BusinessDay 05 Aug 2020

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news you can trust I ** WEDNESDAY 05 AUGUST 2020 I vol. 19, no 621

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Why motorists spend longer hours on Eko Bridge … as frequent truck accident, breakdown slow traffic on alternate routes to 3rd Mainland Bridge Top Row L-R: Jim Ovia, chairman, Zenith Bank plc; Akin Osuntoki, chairman, Programmes Committee, Nigerian-British Chamber of Commerce; Kayode Falowo, president and chairman of Council, Nigerian- British Chamber of Commerce. Bottom Row L-R: Bisi Adeyemi, deputy president, Nigerian-British Chamber of Commerce, and Alan Davies, deputy president, Nigerian-British Chamber of Commerce, at a webinar held by the Nigerian-British Chamber of Commerce themed Building a Brand.

SPECIAL SERIES

Equity vs Debt: Making a choice for Nigeria DIPO OLADEHINDE & DAVID IBIDAPO

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igeria’s path to economic prosperity may lie in prioritising equity financing over debt, according to experts surveyed by BusinessDay. This is as the government has taken an interest raising debt rather than equity over the last five years as

revenues collapsed.

At the root of Nigeria’s preference for debt is that it is the easier alternative of the two funding options. Equity requires disciplined planning, honesty, time tested officials, economic reforms and consistent government policies that can inspire investors’ confidence.

Debt on the other hand requires far less rigour and a basic

commitment to repay.

The problem however is that the room for more borrowing is fast diminishing, which has made it ever more important that the government goes the harder and more demanding route of raising equity rather than binge on debt.

In the first quarter of 2020, the government spent a remarkable 99 percent of revenue servicing

debt, as low oil prices and the coronavirus pandemic crimped government earnings.

Data obtained from the Medium-Term Expenditure Framework

Continues on page 30 See full report, titled, ‘Expert Prognosis of Nigeria Economy’ on pages 30 & 31

CHUKA UROKO & JOSHUA BASSEY

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he Federal Government has explained why motorists on Eko Bridge in Lagos have had to endure pains and stress of staying in gridlock longer than necessary, citing a failed portion of the bridge on approach to Alaka.

For motorists on the bridge, also called Second Mainland Bridge, it has been long tortuous days commuting from the Island to National Stadium en-route Continues on page 29

Inside

Five reasons fund manager is your plug in a declining yield environment P. 2 UBA provides $200m for Nigeria’s petroleum industry P. 2

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news Absence of inflow, liquidity squeeze may hamper investors demand for T-bills ... Investors to remain alert for commercial papers offering - Afrinvest ... Naira maintains stability at N474 on black market Hope Moses-Ashike

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he expected increase in the demand for the Nigerian treasury bills (NT-Bills) by investors may be pressured as a result of liquidity squeeze occasioned by absence of any inflows into the financial market this week.

Analysts at Afrinvest Securities Limited expect to see more demand in the NT-bills space due to the unmet bids from last week’s Primary Market Auction (PMA).

Consequently, investors are advised to take advantage of the relatively attractive bills along the curve while also remaining alert for commercial paper offerings that might be announced.

Trading on the Nigerian Treasury Bills secondary market was relatively quiet last week as unattractive yields and limited supply of bills dragged activity all through the 3-Day week.

Investors stayed on the sidelines, awaiting the Primary Market Auction that held on Wednesday. Consequently, average yield closed flat at 1.8 percent despite the healthy liquidity level of about N769.2 billion as at Wednesday.

A report by the firm

showed that the 10-Sep-20 and 17-Sep-20 NT-Bill maturities witnessed mild buying interests, shedding 3bps and 5bps W-o-W, respectively.

While the 15-Oct-20 (+10bps) and 01-Oct-20 (+3bps) bills witnessed slight sell-offs and other instruments across the curve traded flat.

The CBN rolled over a total of N266 billion across the 91-, 182- and 364-Day tenors at the PMA on Wednesday, which was followed by strong demand of N468.3 billion as all tenors were oversubscribed. Most demand was particularly recorded on the 182-day tenor, which had a 2.9x bid-to-cover ratio.

However, the apex bank only allotted the total amount offered. Though, average stop rates declined across the curve to 2.0% (-12bps).

At the bond market, the FGN bonds secondary market sustained its bullish trend last week, with demand trickling in from the quantum of unfilled bids at the primary bond auction. Strong buying sentiments were also observed on the back of relatively high system liquidity as well as bond coupon inflows.

Accordingly, average yield

Five reasons fund manager is your plug in a declining yield environment Endurance Okafor

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he uncertainty in Nigeria’s investment environment heightened by the outbreak of COVID-19 and the Central Bank of Nigeria’s (CBN) recent monetary policy that sent yields on government securities to a single digit has increased investors’ appetite for attractive instruments.

With a record-inflation rate that has risen for 10 consecutive months to 12.56 percent in June, yields on fixed-income instruments are mostly negative for investors. Although they have investment capital but the attractive yielding securities are either unavailable or limited.

“Cultivating a relationship with a local fund manager could offer several advantages to investors in this season,” FBNQuest, one of sub-Saharan Africa’s leading merchant bank and asset manager, says.

While interest rates in Nigeria have always been high due to the monetary system in vogue since 2009, which sought to use FGN bonds/T-bills and OMO bills as a means of attracting US dollars into the country to stabilise the naira, the recent OMO policy by the CBN, which prevents domestic investors from participating in the auction is the key driver of the recent low-interest rates.

Yields on both T-bills and bonds instruments have hit a

bottom record from a double interest rate enjoyed some four years ago.

Fixed-income investors seeking high-yielding securities from the last Treasury Bills (T-Bills) auction conducted by the CBN on behalf of the Federal Government of Nigeria (FGN) were disappointed as the highest yield on the shortterm instrument stood at 3.4 percent. Also, more than N200.75 billion bids were unsuccessful, a pointer that shows the high liquidity in the financial system.

According to FBNQuest, the services of a fund manager are important at a time like this due to the following reasons: Seeking opportunities with diversified risk

With the core responsibility to implement a fund’s investment strategy and manage its trading activities, a fund manager can offer clients the expertise to spot opportunities.

While the search for an instrument with attractive yield could expose an investor to higher risk related to the volatility of returns or the liquidity of the instrument, a portfolio manager is equipped with the resource to help an investor review the investment objectives in the context of the economic circumstances of the client.

Monitors investment Portfolio manager bears the stress associated with constantly monitoring finan-

Continues on page 29

The failed portion at the end of Eko Bridge close to Alaka Bus Stop, Lagos.

Pic by Pius Okeosisi

Continues on page 29

UBA provides $200m for Nigeria’s petroleum industry ...acts as Lead Arranger for $1.5bn facility to boost oil production, government revenue

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nited Bank for Africa plc (UBA), a pan-African financial services group, has acted as the Lead Arranger of a consortium of Nigerian commercial and international banks in a $1.5 billion pre-export finance facility for the Nigerian National Petroleum Corporation (NNPC) and its upstream subsidiary, the Nigerian Petroleum Development Company (NPDC).

UBA is providing $200 million (naira equivalent) to support investment growth and liquidity requirements.

The facility will provide much needed capital for investment in NNPC’s production capacity, which is of strategic importance to the Nigerian economy and the country’s leading source of foreign exchange earnings. UBA’s position as Lead Arranger recognises the Group’s strength in structuring and deploying financing to the oil and gas sector, and the depth and liquidity of the Group’s balance sheet.

The $1.5 billion facility is structured in two tranches.

The first tranche of $1 billion, to be repaid over a period of five years, will be provided in dollars, with UBA acting as the Facility Agent Bank.

The second tranche of $500 million will be provided in local currency, over seven years, with UBA acting as Lead Bank, providing $200 million in Naira equivalent.

Both facilities will be repaid from an allocation of 30,000 barrels per day of NPDC’s crude oil. UBA has a strong track record in the resources sector across Africa, having facilitated oil prepayment deals with the NNPC, including its 2013 $100 million participation in the PXF Funding Limited transaction, and a further $60 million in the 2015 Phoenix Export Funding Limited transaction. In Senegal, UBA was responsible for the EUR 240m revolving crude oil financing facility for the Société Africaine de Raffinage

Continues on page 29 www.businessday.ng

COVID-19 could leave bitter aftertaste in education as students opt for apprentice - SBM research BUNMI BAILEY & SEGUN ADAMS

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he number of outof-school children in Nigeria, which already accounts for a fifth of the world’s out-ofschool children, could worsen due to the coronavirus pandemic that has disrupted learning and forced parents in the lower-income bracket to enrol their children in apprenticeship programmes.

According to a 2020 midyear survey by SBM Intelligence, done with the backing of OSIWA (The Open Societies Initiative for West Africa), lower-class respondents say they put their children in apprenticeships because staying at home was not helping them achieve anything, and shortly after, began to see income coming in.

This trend could persist post-pandemic in Nigeria

where 10.5 million of the country’s children aged 5-14 years are not in school, according to United Nations Children’s Fund (UNICEF).

“Some parents in Lagos made it clear that they are, at the moment at least, not interested in having their children go back to school because they already put their children in apprenticeship programmes,” the SBM report states, “The most popular programmes are programmes for auto mechanics, tailoring and painting.”

One of the respondents, Mummy Sikiru, a mother of three in Isolo, Lagos, told SBM her two sons had been roaming the streets playing with other children.

“They did not touch their books, and the promise of radio-based education never came. So, I decided that

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instead of allowing the boys to continue wandering the streets with other children, it was best that they learned a skill in carpentry that could help them in future,” Sikiru said.

On March 19, 2020, the Federal Ministry of Education approved school closures as a response to the pandemic. For nearly the equivalent of a full school term, many students have been unable to study because they lack tools to enable e-learning, and some schools are not equipped for such.

Notably, Lagos, Ogun and Edo states Ministry of Education released a schedule of radio and TV lessons for students in public schools.

This has not been effective, according to BusinessDay findings.

Slightly more affluent @Businessdayng

parents told SBM that they had hired private teachers for their children to hold private classes in the morning, but in such cases, the children still went for apprenticeship programmes later on in the day.

Even with positive news last month by the Federal Ministry of Education announcing secondary schools reopening on August 4, for JSS3 and SS3 students, some children might not go back to school.

Sikiru is clear that while her children will return to school upon resumption, they would still have to keep learning the job after school hours and on weekends until they are perfect.

Sikiru’s children will be better-off than Iya Aina’s, a cleaner at a bank in Ibadan

Continues on page 29

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news Malabu Oil: FG to file charges against 6 companies, ex-govs as Adoke re-arraigned Felix Omohomhion, Abuja

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conomic and Financial Crimes Commission (EFCC) on Tuesday hinted that another money laundering charges would soon be filed against six companies, some unnamed exgovernors and high placed individuals over the OPL 245 - Malabu Oil deal.

Bala Sanga, prosecution counsel, dropped the hint at the Federal High Court, Abuja, after a former attorney general of the federation (AGF) and minister of justice, Mohammed Adoke, and an oil magnet, Aliyu Abubakar, were re-arraigned on a 14-count amended charge for allegedly laundering over N797million and $107million proceeds from the deal.

When the matter came up yesterday, the anti-graft agency insisted that about $1.6 billion Malabu Oil deal was distributed to some powerful individuals, including some former governors through the bank accounts of the six companies.

Meanwhile, Adoke and Abubakar pleaded not guilty to the 14 counts amended

charge when read to them.

After their pleas were taken, the prosecution counsel invited the prosecution first witness.

But, the trial judge, Justice Inyang Ekwo said the defendants needed time to prepare for their charge. He consequently adjourned the trial to August 11, 12 and 13.

The EFCC had on two previous occasions arraigned both defendants before the Federal High Court, Abuja on similar charges.

They were first arraigned before Justice Binta Nyako in February 2020 and then Justice Inyang Ekwo on June 17, 2020 on a seven- count criminal charge.

Although Ekwo had in June while admitting the defendants to bail, fixed August 3, for commencement of trial, the trial, however, could not commenced on that day following the amendment of the former charge.

Prosecution counsel, Sanga had drawn the court’s attention to the amended charge dated July 22 and filed July 29 and sought for the arraignment of the defendants on the new charge. www.businessday.ng

Government raises fine for hate speech to N5m, unveils new broadcasting code Daniel Obi

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he Federal Government has raised penalty for hate speech from N500,000 to N5 million for each offender.

This is to obviate the hate speech through media platforms, a development that characterised 2015 elections and heated up the Nigerian polity.

The new fine is contained in the controversial Reviewed Broadcasting Code which the minister of information and culture, Lai Mohammed launched in Lagos. The new law is the amendment to the 6th edition

of the broadcasting code.

While launching the document, the minister said this drastic action was to checkmate hate speech from political actors and their supporters through print and broadcast organisations. He said any violator found guilty of publishing hate speech must be made to pay the fine and those who found guilty thrice would have their operating licenses suspended.

“Before now, any media house can over charge the sponsor of hate speech and easily pay the N500,000 fine but now, it will be difficult for them to pay the fine”, he said.

The minister, who made frantic efforts to defend the new broadcast code, said that section 2h of the NBC Act specifically empowers the commission to establish and disseminate a National Broadcasting Code and set standards with regard to the content and quality of materials for broadcast.

On the provisions for Exclusivity and Monopoly, the minister who was in the company of director-general of National Broadcasting Commission (NBC), Armstrong Idachaba said the antitrust provision would boost local content and local industry due to laws pro-

hibiting exclusive use of rights by broadcasters who intend to create monopolies and hold the entire market to themselves. “It will encourage open access to premium content”.

He explained that this provision was not new to the Nigerian broadcasting industry.

“Exclusivity was disallowed at certain time in the history of our broadcasting. I recall Multichoice sub-licensing EPL matches to other local operators in Nigeria. I recall HITV engaging several local operators on sub-licensing the EPL when they got the rights”, he said.

WAEC releases final timetable for conduct of 2020 WASSCE KELECHI EWUZIE

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he West African Examinations Council (WAEC), Nigeria has released the final international timetable for the conduct of WASSCE for school candidates, 2020.

The council in a statement made available to BusinessDay urged stakeholders, including schools, parents and candidates to disregard

several other versions of the examination timetable that have been in circulation, as it did not emanate from them.

In the statement signed by Demianus Ojijeogu, head of public affairs, WAEC Nigeria said the examination slated to begin on Monday, August 17, 2020, would end on Saturday, September 12, 2020.

“The council hereby urges the candidates to abide by the rules and regulations guiding the conduct of the examina-

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tion by shunning all acts of malpractice and obeying all Covid-19 protocols that have been put in place at the examination centres.”

BusinessDay had earlier reported that 1,549, 463 candidates have registered for the 2020 West African Senior Secondary Certificate Examinations (WASSCE).

Patrick E. Areghan, head of Nigeria National Office of WAEC, stated that there was a novel development in this @Businessdayng

arrangement for this year’s examination in the sense that the examination would be held from Monday through Saturday, in order to achieve the five-week span.

He further noted that the choice of the period for the conduct of the examination was not arbitrarily set; adding that WAEC consulted extensively with the governments of all the five-member countries before arriving at the examination period.

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Chinese loans: Diplomatic immunity not commercial immunity, AGF tells NASS MIKE OCHONMA

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inister of justice and attorney general of the federation, Abubakar Malami on Tuesday provided explanations on Nigeria’s sovereignty not being at risk in the country’s loan agreement with China.

The clarification is coming on the heels of the raging controversy over the varied and diverse loan interpretations agreement between China and Nigeria in many quarters for some of on-going standard gauge rail projects across the country.

Malami while answering questions alongside Rotimi Amaechi, minister of transportation, on ‘Good Morning Nigeria’ aired on NTA, Tuesday morning, explained the difference between international diplomatic immunity which

relates to a nation’s sovereignty, independent existence, and commercial immunity which has to do with a commitment to ensure repayment of loans The AGF said the misconception is that the National Assembly is looking at the diplomatic immunity as against the commercial immunity of a country when it has to do with loans, adding that there is no concession whatsoever made as it concerns Nigeria’s diplomatic immunity.

“If you talk of immunity within the context of diplomatic immunity which has the implication of the independence of a state and its institutions in its own right, there is no concession whatsoever made by Nigeria as it relates to diplomatic immunity that has to do with its independent existence as a nation, neither was any concession

made as related to institutional diplomatic immunity of the Nigerian institutions.

“But when you talk of immunity within the context of commercial sense, that is where I think we need to clarify issues with particular reference to the loans and commercial transactions among nations’’.

According to Malami, concessions relating to immunity for the purpose of provision of commercial guarantee are a normal traditional ritual.

Nations enter into respective interstate agreements and in the course of so doing, surrendering their jurisdictional immunity.

It is on account of that for example that you see Nigeria signing an agreement with other institutions or nations and agreeing to a choice of territorial jurisdiction for the purpose of determining disputes when

they arise.

So that is how eventually you see Nigeria submitting to jurisdiction for determination of a trade dispute in UK, in Paris and in other international fora even when the country as a nation has diplomatic immunity.

“And that brings you to commercial immunity; the context and the implication of a commercial immunity or sobriety.

It’s indeed embedded in an appreciation that country A requests for a loan facility from country B and then country B is entitled as a matter of right to extract a commitment; an understanding that at the end of the day, the loan advance will eventually be paid. So it is indeed a concession and sobriety, giving an undertaking, providing a guarantee for repayment of the facility when the need arises.

Business activities to improve as managers show optimism Gbemi Faminu

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fter three months of disrupted economic and commercial activities, managers of local manufacturing companies are hopeful for silver linings in the dark clouds of the economy.

This was seen in the recently released July manufacturing purchasing manager’s index (PMI) which stood at 44.9 points, representing an improvement of 3.8 points above the 41.1 points achieved in June.

The PMI report released by the Central Bank of Nigeria (CBN) is an indicator of how the sector fares in a month and also the changes in the level of business activities in the current month compared with the preceding month.

The PMI is usually computed based on survey responses from sector leaders as well as five major metrics which are production level, level of new orders, suppliers delivery time, employment level and raw materials inventory.

For the month of July,

the PMI report showed that production level grew by 8.1 points to 44.7, new order grew by 6.7 points to 43.1 points, raw materials inventory grew by 2.2 points to 43.2 points, and quantity of purchases grew by 3.8 points, stock of finished goods also improved by 2.7 points.

“The Manufacturing PMI in the month of July stood at 44.9 index points, of the 14 surveyed subsectors, transportation equipment subsector reported growth (above 50 percent threshold) in the review month while non-metallic mineral products sector reported no change,” the report states.

Although below the 50 index point benchmark, it reflected an improvement and manufacturers are hopeful that going forward, business activities will fully resume and get better.

Francis Meshioye, executive director, JMG Limited, in an interview with BusinesDay said despite the difficult period, business activities are reviving, however, slowly and with hitches.

Medical expert tasks Nigerians on diabetes test …as Q–Life Family Clinic honours founder after 20 years

Anthonia Obokoh

L-R: Shehu Dahiru, principal, Federal Government College Kwali; Chukwuemeka Nwajiuba, minister of State for Education, and Sonny Echono, permanent secretary, Federal Minister of Education, during an assessment tour to inspect Federal Secondary School Kwali, to ascertain the level of preparedness in line with Federal Government’s COVID-19 guidelines as schools re-open in Abuja yesterday.

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Real estate professionals say new stamp duty will impoverish Nigerians CHUKA UROKO

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s the debate on the propriety or otherwise of the new stamp duty charge on house rent and C-of-O by the Federal Inland Revenue Service (FIRS) rages, estate surveyors and valuers have warned that it will further impoverish Nigerians, urging the Federal Government to rescind its action.

The real estate professionals under the aegis of Nigerian Institution of Estate Surveyors and Valuers (NIESV) note that the new tax regime lends itself to being counterproductive in the face of the ravaging impact of the global health emergency called coronavirus

(Covid-19) pandemic.

However, the institution, which is a critical stakeholder in the built environment, has advocated for a N1000 flat rate stamp duty charge on this category of instrument.

Landed property and real estate, according to the institution, are veritable tools for economic recovery and development, hence government should take advantage of this factor of production to escape recession and steer the country onto the path of economic sustainability.

“While property is universally acknowledged as a veritable vehicle of recovery from recession, albeit economic depression, it is a gross anathema to introwww.businessday.ng

duce a tax regime that will frustrate land and property transactions and development,” said Emmanuel Okas Wike, president, NISEV, at a press conference in Lagos on Tuesday.

Wike explained that housing and property development were already overburdened with multiple taxes like the building plan fees, governor’s consent fees, capital gains tax, development levy, land use charge, capital transfer tax, withholding tax, VAT among others.

“We must state emphatically that the 1.5 percent ad valorem charges on Deeds, Power of Attorney and MoU documents which are instruments of physical develop-

ments will stifle investments in housing and real estate,” Wike said.

He noted that the introduction of a revised stamp duty tax regime by FIRS will only worsen the precarious economic situation of the poor and the citizenry in general.

Accordingly, the institution is of the view that Nigerians would rather request for government intervention by way of palliatives and financial stimulus packages at a critical time like this when most businesses are still struggling to get back to full capacity to cushion the effects of the pandemic and set the stage for a gradual and sustainable recovery of the economy.

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deniyi Bukola, consultant family physician and travel medicine physician at Q –Life Family Clinic has advised Nigerians to go for a diabetes test to ensure early detection of the disease.

She gave the advice during founder’s day in honour of late Olufunmilayo Alakija with the theme ‘health is wealth’ focusing on diabetes mellitus.

Q-Life Family Clinic was founded out of a need and desire to solve the problems we identified in the Nigerian healthcare system. The name “Q-Life” (Quality Life) was derived from a need to encourage people to promote and adopt a healthy lifestyle.

Many diseases can be prevented or their consequences minimised by change of lifestyle. This is critical to management of all chronic ailments. The “family” infers that the health services are for all - children, adults, and the elderly. The “Clinic” connotes it is an out-patient facility, said Bukola.

In her presentation, Bukola described diabetes as “when your blood glucose (sugar) is too high, and a diagnosing of diabetes mellitus is when the fasting blood sugar is greater than FPG (= @Businessdayng

>7.0mmol/l) or the Random blood sugar is greater than (RPG=>11.1mmol/l).”

“Recent studies show more young people starting lives with type 2 diabetes or prediabetes as a result of poor diet and/or physical fitness while at school, and risk factors for type 2 diabetes/ prediabetes include High Body Mass Index (BMI), little or no physical activity and family history of diabetes,” said Bukola.

She noted that three major diabetes types can develop which are type 1, type 2, and gestational diabetes, adding that people with type I diabetes are insulin-dependent, which means they must take artificial insulin daily to stay alive.

She further explained that people with prediabetes are, however, at risk of developing type 2 diabetes, although they do not usually experience the symptoms of full diabetes, adding that complications from diabetes can cause cardiovascular disease, Kidney and eye damage, hearing impairment and depression.

“Changing your lifestyle could be a big step toward diabetes prevention — and it’s never too late to start.

Healthy lifestyle goes a long way in preventing type 2 diabetes mellitus,” Bukola advised.

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Olumide Akpata: Make a difference!

Franklin Ngwu

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ear Olumide, with your historic election as 30th President of the Nigerian Bar Association, I say a very big congratulations!

I however have mixed feelings, one of happiness and one of serious worry.

The one of joy derives from the fact that at 47 years old, you deployed a properly crafted strategy to break a 30-year jinx and the won election from the outer bar. My worry is if you will follow your manifesto and live up to your promises and expectations of thousands of lawyers that voted for you and that of many other Nigerians that prayed and worked directly and indirectly for your victory.

As you are aware, Law is one of the most important instruments that can be used to create a sustainably growing and inclusive society or a stagnated and retrogressive one. Your actions or inactions in the 2 years that you have will significantly contribute to the direction our dear country will follow. No doubt, 2 years is very short, but you can make a huge difference with determination which many people believe that you have in abundance. Our dear country is at cross-roads and failing in almost all fronts with the failure primarily attributed to the absence of rule of law and good governance.

With “promoting rule of law as an instrument of social change in Nigeria” the mission of Nigerian Bar Association (NBA), it means that the foremost professional association of over 120,000 lawyers you have been elected to lead

have failed in their mission, vision and core values. By extension, you and your “learned colleagues” have failed Nigeria, our dear nation that you all swore to defend and support!

Encouragingly, you expressly stated this disappointing failure of NBA in your manifesto where you stated that you “believe that the NBA is currently punching below its weight. Indeed, there is a widespread sentiment within the profession that the NBA is grossly lacking in utilitarian value and that many lawyers have remained members of the Association simply out of compulsion”.

