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Armstrong’s strong arm tactics threaten Nigeria’s $1bn broadcasting industry ... Amended code will kill broadcasting in Nigeria

said would grow as the current administration’s digitisation policy bears fruit. Less than four years after making this statement, a parastatal under Lai Mohammed’s supervision is pushing through a piece of regulation that promises

to completely upend the basis of the Nigerian broadcast industry and destroy his projection of a thriving billion-dollar industry. The Acting Director General of the Nigeria Broadcasting Commission (NBC), Armstrong Continues on page 12

I In letter to NERC, DisCos exonerate selves from poor electricity market I n October 2016, Information Minister Lai Mohammed stood before an audience at the Biennial Conference of African Broadcasters (Africast) in Abuja and declared

proudly that policies governing Nigeria’s broadcast media space would shortly see it exceed $1bn in annual revenues. From the first entry of private capital into the space following deregula-

FRONT PAGE EDITORIAL

tion in 1992, Nigeria now boasts almost 900 radio and television stations, a number the minister

Facts show they are not entirely blameless

ISAAC ANYAOGU

L-R: Lilian Chukwuemeka, assistant director, Lagos zonal office, Securities and Exchange Commission (SEC); Steven Falomo, director, Lagos zonal office, SEC; Oscar Onyema, CEO, Nigerian Stock Exchange (NSE); Ariyo Olushekun, chairman, Capital Market Support Committee for COVID-19 (CMSCC); Bukola Rufai, deputy director, Lagos zonal office, SEC, and Jude Chiemeka, head, trading business division, NSE, during the NSE’s donation of cash and an ambulance totalling N60m to support CMSCC in the fight against COVID-19, yesterday.

n a letter to the Nigerian Electricity Regulatory Commission (NERC) dated June 29, distribution companies (DisCos) noted that COVID-19, debt-laden balance sheet, stringent rules on Continues on page 30

Inside

US Consulate holds webinar on Lagos traffic management today P. 2

Tuesday 07 July 2020

BUSINESS DAY

news Violent crime, kidnap top list of risks in Nigeria

… 4 geo-political regions classified as medium to high risk … 2 others classified as high to extreme risk STEPHEN ONYEKWELU

ast month recorded a surge in the number of reported cases of violent crime, abductions, ritual killings, cult clashes and armed robbery across Nigeria. According to the June 2020 Country Risk Report Nigeria by PR24 Nigeria, in the SouthEast and South-South geopolitical regions, medium- to high-security risks in the form of violent crime was the most present threat this period, and reports of abductions were recorded across the region.

States witnessed several cases of kidnap for ransom, protests and communal clashes, and there were significant reports of road transport accidents (RTAs), flash floods, and civil unrest as well. States most affected during this period include Edo, Delta, Rivers, Imo, Anambra, Delta, Akwa-Ibom, Enugu, and Abia. The risk report recommends a proper journey management plan to mitigate the risk of abduction. As an added measure, it advises contact

Continues on page 30

Recognise changing dynamics for SMP 2020-2024 to create digital economy – experts urge NCC ...Hopeful alignment of NBP 2020-2025 with new SMP may solve broadband challenges Jumoke Akiyode-Lawanson

elecommunication industry watchers are wondering how effective the strategic management plan (SMP) 2020-2024 will be, considering that challenges like inadequate infrastructural capacity, insufficient network backbone creating congested networks, multiple taxes, and others meant to be tackled with the SMP of 2014-2018, still persist in Nigeria today. This comes as the Nigerian Communications Commission (NCC) designed a new plan – the SMP 20202024 - to bring the benefits

of a digitised economy to the citizens, believing that with digital transformation is key to growth in different industries, enterprises, government agencies and the economy at large. The NCC, under the Ministry of Communications and Digital Economy, recently released a strategic management plan (SMP) 2020-2024, to act as a pedestal to drive the implementation of the Federal Government’s vision for a fully digital economy by the end of 2024. A digital economy is an economy with smart cities

Network failures, cashless policy push deprive bank customers of cash at ATMs on weekends ... Currency in circulation falls 2.55% in June Hope moses-Ashike

t was a cold, drizzly Friday evening in June. Osamuede was completely tired out and frustrated. He had visited four bank ATMs in the vicinity of Point Road/Liverpool Road in Apapa GRA, Lagos in desperate search of cash for his weekend expenses, but there was none to withdraw. “This is the height of frustration!” Osamuede lamented. “All the ATMs are either out of service or temporarily unable to dispense cash. The only functional one pays N10,000 per withdrawal and takes like forever to pay one customer, and the crowd there is discouraging.” Many bank customers are complaining of difficulty withdrawing cash from the ATMs mostly during weekends, either due to network failures or shortage of cash

at the ATMs. It appears the deposit money banks are deliberately starving their customers, some say. Uju Ogubunka, president, Bank Customers Association of Nigeria (BCAN), even though he could not ascertain the immediate cause of the development, said it could be that the authorities are trying to encourage people to do transfers rather than handling cash. “You know we are talking about cashless economy. So, if you are talking of cashless economy you don’t support bringing cash and spending money to print the cash, so you go with a limited quantity of cash,” Ogubunka said. The Central Bank of Nigeria (CBN) in 2012, after several engagements across multiple stakeholders, introduced the cashless policy aimed at curbing excess handling of cash or reducing the volume of cur-

rency in circulation. The CBN department in charge of currency operations expended the sum of N64 billion printing banknotes in 2018 compared with N49.5 billion in 2017, indicating an increase of N14.51 billion or 29.31 percent. A total of N5.63 billion was expended on air charter, compared with N4.02 billion incurred in 2017. The sum of N662.21 million was also expended on currency notes disposal. Currency in circulation declined by 2.55 percent to N2.29 billion on June 30, 2020, compared to N2.35 billion recorded on May 31, 2020, data from the CBN’s website indicated. But the inability of bank customers to withdraw cash from ATMs during weekends is dangerous and hazardous, Ogubunka said. “And it is also not going to encourage people to stay

without cash because you may find people piling up cash in their homes. In that case, the economy suffers because when you hoard cash, you are hoarding velocity of money,” he said. BusinessDay checks around Lagos on weekends found bank customers running from one ATM to another desperately looking for cash to withdraw, anger, and frustration written on their faces. At Ajah, Langbasa axis, close monitoring showed many bank ATMs were either experiencing a shortage of cash or network failure. At Abule-Ado, Satellite Town area, the story was much the same as only one out of many ATMs of three banks within a cluster was dispensing cash. The rest were out of service. At Mazamaza, on a Saturday morning, the saving grace

Continues on page 30

US Consulate holds webinar on Lagos traffic management today AMAKA ANAGOR-EWUZIE

he United States Consulate General Lagos has perfected plans to hold a virtual discussion on Lagos ‘Transportation and Traffic Webinar’ in Lagos today. The conference themed, The Never-Ending Story, Lagos Traffic Congestion: What Can be Done? Will it be Done?, will have Robin Hutcheson, director of public works, Minneapolis, USA, as the keynote speaker. It is expected that Claire Pierangelo, consul general, United States Consulate General, and Frank Aigbogun, publisher, BusinessDay, will deliver the welcome remarks at the conference. The conference would have a panel session with three panelists that include Fredrick Oladeinde, Lagos

State commissioner of transportation; Innocent Ogwude, professor of transport management and former acting vice chancellor, Federal University of Technology, Imo State, and Tola Odeyemi, managing partner, XFA Advisory Uber. Those interested in the discussion are expected to hook up using www.facebook.com/ usinnigeria, at 2pm. Recently, traffic situation has worsened in Lagos State, such that commuters and motorists spend quality manhour on roads travelling from home to the office, and office to home on a daily basis. This has resulted in huge loss for businesses whose workers spend large chuck of the working hours on the road commuting to work. Many Lagos residents have also lost their lives and valuables to traffic robbers. www.businessday.ng

Senior Secondary School 3 students at Oluyole High School in their classroom during a partial resumption of schools after NAN COVID-19 pandemic lockdown in Ibadan, Oyo State.

Here’s what happens in office space market as companies embrace new normal Chuka Uroko & Okafor Endurance

he ‘new normal’ of working remotely, mainly from home, triggered by social distancing as one of the preventive measures for the deadly coronavirus pandemic is impacting negatively on commercial real estate, BusinessDay findings have shown. While Nigeria’s real estate industry, like in other parts of the world, has incurred losses as a result of the pandemic, the transition from physical office building to remote working, which has been largely embraced by many companies, is expected to bring more harm to

the office space market. The situation is already dire in many companies. Whereas some operate with 60 percent of their staff physically present in compliance with health and safety protocols, especially social and physical distancing, others operate virtually or with lower percentage of their staff. “The impact of companies deciding or encouraging their staff to work from home will be significant on commercial office space market postCovid-19. Existing users may give up more than 40 percent of the spaces they currently occupy,” MKO Balogun, CEO, PFI Global affirms, adding that new office developments

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will not be able to command desired patronage or rent. By the second half of 2019, the total stock of A-grade office space in Nigerian market was 110,000 square metres. The year-to-date completion was 45,000 square metres while the year-to-date gross take-up was 20,100 square metres, leaving the market with an estimated 41 percent vacancy rate. Landmark Africa Group, developer of the expansive Landmark Village in Lagos, which is one-stop shop destination for living,workingandleisure,saysits Landmark Towers is largely unoccupied. “Not many people are there because of the pandemic; most of our tenants are working remotely,” Paul Onwuanibe, the @Businessdayng

Group’s CEO, told BusinessDay. Onwuanibe had disclosed that the company was considering 1-2 months rent-free period for their tenants to cushion the impact of the Covid-19 pandemicontheirbusinesses.“Ithas beentoughforeverybody,butwe hope to get over it soon,” he said. Another medium-size company, which did not want its name mentioned, says it is working with only 60 percent of its staff present at any given time, meaning that it will be giving up 40 percent of the office space it occupies. “We have already decided to give out that space for co-working, which people could rent to work for a few hours and leave,” an official of the company revealed.

Tuesday 07 July 2020

BUSINESS DAY

news

Respite for broadcast stations as FG grants 60% debt forgiveness DANIEL OBI & GODSGIFT ONYEDINEFU

he Federal Government has granted 60 percent debt forgiveness to all debtor broadcast stations in the country, effective July 10, 2020, to help ameliorate the impact of Covid-19 pandemic in the industry. The total debt owed by several radio and TV stations is N7.2 billion, BusinessDayunderstands.Thismeans that N4.32bn has been forgiven the broadcast stations by the Federal Government and they are now required to pay some N2.88bn. Lai Mohammed, minister of information and culture, who made this known on Monday in Abuja, also informed that the existing licence fee is further discounted by 30 percent for all Open terrestrial radio and television services effective July 10, 2020. The minister said the debt forgiveness and discount is one of the recommendations of the National Broadcasting Commission (NBC) to revamp the broadcast industry and help reposition it for the challenges of business post-Covid-19. Theministerexplainedthatthecriterion for enjoying the debt forgiveness isfordebtorstationstopay40percentof

their existing debt within the next three months. He noted that many of the stations are faced with the reality that their licences will not be renewed, in view of their indebtedness. “Any station that is unable to pay the balance of 40 percent indebtedness within the three months window shallforfeittheopportunitytoenjoythe stated debt forgiveness. The effective date of the debt forgiveness shall be July 10th to October 6th, 2020,” he said. Mohammed noted that the debt forgiveness shall apply to functional licensed Terrestrial Radio and Television stations only and shall not apply to pay TV service operators in Nigeria. The minister said the measures are in addition to the two-month licence-fee waiver granted to terrestrial broadcaststationsinthecountrybythe NBC, as part of efforts to ease the negative effects of the Covid-19 pandemic on the broadcast industry. “The Federal Government has made these interventions with a view to re-positioning the broadcast industry to play its critical role of promoting democracy and good governance in Nigeria. It is our expectation that the sector will cash in on this unique opportunity to make itself an effective catalyst for national development,” Mohammed said.

China raises concern over suspected bubonic plague CALEB OJEWALE

s the world continues to grapple with the ravaging Covid-19 pandemic, there are fears of another disease outbreak in China’s Northern region, as authorities announced precautions after a suspected bubonic plague case was reported in the Inner Mongolia Autonomous Region. The Bayannur municipal health commission noted in a press release that the people’s hospital in Urad Middle Banner reported the suspected bubonic plague case on Saturday via state owned Xinhua News Agency. Local authorities in Bayannur on Sunday issued a third-level warning for plague prevention and control that will last till the end of 2020,

the commission said. Subsequently, authorities have requested the public to beef up self-protection as the city has the risk of people-topeople infections, warning against hunting and eating of animals that could cause plague infections. The ‘Black Death’ which killed about 50 million people across Africa, Asia and Europe in the 14th century was caused by the Bubonic plague, according to the BBC. The disease is typically transmitted from animals to humans by fleas and while it can now be treated by antibiotics, if left untreated, the disease has a 30-60 percent fatality rate. Symptoms of the plague include high fever, chills, nausea, weakness and swollen lymph nodes in the neck, armpit or groin.

Oputa takes over as RMP of EY West Africa

nthony Oputa has assumed office as Regional Managing Partner (RMP) for the West Cluster in Africa as well as the office of the Nigerian Country Managing Partner/Leader of Ernst & Young (EY) with effect from 1st July 2020. As regional managing partner, he is also a member of the EY Africa Executive Leadership. Tony joined EY as the financial services sector leader and chief operating officer for West Africa in August 2018. Since joining EY, he has demonstrated his passion and ability for growing and enhancing the EY brand in the market and contributed a lot to the recent successes recorded by the firm with client pursuits. He is a highly respected professional with over 20 years’ experience

spanning different sectors. He takes over from Henry Egbiki, who recently retired from the firm after 33 years of service. Henry as the regional managing partner was pivotal to the growth EY enjoyed in Nigeria and in the West Cluster. Tony thanked Henry Egbiki for his exceptional leadership qualities, adding that under his leadership, EY grew in leaps and bounds as the profile and brand of the West Africa firm has improved significantly. Speaking on his new role, Tony, said that the focus of his leadership will be to ‘drive sustainable growth and build a resilient business. At the core of this will be collaboration and empowering out teams to take the whole of EY to our clients, providing them with truly exceptional client service’. www.businessday.ng

Commanding officer, 312 Artillery Regiment, Kalafanzin Barracks, Adamu Muhammad, presenting a bag of fertilizer to a farmer as part of Nigerian Army Day celebration at Kankomi village in Chikun Local Government Area of Kaduna State. NAN

FX shortage impedes new investment in Nigeria -EFG Hermes LOLADE AKINMURELE

igeria’s foreign exchange shortage, which has blocked foreign investors from repatriating funds and forced the Central Bank of Nigeria (CBN) to resort to demand management strategies last seen in 2016, has become a deterrent to fresh foreign capital inflows, according to financial advisory and brokerage firm, EFG Hermes Nigeria. Hammered by the fall in oil prices, its major earner of dollars, Nigeria has struggled to meet the dollar demand of investors and importers, leading to a backlog that is frustrating investors and manufacturers. The foreign exchange shortage has also made Nigeria less

attractive in the eyes of prospective investors and monetary authorities in Nigeria need to act swiftly to aid trapped investors seeking to repatriate their funds out of the country, so that new inflows may come in, according to Ali Khalpey, CEO of EFG Hermes. “Liberalisation policies need to be accelerated, you can’t trap people in markets because once they are able to get out, they won’t come back again,” Khalpey said during the firm’s first-ever virtual conference. “Once you cannot take money out, you cannot put money in, so the authorities should help companies facilitate the repatriation of funds,” Khalpey added. The National Bureau of Statistics (NBS) reported that total capital importation into Nigeria fell by 31.19 percent year-on-year

Naira weakens as external reserves decline by $52.10m HOPE MOSES-ASHIKE

igeria’s currency on Monday weakened across black market and the Nigerian Autonomous Foreign Exchange Fixing (NAFEX) as liquidity slumps. Naira depreciated by N1.00k as the dollar traded at N459 on Monday from N458 since almost two weeks ago on the black market. The local currency also fell by N0.50k after the dollar was quoted at N386.50k on Monday as against N386.00k quoted on Friday and Thursday last week at the Investors and Exporters (I&E) forex window, data from the FMDQ indicated. However, naira was also stable at the retail bureau and the official market where the dollar was quoted at N460 and N361.00k. Earlier in the morning, the foreign exchange market opened with an indicated rate of N387.00k at the I&E window, which represented a marginal depreciation of N0.14k when compared with N386.86k opened with on Friday last week. The foreign exchange daily turnover declined significantly by 90.34 percent to $10.15 mil-

lion on Monday from $105.05 million recorded on Friday last week. The Central Bank of Nigeria (CBN) recorded FX reserve drawdown for the fifth consecutive week as forex outflows outpaced inflows. External reserves declined by $52.10 million week-to-date (WTD) to $36.16 billion. The I&E FX market remained subdued due to tight liquidity conditions. Naira weakened by 0.13 percent as the dollar was quoted at N386.50 as compared to N386.00 on the previous day. Most participants maintained bids between N383.00 and N391.45 per dollar, a report by FSDH research stated. At the money market, the Nigerian treasury bills closed on a positive note on Monday, with average yield across the curve declining by 1 basis point to close at 2.08 percent. In the Open Market Operation (OMO) bills market, average yield across the curve declined by 1 basis point to close at 5.15 percent. Money market rates are likely to decline further later in the week, as OMO maturities worth N16.00 billion are expected to support the system liquidity.

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in the first quarter of 2020 to $5.85 billion from $6.30 billion in the first quarter of 2019. Inflows are expected to slow even further in the second quarter partly due to the slow pace of reforms in Nigeria. Unifying its multiple exchange rates is a place to start for the CBN in unlocking foreign capital that can help ease the illiquidity in the foreign exchange market. The CBN governor, Godwin Emefiele, has assured investors of the country’s plans to achieve a convergence of the multiple rates around the Investors and Exporters rate. Although the apex bank seems to be making progress in unifying the multiple rates after weakening the official rate to N360/$ from N306/$ in March and devaluing the currency by 5 percent during a special market intervention last

week, the snail-paced movement in unifying the rates has left investors uninspired. There are currently four rates in Nigeria. There’s the N360/$ official CBN rate, the N380 SMIS rate, the N386/$ Investors and Exporters window or NAFEX rate, and the black market rate of N450/$. This puts the gap between the official and unofficial or black market rate at N90/$. “There is a lot of uncertainty as regards consumption due to the huge gap in the exchange rate,” said Kato Mukuru, head of Frontier Research at EFG Hermes. “People are not going to spend money when they are not sure about price stability because the exchange rate is key to everything,” Mukuru said during the virtual conference.

Fidelity Bank appoints Chike-Obi chairman as Ebi retires

idelity Bank has named Mustafa Chike-Obi to replace Ernest Ebi, its retiring board chairman. Chike-Obi is currently the executive vice chairman at Alpha African Advisory. He has over 40 years of experience in investment banking and the financial services sector, working with reputable global investment banking and asset management firms. He provides overall leadership at Alpha African Advisory and has direct oversight over the capital raising division. Prior to joining Alpha African Advisory, he was the inaugural CEO, Asset Management Corporation of Nigeria (AMCON), a Federal Government backed institution, established to resolve the problem of non-performing loan assets of Nigerian Banks after the 2008 global financial crisis. Chike-Obi was also the founding president at Madison Advisors, a financial services advisory and consulting firm in New Jersey, specialising in hedge funds and private equity investment advice. He holds a Bachelor’s degree in Mathematics from the University of Lagos and an MBA from Stanford University Graduate @Businessdayng

School of Business. Meanwhile, the bank has announced that two of its board members: Ernest Ebi who has been serving as chairman, board of directors and Seni Adetu who has been serving as an Independent non-Eexecutive director, having successfully completed their tenure in accordance with the bank’s internal governance policy, will be stepping down. Ebi will, however, continue in the role until the in-coming chairman assumes office, as part of the process of ensuring a smooth and successful transition. Managing director/CEO, Fidelity Bank, Nnamdi John Okonkwo, commended the contributions of the outgoing board members, saying that the board and the bank has benefited immensely from their experiences.

Tuesday 07 July 2020

BUSINESS DAY

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BUSINESS DAY

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Tuesday 07 July 2020

BUSINESS DAY

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Experts canvass use of tech to overhaul Nigeria’s unstable healthcare system Anthonia Obokoh

xperts say that based on emerging technology, the future of Nigeria’s health will likely be driven by digital transformation enabled by radically interoperable data, artificial intelligence (AI). According to the experts, open and secure platforms are convergence that will drive much of this change that requires new definitions of healthcare and how it will be delivered and experienced in the future. They urge the government to pay more attention to the health sector and engage in activities to move the sector to more advanced and globally accepted standards, especially through increased fund allocation and advanced technology. At a webinar meeting organised by Ernst and Young (EY), themed “Disruption, convergence and the healthcare sector of tomorrow’, Temi Awogboro, executive director, Evercare Hospital Limited, said that Covid-19 is accelerating the need for these innovations to essentially improve the way healthcare is delivered, adding that Nigeria among other Afri-

can countries has the potential to leapfrog. “What we are seeing in other markets are delivering more personalised and integrated healthcare to patients, therefore, enhancing provider productivity and ultimately improving outcomes and accessibility in the market,” she said. Today, Nigeria health care system is a collection of disconnected components (health plans, hospital systems, pharmaceutical companies, medical device manufacturers). Nigeria reports healthcare spend of $16.5 billion 80 percent of which is private spend, mostly out of pocket. Over the last decade, the budgetary allocation has averaged 5 percent of the national budget, significantly lower than the Abuja declaration recommended target of 15 percent agreed by a crosssection of African countries. Akin Abayomi, commissioner for health, Lagos Sstate, said in his keynote speech that the convergence between public and private sectors is an important one for us. Because we do understand 70 pterce of litigation seeks medical care in the private sector. He said that the public is protected from a burn provi-

sion. The private sector is in harmony with the standards and the regulatory function played by the government. The commissioner added that Nigeria should take advantage of the real root cause of Covid-19 as a global disruption of the ecosystem and increasing opportunity for zoonotic events to unpack what that deeper problem is, and moving forward, find strategies for governments and the role of money as the custodian to get Nigeria to the right level. Another panelist, Eyong Ebai, regional lead, General Electric (GE) Healthcare, said that there is a direct correlation between health and Artificial Intelligence (AI) which currently reflects on health technology. He said that AI is seen as the key driver of healthcare delivery in the future as it is essentially used for complex algorithms or software to emulate human cognition in the analysis or interpretation of complicated medical healthcare data and deliver improved outcomes. Damilola Aloba, partner, Trans-action Advisory Service, EY recommended revamping the healthcare system in Nigeria and strategically incorporating funding to be made available for players in the sector.

DRASA partners government to tackle COVID-19 Gbemi Faminu

RASA Health Trust, a non-profit public health organisation established to sustain the legacy of the late Ameyo Stella Adadevoh, who in 2014 swiftly identified and contained the index case of Ebola, has joined forces with the Lagos State government, Coalition Against COVID-19 (CACOVID) and other partners to tackle the spread of the virus. Since its inception, DRASA has established various health programmes, including its flagship Infection Prevention and Control (IPC) programme which trains and equips health workers. IPC – a discipline that aims to prevent and control the spread of infections in healthcare facilities and communities – helps prepare health workers for the kind of public health threat Nigeria is currently facing with the COVID-19 pandemic. Niniola Williams, managing director, DRASA said the lack of trained personnel is

a problem which requires more attention than it is being given, This, she says, fuels the drive of the organisation to focus on training and building capacity for health workers, adding that through the IPC program, DRASA has trained over 1,200 health workers to ensure quick identification, isolation, and treatment of infectious patients while protecting themselves and the community at large. “The reason we focus on training and capacity building for health workers is because there is a big gap. There are many entities already investing in the infrastructure, equipment, and supplies required to have a strong health system and contain COVID-19 but few are focused on investing in the human resource required to make the response a success. That’s where DRASA comes in. “ IPC should be an important part of Nigeria’s health sector, yet many health facilities across Nigeria lack technical expertise and basic capacity in IPC and as the number of COVID-19 cases

continues to increase, it is clear that Nigeria does not have enough trained health personnel to manage a public health crisis of this magnitude” Williams said. Williams also mentioned the establishment of a training centre for disease and infection control “we are setting up Nigeria’s first-ever Simulation Training Center for Infection Prevention and Control which will allow DRASA scale up and train up to 10,000 health workers annually to strengthen the health sector and prepare hospitals and borders from whatever public health threat may come next. It will also keep health workers safe by reducing the chance of them getting exposed to dangerous diseases which is important considering Nigeria already has a shortage of health workers.” DRASA however called for funding, sponsorships, and partnerships from both private and public sector individuals and organisations to aid it in building the capacity of the country’s health workforce to tackle COVID-19.

Non-payment of salary: Lawmakers tell Sanwo-Olu to investigate LAWMA Iniobong Iwok

embers of the Lagos State House of Assembly have called on Governor Babajide Sanwo-Olu to investigate those behind a viral video where some sweepers working for the Lagos State Waste Management Authority (LAWMA) were protesting the non-payment of their salaries. The lawmakers made the call in a motion contained in the Lagos State House of Assembly Motion Number 22 moved by Desmond Elliot, (Surulere Constituency 1) along with other lawmakers during plenary on Monday. In a motion entitled “Need to enhance waste management in Lagos State,” Elliot stated that the house resolved to commend the efforts of the state government on waste management. The house condemned those behind the video that went viral on the issue of non-payment of the salaries of sweepers.

The house called on SanwoOlu to direct the commissioner for finance, accountant general, the commissioner for the environment and water resources, as well as the acting managing director of LAWMA to expedite action on the payment of all outstanding allowances of the sweepers. According to him, “Governor Sanwo-Olu should direct the commissioner for information and strategy in conjunction with the relevant agencies to sensitise members of the public on the need to dispose of their refuse properly and the importance of having waste bins in their respective houses. While stating that the house was mindful of the modern technology deployed by the state government to ensure a cleaner Lagos, he said that Sanwo-Olu should mandate the committee on the environment to investigate the activities of LAWMA to make their job more effective.

COVID-19: 201 health workers test positive in Edo IDRIS UMAR MOMOH & CHURCHILL OKORO

do State government says 201 health workers have tested positive for Covid-19 since the outbreak of the pandemic in the state. Patrick Okundia, the state commissioner for health made the disclosure while speaking to newsmen in Benin on Monday. The commissioner, who however, urged the frontline staff to take the necessary precautions when treating patients, expressed the commitment of the government towards the protection and welfare of the workforce, especially the frontline workers. He commended the health workers for putting their lives on the line to support the government’s efforts at containing the pandemic in Edo.

