BusinessDay 02 Jul 2020

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news you can trust I ** thursDAY 02 july 2020 I vol. 19, no 597

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Why we are against increasing electricity tariff now – DisCos T T

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COVID-19: Nigeria turns to precision lockdown to halt mounting community transmission OLUFIKAYO OWOEYE

he Presidential Task Force (PTF) on COVID-19 headed by Secretary to the Government of the Federation, Boss Mustapha, has announced that it would impose precisely tar-

ISAAC ANYAOGU & STEPHEN ONYEKWELU

hough the current electricity tariff charged customers is lower than the cost, electricity distribution companies (DisCos) who have always called for an increase say they will back the new tariff plan if problems with collections and technical losses are resolved.

The Multi-Year Tariff Order (MYTO), which regulates electricity pricing in Nigeria, prices the average cost of electricity at N31kwh when the estimated Continues on page 30

Continues on page 30

Inside

Zenith Bank ranked number one bank in Nigeria by Tier-1 Capital P. 2

Get it, no more cash for subsidy: Vice President Yemi Osibajo in a chat with Senate President Ahmad Lawan (l), and speaker of House of Representatives, Femi Gbajabiamila (m), over the twist in the plan to enthrone a service reflective electricity tariff.

Osinbajo to lead consultation on electricity tariff increase today P. 2

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news Osinbajo to lead consultation on electricity tariff increase today ISAAC ANYAOGU

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he fate of the proposed electricity tariff review will be determined today after a meeting between senior members of government led by Vice President Yemi Osinbajo and lawmakers, after which the president would be briefed, BusinessDay has learnt.

Contrary to speculation that the tariff review has been shifted to the first quarter of next year, the directive from the president was only a stay of action to pursue further engagement with the lawmakers to properly articulate the fiscal implication of further delay, a senior government official with knowledge of the discussion told BusinessDay. Today’s meeting will have in attendance Ahmad Lawan, Senate president, Femi Gbajabiamila, speaker, House of Representatives, the minister of finance Zainab Ahmed, minister of power, Sale Mamman, Godwin Emiefele, CBN governor, and the directorgeneral of the Budget Office as well as other senior government officials.

BusinessDay gathers that senior government officials

have resolved that there will be need for more engagements to persuade the leadership of the Legislature that there is no better time than now to take the government away from holding down power sector tariff.

The outcome of the meeting will determine whether the tariff increase will go ahead or not, as the president is yet to make final decision on the plan. The thinking in government is that the fiscal situation of the country is unable to continue to support subsidies on electricity.

Last week, the Board of the World Bank approved Nigeria’s long-standing request for about a billion dollars, releasing the first tranche of $750 million credit to support power sector recovery, and one of the conditions Nigeria agreed on was that it would review tariffs and end subsidies, which have gulped over N1.72 trillion within the last five years.

There are concerns that if the government fails to honour this commitment, it may make it harder for it to succeed in further efforts to secure financing from multilateral institutions.

Zenith Bank ranked number one bank in Nigeria by Tier-1 Capital BALA AUGIE

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enith Bank Plc has again emerged as the Number One Bank in Nigeria

by Tier-1 Capital in the 2020 Top 1000 World Banks Ranking published

by The Banker Magazine.

Climbing a whopping 29 spots from 415 in 2019 to 386 in the 2020 global ranking of banks, Zenith Bank retained its position as the number one Tier-1 bank in Nigeria with Tier-1 Capital of $2.79 billion, an increase of 16.1% on the $2.40 billion recorded in the 2019 rankings.

The ranking which was published in the July 2020 edition of The Banker Magazine of the Financial Times Group, United Kingdom, was based on the 2019 year-end Tier-1 capital of banks globally. According to the Ranking Report, Zenith Bank extended its lead over the second-placed bank in Nigeria. Zenith’s financial performance for the

year was underpinned by a 29% increase in non-interest income, with an improved market share in both retail and corporate sectors.

Speaking on the latest rankings, the Group Managing Director/Chief Executive, Mr. Ebenezer Onyeagwu said: “this ranking, which further attests to our market leadership, is the outcome of a well-thought-out strategy of always delighting and creating value for our teeming customers through a broad range of superior product offerings, best-in-class service and topof-the-range technology”.

Tier 1 capital describes the capital adequacy of a bank, and it is the core measure of a bank’s financial strength from a regulator’s point of view. According to the ranking, Tier 1 Capital, as defined by the latest BIS guidelines, includes loss-absorbing capital, i.e. common stock, disclosed reserves, retained earnings and minority interests in the equity of subsidiar-

ies that are less than wholly owned.

Zenith Bank has clearly distinguished itself in the Nigerian financial services industry through superior service quality, unique customer experience and sound financial indices. The bank, with a knack for setting the pace and raising benchmarks, is a clear leader in the digital space with several firsts in the deployment of innovative products, solutions and an assortment of alternative channels that ensure convenience, speed and safety of transactions.

As a testament to its resilience and market leadership, Zenith Bank announced an impressive result for the year ended December 31, 2019, with profit after tax (PAT) of N208.8 billion, achieving the feat as the first Nigerian Bank to cross the N200 billion mark. In the recently released Q1 2020 unaudited financial results, the bank also recorded an improved result over

the corresponding period in 2019, with gross earnings rising by 6% to N166.8 billion and profit before tax (PBT) growing 3% to N58.8 billion.

Consistent with this excellent performance and in recognition of its track record of exceptional performance, Zenith Bank was ranked as the Best Commercial Bank in Nigeria 2019 by the World Finance and the Best Digital Bank in Nigeria 2019 by Agusto & Co. The bank was also voted as Bank of the Year and Best Bank in Retail Banking at the 2019 BusinessDay Banks and other Financial Institutions (BAFI) Awards.

Most recently, the bank was recognized as the Most Valuable Banking Brand in Nigeria, for the third consecutive year, in the Banker Magazine “Top 500 Banking Brands 2020”, Best Bank in Nigeria in the Global Finance “World’s Best Banks Awards 2020” and the Bank of the Decade (People’s Choice) at the ThisDay Awards 2020.

Pfizer’s Covid-19 vaccine candidate works, safe

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n early trial of an experimental coronavirus vaccine from Pfizer Inc. and BioNtech SE showed it is safe and prompted patients to produce antibodies against the new virus, keeping it in the lead pack for a pandemic shot.

The messenger RNA product was tested on 45 healthy adults divided in several groups: 24 of them got two injections with two different doses of the experimental vaccine, 12 of them received a single shot with a very high dose and nine patientsgottwodummyinjections.

The two-shot groups produced the highest level of antibodies.

Pfizer and Germany’s BioNTech are in a race with companies including AstraZeneca Plc, Moderna Inc. and dozens of other biopharmaceutical outfits and academic groups to come up with a safe and effective vaccine against Covid-19.

With almost 10.5 million confirmed cases around the globe and over half a million deaths, drug makers are under increasing pressure to deliver.

“I see this as the first good news we’ve seen from Operation Warp Speed,” said Peter Hotez, a vaccine researcher and dean of the National School of Tropical Medicine at Baylor College of Medicine. Operation Warp Speed is a Trump administration program to bring a vaccine to market as quickly as possible.

While it took two shots, the

vaccine produced “significant levels of virus neutralizing antibody,” Hotez said.

Pfizer shares gained as much as 5.6% on Wednesday in New York, while BioNtech shares jumped by as much as 19% in Germany.

On Monday, shares of Inovio Pharmaceuticals Inc. slumped after the company released promising results on an experimental vaccine without giving enough detailed data.

The study of Pfizer’s and BioNtech’s vaccine candidate, called BNT162b1, is undergoing scientific peer review, the partners said.

The companies are evaluating at least four experimental vaccines at various doses and will pick the most promising one to move into the next stage of tests, which may start as early as this month and involve as many as 30,000 patients.

If the vaccine is successful, the companies expect to manufacture up to 100 million doses by the end of this year and potentially more than 1.2 billion doses by the end of 2021.

They would jointly to distribute the product worldwide except in China, where BioNTech has a collaboration with Fosun Pharma.

There were no severe side effects in the study. Some patients had pain at the injection site and a low-grade fever after the second injection. One of the patients who got the single high dose experienced severe pain where he received the shot. www.businessday.ng

Umar Ganduje, governor, Kano State, burns fake and illicit drugs worth N360 million confiscated by security operatives in the state, at the premises of the National Drug Law Enforcement Agency (NDLEA) in Kano. Five years ago, Kano was ranked as number one state in drug abuse in Nigeria, today Kano is down to 6th position.

NAN

Interest in rent-to-own housing schemes remains low despite reduced entry barrier CHUKA UROKO

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espite the low entry barrier, which contrasts sharply with the traditional way of buying and owning a house, subscriber-interest in rent-toown housing schemes remains low, leading to high vacancy rate in some of the housing estates dedicated to the schemes.

Analysts say the main attraction for these schemes is the prospect of owning a house at the end of a rental period. This is complemented by the acceptance of low equity contribution or initial deposit

which, in some cases, is as low as 0-5 percent. It can, however, be as high as 10-20 percent.

According to the experts, this attraction diminishes for reasons bordering on property location, period of time for paying the rent leading to property ownership, long and cumbersome processes on paper work, and developer’s credibility or/and market acceptance.

Natanelflorens Limited, a premium alternative asset investment company with focus on real estate, which prides itself as the pioneer of rent-toown scheme in Nigeria, entered

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the housing market, offering subscribers 0 percent interest with a promise to deliver 250,000 housing units annually to sustain the scheme.

“We believe Rent-to-Own housing scheme is the only answer to housing challenge in Nigeria,” Yinka Daramola, the company’s executive director/chief marketing officer, explains to BusinessDay in an interview.

Daramola believes that gainfully employed Nigerians have a right to own their own properties with ease, pointing out that, in a country where over 80 percent of the population are @Businessdayng

tenants, there is indeed cause for worry. In collaboration with developers, the company has done many housing estates dedicated to the scheme.

But, for some reasons that range from waning interest to market acceptability, the company has been inactive and less visible in the Lagos housing market where it has strong presence in terms of developments.

Analysts point out, however, that part of the reasons for the low interest in rentto-own scheme is because it comes with a significant risk

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news

Lagos Assembly moves against incessant rape, seeks stringent punishment for offenders Iniobomg Iwok

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s the number of rape cases in Nigeria continues to rise, the Lagos State House of Assembly has called for strict implementation of rape laws, acceleration of rape cases in courts, cancellation of stigmatisation of rape victims and punishment of rapists.

These followed the House of Assembly motion moved

by Mojisola Alli-Macaulay (Amuwo Odofin Constituency 1) along with 12 others during plenary on Monday. The motion entitled “Need To Curb The

Incident of Rape, Defilement of Minors and Other Sexual Abuses.”

“The House notes the alarming rate of domestic violence, rape, defilement of minor and other sexual abuses, particularly Lagos State.

“We further note that some victims of sexual assault who were either children of less than twelve years, adult or aged female are left with their fate in the society while the culprits moved freely without fear of being apprehended and prosecuted,” the motion read.

Macaulay stated that the House was disturbed by the

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catalogues of sexual abuse cases reported daily in the media and the reactions of Civil Society Organisations (CSO), but concerned by the ordeals of victims of rape and related cases, which include emotional trauma, shame, Sexually Transmitted Diseases (STD) and committing suicide for fear of social stigmatisation.

She said the House was disturbed by the weak enforcement of related laws, lack of education on how victims of the heinous act can seek redress, and mistreatment of rape cases, among others, stressing that it was creating

an environment where sexual abuse was perpetrated with impunity.

The House then called on Governor Babajide Olusola Sanwo-Olu to direct the judiciary to ensure that perpetrators of any form of rape and defilement of minors were prosecuted speedily and in line with extant laws of the state.

Sanwo-Olu was also ordered to direct the commissioner for women affairs, poverty alleviation and job creation to ensure that the rights of every victim of sexual assault were protected through the domestic violence agencies

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in the state.

“The Domestic And Sexual Violence Response Team in Lagos State and other relevant Agencies to adopt whistle blowing mechanism in the fight against domestic violence, especially rape and defilement of minors.

“The Commissioner for Information and Strategy to intensify efforts on the campaign against sexual abuses and sensitise members of the public to report any form of sexual assault to the appropriate authority in the state and the Commissioner of Police, Lagos State Command to ensure that

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offenders of domestic violence, including rape and defilement of minors are made to face full weight if the law,” the motion said.

Speaker of the House, Mudashiru Obasa, stated that the state did not have to wait till someone was raped before action was taken, saying the motion was meant to prevent rape either among adult or young ones, males and females.

According to Obasa, “We should look at morals. What are our religious institutions preaching? Most times, people are particular about survival than the welfare of our children.

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

In association with briu@businessday.ng

08098710024

Heritage Foundation Index shows Nigerian economic freedom dips by 0.1 point ed, with appropriate legal actions taken against violations.

Government Integrity Corruption perception index for 2019 shows that Nigeria scored 26 out of 100 and ranked 146th among 196 countries while economic freedom index scored Nigeria government integrity 22.3 index points. In Nigeria, bribery is a common practice when starting a business and registering property.

“To build a better world, we must have the courage to make a new start. We must clear away the obstacles with which human folly has recently encumbered our path and release the creative energy of individuals. We must create conditions favourable to progress rather than “planning progress.” The guiding principle in any attempt to create a world of free men must be this: a policy of freedom for the individual is the only truly progressive policy” —Friedrich A. Hayek

ISAAC ESOWE

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he covid-19 epidemic is the first and foremost human disaster in 2020.

The coronavirus coded COVID-19 is affecting 213 countries and territories around the world and 2 international conveyances. Recent global growth rate has accelerated to more than 10,000,000 covid-19 confirmed cases and then 504,745 deaths while Nigeria confirmed cases in past quarter increased geometrically; Nigeria recorded its first all-high daily cases of 681 confirmed cases of Covid-19 in June 11, 2020. By June 29, 2020, the total confirmed cases had risen to 24,567 and 565 deaths, data from the Nigeria Centre for Disease Control (NCDC) indicated.

The recent report by World Bank tagged Nigeria Development Update ((NDU) shows that the Nigerian economy is expected to plummet into severe economic recession, the worst since the 1980s, and this was attributed to the recent drop in oil prices cum the current health crisis that almost halted the world’s economy.

Economic freedom is the fundamental right of every human to control his or her own labour and property. In an economically free society, individuals are free to work, produce, consume, and invest in any way they please.

Economic freedom index measures the positive correlation between economic freedom and a variety of positive social and economic goals, the rationale behind it is strongly associated with healthier societies, cleaner environments, greater per capita wealth, human development, democracy, and poverty elimination.

And this is measured using the following 12 qualitative and quantitative parameters which are categorized into four groups: Rule of Law (property rights, government integrity, judicial effectiveness), Government Size (government spending, tax burden, fiscal health), Regulatory Efficiency (business freedom, labour freedom, monetary freedom) and Open Markets (trade freedom, investment freedom, financial free-

Source: Heritage Foundation, BRIU

Source: Heritage Foundation, BRIU

dom). Each of the twelve economic freedoms within these categories is graded on a scale of 0 to 100. A country’s overall score is derived by averaging these twelve economic freedoms, with equal weight being given to each.

Rule of Law A subcomponent of the Index of Economic Freedom, the property rights index which measures the degree to which a country’s laws

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protect private property rights, and the degree to which its government enforces those laws. Nigeria scored 38.1 index points, this means that property protection is feeble, conversely, a higher score is more desirable, that is, property rights are better protected.

Judicial effectiveness Secondly, the Nigeria judicial effectiveness is questionable. Over the years, the judiciary system had been bedevilled by political intru-

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sion, understaffing, underfunding, inefficiency, and corruption. In addition, impunity remains widespread at all levels of government.

A well-functioning legal framework is an independent body void of any interference which protect rights of all citizens against infringement of the laws by others, including government and other powerful individuals. It requires an efficient and fair judicial system to ensure that laws are fully respect-

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Recent freedom trends Five-year economic freedom trend shows that Nigeria economy has been mostly unfree. Nigeria’s economic freedom score is 57.2, making its economy the 116th freest in the 2020 Index. This represents a 0.1-point decrease when compared with the corresponding period in 2019. This, however, reflects a decline in the fiscal health score and also means that the country is mostly unfree arbitrating by the index score. Nigeria is ranked 14th among 47 countries in the Sub-Saharan Africa region.

This is slightly above the regional average of 55.1 points and well below the world average of 61.6 points.

The country’s economic freedom and development over the decades and in recent time have been clobbered by the nation’s chronic and severe political instability, intervention in the economy by the central bank and government, and pervasive corruption. The government maintains an overvalued official rate for Nigeria’s currency so that gasoline subsidies can be maintained.

Additionally, the economy is held back by power shortages, insecurity, high inflation, and tight credit conditions – the recent health crisis exposes.

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Extreme ownership is the secret for sustainable productivity Positive Growth with Babs

Babs OlugbemI

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ne of the characteristics of high performing organisations is the consistency in achieving results and creating value for the stakeholders. The results are not just consistent but are delivered in a manner that is sustainable year-on-year.

The value chain components of achieving sustainable results and building high performing organisations are the staff, the culture, service, and the leaders’ perspective. We have identified perspective as the difference between great leaders and those who are followers even with top-level positions.

One universal fact is that all leaders want to achieve results and create a stellar image and performance for their companies. In my series on fit to lead, I have positioned that not putting your team first as a leader will not only jeopardise your influence but will also create the Mourhino’s swing in your results. Focusing on your team as an essential tool for achieving the result is crucial in this emotional age. There can be no leader without a team, and no sustainable result is expected where the team’s focus is at deviant with the company’s direction.

Thus, the number one secret of leaders who achieve sustainable results in profitability, brand image, growth in

customer base and other stakeholders’ value is their ability to create teams with an extreme ownership mindset. In Q2 of 2019, my team at Mentoras Limited engaged three organisations in a series of programme tagged institutional legacy and leadership advancement with “think and act like the owners’ as the payoff. We focused on the staff and the entire team in our client’s business to act as leaders and owners of the company toward delivering the budgets and other identified performance indices like customer penetration, brand awareness, zero service failure and above is creating a culture of ownership and stakeholder mindset in the workplace.

Within 90days of our engagements, we received two testimonials of increase in sales figure and volume coupled with positive behavioural changes leading to reduced absenteeism and sick notes from the doctors. Employees became happier and fulfilled with the intervention and think with a leadership mindset. The secret behind our success is the ability to infuse extreme ownership thoughts and actions in the system despite noticeable shortcomings.

Extreme ownership is not a new concept. It is the same as creating a great place to work where most of the staff are connected to the journey of the company and are ambassadors of the brand on and off duty. It is synonymous to having a pool of engaged employees in an environment where performance and teamwork are the primary work tools with an appropriate reward system.

In their book, Extreme Ownership: How US Navy SEALs Lead and Win, Jocko Willink and Leif Babin who are former U.S Navy SEAL officers with experience in leading some of the most dangerous combat operations including the battle of Ramadi in Iraq shared their experiences and lessons from the battlefields. They aim to train leaders within the U.S Navy SEAL and in the

business world on the foundational principle for winning and achieving set objectives upon which all other factors rest. The principle is for leaders to take extreme ownership of the task and their teams. According to Jocko and Leif, no success can be achieved without all the team members believing in the task at hand with total commitment and most importantly is their belief in the leaders they are to follow to accomplish the mission; be it in the battlefield or the business market place.

In the book, they classify leaders as effective or ineffective based on the results they are achieving through the teams. Without instilling extreme ownership and stakeholder’s mentality in your team members, you cannot win the war in the marketplace, even with the most potent strategy. Hence, we are back to our starting point in my fit to lead series for 2020. The most armoury for a leader is his or her team.

For companies, the slogan: staff is our most valuable asset is correct but not in its entirety. The staff of organisations are not just assets, and they are the companies without which all the investment in branding and equipment are but a waste of the shareholders’ resources.

How do you instil the spirit of extreme ownership in your team? The function of doing this is essential for leaders who are keen on delivering on their numbers and the brand promise to the market.

Achieving the ownership mindset is difficult in an environment where there is no alignment of the value of the company with the staff aspirations.

However, this is not an excuse for any leader that wants to succeed. It’s like a game of football where the coach gets rewarded or fired for results since he or she has the right to choose, hire and fire players in the purpose of winning matches. In football, there is no one to blame, and the leader must accept responsibility for all, including his or her failure.

The first port of call is to win the

‘

Extreme ownership is not a new concept.

It is the same as creating a great place to work where most of the staff are connected to the journey of the company and are ambassadors of the brand on and off duty

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.

Shelter as a tool for societal development

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he importance of shelter cannot be over-emphasized. A shelter can be defined as a structure that provides cover or protection from danger, wind, rain or sun; the weather conditions experienced by man.

The last time a global survey was attempted on Shelter by the United Nations in 2005, an estimated 100 million people were homeless worldwide and about 1.6 billion people lacked adequate housing according to Habitat, a Non-Profit based in the United States of America.

Currently, the world’s population is increasing dramatically, with the fastest growth recorded in resource-poor countries or Lowand Middle-Income Countries (LMIC). The challenge of ensuring adequate homes for the added millions is staggering and Habitat estimates that an additional three billion people will need housing by 2030. Ten years ago, it calculated that meeting that target required building 96,150 houses every day (or 4,000 every hour). These staggering numbers must be even higher now, which is a herculean task.

Given this global data, we can only imagine what the figures will be for the black continent where people are trying to survive without even the most basic needs of life. In 2015, over 100 million people were homeless in Africa, with almost 1in 4 people and more than 1.6 billion living in inadequate informal settlements that are unsafe, overcrowded

and lack basic services such as water and sanitation to say the least, as stated by the United Nations.

In Nigeria, the housing deficit is estimated to be 17 million units annually, and the living conditions of communities in Nigeria reflect abject poverty when measured using the living standards indicators such as floor of the dwelling, cooking fuel, lighting, source of drinking water, sanitation and refuse disposal facility.

Asides poverty and other poor economic situations, there have been some cultural issues contributing to homelessness in some African settlements. In some Nigerian cultures for example, the death of a man gives way to sending his wife and children out of the homes they formally lived in, and it remains a tradition up till this day.

Though, there are no national statistics or data on the number of homeless people or people living in marginal situations in Nigeria. But some people and even families still sleep on road side, pavements, inside old train coaches/vehicles “danfo buses”, under bridges, in front of closed market stalls and even in the most unthinkable places. This also shows the housing gap situation caused by urbanisation, natural increase and undue migration.

It will be absolutely impossible to discuss this topic without mentioning the negative effect of poor living conditions on the overall health of the homeless, at a time like this

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when many health crises are staring at us all in the face.

Now, studies have shown that identified medical disorders are strongly related to the patients’ life conditions and vary significantly with the risk factors related to the social and economic situation. The frequency of some diseases (psychiatric disorders, tuberculosis, infections by the HIV and HCV) is higher in Africa than other developed continents, because of the poor living conditions that easily triggers and sustains these diseases.

Many proven solutions of the inadequate shelter challenge in Nigeria, and the Africa continent remains on paper, and are almost never implemented. There are many reasons for the non-implementation of these strategies to solve the shelter problem, amongst which is the need to increase the scope of stakeholders in resolving this plague.

The government alone cannot resolve the housing deficit issue, but a combination of Government, Civil Society Organisations, Organised Private Sector, Local and International Development Finance Organisation and other ancillary stakeholders will be needed to come together to provide the needed solution.

We have taken a first step at WODDI, a Non-profit, to support widows and the less privileged in underserved geographical areas to build and furnish over 200 houses. This we have done through scouting, evaluation, and carrying out actual construction of these

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battle win. The war within is the war of divergence in what the organisation claim to be and what they are to the staff first, next are the customers and other stakeholders. A leader must, no matter the culture aligns his or her team with the task at hand. The influence of the leader is one major factor that will determine if his or her team is willing to give it all or none to the task at hand.

I have been in an environment that is less conducive to achieving the set objectives of the company. However, the person of the leader and his influence was so potent that the team came out with a slogan “all it takes”. The team posited to do all it takes to protect their leader from failing and ignore the imperfection in the organisation to preserve respect and the integrity of their leader. Their mindset is a form of extreme ownership that will produce results for the leader in the short term, and the long run leaves the organisation in the valley of poor performance. This is because it only takes the leader to move on before the reality of the divergence in the workplace environment begin to influence the staff behaviours southward and consequently, the result they are delivering to the system.

There are many ways of ensuring your team exude extreme ownership of their job and performance. We will explore that and more on the work of Jocko and Leif in the subsequent episode. Before then, please know that your extreme ownership mindset as an individual leader will influence your staff and department. No matter how little the influence is, it will have an impact on your company’s leadership once you have a result to show for it and this will inevitably influence the institutional direction if you are consistent and keep growing as a leader.

WODDI NURTURE SERIES

Nkechi Rochas Okorocha

housing units.

Our impact assessment of this intervention has shown that shelter provision reduces barriers to opportunity, creating avenues to live above the poverty level and ensuring good health for the wellbeing of the beneficiaries. This has entrenched strong family foundation and helped to build lasting family values, thereby creating good neighbourliness and an improved community which supports the development of a stable society.

Our proposed recommendation on this challenge is for individuals and organisations to come together through strong and deliberate alliances to put a roof over the heads of many Vulnerable Nigerians for the betterment of the society Shelter is a crucial basic need to man and it can eradicate ill-health, crimes and abuse.

Let’s come together to provide shelter to the vulnerable in our communities.

Dr Okorocha is the founder/CEO of WODDI

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Coro: Opening up of interstate travel and sundry issues…Edo: Like Naboth, like Obaseki

ik MUO

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lot is happening on the coro front. The first and the greatest news this week is the open-up on interstate travels. Most Nigerians, especially transporters and allied businesses (including area boys) are rejoicing; they have lost about N200m due to the interstate lockup. However, the security agents are mournful because their collective ATM has been dis-enabled. I have seen and or spoken to those who travelled, some regularly, during the interstate lockdown.

It is just a matter of cash. Premium Times (1/6/20) did undercover operations on the matter and reported what they saw as an extortion bazaar, with security agents and state officials as the auctioneers. The Cable (25/5/20) did theirs and reported that with N16,500, you could conveniently travel from Lagos to Abuja (what are you going to do at Abuja that warrants such a huge investment on bribery?). So, the security agents are sad but as Osadebe would say, Osondi-Owendi! (some are happy and some are sad).

So how do Nigerians react to this “good” news. Those of us who are “village men” are glad that we should touch base with our folks at home.

Those whose residences and offices are in different states (like Lagos-Ogun; Abuja-Nasarawa) are glad that they can now do their bit in peace and save all the money and harrowing stress associated with illegal interstate operations. But people are worried about the implications in an environment where people do not believe that coro is real, lack personal discipline and believe that God would do it for them.

