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news you can trust I ** tuesDAY 02 june 2020 I vol. 19, no 575

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FG opens banks for full operation, relaxes restrictions on worship places ... retains restrictions on interstate travels, curfew now 10pm-4am ...schools remain closed, domestic airlines to open from June 21 TONY AILEMEN, HARRISON EDEH, SOLOMON AYADO, GODSGIFT ONYEDINEFU & GIFT WADA, Abuja

Godwin Obaseki (l), Edo State governor, presenting his Expression of Interest form for the forthcoming governorship primary election in the state to President Muhammadu Buhari. The governor was at the State House, Abuja to intimate the president on his intention to seek re-election on the platform of the All Progressives Congress.

Questions mount over Nigeria’s COVID-19 fight as cases spike ANTHONIA OBOKOH, MICHAEL ANI & TEMITAYO AYETOTO

onfirmed cases of coronavirus are mounting in Nigeria and the queue for those desperate to test for the deadly virus is getting unbearably longer by the day.

On Saturday, Nigeria crossed another grim milestone after it reported its single biggest daily total of 553 confirmed cases. Yet the significantly betterresourced private healthcare capacity in Africa’s most populous country has virtually been shut out of the government’s plan to fight the pandemic.

In the early hours of May 30, a 70-year-old Indian national arrived at the IDH centre in Yaba, Lagos, where he died the following day before he could be tested. It is suspected he had been infected and his case may have turned out differently if he could avoid the suffering he went through by being taken all over

the city searching for where he could be tested and cared for. You are not given access to a COVID-19 isolation centre in Nigeria if you have not been tested by a government testing centre. “You do not need an oracle man to tell you that Nigeria Continues on page 7

he Federal Government on Monday announced relaxation of restrictions on banking operations, saying there would be full reopening of the financial sectors, with banks allowed to operate at normal working hours of five days a week. The government also said religious worship centres could now open, but based on regulations and guidelines to be put in place by state governments. This is part of the guidelines released by the government for the next phase of ease of lockdown expected to last for four weeks spanning June 2 to June 29, 2020. Government, however, said schools would remain closed for Continues on page 7

Inside

Edo 2020: Obaseki presents re-election bid form to Buhari P. 15

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news LEFT TO SUFFER (III)

The woman who lost 14 children for refusing to ‘marry’ Boko Haram insurgents In the third part of this series, IBRAHIM ADEYEMI tells the story of a woman who watched Boko Haram kill 14 of her children, one by one, for repeatedly refusing to sleep with insurgents — an action she reasoned would amount to betrayal of her husband’s love

alo Sani, 54, is the mother of 18 children and the mourner of 14 of them. Love, after life, she says, is the only pride left for her as a human and a woman. Nothing else. Not even her only two surviving toddlers. Fourteen of her 18 children have been gruesomely murdered by Boko Haram; she isn’t sure if two more are dead or alive after they were caught in one of the many Boko Haram raids. Meanwhile, Kalo herself, her husband Sani Adamu, 62, and their two surviving toddlers Habiba, 4 and Zahra, 6, are now displaced. They dwell

in a temporary abode at the Bakassi camp, in Borno State. “I love my husband so much and he loves me too. I can’t trade him for anything else and I don’t want him to die,” she says slowly, lovingly. LOVE IN THE HOUSE OF TERROR It is easy to curse the fate of the two faithful lovers but theysee each other as the best gift from above. Even as a sexagenarian dying in the shadow of neglect at the Bakassi camp, Sani confirms the unbeatable love between him and his beloved wife. “Even in difficult times,” he says, “my wife stood by me and showed me rare love and affection. If not for her, I would have no reason to be

alive today. The only reason I haven’t killed myself is her honest love for me.” By “difficult times”, Sani is referring to the torture in Boko Haram’s den. Before the serial killers laid siege to their community in Gwoza, Borno State, everything was fine. Sani himself was wellto-do, farming and harvesting bountifully, and providing for his large family. “They came here and stole all my farm produce with my animals and my money, over N100,000,” says Sani, slipping into a melancholic mood. “I had three bicycles. We had 18 children. Then Boko Haram took all what we had. We suffered and starved for four years under them.”

After the attack, the villagers were held at a small rebel base in Gaje, near Sambisa, the site of fierce artillery battles between the terrorists and the Nigerian army. They were subsequently all herded “like cows” to Sambisa. In the forest, Kalo remained loyal to her husband. “Life is not worth living without my husband,” she says. “He is indeed a husband in need.” ONE, TWO, THREE… 14 SIBLINGS KILLED Strange as it may sound, Kalo mourned 14 of her own children for defying the marriage advances of the killer-terrorists in Sambisa. She watched as the Boko Haram demons

Continues on page 27

Lagos court rulings complicate Nigeria’s plan for oilfield licensing round

udges in Lagos have blocked Nigeria’s efforts to revoke two oilfield licences, court documents seen by Reuters showed, a move that could compromise a full licensing round for marginal fields which the government is aiming to launch as early as this month. Marginal fields are smaller oil blocks that are typically developed by indigenous companies. Nigeria had revoked the licences so these fields could go into the new licensing round - the first marginal field round since 2002 - which the country hopes will boost oil output and bring in muchneeded revenues from fees associated with the licences. The Ororo field, OML 95, and the Dawes Island Marginal Oil Field, formerly called OML 54, were among 11 licences revoked by the Department of Petroleum Resources in April. All 11 were set to be included in a total of 56 fields in the marginal field licensing round. Two different judges in Lagos granted decisions on May 27 that halt the inclusion of the two fields in any licensing round, the court documents seen by Reuters showed. Potential legal challenges

relating to the other licences revoked in April mean that all of the 11 licences could potentially be left out of the round, two sources familiar with the matter said. The DPR said it could not comment on a matter that was ongoing before the court. The Ministry of Petroleum Resources did not immediately comment on the rulings. Owena Oil and Gas Ltd, said in its lawsuit that the DPR revoked its OML 95 licence “without recourse to the plaintiff,” court documents seen by Reuters showed. Eurafric Energy Ltd. challenged the revocation of Dawes Island and said it had spent money developing the asset, the court documents showed. Owena Oil and Eurafric Energy were not immediately reachable for comment. Nigeria said last month it would delay major licensing rounds due to coronavirus disruptions, more than halving its projected revenue from signature bonuses to 350 billion naira ($972.22 million) from 939 billion naira originally expected. But it planned to accelerate the licensing rounds for marginal fields. Nigeria has not held a major licensing round since 2005.

Lagos’ unified fibre project could raise broadband cost if RoW fee remains above N145 FRANK ELEANYA

L-R: Olusegun Ogboye, representing Lagos State Ministry of Health; Victoria Nwadoka, corporate communication affairs manager, Nestle Nigeria plc, and Babatunde Idowu, field operations manager, Lagos Island, Nestlé Nigeria plc, during the donation of face masks by Nestlé Nigeria plc to the Lagos State Ministry of Health in Lagos.

Does Nigeria need a national food reserve agency? Josephine Okojie

igeria’s dream of feeding itself or attaining food security may never crystallise if the government fails to focus on critical issues limiting productivity, according to experts. Since the outbreak of the novel coronavirus in the country, food supply chain has been disrupted, sparking fears of a food crisis next year if the government does not take proactive measures to mitigate the severity of it. Also, prices of key staple foods have made rapid climbs in recent months, forcing the country’s inflation to a twoyear high in April. With food crisis a current threat and price volatility re-

Analysis emerging, Nigeria’s proposed food reserve bill has received renewed attention by the government. The National Food Reserve Agency Bill, which was first presented to the Senate in 2019, recently passed through the second reading in the upper chamber in a bid to prevent the looming food crisis. However, experts in the sector say that the government-proposed National Food Reserve Agency is a waste of resources as it does not in any way solve the country’s food insecurity problems. They note that the government should instead focus on strengthening the already existing national strategic grain reserve, which is a dewww.businessday.ng

partment within the Federal Ministry of Agriculture. “The plan to establish a National Food Reserve Agency is just another waste of resources,” said Kola Adebayo, professor of Agriculture, Federal University of Agriculture, Abeokuta. “We have always had it as a department in the Ministry of Agriculture and it has not done anything in addressing our food problems, so how would making it an agency change anything?” Adebayo asked. The creation of a food reserve agency contradicts the Muhammadu Buhari administration’s plan of reducing the cost of governance, especially at a time of low oil price and FX volatility triggered by the coronavirus pandemic. Currently, the government

cannot generate enough revenue to finance its 2020 budget. Creating a food reserve agency will require the additional cost of creating an office, hiring employees, and funding the proposed agency for it to fully carry out its objectives. Nigeria, Africa’s most populous country, currently has a National Strategic Grain Reserve Department which is under the Federal Ministry of Agriculture. The department has failed in carrying out its mandate in the past owing to inadequate funding from the government. This prompted the government in 2016 to concession 19 of the grain reserve silos out of the 33 silos spread across the country with a cumulative capacity of about 1.3 million metric tons.

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he Fibre Infrastructure Project by the Lagos State government, which is expected to take off very soon, is likely to bring additional cost burden on broadband operators as well as consumers. This is because the government is yet to revert to the N145 Right of Way fee approved by the National Executive Council (NEC). Lagos has a minimum RoW fee of N1,050 per linear metre. According to the state government, the multimilliondollar fibre project would involve the deployment of unified fibre duct infrastructure for carrying telecommunications cables and other wired infrastructure to support operators of telecommunications and other relevant utilities, as well as provide infrastructure and connectivity requirements for Lagos State. The state’s agreement with the company it appointed to execute the project, Western Telecommunication and Engineering Metro Limited, will see it run the project for an initial term of 25 years which could be extended by the parties, in writing, prior to its expiration or by effluxion of time, on mutually agreed terms and conditions. Western Telecommunications and Engineering Services Metro would also pay to the state coffers a fee of 10 percent of the @Businessdayng

revenues generated from the lease of the ducts to operators. In granting its approval, the Lagos State House of Assembly attributed the project to the report of the State House Committee on PublicPrivate Partnership (PPP) presented by the chairman, Lukmon Olumoh (representing Ajeromi/Ifelodun 1). Stakeholders who spoke to BusinessDay said the project is one of the suggestions made previously for a dig-once, lease-to-others policy. “The intention, I believe, is that the company would be ensuring the dig-once-only policy,” Olusola Teniola, president, Association of Telecommunications Companies of Nigeria (ATCON), told BusinessDay. According to the Nigerian National Broadband Plan 2020-2025, the policy was recommended to avoid continuous destruction of infrastructure during the laying of fibre, water, electricity or gas or any pipeline. Installing high-speed fibreoptic infrastructure is incredibly expensive. A significant portion of that expense is tied up in the process of actually digging up highways.Thedig-oncepractice effectively eliminates the need to dig up recently-paved roads to expand broadband infrastructure, significantly reducing the cost of building out internet access to underserved communities across the country.

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news FG opens banks for full operation... Continued from page 1

now while preparations are on for reopening. Announcing this at the daily briefing of the Presidential Task Force on COVID-19 on Monday, Boss Mustapha, chairman of the task force, said the PTF submitted its recommendations to President Muhammadu Buhari who approved them for implementation over the next four weeks, but subject to review. Mustapha said under the next phase, there would be application of science and data to guide the targeting of areas of on-going high transmission of COVID-19 in the country, as well as “mobilisation of all resources at state and local

government levels to create public awareness on COVID 19 and improve compliance with non-pharmaceutical interventions within communities”. Sani Aliyu, national coordinator of the Presidential Task Force, said the goal of phase 2 partial lockdown easing over the next few weeks was to balance public safety with protecting livelihoods. Government said it would continue to rely on security outfits for support for the full implementation of the next stage, and urged them to work with the public as the phase is geared towards ensuring that goods have swift passage and that the economy starts moving again.

Questions mount over Nigeria’s... Continued from page 1

needs to do better to avert

the worst possible outcome. This fight against COVID-19 should be about doing the right thing and saving lives,” said a health expert working for an international organisation based in Nigeria. BusinessDay investigations across the country paint a picture of a fight hampered by the lack of vision and a sense of care for those who are infected and dying. There appears to be greater attention given to defending the turf. Doctors say government officials are more concerned about who will do the job instead of getting the job done. The whole process is blanketed by secrecy and deliberate misrepresentation in some cases. Nigeria has about seven private healthcare companies that have nearly 45 standard and well-equipped laboratories across the country and could help in plugging the testing gap. A number of these private health companies include Synlab (formerly Pathcare), Union Diagnostic, AfriGlobal Medicare, Me Cure Healthcare Limited, Echo Lab, and Lancet. Since the infection was first reported in Nigeria on February 27, one private hospital, First Cardiology Consultants Hospital, Lagos, has been given licence by the government to manage cases of the virus and this privilege is simply on account of being the preferred caregiver to which the late chief of staff to the president was rushed to when he himself caught the virus. The government’s own facilities are near the point of being overwhelmed but government officials are stubbornly seeking to maintain their firm grip on the entire process. Private hospitals that have applied for licences to manage COVID-19 patients have waited for weeks without any

sensible response from the government. It takes on average a wait of four days to get tested in most cities in Nigeria because of the number of those waiting to be tested at the available government testing centres, and even after the sample has been taken, you will have to wait for another three days to receive the result. In those seven days, a person with the virus is left to infect several others while waiting for a test result before being taken into isolation. Unsurprisingly, Nigeria’s infection rate is galloping on the back of unrestrained community spread that is worsened by a grossly under-resourced track and trace platform. Saliu Oseni, incoming national deputy secretary, Nigeria Medical Association (NMA), particularly blamed the government’s deviation from the original plan to manage the pandemic, saying that the handling needs more than a one-man show. The original plan, he said, was to have the isolation centres filled up and manage the overflow in some selected general hospitals, event centres and religious centres. “But along the line, they deviated. A patient who is asymptomatic and goes for test has to go back home for self-isolation without considering the fact that the patient could be coming from a low socio-economic class. There is no way you can self-isolate a man that lives in face-meI-face-you with two to four people and expect that the disease will not be spread. The tendency of the spread is even more,” Oseni said. “Also the turnaround time of the test is below the need and by the time the result is out, patients are either already far gone with their symptoms or are dead. That’s not how to manage a pandemic. The reason why we have not had the result that we expect is because a lot of things have been www.businessday.ng

Nyesom Wike (l), governor, Rivers State, and Felix Obuha, former Rivers State PDP chairman, during the inauguration NAN of Rivers State COVID-19 decontamination team in Port Harcourt, yesterday.

done one-sided,” he said. Oseni, who is a consultant general surgeon at the Ikorodu General Hospital, said even if a private health player would come onboard to upscale testing, the responsibility of footing the bills must be on the shoulders of the government, else it would be resisted greatly. “Private labs can get involved as long as it is at the expense of the government, but that we will have a private lab to ask people to pay to do COVID-19 testing, that we will resist with every ability we have,” he said. He said a lot of the association’s members have been infected with the virus, hence it would never allow anyone to commercialise the pandemic. Doyin Odubanjo, executive secretary, Nigerian Academy of Science, said though it was necessary for the private sector to come in to assist in upscaling the testing capacity of the country, there was need for proper scrutiny to ensure that profit motive does not override the need for accuracy.

On March 31, Nigeria announced that it would increase the level of testing to 3,000 daily, but more than a month after, less than that daily level has been achieved, placing the continent’s number one oil exporter far behind less endowed African countries. Since the virus broke out, Nigeria, a country of 200 million people, has completed only 63,882 tests compared with Ghana’s 197,000, Mauritius (104,000), Uganda (86,000), Kenya (61,000), and South Africa (550,000). More than half the tests done in South Africa are accounted for by the private sector which has been shut down in Nigeria. In the last week, Nigerian government officials raised an alarm, yet unproven, that the coronavirus test kits circulating in the country are fake or unreliable. BusinessDay learnt from several leading medical practitioners in Lagos and Abuja that the alarm was deliberately sounded by officials to justify the government’s policy of shutting out

the private sector. According to BusinessDay investigation, some proprietors of private hospitals in the country acquired the test kits initially to help protect their own staff and when the waiting time for accessing the test in government centres got longer, wealthy patients are coming to them to undertake the tests which cost the naira equivalent of $30 in Nigeria. As soon as they got wind of this, government officials threatened to shut down such private medical centres and insisted later on that they be given as many as 100 test kits per batch for validation, instead of the usual 10. One leading health administrator told BusinessDay that this was not the practice during Nigeria’s globally acclaimed battle against Ebola. He said government officials today are simply too dogmatic and should see the danger in over-centralisation that has bedevilled the fight against COVID-19 in Nigeria. “I do not see a basis for

the argument over the testing technology and the preference for the PCR method when there is at least another with the same level of efficacy. I also do not see why the government should insist that people should not pay for the tests if they are people or companies that are willing to sponsor tests for other Nigerians. This is creating an unnecessary bottleneck and as a result people are dying at home even before they can access the test. All of this is making people lay accusations of conspiracy. It is the usual Nigerian problem all over again,” the health administrator said. “During Ebola, Lagos State did win the war before the Goodluck Jonathan government really intervened. And there was no such huge private sector donation as we have seen today. The government in Abuja is centralising everything and see what happened when it gave the Lagos State government N10bn, it led to other states demanding their own share,” he said.

What Nigeria must do now, according to healthcare experts

he reality is that COVID-19 is already in our community and we are in a stretchedout battle to contain it, and eventually to shut it down. Our full capacity for adaptive thinking and a flexible problem-solving approach must be immediately deployed, drawing from the examples of other people, but also from our innate resourcefulness. It is recommended that the following steps be taken IMMEDIATELY: 1. Private health sector participation: The reality is that COVID-19 is already infesting private sector facilities, and not just the designated Isolation Centres. They are trying their best to screen cases using temperature measurement and clinical evidence. However, they are missing asymptomatic carriers, sometimes at great cost. We are aware of a

Teaching Hospital neurosurgery team that had to be shut down because of a patient they operated on, who showed no sign of COVID-19 but proved to be infected. Actual testing in the present system takes up to three days to arrange, and up to another three days before results are obtained. This leaves medical staff and other patients at great risk as we speak, and is driving people sick with other illnesses away from hospitals. ALL PCR RESOURCES IN NIGERIA, PUBLIC OR PRIVATE MUST BE IMMEDIATELY DEPLOYED FOR THE PURPOSE. 2. The technology and pace of testing: We must not be dogmatic by insisting on exclusive use of PCR technology for testing. Our pace is way too low, and our numbers utterly inadequate. The FDA

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in USA last month licensed an Antigen test for use. This signifies that the sensitivity and reliability are now sufficient for Antigen testing to be deployed at least for frontline use. We are aware such kits are already in Nigeria because many doctors feel it’s necessary to continually protect themselves, their staff and their patients. We must bring this discussion to the surface and create a formal role for the ‘rapid test’. It can only enhance practice and confidence. Government may insist that anybody diagnosed positive by the Antigen test must be ‘confirmed’ by PCR testing before being documented. All ‘negatives’ that show clinical signs or have clear history of contact should still be tested again with PCR. 3. The vexed issue of payment: There is an insistence that ‘people must not pay @Businessdayng

for tests’. This is obviously a policy matter but it is faulty in our present situation and must be pragmatically modified. One of the ways of doing this is to arrange open-ended private sector sponsorship to cover tests undertaken with the currently dormant PCRs, and perhaps to also cover the use of the Antigen test in designated facilities – PRIVATE AND PUBLIC. Finally, any private facility that shows a willingness to dedicate part or all of its facility to COVID-19 treatment should be guided along the journey in a quick and safe way, instead of being treated as an intruder. We believe if these measures are urgently taken, we will, as a society, be able to gain firm control of the situation and build confidence in the generality of our health workforce and our society.