“I want to commend the resilience, sacrifice and commitment of health workers in Edo State. They have shown uncommon resolve in curtailing the spread of the virus and protecting other citizens during the outbreak. “A total of 201 health workers have tested positive to the virus since the outbreak of the pandemic in the state. I urge the frontline staff to ensure safety precautions are taken when treating any patient”, he said. Okundia, who pleaded with residents to support the government’s efforts at containing the spread of the virus, added that 87 more Covid-19 patients have been discharged, having tested negative to the virus following their treatment at various isolation facilities. www.businessday.ng

L-R: Gbolabo Olaniwun, senior special assistant to Lagos State governor on agriculture; Abisola Olusanya, acting commissioner for agriculture, Lagos State, and Olayiwole Onasanya, permanent secretary, ministry of agriculture, Lagos State, during inspection tour to agriculture facilities at Songhai in Badagry, Lagos.

More transparency seen in financial reporting as UK leads change MICHAEL ANI

... as big accounting 4 given till June 2024 to split audit arm

he Financial Reporting Council (FRC), the regulatory body in charge of setting accounting standards, has directed the operations of four big accounting firms in the UK to split their auditing unit away from other business operations, a move analysts say would improve transparency. The decision comes after various accounting lapses linked to one of the big four has led to the collapse of German payments provider Wirecard AG. The industry’s regulator

has given KPMG, PwC, Deloitte and EY until June 2024, to have separated their auditing divisions from the rest of their operations. Analysts say they foresee a situation where other countries in which these companies have operations might be mandated to follow suit, including Nigeria which is a member of the reporting body. The move is commendable as it will improve transparency and promote independence in making accounting and auditing decisions,” said Emmanuel Faith, process

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analyst, at General Electric. However, the only issue for them would be the challenge of organisational restructuring in terms of both human and financial resources,” Faith said. Calls placed across to Deloitte and PWC seeking comments as to how the directives would impact on their operations were left unanswered. Meanwhile, due to the lapses, the FRC said it had discussed new principles with accounting companies and had told them to set out plans to improve their profession by @Businessdayng

October this year. They include a provision that auditors be protected from the influence that could come from the rest of the firm to reduce audit quality. The FRC also said that the amount of profit distributed to the partners of any one company’s audit practice should not persistently exceed the profits of the division itself. They called for a culture that promotes ethical behaviour and professional scepticism, as well as a duty to work in the public interest and the interests of shareholders.

Tuesday 07 July 2020

BUSINESS DAY

news FG seeks 60% local content to revive Ajaokuta Steel Company HARRISON EDEH, Abuja

he Federal Government said on Monday it would be sourcing up to 60 percent local content to revive the Ajaokuta Steel Company. Olamilekan Adegbite, the Minister of Mines and Steel Development stated this in Abuja during an interaction with newsmen, noting that the government is keen on local content promotion and wealth creation and would only source for foreign content when they are not locally available. “We’re working on what we call local context, right now we proposed 60% local content. Everything that is required in Ajoakuta and National Iron Ore Mining Company, (NIOMCO) that is obtainable in Nigeria must be sourced from Nigeria. We don’t want everyone to come

here and dump everything on us, only those things that we cannot provide can be brought from outside so right now we are at that stage of 60/40- 60% local content and 40% foreign.”Adegbite said. The minister explained that funding for the project would be coming from two sources- Russian Export Centre, which is providing $450m and the Afrexim Bank, bringing $1b which sums up to a total of $1.45b. According to him, the Russian technical experts will come, do the audit which will lead to them giving us an exact figure of how much it will cost to resuscitate Ajoakuta and National Iron Ore Mining Company (NIOMCO). “The two are tied together and once this is done, of course, there will be negotiations. We won’t just take whatever they give us, there

will be negotiations and at the end of the day, a sum will be agreed and contract formed and that is the basis that we will precede,” he said. Speaking further, the minister said: “Essentially, the project on the collaboration with Ajoakuta is the build, operate and transfer (BOT. President Muhammadu Buhari and President Vladimir Putin, sat together at a bilateral and agreed on a government to government cooperation to resuscitate Ajoakuta because the Russians built Ajoakuta when they were the Soviet Union in collaboration with the Ukrainians. This is why we have gone back to them. The whole essence is for them to come here, assess the plant and the job to be done. That is what we call a technical audit; the Russian government has nominated a contractor who will do the job.”

Reps threaten banks’ CEOs with warrant of arrest over $30bn revenue loss James Kwen, Abuja

ouse of Representatives has threatened to issue a warrant of arrest on Chief Executive Officers (CEOs) of banks that would fail to honour invitation over the $30 billion annual revenue loss due to non-remittance of statutory revenues to the Federal Government by banks, oil companies and other institutions. Chairman of the house joint committee on finance and banking & currency, Abiodun Faleke issued the threat on Monday at the opening of the investigative hearing into the alleged over $30 billion annual revenue leakage between 2010 and 2019 with the view to identifying and plugging revenue leakages. The house had on March 5, 2020 resolved to investigate the Central Bank of Nigeria (CBN) and the Federal Inland Revenue Service (FIRS) over

alleged racketeering in the allocation of foreign exchange to companies and directed its committees on finance and banking & currency to “conduct public hearing and look into the various originating documents maintained by the CBN, banks, forex dealers, FIRS, importers and other beneficiary companies. According to the joint committee, the investigative hearing covers: oil revenue, payments on accounts of foreign currency denominated contracts by companies in exploration, engineering, procurement, construction, marine transportations and foreigners exchange allocations to companies from sources such as CBN, autonomous, interbank, and over the counter purchases for the importation, payments of foreign service vendors, dividend repatriation, foreign loan/interest payments, equity, government securities in money market, treasury bills,

among others. Faleke stated that the investigative hearing was not to witch-hunt but to assist Nigeria come out of its financial woes. He said: “We are very sure that Nigeria has enough resources within its system if every player in the economic sector plays by the rules. What we mean by this is that let everybody pay the taxes that the organisations or individuals are due to pay. “We have records to show that Nigeria is losing over $30 billion every year to malpractice, evasion of taxes legally due to the government. It was based on that, that the motion was moved for investigation to be done and letters have been written to banks in the first instance before we move to the next stage. We expect responses from the banks, some have submitted documents, partial documents, some have not submitted at all.

Olam earmarks $75,000 grant for innovative agricultural research Jumoke Akiyode-Lawanson

lam International has partnered with Agropolis Fondation, to hunt for ground- breaking scientific research that can deliver transformational impacts within global agriculture and win a $75,000 grant to support development and implementation. Unlike other research awards, the Olam prize for innovation in food security requires clear evidence of potential short-term impact on food availability, affordability, adequacy, and accessibility. The fourth edition of the biennial prize follows the recent warning from the UN

World Food Programme that the Covid-19 pandemic will double the number of people suffering acute hunger by the end of 2020, bringing food security firmly into the world’s spotlight. Sunny Verghese, co-founder and group CEO at Olam said: “At a time when the world faces a potential rise in food insecurity from the coronavirus crisis, with vulnerable parts of the developing world, particularly in Africa, most at risk, the new scientific insights and techniques being developed by research teams around the world are more significant than ever. The Olam prize aims to support breakthrough inwww.businessday.ng

novations so that together we can re- imagine agriculture for greater food security.” The winner of the previous prize was a pioneering mapping approach that is reimagining subsistence farming in Ethiopia, co-ordinated by Tomaso Ceccarelli of Wageningen Environmental Research and Elias Eyasu Fantahun of Addis Ababa University. Innovation Mapping for Food Security (IM4FS), is supporting Ethiopia’s REALISE programme to give smallholder farmers a ‘best fit’ for what to grow, where and how, with the goal of improving productivity in food insecure areas. https://www.facebook.com/businessdayng

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Post COVID-19 strategy, Nigeria’s economy and the transport sector

Festus Okotie

he transport industry has a great role to play in helping Nigeria rebound after the negative impacts of the COVID-19 which has resulted in major economies sliding into recession. With over 80 million people using the sector daily in Nigeria the industry is very fundamental in the movement of people, essential goods, services and products across the nation. In 2019 the transport sector increased its GDP from $642.927 to $720.241 million and it is believed that more development in this sector will help attract both local and international investments. Around 80 percent of global trade is transported by commercial shipping and maritime trade accounts for nearly 25 percent of global traffic volume and so it is very imperative for mid and long-term recovery strategies to be made to strengthen sustainability and resilience of the sector in the areas of job security, international trade, business development and opportunities . The unprecedented impacts and disruptions of COVID-19 have ravaged most economies and markets globally. It has also affected the Nigerian government’s projection to generate N2 trillion from the maritime industry and the economy has been seriously impacted by the outbreak of the pandemic which has resulted in 634 deaths as at 4th July,2020 in Nigeria. In 2017 a world bank indicator that promotes trading across borders meas-

ured the efficiency of different ports globally and ranked Nigerian Ports at 183 out of 185 countries. The impact of the pandemic recently made Nigeria’s Vice President, Yemi Osinbajo-led committee on Economic Sustainability plan to warn Nigerians that about 39.4 million people might be unemployed by the end of 2020, if the government fails to take pre-emptive measures. The impact has also led to loss of businesses resulting to drop in government revenues as federal agencies such as the Nigerian Maritime Administration and Safety Agency (NIMASA), Nigerian Ports Authority (NPA), Standards Organisation of Nigeria (SON), the Nigerian Agency for Food Drug Administration and Control (NAFDAC), Nigerian Agriculture Quarantine Services (NAQS) among others that generate revenue from authorising the release of cargoes. All these have resulted in significant revenue loss to the sector and economy at large. Interestingly, before the outbreak of COVID-19, the federal government had given Nigerian Customs Service a revenue target of N1.5 trillion which the service jacked up to N2 trillion. In 2019, it generated N1.341 trillion, thereby exceeding its target of N937 billion by N404 billion and also generated N1.20 trillion in 2018, but the current outbreak of the pandemic has seriously affected the N2 trillion revenue target because the economy has slided into recession. The government also made efforts to bolster aggregate demand by increasing government spending and tax cuts for businesses by increasing public budget from N8.83 trillion ($24.53 billion) in 2019 to N10.59 trillion ($29.42 billion) in 2020, representing 11 percent of the national GDP. It also exempted small businesses from company income tax and revised the tax rate for mediumsized businesses downwards from 30 to 20 percent to cushion the effects of the

pandemic on the economy. With all these efforts and NPA generating N299.56 billion in 2017 and N118 billion in seven months in 2018, while NIMASA in 2018 contributed a total of N22 billion to the federation account ,all these revenue generating agencies cannot raise as much this year because of the impact of the pandemic as there are significant reduction in the number of vessels that can call into our ports due to fear of the pandemic. Another area where the pandemic has negatively impacted our economy is reduction in the level of imports arriving at our ports which has dropped significantly. Port calls to China have also decreased as a result of fear of the virus and has slowed down economic activities between Nigeria and China (our key business partner). All these have deterred cruise liners, container ships, oil tankers and bulk carriers from stopping at our nation’s ports and that of most nations globally. In addition to the above about our relationship with China, Nigeria has more than 50 per cent of its import from China and has resulted to many of our nation’s importers reluctance to receive cargoes from there, even as millions who usually travel there have all stopped. China, United States of America (USA) and India are Nigeria’s major import trading partners and contribute 31.34 percent, 11.35 percent and 7.49 percent (respectively) of imports trade. Our nation’s total imports come from these countries and we need to brace up for economic challenges ahead. The drop in the arrival of commercial vessels in our ports and the fall in port calls at an estimated 30 percent in February 2020 in addition to decline in our container throughput to approximately between 20 and 30 per cent. Our nation’s maritime sector urgently needs to adopt new policies, strategies and also inject new ideas to drive the sector. The recent statement by Nigeria’s Vice President that millions of citizens will fall

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Our government should focus more attention on ways of investing resources in the Transport sectors development to be a major source of revenue generation to our nation, boost the economy, create more employment opportunities and also sustain the sector

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

As NBC buries itself deeper aground

he dim art of self-immolation: A common Igbo wisdom speaks about the ill fate of a cadaver seized by its vanquisher. Imagine wise old men of yore gathered, bemoaning their strange fate: the ogre that killed their kind won’t let go of the body so they could at least accord it decent final rites. In today’s dumbed-down world, we say: “Wetin kill am still holam.” Such is the story of the Nigerian Broadcasting Commission (NBC) today. But since NBC is not dead yet, one is tempted to assert that what is destroying it is still embedded within its body. A virus of sorts? At issue here is the recently amended Broadcasting Code which has been raising the hackles of stakeholders in the past couple of weeks. How to do night business: Apparently, the NBC has amended the code in a less-thantransparent manner and without proper consultation with industry operators. But rather than allow reason to come to play, NBC has acted like a military commission. It had taken out full page advertisement in some national newspapers (The Nation, Monday, June 29, p.20) to further lay the cane on the bare backs of objecting industry players. In the publication that tries to play up design over substance, NBC reiterates its position thus: “The amendment of the 6th Edition of the Code, we must reiterate, is consequent to (sic) the presidential approval for the reform of the National Broadcasting Commission. The amendments went through the necessary processes culminating in a public presentation to critical stakeholders on the 26th March, 2020, at L’eola Hotel, Lagos. The amendment, as released, is therefore final. Any group wishing to make further inputs will exercise

such views at the next Review of the Code.” Wow, is this a government regulatory agency funded by taxpayers and stakeholders or is it a garrison command in a war-stricken banana enclave? If NBC had its way, it would regulate with decrees instead of consensual rules that would allow stakeholders thrive. A few issues of process before we look at the major bones of contention. One, NBC claims it made a public presentation to critical stakeholders. Who are these? NBC would have done well to list them in the advert if there was nothing to hide. Two, by March 26th, the world was already apprehensive of the COVID19 pandemic. Travel and mass gathering were being largely shunned. How then was NBC able to assemble critical stakeholders as it claims? Three, while we may ignore the import and importance of venue choice, what “necessary processes” did the amendment go through before the public presentation? Did NBC call for position papers from critical industry players? Four, if NBC parlayed with people who matter in the industry, how come there’s so much uproar and dissensions in a simple matter of review of rules of engagement? Why is an industry group calling for position papers on the matter and why is NBC pushed to take out the full-page advertisements under review? Abiding military mentality: To cap NBC’s impunity with insouciance, the advertisement closed by slamming the doors to a chance of a further review or reason. It closed with a take-it-or-leave-it stance: “The amendment, as released, is therefore final.” Aggrieved stakeholders are advised to wait until the next review... whenever that may be.

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into extreme poverty before COVID-19 ends and that Gross Domestic Product (GDP) has slid to between -4.40 percent and -8.91 percent is a confirmation of the economic hard times ahead. The lack of a well-diversified economy and our weak healthcare system pose a great challenge that can affect our efforts to reposition the economy in addition to the review of the GDP growth rate from 2.5 percent to 2 percent by International Monetary Fund (IMF) as a result of the relatively low oil price and limited fiscal space are all additional reasons why we need to brace up for the challenges ahead. A world bank indicator which promotes trading across borders measured the efficiency of different ports globally and ranked Nigerian Ports at 183 out of 185 countries in 2017. Furthermore, the country’s debt profile is also a source of concern for policymakers and developmental practitioners, as the most recent estimate puts the debt service-to-revenue ratio at 60 percent, which is likely to worsen amid the steep decline in revenue associated with falling oil prices. All these constraining factors will definitely aggravate the adverse economic impact of the COVID-19 outbreak, increase economic hardship for Nigerians and also make it more challenging for the government to manage the economic crisis looming ahead if urgent steps are not taken to manage the crisis through developing the inherent potentials of the sector. Our government should therefore focus more attention on ways of investing resources in the Transport sectors development to be a major source of revenue generation to our nation, boost the economy, create more employment opportunities and also sustain the sector.

Steve Osuji This is a junta method, an act next door to criminality in today’s world. NBC deigns to shave operators’ hair behind their backs. It seeks to sell its drugs not minding the ailments. NBC claims the review is in aid of reforming the Commission. One wonders if a reform of NBC is the same as a reform of the broadcast industry in Nigeria? Whereas one thinks it’s the NBC that needs surgical overhaul, here it is trying to reform an industry that may be a couple of decades ahead of it. For instance, one of the sore points in the socalled review is the question of non-exclusivity of contents, especially sporting rights in Nigeria. Isn’t it a no-brainer that you can’t control what you didn’t produce? Every content in any medium is produced at a cost. Be it sports, drama, news and even interviews, they are created and produced! How then would any adult decree how you price and distribute your content without your consent? All over the world, the only kinds of content not exclusive to the copyright owners are public service productions sponsored by the state or produced with grants. A lay analogy of what NBC has done in its so-called reform is to direct a man who has farmed cassava that upon harvest after one year, he must sell it at a controlled price to, say, civil servants! That would be outright fufu logic! Where then would be the incentive to create high-end, premium content if I can’t sell it to the highest bidder? Why would I need to strive to engage in excellent production if I can get it on the cheap from the guy next door? Where is independence? Where is that wholesome competition that drives change all

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over the world? It’s NBC that needs reform, not the industry: There’s no doubt that NBC is in dire need of a drastic turnaround. Nigeria has been singing the digital switchover song for over a decade. Twice, funds in billions have taken wings yet no one has been conclusively prosecuted. In public perception, NBC is an odious entity with very poor corporate governance structures. It is seen as a graft-infested federal agency that is neither transparent nor accountable. With the immediate past director-general still embroiled in a multi-billion fraud allegation, one would expect the acting DG to pick a good broom and give the place some sprucing up up up. But what do we have? A messy engagement with industry partners. Why do we always forget in Nigeria that a regulator is not a rule-giver but rather an aggregator and enforcer of rule made by all players for the overall good of an industry? Having said this, we urge NBC to get off its high horse and open its mind. Nothing is ever cast in granite. If the partners in the broadcast industry are not quite happy with amendment to the 6th Edition of the Code, by Jove, NBC should please listen to them. This code is for the players in the broadcast industry, not the other way round. NBC doesn’t pay salaries or licence fees; it doesn’t raise costly capital for expensive productions or bear any costs for that matter. Finally, if there’s no industry, there wouldn’t be NBC. Its primary duty, therefore, is to help the broadcast industry to thrive. Osuji writes from Imo State

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The highest duty of citizens (3)

Civilised and prosperous societies are governed by rule of law, not rule by law STRATEGY & POLICY

MA JOHNSON

nce the rule of law is submissive to either national security or politics, then the nation is doomed. We should expect disorder and domination by any person or groups of persons in our society. Let us examine ourselves carefully as a nation, we will see that impunity and disregard for the rule of law has virtually turned our society into a “battle space.” In 2018, the world was shocked when Nigerians were told by President Buhari that national security is above the rule of law. Such a viewpoint from a democratically elected president sounds very awkward in this age and time. If Mr President truly wants to provide security, improve the economy and reduce corruption, then the rule of law must be given its prime position in society in the next 3 years of his tenure in office. Perhaps, at the end, adherence to the rule of law may redeem his image. But what explanations can Nigerian governments- federal, state, and localgive when they have been accused lately of disobeying the courts and choosing the orders to be obeyed. Many public affairs analysts have expressed their views that the Federal Government (FG) in particular is not doing well in the obedience to court orders. The Presidency under the leadership of President Buhari, they say, has disobeyed court orders on a few occasions. Let us take it for granted, that some court judgements too numerous to list in this column constitute a threat to national security. What about the

Supreme Court judgement on Aluminium Smelter Company of Nigeria (ALSCON)? When Supreme Court judgements are ignored, one will not be wrong to say that federal, state, and local governments constitute greatest obstacles to their dreams of achieving economic development. The height of indiscipline and arrogance is demonstrated by a people when Supreme Court judgements are treated with levity in the country. The FG will need to muster a powerful team of lawyers to convince Nigerians that the Supreme Court judgement on ALSCON is inferior to national security. Since 2012, the Supreme Court gave a unanimous judgement by five justices of the apex court in favor of a company known as BFI Group to acquire ALSCON. Even the Bureau of Public Enterprise (BPE) refused to comply with the Supreme Court order on the ALSCON matter until 2019 when a federal high court ordered the reprimand of the Director General BPE in prison custody for 30 days as a deterrent and failure to honour Supreme Court judgement. The National Assembly intervened in 2015, yet no one listens. Why is it difficult to obey the rule of law, which governs every civilised society? When will ALSCON resume the production of aluminium? If the FG wants to reduce the number of unemployed youths in the country, ALSCON is one out of many organisations through which qualified jobless youths can be engaged meaningfully. If Nigeria needs Foreign Direct Investors, those in authority at the highest level of government must show leadership when it comes to the rule of law. It is because the rule of law is not supreme, that is why many investors do not want to associate with Nigeria. Disregarding the laws of the land in a democracy is a choice that has far reaching consequences. And that is why there are national security challenges across the country today. If a court makes judicial pronouncements on any matter, it should be obeyed to the letter. If those

in government have any problem with such pronouncements, the next step is to appeal the pronouncement and ensure due process is followed. Individuals disobey the Supreme Court’s judgement. How did we get to this ridiculous level? You may wish to recall that the apex court in 2017 awarded separate judgements against three lawmakers to refund all salaries and allowances they had received while in the NASS. Up till the later part of 2019, they were thinking about the judgement of the Supreme Court. Only NASS leadership can inform the public that these lawmakers have complied with the Supreme Court orders. If you are served a court order and you deliberately ignored it because you are a president, governor, general, lawmaker, or any influential person, then you are setting a dangerous precedent. To the best of my knowledge, no society will prosper through lawlessness. Therefore, citizens must be law abiding so that Nigeria can achieve the desired development. We have not forgotten when members of the DSS invaded a court in the past. This is unbelievably a bad example. A few Nigerians and institutions of government feel they have the power to desecrate the temple of justice. They render our courts helpless. Yet, Nigeria wants to be one of the developed countries. I bet the journey to national development is extremely far and tortuous if we continue to rule by law. A court that is rendered helpless in the face of deliberate disobedience of its orders is as useless to a society as a toothless bulldog. No one fears a toothless bulldog because it lacks the capacity to keep away a band of invaders as we have seen today. Please permit me to take an aside. With respect to COVID-19, some states are still in denial. Kogi and Cross River States governors claim they do not have anybody infected with the virus in their respective states. Until some deaths were recorded in these states, I

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A court that is rendered helpless in the face of deliberate disobedience of its orders is as useless to a society as a toothless bulldog. No one fears a toothless bulldog because it lacks the capacity to keep away a band of invaders as we have seen today

wondered why Governors Yahaya Bello of Kogi State and Benedict Ayade of Cross River State had to develop a lying tongue about a viral infection spreading across the country. Why do they have to play politics with COVID-19 and the people they lead in their states. The NCDC has stated categorically that there is no state in Nigeria that is not affected by COVID-19. Some public affairs analysts and a few health experts say these governors do not want to spend money for testing and setting up isolation centers. Why are some state governors still in denial? Many people, including those who are “educated” do not believe that there is COVID-19 in Nigeria. I guess some of them think they are immune against COVID-19. Some of these unbelievers think rightly or wrongly that it is an opportunity for those in authority to make money. I was disappointed when someone told me that, “government needs COVID-19 to steal money.” What a pity? Now that the FG has gone spiritual on CCOVID-19, we pray that those who do not believe the virus exists should not perish in their ignorance. Back to the main theme of this article. It is very unfortunate that when judgments are given by courts, most of such rulings, particularly those from the Supreme Court, are swept under the carpet of expanding deceit in Nigeria. This dangerous trend if not checked portends danger for Nigeria. Politicians can consult and negotiate among themselves. But whatever they do must be guided by the rule of law. Politicians and political office holders as well as Nigerians must be overly cautious in the way they react to the rule of law. All said, please, permit me to state that democracy can only stand on the rule of law, not rule by law. Thank you! (Concluded) Johnson is an author and a retired naval engineer who has passion for African development and good governance

Did we really have no victor, no vanquished?

here has been a lot of fighting on Twitter about one of the less discussed outcomes of Nigeria’s brutal Civil War which lasted for about 30 months, from 1967 – 1970. At the end of the war, the victorious Yakubu Gowon famously declared, “No victor, no vanquished”, and made it clear that the aim of the Federal Government was the reunification and reintegration of the former citizens of the rebel Republic of Biafra into the Federal Republic of Nigeria. While as with most things Nigerian, there were probably good intentions, we have a habit of being long on rhetoric, and short on actual practicals. In this regard, the treatment of the bank holdings of the former Biafrans has become a painful sticking point, even half a century later. During the war, the government of Nigeria, concerned that its own currency was being used to finance the war efforts of the rebels, changed its currency, and mandated all old money be changed to the new notes before a set deadline, after which all old notes would be null and void. The Biafran government, not to be outdone, also mandated a change of currency, introducing the Biafran pound, and criminalising the possession of Nigerian currency within its territory. This presented problems for the citizens of Biafra as they were quite obviously unable to travel to federal territory to comply with the directive. Following the war, the Federal Government directed that all invalid currency notes held by former Biafrans be presented to the Central

Bank for conversion to the new currency. Once this was done, however, the Federal Government then directed that the sum of £20 be paid to all Biafran bank account holders, regardless of the balance of their accounts prior to the directive, or the amount of cash they had presented. Myriad reasons were given for this flat payment, ranging from loss of records to persons presenting “invalid” Biafran pounds for conversion. It has been argued that those who presented old Nigerian pounds for conversion received full value. This latter position, however, is false. In Chief J. J. Enwezor v CBN, the plaintiff submitted the sum of £26,659 in old Nigerian currency to the CBN, in compliance with the directive of the government. The Central Bank acknowledged receipt of this sum, and then proceeded to give Chief Enwezor the sum of £20, stating that it was in compliance with the directive of the government, and also claiming that the deadline for conversion of old Nigerian pounds had long passed. It is pertinent to note at this point that the decree under which old currency notes were exchanged, specifically made it an offence for anyone to bring in Nigerian currency from the Biafran territories for exchange. It therefore makes it rather strange that the federal government, having initially criminalised the transportation of old currency notes for conversion, and then asked the citizens who were previously unable to convert their notes to bring them forward for conversion, would then www.businessday.ng

refuse to provide value for the old notes that it requested! In addition to basically stealing the life savings of the defeated Biafrans, the Federal Government also attacked another aspect of their lives: legality. Despite having declared that judicial officers serving in the rebel territories would merely be considered as being on unpaid leave for the duration of the war, the Nigerian courts routinely refused to recognise any legal proceedings or contracts entered into between Biafran citizens during the period of the rebellion. In Chief A. N. Onyiuke v. G. E. Okeke, the Supreme Court of Nigeria ruled that a contract sum meant to have been paid for in Biafran pounds rendered the contract illegal. This despite the defendant having received the goods under the contract and never paying for them even up to the initiation of litigation. In fact, the Court essentially rebuked the trial judge for ruling that the contract was unenforceable due to the consideration and not illegal. In another instance, the Supreme Court also refused to recognise the validity of proceedings commenced in the High Court of Biafra, but continued and concluded in the Onitsha High Court. These policy decisions, coupled with the Abandoned Properties Decree, served to strip the former Biafrans of their property and finances, giving the lie to the government’s declaration that there was “no victor, no vanquished” as these policies seem to be exactly the sort of

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Cheta Nwanze

things imposed upon a conquered people, as though to make them pay for the cost of their own conquest. The invalidation of legal agreements, even though the issues were the same sort of basic commercial transactions carried out every day, and the refusal to integrate legal proceedings from Biafra even though the judges received the same training, used the same system, and were reintegrated into the judicial service after the war, is perhaps even more instructive of the fact that “no victor, no vanquished” was mere sloganeering. Nigeria, however, refuses to have any sort of honest discourse about the Civil War, whether it is the events leading up to the war, the actions of all sides during the war, or the policies of the government after the war. Cheta Nwanze is the lead partner at SBM Intelligence and heads the company’s research desk.