The picture that emerged of people desperately struggling for food at the Ibadan burial last week or those struggling for bus-space at Obalende after the tumultuous rains two weeks ago, show how safety-conscious we are.

But the government has little choice; given the nature of our socio-economic environment, Nigeria CANNOT afford to lock down its economy. We just lack what it takes to lock down. But coro is real. A dear friend of mine just informed me that he has been coronised while Governor Akeredolu of Ondo state, in the midst of the political roforefo his deputy has just tested positive!

On 11/6/20, we examined the political dynamics of the coro-war in Kogi State; how the state awarded itself the non-covid gold medal and frontally accused the NCDC of manipulating the process to ensure that Kogi is coronalised. (Ik Muo; Kogi State & Coro: The politics of acrimony & incivility,11/6/20) Before then, the state had announced to that it tested 111 samples “with testing kits sourced independently but following NCDC guidelines”, and they all turned out negative! After the stringent denial of the Kogi index case, and the mudslinging following it, everything appeared to have cooled down.

But in the recent past, the Kogi State Chief Judge (Nassir Ajanah) died at an isolation centre in Abuja. An Aid to the governor and President of Kogi Customary Court of Appeal also died. I did not see much in the press from the Kogi Commissioners for Information and Health but just as I was writing this, Governor Bello himself roared! He was tired of speaking through his “boys”.

At the third day prayers for late Ajana, the governor declared that the late jurist did not die of coro, a disease he described as artificial and worse than banditry, Boko Haram and genocide put together; adding that it was unfortunately imported, propagated and forced on the people for no just cause.

He ended by advising “his people” to reject the “cut and paste disease meant to create fear, panic; orchestrated to reduce and shorten their lifespan”! This is harsh and serious. Again, I ask: what is happening? Is there something that we, the ordinary people do not know?

While commiserating with the families, I believe that there is no benefit in denying the obvious because facts do not seize to exist because they are denied. I also encourage the Kogi State Government to prioritise the interest of Kogites and leave politics out of the matter.

In Anambra state, the process and access to coro-testing remains mysterious. On the 19th of May, it was gleefully announced that a private laboratory in the state, Accunalysis Diagnostic Cen-

tre Limited, Nnewi had been accredited by the Nigeria Centre for Disease Control and had begun COVID-19 testing in the state. This was in addition to other centres awaiting NCDC certification.

Last week, a good friend of mine got sick and his people were willing to undertake the coro test but it was not to be. The stories were that Anambra State does its tests at Irrua Specialist Hospital Edo State and that this is done biweekly! Irrua Specialist Hospital?

Once every two weeks? What happened to the certified centre at Nnewi and why should the test samples be collected once in two weeks? I tried to confirm “what’s gwan” from a state government official who is in a position to clarify but did not hear from him as at 30/6/20. Enugu State does its corotests at Ebonyi State. It may not be as stressful as the process in Anambra state but a friend of mine told me that one needed to know people at NCDC who can then give you a free passage to the place. So, what is happening? In Lagos, there are test centres in all the 20 “authentic” local governments areas.

The addresses are publicised and people encouraged to go and undertake the tests. There is even community testing in some parts of the country. So, what is the problem? Is this a federal or a state affair? Whatever the case and whoever is responsible, Anambra lives matter!

‘

The flurry of events involving Obaseki, Oshiomhole, Edo State and APC in the past two weeks will make an epic novel or film.

Unfortunately, I am neither Chinua Achebe nor Kunle Afolayan

Other Matters: Like Naboth, like Obaseki; well, not exactly!

Even my best friend, the one I trusted completely, the one who shared my food, has turned against me. Psalm 41.9 The flurry of events involving Obaseki, Oshiomhole, Edo State and APC in the past two weeks will make an epic novel or film. Unfortunately, I am neither Chinua Achebe nor Kunle Afolayan. However, if one cannot do a BIG thing, let him at least do a small one he can. Whether big or small, the common denominator is doing something! I have therefore decided to interrogate a minuscule of these weird, embarrassing and shameful happenings. It is shameful for our politics and politicians, for governance for our judicial system, for rule of law and for individuals involved, especially our former khaki wearing comrade.

The story of Naboth is told in 1 Kings 21:1-16. Our people say that being a neighbour to a big man is either a beneficial or woeful experience unless the neighbour is equally a big man. King Ahab wanted Naboth’s land to further

expand and beautify his already expansive abode. The King was willing to pay whatever it is worth in cash and kind but Naboth refused and His fiendish wife, Jezebel, was surprised that Ahab, a whole king could not dominate ordinary Naboth and she took it from there and that is where the similarity between Naboth and Obaseki arose. She wrote a letter in the king’s name, directing the elders to set up an emergency religious jury, procure some area boys to manufacture charges against Naboth, judge and condemn him to death and get the judgment executed. They did so and the king took over the land. (Don’t underestimate the power of women or you can go and ask Mugabe in the grave or Zimbabweans!). Naboth had no chance in the whole matter. The whole thing was cooked up from above and given the power of his traducers, he was out even before the battle started.

In this Edo political charade, Oshiomhole acted like Jezebel. Oshiomhole, whose own certificates have several gaping holes in them, set up a screening committee to clear the APC governorship candidates, including Obaseki who worked with him for 8 years and has been governor for almost 4 years.

The first committee expectedly floored Obaseki mercilessly and submitted its report to another committee where Oshiomhole was in charge and within a minute, the report was ratified. And this is an issue in which Oshiomhole has direct visible interest and thus he became a judge in his and his own case! And the winner is…. Eze-Iyamu; a classical situation of working from answer to question. Oshiomhole went home to dance… for destroying what he had built! That was in bad taste. I actually wanted to make sure that he had a good celebration and had sourced the most expensive champagne ever made, ‘Taste of Diamonds’, by Goût de Diamants, costing $1.8m bottle! That was the only drink worthy of such an epic celebration. Unfortunately, before the sinfully expensive drink, which bottle houses a real diamond right on its face could arrive, the tables turned so suddenly and violently and the former comrade fell from the pinnacle to the valley 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

The role of technology in preventing societal dystopia

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he year 2020 has had the world literally on its heels; from a global pandemic that wrecked economic turmoil, a rise in social injustices and worldwide outcry for accountability from governments, corporations and individuals. While some schools of thought admonish calm and a deference to established order, some others clamour for an overhaul of systems and processes as we know it, arguing that a change is necessary to forestall anarchy. The series of recent events globally has also called for a shift in perspective, demanding that we engage all sides in the discourse to chart the best course for the future.

In our attempt to have the conversations that matter and begin the process of remedying society’s many woes; be it a pandemic, racial prejudices or violence in any form, it is important to acknowledge the role of technology in spotlighting the issues. Riding a bus home and watching a YouTube video of mass protests across the world should give us an insight into how we can use that same platform to influence

change. We must understand the power in the tools that have enabled the world to cut across borders and unify voices in the advocacy for change, equity and a better future for all. Technology can play a major role in not just curbing trends but influencing change.

How? Multiple perspective capacity Technology can compound the effects of an event by simply being able to capture the moments and broadcast it to millions across the globe at the click of a button. This unique quality likens it to the supposition that if stars had in-built cameras, we would have been able to capture history from multiple perspectives, giving us the power to make better informed decisions for the benefit of mankind.

Always-On Repository Information is crucial for advancing societies and institutions but a key component of gathering information is being able to store and retrieve said information when needed.

With the passing of time, some data will provide

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better insight and give context to how an idea may be expanded upon. Thus, the ability to store and retrieve all data at anytime and anywhere becomes important, enabling us to provide a pattern to trends and better insight to make informed decisions. Present day cloud services provide archiving functionalities in stored data that help us detect patterns and similarities.

Identification Record keeping is an essential part of efficiently driving the affairs of any society or institution but what about proper tagging, and the ability to not only spot events but classify them properly by identifying factors such as; risk levels, starting points, affected areas, response timelines amongst others. Technology can provide the building blocks for systems that will effectively capture and identify events, creating information graphs from which better structures emerge just like search engines do today.

Forecasting In the domain of knowledge systems, tech-

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NDIDI OBINWANNE

nology provides sufficient data repositories that can be accessed in real time and used to forecast behavioural models and changes, equipping us with the ability to predict and prepare. The role of technology shouldn’t be to replace but to augment just as we see with machine learning.

Obinwanne is the Client Success Manager at Squad Digital Nigeria. She’s adept at Digital Transformation, Brand Building, Voice Over Artistry and passionate about building sustainable solutions for the African continent.

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Thursday 02 July 2020

BUSINESS DAY

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Onyeama, slavery and African agency CHRISTOPHER AKOR

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fortnight ago, the British Broadcasting Corporation (BBC) did a story on Dillibe Onyeama’s experiences at Eton College, one of Britain’s most storied boy’s schools founded by King Henry VI in the 15th century and which has educated generations of British royals and statesmen. Onyeama was just the second black person to be enrolled in the school and the first to graduate. He published a book in 1972, “Nigger at Eton” just three years after graduating, detailing his experiences of racism during his time at the school. Eton subsequently banned him from visiting the school.

Shortly after the story was published the Headmaster of the school, Simon Henderson, offered an official apology. According to the headmaster, although the school has made “significant strides since Mr Onyeama was at Eton but – as millions of people around the world rightly raise their voices in protest against racial discrimination and inequality – we have to have institutional and personal humility to acknowledge that we still have more to do.”

Mr. Henderson went further: “I

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will be inviting Mr. Onyeama to meet so as to apologise to him in person, on behalf of the school, and to make clear that he will always be welcome at Eton.” Onyeama accepted the apology and invitation, saying he would return to Eton to personally accept the apology as long as Eton covered the cost of his travels and accommodation.

Onyeama, a journalist and author, has written about 28 books, including a biography of his late grandfather, a powerful and influential slave trader and later, ally of the British colonial government. When he was asked whether he would like to apologise for his grandfather’s role in slavery, he demurred. According to him, his grandfather was ignorant and possesses little agency unlike the Europeans and Americans who knew what they were doing.

“My grandfather had no rudiments of any form of education at all and he knew nothing beyond the ‘kill or be killed’ way of life in those days,” Onyeama said. He was not done justifying his grandfather’s actions.

“It wasn’t done as a means of oppression. It was a means of livelihood and a demonstration of power and might. It was the way of life in old Africa before the white man brought civilisation, so to speak.”

This is a classical African attitude – the refusal to accept responsibility for just anything and always playing the victim card.

For context, Dillibe Onyeama is the brother of the current Minister of External Affairs, Godfrey Onyeama.

Their father, Charles Dadi Umeha Onyeama, studied at Oxford, mixed well with the top of British society, worked as a judge in Nigeria and rose to the position of a judge at the International Court of Justice at The Hague. With his wide connections in the British society, the senior Onyeama was able to register his second son, Dellibe, at Eton, at birth – the

first black boy to be so registered in the elite institution. His entire family’s education and privileges was built on the back of their grandfather’s resources accumulated from selling his fellow humans as slaves.

Yet, Mr Onyeama feels no need to apologise to victims and is still denying his grandfather’s agency.

We know the absence of education is no excuse for African involvement in the slave trade. It is pure greed and love of lucre. In fact, knowledge that existed then almost denied the humanity of blacks or placed them as inferiors to White.

Besides, the Holy Books to which the white merchants all subscribed to also justified slavery.

Also, the Igbo society in which the senior Onyeama lived was not the “kill or be killed” society Mr Onyeama described. Yes, there were constant internecine wars, and there was slavery, but it was not an anarchic society. Adaobi Tracia Nwaubani, in a piece for the New York Times last year described the Igbo society as composed of three categories: the diala, ohu and osu. The diala, of course, were the freeborn and enjoyed their full status at all times, except when they are captured in war or commit heinous crimes. The ohu were war captives from distant communities, enslaved in payment for debts or as punishment for crimes.

Equally, “a diala who wanted a blessing, such as a male child, or who was trying to avoid tribulation, such as a poor harvest or an epidemic, could give a slave or a family member to a shrine as an offering; a criminal could also seek refuge from punishment by offering himself to a deity.”

This person then becomes an osu.

“He was a person dedicated to a god, a thing set apart—a taboo forever, and his children after him.”

The diala often kept the ohu as domestic servants, sacrificed them in religious ceremonies or buried

‘ We know the absence of education is no excuse for African involvement in the slave trade.

It is pure greed and love of lucre. In fact, knowledge that existed then almost denied the humanity of blacks or placed them as inferiors to White

them alive at their masters’ funerals.

When the transatlantic slave trade started, the diala started selling the ohu to European merchants. The love of lucre pushed some, including Onyeama’s grandfather, into becoming full-time slave traders. Of course, with increasing demand for slaves by European and American merchants, the wars and the rate of enslavement increased.

But they clearly had agency. They knew what they were doing. They manipulated tradition for their pecuniary gains. The osu that were once consecrated to the goods and seen as untouchables were not spared in the slave trade. Even the Igbo process of appeal to the gods was abused. In Igboland generally, all criminal offenses and appeals to judgements were taken to Chukwu Abiama (The Great and All-Knowing God) to hear and pass judgement through the oracle. Those found guilty were either condemned to slavery or put to death by judgement of Chukwu (hence the river of blood).

The people of Arochukwu took full control of the hidden locations of the cave temple complex and turned it into their economic and political advantage. They caused all other smaller shrines to send all appeals to Chukwu Abiama and all those sentenced to slavery or death (most times unjustly too) were sold to European/American merchants.

At a time many in Europe and America are coming to terms with their heritage, their family wealth and privileges acquired as a result of their ancestor’s trade in humans, Africans are still living in denial of their agency in the despicable trade. At a time statues of slave traders and racists are being pulled down in Western countries, we continue to live in denial here, celebrating our African collaborators as heroes of their various societies. We are and have always been the victims. Shame!!!

The year of gas in Nigeria: Takeaways from $2.8bn AKK Gas Pipeline Project

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arring unforeseen circumstances, President Muhammadu Buhari will today (June 30, 2020) flag off the $2.8 billion Ajaokuta-Kaduna-Kano (AKK) gas pipeline construction.

As the Technical Adviser (TA) on Gas Business & Policy Implementation to the Honourable Minister of State, Petroleum Resources, Federal Ministry of Petroleum Resources (MPR), I steer & drive the implementation of the National Gas Policy built on the policy goals of the Federal Government for the gas sector vis-à-vis removing the barriers affecting investment & development of the gas sector; the delivery of critical gas infrastructure, discontinue with a centrally planned national market development and opt for a project-based & market opportunity-led approach as a more effective way to grow gas markets.

I also superintendent the overall vision of the FG to make Nigeria an attractive gas-based industrial nation as well as giving primary attention to meeting local

gas demand requirements, developing a significant presence in international markets and to move Nigeria from a crude oil export-based economy to an attractive gasbased industrial economy. I also double as the Program Manager (PM) of the Nigeria Gas Flare Commercialisation Programme (NGFCP) + AutoLPG in the National Gas Expansion Programme (NGEP) in the office of Honourable Minister of State, Petroleum Resources, Federal Ministry of Petroleum Resources (MPR).

The AKK Project The project is a 614km-long natural gas pipeline currently being developed by the Nigerian National Petroleum Corporation (NNPC).

With over 203 TCF of proven natural gas, Nigeria is finally on the verge of unlocking huge economic benefits arising from its natural gas endowment. For many years, the country had been hindered by absence of gas transmission pipelines in her bid to harness its abundant gas reserves for provision of gas to generate electricity, and

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stimulate rapid industrialisation using gas as feedstock for fertilisers, ammonia and other petrochemical applications.

No doubt the Ajaokuta-Kaduna-Kano (AKK) 614km-long natural gas pipeline project currently being executed by the Nigerian National Petroleum Corporation (NNPC).

The project with an estimated $2.8 billion cost... will result in the establishment of a connecting pipeline network between the eastern, western and northern regions of Nigeria.

It also aims to create a steady and guaranteed gas supply network between the northern and southern parts of Nigeria by utilising the country’s widely available gas resources.

The Project will also help reduce the huge quantity of gas flared annually in Nigeria, as well as the subsequent environmental & social impacts.

Benefits of AKK pipeline The AKK natural gas pipeline is intended to boost Nigeria’s electricity generation

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Justice O. Derefaka

capacity, as well as strengthen the industrial sector within the country’s eastern and northern regions.

The project is also expected to promote and increase the local usage of domestic gas.

Additionally, it is anticipated to increase the country’s revenue generation through the export of natural gas.

Derefaka is a Technical Adviser (TA) – Gas Business & Policy Implementation to The Honourable Minister of State, Petroleum Resources

@Businessdayng

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BUSINESS DAY

Thursday 02 July 2020

Editorial Frank Aigbogun

COVID-19 has disrupted business as we know it

editor Patrick Atuanya

Opportunity for “big rethink”. To re-imagine path to”next normal”

Publisher/Editor-in-chief

DEPUTY EDITORS John Osadolor, Abuja Tayo Fagbule 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 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

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he impact of the novel coronavirus, COVID-19, on sectors of the Nigerian economy and ways to manage this crisis has dominated discourse in the last three months. However, prior to the pandemic, Nigeria suffered some underlining challenges which have further exposed her status as the giant of Africa as a mere mirage. These fundamental limitations have also played in determining the severity of the current crisis on the economy.

The COVID-19 pandemic has revealed basically gaps in the society, businesses and government which explains years of snailpaced growth and development.

Proactive economies are focusing on closing up these gaps to unlock economic potentials and ultimately development.

Even as the Nigerian government and businesses respond to the COVID-19 crisis and execute reopening strategies, leadership and foresight will also be required to shape the path to the “next normal” reckons McKinsey, in a recent report.

One path will be to accelerate digital investment and transformation in Nigeria. The emergence of COVID-19 pandemic has disrupted activities, hence the need for a paradigm shift to digital transformation.

Impressive growth in the telecommunication and fintech space gives an insight to the growth potentials a digital-driven Nigerian economy could unlock. The adoption of digital processes in every sector of the economy will boost sectoral output, plunge cost and impact remarkably on the bottom line of firms, giving them better valuations in the capital market.

Also, Nigeria has largely been import dependent, with little activities in her export space. This has largely pressured down the value of the naira against the dollar given the high demand from importers and manufacturers. The response of the central bank was the restriction of foreign exchange for 43 items and the closing the land borders in a bid to lessen demand and stimulate local production.

This hasn’t fixed the problem.

Many domestic manufacturers have raised concerns over how less competitive and below standard

their products are in the international market. This points to the fundamental challenge of low productivity and competitiveness in the Nigerian manufacturing sector. As a result, growth in the sector has been unimpressive in the last 4 to 5 years.

The sector has barely recorded a 2 percent growth across quarters in the years under review.

Fixing this will require efforts from the fiscal and monetary authorities as well as businesses within the sector to tackle longstanding barriers to industrialisation and cooperate to seize new opportunities. Nigeria cannot rely on doing business as usual to come back from the brink. The aim will be to strengthen the sector’s competitiveness through consolidation and innovation while reshaping manufacturing with a focus on self-reliance.

In the words of Ngozi OkonjoIweala, former Finance Minister of Nigeria and one of the African Union’s COVID-19 special envoys, “this crisis has shown that globalisation may have led us to over rely on global supply chains. There will be a big rethink worldwide – not just because of politics, but also

because of countries’ ability to meet their basic needs.” Nigeria must develop stronger supply chains locally to become more competitive globally.

Lastly, another path to Nigeria’s development will be the formalisation of her informal sector. The Nigerian informal sector is a major contributor to the Nigerian economy, accounting for a significant portion of employment and GDP. The IMF says the sector accounts for some 65 percent of the nation’s GDP. In other words, we can afford the collapse of one or two large corporates, but not the informal sector. The COVID-19 pandemic has put the survival of many small businesses under threat and may result in job losses for many. The consequences of COVID-19 present an opportunity to accelerate the formalisation of micor, medium and small enterprises – and so improve their productivity, access to finance, and integration into the supply chains of larger businesses and the public sector. This will also improve the tax income of the government when these businesses are captured in the tax net.

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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Thursday 02 July 2020

BUSINESS DAY

COMPANIES&MARKETS MARKETS

Stocks fall by most since April after BUA, Cadbury losses

Mbari Uno launches open innovation platform to impact social well-being IFEOMA OKEKE

SEGUN ADAMS

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igerian equities dipped 1.5% on Tuesday, the most in two months, after BUA Cement and Cadbury slid by the most allowable in a trading session as preCOVID-19 highs continue to elude the market.

On April 6, the market declined 2.02%.

“Although profit taking was the tone of the market today, we expect to see bargain hunting in subsequent trading sessions,” said Lagos-based Afrinvest in a note to clients.

Bellwether stock BUA Ce-

ment and Consumer goods stock Cadbury fell 10% each to N38.7 a unit and N6.75 a unit respectively, to be the day’s biggest laggards offsetting big gains in Neimeth, Okomu Oil and ABC Transport.

Industrial goods index fell the most although 4 out of 6 sectoral trackers closed in the red.

On a year-to-date basis stocks are down 8.8%.

So far, stocks have declined about 3% in the last one month on profit-taking following the stellar rebound from its year-low in April where historic declines in oil price and lockdowns in key Nigerian states roiled the market. Still,

equities are up some 15% in the second quarter. The third quarter however might hold a different outcome for stocks on the heels of direr economic outlook that might dampen investors sentiment.

Manufacturing PMI contracted for the second straight month in June at 41.1 points, its lowest at least six years, bringing the quarter’s average to 41.75, a contraction, compared to 56.2, an expansion, in the first three months of the year.

Non-manufacturing PMI also contracted in the quarter.

Some economists say the PMI predicts GDP growth quite reliably.

In the first quarter GDP grew 1.87% year over year in what beat expectations of some analysts even though it was the slowest in two years.

The IMF has predicted around 5% decline with a 2.6% rebound in 2021.

For stocks it might be too early to tell but analysts say the outlook for the market is closely linked to that of the economy, as seen in previous years. On Tuesday, Afrinvest noted that Investor sentiment as measured by market breadth (advance/decline ratio) weakened to 0.3x from the 0.6x recorded in the previous session as 10 stocks advanced against 34 losers.

L-R: Gaurav Bisaria, director, Central Africa, Ariston Thermo Group; Jide Razack, warehouse manager-medical, Lagos State COVID -19 Response Team, and Solomon Umoh, marketing manager, Central Africa, Ariston Thermo Group, during the donation of Water Heaters to Lagos State Government in support of the Lagos State Government COVID -19 Team recently in Lagos.

Assets Microfinance Bank marks 2nd anniversary JOSEPHINE OKOJIE

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ssets Microfinance Bank Limited, a financial institution setup to empower Nigerian businesses has marked its second year anniversary in Lagos.

The bank’s anniversary was packed with several activities.

Since its acquisition in May 2018

by Swift and Allied Partners Limited, a division of Canary Point Holdings Limited the company has recorded over a 150percent growth in its loan portfolio and also a 200percent growth in savings &investments portfolio; a feat the management and staffs are proud of.

“The growing number of well-meaning Nigerians looking to accomplish a short term goal is greatly hampered by the lack of sufficient and available funds,” said Idris Ibrahim, managing director & CEO, Asset Microfinance Bank in a statement.

“Although the avenue for such wealth exists, there are bottlenecks that inhibit access and conditions are often steep and arduous. Here is why the business was setup – to alleviate such burden. We are financing the future of Africa,” he said.

He says the bank promises

Eat‘N’Go joins COVID-19 fight, donates N35m worth of pizza to frontline workers

to accomplish more in terms of financial empowerment for businesses as it poised to be the pacesetter in the provision of financial services to unbanked and financially excluded population. Since inception, the bank has made remarkable milestones in growing its client base by 170percent, accomplished by a committed staff strength increment of 65percent.

It has also transitioned from a robust technology based microfinance Bank to a more robust digital bank.

Focused on offering bespoke loan offers for Nigerians, the business covers all individuals who have a proven need for accelerated funds at convenient rates. There are packages for retail loans, salary advance loan, SME banking and trade finance among others all within the range of N50,000 to N5,000,000.

Also, the bank offers a wide range of services. These are savings (Assets Savings Account, My Target Savings), loans (micro, macro, nano, SME loans, salary advance loan, My Asset Financing (MAF) & school support loan), Investments (fixed deposit & My Asset Fix Investment (MAFI)) and wallets (lifestyle &travel).

ENDURANCE OKAFOR

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n a bid to contribute its quota to the fight against coronavirus in Nigeria, Eat’N’Go, Nigeria’s master franchisee for the Domino’s Pizza, Cold Stone Creamery and Pinkberry Gourmet Frozen Yoghurt brands said it has donated N35 million worth of pizza to frontline workers.

The Chief Executive Officer of the restaurant group, Patrick Mc Michael made this known during a recent Instagram Live session with BusinessDay on the topic- Nigeria’s Quick Service Restaurants: Leveraging Technology To Sustain Business & Satisfy Customers’ Needs Amid Pandemic.

“It is easy to give money to the different arms of the government but you always wonder if that gets to the end source and so we decide to help those in the frontline; the emergency workers in the hospitals, the policemen/women, the firefighters and other security agencies,” Michael said adding that the company will continue to the fight against COVID-19.

According to the CEO, the company has been to among

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other locations, the Yaba isolation centre to render its support to the frontline workers.

“We found out that their day gets so busy that they sometimes do not have lunch and so we have given out N35 million worth of products translating to about 15,000 pizzas,” Michael said.

Despite been hit by the coronavirus pandemic as it reported a 60 percent revenue decline during the five-week lockdown in Lagos, Ogun and FCT, Eat’N’Go said it will not be relenting on its Corporate social responsibility (CSR) like the slum2school programme which is concerning the impacts of COVID-19 on underserved kids and education.

“There is no doubt we have suffered along with many other businesses in Nigeria during the period and we are still suffering as we are trading below what we should be trading at this time and I expect that to continue a bit longer but we are getting better every week as customers are feeling more comfortable,” the CEO said adding that while other companies were laying off staff, Eat’N’Go retained all of its staff but slashed salary.

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bari Uno (House of Collaboration) a design hub in Lagos has officially launched its open innovation platform, the Mbari Uno Forum (MUF);anon-profitorganization.

The forum is a Collective of designersandprofessionalsusing design thinking rooted in indigenous realities to develop culture, products and services that solve social problems in Africa.

The group is set to begin its first innovation cycle in the Public Health sector in line with the United Nations (UN) Sustainable Development Goal 3: Health & Wellbeing.

Speaking on the launch, Chuma Anagbado, one of the founders of Mbari Uno, said that “the forum is our solution to the numerous challenges we face as a people and the time has come for us to look inwards and take charge of our life and destinies. It is time for Africans to solve the problems of Africa.

The Mbari Uno Forum provides the platform for meaningful collaboration and pooling of skills by not just African professionals but people that bear the brunt of the problems – all of us.

