BusinessDay 07 Oct 2020 by BusinessDay

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news you can trust ** wednesday 07 october 2020 I vol. 19, no 666

COVID-19 protocols elongate queues, fuel extortion at airports IFEOMA OKEKE

assengers travelling through Murtala Muhammed International Airport (MMIA), Lagos, and Nnamdi Azikiwe International Airport, Abuja, have expressed frustrations over extortions by airport officials and long hours of waiting to get cleared as a result of government’s imposed Covid-19 protocols. Following the resumption of international flights on September 5, the Presidential Task Force (PTF) on Covid-19 requested that arriving and departing passengers must have tested negative for coronavirus. A document signed by the PTF said, “All intending passen-

Crude Oil $42.64

N300

Market

₦5,003,238.57 -0.05

Foreign Exchange

Buy

Sell

I&E FX Window CBN Official Rate as at October 5, 2020

ntb

www.

MTN Nigeria plc CP

386.00 380.00

0.00

-0.05

1.56

4.37

3m 2m 25-nov-20 30-Dec-20 391.71 394.55

Dangote Cement plc

Axxela Nsp-spv Funding 1 (Natural Gas) PowerCorp plc plc

-0.44

-0.94

7.36

7.01

6m 12m 31-Mar-21 29-Sept-21 403.06

420.09

-0.85

-0.04

7.99

10.07

60m 36m 27-Sept-23 24- Sept-25 497.46

589.09

*NTB - Nigerian Treasury Bills; *CP - Commercial Paper

In 10 numbers, how Nigeria’s biggest firms have fared in 2020 LOLADE AKINMURELE, MERCY AYODELE & FAVOUR OLAREWAJU

igeria’s biggest publicly listed companies have faced a myriad of challenges in the first half of the year 2020, with the Covid-19 pandemic and oil price crash eating into companies’ earnings and overall profitability while shooting up their expenses. The economy is expected to enter its second recession in four years by the third quarter after contracting by a record 6.1

percent in the second quarter. Companies are typically on the receiving end of a recession that affects their sales growth and hurts profit. In Nigeria’s case, lower sales is not the only challenge companies must contend with, but also rising costs on the back of an acute dollar scarcity - caused by lower oil prices - that has forced several businesses to source dollars at a premium of around 20 percent at the black market. When companies’ profits fall and costs rise materially, it leads to job losses. There has been a

spate of companies announcing job cuts in Nigeria with the most recent being oil and gas firm, Chevron, which announced that it would shed 25 percent of its workforce. Increased job losses will be particularly worrying for Nigeria where unemployment rate is at a decade-high of 27.1 percent and is forecast to hit 45 percent by year-end by economists at trade advocacy group, Lagos Chamber of Commerce and Industry (LCCI). The following numbers dive deeper into the struggles of the

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Inside

Stocks go the Bull lane with N1trn gain in 2 days P. 2 Experts worry over FG’s silence, inaction on 300,000 mass housing initiative P. 2

FGN

Spot ($/N) 11-Mar-21 5-Mar-21 23-Jul-30 30-Apr-25 20-May-27 27-Feb-34

$-N 450.00 466.00 1m £-N 600.00 616.00 Currency Futures 28-Oct-20 388.88 €-N 540.00 554.00 ($/N)

Benchmark Sovereign & Corporate Bonds

Source: NSE, BusinessDay

30 biggest listed companies on the Nigerian Stock Exchange (NSE) in H1 2020. -24% The biggest firms saw a combined profit after tax of N695 billion in the first half of 2020, a 24.36 percent decline from the N919 billion recorded in the first half of 2019. Given the unexpected occurrence of the Covid-19 pandemic, this drop in profit after tax between 2019 and 2020 on a half-year basis is largely driven Continues on page 30

Wednesday 07 October 2020

BUSINESS DAY

news NOVA Merchant Bank appoints Nath Ude as acting MD/CEO

Stocks go the Bull lane with N1trn gain in 2 days … NSE ASI hits 5-year high; year-to-date return at +7.70% … Dangote Cement, MTNN, others to the rescue Iheanyi Nwachukwu & Endurance Okafor

Ude

Okoya

OVAMerchantBank, a leading merchant bank in Nigeria, has announced the appointment of Nath Ude as its acting managing director/chief executive officer effective October 3, 2020, subject to approval by the Central Bank of Nigeria. Ude is a seasoned banker whose experience cuts across three continents in world-class financial institutions. He has held several senior banking positions internationally and in Nigeria including executive director First City Monument Bank (FCMB) and recently executive director UnionBankfromwherehejoined NOVA. He started his banking career over 28 years ago with Citibank.HehasaBScinFinance, Masters in Business Administration, and numerous professional qualifications and attended various leadership programmes at globally renowned institutions. In the same vein, the bank also announced the appointment of Funke Okoya as its executive director, Business Development subject to approval by the CBN. Before her appointment, she worked as the bank’s head of corporate banking. Her banking career,

which commenced over 22 years ago with Ecobank Nigeria, cuts across customer services, banking operations, liability management, commercial banking, corporate and investment banking. She has held senior positions in United Bank for Africa, Access Bank, Coronation Merchant Bank and Emerging Africa Capital Group. Commenting on the new appointments, Phillips Oduoza, chairman, NOVA Merchant Bank, says with the experience of these versatile bankers, NOVA remains wellpositioned to fulfil its vision of being a major financial solutions provider as it enters the next stage of its growth phase. “These key appointments represent NOVA’s commitment to optimise its management structure and align it to continually serve our clients and leverage on our business successes. It further demonstrates the inclusive nature of the Bank by placing women in key leadership roles,” Oduoza notes. The chairman further states that the new appointments are crucial as the bank grows capacity to drive its capital market subsidiaries.

igeria’s equities market has returned to the bull path with a record N1.005 trillion investors garnered in just two trading days into this week. The market powered higher Tuesday afternoon of October 6 as the Benchmark Index posted its biggest daily gain in more than five years. Also, the All-Share Index (ASI) of the Nigerian Stock Exchange (NSE) climbed 4.92 percent at the close of the day’s trading session, its biggest daily gain since April 1, 2015.

“I will tie the driver to the low-interest environment and to the realisation that lowinterest rate might be here for a while,” Yinka Ademuwagun, research analyst, FMCGs, United Capital plc, said. Afrinvest Research analysts had anticipated a sustained bullish run this week “as investors continue to position in fundamentally sound stocks ahead of earnings releases for the third quarter.” The market strengthened its positive return of +7.70 percent at the close of trading session on Tuesday – thanks to stocks like Dangote Cement plc (+9.86%); MTNN plc (+5.70%); Nigeria Breweries plc (+10%); Stanbic

IBTC Holdings plc(+7.17%), and ZenithBankplc(+4.94%)thatoccupied the top advancers’ table. The stock market opened this week with its ASI and capitalisation at 26,985.77 points and N14.105 trillion, respectively, but increased to 28,909.37 points and N15.110 trillion. “This month, we expect that the positive sentiment in the equities market will be sustained, as investors position for third-quarter (Q3) 2020 earnings publications. “Also, we expect some of the scheduled OMO maturity of N1.7 trillion in October 2020 to filter into the equities market as investors continue to search for alpha returns.