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Are African numbers still poor? (1)

Rafiq Raji

any observers perceive the accuracy and reliability of African economic statistics as far less than ideal. Morten Jerven’s 2013 book “Poor Numbers: How We Are Misled by African Development Statistics and What to Do about It” asserted that the statistical capacity of most African countries was weak and that a significant portion of the official data churned out involved “a great deal of guesswork”. This judgement was not entirely a surprise to well-informed stakeholders. Statistics can, like any powerful tool, be used or misused. American author Mark Twain observed that “There are three kinds of lies: lies, damned lies, and statistics.” The selection of a base year for economic analysis can be an opportunity for statistical manipulation. A base year is the first of a series of years in an economic index that reflects the value of specific activity, such as foreign direct investment (FDI) or gross domestic product (GDP). It is typically set to an arbitrary level of 100. Variations in the index are expressed relative to the base year. Base years may be replaced from time to time so data in a particular index reflects current trends. Ideally, the new base year reflects a recent yet reasonably stable period. The 20082010 financial crisis reveals why a base-year that reflects structural change is problematic. In response to sharp declines in housing values, many U.S. banks accepted government support and changed accounting methods (for example, suspension of market-to-market accounting) during that period. The significant market disruptions and other changes during that era will distort fiscal analysis using 2009 as a base-year. Previous African statistical rebasing exercises reported information that, with the benefit of hindsight, may have led businesses and investors to accept greater risk. That is, after the initial scepticism about the abrupt and largely upward reviews. Kenya, Nigeria, Tanzania, Uganda and Zambia, which rebased their GDPs in 2014, had their outputs either doubled, up by a third or quarter, for instance. There are costs from delayed reviews. That is apart from the fact that if they were more frequent, every five years being the preference of the United Nations Statistical Commission

(UNSC), they would not be met with as much scepticism. There is not now as much disbelief about the economic output numbers as in the past, though; as there are now more relatively frequent reviews. Understandably, however, the sentiment about what could be missing, unaccounted for, or wrongly estimated in African numbers continues to endure. Inflation could be lower than an older stale base year suggests, for instance, with implications for interest rates and the like. And GDP rebasing exercises have consistently revealed, in the African case, at least, that economies were bigger than the old data suggested. So not only are there costs to businesses and investors from issues of timeliness and accuracy of African statistics, there are losses to the economy itself. Governments also lose tax revenues from what could have been greater economic activity consequently. Thus, the need for African statistical agencies to take more seriously the refreshment of the data they produce cannot be overemphasised. This article highlights and analyses recent developments in African statistics to arrive at an informed conclusion on the current quality of Africa’s numbers. Have they improved? Ultimately, businesses and investors on the continent need to be much better informed about the current state of African statistics and how to use them to make decisions, given the available data. African statistics are improving but challenges remain The Mo Ibrahim Foundation African Gover-

nance Report (MIFAGR) measures and monitors governance performance in African countries. Its latest “Agendas 2063 & 2030: Is Africa on track?,” published in October 2019, reports that statistical capacity in Africa, which is “a nation’s ability to collect, analyse, and disseminate highquality data about its population and economy,” is improving but remains low. The annual average trend score of the World Bank’s governmental statistical capacity IIAG sub-indicator for Africa increased by 0.60 in 2014-2017, higher than the longer and older range score increase of 0.43 in 2008-2017, pointing to improvements (MIFAGR, 2019). On challenges, Africa’s statistical capacity underwhelms on data coverage & openness and funding. Still, even as there have been marked improvements in African statistics over the years,

since Jerven (2013) at least, there have lately been matters arising. And while it would be erroneous to generalise, as there are significant distinctions between countries on the continent, exemplars like South Africa have lately given cause for some concern. For instance, the state slashed the Statistics South Africa (Stats SA) budget by 160 million rand in 2015, with no new staff since then. In mid-February 2020, the South African Statistics Council reported that the country’s statistics agency required at least $13 million to continue publishing accurate data. The implications of such long-term budget cuts include smaller survey sample sizes, leading to wider margins of error. Funding gaps for statistics are not unique to South Africa. Underfunding is a recurring theme for many African statistics agencies. For example, Nigeria’s statistics agency constantly complains about underfunding, and received only about 40 per cent of its data production budget in 2019. To improve the accuracy of its statistics and cut costs, Nigeria’s National Bureau of Statistics (NBS) automated most of its data production process and now publishes more of its previously paper-based reports electronically. Nigeria and South Africa are the two largest economies in Africa. They are largely representative of the continent’s two extremes of development; the former being its most advanced, and the latter being its poorest by size. There are some positive trends. More than 70 per cent of African countries either have a national statistics strategy in place or are implementing one. Still, many issues continue to weigh on the development of African statistical capabilities. Edited version of the article was first published by the NTU-SBF Centre for African Studies of Nanyang Business School, Singapore. References are in the original article. “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @DrRafiqRaji)”

A systems approach to solving Nigeria’s electricity sector crisis: Navigating the path to transformation

or over 4 decades, the poor state of Nigeria’s electricity sector has continued to make news headlines with each successive administration or regime promising to find lasting solutions through various stability, recovery and transformation programmes. Yet Nigeria’s electricity sector continues to face an increasing crisis. This is so because the government, policy makers, regulators, investors and general stakeholders have continued to look at and treat Nigeria’s electricity crisis mainly as technical and commercial - liquidity problems and not as a systems problem that transcends technical and commercial boundaries into social, cultural, environmental, political, economic, and judicial spaces. Recent electricity sector reform efforts started with the passing into law of the Electric Power Sector Reform Act (EPSRA) in 2005 which created the industry’s regulator - Nigerian Electricity Regulatory Commission (NERC) in the same year; and its Multi-Year Tariff Order (MYTO) methodology in 2007. Two significant programmes that followed the EPSRA 2005 were the Nigerian National Integrated Power Project (NIPP) in 2005 and the unbundling of the National Electric Power Authority (NEPA) into PHCN and 6 gener-

ating companies (GenCos), a transmission company (Transmission Company of Nigeria) and 11 distribution companies (DisCos) in 2013. These two programmes have been characterised by lack of performance, corruption, mismanagement, ineffectiveness and inefficiencies with different stakeholders demanding for investigations and reversal of these programmes. In the last 2 years, the current government’s intervention programmes include the Power Sector Recovery Plan (PSRP) financed majorly by the World Bank, AfDB and Nigeria Electrification Roadmap (NER) signed with Siemens AG, both of which are at different stages of implementation. Critical to the success of all past and recent reforms is the liquidity of the Nigeria Electricity Supply Industry (NESI) which has been experiencing serious revenue shortfalls with nearly $2.5 billion subsidy injections from the government in the last 5 years. Technically, a cost reflective tariff and an efficient metering system are two major items critical to resolving the industry’s liquidity crisis. The EPSR Act 2005 empowers NERC as provided for in the MYTO methodology to conduct a major electricity tariff review every 5 years and minor reviews biannually. However,

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seven minor reviews have not been conducted or implemented since MYTO 2015 to reflect market realities including inflation, exchange rate, gas prices, system planning output generated by TCN, available generation capacity and CAPEX requirements needed to evacuate and distribute available generation capacity - all of which are parameters that determine the pricing of electricity commodity. The implementation of a cost reflective tariff has repeatedly fallen victim to legislative oversights leading to demand for suspension of tariff increase by April 2020, and a recent demand by the Senate for further suspension of new tariff which is billed to take effect from July 2020. The dilemma is that consumers demand improved service delivery before they will agree to a cost reflective tariff regime, however, cost effective tariff is needed first to guarantee the investments that will lead to service improvement - at least that is a widely held assumption. The investments are to flow into generation, transmission and distribution arms of the electricity industry. While investments in generation may not seem as significant as the other two arms because current transmission capacity isn’t yet adequate to transmit all the electricity generated,

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Akachukwu Okafor generation still has significant gas supply challenges to solve. This year alone, the industry had 3 major gas supply challenges that reduced the generation output of thermal power stations to between 0 percent and 50 percent. There have been tremendous technical and managerial improvements at the transmission arm in the last 3 years which include increased transmission capacity from 5,000MW in 2017 to 8,100MW in 2018, achieving frequency control band of 49.80Hz to 50.20Hz between 2018 and 2019 and enforcing compliance with Free Governor Control by generators, however the transmission arm still requires more investment.

Note: the rest of this article continues in the online edition of Business Day @https:// businessday.ng Okafor Akachukwu is a Mandela Washington Fellow (Public Management, University of Maine) and Principal Partner at Change Partners International. aka@changepartnersintl.com

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Tuesday 07 July 2020

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EDITORIAL Publisher/Editor-in-chief

Frank Aigbogun editor Patrick Atuanya

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Armstrong’s strong arm tactics threaten Nigeria’s $1bn broadcasting industry Continued from front page

Idachaba recently announced a new set of amendments to its broadcasting code that will in one fell swoop demolish the intellectual property rights that underpin broadcasting and kill the business model of the Nigerian broadcast ecosystem, effectively turning it into an appendage of the government. Notable amendment highlights The new code prevents licensees from entering exclusive broadcast agreements with content providers, This means that TV and radio stations will no longer be able to utilise first mover advantage in identifying content and licensing it for their exclusive use, because their competitors will also by law be able to use said content. Broadcasters are also compelled by the amendment to provide their original programmes and/or channels to other broadcasters, which means that the entire concept of exclusivity will no longer exist. By law, popular radio and television talk shows which are native to their specific stations will thus become platform-agnostic because the stations are now required to provide such content to their competitors on a sub-license basis. Incredibly, the new code also stipulates that the price for any such sub-licensing agreement will now be set by the regulator.

The new regulatory regime also includes a rule mandating any broadcaster that has obtained the rights to screen live foreign sporting events in Nigeria to also obtain rights to screen local sporting events at a minimum of 30 percent of the cost of the foreign rights. This would mean that hypothetically, a broadcaster that obtains the right to screen English Premier League football in Nigeria for $100 million won’t be allowed to broadcast games unless they purchase NPFL screening rights for $33 million. The code also prohibits advertisers from placing messaging on such foreign sports broadcasts unless they also advertise on local sporting broadcasts. Going further into dystopian territory, the code includes an ambiguouslyworded clause restricting broadcasters from using content aggregated from social media. In what is a clear swipe at citizen-led journalism, section 5.6.1 of the code says, ”The Broadcaster shall approach with restraints, the use of materials from user-generated sources in order not to embarass individuals, organisations, government, or cause disaffection, incite to panic or rift in the society at large.” This clause which may be interpreted in several ways by the authorities, would appear to be a facsimile of a contentious clause in the controversial ‘Social Media Bill.’ Also important to note is that the proposed amendment is no longer ‘proposed’ as such. According to a notice put out by Idachaba in several daily newspapers on Monday June

29, these amendments have already been set in stone and are awaiting presidential approval. Fallout of the proposed code change The effects of this code change would be disastrous if actually signed into effect by President Muhammadu Buhari. The most immediate and noticeable change would be a total freeze on all incoming investment into Nigeria’s broadcast media space, followed by an exodus of capital, loss of jobs and loss of highly skilled talent to emigration. This is because exclusivity is the lifeblood of all forms of broadcast media practise. Early morning radio talk shows, primetime television dramas and sports broadcasts all exist and access sponsorship and viewership based on this principle. Taking away a broadcaster’s right to license or own content exclusively would effectively mean that all content becomes communal property, which immediately diminishes its value both in the eyes of audiences and advertisers. The collapse of an industry which already contributes more than $1bn in measurable output to Nigeria’s ailing economy would be nothing short of disastrous. No fewer than 150,000 direct and indirect jobs have been created and sustained by the private broadcast industry since deregulation, including over 20,000 by sports broadcasters alone. Crippling this industry would also starve the government of billions of naira worth of tax and licensing revenue.

Investor confidence would sink to an all-time low if this code is signed into law, successfully promoting the idea that Nigeria’s current administration is bent on pursuing an outdated goal of state domination of the economy, Communist-style policymaking and strongman authoritarianism. The thinly-veiled attempt to gag citizen journalism by instituting a chilling effect on broadcasters using content gathered from social media is sure to solidify this view which already exists among a great number of foreign investors who are currently avoiding Nigeria. At a time when the Nigerian economy is reeling from the devastating impact of the COVID-19 pandemic and global economic recession, further loss of jobs and destruction of investor confidence will only prolong Nigeria’s economic quagmire and deepen the suffering of citizens. To their credit, the NBC board does not share Idachaba’s eagerness to push through a regulatory atom bomb without the requisite consultations, which is evidenced by a notice they put out on Friday June 26 requesting position papers on the code change. This notice was later contradicted by Idachaba’s slapdown the following Monday, but the signs are that even at board level, the NBC retains a good amount of perspective, which is good news for the industry it regulates and Nigeria in general. Whether the Acting NBC boss will act with similar perspective in the days ahead remains to be seen.

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Tuesday 07 July 2020

BUSINESS DAY

COMPANIES&MARKETS

C&I Leasing’s ’19 revenue surged 15.3% OLUFIKAYO OWOEYE

&I Leasing plc has released its 2019 full year result for the period ended 31 December 2019. Figures from the result show gross earnings surged 15.3percent to N32.5billion in 2019 from N28.18billion in full year 2018. Apart from a significant drop in its tracking income, the firm recorded growth in revenue for its two other segments namely, leasing and outsourcing segments. Net Profit stood at N939 million from N1.19billion in 2018. Specifically, revenue from lease rental income stood at N22.33 billion from N19.38billion, outsourcing income ballooned from N792.56million to N1 billion. Tracking and tagging income, however plummeted to N17.94million from N137.1million. Earnings from its Ghana subsidiary, Leasafric Ghana Limited, dropped 5percent at N4.4billion from N4.64billion, also recording a loss after tax of N280.9million, also revenue from EPIC International FZE, U.A.E, that engages in the business of leasing vessels grew 15.93percent at N3.71billion

…as Nigeria’s leasing industry sustains growth at 13.5% in 2019 from N 3.20billion. C&I Leasing FZE, a free zone enterprise registered in Dangote Free Zone in Lekki recorded N3.17billion in 2019. Revenue from the parent company C&I Leasing Plc jumped 27percent at N25.83 billion in from N20.33billion

he Britain Government said it is close to a $624 million supply deal with Sanofi and GlaxoSmithKline for 60 million doses of a potential COVID-19 vaccine. Clinical trials are due to start in September and Sanofi has said it expects to get approval by the first half of next year, sooner than previously anticipated. More than 100 vaccines are being developed and tested around the world to stop the COVID-19 pandemic and governments are racing to secure supplies of vaccines even before their efficacy is proven. A supply agreement with Sanofi and GSK would be Britain’s second such deal, after it said it would buy 100 million doses of the OxfordAstraZeneca vaccine. Both pharmaceutical giants have said they are prioritizing quality over speed in developing a vaccine. “The Government’s Vaccines Task Force is actively engaging with a wide range of companies both in the UK and abroad to negotiate access to vaccines,” a spokes-

ment and Leasing Association of Nigeria, for the tenth time in a row, the Nigerian Leasing Industry buoyed its growth and continued to remain a major contributor to national economic development, while demonstrating its innovation

and flexibility in the face of economic turbulence. The leasing industry recorded a remarkable growth of 13.5 percent in 2019, with outstanding lease volume at N1.91trillion as against N1.68trillion in 2018. The oil

L-R: Chinenye Ozoadu, regional manager operations; Anthonia Nwakonuche, general manager; Amb Marksman chinedu Ijiomah chairman/president; Tina Imohimi, director construction, and Progress Barnabas HR Dept.

Britain mulls $625m GSK/ Sanofi COVID-19 vaccine deal OLUFIKAYO OWOEYE

in 2018. Personnel expenses jumped 17.48percent from N1.43billion to N1.68billion in 2019 with distribution expenses jumped 22.87percent at N18.69million from N15.21million. According to the Equip-

woman for Britain’s business ministry, said, without confirming if Sanofi or GSK were among them. Reports said that Britain was considering taking an option to buy the vaccine should it work in human trials, and would see the amount paid in stages. Sanofi is working on two possible COVID-19 vaccines, one of which uses an adjuvant made by GSK to potentially boost its efficacy, and has said it has capacity to produce up to 1 billion doses a year. Its timeline for clinical trials is behind the likes of Moderna Inc, the University of Oxford in collaboration with AstraZeneca Plc, and an alliance of BioNTech and Pfizer Inc, whose projects all grabbed headlines by moving to human trials as early as March. Sanofi has received financial backing from the United States and caused a stir in its home base of France after its British CEO Paul Hudson signaled that Europe was being too slow in supporting work on a vaccine, hinting U.S. patients might get any vaccine it develops first.

and gas sector maintained its lead with outstanding lease of N577 billion (26%), followed by Transportation sector with N469billion (22%), Manufacturing N269billion (11%), Others (including Healthcare and Education accounted for N171billion (21%), while Agriculture, Telecommunications, and Government recorded considerable growth. Finance lease continued with its lead at 65% of total leases while operating lease has been increasing its market share in recent times due to market dictates arising from the preference of corporate bodies to focus more on their core activities, while outsourcing other operational functions such as transportation and other logistics services. Also, operating lease is increasingly becoming a risk mitigant and niche market for several lessors in the industry. In terms of players in the industry, Banks represent 80 per cent of the investment value, financing big ticket leases. While, with regards to transaction spread, non-bank lessors take 80 per cent of the transactions, actively servicing MSMEs.

Inlaks pushes growth of African tech Offshore Capital Flows to Emerging Markets hit $32bn in June, most in five months ecosystem with coding academy JUMOKE AKIYODE-LAWANSON

hehatch, innovation lab of Inlaks, a leading IT solutions provider, has commenced its 3-months software programming training for graduates under the auspices of thehatch Code Academy. Although initially scheduled to begin in April, the training was postponed due to the global pandemic situation. Now, 15 shortlisted participants have begun thehatch coding boot camp online. The academy aims to equip students with new programming skills through flexible online courses, peer-based tutoring and project assessment. During the training, participants will be exposed to an immersive curriculum using proven facilitator-led and hands-on software development training. Apart from available networking opportunities with high-profile software developers and mentors, top program graduates of the academy stand a chance of gaining a start of their career as software engineers with Inlaks’ software development unit. According to Femi Adeoti, MD/CEO, Inlaks, Africa operations, thehatch innovation

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lab is exercising its capacities to support the growth of the African technology ecosystem. “The code academy was established to enhance capacity building, mentorship, and networking that will serve as building blocks for the next generation of software developers. By training young graduates in the requisite programming skills, we are not only securing a future for them but also promoting the creation of African made technology with a special focus on the social, economic and environmental sectors,” Adeoti said. Speaking at the induction, participants expressed their expectations from thehatch coding bootcamp: Abdulquadir Ahmad Ayobami said: “I expect that by the end of the 12th week, I would have honed up my programming skills, learned from the industry’s best so I can build an innovative project that solves a societal problem and more importantly contribute a quota to the Nigerian economy. I also hope to have a long-lasting network with other brilliant and innovative minds and see how we can bring about the Nigeria of our dreams using technology.”

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SEGUN ADAMS

oney taps reopened and emerging market securities attracted $32.1bn in June, a ten fold month-to-month increase, and the highests since January, showing a continued recovery from the covid-19 shocks. Equity and debt inflows were $9.5 bn and $23.5 bn, according to IIF. “ Ne g a t i v e s e n t i m e n t on emerging markets approached extreme levels during March, setting the stage for a period of stabilization and more two-way discussions on risks and opportunities in the EM space,” said the Washington-based institution. The IIF said sovereign issuers from most EM regions are leveraging lower costs and favorable maturities which has driven up International gross issuance meaningfully in the second quarter above average issuances of recent years. “Thus, the level of nonresident capital inflows in June was mainly sustained by EM debt ($23.5 bn),” said IIF. Equity and debt inflows were $9.5 bn and @Businessdayng

23.5 bn and equities in EM outside China saw marginal gains. In May, only $700m of equity investment was recorded and Markets outside China suffered $4.1bn outflows while flows to Chinese equities saw a net inflow of $4.8bn. Debt also stood at $3.5bn last month. IIF said the shift in sentiment in June is healthy, reflecting deeply discounted valuations in many places, which mean that adverse economic outcomes and weak growth are largely priced. While EM has returned on the path of recovery, tensions between Washington and Beijing remain a downside risk ahead of the November US election. IIF said while sentiment metrics show a rebound in the outlook, hard data are still lagging behind but the ability of EM policies to catalyze a recovery remains a big consideration for outlook over the coming periods. The global finance institute sees investors “being more discerning regarding investment decisions towards EM.”

Tuesday 07 July 2020

BUSINESS DAY

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Tuesday 07 July 2020

BUSINESS DAY

POLITICS & POLICY FG gives guidelines on Edo, Ondo gubernatorial elections Godsgift Onyedinefu, Abuja

head of the Edo and Ondo states gubernatorial elections, the Federal Government on Monday released the conduct of campaigns. The Director-General of the Nigeria Centre for Disease Control (NCDC), Chikwe Ihekweazu while briefing on the COVID-19 global pandemic, advised politicians to use media channels such as Radio, Television and social media to campaign for votes in its newly published guidelines for elections. Ihekweazu said the use of

these channels rather than the previous methods of canvassing for votes which involve mass gathering will help check spread of COVID-19 infections. He also called for a careful adherence to mass gathering guidelines, adding that “We urge our politicians to take responsibility and led by example. We ask you to please think of the lives of the electorate first; your electorate staying alive is much more important than any vote you can win. “The guideline is to support critically, Nigerians that will be going to vote. The virus thrives in mass gathering and there is a challenge that we have in the way we have conducted our elec-

tions ore during and post. In this guideline, we try and offer advice on how to do this safely The NCDC DG also informed that over 15,000 health care workers have been trained across the country since the onset of the outbreak, and the process will be ongoing. On the newly launched online Infection and Prevention (IPC) course, Ihekweazu, while describing the feat as historic, said it will transform how Nigerians, doctors, nurses and patients relate to IPC. He also said the NCDC now has a new unit that focuses on IPC, so as to strengthen “this area that is long forgotten.”

APC vows to win Edo at all cost, alleges PDP wants to loot state’s treasury to win guber polls James Kwen, Abuja

he ruling All Progressives Congress (APC) has vowed that the party will do everything possible to win the September 19 Edo governorship election. Chairman of APC Edo Governorship Election Campaign Council and Governor of Kano State, Abdullahi Ganduje said this Monday while addressing journalists shortly after inauguration of the 49-member Council in Abuja. Ganduje argued the People’s Democratic Party (PDP) nominated Governor Godwin Obaseki not because they have anything in common but simply because he is managing the treasury of Edo State and they want him to use that treasury in order to win the election. He said PDP has made Governor of Rivers State, Nyesome Wike, chairman of its Edo Governorship Election Campaign Council but APC will isolate him in an isolation centre and before he recovers, the election will be over. “First of all, seeing is believing; by looking at the composition of this Committee, you know that APC is ready for the election, you know that APC will make do everything possible to win this important election. “The reason why I’m saying that you know the composition of this Committee we have all war veterans in politics who are ready and we have young people who are just coming out from election and are ready to go back into the processes of election again. And we have all the horses who never missed their

targets. “The main purpose of this Committee is to provide enabling environment for all our party men and even non party men, members of the public to appreciate our party based on their conscience and based on their ideological believe that APC is the answer in Edo State. “We know the opposition is planning to rig the election, we know their tactics, we know their methodology and we shall dismantle all their tactics to ensure that we win this election “We know PDP made Wike their Chairman, I assure you, we will isolate Wike in an isolation centre and before he recovers, the election is over. But I assure you the people of Edo State are watching they know that somebody who was assisted in 2016 to win an election, somebody who was given every cooperation to succeed in Governance of Edo State without doing much for the people, at the end of it, he’s taken the treasury and now handed it over to PDP in order to win the election”, Ganduje maintained. Earlier in his address, Chairman of the APC Caretaker/Extra-Ordinary National Convention Planning Committee, Mai-Mala Buni said the assignment before the reconciliation and campaign Committees is to build a peaceful and united APC and to ensure successful renewal of the party’s mandate by the good people of Edo State who voted the party into office in 2016. The Yobe State Governor noted that the rich cream of ladies and gentlemen carefully appointed into the reconciliation and campaign councils, gives the party great hope and www.businessday.ng

confidence that they will succeed for the party to emerge united and victorious. “May l use this opportunity to urge you to take advantage of strong team work, reach out to all stakeholders and pursue your assignment with all sense of purpose and commitment for the Party’s success. “I also appeal to every stakeholder and members of the party across the country to support the peace initiative of the Party for a stronger, united and prosperous APC. “I am glad to state that the Caretaker committee which I am opportune to lead had initiated wide range of consultations and reconciliatory measures to pave the way for true and sincere reconciliations. It has also drawn a road map and plan of action to forge strong partnership that would stand the taste of time among the stakeholders. We are committed to re-building confidence and trust, recover the glory and political fortunes of the party in all the states across the country. “To actualise these and other measures, we must engage in an all inclusive consultations to accommodate and fix-up areas posing threats to the party. “I am happy to state that our visit to some founding members of the party last week, has justified the new approach with very positive results after the consultations.” “As chairmen and members of the reconciliation committees, you have been carefully selected based on your personal and proven integrity, wealth of experience and, sense of fairness and objectivity to achieve the set target of reconciliation and victory. https://www.facebook.com/businessdayng

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Tuesday 07 July 2020

BUSINESS DAY

BDTECH

In association with

E-mail: jumoke.akiyode@businessdayonline.com

How technology adoption in Africa is shifting amid COVID-19 Weyinmi Egbe

he new normal in Africa is expected to re-direct the priorities of governments and business. For consumers across the continent, priorities are also shifting. Before Covid-19, customers could easily walk into a store to touch, engage and experience a product, where many are now relying on online reviews and comparisons to verify their purchasing decisions. Where possible, many businesses have invested in infrastructure to facilitate remote working for their staff. We believe that over the next two years there will be a considerable shift in behaviour across business and consumer segments underpinned by the following four trends: Critical advancements to the healthcare system Upgrading health care facilities in Africa will receive more focus now than ever before. Countries like South Africa, Nigeria, Ghana and Kenya have shown rapid and pro-active ad-hoc responses to health situations, however, contact tracing has been the major issue when it comes to managing patients’ pre and post treatments. This has exposed the need for a more optimised Identity Management Systems and the development of a citizen database to account for all citizens in the country in a timely

Weyinmi Egbe

and efficient manner. Over the next two years, we can expect that government will prioritise identity management and optimised database management systems. Faster adoption towards digital transformation and automation Remote working has become the new normal. Digital transformation (DX) is an important strategy to deal with the COVID-19 crisis, a survey by International Data Corporation (IDC) across Sub-Saharan Africa suggests that 57 percent of organisations in the region are accelerating existing DX efforts. Digitally transformed enterprises are doing exceptionally well during these tough times. IDC’s forecast for 2018 showed about 17 percent

of all enterprises being digitally transformed, and by 2023 about 52 percent. Now a lot of CIOs say that they’ve accelerated their digital transformation programs significantly. The catchphrase is: ‘we feel like we are living in 2025. Everything we had planned for 2024 or 2025 is happening now’. No one anticipated how much we will be compelled to rely heavily on digital engagements. Clearly organisations will now be compelled to truly consider digital transformation not as a buzz word, but for business continuity. The increased demand for digital assistants (chatbots) to drive customer engagements Financial institutions in Africa were

the first to fully embrace digital assistants for customer care services and banking services. With this adoption we have seen an increase among our partners to deliver the same services to African governments as an automated way in which the government can quickly interact with citizens, answer FAQ’s and keep citizens informed 24/7. This is expected to become even more popular as a standard way for citizen engagement. While the more complex communication challenges will still need to be tackled by humans, a digital assistant may offer relief in some areas. For example, organisations may need to automate responses to most basic queries so human minds can be freed up to deal with more complex challenges. Enterprises and organisations may also need to enable more processes and transactions online and offer them in an easy-to-use medium – one that is easily accessible and intuitive. Meanwhile, organisations are having to reconfigure how they engage with their customers, contractors, and employees – and in the case of public sector organisations and educational institutions, citizens and students, respectively. These various touchpoints include providing real-time, reliable information on health and safety guidelines; offering assistance in setting up a remote working environment; communicating up-to-date changes in policies; and enabling online

self-service functions or access to relevant insights, information, and processes from within the organisation’s systems. Increase in ‘e- commerce everything’ A post-COVID retail market will require new approaches to engaging customers and satisfying their demands with efficiency and elegance. Retailers need the transparency and flexibility to shift with the needs of their customers and business – whether those interactions are happening online, in-store or in the spaces in-between, such as buying online and picking up in-store (BOPIS). As people spend more time at home, online shopping channels have become a preference for household and grocery shopping. ‘E-commerce everything’ will drive a new form of retail engagement across the continent; encouraging retailers to relook their supply chain, their offerings, and their engagements with customers. Retailers are going to have to explore the modern solutions on offer to them to enable optimisation of the online ordering process, of forecasting and planning assortment. We can expect a shift in culture for more services to go online and stay online post COVID-19. Weyinmi Egbe is the alliance and channel leader, technology & cloud systems, Africa at Oracle.

