel Area). This is targeting critical mass such as GRAs. If it works, others may follow.

Tariff: Port Harcourt people are paying N33 per kilowatt/ hour at the moment. This may go up N50 and then to N66. By our calculations and investigations, supplying self through generators is average

of N78. So, we want to meet each other half-way: we supply you steady power but at a price higher than normal but not up to cost of self-supply.

On the part of the PHED, it is going to be a major investment because we will sign a power purchase agreement with the supplier to pay what we lift unfailingly. We must thus reach an understanding (or deal) with the cluster (GRA 2) to pay what we agreed with them. This is the way it works.

We want to bring in an independent power supplier and use TCN as back up. We want to have a model in each city where we operate. We

also have the estate option.

Residents will register as an association (cooperative) and come and sign a power purchase agreement (PPA) with us.

Cost is the tricky one We are conscious of the fact that if our cost is higher than self-power cost, they will take us out. Our target is 21,000 customers. Note that the public power supply situation in Port Harcourt may get worse because NLNG headquarters and the NDDC headquarters are all coming in. They will shake the power system, though NLNG is however on independent system.

Some of the residents wel-

comed the scheme and called it a good initiative but said the price would decide. They said big companies in the marked area may easily afford the high tariff but that many others may not afford to pay. Some asked to know why Lagos people paid less than Port Harcourt people.

Reacting, Edga used the case of Madogo in Lagos versus Port Harcourt.

He went on: In Lagos, I pay N26 per kw/h and it may soon rise to N49. Average bill for PH residents’ category will soon be about N60. Many wonder why Lagos is cheaper.

This is because what it takes to service 1000 households is far cheaper there. One pole serves many people.

But PH has issues. You need about 13,000 transformers to service the city. You will find that 33kv serving communities that won’t pay.

Lagos has high density and so pay lower tariff but Niger Delta has the highest tariff.

About 86 per cent of Niger Delta consumers is made up of residents (that are to pay lowest rates by law) while Lagos has 66 per cent. There is also heavy unproductive use of power in the Niger Delta.

Pleasure (such as watching television/cable) does not pay the bills.

A nearby state is courting us (4Power Company, a partner in the PHED) to come. They are bringing in 35 companies but they need steady power. The problem is that it is difficult to get certain factors right. We are looking beyond N60 for Project 24/7.

People say Bonny people do not pay for light, but they forget that the NLNG and other companies are under ambush to supply power there free.

They are groaning but the community is like holding them hostage. Some of the companies there are looking for a way out. They may adopt phased withdrawal.

Discos in distress Discos are not making money but losses. Government is still subsidizing power.

The grid is the issue. Power silos system will help. If you deregulate completely, investors will come.

Akwa Ibom State governor, Emanuel Udom, is building two plants in the communities.

The plants must not be hooked to the grid. The state wants to break away from the national grid and hand over to private discos. Its like they are not being paid for power supplied to the grid and they are also not getting power to their people.

The deal will soon come on stream.

Gov Wike; soldiering against COVID-19, now looking at palliatives Port Harcourt

by Boat

IGNATIUS CHUKWU

G

ov Nyesom Wike of Rivers State is one of the governors after Lagos that took string measures to wage war against any COVID-19 virus penetrating into the state. Apart from encouraging people to wash hands, sanitise and keep social distances, he followed by shutting down the boundaries of the state. This was seen as extreme measure, but he explained his reasons.

He also set up a committee on massive awareness led by the Commissioner of Information and Communications, a pastor, Paulinus Msirim, who swung into action, organizing series of trainings for different sectors of the Rivers community including the media. The governor’s network stopped a positive person from flying to PH from Abuja.

Soon, as expected, the virus spill found space to penetrate the Wike gauze. A 19-year-old model was declared positive after visiting some

cities of the world. This created news fears. The governor realized that his protocol had been breached.

The shutdown of boundaries created panic.

Many visitors to PH rushed to leave the state before 6pm of Thursday last week. Thereafter, travellers began massing at the boundaries especially Abia and Bayelsa boundaries. Goods and food items coming into the state were halted. This caused panic and alarm.

Next, the governor shut down all markets in the state from Wednesday last week. The resolve of the government was tested with the famous Oil Mill Market that attracts traders from other states and most of Niger Delta. This, too, created another level of panic.

