BusinessDay 04 May 2020 by BusinessDay

Sanwo-Olu’s leadership skills come under COVID-19 test ... The fight is far from over; the governor should not rest on his oars

he performance of Babajide Sanwo-Olu, governor of Lagos State, in leading the coronavirus response has

cancelled out what began as spotty leadership of Nigeria’s economic capital and today, amid vacuous leadership at the

FRONT PAGE EDITORIAL

centre, he is emerging a shining light.

mendable. However, SanwoOlu stands above all others in empathetic leadership, practical organisation and effective communication of the dangers posed

To be fair, the performance of the governors of Ogun and Oyo States in managing the pandemic has also been com-

Continues on page 13

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news you can trust I * monDAY 04 may 2020 I vol. 19, no 555 LOLADE AKINMURELE

here’s no consensus within the Nigerian government on the economic reforms the country will undertake as part of promises made to the International Monetary Fund (IMF) to revive an economy reeling from lower oil prices and the COVID-19 pandemic,

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Nigeria faces battle from within to keep reform promises made to IMF

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Inside

‘Economic impact of Covid-19 necessitates urgent collaboration between private, public sectors’ P. 29 All Aboard…! Steering Nigeria’s COVID-19 Action Train Back page

L-R: Nnamdi Okonkwo, managing director/chief executive officer; Ernest Ebi, chairman, Board of Directors, and Otunba Seini Adetu, independent non-executive director, all of Fidelity Bank plc, at the bank’s 32nd AGM held at the Civic Centre, Lagos.

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news Hurdles that will haunt implementation of Oronsaye’s report ISAAC ANYAOGU

he slump in crude oil prices and the consequent decline in government revenue have compelled the Federal Government to look at downsizing its unwieldy bureaucracy, but getting the support of lawmakers as well as the government’s lack of political will to take difficult decisions will constitute challenges. The Nigerian government said it is going to implement the report of the Presidential Committee on Restructuring and Rationalisation of Federal Government Parastatals, Commissions and Agencies, commonly called the Oronsaye Report, after the committee chairman, Stephen Orosanye, a former head of the civil service. “As part of efforts towards cutting the cost of governance, the FG has approved the immediate merger of 102 federal agencies in line with @bpsr_ng recommendations for Oronsaye report on restructuring and rationalisation of federal parastatals, commissions and agencies,” Bureau of Public Service Reforms (BPSR) said in a Twitter post. But the biggest hurdle the Federal Government

will face in executing this plan is getting the support of lawmakers to cut unnecessary agencies. “Most agencies are created by law. Therefore, you cannot legally scrap or merge them without going back to NASS (National Assembly). NASS is not interested and is busy creating new ones every day. What will you do?” said Joe Abah, country director of DAI, in a post on Twitter. There are over 25 new federal agencies and commissions the National Assembly is planning to create, even though many that had been created since the past three years are yet to take off. These include the Hydro Power Producing Areas Development Commission (HYPADEC) and the North East Development Commission (NEDC). It didn’t stop the legislators from creating the South East Development Commission. Lawmakers tack on a new agency with almost every new law they pass. This expands their functions and makes a case for increased statutory transfers, a category where the National Assembly budget falls. In 2020, N560 billion was initially budgeted for it, before it was cut to N407.8 billion.

After N2bn donation, Aliko Dangote Foundation engages 54gene lab … to conduct 1,000 COVID-19 tests per day in Kano TEMITAYO AYETOTO

he Aliko Dangote Foundation (ADF), a philanthropic endeavour of Aliko Dangote, has contracted 54Gene, a molecular diagnostics company specialised in research and diagnostics, to immediately set up a 400 test/ day capacity laboratory in Kano State. 54Gene is accredited by the Nigeria Centre for Disease Control (NCDC), and has already set up labs in Lagos and in Ogun States. The lab, which was inaugurated on Sunday in Kano, will start with a testing capacity of 400 tests a

day, increasing to 1,000 tests a day by May 10. The lab will be set up at Muhammadu Buhari Hospital in Kano, where an isolation center is currently operational. Aliko Dangote, president/chief executive of Dangote Group, said the foundation is directly supporting the Nigerian government’s COVID-19 containment efforts in Kano State. According to Dangote, this new investment in support of increasing nation-wide testing comes in addition to ADF’s support through the Private Sector Coalition Against COVID-19 (CACOVID). “CACOVID is already

setting up a 310-bed isolation centre at Sani Abacha Stadium in Kano. We are extending that capacity by another 150 beds at the Abubakar Imam Urology Centre in Kano, which is being converted into an isolation centre now. These two centres will be operational pending the final validation by the Infection Prevention and Control team, which we expect will be completed in the coming days,” Dangote said. He pledged the Foundation’s commitment to reduce the number of lives lost to diseases such as COVID-19, Ebola and other deadly viruses in the state.

He said the Foundation would not relent in using its investments in health, education, and economic empowerment to help lift people out of sickness and poverty. Speaking on the efforts of the Foundation to assist the Federal Government in curtailing the spread of COVID-19, Zouera Youssoufou, managing director/CEO of ADF, said the Foundation is also supporting the Rapid Response Teams in their work to identify suspected COVID-19 cases across the healthcare centres in Kano. “ADF will immediately hand over to the Kano RRT 10 new ambuContinues on page 4

NCDC releases new community case definitions for COVID-19 … issues new advisory on use of cloth mask Anthonia Obokoh (Lagos) & Godsgift Onyedinefu (Abuja)

ue to the ongoing community transmission of the coronavirus disease (COVID-19) in parts of the country, the Nigeria Centre for Disease Control (NCDC) has released a new case definition which explains those who needs to be tested for the virus. In the new case definition which was released on Sunday, the NCDC said a suspected case is anyone with cough and/or fever, history of fever in the last two weeks with one or more of the following symptoms: shivering/ shaking (chills), body pain, headache, sore throat, recent loss of taste or smell. Others are difficulty in breathing/shortness of breath, diarrhea/abdominal pain, runny nose/catarrh and fatigue (tiredness). It further explained that a probable case of COVID-19 is any person that presented with any of the above symptoms in the last two weeks and died without a confirmatory COVID-19 test.

Previously, those who could be tested for COVID-19 were returning travellers with fever, cough or difficulty breathing, contacts of confirmed cases with these symptoms and those with fever and respiratory symptoms in areas of moderatehigh prevalence. The case definition was updated further to include all persons with fever and respiratory infection of unknown cause. In a similar vein, the NCDC has advised that cloth facemask should only be worn by individuals who are not at a high risk for complications due to COVID-19. A cloth facemask, made out of everyday fabric, can act as a barrier to respiratory droplets but cannot completely protect the individual from COVID-19. In its new advisory, the disease control agency recommended the use of facemasks as convenient substitute to medical facemasks for the current global situation and an additional layer of physical distancing to help block the spread of respiratory droplets from person to person. www.businessday.ng

Lenders to resort to salary cut as CBN, Bankers’ Committee suspend lay-offs Hope Moses-Ashike eposit Money Banks (DMBs) may resort to cutting down the salaries of workers as the Central Bank of Nigeria (CBN) and the Bankers’ Committee on Sunday suspended plans by banks to lay off staff. A statement signed by isaac Okorafor, director, corporate communications department of CBN, said the a special meeting of the Bankers’ Committee was convened on May

2, 2020, to further review the implications of the COVID-19 pandemic on the Nigerianbanking industry. The Committee particularly deliberated on the issue of the operating costs of banks in view of the disruptions emanating from the global economic difficulties and decided that in order to help minimize and mitigate the negative impact of the COVID-19 pandemic on families and livelihoods, no bank in Nigeria shall retrench or lay-off any staff of any cadre (including full-time

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and part-time). Also to give effect to the above measure, the express approval of the Central Bank of Nigeria shall be required in the event that it becomes absolutely necessary to lay-off any such staff. “The Central Bank of Nigeria solicits the support of all in our collective effort to weather through the economic challenges occasioned by the COVID-19 pandemic,” the statement read. Reacting to the development, Ayodeji Ebo, @Businessdayng

managing director, Afrinvest Securities Limited said, “I think banks will have resort to cutting down staff salaries since they are no longer allowed to sack staff”. He said they will still be able to achieve their cost cutting strategy in view of expected lower revenue especially interest income. However, we expect to see increasing adoption of EBanking post COVID-19 which will increase banks income on E-channels Continues on page 4

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news After N2bn donation, Aliko Dangote... Continued from page 2

L-R: Emeka Nwajiuba, minister of state for education; Lawrence Ewhrudjakpo, deputy governor, Bayelsa State; Governor Douye Diri, and Timipre Sylva, minister of state for petroleum, during the courtesy visit of the Presidential Taskforce on COVID-19 to Government House, Yenagoa, ahead of the groundbreaking ceremony for the oil industry COVID-19 medical facility for the South-South region sited in the state.

Nigeria faces battle from within to keep... Continued from page 1

according to sources familiar with the matter. In a letter to intent requesting for the $3.4 financial assistance under IMF’s rapid financing instrument, the Federal Government made promises to rid the economy of fuel, foreign exchange and electricity subsidies as well as boost non-oil revenue, resolve debt sustainability challenges and improve public sector transparency. “There is still significant opposition to the economic reforms contained in the letter of intent to the IMF and while the finance minister may be supportive of the reforms, she needs pillars of support to overcome some factions who oppose her,” a source who did not want to be quoted said. “Those who oppose reform are working hard to present reformers as agents of foreign governments without the interest of Nigeria at heart,” another source familiar with the matter said. While the government seems to have already embarked on some of these reform promises made to the IMF, enough hasn’t been done to put other reforms beyond reasonable doubt. For instance, the move to end petrol subsidies has been well publicised by the government since the collapse in crude oil prices presented a long-awaited opportunity to ditch the wasteful practice. At a meeting on March 18, the Federal Executive Council agreed that it would begin moves to deregulate the downstream oil sector by adjusting petrol retail price to any development in the global oil market. It’s not the first time Nigeria has said it would ditch petrol subsidies which take more priority than education

and health in terms of government spending, only for it to reappear in another form. Analysts are, therefore, not convinced the era of subsidies would not return if oil prices turned the corner. Instead. they are calling for a legislation that legally abolishes the practice and dissolves some agencies that would be rendered irrelevant and redundant in a fully liberalised market. This way, they say, it would be impossible for petrol subsidies to reincarnate as they have done in the past. The government has revealed no plans to back up its claim to end fuel subsidies with any legislation. The government also promised the IMF that it would create specific budget lines to facilitate the tracking and reporting of emergency response expenditures and reporting funds released and expenditures incurred monthly on a transparency portal. This unprecedented level of transparency in Nigeria is supposed to ensure the funds are used for the purpose for which they were disbursed. “The government is not used to reporting itself to anyone for such scrutiny and that’s why we have avoided the IMF for so long,” a former senior government official who did not want to be quoted said. “However, this time it looks like there are some people within government willing to do things differently but they are sure to be opposed by those who don’t buy their ideas,” the person said. Regarding the promise made to force a convergence of the multiple exchange rates in Nigeria, there is some momentum building that it may happen, even though it will also face stiff resistance from within government. www.businessday.ng

The CBN already adjusted its official exchange rate to N360/$ from the N306/$ level it has been for more than three years. There’s some belief within government circles that the multiple rates are expected to converge at the more market-reflective Investors and Exporters window rate which is closer to N400/$. “However, it is not the first time that the authorities have professed a commitment to do so, only to backtrack later,” analysts at the Economist Intelligence Unit (EIU) said in a note. “For instance, when the CBN launched an interbank foreign-exchange market in 2016, it declared there would be a ‘single market structure’ with market-driven rates after devaluing the naira following an oil price crash. But the regulator soon reverted to propping up the official naira rate once prices recovered,” the EIU analysts said. The analysts predict that the CBN is likely to carry out another devaluation this year and in 2021 to align the two rates, “but it remains doubtful that it will loosen its control over the official rate entirely; there is a long-held belief within the CBN that hard currencies need to be channelled to priority sectors of the economy”. The government also promised it would not introduce measures or policies that would exacerbate the current balance-of-payments difficulties. like imposing new or intensifying existing restrictions on the making of payments and transfers for current international transactions or trade restrictions. This runs counter with current realities where there are restrictions on some categories of importers from accessing regulated foreign-exchange markets and the CBN is angling to place more restrictions

on importers of other items in order to achieve its import substitution strategy. The country’s land borders have also remained shut since last August, restricting imports and exports. Nigeria’s power reforms were also underway until the COVID-19 halted plans to adopt a market-reflective tariff starting April 1. Nigeria is getting technical assistance and financial support from the World Bank to implement far-reaching power reforms that would boost the country’s power generation capacity and cap tariff shortfalls this year to N380 billion while moving to full cost-reflective tariffs in 2021. The government’s revenue drive through raising non-oil taxes is also on-going. In February, the government raised its Value Added Tax (VAT) rate by 50 percent to 7.5 percent from 5 percent. The impact was immediate when revenue from VAT was up 30 percent to N120 billion in February 2020 from N92 billion collected in February 2019. In the letter of intent to the IMF, the government said it planned to raise its taxto-GDP ratio to 15 percent through further VAT reforms, rise in excises, and removal of tax exemptions – once the crisis passes. In 2019, Nigeria’s tax-to-GDP ratio was 7 percent, well below the frontier market average of 15 percent and South Africa’s 25 percent. In line with the Fiscal Responsibility Act, the government has also promised the IMF that it would reduce the Federal Government deficit to under 3 percent of GDP and eliminate recourse to central bank financing by 2025. The existing stock of overdrafts held at the CBN will also be securitised, the government said in its letter to the IMF.

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lances (four that are immediately available and six over the next week), two vehicles and PPEs to support the transportation of patients from different parts of the state,” she said. She said that the Foundation is also supporting the Kano State COVID-19 contact call centre that responds to citizen queries and concerns around COVID-19 and refers people to the proper place for follow-up, by providing extra phone lines and ICT infrastructure as well as training for the call centre staff. “We are supporting training and incentives for COVID-19 health workers. We will provide hazard incentives and protections for the healthcare and lab workers who are working on the COVID-19 response. We are also providing training to them, initially online and via distance learning, and will complement this with in-person training in Kano under strict IPC protocols developed in conjunction with the NCDC. “ADF will continue to provide PPEs to the Kano State COVID-19 Taskforce, which will then be distributed to the hospitals as appropriate. Items already supplied include coveralls, gloves, masks, respirators, goggles, boots and sanitisers. “We are expanding the CACOVID communications strategy in Kano by adding more communications and advocacy around COVID-19 pre-

vention across radio, TV and traditional and community leaders,” she said. C o m m e n d i ng A D F, Abdullahi Ganduje, Kano State governor, said though the state started on a shaky foundation, with assistance of ADF, it is clear that a friend in need is a friend in deed. “We are very grateful for the mobile testing centre which will launch with 400 samples per day and after a week, increase to 1,000 tests per day. It is now left for us to intensify efforts to collect samples. We will ensure that all that 44 local government councils have collection centres. Here in the metropolitan local government, we will have hundreds of collection centres because this is where the majority of the population is,” Ganduje said. The governor added that the state has intensified efforts to create awareness about the reality of coronavirus. He commended the Dangote Foundation for always occupying the forefront of helping in critical times like this. Abasi Ene-Obong, founder and CEO of 54gene, said the 40ft structure built with container technology provides a unique plugand-play solution. Ene-Obong explained that the mobile laboratory is also fully kitted with vital instruments including an autoclave, bio-safety cabinet, centrifuge, heating blocks, vortexes, pipettes, and PCR machines to support COVID-19 testing.

Lenders to resort to salary cut as CBN... Continued from page 2

while impairment charges is expected to surge. Uche Olowu, outgoing president and chairman of council, Chartered Institute of Bankers of Nigeria (CIBN), said the banks have to cope although they will encure costs. He said it’s not a new thing as the regulator had directed the banks to seek approval before laying off more than five staff. Access Bank Plc on Friday signaled plans to cut salaries to avoid job losses as a lockdown to contain the coronavirus hampers the operations of Nigeria’s biggest lender, according to people with direct knowledge of the matter. The reductions are expected to start from May unless business conditions improve, said the people, who were briefed on the matter during a conference @Businessdayng

call and asked not to be identified because they’re not authorized to speak publicly. Some management will get as much as a 40% decrease, they said. Nigerian banks are facing the threat of rising baddebt levels as a crash in oil prices and the risk of a naira devaluation coincide with the Covid-19 pandemic that has shuttered businesses. Access Bank, which acquired rival Diamond Bank Plc last year, had 6,898 permanent staff at the end of 2019, according to a presentation on its website. The acquisition partly contributed to a 31% increase in operating expenses. Personnel, recruitment and training costs account for more than a third of overheads after the deal boosted employee numbers and resulted in “wage harmonization” across the businesses.

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news

Oil price promises more volatility this month Olusola BELLO

fter April’s unprecedented negative futures contract pricing, there is every chance of more volatility this month of May, because of global crude oil storage facilities that are filled to the brim, thereby making it difficult for oil producers to sell their commodity. At the same time the coronavirus effect is still very much around and the full impact may be felt this month. The oil price captured the public imagination considerably more than usual in April, when the expiring front-month WTI futures contract plunged to not far shy of $40/bl into negative territory. The first three months of 2020 have shocked the global energy market to its foundations. The toxic mix of coronavirus, a global economic recession, and an unexpected OPEC+ price spat have hit every aspect of the energy

industry. The ongoing global oil and gas glut, which will become even more prominent when oil storage space hits zero, is a major threat to IOCs, independents, and minnows. Former Energy Secretary Rick Perry says he believes that the oil industry could collapse because of the dramatic decrease in demand worldwide caused by the coronavirus outbreak and a steep decline in prices. The crash in crude oil prices means volume is especially important for oil-dependent Nigeria, and as there will be no OPEC output limits to adhere to this month after, the country can pump at will. The current drop in oil prices is hitting the country hard, making a big dent in government revenues and threatening the viability of upstream projects. Unfortunately, the country has to also cut certain percentage of it production just as other producers have done to reduce the volume of crude in the market. Nigeria opened a new

front in the oil price war between some of the world’s largest OPEC+ countries, offering to sell its crude in April at unusually large discounts in an effort to undercut its rivals. Even so, traders said the West African country may not have gone cheap enough. Nigeria now the poverty capital of the world has no fiscal buffers after years of giving the people nearly free fuel and electricity and forex and now Africa’s most populous nation faces a double whammy of a wild spread of Coronavirus and inability it fund its 2020 budget. Exports of Qua Iboe and Bonny Light crude — two banner Nigerian grades — will be sold in April for discounts of more than $3 a barrel to the international Dated Brent benchmark. Even in the depths of the 2008-09 recession, neither grade was sold anywhere near as cheap, but a collapse in demand caused by the coronavirus — and a pricing war led by Saudi Arabia — has changed everything.

Rivers to review permit to oil companies as positive case emerges in oil workers …threatens to ban taxi operations in the state for failing to obey distancing Ignatius Chukwu

overnor Nyesom Wike of Rivers State may withdraw the permit granted oil workers to enter the state, saying it was being abused. In a televised press briefing Friday morning, May 1, 2020, the governor said an oil worker testing positive to coronavirus had proved he was right in being strict over requests for them to enter the state. Governor Wike, who appealed to the oil industry not to see his stance as being against the industry, said life must come before oil exploration, saying the state government would withdraw the permit except there was guarantee that any oil worker returning to Rivers State would face screening. He said some testing equipment had entered the state and that over 200 personnel had been trained in use of equipment and other personal protection equip-

ment (PPE) so as the make their tasks easier. He threatened to ban taxi operations in the state since they had failed to obey order to create gaps in the taxis by carrying only one person in front and two at the back, and five in buses. He said the state Security Council would meet and hear from him in the next 24 hours. Enough buses have been procured to take over transportation in the state should taxis be banned, he said, and also gave what he called final warning to the popular Oil Mill Market in Port Harcourt, saying he may ban it till he left office. The governor equally threatened to order curfew in Rumuokor, Rumukwurushi and some other towns where he said night markets had emerged, and announced 188 convictions of violators of shutdown order with 45 of them being organisers of night markets. He thanked various groups that had helped the state since

the fight against the coronavirus, saying there was a 250-bed isolation and treatment centre in Rivers State with the help of the private sector. He however said any group wishing to donate foodstuff should contact the state government to know which ones were available for sale by local food producers, saying the state would not accept food from outside when it could be sourced from local farmers and fishermen. The governor however berated the Federal Government again for not giving support to the state, saying when Kano cried out, the Federal Government responded, but when Rivers did, they got bashing. He defended his reason for rejecting 1800 bags of rice from the Federal Government, saying Rivers was not the only state to reject them because they were bad, and that it was wrong to ask Rivers to go to Calabar to carry it.

Coronavirus: Edo opens 40-bed isolation facility at UBTH Monday ... as governor inspects 8-bed treatment centre, molecular biology laboratory, others

do State governor, Godwin Obaseki, has assured that the 40-bed isolation facility being constructedattheUniversityofBenin Teaching Hospital (UBTH) will be ready on Monday, May 4, 2020, and openedtoreceiveconfirmedcasesof coronavirus (COVID-19) in the state. Governor Obaseki gave the assurancewhenheledhisChiefofStaff, Osaze Ethan Uzamere and other top government functionaries on a guided tour of facilities at UBTH by the Chief Medical Director (CMD), Darlington Obaseki. Obaseki expressed satisfaction on the partnership between his administration and UBTH, which resulted in the refurbishment of the hospital’s 8-bed isolation facility and molecular biology Diagnostic Laboratory (PCR Suite) to fight against the

COVID-19 pandemic. The governor said the state was fortunate to have three Federal Governmentmedicalinstitutions,adding that they have all been instrumental incurtailingthespreadofcoronavirus in the state. “We have visited the isolation ward refurbished for COVID-19. This is a small isolation ward with eight bed space. Another 40-bed isolation ward is being reconfigured andwillbereadyonMonday.Weare fortunate that they have acquired a PCRmachineandsetupamolecular biology laboratory, which we have come to inspect. “As part of our partnership, we have closely worked with UBTH in terms of mobilising resources; we have contributed to support their efforts in making sure they are able www.businessday.ng

to establish this laboratory.” Thegovernorsaidthelaboratory is ready for certification, noting that experts from Irrua Specialist Teaching Hospital (ISTH) are on ground to certify the work done. “The laboratory is ready to receive samples and hopefully from next week, samples will be brought here as the facilities on ground can do a lot of tests.” The CMD of UBTH and a memberofEdoStateCOVID-19Response Team, Darlington Obaseki, commended the leadership style of the governor in the fight against the deadly virus. “I want to thank the governor for his leadership style as he has spearheadedseveralmeetingsstrategising measures to combat the COVID-19 pandemic in the state.” https://www.facebook.com/businessdayng

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COVID-19: Diri, Sylva lay foundation for 200-bed hospital in Bayelsa Samuel Ese, Yenagoa

L-R: Abiodun Ayodeji, marketing manager, Promasidor Nigeria Limited; Abisola Olusanya, special adviser to the Lagos State governor on agriculture; Andrew Enahoro, director, external relations, Promasidor Nigeria Limited, and Olayiwola Onasanya, Lagos State permanent secretary on agriculture, during the Promasidor Nigeria Limited outreach project initiative on the fight against COVID-19 in Lagos. Pic by Pius Okeosisi

Malaria kills more Nigerians in a year than COVID-19 has in the world - Soludo

… recommends implementation of health, economic solutions to fight Covid-19 ENDURANCE OKAFOR

o boost the immune system of Nigerians to a capacity that will enable them stand a chance to fight and survive the novel coronavirus, their livelihood need not be disrupted, Charles Chukwuma Soludo, member of Economic Advisory Council and a former CBN governor, said. According to the economist, Nigeria needs to simultaneously deal with both its economic and health challenges as they have come under pressure as a result of the virus outbreak. During an interview session with Channels TV at the weekend, Soludo explained that if the livelihood of a Nigerian was not disrupted it would mean that such a person would be able to feed, which will also mean

that his immune system will be guaranteed to some extent, to have a fighting chance against COVID-19. “So, my point is, it is not an either-or, we have to understand that guaranteeing our people’s livelihood is the most important component of the health protocol. If you disrupt their livelihood millions are going to either starve to death or get their immune system compromised and then die through other diseases as the case may be, so you need to have a balance,” Soludo said. According to Soludo, there is a link between nutrition and the immune system, and between the immune system adding that the capacity of individuals to survive viral infection depends on their immune system. “The data is out; that more than 80 percent of those infected do not need hospitalization,

they have mild symptoms, why, because of their immune system, it has also to do with demographics, it has also to do with those with pre-existing conditions,” he said. Nigeria recorded the highest daily rate of infections on Thursday as confirmed coronavirus cases increased by 204, taking the country’s total to 1932. The Nigeria Centre for Disease Control (NCDC) confirmed that Kano State overtook Lagos in new cases of the virus attack. Africa is being projected as the next of the world in regards to the virus outbreak. When asked of the danger that awaits Africa as the continent has been projected to become the epicentre of the world, Soludo said regrettable, it would be adding that Africa is already the epicentre of diseases and death. “The question is not whether

N11bn to police: Rivers to sue FG for not getting consent of states Ignatius Chukwu

ivers State government says it has instructed its lawyers to sue the Federal Government for taking N11 billion out of the Federal Account for the Police without the consent of the states. Governor Nyesom Wike, who announced the plan weekend in Government House during a live press briefing on COVID-19, said it was wrong to take any money out with the consent of the states. The governor, who said posterity would not forgive him if he failed to raise alarm, said he had intimated the chairman of the Nigeria Governors’ Forum (NGF), the governor of Ekiti State, Kayode Fayemi, on what he was about to do. Wike said he was prepared for whatever the outcome would be in court, saying it was better to die fighting than to die saying

nothing in the face of wrong actions. He said state governors knew that something was going wrong but have preferred to answer good boys by keeping mum, saying, “They want to have a pat on the back from Abuja. I would rather God patted me on the back for doing right”. The governor also revealed why the commissioner of police was removed and heads of other security agencies were transferred out of Rivers State, saying it was simply because they helped to arrest violators of the lockdown order. It may not be unconnected with the swift arrest and prosecution of the two Carveton pilots and 10 passengers, plus the arrest of 22 ExxonMobil workers. He said the new commissioner of police who paid him a visit had observed that the Nigerian police always excel on missions outside the country www.businessday.ng

but get condemned at home, promising to replicate such commendable performance in Rivers State. He said he however told the new CP that such would not succeed in Nigeria because outside, the Nigerian police were usually allowed to operate professionally but at home, they would wait for order from above. The governor said piloting the affairs of the state at this period was difficult because of sabotage, saying the children of a woman who died of coronavirus threatened to sue the Rivers State government for saying so. He however noted that the doctor that treated her and two of her children had tested positive. The governor said there was no going back in the lockdown measures in the state despite easing at federal level and gradual opening of businesses, and announced compulsory use of nose mask in public from now.

you are going to be epicentre or otherwise. The question is how do you respond to it, at least one response pattern is shown to constitute mass suicide; the question is how do we minimize the effect of that. You can’t lock the people down without feeding them,” he said. According to Soludo, that will compromise their immune system and would mean that death is certain with already millions unemployedandhundredsofmillions are living in extreme poverty. “Malaria kills in a year more people than COVID-19 has killed in the entire world put together. The point is for us not to have a very narrow view just focusing on COVID-19, I am saying you need to look at the entire health, saving lives comprehensively in Africa, because there are already hundreds of millions at risk even without COVID-19,” he said.

ayelsa State governor, Douye Diri, on Saturday, commended the Federal Government and the drive by the Nigeria Agip Oil Company (NAOC) and its joint venture partners to combat COVID-19 through the consolidation and improvement of medical facilities. Governor Diri gave the commendation at the ground-breaking ceremony of a 200-bed medical facility initiated by the NAOC and sited in Bayelsa to cover the South-South region. According to Governor Diri, the event is not only significant but also restates and demonstrates the necessary co-operation and social responsibility that must exist for the oil and gas industry as well as other businesses across the country. In a press release by his acting chief press secretary, Daniel Alabrah, the governor described the COVID-19 pandemic as the defining global health predicament of our time and the greatest challenge faced in several generations. His words: “Countries are under lockdown. Travel is severely restricted. Traditional havens are compromised. If this episode has taught us any fundamental lesson, it is that those of us in positions should effect positive change deliberately and urgently. “On our part, the Bayelsa State government took proactive actions to strengthen surveillance at our boundaries with neighbouring states to prevent the spread of COVID-19 into our state. With the diligence of the state taskforce on Covid-19, which I chair, and the cooperation of the citizens, we were largely successful in this quest. “However, we are now dealing with a new reality, with the confirmation of an index case and four members of her family. So, the timing of this event when the dynamics have altered is most welcome. “COVID-19 is much more than a health crisis. By putting countries it touches under duress, it has the potential to make devastating social, economic

and political crises that will leave serious distortions in the fabric of society. By providing assistance to keep the virus in check is therefore commendable. “On behalf of the people and governments of the South-South states, I express my sincerest gratitude to the Minister of Petroleum, Chief Timipre Sylva, and the Group Managing Director of the Nigerian National Petroleum Corporation, Mallam Mele Kyari as well as the Executive Secretary of the Nigeria Content Development and Monitoring Board, Engr. Simbi Wabote, for your obligation, insight and service to our zone and country.” Sylva, in his remarks, said the Nigerian oil and gas industry had embarked on an industry-wide collaborative and prevention initiative to combat the pandemic under the leadership of the NNPC. According to Sylva, the three key areas in alignment with the ongoing Federal Government efforts to cut the pandemic through the presidential task force include the provision of medical consumables, deployment of logistics and in-patient support system and the delivery of medical infrastructure, which amounted to $68 million (about N28bn). “In recognition of the leveraging impact of COVID-19 pandemic on the critical sectors of our national economy, the Nigerian oil and gas industry, under the leadership of NNPC, embarked on industry wide collaborative and prevention initiative to combat the pandemic. “This action is taken to support the national healthcare delivery facility and strengthen our collective national resolve in combating this pandemic,” Sylva said. On his part, the NAOC vice chairman/managing director, Lorenzo Fiorillo, who was represented by the community relations manager, MacWen Jitubo, stated that the ground-breaking ceremony of the COVID-19 medical infrastructure was part of the intervention project sponsored by the company in the SouthSouth, adding that the project was necessitated by the outbreak of the pandemic.