Oil producers fret as multilateral agencies, funders halt financing for new projects DIPO OLADEHINDE

ome institutional investors and multilateral organisations like the World Bank and the European Investment Bank are placing a freeze on financing new oil projects, a development that could hurt Nigeria, largely dependent on oil. This is why many oil producers are reforming their sectors and easing fiscal policies to get a head-start in the race to attract fast dwindling capital. Oil projects are facing threats from pandemic-driven demand destruction, and a relentless call for mitigating climate change impacts by cutting back on funding oil projects is forcing executives to consider that vast oil and gas reserves may end up undeveloped. Over 1,110 institutions have now committed to policies blacklisting coal, oil and gas projects from new investments. These include sovereign wealth funds, banks, global asset managers, insurance companies, cities, pension funds, health-care organisations, universities, faith groups and foundations, according to Canada-based Anadolu Energy. European Investment

Bank (EIB), the EU’s financing department, has announced plans to bar funding for most fossil fuel projects. Under the new policy, energy projects applying for EIB funding will need to show they can produce a kilowatt hour of energy while emitting less than 250 grams of carbon dioxide, a movewhichexcludestraditional gas-burning power plants. The EIB’s decision comes after EU finance ministers last year unanimously backed the phasing out of funding of fossil fuel projects to help combat climate change. Gas projects are still possible but would have to be based on what the bank called “new technologies” such as carbon capture and storage, combining heat and power generation, or mixing in renewable gases with the fossil natural gas. Also, World Bank Group has previously announced it will cease to finance upstream oil project from 2020, claiming its decision would “align its support to countries to meet their Paris goals”. Chief executives and board members from more than 30 banks met at the UN last year to pledge their support

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Sabo Nanono (l), minister of agriculture and rural development, with Bashir Ibrahim Hassan, general manager, business development (Norh), BusinessDay, after the minister’s exclusive session with the BusinessDay team on his vision, policy direction of the ministry under his leadership and the FG’s efforts towards ensuring food security.

“Overall, we are of the view thattheequitiesmarketisnotonly in correction mode but set for a positive close for the year,” Lagosbased analysts at United Capital said in their October 6 note. Furthermore, with a yearto-date return of 7.03 percent the NSE ASI stood added 1,354.81 points at market close on Tuesday, marking the 12th consecutive day rally. “The rally is due to strong renewed interest from domestic institutional investors as well as foreign portfolio investors who have their funds in the country,” Ayo Ebo, senior economist/ head, research and strategy, Greenwich Merchant Bank said, adding that the stance of the CBN at the last MPC meeting showed that the interest rate might remain low for a longer time amid high inflation. According to Oscar Onyema, CEO, NSE, the low yield environment has positioned the equities market as a credible investment option for domestic, institutional and retail investors. Analysis of NSE data shows that domestic investors have accounted for almost 60 percent of the trading activities in 2020 compared to the average of 51 percent in the last four years. “Significant OMO maturities (N567.7bn) are expected to flow in on Thursday, thus many institutional and HNIs are taking positions in the market given lack of high yield alternatives,” Ayorinde Akinloye, a research analyst at CSL Stockbrokers Limited, said. While interest rates have always been high in Nigeria due to the monetary system in

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Experts worry over FG’s silence, inaction on 300,000 mass housing initiative CHUKA UROKO

hen the Economic Sustainability Committee (ESC) recommended, among other things, the construction of mass housing in other to stimulate the economy, Nigerians clapped, but several months after, nothing is happening, raising concerns among experts and housing industry stakeholders. The mass housing initiative, recommended along with rural roads construction, targets 300,000 housing units to be delivered in 12 months in each state of the federation at a total cost of N317.29 billion. The experts, who were reacting to the Federal Government’s decision to build a rail track that will link Kano in Nigeria to Maradi in Niger Republic, wondered what the government’s priorities were. A Federal Executive Council meeting recently approved the building of a 248-kilometre rail line that will link

Kano, Katsina, Jigawa states to Maradi, Niger Republic, at the cost $1.96 billion, igniting outrage across the country. “The 300,000 mass housing units for each state of the federation which the government said it would build in 12 months as part of ways to stimulate a Covid-19 ravaged economy, what is being done on that? Nobody is just saying anything about that initiative. Has any state broken ground, any procurement done?” one of the experts queried. The experts, who also took a critical look at what a Buhari legacy could possibly be, noted, “Infrastructure is not a switch, but takes methodical planning and execution, especially at a time like this when the fiscal state of the country is terrible. “Instead of talking about a rail line that will serve no known economic purpose, the Federal Government should be bothered about viable economic initiatives like the 300,000 mass housing

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and rural roads, the servicereflective electricity tariff and the Petroleum Industry Bill (PIB).” The 300,000 mass housing initiative was hailed by housing industry stakeholders, describing it as a good economic recovery strategy post-Covid-19, and, it was reported that, in order to avoid the pitfalls of similar initiatives in the past, government has set aside funding and put modalities in place for implementation. “Government will be building the 300,000 houses over 12 months at a total cost of N317.29 billion, using existing institutions. Implementation is expected to be carried out by the Federal Ministry of Works and Housing, the Federal Housing Authority (FHA) and the Federal Mortgage Bank of Nigeria (FMBN),” Ayo Ibaru, director, Real Estate at Northcourt, confirms to BusinessDay. Ibaru notes that mass housing projects tended to @Businessdayng

work best when public expenditure meets rigorous oversight, adding, “we seem to need more of the latter.” Nigerians were told that, as part of modalities to make this project successful, office of the Vice President was to provide the leadership and this, Ibaru explains, was based on the understanding that most initiatives chaired by the VP’s office tended to achieve some level of success. Damola Akinolire, managing director of Alpha Mead Construction Company, also hails the ESC recommendation, estimating that 300,000 housing units would provide, at least, 6 million direct and indirect jobs. “Although far from making any major dent to the high unemployment figures, it will certainly make an impact,” he says. The residential housing market, he notes, is one of the most labour-intensive sub-sectors and will generate a lot of economic activity and reduce unemployment.

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All we are saying!restructure Nigeria now

FRANKLIN NGWU

n response to the exponentially growing call for the restructuring of the country, the Presidency through Garba Shehu maintained that the PMB and his government will not be pressured into making hasty decisions about Nigeria and that the executive arm of the government will continue to work with the legislature on governance decisions of the country. With Enoch Adeboye of Redeemed Christian Church of God and Kayode Fayemi, Ekiti State Governor and Chairman of Nigerian Governors Forum the most recent advocates of restructuring, Garba Shehu stated as follows: “The presidency responds to the recurring threats to the corporate existence of the country with factions giving specific timelines for the president to do one thing or another or else, in their language, the nation will break up. This is to warn that such unpatriotic outbursts are both unhelpful and unwarranted as this government will not succumb to threats and take any decision out of pressure at a time when the nation’s full attention is needed to deal with the security challenges facing it at a time of the Covid-19 health crisis. This administration will not take any decision against the interests of

200 million Nigerians, who are the president’s first responsibility under the constitution, out of fear or threats especially in this hour of a health crisis. The president as an elected leader under this constitution will continue to work with patriotic Nigerians, through and in line with the parliamentary processes to finding solutions to structural and other impediments to the growth and wellbeing of the nation and its people.” Reading the Federal Government’s response creates the understanding that the government is really disconnected to the realities of our time. It reads like the behavior of a very stubborn man who refuses to attend to the deteriorating health of his sick children. While he claims to be interested in their survival and attending to their welfare, the cries for urgent help from the children are being suppressed with the thinking that their ill-health is fake or possibly caused by his enemies. Most regrettably, the sickness is real, old and eating the remaining organs of the children and family! As the PMB government maintains that it is focused on attending to the challenges of 200 million Nigerians, it is important for the government to realise that central to survival of Nigeria is the need to restructure the country. While there may be enemies of the government, it is difficult to say that Enoch Adeboye, Governor Fayemi, Vice President Yemi Osibajo and many others including some of our highly non-partisan religious leaders are enemies of government. As these people cannot be described as enemies of government, it means that the demand for re-

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It is also important to note that while there are different versions of what restructuring means, it cannot be used as an excuse to delay or reject the unquestionable importance and urgency

structuring is genuine and valid. Moreover, as this growing calls for restructuring are coming even from quarters that normally might not want to interfere in the polity, it means that their calls should be considered with all seriousness. It is also important to note that while there are different versions of what restructuring means, it cannot be used as an excuse to delay or reject the unquestionable importance and urgency. The APC as a party advocated for restructuring before their triumph into power, advancing the argument on the multiplicity of restructuring versions as a reason for the delay or rejection of the demand is not tenable. If they don’t understand, they should implement the version they advocated, or the version generally agreed by Nigerians during the 2014 national conference. Moreover, irrespective of the variations in the conceptions of what restructuring means, there are common agreements of what it entails. First is that majority of Nigerians have come to the agreement that the current unitary system of government is not working. Second is that majority of Nigerians are asking for a devolution of powers from the center to the regions or states and local governments. Interestingly, all that is required is the review of the exclusive list controlled by the federal government with the aim of moving some items to the concurrent and residual list controlled by the state and local governments. Third is that Nigerians are asking for a reduction of cost of governance as they believe that it is presently too high and unsustainable. A starting point for this demand can be to agree that only one house of the National

Assembly, either the House of Senate or the House of Representatives is needed. Another starting point is the full implementation of the Oronsanye report. Four, is that Nigerians are asking the current presidential system of governance might not be the best for the country. Many maintain that a devolved structure with a lean center might be a better option for Nigeria. While there are other components of restructuring, the above four key elements are contained in all the different versions. What is therefore demanded of the PMB and his government is to start a genuine effort in initiating the appropriate steps to achieve the restructuring demands. In one my contributions about three years ago, I cautioned that restructuring is a demand that its time has come and that it will happen irrespective of the stand of the party in power. With the exponential increase in agreements on the urgency and importance even from unexpected quarters, I further implore the PMB government to seize the opportunity and start the process. This will bequeath the PMB government with the greatest legacy. As it is something that will eventually happen irrespective of the position of PMB’s government, it will be to their greatest advantage to jump on the driver’s seat given the fact that it is the voice of the people which is the voice of God!