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Required government’s attention for efficient public transport system

Festus Okotie

he transportation sector is the “gateway” to the economy of any nation and therefore government needs to re-evaluate the strategies of upgrading the sector to add more value to the success of its economy, create employment opportunities, increase global competitiveness and create better living condition for its citizens. The importance of the sector to the overall development of economies globally cannot be over emphasised especially as transport innovation was a catalyst for growth in the 19th century industrial revolution, and also because innovations in transport and logistics have led the economic and environmental drivers of the technology revolution in the 21st century. The sector is a catalyst in all aspects of national development. Its process involves the need to collect, assemble, transfer and distribute goods, services and people from one location to another. Transportation systems globally are experiencing ongoing changes and thanks to modern transformative technologies, education and innovation. Nigeria currently the largest economy in Africa had a gross domestic product (GDP) of $446.543 billion in 2019 with the transportation sector increasing its GDP to $720.241 million contribution in the third quarter from $642.927 million. Over 80 million people use public transport daily and the system has long suffered lack of attention and low budget allocations from the government especially in the areas of development of infrastructures and other relevant areas needed to upgrade the sector. There are evidence of degeneration and setbacks in the sector in Nigeria with

a huge population of over 200 million people partly due to poor human resources development. Public transport is a means by which large proportions of urban dwellers gain physical access to goods, services, and activities that are needed to sustain life and wellbeing. It therefore needs extensive overhauling from road and rail systems to maritime, Ports and airports, all these urgently needs upgrades to drive growth in the sector and economy at large to have a direct positive impact on the economy and lives of the citizens. The sector plays a very important role in both the developed and developing nations ,it also serves as a means of reducing reliance on private car-ownership by providing an affordable alternative for urban commuters and so government at all levels need to look beyond selfambition, politics, religion and other petty elements hindering the growth of the sector. There is need for Nigerian government to set higher standards by restructuring the way National Union of Road Transport Workers (NURTW) is run and also needs to intervene in the way politicians are seen to be hijacking the purpose of the union for political purposes, with NURTW perceived to be a structure of extorting money unjustly from vehicles operators and furthering costly political ambitions. The lack of attention given to the transport sector which accounts for 40 to 50 percent of cost of goods by past government has also adversely affected the sector negatively thereby constraining the movement of people, goods and services, which is a major challenge causing the slow growth of the sector and making it unattractive for both local and foreign investors. Driving the sector with the use of modern technology structures also help boost greater efficiency, economic security, facilitate the movement of people, goods and services that helps link-up communities and states to each other. In addition, it also helps improve safety and security, reduce pollution and road congestion, amplification of freedom and mobility, reduction of overall household expenses, increase social connection and inequality resulting

from the burden of those who cannot afford their own cars, it also helps in improving productivity of the citizens. All these and the recent emergence of COVID-19 pandemic should wake up leaders in the sector to realign the present strategies which is not sustainable. The Nigerian government also need to urgently work towards the upgrade and development of policies by sponsoring bills that can help reposition the sector and build better structures that can sustain it on long term basis and also strengthen its long-term economic goals, diversify the economy and also afford the nation the opportunity of making its cities to be smarter and be a more secure place to live in. The Federal and states government can also partner with developed nations and organisations in unique service areas in the provisions of mobility to the general public in areas such as provision of buses, trains, ferries, shared taxis and airlines etc. All these will help create a more efficient and equitable transport system. There is also urgent need for Nigeria to develop structures that can help fast-track collaboration with developed economies and international organisations on the best strategies of upgrading the sector, for example the most common forms of public transport in Lagos with a population of over 21 million (2016) inhabitants are taxis and buses, mostly in rickety state. The state population is growing rapidly at a rate of nearly 3.2 percent with projected population to hit over 32 million in 2050 and become the sixth largest city in the next 30 years according to the Global Cities Institute at University of Toronto. It recently banned the use of motorbikes (Okada) and tricycle (kekemarwa) in some parts of the state, in general all these modes of transport are very insecure, unsafe and unreliable for a city like Lagos that considers itself as a ‘megacity’. A good public transport sector should have diverse positive impacts on the economy of the society, both direct and indirect impacts and so it is important for both the Federal and States government to partner with organisations such as Bernard Hall Limited (www.bernardhallgroup. com) and Festus Okotie Consulting (www.festusokotieconsulting), that has good international network with world renowned public transport con-

‘

The lack of attention given to the transport sector which accounts for 40 to 50 percent of cost of goods by past government has also adversely affected the sector

Okotie, a maritime transport specialist, writes via fokotie.bernardhall@gmail.com, Fokotie@ bernardhallgroup.com

COVID-19 – an insight across modern trade retailers in Nigeria

ith the spread of COVID-19 rapidly changing processes and livelihoods, it is hard to predict what’s next? Here in Nigeria where tracking and monitoring has mostly been considered poor, it has been a task to monitor actual numbers of those exposed and at risk of the dreaded virus. The novel Coronavirus poses a legitimate threat to supply chains and stock replenishment for Supermarkets, which may struggle to manage inventories at this time. What we have witnessed internationally has also trickled down into Nigeria, we have seen customers storm into supermarkets and clear out entire shelves in a bout of panic shopping. As millions prepare for lock down or what would become an economic shutdown, hyper supermarkets have seen an increase in visitors since the beginning of last week. People shopping essential and non-essential products, tissue paper was also on the list for

many in Nigeria as well. It has become a policy across the stores to limit the number of purchases per customer across essential items. However, the best Supermarket supply chains are designed with disruptions in mind and inbuilt strategies to accommodate disruptions. Supermarket franchises in Nigeria have rolled out plans to keep sales going while mitigating the spread of the virus. Shoprite Nigeria has imposed a maximum headcount for customers entering their store locations, customers are asked to queue and maximum of fifty are allowed in at a time. Artee group, Spar is enforcing hygienic practices with hand sanitizers and temperature checks at the entrance of stores. Prince Ebeano has shut its doors, using a personal shopper approach with phone numbers displayed at the entrance for customers to place their orders and be served accordingly. They have also advised customers to shop on-

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line although online shopping for household items in Nigeria is at its early stages. Justrite Superstore has included humanitarian efforts, and is pushing discounts for certain product to give more consumers the opportunity to shop thereby improving sales. As the world heeds to the general call for social distancing and more people staying home the demand will level out. Though at the peak of the rush now, labour shortages will create gaps in the supply chain across service industries the effect of which will be compounded by stampeding customers. Supply chain firms are also playing leading roles, with firms such as Zippy Logistics currently handling modern trade deliveries for some of the popular household brands reiterated its commitment to customers’ towards getting its products to the final consumer. The efforts taken by such firms will include; Regular contact/ communications with trucking partners and manufacturers/sup-

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sultants in areas like public transport master planning, integration, bus network planning, vehicle and crew scheduling, bus tenders, bidding assistance, implementation of modern public transport technologies, fare systems, policies, demand analysis, modelling, contracts management, design and service performance optimisation etc. An efficient public transportation system helps in the provision of a more efficient means of transporting people from one location to another and proffers an effective solution to transport challenges for travellers, especially for those who do not have their own vehicles. In recent times the Nigerian government invested a lot in upgrading the railway sector to reduce the cost of transportation to make life more comfortable for its citizens, this is evidenced by the 2019 Memorandum of Understanding where the Minister of Transportation Rotimi Amaechi signed on behalf of Nigeria and the Chairman/Chief Executive Officer (CEO) of Joint Stock Company Russia Railway, Oleg Belozerov signed for Russia during the last Russia, African Economic Forum in Sochi Russia, all these confirms the determination of the present government to develop the sector and improve the living condition for Nigerians In conclusion, while the Federal government is making giant strides in developing the sector for the overall development of our economy, states government should complement the efforts by adopting Lagos State government transport strategy to develop the sector, grow their economy, make life more comfortable for their citizens and also reduce the cost of transportation for citizens, because an average Nigerian spends approximately 40 percent of their income using public transportation which is not supposed to be as obtained in developed nations like Australia, Canada, China, Japan, USA, Singapore, Britain and so investing more in the development of the sector will help create more employment opportunities, develop a stronger economy and build a more sustainable transportation sector.

Amanda Etuk pliers to develop flexible solutions, buffing up safety measures to prevent the spread of the virus, maintaining stable relationships with modern trade retailers and staying agile through the process. Beyond the supply chain, it is a worldwide concern what the lasting effect of the Coronavirus pandemic would be on economies and the world as we knew it before. The lingering effects will depend heavily on how long this pandemic lasts. The countries of the world are facing similar situations right now at different stages of the pandemic, it is left to us to share information on breakthroughs and triumphs across sectors so best practices can be replicated. Etuk works in the management of a Logistics and Supply Chain firm in Lagos partnered with FMCGs to deliver products to the major retail stores

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When will Africa have a rebirth? STRATEGY & POLICY

MA JOHNSON

fricans were celebrated globally on 25 May 2020. It was a day which marked the 57th Anniversary of the Organisation of African Unity (OAU). The OAU was established in 1963 and it has changed into its successor organisation- the African Union (AU) – which was created in 2002. It was an opportunity to celebrate the achievements and diversity of Africans, and to promote the unity of over one billion people of the continent. The theme of this year’s celebration is, “Silencing the guns in the context of the COVID-19.” Regarding the pandemic, report from the World Health Organisation (WHO) shows that Africa is the least affected globally in terms of the number of cases and deaths officially reported. Available statistics show that Africa has just 1.5 percent of world’s reported cases of COVID-19 and less than 0.1 percent of the world’s death. It appears these figures do not paint the full picture as testing capacity is still an issue in most African countries, according to the United Nations (UN). Widespread testing may not be possible in Africa as it is the case with some developed countries. Many African countries have barrier to mass testing for COVID-19 due to health facilities, infrastructure, personnel and funding constraints. Experts believe that if African countries are to contain the virus,

testing capacity must be expanded before rampant community spread negates the value of contact tracing. Africa will “silence the gun” in this challenging time when the continent can boast of responsible governments that are able to meet the security, emotional and physical wellbeing of the masses as opposed to select groups in the society. Before the arrival of COVID-19, most African countries were working very hard to improve their economies. But this writer had always wanted to know why many African countries are not at the threshold of economic development since attaining independence despite abundant natural, mineral and forest resources. It is a mystery which may never be understood, though Africa’s first civilisation emerged in ancient Egypt where the world’s greatest centres of learning existed. But Africa is now regarded as one of the backward continents in the world. Today, Africa is an epitome of stifling values. Good governance is not within the reach of many African countries. Addressing African leaders in 1994, former President of South Africa, Nelson Mandela is of the view that, “we must face the matter squarely that where there is something wrong in how we govern ourselves, it must be said that the fault is not in our stars but in ourselves that we are ill-governed.” Although, African economies have come up with policies to attract investors, encourage the growth of private sector and reduce state interventions, most “brilliant” ideas defined by African leaders have been destroyed largely by corruption. And most African leaders are not willing to take responsibility for the success or failure of their policies. We have seen that many African leaders are “dinosaurs” who had entrenched themselves in power for decades because of easy access to state resources. Other issues preventing Africa from

realising greatness are many. Africa is perhaps the only region where school enrolment is falling and where illiteracy is commonplace. Unconfirmed reports show that half of all children in subSaharan Africa fail to complete primary education. Many African youths are jobless and they are readily available for use to perpetrate crimes. Africa is the only region where life expectancy is falling due to diseases. Africa is lacking both skills and infrastructure to attract multinational corporations to drive it. Africa’s rapid population growth is another challenge. Population growth is a challenge because it is higher than economic growth in most African countries. The pace of urban growth has produced massive pressure on public service. The magnitude of the problems is great for most African countries to solve by themselves. So, most African countries had to resort to loans and they are weighed down by debt. While Africa is now a backwater to America and Europe, China has stepped into Africa with a “strategic partnership” agenda. Trade between Africa and China has increased. China has increased its aid to Africa, provide more concessional finance for trade and infrastructure, allow duty-free entry for many African exports and build more schools and hospitals. China accounts for about 17 percent of Africa’s debt, according to the World Bank. A team of researchers at John Hopkins University say that more than a thousand Chinese loans worth more than $152 billion have been extended to 49 African countries and their stateowned companies between 2000 and 2018. COVID-19 has increased calls for China to forgive old loans. Africans are waiting for how China will manage debts in troubled times. But Western critics have been quick to point out the drawbacks of China’s relentless advance in Africa. They argue

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As the world goes through these challenging times, Africans must take their destinies in their own hands … African leaders must convert hope into actions that will reduce poverty within the continent of Africa

that while “the West focuses upon good governance and democracy as being essential ingredients to progress, China undermines these efforts by having lucrative deals with dictators, despots and unsavoury regimes, with no strings attached, helping them to keep in power and ignoring human rights abuses.” As the world goes through these challenging times, Africans must take their destinies in their own hands. And by choosing the theme, “Silencing the guns in the context of the COVID-19,” Africa has given the world a new hope. But hope is not a strategy. African leaders must convert hope into actions that will reduce poverty within the continent of Africa. Drawing inspiration from the former UN Secretary-General Kofi Annan, “let us be careful not to mistake hope for achievement.” All said, when will African people overcome current challenges confronting the continent in order to achieve cultural, scientific, and economic renewal? Without peace and security in Africa, there cannot be development. Africa, the second largest continent after China, has enough resources to cater to the needs of its people. If Africa was to have a rebirth, African leaders without exemption must demonstrate beyond reasonable doubt that they have the capacity to change the litany of sufferings that their people have experienced over time. It is for African leaders to utilise available resources judiciously while opening doors of opportunities for jobless youths that form a large percentage of the population. This is the time for all African leaders to assert their will to dislodge any obstaclebig or small- that would stop them from bringing about an African rebirth. It takes a generation of committed leaders to build a nation. Thank you! Johnson is an author and a retired naval engineer who has passion for African development and good governance

Nigeria’s political odyssey and its monstrous democratic variant

s Nigeria not a British contraption? During the colonial era, it was Lord Frederick Lugard, a one-time governor general of Nigeria, who cobbled Nigeria’s northern and southern protectorates together for administrative convenience. And his mistress, Flora Shaw, christened the place Nigeria. Nigeria, a British creation, is a disparate political and ethnic entity. It is a nation of nations. Do we not have more than 250 ethnic, cultural, and linguistic groups in Nigeria? In Nigeria, which is a heterogeneous country, it is not unexpected that the issue of ethnic rivalry will pose a great threat and challenge to the peaceful co-existence of the people(s) of Nigeria. Nigeria, a heterogeneous country, has had its fair share of ethnic conflicts. Even before our country became a sovereign nationstate, the northern people threatened to secede from Nigeria in its nine-point programme in the 1950s owing to some problems that cropped up in the country, then. Since then, Nigeria has not known true peace and unity. The internecine Nigeria-Biafra civil war, which claimed the lives of millions of people, and caused the destruction of properties, was ignited partly by ethnic rivalries that existed among the ethnic groups in Nigeria, then. The outbreak of that gratuitous civil war was preceded by the January 1966 coup, which was labelled an Igbo coup, and the revenge and counter-coup of July 1966. Those bloody coups scuttled the progress of our democratic government, set the stage for the outbreak of the Nigeria-Biafra civil war, and heralded the entrance of the Jackboots and brass hats into our politics.

Until 1999, civilian governments alternated with military regimes in the leadership of Nigeria. The military rulers, who always branded their military governments corrective governments, did more harm than good to our dear country. For example, the military regime of Muhammadu Buhari, which lasted between December 31, 1983 and August 27, 1985, violated our fundamental human rights. Then, the Buhari-led military government enacted decrees, which had retroactive effects. And the military regime of Ibrahim Babangida, which succeeded it, fared no better. It is believed that Rtd General Babangida institutionalised corruption in Nigeria. Worst still, he truncated the democratic growth of Nigeria by engaging in endless political transition rigmarole, which culminated in the annulment of the June 12, 1993 presidential election. The cancellation of that presidential election, which was adjudged the fairest and freest election in our political annals, threw Nigeria into a political cul-de-sac. Thankfully, our country emerged from that political imbroglio not dismembered. The interim civilian government of Ernest Shonekan, which was installed to stabilise the country, was shoved aside by Sani Abacha. The dark-goggle wearing Sani Abacha epitomised kleptomania and sanguinary proclivities. He mindlessly looted our country’s financial till and stashed billions of naira in foreign banks. Twenty-two years after his death, his financial loot, which is kept in foreign banks, is still being recovered by the Nigerian government. That is a true portraiture and magnitude of his pillage of our economy. In addition to his crime of larceny, he killed www.businessday.ng

top members of NADECO, who were fighting for the revalidation of the stolen political mandate of MKO Abiola. It was alleged that the Abacha goons liquidated Kudirat Abiola, Pa Alfred Rewane, and others. So, the rump of NADECO dispersed, with some activists going into exile while others went underground. Thankfully, in 1999, democratic governance berthed in Nigeria, again, after the unexpected death of Sani Abacha and the return of the military interlopers to the barracks. Now, we have enjoyed and experienced twenty-one years of unbroken democratic rule in Nigeria, with one political party seamlessly transferring political power to another in an atmosphere of peace. That itself is a milestone in our political annals. But, has the existence of democratic rule in Nigeria since the dawn of the fourth republic transformed Nigeria to a technologically and economically advanced country and an oasis of peace and unity? Since the dawn of the fourth republic in 1999, our successive civilian leaders, a majority of whom belonged to the PDP, frittered the opportunities given to them to re-make Nigeria. Chief Olusegun Obasanjo, who was helped to power to placate the indignant Yoruba people over the annulled June 12, 1993 cancelled presidential election, couldn’t take Nigeria to an unprecedented economic and technological height as we had expected and hoped. Rather, sadly, he sullied his reputation by trying to extend his stay in office beyond the constitutionally approved two-terms through an underhand means. And Umaru Musa Yar’adua, who died in office after leading Nigeria for a short while,

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CHIEDU UCHE OKOYE evinced the tendencies of a good and able political leader. He could have achieved something tangible and commendable had he not died. But, Goodluck Jonathan, who completed the remainder of Umaru Yar’adua’s first term in office, and ruled for one term, was grossly unprepared for the challenges and rigors of political leadership. Under his watch, corruption thrived in Nigeria because he was not committed to eradicating it from our body-politic. More so, tardiness and indecisiveness marked and marred his leadership of Nigeria. Not unexpectedly, Muhammadu Buhari trounced him to become our president in 2015. President Buhari, who was perceived as Nigeria’s political Messiah before his assumption of office, has failed to live up to our expectations. His occupation of the highest political office in Nigeria has led to his demystification and the unravelling of the mystique woven around him owing to his inept leadership of Nigeria.

Note: the rest of this article continues in the online edition of Business Day @https:// businessday.ng Okoye, a poet, wrote in from Uruowulu-Obosi, Anambra State08062220654

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BUSINESS DAY

Tuesday 02 June 2020

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Digital financial inclusion in Africa (3): Will Nigeria’s payment service banks fill the gap?

Rafiq Raji

aggard West African countries are now considered the new growth markets. In 2012, Nigeria aimed to bank over 80 percent of its adult (15 years or older) population by 2020. Despite myriad initiatives in this regard, like microfinance banking, agent banking, tiered Know-Your-Customer (KYC) requirements and mobile money operations, only about 60 percent have been financially included. In furtherance of its 2020 objective, the Nigerian central bank announced guidelines for so-called payment service banks (PSBs) in October 2018. In this regard, telecommunications companies and other non-bank firms would be allowed to provide financial services along set parameters, with licenses issued from about a year later. Payment service banks would be able to provide almost all of the range of financial services except giving out loans, trading foreign exchange outside of payments and remittances and underwriting insurance. The major policy shift, however, is that non-bank or non-financial institutions can be PSBs. There are currently three approved PSBs (at the time of writing), with much more likely in the near future. Much of the excitement around PSBs revolves around mobile telecom firms, which have as much as 184 million active subscribers, about 92 percent of the country’s estimated 200 million people.

This is fundamentally why there is much enthusiasm now that the remainder of Nigeria’s still significantly unbanked adult population would finally be formalised into the financial system much quickly and easily. But would that really be the case? After all, previous initiatives proved to be disappointing. Besides, bank-led regulatory models, which Nigeria and many other African economies have adopted, have not been found to be similarly successful as telecoms-led ones. And even as the Kenyan case shows that digital lending is fraught with myriad risks, would the financial inclusion objective not be constrained if PSBs are not able to give out loans? I proceed to answer these questions. My analysis (see link in footnote for details) suggests payment service banks may not necessarily be offering anything that banks do not already provide via the same channels. Besides, DFS users tend to already have a bank account or formal relationship with a financial institution. And with the rules more favourable to banks, PSBs might find it hard to compete. Still, while Nigeria has a highly concentrated banking industry, with 7 banks controlling more than half of the industry’s assets, its HerfindahlHirschman Index (HHI) of less than 800 suggests the industry is competitive. The country’s digital infrastructure is also above average, with internet spread and costs quite robust. Digital identification numbers are not yet in place. But the banking industry already has a system in place called “bank verification numbers” (BVNs) for its own use. And KYC requirements have since been relaxed for greater financial inclusion; albeit the evidence suggests this has not spurred more activity as hoped or at least not at the desired speed. With more than half of the Nigerian population living below the national poverty line, low

income is clearly a binding constraint on greater financial inclusion. Financial and digital literacy levels are relatively low as well. There is also the issue of low trust in the providers of financial services in general. High fraud incidents across all payment channels have been evidenced, for instance. In light of these identified binding constraints, the key question is then whether PSBs are the solution. Clearly not. Yes, mobile telecom firms also have their biometric database, with more registrants than in the banking system. But if they are not offering something significantly different from banks, with potential customers likely already having a bank account, they are not likely to help achieve the authorities’ financial inclusion objectives. PSBs would have a better value proposition

if they were allowed to make loans, however. Thus, already licensed PSBs should probably make the case to the authorities to be allowed a broader bouquet of services. Firms looking to venture into the sector should probably wait till the regulations allow for greater value-add. Edited version of article was first published by Nanyang Business School’s NTU-SBF Centre for African Studies. References & figures available via link viz. https://nbs.ntu.edu.sg/Research/ ResearchCentres/CAS/Publications/Documents/NTU-SBF%20CAS%20ACI%20Vol.%20 2020-21.pdf “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @DrRafiqRaji)”

Entrepreneurs: Overcoming business failure concerns

he high failure rate of start-ups and SMEs in Nigeria, give a bleak picture of the sector’s potential to contribute significantly to job creation, economic growth and poverty reduction. The big question is why do businesses fail so easily? This could be adjudged to the fact that most of the SMEs especially the micro-businesses are unstructured and operate informally in the country. Nonetheless, when these businesses are in the failing path the entrepreneur or SME operator is unaware of it happening, until it is often too late. The survival of SMEs is even a bigger worry this time because of novel coronavirus (COVID-19) related negative impact, harsh business environment, insecurity among others. With the pandemic, virtually every aspect of our lives is affected, with a significant adverse impact on trade, investment, business sustainability, and employment generation. The primary objective of this article is to present the causes and predictors of the failure of these SMEs in the country. In the context of this article, the term failure means any form of closure, either through bankruptcy, liquidation, prevention of further losses, abandon and re-starting another business, and/or due to personal choice (such as early retirement). Small businesses in the context of this article is defined based on the number of employees in a business entity. Therefore, small and medium enterprises (SME) is a business employing 1 to 200 persons. However, micro business is defined as entities employing 1 to 9 persons and small businesses employ 10 to 49 persons. In a similar vein, medium enterprises are businesses employing 50 to 199 persons. All businesses that employ from 200 persons and above are termed as big or large enterprises. It is imperative to state that business failure is the last stage of an organisation’s life cycle. The failure of SMEs or any business organisation is an event which can produce substantial losses to creditors, stakeholders, and/or stockholder. While there is multitude of conditions and reasons that can result into business failure, the key predictor of SMEs’ failure and death of businesses is the business environment.

