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news you can trust I ** tuesDAY 07 april 2020 I vol. 19, no 536

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Fitch downgrade worsens Nigeria’s dollar-debt prospects …shifts attention to multilateral lenders OLUFIKAYO OWOEYE & BUNMI BAILEY

L-R: Rauf Aregbesola, minister of interior; Geoffrey Onyeama, minister of foreign affairs; Sadiya Umar-Farouk, minister of humanitarian affairs, disaster management and social development; Edward Kallon, United Nations Humanitarian Coordinator in Nigeria; Boss Mustapha, secretary to the government of the federation; Lai Mohammed, minister of information and culture; Osagie Ehanire, minister of health; Sani Aliyu, national coordinator, Presidential Task Force on COVID-19, and others, at the inauguration of the Joint Nigeria-United Nations System Initiative to Support Covid-19 Response, in Abuja, yesterday. NAN

Nigeria plans $6.9bn war chest to fight Covid-19 as FAAC allocations slump Onyinye Nwachukwu (Abuja) & SEGUN ADAMS (Lagos)

he Federal Government is in the process of amassing a $6.9 billion war chest to combat the impact of the coronavirus on the Nigerian economy and healthcare sector. This is coming at a time Federal

Funds to come from IMF, World Bank, AfDB, SWF Provides N102.5bn direct intervention in health sector

Accounts Allocation Committee (FAAC) disbursements to the three tiers of government have fallen to the lowest level so far

in 2020. Nigeria does not intend to negotiate any formal loan programme with the International

Monetary Fund (IMF), but has formally asked the fund to release all its existing holdings, Continues on page 31

igeria’s hope of raising dollar-denominated cash in the Eurobond market to finance its deficit may have finally hit the rocks as rating agency, Fitch, downgraded the country’s long-term foreign currency issuer default rating (IDR) to ‘B’ from ‘B+’ with a negative outlook, citing external and fiscal pressures. The new rating by Fitch is at par with Moody’s rating at B2 and one notch above S&P rating at ‘B-’. Credit rating is used by sovereign wealth funds, pension funds and other investors to gauge the creditworthiness of entities. These ratings can impact borrowing costs as a lower rating would mean a higher cost of borrowing for issuers. A ‘B’ rating for long-term Continues on page 31

Inside 45% of new Covid-19 infections in Lagos now community transmission P. 3 Covid-19 and the Nigerian nation An overview of the ongoing pandemic, the local response, and prospects for the future P. 18-19

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with Innoson, other NNPC says no more petrol subsidy FGautosaysfirmsin talks on ventilator manufacturing

…but remains silent on full deregulation MICHAeL ANI & DIPO OLADEHINDE

igerian National Petroleum Corporation (NNPC) said on Monday it would no longer cap the price at which fuel is sold in the country in the form of subsidy payment or under-recovery cost. In a tweet via its official handle on Monday, the stateowned oil company quoted Mele Kyari, its group managing director, as saying, “As at today, subsidy/underrecovery is ZERO. Going forward, there’ll be no resort to either subsidy or underrecovery of any nature.” NNPC said rather than determining the prices at which the commodity is sold in the domestic market, it will

“just be another player in the market space”. “But we’ll be there for the country to sustain security of supply, at the cost of the market,” it said quoting Kyari. For the second time in two weeks, the Federal Government reviewed the petrol price downward to sell at N123.5 per litre effective April 1, 2020. On the current developments in the international market, the NNPC GMD said the key issue in crude oil business is market fundamentals of demand/supply. “I believeCOVID-19 will subside and countries will come back to life. I don’t see oil price going below the $20 we saw last week. I’m certain, all things being equal, oil price will bounce back,” he said. If oil prices maintain the

upward movement, having risen to $34.11 at the weekend, and going by moves by Organisation of Petroleum Exporting Countries (OPEC) and allies to agree on a deal, the relief on the pump price of petrol might be a short one, as government might have to revert to the pre-existing template of N145 per litre. “My interpretation is that the NNPC will regularly set pump prices for fuels at regular intervals at levels to ensure that they do not make profit or reflect all their cost,” Johnson Chukwu, MD/CEO Cowry Asset Management Limited, said. Chukwu said the free market does not entail fixing prices. Once prices are fixed by government, then you shouldn’t be talking about free market.

Some stakeholders have raised concerns about the sustainability of monthly pricing template, considering that marketers stock products to meet demand and uncertainty in price affects the margins of the business. “Setting the price is wrong. Government needs to take their hands off. The laws of demand and supply should reflect in the pump prices,” Wumi Iledare, professor of economics and former president, Nigerian Association for Energy Economics (NAEE), said. Iledare noted that government must take advantage of the current development to liberalise or restructure the market to readjust itself going forward in proportion to changes in crude oil prices and exchange rates.

Mele Kyari (l), group managing director, Nigeria National Petroleum Corporation (NNPC); Boss Mustapha (2nd l), secretary to the government of the federation; Timipre Sylva (r), minister of state for petroleum resources, and others, briefing newsmen during the inspection of NNPC facility under reconstruction at Utako, designated in preparation for the treatment of coronavirus in Abuja.

he Federal Government has confirmed that it is in discussion with Innoson and two other automotive firms who had expressed desire to manufacture the muchneeded ventilators to fight the coronavirus pandemic. Niyi Adebayo, minister of industry, trade and investment, who disclosed this to journalists in Abuja on Monday, said Innoson had specifically sent in a proposal seeking government’s support to manufacture ventilator and expressed Federal Government’s willingness to effect the partnership. Adebayo also noted that the Federal Government, in partnership with the Manufacturers Association of Nigeria, is ramping up local manufacturing of food and pharmaceuticals needed to curb coronavirus, saying the manufacturers are efficiently closing the gap of what is required. “As you know, world over the coronavirus pandemic has exposed the world to health

SEGUN ADAMS

… mild cases to be moved to Onikan as centre opens today … state discharges 2 more patients ommunity transmission is fast emerging the fastest way of transmitting the coronavirus disease, accounting for 45 percent of new infections in Lagos currently, Akin Abayomi, Lagos State commissioner for health, said on Monday. Abayomi said imported casesaredecreasingascasesinvolving those who have returned from abroad are now 54 percent of infections. He warned, however, that with the closure of international airports, imported cases could come through the land borders and vessels. Giving an update on COVID-19 in Lagos, Abayomi said the state has tested a lot

HARRISON EDEH, Abuja

and economic crisis and countries are shutting down their borders. We’ve thrown that challenge to our manufacturers and they are responding accordingly,” Adebayo said. He also informed that a secretariat known as “Emergency Operation Centre” has been opened at the Federal Ministry of Industry, Trade and Investment to sort out concerns of any manufacturer who encounters challenges in the event of conveying his food or pharmaceutical products from one point in the country to the other. He further applauded the inspector general of police and the comptroller general of Customs who have partnered the ministry in ensuring hitchfree movement of food and pharmaceuticals across the country by the manufacturers. In his remarks, Mansur Ahmed,president,Manufacturers Association of Nigeria, said thepartnershipwiththeFederal Government has been effective in closing gaps in key essential food and pharmaceutical products needed to curb the spread of the coronavirus pandemic.

Dangote Cement woos investors with N100bn issue

45% of new Covid-19 infections in Lagos now community transmission JOSHUA BASSEY, ISAAC ANYAOGU & ANTHONIA OBOKOH

…MAN ramping up production of food, pharmaceuticals to curb Covid-19 spread

of people from Eti-Osa Local Government Area and that the area was recording high cases of community spread, necessitating more monitoring activities in the surrounding areas. Earlier, the state listed Etiosa, Ikeja, Alimosho, Kosofe and Oshodi/Isolo LGAs as high target areas where suspected cases could emerge, but Abayomi said the state was becoming more concerned with Alimosho. “We have seen an increase from one to four in Alimosho,” he said. “We have 87 active cases. 31 have been discharged. And we have two deaths,” he said, adding that most of the cases are between the ages of 20 and 60 years and that most of them are male. www.businessday.ng

He said some contacts were not reachable. Babajide Sanwo-Olu, the state governor, also announced on Monday that two more patients have been discharged from Infectious Disease Hospital at Yaba. Sanwo-Olu, through his twitter handle on Monday, said the recovered patients are females who have tested negative for the virus twice. Speaking further during the Covid-19 update, the health commissioner announced that mild cases of the Covid-19 pandemic would be moved to the newly completed isolation centre at Mobolaji Johnson Arena (formerly Onikan Stadium). The 100-bed facility erected by the state government

and Guarantee Trust Bank (GtB) would be officially opened today (Tuesday). Abayomi said the decision to move patients with mild symptoms to the Onikan centre was to allow health experts at the Infectious Disease Hospital, Yaba, concentrate more on patients with severe cases. He said the Onikan isolation centre was ready, having been fully equipped and a trained medical team now deployed to receive and treat patients with mild cases. The centre is the first such facility to be erected in Lagos since the state recorded its index case in February. It is to complement the Infectious Disease Hospital, Yaba, an existing facility before the outbreak of the Covid-19 pandemic.

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angote Cement plc, Africa’s leading cement manufacturer, is seeking to raise up to N100 billion in fresh funds from the bond market under its NGN300 billion Debt Issuance Programme. According to the investor presentation document prepared by the company and themed ‘Building Prosperity in Africa’, the funds from the debut offering in the bond markets are to be utilised to refinance existing shortterm debt previously applied towards cement expansion projects, working capital and general corporate purposes. The bond (medium-term debt paper) Dangote Cement is issuing for the first time signifies confidence in business growth and in the Nigerian economy’s long-term growth. Dangote Cement plc is a good offer for discerning institutional investors and high net-worth individuals, analysts say. It is Nigeria’s largest company by market capitalisation on the Nigerian Stock Exchange (NSE), the largest cement manufacturer in sub-Saharan Africa with an installed capacity of 45.6Mta across its operations in 10 African countries, and operates @Businessdayng

a fully integrated “quarry-tocustomer” business in seven of its operations with activities covering manufacturing, sales and distribution of cement. The company, which is Premium Board-listed on the NSE, has a strong corporate governance framework supported by five independent directors while its shareholding base is diversified. Dangote Cement posted an excellent financial performance in 2019 with EBITDA margins of 44.3 percent. It was rated ‘Strong financial profile including low leverage and significant operational scale’ (GCR AA+(Ng) (Jan 20) Moody’s Aa2.ng (Mar 20). The company has a strong track record in the debt capital markets, having registered a NGN150 billion Commercial Paper programme in 2018, and issued an aggregate amount of NGN300 billion in Commercial Paper since programme establishment. It also has a track record in Nigeria’s Debt Capital Markets as it raised an aggregate issuance of N100bn under the Commercial Paper Programme in 2018, and in 2019 raised an aggregate issuance of N200bn under the Commercial Paper Programme. These Commercial Papers were systematically oversubscribed.

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Shipping firms opening up direct service lines to cushion effects of port congestion AMAKA ANAGOR-EWUZIE

ollowing the delays associated with long waiting times in congested ports in Lagos, shipping liners have started adjusting their service lines by introducing direct services to other ports, particularly the congestion-free ports to cushion effects on customers. Prior to the new initiative, major shipping lines that call Nigerian ports usually had service lines that require them to first discharge in Lagos before sailing to other ports in the Southern part of the country. But with direct service lines, importers using congestion-free ports would begin to receive their cargoes earlier without having to wait for ships that must first call congested ports in Lagos

that have over 20 and 30 waiting days. Maersk Line, Safmarine and the German shipping carrier, Hapag-Lloyd, are among three major shipping lines that recently adjusted their services, according to BusinessDay checks. Maersk and Safmarine stated in the Customer Advisory Note issued separately that they have made adjustments to various services across their Far East to West Africa network due to challenges facing operations at the ports in Lagos. With that, Maersk would be running three service lines including the FEW1 that will serve Cotonou, Abidjan, TinCan and Lome; FEW2 to serve Walvis Bay, Apapa, Tema, Apapa and Pointe Noire, and FEW3 to serve Tema, Lome, Cotonou, Onne and Walvis Bay.

“Currently, we are experiencing severe delays in Lagos due to highly utilised terminal yards, crane breakdowns and long trucking queues. The changes to our service rotation was to ensure we can continue to call at all West African ports while ensuring we limit the impact of the delays on your (customers) cargo,” said Maersk. Safmarine, in its own Customer Advisory, also said its service rotations within West Africa before returning to the Far East include FEW1 serving Cotonou, Abidjan, TinCan and Lome; FEW2 serving Walvis Bay, Apapa, Tema, Apapa and Pointe Noire; and FEW3 serving Tema, Lome, Cotonou, Onne and Walvis Bay. Currently, oceangoing vessels calling Nigerian ports have continued to suffer extraordinary delays as waiting

times at APM Terminals’ Apapa and Bollore Ports’ TinCan Island Container Terminal (TICT) continue to exceed 30 and 20 days, respectively. According to Container News, an online portal for shipping, freight and port news, the delay associated with the long waiting time has forced the liner to put additional two ships to its MWX service in order to reduce the negative effects on its customers. Now, HapagLloyd is deploying a total of seven container vessels to the region. BusinessDay checks showed that beyond APM Terminals and TICT that are largely affected by terminal congestion, Hapag Lloyd has opened another service line that enabled it make maiden call to Ports & Cargo Handling Services Limited, in Tin-Can Island Port, recently.

Brent crude could plunge to ‘single-digit lows’ - Fitch … Nigeria may produce below unit cost Olusola Bello

he prospect that the price of crude oil will firm up very soon is becoming remote amid fears that Russia may still not agree to production cut when the producers meet this Thursday. According to Fitch report, it is feared that Brent crude, equivalent of Nigeria’s Bonny Light, could plunge to ‘singledigit lows’ if OPEC+ can’t agree on output cuts. This would be very inimical to Nigerian economy that solely depends on crude oil to grow, according to Adedeji Adeniran of Centre for The Study of the If the price of Brent comes to a single digit it would mean that Nigeria cannot produce, Adeniran says, stating that the country would be producing below its unit cost. The unit cost of a barrel of crude oil in Nigeria is about $30 for deep-water production while it is between $17 and $20 per barrels offshore. The country has already reviewed her 2020 budget because of the way the price of the commodity was falling. The budget was reviewed from $57 benchmark to $30 per barrel. Even though the price has moved to $33 per barrel this was after it had slumped to about $23 per barrels last week. He, however, states that postponing the meeting till Thursday may mean that OPEC+ members want to resolve the grey areas so that

when they meet it would just be a formality. The current drop in oil prices is hitting the country hard, making a big dent on government revenues and threatening the viability of upstream projects. Experts are however of the view that even if the country decides to produce at will it may not be able to produce beyond 2.3mbpd giving the fact that the country has been too lackadaisical about exploration activities. To achieve this may take a few years. They also say even at this volume of production Nigeria would have to sell it commodity at a highly discounted rate to be able to create market for it, and the revenue from it may not make so much impact on the economy. According to Petroleum Economist, the country is bracing up to take a big hit from the collapse in oil prices resulting from the end of the OPEC+ agreement and the Covid-19 pandemic. It is particularly vulnerable as it has yet to fully recover from the previous crash in 2014. According to CNBC that reported Fitch position on the current situation in respect of the global crude oil price war between Saudi Arabia and Russia, the report says Brent crude futures could plunge to “single-digit lows” if major oil producers fail to reach a deal to cut output at a time when the demand has collapsed due to the coronavirus pandemic, Fitch Solutions states in a report.

Increased insecurity on the back of massive job loss possibility L-R: Taiwo Adisa, chief press secretary to Oyo State Governor; Ojekunle Ojemuyiwa, commissioner for agriculture, Oyo State; Supo Ayokunle, president, Nigeria Baptist Convention (NBC); Titi Eniola, director of social ministry, and Debo Akande, special adviser to the governor on agriculture, during the presentation of food items by NBC to Oyo State governNAN ment, in Ibadan, yesterday.

OPEC+: Sylva says FG willing to take position that conforms to its economic forecasts HARRISON EDEH, Abuja

he Federal Government has expressed its readiness to take a position that tally with its economic forecasts at the Thursday meeting of the Organisation of Petroleum Exporting Countries’ strategic partners, OPEC+ meeting, stating that its position will conform to its short- and long-term economic forecasts. Timipre Sylva, minister for state for petroleum resources, gave this information in a statement on Monday, adding that the Federal Government would continue to monitor the impact of the coronavirus pandemic on the economy while also taking necessary steps. Sylva in the statement said, “In our consultations with global industry stakeholders in the lead up to the OPEC+ meeting scheduled for Thursday, April 09, 2020, the Nigerian Government will take a position that is in the best interest of our short term and

long-term economic forecast. “It is well known that Nigeria has always collaborated with key OPEC members such as Saudi Arabia in maintaining a balanced position that has helped to make OPEC one of the most successful global institutions in recent history.” Nigeria intends to maintain this team spirit even as it takes into account the position of OPEC strategic allies such as Russia, he said. “As always, the driving force of our OPEC policy is first the stability of our national economy as well as the stability of the global economy, which is heavily dependent on OPEC and its strategic partners, popularly referred to as OPEC+. “Nigeria, like the rest of the world, has been hit by the Global Pandemic, COVID-19, and is prepared to join the rest of the world in making the necessary sacrifices needed to stabilise the crude oil market; and to prevent what is likely to be a major global economic meltdown,” the minister said. www.businessday.ng

Abia University develops live Coronavirus risk map, GPRS tracking device KELECHI EWUZIE

etermined to contribute to the fight against Coronavirus, Abia State University, Uturu, Centre for Epidemiology and Climate Research, has developed Live Covid-19 Risk Map and a Geographical Tracking Device for Abia State, a South Eastern state in Nigeria. The devices, the institution disclosed, will assist in monitoring the movement of Coronavirus in the state in particular and Nigeria in general, adding that the devices will assist planners in checking any impending threat by the disease going forward. These scientific breakthroughs were achieved under the Centre for Epidemiology and Climate Research of ABSU led by Felix Ike, head of department, Geography and Planning. In a statement by Acho Elendu, deputy registrar, public relations and protocol, Abia State University, Uturu, says this scientific breakthrough will also assist in tracking real-

time surveillance of emerging Public Health threats by COVID-19 in Abia State and Nigeria. The statement says it also offers near-real-time Geolocated updates from these sources to better understand the progression of the Pandemic. Elendu notes that the feat is yet another monumental achievement of the inspirational and excellence-driven administration of Uche Ikonne, the vice-chancellor. According to the statement, “The statement these feats were also made possible by the “capacity building and quality leadership of the Governor and Visitor to the University, Okezie Victor Ikpeazu, who had challenged the University to make industry of her research activities”. It will be recalled this development comes on the heels of the production of ‘ABSU hand sanitizers and nose masks’ in commercial quantity that meets the World Health Organisation (WHO), and International Standards.

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… as Covid-19 hits harder on Nigeria Gbemi Faminu & DAVID IBIDAPO

ariam Osayi, a shop owner in the famous I l e - Ep o G e n e ra l Market, sells frozen foods, raw rice, oil and garri. Last Friday morning, she counted her losses as hoodlums barged into her shop in their numbers and carted away goods worth over N50,000. Similarly, a Lagosian simply identified as Mr Femi was stabbed on his way from work Thursday night while his attackers made away with his phones and cash. While Nigeria is faced with economic and health crisis amid the outbreak of Covid-19, the biggest economy in Africa will also have to deal with increased cases of criminal activities, law offenders and other social atrocities, etc., hiking its security challenges. This may result from possible massive job loss stemming from effect of the ongoing pandemic across the globe. In March 2020, the International Labour Organisation (ILO) projected that the virus could claim up to 24.7 million jobs, which will force a rise in the unemployment scale. Similarly, the African Union (AU) in a recent report @Businessdayng

projected that no less than 20 million jobs were at risk in Africa due to the impact of the coronavirus pandemic. This is a further headache for the Nigerian Federal Government that has battled over the years with high unemployment rate. According to the National Bureau of Statistics, Nigeria unemployment rate stood at 23 percent in 2019. Analysts fear that this is not close to the reality and may rise faster due to the pandemic. In a bid to reduce the widespread of the virus, authorities of various countries have been forced to take drastic measures that include reduced human interaction, restricted and regulated movement, suspension of commercial actions, general lockdowns and other restrictions, which has slowed or brought to a halt business activities and making some economies prone to a recession. With companies being forced to reduce and, in some cases, suspend business operations, possibilities of salary cuts and worst-case scenario, layoff are inevitable. SMEs engaged in trading activities and manufacturing are also threatened as some may have to pack up.

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news Covid-19: Why it is good time to invest in property CHUKA UROKO

ith coronavirus pandemic ravaging the world economy, everybody is pre-occupied with survival, leading to a slowdown in economy and economic activities, including products demand and supply. Therefore, for those who have disposable income, analysts say this is good time to invest in property and their reason is that everyone is playing safe now and it is actually the time for ‘big boys’ to come out to play, pick up the best deals and create wealth for themselves. “Every investor in every asset class knows that real gains are made when the market is sluggish, when the ‘average, and mostly over-cautious investor’ is holding back invest-

ment decisions,” Udo Okonjo, CEO, Fine & Country West Africa International, confirmed to BusinessDay. Okonjo noted that most serious investors know the present situation, especially as it affects the property market, is the best time to pick up bargains in all real estate categories, particularly prime residential real estate in Ikoyi, Victoria Island and other locations. The property market in Nigeria had barely recovered from a prolonged recession. The slowdown in the market has been made worse by the rampaging coronavirus which has virtually wiped out market transactions due to restrictive policies put in place by government, especially the social distancing rule. Most of the investors in this market are edgy and are

asking a lot of questions. As an investor, Olawale Ayilara, the CEO of Landwey Investment, is concerned about what would be the state of the economy after the pandemic and how that will affect real estate business. Though Ayilara sees transaction still taking place through the use of technology, he admits that the present situation will lead to price fall. “Yes, there will be a change in pricing, which will be as a result of inflation, as the economy struggles to recover from the losses,” he affirms. Okonjo noted that there are many motivated sellers and investors in the market at a time like this, advising that a wise investor should “look for motivated sellers in the current market who want to move their property stock because of highinterest rates and slow sales.

Nigeria, Angola could lose $65bn in income as 20m jobs threatened in Africa Olusola Bello with agency report

igeria and Angola, sub-Saharan Africa’s biggest oil producers, alone could lose $65 billion in income as about 20 million jobs are at risk in Africa. This is as the continent’s economies are projected to shrink this year due to the impact of the coronavirus pandemic, according to an African Union (AU) study. African oil exporters are expected to see their budget deficits double this year while their economies shrink 3 percent on average, according to the report. In Nigeria, skeletal activities are being carried in all the oil fields because of the pandemic. The current drop in oil prices is hitting the country hard, making a

big dent on government revenues and threatening the viability of upstream projects. According to Petroleum Economist, the country is bracing up to take a big hit from the collapse in oil prices resulting from the end of the OPEC+ agreement and the Covid-19 pandemic. It is particularly vulnerable as it has yet to fully recover from the previous crash in 2014. So far, Africa accounts for just a fraction of total cases of the disease that has infected more than one million people worldwide, according to a Reuters tally. But African economies are already facing an impending global economic downturn, plummeting oil and commodity prices and an imploding tourism sector. Before the onset of the pandemic, continent-wide gross domestic product

(GDP) growth had been projected by the African Development Bank (AfDB) to reach 3.4 percent this year. However, in both scenarios modelled by the AU study - seen by Reuters and entitled “Impact of the coronavirus on the Africa economy” - GDP will now shrink. Under what the AU researchers deemed their realistic scenario, Africa’s economy will shrink 0.8 percent while the pessimistic scenario says there would be a 1.1 percent dip. Up to 15 percent for foreign direct investment could disappear. The impact on employment will be dramatic. “Nearly 20 million jobs, both in the formal and informal sectors, are threatened with destruction on the continent if the situation continues,” the analysis states.

Radiation from 5G is not different from that of 2G, 3G, 4G – NCC Jumoke Akiyode-Lawanson

igerian Communication Commission (NCC), regulator of all telecoms services in Nigeria, has explained that the radiation from 5G, when launched in the future, is the same as that of 2G, 3G and 4G that is already in commercial use. They all belong to the same class of non-ionising radiation. The NCC says there is no correlation between 5G technology and Covid-19, as 5G is advancement on today’s 4G technology designed to transform the world positively. Clearing the doubts of citizens, created by recent online reports suggesting that the new technology is hazardous to human health and may be related to the spread of the novel coronavirus, NCC says although 5G has not been commercially launched in Nigeria, there are radiation emission limits set by the International Commission for Non-ionising Radiation Protection (ICNIRP) below

which the radiation is considered safe for humans and that NCC has been regularly conducting measurements of radiation emission from base stations across the country and they are all well below the set limits, which means they are safe for humans. According to the NCC, there are other sources of radiation that include television stations, radio broadcasts stations, WiFi and so on. They all belong to the class of radiation considered to be safe for humans when operated below the set limits. In a press statement signed by Henry Nkemadu, director, public affairs, NCC, the commission explains that the videos making the rounds on social media, showing people laying fibre wires has come as a result of necessity for more data and telecommunication services. Fibre cable is a terrestrial technology for broadband that existed for decades while 5G is a new mobile technology for enhanced quality of service. www.businessday.ng

“As a result of the lockdown, the amount of voice and data usage has increased by huge amounts and there is need to expand the network to provide optimum quality of service to users sitting at home. Telecom is also critical for information dissemination during the lockdown,” it says. The NCC back in November 2019 approved trial test for 5G by MTN Nigeria for a period of three months and that the trial had been concluded and installation decommissioned. The trial among others was to study and observe any health or security challenges the 5G network might present. Relevant stakeholders including members of the security agencies were invited to participate during the trial. The NCC says it will continue to maintain its policy of technology neutrality and will continue to encourage service providers to deploy the best technology that will meet the needs of the society in a secured and friendly manner. https://www.facebook.com/businessdayng

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COVID-19 era: Not a time for lamentation

STRATEGY & POLICY

MA JOHNSON

s the COVID-19 pandemic spreads fiercely across the world, the overwhelming impact is having negative effects on individuals, friends, and communities. Tracking the number of confirmed cases as at 2 April 2020, the virus has affected 203 countries, 946,875 cases and 48,135 deaths, while 202,888 have recovered, according to the World Health Organization (WHO). There is grief, sorrow and tears and exile across the world. Some religious adherents think the Creator has forgotten them. No! He is a faithful Father and it is by His grace we are alive and not consumed by this monstrous virus. This era shall come to pass by His grace. But we must play our parts as individuals, communities and governments by obeying the stay-at-home order. Although, some medical experts say that the COVID-19 era may continue for a long time, what we are witnessing in the most immediate sense is a human rights crisis. It reminds one about our common humanity and that we are all equal in dignity and human rights. Today, human rights are central to the challenge we face irrespective of religion, race and political party affiliation. At the heart of human rights are both a protection from the power of the state, and a demand that our governments must protect our lives and wellbeing using reasonable level of state resources at their disposal. So, all nations are out there adopting different strategies based on their capabilities to combat the deadly virus. When one looks at the way coronavirus has dealt with

humanity; how governments and people have reacted to the threat posed by this common enemy globally; this writer is tempted to ask: Where lies the burden? Does the burden to combat the virus lie with governments or individuals? Frankly, I will say that the burden to combat this common enemy called COVID-19 lies with all Nigerians and the entire world. You do not have to be in government to be an active “warrior” in the fight against COVID-19. The government anywhere in the world cannot do it alone. We have seen the organised private sector and a few high net-worth individuals in the corporate world donating generously towards the efforts of the governments. The welfare package must therefore get to every Nigerian especially those who are poor. We have seen how developed societies whose citizens are disciplined, educated and organised fail woefully in the fight against COVID-19. We know our own sectoral challenges in the country, starting with poor infrastructure, poor health and education facilities, manpower shortages, weak industrial linkages, poorly funded R&D institutions, poorly implemented constituency projects, corruption, etcetera. The problems are many. But if the battle against COVID-19 is to be won, we should proffer suggested solutions to combat and defeat the virus, and not lament. This is not a time to look at the past. We need to be in the moment and map out strategies to mitigate further spread of the pandemic ravaging humanity. COVID-19 is potent and lethal. Seats of government with sophisticated security gadgets worldwide have been penetrated by coronavirus. The virus is globetrotting and some of us are busy demanding our rights. Yes, we have a right to live and be protected. But this is not the time to argue or lament about what we do not have as a people. This is time for action. The preventive measures to combat the disease by the World Health Organization (WHO) is that we should stay at home; wash our hands with soap and water; avoid shaking of hands; avoid sneezing into the air but our elbows; and maintain social distancing between ourselves. The above stated prescription by WHO is global and to the best of my judgment not difficult to achieve.

