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Respite for insurers as NAICOM extends recapitalisation deadline to Sept. 30, 2021 … applies phased compliance arrangement over COVID-19 Modestus Anaesoronye

L-R: Lolu Akinyemi, chief financial officer, Lafarge Africa plc; Khaled El Dokani, CEO, Lafarge Africa plc; Mobolaji Balogun, outgoing chairman, Lafarge Africa plc, and Adewunmi Alode, company secretary, Lafarge Africa plc, at the 61st Annual General Meeting of the company held in Lagos, yesterday.

How Nigerians bear brunt of fading foreign direct investments LOLADE AKINMURELE

igeria is finding out that attracting foreign direct investment (FDI) into a country that has a larger population than France (65 million), Italy (60 million) and Spain (46 million) combined isn’t always straight-forward. Despite its mostly youthful large population and abundant natural resources, development

In lack of jobs, rising poverty levels JP Morgan, Citi Bank, NIPC suggest ways country can attract more FDIs

economists say the level of FDI inflows into Nigeria – which state data agency, National Bureau of Statistics (NBS), puts at $1 billion on average since 2016 – is shock-

ing for a developing country that’s home to an estimated 200 million people. It’s the people who pay the price for the country’s shortage

of FDI flows in the form of lack of jobs and rising poverty levels. Critics say the government Continues on page 28

he National Insurance Commission (NAICOM) has extended full compliance deadline for the ongoing recapitalisation exercise in the insurance industry to September 30, 2021, with first phase to end December 31, 2020. The commission said on Wednesday that insurance companies are expected to recapitalise 50 percent of the paid-up share capital by end of 2020, and reinsurance companies 60 percent, while the remaining 50 percent and 40 percent, respectively, will be completed by end of September 2021. According to the commission, any insurance or reinsurance company that fails to meet the first phase of the capitalisation by end of 2020 may be restricted on the scope of business it will transact. “The incidence of COVID-19 Continues on page 27

Inside

Steer clear of Edo APC primaries, Obaseki tells Oshiomhole P. 26

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UNIBEN’S SSANU threatens strike over IPPIS implementation IDRIS UMAR MOMOH, Benin

niversity of Benin (UNIBEN) chapter of the Senior Staff Association of Nigerian Universities (SSANU) has threatened to embark on an indefinite strike after coronavirus lockdown is lifted by the government. This is over alleged failure to implement agreements in the memorandum of understanding (MoU) on the enrolment into the compulsory Integrated Payroll and Personal Information System (IPPIS). The union in a statement made available to newsmen in Benin City by its chairman, Brodricks Osewa, and secretary, Enoma Aigbovoriuwa, on Tuesday, alleged that the IPPIS had breached members’ trust and confidence. Osewa listed some of the alleged breaches in the IPPIS by the Federal Government to include irregularities in salary payments, delay in salary payment, payment of allowances as contained in 2009 agreements, appointments and promotions, increments, third party deductions, among others. He noted that the union was being fed with opposite information by the platform four months in the enrolment into it. According to Osewa, the decision arose from its branch executive committee, prompted by outcries from members on the untold hardship being experienced due

to irregularities in salary payments and delay in salary payment. “Four months into the enrolment by the union into the compulsory IPPIS, we are being fed with by the direct opposite of what was presented to the union before we agreed to enrol into the IPPIS platform. “As far as the union and members are concerned, IPPIS has breached our trust and confidence in the whole garbage called ‘IPPIS.’ “The union called on the federal government, AccountantGeneral of the Federation (AGF) and all stakeholders to the Memorandum of Understanding signed before the enrolment into the IPPIS to quickly settle and adjust all areas of default, anomalies or irregularities or meet with imminent strike action, immediately after COVID-19 pandemic lockdown is lifted,” he said. He also alleged that members had not been paid the minimum wage arrears after 14 months even when most federal ministries and ministries, departments and agencies (MDAs) have been fully paid since December 2019. While noting that IPPIS has brought increased tax regime, delayed salary payments, introduction of the housing fund scheme, which ought to be optional, non-remittance of union’s dues deducted since February 2020, added that no university workers at the moment knew his or her true salary or take home pay.

Why Buhari’s Executive Order on legislature, judiciary autonomy is encouraging - Malami, Osunbor Iniobong Iwok

ttorney-General of the Federation (AGF), Abubakar Malami, and Oserheimen Osunbor, a former governor of Edo State, say President Muhammadu Buhari signed the Executive Order granting financial autonomy to state legislature and judiciary to rescue them from collapse and to further deepen the nation’s democracy. Buhari had recently signed into law an Executive Order to grant financial autonomy to the legislature and judiciary at the state level. The Order empowers the accountant-general of the federation to deduct funds for the state legislature and judiciary from the federal allocations to the states.

But the President’s action has been fiercely criticised and opposed by many governors across the country. Last week, the Nigerian Governors’ Forum (NGF) asked President Buhari to allow its members work out their own modalities on financial autonomy for the judiciary and legislature at the state level. But speaking in a television programme Wednesday, Malami faulted those opposed to the President’s decision, saying he was only exercising his constitutional powers. Malami said Executive Order was not new and was often exercised by leaders in developed nations, stressing that governors should rather collaborate with him to enforce the constitution, which would promote legislature, judiciary autonomy and

deepen the nation’s democracy. According to Malami, “The President has executive powers in Section 5 to implement and execute Section 121 of the constitution; it is the responsibility of the President. The constitution guarantees the autonomy of the state legislature and judiciary and it is the responsibility of the President to make sure this is recognised. “The powers to execute the constitution are with the President; perhaps it calls for collaboration. It is the responsibility of both to see the enforcement of the constitution and not mortgage or undermine it. So, the governors do not have the powers to undermine but to collaborate with the President to enforce that section of the constitution rather than op-

pose him.” Osunbor, in his observation, said the Executive Order was constitutional and would help in deepening the nation’s democracy, wondering why the governors were opposed to the Executive Order when some of them were signing it into law in their states. The professor of law bemoaned the state of the two arms of government, saying the current practice could not be allowed to continue. “I find it hard to know that the governors do not want this; I don’t support this; the clamouring against this Executive Order, I don’t think this would succeed, because the forces that want these changes are more than those oppose to it and it is consistent with good democracy.

South-West states woo investors as cocoa, poultry, rice create multi-billion naira opportunities Odinaka Anudu

outh-West Nigeria states are dangling opportunities in the region before deeppocket investors, urging them to tap agricultural opportunities in the region. At a virtual South-West Agribusiness Forum organised by the Lagos Chamber of Commerce and Industry (LCCI) weekend, commissioners of agriculture in the South-West region said crops such as cocoa, fish, poultry and rice, among others, offered multibillion naira opportunities for investment in the region. Gbolahan Lawal, commissioner for agriculture in Lagos State, said a roadmap had been designed by the state government on the necessary interventions in the agricultural sector and investment opportunities existing in the state. He said there were plans to scale food production in the state to 40 percent from its current 20 percent, by focusing on competitive value chains. According to Lawal, investment opportunities and incentive are available in poultry, fish farming and rice cultivation. He said incentives were available to farmers to boost food production in the state, including farm inputs, subsidised land, farm machineries such as tractor, and sharing of relevant information. On his part, Adeola Odedina, commissioner for agriculture in Ogun State, said farmers in the state had competitive advantage in the areas of cassava farming, oil palm production cocoa and vegetable farming. He said there were available investment opportunities for off-

takers and processors in aquaculture in Ogun State. Similarly, Olabode Folorunsho, commissioner for agriculture and rural development in Ekiti State, said the ease of doing business in Ekiti was suitable for agric investors. He listed cocoa, cashew, maize, millet, soyabeans and cassava as crops that were mostly cultivated in the state. “We want to see agriculture as a vehicle to put food on people’s table and create jobs for the teaming youths,” he said. The commissioner added that a good road network and nearness of communities to each other were some of the strong characteristics of the state boosting agric activities. Toki Mabogunje, president, LCCI, said the webinar came at a time of renewed focus on economic diversification and self-reliance. “As a country, we have competitive and comparative advantage in agriculture and agribusiness,” she said. “This is a sector that can readily be the anchor and key driver of our economic transformation. But we need the right policies, infrastructure and institutions to make this happen,” she said. She said the renewed focus on the development of the non-oil economy by the Federal Government had led to implementation of policies geared towards encouraging farmers and investors in the agribusiness value chain. But the sector, she said, was still grappling with numerous productivity challenges, adding that the country was yet to harness the enormous opportunities in the agricultural space. www.businessday.ng

L-R: Babajide Sanwo-Olu, governor, Lagos State; David Folawiyo, representing Inspector General of Police, and Riliwon Akinolu, Oba of Lagos, during the inauguration of Lagos State Community Policing Advisory Committee and State Community Policing Committee in Lagos, yesterday.

UNICEF lauds Makinde for re-establishing fight against neo-natal, maternal mortality REMI FEYISIPO, Ibadan

he renewed effort by the present administration in Oyo State to bring neo-natal and maternal mortality to the barest minimum has been commended by the United Nations Children’s Fund (UNICEF). Oyo State was reported to be third among 15 others that contributed 50 percent deaths of new-born babies according to the 2016 UNICEF indices, following Gombe and Sokoto states. Goke Rauf, a university lecturer, gave the commendation at a day meeting on ‘Facts For Life’ at Oyo town on Wednesday, where journalists gathered to discuss way forward on advocacy against neonatal, infant and maternal mortality. Rauf, who was a facilitator at the workshop, said the new administration in Oyo State, led by Governor Seyi Makinde, had veered off the old order when former administrations failed to act on need for advocacy in favour of exclusive breastfeeding, immunisation and against open defecation, neonatal and maternal deaths.

“We are happy that the new administration in Oyo State under Engr. Seyi Makinde has opened a new vista of hope in bringing down the rate of infant deaths, maternal mortality and poor hygiene. “With the interest of the State to fight this scourge head-on, we are now sure that the next rating of States with high prevalence of neonatal deaths will see Oyo State moving to the bottom of the table,” he said. Bunmi Babalola, permanent secretary, Oyo State Ministry of Information, Culture and Tourism, in his opening remark, assured stakeholders that the state administration would remain committed to the cause for promotion of advocacy to reduce and banish neonatal, infant and maternal deaths. Babalola said the state ministry of information would continue to work with UNICEF to improve the lots of the people, especially those at the rural areas. Participants at the event were drawn from radio stations in the state while facilitators were chosen from institutions with partnership with UNICEF.

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TFAA announces Vimbai Mutinhiri, Taymesan Emmanuel as season hosts BUNMI BAILEY

head of its fifteenth edition, The Future Awards Africa (TFAA) has rolled out an exciting line-up of activities surrounding its iconic award event. TFAA is pioneering a near-complete pivot to virtual platforms in response to global trends accelerated by the coronavirus pandemic. The Future Awards will be hosting many of the now familiar beats on its journey to the culminate the award ceremony via TFAA Instagram handle, while maintaining the physical presence of the award itself. The virtual activities will be carried out with multiple interfaces with other Future Project associated social media platforms. In anticipation of the main event, some announcements were made on May 25 by Adebola Williams, CEO, Red For Africa. Theseannouncements,whichare integral to the TFAA event structure, introduced the public to the season’s hosts, and made public some of the new projects The FutureProjectplanstoembarkon. May 25 was a most opportune time to make these announcements, as it also commemorates Africa Day, a celebration of pan@Businessdayng

Africanism on the continent and beyond. Through an Instagram live hosted by Adebola Williams on the TFAA Instagram account, guests pledged their support to the initiative and celebrated the which Africa-wide focus of the awards this year. After announcing this season’s theme “The Convocation”, the hosts for this year’s events were announced. Multimedia presenter, influencer, as well as past season host Taymesan Emmanuel and acclaimed presenter Vimbai Mutinhiri were declared as season’s hosts of the fifteenth edition of the Future Awards Africa. Another major announcement that was made was the launch of Beating Corona Heroes & Champions project, presented by The Future Awards Africa. The project which is set to be a TV and Digital Telethon, will kick off on Sunday, 16 August, 2020.It is powered by RED, in partnership with EbonyLife TV & Consolidated Media Associates Limited. The call for nominations for Beating Corona Heroes across Africa, which is aimed at spotlighting unsung heroes at the frontline during this pandemic, was also made open during the Instagram live.

Thursday 04 June 2020

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Five states get N148bn refunds for federal roads repaired Tony Ailemen, Abuja

ive states finally received refunds for investments in road infrastructure after a protracted battle as the Federal Executive Council (FEC) on Wednesday approved N148 billion to them as reimbursement for funds expended on federal roads. The benefiting states are Cross River N18,394,737,608.85, Ondo N7,822,147,577.08, Osun N2,468,938,876.78, Bayelsa N38,040,564,783.40, and Rivers N78,953,067,518.29, totalling N148,141,987,161.25. This was sequel to a memo presented by Minister of Works and Housing, Babatunde Fashola, at the third virtual council meeting, presided over by President Muhammadu Buhari inside the Council Chambers of the State House. Information and Culture, Lai Mohammed, who briefed State House correspondents on behalf of Fashola, said the council had also warned there would be no reimbursement in future, should any state government venture into such projects without the nod of the Federal Government. The battle started in 2016 when the 36 states of the federation sent a bill for refund to the Federal Government, asking for compensation for money that they had expended on federal roads. The minister said this prompted President Buhari to set up a committee to go and verify the

claims of the states, whether indeed these projects were actually constructed, were they completed, in line with the Federal Government standards. “At the end of that exercise by an inter-ministerial committee, chaired by the honourable minister of works and housing but also had ministers of education, transportation, finance, minister of state for works, DG BPP and permanent secretary cabinet office as members. “At the end of that exercise, the committee recommended that the Federal Government should refund N550,364,297.31 billion to 31 of the 36 states, after they were convinced that, yes indeed, the projects were completed and they were Federal Government roads. “But the claims of five other states Cross River, Rivers, Ondo, Bayelsa and Osun failed on the grounds that they did not do proper documentation and the committee felt they needed proper documentation. “So, the committee went back with a new terms of reference to ensure that the claims of the five states were in order, that is why the BPP is on the committee. So at the end of the exercise, the committee now reported that the five states - Cross River with 20 roads and one bridge will get a refund of N18,394,737,608.85, Ondo with six roads to get a refund of N7,822,147,577.08, and Osun with two roads and one bridge to get a refund of N2,468,938,876.78.

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Glo subscribers relish benefits of ‘Sunday Data’ pack BUNMI BAILEY

etwork subscribers are gushing about the benefits of the ‘Sunday Data’ pack introduced by Nigeria’s leading telecommunications company, Globacom. The package was introduced by the telecommunications company to ease the pain of the lockdown following the outbreak of Corona virus Covid-19 pandemic. Sunday Data plan gives subscribers a whopping 1.25Gb of data on Sundays to chat, browse, stream and connect with other subscribers across networks for 24 hours for just N200. Globacom introduced another package tagged Stay Home Data at the same time to ease the boredom and pains of the lockdown. The two packages gives Glo subscribers more data and flexibility to remain productive and entertained during the full and partial stay home orders of government, while also maintaining contact with their loved ones, friends and colleagues. Some subscribers interviewed over the Sunday Data said that they have been able to stay longer online and do a whole lot more, including online businesses and religious meetings, watching movies as well as uploading and downloading large files. Many also said the Glo offerings had helped their children do online schooling and assignments.

Dele Junaid, an Ibadan-based businessman, who uses Sunday Data package said the experience has been exciting. “I subscribed to the Sunday Data plan and I must confess that it’s been a swell time for me. I bought N2,000 worth of data and got a whopping 5.8GB instead of the 5.25GB I used to receive for the same amount. I surfed endlessly and was able to use the data to listen to the online service of my church,” Junaid said. Aniefiok Ikoh, who resides in Lagos, says he has been able to attend more webinars in one month of lockdown than he had ever done. Janet Alordia, a housewife, revealed that she had also been depending on the Sunday Data plan to maintain her relationships with her family members who live in different parts of the country. She does video chats with them every Sunday. Under the Stay Home plan, the customer automatically enjoys up to 20 percent more data when he tops up his account. The percentage of data bonus enjoyed depends on the data plan subscribed to. Globacom encouraged more Nigerians to opt for the Sunday Data pack and the Stay Home package in order to have much more data to work, worship, and study and socialise online. It asked subscribers to dial *777# or visit http://hsi.glo.com and follow the instructions to enjoy other offerings.

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COVID-19: Voters to incur expenses at elections as INEC makes face mask compulsory James Kwen, Abuja

oor Nigerians who would be going out to exercise their franchise in the face of the dreaded Covid-19 pandemic, beginning with Edo and Ondo governorship elections would incur expenses of buying face masks. This is as the Independent National Electoral Commission (INEC) made wearing of face mask at Polling Units and all election locations mandatory. INEC, which gave this directives in a Voters Code of Conduct (VCC) for Elections During the COVID-19 Pandemic released Wednesday in Abuja, said face masks must be worn at all times, but an election official may request a voter to lower his or her mask for proper identification when necessary. According to the new Voters Code of Conduct, voting would start by 8.30am and stop at 2.30pm when an election official shall stand at the end of the outer queue indicating that the queue is closed and any voter on the outer queue by 2.30pm shall be allowed to vote. “There shall be two queues formed at each polling location (Polling Unit or Voting Point). The first queue (the outer queue) will be outside, from which an election official shall bring voters into the voting area in batches. The second queue (the inner queue) will be formed in the voting area.

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“Queues must be orderly and voters on a queue must maintain a distance of 2 meters (6 feet) from each other. Any voter showing symptoms of COVID-19 such as high temperature, coughing, sneezing, etc. will be requested to leave the queue or voting area and shall be attended to by designated officials. Please obey all directives by the officials to keep yourself and others safe. Report any health emergencies urgently to an official at the Polling Unit. “Avoid unnecessary touching of surfaces or leaning on walls and other surfaces at the Polling Unit. You may request for hand sanitizer which will be given to you if available. An election official may ask to clean your fingers with an antiseptic before your fingerprint is read with the Smart Card Reader. “Please show your voters’ card to election officials whenever you are requested to do so. After you cast your vote, move away from the voting area. If you wish to observe the counting of votes and announcement of result, you will be directed by an election official on where to stay. “Please ensure that you go away with your used protective materials such as face masks and hand gloves. Do not litter the polling unit! Remember that cell phones or any other device that can take pictures are still not allowed in the voting cubicles.

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

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08098710024

The future of West African corporate finance market depth, impact and duration of the economic effects of the COVID-19 pandemic.

KEMI OWONUBI

he economic and social impact of the COVID-19 pandemic continues to be felt globally. In West Africa, beyond a health crisis, the economic aftershocks will continue to be felt through reduced foreign trade and investment, declining local income and reduced consumption levels. Our regional economies are predominantly reliant on commodity exports, which are exposed to price volatilities and changes in the global supply & demand dynamics. Oil & gas commodity exporting countries like Nigeria and Ghana, have been significantly impacted by dampened prospects for a near term recovery in oil prices; and with Cote d’Ivoire, face supply chain disruptions and forecast lower demand for agricultural commodity exports like cocoa, due to weakened global consumer demand. The impact of the pandemic is also felt on tourism and travel, given the restrictions on movement and drastic reductions in labour force on the back of the downturn. It is within this context, that we reflect on the prospects for West African mergers and acquisitions. Pre COVID-19 M&A outlook The top five sectors for M&A in 2019 were energy and power, media and entertainment, fast-moving consumer goods (FMCG), real estate, and industrial materials. The total value of announced M&A deals by value in 2019 (for Sub-Saharan Africa) was $79.6 billion, a 142% increase over the 2018 value. All the above-listed sectors, except for media and entertainment, feature consistently in the rankings each year. 7 of the top 10 acquisitions (which were all strategic, companyled deals), were cross geography transactions, that enabled the acquirer to expand its business, into the target’s country and region. Pre-COVID-19 regional outlook The African economic outlook for 2020 was similar to 2019. Real GDP growth was estimated at 3.4% for 2019 and projected to accelerate to 3.9% for 2020(Africa Economic Outlook 2020). Leading the way were six economies, amongst the world’s ten

The innovation and technology enabled sectors Tech-enabled sectors such as (i) E-Commerce - including online retail, tech-enabled logistics and transportation; (ii) Digital Financial services - including consumer lending platforms & Payment Platforms; (iii) Media and entertainment - over the top (“OTT”) platforms; (iv) Digital Education; and (v) ICT – Security and IT software solutions. Businesses in these sectors are evolving into high-value high-growth companies, driven by technology, and further enhanced by the solutions they provide to COVID-19 related challenges.

Source: Africa Economic Outlook 2020 - AFDB

fastest growers, including the three West African nations of Ghana, Cote d’Ivoire and Benin (See Chart 1). Positive investor sentiment in Africa was growing supported by improving macro and political conditions and favourable population demographics. Appreciable deal activity was expected in broad-based energy and power, FMCG and financial services sectors, telecommunications, media and entertainment. The adjusted regional outlook Deal activity is typically a direct result of underlying corporate performance (within the context of the macro fundamentals), growth prospects and the availability of well-priced capital. The 2020 GDP outlook for sub-Saharan Africa is expected to contract and has been revised downwards to between -2.1% and -5.1%. M & A post-COVID We anticipate that the conditions created by COVID-19 will present select opportunities for the discerning investor, who must be prepared to take advantage of such opportunities once they appear or are created. Such opportunities will include restructurings, bargains involving distressed sales, or as new segments and businesses, that emerge from opportunities presented by disrup-

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tions to existing business models. Relative to a pre-COVID world, where M&A was broadly directed by the objectives of scale, and driven by economic optimism, in the post-COVID world, M&A will become to some extent, a tool for survival, given the constraints on capital, and the requirements for cost control and optimisation. There will be opportunities for domestic companies with strong balance sheets & cashflows, and for companies outside the region looking to expand geographically, with the prospects to acquire assets at favourable price levels. This is how we anticipate that the sectors will be affected: The non-discretionary sectors Non-discretionary sectors within (i) Consumer Goods - food, grocery retail, personal and home care; (ii) Healthcare - manufacture and retail of pharma products, healthcare infrastructure including hospitals and diagnostics; (iii) Telecommunications - communications including voice and data, telecoms infrastructure; and (iv) Logistics and Transportation - distribution infrastructure, warehousing. These sectors will experience varying levels of impact, due to the pandemic. There will be opportunities to leverage and improve their business and operational models,

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to take advantage of the opportunities presented, through organic improvements, vertical acquisitions across the value chain or opportunistic acquisitions to build scale. There is especially a positive outlook for local manufacturers in countries with a high import bill for consumer products. This is so as import substitution becomes a big theme, due to severely reduced FX earnings for governments. A depreciated currency, a trade deficit position and declining reserves will mean countries can no longer support non-essential imports. This presents an opportunity for local manufacturers to produce better quality goods (for sale to an existing consumer market), at higher price levels, capturing higher margins. The discretionary sectors Discretionary sectors such as (i) Travel and Leisure - tourism, hospitality, aviation; (ii) Real Estate - residential, commercial; (iii) Construction; (iv) Discretionary Retail; (v) Non-Essential Financial Services; (vi) Media and Entertainment - cinemas and theatres; and (vii) Oil and Gas - upstream and related services. These sectors have been impacted by declining incomes and levels of activity due to the restrictions to movements. We expect these sectors will likely only see a return to “normalcy” in the latter half of 2021, or even later, depending on the

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Where to next? Despite the adjusted outlook, we still see the opportunity for sizeable M & A deals in the non-discretionary sectors, as demand will be relatively resilient across critical sectors such as healthcare, grocery and food retail, other consumer staples, telecommunications and logistics. Companies in the discretionary sectors, who entered the crisis with high leverage levels, may present bargains for investors, with restructurings, and where the business is a good fit into their existing strategy. There will also be consolidation opportunities, fueled by a need to survive. We anticipate a general realignment of property prices in the real estate sector, as investment properties are realised for more optimal uses of cash. We envision deals in the emerging tech enabled sectors, though, some may still be in the early phase of growth to be sizeable. On a upside, growth in technology enabled businesses will be accelerated by the newer, growing needs of a postCOVID consumer. In conclusion, M & A will remain active. We believe that while the typically deal heavy sectors may slow down, activity will continue, driven by value opportunities and consolidations. Overall, West Africa remains a resilient region, and will respond to the challenges at hand with astuteness and innovation. Kemi Owonubi is the Head of Corporate Finance department at RMB Nigeria.