Nigeria like most African countries lack basic infrastructure and action plan for businesses to thrive conveniently and the environment is a harsh one for businesses especially start-ups. Even though small and medium-sized enterprises (SMEs) have been proven to be a catalyst for economic development in countries all around the world, this is not entirely the situation in Africa including Nigeria. Sadly, the prevalence of business failure usually impacts negatively on national development and growth of any nation. The prevalent business failure in Nigeria could be one of the major setbacks to economic growth and high unemployment rate in the country. Records reveal that SMEs are the largest employers of labour globally and if this vital sector suffers failure predominant, then the level of unemployment in the country might not abate. From observation around, especially in Lagos State, the economic nerve centre, and SME hub of the country, only a fraction of new businesses survives for the first five years and only one-third of new businesses can survive for 10 years. According to Bloomberg, 8 out of 10 entrepreneurs who start businesses fail within the first 18 months, which is a whopping 80 percent business failure rate. In addition, it is estimated that the failure rate of SMEs in Nigeria is as many as 80 percent within the five years of operation according to findings of Stanbic IBTC. Experts also corroborate these assertions saying about 80 percent of Small and Medium Enterprises (SMEs) in Nigeria fail within the first five years of their existence due to lack of experience and other wrong business practices. The anticipated catalyst to this high rate of business failure in Nigeria is the COVID-19 pandemic with the current realities. We are likely to witness an extremely high post-pandemic business shut down, job loss, and a persistent decrease in outputs and revenue expectations of SMEs in Nigeria. However, government can do more by rolling out measures to support this SMEs especially through the COVID-19 disruptions. With government intervention high number of business failures can

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be forestalled because the pandemic is already impacting negatively on distribution and supply chain of businesses. Nonetheless, even though the environment is a critical factor in the ease of doing business, a harsh and difficult one exists in this country with or without COVID-19. Government action plan and focus is imperative to develop this sector which is widely accepted as economic growth driver. Recently, a survey conducted on small business in Lagos State indicated that the failure predictors is in two broad categories, namely internal or managerially controllable causes and external or noncontrollable causes. The internal factors the participants of the survey cited are (1) Financial resources like funding inadequacy, lack of profit, poor accounting practice, cash flow inadequacies, lack of viable investment opportunities, and low or no source of income. (2) Physical resources like the company location, abysmal culture, old equipment, and technology issues. (3) Human resources like managerial inadequacy, poor staffing, poor morale and customer dissatisfactions. Other factors depend on business leaders’ decisions. Example of this includes no management structure, no differentiation of ownership and management, no succession plan, unprofitable business model, lack of uniqueness, poor knowledge of the operating sector and its value chain, value dysfunctional, even rapid growth and over-expansion was cited, and not in touch with customer needs, etc. These factors can easily be forecasted with some level of reliability, and therefore, a company has a good chance of reducing this form of business risk. The company leadership usually have control over internal factors, what is required is just adequate managerial skills and continuous education to set things right. However, findings indicated that this important feature is usually missing in the SME operators and business leaders. The external or noncontrollable causes of small business failure as perceived by a sample of small business owners and managers surveyed are as follows: government policies, natural factors infrastructure failures and deficits, stiff

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Timi Olubiyi

competition, rising costs of doing business, social, legal and political changes, even common macroeconomic factors such as business cycles, recessions, insecurity, government debt, inflation, high taxation, exchange rates, highinterest rates, excessive regulations, and/or a lack of interest from the public in the business’s offerings are just a few. The power (electricity) situation in Nigeria has been a great cause for concern for businesses, investors, and citizens at large and is equally significant in the overall performance of the economy. These infrastructure gaps and weak macroeconomic factors can be blamed on the depressed economy and prevalent business failure in Nigeria. Because a depressing economy will impact negatively on firm’s sales, which in turn negatively affect firm’s business continuity. It is imperative to state that these macroeconomic factors and external causes cannot be controlled or forecasted by entrepreneurs and SME operators. Consequently, it poses a big risk to businesses unless government intervene decisively and give the needed policy responses. This is the big prayer of all SMEs and entrepreneurs in the country.

Note: the rest of this article continues in the online edition of Business Day @https:// businessday.ng Dr. Olubiyi is a prolific investment coach, Chartered Member of the Chartered Institute for Securities & Investment (CISI) and a financial literacy specialist. He can be reached on the twitter handle @drtimiolubiyi and via email: drtimiolubiyi@gmail.com,for any questions, reactions, and comments.

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Tuesday 02 June 2020

BUSINESS DAY

EDITORIAL Frank Aigbogun

Bold step on executive pensions in Imo State

editor Patrick Atuanya

Repeal of pensions for politicians progressive

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 FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai COPY SALES MANAGER Florence Kadiri DIGITAL SALES MANAGER Linda Ochugbua GM, BUSINESS DEVELOPMENT (North)

mo State voted for progressive politics on Friday 22 May with the passage into an Act of the Bill repealing pension allowances and gratuities for former governors, deputy governors, speakers, and deputy speakers. In giving assent to the Bill from the Imo State House of Assembly, Governor Hope Uzodinma remarked on how the previous law contravened the 1999 constitution and lacked prudence. We commend the courage and wisdom of the Imo State Executive and Legislature working together for a good cause. The Imo State Governors Pension and Privileges (Repeal) Law No 8 of 2020 repealed Law No 5 of 2007, No 7 of 2011 and No 9 of 2017. Imo State traversed a backand-forth route to this position. Politicians of the Fourth Republic introduced the executive pension law in 2000. It rewarded the Governor and the Deputy Governor. In 2007, the Legislative arm wondered why the

provision did not extend to them. They then added the Speaker and Deputy Speaker to the beneficiaries of executive pensions. In 2017, power tussles between Governor Rochas Okorocha and the Speaker of the State House of Assembly could not stop another change and addition to the law. The House of Assembly included themselves and provided for payment of N100,000 monthly to anyone who had served in the Assembly. The phenomenon of legislation that rewards former public officials with unearned remuneration in executive pensions is a sore on the conscience of the political class. Many states passed such laws actuated by the base motive of greed. They subverted the ordinary meaning of pension to continue to feed off the trough of public office. The provisions were wasteful and obscene. It also placed enormous burdens on the resources of the states. Pensions are significant features of working life. Section 173 (1) of the 1999 Nigerian Constitution as amended provides that pensions of

the Federal public servants shall be reviewed every five years or together with any Federal Civil Service salary reviews. The recipient must have worked for a minimum of ten years and be up to 45 years old. Wikipedia and legal authorities assert that, “a pension is a fund into which a sum of money is added during an employee’s employment years and from which payments are drawn to support the person’s retirement from work in the form of periodic payments.” Nigerian politicians changed the nature of pensions into a benefit for their service in public office, usually for no more than eight years. Changes in pension administration caught up with and exposed the irrationality of executive pensions. Nigeria moved with the Pension Reform into a contributory pension scheme whereby employees and their employers contribute to a pool of funds. The contributory pension scheme ensures that there are funds for each pensioner stacked up over the years of service. The pensions awarded to former public officials are defined benefits

with no contribution element. They relied on drawing from the resources of the state. With the growing number of exes this and ex that, the bill keeps growing. Pensions are usually also paid for lifetime employment of an average of 35 years, not for political appointments of eight short years. It would be interesting to find out from Imo State the savings they would make from the repeal of the obnoxious and greedy legislation on executive pensions. There are many other areas of waste in our various states. We call on other states to follow the example of Imo State. Zamfara State was among the first to repeal these unwanted laws. Others have remained recalcitrant. Lagos State ranks among those with an executive pension provision that reeks of avarice and irrationality. The provisions are such that the former executives earn more than the serving officers. Do away with these unconstitutional, irrational, and expensive executive pensions. Prudence such as the coronavirus pandemic imposes demands no less.

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Tuesday 02 June 2020

BUSINESS DAY

COMPANIES&MARKETS MANUFACTURING

Nampak swings into R2.4bn loss writes-down operations in Nigeria, Angola as lockdown stifle sales OLUFIKAYO OWOEYE

he double whammy effect of covid-19 and plunging oil price has forced Africa’s largest packaging company, Nampak to writedown its businesses in two countries. The group wrote down businesses in Nigeria and Angola countries by R3bn, an amount that is almost four times its market capitalization of about R770m, noting that profits were also at risk from South Africa’s ban of alcohol sales under lockdown. In its six months result for the period ended 31st March, the group swung into a loss of about R2.4bn from profit of R653.3m previously. Nampak revenue fell 17percent to R6.5bn, with the group already facing tough operating conditions,

including in SA, where festive season sales were lower than expected. Nampak said the outlook in Nigeria and Angola in coming months was gloomy, and given the collapse in oil price, it was possible these countries could feel the effect of foreign-exchange shortages, which would weaken their currencies. “In order to protect the group’s balance sheet and in the light of anticipated foreign currency shortages resulting from the lower oil price, raw materials will only be supplied to both Angola and Nigeria to the extent that these businesses can obtain the required foreign exchange to fund the importation of raw materials,” the group said “As a result of Covid-19 and negative macroeconomic conditions, it is expected that future market growth

will be lower than previous expectations. It is expected that demand for general metal packaging will remain under pressure for the rest of the year,” the group said Nampak sold its Nigerian paper packaging unit last year as part of plan to shrink its portfolio and boost returns. It however retained its aluminum and tin canning products and services in Nigeria, on the back of a solid growth in demand for beverage cans in the country. Pre-coronavirus period shows that the company’s core beverage can business continued to perform well in Nigeria, with double-digit market share gain and increased sales volumes, an indication that expansion on its production facility was imminent which would further increase Nampak’s ability to tap into the fast-growing Nigerian demand for cans.

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CBN sees economic recovery by Q3 says interventions have cushioned COVID-19 shock …lending to real sector up 20.45%, NPLs declined 6.58% OLUFIKAYO OWOEYE

he monetary policy committee of the Central Bank has predicted that Nigeria’s economy would avoid a recession by the third quarter on the back of various interventions taken by both monetary and fiscal authorities to mitigate the combined effects of the COVID-19 pandemic and oil price shock despite projections by both the IMF and Federal Government that the economy would contract in 2020 by -3.40 per cent. First quarter GDP figures released by the National Bureau of Statistics showed that Africa’s largest economy grew slower, with real GDP printing 1.87percent year-on-year compared with 2.55percent year-on-year in the previous quarter and 2.10percent yearon-year in Q1-2019. The oil sector with 9.5percent contribution to GDP rebounded, growing by 5.0percent year-on-year (compared to -1.50% in Q1-19). On the

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other hand, output in the nonoil sector, which contributed 90.5percent to GDP printed a disappointing 1.55percent year-on-year growth in Q1-20, a 95bps lower than the rate recorded in the first quarter of 2019, as well as 71bps lower than the growth rate achieved a quarter ago. According to the apex bank, under its N100 billion Healthcare Sector Intervention Fund, it has approved and disbursed a total of N10.15 billion for some projects for the establishment of advanced diagnostic and health centres and the expansion of some pharmaceutical plants for essential drugs and intravenous fluids. Also, as part of the N1trillion intervention targeted at Agriculture and Manufacturing firms, CBN has further disbursed N93.2bn under the Real Sector Support Fund to boost local manufacturing and production across critical sectors. This consists of over 44 greenfield and brownfield projects. @Businessdayng

The apex bank also noted that it has approved N10.9 billion to 14,331 beneficiaries under the N50 billion Targeted Credit Facility for households and SME’s, out of which N4.1billion has been disbursed to 5,868 successful beneficiaries. The committee gave a clean bill of health to the country’s banking system as shown by the increase in total asset by 18.8 per cent and total deposits by 25.52 per cent year-on-year. The performance of the Loan-to-Deposit Ratio (LDR) policy which was introduced in July 2019 showed that total credits increased by N3.1 trillion or 20.45 per cent, with manufacturing, retail & consumer loans, general commerce and agriculture as major beneficiaries. The Non-Performing Loans (NPLs) ratio decreased to 6.58 per cent at end-April 2020 compared with 10.95 per cent in the corresponding period of 2019 due largely to recoveries, write offs and disposals.

Monday 06 April 2020

BUSINESS DAY

COMPANIES&MARKETS Leadway Assurance holds virtual AGM, pays N38.5bn claims in 2019

MODESTUS ANAESORONYE

eadwayAssuranceCompany Limited has held its 48th Annual General Meeting (AGM) via a virtual reporting an increase in claims paid to its policyholders, from N33.9 billion in 2018 to N38.5 billion in 2019. The company also posted stronger balance sheet size which enlarged by 26 percent from N312 billion recorded in 2018 to N394 billion in 2019, just as Gross Written Premium (GWP) of N90.6 billion was recorded in 2019, an increase of 4 percent from N87.5billion in 2018. The company attributed the growth in its GWP to a boost in its composite business, specifically via the Specialty Life portfolio. Speaking during the company’s AGM, Tunde HassanOdukale, the managing director/CEO, reiterated Leadway’s continued commitment to its policyholders through prompt claims payment, as the bed-

rock of the company’s business. With this, the company has now paid over N136 billion in claims in the last six years. “We continue to demonstrate our commitment to our loyal customers through our customer services delivery channels, underpinned by a motivated team, outstanding brokers and agents, innovations and technology. “I am proud that we have transmitted the principle of devoted customer-focus into a five-decade legacy that would continue to be the compass with which we steer the next half-century of operational excellence. With our balance sheet strength and technological innovations, we are confident of maintaining market leadership, whilst deepening insurance penetration to our youthful African population,” Tunde Hassan-Odukale said. In his remark, Martin Luther Agwai, chairman, Board of Directors, acknowledged the outstanding strategic lead-

ership qualities, vision, and the prudence the erstwhile managing director, Oye Hassan-Odukale who retired from the company after 38 years of dedicated stewardship. He welcomed Tunde Hassan-Odukale “to chart the next path and phase of growth for Leadway to become a global competitor of the next generation’s reference.” He maintained that the company is in pole position to meet the new regulatory requirements for recapitalization of the industry. “The prudence of the company’s Management over the years has prepared us for the regulations of today where we are in a good position to comply with the minimum share capital requirement without the exigency for any call on shareholders. I am also happy to inform you that the regulator has approved the company’s recapitalization plan and extended full compliance timeline till 31st December”, the Chairman added.

L-R: A Shareholder of Seplat Petroleum Development Company Plc, Boniface Okezie; Chief Executive Officer, SEPLAT; Austin Avuru, chairman, SEPLAT, Dr. A.B.C. Orjiako; and Solomon Ikeanyi both are Shareholders, at the 7th Annual General Meeting of SEPLAT held in Lagos recently.

StarTimes enhances digital TV access with 8 new channels

eading Digital Pay TV provider, StarTimes has announced the introduction of eight new additional channels to its bouquet in a bid to further enhance viewers’ experience and attract more households. The new exciting, educative and entertaining channels will focus on news, fashion, live-action, and children’s programmes for the delight

of television viewers across Africa. The new digital television channels include Sky News, Film Box, Novelas, Fashion Box HD, Gametoon, Toonami and CBeebies. “As a listening organisation, part of our aggressive expansion drive is geared towards fulfilling our promise to deliver an affordable and unmatched entertainment to every Nige-

rian home,” the company said on the development. “This is one of our little way of showing appreciation to our loyal customers by giving them more value at these unprecedented times when most people are still working from home due to the pandemic. We want to ensure people have access to quality entertainment with rich and diverse content,” it said.

CWG records profit before tax of N634m in 2019

WG Plc., a Pan-African Information and Communications Technology Company and Nigeria’s largest system integration company has released its audited fullyear financial statement for the period ended December 2019. The results showed positive improvements from the 2018

audited financial statements The company’s gross revenue increased by 23.4 percent to N9.6 billion in full year of 2019, from N7.8billion in 2018. However, Net Assets grew by 67.4 percent to N192million from N115million in the previous year. The growth in revenue www.businessday.ng

and profit was achieved with a reduced operating expense of 23 percent over the 2018 financial year. CWG Plc closed 2019 with positive earnings before interest, taxes, depreciation and amortization, at N892 million, profit before tax of N634million and ended that year with a Profit after Tax of N73 million. https://www.facebook.com/businessdayng

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Tuesday 02 June 2020

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Despite COVID-19, Ugwuanyi maintains high throttle on infrastructure development in Enugu Regis Anukwuoji, Enugu

espite the fight against coronavirus ravaging the whole world, which has forced most state governors to drop development projects, Enugu State Governor Ifeanyi Ugwuanyi has insisted on doing new project. The recent project was the inauguration of 13-kilometre Nike Lake Junction linking Harmony Estate to Amorji Nike and Adoration Centre through Orie Emene Road started and complete by this administration, speaks volume of the development plans of the governor. The new road, which passed through the thick forest of Umuchigbo community in Enugu East Local Government Area of the state, will not only help to decongest the holdups experienced in Abakpa but also increase the economic development in those areas. The virgin road has lined drains and five river crossings, including culverts and bridges, linking busy and thickly populated Abakpa Nike with Emene satellite town. Inaugurating the road, Governor Ugwuanyi stated that the project “was conceived by my administration as the first bypass to ease the traffic flow in Enugu East Senatorial Zone including the interstate vehicular move-

ments on the recommendation of the Enugu State Urban Renewal Committee”. The governor said that the bypass opens up development at the Harmony Estate and also provides access to the Akanu Ibiam International Airport, Enugu currently undergoing massive rehabilitation. He added that the completion of the entire road project was consistent with his administration’s procurement policy of ‘start-to-finish’, noting that “the stretch from Airport roundabout to Eke Obinagu in Emene was also duly completed and inaugurated by my administration, elevating the status of Emene and its environs, hitherto a semi-urban city, to now an urban city within Enugu Capital Territory”. The governor pointed out that the project will help to inflate the local economy and open a new economic corridor through stimulation of commerce and creation of employment/job opportunities for the teeming youths. The event was witnessed by the Speaker of the House of Assembly, Edward Ubosi, the Chief Justice Ngozi Emehelu, the member representing Enugu East/Isi-Uzo Federal Constituency, Cornelius Nnaji, the PDP state chairman, Augustine Nnamani and the Enugu East Council chairman, Alex Ugwu, among others.

Edo 2020: Obaseki presents re-election bid form to Buhari Tony Ailemen, Abuja

overnor Godwin Obaseki of Edo State on Monday formerly presented his re-election bid form under the All Progressives Congress (APC) to President Muhammadu Buhari, opening up grounds for an epic battle for the Edo governorship election, coming up in September this year. Obaseki is currently engaged in re-election war with his erstwhile political ally and national chairman of the APC, Adams Oshiomhole. The visit, coming ahead of the governorship primary election of the party, scheduled for this month, is seen as a smart move to impress on President Buhari that he would contest the election on the platform of the party, contrary to speculations that he might have dumped the party. But speaking with State House correspondents on the purpose of his visit, Governor Obaseki who described Buhari as “father of

the Party,” said “it will be wrong to assume or take things for granted, so I have to formally inform him.” The governor also said over 300,000 of Edo indigenes had been screen for COVID-19 out of the 500,000 targets set by the government, and pledged to ensure the killers of the 100-level student of the University of Benin, Uwaila Omozuwa, were tracked and brought to justice. “Well I came to see the President to formally inform him of my desire and intention to seek re-election as Governor of Edo State on the platform of the APC in the forthcoming gubernatorial election. Even though President Buhari is a father of our nation, it will be wrong to just assume or take things for granted so I have to formally inform him of my intention to re-contest and solicit his support in my gubernatorial bid.” Obaseki told journalists that he had done well for his people and therefore, deserved another term of office. “Well I believe having been

Governor of the State for three years and the jury is out, you can check with Edo people, whether as Governor I have served creditably well. The consensus is that we have done well as a government and that people will like us to continue with the laudable programmes and policies which we have undertaken under the last three years. “If you recall when I got into power as a Governor, one thing Edo was known for was human trafficking. We had over 30,000 of our citizens, who were in Libya, waiting to cross over to Europe. Today, in less than three years, we have stopped it. “We are celebrated globally, across the continent in terms of the reforms we have undertaken in basic education in this country. Those children, I can’t abandon them; we can’t stop what we have achieved to date. So, based on that, we believe that because of the connection which we have created with our people, we have no doubt in our minds that we will win any

election, direct or indirect elections in Edo State,” he said. Speaking on the path of peace for the state, the governor noted with dismay that the political tussle in Edo State was not from within the state but coming from outside. He described his fight with Adams Oshiomhole as “unfortunate situation,” but said he was ready to reach a truce with Oshiomhole. “It is unfortunate that he is taking the position he has taken; I believe that he was not properly guided. I am his governor and it is my responsibility to seek peace for my state and with all my citizens. I will continue to strive for peace, I will continue to pursue peace, seek the interest of our people and I am open, that we should talk about how to move things forward. The relationship is still frosty but I am doing all I can to try and make it warm just for the sake of Edo people. I am committed to whatever it will take to have peace and not to lose lives in Edo, within the law, whatever I can do that is constitutional, I will do,” the governor said.

Terminal operators ready to provide scanners at port for seamless operations – Akinola AMAKA ANAGOR-EWUZIE

orried by the delay in cargo clearance at the nation’s seaports, terminal operators have expressed willingness to provide functional scanners to drive seamless cargo examination and enhanced efficiency service delivery at the port. This is owing to the fact that lack of functional scanners at the ports has resulted to 100 percent manualinspectionofgoodsaswell aspaymentofhighdemurrageand storage charges by importers. Bolaji Akinola, spokesperson of Seaport Terminal Operators Association of Nigeria (STOAN), gave this indication while speaking on the theme ‘Port Economics: Are Nigerian Ports Expensive?’, as a guest on an online programme by Maritime TV called Live Conversations. Though, the provision and management of scanners fall under the purview of Nigerian Customs Service (NCS), Akinola said terminal operators had the capacity to provide scanners if engaged for such services by the Federal Government. “If the government wants terminal operators to provide scanners, the operators can provide quality scanners but that would be a different arrangement entirely. Terminal operators can provide and manage functional scanners for the nation but that is not part of the current responsibility of the port concenssionaires,” he said. According to Akinola, the absence of functional scanners at the nation’s ports and its

consequent 100 percent physical examination of cargoes by Customs officials have thwarted gains of the government’s Ease of Doing Business agenda. “It is unfortunate that scanners brought in by the destination inspection service providers have all packed up. However, it falls under Customs purview and they seem happy carrying out 100 percent physical examination, which results in delayed cargo clearing at ports and increase the cost of demurrage as well as storage charges. It is important to note that this physical inspection is against the Ease of Doing Business agenda the government is promoting,” Akinola said. On cost of doing business at the port, Akinola, who decried the impact of multiple Customs checkpoints and interception of already released cargoes, said that Customs import charges account for 70 percent of the total Nigerian port charges in cargo evacuation. He further listed cost of shipment or freight cost, trucking cost and Customs duties as the three major issues that result to high cost of doing business in Nigerian ports. “The freight cost to Nigeria from Europe or China is one of the highest in the region. It is cheaper to get a consignment from China to Ghana, than China to Nigeria. When you drill further, you would find the issues responsible for this high cost. Unfortunately, most people have refused to take cognizance of the issues which were also highlighted by a recent study conducted by Lloyds,” Akinola said. www.businessday.ng

Udom Emmanuel, governor, Akwa Ibom State, inspecting four utility ambulances for COVID-19, with some members of his cabinet at his office complex in Uyo.