Creative industry worst hit by Covid-19 - information minister ... FG apologises to students in Russia over delay in scholarship James Kwen, Abuja

inister of information and culture, Lai Mohammed, has lamented that the creative industry, comprising music, concerts, theatres, travels, among others, is worst hit by the Covid-19 pandemic. Mohammed, who stated this Wednesday in Abuja while fielding questions from journalists at the daily briefing of the Presidential Taskforce on Covid-19, also said the creative industry was second only to agriculture in the area of job creation in the country. He explained that the creative industry, which is the fastest growing sector of the Nigerian economy, was severely affected in the Covid-19 era because it attracted a lot of people together, against the protocols on the dreaded disease. “It is true that the creative industry is probably the most hit by the Covid-19 and this is the industry which creates so many jobs. It has always been the fastest growing sector of the economy.

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“As the matter of fact apart, from agriculture, it employs the highest number of people and regrettably with the Covid-19, the industry has been badly hit. “Before the pandemic we were in the process of organizing the third Annual Creative sector week. It is a platform whereby every stakeholder in the industry will come together and plan ahead for the expansion of the industry. Unfortunately, with the Covid-19, this is no longer possible. “What we are doing now is that we are trying to set up a Committee to communicate stakeholders in the industry to come out with other measures that will keep the industry going. “Fortunately for us, even before this pandemic, the Federal Government has put in place certain palliatives that will speed up the industry - the Central Bank Creative Industry initiative which allows people in the industry to apply for a loan between N5 million and N500 million,” the minister said. @Businessdayng

He assured that members of the planned Committee would soon be announced and mandated to liaise with the Central Bank and other agencies to work out the modalities on how persons in the creative industry could come out of present economic crisis. He also disclosed that the United Nations and other international organisations had been holding virtual meetings in a couple of weeks with the ministers of culture across the globe to find solutions to the global challenges facing the creative industry. The Federal Government is using this period to speed up the implementation of digital switch over which can greatly support the creative and other industries to create more jobs in the post Covid-19, Mohammed further said. Also speaking, the minister of state for education, Ben Nwajiuba, apologised to Nigerian students in Russia who had not received their scholarship, and assured them that they would be paid this week.

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Giving and misgivings: Sexual misconduct (Tenth in the series of an address delivered at the Rotary Foundation dinner/dance at the MUSON Centre, Marina, Lagos on 8th February 2020)

Bashorun J.K Randle

he police appear to have joined the orgy going by the front page of “The Punch” newspaper of January 14, 2020: Headline: “Delta DPO accused of stripping 28-year-old woman” A 28-year old woman, Mercy Okoro, on Monday accused the Divisional Police Officer of Ekpan in the Uvwie Local Government Area of Delta State, SP Asanayin Ibok, of stripping her naked and arresting her widowed mother, Lucy Okoro, and her sister over a disagreement with their tenant. Narrating her ordeal to journalists in Warri, Mercy alleged that the incident occurred around 3pm on Friday, January 10, 2020, when the tenant, Andrew Obas, who had refused to pay his three months’ rent, invited the police to their home. According to Mercy, the tenant had been given four months’ notice to either pay the arrears of the rent or quit his apartment, a notice that elapsed this month. She stated, “We asked him to pack out. Instead, he brought armed policemen. They shot indiscriminately, dragged my sister on the floor and kicked her. I told the policemen to leave my sister alone. The DPO stripped me naked. He took my wrapper and kicked me on my buttocks. “The police bundled my sister and I into their patrol van and took us to the station. It was when we got there that I knew that it was the DPO, who attacked me.” Mercy also alleged that the DPO slapped her at the station till she fell to

the ground and fainted, adding that a policewoman behind the counter also sprayed teargas into her eyes. The victim, who lamented that she was dehumanised by the police, urged the government and human rights organisations in the country to take the matter up with the DPO in the interest of justice, fairness and equity. Mercy’s mother, who was arrested alongside her daughters, urged the government to help them get justice. Lucy, who corroborated the claims of her daughter, urged the government to put an end to her harassment by the tenant. After owing me three months’ rent, Obas said he would not pay and boasted that he would make trouble with me. That’s why I said he should leave my house with the accumulated rent. I went to court and obtained a month’s notice to quit and served him. After that, I went back to the court, obtained a seven-day notice, which I also served him and which elapsed on Friday, January 10, 2020,” she stated. Reacting, the DPO, Asanenyi, denied the allegations levelled against him, saying, “What they said is not true.” He stated that he was not around when the incident happened let alone stripping the young woman naked. Asanenyi said the decision of the widow and her daughters to lock the gate against their tenant could cause problems. When contacted on the incident, the state Commissioner of Police, Hafiz Inuwa, said a journalist had earlier called him on the matter and he made enquiries and discovered that the allegations were blatant lies. “It was not even the DPO, because when it happened, the DPO was not even there. We did not record anything like this,” he added. Meanwhile, the National Chairman of the Human Rights Defenders Organisation, Casely Omon-Irabor,

said the body got a distressed call that a widow was being manhandled over a disagreement with her tenant. Omon-Irabor stated, “We sent two of our lawyers to go and find out and we discovered that the police stripped the first daughter of the widow. Our lawyers intervened, but the police didn’t listen to them,” she stated. Omon-Irabor stated that Mercy was beaten and marched on until she fainted. “Other policemen were begging the DPO to leave the woman alone, but he refused until I told him that I took photographs of the incident and had him on video assaulting the young woman. It was then he said we should settle. “I called the DPO, who said because I was involved, he was going to set the widow free. He still detained the two girls.” Another dimension was provided by the front page of “The Nation” newspaper of January 14, 2020, Headline: “Head teacher admits sexual relationships with twin pupils” “The head teacher of a secondary school in Lagos, Samson Adeyemo, has admitted before an Ikeja Special Offences Court that he had sexual relationships with two 17-year-old twin pupils of his school. Adeyemo, 41, who lives at 8, Odesanya Street, Abule Egba, near Lagos, is the head teacher of Legati College, Abule Egba. He is facing a two-count charge of defilement of a child. The News Agency of Nigeria (NAN) reports that while being cross-examined yesterday by State Prosecutor, M. I. Oshodi, the defendant, who has a National Certificate in Education (NCE), admitted to defiling the underage pupils (Twin A and Twin B). “I had a relationship with Twin A and Twin B. I’m married to Twin A. The marriage was not conducted in the church or registry. I had her consent and her parents were aware.

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A 28-year old woman, Mercy Okoro, on Monday accused the Divisional Police Officer of Ekpan in the Uvwie Local Government Area of Delta State, SP Asanayin Ibok, of stripping her naked and arresting her widowed mother, Lucy Okoro, and her sister over a disagreement with their tenant

“Marriage is done between a male and a female and it is for life. What is between me and Twin A is marriage and the one people do in the church or registry is wedding. “The relationship with Twin A started in 2016 and I had sexual intercourse with her in 2017. I did not start the relationship with Twin B until I met their mother and also had sexual intercourse with Twin B after I met her mother.” Adeyemo admitted that the school he operated had not been fully registered with the Lagos State Ministry of Education. He, however, denied having sexual relationships with other pupils in the school. While giving his evidence-in-chief, the defendant had admitted impregnating Twin A while she was under his care. Led in evidence by the defence counsel, R. O. Akande, Adeyemo said that Twin B had become jealous when she discovered that her twin was in a relationship with him. “Twin B came to me that why was it her sister that I was dating. I told her that it was Twin A that I wished to date. She said she was having other relationships, but she wanted me because I am her twin’s boyfriend. “In 2017, Twin A got pregnant and I decided to cater for her, but Twin A’s parents refused (insisting) that the pregnancy would be aborted. I refused because I wanted the baby and I wanted to marry her as well. “I gave her some upkeep money and her parents collected the money from her and terminated the pregnancy,” he said. The head teacher said the father of the twins asked him to pay N200, 000 or be punished. Justice Sherifat Solebo adjourned the case till February 24 for adoption of final written addresses. Randle is Chairman/Chief Executive JK Randle Professional Services Chartered Accountants

The pursuit of superior performance in the age of chaos

our competitive advantage depends on your positioning with the industry. This advantage is the only reason why superior performance is possible. Without a competitive advantage you can have only what other players in the industry let you have and you can guess that won’t be a great way to compete. This is easy to understand because the opposite of competitive advantage is competitive disadvantage. There is no middle ground. Managers clearly understand the need for competitive advantage especially after seeing what happened to several during the 2008 economic crisis which shook businesses globally and now the coronavirus pandemic that has hit nations badly. Every manager understands that it takes more than a great corporate goal to win. What many managers don’t clearly understand is how to go about establishing this advantage. Superior performance depends on the management ability to adopt a unique approach to competition. As clear as that is however, it can also be hugely misunderstood. Uniqueness in strategic terms is more than one action. You can have a unique branding and not be unique in the sense of strategy. You can have a unique product and still lack uniqueness. To understand uniqueness in the sense that I mean, you need to first understand that every business or company is a conglomeration of carefully selected activities which are linked one to another. The uniqueness of a company in the sense of strategy comes from the summation of the

unique activities that make up the entire chain, which Michael Porter called, value chain. Uniqueness comes by not doing activities different from how others do that, but by linking those activities in a way that is peculiar to your company that it produces a unique fit or configuration that is original to your company. It is this unique chain of activities that gives a company its strategic position. Now, triumphing in moments of chaos is a matter of positioning. Positioning enables you to control the actions of others to your own advantage. There is a reason why it’s so important to think about these activities in terms of value. This is because being successful is not just about being busy, it is being about the right things. Activities that don’t add up to the intended value is meaningless and a waste of effort. This means that companies incur losses or make profit at the activity level. Strategic gains are made at activity level not when the products are sold. To put this clearer, the gains or losses don’t really have much to do with spending less at each activity level. It rather is about spending the right amount. It is about not compromising the strategic promise made to the end user. That begs the question, what is the right amount? The right amount is the required input arrived at the most efficient way. It’s very important to commit only the required effort, knowledge, finances and other assets and no more or less into each value activity. One way to approach this is to understand that every activity exists in a micro industry with www.businessday.ng

suppliers and buyers as well as substitutes. There is also a micro value chain within each value activity in the company. Lack of clarity about this causes managers to make lousy decisions. Training managers and supervisors to recognise the micro chain, understand the power of their suppliers and buyers within the company as well as their own power is the way to go in the pursuit of strategic uniqueness. Consider operations in a financial institution, say a bank. Now, the operations department in a bank is a back-end team responsible for executing and settling transactions initiated by the front-end teams. So, the operations value activity depends on the supply from the client-facing roles including marketing and customer care but as well as IT, security, procurement, human resource management and firm infrastructure. Frictions arise many times when a unit, say, IT fails to meet the expectations of the operations unit for any reason. Yet if strategic uniqueness must be maintained, operations must ensure the adequate investment is made. Imagine when the Human Resource team rejects the proposal of the sales team, or one of its suppliers to sponsor a training for the team because there is a recession and the company cannot afford to train. Sooner or later the team will lose motivation and unable to effectively supply the finance unit which depends on them. The end result is failure. Yet this type of scenario plays out each day. Solving this problem requires that each value activity unit must think in terms of the activities that depend on them just like the marketing value

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Brian Reuben activity must think in terms of the client. They must realise that their real value is their ability to satisfy those they serve in the most efficient way. It’s therefore more appropriate for the inbound logistics value activity unit to focus on the operations and other units that buy from them with the company than the final clients. On the other side, each value activity unit must design a competitive strategy since resources are limited. If every activity unit has a competitive advantage, it will eventually get to the shareholders and investors. Marketing needs a competitive advantage to get the required investment and support from their suppliers including HR and IT. It’s not going to happen just because they are part of the organisation. Same goes to other activity units in the organisation including the C-Suite if they intend to have the required efforts and investment from the shareholders. Dr Reuben is one of the most sought after thought leaders on the subject of Strategy in Nigeria. He speaks at business events globally.

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Polaris Bank: Positioned for growth

Patrick Atuanya

olaris Bank recently released Full Year 2019 results showing that the bank has successfully transitioned from the hitherto troubled institution known as Skye to a Bank set to consolidate its growth levers. The annual financial statements of the bank ending for the December 31, 2019 period, show gross earnings of over N150 billion, Profit before Tax of N27.83billion and Profit after Tax of N27.35billion showing very strong profitability and profit potential going forward. The bank’s deposits from customers was N857.8billion with Total Assets in excess of N1.14Trillion confirming that Polaris Bank remains a systemically important bank within the Nigerian financial system. Net interest income surged over 800 percent to N87.7 billion, while net fee and commission income came in at N8.5 billion up 300 percent from N2.15 billion in 2018. Apart from strong capital adequacy, the bank’s other ratios are equally impressive with Return on Assets (ROA) at 2 percent, Return on Equity (ROE) 33 percent, and Liquidity Ratio at 81 percent. These ratios demonstrate op-

erating efficiency, strong inherent capacity for profitability and returns to stakeholders, very comfortable liquidity and asset efficiency. The bank’s Cost to Income ratio of 59 percent came in line with industry averages. Polaris has been able to position itself as the bank for digitally savvy Nigerians and customers. In 2019, Polaris Bank pursued strategic initiatives for future growth which have continued this year including digital transformation and launch of the bank’s agency banking platform, Sure Padi. Commencing in September 2018 immediately after the transition to Polaris Bank, the management worked with KPMG, EY, Deloitte and other first class advisory and consultancy firms to develop a strategy and corporate transformation plan and defined aspirational and inspirational new vision statement, namely being “The preferred partner providing superior financial solutions for customers” and mission statement, “We will leverage our knowledge of an everchanging world to constantly design innovative solutions that facilitate our customers’ enterprise” as well as values-Boldness, Sustainability, Innovative, Continuous Learning and Trustworthy. The bank also adopted a predominantly retail market focus in line with its core strengths and competences and defined new customer value propositions:-Ease, Friendliness and Accessibility: focused on convenience, customer excellence and customer delight; Creating opportunities and providing empowerment for selected sectors: Youths, SMEs, Women and the Underserved; Digital First: providing easy and simple banking through digital and being future focused.

The objectives of the Corporate Transformation Plan included sustainability; profitability and capital preservation; regulatory compliance and buy-in; realizing value from investments; aligning business and operating models to strategic aspirations; and execution-achieving quick-wins, and phased implementation. The critical pillars of transformation as designed are Digital Transformation, Enhancement of IT Infrastructure and Technology Platforms, Cost Optimisation and Operational Efficiency, Workforce and Culture Alignment, Brand Equity Enhancement and Business/ Strategic Initiatives. One of the problems that plagued the now defunct Skye Bank is the issue of non-performing loans or NPLs. On July 4 2016 the Central Bank of Nigeria (CBN) constituted a new board and management for Skye Bank Plc to address its declining prudential ratios and return the bank to sustainable profitability with a mandate to reduce cost to income ratio, improve asset quality, improve liquidity and capital adequacy and restore profitability. The new team, led by Muhammad K. Ahmed and Adetokunbo M. Abiru as Chairman and Managing Director/CEO respectively worked on cleaning up loan and collateral documentation on most of the high value facilities, thus putting the bank in a stronger position to enforce its rights as a lender. As a result of these and other measures, as well as aggressive loan recovery drive, the bank recovered over N60billion of outstanding bad loans in its first year in office and these recoveries were ramped up to

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Net interest income surged over 800 percent to N87.7 billion, while net fee and commission income came in at N8.5 billion up 300 percent from N2.15 billion in 2018

Atuanya is the editor of BusinessDay. Email: patrick.atuanya@businessday.ng Twitter: @patrick_atuanya

Now that we have joined the IMF bandwagon

inally, Nigeria is going to the International Monetary Fund (IMF). To be fair this is not the first time we are going to the IMF as have had three standby arrangements before. But this is the first time we are actually going to take the money. Is it a loan? Technically it’s a credit facility backed by our Special Drawing Rights (SDR) quota with very low interest and service charges which we are expected to repay with the principal within three to five years. If it looks like a duck and quacks like a duck then a duck it is. Still, it is not a full-fledged package so it does not come with the standard conditionalities that come with those. Although typically, countries that tap the emergency facility end up having to go back for the regular package. Will we have to go back for that? The revolutionaries fighting against the neo-liberal capitalist western imperialist agents might need to raise the white flag. The way things are going we may have no choice but to go back for the full program. Still, is the program really that bad? Much of the angst towards the IMF, not just from Nigeria but from many other countries, comes from our experience

with the Structural Adjustment Programs (SAP) in the 80s. Many still tell tales of how SAP “destroyed” the economy and so on, mostly without saying what exactly SAP was. Also, while forgetting that for the seven or so years before SAP we had stumbled from unconventional to heterodox economic policies that put the country in a mess probably only second to the one, we find ourselves in now. So, what was in SAP? First there was the exchange rate liberalisation, allowing market forces determine the exchange and the scrapping of the arbitrary rules which previously determined who could buy or sell FX. In practice this involved abandoning the already imaginary official exchange rate of N1.75 per dollar to about N4.5 where the black market already was. Sound familiar? Second there was the trade liberalisation. No this was not about forcing free trade on anyone but removing some of the licensing and restrictions on imports and exports. Before SAP you needed a license from government to actually import or export anything. Imagine that. The price and distribution controls on agricultural exports were also scrapped and the list of banned items was reduced. Before SAP a www.businessday.ng

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government department determined the prices of almost every export crop from cocoa to groundnuts. There were a lot of other reforms as part of the SAP most of which count as standard sensible economic policy today. This is not to say that SAP was an all-around great program. The spending cuts to education and health in the name of austerity ended up being very damaging and rather unwise. Also, Nigeria’s SAP technically was not an IMF program. But only technically. Also, we only implemented the program for a year or so before backsliding. So, now that we are back in the land of economic difficulties, should we be so afraid of going to the IMF for a full program because of the conditionalities? Are these conditionalities so bad? The IMF has also learned from years of implementing programs just like everyone else has. Most of the conditionalities are things that most economists would count as sensible economic policy. Flexible exchange regimes, debt sustainability, clean banking systems, conventional and transparent monetary policy and so. Even Ghana, went into a full program just over a decade and they are doing relatively okay. This is not to say

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over N100 billion by the end of the second year. The management also reached settlement and restructuring agreements with many of the chronic bad debtors resulting in substantially improved payments and prospects of future recoveries. The bank fully divested from several local and international subsidiaries releasing total cash value of over N19 billion. Polaris Bank results clearly show an institution positioned for growth amid trying times in the Nigerian macro-economic space and financial services industry. By making a clear choice to be a retail bank Polaris has chosen its core to be around capabilities around technology. These convictions underpinned management’s focus on digital transformation and on refreshing and upgrading Polaris Bank’s IT infrastructure. In 2019, management had overseen significant investment in the bank’s critical IT infrastructure including data centres, digital labs and human capital. By these moves the bank management has successfully arrested issue of customer attrition and managed the situation and significantly stemmed the tide and reduced deposit loss, restoring customer confidence and stabilizing the institution. The management has thus entrenched sound corporate governance and risk management practices, ensuring enduring profitable operations while positioning the bank optimally for investors.

NONSO OBIKILI

that the IMF is always right. We are still learning a lot about how economies function so local context and country input is now a fundamental part of most programs. As a country it is time to find a way out of our 1980s SAP PTSD. We are in a significant economic mess and the IMF, both with this emergency loan and maybe with a future full program, offers us a possible path out of it. We should not shoot ourselves in the foot by hanging on to the myth that SAP was some type of grenade that destroyed our economy. We owe ourselves better than that. Dr. Obikili is the chief economist at BusinessDay

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Buhari’s COVID-19 exit strategy must focus on saving jobs and livelihoods global Perspectives

OLU FASAN

ost countries responded to the coronavirus pandemic by prioritising public health over economic health. They introduced widespread lockdown and social-distancing measures. Scientific and medical experts say that only such measures could save lives until a COVID-19 vaccine is developed. Most economists argue, rightly, that there is no trade-off between health and wealth. So, as Martin Wolf, the Financial Times’ chief economics commentator, put it, “maintaining the lockdown and saving the economy are mutually compatible”. But everyone also agrees that the economic costs of the lockdowns are horrendous. For a start, the fiscal stimulus packages are eye-popping. For example, the US launched a $2.2 trillion intervention package to support businesses and workers. Britain’s was about £400 billion, including one-off cash grants and loan guarantees for small businesses, and a job retention scheme under which 80 percent of the incomes of workers and the self-employed, who are forced to stay at home, is paid by the government, up to £2,500 every month. Yet, despite these stimulus packages, the economic situation and its impact on jobs and livelihoods are extremely disturbing. Various businesses, particularly in the hospitality, leisure, retail and airline sectors, are failing, with massive job losses in tow. Recently, the International Labour Organisation, ILO, warned that the pandemic would destroy the equivalent of 195 million jobs globally. The lockdown measures are killing businesses and destroying jobs. President Trump famously said that “We can’t have the cure be worse than the problem”. Many governments think

so too. As a result, Western countries have begun to announce their exit strategies, setting out how they would begin to the ease the lockdowns. Nigeria has followed the above international template in its COVID-19 response. First, it imposed lockdown and social-distancing measures, although without any significant level of testing and contact-tracing; second, it introduced fiscal intervention measures, including the so-called social palliatives; and, third, it has now announced its own exit strategy, with “a phased and gradual easing of the lockdown.” Yet, while Nigeria has seemingly mimicked the West’s response, it has not done so with sound science and evidence or with the consideration of impacts, particularly on its economy and the wellbeing of its people. Take the lockdown first. President Buhari said that “initial models predicted that Nigeria would record an estimated 2000 confirmed cases in the first month after the index case”. This raises the question: why should Nigeria shut down its economic hubs for several weeks because of a projection of 2000 cases, not deaths? The UK, the US, German and France strongly hesitated to impose lockdowns until Professor Neil Fergusson of Imperial College London published a modelling which showed that COVID-19 could lead to 250,000 deaths in the UK and up to 1.2m in the US, if not suppressed. If the 2000 cases were an accurate estimate, what it suggests is that COVID-19’s Reproduction value, “Ro”, was below 1 in Nigeria. Epidemiologists say that if the Ro is below 1, it means that every infected person passes the disease to less than one person, meaning the virus is containable. Surely, if the projections of 2000 cases were accurate, what the government needed to do was to undertake mass testing and contact-tracing so as to isolate and treat the 2000 and the few people that may have infected. It makes no sense to shut down the economy and further pauperise already impoverished Nigerians because of a projection of 2000 COVID-19 cases – not deaths – in a country of 200 million people. A recent study shows that South Africa’s coronavirus lockdown was costing the country’s economy $716 million a day,

with 1.7 million South Africans estimated to lose their jobs. Yet, South Africa has had 5,647 confirmed COVID-19 cases and 103 deaths. Many South Africans are asking whether the high number of failed businesses and job losses was a price worth paying for the few number of fatalities from COVID-19. There is no conclusive evidence that the draconian lockdown was responsible for the low number of fatalities. The same question should be asked in Nigeria. President Buhari said last week that “many of our citizens have lost their means of livelihood; many businesses have shut down.” Of course, there are no figures on the number of failed businesses and job losses in Nigeria, but they are likely to be very significant. Yet, even with the 1,932 confirmed cases and about 60 deaths, as at last week, the question is: wasn’t the lockdown a bigger disaster than the virus? Boko Haram and herdsmen have killed several thousands of Nigerians, yet the government’s response to the coronavirus has caused more economic and social calamities than its response to the insurgency and banditry. What is more, despite the reported fiscal interventions and social palliatives, the majority of businesses and workers affected by Nigeria’s coronavirus lockdown are not receiving the support they badly need. Where are the cash grants for small businesses? Where are the governmentguaranteed, free-interest loans for SMEs? Where is Nigeria’s equivalent of a job retention scheme that pays a large proportion of the wages and incomes of workers and self-employed people, and thus allows them to have some income while they stay at home? In a recent speech, Professor Charles Soludo, former central bank governor, referred to a study showing that only 2 percent of bank accounts had N500,000 (about $1,300) and above. This means that most people do not have savings and really cannot survive by staying at home; they must go out and work to eke out a living. Which is why the government’s decision to ease the lockdown is welcome. Yet, the conditions attached to the exit strategy or the “new normal” that President Buhari announced last week would still harm businesses and jobs. The partial release of the lockdown, which starts today, Monday, 5 May, would involve the following:

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The imposition of social distancing and other measures after easing the lockdown on Lagos, Ogun and Abuja still threatens the survival of many businesses, putting millions of jobs at risk. A good COVID-19 exit strategy must save jobs and livelihoods!

an overnight curfew from 8pm to 6am; a ban on “non-essential” inter-state travel “until further notice”; a mandatory use of face mask or coverings in public; and mandatory physical distancing. All of these would still create huge problems for most businesses and ordinary Nigerians. Take the wearing of face masks. The World Health Organisation says it does not recommend their general use in public because “they can be contaminated by other people’s coughs and sneezes, or when putting them on or removing them”. So, by making the wearing of masks in public “mandatory”, Nigeria may be creating a health hazard. What’s more, it is putting another burden on poor Nigerians. How much would the face masks cost, and how many Nigerians can afford them? This would enrich a few and further impoverish many! Then, there is the indefinite ban on “non-essential” inter-state travel. This is the only means of livelihoods for many commercial drivers. How will they earn a living if they cannot take passengers from, say, Lagos to the East of the North? And who will support them and their families while they pack their cars and buses making no money? The most damaging to businesses and jobs of the new conditions is the socalled “mandatory physical distancing” rules. This means that while people are no longer locked down at home, they must maintain physical distancing in public and at work. But, as someone said, physical distancing would be a disaster for companies that rely on face-to face contact with customers and that depend on heavy footfall in their shops. How do you maintain physical distancing in busy public markets in Lagos or Abuja? Truth is, the imposition of social distancing and other measures after easing the lockdown on Lagos, Ogun and Abuja still threatens the survival of many businesses, putting millions of jobs at risk. A good COVID-19 exit strategy must save jobs and livelihoods! Dr. Fasan, a London-based lawyer and political economist, is a Visiting Fellow at the London School of Economics. e-mail: o.fasan@lse.ac.uk, twitter account: @olu_fasan