“The Covid19 pandemic engulfing the world has brought to fore the pathetic state of health infrastructure in Nigeria and by extension Africa.

There have been predictions that we would be the hardest hit as a result of our weak economies and deficient health infrastructure,”Anagbado said.

Reiterating the organization’s objective, Anagbado explained that the first innovation cycle of MUF will focus on SDG goal 3: Good Health and Wellbeing.

“We have chosen this goal in response to the unprecedented Covid19 pandemic and the attendant needs to urgently address the quality of public health care in our communities. We will be challenging ourselves on ways to improve public health care quality, accessibility and infrastructure in Nigeria, by identifying gaps and needs in public health care delivery.”

The first innovation cycle would begin this July and run through to September 2020.

At the end of each cycle, a detailed report of the Collective’s activities and solutions birthed will be published and an exhibition held within the premises of the Mbari Uno. This exhibition is expected to attract investors, policy makers, captains of industry, agencies and government functionaries in attendance. The group plans to hold an annual design summit that would be a roundup of all the developments from its quarterly innovation cycles.

With eye on growth, FCMB Group moves to acquire 96% stake of AIICO Pensions MICHAEL ANI

F

CMB Pensions Limited, a subsidiary of FCMB Group, says it has entered into an agreement that will see it acquire 96 percent stake of AIICO Pensions Limited.

The move is part of a deliberate strategy to grow the group’s investment management portfolio and build on the inherent synergies between its pensions and banking business, the firm said in a statement disclosed on the Nigerian stock exchange.

The statement which was signed by Donald Kanu, company secretary, AIICO Insurance Plc, noted that AIICO Pensions would cease to be a subsidiary of AIICO Insurance Plc at the conclusion of the proposed sale.

The acquisition by FCMB Group serves as one of several proactive steps, along with digitisation, that the company has embarked upon to enhance its market position and competitiveness as the industry braces itself for the commencement of Retirement Savings Account (RSA) portability.

According to the firm, Investment funds’ performance has been receiving greater traction amid a low interest rate environment. @Businessdayng

In this regard, FCMB Pensions also strengthened its investment committee with the addition of Titi Odunfa Adeoye to its Board of Directors. Mrs. Adeoye is the Founder and Chief Investment Officer of Sankore.

The new Director holds an MBA from Harvard Business School, a BBA in Accounting (summa cum laude) from Howard University and is a Certified Public Accountant (Gold Award).

Adeoye’s skills in investment strategy were honed at firms like Goldman Sachs in New York. Her area of expertise is strategies for the creation, growth and preservation of individual or family wealth with a focus on “alternative” asset classes.

Analysts have already seized on the announcement expressing broadly positive views of its impact for both FCMB Pensions and FCMB Group.

One investment banking analyst described the move as, “a positive move and a statement of intent from FCMB’s management to leverage its non-banking businesses to drive profitability”.

FCMB Group had since increased its stake in Legacy Pensions (now FCMB Pensions) to 91.6 percent in 2019 and now has full control of the business.

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Thusday 02 July 2020

BUSINESS DAY

COMPANIES&MARKETS

Business Event

Ganiyu Musa, Cornerstone Insurance GMD becomes chairman of NIA MODESTUS ANAESORONYE

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he umbrella body of insurance companies in Nigeria, the Nigerian Insurers Association (NIA) has elected Ganiyu Musa, the group managing director (GMD) of Cornerstone Insurance Plc its new chairman, to steer the affairs of the underwriting trade group for the next two years.

Ganiyu who was elected at the 49th Annual General Meeting of the Association held via virtual, takes over from Tope Smart, the group managing director of NEM Insurance Plc, who held sway in the last two years.

Ganiyu Musa will be supported by Ebelechukwu Nwachukwu, the managing director, of NSIA Insurance who was also elected the deputy chairman of the Association.

Ganiyu Musa is a highly experienced management professional with diversified experience in insurance, reinsurance, audit, consulting, business advisory and financial management.

Prior to joining Corner-

stone, Ganiyu worked at African Reinsurance Corporation for 19 years, holding key positions, including Director of Finance & Accounts, Chief Financial Officer for 10 years and Deputy Managing Director, Services for 5 years. He played a lead role in the creation and initial supervision of the risk management function at AfricanReinsurance Corporation and supervised the design of the Corporation’s investment guidelines and asset allocation.

He was also instrumental in the preparatory work and the eventual setting up of the African Reinsurance subsidiary in South Africa, where he subsequently served on the Board and Audit

Committee. At various times, Ganiyu served as a member of the investment committee of a US100million private equity fund and as chairman of the investment strategy committee of a top 3 Pension Fund Administration company.

He also worked with Pannell Kerr Forster and Arthur Andersen & Co where he trained and qualified as a Chartered Accountant and gained top quality experience in audit and financial consulting. He left Africa Re in 2011 to join African Capital Alliance (ACA) as Insurance Sector Specialist and a Director on the Board of Cornerstone Insurance Plc. Ganiyu holds a Bachelor of Science (B.Sc. Hons.) degree in Business Administration and a Master in Banking and Finance (MBF) degree, both from the University of Lagos. He is a Fellow of the Institute of Chartered Accountants of Nigeria (FCA), having won multiple merit awards in the qualifying professional examinations. He is also a Member of the Chartered Insurance Institute of London and a Senior Member of the Chartered Insurance Institute of Nigeria.

Executive Director, Corporate Affairs, FrieslandCampina WAMCO Nigeria PLC, Mrs. Ore Famurewa; Managing Director, Mr. Ben Langat; Chairman, Board of Directors, Mr. Moyo Ajekigbe; and Non-Executive Director, Mr. Peter Eshikena at the 47th Annual General Meeting of FrieslandCampina WAMCO Nigeria PLC held virtually online with shareholders yesterday at the FC Academy, FrieslandCampina WAMCO, Ikeja, Lagos.

L-R: Gideon Okeke, Nevada Bridge TV ambassador; Patrick Uzoh, chief operating officer, Nevada Bridge TV; Ego Nwosu, Nevada Bridge TV ambassador; Neville Sajere , chief executive officer, and, Alexx Akubo, Nevada bridge TV ambassador, at the unveiling of Nevada Bridge TV ambassadors in Lagos.

Chamber elects Valentina Mintah as first African female global board executive AMAKA ANAGOR-EWUZIE

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he International Chamber of Commerce (ICC), at its recently held virtual 2020 World Council Meeting elected Valentina Mintah, founder of West Blue Consulting as the first African executive board member.

Mintah, an internationally recognised expert in trade facilitation and business process automation, will be the first black woman to hold the position.

Having established West Blue Consulting in 2012, Mintah led her company to successfully develop and deliver a national single window platform for Nigeria, significantly optimising and improving trade facilitation in the country, and leading to savings of USD$25 million per month for Nigeria.

In 2014, West Blue Consulting further harnessed its customs modernisation expertise to develop and implement a national single window platform for Ghana. Within two years of implementation at ports across Ghana, the platform had saved the Government of Ghana about USD$ 500 million, which resulted in Ghana rising through the

ranks of the World Bank’s Ease of Doing Business” index, and becoming a vibrant hub for continental trade.

Commenting on her election, Mintah who serves as vice chair of ICC Ghana said that despite the current global health and economic crisis, Africa cannot and should not be overwhelmed. “ It i s t h e re f o re v i t a l that intra- African trade is strengthened in line with the goal of the Africa Continental Free Trade Agreement (AfCFTA). Therefore, leveraging on the growth opportunities for sustainable intra-African trade is an objective that should be supported for the benefit of the African economy,” she said.

According to her, focus should be on ways to empower and support small business owners to survive and thrive in the era of covid-19 and beyond, using digital technology and innovative business practices.

John W.H. Denton, ICC Secretary General, said the Chamber is delighted to welcome Valentina Mintah to its global Executive Board.

“Throughout her career, Valentina has championed international trade facilitawww.businessday.ng

tion both in her home region of West Africa and in a number of transitional economies across the world. With her additional role as Vice Chair of ICC Ghana, she is uniquely placed to promote the strengthening of commercial and trade ties within high growth global markets,” Denton said.

The new ICC Executive Board is the most diverse to date in terms of gender, ethnic and regional balance. The board is chaired by MasterCard CEO, Ajay Banga, while Maria Fernanda Garza is First vice chair aside Mintah.

Other new members of the Executive Board are Sheikh Khalifa Mohammad Al-Thani (Qatar), Sebastian Escarrer (Spain), Dario Gallina (Italy), Shinta Kamdani (Indonesia), Takeshi Niinami (Japan), Jane Sun (China), Patrick Obath (Kenya) and Harshi Pati Singhania (India), who were reelected to serve second terms on the Executive Board.

The newly constituted ICC Executive Board has a two year term which begins on July 1, 2020. ICC is the institutional representative of more than 45 million companies in over 130 countries across the world.

L-R: Oluyemi Kalesanwo, permanent secretary, Ministry of Women Affairs & Poverty Alleviation; Opeyemi Awojobi, sponsorship manager, Tolaram Group; Bolaji Dada, commissioner, Lagos State Ministry of Women Affairs & Poverty Alleviation, and Omotayo Abiodun, public relation manager, Tolaram Group, at the donation of GoodLife Magik fruit drink to the Ministry for Mothers to introduce to their Children in Lagos State.

L-R: Adebola Akindele, (top left) group managing director, Courteville Business Solutions Plc; Oye Ogundele, executive director, Africa expansion; Lanre Iyanda, general manager, business development and agencies and Adewale Sonaike, deputy managing director, international development and international businesses all of Courteville Business Solutions Plc; during the first virtual meeting with the Nigeria Stock Exchange (NSE) on ‘Fact behind the sustainability report 2019’

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Thursday 02 July 2020

BUSINESS DAY

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Thursday 02 July 2020

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

Market capitalisation

NSE Premium Index

The NSE-Main Board

N12.951 trillion

2,154.07

N12.952 trillion

2,139.63

NSE All Share Index

Week open (16-6–20)

24,826.75

Week close (26-6–20)

24,829.02

Percentage change (WoW) Percentage change (YTD)

0.01 -6.80

-0.67 1.11

NSE ASeM Index

NSE 30 Index

NSE Banking Index

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

1,048.27

762.45

131.54

425.20

219.31

1,841.29

1,219.69

1,005.79

1,054.83

1,078.56 1,067.98

290.81

762.45

290.81

129.47

432.87

198.55

1,864.71

1,194.99

982.36

-0.52

-1.57

0.63 -8.42

0.00 0.00

-0.98 -9.33

-18.92

2.90

0.00 -26.98

-4.84

0.26

-24.37

1.63

Odds favour the bears in early part of H2 over FX illiquidity

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of 26,968.79 points and N13.019 trillion respectively.

While countries are slowly easing lockdown restrictions amid the COVID-19 pandemic, the International Monetary Fund (IMF) last week released its forecast for the global economy, expecting it to contract by 4.9percent in 2020.

In addition, IMF forecast for Nigeria sees the nation’s economy contracting by 5.4percent, as decline in crude oil prices, coupled with the lockdown put pressure on tax receipts for the government.

Oil prices came under stronger pressure early this week as the spectre of partial lockdowns returns due to sharp spikes in new coronavirus infections around the world, raising concerns about the pace of economic recovery and fuel demand.

With crude earnings accounting for 60percent of government revenue, and 80percent of exports, economists expect the sharp drop in prices to trigger a recession in the nation.

While the Nigerian equity market is still being impacted by the significant deterioration of liquidity in the Nigerian FX market, Lagos-based Meristem research analysts expect the overriding sentiment in the equities market to be bearish.

Also, as second-quarter (Q2) earnings season inch closer, Meristem envisages that investors will adopt a “wait and see” approach. “However, we do not

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-2.03 11.10

NSE Pension Index

-2.33 -6.80

Blockchain -What You Should Know lockchain is an especially promising and revolutionary technology in the world today as many businesses and individuals have invested and benefitted so much from it.

What then is Blockchain, and what makes it so exciting and beneficial? Blockchain is a specific form or subset of distributed ledger technologies, which constructs a chronological chain of blocks, hence the name, “blockchain”.

A block refers to a set of transactions that is bundled together and added to the chain at the same time. A blockchain is a peer-to-peer distributed ledger, forged by consensus, combined with a system for smart contracts and other assistive technologies.

Together, these can be used to build a new generation of transactional applications that establish trust, accountability, and transparency at their core.

The reason Blockchain has gained so much admiration is because of the following characteristics: 1. Decentralization: It is not owned by a single entity; hence it is decentralized.

2. Transparency: The blockchain is transparent so one can track the data if they want to.

3. Immutability: Immutability, with respect to blockchain, means that once something has been entered into the blockchain, it cannot be tampered with.

4. The data is cryptographically stored inside.

Sequel to the aforementioned characteristics, what makes the Blockchain Technology so beneficial? i). Reduction in systemic risk : because blockchainb a s e d t ra n s a c t i o n s re q u i re pre-funding of a trade, credit and liquidity r isk would be practically eliminated. ii). Cutting out the Middlemen: A key advantage to blockchain technology is cutting out the middleman. In effect, because all transactions on a blockchain are validated by the community based on a mathematical probability, the requirement of a trusted intermediary is unnecessary.

Blockchain would allow you to have a decentralised stock exchange, without the need for a brokerage, clearing house, or settlement process. iii). Higher liquidity: Blockchain can reduce the inefficiencies through automation, which also leads to reduction in cost and thus lowering entry barriers resulting into increased market base.

B

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to N119.15billion (about $307.32million) in May 2020.

T h e p e r f o r ma n c e o f t h e review month when compared to the performance in May 2019 (N221.13billion) revealed that total transactions decreased by 46.12percent.

H o w e v e r, t o t a l f o r e i g n t r a n s a c t i o n s d e c re a s e d b y 33.73percent from N53.18 billion (about $137.37million) to N35.24 billion (about $90.89million) between April and May 2020.

Retail investors marginally out p er f or me d Institutional Investors by 0.56percent.

A comparison of domestic transactions in May and prior month (April 2020) revealed that retail transactions increased by 4.38percent from N40.42 billion in April 2020 to N42.19 billion in May 2020.

The institutional composition of the domestic market increased by 18.96percent from N35.07billion recorded in April 2020 to N41.72 billion in May 2020.

MSCI said it will continue to apply the special treatment as announced on May 12, 2020 for Nigeria. This is expected to spur negative investor sentiment in the nation’s stock market.

The Nigerian Stock Exchange (NSE) has reversed the gains recorded in the wake of the year as evidenced in the position of its performance indicators which decreased to 24,479.22 points and N12.769 trillion as at June 30, 2020 from January 3, 2020 highs

NSE Ind. Goods Index

NASD investor education series

Iheanyi Nwachukwu

n this early part of the second-half (H2) of the year 2020, stock investors should still approach the market with caution.

Despite a positive open to the week that ushers in the H2, investors should still keep a close eye on economic data that will indicate the shape of economic recovery.

Though, looking ahead anxiety is likely to remain heightened as the epic fight against the Covid-19 pandemic continues.

This spells bad news for risk assets such as crude oil (Nigeria’s major source of dollar revenue) which will inevitably remain under pressure.

The domestic market remains pressured as the fear of the second wave of the Covid-19 takes a toll on investors’ confidence. This is in addition to declining Foreign Portfolio (FP) inflow which has slowed the level of dollar liquidity at the Investor and Exporters (I&E) Window.

Recently, MSCI issued a warning on a possible reclassification of the Nigerian equities market from a frontier status to a standalone status, citing FX illiquidity as the major challenge.

Market watchers believe that if there isn’t significant improvement in FX liquidity, the situation will continue to impact stocks pricing and cause the market to remain on the bearish path.

Since the outbreak of Covid-19 and its associated lockdown, capital flight has continued to dominate foreign participation in the stock market.

I n Ma y 2 0 2 0 , t h e t o t a l value of transactions executed by domestic investors ou t p e r f o r m e d t ra n s a c t i o n s executed by foreign investors by circa 40percent.

A further analysis of the total transactions executed between the review month of May and prior month (April 2020) revealed that total domestic transactions increased by 11.15percent from N75.49billion in April to N83.91 billion in May 2020.

As at May 31, 2020, total transactions at the nation’s bourse decreased by 7.40percent from N128.67billion (about $332.22million) in April 2020

NSE Lotus II

rule out pockets of bargain hunting activities as the prices of some heavyweight tickers present an attractive entry point for investors”, the analysts stated.

Bargain hunting across heavyweight counters on the last trading day of last week had spurred the market to a positive close, after an otherwise bearish showing in the earlier four days of last week.

U n i t e d C a p i t a l re s e a rc h analysts believe the path remains gloomy for equities, amid pressure on corporate earnings, concerns about the exchange rate and the second wave of the pandemic.

“As a result, we expect the market to remain highly volatile and short-term gain driven”, the analysts said. They noted that the market has rebounded in second-quarter (Q2) 2020 following optimism in the global and domestic market economy.

“The equity market almost recovered to its pre-selloff level larg ely dr iven by domestic investors who took advantage of the market valuation amid a mild recovery in oil prices in the month of May 2020”, said United Capital research in its recent H2 outlook report.

Analysts Afrinvest expect to see sustained profit-taking in early trading days of this week ushering the second-half (H2). However, they believe the negative trend would be reversed before the end of the week on account of bargain hunting by investors. @Businessdayng

Thursday 02 July 2020

Innovation

BUSINESS DAY

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

17

TECHTALK

Broadband Infrastructure

Bank IT Security

Africans’ internet access increasing, but can’t work from home FRANK ELEANYA

I

nternet penetration in sub-Saharan Africa has surged tenfold since the early 2000s, compared to a three-fold increase across the world, but broadband access remains a barrier to working from home during the pandemic.

While the continent is yet to address many of the barriers to internet penetration, the proliferation of mobile technology has been particularly pronounced in the SSA region according to the IMF. The Regional Economic Outlook for sub-Saharan Africa report showed that most people access the internet via mobile rather than fixed-line broadband but IT infrastructure, internet usage, quality, and knowledge have improved.

As the pandemic continues to spread, the world of work has since shifted online. The biggest technology companies like Microsoft, Facebook, Twitter, Google to mention a few have moved most of their operations online and trained their teams to adapt. Apart from companies, governments across the world are also carrying out governance leveraging online platforms.

The SSA region which includes Nigeria and 47 other African countries, falls short when compared

with the rest of the world in the deployment of internet infrastructure such as fibre optic cables which the IMF suggests must be present to have higher levels of digital connectivity.

The report suggests the region is not acting at the pace expected compared to other regions. In a survey of policy responses to the pandemic, the IMF found that countries in the region that were able to switch to partial telework arrangements by mid-way 2020 had greater access to the internet (28 percent of the population) compared to non-telework countries (17 percent).

Since the pandemic broke out, countries in sub-Saharan Africa have

also adopted digital tools beyond governance, in sectors such as healthcare and education.

Another area SSA is leading the rest of the world in digital depth is mobile money. Mobile money

transactions account for 25 percent of the GDP, compared with just 5 percent in the rest of the world. New services and apps by fintech companies have contributed to this growth.

“We find that a 1 percentage point increase in the share of the population using the internet leads, on average, to a 0.37 percentage point increase in the growth of real per capita income,” the IMF report noted. “This is slightly higher than other studies that are based on a broader sample of countries, possibly suggesting a higher marginal return from connectivity for countries in the region.”

Despite the 24 percent increase in internet access, mobile download speeds

are on average more than 3 times slower than in the rest of the world. Affordability remains a lingering obstacle to adoption as the cost of accessing digital technologies remains high relative to incomes.

Part of the challenge is that mobile download speeds in the region are, on average, more than three times slower than in the rest of the world. Affordability remains a lingering obstacle to adoption as the cost of accessing digital technologies remains high relative to incomes.

The institution recommends that expanding internet access in sub-Saharan Africa by an extra 10 percent of the population would increase real per capita GDP growth by 1 to 4 percentage points. It also points to the benefits for businesses and workers.

For instance, companies that use email for business record annual sales that are 2.6 times higher. In addition, digitally-connected firms on average employ eight times more workers and create higher-skilled full-time jobs.

But to achieve this, countries in the region must invest in infrastructure; both traditional digitalfriendly infrastructure (including more reliable electricity) and digital-ready IT infrastructure, among other things.

Permanent remote work gets boost as Microsoft close retail shops worldwide FRANK ELEANYA

M

icrosoft has closed down its physical store locations across the world permanently, a sign that remote work is gaining attraction from big companies as the next frontier for the future of work. With the announcement, Microsoft’s two retail shops in Nigeria and elsewhere in the world will be shut down.

Andela, a software engineering talent provider with significant talent exposure in Nigeria and other coun-

tries in Africa is one of the companies that recently announced it was going on full remote work mode and would be selling off its assets in Nigeria and other places.

For Microsoft, it had on Friday, 26 June described the move as a strategic change in its retail operations. The change means Microsoft’s retail team members will continue to serve customers from the company’s corporate facilities and remotely providing sales, training, and support. Microsoft also plans to invest in its digital storefronts on Microsoft.com,

and stores in Xbox and Windows, reaching more than 1.2 billion people every month in 190 markets.

“Our sales have grown online as our product portfolio has evolved to largely digital offerings, and our talented team has proven success serving customers beyond any physical location,” David Porter, Corporate Vice President, Microsoft said in a statement on its website. “We are grateful to our Microsoft Store customers and we look forward to continuing to serve them online and with our retail sales team at Microsoft corporate locations.”

Prior to the announcement, Microsoft had maintained several retail shops in Nigeria. But a check by BusinessDay showed that the stores are no longer functional and customers are being directed to use the online channels.

According to the company, it had been planning for the closures since March by also helping small businesses and education customers digitally transform, virtually trained hundreds of thousands of enterprise and education customers on remote work and learning software, and helped customers with support

calls. The team supported communities by hosting more than 14,000 online workshops and summer camps and more than 3,000 virtual graduations.

We deliberately built teams with unique backgrounds and skills that could serve customers from anywhere,” said Porter. “The evolution of our workforce ensured we could continue to serve customers of all sizes when they needed us most, working remotely these last months. Speaking over 120 languages, their diversity reflects the many communities we serve. Our commitment to

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growing and developing careers from this talent pool is stronger than ever.”

On the list of big companies going full remote is Facebook which announced in May that more than 50 percent of its staff will likely be working from home in the next ten years.

Twitter’s CEO Jack Dorsey also said the staff of the social media company will be allowed to work from home permanently, even after the COVID-19 pandemic reduces.

Other companies include Lambda School; Shopify; Coinbase; Square; Upwork; Otis and AWeber.

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Thursday 02 July 2020

BUSINESS DAY

Interview

‘Nigerian states must institutionalise PPP to bridge infrastructural gap’

Olukayode Fabunmi is a partner with J..O. Fabunmi & Co. and he is currently a Director of Business Law Academy which is a human and capacity development institution that offers specialised trainings, organise events, conferences, roundtables, etc., publish books and journals, and also offer advisory services. In this interview with SeyiJohn Salau, he speaks on partnership between the private sector and the public sector (government) for the provision or delivery of infrastructural assets and services by the private sector on behalf of the public sector. Excerpt:

C

an you please tell us what PPP is all about?

Well, PPP means different things in different jurisdictions but the general consensus is that PPP is a partnership between the private sector and the public sector (government) for the provision or delivery of infrastructural assets and services by the private sector on behalf of the public sector. Of course, there are certain elements or characteristics you want to ascribe to PPP, for instance, with respect to ownership, the legal title of the infrastructure assets remains with the government while the private sector has an equitable title or interest during the tenure of the contract.

The private sector in PPP also plays key roles in managing, operating and maintaining the asset, and organising financing for the PPP project. The parties carry on PPP for a specific number of years expressly mentioned in the PPP contract and in every PPP, it is very important to identify, allocate and mitigate risk.

Definitely, the overall purpose of PPP is to ensure that infrastructure assets and services are eventually delivered so PPP contracts have to be more output-based than input based and while the government or the users may pay the private sector based on the delivery of assets, the government has to ensure that the private party follows contract specifications.

Governments tend to use PPP because there is no complete divestment or sale of assets to the private sector especially where social or economic infrastructure are involved.

Instead, the private sector provides additional capital, improved skill, efficiency, innovation and expertise in the development of new service or projects which increase economic growth and development. In the end, when a PPP contract expires or is terminated, ownership interest in the infrastructure assets would revert to the public sector, and the private sector is rewarded for its endeavors through what we could call user fee or through government annuities.

What has really propelled you to pursuing PPP initiative?

I would say it was by accident in a way. In the early 2000s when I was doing my Post Graduate studies, I focused my research interest primarily on foreign investment with particular emphasis on classification of foreign investment into direct investment and portfolio investment. It was during my research I stumbled onto privatisation. At the time, Nigeria had started the privatization programme and there was a lot of interest in emerging markets such as Nigeria so I was able to learn more about privatization and my interest was developed in this regard. By the mid2000s, however, the active part of the privatization programme was winding down and the new thinking was concessioning of government assets which has now become PPP. Luckily, I worked as an advisor with one of the government agencies that was at the forefront of this evolution at the time.

We drafted agreements, did advisory work and trainings which piqued my interest in PPP. Prior to this, while I was studying, I had made contact with the International Project Finance Association in London where I received a lot of resources and support and since they were actively looking at Africa, I got in touch and I became their first country Chair in Nigeria and their representative in West Africa.

Considering PPP initiatives critically, is Nigeria heading in the right direction?

Yes, I think it is. I think Nigeria has already done a number of things and is currently doing the right things that will develop the PPP market. When you talk about encouraging PPPs, the first you look at the legal and institutional framework which sit right there at the top and in the case of Nigeria, we already have these in place. For instance, we have a law in place that establishes the Infrastructure Concession Regulatory Commission (ICRC) which regulate PPP and I will say this is a very important step. Nigeria also

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Olukayode Fabunmi has the right political leadership. The ICRC itself, which is the Agency that regulates PPP, is domiciled in the Presidency and this is also a very good indication of the political support that PPP has at the federal level.

Another area in which Nigeria is heading in the right direction is in the aspect of capacity – the ICRC is currently led by one of the most arguably seasoned practitioner in the industry which is very demonstrative of how well the ICRC is doing.

ICRC, as a whole, also has very experienced hands-on people who are knowledgeable and have now gotten practical experience.

How will PPP benefit the ordinary man on the street?

Well, I think that although PPP may not have benefitted the ordinary man on the street as much as he or she would want, there is a clear PPP policy direction that focuses on ordinary people. So, if you look at PPP, you see that it seeks to provide more employment opportunities, more access to infrastructure, more access to quality infrastructure and it is going to lead to ease of doing business. A very clear example may be made from the Lekki Expressway in Lagos State.

The Lekki Expressway was procured through PPP and this expressway has opened up the Lekki corridor into an economic zone where you find a good number of residential estates and businesses, and is now even becoming more industrial with the refinery and sea ports.