While I commend you for being forthright in acknowledging the failures of NBA, it is important to state that you understated the situation. NBA is not punching at all and can be better described as limbless and possibly paralysed especially with the outgoing leadership. The ambivalence or silence of NBA in key national issues particularly ones relating to rule of law and good governance is not only shocking but shameful. This is also the case with the utilitarian disposition expected of lawyers, the supposed members of “the noble profession”.

Not only is it grossly lacking as you stated, there seems to be an increasing proclivity amongst lawyers to work against the interest of a decent society and Nigeria. This is arguably even more with our inner bar, the Senior Advocates that seem to be more interested in protecting their elevated positions mainly for their own interests and promotions.

With the hope that you want to make a difference, below are the expectations Nigerians have of you.

First, as charity begins at home, you should not use the NBA presidency primarily as a platform to negotiate or advance your elevation and admittance into the ruling class as some of your predecessors did. I implore you to focus unwaveringly in advancing the mission, vision, motto and core values of NBA with utmost sincerity and patriotism.

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While I commend you for being forthright in acknowledging the failures of NBA, it is important to state that you understated the situation. NBA is not punching at all and can be better described as limbless and possibly paralysed especially with the outgoing leadership

A very important aspect that requires urgent review is the 2-year tenure of leadership. It is self-serving and counterproductive. To make any meaningful impact, it should be a minimum of fouryear limit with option of re-election for a second term. With you not positioned to be the first beneficiary, pursuing such selfless reforms will endow you with more lasting, sustainable and impactful elevation.

Second, given the importance of lawyers and particularly the Senior Advocates of Nigeria (SANs) in shaping societal development through law, a critical review of the criteria used in elevation of lawyers to the inner bar is pertinent and urgent. A situation where lawyers are promoted into the rank of Senior Advocates principally based on their intellectual understanding and usage of the law and its technicalities to win cases is inappropriate. As the name implies, elevation into the rank of Senior Advocates should be based on not only good understanding of the law but mainly on the comprehensive assessment of the lawyer’s ethical disposition, antecedents, actions and inactions, and deep inclination for a decent and sustainably inclusive Nigeria that is intrinsic.

Third, as you rightly said, the need for a review of the curriculum used in training lawyers cannot be overemphasised. In addition to technology law as you mentioned, it will be helpful to include important courses such as law and economics for development, law and sociology, law and finance for inclusive growth, ethics and leadership with some of them such as ethics made compulsory course from university to law school. With our present formal law limitedly understood, accepted, internalised and complied with due to its origin and adoption method, inclusion of the identified courses and more will help create a new culture and set of lawyers needed for 21st century Nigeria’s sustainable and inclusive growth.

5 ways African governments can address chronic homelessness in cities

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e Africans have a once in a lifetime opportunity, but it is an opportunity that currently looks like our biggest challenge: Homelessness.

Over 68 million Nigerians are homeless or living in unplanned housing. And homelessness often goes hand-in-hand with poverty. In fact, 75 percent of the world’s poorest countries are in Africa.

Why is this the case?

To start, we must acknowledge that poverty is a complex issue. There are many contributing factors found in our shared history, culture, and policy decisions. That said, a major reason why poverty is prevalent in our continent is that the African population is outgrowing economic development. According to a World Bank report, while East Asian countries invested over 40 percent of their GDP over a 30+ year urbanisation period, African cities hover around 20 percent.

Meanwhile, when the East Asia and Pacific region became 40 percent urbanised, their GDP per capita was $3,600. Sub-Saharan Africa is approximately $1,000. Healthcare spending is also low, and infrastructure is lagging. In other words, Africa is urbanising while poor.

But, again, there are future opportunities in our present-day challenges.

That’s why I believe that in our generation, African governments can solve chronic urban homelessness. Let’s look at a few trends that explain why Africa is well-positioned to solve homelessness.

Innovation is moving east. A 2011 research paper suggests that the flow of innovation is no longer solely from west to east, but increas-

ingly east to west. There are also doubts about America’s future as a world superpower. Asian countries, specifically China and India, are catching up. And Nigeria could be Africa’s first global superpower in the future if it can help lift its people out of poverty.

Using microfinance. How can the poor lift themselves out of poverty? Microfinance services like m-PESA and Kiva allow low-income users to access small loans for food, healthcare, education, not to mention entrepreneurship.

Microfinance in Africa expanded 1300 percent between 2000-2012 and can be applied to building new or renovating current public housing.

Embracing frugal innovation. You know what they say, necessity is the mother of invention. What can countries do when they have big problems and little resources? They turn to Frugal Innovation, the ability to use minimal resources to maximise value. It’s an idea that originates in India, has been making its way to Africa, and can be applied to addressing homelessness as you will see.

What more can governments do?

None of these trends are single solutions to eradicating poverty and homelessness. However, in my opinion, here are five recommendations that African local governments can adopt to make a difference on this issue.

1. Modernise and invest into city planning departments To address homelessness and to grow sustainably, local governments need to grow their city planning departments with the goal to improve building regulations, attract more qualified building developers to their city and

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approve more building projects. The majority of homelessness is due to a lack of supply in the housing market and poverty among housing buyers/renters—promoting new construction addresses both of these problems by creating local construction jobs and adding new building units for people to live in.

2. Take advantage of new technology Related to the point above, it is also vital that local governments use technology to create ‘smart cities.’ Let’s face it. Humans are prone to error. There have been studies exploring how AI and machine learning can help city planners by analysing and suggesting changes to optimise our cities. These technologies promise to reduce cost and increase efficiency, thereby freeing up resources to invest in housing.

3. Promote the development of high-rise buildings, but not too high Building developers like myself are well aware of an interesting paradox when it comes to density in urban areas. Buildings that are taller reduce the square meter cost of living space, allowing for more affordable living spaces in a single plot of land. But when you build buildings that are too tall, it can actually increase the cost of each living space due to the extra costs that go into more expensive elevators, fire suppression systems, and many other building codes. This is why local governments need zoning regulations that encourage the development of many more buildings while limiting their height to no more than six to 12 stories.

4. Keep buildings simple All city planners love approving the construction of buildings with eye-catching

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Fourth, as the foremost professional association of lawyers in Nigeria, NBA under your leadership should not be seen to be ambivalent or disinterested in important national issues. Nigerians expect that under your leadership, NBA will be a robust proactive organisation with an unquestionable disposition for progressive and inclusive Nigeria. This point cannot be over-emphasised, but it is important to state as follows. The silence or uncertainty of NBA has contributed to many of our social problems such as the pervasive insecurity, corruption, nepotism and poor governance of Nigeria. It should be noted that the killings in Southern Kaduna, rampant kidnapping, Boko Haram, increasing poverty and unemployment cannot be disassociated from many years of poor leadership and failure of NBA among other factors.

As a lawyer, you should be conversant of the inherent challenges of governance in a plural society such as Nigeria especially when the formal legal system is adopted and different from the inherent and varied informal laws (norms and values) of ethnic groups that make up Nigeria. Under your leadership, Nigeria expect NBA to lead the advocacy for a restructured Nigeria starting with devolution of powers through the transfer of some items in the exclusive list to the concurrent and residual lists.

While we do not suggest that you should be aggressive to the federal and state governments, we expect you to lead and engage with courage, good and objective criticism with the larger interest of lawyers and Nigerians paramount in your engagements and leadership.

I wish you the best and please be assured of our prayers and support!

Dr. Ngwu, is an Economist/Associate Professor of Strategy, Corporate Governance & Risk Management, Lagos Business School and a Member, Expert Network, World Economic Forum. E-mailfngwu@lbs.edu.ng.

Ronald Chagoury Jr designs, but when it comes to addressing homelessness, simpler is better. Square or rectangular building designs optimise the use of floor space, allowing builders to fit more units per building while also keeping per unit costs lower than average.

5. Invest in future building techniques I plan to explore this topic in a future article, but I will say that we are seeing more innovation in construction techniques today than I’ve seen in the last two decades. For example, companies in the US and China are experimenting with construction-grade 3D printers that can print homes and buildings in days instead of months.

In China, they are also experimenting with mass producing entire building floors that can then be shipped to the construction site in pieces and connected together like LEGO pieces. Using these innovations and more will dramatically reduce the cost of housing development and improve the affordability of public housing.

There you have it, five recommendations that can have a real impact on improving African housing affordability and reducing homelessness over time. It’s clear that Africa is already off to a great start. It also helps that these recommendations are beginning to accelerate globally, making it easier for African cities to adopt them with minimal risk.

Chagoury is the Vice Chairman of Eko Atlantic City. He covers topics relating to the current and future of Africa as he is a big believer in the untapped potential of the continent. You can learn more about Eko Atlantic at www.ekoatlantic.com.

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Recovery 108: Ending the lip service to cost containment in Microfinance (1) Small Business handbook

Emeka Osuji

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he concept of cost has been a very important thing to humanity. Every successful business owner understands that expenses are like the swimming pool. There is not always a sharp divide between the shallow and the deep side. Amateur swimmers playing at the borders may find themselves drowning in the pool as water suddenly draws them to the deep side. Allowing unnecessary cost to mount is a risk no business should take.

No wonder a whole body of knowledge called Cost Accounting has developed.

The founding fathers of the Accountancy profession must have figured that if the cost of running an organisation is allowed to run away, it might take with it the heart of the business – its capital.

Capital, being fundamental to the existence of a business, is like oxygen.

You have it and you have life. Without it, all kinds of complications, including COVID-19-type symptoms, such as respiratory tract infections, will begin to manifest. Delay in finding remedy for capital inadequacy may lead to death. Like the asymptomatic victims of the rampaging COVID 19 pandemic, corporate death may occur, without much notice. The symptoms of capital shortage are also dire and sometimes mimic those of the pandemic. Shortness of breath, or corporate life, if you like, is the scariest one.

In essence, like a COVID-19 patient, a business that lacks capital could die

suddenly. This is why all efforts must be arrayed in favour of continually educating our entrepreneurs on the significance of capital in the life of a business, and to make sure that every business entity raises and maintains the right level of capital at all times.

The microfinance industry is a vital agent of economic development. Its members serve the poor and most vulnerable members of the society who, incidentally, constitute the life wire of their societies. The Micro, Small and Medium Enterprises (MSMEs), which they serve, account for about half of the world’s Gross Domestic Product and three quarters of its jobs. In many societies, this segment of the economy accounts for well over 60 percent of all economic activity. The financial institutions supporting this critical segment of the economy are doing a national service and must be protected through the application of public policies that impact them positively.

Unfortunately, poor capitalisation is rife among MFBs, making it difficult for them to effectively deliver meaningful service to their clients. This is why the ongoing effort to douse the impact of the current pandemic on the MSME sector must be implemented with a view to also strengthening the microfinance institutions that serve them.

As governments work to return spending power to households, and restore consumer demand, we must also guide MFBs, and indeed other microfinance service providers, to brace up and do what is necessary to sustain their operations, in the face of evaporating cash flows – manage their costs.

The effort to restore normalcy in the sector, I believe, should begin with directing policy action towards mitigating the effects of the capital erosion now confronting players in the sector. While financial palliative action to restore activity in the MSME sector, including the moratorium on repayment and interest rate cuts, which will help MSMEs

clients, are proceeding apace, it would be necessary for MFB operators to take certain important steps of their own to promote early return to normalcy.

One of such internal steps would be to directly confront the challenge of cash flow disappearance now evident everywhere.

MFB clients have suffered business failure and there is no way they would be expected to continue to service their loans effectively. The risk of default is now very highly probable.

Unfortunately, while existing loans are not coming back in a hurry, there is a heightened demand for cash among the clients of MFBs. This means that operators have to find ways of supporting their clients’ cash needs, one way or the other, despite the difficulty of recovering existing loans.

The challenge of booking fresh loans, to support a devastated clientele, at a time when most existing loans are tending towards bad and doubtful debts, is one of those conflicting objectives that economists have spent generations working towards, but never reaching the answer beyond the elegant concept of trade-offs.

The effort must begin with effective cost containment, which itself starts with a clear picture of the costs in a typical MFB or enterprise. I have always said that conserving cash is the perfect corollary of income improvement. If cash is not coming in, then conserve what is available by cutting all expenses and eliminating unnecessary ones; and they are many at every point in time.

That way, we achieve the same purpose of increasing available cash, simply by spending less.

In Nigeria, particularly in the public sector, when executives say they are implementing cost reduction programmes, they mostly focus on salaries and wages, which are no doubt often substantial, but only a small part of the problem. In more ridiculous cases the top shots offer cuts in their own sala-

‘

The challenge of booking fresh loans, to support a devastated clientele, at a time when most existing loans are tending towards bad and doubtful debts, is one of those conflicting objectives that economists have spent generations working towards, but never reaching the answer beyond the elegant concept of trade-offs

Dr Osuji is head of the department of Economics at Pan Atlantic University Lagos. eosuji@ pau.edu.ng @Emekaosujii

Pogom “

D

oes it make you a king to have more and more cedar? Did not your father have food and drink? He did what was right and just, so all went well with him. He defended the cause of the poor and needy, and so all went well. Is that not what it means to know me? But your eyes and your heart are set only on dishonest gain, on shedding blood and on oppression and extortion.”

For long I’ve opined that Nigeria doesn’t lack “leaders” but it has, for as long as some of us are old enough to remember, while much longer than the younger ones have any known, suffered from a glaring dearth of leadership.

A true leader can be defined in so many ways.

One, is that he should be full of conviction. He must have a clear sense of right and wrong and while there’s absolutely nothing wrong with enjoying personal success, it should not be as a result of denying others of what is rightfully theirs. The natural inclination of a true leader is also to help and better the circumstances of others.

A good political leader for instance, should be looking to serve the interest of his constituency whereas a good leader in the family or in a corporate entity should look to empower his people with values and skills that will enable them to have a better future. His food should be to inspire them to better themselves in every way. This tallies with one of my definitions of success which is in being able to help

another by passing across to them what you’ve learned from experience.

It is my conviction however that if our leaders can’t produce a good society, then our society urgently needs to produce good leaders. And that brings me to a word, of which I have never heard truer. It says, “When the disciples are ready, the master will appear. It’s the readiness and yearnings and aspirations of the people that will determine the calibre and character of those who rule them. In a society of rogues, honesty will be a heavy discount.”

I believe this was a strong admonition not to put the cart before the horse by a leader, who will continue to be revered for his uncommon vision and for doing all he could to better the lives of others. It was none other than Chief Obafemi Awolowo.

There are no two ways about it; until this message is sufficiently internalised and acted upon, we will continue to be the wrong type of people, selecting the wrong type of leaders.

And ironically, we’ll continue to wonder why things don’t work.; portraying us like that man who’s ever a sucker for punishment; always doing the wrong thing and yet coming back for more. Each time hoping for a miracle that this time around, the result will be different.

I remember a time in my childhood. I must have been about six years old. We spent the summer holidays in London, at my mother’s aunt’s house; Aunty Wembley, as we fondly called her then because that was where she

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and her husband lived. She had this small but lovely garden at the back of her house. It was squarish, just like a boxing ring. And that was just as well because that was what my older brother and I turned it into, anytime we were able to slip away from the prying eyes of the adults in the house. As we “entered the ring” we would do all the effizy of punching the air and doing the “Ali shuffle” like seasoned gladiators, trying to impress an “empty crowd”.

At the sound of the bell, “Pogom” which we made with our mouths of course, we would both come bounding out of our respective corners to engage in our “world title” bout. On my part, the bounding only lasted for about two rounds, after which it was more like a stagger but still, I would come out anyway. At that age, three years difference was no joke and it was certainly more than enough to guarantee me getting a good hiding. Punches were limited to only the shoulders but after some serious pummelling in the preceding round, I remember how heavy my arms would start to feel when trying to lift them up again. It was absolute agony.

Once I’d had enough and just couldn’t bear the pain anymore, I would surrender by just crumbling on the floor. But did I ever learn back then? Not really. I kept hoping and praying for a different result. And that was where the problem lay. Making a decision which from the very beginning could only go one way was utter foolishness but I did it anyway.

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ries, making a mockery of the idea of cost containment. MFBs must therefore affect real cost containment, which is not the same thing as cutting costs. It is more than that. They must contain their costs at this critical moment to shore up the needed cash to continue supporting clients, even as cash gets scarcer. Therefore, clear understanding of the cost drivers is critical to cost containment.

In this regard, I would like to group the cost elements of an MFB operation into two broad segments, for ease of analysis. They are the Cost of Sales and the Cost of Selling. Financial institutions, particularly those engaged in financial intermediation, are in the business of buying and selling a commodity called money, simplicita.

Accordingly, they incur costs to buy money (cost of sales) and when the money is sold (lent out), some costs also happen. Interest expense is the cost of the money bought either as fixed or savings deposits. A smart bank must keep an eye on its interest expense and, as much as possible, dilute the impact of high cost funds on its Net Interest Margin with the soothing effect of lowcost deposits.

On the other hand, in the course of running the operations of the bank, costs are incurred in the form of wages and salaries, business promotion and even deposit insurance. These are operating costs and may be classified as the cost of selling. It is important for MFBs to clearly understand the dynamics of each cost element, and gain mastery over it. For instance, if account officers understand the importance of Net Interest Margin, then they will not require much admonition to focus on cheaper savings deposits and limit emphasis on costly corporate deposits, in their efforts to grow liabilities.

Character Matters with Daps

Dapo Akande Well, at least I could be excused somewhat, as I can easily put the error in judgment down to my age then. No one would accept that as an excuse if I was to do the same now.

A man once said, “We must learn to make the connection between choices and consequences. Because we’re responsible for the choices we make, we cannot deny responsibility for their consequences also.” I believe these would be wise words to live by.

“Pogom” is the alarm bell that urgently needs to reverberate in the mind of every Nigerian who genuinely desires to see a positive change in the affairs of our dear land.

Changing the nation...one child at a time.

Akande is a Surrey University graduate with a Masters in Professional Ethics. An alumnus of the institute for National Transformation and author of two books; The Last Flight and Shifting Anchors. Contact: dapsakande25@ gmail.com

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From risk to reward: The SMEs perspective

Timi Olubiyi

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n many of Africa’s developing nations, running a business or setting up a new one is a brave move for even the most qualified of entrepreneurs. This is due to the prevailing harsh economic and business environment on the continent. However, irrespective of the form of investment or business consideration, there will always be some risks involved or obstacles to overcome to achieve success. Starting up a new business or firm is a high-risk exercise in itself. All business enterprises face a wide variety of risks, some of which come from within the company and others from outside.

Therefore, part of the true strength and courage of an entrepreneur is the ability to accept risks, and even when a setback is experienced, to have the nerve to come back and retry again.

Entrepreneurs are usually risk-takers, who often spot opportunities in the market and develop new ideas for products and services by combining resources available at disposal. These steps typically come with associated risks because every business decision has an element of risk. This means that an entrepreneur cannot avoid risk in setting up a new venture or start-ups. Available data and reports have shown that a large proportion of new businesses eventually fail in the incubation stage.

Consequently, there is no guarantee of success in business, particularly in start-ups. This means that any entrepreneur willing to set up a company runs the risk of failure, often involving financial loss. Business activity can expose an entrepreneur to different forms of risk, from financial loss to business failure, or lack of security.

Objectively, the main risks facing businesses revolve around internal

factors such as customer and competitive behaviour, their current financial position, or external factors such as the economic climate, political stability, and regulation and compliance costs.

Other areas of risk to businesses are input costs, compliance costs, market manipulation by some players, competitor activity, cyber-crime, and debt. The current reality of the novel coronavirus (COVID-19) pandemic is equally a risk to businesses.

A contingent plan of a change of strategy might be essential for the progression of companies at this time.

Further to this, the government laws, policy responses to the pandemic and other forms of regulation invariably impose a wide and growing range of obligations on businesses, especially Small Medium Enterprises (SMEs). All these ordinarily will impact on business operations and its performance.

It is imperative to state categorically that the biggest risks in business are taken in the first few years of business operations. The economy, and society as a whole, benefit when enterprises carry out their activities successfully.

From context observation, businesses run the risk of funding, which is crucial at the start-up stage, followed by a sound business model to get the start-up off the ground, and very vital, the unique selling point (USP). Another significant position required for a business to be successful is a strong workforce, who share the same values and goals for the future and progression of the business/organisation. A lack of cooperation or disagreements about these key business factors can create roadblocks for maintaining successful growth. If any of the areas aforementioned fails, then it can have crucial implications for the future of the business. Risk is an inevitable part of every business venture, no matter the size or structure. Furthermore, to make a decision where the outcome is uncertain, unpredictable, and uncontrollable, financial wealth can either be gained or lost on the outcome of such a decision.

Meaningfully, it is possible to be in business and have manageable risks. Nonetheless, to mitigate risk in business, it is safe to consider risk management, which is one of the most important components of a successful business and investment plan. Some action to minimise risk in business

operations, including having insurance, adequate planning, diversifying locations, having good processes and systems in place, conducting market intelligence, and having the right staff.

Conventional risk management procedures can be adopted, which tends to focus on identifying, assessing and dealing with the risks associated with any of the business operations.

The relationship between risk and reward is one of the fundamentals of wealth creation globally and the focus of this article. Therefore, to create wealth, SME operators and entrepreneurs need to take calculated risks.

Risk is unavoidable, and every threat is also an opportunity to grow. So, entrepreneurs and SME operators need to recognise when the level of risk in any business operation is relatively too high. More so, with careful planning, an entrepreneur can minimise the amount of risk they could face by considering information, such as market research data, that is available to them.

Furthermore, financial planning and an internal audit will be integral in effectively managing business operations and useful to mitigate unforeseen risks. Any accountable business will exercise and have strict compliance on all the measures as mentioned above to stay aloft and also manage its affairs responsibly.

The rewards from business operations is a justification for risks taking, though, and these include both financial and non-financial rewards. The financial reward is the cash-based return and benefit accrued from taking risks. It can be said to be the return on investment or profits. However, the potential non-financial benefits naturally depend on entrepreneurs’ values and business circumstances, particularly that of the shareholders and the business operators. On the other hand, many non-financial rewards arise from motives achieved such as a sense of business satisfaction, independence, positive reputation, opening a new location, employing more staff, getting an industry award or good publicity/popularity and even, getting great positive feedback from customers.

Significantly, when making business decisions, entrepreneurs should consider the risks and rewards involved. Expectedly weighing risks and rewards should be the pivot of

‘

Significantly, when making business decisions, entrepreneurs should consider the risks and rewards involved.

Expectedly weighing risks and rewards should be the pivot of any investment or business decision.

However, in practice, businesses often disregard to consider risk against reward

Dr. Olubiyi is an Entrepreneurship and Small Business Management expert. He is a prolific investment coach, business engineer, Chartered Member of the Chartered Institute for Securities & Investment (CISI) and a financial literacy specialist. He can be reached on the twitter handle @drtimiolubiyi and via email: drtimiolubiyi@gmail.com, for any questions, reactions, and comments.

Strategic positioning: How powerful relationships are formed

A

few years ago, I heard one of my business mentors of inestimable worth, Niyi Adesanya, say that “success is based on your relationships.” I have found that to be very true. If you have good relationships with powerful people, you too will become powerful!

To fulfil purpose, you need to be a problemsolver; you need to have a solution and a platform to execute your solution. You need a lamp and a lampstand.

Solutions are rooted in skills and relationships are the most strategic platforms. You don’t need to serve everybody. Just serving one powerful person can earn you a fortune and attract the attention of the crowd to you. To unlock the big platforms that you desire, you need to establish strategic relationships and service them accordingly.

Relationships are established based on the exchange of value in the form of little favours.

Our labours are never enough. At best, they help us to survive; but to succeed, we all need

favours. This is why we establish relationships.

But whether people will be interested in having a relationship with you or not is determined by the value that you bring to the table.

Do you know that by just being in the presence of someone, you are stripping him of his privacy? By talking to him, you are placing a demand on his listening ability – he has to give you his ears. The problem is even amplified if he is busy with something else that he considers more important or he is just not in the mood to listen. To get him committed, you must have a strong reason that is not self-centred.

We will always have problems but rather than expecting others to solve our problems for us, we must first think of solving theirs for them. Consider any person that many people look up to today, they are solving other people’s problems – not just their own. Skilful men have the capacity to do favours to powerful men.

Because of this, kings have no choice than to favour them. This is how strategic relationships are earned and sustained.

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In the royal chronicles of Israel, it is obvious that David did a favour to Saul by killing Goliath because to Saul and the entire Israeli army, Goliath was a big deal. The Goliath episode was the beginning of David’s relationship with Saul. It also marked his transition from the wilderness to the palace (the big platform). By interpreting the king’s dream, Joseph did a favour to Pharaoh. Although he did it quite easily, that dream was a big deal to Pharaoh and the entire wise men and magicians of Egypt. Joseph’s favour of Pharaoh established his relationship to the throne. Previously, his platform was the prison.