Corporate ethical culture – The role of the Board

ulture is fundamental to the success or failure of an enterprise. The misconduct of a senior executive – or even that of a junior officer – in this era of twitter savages (yes, they exist!) - can cause irreparable damage to the Company’s reputation. Underscoring the importance of Corporate Culture, Principle 1 of the Nigerian Code of Corporate Governance 2018 provides that an effective Board is responsible for providing entrepreneurial and strategic leadership as well as promoting ethical culture and responsible corporate citizenship. It is expected the Board Charter shall set out as a key Board priority, the establishment and maintenance of the Company’s values and standards as well as modelling these values and standards. The starting point will be for the Board to define what kind of culture it wants to enthrone in the organisation, assess the prevalent corporate culture, determine if this is a desirable culture and in alignment with the espoused values, how to reinforce it if it is durable, and remould it if it is not. Defining the core values, a Code of Ethics (incorporating Business Conduct) a robust ethics and compliance program, designating an Ethics Officer, approving a transparent whistleblowing mechanism that protects whistle blowers and clear communication

across the organisation are steps towards defining a corporate couture. It entails ensuring that hiring, reward, compensation and firing polices are underpinned by the espoused culture. Performance targets and indices should also be set and appraised with the underlining culture as a basis. Given that Directors don’t spend enough time on the shop floor, it is difficult for them to assess corporate culture. Usually, the most they see are senior executives who appear at quarterly Board and Committee meetings to make presentations on their respective areas of oversight. This does not give the Board sufficient opportunity to assess what the prevalent culture in the organisation is. To assess corporate culture, the Board should commission employee and customer surveys – this is best outsourced, and parameters clearly defined. The right atmosphere will need to be created to reassure employees of non-reprisals for speaking up. It is good practice to undertake this survey periodically to enable the Board keep a tap on espoused and actual corporate culture. Another useful tool in assessing corporate culture is to review the whistle blowing reports and how complaints are handled. It is not enough to accept reports of incidents as duly resolved. The Board needs to ask questions and gather as much information as possible to form as www.businessday.ng

clear a picture as possible of the prevalent corporate culture. The Board is encouraged to have occasional informal interaction with senior and middle level staff – company retreats, end of year events, etc. Directors should pay attention to little details – body language of executives at Board and Committee meetings. Is the effort to put up a common front contrived or genuine? Is there an effort to cover up infractions? What kind of side comments do executives make? Are these signs that there could be some toxic elements in the organisation? These signs should not be ignored but be further interrogated by the Board. With a clearer picture of what the culture is, the Board will then need to take action. Where it finds a misalignment between the corporate culture in practice and the espoused culture, the Board will need to commission and acculturation that will seek to translate the core values, code of ethics and other elements of the corporate culture into action. In certain cases, this will entail replacing leadership, as to a large extent the CEO is a key driver of corporate culture and employees take their cue from him/her. An acculturalisation process will entail staff and stakeholder workshops, identifying culture champions, rewarding good behaviour, punishing bad behaviour regardless of who the offender is,

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Bisi Adeyemi slogans that reinforce core values and open, consistent communication. Deliberate steps will need to be taken and periodic reports of progress presented to the Board. Where the assessment indicates a positive culture, the Board will take steps to ensure this is reinforced and sustained and that the occasional soundcheck is undertaken. It is critical for the Board to keep a constant oversight of culture and develop over time appropriate measurement metrics that enable it ascertain that the programs and policies it has put in place continue to be fit for purpose, and where they are not, review these. Bisi Adeyemi is the Managing Director, DCSL Corporate Services Limited. Kindly forward comment(s) and reaction(s) to badeyemi@dcsl.com.ng. DCSL provides Governance Advisory, Corporate Restructuring & Board Evaluation, Board & Senior Management Training, Retreats & Strategy Sessions, Executive Talent Recruitment, HR Outsourcing, Company Secretarial services

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Monday 04 May 2020

BUSINESS DAY

EDITORIAL PUBLISHER/EDITOR-IN-CHIEF

Frank Aigbogun

Sanwo-Olu’s leadership skills come under COVID-19 test Continued from front page

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

GM,BUSINESSDEVELOPMENT(South) Ignatius Chukwu

virus that has sickened 976 people in his state as at Friday. His emergence as candidate of the All Progressive Congress (APC) in Lagos State in the 2019 general elections was not without turmoil as it ruined the ambition of the then incumbent governor, Akinwunmi Ambode, evoking outcries of a state under the sway of APC chieftain and former governor, Bola Ahmed Tinubu. The moral burden of being beholden to a godfather who brooks no opposition, commonly perceived to have a chokehold on the pulse and purse of the state, didn’t do much to help the reputation of the governor. The 54-year-old politician worsened matters when his delayed action at checking the deteriorating road infrastructure in the state and the mounting filth around street corners led to questions about his competence. But sometimes, it takes a crisis to show the man. In the case of SanwoOlu, the pandemic has helped to rewrite his story. Sanwo-Olu, a banker, leads a state facing a public health crisis. But leadership is sometimes only appointing the right people and getting out of their way so they can do their jobs. To his credit, he appointed a consummate professional in the role of the health commissioner and allowed him to be the face of the fight against the pandemic, yet that has not

diminished the governor. In fact, it has brought him more acclaim. Akin Abayomi is a pathologist and specialist in internal medicines, haematology, environmental health and biobanking. He was the chair of the H3Africa Consortium Data and Biospecimen Access Committee, and principal investigator of the Global Emerging Pathogens Consortium, which was established at the height of the West African Ebola Outbreak to address biosecurity concerns in Africa. This is a brief profile of the man leading the charge against Lagos’ pandemic fight. His counterpart at the federal level is Boss Mustapha, a lawyer and civil servant. Mustapha is assisted by Chikwe Ihekweazu, an epidemiologist, and there is no virologist on the Federal Government task force, unlike in Lagos. The outcomes have also been markedly different. Shutting the airports, imposing a lockdown and easing it were all knee-jerk reactions by the FG without scientific and evidence-based approach in the process. The president addressed the nation only after excoriation from the public. Now Nigerians pine to hear from their president if only to confirm that he is still alive. Clearly, if the Lagos State government had the power to shut the airports, it would have been done so sooner. Even then, it has managed to communicate effectively through various media and through community efforts. Contrast this with the shambolic handling of the pandemic by the Kano State governor, Abdullahi Ganduje,

whose poor governance and allegation of sleaze has engendered mistrust by the people. The citizens believe their mallams over the government and chants of “The Mallam says there’s no corona” rend the air on the streets, in a state that in one day saw 80 new cases. Below is timeline of Sanwo-Olu’s handling of the coronavirus pandemic: Strengthened protocols to avoid further spread of COVID-19 as he paid a visit to the Murtala Muhammed International Airport to carry out an assessment of some measures used to screen travellers coming into the country and state (March 17, 2020). To further curb the virus spread, he put measures in place to strictly enforce travel restrictions. This was in conjunction with healthcare professionals and immigration agencies. According to Sanwo-Olu, it was the time to be smart and stand together. On March 19, 2020, Sanwo-Olu limited gatherings and events to no more than 50 people and ensured appropriate social distancing must be observed. Sequel to limiting gatherings, schools and religious gathering were ordered to be closed down. This was in a bid to protect residents from physical and other potential threats. On March 20, the governor also commenced grassroots sensitisation with fliers, on the radio and other channels. After daily evaluation of COVID-19 situation, Governor Sanwo-Olu on March 22 issued a 14-day work fromhome-order for Lagos State civil servants from Level 1-12 while giving strict instructions on social distancing.

He also ordered public parks, including those in private and residents’ estates and other public places, to shut down until further notice in a bid to curb the virus spread. Also, on March 24, markets were ordered to close for seven days, except for sellers of food, medicines, medical equipment and other essential life-saving products. Having understood the possibility of hoodlums taking advantage of the lockdown situation, Governor SanwoOlu on March 24 met with the State Security Council to improve security. On March 26, the Lagos State government deployed disinfectant equipment to fumigate the entire state. The next day, the advocacy team of Lagos State was empowered with more vehicles to aid information dissemination to all parts of the state. On March 27, the Lagos State government announced stimulus packages which contained rice, beans, garri, bread, dry pepper, drinking water and vitamins to residents that would last for 14 days during lockdown. The first stage targeted 200,000 households at an estimation of six people per household. The state government on March 28 completed a 110-bed fully equipped isolation centre in partnership with GTBank. The containment period was used to identify, trace, and isolate all individuals that had come in contact with confirmed cases in Lagos.

Note: the rest of this article continues in the online edition of Business Day @https://businessday.ng

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Monday 04 May 2020

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

CONSUMER GOODS

PZ Cussons sees woeful nine months as loss worsens in third quarter SEGUN ADAMS

Z Cussons, makers of consumer products like Imperial Leathe r, M o r n i n g Fresh, Haier Thermocool and Mamador, dipped into a loss in nine months business period ended 29 February 2020, after losses in its third-quarter worsened from the prior year. The consumer goods firm, with Nigeria as its largest and most diverse single market, made a loss of N3.5 billion in the threequarter period compared to a profit of N807 million in the same period last year. PZ’s bleak performance was on the heels of a loss of N1.9 billion in the third quarter, 367.62 percent higher than the company recorded in the quarter on a year-on-year basis. In the period, the revenue of the consumer goods firm fell marginally to N54.7 billion, suggesting weaknesses in the Home and Personal Care (HPC) Segment might be persisting due to increasing competition from cheaper unbranded products as well as products from unrecog-

nized smaller players which continues to exert pressure on HPC business. The company faced a higher cost of sales which led to gross profit declining by 33 percent to N8.5 billion. As a result, gross margin dropped to 15.4 percent from 23 percent over the period. Operating profit also

turned negative on due to higher selling, general and administrative expenses in the nine-month period. P Z was able to rake N140.8 million, 54.7 percent more year-on-year, from its other income. But gains were offset by losses from foreign exchange and negative net finance cost. PZ in the third quarter

saw revenue rise by 3 percent to N20.8 billion. Operating loss surged to N2.4 billion from N399 million while the loss for the period stood at N1.9 billion. In its second-quarter result for the period ended 30th November, revenue dipped to N18.1 billion from N19.2 billion. Cost of sales surged to N15.1 billion from N14.9 billion. The

R-L Lanre Afini, member of Lagos house of assembly ; Frank Okosun, CEO/partner , Knight Frank ; Isaac Folorunso, head of value and advansory , Knight Frank , and others , distributing food items to residents of Lagos Island as part of efforts to cushion the impact of COVID-19 lockdown in Lagos. Pic by Pius Okeosisi

CONSUMER GOODS

May & Baker’s interventions on COVID -19 Pandemic SEYI JOHN SALAU

igeria’s pharmaceutical manufacturing giant, May & Baker Nigeria Plc has made donations of hand sanitizers to various institutions across the country including some Police commands in Lagos and Ogun states, the Nigerian Prisons and several other stakeholders. The donations were made on behalf of the company by Eugene Olewuenyi, Communications Consultant accompanied by Binta Yusuf, Personal Assistant to the Managing Director/CEO. Olewuenyi said the donation is part of the company’s corporate social responsibility and one of the company’s ways to intervene against the Corona virus pandemic. While receiving the hand sanitizers at the Nigerian Correctional Service, Deputy Controller of Prisons in charge of the Kirikiri Cus-

loss for the period stood at N484.5 million. PZ Cussons, like many consumer goods players, operates in an environment where consumers have seen real income pare over the years while the cost of operation for businesses have remained high due to infrastructure deficits. Th e ou tbrea k o f th e coronavirus is expected to

todian Centre, Rev. BenRabbi Freedman said the donation by May & Baker is unique because it touches directly on a highly vulnerable segment of the society . He thanked May & Baker for the donation of cartons of the product and assured that the product will reach those for whom it was intended. May & Baker is a leading local manufacturer of Hand Sanitizers in Nigeria with the brand name “Smartans”. In a separate statement, the Managing Director /CEO of May & Baker, Nnamdi Okafor said that the company re-activated its’ hand sanitizer production line within 72 hours of announcement of the COVID -19 index case in Nigeria. He stated that the company’s major goal was to join in the battle against this invisible enemy called COVID-19 with a first objective of forcing down the criminally inflated pricing of hand sanitizers to a point where most Nigerians can afford them.

He further stated that it was critical that the pandemic is contained in Nigeria before it goes out of control considering the poor state of our healthcare facilities and opined that good personal hygiene is central to this strategy. This he said informed the company’s decision to donate this product direct to certain institutions that are central to this battle and also some vulnerable groups like the police and prisons/prisoners. He said the company has also taken steps to ensure that “our stakeholders such as staff, visitors and customers have the product for their personal and family hygiene He said the company took steps to ensure compliance with World Health Organisation’s (WHO) guidelines on personal hygiene including hand washing, use of hand sanitizers and social distancing among all staff and visitors to its premises. In another unique contribution to the fight against

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COVID -19, the company has mass produced chloroquine tablets for clinical trials following the indication that chloroquine could be useful for the management of the Coronavirus disease. At the wake of the spread of the disease in Nigeria, the National Agency for Food and Drug Administration and Control, (NAFDAC) contacted May & Baker to mass produce emergency stock of chloroquine for possible clinical trials. Okafor said the company has already produced large stock of chloroquine in response to the NAFDAC request. This has already been made available to some health institutions in Nigeria and countries in the Economic Community of West African States (ECOWAS). Chloroquine has long been used for the treatment of malaria. It was a flagship product of May & Baker until some years back when the federal government stopped the use of the drug in treatment of malaria in Nigeria.

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be a net loss as gains from initial panic buying will be offset by slower demand that would follow given the severe disruption to households’ earning capacities. Last year, PZ Cussons Group UK – the parent company of PZ Cussons Nigeria Plc (PZ), had blamed disappointing results on its Africa operations, especially Nigeria. In March, UK-based PZ Cussons announced the proposed sale of its Nigerian dairy business, Nutricima, in line with the group’s focus sale and accelerate strategy in order to streamline its focus on core personal care and beauty products. Nutricima’s major product portfolio includes milk and yoghurt based drinks such as Nunu, Yo, and Olympic. The company has also announced that Panagiotis Katsis will replace current CEO Christos Giannopoulos when the latter retires June 30 2020. “Mr Katsis will be appointed as the new Chief Executive Officer of the company effective 1st July 2020,” the consumer goods firm said.

BANKING

Access Bank alerts customers as fraud rises during Covid 19 crisis HOPE MOSES-ASHIKE

ccess Bank PLC, Ni g e r i a’s l e a d ing retail Bank has implored its customers to be vigilant in these uncertain times as incidents of fraud are on the rise. Since the start of the Coronavirus pandemic in the country necessitated the lockdown of first, 3 major cities, and eventually the entire nation, the Bank has observed a worrying increase in reports o f f rau d s t e r s t a r g e t i ng unsuspecting customers. This development has become even more worrisome, especially as these people not only disguise themselves as bank representatives, but also use the palliatives from the government as bait to collect customers BVNs and other key banking details. According toVictor Et@Businessdayng

uokwu, executive director, retail banking, “Access Bank is imploring its customers to be wary of any message, demanding th e i r p e rs o na l o r ba n k details. Customers must remember that the Bank will never ask for their BVN, full card PAN, PIN, mobile app activation code, OTP or password as it is readily available to the Bank via its database. Any call, email and text message, claiming to be from Access Bank demanding for any of these details is certainly a scam,” he concluded. Access Bank has always maintained a strong antifraud awareness as part o f i t s re s p o n s i b i l i t y t o protect the interest of its customers. The Bank has d e d i cate d pag e s o n i ts official website that constantly updates customers on all the ways in which fraudsters can sw indle them.

Monday 04 May 2020

BUSINESS DAY

COMPANIES&MARKETS

Business Event

CONSUMER GOODS

International Breweries donates medical supplies to curtail spread of COVID-19 JOSEPHINE OKOJIE

nternational Breweries (IB), a member of the Anheuser-Busch InBeV has donated medical supplies to five states and the National Centre for Disease Control (NCDC) to curb the spread of COVID-19 in the country. IB has joined the efforts of other leading private organisations to support states and the Federal Government initiatives geared at alleviating the impact of the coronavirus pandemic. The organisation has donated 30,000 bottles of hand sanitisers, Personal Protective Equipment (PPEs) for front-line workers, test kits, N10million to NCDC, and 60,000 bottles of nutritious non-alcoholic Malta drinks among others. Building on the company’s longstanding commitment to its vision of ‘Bringing People Together for a Better World’, IB, in a statement, said its COVID-19 support efforts have been based on a collaborative approach of gathering insights from communities and stakeholders needed to provide tailored interventions

with great impact. “As an organisation, we are always looking to support our local communities and are positive that our donation will assist and support the government and our communities greatly in the fight against the spread of this pandemic,” said Hugo Dias Rocha, managing director, International Breweries Plc. “We appreciate and lend our voice to the various initiatives by the Federal Government of Nigeria, the State Governments, the private sector to which we belong and all other sectors, organizations, individual and players that have all teamed together to assist in curbing the spread of COVID-19,” said Rocha. “We stand with you, and indeed the world, in the joint resolution to eradicate this virus and its impact on communities and economies,” he added. He further said that the organisation is pleased to be part of the solution for its communities and would continue to explore other areas collaboration and support. In the same vein, Temitope Oguntokun, legal and corporate affairs director, said, “Our longstanding commitment

to our core values of Health, Safety, Environment and Corporate Social Responsibility (CSR), readily serves us in this trying time. We will continue to drive COVID-19 awareness and interventions with our employees and in our communities.” “A number of the donations have been distributed across the states and communities while some are still ongoing,” Oguntokun said. Oguntokun stated that aside from the donations, IB has been supporting its employees with resources and consistent COVID-19 information to stay safe and healthy. She also said that as part of the company’s other ongoing collaboration to curtail the spread of the virus, the company, through its International Breweries Foundation is currently engaging with government and other stakeholders on the production of local face masks. “We believe this intervention will go a long way to reduce the further spread of the virus while also boosting our already challenged economy through youth entrepreneurship,” she said.

Abiodun Ayodeji (Right) , marketing manager, Promasidor Nigeria , handing over the product donations to Kabiru Kolawole Alani Agbabiaka , the Oba of Isolo , during the company’s outreach project initiative on the fight against COVID-19 in Isolo , Lagos. Pic by Pius Okeosisi

L-R: Mrs. Stella Abimbola Shopeju, Deputy Managing Director Operations, Lumos Nigeria; Mr. Olalere Odusote, Lagos State Commissioner for Energy & Mineral Resources and Mrs. Adepeju Adebajo, Chief Executive Officer, Lumos Nigeria during the presentation of the Lumos Solar Home Systems to the Lagos State Government as part of the company’s intervention to contain the spread of Covid-19, in Lagos.

COMPANY RELEASE

Cummins West Africa Limited (CWAL) donates 100kVA power generator to the NCDC

ith a vision to make people’s life better by powering a more prosperous world, Cummins West Africa Limited, (CWAL) donated a 100kVA power generator for the Centre for Public Health Laboratory at the Nigeria Centre for Disease Control (NCDC), Yaba Lagos to guarantee uninterrupted power supply in the battle against the Covid-19 pandemic at NCDC. While presenting the power generator to the NCDC leadership in Lagos, CWAL Managing Director, Ade Obatoyinbo said that the gesture by the company is part of its support and appreciation of the hard work, dedication and commitment of the staff and management of the centre to protection of the health and lives of Nigerians. Obatoyinbo said that for the centre to respond to emergencies and operate seamlessly it needs constant power supply and a conducive environment to be able to deliver efficient, timely and critical health care for thousands of Nigerians who will be relying on NCDC to overcome health challenges posed by the Covid-19 pan-

demic. While expressing optimism that Nigeria will be first among African countries to announce its exit from the pandemic just as in the case of Ebola, the CWAL Managing Director commended all the health workers in the front line of the fight against Coronavirus for the sacrifice they are making to save lives and curb the spread of the virus. He urged everyone to join in the fight against the pandemic by observing all the necessary precautions as prescribed by the Federal Ministry of Health: washing hands with soap and running water, observing social distancing, coughing only into bent elbows and staying at home when possible amongst others. In her response, Olajumoke Babatunde, Deputy Director NCDC/Head Central Public Health Laboratory who represented the Director General of NCDC, commended the management of Cummins West Africa Limited for the gesture. She said that since inception of the centre, one of the most pressing challenges it has dealt with is lack of adequate www.businessday.ng

and constant power supply. Mrs. Babatunde assured that with the power generator donated by CWAL, the power issue is now a thing of the past. Cummins West Africa Limited (CWAL), is a wholly owned subsidiary of Cummins Inc., a NYSE (CMI) listed, Fortune 200 company. CWAL was initially established as a joint venture which became a 100 percent Cummins wholly-owned entity in 2014. CWAL has powered some of the largest and most mission critical operations in Nigeria in segments including power generation, rail, marine, defense, highway heavy, medium-duty bus and truck, agriculture, oil and gas, mining, construction and industrial. Cummins Inc. is a global technology leader that designs, manufactures, distributes and services diesel and natural gas engines, as well as powertrain-related component products, including filtration, after treatment, turbochargers, fuel systems, controls systems, air handling systems, transmissions, electric power generation systems, batteries and electrified power systems.

L-R: Ade Obatoyinbo, MD, Cummins West Africa Ltd, Babatunde Olajumoke, Deputy Director, Nigeria Centre for Diseases Control (NCDC) and Head Centre for Public Health Laboratory, Lagos, Mark Oni-Okeke, General Manager, PowerGen, Cummins West Africa Ltd and Ekoh Annieffiok, Assistant Director, Diagnosis NCDC, during the presentation of 100KVA generator to NCDC/CPHL by Cummins West Africa Ltd in fight Against COVID-19 in Lagos on Friday.

L-R: Business Development Manager, PWAN ROYALE, Austin Ejiofor; Admin Manager, PWAN EDGE Mary Abraham; Managing Director, PWAN PLUS, Julius Oyedemi and Admin Manager, PWAN GROUP, Femi Alabi, during the PWAN Group’s second round of food items distribution in Lagos Mainland ....yesterday

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Monday 04 May 2020

BUSINESS DAY

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Monday 04 May 2020

BUSINESS DAY

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Monday 04 May 2020

BUSINESS DAY

This is MONEY

• Savings • Travel • Debt & Borrowing

A guide to your Personal Finance

• Utilities • Managing your Tax

Covid 19: Your mind and your money children may either have to defer the completion of their studies for a season, whilst they earn and contribute to their own education, or can take advantage of part-time or evening classes. One positive fallout of this global pandemic is that it has opened up a whole new vista of opportunity in the education space with exceptional possibilities for online learning. It is worth exploring these as an alternative solution at reduced cost. Of course, there will be a psychological impact from any sudden change for you and your family, but cutting back drastically on such major expenses such as school and housing will reduce the pressure and certainly alleviate the seemingly insurmountable burden of huge bills. So many have borrowed for business and personal reasons. Debt will not go away until you tackle it head on and give it the necessary attention it deserves. Start with the most urgent or the most expensive debt. Where your debt is becoming overwhelming, approach your lenders and be honest about your difficulties; you may be able to negotiate a more palatable repayment plan. Some friends or relatives might even write off part or all of the debt because of your transparency. There are ways to protect yourself during challenging times. Health insurance matters more than ever now. Embedded in some life policies are unemployment benefits that will help cushion the effect of unemployment for a time. Your insurance premium is one financial expense that mustn’t lapse.

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If you have been caught out without an emergency fund this time, make this the first thing you put in place when things improve

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n many countries, May is designated Mental Health Month to raise awareness about the importance of mental health. It is encouraging to see the stigma gradually being chipped away, but there is still much work to be done. Although any form of stress can take its toll on your health, stress related to financial problems can be especially toxic and is one of the worst forms of stress. The Coronavirus and the subsequent lockdown are having a devastating impact on the lives and livelihoods of individuals, households, businesses, communities and national economies. Financial troubles come in so many forms; no one could ever have predicted the sheer magnitude of this global pandemic let alone the financial turmoil that it would bring. Most Nigerians are currently facing a very uncertain time with both personal and business finances in distress resulting in intense stress and anxiety. There are some tell-tale signs that we should all look out for that must be addressed before they become chronic and put one in danger of stress-related behaviors and illnesses. These include headaches and migraines, insomnia, panic attacks, feelings of lethargy, aggression, alcohol and drug abuse, domestic violence, depression and suicidal thoughts. Financial problems must be tackled head-on, otherwise they fester and become critical. Here are some of the most challenging problems families are currently facing: Rent gulps a huge amount out of already stretched incomes. Landlords depend on their rental income, so naturally must request for prompt payment. You might have lived in a house for years and have become accustomed to a certain status and standard of living in a particular neighborhood, but you simply can’t afford to renew the rent. Contact your landlord to negotiate more affordable terms. Landlords too, as far as possible, should consider tenants at this time who

are suffering a shutdown of businesses with little or no income. Communication and mutual understanding should help; becoming a sitting tenant is not a solution, it only leads to acrimony and additional stress for both parties. Be honest with yourself; if you cannot afford to live in a particular neighborhood, you should consider either moving to a smaller, less expensive property, or move out of the area into one that you can afford. School fees are one of the largest expenses that parents face over several years. With the loss of jobs and incomes, the next few semesters are likely to be challenging for those without an educational plan in place. Even where there may be a slight drop in fees as schools move online for the foreseeable future, many parents must invest in equipment and devices to make it possible for their children to continue to learn efficiently and effectively from home. If money is tight, as it is for most, your choices wont be easy. You can either leave the child closest to major exams in the school, transfer the others to a more affordable option, or move them all. Remember the most expensive school is not necessarily the best one for your child. What is more important is to find a school that has decent standards and faculty, and even if it doesn’t have all the frills, one that you can afford. Most important is the investment you make in parenting at home. For many families, there is simply no money to fund their children’s education. Without benefactors, older

You have assets of value that will be difficult to replace; your car, your home, your possessions. Insurance will give much relief should anything happen. If you get sick, not from Covid-19, but from any another illness, do you have medical insurance in place or do you have to pay up in cash at a time when your income is already strained. Medical attention must be available if you need it so that festering problems do not become real emergencies. Don’t wait for an unfortunate incident before you recognize the need for insurance. The insurance premium is a small price to pay to protect yourself and your loved ones and gain much needed peace of mind. It is so important to seek help if you are feeling overwhelmed and have difficulty coping mentally and emotionally. The last thing you should be doing now is to withdraw and keep the feelings of despair in. This is the time to call a close friend or member of your family that you can trust and confide in.

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Many churches or mosques have a welfare team who provide online counseling for members during such challenging times. Professional counselling services are also available. You cannot wish away the enormous problems; serious financial challenges require concrete action. This includes cutting back on nonessential expenses, changing your spending habits, seeking ways to increase income including leveraging on and monetizing your talents and skills, selling some assets you don’t need or borrowing as a last resort. If you have been caught out without an emergency fund this time, make this the first thing you put in place when things improve. Start to build a cushion of about six months of your basic expenses. By setting aside a buffer, should you face a financial emergency, you will be better able to ride the storm. It is so important not to be embarrassed by your financial situation. This diffi-

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cult time will pass, and you cannot afford to break down totally which will only make the situation worse and put you and your family into a far more difficult predicament. Ultimately it is through financial discipline that you can overcome financial challenges and times of economic uncertainty. This requires the development of a long-term financial plan, focus, and commitment to change for it to last. Financial health and mental health are so closely intertwined. With sound financial health, peace of mind is more likely. At least, there is one less thing to worry about. The theme for Mental health Awareness week which runs from 18th - 24th May 2020, is “kindness”; it gives focus to the power and potential of kindness. Protecting our mental health is going to be an important aspect of national healing and recovery from the coronavirus pandemic; psychological and social scars tend to outlast the physical manifestations. One positive outcome of this ordeal is that the Coronavirus is unlocking our shared humanity. Kindness is at the centre of our health; both physical and mental, and it heals both the giver and the recipient. Be kind to everyone that has the privilege of crossing your path, and most of all, don’t forget to be kind to yourself. Stay safe.