The ordinary man in Lagos, for instance, is obviously impacted by PPP. If you go to the ports as well, you will be able to observe massive investment through PPP in the ports and you would see that the ordinary man is also benefitting. To an extent, PPP has delivered infrastructural assets but more still needs to be done in social infrastructure from which the ordinary person will benefit more directly. By the time we start having more deals going to the market, it means that the economy will expand and there will be employment opportunities.

Few years back you did a conference on PPP, may I ask how did this impact on the economy?

Ibelievethattheconferenceought to hold annually. The last conference had delegates from about ten countries attending and there is need for constantengagement.Theconference put the nation on the map; it was advertised in London, Dubai, New York and major capitals of the world which meant that Nigeria was on the investment map. From the last conference, we were able to build a community, an ecosystem which had interested parties show interest in Nigeria, build and develop local capacity as well, for instance, we can now undertake a lot of advisory work locally without recourse to any other jurisdiction or expertise. I think a lot of lessons have been learnt and I think we should have moreoftheseengagements,thesekind of forum or fora where we have international delegates come into Nigeria, and where we have Nigerian projects showcased because, you know, investment promotion is a huge part of getting the right investors. We need to tellourstoriesbyourselvesandcontrol the narrative.

PPP is often misconstrued with privatisation, as an expert in both fields, is there any real difference?

PPP is always confused with

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privatization but both concepts are quite different. A very simple way to look at it is that the main difference is in ownership. In PPP, government retains legal ownership of an asset whereas in privatization, government divests its interest in an asset, that is, the government interest is sold out absolutely. I give you a good example – if you look at the ports, for instance, you have the private sector operating in that space, investing in that space, and running the ports but ownership of the port is still with the federal government. At the end of the agreed period (usually 20, 25 or 30 years), depending on the arrangement, the asset reverts to the government.

On the other hand, privatization is complete and total divestment so the government sells off completely but under PPP, it retains the ownership.

Finally, in PPP, government shares the risks with the private sector but in privatization, it transfers all the risks to the private sector.

Nigeria has a huge infrastructural gap with the rising population; do you think the government is doing enough leveraging PPP? I think the context for this is to look at Nigeria as a federation so that we have the Federal tier of government, the State tier of government and the Local tiers of government. For the Federal tier, I will say Nigeria is on track but we will still need to shift the gear up a notch. While projects are being properly developed and more projects keep coming in, there is still a need to accelerate the projects that are comingintothePPPmarket.TheICRC is of course already doing a good job but still needs to do more. At the State level, more work needs to be done in the States that are more suited for PPP especially with regard to the provision ofinfrastructureassetsforschools,hospitals,housing,portablewatersystems, and waste management systems, etc.

The State has huge potential for PPP and there is an increasing need for PPP to be implemented in each State; so the States need to step up and play key roles in the development of PPP. Generally speaking, not much is being done at the State level in terms of creating a legal and institutional framework, which impacts negatively onprojectdevelopmentandthishasto change. At the local government level, PPP development is non-existent and this is sad because the local government is the closest to the people and PPP projects developed by the local government will directly impact the ordinary man.

How do you rate PPP in Nigeria?

The PPP market in Nigeria is definitely developing. I would rate the Federal government a 6 out of 10 because they have been able to establish the legal and institutional frameworks, have the Commission running and it can only get better. For the State government, I would give a two and a half out of 10 because as we speak, some States have legal but not institutional frameworks and many States need to put more in place to get more deals to go into the PPP market.

Out of 10, I would score the Local government a 0 because not much has been done and there is high potential in the local government areas which are closer to the grassroots and can provide infrastructure that would benefit the ordinary man.

Lastly, what are your thought on how PPP can be moved forward?

Well, like I said before, States need to institutionalise PPP and a lot more work needs to be done. In its entirety, I think we need to build capacity in the right direction and look more inwards than outwards to develop our local capacity all across the value chain.

Government needs to do a lot more capacity building at the State and the Federal levels and project development at the Federal level needs to be much more thorough. One of the things I have seen on the field is that a lot is left to the advisers to decide and I think the government needs to do a bit more in project ownership, that is, play a little bit more active role in this regard and the project development aspect needs to be more robust.

Thursday 02 July 2020

BUSINESS DAY

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insurance today

E-mail: insurancetoday@businessdayonline.com

Recapitalisation extension good as Covid-19 impact increases pressure on insurer production, profitability Modestus Anaesoronye

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nsurance companies in the country currently undergoing a recapitalisation exercise will have to struggle for business productivity and profitability for the short to medium term following huge impacts of the Covid-19 pandemic on the industry.

Covid-19 lockdown and policy regulations of government as well as economic slowdown generally too have taken a huge toll on insurance business, as most consumers till now have preference for food and other essentials to taking up insurance policy or renewal of existing policies.

This is as claims continue to come in their numbers, with already insured consumers not wanting to lose any claims opportunity, while awareness gets increasing high.

Analyst who spoke on the state of the insurance industry said the recent extension of the recapitalisation guideline was a big relief to the industry, as Covid-19 has eroded the objective of the exercise.

According to the analysts, recapitalisation of the industry at this time could mean excess capital if there are not

Sunday Thomas, commissioner for Insurance

Pius Apere, chairman /CEO, Achor Actuarial Services Limited

enough businesses to deploy the capital.

Pius Apere, chairman / CEO, Achor Actuarial Services Limited said the most obvious potential impacts of the covid-19 on insurers are the pressure on sales from reduced business activity, the upsurge in claims arising from life, health, travel and business interruption insurance etc.

“The impact of covid-19 on businesses (e.g. business interruption), economy (e.g. volatility of markets) and human lives (e.g. death) has put pressure on insurance business sales resulting from reduced business activity e.g. less use of face-to-face

channels, social/physical distancing etc.

The insurance industry is likely to experience reduced sales and attendant losses in the covid-19 period even after the recapitalisation exercise, and this would affect the insurers’ profitability and solvency over the short term, in which case the industry may appear to be over capitalised if the benefits of the recapitalisation could not be achieved Apere who is also an actuarial scientist and chartered insurer further noted that the above impacts are likely to affect the solvency position of many insurers, which would require regulatory

scrutiny with appropriate solvency tests to ensure insurers can withstand the immediate and knock-on impacts of the covid-19.

“This no doubt, this had already affected the implementation of the recapitalisation guidelines, hence the recent extension of the recapitalization deadline to 30th September 2021, which is a welcomed development.

The extension would allow insurers space to review their strategic initiatives/plans to meet the recapitalization deadline.”

According to Apere the recapitalisation exercise had been designed to provide the required capital base to address some critical challenges facing the industry over the decades in order to reform the sector for sustainable economic growth and development.

He said the key critical challenges that the recapitalisation was meant to address include inability to pay genuine claims, lack of innovation in product development, lack of consumer education and awareness, poor digitalization (ICT) of insurance operations, inability to underwrite bigger risks, low market penetration, inadequate human capital development, just to mention a few.

REGIC advances to deepen knowledge on agriculture insurance in Nigeria Modestus Anaesoronye

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oyal Exchange General Insurance Company (REGIC), one of Nigeria’s leading insurance companies offering general and special risks protection policies recently held a series of Agriculture Insurance webinars, aimed at increasing the general awareness and perception of agriculture insurance in Nigeria.

It also targeted at seeing how good agriculture insurance practice can impact positively on the business of farmers, agro processors, agropreneurs and other stakeholders in the agrobusiness value chain in Nigeria.

A four-part webinar series anchored by Chukwuma Kalu, head, Agribusiness and Business Development, REGIC, looked at the various aspects of the agriculture industry in Nigeria and the role(s) insurance plays in developing and deepening access to financial

services to operators in the agriculture sector.

The first in the webinar series was titled “How Farmers Can Leverage on Agriculture Insurance to Derisk Their Business during Covid19 Pandemic Times” and papers were presented by Kalu and Royal Exchange’s Agric Insurance technical consultant, Agrotosh Mookeej, a fellow of the Institute of Actuaries, UK and MD, Risk Shield Consulting Actuary, Zimbabwe.

The second edition looked at Agriculture Insurance being a key driver of inclusive finance for farmers, agribusiness SMEs and agroprocessors in Nigeria, explaining in detail, the concept of inclusive finance to farmers and the role of insurance in supporting farming operations. The second webinar also looked into aspects of crowd-funding requirements in raising capital for farming in Nigeria.

The third webinar took a deep-dive into the Ginger value-chain and explained how

Weather Index Insurance (WII) can be used to protect businesses and livelihoods.

This was held in conjunction with the GIZ Nigerian Competitiveness Project (NICOP), a partnership between the German Government, the European Union and the Federal Government. YakubuPaiko, Adviser, Access to Finance and Investment, GIZ NICOP, joined the team of MessersKalu and Agrotosh to explain the concept and product design of Weather Index Insurance (WII) to farmers, farmer cooperatives and other agriculture stakeholders.

The fourth and last in the series, to herald the start of the planting season, focused on using Agriculture Insurance to digitize farming operations and featured Agritask (REGIC’s technology partners, based in Tel Aviv, Israel) as well as representatives from the Nigeria IncentiveBased Risk Sharing System for Agricultural Lending (NIRSAL) and Royal Exchange

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General Insurance.

The webinar centered on NIRSAL’s role in promoting digitization of farming practices in rural communities; using agric-tech to drive precision agric-insurance inclusion among farmers and also extended to how farmers and agri-businesses can build and gain a competitive edge by using such technology to enhance their farming operations and productivity, leveraging on agriculture insurance.

Speaking on the rationale for the webinars, Benjamin Agili, Managing Director/Chief Executive, REGIC, stated that “these agriculture insurance webinars we just concluded is the company’s way of expanding the frontiers of agriculture insurance adoption in Nigeria, making it easier to be understood and accepted by farmers, agroprocessors, agropreneurs, farming cooperatives, off takers and other stakeholders nationwide”

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AIICO donates facemasks to support fight against Covid-19 Modestus Anaesoronye

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IICO Insurance Plc has donated reusable facemasks to the Nigerian Red Cross, We Stand Foundation and the African Clean Up Initiative (ACI). These NonGovernmental Organizations are actively leading initiatives for public health and humanitarian causes in battling Covid-19. This is in alignment with the Nigerian Stock Exchange ‘Mask for All Nigerians’ campaign initiative. The gesture is a demonstration of the Company’s relentless commitment to its corporate social responsibility causes.

This is against the backdrop of Federal Government’s

Babatunde Fajemirokun, MD/ CEO, AIICO

directive for the compulsory use of facemasks in public places as a means to curtail the spread of COVID-19 as it gradually eases lockdown nationwide.

“AIICO recognizes the need to impact society in meaningful ways such as this.

Our hope is that by donating reusable facemasks, we join to help facilitate the adherence to this safety guideline from the government and the World Health Organization, WHO.” Stated, Abimbola Shobanjo, AIICO’s Corporate Responsibility & Sustainability Manager.

It will be recalled that during the nationwide lockdown, AIICO organized a feeding relief programme to feed the less privileged and also donated post-natal hygiene kits to nursing mothers in poor communities in Lagos.

AIICO Insurance is a leading composite insurer in Nigeria with a record of accomplishment of serving its clients that dates back over 50 years. Founded in 1963, AIICO provides life and health insurance, general insurance, investment management and pension management services as a means to create and protect wealth for individuals, families and corporate cus-

Covid-19: NCRIB supports LASTMA with facemasks

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he Lagos State Government has applauded the Nigerian Council of Registered Insurance Brokers for the donation of 1,000 pieces of customized facemasks to the officials of Lagos State Traffic Management Authority (LASTMA).

The Council, in recognition of the risks exposure of LASTMA officials to the COVID-19 in the discharge of their official duties of traffic management in the state, produced facemasks that were distributed to the field officers.

Receiving the materials from the NCRIB team on behalf of the State Government at Lagos State Ministry of Transportation, Ikeja, Fredric Oladeinde, State Commissioner for Transportation appreciated the Council’s gesture and promised to judiciously distribute the facemasks to the officers for protection against infection occasioned by COVID-19.

Oladeinde noted that the Council has again etched its name in the golden book of the state, stressing that the donation of facemasks to the @Businessdayng

officers would further encourage them to ensure better management of traffic in the city.

“We appreciate the NCRIB for deeming it fit to come our way through the donation of facemasks to LASTMA at this time of pandemic, threatening the existence of human race globally. I am assuring you that we will make good use of what you are donating to us today to the benefit of the officials who are daily exposed to the hazard of COVID-19.

“We will not relent in discharging our responsibilities as traffic management authority in Lagos. Ours is to ensure free flow of traffic in the state”, he assured.

In her remarks earlier remarks Bola Onigbogi, president of the Council, applauded the diligence of the Lagos State Government in managing the Covid-19 pandemic through the pragmatic approach of Governor Babajide Sanwo-Olu. She noted that the narrative of the pandemic in Nigeria would have been different without the strategic and foresighted roles of the Government in managing the disease.

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Thursday 02 July 2020

BUSINESS DAY

BANKING Banking industry risk indicator 12.14 score shows high risk Stories by HOPE MOSES-ASHIKE

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igeria’s Banking Industry Risk Indicator (BIRI) score of 12.14 (out of 100) is a reflection of high risk following weak economic growth in the wake of the 2016 recession and declines in oil sector revenue, alongside a weak regulatory environment and poor living standards, according to a report by FitchSolutions.

FitchSolutions rank each market out of 121, where first is lowest risk and 121st is highest risk. Nigeria is in 117th position.

Nigeria’s BIRI scores show that its banking sector remains one of the most systematically fragile of the 121 banking sectors that the firm assesses as part of its BIRI universe, posing significant risks to macro financial stability in the country.

The structural backdrop of the banking sector has improved somewhat, with the

BIRI having risen from 0.00 in the fourth quarter of 2017 (Q417) to 12.14 in the first quarter of 2020 (Q120).

However, the latest score remains below the historical average of 21.72. Nigeria currently sits at 117th place out of the 121 countries that are captured in the rankings.

Nigeria’s score in the financial component stood at 46.84 in the first quarter of

2020 (Q120), reflecting moderate risk but an improvement from a score of 23.38 in the fourth quarter of 2017 (Q417). A return to positive economic growth following a recession in 2016 has facilitated strengthening asset quality, with the ratio of NonPerforming Loans (NPL) to gross loans decreasing from 14.81 percent in Q417 to 6.03 percent in Q120. However,

the bank credit to GDP ratio remains low and has fallen from 13.36 percent in Q417 to 11.03 percent in Q120.

The Central Bank of Nigeria (CBN) staff report showed a marginal increase in the non-performing loans ratio in April as compared to February 2020.

Shonubi Folashodun, CBN’s deputy governor and a member of the Monetary

Policy Committee (MPC) meeting, noted in his personal statement at the last MPC in May 2020 that amidst the general lull in the business environment, the banking system continued to show enduring resilience. In terms of size, industry total asset and deposit base rose further at the end of April 2020, maintaining the upward trend since the beginning of 2020.

Though industry liquidity ratio declined to 38.4 per cent, due mainly to the Loan To Deposit Ratio (LDR) policy, which continued to promote increased credit, the ratio remained above the regulatory threshold of 30.0 per cent. Industry capital adequacy ratio moderated to 14.9 per cent, as a result of increased risk weighted asset, which more than offset the marginal rise in qualifying capital, while the nonperforming loan ratio rose marginally to 6.6 per cent.

Returns on asset and investment were at levels that compare favourably with levels in

Ecobank calls for business culture rethink to stabilise in Covid-19

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igerian have been advised to move from the realm of denial, anger and accept the reality of the ‘new normal’ occasioned by COVID-19 pandemic by properly articulating their goals and developing a financial plan based on available resources.

This was the submission of investment and financial experts at the Ecobank Webinar on the topic: ‘Personal financial stability in a changing environment: achieving balance in the new normal’, held in Lagos recently.

In his presentation, Olufela Popoola, managing director, EDC Fund Management Limited, a subsidiary of Ecobank group, pointed out that though commodity prices are stabilizing and stock markets are recovering globally, Nigeria is in recession mode with increasing inflation, pressure on exchange rate and increased government borrowings. He posited that individuals and businesses should worry less about the current realities, but start to think differently as they positively forge ahead. Specifically for individuals, it was time to carefully review their life’s goal and objectives and thereby; - review/develop a financial plan, align this plan to the current financial

realities and their expected future resources and ensure that these plans become a reality by having structured investment programmes to achieve same.

“To adapt and stabilise, rethink your business culture.

Focus more on goals, not (necessarily) processes, listen more to customers and respond quicker, change working style –flexibility, Study what competition is doing –be more professional, improve internal communication & information sharing and Change working condi-

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tions to be more employee oriented. This is not the time to procrastinate. Don’t think you have too little or too much funds to start a plan, but rushing to start an investment may not be the best for now.

You need to consider risk, returns and time horizons.

As a matter of fact, this is the time to speak to experts like us at the EDC Fund management. Investment options and plans include corporate bonds, government securities, private equity, Eurobonds, life insurance, real estate, commercial papers, and managed

portfolio, among others’’.

Also speaking, Okey Okere, country manager, Hofstede Insights Nigeria, made a case for people to rethink their lifestyle and business culture to adapt and stabilise under the ‘new normal’. According to him, “there are countless speculations about changes to the whole-world as we know it, but we can’t really tell how COVID-19 will change the world forever, what the “new normal” will eventually be, how long it will last and the impact on the world, Nigeria, businesses and our personal finances. But one thing is sure, we need to make changes.”

Okere listed the businesses that that are making gains despite COVID-19 pandemic as ICT services, e-commerce companies, personal care products, agriculture, food retailers and local delivery companies, adding that sectors such as aviation and shipping, consulting and professional services, education, financial services, manufacturing (non-essentials), real estate, automobile, and others are negatively impacted.

He counselled businesses to focus more on goals and not necessarily processes, listen more to customers and respond quicker, change working style, study what competition is doing, improve internal

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communication and information sharing and change working conditions, stressing that if the effects of the pandemic hurts too badly, there might be need to wind down business entirely.

This edition of the Ecobank Webinar series is an initiative of Ecobank consumer banking segment, aimed at deepening conversation on the new normal for businesses and how individual can harness new opportunities in the face of COVID-19.

The virtual engagement attracted participation from amongst Ecobank Personal Banking customers comprising, individuals and business owners from different sectors of the economy and financial experts who joined across virtual platforms and social media handles. Ecobank’s unique and largest pan-African platform is designed to help unlock the opportunities of the continent and for the continent, through standardization, fuelling regional integration, trade and investment across borders. Due to its sterling performance, the bank has been severally recognized; As ‘Best Retail Bank in Africa 2019’ at African Banker Awards and also as Most Admired Financial Services Brand in Africa 2019 by Brand Africa 100”. @Businessdayng

similar jurisdictions.

FitchSolutions said Nigeria’s banking sector is set to grow over the medium and long term, with a slowing of growth in 2020, supported by new lending requirements which will help boost growth. However, “we expect high inflation and government borrowing to provide strong headwinds to growth over the medium term, the rating agency said”.

The firm continue to expect the changed minimum loan requirement to help drive client loan growth over the medium term. It revised its growth forecast from the previous quarter and expects client loans to reach N14.9 trillion in 2020 with growth of 2.5 percent from 2019.

Due to economic headwinds caused by the coronavirus pandemic, FitchSolutions revised its forecast for total banking asset growth to 5.3 percent to N44.2 trillion.

Over the medium term, the firm sees average annual asset growth of 12.0 percent to N63.8 trillion by 2024.

CIBN reschedules April diet examinations to October

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he Chartered Institute of Bankers of Nigeria (CIBN) has rescheduled its April diet examinations which were to take place from April 7 – 9, 2020 to hold along with the October diet examinations.

According to a statement signed by Nelson Olagundoye, head corporate communication and external relations the examination was rescheduled to ensure the safety of the students and other Stakeholders that would participate in it.

He also explained that, the decision to reschedule till October 2020, was in line with the uncertainty surrounding the full relaxation of the measures imposed by the Federal and State Governments to curb the spread of the novel Corona Virus pandemic.

The Institute regrets the inconvenience caused to the candidates who had registered for the April 2020 examinations and spent time preparing.

It would be recalled that the Institute on March 21, 2020 indefinitely postponed the examinations as a result of the pandemic which forced the Federal and State Governments to introduce stringent measures such as social / physical distancing protocol, limitation of gatherings to a maximum of 20 people and total lockdown of economic and social activities.

Thursday 02 July 2020

BUSINESS DAY

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Garden City Business Digest Niger Delta Basin Development Authority Women count losses in targets 10,000 jobs, N100m income per year Covid-19 survey • Inspects projects in Ogoni areas for post- Covid 19 economy Ignatius Chukwu

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ver 10,000 direct and indirect jobs with a gross income of about N100m would be targeted yearly by the Niger Delta Basin Development Authority (NDBDA). This is as the Authority said it is already planning for food security and job creation to cushion the harsh effects of the pandemic.

The Authority said it was working in line with the policy of President Mohammadu Buhari in the area of food security, job and wealth creation for the teeming population of the youths of the Niger Delta region and by extension the generality of Nigerians.

Disclosing this during a media tour of some of the ongoing projects of the Authority in Kpon community of Khana local government area of Rivers State, the project manager, Kobo Nekabari Marklin, said that at the completion of the massive farm projects going on in the area, thousands of jobs would be created and sufficient food provided for the region’s sustenance.

Marklin explained that fol-

lowing the acquisition of about 84 hectares of farmland with the cultivation of palm oil, hybrid citrus, hybrid dwarf mango, plantain and pawpaw plantations as well as poultry, fish ponds and other such agricultural products, he said the Authority was just on the path of becoming the food basket of the Niger Delta region.

The irrigation farm project in Kpon community, said to be the biggest in the Niger Delta, is a complete farm settlement with solar power station and residential quarters for staff. It also provides a ready market for both the local community and the outsiders for patron-

age.

Marklin explained that with sufficient funding and patronage, the Kpon irrigation farm would absorb over 10,000 direct and indirect labor and make an annual profit of over N100million. “That is besides the auxiliary benefits by the community people who see the project as their major source of livelihood.

“With adequate funding and patronage, we are very sure of creating thousands of jobs and making millions of naira in profit when the project operates in full capacity. We have massive projects going on here; the biggest farm project

in the Niger Delta region. We need more funds to inject into the project to meet up the President Buhari’s policy of food sufficiency and security for Nigerians.

“Between now and the end of the year 2020, some of these projects will begin to function maximally. Virtually, everything will be produced here.

We pray for good government policy and favorable economic environment. We plan to have palm oil mill, fish pond, we have poultry farm already and a lot more.

“We have ambitious plans for hybrid mango, pawpaw, plantain, palm tree and citrus plantations. When they are fully mature, obviously, we can feed the entire Niger Delta region and by extension Nigeria as a whole. The project is massive and the present management of the NDBDA is poised to achieve this objective within the shortest possible time”, he said.

Marklin also disclosed that the NDBDA would continue to devote every Friday sales to the people of Kpon community to create that sense of corporate social responsibility, said Tuesday sales would be for the general public.

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omen in Ahoada, Ahoada West LGA of Rivers State have said closure of markets as well as enforcement of other measures adopted by the government to contain the spread of Covid-19 in Rivers State subjected many families to immense hardship. Women were the worst hit by the impacts of the market closures which resulted to unprecedented hike in commodity prices and scarcity of goods, said the women.

The women spoke during a town hall meeting cum community sensitisation for Rivers West Senatorial District branch of Women In Governance Network (WIGN) organized recently at Ahoada in Ahoada West LGA by Centre For Environment, Human Rights and Development (CEHRD) in conjunction with the Embassy of the Netherlands in Nigeria.

The women lamented that people suffered greatly in the hands of government agents enforcing the Covid-19 containment measures. They said the way the measures were enforced by the governments at all levels made many to wonder whether the safety and survival of citizens were truly at the centre of the whole Covid-19 measures.

People were chased like lower animals in the bush,

goods were seized from market women and destroyed by task force operatives, while security agents embarked on extortionspree, extorting huge amounts of money from helpless traders whose survival was threatened by the closure of their sources of livelihoods. The women stated that fighting the pandemic ought to be a collective responsibility, but that unfortunately, citizens were excluded from the decisions of how to fight the pandemic, said the women.

Josiah Egbuilika, CEHRD Programme officer who facilitated the town hall meeting commended the women for their resilience, urging them not to be overwhelmed by the challenges thrown up by the Covid-19 pandemic.

He explained that the meeting was aimed at creating awareness on Covid19 and the preventive measures as rolled out by the government, mitigating issues that may affect women participation in politics due to Covid-19 and to arm women with tools to put them on front view in political participation amidst the pandemic.

He urged them to abide by the social distancing measures and constant washing of hands and sanitizing as specified by the government.

Govt officials as investment clogs in the Niger Delta?

Port Harcourt

by Boat

IGNATIUS CHUKWU

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group of journalists who went round to carry out a survey or special report on investment opportunities in the Niger Delta and what the various state governments were doing to attract investors said they found that the governments (or their officials) rather may be the real issue; they seem to be the clog blocking investments.

Members of the team that covered Cross River, Akwa Ibom, Rivers, Abia, and Imo states said they found that officials in Akwa Ibom rather saw their duty as that of blocking investments and inquiries. Each time they did that, they must be congratulating themselves for a job well performed.

The investment investigators said the greatest pain was in Uyo. After the aides had managed to send the team to the Commissioner for Trade and Industries to tell the world why an investor interested in the Niger Delta economy would prefer Akwa Ibom, the

commissioner rather sternly asked why the reporters were in the state in the first place in the face of lockdown. Brandishing Press ID cards did not impress him as he asked for exemption letters. When told that newsmen do not need it, he asked for their Covid-19 status report. When it was put to him that journalists needed only to apply full WHO protocol while at work, he asked for a letter specifically addressed to him and rejected the one presented to him. Case closed. Opportunity to speak for his state closed.

The team did not want to tell him that at the Akwa Ibom border, just like all others, people crossed freely despite the numerous checkpoints. They did not want to tell him that the governor of Edo freely visited his own governor and no exemption letter was brandished. It is when it comes to pressmen helping the masses that all screening starts. Sad. Any junior officer in any embassy or any Asian country who found such opportunity would hold the media men spellbound with fingertip facts and narrative about his country or state, even if he knew they were fake journalists. What harm was there in selling your state to fake journalists? Not in Nigeria. Even in the absence of any hint of fees, gratification, etc, just to speak and speak and market your state, no way.

At the Chamber of Commerce in Uyo, the young barrister that is the new DG played well and asked for time to file in the answers in three days. When the hour came, he said his president turned it down. Turn down an

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opportunity to state investment opportunities and what the OPS (organized private sector) needed the government to do to attract investors? The survey is expected to form an investment guide or intelligence to be made available around the world. These meant nothing to the celebrated bureaucrats.