What problems do you observe among people? What array of skills do you have to solve both small and big problems? What strategic relationships are you building with your skills?

If you must climb fast and far, you must be known for the problems that you are solving.

When it is said in the corridors of power that “I know a man,” let that man be you! That is why you need to be consistent. Don’t give up just because things are not working the way you

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any investment or business decision.

However, in practice, businesses often disregard risk against reward.

In many SMEs, including large listed firms’ risks are “managed” with little consideration of gain, and decisions are taken with scant regard to the risk involved. As a professional, the accurate recommendation is for SME operators and entrepreneurs to consider weighing up the risks associated with business decisions against the expected rewards. How should this be done is the big question? In practice, when taking a decision, there may be more than one gain and more than one loss, however, the ideal is to have the sum of the expected values of benefits to exceed the amount of expected values of losses.

Having a comprehensive business insurance policy in place can equally protect your business from many of the common risks faced in the day-to-day running, so entrepreneurs can have peace of mind and focus on the positive sides of the company. A successful business may always require a strategic plan, as well. Putting proactive strategies in place for how to take advantage of these risks will be a business differentiator. Part of a strategic business approach is to understand the market space in which one operates.

Several surveys have suggested a culture of having and conforming to standard business ethics, rules, principles and sound corporate governance mechanisms as helpful tools a business organisation can adopt.

After all, money is a central factor in the motivation and operation of a business. However, it is not advisable to get into business if you do not have some appetite for risk and failure. On that note, the risk is part of life and part of the company. Understanding and managing the risks involved in your business are key to achieving business success. Good luck!

How may you obtain advice or further information on the article?

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Insight for leading with

BRIGHT UKWENGA planned. Kings are not merely interested in you because you are good at what you do, they want to know how good you are! Therefore, every skilful man needs to master his skill and establish a track record through continuous output and improvement. This is what gains him the trust of the public and the powerful. Skills get you attention; track record gets you traction!

Ukwenga is an esteemed Author, Conference Speaker, Leadership Development Consultant, and the CEO, ScribeTribe an innovative media and publishing enterprise helping individual and corporate brands to express their ideas creatively and effectively

F a

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Wednesday 05 August 2020

BUSINESS DAY

Editorial Publisher/Editor-in-chief

Frank Aigbogun editor Patrick Atuanya

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

With the economy in ruins, business-killing regulations must go

T

he Nigerian economy has seen five years of negative per capita growth, shed millions of jobs and about half of the population now live in abject poverty. We must, as a matter of urgency rethink how businesses are regulated and hire sound people to plan this dying economy.

Poor regulation is now the most dangerous threat to businesses in Nigeria. Foreign Direct Investment (FDI) into the country now hovers around a paltry $1 billion yearly trailing smaller peers like Ghana.

The Manufacturers Association of Nigeria (MAN) said about 272 firms were forced out of business in 2016.

Our regulations are dangerous because they are not responsive to changes in the economic, social and technical conditions surrounding them. In developed countries, regulations follow developed markets and act as powerful stimulus to further innovation. Our regulations shrink markets, deter investments and get in the way of innovation and growth.

For example, renewal of oil leases and organising licensing rounds are routine processes in other countries except Nigeria. Various government agencies and state governments enact overlapping and frankly dubious rules for operators. Oil companies suffer multiple and disjointed regulations which raises costs, creates ambiguity, distorts project timelines, stifles investments and fosters ineffi-

ciency. For the past ten years, we cannot pass the PIB meanwhile our neighbours now have oil and big oil companies are spoilt for choice.

Access to land, foreign exchange, electricity, port operation suffers needless complications because of meddlesome regulations. With the exception of a negligible few, the various governments in Nigeria have shown crass incompetence at enacting sensible policies that will drive the economy.

The worst culprit is the federal government whose inept economic policies have provided the blueprint upon which various profligate state governments build poor economic plans.

Forward thinking governments have done away with price controls and sternly regulated markets. Even closed China opened its markets but we are doubling down. In 2020, we are still arguing about petrol subsidies and electricity tariffs. These days, governments are allowing for collaborative regulations with businesses, courting private capital and allowing entrepreneurs to give input in economic policies. The United States under President Donald Trump has seen tremendous economic growth due in part to deregulation and competitive tax policies that allowed businesses to thrive.

The rhetoric about protecting Nigerians from exploitation which provides justification for aberrant policies has done too great a damage. If anything, it is their ruinous governments Nigerians need protection from. Imagine if electricity tariffs were allowed to follow

the rules created under the Multi Year Tariff Order which prescribed biannual tariff review, by now the market would have stabilised. Instead, the federal government interfered, prevented a tariff increase and has burnt over N1.7 trillion on subsidies. Yet, output remains at 3,500MW for over a decade, consumers still pay more because they depend on generators and the sector is messed up.

The lesson various governments need to learn is that businesses have to thrive to help the government generate the required revenue to protect consumers. Now more businesses are leaving the country due to the asphyxiating business environment. Shoprite Retail Ltd, is leaving as well as others.

We need to stop trumpeting the lunacy that we are a strong economy simply because there are supposedly over 200 million of us. Too many poor people have little economic value.

This is why Shoprite is more profitable in a country with over 50 million people than with over 200 million.

Nigeria’s Motor Vehicles Sales report recorded 9,800 units in December 2019, compared with 17,000 units in the previous year while sales in South Africa last year was over 300,000. is it any wonder that every consumer good is now sold in sachet? We are getting poorer!

The federal government has to lead the way in creating smarter regulations.

Its officials should update their knowledge and eschew pedestrian considerations in regulating businesses, allocat-

ing resources, planning the economy or building infrastructure. Much noise has been made about this government’s rail infrastructure but what the country really needs are freight trains that connect industries, farms to major cities to cut post-harvest losses and bring goods quickly to market. Failure to dredge ports in other parts of the country is burying Lagos in a quicksand of chaos.

State governments need to stop emasculating businesses through ridiculous taxes and rein in their rascally officials who waylay businesses in local government areas. They charge ridiculous fees to lay fibre optic cables, erect masts or open shops. Unimaginative governors and local government officials keep their states poorer through a hostile business environment that forces out businesses and wonder why their young people are hawking soft-drinks in Lagos traffic. Formalise businesses, provide them a conducive environment, help them thrive, then tax them. If the civil service is the biggest employer in your state, you are a failure as a governor!

The days of plenty are gone. Crude oil sales accounted for 40 percent of the federal government’s revenue in 2019.

It used to be 70 percent. Our debts to China are getting dangerously close to where they can auction the country.

We can no longer afford the brigandage at the NDDC or the circus going on at the EFCC. The national assembly should wake up and smell the coffee, the country you all pretend to govern is imploding right before your eyes!

HEAD, HUMAN RESOURCES Adeola Obisesan

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

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BUSINESS DAY

COMPANIES&MARKETS Consumer Goods

COMPANY RELEASE

Flour Mills shares soar to one-month high after three-fold jump in profit Segun Adams

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lour Mills of Nigeria traded at a monthhigh Monday as shares jumped almost 10% on news that it made nearly three times more annual profit in the year ended March 2020 compared to the previous business year.

The leading provider of food and agricultural products and services announced N11.38 billion in profit for the business year, a 184% increase year-onyear, despite an impairment loss on trade and intercompany receivables of nearly N3 billion in the period.

Interest income from

short term investments and deposits, which rose to N2.4 billion from N769 million in the comparable periods, helped to support bottom-line.

Shares of the company closed at N18.75 at the start of the trading week in Lagos. The 9.97% daily gain is the most for the stock this year while its price is the highest since June 30.

FMN also noted im provement in all segment o f i t s bu s i n e ss, e xc e p t support services, as sales picked up reflecting the favourable demand for necessities goods during the period that ended just before the coronavir us lockdowns in key Nigerian states.

Flour Mills offers flour,

noodles, pastas, oil and spreads, and sugar, as well as feeds, fertilizers, and logistics.

Consequently, revenue rose by 8.8% to N573 billion in the year, faster than a 7.2% rise in cost of sales which resulted in a gross profit increase of 23.3% to N65.79 billion.

This meant Flour Mills earned N11.5 from every N100 sales as net profit in the year ended March 2020, compared to N10.1 from every N100 sales in the preceding year.

Despite rising operating expenses, Flour Mills was able to grow operating profit by 8.62%.

Earnings per share for the year rose to 255 kobo from 100 kobo.

Total assets grew 3.75% year-on-year to N432 billion while total liabilities grew 4.06% to N277 billion. Shareholders wealth increased by 3.2% to N156 billion.

Returns on Equity of 7.42% in the 2020 business year compared to 2.65% in the preceding year shows that Flour Mills handled shareholders money better. Similarly, its Returns on Asset jump from 0.97% to 2.68% showed a better efficiency at utilizing assets to create returns.

The directors are recommending a dividend declaration of N5.74 billion (2019: N4.92 billion) representing a dividend of N1.40 (2019: N1.20) per ordinary share of 50 kobo each.

Nigerian Breweries records N151bn revenue, N5.78 profit for H1’20

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he Board of Directo r s o f Nig e r ia n Breweries Plc has released the Company’s results for the half-year ended 30th June 2020.

According to its unaudited and provisional results filed with The Nigerian Stock Exchange, the Company announced a Revenue of N152 billion for the period under review and Profit After Tax (PAT) of N5.7 billion.

A breakdown of the results shows a decline in revenue compared to the N170 billion recorded in the corresponding period of 2019.

The half-year results for the 2020 financial year show a strong balance sheet for the company despite several factors that negatively impacted on the Company’s operations – such as an increase in Excise Duty, a rise in inflation, an increase in VAT from 5% to 7.5%, as well as the impact of the coronavirus (Covid-19) pandemic on businesses worldwide.

Despite these challenges, the Company’s financial po-

sition shows stability and sustained profitability.

To support the fight against the Covid-19 pandemic, the Company, during the period under review, made various donations in cash and kind valued at about N531 million out of a phased commitment of N600 million to the Federal and State Governments’ Covid-19 Relief Funds.

The Board of Directors commended the Company’s Management for its efforts to mitigate the impact of the pandemic on the business, as well as the prudent management of its resources as reflected in a 7% reduction in expenses incurred on marketing, distribution, and administration.

The Board expressed confidence that the Company is well-positioned to continue to deliver return on investment to Shareholders.

According to the Board, the Company’s priority during this period “remains ensuring the health, safety and welfare of employees, customers and partners.

CBN disburses N700m, captures 110,000 farmers in Ogun for Anchor Borrowers … rice, cotton, cassava top list of interventions RAZAQ AYINLA, Abeokuta

Top (l) Dakore Egbuson-Akande, actor and MTN ambassador; Eyitope Ogunbodede, vice-chancellor, Obafemi Awolowo University; Odunayo Sanya, acting executive secretary, MTN Foundation; Julius Adeluyi-Adelusi, chairman, MTN Foundation, and wife, Juliana Adeluyi-Adelusi; Lynda Saint-Nwafor, chief enterprise business officer, MTN Nigeria, and Mosunmola Belo-Olusoga, former chairman, Access Bank, during the virtual handover ceremony of the Prince Julius Adelusi-Adeluyi E-library to OAU by MTN Foundation as part of the chairman’s 80th birthday celebration in Lagos.

Insurance

Africa Re gross written premium up 6% to $845m Modestus Anaesoronye

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he African Reinsurance Corporation (Africa Re) has reported gross written premium growth of almost 6 percent to $ 845 million and underwriting performance increase of 26 percent to $ 26 million in the 2019 financial year.

This represents a combined ratio of 96.1 percent, better than the average of 100.3 percent recorded by global reinsurers.

Africa Re is an international financial institution with shareholding comprising of 41 member States of

the African Union (AU), the African Development Bank (AfDB), 114 insurance and reinsurance companies from all over Africa and 3 leading global insurance companies.

Hassan Boubrik, chairman of the Board of Directors and the General Assembly said at its virtual Annual General Meeting Africa Re recorded an impressive improvement in all performance metrics.

He stated that line with the recovery of the global financial markets in 2019; investment income reached an all-time high of $ 66 million, representing 165.7

percent growth compared to the previous year.

According to him, average return on investment stood at 5.26 percent.

“Overall, the Corporation achieved a 219.5 percent increase in net profit to reach $ 99.1 million.

This excellent performance resulted in a 6.3 percent improvement in the shareholders’ funds, which now amounts to $ 975 million.

At the same time, a dividend of $ 8.8 per share is distributed, slightly higher than $ 8 per share paid last year, Boubrik said.

At the end of 2019, the share capital of Africa Re

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comprised the following shareholders: 41 African States (34.5%), the African Development Bank (8.4 percent), 114 African insurance and reinsurance companies (34 percent) and 3 non-regional leading global insurance and reinsurance groups (23 percent).

The African Reinsurance Corporation (Africa Re) Group is the leading Pan-African reinsurance company in Africa and the Middle East, which was established in 1976 by African member states of the African Union (AU) and the African Development Bank (AfDB).

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aving identified 10 commodities for its special intervention under the Anchor Borrowers Programme (ABP), the Central Bank of Nigeria (CBN) has disbursed N700 million to 3,500 cassava farmers, just as the apex bank captures 70,000 small-holder farmers and agro processors for 2020 planting seasons.

Recall that the CBN has a five-year plan to channel special intervention towards the planting and p ro d u c t i o n o f 1 0 f o ca l commodities, including rice, maize, cassava, cocoa, tomato, cotton, oil-palm, poultry, fish and livestock/ dairy with a view to providing improved seedlings and funds to farmers which boost agricultural productivity and reduce balance of payment deficit as a result of foods and textiles imports.

Consequently, the apex bank has begun the registration of thousands of small-holder farmers and agro processors in Ogun State with a special focus @Businessdayng

on rice, cassava and cotton where the State Government coordinates farmers and CBN’s intervention that boosts cotton production, cassava planting and rice farming and processing.

Speaking during the ongoing budget performance appraisal of Ministries, Departments and Agencies by the members of the State House of Assembly’s Committee on Agriculture and Forestry in Abeokuta, Adeola Odedina, Commissioner for Agriculture, said that the State Ministry of Agriculture had registered over 70,000 farmers with the ABP, just as over 40,000 small-holders farmers with Anchor agro-processors had also been enrolled.

Odedina noted before Sylvester Abiodun-led House Committee on Agriculture and Forestry, that the Ministry had disbursed over N700 million to 3,500 cassava farmers through Central Bank of Nigeria in the first phase, adding that the Ministry had ensured the linkage of 5,000 farmers to credit facility and land, while over 1,300 rice farmers had been brought on board.

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COMPANIES&MARKETS

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Business Event

Consumer Goods

Cordros see positives in Nestle’s half-year as food business shows resilience Segun Adams

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estle might have suffered it slowest sales since 2015 but the big consumer goods maker beat expectations as COVID-19 blows to its business were softer than was anticipated.

Revenue for the half-year fell by less than one percent to N141 billion, helped by a resilient food business in the second quarter even though beverages sales slowed significantly. Second-quarter revenue fell 0.3% year-onyear and rose 0.5% quarteron-quarter.

“NESTLE’s Q2 revenue surprised positively amidst the COVID-19 induced challenges. We, however, highlight the significant margin pressure from higher input costs which is likely to persist in H2,” Cordros Capital said in a first-glance earnings report to clients. Cordros noted that estimates are under review.

The analysts noted that the decline in revenue was a smaller decline than ex-

pected, following a significant decline in the Beverages (-7.1% year-on-year) segment amidst weak consumption during the lockdown.

“We highlight that the decline in Beverage sales is the largest since at least 2016 when NESTLE began reporting segment revenues,” the analysts said. “Meanwhile, demand for NESTLE’s food products remained resilient, as Food revenue grew by 4.1% year-on-year, picking up the slack from the 8.7% year-on-year decline in Q1.”

On a quarterly basis food segment grew 7.3%, perhaps reflecting the stockpiling of food items during the lockdowns.

Cordros noted that gross profit margin shrank by 751 bps year-on-year to 41.3% in the second quarter of 2020, the lowest since Q1-18, driven by the surge in cost of goods sold (+14.3% yearon-year).

They also highlighted increased inflationary pressure on domestic food prices during the lockdown as the key driver, as NESTLE currently sources about 80% of

its raw materials locally.

According to Cordros, EBIT (-21.3% year-on-year) and EBIT margin (-634bps year-on-year) both declined as the revenue slump offset the 12.3% year-on-year decline in operating expenses in the second quarter.

Net finance cost of Nestle caught the attention of the analysts who noted a 1,087.2% growth “following a 23.9% increase in finance costs (the company drew down NGN5.81 billion from its intercompany loan facility) and a 64.7% decline in finance income amidst the lower yield environment compared to the previous year.”

Compared to Q1-20, EPS was down 5.1%, as COGS (+7.4%) outran revenue (+0.5%), and as net finance costs grew 362.8%. The effective tax rate in the quarter was 35.2%, compared to 35.9% and 39.3% in Q1 and Q4 respectively, the analysts noted.

BusinessDay estimation shows net margin at 15.48% compared to its 5-year average of 12.81%.

L-R. Emmanuel Oriakh , marketing director, NB. Plc, ; Charles Aniagwu, Delta State commissioner for Information; representing governor of Anambra State, chief of staff, Primus Odili; Uche Unigwe, sales director, NB. Plc, ; Chidi Edwu, brand manager, Life Lager, Omotude Adenusi, portfolio manager, mainstream brands, NB. Plc, at the lighting of the Niger Bridge by Life Lager In Onitsha last weekend.

All BBNaija reality show housemates during the second edition of the weekly Betway Arena Games held recently.

NCRIB-LAC focuses on advocacy, fintech and mental health at mid-year Workshop IFEOMA OKEKE

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he Lagos Area Committee (LAC) of the Nigerian Council of Registered Insurance Brokers (NCRIB) held its first ever virtual Mid-Year Workshop between Wednesday 22nd and Thursday 23rd July, 2020 which focused on advocacy, fintech and mental health.

The two-day virtual conference held via the Microsoft Teams Live Conference had Peter Braid, Chief Executive Officer of the Insurance Brokers of Canada (IBAC) as the guest speaker of the occasion.

Braid who spoke on the topic, “Advocacy as a Major Tool for Business Success: the IBAC Story,” enjoined insurance brokers to engage key decision makers across levels of government as well as key stakeholders like the fintech in order to boost the growth and penetration of insurance in Nigeria. He shared the success story of the IBAC in the same vein and explained how that can be replicated in Nigeria.

His presentation was followed by that of the Deputy President of the NCRIB, Bar-

rister Rotimi Edu who drew the parallel between IBAC’s pillars with the Nigerian market in a presentation titled, “Federal Government Advocacy.” Among other things, he noted: “the Canadian experience in advocacy and its effect on the brokers growth in the Canadian insurance market becomes very important so that we can draw from the experiences of both nations and make comparative inference on topic and the practice in both countries.”

The second day of the w orkshop feature d tw o broad presentations with the first focused on fintech, title “Fintech for Insurance penetration as a Financial Service.”

Presentations on this were made by foremost Mobile Money providers in Nigeria, Systemspecs, EFinA; an organization that has been helping Banks to increase customer base in the rural areas, driving penetration to assist Banks reach out to the unbanked.

Wragby Business Solutions & Technologies who equally made a presentation through Oluyomi Alarape, www.businessday.ng

an Executive Director of the firm who introduced the iBroka and shed more light on the All-in-One Solutions that can be accessed from a single platform based on Brokers’ subscription level.

The Application according to Alarape is to assist Insurance Brokers deliver efficient and quality service at optimal cost.

The second focused on a health talk, “Effect of COVID-19 on Mental Health of Families and Business Owner,” delivered by Maymunah Kadiri, popularly known as ‘The Celebrity Shrink’ a multiple award winning Mental Health Physician & Medical Director of Pinnacle Medical Services.

The Mental Health session also featured Umeh, Consultant Clinical Psychologist at the Psychology Department of the Lagos University Teaching Hospital (LUTH) who is also a first responder with COVID 19 Team.

The workshop equally featured two very robust panel discussions moderated by Olufunke Adenusi, CEO, Colximate Insurance Brokers and Enitan Solarin, MD, YOA Insurance.

L-R Theodore Nyingifa, managing director Without A Box PR- Consultants to PZ Wilmar;, Ifeyinwa Mogekwu, chef and food blogger of Ify’s Kitchen, at her official signing as a Mamador brand ambassador in Lagos recently.

R-l: Fatai Adegbenro, executive secretary/CEO, Nigerian Council of Registered Insurance Brokers (NCRIB); Tunde Oguntade, vice president/representative of president, NCRIB, and Tope Adaramola, assistant executive secretary, during the annual general meeting of the National Association of Insurance and Pension Correspondents in Lagos

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insurance today

E-mail: insurancetoday@businessdayonline.com

Insurers move to help government avert contract failures, project abandonment … as FG pays for group life

AIICO Insurance grows gross written premium by 26% in half year Modestus Anaesoronye

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Modestus Anaesoronye

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nsurance brokers under the umbrella body of Nigerian Council of Registered Insurance Brokers (NCRIB) have stepped up action to help government avert contract failures and abandonment of projects across the country.

The NCRIB notes that with partnership with insurance industry through the brokers, the risks of contract failures will greatly reduced.

Tunde Oguntade, vice president of the Council made the disclosure while speaking to members of the National Association of Insurance and Pension Correspondents (NAIPCO) shortly after their 2020 Annual General Meeting (AGM) in Lagos Oguntade who represented the NCRIB President, Bola Onigbogi at the occasion also called on Federal Government to engage the services of the registered insurance Brokers in order to mitigate the risk of contact failures.

“On government contracts, what we are trying to do at NCRIB is to talk to ministers through our liaison committee and leadership that the contract failure thing you have all over the federation if you have insurance and you have Brokers arranging them for you, of course all those contracts failure will not be there because contracts failures are sometimes premeditated and they do not want to listen to us.

“We have been talking to them about all these roads,

Sunday Thomas, The commissioner for Insurance, (third right) and Hassan Bello, executive secretary, Nigerian Shippers Council (fourth right) and other executives of both institutions after a meeting in Abuja to discuss areas of possible collaboration.

bridges and rails under construction on the importance of the government to engage the Brokers. If they don’t want the contracts to fail they know what to do.

Meanwhile, he confirmed that the Federal Government has paid the 2020 Group Life Insurance for all Federal Government workers in full.

According to him, the 2020 Group Life is off the schedule because full premium has been paid on the account for the current year, there’s no lapse in cover at the moment.

On the issue of deepening insurance penetration, he said there are several ways that can be done.“You have online models which are referred to as technology, you have physical, and you have referrals. If somebody tries to get you online, you are bouncing, tries referrals,

you are bouncing, he will try the last option which is physical correct. There’s nothing wrong with that. The fact that I want to see someone physically is that I wish to convince the person that I have the skill, I have tried to get to you through technology, people have tried to make impact for me to meet you but to no avail, let me now put my face to the picture so that you will be able to see. When you see people going to the market, it doesn’t mean that they do not have technology,” he added Fatal Adegbenro, executive secretary of NCRIB said plans are in top gear for its President Onigbogi to President Muhammadu Buhari as part of the Council’s sensitization Programme to deepen insurance in the country.

He said the planned visit to the Presidency is aimed at sen-

sitizing the government on the need to engage the services of the registered insurance Brokers, to protect the assets and liabilities of the government.

According to Adegbenro, “We will continue to engage the government agencies from time to time. But for the COVID-19, our President would have paid a visit to the Presidency with the view to sensitizing the government on the need to engage the services of the registered insurance Brokers, to protect the assets and liabilities of the government.

It’s not only the assets you protect; you protect liabilities as well because there are a lot of loans being taken to execute government projects. When these projects fail, whether you like it or not you must pay back the loan, so you have to protect all these things.

Mutual Benefits drives growth plan on effective budget control, improved ICT Services …as PAT grows 214% in 2019 Modestus Anaesoronye

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utual Benefits Assurance Plc is committed to pursuing its five year growth plan, now in its third year with effective budgetary controls, improved ICT driven service delivery as well as increased market penetration via digital channels.

The company said 2019 marked the third year of its Company’s 5-Year Strategic Plan; “Project One Reloaded” and the performance continues to grow as expected.

Akin Ogunbiyi, chairman of the group who disclosed

this during the 24 virtual Annual General Meeting said, it recorded an 18 percent growth in Gross Written Premium from N15.8 billion in 2018 to N18.7 billion in 2019.

This performance he noted was driven by a significant 41 percent growth in her life business, from N6.1 billion in 2018 to N8.5 billion in 2019.

“Our non-life business experienced a modest growth of 4 percent from N9.8 billion in 2018 to N10.2 billion in 2019.