HiiT PLC offers N20 million digital skills acquisition scholarship to Nigerian students …Plans to equip youths with ICT skills to meet global demand Jumoke Akiyode Lawanson

iiT, an Information and Communications Technology (ICT) training service provider in Nigeria, has concluded plans to offer scholarships worth N20 million to interested Nigerian students at the tertiary education level as its contribution to the Federal Government COVID-19 economic palliatives. The company says this decision is part of its resolve to support various governments’ initiates towards moderating the effect of the pandemic on teeming youths who are currently idling away at home, to build ICT skills that are in global demand from

home, and even begin to earn income. According to Kayode Shobajo, chief executive officer, HiiT PLC, “all that is required of interested students to apply for the scholarship is to visit: www. hiit.ng/scholarship and complete the scholarship application form. They should however note that this opportunity is on first come, first served basis.” The courses on offer include digital marketing, web design, digital literacy, Cisco certified network associate, python programming and many others. Shobajo said that unlike most other online training platforms, HiiT Online Training offers instructor-led training coupled with other training methods

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including live interactive classes, videos, slides, whiteboards and simulation labs to impact IT skills that are in huge demand by employers. “The teaching time and students’ interaction time mix are optimised to ensure the best online learning outcome for our cultural environment,” he said. “Our Instructors are highly skilled and well equipped to deliver lectures from their homes or anywhere they are comfortable. So, government lockdowns do not disturb our classes. Furthermore, our students can also gain access to the recorded classes at their own time from anywhere in the world.” Speaking further on some of the courses on offer, Shobajo said digital

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marketing enables students gain comprehensive understanding of all major digital marketing channels used today as well as create, launch, and analyse campaigns across a multitude of platforms, including Facebook ads, Google Ads, Google Analytics, and more. “Digital marketing has become an integral part of marketing budgets and will soon overtake all other traditional channels of marketing,” he said. “With the demand for digital marketers outweighing the supply, professionals skilled in digital strategy, consumer behaviour, content distribution, and social media are in high demand. This course aims to bridge that gap and create industry-ready digital marketers.” On web design, Shobajo said with

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more communication and commerce being conducted online than ever before, the web provides incredible opportunities for web designers. At the end of the course, graduates of web design will play a central role in building dynamic websites and applications that deliver content in a variety of formats for multiple devices for organisations. Python, on the other hand, is a powerful general-purpose programming language. It is used in web development, data science, creating software prototypes, and so on. It has simple easy-to-use syntax. Students will learn the basics of Python, then move on to acquire skills on how to develop Web applications using the Django framework.

Tuesday 07 July 2020

BUSINESS DAY

property&lifestyle ‘Housing and roads construction have great potential to create jobs for people and businesses’ Since the Economic Sustainability Committee (ESC) recommended that Nigeria should embark on mass housing targeting 300,000 housing units annually and also construct more public and rural roads as part of strategies to revive the nation’s economy post-Covid-19 pandemic, housing sector stakeholders have been talking. In this interview, GBENGA OLANIYAN, CEO, Estate Links Limited, examines the viability and dependability of this approach as a catalyst to economic recovery. He speaks with CHUKA UROKO. Excerpts

ederal government seems set to implement mass housing that targets 300,000 units annually alongside roads construction as recommended by the Economic Sustainability Committee. How feasible and viable is this approach to reviving the economy? It is feasible as long as the government has the will and is able to provide the funding. With the quantum of buildings and roads to be provided, more money will be in circulation and people will be gainfully employed.Withmoremoneyincirculation and a slight reduction in the unemployment rate, this initiativewillcontributeitsquota to rejuvenating the economy. Of course, provision of more housing will ultimately reduce the housing deficit of about 17 million,albeitbyasmallmargin. Also, if it is to be embarked upon, bordering on our history with unfinished projects, firm contracts need to be drawn giving specific timelines for delivery, before funds are committed.

Gbenga Olaniyan

How far can this go to really make impact on the economy? One question to ask is, what is the direct impact of real estate/infrastructure on a nation’s economy? Real estate plays an integral role in the economy as it provides shelter for people to rest and for businesses to operate from. Increase in construction activity will definitely have a

multiplier effect on economic growth with its linkages to various industries and sectors such as cement, steel plants, furniture, sanitary ware etc. On reviving the economy, road construction projects might help as it bolsters transport and reduces economic hours spent on the road. There will be a spiral effect on other sectors of the economy such as the agric sector as cost of

Estate surveyors begin research on property market data to guide investors, home buyers CHUKA UROKO

etermined to make a difference in professional service offering, estate surveyors and valuers have begun research on what it calls Lagos Consensus Property Market Data aimed to guide investors in their investment decisions. The estate surveyors, under the aegis of Nigerian Institution of Estate Surveyors and Valuers (NIEVS), Lagos State Branch, say the research project is also aimed to guide home buyers in their market search and also help their colleagues in their professional practice, especially estate agency. “The delivery of this project has, however, been delayed by the Covid-19 pandemic disruption. The pandemic will also affect the proposed technical reports we have scheduled for Abule Ado area explosion before the lockdown. “But while we have re-invigorated the research project and rescheduled delivery date for the next few weeks, consultation with the stakeholders at the Abule Ado incident could not commence till the relaxed lockdown period about two

weeks ago,” Adedotun Bamigbola, the branch chairman, explained. Bamigbola, who spoke at a press briefing in Lagos to review the activities of the institution in the past 12 months, informed that within this period, the Research and Development Sub-committee of the institution started its master classes with two days training on Land Titling and Documentation. The training, he said, was the first of its kind in the institution. “It reveals a direction in which we can further develop our practice reach as estate surveyors and valuers with the opportunity to provide better services for property owners seeking the perfection of their title or consultancy in land administration,” he said, noting that this was a key component of their services. After a successful outing with the Lagos State Ministry of the Environment as part of their strategic partnership programme, the institution also intends to continue its partnership with relevant ministries, departments and agencies (MDAs) in the built environment in order to provide needed professional input www.businessday.ng

into government’s policies. “We have also activated our strategic partnership with Echostone Nigeria Limited, in the private sector. Echostone is now a regular feature at our key programmes and we look forward to having more partnerships with private sector players,” the chairman added. The institution was also able to build capacity within this period through their existing and newly initiated programmes such as the Students’ Workplace Experience. Capacity building programmes such as the Heads of Practice Business Forum (HOP) and the Mandatory Continuous Professional Development (MCPD) were also held with pointers to existing areas of practice for members. The institution will be marking its golden jubilee this year and, according to the chairman, the celebration had already started with the hosting of their branch elders in March 2020. “The grand finale of the celebration will be at a dinner and awards night on December 3, 2020. This, coincidentally, was also the date the first meeting of the Lagos State Branch was held,” he recalled.

transporting goods ultimately means cheaper food. In specific terms, what are the advantages of these projects as economic growth catalysts? Talking about roads construction, this has great job creation potential. It is an immediate fix for the unemployed/underemployed populations which have increased, especially during this pandemic period. It would also create jobs for different businesses connected to the construction sector. Good roads network reduces travel time. The poor state of most of Nigerian roads leads to un-quantifiable manhour lost daily on the roads. Raw materials get damaged or lost, etc. This equates to loss of resources which will be greatly reduced if roads are worked upon and finished on time. On its part, mass housing will mitigate the demandsupply gap we have currently. Supply of affordable housing as a large portion of resources for an average Nigerian goes to housing. Mass housing also creates jobs for individuals

and businesses. From experience and in our circumstance, housing is not always been a quick-fix solution to economic problems. What, in your view, could be a more viable alternative to this approach? A more viable alternative would be to look into reviewing policies surrounding and affecting businesses in the country to support growth of businesses. A lot of businesses have been negatively hit by the coronavirus pandemic. This cuts across the SMEs to large corporations. Particularly, developers in the private sector can be incentivised towards a more robust housing delivery. Tax holidays can be granted to the housing sector as well as duty waivers on non-luxury building materials. With favourable policies in place, businesses can be resuscitated and investors would be encouraged to come into the country. Some of the policies in place in the country have so far stifled businesses. Also loans should be given with favourable payback con-

ditions for both parties. When the commerce of a nation is worked upon, it affects almost every sector, because firms can then begin to regain grounds, pay employees, expand, etc. There would be more money in circulation and is a win-win for all. What insights can you share on infrastructure generally as an economic growth enabler? An article on economicsdiscussion.net spelt it out this way: “It is worthwhile to mention some distinctive features of infrastructure – First, the building of infrastructure requires large and lumpy investment and they contribute to output, after a long time, that is, their gestation period is quite long. Second, due to large overhead capital and lumpy investment, the significant economies of scale are found in most of them Due to the significant economies of scale found in many infrastructure services, they have the characteristics of natural money. The third important feature of infrastructure facilities is they create externalities.”

Why Stewart Court is good destination for yield-hungry investors, home buyers CHUKA UROKO

or its location in a fast developing community where big ticket developments such as the Dangote Refinery and Fertilizer Plant are coming up, Stewart Court Bogije, an affordable luxury miniestate, is a good investment destination for investors who hunger for good return on investment. Another compelling reason for one to invest in this mini-estate is that it is strategically designed to be where life is actively engaging; the land is 100 percent dry and ready for immediate development. The estate intelligently combines affordability with luxury

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and privacy. The mini-estate, located off Lekki-Epe Expressway, is being promoted by Porch Integrated Services Limited, a Pan-African real estate development and investment management company. The company is a facilitator of multiple affordable housing schemes across Lagos and Ogun states with the sole aim of bridging the housing demand-supply gap in Nigeria. With its giant stride in housing development and sale of serviced plots in a fast developing community, Porch Integrated Services has just launched Stewart Court Bogije into the Lagos property market. Another striking feature of the estate, which is located

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in the serene Bogije community, is its accessibility. It is just two minutes drive off the Lekki-Epe Expressway and 25 minutes drive from Ajah/ Sangotedo. Stewart Court Estate Bogije is about 35 minutes drive to the Dangote Refinery, a business and occupational base to over 100,000 local and international experts that definitely would need accommodation and other real estate products. The estate’s close neighbours include iconic developments such as Lakowe Golf Course, Lagos Business School, Omu Resort, Akord Shopping Mall and Shoprite etc “This Estate is gazetted and strategically located between Lekki (Luxury) and Ibeju Lekki (Commercial Hub) where the Dangote Refinery and Fertilizer Plant are being developed,” Segun Olorunshola, the company’s managing director, assured in a statement in Lagos. He disclosed that the estate comes with all basic infrastructure like electricity, drainage system, security, CCTV, water, efficient waste disposal and lots more.

Tuesday 07 July 2020

BUSINESS DAY

EDUCATION Weekly insight on current and future trends in education

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Human Capital

ASUU President vows to ensure release of members’ withheld salaries; •Says UNIMAID ASUU yet to be paid since February,2020

•Accuses AGF, finance Minister of sabotaging PMB their four months salaries, Ogunyemi promised to ensure that withheld salaries of members are released from February to June, 2020. Ogunyemi, a Professor who made the allegation in a telephone interview with BusinessDay, accused the Office of Accountant General of the Federation and Ministry of Finance of sabotaging the person and office of President Muhammadu Buhari. ASUU had resumed strike to force government to address issues of revitalisation fund, Earned Academic Allowances, proliferation of state universities and their governance, visitation panel to universities and conclusion of renegotiation of 2009 FGN-ASUU agreement

MARK MAYAH

he President, Academic Staff Union of Universities (ASUU), Biodun O gu nye m i ha s vowed to ensure that many members of union are paid more than a month after the Presidential directive by President. While lamenting that a good number of members are yet to be paid said that the Union will ensure members are paid their salaries and no kobo is lost to the illegal IPPIS operators. Just as the union members at the University of Maiduguri (UNIMAID) are yet to receive

President Buhari

TRCN registered teachers jostle for N6.5m MTOTY prize …As entries open for the 6th edition

oronavirus pandemic and the school closure aside, thousands of secondary school teachers who are duly registered with the Teachers Registration Council of Nigeria (TRCN), will jostle for the star prize of N6.5million 2020 Maltina Teacher of the Year competition. The competition which is under the Nigerian Breweries Plc.’s Felix Ohiwerei Educational Trust Fund (FOETF), to facilitate an active contribution to the development of the education sector in Nigeria is in tandem with the United Nations Sustainable Development Goal, SDG No.4. Sade Morgan, the corporate affairs director, Nigerian Breweries Plc. says this year’s edition the sixth in the series is particularly special and symbolic. “The global coronavirus pandemic has impacted all aspects of our existence including education. Nevertheless, it has also showcased the resilient spirit of our teachers who have been unrelenting in finding new ways to continue to teach students virtually despite technological challenges and limitations. Morgan while speaking at the flag-off ceremony of the initiative in Lagos noted that Maltina Teacher of the Year is an initiative that is cherished and keenly supported by our

management team who are deeply passionate about education. This is why we are committed and very happy to commence our annual search for the best secondary school teacher in Nigeria with the Call for Entry commencing on June 30 and closes on August 14, 2020. According to her, “The winning and other qualifying teachers would be revealed in by October in commemoration of the 2020 World Teacher’s Day. We celebrate Nigerian teachers who continue to break new grounds and immeasurably contribute to the future of our great nation, by helping to groom and nurture the next generation.” Speaking on the prizes,

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Morgan said, “As with previous years, the winner will receive a total cash prize of 6.5 million Naira reward, in addition to a trophy. One million naira as a first prize winner, five hundred thousand Naira as state champion and one million Naira annually for the next 5years, he/she also receives a capacity development training while his/her school receives either a block of classroom or a computer laboratory. Our inclusion of a computer laboratory is in recognition of the reality that now more than ever, digital capabilities are essential for Nigeria teachers in teaching students. Also speaking at the flagoff ceremony, the National Treasurer, Nigeria Union of Teachers (NUT), Segun Raheem, commended Nigerian Breweries Plc for their role in celebrating teachers through the initiative, assuring that the association would mobilize teachers across the country to participate in the 2020 MTOTY as part of its commitment in motivating and inspiring teachers all over Nigeria who are moving education forward despite global COVID-19 pandemic. “Such consistent investment on the part of Nigerian Breweries Plc is the hallmark of a good corporate organization that has remained true to its ideals and commitment of improving the education sector,” Raheem said.

all our members to be paid their salaries, many are yet to receive payment. According to him, we reassure all our affected members that the leadership of ASUU will not relent in getting redress for this act of sabotage. The zealots of IPPIS have distorted our members’ salaries, with same members receiving different amounts for three months using the rejected IPPIS platform. He added that the IPPIS operators have also used different salary tables to compute and pay our members for same months vowing to ensure that not a kobo owed to and unjustly taken from any ASUU members is lost to IPPIS.

Opportunity opens for postgraduate studies as Cranfield offers courses in Energy, others CHUKA UROKO

KELECHI EWUZIE

which are outstanding in the 7th February 2019 Memorandum of Action (MOA). The President also stated that the operators of the rejected IPPIS have distorted the salaries of ASUU members with same person receiving three different amounts for three months. He alleged those IPPIS operators’ short changed varsity lecturers by using different salary tables to compute and pay ASUU members for same months. “The OAGF and the Ministry of finance appear to have assumed larger than life status than the person and office of the President of Nigeria. That explains why more one month after Presidential directives for

pp or tunit y has opened for Nigerian graduates wishing to undertake postgraduate studies at Cranfield University as the school invites applications from such Nigerians for courses in her School of Water, Energy and Environment for the September 2020 academic session. Cranfield University, a specialist postgraduate university in the United Kingdom (UK), is ranked number two in UK for graduate employment, number one for Research income per academics and a 6-time winner of the prestigious Queen’s Anniversary prize. The University, according

to a statement obtained by BusinessDay in Lagos, is globally renowned for teaching and research excellence and creating worldwide leaders in technology and management. “Cranfield School of Water, Energy and Environment is dedicated to training students to become leaders in the environmental and energy sectors,” Ifeanyi Udofia, the university’s representative for sub-Saharan Africa, explained in the statement. Udofia explained further that the school also empowers students to facilitate changes and address major environmental issues like fossil fuel energy replacement, improving precision agriculture and soil health, wastewater treatment, among others. “Cranfield University has

a longstanding reputation for training professionals in the environmental and energy industries. Our postgraduate degree courses form an extensive portfolio covering all aspects of the diverse, modern environment and energy sectors and our fulltime postgraduate degrees are ideal for ambitious graduates and professionals from Africa and across the globe,” she said. The country representative also stated that, “with the current global focus on the full range of environmental issues, graduates of water, energy and environment courses at Cranfield University are highly sought after by employers globally as they possess advanced knowledge and management skills to analyse processes, principles and practices essential to environmental challenges.”

Expert urges students to consolidate quality education with entrepreneurship, service KELECHI EWUZIE

n industry expert has urged students to consolidate on the quality education they received in Secondary school by embracing entrepreneurship and service in their pursuit of higher education. Folake Akintelure made this known while speaking as the guest of honour at the virtual graduation ceremony of Greensprings School’s International Baccalaureate (IB) Diploma Programme. The Greensprings IB Di-

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ploma Programme is a twoyear sixth-form programme designed to prepare secondary school graduates for life in tertiary institutions. Akintelure in her speech to the graduates encouraged them to consolidate their quality education by learning from personal experience and that of their peers and people ahead of them. According to her, “No doubt, you have been equipped with a solid educational foundation at Greensprings School; but the truth is that, as you progress in your academic journey, you will face new challenges and you are allowed to make some mistakes.” @Businessdayng

She further opines that the students need to learn from all their experiences, including the experience of your peers and people ahead of you, as this would make your journey a bit easier. “To get yourself motivated no matter the circumstance, you should get the support of five people. A friend who hears out your dreams and deepest desires; a mentor who points you in the right direction when you are feeling lost; a coach who helps you maximize your potentials; a cheerleader who believes in you when you struggle to believe in yourself; and a peer who helps you focus,” she added.

Tuesday 07 July 2020

BUSINESS DAY

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Tuesday 07 July 2020

BUSINESS DAY

Wanted: lawyers that can handle fast growth and ambition Young companies say goodbye to the ‘department of No’. Plus: five general counsel that stand out for a start-up mindset Chris Fox Kambi Chief legal officer To support the gaming tech startup’s fast growth and plans to take advantage of newly liberalised laws on sports betting in the US, Chris Fox has built a legal team of substantial and diverse expertise. As a member of Kambi’s executive committee, his background as a strategy consultant helps him deliver commercially astute advice. Chief executive Kristian Nylen says the legal team helps Kambi enter new markets ahead of rivals while operating with “complete peace of mind when it comes to regulatory matters”.

AMY BELL

hree qualities top Chaman Sidhu’s list when she is hiring for her in-house legal team: collaborative; accepts failure when taking risks; and understands nuance — “an ability to work in the grey”, as she calls it. “People might think they want to work for an exciting tech company, but if their legal style doesn’t meet those needs, they will never thrive,” says Ms Sidhu, general counsel at Xero, a New Zealandbased accounting software company. The requirement to take risks and to keep pace with fast-growing companies can be hard to hear for traditionally trained lawyers. But those attributes are crucial for lawyers working in ambitious young companies — and for any in-house legal team in a business that prizes innovation. Founded in 2006, listed on the Australian Securities Exchange, and with a workforce of 3,000, Xero has nevertheless kept its collaborative start-up culture, says Ms Sidhu, who is based in Melbourne. The legal team must fit in with that. “That’s not always the way legal teams are seen,” she says. “There’s the stereotype of the department of ‘No’.” A start-up general counsel requires a particular mindset, says Oscar Hallen, at Sweden’s Klarna, which has grown from an online payments business started in 2005 to one of the world’s largest private fintechs. “You have to be a person for whom change comes naturally — you don’t get worried when you get curveballs,” he says. The decision to expand into a new territory, for example, might come more quickly than you had anticipated — Klarna has steadily expanded out of its Nordic base into 17 markets. Having to move fast and support innovation makes the traditional model — in which matters are escalated according to protocol — impossible, he says. Mr Hallen’s ability to adapt quickly to business challenges has roots in his unconventional career. Writing speeches for a Swedish prime minister, managing corporate affairs at Microsoft, and giving legal counsel to stakeholders at a private equity firm, Altor Equity Partners in Stockholm, were valuable preparation. Most law schools teach risk in a binary way — that you can do something or you can’t — and that just doesn’t work in a start-up Adam Sterling, Berkley Center for Law and Business As start-ups move from scrappy outfits to more established businesses, general counsel have an

Going for growth: lawyers need a start-up mentality to offer strategic advice amid fast-paced expansion © Getty

opportunity to work closely with the business strategy. But they must be willing to entertain calculated risks. “Start-ups require you to be . . . laser-focused on what risks can be taken, as opposed to being focused on eliminating risk,” says Chantelle Zemba, general counsel at online food delivery service Deliveroo in the UK. The company is a pioneer of the gig economy and then of the rollout of delivery only kitchens — so-called dark kitchens.

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Most law schools teach risk in a binary way — that you can do something or you can’t — and that just doesn’t work in a start-up Adam Sterling, Berkley Center for Law and Business

“Most law schools teach risk in a binary way — that you can do something or you can’t — and that just doesn’t work in a startup,” says Adam Sterling, executive director of the Berkeley Center for Law and Business. “It’s about understanding the magnitude of the risk, the cost of addressing it now versus later.” Mr Sterling established the Startup@BerkeleyLaw programme to help founders and their teams www.businessday.ng

understand the legal, finance and operational challenges they face. Alumni include James Silva, founder of ConciergeBot, and Kimberlie Le, co-founder of Prime Roots, a food company. “Most start-ups don’t bring on a full-time lawyer until they’ve raised hundreds of millions of dollars and have many employees,” he says. Even then they often hire a lawyer just to manage commercial contracts, rather than an in-house general counsel. Saying No is easy — we expect our lawyers to tell us how something can be achieved Knut Frangsmyr, Klarna, on the fintech’s general counsel Yet in-house legal expertise provided by someone who really understands the business early on is important, he says. It may even help founders avoid mistakes that could be more expensive later on. At the same time, tensions can arise, particularly in businesses that grow quickly around a founder with a strong personality. Tesla, for instance, has had seven general counsel in the past 10 years. The cult of personality gives such founders a level of power they would rarely enjoy in a public company, says Mr Sterling. That requires the general counsel to “manage up”. Some start-ups struggle with handling legal complexities as the business grows, because they try to act as fast and as nimbly as before. “That’s where legal can play a role — encouraging speed but not haste,” says Ms Sidhu. “You might have a negotiation happening in the UK with an external provider, the legal team in the UK, a data team in New Zealand, a procurement team in Denver . . . It’s not a situation of conflict, it’s needing to find ways to collaborate.” Being an in-house lawyer in-

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volves so much more than just technical laws, she says. This approach has wider implications for the evolution of legal teams. As companies of all types prize innovation more, general counsel have an opportunity to play an active role in business strategy. “Every business can benefit from their in-house legal team being strategic advisers,” says Ms Zemba at Deliveroo. Working with the executive team on solving problems is important, says Ms Sidhu. “That gets legal teams to the table — they’re seen as collaborative partners”. Five of the best general counsel for high-growth young companies The following stand out for their ability to build and lead legal teams. Profiles compiled by RSG Consulting and FT editors Nitin Banerjee Ola General counsel India-based technology company Ola is best known for its ride-sharing app Ola Cabs, which in 2018 launched in overseas markets, including Australia and the UK. After noting the difficulties regarding licensing, regulation and data privacy faced by rivals, such as Uber in London, it has designed a process to ensure passenger safety and organised training for its drivers. Nitin Banerjee’s team has been central to the company’s expansion, incorporating software for contract and governance management that can be used by staff across the business, enabling the legal team to focus on strategic work such as lobbying for differential voting rights in high-growth companies, or liaising with the central bank on processes for India’s growing digital payments sector. @Businessdayng

Oscar Hallen Klarna General counsel Oscar Hallen’s experience as a political speech writer, including for the prime minister of Sweden, was a fitting start for the general counsel of Klarna, a fintech that aims to keep several steps ahead of the sector as a whole. Chief operating officer Knut Frangsmyr says Mr Hallen is valued for his ability to spot business opportunities as much as for his legal insights. “Saying No is easy — we expect our lawyers to tell us how something can be achieved,” he says. Mr Hallen has focused on expanding the legal team in a way that supports Klarna’s growth. That includes putting lawyers into product teams so they are on hand to provide ready guidance. Rob Miller Skyscanner Chief legal officer An archetype of start-up general counsel, Rob Miller enjoys the challenge of fast-growth environments and of dealing with risk. His career history spans video-calling app Skype, delivery service Deliveroo, and King, the creator of video game Candy Crush. Noting that SkyScanner’s sustainability strategy, which includes partnerships for carbon offsetting, will be challenged by the coronavirus crisis, he says: “In times of adversity, as an individual and as [chief legal officer] you really prove your worth.” Chaman Sidhu Xero General counsel Chaman Sidhu has doubled her legal team at the accounting software business in the past year to 22. It reflects the significant expansion of the company, which enables smaller businesses to manage their accounts efficiently and inexpensively. Lawyers are deployed on management teams throughout the company to develop a deep understanding of business needs and how to communicate without using legal jargon.