Edo: Surviving, thriving beyond COVID-19

do State governor, Godwin Obaseki, has said the state has introduced a Health Insurance scheme for people as well as laid emphasis on training of health care workers in the state. Speaking at a webinar, tagged, Edo Covid-19, organised by Edo State Covid-19 Relief Committee in collaboration with Trade and Investment Consultants Limited (TICL) UK, and Edo State Investment Promotion Office (ESIPO), Governor Obaseki said the training was to aid the state government target the screening of a minimum of 500,000 people per day, with a governance strategy focused on communication and with lessons learnt from the Lassa Fever and Ebola pandemic episodes. Governor Obaseki said down the line, success on what had been achieved would be measured within a framework of governance strategy, focused on Logistics Incident Management, Facilities Management, Security and Communications. Speaking on the same plat-

form, Chikwe Ikweazu, directorgeneral, Nigeria Centre for Disease Control (NCDC), said the NCDC had had a good working relationship with the Irrua Hospital and the Edo State government. He advised that Covid19 problems cannot be solved in a hurry, while commending the Edo State government, he asked that all state governments in Nigeria look closely into building better health infrastructure for the future with a focus on training and re-training post COVID-19. He pointed out that there are three testing centres in Edo State making it, the first outside Lagos State to have more than one centre in the country. Iyabo Masha, a Global Economist with the IMF and a Member of the Presidential Economic Advisory Council (PEAC) requested Edo State Government to address the immediate issue of Public Health, by developing a comprehensive public health strategy while also working on a revised 2020 budget, focusing on, immediate, medium

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and long term support for businesses and people of Edo State. In the long term there has to be a strategy for developing the SME productive economy. Looking at the Investment opportunities that COVID-19 has enabled in the state, the Commissioner for Wealth Creation, Co-operatives and Employment, Felix Akhabue, said there are opportunities for Investors in Agro- Processing, Oil and Gas and Industrial Parks. He also said that the State Government is focused on training and access to funds as well as encouraging micro credit schemes, which attracts single interest rates. Nisan Abdulkader, Vice President, Africa, at WAVTEQ, UK, advised that sustainability does not happen overnight and implored government to develop capacity with the private sector, focusing more on digital marketing which is more cost effective and has a wider reach. Advising that the State Government and Investors should focus @Businessdayng

on development of sweet corn for which Edo State is the only producing state in Nigeria, Victoria Madedor, Head of Agri-Business in the Bank of Industry, also highlighted opportunities in pineapple production in Ovia South West. She also advised that stakeholders in the Industry should endeavour to avoid post -harvest wastage. This was further reiterated by Obas John Ebohon, Director of Internationalisation & Professor of Sustainability & Environmental Law, who advised that for sustainable growth, Edo State Government should build its strength on Agriculture and Industry with a strategic sustainable growth concept focused on outward looking and an import substitution approach. Turning to the Health session, the State Commissioner for Health, Patrick Okundia, said social distancing rules had been put in place, wearing of masks is now a requirement for everyone and creating awareness has been given top priority by the State Government.

Tuesday 02 June 2020

BUSINESS DAY

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NDEP donates N25m COVID-19 relief items in Rivers

iger Delta Exploration and Production plc (NDEP), an independent integrated energy firm, has donated N25 million worth of COVID-19 relief items to the Rivers State government as well as its host communities towards mitigating the effects of the pandemic. Rivers State government received a total of N15 million worth of COVID-19 relief items while NDEP subsidiary, Niger Delta Petroleum Resources Limited’s (NDPR) host communities of Ogbele, Oshiugbokor, Obumeze, Otari, Omaraka and Rumuekpe received a total of N10 million worth of relief items. Among the COVID-19 relief items donated by NDEP to the Rivers government are five units of parameter monitors (10”-12”), 10 units of infrared body temperature guns, 4,000 units of hand sanitizers, 150 packets of nose masks and 10 units of oxygen concentrators. For the host communities, the relief items comprised bags of rice and vegetable oil, which were meant to support families in the six

host communities amid the lockdown caused by the pandemic. According to Layi Fatona, managing director of NDEP, the company’s donation to the state is to complement the various efforts being made by Governor Nyesom Wike’s administration to mitigate the spread of COVID-19 in the state. “We believe that the battle to defeat COVID-19,” Fatona said, “is one that requires our collective support, and commend the proactive steps your administration has taken so far to protect lives in the state since the outbreak of the pandemic.” He also pledged NDEP’s continued support to the state in its quest to effectively contain the pandemic and wished the state total success in its efforts. The donation to the host communities is to assist families in the communities with coping with the economic effects of the pandemic as well as in furtherance of the great relationship that had existed between the company and the communities, he said.

Nigeria’s sugar imports rise by 5% after 2yrs’ consecutive decline BUNMI BAILEY

igeria’s sugar and sugar confectionery imports rose marginally year-on-year by 5.1 percent in 2019, after recording a consistent decline since 2016, a BusinessDay analysis shows. According to data from the International Trade Centre (ITC), a multilateral agency that serves as a focal point for trade-related technical assistance, importation of sugar steadily reduced by 23 percent to $619.3 million in 2017 from $804.5 in 2016 and by 16 percent to $519.9 million in 2018, but rose by 5.1 percent to $545.7 million in 2019. “The international sugar market is really tight because Brazil and India are not producing much unlike before, in which reduced production resulted in

price pressure,” Ayorinde Akinloye, a consumer analyst at CSL Stockbrokers, said. Nigeria, one of sub-Saharan Africa’s largest importers of sugar, imports its raw sugar from countries such as Brazil and India. According to Food and Agriculture Organization (FAO), Sugar Price Index averaged 190.3 points in December 2019 from 168.6 points in September. “The rally in international sugar price quotations was prompted by rising crude oil prices, a situation that encouraged Brazil’s sugar mills to use more sugarcane supplies to produce ethanol instead of sugar, which resulted in reduced sugar availability in the global market,” the FAO report stated. In the crop year of 2018/2019, Brazil produced approximately 29.5 million

metric tons of sugar, a decrease of more than 24 percent in comparison to the previous year. This is the first time in the indicated period when then Brazilian annual sugar production stood below 30 million tons. Emmanuel Ijewere, vice president, Nigerian AgriBusiness Group (NABG), noted that sugarcane production in Nigeria had a little challenge the year before which now cascaded into last year and that created a situation where there was a shortfall of the level of sugar. “But I believe that Nigeria will import less this year because the COVID-19 has adjusted and reset a number of things. Nigeria will not be importing sugar except for specialised kinds, but a lot will be done to discourage it,” Ijewere said.

Sugar importation in Nigeria has been on a decline since 2016 till it picked up last year due to the Federal Government’s National Sugar Master Plan (NSMP), a policy roadmap for sugar production that was implemented in 2013 with the objective to achieve self-sufficiency in sugar production, save foreign exchange on the importation of sugar and ethanol, and establishment of 28 factories of varying capacities across the country, among others. The policy provides a fiveyear tax holiday for investors in the country’s sugar added-value chain, a 10 percent duty, plus a 50 percent levy on imported sugar and a 20 percent, plus a 60 percent levy for imported refined sugar. It is aimed to produce around 1.79 million tons of sugar in 2020-23.

Kwara to cut 2020 fiscal estimates by 25% to N120bn over COVID-19 SIKIRAT SHEHU, Ilorin

oing by negative impacts of coronavirus pandemic on the world economy, the Kwara State government has declared an intent to slash the 2020 fiscal estimates by 25%, cutting the N160 billion budget size earlier prepared for the year to N120 billion. Recall that Governor Abdulrahman Abdulrazaq of Kwara State had prepared and assented to the 2020 fiscal estimates covering N85.86 billion, representing 53% as capital expenditure and N76.14 billion as recurrent expenditure, representing 47% of the total budget for the year. The governor proposed a sum of N7 billion as financial buffer, representing 4.3% of the finance sources as opening balance; N48.9 billion from Federal Accounts, representing 30.2%; N39.8 billion as Internally Generated Revenue, representing 24.5%; N45.9 billion as Capital Development Funds, Aids and Grants, representing 28.3%; N16.4 billion from Value Added Tax, representing 10.1% and

N193.3 million, and representing 0.1% as Other Receipts. But, as strategic moves towards downward review of the 2020 budget due to current economic realities, Governor Abdulrazaq declared his government’s plan to slash the state’s fiscal estimates for year 2020 from N160 billion to N120 billion, saying the plummeting prices of crude oil in the global market, leading to shortfall in the Federation Allocations to states as well as falling production capacity, outputs as well as gross domestic product, responsible for sharp downward review of the budget. Speaking at a media parley on the Review of One Year Anniversary held in Ilorin, the state capital at the weekend, Governor Abdulrazaq said the downward review of the budget would be done in such a way that the fiscal estimates would still perform critical obligations and expenses meant to achieve in the long run as industrialisation agriculture, infrastructure, education and health as well as other critical expenses would be retained.

COVID-19: Agriculture is sustainable means of economic survival - Ikpeazu GODFREY OFURUM, Aba

overnor Okezie Ikpeazu of Abia State has advised citizens of the state to embrace agriculture, which according to him is a viable and sustainable means of economic survival. He stated that his administration had, before the outbreak of COVID-19 pandemic, commenced the construction of some small agro allied industries in some local government areas, as a pilot project with plans to extend the programme to each of the 17 local government areas of the state. “With the effects of COVID-19, which has shattered most economic forecasts on a global scale, we as a people must re-engineer our plans and look towards agriculture as a viable alternative”. Ikpeazu in a message to the people of Abia State, to mark his five-years in office, as governor of

the state, explained that four local governments, namely Umuahia North, Isiala Ngwa North, Obingwa and Ugwunagbo, already have their structures ready, while definite orders had been made for equipment. “The structures for Bende and Ohafia LGAs are almost completed. This is a clear evidence of our commitment to drive our agricultural revolution, through the establishment of agro allied concerns that will provide direct and indirect jobs to our people”. Governor Ikpeazu also thanked the Abia workforce for their hard work and resilience, with an assurance that the current situation where salaries and pensions have been reasonably stabilized will be sustained, but cautioned that the downturn in the economy, occasioned by the effects of COVID-19 pandemic could create fresh challenges of cash flow for the government. www.businessday.ng

L-R: Kingsley Angaji, regional trade marketing manager, Nigerian Breweries plc; Isaac Nwabuzor, corporate affairs manager-East, Nigerian Breweries; Chiedu Ebie, secretary to Delta State government; Onyeka Okoh, human resources business partner, Ama Brewery, Nigerian Breweries, and Chukwudi Utoh, area sales manager, Delta State, Nigerian Breweries, during the donation of products, hand sanitizers and other materials to the state as part of the company’s support against COVID-19.

Stakeholders blame NERC for not enforcing law it put in place against crazy bills Olusola Bello

he penchant for continuous rolling out of crazy bill by electricity distribution companies (Discos) has been blamed on the refusal of the Nigeria Electricity Regulatory Commission (NERC) to enforce the law it made in respect of that, some stakeholders in the industry allege. Crazy bills, according to them, will always create disincentive for consumers of electricity to pay and also increase the poverty level in the country, as small entrepreneurs may not be able to meet up with the bills and consequently pack up their business. This will certainly increase the level of unemployment which the government has been trying to reduce. Powering a business appears to be the number one challenge of an average business person right now, and definitely, “paying

for what is not consumed” negates the spirit of doing business, or budgeting in a household, one of the stakeholders told BusinessDay. The NERC had capped estimated billing issued by Discos to unmetered customers. This is contained in a directive given on February 24, 2020, by the regulator to repeal the former methodology for computing estimated billing. The commission said the move was to protect customers from unrealistic and arbitrary billing, as the Discos have failed to meter most of its consumers. According to the order, the capping is for unmetered customers on single and threephase (R2 and C1) tariff class in the 11 Discos depending on the area, until a prepaid meter is installed. NERC said customers whose current estimated bills were lower than the prescribed energy cap shall remain so without any

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upward adjustment until a meter was installed by a Disco. “The energy cap prescribed by the commission shall only apply to R2 and C1 customers. All other customers on higher tariff classes must be metered by Discos not later than 30 April, 2020, failing which these customers are not liable to pay any estimated bill issued by the Discos,” it said further. But in spite of this law, the agency has failed in carrying out its supervisory role, just like it failed in some other instances where it was supposed to clamp down on them for infringes on NERC laws or rules. Efforts to reach NERC for it reaction could not be achieved as calls and text messages to the spokesperson, Michael Faluseyi, for the organisation, were not responded to. If you are waiting for NERC to intervene in your matter with Discos you are wasting your time, because that may never happen, @Businessdayng

Awolumo Olajide, who operates a shoemaking shop, says. In his reaction, Adetayo Adegbemle of Power Up Nigeria, an electricity consumer right advocacy organisation, says crazy bill is what it is. Crazy. “What people refer to as crazy billing is actually estimated billing, practice of billing consumers by the Discos that follows no logical principle.” He however says the era of estimated billing has come to an end by the NERC order capping of electricity consumption by customers, saying NERC has not been able to enforce the law for a number of reasons, one of which is lack of capacity. NERC itself, he says, is a small organisation; so shortage of hands hinders time to respond. “Apart from that, there is this apparent lack of urgency and willingness to respond to issues, especially when a simple policy review could have resolved a new challenge.

Tueday 02 June 2020

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Tuesday 02 June 2020

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property&lifestyle Early effects of Covid-19 on real estate kicks in as sector’s GDP slows to -4.75% in Q1 ENDURANCE OKAFOR

i g e r i a’s re a l estate sector growth slowed to its lowest level in two years at -4.57 percent as at March 31, 2020 as coronavirus pandemic caused an early impact on market transactions. The growth in real Gross Domestic Product (GDP) of the real estate sector, a metric which measures the total monetary value of economic activities in the entire sector was –5.69 percentage points lower than the growth recorded in the first quarter of 2019, and –1.31 percentage points relative to the -3.45 in Q4 2019. However, the latest data by the National Bureau of Statistics (NBS) shows that the -4.75 percent growth in real estate services in Q1 2020 was 4.6 percentage points better than Q1 2018 contraction of 9.42 percent, the worst growth recorded so far in the sector. According to Ayo Ibaru, COO/Director, Real Estate

Research at Northcourt, the coronavirus pandemic affected Nigeria’s property industry in the first quarter of 2020, most especially in March. “Real estate transactions were partly on a moderate level and partly declining in Q1 2020,” he explained. Like other industries in the Nigerian economy, the property sector which is yet to exit the five-quarter recession of 2016 has been disrupted by the outbreak of the deadly virus. Gripped by the uncertainty created by the coronavirus pandemic, players in the property industry were forced to adopt the wait-and-see position. As a result, many investment decisions were put on hold, pending when there is relief from the outbreak. “We had a client who wanted to buy a property, and we already finalized everything but due to the virus outbreak and currency uncertainty, he said he would want to wait for the next 90 days to watch the market,” Chidi Etoniru, Managing Partner at Joe Etoniru and Associates,

a real estate development company told BusinessDay. The outbreak of the rampaging virus also restricted both real estate investors and property developers from going ton the field for property inspections as many were observing social distancing amid the 5-week lockdown in cities like Lagos, Abuja and Ogun.

Analysis of the first three months GDP report by NBS revealed that the real estate sector’s contribution to Nigerian economy stood at 5.23 percent as against 5.79 percent recorded in the first quarter of 2019 and 6.45percent accounted in the fourth quarter of 2019. Meanwhile, before the coronavirus pandemic, ac-

Landmark assures Covid-19 Treatment Centre poses no risk to tenants, visitors CHUKA UROKO

andmark Afr ica, developer of the expansive Landmark Village, has assured its partners, clients and the general public that the Village is completely safe and poses no risk to guests and tenants. Landmark Village is home to Eti Osa Emergency Treatment Centre for Covid-19 pandemic which could be a cause for concern. But authorities of the real estate investment and development firm explain that the potential impact of the Centre was taken into consideration from the design level. “We have a world class team that has carefully considered the potential impact of the Emergency Centre on economic activities within the Landmark Village,” Paul Onwuanibe, CEO, Landmark Africa, assured at a virtual press conference in Lagos recently. The design of the Centre, according to Onwuanibe, accommodates full and independent operations of Landmark’s services while the Centre co-exists within a completely isolated area on site. “This has ensured that we can go back to normal economic activities as the lockdown is being gradually relaxed,” he assured further. Landmark Africa is a business, leisure and lifestyle property development firm

•Onwuanibe

•Ajayi

with 100,000 square metres of prime real estate across Lagos. Ahead of the eventual lifting of the lockdown directive, the company says it will continue to retrofit and upgrade its facilities to ensure that both tenants and visitors are able to carry out their activities within a safe space. The Covid-19 Treatment Centre in the Landmark Village is a joint venture project between the company and Young Presidents’ Organisation (YPO). Richard Ajayi, member of YPO steering committee and Founder of the Bridge Clinic said,“we are aware that we are in a multiuser space, which informed the design of the Emergency Response Centre.” He revealed that there were already decontamination measures in places as well as the eventual decommissioning of the structure, stressing that there was absolutely no risk of anything happening to anyone in there.

“The entire area surrounding the Isolation Centre, labelled the green area, is completely safe. “We have engaged a world class decontamination firm, Boeker Public Health Services, which shall be fully responsible for decontamination and decommissioning of the structure using WHO approved protocols,” he said. Ajayi disclosed further that it was their intention to decommission the site by early July when they expected that COVID-19 would peak and the need for isolation centres will drastically reduce. “We will donate all the equipment to build healthcare capacity in Lagos State,” he explained. As the country begins to adjust to the new reality of working alongside COVID-19, the National Centre for Disease Control (NCDC) has provided guidelines for public interactions and engagements. Already, a good

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number of tenants have resumed operations at Landmark Village, according to Onwuanibe. Some offices have opened at the Landmark Towers, and a couple of retail unit owners are now providing services to the public. “We have a no-mask, no-entry policy at Landmark; a temperature check is carried out at the entrance and hand sanitizers are provided. Our recent tenant survey shows that over 70 percent of our tenants are completely confident of Landmark’s ability to cater for their evolving needs,” said Sita Banigo, Landmark’s Business Development Manager. On concern about potential liability in the event of an infection within Landmark Village, Ada Nwanze Chief Legal Counsel at Landmark, noted that contrary to expectations, ,their tenants were quite satisfied with the proximity of the Emergency Treatment Centre to their business, as it provides a sense of comfort in the event of infection and access to care. “Data from our tenant survey showed that our tenants are looking forward to collaborating with us on implementing central safety measures. Not only this, we are also upgrading our facilities to ensure that we have as much contactless infrastructure as can be accommodated,” Nwanze assured

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cess to affordable housing in Nigeria was crippled by lack of non-functioning mortgage system, high cost of property development buoyed by the country’s archaic Land Use Act, among other factors. Individual efforts at increasing Nigeria’s real estate housing stock by way of developing more houses have not

helped to reduce the demandsupply gap or increase the ownership level estimated at 20 million units. Despite its large-size population, Africa’s largest economy is crawling behind its peers in terms of homeownership level. Whereas homeownership rate is 84 percent in Indonesia, 75 percent in Kenya and 56 percent in South Africa, Nigeria, Africa’s most populous nation has 25 percent. Industry analysts expect Nigeria’s property market to get some more heat if the virus outbreak is not contained in the next few months as construction and project management are projected to witness some delay due to the difficulty for real estate developers to import building materials. For potential home buyers and investors, the impact of the pandemic on the property sector may also create opportunity as the projected glut in the market is expected to bring down the value of real estate properties and thus a drop in market price.

264 families to leave housing market as Lagos inaugurates multi-unit estates CHUKA UROKO

he over-crowded h o u s i n g ma rk e t in Lagos, Nigeria’s sprawling city with a housing deficit estimated at three million units, will be depleted significantly as 264 families will be leaving the market in the days and months to come. This follows the inauguration of two estate with a combined delivery of 264 housing units in the Lekki axis by the stat egovernor, Babajide SanwoOlu, as part of activities marking his first one-year in office, promising that his administration would build more affordable and accessible houses. Housing industry experts estimate that at an average of six persons per family, these estates which the state’s commissioner for housing described as “successful publicprivate collaboration” will be providing homes for over 1,500 persons in the state. “Our government is positioned to bring about even development to every part of the State, with a view to making Lagos a 21st Century economy,” Sanwo-Olu who commissioned two different estates in the Ikate Elegushi and Lekki areas of the state, assured. He explained that the project was a manifestation of his administration’s muchexpressed need for publicprivate partnerships, saying that such partnerships would be encouraged in all sectors of governance to bring rapid @Businessdayng

growth and mutual benefits to all parties. “We need to continue to genuinely think through affordable housing, and that is our commitment to our people, because it’s not everybody that will have the ability to pay for housing estates such as this. Therefore, we must give them opportunities for installment payment, so as to make it affordable and accessible for them. “I inherited this amongst several other projects and the critical challenge we had to contend with was lack of funds. To surmountthischallenge,wehad tolooktowardstheprivatesector and adopted the public-private partnership (PPP) model. It was there that we were able to mobilize the needed funds and put life back to the construction site,” the governor said. The Lekki Apartment, according to him, was another manifestation of the possibilities attainable when the public and private sectors come together to pursue a mutually beneficial goal, pointing out that such cooperation remained a veritable means of meeting the shortfall in the supply of public utilities and social infrastructure. The governor urg the new allottees of the estate to put the facilities to proper use and conform to laid down rules for appreciation of value. He commended the state’s Ministry of Housing, Lagos State DevelopmentPropertyCorporation(LSDPC)andtheprivatedevelopers for making the project a success inoneyearofhisadministration.

Tuesday 02 June 2020

BUSINESS DAY

Investments

ENERGY INTELLIGENCE

Market Insight Companies Commodity Tracker Policy

OIL

GAS

PETROCHEMICALS

POWER

Nigeria’s oil, gas sector attracts $10m capital infl0w in Q1 2020, here is why DIPO OLADEHINDE

oreign investment into Nigeria’s oil and gas is still in its lowest ebb as inflow hit a low of $10.09 million in first-quarter 2020 which is still a sharp decline compared to $327.30 million recorded in Q4 2016. Despite running an economy mostly dependent on crude oil earnings, figures obtained from public data agency National Bureau of Statistics (NBS) revealed foreign capital inflow into the oil and gas sector accounts for a miserly 0.17 per cent of total foreign investments into the Nigerian economy compared to other sectors like the banking sector contributing 51.08 percent in Q1 2020. This means that despite obvious opportunities in the oil and gas sector, Foreign Direct Investment (FDI) is not rushing into Nigeria as the government continues

to maintain a stranglehold on sectors that can attract foreign investment at the detriment of the economy and the people. Some experts have recommended that for Nigeria to turn the tide against its declining Oil and Gas investments, there must be deliberate multi-agency efforts to bring about needed reforms.