What should be our coordinating strategy? Those charged by states and federal governments with the responsibility of distributing welfare packages to almost 100 million people across the country must be honest, transparent and held accountable. The good news is that the federal government and a few state governments are taking care of the vulnerable people in our midst by providing cash and food items to them. One must commend the efforts of the Lagos State Government and the Director General, National Centre for Disease Control. High density areas and slums in the country are of serious concern. Social distancing may be difficult to maintain in these areas. Some of our local markets are very dirty like a pigsty. Local governments must supervise the renovation and fumigation of these markets across Nigeria. Contact tracing and testing in line with WHO protocols must be rigidly followed. Communication is vital in the fight against COVID-19. Those in authority in all 774 local governments must take relevant information on the coronavirus to rural areas of our country where people do not believe there is any pandemic. Their ignorance is acknowledged, but they should still be properly educated about the virus, the lethality, and steps to be taken to prevent an attack by the virus as prescribed by WHO. We know that people living with poverty and homelessness will find it difficult to access preventive measures. A shortage of care serviceschildcare, healthcare and elderly care will have a disproportionate impact on women and children particularly those who are displaced for years due to internal crises within our country. These are the most vulnerable in our midst and they must be protected? It is pertinent to say that parochial sentiments such as tribe, religion and political affiliation should not be consideration for those who are vulnerable to benefit from the state and federal governments’ intervention programs. This is because as the pandemic intensifies, the risks associated with measures put in place affect many vulnerable people and the general public. One of such measures is the stay-at-home order. Some of our people are becoming recalcitrant because they must work

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Frankly, I will say that the burden to combat this common enemy called COVID-19 lies with all Nigerians and the entire world. You do not have to be in government to be an active “warrior” in the fight against COVID-19

daily to eke a living. We should focus more on food and drug security. So, it is vital that the impact of government interventions be assessed and mitigated continuously to ensure individual and public health. Better health through collaborative efforts The unity of 200 million Nigerians is key in order to fight a common enemy. Information sharing among medics across the country on the virus is key. In the midst of fear and ignorance, communities must come together to support one another, through individual and collective acts of kindness, whether looking out for elderly neighbours or mass applause to demonstrate appreciation to our health workers who are operating within the first layer of defence against the virus. These medical “warriors” are facing increasing risks to their lives daily. So, our medics must be provided with the required personal protective equipment (PPE). This is the responsibility of governments at local, state and federal levels. There must be insurance cover for all our medics as a way of incentivising them. What is the exit strategy after lockdown? In order to save cost, state governments must begin to map out common exit strategies for the future. Both federal and state governments must give relief packages and support for businesses particularly those that have been paying their taxes. There are significant questions to be answered and gaps to be filled by those in authority now. We know that Nigerians are in most parts of the world. The restrictions put in place will not be in place for ever. When the borders are opened, what is the contingency plan of the federal and state governments in case there is a second wave of the virus? Those in authority must start scanning our immediate and remote environment for ways and means to prevent and fight the virus should there be a second wave. As we await the vaccine that will cure the coronavirus, all Nigerians, particularly those in authority in 36 states of the country including the Federal Capital Territory, must not adopt the graveyard strategy- “sit down look”- during the COVID-19 era. Thank you! Johnson is an author and a retired naval engineer who has passion for African development and good governance

Taking care of the small holder farmers, during the Coronavirus disease 2019 (COVID-19)

lot of Nigerian Citizens, have being donating and given a lot of money and offering a lot of powerfully, emerging prayers, couple with the different types of fasting e.g. Dry and White fast, against the deadly Coronavirus Disease 2019 (COVID-19). It is high time that the present Government begin to plans and to use the money in land development, cultivation, providing Agricultural Transportation and palliative measures and distribute some of the money to small holder farmers in the country. Use it

to build more hospitals and equipped, it with new drugs and the development and supply of farming equipment in most of the rural farming communities, distribution of the farming inputs, providing the farmers with Cash and Kind. Teaching them the simple Technology of preservation, Farm Management and food processing, also using the money in the establishment of farming settlement. Training of the farmers in the new emerging technology of farming and livestock cultivation, building of more barns and silos www.businessday.ng

for storage purposes, helping in the development of all processing centers, that will boost production and encourage mechanization and given them money to cultivate more land and use it in the provision of health facilities, building of Infrastructures, roads and schools in the farming communities. Finally, it is very pertinent to guide them and share information, materials and proactive Extension Services messages , about the Negative spread of the Coronavirus Disease 2019 (COVID-19). What to do and how to prevent, mitigate, how it will not affect the

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Michael Adedotun Oke farming communities, change the pattern of cultivation, producing and marketing of Agricultural Produces, even how to stop it, so that it will not affect them and their household in the land of the living. Because of their important of the small holders farmers in Food Production, Security of the land and generally in Agricultural practices and Economy development.

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BUSINESS DAY

Tuesday 07 April 2020

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The power of narratives Rafiq Raji

n his 2019 book “Narrative Economics: How stories go viral & drive major economic events”, Nobel laureate Robert Shiller highlights the two elements of what he means by narrative economics viz. “(1) the word-of-mouth contagion of ideas in the form of stories and (2) the efforts that people make to generate new contagious stories or to make stories more contagious.” Put another way, narrative economics is the study of “how narrative contagion affects economic events.” Public beliefs affect major economic events. Economists are however reluctant to incorporate narratives in their studies because they are difficult to measure, sources can be hard to trace robustly, and so on. Shiller’s argument is that “economists can best advance their science by developing and incorporating into it the art of narrative economics.” “Narrative economics, the study of the viral spread of popular narratives that affect economic behaviour, can improve our ability to anticipate and prepare for economic events”, he asserts.” This makes sense. Most would agree that “contagious popular stories that spread through word of mouth, the news media, and social media,” increasingly drive the economy. “An economic narrative is a con-

tagious story that has the potential to change how people make economic decisions” like hiring a worker, launching a business venture, or investing in a “volatile speculative asset.” Sport events have been found to affect the economic confidence of the locales or countries where they are being held, for instance. Similarly, it has been found that “shark attacks at local beaches can affect votes for local incumbents, and background music in advertisements can have a strong effect on consumers.” There is much that we can relate with from this background by Shiller, especially in light of the deluge of information – most of which are predominantly false and increasingly hard to detect as such – we are constantly being bombarded with in regard of the ravaging and ongoing Covid-19 pandemic. Boring truths, fantastic lies Truth is boring. As human beings, we are more easily drawn to magical stories; even when we know they are false. It is one of the reason why even when a retraction or correction of a false publication is made, it tends not to have as much resonance as the lie it seeks to refute. The costs of false popular narratives on lives and livelihoods are real and lasting. What you choose to do about them depends on your station and the costs to you, however. If you are a celebrity, any popular narrative, whether negative or positive, can be economically rewarding. If you are a politician or a government, false narratives matter a great deal. And thus, you must do your utmost to change them to your truth; albeit you never quite succeed in doing so entirely. As an individual, the knowledge about the potency of narratives might

make you a little bit more relaxed. Because just like we are wired to connect with stories, we also desire new ones. Thus, every narrative is necessarily the casualty of time. Take the case of the recent and still ongoing bizarre narrative about fifth generation mobile networks (5G) being the cause of Covid-19. There have been a number of fires at cellphone towers in the United Kingdom on the back of this popular view already. Such is the potency of the narrative that the Nigerian ministry of communications was forced to issue a press statement insisting it had not issued a 5G licence to any firm as feared by some after the narrative went “viral”. But surely, when the circumstances and our infrastructural needs require 5G, there should not be any hesitation in doing so. Still, it is abundantly clear that in that event, a great deal of effort would be required to convince people it poses no real danger to their lives. Beware of the dominant narrative David Katz, founding director of the Yale-Griffin Prevention Research Centre in America, has been suffering a great deal of grief lately. To my mind, it is not justified. He is being criticized for daring to suggest another way to manage the Covid-19 pandemic; with less of the increasingly mounting economic costs of the current consensus containment measure of lockdowns. The goal here is not to prove that he has a point or not; albeit considering how poor countries are probably ill-advisedly copying their rich counterparts without properly considering their own unique limitations, some of his suggestions resonate with me somewhat. Instead, what one seeks is to point out the importance of not be-

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When the circumstances and our infrastructural needs require 5G, there should not be any hesitation in doing so. Still, it is abundantly clear that in that event, a great deal of effort would be required to convince people it poses no real danger to their lives

ing unduly swayed by the consensus or dominant narrative. What Katz suggests is a middle course of sorts; a balancing of the health and economic costs of the measures to contain the pandemic. It does not matter whether he is right or wrong. The key point is that there is a danger that a narrative dominates at the expense of other potentially good or better ideas. We must keep questioning our decisions and ideas, reviewing them when there is new information, and if need be, changing them if the benefits of doing so outweigh the costs. Take the case of the media coverage of the Covid-19 pandemic. If you ask a random person anywhere in the world today about the number of cases in his or her locale or country, he or she would probably quite easily tell you what the figure is. Try asking about the number of recoveries, I would be hugely surprised if the individual is able to say it without some thought. Actually, I could not readily tell you what the figure is myself; that is, even as I make a deliberate effort to track the number of recoveries. Yes, transparency is crucial. But if anyone wants the data, they could go to a well-advertised portal for the information. What government officials and the media should focus more on should be recoveries. As human beings are wired for sensational stories, a fact the media is well aware of, it would take a deliberate effort to focus on more positive stories. Still, the authorities could definitely make the change. “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

Banks raise N5.65bn to kick start private sector contributions to the fight against Covid-19 pandemic

ecently, Mr. Godwin Emefiele, Governor of Central Bank of Nigeria (CBN), announced that the CBN, on behalf of the Bankers’ Committee, and in partnership with the private sector have come together to form the Nigerian Private Sector Coalition Against COVID-19. Under the plan, it was agreed that banks would contribute monies at 4 levels. UBA, First Bank, Zenith Bank, Access Bank and Guaranty Trust Bank would each donate N500 million whilst banks such as Fidelity Bank, Ecobank, FCMB, Sterling Bank, Union Bank and Stanbic Bank were expected to donate N250 million each. Those in the category of banks to donate N100 million each include Citibank Nigeria, Standard Chartered Bank, Unity Bank, Wema Bank, Heritage Bank, keystone Bank, Polaris, Providus, SunTrust, Jaiz, Coronation, Nova, FBNQuest, FSDH Merchant Bank and Rand Merchant Bank. In the category of N50m are the newly licensed banks such as Globus Bank, TAJBANK and Titan Trust Bank. By this arrangement, members of the banks would have donated an approximate N5.65 billion war chest, towards efforts to combat the Covid-19 pandemic. This whopping amount excludes contributions from the CBN and the Nigeria Deposit Insurance Corporation (NDIC). Commenting on the development, Mr. Adebayo Adeleke, Managing Director and Chief Executive Officer of Lancelot Ventures Limited and Director, BOC Gases Nigeria Plc said, “It is a good measure. All should do whatever is necessary to combat the pandemic. Our

collective survival is under threat.” An analyst, who craved for anonymity, commended the initiative by the CBN and the banks. According to him, this a major corporate social responsibility that every responsible company operating in the country should be involved in at this time when there is an obvious threat to the collective existence of every citizen, adding that all hands must be on desk to arrest the situation. Whilst many have applauded the move, others differ in opinion. Mr. Gbenga Idowu, National Coordinator of United Shareholders Front (USF) and Nornah Awoh, an activist shareholder said the private sector operators should have been allowed to do something on their own like Guaranty Trust Bank Plc which donated a 110-bed capacity hospital to the Lagos State Government to tackle the challenge. However, providing clarifications, Emefiele said, “the coalition was created out of the urgent need to combat the unfolding COVID-19 crisis in the country in view of the rate at which the virus was spreading. Although the Federal Government has made giant strides in the fight, it is clear that the private sector needs to step in and support efforts already made”. According to him, the objectives of the coalition are to: mobilise private sector thought leadership and resources, increase general public awareness, education and buyin, provide direct support to private and public healthcare providers’ ability to respond to the crisis and support government effort. Consequently, the coalition has set up four major committees comprising of a steering

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committee to provide leadership and steer the coalition and committees in procuring all needed funding, equipment and materials for the battle against the pandemic. The committee will be chaired by the Secretary to the Government of the Federation, Mr. Boss Mustapha, who currently chairs the Federal Government Committee on Covid-19. Other members of the committee are expected to be announced later. The funding committee will be responsible for the initial funding of the effort and its membership include the CBN Governor, Aliko Dangote, Herbert Wigwe, Jim Ovia, Tony Elumelu, Segun Agbaje, Abdulsamad Rabiu and Femi Otedola with each member of the committee and their respective institutions expected to contribute at least N1 billion each to the effort. The operational committee will be responsible for project management, logistics, communication and advocacy and it comprises of the CBN Governor, Aliko Dangote Foundation, Access Bank, Zenith Bank, Guaranty Trust Bank, Stanbic IBTC, Ecobank, Fidelity Bank, Unity Bank. The technical committee is responsible for gathering data about the equipment and materials needed nationwide as well as responsible for intellectual leadership around testing issues, treatment protocols and isolation centres, among others. The membership comprised of NCDC, WHO, Bill and Melinda Gates Foundation, Federal Ministry of Health and select members of the operational and funding committees.

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Friday Atufe

The coalition will be working with reputable institutions and consultants, including the Lagos State Commissioner of Health, Akin Abayomi, Christian Happi and Phillip Onyebujo. Whilst the contributions have been catalysed by the banks, there are strong indications that to procure all needed equipment, materials and all infrastructure needed to fight the pandemic, more than N120 billion will be needed. Consequently, the Bankers’ Committee and other important stakeholders are engaging other major stakeholders within and outside the country, including the Nigerian National Petroleum Corporation (NNPC) and other players in the oil and gas industry to raise more funds. Banks are often vilified for being profit oriented and all but these humanitarian gesture is quite noteworthy and we must commend the banks and the CBN Governor, Godwin Emefiele for this and enjoin other corporate organisations to emulate them so that Nigeria will be able to halt the rampaging Covid-19 and restore normalcy to the nation again. Kronsten is the head, macroeconomic & fixed income research at FBNQuest

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Tuesday 07 April 2020

BUSINESS DAY

EDITORIAL Publisher/Editor-in-chief

Frank Aigbogun

FG, do not let this Coronavirus crisis go to waste

editor Patrick Atuanya

Nigeria must maximise its greatest resource, the Nigerian people

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

Bashir Ibrahim Hassan

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

ith the shutdown of Lagos, Abuja and Ogun States and many others, on account of COVID-19, the Nigerian economy is virtually on lockdown and could lose up to $1 billion daily, dividing for $476 billion, the value of Nigeria’s economy by 365 days. This virus is fast morphing into a seething crisis and we could waste it by ignoring the lessons it offers. The biggest lesson is that government officials should be proactive and decisive in responding to global events. The Buhari government has been insular and protectionist. The consequence is that Nigeria has lagged so badly on the global stage, she rarely matters, in terms of trade, diplomacy, and international relations. Nigeria is watching helplessly as the price war between Saudi Arabia and Russia decimates its economy. In the 1980s, it was a decision by Nigeria and some other supposedly fringe producers to flood the market with oil that brought Saudi Arabia to the negotiating table when it started a price war with the US. Nigeria does not have that clout anymore, its leaders’

follies providing fodder for Trevour Noah’s wisecracks. With an army of image-makers, the government suffers a public relations deficit. Officials have touted the government’s preparedness to deal with the pandemic saying it set up a crises team one month before the index case was reported on February 27 and started surveillance at five international airports in the country to prevent the spread of coronavirus. Yet, Italian passed through the airport and government officials were only made aware when the patient presented himself for testing. Worse still, the isolation centre he was sent to was so appalling he attempted to flee. This is the same situation in many isolation centres around the country and suspected people now prefer to stay home. The deplorable state of Nigeria’s healthcare system is being unravelled by COVID-19. In a twist of irony, Nigeria’s politicians who are wont to travel abroad with their families and defund the country’s healthcare system have nowhere to go with countries shutting their borders. They are being forced to face the consequences of their stupidity. This pandemic has induced the biggest collapse of oil demand in history. The Federal Government has

reviewed the 2020 budget and cut out needless expenditure. Training and cutleries have been axed and so have hiring and refurbishing buildings. While these are not strange budget items, they are often abused in Nigeria. Why does the statehouse have more funds allocated for entertainment than a primary healthcare center? Does the president’s kitchen have to replace cutlery every year? A non-profit business has started on calling out useless items on Nigeria’s budget. Though Nigeria likes to think it is a rich country, in reality, it has the poorest people in the world. Yet, every year, it spends a frivolous amount of money buying cars for lawmakers and refurbishing government houses. If the country lived within its means, it would have just one law-making chamber and pay them part-time, using the civil service pay structure. When Bill Gates visited Nigeria in 2018, he counselled Buhari and his top government functionaries to invest in healthcare and human capital development to lift millions of its poor people. “The most important choice you can make is to maximise your greatest resource, the Nigerian people. Nigeria will thrive when every Nigerian is able to thrive. If you invest in their health,

education, and opportunities—the “human capital” we are talking about today—then they will lay the foundation for sustained prosperity.” Buhari’s government ignored this counsel and every year underfund healthcare and human capital development. The result is that in the midst of a global pandemic, his government is begging Elon Musk for ventilators. COVID-19 is also unraveling the security risk of a squalid society. Thousands being told to stay at home depend on daily income and without social buffer many have turned to looting shops. The government is pouring money into social investment schemes but discouraging private enterprise and job creation through recessive regulation. Billions are being spent on roads may not be maintained because they won’t be tolled. For a government whose fierce defenders deify penury, the chickens have come home to roost. The government is bungling the so-called palliatives to its poor with government officials crudely sharing money to people. Nigerians should realise that it is all right to aspire for a better life and they must demand that their leaders chart a path to that life rather than provide excuses for their incompetence and attack critics.

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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Tuesday 07 April 2020

BUSINESS DAY

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The conversation plan is enigmatic. Tweak it, Mr. President Afeez Odunoye

t opens this way. The Nigerian Presidency thrives on a grand form of mystery that sets it apart from the chain of presidencies we have experienced these past decades. Today, issues of national importance are treated as “family affairs”. This treatment prepares grounds for suspicion and depletion of confidence — some critical stuffs are constantly subjected to commodification and conversion for selfish gains by the Aso Villa circus. With Tuesday’s biggest news item — the president’s right-hand man, Abba Kyari testing positive for the coronavirus, President Muhammadu Buhari and his communication managers dropped the ball again with the mismanagement of information around the development. The managers acted with an upsetting speed. Fake news flourished. Rumour mills had a good outing. Responsible governments take up conversations with the people as stakeholders and pursue this with gusto and purpose. The handling of information around the coronavirus and other critical matters by the Muhammadu Buhari presidency has failed to match the foregoing so far. Without doubt, this is extremely disappointing. How did we get here? Have you considered doing a “headcount” of genuine addresses put forward by this government to speak to the people and the nation? Is it scanty at your end too? This emptiness dates back to May 2015, the entry point for secrecy on a grander scale and the relegation

of transparency. Our president would rather not speak to us, except when “it is appropriate”. Outsiders have manufactured reprimands from the conversation template wielded and pitched by this presidency. Australian-based Islamic cleric, Mohammad Tawhidi explored this route on Friday to call out the president with several insulting adjectives pushing a point: Nigeria has a President. He likes to disappear and finds it stressful to talk to his people. It is quite astonishing that Buhari’s media team insists the hide-and-seek approach is the best conversation plan you can find anywhere. It is hard to describe the contradictions of this approach using few words and sentences. Keypads would click away with no quick end in sight. In a March 22 interview on ‘Politics Today’, a discussion programme on Channels TV, the president’s most senior media aide, Shehu spoke gladly on the government’s detachment from “showmanship and cheap publicity’’. I have a reminder. The March 15 Abule-Ado explosion in Lagos inspired a special pictorial situation report delivered directly to the president. Photos of Governor Babajide Sanwo-Olu briefing President Buhari made front pages. Pictures from that briefing still hangs nicely on official and personal social media walls. It is clear someone is not being sincere with the concept of showmanship. Perhaps christening that outing and a host of other questionable outings, ‘leadership in motion’ is not out of place. Such contradictions! Aso Rock Villa, Nigeria’s seat of power, operates with a disturbing governance module similar to that of occult groups. 21st century leadership and governance does not work this way. It still hurts that an outsider mounted a podium created by the inactions of this

government to tutor them on what they should give attention to: simple matters as addressing the nation in the wake of a pandemic and offering notes of relief and leadership. The media team, with reference to Bashir Ahmad (new media aide to the President) should go back to the ‘gbas gbos’ and pick this for subsequent conversations. As this piece is being committed to the ritual of scripting and coming to life, #BuhariResign is trending on Twitter. This is an offshoot of justifying loud silence amidst the failures of leadership. Looking away without addressing the flaws that inspired the hashtag in the first instance is not a reasonable thing to do. Standing up to situations has always been a ‘challenge’ for this government in relation to how the government feels it is making life easy for Nigerians. Rumours and outright lies fester and dump their fate at the gates of the Villa because the government fails to rise to its duty. American philanthropist and scientist, Newton Lee sums the essence of information in two sentences: “Information is power. Disinformation is abuse of power.” Churning crucial information holds the potential of building trust and confidence among the people. But today’s government loathes making trips on that route. To hell with timely information and conversation is at the hems of their garments for everyone to see, home and abroad, including Imam Tawhidi. Travelling on the route of informing citizens promptly doesn’t make sense to them. It is a taboo. Misinformation passes as a ploy to disarm the people and make them see no wrong in what the government is doing, even when it could be taking dangerous plunges with hostile decisions. Keeping people informed and making governance transparent, in this government’s understanding of things is perhaps primal and belongs to the his-

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It is quite astonishing that Buhari’s media team insists the hide-andseek approach is the best conversation plan you can find anywhere. It is hard to describe the contradictions of this approach using few words and sentences

tory books. And the man at the centre of things wants history to be kind to him. There are numerous templates to put to good use for the task of restoring the country on the right track. The United State Agency for International Development (USAID) has lessons for this government. Today’s holders of power should take time to study the agency’s interpretation of transparency and accountability in governance. They should note this: “The process of governing is most legitimate when it incorporates democratic principles such as transparency, pluralism, citizen involvement in decision-making, representation, and accountability. That interpretation goes further to establish mutualism: “Civil society, the media, and the private sector, have roles and responsibilities in addition to those of the government.” At a January 2016 meeting with parliamentarians from Ukraine, the Storting (Noway’s supreme parliament) held out openness and trust which this government has failed to appropriately appreciate as “basic principles”. Olemic Thommessen, president of the Storting at the time pushed a simple message I consider relevant to this commentary: “Democracy does not arise on its own. It comes from within, and develops over time. Key principles in any democracy are openness and trust. It is important that politicians refrain from giving themselves privileges that increase the divide between politicians and the people. People must feel that democracy contributes to peace and welfare.” This moment feels very appropriate for the President to pursue responsiveness and communal needs with an inimitable engagement template. Enough said. Odunoye, a social commentator wrote in from Lagos.

Covid-19: Impact on Nigeria’s economy

he World’s activities have been disrupted by the Covid-19 outbreak. World-Wide conferences, legal gatherings, sporting events, political rallies, economic transactions, have all been affected by the outbreak. Economically, the global supply chain substantially relies on production from China. The disruption in China thus affects almost all economies and markets. As a result, American, European and African markets have been on a bearish. While the World actively pursues a vaccine to combat the pandemic, the pandemic has been of dilapidating effect on the Nigerian economy. Crude oil and the budget problem Nigeria’s revenue is 80 percent oil receipts. The 2020 budget was benchmarked on the crude oil price of $57 per barrel. The on-going disruption caused by the Covid-19 pandemic has plunged crude oil prices to below $29 per barrel. The Oil market plunge is further exacerbated by the oil production rift between Saudi Arabia and Russia, two countries who have for some years led efforts to balance World Oil Prices, through the OPEC+ arrangements between OPEC members and nonOPEC oil producers. The production rift stemmed from Russia’s non-alignment with OPEC’s (Saudi Arabia-led) proposal to cut down on oil production (reduce supply) to cushion the plunging of oil prices below International benchmark of about $66 per barrel. This production rift may lead to Russia’s reneging on the OPEC+ arrangement, which has the effect of removing the cap on production, allowing OPEC and non-OPEC oil producing states increase production to volumes as can be commercially viable. By market forces, where there is surplus oil production, crude oil price per barrel crashes. Presently, the price per barrel fluctuates between $20 and $29. Noting that Nigeria’s 2020 budget

was pegged on the presumption of oil selling at $57 per barrel, this plunge in oil prices below Budget benchmark drags the 2020 budget into a large deficit. The Nigerian Bureau of Statistics reported that the Economy advanced by 2.55 percent in the last quarter of 2019. If the Covid-19 pandemic is not contained in the upcoming few months (April and May), and oil price continues to plunge, the Nigerian economy may contract into a negative. Given overwhelming dependency on Oil receipts, negative economic growths of more than two months will plunge the Economy into a recession. Notionally, in times as these, budget deficit is covered by savings in the Excess Crude Oil Account. However, the limited fund in the Account has necessitated calls by the government to slash the 2020 budget, which when implemented, will run negatively on the Country’s projected economic growth. Possible solutions to curb an economic downturn Cut-Down on cost of governance – For many years, Federal recurrent expenditures have accounted for 70 to 80 percent of the annual budgets, leaving the remainder for capital projects, notwithstanding the country’s growing debt profile. Slashing this cost by at least, 40 percent, will free up revenue to cushion the effect of the Oil price plunge on the 2020 budget and broader Nigerian economy. Removal of fuel subsidy – Nigeria spent $1.8 billion on fuel subsidy in 2018, four times more than it spent on Health, Education and Science and Technology. The Nigerian 2020 budget sits at $35 billion. Fuel subsidy is primarily paid to absorb high prices of PMS (Premium Motor Spirit- petrol) if sold at market value; to keep the price pegged at, at least N145 per litre. Thus, fuel subsidy is the money paid to stakeholders in the

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downstream oil sector to keep the price of PMS as it is currently, which essentially is the difference between Government-controlled prices and market prices. The reason given by successive governments to justify non-removal of fuel subsidy has been the poor purchasing power of majority of Nigeria’s population. Presently, the plunge in oil prices may likely mean that the market cost of supplying a litre of fuel will be less than the retail price, such that a removal of subsidy will not lead to an increase in the retail price. Additionally, the Dangote Refinery, projected to come on-stream in early 2021 (with 650,000 barrels per day refining capacity), will substantially reduce the system of exporting and importing refined crude products, bringing down retail prices to considerable rates. The plunge in oil prices and Dangote Refinery’s potential elimination of associated need for foreign refining capacity, provide short and long-term buffers against the income stress that will be caused by a withdrawal of subsidy. If fuel subsidy is withdrawn, more funds will be released to cover the budgetary short fall occasioned by the global oil price plunge. Opening of land borders (strictly for trade) – Premised on the plan to curb rice smuggling and to support profitability of local production, the Nigerian land borders have been closed since October 2019, preventing imports from neighbouring countries (such as Niger Republic, Benin Republic, Chad and Cameroon). While the borders remain closed, ironically, the neighbouring countries are arguably substantial recipients of Nigeria’s non-oil exports. The border closure particularly lays to ridicule the African Continental Free Trade Agreement (AfCFTA) the Country recently signed (even though un-ratified by the National Assembly). The border closure continues to increase inflation in Nigeria. Last month’s

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Temple Ezebuike (February’s) food inflation was 14.9 percent, up by 0.05 percent from 14.85 percent recorded in January 2020. This has also affected cross-borders businesses, with many turning losses and closing shops, lengthening unemployment rate. With the fall in oil prices and impending budget cut, the resultant outpour is inflation; which will cause a rapid loss of purchasing strength of Nigerians, and accelerate the economy towards another recession. It is recommended that the borders be reopened strictly for trade (essentially- processed agricultural produce, with attendant incorporation of social distancing guidelines given the pandemic) whilst the Nigeria’s Customs tightens its enforcements mechanism to curb smuggling, and whilst the Federal government creates enabling infrastructure for local producers. A border re-opening will revive legitimate cross-border businesses, which will by its shed reduce the unemployment spike. Food inflation will flutter down as more agriculture goods flood the Nigerian market. This reduces the strain on expendable income of Nigerians who already spend almost 60 percent of income on food. A competitive agriculture market and higher expendable income of Nigerians are mild fodders to withstanding any impending economic downturn.