Instagram and Twitter: @ mmwithnimi, Facebook and Google+: ‘Money Matters with Nimi’. www. moneymatterswithnimi. com, or send us an email info@ moneymatterswithnimi. com Nimi Akinkugbe has extensive experience in private wealth management. She seeks to empower people regarding their finances and offers frank, practical insights to create a greater awareness and understanding of personal finance. For more personal finance tips, contact Nimi: Email: info@ moneymatterswithnimi Website: www. moneymatterswithnimi. com Twitter: @MMWITHNIMI Instagram: @ MMWITHNIMI Facebook: MoneyMatterswithNimi

Monday 04 May 2020

BUSINESS DAY

BD Money Personal Finance

Here are free online learning sites to sharpen your skills BUNMI BAILEY

ith a third of the global population on COVID-19 lockdown, many are taking advantage of the availability of e-learning services to sharpen their skills. And since not much economic activities are being carried out except for essential ones, people should be being encouraged to use this time to self-study and learn new skills. The e-learning sites is widely adopted by the education sector and with this lockdown, it is becoming more useful and popular at this time. And the internet services serve as a platform for people who seek education in any form like master’s degree programs, computer science, K-12, study programs etc. Here are eight outstanding free websites to access academic courses. Coursera This American online learning platform founded by Stanford professors, Andrew Ng and Daphne Koller offers massive open online courses, specialization and

degrees. Founded in 2012, it has more than 35 million learners, 150 university partners, 2,700 courses, 250 specializations and four degrees. In addition to free courses, Coursera offers courses generally ranging from $29 - $99. Specializations and degrees are priced higher. The course instructors include experts from the world’s top colleges and universities, and courses include recorded video lectures, community discussion forums and both graded and peerreviewed coursework. You can

also receive a course certificate for each course you complete. Stanford Online Stanford online, an education initiative at Stanford University, offers free online courses, professional certificates, advanced degrees and executive education. It offers courses from Stanford’s undergraduate and graduate schools, including Stanford Law School, Stanford Business School and Stanford Medical School, among others. edX This is massive open online course provider hosts online

university-level courses in a wide range of disciplines to a worldwide student body, including some courses at no charge. It also conducts research into learning based on how people use its platform. You can access 2500 free online courses from 140 leading institutions worldwide, gain new skills and earn a certificate of completion. TED-Ed TED-Ed has a global network of more than 250,000 teachers that serves millions of teachers and students around the world every week. This award-winning youth and education arm whose mission is to share and spread ideas from teachers and students includes innovative content such as original animated videos and a platform for teachers to create interactive lessons. Harvard Extension This online website provides free courses from Harvard, one of the top universities in the world that allows you to search for courses according to a professional certificate making it an easier option if your goal is to have a certificate Open Culture online courses Open Culture’s listing of free online education courses highlights 1,000 lectures, videos

and podcasts from universities around the world. Its list features courses from England, Australia, Wales and many state universities around the United States The site features a lot of material found only on universities private sites, all in easy to browse categories. This means you can find hundreds of university courses, without having to visit and search each university’s own site. Khan Academy Khan Academy partners with many post-secondary schools offering a useable, well organized interface. Also curating many courses from around the web, it offers impressive depth on many different subjects. Among the more well-known educational sites, Khan Academy is also incredibly useable, which may make it easier to keep learning goals. Open Yale Courses Just like Harvard Extension and Stanford online, it offers courses only from Yale. While the site is similarly limited to topics taught at the school, Open Yale Courses offers a lot of videos of actual campus lectures. The availability of videos makes the site a great option if you’re looking for quality courses, but learn better by watching than by reading.

Economy

Liquidity, safety of staff are top concern for Nigerian businesses amid coronavirus pandemic, Here’s why MICHAEL ANI

usinesses in Nigeria have identified Liquidity and the safety of their staff among the most pressing business needs they are concerned about as they grapple with the impact of the COVID-19 pandemic. These are some of the findings from a survey conducted by Pricewaterhouse Coopers (PWC) Nigeria. The survey findings were revealed during a recent webinar hosted by the firm, on the economic implications and policy responses to COVID-19. The survey had about 3000 respondents ranging from managers to CEOs and business owners. Asked what their top business concerns were, 22.5 percent pointed at Liquidity, that is the availability of immediate cash to pay bills especially following disruption to business activities that has been experienced. This was followed by Safety of staff at 15.4 percent, which is an impressive indication that Nigerian businesses have a people focus and were not only concerned about their profitability. The third significant business concern iden-

tified was infrastructure for remote working (14.6 percent ) further buttressing the need for access to electricity and internet connectivity. Providing the results of the findings Taiwo Oyedele, Fiscal

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Policy Partner and West Africa Tax leader at PwC noted that most businesses (78.4 percent) do not plan to lay off staff as a result of the crisis. This presents a very positive picture. However, decisions on staff re-

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tention are often top management decisions and it could mean that a good percentage of respondents may not be privy to such plans by their organisations. The other 21.6 percent admit that they will lay off various percentages of staff as a consequence of the pandemic. Of this group however, 55.3 percent do not think government intervention will influence their decision on laying off staff with the rest indicating they would retain their employees if government’s intervention were able to take care of varying percentages of their staff wage bill. As part of its societal impact, PwC has indicated that it would provide free business continuity support services to small businesses employing between 5 to 50 employees who undertake to retain all their staff during this period. It would appear that the much needed investments to stimulate growth and move the needle on poverty will be greatly impacted as a result of the COVID-19 crisis as 56.7 percent of respondents indicated that they will delay investment decisions while 19.4 percent stated that they would invest less. Majority of the survey respondents think that govern@Businessdayng

ments interventions have either been grossly inadequate (23.8 percent) or inadequate (43.9 percent) with 17.5 percent expressing indifference to what the government has done up to the date of the survey. Only 14.4 percent agree that government’s intervention has met their expectations. This provides a clear message to the government both at the federal and state levels pointing either to the need to do more, or to better communicate what is being done already to help shape public perception. Among the top two areas that respondents believe government’s intervention should be focused include tax relief (30 percent), provision of loans at zero or low interest rate (29.3 percent), and cash transfer to the poor (16.9 percent). Overall, the businesses surveyed agree that the private sector has a role to play in supporting government’s fight against Covid-19 with 85.5 percent suggesting that they are best suited to provide support in the area of provision of items, equipment and facilities compared to only 10.7 percent who will consider donating cash to the government.

Monday 04 May 2020

BUSINESS DAY

Start-Up Digest

In association with

How Abiri fights Covid-19 with analytics ODINAKA ANUDU

oronavirus has t h ro w n u p a high numb er of information providers, many of whom are merely working to make a living off the situation. During disease outbreaks, information dissemination is as important as life itself because people are easily swayed by what they read and see. Out of fear and uncertainty, many people are bound to act irrationally during crisis situations, jeopardizing their health and well-being in the process. During Ebola epidemic, many Nigerians drank urine and salt water for fear of contracting the disease. Because Nigeria lacked and still lacks data, it was difficult to ascertain the number of people that were really hurt by that practice. As pointed out last week, quality and accurate information reduces speculations and fears which are often detrimental to health and

well-being. In the age of fake news and misinformation, authentic information plays a vital role in ensuring that people do not panic, underreact or over-react. In the last two months, several conspiracy theories have arisen concerning coronavirus, its pattern of spread and cure. There have been insinuations that coronavirus kills only whites but not black people. This has proven to be untrue, with the high number of deaths of black people in some parts of the United States and even Africa. This is where Oluwatosin Niyi Abiri comes in. He is the co-founder of cMAPIT, a GIS and data visualisation software that helps to analyse geospatial data and its variables while also visualising them. Abiri uses the platform to analyse data variables concerning coronavirus outbreak and how it can be tracked and visualised to enable authorities to make accurate predictions. He ensures that data is distilled and analysed to

Oluwatosin Niyi Abiri

determine their accuracy or otherwise. One may wonder whether this is important. But it is becoming increasingly clear that a lot data are

put out every day concerning Covid-19 spread, deaths, recoveries, infections and treatments. These need to be tracked to ensure that

the public is not deceived or swayed into acting in panic. “Time for public health professionals to get their own copy of cmapit.io GIS software to be able to create their own interactive maps to track coronavirus cases and treatment and to be able to also build useful GIS models,” Abiri wrote on his LinkedIn account. The analytics is not just important for Covid-19, but also for other diseases. More so, it can be used by professionals from different fields of endeavour. Field workers can create interactive maps with cMAPIT to add to reports, and government institutions can set up their own GIS unit. The firm, founded in 2015, was described by the US Embassy Nigeria on its Facebook in 2017 as one of Nigeria’s leading startups focused on democratising GIS use for social development. Abiri’s role was said to include civic tech product designs, implementation and growth.

“His company has won three international awards and designed models to address urban sanitation issues with Lagos as a use case,” US Embassy Nigeria said. “Niyi is passionate about low-cost GIS use in property rights and is currently building a simple tech tool to address conflicts,” the Embassy further said. He holds a bachelor’s and master’s degree in Transport Technology and Sustainability and Environmental Management. He is a Mandela Washington Fellow, and drives awareness in property rights protection for the poor. His start-up is among seven firms selected from over 500 applicants for Ventures Platform and LASRIC’s $2,000 equity-free grant. Abiri said on his Twitter handle that Cmapit’s software user acquisition has reached 71 countries in the last one year. “Worthy to note that we are yet to spend a cent on Google ads, promoted it directly to Twitter,” he wrote.

Regarding the tech industry, he says it is still growing with massive and untapped opportunities, stressing that it is clustered in the major cities like Lagos and Abuja and requires country-wide penetration. Kunle-Hassan notes, however, that his business experiences challenges ranging from high operation costs due to lack of constant power supply, to lack of reliable internet. He further says that some clients also delay payments for projects, hurting business plans and projections. The entrepreneur avers that some of these challenges can be solved if the government can create policies designed to promote the growth of MSMEs and also support the intentional running of fibre services everywhere. He adds that there should be more publicprivate partnerships in the industry. He opines that the continued existence of the business is down to hard work, negotiation and dedication as the firm does not compromise on quality. He points out that growth and expansion are critical for the company, stressing

that part of its expansion plans are some free services and clothes that would be launching soon, in addition to smart homes/offices solutions. He also wants to scale up training activities to expand the careers in IT. In order to keep up with the continuous development of the industry and markets he operates in, KunleHassan still participates in trainings and even encourages his staff to participate as well because they present growth opportunities which lead to organisation-wide improvement. Advising entrepreneurs, he says, “The best teacher is experience. It is incredibly good to be structured, but it is always best to put yourself out there so you can learn quickly. Failure is a good teacher, especially if you do not see it as shameful or bad”. Speaking on the shortterm goal of the company, he says, “Summitech should have a presence in multiple countries and be part of the conversation when we talk about the tech ecosystem in Africa. I see Summitech offering Artificial Intelligence (AI) services/products to both the private and public sector”.

Kunle-Hassan: Redefining Nigeria’s tech space Gbemi Faminu

echnology has become an important enabler for businesses and institutions around the world. Young Nigerians are already tapping technology as a means of livelihood and for provision of the much needed services in various industries. Adekunle Kunle-Hassan is one of the youths who have taken the bull by the horns to push digitalisation and redefine technology. He is the founder and chief executive officer of Summitech Computing Limited, which is principally an IT solutions company. The entrepreneur has an academic background in Business Management from Regent’s Business School, UK, and has worked in the ICT industry for six years. After his education, he proceeded to follow his passion and establish his own practice. Kunle-Hassan says although he never had any formal training in technology, he managed to build up his business with the knowledge he gained from friends, colleagues and per-

sonal learning. He has also gone through some online courses where he received certifications in Project Management, IT Service Management, Product Management, among others in software development. “Summitech is an IT solutions company. We build software and apps as well as install and manage IT infrastructure for offices and ‘smart’ homes,” he says. “We are focused on providing opportunities to young professionals to hone their skills,” he notes, adding that his firm offers training in multiple tech-related disciplines with the aim of empowering communities with vital skills. Sunmitech was established in 2016. The entrepreneur was inspired to start the business after noticing the huge gap in achieving and pushing out high quality products despite having tech teams. “Before starting Summitech I had been in the Tech industry for about six years. I had noticed that some companies knew what they were doing when it came to building tech teams and implementing worldclass solutions while others had no idea but wanted www.businessday.ng

to push out high-quality products. So, we created Summitech to help companies trying to transform digitally but without the skill set for best practice software development or IT implementations, succeed,” Kunle-Hassan notes. He started the business with N10 million which he got from personal savings as well as loans from family and friends. The entrepreneur did not focus on raising fund or approaching investors, rather he was motivated by the need in the market and intensified the search for clients willing to commit to

paying for their services. Commenting on his business growth, Kunle-Hassan says, “Our growth has been steady and organic. As a company, we have always been focused on cultivating great client relationships which have been the biggest source of our growth. “ He explains that 70 percent of his business comes from referrals. He points out that Sunmitech started with staff strength of four persons but has grown in leaps and bounds to over 30 people. The number, according to him, will continue to grow going forward.

Adekunle Kunle-Hassan https://www.facebook.com/businessdayng

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Monday 04 May 2020

BUSINESS DAY

Start-Up Digest

Onifide Ifedayo: Tapping opportunities in livestock production Josephine OkojiE

any young Nigerians are abandoning agriculture for white-collar jobs. But Onifide Ifedayo, founder of GOATTI, Nigeria is one of the few youths tapping opportunities in the livestock industr y, proving to young Nigerians that agriculture is still a gold mine. Ifedayo was inspired to establish GOATTI in 2018 after identifying an opportunity in livestock production. “We realise that there are huge opportunities that are yet to be harnessed in the livestock industry so we believe that digitalising the industry will help the livestock sector fulfill its full potential,” he says. “We went into goat farming because it is a profitable business and they are stable animals that require less to manage,” he explains. “The meat is in high demand all year round and the livestock requires a short

Onifide Ifedayo

period to reach its full size than a cow. It produces twice in a year and the number per birth of kidding increases at each birth,” he added. He says that in the developed world, the livestock industry is a major foreign exchange earner owing to its rapid development, saying

the country can also grow its industry by developing the subsector based on a ranching model. He states that the livestock industry in the country has the potential to create millions of jobs while driving economic growth and development if given the right support by the

government. The young entrepreneur urges the private sector to lead in transforming the country’s livestock industry using technology and innovative solutions while the government provides the enabling environment. “Also, I believe GOATTI can address some of these

issues structurally by driving more investment into the industry,” Ifedayo further says. GOATTI’s livestock farm is located in Abeokuta with over 300 goats as well as aggregating from farmers to meet its demand. “We have a livestock farm in Abeokuta, Ogun State, where we are currently breeding over 300 goats.” “In the last five years, we have been working to build our market place for our livestock business before we decided to digitalise our platform in 2018. The entire South West, South East, and South-South regions depend on the Northern region for the supply of the goats,” the young entrepreneur says. “To supply these regions, we have our farm and also aggregate from subsistent farmers across the country. All our livestock products are insured by the Nigerian Agricultural Insurance Corporation (NAIC) against pest and diseases as well as theft,” the agriprenuer explains. He says his business sources feeds locally and

has planted its own leguminous and Naiper grass on about 100 hectares of land to feed its goat. “We buy Naiper grass and hay from the northern part of the country. We also source for groundnut mash, cassava peel, yam peel from factories that use these products as raw materials,” he says. Ifedayo notes that the business plans to have a processing facility in the short run to process between 60 and 70 goats weekly to supply top restaurants across Lagos. In the long-run, the business plans to move from retail to wholesale and also diversify to cattle farming and milk production as well as a logistic business for livestock,he discloses. Speaking on the major hurdle for the business, the young entrepreneur says that high logistics cost remains the major challenge facing the business. He advises the government to adopt the ranching model to tackle its farmerherder conflicts as a lasting solution to the decadeslong conflicts.

ports. “It is part of the challenge that we face in this part of the world. But somehow, we have found a way to navigate through it. As Nigerians, we have developed a thick skin so we find alternative routes. So, instead of going through Tin Can, we go through Ajegunle, to Amukoko, and to Mile 2,” he states. Contrary to the belief of many young entrepreneurs, Akinofa says that funding is not the biggest challenge facing entrepreneurs. “Really, funding is not the biggest problem because if you have funds but don’t have the requisite knowledge, the funds will disappear,” he says. “If you are given N10 million and you don’t have necessary knowledge of how to utilise the money, it will disappear in two years. “The biggest problem entrepreneurs have is lack of training. I am happy that universities are including entrepreneurship in their curricula. Years ago, it was not there, but now it is being included. If you are not trained on how to manage funds, you can hardly run a successful business. I came to LCCI Mentoring Programme to learn how to manage funds

and it has been quite helpful.” In 10 years’ time, Akinlofa expects to have presence in all the major cities in Nigeria. The entrepreneur also explains why many small businesses fail in Nigeria. “In every five years, a new business fails. One reason is lack of proper knowledge. Two is lack of patience and perseverance. We had our own rough edges when we started. Some of our clients that used our services before would often call and ask, ‘Are you still doing delivery service?’ I will just answer them jocularly, ‘If I am not doing it, what else should I be doing?’ “This leads to the issue of consistency. Most entrepreneurs are not consistent and dogged. Once many entrepreneurs start their business, they will immediately want to drive cars from the proceeds of the business, build houses from the business and do flashy things from there. Business is just like a baby. Do you expect a baby to start making money for you? No, but you have to nurture the baby and allow the baby to grow. You have to invest in the baby. The baby goes to school and matures. Until we begin to see businesses like this in Nigeria, entrepreneurs will be failing,” he says.

Logistics industry is Nigeria’s next oil — Akinlofa ODINAKA ANUDU

osin Akinlofa, chief executive of Luztow Logistics International Limited, has said that logistics business is a gold mine, though the industry is full of ups and downs. Speaking with Start-Up Digest in Lagos recently, the young entrepreneur said logistics is a business that is broad and with a bright future, adding that it is Nigeria’s next oil. “If we can tap into logistics, we will forget about oil,” he said. “Logistics creates employment and generates revenue for government. If the ports are put in proper shape, if the roads are in proper shape, a lot of revenue would be created. I saw that light in logistics, which was why I decided to go into it,” he explained. Akinlofa went into logistics industry after leaving a paid employment in 2013. He started this business with N100, 000, using 70 percent of the money to register it at the Corporate Affairs Commission (CAC). Left with just N30,000, the entrepreneur endured hard times and worked hard to

woo customers. Five years after, Akinlofa’s firm, based in Lagos, has grown into a multi-million naira entity. Luztow provides logistics and delivery services for Nigerians, serving ecommerce firms. It also clears goods from the ports. “We are still growing. When we started, throughout that year, we did almost nothing in terms of business. We started doing business in 2014. Today, monthly turnover is in millions,” Akinlofa said. “I have always wanted to employ people, to create avenues for people to showcase their potential. There was no way I could do that while in paid employment. So, I took the bull by the horns and tendered my resignation letter. I then registered this company. It was very challenging when I registered the company because capital was not there. I launched out into the deep and started networking, telling people what I could do. Initially, people did not believe me because there were big players in the industry. But as time went on, people started seeing what I could do,” he recalls. The entrepreneur says that one major challenge he www.businessday.ng

faced at the earlier stage of his business was trust. Akinlofa says that Nigerians have issues with trusting others owing to the bad experiences they have had in the past. “It is not easy for someone to entrust you with his or her goods. I didn’t try to convince them to give me, but I showed them what I could do. Some persons trusted me and today, I am happy,” he recalls. The entrepreneur says that he runs his business in a different way. “You can get to me directly. I do same-day delivery

service. Once I pick your order, I deliver it immediately. I don’t do stories. You don’t have to know anybody before you can reach me.” His business is on the social media, and he puts measures in place to protect the integrity of parcels and goods through insurance. “We have insurance policies. We have fire and burglary insurance, among others that cover the goods we collect from our customers,” he says. It is not all rosy for the entrepreneur, given the poor state of link roads to Apapa

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Monday 04 May 2020

BUSINESS DAY

real sector watch

3 takeaways from Guinness Nigeria’s 9-month performance ODINAKA ANUDU

uinness Nigeria, a subsidiary of Diageo plc and leading total beverage alcohol company, has posted a revenue of N96 billion for the nine month ended 31 March 2020. The result shows that the brewer delivered a profit after tax of N1.4 billion. The revenue, however, represents a 5 percent decline from the result reported in the corresponding period of 2019. The profit also reflects a 68 percent decline from the result posted in the corresponding period of 2019. Marketing cost rose by 6 percent, with distribution and administration expenses rising on the back of inflation. “In the three months ended 31 March 2020, Guinness Nigeria’s revenue declined 5 percent compared to same period last year on the back of volume decline driven by the price increases that we took in the quarter and the initial impact of COVID-19,” Baker Magunda, managing director/CEO, Guinness Nigeria Plc said. “Revenue for the year to date continues to be impacted by excise duty increases which prior to February were not covered by price. We remain confident however, that the underlying performance of our main strategic focus brands/categories Guinness, Malta Guinness, RTDs and spirits – remains solid.”

Magunda said he was pleased with the work his team were doing on productivity. He pointed out that despite Nigeria’s inflation rate sitting at 12 percent, cost of sales declined at a faster rate of 7percent compared to revenue, and therefore improved the year-to-date gross margin to 32 percent. He explained that similar productivity initiatives meant that the increases in distribution expenses by 2 percent and the administration expenses by 7 percent were still below inflation. “We also boosted our marketing spend by 6 percent to support our brands. The operating profit declined by N2.1bn. The recent depreciation of the Naira

drove the increase in finance costs by N2.1b year on year, impacting profit delivery,” he further said. He noted that the brewer was impacted in the last half of March by the COVID-19 outbreak, stressing that it had also proven to be an economic crisis significantly impacting most businesses. “As a proud business with 70 years heritage here, we stand with Nigeria by aligning with the efforts of the federal and state governments to stop spread the virus across the country. We have made donations of hand sanitisers as well as provided non-alcoholic drinks to the Nigeria Center for Disease Control (NCDC), the Federal Ministry of Humanitarian Af-

fairs, Disaster Management and Social Development and several states in Nigeria. These materials are to support frontline health workers and security officers as they work tirelessly to curtail the spread of the virus, as well as to provide relief to vulnerable groups in various communities in Nigeria,” he noted. Babatunde Savage, chairman of the board of Guinness Nigeria Plc, said the board was confident that the company’s strategy was sound and that it was making the right investments to ensure long-term competitiveness. “We will continue to support the management in its efforts to build a business that aims to consistently

deliver growth for stakeholders,” he said. “The board, however, notes that the COVID-19 pandemic that has led to nationwide restrictions will continue to have an impact on the operations of the business in the current financial year. Both the board and management are closely monitoring the evolving situation and continue to be agile and take actions to protect the business,” he further said. The performance has reveale d that Niger ian companies are facing cost pressures. The cost of doing business in Nigeria is rising because manufacturers spend so much on generating their own energy and on logistics. The cost of moving

raw materials from Apapa to Ikeja, Guinness Nigeria’s headquarters, has risen by over 40 percent between December 2019 and March 2020 owing to the perennial congestion at Apapa and Tin Can ports. The pressure on cost is not limited to Guinness, but extended to all manufacturers in the country. More so, economists generally say that economic agents respond to incentives. Put in a different way, they also respond to taxes and cost hikes. As pointed out by Magunda, high excise taxes have been the bane of alcohol and tobacco companies recently. In 2018, the Federal Government said brewers would pay 0.35k for per centilitre (Cl) of alcohol in 2019 and 2020. Spirits were to attract N1.50k per Cl in 2018, N1.75k per Cl in 2019 andN2.00 per Cl in 2020. ”Ultimately manufacturers of the affected products will have to consider whether to pass on the full increase, share with consumers or bear the additional cost,” PwC said in its 2017 analysis of the tax. Again, the result reflects the shrinking wallets of the Nigerian consumers. Nigeria is world’s poverty capital, with over 87 million potential consumers living below $1.90. Manufacturers produce in a very high cost environment and then sell to the consumers who are majorly poor. This partly accounts for why most manufacturers are posting poor numbers recently, analysts say.

Local manufacturers to suffer higher production cost amid new exchange rate regime Gbemi Faminu

ocal manufacturers are likely to incur higher cost of production following the federal government’s move to adapt a flexible and unified exchange rate which will be determined by the forces of demand and supply. This move was contained in a letter of intent signed by the Minister of Finance and CBN governor while requesting a $3.4 billion funding from the International Monetary Fund (IMF). The Nigerian government pledged to adopt currency flexibility and acknowledged that this would

help protect dwindling international reserves and avert economic distortions. The IMF has approved the request as an emergency financial assistance for Nigeria under its rapid financing instrument to support the Nigerian government in fighting the pandemic. “We are committed to maintaining this more unified and flexible exchangerate regime, which will operate in a market-determined manner and be allowed to respond to shocks, with the Central Bank of Nigeria only intervening to ‘smooth large FX fluctuations’,” the government stated in a letter contained in the IMF’s staff appraisal of the financing request on www.businessday.ng

April 21st 2020. The Economic Advisory Committee (EAC) of President Muhammadu Buhari asked the I&E window, which currently trades at N387.30/$1, be adopted as the only exchange rate in

Nigeria. While this might present a good opportunity for foreign investors to flood the market and for the government revenue to grow, local manufacturers will be left to bear the brunt as many of them source their

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raw materials with the use of forex. This will further increase the cost of production of these companies and will affect their productivity and prices, thereby reducing chances of being competitive. Furthermore, the cut in global supply chain as well as the ongoing border closure will alter the availability of the necessary raw materials used by the manufacturers. For a sector that is already bedevilled by infrastructural challenges, epileptic power supply, and weak demand, analysts expect that going forward the sector will experience contractions and reduced contribution to the coun@Businessdayng

try’s GDP as these companies incurring higher cost would be unable to pass it to the consumers. The Lagos Chamber of Commerce and Industry In a statement signed by Muda Yusuf, director general, stated that “Many manufacturers and service providers in the country are already experiencing acute shortage of raw materials and intermediate inputs. This has implications for capacity utilization, employment generation [and retention] and adequacy of products’ supply to the domestic market. There is also an implication for inflation.” The FX could be available, but at a cost to importdependent manufacturers.

Monday 04 May 2020

Harvard Business Review

BUSINESS DAY

MONDAYMORNING

Assessing coronavirus’s impact on your business model THOMAS RITTER AND CARSTEN LUND PEDERSEN

hen a crisis like the COVID-19 pandemic hits an organization, its executives need to assess the impact on their business model, both immediately and over the long term. A framework we’ve developed over a decade of teaching can help executives identify the risks and opportunities that the crisis presents. The Four Dimensions of Your Business Model First, assess what the crisis means for customer demand. Will overall demand go up or down? Do you need to consider new delivery channels? Are there any new customer groups to consider? How has the crisis affected your value proposition? For example, in higher education, if campuses need to stay closed for a long time, colleges and universities will need to rethink how they can create value as an online institution and how they differentiate themselves from competitors. Value demonstration describes an organization’s sales and marketing channels. Given the current restrictions on personal interactions and travel, do you need to find new ways to demonstrate value? Finally, an organization’s capabilities are the fuel that drives

the engine, allowing your firm to create value for customers. A crisis may require that you prioritize different capabilities than usual. Supply-chain and production capabilities will be top of mind and more resource intensive than usual in many organizations. Next, think through how potential changes in one dimension can be aligned with the others. A crisis not only challenges the four dimensions of a business model

but also creates opportunities to adjust each of the dimensions and how they relate to one another. How Crisis Projects Can Drive Business-Model Change How can you move from a diagnosis to a response? Before you decide on any significant changes in your business model, think through how the crisis will affect

your existing performance metrics. What kind of earnings or losses will you encounter? How will the stock market judge your organization in the current crisis? Then you need a plan for embracing the opportunities — and managing the damage — that these analyses have revealed. Our business-model mapping tool can help you develop and prioritize a list of projects to invest in as you move through the crisis. One

lesson from previous downturns is that companies that are proactive and growth oriented, even as they shore up their vulnerabilities, will have an edge.

(Thomas Ritter is a professor of market strategy and business development, and Carsten Lund Pedersen is an assistant professor of marketing, at Copenhagen Business School.)

How retailers can reach consumers who aren’t spending — EXPERIMENT WITH OFFERINGS THAT HAVE LONGTERM POTENTIAL. Retailers can use this crisis as an opportunity to experiment with entirely new offerings that could survive the crisis. — PLAN FOR LIFE AFTER COVID-19. While it’s still unclear when sheltering in place will end, you need to be ready to reopen your stores. How will COVID-19 change your customers’ habits in the long run, and what are you doing to get ready for this shift? Marketers must display a sincere desire to watch, listen and learn. However, digital experiences are here to stay.