Gross Premium Income likewise increased by 16 percent to N18.1 billion from N15.6 billion in 2018. Conversely, a more robust underwriting process resulted in a 13% decline in net claims expense,

from N7.0 billion in 2018 to N5.9 billion in 2019, Ogunbiyi noted. “The decline in net claims benefits resulted in an increase in underwriting profits by 77 percent from N3.1 billion in 2018 to N5.4 billion in 2019. A growth in top line performance coupled with disciplined cost culture as well as highly rewarding investment activities ensured we improved our profitability in 2019” He disclosed that Profit Before Tax increased by 172 percent from N1.4 billion in 2018 to N3.8 billion in 2019, while Profit After Tax increased by an even larger percentage of 214 percent from N1.1 billion in 2018 to N3.6

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billion in 2019.

Total Assets grew by 14 percent from N59.4 billion in 2018 to N67.8 billion in 2019.

Total Equity increased by a larger percentage of 60 percent from N9.1 billion in 2018 to N14.5 billion in 2019.

On the recapitalization exercise, he noted that having successfully recapitalized the life subsidiary, “we are taking active steps to complete the recapitalization of the parent Company before the stipulated deadline.

“We want to assure our shareholders that this is at the forefront of our plans and we are working towards achieving it before the end of the year, Ogunbiyi promised.

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IICO Insurance Plc has reported Gross Written Premiums of N31.9 billion, up 26 percent from N25.4 billion recorded the same period in 2019. The growth was driven by sustained positive performance across the major lines of business of the Group.

The Group’s Shareholders’ funds increased by 9.39 percent from N27.9 billion in 2019 to N30.5 billion, driven by the Group’s earnings for the period and its strong matching of long term asset and liabilities, despite volatile yields along the yield curve.

However, the Group’s profit before tax (PBT) reduced by 28 percent toN2.17 billion, compared to N3.01billion in Q2, 2019. The reduction was as a result of changes in product mix in the Retail Life business due to changes in clients’ preferences. These product preferences were however impacted by the lower interest yield environment, leading to a 71 percent increase in the proportion of premiums that had to be transferred to life funds (shown as change in life fund).

Babatunde Fajemirokun, the managing director/CEO, speaking on the financial results stated, “Besides our operational resilience and strategic marketing within the period, our brand equity, advanced level of automa-

tion and business continuity plans enabled us to quickly adjust our business model to meet the emerging demands of the low touch economy, triggered by the global pandemic. The strong committed relationships we have built with our customers continue to endear them to us for repeat business, new businesses and referrals.

As the local and global economies gradually recover from the impact of the pandemic, we will seize opportunities for continuous growth.

Our response strategy includes product innovation, technology-enabled operating and distribution models, and unparalleled customer experience. We remain optimistic that the second half of 2020 will be better.”

AIICO’s profitable outcomes amid general uncertainties, challenging macro-economic and highly competitive business environment is a clear indication that it remains an insurer of choice and is well positioned for long-term market leadership.

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

CHI Ijeoma Okoro gets recognition in global fight against Polio

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he Global Polio Eradication Initiative (GPEI) has named the Regional Director, East, Consolidated Hallmark Insurance Plc, Ijeoma Pearl Okoro, among five Rotary women leading the fight to end polio worldwide.

GPEI is a public-private partnership leading the effort to eradicate polio in the world.

Others named alongside Okoro are; Judith Diment of the Rotary Club of Maidenhead Thames, England; Tayyaba Gul of Pakistan; Ann Lee Hussey, Maine, United States and Marie-Irène RichmondAhoua from Cote d’Ivoire.

Okoro, apart from being a staff of the insurance outfit, is a member of the Rotary Club of Port Harcourt, Nigeria where she directs ‘End Polio Now’ activities throughout sub-Saharan Africa.

She leads efforts to build awareness around the fight to eliminate polio from Ni@Businessdayng

geria and engages other Rotary members and the public through events and promotional endeavours.

Through a range of activities like government advocacy, celebrity engagement and fundraising, Okoro’s leadership helps ensure that polio eradication is a priority and every child is protected from the disease.

To her, “Until the last child is reached and immunized, no child in the world is free. Let us all support the cause to end polio now.”

Consolidated Hallmark Insurance Plc is one of the top insurance companies operating non-life insurance business in the country. The insurers is ably led by Eddie Efekoha, managing director/CEO, who was a former Chairman, Nigerian Insurers Association (NIA) and immediate past president, Chartered Insurance Institute of Nigeria (CIIN).

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BANKING Spread between deposit, lending rates widens to 24.23 percentage points Stories by HOPE MOSES-ASHIKE

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oney market rates were generally stable and moved in tandem with the level of liquidity in the first quarter (Q1) of 2020.

The Central Bank’s economic report for the first quarter indicated that the daily interbank call rate ranged from 5.00 per cent to 7.24 per cent, while the Open BuyBack (OBB), a money market instrument used to raise short term capital, ranged from 1.77 percent to 21.02 percent in the Q1 2020.

Average interbank and OBB rates were 10.68 percent and 12.08 percent, respectively. Other rates, such as the 7-day and 30-day NIBOR, traded at averages of 11.74 per cent and 9.81 percent, respectively.

The CBN Staff estimates showed that the average prime and maximum lending rates rose by 0.02 percentage point and 0.47 percentage point, respectively, to 15.01

percent and 30.70 percent, in the review period, above their levels in the preceding quarter. The average term deposit rate fell by 1.46 percentage points to 6.27 percent.

The spread between the average term deposit and the average maximum lending rates widened by 1.93 percentage points to 24.43 percentage points in the first quarter of 2020. With the headline inflation at 12.26 per cent in March 2020, all deposit rates remained negative in real terms, while prime and maximum lending rates were positive in real term.

In the review period, the Bank maintained a non-expansionary monetary policy stance by retaining the Monetary Policy Rate at 13.5 percent.

Despite this, the broad measure of money supply (M3), on quarter-onquarter basis, rose by 2.5 per cent to N35.63 trillion at end-March 2020, compared with the growth of 1.6 per cent and 2.3 percent at the end of fourth quarter of 2019 and the corresponding quarter of 2019, respectively. The development was due, mainly, to the 10.2 and 5.0 percent

increase in net foreign assets of the banking system and domestic claims. The rise in net foreign assets was due, largely, to the exchange rate adjustment, while that of domestic claims reflected the increase in net claims on central Government and claims on other sector.

Narrow money supply (M1), on quarter-on-quarter basis, grew by 5.0 percent to N11.06 trillion, at the end of March 2020, compared with the growth of 9.0 per cent at the end of the fourth quarter

of 2019, but was in contrast to the decline of 5.0 pe cent recorded at the end of the first quarter of 2019. The growth in narrow money supply (M1) at the end of March 2020, reflected, wholly, the 7.8 percent rise in transferable deposits.

Other deposits, on quarter-on-quarter basis, grew by 8.4 percent to N19.78 trillion at the end of March 2020, compared with the growth of 6.1 per cent and 3.4 per cent in the fourth quarter of 2019 and the corresponding pe-

riod of 2019, respectively.

The growth in other deposits was attributed to the increase in savings, time and foreign currency deposits of other depository corporations.

According to the report claims on domestic economy (net), on quarter-on-quarter basis, grew by 5.0 percent to N37.97 trillion at the end of March 2020, reflecting, wholly, the 2.6 and 5.8 per cent increase in net claims on government and claims on other sectors, compared with

the growth of 1.4 percent and 15.9 percent at the end of the fourth quarter of 2019 and the first quarter of 2019, respectively.

Net banking system claims on Government, on quarter-on-quarter basis, grew by 2.6 percent at the end of March 2020, compared with a growth of 48.0 per cent in the first of quarter of 2019, but was in contrast to the 4.4 percent decline recorded at the end of the fourth quarter of 2019. The development reflected the increase in holdings of government securities by the monetary authority.

On quarter-on-quarter basis, banking system’s credit to other sectors of the economy rose by 5.8 per cent to N28.24 trillion at the end of March 2020, compared with the growth of 3.6 percent and 9.2 percent in the fourth quarter of 2019 and the first quarter of 2019, respectively. The development was attributed, largely, to the 9.1, 0.1 and 5.9 percent growth in claims on financial corporations, claims on state and local governments and claims on the private sector, respectively.

Sterling Bank educates customers on managing Covid-19 challenges LAPO empowers

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terling Bank Plc recently held a webinar for customers in the business of import/export of goods and services where it highlighted and addressed some of the challenges of the manufacturing and trade sectors of the economy in light of the coronavirus pandemic.

In a keynote address, Raheem Owodeyi, executive director of operations and Chief operating Officer (COO) of Sterling Bank, told participants at the webinar that COVID-19 has disrupted global logistics, leading to price fluctuations in commodities and drops in GDP and foreign reserves.

He also said that the situation has consequently made it a challenge for banks to support importers and exporters of goods and services in meeting their trade obligations to suppliers.

Owodeyi remarked that those who go all out to obtain the foreign exchange outside of the official channels tend to incur higher than required costs, and in a bid to reduce the constraints of its customers, the bank decided to put together the seminar to educate customers on how they can manage the changes created by the pandemic, dearth of foreign exchange and how they

can source foreign exchange through the right channels.

Also speaking, Samuel Oyeyipo, regional coordinator, Nigerian Export Promotion Council (NEPC), South West Regional Office, Lagos, in his paper entitled, “Export trade in Nigeria, Opportunities and Requirements,” said exporters engage in export business to earn forex, gain access to bigger markets and increase profit levels. He explained that there are several opportunities in non-oil exports for leather, cashew, cocoa, rubber and manufactured products, among others as all of these have potential to contribute to the nation’s non-oil foreign exchange earnings.

He also listed some of the major destinations for Nigerian exports as Europe, US, Asia, other parts of the African continent and the Middle East, adding that steps taken to export products include an export plan, decision on the product or service to export, business registration with appropriate regulatory bodies like CAC and NEPC, and opening of foreign currency domiciliary account to receive FX earnings. Other requirements include adequate packaging and labelling of products for export, which must meet cer-

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tain international standards of containment, protection and preservation.

The regional coordinator also shared that the NEPC is engaged in some intervention projects such as collaborations with Sterling Bank to train interested individuals and enterprises for the export business, human capital development with other international and local agencies and its OneState-One-Product Initiative, under which each state in the federation is encouraged to develop a product in which it has comparative advantage for export.

Presenting his thoughts on “Trade Competitiveness through Collaboration,” Bamidele Ayemibo, managing director/CEO- 3T Impex Trade Academy, stressed the need for collaboration between importers and exporters.

He said, “In order to survive

the impact of COVID-19 on international trade in Nigeria, the importer and exporter must work together with their banks in a symbiotic relationship to generate funding to grow the volume of non-oil exports and foreign exchange as a way of easing the pressure on Naira.”

He also reiterated the need for importers to build capacity and consider direct export funding as alternative means of generating FX to meet their import funding needs while at the same time mitigating exchange risks by entering into FX forward and futures contracts Kola Awe, managing director/CEO of XPT Logistics International Limited, who spoke on ‘Imperatives of Freight Forwarding and Documentation’, noted that freight forwarding is the heart of the export trade because it involves the movement of goods from one location to another.

Awe, who is also a legal practitioner, said the freight forwarder is critical to the export business because he is the one that coordinates the shipment, engages in strategic planning, and advises the exporter about export procedures, including the cost of trade.

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50,723 beneficiaries

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ift Above Poverty Organization (LAPO) improved the health and well-being of 50,723 women and children in the first half of 2020.

Ayobami Honestus Obadiora, acting executive director, who disclosed this at a strategic review meeting with senior management staff stated that the beneficiaries were sensitized on family planning, antenatal care, child nutrition with counselling and referral services.

The organisation equally carried out health outreach at Iyekogba Community in Oredo Local Government Area of Edo State during the period, reaching 1,236 vulnerable community members with free treatment and referral services.

The executive director expressed worry that a high percentage of women in Nigeria are vulnerable to illnesses, disability and even death due to lack of access to comprehensive health services, a situation that has made the country one of the @Businessdayng

highest in maternal mortality rates amongst developing nations.

Obadiora said LAPO was determined to change the narratives of high maternal mortality in Nigeria with its health intervention services in target communities, adding that maternal mortality has detrimental effects on the socio-economic development of the nation.

He said LAPO encourages early detection and management of health conditions, stressing that routine screening and health awareness by the organization has contributed significantly to the wellbeing of community members.

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Nigeria’s FX access restriction for maize to attract investments – Experts Josephine Okojie

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he recent move by the Nigerian government to restrict FX access for importers of maize will drive investments into the maize subsector, experts in the agricultural sector say.

The experts who commended the apex bank for its recent restriction of Form X for maize importers say the move was necessary to create markets for farmers and spur investment opportunities in the maize value chain.

“This is a good move by the apex bank as it will now create more markets for maize farmers across the country” said Tunji Adenola, former national president, Maize Association of Nigeria.

“It will spur investments in the maize value chain as more investors will focus on the subsector, thus, employment will be generated and farmers’ livelihoods will be positively impacted,” Adenola said.

Ab o u t 6 0 p e rc e nt o f Nigeria’s maize is used for the

production of poultry feeds, 25percent is used-up by the food and beverage industry, and remaining are consumed by households, experts say.

Pou l t r y f a r m e r s w h o spend 70percent of their production costs have been worst hit by the sudden and speedy rise in maize prices.

But experts say that the pain being experienced by poultry farmers is short-term pain for a long-term gain.

Ayodeji Balogun, country manager, AFEX Commodities Exchange Limited, says the situation which is currently tough for poultry farmers is for a better tomorrow for the country especially amid low oil price and FX volatility.

“We cannot continue to import maize on the detriment of our farmers. We know the situation is difficult at the moment but it will only be for short-term,” Balogun

said.

“It is a short term pain for long term gains. We need to bear the pains now for the long term gains especially with the negative impact of the pandemic and FX volatility,” he added.

He said the country has what it takes to grow enough volume of maize that is required for consumption.

According to him, Nigeria has been increasing its maize

Stephen Aina, a scientist at the National Conservation Foundation (NCF) discussing with key stakteholders in Misau Local Government during the launched of the watershed project at the Lake Maladumba recently in Bauchi State.

Conserving Lake Maladumba crucial for improving food security in Bauchi – Experts Josephine Okojie

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nvironmental experts have called for the conservation of Lake Maladumba – one of Nigeria’s recognized international wetlands of importance, to improve food security in Bauchi state.

They stated that thousands of smallholder farmers in the state rely on the lake for their livelihood.

They also said that the lake plays host to a unique assemblage of plant and animal species that are important for the maintenance of biological diversity.

“The Lake Maladumba serves as a source of livelihood for thousands of smallholder farmers cut across 30 communities in Bauchi State,” Mohammed Garuba Boyi, senior supervision manager and coordinator - Northernregion, Nigeria Conservation Foundation said in a response to questions.

“There are lots of fishing activities in the lake and the water is also used for irrigation farming during the

dry season,” Boyi said.

He said the lake is strategically important in terms of food security and ecologically is plays a significant role for migratory birds.

He noted that the sensitisation on wetlands and agriculture will go a long way in the conservation of wetlands and its protection against further distortion and depletion by human activities.

Lake Maladumba is a natural and shallow lake located approximately 18 kilometer South-West of Misau Local Government and 2 kilometer East of Shelon village with a surrounding forest reserve.

It is a representative of the natural wetlands of the Sudan Savanna that supports a large number of migrant birds species.

A g r i c u l tu re, g raz i ng, hunting, and recreation activities are carried out around the surrounding areas of the lake, experts say.

“Nigeria’s food supply shortages are met basically through wetland production as agriculture and water are inseparable,” said Mallam www.businessday.ng

Mohammed, coordinator of the NCF programme in Misau Local Government Area.

Mohammed says that the lake has shrunk in size as a result of the encroachments of the forest reserve surrounding the lake.

“There are lots of encroachments of the forest reserve currently and this is leading to deforestation,” he said.

“The water volume is reducing and the lake is shrinking. Sand dunes are coming to displace the lake and this is changing the entire climatic scenario of the area,” he added.

A combination of these factors, experts say, has had adverse effects on the lake, so much so that there is now a receding shoreline, desertification, and a threat to livelihood among the surrounding communities.

The receding waters and the resulting deforestation a n d d e s e r t i f i cat i o n a re strongly affecting pastures and grazing activities.

Internationally, 11 wetlands are recognised in Nigeria, while altogether wetland covers

about three percent of the country’s land surface.

Stephen Aina, a scientist at NCF says that environmental experts are concerned that the unrelenting shrinking volume of the Lake Chad would affect other natural reservoirs especially in the semi-arid and arid regions.

Aina who is a recipient of the EarthWatch Institute, UK –Neville Shulman Award has commissioned a community watershed health campaign to address immediate issues relating to the efficient management of the lake’s catchment area.

“Modalities for a wellr o u n d e d s t a k e h o l d e r s’ engagement has commenced and we are hopeful that it would consolidate to meet the expectation of all users of the lake,” he said.

“I see the lake as a national treasure that could improve future adaptation to climate change and its vices,” he added.

He appreciated the NCF and relevant agencies in Bauchi for their support while calling for a greater collaboration with the state government.

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production in recent years, but the intensifying effects of climate change experienced in 2019 led to a 25percent cut in the country’s yearly production.

BusinessDay findings show that the climate change impact on maize production as well as the COVID-19 disruption on the food supply chain, have led to a surged in prices of the grain by over 50% percent in the country.

The apex bank had argued that the recent FX restriction for importers of the grain is part of its measure to protect the local production o f t h e g ra i n , s t i mu l at e rapid economic recovery, safeguard rural livelihoods nd increase job creation in the country, especially amid the COVID-19 pandemic.

Maize is the leading cereal grown in Nigeria, closely followed by sorghum and rice, and can be grown in all states of the country.

The International Institute of Tropical Agriculture (IITA) had in 2018 estimated the Nigerian maize industry to worth $6 billion annually.

Nigeria is Africa’s secondlargest maize grower after

South Africa, churning out about 10.5 million metric tons per annum with a demand of 15 million metric tons, leaving a supply-demand gap of 4.5 million tons per annum, according to data from the Federal Ministry of Agriculture.

“Lots of capital will now come into maize production.

This will boost the production of the crop in the country and possibly make Nigeria the top grower on the crop on the continent” said an agric expert who does not want his name mentioned in print.

“Maize shor tage w ill become a thing of the past.

All we are now asking from the government is policy consistency, as this will sustain the investments that will be made,” he said.

Nigeria had earlier in 2016 imposed FX restriction on importers of some 41 items which maize was included and the situation led to a sharp increase in local food crops.

Experts say the success recorded in rice can also be replicated in maize, as more investment opportunities will be created.

Eatrich Farms launches investment platform for Nigerians Iniobong Iwok

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atrich Farms has rolled out a new investment platform called Green Africa Project (GAP), for Nigerians.

Sam Afolabi, chief executive officer, Eatrish Farms, said this was initiated as a response to the yearning of many Nigerians who seek investment opportunities in the agricultural sector.

“GAP is one of many projects handled by Eatrich Farms to further its goal of feeding the future with freshness. The company created this project to maximise investment and minimise risk, with the end goal of improving socioeconomic situations through agriculture,” he said. “ W e h a v e compartmentalised the GAP city into three different phases based on its well worked-out plan for each year. The phase one focuses on fish farm, phase two is on livestock and phase three on pig farm,” he further said.

“Other investment channels with the company are the @Businessdayng

maize farm and the sold-out commercial-scale feed mill, among others. But the fish farm is currently active and open to investors/partners,” Afolabi added.

He said that a fish farm will be set up for an individual with a one-time investment of N9.5 million.

He explained further, “Each investor has nine (9) ponds, and each pond has 800 fishes.

Invariably, you’re going to have 7,200 fishes at harvest. With a one-time investment of N9.5 million, you’re going to be earning N2 million every year for 20 years.”

O n business security, the CEO said investments with Eatrich were insured

by Leadway Assurance and projects would be handled by personnel that have requisite skills and cognate experience.

“GAP investment is smart, safe, and profitable. Eatrich is a company that puts its investors/ partner at its core. In the last four years, the company has remained committed to not just satisfying investors/partners but amazing them,” he added.

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MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

@ 20: WACT targets fresh $100m investment in Onne Port to handle growth amaka Anagor-Ewuzie

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he West Africa Container Terminal (WACT), Nigeria’s leading container terminal, has restated its commitment to deepening investment in Nigeria, particularly in increasing container handling capacities at the Onne Port.

According to the terminal operator, it will continue to invest in the coming years as its perfecting plans to begin a fresh $100 million investment.

Aamir Mirza, managing director of WACT, stated this during the company’s 20th anniversary celebration at Onne, Rivers State recently.

Mirza said the need for further investment in cargo handling equipment is in response to the significant volume growth witnessed in the Eastern Nigerian market since the company started operations 20 years ago.

“We are celebrating our achievements of the past 20 years. In year 2000 when we started, we did about 35,000 container moves but last year we did over 200,000 moves, so cargo volume has grown over the years and recognising this growth, we are investing in this business,” he said.

L-R: Josephine Eneje, head, Human Resource, West Africa Container Terminal (WACT); Sokari Soopu, vessel planner, WACT; Aamir Mirza, WACT managing director; Ifeoma Nwabekee, senior supervisor, Berth Planning & Cargo Control; and Klaus Laursen, country manager, APM Terminals Nigeria, during the 20th anniversary celebration of WACT at Onne Port, Rivers State.

According to him, the company is at that point where it will experience new changes.

“With more equipment coming in, the mode of operation will change, and we believe we are setting that up for the next 20 to 25 years so that we can serve our customers better in terms of service delivery, customer satisfaction and improved capacity,” he said.

Mirza said WACT has done a lot of work in marketing Onne Port to the global community even as “the service level that the customers are getting in Onne is far superior to what they are

getting elsewhere in Nigeria”.

“For example, we don’t have vessel waiting time, we don’t have issues with delivery of containers to our customers but customers taking delivery of cargoes from other locations still have challenges with vessel waiting time and service delivery,” Mirza said.

He commended the dedication and hard work of the company’s workforce, which he said contributed in no small measure to the company’s growth and success.

Also speaking, Klaus Laursen, Country Manager of APM Terminals Nigeria, described as impressive, the

successes recorded by WACT in its 20 years of existence, which he attributed to the growth in Nigeria’s economy.

“There will be no cargo coming in or going out if it wasn’t for the economy of Nigeria. We serve only the population of Nigeria. So, the first part of it is that Nigeria’s economy is still growing every year,” Laursen said.

While applauding the effort and contribution of the staff to the growth of the company, Laursen urged them not to rest on their laurels in making WACT the most preferred container terminal in Nigeria.

“Starting from being a

Boat mishaps: NIWA threatens to withdraw license of defiant operators amaka Anagor-Ewuzie

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orried by the incessant but avoidable boat accidents on Lagos waterways, the National Inland Waterways Authority (NIWA), Lagos area office, has warned that it would deregister and withdraw operational license of any indicted operator.

The authority also warned that it would prosecute and ensure the withdrawal of certificate of defiant boat captains including enforcing other stringent measures to bring back sanity in the operation of water transportation services in the state.

Sarat Lara Braimah, who issued this warning in Lagos at the Weekend, says the Federal Government regulatory agency can no longer

fold its hands and watch some defiant operators as well as their employees run the business aground.

She noted that NIWA will go for the shovel in ensuring zero tolerance on boat accidents.

“We have tried to provide needed enabling environment for the operators, including training programmes to expose stakeholders to operational standards yet some have chosen the part of desperation and dangerous behavior, leading to loss of lives and property,” said the Lagos area manager.

Braimah further stated that the authority’s patience with unrepentant operators has been overstretched, and hinted of a new agenda of enforcement devoid of plea and forgiveness.

She also disclosed that pre boarding formalities tarwww.businessday.ng

geted at passengers’ awareness will now form part of the enforcement regime to help stabilise and encourage first timers and those afraid of water transportation to adhere to safety measures, particularly during turbulence on the waterways.

“Time has come for passengers to take responsibility, listen and obey boat crew when emergencies or turbulence occurs. Sadly, some passengers go into frenzy and panic mood, triggering off fearful alarm and causing chaos that leads to avoidable death,” she stated.

She further said that the new normal on water transportation will see to detailed take off protocols, pre boarding checks and physical inspection of use of life jackets and safety talks to adequately prepare the minds of passengers in case

container depot until today being a proper container terminal is quite impressive.

If you look at Onne 20 years back, we would not have compared it to Lagos but today, because of our capabilities in terms of operation and equipment available and being able to handle bigger container vessels that are calling at Nigerian ports, we are increasingly becoming the preferred destination,” Laursen explained.

With that, he said, WACT can also put pressure on the West for them to do their job better. “There is a huge market in the East, Central and Northern Nigeria that we can actually compete for with Lagos Ports and increasingly we are building the capabilities in the port.”