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

There is no such thing as ‘Nigerian culture’

his year, 2020, is marked as a transformative year that is shaping the world’s fate in an unpredictable way. With the COVID-19 pandemic, every country is reaping harmful effects in varying degrees. During these times of distress, unity serves as a guiding force that can suppress the challenges that we are all facing. The occasion of Nigeria’s 60th independence anniversary, gives us the opportunity to reflect on how the country has evolved since its detachment from British rule. On October 1, 1960, Nigeria was granted a fresh start. Regional boundaries mainly based on ethnicity and religion obstructed the harmony that the founding fathers yearned for. By promoting a culture of unity for future generations, these men made sacrifices to erase the negative perceptions associated with Nigeria. However, our reality is a setback compared to their blissful dreams. In the present time, such expectations are overshadowed by a continuous loop of struggle and disappointment. Undoubtedly, Nigeria is a heterogeneous nation upheld by dividing lines of inequality and hostility. The socio-cultural differences among Nigerians still call for conflict and disunity on numerous occasions. Fixating on how one has better social value than others based on their state of origin, for example, goes against the morals of independence. Therefore, concord among the population during the 60th year of independence is questionable. As much as

we like to define ourselves as “one”, there is no such thing as “Nigerian culture”. In mid-September, President Muhammadu Buhari proudly announced the commemoration of the nation’s state of independence by introducing “Nigeria@60”, a year-long celebration based on inclusiveness and unification. “Together Shall We Be”, the theme of the anniversary, was chosen to emphasise the need for unity among Nigeria’s “most special asset” - its people. The President also praised the people for their achievements in specific leading occupations, emphasising that their “wealth” accentuates “togetherness”. A proclamation of Nigeria as ‘the most prosperous Black nation in the world and Africa’s largest economy’ reflected more of a goal than an accomplishment. Due to the current state of Nigeria, the President’s anticipations are a mere dream that 60 years of backwardness have not achieved when empty promises are still spoon-fed to the malnourished. The non-existence of a “Nigerian culture” goes against the anticipations of the 60th anniversary of an independent Nigeria. The word “independence” suggests that a nation has regained its power from a controlling outside force. Ideally, a commitment to improving all lives should serve as the primary mission among authoritative figures. For centuries, our people were accustomed to a culture of division caused by the extortive mannerisms of the British Empire. Associat-

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ing with someone of another tribe, religion, or class was deemed a taboo. If one is influenced to look down upon another who does not share similar socio-cultural identities with them, then where is the room to achieve togetherness? More than 300 tribes and 500 languages have shaped Nigeria into a culturally rich land. Its mixed composition exemplifies beauty, and there is potential to transform into “one” if all levels of society integrate to form the “unity” desired. “Culture” represents a collective of various customs and ideas, leading to a singular concept of a ‘way of life’ that a group of people abides by. There is no “Nigerian culture” because the country’s multinational identity is seen as more of a threat than an asset. A lack of tolerance towards a certain group of people, mainly due to cultural differences, does not make room for us to claim that there is a “Nigerian culture”. As much as one needs to preserve their indigenous roots, it should not warrant the right to spread hate against one another. The cultural division in Nigeria separates it into, at the minimum, three “subcountries” that refuse to harmonise. The lack of a unified culture has influenced the underdevelopment of Nigeria. Individualism, rather than solidarity, is reflected in every sector of society. Leadership is expected to uphold the pledges of building a “better” Nigeria. But when dealing with a population of over 200 million, breaking the

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FOLA FAGBULE

smallest promise can dramatically overturn development. The mismanagement of Nigeria has created an indefinite state of inequality that is grounded in poverty, corruption, tribalism, high unemployment, nepotism, crime, terrorism, and insecurity. Strikes and protests are the norms when senseless hopes are shattered. The sufferings of Nigerians hinder the excitement of celebrating the country’s 60th anniversary. Prosperity is rooted in a promise to pursue good governance, but, up until now, it has not been fulfilled. Independence is a proud achievement, but it holds no significance when the culture in Nigeria is based on an unending cycle of hardship. If there is no “Nigerian culture”, more so the lack of unity and respect for one another, then the morals of independence hold no value to our “most special asset” to celebrate.

Anyanwu is a postgraduate student at the London School of Economics

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Rethinking finance as the silver bullet for all MSME problems SMALL BUSINESS HANDBOOK

EMEKA OSUJI

here is no doubt that finance is to business what blood is to a human being, a certain famous musician once said that there is no romance without finance, that have proved to be indubitable, at least for today’s generation. In the context of business, that line could read: no business without finance. Therefore, the place of money is so important in business, and for bringing ideas to life. Indeed, some have come to believe that it is the first element to assemble in the building blocks of an enterprise. That notion is not only wrong, it has been discredited and abandoned following several empirical findings, which show that finance is not the most important challenge of MSMEs. Recent policy actions in Nigeria, particularly in the area of providing financial assistance and soft loans to MSMEs, tend to give finance a bloated role in the survival of small busi-

nesses. We seem to have fallen back into that long-rebutted argument that finance is the most important problem faced by the small business. The defeat of that argument was part of the building blocks that helped the transition from microcredit to microfinance. While microcredit is essentially concerned with the provision of credit, in the form of small loans, to small needy enterprises, microfinance encompasses a lot more. It combines microcredit with other ancillary services that are critical to a business, including microinsurance and capacity building resources. Currently huge sums of money are being doled out, either as Trader Moni or Farmer Moni, from the Central Bank, together with several other low cost funds, to small business operators and individuals, to support their businesses. While this is a positive policy response, particularly in relation to the COVID 19 crisis, it has been executed without much needed regard to other elements of a balanced business ecosystem. The sorry state of public utilities and general infrastructure cannot be ignored while we pop cash into the hands of individuals and businesses in the hope that it will turn their lives around. Once a road is bad, for instance, all the shops on the roadside lose their customers and ultimately shut down, spewing their occupants into the street; turning innocent citizens into hooligans and criminals. All the elements of a complete economic system must be addressed

alongside funding. Lack of functional utilities and common services accentuate the adverse effects of lack of finance such that those effects now become more important challenges than finance. This is a very simple but less intuitive point to understand, Funds are not used in isolation, unless they are meant for shopping, and that appears to be what is happening. The absence of complementary facilities needed to energize capital puts recipients of such funding support at the risk of misusing them and not being able to pay back. The practical absence of technical support for MSMEs has united with policy disarray (lack of coordination, summersault and do-nothing policies) to work harm on MSMEs. Banks may devote funds for MSMEs but they need conducive operating environment to be of optimal benefit to the beneficiaries. Most MSMEs studies identify poor business knowledge and nonavailability of other financial services in appropriate forms, as well as poor capacity of operators to tap opportunities, as more important than finance. A good business idea in a good operating environment will definitely attract the requisite capital. The critical need of the economically active poor, and indeed the MSMEs, is in the form of credit and savings windows, security of life and property, a trustworthy government, rule of law, adaptive insurance schemes that are challenge and customer specific, and not just finance.