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Spontaneous deregulation tests regulatory gaps on digital platforms

AUSTIN OKERE

here is a perfect storm brewing on Twitter between the President of the United States of America, Donald J. Trump and Twitter Founder, Jack Dorsey. “The Trump-Twitter fight ropes in the rest of Silicon Valley” was the screaming headline on Politico.com on Sunday, May 30, 2020. President Donald Trump tweeted earlier this week about mail-in voting, alleging without evidence that the effort would lead to voter fraud. For the first time, Twitter marked the tweet with a small notice that read “Get the facts about mail-in ballots,” which linked to facts-based reporting on the subject. Twitter’s fact-check led Trump to issue an executive order targeting social media companies. The order involves Section 230, part of a 1996 law that gives websites (including companies like Twitter and Facebook) the ability to moderate content on their sites without worrying about First Amendment violations. Legal experts have said the move is possibly illegal and difficult

to enforce. Facebook, meanwhile, has tried to stay out of the clash, with CEO Mark Zuckerberg weighing to say he has a much different view from Twitter on how Social Media Platforms should handle controversial political speech. Companies like Facebook and Twitter, Zuckerberg said, should not act as “the arbiter of truth.” The relationship between platforms and regulation has been thorny right from the start and can at best, be described as a keg of gunpowder waiting to be triggered. Has the time come for the trigger to be pulled? I wrote this article four years ago in June 2016, and it still captures the essence of this feud. What are your views on this fractious issue? I facilitated a seminar for the Lagos Judiciary at the Lagos Business School in May 2016, with theme Digital Economy and Legal Regulation. The aim of the program was to share insights on the emerging Digital Economy with their Lordships and draw attention to the imperative for regulatory evolution in the face of the pervasiveness of Online Platforms of the kind operated by technology giants such as Facebook, Google, Uber and Airbnb. There is hardly an area of economic and social interaction these days that is left untouched by these Platforms in some shape or form. The regulatory gaps To fill the regulatory gaps in the digital economy, these behemoths have resorted to what could be referred to as spontaneous deregulation. I first encountered this term in an article by Benjamin Edelman and Damien Geradin, and has arisen as a result of

digital disrupters ignoring laws and regulations that appear to preclude their business model, which is typically based on providing platforms for crowd sourcing and giving rise to the sharing economy. Believing in the efficacy of their utility model and its appeal to a pent-up global demand, these disrupters seem to see many rules and regulations as belonging to the past and impractical for today’s innovative clime. They therefore simply ignore them, opting for their own version of self-regulation, usually based on a mutual rating system between service providers and consumers. It is this skirting of existing regulation that is referred to as spontaneous private deregulation. These disrupters make the rules for themselves as they go along, because in fairness to them, as their platforms reshape markets, the scope of activity subject to regulation tends to decrease, and various forms of protection disappear. These companies operate in interstitial areas of the law because they present new and fundamentally different issues that were not foreseen when the governing statutes and regulations were enacted. Two major areas in which these digital czars have riled the establishment are in transportation and hospitality; the major “culprits” being UBER and Airbnb. UBER, until recently a relatively unknown company out of Silicon Valley in California employs 160,000 drivers today and is adding an average of 20,000 drivers every month. This transport services disrupter is now valued at $41 billion and operates in many major cities across the globe. Airbnb, a previ-

‘

The slow pace of regulation evolution seems to strongly suggest that the legal profession itself is ripe for a technology revolution that will optimise the largely manual and laborious process of enacting laws and regulation in the face of the aggressive pace of digital innovation

constitutional reforms, yet we have not made drastic changes that can manage our diversity better except for the benefits to the ruling elites. Our politicians have been playing “ludo” with our existence. Give a governor a mandate for four years. He will use the first tenure of four years to dance to the tune of the godfathers and the political gladiators of the state. From his first day in office, he is calculating how to be re-elected for the second term at all the possible cost. He will be using the state’s resources to execute ill-thought and white-elephant capital projects to satisfy the psychology of the people at inflated prices to get funds for his re-election. He will do everything possible not to offend the sensibility of the godfathers and if practicable open the vault of the state to his political sponsors. After his re-election, his desire to be brave and be a creator as a leader will be short-lived by his willingness to appoint his successor and be the godfather of the state. He will want to be the significant political gladiator and sponsor, all at the expense of the majority who are living below the poverty line. He will make the option to be elected as a member of the senate a priority to remain relevant politically or prevent the anti-graft agency going after him. At the federal level, we have created many institutions without strengthening those that could assure accountability. We have selected government based on the promise of fighting corruption with lopsided vision and use the fight as political tools. Our leaders dribble or makes U-turns at will and throw passes more than the legendary footballers. Recently, Olusegun Obasanjo makes a bold declaration asking the government to listen to the agitation of the people for restructuring the country to safe the country from plunging into another war. He gave his reasons for something he had vehemently ignored while in office. Let’s leave that for another day. I will be back on that with a befitting title like Obasanjo: dribbles, U-turns

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and passes. Let’s take it or leave; it is either with listen to one another to get the benefits of our diversity or go the ways of the Soviets. In the long run, it is either we restructure the inequality between the rich or the poor, or we dismantle it in its entirety. Nigeria needs leaders who are creators. We need people who will do things in the interest of the people with or without the prospect of the second term or continuity in office. I will not shy away from acknowledging a bold member of the Short Man Association of Nigeria. I am sure he is likely to be the vice president of the association if the current vice-president of Nigeria is the president of the association. Mallam Nasir El-rufai did the unthinkable as a first-time governor when he sacked over 25000 unqualified teachers in his state. He wasn’t afraid of the influence of these teachers and their sponsors in his quest for a second term election. Again, let’s leave El-rufai today but for another day. Is El-rufai among the prophets is a title for another article. Now to Hope Uzodinma, a man who has given a glimpse of hope to the people of Imo state. We don’t care if his victory is from the court. His decision to repeal the law that pays ex-governors, deputy governors and speakers’ huge pension payment at the expense of the poor people of the state is commendable. His decision is an attestation that there are leaders who look at tomorrow different from today, who are likely to do what hasn’t been done before and take risks as long as it is in the interest of their people. At the federal level, we need detribalised leaders who are not the apostles of any of the religion and ethnic nations. We need leaders who will see beyond maintaining the status quo. We need leaders who will take the right steps to keep all the federating nations in Nigeria united with a sense of equity and justice because a united Nigeria is more honourable among the committee of countries in the

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Note: The rest of this article continues in the online edition of Business Day @ https://businessday.ng Austin Okere is the Founder of CWG Plc, the largest ICT Company on the Nigerian Stock Exchange & Entrepreneur in Residence at CBS, New York. Austin also serves on the Advisory Board of the Global Business School Network, and on the World Economic Forum Global Agenda Council on Innovation and Intrapreneurship. Austin now runs the Ausso Leadership Academy focused on Business and Entrepreneurial Mentorship.

Hope Uzodinma: A glimpse of governance hope in Imo state ope Uzodinma, the Imo state governor’s repeal of the Governors and Speakers Pensions and Privileges Law of 2007 last week is a glimpse of hope. If it can happen in the Imo state of Nigeria, it can happen in Nigeria if we have the right leaders in the right place irrespective of the leadership and institutional voids. For nations to move from traditional societies to the take-off stage of civilisation and economic development, leaders who are creators are needed. When leaders take on their positions, they are likely to fall into two categories. Some leaders will be what John Maxwell called ‘maintainers’ in his book, the Leadership Shift. Others will be what he termed as creators. Nigeria judging by the current political structure, which has led to the glamour for self-succession among some of the federations has mostly led by leaders who are maintainers. They have maintained the forced amalgamation of Lord Lugard in 1914. Our leaders have seen what is beneficial to their regions, ethnic groups or their pockets in the creation of Lord Lugard rather than seeing the benefits of agreed, equal and mutual federation could bring to all Nigerians irrespective of their affiliation to their tribes. Our leaders are contented with the status quo in power and resource sharing and they want to stay in the comfort zone of power and only manage what was established by the colonial masters who did not understand our culture and diversity as a nation. It is the failure of our leaders to create a new and equalitarian society that has led to Nigeria being predicted as the next Soviet Union if nothing is done. Even, the region that always shout ‘one Nigeria’ because of the benefits from Nigeria’s resource and power arrangement cannot sustain her people and the one Nigeria is a slogan for the privileged who will rather die for the status quo to remain. We have drafted and approved many

ously obscure company with similar roots and reach, has over 1.5 million accommodation on her platform, and is now valued at $25 billion. The need for “platform fairness” Axelle Lemaire, French secretary of state in charge of all things digital, insists that France is open to platform operators, but consumers have to be protected. She is sponsoring a law to be passed by the French Parliament which will create the principle of “Platform Fairness”. Karnataka state in India, where Uber piloted its India service two years ago has directed taxi aggregators such as Uber to stop operations in the state until they secure a licence from the government, triggering sharp reactions from the corporate world. Getting a licence would mean no more surge pricing, complying with the maximum fares fixed by the government periodically and registering with local transport authorities. The question is why has it taken the Karnataka government such a long time to wake up to regulatory gaps in her transport sector? And how many other cities are in this quagmire?

Positive Growth with Babs Babs OlugbemI world. Whatever it takes, to keep Nigeria together amicably should be the focus of leaders who are willing to create a new Nigeria from the Lugard’s imagination of the North and the South. We want leaders who understand what Jeremiah said about what will break out of the north to all the inhabitant of the people and prevent it with justice and equality. Why should any state government pay a pension to a governor after eight years of collecting unaccountable fund as security votes? Why should an unborn generation be impoverished at the expense of others? Why do the rich want to get richer at the expense of the oxygen of the poor? Uzodinma has answered the questions. He has given a glimpse of hope to his people, and one thing he needs to do is to sustain the hope. The hope is in his boldness to repeal the law that was meant to steal legitimately from the majority to the minority, from the poor to the rich. The glimpse is, however, not enough for the people of Imo state. They need the hope of an assuring glimpse that the money saved from the unpaid pension and other savings from inflated contracts will not go the same way as they came. They want to see their money channel into infrastructure and education for their children and will hope that this glimpse is not a temporary hope for them. Babs Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, Positive Growth Africa. He can be reached on babs@babsolugbemi.org or 08025489396.

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Thursday 04 June 2020

BUSINESS DAY

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The war against coro: Some small-small issues... $5.5bn loan? Count me out!

ik MUO

ur discourse on the political dynamics of the war against Coro is on hold today as we review some recent miscellaneous small-small Coro-related matters. Two weeks ago, the WHO Director of Emergencies advised us to see Coro as a new-normal; in effect, to get friendlier with that vicious visitor it because it was not going in a hurry, as it came with its own chair! We were aghast because we all thought that Coro would soon disappear as suddenly as it came. Just the other day, Unisa, Head of Infectious Disease Clinic at the University of Maryland said the same thing: “We may have to live with Coro for months and years. Let’s not deny it or panic and let’s not make our lives useless. Let’s learn to live with this fact.” So, however unpleasant it is, we should get used to living with Coro, just as we have become used to living with bad roads, poor governance, Discos that generate more of darkness and charge us for the darkness, political irresponsibility and rascality and overall governance failure. And by the way, governance failure has killed and continues to kill more Nigerians than Coro will ever kill. If you doubt it, let us ask the National Bureau of Statistics. It is heart-warming that the PTFCoro has learnt this war is not an order from above, by-fire-by-force affair. They now have plans to engage 800,000 people for aggressive campaign of sensitisation and mobilisation across the land. However, I still wonder why they should not outsource this task to the National Orientation Agency, deploy Youth-Corpers who have all been ‘de-

boarded’, courtesy of the same Coro or even decentralise the matter. Anyway, they now know that it is not a matter of issuing orders from above. It is now common knowledge that President Trump has finally severed the relationship between US and WHO because the Commander-in-Chief of the global war against Coro has “failed to make the requested and greatly needed reforms” and to punish WHO and its partner in crime, China for their “cover-up” of the coronavirus outbreak. Surely, Trump would have been a great dictator if he were from these climes. He issued a query the other day and before the WHO finished reading the query, he handed out this non-negotiable punishment. He did not even bother about what other WHO partners think about the matter or the impact this harsh decision on the other parts of the world. He is actually a dictatorial democrat. And still on Trump and the US, at times, one emergency upstages another emergency. Despite being the world champion in Coro cases and deaths, Trump has had to keep the war against Coro in abeyance so as to face the unanticipated national outrage against the gruesome murder of Floyd. The “I can’t breathe” demonstrations, even forced the “I-don’t-care” Trump into a bunker in the White House and led to the appearance US soldiers on the streets has put Coro-related affairs on the cooler! It also led to the emergence of a new species of blacks (pure white men) who were looting under the cover of the protests. And still from yonder, a group of monkeys in India has boldly attacked a laboratory assistant on Coro duties and seized some Coro samples from the helpless fellow. The monkeys even had the audacity to enjoy their loot by publicly devouring the samples. This happened in the precincts of Meerut Medical College in Delhi. May be, we shall soon start testing the monkeys for evidences of “coronisation”! However, this shows that it is not only in Nigeria that monkeys do “great things” though

in Nigeria, they would have been more interested in swallowing cash. It is also obvious that the assistant was on a “legedesbenz” (trekking) or else the monkeys could not have attacked him/her! Back home, the NCDC has bemoaned the appearance of black-market in the test -kit market. Don’t ask me why it is called a black-market (just like we have black-mail, black-book, blacksheep black-day, black-berry et al). However, I am not surprised because in this country, we have black-market court injunctions and judgments, black-market admissions, duty waivers, ministerial nominations, electoral victories and employment letters! For those who patronise black-market test-kit market, I have only one advice: caveat emptor. And the biggest of the small-small developments: The Government has moved on to the next level of the gradual easing of our self-imposed medical detention. “Coffee” has been reduced from 10pm-4am. (So, don’t drink coffee outside these hours…!) Why? Because people in Lagos leave their homes around 4 so as to get to work about 8 and this means circa 8 ours commuting time daily! (almost two whole days in a week). Financial sector and hotels are allowed to open fully while places of worship are granted restricted opening. I don’t know why disorganised markets are opened fully while churches can open on a restricted basis. Anyway, that means I will say goodbye to my online parish and parishioners (Holy Cross cathedral, Lagos). I hope I will still find the way to my Parish, Our Lady Seat of Wisdom, Okota. Now, are we opening up because the war is over or because people are observing the restrictions more in breach or because Coro is now the new normal? Well, “at-all, at-all n aim bad pass”! I am glad that we have moved to the next-level in the easing process.

‘

I am not surprised because in this country, we have black-market court injunctions and judgments, black-market admissions, duty waivers, ministerial nominations, electoral victories and employment letters! For those who patronise black-market test-kit market, I have only one advice: caveat emptor

has been overrun by Coro and allied forces and I have been fully at home for so long to the extent that I have started mixing up the days and the weeks. On Tuesday last week (26/5/20) I sent out a message to a platform for your weekend relaxation! It was when one mischievous fellow asked me the type of calendar, I was using that it hit me: weekend on a Tuesday! Anyway, everything has been about Coro: confirmed cases, fatalities, active cases, Isolation Centres, CACOVID, treated and discharged et al. I got baffled when suddenly, last week, a cacophony of voices started oozing out from the “Buhari boys”, how he was/ is the best thing to have happened to Nigeria, how he has placed Nigeria on an irreversible path to sustainable development, how he has fulfilled all his promises and that in any case, he never promised to fulfil all his promises within 5 years! (He has fulfilled all but he never promised to fulfil all within 5 years!). It was then that I remembered that it was 29th May, our former Democracy Day. It was also around the same time that Colonel Umar wrote the president, pleading with him to belong to all of us. The internet has made everything easy and all the information is on the public square. It is indubitable that Nigerians are poorer, more unemployed, more homeless and “enjoy” higher cost of living and poorer standard of living than in 2019 or 2015. People are not judged by what they have promised to do or for their efforts; they are judged by what they have done; by outcomes! Incidentally, the Gospel reading for that day (John, 21:16-17) emphasised that the core role a shepherd is to feed the sheep while the reward for the shepherd who fail to attend to the sheep is woe! (Jeremiah, 23:1) Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng

Other matters: $5.513bn foreign loan? Count me out! The micro and macro environment

Dr Muo is of the Department of Business Administration, OOU, Ago-Iwoye

A cure for COVID-19? The drug discovery process

here has been a lot of noise and confusion about potential cures and remedies for COVID-19. From our own much touted but yet undisclosed cure from the cradle of civilisation, to the internationally notorious Madagascar syrup, several people have asked that the public be allowed to “test” these remedies. The reason why no regulatory body will approve the used of an untested drug which has not undergone rigorous clinical trial is because of the potential harm such a drug can cause. Even when complete clinical trials and double-blind tests are completed, and drugs approved, it can still be revoked as in the case of COX-2 inhibitors. The COX2 inhibitor was supposed to be the “miracle drug”. It had all the advantages of a normal NSAID like Ibruprofen, without having the side effect of ulceration. Yet, it was found post approval that it caused increased numbers of heart attacks and strokes. To better appreciate the drug discovery process, I will briefly explain each stage while adopting a humorous writing style to discuss this potentially mind-numbing subject. Lab research When a substance is suspected to be a cure for a certain disease, “bench research” or lab research is carried out. This is the Research &Development phase in a lab with cells in a dish. It is painstaking work. When I was awarded the MEXT Scholarship to study stem cells in Japan, this is what I was doing. Walking from Tokyo Eki to Shimbashi

everyday (since I did not have transport fare), resuming at the lab, putting on my white coat, drinking green tea, performing experiments on cells, recording my findings, presenting my findings & hoping that we would receive approval to move to pre-clinical phase. Getting approval means you need evidence at the bench stage that this cure worked in your petri dish. This requires a lot of paper work, late nights, presentations at international conferences, weight loss and nerves. Most don’t get approval. Pre-clinical stage When you get to the pre-clinical stage, you are in the game. Then you get to test your cure first on small mammals like mice, then on larger animals. These animals cannot get sick, and they need to be constantly monitored. If a single thing goes wrong with any animal, whether it is your drug that caused it or not, these committees do not care. They are looking for issues/problems/inaccuracies/inconsistencies and they are meticulous! Any tiny problem and that will be the end of your research, your funding will be cut and you are back to square one. One of the words used in the lab a lot was “mendokusai”. In Nigerian slang it would translate to “long thing”. Research is bothersome; absolute attention to detail is mandatory. And it is thankless. After the bench research that lasts years, the pre-clinical trials (during which NONE of those mice can die; nothing can happen to them), then approval is sought to move to the clinical trial stage. The chances of this are literally one in a million.

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Clinical Stage This stage also has its own set of issues and challenges. You have to design and execute a randomised, multi-centre, double blind controlled trial. This means that the drug must be tested on a lot of randomly selected volunteers, in different centres or cities and measure its effectiveness against a fake drug “placebo”. The nurses that are giving the drug CANNOT know which drug is real and which is placebo to prevent bias. The patient cannot know if they are getting the real drug or placebo. That is double blind. At this stage, you are paying for the hotel, you are paying for the drug, you have not made one kobo yet. You are paying the statistician. Don’t forget all those mice you paid for in the lab a few years ago. At this stage, you may be several hundred million dollars in. And unlike Davido, there is no assurance and you don’t have 30 billion in the account. You have 30 billion potentially down the drain. There are all sorts of random reasons that your clinical trial may fail because it will be reviewed by other smart researchers whose aim is to tear your methods apart. You have to be super careful. If the drug successfully scales this stage, then it is presented for approval. You need a team of like 50 people who has been working at this for months to put all the documents together. This is the FDA and they do not play. They are paid to see problems in all you have done so far. Many drugs go through this whole process

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Ola Brown and don’t get FDA approval. The FDA does not care about the billions that have been spent, your dreams, your family members that you took money from, or your investors. They are focused on safety. If the documents provided do not satisfy them, they will not approve the drug. And they won’t feel any remorse. There is no shortcut. They cannot be bribed. They cannot be hoodwinked. They cannot be blindsided (not usually). This is one of America’s ‘strong institutions’. After FDA approval you can start marketing your drug. But then comes the yellow card system. All adverse drug reactions across the world need to be reported via this yellow card system to ascertain that if there are any problems in the wider population. Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Ola Brown is a British-Nigerian medical doctor and Managing director of Flying Doctors Nigeria; a charity based in Lagos, Nigeria

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Thursday 04 June 2020

BUSINESS DAY

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Understanding the social contract CHRISTOPHER AKOR

y article last week was on Ben Ayade, the crying governor of Cross Rivers state. Asides dwelling on the charade Ayade calls governance and how he uses tears to mask his utter incompetence, deception and bad governance, I noted the implication of creating an anti-tax agency to enforce tax exemptions for the social contract between the government and the people. I argued that essentially taxation “is not so much a burden as it is a right to participate fully in the social life of the state.” Predictably, I received many reactions mostly agreeing with my submissions on Ayade but disagreeing with my take on the social contract. The reason is simple: I cannot be advocating for citizens to pay tax when the government has been irresponsible, mismanaging the resources at their disposal. The overwhelming sentiment was that the people were victims of bad governance and the first place to start is to ensure government accountability before insisting the people pay tax. The argument goes that the largely poor victims of bad governance cannot be made to support a largely corrupt political class who mismanage the proceeds from oil anyway. This follows the usual trend in most developing countries of placing rights before duty and making payment of tax contingent on the government fulfilling its own part of the social contract. This, to my mind, is a major misconception of the social contract and a major reason for the absence of government accountability. I therefore explain below the concept of the social contract and how it plays out in other climes. The idea of the social contract,

which first appeared in the writings of Plato but developed by Thomas Hobbes, and later, John Locke, J.J Rousseau, Immanuel Kant, and John Rawls amongst others, seeks to answer the questions of the origin of the society and the legitimacy of the authority of the state over the individual. In its current form, it assumes a sort of reciprocity between the rights provided by the state and the duties expected of citizens for a harmonious functioning of society. Failure on the part of either party to perform its duties leads to a breaking of the contract and in the case of government failures, it often leads to agitations, protests, strikes, and even revolutions. Although this concept is well established in political discourse, its use in Africa has been quite problematic because of the prevalence of weak/failing states that are incapable of performing the functions of a ‘real’ state on their own without external support. Unlike in Europe and America where states emerged through a long and complex process of wars, invasions, conquests, cultural interactions, rampant migration; and where the need to raise taxes in order to finance wars led to the development of strong representative institutions, the typical African state developed differently. It is, according to Peter Ekeh, an imported institution consisting mainly of “migrated social structures and constructs which were almost literally parcelled from metropolitan centres of the imperial west…and engrafted onto the new colonial situation”. This externality and artificiality of the African state, according to many political analysts, have made it difficult for African states to develop a Europeantype civic culture. To be sure, the social contract in the European-American sense always involves both duties/responsibilities of citizens to the state and corresponding rights and or privileges of citizens which the state must guarantee. As I stated above however, the starting point of this relationship is with duties. Duties precede rights and citizens must first empower the state before they can

expect to draw from its abundance. However, in Nigeria, the opposite appears to be the case. The conception of the social contract is mainly in terms of rights and privileges or what the government can and should do for the people and not the other way round. It has always been so since the colonial days, even though the colonial authorities also demanded payment of taxes more vigorously. In fact, it is the unpopularity of the harsh colonial tax environment that provided many nationalists leaders with the platform to mobilise and gather large followings. Of course, they cashed in on the discontent to rally the people against colonial rule often promising freedom from obnoxious taxation. Upon taking control of government, these nationalists leaders began to feel the heat themselves. Unable to maintain the colonial tax regimes, they focused on converting the revenues of the marketing boards to state revenues and or setting policing trade to raise revenues. It is for this reason that Federick Cooper describes African states as “gate-keeper” states – states unable to develop a modern taxation system and relying exclusively on policing the points of interface, as it were, between the domestic and world economies to raise revenues. The colonial powers built trading points on the coasts and railways into the interior to bring out export products. Since they were unable to raise taxes from the people, they relied on tariffs on imports and taxes on export products for revenues. Independent African states were sadly unable to change that structure and so continued with the ‘gate-keeper’ tradition. Therefore, independence in Nigeria brought with it a gradual decline of direct taxation as a component of government revenue. Enter oil and taxation system set up by the colonial government, even as inadequate as they were, were gradually dismantled or ignored. Many Nigerians wonder why their country cannot manage proceeds from its oil resources like say, Norway, whose prudent management of its oil

‘ In fact, it is the unpopularity of the harsh colonial tax environment that provided many nationalists leaders with the platform to mobilise and gather large followings. Of course, they cashed in on the discontent to rally the people against colonial rule often promising freedom from obnoxious taxation

The Majek Fashek demon

bout 7 years ago I was a broke and naive boy living occasionally with and at their dad’s apartment at the Airforce base Ikeja. I walked to the back of the base to get groceries for dinner one evening when I thought I saw someone who looked familiar. The person was part of a group of civilians seated around a plastic table drinking beer in the Nigerian fashion. “The table is full”. I looked at him and couldn’t place where I knew him. I focused on getting the stuff I needed to buy and was pretty much carried away when I felt a rough hand tap me from behind. I looked back and the man who I had tried to place earlier was begging me to buy him a bottle of beer. He said “Buy me one Gulder my guy. Abeg” In that instant I remembered. This was #MajekFashek. In all his fallen glory. Instantly I felt pity. I couldn’t buy him the bottle of beer though since I had maxed out all the cash I carried. I politely turned him down and he walked out of the base into the market place just behind us singing and waving at the market women shouting “Majek majek majek”.

I would never forget what he was wearing. A dirty looking jeans with a black shirt that had probably been on his back for days unwashed. His shoes looked worn and tired. It was painful to see. How are the mighty fallen? You see I woke up this morning and could hear the rain pound on my roof. And by cue my mind goes to Majek Fashek. This happens to me anytime it rains. I think of Majek Fashek because of his song “Send down the rain.” A song he released in 1991. Next I did my devotion and afterwards I logged on Twitter to see the #RIPMajekFashek hashtag. My heart sank. I loved the man. I loved his music. His sound was eclectic and brilliant. I remember listening to my dad play his songs as he drove me to school in the mornings. An older cousin called him a prophet. I also remember my friend the rap artiste John NetworQ’s mum telling him to turn down the volume of the CD player as he blasted the Majek Fashek’s songs in their living room. I know he was crazy about him. I also remember my roommate, Alexander Uwaifo, son of the legendary Victor Uwaifo and I, talked about him in our dorm room back at the University of Benin.

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We’d talk about his music. Our favorite songs. Compare him to the reggae greats. And of course how ugly, pitiable and pathetic his life turned out. And we’d jam his songs some more from Alexander Uwaifo’s big music player. You see , this part of #MajekFashek’s life is not how I want him to be remembered- but it’s hard to hero worship someone for so long and finally see that he is human after all. With the same foibles you struggle with. Yet it must be told so the artistes of today will learn and know that everything that has a beginning must have an end. That drugs and alcohol will always take a toll on your body. The price must be paid for the “high”. The boogeyman must come and collect. Fame is fleeting. Like life, wealth is fleeting. When you don’t manage your earnings from when you are hot and in demand - you’d go broke faster than you became rich. And believe me - fans might never forget your music but they can forget you. I will always argue that the artist and the art are two different entities. Sometimes we love one more than the other. Sometimes we keep the memory of one and forget the other exists. In the last few years, this has been Majek Fashek’s story. He was forgotten. His

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resources has made it one of the richest countries in the world. To be sure, Norway produces just about 1.6 million barrels of crude oil per day (less than Nigeria’s 1.8 million barrels/day). Yet, its $450 billion economy is dwarfed by its $1.09 trillion Sovereign Wealth Fund, which is the largest in the world. The most astonishing fact about Norway however is that with a population of about 5 million, it still has one of the highest tax regimes in the world – 36 percent personal income tax and 25 percent VAT. Despite its wealth and low population, Norway still choose to operate a tough tax regime to prevent the country from becoming a rentier state, make its citizens equal partners in the social contract and better positioned to demand and ensure government accountability, and prevent its citizens from developing an entitlement culture. Therein lies the success of Norway. In Nigeria however, the notion of citizenship is basically right-based – one that sees itself more as receiving from, and not giving to the public domain. Jane Guyer describes this kind of social contract as “representation without taxation”, an ingenious reversal of the popular American slogan before the revolution. But this kind of social contract does come at a cost – an almost total absence of accountability in governance. Since the people contribute very little to government revenues, they do not have the moral right or even the incentive to know how the government manages the resources. Usually, such countries depend on external “rents” or strictly speaking “unearned revenues” for their sustenance. The common disposition is to view the rents, in Richard Joseph’s words as “manna from heaven poured down on the country to be grabbed by the lucky and well connected” because the money is nobody’s and is just there for the taking. With time, the embezzlement of such funds becomes the “strategic essence of governance” or in diverse and multi-ethnic entities, the state becomes an arena where the struggles for shares of the national cake dominate all other considerations and actions.

Ediri Unoro

art remembered. I write this with a sting of guilt. Do I really have the right to talk about the dead like this? Who I’m I really to comment on the life, the times and the death of a musical icon? Alas, the truth must be told at all times, then I ask myself, is this really the truth? His truth might be different from mine. I mean, did I know his struggles? Or his endless pain as he fought his demons, even in his fame and pennilessness? Do I really know his story? Or the endless battles he has had to fight? Was I there when he was repeatedly betrayed by those he trusted? Who am I to judge really? He did not have the staying personalities of his contemporaries like the Onyeka Onwenus and the Victor Uwaifos who have managed to stay relevant today. Yet he was just as talented as they were. What really happened though? Maybe someday, someone with the real story will come forward and tell it. Maybe he was fated to die like this. Forgotten, pitied and to die on a rainy morning.