Each day, the governor issued fresh broadcast which heightened anxiety but seemed to bring the people to the full consciousness of the risks at hand.

When the people seemed not to get it clear into their heads that war was at hand, the governor struck. He suspended a local council chairman that did not act fully. He announced curfew in busy Diobu, Obiri-Ikwerre areas, etc.

Now, the people understand its war.

The governor updated his curfew later on Tuesday, March 31, 2020, thus: “This is to inform members of the public that the curfew imposed at Education Bus Stop to Agip Junction, Ikwerre Road and Obiri Ikwerre Junction to Ozuoba, Rumualogu and Choba is for 24 hours with effect from today, March 31,2020 till further notice.”

The governor was however urged to march bans with palliatives. He responded. Now, food corridor has been created to allow food pass.

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Market centres to be created. It was learnt that March salaries have been paid.

The masses expect more palliatives such as food centres to help the poor and stimulus to vulnerable persons but the his media aide, Simeon Nwakudu, says: “With the Presidential address, Governor Wike has been vindicated for taking very profound steps to protect Rivers people. Agreed, the steps are tough, but it is for the good of Rivers people. Nothing is perfect, but steps must be taken to check the spread of coronavirus.

“Several other states have emulated Governor Wike by shutting their boundaries to visitors.

With the Federal Government taking it a notch higher for FCT, Lagos and Ogun States, those who eke out a living by insulting Governor Wike

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will continue to have sleepless nights.

“If the developed countries with their facilities and medical proficiency are working hard to check the spread of coronavirus, then that is simply the way to go for now.

“Those who post pictures of bags of rice, tintomatoes, groundnut oil, hospital beds and tents as the ultimate are merely enjoying ephemeral benefits. The only medicine for now is to protect the population.”

Wike’s most biting action came in the Monday March 30 broadcast; Excerpts; Following the violation of the market closure order, the Rivers State Government has imposed a dusk to dawn curfew on Obiri-Ikwerre Junction( Ozuoba, Rumualogu) to Choba and from Education Bus Stop to Agip Junction .

In a Broadcast on Monday, Rivers State Governor, Nyesom Ezenwo Wike said that the State Security Council reached the decision after it monitored compliance with the State Government’s directive.

He said: “With effect from Tuesday March 31, 2020 there will be a dusk to dawn curfew from Obiri-Ikwerre Junction( Ozuoba, Rumualogu) to Choba and from Education Bus Stop to Agip Junction, Ikwerre Road .

“All beer parlours and public drinking joints are hereby closed because they have suddenly become an extension of night clubs that were earlier shut down.

“Any beer parlour or public drinking joint found to be open shall be acquired by the State Government.

“All landlords are advised to warn their tenants who use their property as beer parlours or public drinking joints to adhere to this directive.

@Businessdayng

Thursday 02 April 2020

BUSINESS DAY

47

Investing in Rivers State

Gov Wike happy with churches on compliance •But APC chieftain says virus has exposed the state govet on health Ignatius Chukwu

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ov Nyesom Wike of Rivers State has expressed appreciation to the Christian faithful across the state for complying with the directive of maintaining social distance during the first Sunday after the order on church service to check the spread of coronavirus.

Addressing journalists after he led the Task Force on enforcement of the ban on public and religious gatherings to monitor compliance on Sunday, Gov Wike said that the churches ensured that each service had about 50 worshippers as agreed during the meeting at Government House, Port Harcourt.

Governor Wike, accompanied by the Service Commanders, monitored compliance at the Saint Thomas Anglican Church, Mile Two Diobu, Saint John’s Anglican Church, Rumueme Deanery, Saint

Peter’s Anglican Church, Rumuepirikom Deanery, Holy Trinity Anglican Church, Rumuapara District, Abundant Life Evangel Mission Cathedral. All of these were in the city, though the local councils are to monitor at local levels.

They also monitored compliance at the Saint Andrews Anglican Church, Rumuobiokani, Saint Michael’s Anglican Church, Rumuomasi Deanery, the Eternal Sacred Order of Cherubim and Seraphim, Mount of Grace, Elekahia, Saint Barnabas Anglican Church, Elekahia Archdeaconry, Saint Paul’s Cathedral, Diobu.