But the efforts must start with bringing credibility to both fiscal and monetary policies. “Currency risk is preying on oil and gas investors’ minds in the current volatile environment,” Kelvin Atafiri who runs Cavazanni Human Capital Limited, an investment firm exposed to the oil and gas sector said.

The risk of currency depreciation has been the biggest worry for foreign direct investors in Nigeria since 2014 and it’s no different this year. The naira has shed more than 70 percent since 2014 and that has been a nightmare for several oil and gas investors who manage dollar funds. Data from NBS also re-

vealed while the Oil and Gas sector seems to be snowballing other top five sectors to attract inflow were Shares, with $10.43 billion; Banking, $2.02 billion; Financing, $1.48 billion; Servicing, $1.29 billion; and Production, $671 million. Atafiri noted that the government needs to make legislative reforms and properly deregulate the downstream sector which will help the government to create jobs and improve its ability to balance the books. Nigeria has been on a perpetual voyage with Petroleum Industry Bill (PIB), a bill which holistic address most of the challenges facing Nigeria’s oil and gas sector. The bill is one its most important bills ever to be contemplated in its history in a journey that began over 16 years ago with lots of anticipation and promises. A former Minister of State for Petroleum, Ibe Kachikwu, said Nigeria lost investments as much as $15bn yearly due to the delay in the passage of

the PIB, which also means the losses may rise in the aftermath of Coronavirus. “Getting the petroleum legislation passed is the right thing to do because investors will not invest their money if they are not sure of how they are going to get their investment back, and what benefits they can get from their investment, and how stable the investment climate is,” Group Managing Director of the NNPC, Mele Kyari said in his presentation at the 25thanniversary edition of the Nigerian Economic Summit Group (NESG). Before starting the year with an investment inflow of $10.09 million which is the lowest in six consecutive quarters, Nigeria’s oil and gas ended 2019 with a capital inflow of $216.23 million which was a 61 percent increase compared to $133.51 million recorded in 2018 while 2017 and 2016 figures stood at $331.36 million and $720.15 million respectively.

Nigeria’s power infrastructure requires mix of centralised, decentralised solutions STEPHEN ONYEKWELU

igeria’s power inf ra st r u c tu re ha s worsened in the last decade and exponentially increased the energy costs for Nigerian households and businesses, a combination of centralised and decentralised solutions have been proposed to deal with this. The crux of this mix of solutions is that it is not viable or feasible to rely exclusively on the enhancement of the transmission and distribution networks, considering Nigeria’s land mass and population size. Part of the centralised solution received a boost with President Muhammadu Buhari’s recent directive to the Federal Ministry of Finance to release Nigeria’s counterpart funding for the concessionary loan in the deal with Siemens AG to upgrade transmission and the distribution network has received applause. This is designed to double Nigeria’s electricity generation and triple distribution capacity to 11, 000 megawatts by 2023. The first phase of the project will fix the transmission and distribution

grids in such a way that would enable evacuation of additional capacities, that is stranded right now. “Operational capacities are being upgraded but cannot get to consumers. So fixing transmission and distribution infrastructure would raise peak capacities from 5000mw to 7000mw,” Onyeche Tifase, managing director and chief executive officer of Siemens Limited Nigeria told BusinessDay in an interview last year. The second phase will focus on the growing generation capacity. From phase three it is expected that there are 11 gigawatts of electricity and probably by that time there would be about 13,000mw generating capacities working. “By the third phase we would be looking at extending the grid from11 gigawatts installed capacity to probably around 13 gigawatts or more and we will expand that to 25 gigawatts. So this is really about expansion,” Tifase said. The Siemens deal seems a sensible approach, but some experts have said it must be complemented by substantial support for decentralised www.businessday.ng

distributed generation (or similar) arrangements- a suite or potpourri of options. “The Federal Government appears to be headed in the right direction, but more needs to be done to support distributed generation, off-grid arrangements. Other levels of Government (including Local Governments) should be given a role to play and carried along,” Ayodele Oni, energy partner at Bloomfield Law Practice said in a tweet. Oni suggested that the

private sector participants throughout the electricity value chain, be carried along, contending that a collaborative approach is the best bet. “Question though, where are we with the 14 solar plants, which power purchasing agreements (PPAs) were signed in 2016?” Oni queried. Nigeria has been experiencing an energy supply crisis for years, with approximately only 40 percent of the country’s population connected to the grid. Even those who have access to

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electricity frequently experience interruptions, with the average daily power supply estimated at around four hours. In an attempt to solve the problem, many power reforms implemented since 2005 have focused on privatising the generator, instead of repairing and upgrading the country’s grid. “We have generation of all sorts: Conventional power generation, renewable energy, we have transmission, we have distribution,” Joe Kaeser, Siemens CEO told @Businessdayng

DW, a German newspaper. “We can help with oil and gas and we can even supply digital platforms. So, we have the whole value chain unlike any other company in the world, and that’s why I believe we are a perfect partner for the Nigerian people.” Nigeria’s energy crisis is somewhat ironic considering the country has access to some of the world’s largest and most profitable oil and gas reserves. Poor policy, ongoing corruption and dilapidated infrastructure have all played a role. Supplying electricity to all corners of a country is a difficult task in any case. Because of this, most countries decentralise authority of the energy sector, as well as sources of the generation. However, Nigeria has done the opposite: In 2005, the Obasanjo administration established the National Electricity Regulatory Commission (NERC), to act as an independent regulatory body with authority over the regulation of Nigeria’s power industry. Some say this power structure has created conditions for corruption to thrive, hindering any attempts to solve the energy crisis.

Tuesday 02 June, 2020

BUSINESS DAY

EDUCATION Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

Fmr minister, Adelaja, advocates reorientation of maths teachers • Urges National Mathematical Centre to the rescue MARK MAYAH

ormer minister of state for Defence, Modupe Adelaja, stressed on Wednesday the need for a complete re-orientation for mathematics teachers, whose present approach to the subject stultifies their pupils. Adelaja, who spoke exclusively with BusinessDAY in a telephone interview said: “ It is a well known fact that many Nigerian teachers of mathematics discourage their pupils by raining abuses on them if they fail to answer questions correctly.” This vilification, the former minister warned, must stop, adding: “It is only in the mathematics classes of all other

Chukwuemeka Nwajiuba, minister of state for Education

classes that pupils are called dunces, block heads etc.” “These disturbing trends cannot be allowed to go unckecked because mathematics and its related sciences are according to Adelaja, “the bedrock of technological development.” “Any nation which lacks specialists in these areas in sufficient numbers she said, is bound to be left behind by the rest of the world.” Adelaja, who served in the administration of president Olusegun Obasanjo, therefore, charged all stakeholders, most especially the leadership at the National Mathematical Centre (NMC), to look critically into the yearly enrollment of students into the general subject area at the tertiary levels of education, which according to her,

African varsities should prepare for blended learning post Covid-19 - Experts KELECHI EWUZIE

frica’s education experts have asked management of universities across the continent to make investment in infrastructure to accommodate blended learning their priority post Covid-19. They noted that the challenges faced during the closure of schools occasioned by the COVID-19 pandemic have shown that relying only brick and mortar format could constitute a setback to learning considering that education cannot remain the same again without a readily available cure and vaccine for the coronavirus. Adam Habib, vice-chancellor and principal, University of the Witwatersrand,

South Africa observes that the new approach to online classes as stop gap to teaching during this period of covid-19 won’t be a replacement for the face to face learning, rather it would serve as complementary option to face to face in what is best describe as a kind of blended learning in operation. Speaking during a webinar on ‘COVID-19 and Africa’s Higher Education System: What is going on? recently, Habib says that the online approach that most African universities are trying to adopt is what is typically obtainable in parts of Western Europe, United States and Asia. According to him, in another way, what we have done is not too different; rather we have in a very real sense confronted the issue of inequality

and find quick solutions to those challenges. The session moderated by Ahmed Bawa, chief executive officer, Universities South Africa was organised by the Centre for Higher Education, Innovation and Development (Nigeria), in collaboration with BusinessDay (Nigeria) and Universities South Africa. He highlighted that there is a very deep learning inequality in Africa as large number of the student’s population don’t to have access to computers, data which is affecting learning and migration to online learning. According to him, “Social justice does not mean we go to the lowest common denominator option, but we are aware of inequality, we should be assisting and try to mitigate it consequences and

lend a helping hand to those who require it”. Aziza El Lozy, Associate Provost for Transformative Learning and Teaching, The American University in Cairo, Egypt; harped on the fact that Africa universities needs to invest in its faculty capacity to prepare for blended learning during and post Covid-19. She hopes that such as this will evoke innovation in university faculty for better and sustainable way to approach blended learning. “One main lesson to learn is that if you are going to go online, even if it is blended, the design of the course is very different and that is where the challenge comes in. so university management needs support for faculty to help them come up with design curriculum.

Seven candidates jostle for LASPOTECH Rector • As Sanwo -Olu appoints Metillelu as Acting Rector MARK MAYAH

ix chief lecturers and one Associate Professor are jostling to succeed the former Rector, Lagos state polytechnic (LASPOTECH), Samuel Sogunro as Sanwo-Olu appoints Metillelu as Acting Rector. The seven candidates for the plum job of LASPOTECH rector were shortlisted from

among 25 lecturers that indicated interest when the position was advertised by the Lagos state government because of the absence of a Governing Council. A breakdown revealed that four of the shortlisted Chief lecturers are from LASPOTECH and three others came from outside the institution. Announcing the appointment of the acting rector at the weekend, the Special www.businessday.ng

Adviser to the Governor on Education, Tokunbo Wahab, said the “appointment of Metillelu is sequel to the expiration of the five-year tenure of the rector of the institution, Samuel Segunro on 30th May, 2020. Metillelu, prior to his appointment as acting rectorr, was the institution’s Deputy Rector ( Academics). The acting rector, BusinessDAY gathered, is also one of

the seven shortlisted candidates for the rectorship. “The process for the appointment of a substantive rector for the institution is ongoing by the office of the special adviser on education”, Wahab said. A substantive rector, our correspondent gathered is expected to be announce on 30th August, 2020 as the acting period is three months duration.

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“ are diminishing in number and quality.” At the primary and secondary levels, mathematics is a much dreaded subject and even the most dedicated have great difficulty in exciting and retraining the interest of their pupils, Dupe Adelaja said. For any nation that wishes to make any meaningful impact in the field of science and technology,Adelaja stressed: “ must give due attention and emphasis to the basis of that development which in this case is mathematics.” “It is no more a hidden fact that whether in the fields of engineering or medicine, business, banking or finance, administration or planning, agriculture or industry, aviation or communication, space exploration or oceanography,

to achieve a deep understanding and mastery- requires a certain quality of mathematical knowledge,” she said. She noted that the national mathematical centre was established by the federal government to develop appropriate initiatives and resources of international standing for re awakening and sustaining interest in the mathematical sciences at all levels. Beside, Adelaja, who also served as Director General, Small and Medium Entrepreneurship Development Agency of Nigeria ( SMEDAN), observed that the establishment of the centre was an adequate response to the dramatic decline in the production of teachers and specialists in the mathematical sciences at all levels.

COVID-19: TETFUND to fund six Colleges of Medicine • One in each Geo-Political Zone KELECHI EWUZIE

ertiary Education Trust Fund (Tetfund) as part of its strategic push to reshape medical research in Nigerian universities will fund Six colleges of medicine across Nigeria to host Medical Simulation, Research and Training Facilities. The facilities, would aid the setting up of Molecular Science Laboratories with capacity for testing and diagnosing COVID-19, Lassa fever, and other related viral diseases. Ngoba Briggs, director of public affairs, Tetfund said, the education minister, Adamu Adamu, had directed Suleiman Bogoro, Tetfund executive secretary to select a university in each of the six geo-political zones, where the projects would be executed. According to Briggs, Adamu Adamu had emphasised that besides ongoing research work in response to COVID-19 and similar diseases through the Tetfund National Research Fund (NRF), the Research Community of the ministry should undertake any other sundry contributions.

Suleiman Bogoro, secretary, TETFUND Executive @Businessdayng

The establishment of the facilities is said to have gotten the nod of President Muhammadu Buhari which had mandated Tetfund to establish 12 Medical Centers of Excellence to be hosted by first, second and third generation universities. Briggs said the centres of excellence, according to the directive, should be distributed in such a way that two must be sited in each geo-political zone. Buhari Mikailu, director, Physical Infrastructure Development, Tetfund said additional centers of excellence would be sited in state universities, polytechnics, and colleges of education in “subsequent years”. Mikailu said areas of focus of the centers of excellence, in line with contemporary practice and technologies, were mainly in science-based disciplines. He said the approval was initiated through the recommendation of the fund’s Board of Trustees, BOT, and endorsement of Adamu Adamu. He said the purpose was to signify a major paradigm shift in research and excellence in the universities. Meanwhile, Suleiman Bogoro, executive secretary, Tertiary Education Trust Fund (Tetfund) has urged Nigerian students and lecturers to make the most of the closure of universities by engaging in research. Bogoro said that the nation was counting on local ’content inventions and ideas to among other things, improve businesses, technologies, governance and create jobs.

Tuesday 02 June 2020

BUSINESS DAY

Keeping a large law firm on track as Covid-19 strikes The Allen & Overy managing partner had prior experience of sudden crisis after a failed merger KATE BEIOLEY

ith just weeks to go before stepping down as managing partner of Allen & Overy, one of the world’s largest law firms, Andrew Ballheimer was plunged into the biggest crisis the legal sector had seen since the 2008 financial crash. The spread of coronavirus triggered an urgent shutdown of the group’s 42 global offices and a rapid shift to remote working in the midst of its first IT upgrade in 15 years. Mr Ballheimer, 58, speaking from his North London home, where he is working alongside his wife and two of three children, says he ideally “wouldn’t have introduced a new IT system as we went into a global pandemic. But that’s what’s so destabilising about this crisis — we couldn’t have predicted it and we can’t predict its longterm impact.” A&O’s overhaul was tested with its 5,500 staff just three days before the firm shifted entirely to remote working. He admits the process did involve “some element of stress”. IT issues have been the least of the firm’s worries, however. The pandemic has caused a sharp decline in lucrative work on corporate deals and accelerated an already growing need for cash on the group’s balance sheet. Although it has no long-term debt, A&O, like most law firms, runs with low cash reserves creating a rapidly worsening financial situation if clients pay late and work dries up. “Our business needs a certain amount of cash flow and clients were having issues and saying they couldn’t pay their bills on time. We had to make sure we weren’t pushing them too hard but obviously we had to look after the business,” he says, adding a cash buffer was important as “the priority was the preservation of jobs of our people”. It is a sudden turn in fortunes for a firm that generated a record revenue of £1.6bn last year on the back of top-tier banking work and corporate dealmaking and whose top echelon of partners took home £1.7m in profits on average. Mr Ballheimer had intended to

ask his 550 partners to stump up more capital during the summer for the first time in 11 years after its cash position had grown too thin. Facing a slowdown in revenue, he was forced to accelerate that plan and hold back partners’ quarterly payouts as well as freezing pay reviews for less senior staff. The measures — echoed across the sector — were discussed with senior partner Wim Dejonghe and the finance team over the weekend on March 14 before being approved and communicated to partners on March 26 on a conference call. “Partners were asking why we had gone first [taking action before other firms]. But we presented an analysis of the issue, we said we needed a cash buffer.” Handling the fallout of coronavirus followed a difficult 18 months of high-stakes and ultimately unsuccessful merger negotiations with US law firm O’Melveny & Myers, which collapsed last summer. Conquering the US market has become a pressing need for the elite cadre of UK firms known as the “magic circle”, who work on the City’s most lucrative deals but have lost ground in recent years to aggressive US legal groups moving in on their territory. Firms such as the Los Angeles-founded Latham & Watkins — the largest in the world by revenue — have surfed a decadelong private equity boom driven by US fund houses and benefited from links to the US investment banks financing the world’s largest deals. Such firms have lured partners with generous pay deals, such as the $10m a year www.businessday.ng

package Kirkland & Ellis paid for Freshfields private equity specialist David Higgins in 2017. A&O saw an opportunity to leapfrog its magic circle rivals overseas by tying up with West Coast law firm O’Melveny & Myers to create a group with more than £2bn in combined revenue. Until that point, A&O’s efforts to expand in the US had revolved around hiring big-hitting partners, including a leveraged finance team led by White & Case partner Scott Zemser in 2016 and three finance partners from Paul Hastings the year after that. The hires involved breaking the firm’s sacred “lockstep” remuneration structure, in which partner pay is tied to seniority, unlike the more aggressive “eat what you kill” model prevalent in the US. But highly paid partners can be lured away, making a more sustainable strategy vital. “[The merger] was a chance to accelerate away from our competition,” says Mr Ballheimer. “A&O is the magic circle and the global elite, but we want to be part of the global elite who are equally at home in English and US law,” he says. “The States is half of the world’s legal industry and we are much smaller there than we are here so we had to build it out.” Discussions proved knotty and time-intensive, not least because the two groups were pushing for a fully integrated firm at the time the merger closed. Others have opted instead for a Swiss verein structure, meaning merging entities remain separate after the deal is done. “That was ambitious and it also meant that detailed discussions took a long time, as each

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side tried to better understand what the combined firm would look like,” says Mr Ballheimer. His “pragmatic and insightful” wife was on hand to give counsel, while partners helped him draft 550 written answers to questions posed internally. “People were anxious about the loss of identity but O’Melveny had the same [concern]. We were each proud of our culture and anxious about losing our heritage.” By summer 2019, partners were on board and the deal was on the brink of going ahead. But at the last moment, sterling moved sharply against the dollar, throwing the merger into disarray. “We ultimately reached agreement on all [the] issues but then FX and interest rates moved against the deal,” he says. “The strengthening of the dollar against the pound impacted valuation and interest rate cuts in the US affected pension costs on their side. That meant that we couldn’t agree a financial deal that both sides could support.” Mr Ballheimer was in Spain with his family when the dream died. “Wim called me as I was having a cup of tea on our terrace and said, ‘This doesn’t look good, does it?’ and I said, ‘No, I think it’s over.” Lawyers often claim that the longer a merger process takes, the more unlikely it becomes. Mr Ballheimer concedes that time “becomes a real challenge in pulling off a merger of this complexity, but resolving complex issues of detail of course takes time. So it’s a bit of a Catch-22.” “If we could have got to a deal more quickly, I think it would @Businessdayng

have helped,” he says. Mr Ballheimer would have remained in post for at least three more years if the merger had completed. Instead he will leave to advise companies coping with crisis situations. His six-month transition period at A&O is likely going to be as good a primer as any. Three questions for Andrew Ballheimer Who is your leadership hero? I am a bit of a history buff and one of my “heroes” is George Marshall (the US general who was army chief of staff in the second world war and then US secretary of state). He led by example in a quiet but clear manner, always with integrity and never about himself, always about the greater good. Two examples of this were his declining the field leadership (and glory) for the D-Day landings in 1944 and his advocacy of what became the Marshall Plan in 1947 (to rebuild Europe). If you were not a CEO/leader, what would you be? In my dreams, a professional tennis player. My parents arrived in the UK in 1939 from Nazi Germany and they were keen on me being a lawyer, an accountant or a doctor. I pass out at the sight of blood though so that was off the cards, and I thought law was more interesting than being an accountant. Thirty three years on, I’m still here. What was the first leadership lesson you learnt? My first job was working at McDonald’s flipping burgers. My boss there led by example and always worked at least as hard as anybody else and nothing was beneath him.

Tuesday 02 June 2020

BUSINESS DAY

We may be heading towards a post-dollar world Continued erosion of trust in America politically could have an impact on the primacy of its currency RANA FOROOHAR

nfettered glob a l i s at i o n i s over. That is not a controversial s t at e m e nt at this point for obvious reasons, from the post-Covid-19 retrenchment of complex international supply chains to the decoupling of the US and China. It’s hard to imagine a reset to the 1990s neoliberal mindset, even if Joe Biden wins the US presidential elections, or if the EU experiences a moment of renewed cohesion in response to the pandemic. The world is more likely to become tripolar — or at least bipolar — with more regionalisation in trade, migration and even capital flows in the future. There are all sorts of reasons for this, some disturbing (rising nationalism) and others benign (a desire for more resilient and inclusive local economies). That begs a question that has been seen as controversial — are we entering a postdollar world? It might seem a straw-man question, given that more than 60 per cent of the world’s currency reserves are in dollars, which are also used for the vast majority of global commerce. The US Federal Reserve’s recent bolstering of dollar markets outside of the US, as a response to the coronavirus crisis, has given a further boost to global dollar dominance. As a result, many people would repeat the mantra that in this, as in so many things, “you can’t fight the Fed”. The dominance of the US banking system and dollar liquidity, both of which are backstopped by the Fed, will give the American dollar unquestioned supremacy in the global financial system and capital markets indefinitely. Others argue that “you can’t replace something with nothing”. By this they mean

that even though China, Russia and other emerging market countries (as well as some rich nations such as Germany) would love to move away from dollar dominance, they have no real alternatives. This desire is especially sharp in a world of increasingly weaponised finance. Consider recent moves by both Beijing and Washington to curb private sector involvement in each other’s capital markets. Yet, the euro, which represents about 20 per cent of global reserves, can’t compare in terms of liquidity and there are still big questions about the future of the eurozone. The gold market is far too tight, as evidenced by the fact that it is now virtually impossible to buy the physical metal. But there are economic statistics, and then there is politics. It’s telling that China has been a big buyer of gold recently, as a hedge against the value of its dollar holdings. It is also testing its own digital currency regime, the e-RMB, becoming the www.businessday.ng

first sovereign nation to roll out a central bank-backed cryptocurrency. One can imagine that would be easy to deploy throughout the orbit of China’s Belt and Road Initiative, as an attractive alternative for countries and businesses that want to trade with one another without having to use dollars to hedge exchange-rate risk. This alone should not pose a challenge to the supremacy of the greenback, although it was enough to prompt former US Treasury secretary Hank Paulson, a man who does not comment lightly, to write a recent essay surveying the future of the dollar. But it isn’t happening in a vacuum. The European Commission’s plan to bolster its recovery budget for Covid-19 bailouts by issuing debt that will be repaid by EU-wide taxes could become the basis of a true fiscal union and, ultimately, a United States of Europe. If it does, then I can imagine a lot more people might want to hold more euros.