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BUSINESS DAY

Thursday 04 June 2020

Editorial Publisher/Editor-in-chief

Frank Aigbogun

For economic recovery consumption and investment must take-the-wheel Govt’s share of economy small, must take the back seat

editor Patrick Atuanya 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)

Bashir Ibrahim Hassan

n order not to waste the COVID-19 crisis, an economic plan to stimulate the Nigerian economy and quickly exit the slump it is in must go beyond more government-led expenditure. To attain a V-shaped recovery, that is shorten the length of the recession, Nigeria needs an economic plan that gives private consumption and capital investment more space. Both accounted for 73.48 percent and 26.20 percent of GDP respectively in 2019. Both are fundamental to economic growth in Nigeria. In contrast, since 2014, average government expenditure as a percentage of total output has been 11.85 percent. A deeper look at available data further revealed that after reaching an all-time high of 81.5 percent of GDP in 2016, private consumption as a percentage of GDP has declined consistently, falling to its lowest level in 5 years in 2019. Although the share of capital investment peaked in the last two years, foreign direct investment has remained very low at 0.4 percent

of GDP as of December 2019. It increased in Q1’20, but may slow due to COVID-19 pandemic. In a country where the owner’s corner is a serious matter, the government should take the back seat and let the private consumption and capital investment drive the economy. If the aim is to turn the current economic challenges into an opportunity for Nigerians, especially the “common man”, this is a fact the Economic Sustainable Committee, headed by Vice President Yemi Osinbajo, can’t afford to ignore. It is important in shaping a sustainable plan which President Buhari has asked for. Beyond the health crisis the COVID-19 pandemic has brought upon countries across the world, it has also caused disruption in supply chains, depressing global and domestic demand for commodities. Nigeria has not been spared. Crude oil prices have plummeted, oil production cut and it costs more to produce a barrel of oil than to sell it. It has unleashed a fiscal crisis. However, among the more devastating effects of the pandemic is the economic hardship brought

upon businesses and households. The survival of businesses especially in the informal sector is severely threatened while those in the formal sector have been forced to cut cost resulting to many employees losing their jobs, while some others have seen salaries cuts between 30 to 50 percent; further lowering households’ disposable income and purchasing power. To this end, the Nigerian federal government will be making a grave mistake if its plan for spurring economic growth and development across 2023 is focused on federal government expenditure. Basic macroeconomics explains a country’s GDP expenditure decomposition to include private consumption (C), investment (I), government expenditure (G), net export (X-M). The outlook for 2020 is bleak. The decline in household consumption is expected to slow economic growth. The question therefore should be how do we put money in the hands of consumers and how do we stimulate foreign direct investment. This should form the crux of the economy sustainability committee’s plan

for growth. Policies, reforms and actions that induce job creation across sectors, boost productivity, improve competition and attract patient foreign capital are strategies to attain desired sustainability goal. Shifting focus from these fundamentals will yield a plan dead on arrival like previous plans we have had over the years which have stifled rather than stimulate economic growth. More importantly, there must be political will to act. A plan remains a mere plan except effectively executed. Over the years we have had plans and intended reforms in different forms which remained a mirage or worse still made to look like rocket science because of the absence of political will to act. This is a call to the federal government not to waste current crisis by focusing resources and energy on less important things. One way to ensure this is by consulting far and wide and beyond government officials – the private sector has a stake in the economy too. A plan, take Vision 2010, is as good as the quality of experiences and ideas that contribute to it.

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

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

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Thursday 04 June 2020

BUSINESS DAY

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Thursday 04 June, 2020

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

NSE All Share Index

Week open (22-5–20)

25,204.75

Week close (29-5–20)

25,267.82

Percentage change (WoW) Percentage change (YTD)

Market capitalisation

NSE Premium Index

The NSE-Main Board

N13.136 trillion

2,191.80

N13.168 trillion

2,234.86

0.25 -5.86

NSE ASeM Index

NSE 30 Index

NSE Banking Index

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

1,019.87

762.45

127.06

415.23

229.09

1,826.64

1,168.75

989.59

1,048.08

1,094.07 1,096.28

302.77

762.45

304.11

131.81

424.96

228.30

1,834.32

1,204.70

1,020.88

0.44

3.74

1.96 5.61

2.77 5.61

0.00 0.00

0.20 -6.92

-14.78

4.76

2.34 -28.32

or investors who are looking for fundamentally sound stocks that have the potential to yield positive returns in the medium-to-long term, that of Seplat Petroleum Developments Company Plc should not be ignored. Though, developments in the global crude oil market increased the risk of moderated sales of oil companies like Seplat Petroleum Development Company Plc but INVESTOR got clearer the views of the company’s chairman and it’s CEO shortly after their 7th Annual General Meeting held last week in Lagos. From inception, the company made it clear that its shareholders will continue to reap two major benefits which are dividend and growth in their investment. Seplat fulfils commitment on dividend payment, noting that it has no plan to deviate from it despite that 2020 could be a challenging year for many businesses. The Board and Management insist that Seplat is still a stock to “buy”, saying that it remains a resilient business that generates significant free cash flow from a low cost production base. At the Nigerian Stock Exchange (NSE), Seplat Petroleum Developments Company Plc share priced closed at N476.40 on Monday June 1, far off from a 52week low of N397.70. The stock had reached a 52-week high of N657.80. The company has a balanced portfolio split evenly between oil and gas, which is de-linked to oil price; and is focused on delivering shareholder returns through regular dividend distributions and capital growth. Notably, the year 2019 was a year of milestones for Seplat from the successful Eland acquisition to the payout of $59million dividend to shareholders. Speaking to INVESTOR, A.B.C. Orjiako, Chairman, Seplat noted among others that the oil and gas business depends largely on the global supply /demand balance, adding that “the market requires demand recover y to become balanced. The geopolitics among producers and consumer nations is a key determinant for oil price sustenance”. “One area of priority for us is to make sure that the liquidity and the cash flow of the company remains strong and that our balance

Austin Avuru, CEO of Seplat

sheet maintains its resilience and robustness. We set up a liquidity committee which meets regularly to make sure that our liquidity remains healthy and our cash flow remains robust. With free cash of over $300 million as of last year, we will make sure that we maintain healthy balances in 2020. “With respect to 2020 challenges, one thing I highlighted to shareholders was the area of prioritising our gas monetisation. Even before COVID-19, we made sure that our priority was to commercialise gas for the long term, and this is for many reasons”, Orjiako added. “We are committed to identify with the Federal Government in terms of closing the gap in power infrastructure. As a result, we have invested heavily in gas, and today Seplat is happy to say that we provide 30percent of gas to power in Nigeria, and still growing. We are supporting the government and the people of Nigeria in making sure that the narrative of the diversification of the economy is built on the platform of growth in power infrastructure. “At present, statistics show that off grid power supply in homes through gas, diesel and petrol generators is accounting for as high as 20 gigawatts of power. That tells you that the level of pollution in our environment is very high. Seplat will continue to contribute to cleaner energy from its gas www.businessday.ng

supply. Also it is important to note that our gas supply will power the industries, support SMEs and create jobs on a continuous basis. “The other point of course is that gas is lucrative in the domestic market and is a significant contributor to our revenue base. The contribution of gas to our revenue is increasing year-on-year and we expect to see this continue to increase as the volatility in global oil price persists. “We are going to leverage on all of these stated factors and make sure that we would not only survive this trying period, but will remain positive in performance indicators”, he noted further. “We have not changed from our very long-term plan and strategy. We are continuously looking at acquisition opportunities. We concluded a ver y successful acquisition last year, despite the collapse of oil price globally and despite the hardship in the global economy. “ We r e m a i n f o c u s e d o n acquisitions. we have continuously said that we are very committed to price sensitive acquisitions. That means, we do not overpay. So, as the industry changes, it means that the prices that buyers are willing to pay will continue to change and we would adapt and continue to do our acquisitions”, Seplat Chairman said. “The real reason for us to continuously stress the strength of our balance sheet as well as our

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NSE Ind. Goods Index

NSE Pension Index

-0.34

0.42

3.08

3.16

-13.04

-0.02

12.00

-3.15

Seplat: Still a stock to ‘buy’ despite developments in oil market Iheanyi Nwachukwu

NSE Lotus II

free cash flow is because it puts us in an advantageous position. We have a major competitive advantage as a result of this because Seplat, being that we are dually listed in the Nigerian Stock Exchange (NSE) as well as the London Stock Exchange(LSE) means that we have access to global investible capital. “That is why you will see that our cost of borrowing is one of the lowest among peers; our access to new investible capital in terms of equity is very strong. At the back of all of these, free cash, strong and robust balance sheet, availability o f i n t e r n at i o n a l l y av a i l a b l e investible capital, we have a strong competitive advantage to play in the consolidation market as well as acquisitions,” he stated. Austin Avuru, CEO of Seplat who has led the company for the past ten years told INVESTOR that, “The strong cash generation we realised from our low-cost production base meant that our capital expenditures, debt service obligation and dividend distributions to shareholders were more than covered by cash generated from operations by a comfortable margin.” From a strategic perspective, Avuru said 2019 will prove to be an inflection point in the company’s history, as it took a final investment decision (FID) for the 300 MMscfd ANOH midstream gas processing project in March. “Once completed, the plant will process gas produced at the upstream unitised gas fields in OML 53, where Seplat has a 40percent working interest, and Shell’s OML 21. Now that we have gone live, so to speak, with the project in partnership with government, we have set a clear trajectory that will see us become the largest supplier of processed gas to the domestic market once it becomes operational,” the Seplat CEO noted. Avuru believes Seplat faces in 2020 the same challenges as the rest of industry in terms of managing oil price volatility and other macro risks. Earlier this year, Lagos-based Vetiva research analysts revised projections for Seplat culminate in a 2020 turnover of $597million (2019: $698 million), “dragged by smaller crude output amidst oil market slump.” “A mix of net asset value (NAV) and discounted cash flow (DCF) valuation techniques yield a 12-month target price (TP) of N834.80 (previous: N1,188.65). We recommend a BUY”, the analysts had noted. @Businessdayng

NASD Insights:

Viability of Crowdfunding

rowdfunding platforms have gained popularity in recent years as an alternative capital source— both for debt and equity; however, the major challenge of uncertainty of funding remains. We shall discuss the viability of Crowdfunding and the importance of exploring the viability of this alternative source of funding in the Nigerian climate for MSMEs. We need to establish country specific strategies to drive and establish crowdfunding as a viable alternative for funding. 1. Enabling policies The crowdfunding market is in its infancy, especially in developing countries, but the potential market is significant. Putting in place enabling policies, rules, and regulation for crowdfunding such as the proposed Crowdfunding rules by the Securities and Exchange Commission is important. If approved, this will effectively establish crowdfunding as a viable source of capital as it serves as reassurance to the Investors, and entrepreneurs. It also helps in balancing the need for investor protection with capital formation. It is also pertinent to state that addressing policies and regulations that currently make it burdensome for MSMEs to commence and conduct business operations as well as bankruptcy laws for MSMEs is also evaluated. 2. Technology In Nig er i a, te c h n o l o gi ca l advancement has become necessary to ensure smooth operations and continuity of business as evidenced during this Covid-19 pandemic. To ensure smooth running of crowdfunding, platforms must have access to reliable broadband Internet or mobile data networks to facilitate ongoing communication between investors and entrepreneurs. In addition, enabling tools must also be employed to operate freely in order to streamline the business lifecycle. 3. Mitigation of risks associated with crowdfunding The rate of growth of crowdfunding, and its emergence in developing and developed countries, suggests that this phenomenon can become a tool in the innovation ecosystem of most countries economically. It is necessary to craft exceptions to security regulations that allow easy registration for fundraising projects that will also strategically tie crowdfunding to patriotism i.e. establish rules and regulations that support local production and businesses. Conclusion: NASD is rightly positioned to serve as the social web between the closed and private nature of investing in small businesses and start-ups by enhancing the flow of both information and capital to MSMEs.

Thursday 04 June, 2020

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

United Capital Investment Views

Equity market: Insurance sector performs the magic

he equities market sustained its recent bullish trend as the NSE-ASI ended two out of the week’s three trading days in the green territory. On a week-on-week (w/w) basis, the All Share Index trended higher by 0.3percent to close the week at 25,267.82points, while year-to-date (YtD) return improved to -5.9percent. In terms of market activities, the average volume and value traded increased by 19.4percent and 21.8percent w/w to 418.5million units and N4.5billion respectively. Analysing the positive performance across all the sectors under our coverage, four out of the five sectors trended northwards w/w. The Insurance (+3.7percent) sector led the green campaign, followed by Industrial Goods (+3.1percent), Consumer goods (+2.3percent) and Banking (+0.4percent) sector. The performance of the sectors was buoyed by the following stocks : MANSARD (+18.71percent),

mixed bag of buying and selling interest in the market as the urge to take profit on tickers in the money fuels the supply side while inflows from investors with net OMO maturity spur the demand side Mon e y Market : MPR reduction spurs activity at the SLF window System liquidity started the previous holiday shortened week in a tight state, but improved later in the week, thanks to c. N189.2billion net OMO inflow (OMO maturity: N303.2billion and OMO sales: N114billion). Also, a surprise reduction in the monetary policy rate by 100 basis points (bps) on Thursday, further spurred activities at the CBN’s lending window (Standing Lending Facility) to its 4-month high. Overall, average rate at the interbank window - open buy back (OBB) and overnight (OVN) rates crashed from 15.3percent levels at the start of the week to end the week at circa 2.6percent. The CBN had a successful week at the primary money market. Notably, the apex

CUSTODIAN (+7.69percent), BUACEMENT (+7.69percent), WAPCO (+2.67percent), NB (+9.62percent), GUINNESS (+12.68percent) CHAMPION (+9.64percent), ACCE S S (+5.97percent), GUARANTY (+1.05percent), STANBIC (+9.98percent). On the other hand, the Oil and Gas sector index fell by 0.3percent w/w week, dragged by ARDOVA (-10percent). In the telecommunication space, MTNN (+0.87percent) closed the week positive while AIRTELAFRI remained flat. Overall investor sentiment was positive during the week, as market breadth came in at 1.7x - 33 stocks gained, while 20 stocks declined. For this week, we expect a

bank, on behalf of the FGN, successfully rolled over all maturing FGN treasury bills at an average interest rate of 3.06percent - same as the last auction. Also, the monetary authority guided rates across all tenors at the week’s sole OMO auction, to single digit - the first time since 2008. This was as bids worth 2.2x the offered amount turned up at both auctions. Elsewhere, sentiments were muted at the secondary market as market participants focused their attention on the new bills available at the primary market. In all, average NTB yield fell decline by 5bps to 2.12percent while average OMO yield was up 3bps to 6.05percent respectively. This week, in the absence of any surprise/sizable CRR debits,

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we expect interbank rates and money market yield to remain at low single digit, as inflows from OMO (N155.78billion), retail FX refunds as well as the funds from the CBN’s lending window, support the overall liquidity levels in the system. Bond Market: A bullish week for bonds Sentiments at the domestic secondary bond market was bullish as investors scrambled for high-yielding bonds amid the sharp decline in interest rates at the primary money market space. Thus, the average bond yield declined 29bps w/w to end the week at 10.11percent. Similarly, we saw some pockets of buying interest in the Nigerian Eurobond space as oil prices remained firm above $30/barrel during the week. Specifically, the average yield on FGN Eurobond decline by 4bps w/w to close at 8.73percent. Meanwhile, average yield at the corporate Eurobond segment fell sharply by 36bps w/w to close at 11.54percent. This week, we expect crude oil prices to stay above $30/ barrel as OPEC+ members sustain their current supply cut into the month of June2020. This should continue to encourage foreign investors to cherry pick Nigeria’s Eurobonds. Similarly, we expect further interest in the domestic bond market this week as we envisage improvements in the external dynamics and rates at the money market space continue to trend lower FX Market: I&E turnover touch its highest since devaluation In the previous week, the market dynamics in the FX market remained unchanged at the official market as rates were pegged at N361/$. The naira depreciated against the dollar at the I&E FX window even as we saw turnover as at Friday spike to its highest ($156.8million) since the March-2020 devaluation. Notably, I&E rate closed the week at N386.33/$ (previously N385.94/$). H o w e v e r, t h e n a i r a appreciated in the parallel market, to N445/$ (previously N455/$) as the CBN gradually commences FX intervention sales. Elsewhere, the gross external reserves continued its recent uptrend, rose by 1.8 percent w/w to $36.5billion.

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Thursday 04 June 2020

BUSINESS DAY

cityfile Lagos empowers over 2,200 vulnerable with start-up packs JOSHUA BASSEY

agos State government says it has in the last one year empowered over 2,200 vulnerable women and young adults with startup packs to enable start small businesses towards becoming economically self- reliant. Cecilia Dada, the state commissioner for Women Affairs and Poverty Alleviation (WAPA), stated this at the 2020 ministerial briefing in Ikeja, on Tuesday. Dada said that the beneficiaries were drawn from the three senatorial districts of the state, including retiring officers, civil servants, widows, physically-challenged, among other vulnerable group. According to her, the government in the period under review also organised a series of programmes to improve the status of women and make them economically independent. Short term vocation and skill acquisition programme such hair braiding/weaving, tie and die, event decoration, cakes and snacks, soap and pomade, among others, were also organised to tackle unemployment among the female gender. Dada said that at the end of each training programmes, which held in Victoria Island, Ebute Metta, Ojo, Ajeromi-Ifelodun, Badagry, among other areas, participants received startoff packs to help kick-start

their businesses. Also, in a bid to sustain the general wellbeing of the gender in the state, the department organised medical screening for 500 women and young adults on cervical screening, breast screening, sugar level examination, eye tests and provision of eye glasses where necessary. She added that the screening was carried out to ascertain their health status and checkmate bigger challenges that may arise in the future. The commissioner noted that the ministry also sensitised men on the dangers of domestic violence against women in line with the Global Campaign on gender equality by the United Nations, the “HeforShe” campaign launched in January this year. On poverty alleviation, Dada said that in furtherance of the administration’s T.H.E.M.E.S. agenda and a greater Lagos, the ministry empowered 1,050 vulnerable and indigent women, widows and artisans and graduates of the skills acquisition centre. The commissioner the ministry also trained 150 grassroots women in Badagry in agricultural enterprise, adding that the mega empowerment held in January, has boosted economic activities and improved lives of residents through the distribution of grinding machines, sewing machines, hair dryers, popcorn machines, among others.

Adamawa: Police arrest officer over killing of motorcyclist

he police in Adamawa have confirmed the arrest of one of their own, who allegedly shot and killed a commercial motorcycle operator, Arabo Tambajam, (20) in Maiha local government area of the state. Sulaiman Nguroje, spokesperson of the police Adamawa, who confirmed the development in Yola, said the incident occurred on Monday at about 9 a.m in the said local government area. “The officer is currently under arrest and the Commissioner of Police (CP), Olugbenga Adeyanju, has given directive for thorough investigation into the matter. As soon as the investigation is completed, the suspected officer will be charged to court for appropriate action,” he said. The CP, according to Nguroje, also warned officers and men that they are given riffles to protect and not to take lives of innocent citizens. Nguroje, however, ap-

pealed to the citizens of the state to desist from taking laws into their hands by destroying public property. Idi Amin, chairman of Maiha local government council, however, described the incident as “unacceptable”. Amin assured the family of the deceased and the people of Maiha town that the local government council would follow the case until justice was done. “I am assuring the people that the management of the local government council would not rest until justice prevail,” Ameen said. He called the locals not to take laws into their hands as government was making efforts to ensure justice was done. Tambajam was allegedly shot and killed by a police officer at a checkpoint after he allegedly refused to give the police N100. The deceased was said to have earlier given the officer N50 to allow him pass, but refused and demanded for N100. www.businessday.ng

Ikeja Electric Celebrates Children Day with kids in Water Side Community, Amuwo Odofin LG Area, Lagos.

Lagos moves to boost commerce, grants licenses to 184 money lenders JOSHUA BASSEY

n a bid to commerce and economic activities, the Lagos government has granted licenses to 184 money lenders in the state. The state commissioner for Home Affairs, Anofiu Elegushi, who disclosed this on Tuesday at a ministerial press briefing to mark one year in office of Governor Babajide Sanwo-Olu, described the money lenders as mini-micro economic stimulants that are helping to create jobs, generate wealth, alleviate poverty and widen the tax net. He said that their activities have added to increase the socio-economic status of the state through the provision

of enabling environment for small scale businesses and entrepreneurship. “They make easy loan accessible for our citizens. They aid commerce and provide employment for the youths. It is cost effective for grassroots financing and the requirements are simple and straight forward. The forms are available and the processes are simple and friendly. “During the COVID-19 lockdown, the ministry automated the processing of money lending licenses, so as to ensure a hitch-free renewal and fresh applications. “As at today, we have issued 184 licenses, 22 applications are in progress while one was declined out of the total 207 applications received,” Elegushi said.

He noted that automation of the money lending processes would help address several issues of trust that had overtime, bedeviled the practitioners. The commissioner said prior to the automation of the money lending processes, the ministry held a stakeholders’ forum on the need to examine the laws guiding the activities of money lenders in the state. According to him, reviewing the laws will make members of the public repose more confidence in the practitioners. He reiterated the resolve of the government to continue to create an enabling environment for easy loan accessibility to the citizens. Elegushi said that this was with emphasis on pragmatic strategies for achieving posi-

tive and cost effective results in grassroots financing, which would invariably help in achieving the T.H.E.M.E.S agenda. He said that the money lending practitioners constituted key players in small and medium enterprises and were promoters of economic growth and prosperity of the state. The commissioner said that he was hopeful that other practitioners in the business of money lending would key into the initiative by the government. He called on all money lenders operating in the state to obtain valid license from the ministry for a smooth and legal operation of their businesses. Elegushi also advised borrowers to only patronise licensed money lenders.

Oyo Assembly raises concern over rising killings of rural dwellers REMI FEYISIPO, Ibadan

yo House of Assembly have expressed concern over it described as rising killings of innocent citizens in some rural communities in the state. Unknown gunmen reportedly invaded three communities in Akinyele local government area of Oyo State and killed three people. It was alleged that cattle herders attacked the residents of Ikereku, Pade, Olanla and Babalola villages all located within the local government area. At a plenary on Tuesday, members of the house, including Kazeem Tunde Isiaka, San-

jo Adedoyin, Abiodun Fadeyi and Asimiyu Alarape noted with dismay the rate of killings in rural areas of the state. Isiaka, while leading the call for the executive arm of government to address the incidents, alleged that gunmen have been terrorising parts of Akinyele and Oyo East local government areas of the state. The legislator noted that the primary purpose of government was the protection of lives and property, hence the need for the executive to rise to the occasion. He said: “Mr Speaker, as we are all aware, security of lives and property is the responsibility of government. Onala, Ikereku, Pade villages that border Oyo East have

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been under attacks. Villagers and farmers are now living in fear. It is high time the executive constituted Amotekun corps. This will be the right step in the right direction”. Speaking further, the majority leader said: “If Amotekun had been in operation, all these things will be a thing of the past. It is the main reason why we passed the Amotekun corps. It happened in Oriire local government area. It is high time the executive arm took urgent action so as not to be exposing our people to unwanted attacks and provocations.” Deputy speaker of the house, Abiodun Fadeyi said whatever was delaying the operation of Amotekun corps in @Businessdayng

the state should be addressed. “There is a need to implement the Amotekun corps now. Amotekun is operating in Ekiti and Osun, but whatever is delaying it in Oyo State should be addressed.” On his part, Alarape urged the state government to begin the implementation of antigrazing law. “We have made two laws in the state, the anti-grazing law and the Amotekun corps law. These two laws are not in operation. It has happened in Akinyele and it has happened in Ogbomoso, who knows where they will strike next? I want to use this opportunity to appeal to the state government to implement these two laws,” he said.