Some of the staff who spoke at the event commended WACT for the achievements recorded just as they pledged their commitment to continue to contribute to the growth of the company to become the best container terminal in West Africa.

“For as many of us that are privileged to be part of this journey from the beginning, we know how we started with about 15 staff. Most of the processes were manual but today, we are running an operation that is of international best standard with stateof-the-art equipment. Our

achievements no doubt are worth celebrating. We pledge our commitment to join in the success story of WACT,” said Chris Ebute, Customer Care Manager and one of the longest serving staff of the company.

WACT is fast gaining a reputation as the gateway to Eastern Nigeria and a strong alternative to ports in Lagos with multimillion dollars investment in cargo handling equipment.

In 2019, WACT invested $14 million in the acquisition of sophisticated modern cargo handling equipment including two Mobile Harbour Cranes, 14 Specialised Terminal Trucks and two Reach Stackers. In 2020, the company announced a further investment in its Phase Two upgrade.

Noah Sheriff, WACT’s Commercial Manager said the Phase Two upgrade includes the acquisition of three additional Mobile Harbour Cranes, bringing the total in operation to five; 20 Rubber Tyre Gantry Cranes; three Reach Stackers; 13 terminal trucks and trailers and an empty container handler.

He said the upgrade will also include the deployment of reefer racks with a 600-plug capacity, as well as expansion of the current yard, new workshop and a new terminal gate complex.

Maersk launches new digital platform to assist SMEs of emergency situations.

She also stated that going forwarding that there would be unscheduled and random checks of boats to ascertain their seaworthiness will incorporate the enforcement strategy.

“The new dawn will be implemented to the letter with passengers addressed in English, Pigin English, and the three major dialects, Igbo, Yoruba and Hausa before takeoff, all targeted towards ensuring that passengers take responsibility and cooperate with boat crew to ensure a successful and incident free voyage.

We are going to step up our awareness programme for stakeholders in this month of August and beyond. We are determined to arrest this situation, and hereby enjoin all hands to be on the deck,” Braimah further stated.

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amaka Anagor-Ewuzie

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etermined to aid small and medium sized companies to control their own supply chains Maersk has launched a new platform called Maersk Flow, that will give shippers command over their goods, from the factory to the retailer, said the Danish carrier.

The platform offers shippers much needed visibility in their supply chains that will help the flow of goods and documentation, as well as reducing manual input work, thereby reducing errors.

“Maersk Flow will allow our customers to significantly improve their supply chain performance with less time and effort. @Businessdayng

This lets them focus more resources on their core business and achieve happier customers and higher sales growth,” said Martin Holme Global, head of SCM & E-commerce Logistic, AP Moller - Maersk.

According to him, Maersk believes that the increasing complex global supply chains, which move at an ever-greater pace, often with cargo moving with several carriers to many customers means that smaller sized companies struggle to have control of their goods.

“Maersk Flow allows this type of operation to move from manual managed spreadsheets with staff on phones tracing cargo movements to the simplified digitalised operation that can ultimately save money,” he added.

Wednesday 05 August 2020

BUSINESS DAY

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TRANSPORTation Motoring

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Nigeria dithers as Ghana VW plant takes-off … After accelerated promulgation of the country’s automotive policy MIKE OCHONMA Transport Editor

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olkswagen (VW) AG is expanding its footprint in sub-Sahara Africa with the official opening of a vehicle assembly facility last Monday in Accra, Ghana.

With this investment, Ghana becomes the fifth Volkswagen vehicle assembly location in Sub-Sahara Africa; the other locations are in South Africa, Kenya, Nigeria and Rwanda.

The event to announce VW’s investment and the unveiling of the first vehicle assembled in Ghana was attended by President Nana Addo Dankwa Akufo-Addo, minister of trade and industry, Alan Kyerematen, and cabinet ministers.

The official opening of the vehicle assembly facility in the West African country, which has a population of about 30 million people, is the realisation of the Memorandum of Understanding (MoU) which VW signed with the Government of Ghana in the presence of the German Chancellor, Angela Merkel, nearly two years ago.

Ghana has also fulfilled its MoU undertaking to develop a comprehensive Automotive Industry Policy with the recent promulgation of the Ghana Automotive Development Policy (GADP), which is a groundbreaking and blueprint automotive policy in the West African region.

GADP has paved the way for VW to solidify its commitment in Ghana with the initial investment in the first phase of its long term vehicle assembly plans.

Universal Motors Limited, a licensed Volkswagen importer since 2005, has been awarded the assembly contract for the initial phase of the project. The Universal Motors facility in Accra has an installed capacity to assembly 5,000 units per annum. The models to be assembled using semi knocked down (SKD) assembly kits are Tiguan, Teramont, Passat, Polo and Amarok.

Thomas Schaefer, head of VW sub-Sahara region and

managing director of VW Group South Africa, said: “The opening of our vehicle assembly facility in Ghana is another exciting chapter of our expansion journey in the Sub-Sahara Africa region.

This is a big step into establishing our presence in the West African region. I wish to commend Ghanaian government under the visionary leadership of President Akufo-Addo, for introducing a comprehensive policy that is set to transform the

automotive industry in West Africa.”

Schaefer added: “Volkswagen is committed to helping Ghana to develop a modern automotive industry as part of the country’s industrial transformation agenda.”

Schaefer also announced the establishment of VW Ghana, which is the first automotive company to be registered under GADP. VW Ghana is a 100 percent subsidiary of Volkswagen of Germany.

It is a registered assembler and will be responsible for the importation of the SKD kits and Fully Built Units (FBU).

Jeffrey J. Oppong Peprah has been appointed as the CEO of Volkswagen Ghana.

Volkswagen is strengthening the regions and focusing on new up-and-coming markets as part of its TRANSFORM 2025+ brand strategy.

Alongside North and South America as well as China, the Sub-Sahara region plays an increasingly important role. Although the African automotive market is comparatively small today, the Sub-Sahara region has the potential to develop into an automotive growth market of the future.

Toyota draws first blood as Yaris breaks cover … least expensive, better fuel economy MIKE OCHONMA

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fter a series of teaser images, Toyota Yaris facelift has finally broken cover in Phillipines in the midst of gradual recovery from the ravaging coronavirus pandemic. It is the second major update to the Yaris sedan since the current-gen’s introduction in the ASEAN region in 2013.

Reliable and economical, the subcompact Yaris is Toyota’s least expensive car. Fuel economy is excellent, with a tested 32 mpg overall in the sedan with the automatic transmission, and 30 in the hatchback with the manual, depending on the market.

In some countries, private buyers are better off sticking with the petrol version, though, which has lower list prices and cheaper finance deals, where ever it is available than the hybrid. Relatively low servicing costs and a low insurance group rating, thanks to plenty of safety equipment, make the Yaris an affordable choice compared with rivals, again depending on the region.

Yaris is known by the name ‘Vios’ in the Philippines and the newly updated model will likely be launched in other markets such as Malaysia, Singapore and Taiwan in the time to come.

Facelifted model has adopted new evolutionary changes at the front fascia www.businessday.ng

such as classier looking full LED headlamps, bigger secondary airdam, and a more Lexus-inspired grille contributing to a sharper look.

The bumper now also houses new L-shaped foglights enclosures. The rear section has no significant changes and has been carried

over as is.

Inside, the Yaris has received a newly updated infotainment system featuring Apple CarPlay and Android Auto. On the other hand, other features such as roofmounted AC vents, automatic climate control, sunroof, etc., have been carried over from

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the pre-facelift model. It also has retained its existing cabin and dash layout without any notable revisions.

Some key safety features include 7 airbags, automatic brake system (ABS) with electric brake distribution (EBD), electric stability programme (ESP), keyless entry with push button start, vehicle stability control, cruise control, Eco and Sport engine modes, and more.

In terms of mechanicals, the Philippines-spec Yaris facelift continues along with the same 97 ps, 1.3-litre and 105 ps, 1.5-litre naturally-aspirated petrol engine options.

Its transmission options include either a 5-speed manual or a 7-step CVT automatic.

Since the mid-sized sedan segment is turning hot with the launch of new-gen Honda City and the facelifted Hyundai Verna, it’s time that Toyota should introduce the facelifted Yaris in India soon.

Though a minor update may not bring any radical changes to the overall sales figures for the Yaris, it certainly will help the company to pull out greater sales. @Businessdayng

Lessons for Nigeria as India railways targets zero emissions by 2030 MIKE OCHONMA

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ndia’s railways ministry says it is setting ambitious palns to achieve zero emissions by 2030, and that is 10 years from now due to Indian Railways’ (IR) extensive environmental initiatives.

This follows the news that the entity is on target to complete electrification of its entire 67,368km network by 2023.

This is coming on the successful electrification of around 40,000km of line since work began in 2014, including 63 percent of broad gauge lines.

Electrified routes include the countr y’s Dedicated Freight Corridors (DFC) project, which is expected to radically increase the efficiency of freight shipping. The project features the world’s first operation of double-stack intermodal trains under overhead catenary, which began on the Western DFC on June 10.

Indian Railways will also continue expanding its use of solar panels, ensuring that its newly electrified network has a guaranteed supply of renewable energy. Solar panel systems with a nominal power of 100MWp have been installed on the roofs of railway buildings including 900 stations.

Plans for a further 400MWp of solar panels are in the process of being rolled out, with tenders for 60 percent of these already granted. Installation of the new systems is expected by December 2022.

IR also plans to construct additional ground-based solar facilities on unused railway-owned land, including a 50MWp plant in Bhilai, Chhattisgarh, scheduled for completion in March 2021, and a 2MWp plant expected for completion in August this year.

Other steps already taken include the replacement of all station lighting with energyefficient LEDs, completed in March 2018, the fitting of biotoilets in 69,000 coaches, and improvements to the energy efficiency of locomotives, trains and rail infrastructure.

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Wednesday 05 August 2020

BUSINESS DAY

Harvard Business Review

ManagementDigest

How to mentor someone who has manipulative tendencies Ron Carucci

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any leaders struggle with employees who blur the fine line between persuasion and manipulation when the stakes are high.

Although ethical misconduct should never be tolerated, talented professionals can have long and successful careers if they are coached to learn healthier approaches to influence.

Behavioral science tells us that manipulative behaviors, such as engaging in excessive criticism, offering fake flattery, distorting information, pretending helplessness and inflicting guilt are often mechanisms for surviving an especially difficult or competitive environment. They’re particularly enticing when a person feels he lacks sufficient power and control.

Sadly, in many organizations manipulation has become an acceptable replacement for positive forms of influence.

Worse, it is often reinforced by organizational systems and culture. My own research bears this out. When decision-making lacks transparency, people are 3.5 times as likely to embellish the truth.

So how can you coach someone who — knowingly or not — leans on manipulative behaviors and help him find more-productive ways to influence others? Sometimes you can’t. But if you’re working with someone you believe has the capacity to change, consider the following approaches.

1. CONSIDER ORGANIZATIONAL FACTORS. What aspects of the organization might be encouraging the behavior?

Organizational factors that may promote manipulative behavior include: — Incentive systems that reward highly individualistic results.

— Cultures that prize secrecy and make information difficult to access or in which passive aggression subverts healthy conflict.

— Evaluation systems with forced distributions into narrow performance categories.

— Siloed structures that protect divisional loyalty.

— Competing or unclear goals that make exploiting am-

biguity the only way to get credit for results.

If factors like these are operative in your organization, recognize that they will discourage mutual, authentic influence, leaving manipulation as the default approach for efficiently getting things done. Doing this analysis before coaching someone will help you see that many people aren’t manipulative by nature but may be influenced by context.

2. PRESENT THE DATA: Confronting people who are practicing manipulative behavior is inherently difficult, because they are often skilled at convincing others of their motives, even if that means twisting the story. When challenged, they may become defensive, offering blustery, sarcastic declarations such as “I’m sorry if others are misinterpreting my intentions, but I’m working my tail off to deliver this under difficult conditions. But hey, if I’m the wrong person, I’m happy to let someone else try.” Being direct and sticking to the facts is the best approach.

After sharing specific examples, it’s important to reinforce your goal: “My intent isn’t to question your motives or charwww.businessday.ng

acter but rather to help you recognize how others are experiencing your leadership and to find alternative approaches to this important initiative that won’t damage your career.”

Use a tone that conveys you are an ally and reiterate your intent to help the other person succeed. Beneath their confident exteriors, people acting manipulatively are often fragile, and they may feel shamed when learning how their behavior is being interpreted. You’ll want to guard against their shutting down. Let them offer explanations, and actively listen. You may discover a side of the story you hadn’t considered before.

3. EXPLORE MARGINALIZING DYNAMICS: Chronic manipulation often masks deep feeling of invisibility. Many people with manipulative habits have experienced being ignored, rejected or excluded from critical conversations.

When someone desperately wants to prove themselves worthy to stop the pain of feeling marginalized, manipulation may seem a reliable tool.

Feeling excluded or insignificant doesn’t excuse manipulation, but it offers an important explanation: that people who

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feel marginalized come to expect exclusion and may act in unconscious ways that lead to it. A leader’s job is to create an inclusive environment in which no unproductive behavior is needed to gain acceptance.

Consider these factors before starting a coaching conversation so that you can lead it with greater empathy.

If you’re coaching someone who has been disregarded in some way, either in his life or while at your organization, explore how that experience might shape his choices. Ask questions like: — “Do you worry that people won’t see you as credible?”

— “Have I, or has anyone, made you feel as if your contribution isn’t important?”

— “Do you struggle to feel confident in the merits of your viewpoints?”

— “Do you frequently fear being rejected by those whose support you are trying to gain?”

“Yes” answers might indicate that someone feels like an outsider. If that’s the case, make sure you are doing everything you can to create a sense of belonging. Coach him on how to build relationships throughout the organization. Check in reg@Businessdayng

ularly to make sure he is making positive connections and is feeling respectfully treated.

4. EXPRESS SUPPORT AND AGREE ON COMMITMENTS: It’s important to maintain empathy during and after this conversation. The person whose behavior you are addressing will leave feeling anxious about his status in your eyes. Emphasize your commitment to his success as clearly as you do your expectations for change. The person must believe you are an ally and ready to help. For example, if you discover skill gaps in the person’s influence repertoire, agree to provide the necessary development.

Being on the receiving end of manipulative behavior can feel demeaning and infuriating. You might conclude that coaching someone away from such behavior is a lost cause, or that he has forfeited the chance to redeem himself. But if you’re willing to take an empathic approach and get to the bottom of someone’s manipulation, you might set him on course for his greatest contributions.

•Ron Carucci is a co-founder and managing partner at Navalent

Wednesday 05 August 2020

BUSINESS DAY

Live @ The Exchanges SEPLAT, Nigerian Breweries, Flour Mills, other stocks push NSE ASI higher Stories by Iheanyi Nwachukwu

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iger ia’s stock market moved further high by 0.31 percent on Tuesday August 4, due to increased bargain in SEPLAT, Nigerian Breweries, Flour Mills, Zenith Bank, and UACN. Investors gained about N40billion at the close of trading session.

For SEPLAT, investors at the Nigeria Stock Exchange may have started pricing in their expectations from the new CEO Roger Brown, who resumed on August 1, 2020. He is expected to lead the company into its next phase of growth

aspirations following the retirement of the founding CEO Austin Avuru on July 31, 2020 after 10 years.

For those buying Flour Mills shares after the company finished its full year stronger, they are positioning to reap the benefits of a proposed final dividend N1.40 which represents increase of 17percent.

The Nigerian Stock Exchange (NSE) All Share Index (ASI) increased to 24,841.94 points while the value of listed stocks rose to N12.959trillion respectively as against preceding trading day low of 24,766.12 points and N12.919trillion. The market’s negative return yearto-date has decreased to -7.45 percent.

In 4,222 deals, investors exchanged 154,467,244 units valued at N1.457billion.

Transcorp, FBN Holdings, Lafarge Africa, Nigerian Breweries and Custodian Investment were actively traded stocks on the Bourse.

SEPLAT led the gainers after its share price moved from day open low of N310.2 to N321, up N10.8 or 3.48percent.

Nigerian Breweries also went up from N31 to N32, adding N1 or 3.23 percent.

Flour Mill increased from N18.75 N19.5, up 75kobo or 4 percent, Zenith rose from N16.35 to N16.95, up by 60kobo or 3.67 percent while UACN went up from N6.3 to N6.85, after it added 55kobo or 8.73percent.

Sterling Bank’s half year profit prints lower at N5.4bn

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terling Bank Plc has released its results for the half-year (H1) ended June 30, 2020.

The bank delivered a profit after tax (PAT) of N5.4 billion on gross earnings of N70.2 billion compared with a PAT of N5.7 billion on gross earnings of N72.3 billion during the corresponding period of 2019. It reported net interest income of N33.5billion as against N30.4 billion in the corresponding H1 period of 2019, representing a growth of 10.1 percent.

The bank’s results at the Nigerian Stock Exchange show customer deposits inched up by 2.5 percent to N915.2 billion in 2020 from N892.7 billion in 2019. Total assets rose by 9.4 percent to N1.29trillion during the review period from N1.18trillion in 2019.

The lender closed the halfyear with a trading income of N3.9 billion as against N1.2 billion for the corresponding period of 2019, representing a

remarkable increase of 242.8 percent.

C o m m e nt i n g o n t h e financial performance, the Chief Executive Officer (CEO) of Sterling Bank Plc, Abubakar Suleiman remarked that “Our impressive half-year performance in the face of the COVID-19 pandemic and the ensuing economic disruption belies the rough seas ahead.

In the second quarter of the reporting period, we focused on empowering our stakeholders to respond to the unprecedented disruption occasioned by prolonged restriction to movement while supporting them to adapt to new ways of banking.

“Ou r c o m m i t m e nt t o digitisation was validated as we continued to serve existing and new customers through our mobile and digital platforms. We also responded to the uncertainty by doubling down on cost optimisation while leveraging our existing

remote work policy to keep our workforce productive without risking COVID-19 infection. Notwithstanding rising inflation, we were able to moderate operating expenses during H1 2020 to deliver a net profit comparable to the first half of 2019.

“In the second half of the year, our focus remains the same; retooling our employees to function optimally while observing social distancing, enhancing our execution capacity and enabling our customers to thrive in the middle of a pandemic. We will continue to focus on the sectors that are critical to the well-being of the economy, or as we call it, the HEART sectors namely: Health, Education, A g r i c u l tu re, Re n e wab l e Energy and Transportation.”

He observed that the contracted gross earnings was primarily due to a dip in fees and commission as a result of a downward review of electronic banking fees.

NSE CEO at Seplat Energy Summit says investors still interested in oil & gas sector

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scar Onyema, CEO of Nigerian Stock E xchange (NSE) has said domestic investors are still willing to continue to put money into oil and gas sector. Though he noted that the sector will continue to experience eternal pressure throughout 2020 due to Covid-19 pandemic.

Onyema spoke at the Seplat Energy Summit 2020 with the theme “Business Sustainability and Strategic Leadership in Africa” where exciting discussion were held on providing valuable insights on the challenging cases on

the role of energy systems to build a sustainable Africa Economies.

The NSE CEO explained that the global pace of growth and the intensity of the trade tensions between the US and China will continue to be a determine factors for investments.

The maiden event held virtually on Thursday July 30 had in attendance government officials, apex and selfregulatory organisations, capital market operators, players in the oil and gas sector, investment bankers, policymakers, chief executive officers (CEOs), economists, researchers,

analysts, academics, and private equity firms.

Also speaking on how to finance the energy sector in the African Continent, Arunma Oteh, former director general of Securitiy and Exchange Commission (SEC) asked energy companies to rigorously optimize their cash flow by rigorous cost cutting, but also rationalisation asset portfolio.

“They should try and divest non-performing assets, optimise investments in merge and acquisitions and explore other financial structures,” Oteh said.

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BUSINESS DAY

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BUSINESS DAY

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BUSINESS DAY

news

FG inaugurates c’ttee to drive implementation of support schemes for MSMEs Hope Moses-Ashike

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An exit class of Government Senior Secondary School Wuse Zone 3, during their resumption in Abuja, yesterday.

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Access to family planning cut by 100% as Ogun battles dearth of health workers RAZAQ AYINLA, Abeokuta

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ndications across the 20 local government areas of Ogun State show that the Southwest state may be faced with a spike in unsafe abortion, unwanted and teenage pregnancy which could lead to maternal mortality, as the state battles dearth of health workers in almost all its health facilities.

Findings from various medical and health facilities visited by BusinessDay revealed that access to family planning services has been reduced by 103 percent due to shortage of health personnel and challenges posed by the coronavirus pandemic.

Statistics gathered from Family Planning Dashboard

between January and May, 2020 indicated a shortfall in the number of women that accessed various methods of contraception compared to the corresponding period in 2019.

Statistics reflected on the dashboard as regards family planning services showed that 4,478 injectables, 4,208 implants and 815 intra-uterine devices (IUDs) were accessed by women of childbearing age in January, 2020, but there was a sharp drop in April, 2020 as 3,231 injectables, 2,069 implants and 570 IUDs were administered.

This represents a shortfall of 38.5 percent of injectibles, 103 percent of implants and 42 percent of IUDs, respectively. Other contraceptives data also showed that 2,422

oral pills were taken for the month of January and 1,185 in April, 2020, respectively while 40,590 male condoms and 3,626 female condoms were marked with shortfall of 23,124 male condoms and 1,681 female condoms within the same period of January to April, 2020.

Reacting to the statistics collated in Abeokuta, the state capital, Oluwakemi Balogun, chairperson, Family Health Initiative Ogun (FAHIO), expressed worry over the likely implications of little or no access to family planning services as the risks taken over unplanned pregnancies and unsafe abortions could spark off deaths among women of child-bearing age and invariably increase maternal mortality ratio.

Balogun, who decried the trend, implored the state government not allow the factors identified jeopardise huge investments and commitments made by government and other stakeholders in ensuring effective family planning services in the state, pointing out any unwanted eventualities would rubbish all efforts and investments made so far.

She, however, assured the residents that the Contraceptive Prevalence Rate (CPR) target of 52 percent by 2020 was still achievable if the government could employ more health workers and upgrade facilities across the state with provision of Personal Protective Equipment (PPE) to safeguard existing health workers from contracting Covid-19.

Why Konga rejected valuation of over $300m from global investors – Ekeh Jumoke Akiyode-Lawanson

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opular e-commerce company, Konga said it rejected a valuation of $300 million from a consortium of global investors last year because it is contented with the group currently funding the company, and its current investors have assured Konga of enough capital to survive the next five year at least.

Nnamdi Ekeh, co-chief executive officer, Konga Group, who spoke on Kaleidoscope, an interview programme aired on Channels TV on August 2, 2020, said that Konga has invested well over $120million since it was acquired by Zinox Group and merged with Yudala two years ago in Nigeria alone and is now strategically structured to take on other African countries. ‘‘We see ourselves as

more than just an e-commerce company. Konga is a technology company and as a technology company, we are positioned to leverage that status in deploying new solutions and innovations.

Indeed, no one should be surprised if tomorrow, Konga starts launching space ships into orbit. Although we have received several offers from interested investors, we are content with the group that is currently funding Konga. The group is highly ethical and wants us to maintain the highest level of integrity. Our investors have assured us of enough capital to survive the next five years at least. This was why we did not accommodate a valuation of $300m from a consortium of global investors last year. ‘‘Though we started with a monthly loss of N400m, but with new systems, structure and energy put www.businessday.ng

in place, we have gradually been reducing losses and now about N100m loss per month. E-Commerce is an expensive project but we are best positioned to deliver as a very innovative technology company,’’ Ekeh said.

The business leader, who described Konga as a technology company revealed that Konga employs directly and indirectly over 150,000 Nigerians. Most of them are merchants, logistics and other service providers. ‘‘We partner to create a trusted and sustainable digitally-driven ecosystem and we are working hard to scale this to about 250,000 before the end of 2020.

According to Ekeh, the company is planning to expand into other African countries in order to reap the huge benefits of the e-commerce market in the continent which is still largely untapped.

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etails of how qualified and targeted Nigerians can access some of the benefits under the Economic Sustainability Plan will emerge soon with the constitution of a 10-man steering committee to drive the implementation of the various support schemes for small businesses especially Micro, Small and Medium Enterprises (MSMEs) in the country.

Niyi Adebayo, minister of industry, trade and investment, inaugurated the committee on Tuesday at a brief ceremony held via videoconference. Membership of the group is drawn from both the public and private sectors.

Some of the programmes include the MSMEs guaranteed off-take simulation scheme which is designed to sustain 300,000 jobs in 100,000 MSMEs by guaranteeing off-take of priority products and extending payroll support and establishing facility in the six geo-political zones; and the establishment of the MSMEs survival fund, targeted at sustaining 1,000,000 jobs in 100,000 MSMEs and 333,000 self-employed individuals through disbursement of grants across the six geopolitical zones.