Note: the rest of this article continues in the online edition of Business Day @https://businessday.ng Temple Ezebuike is a Lagos-based lawyer, with focus on Energy, Finance and Real Estate. You can reach him at templeezebuike@gmail.com

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Tuesday 07 April 2020

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

COMPANY RELEASE

WarnerMedia partners Nigerian Trending Media Africa to offer clients access to more advertising solutions

arnerMedia and Trending Media Africa are pleased to announce the commencement of a strategic partnership that will further diversify WarnerMedia’s business streams, while offering Trending Media Africa (TMA) clients access to advertising solutions on the high-quality American blockbuster movie channel, TNT, as well as WarnerMedia’s iconic kids’ channels, Cartoon Network and Boomerang. WarnerMedia has been present in Africa for more than 20 years, operating six channels across the continent in 56 English, French and Portuguese speaking countries; including Africa’s favourite kids’ channels - Cartoon Network and Boomerang - and Africa’s tailored blockbusters destination, TNT. “Our wide portfolio allows us to target a large array of segments from young adults, to families, to kids. We can, therefore, offer client’s a fully integrated advertising offering on our channels,” Guillaume Coffin, VP Head of Commercial

and Business Development Turner France, Africa & Israel said. “We know that clients are looking for fully integrated advertising packages which WarnerMedia is now able to do in Nigeria through our TMA partnership.” On its part, Trending

Media Africa is one of Nigeria’s leading media sales representatives for satellite TV, radio and other related media platforms with a cumulative experience spanning over 50 years. The company has demonstrated its understanding and clear vision of what

customer relationships and satisfaction should be, thus becoming a key player in a booming and highly dynamic market, where brands are more and more active to gain market shares. “We are excited to partner with the world’s leading media and entertainment giant. Nigeria

is a vibrant market that holds a lot of growth potential for the brand, and, we will work closely with WarnerMedia to deliver the best returns,” Julius Osumah, Managing Partner, Operations at TMA remarked, said. TMA is now representing WarnerMedia’s channels in

L-R: Olusola Adekoya, CEO, Shodex Beautification Landmark Ltd and Member, CPEF Governing Board; Ismail Adetola Lawal, founder/chairman, IAL Nigeria Ltd/Chairman, CPEF board of patrons; Great Grand Ma, Essie Florence Ibijoke Kukoyi, former head teacher (rtd), Command Children School and Chairman, CPEF Projects Expansion Committee; Dr. Taiwo Afolabi, Group Executive Vice Chairman, SIFAX Group and Mrs. Oluwagbemiga Benson, Pioneer Executive Chairman, Lagos State Universal Basic Education Board (SUBEB) and Chairman, CPEF Advisory Committee at the installation ceremony of Afolabi as the Grand Patron of City Profs Educational Foundation which was held at SAHCO Plc, Lagos.

COMPANY RELEASE

Nigeria, giving clients access to a broader distribution with its kids’ channels, and movie destination TNT, being available across DStv’s Family and Premium offerings. At the same time, Cartoon Network and TNT are accessible to GOtv subscribers on GOtv MAX, and TNT also featuring on the GOtv Jolli package. “With TMA’s expertise and its ability to bringing game-changing innovation coupled with trade marketing flair, we are convinced that with this new partnership, we will bring even more value to clients,” Coffin concluded. Following the new partnership, Carton Network and Boomerang will be bringing fresh content like the allnew I, Elvis Riboldi, Lamput and Kingdom Force to their channels, as well as more than 1 000 new episodes of the channels’ favourites like Teen Titans Go, DC Superhero Girls, Apple and Onion, Zig and Sharko and Dorothy and the Wizard of Oz. TNT has an exciting line-up with great blockbusters such as The Illusionist, Crank, Robin Hood, Gladiator, The Island, Jurassic Park and King Kong.

CONSUMER GOODS

CONVID: 19 : Opera users to access information Atedo Peterside steps down from on its enhanced mobile browsers Flour Mills’ board to focus on NGO

s t he pa n d em i c expands across the African region, Opera is doing its part in keeping millions safer during the outbreak by adding a speed dial to the Opera Mini browser and Opera browser for Android, enabling people with quicker access to official information from local government and the ministry of health about COVID-19 per country. With this addition to the speed dial, Opera is helping millions of users in 38 African countries with official information about the actual increase of COVID-19 cases per country, tips and recommendations on how to reduce the risk of infection, and the latest governmental statements about lockdowns per country. “Our mobile browsers and

news applications are used by nearly 120 million people across the African continent. By adding the COVID-19 speed dial into our mobile browsers, we are helping people make more informed decisions about how to deal with the pandemic in their local communities.” said Jørgen Arnesen, Head of Marketing and Distribution at Opera. The Opera Mini browser and the Opera browser for Android have also included a dedicated news channel with the latest local and global news related to coronavirus outbreak. The channel displays a feed of the top stories and most relevant local articles, as it uses the personalized AI news engine of Opera News. Opera users can access the channel by swiping right on the home screen

of the Opera Mini and Opera browser for Android. The dedicated news channel is currently available in Algeria, Angola, Burkina Faso, Cameroon, Democratic Republic of Congo, Egypt, Ghana, Guinea, Ivory Coast, Kenya, Morocco, Mozambique, Nigeria, Senegal, South Africa, Tanzania, Uganda, Zambia and Zimbabwe. Multiple national authorities have already taken measures to prevent the spread of the virus in different African countries. With solutions such as quarantine and isolation being implemented as measures to reduce the risk of increased cases, people across the African continent are working remotely, accessing online entertainment services, and spending more time on the web.

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OLUFIKAYO OWOEYE

igeria’s biggest Miller by market share, Flour Mills of Nigeria has announced the resignation Atedo Peterside, a non-executive Director from its board with effect from 31 March 2020 According to the makers of Golden penny brand, the decision of the renowned banker and businessman to step down is to allow him “focus considerable and more deliberate attention to the fight against CONVID-10 having set up the ANAP FOUNDATION CONVID-19 THINK TANK,” the statement said. “Having set up the ANAP Foundation COVID-19 Think Tank, Mr. Peterside wishes

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to personally lead the work of the foundation which would make it difficult for him to adequately represent the interests of the minority shareholders on the board of Flour Mills Nigeria, Plc.” Atedo Peterside joined the board of Flour Mills of Nigeria on March 10 2010. Despite mounting macro economic challenges such as decrepit infrastructure, Apapa gridlock, smuggling activities Flour Mills of Nigeria has maintained an impressive showing. In its third-quarter (Q3) results for the year 2019/2020, Profit Before Tax (PBT) increase by 23percent to N3.7 billion in Q3, and by 9percent to N12.3 billion nine months period. Revenue during the period was N152.7 billion, compared to N130.9 billion @Businessdayng

in Q3 2018/19 (17percent – YoY growth). For the nine months ended 31st December 2019, Group revenue was N423.5 billion representing a 6percent increase compared to same period last year. Gross profit increased by 11percent in Q3 and by 3percent yearto-date (YtD) Gross Profit is N47.8billion, compared to N46.6billion last year. Finance cost reduced to N4.3 billion, a significant drop (20percent) compared to N5.3 billion in Q3 2018/19 (21percent year-on-year (YoY) decline). Profit Before Tax increased by 23percent to N3.7 billion in Q3 and by 9percent to N12.3 billion YTD. Net cash generated YTD was N7.9 billion, compared to N7.2 billion in the prior year.

Tuesday 07 April 2020

BUSINESS DAY

COMPANIES&MARKETS

Business Event

DEALS

Global M&A in Q1 drops 28percent as economies battle CONVID-19 OLUFIKAYO OWOEYE

ctivity in the global mergers and acquisitions space p l u n g e d 28percent in the first quarter of 2020 to its lowest level since 2016 as the devastating economic effects of the coronavirus pandemic took hold in March, compounding a slow start to the year for dealmakers. According to data from Refinitiv, deal activity in the United States dropped by half to $252 billion in t h e f i r s t t h re e m o n t h s from a year ago, driving global volumes down to $698 billion from $964 billion in the first quarter of 2019. Asia volumes dropped 1 7 % ye a r- o n - ye a r t o $ 1 4 2 . 9 b i l l i o n . Eu ro p e saw its deal volume more than double to $232 billion thanks to a handful

of mega-deals clinched just weeks before the virus started battering the continent’s economies. With large swathes of the globe shut down, the M & A p i p e l i n e re ma i n s patchy and likely to be dominated by rescue deals, restructurings and nationalizations as governments and central b a n k s t r y t o s h o re t h e economy up. “This crisis is unique. It is something that our generation has never witnessed before,” said Luigi de Vecchi, chairman of EMEA banking capital markets advisory at Citigroup. “When stock markets tumble 30% you need to hope to renegotiate a deal if you have the contractual ability to do so. However, if you haven’t re a c h e d a n a g re e m e n t you a re l i ke l y t o d e l ay the signing until you have better visibility,” he said Russia used its Nation-

al Wealth Fund (NWF) to finance this quarter’s biggest deal - the $39 billion purchase of the country’s largest lender Sberbank. Other big deals included insurance broker Aon’s $30 billion all-stock takeover of rival Willis Towers Watson and the $18 billion private equity-led buyout of Thyssenkrupp’s elevators business. “ We h av e s e e n t h e number of deals announce d g lobally drop 43% year-over-year in the last two weeks,” said Bank of America’s global M&A head Patr ick Ramsey, adding the downward t re n d w a s e x p e c t e d t o continue into the second quarter. “O n c e w e g e t t o t h e back-end of this, we will see a meaningful snapback in activity. The degree of that snap-back will depend on the economic outlook and equity mark e t r e c o v e r y ,” R a m s e y said.

L-R: River State Commissioner for Special Duties, Hon, Bariere Thomas; Head of Operations, Indomie Factories Port Harcourt, Mr Virand Pathania; Production Manager Indomie Factories Port Harcourt, Mr Maxwell Egele and HR/Admin Manager, Indomie Factories Port Harcourt, Mr Chinedum Wali during the donation of relief products by Indomie to River State Government for its citizens to minimise the impact of the lockdown in the state.

L-R: Allwell Umunnaechilla, head, operation, Lagos Commodities and Futures Exchange, (LCFE); Rotimi Solomon Omowale, chief financial officer; Akin Akeredolu-Ale, managing director; Fatima Lawal, company secretary; Rasheed Yusuf, director, and Samuel Onukwue, director, at the breakfast meeting organized By LCFE to introduce the company to senior stockbrokers, in Lagos

BANKING

FCMB temporarily suspends season 7 of millionaire promo, commits to empowerment of customers MICHAEL ANI

First City Monument Bank (FCMB) has announced a temporary suspension of the season 7 edition of its bumper promotion package for savings account customers tagged, ‘’FCMB millionaire promo’’. The decision, which has been approved by the Central Bank of Nigeria (CBN), is part of the strategies of the Bank to support the efforts of the government to mitigate the risk of the spread of the COVID-19 (coronavirus) pandemic. In a statement, FCMB explained that the development is also in line with the social distancing protocol and other measures recommended by the World Health Organisation (WHO) and the Nigeria Centrefor Disease Control (NCDC) to contain the disease. Thousands of customers of FCMB and officials of the regulatory agencies usually attend the live draws of the promo across the four regions and nineteen zones that make up the Bank nationwide. The promo was scheduled to run from March to October 2020 and produce another set of 16 lucky customers of the Bank as millionaires through winnings of cash ranging from N1million to N2million.

This is in addition to 152 LED televisions, 152 power generating sets, 912 smart phones and 760 decoders, to be won through electronic selection of all qualified customers. According to the Executive Director, Retail Banking of FCMB, Olu Akanmu, “the decision to temporarily suspend the Millionaire Promo Season 7 was a difficult one. However, as a responsible organisation, the safety and wellbeing of customers and the entire public are paramount at this critical period of a health emergency. As soon as the situation becomes conducive, the season 7 of the promo will resume, because we are committed to reward the aspiration of our customers to save and fulfil their dreams’’. As a leading financial services provider, FCMB will continue to provide prompt and convenient financial services despite the ongoing challenges posed by the COVID-19 pandemic in Nigeria, Akanmu said The lender has already activated its Business Continuity plan and commenced a comprehensive implementation of safety measures for customers, staff and the public to contain the spread www.businessday.ng

of the pandemic. Apart from advising Nigerians to diligentlyadhere to all the rules put in place by the government and the health authorities to avoid further spread of COVID-19, the Bank has put in place several safety measures at all its touch points. Among this is the cleaning of teller counters at all branches with disinfectants every hour. This is in addition to compulsory enforcement of temperature screening, the use of hand sanitisers for all those that must gain access to any of its business premises and keeping a keen eye on social distancing rules. Following this, FCMB has further optimised its robust alternate and digital banking channels to effectively cater for all forms of transactions required. Customers are therefore encouraged to make use of the Bank’s self-service channels, including, internet banking, the new FCMB Mobile app, *329# USSD solution, automated teller machines, among others, to send money, pay bills, request for loans, purchase airtime, check account balance and carry out other transactions on the go.

L-R: Lovina Eneh, treasurer, Nigerian Bar Association (NBA) Enugu State branch; Anene Ojinta, chairman, NBA Enugu; Emelue Chiedu, controller of Correctional Service, Enugu Command, and Monday Emeka, public relations officer, Enugu State Command, during the presentation of the 2019 Correctional Service Act to the NBA Chairman at Nigerian Corrections Service Enugu state headquarters. NAN

L-R: Commodore Edem Duke; Raymond Murphy, chief executive officer, Mouka; Sola Sobowale, face of Mouka wellbeing mattresses/nollywood super star, and Kingsley Lar, commandant, Nigeria Armed Forces Resettlement Centre, during a courtesy visit to Mouka at the company’s corporate headquarters in Lagos.

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Tuesday 07 April 2020

BUSINESS DAY

Media business COVID’19 tests national systems as media gets high score for overall coverage …Cases hit 209 Daniel Obi

he overall media coverage of COVID ’19 by Nigerian media is scored high by communication experts who underlined the exhibited professionalism and balanced stories about the pandemic. However some analysts still believe that more is still needed from the media to dig deep and interrogate certain actions or inactions to slow the progress of the pandemic which has tested national systems including the health sector and Nigeria’s preparedness to such sudden developments. Over the last four months, media consumption has increased, according to a survey by Kantar, as the public is anxious to get more information about coronavirus but the traditional media – broadcast and newspapers – is considered trustworthy in giving more accurate information over social media with less trust by the public. “The media has lived up to

expectations of the public”, says Charles Igbinidu, Managing Director of CFO and Associates Public Relations. He agrees that though there is a level of tension over avalanche of information but said without the information more Nigerians would be ignorant about the disease. To the CEO of Neo Media, Ehi Braimah, the coverage has been appropriate and professional excluding the fake

news dwelling on inaccurate COVID’19 myths. In his comment, John Kokome, a public affairs analyst also agrees that the Nigerian media is doing its bets within the circumstance it has found itself but said that the media can do more by digging deep to uncover question Nigerian government preparedness to such occurrences. For instance, when the virus started spreading from

Nigerian inventor advises youths against entitlement mentality

ne of Nigeria’s serial inventors and Managing Director of Port Harcourtbased Valec Electric Limited, Okwudili Ogbuenyi, has blamed the low productivity among many young people in Nigeria today to a growing culture of entitlement inherited from years of hearing political leaders call them the leaders of tomorrow. Ogbuenyi who advised the youths to invest their energy in talent development and entrepreneurship, also insisted that they owe the society the debt of deploying their young creative energy into contributing to the advancement of their environment. Speaking when he was conferred with the award of Nigerian Youth Ambassador by the National Youth Council of Nigeria recently in Port Harcourt, Rivers State in recognition of his inventions in the area of Electrical & Electronics Engineering as well as his works of philanthropy, Ogbuenyi in a statement lamented the years of political sloganeering on youth empowerment

and said time has come for youths to take practical steps towards empowering themselves through knowledge-based selfimprovement. “We have been hearing about youths being the leaders of tomorrow since we were children. But my analyses show that even those who were youths at the time this insincere political rhetoric began, have grown into adulthood without a change of guard. If those that should hand the reigns of leadership to our fathers failed to do so and are still telling that we are the leaders of tomorrow, it would be foolhardy for us to continue to believe this insincerity,” he stated.

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Ogbuenyi, who has multiple inventions in the areas of Power, Security, and Home & Industrial automations said the only way today’s youths can be tomorrow’s leaders would be for them to assert their economic independence from politicians and become agents of Nigeria’s economic diversification. Earlier during the presentation of the award, Secretary General of the National Youth Council of Nigeria, Suleiman Abubakar commended the awardee for distinguishing himself not only in the field of engineering and entrepreneurial development but also in philanthropy.

China, what actions did countries like Nigeria take to forestall its entry into the country and how were such actions implemented. Fortunately, Nigeria attempted to be proactive by demanding self-isolation of entrants into Nigeria but its implementation was sedentary as even government officials that returned attended meetings. The spread of the pandemic has also questioned Nigeria’s health sector’s preparedness

to such national and global issues. It is important that much relief amounting to about N15.3 billion however came from the private sector’s intervention to obviate the pandemic from overwhelming Nigeria. While Abiodun Sulaimon, a media analyst based in Nigeria urged Nigerian media to continue to dig deep on more facts about COVID’19, George Ogola, writing in Bizcommunity believed that African media should develop alternative measures on WHO recommendations that are appropriate to Africa. “WHO has urged the public to implement a number of measures. These have included social distancing and self-isolation. In addition, governments are increasingly imposing quarantines. These measures have been legitimised by the international news media. They’ve also been reproduced largely uncontested across Africa – from Johannesburg to Nairobi to Lagos. “Unsurprisingly therefore, governments across the conti-

nent have instituted the WHO guidelines and followed in the footsteps of Europe, China and the US”. Ogola believed that the African media has failed to develop an alternative narrative by encouraging the WHO and governments to ensure measures are appropriate for local conditions. “For example, social distancing, self-isolation and quarantines are largely impractical in a number of African countries”, Ogola said in the recent writeup entitled ‘Why Africa’s journalists aren’t doing a good job on Covid-19’ While Nigerian media has done well especially in drawing President Buhari out of his reticent disposition to speak to Nigerians and providing Nigerians measures to deal with COVID’19, media experts believe that this pandemic which is spreading in spite of the measures has provided much opportunity for the media to critically look at the nation’s health system, the medics and preparation of Nigeria to such pandemics.

Covid 19 - FMN donates Golden Penny Food products to Nigerians

lour Mills of Nigeria Plc , Nigeria’s integrated food business and agro-allied Group, owners of Golden Penny has announced its commitment to lend a helping hand to several states across the country. FMN is donating essential food products to alleviate the challenges faced by Nigerians in the wake of the Coronavirus outbreak and the impact of the partial lockdown instituted to curb the spread of the virus. To kick start the food dona-

tion drive across the country, the company has donated several trucks of food products to Lagos State in support of the state’s ongoing food relief efforts. Paul Gbededo, Group Managing Director and Chief Executive Officer of the company commented, “During this trying time, we truly need to come together as a people to fight the scourge of the Covid-19 virus. The virus is casting a shadow on our way of life in Nigeria and the world, but we believe that with continued collaboration,

we can alleviate the suffering of Nigerians and continue to bring hope to those who have suffered and lost.” The company also disclosed that in addition to food relief, it would be providing medical aid through the donation of medical equipment and kits for first responders, especially frontline medical workers and security personnel who are selflessly working to ensure that Nigeria can slow down the transmission of the virus and alleviate the consequent challenges faced by the populace.

Chain Reactions Nigeria wins 2020 SABRE Awards

hain Reactions Nigeria, a Public Relations and Integrated Communications Consulting firms based in Nigeria has again shone brilliantly on the global industry map as it emerged the overall winner of a major prize and three certificates of excellence at the prestigious 2020 SABRE Awards Africa. Provoke Media (previously The Holmes Report) in the 2020 SABRE Awards Africa

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Winners’ list announced on its official website, according to a statement named Chain Reactions Nigeria the Overall Winner in the Travel and Leisure category with its entry, “Building Positive Narrative for Dubai as Affordable Destination for Nigerians”. The winning entry was a perception management campaign run for Dubai’s Department of Tourism and Commerce Marketing (DTCM) to cause a shift in the perception among @Businessdayng

Nigerians about Dubai being an expensive city to an affordable city of immense opportunities. Three other entries by the firm that were awarded Certificates of Excellence , according to the statement include, “Strategic Public Relations to Raise Awareness and Drive Participation for The Jack Ma Foundation’s Africa Netpreneur Prize Initiative”in the Not for Profit/Charities category.

Tuesday 07 April 2020

BUSINESS DAY

Branding How brands can survive Coronavirus crisis Nigel Hollis, Michael Umogun

he office is an organized environment that encourages focus and productivity however these are difficult times that have seen the office become suddenly not too attractive to many people and working from home is much preferred for health reasons. Unlike humans, brands cannot isolate themselves so easily part of a brands primary objective is to be visible so that it can be chosen at the moment of truth. With the full effects of the Corona Virus outbreak still to be realized in many markets what can management and marketers do to ensure the continued health of their staff and brands? First, put plans in place to continue business and protect employees and customers. Second, recognize that every business in the same industry is likely to take a hit. Third, how well you ride out the crisis will depend on responding to it more effectively than your competitors. How can your brand best ride out the turmoil? And how can you ensure a swift return to business as usual? Doing dry run

and rehearsal of possible worst-case scenarios matters as you would be better prepared for the challenge before it occurs. If your resident IT and statisticians can model the possible impact for you and how to respond effectively that could also be helpful. Bottomline do not be too relaxed and caught out, play out the different consequences and as the boys scout

would say it ‘be prepared’ Beyond the immediate response, when facing something like Corona Virus the response to people’s feelings is going to be critical. To do so effectively, management and marketers must suspend their own viewpoint and put themselves in their customer’s shoes. Good time for emotional intelligence 101. How

Media rights group tasks government to implement policies on journalists’ safety Daniel Obi

edia Rights Agenda (MRA) has called on the Nigerian government to adopt and implement policies and laws instituting preventive measures aimed at eliminating or reducing attacks against journalists and ensuring routine but diligent prosecution of perpetrators of attacks against journalists. The call was contained in a report by MRA titled “A Profession Endangered: An Analytical Report on the Safety of Journalists in Nigeria” in which it highlighted a variety of attacks faced by Nigerian journalists in the course of carrying out their professional duties, including assault

and battery, arrests and detention, shutdown of media outlets, raids on media organizations and facilities, confiscation or destruction of work equipment, and abductions, among others. The project which led to the report is aimed at finding solutions that ensure the safety of journalists at all times, particularly in the face of shrinking civic space in Nigeria manifested in sustained attacks on the right to freedom of expression and media freedom and in the light of the failure of successive governments, law enforcement and security agencies to take meaningful steps to address the problem which has significantly affected the ability of the media to provide the public with accurate and reliable information. The report documents cases of attacks on journalists and the media

in Nigeria between January 2017 to May 2019. MRA said: “in all cases of attacks against journalists in Nigeria, there is no evidence of any diligent effort made by security and law enforcement agencies to investigate and prosecute perpetrators; the perpetrators invariably commit these crimes with impunity as they go scot-free without any repercussion for their actions.” Ayode Longe, MRA’s programme director, said: “It has become imperative that we call attention to this ugly trend of attacks against the media because of the negative effect especially when government is doing nothing to address the issue. We have consistently made the point that when attacks on the media go unpunished, perpetrators are emboldened and journalists are silenced in many ways.

Mr Bigg’s gives out sanitizers, nose mask, gloves

r Bigg’s, a quick service restaurant operated by UAC Restaurants Limited, has shared over 400 alcohol-based sanitizers, surgical mask and hand gloves to Lagosians at Ile-epo market in the Oke-Odo Agege Local Government Development Area of Lagos as part of its corporate social responsibility in response to the fight against Coronavirus pandemic . Hundreds of market women, men and shoppers thronged Mr Bigg’s stand amidst strict observation of the social –distancing guideline to curb the spread of the novel virus among

the market people. Speaking at the sanitizers’ distribution activation at the market in Agege, the marketing manager of Mr Bigg’s, Ethel Mba said, “As a responsible organisation, Mr Bigg’s is only keeping its brand promise of ‘doing good’. We are supporting the government to fight and curb the spread of this virus that is ravaging the world.” “The country is going through a rough path at the moment and for this reason, we are sharing these products to help protect Nigerians from contracting this virus. Our desire is to see this pandemic come www.businessday.ng

to an end in Nigeria and indeed the world,” she said. Some of the shoppers and traders at the market who shared their experiences said, Mr Bigg’s has done well to select the market as one of the markets in the state to share sanitizers, medical mask and hand gloves. Udeme Bassey, a shopper said, “there is scarcity of sanitizers, nose mask and hand gloves at the stores within Agege therefore, this initiative by Mr Bigg’s is welcome development. We are unable to purchase these products that are being given out free of charge. We are grateful to Mr Bigg’s,” she said.

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do they feel? What help might they need – functional or emotional? And how might they expect the brand to respond? People’s response to a crisis is going to vary by their basic attitude to life, and it is important to align your brand’s response with its existing positioning and values or it will seem inauthentic. Ultimately it is about how your brand can improve its relevance in a time of need and defuse any potential concerns related to your business. For instance, home delivery might seem like a great idea but only if the delivery person has sanitized their hands. This is the best time brands playing in the health and related sectors should collaborate with relevant authorities to create visibility and relevance for the society. It is disheartening that marketers of sanitizers and hand wash are making a kill instead of showing empathy. It would be fair to say though that the laws of demand and supply are at play the truth remains that brands that show empathy now would be remembered and rewarded during better days. Brands that have invested in technology would also benefit when there is a clamp down or restriction of movement. Good news is our situ-

ation in this clime (Nigeria) have not gotten that bad, but we would like to note that even in China Kantar is still talking to thousands of consumers via WeChat and What’s App. A good number of our home panels are still running, and this is a delight as we can provide service in difficult times to our clients. While it might seem callous to say so, crises can also offer the opportunity for growth. In China, Luckin Coffee began delivering alcohol-based sterilizers and antibiotic hand soap in addition to its beverages and stocking its network of vending machines with the sanitizer products. Whether this proves a successful strategy or not, the demand for DTC services and delivery is only likely to grow in the coming weeks and will likely have a long-term impact on consumer behaviour. I would like to close with the cheering news that our first case of Corona Virus has fully recovered and may be leaving the Infectious Disease Hospital in Yaba (Lagos) very soon. So, to the Nigerian brand managers how have you been coping with the whole Corona virus palaver? Nigel Hollis (Chief Global Analyst, Kantar) and Michael Umogun (Lead, Marketing and New Business Kantar Nigeria)

Mouka provides comfort to Nigerians, donates 700 mattresses

ouka, Nigeria’s manufacturer of mattresses and bedding products, has brought relief to victims of the Abule Ado gas pipeline fire explosion in Lagos with the donation of 200 mattresses. In the same vein, 500 mattresses were donated to Lagos State towards equipping its isolation centres used for the treatment of the coronavirus (COVID-19) pandemic. Commenting on the donation of 700 mattresses, the Chief Executive Officer of Mouka, Raymond Murphy, said in a statement, “The wellbeing of the Nigerian people is the reason

we are in business. Mouka exists to provide comfort to Nigerians and we stay true to our mission even at this period of national crisis”. The donation to Abule Ado victims was made through the Lagos State Government to affected families who are in dire need of assistance due to havoc wrecked by the pipeline explosion. The 500 mattresses for the isolation centres were presented to the Permanent Secretary, Ministry of Local Government and Community Affairs, Taiwo Olufemi Salaam, who represented the Commissioner of the Ministry, Wale Ahmed, at the State Secretariat Complex, Alausa.

COVID-19: Dufil makes donations to state governments

n times of crisis, particularly when movement is restricted, availability of food is an essential requirement for people generally but even more so for the vulnerable and under privileged. In line with its commitment to making life better for everyone, especially during this globally challenging period, Dufil Prima Foods, maker of noodles brand, Indomie instant noodles, has donated thousands of cartons of Indomie noodles as well as other food items to Nigerians through different state governments. The donation is to alleviate the challenges faced by many households in the wake of the coronavirus outbreak and to help solve the hunger induced problems occasioned by the lockdown. Speaking at the presentation of 10,000 cartons of Indomie noodles to @Businessdayng

Ogun State Government, the Group Public Relations and Event Manager, Dufil Prima Foods, Tope Ashiwaju, in a statement said the donation is to support the efforts of government at various levels during these challenging times. The donation to the Ogun State government covers distribution in Abeokuta, Ado Odo Ota local government, Ota and the isolation center in Ikenne.