The team moved through Corpus Christi, Port Harcourt, Living Faith Church, Kaduna Street, DLine and Churches on Aggrey Road in Port Harcourt. All the churches visited had running water, soap and hand sanitizers to disinfect worshipers before and after service.

Governor Wike said: “The compliance is very much appreciated, except for two churches that did not

Governor Nyesom Wike

completely comply; Saint Thomas Anglican Church and Holy Trinity Rumuapara.” BusinessDay also gathered that the team stormed at church at Elimgbu area near Rumukwurushe, but the governor said he had told the implicated churches not to tempt him into shutting them down.

He went on: “In all, we are satisfied with the total compliance. That shows that the people appreciate what we are talking about. For us, the safety of our people remains key. We are happy today.”

Meanwhile, a critic, media consultant and chieftain of the All Progressives Congress (APC), Eze Chukwuemeka Eze, does not seem to be impressed by all that the state government has done.

Eze said Wike’s actions were full of orders and bans without a single palliative or help to the people. He questioned the absence of salaries to workers, palliatives, test kits, etc.

He called for donation of salaries of Wike and his aides to show example.

Eze said: “The state does not have any Covid-19 test centre and most sadly, without any organized or strategic framework to enable residents who are symptomatic or asymptomatic or those who are reasonably suspicious of coming in contact with any case or suspected case to present themselves for test.

Nonetheless, the governor hurriedly embarked upon a complete lockdown without any consideration for the above factors and this simply portrays him as grossly flippant in the administration and welfare of the good people of Rivers State.”

Saying he supported stay at home order, Eze opined that it is grossly irrational and conspicuously suicidal for Gov. Wike to order closure of markets and other places of bazaar without first putting into consideration the effects of the implementation of such directive on the citizens especially, the poor of society.

DPR orders oil firms to reduce offshore workforce

A

gainst the backdrop of the spread of the coronavirus pandemic in the country, the Department of Petroleum Resources had directed oil and gas firms to reduce the workforce on offshore platforms.

All travels to and from offshore/ remote locations shall strictly be in line with the guidełines and procedure for travel to offshore/ swamp location and obtainment of offshore safety Permit 2019, the

Director, DPR, Sarki Auwalu, said in a circular.

He said only staff on essential duties should be nominated and permitted to travel to offshore/ remote locations.

Auwalu said, “Non-essential staff current(y at offshore/remote locations should be withdrawn with immediate effect. Staff rotation less than 28 days/28 days is hereby temporarily suspended.

This implies that staff are rewww.businessday.ng

quired to stay a minimum of 28 days at these locations per rotation.” According to him, Sections 4.3 and 4.4 of the guidelines still apply.

Auwalu said, Representation by government agencies at offshore/ remote locations shall be limited to a maximum of one person per rotation. “You are to ensure strict compliance with the above while we continue to monitor the situation and provide updates as required.”

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RIWAMA Sole Administrator appeals to service providers to step up action to reduce spread of virus

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he Sole Administrator of the Rivers State Waste Management Agency (RIWAMA), Felix Obuah, says the Agency is challenged by the circumstance of the period

Felix Obuah

more than ever to step up action and has ordered that the Service Providers rise up to the demand.

Obuah noted that being in forefront of the relentless efforts of the State governor, Nyesom Wike, to ensure that the checkmate of the coronavirus pandemic is watertight, all Service Providers must work round the clock to rid all nooks and crannies of the State of any refuse dump.

He said for no reason will any Service Provider be found wanting this time, stressing that the sit-at-home and or curfew order by the state government exempts all workers on essential duties including the Service Providers and their workers.

The RIWAMA boss reminded Service Providers of the high need of their services this time, and urged them to ensure that their drivers and workers wear protective gears.

Business owners in Rivers cry out Sam Esogwa

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he closedown of markets in Rivers State by Governor Nyesom Wike as part of measures to check the spread of corona virus may be a step in the direction for some residents, but for business owners, it is a bad omen or what is generally referred to in local parlance as “bad market”.

This is because they are finding it difficult to make sales now unlike in the past, coupled with the high cost of food stuff and its scarcity.

On Saturday, when the markets in Port Harcourt officially closed down, in line with the Rivers State governor’s directive, the few business owners who opened, such as canteen operators, shop owners, filling stations and fruit sellers in Diobu, usually a busy area, complained of poor sales and patronage as majority of the residents stayed back in their homes due to the covid-19 scare and shutting down of markets.