At the end, it was an Igbo car dealer who grabbed the opportunity with both hands and reeled out what he knew as opportunities in Akwa Ibom and the investment environment, praising the state as investor-friendly. He spoke on good tax environment, roads, land certificates, etc. Imagine, even speaking on what he did not know while those who knew declined, claiming bureaucracy.

Mention must be made of two great characters: MD of the state’s property company (Patrick) and the Information Officer at the Investment Corporation, all private-sector driven. The lady at AKIPOC wasted no protocol to give what they had. She struck a professional cord when she said she needed no further approval to release what was already in the public domain. Great!

In Rivers State, the DG of the Port Harcourt City Chamber was said to have dazzled the team with compelling facts and deep insight into the investment landscape and milk of opportunities in the state sector by sector. He also gave areas of policy drawback and areas of great strides by the government. The team is yet to meet the government people.

In Umuahia, life is slow and dull. There is no work in some days, at all. Protocol is heavy, but most persons do not seem to know

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what investment opportunities mean. Target is Aba, to try. In Owerri, the revelation is a young information officer in the Ministry of Commerce and Industry, William Unadike, who oozed with knowledge and focus. His commissioner was off to Govt House but he tried very much to track him; exactly what information officers do. The commissioner is yet to be tapped, but hope is high, as long as Williams is there.

In same Owerri, the deputy president of the city chambers, the CEO of Shabron Group, showed tact and enthusiasm to move the economy of the state forward. He spoke and spoke. He welcomed ideas, offered partnership opportunities in great ideas. He represented hope for the future despite the myriad of challenges that Owerri faces.

Bottom line: The government could be the real problem, not opportunities, not capital, not anything. Those placed in position to see, say and stand for the state often do exactly the opposite. The team members said the first report they would likely submit is need for re-orientation and re-examination of the mindset of those in the economic frontline in the Niger Delta states. They ward off opportunities, not attract them. They horde commonplace information that often is available at trade fairs and investment summits. These they call classified information. Only God knows what investors suffer in their hands and how long it takes for documentation to be made available to business men. After, they will say all businesses and fiscal roads lead to Lagos.

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Thursday 02 July 2020

BUSINESS DAY

ENERGYREPORT Oil & Gas

Power

Renewables

Environment

Shell to write down up to $22bn as virus hits big oil olusola Bello

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oyal Dutch Shell Plc w ill wr ite down between $15 billion and $22 billion in the second quarter, giving investors a wider glimpse of just how severely the coronavirus crisis has hit Big Oil. In the second quarter 2020, Shell has revised its mid and long-term price and refining margin outlook reflecting the expected effects of the COVID-19 pandemic and related macroeconomic as well as energy market demand and supply fundamentals. This has resulted in the review of a significant portion of Shell’s Upstream, Integrated Gas and Refining tangible and intangible assets.

The Refining asset valuation updates reflect Shell’s strategy to reshape and focus its refining portfolio to support the decarbonization of its energy product mix, leveraging assets and value chains in key markets.

The Upstream and Integrated Gas asset valuation

L-R: Pius-Milverton Ogunjiofor, manager, Upstream and Commercial Negotiation, Nigeria Agip Oil Company Limited; Bart Nnaji, chairman/chief executive officer, Geometric Power; Morgan Okwoche, managing director/chief executive officer, Gas Aggregation Company Nigeria Limited; Yemi Famori, general manager, Gas Portfolio, The Shell Petroleum Development Company of Nigeria Limited (SPDC), and Bashir Bello, SPDC’s general manager, Business and Government Relations, at the signing of the Gas Supply and Aggregation Agreement for the Aba Integrated Power Project in 2018.

updates, including of related exploration and evaluation assets, are largely driven by the change in long-term prices with some impacts due to a changed view on the development attractiveness.

A revision in the decommissioning and restoration provision discount rate assump-

tion from 3 percent to 1.75 percent, reflecting a lower interest rate environment, has impacted the asset values tested for impairment.

The following price and margin outlook have been assumed for impairment testing: Brent : $35/bbl (2020),

DPR says it would avoid past mistakes in marginal bid round exercise olusola Bello

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he Department of Petroleum Resources (DPR) says there will not be a repeat of past mistakes made in previous exercises in the on going bid rounds for 57 marginal oilfields in the country.

Auwalu Sarki, Director, DPR, gave the assurance on Monday while delivering a keynote address at the Africa Marginal Oilfield and Independent Producers Webinar Conference.

A marginal field is any field that has reser ves booked and reported annually to the DPR and has remained undeveloped for a period of over 10 years.

Sarki said the last bid round conducted in 2003 was fraught with litigations and other challenges which hampered the development of some of the awarded 24 marginal oilfields to the detriment of the nation.

According to Marine and Petroleum .com, the DPR boss said he was optimistic that the current exercise Olusola Bello, Team lead,

which was at the evaluation stage, would not encounter similar issues because of the robust and credible processes put in place by the government.

The DPR boss said: “We have learnt from mistakes made in the past and have come up with workable solutions to ensure that the objective of the development of our marginal fields is achieved.

“This time around, our awardees will be credible investors with technical and financial capability.

“There is also the PostGeneral Award Conditions.

This deals with transfer of interest post award. It means awardees cannot transfer more than 49 per cent interest to another party postaward.

“It also include termination of rights of interest holder which gives the minister power to withdraw the interest of a party who fails to meet its obligations in terms of joint awardees.”

Sarki further said the conditions protected the interest of all investors, saying that any disagreement arising

Graphics: Joel Samson.

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ognition of impairments in the second quarter are uncertain and assessments are currently on going The revised outlook for commodity prices and refining margins could impact overall deferred tax positions, which will be reviewed after the finalisation of the operating plan later in 2020 Gearing is expected to increase by up to 3percent due to the impairments. Additional impacts to reported gearing levels are expected due to pensions revaluations associated with the current interest rate environment along with other usual quarterly movements As per previous disclosures, CFFO price sensitivity at Shell Group level is still estimated to be $6 billion per annum for each $10 per barrel Brent price movement Note that this price sensitivity is indicative, is most applicable to smaller price changes than those in the current environment and in relation to the full-year results. This excludes shortterm impacts from working capital movements and costof-sales adjustments.

NCDMB inaugurates new sectorial groups olusola Bello

among awardees and their partners post-award would first be referred to the Nigerian Oil and Gas Alternative Dispute Resolution Centre in DPR. He noted that this would reduce the years spent in courts over disputes which usually led to non-performance of the marginal fields, saying that such awards would henceforth be withdrawn by the government.

“We believe that these steps will bring about a sustainable development of our marginal fields,” the director said.

He added that the objective of the 2020 marginal field bid round was to deepen the participation of indigenous companies in the upstream segment and provide opportunities for technical and financial partnerships for investors.

According to him, the existing 16 marginal oilfields contribute two per cent to the national gas reserves and their operations have brought peace and development to host communities in the Niger Delta.

$40/bbl (2021), $50/bbl (2022), $60/bbl (2023) and long-term $60 (real terms 2020) Henry Hub: $1.75/MMBtu (2020), $2.5/MMBtu (2021 and 2022), 2.75/MMBtu (2023) and long-term $3.0/ MMBtu (real terms 2020) Average long-term refin-

ing margins revised downwards by around 30ercent from previous mid cycle downstream assumption Based on these reviews, aggregate post-tax impairment charges in the range of $15 to $22 billion are expected in the second quarter.

Impairment charges are reported as identified items and no cash impact is expected in the second quarter.

Indicative breakdown per segment is as follows: Integrated Gas $8 – $9 billion, primarily in Australia including a partial impairment of the QGC and Prelude asset values Upstream $4 – $6 billion, largely in Brazil and North America Shales Oil Products $3 – $7 billion across the refining portfolio These impairments are expected to have a pre-tax impact in the range of $20 to $27 billion. The Goodwill intangible assets were assessed and no impairment charge on Goodwill is expected to be recorded in the second quarter Impairment calculations are being progressed: the range and timing of the rec-

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he Nigerian Content Development and Monitoring Board (NCDMB) has held a virtual engagement of the Nigerian Content Consultative Forum (NCCF), a body set up by the Nigerian Oil and Gas Industry Content Development (NOGICD) Act to facilitate collaboration of stakeholders and development of ideas for the advancement of Nigerian Content in the Oil and Gas Industry.

Key highlights of the meeting was the inauguration of two new NCCF Sectorial Working Groups by the Executive Secretary of NCDMB, Simbi Kesiye Wabote.

The two new groups are the Gas Value Chain SWG and the Diversity SWG, bringing the number of NCCF sectorial groups to twelve.

Giving reasons for the inauguration of the Gas Value Chain Group, the Executive Secretary stated that the Board believes that the future of fossil fuels is in maximizing gas development and utilization.

He noted that Nigeria has

about 203 trillion cubic feet (TCF) of gas reserves and recalled that the Honourable Minister of State for Petroleum Resources, Timipre Sylva had at the beginning of the year declared 2020 as the Year of Gas. He further disclosed that the country is developing various projects to promote commercialization and utilization of gas and the Board is supporting the Minister’s vision in areas of LPG penetration by investing in RUNGAS to promote local production of gas cylinders in Polaku, Bayelsa State.

“There is a very hard drive within the Ministry of Petroleum Resources for LPG penetration in the country.

We at NCDMB is also partnering and encouraging the establishment of LPG depot in Nigeria because of the opportunities we see. Most of these projects are in motion and actively supported by the ministry”.

The Executive Secretary also mentioned that the creation of the diversity SWG was a product from the Women in Oil & Gas workshop organized by the Board in October 2019. He hinted that the aim of the

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Diversity SWG is to improve the participation of women in the industry as well as to promote an all inclusive gender policies.

He reiterated that by mainstreaming women in the oil and gas industry the sector engender greater growth of the economy. In his words, Wabote said: ”I am convinced that if we mainstream women in the oil and gas industry, we are going to achieve a lot.”

Wabote announced that a portion of the Nigerian Content Intervention Fund (NCIF) domiciled with the Bank of Industry will set aside to support women operating in the Oil & Gas industry.

Stressing that section 57 and 58 of the NOGICD Act 2010 supported the creation of a robust platform for sharing information and to serve as ‘think-tank’ to develop policies and implement frameworks that will achieve sustainable development of the Nigerian content in oil sector, Wabote charged the members of the two sectorial groups to be proactive and develop recommendations that the Board can implement.

Thursday 02 July 2020

BUSINESS DAY

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BUSINESS TRAVEL FG to announce palliatives for aviation industry next week Stories by IFEOMA OKEKE

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inister of Av i a t i o n , Hadi Sirika has said palliatives to the aviation industry will be announced as soon as next week as the sector inches towards restart.

He made this known at a Press briefing held with the presidential task force on covid-19 after a test flight from Abuja to Lagos to ensure everything is in place for the restart.

Speaking on the restart, Aviation Minister, Hadi Sirika said aviation was ready to go.

“Ninety percent of what we do in civil aviation is not seen by people like the Very High Frequency Omnidirectional Range ( VOR) and other safety systems put in place but aviation is ready, I don’t want to give a timeline but when we are set to open, we open.

On palliatives, the minister said in conjunction with the Central Bank of Nigeria and the Ministry

of Finance the amount for the palliative will be announced soon.

“Government is coming with the palliative very soon in conjunction with the CBN and the Ministry of Finance, by next week we will come out with the amount and palliative will be announced within the week. Within the economic sustainability plan, it will go round the entire civil aviation but may not be necessarily structured like people expect.”

Meanwhile, Presidential Task Force on COVID-19 has expressed satisfaction with the handling of the test flight from Abuja ahead of the restart plan of the aviation industry stating that the industry is ready but will not give a timeline or date for restart Sani Aliyu, the coordinator PTF COVID-19, who gave his assessment when he arrived with the Minister of Aviation, Hadi Sirika on an aero contractors flight from Abuja after undergoing the same process at the Nnamdi Azikiwe Airport.

He said,” Aviation is a

Hadi Sirika, minister of aviation

highly regulated sector and this is the new normal. Things have changed and things have changed because we have a disease killing people.

“The aviation industry industry has shown what they have done as an industry and

now it is left to Nigerians to do what they need to be safe.

“While aviation has done tremendously well, what will protect you is yourself and we equally will make sure Nigerians can be safe when they fly.

However, Air Peace, in a

show of strength and readiness to resume operations, littered the Nigerian airspace with several of its fleets of aircraft in shakedown flights.

It should be recalled that the airline has a mixed fleet of 25 aircraft which includes three wide body aircraft, the Boeing 777s.

All the aircraft took to the skies flying to Abuja, Port Harcourt and back to Lagos without passengers These flights were aimed at ensuring that the aircraft are in tip-top condition, having been grounded for close to three months though they have been under very strict storage maintenance.

Stanley Olisa, the Spokesperson of the airline, who revealed this in a statement to journalists, said the shakedown flights are part of the measures the airline has developed to guarantee the safety of both passengers and crew when operations resume.

He noted that the aircraft have been in storage mode for a couple of months and extensive maintenance

checks have been carried out to keep them up to the required standards.

According to Olisa: “Within this period of flight ban, we have ramped up technical maintenance of all our aircraft, scaled up cabin refresh and carried out thorough disinfection to ensure they remain fit for the skies when the authorities flag off operations”. He added that the aircraft are now being brought out of storage and the pilots have been testing them, stressing that all pilots and flight attendants have been retrained in line with NCAA directives.

On the airline’s readiness to resume regular flights, he stated: “As you know, we have been operating ‘special flights’ to local and international destinations, and we have more of such flights in the works. This accentuates our preparedness for operation restart as our pilots, cabin crew and engineers have been hands-on and are very current. So, we are hundred percent ready to resume”.

How Dubai as a destination is beefing up efforts in fight against COVID-19

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oronavirus disease 2019 (COVID-19) caused by Severe Acute Respiratory Syndrome Coronavirus 2 (SARS-CoV-2) proven to have surfaced in central China and began spreading globally was declared a pandemic by The World Health Organization (WHO) on 11 March 2020.

It will therefore not be farfetched to state that Covid-19 was global before it was declared a pandemic.

With lockdowns, social distancing, wearing of face masks & protective gears, curfews and worldwide panics, the world is changing in front of our eyes. In essence, the “old world” is vanishing and a “new world” is currently passing through birthing stages.

As the world moves in an entirely new direction, the government of Dubai has taken great proactive steps in protecting its citizens and tactically reopening the economy. Dubai, one of the seven Emirates of the United Arab Emirates, is a center for regional and international trade in the areas of Tourism, Trade, Aviation, Real Estate and Financial services.

As of 17 June, over 3 million people have been tested since the outbreak of COV-

ID-19. In April, Dubai already launched a mobile testing service to carry out free coronavirus screening at home for the elderly and most vulnerable, after slightly easing strict confinement measures. The “Mobile Laboratory Units” are converted ambulances fitted with auto-sterilization equipment, thermal scanners and safe storage cabins for samples. They play a key role in reducing pressure on hospitals amidst the COVID-19 crisis and help protect people at high risk. A large number

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of health care workers have been deployed to screening centers and there were 14 drive-through testing facilities available.

The government of the UAE has been extremely proactive in implementing many preventative measures in order to contain the spread of the virus. So much so, the UAE ranks number 11 regarding the safest countries in the world for COVID-19, according to Forbes magazine announced on 5 June 2020.

The Global Mega Event

EXPO2020 will now run from 1 October 2021 to 31 March 2022. A delay that will allow all participants to safely navigate the impact of COVID-19, and will also allow the World Expo to focus on a collective desire for new thinking and identify solutions to some of the greatest challenges of our time.

Selected scheduled passenger flights resumed from 21 May 2020 and tentative plans are in motion to recommence regular flights in July as demand for international travel returns, pending the

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lifting of travel restrictions not just in the UAE, but also in other countries.

Authorities are preparing for a full reopening of UAE’s borders, subject to the removal of travel restrictions by implementing a series of strategic measures in conjunction with federal counterparts designed to ensure the virus does not enter the emirate through its sea and land ports.

To safeguard and sustain the Aviation industry, Dubai Tourism is working with all relevant bilateral organizations to have a coordinated approach to the gradual reopening of businesses as well as with Emirates, flydubai, other partners and relevant authorities to support the planned reopening of routes.

The Dubai Health Authority conducts regular screening and tests of all passengers coming into the city through all its terminals and special health and safety protocols are in place at the airport. At Dubai International airport, gloves and masks are mandatory for all customers and employees.

Thermal scanners monitor the temperature of all passengers and employees stepping into the airport. Physical distancing indicators have @Businessdayng

been placed on the ground and waiting areas help travelers to maintain the necessary distance during check-in and boarding. The airport team has also installed protective barriers at each check-in desk to provide additional safety reassurance to passengers and employees during interaction over the counter.

All Emirates aircrafts undergo enhanced cleaning and disinfection processes in Dubai after each journey.

On board Emirates’ flights, seats are pre-allocated (online check-in is not available) with vacant seats placed between individual passengers or family groups in observance of physical distancing protocols.

Emirates has also modified its inflight services for health and safety reasons.

Food and beverages continue to be offered in the form of bento-styled boxes to reduce contact between the crew and customers during meal service, and minimize risk of interaction.

The personal boxes provide customers with sandwiches, beverages, snacks and desserts. In addition, every customer will receive an Emirates hygiene travel kit containing a mask, gloves, wipes, and sanitizer.

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Tuesday 02 July 2020

BUSINESS DAY

INTERVIEW Diversification of Nigerian economy: Let our policy makers walk the talk - Adefeko The nation’s agricultural sector has a major role to play in the diversification of the Nigerian economy. This is because a sizable amount of the nation’s non-oil exports are primary products. Therefore, what does the nation need to do to gain optimally from the nation’s agricultural sector? ADE ADEFEKO, one of the leading players in the sector, makes some vital suggestions in an interview monitored by TELIAT SULE and other journalists. Excerpts:

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lease, can you introduce yourself to our readers.

I am Chairman Agricultural Trade Group at the Nigerian Association Of Chamber Of Commerce Industry Mines And Agriculture (NACCIMA) and equally participate in several Organized Public Sector Fora to highlight the impact of policies on the non-oil export sector and drum up support for value addition to Agro-allied products.

NACCIMA is a key stakeholder in the EEG Inter-ministerial committee What is the impact of COVID-19 pandemic on Nigeria’s economy?

COVID-19 pandemic is having a devastating effect on the economy of the country. The economy is just emerging from the impact of three months of total inactivity.

With the situation of things, IMF has projected that the Nigerian economy which had barely recovered from a slowdown since 2016, will contract by 3.4% in 2020. To the sceptics this may even be an optimistic prediction in view of the prevailing global crisis. According to NBS, Nigeria’s GDP in Q1 2020 sank by (-14.27%) against 5.59% growth in Q-4 2019. Although the pandemic had caused a global economic lockdown, the situation in Nigeria seems to be peculiar because of over overdependence on crude oil exports.

The devastating effect of COVID-19 on the economies of India (Nigeria’s No.1 buyer of crude oil by far), EU and North America will have a lasting impact on Nigeria’s export earnings in 2020.

What are the avenues for diversification of Nigeria’s economy?

Although the current administration has stepped up the diversification of the country’s economy, it needs to be emphasized that it is the only way out. Agriculture and the manufacturing sector are the two pillars of the non-oil economy contributing about 22 % and 13% to GDP. The constraints facing these two sectors need to be removed to unlock their potential.

In particular, non-oil exports accounted for only about 6% of exports in 2018. We need to exploit the potential of non-oil exports consisting of mainly semiprocessed and processed agroallied products. In recent years, Nigeria had started exporting to many non-traditional markets such as Viet Nam, Brazil, China, India and Japan. Sesame has been a success story where Nigeria recorded spectacular growth … Alas, Nigeria non-oil exporters face a lot of constraints.

What are the major constraints facing the non-oil

was never disbursed. In fact, the meagre budget of N 200 million for 2020 came as a rude shock and makes a complete mockery of the policy. The table below illustrates the problem the exporters face.

Market access Nigerian exporters face a tariff disadvantage up to 10% in the EU market as Most favored nation (MFN) duties are applied whereas our competitors such as Ghana, Cote d’Ivoire and Kenya enjoy duty free access as they have signed an EPA with the EU. This makes our products such as cocoa, leather and textile fibers and yarn uncompetitive.

Ade Adefeko

export sector?

The challenges facing the non-oil exporters can be categorized into general and specific. The former consists of infrastructural constraints and high cost of doing business which affect all sectors in Nigeria and are well known. Ultimately, these translate into high cost of production and make our products uncompetitive. I wish to however dwell on five specific bottlenecks facing the non-oil sector.

Logistics The World Bank Doing Survey 2020 placed Nigeria at 131 among 190 countries, with a score of 56.9 with Kenya having marched ahead to 56th place with a score of 73.2.

A particular disadvantage faced

by Nigeria is the high cost of trading across borders – a parameter on which Nigeria was ranked 182 among 190 countries. The cost of import of a container at Nigerian ports was estimated at US$ 1640 whereas for exports it was estimated at US$ 645. The comparative cost at Ghanaian ports were 60% and 40% lower and the turn round time at their ports faster.

Incentives Most developing countries support their export-oriented industries with fiscal and other incentives. China, which is the world’s largest exporter with merchandise exports in 2018 at US$ 2.5 trillion gives an export tax rebate of up to 17% to neutralize the incidence of indirect taxes and levies on its exports. India, likewise, with merchandise exports of US$ 326 bn offers a package of incentives, especially to its labour intensive industries such as textiles & garments as well as leather & footwear.

In Nigeria, incentives are needed to cushion the effect of infrastructural and other costdisadvantages. The challenge we are facing currently in the non-oil exports sector is the nonwww.businessday.ng

implementation of the laid down policies by government agencies.

Let’s assess the Export Expansion Grant policy that was introduced as an Act in 1986 and for which revised policy guidelines were issued in 2017.

Promissory Notes The present administration expressed commitment to honour the debts owed to various sectors and announced the Promissory Notes programme to redeem the backlog of EEG claims for the period 2017-16.The PICA(Presidential

Sectoral impact My biggest concern is that our policy makers do not appreciate the economic impact of the non-oil export sector. I am sure, if the impact on millions of rural livelihoods, value addition, forex earnings and diversification is well understood, the sector will get the deserved attention.

What does AfCFTA mean for Nigeria?

I believe in liberalization but also in compliance with rules.

African Continental Free Trade Area (AfCFTA) can be a great opportunity for Nigeria to access the regional and continental market of 1.2 billion people. But this will be a function of our competitive-

Source: Federal Ministry of Industry, Trade & Investment

Initiative on Continuous Audit) under the aegis of the Federal Ministry of Finance, verified outstanding claims amounting to about 350 billion Naira and factory visits were made in May 2018. Of this, claims of N 195 billion were ratified by the National Assembly. As per procedure, the ratified claims were subjected to another audit by KPMG and a partial amount was disbursed through a “reverse auction” system executed by the DMO in 2019. However, the remaining promissory notes are still awaiting disbursement, 18 months after NASS approval and a lengthy due process. Justice delayed is justice denied, goes the old saying. In China, it takes one week to redeem the exporters’ export tax rebate.

EEG Budget The new policy calls for an allocation to be made each year in the Appropriation Bill to provide for EEG. This has not been implemented effectively. First, the amount budgeted is grossly inadequate to cover total exports, and secondly, whatever was budgeted

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ness. Therefore, opportunity and risk are two sides of the same coin.

What is the impact of incentives on non-oil exports?

Well, this is important to understand. I wish to dwell on 3 big impact areas.

Growth of exports The EEG scheme was introduced in 1986 however its real impact was felt only in the last decade when, as per CBN records, non-oil exports amounted to 3.1 billion USD in 2011. In the following years, the decline started due to erratic policy implementation.

However, since the announcement of new policy guidelines by Nigerian Export Promotion Council (NEPC)in 2017, exports picked up again. According to CBN data, non-oil exports doubled from N 675 million in 2016 to N1.367bn in 2018.

Employment generation and boost to rural income The non-oil export value chains @Businessdayng

in Nigeria employ over 10 million people, most of them in rural areas. The sector also fosters gender equality as a lot of women are employed in the harvesting and processing of exportable agricultural produce. Sesame is a shining example. Thanks to the EEG policy, the output quadrupled from 137,000 MT to 399,000 MT between 2007-18(CBN) As 22% of our GDP comes from agriculture, putting more money in the hands of farmers creates a trickle-down effect.

Transparency The present government must be commended for its commitment to due process and transparency in policy. The EEG scheme has helped to formalize the export channels as goods undergo preshipment inspection by agencies appointed by the government.

Moreover, the forex proceeds are repatriated through banks and verified by CBN. Everything is documented and even the names of Top 100 exporters are published in the CBN’s annual report. This is a case study for industry best practices.

What kind of stimulus would spur the Nigerian economy, particularly the non-oil sector?

It is imperative for the government to intervene and save the economy from a total collapse caused by this pandemic. Governments all over the world have come up with relief packages to balance the lives and livelihoods. However, it does not have to be grandiose plans; simple, practical things can help.

Look at China’s example. Their Trade ministry reduced the processing time of export tax rebate from 10 days to one week to ease the working capital funding. No wonder, China is the No.1 exporter in the world.

So, could you list your key recommendations where you want the policy makers’ intervention?

Indeed, let me clarify that we are not asking for anything new or unreasonable. In fact, our wish list is straightforward. Our plea to the Government via the Trade and Finance ministries is to sincerely implement extant policies and make good their commitments.

This means a) the issuance of the outstanding Promissory Notes b) Disbursement of Export Credit Certificates for approved budget till 2020 and c) Provision of adequate budget and finally, half-yearly meetings of the Inter-ministerial committee on EEG to assess impact. In one word, we are only asking our policy makers to walk the talk and be ACCOUNTABLE. Thank You.

Thursday 02 July 2020

BUSINESS DAY

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BUSINESS DAY

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Thursday 02 July 2020

BUSINESS DAY

news FG increases petrol price to N140/litre as Brent stabilises at $42/barrel DIPO OLADEHINDE & Harrison Edeh

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etroleum Products Pricing Regulatory Agency (PPPRA) has announced a new pump price band of N140.80 and N143.80 per litre for petrol as Brent, the oil against which Nigeria’s crude is priced, settled around $42.

In a statement on Wednesday, the PPPRA’s executive secretary, Abdulkadir Saidu, reveals that the Guiding price comes into effect from July 1, and is expected to apply at all retail outlets nationwide for the month.

“After a review of the prevailing market fundamentals in the month of June and considering Marketers realistic operating costs as much as practicable, we wish to advise a new PMS pump price band of N140.80- N143.80/ litre, for the month of July 2020,” Saidu states in a circular to fuel marketers dated July 1, 2020.