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I can also imagine a continued weakening of ties between the US and Saudi Arabia, which might in turn undermine the dollar. Among the many reasons for central banks and global investors to hold US dollars, a key one is that oil is priced in dollars. Continuing Saudi actions to undermine US shale put a rift in the relationship between the administration of US president Donald Trump and Riyadh. It is unlikely that a future President Biden, who would probably follow Barack Obama’s pro-Iran stance, would repair it. Even with oil prices this low, Dallas Fed president Robert Kaplan recently told me that energy independence remains “strategically important” to the US and that “there will still be a substantial production of shale in the US in the future”. Who will fill the Saudi void, then? Very probably China, which will want oil to be priced in renminbi. A decoupling world may be one that requires fewer dollars. Finally, there are questions @Businessdayng

about the way in which the Fed’s unofficial backstopping of US government spending in the wake of the pandemic has politicised the money supply. The issue here isn’t really a risk of Weimar Republic-style inflation, at least not any time soon. It’s more about trust. Some people will argue that the dollar is a global currency and that its fortunes do not really depend on perceptions of the US itself. Certainly, events of the past few years would support that view. But there may be a limit to that disconnection. The US can get away with quite a lot economically as long it remains politically credible, but less so if it isn’t. As economist and venture capitalist Bill Janeway recently told me: “The American economy hit bottom in the winter of 1932-3 after [Herbert] Hoover lost all credibility in responding to the Depression and trust in the banks vanished with trust in the government.” It could be that one day, trust in the dollar and trust in America will reconverge.

Tuesday 02 June, 2020

BUSINESS DAY

Media business Out-of-Home industry takes decision not to sack staff over Covid-19 Daniel Obi

perators in Nigeria’s Out-ofHome advertising industry have taken a deep and thoughtful consideration not to downsize their workforce over the biting effects of Covid-19. This compassionate action, even when business is slow, is a big relieve for most of the workers and their families who are going through excruciating times. However, many of the workers are placed on half salaries which the President of the Outdoor Advertising Association of Nigeria, OAAN, Emma Ajufo said it is better than throwing the workers in to the labour market especially this difficult economic time. Nigeria’s unemployment rate is about 23.1 percent of the population and there are speculations that this will worsen to 33.5 percent. The outdoor industry will however rely on skeletal businesses and savings over time to keep their staff. Since the outbreak of the pandemic, the outdoor industry, alongside other industries such as hotel business, transportation including airlines, education and event business has suffered from slower or non-existent business. “Our clients who rely on eye-balls to place advert materials had to cancel ex-

posures and contracts due to the lockdown occasioned by the Covid-19”, Ajufo told BusinessDay. He however said that business is returning gradually. The OAAN president said the industry which has lost multi-million Naira businesses since the lockdown needs palliative to cushion the effects and keep the industry going. This can come in terms of relaxation of some regulations and fees, and soft loans from CBN. But at a recent online conference by the outdoor body, Adedamola Docemo, Managing Director of LASAA, the Outdoor regulatory body, advised that the focus now should be on creativity rather than rate reduction or palliatives . He stated that the issue of palliatives would be treated holistically

with the support of Lagos State Government but that it would be difficult to make a case now, since the pandemic and lockdown is ongoing. He highlighted several parley with OAAN as proof of his commitment to partnership and growing the industry. At the online conference, Lere Alimi, Managing Director of Meridian Concept called for investment in data to give granular details of new routes and destinations visited by target audiences. He said high regulatory cost needs to be addressed and said that the suggested pursuit of CBN palliative for OOH should be more vigorous and called on the industry to explore mergers & acquisitions, diversification. Executive Director at WIMN, representative of

OMNICOM Media Group in West and Central Africa adviced OAAN to key into MIPAN’s/other Sectoral groups current initiative to upgrade on audience measurement. The industry was also advised to think deeply, innovate on new ways to make advertising compelling as advertisers would always go where their audience is captured. “OOH should provide relevant empirical data to justify using OOH”. It was revealed by Geopoll-survey that OOH is more effective than online and TV, however, there is a strong challenge coming from online since it is good at encouraging engagement and interaction hence there is the importance for OOH to engage with online and drive interaction.

FG partners PRCAN on Covid-19 communication strategy

he Federal Government’s Presidential Task Force (PTF) on COVID-19 has expressed its readiness to partner with Public Relations Consultants Association of Nigeria (PRCAN), the umbrella body responsible for the professional practice of public relations in Nigeria with a view to develop a robust communication strategy to effectively; inform, educate, enlighten and engage with Nigerians on the COVID-19 pandemic. According to a statement, this was made known recently by the Secretary to the Federal Government (SGF) and the Chairman of the Presidential Task Force, Boss Mustapha while briefing the media on the updates of the activities of the Task Force. “I am happy to inform you that our risk communication strategy has been enhanced

by the Public Relations Consultants Association of Nigeria (PRCAN). The professional body has offered the services of its members pro bono to the PTF, in order to strategically and effectively communicate with more Nigerians on this pandemic. The PTF appreciates this offer and looks forward to consolidating the relationship,” he said. Mustapha thanked the association members for offering to provide their quality service pro bono to the government,

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assuring them that government would be looking forward to consolidating the relationship going forward. Mustapha stated that the PTF would leverage existing community structures and assets available from the top to the ward level to push through a massive public awareness campaign aimed at ensuring voluntary community engagement and ownership of the fight against COVID-19. In his reaction, the President, Public Relations Con-

sultants Association of Nigeria (PRCAN), Israel Jaiye Opayemi in the statement described the development as a welcome one that would afford the association the opportunity to bring its professional expertise to support the efforts of the Federal Government free of charge in this emergency. “The nation is at war. We are fighting an invisible enemy in the form of the ravaging virus. In any war, communication is always critical to victory. Your communication rests on a strategy. The word strategy itself has a military origin. Your strategy determines whether you are wasting money and wasting human lives in a war. This is where we are stepping in to support the PTF. This is our calling. Our role is to help evaluate the current strategy and where necessary refine it for greater results.”

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Paga unveils new donation platform in response to Covid-19

aga, mobile money company, has announced the launch of Donate.ng — a donation platform and subsidiary of Paga, created to connect credible charitable causes and organisations to support and donation while elevating their efforts in providing help to the most vulnerable in the society. Donate.ng is one of the many initiatives Paga has adopted in its mission to make life possible for Nigerians. Through Donate. ng, everyone in Nigeria and around the world can lend a helping hand to combat challenges such as the COVID-19 pandemic and positively impact the world, one donation at a time. Speaking on the mission of Donate.ng, Folakemi Falodun, General Manager, Digital Financial Services at Paga in a statement said “We want to foster a world where living is giving. At Paga, we value giving back to the societies we operate in and through Donate.ng, we want to make a difference by

creating a platform where more people can lend a hand easily.” “Paga will ensure that donations are securely made on Donate.ng using local or international cards, Paga wallet or bank transfers. During this pandemic, Paga will be supporting each organisation on the platform by donating an additional 10% of every amount donated to each course. In addition, to ensure that the donations go to those that need it the most, Paga will process all donations free of charge”. The platform was launched with three essential causes targeting the COVID-19 pandemic. These charities include Flying Doctors Nigeria, Dr Ameyo Stella Adadevoh (DRASA) Health Trust and Kinabuti and Friends. Flying Doctors Nigeria, is foremost medical emergency service in Nigeria, that specializes in air ambulances, medevac, medico-logistics services, remote site medical solutions services, medical infrastructural development and medical training services.

COVID-19: Corps member initiates ‘School at Home’ project in Ekiti Community

ccording to UNICEF, around 1.6 billion children are unable to attend school as the COVID-19 pandemic has spread across the globe. In a bid to mitigate the effects of the school closure particularly on children within his place of primary assignment, a National Youth Service Corps (NYSC) member, Master Emmanuel Ohore serving in Ekiti State has initiated a ‘School at home’ project in Are-Ekiti community area of Ifelodun/ Irepodun local government area of Ekiti state. He said the initiative was born out of the need to keep the children engaged through the COVID-19 pandemic period that has forced them to stay at home.

According to him, “Never before have so many children been out of school at the same time, having their education disrupted in this manner. The idea of “School at Home” is my little way of helping the children to continue to learn at home.” Speaking on the modalities of the initiative, Emmanuel who is a graduate of Banking and Finance from the Yaba College of Technology, Lagos, said he goes from house to house within Are-Ekiti (his community of primary assignment) following the basic COVID-19 precaution steps of wearing of face mask, washing of hands with soap and water, using alcohol based sanitizers among other safety steps before entering the houses.

Chi Limited provides support for Covid-19 relief efforts

n line with its commitment to support the Federal and State government’s response to the COVID-19 pandemic in Nigeria, Chi Limited has announced the donation of some of its products to the COVID-19 Presidential Taskforce and to several Isolation & Treatment Centers across States of the Federation. According to a statement, the donation, which included 15,000 packs of Hollandia Evap Milk, will provide significant and much needed support in the fight against the virus. Hollandia Evap Milk provides the nourishment the body @Businessdayng

needs and it is an essential requirement for both healthcare workers who are at the frontline tackling the pandemic, and patients undergoing treatment at this time. Chi Limited expressed appreciation to healthcare professionals and other frontline workers for their tireless and unrelenting efforts in the fight against the COVID-19 pandemic. As a responsible corporate citizen, the company is committed to providing healthy nourishment for frontline medical personnel as they work to make a difference in the lives of the Nigerian population.

Tuesday 02 June, 2020

BUSINESS DAY

Branding

After 70 years, Mandilas is repositioning to meet new market demands – Group CEO Ola Debayo-Doherty is the Group Chief Executive Officer of Mandilas charged with leading the company through its restructuring exercise. She is the first African and woman to attain the position since the Group started operations 70 years ago in Nigeria. Prior to this role, she was at Shell Petroleum Development Company of Nigeria Limited, Shell International, United Kingdom and Arthur Anderson where she served in Finance, Management Consulting, Strategic Business Development and Project/Process Management functions at Senior and Management levels. With MBA from Canisius College (USA) and Bachelor of Science (B.S.) Accounting degree from D’Youville College (USA), Debayo-Doherty is poised to transform the company which deals on vehicle sales and service, residential and commercial air-conditioning systems. She is delighted that Mandilas has sustained strong brand equity for 70 years. In this interview, the focus-driven Doherty said the company with a staff strength of over 400 employees will continue to re-invent to stay relevant in the Nigerian economy. Excerpts: When you joined Mandilas, what are those things you saw on the ground and where are you taking the company to? joined Mandilas almost two years ago. When I met the Mandilas family, they had a great agenda for the company in Nigeria and I realised these are really the kind of people I want to work with. The Mandilas family has been in Nigeria for several years and they want Nigerians to take over the helm of affairs. The company is 70 years old with strong credibility and strong recognition with good products and services. There are significant opportunities in the market that Mandilas can still take on and that is what is driving me in the company. As the first Nigerian and first woman to occupy this position, it comes with a lot of responsibility and accountability. I want to look back in future and beat my chest that I did something well at Mandilas. What are the strong brand pillars that have kept Mandilas relevant for seven decades? First, you cannot take away the personality and commitment of Mr. John Basil Mandilas. To many indigenous business adventurers, the founder Mr J.B. Mandilas symbolises what the entrepreneurial guts should visibly encapsulate – hope, hard work and humility. He has the Can-Do entrepreneurial spirit that says that no challenge is insurmountable. The Mandilas drive has kept the company going. Secondly, the products and services we offer. For instance, Carrier Air-conditioner is a strong brand that has withstood the test of time globally. Thirdly, other critical success factors for Mandilas over the years have been our commitment to Nigeria and Nigerians. We have built up expertise and credibility over the years especially in aftersales service, repair, and maintenance. We are a learning organisation, an organization that adapts to challenges in its environment and resilient enough to be able to come out of those challenges on top. We are mindful of our obligations to our employees and place premium value on business credibility, so we live our core values and promote good work ethics. After sales and service portfolios are important to consumers. Where can we situate Mandilas brand in this regard? Service excellence remains a

Ola Debayo-Doherty

formidable differentiator for the Mandilas brand and we have been able to sustain strong brand equity over the years. At Mandilas, we understand that service excellence is a journey and we must constantly push the bar to get better. To win, we must continuously evolve to meet current market demands and consistently deliver good service experiences at all our touch points. Delivering on this bold promise clearly involves leveraging of relevant technology, best practices, and development of innovative solutions to consumers’ pressing lifestyle issues. What are the current business portfolios of the company in Nigeria? Our present business portfolio can be divided into two divisions namely Mandilas Cooling and Mandilas Mobility. Mandilas Cooling is our Airconditioning Division and the exclusive distributor of the Carrier range of Residential and Commercial Airconditioners. Carrier is the foremost brand in Air Conditioning in the world and the pioneer Air-conditioner in the Nigerian market. Mandilas Mobility is our Motors Division boasting a wide array of auto solutions. Our offerings include Car sales, both new and used cars, Fleet Management and Leasing and of course our renowned After Sales Service. Our aftersales www.businessday.ng

expertise spans seven decades and we have continued to deliver unrivalled service to all our customers across the country. Our workshops and Quick Service Centres (QSC) are manned by trained technicians with a plethora of awards from the 1950s till date as a testament to our continued commitment. Each area has its value proposition and it is our responsibility to unlock the value in a manner that will enhance our profitability and growth as a company. We see a lot of opportunities in the cooling area, particularly in the central Air Conditioning market. You introduced a transformation agenda to reposition the company, what is it all about? Apart from the company being resilient, we are constantly studying the market. We need to be able to address what the market is expecting. There are opportunities and new generation of consumers emerging. There is need therefore for us to transform ourselves in a manner that will be appealing to the younger generation. We have done some market research to understand the market more. The agenda also speaks to the relaunch of the Mandilas brand as one of the foremost indigenous companies in Nigeria. Consequently, our renewed market focus of ‘Committed to You’ is a brand repositioning statement that realigns our business model to be more customer centric. In a

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nutshell, it is about bringing quality service closer to Nigerians. In the sectors where Mandilas plays, what do you consider as its unique selling points? We offer value products. We have experience. We understand the terrain. We understand the business. We are continuously evolving to meet market demands. The franchised brands in our portfolio are global market leaders with an indisputably track record of success over the years. For example, Carrier is the pioneer air conditioner in the world and the first brand in the Nigerian market. The ruggedness, durability and innovation of Carrier products are renowned, and the brand is still the market leader globally. Our Technicians and Engineers are Carrier trained and exposed to global standards in air-conditioning engineering, sales, repairs, and maintenance. Carrier remains the foremost provider of Air-conditioning for domestic and commercial buildings with unrivalled expertise and excellence in sales and after sales service at Mandilas. Mandilas Motors is the foremost automobile company in Nigeria with a 70-year history of tried and trusted expertise in automobile sales, repairs, and maintenance. Our aftersales and service portfolio is trusted for personalised services backed by competent and experienced personnel. Mandilas is currently one of the leading Toyota accredited dealer in the country and we have the largest geographic spread of workshops in the entire Auto industry. Our plethora of awards is a tribute to our consistency and reliability over the years till date. Some of our awards include, 2015 Best Toyota Dealer of the Year, 1st Runner-Up Toyota Dealer of the year in 2016 and 2017, Best Service Team, 2017, 2019 Best Auto Workshop of the year by Nigeria Auto Journalists Association, 2019 Best Auto Dealer by The Nigeria Automotive Industry. What policy direction are the operators in private sector such as Mandilas expecting from government and the society to unlock the opportunities in your operating areas for the benefit of the economy? For instance, in cooling, a lot of our business offerings are imported. This puts a lot of demand on foreign exchange and its availability and accessibility at the right rate for manu@Businessdayng

facturers at the right time. We want policies that will create stability in that area so that manufacturers can quantify the risk and price it in their offering. For the auto industry, there are great auto policies that are attractive to manufacturing of auto-mobile in Nigeria. But for “Tokunbo”, government can draft some guidelines, regulations on the type of vehicles that can be imported. The country should not be a drop for all sort of cars from anywhere in the world. Nigeria, with its population has the potential of becoming an auto-mobile hub for Africa. What we need to fix it is to drive policies and regulations that support local manufacturing but at the same time develop policies and procedures that would protect those investments in the auto industry. Policies for local and foreign investors who want their investments protected need to be clear. There is much government can do to de-risk the auto-mobile business in Nigeria. The world is currently faced with the COVID-19 pandemic, which is ravaging economies and businesses globally, how is Mandilas adjusting to the new regime and what are your post pandemic plans? Covid-19 is still such an evolving phenomenon that its total impact on global business is still largely unclear. At Mandilas, it is forcing us to challenge ourselves both in terms of our business model and business operations. There is an increased emphasis on being more efficient and utilizing technology as a first option. We have embraced virtual working, creating awareness on hygiene and safety habits with ongoing sensitisation of staff on what COVID 19 is and how to protect ourselves. We have also found a balance between mixing physical and virtual elements into customer interactions for better service and brand experience. Building from the transformation agenda, where do you see the brand at 100years? I see tremendous opportunities and possibilities still for the Mandilas Brand to sustain our legacy over the next 70 years. With solid partnerships, and strategic alliances, we are on course to becoming a conglomerate of vibrant and formidable corporate entities over the next decades. One thing for sure is that Mandilas will remain committed to supporting Nigeria and Nigerians, as has been our practice over the years.

Tuesday 02 June 2020

BUSINESS DAY

BDTECH

In association with

E-mail: jumoke.akiyode@businessdayonline.com

Mobile industry to add over $565 billion to GDP with unlocking of the right 5G spectrum Jumoke Akiyode-Lawanson with wired report

report released by GSMA reveals that unlocking spectrum for the mobile industry to deliver innovative 5G services across different industry sectors could add $565 billion to global GDP and $152 billion in tax revenue from 2020 to 2034. Analysts say next-generation 5G services will improve access to healthcare, education and mobility whilst reducing pollution and increasing safety. However, these outcomes rely on government support for the identification of sufficient millimetre wave (mmWave) spectrum for the mobile industry at the next ITU World Radiocommunication Conference in 2019 (WRC-19). Although the Nigerian government has not yet issued any license for the deployment of 5G, the country has shown some level of preparedness for 5G, as Umar Garba Danbatta, Executive Vice Chairman (EVC) of NCC said in November 2019, that the commission has spectrum bands available for operators to purchase in order to roll out 5G services in the country as at when due. The NCC made no mention of the availability of mmWave spectrum. “We have taken steps to preserve the 26GHz (gigahertz), 38GHz and 42GHz spectrum bands for 5G. There will be a number of slots in all these bands and the commission has also made provision for subsidy payment

for infrastructure companies (InfraCos) who wish to deploy 5G. Public private partnership, infrastructure and the right regulatory standards are also necessary to facilitate deployment of 5G services across the country when the time is right,” Danbatta said. The report, “Socio-Economic Benefits of 5G Services Provided in mmWave Bands”, is the first to examine and quantify the impact of mmWave spectrum on the overall contribution of 5G networks to society. mmWave spectrum will carry the highest capacity 5G services. It has the

ideal characteristics to support very high data transfer rates and ultra-reliable, low latency capabilities, which will support new use cases and deliver the benefits of 5G to consumers and businesses around the world. “The global mobile ecosystem knows how to make spectrum work to deliver a better future,” said Brett Tarnutzer, head of spectrum, GSMA. “Mobile operators have a history of maximising the impact of our spectrum resources and no one else has done more to transform spectrum allocations into services that are changing

people’s lives. Planning spectrum is essential to enable the highest 5G performance and government backing for mmWave mobile spectrum at WRC-19 will unlock the greatest value from 5G deployments for their citizens. “More than 5 billion people already rely on the mobile ecosystem to deliver services that are integral to their daily lives and fundamental to the economic sustainability of the communities they live in. 5G can offer more benefits and a whole new range of services to even more people, but this will not be possible without ac-

cess to this vital spectrum,” he said. Industry watchers and stakeholders are worried that Nigeria may not have availability of sufficient spectrum to deploy 5G to its maximum capacity, and may hold back deployment as a result of conspiracy theories that link the new technology to hazardous health issues. mmWave 5G will not only provide consumers with ultra-fast mobile broadband services including immersive entertainment, but will stimulate a host of applications that will enable citizens and businesses to do tomorrow what they can’t do today. These innovations will include enhanced remote healthcare and education, industrial automation, virtual and augmented reality, and many others. The early lead already being established in 5G in the Asia Pacific and Americas regions are expected to generate the greatest share of GDP attributed to mmWave 5G, at $212 billion and $190 billion respectively. Europe is forecast to have the highest percentage of GDP growth attributable to mmWave of any region, with 2.9 percent. However, the advantages are not restricted to early-adopting mobile markets and, as the rest of the world deploys 5G in subsequent years, economies of scale derived from spectrum harmonisation will stimulate even faster growth. Regions such as Sub-Saharan Africa, Central Asia and Latin America and the Caribbean could see growth in GDP contribution from mmWave 5G applications of over 65 percent per year from 2026 until 2034.

Jumia, Mastercard incentivize consumers on cashless payments in Africa

umia, e-commerce platform and Mastercard have partnered to incentivize the use of cashless payments platforms in Africa, as people look for safer ways to pay in the wake of the COVID-19 pandemic. Through this initiative, consumers who purchase essential products using their Mastercard on the Jumia platform will receive up to a 10 percent discount on their order, encouraging consumers to safely transact using digital payment channels and avoid human-to-human

contact, in line with recommendations from global and regional health authorities and governments. “We are proud to partner with Mastercard as part of our social commitment and business responsiveness to the global pandemic. We are also happy to support our customers by offering them a strong incentive to use cashless payments and providing access to essential products with affordable prices during this challenging time. This incentive will help drive

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more consumers to adopt JumiaPay, the safe and digital payment method,” said Sami Louali, EVP financial services at Jumia. The discount offers from Mastercard and Jumia is available in five countries including Nigeria, Egypt, Kenya, Côte d’Ivoire and Ghana. “This partnership supports the various government cashless payment policies in each of these countries. This is an additional step to limit cash exchange at this time,” he said.

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Commenting on the partnership, Raghav Prasad, division president, Sub-Saharan Africa, Mastercard, said: “Our mission at Mastercard is to connect and power up a world beyond cash that benefits everyone, everywhere through transactions that are safe, simple, smart, and accessible. Our partnership with Jumia seeks to further encourage Mastercard consumers to stay safe by using available digital payment platforms to purchase their essential items all from the com-

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fort of their own homes in a clean, seamless and convenient experience. We look forward to further collaborations with our partners to continue delivering such relevant solutions, enabling people to stay safe.” Consumers in these five markets can be a part of this promotional offer by logging on to the Jumia platform, shop and pay for their essential goods on the JumiaPay portal, using their Mastercard, and automatically receive up to 10 percent discount.