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Lack of functional utilities and common services accentuate the adverse effects of lack of finance such that those effects now become more important challenges than finance

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

Chain that cane

hen dealing w ith our children in this part of the world, we’re likely to reach out for the cane or deliver a backhand with such precision and fury, it would leave even Novak Djokovic the ace tennis player, green with envy. Far more so than our caucasian brothers and sisters. But have you ever stopped to ask yourself why black people are arguably the least adventurous of all the races? Why wouldn’t we be, when the slightest whiff of mischief instantly attracts a good hiding. The creative thinking and daring nature which incidentally accompanies naughtiness in adolescence is routinely bludgeoned out of us, all in the name of discipline. Before long, the child’s spirit is cowed and the essential sense of adventure, necessary to literally conquer mountains and to explore the endless possibilities of space diminishes, until there’s nothing left. How will a child, sternly warned not to go near water, discover the hidden treasures of the sea? Anyone familiar with the famous Williams sisters’ story would know their talent was nurtured from a very young age, by their father whose foresight produced the winners we all love and celebrate today. They didn’t become champions by chance. This was done by engaging them in a rigorous training program and ingraining a mentality which has made them unstoppable. Instead of beating his daughters and reminding them he didn’t send them to school to play, he did the complete opposite. He deliberately got them to “play”. He channelled their restlessness into something productive. His perception

of sports didn’t align with those who saw it as a waste of time but instead identified it as a veritable path to greatness. However, as wonderfully inspiring as this part of their story is, that’s not what most wowed me. The most profound take away for me is to learn that a supposed underdog can actually become the top dog and reign supreme if he’s perceptive enough to dig out a hidden advantage. At a time when the sisters’ peers were on the basketball court or the athletic track, playing sports typically associated with black people like themselves, they were playing tennis. Instead of engaging in the usual sports reserved for black children singled out for their athletic promise, they veered into almost unknown territory. Their old man had seen way ahead and foresaw how the black man’s extraordinary agility and strength could work to the advantage of his two daughters in a sport traditionally played by whites. He wasn’t wrong. At least one of the two sisters, Venus or Serena, has dominated female tennis almost uninterrupted, for over two decades. My plea is for us to avoid beating curiosity and natural inquisitiveness out of our children. Allow them to ask all the questions they want to ask and don’t be quick to shut them up. Encourage them to express themselves, both verbally and physically. Allow their imagination to run wild, for buried in it, is genius clamouring to spring forth. Do not manacle their creative essence or make the mistake of cowing their spirit. Certainly, it must be frustrating for parents who constantly replace toys because their child keeps dismantling them. Such behaviour may appear destructive

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but in the child’s mind, it’s not a random act, he’s actually going somewhere. You may well be doing the world a favour if at times, you allow him to get there. Beating him may only abort his journey before it has even begun. Let’s say you even damn it all and decide to smack him anyway, from where will our great engineers, doctors, inventors and innovators emerge? Is it really a surprise that those “crazy” Oyinbo people who consider it fun to attempt to circumnavigate the world in a hot air balloon or to swim across the seas, are invariably the same people who produce most of the world’s greatest innovations? They are the initiators and pioneers who bring progress and newness to the world. Imagine how drab the world would be without them. Involved in a series of “successful” publicity stunts for his Virgin brand since the 1980s, Sir Richard Branson was rarely triumphant in his daring quest, but in his objective to attract attention to his brand and business, he never failed. Twice he tried to become the first man to fly around the world in a hot air balloon (1995 and 1998) and twice he failed. To celebrate the first Virgin America flight in 2007, he bungee jumped off a 407 foot tall Hotel in Las Vegas. This didn’t go too well either as he smashed into the building twice and embarrassingly ripped his trousers apart in the process. But still, “nothing spoil”. The publicity stunt worked like a charm for his airline. Aware of all these and more, it was almost a no brainer that Sir Richard Branson’s name would one day pop up as one of the front-runners in the space race, with his Virgin Galactic project, designed to take passengers on “space holidays”. How many blacks we’ll see on those trips, your guess is

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The problem of Handout or Eleemosynary Economics is that it is neither productive nor sustainable. It is susceptible to manipulation and hardly ever transparent. It gives room to unaccountable discretion, which is the fertile ground for corruption, even in normal societies where the rule of law operates. In our environment in which the law is malleable and sensitive to personality. It breeds Prebendalism and graft. Above all, eleemosynary economics is hard to stop. See what fuel subsidy removal is causing us. This handout culture has significantly dented this administration’s efforts to help the poor. Government to support the vulnerable people was marred by discretion without accountability (corruption). In short, capacity building, infrastructure and common services are critical requirements for the effective use of financial capital. The key to achieving our objective of moving a hundred million Nigerians out of poverty in any number of years is in understanding why the people are poor. We either do not yet understand the root causes of this problem or we apply solutions that are not well thought, or are drenched in the brackish waters of politics. We should never tackle any problem without finding out its root causes. Poverty is more than the lack of finance.

CHARACTER MATTERS WITH DAPS

DAPO AKANDE as good as mine. Not me sha o. Much can be said for the approach the parents of one of Nigeria’s first-rate lawyers adopted in training their children. Instead of giving their son a good conk on the head, like myself ( I confess) and many “well meaning” Nigerian parents would do, whenever he got ahead of himself; they were progressive enough to acquiesce to his habitual request of having himself heard before judgement. If he was found to be right after stating his case, then that would put an end to the matter but if after all that, he was discovered to be guilty or at fault, he would face the consequences, not just for his initial misdemeanor but for also wasting their time and refusing to accept fault when it was so obvious. But, the punishment never took the form of a beating. As a result, his spirit remained unassailed and was never broken. His assertiveness was not curtailed to the point of timidity and his precocious skills at arguing his case was not stifled. No wonder he’s where he is today. Changing the nation...one child at a time. Akande is a Surrey University graduate with a Masters in Professional Ethics. An alumnus of the institute for National Transformation and author of two books; The Last Flight and Shifting Anchors. Contact: dapsakande25@ gmail.com

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Wednesday 07 October 2020

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Stop saying that we ‘privatised’ power - we did no such thing

DAVID HUNDEYIN

ver the w e ekend, I watched an investigative documentary on the fall of Kenya Airways from being one of the most profitable companies in East Africa to becoming a basket case in need of a taxpayer bailout. The documentary, produced by Kenya’s finest investigative journalist John Allan Namu focused on the questionable decisions made at board level while executing the ill-fated “Project Mawingu.” Project Mawingu was essentially a brainwave hatched by the management of Kenya Airways in 2010 which had the goal of more than tripling its fleet size and operations to over 100 aircraft flying to 77 destinations. Using little more than optimistic business projections and green candle graphs promising growth and strong cashflows, the airline embarked on a foolhardy campaign of borrowing to fund unsustainable expansion and questionable financing mechanisms. Among other things, a deal to buy 10 Embraer E-190 narrow body jets was routed through a company with untraceable ownership registered in the Cayman Islands which obtained the bank loan, bought the aircraft and

leased them to the airline. Under the leasing agreement, the airline had to pay off the bank debt and then pay this murky company to lease its aircraft, a move which reportedly added more than $400,000 to the cost of each aircraft. Unsurprisingly, within a year, the airline began bleeding copious amount of cash, breaking its own record for the heaviest financial year losses in Kenyan history in 2015 and 2016. Now, with the added impact of the COVID-19 pandemic and associated reduced flight volumes, KQ will shortly be taken over by the Kenyan government, and its losses will be charged to the Kenyan taxpayer. Expectedly, to many within Africa’s multitude of statist-socialistcommunist types, this is great news. Not only does a symbol of “national pride” come back under public control after being privatised in 1996, but it also offers a handy propaganda victory - “Private ownership does not mean better run!” There is of course, one very glaring problem with this narrative. Corporatisation is not privatisation According to the dictionary definitions, privatisation is the transfer of publicly owned entities into private hands, while corporatisation is the reorganisation of public entities into corporations so as to improve efficiency by mimicking private business structures. Technically under this definition, the government liabilities we sometimes proclaim as “privatised” on this continent are indeed privately owned. Kenya Airways for example, had 51 percent of its shares on public offer, with the Kenyan

government and KLM splitting the remaining 49 percent in a 26:23 ratio. Something similar happened with the “sale” of the newly created power distribution companies in 2014. While the new investors got 60 percent of the company shares, the federal government retained 40 percent shareholding in every DISCO it “sold.” Technically this is privatisation, but in actual fact it could more accurately be described as mere corporatisation with increased private participation. The Nigerian government corporatised the structure of the Power Holding Company of Nigeria (PHCN) and broke it up into Generation Companies (GenCos), Distribution Companies (DisCos) and Transmission Companies (TransCos). It then parcelled out a 60 percent ownership share in each one to private investors and took their money “for vanishing,” so to speak. In fact, with the exception of the 60 percent private shareholding in the DISCOs, the entirety of Nigeria’s power sector remains firmly and overwhelmingly in the hands of the government. The generation and transmission of power is not controlled by the private sector. The pricing of the distributed product which should be the purview of the DISCOs is directly set by the Nigeria Electricity Regulatory Commission (NERC). The entire purpose of inviting private capital into the DISCO space was to perform the motions of privatisation without actually doing it. Performance-privatisation is the new trick Make no mistake about it - the ideological war for Nigeria’s economic soul which started in the 1970s