CHRISTINE MOORMAN AND TORREN MCCARTHY

he global retail industry is experiencing an unprecedented crisis in the wake of COVID-19. Consumers are staying home and tightening their spending as they face uncertainties related to their health, wealth and jobs. This physical and psychological hunkering down is hitting retailers hard. U.S. retail sales dropped a historic 8.7% in March, and are expected to drop at least 20%, according to the National Retail Federation. Where are the opportunities for retail marketers, and how can they minimize losses? — DEEPEN YOUR CUSTOMER INSIGHT: Marketers need to analyze data about their customers’ behaviors and buying habits daily to learn what is changing. What new unmet needs have emerged?

What new markets are emerging for your company? — COVER THE BASICS: Let customers know whether your business is operating and how you are keeping them and your employees safe. Many retailers www.businessday.ng

have sent emails notifying consumers about new safety protocols. — FOCUS ON THE EXPERIENCE: Companies should immediately evaluate their customer journeys and reimagine

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those that could be redesigned for a digital-first or digital-only world. This includes everything from expanding capacity of your offerings or customer service to putting a pause on certain late fees or cancellation fees. @Businessdayng

(Christine Moorman is a senior professor of business administration, and Torren McCarthy is a second-year MBA student, at Duke University’s Fuqua School of Business. Holly Larson contributed to this post.)

Monday 04 May 2020

BUSINESS DAY

cityfile Enugu: Lawmakers insist on community testing for Covid-19 Regis Anukwuoji, Enugu

The Isolation Centre for coronavirus treatment at the Gbagada General Hospital, unveiled by Governor Babajide SanwoOlu, on Friday.

Covid-19: Corpses transported to Ekiti must undergo test, says taskforce Raphael Adeyanju, Ado-Ekiti

he Ekiti State government at weekend ordered compulsory certification of corpses transported to the state in order to determine their medical history. The coordinator of the state Covid 19 Task Force, Bolaji Aluko, announced this in Ado Ekiti while giving an update on the fight against the pandemic. Aluko expressed regrets that some people were still

trying to forcefully enter the state through its borders in spite of prohibition. He said some persons intercepted by security agencies on Thursday at Ido Ile Ekiti were immediately returned to the borders. “Movement of corpses had earlier been banned outright in Ekiti. But because of this lockdown relaxation, corpses will now be allowed to move in and out of Ekiti from next week; every Monday, Wednesday and Friday. “However, corpses enter-

ing Ekiti must henceforth be first certified through registration at the Ministry of Health to know their medical history. This is about our health and no compromise will be tolerated,” he said. Also, the commissioner for health, Mojisola YayaKolade, said that all the patients in isolation centres were stable and responding to treatment. “Another set of blood samples had already been taken from all the patients to ascertain their condition before any of them

can be released because you have to be negative twice before being let out of the isolation centre,” said Yaya-Kolade. The commissioner for environment, Gbenga Agbeyo , said the state had taken delivery of four motorised fumigators donated by the Ooni of Ife, Oba Adeyeye Ogunwusi. Agbeyo said the fumigators would enhance the state’s fumigating capacity to be able to cover the 16 local government areas of the state.

Lagos pays N1.03bn pension to 213 retirees JOSHUA BASSEY

h e L a g o s g overnment has approved N1.030 billion as accrued pension of 213 public service retirees in the state. Folashade Onanuga, the director-general, Lagos State Pension Commission (LASPEC), in a statement made available to the media, said that the commission has released the funds to the Pension Fund Administrators (PFAs).

“To ensure the safety of all the beneficiaries, the retirement bond presentation ceremony stands cancelled due to the Covid-19 pandemic, while all retirement bond certificates for April have been released to the PFAs. “The PFAs will invite the beneficiaries for collection and grant access to their RSAs for the computation of their lump sum and monthly pensions,” she said. According to her, the commission has also embarked on distribution of www.businessday.ng

palliatives to retirees in different locations in the state to cushion the effect of the Covid-19 induced lockdown. She urged the affected retirees to observe all precautionary measures, as advised by the state government and the Nigerian Centre for Disease Control (NCDC) in order to stay free from coronavirus. The DG said that the increased funding rate of accrued pension rights of the total emoluments of active workers from five percent to 10 percent by

government took effect from February. Onanuga explained that following the new pension contribution rate of 10 percent by the state government, the employee contribution rate was now eight percent. According to her, the move is to clear the backlog of outstanding pension obligations and enhance the terminal entitlements of public service retirees. She advised the retirees on the waiting list to be patient as they would also access their benefits.

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nugu House of Assembly committee on health has advocated community testing for Covid-19. The health committee chairman, Sam Ngene made the advocacy when the committee visited ESUT Teaching Hospital, Parklane as part of its oversight function. Ngene said that community testing for the virus had become important owing to high level of transmission being witnessed in other states of the federation. According to him, the state government will do everything possible to ensure that the spread of coronavirus does not escalate further thereby putting pressure on the health sector of the state. The lawmaker, representing Enugu South Urban constituency, advised the management of the health institution to handle Covid-19 infection in line with international best practices. Ngene also urged the Chief Medical Director of

ESUTH to interface with aggrieved members of the Association of Resident Doctors (ARD) currently on strike to resolve their grievances. He, however, warned that the state government would not fold its hand and watch the ARD sabotage its efforts, especially at this period of coronavirus. The Chief Medical Director of the teaching hospital, Hyacinth Onah, said that the facility was part of isolation and treatment centre for cases of coronavirus in the state. Onah said it had employed the services of 34 interim doctors to assist the hospital, since resident doctors were on strike adding that some of them had returned to work after pulling out of the strike. On ventilators, the CMD disclosed that the hospital had four functional ventilators, which had been deployed for the treatment of coronavirus patients. The lawmakers later undertook a tour of the facilities at the hospital, including the treatment and isolation centre.

Power outage: IBEDC begs customers SIKIRAT SHEHU, Ilorin

anagement of Ibadan Electricity Distribution Company (IBEDC) has app eale d to customes in Kulende, Oloje, Alagbado, Zango, Oyun, Eleko, Sobi, and Poly communities of Kwara State to be patient over an outage that occurred recently. Felix Abiodun, the chief technical officer of the company in Kwara, explained that power had been restored to some parts of the communities, adding that the outage was due to a heavy rainstorm that uprooted and damaged over 17 electric poles and cables in that part of the state. ‘’Our team of engineers are working round the

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clock to ensure that electricity supply is restored to all parts of the communities speedily, new poles and cables have also been provided to replace the damaged ones “We have also been carrying the affected communities along through their leaders and various social platforms.” Abio dun, how ever, pleaded with customers to stop assaulting staff as they go about their lawful duties saying, ‘’such acts will no longer be tolerated, henceforth, the full wrath of the law would take its course”. He urged customers to pay their bills and vend promptly to ensure our commitment to provide regular power supply is sustained, whilst they adhere to all Covid -19 safety protocols.

Monday 04 May 2020

BUSINESS DAY

MARKETS INTELLIGENCE

Supported by Asset Management Corporation of Nigeria (AMCON)

Stocks

Currencies

Commodities

Rates + Bonds

Economics

Funds

Week Ahead

Watchlist

Oil majors at the brink of death as combine loss hits $3.06bn BALA AUGIE

il majors across the world are the brink of collapse as the sharp fall in oil demand and crude prices triggered by coronavirus crisis took their toll on their finances. The lockdown and travel ban across the world has sent an arrow through the heart of investors who had betted on the industry at the start of the year before the current acrimonious situation. Combined losses of four largest companies (Royal Dutch Shell, Exxon Mobile Corporation, British Petroleum or BP, ConocoPhillips, and Seplat Develpemt Corporation) stood at $3.06 billion in the first quarter of 2020. That compares with a cumulative profit of $7.23 billion the corresponding period of 2018 when an OPEC + output cut helped propel the price of

the black gold. The coronavirus pandemic that resulted in a 30 percent drop in demand for oil has disrupted the expansion plans of companies who are now forced to cut down on dividend. Brent crude, the international benchmark, fell from about $70 a barrel in early January to an 18-year low below $20 a barrel a few weeks ago. The international benchmark Brent rose 1 per cent to $26.80 a barrel, while US marker West Texas Intermediate climbed 5.5 per cent to $20.00. The WTI price hit a negative territory two ago, as buyers were buying sellers to store their products. However, President Donald Trump seemed to have succeeded in convincing Saudi Arabia and Russia over an output cut that would start this week. The OPEC + allies have to slash global output by 10 percent, which translates to 10 million barrels a day. Some groups in the cartel are mulling another 5 percent cut and the US shale oil producers have

The recent earnings report of companies sent a predawn chill down the spine of investors, which stoked sell-fff as they dumped shares of bellwether firms with alacrity. ExxonMobil, the US oil company posted a loss of $610 million in the first three months of 2020, a sharp reduction from $2.35 billion, its worst results in more than a decade. ExxonMobil’s throughput sales increased by 4.66 percent to $4.06 billion in the period under review while revenue from was up 2.40 percent t0 $5.28 billion as at March 2020. Capital exploration expenditure increased by 3.62 percent to $7.14 billion in the period under review. Royal Dutch Shell, the Anglo Dutch company posted a loss of $24 million as at March 2020, as against a profit of $965 million the previous year. Shell’s cash flow from operating activities excluding working capital movements was $7.4 billion, reflecting lower earnings and higher costof-sales adjustment. ConocoPhillips, the American oil major, posted a loss of $1.70 billion as at March 2019, from a profit of $1.80 billion the previous year.

ConocoPhillips’ cash provided by operating activities was $2.1 billion. Excluding working capital, cash from operations (CFO) was $1.6 billion. The American oil and gas giant ended the quarter with cash, cash equivalents and restricted cash totaling $4.2 billion and short-ter investments of $3.9 billion, equaling more than $8.0 billion in ending cash and short-term investments. British Petroleum otherwise known as BP recorded a loss of $628 million as at March 202o, this compares with a profit of $2.09 billion as at March 2019. Seplat Development Corporation or “Seplat”, the largest indigenous oil and gas firm in Nigeria recorded a loss of $106.55 million as at March 2020, as against $32.66 million the previous year. As a result of the economic crisis brought on by the coronavirus pandemic, the largest oil companies are cutting capital investment while contemporaneously reducing reward to their owners. Royal Dutch Shell cut its dividend for the first time since the second world as the coronavirus has caused a supply gap of over 30 million a barrel across the globe.

Tier 1 Banks grow their Asset base by N2.83trn in Q1 2020

ier 1 banks put on some serious weight during the first 3 months of the year, but it had almost nothing to do us sitting at home for the past one month due to the Great Lockdown. Rather, deep analysis shows that tier 1 banks took advantage of cheap funds in the market to ramp up their liabilities and deposit mobilization to expand their asset base by about N2.83 trillion in the first quarter of 2020. Nigerian banks have recently come into the bad light during the past week after reports showed that the Central Bank had debited up to N1.4 trillion from 5 local banks with

3 out of 5 banks among the Tier 1 banks. In total, it was reported that CBN debited three Tier 1 banks the sum of N766.7 billion for failing to meet up with the 27.5 percent Cash Reserve Ratio (CRR) set by the monetary authority. While losing access to these monies is sad, the tier 1 banks may not be losing sleep over it after a stellar Q1 2020 performance. Interestingly, three Tier 1 banks appear to be joint fastest growing banks by assets as Zenith, First Bank of Nigeria Holdings (FBNH) and UBA all reported about 13 percent growth in total assets in Q1. Zenith saw their asset base grow from N6.3 trillion at year end to N7.13 trillion in Q1 2020, coming within touching distance (about N150 billion less than Access

Bank) of regaining its position as Nigeria’s largest bank by assets. FBNH saw their assets grow from N6.2 trillion in Dec 2019 to N7.02 trillion in Q1 2020 while UBA saw its assets grow from N5.6 trillion to N6.35 trillion as both companies celebrate crossing the N7 trillion asset base and N6 trillion asset base mark for the first time. GTBank also celebrated crossing the N4trillion asset base mark for the first time as its asset base grew around 8 percent from N3.75 trillion to N4.05 trillion in the first three months of the year. Access bank on the other hand could only manage a modest 2 percent asset growth from N7.15 trillion to N7.28 trillion which was enough to help the bank retain its spot as the

SHORT TAKES N312m After a disappointing 2018, Fidson healthcare seems to have regained its mojo as it records an after-tax profit of N312 million in full-year 2019 for the period ended 31 December. Revenue dipped 13.5 percent to N14.06bn from N16.22bn in the same period in 2018. Efficient cost management saw its cost of sales decline 17.35percent to N8.19bn from N9.91bn

5 The stock market declined for the fifth-straight trading session on Friday to end its worst week after CBN’s CRR policy weighed on banking stocks and set off 2020’s longest bear-run. Nigerian equities fell for all five trading sessions last week to close 2.65 percent lower weekon-week, and end January on a very different tempo than it began the month. Bank stocks shed 5.17 percent to push Year-to-date return to 7.46 percent, down from around 10 percent at the beginning of the week, while analysts say the bearish sentiment will likely extend to trading this week. “Next week, we expect bearish pressures on the equities market to remain, as investors continue to selldown on banking counters,” said analysts at Lagos-based Chapel Hill Denham in a note to clients.

N23bn

…Nigeria’s 5 biggest banks post combined net profit of N197.2 billion in Q1 IFEANYI JOHN

P.E

largest bank in Nigeria by assets. Although assets for the Tier 1 banks grew around 10 percent on average, total profit expanded by only 7 percent from N185 billion in Q1 2019 to N197.2 billion in Q1 2020 as most of the banks bottom line were negatively impacted by economic headwinds such as lower market interest rates and rising inflationary pressure. While the next 9 months for banks will certainly be anything but great considering the nosedive in crude oil price and global health pandemic which triggered total lockdowns in Nigeria’s most prosperous cities, the bank managers and shareholders can at least enjoy one good bask in the euphoria of growth before the storm begins

Interswitch Limited has listed its N23bn callable senior unsecured bond with a tenor of seven years at a fixed rate of 15percent, embedding a call option that can only be exercised from the second year, are payable in full at maturity A callable bond is a bond that the issuer may redeem before it reaches the stated maturity date. In essence, a callable bond allows the issuing company to pay off their debt early. According to the company, this is part of its N30bn debt issuance programme through a special purpose vehicle, Interswitch Africa One Plc.

BusinessDay MARKETS INTELLIGENCE Team Lead: BALA AUGIE, IFEANYI JOHN; Graphics: FIFEN FAMOUS

BMI provides in-depth analysis and data on industries, companies, stocks, currencies, fixed income/credit, economics, regulation and factors that influence investor’s decision-making Continues on page 37 Email the BMI team balaaugie@yahoo.co.uk; augiebala@gmail. www.businessday.ng

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Monday 04 May, 2020

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Thursday 30 April, 2020

Top Gainers/Losers as at Thursday 30 April, 2020 LOSERS

GAINERS Company STANBIC CADBURY WAPCO

Opening

Closing

Change

N27.5

N28.5

Company NB

Opening

Closing

Change

N31.05

N30

-1.05

N6.3

N6.9

0.6

BUACEMENT

N33

N32.6

-0.4

ZENITHBANK

N14.7

N14.3

-0.4

GUINNESS

N18.5

N18.4

-0.1

N21.1

N21

-0.1

N11.35

N11.7

0.35

GUARANTY

N18.6

N18.9

0.3

VITAFOAM

N4.25

N4.51

0.26

GUARANTY

ASI (Points) DEALS (Numbers) VOLUME (Numbers)

23,021.01

4,946.00 359,467,419.00

VALUE (N billion)

3.258

MARKET CAP (N Trn)

11.99

Global market indicators UKX:IND FTSE 100 Index 5,901.21GBP -214.04-3.50%

Nikkei 225 20,193.69JPY +422.50+2.14%

S&P 500 Index 2,897.05USD -42.46-1.44%

Deutsche Boerse AG German Stock Index DAX 10,861.64EUR -246.10-2.22%

Generic 1st ‘DM’ Future 24,153.00USD -413.00-1.71%

Shanghai Stock Exchange Composite Index 2,860.08CNY +37.64+1.33%

Fundamentally sound stocks seen enjoying positive patronage on Nigerian Bourse

UBA delivers impressive returns on investment, as shareholders applaud bank’s support in fight against COVID-19

...investors book additional N80bn gain

eading African financial institution, United Bank for Africa Plc (UBA) held its Annual General Meeting virtually by proxy on Wednesday, April 29, 2020 – a first in UBA’s seventyone year history. The meeting, which had in attendance shareholders, management and staff members, together with representatives of relevant regulatory bodies, was held using an Online Meetings Platform, in accordance with Guidelines issued by the Corporate Affairs Commission. Opening the meeting, UBA Group Chairman, Tony O. Elumelu noted this was a very special meeting, held in extraordinary circumstances. It was only right at the outset to express the Group’s deep appreciation to all the health workers across Africa, who are at the forefront of fighting the deadly pandemic. The Group Chairman also commended the Federal and State governments in Nigeria and governments across Africa, for their rapid actions against the threat. He acknowledged the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele for his various initiatives in mobilising

Stories by Iheanyi Nwachukwu

hursday April 30 was indeed another day of positive returns to equity buyers as trading on Nigeria’s Bourse recorded increased patronage in favour of fundamentally sound stocks. The stock market increased by 0.67 percent at the close of trading session. Week-to-date, the market has yielded positive return of 2.45 percent. The 8.08 percent gain seen only in April helped to moderate the record negative return year to date to -14. 24 percent. Again, investors raised bets in shares of MTNN Plc which increased by 4.28percent to N112. Ardova Plc also increased by 10percent to N11.55kobo. Lafarge Africa Plc gained 2.61percent to N11.8kobo, while Access Bank Plc was up by 3.94percent to N6.6kobo.

On the decliners list, Nigerian Breweries Plc led the pack after its share price moved from day open high of N31.05 to N30, losing N1.05 or 3.38percent. The Nigerian Stock Exchange (NSE) All Share Index (ASI) increased to 23,021.01points as

against preceding trading day low of 22,868.40 points, while the value of listed stocks increased by N80billion, from N11.917trillion to N11.997trillion. With the gradual easing of the lockdown imposed by the Federal Government next week, market watch-

ers anticipate a gradual improvement in economic activities and expect a number of fundamentally sound stocks to continue to enjoy positive patronage in the near time. In 4,946 deals, equity investors exchanged 359,467,419 units valued at N3.258billion.

Nigeria, said despite the challenging operating environment, Access Bank Plc did not only record improved results, but also rewarded shareholders with good a dividend that is very timely given the difficulties created by the COVID-19 pandemic. For instance, Nwosu said Access Bank Plc had a good foresight by merging with defunct Diamond Bank Plc, noting that “the professional and seamless manner with which the integration was done should be commended and shareholders appreciate the board and management.” According to him, the future remains very bright for the all shareholders, consideringthe www.businessday.ng

synergy the merger has brought to the Bank and the expertise the management and staff continued to deploy to ensure Access Bank maintain a leading role in the retail banking space. Nwosu also commended leading efforts of Access Bank in the private-sector led Coalition Against COVID-19 (CACOVID), supporting the Federal Government to fight the pandemic. On her part, Bakare said unlike some of its competitors, Access Bank hasrecorded increased profit in the past three years, noting that shareholders have confidence in the board and management to continue to deliver improved performance, going forward.

the private sector to provide support, medical care and palliatives to reduce the effect of the scourge on citizens. Elumelu said “Our commitment to improving lives in Africa is a long-term one, which we do not take lightly, as we assist governments in Africa to curb this pandemic and help sustain employment across the continent. I want to also thank the UBA Board of Directors, who have been responsive in this time of crisis, as the Group donates $14million to assist governments to fight the COVID-19 Pandemic in Nigeria and Africa.” He also thanked executive management and members of staff, as he assured shareholders, that despite the pandemic, UBA had delivered an impressive performance in its just released first quarter results. He also noted that the Group was well prepared for the crisis, having put in place effective measures to ensure that its operations continue smoothly. Elumelu underlined the fact that the Group’s exposure to the oil and gas sector was well within prudential guidelines.

Covid-19: Julius Berger revises corporate action in move to retain cash

Shareholders commend Access Bank’s 2019 performance at AGM held by proxy t was commendation galore at the 31st Annual General Meeting (AGM) of Access Bank Plc held in Lagos as shareholders hailed the Board of Directors, Management and Staff of the Bank for the highly impressive performance for the 2019 financial year. The meeting, which was held by proxy due to the COVID-19 pandemic, had three leaders of various shareholders’ association present. Sunny Nwosu of Independent Shareholders Association of Nigeria (ISAN), Owolabi Peters of Integrated Shareholders Association of Nigeria and Bisi Bakare of Pragmatic Shareholders Association of

... Shareholders ratify N1 total dividend

In his address, Group Managing Director/CEO, Access Bank Plc, Herbert Wigwe,said the Group delivered a 26 percent increase in gross earnings of N666.8billionfrom N528.7billion in 2018, comprising interest in-come growth of 41 percent fromprevious levels to N155.9billion despite declining interest rate environment. “The effects of an enlarged loan book contributed significantly to the interest income growth of N155.9billion (+41 percent y/y), leading to strong bottom-line figures. The neteffect on operating income resulted in strong profit before tax (PBT) of N115.4billion as against N103.2billion in 2018.

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n March 13, 2020 Julius Berger announced a dividend pay-out of N2.75kobo per 50kobo share for the financial year ended December 31, 2019 and a bonus of 1 (one) new share for every existing 5 (five) shares held. The dividend pay-out was based on the strong performance of Julius Berger for the financial year ended December 31, 2019, as was evidenced in the Audited Consolidated Financial Results released to the Market on March 16, 2020. The Board, acting proactively, has decided that it is prudent to withdraw its previously announced intention to recommend the payment of a final cash dividend of N2.75kobo per 50kobo share, and instead recommend to shareholders at the 50th Annual General Meeting scheduled to hold on June 18, @Businessdayng

2020, a final cash dividend payout of N2kobo per 50kobo share. The company said the savings from paying a cash dividend of N2kobo together with the measures taken with respect to operational costs and capex savings, will ensure that more cash will be retained within the business of the Group. The unprecedented and novel COVID-19 global pandemic, and the ensuing lockdown and social restrictions, which is being experienced globally, Nigeria inclusive, is predicted would have operational effects on businesses and governments, and to lead to a global recession. “Nigeria is not be immune from the unfolding global issues, especially when one also takes into consideration the additional crisis in the global Oil Market and expected declining revenues from Crude Oil Sales.

Monday 04 May 2020

BUSINESS DAY

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Monday 04 May, 2020

BUSINESS DAY

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Monday 04 May 2020

BUSINESS DAY

INTERVIEW ‘Economic impact of Covid-19 necessitates urgent collaboration between private, public sectors’ Ngover Ihyembe-Nwankwo is currently the head, coverage at Rand Merchant Bank Nigeria and the chairperson of the Executive Council at WIMBIZ (Women in Management, Business & Public Service) where she is focused on deepening and re-enforcing women’s role as catalyst that elevates the status, and influence of women and their contribution to nation building. In Ngover is deeply passionate about advocacy for Gender Parity and supporting women to achieve their full potential. She holds a Master’s degree in International Management from the University of Exeter and a Bachelor’s Degree in Combined Social Sciences (Politics, Philosophy & Economics) from the University of Durham both in the United Kingdom. She is a Corporate and Institutional Banking Executive with 20 years’ experience in Financial Services across a wide range of functions including, Corporate Relationship Management, Sales, Credit, Transaction Banking, Remedial Account Management and Risk. Prior to joining RMB, she was an Executive Principal with Standard Chartered Bank Nigeria responsible for anchoring the bank’s International Corporates Portfolio and was also previously responsible for structuring and implementing working capital and securities services solutions for Corporate Finance & Capital Markets clients across Standard Chartered Bank’s Africa footprint. In this interview with BusinessDay, she talks about how WIMBIZ plans to provide 5,000 relief packs (non-perishable food, personal care and hygiene items) to vulnerable low-income households in Lagos – the epicentre of the Covid-19 pandemic. Excerpt: What is WIMBIZ COVID-19 Relief Package Project all about? IMBIZ is a non-profit organisation founded in 2001 by 13 phenomenal women and one amazing man with the objective of elevating the status and influence of women and their contribution to nation building through programmes designed to inspire, empower, connect and advocate for women in Business, Management and Public Service. Our founders include; Dr Omobola Johnson (Former Minister of Information and Communication in Nigeria), Bola Adesola (Senior ViceChairman, Africa, Standard Chartered Bank), Ifeyinwa Ighodalo (CEO, DO. 11 Design Limited), among other notable personalities. The core of what WIMBIZ embodies includes; inspiring women to attain leadership positions, advocating for gender parity, educating and empowering women to maximise their potential, creating platforms for mentoring, networking and building value-added business relationships, capacity building for sustainable livelihoods and supporting our communities. In line with the last objective, we launched the WIMBIZ Covid-19 Relief Package Project on Monday, March 30, 2020, with a plan to provide five thousand (5000) relief packs (non-perishable food, personal care and hygiene items) to vulnerable low-income households in Lagos – the epicentre of the Covid-19 pandemic in Nigeria. The COVID-19 virus has evolved from a health issue

to an economic catastrophe due to global economies temporarily shutting down to curtail the spread and impact of the virus. The Economic impact of Covid-19 has been significant necessitating urgent collaboration between private and public sector. In your view, what has been the impact so far of the pandemic on the lives of Nigerians? The current economic situation triggered by the ongoing COVID-19 pandemic has disrupted supply chains and business activities across countries, including Nigeria. To combat this pandemic, general lockdown strategies have been implemented. This has resulted in a decline in economic activity, a dip in oil prices and a reduction in disposable income. The impact on the poorest and most vulnerable segments of the population has been magnified with people who depend on daily wages to fend for their families, feeling the brunt of these restrictions. In response to this situation, a number of institutions and individuals have initiated relief programmes. The role of women in society cannot be over-emphasised. They are known to play an important role in the family and society. Tell us more about the WIMBIZ COVID -19 Relief Package Project. What is the objective of this project and what has it achieved since inception? The WIMBIZ COVID-19 Relief Package Project is an initiative borne out of the challenges associated with the pandemic and the need for collective action to combat the spread of the virus. It quickly became apparent to the WIMBIZ team, that www.businessday.ng

Ngover Ihyembe-Nwankwo

Nigerian women within the low-income bracket would be hit by the impact of the lockdown and they would need support to comply with the government’s lockdown restrictions designed to flatten the curve as well as stop the spread of the COVID-19 virus. Initially, we considered three communities to distribute the relief packs to – Ijeh in Obalende, Idiaraba in Surulere and Mushin. However, due to the scale of the adverse economic impact of the ongoing pandemic and in response to the overwhelming support and feedback from our donors, we increased our relief package distribution target to 10,000 relief packs. In addition, we diversified our geographic focus and extended our donation window to enable us expand our reach. Our relief packages have so far been distributed in these communities across the country: Ijeh, Shomolu, Orile, Aguda, Mushin, Ikorodu, Seriki Ado, Ikeja, LAWMA, Makoko, Oke-Iran-

la Ojo, Yaba, Onikan, Addo, Langbasa, Garki, Gwarimpa, Tungan, Maje, Jikwoyi, Durumi, Bundu, Okrika, Diobu

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Waterside, Bonny, Akinyele, Iddo, Lagelu/Egbeda and Ona-Ara. We leveraged our diverse network of associates and received immense support from members of our Board of Trustees and Executive Council. There was also representation of our secretariat staff led by the Executive Director of WIMBIZ for this well-needed outreach initiative. The collective effort from those within the WIMBIZ organisation resulted in effective execution of this outreach and strengthened our desire to continuously remain catalysts that elevate the status of women as well as promote nation building. Broadly speaking, through our relief packages, we have distributed 11, 919 relief packs, directly impact-

ing over 71,514 Nigerians across 28 communities in 4 states within Nigeria, with donations from 503 cash donors and 18 in-kind donors. Sector demographics covered include healthcare, waste management staff, widows, law enforcement households, internally displaced individuals and an old people’s home. What more can be done by the government, private organisations, and of course WIMBIZ to further tackle this global pandemic? With Nigeria’s population estimated to be close to 200 million and large proportion of our citizens living below the poverty line, the pandemic has been catastrophic. The restriction of movement as part of Government’s efforts to stop the spread of the virus has significantly impacted livelihoods, particularly those that depend on daily cash incomes. More focus is required to identify the vulnerable members of society across the nation and create of safety nets to provide respite. The WIMBIZ COVID-19 Relief Package has assisted (and continues to assist) with supporting some of these households but there is still a lot more to be done to reduce inequality and achieve gender equality. After this, what’s next for WIMBIZ? We continue to focus on growing our network of professional women, delivering value-added programmes, creating differentiated benefits for our associates, advocating for increased female participation at all levels and supporting our communities.