Tuesday 07 July 2020

BUSINESS DAY

INSIGHT

Infrastructure in Nigeria: Unlocking

or example, in Brazil, it was reported that large amounts of state-controlled worker retirement funds had been invested in risky, badly managed and overpriced infrastructure related investments resulting in significant shortfalls (approximately US$2.5 billion in recent years).21 In some cases, pension funds have also been viewed by struggling governments as a means of paying down government debt. An example was the then-government of Argentina led by Cristina Kirchner which nationalized privately managed pension funds, reportedly as a means of accessing and using approximately US$30 billion in public employee retirement funds to meet the country’s debt service obligations.22 In South Africa, concerns were raised that government employee retirement funds managed by the state owned Public Investment Corporation could be used to bail out badly managed and indebted state owned enterprises, such as the national carrier South African Airways. 23 Rumors that political pressure would result in such misuse became so rife that the South African Minister of Finance, Malusi Gigaba was forced to publicly reassure South Africans “that their pensions are safe and there is absolutely no attempt to dig into their pensions for reasons that are unscrupulous.”24 Considering these examples of potentially politically motivated misuse of pension funds, pension reform and regulations aimed at imposing clear restrictions on pension fund investments have been viewed as essential.

ment in 2014 a contributory pension scheme was put in place for all public-sector employees and private sector employees in organizations with a certain number of employees. Under the new scheme, all covered employees were required to have a Retirement Savings Account (RSA) into which a portion of their compensation was contributed (a minimum of 8% by the employee and 10% by the employer). RSA funds were held by an authorized Pension Fund Custodian (PFC) and

invested by an authorized Pension Fund Administrator (PFA). The Pension Reform Act of 2014 put in place mechanisms to guard against the corruption, mis-appropriation and mis-management that doomed the previous system. These included criminalization and steep penalties (imprisonment of up to ten years and large fines) for committing offenses under the Act. A Pension Protection Fund was also established into which separate contributions were made by govern-

ment, PFAs and PFCs to cover any shortfalls and to guarantee minimum pension benefits. Reforms also provided greater transparency as quarterly reports to employees of investment performance and account balances were a mandatory aspect of the new system. Also, there was a built-in separation of powers between the PFC that held the funds and the PFAs that made the investment decisions. In addition, a National Pension Commission (PenCom) established

Pension Reform in Nigeria Pensions have had a long-standing history in Nigeria with the first pension plans put in place for public servants in the 1950s.25 The Nigerian pension system was historically a defined benefits scheme with all funds to be contributed by the employer (largely government) and a set payout upon retirement. As described by Dr. Hamza Sula Wuro Bokki (HBS AMP 192), CEO of the NPFP, “when you worked for government in the previous scheme you would have no idea of what your pension would be; only when you retired would your benefits be calculated, because the benefits were defined and not the contribution.”26 Unfortunately, due to widespread corruption and mismanagement the system was severely underfunded resulting in millions of Nigerian civil servants left without pensions and destitute in their old age. The situation reached crisis proportions with large scale protests almost bringing the country to a halt. In response, beginning with the Pension Reform Act of 2004 and its further refine-

under the Act provided related clarification, regulations and guidelines. Subsequent PenCom regulations provided very clear guidance on permitted pension investments. Pension funds could only be invested in certain corporate bonds, publicly listed shares, eligible bank money market instruments, commercial paper, registered investment funds, specialist investment funds with tangible underlying physical assets (including registered infrastructure funds), guaranteed government bonds, supranatural debt issued by Multilateral Development Finance Organizations and certain other listed offshore instruments such as Eurobonds.27 Reforms fostered confidence and encouraged greater participation in the new pension fund schemes. As a result, Nigeria’s pension assets grew significantly and in June 2017, were reported by the PenCom as having grown to a record 7.4 trillion Naira (approximately US$21 billion). With the Nigerian work force and system compliance expected to increase significantly, pension assets were expected to increase commensurately. According to Dr. Hamza “…the net asset value of Nigerian pension funds, which in 2017 was approximately 7% of the country’s GDP, has the potential to grow to as much as 20-25% in the next ten years.” Nigeria Police Pension Fund Prior to pension reform, police pension funds had been particularly badly managed and were viewed as a prime example of corruption and mismanagement in the government pension system. According to Dr. Hamza, police pension funds “…have gone through hell in terms of negative publicity. People would say that, police will just steal the money, that they don’t trust the police. But when you spoke to the police themselves, they would tell you, they were the victims, that the fund was for police, but they were not the managers. Civilians were the managers and they mismanaged it.”29 With reform, the police (like all government employees) were given the option of joining any of twenty authorized PFAs. However, due to challenges specific to police employees who were frequently transferred and therefore unable to receive regular reports of their retirement account performance as required by the Pension Reform Act, the police were authorized to establish their own pension fund. The NPFP was established in 2014 specifically for the 330,000 members of the Nigeria Police Force. Under the leadership of Dr. Hamza, its founding CEO, NPFP grew to become one of the largest PFAs with strong returns over a variety of asset classes. Dr. Hamza described this as having been achieved in a professional, independent and transparent way without interference from police management, noting: After being in operation for only three years NPFP is the fourth largest PFA by RSA funds and we were able to make a profit in the first year of operations. We paid a dividend in the second year of operations, last year and are currently

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Tuesday 07 July 2020

BUSINESS DAY

pension fund investments (2) building a 5.5 billion Naira head office from our operations, just for the headquarters. In building this portfolio, truly, to be honest with you, I can say there was no interference from the police and we did not allow them. They sit on the Board: a retired Inspector General as Chairman, a Deputy Inspector General as Vice Chairman and three other police officers sit on the Board, but they are all restricted to the Board with clearly defined roles which involve noninterference in investment decisions. So, I don’t have the police Inspector General sending for me, and saying, ‘Come and talk to me’. I talk to my Board and my Board goes and talks to the Inspector General. We’ve had a relatively free hand to manage and we don’t allow any interference in investment decisions. We are responsible and take that responsibility very, very seriously because if anything happens we are liable. So that has been the relationship. But I’m happy with what we have done so far.”30 NPFP’s initial success was largely achieved through investments in PenCom approved money market instruments, treasury bills, corporate bonds, government of Nigeria bonds and the equity of companies listed on the Nigerian Stock Exchange. According to Dr. Hamza, “in its first three years of existence NPFP made only safe investments that would certainly not lose any money. So, by 2017 NPFP assets under management were 350 billion Naira, out of which approximately 80 billion Naira was profit. Out of the 350 billion Naira, 80 billion Naira was investment profit.”31 As a result of this success and with 80 billion Naira in reserves Dr. Hamza was feeling ready to be more explorative and consider investments in infrastructure that would improve the lives of his police pension contributors. As he noted: Yes, travelling by road to Abuja is pretty nice but right outside of town and further north to Kaduna, the road is full of pot holes and accidents happen because of these pot holes. The police that contribute to NPFP work on these roads every day. If I should invest in repairing that road, I would think that I’m not only making Naira income, but I’m also making life safer and better for police employees and improving things for the country generally.32 Infrastructure Investment Models for Nigeria InfraCredit - Core Capital and Contingent Capital InfraCredit was a newly formed specialized financial guarantor established to support long term infrastructure financing in Nigeria. Start-up capital was provided by a number of sources. Primary among these were the NSIA and GuarantCo. NSIA provided the initial capital required for the company to commence full operations and draw other potential investors. The Private Infrastructure Development Group (PIDG) also supported the establishment of InfraCredit through its Technical Assistance Fund. NSIA was the manager of Nigeria’s Sovereign Wealth Fund and had total assets at December 2016 of 421 billion Naira

(approximately $US 1.2 billion).33 Established in 2012 as an independent agency by an Act of the National Assembly, NSIA was a key institution facilitating private investment into the Nigerian infrastructure sector.34 According to Uche Orji (HBS MBA ’98), CEO and Managing Director of NSIA, “the establishment of InfraCredit brings to fruition, one of the key pillars of NSIA’s infrastructure investment strategy, which seeks to facilitate the creation of and investments in institutions that contribute

to infrastructure development in Nigeria. It is expected that InfraCredit will enhance Nigeria’s capacity to attract and unlock latent pools of capital from pensions and insurance for infrastructure investment in key sectors of the Nigerian economy.”35 GuarantCo claimed to be the only “local currency” guarantee facility in the world targeting infrastructure in frontier markets. GuarantCo was highly rated including AA- by Fitch and A1 by Moody’s.36 GuarantCo was sponsored by the

governments of Australia, the United Kingdom, Sweden, Switzerland and The Netherlands through PIDG and FMO.37 PIDG was an NGO established in 2002 as a donor-financed group to help overcome the obstacles to private sector involvement in infrastructure development in developing countries.38 FMO was the Dutch development bank, founded in 1970 as a public-private partnership with 51% of shares held by the Dutch state (The Netherlands) and 49% held by commercial banks,

Exhibit 8 Section 5.2.3 of National Pension Commission Regulation on Investment of Pension Fund Assets, April 2017 5.2.3 Pension Fund Assets can be invested in infrastructure projects through eligible bonds, Sukuk, subject to the following requirements: i. Any infrastructure project to be invested in, shall be: a.) a minimum of N5 billion in value. b.) awarded to a concessionaire with good track record through an open and transparent bidding process in accordance with the due process requirements set out in the Infrastructure Concession and Regulatory Commission Act (ICRC Act) and any regulation made pursuant thereto and certified by the Infrastructure Concession and Regulatory Commission (ICRC) and approved by the Federal Executive Council (FEC). c.) core infrastructure projects, whose business plans and financial projections indicate that they are viable as well as economically and financially rewarding for investment by pension funds. ii. The bonds or sukuks issued to finance the infrastructure project shall in addition to the requirements of Section 5.2.2 above: a.) have robust credit enhancements e.g. guarantees by the Federal Government or eligible MDFOs; b.) have a maturity date that precedes the expiration of the concession; and c.) have a feasible and enforceable redemption procedure in the event of project suspension, cancellation or, in the case of regulated sectors, when changes in regulatory or policy decisions make the project to differ significantly from its original financial projections. iii. Where infrastructure projects are financed through Infrastructure Funds, pension fund investments shall be subject to the following additional requirements: a.) The value of the Infrastructure Fund shall not be less than N5billion. b.) The Infrastructure Fund shall have well defined and publicized investment objectives and strategy as well as disclosures of pricing of underlying assets, including any other necessary information. c.) All annual financial statements of the Fund shall be audited by independent firm(s) of chartered accountants registered by the Financial Reporting Council (FRC). d.) The Infrastructure Fund shall have satisfactory pre-defined liquidity/exit routes such as IPO, sale to other Infrastructure Funds, Trade sale, sale to a strategic investor etc. e.) The Funds shall be managed by experienced Fund Managers, versed in infrastructure financing and registered with the SEC as Fund Managers. f.) A minimum of 60% of the Infrastructure Fund shall be invested in projects within Nigeria. (CIO), of the Fund Manager shall each have at least ten (10) years relevant and continuous experience in infrastructure financing or investment management. h.) The key Principals shall not exit the Fund without prior notice to the PFAs, which shall not be less than 90days from the exit date. This ‘exit clause’ shall be expressly stated as a condition in the investment agreement/ covenant between the PFA and the Fund Manager. i.) Where an Infrastructure Fund does not have an eligible Sovereign Wealth Fund and/or MDFO as Limited Partners but the Fund Manager has a minimum Investment Manager rating of ‘BBB’ issued by, at least, two rating agencies registered or recognized by SEC, the Fund Manager shall retain a minimum investment of 3% of the Infrastructure Fund. j.) Where the Infrastructure Fund has an eligible Sovereign Wealth Fund and/or Multilateral Development Finance Organization as Limited Partners, the Fund Manager shall retain a minimum of 1% of the Infrastructure Fund. k.) The Fund shall have an Advisory Board with independent representatives of Limited Partners, being in majority. l.) Prior to investment as well as during the tenor of investment in any Infrastructure Fund, PFAs are to ensure that the above-mentioned Advisory Board has responsibility over audit functions regarding transactions with parties related to the Fund Manager and compliance with the Fund’s investment guidelines and policies. Source: National Pension Commission, Regulation on Investment of Pension Fund Assets, April 2017, https://www.pencom.gov.ng/category/ regulations-codes/regulations/regulation-on-investment-of-pension-funds-asset/, accessed January 2018.

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trade unions, and other members of the private sector.39 Other potential investors in InfraCredit equity or quasi-equity included International Development Finance Institutions (IDFIs) such as AFC, Proparco (a development institution largely backed by France) and the German Development Bank (KfW). These potential IDFI investors were expected to crowd in private institutional investors. InfraCredit adopted a two-tiered capital raising approach. The core capital was paid in and was part of the balance sheet. The initial funding for core capital was expected to be up to 18 billion Naira (about US$ 50 million). Of this, NSIA had funded the initial contribution of about 9 billion Naira (about US$25 million).40 This pool of liquid capital was available for operating expenses, and of course if needed to pay any claims made on InfraCredit obligations and was a “first loss” protection to the beneficiaries of credit guarantees. The second tier was contingent capital. This was an unfunded “second loss” component of the capital structure, acting as a liquid credit backstop to the core capital. At the start of the facility these were 15 year unconditional and irrevocable obligations of the contingent capital providers. The funds were callable following an intricate contractual process. The intent was that these callable funds would be a revolving line available as needed with a cumulative outstanding limit at the start of operations of US$ 50 million in Naira equivalent (about 18 billion Naira in late 2017). GuarantCo was the lead obligor with an initial obligation of up to US$50 million (in Naira equivalent). The other potential participants in this tier were expected to be IDFIs including the African Development Bank (AfDB), the International Finance Corporation of the World Bank Group (IFC), the French Development Agency (AFD), and KfW. At inception, InfraCredit had no debt as part of its capital structure. On the asset side, InfraCredit invested the paid in capital in secure liquid securities like treasuries and AAA rated bonds.41 InfraCredit did not plan to invest directly in infrastructure projects, so it was not expected that assets would include a significant amount of loans to or equity in projects or funds. InfraCredit was neither a bank nor an insurance company and its capital structure and financials reflected this difference. See Exhibit 9 for a presentation of InfraCredit’s 5-year Proforma Income Statement and Balance Sheet as projected by independent analysts, Exhibit 10 for the financials of a typical bank and Exhibit 11 for the financials of a typical insurance company. Continues tomorrow

Tuesday 07 July 2020

BUSINESS DAY

Media business $277bn value increase in global top brands indication of resilience amid Covid-19 - Survey Daniel Obi

he increase of 5.9% in total value of Top 100 Most Valuable Global Brands despite the economic, social and personal impacts of COVID-19 indicates that the brands dominated by technology companies are more resilient and less volatile in the current crisis. The BrandZ 2020 total brand value increase showed additional $277bn of brand value growth over the past year. According to the latest BrandZ ranking released by WPP and Kantar, the total brand value of the Top 100 global brands reached $5 trillion, “equivalent to the annual GDP of Japan. It has increased by 245% since 2006, when the total brand value first reached US$1 trillion”. Technology brands continued to dominate the top of the ranking, representing over a third (37%) of brand value in the Top 100 and growing overall by 10%.

Amazon, a retail company maintained its position as the world’s most valuable brand, growing 32% to $415.9bn. Having first entered the BrandZ Global Top 100 Most Valuable Brands ranking in 2006, Amazon’s value grew by almost $100bn this year and accounts for a third of the Top 100’s total growth. The ranking showed that Apple maintained its position as the second most valuable global brand (+14%, $352.2bn) while Microsoft regained the no. 3 position

(+30%, $326.5bn) ahead of Google (+5%, $323.6bn) at no. 4, due to the growth of its cloud-enabled workplace ecosystem that incorporates Office365 and Microsoft Teams, allowing people to maintain ‘business as usual’ during the lockdown. Asian brands represented a quarter of the Top 100 brands, including 17 Chinese brands. Alibaba (+16%, no. 6, $152.5bn) was the most valuable Chinese brand with Internet services giant, Tencent (+15%, no. 7, $151bn) one place behind.

MasterCard entered the Top 10 for the first time this year, due to strong financial performance, supported by growing brand equity especially in engaging consumers: successfully fitting into the ‘ecosystem’ of their everyday lives and gaining a close emotional connection through its purposeful positioning Adeola Tejumola, CEO East, West & Central Africa, Insights Division at Kantar in the report said “The BrandZ report highlights the growing power of tech with the online world enabling virtual connection, shopping and remote working. “COVID-19 has plunged many into the digital world headfirst, and many of these new behaviours are likely to stay in the next normal, so tech-savvy brands in Nigeria that can enable these behaviours are likely to benefit in the long run”. he said. Doreen Wang, Global Head of BrandZ at Kantar, also said “Innovation has proven to be a key driver for growth in this year’s Top 100, and a way to prevent decline.

AREWA24 reiterates commitment to advertisers, 40m subscribers

s part of efforts aimed at giving its teeming advertisers and over 40 million subscribers more value for their money, Hausa language entertainment and lifestyle television channel, AREWA24, has announced a major slate of new and exciting shows, in commemoration of its 6th anniversary. Speaking on the new offerings, the company’s Chief Commercial Officer, Celestine Umeibe, in a statement, explained that the company, which clocked six in June, this year, would debut a new, gripping drama series, “Labarina,” from the well-known and highly respected Hausa Director, Aminu Saira, in July, this year. He added that the company’s subscribers would also be treated to a new Season-2 of the popular hit comedy series, “Gidan Badamasi,” while it would also premier all new episodes of its longest-running drama series in Northern Nigeria, “Dadin Kowa”. Umeibe also assured subscribers of the company’s commitment to airing the most recent and popular Kannywood movies, adding that a collection of new movie titles

had been licensed for rollout in the weeks and months ahead. As part of efforts at maintaining its strong bond with the children and youth categories, he said AREWA24 would also be teaming up with the iconic children’s show, Sesame Street, to present a Nigerian version of the show, “Dandalin Sesame”. He added that the uniqueness of the Dandalin Sesame would be derived from the fact that, while it features all the show’s lovable characters, the characters would however be domesticated, and would be in Hausa to reflect the nation’s rich cultural context heritage. AREWA24 will also debut a kids’ educational show, “Akili and Me,” from the same producers as the popular youth show, Ubongo Kids, which currently airs on AREWA24, among others. Umeibe expressed the belief that the company’s new youth show, “My Better World,” an animated series that follows the exciting adventures of six African teens as they navigate the complex challenges of school, family and friendship, would also thrill the nation’s youths the programme is designed for.

AAAN new president, Steve Babaeko sets CSR: Rotary Club of Lagos donates birth agenda for advertising industry growth delivery kits to Itamarun Health Centre

oing by his character, vibrancy and industry achievements in a short period, Steve Babaeko, the new president of Association of Advertising Agencies of Nigeria (AAAN) is likely to breathe new life into the 47- year old association which will expectedly rub off on the industry. Babaeko who is the 21st president of the creative body has already set his agenda. Steve Babaeko, who is the CEO and Chief Creative Officer, X3M Ideas, a creative agency founded in August, 2012 with several local and international awards and which has lifted many companies to stardom including Etisalat (now 9mobile), plans to make the AAAN more visible. He also plans to give the Lagos Ideas Festival (LAIF) Awards the international flair it deserves, and work to foster unity and healthy competition between agencies in the association. In addition, Steve Babaeko said he is going to pay a lot of attention to women empowerment as he promises to ensure gender balance in the leadership of the AAAN. Not forgetting the chief Advertising regulatory body, the Advertising Practitioners Council of Nigeria (APCON), Steve Babaeko believes that it is

in the association’s best interest to influence the body to better enforce the laws and policies that protect the Advertising industry. Within the last few years, Steve Babaeko had served as the Publicity Secretary and more recently, the Vice President of the association. Having devoted years to the advancement of the association in his capacity as both the Publicity Secretary and Vice President, the X3M Ideas CEO intends to use his new position to give the association more visibility while building it to world-class standards. Speaking on his new appointment, Steve Babaeko said in a statement, “I am excited to begin this journey as the AAAN president. It is time to

revive our purpose by advancing our interests within and beyond Nigeria’s marketing communications landscape. Together, I believe that we can build the advertising industry of our dreams.” Between 2016 and 2018, Babaeko was a jury member of the New York Advertising Festival and his impressive stint in the International advertising scene also saw him featured on Adweek’s list of the 13 global creative leaders in 2019 and served as a judge at the 2017 The Loerie Awards. Steve Babaeko believes that with the joint effort of every member of the association, the AAAN has the capacity to meet certain world-class standards and even surpass them.

s part of its humanitarian interventions, Rotary Club of Lagos recently donated some birth delivery kits to Itamarun Health Centre in Lekki Free Trade Zone Area of Lagos, for the use of expectant mothers in the area. Delivering the items to the representative of the community, and the head of the Itamarun Health Centre, in Lagos, President of the Club, Dare Adeyeri stated that the decision to donate the items was informed by the need to check the high infant mortality rate in the area. The newly elected President, stated that in tune with the club’s philosophy of giv-

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kilometres , every day. “We believe this is a year of giving like never before. The interventions have become necessary to alleviate the plight of the people of Itamarun Community. Itamarun community is flood-prone. It is supposed to be a fishing community. But with the dredging of the area, they no longer have much space to farm. There is so much poverty in the area, hence the various interventions,” he stated. Receiving the items, the representative of the community, and a retired matron at Itamarun Health Centre, Helen Folarin commended the Rotary club of Lagos for coming to the aid of the community.

Firm flags-off Medical Laboratory Scientists competition in Nigeria Daniel Obi

Steve Babaeko

ing, the Rotary club of Lagos decided to intervene after a careful study of the needs of the community. He added that besides the donations, the organisation had also come up with several interventions, aimed at alleviating the plight of this riverine community, which it had adapted as its community. One of such interventions, he stated, was the disbursement of soft loans to the women in the community to assist them in their petty businesses. “We are also trying to build a primary school for the people in the community, to enable the children in the community have access to quality education, without having to trek

edical laboratory scientists whose function is quality diagnosis before any treatment could be effective, play critical role in healthcare delivery. They are described as bedrock of the medical practice as all others including the Doctors, Nurses and Pharmacists rely on their diagnosis to provide quality healthcare and treatment. https://www.facebook.com/businessdayng

But the medical laboratory scientists are hardly seen or recognized. It was therefore an attempt recognize these unsung heroes in the medical practice that inspired ISN Products Nigeria Limited, Nigeria’s foremost supplier of Medical Diagnostic Products and Services, to institute ISN Medical Laboratory Scientist of the Year Award; aimed at recognising and rewarding the unsung heroes. Flagging off the maiden edition of the award in Lagos the Executive Director, ISN @Businessdayng

Products Nigeria Limited, Felix Ofungwu, disclosed that the award was instituted as part of the company’s contribution towards encouraging and promoting excellence amongst Medical Laboratory Scientists in Nigeria. Ofungwu described Medical Laboratory Scientists as the Unsung Heroes of the Medical practice who play a very key role in health service delivery and are well-deserving of honour and recognition like their other counterparts in the medical sector.

Tuesday 07 July 2020

BUSINESS DAY

FEATURE Kano provides evidence that, in concert, Nigeria can curtail and contain any pandemic

hen the recent Coronavirus (COVID-19) pandemic broke out in Nigeria, Lagos easily emerged as its epicenter on account of its position as the nation’s aviation and maritime hubs and, therefore, the de facto gateway to the federation. Lagos and Ogun states are the indisputable industrial nerve centres of the West African region. It was only a matter of time before Abuja came into the picture as a hotbed for the pandemic, given its political status and the next in command to Lagos as an international travel destination. Authorities in other states, such as Oyo, Rivers and Kaduna, with huge metropolitan centres (Ibadan, Port Harcourt and Kaduna, respectively) quickly jumped into action with stringent containment measures. In the process, Oyo’s Seyi Makinde got infected, along with Kaduna’s Nasir el Rufai, Bauchi’s Bala Muhammed and Ondo’s Rotimi Akeredolu. Meanwhile, the whole world was waiting on Kano, the most populous state in the federation. With no cases of COVID-19 infections reported for a long spell, it was like “waiting in vain”, as reggae maestro Bob Nesta Marley would put it – or almost. This obviously created in the authorities in the state a false sense of security and safety from the rampaging virus that has literally sent the entire world into a global lockdown, with national economies lying prostrate. Various theories were advanced to explain why the corona virus had found Kano impenetrable, including the idea that the hot climate inhibited its spread. But those who gleefully bandied this viewpoint forgot that Iran, the cauldron of a country, was reeling in the pandemic! However, the bubble soon burst. Soon the media were reporting hundreds of deaths due to unexplained causes. To make matters worse, authorities in the state went into denial. To compound a really bad situation, the vast majority of the deaths were not interrogated by way of autopsies. As many as 1,750 people died in the region during the period of April-May, prompting investigations to determine whether they were related to COVID-19. In a situation where hundreds of dead persons were buried without the conventional autopsy, Garba Shehu, senior special assistant on publicity to the President Muhammadu Buhari, said in a statement that “While some may wish to believe that there are other causes at play like hypertension, diabetes, meningitis, and acute malaria, there are others who say it is COVID-19.”