‘

Setting up power sector privatisation to fail by corporatising aspects of the power value chain while maintaining full control over the entire sector is a way to ensure that the inevitable failure and collapse of the DISCOs will be blamed on the convenient capitalist bogeyman of corrupt businessmen and unpatriotic profiteers

- state control vs private enterprise - is still very much yet to be decided. The same characters from 4 decades ago are still knocking about and doing everything in their power to frustrate any efforts to privatise public liabilities and open up Nigeria’s economy to actual capitalism. One of the tenets of the ideology that still fights this war is that “privatisation does not work.” Setting up power sector privatisation to fail by corporatising aspects of the power value chain while maintaining full control over the entire sector is a way to ensure that the inevitable failure and collapse of the DISCOs will be blamed on the convenient capitalist bogeyman of “corrupt businessmen” and “unpatriotic profiteers”. When African governments decide to do privatisation correctly, the results are always positive, and spectacularly so. When they however use the Kenya Airways and PHCN DISCO model to entrench their presence while supposedly making the company “private,” the results are always unmistakable. I am writing this so that when - inevitably - the distribution companies finally run out of debt-financed runway and collapse, leading to a fresh round of nationalised assets, it will be on record that some of us know exactly what game is being played here. It is not as if these old men have learned any new tricks in 40 odd years.

David Hundeyin is a writer, travel addict and journalist majoring in politics, tech and finance. He tweets @DavidHundeyin.

Raising the quality of healthcare in Nigeria

ver the years, quality of care given by the Nigerian health system invariably speaks volume. Statistics have shown infants and under 5 mortality have remained constant. There are 74 and 117 deaths per 1000 births, respectively, invariably 1 in every 13 born dies before age 1 and 1 out of every 8 does not survive to their 5th birthday. Maternal mortality caused by severe bleeding, infections, hypertensive disorder in pregnancy, etc. are not left out. As reported by WHO, chances of an average Nigerian woman dying from pregnancy complications is 1 in every 13 and Nigeria loses 145 women of child-bearing age annually, thus ranking the 2nd in maternal mortality rate globally and the country with the lowest life expectancy in west Africa. What is alarming is that common illnesses like malaria, tuberculosis and HIV/AIDS majorly contribute to low life expectancy. With these challenges, no option is left than to strive in raising the quality of healthcare. This means nothing but giving consumers of care more value for their patronage which automatically changes the dynamics of the sector, spurring it into real growth. Issues of quality can emanate from full-blown sector wide systemic issues as well as at localised levels in a patient’s journey. Either way, aside from enacting policies and regulations supportive of quality improvement, embracing a stricter system that discourages errors and shortcomings in quality while recognising and rewarding outstanding performances should never be over emphasised. Moral/high ethical standards should also be put into consideration and reinforced in medical practice to rekindle the publics’ faith and trust in healthcare professionals. Government should also take full responsibility for epidemics, vaccinations and public health

matters and must ensure community engagements at grassroots levels. A PriceWaterCoopers survey on Nigerians revealed that over 90 percent of what is attributed to advanced healthcare in Nigeria in factual sense is of “low quality”. The report claims that this perception has come to acquire notoriety over years. The survey also highlighted the negative perceptions arising from confusing hospitality functions with the clinical function of hospitals. Benchmarking quality with the size of a health facility or even equating it as what goes on in the doctor’s office or within the walls of a hospital should never be a yardstick for measuring quality care. If this is the case, developed countries have no business whatsoever bothering on improving quality care. In the context of healthcare, quality can be a collaborative effort of the patient, health caregiver, patient’s family, and the community. It is the act of providing care a patient needs when the patient needs it in an affordable, safe, and effective manner. It can also mean engaging and involving the patient to take ownership in preventive care and in the treatment of diagnosed conditions. With these definitions, the stakeholders, all consumers of healthcare, and industry leaders can contribute to raising the quality bar at different stages of a patients’ journey. According to the Institute of Medicine landmark report, “Crossing the quality chasm”, six dimensions of quality identified include equity in healthcare, safety, timeliness, effectiveness, efficiency and most importantly it is about patient-centeredness. Patient centeredness: The essence of patientcentered care is captured in the maxim “nothing about me without me”. It requires patients to be carried along and be active participants in their

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care. Medical personnel in general need to conquer professional pride (sorry, but this comes with the territory) and embrace the evolution in healthcare history and begin to treat patient’s enquiries not as an impediment to care but as an opportunity to enhance care. Timeliness: Permanent disabilities and sometimes death have occurred due to harmful non-instrumental delays of patients being held down in hospitals instead of referring them to the right facilities where they can get immediate care. Safety: This simply means not harming people with the care you give. Safety issues can occur in both in-patients and out-patients care. Many late stage diseases or complications have pointed towards a missed out-patient care. This could be because of wrong diagnosis, poor treatment, or wrong prescriptions. Effectiveness: This happens to be a main quality challenge as the health system has witnessed an increasing disregard for care protocols and treatment pathways with many caregivers resorting to individual treatment processes not backed by research or science. Efficiency: Our health system is designed to function in 3 tiers. Each tier saddled with its responsibility and level of care. There are referral mechanisms and protocols that link one level to the other. Ignoring this will only add to the cost of care and disorganises the system. Inefficiency also affects the workforce who will not only lose training opportunities, but ideas and creativity on how to do things better where they are streamlined. Equity: Contrary to the Nigerian perception, quality healthcare is affordable healthcare. It encourages standardisation of treatment without discriminating against patients. People should be able to get the right treatment irrespective of social class.

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DOROTHY JEFFNNAMANI Do we have a long way to go in this area of quality? Clearly, yes, but that is not to say it cannot be achieved. Globally, successful healthcare systems are shifting their approach from what is confined within a hospital’s walls to a broader approach of delivering health services for better outcomes. This encourages both intra and inter sectoral partnerships that will bring cooperation and value amongst players. Support of the community is equally very important in this regard. Embracing philanthropy in healthcare can help bridge the gaps and strengthen institutions to help more people. Not only would it bring about more consciousness and zeal for our caregivers, they will feel loved by the society thus encouraging them to do more. Without doubt, the essence of quality and quality improvements is about identifying, measuring, and reporting health outcomes. We must therefore understand that quality is not a destination to be reached but it is about constant changes which spur economic growth in every society. Changing all our health indices for better economic and social gains therefore demands that we must dynamically pursue quality nonstop…starting now. Dr. Dorothy Jeff-Nnamani (MD/CEO NOVO HEALTH AFRICA) is a Physician leader in public health with expertise in developing sustainable health programs, community-oriented policies, and management protocols for efficient health care delivery system.