Tuesday 07 April 2020

BUSINESS DAY

INSIGHT Day 2

Covid-19 and the Nigerian nation

An overview of the ongoing pandemic, the Femi Olugbile

CHALLENGES ersonnel and Facilities: Given the limitations in the availability of doctors, nurses and other medical and paramedical personnel in the nation, and the limited numbers of medical facilities generally, there is fear that the system could be quickly swamped and overwhelmed if Nigeria were to experience the kind of surge in numbers of ill patients that has been seen in USA, Italy and the UK. Specially trained personnel such as Intensivists, Anaesthetists and Critical Care Nurses who are normally required to run the most advanced lifesupport equipment are in very limited supply in Nigeria as a whole, though Lagos State has higher numbers than all the rest in its public and private healthcare space. Equipment and Consumables: Preparations for response to the pandemic in other countries have included a push to ensure a plentiful supply of face masks and other Personal Protective Equipment (PPEs) for staff, and to ramp up the numbers of highend equipment such as ventilators required for life support in critical situations. Not even the richest nations have quite the numbers of these item they have calculated as their need. New York State alone, with a population of eight and a half million people, has estimated that it would require up to 40,000 ventilators. In the United Kingdom, the workers in the National Health Service (NHS) are complaining daily about shortage of Personal Protective Equipment. The Lagos and Federal governments have taken measures to ensure a ready supply for local use. Unfortunately face masks that are useful both for medical staff and the generality of the public are not manufactured locally and have virtually disappeared from all local sources of supply. Hand sanitizers, due to market pressure, have been

priced out of the reach of most citizens. The Fear Factor: There is an understandable fear of the pandemic among the populace, despite the efforts of government agencies to educate and calm citizens by teaching them how to carry out the basic hygiene measures for their protection. There is wide-spread dissemination of falsehoods and conspiracy theories concerning the origin and course of the disease. Some of these rumours even attribute sinister intentions to ongoing efforts to develop a vaccine and will definitely be a factor in limiting the citizens’ acceptance of such a vaccine, if they are not addressed. THE PRIVATE SECTOR RESPONSE The involvement of the private sector in the country’s response to the CoVID 19 challenge was led by the dramatic announcement that Guaranty Trust Bank was going to build a hundred bed capacity Isolation and treatment unit, complete with a well-equipped Intensive care unit. The unit was delivered and ready for action within one week of the announcement. The gesture, as well as the accomplishment, provided a great morale boost to the generality of the population of Lagos, and also helped to convey a sense of can-do.

All of this fitted nicely into the calm professional manner in which the Lagos State in particular and its functionaries were pursuing the tasks of screening, targeted testing for case identification, contact tracing, isolation, and consistent surveillance of ‘persons of interest’. A spate of large donations from individuals and corporate organizations have been announced towards the efforts to combat the pandemic. The Dangote Foundation has announced its intention to build a large-capacity isolation centre

in Kano. Various persons, including a former Head of State, have announced the donation of buildings for conversion to use as Isolation Centres. There has not been a lot said or heard about the involvement of the private medical sector in actual or potential service provision. It is known that some members of the organized private health sector have been receiving training in case the country at some point is faced with a ‘surge’ that threatens to overwhelm existing public resources. The role they may play in such a

scenario has not been clearly mapped. It is most unlikely that their facilities could be converted to use as Isolation Centres, for the reason that there is a technical requirement that a facility that would be used for infectious disease must be appropriately constructed, equipped and certified for the purpose. Currently only government facilities such as the unit in Yaba, Irrua Specialist Hospital in Edo State and a few centres in the country are certified in this regard. However, collaboration could take place by way of private sector medical personnel volunteering or being ‘drafted’ where the need arises. Equipment such as ventilators and the personnel to operate them could also be ‘borrowed’ or ‘commandeered’ if the government considers that there is a desperate need in the nation. Evidence of good thinking in preparation for such a contingency would include compilation of a database detailing persons with relevant skills as well as an up to date inventory of relevant equipment in private hands. This is not in evidence at this time. It is quite possible that none of these measures will be called into play, but it is important to have the information well in advance.

Tuesday 07 April 2020

BUSINESS DAY

local response, and prospects for the future WHERE ARE THE GAPS? There is general agreement that the number of tests conducted so far across the nation – perhaps somewhat more than two thousand, is woefully inadequate. With only a few exceptions, such as the President and the Vice President, only people who have been exposed to a confirmed case and who themselves have symptoms are subjected to, or able to access testing. The tests are the gold-standard stationary ones done with the PCR machine. The turn-around time for results is more than twenty-four hours, and may be as much as two or three days, and each machine can only run a limited number of tests in a day. No ‘point of care’ ‘rapid’ testing is being done at present. There is a fear that some people with sub-clinical infections who evade screening or quarantine could be missed entirely and may be disseminating the disease. There is certainly a need for a decentralized, scaled-up testing regime for a number of reasons, one of which is to get a sense of the actual size of the existing burden of illness, in order the better to deal with it. In addition, there will be a requirement, as time goes on, to establish a protocol about the testing of medical personnel who treat infected patients. It is dangerous but necessary public service, as illustrated by the fact that over 60 doctors have already died in Italy, and there is an ongoing effort to scale up testing of medical personnel treating COVID-19 patients in the UK. THE PRESIDENT SPEAKS On Sunday 30th March, President Muhammadu Buhari finally made a national address to outline his government’s plans to fight the CoVID 19 war. Lagos, Ogun and Abuja would be put in lockdown for two weeks in the first instance, he announced. The Steering Committee which he had earlier set up under the headship of the Secretary to the Government, was hard at work, drawing up strategy and policy to combat

the menace. He wanted all resources, including donations from the private sector, centralized. He tried to end on a note of resolution and hope. He would do what he could to soften the economic difficulty of the lockdown, especially for the poor and underprivileged. Curiously, he talked about keeping the school feeding programme going, even where there were no schools open. LOCKDOWN Lagos is now in the grip of lockdown. It is an eerie, unaccustomed feeling to see and hear neighbours trying to make a life of sorts within the confines of their homes. Some people have compared it to the experience of ‘awaiting trial’ prisoners encountered on a recent visit to the Ikoyi Correctional Centre. OUTLIERS IN COVID-19 RESPONSE What is ‘best practice’ response to the COVID 19 pandemic? As illustrated by statistics of cases, deaths and recoveries earlier given, some countries are clearly coping better with CoVID -19 than some others. It may be helpful to look at some examples. China: The official COVID-19 figures for China to date (3rd April, 2020) are 83,269 confirmed cases, 3,322 deaths and 76,745 recovered. China, in the heat of the COVID-19 crisis did a number of things, some of which could only be done in an authoritarian society that is also at the cutting edge of modern Science. It put huge swathes of the country in a total lockdown for a protracted period. It massively scaled up physical capacity and knowledge to deal with the problem. The rushed and efficient building of the mega-hospitals, and the cadres of the People’s Liberation Army arriving in huge transport aircraft to shore up the medical personnel in Wuhan were the images people saw on television, but behind the scenes, Chinese scientists were sequencing and analyzing the genome of the virus, inventing test kits that gave results in a short time, trialing treatment

options, and rushing to be first out in the field with an effective vaccine. There is some criticism that China almost certainly withheld information from the world about the scale of the CoVID-19 problem, and that the figure of 3322 deaths is a massive underestimate. All the same China is gradually re-opening for business while the rest of the world is shutting down. The Chinese model deserves a look, for whatever it is worth. South Korea: The current figures (3rd April, 2020) for South Korea are 10,062 cases, 174 deaths, and 1,749 recoveries. The key defining feature of the South Korean response has been massive testing among the population. Covid-19 arrived in the country in January 2020 and up till the middle of February, there were only 30 cases. Then came ‘Patient 31’ tagged the ‘super spreader’, a lady who got infected, went to Church twice and visited a hospital and a restaurant, spreading the virus round. Within ten days, there were more than 2300 cases. South Korea reached a peak daily count of 909 deaths on February 29. For a brief period, it was the second most infected country after China. The country rallied by starting a massive programme of testing within the population, introducing ‘drive-through testing’ to the world. They shared information openly, aggressively innovated

to cut down testing times and developed testing kits that were quickly approved for use. They protected their medical personnel with personal protective equipment, giving them confidence to work. They carried out aggressive contact tracing using GPS and a mobile app. They put in place social distancing with routine use of face masks by the population, but did not carry out a full lock down, leaving many business activities able to proceed with caution. The country’s recovery is still work in progress, placing at number 15 on the ‘deaths’ list, number 15 on the ‘cases’ list, and close to the top on the ‘recovered’ list. Germany: Germany, like some other European nations, has been hit hard by CoVID-19. In the middle of March, it announced ‘radical measures’ to protect its population. These included nation-wide closure of bars, clubs, theatres, casinos gyms and other places of gathering, including Churches and even brothels. These were in addition to the closure of schools and borders. By then Germans had begun to fall ill and die in numbers, and the country was climbing high on the list of affected nations. Flight restrictions were introduced and gathering of more than two people were banned. There was a massive effort to increase antibody testing in the population. Chancellor Merkel controversially announced that she expected

that a full 70% of the German population would ,over time, test positive – not for illness, but for previous exposure to it, presumably conferring some immunity. Some authorities disputed this. The figure of 70% is significant. The ‘Reproduction Number (R0) of the corona virus SARS-CoV-2 is between 1.5-3.5 meaning each infected person passes the virus to more than two people, who then pass to another ‘more than two’ and so on. This is not as contagious as measles. If 70% of a population actually have immunity to the virus, hypothetically, either through direct exposure or vaccination, the population may acquire ‘herd’ immunity. Some public health experts have disputed that this could ever happen without vaccination. In any case, the Germans are talking about the possibility of issuing ‘Immunity Passports’ to people who test positive for antibodies, enabling them to return to work or school.

Femi Olugbile, a well respected doctor and health administrator, is also a prolific essayist. He pioneered the renaissance of the Lagos State Teaching Hospital where he was chief medical director for years and also served as permanent secretary for Lagos State Ministry of Health. Watch out for Day 3 tomorrow

Tuesday 07 April, 2020

BUSINESS DAY

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

New KWASU VC unveils plan ...NBA, IEDPU, 9 others laud Akanbi’s appointment SIKIRAT SHEHU, Ilorin

ustapha Akanbi, Professor of Business Law and the Vice-Chancellor of the Kwara State University, Malete, have unfolded his areas of focus upon assumption of duties in the institution. Akanbi, in an interview with journalists in Ilorin at the weekend, revealed that his administration in the state owned University would focus on students and staff welfare, attract funding and tap into Information Communication Technology (ICT). The former Dean of the University of Ilorin noted that state owned varsity like KWASU requires foreign funding to be able to grow research and learning in the institution, adding that he would also strive to help academic staff attend local and international conferences to widen their horizon and secure grant for them for research and innovations. The KWASU boss assured that he would also focus on adequate motivation of staff to enable them deliver optimally. He says: “I have a clear cut vision of what I want to do as contained in my vision and mission statements. But to simplify it, there are three things I’m going to be looking at. One; I’m going to ensure

Mustapha Akanbi

that the university is studentsfocused. This is because primarily, our job is to teach students and in turn to help the society. “Two; I will be looking at funding. In a state university, we need funding. Without adequate funding, we will not be in a position to deliver much. Three; I intend to look into Information Technology (IT). We live in an IT world. Already, the school has a solid foundation for IT, we intend to improve on it. “As you can see, with the Coronavirus challenge that we have, students are not in school but we can’t sit down. We will

have a vibrant and robust ICT learning -resource and we can still from our homes do teaching and research. “And of course, the people that would support me to achieve this mission are the staff, both academic and nonacademic staff. I intend to invest in their welfare. We are going to ensure that staff is well motivated, because if they are not well motivated, they would not be able to deliver,” Akanbi said. Meanwhile, no fewer than eleven prominent socio- cultural associations and professional bodies have hailed the appointment of Mohammed

UBEC Fund: FCT, 15 states yet to access • as 21 fully complied MARK MAYAH

o fewer than 15 of the 36 states and the Federal Capital Territory (FCT) are yet to access the 2019 Universal Basic Education Fund (UBEC) consolidated revenue for the development of their basic education sectors, BusinessDay investigations has revealed. Competent sources at the Federal Ministry of Education, Abuja who confirmed this development to our correspondent, stated that the fund mainly to strengthen partnership within the three tiers of government on the Sustainable Development Goals 4 (SDGs-4) According to him, “The federal government has addressed the challenges for accessing the Universal Basic

Education Fund using the Paris loan refund. Kwara State alone has over N7 billion having been unable to access the fund from 2014 to 2019. Other states like Anambra have N4.2 billion, Enugu N4.3 billion, Abia N3.8 billion, and Plateau N3.1 billion among

Adamu Adamu, education minister

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others. N73 billion was out of the over N112 billion allocated from the Consolidated Revenue Fund to UBEC under the 2019 Appropriation Act. The figure of un-accessed fund was high because the 2019 matching grant was actually due for access by state governments from 31st December, 2019. BusinessDay gathered that year 2019 is not unaccessed because fund cannot be access between 31st December, and January 2020. It is an amount that usually accumulates up to the end of the year, before people begin to access it. Our source also disclosed that UBEC ”is encouraging the other remaining states to ensure that they do the needful by submitting the relevant plans because we don’t want you to throw money at problems.

Mustapha Akanbi as the new and second Vice Chancellor of the Kwara State University (KWASU). The associations in separate press statements made available to journalists in Ilorin, the Kwara State capital, described Akanbi’s appointment as welldeserved and a right step in the right direction. They praised Governor Abdulrahman Abdulrazaq for putting the right peg in the right hole in the appointment of a new vice chancellor for the state owned university. The groups while acknowledging the intimidating profile and track record of achievements of Akanbi as a former chairman of the Ilorin branch of the Nigerian Bar Association (NBA), Dean, Faculty of Law and Director, Institute of Preliminary Studies, University of Ilorin thanked Governor Abdulrazaq. The associations expressed confidence in the ability of Akanbi to make KWASU truly Kwarans’ institution as against the past practice where those at the helm of affairs in the university were made to place premium on the interest of a few and those that appointed them. The associations that have applauded Akanbi’s appointment include the Ilorin Emirate Descendants Progressives Union (IEDPU), Balogun Gambari Youths Development Association, Nigeria Bar Association, National Institute of Legislative and

Democratic Studies (NILDS) MGIVIT, KWASU chapter and Christian Lawyers Fellowship of Nigeria, (CLASFON) Ilorin Branch among others. The IEDPU, in a message by its national president, Aliyu Otta Uthman, said that the appointment of Akanbi was well-deserved and indication of the resolve of the Kwara State government in putting right pegs in right holes. The umbrella body for all the socio- cultural associations in Ilorin Emirate saluted the sagacity of Governor Abdulrahaman Abdulrasaq, for approving the appointment of Akanbi, who it described as a refined scholar, foremost lawyer, seasoned university administrator and distinguished son of Ilorin Emirate. The Ilorin branch of NBA in a statement by its secretary, John Mayokun Dada, described Akanbi as an astute Bar leader and Senior Advocate of Nigeria who is well equipped for the task ahead, adding that “we pray that he will take the institution to a world class academic citadel.” The NILDS, Abuja, in a statement signed by Bright Edoba Omoregie (Prof), said:” I use this opportunity to thank the Executive Governor of Kwara State, Mallam Abdulrazaq Abdulrahman, for this appointment. “Sir, by this appointment you have taken away from us the best intellectual and role model we have in the Institute

and DLSS. “We are however, confident that MM Akanbi SAN will justify his appointment based on his academic and leadership sterling qualities.” Also, the MMGIVIT, KWASU branch statement on Akanbi’s appointment reads “We express our gratitude to the Executive Governor of Kwara State, His Excellency Abdulrahman Abdulazaq for given our University a proven Student centred administrator and intellectual giant to become our next Vice Chancellor. We wish to state that this is a wonderful appointment Your Excellency has made so far, if not the best for the growth and development of our University. “To our new VC, we’re happy to tell you that, you’re coming home. We pray to Almighty to guide, support and assist you through your stay and administration.” For its part, the Christian Lawyers Fellowship of Nigeria, (CLASFON) Ilorin Branch in a message by its secretary, J.K Atoyebi hailed Akanbi’s appointment and prays God to grant him all that is required to discharge his duties and move the university to its highest pinnacle. The state Commissioner for Tertiary Education, Science and Technology, Saadat Modibbo-Kawu, had last week conveyed Governor Abdulrahman Abdulrazaq’s approval of appointment of Akanbi as the new Vice-Chancellor of KWASU.

NUC accredits 13 new programmes for Anchor universities KELECHI EWUZIE

ational Universities Commission (NUC), has accredited 13 new degree programmes for Anchor University, Ayobo, Lagos. The programmes presented for accreditation are Bachelor’s Degrees in Accounting; Economics; Mass Communication; Business Administration; Political Science; Biochemistry; Chemistry; Computer Science; Mathematics; Microbiology; Physics; English & Literary Studies; and History & Diplomatic Studies. Eleven of the programmes were granted full accreditations, while Physics and Economics received interim

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status. Joseph Afolayan (Prof ), Vice-Chancellor, Anchor University, says the accreditation of the programmes is a further proof of the university’s culture for excellence Afolayan, while announcing the results of the University’s first accreditation exercise during an emergency Senate meeting recently lauded members of the Senate for their efforts during the exercise, noting that the result is an encouragement to the University and therefore urged them not to relent in their efforts toward achieving set goals. According to the university Don, “We thank God for this good news. We were well prepared for the exercise and we should be happy about @Businessdayng

the results and ensure that to do even more. Considering that the exercise was our first as a University, I am most delighted and appreciate all your contributions,” Also speaking while presenting the details of the results to the Senate, the Deputy Vice-Chancellor and Director of Academic Planning, Fatokun, J.O said the result is an encouragement to the University and everyone who contributed to the exercise. In his words, “To the glory of God, all our programmes were accredited by the Commission. Even more, none of the programmes had an overall score below 80 percent while many scored well above 90 percent.” Anchor University began operations in in 2017.

Tuesday 07 April, 2020

BUSINESS DAY

EDUCATION Out-of-school children: FG to commence open schooling in September, 2020 MARK MAYAH

he much awaited open schooling programme by the Federal Government is to begin next September as a means of providing “accessible and flexible” quality basic education to children in the country. Impeccable source at the nation’s coordinating body, Universal Basic Education Commission (UBEC), confided in our correspondent at the weekend that an order had gone to the committee on outof-school programme to gear up at commencing classes by September. Government, the source explained decried delay in tackling the high level of out-of-school children in the country, which is estimated at

Hamid Bobboyi, executive secretary, UBEC

10.2 million, saying the latest directive was to explore various challenges and best way to kick-start the programme, at drastically reduce the number of out-of-school children in

the country. He disclosed that the pilot phase of the programme would be set up in collaboration with the Commonwealth of Learning, Canada, in five

states of the federation before the end of the year. He noted a number of Nigerian children were out of school for different reasons ranging from inadequate educational facilities such as classrooms, poverty, ignorance among others, and that government has been developing various strategies of tackling the challenge. BusinessDay, however gathered that training of teachers to be deployed to various parts of the country where the problem of out-ofschool children is endemic, development learning resources and success of the programme, will commence immediately after the lockdown. ‘’The innovative open schooling which is an Information and Communication Technology (ICT) based ap-

proach being supported by the Commonwealth of Learning, Canada, which has experts in the open schooling model. ‘’The system is so flexible to the extent that children of farmers or herders as well as youth in rural communities who could not complete their basic education could enrol and complete their school without going to the four walls of the classroom. He said: “We thought we needed to introduce a strategy that can help us meet the needs of the Nigeria children, wherever they are and for whatever reason that they are not going to school. “One of those things, which have worked in different parts of the world, is the issue of open schooling. Not the old system where materials are just sent to people. This is IT-based innovative open

Students devise means to beat ASUU strike, COVID-19 holiday SIKIRAT SHEHU, Ilorin

equel to the Academic Staff Union of Universities (ASUU) strike and COVID 19 stayat-home order by Federal and States government, students have shifted paradigm as they engage in other learning opportunities. Some students have being home for about four weeks due to ASUU strike while others joined two weeks ago for COVID 19 Stay-At-Home order to prevent the spread of the deadly disease. BusinessDay’s encounter with some students of tertiary institutions, Secondary and Primary Schools in Ilorin, the Kwara State capital, revealed that most of them have diversified means of learning at home through internet and other ways to keep them busy and progress before the end of the indefinite holiday. Akinwale Kehinde, M.Sc students of Mass Communication, University of Ilorin posited that the holiday has given her opportunity to venture into other legal programs she has not had time to do. She says: I’m trying to catch up with my family again and I’m reading too. Since no one is allowed to go out. “I want to advise other students that those things they were not chanced to do before; now is the opportunity to do them. They could read

some other books apart from academics, ask more questions from their parents and have deep conversation that will bound them together more. “They could register for online courses and take online classes too. Most importantly, we read the holy book now with a different kind of understanding and follow the instructions there in.” Similarly, Ismahil Aderoju, undergraduate student of Kwara State University, explained that “Corona holiday is a good and bad time for me. It’s a good time because I’m using the break for something

productive and preparing more for my exams when we resume. “It’s a bad time because it has capsized my academic calendar and restricted my movement.” Lateefat Yakub, SS 3 student of Hassana Islamic College, explained she is using the break to develop herself saying, “I am reading at home and as well doing personal lesson. I am also using the holiday to help my mother in her business. “People should just stay in door to protect themselves from contracting the Virus.” Also speaking, Abdallah Ya-

hya Imam, a primary five pupil of Masha Allah International Group of Schools submitted that he has been reading his books, learning through computer and assisting his mother. He says: “I am happy staying in door with my parents and young ones; I am reading my books for the Common Entrance Examination. I am using my mummy’s computer to learn how to type on system and also helping her with house shores. I pray God to pack Coronavirus out of our country.” Speaking to BusinessDay, Amos Idowu (Dr), enjoined students to use the period to

study ahead to increase their knowledge. “Academically, students within the family should not use the opportunity for just watching television or playing games all the time. They should study ahead and read new books. After all, the primary, secondary schools and tertiary institutions have syllabus thus, they should use the opportunity to seek more knowledge; knowledge is wealth, there are online book they can download, read and that will increase their knowledge and experience,” said Idowu.

L-R: David Setonji Member Representing Badagry 11 constituency LAHA, Yomi Mayungbe Vice chairman Ikeja LG, Mojeed Alabi, executive chairman Ikeja LG, Idris Salako Comm. for Physical planning , Abiodun Tobun, Member Representing Epe Constituency 1 LAHA, Norah Olaosebikanauthor) ‘’ Eve’s Realities “ & husband, E. O Olaosebikan at the book launch in Lagos. www.businessday.ng

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@Businessdayng

schooling. “We now have the kind of facility that can enable you without internet connectivity, because the internet is one of the major constraints in this part of the world, be able to pour a lot of resources in certain gadgets that can help you disseminate this information to pupils and students in the various centres. “It widens and broadens opportunities and flexibility such that those children who help their parents in farming, in the afternoon when they return, they have the kind of educational facility that would take care of their needs. “Those who are herders, in the morning, they have to go tending their cattle, and by the time they come back in the afternoon, they have their own programme. The system is flexible,” he said.

Educationist urges FG to give incentives to private tertiary institutions MARK MAYAH

hancellor Oduduwa University, Ile-Ife, Osun state, Ramon Adedoyin (Dr) has called on the Federal Government to give incentives to operators of private tertiary institutions to encourage them and boost their support for the sector. Adedoyin who is the founder of the institution said these schools are helping helping the government to train its citizens. Besides, he noted that since government pays the bill for students in public institutions in the country, it must encourage those in private universities to augment the cost of their training. Adedoyin who spoke exclusively with BusinessDay in Lagos said there was need for government to adequately fund the sector. According to him, “Education is a right and not obligation. In many countries, education is viewed as a good investment in national development as it is expected that the education system will produce the quality and quantity of human resources required for the economic growth of the country.

Tuesday 07 April 2020

BUSINESS DAY

Airline staff in an empty Hong Kong International Airport last week. Check-in clerks face heightened job concerns © May James/Barcroft Media/Getty

Frequent flyer: Spare a thought for those who can’t work from home The airlines and hotels that look after their people now should be rewarded when the crisis eases

n the first week of March, the FT person who assesses the safety of our travel told me my planned trip to Abidjan was “low risk”. At that stage, Côte d’Ivoire had no confirmed coronavirus cases. There were no more than a handful in West Africa. That evening, the Africa CEO Forum, where I was to be a moderator, called the event off. And here we are, at the end of March, with gatherings cancelled, cities in lockdown, aircraft parked and the biggest closure of national borders since the second world war. A couple of people have told me, with grim satisfaction, that the grounding of business travellers is an overdue reckoning and that when this is over, we can run our economies locally and end the climate-destroying flights that accompanied globalisation. How we return to the skies is certainly a discussion for the future, but business travellers are not the ones suffering. We are,

mostly, fine. We have jobs we can do from comfortable homes. We can Zoom, Skype and Hangout. If we lose our jobs, they have generally left us well provided. The casualties are the people whose working lives have smoothed our way: the checkin clerks, the security staff, the lounge attendants, the cabin crew, the hotel receptionists, the cleaners and bed-makers.

There are others we see less of but who make our journeys possible, such as baggage handlers and maintenance staff. All these people have two things in common: they are poorly paid and they have to be physically present to do their jobs. No working from home for them. There may be alternatives for the conference providers. I expect many events to recre-

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As the weeks go by, we can focus on those that have made the effort to soften the blow for their staff. A day will come when we can reward them with our custom

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Michael Skapinker

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ate themselves online. It won’t provide work for those who line up the chairs, pour the coffee and hand out the biscuits, but it will give some employment to the conveners, the briefers of speakers and the technical staff. For hotel and airline workers there is no such comfort. Their bad news has been overwhelming. The German government said hotels should no longer offer overnight accommodation. British Airways chief executive Alex Cruz has told staff to expect job cuts. Virgin Atlantic has asked its employees to take unpaid leave. The International Air Transport Association said the majority of airlines worldwide faced running out of cash within two months. What will happen to these people who lose their jobs? Unlike restaurants and pubs, which in the UK are being allowed to turn themselves into takeaways, it is difficult to see what alternatives there are for airline and hotel workers, although my colleague Izabella Kaminska has proposed that cabin crew, first-aid trained @Businessdayng

and alert to dealing with emergencies, could assist health workers. What can those of us who have travelled for years do for those who have conscientiously and courteously served us? Any charitable contribution we make would be confetti in a hurricane. Some governments may help, subsidising people’s lost wages as the UK’s announced last week. But not all governments will or can. What we can do is keep an eye out for those travel providers who find a way to treat their staff decently. The airlines will say they are not in a position to do much for their workers, but the largest US carriers have spent vast amounts over the years buying back their own shares. Are you aware of any airlines, hotels or travel groups that are finding generous and innovative ways to look after their people? If so, let us know. As the weeks go by, we can focus on those that have made the effort to soften the blow for their staff. A day will come when we can reward them with our custom.

Tuesday 07 April 2020

BUSINESS DAY

Business schools scramble as demand grows for online MBAs Flexibility and lower fees appeal — but not all providers are competing on price Jonathan Moules

he future of the MBA is digital. While the number of applications for places on campus-based courses has declined globally for the past two years, demand is up for most online MBAs. Online MBAs outgrew all other professional MBA programme types in the US in 2019, according to the applications data gathered each year by entrance test administrator the Graduate Management Admission Council (GMAC). “The shift is from all forms of physical study to online,” Sangeet Chowfla, GMAC president, says. “Online gives new options for people who used to go for the part-time evening or weekend programmes as well as the new generation who have grown up digital.” There is some evidence that online MBAs are cannibalising campus-taught courses. The MBA.com Prospective Students Survey last year found that 42 per cent of those considering parttime study were also considering an online MBA, up from 32 per cent in 2015. However, it is also true that

online programmes are drawing in people who would never previously have considered a business education, either because of the flexibility offered by being able to study wherever and whenever you like or because of the lower cost of such courses. “The demographic of the typical online student is older and more experienced than campusbased students,” Mr Chowfla says. “Therefore it cannot be just a case of online courses taking away demand from campusbased courses.” Business schools are reacting by increasing their online MBA offerings. Five years ago just 20 per cent of the institutions accredited by the Association to Advance Collegiate Schools of Business (AACSB) that reported offering an MBA programme included an online option. At the end of the last academic year, this had grown to 35 per cent. “Learners demand more options, which is why we have also seen a growth in specialist, accelerated and part-time masters programmes,” says Juliane Iannarelli, AACSB chief knowledge officer. Schools, she adds, have become better at delivering online education, sometimes with outside assistance. “[They] are inwww.businessday.ng

vesting in the technology to provide these programmes but there are also many more support

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The reason for this is that the economy is doing very well. People are saying, ‘I can get a great experience on an online MBA course. Why should I take two years out and forgo the salary for fulltime study?