The adjustment, BusinessDay learns, is in line with the Federal Government’s approval for a monthly review of Premium Motor Spirit (PMS) pump price.

The PPPRA’s boss notes that

the ex-depot for collection includes the statutory charges of Bridging Fund, Marine Transport Average, National Transport Allowance (NTA) and the administrative charge.

The increase in PMS comes after Brent futures stood at $41.15 a barrel in London on Wednesday, having more than doubled since late April as a result of Organisation of Petroleum Exporting Countries (OPEC’s) intervention and a revival in demand.

The Federal Government, in March, announced that the retail price of petrol would be adjusted monthly to reflect realities in the global crude oil market.

The pump price was fixed at N125 per litre in March and was reviewed downwards in April to N123.50. In May, only the exdepot price was reviewed downwards to N108 and the retail price was adjusted to N121.50 in June.

Since the introduction of the regime, marketers had expressed concerns over the issuing of monthly guiding prices for petrol.

Responding to this last week,

Saidu argued that different sectors of the economy operate under the guidance of national regulators.

He said, “The Central Bank of Nigeria regulates the banks and other financial sector operators; the Nigerian Communications Commission regulates telecommunications and the same exists for operators in Nigeria’s downstream petroleum sector.

Saidu noted that while the market-based pricing regime was a policy introduced to free the market of all encumbrances to investment and growth, it should not be misconstrued to mean a total abdication of government’s responsibility to the sector and citizenry.

Over the years, international firms have pulled out of Nigeria’s downstream sector as government control crimps margins and takes away the shine from a once buoyant industry.

It costs about N200 million to build a new petrol station, but the margins are no longer enough to sustain the sector with many dealers going burst or facing massive debt pile.

Why small modular nuclear reactors adoption will tackle perennial power shortage KELECHI EWUZIE

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erennial power shortage that plagues Nigeria and most African nations have given rise to the call for the use of Small Modular nuclear Reactors (SMR) to rescue the continent’s economy from collapse.

Rosatom, Russia’s state run nuclear energy corporation, says adoption of Small Modular Reactors can be a good alternative to diesel generators, providing reliable power supply and preventing harmful emissions at a competitive price.

Ry a n C o l l y e r, a c t i n g CEO, Rosatom, Central and Southern Africa, observes

that there is a global shift toward nuclear, not only in the energy sector but also to address a myriad of other issues.

Collyer opines that SMRs offer unique benefits such as easy grid connection, flexibility in terms of placement, multipurpose application and possible integration with renewables.

In a statement made available to BusinessDay, Collyer states that SMRs also offer lower capital investment, which can be crucial point while taking a decision of their deployment.

Shedding light on ROSATOM’s advancements in SMR technology, he highlights Russia’s RITM-200, an advanced pressurised-water reactor that incorporates

all the best features from its predecessors.

Collyer highlights the main advantages of RITM200 reactor to include: costefficiency, small size and safety. Russia’s RITM-200 reactor, he notes, was designed for nuclear icebreakers, land-based small Nuclear Power Plants and floating nuclear power plants.

According to Collyer, R O S AT O M h a s a l r e a d y constructed six RITM-200 nuclear powered reactors with two on board Russia’s nuclear powered Arktika icebreaker.

Collyer further discloses Russia was working on the next generation of the offshore nuclear power plants as an optimised floating power unit (OFPU).

Customs Strike Force recovers N1.1bn revenue in six month amid Covid-19 AMAKA ANAGOR-EWUZIE

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he Strike Force unit, Zone ‘A’ of the Nigeria Customs Service (NCS), says it has recovered for the Federal Government over N1.104 billion in the last six months of this year.

The sum, according to the unit, was recovered from Debit Notes (DN) raised from importers of cargo, who tried to short change the government by paying less import duties to Customs commands at the nation’s seaports.

Abba Kakudi, coordinator of the Strike Force, who made this known in a statement sent to newsmen, said the unit recovered the revenue from seizures made between January 1 and June 11, 2020, despite the outbreak of COVID-19 pandemic

that affected movement of goods.

According to Kakudi, the Strike Force team has given a hard chase to smugglers who were desperate to unleash economic dislocation on the country, and this has enabled the team to make tremendous seizures in the period under consideration.

“Our seizures include; 1000 bags of 50kg foreign parboiled rice with the Duty Paid Value (DPV) of N13.252 million, 10 Tokunbo vehicles with DPV of N31.184 million and 30 bales of second hand clothing with DPV of N2.160 million. It is important to say that in order to help the economy grow, there is no need to import what we can produce here in Nigeria or bringing in prohibited items,” Kakudi said, while giving details of the seizures.

He further stated that the Fedwww.businessday.ng

eral Government had encouraged a lot of rice farmers in the country, and local rice was now being produced in large quantity. He however advised traders to avail themselves of the opportunity to market indigenous products in such a way that it would help to grow the economy.

“In a bid to police the smugglers from bringing in these prohibited products, our officers face a lot of dangers as most of the smugglers are armed, sometimes not necessarily with rifles but matches, charms and other dangerous weapons, but we are not overwhelmed. This ugly situation is experienced more around the creeks where inhabitants mobilise some under-aged people against us, to the extent of calling our officers names as well as stoning them,” he said. https://www.facebook.com/businessdayng

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Thursday 02 July 2020

news

Analysts see downside risk for cement players in 2020 BALA AUGIE

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nalysts have warned that investors’ optimism about the cement industry could remain damped for a while as the wrought caused by the coronavirus pandemic paralysed construction activities across Nigeria.

United Capital Research Limited in a latest report titled “Up In The Air” notes that 2020 could be difficult for operators in the industry, as lockdown policy disrupted the supply chain.

The research house says while the unrelenting effort of the Federal Government toward infrastructural development in the country appears like a plus for the industry, history has shown that the percentage of implementation of capital expenditure in Nigeria averages c52.7 percent in the last 7 years.

Over the a decade ago, investors were optimistic that the country’s middle class and huge

infrastructure deficit would spur cement demand and add impetus to companies’ earnings.

However, a protracted economic downturn since 2017 - a year after the country exited its first recession in 25 years - has cast a pall over the future of the industry The cement industry has always felt the pang of an economic downturn over the past few years, owing to reduced fiscal spending on capital projects as well as reduced private investments in capital formation due to feeble macro conditions.

In 2016, when the economy went into a recession, the construction sector declined by 5.9 percent compared to the growth of 4.4 percent recorded in 2015.

As a result of the devastating impact of the coronavirus pandemic on the economy, the federal government has slashed capital expenditure spending by 15 percent in the 2020 budget, a whammy for an industry

growing at a slow pace.

Despite a myriad of challenges, the three major players in the industry-Dangote Cement, BUA Cement, and Lafarge Africa- saw combined revenue and profit increased by 7.48 percent and 7.45 percent to N366.84 billion and N82.58 billion as at March 2020 respectively, largely driven double digit growth at the top line by BUA Cement and Lafarge Africa.

However, profit margins have been deteriorating, as companies have been unable to translate top line (sales) impressive performance into bottom line growth.

“Tough times ahead for them because there were minimal construction activities in the first quarter, the will see more rains in the third quarter, but activities will gradually recover in the fourth quarter,” says Johnson Chukwu, managing director/ CEO of Cowry Asset Management Limited.

Saudi Prince discusses production cut deal with Buhari amid OPEC’s push for oil cuts OLUSOLA BELLO & DIPO OLADEHINDE

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audi Arabia’s crown Prince Mohammed has held discussion with Nigeria’s President Muhammadu Buhari in a bid to ensure strict adherence to Organisation of Petroleum Exporting Countries’ (OPEC) and allies production cut deal aimed at boasting crude oil prices.

Nigeria, along with Iraq, has been lagging in compliance with the production quotas set by OPEC+ in April, aiming to shave off some 9.7 million bpd in oil supply until the end of July.

In fact, Iraq and Nigeria, especially Africa’s biggest oil-producing country, were so bad at compliance that Saudi Arabia’s Energy Minister had to put his foot down at the last OPEC+ meeting and demand from them that they start cutting production more deeply to improve their compliance rates.

According to state-run Saudi Press Agency, Saudi Crown Prince Mohammed bin Salman and Nigeria’s President Buhari discussed “ways of cooperation to enhance the stability” of the market during

a phone call on Monday.

Iraq and Nigeria’s non-compliance with the record OPEC+ cuts in May nearly wrecked the June meeting of the pact, ahead of which the two leaders of the group, Saudi Arabia and Russia had insisted that there would be an extension by one month to the current level of cuts only if laggards in compliance ensured over-compliance going forward to compensate for flouting their quotas so far.

Iraq and Nigeria had little choice but to agree and undertook to deepen their production cuts not just in July but also in August and September, to compensate for their under compliance in May when the deep cuts began.

For now, the agreement is to cut a total of 9.7 million bpd until the end of July. According to Russia’s Energy Minister, a further extension of the deep cuts would not be needed as the market will have begun to rebalance by the end of July.

Overall implementation of the OPEC+ accord has been robust, standing at 87 percent last month, and crude prices have strengthened in consequence.

Brent futures was at $41.15 a

barrel in London on Wednesday, having more than doubled since late April as a result of OPEC’s intervention and a revival in demand.

Nigerian National Petroleum Corporation’s (NNPC) group managing director, Mele Kyari, promised on June 12 that Nigeria would commence production cuts in June and would achieve full compliance

by July.

Exports show Nigeria is pumping 1.38 million barrels per day; however, Nigeria’s quota to meet its production cut is 1.37 million barrels per day. It contends that some grades are a type of light oil known as condensate, rather than crude, and thus aren’t subject to OPEC targets.

Nigeria has ignored calls for OPEC production cuts in the past as the country enters an economic recession that may be its worst in 40 years, caused by weak global demand for its number one export, crude oil.

IMF expects the Nigerians economy to decline by 5.4% in 2020, the World Bank forecasts 4.9 million Nigerians at risk of falling into poverty this year due to the falling economy.

COVID-19: Crowd-farming platforms count losses as hospitality sector remains shut down Josephine Okojie

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rowd-farming platforms in Nigeria are counting huge revenue losses as the COVID-19 outbreak erases the demand for fish, chicken and eggs, among others, owing to the continuous shutdown of hotels, event centres, bars, and clubbing joints.

Ayoola Oluga, managing director, Agrecourse Limited - a crowd-farming platform, says the outbreak of the COVID-19 pandemic has raised another set of problems for farmers in the country.

“Some farmers have continued to find it difficult to sell their products, especially fish farmers. This is mainly due to the shutdown of the hospitality sector, where you find the major off-takers,” Oluga says, noting, “As a result, we are experiencing low patronage.”

Similarly, Taofeek Badmus, general manager of Tuns Farms, Osogbo, Osun State, notes that apart from the inability to sell products because most offtakers are off business, the cost of feeds for the poultry is too costly, making production and sustainability difficulty.

“The closure of hotels, event centres and functions has also affected sales of (farm) products with many of us having large stocks of finished products,” Badmus says, saying, “Our experience was particularly painful during the lockdown as we kept on feeding birds and there was no market to sell them.”

He states that sales have drastically reduced, stressing that some farmers are

even experience glut, which is forcing them to sell at lower prices.

Rotimi Olibale Oloye, national president, Catfish and Allied Fish Farmers Association of Nigeria ( C A F FA N ) , s t at e s, “Ou r p ro d u c t i s m o s t l y u s e d for social events, thus the lockdown has very serious n e gat i v e e f f e c t s o n o u r business.

“That is why it is essential for the government to work out support for us because most of us are already out of jobs as our entire capital had gone to continuous loss of the past three months as the few sales made were a total loss.”

Also, Ayodele Alabi, chief operating officer, Agro Park, says as a result of the restrictions across the country, a good number of the off-taker partners had either reduced or shut down operations.

He says his business is diversifying into grain cultivation and signing off-takers agreement with partners, noting, “Because we understand that post-COVID-19, the demand for food will rise, and we are strategically positioning to take a huge market share.”

Ayo Arikawe, chief technology officer, ThriveAgric, another crowd-farming platform for agro-allied investments, explains that chickens from their farms are mostly sold to processors, who, in turn, sell to restaurants and hotels.

But with the shutdown of restaurants and hotels, the processors are just stocking them in cold rooms and logistics cost has increased as well, this has forced them to reduce demand, he said. www.businessday.ng

L-R: Olayiwole Onasanya, permanent secretary, Lagos State Ministry of Agriculture; Abisola Olusanya, acting commissioner for agriculture, Lagos State, and Oluranti Sagoe-Oviebo, state project coordinator, APPEALS Project, during the acting commissioner for agriculture inspection tour to ministry of agriculture at Oko Oba Agege in Lagos, yesterday.

Harvard School appoints Okigbo senior fellow for Mossavar-Rahmani Centre

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he Harvard Kennedy School of Government has announced the appointment of Patrick O. Okigbo III as a Senior Fellow of the Mossavar-Rahmani Centre for Business and Government (M-RCBG) for the 2020-2021 academic year.

According to a statement made available to BusinessDay, Patrick will join 17 other distinguished professionals from business and government to address issues at the interface of public and private sectors.

Their roles will strengthen the connection between theory and practice, offering both faculty and students insights to the nature of social problems and their most practical solutions.

As a Senior Fellow, Patrick’s research will be on “Rebuilding the Falling House: Technology Innovations and Africa’s Renaissance”. His faculty sponsor is Harvard Professor John Haigh who is the Co-Director of the M-RCBG with Larry Summers and is a Lecturer at the Harvard

Kennedy School. This research underpins Patrick’s conviction that Africa can leapfrog to the next frontier of development by leveraging ubiquitous technology innovations to address many of her governance and development challenges.

Alongside his research engagement, Patrick, a former a Senior Special Assistant to President Goodluck Jonathan, will lead study group sessions with other Senior Fellows, lecturers and students at the Harvard Kennedy School in his area of research.

The statement further noted that Patrick is the Founder of Nextier Advisory, a public policy advisory firm with a focus on improving governance and development outcomes in Africa. Nextier works with major government institutions and international development partners. It is the local implementing partner of two of the most extensive infrastructurefocused develop ment programmes in Nigeria.

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COVID-19: CIPM commends efforts to protect lives, livelihoods of Nigerians SEYI JOHN SALAU

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hartered Institute of Personnel Management of Nigeria (CIPM) has commended the various effects undertaken by government to support Nigerians in coping with the resultant effects of the Coronavirus (COVID-19) pandemic, especially as the lockdown persist across the country. “... sincerely commend the Federal and State Governments’ efforts to protect the lives and livelihoods of citizens, residents and businesses,” said Wale Adediran, president/chairman of Governing Council, CIPM, at the 51st annual general meeting (AGM) of the CIPM, held virtually via Zoom.

According to Adediran, government at various levels have demonstrated commitment to the wellbeing of Nigerians through the awareness campaigns, precautionary health measures, isolation, treatments, palliatives, lockdown and grad@Businessdayng

ual easing of the lockdown in various sectors of the economy.

“COVID-19 pandemic has brought us into that future we thought was still a few years away. We are now facing the new normal and the new world of work,” said Adediran, stating that it had necessitated an immediate re-adjustment of business models, to enable organisations and individuals continue to survive while the disruption lasts and, thrive after it is all over.

According to Adediran, in 2019 the CIPM held a number of fora and seminars at which it discussed the ‘Future of Work’ and the globally felt changes and challenges being created as a result of the impact of digital transformation.

“Our 2019 Annual National Conference was themed ‘Disruption – Change the Game’.

We knew the world of work was about to change but no one expected this speed and this nature of disruption,” said Adediran.

Thursday 02 July 2020

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news

Reasons UN-Habitat launched Covid-19 response plan for vulnerable communities CHUKA UROKO

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orried as the world lives through an unprecedented social and economic crisis caused by Covid-19, the United Nations Human Settlements Programme (UNHabitat) unveiled a response plan for the pandemic, targeting vulnerable communities where the impact of the pandemic is severer.

An agency of the United Nations, UN-Habitat which is based in over 90 countries of the world, works for a better urban future and promotes the development of socially and environmentally sustainable cities towns and communities.

Covid-19 has caused the loss of tens of thousands of lives while over 200 countries have been affected. In just a few months, the pandemic has changed the way people live, work, travel and socialisation.

Susannah Price, the agency’s chief of communication, notes that over 95 percent of world’s coronavirus cases are in urban areas across over 210 countries in nearly 1,500 cities. She points out that people living in slums or informal settlements are particularly at risk and constitute the most vulnerable communities of the world.

“These people live in overcrowded conditions, lack adequate housing and basic services such as water and sanitation and many are informal workers surviving from one day to the next,” Price says, adding, “this makes it extremely hard to implement measures to slow transmission

such as physical distancing, self-quarantine, hand-washing or community-wide lockdowns.”

In Nigeria, the government found it extremely difficult to effectively enforce a five-week lockdown it imposed on the federal capital territory (FCT), Abuja, Lagos and Ogun states because many of the people living in slum areas of the three cities are mainly people living on dollar-a-day.

“You can’t expect a man with a family who survives on daily income and is almost homeless in terms of the nature of accommodation he has to obey the stay-at-home order by the government. He must go out because the continued existence of his family depends on that,” Henry Nwosu, a public health worker tells BusinessDay. UN-Habitat’s multi-million dollar initiative to help the most vulnerable in cities and communities is therefore targeted at people in this class. Nigeria is one of the 20 African countries to benefit from the response plan.

Others are Angola, Burkina Faso, Cabo Verde, Cameroon, DR Congo, Ethiopia, Gambia, Ghana, Guinea, Guinea-Bissau, Kenya, Mozambique, Sao Tome and Principe, Somalia, South Africa, South Sudan, Tanzania, Zambia and Zimbabwe.

In Africa, the Arab states, Asia Pacific, Latin American and the Caribbean, the agency is working with its partners on ground, including mayors, governors, transport and utility providers, women, youth and community organizations and NGOs to urgently deliver the $72 million Response Plan.

Further connecting Africa’s tech infrastructure - Pan African Towers

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an African Towers is expanding its telecom market so that fundamental services such as education, healthcare and banking are available to every Nigerian.

According to Wole Abu, managing director/CEO of Pan African Towers Limited, “We want to scale rapidly into the next phase of our development so that we can start looking at rural solutions that would help everybody.”

Access to life enhancing services such as health, education and financial inclusion continues to be one of the greatest challenges in sub-Saharan Africa (SSA).

In fact, access to broadband connectivity seems to be a luxury to most rural communities in SSA as the region is seriously lagging behind other regions across the globe, Abu says, noting that one company in Nigeria is dedicated to providing broadband penetration and connecting rural communities in SSA to the global world.

Pan African Towers is a leading telecoms infrastructure and wireless service provider in Nigeria. The company, registered in 2017 but commenced its business operations in 2018, has within two years positioned itself as a top company in the telecommunication industry and expanded its market beyond the Nigerian borders with operations in Ghana.

The company, which now has over 1000 towers in Nigeria and about 300 towers in Ghana, has developed a compelling business model coupled with the use of cutting-edge technology and powered by green renewable energy which will give various telecom network operators across Africa the

much-needed support to lower costs and deliver high quality and reliable service levels across their operations.

Speaking on the occasion of his company’s celebration of two years of business operations in Nigeria, Abu says, “Our vision is not to stop because we have a pan-African vision and beyond. We also want to sell our products out of Africa.

If you have the right people, funding, values and ethics, you should be able to participate in the value chain and contribute. Opportunities are so huge in Africa if we grow infrastructure.”

Pan African Towers has highlighted the need for expanded telecom coverage and in light of the recent Covid-19 pandemic, this need is more apparent than ever. “Fortyfive per cent of Africans do not have telecom coverage,” says Abu. “Many people are excluded, and that has implications on financial inclusion, education, healthcare and other sectors. Apart from being a good business, it is also a good socialimpact business. Internet is taken for granted in many parts of the world, and when schools migrated online because of Covid-19, my heart bleeds for the millions of children in Nigeria who cannot do that. I do not think that there are hardly any kids in European countries who do not go to school because they do not have access to the internet.” For Pan African Towers, this need, signals opportunity.

“This is something I am passionate about. If you have good telecoms today, you can sit in your house and take lectures even from India. Then the boy in the rural area can access whatever the world has to offer today.” www.businessday.ng

L-R: Segun Raheem, national treasurer, Nigeria Union of Teachers (NUT); Sade Morgan, corporate affairs director, Nigerian Breweries plc, and Patrick Olowokere, head, sustainability and regulatory relations, Nigerian Breweries, during Pic by Olawale Amoo the 2020 Maltina Teacher of the Year Flag-Off ceremony held in Lagos.

With eye on growth, FCMB Group moves to acquire 96% stake in AIICO Pensions MICHAEL ANI

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CMB Pensions Limited, a subsidiary of FCMB Group, says it has entered into an agreement that will see it acquire 96 percent stake of AIICO Pensions Limited.

The move is part of a deliberate strategy to grow the group’s investment management portfolio and build on the inherent synergies between its pensions and banking business, the firm says in a statement displayed on the Nigerian Stock Exchange’s website.

The statement, signed by Donald Kanu, company secretary, AIICO Insurance plc, notes that AIICO Pensions would cease to be a subsidiary of AIICO Insurance plc at the conclusion of the proposed sale.

The acquisition by FCMB Group serves as one of several proactive steps, along with digitisation, that the company has embarked upon to enhance its

market position and competitiveness as the industry braces up for the commencement of Retirement Savings Account (RSA) portability.

According to the firm, investment funds’ performance has been receiving greater traction amid a low interest rate environment. In this regard, FCMB Pensions also strengthened its investment committee with the addition of Titi Odunfa Adeoye to its Board of Directors. Adeoye is the founder and chief investment officer of Sankore.

The new director holds an MBA from Harvard Business School, a BBA in Accounting (summa cum laude) from Howard University and is a Certified Public Accountant (Gold Award).

Adeoye’s skills in investment strategy were honed at firms like Goldman Sachs in New York. Her area of expertise is strategies for the creation, growth and preservation of individual or family wealth with a focus on “alternative”

Professionalism, structure are important when employing Nanny BUNMI BAILEY

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rofessionalism has been identified as the key ingredient to consider when employing a Nanny. This was made known by Amara Agbim, founder, The Nanny Academy, at the institute’s 10th anniversary celebration in Lagos.

According to Agbim, most trained Nannies understand the value of contracts and the need to respect them.

“They understand that forming secure attachment is a critical part of child development and work in partnership with parents to help children thrive. To achieve this level of professionalism, deep training which penetrates to achieve a mindset shift is preferred over sandwich training packages,” she explained.

Also, Agbim identified some challenges facing the growth and development of this essential social service industry. She said it is wrong for employers to

think that individuals take to the profession due to lack of gainful employment or any other work to do.

“Children aren’t always easy to handle so we should do away with thinking that it is an unfortunate truth that most nannies work in childcare because they couldn’t find a “real” job. It is not true that they take to the role because they’re looking for something simple and don’t strive for anything more out of laziness,” she said.

In addition, experts believe employer malpractices can discourage professionalism.

According to Chichi Okiche, a recruitment manager with Robert Half, the ideal candidate to hire is one with a right combination of education and experience. The right education in itself equips the candidate with the right social skills and interpersonal skills to succeed on the job. Hiring untrained hands and some ‘experience’ is just a malpractice.

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asset classes.

Analysts have already seized on the announcement expressing broadly positive views of its impact for both FCMB Pensions and FCMB Group.

One investment banking analyst described the move as, “a positive move and a statement of intent from FCMB’s management to leverage its non-banking businesses to drive profitability.”

FCMB Group had since increased its stake in Legacy Pensions (now FCMB Pensions) to 91.6 percent in 2019 and now has full control of the business.

The pension arm of the lender has since grown its assets under management (AUM) to N325 billion with 350,000 customers as at March 2020, while that of AIICO Pensions is estimated at N126 billion with over 240,000.

A combined AUM of N451 billion and almost 600,000 customers will take the entire Group’s customer base to 8,000,000 and its total AUM (inclusive of all investment

management activities) to over N560 billion.

In addition, the enlarged pension business will benefit from FCMB’s extensive distribution platform, comprising 205 branches, a strong web and mobile presence, and the recent the launch of its Pensions’ online enrolment platform.

Another analyst describes the move as a “landmark transaction giving a mid-tier player a great opportunity to bulk up,” further remarking that, “we believe the combined entity will be better positioned for stronger organic AUM growth and fee income contribution to the Group’s performance.”

Speaking about the announcement, Ladi Balogun, chairman of the Board of Directors - FCMB Pensions, remarks, “The business intends to use its scale to positive effect towards investing in the growth of the Nigerian economy, while ensuring safety and the most competitive returns for its customers.”

Banwo & Ighodalo, others top FMDQ’s Fixed Income Primary Markets Solicitors’ league table Daniel Obi

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n a bold move and show of confidence in Nigeria’s securities market, Banwo & Ighodalo has been ranked tops among Nigeria’s solicitors participating in Nigeria’s debt capital market.

The law firm participated as solicitor for both bond listing and Commercial Paper quotations in the FMDQ’S Bond and Commercial Papers market for Q1, January to March 2020, with a total market participation value of N112.47 billion and N208.37 billion, respectively.

According to the latest FMDQ Fixed Income Primary Markets Sponsors’ and Solicitors’ league tables and analyses seen by BusinessDay, “six capital markets solicitors actively participated in the bond and CP markets for the period. The most active solicitor for the review period was Banwo & Ighodalo participating as a solicitor for both bond listings @Businessdayng

and CP quotations for Q1 2020.”

The ranking also showed that Udo Udoma & Belo Osagie participated in the CP market with securities valued at N40.99bn, Aluko & Oyebode participated in the CP market with a total value of N24.21bn.

Others that participated are Solola Akpana and Co; P.O. Akinrele and Co; and G. Elias & Co. The report also listed registration member institutions, RMs, who are the FMDQ Exchange-authorised sponsors of the listings and quotations of fixed income securities (i.e. bonds and commercial papers (CPs), respectively, for Q1 2020.

In the FMDQ Exchange fixed income primary markets, the report states that only 12 RMs participated in the listings and/ or quotations of these securities with one participating solely in the bond market and 11 in the CP market whilst two participated in both the bond and CP markets.

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Thursday 02 July 2020

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news Why DisCos are against increasing...

Continued from page 1

cost is N53kwh, allowing a shortfall of N22kwh, which

has ballooned to huge losses.

This is worsened by the inability of DisCos to recover the cost of power sent to them.

So the DisCos say that debts caused by tariff that are not reflective of costs should be taken off their books, that technical challenges that cut down the quantity of power they actually receive against what they are compelled to pay for should be addressed, and every electricity user must be metered if they must remit 90 percent of collections back to the market.

Azu Obiaya, CEO, Association of Nigerian Electricity Distribution Companies (ANED), told BusinessDay that apart from those issues, the coronavirus pandemic has had significant impact on global business and economies including the ability of customers to pay for power for a higher tariff.