Wednesday 07 October 2020

BUSINESS DAY

EDITORIAL PUBLISHER/EDITOR-IN-CHIEF

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

Radical action beyond words needed urgently on SARS

he killings and financial extortions of Nigerians by a ‘rogue’ police unit called Special Anti-Robbery Squad (SARS), are unacceptable and calls for immediate policies to address this insanity once and for all. The menace posed by the illegal actions of SARS are too significant to overlook and must be followed with necessary actions rather than mere words of displeasure. The unit has outlived its existence and should be disbanded immediately. It is time to defenestrate its amoral personnel, reform those amenable and throw the books at the criminals in their ranks. Sadly, the anti-robbery police unit committed with the responsibilities of protecting lives and properties has become the robbers who put properties and lives in peril. This puts the image of Nigeria in jeopardy especially in the eyes of investors. Most especially, the illegal activities of SARS are a symptom of policy failure and portray the lack of government control on SARS. When SARS was created, there were already three Anti-Robbery

Squads operating in Lagos – Force CID at Alagbon Close, Zone Two Command and at Panti, Lagos state CID. There were also special antirobbery squad units in each state police command. Midenda’s unit, however, was “special”, it lent some mystic. They operated in plain clothes and drove unmarked cars unlike regular police patrol teams. They did not visibly carry guns or walkietalkies; the idea was to blend in. Intelligence and surprise were their most potent weapons. Operatives though were always fully combatant, remained undercover and monitored all police communications. When there was a reported robbery, they laid in wait to capture the fleeing robbers. At other times, they simply captured them on their beds, hotels or other leisure places. They did not interface with the public, didn’t stop people on the streets or pry into their phones. They relied on intelligence, smart police investigation and were the most successful unit in the police. This is why it was replicated at every police command in Nigeria. That SARS is history. In its place is the stuff of nightmares. Hiding in

plain sight which helped them fight crime has become a tool to harass Nigerians. They are dreaded more than armed robbers. Thus the directive by Mohammed Adamu, the Inspector General of Police, to ban the Federal Special AntiRobbery Squad (FSARS) and other Tactical Squads of the Force including the Special Tactical Squad (STS), Intelligence Response Team (IRT), Anti-Cultism Squad operating at the Federal, Zonal and Command levels, from carrying out routine patrols and other conventional low-risk duties – stop and search duties, checkpoints, mounting of roadblocks, traffic checks, etc. – with immediate effect, is unconvincing. This is the fourth time such an order has been made. In a country where the order of the IGP carries the same efficacy as singing to a corpse and hoping it will dance, it is important the federal government swings into action immediately. While we condemn the illegal actions of the police force, we can’t also imagine our roads and vicinities without security personnel. Hence, we call for critical reforms in Nigeria’s police force. The entire police force is longoverdue for reform. Compare the year-long protests in Hong Kong

which resulted in two deaths, 7,300 arrests and over 2,600 injuries to the deaths that followed protests in Abeokuta and the sad video of Tiyamiyu’s father. Shutting down some stations won’t do. The IG must provide clarity. Will the alleged killer police officers be brought to book? What happens to other notorious police formations including the Ogudu Police Station, Awkuzu, in Anambra State, and Port Harcourt in Rivers State? After years of protests like the #EndSARS campaign, #killSARS is trending lately. People are now tired of crying out and now taking matters into their hands. In Portharcourt, for instance, cultists of different divisions flooded the street with axes and machetes in response to the killing of a young man in front of Wetland Hotel, Ughelli in Delta State. This is dangerous. To do nothing is to provoke mob action when next SARS officers misfire. President Buhari must lead by example with a radical action, beyond holding meetings with his security chiefs. Nigerians are living in fear from herdsmen, bandits, cultists, kidnappers, terrorists, and shockingly police officers.

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Wednesday 07 October 2020

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Wednesday 07 October 2020

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COMPANIES&MARKET

PZ Cussons posts first loss in 9 years as pandemic hurts revenue MERCY AYODELE

Z as a brand has been struggling to compete in the HPC business because of the entry of cheaper and unbranded alternatives to many of PZ’s brands that are fast becoming premium products. PZ Cussons Plc, one of the world’s biggest personal healthcare makers has seen its first loss in 9 years as revenue plunged. Fo r t h e y e a r e n d e d May 31st 2020, PZ Cussons posted a loss after tax of N7.2 billion, a 726 percent decline from a profit of N1.15bn made in 2018/2019. PZ Cussons has a unique calendar that runs from May 2019 to May 2020. The company’s revenue plunged 10% to N67bn in the business year, the lowest in 9 years compared to N74.3bn a year ago. The loss seems to be just COVID-induced but analysts say the company has had it long coming. Although the pandemic significantly impacted performance in Q4 as lower demand for its Home & Personal Care products in Q4 and all through the financial year dragged significantly on revenue, it is not the only driver for the loss. PZ as a brand has been struggling to compete in the HPC business because of the entry of cheaper and unbranded alternatives to

many of PZ’s brands that are fast becoming premium products considering the decline in consumer purchasing power. Cost of sales was also up 2% to N58.3bn from N57.2bn in the same period last year. Gross Profit for the period dipped 50% to N8.6bn in business period from N17.1bn in the prior period last year. PZ Cussons has also seen its share price crash to N4 as market closed on Friday from N5.65, its opening price as at January 2020 The company made a loss before tax of N7.9bn for the year end, a 511% decline from N1.9bn profit made in the same period last year. Administrative expenses also rose 31% to N5.4bn for the 2019/2020 period from N5.4bn a year ago. The foreign exchange

crisis as result of the pandemic also seems to have influenced the recorded loss as the company made an exchange loss of N945 million, a 112% increase from the N444 million loss recorded in the same period last year. FX illiquidity has definitely had an impact particularly in the final quarter. This means they probably have to source for dollars from expensive unofficial sources to finance purchase of inventory which would impact on material cost. The loss recorded by the company might have been aggravated by COVID-19 but profit has been on the decline in the last three years. The personal health care maker has seen profit plunge 40% and 48% for the year ended May 31st 2018 and 2019 respectively. The company only

recorded an increase in profit for the year ended May 31 2017 in the last 6 years as profit has been on a decline since 2013. Revenue has also been on a decline since 2017 as it declined from N80bn in 2017/2018 to N74bn in 2018/2019 and now hit its lowest in 9 years with revenue of N67bn. “Overall, the drag on performance remains lower demand from consumers in the face of declining purchasing power which forces them to opt for cheaper alternatives” Akinloye said. PZ Cussons Nigeria Plc is into the sales, manufacture and distribution of consumer goods and home appliances. Popular brands include Morning Fresh, Mamador, Carex, Cussons Baby, Premier, Robb, Venus, Joy soap, and Olympic milk.

Medplus raises awareness for PCOS, supports Nigerian women BUNMI BAILEY

igeria’s health and beauty retail pharmaceutical chain, Medplus Pharmacy, recently connected with audiences to spread awareness, dispel myths, and encourage women to get tested for the condition, Polycystic Ovary Syndrome (PCOS). With the month of September being PCOS Awareness Month, Medplus worked to raise awareness and showcase how Medplus Pharmacy can support women with PCOS. Joke Bakare, Medplus founder/CEO, said, “PCOS is a major condition that impacts several aspects of life for women, but yet, it tends to be under-recognized by women as they have no idea what their symptoms mean, and end up suffering in silence until they have difficulty getting pregnant or until they develop other complications from having PCOS. “As a pharmacy that deeply cares about our community and the wellbeing of Nigerian women, we found it vital to spread awareness of PCOS to encourage women to speak up about their symptoms, share their stories, and find a community with Medplus where they can always get support.” Using the hashtag, #PCOSWithMedplus, the pharmaceutical chain reached out to audiences to share their