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providers to help them deliver content online through learning platforms such as Coursera and 2U.” Many of the new providers are experimenting with offering online MBAs at a lower cost than their campus-based courses. These lower price points mean that people who previously could not justify the expense of business school are enrolling. However, online MBA providers do not compete on price alone. Many have deliberately kept their online MBAs at the same price as campus-based tuition. Take, for example, Indiana University’s Kelley School of Business, whose very successful online MBA was able to expand its intake from 276 in 2014/15 to 454 in the current cohort. Yet the tuition fee of $74,520 for the 54 credit hours required to complete the course is comparable with that for a residential MBA at a school such as the University of Wisconsin-Madison or Texas A&M. What Kelley has discovered is that its online MBA is attracting both students who would only want to study online and those who might also consider a campus-based programme. “More and more students @Businessdayng

are coming into the online space who would previously have studied full time,” says Ash Soni, executive associate dean for academic programmes at Kelley. The typical online student is older and more experienced than campus-based students “The reason for this is that the economy is doing very well. People are saying, ‘I can get a great experience on an online MBA course. Why should I take two years out and forgo the salary for full-time study?’” One of the reasons why Kelley has not reduced the cost of its online MBA is that building the programme and the delivery mechanisms has involved a significant investment. The school is spending $10m creating state-of-the-art studios and virtual classrooms for its online students, according to Mr Soni. “The biggest challenge is to figure out how we can meet the needs of all our students,” he says. One characteristic of the online MBA students is that they give regular feedback to their teachers, perhaps more than for the full-time course, according to Mr Soni. “That is a challenge but also an opportunity,” he says.

Tuesday 07 April 2020

BUSINESS DAY

feature

As FirstBank spotlights COVID-19 frontline heroes, Nigerians show appreciation

n an unprecedented show of appreciation to Nigeria’s healthcare workers, at exactly 10pm on Friday, all staff of FirstBank transformed the social media world and got many Nigerians to do same, through their various Profile or Display Pictures, using unique photo messages dedicated to healthcare workers, who are battling the coronavirus pandemic in the frontlines, with a hash tag #FirstBankSalutes. In one of the pictures captioned ‘We salute our frontline warriors’ a healthcare worker is seen dressed in personal protective equipment, geared up for the daunting task at hand and a message underneath the picture read: “no capes, just lab coats. No superhuman capability, just dedication, strength and compassion. As we play our parts by staying at home, we thank our medical professionals for being our Avengers”. Another picture captioned ‘The world called and they responded’ has the picture of a nos e/ mouth mask and a stethoscope. The message underneath read: “There are many ways to say thank you to the medical professionals tackling COVID-19 and putting you first like FirstBank. One of them is to stay at home, another is to share this message with someone” Indeed, the ongoing battle to contain the novel coronavirus pandemic is nothing short of an epic war raging on a global scale, with healthcare workers at the frontline. Many philanthropists and organisations including FirstBank have donated various sums and healthcare equipment, beefing up needed arsenal to combat the pandemic, however morale boosters in the form and magnitude of the FirstBank appreciation initiative is a first in Nigeria. “Healthcare workers are essentially the main response pillars that we

Dr. Adesola Adeduntan -CEO, FirstBank

have,” said Jan-Eric Larsen, from Operations Support and Logistics at the World Health Organization (WHO) Regional Office for Western Pacific in a video tweet. “Without the healthcare workers, we won’t be able to stop this transmission in time.” According to statistics from previous outbreaks of infectious disease, and in other countries where the current pandemic arrived earlier, health-care workers experienced a disproportionate share of infections, due to many factors, but firstly they were put at risk by the nature of their jobs. According to President of the American College of Emergency Physicians, William Jaquis, “As emergency physicians, we know the risks of our calling.” The WHO also noted that being at the front line of any outbreak response exposes healthcare workers to hazards that put them at risk of infection with a pathogen (in this case COVID-19). Other hazards listed by WHO include: long working hours, psychological distress, fatigue, occupational burnout, stigma, and www.businessday.ng

physical and psychological violence. Revealing why healthcare workers selflessly put themselves in harm’s way to help save others, Bonnie Castillo, head of the 150,000-member National Nurses United, the largest nurses union, said “Nurses take risks every day because they’re willing to do that, they’re called to do that, and they want to do that.” However, that is not to say that healthcare workers don’t exactly fear for their lives, they do. Which is why they demand that adequate protective equipment be made available to them, as they go into the thick of battle, where risk of contact with the pathogen becomes extremely high. Doctors have been reporting increased anxiety, fearing they will not only expose themselves to the virus, but also their families and their communities. This is because providers risk contracting the disease as they try to treat patients who are ill, but not yet diagnosed. The stark reality of the battle front in this war against the COVID-19 pandemic, is exactly what it is – scary. And

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only the brave can confront it. These courageous heroes after putting their lives on the line for others, could end up being isolated from family and friends, in a world where hospitals can be stigmatized as “incubators of infection”. A new study examined the mental health of nearly 1,300 healthcare workers in China who dealt with COVID-19 patients, looking at symptoms of depression, anxiety, insomnia, and distress. Specifically, frontline healthcare workers were 52.0% more likely to have symptoms of depression, 57.0% more likely to have symptoms of anxiety, 60.0% more likely to experience distress, and almost three times more likely to have insomnia than those who were not on the frontline. These workers may be at a heightened risk of psychological distress and other mental health problems, write the authors, due to the ever increasing number of COVID-19 cases, the overwhelming workload, an information overload, and insufficient personal protective equipment and drugs. As Nigeria sees the number of infected cases going up amid efforts to track exposed contacts, the bravery of the men and women in the healthcare sector, who are up in arms against the dreaded COVID-19, must be appreciated, considering that there is still no end in sight to the scourge yet. Lots of support (financial and material) have flowed in from many quarters since the index case was announced 27 February, the tally of infected cases now stands at 210 as at 04 April, however little to nothing has been done to boost the mental morale of healthcare workers in Nigeria until this initiative by FirstBank. According to Siddharth Chatterjee, United Nations Resident Coordinator to Kenya: “We must do everything to support health workers who, despite their @Businessdayng

own well-founded fears, are stepping directly into COVID-19’s path to aid the afflicted and help halt the virus’s spread. “Like soldiers, health workers also face considerable mental stress. It is often forgotten that as humans, they feel the sorrow of loss when their patients succumb to the virus. They too have families, and so will also naturally be fearful that the virus might reach those they love most. As FirstBank’s Chief Executive Officer, Dr. Adesola Adeduntan, remarked in a broadcast message, “Selflessness and resilience in the face of adversity stand us out and are the hallmark of heroes.” He applauded health workers; doctors, nurses, all hospital staff and indeed everyone else providing essential services; for giving the best of themselves continuously, in delivering essential care in the face of this global challenge presented to humanity, at great and grave personal risk. “All of us at FirstBank acknowledge and appreciate the efforts of our unsung heroes, the front line Nigerians who toil day and night to care for us and keep us all safe as we collectively fight this battle we face. We add our prayers to that of all Nigerians and lift you up at this time with all we can offer. “To that end, it is our hope that our ‘Thank you’ in its simplicity can go some way to expressing our deep and profound gratitude in recognition of your service to humanity,” he said. In appreciating these brave healthcare workers, Nigerians should not forget these words of Chatterjee: “COVID-19 will not be the last dangerous microbe we see. The heroism, dedication and selflessness of medical staff allow the rest of us a degree of reassurance that we will overcome this virus. “We must give these health workers all the support they need to do their jobs, be safe and stay alive…”

Tuesday 07 April 2020

BUSINESS DAY

BDTECH

In association with

E-mail: jumoke.akiyode@businessdayonline.com

Myths on 5G and health hazards rian cities towards the end of 2019. Again, Olusola Teniola, president of Association of Telecommunication Companies of Nigeria (ATCON), the umbrella association of all telecoms companies in Nigeria confirmed that; “There has been no issuance of 5G license to any of our members to build and deploy 5G network in Nigeria by the Nigerian Communications Commission (NCC). However, what has happened recently was just a trial of the 5G network by one of our members which was well supervised by the telecoms regulator.” Telecom operators do not need licenses to test run in their premises. A license will only be issued for commercial rollout of this service.

Jumoke Akiyode-Lawanson

n the last few days, information suggesting that 5G network could be linked to the spread of coronavirus has been trending on social media platforms including WhatsApp, Facebook, Instagram, Twitter, LinkedIn, and others. Here are few explanations to clarify the myths surrounding the deployment of 5G technology and human health hazards. • That 5G radiation is hazardous to human health: The fear attributed to mobile technology is that the signals (waves) are injurious to humans. Meanwhile all mobile signals most fall within microwaves (extreme end of radio waves) which are non ionising radiations. Ionising radiations like x-rays and gamma rays have far higher frequencies and exposure to human body may be injurious. However ionising radiations are not used for mobile telecommunication. Communication networks of 2G, 3G, 4G , 5G and others to come in the near future, are generally in frequencies of the order of Giga Hertz (GHz or 10⁹ Hz). Meanwhile, the bulk of energy from the sun (solar radiation) is in the UV frequency range (i.e.10¹⁵ Hz). It is therefore ridiculous to think that human beings who have been exposed to UV radiation from the sun over the ages, are now under any threat by a radiation of energy that is over one million times less energy than UV radiation. Also, the World Health Organisation (WHO) had stated clearly that there is not yet any conclusive scientific evidence to the effect that there are adverse health effects caused by telecommunications infrastructures to humans with respect to exposure to the non-ionising radiation emitting

by telecoms base station. • That the Federal Government of Nigeria is clueless about health implications of 5G: There is no application of a technology that is not under any regulatory control by international bodies made up experts from all parts of globe. However, the Nigerian Government commenced a 3-month study trial on the 25th of November, 2019 in order to critically review and study the health and security implications of deploying 5G in Nigeria. Ali Isa Pantami, minister of communication and digital economy said; “As part of the study trial process, I directed the Nigerian Communications Commission (NCC) to ensure that a team of experts, security agencies and other stakeholders fully participate in

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the trial process and my office also invited these agencies to participate in the trial; and trial process has been concluded and the study and reporting process is currently ongoing.” According to him, the federal government of Nigeria has not and will not issue any license for 5G deployment at the expense of the health and welfare of its citizens. “Government will not act on the speculations only, but rather we will take an informed decision on 5G after due consultation with experts and the public,” he said in a statement sent to BusinessDay. • Only countries that have deployed 5G are grappling with the spread of Covid-19 : This is another trending myth which has been dismissed by health and technology experts, as

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many countries have rolled-out 5G between 2018 and 2019 and there was no pandemic. The first trial of 5G was 2017 in Poland, yet no virus originated from there. Nigeria also became the first country in Africa to trial 5G in November 2019, and no virus originated from Nigeria, instead, its first case of coronavirus was imported by an Italian man who flew into the country. • That the FG lied about not issuing any 5G licences to any network operator in Nigeria: A lot of people are confusing the 5G trial with deployment of 5G network in Nigeria. The minister of communication said at the weekend that No 5G license has been granted in Nigeria. However, some Nigerians said this was a lie because MTN carried out a 5G trial in its office premises in three Nige-

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That 5G is a tool for the government to make money: This is another trending myth, as people have suggested that the Nigerian government want to take money from foreign investors and damn all consequences. However, this is untrue, as 5G is a transformational change from 4G, and has the potential to provide twenty times faster data speeds and carries a massive amount of data for a large number of simultaneous users. 5G will support businesses’ innovative ambitions and create new markets, transforming supply chain management and creating smarter, more efficient manufacturing. It is also a fundamental platform for the Internet of Things (IoT) - the rapidly expanding number of devices that collect, transmit and share data via the internet. Businesses will rely on the IoT to cut costs, build efficiencies, and grow their bottom lines. Augmented reality (AR), Virtual Reality (VR) and other 5G capabilities are endless and the country cannot afford to miss out on future technologies like driverless cars, remote surgery, IoT, etc., that the ultra low latency of 5G will allow.

Tuesday 07 April 2020

BUSINESS DAY

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

MTN Nigeria unveils Y’ello Hope Package to address the impact of COVID-19 Jumoke Akiyode-Lawanson

s more people nationwide brace for the immense human, economic, and social cost of the COVID-19 pandemic, MTN Nigeria and MTN Foundation says they are committed to doing all they can to help customers stay connected and support efforts to contain the outbreak. “COVID-19 is a new test of our collective strength. In response, we have deployed the first phase of a broad set of investments in support of the national effort to contain it. Including: Supporting government response efforts, Supporting government (Federal and State) with communication systems, analytical response management and risk profiling and giving over N500 million worth of airtime, data and analytics, through the Nigerian Governors’ Forum (NGF) in support to State governments to facilitate communications during travel restrictions,” the company revealed. According to MTN, over N1.4 billion worth of airtime, data and devices for connectivity support has

been distributed to frontline health agencies including NCDC. The telco has also made available free data access to be used to access websites with validated information on COVID-19 and given customers up to 300 free SMS per month, ensuring they can communicate with loved ones. MTN has partnered with Ayoba, a messaging OTT provider, to grant free daily data access to its subscrib-

ers and free money transfers using the Momo Agent Network from Y’ello Digital Financial Services. “During this extraordinary time, it is vital that we are able to stay connected to the people we love, and to the tools and information we need to live and work. We understand this, and recognise the immense importance of reliable telecommunications services during this period and have taken the necessary steps to

ensure that the services we provide remain available to our customers, in spite of the disruption. This is why our initial priority has been to focus internally on our systems, processes, structures,” MTN said in a statement. Despite this, it is important to understand that networks have come under unprecedented pressure as demand has grown rapidly. While all networks ensure there is significant redun-

Tecno launches Sony chip enhanced Camon 15 series ...Unveils Wizkid as brand ambassador Jumoke Akiyode-Lawanson

ecno mobile has released its new camera phone, Camon 15 series, through an online launch event which became a milestone in the smartphone industry as the first online product launch in Africa. The online launch themed “Magic of Unseen” was brief but the content was extremely rich: Tecno Camon 15 unveiling its Sony camera and the trademarked TAIVOS™ technology, official spokesman, Wizkid’s appearance, largest flip book with Guinness World Records ™ Title, and much more. As Nigeria’s most famous performer and a global icon in the music industry, Wizkid is a recognized pop culture sensation. Wizkid’s success runs side-by-side with the emergence of Nigeria’s mobile entertainment market. Stories like Wizkid’s illuminate the

possibilities that are offered to both producers and consumers especially with the development of digital entertainment, not to mention that this time, Camon 15 Premier’s commercial was supported by a production team from Hollywood. Wizkid who was all smiles while working on the Camon 15 Project had this to say when he was asked why he chose to become Tecno’s ambassador; “My team and I had series of meetings where we looked at the history of Tecno and we saw something undeniable. There were similarities in both of our personalities. Tecno has relentlessly risen through the ranks over the years, just as I have. We both have risen www.businessday.ng

beyond obstacles and are now global; creating opportunities for others and reminding Nigerians that they are capable of achieving and becoming whatever they desire to be. TecNo and I are indeed for Nigerians.” One big surprise during the event was that Tecno also brought a 1.1m Wizkid portrait poster photographed by Tecno Camon 15 Premier, which was stunningly crystalclear despite being scaled up to almost two meters in height. Thanks to the product’s brilliant high definition, armed with a SONY camera, and 8x zoom, every detail was perfectly captured and vividly displayed. As a pioneer in the smart-

phone industry, Tecno Mobile says it’s always committed to bringing latest technologies and cutting-edge smartphones to its global users. The first online product launch is undoubtedly another new breakthrough of what Tecno Mobile brings to us. The new technologies and applications displayed a hands-on taste of what you can achieve with a smartphone camera, powerful imaging hardware, and a device designed to deliver unprecedented performance for mobile photography fans. The Tecno Camon 15 Premier will retail for 95,000 only and the Camon 15 will sell for 62,500 when they both become available in the Nigerian market. However The company says you can now pre-order the Tecno Camon 15 Series by sending this text “pre-order Camon 15” to +2349036438365 on WhatsApp to get details of how to order.

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dancy in place to support peak periods, the level of demand consistently seen exceeds those levels and so, with the telecoms regulator, policymakers and colleagues in the industry, MTN says it is focused on increasing capacity and sustaining that capacity where it is most needed. Y’ello Digital Financial Services subsidiary has suspended transaction fees for all money transfers using the MoMo Agent Network. Recognising the challenges currently faced by small businesses at this time, MTN - which serves about 2000 SMEs, has also provided all SME customers of its enterprise business with one less thing to worry about: 30 days grace on their March invoices. SME’s unable to pay March invoices will enjoy uninterrupted services through April. This ‘grace period’ is aimed at mitigating the impact of the shutdowns on small businesses, which are the engine of our economy. It will be further assessed as the situation evolves. “Finally, we understand that access to telecommunication services is only one aspect of the solution that Nigeria needs. Access

to healthcare, including the ability to identify and contain the infection, is vital. That is why the MTN Foundation has committed N500 million towards addressing emerging medical needs,” MTN said. Ernest Ndukwe, chairman MTN said; “The threat that COVID-19 represents to Nigeria requires an unprecedented response from the public and the private sector. We must all work together to develop and deliver the solutions that will allow us to contain this threat and protect the most vulnerable in our communities across the country. This first phase of support is targeted at the interventions that we are best positioned to deliver at this stage. As the situation evolves, we are fully committed to deepening and extending these commitments in order to provide all the support we can to the government, and to our people. It is only by working together, that we can overcome this challenge. I would like to take this opportunity to recognise the collaborative spirit with which all stakeholders are working to contain COVID-19.”

COVID 19: StarTimes offers E-payment service for customers Ben Gilbert

igital pay-TV company, StarTimes Nigeria has urged its customers to use the 24/7 E- payment system platforms and its streaming mobile app, StarTimes ON for their subscription. This, according to the company is due to the prevailing circumstances that have forced many across the African continent to adjust to new ways of living and working while many have been required to spend more time at home with their loved ones. Speaking on this initiative, the company stated that “it is obvious that Nigerians have been asked to stay at home due to the COVID-2019 pandemic, and given the concerns about our loyal customers and the need to recharge their decoder when their subscription expires, We have advised the use of @Businessdayng

‘StarTimes Easy Recharge’ and the E-payment service platform at the convenience of their homes. The company further explained that “Subscribers are advised to avoid handling of cash at this critical period to avoid contracting or transmitting the virus. Customers can recharge, renew, change bouquet, or check expiry date by using the StarTimes App. While the other web payment system like; Quickteller, Paga, GTBank, Stanbic, Baxi, and Opay are for payment only. According to the company, “StarTimes will keep contributing to making people safe during a special time. We are also working at ensuring that our subscribers are also provided with entertaining content towards ensuring that they are warmly entertained during the stay at home period as we have also made provisions for more entertaining content through our OTT platforms and mobile app.

Tuesday 07 April 2020

BUSINESS DAY

Investments

ENERGY INTELLIGENCE

Market Insight Companies Commodity Tracker Policy

OIL

GAS

PETROCHEMICALS

POWER

8 things we learnt from NEITI latest report innovative ways of optimizing the utilization of existing refineries.

DIPO OLADEHINDE

igeria Extractive Industry Transparency Initiative (NEITI) released its new audited report few days which showed Nigeria recorded a 55 percent increase of $32.63 billion from the oil and gas sector in 2018. Here are eight major takeaways from the report. Delay in remitting proceeds from net domestic crude sales The audited NEITI admitted that It is evident that the Nigeria National Petroleum Corporation (NNPC) consistently delayed in remitting sales proceeds from crude oil proceeds to the federation account. The delay sometimes ranges from 21 days to 55 days. NEITI estimated the opportunity cost of the delay to around N17.5 billion while also recommended that the NNPC remits into the CBN/NNPC Crude Oil and Gas Revenue Naira accounts every month. Unnecessary deduction A total of N889.531 billion was deducted from the domestic sales proceeds in 2018. These deductions include N722.257billion for under-recovery of imported petroleum products, N28.329billion for crude and product losses and N138.945billion for pipeline repairs and maintenance cost. This represents 39percent of the N2.295 trillion total domestic sales for 2018.

Crude Oil Sales Proceeds from NNPC Crude Oil Sales Proceeds From the total crude oil volume of 255.546 million barrels lifted by NNPC in 2018, actual sales were 255.313million barrels valued at US$18.184 billion. “The difference of 233 thousand barrels between volume lifted and actual quantities sold has been explained as sales accounted for in 2019,” NEITI said in its report.

Outstanding Liabilities The report reveals that many companies had outstanding liabilities as at 2018- year-end while also noting that the nonpayment of these funds as at when due resulted to a revenue loss to the Federation (in both absolute terms and opportunity cost on commercial terms). NEITI recommended that respective government agency intensify efforts to recover the debt. Crude oil theft increased by 46% In 2018, Nigeria lost a total of 53.281million barrels valued at $3.837billion (applying an average price of $72.01) to crude oil theft and sabotage. This is an increase

of 46.15percent when compared to 2017 volumes of 36.457million barrels. For instance, SPDC lost about 57 percent of its total production of 62 billion barrels in 2018 to crude oil theft, Chevron lost about 2.6 billion barrels from its production 62.8 billion barrels. Seplat lost about 1.7 billion barrels from its total 2018 oil production of 8.7 billion while NewCross lost about 1.1 billion barrels from its total oil production of 6.1 billion. Joint Venture gathers momentum A further breakdown shows that the JVs contributed to the highest production of 315 million barrels, followed by Production

Sharing Contracts (PSCs) which achieved 270.6 million barrels. Others like Sole Risk, Marginal Fields and Service Contracts accounted for 92.2. million barrels, 22 million barrels and 1.3 million barrels respectively. The report also shows that the total crude oil production for 2018 was 701 million barrels which increased by 1.5percent when compared with the 690 million barrels achieved in 2017. Under-utilization of the National Refineries NEITI said the refineries operated at only eight percent of installed capacity in 2018 while also recommending that the Federal Government should evolve

Revenue from export crude oil almost double Thanks to the higher oil price, Nigeria realized almost twice of what it made last year of $4.022billion (2017: $2.721billion) from the sales of federation export crude oil of 55.858million barrels (2017: 50.246million barrels). From the total export sales proceeds of $3.7billion received in 2018, 95.36% ($$3.577billion) went to various JV Proceeds accounts for the funding of Cash-call. The balance of 4.6% (US$174.175million) paid into JP Morgan Chase crude oil revenue (dollar) account which was eventually swept to the Bank for International Settlements for onward transfer to the Federation account. In addition to the sales’ proceeds, $217.813million was earned in the year from Insurance Claims, SPDC/ NNPC JV-Ullage Revenue, Over Riding Royalty Interest among others.

Four critical events that will shape Seplat’s 2020 production Full deregulation, not monthly price preview is solution to downstream woes DIPO OLADEHINDE

o effectively solve the challenges bedeviling Nigeria’s downstream sectors, this period of lower oil prices has presented the federal government a golden opportunity to implement full deregulation rather than monthly pricing template. According to the Major Oil Marketers Association of Nigeria (MOMAN), the present situation allows the government to deregulate the market. For the second time in two weeks, the Federal Government reviewed the petrol price downward to sell at N123.5 per litre effective April 1, 2020. If the oil prices maintain the upward movement, having risen to $34.11 at the weekend, and going by moves by Organisation of Petroleum Exporting Countries (OPEC) and allies to agree on a deal, the relief on the pump price of petrol might be a short one, as government might have to revert to the pre-existing template of N145 per litre. The Federal G overnment has remained the sole importer of petrol through the Nigerian National Petroleum Corporation (NNPC), which equally swaps

crude oil for the product. Some stakeholders have raised concerns about the sustainability of monthly pricing template, considering that marketers stock products to meet demand and uncertainty in price affects the margins from the business. “Setting the price is wrong, Government needs to take their handoff, the laws of demand and supply should reflect in the pump prices,” professor of economics and former president of Nigerian Association for Energy Economics (NAEE), Wumi Iledare, said. www.businessday.ng

Iledare noted that government must take advantage of the current development to liberalize or restructure the market to readjust itself going forward in proportion to relate changes in crude oil prices and exchange rates. Last year alone, Nigeria spent a whopping N3trillion importing about 18 billion litres of petrol, while the nation struggle with poor refineries. Despite operating below full capacity, data obtained from the Nigerian National Petroleum Corporation showed, the nation’s ailing refineries lost a total of N376.56billion in the last three

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years. Charles Akinbobola, an energy analyst at Sofidam Capital insisted that the arithmetic used in the current calculation was biased, particularly given the current price of oil price at the international market. “The arithmetic of the pricing of petroleum products is not clear. At about $60/barrel, price per litre, it was N145. At about $25/barrel, price per litre, it is N123.5. Good as the reduction is, it cannot be described as a dash,” Akinbobola said. Independent Petroleum Marketers Association (IPMAN) on April 1 said its members would not comply with the new N123.50k per litre price of petrol until they exhausted their old stock. “The last time the Federal Government reduced the pump price of the product from N145 per litre to N125 per litre, our members nationwide lost over N5.5 billion as a result of the sudden reduction,” Bashir Danmallam, IPMAN chairman said in a press conference in Kano. Minister of State for Petroleum Resources, Timipre Sylva, who spoke after a Federal Executive Council meeting last month, said that President Muhammadu Buhari reduced the pump price of petrol to enable Nigerians benefit @Businessdayng

from the crash in global crude oil prices. The outbreak of coronavirus across the world has forced the international oil market to a near standstill, leaving crude oil price to plummet from around $60 per barrel to about $25. Over the years, international firms have pulled out of Nigeria’s downstream sector as government control crimps margins and took away the shine from a once buoyant industry. It costs about N200 million to build a new petrol station, but the margins are no longer enough to sustain the sector with many dealers going burst or facing massive debt pile. Leading consulting firm PricewaterhouseCoopers (PwC) said Nigeria as the largest market in Africa offers unique opportunities for investment in the petroleum downstream sub-sector. “ H o w e v e r, t h e g o v e r n ment needs to create the necessary business environment through price liberalization and strong independent regulation. In addition, challenges around pipeline infrastructure, technology, supply consistency and capital need to be addressed,” PwC said in its report titled “Nigeria: looking beyond oil.”