The minister of state for industry, trade and investment, Mariam Katagum is

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I, formerly known and addressed as Miss Anuoluwapo Amina Bashorun now wish to be known and addressed as Mrs. Anuoluwapo Amina Dungor.

All former documents remain valid. General Public please take note.

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I, formerly known and addressed as Olamide Olamide Comfort now wish to be known and addressed as Akintola Olamide Comfort. All former documents remain valid. Banks and general Public please take note.

the chairman of the steering committee while founder of The Chair Centre Limited, who doubles as chairman, First Bank of Nigeria Plc, Ibukun Awosika is the vice chairman.

Other members of the committee include the chairman of Anambra Rice Mills, Akai Egwuonu; director-general Industrial Training Fund (ITF), Joseph Ari; managing director, Bank of Industry (BOI), Kayode Pitan; the director-general, Small and Medium Enterprises Development Agency, Dikko Radda; and the director, Industrial Development Department, Adewale Bakare.

Also included on the committee are the representative of the office of the chief of staff; the technical adviser to the minister of industry, trade and investment, Kamar Bakrin, while the special assistant to the President on MSMEs, Tola Johnson will serve as secretary of the committee and coordinator of the project.

The mandate of the committee is to amongst other things oversee the implementation of the various MSMEs support schemes captured in the NESP as well as the selection and enrollment of beneficiaries for the schemes.

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CORRECTION OF NAME This is to notify the general public that the name was wrongly written during BVN registration at First Bank as Karimu Olalekan Lasisi instead of my correct name Taiwo Olalekan Kareem. All former documents remain valid. General public should please take note.

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Wednesday 05 August 2020

BUSINESS DAY

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News Why motorists spend longer hours ...

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Ikorodu Road, as traffic slows when navigating through the failed portion.

M any have asked if the

government whose duty it is to maintain both roads and bridges, and fix promptly any identified problems on strategic routes like Eko Bridge, is aware of the problem and its implications for people’s health, business and the economy. “Yes, we are aware of the problem on Eko Bridge and that is the good thing about that. But we cannot afford to close the two sections of the bridge in order to effect a comprehensive repair. Recall that the Apapa bound lane has been closed at the Alaka end,” Adedamola Kuti, director, Highways, South West, Federal Ministry of Works and Housing, explained to BusinessDay on phone Tuesday.

“We have however mobilised the contractor, Buildwell, to move to the failed portion and do some palliative work there so that traffic can move.

But you know how this works.

The contractor has to do some measurements and get the materials for work. All these will take a little while. We are, therefore, appealing to the motoring public to be patient with us,” Kuti said.

He assured that because of the partial closure of the Third Mainland Bridge and the location of Eko Bridge as a strategic alternative route, the palliative work would be done expeditiously to free motorists from the long hours spent on the bridge on a daily basis.

The Federal Government has chosen to undertake the repair of three main bridges in Lagos at the same time. While both Third Mainland Bridge and Marine Beach Bridge are partially closed, allowing motorists to drive with difficulty through narrow, snaking lanes, Eko Bridge is totally closed to traffic at the Alaka end.

Babatunde Fashola, minister of works and housing, explained when he came on inspection of the ongoing maintenance work on Third Mainland Bridge that government decided to work on the three bridges “so that Lagosians can have better driving experience when we are done.

“This is a result of many years of not maintaining the bridges; we are doing what should have been done many years ago. I salute you people for your patience and understanding, bearing in mind that the pains of today would turn to gains for all of us tomorrow.”

The Apapa-bound carriageway on Eko Bridge was closed abruptly about seven months ago by the Federal Ministry of Works, citing broken joints and bearings that could cause serious problems if the bridge remained open to motorists.

Kuti quoted the minister as saying that repair work on that

section of the bridge would be completed before Third Mainland Bridge. Buildwell, which is working on Marine Beach Bridge, is also the contractor in charge of the repair of Eko Bridge.

Meanwhile, motorists have continued to endure the pains in heavy traffic buildups on alternative routes since repair works on the Third Mainland Bridge commenced July 24. Their experiences are, however, being compounded by frequent accidents and breakdown of trucks on some of the alternative routes, notably Ikorodu Road.

On Tuesday, August 4, for example, the stretch between Obanikoro and Fadeyi on Ikorodu Road was near-lockdown following an accident involving a tanker laden with diesel and a trailer. The tanker was said to be racing against the truck when it crashed on the BRT lane and blocked part of the main carriageway, forcing motorists and commuters to spend precious man-hours as they struggled to redirect trip through the service lane inward Anthony Bus Stop.

For hundreds of other motorists, it was equally a rather tough journey driving into the Lagos Island through YabaOyingbo-Iddo route, as the route was characterised by heavy inflow of traffic. It was made worse by trading/commercial activities around Oyingbo and Iddo Market, which combined to slow down traffic, with officials of Lagos State Traffic Management Authority (LASTMA) and policemen engrossed in managing the situation.

Speaking with BusinessDay, the general manager of LASTMA, Olajide Oduyoye, blamed the intractable situation on some of the alternative routes on drivers’ impatience.

“Tell me why a driver of a tanker laden with diesel would be racing against another truck?” Oduyoye queried, noting that managing the traffic would not pose a serious challenge if motorists adhered to the rules.

Oduyoye decried a situation where motorists, especially commercial drivers, would create three lanes on a road designed as two lanes. He also took a swipe at motorists who would deliberately get on the Third Mainland Bridge to the point where it is closed only to claim that “they never knew about the closure” and “then begin to drive oneway on the other lane which itself is a crime.” To check frequent tanker/truck accidents, Oduyoye advocated that the owners of such trucks be held responsible for the wrong doing of their drivers, and called for the linkage of Bank Verification Number (BVN) to driver’s licence, as this would ensure that every traffic offender was made to pay the appropriate fine. www.businessday.ng

L-R: Philip Shaibu, Edo State deputy governor; Godwin Obaseki, governor, Edo State, candidate of the People’s Democratic Party (PDP) in the forthcoming gubernatorial election in Edo State, and Dan Orbih, chairman, Edo State PDP Campaign Council for 2020 governorship election, during Governor Obaseki’s re-election campaign rally in Benin City, Edo State.

Five reasons fund manager is your plug...

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cial markets that are often complex.

“Financial markets these days are very fast-moving and comprise several elements such as stocks, bonds, exchange rates and commodity prices,” FBNQuest notes, adding that the last four months since the spread of the COVID-19 virus across the world have shown that the elements can fluctuate dramatically, sometimes on the smallest piece of news.

The services of a portfolio manager, although come with a fee, take away the headache of continuously monitoring an investment portfolio, a typical scenario of ‘let your money work for you’.

Bears investing emotional burden According to market analysts, investing in financial markets can be an emotional roller coaster as markets can be intoxicating when they are rising, as they did between January 2006 and March 3, 2008, when an economic boom and elevated foreign investor interest in Nigeria saw the NSE all-share index rise over 100 percent.

Fund managers at FBNQuest believe the market can, however, be devastating when they are falling. “As we saw in the subsequent four years when the NSE all-share index declined by 69 percent from its historic peak.”

The volatility and potential losses from ill-advised investments are one of the

reasons why market experts have advised to consider the services of a fund manager.

Portfolio rebalancing Portfolio rebalancing is one of the investment discipline heightened by market analyst needed by an investor to achieve risk-adjusted returns. Portfolio rebalancing is described by industry players as the process of adjusting holdings by buying and selling certain stocks, funds, or other securities to maintain an established asset allocation.

The process, according to market experts, is important because it helps to keep investor’s tolerance for risk at the most comfortable level.

Access to structured products According to the FBNQuest, taking advantage of the discretionary portfolio

management service also provides access to structured products.

These investment products are in the form of notes issued by entities that could be related or unrelated to the fund manager but secured by underlying assets.

While the structured products are often riskier than traditional fixed income instruments, they often offer higher yields and indirectly access income yielding assets in the local or in foreign markets.

Although this kind of products may not be for everyone, the fund manager can help investors get access to them as an addition to a diversified portfolio. For example, they could offer indirect exposure to bonds issued by African governments and corporations.

COVID-19 could leave bitter aftertaste...

Absence of inflow, liquidity squeeze...

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who told SBM that her daughter Aina was becoming perfect in hair making, and depending on how well she learns the trade, would not go back to school upon resumption.

UNICEF notes a disproportionate disadvantage girls face in accessing early education. Regionally, the North has a higher rate of out-of-school children, suggesting the COVID-19 might affect children there worse.

Apprenticeship, a method of training youths and the middle-aged to learn a trade or craft for their future wellbeing and livelihood is

and in Congo Brazzaville co-funded the $250m crude oil prepayment facility for Orion Oil Limited.

Other participants in the NNPC deal include Standard Chartered Bank, Afrexim Bank, Union Bank and two oil trading companies, Vitol and Matrix.

Speaking on this most re-

seen as a positive complement to formal education in a country riddled by high unemployment incidence, some experts argue.

Over the last few years, there has been a clamour for a more entrepreneurship driven economy built on craft and acquired skills, which can create the muchneeded jobs.

Mummy Victor, who is a Surulere, Lagos-based single mother, believes her son learning to fix cars during the pandemic break is in his best interest in the future. But she was clear that he would resume his studies whenever schools open.

across all tenors shed 20bps Week-on-Week (W-o-W) to close at 7.1% on Wednesday.

Most of the demand was noticed at the top and mid sections of the curve. Notably, the Mar-27, Feb-28, and the Mar-24 bonds were the most sought after; shedding 125bps, 69bps and 66bps, respectively, W-o-W. “We expect sustained, albeit reduced buying interest due to expected lower levels of financial system liquidity.

We however sustain our recommendation that investors cherry pick bonds with attractive yields across the curve,” the analysts said.

UBA provides $200m for Nigeria’s ...

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cent support for the Nigeria’s petroleum industry, Tony Elumelu, UBA group chairman, said, “This has been one of the most economically challenging years that Nigeria has witnessed. With

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the sharp drop in the price of oil and the ensuing hardship that followed the onset of the Covid-19 pandemic, the private sector must come together and contribute meaningfully to the economy.

“This facility is clear evidence of this – UBA is provid@Businessdayng

At the foreign exchange market, naira was unchanged at N474 per dollar on the black market on Tuesday. Though, it was quoted at N473 on the aboki FX from N475 last week.

Naira strengthens against the dollar at the retail Bureau where the dollar was traded at N474 on Tuesday from N475 traded last week.

The foreign exchange market opened with an indicative rate of N388.46k, which pointed to a marginal depreciation of N0.13k when compared with N388.33k opened with on the previous day at the Investors and Exporters (I&E) forex window, data from FMDQ revealed.

ing investment that will significantly improve Nigeria’s production capacity and in doing so also demonstrating the strength, depth, and sophistication of our commercial banking capability. I believe that together, working with governments, we can create more jobs and more wealth for people, not only in Nigeria, but across Africa.”

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Wednesday 05 August 2020

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EXPERT PROGNOSIS OF NIGERIA’s ECONOMY EXPLAINER

IMF provides extra details on why Nigeria took $3.4bn loan DIPO OLADEHINDE & DAVID IBIDAPO

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bout four months ago, the execut i v e b o a rd o f International Monetary Fund (IMF) approved the historic disbursement of $3.4 billion to Nigeria as assistant for coronavirus pandemic and failing oil price.

The fund Nigeria received from IMF is the second highest of the countries that have benefitted from RFI during the Covid-19 pandemic.

South Africa got $4.3billion, Côte d’Ivoire – $886.2million, Egypt – $2.77 Billion, Tunisia – $745 million, amongst others.

Four key commitments expected from Nigeria International Monetary Fund (IMF) Mission Chief and Senior Representative in Nigeria, Jesmin Rahman, explained that there are four important policy commitments Nigeria must adhere to, in order to not only ensure proper use of the fund but also address long-standing macro-economic weaknesses in the country.

The important policy commitment include, exchange rate unification and greater flexibility; resume domestic revenue mobiliza-

tion once the crisis passes; transparent use of emergency fund through various measures introducing budgetary lines; having an expository audit of these funds, and safeguard assessment of the central bank.

Reason for RFI loans Jesmin Rahman noted that RFI loan is an emergency window which was developed for low income countries.

“Tons of countries have come to us and we have been providing emergency assistance through these windows,” Rahman said.

Why is IMF giving Nigeria the loan?

The IMF explains that the immediate economic impact of COVID-19 is expected to be

severe in Nigeria especially as things have been bad even before the twin calamity of the coronavirus and the fall in oil prices.

It also remarked that the pandemic along with the sharp fall in oil prices has made Nigeria even more vulnerable and this could lead to a recession and a huge funding gap.

The IMF also explains that the current situation could make the average Nigerian even poorer and so the need to extend the financial assistance.

One other major reason for this loan, which we had mentioned above was to help the government meet its balance of payment obligations.

Will the money be dis-

bursed to State government or local government?

The money is not available to State governments or local government. It is a loan to the Federal Government and will be used for Federal expenditures. States will probably seek funding support from the World Bank and other multilateral institutions.

Does the loan come with an interest rate and are we meant to payback?

The IMF loan comes with a concessionary interest rate and is expected to be paid back by Nigeria. According to data from the website of the IMF, the interest charged is not flat and applies to several factors. The IMF charges a lending rate, annual commitment fees, and service

charge.

The commitment fee can be as low as 0.15percent and as high as 0.6percent.

The service charge is about 0.5percent for each amount that is withdrawn. The lending rate is 0.05percent (also called the Special Drawing Rights) plus a margin of 1percent totalling about 1.05percent.

The higher a country draws on the loan beyond its quote the higher the margin it pays. Margins can go as high as 3percent. Nigeria is taking 100percent of its quota so we expect the interest rate to be about 1.05percent.

Based on the terms of the Rapid Financing Instrument, Nigeria is expected to pay back the loan between within 3¼ to 5 years.

Does this loan solve all Nigeria’s economic issues?

This loan does not solve all of Nigeria’s economic challenges.

With the COVID-19 pandemic set to take a toll on an economy that was already on slippery ground, the IMF expects the economy to contract 5.4 percent this year, the worst contraction since 1987.

That prediction means per capita GDP will contract even further, a painful squeeze for a country with per capita GDP of around $2,222.

It means Nigerians will

get even poorer than they are now for another five years, as their incomes continue to shrink and the economy bleeds.

The IMF explained it as follows; “The emergency financing under the RFI will provide much-needed liquidity support to respond to the urgent BOP needs. Additional assistance from development partners will be required to support the government’s efforts and close the large financing gap.”

So, to solve Nigeria’s revenue challenges, the government will still need to rely on a combination of more foreign currency loans, local bonds, increased revenue, and economic reforms.

Does this loan get Nigeria out of recession?

Nigeria is in trouble and the economy is tilting towards a recession; if it is not in one already.

The IMF loan is not expected to solve all of Nigeria’s problems. It is therefore not expected to singularly avoid Nigeria from getting into recession or get Nigeria out of recession.

The last time Nigeria suffered a recession in 2016, global cr ude oil pr ices dropped, resulting in forex reserves also dropping, due to the country’s over-reliance on oil revenue.

senting a 52 percent shortfall.

Oil revenue was N464 billion, representing a shortfall of 30 percent when compared to budget while non-oil revenue was N269 billion, representing a shortfall of 40 percent.

While the experts arrived at a consensus that Nigeria needs private capital to resuscitate the economy post

COVID-19, the government may not be entirely sold to the idea.

The newly revised budget shows little signs of ambition to attract private capital through privatisation.

The N5.6 trillion 2020 budget deficit will be financed mainly through debt totalling N4.6 trillion. Bilateral and multilateral draw-downs will provide the second largest source of the deficit with N387 billion, while drawdowns from Special Accounts will total N260 billion.

Privatisation’ proceeds are expected to rake in just N126 billion and no details of the assets to be privatised were provided. It was cut by 50 percent from an earlier estimate of N256 billion.

The lifeline of ‘Equity financing’ The problem of lower revenue and rising debt burden

Equity vs Debt: Making a choice for Nigeria Continued from front page

and Fiscal Strategy (MTEF/ FSP) report by the Federal Ministry of Finance, Budget and National Planning showed that in Q1 2020, Nigeria incurred a total sum of N943.12 billion in debt service while the Federal Government retained revenue was put at N950.56 billion.

This means that about all the revenues generated from both oil and non-oil sources were used to meet debt service obligations.

What is worse is that Nigeria has little to show for its rising debt stock.

While the Federal Government’s debt stock has tripled to N28.6 trillion in the last five years, economic growth has been stuck at around 2 percent when not contracting.

The rising debt level is not the only problem. The other

worry is that most of that debt, in their huge sums, may not have been channelled rightly, mostly gulped by recurrent expenditure and more recently, debt servicing. This may help explain why the debt hasn’t translated to economic growth.

The country’s Debt-GDP ratio below 30 percent suggests the country is in a www.businessday.ng

healthy debt position.

However, for Nigeria, a better indicator of debt sustainability is the debt serviceto-revenue ratio, which has risen to worrying levels of 99 percent as at Q1 2020.

Nigeria’s debt stock has risen on the back of lower revenues.

Revenues have dwindled

along with the global price of oil. From as high as $110 in 2014, oil is closer to $40 currently, more than half of 2014’s price. The government expects oil revenues to fall 80 percent this year.

In the first half of this year, the country earned N950.5 billion compared to a prorated budget of N1.9 trillion, repre-

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EXPERT PROGNOSIS OF NIGERIA’s ECONOMY

begs one question. Why borrow so much when you can raise equity, which is much cheaper?

Equity financing involves raising private capital either by privatisation of government assets or concessions.

This seems a better path if Nigeria must boost economic growth and development while avoiding a debt trap.

Experts narrowed down to a few equity financing options available to Nigeria from repositioning pension funds, attracting Foreign Direct Investment (FDI), unlocking capital through Joint Ventures (JV) and unlocking dead capital.

Repositioning pension funds Nigeria had pension assets worth N10.8 trillion as at May 2020, according to data from the Pension Commission.

Although that is a small fraction of GDP, the money has not been deployed the best way possible.

This is as about 70 percent of the total pension funds sit in government debt instruments from bonds to treasury bills.

Pension fund managers have long complained about the dearth of investable assets in a country that requires billions of yearly investments to bridge a yawning infrastructure deficit.

“There is something wrong in building longer funding via pension funds and only to lock them up in treasury bills and bonds,” says one source familiar with the pension industry.

“So, in part, Nigeria’s challenge has to do with public assets worth trillions of Naira wasting but which can be freed and turned into investable assets,” the source said.

“Records show that as you free these assets as was done during privatisation, investment capital will come.

There are simply no credible large ticket investible assets in Nigeria at the moment,” the

source added.

Boosting FDI A look at the National Bureau of Statistics (NBS) report on Nigeria’s capital importation reveals how Nigeria is losing FDI – a more patient capital essential for economic growth in developing countries which allows for the transfer of technology, uplift competition in domestic input market, contribute to human capital development and contribute to corporate tax revenues in the host country.

Analysis revealed that since 2014, Nigeria’s FDIs have declined annually at an average rate of -16 percent through 2019. In 2014, Nigeria received FDI worth of $2.27 billion. However, in 2019 FDI stood at just $934 million, representing a 59 percent decline against 2014.

Also, on a quarterly basis, Nigeria’s foreign direct investors have consistently reduced their exposure to the Nigerian market yearly.

In 2019 for instance, average quarterly investment stood at $233.58 million against $569 million in 2014.

More importantly, among peers in Sub-Saharan Africa, Nigeria is losing FDI battle. In 2019, South Africa attracted on the average $1.3 billion while Egypt $3.5 billion in FDI, according to the World Bank data.

The underperformance of Nigeria in this regard has been blamed on bad government policies, policy inconsistency and uncertainty, and the reluctance to implement market-friendly reforms that will open the economy to investment.

To boost Nigeria’s FDI, Nigeria must be ready to speed up reforms in key sectors of the economy like the power sector and collapse its multiple exchange rates to a more market reflective rate.

More importantly, how Nigeria treats some of its largest FDIs from oil companies who are being accused of owing billions of dollars www.businessday.ng

in back taxes and telecoms giant, MTN who has been on the receiving end of a number of hefty fines, is surely not the best way to sell the country to potential investors.

Unlocking dead capital Dead capital is an economic term relating to property that are informally held, and not legally recognized.

It is estimated that about 95 percent of property in Nigeria is in this class. Generally, uncertainty of ownership diminishes the value of assets, and the ability to lend or borrow against it.

According to estimates by global consulting firm, PricewaterhouseCoopers (PwC), Nigeria holds, at least, $300 billion or as much as $900 billion worth of dead capital in residential and agricultural real estate.

The estimate, according to them, was based on Nigeria’s population figure of 180 million and 36 million households of which 95 percent of household dwellings in the country have no title.

According to PwC, unlocking this dead capital in Nigeria will expand the size of the economy by more than double from $445 billion to $1,045 billion and will be a breakthrough to bridge the country’s wide housing shortage of over 17 million units.

In his presentation at BusinessDay Knowledge Sharing (Lecture) Series in Lagos, Chudi Ubosi, an estate surveyor and valuer, affirmed that only 5 percent of real estate assets in Nigeria is in formal mortgage, meaning that 95 percent of the country’s real estate assets are dead assets or capital.

According to the PwC report on unlocking dead capital, the conversion of dead capital to live capital through structural reforms would help convert most of the capital in the informal economy which is currently valued at 65 percent of GDP into the formal economy. This will also increase capital for in-

frastructure in the sector and increase economic activity.

Nigeria must unlock value from its dead assets. The Federal Government owns stakes in companies, owns lands and other assets which are wasting away and can be unlocked to attract domestic and foreign capital. These assets can be sold, securitised or leased to generate revenue and unlock growth in the economy.

Idle Oil fields Inactivity in untapped oil fields presents another glorious opportunity for Nigeria to tap into its huge potentials and cement its place as largest producer and exporter of petroleum in Africa and one of the ten largest producers in the world.

Nigeria has seven basins,

namely Anambra, Benin, Benue, Bida, Chad, Niger Delta, and Sokoto, all with a total of 390 oil blocs. 211 of these blocs are yet to be allocated by the Federal Government.

In Anambra, 12 out of 19 blocs have not been allocated; in Benin, 39 out of 50 are idle; in Benue, 41 out of 43 have remained inactive, while none of the 17 blocs in Bida has been allocated.

In Chad basin, 40 out of 46 blocs are open; in the oil-rich Niger Delta, 34 out of 187 blocs are still idle, while Sokoto’s 28 blocs remain unallocated.

Another scary facts include an Owowo oil reserve field discovered in October 2012

by United States’ oil giant, ExxonMobil Corporation, with about one billion barrels of oil

in the Owowo field, offshore Nigeria, capable of spinning whooping oil revenue that has however been abandoned.

According to energy experts, the field would have boosted Nigeria’s effort in increasing her crude oil reserves from the current 36 billion barrels to 40 billion barrels target, which was set for 2010, but could not be achieved as a result of lack of investment in exploratory activities.

The only other significant investment in the pipeline is the Zabazaba development project by Eni, an Italian multinational oil and gas company. The project would add 150,000 barrels/day if it comes online, but a Final Investment Decision (FID) has not been reached on the project.

What experts are saying about Nigeria’s financing options Ayo Teriba eriba, the CEO of consulting firm, Economic Associates, says Nigeria should explore equity financing options and reduce focus on debt.

“In every companies’ balance sheet, there are assets and not limited alone to debts. As a country, we must broaden the focus beyond revenue and debt. Do we not have assets?” Teriba said at a recent webinar.

According to him, the Nigerian federal government owns stakes in redundant companies that can be sold to private investors and has idle lands and other assets which are wasting away that can be unlocked to attract private capital.

Teriba gave Saudi Arabia and India, both of which plan to privatise some of their critical sectors to raise funds to boost the economy, as worthy examples Nigeria can emulate.

“Saudi Arabia for instance, plans to raise about $200 billion through the privatisation of 16 sectors ranging from healthcare, airports to education.

“There is also headroom for unlocking liquidity from state-owned assets to meet shortfalls in Nigeria. Nigeria’s massive non-financial assets are convertible into financial buffers.”

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Muda Yusuf usuf, Director-General of the Lagos Chamber of Commerce and Industry (LCCI), says equity financing is the way out of Nigeria’s rising debt and tepid economic growth.

Yusuf suggested that the Nigerian government should draft policies that would attract domestic and foreign private sectors and encourage them to part with capital for equity.

“We should be looking more in the direction of equity financing. But for this to happen, the policy and regulatory environment must be right,” Yusuf added.