He said risks facing DisCos include foreign exchange risk, as significant portion of the industry costs were indexed in dollars and they were exposed to naira tariffs that were not sufficient. Other risks include threat to stable gas supply, transmission challenges, and regulatory risks. The DisCos said these risks would need to be addressed for the new tariff plan to work.

The DisCos estimated that a lack of cost-reflective tariff has caused shortfall of over N1 trillion, even though their inability to fully collect the market invoice for the power they are given results in a loss of almost 40 percent of the cost of the power they receive monthly.

While these are fundamental issues, DisCos too have been inefficient in their operation. Their operational cost alone is over 40 percent, which could either indicate gross incompetence at administration or manipulation of their books.

Obiaya refuted the suggestion insisting that the high operational costs reflect the challenges inherent in operating in a country where millions of customers are unmetered, have apathy towards paying for power, and where technical losses are high.

DisCos’ exposure to banks is responsible for a significant

proportion of their non-performing loans. Obiaya said the DisCos are in regular talks with the banks even as they have discussions with their regulator to resolve financial losses in the sector.

A reconciliation of the monthly invoices and payments in the power sector found that the 11 DisCos owe a combined sum of N622.4 billion and interest accrued on this debt has risen to N308.2 billion, bringing their cumulative debt to N930 billion.

The new service-reflective electricity tariff plan which should have taken effect on July 1 groups customers in five tariff bands based on the number of hours they enjoy power daily.

Electricity generation companies (GenCos) have condemned the postponement of the new service tariff plan, threatening to declare force majeure if the Federal Government goes ahead to postpone the plan.

Joy Ogaji, executive secretary, Association of Power Generation Companies (APGC), in a phone conversation threatened that the operators would drag the Federal Government to arbitration court in the UK over the matter.

Besides compelling DisCos to provide power according to agreed service plan, they were also obligated to remit 90 percent of their collections to the market or risk losing their licence.

The DisCos have been able to push remittance to 40 percent, a situation which constrains other market participants. For example, the generation companies get less than 30 percent of their market invoice.

Obiaya said the way forward is for NERC to recalculate the minimum remittance order, making allowances for years there were structural problems, align tariff price increase with retail tariff increase, and compel GenCos to pay the required charge if they must supply power directly to some of the DisCo customers under the Eligible Power regulation.

He further called on NERC to repeal the order capping estimated billing until 90 percent of customers are metered.

Interest in rent-to-own housing...

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to buyers. “If the owner of the property gets foreclosed on, the tenant (subscriber) will be forced to leave. The contract will be forfeited and he will have to buy the home from the bank,” Stanley Ogbeifun, a property management consultant, argues.

Ogbeifun notes that, like

everything else, the scheme also has its good sides, citing the Federal Mortgage Bank of Nigeria (FMBN) and the Lagos State government schemes that have mortgage components that make them accessible and relatively affordable.

The Lagos State scheme, launched in 2016 with special focus on first time home buyers, entered the housing marwww.businessday.ng

Ahmad Lawan (2nd r), Senate president; Femi Gbajabiamila (r), speaker, House of Representatives; Muhammad Nami (l), executive chairman, Federal Inland Revenue Service (FIRS), and others, during inauguration of the Inter-Ministerial Committee on Audit and Recovery of Back Years Stamp Duties and launch of FIRS Adhesive Stamp, in Abuja.

COVID-19: Nigeria turns to precision...

cally, 11 of such red spots are located in Lagos, Nigeria’s sprawling commercial centre.

A breakdown of figures as at June 26, shows Eti-Osa Local Government had highest number of reported cases with 1,515 cases,Alimosho,thelargestlocal governmentinthestate,had663 cases, Kosofe had 659 cases, Ikeja had 620 cases, Oshodi-Isolo had 496 cases, Surulere had 478 cases, Lagos Mainland had 363 cases, Mushin with 318 cases, Amuwo-Odofin had 255 cases, Ibeju-Lekki with 226 cases, Somolu had 245 cases, Ikorodu had 224 cases, Apapa had 210 cases, Lagos Island had 195 cases, Agege with 159 cases, Ojo had 133 cases, Ifako-Ijaiye had 119cases,AjeromiIfelodunwith 84 cases, Lagos Offshore had 73 cases, Badagary and Epe had 40 and 35 cases, respectively.

Nigeria is not the only country adopting precision lockdown in a bid to halt the spread of the virus. In England, Leicester would remain under lockdown measures for at least two more weeks as restriction, even as the loosening of restriction in England is expected to start on July 4. It comes after the city recorded 944 positive cases in the two weeks to June 23, about one in

every 16 of the total UK cases during that period.

The new restriction would see non-essential shops shut, ban on non-essential travels in and out of the city, no pubs, restaurants or hairdressers will open on July 4. Unlike the rest of England, a walk-in testing centres is also being set up in the city, with extra funding for all Leicester councils to help support local businesses and those who need to self-isolate Accordingtofiguresreleased by the National Centre for Disease and Control (NCDC), as at June 30, Nigeria has recorded a totalof25,694caseswith138,462 samples tested. By implication, Nigeriahasatestpositivityrateat 18.5percent,withglobalaverage at 31.4 percent.

As at June 30, Lagos being the epic centre with 10,510, confirmed cases with 35,112 samples tested. By implication, Lagos has a test positivity rate of 29.9 percent. This means the state’s test positivity rate is higher than the national average.

Test positivity rate is the proportion of administered testes that conclude the subject has the disease being tested for.

According to the LagosState commissioner for health, Akin Abayomi, a total of 4,891 cases were reported in Lagos between June 2 and June 27, a 50 percent surge in reported cases during the period. Over 5,000 of the cases monitored in communities by the state’s response team have either recovered or responded positively to treatments at home. 454 of such cases are currently under isola-

tion in public and private care centres across the state.

Sadly, 2,683 active cases in the communities are yet to turn up for admission in care centres either due to ignorance, fear of stigmatisation or preference for home care. The state has also recorded a total of 128 covid-19 related deaths.

Christian Happi, a professor and director, African Centre of Excellence for Genomics of Infectious Diseases (ACEGID), Redeemer’s University, Ede, Oshun State, said residents of the affected areas must buy into the idea for the precision lockdown to yield any result.

“Government should not lockdown and leave the people but aggressive testing must be carried out, with positive cases isolated for treatment,” he said.

In his own view, Austin Obi, a Lagos-based lawyer and public affairs analyst, said the state government must double down on its testing strategy and contact tracing of over 2,000 community confirmed cases who refused to commit themselves to the isolation centre.

“Precision lockdown is not enough. We need to increase our testing mechanism in those areas. Some of these local government areas have issues with their location and the fact that they do not have defined borders,” he said.

Currently, four public laboratories with a combined capacity of 2,000 are testing COVID-19 samples in Lagos.

To increase the level of testing the Lagos State government on Tuesday launched a consortium of seven private laboratories in the first phase in a bid to increase the accessibility of testing facilities to the organised

private and corporate sector who may wish to test for various reasons. The state government also opened a 150-bed isolation centre at the Mainland Infectious Disease Centre, Yaba.

According to Austin, provision of a walk-in test centre at strategic points or bus-stops in the affected areas and public enlightenment would help in deployingprecisionlockdownin affectedareasacrossthecountry.

Concerns have also continued to mount across the continent relative to testing strength of countries, especially at a time when the virus is said to have reached the stage of community transmission in most places.

According to John Hopkins University tallies, Africa’s case load crossed the 400,000 mark as of July 1, with death toll also surpassing 10,000.

There are over 201,800 active cases against 193,000 recoveries across Africa. South Africa remains the most impacted with over 150,000 cases from over 1.6 million tests.

The top five countries with confirmed cases are South Africa (151,209), Egypt (68,311), and Nigeria with over 25,000, Ghana (17,741) and Algeria (13,907). These statistics are valid as of July 1, 2020.

Although, Africa’s figures continue to be very low compared to other continents, Europe and America alone accounted for over 50 percent of cases when the WHO recently confirmed that global figures had gone past 10,000,000.

Over in South America, Brazil remains one of the worst impacted along with Iran in the Middle East. Russia and India also have very high caseloads.

ket with 4,355 housing units it inherited from the Lagos Home Ownership Mortgage Scheme (LagosHOMS).

These houses came from 12 housing estates including Sir Michael Otedola Estate, Odoragunsen, Epe, Odo Onasa, Agbowa, Igbogbo Housing Estate, Ikorodu, Egan-Igando Housing estate, Alimosho, Lateef Jakande Gardens, Igando, also in Alimosho. Other estates for the scheme are

CHOIS City, Agbowa, Olaitan Mustapha Housing Estate, Ojokoro, Iponri Estate, Surulere, Sangotedo Estate, EtiOsa and Ajara Estate, Badagry.

“In the last one year, this administration has strengthened its policy of delivering homes to Lagosians through a convenient mortgage system tagged rent-to-own,” Moruf AkinderuFatai, the state’s commissioner for housing, says recently.

The commissioner dis-

closes that besides the 600 beneficiaries recorded for the state’s mortgage schemes, rent-to-own scheme has also recorded 1,230 beneficiaries.

This lends credence to an unconfirmed report that says the level of interest in the state’s scheme is about 6 percent.

“I think the problem is with the equity contribution, which subscribers are required to make. For me, asking somebody to pay 5 percent of a house

that sells for N5 million, for instance, is not too much, but you see a lot of people complaining,” a source close to the state ministry of housing says.

Continuing, the source notes, “The houses that go for N5 million are, however, located in areas that are far from the city centre and not many people would like to live in those places. So, you see that besides equity contribution, you also have issue of location.”

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geted lockdown measures in areas that report rapid increase in cases of coronavirus.

As at the end June, 20 local government areas across the country account for 60 percent of novel COVID-19 cases. Specifi-

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Thursday 02 July 2020

BUSINESS DAY

32

FEATURE

MainOne: 10 years of enabling a digital economy

From less than 10 startups in 2013, the number of startups in Yaba grew to 60 by mid-2019. Businesses, including Hotels.ng, Konga, Paga, PrepClass, Ogadriva, Iroko, BudgIT among others, all operate from Yaba.

The effect is that several jobs have been created and property quality and prices have risen to accommodate the growing workforce.

Yabacon, as Yaba is currently called by those who understand the trend, was formed to “demonstrate the power of people being connected and the socioeconomic impact that would have,” Kazeem Oladepo, MainOne’s regional executive for West Africa, told Bloomberg in an interview last year.

Indeed, in the locations and countries where it operates, MainOne has been enabling a digital economy, creating jobs, making life easier and more meaningful and connecting West Africa to the rest of the world through highspeed Internet connectivity and colocations.

FRANK ELEANYA

M

A small beginning

“

ainOne is indeed just ready to launch. The cable is in place, we are doing final testing and we will be in service next month.” These words were spoken on a rainy Friday afternoon on 18, June 2010 in Lagos. Ms. Funke Opeke, CEO of MainOne Cable Company Limited was the speaker and she was being interviewed via satellite by CNBC’s Lerato Mbele who was all the way in South Africa.

Exactly 10 years later, a lot has changed. Ms. Mbele has long left CNBC for the BBC. MainOne formally launched operations in July 2010 as promised. And over the next 10 years would grow to become a dynamic and extensive network with footprints across West Africa.

Indeed, the company’s operations now span ten countries in the sub-region, including Nigeria and Ghana.

MainOne currently provides services to MTN, Airtel, Etisalat and several ISPs in Nigeria. It does the same in Ghana, where it serves all the large operators. History will reckon MainOne as the company that started the data revolution in West Africa.

But when Ms. Opeke first conceived the idea of building a company that would meet the connectivity needs of not only Nigeria, but other countries on the West African coast, not many potential financiers saw the idea as viable.

“Raising money is the most difficult thing I ever did as an entrepreneur,” she said at Techpoint Inspired, a gathering of tech sector investors and nerds in 2017. “At the beginning, we raised just $3.2million from friends, family and mentors,” she told the gathering.

Eventually, the company raised $240 million, and built a 7,000km submarine cable system with landing stations in Nigeria, Ghana and Portugal. Even now, several more possibilities still exist with branching out units along the coast of West Africa in Morocco, Canary Islands and Ivory Coast as options to cater to the expected surge in demand in the future.

All out to West Africa Perhaps because Nigeria is Ms. Opeke’s home country, MainOne is headquartered here and offers Connectivity Services, Enterprise Voice Services, Some Managed Services, Data Centre Services and SME related Services to thousands

Funke Opeke

of customers in the country.

In 2011, the company secured ISP and Metro Fiber Licenses in Nigeria. It began deployment of its ASN 37282 IP/NGN network immediately. It went on to commence Metro Fibre building in Lagos and Accra in 2012 and launched its landmark Colocation Services the same year through its subsidiary, MDXi. Each year, as time progressed MainOne added to its portfolio of services and expanded its reach across the region. In 2015, MainOne launched MDXi, Lekki Data Centre and IaaS Cloud Services, while pushing its Submarine Cable extension to Cameroun. In order to meet the IT needs of small businesses, MainOne launched SME-in-a-Box in 2016 and further expanded its line of services to include more Cloud Services.

The year 2019 saw further expansion as MainOne subsea cable landed in Grand-Bassam, Abidjan and Dakar, Senegal in collaboration with Sonatel.

Over the last decade, the company has forged strategic partnerships with global IT majors in order to deliver premium services. Key among these are Facebook, which signed on open-access fiber network in Nigeria with MainOne, and French based Avanti Communications Group, which signed a satellite www.businessday.ng

connectivity-based agreement with MainOne. Interestingly, MDXi attained Microsoft Gold Data Centre competency, SAP recertification in 2018.

At present, MainOne is able to also interconnect with SEACOM and other international cables from Seixal in Portugal via Tata Communications’ European and Transatlantic networks and interconnection in Telehouse, London.

“The GDP per capita in most advanced markets is at least 10 times what we have in Nigeria, and you’re

‘

MainOne has forged ahead gallantly, achieving many milestones and gaining recognitions all the way

https://www.facebook.com/businessdayng

looking to deliver on the same technology infrastructure,” Ms. Opeke explained in a BBC interview in early 2020, drawing attention to the low broadband uptake in Nigeria and other West African countries.

MainOne submarine cable currently delivers high speed bandwidth of 1.92 Tbps and has been proven to provide capacity of at least 4.96 Tbps. But much of the company’s capacity is yet to be taken up. There is however, appreciable economic impact in areas where MainOne has fully deployed its connectivity infrastructure.

The impact and future impact Connectivity and cloud services provided by MainOne have been a catalyst for economic growth in West Africa. Nowhere is this exemplified better than in Yaba, a university town in the middle of Lagos.

In August 2016, Facebook founder Mark Zuckerberg visited Nigeria and Yaba was a big part of his visit.

Zuckerberg stopped at CCHub and the offices of Andela, a company he has invested in. MainOne is a major enabler of the tech companies clustered in Yaba, which is today referred to as Yabacon Valley (Nigeria’s Silicon Valley). By providing broadband to the community, MainOne not only enabled the cluster but also ensured its connectivity to the rest of the world. @Businessdayng

The next 10 years But MainOne’s work has not been a stroll in the park. One of the many challenges that MainOne encountered was governance and how economic growth in various African nations impacted the speed at which infrastructure could be built, despite the fact that overseas investment was pouring into the continent at the time. MainOne has forged ahead gallantly, achieving many milestones and gaining recognitions all the way.

Both for Ms. Opeke and the company, accolades have continued to pour in. In the last decade, MainOne and its subsidiary have won an average of three awards yearly.

The company has received over 30 awards from local and international organisations, within and outside the IT industry. These awards include the NTITA Internet Service Provider of the Year (Enterprise) Award; Datacloud Africa Award for Excellence in Data Centre (Africa); Africa Cloud Service Provider of the Year; NTITA Telecoms Wholesale Provider of the Year; BoICT Award for Best Tier III Data Centre in Nigeria, among others.

No one can tell exactly how the next 10 years will pan out, but one thing seems sure. The company continues to innovate and partner with the best of IT companies to give its teeming customers world-class services in Africa. At 10, MainOne has exemplified the resilience of the African spirit against all odds. The company inspires us to look to the future with optimism in the continent’s ability to play a significant role in the digital economy.

32

Thursday 02 July 2020

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Wednesday 01 July 2020

Top Gainers/Losers as at Wednesday 01July 2020 LOSERS

GAINERS

Opening

Closing

Change

N117.5

N116

-1.5

GUINNESS

N14.5

N14

-0.5

0.5

ZENITHBANK

N16.1

N15.7

-0.4

N19

N18.65

-0.35

N10.5

N10.2

-0.3

Company

Opening

Closing

Change

BUACEMENT

N38.7

N42

3.3

CADBURY

N6.75

N7.4

0.65

N10

N10.5

WAPCO

STERLNBANK PZ

Company

MTNN

N1.25

N1.37

0.12

FLOURMILL

N4

N4.1

0.1

NASCON

ASI (Points) DEALS (Numbers) VOLUME (Numbers) VALUE (N billion) MARKET CAP (N Trn)

24,595.05 3,772.00 198,011,937.00 1.036

... driven by BUA Cement, Cadbury, Lafarge Africa, others

N

igeria stock m a r k e t gained on Wednesday July 1, thereby opening the second-half (H2) of the year on a positive note.

The positive close was driven by increased bargain hunting in favour of stocks like BUA Cement Plc, Cadbury Nigeria Plc, and Lafarge Africa Plc. The Nigerian Stock Exchange (NSE) All Share Index (ASI) increased by 0.47 percent to 24,595.05 points at the close of the remote trading session, from preceding day low of 24,479.22 points.

Stocks value rose by N61billion to N12.830trillion as against

N12.769trillion recorded on Tuesday.

The record stock market’s negative return yearto-date (YtD) stood lower at -8.37 percent. In 3,772

deals, stock dealers exchanged 198,011,937 units valued at N1.036billion.

Among other gainers, BUA Cement Plc recorded

FTSE 100 Index 6,157.96GBP -11.78-0.19%

Nikkei 225 22,121.73JPY -166.41-0.75%

S&P 500 Index 3,119.74USD +19.45+0.63%

Deutsche Boerse AG German Stock Index DAX 12,260.57EUR -50.36-0.41%

Generic 1st ‘DM’ Future 25,710.00USD +21.00+0.08%

Shanghai Stock Exchange Composite Index 3,025.98CNY +41.31+1.38%

12.830

Stock market opens H2 on a positive note Iheanyi Nwachukwu

Global market indicators

the highest rally after its price moved from N38.7 to N42, up by N3.3 or 8.53percent.

Cadbury followed after moving from N6.75 to N7.4, up by 65kobo or 9.63 percent. Lafarge also advanced from N10 to N10.5, up by 50kobo or 5percent.

Oil prices rose on Wednesday on a string of positive manufacturing data and a drawdown in U.S. crude inventories, both indicating an economic recovery, however, fears of a surging coronavirus infections capped the gains.

Brent crude was up 13 cents, or 0.3 percent, at $41.40 a barrel at 1236 GMT, and U.S. crude was up 14 cents, or 0.4percent, at $39.41 a barrel. Both contracts rose $1 earlier in the session.

AIICO Insurance sells 70% stake in pension business Modestus Anaesoronye

A

IICO Insurance Plc (AIICO) has entered into discussions with FCMB Pensions Limited for the divestment of its interest in its Pension subsidiary, AIICO Pension Managers Limited. The proposed sale will see a full uptake of AIICO’s 70% stake in the Company.

The proposed transaction is subject to the approvals of the National Pension Commission (PenCom) and the Federal Competition and Consumer Protection Commission (FCCPC).

This divestment is for two reasons, Babatunde Fajemirokun,managing director/CEO, AIICO Insurance Plc said: “the first is to unlock the value that is greater than holding the asset as a subsidiary now and in the future. The second reason is to deploy the

ensuing capital in other assets where AIICO has a stronger competitive advantage, thereby maximising long-term value for its stakeholders. It is not driven by the Company’s recapitalisation plans which is on its own path and nearly complete.”

AIICO Insurance is a leading composite insurer in Nigeria with a record of accomplishment of serving its clients that dates back over 50 years. Founded in 1963, AIICO provides life and health insurance, general insurance, investment management and pension management services as a means to create and protect wealth for individuals, families and corporate customers.

Conoil full year turnover surges to N139.8bn

Interswitch boss sees Covid-19 as wake-up call for companies

...proposes N1.39billion as dividend payout to shareholders

ith the impact of coronavirus pandemic which has left businesses across the globe counting losses, Mitchell Elegbe, Founder and Group Managing Director at Interswitch has described it as a wake-up call for companies to take proactive measures, as well as have a crisis management plan in order to prepare for potential crisis and keep their businesses afloat.

He made this known during the WIMBOARD Institute Webinar tagged: “The role of a Board in Anticipating and Managing Crisis”, held on Thursday June 18, 2020.

Speaking on what boards can do to anticipate crisis, Mitchell explained that the board takes a long-term view of the business and plans for seasons. Using the Interswitch Group as a case study, he disclosed that prior to the novel coronavirus disruption, Inter-

A

gainst the background of the tough challenges that marked the operating environment of the downstream oil sector, the nation’s total energy provider, Conoil Plc turnover still surged by 14.4percent to N139.8 billion in 2019.

Conoil’s 2019 full year results showed that the company maintained its leadership position in the industry, reaping bountifully from the huge investments in its business portfolios. The company recorded a 9.8percent growth in Profit After Tax which rose to N1.97 billion in 2019 from N1.79 billion posted in 2018. Operating Profit on ordinary activities before taxation and exceptional items grew by 10.4percent from N2.56 billion to N2.83 billion.

The company also recorded an increase of 10.2percent in its Net Assets from N15.26 billion

to N16.82 billion.

The management said given the impressive performance, and in fulfilment of its promise to its teeming shareholders, the company has proposed N1.39 billion as dividend payout to shareholders for the financial year ending December 2019.

This meant that shareholders will get 200 kobo on every 50 kobo ordinary share.

Explaining the company’s impressive growths in turnover and profitability, a statement issued by the management said:

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Conoil attributed the impressive results to effective cost management strategy, aggressive marketing and improved sales. We repositioned our retail stations by embarking on massive upgrade of the outlets thereby boosting sales.”

“The modest dividend proposal is hinged on the need to consolidate our cash management effort vis-à-vis the liquidity squeeze in the economy. We look forward to opportunities in the coming years to continue to deliver solid financial results and increase competitive returns and shareholder value,” the company stated.

Conoil said that its would continue to leverage on its strong, leadership position in the industry to deliver value to investors through taking advantage of emerging opportunities in the industry opportunities.

W

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switch Group had developed a proactive crisis management plan that has enabled the firm navigate the business environment seamlessly, was and continue to offer top-notch services to its esteemed customers, during the pandemic.

He disclosed that while it is true that the company did not envisage the coronavirus outbreak, the board not caught unprepared by the impact of the pandemic. He explained that as far as the Interswitch Group’s board is concerned, the Group’s vision is captured as a landing zone and a welldefined plan is put in place.

Not unmindful of multiple risks that had propensity to crystallize along the way, the board proactively set out to identify and activate triggers that would help achieve the vision and mitigate traps that could potentially have detrimental effect on the actualization of the business’s vision. @Businessdayng

He added that at Interswitch, four major indicators were tracked as potential crisis traps: organizational disruption, unrehearsed major market province, technology lag or solution failure and poor business practices or governance.

He said: “The interesting thing about COVID-19 is that it threw up all four challenges simultaneously and the impact was major. “However, because we track these things from time to time, we envisaged its possibility and were able to navigate the business in a way that has helped us cope with the current situation.” Describing an effective board during a crisis, Mitchell explained that having a supportive board with people of different backgrounds, bringing different perspectives to bear during a crisis especially as it concerns the external environment, is critical to an effective board and gives the CEO lots of confidence to navigate the crisis.

Thursday 02 July 2020

BUSINESS DAY

33

POLITICS & POLICY

Edo guber election is for South-South, not for Obaseki - Wike

…As Okowa says Edo people will compensate Obaseki for his giant strides IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin

R

ivers State Governor, Nyesom Wike Wednesday said the September 19 gubernatorial election in Edo State was for the people of the South-South and not that of Governor Godwin Obaseki.

Wike, who made the remarks while speaking on his achievements in an interview on African Independent Television (AIT) and monitored in Benin City by BusinessDay, said it was time for South-South to speak with one voice.

Recall that before the defection of Governor Obaseki to the People’s Democratic Party (PDP), Edo State was the only state in South-South geo-political zone under the leadership of the All Progressives Congress (APC).

While assuring that the South-South governors would rally behind the re-election of Governor Obaseki, he added that there would be no intimidation in the election, as the people of the state would be allowed to choose who governs them.

“Edo election is not an Obaseki election but for the people of the South-South.

APC has never been a political party; it’s a collection of people that came together to fight Jonathan. That’s why they can’t agree,” Wike said.

According to him, “Edo people rejected

Nyesom Wike

Godwin Obaseki

Ize Iyamu in the last election because they saw he wouldn’t be a good governor.”

Meanwhile, Delta State Governor, Ifeanyi Okowa, has said that Governor Obaseki would be compensated by the people of the state in his administration’s giant strides in the last three-and-half years.

Okowa made the remarks in his congratulatory message to the state governor who clocked 63 years.

The governor’s statement by his Chief Press Secretary, Olisa Ifeajika, in Asaba,

said Obaseki deserved to be celebrated for providing purposeful, courageous and result-oriented leadership for Edo people in nearly four years.

“It is heart-warming to note that you have through dint of hard work, discipline and vision to industrialise Edo, won the admiration and respect of your people and the nation at large.

“Your focus and commitment to reforms in governance and your ability to attract investors into your state are remarkable and

Ondo guber: Adelami assures of party cohesion, youth empowerment James Kwen, Abuja

A

frontline gubernatorial aspirant in Ondo State on the platform of the All Progressives Congress (APC), Olayide Adelami has assured that he would ensure party cohesion if elected as Governor.

The Deputy Clerk of the National Assembly, who spoke with journalists Wednesday in Abuja after submitting his expression of interest and nomination forms in Abuja, lamented that APC members in the state were disenchanted with 80percent of them aggrieved and promised to build the party if elected governor.

Adelami, who said he was on a rescue mission to save Ondo from maladministration, vowed to take the teeming youths out of the streets in the state, decrying the situation where many of them have graduated for years without jobs.

“Like I said, the first thing is to come to Ondo State to maintain party cohesion.

Number two, the numerous disenchanted, hopeless, near hopeless youths roaming the

streets. We have so many of them in Ondo State who have been carrying their certificates for the past five, six years looking for job that is not there.

“I am coming to Ondo State to engage our teeming youths. They must work, they are the asset of Ondo state and I value them so much.

They are going to take priority in the projects I’m going to execute in Ondo State.