Tuesday 07 April 2020

BUSINESS DAY

ENERGY INTELLIGENCE Global gas market under threat from Coronavirus outbreak ISAAC ANYAOGU

lobal demand for natural gas is being impacted by the Covid-19 pandemic, and although it will not be curtailed to the same extent as oil, Rystad Energy, an energy intelligence firm estimates that international gas prices will reach lower averages than previously expected in 2020 raising concern for planned gas projects including the Nigerian LNG Train 7. Prices had already been low due to a glut of liquefied natural gas (LNG) in the market, and it will take years before the virus’ effect fully dissipates. Prices in Europe (TTF) for 2020 are now forecasted at $3.2 per million British thermal unit (MMBtu), a drop of $0.62 per MMBtu from our February forecast. The price forecast for Asian Spot prices has been revised down to $3.80 per MMBtu. The lower forecast is based on the weaker demand seen globally throughout the year as a result of the lower commercial and industrial activity, which will exacerbate the looseness in the market. Prices in 2021 and 2022 have also been revised down on lower economic growth and ample LNG supplies. Given the recent drop in oil prices and Rystad Energy’s downward revision in the oil price forecast, our oil-indexed price has also been revised down. Our new oilindexed price forecast for 2020 is $7.45 per MMBtu (-4%). The spread of Covid-19 has significantly impacted the global LNG sector, including the operators of the LNG regasification terminals. Globally, most of the upcoming LNG regasification terminals expected to start operations in 2020 are located in major demand centers in Asia such as China and India. Most of the Asian countries typically import majority of their LNG from traditional exporters such as Australia and Qatar. Delays in start of operations of these terminals can in turn can affect

the plans of LNG exporters, who might have signed contracts for supply to these terminals. In Asia, China has been the most-impacted country by coronavirus resulting into weakened gas demand and reduction of LNG imports. Some of the major projects such as Soko Floating and Tangshan Expansion that are expected to start operations in 2020 may experience delays due to the shutdowns and travel restrictions. In total, 821 bcf of regasification capacity is at stake for realization in 2020. Nigeria LNG Limited has taken Final Investment Decision of its Train 7 Project, making steady progress towards expansion of its 6-Train Plant with a 7th Train. According to the company strategic growth programme. it will on completion upscale NLNG’s annual production capacity from the current capacity of 22 mtpa to 30 mtpa as well as support the Federal Government’s drive to diversify its revenue portfolio and generate more revenue from Nigeria’s proven gas reserves of about 200 Trillion Cubic Feet (Tcf ). But the current fall in oil

prices and consequent lower demand threatens that plan. With global oil markets in turmoil, gas markets have also fallen victim to the double whammy of the Covid-19 demand destruction and an OPEC-Russia crude price/supply war. Asian gas prices have tumbled from highs of more than $11 per million British thermal units (MMBtu) in late 2018 to just $2.7 per MMBtu in March 2020. Though the decline in prices began before the Covid-19 outbreak as a result of oversupply in the market, the virus has also had a devastating effect on global gas demand, which is expected to worsen as lockdowns ramp up globally. This leaves operators in countries with relatively expensive gas supply – like Australia – in a precarious position. If today’s low prices persist, Rystad Energy has estimated that nearly 42% of Australian gas resources would be rendered uneconomic – a scary thought for the world’s largest gas exporter. Given the six-month lag in oil-indexation in most contracts,

the oil-indexed price is expected to reach the bottom in 2021 at a level of $5.68 per MMBtu, which is $1.05 per MMBtu below our previous forecast (-16%). We also see US Henry Hub gas prices remaining below $2.5 per MMBtu for a protracted period, averaging at $1.94 per MMBtu in 2020 and at $2.43 per MMBtu next year, analysts say. Rystad Energy expects global market fundamentals will remain loose through 2022 before prices tighten significantly as LNG demand growth outpaces liquefaction capacity due to more delays in project sanctioning. Rystad Energy forecasts a tight LNG balance in 2024 and 2025, and along with it, a price spike. As a result of the lower demand and the low prices, exporters have had to adjust their LNG production, and the US is among the countries that will see the biggest impact on LNG exports. The feedgas volume flowing into liquefaction plants on the US Gulf Coast has slowed during the last two months, with some redirected to domestic consumption

instead, boosting coal-to-gas switching in the power sector. Feedgas reached a peak of 9,502 million cubic feet per day (MMcfd), or about 269 million cubic meters per day (MMcmd) on 31 January and has been on a declining trend since, averaging at 7,900 million cubic feet (224 MMcmd) in March. Feedgas into Sabine Pass LNG has dropped from 4,227 MMcfd (120 MMcmd) on 31 January to as low as 1,743 MMcfd (49 MMcmd) on 17 March. “While LNG exports from the US have dropped, demand from the power sector continued to increase in March, boosted by low gas prices. US gas demand from the power sector has recently reached close to 32 billion cubic feet per day (Bcfd), or a 30% increase year-on-year. However, as the epicenter of Covid-19 moves from Europe to the US, we could see a drop in gas demand from power and other sectors, adding more downward pressure for Henry Hub prices” says Rystad Energy’s Head of Gas and Power Markets Carlos Torres-Diaz.

All On, announces N180m COVID-19 Solar Relief Fund to power emergency health care ISAAC ANYAOGU

igerian off-grid energy impact investing company All On, seeded by Shell, today announced N180 million in assistance to renewable energy companies, Auxano, Arnergy, GVE and Lumos to provide solar power for emergency health centers in support of the response to fighting the COVID-19 pandemic, the company has said. All On said the four companies, all investees of All On, were

selected based on their immediate preparedness to respond with products, inventory, technical capabilities and their efficient www.businessday.ng

delivery track record. “At times like these, the mission to accelerate the closing of the energy access gap by provid-

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ing energy to underserved and unserved communities in Nigeria, is even more critical to ultimately saving lives,” the statement said. All On’s COVID-19 Solar Relief (CSR) Fund will be made available immediately to the selected offgrid energy companies to provide solar power to emergency health facilities around Nigeria, through various private and social sector initiatives. The investees will tap into initiatives that support the national effort to alleviate the burden on @Businessdayng

the nation’s fragile health care sector in this time of crisis. All On was established by Shell to contribute to addressing Nigeria’s access to energy gap through impact investing and the creation of an enabling environment for players in the off-grid sector to thrive. Through the COVID-19 Solar Relief (CSR) Fund, All On aims to contribute solar power solutions to aid in the containment and treatment of the virus, the company said.

Tuesday 31 March 2020

BUSINESS DAY

property&lifestyle Volatile period for buyers, sellers, landlords, renters as coronavirus sucks up transactions

Landmark Africa Group moves to help Lagos contain coronavirus

… good opportunity to buy as motivated sellers drop prices

CHUKA UROKO

ith the coronavirus pandemic and its ravaging impact on global economy, everybody is a victim. The property market is one of the worst hit. The virus has literally sucked up transactions, creating a volatile period for all—buyers, sellers, landlords and renters—in the market. For now, nobody can be certain when this crisis will end. Until it does, only the most highly motivated buyers and sellers will continue to operate. For now, everybody has adopted wait-and-see attitude. The coronavirus crisis has delivered a deadly shock to the global economy. Many economists now predict an imminent global recession. The property market is clearly not immune to this crisis. And being a laggard, it is expected that the market will take some time to turn around. Because of the social distancing and other restrictive rules, viewing or physical inspection of property has practically dried up. But technology is playing a major and interesting role here. Some innovative estate agents have found ways to sell properties

to those brave investors active in the market. As in Nigeria, activity in the UK property market has collapsedinrecentweeks.Evenbeforethelockdownwasimposed, peoplehadbecomeincreasingly disinclined to view properties, given mounting fears about contracting the coronavirus. Propertywire, an online property portal, reports that international buyers were also unwilling or unable to fly to the UK to view properties, due to tightening travel restrictions and flight cancellations. Nicholas Maestri, director and head of property at Bargate Murray, notes however that few adventurous investors are still active in the market, perhaps mindful of Warren Buffet’s advice to “be fearful when others are greedy, and greedy when others are fearful”. According to him, innovative estate agents are now arranging virtual property viewings via Skype to combat the downturn in viewings. Some agents even offer virtual reality tours of properties. Some purchasers are sending UK-based agents to view properties on their behalf. “I have seen some significant properties bought blind in recent weeks, even as the coronavirus crisis has escalated; it is remarkable to see

the phenomenon of ‘online shopping’ extend to major property purchases,” Maestri said, noting that some buyers are still making all efforts to continue investing, despite the enormous economic uncertainty the world now faces. Such investors, according to him, are the exception. Most are holding their fire for now, as predictions of significant falls in property prices increase. Indeed, in the luxury London property market, a number of international investors have pulled out of property

deals in recent weeks. Given the unpredictable nature of the pandemic, it is impossible to know when the crisis will pass, or how much economic devastation it will leave in its wake. It is, however, worth remembering that property transactions in the UK increased 12.7 percent in the year to January 2020, with 102,810 sales completing. Such growth shows that demand is fundamentally high, which means that there is the potential for a rebound if

the coronavirus pandemic is brought to a halt. Indeed, demand is likely to become increasingly pent-up during the crisis. Some, therefore, predict that UK property sales and values will rebound quickly once the crisis ends. Savills says that sellers will have to remain “pragmatic on pricing” during 2020, “as demand becomes more dependent on needs-based and opportunistic buyers.” Some investors clearly sense opportunity, since motivated sellers will have to reduce their prices.

COVID-19: ‘We expect slowdown in investment activity in real estate sector’ Coronavirus is here and the impact is not only for the immediate. It is also for the medium and long term. It is feared that long after the disease is gone, the impact will still be felt in some sectors of the economy. Real estate is one. In this interview with CHUKA UROKO, the Chief Executive Officer of 3Invest Limited, RUTH OBIH, looks at how the deadly virus is affecting this sector among other issues. Excerpts:

he global economy today is bleeding from the impact of a virus that the World Health Organisation (WHO) has described as a pandemic. What is the immediate impact of this disease on real estate? The impact of the COVID-19 outbreak is being felt in all aspects of life with the largest impact on humans. This is already changing behaviours and responses to everything including the real estate sector. The impact on the various segments of real estate is quite unique. Though it is easy to assess the short-term impact of the pandemic on this sector with the total global shutdown, the long-term effects cannot be determined yet. Looking at the three different segments of the market, you see that the hospitality sector is experiencing short-term volatility with low occupancy rate. Retail will experience low cash-flow

Ruth Obih

due to reduced demand. Expectation is that non-essential goods retailers may seek rent reliefs from landlord while those retailing essential goods with the infrastructure to respond to online orders and home delivery are beneficiaries of social distancing. The office sector will experience short time disruption as more people work from

home. Physical office use rates will fall as remote working increases, and landlords with exposure to short-term leases are the worst hit. Coworking space operators are at higher risk. In some cases, landlords are negotiating new leases or renewals with tenants to ensure deals are executed. The residential market will

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remain resilient to the effects of COVID-19. Demand for new homes and rents may rise as people may be seeking more sustainable homes post- COVID-19. However, low consumer confidence and reduced mobility will impact demand during this period of uncertainty. Technology is an important mitigator and we are seeing an increase in online transaction platforms. Analysts say that because of the social distancing rule, transactions in the property market have dropped significantly. What has been your experience so far? Do you foresee that affecting house price too? Low consumer confidence and social distancing are impacting demand in this period of uncertainty. Commercial real estate sector that relies on cashflow is hugely affected by low occupancy rates in the hotel sector to the closure of commercial spaces

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due to social distancing and stay at home order. We are directly hit as our Cowork business is affected, but our media and digital platforms are still working. My prediction is that the residential market will be a beneficiary as demand for homes may remain stable if not high. I foresee lower rents post-COVID-19 due to possible layoffs and redundancy. Landlords should be considerate and less optimistic when seeking rents from tenants. Overall, I believe it’s a good time to invest in real estate. At the beginning of the year, close market watchers had projected about 2.36% growth for this sector in 2020. Given the present market realities, what are your thoughts and fears? These projections are wide speculations. I took some time to study some forecasts and reports, and my

Continues on page 30 @Businessdayng

andmark Africa Group, developers of the ambitious mixed use Landmark Village in Lagos, Nigeria, has joined the league of corporate bodies giving helping hand to the government in the attempt to contain the coronavirus pandemic as its impact spreads across cities and communities. The group recognizes that the world in which humanity lives has changed, hence the corporate organisations, individuals and agencies of the various governments are joining forces to combat the spread of the coronavirus. “This is the time for us to come together as a community in Lagos and put aside personal conveniences and act. We believe that when disaster strikes, leaders take action,” Paul Onwunibe, the Group’s CEO, said in Lagos at the weekend. “The Landmark Events Centre operators today announce that discussions are underway regarding a new initiative as part of its efforts to fight against the COVID-19 pandemic,” he added, disclosing that this follows the temporary suspension of its leisure and lifestyle operations, in line with directives from the Lagos State Government, which will allow Landmark to utilise some of its existing resources to support the community at large. Led by the Young Presidents’ Organization (YPO), the Lagos State Government and with donations from various corporate organisations and individuals, Onwuanibe said that discussions were underway regarding the establishment of an Emergency Response Centre which would be set up for Eti-Osa within the confines of the Landmark Centre building. He noted that exhibition centres worldwide such as the world renowned ExCel Convention Centre in London and Itaquerao Stadium in Brazil have adopted similar strategies to combat this pandemic. According to him, this private facility will be run by a team of best-in-class trained PPE-equipped staff and will be operated in close conjunction with experienced international public health officials, doctors, the Nigerian Centre for Disease Control (NCDC) and decontamination experts. The Group CEO explained that the reason for this initiative, saying, “the Landmark Centre is primarily used as an event facility though it is imperative that during these difficult times the lives of all are put before earnings. “We want to ensure a virusfree Nigeria and the lowest possible mortality rate. My thoughts and prayers are with families across the nation.”

Tuesday 31 March 2020

BUSINESS DAY

property&lifestyle Coronavirus segments real estate investors into two parts as impact spreads ENDURANCE OKAFOR

ollowing the lockdown of Ogun, Lagos and federal capital territory (FCT) Abuja which are the major real estate hubs in Nigeria, investors in the country’s property industry have been forced to take either of two opposite positions. The industry players have either committed to investing in the property market with the hope to attract higher earnings post Covid-19 or have adopted the wait-and-see attitude while pausing on their investments due to the uncertainty of the market, BusinesssDay gathered at the weekend. Like other real estate industries globally, Nigeria’s property market is not immune to the heat from the coronavirus outbreak as the uncertainty created by the impact of the pandemic has left the sector in limbo. To bend the curve of coronavirus in Nigeria, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days with effect from 11 pm on Monday, March 30, 2020. This restriction was also applied to Ogun State due to its proximity to Lagos.

Obileye is a UK-trained lawyer and CEO, Great Heights Property and Facilities Management Limited Email: Tundeobileye@greatheightslimited.com

Dealing with coronavirus by facility managers

With economic activities in Africa’s largest economy almost brought to a standstill amid coronavirus lockdown, real estate investors have taken the following positions: Risk-averse investors Gripped by fear of uncertainty in the property market, some real estate players have taken the position to hold on their investment in an attempt to avoid the relatively higher risk environment. The rampaging virus has also restricted both real estate investors and property developers from property inspections amid lockdown and social distancing. As a result, many now depend solely on the internet for viewing the properties they would be putting in their funds post Covid-19. “We are seeing a lot of saved properties in our online platform,” Dapo Eludire, COO, PropertyPro said.

According to Uzo Oshogwe, MD, Afriland Properties it is most unlikely that the real estate investors who are viewing and saving properties online will close on the transactions because “they can’t be paying millions for properties they haven’t seen in person.” John Oamen, Co-Founder of LiveVend real estate explained that projects are now stalled due to the imposed limit on the number of workers allowed on a site at a particular time. “Some real estate investors are holding back on investing in the market,” Oamen said. High-risk investor These set of investors are taking a position in Nigeria’s real estate market as they see the opportunity for a high return on their investment post-Covid-19. “Investors can’t put their funds in the money market and they can’t take it out of the country due to currency

devaluation, so they are taking a position because the real estate market is one of the best available investment options,” Modupe Anjous, CEO, Rydal Mews said. According to Oamen, history has shown that negative situations such as the pandemic that has affected the real estate market open up opportunities. “Certain transactions are still going on. Individuals are taking a position for the future, anticipating rises in certain places,” he said in a mail response to BusinessDay. Meanwhile, with the increase in online search for real estate properties amid the lockdown, industry players are anticipating a rush in real estate services and transactions post Covid-19. “There are people who want to make a decision now and sell when the pandemic is over,” Anjous said.

COVID-19: ‘We expect slowdown in investment activity in real estate... Continued from page 29 conclusions are that we lack empirical data. One thing I certainly took away from my short time at MIT Centre for Real Estate is how not to wear the rose-tinted glass when gathering data. Empirical data implies that the information is based on experience, not just speculation. There is a strong relationship between real estate and science. So, when making predictions, we must consider all major factors including threats and uncertainties. We expect short-term slowdown in investment activity in the global real estate sector in the first half of 2020. However, a bounce-back is anticipated in the second half if the virus is contained. Overall, we must embrace the reality of not expecting a positive 2020. My greatest fear is not just climate crisis but our unpreparedness. What is the solution? It’s simple. We must embrace sustainability and that’s why we at 3INVEST have recently changed the focus of our annual Real Estate Unite event to Unite Sustainability Summit and this was arrived at not only by personal experience but

Infrastructure Maintenance With Tunde Obileye

through thorough research. Your company has partnerships with some overseas developers where the impact of COVID-19 is severer. Tell us how this virus has affected all that? I know you are referring to our partnership with Houston EB5. Well, the US EB5 programme was hugely affected by two US government policies. There has been an increase in minimum investment threshold from $500,000 to $900,000 and there is also the immigrant travel ban. However, nothing beats a foreign exchange transaction in times like these. Part of our resilient approach to business is to develop multi-currency revenue models. So, back to your question. The immediate effects look blurry but they have positive long-term implications. Apart from being a difficult business environment, Nigeria is also a very competitive marketplace where competitors go all out to out-do and outwit. What have been your experience and attitude to competition in this crowded market? 3INVEST has a dynamic www.businessday.ng

business model. We started out shortly before the 2008 economic downturn. We have been hit several times. In 2011 we digitised our model, we developed resilient business model that can thrive in any business condition. In 2014, we were directly hit by Ebola. So, our first reaction to this COVID-19 was clear internal communication, education and readiness. We were the first to shut down operations long before others. Our mantra at 3INVEST is live well, work right and invest wisely. Wellbeing and healthcare are our greatest approaches to life and business. Our competition is mostly internal and that challenges us to develop business approaches that become a direction for competition in the market. Proptech, Blockchain and online marketing are aspects of technology that are increasingly, narrowing the space for professional practice and real estate service providers like you. What experiences do you have to share? invest was a catalyst for digital operations in Nigeria. We digitised our business models in 2011 when we launched 3investonline por-

tal. We actually shutdown that platform a few years ago to launch another online platform. We are also using this period to push out projects in our pipeline and we will be making announcements soon. I believe technology will play an important role and plans for new online transaction platforms will be accelerated in 2020. I’m a great believer in Proptech and I believe too that blockchain will close a lot of gaps in the sector but must be approached with the right resources. To what extent do you leverage technology in your operations? What benefits have you seen, especially in your return on investment and overall bottom-line? 3INVEST is a tech-based company. We have a lot of digital media operations currently running like our syndicated real estate radio show and podcast. We also own Lagos Cowork. Though that space will be affected by this outbreak, the business model still remains Proptech and you don’t need to physically be a tenant. So, good use of technology gives an industry player an edge.

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he global coronavirus pandemic (COVID-19) has already dramatically disrupted human daily existence and global businesses. Oil prices have fallen, the stock market has tumbled. What started in far away Wuhan, China last December, seemingly as an isolated case suddenly became a pandemic that has engulfed the world, creating fear, confusion and uncertainty. For facility managers, it’s time to take action to contain and control the spread of this contagious virus. In this article, focus will be on residential estates and what facility managers should be doing to proactively manage this unprecedented situation since most non-essential staff in both government service and corporate sector are working remotely from home. The next article will then focus on the work environment. The following steps are strongly advised. Communication: The facility managers must remain in real time communication with appropriate state and federal agencies for updates. Following the official guidelines/instructions is what facility managers can do to actively take part in protecting the health and safety of residents under their care, themselves and loved ones. Cleaning: Increased cleaning of common areas and frequently touched areas must be done. Providing hand sanitizing stations or hand sanitizers at entrances and high-traffic areas is highly recommended. Sensitizing residents on the need to follow proper personal hygiene guidelines and practice social distancing as provided by the Nigeria Center for Disease Control (NCDC) and Ministry of Health. Self-Isolation: Facility managers should immediately request residents to inform the management office if anyone in their household has tested positive or been exposed to the virus. In either case, such people should be asked to self-isolate as per NCDC / government guidelines. Identity of those in this situation must be kept con@Businessdayng

fidential if other residents are to be informed. Proper communication is critical to managing the risk of spreading the virus to fellow residents or maintenance team. Access to Individual Apartment/Unit by Maintenance Staff: Maintenance staff who must enter any apartment/unit for repairs or other reasons must be instructed by the facility managers to ask if a member of the household has symptoms of the virus, has recently returned from oversea travel or has had contact with someone who has been exposed or confirmed to be infected. If the answer to those questions is yes, and the purpose for entry is nonessential, the visit can be postponed for 14 days or until the affected member(s) of the household are feeling better. If the visit cannot be postponed, the members of the household can be asked to go into a separate room with door closed or maintain at least a 6-foot distance from the maintenance staff while working in the apartment/unit. Building Operations: Facility managers must, as a matter of urgency, review the general building operations due to the fluidity and uncertainty of any governmental restrictions. Operations must be prioritized in order of impact on the general wellbeing of the residents and staff alike. In the event maintenance staff are not able to travel to the estate due to travel restrictions or there’s staff shortage due to illness and it becomes difficult to retain third party vendors, a contingency plan should be in place to deal with critical operations including water treatment/supply, garbage removal, security etc. It may be necessary to engage resident volunteers willing to assist during this period. ‘ On-site Offices: Facility managers should encourage residents in estates with management offices to make contact via phone or email rather than making in-person visits to these offices. Preventive practices are key to helping to mitigate the likelihood of contracting the virus or any respiratory illness.

Tuesday 07 April 2020

BUSINESS DAY

news

New Fitch downgrade worsens Nigeria’s dollar... Continued from page 1

foreign currency implies that Nigeria, in an adverse business, financial

L-R: John Jenkins, managing director, Ports and Cargo Handling Services Limited; Abayomi Obadare, general manager, billing, Ports and Cargo Handling Services Limited; Adekunle Oyinloye, group managing director, SIFAX Group; Taiwo Afolabi, group executive vice chairman, SIFAX Group, and Hadiza Bala Usman, managing director, Nigerian Ports Authority, during the NPA MD’s tour of all terminals in Lagos to assess the impact of the COVID-19 lockdown on port operations.

Nigeria plans $6.9bn war chest to fight Covid-19... Continued from page 1

totalling $3.4bn, to enable it combat the huge impact of Covid-19 pandemic in

the country. Zainab Ahmed, minister of finance, budget and national planning, announced this on Monday and confirmed the money is expected a few weeks, but at no conditions. “These funds will not be tied to any conditionalities. However, let me clarify that Nigeria does not intend to negotiate or enter into a formal programme with IMF at this time or in the preceding future,” Ahmed said while addressing a press conference in Abuja on government’s fiscal measures against Covid-19 pandemic and oil price shock. Government is also in talks with the World Bank for a donation of up to $2.5bn on behalf of the Federal Government and $1bn for the states. A similar request has also been made to the African Development Bank for up to $1bn as well as from the Islamic Development Bank, but Ahmed didn’t give details. Nigeria will also source some $150m from the Sovereign Wealth Fund (SWF) to fund June 2020 FAAC disbursements as the country battles severe income shortages on account of the pandemic and fiscal shock from slumped oil prices. The Stabilisation Fund (SF), a component of the SWF managed by the Nigerian Sovereign Investment Authority (NSIA), is structured as to provide some buffer against short-term macro-economic instability. She said government also expects that the annual dividend from the Nigeria Liquefied Natural Gas (NLNG) will come in earlier than expected to augment FAAC monthly disbursements. Ahmed said while the country’s buffers have depleted, the intervention is critical at this time when

FAAC monthly income and subsequent disbursements to the three tiers of government have consistently dropped since January 2020. Monthly federation account (FAAC) disbursements to the federal and state governments were projected at N888.5 billion in the 2020 Appropriation Act. However, significant drop in the international oil price benchmark (Brent) has pushed disbursements to N716.3 billion in January, N647.4 billion in February and N581 billion in March, and is now being projected at as close as N400bn over the next three to six months. “Our experience shows that monthly FAAC receipts must average at least N650 billion for the federal and state governments to meet their current obligations. Unfortunately, we project that monthly receipts may decline to below N400 billion over the next three to six months,” she said. To provide additional relief, President Buhari has also asked the Finance Ministry to engage with the Central Bank of Nigeria (CBN) on a debt and interest moratorium for states on Federal Government and CBN-funded loans, in order to create fiscal space for the states, given the projected shortfalls in FAAC allocations. “Accordingly, once monthly average FAAC receipts fall below a specific threshold, interest and capital payments by states shall be suspended till monthly average FAAC receipts exceed the threshold. The details of this moratorium will be expeditiously worked out with a view to submitting the final proposals for Mr. President’s guidance and final approvals,” Ahmed said. Ahmed also confirmed government plans to seek some sort of debt relief from multilateral organisations. “The Federal Ministry of Finance is also reaching out to multi-lateral organisations www.businessday.ng

where we have borrowed externally, either for the Federal Government or on behalf of the states to also negotiate the debt defilement or debt suspension,” she said. She also confirmed a meeting with all the African ministers of finance last week where they agreed to collectively ask for suspension of debt service obligation for 2020 and 2021. “Nigeria is not alone in this, all African countries have the same rule and the World Bank and IMF that were in the meeting indicated that this possible and we will be negotiating with them the terms of referrals,” she said. Oluwatosin Ayanfalu, analyst at Lagos-based Zedcrest Capital, said Nigeria’s move to seek multilateral funds from the likes of IMF and World Bank is informed by tight market conditions in the bonds market due to the coronavirus pandemic. “Now is not the time to raise Eurobonds,” Ayanfalu told BusinessDay. “However, the concern is how effective it would be for Nigeria in obtaining the amount it seems because obviously we won’t be the only ones approaching those institutions.” Ayanfalu noted that decline in oil price and the economic effect of the pandemic is weighing on creditworthiness of Nigeria but recent downgrades seen are not peculiar to Nigeria. Johnson Chukwu, CEO, Cowry Asset Ltd, said it should not be difficult for Nigeria to raise $2.5bn given IMF’s firepower of around $1trillion and commitment to assisting countries in need. “Nigeria is one of the countries with positions in IMF,” he said. The minister announced that President Buhari has approved the temporary restructuring of the Treasury Single Account (TSA) to accommodate cash donations from the public on Covid-19 as concern rises over the effective utilisation of contributions which have reached N19.4bn from

the Nigeria Private Sector Coalition Against COVID-19 (CACOVID). She said this initiative will help to better mobilise cash donations from individuals and corporate bodies across the nation, create flexibility and build a coalition with financial institutions while maintaining the sanctity of the TSA. President Buhari has also approved the establishment of a N500 billion COVID-19 Crisis Intervention Fund, part of which the Federal Government has provided N102.5 billion in resources to be available for direct interventions in the healthcare sector, all in a coordinated effort to save the lives of Nigerians and protect the economy from the adverse impact of the global outbreak of the coronavirus (COVID-19). Of this sum, N6.5 billion has already been made available to the Nigeria Centre for Disease Control (NCDC) for critical expenditure. “The government has provided N102.5 billion in resources to be available for direct interventions in the healthcare sector... More funds are to be provided from the proposed crisis intervention fund to address emerging and priority funding needs as these arise,” Ahmed said. The establishment of the fund would involve mopping-up much-needed cash resources from various special funds and accounts, in consultation with and with the approval of the National Assembly. Apart from the proposed N500 billion intervention fund meant to upgrade healthcare facilities as earlier identified by the Presidential Task Force on COVID-19 and approved by the president, the fund is also to finance the Federal Government’s interventions to support states in improving healthcare facilities; finance the creation of a special public works programme; and fund any additional interventions that may be needed.

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and economic conditions, is incapacitated to meet its foreign currency-denominated financial obligations with an original maturity of one year or more, as they come due. “This means the government will abandon its foreign currency commercial debt issuance for 2020 and concentrate on effort on getting loans from multilateral agencies,” Omotola Abimbola, a fixed income analyst at Chapel Hill Denham, said. Zainab Ahmed, Nigeria’s minister of finance, on Monday announced plans by the government to raise $6.9 billion from multilateral lenders to help in efforts to stop the spread of the coronavirus and counter its impact on Africa’s largest economy. “The government will seek $3.4 billion from the International Monetary Fund, $2.5 billion from the World Bank and a further $1 billion from the African Development Bank,” Ahmed said. Nonso Obikili, chief economist at BusinessDay, said the decision to seek IMF support is “unprecedented by Nigerian standards and it’s clear they are very worried about finances going forward”. “But this is the easy part. There are more fundamental macro and fiscal issues that will need to be tackled once the pandemic goes away,” he said. According to Fitch, the downgrade and negative outlook reflect the aggravation of ongoing pressures on Nigeria’s external finances following the recent slump in oil prices and the pandemic shock. “Intensifying external pressures raise risks of disruptive macroeconomic adjustment given Nigeria’s precarious monetary and exchange rate policy setting and lack of fiscal buffers. Nigeria’s reserves have depleted to $35.94bn as at March 2020 compared to $52.6bn in 2008. External debt ballooned hitting $26.94bn in 2020 compared to $3.7bn in 2008 and $111.26bn in 2016. The external crude account has also depleted to less than $100 million in March 2020 compared to more than $15 billion in 2008 and less than $5 billion in 2016. The rating agency said the pandemic shock would also raise government debt and interest payment-to-revenue ratios from already particularly high levels and lead to a renewed economic recession. Figures from the Debt Management Office (DMO) show Nigeria’s total debt stock rose to N27.40 trillion in 2019, an increase of around 12.36 percent year-on-year from N24.38 trillion in 2018. Domestic debt grew 10.5 percent to N18.38 trillion in 2019 accounting for 67.07 percent of total debt stock. Total debt-to-GDP ratio @Businessdayng

remained at 19 percent approximately, below the 25 percent debt limit imposed by the government. The total interest payment on domestic debt, according to DMO data, stood at N1.69 trillion in the year, while interest payment on foreign debt stood at $1.33 billion. Fitch warned that the pandemic shock would push the Nigerian economy into recession with GDP contracting by 1 percent in 2020. Non-oil GDP will fall, weighed down by spillovers from the oil sector, tighter FC supply and disruptions to economic activity from measures taken to contain the spread of the coronavirus as regions accounting for nearly half of the national economy were put under a two-week lockdown in March. “We expect GDP to bounce back by 4.4 percent in 2021 assuming a gradual normalisation of economic activity and stable oil production but risks around our baseline are tilted to the downside given uncertainty regarding the spread of the pandemic,” Fitch said. Fitch noted that the plunge in international oil prices, which it expects to average of $35/barrel in 2020 after USD64.1/barrel in 2019, highlights Nigeria’s high dependence on the oil sector, with hydrocarbon revenues representing 57 percent of current-account receipts and nearly half of fiscal revenue over the last three years. Fitch in its view said the shock exacerbates the overvaluation of the naira and remedial policy actions taken by the Central Bank of Nigeria (CBN) will not suffice to address deteriorating external imbalances. The CBN allowed the exchange rate on the I&E Window, on which the bulk of foreign-currency (FC) transactions is held, to depreciate by 6.7 percent since midJanuary and devalued the official exchange rate by 15 percent in March. Fitch said the continued reluctance by the apex bank to adjust the exchange rate, portfolio outflows and a wide current-account deficit (CAD) will lead foreign currency reserves to fall to 2.5 months of current account payments at end-2020 under its forecasts, “well below the historical ‘B’ median of 3.8 months, and their lowest level since 1994”. It also predicted that the Current Account Deficit would widen to a record level of 4.9 percent of GDP in 2020, exceeding the historical ‘B’ median of 4.3 percent, under its assumption of only modest depreciation of the naira. Nigeria’s long-standing current account surplus shifted to a deficit of 4.2 percent of GDP in 2019 on an upsurge in imports, chiefly of equipment goods. We project the CAD to narrow to 1.8 percent in 2021 reflecting partial recovery of oil prices to $45/b, import compression and tighter restrictions on FC access.