Polo luxury unveils Cartier luxury wristwatches IFEOMA OKEKE

Farmnow.ng rolls out agro supplies incentive to empower Ogun SMEs KELECHI EWUZIE

gri-tech Company, Farmnow.ng has distributed fertilizers, knapsack sprayers, antibiotics, feed to 60 farmers across the city of Abeokuta, Ogun State to strengthen the push to solve the problem of food insecurity in Nigeria and help boost crop and animal production. Samson Odegbami, cofounder, Farmnow.ng while speaking at the empowerment programme for farmers tagged Project E-60 stated that the empowerment for rural farmers was borne out of the necessity to give back to society and increase food production in local communities for local

consumption. According to Odegbami, “Beyond giving back to the society, I believe it is important that as an organisation we contribute to solving the problem of food insecurity” “Hunger is a very critical problem in the country that needs to be solved. In addition to that, we believe empowering rural farmers will increase food production in their respective local community and enable them practice sustainable agriculture.” The Project E60 is an empowerment programme targeted at empowering farmers and also doubles as a commemoration of Nigeria’s 60th Independence Celebration. Odegbami added that the www.businessday.ng

farmers are trained on how to leverage digital technology for advanced agricultural production, adding that in a bid to fulfil their mission to distribute Agro-wealth and contribute to the nation’s food security, Farmnow.ng through various farm cycles created an investment platform for Nigerians in and out of the country. “Their Poultry, Tomato, Watermelon, Maize and other Livestock farms have served not just as a source for food and job creation but also as a secure platform to invest and get real value for funds over time”, he said. He further noted that Farmnow.ng is an agric investment platform poised to connect teeming work-

ing-class investors to rural farmers. We formulate collaborative farming solutions that give good returns to investors and empower farmers for increased and more profitable farm production Farmnow.ng is made up of young business executives and agric professionals with a shared passion for creating a sustainable agricultural food production ecosystem. Farmnow. ng brings together the various disjointed units of the food production system in Nigeria to create a more efficient system that consolidates our food security whilst providing optimal returns on investment for all stakeholders.

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stories with PCOS and its relevant symptoms, from irregular periods, difficulty getting pregnant, weight gain, to excessive hair growth. Women with similar symptoms and stories were encouraged to visit their doctor to get checked, and others were led to be supportive with women suffering from the symptoms. Senami Atika, marketing manager, Medplus, also said, “It has been amazing seeing women open up about their struggles with PCOS and sharing their stories. Seeing people learn and share the information with their sisters, friends, girlfriends, mothers, and so on was very inspiring and validates the work we do at Medplus Pharmacy, which is to support our community by forecasting their needs and preparing for the future of healthcare, lifestyle, and the nation’s wellness. “We encourage people to follow Medplus on Instagram @medpluspharmacyng, Facebook at Medplus Pharmacy and Twitter @ medpluspharmacy to read about people’s stories with PCOS and also stay up to date with health, beauty, fitness, lifestyle, and other general wellness products and tips.“ To learn more about how Medplus is raising awareness for PCOS and supporting women with the condition, follow the hashtag #PCOSWithMedplus.

olo Luxury, one of Nigeria’s frontline retailer of luxury watches has once again proven its commitment to satisfying customers’ crave for class and elegance with the new release of Cartier luxury wristwatches. Boasting a network of some of the world’s most affluent brands and individuals, Polo’s legacy for ground-breaking innovation is reiterated through their exclusive partnership with French watch brand, Cartier. A French jeweller founded by Louis-Francois in 1847, Cartier supplies luxurious treasures, mixing modern design with timeless flair. The brand is recognised for its high-quality workmanship and royal heritage. In a statement, it was learnt that Cartier was the supplier to the Royal Court of France @Businessdayng

during Napoleon III’s reign, and described by Edward VII as “the jeweller of kings, and the king of jewellers”. With flagship locations in Paris, London, New York, Tokyo, and Shanghai, among others, Cartier has one of the most enviable claims in horology history—the purveyor of the world’s first men’s wristwatch, the Cartier Santos. Today, Cartier has a strikingly beautiful catalogue of some of the most sought-after timepieces in existence, including the Cartier Tank Solo, The Cartier Clé De Cartier, and the Pasha De Cartier. Historically, the Pasha De Cartier is an iconic timepiece, originally designed for the Pasha of Marrakesh in 1933, and considered to be the first waterproof watch from Cartier. In 1985, the legendary watch designer Gérald Genta designed a version of the Cartier Pasha whose form is still celebrated.

Wednesday 07 October 2020

BUSINESS DAY

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Boosting cocoa, oil palm production to drive Nigeria’s economic growth JOSEPHINE OKOJIE

n the 1960s and 70s, cocoa, oil palm, and groundnut were Nigeria’s main drivers of economic growth and development. But the discovery of crude oil at Oloibiri in present-day Bayelsa State, a few years to Nigeria’s independence, changed Nigeria’s cocoa and oil palm narratives, prompting the country to lag in the production of these commodities. Long years of disinvestment and the inability of Africa’s most populous countr y to sustain and improve its production of cocoa and oil palm led to a sharp decline in productivity. Ageing trees, lack of improved seedlings, and inadequate finance are other major reasons for Nigeria’s loss of ‘cocoa power’ and oil palm status in the global market. In fact, Nigeria was unable to supply large quantity of cocoa to the world in 2015 despite the rise in the prices of ICE and Liffe cocoa beans. However, succour may have come to Africa’s biggest

economy as the Federal government is making efforts to tap into the value chain in the palm oil and cocoa industry - which can create millions of jobs and earn foreign exchange for the country. The government is seeking to stimulate sociale c o n o m i c d e ve l o p m e nt through the Central B a n k o f Ni g e r i a ( C B N ) intervention programmes, Cocoa Research Institute of Nigeria (CRIN), and the Nigeria Institute for Oil Palm Research (NIFOR). The move by the g ov e r n m e n t t o re f o c u s on cash crops and their value chains has received commendation from stakeholders. The Cocoa farmers association says the government has released over N700millon through the apex bank Anchor Borrowers S cheme to 1,221 co coa farmers in 10 producing states with each farmer getting N592,332 as inputs and in cash for maintaining about three hectares of existing cocoa plantations. Adeola Adegoke, president o f t h e C o c o a Fa r m e r s

Association, says N197,444 is allocated per hectare, and three hectares are calculated for each farmer. The loan which Adegoke says attracts a nine-percent interest rate payable within 18 months would increase beneficiaries’ productivity from about 350kg of cocoa beans per hectare to about 600kgs. He believed that such

interventions would help to restore Nigeria to the path of cocoa productivity. However, Anna Muyiwa, a plant biotechnologist a t t h e C o c o a R e s e a rc h Institute of Nigeria (CRIN), said the country must start rehabilitating old cocoa plantations and develop more hybrid varieties to boost local production apart from supporting farmers with

‘Aggregation is the gateway to success in Nigeria’s agric sector’

OLAMIDE ALABI- JACOBS is the chief executive officer of UMèRA, an agribusiness that focuses on livestock and crop production. In this interview with ANTHONIA OBOKOH, she spoke on how she delved into the agricultural sector and how she has successfully grown her agribusiness. What aspect of farming are you involved in? eareintolivestock production; broilers for meat and they are raised organically without any vaccines, antibiotics, or growth hormones. We also raise layers for egg production, cattle, and fishery. We just started working on the first phase of our cashew plantation that will be sitting on 20 million square meters of land. What was your motivation to become a farmer? My father owns a poultry farm and cashew plantation which I had to work on. At first, it wasn’t really an enthusiastic idea but when I started working on it, I enjoyed it. I would travel at least twice a week to visit the farm. I enjoyed it so much I decided to start mine. Sometimes we love things

that we least expected. It’s best not to frown at opportunities because we never know what we would love. What value are you bringing to the agricultural sector? Aggregation! My vision is to see as many people as possible come together to achieve greatness in agriculture. There is a misconception that farmers are poor, they appear so because like every other business numbers matter, and it not easy for one man to farm on more than one or two acres at a time. The scale is necessary. Mechanization is something that most of the farmers don’t have access to, in order to scale up. This is why aggregation is key. Recently at UMèRA we launched a project called the Nutty Park Cashew Plantation. So far we have had over 100 people invest in this project and we are working www.businessday.ng

Olamide Alabi- Jacobs

so hard to make sure that this project is the best cashew project on the continent. Are you satisfied with Ni g e r i a’s a g r i c u l tu ra l narrative when compared to other emerging economies? I think we are getting better daily. We lost focus on agriculture in the past but I will say that I’m impressed by the ongoing developments in the sector. At UMèRA we launched the nutty Park Cashew Plantation recently and we have over 100 investors, which is impressive and we are

expecting hundreds more to invest. Simply means people are interested in agriculture as long as it adds value with safe investment packages. I believe agriculture is a single aspect of life that we cannot do without. Of what value is money if you cannot find food to buy? What are the major agricultural challenges you have identified and how best can we solve them? There are areas of agriculture that need scaling up so we don’t need to import some agricultural produce. Recently, there was a corn crisis in Nigeria and it really affected poultry farmers negatively. The government also banned the importation of maize during the crisis and later gave permission to a few companies to import. This inconsistency in policymaking goes a long way to damage businesses.