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Monday 04 May 2020

BUSINESS DAY

Thebigread

All Aboard…! Steering Nigeria’s COVID-19 Action Train Continued from back page

begin to implement now. Even with heat, and without migration, this virus has shown that it will spread here. So, we must continue on this journey knowing that this relatively “managed” situation of ours can, spiral out of control very quickly, given our lean resources, if we do not make significant changes as we ease the lockdown. We have been able to slow the spread thus far, but as we begin to move around again, those who have been exposed to the new cases we are recording today, will also start to move about and shed the virus in their droplets – as they speak, cough, sneeze and touch surfaces and currency notes everywhere they go. This is not a prediction of doom; it is an acknowledgement of science, and the realities of how this virus has behaved even on our own shores. Are we prepared to play the game of odds with nearly 200 million lives at close quarters? Another thing to bear in mind, is that in the absence of a treatment or vaccine, COVID-19 will remain with us across the globe for the foreseeable future. Even the bestcase-scenarios for vaccines and treatments put us at least a year to 18 months away. Having a formulation that works is one thing. As we have seen with testing, making enough of it to cover the world is another. We are probably some 2 to 5 years away from being able to treat this virus universally. This is a best-case scenario. This virus is not going away any time soon. It may travel in waves, peak and trough, but in the absence of a vaccine, the outbreaks are here to stay. Quite possibly, by the time a vaccine reaches us, herd immunity will likely have set in. After all, we know that about 60 %to 70% of people who become infected will have mild or no symptoms. That even of those who develop moderate to severe disease, 65% to 75% will live. COVID-19 is not a death sentence, but it spreads easily and rapidly, and disease progression in the vulnerable, moves with a speed that makes the simultaneous treatment of many patients, literally a losing race against time. So the better we get at reducing the number of people who are infected at any one time, the more likely we are to be able to reduce the number of deaths in Nigeria; and the more likely we are to benefit from the greater body of knowledge and treatment protocols that are being developed worldwide. We now know, for example, that the ventilators should be a last resort, as only approximately 20% of people who are put on them will likely make it off. Slowing down the spread also improves our chances of access to drugs. The more we are able to reduce the number of people with severe disease, the more likely we are to have enough medication to go round. As we transition from fully sheltering-in place to restricted interstate travel and reduced intrastate movement, my purpose in writing this article is to warn, like the town criers of old, that our next stop on

the COVID-19 Action Train must be Redesign, not an express ride to Self-Congratulation. This is not over, not by any means! And we cannot allow ourselves to be lulled into a false and dangerous belief that postlockdown means post-COVID-19. This is the time for all of us – leaders in the public and private sector, private citizens, parents, educators, all thinking and sufficiently educated people – to consider the information we have available about this virus, its behavior and management, and prepare as much as we can for the altered reality ahead of us. Our ONLY chance is to actively change the ways in which we live and work, to reduce the spread of this disease. The rest of the world has its hands full; nobody is leaving their own country to come and save us. I had written early last year about the 12 Giant Evils that plague our country. In COVID-19, a powerful cocktail of those – Disease, Squalor, Want and Ignorance – is what we are up against. It will likely pro-

We must review the facilities and supplies we have acquired thus far, and, start to move from emergency interventions to sustainable ones. We ought to apply the monies received from the EU, and IMF for COVID-19 interventions, to implementing a near to medium term healthcare overhaul. Temporary structures need to give way to permanent treatment facilities, with protocols that can be stepped up or down depending on what disease we are managing. Reinventing the wheel is unnecessary; we can start with re-tooling the teaching hospitals. We need to purchase equipment - ventilators are the most talked about - but we also need life support systems, telemedicine facilities to facilitate knowledge sharing. We live in the tropics. COVID-19 or not, we need more infectious disease treatment capabilities. We must not take our eyes off lassa fever, cholera, and the other diseases that were with us before COVID-19 came along, because they have not gone away. We need to

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All of these things can be fast-tracked, not by building new white elephant healthcare projects, but by judiciously applying our limited resources to making whole the abandoned or incomplete facilities located in high-density areas where they will be utilized, COVID-19 or not liferate the already-present evil of Idleness, and spill over into every aspect of our lives, if those who are, by fortune, not already Nigeria’s victims, do not act NOW to bridge the gap. Just as the private sector and private individuals acted swiftly to ensure that emergency facilities were put up, we must continue to act jointly and decisively - hand in hand with government (ahead of government, even) and with one another - to steer our COVID-19 Action train to a desirable destination. I have heard many talk about hoping/praying for the best, and preparing for the worst. We need to go further, and take proactive and extraordinary steps to Redesign our lives and economy for the best because, honestly, the worst will decimate Nigeria. We must do what we can to avert it; it simply cannot be planned for. www.businessday.ng

train and adequately incentivise our health workers, and we need to bring a level of health awareness to our population. All of these things can be fast-tracked, not by building new white elephant healthcare projects, but by judiciously applying our limited resources to making whole the abandoned or incomplete facilities located in high-density areas where they will be utilized, COVID-19 or not. We can continue to upgrade the knowledge of hospital staff, and teach them to recognize disease presentation. We can inject funding into the pharmaceutical and medical equipment industries and start to produce more frequently used drugs/items locally. God knows, we need the jobs, Beyond healthcare infrastructure and supplies, we need to ensure that we are able to prioritise steady power to hospitals and these healthcare manufacturers, particularly during

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healthcare crises. We must have state and national health emergency protocols and triggers. We must plan for the possibility of another, maybe more than one, lockdown. We must keep the conversation with citizens going, so that they are carried along and cooperative, if we need to return to sheltering in place down the line. We must let them know that their behaviour as we return to daytime activity will determine whether or not we can continue to service the economy, and live. We must learn lessons from this first fire drill and avert, not prepare for worse. Ideally, we should have a healthcare reform budget and implementation tracker, alongside our COVID-19 tracker – in plain sight, for all to see. It would be best if we could account for funds received and utilized sums, openly and transparently. It would be great if the public could see in real time, what the designated projects are, and cheer along as they are completed. It would be good if the private sector can see what can be done to bridge funding gaps through cash and in-kind donations. We are told that the funds received in the first round of COVID -19donations will be eligible for tax credits. It would be good if a Healthcare Infrastructure and Refurbishment Investment Tax Credit Scheme could be considered, as an extension of this. But let’s not let the best become the enemy of the good. It would be sufficient if we started simply by upgrading a few of the teaching hospitals and taking over their uncompleted projects. While Healthcare reform addresses treatment, prevention is better, and it is a communal responsibility. We must take what we know about how the disease spreads, and modify the way we live with and in spite of it. Communication campaigns, as fervent as those we see during elections, and as starstudded as the ones we have seen in the last few weeks, are required now for an even nobler purpose. We must help everyday people understand that each of us holds the other’s health in our hands. We have told employers that work can resume, we must also provide clear industry guidelines on how that work should proceed. The guidelines must be practical and pragmatic. They cannot crush the cost structures of the businesses they are designed to protect, but they cannot be so discretionary, that business-owners’ short-cuts lead to workplace outbreaks. We have asked citizens to mask up, we must tell them the masks need to be washed daily, or risk the onslaught of other diseases. We will eventually ask children to return to school; how will we manage disease spread in already crowded classrooms. Masks are uncomfortable, how do we get children to keep them on? What will we do about our dirty cash problem, that was here long before COVID-19? What will our “merrymaking nation” lives look like without parties? How will we ensure that they don’t move indoors, go “underground,” and crowd homes rather than event centers? We must also come to terms with @Businessdayng

some of the deeper implications of this “redesigned” life. Other than large corporates, most businesses cannot afford to pay staff when they are not earning money. Many will not survive. In some cases, the month-long shutdown has already sealed their fates, others will limp along for a little while longer. For traders, dependent on regular aviation traffic to receive goods, their supply chains, lead time, buying costs, everything, will shift. Others have business models that simply cannot survive a “mask and distance” or curfew regime – restaurants, bars, hotels. What will happen to them? What happens to our event centers: will they be re-purposed and converted to other uses? What about the entire economy that is built around our merry-making: catering, cakes, clothing, makeup, musicians, photography, moneychangers, parking “attendants”, what adjustments will they need to make? Are these restrictions here to stay? We must assume that they are, and prepare our people for significant disruptions and adjustments. Because human behavior is elastic, the first hurdle ahead will be getting people to recognize and heed the need to shift. We can expect that people will first attempt to return to the status quo ante, or some variant thereof, and only retreat if they are unsuccessful or suffer harm. We can shrug; after all, the problems will touch everyone. Why should some of us take Panadol for everybody’s headache? The answer is “because we can”. Because we can put these newly unemployed people to work in a redesigned economy. Because we can invest in local production, and decrease our dependency on imports. Because we can do the unfashionable thing and finally shut our doors to anything but progress, without looking like fascists. Because we can find and weave together the silver linings in this haze of dark clouds into the fabric of a new society. Because we can ride the COVID Action Train to a different, better Nigeria. Because portfolio investors parading as FDI will flee, but if we, the owners of the economy, do the right things now, a path can be created towards welcoming real growth capital when the world is restored. And, frankly, because the alternative will engulf us all. Because if working parents lose their livelihoods, children will be pulled out of school, and ignorance will increase. Because this delicate balance of lives vs. livelihoods can only be managed if those who can join hands to create safe livelihoods for those whose ability to eek out an existence must be sacrificed for us all to live. Because hungry people will eventually take to the streets (the threat of this was palpable over the course of this lockdown), when opportunities to make an honest living suddenly disappeared. And because, in the new “balaclava nation” that we will occupy when we all “mask up,” faces will be obscured and only eyes – desperate eyes – will be last thing we see before the curtains fall. God forbid we let it come to that.

Monday 04 May 2020

BUSINESS DAY

abujacitybusiness Comprehensive coverage of Nation’s capital

FCTA deploys PPE to 239 primary health centers James Kwen, Abuja

he Federal Capital Territory Administration (FCTA) has deployed assorted Personal Protective Equipment (PPE) to health workers in the 239 primary healthcare centres across the territory to safeguard health workers in the front line of response to Covid-19 pandemic. This is just as the FCTA Health and Human Services Secretariat declared Area Councils as the battle ground for the fight against the dreaded Covid-19 pandemic in the nation’s capital. Acting Secretary, FCTA Health and Human Services Secretariat, Mohammed Kawu who made the declaration during a presentation of protective equipment to

the management of primary healthcare centres in Abuja, also identified supply of protective equipment as key in the fight against Covid-19. Kawu, commended spirited Nigerians and corporate organisations for their support since the outbreak of Covid-19 in the FCT, noting that such display of corporate social responsibility has aided the FCT Administration tremendously in the battle against the pandemic. Receiving the items on behalf of FCT Primary Healthcare Centres, the Acting Executive Secretary, Iwot Ndaeyo, commended the Health Secretariat for coming to the aid of the primary healthcare centres, just as he tasked primary healthcare workers to rise to the challenge posed by the Covid-19 pandemic.

Abuja Chamber reschedules 2020 Halal Expo Nigeria in October Harrison Edeh, Abuja

he Abuja Chamber of Commerce and Industr y (ACCI) has rescheduled its planned Halal Expo Nigeria 2020 from its original date of 8th- 10th of June, 2020 to 13th15th October, 2020. This difficult decision, according to the President of the Chamber, Adetokunbo Kayode, was reached after extensive consultations with the industry on the effect of the Covid-19 outbreak on travel all across the globe, and the overall impact it would have on the event. In a statement issued by the President which was made available to newsmen in Abuja, the chamber said, as organisers of the Halal Expo Nigeria 2020 they have taken into consideration the need for safety and safe guarding the health

and well being of its sponsors, exhibitors, and visitors as top priority, as well as providing an optimum environment to conduct businesses. “Our focus is to provide our Exhibitors, Conference Organisers, Media partners and registered visitors with the support they require as result of the decision. “As we well know, this pandemic is being managed by the Ministry of Health, The Centres for Disease Control, and various other ministries under the presidential Committee on COVID – 19. “We shall continue to work in partnership with all the relevant Government Authorities and Agencies and take the necessary measures in accordance to the latest Advisories published by the Ministry of Health and the Ministry of Trade, Industry and Commerce.

Benue to set up Infectious Disease & Control Centre Benjamin Agesan, Makurdi

he Benue State Government is to establish a Centre for Emerging Infectious and Tropical Diseases Intelligence and Management in the state. The centre is to be domiciled in the College of Health Sciences of Benue State University, Makurdi. This is coming on the heels of the raging global Coronavirus pandemic which is an infectious disease and other related diseases. Governor Samuel Ortom made this known in Makurdi, while receiving a proposal from the Provost, College of Health Sciences, Benue State University, Linus Saalu on the need to kick start the project.

Ortom who expressed happiness at the proposal, said the establishment of the centre is timely and would help in tackling the rampant cases of diseases in the state. He hinted that when the institute comes into effect, it would help in repositioning the health sub-sector in the state. According to the Governor, “this will be a plus and a milestone for the health subsector, not just in Benue State but the entire country.” The Governor set up a committee headed by the Benue state Commissioner for Health, Sunday Ongbabo to look at the proposal and fine-tune the key areas in a bid to fast-track the kick off of the institution. www.businessday.ng

Covid-19: FCTA asks Abuja residents to report substandard palliatives James Kwen, Abuja

he Federal Capital Territory Administration (FCTA) has urged Abuja residents, especially vulnerable people not to hesitate to report to the Administration upon receiving palliative items below required standard for such to be replaced. FCT Minister of State, Ramatu Aliyu who made the call during an inspection of palliative items for some wards in the Abuja Municipal Area Council (AMAC), explained that the Administration got supplies from different products that could be

proned to production error. Aliyu who was represented by her Senior Special Assistant on Administration and Strategy, Muhammad Usman, disclosed that each of the four wards would be receiving 3000 bags of rice and 3000 bags of condiments. The Minister’s representative also charged Councilliors representing each ward to be transparent by ensuring that the items get to the individuals that they are targeted at. “We have inspected two trucks randomly, one containing 3000 bags of condiments meant for Kubusa and this one contains 3000 bags of 5kg rice meant for

Garki. There are 8 trucks here ready for distribution. Four trucks of rice, and four trucks of condiments. Two trucks for each ward. “I want to put it on record that these materials were brought together by major suppliers, but as in every production process, you cannot guaranty that each and everyone of them will be problem free. As we have observed briefly, if you find any material unfit for consumption, you are at liberty to notify the chairman and such material will be replaced at the expense of the supplier,” Aliyu stated. She reiterated that the Internally Displaced Persons (IDPs) and People

Living with Disabilities (PLWD) are the responsibility of the administration, while assuring that arrangements are on ground for the second phase of the palliative distribution. In his remarks, Chairman of Abuja Municipal Area Council, Adamu Candido, thanked the FCTA for the successful distribution of palliative items in some wards so far, stressing that the success recorded in these wards was above 80 percent. Candido charged Councilliors in other wards to scale-up the performance of previous distributions, adding that there would be reward for excellent performance.

FRUIT MARKET: The cost of lockdown in order to prevent the spread of coronavirus (Covid-19) and stay safe make some fruits presh and Dakuwa fruits market experience low turnout of buyer as the price of fruits shut up in order to cover Pic by Tunde Adeniyi up the lost of about 15%, even when the lockdown was relax in Abuja.

Troops destroy terrorists’ facilities, kill several in Borno Godsgift Onyedinefu, Abuja

he Nigerian military said it’s Air Task Force of Operation Lafiya Dole, has killed several Boko Haram Terrorists and destroyed some of their logistics facilities at Parisu in the Sambisa Forest area of Borno State. John Enenche, Coordinator, Defence Media Operations (DMO), who disclosed this in a statement in Abuja, explained that the Air Strike was conducted 30 April after intelligence reports revealed that the terrorists had resumed use of the settlement as a staging area to launch attacks against nearby troops’ lo-

cations. “Recent aerial surveillance missions had also shown significant terrorist activities in the area whilst identifying some compounds housing the fighters and their logistics items,” Enenche said. “Consequently, the Air Task Force dispatched its fighter jets to attack the location. The Nigerian Air Force (NAF) jets, while taking turns to engage the target area, scored accurate bomb and rocket strikes, resulting in the destruction of some of the structures as well as the killing of several terrorists,” he added. The Coordinator also disclosed that troops of Sector 1 Operation Lafiya Dole,

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engaged in ongoing clearance operations in parts of the North East eliminated 11 Boko Haram terrorists while two surrendered. T h i s, h e s a i d w a s achieved after seven days of sustained engagement against the terrorists hibernating within its own Area of Operation in the theatre. The Coordinator Defence Media Operations while detailing the efforts of the troops within the period of operations sadly confirmed that a soldier died and another was injured during the entire operations. He also stated that due to the ongoing offensive action within the Sector Area of Operations on 23 April 2020, two members of @Businessdayng

the Boko Haram terrorists came out from Bula Bello and Yerimari Gana and surrendered to the troops of 21 SAB Garrison deployed at Bama. According to him, the two surrendered terrorists were handed over to 21SAB Military Intelligence Regiment and that “during preliminary investigation, they revealed that the sustained military operations by land and air made them to surrender”. Enenche assured that the Armed Forces of Nigeria will continue to sustain the offensive against the enemies of the Country, until peace and normalcy are restored in all parts of Nigeria.

Monday 04 May 2020

BUSINESS DAY

news

Lagos streamlines guidelines on easing of Covid-19 lockdown ...Food, non-food markets to open 3 days a week ... public transport now 6am to 7pm Joshua Bassey

he Lagos State government on Sunday streamlined the guidelines on gradual easing of the Covid-19 lockdown as they relate to markets, offices, restaurants and public transportation. The state governor, Babajide Sanwo-Olu, who addressed journalists at State House, Marina, said food markets would be allowed to open on Tuesdays, Thursdays and Saturdays, while non-food markets would open on Mondays, Wednesdays and Fridays, all between the hours of 9am and 3pm. Restaurants and eateries, however, have their operational hours extended from 9am to 7pm to enable Muslim faithful observing the Ramadan

buy food to break their fast in the evening. But they are only permitted to serve takeaways as eat-in would not be allowed. Sanwo-Olu reiterated the earlier guidelines as they affect business and corporate offices, including banks. He maintained they were to open by 9am and close 3pm every working day for the next one to two weeks when the government hoped to review the relaxation directives based on new developments as they relate to the spike in the number of positive coronavirus cases being recorded in the state. Offices and the corporate world, he stressed, must not exceed 60 percent of their work force during this period, just as he also appealed to them to make adequate transportation arrangements for their staff, to reduce the risk of contracting

the disease. Banks, he added, must regularly disinfect their Automated Teller Machines (ATMs) The governor also directed that public transportation would run from 6am to 7pm every day pending a review in one to two weeksâ&#x20AC;&#x2122; time. While the state secretariat and other public offices would open on Monday, May 4 to public servants on grade level 14 and above, local government areas and local council development areas (LCDAs), religious and recreational centres, schools and hotels would remain closed except 15 other hotels being used for quarantine purposes by the government. The said more isolation centres, including private homes are being made available to accommodate more patients as more cases are recorded in the state.

WFP, UNICEF seek $600m to support 10m children in fragile countries Cynthia Egboboh, Abuja

s the COVID-19 crisis pushes up levels of hunger among the poor worldwide, the World Food Programme (WFP) and United Nations Chil-

dren Fund (UNICEF) are urging national governments to prevent devastating nutrition and health consequences for the 370 million children missing out on school meals amid school closures. WFP, UNICEF in a joint press statement weekend, are appeal-

ing for $600 million to support 10 million children in 30 low-income or fragile countries in line with the UNESCO-led Global Education Coalition, a global push to ensure children keep learning despite the disruptions caused by COVID-19.

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Monday 04 May 2020

BUSINESS DAY

news

Fear grips Kano as dying spree continues Adeola Ajakaiye

Nnamdi Anyaehie, chief of staff, receiving the 1000 bags of 5kg rice on behalf of the Imo State governor, from Chinedu Anyanwu, representative of FCMB, in support to Imo State government in providing palliatives to its citizens following the outbreak of coronavirus pandemic.

Controversy trails proposed Infectious Diseases Bill Innocent Odoh, Solomon Ayado, James Kwen & Godsgift Onyedinefu, Abuja

he proposed Infectious Diseases Control Bill aimed at addressing the rampaging COVID-19 and other infectious diseases is generating a lot of outcry from Nigerians. The bill has been called dictatorial and authoritarian as it hands significant powers to the director general of the Nigerian Centre for Disease Control (NCDC). The Bill, allegedly plagiarised from the 1977 Infectious Diseases Control Act of Singapore and sponsored by the speaker of the House of Representatives, Femi Gbajabiamila, seeks to repeal the Quarantine Act. The Bill gives sweeping arbitrary powers to the DirectorGeneral of the NCDC. From full charge of its administration to the notification of prescribed infectious diseases, surveillance, medical examination and treatment, post-mortem examination, destruction and disposal of infected

animals, food and water, isolation of certain persons, prohibition or restriction of meetings, trade or business, gatherings and public entertainments as well as control of occupiers of buildings. Lawmakers and experts who oppose the Bill argue that the proposed law gives too many powers to the NCDC in the management of infectious diseases in the country. A lawyer and senior lecturer with Baze University, Abuja, Sam Amadi who strongly opposes the proposed bill said it could be a good thing, but coming at the wrong time, cautioning for the need to “make haste slowly.” Speaking to BusinessDay on Friday, Amadi added that the major challenge now is to utilise existing laws to control the pandemic. The former Chairman of the Nigeria Electricity Regula-

...critics say document needs ‘thinking through’ tory Commission (NERC) said “in the short to medium term, the problem of managing the pandemic and other pandemics is not mainly the weakness of the legal regime. It’s actually the weakness of health management infrastructure. So this is not a priority at this time. “It’s actually a distraction from the focus and traction we expect at this period of time. Again, the provisions are controversial and require quality cost-benefit analysis that our National Assembly at this point lacks. We make laws in a hurry without serious consideration based on any serious policy analysis. On the allegation that the proposed bill was plagiarised Amadi said, “we should not assume that what works in Lee Kuan Yew’s Singapore will work in Nigeria. That’s lazy thinking. For one Singapore is not a constitutional

democracy like Nigeria so the use of power by agencies and individuals will markedly differ”. An Abuja-based constitutional lawyer, Desmond Wendeh, said, “I read the proposed Bill and as many people have viewed, it has semblance with Singapore’s Infectious Diseases Act of 1976. Remember that the Act was introduced under the dictatorship of Lee Kuan Yew and so, bringing it to bear on Nigerians means the same thing. “For instance, section 48 of the Bill proposes that the directorgeneral of the NCDC may by order direct unvaccinated persons to undergo vaccination or other prophylaxis within such period as may be specified in the order. “This can indicate clearly the contravention of the Constitution especially on the fundamental freedom of the citizenry as well stipulated in chapter 4 of the constitution.

Oil/gas firms help Delta wage war against COVID-19 Delta to readjust 2020 budget, remodels priorities Mercy Enoch, Asaba

cluster of oil and gas firms operating in Delta State has supported the state government in waging war against Coronavirus (COVID-19) pandemic in the state. The firms gave their support by donating Nissan NP 300 (Hard Body car), cartons of hand sanitizers, hand gloves, nose masks to the government. They also donated assorted foodstuffs including 270 bags of 50kg rice, 135 cartons of groundnut oil, 270 cartons of noodles and 180 cartons of Tin tomatoes to the state and local governments and their host communities. The cluster of oil and gas companies are Midwestern, Platform, Pillar, Energia, Pandora, Chorus, SunTrust, and NewCross, all limited. The firms’ team leader, William Eboh, who made the donations at the New Central Hospital, Asaba, last Thursday, said their contributions would assist the state government wage war and defeat the COVID-19. He described the virus as bad but noted that the issue of testing, tracing to recovery

should not be taken lightly even as he appealed for Personal Protection Equipment to be made available for health workers, those at the frontlines and others. The fact that the COVID-19 is not a death sentence does not mean it is not deadly if precautions are not followed, especially when the state government was magnanimous enough to soften the lockdown that allows free movements once again, he said. While saying that reason for their assistance was that government could not fight alone, he disclosed that they had even extended the gesture to the LGAs and host communities. Receiving the items, Austin Obidi, a medical doctor and chairman, Hospital Management Board, thanked the donors while he still requested for testing kits, which he said were not enough in the state. Obidi pointed out that the state government had trained many health workers, established centres in many parts of the state and equipped them in order to curtail the spread of the virus, and ensure the management of those isolation centres. www.businessday.ng

to support daily income earners, agric sector Mercy Enoch, Asaba

s Delta State government plans to readjust its 2020 budget, the state governor, Ifeanyi Okowa, has pledged to do the needful, to remodel priorities in the budget in order to accommodate daily income earners and further encourage agricultural sector. Governor Okowa said the advent of Coronavirus (Covid-19) pandemic and its socioeconomic imbalances required deliberate social investments that would directly or indirectly assist vulnerable citizens to survive these trying periods. Thus, in a bid to assist daily income earners and further boost the agricultural sector for steady food supplies, the state would unveil new economic blueprint that would drastically reduce poverty and hunger in this pandemic era, the governor said. The governor, who spoke as special guest at a public affairs talk show aired on Channels TV, disclosed that in order to achieve the noble objectives, “the state economic team under his supervision would ensure that social investment becomes one of the

focal points of the readjusted 2020 budget.” He said it would be such that those captured in the programme do not have to suffer unnecessarily as we collectively fight against the spread of Covid-19. Reacting to the governor’s socio-economic remodelling plans, his executive assistant on communications, Fred Latimore Oghenesivbe, said “government deliberate efforts to augment the informal sector, as we navigate through Covid-19 pandemic, goes to show that this administration is focused on the welfare and wellbeing of Deltans”. According to Oghenesivbe, the state government’s readjustment plan is the way forward, so as to effectively and efficiently cushion the effects of partial state lockdown, tame acute poverty and hunger choking daily income earners in the state. “The implantation strategies of assistance to vulnerable citizens shall be worked out and announced by government at the right time, such that would meet public expectations and may follow certain criteria”, he said.

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s the residents of the c o m m e rc i a l c i t y o f Kano await the result of the oral autopsy to determine the cause of the rising incidence of deaths in the state, a high traditional ruler, politicians and other senior citizens have also been reported dead. T h o s e w h o hav e b e e n confirmed dead within the last two days in the state, are: Emir of Rano, Tafida Abubakar Ila, one of the four new emirs appointed by Governor Abdullahi Umar Ganduje, prior to the dethronement of Muhammadu Sanusi. Sources close to the family of the late monarch confirmed to BusinessDay that the 80 years old ruler died in the late hour of Saturday in a private hospital in Kano, after battling diabetes for years. Also confirmed dead was, Professor Isa Hashim, a traditional titleholder, Jarman Kano, who was one of the foremost members of the Kano Emirate Council. The 85 years old professor, who lectured for several years at the department of Political Science at Bayero University, Kano (BUK), died in the early hour of Sunday, due to undisclosed ailment. His Islamic burial rites were performed at the Emir’s palace in the metropolis, about 11am on Sunday, before he was buried. In the same vein, a one-

time member of the House of Representatives, Ubale Jakada Kiru, had also been reported dead, he passed away Sunday morning, and had since been buried. M e a n w h i l e, G ov e r n o r Ganduje had condoled with Rano Emirate, families of late Emir of Rano, Tafida Abubakar Ila (Autan Bawo), the people of the state and the country, over the Emir’s passage. “It is with great shock and deep sorrow that I am, on behalf of the government and people of Kano State, commiserating with the Rano Emirate and the families of the late Emir of Rano, Alhaji Tafida Abubakar Ila (Autan Bawo). It is indeed a great loss not only to the state, but to the country in general,” Ganduje said. “During his life time he was an embodiment of humility, discipline, greatness and human concern. He was a great Emir whose concern and advices contributed immensely to the development of the state. “Kano state lost an illustrious son, whose patriotism means a lot for the development of the state and the country in general. He always discussed with me, issues relating to the development of his Emirate, Rano and the state as a whole” the governor said. “May Allah accept all his good deeds and forgive all his shortcomings. May Allah give us the fortitude to bear the great loss,” he prayed.