Thursday 04 June 2020

BUSINESS DAY

FEATURE Agro Geo-Cooperatives: NIRSAL’S game-changing strategy for post-COVID agriculture financing in Nigeria ONYINYE NWACHUKWU

ike other sectors of the economy, agriculture is being profoundly and negatively impacted by the coronavirus. In many countries, the disruption of supply of goods and services globally has resulted in the loss of revenue from agribusiness, reduced productivity of farms and food processors, large scale waste of perishable farm produce, and many other challenges that have far-reaching effects on the global population. For example, the United Nations says coronavirus disruptions could double the number of people globally without reliable access to nutritious food, to 265 million. The projections are especially grim for regions that were already grappling with food security before the pandemic. This includes sub-Saharan Africa which the World Bank says could be moving from a health crisis to a food security crisis. The World Economic Forum puts it bluntly: “COVID-19 is set to radically exacerbate food insecurity in Africa.” The continent’s challenges are complicated by some negative developments which the pandemic has brought on: lockdown measures imposed by governments across the continent have disrupted agricultural supply chains and nations dependent on food exports are severely impacted by the reluctance of developed countries to allow food export at previous levels. The prognosis from the Food and Agricultural Organisation is no less grim: “We expect disruptions in the food supply chains. For example, restrictions of movement, as well as basic aversion behaviour by workers, may impede farmers from farming and food processors – who handle the vast majority of agricultural products – from processing. Shortage of fertilisers, veterinary medicines and other input could affect agricultural production. Closures of restaurants and less frequent grocery shopping diminish demand for fresh produce and fisheries products, affecting producers and suppliers. Sectors in agriculture, fisheries and aquaculture are particularly affected by restrictions on tourism, closure of restaurants and café and school meals suspension.” With regard to Nigeria, Ayodeji Balogun, CEO of AFEX Commodity Exchange Limited, Nigeria’s first private-sector commodity exchange firm, recently identified some of the challenges that face Nigerian agriculture in the wake of the pandemic and subsequent lockdown. They include price spikes, labour shortages, logistics challenges, shortage of fertilisers and other inputs and limited access to markets. “Transport restrictions and quarantine measures are likely to

impede farmers’ access to markets, curbing their productive capacities and hindering them from selling their produce,” Balogun said. There have also been reports of Nigerian farmers complaining about crops rotting in the fields or at the depots waiting for trucks that never arrive. Other farmers also say the lockdowns are hindering farm inspections by banks, putting their financing at risk. This results in difficulty hiring tractors and other equipment which are crucial to many farming operations. These developments and forecasts have prompted urgent action by major players in agribusiness including the Central Bank of Nigeria (CBN) and the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL Plc), a non-bank financial institution, itself a wholly-owned and incorporated entity of the CBN, established to de-risk agriculture finance and facilitate agribusiness across entire agricultural commodity value chains. Even in normal times, NIRSAL’s role in agribusiness is crucial, being the intervention agency that provides guarantees and other incentives to encourage the financial sector to lend to agriculture. So, it comes as no surprise that the team at NIRSAL is thinking outside the box during the present crisis. As the range of its initiatives and activities demonstrate, innovation is part of NIRSAL’s DNA. One of the most important in this range of strategic initiatives is the NIRSAL Agro-Geo-Cooperative system of organising, structuring, risk-managing, financing and controlling smallholder-based primary production agriculture otherwise called Farming. This is an innovation that NIRSAL introduced in 2019 and which it has updated as a smart strategy to mitigate the harsh impact of the covid19 pandemic on agricultural productivity and food security at this challenging time for the nation as well formally introducing the model at scale in order to mainstream millions of smallholder farmers to formal finance and formal markets Crucially, the innovative model focuses on the most critical aspect www.businessday.ng

of agriculture especially in a developing country like Nigeria: primary production. The central relevance of this focus is underscored by the FAO: “Smallholder farmers represent the biggest employment sector in rural areas of the developing world, and they are also the most important contributors to global food production. More than 90 percent of the farms in the world are family farms; they produce 80 percent of the food and they operate 75 percent of the farmland.” The AgroGeoCoop-based farming model is a unique system that groups adjoining farmlands in geographical areas that have been identified as being suited for specific commodities. It is an improvement on the suboptimal practice of smallholder farming on small, unconnected parcels of land. Its unique Geo or farmland-based cooperative approach facilitates the agglomeration of large parcels of farmlands which makes it possible to introduce Precision Agriculture tools (Remote Sensing, Deployment of Unmanned Aerial Systems, satellite-based Global Positioning Systems etc) resulting in the optimisation of results. The Agro Geo-Cooperative model is anchored on the fundamental theory that it is the farmland that makes the farmer, not the other way round. A basic feature of the AgroGeoCoop is the GPS-enabled Geo-tagging of each farmer to his land. This has solved the problem of identity and accountability which is a major risk element in smallholder agriculture finance around the world and particularly sub-Sahara Africa, Nigeria inclusive. Accordingly, the model groups farmers based on the contiguity of their farmlands, with each farmer retaining what is originally theirs and becoming partakers in large, structured farming projects. The bigger and more contiguous a GeoCooperative is, the faster and easier for it to have access to structured finance, quality inputs and structured markets through NIRSAL’s facilitation. To ensure improved outcomes, NIRSAL has invested in significant technical and technological capabilities to support and monitor

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this system of structured primary production. This is because understanding smallholder farmer data management requires defining from whom data is captured and the methodology of the data capture, the analytics and ultimately its distribution and usage as intelligence, information or as a decision support system This has led NIRSAL to acquire and deploy geospatial tools and platforms to enable field-mapping activities such as Know Your Leader (KYL), Know Your Customer (KYC), Know Your Farm (KYF) and Know Your Neighbour (KYN) which are critical elements in profiling the human and the geographic elements of the AgroGeoCoops. The array of field-ready equipment includes GPS devices, drones, mobiles, GIS-enabled tablets and BVN Enrolment/Verification Machines all linked by GSM Networks, satellite and Cloud synchronisation capabilities for back-end data collection, validation and rendition. To complement and strengthen the value of these tools and platforms, NIRSAL is also leveraging its partnerships with institutions such as NiMET and Microsoft which provide both Agrometeorological and embedded data capture capabilities for decision support to further enhance farm operations. The bottom line: through such technology-enabled, risk-controlled systems, farmers enrolled in NIRSAL’s AgroGeoCoops have higher chances of success in access to structured finance, quality inputs, extension monitoring, weather information, aggregation services, access to markets and other timely support. AgroGeoCoops, the source of primary production, are also the centrepiece of NIRSAL’s Mappingto-Markets strategy (M2M), an end-to-end approach to agriculture finance whereby NIRSAL ensures that all segments of agricultural value chains are linked in a logical sequence to their immediate markets, with near-zero cash transactions amongst the value chain actors. This is feasible because of the guaranteed trade relationships that would be established between the @Businessdayng

NIRSAL AgroGeoCoops on the one hand and identified off-takers on the other hand coupled with the strategic trade linkages that would feed off the ecosystem for inputs, mechanisation, research and adaptive technologies, value-added processing and logistics services. Thus the NIRSAL AgroGeoCoop ecosystem will bring clarity, structure and cash-flow visibility and tracking to banks, investors other financiers that will enable them to lend with confidence from their balance sheets and hugely complementing government intervention financing efforts in agriculture. Already, NIRSAL has set for itself a clear and measurable target of creating 16,000 Agro GeoCooperatives on 4 million hectares of farmland and enrolling about 8 million farmers across Nigeria expected to produce about 12 million metric tonnes of Grain Product Equivalent (GPE) annually, over the medium to the long-term time horizons. To ensure the success of this massive project, NIRSAL has trained and primed its Project Monitoring, Reporting and Remediation Officers (PMROs) in the 36 States of the Federation and the FCT to assist farmers, farmer leaders, aggregators and other interested participants to meet the pre-qualification requirements. The PMROs are on hand nationwide to guide participating farmers through the enrolment processes which include identifying their farm’s geographical coordinates and size, electing Agro Geo-Cooperative leaders as well as the free registration which can be done online or offline. In order to open up the Agro Geo-Cooperatives project to the thousands of eligible farmers, NIRSAL is reaching out to all relevant stakeholders, including community leaders, individuals, enterprises, corporate bodies, graduates, N-POWER Beneficiaries, active and retired leaders and farmers in The ADP programme, World Bank FADAMA Programme, USAID MARKETS Programme, IFAD Value Chain Development Programme, The World Bank Climate Adaptation and Business Support Programme, AfDB Agric Programmes, the DFID’s Propcom Maikarfi Programme, the SASSAKAWA Global 2000 Programme and others. The GeoCooperative model for smallholder farming has two broad components. The first is a rigorous and well-thought-out structuring of primary agricultural production based on a deep but practical understanding of historical and current trends and practices. The second is the maximisation of appropriate technologies. Together, these two elements have the potential to have a game-changing impact on Nigerian agriculture in the wake of the coronavirus pandemic and beyond.

Thursday 04 June 2020

BUSINESS DAY

Garden City Business Digest Nigerian Content Board intervenes in NLNG’s N970m dispute with Nigerian company, Macobarb Ignatius Chukwu (Port Harcourt) & Samuel Ese (Yenagoa)

he Nigerian Content Development and Monitoring Board (NCDMB) is believed to have intervened to arrest the deteriorating dispute between the Nigeria Liquefied Natural Gas (NLNG) and a Nigerian company, Macobarb International in an almost N1Bn claim and payment disagreement. Macobarb wants to be paid about N970m by the NLNG for what it termed wrongful termination of a contract and value for downtime and equipment on site over some period of time. Several organizations have so far received tried to mediate in the dispute in the past years including the Nigerian National Petroleum Corporation (NNPC), Shell, Office of Attorney-General of the Federation, the Economic and Financial Crimes Commission (EFCC). Others include the Independent Corrupt Practices Commission (ICPC), the Senate Committee on Gas, Rivers State House of Committee on Public Complaints, Senate

Simbi Wabote

Local Content Committee, etc. Macobarb was said to have claimed that these organizations usually start with anger and sympathy for the Nigerian company but the moment they reach the other side, the matter dies without a verdict. The complaint was said to have got to the NCDMB in October 2019 and the board was said to have invited both parties and the first sitting was held about December 10, 2019 in Yenagoa head office of the board. It was gathered that a

high-ranking official of the board, Alexis Emele, chaired the reconciliation meeting. A source said Macobarb asked for what it calls ‘Standing Time Amount’ when the NLNG kept the company’s equipment and key personnel doing nothing on offshore contract for 559 days. The Nigerian company said it calculated the claim with contract standing time rates to get N958m plus outstanding balance on turnstile and vehicle barrier Macobarb sup-

plied the NLNG as part of the contract, all totaling N970m. Macobarb has complained to numerous organizations that it had been rated as a top performer in contracts with the NLNG until it was upgraded and awarded a Turnstile and Security contract in 2014. The company said the contract’s biggest term was that there would be no mobilization fee paid to Macobarb but that every milestone achieved and approved would be paid for, failing which the defaulter would pay penalty. The CEO of Macobarb, Shedrack Ogboru, once told newsmen that when it was time to pay the first batch, after all due technical approvals, one man in NLNG stopped payment without offering any reason. He said this ugly and unwarranted development affected the job so badly that performance was impossible. He said he had taken loans from a bank to execute the early stages of the contract, only for payment t be stalled. He wept that the NLNG only turned round to terminate the contract, leading to protracted dispute. He had told newsmen that most of

the items were procured from Europe and supervised during fabrication by a foreign consulting firm nominated by the NLNG to ensure international standards and good quality as contained in the contract terms. The NLNG had on their own told newsmen that the contract was terminated due to non-performance. The matter had dragged on but the Nigerian company said it was being pushed to go to court with a huge multinational that would use its weight to crush it in court. At the NCDMB panel, the NLNG was said to have insisted that it terminated the contract on grounds of nonperformance and paid the contractor the value of work done. Macobarb was said to have rejected this, saying terms of the contract were grossly violated by pushing the company into non-performance through non-payment of milestones. It was gathered that both sides tabled their positions and that the NCDMB asked them to report back on a date early in January 2020. The NLNG was said to have disputed figures tabled by Macobarb but the

mediators (NCDMB) were said to have asked Macobarb to furnish the Board the information itemizing all outstanding claims being allegedly owed by NLNG on the contract. The Board was said to have also asked the NLNG to revert back with information concerning the status of payments on demobilization for the contract and the 20ft container kept in their place by the contractor as part of the contract terms. Expectations are high especially on Macobarb’s part for the matter to be resolved by the NCDMB instead of resort to court so that other pressed Nigerian companies can breathe a sigh of relief. Many workers, bank loans, and sub contractors are said to be suffering untold hardship of non-payment of salaries and jobs done since the dispute started years ago. When contacted, the media department of the NCDMB asked for more time to respond and probably give details. Macobarb’s plea, however, is for the NCDMB to compel the NLNG to pay them the sum of N969.920m (N970m) and to lift the “blacklisting” or the sanction of Macobarb from rendering services to NLNG.

Eroton E&P intervenes in 60 host communities in Rivers with palliatives Port Harcourt by Boat

IGNATIUS CHUKWU

il host communities have looked up to their corporate neighbours to intervene in the days of coronavirus. Most oil companies have justified the expectation. Now, Eroton E&P has done so in about 60 communities in Rivers State with food items (palliatives) as the crisis of the COVID-19 pandemic rages on around the world. Eroton is a joint venture with the Nigeria National Petroleum Corporation (NNPC) in the operation of Oil Mining License 18 (OML 18) which until 2014 belonged to SPDC in the Cawthorne Channels and areas around Asari -Toru local council area as well as Alakiri and Orubiri (Okrika) areas. Eroton, one of the indigenous oil companies taking over marginal oil fields in the Niger Delta, seems to want to show the host communities in the oil region the difference it may make to allow indigenous oil firms to operate in peace and the numerous benefits that can accrue from a healthy relationship with oil firms. The palliatives were being delivered at collection points in Port Harcourt and Okrika for host communities which cut across five local councils of the state, including Degema, Asari Toru, Akuku Toru, Bonny and Okrika lo-

cal council areas. These were received by their representatives at their respective liaison offices in Port Harcourt, Obio/Akpor and Okrika local council area. The operations director of Eroton, Emmanuel Thompson, led the distribution to liaison centres around the state capital. Eroton E & P said it had earlier participated in the oil industry intervention led by the Nigeria National Petroleum Corporation (NNPC) under the Independent Petroleum Producers Group (IPPG), an organization of Nigerian indigenous oil producing companies. Thomson who spoke to newsmen said under the IPPG, Eroton provided ambulance, test

kits, surgical and non-surgical masks, hospital beds, goggles and oxygen concentrators. He said the first stage of the interventions was sensitization of host communities, giving of sanitizers, and hand gloves to host communities. The third stage is palliatives of food to communities which most communities seem eager to participate in. He said: “The 4th stage would be provision of palliatives to the Rivers State government.” Some of the items include 1000 bags of rice; 1000 280g tin tomatoes, 1. 750 cartons of noodles (Indomie brand) , 1000 1 litres of vegetable oil, etc. Thompson said: “We have been interacting

Eroton team handing over palliatives to host communities

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with the host communities and we had given hand sanitizers, gloves, etc. We knew what their needs were and we agreed with them that the next thing to do is food palliative, which is what we have just delivered today. “We have been working hand in hand with the communities and we know ourselves. What we expect is for them to partner with us. Eroton is not going anywhere, we are right there in the communities and we expect support from them. “Our relationship has been very good. The chairman of one of the cluster communities is here and we can state that our relationship is excellent, though no relationship is 100 per cent. The host communities are divided into clusters such as Daa 1, Daa 2, Daa 3, Iloma 3 and one other, all about five clusters of bout 60 communities.” Most of the community leaders and cluster chairmen seemed very happy to receive the intervention. The cluster chairman of Degema One Cluster Development Board, an engineer, Firimabo Bob Ogunga, said the palliative was going to be a big relief to the host communities because this came at the peak of needs. “Globally, there is crisis due to the virus. It is not only in Nigeria. Many countries have gone into recession and many bad things are happening concerning how to feed and survive. In some developed countries, palliative is delivered house to house, but in Nigeria, it is not possible that way.” On how the intervention would go down well without rancour, the cluster boss said: “This is not the first time to get things like this from them. At Christmas they also give us these things. We evenly distribute it. We also have a system of sharing and distribution. As soon as movement resumes, we move these things to the communities mostly of Bille and Krakrama.”

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Thursday 04 June 2020

BUSINESS DAY

Corporate Social Impact

Onuwa Lucky Joseph Editor, (08023314782)

How Corporate Organizations activate their vision of a Better Nation (1) ONUWA LUCKY JOSEPH

o man is an island, so penned the poet, clergyman and soldier John Donne. That line resonates with thinking people everywhere, more so under the Covid 19 dispensation where a virus that originated in Wuhan, China, has spread like wildfire round the world. It’s changed the dynamic of the world in more ways than one, but ultimately it’s been the resultant herd response the WHO demands that’s rubbing people the wrong way. The individual in us finds it extremely difficult to abide the canons and ordinances of the modern day dictator organisation in Washington. So what we see in most parts of the world are individuals insisting on their right to live the way they want to live rather than being stymied by the WHO and its satellite representatives embedded on governments worldwide that take their marching orders from the organisation. Covid 19 will neither be the first time nor last time a seemingly innocuous occurrence in some corner of the world gives everyone the jitters worldwide. The World Wars 1 and 2 are prime examples, which may be why every time a small agitation threatens to snowball, people start thinking another world war is somewhere in the offing. So far, it has not, but conspiracy theorists (sometimes wrongly labeled, I believe) are putting two and two together and reaching conclusions that foretell no peace for the world in the near

Nnamdi Okonkwo, MD Fidelity Bank

Raymond Dokpesi, Chairman Emeritus, AIT

future. There’s another version of the No Man is an Island axiom, one done a little less reflectively by the electro funk pop group Warp 9 in the 80s. Their version was not rendered in a cause and effect logic (where one man’s action or what happens to one man affects others), but rather as prescription for one man/woman who rather than suffer melancholy in isolation ought to mingle so to have a good time as ‘somewhere there’s a party tonight’. Wherever you live in the world, there’s a comingling, especially at nightfall, of people who feed off of each other’s energy to create that electric buzz that keeps the world lit up with good cheer. What we have found via observation and experience as afforded by Covid 19 is that the need to mingle is a basic human need. Now, think about this: Covid 19, in the beginning, had the effect on people, of obedience to ‘draconian’ rules drawn up by govern-

ments and regulatory authorities ostensibly to help keep folks alive. But over time, more people have demonstrated an aversion to safety, preferring instead to live like they are used to despite the Covid 19 overhang. More and more people don’t seem to care. Except for places where it’s mandatory, it’s hard to find many people wearing face masks. Oh, sure, you shouldn’t have it on all the time, but many don’t even have any face mask on them. Social distancing? Have you seen our markets? And the banks, and everywhere else? And now government having no arguments left, have been stampeded, so to speak, into reopening churches and mosques. ‘Social distancing’ is becoming another politically correct phrase more to be mouthed than practiced. People hug, people shake hands, and, wonder of wonders, people are still kissing near strangers. It helps not that there’s all this wild dissonance in the messaging

about Covid 19 and its real impact on people and the economy. ‘Conspiracy theorists’, eager for the world to move on, have put ‘the lie’ to some of the pronouncements from WHO and NCDC who seem to be more eager to inflict fear and would rather not hear of any progress by way of preventives or curatives for the malady by indigenous people anywhere aside what they are force-fed. In Nigeria, for instance, the only images that manage to make it out of isolation centres is not of patients in any danger; rather we’ve seen live party sessions, with a lot of healthy looking folks who don’t seem down with anything. It hasn’t helped in the least that Raymond Dokpesi, of all people, came out of isolation to voice his surprise at being treated with wholly anti-malarial drugs, this at a time when government’s formal position was totally anti Chloroquine therapy. There’s way too much obfuscation and the fight clearly is losing steam. For all the moneys invested and still expected, there’s got to be a better way of waging this war which was hyped up as the fight of our lives. Many corporate organisations, like many governments, like many citizens, were caught flat-footed by the rude intrusion of the Corona virus. It was all so sudden. And engaging with it became more a matter of contingency than strategy. Organisations found they had to go, almost unthinking, with the flow, as directives came from government by way of the WHO and the NCDC. It’s as yet unclear to many how they will navigate their organisations going forward.

The irony of the human experience, unfortunately, is that what comes as a surprise the first time it comes can keep coming as a surprise again and again. Africa is our best example in that regard. For the most part, we have failed to gain mastery of our environment. With regards to development, we have preferred the haphazard and shunned the deliberate. Where there used to be five and ten year plans, now there are none, especially in Nigeria. Too much money is spent on nothing; a most noxious example being the billions being spent on feeding kids in school at a time when kids are not in school. And this not drawing the kind of flak it ought to. Continuing next week, we are going to look at how, corporate organisations being no islands in any way or form, can learn from corporates elsewhere who are known to be net enablers of their environments and this in a strategic manner. Nothing designed to last is built haphazard. We’ll tease out the tools and implements used to fashion the socially conscious image that many a corporate is envious of.

A 4 DAY WORK WEEK?

ome people are clamouring for a 4Day work week instead of the traditional 5 which sometimes spills into 6 and 7. Would 4 days of work and 3 of rest make people more productive? Send your thoughts to csrmomentum@gmail.com.

Two Decades and a Half: A Legacy of Thanksgiving and Benevolence (A family reminisces on the grand gifts of Gratitude and Giving left them by their parents)

A “

s we express our gratitude, we must never forget that the highest appreciation is not to utter words, but to live by them.” – John Fitzgerald Kennedy In the context of a conscious, heartfelt appreciation and not a national holiday, thanksgiving is one of the highest virtues known to mankind. Many say it’s easy to complain about your life until you have someone else’s life to compare to. Hence our attitude must not always be about the big wins but also the low-hanging fruits. Gratitude. Seemingly insignificant things like peace of mind, good health and the warmth of family and loved ones are often overlooked and very easily taken for granted. The big questions remain: How do we express our gratitude for the things we are thankful for? Do we say a short prayer, simply say “thank you” to a giver or reflect on the things we are grateful about? How do we ultimately demonstrate appreciation? The names of Rev. David Fun-

Rev. David Funsho George and Dr. (Mrs) Olayinka Adejumoke George

sho George and Dr. (Mrs) Olayinka Adejumoke George may not be familiar to most, but those who knew them will almost certainly remember them for three things: Humility, Gratitude and Charity. This article doesn’t seek to publicize www.businessday.ng

who they were but to commemorate what they stood for and to emphasize that there is no greater devotion than service to humanity. R e v a n d D r. (Mrs) George were citizens of Heaven. They were loving parents to their children and guardians to many including children not biologically theirs. They were best known to be devoted Christians who exemplified Christ-like humil-

ity, compassion and love, the type God commanded us to express. Solution providers of sorts, they tried to come to the aid of almost every person who sought their help. They did this ever so selflessly and with gratitude to God,

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from whom their earthly wealth came. Exactly 25 years ago, on the evening of May 28, 1995, their lives were cut short as they were settling in to dinner and breaking their fast. It was a very sad day unforgotten by many and a particularly dark one for their children; the youngest barely 4 years of age at the time. Now we may ask ourselves, how does all of this add up? What’s the correlation between gratitude and giving? Expressing gratitude gives us positive emotions. In fact, according to Laura McKnight, author of Do Good, Feel Better and advocate of the connection between philanthropy and positive psychology, practicing gratitude goes handin-hand with giving. Her research also suggests that feelings of gratitude are one of the most powerful benefits philanthropy can offer to the person doing good for others. In giving, with any gift and for whatever cause, man finds purpose. Whether it is food, monetary @Businessdayng

aid, disaster relief or donation to a trust fund; when we give, we contribute to improving quality of life for others. This in itself is true love. The George family will observe this 25th year memorial of Rev. and Dr. George with utmost gratitude to God. We their beloved children will demonstrate our appreciation by giving back to families in the New Oko-oba, Agege area of Lagos, continuing the legacy of gratitude through acts of kindness.

“Blessed be the name of the Lord From the rising of the sun to the going down of the same The Lord’s name is to be praised Jesus is high above all nations His Glory above the Heavens” – Rev David Funsho George (August, 1986) (Kindly send feedback to 08023314782 / csrmomentum@gmail.com)

Thursday 04 June 2020

BUSINESS DAY

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

Curiosity is the missing link

omebody once asked me the origin of a company and when it was established, and I did not have the answer. When I was done with the conversation, I went to research and got the information. While doing that, I got other details about the company, I realized it was a pioneer in its sector and was responsible for certain key inventions and legislation. When I was done, I felt refreshed but there was a nagging question in my mind, “how come I never asked those questions”? I had known about the company for as long as I have been a professional, but I had not thought to check out their history or additional information about them. Have you worn these shoes before? I am sure you have! You go for a meeting and someone asks a question about a transaction you are on and you are wondering how come I never asked that? How come this never crossed my mind? For some of us, we are almost outplayed in our own transactions sometimes by other members of our team who seem to know questions that never cross our minds. It is often said that the quality of our questions determines the quality of the answers we will receive. It is true. The question then is, how can we improve the quality of our questions or better put, what makes us ask better questions? The answer is curiosity or more plainly put, hunger. As lawyers, we must be hungry for knowledge. We must seek to understand and earnestly search to know. We are taught to use precedents, but this has impacted on the capacity to fact find and the quality of our research. Before you make allusions to privity of contract in a memo to a client, do you understand the reasoning behind it and related concepts? Before you engage with a company, have you mastered their constitutional documents and the general business information about the sector? Before you begin to join organisations, do you

Plot or not, President Buhari had enough time to confirm Dongban-Mensem as Appeal Court President – Kunle Edun

F Oyeyemi Aderibigbe

care to check their history and key persons involved in the development of the organisation? Are you interested in understanding your market better? As lawyers, we are often taught to answer questions. I have since learnt that lawyers who are the best at answering questions are often better at asking questions. In fact, the secret to their dexterity is in their ability to ask the right questions. If ever you have asked how come your senior knew to ask a client a strategic question, just know that it is not just because of experience, the person has learnt the art of asking better questions. As lawyers, we must maintain a high curiosity quotient. We must be hungry to understand the confluence of issues and how they impact problems we are trying to solve. Do not swallow things lock and barrel. Check things out, query. The art of querying matters is an essential skill that must be honed. You may have identified this as a problem and you are asking how to improve your curiosity quotient, let me share some tips with you: Set learning goals: The same way you have performance goals at work, you need to set learning goals. These may be based on areas of law in which you work or broad business issues impacting your client. The learning is more useful where it is relevant to ongoing work or skills which you are trying to build. Define these learning goals and measure them by putting them to test from time to time. Take on more challenging work: It is easy to hide in the

OUR CORRESPONDENTS ollowing President Muhammadu Buhari decision to extend the appointment of Honourable Justice Monica Dongban-Mensem as the Acting President of the Court of Appeal (PCA) for another three months, starting from yesterday June 3rd, 2020, some legal experts have questioned the president’s decision to extend her tenure as acting PCA, against appointing her President of the court, when her appointment according to constitutional provisions, should not have exceeded three months. Questioning this move, a national officer of the Nigerian Bar Association (NBA), Kunle Edun holds the view that the President of the Federal Republic of Nigeria had enough time to conclude all processes that should have led to the confir-

Monica Bolna’an DongbanMensem

mation of Justice DongbanMensem’s as the substantive President of the Court of Appeal (PCA). “Why do we have wait for a substantive PCA or even a Chief Judge (CJ) of the high court to retire before we begin the process of appointing a successor? Why can’t the valedictory session or ceremony for an outgoing PCA or CJ be part of the swearing-in of a new head of court (Be it a CJ or a PCA).

“The NJC has a long notice of the retirement date of the president of a court, as well as the Chief Judge. Why then, should the process for their replacement be a long drawn process, so much so that the time of an Acting PCA has to be extended. Why not start early enough to avoid a situation of appointing Acting CJ”, Edun said. Unfortunately, Edun’s views that there may be other reasons

Dongban-Mensem was sworn in on March 6th to take over from Justice Zainab Bulkachuwa as acting president.

INTERVIEW

To operate a truly deregulated market there must be clarity and predictability of policy - Akabogu In this interview with LEGALBUSINESS maritime, petroleum and international trade expert, Emeka Akabogu, he shares some insight on the impact of COVID -19 on the downstream oil and gas industry and discusses recent reform initiatives within the sector. He also shares his experience working remotely and discusses the role of technology in the world of remote work. EXCERPTS…

o mitigate the spread of Covid-19 in Nigeria, government a few months ago imposed a lockdown and many businesses including law firms had to learn to work remotely. What was the transition to the world of remote work like for you? It was actually a blessing for me and many other professionals who have now realized that we are able to do much more than we previously thought possible. Things that we assumed could only be done in the office, we are now able to do from home. The impact has been a significant amount of savings in resources, in terms of time and money.

What adjustments have you had to make as a firm? Primarily, we have made adjustments technologically and with regard to human resource implications. In terms of technology, we had to very quickly transit to the use of available platforms to conduct our inhouse meetings. Although we had always had these platforms, Continues on page 22 we never really optimized them

INSIDE Rethinking Legal Education for the 21st -Century Lawyer

President Muhammadu Buhari

for this extension is shared by many who believe that the presidency may be preparing to appoint Mohammed Lawal Garba as President of the Court of Appeal in place of Dongban-Mensem, who may not be presented to the Senate for confirmation for the substantive position. It would be recalled that the Federal Judicial Service Commission (FJSC) had recommended both DongbanMensem and Mohammed Lawal Garba, to the National Judicial Commission (NJC) and to President Buhari for appointment as substantive president of the Court of Appeal to replace Zainab Bulkachuwa, who retired in March 2020.

Are there any tools that you have found particularly useful or you would recommend above others? I would not say that I am able to recommend any tools above others. However, the primary tools that we have had to depend on have been video conferencing tools for facilitating meetings and webinars.

Emeka Akabogu

because we had the opportunity of being together in the office. We have also moved the knowledge-sharing initiatives which we offer to market operators in our practice areas online, resulting in considerably increased reach, including to all corners of the globe. Interestingly, with regard to human resources and tracking performance, we have seen that we are better able to track work. The office environment sometimes presents opportunities for a lot of motion without movement. Now that staff can only be assessed based on tangible deliverables, it is easier to see who is adding value and who is not and apply necessary consequences.