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Jesmin Rahman, n important policy area for Nigeria is to enhance domestic revenue mobilization, according to Rahman, the IMF’s Mission chief to Nigeria.

At 8% of GDP, domestic revenue levels are one of the lowest in the world whether we compare it to SSA or oil exporters, these are very low.

These revenues are also low compared to the minimum threshold required for government to play an effective role. This is an undisputed area where action is needed but of course right now is not the time to raise taxes. Nigerian government started to take important steps prior to covid-19 in the finance bill in terms of increase the VAT rate and it will be very important once the covid-19 crisis passes to renew focus on that.

If Nigeria is to raise its revenue in any meaningful way, it has to move on very many fronts. It needs to increase tax efficiency, rates need to increase for VAT which is again one of the lowest in the world, and excise needs to be broadened. As we know from experiences in other countries, this is a very challenging job, it takes several years of concerted and sustained effort to make any kind of gain in revenues.

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Kelvin Atafiri tafiri who runs Cavazanni Human Capital Limited, an investment firm exposed to the oil and gas sector said Nigeria has many untapped financial potentials in the oil and gas sector.

“There are many idle fields waiting for private investors, but then policy inconsistencies are still a major factor,” Atafiri said.

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news COVID-19: La Casera celebrate everyday heroes

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n appreciation of the frontline workers who have been committed to the overall wellbeing of Nigerians during the Covid-19 pandemic, the La Casera Company (TLCC) is rewarding frontline workers with the ‘La Casera Heroes’ initiative.

The initiative is to recognise frontline heroes that have been providing essential services since the first index case was reported in Nigeria.

Speaking at the gift presentation and the unveiling of the La Casera Heroes Campaign, managing director, The La Casera Company, Chinedum Okereke, said recognising the contributions of these unusual yet special heroes was important.

He also revealed that The La Casera Heroes initiative was to contribute to the emotional wellbeing of individuals working in high risk areas, under intense pressure, by recognising, appreciating and celebrating them in a special way.

“These are unusual times and many people are doing incredible work to keep our people, cities and the country running

as best as is safely possible.

“It is our way of shining the spotlight on them for their self-sacrificing work as we show our appreciation. It’s times like this that a thank you goes a long way,” said Okereke.

Announcing the winners, the group marketing director, Agu Emmanuel said, “We have many individuals who have done well to support the country during this period and it is important for us to also support in communities where we operate. It is wonderful to hear these stories which are great examples of how people are making a real difference in people’s lives during this uncertain period.”

According to him, ten heroes emerged from the pool of outstanding entries received from individuals online who nominated their ‘everyday super hero’.

He said due to the large number of entries received, La Casera would continue the hero celebration until the end of the year. “More heroes will be unveiled and celebrated as they are nominated via its social media pages,” he said. www.businessday.ng

RCCG donates additional 20,000 face masks to Lagos

COVID-19: How we’re preparing to reopen universities — NUC

…as O-Care face mask opens factory in Lagos

…says 32 varsities undertaking researches on coronavirus cure

Iniobong Iwok

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he Redeemed Christian Church of God (RCCG) has donated additional 20,000 medical face masks to the Lagos State government as part of its contributions in eliminating the spread of Covid-19 in the state.

The donation was made during the commissioning of O-Care Face Mask factory; the first certified and registered medical face masks facility in the country.

Speaking at the occasion, Idowu Iluyomade, the special assistant to the General Overseer of RCCG on Christian social responsibility said the mission would continue to support the government’s efforts in the fight against Covid-19.

You would recall that that Enoch Adeboye, the General Overseer of RCCG had donated 11 Intensive Care Unit (ICU) beds fully fitted with ventilators to Lagos, Ogun and Plateau States to contribute to the improvement of healthcare facilities in Nigeria which is now found very useful at this period of the Covid-19 pandemic,” said

Iluyomade.

The RCCG donated 10,000 hand sanitisers, 10,000 surgical face masks and 200,000 hand gloves to support the efforts of the Lagos state government in equipping the medical staff with necessary protective gears needed to contain the Covid-19 pandemic.

Managing director of Transgreen Nigeria Limited, Cyprian Orakpo urged other religious bodies, medical institutions, government agencies, state governments, educational institutions and the general public to go ahead and place order, as Transgreen Nigeria Limited was sure to deliver on time as the company believes in making affordable medical face mask accessible to all.

The commissioning of the factory had Vice President Yemi Osinbajo, who gave a goodwill message virtually, and also Lagos State, governor, Babajide Sanwo-Olu, who said it was a confirmation of what Lagos State Government stood for; creating a favourable atmosphere for business to thrive.

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MARK MAYAH

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he National Universities Commission (NUC) said on Tuesday that preparations were in top gear to reopen the nation’s universities after long closure as a result of the outbreak of coronavirus.

The commission said it was collating data on the assessment of the level of preparedness by the various universities through their vice-chancellors to determine if the universities were safe for resumption to both academic and nonacademic activities.

The NUC, however, added that a total of 32 universities in the country were carrying out researches on solutions to the dreaded coronavirus in the country.

The executive secretary of the commission, Abubakar Rasheed, speaking at a media briefing in Abuja, disclosed that so far, a reasonable number of vice-chancellors have submitted their reports on the level of their readiness to the commission, saying once @Businessdayng

the process was concluded, it would make a statement either to direct universities to resume or otherwise.

Ra s h e e d , w h o sp o ke through the deputy executive secretary, academics, Suleiman Ramon Yusuf, at the briefing meant to showcase the ongoing contributions of Nigerian universities to the national response to Covid-19, however, regretted the expected resumption may be marred by a strike in public varsities even as he said efforts were on to find a permanent solution to incessant industrial actions in our universities.

“We have a template for vice-chancellors of all universities requesting them to suggest to us what kind of protocols and strategies are they putting in place in the various institutions.

We are collating some of the responses which have already started coming in and at the end of the day, the picture should emerge about the extent to which our universities are prepared to reopen for academic activities,” he said.

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INSIGHT

The silver lining under the Covid-19 and Floyd Cloud Presented to alumni of Henley Business School Africa

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world is to be missed, the following quote by an anonymous author, captures what I would like us to leave behind as we look forward to a better post-COVID world. The quote states: “We will not go back to normal. Normal never was. Our preCorona existence was not normal, other than we normalized greed, inequity, exhaustion, depletion, extraction...

We should not long to return my friends. We are being given the opportunity to stitch a new garment. One that fits all of humanity and nature”.

So indeed, as unfortunate as the COVID-19 pandemic has been, it brought us all to a point that has compelled us to reflect, re-think and reset our relationship with our world, our continents, our countries and our individual actions. Now, just in case we did not get this “reset” message, the Floyd incident happened! The despicable murder of an unarmed black man, that sent ripples down spines of many, around the world and triggered protests by people of all races, further hammered in the rest message. And this time around, judging from the rallies that sprang up, in over 50 countries around the world and in all continents (except Antarctica), it looks like the reset message has finally hit us loud and clear. The protests were not just against racial inequality, but all other forms of injustice.

Thankfully the various rallies across the globe has awakened people’s consciences and in many countries, institutions and organisations are reviewing their policies to correct and eliminate the systemic racism that had become normalized. Concrete action points are being announced and implemented at different levels; from the Prime Minister of the UK, Boris Johnson, www.businessday.ng

to Heads of Business Schools like Harvard, and organisations like PWC, and big businesses like DSW. I believe this is one significant reset that has been facilitated by COVID crisis and jolted into action by the Floyd incident. Both crises therefore present an opportunity to create a better post-COVID and post-Floyd world.

Another positive occurrence is the fact that in many of the BLM rallies, there were people of all races. This suggests that there is now some form of global agreement in the decision to stand for fairness and justice, while shedding the systemic ways through which racial, economic and social injustices have been perpetuated and reinforced. I also believe that the condemnation of racism by many white people is

‘

We will not go back to normal.

Normal never was. Our preCorona existence was not normal, other than we normalized greed, inequity, exhaustion, depletion, extraction...

‘

started writing this article with the title, “The silver lining under the COVID cloud”, and then the George Floyd incident happened, followed by the Black Lives Matter (BLM) rallies that rippled across the globe to protest racial inequality and all other forms of injustice. Upon recovery from my shock, at the way Floyd was murdered, I realized that, just like the COVID pandemic, some positive outcomes could actually result from these ugly incidents that have caused emotional and financial traumas. I therefore found myself re-thinking the title of this presentation as, “The silver lining under the COVID and Floyd cloud”, because I perceived both incidents, nudging the world to reset for the better.

As the COVID-19 pandemic was spreading across countries and several conspiracy theories were spun around the nature of the disease and the different roles China and the US played in its development and spread, I couldn’t help seeing a more transcendental reason behind it all. In my opinion, the world was on a path to self-destruction on different levels, and the COVID pandemic brought us to a jolting halt. The lockdowns provided an opportunity to reset environmentally, economically and socially.

Environmentally, because, in spite of all the warnings about climate change and required behavioural changes and practices demanded, for the most part, we continued business as usual. We barely heeded the catastrophic predictions regarding global warming, if we failed to reduce our carbon footprint.

Economically and socially (and I tie both factors together, because they affect each other), whether across continents or countries and within countries, the economic system was and remains skewed to favour some at the expense of others, rather than one that allows for shared prosperity. Keeping in mind the unsavoury results of wide economic disparities, and the fact that they keep broadening, as the rich become richer and the poor, poorer, the horrors we witness today, across the globe, such the rise in terrorism, human trafficking, suicides and unbridled shootings can only get worse if this system is not reset to allow a win-win situation for all stakeholders.

The pre-COVID world was therefore in my opinion, on a self-destructive path as a result of selfishness and greed. As people refer to the new-normal with a tinge of sadness, as though the pre-COVID

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a signal, that will also neutralize any tendency for reverse racism, as it will always be remembered that not all whites are racists. In my view, the Floyd incident, which represents the slew of racially induced killings, calls for an end to racial injustices and a transition to a system that is fair to all, and allows for shared prosperity. This is actually a better, more peaceful and more sustainable way to live. Consequently, if we take the right actions, I believe the world will be making progress in the right direction.

Further, considering that historically, perpetrators of tyranny have always come to an ignominious end, I do not think that allowing systemic injustice to continue would do any good to the perpetrators or to the world in the end. Examples abound, but I will only name a few; ranging from Hitler in Germany, to Idi Amin in Uganda, Saddam Hussein in Iraq and, Muammar Gaddafi in Libya. These tyrants reigned for a time, and all ended up badly. There is an African proverb that states, “the child that is not loved by the village will set it on fire, so that it can feel its warmth.” The on-going riots in the US, which started peacefully and have now turned into havoc wreaking riots, are a manifestation of this proverb. I think we should learn from the past, and that the call for a reset at this point is a fortunate one, as it provides an opportunity to avoid a trajectory that could have a very sad ending.

I also consider the fact that there were some anti-BLM riots, and I have tried to understand why some people would try to justify systemic injustice, or see the Floyd incident as anything other than what it is, which is murder!

I realise that part of what may have reinforced the slew of police brutalities especially against black @Businessdayng

people, is a result of negative stereotypes: Black excellence and the contributions by black people to society, have been consistently undermined, while highlighting slights, which have led to negative prejudices that fuel racism. I however discovered through my personal research that a significant number of valuable black inventions over time, which continue to be very relevant today (see http://johnmpinto.com/blkinvlist.pdf for a long list of inventions by African Americans).

These inventions have gone unacknowledged for decades, and were never taught in schools or talked about. For instance, we all believe that Thomas Edison invented the light bulb, but the 1 truth is that the light bulb was invented in 1881, by an African-American named Lewis Latimer.

No one ever heard of him, but he created a light bulb with a filament made from Carbon, which is more durable, and sold the patent for the “Incandescent Electric Light Bulb with Carbon Filament” to the United States Electric Company in 1881 (see ttps://cutt.ly/ruAjt8o ).

At this point, I share slides that show about 19 different contributions to the world by Africans and African-Americans (slides attached and a table is shown in the appendix for those who may not be able to access the slides).

Some of the contributions contained in the slides include: • A Nigerian Professor of medicine, Babafemi Taiwo, who is currently leading the efforts in the US to find a potential cure for Corona virus. He is leading a major study on the famous COVID-19 drug, Remdesivir, which is currently confirmed to be the most effective in treating COVID patients.

• Elon Musk, a citizen of South Africa, Canada, and the US, who is the inventor of Tesla Motors – a car many Americans and people around the world aspire to own: He is also the founder of PayPal, a payment platform that allows people make safe payments globally, and the founder of SpaceX, which in 2010, became the first private company to launch a rocket into orbit and return it to Earth intact—a feat that only government agencies like NASA or Russia’s Roscosmos had done before.

• Dr Oluyinka Olutoye, a Nigerian surgeon resident in Texas, who in 2016, successfully took a premature baby out of the mother’s womb, operated on her brain to remove a tumor and returned her to the womb. He has since been appointed Surgeon-In-Chief at Nationwide Children’s Hospital in the U.S. More accomplishments and innovations by African-Americans are reported on this link: shorturl.at/gvB45. I share these contributions, because it is my belief that racism can be diffused, if people knew the valuable contributions made by the various races and cultures that make up any population, they would

appreciate and respect one another more, because they realise that they benefit from each other.

Further, I believe that there is also ignorance about the fact that a major contributor to Americas greatness is the heterogeneity of its population. The multiple races and cultures in the melting was not “invented” in the traditional sense in 1879 by Thomas Alva Edison, although he could be said to have created the first commercially practical incandescent light”. pot that make up America’s population, brings so many benefits to the country in terms of multiple ideas and innovations that has made America a world leader.

I will use two examples to illustrate the value of heterogeneity: The first example comes from a book by Richard Branson, titled, “Screw business as usual” and has to do with a group of Navy seals who were asked to form two teams for the day’s tasks.

All the white Americans chose to stick together in one team, while the other team was made up of different ethnic minorities who were neither as tall or as broad shouldered as many of the American hunks that formed the other team. Both teams were given similar tasks to perform and by the end of the day, the heterogeneous team of minorities significantly outperformed the homogenous team of white Americans.

This was because the ethnic minorities came from different backgrounds and could apply a rich variety of ideas to the tasks they had been entrusted with. They were therefore able resolve them quicker than the team with a homogenous knowledge base. In addition to this anecdote, research has shown over and over again that heterogeneous teams tend to be more innovative than homogenous teams.

The second example has to do with royals: You may recall that in the past, that when royals chose to keep their believed superior blue-blood intact, they engaged in consanguineous marriages, which refers to marriage among close relatives. They ended up getting children with weaker and weaker constitutions, as a result of genetic disorders. As a result of this, consanguineous marriages became discouraged and eventually prohibited.

Both examples support the fact that diversity is enriches and strengthens, and more importantly, that none of us, is as good as all of us. We are therefore better together.

Economically: As countries across the globe struggle with economic recovery after the pandemic induced lock downs, African countries must find ways to achieve better economic performance. There is a need for African countries to change the habit of importing what it can produce, simply because it is cheaper to import, than to manufacture locally, due to our infrastructural challenges.

Fortunately, the flight and export restrictions around the world, compel a greater effort to achieve self-sufficiency. African countries should see the current situation as an opportunity to reduce import dependence on countries outside continent. However, there are stronger reasons now more than ever before why self-sufficiency is important.

Africa needs to give the world more reasons to respect it. I believe that respect is earned and Africa needs to go from doing what is easy, to doing what is best for it in the long term.

For instance, the importation of items such as pencils, toilet paper, toothpicks, liquid handwash or other liquid soaps, ketchup, biscuits and many basic things which can be manufactured locally, needs to stop. No matter the challenges, we must be determined to produce such basic items locally as it creates jobs and expertise for the local population and also conserves our much needed foreign exchange.

As the African Continental free trade agreement (AfCFTA) comes on stream, trade collaborations among African countries must grow. Africans must deliberately seek to do business with other African countries to boost the economy of the continent, and preserve wealth within the continent.

Another way of preserving wealth within the continent is by changing our tastes for vacationing outside the continent, to doing so within the continent. Many African countries

have wonderful weather and great tourist attractions. Unfortunately, middle class to wealthy Africans have a pervasive economically unhealthy habit of vacationing outside the continent. They are mostly in Europe or America, during summer, Christmas and/or Easter holidays expensive foreign currency to the detriment of our national economy and to the advantage of the countries of destination. Imagine the number of jobs that would created and lives transformed if all that money was spent within the continent.

For the BLM movement to have long term traction, black people all over the world, especially those in Africa, must be determined to attain a stronger financial muscle that provides a more potent global voice.

Until African countries begin to strengthen their economic performance, Africa may unfortunately remain a region for exploitation, and black people around the world may continue to be perceived as the underdog.

Socially: I believe the COVID pandemic has forced us to understand that we must be our brother’s keeper. As long as any one is compromised by the virus, we all are. We must therefore be concerned about the living conditions of the poor who form the majority in most African countries.

The pandemic compels this concern for the less privileged, as they usually work for the richer folk in the population, either as domestic staff (nannys, cooks, chauffeurs, gardeners or, electricians etc. or serve us in supermarkets, hotels and even in work places as janitors. Consequently, if their living conditions expose them to contagion, the rest of the population are also endangered.

This should compel governments and business leaders in the private sector, to find ways to improve sanitation and provide basic

Concluding thoughts As we acknowledge that our preCOVID world was neither perfect nor normal, and that the COVID pandemic as well as the Floyd incident, unfortunate as they are, provide us an opportunity to reset our countries and continents economically, socially and environmentally, in this final part of my presentation, I would like to focus on the steps I believe Africa can take to ensure that the Post-COVID and Post-Floyd Africa is both stronger and better than it was previously: www.businessday.ng

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‘

If you want to remain small, solve small problems. If you want to be big, solve big problems

‘

Henrietta Onwuegbuzie, PhD

infrastructure in low income neighbourhoods, and thus assure the safety of the population. Though economic disparity is currently a global phenomenon, the problem is quite exacerbated in African countries, and we cannot continue to ignore it as the consequences are bad for everyone.

We can emerge from this crisis better if we start to encourage purpose-driven entrepreneurship that is focused on transforming lives and improving society, by using financially profitable business models. We must unprogramme ourselves from the belief that social concerns are the purview of nonprofit businesses, charities and/ or government. The pervasive erroneous idea that the sole purpose of a business was to make profits for shareholders, took hold in the 1970s, when Milton Friedman wrote this in New York Times. The most obvious evidence against this is the fact that the most successful entrepreneurs in the world today, happen to be some of those who have made the greatest positive social impact on humanity: For example, Bill Gates was obsessed with making people more creative by putting a personal computer on every desk and making it user friendly. Because this solution was so useful, people all over the world were willing to pay for it and as a result, he became the richest man in the world for over 18 years.

We can learn from this, that impact and profit are compatible, rather than dichotomous. As Jack Ma, the richest entrepreneur in China would say, “If you want to remain small, solve small problems. If you want to be big, solve big problems”.

Africa has many problems, and therefore several opportunities, because every problem represents a potentially profitable business opportunity. Africa needs impact or purpose-driven entrepreneurs, who understand how to use business as a tool for social transformation, and so can accelerate Africa’s development, @Businessdayng

in a sustainable way. Africans must give dignity to Africa and change the pervasive narrative of Africa as a poor, dark continent. Africa is the root of all civilization and can still take its rightful place, if Africans can develop the right mindset of consciously working towards the vision of making Africa rise again!

Environmentally: The lockdowns, resulting from the COVID pandemic, have made us realise that we can work effectively from home in many instances, and so organisations have realised that they can cut down on office space and rentals. Similarly, lots of conferences have held online, so the belief that conferences implied people coming together from different geographies is no longer the case. Consequently, with more people working from home and significantly less flying around, there’s a much reduced level of carbon emission globally.

Not even the popular teen environmental activist, Greta Thunberg, could have achieved such a feat in such a short time!

In addition to this, Africa has the advantage of practically a full year of sunlight and thus needs to exploit solar power more, as it is clean energy. As African countries are not yet sufficiently provided for, in terms of energy, Africans have the advantage of leapfrogging energy technology based on existing best practices, to provide affordable, clean energy in areas that still lack conventional electrification. It is my hope that just as young African entrepreneurs are doing a fantastic job of coding and developing Apps that address problems on the continent, they would do the same in the energy space and provide clean, affordable and sustainable power for the entire continent.

As many difficult conversations continue to hold, across the globe, and as Presidents, business leaders and heads of academic institutions and Foundations like Rockefeller continue to make decisions and take decisive steps towards accelerating racial equality, I perceive the world is gradually heeding the opportunity occasioned by the COVID and Floyd incidents, to reset itself. Africa, should not be left behind as the rest of the world resets. If we continue to take the right actions towards achieving justice and shared prosperity for all, I see light at the end of the tunnel for Africa and the rest of the world.

Henrietta Onwuegbuzie, PhD, Lagos Business School, Pan-Atlantic University Head, Entrepreneurship Unit Director, Owner-Manager Programme honwuegbuzie@ lbs.edu.ng

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TikTok defends sale of US arm as investors move behind Microsoft

Chinese group had ‘no choice’ but to comply with demands from US regulators and sell app Henny Sender in Hong Kong and James Fontanella-Khan in New York

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he founder of TikTok has defended a plan to sell the US arm of the viral video app, as his investors threw their support behind a bid for the business by Microsoft.

In a second letter to employees in as many days, Zhang Yiming, the chief executive of ByteDance, the owner of TikTok, said he had “no choice” but to submit to demands from US regulators and the White House to sell the app.

“As a company, we have to abide by local [US] laws, and have no choice,” Mr Zhang wrote. But the forced sale, he added, “was not their purpose — it’s even something they [the US government] didn’t want to see — the real purpose was to completely ban and even more”.

A sale to Microsoft is now seen both by ByteDance and by its investors, which include General Atlantic, KKR, SoftBank and Sequoia China, as the only solution to avoid action by the Committee on Foreign Investment in the US (Cfius) and a complete ban of the app in the US. “This is the only real solution for the Cfius problem,” said one person involved in the talks. “If TikTok is sold to Microsoft, Microsoft will take over the code and certify that the data is secure.”

Two people involved in the talks said the discussions were now rapidly progressing to the

Zhang Yiming: ‘In some countries, such as the US, some politicians are making full attacks on China and Chinese companies, and it has formed a certain atmosphere’ © Bloomberg

terms of the deal.

While Microsoft has said it is open to inviting existing investors to hold a minority stake in TikTok US, most investors are minded not to hold shares in TikTok US but to continue to hold their stakes in ByteDance itself, the people said.

The situation is still fluid, however, and other investors are considering whether they might participate. “At this stage, there is no other choice but Microsoft,” one of these investors said. “But it is too early to say whether this will be a pure deal only between the two sides of ByteDance and

Microsoft.”

President Donald Trump on Monday blessed a deal for TikTok

by Microsoft after some of his supporters on Wall Street urged him to avoid “expropriating” assets from western investors in ByteDance in the name of national security as it would set a negative precedent, two people briefed on the situation said.

Wall Street financiers also have been communicating regularly with the US Treasury to express their support for the government’s action, but to caution that the sale should be carried out in a way that does not create a

blueprint for future asset seizures.

Meanwhile those involved in the deal were digesting a demand by the president on Monday that whoever buys TikTok should pay a “substantial” share of the sale price to the US Treasury.

“The US should get a very large percentage of that price, because we’re making it possible,” said Mr Trump.

Karin Thorburn, a finance professor at the Wharton school of business at the University of Pennsylvania, said such a levy would be very hard to impose given the lack of a legal framework.

“To be legal there has to be

some structure and some law,” said Ms Thorburn. “This is just something that Trump came up with. I actually don’t think you get away with it.”

She also raised the question of who would pay the fee to the US Treasury, as Mr Trump suggested.

“Is it TikTok or is it Microsoft?

And on what basis? Because we don’t have a penalty on making acquisitions,” said Ms Thorburn.

The Trump administration could also try to impose a penalty on TikTok as a means to extract some money from the transaction, said Ms Thorburn, “but not random penalties without legal grounds”.

As part of the negotiations, Microsoft is seeking reassurance from Beijing that there will be no retaliatory measures taken against it in China if the sale goes ahead. One ByteDance investor suggested that Microsoft might consider selling some of its China businesses to ByteDance to placate Chinese nationalists.

On Tuesday, Chinese state media said the US had launched a “smash and grab” raid on TikTok while Wang Wenbin, a spokesman for China’s Ministry of Foreign Affairs, urged the US not to discriminate against foreign businesses.

“If everyone were to follow the US’s practice then anyone can invoke national security to take similar measures against a US company. The US should not open this Pandora’s box otherwise it will swallow the bitter fruit.”