Charles Onyenyirionwu, a shop owner in Mile 3 who sells household items, said the situation did not only affect him but also affected all the sectors, adding that the people are suffering for a strange disease they did not know anything about.

“It is not affecting me alone but everybody. You can see the road, everywhere is dry. As you can see, @Businessdayng

some even still travelled today.

And they’re complaining that they don’t know when they (government) will open the market. This issue of corona virus, I don’t know what is corona virus. It’s only God that knows what is corona virus and what is the sickness,” he said.

Charles said although he is not angry over the situation, the government should have tried to help the poor masses with relief materials or money to cushion the effect of the market shutdown.

He said: “I will not be annoyed about the government shutting down the market and whatever.

It’s for our own good and benefit.

Some people are not happy as government shut down their business and the market because they did not even bring anything to help the poor masses. The big men, it doesn’t concern them, even if you shut down everything. The government should find a way to help the people.”

A canteen operator, Madam Rose, also lamented over the effect of the market shutdown, adding that she did not make any meaningful sale on Saturday due to absence of people. She said the high cost of food stuff on Friday made things more difficult for them.

Another canteen owner in Diobu, Caroline Okike, confirmed the adverse impact of the lockdown of Mile 3 market, which she said made many of her customers not to come out. She said prices have gone through the roof.

industry Insight

BUSINESS DAY Thursday 02 April 2020 www.businessday.ng

The role of manufacturers in mitigating impact of coronavirus ODINAKA ANUDU

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o ro nav i r u s, a l s o known as Covid-19, has infected the world and its systems. The social, economic, political and religious lives of the people are changing faster than ever imagined. Hundreds of lives are lost each day, and more than half of the world’s 7.8 billion people are staying at home—in forced holiday.

Amid the on-going tragedies in the world, the role of manufacturers in a coronavirus season cannot be too stressed.

In Africa’s most populous country, millions of citizens are vulnerable to the deadly disease owing to the poor state of the healthcare system. The hospitals are poorly-equipped to handle even the simplest of diseases. The hypocritical ruling elite are more interested in treating themselves in the United Kingdom and the United States than in fixing the broken hospitals and primary health centres, especially those in rural communities. Consequently, the hapless and helpless poor citizens rely on God, religious leaders and herbal medicines to stay alive.

But the manufacturing sector is often an unsung hero in a period like this. It sustains the people by producing food and some of the items needed to prevent the spread of the disease. However, Nigeria’s pharmaceutical industry has failed to produce surgical and face masks needed to save lives in case of an explosive spread of the disease among the population. This may be attributed to long years of neglect of that industry. For example, there are fewer than 150 local pharmaceutical firms in Nigeria, excluding global brands with mere offices in Nigeria. Data are hard to get in Nigeria, but information from the Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMG-MAN) shows that these companies have invested less than N500 billion in recent times— which is less than $1.5 billion.

Brazil with almost the same population as Nigeria has 550 pharmaceutical firms.

The country’s pharmaceutical market is expected to expand in value from $29.4 billion in 2014 to $48 billion this year, according to research and consulting firm GlobalData.

The South American country recorded total retail pharmaceutical sales of $25.8 billion in 2011; $18.3 billion represented prescription drugs and $7.5 billion over the counter, according to a study by Scrip Insights.

From 2007 to 2011, retail drug sales increased by 82.2 percent, according to a study performed

by PwC. There are statistics from the Brazilian pharmaceutical industry that will embarrass Nigeria, which has even failed to save some of its drug firms from going under.

Over the years, Evans, May& Baker, Chi Limited, Swiss Pharma, and Fidson, among others, have invested billions to acquire the World Health Organisation (WHO)’s prequalification. This certification enables firms to take part in international bids and compete favourably in the global market. It is sought-after by all pharmaceutical companies across the world. By 2015, three pharmaceutical firms in Nigeria had got the prequalification.

The first was Swiss Pharma, which eventually sold its assets to Biogaran-Servier in March 2017. Those familiar with the company before its exit said the sale to the French company was based on financial crisis.

Next were Evans Medical Plc and Chi Limited. But Evans was taken over by the defunct Skye Bank and the tier-one First Bank in 2017.