Organisers of the ‘Future Lawyer Series’ sponsor 20 young lawyers to NSE fintech foundation course

What about documentation and remote access to your files? We use Next Counsel and it gives us the opportunity to collaborate in terms of task tracking and related matters. Google drive is also quite effective to ensure that we are able to store and locate our documentation. One of the things which we were able to do pre-COVID was to have a continuous process of uploading our documents to the cloud. The current circumstances highlight the importance of that activity. Some of our clients have occasionally called for access to important documentation including court processes, and we were happily and readily able to oblige them even though we were working

from home. This reinforces the importance of technology. However, we need to make continuous, ongoing progress. How would you say Covid-19 has impacted the Nigerian Judicial process? I would say positively. I choose to see only the positives in this situation. For a long time, we have been wondering the extent to which it would be possible for courts to go virtual. There has been a significant reluctance on the part of major stakeholders both at the bar and on the bench to take advantage of the technology we have. People have a set mindset and are afraid of exploring new options and this has been a challenge to things taking off over the years. The Covid-19 situation has now placed us in a position where we have to make immediate decisions and adjustments. We have now realized that we are able to do more with the resources that we have and states like Borno and Lagos State as well as the F.C.T have already taken advantage of technology to conduct virtual court proceedings which we Continues on page 21

Finance minister issues order expanding the goods and services exempt from vat in Nigeria

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Thursday 04 June 2020

BUSINESS DAY

INTERVIEW WITHEMEKA AKABOGU

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To operate a truly deregulated market there must be clarity and predictability of policy Continued from page 20 did not think would happen anytime soon. This of course needs to be transitioned from the occasional ceremonial hearings for the benefit of the media to standard, routine practice, as most courts, particularly the Federal High Court are still hearing only a handful of matters. However, there are still naysayers. Just yesterday, I was contributing to a thread on LinkedIn, the core of which was that virtual proceedings could potentially be trumped for not complying with constitutional provisions regarding making trials public. I also recently listened to a Senior Advocate of Nigeria say on a TV programme, that remote hearings should not yet be adopted by the country because of challenges regarding power and the constitutional requirements for a public trial. To me, that is looking at the cup half empty, rather than half full. The question I posed was, what is the definition of public? Is it public enough if the link for a zoom meeting is printed and posted on the cause list and pasted on the court’s board and also posted on the court’s website? My position is that it is public enough as long as it allows anyone who has access to the link to gain access to the court. As for power supply, everyone who has a laptop knows that you do not require power supply consistently to power

your laptop. The courts should also be able to afford inverter systems for the individual courts. Let’s take this to the downstream sector where you are a key stakeholder and advisor. How would you say the COVID-19 Pandemic has affected the sector? In addressing this question, I will limit my answer to particular areas which have to do with law and the areas in which I work, which are essentially shipping; and shipping relationships with the downstream oil and gas industry. Covid-19 has affected the market both positively and negatively. Its most immediate impact is the unprecedented global slow-down in the consumption of oil. The world virtually came to a halt and as a result, the price of oil not only fell, but fell into negative territory. This in turn resulted in a reduction in the price of petroleum products, with NNPC even announcing a further reduction in the ex-depot price of petrol to N108.00. For a majority of Nigerians, this is a positive impact of Covid-19. However, since the reduction in our petrol price appears to be market driven rather than arbitrary, we are likely to see the flip side when the economy starts running again, even as the market is gradually rebounding. NNPC has announced that the market will determine prices going forward.

Although, the Federal Government (by which we mean the President of the country) has not made any clear declaration on this matter, the immediate indication is that PostCOVID, we will indeed operate a deregulated market, because as at today, Nigeria is broke and one of the very quick solutions to this problem would be to ensure that we have cost-reflective pricing of petroleum products going forward. If this happens, it will be a very positive outcome for market operators because for about four years or more, a lot of petroleum market operators have been comatose due to the inverted pricing realities imposed by price caps without subsidies. However, to operate a truly deregulated market and ensure market equilibrium there would need to be clarity and predictability of important policy and operational issues. For instance, we would need to have uniformity in relation to access and rates of foreign exchange. We would also need to implement legal reforms to create a regime under which deregulation can operate. We would need to revisit the PIB and amend or repeal certain statutes such as the Price Control Act, the Petroleum Equalisation Fund Management Board Act and the Petroleum Products Pricing and Regulation Agency Act which by their current provisions are inconsistent with a fully deregulated market regime. We

would also need to implement a robust competition regulatory framework to deal with legitimate concerns about cartelization and abuse of dominant positions. I recently moderated the Nigerian Petroleum Downstream Consultative Summit with all the market’s key stakeholders, and the overwhelming and near unanimous position was that the sector should be deregulated. Coming back to Covid-19 and arising implications, we have a situation now where one of the first declarations made by the president was that vessels coming into Nigeria should wait 14 days before being allowed to berth in the ports. This directive was given to allow for a quarantine period for those that might potentially be infected with the virus. The order has naturally resulted in delays to vessels that are coming in. For every day a vessel stays beyond what is agreed to in its charter party, it is subjected to demurrage. So, there are pending significant claims waiting to be made with regards to demurrage. The impact of these will be on the bottom line of ship owners, who will in turn, where their contract allows, transfer same obligation to the owners of the cargo. So quite a number of legal issues will arise. Another development, which we have seen is around tank farms and tanker vessels. As a result of the glut, tank farms are full. So, tanker vessels that should ordinarily be ferrying

products from place to place are now being used for storage. This has led to a shortage of good tanker vessels, which has in turn resulted in an increase in the rates of tanker vessels, and so ship owners are smiling at this point but of course, these will have implications later on. Can you please expand on some of these implications? If going forward, we truly operate a deregulated market, what will happen when the economy is back on full steam is that the price of petroleum products will go up very quickly. And this will happen, not necessarily because of the price of the products, but because of the associated cost of logistics surrounding it ; cost of storage, tanks and even cost of haulage. So that is one immediate implication. Another thing to note is that tanker rates will remain high for a very long time. Ordinarily this should be good news for ship owners, but in Nigeria, we don’t have many people who are big ship owners, many of the ship owners are foreigners. So, it’s not great news for those operating in the Nigerian market. If anything, these are cost drivers, which ultimately have an impact on every other thing down the line and it may take a while for the market to stabilize. To be continued next week

GREYMATTER Finance minister issues order expanding the goods and services exempt from vat in Nigeria

cting pursuant to the power conferred by Section 38 of the Value Added Tax Act (“VAT Act”), the Honourable Minister of Finance, Budget and National Planning (“Minister”) on February 3, 2020, issued the Value Added Tax (Modification Order), 2020 (“VAT Modification Order”). By the VAT Modification Order (a gazetted copy of which became available in the public domain earlier this week), the Minister has modified the provisions of the First Schedule to the VAT Act by adding to, and expanding the list of goods and services specified therein and designated as being exempt from VAT. Goods and Services exempt from VAT totalling Eight Hundred and Seventy-Eight (878) items have now been clearly defined in the Order. Highlights and a synopsis of the changes introduced by the VAT Modification Order are set out below: 1. MEDICAL AND PHARMACEUTICAL PRODUCTS Medical Products is defined as articles, instruments, apparatus, machine or software used in the prevention, diagnosis or treatment of illness or disease, or for detecting, measuring, restoring, correcting or modifying the structure or function of the body for some health purpose. Pharmaceutical Products means components and finished products of both modern and traditional medicine intended for human use in the diagnosis, cure, mitigation, treatment, or prevention of disease or injury; which are safe, effective, and of good quality, used rationally and are approved by the local

regulatory authority. A total of 126 items are listed as medical and pharmaceutical products.

bathtub, sponge, towel, lotion, garment and all clothing etc. A total of 11 items are listed as baby products.

2. BASIC FOOD ITEMS Basic Food Items is defined as agro and aqua based staple food. It includes additives, bread, cereals, cooking oils, culinary herbs, fish, flour & starch, fruits, live or raw meat & poultry, milk, nuts, pulses, roots, salt, vegetables, and water (except where sold in restaurants, hotels, eateries, lounges and other similar premises, as well as sold by con-

5. PLANT, MACHINERY AND EQUIPMENT PURCHASED FOR UTILIZATION OF GAS IN DOWNSTREAM PETROLEUM Downstream Gas Utilization is defined as the marketing and distribution of natural gas for commercial purposes and includes power plant, liquefied natural gas, gas to liquid plant, fertilizer plant, and gas trans-

tractors, caterers and other similar vendors). A total of 564 items are listed as basic food items.

mission and distribution pipelines. A total of 14 items are listed as exempt products under this category.

3. BOOKS AND EDUCATIONAL MATERIALS Books and Educational Materials is defined as physical and electronic books and materials used for instructional purposes and to facilitate learning in all educational institutions (Pre-primary, Primary, Secondary, Tertiary, Special, Adult, Vocational, Technical or Science, and Religious Education). A total of 41 items are listed as books and educational materials.

6. PETROLEUM PRODUCTS A total of 15 items are listed as Petroleum Products exempt from VAT and these include Aviation Spirit, Motor Spirit (super), Motor Spirit (ordinary), Kerosene (type jet fuel), kerosene, Natural Gas, other Liquefied Petroleum Gases & Gaseous hydrocarbons.

4. BABY PRODUCTS Baby Products is defined as products made for the use of babies from birth to 36 months (3 years) of age. This includes baby safety car and home accessories, high chairs, baby www.businessday.ng

7. FERTILIZER, LOCALLY PRODUCED AGRICULTURAL AND VETERINARY MEDICINE, AND FARMING MACHINERY & EQUIPMENT Fertilizer is defined as “all fertilizers” while Locally produced Agricultural and Veterinary Medicines is defined as drugs and vaccines produced in Nigeria for the treatment of

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animals, fishes and plants, including veterinary pharmaceuticals, dietary supplements, and pesticides & agrochemicals. Farming Machinery & Equipment are equipment used extensively for farming or for any other agricultural purposes such as tractors, ploughs, harvesters etc. A total of 49 items are listed as exempt products under this category. 8. ESSENTIAL RAW MATERIALS FOR THE PRODUCTION OF PHARMACEUTICAL PRODUCTS A total of 24 Essential Raw Materials are listed as items exempt from VAT under this category, and they include variety of starch products (pharmaceutical & non-pharmaceutical grades), oil products (palm, soya bean, groundnut, palm-kernel, corn mustard, shea / karite & coconut oils). 9. RENEWABLE ENERGY EQUIPMENT (RECOMMENDATIONS) A total of 8 Renewable Energy Equipment are recommended and included in the list of exempt items, and they include generators of different capacities which are either solar-powered, wind-powered or Solar DC generators and photosensitive semiconductor devices. 10. RAW MATERIALS FOR THE PRODUCTION OF BABY DIAPERS AND SANITARY TOWELS The number of Raw Materials listed as items exempt from VAT under this category is 26, and they include: Beauty & make-up preparation and skin care, waxes, glues & adhesives, plates, sheets & films of plastic, and vulcanized rubber, wood pulp and @Businessdayng

toilet / facial tissue. COMMENTARY The VAT Modification Order is a timely and responsive subsidiary legislation. By expanding the list of goods and services now exempt from VAT to include basic products commonly used by a vast majority of Nigerians, and goods focused on health and medicare, agriculture and manufacturing of food products, as well as petroleum products, particularly, at a time that the economy is facing challenges attributable to the plummeting of hydrocarbon prices coupled with the disruption caused by the COVID19 pandemic, we view the Order as a palliative/ economic intervention by Government aimed at alleviating the pains of the present realities. We laud the encouraging initiative of Government, and hope it sustains and continues to roll out people focused laws, initiatives and programs.

The Grey Matter Concept is an initiative of the law firm, Banwo & Ighodalo DISCLAIMER: This article is only intended to provide general information on the subject matter and does not by itself create a client/attorney relationship between readers and our Law Firm or serve as legal advice. Specialist legal advice should be sought about the readers’ specific circumstances when they arise.

Thursday 28 May 2020

BUSINESS DAY

PERSPECTIVE

LegalBusiness

Rethinking Legal Education for the 21st - Century Lawyer ADEDOYIN PEARSE

egal Marketplace Like many other industries in today’s world, the legal profession has been and is undergoing radical changes. Today’s legal marketplace has witnessed modern trends in globalisation, the emergence of new practice areas in information and communication technology, intellectual property law etc., changing client preferences from delivery of pure legal services to integrated business solutions, the development of new skill sets to perform the emerging roles for lawyers in the evolving legal landscape, and new technologies that are fast transforming the world of work today, among other developments. To keep up with the demands of a digitally changing world, some law firms and in-house legal departments in several jurisdictions (including Nigeria) have already begun deploying technology to perform routine tasks like legal research, drafting and review of contracts and legal documents as well as for more sophisticated functions like using artificially intelligent chatbots to communicate with clients, and the use of predictive analytical tools in litigation practice to analyse the extensive volume of data that litigators must sort through to develop winning strategies for their cases. The adoption of recent technological advancements in legal practice has clearly resulted in the efficient delivery of top- notch legal services at a much faster and cost-efficient rate. Although most stakeholders in the Nigerian legal industry were until recently quite sceptical of, and slow to embrace various technological tools to aid their practice of

Adedoyin Pearse

law, the COVID-19 pandemic has however accelerated the impending digitalisation of the industry. In the sudden switch from brick and mortar offices and courts to online legal practice law firms, corporate legal departments and the justice administration have had to rapidly adapt to new ways of delivering legal services while leveraging technology to ensure business continuity and access to justice for litigants. The ongoing digital transformation of the legal industry not only reflects the new face of legal practice but critically points to the need for

all stakeholders to embrace the broader changes taking place in the industry globally; and the need to reform our system of legal education to adequately prepare lawyers for legal services delivery in the 21st century. Current State of Legal Education in Nigeria Despite the realities of today’s legal marketplace, the system of legal education in Nigeria has remained mostly unaffected. The current curricula are unsuited to prepare lawyers for the fast-paced and rapidly

Organisers of the ‘Future Lawyer Series’ sponsor 20 young lawyers to NSE fintech foundation course

was not a great fan of Mathematics. I gladly got away with it throughout my legal education. However, on entering the world of practice, I was faced with advising businesses on legal matters that had financial implications, and I struggled. I had no choice but to upskill to meet the new demands of professional practice. As a matter of urgency, I had to become financially literate, handle tax computations, learn project management and other vital skills relevant to my industry; otherwise, I risked losing several great opportunities. Employers now demand multi-disciplinary skills; knowing the law is now a baseline, having the necessary additional skills makes all the difference. Further, our system of legal education is modelled around traditional legal practice with no thought for the other diverse roles many lawyers now find themselves in. Apart from acting as heads of legal departments and company secretaries, career opportunities currently exist for lawyers to transit into C-suite roles such as Chief Executive Officers and Chief Operating Officers of organisations. Further, lawyers are now setting up legal tech start-ups and taking on increased policy and regulatory roles in the private and public sectors of the economy. A lawyer must, therefore, be trained holistically to thrive in various spheres of the legal, business, and public administration world. To be continued next week The opinions expressed in the article are solely my own and do not represent the views or opinions of my employer, Siemens Energy Limited.

Curiosity is the missing link

INDUSTRYFILE

n continuation of its objective to prepare young lawyers for a competitive future in the profession, “Future Lawyer Series” (an initiative of Desmond Ogba) has committed to sponsoring 20 young lawyers to attend the Fintech Foundation Course organised by the Nigerian Stock Exchange -Academy for young lawyers and practitioners. Designed to provide young legal practitioners with in-depth

evolving world we live in characterised by globalisation, fast-changing markets, new technologies and a constant drive towards continued innovation. From my discussions with young graduates and recent recruits in my department, I have observed that the legal curriculum has remained mostly unchanged from what it was when I graduated from the university and law school over twenty years ago. The curriculum is modelled mainly on the traditional doctrinal law courses and little else. Although the law school curriculum includes mock trials and topics in law practice management and technology, these are not sufficient to equip lawyers for modern-day practice. As a result, young lawyers leave the universities and law school with often outdated skillsets and expectations and, struggle upon entry into the profession. Some learn quickly on the job and eventually settle in, but not many have understanding employers who can wait long enough for an employee to learn the ropes. Apart from lacking relevant courses to prepare future lawyers for the changing legal landscape, the curriculum is also devoid of the necessary technical and soft skills needed by lawyers to thrive in the new world of work. Clients are increasingly demanding for creative legal solutions that match their unique business needs. Given the blurred line between legal advisory services and business advisory services nowadays, lawyers now must read and interpret financial statements and understand the intricacies of each client’s industry. I recall that part of my reasons for choosing to study Law was because I

knowledge of the intersection between law, technology, banking and financial services, the programme is key to developing young lawyers for the future and affording them opportunities to diversify. The course includes learning and understanding the workings and impact of Fintech; balancing and dimensioning the risk and opportunities offered by the Fintech evolution as it relates to the legal sector and the basics

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of the Fintech industry and its organization in Nigeria as well as a global view. Requirements for entry into the course designed for lawyers between 1- 4 years post call, included availability to attend the program from June 3rd 2020 (via zoom); evidence of interest in Fintech; and an application which must have been received not later than 2pm on Tuesday June 2nd, 2020. The Sponsorship was based on qualification.

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Continued from page 20

shadows as a young lawyer and rely on the skill of seniors in the delivery of work. This must not linger. As you count up on the time, your skill quotient must be equally measured, you must tell when your basic skills become advanced and this will only happen if you undertake challenging work i.e. tasks which are outside your comfort zone. Intellectual humility: No question is stupid to the learner. There is little self-consciousness when it comes to learning. Be humble enough to listen and ask for information about things you do not know or are not familiar with. The world is a knowledge bank and as you interact, pick the lessons. Lastly, journal your lessons and learnings. This is a skill I wish I had adhered to the moment I started my career. It is such a secret weapon. The more you journal, the more of a master you will be. It also helps you track the record of your growth and query the stages of your career with better data and more intelligently. Before you continue the rote work of answering client’s questions, ask yourself if you are asking the right questions or better still if you are learning and then take @Businessdayng

a second to pick up a new lesson. The call to lawyering is a call to learning and, in this case, curiosity will not kill the cat. OYEYEMI OYEYEMI ADERIBIGBE is a Senior Associate at Templars. She is also the current Vice-Chairman of the Young Lawyers’ Forum of the Nigerian Bar Association -Section on Business Law and the Young Lawyers’ Committee Liaison Officer of the African Regional Forum of the International Bar Association.

Thursday 04 June 2020

BUSINESS DAY

PERSPECTIVESWITH OLUMIDE AKPATA

LegalBusiness

The interplay between justice administration, commerce and the Nigerian court system: can we be more competitive?

s professions continue to take stock of the extent to which recent global events have affected their endeavours, one cannot help but feel that in the Nigerian legal profession, litigation lawyers have, perhaps, been the worst hit. From the initial closure of courts to the current limited access to them, our colleagues who practise in this area are undeniably seeing their ability to ply their trade significantly impaired. I had, against this backdrop, offered some perspectives in my recent piece on the silver lining that the ravaging pandemic offers, including in the area of administration of justice by our courts. Yet, merely having courts that can offer virtual services, without more, will not guarantee that our justice delivery sector will enjoy the pride of place that it ought to occupy among national judiciaries in the world. As many of us would have noted, it has increasingly become apparent that high-value commercial disputes tend not to be litigated in Nigeria as the underlying contracts provide for either international arbitration at a foreign seat or litigation in foreign courts. This is not because parties to those contracts prefer to spend their fortunes at those fora. It is because the foreign jurisdictions that they typically choose have proven over time to be fit for purpose in dealing with commercial disputes and their realities. Hence, a lot of “legal tourism” with links to Nigeria is going on in the world with attendant debilitating effects on Nigerian lawyers and the Nigerian legal profession. I believe that there is an opportunity for our judiciary to reinvent itself, join the league of attractive jurisdictions for commercial disputes, and thus become an enabler of the country’s economic recovery and expansion, moving forward. Whilst there are probably many things that could be done to trigger this transition, two relatively easy areas that essentially require nothing more than a little

goading and shift in judicial attitude come to my mind: More substance, less procedure Many dispassionate observers will agree that the body of Nigerian substantive law on several matters affecting businesses and the economy is not being developed optimally. As I mentioned in a recent piece, we still make frequent recourse to decisions of other courts in the Commonwealth to address matters in respect of which we should have had exhaustive analysis and discussions in our domestic caselaw. On each occasion that I have had cause to speak to my litigation colleagues about this subject, a common reason that they provide for this anomaly is one that we all have become familiar with: the continuing reign of procedure over substance in the litigation process. Cases have come before appellate courts bearing questions of substance that would have enriched our jurisprudence on several areas affecting investment and commerce. Many of those cases were ultimately determined, after protracted litigation, by reference to procedural points and without significant substantive analysis. In theory, those cases could go back through the process, correct any procedural lapses, and hopefully get a determination on the substance eventually. However, in practice, I am aware that it is usually more likely than not that the

parties would have become so weary from the several years (decades in some cases) of litigation and incurring legal fees that they would simply prefer to lick their wounds and avoid Nigerian courts as much as possible when disagreements arise in the future. The setback that this causes for both legal practice and the economy should not be underestimated. The migration of cases that should ordinarily have been decided by Nigerian courts to courts and fora in other climes not only leaves our jurisprudence shallow but also has a direct impact on the revenue earning ability of Nigerian lawyers. It is recommended that, as a matter of conscious judicial policy moving forward, commercial and investment disputes should receive accelerated hearing on the merits. The attempts that have been made to achieve this through the rules of court and other mechanisms do not seem to be sufficient or are simply not producing the desired results. If our courts begin to consistently decide matters on substance rather than procedural machinations, this will go a long way in settling the myriad of legal issues that ongoing global events have thrown up. It would also provide helpful jurisprudence on several legal issues that affect businesses, and ultimately make Nigeria a more attractive jurisdiction for resolving commercial disputes. More costs, less frivolities

To further aid the efficiency of our justice administration, a rethink on the issue of costs awards is also imperative, particularly in commercial disputes. The focus on costs arises from the fact that matters, including time-sensitive ones on which commercial and investment decisions may depend, simply take too long to be resolved in Nigerian courts. Much of the delay is attributable to the sheer number of cases, including many frivolous ones, which our judges have to deal with. Yet, the judicial attitude towards award of costs does not seem to punish frivolous claims when they are eventually identified. Nigerian courts tend to award relatively miniscule amounts as costs. I recently followed up on the proceedings in a matter which my partner, Adewale Atake, SAN, and his team were defending on behalf of a client operating in a petroleum industry allied company. I understood from them that after over a year of puzzling adjournments of the hearing of the defendant’s simple jurisdictional challenge regarding the unwarranted arrest of its cargo, the court of first instance found that the plaintiff’s claims were completely without merit and that the affected cargo should never have been arrested. Yet, the court awarded zero costs against the plaintiff in a matter in which the defendant had literally spent millions of dollars to maintain the affected cargo during the period of arrest. Cases like this abound across the various courts in Nigeria. For an emerging economy in a competitive world, this is a disservice to any efforts at attracting businesses, growing the legal system and expanding the economy. In more developed legal systems like England (where we are wont to referring to for precedents), this is certainly not the case. A recent example is the USD1.1 billion claim brought by the Federal Republic of Nigeria against Shell and Eni before an English court. Last week, the court delivered its judgment wherein it declined jurisdiction and awarded substantial costs against

Nigeria. In practical terms, this means that it is just too easy and cheap to frustrate commercial relationships in Nigeria through frivolous claims which could be pursued all the way to the Supreme Court without any real consequence beyond an award of comparatively paltry sums as costs. Indeed, an entire project could be held up by claims that are ultimately unwarranted, without any eventual award of substantial (let alone actual) costs to cover the exposure of the project stakeholders. In my humble view, by following this policy in commercial disputes, the justice delivery sector is unwittingly undermining the survival and viability of businesses and this, again, has, and will continue to have, adverse economic impact on Nigerian lawyers. Granted, the policy objective behind awarding seemingly nominal costs is to ensure that access to justice is not prohibitive. But whilst this concern may be valid in other civil contexts such as enforcement of fundamental rights, it is arguably not warranted in large commercial and investment disputes. Businesses understand risks, including the risk that frivolous lawsuits could lead to substantial award of costs. Hence, to deter parties from wasting precious judicial time, significant costs (including legal fees) should follow whenever frivolous commercial claims/defences come before our courts. This is an effective way for incentivising fidelity to contractual arrangements. If done consistently, then it is inevitable that sooner rather than later, parties to commercial transactions will be wary of commencing flimsy claims, raising sham defences, or pursuing needless appeals. This, in turn, will improve the overall efficiency of our justice delivery system, improve trade and commerce and, of course, better the lot of Nigerian lawyers and the legal system. OLUMIDE AKPATA

Medical Malpractice in Public Health Emergencies: A review of medical response to COVID-19 in Nigeria Continued from last week Rejection of patients pon the incidence of the outbreak of the COVID-19 in Nigeria, a number of hospitals have refused to accept patients especially when they present with symptoms which resemble that of COVID-19. The hospitals declined to allow such patients consult with any of their medical practitioners or even get access into the premises. The hospitals in upholding the ethos of preserving life and ensuring treatment can properly connect the patient to officials of the National Centre for Disease Control (NCDC) who will assess the symptoms of the patient and examine whether the patient should be tested or advised to self-quarantine. Rejecting a patient without following the necessary guidelines and protocols is a breach of that minimum duty to prevent the further transmission of the disease. Every hospital should have in place guidelines and protocols for dealing with a varying number of emergency situations which may be presented during this pandemic, whether it’s for COVID-19 patients or other patients. Refusing to give emergency treatment to any patient on the assumption that

the patient may be carrying the virus is in contravention of the National Health Act, and by every means a breach of the medical practitioners’ duty of care. Treatment in isolation centres There is also the ‘duty of care’ owed by the medical practitioner and other health workers to patients being isolated whose COVID-19 status have not been confirmed. The medical practitioners have the duty to ensure that patients in the isolation centres obtain adequate medical treatment and attention. It was reported that in an isolation centre in Jigawa, a pregnant woman had a miscarriage and bled to death. This raises numerous questions as to how a pregnant woman had a miscarriage and there was no medical practitioner to attend to her till she died. This is indicative of the pressure that curtailing the pandemic has placed on our health care infrastructure and if caution is not taken, harm and injury will be done to non-covid-19 patients and a floodgate of claims will be instituted against medical practitioners and medical institutions post COVID-19. Use of Telemedicine Telemedicine is the remote diagnosis www.businessday.ng

and treatment of patients by means of telecommunications technology. The question the use of telemedicine poses is whether a claim for malpractice can arise from the treatment proffered to a patient from a diagnosis using telemedicine where there is an injury/ death arising from such diagnosis/ treatment. The use of telemedicine will not alter the standard of care expected from a medical practitioner and will not fall within the scope of “emergency” standard of care which assumes that treatment prioritization and allocation of scarce resources overrides any traditional protocols required in attending to a patient. The professional standards have by the codes of professional conduct clearly set the protocols for attending to a patient which includes, testing, diagnosing and treatment and the fact that there is a prevalent public health emergency situation will not absolve any medical practitioner from the standard duty of care owed to that patient on the other side of the technological device requesting for medical advice. Issues such as confidentiality, professional competence, legal and registration status of the specia1ist being consulted, equipment reliability, sustainable continuity of patient management and timely referral of

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patient are potential medico-legal pitfalls which can be created by the use of telemedicine. Conclusion There is an established duty of care to all patients and there is no gainsaying the fact that even in public health emergency situations such as the COVID -19, that duty of care can be interpreted to mean the duty to prevent the transmission of a deadly disease. Although the threshold for determining the duty of care which medical practitioners have towards their patients may vary in every circumstance, the chances of success of a claim against medical malpractice can be increased when it is supported by the enforcement of such constitutional rights as the right to life, the right to health, and the right not to be discriminated against. There will be those situations where harm or injury may occur even where the medical professional has acted in his best judgment. It is for such occurrences that it is equally important that medical institutions takeout malpractice insurance to indemnify them against any liabilities arising from malpractice claims. One is not oblivious of the fact that the inadequate health infrastructure @Businessdayng

in Nigeria many times can limit the ability of the medical practitioner or institution to respond quickly and efficiently to emergency situations. It is for this reason many hospitals and health institutions can collaborate, re-organize or restructure their operations to enlarge their capacity to create triage stations, better maximize minimal resources by utilizing quick referral protocols and put in place risk management mechanisms in order to better respond to emergency situations. As the world begins to evolve out of the devastating effects of COVID-19, the woes of the pandemic will soon become fleeting swipes of our recollection, but the sacrifices of our medical professionals who stand as our frontline heroes remain indelible marks in our hearts. Medical practitioners must however remember that the possibility of an allegation of malpractice remains even in a pandemic situation and they must act with the consciousness of the duty of care they have as we fight this unprecedented war to the end. Tomilola Tobun, Temidayo Adewoye and Ibidoyin Aina are with the law firm of Perchstone & Graeys.