Tuesday 07 April 2020

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Monday 06 April 2020

Top Gainers/Losers as at Monday 06 April 2020 LOSERS

GAINERS Company

Opening

Closing

Change

FLOURMILL

N20.5

N21.5

WAPCO

N8.95

N9.8

0.85

ACCESS

N6.05

N6.65

0.6

GUARANTY

N17.6

N17.85

0.25

N22

N22.2

0.2

Company

ASI (Points)

Opening

Closing

Change

N544.5

N490.1

-54.4

DANGCEM

N125

N117

-8

BUACEMENT

N35.3

N31.8

-3.5

VOLUME (Numbers)

BOCGAS

N4.05

N3.65

-0.4

VALUE (N billion)

NAHCO

N2.6

N2.34

-0.26

SEPLAT

DEALS (Numbers)

MARKET CAP (N Trn)

20,669.38 4,184.00 4,127,609,403.58 4.127

nited Capital Plc, a leading PanAfrican financial and investment services Group has successfully raised N5.3 billion in a Series 1 and 2 Commercial Paper (CP) issuance, under its N20billion Programme registered with the FMDQ Securities Exchange. The Commercial Paper issuance, which was approved by Company’s shareholders at the Annual General Meeting of March 2018, was subjected to regulatory approvals and borne out of the Group’s strategic initiatives, aimed at

Peter Ashade, Group CEO, United Capital

providing innovative financing solutions to our Corporate, Institutional and Government (parastatals, sovereign and subsovereigns) clients. According to the Group CEO, Peter Ashade, “The Commercial Paper issuance will enable us provide a wider range of wholesale financing solutions to our clients. It will also further complement our stable funding base and support the growth of our overall business”. “The Series 1 & 2 issuances, with tenors of 182 days and 270 days, were largely subscribed to by individual and institutional investors, with interest significantly tilted towards the 270-day offering”. he said

FCMB Group records N188bn full year revenue ....grows profit to N20.1bn

CMB Group Plc has announced its financial results for the year ended December 31, 2019. The audited results at the Nigerian Stock Exchange showed that the Group’s gross revenue increased to N188 billion compared to N177.2billion in 2018. The strong performance also manifested in profit before tax (PBT), which rose by 9percent to N20.1 billion. Following this, the financial institution has declared a dividend of 14 kobo per share to shareholders. FCMB Group, a holding company divided along three business groups; Commercial and Retail Banking (First City Monument Bank Limited, Credit Direct Limited, FCMB (UK) Limited and FCMB Microfinance Bank Limited); Investment Banking (FCMB Capital Markets Limited and CSL Stockbrokers Limited) as well as Asset & Wealth Management (FCMB Pensions Limited, FCMB Asset Management Limited and CSL Trustees Limited), also reported appreciablegrowth in key operating areas going by the audited results. The financial results also

showed that net interest income increased by 5percent Year-on-Year (YoY) to N76 billion for the twelve months of 2019 from N72.6 billion within the same periodin 2018. In d e m o n s t rat i o n o f enhanced customers confidence in FCMB, deposits grew to N943.1 billion in December 2019, as against N863.4 billion in September 2019. Loans and advances disbursed by the Group as at the end of December 2019 stood at N715.9 billion, representing a rise of 12percent (Quarter-onQuarter, QoQ), compared to N638.1 billion in September

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2019. Moreover, total assets of the Group went up by 10percent quarter on quarter (QoQ) to N1.67 trillion in December 2019 from N1.52 trillion in September 2019, just as capital adequacy ratio stood at 17.17percent, which is above the benchmark set by the Central Bank of Nigeria. Commenting on the overall performance, FCMB Group stated that, “post-tax profits increased by 16percent to N17.3 billion, this translates to a return on average equity (RoAE) of 9percent and earnings per share of 87.2 kobo,

an improvement on 8.1percent and 75.2 kobo, respectively, in 2018”. I t a d d e d t h a t , “o u r businesses continue to improve with growth in other key indicators, such as loans and advances, deposits and assets under management (AUM), which grew by 13.1percent, 14.8percent and 28.3percent, respectively. “Our customer base also grew by 27.7percent across the Group from 5.3 million to 6.8 million. Overall, customer satisfaction has shown positive trends, with a net promoter score of 31 in banking and 23 in asset management. Asset quality has continued to improve, with the Groupwide NPL ratio coming down to 3.7percent from 5.9percent. Similarly,capital adequacy ratio has remained stable at 17.2percent for our Commercial and Retail Banking Group”. FCMB Group is a frontline financial services institution in Nigeria with subsidiaries that are market leaders in their respective segments. FCMB has continued to distinguish itselfthrough innovation and delivery of exceptional offerings

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FTSE 100 Index 5,582.39GBP +166.89+3.08%

Nikkei 225 18,576.30JPY +756.11+4.24%

S&P 500 Index 2,615.21USD +126.56+5.09%

Deutsche Boerse AG German Stock Index DAX 10,075.17EUR +549.40+5.77%

Generic 1st ‘DM’ Future 22,021.00USD +1,064.00+5.08%

Shanghai Stock Exchange Composite Index 2,763.99CNY -16.65-0.60%

10.771

United Capital raises N5.3bn in Commercial Paper issuance Stories by Iheanyi Nwachukwu

Global market indicators

SEC acting DG elected into IOSCO Board ... to represent Africa/Middle-East Regional Committee

he Acting Director General of the Securities and Exchange Commission (SEC) Mary Uduk has been elected into the board of the International Organisation of Securities Commissions (IOSCO). Uduk is to represent the Africa/Middle-East Regional Committee (AMERC) on the IOSCO board for a period of two years. The AMERC comprises securities regulators that are IOSCO members within the Middle East and North Africa as well as sub-Saharan African region Announcing the result of the keenly contested election, Secretary General of IOSCO, Mr. Paul Andrews said “The voting period for the AMERC Representative position ended on 20 March 2020. The committee elected the SEC Nigeria as AMERC Representative to the IOSCO Board for the term 2020-2022. “I would like to congratulate the SEC Nigeria and Mary Uduk and wish her every success in this role”. In her response to the announcement, Uduk expressed her sincere gratitude on behalf of SEC Nigeria to all AMERC members for

their support in electing the Commission to represent AMERC on the Board of IOSCO for the 2020 to 2022 term. She said, “I am indeed honoured for the trust and confidence reposed on SEC Nigeria and wish to restate our commitment to conscientiously represent the Region at the IOSCO Board and work closely with Ms. Nehza Hayat, the incoming AMERC Chair and all other AMERC members on the Board to advance the course of the region. “Once again, I thank you immensely for your support and kindly accept my highest regards, while I urge everyone to keep safe at this period”. IOSCO is an association of organizations that regulate the world’s securities and futures markets. Members are typically primary securities and/or futures regulators in a national jurisdiction or the main financial regulator from each country The IOSCO Board is its governing and standardsetting body and is comprised of 31 securities regulators. Mr. Ashley Ian Alder, Chief Executive Officer of the Hong Kong Securities and Futures Commission, is the chair of the IOSCO Board

Stanbic IBTC partners FATE Foundation to set up more COVID-19 treatment wards

tanbic IBTC Holdings Plc, a member of Standard Bank Group, has partnered FATE Foundation in a bid to curb the COVID-19 pandemic. Stanbic IBTC recently donated N25 million to the FATE Foundation Philanthropy’s COVID-19 Support Fund. The Fund, an initiative of FATE Foundation, was established to support the government’s efforts at properly equipping public health facilities in the treatment of COVID-19 patients. Part of the Fund will be channeled towards setting up a special COVID-19 Ward at the National Orthopedic Hospital Igbobi by the Lagos State government. The Lagos State government plans to set up a special COVID-19 Ward that will support the treatment of patients. Another beneficiary of the Fund is the Ogun State

@Businessdayng

Ministry of Health, which has been offered the use of FATE Foundation’s Institute for Venture Design (IVD) facility in Abeokuta, Ogun State. The IVD facility, which has a 30room residential space, also has additional spaces which can be converted into wards for COVID-19 patients. In line with the F o u n d a t i o n ’s p o l i c y advocacy work, the Fund will additionally support research on the impact of COVID-19 pandemic on Nigerian entrepreneurs. This survey is to provide data insights on how the current situation is affecting Nigeria’s micro, small and medium enterprises. The exercise will be done in partnership with BudgIT, the Nigerian Economic Summit Group (NESG), MSME Community of Practice and the Global Entrepreneurship Network on key stakeholder engagement at the national and sub-national levels.

Tuesday 07 April 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

Austria set to be first European country to ease lockdown Chancellor sets out timetable that could see shops reopening from next weekChancellor sets out timetable that could see shops reopening from next week Sam Jones

ustria has set out plans to become the first country in Europe to ease its lockdown against the coronavirus pandemic, with shops due to reopen as early as next week. Flanked by senior government ministers, Chancellor Sebastian Kurz on Monday presented a timetable to restart the Austrian economy, detailing a series of phased steps to normalise life while minimising the risk of a surge in new infections. With many European countries still battling to hold down cases of Covid-19, and hospital systems on the edge of capacity, Austria’s plan will be intensely scrutinised: seen either as a bold decision to balance public and economic health, or as a gamble that prioritises the latter. Several European countries have established task forces to look at how best to wind back containment measures, but faced with huge uncertainties, many officials have yet to commit to any clear strategy. As well as pledging a gradual lifting of restrictions on public life, the Austrian plan also makes

clear that months of controlling measures still lie ahead. Mr Kurz urged Austrians to cancel any plans to celebrate Easter this week and stressed that restrictions could only be eased if rules were scrupulously adhered to. “Keep to the measures, avoid social contacts, keep your distance in public space,” the chancellor said. According to the timetable, small shops will be permitted to open again from April 14 as well as large

DIY stores and garden centres. As of May 1, other businesses deemed slightly higher risk, including hair salons, will be allowed to reopen. The government said there was a possibility restaurants and cafés would be allowed to start operating again in mid-May, but declined to give an exact date. Public events will not be permitted to take place until July. No date has been set for schools to reopen.

The government also announced it would extend its requirement for Austrians to wear facemarks. In addition to their mandatory use in supermarkets and other shops that are currently open, they will also be required on all public transport. Austrian authorities have so far confirmed 12,008 cases of the novel coronavirus. Aggressive enforcement of containment measures, such as hefty police fines of thousands of

euros, and well-resourced medical facilities, including one of the highest numbers of intensive care beds per capita in Europe, have proved relatively successful in limiting the impact of the virus in the central European country. The Austrian growth rate of daily new infections has slowed to 2.8 per cent from more than 40 per cent in mid-March, health authorities reported on Sunday. Mr Kurz’s handling of the pandemic, and the performance of his health minister, the Green party’s Rudolf Anschober — has so-far won plaudits at home and abroad. The country’s fight against the novel coronavirus has not been without difficulty, however: the western mountainous region of Tyrol is one of the worst-afflicted areas in Europe. Ski resorts in Tyrol — packed with partying tourists from across the continent — stayed open for days even after the first cases of coronavirus were confirmed there in the first week of March. Some, such as Ischgl, have become bywords for politicians putting economic interests above public health — a charge Mr Kurz’s gambit to reopen the economy may yet encourage if infections in Austria tick up as restrictions on public life are lifted.

Quibi launches $1.8bn bet on mobile video amid global lockdown Potential challenger to YouTube and Netflix has backers including Alibaba and Goldman Sachs

Tim Bradshaw

uibi, the mobile video start-up that raised a blockbuster $1.8bn before its debut, launched its long-anticipated challenge to YouTube and Netflix on Monday — despite the worldwide disappearance of the coffee shop lines and commutes for which its “quick bite” content was developed. Several top Hollywood studios, and the likes of Alibaba, Goldman Sachs and JPMorgan, have huge sums riding on the success of the platform, which is led by DreamWorks founder Jeffrey Katzenberg and former HP chief Meg Whitman. Los Angeles-based Quibi spent hundreds of millions of dollars to ensure that a range of content — featuring celebrities including LeBron James, Chrissy Teigen and Idris Elba — was available from day one on its app. The rise of YouTube and latterly TikTok have demonstrated the huge popularity of short-form mo-

bile content, while Netflix’s growth to almost 170m subscribers indicates that people are prepared to pay for online video. But Quibi is the first big-budget attempt to fuse the two models with slick, professional content designed for on-the-go viewing. “People are already watching a lot of videos on their phones. You just need to create a different experience,” Ms Whitman, a veteran of eBay, Hewlett-Packard www.businessday.ng

and Disney, told the Financial Times last year. After more than a year in development, the app promises “movie-quality” scripted shows, reality TV and documentaries, as well as daily news, including finance, sports and a BBC world affairs show. Quibi will be free to view for the first 90 days, before charging a monthly subscription of up to $7.99 (£7.99). Quibi has also recruited en-

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gineers from tech companies including Snap to make its service more distinctive, for instance by allowing viewers to watch shows with their phones held sideways or upright using its “Turnstyle” mode. It is unclear how coronavirus, which has disrupted routines and quarantined millions around the world, will influence Quibi’s early popularity. Tom Harrington of Enders Analysis said that while the pandemic had driven an upsurge in daytime TV viewing in the UK, especially around news, families are watching primarily on the big-screen TV, while Quibi is available only on mobile. Like Hulu, the Hollywood-led TV streaming service that was dubbed “Clown Co” by cynical Silicon Valley bloggers before it premiered in 2008, Quibi has faced considerable scepticism before its arrival. Reviews for its launch-day content slate and the app itself have been mixed. “I don’t see the evidence for @Businessdayng

[demand for] this gap” between YouTube-style short clips and traditional TV shows, said Mr Harrington. Yet Hulu managed to defy the sceptics to become a mainstay of many US households, allowing viewers to catch up on shows made for traditional TV channels, as well as breakout original hits such as The Handmaid’s Tale. Hulu’s former chief executive, Jason Kilar, was recently appointed chief executive of AT&Towned WarnerMedia. The hope for Quibi is that it will be able to piggyback on the wider shift away from traditional broadcast TV and towards mobile entertainment. “People have done short-form services before, but not at this level or quality,” said Mr Harrington. “Quibi is trying to do something quite different. They won’t know whether it works for some time . . . and by then they’ve already thrown away hundreds of millions of dollars worth of investment in content.”

Tuesday 07 April 2020

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

US shareholders brace for nine-year squeeze on dividends How the Japanese billionaire was forced to take drastic action to shore up confidence in his tech empire Richard Henderson

ividends paid to investors by big US companies will take nine years to recover from the downturn caused by coronavirus, according to bets in the futures market, marking the biggest hit to corporate payouts since the second world war. Companies in the S&P 500 delivered almost half a trillion dollars in dividends last year, or $56 per share. But companies around the world have come under pressure to cut payouts to shareholders and focus on keeping up payments to workers and other stakeholders, now that the virus has in many cases hit revenues. It will take until 2028 to beat the tally from 2019, according to the prices of futures contracts linked to annual dividends for the benchmark. That compares with the three years dividends took to recover after the 2008-09 financial crisis and a 19-year run from the Great Depression through to 1949, according to data compiled by Robert Shiller, the Yale University economist. Just a month ago investors were betting the S&P 500 would deliver a record $61 per share in payouts this year, noted BNY Mellon. That expectation now stands at just

$40, mirroring a 27 per cent fall in US stock prices since the peak in February. The lacklustre outlook for payouts reflects the pain facing the global economy from the coronavirus pandemic. The dip will hurt investors who rely on steady income from stocks, such as pension funds, and comes after the yield on safe corporate and government bonds has dropped sharply in recent years. “The reason you own a stock is you want to own a share of the profits of the business,” said John Velis, director of FX and macro strategy at BNY Mellon. “This will make holding stocks a less attractive option.” Dividends are a marker of

financial stability for listed companies that try to raise payouts year after year, and which are typically penalised by investors when they fail to do so. The steady growth of dividends contrasts with the recent explosive growth of share buybacks, which are seen as a more flexible way to hand money back, as programmes can be paused or scrapped without much fanfare. “You don’t want to cut dividends because it’s a really bad signal,” said Mr Velis. “Once you’ve established your dividend you only cut in extreme circumstances.” The outlook for dividends is further clouded by the US government’s $2tn spending package to

buffer the economic shock from the pandemic. Companies that receive direct assistance face extra pressure to reduce both dividends and buybacks, said Mr Velis. Boeing, the US aircraft manufacturer, and Delta, the US carrier, last month announced suspensions to payments on dividends and buybacks. Large US banks, meanwhile, intend to continue paying dividends, arguing such payments are a powerful signal of financial strength. Meanwhile, the rapid drop in the price of oil this year has increased pressure on energy businesses to reduce dividends to preserve cash. Occidental, the US oil group, cut its dividend from

$0.79 to $0.11 last month, in its first reduction since the Gulf war three decades ago. Companies around the world will curb payouts as they draw down credit lines and tap the bond market for funds to navigate the downturn, said Sean Darby, head of global equities for Jefferies. “Dividend cuts are likely the first casualties in addressing balance sheets,” Mr Darby said. “We expect dividends to be cut or slashed to preserve money.” Coronavirus business update How is coronavirus taking its toll on markets, business, and our everyday lives and workplaces? Stay briefed with our coronavirus newsletter.

US shareholders brace for nine-year squeeze on dividends Recovery in payouts expected to take longer than after 2008 crisis Richard Henderson

according to data compiled by Robert Shiller, the Yale University economist. Just a month ago investors were betting the S&P 500 would deliver a record $61 per share in payouts this year, noted BNY Mellon. That expectation now stands at just $40, mirroring a 27 per cent fall in US stock prices since the peak in February. The lacklustre outlook for payouts reflects the pain facing the global economy from the coronavirus pandemic. The dip www.businessday.ng

will hurt investors who rely on steady income from stocks, such as pension funds, and comes after the yield on safe corporate and government bonds has dropped sharply in recent years. “The reason you own a stock is you want to own a share of the profits of the business,” said John Velis, director of FX and macro strategy at BNY Mellon. “This will make holding stocks a less attractive option.” Dividends are a marker of financial stability for listed com-

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panies that try to raise payouts year after year, and which are typically penalised by investors when they fail to do so. The steady growth of dividends contrasts with the recent explosive growth of share buybacks, which are seen as a more flexible way to hand money back, as programmes can be paused or scrapped without much fanfare. “You don’t want to cut dividends because it’s a really bad signal,” said Mr Velis. “Once you’ve established your dividend you only cut in extreme circumstances.” The outlook for dividends is further clouded by the US government’s $2tn spending package to buffer the economic shock from the pandemic. Companies that receive direct assistance face extra pressure to reduce both dividends and buybacks, said Mr Velis. Boeing, the US aircraft manufacturer, and Delta, the US carrier, last month announced suspensions to payments on dividends and buybacks. Large @Businessdayng

US banks, meanwhile, intend to continue paying dividends, arguing such payments are a powerful signal of financial strength. Meanwhile, the rapid drop in the price of oil this year has increased pressure on energy businesses to reduce dividends to preserve cash. Occidental, the US oil group, cut its dividend from $0.79 to $0.11 last month, in its first reduction since the Gulf war three decades ago. Companies around the world will curb payouts as they draw down credit lines and tap the bond market for funds to navigate the downturn, said Sean Darby, head of global equities for Jefferies. “Dividend cuts are likely the first casualties in addressing balance sheets,” Mr Darby said. “We expect dividends to be cut or slashed to preserve money.” Coronavirus business update How is coronavirus taking its toll on markets, business, and our everyday lives and workplaces? Stay briefed with our coronavirus newsletter.

Tuesday 07 April 2020

BUSINESS DAY

ANALYSIS FT Coronavirus: Is Europe losing Italy? Furious at their plight being ignored and over resistance to coronabonds, Italians’ sense of betrayal deepens Miles Johnson, Sam Fleming and Guy Chazan

year ago Carlo Calenda ran in European parliamentary elections in Italy under the slogan “We are Europeans”, a rallying cry to defend his country’s place in the EU at a time of rising nationalism. Now even Mr Calenda, a 46-year-old former minister and Italian permanent representative to the EU, is experiencing a crisis of faith in an idea he has spent a lifetime fighting for. “This is an existential threat, I am not sure if we are going to make it,” he says. “You have to consider my party is one of the most pro-European parties in Italy and I now have members writing to me saying: ‘Why do we want to stay in the EU? It is useless.’” As Italy faces its most severe crisis since the second world war, with more than 15,000 deaths from coronavirus and its economy on course to suffer the deepest recession in its modern history, there is a rising feeling among even its pro-European elite that the country is being abandoned by its neighbours. “A massive, massive shift is happening in Italy. You have thousands of pro-Europeans moving to this position,” says Mr Calenda, who leads the recently formed liberal Action party. Last month Sergio Mattarella, Italy’s softly-spoken 78-yearold president, and the man its establishment has relied on to safeguard its constitution and international alliances, warned the future of Europe was at stake if its institutions did not show solidarity with their country. “I hope that everyone fully understands, before it is too late, the seriousness of the threat to Europe,” he said in an evening television address beamed into the homes of millions of Italians. Many in Rome now feel that unless bold action is taken by northern European countries, they risk Italy turning its back on the European project forever. There are already signs that Italian faith in the EU has been damaged. In a survey conducted last month by Tecnè, 67 per cent of respondents said they believed being part of the union was a disadvantage for their country, up from 47 per cent in November 2018. Donald Tusk, the former European Council president, told the FT the situation today was much more worrying than during the euro crisis — both politically and economically. Southern European expectations of a rapid demonstration of solidarity from the rest of the EU early in the pandemic were not met, even if the bloc has subsequently ramped up its assistance

including financial aid and equipment. “I hope everything can be fixed, but the loss of reputation is huge,” says Mr Tusk, who is now president of the European People’s party, the centre-right political alliance. “We must save Italy, Spain and the whole of Europe and not be afraid of extraordinary measures. This is a state of emergency.” Mr Tusk says the EU’s assistance for Italy and other hard-hit countries is vastly more substantial than that from China and Russia, but he warns that “in politics perception can be more important than fact”. In 2018 Italy became the first founding member to elect a government hostile to the EU, with Matteo Salvini, the anti-immigration League leader and then deputy prime minister of the coalition government, raging against “the Brussels bunker”. The following year that government fell, and Mr Salvini was banished to opposition, giving pro-Europeans hope that the nationalist threat had faded. But many believe bitterness felt from events over the past month could permanently alter the country’s politics in Mr Salvini’s favour. “There was a feeling before that the political system had marginalised the anti-EU forces,” says Lorenzo Pregliasco, a pollster at YouTrend. “Now if pro-European party activists and politicians are no longer so sure how they feel, imagine what the voters think.” At the core of the argument is a bitter divide over the extent to which euro area countries should be pursuing a far more unified economic response to the crisis. Finance ministers will meet on Tuesday to attempt to agree a package of measures aimed at marshalling greater Europe-wide fiscal firepower. Italy is among the member states that are pushing for the euro area to be far more ambitious by collectively selling bonds to help fund the massive economic rebuilding efforts that lie ahead. The discussions mark just the latest iteration of a longstanding dispute over collective fiscal action that economists call debt mutualisation — and which many see www.businessday.ng

as the biggest missing element of the single currency. The EU does have a rescue fund called the European Stability Mechanism which countries can use. But despite assurances to the contrary from the ESM’s managing director, Klaus Regling, many Italians still fear lending from the institution would come with tough conditions attached and would stigmatise the country. It would feel to many that their country was being punished for a disaster that was outside of its control. Roberto Gualtieri, Italy’s finance minister, has said that Italian gross domestic product is likely to fall by 6 per cent this year. Other economists believe this may be a conservative estimate. With the country entering the crisis with a debt-toGDP ratio already at 136 per cent, there is a real threat that Italy’s debt reaches a level that brings into question its sustainability. In March, with the virus already ripping through southern Europe, nine euro members led by France, Italy and Spain signed a joint letter pushing for so-called coronabonds — jointly issued debt backed by all euro countries including deeppocketed Germany — to help pay for the recovery effort. The depth of divisions over the topic was exposed at a tough EU leaders’ video conference call in late March in which the Italian prime minister Giuseppe Conte and his allies pushed hard for the door to be opened to coronabonds. Mr Conte said the euro area’s bailout instruments had been developed for the last crisis and were ill-suited to the current symmetric shock hitting the entire continent. “What will we tell our citizens if Europe does not prove capable of a united, strong and cohesive reaction in the face of a symmetrical, unpredictable shock of this historical magnitude?” he asked. Leaders eventually struck a compromise and issued a statement using vague language that effectively kicked deliberations in to Tuesday’s eurogroup meeting of finance ministers. But the truce did not last long. Ursula von der Leyen, the European Commission president and a former German defence minister, appeared to use dismissive

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language in an interview, describing coronabonds as a slogan and appearing to express sympathy with Germany’s concerns about the idea. The language provoked immediate rebukes from Mr Conte and Mr Gualtieri, forcing the commission to issue a late-night statement that vowed to leave open all options that are compatible with the EU treaty. Ms Von der Leyen’s shifting positions reflected in part sharp divisions among her commissioners as well as the EU as a whole over the idea of coronabonds. While the discussion over which financial instruments can be used to help Italy is technical, the tone of the debate has become emotionally charged in both southern Europe and in the north, where the Netherlands has sided with Germany in opposing coronabonds. Mr Calenda last week took out a full-page advert in the German daily Frankfurter Allgemeine Zeitung, signed by himself and a number of leftwing mayors and governors from the regions worst-hit by the outbreak. In it they attacked the Dutch position as “an example of a lack of ethics and solidarity”, called the country a tax haven and compared German reluctance to support joint European debt with the partial cancellation of Nazi war debts by European countries including Italy after the second world war. “Germany could never have paid it,” the letter said. “Your place is with the Europe of institutions, of values of freedom and solidarity. Not following small national egoisms.” “They shouldn’t be using such emotional arguments,” says Eckhardt Rehberg, a German MP in Chancellor Angela Merkel’s Christian Democratic Union. “Every country should ask itself whether it bears some responsibility for the situation it is in. Look at Italy’s health system. You cannot blame all your difficulties on Europe and Germany. As a German politician, I find that unfair.” Editor’s note The Financial Times is making key coronavirus coverage free to read to help everyone stay informed. @Businessdayng

Find the latest here. The current German-Italian tensions are part of a much longer dispute, stretching back to the eurozone sovereign debt crisis of 2010-12. Even back then, many in southern Europe saw eurobonds as a potential solution. But Ms Merkel was always opposed, saying in 2012 that there would be no such instruments “as long as I live”. For the chancellor and her CDU party, the EU treaties were sacrosanct: and they expressly forbade the mutualisation of debt. The rule was clear: states cannot finance each other. Yet in the eurozone more broadly, her reputation suffered. Southerners increasingly saw her as Europe’s great disciplinarian. Posters appeared in Greece showing her with a Hitler moustache. She was depicted as a witch, a dominatrix or a wicked stepmother, and accused of trying to subjugate the whole continent. In Italy the hostility to her was fanned by the media empire of then prime minister Silvio Berlusconi. Records of bugged phone calls emerged in which he referred to the chancellor in extremely disparaging terms. In August 2012 the newspaper Il Giornale, owned by Mr Berlusconi’s brother, had a front-page picture of Ms Merkel raising her hand in a vaguely fascist salute, accompanied by an article claiming Italy was “no longer in Europe, it is in the Fourth Reich”. The crisis has emboldened politicians on Italy’s right who sense the mood in the country is shifting against Brussels, as well as becoming more anti-German. “The EU has gone from doing absolutely nothing to some trying to profit from the difficulties we are facing,” says Giorgia Meloni, leader of the far-right Brothers of Italy, which has made significant gains in opinion polls to become the second most popular rightwing party after Mr Salvini’s League. “There are people who are trying to use the virus to speculate. There is a game to weaken Italy and buy its strategic assets,” she told the FT. “While we are counting our dead, they are counting the risk of losing interest on their bonds.”