Tuesday 02 June 2020

BUSINESS DAY

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

CBN uses Inlaks developed IT platform for Covid-19 funds disbursements Jumoke Akiyode-Lawanson

he Central Bank of Nigeria (CBN) is disbursing the N50 billion COVID-19 targeted credit facility to support households and micro, small and medium sized enterprises affected by the pandemic through the integrated National Association of Microfinance Banks Unified IT platform (NAMBUIT) deployed by Inlaks for NIRSAL Microfinance Bank (MFB). The NIRSAL National MFB is an initiative of the CBN, in collaboration with other major stakeholders like the Bankers Committee, Nigeria IncentiveBased Risk Sharing System for Agricultural Lending (NIRSAL), and the Nigerian Postal Service (NIPOST). The purpose of the

bank is to complement the efforts of the CBN towards addressing the needs of Nigerians at the bottom of the pyramid and deepen financial inclusion. NAMBUIT is a unified information technology built by Inlaks to service micro finance banks on behalf of CBN and NAMBs. It aims to enhance financial access, inclusion and sustainability of the microfinance institutions on value chain financing and ensure the growth of the small and medium scale enterprises. The NAMBUIT platform has a sophisticated loan module for the management of the total life cycle of the over 80,000 loans that will be disbursed for this scheme. The NAMBUIT platform runs on TemenosT24 Inclusive Banking Suite (IBS), and implementation is being managed by Inlaks,

Femi Adeoti, MD/CEO, Africa operations, Inlaks.

a system integrator in SubSaharan Africa, in line with global best practices, with support from the CBN.

According to Femi Adeoti, managing director/ CEO, African operations at Inlaks, 54 branches of

NIRSAL MFB are currently connected on the platform. “NAMBUIT is Software as a Service (SaaS) platform that reduces operational costs as well as improves the bank’s ability to provide necessary information to agencies such as CBN and NDIC. The unified platform comprises a core banking system and subsystems for agent banking, non-interest banking, and mobile payment among other services. “A core benefit of the NAMBUIT platform is the smooth on-boarding of the microfinance banks (MFBs) into the national payment system lowering the operating costs of MFBs significantly. This has been significant, especially in the context of developing economies, where many low income households and micro-enterprises do not have ready access to fi-

nancial services.” The CBN had introduced the N50 billion targeted credit facility as a stimulus package to support households and micro, small and medium scale enterprises affected by the COVID-19 pandemic. The N50bn intervention is financed from the micro, small and medium enterprises development fund. The loan amount is determined based on the activity, cash flow and industry size of the beneficiary, subject to a maximum of N25million for SMEs. Households with verifiable evidence of livelihood adversely impacted by COVID-19 can access the loan to a maximum of N3million. Inlaks is an information technology systems integrator, specialised in the deployment of dynamic and highly scalable ICT infrastructure solutions.

Minding the skills gap: Steps global organisations can take to replenish the talent pool, close the digital skills gap Terence Moolman

he global digital skills gap is growing at an exponential rate. According to the Coursera 2019 Global Skills Index, a whopping two thirds of the global population is falling behind in critical skills, with 90 percent being in developing economies. IDC echoes this in their Futurescape report, stating that two million jobs in artificial intelligence (AI), the Internet of Things, cybersecurity and blockchain will remain unfilled by 2023 due to a lack of human talent. The truth is that the rate at which technology is evolving is faster than the rate at which skills are being developed. Considering the skills shortage, many CHROs are realising that a one-size-fits-all approach to talent management won’t work in today’s volatile, uncertain, complicated and ambiguous world. Instead many global organisations are looking towards a creative and insights-driven approach to plugging the gap. Instead of favoring a localised approach, many are accessing the global talent pool.

A good example of where this could work well is in a market such as Canada. The three key factors to considering when selecting from the global talent pool Where the world is your oyster, it is important to know where to find the best people for the job. In order to achieve this, global organisations need to consider three factors: • Concentration of talent • Labor costs and efficiency • Business Environment Concentration of Talent: Finding the right people to fit the job In a world where connectivity allows for a flexible and global workforce, leveraging pockets of excellence across the globe can be a step towards closing the digital skills gap. Businesses therefore need to identify where concentrations of talent lie. Labor costs and efficiency: Matching the right talent with competitive compensation Labor costs and competitive compensation also need to be taken into consideration when identifying talent across the globe. One study by CapRelo looked into the average salary of a Software Engineer www.businessday.ng

globally. Unsurprising, Silicon Valley came out on top with $85,000 as an average salary for an American software engineer and the second highest in the world, trailing only Switzerland’s $94,567. The key is to map out a company’s specific labor requirements while remaining competitive.

Business environment: A nimble response to the changing business environment The ever-changing business environment should also be considered when building a global labor force. In response to changing business needs, the 2019 Global Skills Index

showed that the global appetite for developing technological skills is slowly increasing at the expense of traditional business skills. According to the report, the demand for business skills such as sales or communications have been diminishing, while the demand for skills in technology

and data science have grown exponentially. In fact, technology enrollments increased 13 percent since last year, while business enrollments fell by 11 percent. While the industry plays catch up, it is vital for businesses to proactively continue with training initiatives in foundational business skills. At the same time, companies should be aware that those adopting a flexible approach to globalised talent will be left with a new emerging challenge of creating a remote culture experience as well as enhanced management skills to manage an increasingly dispersed workforce. Implementing effective global talent hubs will require a solid foundation, which without will prove to be costly; however if implemented properly can provide a healthy supply of technology talent to fulfill the growing demand. Ultimately, technology can provide global organisations with the opportunity to access a global workforce. Terence Moolman is the Chief HR Officer at SYSPRO Corporate.

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Tuesday 02 June 2020

BUSINESS DAY

news

FG cuts petrol price to N121.50 but could raise risk for marketers ISAAC ANYAOGU & HARRISON EDEH

he Petroleum Products Pricing Regulatory Agency (PPPRA) has cut pump price of Premium Motor Spirit (petrol) from N123 to N121.50 per litre for the month of June, but some marketers say frequent movement of prices may impair their ability to hold stock. The PPPRA also announced ex-depot price at N102.13N104.13 per litre, while it put ex-depot for collection at N109.78-N111.78 per litre. The adjustment, BusinessDay

learnt, was arrived at last night without the involvement of the marketers across the country whose current stock would be impacted by the price review. “If the price goes up or down, we are impacted with either a price gain or loss depending on what you have in your tank,” said Clement Isong, CEO/executive director, Major Oil Marketers Association of Nigeria (MOMAN). The implication is that these marketers could incur losses on their previous stock as this new price review was done without an assessment of their current stock. It creates

an uncertainty around how much stock to hold and the possibility of replenishing future stock quickly as frequent adjustment of prices raises risks, Isong said. According to Isong, South Africa uses the average price of fuel for the previous month to set current prices. At the end of the month, the marketer already knows the price of the next product and how much stock to hold. However, Nigeria does not refine all the petrol it needs like South Africa and it takes at least three weeks for the product to come into Nigeria. This

leaves a three-week lead time. Isong recommended the average of Platts and a fixed amount so that there is transparency encouraging marketers to take the risk of stocking up product. Isongsaidwhenpricesgoup anddownwithoutconsultation, it creates uncertainty and risks and people will stop stocking and importing product. He recommended that the marketers be involved in decision-making to arrive at a price template. The Muhammadu Buhariled administration moved the petrol price peg of N145/litre to N125 in March 2020. It was the

first time the price would be adjusted since it was reviewed in 2016, from N86 per litre to N145, by President Buhari. Following this review, the government said it has deregulated the downstream sector but analysts say it has to fully deregulate the sector. At a recent virtual conference organised by the Nigerian Petroleum Downstream Consultative Summit, panellists said government pronouncements on deregulation may indicate intent but it must be backed by law to be effective, attract investments into the sector and this must

be done quickly. The continued existence of agencies that were created to support a regulated price environment, like the Petroleum Equalisation Fund (PEF) which tries to ensure uniform retail petrol price across Nigeria by subsidisingdistributionofpetrol to remote locations, and the PPPRAwhichfixesprices,would needtobedisbandedtoindicate a seriousness to deregulate. “In regulated deregulation, what should obtain is a regulation of technical standards and ensure quality control,” said TimothyOkon,managingdirector, Teno Energy Resources Ltd.

bing as he narrates his ordeal. He hates to remember how his wife was raped. “But there is nothing I can do. She is my wife, she stood by me through thick and thin.” The stunning side of Konto’s story is how deeply his wife expresses love for her blind husband. In a brief interview with the reporter, she vows that despite her husband’s terrible condition, her love for him “remains unshakable”. … IN THE DARKNESS OF LOVE When the insurgents besieged Konto’s house in Kwaram village, Damboa in Borno, he had every opportunity to escape the ambush. But he wouldn’t. He wasn’t willing to lose his wife and children, he says. But right before him, Konto watched as his wife was gang-raped by the terrorists. “I couldn’t resist the rape because I was powerless,” he says. The incessant attacks continued and traumatic Konto was always in sadness and tears. Tears, at its peak, faded his sight. Boko Haram’s continued attacks denied him adequate healthcare. And later when they were displaced from their homes to live in the terrible Delwa camp, Konto became totally blind. Till this

moment, even as you read, he lives in the world of darkness. And nobody cares. Konto now begs for food every day to feed his family, but it is something he isn’t happy to do. “Please help us talk to the government to help us,” he pleads. ‘YOU, NOT OUR LEADERS, ARE THE GOVERNMENT’ Sani and his wife say there isn’t any government anywhere. Things are tough for them. Their past was perilous and their present isn’t any pleasant. Yet they can’t find government help. “You are our government — not the leaders,” Sani mutters when asked about the government’s contribution to lives. “You are the ones, not the government, that have come to check how we are doing here.” According to the National Policy on Internally Displaced Persons in Nigeria, the IDPs have general and specific rights such as rightto protection from displacement and right to protection and assistance during displacement. The policy also explores the rights of internally displaced children, rights of internally displaced women, rights of internally displaced persons with disabilities, rights of Internally Displaced Persons Living with HIV (PLHIV), rights of Internally Displaced Elderly Persons and the rights of IDPs during Return, Resettlement and Reintegration. Multi-purpose Ministry of Humanitarian Affairs, Disaster Management and Social Development was established by President Muhammadu Buhari on August 21, 2019, to coordinate all humanitarian affairs in Nigeria. Findings revealed that the Minister of the Ministry, Sadiya Umar is yet to develop clear-cut plans for displaced persons in the northeast. Comments were sought from the ministry in this regard, but Halima Oyelade, Special Adviser on Media to the minister, is yet to respond to the reporter’s email, almost two months after.

The woman who lost 14 children for... Continued from page 6

slaughtered 14 of her children, one after the other, in just a few months of their arrival in the forest. Her husband was bludgeoned into burying them all. That was her punishment for spurning the marriage proposal of the terrorists. But that was not enough, the lovebirds were separated for two years, after the killing of their children right before them. The separation would, however, not hinder the honest wife’s love for her husband. “They tried to get me married to their members three times but I told them that I wasn’t stable because I had just lost my children and couldn’t find my husband. They threatened to hurt me more. I didn’t choose from any of the men they brought; I was always promising to choose the next day,” she recalls. “We saw hell in their hands. One day, my other male children who were married came to see me at night, so some of the insurgents trying to marry me saw them and lied that my sons were vigilantes working for the government. They slaughtered them. “Before they were slaughtered, one of my sons did ask for a favour: he would love to do a video to send a message to me. In the video, he asked that I forgive him. Boko Haram members made a video coverage of their slaughtered body, they were cut into pieces and put in sacks. When they brought the video, I lay down crying and asked them to kill me too.” But they wouldn’t kill her, they would only enslave her instead and rape her violently. One day, the embittered Kalo would find her way out of the bush where she was caged. She escaped to another bush in the forest but couldn’t find anything to eat or drink. “We had to come back helplessly to our former bush, into their hands. I continued working for them as a cook,” she says. “One day, the soldiers came to capture our village; we were freed. I started

asking the people if they had seen an old man with a white beard. Was he dead or alive?” ‘CHASE HIM, CATCH HIM, KILL HIM’ Meanwhile, in another part of the forest, Sani, the husband, was languishing alone. His children had been killed and his wife was nowhere to be found in the bush. The old man became weary and worried. He was starting to prefer death to frustration. “I am only lucky to be alive today,” he groaned. “They once tied me with cable wires. You see, they started cutting me from here but one of their elders stopped them. I saw hell that I preferred death to life. I ran out one night praying to meet anyone who would take my life.” One evening, when darkness had overwhelmed the brightness of the day, Sani decided to flee the forest, single-handedly, leaving other victims to carry their own crosses. But he was almost caught. “One of them caught me fleeing, and called others but I didn’t stop. As I ran, I heard one of them say ‘chase him, catch him and kill him.’ So I sped further. “I kept running until I met some soldiers at about 9am in the morning. I raised my hands to surrender, then the soldiers took me and fed me with bread. They brought me to Giwa Barrack, where I stayed for two years. I had nothing; I had to be clothed and fed.” Every day after fleeing the forest was filled with fury for Sani; living without his wife, he says, was hard to survive. He then decided, one good day, to hunt for the mother of his only two surviving kids. “When they brought me to the Bakassi IDP camp during the time Zulum was elected Governor, news reached me that my wife had escaped from captivity with two of my children. I went in search of her but didn’t find her at first,” he says. “After searching for the www.businessday.ng

The two lovers and one of their surviving daughters at the camp.

third time, I found her in the Gwoza camp in Kofar Sarki. I told the people there that I couldn’t stay in that camp with my wife; it was too close to the bush. I took her to Maiduguri.” VICTORY AT LAST? NOT REALLY! Saying that Sani, his wife and their surviving toddlers are now living a better life is an oversimplification of a complex story, say the couples when asked about their life after Boko Haram captivity. Even as they speak in their terrifying abode at Bakassi camp, the lovebirds still feel the excruciating pains of neglect. They dwell in the camp but are not doing well; they’re not only living from hand to mouth but also in tears and fears. “No food, no money,” the man says. “My life has been terrible. Our homes were burnt. They slaughtered my children and forced me to bury them myself. “I still cry very well whenever I remember what I have gone through. What can I do with my life now? I have no power. They say the government is going to empower us but I haven’t seen anything.” MEANWHILE, SOME IDP COUPLES ARE DYING… It is a bright Tuesday in mid-March at Delwa IDP camp in Borno, but there is no

atom of brightness in Konto Alhaji Moudu’s tattered room. Apart from living in a dark, rotten room, the 60-year-old lives in another world of darkness: he is blind and can’t move out of the camp without having a prop in his distress. “Let’s move out so we’re talking in a brighter atmosphere,” Konto tells the reporter. But the outside is only brighter, it is not better than the inside. The roofs covering the exterior of the bamboomade room are leaky and the walls are cracked. Awful as it may be to dwell in, it is the abode of a family of eight, headed by the blind Konto, 45-year-old Halimah, 30-year-old Konto’s younger brother Kajamu and five children: Falmata 16, Aisha 14, Mal-Moudu 12, Ali 6 and the three-year-old Maryam. Like Sani, Konto’s travails exemplify the tragedy faced by displaced couples after being ambushed by the terrorists. Thus cause of the calamity that befell Konto is not farfetched: Boko Haram has ruined him and destroyed his properties.Now, he lives in another cell-like home tagged informal IDP camp in Delwa, Borno. “They came to our home, stole my farm produce, slept withwifeand…”Kontosays,sob-

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Tuesday 02 June 2020

BUSINESS DAY

POLITICS & POLICY Makinde scores self high, reels out infrastructure revolution plan for Oyo Iniobong Iwok

yo State Gove r n o r, S e y i Makinde has u nve i l e d a ction plans for aggressive infrastructure development with a view to restoring the glory of the state. Despite shrinking federal allocations to states, occasioned by the fall in the crude oil price in the international market and the ravaging effects of the coronavirus (Covid-19), Makinde said his administration was steadily committed to delivering its campaign promises. As part of his programmes for infrastructure development, Makinde said he had kicked off the construction of two ultra-modern bus terminals in Iwo Road, one in Challenge and another bus terminal in Ojoo, which according to him, would position the state as a new choice investment destination. He listed his administration’s ambitious programmes and projects in a document, ‘GSM Infrastructure Revolution Begins,’ which outlined his scorecards sector by sector in the last one year and also mapped out priority of the his administration in the next three years. Until the regional system was dismantled in 1967 with the creation of 12 states, Ibadan, the capital of Oyo State, was then the seat of political power for the Western Region that witnessed unprecedented transformation in the First Republic, mainly during the administration of Obafemi Awolowo. Since its creation in 1976, Oyo State, indeed Ibadan, has been a shadow of itself noted for its inefficient public transport system, disused public spaces, overstretched public infrastructure, poor culture of waste management and weak traffic regulation and enforce-

ment regimes, among others. Confronted with these stark realities, Makinde came up with ‘GSM Infrastructure Revolution’, a policy document that mapped out programmes and projects his administration had already initiated to make Oyo State a choice destination for investments and a true centre of commerce. Makinde, in his foreword, said the last one year of his administration rehabilitating schools, repositioning public healthcare facilities, maintaining deplorable roads under zero pothole programme and strengthening the broadcasting services through acquisition and upgrading of equipment. Under the light-up project, he said the state government had lit up roads, palaces, neighborhoods and markets with a view to ensure safety of lives and ease of moving around apart from patrol vehicles procured for the security agencies to make security architecture stronger. In addition to strengthening the state’s public order and safety, Makinde placed premium on the right of every child to receive quality education, a reason he had made public education entirely free; rehabilitated 22 public schools statewide and provided 22,800 school furniture sets. He explained the significance of clean green initiative designed “to change people’s mindset and make environment pleasant for all and boost public health. Physical well-being is related to community wealth. It is not surprising that community health is tied to how we manage wastes.” With these achievements in the last one year, Makinde therefore, sought public support for the next phase with plan to execute iconic projects “never seen before in the history of our state under his infrastructure revolution initiative. It is the promise I made;

Seyi Makinde

it is the promise I shall fulfil.” Under the infrastructure revolution initiative, Makinde said he had started implementing an intelligent transport system entailing the construction of two ultra-modern bus terminal in Iwo Road, one in Challenge and another bus terminus in Ojoo carefully designed to serve those commuting within Ibadan, a metropolis of over three million people. While acknowledging the growing population of Ibadan, about 60 percent of the people living in the state, Makinde said he had resolved to create new town housing development schemes in the state capital and eased procedures for processing Certificate of Occupancy within 60 days. Already, he disclosed that his administration “has created Ajoda New Town Housing Development, 340-unit medium low-cost houses. Also, in order to reduce the growing deficit in housing and boost the state’s real estate economy, our government has embarked on a massive housing programme to meet the need of the growing urban dwellers.

“With over 70 percent of the people living in the city and Ibadan being a major political, economic and commercial centre in the Southwest, Nigeria, government must ensure that inhabitants and visitors alike enjoy living and touring the city of Ibadan,” the governor said. He, thus, explained the advantage of housing programme structured to position the state for the emerging real estate boom, resulting from the possible migration of urban settlers who will be induced by the completion of the new railway double gauge track linking Ibadan, Abeokuta with Lagos. With the completion of the railway project, Makinde observed that a good number of people “will relocate to the Ibadan axis in search of affordable housing since the travel time between Ibadan and Lagos will be halved with the introduction of fast trains. For many, working in Lagos but living in Ibadan would be an age-long dream come true.” He defined his plan for urban renewal around the concept of smart cities, a programme that could no longer

wait to happen to make major cities in the state centres of attraction for admirers, tourists and visitors alike. “Ibadan over the decades has been the darling of visitors and admirers who are drawn to her because of her rich repertoire in Nigeria’s modern history, also for her position in the cerebral comity and her strong traditional and historical influence on her geo-political location. But like a giant without defenses she has been left bruised and bleeding.” He explained the nexus between the infrastructure revolution initiative and his investment drive, noting that the plan to make the state a natural choice for investors was at his aggression for executing strategic infrastructure projects in different parts of the state. He supported this claim with the plan to create another central business district (CBD) along the Moniya-Lagos-Ibadan Railway Station/ Dry Port Site in addition to Dugbe Central Business District, which he said, was currently undergoing renewal. Apart from creating another central business district, Makinde disclosed that he had already created a vista for private participation, which he said, had birthed the agreement to reactivate Pacesetter Asphalt & Quarry Limited and bring life to Bodija Recreation Centre through concession agreement. He explained how his administration has revolutionised the state’s agricultural sector by revamping Akufo and Eruwa Farm Settlements, thereby empowering over 30,000 farmers with the mandate to make the state a centre of food production and help it achieve its food security objectives. He said his administration “has accelerated agriculture and is seeking greater possibility of bringing more into

the SME funding net. With its antecedent as an agrarian society, Oyo State will benefit immensely from the government’s scheme to help the farmers increase their productivity.” Makinde highlighted different programmes his administration had introduced “to reduce the cost of cultivation in the state. This will enhance productivity and ensure higher returns to the farmers; boost in agricultural productivity will induce multiplier effect and help alleviate poverty. “Since agriculture traditionally employs the greatest portion of the population, many will be pulled out of unemployment net. As farms become more productive, the wages earned by those who work in agriculture will increase. Agriculture would again occupy its pride of place as a major precursor to economic prosperity,” the governor explained. He explained how he established N1billion fund for boosting micro, small and medium enterprises (MSMEs) at the height of COVID-19 battle, noting that tailors benefited from this fund to produce face masks and personal protective equipment (PPE) for medical practitioners as parts of COVID-19 preventive measures. The governor, therefore, pointed out the impact of the fund, noting that it “has helped tackle some socio-economic forces among the artisans and traders. The forces include poverty, either of the mind or material. It may be difficult to eradicate poverty in its entirety. However, according to him, the government can contribute its quota to alleviate this perennial challenge by providing practical assistance; first, by identifying individuals who are hungry for a lift, to energise their pet dreams. This explains the idea behind the N1billion for small businesses.