Osagie Ehanire, minister of health

At this stage, the federal government stepped in, when the federal ministry of health set up h-powered team to undertake missions to Kano and other neighboring states, including Jigwa, where similar “mysterious” deaths were also being reported. The team was led by Nasir Sani-Gwarzo, who was in charge of the National AIDS Control Programme (NASCP) during the peak of the Acquired Immunodeficiency Syndrome (AIDS) in the mid-1990s and is currently permanent secretary of the federal ministry of Industry, Trade and Investment. The Consultant to the team was another well-known epidemiologist, Abdulsalam Nasidi, the pioneer DirectorGeneral and CEO of the National Centre for Disease Control (NCDC). In the process, a new terminology crept into the lexicon of public health discourse in Nigeria – “verbal autopsy” – applied by epidemiologist to the system of gathering information about symptoms and circumstances for a deceased on whom no autopsy could be performed. For cultural reasons, those who died during this period were immediately buried. So, health officials could not reach any of them for the conventional autopsy, and had to resort to the verbal autopsy by interviewing relatives and following up to the grave yards to see what happened to them before they died and get the medical history of the deceased. COVID-19 containment officials tested those that died while they were on ground, to determine what they had died of, including those that did not see obvious sympwww.businessday.ng

toms of Covid-19. They also took samples from relatives of the dead. It was estimated that up to 65-68 percent of those that died actually complained of corona symptoms like coughing, difficulty in breathing, headaches, loss sense of smell, some abdominal pain, just what you see in Covid-19 patients before they die, in addition to the fact they had other comorbidities like diabetes, hypertension, pneumonia amongst others. Indeed, in all probability, the vast majority of the deaths were actually triggered by coronavirus. Kano quickly became a State to look out for, as it quickly shot up from no cases to being among the top 5, in the list of State with high numbers of Covid-19 infections in the country. In an interesting twist, the former commissioner for works, Mu’azu Magaji, who had recently been sacked for his inappropriate response to the death from COVID-19 of President Buhari’s chief of staff Abba Kyari, was reported to have contracted the coronavirus. Meanwhile, after Abdullahi Umar Ganduje sparked massive criticism for denying that Kano had recorded any strange deaths, the Kano State governor threw his weight behind the work of the Sani Gwarzo-led team. Although he later denied that the percentage of the deaths that had covid 19 were up to 60%. The Federal explained that it did not state that 60% had COVID19, but that their death could have been triggered by Coronavirus. The Minister of Health promised to present the full report of the Mortality survey to the Governor when the study is completed,

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Government then intensified testing and tracing contacts of the deceased. Help came in torrents. One of the earliest donors was Aliko Dangote Foundation, run by Africa’s richest man and a Kano native, which provided one of the testing laboratories in the state. The labs offer a combined capacity of 1,000 tests per day. The state had also to grapple with implementation of lockdown measures amidst difficult economic environment and lack of trust between the state and the people due to recent political issues. As at the time of this report (June 4 2020), as would be reasonably expected for demographic reasons, Kano (with 1,262 reported cases) was in the fifth position, with Lagos (10,910) topping the league, followed by FCT (2,080) , with Oyo(1,451) and Ondo(1,266) following among the states of the federation and Abuja. It would certainly have been worse. In a recent exclusive interview with BusinessDay newspaper, Dr. Sani-Gwarzo looks back at the achievements of the team: “We went to Kano on the 28th of April, with people dying, and more cases of Covid-19 being reported. We could see the concern of people, the apprehension and the confusion. “That was the situation. But I am happy to say that at the end of our assignment, the situation has stabilized and normalcy is returning -- it has not returned fully, but the death rate has started reducing to

‘

It was estimated that up to 65-68 percent of those that died actually complained of corona symptoms like coughing, difficulty in breathing, headaches, loss sense of smell, some abdominal pain, just what you see in Covid-19 patients before they die...

‘

Bashir Ibrahim Hassan

@Businessdayng

a pre-epidemic level; and although the number of Covid-19 cases was rising, hope in the minds of people increased, and people started accepting the disease as a reality, going for testing; with those who test positive no longer scared to go for treatment. The treatment centers are performing and people are being discharged from the centers. More people are coming forth to volunteer to support. People who had tested positive and tested negative at the end of the day were openly requesting to be made public.” In a similar vein, Prof. Nasidi reflects: Before we came, there were many things put in place by the State Government Task Force but while some were functioning, others were not functioning well. Some of the things that were functioning well, to some extent were the handling of patients in the case management section and the issue of doing surveillance, following up to see where the disease is, and also the issue of establishing more treatment centers and test-turn around leading to delay in release of results. But, unfortunately, there was no coordinated approach to all these because some of the task force members became affected. With 5 or 6 members in isolation, the taskforce was virtually paralyzed. So, this meant that the virus was traveling wide in communities. As soon as we came, we quickly organized training in groups -- the doctors, the nurses, the laboratory workers immediately on how to prevent transmission of the virus, which is infection prevention and control. We did practical demonstrations at the centers. Since we left, no transmission has been reported among health workers and the laboratories resumed full work. We managed to stabilize that and built the confidence of the health care workers to prevent them from abandoning their duties. We also fast-tracked the process of laboratory tests and release of results, to reduce the amount of time that people were kept in isolation centers. The situation presented by Kano demonstrates the importance of concerted action in an emergency. Deservedly, therefore, plaudits go to President Buhari and the Minister of Health Dr. Osagie Ehanire who constituted a team that included experts from the Irrua Specialist Hospital to help Kano state out of a veritable quagmire; the government of Kano state led by governor Abdullahi Umar Ganduje that was receptive to new ideas for its containment efforts; the media that drew attention to a grim situation; and civil society that out pressure on relevant authorities to act.

Tuesday 07 July 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

Argentina sweetens debt offer to bondholders to break deadlock New terms are ‘maximum effort’ country can make, president says MICHAEL STOTT, COLBY SMITH AND BENEDICT MANDER

rgentina has announced an improved offer to holders of $65bn of foreign debt, hoping to break a deadlock that has persisted since it defaulted in May. The latest offer, Argentina’s fourth since the talks began earlier this year, would raise interest payments and cut losses on bondholders’ initial investments, as well as shorten the maturities on the new bonds. In a radio interview on Sunday, President Alberto Fernández described the offer as the “maximum effort” that Argentina could make. A person close to the negotiations on the government side said there are “zero chances of any amendment”, noting that “we have reached a point where anything more and we’d rather not have it”. “This is definitive,” the person added. “If we give more it’s very, very doubtful that it could be sustainable – so it would hurt the credibility of what we are doing.” The improved terms suggest a recovery value of roughly 53 cents on the dollar, according

President Alberto Fernández said bondholders would have until August to accept the deal © REUTERS

to analysts, an increase from the approximately 40 cents on the dollar recovery value of an earlier proposal. Interest payments on the new bonds to be swapped for old debt will begin in 2021, a year earlier than in the government’s last offer, and their maturities will stretch until 2046. Holders of bonds issued in 2005 will be able to keep their stronger legal protections, and accrued interest will be covered

in a bond due 2030. Creditors have until August 4 to accept the terms. A successful deal hinges on the support of the two biggest bondholder groups, which comprise holders of bonds issued after 2016 and previously restructured so-called exchange bonds issued in 2005 and 2010. The older bonds require a higher approval rate for a successful restructuring. Together, the two groups —

which include BlackRock, Fidelity, T Rowe Price, VR Capital Group and Monarch Alternative Capital — could block a deal as they own 35 per cent of the total outstanding bonds. One bondholder from one of the largest groups said he doubted the offer would attract sufficient support from creditors. But another said the government’s offer was an “encouraging” sign, stating that the two sides “are not too far away

now” on the terms. Siobhan Morden, head of Latin American fixed income at broker Amherst Pierpont, said it was a “high risk strategy” for the government to proceed without the explicit backing of those groups. But she believes there will be significant pressure for the creditors to accept a proposal that is seen as a “considerable improvement from where Argentina started a few months ago”. Talks had been close to collapse and last Tuesday, the two largest groups complained of a “lack of serious engagement” from the Argentine authorities and said there had been no meaningful talks since June 17. The IMF, which lent $44bn to Mr Fernández’s predecessor Mauricio Macri in a failed attempt to stabilise the economy, has backed Mr Fernández so far. It has published analysis suggesting that Argentina’s debt burden is unsustainable and that it cannot afford to pay creditors much more than it is currently offering. Argentina’s default in May was the ninth in the country’s history and comes during one of the world’s longest and strictest lockdowns to combat coronavirus.

Argentina sweetens debt offer to bondholders to break deadlock Police hold Xu Zhangrun in latest sign of crackdown on dissent MICHAEL STOT T, COLBY SMITH AND BENEDICT MANDER

Since Xi Jinping took office in 2012, authorities have jailed dozens of human rights lawyers and activists © Mark Schiefelbein/AP

very, very doubtful that it could be sustainable – so it would hurt the credibility of what we are doing.” The improved terms suggest a recovery value of roughly 53 cents on the dollar, according to analysts, an increase from the approximately 40 cents on the dollar recovery value of an earlier proposal. Interest payments on the new www.businessday.ng

bonds to be swapped for old debt will begin in 2021, a year earlier than in the government’s last offer, and their maturities will stretch until 2046. Holders of bonds issued in 2005 will be able to keep their stronger legal protections, and accrued interest will be covered in a bond due 2030. Creditors have until August 4 to accept the terms. A successful deal hinges on

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the support of the two biggest bondholder groups, which comprise holders of bonds issued after 2016 and previously restructured so-called exchange bonds issued in 2005 and 2010. The older bonds require a higher approval rate for a successful restructuring. Together, the two groups — which include BlackRock, Fidelity, T Rowe Price, VR Capital Group and Monarch Alternative Capital — could block a deal as they own 35 per cent of the total outstanding bonds. One bondholder from one of the largest groups said he doubted the offer would attract sufficient support from creditors. But another said the government’s offer was an “encouraging” sign, stating that the two sides “are not too far away now” on the terms. Siobhan Morden, head of Latin American fixed income at broker Amherst Pierpont, said it was a “high risk strategy” for the government to proceed without the explicit backing of @Businessdayng

those groups. But she believes there will be significant pressure for the creditors to accept a proposal that is seen as a “considerable improvement from where Argentina started a few months ago”. Talks had been close to collapse and last Tuesday, the two largest groups complained of a “lack of serious engagement” from the Argentine authorities and said there had been no meaningful talks since June 17. The IMF, which lent $44bn to Mr Fernández’s predecessor Mauricio Macri in a failed attempt to stabilise the economy, has backed Mr Fernández so far. It has published analysis suggesting that Argentina’s debt burden is unsustainable and that it cannot afford to pay creditors much more than it is currently offering. Argentina’s default in May was the ninth in the country’s history and comes during one of the world’s longest and strictest lockdowns to combat coronavirus.

Tuesday 07 July 2020

BUSINESS DAY

COMPANIES & MARKETS Turkey bans six banks from betting against local stocks Barclays, Credit Suisse and BofA face three-month exclusion as other trio are banned for a month LAURA PITEL AND EVA SZALAY

urkey has banned six international banks from betting against its stock market in the latest in a series of moves against foreign investors engaged in short selling. Borsa Istanbul said Barclays, Credit Suisse and Merrill Lynch (part of Bank of America) would be subject to a three-month ban on short sales of shares listed on its exchange after failing to comply with a requirement to notify the authorities about such trades. The bourse added that Goldman Sachs, JPMorgan and Wood & Co, the specialist emerging markets investment bank, would face a one-month restriction for the same reason. BofA, Barclays, Credit Suisse and JPMorgan declined to comment on the announcement. The other two did not immediately respond to requests for comment. The move risks compounding concerns among foreign investors that Turkey has adopted an increasingly hostile approach to overseas fund managers, especially those looking after shortterm portfolios sometimes classed as “hot money”. Analysts say that such flows of foreign capital are vital for funding the country’s economic growth, especially at a time of low levels of longer-term direct investment. But Turkish authorities have increasingly railed against what they describe as manipulative behaviour by foreign “speculators” in recent years as the lira has faced bouts of volatility. In 2019, authorities launched an investigation into JPMorgan after the bank published a report that advised clients to short the lira. In May, as the currency hit a new record low,

Turkey’s banking regulator briefly froze UBS, Citibank and BNP Paribas out of its foreign exchange market. The regulator said that the decision to ban the trio was taken after the banks failed to settle their lira liabilities on time. But some investors worry that it is part of a broader effort to push them out of Turkish markets, and say that such steps have already led to an exodus of capital. Foreign investors have withdrawn $7.9bn from the country’s stock market since the start of the year, according to central bank statistics. Berat Albayrak, the country’s finance minister, has repeatedly indicated that he wants to make his country less reliant on short-term foreign capital — and has praised the increased share of local investors in the stock market as a positive development. The latest decision to temporarily ban banks from engaging in short selling comes a week after the country’s capital markets board announced it was lifting a bar on betting against the top 30 shares listed on the Istanbul bourse. Short selling involves a fund borrowing shares and then selling them in the hope of buying them back later at a lower price and pocketing the difference. In its announcement, the regulator reiterated a requirement to notify the authorities of any intraday short-selling activity, which sees investors open and close a position within a single day. A person close to the Turkish government said the banks had failed to comply with that requirement. “When you say that six foreign investors are banned, it sounds horrible but the details are actually very benign,” said the person. “The rules are very clear. [The banks] failed to obey the rules.”

Companies pause frantic fundraising to assess pandemic damage

Just $70bn was raised last week through global debt markets, the lowest since March ERIC PLATT AND JOE RENNISON

o m p a n i e s a re pausing for breath after a f ra n t i c f o u rmonth race to secure cash, drawing down bank credit lines, agreeing government rescue financings and issuing new debt and equity to outlast the coronavirus crisis. The frenetic pace of fundraising, which set records in debt and equity markets, provided much-needed money to airlines such as American and United, cruise operators Carnival and Norwegian and automakers Ford and General Motors. It was a sudden inflow that helped prevent a big rise in corporate failures, at least for the moment. Bankers say companies are now assessing the damage wrought by the crisis and waiting before they borrow more, even as debt markets remain wide open. Padded by the extra cash, companies raised just $70bn last week through debt markets, the lowest since midMarch when the coronavirus crisis sent stock and bond prices tumbling. US issuance dropped to just over $5bn in the holiday-shortened week, according to data provider Refinitiv. The slowdown follows the most intense burst of capital raising in history, with about $5.4tn secured by companies across the globe since the year began, including $3.9tn since the start of March. “Companies have been taking insurance policies out, not knowing the depth or length of the recession,” said Kevin Foley, who heads debt capital markets at JPMorgan Chase. He added that some of the groups had assumed lockdowns could persist for a year or longer, which is why several companies moved to raise cash multiple times

The frenetic pace of fundraising has set records in debt and equity markets © FT montage

since March. Historic backstop measures from the Federal Reserve in March paved the way for companies to load up on debt, as the US central bank appeared to disregard its earlier warnings of rising corporate leverage and deteriorating lending standards. Borrowing costs for highgrade companies, which hit the highest level in more than a decade in March as investors prepared for a wave of defaults, declined swiftly after the Fed moved to backstop the $10tn US corporate bond market. Government interventions also softened the blow, with stimulus measures helping lift consumer spending and shore up confidence in markets. Along with rescue financings for the likes of Boeing, blue-chip companies including Walt Disney, JPMorgan and AT&T borrowed billions of dollars through debt markets. Others such as US regional bank PNC Financial and telecoms-totechnology group SoftBank raised cash by selling stakes in non-core units. For PNC it was a $13.3bn position in asset manager BlackRock, while SoftBank sold off $15.9bn of stock in T-Mobile. “Investment grade companies have the luxury of being able to say, ‘Here I’ll

[raise] too much liquidity,’” Mr Foley said. “No CFO was ever fired for having a mentality of [securing] too much liquidity.” The rebound in markets allowed a long list of companies to lock in their lowest ever borrowing costs, including ecommerce behemoth Amazon and drugmaker Pfizer. Groups in the eye of the storm such as United Airlines and Carnival, meanwhile, were able to secure funds by pledging assets. That collateral, which included aircraft, ships, islands and rewards programmes, helped entice creditors even as rating agencies warned that the risk to lend to the vast majority of companies had increased. Some advisers such as Roxane Reardon, a partner at law firm Simpson Thacher, have tempered their expectations of how much more debt can feasibly be borrowed this year, given that discouraging outlook. Analysts at Bank of America note that leverage in the US high-yield bond market has already surpassed levels seen during the 2008 financial crisis — in terms of the ratio of companies’ gross debt to their earnings before interest, tax, depreciation and amortisation — and is fast approaching levels last seen in the early 2000s. That is causing credit

rating agencies to express concerns. “At some point the capital structure becomes too leveraged and that’s where the rating agencies say, ‘do liquidity first so we don’t have to worry about it going away . . . but then let’s wait for the cash flows to pay down debt,’” said John Chirico, co-head of North American banking and capital markets at Citigroup. Many companies have already hit the wall. Corporate America has experienced a spate of bankruptcies, as companies in the energy and retail sectors have been shut out from capital markets. Groups such as shale producer Chesapeake, mid-market family restaurant chain Chuck E Cheese and Canadian circus act Cirque du Soleil are now attempting to restructure their businesses under bankruptcy protection. But advisers and investors have cautioned that many of the companies pushed over the edge were already struggling with high debt burdens before the crisis. “There’s still uncertainty over where this goes; everybody wishes they had a crystal ball,” said Ms Reardon. “But people have a sense that they are more confident in how they are going to manage it and how the markets are going to respond.”

Lagos State Government to sensitize the public on ways of preventing infection by the virus. He equally urged Nigerians to strictly observe the COVID-19 prevention guidelines as stipulated by the NCDC, especially the use of antiseptics and disinfectants. “With regular antiseptic use, the disease spread can be curtailed and prevented,” he said. Samuel Obayemi, the zonal commanding officer, FRSC

in charge of both Lagos and Ogun states, said FRSC will deploy specially trained officials to manage the Kiosks and the enlightenment campaign to ensure that it makes a meaningful impact in the control of the spread of the Coronavirus. Obayemi, who was represented by Olusegun Ogungbemide, the Sector Commander, Lagos Command, FRSC, said the partnership with Neimeth is to provide service to humanity.

Neimeth partners FRSC on COVID-19 prevention

eimeth International Pharmaceuticals Plc. in partnership with the Federal Road Safety Corp (FRSC) has kicked off a campaign to create awareness on the prevention of the Coronavirus (COVID-19) disease. The company is sponsoring Public Enlightenment Kiosks and other public awareness materials to sensitize the public on the various guidelines to prevent the spread of COVID-19.

The campaign which is being run in collaboration with the Zone 2 Command of the FRSC, covering Ogun and Lagos States kicked off on Friday 26 June. The kiosks will be strategically located at bus stops, motor parks, road junctions and check points manned by FRSC officials for the dissemination of information through sharing of leaflets on prevention guidelines as given by the National Centre for Disease www.businessday.ng

Control (NCDC). The messages will advise road users especially public transporters and commuters to always use face masks, wash hands before and after each trip, maintain social distancing inside buses and at bus stops, among others. Matthew Azoji, the MD/ CEO of Neimeth said the campaign is one of several Corporate Social Responsibility (CSR) undertaken by Neimeth in the fight against the Corona-

virus in Nigeria. Represented by Roseline Oputa, Executive Director, Sales &Marketing, Azoji said Neimeth’s partnership with FRSC on COVID-19 enlightenment is only one of such worthy campaigns which Neimeth has been part of. According to him, Neimeth is committed to providing healthcare solutions. Azoji stated that at the outbreak of the disease in Nigeria the company partnered with the

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Tuesday 07 July 2020

BUSINESS DAY

Markets + Finance

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Valuators face hard times as COVID-19 muddles business BALA AUGIE

Also, economic uncertainty exposes businesses to financial risk as they are unable to generate sizeable earnings to pay interest on loans. The implication is that the Weighted Average Cost of Capital (WAAC) - discount rate used to evaluate an investment project- rises to a point where firms go bankrupt.. A total of 3,427 companies have filed for Chapter 11 bankruptcy in the United States (US) this year, the highest since 2013 as companies are unable to meet debt convent. The worsening COVI-19 is having a dramatic impact on equity valuation worldwide, as a number of planned initial public offering (IPO) have been cancelled on deferred for indeterminable period of time. Airbnb, the short term rental site based in California, which has had its business hammered by the coronavirus fallout, has lowered its internal valuation to $26 billion — a 16 per cent drop compared to its most recent funding round. Also, planned acquisitions and mergers have been on hold, but such schemes may resume as countries are gradually easing lockdown

so as to kick start commercial activities. Global merger and acquisition deal volume nearly halved year-on-year in the

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As global economic macroeconomic headwinds have cast a pall over the future earnings of companies and the aviation industry being the hardest hit, careful consideration should be given into how to adjust the risk free rate and capital asset pricing model (CAPM) in line with current reality of the equity market

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ootball matches played in empty stadium. Disruption to supply chain. No pepper souping and big stouting in bars. Hotels shuttered. Flights cancelled and airport closed. Seminars and conferences delayed. Factories working below capacity. Stay at home. Social distancing. Restrictions on interstate movement. COVID-19 vaccine. The headlines sounds like one of Bob Marley’s hit songs “ Natural Mystic in the Air” What does this mean for business valuation? COVID-19 complicates business valuation for an indeterminable period of time. Many companies are reeling from sharp reduction is sales, uncollected receivables, rising cost of production, and deteriorating margins. When receding revenue undermines Company profit or net income slumps, cash flow will shrink. This reduction in cash flow will negatively affect the value of a business, albeit temporarily. Business valuation determines the economic value of a business or business unit. Business valuation can be used to determine the fair value of a business for a variety of reasons, including sale value, establishing partner ownership, taxation, and even divorce proceedings. COVID-19 shocks disrupt cash flow projections of a firm and that makes it very difficult for professional to find the intrinsic value of the entity. Cash flow is defined as the earnings stream the business expects to generate in perpetuity. Or simply put, it is the difference between revenue generated and cost incurred in a financial period. Decrease in the future cash flow expectation for listed companies as a result of disruption to the demand and supply side of the curve have forced sophisticated investors to make downward adjustment to their forecasts.

first six months of 2020 to $1.1 trillion, according to Dealogic data.That is the lowest haul in at least 15 years. The insidious virus has forced many companies, especially oil majors, to cut dividend and scale back on expansion plans. Also, The World Bank has warned banks to put a cap on dividend so as to conserve capital and avoid a repeat of the financial crisis of 2008/2009. Royal Dutch Shell cut its dividend for the first time since the Second World War as the coronavirus pandemic halved quarterly earnings and forced the oil major to confront a new longerterm reality for the energy industry. As global economic macroeconomic headwinds have cast a pall over the future earnings of companies and the aviation industry being the hardest hit, careful consideration should be given into how to adjust the risk free rate and capital asset pricing model (CAPM) in line with current reality of the equity market. There could also be adjustment to expectation of future cash flow. Before the outbreak of the coronavirus pandemic, the Nigerian equity had

been in lull as investors were dumping shares due to lack of transformation policy on the part of the Buhari led administration and poor corporate performance. The COVID-19 just compounded the woes of a country that excited recession in 2017 after the crash in crude oil price of mid-2014 that stoked a severe dollar scarcity shattered the economy. The Nigerian Stock Exchange (NSE) All Share Index (ASI) has a negative year to date -9.43 percent. The index has a price to earnings ratio of 8.08 times, one the lowest in sub-Saharan Africa. To help shed more light on the issue of the impact of coronavirus pandemic on the corporate finance and valuation, leading Private Equity Firm in Nigeria, Coronation Capital, is set to host the 2nd edition of its Corporate Finance and Business Valuation online training (“Valuation Master Class”). Scheduled for the 2oth, 21st, 27th and 28th of July, 2020. The four-day event is designed to provide participants with a deeper understanding of corporate finance, valuation methodology and financial statement analysis with a key focus on appraising the business

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impact of financial decisions on the organizational performance. The Master Class will be headlined by the globally renowned Professor Aswath Damodaran: a Professor of Finance at New York University’s (“NYU”) Stern School of Business. Over the years, he has been referred to as Wall Street’s “Dean of Valuation” and is widely respected as one of the foremost experts on corporate valuation. Damodaran has published several books and articles on equity valuation and corporate finance and has been featured in the Journal of Finance, the Journal of Financial Economics, and the Review of Financial Studies. Professor Damodaran has been voted ‘Professor of the Year’ by Stern’s graduating MBA class five times and has been awarded NYU’s Excellence in Teaching and Distinguished Teaching award; Coronation is delighted to bring him to Nigeria for a second time. Commenting on the event, John Opubor, Managing Partner of Coronation Capital said, “The world has entered uncharted territory. History teaches that a return to fundamentals espoused by Professor Aswath Damodaran is crucial to thriving in times like this”. He further stated that, “Participants will, over four-days, benefit from a deep dive into corporate finance and valuation and how investments are impacted during these unprecedented times”. Coronation Capital is a private equity fund manager with a culture built on promoting innovation, good corporate citizenship and delivering strong returns to our investors. Coronation Capital aims to build well-positioned, well-run, cash-generative, and sustainable businesses that become significant employers and sources of growth in West Africa and across the continent. A core pillar of good corporate citizenship for Coronation Capital is utilizing education and development to positively transform our immediate environment.

Tuesday 07 July 2020

BUSINESS DAY

Investments

ENERGY INTELLIGENCE

Market Insight Companies Commodity Tracker Policy

OIL

GAS

PETROCHEMICALS

POWER

FBN Quest raises three major points in sourcing finance for marginal field bid round DIPO OLADEHINDE

head of the next marginal field bid round, preferred bidders must consider robust financing structures, independent due diligence and risk mitigation in raising funds while innovative financing will be critical in period of lower oil price and COVID-19 pandemic, Ifeoma Finnih, Head Oil, Gas & Infrastructure, Debt Solutions, FBNQuest has said. Apart from these three factors, preferred bidders must also understand the need to structure optimal and bankable financings for the development of marginal field assets postacquisition. When it comes to investing in marginal field, Finnih explained that robust financing structures involve the source of financing, framework and the various contracts that underpin how the financing will be availed. “Reserve based lending structures, contractor financing and forward sale/ prepayment structures are some forms that are likely to be utilized by prospective financiers while the most project financing type transactions is the offtake agreement,” Finnih said. An off-take agreement establishes the contractual framework for the purchase and sale of oil and or gas

between the seller and the off-taker. The terms of the agreements are typically negotiated before field development and will become effective upon completion of the project and production from the field commences. Concerning independent due diligence, Finnih said it’s certainly to be undertaken by prospective financiers, however, the level of due diligence will largely be dependent on the type of financing that the bidder is seeking to raise, with project finance structures requiring extensive levels of due diligence. “Due diligence is key for project finance transactions and even more so in an upstream oil and gas deal where cash flows and repayments are based on oil and or gas reserves,” Finnih said.

On risk mitigation, Finnih advises bidders to think through all possible risks of the proposed transaction and work towards ensuring that risks such as geological, operational, environmental, price, regulatory risks and others are suitably mitigated. Finnih noted that other critical requirements set out in the existing guidelines such as, evidence of technical capabilities of the management and operational teams, proposed field development plans, evacuation infrastructure and others are essential aspects of the deal which needs to be taken into consideration and will be critically reviewed by prospective lenders. If it successfully gets investors to stake the maximum on the oil fields, the

federal government is hoping the 57 fields may earn Nigeria additional $5.7billion, an income higher than the loans the Federal Government sought from the Bretton Woods institutions within the last few months to address the effects of the coronavirus pandemic. To avert situations where investors are edged out of deals after securing the oilfields, the Department of Petroleum Resources (DPR) said it has already activated sustainability plans for the marginal field programme. “Finance will be a critical aspect of this process and to ensure that industry players can successfully attract the funding required, the above items should be carefully considered as the bid round progresses,” Finnih concluded.