COVID-19: Children exposed to child labour, sexual exploitation, NGO warns HARRISON EDEH, Abuja

ave the Children International Nigeria, a nongovernmental organisation (NGO), has warned that the COVID-19 pandemic will push many poor households to turn to desperate measures to survive, and children could face increased risk of child labour, sexual exploitation or child marriage, as families struggle to survive. The organisation expresses concerns that the socio-economic impact of the pandemic could turn into a serious Child Rights’ crisis in Nigeria, as hundreds of thousands of the most vulnerable children could be exposed to a dangerous mix of extreme poverty, malnutrition and hunger as a result of the virus, if actionable measures are not taken. Save the Children therefore urged the authorities in Nigeria to scale up social protection measures such as provision of cash and food assistance for the most vulnerable children and families, to urgently mitigate the impact of the COVID-19 pandemic in the country. “As the numbers of COVID-19 cases rise in Nigeria to 782, and the virus is spreading to different States, children are seriously affected when parents and caregivers are infected by the virus and taken away for care. We are working closely with the government to support efforts to contain the virus and keep children safe and protected amid the pandemic,” Mercy Gichuhi, the acting coun@Businessdayng

try director, Save the Children International Nigeria, said in a statement last week. “We must act now and rapidly scale up support for children whose families’ income is insecure and live in fragile communities. There is a need for increased protection for children, especially girls, displaced children, and other vulnerable groups. Our collective efforts and sustainable actions in responding to the pandemic should ensure that no child is left behind, vulnerable or unprotected,” Gichuhi said. Ibrahim Maharazu, speaker, Katsina State Children’s Parliament, decried that the pandemic was threatening children’s right to participation, protection, education and healthy life. “I can see a possible increase in child abuse as children from poor households might go to rich people in the community for food. They may be emotionally, physically or sexually exploited in exchange for food and financial support. “There are people who take advantage of the poor families and the pandemic. This is very bad for children and it can have a long lasting impact on them. The government should hold such perpetrators accountable,” he said. Maryam Ahmed, youth ambassador, Save the Children International Nigeria, stressed that it was important that children and other marginalised groups were not excluded in Covid-19 response activities. “They should be safe, and also consulted on proper education and protection measures to be in place,” Ahmed said.

Monday 04 May 2020

BUSINESS DAY

In Association With

The 90% economy

A Balkan The kids betrayal are not all right

Life after lockdowns

When easing lockdowns, governments should open schools first

It will be hard in ways that are difficult to imagine today Editor’s note: The Economist is making some of its most important coverage of the covid-19 pandemic freely available to readers of The Economist Today, our daily newsletter. To receive it, register here. For our coronavirus tracker and more coverage, see our hub

N MANY THINGS 90% is just fine; in an economy it is miserable, and China shows why. The country started to end its lockdown in February. Factories are busy and the streets are no longer empty. The result is the 90% economy. It is better than a severe lockdown, but it is far from normal. The missing bits include large chunks of everyday life. Rides on the metro and on domestic flights are down by a third. Discretionary consumer spending, on such things as restaurants, has fallen by 40% and hotel stays are a third of normal. People are weighed down by financial hardship and the fear of a second wave of covid-19. Bankruptcies are rising and unemployment, one broker has said, is three times the official level, at around 20%. If the post-lockdown rich world suffers its own brand of the 90% economy, life will be hard—at least until a vaccine or a treatment is found (see Briefing). A plunge in GDP in America of anything like 10% would be the largest since the second world war. The more suffering covid-19 causes, the more profound and enduring its economic, social and political effects are likely to be. How lockdowns ease will itself affect the scale of economic damage. For instance, the cost-benefit calculus points towards opening schools first (see article). But, however sensibly restrictions are eased, powerful forces will hold economies back. For a start, leaving lockdown is a process, not an event. Even when the worst is over, cases ebb slowly. A month after Italy’s deaths peaked at about 900 a day, the toll is still over 300. With the virus still present, some social distancing is bound to stay. A second reason is uncertainty.

After lockdowns cease, much about the disease will remain unknown, including the chances of a second peak, whether immunity endures and the prospects for a vaccine or a cure. This inhibits those who fear the disease. Even as some states ease social distancing, a third of Americans say they would be uncomfortable visiting a mall. When Germany allowed small shops to open last week customers stayed away. Danes under lockdown cut household spending on services, such as travel and entertainment, by 80%. Danish economists reckon that people in next-door Sweden, which didn’t lock down, cut spending by about as much. Many businesses will emerge from lockdown short of money, with strained balance-sheets and facing weak demand. In a survey for Goldman Sachs, almost two-thirds of American small-business owners said that their cash would run out in under three months. In Britain the share of commercial tenants who have fallen behind on their rent has risen by 30 percentage points. This week the boss of Boeing warned that air travel would not match the level of 2019 for two or three years. Investment, which accounts for roughly a quarter of GDP, will fall, not just to conserve cash, but also because risk cannot be priced (one reason to think a recent stockmarket rally has weak foundations). Struggling firms will deepen people’s financial worries. Over a third of respondents in America told Pew Research that, if they lost

their main source of income, their savings, new borrowings or the sale of assets would sustain them for no more than three months. Because the hardest-hit industries in the 90% economy employ a lot of low-wage people, joblessness will be high and casual work hard to come by. Even now in Europe’s five largest economies, over 30m workers, a fifth of the labour force, are in special schemes where the state pays their wages. These can be generous, but nobody knows how long they will last. The economy will also suffer from scarring. Firms that adapt to covid-19 by cutting costs and finding new ways of working may increase productivity. But if people mix less after lockdowns lift or if they are idle for months on end, they will become detached from professional networks and may lose skills. America’s unemployed could face a lost decade (see Free exchange). Government schemes will save businesses in the short term, which is welcome. But those designed to preserve jobs risk eventually creating zombie firms that neither thrive nor go bankrupt, slowing the recycling of labour and capital. The longer the world has to endure a 90% economy, the less likely it is to snap back after the pandemic. After the Spanish flu a century ago and SARS almost two decades ago, the overwhelming desire was for life to return to normal. But neither had such a large economic effect as covid-19, and citizens’ expectations of government were more modest in

1918 than they are today. A deep, long recession will stoke anger, because the pandemic has held up an unflattering mirror to rich societies. Ill-run care homes for the elderly, high rates of death among minorities, the extra demands holding back working women and, especially in America, health care that is hard to reach for many, will all lead to calls for reform. So might the realisation that an unfair burden has fallen on ordinary people. Americans earning less than $20,000 a year are twice as likely to have lost their job to covid-19 as someone earning over $80,000. Much will depend on how fast they are rehired. The popular demand for change could radicalise politics faster than it did after the financial crisis in 2007-09. The task for those who believe in open markets and limited government is to ensure that this energy is channelled towards the right sort of change. If the pandemic lowers the barrier to reform it will offer a rare chance to recast the social contract to favour those who have been shut out, and to peg back those who today enjoy entrenched privileges through the tax system, education and regulation. Perhaps the pandemic will enhance a sense of national and global solidarity. Perhaps the success of countries like Germany and Taiwan that have dealt with the disease thanks to strong institutions will contrast with places where populist showmen have spent their time theatrically deriding expertise. Yet that may prove to be wishful thinking. In the next 18 months everyone with an agenda will argue that the pandemic proves their point. After 2007-09 politicians failed to deal with the grievances of ordinary people and the demand for change led to a surge in populism. The 90% economy threatens even greater suffering. The anger it creates may end up feeding protectionism, xenophobia and government interference on a scale not seen in decades. If, like this newspaper, that is an outcome you would reject, it is time to start arguing for something better.

The costs of keeping them closed are too high

OVID-19 HAS shut the world’s schools. Three in four children live in countries where all classrooms are closed. The disruption is unprecedented. Unless it ends soon, its effect on young minds could be devastating. During some epidemics keeping children at home is wise; they are efficient spreaders of diseases such as seasonal flu. However, they appear to be less prone to catching and passing on covid-19. Closing schools may bring some benefit in slowing the spread of the disease, but less than other measures. Against this are stacked the heavy costs to children’s development, to their parents and to the economy (see article).

A few countries, such as Denmark, are gradually reopening schools. Others, including Italy, say they will not do so until the autumn. In America, despite recent calls from President Donald Trump for schools to open, most states plan to keep their classrooms closed for the rest of the academic year—and possibly longer. That is a mistake. As countries ease social distancing, schools should be among the first places to unlock. Consider the costs of barring children from the classroom. No amount of helicopter parenting or videoconferencing can replace real-life teachers, or the social skills acquired in the playground. Even in the countries best prepared for e-learning, such as South Korea, virtual school is less good than the real thing. Poorer children suffer most. Zoom lessons are little use if your home lacks good Wi-Fi, or if you have to fight with three siblings over a single phone. And whereas richer families often include well-educated parents who prod their offspring to do their homework and help when they get stuck, poorer families may not. Continues on page 35

Monday 04 May 2020

BUSINESS DAY

In Association With

Leaders and misleaders

Some African politicians risk spreading covid through quackery

When easing lockdowns, governments should open schools first

Most follow the science, but some have turned to herbs or prayer

Continued from page 34

Editor’s note: The Economist is making some of its most important coverage of the covid-19 pandemic freely available to readers of The Economist Today, our daily newsletter. To receive it, register here. For our coronavirus tracker and more coverage, see our hub

ANY AFRICAN politicians are fighting covid-19 with tools prescribed by science. South Africa’s president, Cyril Ramaphosa, surrounds himself with top-notch boffins. Salim Abdool Karim, the government’s chief adviser on the pandemic, is often likened to Anthony Fauci, America’s voice of reason on the subject. George Weah, Liberia’s president, is trying hard to disseminate public-health tips in ways that are both easy to understand and memorable. The former football star has released a ballad about covid-19, featuring medically accurate lyrics such as: “People catch the virus when they touch their infected hands to their mouth, nose or eyes.” In the accompanying video, Mr Weah dresses in sepulchral white and sways to a funky beat. In a country where many people are illiterate, setting medical advice to music makes a lot of sense.

Some other Big Men’s approaches do not. Andry Rajoelina (pictured), Madagascar’s president, says the island of 26m people has a herbal remedy that will “change the course of history”. Covid-organics, as the herbal potion is known, is meant to cure covid-19. But scientists doubt it. “It’s likely that it could actually harm the health of the population,” says Marcel Razanamparany, the spoilsport president of the country’s Academy of Medicine. In Guinea, President Alpha Condé recommends drinking hot water and inhaling menthol. Nairobi’s governor, Mike Sonko, has distrib-

uted miniature bottles of Hennessy, or as he calls it, “throat sanitiser”. (Hennessy has felt obliged to deny that its brandy has antiviral qualities.) Some leaders trust in God to stop the virus. John Magufuli of Tanzania insists that “we are not closing places of worship. That’s where there is true healing.” Burundi needs no lockdown “because it is a country that has put God first,” says a spokesman for the president, Pierre Nkurunziza. On the plus side, no African president has recommended injections of disinfectant or suggested

that scientists investigate whether doses of ultraviolet light inside the body can kill the virus. But bad advice from clueless Big Men may still cost lives. It will also undermine commerce. On April 29th it was reported that the implementation of the African Continental Free Trade Agreement was being postponed from the scheduled date of July 1st. If some countries fail to control the virus there could be further delays. That would then make it harder for African countries to sell goods to one another—including not only herbal remedies but also useful products.

State finances

Congress, not the Fed, should bail out America’s state and local governments The federal government can provide disaster relief without underwriting profligacy

OR MOST governments the pandemic is expensive. For America’s states, counties and cities, which provide the bulk of the country’s basic government services, it is a budgetary cataclysm. Lockdowns are depriving them of tax revenues just as they must spend more on public health, threatening budget shortfalls of more than one-quarter of annual revenues (see article). Investors have been dumping their bonds, making it harder to borrow. And many states are in any case required by their constitution or by law to balance their budgets, or forbidden from borrowing at all. As a result many have been drawing up plans to slash spending and lay off workers just when their services are in high demand and the economy is shrinking. The states do have some cash stashed away for a rainy day. They have built up funds worth 8% of their annual routine spending, on average. Yet that will not be nearly enough for today’s deluge, and in any case it is unevenly distributed. In 11 states, including hard-hit New York, rainy-day funds are less than 5% of spending. Infusions from the federal government are therefore the only way to avoid illtimed austerity. The states could need as much as $650bn (3% of

GDP) to cope with the economic crash—and more to help them fight the pandemic. Help has so far been lacking. Congress has provided about $280bn and on April 22nd Mitch McConnell, the Republican leader of the Senate, suggested that states be allowed to go bankrupt (a route available to cities but not states). He has since walked back his statement, but President Donald Trump and many Republicans, complaining of poor government in Democrat-run states, say they do not want to reward recklessness. Their concerns are not empty. Many states have vast unfunded pension liabilities. In Connecticut, Illinois and California pension costs threaten to eat up over 10% of annual revenues. The problem is not limited to Democratic-leaning areas. In Mr McConnell’s state, www.businessday.ng

Kentucky, one pension plan is only a sixth funded. It would be costly to create the impression that Congress will, in a downturn, bail out states and cities who live precariously. When local-government finances were shot in the 1830s, the federal government stayed on the sidelines for this reason. It was reluctant to intervene when New York City almost went bankrupt in the 1970s. But the pandemic is not the result of any state’s profligacy. Americans often share disaster risks nationally. Congress steps in when hurricanes or tornadoes strike. Making up tax shortfalls during lockdowns would benefit all states, not only those with extravagant pensions or bad management. While Congress fails to act decisively, fighting the crisis has been left to the Federal Reserve. It is offering up to $500bn in loans to

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states, counties and cities. On April 27th it expanded eligibility to a total of 256 entities with sufficiently large populations and—at least until recently—high credit ratings. The Fed’s loans, however, are both inadequate and undesirable. They are inadequate because bans on borrowing will restrict their uptake. They are undesirable because central banks are meant to be guardians of the financial system, not vehicles for disaster relief. The appeal of using the Fed is that it can act fast and keep costs off the government’s balance-sheet. Its $500bn of loans is underwritten by just $35bn provided by Congress to protect it against defaults. But the Fed cannot be indemnified against political risks. Its claims on state and local taxpayers will compete with those of pensioners and public-sector workers—an awkward position for an institution tasked with remaining above the fray. And the Fed has been insufficiently clear that its actions are in response to an extraordinary health emergency, rather than the new normal for fighting economic crises. That raises the risk of moral hazard. Better for Congress to stump up. A bipartisan proposal to give a $500bn grant to states and local governments lies before lawmakers. Mr McConnell and his colleagues should pass it. @Businessdayng

In normal times school helps level the playing field. Without it, the achievement gap between affluent and working-class children will grow. By one estimate, American eight-yearolds whose learning stopped altogether with the lockdown could lose nearly a year’s maths by autumn, as they fail to learn new material and forget much of what they already knew. School matters for parents, too, especially those with young children. Those who work at home are less productive if distracted by loud wails and the eerie silence that portends jam being spread on the sofa. Those who work outside the home cannot do so unless someone minds their offspring. And since most child care is carried out by mothers, they will lose ground in the workplace while schools remain shut. In poor countries the costs are even greater. Schools there often provide free lunches, staving off malnutrition, and serve as hubs for vaccinating children against other diseases. Pupils who stay at home now may never return. If the lockdown pushes their families into penury, they may have to go out to work. Better to re-open schools, so that parents can earn and children can study. The obvious rejoinder is that shutting schools brings benefits. Covid-19 can be deadly. Parents do not want their children to catch it or to give it to grandma. In fact, though children are highly susceptible to flu, covid-19 is different. Two studies from China that trace the contacts of infected people find that children are at worst no more likely to catch the disease than adults—and possibly less so. If they do get it, they are 2,000 times less likely than someone over 60 to die. Nor is there evidence that children who do end up catching the disease are silent spreaders who pass it on to their families. Researchers in Iceland and the Netherlands have not found a single case in which a child brought the virus into their family. The European Centre for Disease Prevention and Control, the European Union’s public-health agency, said last week that child-to-adult transmission “appears to be uncommon”.

Monday 04 May 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

Cost of vaccinating billions against Covid-19 put at more than $20bn Sum far exceeds $8bn fundraising target at upcoming EU-led donors’ conference MICHAEL PEEL AND ANDREW JACK

he cost to immunise people around the world against coronavirus is likely to exceed $20bn, far surpassing the initial fundraising target of $8bn set for an EU-led donors’ meeting to be held on Monday, global health organisations say. International health bodies suggest the full cost could reach $25bn, once funding needed to produce doses in vast numbers and distribute them globally is taken into account. The figure highlights the financial, political and logistical difficulties ahead, even as architects of the G20-backed online pledging conference hosted from Brussels scrambled over the weekend to hit the $8bn (7.5m euros) benchmark. “We are calling it a downpayment on a much larger set of asks to come,” Joe Cerrell, head of global policy and advocacy for the Bill & Melinda Gates Foundation, told the FT. “The G20 seems to be taking pretty seriously the scale of the cause — now it’s important to get more into the nature of the financing needed.” European officials hope at least 30 countries will take part in the Brussels event, which is part of a wider international initiative launched by the World Health Organization last month to boost testing, treatment and the search for a vaccine. The G20 and other nations are expected to pledge money — al-

A patient is injected in a clinical trial of a potential Covid-19 vaccine. The full cost of a global inoculation programme could reach $25bn © Ted S. Warren/AP

though the US, which announced last month it was suspending funding to the WHO, has not publicly said it will participate. The priority is the public good, not big pharmaceutical company profits Anna Marriott, health policy manager for Oxfam European leaders acknowledged on Sunday that the first $8bn would cover only “initial needs” and said manufacturing and delivering pandemic medicines on a global scale would “require resources well above the target”. “The funds that we raise will kick-start an unprecedented global co-operation between scientists

and regulators, industry and governments, international organisations, foundations and healthcare professionals,” said an article in The Independent, co-authored by Ursula von der Leyen, European Commission president, Charles Michel, her European Council counterpart, and the leaders of France, Germany, Italy and Norway. “If we can develop a vaccine that is produced by the world, for the whole world, this will be a unique global public good of the 21st century,” it added. Organisers of the Brussels event acknowledge that funding the search for a vaccine — 200 can-

didates for which are under consideration by scientists — is only the first in a series of big financial demands. Pharmaceutical companies have already called for some kind of assurance via upfront payments for the risks they will take on in investing large sums to expand manufacturing capacity to meet demand for a vaccine. Seth Berkley, head of Gavi, an international organisation that uses donor funding to supply vaccines to the world’s poorest countries, said discussions were under way to repurpose financial mechanisms previously deployed for other vaccines for coronavirus.

These include the International Finance Facility for Immunisation (Iffim), which allows donor governments to “front-load” support by swiftly disbursing money raised on capital markets. The funding is underwritten by guarantees it will be reimbursed from future aid budgets. Gavi has also used “Advanced Market Commitments”, which reduce uncertainty by using aid pledges to guarantee vaccine companies a large volume of purchases. Concerns have also been raised over ensuring money pledged at the Brussels conference is spent accountably and equitably. Anna Marriott, health policy manager for Oxfam, the international aid agency, said there must be a clear plan that puts “frontline workers and vulnerable people, including those in poor countries, at the front of the queue”. “Government donors should ensure that the money they pledge comes with conditions attached, to guarantee successful treatments and vaccines are available to everybody, free of charge,” she said. “The priority is the public good, not big pharmaceutical company profits.” Aid organisations have also expressed concern that resources could be over-concentrated on vaccines, at the expense of other essential ways to tackle Covid-19, including diagnostic tests and therapeutics. “I’m just a little concerned about the current efforts being too vaccine and research and development-focused,” said the head of one leading organisation.

Zimbabwe pleads for aid to avert ‘collapse’ and fight Covid IMF and other international institutions cannot lend to Harare because of debt arrears JOSEPH COTTERILL AND DAVID PILLING

imbabwe has pleaded with international institutions to help it clear billions of dollars in debt arrears so the country can avoid economic collapse and unlock funds to fight the coronavirus pandemic. Without urgent aid to clear arrears owed to official lenders, the southern African nation faced “domestic collapse”, Mthuli Ncube, finance minister, told the IMF, African Development Bank and other institutions in a letter seen by the Financial Times. The IMF and other bodies have pledged billions of dollars in emergency loans to help African nations battle the pandemic and shore up locked-down economies. But Zimbabwe – along with Sudan and Eritrea – is excluded from such funds because of its longstanding arrears. The country is about $2bn behind on payments to official lenders including the World Bank and AfDB, although it has paid off the IMF. In a sign of its desperation to access funds, the government led by

Tobacco traders in Harare take precautions against the coronavirus. Zimbabwe needs funds to fight the pandemic © Aaron Ufumeli/EPA/Shutterstock

President Emmerson Mnangagwa took responsibility in the letter for “recent policy mis-steps”, which have included state payouts to a company led by a close ally of the president. Last year, the payouts to Sakunda, a fuel importer headed by Kudakwashe Tagwirei, were financed with money-printing that triggered a currency collapse and a warning from the IMF. Sakunda was not mentioned by www.businessday.ng

name in the letter but the payouts have widely been seen as a misstep. Zimbabwe has never admitted wrongdoing over the Sakunda matter. The company denies any wrongdoing. A subsidy for gold miners that was financed with money creation also alarmed the IMF when it was uncovered, according to people familiar with discussions between the fund and the government. “Zimbabwe breaks my heart

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every day,” a senior official at the IMF said. “I know the path forward for other countries, but the thing that stops it is arrears to the World Bank and the AfDB. Then there’s the bigger issue of politics.” Mr Ncube, a Cambridge-educated mathematician, was plucked from academia by the government in 2018 to fix the economy. But his efforts have been stymied by mismanagement and corruption within the government, an official from an international finance institution said. In the letter - first revealed by Africa Confidential, a specialist newsletter, and sent last month Mr Ncube asked for “urgent and high-level dialogue” on a bridge loan to clear the multilateral arrears, as well as the rescheduling of other overdue debts owed to governments. In return for help, Zimbabwe would pledge to halt central bank money printing and “eliminate discretion in the allocation of foreign exchange”, he said. Zimbabwe’s finance ministry did not immediately respond to a request for comment. The IMF official said its hands @Businessdayng

were tied by its rules about arrears and that Zimbabwe would need to seek support from a bilateral partner, such as Britain. “We continue to engage with the authorities on their challenging economic situation,” the fund said in a statement. Zimbabwe has reported 34 coronavirus cases and four deaths to date, but economic chaos and lack of investment have left the public health system struggling to respond. The pandemic has struck in the middle of a food crisis in the country, with millions of people facing hunger. A lockdown in neighbouring South Africa, where many Zimbabweans work, has severely reduced the flow of remittances to the country, worsening an already dire economic situation. In March, inflation climbed to 676 per cent year on year, according to official numbers. Mr Mnangagwa’s cash-strapped government is relying on private donations to fight the pandemic. Sakunda has outfitted a hospital in Harare, the capital, to treat coronavirus patients and has secured millions of dollars worth of medical protective gear from China.

Monday 04 May 2020

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

US state pension system hit hard by coronavirus pandemic Sharp falls across financial markets in March have caused large drop in aggregate funded ratio CHRIS FLOOD

he financial strength of the US state pension system has deteriorated to its weakest position in at least three decades as a result of the market turmoil unleashed by the coronavirus pandemic. The aggregate funded ratio for US state pension plans dropped 12.2 percentage points during the first quarter to 62.6 per cent, according to Wilshire Consulting, the investment advice and research provider. The large drop was due mainly to sharp falls across financial markets during March, leading to an estimated average 15.7 per cent decline in the value of assets held by 130 of the largest state pension plans. “State pension plans funded ratio is now at its lowest level in the 30 years that Wilshire has been analysing this data,” said Ned McGuire, a managing director at the consultant. The strains on pension plans are set to intensify due to the huge rise in US unemployment, which will cut state tax revenues and raise spending on benefits. More than 30m Americans have

Senate majority leader Mitch McConnell said Republicans had no desire to ‘bail out state pensions by borrowing money from future generations’ © REUTERS

applied for unemployment benefits over the past six weeks since lockdown measures were introduced. A BlackRock analysis of 70 US public pension plans found that the average funded status had weakened by a fifth to 52.1 per cent in March from 71.7 per cent at the end of December. First-quarter asset falls ranged

from 20 to 40 per cent while declines in funded status varied between 9 percentage points and 32 percentage points. “The dispersion of losses among public pensions has been wide, depending on the size of their allocations to growth assets,” said Calvin Yu, head of BlackRock’s client insight unit. A comprehensive assessment

of the damage done could take years to emerge due to the fragmentation of the $4.3tn US public sector retirement systems that includes 299 state-run plans and 5,977 locally administered schemes, which have evolved independently since the 19th century. Democratic politicians are pressing US president Donald Trump to agree a fifth pandemic

emergency relief package that would include more help for state and local governments, including public pension plans. Republicans are divided but Senate majority leader Mitch McConnell has expressed strong opposition to so-called “blue state bailouts.” “There’s not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations,” said Mr McConnell last month. Jean-Pierre Aubry, a pensions expert at the Center for Retirement Research at Boston College, said that the long-term structural problems facing the US public system would now be greater as many plans had failed to strengthen their funding position in spite of the US stock market’s huge bull run since the 2007-08 financial crisis. “Public pension plans can remain poorly funded for some time. They are not going to fail tomorrow and there is still time to turn the ship around. Even under a pessimistic scenario, the 20 worst-funded plans will not run out of money to pay pensions over the next five years,” said Mr Aubry.

Warren Buffett sells all stakes in US airlines Famed investor tells virtual annual meeting Berkshire Hathaway can find nothing to buy ERIC PLATT

arren Buffett conceded on Saturday that he had got it wrong on airlines during the coronavirus pandemic and had sold Berkshire Hathaway’s entire stakes in four US carriers. Mr Buffett told Berkshire’s virtual annual meeting that he sold out of American Airlines, Delta Air Lines, Southwest and United Airlines in April. “It turns out I was wrong,” he said. “The airline business — and I may be wrong and I hope I’m wrong — I think it has changed in a very major way.” Berkshire sold more than $6bn of stock last month related to the airline trade. On Saturday, the doyen of the investing world conducted his popular Berkshire Hathaway annual meeting without the customary thousands of devotees. By video conference, Mr Buffett said Berkshire was worth less today because he had taken the decision to invest in airlines. “I don’t know if two or three years from now if as many people will fly as many passenger miles as they did last year,” he said. “If the business comes back 70 or 80 per cent, the aircraft doesn’t disappear. You’ve got too many planes.” Mr Buffett also said that he had decided against lending large sums as he did during the depths of the financial crisis because Berkshire was

Senate majority leader Mitch McConnell said Republicans had no desire to ‘bail out state pensions by borrowing money from future generations’ © REUTERS

not finding enticing opportunities. “We haven’t seen anything attractive,” he said. “The Federal Reserve did the right thing and they did it very promptly and I salute them for it. But a lot of companies that needed money . . . got to finance in huge ways in the last five weeks.” Mr Buffett said corporate chieftains and financiers owed policymakers at the US central bank a thank-you note for the speed and ferocity at which they responded to the credit market freeze in March, which at the time sidelined companies from raising needed cash. The Fed moved swiftly to help thaw capital markets, agreeing to buy investment grade corporate bonds and exchange traded funds invested in junk credit at the same www.businessday.ng

time it worked to backstop money market funds and the commercial paper market. Those actions, Mr Buffett added, meant companies that would have in the past needed to tap Berkshire for funding have been able to secure it elsewhere. Yields on both investment grade and high yield corporate bonds have fallen from peaks hit in March when the recent market drop was at its most severe. “We were starting to get calls,” he said, referring to companies seeking out investment. “A number of them were able to get money in the public market frankly at terms we wouldn’t have given to them.” Companies across the globe have borrowed more than $1.1tn through bond markets in March

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and April, two record-setting months, according to financial data provider Refinitiv. Separate figures from S&P Global Market Intelligence unit LCD showed companies had drawn down revolving credit facilities worth more than $250bn. Nonetheless, the lack of acquisitions and preferred stock investments by Berkshire has stood out for some investors who remember the company’s actions in the fallout of the 2008 financial crisis when it invested in Goldman Sachs, General Electric and Bank of America. Those investments signalled the comfort of one of the world’s wealthiest men to invest, and for some offered a seal of approval to buy themselves. “Not all the opportunities will come in the first two to three months of the crisis,” James Shanahan, an analyst who follows Berkshire at Edward Jones, said. “They’ll come over time and if Berkshire can’t lend at terms that are favourable to them they won’t put the capital to work. You can only conclude he’s being patient and disciplined.” Mr Buffett was joined at the annual meeting by vice-chairman Greg Abel, but without his usual sparring partner Charlie Munger and the 40,000-plus shareholders who normally descend on Omaha, Nebraska. Berkshire told shareholders not to attend the company’s annual meeting in person in light of the coronavirus outbreak @Businessdayng

which is known to have killed more than 200,000 people worldwide. The so-called Oracle of Omaha began the meeting with an hourlong history lesson, reminding his followers that the US had endured and prospered after other crises. He ran investors through the Great Depression, the Civil War and the outbreak of the Spanish flu, with a series of black-and-white slides with simple facts written in Times New Roman font. One had only four words: “Never bet against America”. Another had six: “But never — never — bet against America”. “We faced great problems in the past,” he said. “We haven’t faced this exact problem . . . but we faced tougher problems and the American miracle, the American magic has always prevailed and it will do so again.” The company he leads has been hurt by the pandemic, suffering a $49.7bn loss in the first quarter after its stock portfolio was hammered alongside a broad market sell-off. Berkshire’s sprawling group of subsidiaries was hampered by government lockdowns and a decline in consumption. Investment gains generated by Berkshire’s insurance arm helped lift overall operating earnings 6 per cent, the measure Mr Buffett points to as one of the best means to evaluate the group’s performance, but profits at subsidiaries involved in transport, energy and manufacturing all declined.