The drug maker had invested hugely on the road to acquiring the sought-after WHO’s prequalification.

But the dream of consolidating its international presence became a mirage as the bankers

came for the jugular after a July 4, 2017 court order necessitated by loan default.

The pharmaceutical industry generally is hard hit by a number of factors. One is lack of funding, which has exposed the likes of Evans Medicals to humongous debts it could not repay. Apart from funding, the industry is also hurt by high production cost, which makes its drugs more expensive than imported ones.

Cost of production occupies 30 to 40 percent of their expenditure as the firms spend a lot on energy, water, research and development as well as raw materials. Most of the raw materials used by these drug makers are imported because Africa’s most biggest economy does not have a strong petrochemical industry that should produce resins and excipients.

“We have the capacity to produce all these items, but we are not manufacturing them because it is uninteresting and unprofitable to do so,” Fidelis Ayabae, chairman, PMG-MAN and Fidson Healthcare plc, said.

“The economy is open to all kinds of imported products which will make local products expensive,” he further said.

In spite of this, many manufacturers have stepped up to mitigate the impact of coronavirus on Nigerians. Cybele Cosmetics, Jopan Pharmaceuticals, Shulanphil and many others have ramped up the production

‘‘

We have the capacity to produce all these items, but we are not manufacturing them because it is uninteresting and unprofitable to do so

‘‘

The Manufacturers Association of Nigeria (MAN) believes the current situation shows why the sector must be supported by policies and patronage of hand sanitizers.

The food sub-sector is providing succour to a number of families staying at home. From Flour Mills’ Golden Penny Pasta to Dufil’s Indomie noodles, down to PZ Wilmar’s vegetable oil, families are being supported by manufacturers in many ways.

With borders and airports shut across the world, many families could have struggled to cope with the stay-at-home order without food on their table.

The Manufacturers Association of Nigeria (MAN) believes the current situation shows why the sector must be supported by policies and patronage.

Moreover, auto companies across the world are figuring out ways of producing ventilators to save the lives of coronavirus, patients.

In the United States of America, President Donald Trump has ordered General Motors Co. to sharply ramp up the production of ventilators to treat coronavirus patients.

Recently, Innoson, an auto maker, said it was ready to produce ventilators to save the lives of people suffering from

Covid-19.

“Innoson Motors is ready to assist the government in any way we can, including the likability of converting out lines to produce ventilators and other equipment,” Cornel Osigwe, company’s spokesperson, told Premium Times on March 24, citing his discussion with Innocent Chukwuma, the group’s chairman, on the matter.

“But we need the government or other health institutions to place orders on the quantity that may be required before we could take any step,” Osigwe further said.

With this kind of commitment

by Innoson, a serious government should have followed up on this statement by taking the company to task. But nothing concrete has happened so far.

Big countries such as the United States, the United Kingdom, Italy and Span are struggling with shortages of ventilators, and should there be any explosive spread of the virus in Nigeria the doctors won’t cope.

The world will not experience coronavirus forever, but the situation calls for the need to support local manufacturers.

Many manufacturers are hard hit by multiplicity of taxes and a lot of them are cash-strapped.

The Apapa and Tin Can ports are not supporting manufacturers owing to congestion and delays. About 5,000 trucks seek access to Apapa and Tin Can ports in Lagos every day, according to a 2018 maritime report done by the Lagos Chamber of Commerce and Industry (LCCI).

Manufacturers spend as much as N700,000 to move containers from the ports to Ikeja within Lagos. This hikes production costs and reduces competitiveness.

Okey Akpa, chief executive of Lagos-based SKG Pharma, stresses the need for Nigeria to begin to take sensitive industries like pharmaceuticals seriously.

He argues that such sub-sectors are critical for national security in times like this.

Ike Ibeabuchi, a manufacturer of chemicals, believes that Nigeria must learn lessons from this period and understand that over-reliance on importation is not sustainable.

Ayabae of Fidson points out that the situation at the moment shows that nobody cares for anybody. He says Nigeria must protect its local industries from unbridled importation of cheap items that often de-market local manufacturers.

Other manufacturers BusinessDay say the post-Coronavirus economy should focus on making made-in-Nigeria products more competitive in the local and global markets.

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