Thursday 04 June, 2020

BUSINESS DAY

BUSINESS TRAVEL

Investment in technology key to travel, airline recovery post-Covid-19 – Stakeholders Stories by IFEOMA OKEKE

layers in the travel, trade and airlines sub-sector have been charged to improve on technology deliveries in order to remain relevant post Covid-19 era. The Nigerian Civil Aviation Authority (NCAA) and the Federal Airports Authority of Nigeria (FAAN) have also been called upon to enhance technology for the new international protocols on check-in procedures for air travellers in a bid to improve the turnaround performance of airlines. Speaking on Friday at the Sabre Africa Network Webinar conference with the theme: ‘Understanding Travel Complexities Post-Covid-19:”, views from the Stakeholders,’ panelists urged stakeholders in the travel and aviation sectors to increase their technology performance to be able to compete in the new era. Participants at the conference said without technology and dissemination of adequate information, the recovery level of air travel in the country would be slow when compared to other countries around the world. Gbenga Onitilo, Country manager, Cabo Verde Airline, lamented that the advent of coronavirus had reduced capacity for airlines by over 90 per cent, while about 30 million people are directly and indirectly unemployed globally as a result of the pandemic, but noted that the crisis had compelled the need for innovation on business environments.

Onitilo explained that the global travel sector would never remain the same postCovid-19 virus until vaccines are developed to combat the disease, regretting that the countries with the highest number of tourists like United States, United Kingdom, Italy and a few others are mostly impacted by the pandemic. He noted that as a result of the lockdown, numerous countries’ Gross Domestic Products (GDPs) were affected, emphasising that the travel sector thrived only on buoyant economies. He further explained that airport performance would determine airline’s turnaround performance and said while the world was aware of latest developments in other aviation countries; the same could not be said of Nigeria as yet. On resumption of flight operations, Onitilo explained that no airline would operate beyond 40 to 50 per

cent capacity and expressed doubt about the preparation of Nigerian airports towards post-Covid-19 era. He said: “We are not going to return to pre-Covid-19 era again in the way we do our businesses. So far, we have about 600,000 deaths globally, which has brought changes in human interactions. A lot of air travellers are bothered about aviation and the possibility of contracting Covid-19 onboard aircraft. “Everybody is now innovative about taking the business to their customers and even, the airlines are having a lot of shifts. The travel sector can never be the same again until you have the vaccines, which may come in the next 18 months. People have lost jobs and thousands of people are redundant. The protocols of airlines to ensure safety will determine the travel for the future. “Airports will determine aircraft turnaround and not

the airlines alone. We don’t know the pre-checking procedures in our airports. Dubai International Airport has embarked on automation process for air travellers, yet, we don’t have information from FAAN and NCAA.” Also, Abiola Bakare, Sales Manager, Nigeria, Air Cote D’Ivoire in his submission expressed optimism that the travel industry would return to the pre-Covid-19 era in the next two or three years. Bakare said Air Cote D’Ivoire had put in measures to facilitate passengers’ check-ins at all the airports it’s operating from, including Nigeria. Like Onitilo, he stated that the advent of the virus would put change to air travel businesses, but noted air travellers would only patronise the sector when they are sure of total safety. Bakare charged air operators to be ingenious and think out of the box in order

to compete post-Covid-19 era, stressing that it was time the operators worked with Travel Management Companies (TMCs) for improved delivery to clients. He also called for harmonised health certificate for all travellers worldwide, saying that people would not travel if they would be isolated for 14 days in any country. “Going on 20 days holidays and having to spend the first 15days in isolation will not be worth the while,” he stated. “Covid-19 has come to stay here with us and may end up like a way of life just like malaria, yellow fever and others in Africa. For Air Cote D’Ivoire, passengers would need about three hours to go through the check-in. Even, FAAN in a statement said passengers should expect delays at airports. “Air Cote D’Ivoire is putting in a lot of measures to enhance safety in its operations. We will be able to return to pre-Covid-19 pandemic in the next two to three years. People are willing to travel inasmuch as the airports are safe. We are embarking on aircraft sterilisation,” he added. On her part, Susan Akporiaye, President, National Association of Nigerian Travel Agency (NANTA), expressed optimism that the travel agencies would blossom more post-Covid-19 era as more travellers would seek more information about their travel plans and destinations. He called on travel agency practitioners to equip themselves with more relevant information and charged government to release more necessary information on new procedures to the body

for easy transition. She added: “The government should stop thinking that we as travel agents will come to ask them for money. What we need is international standards in our operations for the country. People want to travel, but are also careful about safety. “Nigeria airports should emulate what is happening around the world. We can’t be an island. We need to be a part of global travel community. Government should carry along the travel agencies in review of procedures they are putting in place.” Faddy Bazzi, managing director, Bazzi Voyage, appealed to some of the employers in the sector to be cautious on laying off their workers. He also charged African countries to increase their testing capacities to boost travel participation. Allen Awosikunde, Senior Vice President Sabre Network, West Africa, pointed out that 60 per cent of air travel would return in the nearest future, but said most of this would be business travels. In a statement tagged: ‘We’re in this Together, Helpful Resources for the Aviation Industry,’ he said Sabre provides services to travel agencies, corporations, airlines and hotels, amongst others. Earlier, Hannah Ogunsulire Director of Operations at Sabre, in her opening remarks, decried that the travel industry had been heavily impacted in recent time, while jobs are being lost regularly. She hoped that with adherence to international standards on safety, the sector would return stronger.

How COVID-19 is hitting airlines across the world – FBNQuest

long with tourism, event management and large sports events, the airline industry has been heavily affected by the impact of the virus. Warren Buffett has sold down his positions in US carriers while Lufthansa has negotiated a €9bn bailout with the German government. British Airways has made 12,000 employees redundant, and Virgin Atlantic may have hopes of being included in Project Birch, a UK government programme under development to support viable companies under acute pressure but deemed strategic. The story is the same in

emerging and frontier economies. Air Mauritius went into voluntary administration on 22 April, the first casualty in Africa. The strategy of Kenya Airways has been representative: conserve cash, reduce all costs where possible and cut salaries up to 80 per cent in some cases. South African Airways is not flying and has been ordered to come up with a business rescue plan if it wants another injection of government money. The immediate challenge for all airlines, once they have resumed operations, is to persuade customers that flying is safe with sowww.businessday.ng

cial distancing and other measures in place. This will be a gradual process. We have seen from surveys and opinion polls that for some, the experience of extended lockdown has left them wary of leaving their home and braving public transport, let alone taking a flight. Airlines might be thinking that once a vaccine is discovered and made widely available, their businesses will return to normal. They would be advised to be more cautious in their optimism. The hit to government, corporate and household finances has been huge, which equates to squeezed demand. Addition-

ally, some consumers may still expect distancing after a vaccine has been launched. Others at the high end of the market may feel that expensive holidays in distant locations accelerate climate change, and that they should forgo the trip to the Okavango swamp or the Mountains of the Moon. The CEO of a privatelyowned regional airline, based in Johannesburg, has suggested that 40 per cent of the world’s grounded aircraft will not fly again. Initially, airlines will offer competitive prices to get customers back into the habit of flying but before too

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long they will have to raise their tariffs to cover the loss of revenue (from distancing) and to service their increased debt burden. Prices should also rise because we expect a large amount of consolidation. There are more than 200 African carriers. A large number look vulnerable including state-owned carriers when their governments are so squeezed fiscally that they may have to sacrifice the said prestige of running the national airline. The Nigeria case is a little different: there is no national carrier, and arguably there are not too many @Businessdayng

local companies when we allow for the size of the market and the poor state of the infrastructure. Their problem is the domination of the international business by foreign firms. One local media source calculated that these firms earned US$3.1bn from ticket sales in 2019. There is one African flier that is not in danger of going under and will surely play a role in the consolidation. Ethiopian Airlines famously made a positive contribution to the balance of payments during the Derg (post-Imperial and pro-Soviet era through to 1987).

Thursday 04 June 2020

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Public health concerns limit chances of immediate school reopening STEPHEN ONYEKWELU

he Federal Government on Monday announced guidelines marking the second phase of the gradual reopening of the economy in response to Organised Private Sector’s request. The guidelines have authorised banks to operate fully and allowed worship places to reopen but limit attendance to 20 people. Domestic airline operators have also been asked to prepare protocols for resumption of domestic flights from June 21. However, schools will remain closed until a later date, the government said. Amid this scenario, some parents have become restless and eager to see their dependants go back to the classroom. The parents worry that though the children are engaged in online learning, they may not be learning enough. “It has been challenging dealing with my child’s education this period. Their school sends lessons and assignments online but I worry my children may be learning little and managing them at home is even tougher,” Ngozi Onoh-Okwuagwu, a mother of three children in primary school, said. Schools have been closed for more than two months, in more than 190 countries affecting 1.57 billion children, according to UNESCO, but governments deployed measures for learning to continue through platforms, television and radio in what has been the most far-reaching experiment in the history of education.

In a May 18 article ‘Reopening schools: When, where and how?’, Stefania Giannini, assistant director-general for education, UNESCO, Robert Jenkins, chief, education and associate director, programme division, UNICEF, and Jaime Saavedra, global director, education global practice at the World Bank Group, argued that the longer the school interruption, the larger the learning loss, and the earlier schools can reopen, the less risk of long-term damage to the learning journeys and wellbeing of millions of children. “We are concerned that

prolonged school closures will exacerbate inequalities, deepen the learning crisis and expose the most vulnerable children to heightened risk of exploitation,” Giannini, Jenkins and Saavedra said. “We know from other crises that the longer marginalized children are out of school, the less likely they are to return. After the Ebola crisis in West Africa, we saw increased rates of sexual exploitation and teen pregnancy, demonstrating how girls are particularly at risk during school closures.” However, education and public health experts say the

rising daily number of confirmed coronavirus cases in Nigeria does not conduce for reopening of schools. Nigeria recorded 241 new confirmed cases and 15 deaths from coronavirus on Tuesday, according to the country’s Centre for Disease Control (NCDC). In the last one week, there has been a daily average of 344 confirmed new cases across the country. As of Tuesday, 10,819 cases have been confirmed, 3,239 cases have been discharged and 314 deaths have been recorded in 35 states and the Federal Capital Territory, according to NCDC data.

he Governor of Edo State, Goodwin Obaseki, has asked Adams Oshiomhole, national chairman of the All Progressives Congress (APC), to steer clear of the party’s primaries in the state. Obaseki, while addressing journalists at the APC national secretariat in Abuja on Wednesday after submitting his expression of interest and nomination forms, asked the APC national chairman to recuse himself from the process to avoid conflict of interest. “I am using this opportunity to call on Comrade Oshiomhole to recuse himself from the Edo nomination process because he is an interested party. It is against natural justice for a man to be a judge in his own case,” Obaseki said. “So I think the honourable thing to do is to recuse himself and let’s have a free process and let’s reconcile and build our party.” The governor, who has been at loggerheads with Oshiom-

AMAKA ANAGOR-EWUZIE

Seyi Makinde (r), Oyo State governor, being assisted by Bayo Lawal (m), commissioner for special duties, while presenting palliative material to Olusola Ogundola, during the symbolic distribution of palliatives to people living with disabilities at the Governor’s Office, Ibadan.

… targets additional 1m taxpayers annually usiness and property owners in Lagos can now look forward to a relief from the 2018 arbitrary hike in the Lagos Land Use Charge (LUC) rate as the state government says it is returning to the pre-2018 rate. The implication of this is that owners of property across the state, who are still contending with the hiked rate, will now have to pay what obtained before the 2018 hike. The immediate past administration of Akinwunmi Ambode had increased the LUC rate by between 200 percent and 500 percent, hinging the increase on the need to shore up internally generated revenue (IGR) in order to bridge wide infrastructure gap in the state. The increase had thrown up controversy and pitched

JAMES KWEN, Abuja

hole, his predecessor in office, reiterated that he was going to win the Edo APC governorship primaries whether through direct or indirect mode. He debunked rumours that he had acquired the People’s Democratic Party (PDP) forms concurrently with those of APC. “It is very absurd. I am someone that is very exposed. How can I collect forms from two parties when we had rulings in the past disqualifying people on that?” Obaseki said. “Iamapartymantothecore. APC is my party because I come from a progressive political family.IbelieveintheidealsofAPC,I believeinourpresident,Ibelieve in what he stands for, so I am a party man to the core. I am not an old-styled politician. I represent a new direction of politics that is based on facts and truth, not lies,” he said. Speaking on why he was seeking second term, the Edo governorsaidanotherfouryears would give him the opportunity to consolidate on what he has done and that it was also a promise of APC.

Unresolved Customs’ queries, server breakdown pile up cost for businesses at ports ... delays create backlog of uncleared cargoes … Shippers blame corruption in Customs, terminals for delay

Property owners get relief as Lagos returns to pre-2018 Land Use Charge rate JOSHUA BASSEY

Steer clear of Edo APC primaries, Obaseki tells Oshiomhole . . submits nomination forms, debunks rumours of buying PDP forms

the Ambode government against the society, with members of the Organised Private Sector (OPS), property owners and the Nigerian Bar Association (NBA), Ikeja chapter, protesting and dubbing the government insensitive. But speaking on Wednesday at a ministerial briefing to mark first year in office of the Babajide Sanwo-Olu administration, the commissioner for finance, Rabiu Olowo, said the current government was reversing the LUC to its pre-2018 rate. The new reform in the LUC being undertaken by the Sanwo-Olu administration became necessary to accommodate continued agitations of Lagosians and to reduce the finance pressure on the citizens, Olowo said. “As we are aware in 2018, there was an increase in the LUC rate as well as revaluawww.businessday.ng

tion of properties. This twin shock had a sporadic increase in the LUC assessment. The reviewed reform reversed the rate to the pre-2018 rate; however, 2018 valuation was upheld,” Olowo said. The commissioner said the state government would soon commence the implementation of the pre-2018 LUC rate. He noted that the reform by the current administration has taken into consideration flexible LUC payments and efficient customer service management in order to ensure prompt issue resolution. Olowo decried the impact of the COVID-19 pandemic on the finances of the state, saying the government was equally working to bring additional 1 million taxpayers into the tax net annually. This, he said, would be achieved by the introduction of more flexible e-payment

platforms as well as extension of greater support to Small and Medium Scale Enterprises (SMEs) and the informal sector to enable them fulfil their tax obligations to the government. It would be recalled that the Ambode administration, bowing to pressure to reverse the controversial LUC hike, later sent the law back to the state House of Assembly for a review but it lingered in the legislative chamber until Ambode exited government in 2019. A six-man ad hoc committee of the house, which was chaired by Rotimi Olowo, subsequently caused amendments to some ‘obnoxious’ sections of the LUC law by expunging controversial areas in response to the public outcry against the law, but the implementation never took any serious effect.

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ersistent breakdown of Customs’ server as well as rising number of unresolved queries on cargo clearing documents are compounding the bottlenecks experienced by importers at ports. These bottlenecks have continued to worsen delay in cargo clearing, piling up cost for importers, manufacturers and others who do business at the nation’s seaports. At the Tin-Can Island Port, for instance, importers and their agents have raised alarm on the growing number of uncleared containers. This is due to their inability to process their documents for cargo clearance for the past two weeks as a result of the server failure. Shippers have also complained of rise in the number of uncleared consignments as a result of constant issuance of queries on cargo-clearing documents by Customs. “Customs said importers can generate assessment document and capture jobs right from their offices, but we have been finding it very difficult to generate ‘C’ number due to the breakdown of Customs’ server,” said Emma Nwabunwanne, a Lagos-based importer. “Customs’ server has been fluctuatingforthepasttwoweeks. If one cannot generate ‘C’ num@Businessdayng

ber, the person cannot print out the assessment document, and he or she cannot clear consignment out of the port,” he said. The delay in cargo clearance means that the importer cannot take delivery of his consignment and that would accumulate demurrage and storage charges that would be paid by the importer, adding to the cost of doing business at ports, Nwabunwanne said. “Due to no fault of ours, we pay demurrage and storage charges that sometimes run into hundreds of thousands per cargo. This is also why goods are very expensive in our markets today because the importer or manufacturer, who paid heavily to take delivery of goods or raw materials, must recoup the invested capital,” he said. But Uche Ejesieme, public relations officer of Tin-Can Island Port Command, said Customs was not responsible for the server failure. He described the server failure as pockets of fluctuations from the work stations which the technical partners have been able to rectify. “It is Webb Fontaine in partnership with Interswitch that provide the technical services for the Nigerian Customs Integrated System (NICIS II), and we want to believe that these are situations that are beyond human control because it is ICT,” he told BusinessDay on phone.

Thursday 04 June 2020

BUSINESS DAY

news How Nigerians bear brunt of fading... Continued from page 1

has been content gorging

itself on the country’s limited oil wealth and has stalled in aggressively seeking foreign direct investment to provide adequate jobs for the people and entrench investment-led economic growth. In the latest foreign investment report for the first quarter of 2020, the NBS reported that Nigeria attracted a paltry $214 million in FDI, a 13 percent decline compared to last year. The amount Africa’s most populous nation attracts in FDI, not only in the first quarter of 2020 but every year since 2008, is one of the lowest among countries with a similar population. Take Indonesia, Southeast Asia’s biggest economy, for instance. Indonesia has a population of 267 million and was, alongside Nigeria, one of the MINT countries classed by economist Jim O’Neil of Goldman Sachs as countries with strong economic potential and able to offer superior returns to investors in the future. Between January and March 2020, Indonesia attracted $9 billion in FDI, excluding investment in banking and oil and gas, according to the Indonesian investment board. That’s 42 times the amount Nigeria attracted. Nigeria has struggled to attract tangible FDI since its last wave of privatisation in 2008 when it received $8 billion in FDI, according to World Bank data. Between 2009 and 2015, the country attracted an average of $3 billion a year but that was enough to rank the country among the top three largest recipients of FDI in Africa. Nigeria has, however, only managedinflowsofabout$1billion a year since then, according to the NBS, and has lost its coveted top investment destination in Africa spot to smaller African countries like Egypt. Considering the size of Nigeria’s population, $1 billion works out to $5 per head. In Indonesia, which in 2019 attracted $28.2 billion in FDI, excluding inflows to the banking and oil sectors, that gives $104 per head. The decline in FDI for the past five years can be traced to lower oil prices as the attractiveness of Nigeria to foreign direct investors rises and falls with the price of crude oil. In the same period, Nigeria averaged 2 percent economic

growth rate, which is lower than its population growth rate and considered extremely low by economists for a developing nation. Why FDI is crucial Nigeria’s low Foreign Direct Investment (FDI) is partly responsible for the country’s acute shortage of jobs, tepid economic growth and government’s undiversified revenues. FDI is recognised as a powerful engine for economic growth. It enables capitalpoor countries to build up physical capital, create employment opportunities, develop productive capacity, enhance skills of local labour through transfer of technology and managerial know-how, and help integrate the domestic economy with the global economy. No country seeking to emerge as an economic powerhouse can do so without attracting FDI. It’s no surprise that the United States, the world’s largest economy, is the largest recipient of global FDI. The US attracted some $251 billion in FDI in 2019. The higher FDI a country attracts, the better the standard of living of its people as they can easily secure jobs and invest in themselves from education to health. Why foreign direct investors snub Nigeria When the World Bank Group surveyed hundreds of executives at multinational companies to find out what drives decisions around foreign direct investment, the results showed that investors value a business-friendly regulatory environment as well as stable macroeconomic and political conditions. These crucial factors are missing in Nigeria, according to some foreign investors surveyed by BusinessDay. They point to policy inconsistency, a business environment that existing local and foreign investors say is anti-business, and the lack of political will to open up the economy to private capital. One investor who craved anonymity said each time he has tried to invest in Nigeria, government bureaucracy has proved a difficult hurdle to scale. “There is so much interest in Nigeria given the enormous potential it has, but if the government isn’t open to private investments, nothing

Respite for insurers as NAICOM extends... Continued from page 1

pandemic has made it difficult to proceed with the 31st December, 2020 recapitalisation deadline earlier slated,” NAICOM said in a revised circular sent to insurance and reinsurance companies on

Wednesday. In the circular titled ‘Segmentation of minimum paid-up share capital requirement for Insurance and Reinsurance Companies’ and signed by Pius Agbola, director, policy and regulation, NAICOM said a review of the recapitalisawww.businessday.ng

President Muhammadu Buhari (r), with Vice President Yemi Osinbajo, during a virtual Federal Executive Council (FEC) meeting at the Presidential Villa in Abuja, yesterday. NAN

happens,” the person said. “The government’s attitude towards investors doesn’t suggest they are keen to bring them in, there seems to be a lot of contentment with oil exports.” Nigeria has made some efforts in improving its ease of business environment. The country ranked 131 on the World Bank’s Doing Business 2020 index, moving up 15 places from its 2019 spot, and has been tagged as one of the most improved economies in the world for running a business. However, most of those gains haven’t translated to increased investment inflows. For instance, it’s still 10 times costlier to transport cargoes from the Lagos ports than it is to move them from seaports in Ghana and South Africa, according to a research by SBM Intelligence. The Apapa and Tincan Island ports, Nigeria’s busiest ports, have been bedevilled by traffic congestion for more than 10 years and government’s efforts at resolving the problem have been grossly inadequate. Data compiled by SBM Intelligence showed that local transport from the port in Lagos costs an estimated $2,055. This is compared to $285 spent in moving goods from the Tema port in Ghana and $208 from the Durban port in South Africa. Another instance of the Nigerian government’s culpable role in hindering FDI is the case of final investment decisions by international oil companies worth about $20 billion that have been pend-

ing for three years when they can be resolved speedily by an honest engagement between government and the mainly western oil firms. It’s now or never: How to attract more FDI Many believe that the adverse economic impact of the COVID-19 pandemic on crude oil prices, and the Nigerian economy by extension, presents an opportunity to forge an investment-led economic growth strategy, much of which will depend on the country’s ability to mobilise both local and foreign direct investment. Officials at the sub-Saharan Africa units of American multinational banks, JP Morgan Chase and Citi Bank, and local investment promotion agency, the Nigeria Investment Promotion Commission (NIPC), helped beam the spotlight on some of the biggest impediments to investing in Nigeria while suggesting ways the country can be better positioned as a quality destination for foreign investment amid an intense competition for capital globally. The unpredictability of government policy is perhaps the biggest impediment to foreign investments, according to Ayomide Mejabi, chief economist for sub-Saharan Africa at JP Morgan. “From my interactions with most of our clients, it’s a real headache trying to predict Nigeria’s business environment when policies keep changing at a heartbeat,” Mejabi told BusinessDay. “It takes more time analysing Nigeria than actually investing, and even that doesn’t

guarantee your investment is immune to policy instability,” Mejabi said, before urging the government to create stronger institutions to solve the problem. Data from the Nigerian Investment Promotion Commission (NIPC), an agency of the Federal Government established to foster investments in Nigeria, shows that the country should be getting much more in terms of FDI based on announcements made by prospective investors of the investment they plan to make in the country. However, those announcements do not often translate to actual investments. In the first quarter of 2020, the NIPC reported investment announcements worth $4.81 billion. In actual terms, only 4 percent was achieved going by the NBS report that FDI was $214 million in Q1. Although there tends to be a time lag between when an investment is announced and when it is made, which may help explain the mismatch, that’s only half of the story. Since the NIPC started collating data in 2017, there’s been that mismatch which owes more to the challenges investing in Nigeria than a time lag. The NIPC reported investment announcements worth $66 billion in 2017, $90 billion in 2018 and $29 billion in 2019, according to data on its website – each more than 20 times what Nigeria actually received. “Direct investors, unlike portfolio investors, have a longterm horizon and are looking for stability and coherence in

government policies,” Yewande Sadiku, executive secretary of NIPC, told BusinessDay. “Although there are bad narratives about investing in Nigeria that we need to change, there are also many reasons why Nigeria is potentially more attractive because of COVID-19. It is especially important now that we have a more coordinated pro-investment approach across all levels of government, to counter the negative narrative and win the confidence of investors,” said Sadiku, who was chief executive of Stanbic IBTC’s investment banking business prior to taking up her current role at the NIPC. “We also need to continuously work on improving our ease of business and perhaps inject some more urgency into it. Another thing we need to address is the quality of education as that impacts the quality of our labour force and the country’s attractiveness to investors,” Sadiku said. Funmi Ogunlesi, an executive director at Citi Bank’s Nigerian unit, said the country’s treatment of local investors sets the tone for foreigners. “It is when the business environment is conducive, encouraging and even inspiring for the local investor that the foreign investor will be even more attracted to come in,” Ogunlesi said. She said one thing that the pandemic has taught, and which it would surely demonstrate in the months and years to come, is that there is going to be competition in the postpandemic phase, for scarce foreign investible funds.

tion deadline, therefore, became imperative in order to mitigate likely negative consequences of the pandemic on the exercise. “The commission hereby extends and segments the recapitalisation process into two phases as follows: 50 percent of the minimum paid-up capital for insurance and 60 percent for

reinsurance shall be met by 31 December, 2020. Insurance companies are required to fully comply with approved minimum paidup capital not later than 30th September, 2021,” NAICOM said. The segmentation means life companies operating currently with N2 billion will increase to N4

billion by December 31, 2020 as first phase, and to N8 billion by September 30, 2021; general business companies operating currently with N3 billion will increase to N5 billion by December 31, 2020 as first phase, and to N10 billion by September 30, 2021. Furthermore, composite business companies

operating currently with N5 billion will increase to N9 billion by December 31, 2020 and to N18 billion by September 30, 2021, and reinsurance companies operating currently with N10 billion will increase to N12 billion by December 31, 2020 in the first phase, and to N20 billion by September 30, 2021.