On the mode of primaries, Adelami said: “The popular opinion is a direct primary, I normally refer to it as election, nobody will be disenchanted, everybody will be given opportunity to express themselves”.

While extolling the qualities of the Governor Mai-Mala Buni-led Caretaker/Extra-Ordinary National Convention Planning Committee of the party, the aspirant said: “They are men of integrity, if you look at the profile of all the new leaders that are there now, they are men of integrity.

“I have no doubt about that, they will be transparent, they will not be bias in the execution of their duties so that at the end of the day all members of APC will be happy for it”.

worthy of commendation.

“No doubt, the people of Edo will in September, reciprocate your giant strides in the last four years by returning you and your amiable deputy for another term in office to guarantee a brighter future ahead of them,” he stated.

He however, lauded the Obaseki’s ingenuity and untiring spirit which he said had brought to bear in stimulating the industrialisation of his state, and making life easier for the people through investments, including the Azura-Edo Independent Power Project (IPP), a 450MW Open Cycle Gas Turbine power station.

He also eulogised his Edo state counterpart for his patriotic and relentless service to his state and the nation, just as he prayed to God to grant the governor long life, good health and wisdom as he continued to serve Edo people and Nigeria.

“Your focus and commitment to reforms in governance and your ability to attract investors into your state are remarkable and worthy of commendation.

“On behalf of my family, the government and people of Delta, I heartily rejoice with my brother governor, a reputable politician, outstanding professional, seasoned administrator, Godwin Nogheghase Obaseki, on his 63rd birth anniversary.

“It is our prayer that God will continue to protect you and grant you good health to render more services to mankind”, he stated.

BMO hails Wike on proper perception of Buhari

T

he Buhari Media Organisation (BMO) has commended the Rivers State Governor Nyesom Wike for affirming that President Muhammadu Buhari has not abandoned any part of the country.

According to the group, this is contrary to the position of a socio-cultural group in the region, the Pan-Niger Delta Forum (PANDEF), led by Edwin Clark which recently claimed that the Buhari administration had exhibited bias against the Niger Delta in the last five years.

BMO said in a statement signed by its Chairman, Niyi Akinsiju and Secretary, Cassidy Madueke, that Governor Wike has proved PANDEF wrong and confirmed what it had always said about the President.

“Like many Nigerians, we were surprised to see Governor Wike taking out full-page adverts in national dailies, as well as issuing a personally signed press statement thanking the President for approving the refund of N78.9bn to Rivers State Government, a refund for the execution of Federal Government road projects in the state.

“This is because he is one of the most influential figures in the opposition People’s

Democratic Party (PDP) with a habit of criticising the President, the last being his sharp rebuke of the Federal Government for allegedly politicising efforts to contain coronavirus by giving Lagos State a grant of N10billion.

“So we hail Governor Wike for his courage to confirm what we have always said about President Buhari as a selfless and nationalistic-minded leader, not the picture the opposition had always sought to impose on Nigerians.

“We, however, wish to add here that the President has in the last five years paid attention to the completion of the long-abandoned Bonny-Bodo road and bridge project, the Itakpe-Warri railway project as well as provide support for the establishment of six private modular refineries in the Niger Delta region.”

According to BMO, “This is in addition to the take-off of the Maritime University in Delta State, the ongoing National oil and gas park scheme in the region and of course the EastWest road that has been ongoing since 2006.”

It added that the President did what no previous leader had done by releasing in excess of N700billion in two tranches to all 36 states for the reconstruction of federal roads.

INEC refuses registration of new voters for Ondo election KORETIMI AKINTUNDE, Akure

T

he Independent National Electoral Commission (INEC) on Wednesday said it would not register new voters ahead of the governorship election in Ondo state.

The Commission has fixed October 10, 2020

for the gubernatorial election while both the ruling All Progressives Congress (APC) and opposition People’s Democratic Party (PDP) have showed interest in the election.

No fewer than 20 aspirants are seeking to contest the ticket of the two major political parties for the election.

Speaking at a stakeholders’ meeting in

www.businessday.ng

Akure, the Resident Electoral Commissioner, Rufus Akeju said there would be no Continuous Voter Registration (CVR) and distribution of Permanent Voters Card (PVCs) in the state again before the governorship poll.

According to him, the development was due to the ravaging COVID-19 pandemic with the rising cases in the state.

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Akeju added that the commission was already mapping out ways of mitigating the challenges posed by the virus ahead of the governorship election.

He noted that out of the 1,822,346 registered voters in the state, 1,478,460 have so far collected their PVCs while 372,888 PVCs are yet to be collected.

@Businessdayng

Thursday 02 July 2020

FT

BUSINESS DAY

34

FINANCIAL TIMES

World Business Newspaper

US Main Street lending facility draws little interest

Federal programme designed to help midsized businesses during pandemic is too complex, bankers say LAURA NOONAN, COLBY SMITH AND JAMES POLITI

U

S bank executives say they have seen minimal interest in a $600bn programme designe d to help midsized companies through the Covid-19 pandemic, raising questions about whether the federal response to the crisis is helping key parts of the American economy.

Senior executives at some of the biggest US lenders told the Financial Times they had more people working on the Main Street Lending Program than they had borrowers interested in taking money from it.

The banks have typically seen fewer than 200 serious expressions of interest each since the programme — which is 95 per cent funded by the Federal Reserve — was launched a fortnight ago. That is a sharp contrast with the deluge of applications that initially flooded the federal Paycheck Protection Program, which offered forgivable loans to cover small businesses’ wage costs during the pandemic.

Bankers say the MSLP is overly complicated. Drawing up loan documents can costs tens of thousands of dollars, they say, and borrowers have also been deterred by the administrative burden.

Although the Fed twice reduced the minimum borrowings from an initial $1m to attract more small and medium-sized businesses, demand for smaller loans has been particularly low.

“What banks are telling us is that once borrowers have a better

Jay Powell, Fed chair, and Steven Mnuchin, Treasury secretary, discussed the Main Street lending facility during a congressional hearing in Washington on Tuesday © REUTERS

sense of the details and the complexity of the programme — the legal documentation, the fact that it is a participation structure, the requirement that the borrower has to do quarterly reporting — they may lose interest,” said Lauren Anderson of the Banking Policy Institute.

More debt may not be the answer here, debt doesn’t solve every problem Jay Powell, Fed chair The struggles of the MSLP come amid growing concerns that the fiscal support introduced during the crisis — including nearly $3tn in payments to households, unemployment benefits and aid to businesses — is fading or ending, even as Covid-19 cases are on the rise.

The Senate on Tuesday night voted to extend the deadline for

the PPP to August 8 since about $130bn of its $659bn funding would have gone unused if it had closed as planned on July 1.

The extension is not final until approved by the House of Representatives.

Jay Powell, the Fed chair, told Congress earlier on Tuesday that more than 300 banks were participating in the Main Street programme, which launched last month, but were “not getting a ton of interest”, though they expected that to change “over the course of the next few months”.

“We continue to be open to playing with the formula and making adjustments,” he said.

During the hearing, Mr Powell was pressed to further lower the minimum borrowings from the current $250,000, to widen its ap-

peal. Mr Powell said the Fed was open to the idea, but noted that it created challenges.

“We can see ourselves possibly lowering the threshold again but logistically for us to be making very very small loans would be difficult and those people would be better dealt with through fiscal policy,” he added.

Larger companies do not need the loans, which require only interest payments for the first year, since they have been able to raise money cheaply in booming debt markets, bankers said.

Kathy Bostjancic, chief US financial economist at Oxford Economics, warned the Fed could face a degree of “reputational risk” if it was perceived to be doing more to help Wall Street than Main Street.

“We have seen a V-shaped

recovery in equity markets, but we are far from that in the real economy,” she said, as US stocks closed out their best quarter since 1998.

One of Congress’s biggest concerns has been that the MSLP would not help some of the hardest hit sectors of the economy, including commercial real estate groups in retail and hospitality.

Steven Mnuchin, US Treasury secretary, acknowledged it was a “large challenge”. Mr Powell said it was a “serious problem”, and added that central bankers were “racking our brains” to see how it could be addressed.

Latest Coronavirus news Follow FT’s live coverage and analysis of the global pandemic and the rapidly-evolving economic crisis here.

“More debt may not be the answer here, debt doesn’t solve every problem,” the Fed chair said.

The Main Street scheme may be as unappealing for banks as it is for their clients. A senior executive at a large US bank said that if a client was a good credit “the odds are you make the loan outside the Main Street programme rather than within it”.

“The programme is really complicated,” he said. In addition to the costs involved in tailoring documents for every borrower, banks making loans to large customers have to seek agreement from all that businesses’ existing lenders. Banks are further constrained because they are blocked from reducing existing loans for some businesses that benefit from the MSLP.

HK begins crackdown despite foreign condemnation Police arrest protesters under new security law on anniversary of city’s handover to China

NICOLLE LIU AND JOE LEAHY

H

ong Kong police have made their first arrests under a sweeping new national security law imposed on the Asian financial hub by Beijing that has drawn international condemnation.

A day after Chinese president Xi Jinping signed the legislation into law in Beijing, Hong Kong police on Wednesday cracked down on thousands of protesters who defied Beijing to hold an annual march to mark the anniversary of the territory’s handover from the UK to China in 1997.

Riot police pepper-sprayed and detained protesters in a busy shopping district after officers displayed a banner warning them that they might be committing a secessionor subversion-related crime by joining the demonstration.

Police tweeted a picture of a

man arrested for carrying a Hong Kong independence flag — an illegal item under the new law, which punishes activities such as campaigning for secession with up to life imprisonment.

“This is the first arrest since the law came into force,” police said, adding that they had detained more than 300 people for alleged offences including violating the national security law, illegal assembly, obstructing police and possession of offensive weapons.

Police said one officer was stabbed in the arm while making an arrest. Protesters also blocked roads and violated coronavirus limits in Hong Kong on large gatherings.

The US, Europe and Australia have condemned the legislation, which critics said undermined the high degree of autonomy and rule of law promised to Hong Kong on its handover 23 years ago. www.businessday.ng

Terrorism, subversion and collusion with foreign elements will also attract penalties of up to life imprisonment under the new law.

One Hong Kong protester, Hannah, an 18-year-old secondary school student, said the national security law had “made Hong Kong like China”.

“We have more fear compared to before . . . but we have to show the world we’re still resisting,” she said, standing in front of a fire protesters had lit in the middle of the road.

Other protesters gathered in impromptu groups away from the police, where they raised flags with “independence” written on them.

In the US, the administration of President Donald Trump said the security law was a “violation” of China’s commitments under the Sino-British Joint Declaration that established Hong Kong as an autonomous region.

“As Beijing now treats Hong

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Kong as ‘One Country, One System,’ so must the United States,” said John Ullyot, the National Security Council spokesperson.

“The United States will continue to take strong actions against those who smothered Hong Kong’s freedom and autonomy. We urge Beijing to reverse course immediately.”

But Zhang Xiaoming, deputy director of the Hong Kong and Macau Affairs Office, said at a press conference on Wednesday that China would retaliate if the US launched sanctions.

“Of course we’re not intimidated. Gone are the days when Chinese people had to be at somebody’s disposal or rely on others for the air one breathes,” he said.

Hong Kong Chief Executive Carrie Lam said the legislation demonstrated Beijing’s determination to improve the functioning of “one country, two systems”, the model of governance under which Hong @Businessdayng

Kong has enjoyed a high degree of autonomy.

She said Hong Kong had failed to better educate and promote “the nation’s history and culture” to the city’s young people.

The law will allow Chinese state security agencies to operate openly in Hong Kong for the first time.

The legislation not only applies to people in Hong Kong but to those not in the territory. That means that foreign nationals who speak in favour of independence for the territory, or advocate sanctions against China, could be prosecuted upon entering Hong Kong or mainland China.

Damaging public transport with intent to cause “serious social harm” is considered a terrorist act under the new law, which also gives Beijing the power to adjudicate national security crimes when requested by Hong Kong’s new state security bureau.

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Thursday 02 July 2020

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Tesla overtakes Toyota to become world’s most valuable carmaker Shares of electric auto pioneer rise fivefold in year as value of rivals drop because of pandemic PATRICK MCGEE AND PETER CAMPBELL

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esla has overtaken Toyota to become the world’s most valuable carmaker by market value, in the week that marks the 10th anniversary of the electric auto pioneer’s stock market entry.

The electric carmaker’s shares have climbed fivefold during the past year, from $230 about 12 months ago to $1,100 on Wednesday, taking the company’s market capitalisation to $205bn.

Toyota, the world’s secondlargest single carmaker measured by output with annual production of more than 10m vehicles, was worth about $200bn on Wednesday after its Japan-listed shares fell 1.5 per cent to ¥6,656 ($61).

Once debt is included, the Japanese group is still worth more, at $284bn compared with Tesla’s $207bn enterprise value, according to data from financial data provider Sentieo.

The relentless rise of Tesla’s shares has baffled some analysts, with the company’s value soaring despite producing only 500,000 vehicles this year and scarcely making a profit.

If the company breaks even in the quarter to June, it will be the first time the business has been in the black for four straight quarters.

While Toyota’s shares trade on a multiple that values the business at 16 times its earnings, Tesla’s shares trade on a multiple of almost 220 times the company’s profits, far above any other auto business and close to double the multiples seen by tech giants such as Amazon.

Tesla’s chief executive Elon

Musk tweeted in May that the company’s share price of $755 was “too high”, which did little to halt the company’s surging value.

While the electric group’s shares have almost tripled so far this year, values of established carmakers have slid because of the impact of the global coronavirus pandemic.

Toyota’s shares have fallen more than 12 per cent since early February, as it was forced to close factories and showrooms across the world.

In May, the Japanese carmaker warned that operating profits could slip 80 per cent this year and warned the decline in vehicle sales was likely to be “bigger than during the Lehman crisis”.

The pandemic has sapped global demand, with car sales expected to fall by 15 per cent this year, while demand for electric vehicles, driven by regulations in Europe and China, is expected to keep rising.

Although major carmakers from Volkswagen to PSA are

releasing battery vehicles, Tesla is still expecting its overall sales to grow as the global market for electric vehicles accelerates.

Tesla’s detachment from the industry-wide sell-off will be taken as validation by supporters who view the company as a tech group rather than a traditional industrial carmaker.

One Tesla employee close to Mr Musk compared the feat of surpassing Toyota to the moment Amazon overtook Walmart by market value in 2015.

On Tuesday, when a Twitter user tweeted Tesla’s $200bn market cap to Mr Musk — with a couple of clinking champagne glass emojis — the Tesla chief executive replied “Party on . . .”.

Yet the rise has surprised even the company’s most vocal stock market supporters.

As recently as December, Morgan Stanley’s Adam Jonas, who has consistently valued the business higher than other auto analysts, laid out three scenarios for 2020 that forecast Tesla’s value to rise 50 per cent to $500, fall 25 per cent to $250, or collapse 97 per cent to $10.

The eventual increase was substantially higher than even Mr Jonas’ loftiest estimate.

US stocks edge higher after strong second-quarter rally Global markets have rebounded after a sell-off in the first three months of 2020 HARRY DEMPSEY, JOSHUA OLIVER, PHILIP STAFFORD AND HUDSON LOCKETT

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S stocks rose on the first day of the third quarter as bullish investors took heart from cheering economic data and news of a potential coronavirus vaccine.

The S&P 500 index rose 0.6 per cent in morning trade in New York on Wednesday after the ADP employment report showed that US private payrolls rose by 2.37m in June.

FedEx, seen as an economic bellwether, led gainers, up 14 per cent after benefiting from a boom in online shopping and home deliveries. The tech-heavy Nasdaq Composite index rose 0.8 per cent.

The gains made for a positive start to the third quarter. On Tuesday US stocks capped off their best quarter in more than two decades on the back of a broad rally encouraged by central bank support measures and hopes of a powerful economic recovery.

Hopes for a recovery were boosted by news of a potential vaccine from Germany’s BioNTech.

A trial yielded positive results, preliminary data released on Wednesday revealed. The clinical study was

Chinese stocks rose after a survey showed manufacturing activity continued to improve in June © Reuters

run with pharmaceuticals group Pfizer in the US. BioNTech shares rose 6 per cent on Nasdaq while Pfizer rose 4.8 per cent.

The yield on the US 10-year Treasury note, which rises as the price of the bond falls, ticked up 2.3 basis points to 0.676 per cent.

However, the optimism was not matched in Europe, where the benchmark indices in London and Paris both finished 0.2 per cent lower, and Germany’s Dax finished 0.4 per cent lower. Economic data showed joblessness had ticked up to a five-year high in June. The composite Stoxx 600 eked out marginal gains, up 0.2 per cent. www.businessday.ng

Morning trading in Europe was disrupted by technical problems on Deutsche Börse’s trading system, which serves the markets of Frankfurt, Vienna, Malta and Sofia.

An outage lasted for more than two hours although floor trading continued. The electronic trading system went down in April for a longer period of time.

So-called purchasing managers’ indices, surveys of business confidence, across Europe were better than forecast but the global manufacturing number still reported a contraction in activity compared to the previous month.

Gabriella Dickens, assistant

https://www.facebook.com/businessdayng

economist at Capital Economics in London, pointed out that recent readings have been difficult to interpret.

“It is not clear whether respondents are comparing output, employment, etc to that in the previous month or to a ‘normal’ level or that of a few months ago,” she said.

“We suspect that the increase in the PMIs implies a rise in activity, albeit to subdued levels.”

Illustrating investors’ uncertainty, the yield on the debt of the 10-year German Bund rose 7bp to -0.4 per cent, a two-week high. Sentiment was bolstered by better than expected retail data, indicating a faster economic rebound. Yields rise when prices fall and investor demand for debt softens.

The weak opening to the quarter in Europe came after mixed signals from Asia, where markets rose on Chinese data that showed a second straight month of expansion in the world’s largest manufacturing sector.

Hong Kong’s stock market was closed for a public holiday, while China’s CSI 300 index of Shanghai and Shenzhen-listed stocks climbed 2 per cent on Wednesday.

Australia’s S&P/ASX 200 added 0.6 per cent.

The gains came despite the UK @Businessdayng

government saying that it would open a path to citizenship for almost 3m Hong Kong residents in response to Beijing passing a law that tightens its grip on the territory.

“We believe this final enactment and full text should not be too surprising for the market and should not lead to another major sell-off,” said Adrienne Lui of Citibank. “But further international responses to the national security law need to be monitored.”

There was also further evidence that the world’s second-biggest economy is building momentum after the coronavirus crisis hit hard. The Caixin manufacturing PMI, a measure of factory activity in China, came in at 51.2 for June, after also indicating growth in May. That result “reflected manufacturers’ confidence that there would be a further relaxation of epidemic controls and a normalisation of economic activities”, said Wang Zhe, senior economist at Caixin Insight Group.

Oil prices rose slightly, with futures on West Texas Intermediate, the US benchmark, gaining 1.6 per cent to $39.88 a barrel. Futures on Brent, the international marker, were 2 per cent higher at $42.10 a barrel.

INSIGHT

BUSINESS DAY Thursday 02 July 2020 www.businessday.ng

Business & financial re-engineering of electricity distribution companies

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Background he Nigerian Power sector has presented challenges to the socio-economic development of Nigeria despite persistent efforts by various government and regulatory agencies to improve the Power situation in the country.

While there are challenges across the value chain (Generation, Transmission and Distribution), the Distribution Companies (DISCOs) would appear today to constitute the major bottle neck in the Power value chain. The expected investment in distribution Infrastructure post Privatisation in 2013 did not materialise resulting in a situation where distribution capacity is currently below 4000MW and rejection of Power from the Grid by DISCOs has become prevalent.

Nigerian Electricity Regulatory Commission (NERC) in discharge of its responsibility has issued a number of Regulations and Orders to improve the situation. Particular mention must be made of two recent Orders: •NERC Order of August 2019 granting Tariff Shortfall Credit of N1.75trillion to 11 Discos, effectively a Power Sector Subsidy spend.

•Recent MYTO Review granting new cost reflective tariffs to the DISCOs of which the Public Hearings are being concluded within the month of March, new tariffs to be effective April 1, 2020.

The Tariff Shortfall Credit of N1.75trillion together with related accrued interest equates to over N2trillion subsidy spend by the Power Sector. It is expected that with this adjustments and the new tariff, there should be significant improvement in the business of the DISCOs. It is therefore important that the circumstances that led to earlier deterioration in the business of DISCOs should not recur.

For these measures to be effective there is the need for a comprehensive Business and Financial Re-Engineering of the DISCOs. This will start with understanding the real problems and implementing a range of measures to address them.

•Discos financial challenges The Distribution Companies’ total exposure to the Nigerian economy was close to N3trillion

by December 2019 made up of amounts due to NBET/TCN/CBN projected at N1.9 Trillion and the exposure of the SPV 60% Shareholder of DISCOs of N700 billion.

The recent Tariff Shortfall Credit of August 2019 has effectively resolved and remedied the finances of the DISCOs albeit at a great cost to the economy. This notwithstanding, it is very likely that new indebtedness and accumulation to NBET will continue at the rates

of N10billion- N15billion monthly.

This in turn, will create another need for subsidy recognition or Tariff Shortfall Credit.

The point must be made that the build up of debt to NBET/ TCN will continue until DISCO businesses are placed on sound operational and financing footing.. Were NBET/TCN to stop increasing their credit/life support to the DISCOs, the entire Nigerian Power System will collapse.

The exposure of the SPVs (used in acquiring the 60% stake in the DISCOs) to the Nigerian Banking System is currently estimated at US$2billion(N720billion) and should be approaching N800billion by 31st December, 2020.

As currently constituted, the DISCOs lack the ability to fully pay NBET existing obligations.

The 60% Shareholders (SPV) lack the ability to service its obligation to Nigerian banks. Systemically, we have major financial issues to resolve at the level of the DISCOs and related Major Shareholders.

This is at the core of the challenges facing the business of the DISCOs. There can be no third party Private Sector Investor or Lender in the DISCO segment until these are resolved.

All actions required to be taken must be taken concurrently and holistically.

•Business and financial reengineering actions A number of urgent actions are required to resolve the dilemma with the DISCOs: •Balance Sheet Restructuring The negative Shareholder funds and working capital deficit at December 31, 2018 have been substantially resolved by the NERC Shortfall Credits of August, 2019. However some DISCOs will continue to make losses and accumulate new indebtedness to NBET/TCN/CBN. Major Business

restructuring and equity injection must take place. These amounts are effectively undeclared or hidden Federal Government subsidy to the Power Sector currently close to N200billion per annum.

•Tariff Review There have been clamour for changes in tariff. These have now been granted by NERC and should take effect by April 2020. A mechanism for regular cost and market driven adjustment should be put in place to prevent accumulation of tariff shortfall. However, any further change in tariff must recognise: • There is an Industry Break Volume for Nigeria which should be close to about 8,000MW and below this volume, Nigerian consumers should not pay penalty for systemic incompetence.

• Benchmark with some West African Countries e.g. Ghana, Ivory Coast, etc.

• Any tariff above N50/KWH or US12.5cents could lead gradually to exodus from National Grid Power Supply by some consumers.

Increasingly, the costs of alternative power sources are declining, given advances in technology. For example, Gas generators can now deliver power between N48/KWH and N60/KWH depending on the closeness and cost of Natural Gas to the consumer. Furthermore, advances in Solar Technology have now brought Power delivery well below US10cents/KWH i.e.

N36/KWH particularly with flexible Solar Panels deploying High Yield Energy Technology.

It is therefore important to anticipate the potential rejection of Grid Power should customers be compelled to pay uncompetitive prices. We can draw parallel from what happened in the Telecom Sector with inception of Mobile Telephone Technology. Any Nigerian below 30 years old will

not remember that there was an organization called NITEL that as of December 2001 had less than 500,000 landlines as the only communication option for Nigerians.

With the advent of mobile telephones, we now have in excess of 140million mobile lines.

•Installation of Transparent Board & Management at the DISCOs In order to strengthen the management of the DISCOs and institute more transparent and competent procurement system, there is an urgent need to ensure that all DISCOs put in place Independent Professional management that can manage the operations with sound corporate governance like most publicly listed companies. The major source of improving cost and operational efficiency is more transparent procurement system.

•NERC/CBN/Nigerian Banks To Create Common Restructuring Platform For SPV DISCO Debts To The Banking System In 2013, Nigerian banks made loans in excess of US$1.2billion for the purchase of DISCOS. These loans were not made to the DISCOs but rather to the SPVs holding companies that purchased 60% shares. In practical terms, none of these loans are performing despite efforts by some SPVs to make contributions towards interest payment. With both principal and accumulative interest, the current exposure is now close to US$2billion (N700billion).

To improve the outlook of the DISCOs without resolving the indebtedness of the SPVs to the Banking System will be an incomplete solution. It is therefore recommended that joint action be taken by various Stakeholders to resolve the indebtedness. Possible solutions will include: Offer Principal repayment option over a longer period (of e.g.

10 years with 2 years moratorium) Write off part of accumulated Interests (e.g. 40-50%) Capitalise balance of accrued Interest and restructure over say 10 years as in above.

Consider an interest free/ freeze period (say 2 - 3 years).

Consider change of Major Shareholder to create room for new investor.

It is possible that even with the restructuring a number of the SPVs would still be in default in which case all the legal conditions attached to the loan should be enforced by the banks or a special agency be established to do so. It is obvious that some SPVs (60% Shareholder) will exit or be acquired eventually.

•Fresh Capital Injection Into The DISCOs The overall objective of the Business & Financial restructuring is to permit fresh cash to be injected into the DISCOs to support infrastructure expansion.

It is estimated that a minimum of US$2.5billion across the 11 DISCOs is required to build up DISCO Infrastructure to handle distribution of up to 12,000MW. This requires a combination of Rights Issue, Private Placements and Long Term Debts issuance to raise fresh funds in each DISCO. A new Major Investor with technical and Financial resources will likely emerge in some of the DISCOs during this fund raising.

•Other Technical/Commercial Issues In addition to the issues listed above, there are obviously other Technical/Commercial issues that must be addressed to create an efficient DISCO system. However, these can only be addressed when the challenges of Business/ Financial Re-Engineering are adequately addressed.

•Implementation proposal It is recommended that as a matter of urgency, a Special Committee of Techno/Commercial/ Financial Experts be set up to deliberate on the Business and Financial Restructuring of the DISCOs and make appropriate recommendations. Their work should engage all Stakeholders in the Industry.

•Conclusion The DISCOs’ exposure to the Nigerian economy is very substantial. This constitutes a major threat to the Nigerian economy.

After almost N2btrillion Tariff Credits (Subsidy payment), new shortfalls continue to accumulate while investments in capacity expansion stagnates. A comprehensive business and financial restructuring of the DISCOs is a National Strategic imperative to be addressed urgently.

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