Covid-19 surge slows in US south and west Officials are worried the disease has gained a foothold in other parts of the country Peter Wells and Matthew Rocco in New York

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ew coronavirus cases in US hotspots waned on Monday, although the encouraging signs have not allayed fears that the disease is gaining a foothold in other parts of the country.

Florida — one of the populous US states in the sunbelt region where the virus has surged in recent weeks — reported fewer than 5,000 infections on Monday, the lowest increase since June, and 73 fatalities.

The state had closed some of its testing sites at the weekend as Isaias, the tropical storm, moved up its coast.

Other states in the south and west where the disease had been surging earlier this summer continued to show signs of slowing.

California, which became the first state to register more than 500,000 cases, reported 5,739 infections on Monday, the smallest increase since early July. Texas had 5,839 cases in the past 24 hours.

Some Florida testing sites were shut over the weekend as the state braced itself for a tropical storm © AFP via Getty Images

Arizona registered slightly more than 1,000 cases, the lowest since late June. Georgia counted the least new cases of coronavirus in nearly a month at 2,258.

The US as a whole on Monday reported fewer than 50,000 coronavirus cases for the second day running, with a further 49,562 infections over the prior 24 hours, according to The Covid Tracking Project. Fataliwww.businessday.ng

ties rose by 519, about half the levels seen over the past fortnight.

Cases reported on a Monday tend to be lower than on other days of the week because of delays over the weekend. However, the data point to encouraging signs that steps taken to mitigate the recent wave of infections have started to pay off.

US President Donald Trump welcomed signs of “significant

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progress” on Monday, while urging people in states with a low number of cases to remain vigilant and continue taking precautions to curb its spread.

But experts have warned that as lockdowns start to ease again and Americans begin socialising and travelling, the disease would become more prevalent, potentially sowing the seeds of an increase in states that have not been previously hard hit, including the Midwest.

Deborah Birx, a top member of the White House coronavirus task force, said on CNN’s State of the Union on Sunday that the US was entering a “new phase” of the pandemic. “What we are seeing today is different from March and April. It is extraordinarily widespread . . . it’s more widespread and it’s both rural and urban,” she said.

Her appearance drew a rebuke from Mr Trump, who accused Dr Birx of trying to “hit” the administration in response to criticism from Nancy Pelosi, the Democratic Speaker of the House of Representatives, that she was being too @Businessdayng

optimistic.

White House task force members have pointed to worrying signals that could portend a surge of cases in states including Ohio, Indiana, Kentucky and Tennessee.

Even in the north-east US — which was most heavily affected by the pandemic during its early months, before appearing to wrestle it under control — concerns were growing about a resurgence in the densely populated region.

Latest coronavirus news Follow FT’s live coverage and analysis of the global pandemic and the rapidly evolving economic crisis here.

New Jersey on Monday renewed curbs on indoor gatherings, owing to a rise in new coronavirus cases and the disease’s infection rate in recent weeks.

Governor Phil Murphy on Monday said Covid-19’s rate of transmission in his state was now 1.48, compared with 0.87 a month ago, meaning each new confirmed case of the disease was leading to more than one additional infection.

Wednesday 05 August 2020

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Argentina strikes debt agreement after restructuring breakthrough Buenos Aires will accelerate some debt payments to sweeten deal with foreign creditors Robin Wigglesworth, Benedict Mander and Colby Smith

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rgentina has reached an accord with its biggest creditors on terms for a restructuring of $65bn in foreign bonds, after a breakthrough in talks that had at times looked close to collapse since the country’s ninth debt default in May. In a statement on Tuesday, the government said the agreement “will allow members of the creditor groups and such other holders to support Argentina’s debt restructuring proposal and grant Argentina significant debt relief ”.

If it gains approval from enough investors, the deal means that the country can avoid potentially years of exclusion from capital markets as happened after Argentina’s catastrophic 2001 default. That triggered an acrimonious legal battle with so-called “holdout” bondholders that was not resolved until 2016.

Various bondholder groups have been negotiating with Buenos Aires since the leftist president Alberto Fernández took power in December, initially seeking more extensive debt relief than creditors were willing to countenance.

Various bondholder groups have been negotiating with Buenos Aires since the leftist president Alberto Fernández took power in December © Argentinian Presidency/AFP/Getty

BlackRock, Ashmore, Fidelity and T Rowe Price were among members of the largest group, while hedge funds VR Capital and Monarch Alternative Capital were involved in a separate bloc. GMO was part of the smallest grouping. In order to apply greater pressure on the government, the three groups banded together in July, proposing new terms and penning a joint letter to Martín Guzmán, Argentina’s economy minister, highlighting their united front.

Mr Guzmán quickly rejected the latest proposals from some

of those bondholders, arguing they would “subject Argentine society to more distress, and we are not going to do that”.

He has since agreed to make some debt payments sooner than expected — a concession that has led to a breakthrough.

“People were just exhausted by this,” said one person familiar with the bondholder side.

“People were resigned to the fact that it makes more sense to be done with this and move on.”

In addition to tweaking the clauses of the new bonds that will replace the old defaulted

debt to strengthen creditors’ hands in any future restructuring, “Argentina will adjust certain of the payment dates . . . without increasing the aggregate amount of principal payments or interest payments that Argentina commits to make while enhancing the value of the proposal for the creditor community,” the statement added.

The new terms suggest a recovery value of around 55 cents on the dollar — below the more than 60 cents on the dollar initially requested by

certain creditors but exceeding the approximately 40 cents on the dollar recovery value first offered up by the government, which was advised by Lazard.

“Both sides had to give ground,” said Graham Stock, a senior strategist at BlueBay Asset Management, which was part of the BlackRock group.

“It’s an outcome that the government and bondholders can live with.”

Bondholders will still need to vote on the deal, with a danger that some may still decide to veto the recent agreement and scupper the debt workout.

However, one person familiar with the negotiations suggested that scenario was unlikely. Creditor groups that have signed up to the offer represent around 50-60 per cent of eligible bonds, while Argentina already had support of about 30-35 per cent. That is enough support to change the terms of the bonds over the heads of objections by any holdout investors.

Assuming it is passed, the agreement opens up a new chapter in the debt negotiations. Argentina will now enter talks with the IMF, which has lent the country $44bn since a currency crisis in 2018, seeking to delay debt payments coming due in 2021-23, while avoiding harsh austerity measures.

Silver outpaces other global assets in best month since 1979 Precious metal rallies against backdrop of low interest rates and rising industrial demand Henry Sanderson in London

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34 per cent rally in the price of silver made July one of the best months on record for the precious metal, eclipsing every major global financial asset.

The price rise was the biggest since December 1979, comfortably outstripping gains of about 13 per cent in the Shanghai Composite index and Brazilian stocks, and an 11.5 per cent jump in gold, according to Deutsche Bank. While a handful of individual stocks beat even silver, the metal towers above other commodities and stock indices.

Silver, known as the “poor man’s gold”, has risen in tandem with gold, which touched an intraday peak of $1,984 a troy ounce earlier this week. Silver hit a six-year high of $26 an ounce last week, making it still more than 70 times cheaper than its fellow metal.

The price of silver rose 34% in July, with the metal hitting a six-year high of $26 an ounce last week © Bloomberg

“The pace of buying has been incredible across the silver products, whereas you’d expect that strength in gold,” said Suki Cooper, an analyst at Standard Chartered in New York. “But once investors feel they are priced out of gold they may turn to silver, or they may look at the gold/silver ratio and feel it is undervalued.”

Holdings in silver-backed exwww.businessday.ng

change traded funds had risen to a record 8,445 tonnes this year, Ms Cooper added, almost double the previous record in 2009.

Interest in gold and silver has surged this year, reflecting concerns that the Federal Reserve’s stimulus to tackle the pandemic could stoke inflation, for which precious metals are often thought to provide a

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hedge. With government bonds around the world yielding little to nothing, the allure of gold and silver, which do not pay interest or dividends, is also enhanced.

The price of silver, which is notoriously volatile, lagged gold at the beginning of the year, causing the gold/silver ratio to hit an all-time high of 125 in March. Since then silver has risen more than 100 per cent while gold is up 30 per cent.

Ned Naylor-Leyland, precious metals fund manager at Jupiter Asset Management, said silver could continue to outpace gold, as the ratio was still more than double what it was in 2011, when gold prices last rose above $1,900 a troy ounce.

Silver’s industrial usage in electronics and solar panels is also helping to spur demand, according to Jonathan Butler, an analyst at Mitsubishi.

The pandemic has increased demand for silver, which is used as a catalyst in ethylene @Businessdayng

oxide that is found in plastics for face masks and gloves, Mr Butler said.

“Silver’s performance as a supercharged version of gold can be partly attributed to it having a solid industrial base, unlike gold, and one that stands to benefit . . . in the scary new world of coronavirus,” he said.

Silver last traded at just above $24 an ounce. Analysts at UBS forecast the price will rise to $26 during the next six months as US interest rates are kept low and industrial demand starts to pick up. In addition, silver mine supply had also been disrupted

by Covid-19, the bank said.

But strategists at Morgan Stanley are more cautious on silver’s prospects and said a sustained rise above its current level required stronger industrial demand. While silver was a key component in solar panels, producers were using less of the metal in every solar cell, the bank said.

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POLITICS & POLICY Edo Assembly speaker denies lawmakers’ endorsement of APC guber candidate IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin

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peaker, Edo State House of Assembly, Frank Okiye, Tuesday said no member of the house has endorsed the candidate of the All Progressives Congress (APC), Osagie Ize-Iyamu for the September 19, 2020 governorship election.

Okiye also faulted some members-elect for impersonating the leadership of the legislative arm which was proclaimed by the State Governor on June 17, 2019.

He made the clarification during the People’s Democratic party (PDP) campaign rally for the governorship election at Ward 3 in AkokoEdo Local Government Area of the state.

He said the clarification was in response to sponsored reports that alleged that the Deputy Speaker of the house,

Yekini Idiaye had on Monday led four other legislators, to endorse the candidacy of Osagie Ize-Iyamu of the All Progressives Congress (APC) for the governorship election.

The Speaker, represented at the rally by the House Leader, Nosayaba Okunbor, representing Orhionwmwon constituency 1, who said there was no cause for alarm, added that the House of Assembly was intact.

He however, expressed regret that Emmanuel Agbaje, lawmaker representing Akoko-Edo II Constituency, allegedly followed the path of perfidy by allegedly accepting bribe to do the bidding of a political godfather in the state.

“For those of us in Edo State House of Assembly, comprising 10 members have resolved not to collect money and do the bidding of anyone,” he said.

He lauded the State Gov-

Frank Okiye

ernor, Godwin Obaseki for his efforts in containing the coronavirus (Covid-19) pandemic in the state.

Addressing party faith-

Constitutional change Nigeria’s immediate problem not 2023, says Adebanjo Iniobong Iwok

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yo Adebanjo, elder statesman has described talks about 2023 presidency as diversionary, saying that Nigeria’s immediate priority should be about initiating a process that would lead to constitutional change and amendment of the 1999 constitution.

In recent times, public discourse about the zoning of the 2023 presidency has intensified, while some are agitating for the scrapping of the zoning arrangement, others say it has come to stay.

Last week, Malam Mamman Daura, nephew to President Muhammadu Buhari, had said that competence and not geography should determine the next president of Nigeria in 2023.

He had said that since Nigerians have tried the rotational presidency about thrice already, it would be better to go for the most qualified candidate in 2023 irrespective

of whether he comes from the North or the South.

“This turn-by-turn, it was done once, it was done twice, and it was done thrice, it is better for this country to be one.

It should be for the most competent and not for someone who comes from somewhere,” Daura told the BBC Hausa Service in an interview.

However, reacting in a telephone interview with BusinessDay, Tuesday, Adebanjo said Daura’s comment was a diversion from the immediate problems facing the country, stressing that whether the presidency was rotated or not there cannot be a credible election.

According to him, “We are living in denial. We are deceiving ourselves; the problem now is how to resolve the question of federalism and constitutional crisis. We should go back, or you scrap the country whether rotation of no rotation we would never see credible election under this structure.

“Daura is trying to divert attention; immediate priority

is to keep the country first and you can’t keep the country together by these documents imposed on us by the Northern soldiers”.

He said the constitution of the national conference had become necessary for the country to resolve the myriad of constitutional crises bedevilling it to be able to survive.

The Afenifere leader further warned that the current crop of leaders must find a solution and scrape the military imposed constitution, adding that Nigeria’s founding leaders had given the nation a good constitution which was discarded.

“We should go back to the constitution as given to us by our founders. When the military came they imposed this constitution, we have been asking for a constitutional conference and we are not going to live together under a military constitution.”

“We are running away from the real issue, which is immediate constitutional change; if we are going to live together let us address that,” Adebanjo added.

ful in the locality, the state governor, Godwin Obaseki, who is the Candidate of the People’s Democratic Party (PDP) said his perception

about the people of AkokoEdo has not changed despite ignoble motives of two citizens from the locality who recently breached the trust of their constituents.

“In the past 30 years or more, I am the governor that has supported the people of Akoko-Edo more, even in terms of appointments, according to available records.

“When I came, they said Akoko-Edo had been marginalised. They said Akoko-Edo is one of the most underdeveloped Local Government Area in Edo State. What did I do? I said, I am a man who fears God. When I came, I gave Akoko-Edo Managing Director of Edo State Traffic Management Agency (EDTMA).

“I also made sure that Akoko-Edo person becomes the Deputy Speaker of the House of Assembly. Before now, has Akoko-Edo person ever held such position? No! Have I not done well for you?”

he said.

Obaseki, who however, announced the award contract for the construction of Imogan, Ibilo-Ikiru roads, also added that his administration plan to construct Ibilo-Igarra-Auchi Federal Government road which had been in deplorable condition for years, if re-elected for a second term in office.

Earlier, the Chairman of PDP Campaign Council for Edo Governorship election, Dan Orbih, berated the members-elect for parading themselves as lawmakers having failed to present themselves for inauguration.

Orbih described the purported endorsement of Osagie Ize-Iyamu by the absentee members-elect as “shameful and unlawful”.

He commended the state governor for restoring sanity in the corridors of power in Edo State and for rescuing the state from oppressors.

Ondo 2020: Group urges PDP leaders to rally support for Jegede James Kwen, Abuja

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group, known as Vanguard for Justice and Fairness in PDP (VJF) has called on the National Working Committee (NWC) of the People’s Democratic Party (PDP) and other party leaders to give total support to the governorship candidate of the party in Ondo State, Eyitayo Jegede (SAN) to enable the party emerge victorious in the October 10 governorhip election.

VJF in a statement by its President, Abubakar Abagi expressed concern by the disaffection noticed among high ranking members in the PDP following the victory of Jegede at the primaries over their preferred candidate.

Sequel to the ongoing contention of who becomes Jegede’s running mate, Abagi cautioned the party leaders against doing anything that could ruin its chances of win-

ning the election.

He also called on PDP NWC and other party heavy weights to prevail on the Ondo State Deputy Governor, Agboola Ajayi to work in the overall interest of the party and not defect to the Zenith Labour Party despite his inability to clinch the party’s governorship ticket.

“It has come to our knowledge that some top party leaders are not happy over the victory of Mr. Jegede over Ajayi’s loss at the PDP governorship primaries and are beginning to show tacit support for Ajayi to leave the party and withdrawing their support for Mr. Jegede who clearly won in a transparent process.

“We are fully aware that Mr. Jegede is seen by these unhappy leaders as being a follower of the political ideology championed by the former vice president and PDP candidate in the 2019 presidential election, Atiku Abubakar. However, Mr. Jegede still remains the choice of the people of Ondo

State and the entire PDP followers in the state and that should be respected.

“We can’t to go into the election with a divided house as APC members in the state are on a daily basis uniting and closing ranks while we are busy with antiparty activities that may ruin our chances of kicking Rotimi Akeredolu and his All Progressives Party (APC) out of power and free people of Ondo State from the grip of poor governance”, Abagi said.

He noted that Governor Akeredolu had presented his running mate, Lucky Aiyedatiwa, to one of his erstwhile political antagonists, Bola Tinubu, adding that such development is a pointer to the reality that discord among top PDP stakeholders in the state at this crucial period will cost the party dearly.

“If Akeredolu could unite with Tinubu, I don’t see why the victory of Jegede should be a problem to our leaders.

“Today, because of the mindboggling corruption in our public and political space, incorruptibility has become the top virtue we look for in leadership. But the political school of thought that Fasanmi successfully practised does not even rate incorruptibility as a strong virtue - it is a given.

“For the disciples of this school of thought, the top virtue of a politician is the ability to implement policies that lift millions out of poverty and create an egalitarian society where there is freedom for all to pursue their ambitions and abundance of life’s good things.”

ARG eulogies, celebrate Fasanmi’s unblemished political life Iniobong Iwok

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he Afenifere Renewal Group (ARG) has eulogised and described the late Ayo Fasanmi as a very courageous and unwavering disciple of the Awoism political philosophy.

Fasanmi died last week Wednesday in Osogbo at the age of 94 and was buried Tuesday.

The S econd Republic Senator until his death was factional leader of the Yoruba socio-cultural group, Egbe Afenifere.

In a statement to journalwww.businessday.ng

ists, Tuesday, signed by Kunle Famoriyo, publicity secretary of the group, it noted that Fasanmi stayed true to the welfarist political ideology till the end, while his traits were unique from contemporary politicians ARG further stated that it was consoled that Fasanmi left

a legacy which would inspire the group on its journey.

“It gladdens our heart that Fasanmi stayed true to the welfarist political ideology till the end and has now joined the league of our political ancestors whose life is a catalog of wise counsel,” it said.

According to the statement,

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BUSINESS DAY Wednesday 06 August 2020 www.businessday.ng

Mauricio Alarcon: Betting big on local sourcing to keep Nigerians nourished CALEB OJEWALE

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hen a restriction on provision of foreign exchange for the importation of maize was recently announced by the Central Bank of Nigeria (CBN), many local processors using the commodity saw it as bad news that would put a huge strain on their operations.

For Nestle Nigeria Plc, however, this was going to reveal another reward for its deliberate, strategic investments in local sourcing.

For at least four years now, the company reports it has sourced 100 percent of the maize used in its cereal brands – Cerelac and Golden Morn – through the Nestlé Cereals Plan. Not only maize, but also sorghum and soybeans used in Milo and Maggi respectively.

Nestlé’s commitment to local sourcing of raw materials for its production, has steadily grown over the last eight years, now reaching about 80 percent local sourcing of raw and packaging materials.

Under the leadership of Mauricio Alarcon, CEO, Nestle Nigeria Plc., the company’s commitment to local sourcing of raw materials has not only been sustained but also consolidated to increase local input used in the company’s product range. This on one hand has ensured the company has a guaranteed supply system, while at the same time, empowering thousands of local farmers to remain productive.

This, according to Alarcon is a result of investments made towards increasing local sourcing since 2011. “We remain committed to sustaining and increasing our local sourcing, and so continue to support the growth of the Agribusiness and food value chain which hold so much potential,” he said.

The five major locally sourced products (average volume per annum) are; Corn - 10,000 metric tonnes; Sorghum - 6,500 metric tonnes; Soya Beans - 5,000 metric tonnes; Cassava Starch - 4,000 metric tonnes; Cocoa - 5,000 metric tonnes.

By sourcing over 80 percent of its raw and packaging materials locally, while working towards developing new value chains including dairy, Nestle has been able to provide a steady source of livelihood for over 46,000 smallholder farmers who supply grains to its factories every day.

Nestle, according to Alarcon is committed to expanding its investments in Nigeria, and increasing production capacity at its different facilities. Not just this, but the

Mauricio Alarcon

company has consistently stepped up its impact program, which creates a win-win for communities where it operates, as well as Nestle as a business entity.

Mauricio Alarcon’s rise to the top in Nestle In 21 years since joining Nestle in 1999, Mauricio Alarcon has worked in different roles, continents and countries until he became Managing Director and Chief Executive Officer of Nestlé Nigeria PLC in 2016.

Before his current role, Alarcon was the managing director of Nestlé Cote d’Ivoire from 2014 and in 2016 became the managing director of the Atlantic Cluster comprising Côte d’Ivoire, Sénégal, Guinea, Guinea Bissau, Gambia, Mauritania and Cape Verde.

He joined Nestlé Mexico in 1999 where he held various roles in sales and marketing before his transfer to the Strategic Business Unit in Switzerland as Marketing Advisor.

In 2004, Alarcon became the Marketing Lead for Nestlé’s Movenpick Ice Cream brand and in 2007, he was appointed as Marketing Manager of the Ice Cream Business unit in Australia.

He moved to Egypt in 2010 as Business Executive Manager for Nestlé’s Ice Cream Business in North Africa.

Alarcon He holds a Masters degree in Engineering from the University of Manchester.

D e s c r i b e d a s p a s s i o nat e about developing people and about the environment, Alarcon is a hands-on people leader who believes in working in close proximity with his people to achieve remarkable results. He does not believe in ticking the box and will challenge the status quo to achieve desired results and to make real impact. He sees opportunities and not challenges.

Under his leadership, Nestlé Nigeria successfully navigated the challenges of 2016 into 2017 and has motivated and inspired the team to remain resilient and agile, ensuring business continuity and amid the current challenges.

Building farmer capabilities Called Creating Shared Value (CSV), Nestlé Nigeria says it touches the lives of millions of people, from the farmers who grow its ingredients to the families who enjoy its products, to the communities where the company operates, and the rural environment upon which

it depends.

For Nestle, Alarcon says local sourcing is a long-term goal.

The company has partnered with organisations like IITA, IFDC and USAID to promote sustainable farming practices while increasing yield and quality.

“With our partners, we have worked with farmers, teaching them simple methods for maintaining good agricultural and storage practices, how to manage grain quality and safety. These efforts ensure that we have the right quality of raw materials to attain our local sourcing targets,” he said in a previous interview with BusinessDay. Nestle has continued to expand on its capacity building programs for farmers, reaching over 33,000 farmers in 2019 through direct training in best farming practices, and over 1.6 million others through radio disseminated programs in local languages.

Outcomes include increased productivity; increase in household incomes by over 18 percent; and reduction in factory gate rejection of grains from over 30 percent to below 4 percent all in 18 months, according to information provided by the company.

“Nestlé Nigeria will continue to play its essential role of ensuring the uninterrupted availability of food and beverage products which are critical for the sustenance and well-being of millions of Nigerian families who rely on the company to help feed their families every day,” says Alarcon.

Investing in community, capacity development around Nestle facilities According to Nestle, over 14,000 individuals in over 11 communities around its factories now have access to clean drinking water. The company has renovated classrooms and provided water and toilet facilities in schools around its sites, impacting over 800 schoolchildren, as well as donating learning and teaching materials to over 4000 learners.

In 2019, the company commissioned five new community water projects and refurbished facilities in two additional schools.

In March 2020, Nestle handed over the refurbished facilities at the Makun High School, Sagamu. The project includes a fully equipped library, a creche for nursing teachers and an office for the Librarian.

The renovation of the school library aims at reviving a love for reading among the students amid the growing concern over the perceived decline in reading culture in Nigeria.

In March 2020, the fourth batch of Nestlé Nigeria’s Technical Train-

ing Center in Agbara graduated.

The Technical Training program is described as a key part of the company’s efforts towards ensuring that youth within its communities are future ready. This is why the Abaji Technical Training Centre, TTC was launched in 2018 to reach even more Nigerian youths especially in the northern part of the country. To date over 100 students have successfully completed the program with over 80 percent employed by Nestlé.

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

The program is part of ‘Nestlé Needs YOUth’, a global flagship program launched in 2018 to help 10 million young people worldwide access economic opportunities by 2030.

In Nigeria, Nestlé says it has reached over 12,000 young Nigerians through career fairs, entrepreneurship programs and skills training, equipping them to find decent employment or profitable entrepreneurship.

Supporting National response efforts to COVID-19 Nestlé contributed over N700 million to support the COVID-19 response efforts in Nigeria. This donation included nutritious food and beverage products worth N450 million to reach more than 600,000 vulnerable people, most impacted by the crisis. The company also donated N250 million in cash for the procurement of medical supplies and personal protective equipment for the COVID-19 response.

The company supported the COVID-19 response efforts led by the Presidential Task force, working alongside other private sector partners in the Coalition Against COVID-19 (CACOVID) to supply food and beverages to Lagos, Ogun, Ekiti, Ondo, Enugu, Rivers, Kano and Kaduna States and Abaji Community, FCT. It also donated 13,000 units of N95 Masks to the Lagos State Ministry of Health to help ensure the safety of health workers and volunteers on the frontlines.

“We are joining forces with government to do everything we can to help those in need through both financial means and product donations in these unprecedented times where our communities need our support more than ever,” Alarcon says.

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