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and the and the Covid 19 Covid 19

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people travel across the globe for economic and leisure activities. travel across the globe people As the coronavirus crisis rages for economic and leisure acon, medical facilities in the tivities. which are collapsed during this most are the advanced coronavirusnations crisis rages Other major economies like As period. overwhelmed. Leadersin and on, medical facilities the the United States of Americitizensadvanced alike havenations been commost are ca, the major Unitedeconomies Kingdom and pletely blindsided. Nigeria’s Other like overwhelmed. Leaders and Europe have not fared much stock market shed NGN2.2Trn that has befallen the world in the United States of Amerialike have been comAs at the last count, global casbetter, these markets and still citizens in two months and the bloodthe last century to date. ca, the with United Kingdom pletely blindsided. Nigeria’s es were 402,054 with 17,507 counting their losses as the letting is far from over. Europe have notWhen fared much consider stock focusing market shed budgeting on topNGN2.2Trn priorities and deaths, with all 195 countries Coronavirus pandemic conNigeria has Ideally, now after recorded As at the last count, global casbetter, with thesecutmarkets down onstill unnecessary strict in twoexpenses. months and the bloodof the world affected. The tinues to cause massive human over 40 cases of COVID19 es were 402,054 with 17,507 counting their losses as the budgeting, you should have some leftover, which you letting is far from over. top 3 hit countries are China, and economic losses in these including very senior public deaths, with all 195 countries Coronavirus pandemic use to consave for Nigeria retirement,has build now up an emergency recorded Italy and the United States of nations. On the can back of these officers and personalities. Our of the world affected. The tinuesunique to cause human fund (3-6 months of monthly earnings example), over 40 cases of for COVID19 Everyone’s financial situation is however in massive America with 81,171, 63,927 developments, the Internaeconomy has also witnessed pay offin debts, or apply towards achieving other financial top 3 hitincome, countries are China, and losses these terms expenses, assets eveneconomic liabilities. very senior public and of46,168 infections andand tional Monetarygoals. Fund (IMF) including other drastic adverse impact Italy and“one the size United States of nations. Onforthe back of these While fits all” approach and personalities. Our 3,277,a 6077 and 582 deaths re- will hasnotinwork a statement issued on officers in the shortest time with crude America 63,927 the Internaeveryone, with there 81,171, are however three developments, major personal economy has can also witnessed spectively. In Africa, the worst Monday 23 March forecasting The simplest way to create a budget be from on paper or oil prices crashing over finance46,168 strategiesinfections that could fit all. These and and tionalstrategies Monetary Fund (IMF) other drastic adverse impact hit include: are South Africa, Egypt that COVID -19 trigger on will a notepad but you can also make useUSD30 of budgeting USD60to below and may 3,277, 6077 and 582 deaths rehas in a statement issued on in theExcel shortest with crude and Algeria. spreadsheet (Microsoft has time a template for a global recession that could predicted to fall to USD20 spectively. In Africa, the worst Monday 23 March forecasting oil prices crashing from finance), oryield budgeting app 6.75% toover get be worse than personal the global fi- software, whilst the on FGN 1. BUDGETING. hit are South Africa, Egypt that COVID -19thewill trigger below and job done. You USD60to may consider testingUSD30 different China, where pandemic nancial Budgeting involvesthe having a structured processcrisis and of 2008-2009, Eurobond issued atout a yield of and Algeria. a global recession that could month approaches to find to the fall one that best fits to USD20 first broke out has today been but with a hope of recoveryeach in predicted planned activities, dealing with a household’s financial 7%, has spiked to 12.8%. In be worse than the global fiyour needs and style. Since budgeting involves setting whilst the yield on FGN 6.75% resources. is a pro-active, focused,2021. technical and declared It wholly free of COresponse, the Central Bank of China, where the pandemic nancial crisis of 2008-2009, goals, it is important to also have monthly sub goals, in Eurobond issued a yield of disciplined strategy toboth handle one’s current financial VID19 bringing a ray Nigeria, CBN hasat now marked order to track in your progress. first broke isout has barometer todaycan been but with afiscal hope recovery 7%, has spiked to 12.8%. In situation. also of Once again, the of world’s econoof hope Itthat thea virus bea household’s down the the exchange rate“70-10of the Finally, in budgeting, we have declared wholly CO-A budget 2021. condition, and of health. response, the “50-30-20”, Central Bank of mies expresses are witnessing the and underfought toresources a halt free (not without USD forofNGN from 10-10” “70-20-10” rule thumb. TheNGN360 50-30-20 VID19 bringing both a ray financial terms for operations (and is reflected in revenue Nigeria, CBN has now marked belly of globalization. Hand significant loss of lives) and a to 50% NGN376 NGN380 to rule involves spending of your to money on needs, andhope expenses) ofthe an individual forbe some Once specified periodthe world’s again, econoof virus down theWith exchange rate in of the in hand with 30% opportunities specter ofthat the huge costscan of the the deon wants and USD1. 20% on savings. The fall 70-10-10-10 in the future. As a tool of financial planning, a budget mies witnessing the underfought to the a halt (not without USD for NGN from NGN360 such are as and access both global 70% attackas of virus to Nation.of operations involves spending of your income, giving out 10% mand from China and Saudi/ serves a guide to lives) theaconduct a to belly of and globalization. Hand significant loss of andefa to NGN376 to NGN380 to to the needy, saving or investing 10% for your future funding global markets If there will be long lasting Russia price war, Nigeria is basis for of evaluating actual results. in hand with opportunities specter the huge costs of the Withfacing ingrow, dethen Investing on yourself egthe to fall learn, for domestic companies, come 10%USD1. fects of the nature and quanreportedly challenges such as access toand both global attack of the virus to a Nation. mand from China Saudi/ travel. While 70-20-10 involves for vulnerability cri- the tum of antiseptics moving its rule crude atand an 70% acceptIt is therefore, a major sprayed key to financial health. 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It is important to do what worksback for your however to makeones budget as realistic as possible. cial crisis and now borderless We appear headed to to the victims and of the near future self. recession with half of the prodiseases easily transported as total shut down of domestic

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key. Your biggest fixed expense is likely your rent. You could try approaching your landlord for a reduction, or alternate solution. On electricity, try reducing the amount used on a normal day i.e make it a habit to switch off lights and appliances when not in use.

3. EARN MORE. There are two major ways to create income, its either by working or by investing. Investing can be defined as a deliberate act of a person or individual to redeploy cash into assets, trading or securities organized by a financial institution with the view of earning a targeted return over a period of time. If you put all of your effort into the earning, the savings will look after themselves. So, the major key is to “Earn more money, but don’t spend all”. What’sdown left over your expenses are shopping. As we all itchange ofafter supplies of drugs, metschool is what and you save, automatically, without trying.proour mode of work, manufacturing tools, 2. CUT UNNESSARY EXPENSES. In earning and saving, there is aequipment play, the Technology, Online duction etc.drugs, from shopping. As we all change down of three-part supplies step-by-step of After successfully creating a basic budget, you’ll have strategy: and Education, China is a huge lesson the mode and ofOnline work, Games school and manufacturing tools, onproa much better understanding of incomeour spending imperative of backward inteDigital Technology and Netfplay, the Technology, Online duction equipment etc. from how best you can trim your expenses.

grationisand having control of China a huge lesson on the supply lines.ofWith government imperative backward intebacking,and local manufacturers gration having control of should lines. explore supply Withopportunities government to redesign theirmanufacturers models. backing, local As governments undershould explore finally opportunities stand the critical importance to redesign their models. of governments the entire health sector As finally undervalue chain particularly pharstand the critical importance fumes, fashion items, holidays, maceuticals, medical investigatials areand required. means of the entire health sector resorts cruises This thrive) and tions, chain equipment production your markets diversification decisions value particularly pharburst when only essen-– learn • Earn More chase opportunities at work andto primary healthcare. The mustare gorequired. beyond geographimaceuticals, medical investigaThis means jected oil revenue in jeopardy, tials &/or outside work. Get skills that can create remote Nigerian government which cal, asset class (equity versus tions, equipment production your diversification decisions working opportunities. could takeinvested tech related and foreign exchange reserves has You traditionally very debt) and issues to the and primary healthcare. The go sectoral beyond geographicourses if that is where lies or even start under oil intense pressure if the must littleyour in interest health and education jected revenue in jeopardy, nature of the products of the Nigerian government which asset class (equity versus a business part-time on sales websites, blogging or Federal Government contin- cal, is clearly facing invested the implicacompanies whose securities and foreign exchange reserves has traditionally very possibly atostartup. it’s all risky, stressful, work/ debt) and sectoral issues the Sure, ues to defend Naira. if the tionsif in of such choices now.this The you invest in. This way you en- … but, under intensethe pressure life unbalancing you are a millennial, is little health and education nature of the products of the Everyone seems to be countCentral Bank of Nigeria has sure that your entire portfolio Federal Government continthe best time to putisin clearly the workfacing rather than struggling the implicacompanies whose securities ing losses as economic activiAs needs should be of priorityat the signaled awealth. changing approach is more not losing same time. uesthe to names defendimply, the Naira. in way youryou 40sento accumulate The now. end The goal tions of such choices you invest in. This ties grind to halt, businesses while wants seems area mere that should cut off.erosion with its recent decision, (as part Thebe global of value supersedes the struggles. 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The modern world is full of pressure toDigital spend money Technology and NetfInvestment Lessons and especially in this period of the pandemic, lix couldwhere be winners. It is essential the purchase of consumables has skyrocketed globally. in investing to It is however important to save for the Investment rainy days, the but Lessons recognize impact of boom this will only be possible when your expenses are less inlike (when luxuries cars, perIt is essential investing to than your disposable income. As our consumer culture items, holidays, fumes, fashion recognize the impact of boom expands, it takes more discipline to separate what you resorts luxuries and cruises and (when likethrive) cars, per“need” from what you “want”. burst markets when only essen-

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Thursday 04 June 2020

Innovation

BUSINESS DAY

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How agritech firms in Africa are enabling food security, supply amid restrictions FRANK ELEANYA and OPEOLUWA RUNSEWE (Guest)

he COVID-19 may have governments, scientists and health workers confused as to how to contain it, it has, however, underlined the need for food sustainability, supply and safety and why technology needs to drive the agricultural industry in Africa. As the number of confirmed cases on the continent exceeds 100,000 people, with 3,184 dead and 41,576 recovered, businesses and citizens have suffered from full and partial lockdowns considered as necessary measures to slow down the spread of the virus and address the healthcare needs of those affected. Due to the restrictions, some farmers said they have been unable to harvest their crops from the farms, leading to losses, while others are unable to prepare for the planting season. As farmers experience restrictions, consumers suffer the scarcity in the form of increased price in food products. In April 2020, the heads of three global bodies, the World Trade Organisation (WTO), the Food and Agriculture Organisation (FAO)

and the World Health Organisation (WHO) jointly enjoined governments around the world to map out measures to ensure that the border restrictions arising from the COVID-19 pandemic do not disrupt the food supply chain. Nigeria’s President Muhammadu Buhari has also reiterated the need to ensure steady food supply for the period of lockdown in his last broadcast. Nevertheless, movement and supply of goods from the farms to the markets and to the consumers has been anything but smooth and steady. Digital agricultural platforms also known as agritech

firms have had to scale innovations to bridge the gap. Before COVID-19, significant successes were recorded in Africa in the area of digital agriculture as more digital services became commonplace. As new cases continue to emerge, the digitalization of agriculture is still helping farmers to secure basic and essential supplies like fertilizers for farm activities and operations. It is also helping farmers assess supply chain services, markets, advisory, as well as, financial and credit facilities. The digital era offered online platforms like Agropartnership, CrowdyVest, and ThriveAgric among others in

Nigeria, the opportunity to provide credits directly from individual and institutional investors to farmers even as the pandemic persists in Africa. Thrive Agric in May said it plans to offer a solution that sustainably matches food production against a rising population and to foster a fast and effective demand and supply chain between the market and the local farmer. By the end of 2020 the brand plans to leverage on Technology to connect over 250,000 farmers to finance, insight and distribution for their harvest, the brand infuses both digital technology. In Ghana, a platform

known as e-Soko is providing farm-related data management support to farmers, thereby assisting them in the monitoring and analysis of their farming records. The platform, which is accessible either via e-Soko’s website or smartphone application, connects a farmer to different markets, secure payments, and advisory opportunities. While eMsika, a leading platform in Zambia, is also assisting farmers and consumers engage in retail and wholesale trade of agricultural produce, Kenyabased FarmIT provides ecommerce solutions, market linkages and agronomic support to farmers. With more phone access and higher internet penetration rates and the impacts on logistical and e-commerce services, social distancing measures have even become more realistic. For example, more start-ups in the Agric sector across the continent have turned towards platforms that connect them with consumers, thus, reducing the number of contacts that consumers are exposed to while also ensuring that food reaches everyone. Startups such as Farmerline and Chowberry are providing information and food that could help vulnerable people in farming communities

amidst the pandemic. For other startups like Mobile Coldroom, an online and mobile vendor, established to supply a variety of frozen foods to various food service organisations, it has been an opportunity to review market strategy. The company had to switch business models to B2B Just because the market wasn’t ready or receptive to order swing food online and there was a huge logistics gap for frozen food. According to Akinwunmi Adeshina, President of Africa Development Bank (AfDB) and former Nigerian minister of Agriculture, by 2030, the size of the food and agric business in Africa will reach $1 trillion. Agritech firms are expected to account for a significant chunk of the estimate which also positions them as critical players in the race for food sustainability in Africa. Although the World Bank predicts a 25 percent decline in food imports in Africa as a result of the pandemic, the deliberate closure of borders to trade and travel by many African governments has afforded business in the sector the opportunity to review their strategies. This article was written with participation from Opeoluwa Runsewe, managing director of Mobile Coldroom.

These three Facebook projects could upend competition for businesses in Africa FRANK ELEANYA

ocial media giant, Facebook has been busy in the month of May, announcing within the space of one week, three additions cutting across telecommunications, eCommerce and data collection that could prove pivotal for many businesses in Africa. In the month which has seen several lockdown orders eased in many African countries, the company kicked off on 13 May with the announcement of 2Africa, a monstrous subsea cable that will stretch to 37,000km (nearly equal to the circumference of the earth) covering 23 countries in Africa and the Middle East. On May 15, two days after it announced 2Africa, Facebook said it has completed the acquisition of animatedimage database firm, Giphy in a deal worth $400 million. Finally, on May 19, four days after the Giphy deal, the social media giant also announced the release of Face-

book Shops, a platform that enables businesses to set up free storefronts on Facebook and Instagram. While 2Africa is the only project directed on the continent, the Giphy acquisition and Facebook Shops also have ramifications for the eCommerce and social marketing sector in Africa. 2Africa means internet monopoly? Despite leading the world in fastest mobile uptake with three-quarters of the population having a SIM card as of 2017, according to GSMA report, Africa has been unfortunate in the deployment of broadband infrastructure. Mobile subscriber penetration is around 44 percent, well below the world average of 66 percent. As of December 2019, internet penetration on the continent was at 39.3 percent less than the world average of 59 percent. When completed, 2Africa is expected to deliver an expansive internet capacity, redundancy, and reliability across Africa; supplement a

rapidly increasing demand for capacity in the Middle East; and support further growth of 4G, 5G, and broadband access for hundreds of millions of people. The 2Africa cable by Facebook promises to provide nearly three times the total network capacity of all the subsea cables serving Africa today making it by far the largest network operator in Nigeria and Africa. It also makes Facebook impossible to compete with, hence existing operators would either collaborate or as a last resort merge to survive. Facebook Shops could eat ecommerce firms’ lunch Facebook Shops would not be selling products and services directly to users like eCommerce platforms do, but it promises consumers even better shopping experience. According to the company, Facebook Shops is a mobilefirst shopping experience where businesses can easily create an online store on Facebook and Instagram for free. The platform lets sellers

choose which of their items they want to feature, merchandise with product collections and tell their brand stories with customisable fonts and colours. Visitors can then browse, save and order products. Shops comes as small businesses have been pillaged by COVID-19 pandemic with a third of them (31%) saying they have shut down, according to a survey conducted by Facebook and the Small Business Roundtable. An additional 11 percent of the 86,000 business owners and employees that responded said they could fail within the next three months if the pandemic does not end. But many online businesses have also seen growth during the period. Mark Zuckerberg said Shops will improve on the standard web commerce experience by storing users’ payment credentials in a single place that they can then use on any Facebook or Instagram storefront. There are currently over 160 million small businesses using the

company’s apps. “The Google product will abstract what many African tech firms offer for largely free and Facebook Shop will become a mortal threat to many ecommerce companies,” said Ndubuisi Ekekwe, chairman of Fasmicro Group and a technology expert. “By the time Facebook adds Libra and an evolved payment system, turning Facebook, Messenger and Instagram into a global market platform, African fintechs may struggle. Practically, if you can buy from a Facebook Shop and pay therein, you will not see any incentive of clicking out or launching another app.” Keeping tabs on thirdparty apps with Giphy Facebook’s intention for acquiring Giphy is not immediately clear as GIFs are still nascent and are yet to become advertisers toast. But the fact that they are appearing more frequently in many conversations makes them immensely beneficial to the social media giant. When people use happy or

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sad GIFs to express how they feel, that becomes valuable data for a company like Facebook that has over the years learned to almost accurately match products and services to particular users. As of January, Giphy said it has 200 million daily users. That number is likely to go up with the acquisition. Experts say with Giphy Facebook can focus on creating tailored GIF contents - like Africa GIFs - that will draw in more advertisers. “Seems like the Giphy deal is strategically great for FB and probably gave Giphy the lifeline it needed,” tweeted a tech expert by the name @Vivekxk. Facebook, he said, gets valuable intelligence - Giphy is embedded into many top apps including Twitter and the SDK requires disclosing user deviceIDs. “With this type of tech, Facebook can keep a watchful eye on what’s picking up buzz and gives them ample time to react or understand what’s going on at the ecosystem level,” he said.

Thursday 04 June 2020

BUSINESS DAY

news

NCAA approves five airports for flight resumption IFEOMA OKEKE

namdiAzikweInternational Airport Abuja, Murtala Mohammed International AirportLagos,MallamAminuKanoInternational Airport Kano, Omagwa International Airport, Port Harcourt and Sam Mbakwe Airport Owerri are the five airports designated for the resumption of flight operations once it is given the go ahead to start operations on June 21, 2020. The Nigeria Civil Aviation Authority (NCAA) made this known in a letter dated June 1, 2020, with ref NCAA/DG/AIR/11/16/121 to Accountable Managers of all domestic and foreign airlines operating in the country. ThelettersignedbyMusaNuhu, director-generaloftheNCAA,stipulated that other airports would be gradually reopened, stressing

however that the five would adhere to existing COVID-19 protocols for approvals. The letter read, “The closure of Nigerian airports to domestic flights has been extended to 2300Z on 20th June 2020. The gradual start of domestic flight operations will commence on 21st June 2020 with Nnamdi Azikwe International Airport Abuja, Murtala Mohammed International Airport Lagos, Mallam Aminu Kano International Airport Kano, Omagwa International Airport, Port Harcourt and SamMbakweAirportOwerri.Other airports will be gradually added to the network after a review and assessment.” The NCAA boss in the letter stressed that continuous closure of Nigerian airports to international flights would continue until a date of resumption was announced.

ICAN mulls plan to establish first full online university in Nigeria KELECHI EWUZIE

ewly-elected president of the Institute of Chartered Accountants of Nigeria (ICAN), Onome Joy Adewuyi, says plans are on to unearth the Institute’s formal proposal to establish a university and explore the possibility of establishing the first full online university in Nigeria. The council of the institute would intensely engage stakeholders in the higher education value chain in the country to bring this dream to a reality in not too distant future, Adewuyi said. Adewuyi, who spoke in Lagos, Tuesday, at her virtual investiture as the 56th president of the accounting body, said the lesson of the COVID-19 pandemic was not lost on us, adding that the incident had challenged the ICAN to redefine the values shared, the way we work, relate and account for our actions and inactions. According to Adewuyi, “This emerging paradigm has implications for how we relate and bond as professionals who share a common vision of working together to build a great nation with a sustainable economy driven by strong institutions. “Council has taken the bold step to invest hugely in the right human capital and technology

to support these changes. The Institute’s budgetary allocation for new Information technology infrastructures needed to achieve these changes will have to go up and we are ready to make these investments. We will no longer see expenditure on Information Technology as a cost centre but as critical Investment that would yield good returns for our Institute.” Adewuyi, the seventh female president of ICAN, said under her presidency with the Theme: ‘Repositioning ICAN for Greater Visibility,’ noted that with increasing pervasiveness of artificial intelligence and machine learning, the Council would review its examination syllabi to ensure the Institute continued to produce Future Ready Chartered Accountants with skills and competences desired by the market. With the drastic changing dynamics in the market, under her leadership, ICAN would expand collaborative horizons to bring on board non-traditional partners, especially the tech companies. Specifically, we would identify firms that can work with our IT team and Research & Technical Department on the gradual incorporation of emerging technologies such as Machine Learning, Data Analytics, Robotics and Artificial Intelligence into our activities, she said.

NNPC unveils COVID-19 contacts-tracing app HARRISON EDEH, Abuja

igerian National Petroleum Corporation (NNPC) says in its commitment to continually deploy Information and Communications Technology (ICT) for the purposes of operational efficiency and accountability within the corporation’s system, the national oil company has developed a contacts-tracing software that will be deployed in all its locations across Nigeria. Kennie Obateru, NNPC group general manager, group public affairs division, quoted the corporation’s group general manager, information technology division (ITD), Danladi Inuwa, as saying that the novel app was part of the NNPC’s sectoral contribution to curb the spread of the pandemic within its formations and ministries, departments and agencies of the government. “The Contacts-Tracing Solution is ready to be deployed, all the technical testing has been done and the solution is ready

to go live. Everywhere you go around NNPC locations would be covered by this novel application which would reveal all information about persons visiting any official and should there be any medical challenge, the NNPC Medical would be able to track from the information at the data base all the contacts and advise properly,” Inuwa said. He said the application could also be used by members of staff of the corporation to document their private visitors at their homes, stressing that the app would enable the workforce adjust adequately to the ‘new normal’ way of living to minimise the spread of the disease. The IT expert stated that in order to minimise human contacts in business transactions at the Petroleum Products Marketing Company (PPMC), a Downstream subsidiary of NNPC, in the face of COVID-19, the corporation has also deployed a Sales and Distribution application in the Oil and Gas Secondary Model Portal that would enable marketers buy petroleum products online. www.businessday.ng

IGP backs Lagos community policing initiative JOSHUA BASSEY

agos State has taken an audacious step towards the improvement of securityincommunitiesacross the state, with the inauguration of State Community Policing Advisory Committee (SCPAC) and its operationsarm,StateCommunity Policing Committee (SCPC). The initiative was launched by Governor Babajide SanwoOlu at the Lagos House, Ikeja, with support from the police high command. Sanwo-Olu said the inauguration of the two committees marked a turning point in the state government’s effort to re-strategise the security architecture using community policing as proposed by the Inspector General of Police (IGP), Muhammed Abubakar Adamu. The initiative, Sanwo-Olu said, has been long overdue, adding that the reform was being

implemented with the objective to address inadequacies of the current policing model, which, he said, had failed to engage the locals and neighbourhoods in knowledge sharing and intelligence gathering to nip crimes in the bud. Assistant Inspector General of Police (AIG) in charge of training at the force headquarters in Abuja, David Folawiyo, who represented the IGP, said the nation had reached a point where the police must interface with community members in maintaining social order. “It is a bottom-up approach that shift focus on reactive law enforcement to proactive problem solving,” he said. SCPAC, which is co-chaired by the Lagos Commissioner of Police, Hakeem Odumosu, and chairman of Council of Obas and Chiefs in Lagos, Oba Rilwan Akiolu, will be the custodian of

the initiative and it is to maintain highest level of oversight on community policing in the state. SPAC, on the other hand, will be responsible for managing and coordinating the state-level operations of the community policing programme, and it will, among other functions, help identify security threats in communities and work with the police and the Community Police Officers (CPOs) in evolving appropriate strategies for addressing them. The governor said the community policing initiative was conceived and rolled out to achieve fundamental changes in the way government responds to security matters and make security agencies proactive in discharging their statutory duties. “Today is an auspicious day for the people of Lagos State. We are gathered here to take an important step in the implemen-

tation of a long overdue policing reform effort – the Community Policing Initiative. “In a democracy, the involvement of the people in all matters of governance, especially on issues that impact directly on their well-being is key to achieving good governance. One of the inadequacies of our current policing systems has been the inability to tap the knowledge and intelligence that exists at neighbourhood and community level. “The work that the Police are expected to do becomes more difficult when they are expected to do it alone. No matter how well-resourced or technologically advanced a Police Force might be, there might be no progress without the trust and support of the communities in which they operate. Every citizen has a role to play in ensuring that the security architecture functions optimally,” the governor said.

Kemi DaSilva Ibru (l), founder, Women at Risk International Foundation (WARIF) and Temitope Iluyemi, P&G Africa director for government relations and public policy, at the official handover of Always sanitary pads to WARIF in commemoration of 2020 World Menstrual Health & Hygiene Day

What Discos do to push out crazy bills to electricity consumers Olusola Bello

fter serious investigation on how the electricity distribution companies (Discos) arrive at what is now termed ‘crazy bill,’ which has frustrated consumers and in some cases crippled businesses, it is discovered that it is an attempt to ward off the financial pressure from electricity generators, market operators and Transmission Company of Nigeria (TCN) that the companies pass the financial burden to consumers. According to investigations by BusinessDay, when the Discos supply power to a particular residential area, the total energy supplied to that area is divided by the number of houses there. Whatever they

arrive at following this division is what they pass to each house. This situation is more disadvantageous to those residents that don’t have pre-paid meters, because they can be easily manipulated. It is even worse if a good number of the residents have pre-paid meters. Whatever that is recorded by energy meter installed as the amount of energy supplied to the area that is what is spread across those customers who probably, on many occasions, suffer consistent blackout. Mind you, it is the energy supplied they bill you on and not energy consumed, said Tobaloke Adebayo, an energy consultant in Lagos. He says the people in the semi urban centres are the ones that suffer most in respect of this crazy

bill because they may not be able to query the Discos officials, as they would just accept the bill. The reason they do so, according to an insider in one of the companies, is because of the fact that they are often asked by both the TCN and generating companies to pay fully for the power supplied to them (Discos). They need to generate revenues, therefore. The non-provision of pre-paid meters to so many areas have also been attributed to the fact that the companies enjoy the revenue they get from crazy bills, and so it would be difficult for them to just do away with the idea easily. More also when they realised that NERC would not act against them promptly. Adetayo Adegbemle of PowerUp Nigeria describes the bill as

really crazy; “Crazy Bill is what it is. Crazy.” He said: “What people refer to as Crazy Billing is actually estimated billing. Practice of billing of consumers by the Discos that follows no logical principle. However, the era of estimated billing has come to an end by the NERC order capping electricity consumption by customers.” According to Adegbemle, NERC has not been able to control these companies because of capacity problems; “NERC itself 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, he said.