Edo guber: Indirect primary safer, humane, healthy alternative for APC - Edo ALGON IDRIS UMAR MOMOH, Benin

do State Chapter of the Association of Local Government Chairmen of Nigeria (ALGON) has said that indirect primary election was safer, humane and healthy alternative than direct primary, for the nomination of the All Progressives Congress (APC) governorship candidate in the forthcoming election scheduled for September 19. The association made its

position known at a press briefing at the APC State secretariat in Benin City. John Akhigbe, executive chairman of Etsako Central Local Government, who addressed the media, said the body stands solidly and irrevocably with the position of the state leadership of the party under the chairmanship of Anselm Ojezua. Akhigbe opined that the proposed direct primary governorship nomination process for the political party in the www.businessday.ng

midst of global coronavirus pandemic is irresponsible and humanly reckless. “For a party that was founded on the principles of the supremacy of the interest of the people, Edo State ALGON is shocked that the National Working Committee (NWC) of our party had supposedly opted to conduct a direct primary process of nomination for Edo governorship election. “We believe that the members of the NWC will not want to be chronicled as the po-

litical leaders who were willing to sacrifice the lives of their members for the ungodly advantage of securing a political advantage in an election. “As members of ALGON with intimate knowledge of the health concerns of our communities and the corrosive blight that the coronavirus can inflict on our people if we fail to follow the guidance of health experts, we cannot, in good conscience, support a political exercise that will put the health of our people in

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grave danger,” the group said. “We are indeed shocked that anyone or group of persons with genuine concern for the lives of Edo people will, at this point in time, be proposing a massive gathering of people with all the local and global best practice prescription of “social distancing” discarded for all kinds of contorted excuses,” the group’s chairman further said. While noting that council chairmen and other elected representatives have been @Businessdayng

working closely with the state taskforce to contain the spread of COVID-19 in the state, added that they are not unaware of the health dangers the pandemic portends to the people of their various community. The association, who passed a vote of confidence in the Governor Godwin Obaseki, administration, noted that in the past three-and-half years, the administration has impacted positively on the lives of the people in all sectors of governance.

Tueday 02 June 2020

BUSINESS DAY

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Tuesday 02 June 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

China blasts Trump over his response to US unrest

Beijing calls president a hypocrite for criticising rioters while supporting Hong Kong protesters TOM MITCHELL AND XINNING LIU

hinese officials and state media outlets have savaged the Trump administration’s response to violent protests raging across the US, describing the president as a hypocrite after he supported Hong Kong’s demonstrations. In a tweet directed at US state department spokesperson Morgan Ortagus, who said the Chinese government had “flagrantly broken its promises to the people of Hong Kong” with its plan to impose a new security law in the territory, her counterpart at China’s foreign ministry, Hua Chunying, wrote “I can’t breathe”. Those were the final words uttered by George Floyd, the African American man whose death while being detained by Minneapolis police officers sparked violent confrontations in dozens of US cities. “After just three days of rioting in Minneapolis President Trump threatened to shoot protesters,” a commentary in the nationalist tabloid Global Times observed, in a reference to the president’s tweet that “when the looting starts the shooting starts”. By contrast, the newspaper noted, in more than six months of often violent demonstrations

in Hong Kong, just one protester had been shot when he allegedly struck the arm of an officer who had drawn his service revolver in self-defence. The protester survived. On the same day that Beijing criticised the US, police in Hong Kong banned a mass vigil on Thursday to commemorate the 1989 Tiananmen Square massacre. Police cited Covid-19 restrictions for banning the annual gathering.

Lau Cha-kei, a Hong Kong policeman whose dramatic standoffs with protesters last year made him a hero in mainland China, said on Sina Weibo, China’s Twitter equivalent: “When the same situation [in the US] happened in Hong Kong last year, [our tough police response] was called suppression of freedom.” Twitter is blocked by China’s “great firewall” internet censorship regime, although Ms Hua and other “wolf warrior” diplomats

routinely use it to fire back at US officials and other critics. For Chinese government officials and the propaganda organs they control, the scenes of chaos across the US were perfectly timed. On Friday, Mr Trump had attempted to focus the world’s attention on the punitive measures he was directing at China for allegedly undermining Hong Kong’s autonomy with a strict new national security law. Within 24

hours however, global headlines were dominated by the violent scenes from the US. Hu Xijin, editor of the Global Times, also mocked comments by Nancy Pelosi, Speaker of the House of Representatives, who said the protests in Hong Kong were “a beautiful sight to behold”. “The ‘beautiful sight’ defined by US politicians has eventually extended from Hong Kong to the US,” Mr Hu said on Twitter. “I want to ask Speaker Pelosi and Secretary [of State Mike] Pompeo: should Beijing support protests in the US like your glorified rioters in Hong Kong?” Nationalist commentators on Chinese social media largely echoed government and state media criticism of the Trump administration’s Hong Kong policy in light of the riots erupting across the US. Other Chinese internet users, however, noted the irony that Beijing’s diplomats and media outlets could take to Twitter while they legally could not. Ordinary citizens have to use special software, which is widely used but technically illegal, to evade China’s internet censorship regime. In response to Ms Hua’s tweet of Mr Floyd’s tragic utterance, some responded on Sina Weibo with the observation “I can’t tweet”.

America’s inequalities burst into the open The chain of violent events being acted out in US cities is depressingly familiar

JOSHUA CHAFFIN AND JAMES FONTANELLA-KHAN

he worst civil uprisings in the US in more than half a century are forcing Americans to confront deep-rooted problems of racial inequality and police brutality — all while reeling from a pandemic that has killed more than 100,000 of their fellow citizens and shattered the economy. Protests over the death of George Floyd, an unarmed black man, at the hands of Minneapolis police began peacefully but disintegrated into violence and looting in dozens of cities. “Last night . . . was an ugly night all across the nation,” said Andrew Cuomo, New York governor, adding that “the real issue is the continuing racism in this country. And it is chronic and it is endemic and it is institutional.” In New York City, where police cars were overturned, and banks and other businesses were attacked, some argued that it was the first time since the administration of Mayor David Dinkins in 1991 that police appeared to have lost control of the situation. “We haven’t seen this New York in a long time,” said Mitchell Moss, an urban studies professor at New York University. The turmoil also spread to smaller cities not typically regarded as backdrops of racial strife, such as Salt Lake

City, Utah, where the mayor imposed a curfew until Monday morning to try to quell the violence. In Rochester, a city of 200,000 in upstate New York, mayor Lovely Warren requested an additional 200 state police troops after dozens of businesses were attacked on Saturday night, with cars set ablaze and police struggling to cope. “We are not going to tolerate this unrest in our city,” said Ms Warren, who is black. She blamed “outsiders” for hijacking what had been a peaceful protest. Christopher Hayes, a professor of urban history at New Jersey’s Rutgers University, said the upheaval was the worst since the civil rights era. “In terms of the widespread nature of this, you would have to go back to 1968, when Dr [Martin Luther] King was assassinated,” he said. “What that shows us is this Minneapolis situation is an American story.” Floyd’s death — and its aftermath — bore a depressing similarity to other cases of police violence against African-Americans, including Rodney King in Los Angeles, Abner Louima, Amadou Diallo, Sean Bell and Eric Garner in New York, and Michael Brown in Ferguson, Missouri, to name a few. It came as many were still digesting the horror of a video showing Ahmaud Arbery being shot to death in February by a Georgia man and his father, a retired law enforcement www.businessday.ng

official. They had attempted to detain Arbery as he jogged through their neighbourhood in daylight. You can watch the slow motion destruction of this guy’s life. It has the all the trappings of an old time lynching Prof Christopher Hayes, Rutgers University What may distinguish the reaction to Floyd’s case is the quality of the video that captured his death. It shows police officer Derek Chauvin kneeling on Floyd’s neck for eight minutes and 46 seconds — even after he pleaded for breath. The footage is so disturbing that even conservative commentators who typically rush to defend the police have largely stood down. Some police officers have even publicly condemned their Minneapolis brethren. “You can watch the slow motion destruction of this guy’s life,” said Prof Hayes, author of a forthcoming book, We Are Home, about the killing of a black man that set off riots in Harlem and Bedford-Stuyvesant in 1964. “It has the all the trappings of an old time lynching.” To many observers, the Floyd protests and the coronavirus pandemic are entwined as examples of America’s seemingly intractable inequality. Statistics show that black and Hispanic communities have suffered disproportionately from the

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pandemic. As Mr Cuomo noted last week, the infection rate in parts of Brooklyn and Queens exceeds 40 per cent — or more than double that of the city at large. That discrepancy has been attributed to poverty. Floyd’s death may have also tapped into despair caused by the pandemic, which has resulted in millions losing their jobs. As Mr Moss said: “There’s a lot of anger and economic pain, and it’s all coming out.” For minority communities, that devastation is compounded by a sense that a president who defended white nationalists carrying torches at a 2017 rally in Charlottesville, Virginia, cares little about their plight. “We are at a pivotal point in our society where an optimistic outcome would be one where we bend towards justice — or we may bend towards something not akin to justice, like fascism,” said Darrick Hamilton, executive director of the Kirwan Institute for the Study of Race and Ethnicity at Ohio State University. Given the extent and nature of the protests, authorities struggled for solutions. An aggressive police response could restore order, or backfire by prompting more anger. “This is a moment in America that can’t just lead to a momentary outrage,” Senator Cory Booker told CNN on Sunday, adding that he was preparing legislation to create a national registry of police misconduct. Many, including Prof Hayes, @Businessdayng

argued that authorities should, at a minimum, move swiftly to arrest the three officers accompanying Mr Chauvin, who was charged with third-degree murder on Friday — four days after Floyd’s death. That, he argued, would at least signal to the public that some measure of justice was forthcoming. “Stopping the police from executing people in the streets is an incredibly low bar,” he said. Other ideas have been discussed in the past but would be more contentious, such as limiting the power of police unions that make it exceedingly difficult to dismiss officers for all but the most egregious conduct. It took nearly five years, for example, for the New York City Police Department to fire Daniel Pantaleo, the officer who killed Eric Garner in 2014 after applying an aggressive chokehold that caused an asthma attack. Garner, a father of six, had been accused of the minor crime of selling loose cigarettes. His death incited a wave of protests and led Mayor Bill de Blasio to introduce reforms, including extra police training, instituting a civilian review board and requiring officers to wear body cameras. Alex Vitale, a Brooklyn College sociologist and author of book The End of Policing, said those measures had failed, in part due to the growing political and financial clout of police departments.

Tuesday 02 June 2020

BUSINESS DAY

COMPANIES & MARKETS

Wall Street shrugs off violent US protests Stocks muted despite wave of disturbances triggered by George Floyd’s death PHILIP GEORGIADIS

nvestors appeared willing to look beyond some of the biggest civil disturbances in the US in decades, with stocks on Wall Street little changed on Monday morning. The S&P 500, Wall Street’s benchmark index, fell less than 0.1 per cent in the opening 15 minutes of trading. The tech-heavy Nasdaq index reversed earlier modest losses to gain 0.1 per cent. The muted reaction from investors followed a wave of violent protests in the US after the killing last week of George Floyd, an unarmed black man, by a white police officer. Several US cities enforced curfews on Sunday evening, and some deployed National Guard troops as protests stretched into their sixth day. The scale of the disturbances has prompted comparisons with civil rights-era demonstrations in the 1960s. Yet several indicators of market stress were calm on Monday. The Cboe volatility index, known as Wall Street’s “fear gauge”, rose about 2 points to just under 30, but was still trading at some of its lowest levels since February.

Several US cities enforced curfews and some deployed National Guard troops as protests stretched into their sixth day © AFP via Getty Images

The US government bond market was also stable. The yield on the 10-year US Treasury rose 0.03 percentage points to 0.6770 per cent, as traders moved out of the safety of government debt. “The market, it seems, is determined, if not entirely hell bent, on looking through the myriad negative headwinds faced by the global economy at present,” said Richard McGuire, a rates strategist at Rabobank in London.

The demonstrations in the US could lead to a surge in coronavirus infections, Mr McGuire added, and would contribute to the uncertainty facing businesses in some states. “Many businesses that had been attempting to reopen safely — with appropriate social distancing measures in place — have now either been damaged or forced to close their doors yet again in order to protect their businesses and staff,” he said.

The impact of the protests began to ripple through corporate America on Monday. Dozens of senior executives have expressed solidarity, in an unusually vocal response. Nasdaq has postponed reopening its trading floor in Philadelphia, which was due on Monday, because of the disturbances. Shares in Target slipped 2.1 per cent after the retail powerhouse said it would close some stores

temporarily, while rival Walmart dipped just under 1 per cent. The crisis comes as tensions between the US and China rise and states grapple with easing lockdowns without triggering another wave of Covid-19 infections. Over the past couple of months, the S&P 500 has rallied to within 10 per cent of its all-time highs, driven by huge stimulus packages from the Federal Reserve and US government and tentative signs of an economic recovery. The surge higher has caught out many investors, who have struggled to reconcile market exuberance with the economic damage of Covid-19. Mohamed El-Erian, Allianz’s chief economic adviser, said the subdued market reaction to the protests was “consistent with the very sharp disconnect between markets and the economy”. European and Asian shares rose on Monday, in gains analysts attributed to easing Sino-US tensions. But some are expecting a bumpy ride ahead. “Whether risk sentiment can really remain this positive all week is doubtful,” said Kit Juckes, a strategist at Société Générale, who flagged the US unrest as a likely headwind.

Hong Kong stocks climb as investors brush aside US-China friction Some analysts in the former British colony remain gloomy on the market’s prospects THOMAS HALE AND DANIEL SHANE

o n g Ko n g ’s b a t t e re d stock market enjoyed i t s b e s t d ay i n m o re than two months as investors shrugged off Donald Trump’s announcement from Friday, saying they had feared harsher measures from the US president. The Hang Seng index closed up 3.4 per cent on Monday despite Mr Trump saying Hong Kong would lose its special trade status from which it has benefited since its handover from the UK to China in 1997. The US president was responding to Beijing’s announcement that it planned to impose national security legislation on the city, which investors fear would in effect end its semiautonomous status under the “one country, two systems” model that underpinned its return to China. But analysts argued that Mr Trump had pulled his punches by not imposing additional sanctions on Beijing. They also highlighted his decision not to rip up the so-called phase one trade deal signed last year between the two countries.

A pro-democracy demonstrator waves the British colonial Hong Kong flag during a protest against the new national security legislation imposed by China © REUTERS

“There isn’t that much negativity that the Hong Kong market hasn’t already absorbed,” said Andy Maynard, managing director at China Renaissance Securities in Hong Kong, adding that many market participants had already discounted a revocation of trade privileges. He also pointed to a shift in www.businessday.ng

attention to the riots that have rocked US cities following the death of George Floyd, an unarmed black man, at the hands of police officers. “The US’s pain is probably Hong Kong’s gain for the moment,” Mr Maynard said. Some brokers in the former British colony were gloomy on

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the market’s prospects over the coming months, however. As well as becoming front and centre in a simmering trade spat between the US and China, Hong Kong is mired in a recession following months of anti-government demonstrations. “Hong Kong is now the battle-

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field in the US-China trade war,” said Dickie Wong, director of research at Hong Kong stock broker Kingston Securities. He dismissed Monday’s rise as a “technical rebound”, prompted by bearish traders buying back shares to cover positions previously sold short. A sense of pessimism threatens to overshadow more positive recent developments, such as plans by Chinese internet groups JD and NetEase to raise billions of dollars through Hong Kong share sales. The Hang Seng has dropped almost 16 per cent so far this year, compared with less than 6 per cent for Wall Street’s S&P 500. Based on price-to-earnings ratios, a common valuation metric used by investors, Hong Kong equities are among the world’s cheapest and trade at a small premium to volatile emerging markets such as Argentina. Mr Wong expects the market to grind lower in coming weeks as the implications of the security law and the withdrawal of the city’s trading privileges become clearer. Chief among those could be downgrades from big credit rating agencies. “After the rebound today, we don’t see much upside,” he said.

Thebigread

BUSINESS DAY Tuesday 02 June 2020 www.businessday.ng

Scientists vs politicians: The reality check for ‘warp speed’ vaccine Hollywood-style messages from politicians about beating the pandemic downplay the technical complexity Hannah Kuchler in New York

hen Donald Trump launched Operation Warp Speed last week, he borrowed language from Star Trek to describe the drive for a Covid-19 vaccine. “That means big and it means fast,” the US president said, promising an effort “moving on at record, record, record speed”. His hope that a coronavirus vaccine might be ready “prior to the end of the year” was even quicker than the optimistic — but often repeated — timeline for a vaccine to be ready in 12 to 18 months. The race for a vaccine appeared to be picking up pace this week when Moderna, a Boston-based biotech company, unveiled early positive results for its potential vaccine in a small trial — and AstraZeneca said it could have the first doses of another vaccine delivered by October if trials are successful. The announcements pleased politicians trying to offer hope to citizens desperate to leave lockdowns and investors eager for economic activity to return. But many scientists feel a duty to damp the enthusiasm. They say a vaccine could take much longer because little is known about the disease and how bodies will react to attempts at immunisation. In fact, some warn we may never create a vaccine for Covid-19. Soumya Swaminathan, chief scientist for the World Health Organization, believes an optimistic scenario is a vaccine produced in the “tens of millions” next year, which would be mainly distributed to healthcare workers, and far larger volumes in 2022. To inoculate the world and defeat Covid-19 could take four to five years, she says. We have no “crystal ball” to tell the future, she told the Financial Times. “It depends how the virus behaves: whether it mutates, whether it becomes more or less virulent, more or less transmittable.” Peter Hotez, a professor at the Baylor College of Medicine in Houston who is developing a vaccine, says the US president sees vaccines as a “manufacturing problem”, like making enough ventilators or tests. “Manufacturing is not the hurdle. It’s taking the time to collect enough efficacy and safety data,” he says. “The Operation Warp Speed language coming out of the White House and biotechs and pharma companies [saying] that they will have a vaccine by the fall — or in weeks or days — does so much damage.”

President Donald Trump has said that the US drive to find a vaccine is ‘moving on at record, record, record speed’ © Stefani Reynolds/CNP/Bloomberg

Vaccines are usually developed over many years and even decades. A 2013 paper from Dutch scientists says the average vaccine took 10.71 years and had only a 6 per cent success rate from start to finish. Each stage is an experiment: from the small phase one trials happening now to the large phase three trials needed for regulatory approval. There are good reasons to believe this time will be quicker. The Covid-19 vaccines benefit from groundwork done for the Sars and Mers coronaviruses even if they were never approved, says Walter Orenstein, a professor at the Emory Vaccine Center in Atlanta. New technologies are fuelling the hope for a faster process. Analysts from Morgan Stanley estimate that Moderna’s vaccine has a 65 per cent chance of success. They believe that before the end of the year we could see vaccines from Pfizer and their German partner BioNTech, and AstraZeneca and Oxford university. But advances like the messengerRNA programming used by Moderna, BioNTech and

another German company, CureVac, have never been used to create products approved by a regulator. The technique translates a protein from the virus into human cells and shows it to the B cells that secrete antibodies. The pandemic has pushed governments and companies to pour money into Covid-19 vaccines, even if there has been a lack of global co-operation. Peter Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering, says it helps that there are so many horses in this race. Proving that a vaccine is safe and effective takes time. Participants need to be exposed to the virus to prove a vaccine works. That probably means recruiting thousands of people across the world to ensure enough live in an area where there is an outbreak, unless vaccine makers opt for the ethically complicated human challenge trials, where participants are deliberately infected. “I don’t want to be a Debbie Downer but let’s be clear: to get a vaccine by 2021 would be like drawing multiple inside straights

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So far, the virus behind Covid-19 has not mutated significantly, so it shifts shape less rapidly than the flu. But we have only been following the virus for months, so there is a risk that it will still mutate

in a row, to use a poker analogy,” Dr Bach says. To fight a war, it helps to know your enemy. Originally considered solely a respiratory disease, Covid-19 has launched surprise attacks from our eyes to our toes. It appears to use different tactics in children, with reports of some suffering from a serious inflammatory condition. Moderna announced early results from its phase one trial on Monday, showing its vaccine had elicited immune responses at least as robust as those found in recovered patients. But some scientists questioned how the trial defined an average patient response. Dr Hotez says the release came days after a study showing that recovered patients only had a low level of antibodies. Umer Raffat, a biotech analyst at Evercore, says it will be important to know when the convalescent antibody level was tested — because it tends to fade over time. If it is tested later, it might not be such a promising comparison. There are big questions about how long an immune response protects patients for. Most scientists think having had the disease confers some immunity — but we don’t know how long it lasts. Immunity to Sars only lasted a couple of years. So far, the virus behind Covid-19 has not mutated significantly, so it shifts shape less rapidly than the flu. But we have only been following the virus for months, so there is a risk that it will still mutate. Most vaccine makers are focusing on the ‘spike’ protein, which it uses to invade cells. They try to teach the body to recognise this pro-

tein and produce antibodies. If the spike changes, many of the potential immunisations would miss their target. Early trials are done in healthy, younger populations: Moderna’s first results were from people aged 18 to 55. But it is people over 65 who have suffered the most from Covid-19 and whose immune systems tend to be less responsive. The US National Institute of Allergy and Infectious Diseases is adding an older age group to the trial. Howard Koh, a former US assistant secretary at the health department, says: “One issue that often comes up is whether older people are able to generate a response that makes it an effective vaccine.” Mr Trump is not the first president to see a vaccine as a way of neutralising the political risk carried by a virus. In 1976, Gerald Ford rushed out a vaccine for what he feared would be a massive outbreak of swine flu, having his photo taken getting the shot at the White House. But the vaccine had a serious sideeffect: hundreds of people developed Guillain-Barré syndrome, where the body is paralysed by the immune system attacking the nerves. Covid-19 has proven to be the pandemic that the 1976 swine flu never became. But easing requirements for approval could put vaccines on the market before we discover all the sideeffects. In the US, the loosening of regulations during the pandemic has already led to battles over safety and accuracy. Government agencies and doctors have disputed whether it is safe to treat patients with hydroxychloroquine, an antimalarial drug being used by Mr Trump that has cardiac and psychiatric side-effects, and the Food and Drug Administration has warned about the inaccuracy of many antibody tests. Scientists have still not ruled out the grim prospect that a vaccine could make the disease worse. In some conditions including dengue fever, and the common childhood respiratory infection RSV, vaccines have actually enhanced the disease. In the first attempts at making a Sars vaccine, there was some immune enhancement in animal testing. So far, there is no evidence that this is a problem for Covid-19 — but the early trials are on tens, rather than hundreds or thousands of people. Dr Swaminathan says this “antibody dependent enhancement” is why the vaccines need to be tested very carefully. “Sometimes antibodies can actually make things worse.”

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