FG raises Nigerian Content Intervention Fund to $350M ISAAC ANYAOGU

he Governing Council of the Nigerian Content Development and Monitoring Board (NCDMB) has approved the expansion of the Nigerian Content Intervention Fund from US$200 million to US$350 million. The enlargement of the Fund by US$150 million was part of the decisions taken at the recent NCDMB Governing Council meeting, which held virtually on June 16, 2020 according to a release signed by Julius Bokoru, special assistant on media and public affairs to Timipre Sylva, minister of state for Petroleum Resources. The meeting was chaired by the Minister of State for Petroleum Resources, Timipre Sylva, who is the Chairman of the Council. The Council approved that US$100 million from the additional funds would be deployed to boost the five existing loan products of the NCI Fund, which include manufacturing, asset acquisition, contract finance, loan refinancing and community contractor financing. Similarly, the Council also approved that US$20 million and US$30 million respectively should be deployed to two newly developed loan product types - the Intervention Fund for Women in Oil & Gas and PETAN Products, which include Working Capital loans and Capacity Building loans for PETAN member companies. The NCI Fund was instituted in 2017 as a US$200 million Fund managed by the Bank of Industry (BoI) engaged to facilitate on-lending to qualified

stakeholders in the Nigerian Oil and Gas industry on five loan product types. The NCI Fund is a portion of the Nigerian Content Development Fund (NCDF), aggregated from the one percent deduction from the value of contracts executed in the upstream sector of the oil and gas industry. About 94 percent of the NCI Funds has been disbursed to 27 beneficiaries as at May 2020. NCDMB has received new applications from 100 companies for nearly triple the size of the original fund. Guidelines for the NCI Fund provide that beneficiaries of the Manufacturing Loan and Asset acquisition Loan can access a maximum of US$10million respectively. Also, beneficiaries of Contract finance Loan can access US$5million while beneficiaries of the Loan Refinancing package can access US$10million, with beneficiaries of the Community Contractor Finance Scheme limited to N20million. The maximum tenure for all loan types is 5 years and applicants cannot have two different loans running simultaneously. At the onset of the Fund, the applicable interest rate for the various loan types was pegged at eight (8) percent, except the Community Contractor Finance Scheme, which was five (5) percent. However in April 2020 as part of NCDMB’s response to mitigate economic impact of the coronavirus pandemic, Council approved reduction of the interest rate from eight (8) to six (6) percent per annum for all four of the loan products. The Board also extended the moratorium for all loan products.

India’s real-time electricity market shows Nigeria way to go STEPHEN ONYEKWELU

ast month, India’s real-time market went live at the Indian Energy Exchange (IEX) and Power Exchange India Limited (PXIL) but Nigeria still struggles to implement service reflective tariffs and develop a credible market. A real-time electricity market ensures timely dispatch of scheduled power from generation to distribution company, upholds the sanctity of contracts for scheduled amounts of power, and allows generators (if changes need be made) to sell surplus power that is not purchased to another entity somewhere else in the country. The launch was announced by Raj Kumar

Singh, minister of state (Independent Charge) Power and New & Renewable Energy through a video conference in New Delhi on June 3. The real-time market is an organised market platform to enable buyers and sellers of electricity across the 1.40 billion people strong country to meet their energy requirements closer to real-time operation. Electricity bought is delivered within an hour of purchase. This has placed the Indian electricity market among a league of few electricity markets in the world, which have a realtime market. The introduction of a real-time market will bring the required flexibility in the market to provide realwww.businessday.ng

time balance while ensuring optimal utilisation of the available surplus capacity in the system. The real-time market will make the power market dynamic as auctions will be conducted every 30 minutes. There will be 48 auction sessions during the day. The proposed real-time market would provide an alternate mechanism for distribution companies to access a larger market at a competitive price. The electricity market in India has not always been competitive and efficient. In 2003 the world’s second most populated country initiated power sector reforms. As of 2014, India’s power supply remained inadequate and unreliable. More than 300

million Indians lived without electricity; some 200 million of them in villages were considered ‘electrified’ according to World Bank’s report. The report finds that while the country had made huge strides in the generation and transmission of electricity, as of 2014, the distribution segment—where revenues originate—has seen mounting debts and continuing losses, affecting the entire value chain. As of 2019, 87 percent of India’s electricity was transacted through longterm (25-year) fixed contracts of power procurement between electricity distribution and generation companies. To meet the majority of their daily power needs, discoms

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“self-schedule” generation from the portfolio of generators with whom they hold these long-term contracts. The remaining power is traded through bilateral transactions between utilities, through power exchanges and traders. The decentralised selfscheduled manner of power procurement between discoms and generators offers little visibility and therefore flexibility for discoms to choose from cheaper generators from outside their portfolio. However, the real-time market narrows the window for the ability of a discom to change what they would likely procure from a generator or what a generator can supply, this proposal not only “pro@Businessdayng

vides buyers and sellers an opportunity to correct any mismatch of demand and supply closer to delivery” said Kartikeya Singh, senior associate (nonresident), Energy Security and Climate Change Programme and Wadhwani Chair in U.S.-India Policy Studies. “But it also encourages them to improve their scheduling and forecasting abilities.” According to Azu Obiaya, chief executive officer, Association of Nigerian Electricity Distributors (ANED) Nigeria copied its power sector reforms from India. Admittedly, India’s power sector reform has its challenges but Nigeria can learn from some of the creative ways the South Asian country is resolving its electricity market distortions.

Tuesday 07 July 2020

BUSINESS DAY

news Network failures, cashless policy push... Continued from page 2

for one middle–aged woman was a soldier who had cash and was looking for someone to make a transfer to his relative and collect the cash in return. The woman wanted to withdraw some money to buy food items in the market, but only two out of six bank ATMs were dispensing cash and the number of people in the queue was too much. She quickly transferred N40,000 to the soldier and collected the cash in return. Uche Uwaleke, a professor of finance and capital markets and chair, Banking and Finance Department, Nasarawa State University, said COVID–19 had rolled back a substantial part of the progress made in the implementation of the cashless policy. “In a period of uncertainty such as the one we are in, cash is the king as the safest and most convenient medium of exchange. So, with lockdowns in many cities and movement restrictions, a lot of people now demand cash to meet petty purchases, especially food items, where most street vendors do not have POS machines. Even shops, supermarkets and petrol stations where POS is available also prefer to collect cash due to long queues associated with processing delays and sometimes POS malfunction,” Uwaleke said. “You must have noticed

that weekends, in particular, record a lot of on-line transaction failures. So, the huge demand for cash during weekends, oftentimes beyond the maximum limit a bank has provisioned to be loaded into an ATM machine in a particular day, could be responsible,” he said. Uwaleke said the inability of a bank branch to provide cash in its ATM sufficient to meet an unexpected spike in the use of ATM could be a reflection of a temporary liquidity challenge on the part of the branch. Other reasons could be faulty or malfunctioning ATMs, which are not regularly serviced or maintained by a bank’s branch. “The CBN should require banks to upgrade their IT infrastructure to strengthen on-line transactions and more POS machines should be made available to retail street-corner shops and food vendors,” he said. However, Ayodele Akinwunmi, relationship manager, corporate banking, FSDH Merchant Bank Limited, did not think it was a general development across the country. “I am aware that the usage of alternative banking channels, including the use of ATM, other than going to the banking hall, has increased in the last few months. This is a good development for the banks, customers, and the regulators,” Akinwunmi said.

Recognise changing dynamics for SMP... Continued from page 2

based on digital computing technologies, data and conducting business through markets based on the internet and the World Wide Web. Olusola Teniola, president, Association of Telecommunications Companies of Nigeria (ATCON), says in a telephone interview with BusinessDay that the industry is extremely hopeful that this new plan is achievable because of the existence of the National Broadband Plan (NBP) 2020-2025, which has members of the regulatory body on its committee and therefore creates an alignment in working to solve the major issue of broadband penetration and infrastructure deficit that creates inadequate internet access. “One of the things that we as an industry are very happy about is that the new SMP came out at the same time as the Nigerian Broadband Plan (NBP) 2020-2025, which speaks to the fact that there are areas that need to be focused on, and that’s lack of access and connectivity based on the fact that we have infrastructure deficit,” he says. “All the issues in the previous SMP still persist, but the biggest difference is that there is the NBP with members of

the NCC on board to back this up and drive the plan. This makes a big difference because the alignment of that broadband plan is now in sync with the SMP,” he notes. On the launch, Isa Ali Ibrahim Pantami, Nigeria’s minister of communication and digital economy, said, “The launch of this SMP 2020 2024 will create an innovative idea on how to be more successful in achieving a digital economy.” Although industry experts agree that the digitisation of the economy and development of smart cities create benefits and efficiencies, as digital technologies drive entrepreneurship, innovation and fuel job opportunities and economic growth, most people wonder how helpful the plan will be in achieving a digital economy without investments, incentives and the right government policies, even with strict implementation. The Nigeria digital economy diagnostic report by the World Bank, released in 2019, shows that many Nigerians and businesses remain excluded from the digital ecosystem as a result of limited access to broadband and non-availability of adequate devices (mobile and computers) to fully utilise the internet. www.businessday.ng

L-R: Mary Uduk, outgoing acting director-general, Securities and Exchange Commission (SEC); Lamido Yuguda, DG, SEC; Reginald Karawusa, incoming executive commissioner, legal and enforcement, SEC, and Days Obisan, incoming executive commissioner, operations, SEC, during the resumption of the new management of SEC in Abuja. Pic by Tunde Adeniyi

In letter to NERC, DisCos exonerate selves from... Continued from page 1

remittance and the intro-

duction of an untested tariff model further weakened electricity market, but was silent on their own role. According to the DisCos, implementing a cap on estimated billing when about 60 percent of customers have no meters would negatively impact on the market. “DisCos collect over 75 percent of bills issued to metered customers and 25 percent from unmetered customers. This is an indication that DisCos suffer more losses from estimated billing. Therefore, metering is the only means of revenue assurance,” they said in the letter. But DisCos were largely responsible for scuttling previous attempts to meter the sector, former NERC chairman, Anthony Akah, in a 2016 press release, said. DisCos had performed below expectation since they deployed about 500,000 meters between November 2013 and June 2016, which led to the cancellation of the programme by former minister of power, works and housing, Babatunde Fashola. Meter rollout was part of the Performance Agreement DisCos were supposed to honour, including investing to improve their network. But the DisCos did little to meter their customers until the naira was devalued in 2016,

providing the excuse that the devaluation increased the cost of metering. In the letter, they also said ordering a tariff increase when their books were filled with debts caused by tariffs that did not ensure viable returns, would further impair the market and affect the implementation of the service reflective tariff initially planned to take effect July 1. The huge debts in the electricity market, over N1 trillion, are not only due to a lack of cost-reflective tariff. There are market shortfalls caused too by DisCos inefficiency at collecting and making full remittance to the market according to agreed remittance threshold. The DisCos also kicked against capping estimated billing. “The impact of the continued implementation of the Capping Order may constitute a bottleneck to the inflow of about N41 billion monthly of legitimate industry revenue, thereby compounding market liquidity challenges,” the DisCos said. However, capping of estimated billing by NERC was in response to rampant abuse by DisCos after excessive billing emerged the most controversial complaints by customers. NERC’s order capping estimated bills was with the objective of compelling DisCos to meter their customers.

Violent crime, kidnap top list of risks in... Continued from page 2

with local security providers to provide training and protection for staff during travel. In these regions, violent crimes accounted for 38 percent the risks; kidnap 16 percent; disaster 10 percent; road transport accidents 10 percent; civil unrest 10 percent; armed robbery 4 percent,andmilitancy4percent. In the South West, the most prevalent medium- to high-risk incidents for June were violent crime. Several reported cases of ritual murder

headlined security risk factors. States also experienced incidents of robbery, disaster, civil unrest, and RTAs as well. States most affected during this period include Lagos, Ogun, Ekiti, Osun, Ondo and Oyo. Violent crimes accounted for 40 percent of the security risks, followed by ritual killings at 20 percent. Armed robbery came in at 15 percent; disaster 11 percent; civil unrest 6 percent, and kidnap 2 percent. “We recommend that businesses and households review

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According to data from the Commission, 52 percent of over 10 million electricity customers do not have meters. At first, it set up the 2007 Meter Reading, Cash Collections and Credit Management regulation, to enable DisCos bill customers when they are unable to gain access to the premises. But this has become so abused that it is now the single most painful source of frustration for customers, accounting for 65 percent of all complaints lodged at DisCos offices across Nigeria, according to NERC’s data. Meanwhile, the DisCos further noted that their financial books remain encumbered with N1.7 trillion of tariff shortfalls (subsidies to customers), as well as the liabilities associated with the Nigerian Electricity Market Stabilisation Facility (NEMSF), advanced in 2015 to liquidate legacy gas debts and tariff shortfalls resulting from adjusting Aggregate Technical, Commercial and Collection (ATC&C) baseline losses. “If left unaddressed, these financial encumbrances will continue to inhibit the DisCos’ ability to access the financing that is critical to supporting the remittance and the contract-based,” they said. “We prayed the Commission for the implementation and completion of the balance sheet clean-up exercise prior to the increase of tariffs,

to enable positive signalling that attracts new investors and lenders to the DisCos,” the DisCos wrote. However, debts only are not the only factor discouraging investments, as the DisCos also reported administrative cost of over 40 percent in their books. Analysts say this cost pattern does not point to a viable business that can attract investments. Another significant concern for the DisCos is the Minimum Remittance Order, which they said used unrealistic parameters. This includes lack of market rates for foreign exchange, selection of 2017 and 2018 as years of Mutual Non-Compliance as against 2015 and 2016, as requested by DisCos. “The projected energy and capacity delivered being used by NERC for the calculation is always ambitious and allocates upstream transmission, generation and gas risks to the DisCos, in view of the service-based structure of the new tariff “The losses used in the computation following the removal of the MDA debt loss component is (are) contrary to the ATC&C loss regime envisaged by the Performance Agreement (PA). The basis of the investors bid and ultimately the Loss levels considered in the PA are inclusive of all Technical, Commercial and Collection Losses,” they noted.

their threat mitigation posture to improve asset integrity and personal safety. Situational awareness and management of night-time travel are strongly advised. We recommend that the security operating level should be elevated for the near future,” the report states. The North East experienced high to extreme risks. Filtered reports indicate that the battle between the Nigerian Army and JAS, ISWAP in the region continues to trend upwards. The region recorded a high report of violent crime, insurgency, and abductions. A growing number of vio-

lent crimes by opportunistic armed groups were reported in Gombe and Adamawa states, while JAS and Boko Haram remain locked in their Borno State operations and keen to expand beyond the North East. Violent crime accounted for 38 percent of the risks in the North East; kidnap 24 percent; insurgency 24 percent; robbery 9 percent, and disaster 5 percent. “The threat conditions in this region are severe. We strongly advise against any non-essential travel to or within the region,” the PR24 June 2020 Country Risk Report states.

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Tuesday 07 July 2020

BUSINESS DAY

news

FMBN revamps CHDL to deliver housing to informal sector CHUKA UROKO

t is a piece of good news for informal sector operators in Nigeria as the Federal Mortgage Bank of Nigeria (FMBN) has revamped its Cooperative Housing Development Loan (CHDL) product as a channel for delivering houses to this class of Nigerians. The revamping of this product, according to officials of the apex mortgage bank, is in line with the decision of the federal ministry of works and housing to adopt co-operative societies as the channel for housing delivery to Nigerians, especially those in the informal sector who are encouraged by the ministry to form themselves into co-operatives. This product which was packaged and launched a few years ago as ‘Informal Sector Co-operative Housing Scheme’ was aimed at bringing the informal sector of the economy into the mortgage net to enable them own homes through mortgage loans. The key features of the product include tenors of up to 24 months with a moratorium of 12 months and interest rate of 10 percent. Up to N500

million is accessible by qualified cooperative societies. “CHDL enables a cooperative society that has acquired a plot of land to develop houses for allocation to its members. The parcel of land should have title in the name of the society which would act as the facilitator on behalf of its members and in the loan transaction. This will also facilitate construction of the housing units,” explained Bola Ogunshola, who was a director, Loans Production/Securities Issuance and Market Development at the time when the product was launched. He added that “to qualify for this loan, the cooperative society must have been in existence for a minimum of 12 months; the proposed estate must have good title that can be sub-leased to individual allottees/purchasers of the housing units therein, and the tenor for the loan shall be 24 months with a moratorium period of 12 months at an interest rate of 10 percent.” The Minister of Housing at the time, Ama Pepple, disclosed that the product was designed specifically with the informal sector operators in mind to enable them have access to cheap, reliable and affordable funds.

Business-friendly environment will help Nigeria attract investments - Citi Odinaka Anudu & ENDURANCE OKAFOR

igeria must improve its business environment and remove barriers to trade to attract local and foreign direct investments, according to Citi, a multinational investment bank. According to the New Yorkbased lender, the opportunity in Africa’s largest economy lies on how successfully the country can open its economy to both internal and external investors. “If we can accelerate the effort that is already being channeled to removing the constraints in the country, investors would identify the opportunities and put their money to work,” Akin Dawodu, Sub Saharan

Africa (SSA) head, Citi, told BusinessDay in a telephone meeting on Friday. He said irrespective of the price of oil in the global market, the country should focus on attracting international capital and grow the economy to raise the purchasing power of the populace. Fixed-income investors seeking to put funds in Nigeria’s Federal Government short-term debt instruments recorded N558.61 billion unsuccessful bids in June 2020, an indication of the high liquidity in the country’s financial system seeking attractive investment destinations. According to data by the World Bank, Nigeria’s estimated 41.5 million Micro, Small and Medium Enterprises (MSMEs) were in 2018 in need of growth

capital of about $158.13 billion. The Washington-based financial institution also highlighted the huge role MSMEs play in facilitating economic development due to their flexibility and affinity to innovation. “Even more so in emerging economies with a high contribution from the informal sector,” Dawodu said. On why there is a mismatch between the idle liquidity in Nigeria and the growth funding needed by MSMEs, Dawodu said the fact that there is idle liquidity lying somewhere because it could not be deployed to government instruments like T-bills and FGN bonds doesn’t mean it can be easily recycled into the real sector of the economy. “The reasons people are looking for the government instruments and not businesses is

because they don’t think the risks in those sectors have been sufficiently mitigated for them to put their money,” he said. He explained that there can be an overhang in the demand for T-bills and bond but “as long as the risk and constraints in the operating environment remain, the cycle could go on for a long time and capital still wouldn’t be recycled to the real sector.” While acknowledging that Nigeria and the sub-Saharan African region have made progress in ease of doing business, Dawodu said Africa’s most populous nation needs to do more to expand its market for its industries to thrive. According to him, purchasing power also has to be up and the enabling environment is needed to achieve such a goal.

Shippers Council targets 100% contactless port operations by March 2021 AMAKA ANAGOR-EWUZIE

he Nigerian Shippers’ Council (NSC) says it is perfecting arrangements to ensure that cargo clearing processes and all other port transactions are carried out online by March, 2021. Hassan Bello, executive secretary of the NSC, who made this known in Lagos on Monday, when he played host to the management of Clarion Bonded Terminals, said Nigerian port is presently operating at 65 percent digital but there are certain transactions such as bill of lading and other invoicing that are not generated online. Bello, who noted that most of the terminals and shipping companies are already doing 85 percent of their transactions online, said there is need for every operator to come onboard because the outbreak of Covid-19 has shown that it is dangerous for people to gather at the terminals. “We are meeting with shipping companies, terminal operators and the banks to harmonise and integrate the cargo clearing processes at ports. We need to make our port efficient. That is why we believe that an importer can stay in the comfort of his or her office and exit his cargo without having to be physically pres-

ent at the port,” said Bello. According to him, scanning of containers is also more efficient and less dangerous than 100 percent physical examination of cargo, and with the outbreak of coronavirus, digital port would lessen the exposure of the port to spread the virus. “Digitalisation also reduces corruption, if you don’t physically interact with officials and do your transactions electronically, it would reduce corruption in the system. It would be much cheaper, more efficient and Nigerian ports would become more competitive, if shippers do more of online transactions,” he said. On port congestion, Bello, who observed that Covid-19 has disrupted the logistics chain, said that the lack of space at the port is dangerous because it signals congestion both at the seaside and at the terminal. “There are lots of cargoes that are abandoned at ports and they ought to be auctioned. We would suggest to Nigeria Customs to do onthe-spot auctioning without taking those goods out of the port. Most of them are expired goods and we have to help the terminal operators to clear the ports so that ships could come in rather than 50 days waiting time that shows inefficiency, and is uneconomical,” he said. www.businessday.ng

L-R: Georgios Polymenakos, managing director, Champion Breweries plc; Helen A. Umanah, non-executive director, and Elijah Akpan, chairman, during the company’s 44th annual general meeting, in Uyo, Akwa Ibom State.

Yuguda resumes as new DG of SEC Industrial crisis brews in A’ Ibom over ...says capital market driver of growth Iheanyi Nwachukwu

he new Director General of the Securities and Exchange Commission (SEC), Lamido Yuguda has resumed work, stating that the capital market has a lot of potentials for growth and development of Nigeria post Covid-19 and beyond. Yuguda resumed on Monday alongside the executive commissioners namely: Reginald Karawusa, Ibrahim Boyi and Dayo Obisan. The SEC DG said the capital market is a crucial component of any economy, as the SEC over the last two decades has worked with other relevant stakeholders to introduce and implement various initiatives targeted at improving the regulation and development of the market. According to him, the capital market master plan launched in 2014, has the objective of positioning the capital market for an accelerated development of the

national economy. “Many of the plan’s initiatives have been successfully implemented while many others are work in progress in line with its objectives. “Therefore, the continued implementation of the plan will be one of the major areas of focus for the incoming management, while we also seek possible ways of strengthening it for enhanced impact. We would equally work towards improved market regulation, surveillance and general development.” He stated that in order to do this effectively, the new management will need to develop relevant capacities and foster collaboration in achieving our mandates. Yuguda assured that the new management will work to the best of their abilities to uphold things on ground and consciously seek ways to improve them to the benefit of all stakeholders.

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downward review of minimum wage ANIEFIOK UDONQUAK, Uyo

n industrial crisis is brewing in Akwa Ibom following the decision by the state government to “unilaterally review the minimum wage downwards from N33,000 to N30,000” despite having signed an agreement with union leaders. Last week, the state government in a memo directed the head of civil service and the accountant-general of the state to begin the review of the minimum wage, attributing it to the coronavirus pandemic, which it said has made it impossible to sustain the payment of N33,000 minimum wage. Political appointees in the state have already agreed on a 20 percent salary cut as explained by Governor Udom Emmanuel. “All of us political appointees offered 20 percent of our salaries to be used in buying drugs to take care of Covid-19 patients,” said Udom. According to him, government spends a lot of money to @Businessdayng

feed the people in isolation centres, pay health workers and buy drugs, “so we gave out 20 percent to keep the people alive,’’ But Sunny Jams, chairman of the state branch of the Nigerian Labour Congress (NLC), in an interview said they would resist attempt by the state government to temper with the salary of workers. According to James, both parties having agreed to the N33,000 minimum wage, must stand by it. He argued that it was wrong for the state government to, on its own, review the agreed sum without consulting with the labour. “TheminimumwageofAkwa Ibom automatically amounted to N33, 000 after applying the percentages. It was an agreement between labour and the state government. Everyone signed the agreement. But very unfortunately, this committee of few people sat down and unilaterally reviewed the minimum wage to N30, 000. And labour is saying that it is totally unacceptable,” he said.