Monday 06 April 2020

BUSINESS DAY

NATIONAL NEWS FT JPMorgan considers historic dividend suspension Chief warns that America’s largest bank is ‘not immune’ to coronavirus crisis Laura Noonan

PMorgan Chase could suspend its dividend for the first time in its history if the coronavirus crisis triggers the kind of sharp recession that some economists now expect, chief executive Jamie Dimon warned on Monday, striking a more cautious tone on payouts than its Wall Street rivals. In his annual letter to shareholders, Mr Dimon said JPMorgan was “not immune” to the coronavirus crisis and is exposing itself to “billions of dollars of additional credit losses” as it lends to businesses and individuals in need. The bank’s board — which continued to approve shareholder payouts throughout the 2007/8 financial crisis and its aftermath — would “likely consider suspending the dividend” in an “extremely adverse scenario”, where the US economy contracts by 35 per cent in the second quarter and unemployment rises to 14 per cent, Mr Dimon told investors. “This scenario is quite severe and, we hope, unlikely,” he added. Analysts at Goldman Sachs last week said the US economy could shrink 34 per cent in the second quarter, while analysts at Morgan Stanley estimated it could contract by 38 per cent. Official figures show that US unemployment rose to 4.4 per cent in March, up from a 50-year low of 3.5 per cent in February. Mr Dimon also cautioned that it “should be expected that our earnings will be down meaningfully in 2020”, following JPMorgan’s record profits last year. While stopping short of suspending its dividend for now, the

Jamie Dimon, chief executive of JPMorgan Chase, said it ‘should be expected that our earnings will be down meaningfully in 2020’ © REUTERS

tone from the chief of America’s most profitable bank is at odds with his US counterparts, who last week offered a staunch defence of their plans to continue making payouts. Goldman Sachs chief David Solomon last week told CNBC that dividends made up a much smaller part of capital return for American banks than for their European peers, who have been ordered by regulators to halt payments. “It’s my expectation we’ll pay our dividend return,” he added. Meanwhile, Morgan Stanley chief James Gorman told CNBC that suspending dividends would

be a “very poor thing to do” and would be “destabilising”, while Citigroup boss Mike Corbat told the same channelthe bank’s dividend was “sound and we intend to keep paying it”. The top eight US banks have already voluntarily suspended their share buyback programmes, which account for more than two-thirds of their shareholder payouts. Mr Dimon, who returned to work last week after life-saving heart surgery on March 5, also used the missive to take aim at a familiar target for him: post-crisis regulation. “We are now seeing the impact of poorly co-ordinated, poorly

calibrated and poorly organised rulemaking,” he said. “After the crisis subsides (and it will), our country should thoroughly review all aspects of our preparedness and response.” He said the Federal Reserve could improve the flow of capital to the real economy by making “changes to capital and liquidity requirements”, expanding its balance sheet and offering additional lending facilities. “These actions would bolster the US economy with no impact on safety, soundness or regulatory oversight.” JPMorgan has made $650m of new loans to small businesses,

and approved more than $25bn of new credit extensions in March alone, according to Mr Dimon. The bank also loaned $1.9bn to hospitals and healthcare companies in March, as well as $360m to non-profit organisations and $240m to state and local governments. It is planning to lend an additional $150bn to clients. Mr Dimon added: “Recognising the extraordinary extension of new credit . . . and knowing there will be a major recession means that we are exposing ourselves to billions of dollars of additional credit losses as we help both consumers and business customers through these difficult times.”

Wall Street joins global rally on hopes of slowing outbreak Equities rise sharply as virus shows signs of peaking in continental Europe Philip Georgiadis and Hudson Lockett

all Street opened sharply higher on Monday, joining in a global rally as investors welcomed signs that coronavirus outbreaks may be stabilising in some of the worst-affected countries. The benchmark S&P 500 opened up 3.9 per cent, while the Dow Jones Industrial Average and Nasdaq Composite recorded even stronger gains at the start, with each more than 4 per cent higher. London’s FTSE 100 rose 2.5 per cent in afternoon trading, while the pan-European Stoxx 600 was 3.1 per cent higher. The virus has shown signs of peaking in continental Europe, as the daily death toll in Italy, Spain and France slows. Investors have also been encouraged by signals

that some governments will consider easing lockdowns that have been imposed across much of the region, dragging on economic activity. Spain reported the fourth consecutive decrease in its daily death toll on Monday, while Austria is set to become Europe’s first country to roll back stringent quarantine measures, with plans for shops to open as early as next week. “The ongoing slowdown in the growth of new cases is giving investors some hope that the lockdowns will be gradually eased later this year and thereby allowing global activity to pick up,” said Lee Hardman, currency analyst at MUFG Bank. There were 71,418 new cases of Covid-19 confirmed worldwide on Sunday, making the lowest daily rise for six days. US president Donald Trump said www.businessday.ng

he saw “light at the end of the tunnel” on Monday, while New York state reported its first daily drop in new cases on Sunday since the crisis began. But Andrew Cuomo, the state’s governor, warned it was too soon to tell if the number of cases had peaked. Government bonds slipped as investors embraced riskier assets. The yield on the US 10-year Treasury rose 0.07 percentage points to 0.66 per cent. Yields rise as prices fall. Optimism spread throughout markets despite evidence that the virus is plunging the global economy into its sharpest recession since the Great Depression. The mood is ‘buy the dip’ at the first sign of the pandemic infection curve flattening Kit Juckes, Société Générale “The mood is ‘buy the dip’ at the first sign of the pandemic infection curve flattening,” said Kit Juckes, a

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strategist at Société Générale, who advised caution. Two of Wall Street’s biggest banks were split on the outlook for markets. Morgan Stanley equity strategist Michael Wilson said “the worst is behind us” in a note to clients published on Sunday. “Bear markets end with recessions, they don’t begin with them, making the risk/reward more attractive today than it’s been in years,” he said. But JPMorgan’s equity strategists were more cautious in a Monday briefing, advising clients to look for new lows and “keep a defensive sector allocation.” Japan’s benchmark Topix added 3.9 per cent on Monday, while South Korea’s Kospi rose by the same margin. The latter now satisfies the technical definition of a bull market, up more than 20 per cent from its mid-March lows. @Businessdayng

Equities reached higher even as oil prices slipped on doubts that Saudi Arabia and Russia could quickly reach a deal to reduce global crude supplies. Brent crude, the international oil benchmark, sank 3.2 per cent to $33.05 a barrel while US marker West Texas Intermediate dropped 5 per cent to $26.90 a barrel. Both benchmarks earlier fell as much as 12 per cent after Riyadh and Moscow traded barbs over the weekend. The latest disagreement raised concern that a potential deal to cut supply and put a floor under prices may not be forthcoming. It is “clear that tensions between the Saudis and Russians are still high, and both are playing a blame game over who was behind the failure of the Opec+ meeting in early March”, said Warren Patterson, head of commodities strategy at ING.

Tuesday 07 April 2020

BUSINESS DAY

news Economic lessons for Nigeria amid coronavirus outbreak Harrison Edeh, Abuja

igeria has a lot of lessons to learn from the coronavirus outbreak, one of which is that it needs to build an economy with strong buffers. The country’s over-dependence on oil is no longer sustainable, according to Sam Amadi, former chairman, Nigerian Electricity Regulatory Commission (NERC). “We can’t solve our economic crisis of over-dependence on oil through usual economic policy making,” said Amadi, who currently lectures at Baze University in Abuja. “The crisis is rooted in the legal and institutional framework of the economy. That’s the sense of restructuring,” he told BusinessDay. Amadi said the country was largely a single commodity

economy and nothing would change as long as it remained more attractive to political elites. He further said Nigerians were talented and had significant brain power to become an industrial and innovative medium level economy but blamed its monoeconomy on lack of political will to diversify. “Our salvation lies in deemphasising oil economy and its freezing impact on creativity and innovation,” Amadi said. “We have to abandon the rentier economy that is serviced by oil and move to a productive economy built on innovation and enterprise,” he advised. He pointed out that Nigeria had been yoked to the neoliberal model and needed to unyoke itself to become a productive economy. “We missed the road when we abandoned industrial policy because of the failures

of the post-colonial planned economy,” the Imo State-born lecturer said. He explained that Nigeria must act like Asian countries and embrace developmental state strategically engaging the market to create industrial capacity, stressing that the country was at the right spot to leverage new technology to deepen capability for a real economy. “We have been sold the falsehood of economic development based on financialisation. So, most of our billionaires are bankers and traders and not manufacturers. We need to build solid economy,” he said. Amadi advised the Federal Government to review who captures subsidies and for what purpose they are meant. “This will show that most of these subsidies are rip-off by the well-off. So we may need to remove some of these subsidies and target better those that will

benefit from the subsidy,” he suggested. “Subsidy should be rarely allowed and allowed only when it benefits only the worse-off.” Amadi further said that the world would survive coronavirus but might struggle to survive the economic effects of the virus. “The figures are not yet in but we will witness severe recession that some people estimate could be to the degree of the 1930s global crisis,” he predicted. He said the world economy would receive a major hit as commercial and industrial activities shrink. “Unemployment is already a problem but will get worse as businesses struggle to survive. Countries will inject their economies with stimulus but these will not be enough to get the global economy to preCOVID-19 status,” he noted.

Alfred Adewale Martins (l), Catholic Archbishop of Lagos, and Ituah Ighodalo, senior pastor, Trinity House, during a courtesy visit to commemorate with the Archbishop on Abule-Ado blast and the death of Bethlehem Girls College administrator in Lagos.

Fayemi hails Ekiti Covid-19 response committee members …says accountability, transparency would be maintained

kiti State governor, Kayode Fayemi, has hailed members of the Covid-19 Response Resource Mobilisation Committee recently set up to mobilise and manage funds and projects in the state’s war against the coronavirus. Governor Fayemi, in his inaugural message to members of the committee, said he was humbled and honoured by their positive response and readiness to serve the state at this crucial period, and assured them that transparency and accountability would be maintained in the utilisation of the resources mobilised. The governor said he was particularly happy seeing that many of the members had started generating ideas and contacts as soon as they accepted to serve on the committee. This, according to Fayemi, is an indication that the state would achieve its set goal of curtailing the dreaded covid-19 through the assistance of the committee. He revealed that much of the meetings of the 47-member committee would be held via teleconferencing and other technological means, in view of the need to observe social

distancing. “I’ve had cause to speak with almost everyone on this platform in the past few days and I’m truly humbled and honoured by your genuine expression of concern and your enthusiasm and readiness to serve the state in combating this existential threat. “I thank particularly our Grand Patron, Aare Afe Babalola, our patrons who are my predecessors in office, the chairman and members for your strong commitment to Ekiti State at this critical period. Indeed, some of you have started working with a relentless flow of ideas and contacts sent our way since you were contacted. “I want to assure you that the resources mobilized will be used for the purpose for which it is intended and we will maintain transparency and accountability all through the process. “We welcome suggestions and contributions on modalities for accomplishing the task ahead of us. Our mission is clear, the target has been attached to your letter of appointment - but nothing is cast in stones. The idea is to also leverage on your experience, expertise and networks in this collective effort. www.businessday.ng

Connak Foundation leads fight against Coronavirus in Abia GODFREY OFURUM

onnak Foundation, a non-profit organisation with headquarters in Abia State, has contributed to the fight against the deadly Covid-19 scourge in Abia State. The Foundation started off the campaign in Umuahia, the state capital and Aba, with some villages within and around the capital, with the distribution of 2000 hand sanitizers. The major focus for the donations is the indigent and lowincome people in the state who may not be able to afford the cost of sanitizers, especially at this period. To assist the medical personnel working in the Federal Medical Centre Umuahia with the fight to protect the citizens in the state, the Foundation also donated 10 cartons of hand gloves, 10 boxes of N95 ventilator facemask to the hospital, and these are to be used by the healthcare personnel. In addition, the Foundation is also carrying out major advocacy and enlightenment campaign through the distribution of 5,000 handbills on the prevention of Covid-19 in Umuahia and Aba, and radio jingles geared towards enlightening the people on safety measures to prevent being in-

fected. Speaking with journalists during the campaign, the Foundation’s medical adviser in the South East, Orji Nnorom, pointed out that the chairman of the Foundation, Ken Ukeagu (as a citizen of the state) was compelled by the strong passion he had always exhibited towards the wellbeing of the people in the state to help protect them as much as possible. Nnorom also recalled how the Foundation was involved in conducting medical outreaches yearly, besides other humanitarian ventures, which also include the massive medical outreach in Abia State in August 2019 (this outreach was in collaboration with FaithCare USA). He stressed that the Foundation would always support any venture geared towards the health, safety and wellbeing of Abians, and called on residents and indigenes of the state to adhere strictly to the safety measures and directives from the state government, WHO and reliable medical experts, which include washing their hands regularly with running water, adopt the social distancing lifestyle, ensure regular use of hand sanitizers and keep to the stay-at-home directives to avoid further spread and/ or contamination.

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Tech experts debunk fake news of 5G implications on human health Jumoke Akiyode-Lawanson

rofessors of technology and industry experts have debunked the falsehood making the rounds on social media about the hazardous health implications of fifth generation (5G) internet and its possible linkage to the ongoing coronavirus (Covid-19) pandemic. In the last few days, posts on Facebook, Twitter, Instagram and WhatsApp containing video, audio and text messages that suggest that the launch of the new 5G technology was the cause of the Covid-19 pandemic, have been circulating, and this has raised concerns and fears among Nigerians. According to industry experts, people have always displayed some fear each time a new technology arose no matter how baseless their arguments may be. “The fear attributed to mobile technology is that the signals (waves) are injurious to humans. Meanwhile, all mobile signals most fall within microwaves (extreme end of radio waves), which are non-ionising radiations. Ionising radiations like x-rays and gamma rays have far higher frequencies and exposure to human body may be injurious. However, are not used for mobile telecommunication,” said Tunde Popoola, professor of radiation physics in University of Ibadan, copied from Science Faculty platform to debunk the narratives in the trending audio on 5G. Popoola said, “The man’s use of the word ‘radioactive’ reveals that he is completely ignorant of what he claims to be explaining. The word Radioactive is from Radioactivity which is a completely different phenomenon from radio wave. Technology is more than speculation. It is a product of basic scientific theories.” It is important to note that

communication networks of 2G, 3G, 4G or 5G, and others to come in the near future, are generally in frequencies of the order of Giga Hertz (GHz or 10⁹ Hz). The bulk of energy from the sun (solar radiation) is in the UV frequency range (i.e.10¹⁵ Hz). Human beings have lived with UV radiation forever and so we cannot now be under threat from a radiation of energy over one million times less energy than UV radiation. However, from a regulatory point of view, Wakil Bako, director, technical standards and network integrity NCC, dismissed the claims of possible harmful radiation caused by 5G, while speaking at the Social Media Week in Lagos earlier this year. He explained that the radiation from the mobile devices was non-ionised and was not harmful to the populace. Although Nigeria has not commercially launched 5G, the Federal Government says it has begun critical review and study of the health and security implications of deploying 5G in Nigeria since it was test launched in November 2019. Ali Isa Pantami, minister of communication and digital economy, said in a press statement that no licence had been issued for the deployment of 5G in the country. “President Muhammadu Buhari places a premium on the welfare, health and security of Nigerians. As such, our desire for technological advancement will never be at the expense of the health and welfare of our citizens. “Government will not act on the speculations only, but rather we will take an informed decision on 5G after due consultation with experts and the public. I have also directed the NCC to engage citizens on any questions or concerns they may have regarding 5G,” Pantami said.

Funke, husband sentenced to 14-day community service for violating social distancing law Joshua Bassey

unke Akindele-Bello, popular Nollywood actress, and her husband Abdulrasheed Bello, have been sentenced to 14-day community service for violating the Covid-19 social distancing law of Lagos State. The couple are also to pay a fine of N100,000 each in addition to another 14 days isolation. They were sentenced on Monday after pleading guilty to the offence of violating the law, pressed against them by the Nigeria Police Force. Both husband and wife were arraigned before chief magistrate Yewande Aje-Afunwa of the Ogba Magistrate Court 1, after they were arrested on Sunday evening by the operatives of the Lagos State police command. The couple had on Saturday, April 4, held a birthday party in their home in the Lekki/Ajah axis of Lagos, with numerous guests in attendance, thereby violating the social distancing law. The video of the birthday party had gone viral on the social media. Counsel to the couple, Abayomi Alagbada in his defence had pleaded for leniency on grounds that the duo were first offenders and respectable @Businessdayng

members of society with two young children. The prosecution led by the Lagos State attorney general, Moyosore Onigbanjo, had earlier asked the court to sentence the defendants accordingly, having pleaded guilty to the charge Bala Elkana, the spokesperson of the Lagos Police Command, had issued a statement confirming the arrest of Funke on Sunday. “The attention of state Police Command was drawn to a viral video showing large number of persons mainly in the entertainment industry on an estate on Ajah, Ibeju-Lekki axis. “They were celebrating a birthday party organised by Funke Akindele-Bello and her husband. “Police detectives from the state CID, Yaba, were promptly drafted to the location and Akindele was arrested,” said Elkana in a statement. He explained that efforts were being intensified to arrest the remaining persons in the video, among who are Azeez popular musician, Azeez Fashola (a.k.a Naira Marley). Elkana advised those involved to voluntarily report at the CID Yaba “in their best interest or risk being declared wanted.”

Tuesday 07 April 2020

BUSINESS DAY

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Tuesday 07 April 2020

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Monday 06 April 2020

Top Gainers/Losers as at Monday 06 April 2020 LOSERS

GAINERS Company

Opening

Closing

Change

FLOURMILL

N20.5

N21.5

WAPCO

N8.95

N9.8

0.85

ACCESS

N6.05

N6.65

0.6

GUARANTY

N17.6

N17.85

0.25

N22

N22.2

0.2

Company

ASI (Points)

Opening

Closing

Change

N544.5

N490.1

-54.4

DANGCEM

N125

N117

-8

BUACEMENT

N35.3

N31.8

-3.5

VOLUME (Numbers)

BOCGAS

N4.05

N3.65

-0.4

VALUE (N billion)

NAHCO

N2.6

N2.34

-0.26

SEPLAT

DEALS (Numbers)

MARKET CAP (N Trn)

20,669.38 4,184.00 4,127,609,403.58 4.127

Stories by Iheanyi Nwachukwu

Peter Ashade, Group CEO, United Capital

FCMB Group records N188bn full year revenue ....grows profit to N20.1bn

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Global market indicators FTSE 100 Index 5,582.39GBP +166.89+3.08%

Nikkei 225 18,576.30JPY +756.11+4.24%

S&P 500 Index 2,615.21USD +126.56+5.09%

Deutsche Boerse AG German Stock Index DAX 10,075.17EUR +549.40+5.77%

Generic 1st ‘DM’ Future 22,021.00USD +1,064.00+5.08%

Shanghai Stock Exchange Composite Index 2,763.99CNY -16.65-0.60%

10.771

United Capital raises N5.3bn in Commercial Paper issuance nited Capital Plc, a leading PanAfrican financial and investment services Group has successfully raised N5.3 billion in a Series 1 and 2 Commercial Paper (CP) issuance, under its N20billion Programme registered with the FMDQ Securities Exchange. The Commercial Paper issuance, which was approved by Company’s shareholders at the Annual General Meeting of March 2018, was subjected to regulatory approvals and borne out of the Group’s strategic initiatives, aimed at

SEC acting DG elected into IOSCO Board ... to represent Africa/Middle-East Regional Committee

Stanbic IBTC partners FATE Foundation to set up more COVID-19 treatment wards

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Thebigread

BUSINESS DAY Tuesday 07 April 2020 www.businessday.ng

Threat of catastrophe stalks developing world Governments are fighting to keep the coronavirus pandemic at bay and their economies afloat David Pilling, Jonathan Wheatley, Andres Schipani and Amy Kazmin

a ra Me n d oz a sells remote controls in El Alto, a sprawling and impoverished satellite city of the Bolivian administrative capital, La Paz. Her mother hawks salteña meat pies in the outdoor market and her father drives a taxi along its rutted streets. Now, with armoured vehicles in the neighbourhood imposing a lockdown, none of her family is supposed to be outside. “I understand the fight against coronavirus, but it is hard to enforce in a place where we need to go to sell every day in order to eat,” says the 25-year-old, who is one of millions of Bolivian workers struggling to survive as the informal economy lurches to a standstill. After weeks in which prosperous countries from Italy to the US have battled both the pandemic and its economic fallout, the fight against coronavirus is moving to a new front. Across Africa, Latin America and much of Asia, governments with far less firepower than their western counterparts are figuring out how to keep the pandemic at bay and their economies afloat. It is not clear they can do both. With Europe and the US, the virus arrived first, forcing a public health response, and then — as the enormity of the crisis struck home — a massive fiscal and monetary injection. In much of the developing world, the sequence has happened in reverse, with the economic devastation of coronavirus arriving before the epidemic itself. States that were already financially stretched have been hit by the sudden stop of global economic activity, depriving them of the wherewithal to mount anything like a western-style response. Oil exporters in Africa and Latin America have watched the price of Brent crude collapse from $70 a barrel in January to less than $30 this week, leaving their budgets in tatters. Emerging market assets have been dumped on a scale never seen before. According to the Institute of International Finance, foreign investors have withdrawn $95bn from stocks and bonds since they woke up to the crisis on January 21. That is four times the outflows in the same period after the start of the 2008 global financial crisis. As capital is pouring out, remittances — the lifeblood of economies from the Philippines to Nigeria — are dwindling. Many foreign workers in western cities, especially those working as hotel staff, chefs or drivers, have lost their jobs. It does not stop there. With flights cancelled, Kenyan farmers can no

longer sell cut flowers or mange touts to European supermarkets. Tourism has collapsed. Sites such as Machu Picchu in Peru are closed. East Africa’s game parks are deserted. In Thailand, keepers say that without tourist revenue to pay for food their elephants risk starvation. India was already in a protracted slowdown when the country’s coronavirus caseload began to climb at the start of March. But Prime Minister Narendra Modi’s abrupt decision to impose a 21-day nationwide curfew has thrown the economy into a tailspin. Mr Modi gave no warning of the impending lockdown, making it impossible for businesses to maintain even skeletal operations. That has ruptured supply chains for essential items such as food and pharmaceuticals, soap and disinfectant. Capital Economics forecasts that India, with its 1.4bn people, will grow at just 1 per cent in 2020 — that would be its worst performance in four decades. Even in Brazil, where President Jair Bolsonaro has scoffed at the virus as a mere “sniffle”, governors in regions covering 200m of the country’s 210m people are closing non-essential businesses and calling on people to stay home. After the economic crisis came the virus itself. Africa, which had practically no cases a month ago, now has more than 7,000, with

clusters of infections in almost every one of its 54 countries. Cases in Brazil alone quadrupled in the past week to more than 8,000. While that is still behind Europe and the US, the numbers are rising rapidly and public health experts worry the pandemic could tear through tightly packed slums and informal settlements in some cities. Nor do poorer countries have robust health systems. Africa is the worst off. Governments on the continent spend an average per capita of $12 a year on health compared with $4,000 in the UK, according to the OECD. “Everybody is talking about ventilators,” says Ngozi Okonjo-Iweala, a former Nigerian finance minister. “I hear some countries have less than 100.” Some experts hope that generally younger populations will limit the number of fatalities. Africa has a median age of 19.4 against 40 in Europe. Of the continent’s 1.2bn people, only about 50m are over 60. In India, the median age is 27. In Latin America, 31. There is also speculation that the virus might spread more slowly in hot and humid climates, though evidence for this is patchy. Set against that are the number of people who are malnourished or whose immune systems are compromised by HIV and other conditions, especially in Africa. That could mean the death rate is actually higher. Bill Gates has warned that 10m peo-

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As capital is pouring out, remittances — the lifeblood of economies from the Philippines to Nigeria — are dwindling. Many foreign workers in western cities, especially those working as hotel staff, chefs or drivers, have lost their jobs

ple could die in Africa if the virus is not contained, while Imperial College London estimated the global death toll — which at the moment is under 60,000 — would have reached 40m had the world not responded. That leaves developing countries struggling to figure out how to balance the public health response with the risk of economic collapse. Cyril Ramaphosa, South Africa’s president, last week imposed a three-week lockdown before a single coronavirus death. In Nairobi, Kenya’s capital, authorities have stopped short of a full lockdown, instead imposing social distancing and a nightly curfew. Patrick Gathara, a Kenyan political cartoonist, wonders if a western-style shutdown is sustainable or whether people will rebel. “It’s all very well to say lockdown, but what does it mean if people are starving in their houses?” he asks. Dele Olojede, a Nigerian Pulitzer Prize-winning journalist now living in South Africa, says he understands the dilemma. “In shantytowns or townships people don’t have the wherewithal to stockpile food and social isolation is physically impossible,” he says. Yet he still thinks that lockdowns of limited duration may help buy time. He has been impressed at the decisiveness of the South African government, which last week sent out a fleet of 67 shiny white coronavirus-testing vans capable of processing results in 45 minutes. In Nigeria, which was quick to snuff out an Ebola outbreak in 2014, authorities were carefully scanning patients at Lagos airport in February when travellers were still breezing unchecked through US airports. Still, Ricardo Hausmann, a Venezuelan development economist at Harvard University, is not holding out great hope. “The situation in the advanced economies is likely to be much more benign than what developing countries are facing.” Ms Okonjo-Iweala, now chair of Gavi, the Vaccine Alliance, says the health and economic impacts

are intertwined: “If we don’t deal appropriately with the health part, the economics are going to fall completely apart.” She is impressed by the range of measures mustered on her own continent, including emergency spending, tax cuts and experiments with quantitative easing. Some African countries are planning mobile money transfers to people struggling to survive. “But if you look at the extent of the measures they’ve taken, it’s about 0.8 per cent of gross domestic product,” she says. “They don’t have the fiscal space to be able to do very much. For these countries to come out of it, you need to look at something like a stimulus in the range of those mounted in the west — say 10 per cent of GDP.” Kristalina Georgieva, managing director of the IMF, estimates that emerging countries may need as much as $2.5tn in support. If the magnitude of the crisis for developing countries is far worse than in 2008, so far the international response has been less impressive. Rich countries have battened down the hatches as they fight the pandemic themselves. The US and China, the two global superpowers, have bickered over the cause and origin of the global spread, hampering an international response. The IMF has taken some action, making $50bn available in quick-release funds for which 85 countries have already applied. Unctad, the UN’s trade and development agency, is calling for an immediate issuance of $1tn in new special drawing rights, a proxy for foreign reserves, and for the richest countries to pool their allocations and make them available to the poorest. Richard Kozul-Wright, Unctad’s director of development strategies, says advanced economies should see this not as a humanitarian gesture but as an act of self-insurance. “If the outbreak really does catch hold in the south, there’s no way the advanced economies will be able to stop the blowback.” Vera Songwe, executive secretary of the UN Economic Commission for Africa, worries that food inflation could spark riots across the developing world. She is disappointed with the global response. “If we need an example of what the lack of multilateralism looks like, we’re seeing it today,” she says. “If one of us has the virus, all of us have it.” Mr Hausmann says developing economies have been left in the lurch both in terms of their ability to fight the pandemic and to counter its economic impact. Even in the best of times, he says, they are financially stretched. “And these,” he points out, “are not the best of times.”

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