Naira depreciates against dollar across FX markets Hope Moses-Ashike

igeria’s currency weakened against the dollar across foreign exchange markets at the end of trading Wednesday. The depreciation was attributable to the activities of speculators, as the Central Bank of Nigeria (CBN) delays its dollar sales re-

sumption to Bureau De Change (BDC) operators. Consequently, the naira lost N2 to the dollar that traded at N442 at close of business on Wednesday, compared to N440 traded on Tuesday on the black market. The local currency also weakened at the retail Bureau, losing N3 to the dollar that closed at N446 at

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the end of trading on Wednesday, from N443 on Tuesday. CBN said on April 29, 2020, that it had completed plans to resume foreign exchange sales to the BDC segment for business travels, personal travels, and other designated retail uses, as soon as international flights resume. On the same day, the apex bank resumed dollar sales for @Businessdayng

school fees and Small and Medium Enterprises (SMEs) and directed users to access FX from the banks. At the Investors and Exporters (I&E) forex window, naira weakened by N0.83k as the dollar was quoted at N386.33k at close of trading on Wednesday, as against N385.50k closed since Monday, data from FMDQ show.

Thursday 04 June 2020

BUSINESS DAY

ENERGYREPORT Oil & Gas

Power

Renewables

Environment

Full deregulation as an enabler for private sector investment in downstream olusola Bello

eregulation of the downstream sector of the petroleum industry remains an enabler for a private sector investment. But this cannot be achieved as long as the price of premium Motor Spirit (PMS) is being controlled by the government. The sector will continue to face decline as many of the investors will turn their back against the sector while some of those currently operating may even close shops just as the case is presently. For instance, about 44 depot operators came out as members of Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) a few years back, today, only 15 of them are currently operating, because the enabling environment is no longer conducive for them to operate. Several depots have closed down partly because the government has been owing them and have not pay them, this coupled with the fact that the

enabling environment is not there for them any longer to operate. The banks also no longer borrow them money because they are owing huge amount of money. Full deregulation is an enabler for any private sector investment. The downstream industry requires significant investments to raise the standards along the supply chain, from improving the refining capacity, pipelines, trucks,

depots and filling stations to supporting the ancillary and derivative industries that will emerge from an improved downstream sector. However, investors require and attractive environment, devoid of uncertainty. Marketers who spoke at the recent Nigerian Petroleum Downstream Summit Webinar, in Lagos said the downstream industry requires significant investments

COVID-19: Govt should encourage more investment in local refining to mitigate economic failure olusola Bello

ore investment in local refining capacity is the best way out of current economic conundrum which will ensure that the remains resilient post COVID 19 and beyond, Momoh Oyarekhua, OPAC Refinery chairman country, has said. This according to him, making more investment has become necessary following the sudden but sustained drop in the price of crude oil in the international market resulting from the collapse in demand due mainly to the coronavirus pandemic, coupled with lack of storage capacity to take up excess supply on the part of most of the major buyers around the world has made them not to be able to sell at profitable prices. He said that by encouraging and increasing local refining, Nigeria saves itself the embarrassing situation of chasing crude buyers around Olusola Bello, Team lead,

the world, and can also eliminate the importation of premium motor spirit (PMS) and other refined products thereby making it possible that the country cuts its foreign exchange exposure. “We can save a lot of foreign exchange which will be utilized to fund other important sectors of the economy, which will mean that, as a country, we will not be heavily exposed to the international crude or currency politics. More investment is needed to increase our local refining capacity and the government should provide specific ‘Target Framework’ to further support and encourage local investors in this sector so as to ensure that we produce enough for our local consumption and even for export to earn more foreign currencies while creating jobs,” Oyarekhua has said. It would be recalled that, following the outbreak of the COVID-19 pandemic, the world economy had gone into a downturn resulting from the shutdown of economic activities leading to reduced

Graphics: Joel Samson.

or near absent demand for crude oil. The resultant effect was the drastic fall in the price of crude to nearly USD10 in the international market. On the back of the crisis occasioned by the pandemic, was the collapse of dialogue between OPEC and Russia over the proposed oil production cut leading to a Russia-Saudi Arabia oil price war in March. Reacting to this development and the anticipated future crisis, Oyarekhua stated that government increasing and doubling support for local refineries will further reduce the hardship faced by some of the players in the downstream sector of the oil industry whilst ensuring that Nigeria can achieve better consumerfriendly pricing for PMS and other finished products which can be produced locally, he made the argument that, “as a nation, we must boost the capacity of our local refineries and scale the modular refineries to meet the challenges of the future and to also sustain the gains we have made in the oil and gas industry”.

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to raise standards along the supply chain. The marketers, however, said investors required an attractive environment, devoid of uncertainties. The group of panellists that examined the downstream situation and it implications for the Nigerian economy were delighted that government was taking the issue of full deregulation seriously and had taken some

important steps noting that the country would benefit by going beyond the current steps taken. According to them, the conversation with government and other stakeholders continues to ensure the process is completed as soon as possible, creating a win-win situation for Nigerians, the government, stakeholders, and the industry. Maintaining the petrol subsidy which has resulted in operational inefficiencies is not sustainable. This would not be an appropriate channel to support or plan for the future of Nigeria. Removal of price controls, allowing market forces and competition to determine prices, especially for PMS will benefit the country and the industry. Now that the government claimed it has removed subsidy and also deregulated the downstream the best thing is for to her follow them up with appropriate new legislation needed to be put in place and enforced as deregulation could only be as effective as the legal framework put in place to guide it. According to Tunji Oye-

banji, managing director of 11plc and chairman Major Oil Marketers Association of Nigeria (MOMAN), he said, the survival and indeed, the growth of the downstream oil industry is important to Nigeria and Nigerians as it provides employment directly and indirectly to millions of Nigerians via the industrial sector, construction sector, transportation sector, station sales and administrative personnel, regulatory personnel and other businesses that service and support the downstream. Dame Winifred N. Akpani, MD/CEO Northwest Petroleum and Gas Company Limited and also chairman Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) in her contribution, said the money saved can be used to grow the economy by investing in infrastructure, educating the next generation of Nigerians and keeping the population healthy. “This in turn will generate revenue for the country, creating an avenue for Nigeria to leave the poverty trap and emerge as the refining hub for West and Central Africa.”

Experts say cost maximisation, govt support key to navigate oil, gas business Josephine Okojie

s the novel coronavirus outbreak continues to trigger a drop in global crude oil demand and prices, experts say effective cost maximization and government support is key in helping businesses in the oil and gas sector survive the negative impact of the virus. Cost maximisation they say would enhance efficient management of resources and also save the operators some money that would have otherwise been spent on things that are not too important. While government support would be in the way of creating enabling environment through incentives such as in the areas of taxes and royalties. The experts who spoke during a webinar on ‘Strategies to Navigate the Oil and Gas Business through the Global Pandemic’ urge businesses in the sector to seek effective ways to maximise their cost of production.

Ainojie Elex Irune, chief operating officer of Oando Energy Resources, said that oil producers have to look for an efficient way to maximise their cost of production. As doing so would also save both the operators and the government some money. Irune also called on the government to assist local oil and gas producers sustainably during this process. “The recent OPEC+ production cuts of about 10 million barrel is a historic one in the oil and gas industry,” he said. He said the Nigerian Government has been very aggressive to bring down the cost of production in oil and gas industry, stating further that this is first time the industry is seeing this kind of movement. “But, the Petroleum Industry Fiscal Bill will be very useful this period as it speaks very much in a situation like this. I would urge the Federal Government to take a closer look at this for the passage of the Bill,” Irune added.

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

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Speaking also, Ade Adeola, managing director - energy &natural resources of Standard Chartered Bank, noted that the oil and gas industry is a huge catalyst due to the number of players in the industry. According to him, COVID-19 induced CAPEX cut has resulted in the delay of key projects, review of some and cancellation of others. Countries like Cameroon, Nigeria, Ghana, and Senegal, he said, have put on hold some of their deepwater projects. He we do not expect to see additional project been sanctioned. While Capital will flow to where it gets is best value as investors require variables that they can manage and control. The Standard Chartered boss said: “We have seen the efforts of the Federal Government regarding the Petroleum Industry Governance Bill ( PIGB) as they are working on passing the Bill to address specific challenges and to move the industry forward,” he added.

Wednesday 04 June 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

Global stocks climb on hopes of economic recovery and stimulus Wall Street on pace for fourth straight day of gains PHILIP GEORGIADIS AND HUDSON LOCKETT

lobal stocks pushed higher as investors brushed aside geopolitical risks and focused instead on hopes of more central bank support and a swift rebound for economies rocked by the pandemic. The S&P 500 index opened up 0.7 per cent on Wall Street, setting it on track to notch a fourth straight day of gains. The Dow Jones Industrial Average rose 0.9 per cent and the tech-weighted Nasdaq gained 0.4 per cent. US stocks have forged higher despite mass protests in cities across the country after the death of an African-American man at the hands of police and rising tensions between Beijing and Washington. The S&P 500 is now less than 10 per cent off its all-time high, as investors bank on long-term expectations for growth. The gains in Europe were sharper. FTSE 100 was up 1.4 per cent, taking the London blue-chip index’s rise this week to nearly 4 per cent. Frankfurt’s Xetra Dax gained 2.8 per cent, and in Paris the CAC 40 rose 2.5 per cent. “Compared to market draw-

downs in past recessions, the speed and scale of this rebound is unusual,” said Kerry Craig, global market strategist at JPMorgan. “The difference here is huge amounts of stimulus from governments and central banks.” In a sign the rally in equity markets was broadening, stocks in Europe have outperformed Wall Street this week. “Just as the winners of the last two months were running out of steam, along come the laggards to the party,” said Deutsche Bank strategist Jim Reid, noting that many expect the European Cen-

tral Bank to announce an expansion of its stimulus programme on Thursday. The yield on the 10-year US Treasury rose above 0.72 per cent and the dollar weakened to its lowest level in almost three months as investors embraced riskier assets. The dollar index, which measures the currency against a basket of its global peers, fell for a seventh straight session. “The FX moves we are witnessing may be more than just a short squeeze and the start of a broader trend away from the dol-

lar,” foreign exchange analysts at ING said. Survey data released on Wednesday showed that business activity in Europe had begun to recover as lockdowns loosened, although German unemployment has risen to a four-year high in a sign of the significant economic damage caused by the pandemic. Oil prices gave up earlier gains that had seen Brent climb back above $40 for the first time in almost three months. Brent, the international benchmark, fell 0.7 per cent to $39.25 a bar-

rel. US marker West Texas Intermediate slipped 0.1 per cent to $36.80. A planned Opec+ meeting on Thursday was in doubt after a dispute erupted over producers’ compliance with an agreement to curb production. Equity markets in the AsiaPacific region rose, with South Korea’s Kospi adding nearly 3 per cent after Seoul unveiled an additional $29bn stimulus programme to help support the economy. “Markets are in full liquidityon mode” as investors look through headwinds including geopolitical friction such as over the future of Hong Kong, strategists at HSBC said in a note. “Instead, newsflow around new stimulus packages and possible vaccine breakthroughs are greeted jubilantly. This might continue in the short term, but is hardly sustainable,” they added. Elsewhere in Asia, China’s CSI 300 index of Shanghai- and Shenzhen-listed stocks was broadly flat after the Caixin purchasing managers’ index showed that Chinese services sector activity rose for the first time in four months in May. New orders jumped at the fastest pace in a decade, indicating a robust recovery in certain parts of the world’s second-largest economy following its Covid-19 outbreak.

Repsol sells €1.5bn of hybrid bonds as risk appetite returns The market for equity-like debt had faded after pandemic hit demand

NIKOU ASGARI

panish oil major Repsol sold €1.5bn of bonds with equity-like features on Tuesday, in the latest sign that debt investors are regaining some appetite for riskier instruments. The market for so-called hybrid bonds, which place less of a strain on a company’s balance sheet as they never have to be repaid, faded when the spread of coronavirus damaged demand for debt more exposed to an economic downturn. But the new deal from Repsol marks the second such issuance in recent days, after Swiss fragrance company Firmenich reopened the hybrid market with a €750m bond last week. Companies with solid credit ratings often issue hybrids as rating agencies tend to class them as

First-quarter profits at the Madrid-listed company slid 28 per cent to €447m after the SaudiRussian oil price war sparked a collapse in the market. © Bloomberg

half-debt and half-equity, allowing businesses to raise cash without seriously weakening their creditworthiness. The Madrid-based oil company drew more than €11.5bn of investor orders for its deal on Tuesday, allowing banks running it to sharply lower the yields www.businessday.ng

on offer. The hybrid debt was split into two tranches with options to repay investors in six and eight and a half years, pricing at yields of just 3.75 and 4.25 per cent respectively. The deal underscores how recent ruptures in the oil market have done little to dent investor demand for debt

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from the larger, well-capitalised majors. “There’s a lot of demand for the asset class,” said Bruno Sáenz de Miera, a director at Citigroup who worked on the Repsol deal. Repsol is using €1bn of the money raised to buy back an existing hybrid bond. First-quarter profits at the Madrid-listed company slid 28 per cent to €447m after the Saudi-Russian oil price war sparked a collapse in the market. In March, Repsol said it would cut capital spending by more than €1bn in order to limit the damage caused by both the tumbling oil price and falling demand because of the pandemic. Since then, solid support from central banks on both sides of the Atlantic has meant that markets have largely shrugged off recent protests in the US. “Hybrids tend to be issued @Businessdayng

when markets are fairly stable,” said Julian Marks, lead portfolio manager of corporate hybrid strategy at Neuberger Berman. “If markets stay steady for the next few weeks, we might see more issuance.” Another risk to hybrid bond investors is that companies can pause their interest payments in certain scenarios. That prospect was brought to the fore last month when the European Commission said that EU companies that receive state aid should stop making coupon payments on these instruments. Mr Marks said he believed the changes would be unlikely to deter investors from piling in to hybrids. “Coupons on hybrids are cumulative in every case,” he said. “Even if coupons were to be skipped, they would be owed next year or the year after.”

Wednesday 04 June 2020

BUSINESS DAY

COMPANIES & MARKETS

Axa to defy regulators with dividend payment Chief executive Thomas Buberl says the decision reflects a ‘balanced approach’ OLIVER RALPH AND DAVID KEOHANE

rench insurer Axa said it plans to pay a dividend to shareholders, defying the recommendations of regulators worried that the coronavirus crisis will leave the industry facing huge claims. As the economic damage from the pandemic gathered pace in April, France’s regulator, ACPR, and Eiopa, the EU supervisory body, asked insurers to halt planned payouts. That prompted Axa to postpone a decision on its dividend, but on Wednesday the group said that it would be making a payment, albeit a smaller amount than set out with its results in March. Axa chief executive Thomas Buberl, who in April hit out at the regulatory confusion over dividend policy, defended its payout as a “a balanced approach”. “The board has met four times [on this topic] over the past two months and it was the subject of very intense discussion,” he said. The group wanted to balance the need to maintain solvency and liquidity against a responsibility to its shareholders, he added.

The ACPR in April said that French insurers “must refrain from proposing dividend distributions, at least until 1st October 2020”, adding that companies that did not halt payments would have to explain why. Axa shares jumped 7 per cent on Wednesday following the payout decision. The news came as Axa warned that the fallout from the pan-

demic was set to cost it €1.2bn in claims payments, mainly stemming from cancelled events and business interruption policies. “The estimate is the largest single company claims estimate that we have seen in Europe reflecting Axa’s position as the largest global commercial insurer but is still higher than the level than we had anticipated,” said Kamran Hossain, an analyst at

RBC Capital Markets. UBS said that the estimate was 20 per cent higher than it had expected. Axa has been caught up in the growing controversy over whether customers can claim cover on business interruption policies — something many insurers have disputed. Last week, the company lost a court case in France over payments

to a restaurant. Mr Buberl said that Axa would appeal the ruling. He added that there were questions over the contracts of about 1,700 further customers, but an agreement had been reached with more than 200 of them. “We want to go straight to the customer and propose a solution where we pay something and meet halfway . . . we want to find solutions, we prefer dialogue to the court,” he said. Mr Buberl also suggested policyholders would also benefit from finding a middle ground with company. “If you go the court route and you have six months of an accountant checking your accounts, then going back into court, then determining the actual damage, the payment, it could take a long, long time,” he said. Axa shareholders will receive a dividend of €0.73 on July 9, down from the €1.43 that it originally proposed. The company said it would consider paying out another €0.7 later in the year. Mr Buberl noted that “some of our major competitors in Europe have been paying dividends”.

Wall Street strategists say dollar could be set for ‘dramatic’ falls US currency has dipped to nearly three-month lows against its peers over past week EVA SZALAY AND COLBY SMITH

trategists at banks including Goldman Sachs and JPMorgan have turned bearish on the US dollar, after a wave of optimism over the global recovery from coronavirus pushed the greenback lower against its peers. On Tuesday the trade-weighted dollar slipped to its weakest level since mid-March, continuing a five-day streak of losses. Against the Australian dollar, the US dollar traded at its lowest since January, while it was weaker against the euro and sterling and key emerging market currencies such as the Chinese renminbi. Goldman, JPMorgan, Deutsche Bank and Citigroup have argued in recent days that the currency’s long rally could be finally over. More than two years of near-uninterrupted gains had come to an end in March but the dollar had remained stubbornly strong, even as the Federal Reserve slashed interest rates to near zero and flooded markets with dollars through international swap lines. However, analysts now note that several props for the dollar have recently fallen away or begun to wobble.

“We had been discouraging investors from putting dollar shorts in their portfolios during the past few months because of our concern about the [backdrop], but that has changed,” said Zach Pandl, a strategist at Goldman. He noted that big economies including China’s had begun to reopen with low infection rates, while the Franco-German proposal for an EU recovery fund had boosted the euro by easing fiscal concerns www.businessday.ng

across Europe. He added: “We now think it is appropriate for investors to position for dollar downside in their portfolios.” Analysts at JPMorgan wrote this week that brighter sentiment over global growth, as lockdowns were eased, had become a “key driver” of the dollar sell-off. “We no longer have the confidence to stand in the way of this optimism and further neutralise

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our previously defensive trade recommendations,” the analysts said. In March, as concerns over the viral outbreak reached their peak, the dollar spiked as investors stockpiled the greenback in a scramble to pay debts and to find safety in the world’s reserve currency. As the global economy powered down, the dollar surged to record highs against currencies such as the Brazilian real and sterling, as stock markets tanked. @Businessdayng

Since then, concerns over rising risks in the eurozone and tensions between the US and China have encouraged safe-haven bets, keeping the dollar strong. “The standout story in FX this year is the resilience of the dollar. Even though US yields have collapsed, the dollar has stayed strong,” said George Saravelos, the global co-head of foreign exchange research at Deutsche Bank. The dollar became less attractive once US interest rates collapsed to near-zero, but investors struggled to find alternatives. Daniel Katzive, head of foreign exchange strategy for North America at BNP Paribas, said investors still held a lot of dollars in their portfolios — a fact that set up the greenback for a “pretty dramatic move lower”. Calvin Tse, a strategist at Citigroup, said the dollar could now be facing a very long stretch of weakness. “If the global economy really is bottoming out and rebounding again, and US interest rates are at zero and potential growth is lower than emerging markets, we could see the dollar enter into a bear market that could last for five to 10 years,” Mr Tse said.

industry Insight

BUSINESS DAY Thursday 04 June 2020 www.businessday.ng

Changing Nigeria’s approach to industrialisation (5) ... of export and value addition Odinaka Anudu

our previous versions of the series have x-rayed some of the obstacles that have hindered Nigeria’s industrial prog-

ress. Key issues such as wrong application of funds, protectionism, policy flip-flops, and misuse/ abuse of import waivers have been thoroughly discussed. This week’s piece focuses on why it has been difficult for Africa’s largest economy to have a strong non-oil export sector. For starters, the non-oil export sector is a reflection of the state of a country’s industrial sector. A poorly structured non-oil export sector is often characterised by the craze to ship out raw and unfinished products for the desperate purpose of earning foreign exchange by all means. Nigeria’s export sector has over the years been dominated by raw products which serve as inputs for European, American and Asian factories. In 2013, for example, non-oil exports data from the Nigerian Export Promotion Council (NEPC) showed that total earnings by the end of the year were $2.97 billion. Of this, cocoa and its preparations comprised $758.64 million, amounting to 26 percent of the total non-oil exports value within the year. The global cocoa beans market was estimated at $9.94 billion as of 2018, according to a work done by Grand View Research. On the other hand, the global chocolates market was estimated at $140 billion as of the end of the same year, according to another research work by Research and Market.com. This shows that the chocolates market is 14 times the cocoa beans market. This also reflects the difference between raw materials and finished products, and why Nigeria has been where it is. So, Nigeria exports cocoa and imports finished beverages and chocolates. The country then loses foreign exchange, jobs and ancillary industries that should have sprouted from such value chains. Furthermore, the 2013 NEPC data revealed that cocoa was followed by sheep, goat skin and leather, sesame seeds, aluminium, rubber, tobacco products, cotton yarn and woven fabrics. Also on the list were copper, cashew nuts, edible nuts, prawns, shrimps, fish and crustaceans. In 2013, Italy, known widely as producer of quality shoes and leather products, spent $355.63 million on purchasing sheep and goat skins from Nigeria. Also, Spain bought sheep, goat skin and leather valued at $51.67 million from Nigeria while India spent $24 million on buying them from Africa’s largest economy. In

a similar fashion, China, world’s fastest-growing country, bought Nigeria’s leather worth $93.8 million. Incidentally, this was the only major non-oil product bought by China from Nigeria, according to the data. Evidence shows that Italian and Spanish leather products, regarded as superior to Nigerian counterparts, are in various Nigerian markets and are often patronised by the rich class as they are expensive and durable. Some of the leather inputs used in making these foreign leather products might have come from Nigeria. While tanneries are exporting processed animal skins, shoemakers in Aba, Abia State industrial capital, travel to China and several African countries in search of skins. “What happens is that the tanneries in Kano and Kaduna process animal skins and sell them as leather in the global market, earning foreign exchange,” said Chinatu Nwagbara, coordinator of Made-in-Aba Project, who produced shoes for Olusegun Obasanjo in 2016. “So we go to China and other countries to buy. Sometimes, we buy our products and re-import,” he said. While export of skins is a business decision, merely exporting raw products to Europe and the Americas while local industries starve of the same inputs is not be the best industrial strategy any nation should pursue. Even though the situation is slightly changing, the change is still insignificant.

More so, crude oil still dominates Nigeria’s export sector. In the last quarter of 2019, the value of total exports stood at N4.8 trillion. Crude oil component of export amounted to N3.6 trillion or 76.08 percent of total exports during the period while non-crude oil export accounted for N1.14 trillion, or 23.92 percent of the total, according to the National Bureau of Statistics (NBS). For 2019, the share of crude oil exports in total exports stood at 76.5 percent, according to the NBS, maintaining a downward trend from 2016 as the share of non-oil exports continued to increase. The fact is that Nigeria is not producing much and therefore cannot export much. The noncompetitiveness of the manufacturing sector is a major drawback, and successive policy makers have not been able to crack it. In 2018, for example, Nigeria’s total non-oil export earnings from more than 25 commodities in 2018 were $3.3 billion, according to the NBS, but Bangladesh, once one of the poorest countries on earth, earned 10 times that amount ($33 billion) from exporting only one product—textile. Bangladesh has 5,000 garment factories, employing about 20 million people, mostly women, pushing the extreme poverty index down to 12.9 percent, according to the World Bank, as against Nigeria’s nearly 50 percent. Nigeria does not have any full-fledged textile firm today. Yale economist Ahmed Mushfiq believes that Bangladesh’s

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The fact is that Nigeria is not producing much and therefore cannot export much. The non-competitiveness of the manufacturing sector is a major drawback, and successive policy makers have not been able to crack it

recent economic success is attributed to the flourishing garment manufacturing industry. Experts attribute Bangladesh’s success to a convivial business environment that guarantees three to five years return on investments and economic reforms that have taken place in the country. Similarly, between January and December 2018, Vietnam earned $244.72 billion from export of finished products from garments and shoes to smart phones, according to General Department of Vietnam Customs. Giant phone makers such as Samsung, Intel and LG produce smart phones in Vietnam today and export from there. In 2018, the country fetched over $50 billion from export of phones and their components— the biggest turnover among export items— according to the country’s General Statistics Office. It earned $27.3 billion from phones between January and July 2019. The Southeast Asian country attracted Foreign Direct Investment of $16.74 billion between January and July 2019, according to the country’s Foreign Investment Agency. In the whole of 2018, Nigeria’s FDI was $2.2 billion, from $3.5 billion the previous year, according to the United Nations Conference on Trade and Development. According to Vo Tri Thanh, a Vietnamese economist, key to Vietnam’s growth was market reforms. The country worked on private business right; macroeconomic and social stability, while opening and integrating its economy into the regional and world economy, especially in the areas of trade and FDI. Vietnam sees trade as the most important part of its manufacturing sector. In an article entitled ‘Vietnam’s manufacturing miracle: Lessons for developing countries’, three economists Sebastian Eckardt, Deepak Mishra, and Viet Tuan Dinh said Vietnam has numerous bilateral and multilateral free trade agreements, which dramatically cut tariffs, anchor

difficult domestic reforms, and open up the economy to foreign investment. Vietnam likewise reduced its cost of doing business for enterprises. The World Bank said in its 2019 Doing Business report that the country made paying taxes less costly for companies by reducing the corporate income and value added tax rates while eliminating the surtax on income from the transfer of land use rights. Nigerian manufacturers selfgenerate 13,000 megawatts of electricity. Energy comprises 40 percent of their expenditure, followed by logistics. Manufacturers struggle to import inputs owing to delays at the ports and gridlocks at Apapa and Tin Can ports in Lagos. Moreover, start a manufacturing firm today and more than 10 different groups of tax collectors will knock at your door in one day asking for ridiculous fees, including radio and television charges. The state of infrastructure in the country does not support any manufacturing business. Roads are in decrepit state and railways are still at inchoate stages. After the production process, manufacturers’ products become very expensive even for the local market. If China can beat Nigerian manufacturers price-wise at home, think of what happens in the highly competitive global market? Think about policy flip-flops that have damaged a lot of firms, sending them away or into the abyss. Today, the Federal Government has no incentive for exporters. The Export Expansion Grant has not been reinstated seven years after suspension, and non-oil export has been on the slide since then. Ede Dafinone, chairman of the export group of the Manufacturers Association of Nigeria (MAN), wonders how Nigeria can become an industrial or export giant when the country has no infrastructure and funding plan for its exporters. The fact remains that Nigerian manufacturing sector is not competitive. And there is no way the country can have a competitive non-oil export sector.

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