Monday 04 May 2020

BUSINESS DAY

ANALYSIS FT Pandemic crisis offers glimpse into oil industry’s future

Price wars and coronavirus have disrupted the sector, possibly moving peak demand even closer DAVID SHEPPARD

ohn Browne, the former chief executive of BP, has witnessed first hand the ups and downs of the oil industry for more than five decades. But unlike the usual market cycles of boom and bust he believes the coronavirus-linked price crash will serve as a warning for the industry of what is to come. The pandemic has wiped out almost a third of global oil demand through lockdowns and travel bans, landing a direct hit on a sector already in the grip of its own crisis: how to evolve when climate change has risen up the political agenda, and oil demand is threatening to peak? The timing of oil’s crash is being viewed by some as a trailer for a summer blockbuster — a faster, flashier version of the main movie, if oil demand really does top out in the next 10 to 15 years. In the past month oilfields have been shut down, storage tanks have filled up in record time and national oil companies even briefly embarked on a price war to try and win a bigger slice of a shrinking market. US prices turned temporarily negative for the first time in history in April, so depressed was demand. Some in the industry argue that behavioural changes during the coronavirus outbreak will accelerate the peak demand trajectory. “We’re seeing just how fragile the world is in this pandemic, and awareness of fragility is a very important thing in shaping human behaviour,” Lord Browne says. “People who have spent months worrying about their lungs are more likely to want clean air.” As oil executives take stock after one of the most disruptive periods in the industry’s history, many are reflecting on how the pandemic will reshape its outlook beyond the need to weather a drop in prices to around $25 a barrel. On one side stand executives like Lord Browne, who now chairs LetterOne, part owner of independent oil and gas producer Wintershall DEA, as well as sitting on the board of a biomedical institution researching potential vaccines for Covid-19. They believe the world will be changed so indelibly that oil demand will struggle to regain the upwards trajectory that has underpinned the industry for over a century. They see the potential for demand to peak earlier than expected, with a more rapid shift into renewable energy. For the industry that means growing pressure to adapt their core fossil fuel businesses even sooner. On the other side of the argu-

ment are those who think that efforts to mitigate climate change risk being derailed by cheap oil and a global depression that will suck up so much government time and stimulus money that climate efforts will be pushed aside. In this scenario, investment in the oil industry could fall so much that supply shortages eventually emerge, spiking prices higher. “We’re right at the beginning [of this debate],” Lord Browne says. “But a health crisis changes people’s attitudes significantly and that will roll up to the oil industry.” Investors had already turned their back on the sector even before the pandemic struck. They were motivated by fears that demand growth is weakening and the rise of ethical, social and governance-led investing has damped appetites for shares in big polluters. In the US, the value of energy companies on the S&P 500 has shrunk to less than 5 per cent of the total index from 11 per cent a decade ago. The International Energy Agency had been predicting that global oil demand — which has risen by an average of 1.5m barrels a day each year in the past decade to reach 100m b/d in 2019 — would start to witness slower growth from 2025. Most oil companies believe wider adoption of electric vehicles or stricter regulation on emissions could see demand peak between 2030 and 2035. Bernard Looney, BP’s chief executive since January, has staked his tenure on a promise to set the company on a path to “net zero” emissions. The plan, to be fully unveiled in September, is expected to see BP eventually shift faster into renewables like wind and solar, alongside kick-starting measures like carbon capture and storage to offset CO2 emissions from fossil fuel production. But at its heart it has one simple tenet: one of the world’s most famous oil and gas companies is pinning its future on producing less oil and gas. “The oil industry was already changing,” says Mark Lewis, global www.businessday.ng

head of sustainability research at BNP Paribas Asset Management. “The question is now whether this accelerates [after the pandemic].” The crash in oil prices from $70 a barrel in January to below $20 in April has not yet knocked BP off course, even if they have had to cut investments as earnings plummet to defend shareholder dividends. Instead of becoming isolated from his peers by its net zero plan as prices crashed, BP has been joined by Royal Dutch Shell, which announced its own net zero plans in April. “Despite all that is going on, we must keep our eye on the future,” Mr Looney said in a note congratulating Shell’s chief executive, Ben van Beurden, on the move. Mr van Beurden went a step further last week, cutting the company’s dividend payments to shareholders for the first time since the second world war, and warning it was “hard to say” if oil demand would ever fully recover. Environmental groups have accused BP and Shell of greenwashing. They argue the companies are not moving fast enough, and point out they still have plans to remain oil and gas producers in the long term. But Mr Lewis believes their plans go beyond a PR exercise. The economics of the industry are changing, and the second huge price crash in five years has not helped oil’s position. Falling costs mean wind and solar projects work without subsidies, generally providing stable cash flows under long-term supply contracts, with returns on capital invested of between 6 and 10 per cent, according to his calculations. That puts them close to par with new oil projects once oil’s more volatile prices are taken into account. “The old argument that you can’t generate the same returns from renewables as you can from oil and gas looks increasingly weak,” Mr Lewis says. The political backdrop for the oil industry is also less stable. Saudi Arabia’s initial response to

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the slowdown in oil consumption was to launch a price war with Russia, raising its production to maximum levels, partly in a bid to make up in volumes what it lost in price. While the kingdom has since returned to restricting output, under pressure from US president Donald Trump, analysts believe that could be a portent of national oil companies realising that demand is going to peak sooner rather than later. For Saudi Arabia, which has 75 years’ worth of oil in the ground, the most rational approach may be to pump as hard as possible now. Jeffrey Auld, chief executive of Serinus Energy, a small oil and gas producer in Romania and Tunisia, says he expects political risk to push larger companies to direct more attention towards lesspolluting gas, if not renewables. “[Companies] have got burnt once too many times with oil,” Mr Auld says. “They’re looking 40 years out and saying ‘well we can’t become like coal’ so they need to move towards something that is more palatable.” Sam Laidlaw, the former head of Centrica, who now runs private equity-backed producer Neptune Energy, says there are reasons to be cautious about declaring the death of oil. While demand growth could begin to slow, with western consumers less likely to fly as often — German airline Lufthansa has warned it could take years for passenger numbers to return to precrisis levels — he doubts the entire energy industry will be able to move as aggressively away from oil. Just before the crisis hit, the IEA had forecast that jet fuel demand would grow at more than 1 per cent per annum over the next five years, three times faster than gasoline. The economic recovery from the post-pandemic recession may yet favour cheaper, established fuels like oil. “The pressure for decarbonising and doing what we can is just as strong,” says Mr Laidlaw, “but we’ve now got the new problem of affordability [for renewables].” @Businessdayng

He argues that more aggressive action on climate change will take greater co-ordination globally, such as the introduction of stronger carbon taxes en masse by national governments. But he sees co-operation slipping. “If we really want to move the green agenda forward we would need to see better global co-ordination. And that hasn’t been there in this pandemic,” Mr Laidlaw says. In the US, oil majors like ExxonMobil and Chevron have lent support to the idea of carbon taxes, but overall have been slower to embrace the energy transition. Their greater exposure to the high-cost US shale sector has led to an initial focus on cutting capital expenditure. Shale output is expected to decline steeply over the next two years. Arjun Murti, a former Goldman Sachs analyst who correctly predicted the $100-a-barrel oil era, says the US energy industry is more likely to continue investing in fossil fuels but desperately needs to improve its return on capital to win shareholders back. Mr Murti, who sits on the board at ConocoPhillips, argues that while he supports climate change efforts he believes estimates of peak oil demand are overblown. Expectations for electric vehicles to curb oil demand are too high, he argues, pointing to the growing uptake of fuelguzzling sport utility vehicles outside the US. “Only one company, Tesla, has shown people are willing to buy hundreds of thousands of electric cars,” Mr Murti says. “But that has not yet been proven for other manufacturers. If you look at SUV sales they’ve gone beyond their stronghold in the US . . . cheap oil is likely to exacerbate that trend.” Chris Midgley, a former chief economist at Shell, says the sector’s biggest problem is that it has performed so badly over the past 20 years. ExxonMobil’s share price is broadly unchanged in two decades. Its market capitalisation — $185bn — was briefly overtaken by Netflix in April.

Monday 04 May 2020

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Thursday 30 April, 2020 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 234,598.49 6.60 3.94 397 64,600,174 UNITED BANK FOR AFRICA PLC 206,906.50 6.05 0.83 244 16,900,582 ZENITH BANK PLC 448,969.86 14.30 -2.72 603 25,546,850 1,244 107,047,606 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 165,118.35 4.60 1.09 443 62,944,387 443 62,944,387 1,687 169,991,993 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,279,705.46 112.00 4.28 206 3,532,781 206 3,532,781 206 3,532,781 BUILDING MATERIALS DANGOTE CEMENT PLC 2,215,265.96 130.00 1.00 206 2,003,065 LAFARGE AFRICA PLC. 190,071.99 11.80 2.61 193 11,945,520 399 13,948,585 399 13,948,585 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 290,926.99 494.40 - 11 989 11 989 11 989 2,303 187,474,348 REAL ESTATE INVESTMENT TRUSTS (REITS) SFS REAL ESTATE INVESTMENT TRUST 1,386.00 69.30 - 1 55 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 9,072.12 3.40 - 33 1,799,941 34 1,799,996 34 1,799,996 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 34 1,799,996 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 1 5,000 OKOMU OIL PALM PLC. 52,512.75 55.05 - 9 26,281 PRESCO PLC 36,450.00 36.45 - 23 132,354 33 163,635 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,500.00 4.25 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 2,100.00 0.70 7.69 9 155,838 9 155,838 42 319,473 DIVERSIFIED INDUSTRIES JOHN HOLT PLC. 198.47 0.51 - 1 1,874 1,903.99 2.93 - 0 0 S C O A NIG. PLC. TRANSNATIONAL CORPORATION OF NIGERIA PLC 26,827.67 0.66 -1.49 108 15,238,982 U A C N PLC. 19,880.95 6.90 1.47 57 1,024,404 166 16,265,260 166 16,265,260 BUILDING CONSTRUCTION ARBICO PLC. 381.65 2.57 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 34,056.00 25.80 - 64 489,881 165.00 6.60 - 0 0 ROADS NIG PLC. 64 489,881 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,000.76 0.77 - 6 33,797 6 33,797 70 523,678 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 6,341.89 0.81 - 4 40,100 GOLDEN GUINEA BREW. PLC. 829.98 0.81 - 0 0 GUINNESS NIG PLC 40,303.04 18.40 -0.54 141 1,327,322 INTERNATIONAL BREWERIES PLC. 134,310.34 5.00 4.17 60 2,209,186 NIGERIAN BREW. PLC. 239,907.06 30.00 -3.38 62 780,584 267 4,357,192 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 149,400.00 12.45 - 41 217,294 FLOUR MILLS NIG. PLC. 86,107.97 21.00 - 16 51,088 HONEYWELL FLOUR MILL PLC 7,930.20 1.00 - 5 13,499 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 1 600 NASCON ALLIED INDUSTRIES PLC 26,626.86 10.05 - 30 251,228 UNION DICON SALT PLC. 2,993.06 10.95 - 0 0 93 533,709 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 14,086.52 7.50 - 38 263,933 NESTLE NIGERIA PLC. 729,402.28 920.20 - 109 181,107 147 445,040 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 6,204.19 4.96 - 39 754,819 39 754,819 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 16,676.00 4.20 -1.18 35 864,470 UNILEVER NIGERIA PLC. 60,322.56 10.50 - 40 327,622 75 1,192,092 621 7,282,852 BANKING ECOBANK TRANSNATIONAL INCORPORATED 81,655.50 4.45 -1.11 77 2,868,792 FIDELITY BANK PLC 51,864.89 1.79 -1.65 45 1,712,217 GUARANTY TRUST BANK PLC. 618,054.76 21.00 -0.47 604 36,134,559 JAIZ BANK PLC 16,205.34 0.55 - 11 316,894 STERLING BANK PLC. 36,851.74 1.28 - 19 1,709,772 UNION BANK NIG.PLC. 196,565.08 6.75 - 9 1,181 UNITY BANK PLC 5,143.31 0.44 - 11 96,119 WEMA BANK PLC. 22,758.93 0.59 -1.67 41 2,167,750 817 45,007,284 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 1 5,000 AIICO INSURANCE PLC. 9,743.98 0.86 1.18 11 178,118 AXAMANSARD INSURANCE PLC 16,590.00 1.58 - 3 4,900 CONSOLIDATED HALLMARK INSURANCE PLC 2,439.00 0.30 - 0 0 CORNERSTONE INSURANCE PLC 8,101.23 0.55 - 1 2 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,977.33 0.27 3.85 14 3,580,000 LAW UNION AND ROCK INS. PLC. 4,296.33 1.00 - 5 60,000 LINKAGE ASSURANCE PLC 4,240.00 0.53 - 0 0 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 5.00 47 13,928,517 NEM INSURANCE PLC 12,409.18 2.35 6.82 10 1,042,300 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 2,691.28 0.50 -9.09 1 100,000 REGENCY ASSURANCE PLC 1,333.75 0.20 - 1 271,500 SOVEREIGN TRUST INSURANCE PLC 2,272.89 0.20 - 0 0 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 6,237.84 0.26 4.00 6 153,049 100 19,323,386 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,858.30 1.25 - 3 33,400 3 33,400

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 6,784.62 1.05 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,671.82 1.36 - 0 0 2,265.95 0.20 - 0 0 RESORT SAVINGS & LOANS PLC UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,300.00 3.65 2.82 68 2,368,329 33,820.72 5.75 - 4 1,400 CUSTODIAN INVESTMENT PLC DEAP CAPITAL MANAGEMENT & TRUST PLC 495.00 0.33 - 0 0 34,060.66 1.72 1.18 88 35,156,612 FCMB GROUP PLC. ROYAL EXCHANGE PLC. 1,029.07 0.20 - 0 0 STANBIC IBTC HOLDINGS PLC 299,391.57 28.50 - 44 503,104 14,040.00 2.34 -2.09 119 9,943,529 UNITED CAPITAL PLC 323 47,972,974 1,243 112,337,044 HEALTHCARE PROVIDERS EKOCORP PLC. 2,991.61 6.00 - 0 0 1,101.47 0.31 6.90 3 452,000 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 3 452,000 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 593.50 0.60 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 5,111.58 2.45 - 11 222,100 FIDSON HEALTHCARE PLC GLAXO SMITHKLINE CONSUMER NIG. PLC. 6,397.94 5.35 - 24 182,211 MAY & BAKER NIGERIA PLC. 4,658.13 2.70 - 10 50,274 1,139.49 0.60 - 10 135,127 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 325.23 1.50 - 0 0 PHARMA-DEKO PLC. 55 589,712 58 1,041,712 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 745.92 0.21 -4.55 12 15,516,640 12 15,516,640 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 911.95 0.31 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 216.00 2.00 - 41 608 TRIPPLE GEE AND COMPANY PLC. 287.07 0.58 - 1 1,900 42 2,508 PROCESSING SYSTEMS CHAMS PLC 1,080.09 0.23 4.55 8 1,110,400 E-TRANZACT INTERNATIONAL PLC 10,962.00 2.61 - 2 3,748 10 1,114,148 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,123,311.48 298.90 - 5 152 5 152 69 16,633,448 BUILDING MATERIALS BERGER PAINTS PLC 1,941.82 6.70 - 3 870 BUA CEMENT PLC 1,103,977.94 32.60 -1.21 39 1,413,754 CAP PLC 14,630.00 20.90 - 7 16,583 MEYER PLC. 265.62 0.50 - 1 598 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,769.32 2.23 - 0 0 1,156.20 9.40 - 0 0 PREMIER PAINTS PLC. 50 1,431,805 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,192.12 2.03 - 0 0 CUTIX PLC. 2,131.20 1.21 0.83 6 214,572 6 214,572 PACKAGING/CONTAINERS BETA GLASS PLC. 34,998.04 70.00 - 2 207 GREIF NIGERIA PLC 388.02 9.10 - 0 0 2 207 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 58 1,646,584 CHEMICALS B.O.C. GASES PLC. 1,519.29 3.65 - 2 280 2 280 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 77.00 0.35 - 0 0 0 0 2 280 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 4 1,908,281 4 1,908,281 INTEGRATED OIL AND GAS SERVICES OANDO PLC 30,829.90 2.48 5.53 54 3,675,805 54 3,675,805 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 58,019.78 160.90 - 5 2,512 ARDOVA PLC 15,043.66 11.55 10.00 56 1,185,178 CONOIL PLC 12,074.77 17.40 - 7 11,033 ETERNA PLC. 2,816.95 2.16 - 15 90,644 MRS OIL NIGERIA PLC. 4,206.05 13.80 - 0 0 TOTAL NIGERIA PLC. 32,695.95 96.30 - 13 2,378 96 1,291,745 154 6,875,831 ADVERTISING AFROMEDIA PLC 1,509.28 0.34 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 15,796.05 1.62 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 235.27 0.20 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,686.42 2.90 - 10 316,150 TRANS-NATIONWIDE EXPRESS PLC. 421.96 0.90 - 0 0 10 316,150 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,181.71 2.70 - 0 0 IKEJA HOTEL PLC 2,224.31 1.07 - 1 2,500 TOURIST COMPANY OF NIGERIA PLC. 7,076.28 3.15 - 0 0 TRANSCORP HOTELS PLC 30,401.62 4.00 - 0 0 1 2,500 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 3,960.00 0.33 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 187.49 0.31 - 0 0 LEARN AFRICA PLC 794.59 1.03 - 1 926 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 457.29 1.06 9.28 6 389,525 7 390,451 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 580.20 0.35 - 0 0 0 0 SPECIALTY INTERLINKED TECHNOLOGIES PLC 688.80 2.91 - 0 0 SECURE ELECTRONIC TECHNOLOGY PLC 1,126.31 0.20 - 0 0

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BUSINESS DAY Monday 04 May 2020 www.businessday.ng

All Aboard…! Steering Nigeria’s COVID-19 Action Train Fola Adeola

he first case of COVID-19 was confirmed in Nigeria on the 27th of February 2020. Just a little over two months ago and, yet, it feels like a lifetime has elapsed. The world we lived in then, is so much different from the one we are about to be released into, as the lockdown restrictions are lifted. When the lockdown was announced by President Muhammadu Buhari on the 27th of March, there were 65 confirmed cases in the country and the President’s Chief of Staff had just tested positive for the virus. Today, we have confirmed over 2000 cases, and many of our beloved fellow citizens (more than 50) are no longer with us, having fallen in the wake of this novel coronavirus. May the souls of the departed rest in peace, and to those of us who remain on the journey of life, may God grant wisdom. We need it, desperately, at this time to navigate the complexities ahead. The month we spent sheltering in place was, without question, challenging; but in our isolation there was an odd sort of togetherness, a shared helplessness with the rest of the world. Literally, everybody was hunkered down, numbering their afflicted, and counting their dead. The world went from an insignificant number of confirmed cases and an even more insignificant number of COVID-19 deaths on March 27th, to about three and a half million afflicted, and about a quarter of a million deaths as at last count. Some countries have had it worse than others. With the US recording over 60,000 deaths, and Italy, Spain and the UK each recording between 25,000 and 30,000 deaths, our own fifty-something fallen, in a population of almost 200 million, barely registers on the Richter scale of devastation in which the world has become engulfed. But it is not a competition. God knows we are not equipped to deal with what the countries of the West are going through. The sojourn ahead, the path to a “new normal” on the COVID Action Train that each country has been forced to navigate will be less unified, more particular to each nation’s circumstances and challenges than the shared humanity of sickness and loss. Each nation is tasked with the burden of its re-emergence. So, let us turn our minds to our own COVID Action Train journey. Perhaps a good departure point for us is a review of where we are, as a precursor to where we ought to be headed. When we began this journey in March, we had barely any infrastructure in place for the containment of this virus. But, somehow, with the borders closed and the elite locked in, nobody needed to tell Nigeria’s affluent that the country’s first line of defense rested with them. The private sector – corporations, foundations, and individuals – took the lead. Within

a few weeks, isolation centers, ICUs and treatment centers had sprung up in different parts of the country – particularly in Lagos. Over 30 Billion Naira was donated, and additional in-kind contributions of food and healthcare products were and continue to be made. These donations made it possible for government, at the national and subnational levels, to make available cash stipends and “survival packs” to the more vulnerable populations in lockeddown states. Everyday citizens, also, extended themselves to feed the disadvantaged in their neighborhoods, and displayed basic human charity. Setting aside some of the controversy around the quantum and efficiency of palliative relief, and the self-protection inherent in some of the charitable giving, it is impossible to deny that Nigerians stepped up. Even those with a penchant for looking gift horses in the mouth, must stop to at least acknowledge that this one time, with the fates of the rich and the poor “locked in,” Nigerians, particularly the elite, demonstrated a capacity to think beyond themselves that must – even for the most cynical of us - offer hope, at a time of such global devastation, that when push comes to shove, we will do for ourselves and one another. That maybe, just maybe, our selfloathing is not so entire as to obscure our collective desire to triumph over disease and death. That maybe, just maybe, the candle of enlightened self-interest may have embered, and maybe, just maybe, it can be fanned into a flame that will light our path out of the valley of the shadow of COVID-19. Perhaps… It is probably also worthwhile to examine our COVID statistics and acknowledge a few things. Neither our confirmed cases, nor the number of recorded deaths is particularly high; not yet. And to those who would argue that the numbers are inaccurate, and cannot form the basis of sound decision making, I can only say that while that is true, the same is probably true of most countries around the world. We have not tested enough. I agree. I am, however, strongly of the view that we cannot and will not, for the foreseeable future, be able to afford the level of universal testing that would give us tangible path-lighting information. There are, however, more basic indicators, even if imprecise, that we can examine. Our hospitals are not yet overburdened, our emergency COVID-19 centers are not at full capacity, our morgues are not spilling over, we are not modifying refrigerated containers to hold the

dead, and we are not constrained to dig mass graves. The imagery is stark, and I apologize to those whose sensibilities may still be penetrable, despite these past few weeks of CNN onslaught. This is the unfortunate reality of many of the countries of the West, who, before this pandemic, would have had their healthcare systems described as robust. Our very fortunate position is not the triumph of preparedness on our part for COVID-19, and it is important that we not deceive ourselves. It is the absence of an onslaught. Those who choose to hide their affliction, as if an airborne disease should be a source of shame, by checking into uncertified private hospitals, can still do so because the hospitals are not overwhelmed; and those who scowl at the rich for carrying on like spoiled brats and choosing self-care over dedicated public health infrastructure do so because the IDH still has beds that we would like to see the rich occupy. We do not have pandemic-level infection rates in Nigeria. If we did, we would curse the rich for daring to monopolise the few beds that would offer ordinary people a chance at survival. Our infection rates are not high; not yet. This is not to say, that efforts are not being made to get at least some idea of the numbers of infected people, outside of those who have self-reported or presented with symptoms. Let us not sell our public health officials short. Lagos State has, since mid-March, focused on expanding the testing dragnet to include contact tracing, and randomized sample testing in the various local governments. The same is true in Edo, Ogun, FCT and Kaduna. The results from these efforts will give us some sense, if we extrapolate, of the likely transmission and infection rates of the virus. Will it ever be enough to develop accurate projections? No, it will not. But let’s not get carried away by the global clamour for testing. In the here and now, the resources don’t exist for universal testing in Nigeria,

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We ought to apply the monies received from the EU, and IMF for COVID-19 interventions, to implementing a near to medium term healthcare overhaul

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Because portfolio investors parading as FDI will flee, but if we, the owners of the economy, do the right things now, a path can be created towards welcoming real growth capital when the world is restored or indeed anywhere. There aren’t enough tests in the world, and they cannot be produced quickly enough. Even if they were available, all the cash donations of the elite and corporates put together would not cover the cost of universal testing here. What we can do, rather than fantasize, is examine the stats that we do have, and track other moderate to severe disease indicators like symptomatic presentation at primary care centres, hospitalisations and deaths – even if they are lagging indicators – that do not lend themselves as easily to obfuscation, and reach an educated conclusion. We do not have a pandemic, yet. I emphatically use the word “yet” to qualify our COVID-19 situation, and have probably done so enough times in the course of this write-up to beg the question: “This man, are you praying for Corona to come?” It cannot, after all, be a coincidence that this lockdown occurred at the cusp of the Christian Lenten period, and the Holy Month of Ramadan. Yes. As a praying person myself, I need no convincing of the power and mercy of God in the affairs of men. I am, however, unconvinced that we are the only ones who pray, or that in this one thing, God is partial to Nigeria and Nigerians because the committed Christians and faithful Muslims in the rest of the world are somehow less worthy than we are. If God shows us mercy, and we never experience a full COVID-19 pandemic in Nigeria, let it be because when the window to act was given to us – which others may not have had, mainly because of the virus’s migration pattern – we chose to act wisely, and use the infor-

mation we have today that others did not at this stage in their own journey to alter the course of its trajectory in our nation. It is probably useful that we also examine another important aspect of our COVID-19 profile. When I describe us as not yet having a pandemic, it is important that we not read that to mean the expectation of a “second wave”. Frankly, that is much further ahead of where we are than any of us can venture to posit on. The number of cases, while low, has neither peaked nor begun to decline in Nigeria. We are, to be clear, easing the lockdown while still on the ascending end of the curve, much earlier in the course of the disease’s trajectory than the countries of the West. We can take this calculated risk because our numbers are low relative to population size, and frankly because we must strike that delicate balance between lives and livelihoods. We cannot afford to stay closed longer, so we have taken the upfront pain of a month-long clamp down, in the hope that this initial containment will improve our chances of long-term management. That is the strategy. We have not peaked, we have not plateaued. Our numbers remain on the rise. The first wave is still on course but our numbers are sufficiently low to enable a cautious restarting of our economy to ensure survival. Already, we are dealing with a collapse in oil prices. Most of our people inhabit a daily economy. Continued closure may not be an option. As we prepare to continue our COVID-19 Action train journey, we must consider what we know about this virus, and the possible alternatives ahead of us. It is possible that the infection rate in Nigeria will remain manageably low; because our tropical climate may be a deterrent, or/and because those of us in the developing world have more active immune systems and are less likely to develop severe disease, or/and because we are successful in adapting to a “new normal”. It is also possible that we will experience an aggressive steepening of the curve, because we are not special, or/and because that is the likely outcome if we fail to adapt to an enemy that is already within, or/and because this virus has a continental sweep pattern, will travel when we eventually open up our borders, and be carried along or arrested by whatever behaviors we Continues on page 30

Fola Adeola, OFR; mni. Chairman, FATE Foundation Coordinator, FATE Philanthropy Coalition for COVID-19.

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