Tuesday 07 July 2020

BUSINESS DAY

Ayala wins over Duterte with rapid response to Covid-19 Philippines conglomerate’s actions applauded by one of south-east Asia’s toughest and most feared politicians JOHN REED

n mid-March, when Philippine president Rodrigo Duterte declared a “state of calamity” after a spike in Covid-19 cases, economic and social stability in the developing archipelago nation was looking precarious. As the president imposed one of Asia’s strictest lockdowns on Metro Manila, police erected roadblocks, imposed harsh punishments for curfew violators, and prevented millions of day labourers from reaching work. Concerns over food security in the megacity rose late in the month after a demonstration of hungry people in one slum ended in violence. While the government scrambled to marshal its resources to fight the pandemic, managers at Ayala, the family-controlled conglomerate, were already at work on their own coronavirus response. In early March, Ayala’s chief executive, Jaime Augusto Zobel de Ayala, 61, and his younger brother Fernando, CEO of the group’s land division, began their brainstorming at a meeting of the group’s operating companies, which include property, construction, water, the country’s second-biggest telecoms company — Globe — and the Bank of the Philippine Islands. One of their first conclusions was that the government’s emergency response, including stimulus money needed to help businesses and individuals survive, would take time to wend its way through Congress. “And so we got together and as a community put some numbers on the table and said, ‘Let’s fill a gap, because this is going to be bad’,” the Ayala chief says via a Zoom call. Since March, the group has by its own reckoning stepped up with Covid-19 response measures worth 9bn pesos ($181m) in emergency food and medical aid and loan, bill and rent deferrals or forgiveness for its customers and suppliers. “This is a period where we all have to work hand in hand with others to preserve the ecosystem we are in,” Mr Ayala says. “All of us have to hold hands, suffer a little bit together for the sake of rising back together.” Ayala is one of many global companies that have come up with coronavirus corporate social responsibility packages, and announced them with greater or lesser amounts of fanfare, cred-

ibility and self-serving corporate spin. What is striking about Ayala’s response is that it won over one of south-east Asia’s toughest and most feared politicians. Before the pandemic came along, Ayala was in trouble with the administration because of a long-running, politically charged dispute over its water company in Manila. In December, Mr Duterte attacked its family owners and Manuel Pangilinan, CEO of another family conglomerate and water concessionaire First Pacific, calling them “son of a bitch” and threatening to “ruin your face” in a rant that hit the companies’ share prices and sent a chill through Philippine big business. Ayala’s response to the virus appears to have proved a game changer. In an uncharacteristically conciliatory and sincere moment in May, Mr Duterte apologised to both Ayala (he specified the company, but did not say which brother) and Mr Pangilinan for his “hurting words”, and thanked them for helping to fight coronavirus. Ayala’s CEO, while declining to comment on the water dispute, confirms that he and his brother wrote to Mr Duterte to thank him for his words. “It was a good moment to start closing that chapter,” he now says. “Of course it was warmly received and appreciated on our part.” He says that when the crisis www.businessday.ng

hit “we were there from day one, regardless of what had been said or what feelings — it’s the way we work”. How the Philippines’ oldest conglomerate went from deep political hot water to the receiving end of a rare Duterte apology is a story that speaks richly about the complex symbiosis between government and business in the country. Ayala, like other Philippine family companies, has a long history of responding to government requests for help, which are frequent given the country’s regular disasters, such as typhoons, earthquakes, and volcanic eruptions — like the one in January at Taal. Philippine governments, past and present, are limited in their financial resources, and reliant on big private groups to supply basic infrastructure and services in public-private partnerships. According to Mr Ayala, the company began devising its response to Covid-19 before receiving a request for help. At their meeting in early March, the group executives discussed ways to help Manila’s legions of day labourers, including the roughly 75,000 construction workers Ayala uses on projects. “How are they going to handle something like this when we have a massive lockdown?” Ayala’s CEO recalls thinking. Led by Fernando, the Ayala brothers began phoning up other

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businessmen to put together an emergency food distribution programme, using vouchers rather than handouts to preserve beneficiaries’ dignity, and distributing them through Roman Catholic churches to ensure they targeted the urban poor who needed it most. About 20 companies in all, including San Miguel, the brewing group, Jollibee, the fast-food chain, and Aboitiz, a diversified holding group, joined in the 1.5bn peso effort. The Ayalas’ focus then turned to their employees, and the large network of midsized and small companies that surround the group, from material suppliers to mall tenants. Ayala announced the biggest chunk of its relief operation: “business operations waivers”, which included shortterm rent forgiveness for tenants, and grace periods for its Globe customers’ phone bills and BPI customers’ loans. Ayala also encouraged its employees to pitch in to the relief effort by sacrificing part of their first quarter bonuses. “All of this happened before any government initiative or government engagement,” Mr Ayala says. “It was an instinct we had.” In mid-March the government’s Covid-19 task force did turn to Ayala for help converting an exhibition centre into a 502bed pandemic facility, which it completed in a week. “Our whole construction team were out of work and they were delighted to @Businessdayng

do it to get out of the home and do something.” Ayala also built for the Philippine Red Cross a coronavirus testing centre with capacity to conduct 3,000 tests a day, which has allowed authorities to ramp up screening for the virus and keep closer tabs on its spread. While family CEOs such as Mr Ayala speak in terms of social obligations, political analysts point to a symbiosis between the country’s overstretched — and at times feckless or corrupt — governments on the one hand, and efficient private groups that deliver infrastructure or services for profit in normal times, and emergency help when needed. Latest coronavirus news Follow FT’s live coverage and analysis of the global pandemic and the rapidly evolving economic crisis here. Aries Arugay, an associate professor of political science at the University of the Philippines, thinks the country’s family billionaires have been “altruistic” by stepping up with aid during the pandemic. However, he also thinks they are “hedging their bets” if the political camp Mr Duterte represents extends its hold on power after he leaves office in 2022 and the family groups need to “fight for favours against Duterte-backed oligarchs”. For now Ayala’s focus — and the government’s — is squarely on the pandemic, which shows no signs of abating after more than 38,000 cases to date and nearly 1,300 deaths. The Philippine government and central bank have indeed found their footing — with help from big business which is now focusing on getting back to work. Three questions for Jaime Augusto Zobel de Ayala If you were not a CEO, what would you be? An interviewer / journalist like David Rubenstein. I like his style; I like the people he picks. He’s so good at bringing out details. I’d love to do that. Who is your leadership hero? Angela Merkel. She came to my attention when she opened the door to refugees. I like her humanitarian instincts, sciencebased approach, and strong discipline with the German economy. What was the first leadership lesson you learnt? My involvement in telecoms for Ayala was the toughest. I learnt about the power of partnerships, building a management team and executing on plan, and resilience — we needed to get the plan through Congress.

Tuesday 07 July 2020

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Monday 06 July, 2020

Top Gainers/Losers as at Monday 07 July, 2020 LOSERS

GAINERS Company

Company

Opening

Closing

Change

FLOURMILL

N17.6

N18.5

0.9

NESTLE

ZENITHBANK

N15.25

N16.05

0.8

BETAGLAS

N2.2

0.2

BUACEMENT

N20.8

N21

0.2

JBERGER

N3.9

0.1

WAPCO

NAHCO GUARANTY PZ

ASI (Points)

Opening

Closing

Change

N1256.8

N1175

-81.8

N68.35

N61.55

-6.8

N42

N39.9

-2.1

VOLUME (Numbers)

N18.35

N16.55

-1.8

VALUE (N billion)

N10.35

N10

-0.35

24,026.05

DEALS (Numbers)

4,216.00 189,691,053.00

MARKET CAP (N Trn)

2.784

...Year-to-date negative return rises to -10.18% ...equities start week with N118bn loss

he Nigerian stock market opened this new week on a negative note, extending its record downward trend despite the attractiveness of a number of fundamentally sound stocks. BusinessDay had ahead of market open advised stock investors to be cautious and bet on only value counters as factors triggering the bearish trend remain. The Nigerian Stock Exchange (NSE) All Share Index (ASI) closed lower at 24,109.65 points while the value of listed stocks decreased to N12.577 trillion as against preceding trading day high of 24,336.12 points and N12.695 trillion respectively. Investors booked about N118billion loss at the close of trading session on Monday.

In 4,216, investors exchanged 189,691,053 units valued at N2.784billion. The NSE ASI was down by 0.93 percent on Monday July 6 in the absence of positive catalysts capable of spurring buy decisions. This year’s negative return is now at -10.18 percent. Nestle Nigeria Plc led the losers league af-

Nikkei 225 22,714.44JPY +407.96+1.83%

S&P 500 Index 3,171.97USD +41.96+1.34%

Deutsche Boerse AG German Stock Index DAX 12,733.45EUR +205.27+1.64%

Generic 1st ‘DM’ Future 26,032.00USD +273.00+1.06%

Shanghai Stock Exchange Composite Index 3,332.88CNY +180.07+5.71%

ria Plc decreased from N18.35 to N16.55, down by N1.8 or 9.81percent. “This week, we expect general sentiments in the market to remain tepid, as investors await the publication of the secondquarter (Q2) 2020 earnings”, said equity research analysts at Lagos-based United Capital Plc.

Nova Merchant Bank makes market debut with N10bn bond

ova Merchant Bank has said that its ongoing N10 billion bond issuance is aimed at putting the business on firm footing to achieve its short-term and long-term goals. The technology-driven financial institution is seeking to raise up to N10 billion 7-year Fixed Rate Subordinated Unsecured Bonds under its N50 billion debt issuance programme. The bond has a price range of from 12 per cent to 12.50 per cent and the offer, which opened on June 30, will close on July 8, 2020 The Managing Director/ CEO, Nova Merchant Bank, Anya Duroha, who disclosed this, explained that the bank is raising the N10billion in Subordinated Unsecured Bonds under its N50 billion debt issuance programme. Duroha who pledged the bank’s commitment to creating superior value in the market and keeping customers at the centre of its business, noted that the Bond will be invested in long-term risk assets as part of its medium-

term growth strategy and advised interested investors to obtain more details of the bond from the Bank’s website www.novambl.com. Nova Merchant Bank Limited is a licensed merchant bank in Nigeria rated BBB by Agusto & Co. and A+ by Datapro and the bond which is issued under a SEC-approved N50billion Debt Issuance Programme is callable in five years by the bank. Speaking to shareholders at a meeting recently, the bank’s Chairman, Phillips Oduoza, noted that the bank reported a significant improvement in all the key financial indices compared to the previous year’s achievement, and attributed the growth to the successful execution of the 2019 strategic plan in line with the key pillars to position the bank as a market leader by 2025. He said that the Bank will continue to focus on digital banking, provision of longterm funding, wholesale and investment banking while maintaining a lean operating philosophy.

Champion Breweries links N96million full year profit to costs reduction Iheanyi Nwachukwu

Stanbic IBTC unveils upgraded mobile app

tanbic IBTC Holdings Plc, a member of Standard Bank Group, has upgraded its mobile app by introducing exciting features to enable seamless transactions for its customers. The one-stop mobile app tagged Super App, consists of the entire range of the Stanbic IBTC Group products such as My Bank, Mutual Funds, Pension, @ Ease, Insurance and Stockbroking. The Stanbic IBTC Super App offers quick login capability with facial and fingerprint biometric options, strong customer data protection and voice banking features. It also contains features such as instant soft loans for customers through the instant cash advance/

ter its share price moved N1256.8 to N1175, shedding N81.8 or 6.51 percent. It was followed by Beta Glass Plc which decreased from N68.35 to N61.55, losing N6.8 or 9.95 percent. Also, BUA Cement Plc dipped from N42 to N39.9, losing N2.1 or 5percent and Julius Berger Nige-

FTSE 100 Index 6,285.94GBP +128.64+2.09%

12.533

Bears hold sway on Nigerian Stock Exchange Iheanyi Nwachukwu

Global market indicators

EZ cash, bills payment, and funds transfer. Other offers from the Super App include Automated Teller machine (ATM) cardless withdrawals, loading of prepaid cards and payment of multiple beneficiaries, amongst others. It also provides more self-service options such as unfreezing of account and password reset option. Demola Sogunle, Chief Executive, Stanbic IBTC Holdings Plc, said the upgraded mobile app is a restatement of the organisation’s commitment to providing seamless and unique banking experiences to its customers. “The upgrade of our mobile application is in furtherance of our digitisation agenda. www.businessday.ng

NSE ‘masks for all Nigerians’ campaign receives boost from private sector

he rapid rise in confirmed cases of Coronavirus (COVID-19) in Nigeria demands more collective, decisive, coordinated and inclusive action in the fight against the virus. Now is the time for government, private sector and wellmeaning individuals to come together to flatten the curve. In light of this, The Nigerian Stock Exchange (NSE) on Monday July 6, 2020, redeemed its pledge of N60million to the Capital Market Support Committee for COVID-19 (CMSCC) with the donation of ambulance and Twenty Million, Seven Hundred Thousand Naira cash to the committee.

The CMSCC is a Securities and Exchange Commission (SEC) led initiative set up to stimulate the capital market ecosystem to play an active role in curbing the spread of COVID-19 in Nigeria. The donation was received by the Chairman, CMSCC, Ariyo Olushekun and the Director, Lagos Zonal Office, SEC, Steven Falomo. In furtherance of its commitment to support the fight against the virus, The Exchange launched the Masks For All Nigerians campaign with the aim to galvanize responsible corporate citizens and individuals to donate 400 million face masks to Nigerians, especially low-income households.

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hampion Breweries Plc is leveraging on reduced costs of production in her efforts to return to profitability. The company, which held her 44th Annual General Meeting last Friday using virtual platform, said results of such efforts have positively impacted on production and sales of her brand portfolio in the reporting year 2019. Addressing shareholders who participated effectively in the virtual AGM, Chairman, Elijah Akpan said revenue grew from N4.8 billion to N6.9 billion, operating proﬁt changed its narrative from a negative position of N223 million in 2018 to the positive position of N241 million and the comprehensive proﬁt was N96 million as against a loss of N165 million in the previous year. “Our investment in power generation by way of utilization of gas has begun to pay-

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off as significant savings have resulted as well as improved efficiency in our mode of operation in recent times”, he said, while assuring the Board’s resolute in working with Management on strategies to grow the business and lean on the shareholders’ continuous support towards the capitalization of the company. Elijah told elated shareholders that the Company is now on the path of profitability as demonstrated in the results. “The Board will commence work on the establishment of Dividend Policy with an expectation of implementation within the soonest practicable time”, he assured. He lamented the harsh operating environment occasioned by the COVID-19 pandemic.“There have been widespread reports of supply shortages of pharmaceuticals and manufactured goods due to factory disruption in China, with many areas seeing panic buying and consequent shortages of food and other essential grocery items.

Tuesday 07 July 2020

BUSINESS DAY

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Tuesday 07 July 2020

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Monday 06 July, 2020 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 220,380.40 6.20 -2.36 259 25,335,255 UNITED BANK FOR AFRICA PLC 206,906.50 6.05 0.83 202 8,778,376 ZENITH BANK PLC 503,913.73 16.05 5.25 437 7,996,377 898 42,110,008 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 181,271.23 5.05 -0.99 171 8,497,984 171 8,497,984 1,069 50,607,992 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,361,123.51 116.00 - 114 557,948 114 557,948 114 557,948 BUILDING MATERIALS DANGOTE CEMENT PLC 2,164,144.44 127.00 - 198 1,145,727 LAFARGE AFRICA PLC. 161,077.95 10.00 -3.38 172 1,929,397 370 3,075,124 370 3,075,124 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 227,139.60 386.00 - 27 486,252 27 486,252 27 486,252 1,580 54,727,316 REAL ESTATE INVESTMENT TRUSTS (REITS) SFS REAL ESTATE INVESTMENT TRUST 1,386.00 69.30 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 10,139.42 3.80 - 0 0 0 0 0 0 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 0 0 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 73,832.63 77.40 - 11 20,756 PRESCO PLC 45,250.00 45.25 - 16 43,033 27 63,789 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,500.00 4.25 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,680.00 0.56 -9.68 25 1,294,077 25 1,294,077 52 1,357,866 DIVERSIFIED INDUSTRIES JOHN HOLT PLC. 198.47 0.51 - 5 1,204 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 25,608.23 0.63 -5.97 27 1,474,012 U A C N PLC. 20,745.34 7.20 - 24 87,700 56 1,562,916 56 1,562,916 BUILDING CONSTRUCTION ARBICO PLC. 280.67 1.89 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 26,215.20 16.55 -9.81 72 982,309 ROADS NIG PLC. 165.00 6.60 - 0 0 72 982,309 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 18,374.37 0.99 - 0 0 0 0 72 982,309 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 7,438.02 0.95 - 2 10,000 GOLDEN GUINEA BREW. PLC. 829.98 0.81 - 0 0 GUINNESS NIG PLC 30,665.36 14.00 - 172 4,754,745 INTERNATIONAL BREWERIES PLC. 106,105.17 3.95 - 15 99,790 NIGERIAN BREW. PLC. 272,294.51 34.05 - 56 259,072 245 5,123,607 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 140,400.00 11.70 - 48 145,445 FLOUR MILLS NIG. PLC. 75,857.02 18.50 5.11 62 1,549,146 HONEYWELL FLOUR MILL PLC 7,216.48 0.91 - 15 239,812 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 26,494.38 10.00 - 23 143,510 UNION DICON SALT PLC. 2,993.06 10.95 - 0 0 148 2,077,913 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 12,677.86 6.75 - 29 138,104 NESTLE NIGERIA PLC. 931,371.10 1,175.00 -6.51 66 318,578 95 456,682 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 6,992.22 5.59 - 30 528,942 30 528,942 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 15,881.91 4.00 2.56 28 212,535 UNILEVER NIGERIA PLC. 79,281.07 13.80 - 23 64,547 51 277,082 569 8,464,226 BANKING ECOBANK TRANSNATIONAL INCORPORATED 88,077.85 4.80 -1.04 50 604,738 FIDELITY BANK PLC 48,387.91 1.67 1.20 108 7,750,246 GUARANTY TRUST BANK PLC. 618,054.76 21.00 0.96 606 60,468,939 JAIZ BANK PLC 16,499.98 0.56 3.70 24 611,360 33,684.79 1.17 1.74 21 337,241 STERLING BANK PLC. UNION BANK NIG.PLC. 158,708.10 5.45 1.87 23 330,912 UNITY BANK PLC 5,493.99 0.47 -9.62 8 650,247 WEMA BANK PLC. 20,058.72 0.52 -5.45 35 2,425,826 875 73,179,509 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 10,197.18 0.90 4.65 51 2,713,566 AXAMANSARD INSURANCE PLC 18,480.00 1.76 - 16 215,091 CONSOLIDATED HALLMARK INSURANCE PLC 3,983.70 0.49 - 0 0 CORNERSTONE INSURANCE PLC 8,101.23 0.55 10.00 30 7,517,505 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 1 20 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,830.86 0.25 - 4 75,126 LAW UNION AND ROCK INS. PLC. 4,296.33 1.00 - 3 18,709 LINKAGE ASSURANCE PLC 3,760.00 0.47 -2.08 25 2,370,062 MUTUAL BENEFITS ASSURANCE PLC. 2,346.27 0.21 - 11 3,949,631 NEM INSURANCE PLC 10,825.03 2.05 - 8 55,100 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 2,989.76 0.47 -9.62 5 432,000 REGENCY ASSURANCE PLC 1,467.13 0.22 4.76 17 7,181,975 SOVEREIGN TRUST INSURANCE PLC 2,272.89 0.20 - 0 0 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 2 10,000 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 7,917.25 0.33 - 11 345,097 184 24,883,882 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,835.43 1.24 - 6 22,772 6 22,772

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 6,784.62 1.05 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,671.82 1.36 - 0 0 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 8,000.00 4.00 - 44 923,581 CUSTODIAN INVESTMENT PLC 32,350.25 5.50 - 22 648,654 DEAP CAPITAL MANAGEMENT & TRUST PLC 450.00 0.30 - 0 0 FCMB GROUP PLC. 33,862.64 1.71 -5.00 59 4,024,864 ROYAL EXCHANGE PLC. 1,337.80 0.26 -7.69 18 951,175 STANBIC IBTC HOLDINGS PLC 317,775.26 30.25 - 14 22,248 UNITED CAPITAL PLC 15,600.00 2.60 1.96 64 3,154,204 221 9,724,726 1,286 107,810,889 HEALTHCARE PROVIDERS EKOCORP PLC. 2,991.61 6.00 - 1 2,950 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 888.28 0.25 - 5 5,000 6 7,950 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 593.50 0.60 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 6,259.08 3.00 - 8 138,000 GLAXO SMITHKLINE CONSUMER NIG. PLC. 5,919.59 4.95 - 23 262,381 MAY & BAKER NIGERIA PLC. 4,796.15 2.78 - 13 92,864 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 2,753.78 1.45 -3.33 34 1,584,552 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 78 2,077,797 84 2,085,747 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 0 0 0 0 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 764.87 0.26 - 5 2,283 5 2,283 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 216.00 2.00 - 0 0 TRIPPLE GEE AND COMPANY PLC. 247.48 0.50 - 0 0 0 0 PROCESSING SYSTEMS CHAMS PLC 1,080.09 0.23 4.55 20 1,263,265 E-TRANZACT INTERNATIONAL PLC 10,962.00 2.61 - 0 0 20 1,263,265 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,191,709.84 317.10 - 27 11,390 27 11,390 52 1,276,938 BUILDING MATERIALS BERGER PAINTS PLC 1,956.31 6.75 - 4 303 BUA CEMENT PLC 1,351,187.73 39.90 -5.00 76 3,106,481 CAP PLC 14,455.00 20.65 - 5 15,240 MEYER PLC. 265.62 0.50 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,769.32 2.23 - 0 0 PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 85 3,122,024 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,192.12 2.03 - 0 0 CUTIX PLC. 2,818.12 1.60 - 12 98,595 12 98,595 PACKAGING/CONTAINERS BETA GLASS PLC. 30,773.28 61.55 -9.95 3 140,367 GREIF NIGERIA PLC 388.02 9.10 - 0 0 3 140,367 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 100 3,360,986 CHEMICALS B.O.C. GASES PLC. 1,877.26 4.51 - 1 161 1 161 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 77.00 0.35 - 0 0 0 0 1 161 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,440.42 0.23 4.55 16 553,943 16 553,943 INTEGRATED OIL AND GAS SERVICES OANDO PLC 28,219.31 2.27 -0.44 42 738,774 42 738,774 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 69,450.65 192.60 - 15 3,486 ARDOVA PLC 15,173.90 11.65 - 39 161,669 CONOIL PLC 14,572.99 21.00 - 24 260,043 ETERNA PLC. 2,921.28 2.24 - 12 47,075 MRS OIL NIGERIA PLC. 4,206.05 13.80 - 1 13 TOTAL NIGERIA PLC. 33,103.38 97.50 - 26 35,381 117 507,667 175 1,800,384 ADVERTISING AFROMEDIA PLC 887.81 0.20 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 15,796.05 1.62 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 235.27 0.20 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,751.27 2.97 - 21 276,342 TRANS-NATIONWIDE EXPRESS PLC. 361.01 0.77 - 1 1,000 22 277,342 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 3,763.54 2.43 - 0 0 IKEJA HOTEL PLC 2,120.37 1.02 - 0 0 TOURIST COMPANY OF NIGERIA PLC. 7,076.28 3.15 - 0 0 TRANSCORP HOTELS PLC 30,401.62 4.00 - 0 0 0 0 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 3,960.00 0.33 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 193.54 0.32 - 4 192,115 LEARN AFRICA PLC 817.74 1.06 - 12 145,614 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 435.72 1.01 - 1 19,073 17 356,802 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 928.31 0.56 - 6 26,936 6 26,936 SPECIALTY INTERLINKED TECHNOLOGIES PLC 688.80 2.91 - 0 0

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Company IN FOCUS

BUSINESS DAY Tuesday 07 July 2020 www.businessday.ng

CEO in focus

Rotimi Akindipe: Re-engineering functional, sustainable housing solution for Nigerian professionals

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ENDURANCE OKAFOR

ith over 20 years of professional experience in managerial capacities cutting across planning, consulting, and business startup, Rotimi Akindipe, MD/CEO of Groveworld Realties Ltd, is one of Nigeria’s real estate developers that is championing tailored real estate products for Nigerian professionals. Rotimi, a visionary and an outstanding professional has grown organically in his field breaking every barrier to establishing Groveworld Realties Limited and Urban Dorms Development Company, commercial real estate companies that focuses on building functional and sustainable housing solution for Nigeria’s urban working class. Passionate about building housing solutions that enhance the physical and psychological wellbeing of the residence, especially in a busty city of Lagos, Rotimi is a member of the Nigerian Institute of Architects and also a member of Project management Institute, USA. Born and had both primary and secondary education in Lagos, Nigeria, Rotimi holds a Bachelors and Master of Architecture from (University of Ife) now Obafemi Awolowo University and MBA in international Business -Lincoln University, Oakland California, USA. In his early career days, the Certified Lean Construction Practitioner worked in reputable organizations like Kuramo Industries Ltd, Metro group, Space Online Construction Limited, Beachway developers and Zenith Bank Plc where he gathered experience that has stood him out in the real estate industry. Apart from the real estate company founded by Rotimi, the serial entrepreneur and business strategist also has to his name, the Groverich Integrated Farms, in the Agricultural sector, and logistics company (Groveline Logistics) among others. Since establishing Groveworld Realties Limited in 2012, Rotimi has chaired the real estate company to deliver over 12 small to medium size estates in the Lekki phase 1 corridor of Lagos state.

Under the leadership of Rotimi, Groveworld Realties Ltd plans to be innovative and adaptive during the COVID-19 era

Akindipe

Some of the completed projects by Groveworld Realties Limited include Groveville Estate, off alpha beach, Lekki in 2013, Albertson Place, Ikota, Lekki 2014,Valor Terraces 2014,Oakwood Terraces,Argungi, 2015,Almas Place,IKOTA 2015,Springville Estate, Ikate 2016,Anchorage Place,Ikate 2016,Bouvardia Court, Ikate 2017,Lofty Heights Office Complex,2018,Milledge Terraces,aIkate 2018,Tremont Terraces 2019, with an on-going Ixora Park Estate 1&2. While integrity, trust, innovation and sustainability are key business mantras that have abided with Rotimi throughout

his career, the CEO and founder aim to re-engineer functional, and sustainable housing products especially as it provides solution to Nigerian professionals. Meanwhile, Nigeria’s real estate developers are faced with the challenge of constructing affordable housing that can fill the gap created by the country’s non-functioning mortgage system while also managing the high cost of real estate development buoyed by the country’s archaic Land Use Act. Individual efforts at increasing Nigeria’s real estate properties by way of developing more houses shows offering insights

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While integrity, trust, innovation and sustainability are key business mantras that have abided with Rotimi throughout his career, the CEO and founder aim to re-engineer functional, and sustainable housing products especially as it provides solution to Nigerian professionals

into possible solutions have not helped to reduce the demandsupply gap or increase the ownership level estimated at more than 20 million units. Despite its large-size population, Africa’s largest economy is crawling behind its peers in terms of homeownership level. Whereas homeownership rate is 84 percent in Indonesia, 75 percent in Kenya and 56 percent in South Africa, Nigeria, Africa’s most populous nation has 25 percent. But, with the impact of the novel coronavirus which has affected several industries of the Nigeria economy, the property sector is expected to slide further into contraction. Due to the impact of COVID-19 on the Nigerian economy, industry analysts expect Nigeria’s property market to be hit by the pandemic that has been in the country for more than four months since it was first confirmed on February 28, 2020. The slowdown in property development due to the difficulty for real estate developers to import building materials and the expected decline in the real estate transactions are catalysts expected to fuel the industry poor performance in 2020. Nigeria’s real estate industry slowed to its lowest level in two years at -4.57 percent as of March 31, 2020, due to the early impact of COVID-19 on property activities. The growth in real Gross Domestic Product (GDP) of the real estate sector, a metric which measures the total monetary value of economic activities in the property industry was –5.69 percentage points lower than the growth recorded in the first quarter of 2019, and –1.31 per-

centage points relative to the -3.45 in Q4 2019. However, the latest data by the National Bureau of Statistics (NBS) shows that the -4.75 percent growth in Real Estate Services in Q1 2020 was 4.6 percentage points better than Q1 2018 contraction of 9.42 percent, the worse growth recorded so far in the industry. Gripped by the uncertainty created by the coronavirus pandemic, players in Nigeria’s property industry were forced to adopt the wait-and-see position. As a result, many investment decisions were put on hold pending when there is an ease in the outbreak. The outbreak of the rampaging virus also restricted both real estate investors and property developers from going on the field for property inspections as many were observing social distancing amid the 5-week lockdown in cities like Lagos, Abuja and Ogun. Analysis of the first three months GDP report by NBS revealed that the real estate sector contribution to Nigeria’s economy stood at 5.23 percent as against 5.79 percent recorded in the first quarter of 2019 and 6.45percent accounted in the fourth quarter of 2019. Under the leadership of Rotimi, Groveworld Realties Ltd plans to be innovative and adaptive during the COVID-19 era. While observing the health and safety measures, the real estate development company plans to optimize both its process and resources, strengthen its customer-friendly payment plan and shore up its reserve through the help of strategic investor and partner bank. According to Rotimi, his early life was motivated by Chief Engr O.A Gasper- The Jets Master in the 80s/90s. Late Chief Ralph Alabi, the former Chairman, Guinness Nigeria and Mr Koyejo Odulate, Chairman KURAMO Industries limited also made the list of Rotimi’s influencers. When Rotimi is not building, he mentors budding entrepreneurs in different economy sectors on business management, innovation and best practises. The Festac raised real estate developer is evidence that hard work and consistency pay regardless of gender, background and religion.

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Advert Hotline: 08033225506. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Patrick Atuanya. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.