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finance. “We need to rehabilitate our old cocoa trees in all cocoa producing states. A completely rehabilitated cocoa plantation of proven clone will produce as much as 2.5 tons per hectare,” Muyiwa said, stressing the need to develop more hybrid varieties. For oil palm, as of April 2020, the apex bank said

it had disbursed a total of N34.3billion to major oil palm companies through its intervention programmes to support the industry with a plan to plant 100,000 hectares of palm oil trees by 2025, from 20,000 hectares in 2020. However, experts call for support in the area of land clearing and the certification of seedlings from research institutes to ensure quality as well as free distribution of seedlings for farmers. “Investment in oil palm re q u i re s h u g e f i n a n c e. Fu n d i n g i s o n e o f t h e major challenges we face in the industry,” said Henry Olatujoye, national president, National Palm Pro duce A s s o c i a t i o n o f Ni g e r i a (NPPAN). “The traditional processing has been very inefficient because of low technology, which has contributed to the shortage of palm oil for industries,” he said. With a well-developed palm oil and cocoa industry, Nig e r i a ca n e x p o r t t h e products and earn huge foreign exchange, thereby reducing the crude oil shocks on the economy, experts say.

HO Corn opens e-commerce trading platform for maize JOSEPHINE OKOJIE

O Corn Nigeria’s largest private farm has launched an e-commerce platform to sell fresh and dry maize to individuals and industries across the country. Harrison Andrew, founder, and CEO of HO Corn said that the launching of the ecommerce platform is to ensure that Nigerians can buy fresh succulent maize and have it delivered f ro m t h e f a r m t o t h e i r doorsteps at no cost. Andrew says that HO CORN ’s 30,000 acres of maize farm located in Oyo state is op en to supply nationwide to industries and individuals willing to buy high-quality fresh and dr y maize at affordable rates. Als o, t he fir m which recently disrupted the country’s agric-tech space is offering sensational investment offers to investors. @Businessdayng

The agri-tech firm which is strictly focused on the cultivation of maize is offering investors a whopping 50 percent return on investment (ROI) in six months. According to Mohammed Kolawole Salau, the c o m p a n y ’s b u s i n e s s development consultant, the platform is in line with HO CORN’s goal to ensure food security and in line with the country’s diversification quest. Interested individuals or organisation can purchase fresh or dry maize directly from the e-commerce platform by visiting www. buycorn.ng to make their orders.

Wednesday 07 0ctober 2020

BUSINESS DAY

Wednesday 07 0ctober 2020

BUSINESS DAY

INTERVIEW

‘We are committed to provision of clean, safe, reliable electricity’ AHMAD SALIHIJO AHMAD, managing director/chief executive, Rural Electrification Agency (REA), in this interview with JOHN OSADOLOR and HARRISON EDEH, speaks on the agency’s plan to electrify the rural areas, communities, school campuses, among other places with a view to creating enabling economic environment for national development. Excerpts:

indly talk us through your programmes and policies in REA and their implementation to achieve set targets and objectives. The Agency’s mandate is the provision of electricity in unserved and underserved communities across the country to catalyze economic growth and improve quality of life for Nigerians. REA is currently implementing the Nigeria Electrification Project (NEP), Energizing Economies Initiative (EEI), Energizing Education Programme (EEP), Rural Electrification Fund (REF), Energy Database and Capital projects as well as creating the enabling environment for private sector investment in electrification. With a broad understanding of the energy needs of different consumer groups in the country, we continue to deliberately design programs to cater to these needs and close the energy gap. To impact local economies, we have the Energizing Economies Initiative designed to support the rapid deployment of offgrid electricity solutions to provide clean, safe, reliable and affordable electricity to economic clusters (e.g market places, shopping centres, industrial areas). To adequately cater to the energy needs of unserved and underserved communities across the nation, the Agency secured funding from the World Bank ($350m) and the African Development Bank (AfDB) ($200m). The objective of the NEP is to deploy solar hybrid mini grids to serve over 2 million Nigerians and over 10,000 SMEs as well as deploy solar home systems to 1.5 million households. We understand how pivotal electricity access in institutions of learning and hospitals is. Under the NEP, we have the Energizing Education Programme (EEP), a Federal Government programme designed to improve educational outcomes through the deployment of clean, safe and reliable energy to 37 Federal universities and 2 affiliated teaching hospitals. The Federal Government is conscious of the need for equitable access to energy. With the Rural Electrification Fund (REF) being implemented by the REA, the objective is to aid equitable access to electricity across Nigeria with grants given to private sector developers using a PPP model. At the REA, we also implement Capital Projects. These are primarily grid-extension projects the Agency had been traditionally known for. It involves grid extension and injection substation projects and now increasingly, solar mini grids, deployment of solar home systems, installation of solar street lighting across all 6 geopolitical zones. These impacts are being felt by Nigerians in the area of academic growth, rural development, economic growth as well as health care and agriculture improvement. The Agency is determined to close the energy gap in the country

by deploying electrification projects in our rural communities using different energy sources. There are about 100 million off-grid Nigerians, and several interventions have been initiated by your agency to give them access to power. Could you speak further on this? Powering Nigeria is a goal our Agency have continued to approach, one community at a time. The REA is the Implementing Agency of the Federal Government tasked with electrification of rural and unserved communities. These communities are our primary constituents because the electrification of rural communities ultimately energizes the local economies of such communities through the usage of productive use assets by community members. Achieving REA’s Vision requires a focus on bringing electricity to unserved and underserved communities through a sustainable market. This will entail both direct implementation and coordinating broader electrification effort such as the following: • Grid Extension (Capital Projects) The core objective is to provide affordable, easily accessed, safe and efficient electricity supply to the populace especially in rural settlements across the nation. The projects are broken down into the following categories; solar minigrids, deployment of solar home systems, deployment of solar street lighting, injection substations, and grid extension projects across all 6 geopolitical zones. • Nigeria Electrification Project (World Bank and African Development Bank) The NEP is the largest off-grid electrification programme in Africa. FGN has secured funding for from both the World Bank ($350m) and the African Development Bank (AfDB) ($200m) for three components. The NEP will develop solar hybrid mini grids to serve over 2million people and over 10,000 SMEs as well as Deploy solar home systems to 1.5million households and Improve educational outcomes by electrifying Federal Universities and affiliated teaching hospitals as part of the EEP. So far, we have deployed energy infrastructure to off-grid Nigerians in 3 communities: Rokota in Niger State, Akikpelai and Olobiri in Bayelsa State, with more underway. • Rural Electrification Fund (REF) The Rural Electrification Fund (REF) is being implemented by the REA for the provision of equitable access to electricity across Nigeria, to maximize economic, social and environmental benefits of rural electrification grants, to promote off-grid electrification and to stimulate innovative approaches to rural electrification. REF projects are administered using a Public Private Partnership (PPP) model. Under the First Call of the Rural Electrification Fund (REF), over 19, 000 Solar Home Systems have been

deployed to serve Nigerians off-grid, while 12 communities have been energized through solar hybrid minigrids. Following the success of the First Call of the REF projects, the 2nd REF Call is in progress. The Agency is currently engaging interested energy developers to help drive this process and deploy more interventions targeted at off-grid Nigerians. • Energizing Education Programme (EEP) The Energizing Education Programm (EEP) aims to power 37 universities and 7 teaching hospitals by providing independent power plants, 10,400 street lights will be installed across campuses in Nigeria for illumination and security, upgrade of existing distribution networks and world class renewables training centre at every university. • Energizing Economies Initiative (EEI) The Energizing Economies Initiative (EEI) supports the rapid deployment of off-grid electricity solutions to provide clean and consistent power to economic clusters in Nigeria. Over 300 clusters have been identified for electrification across the country in different phases. • Gender Mainstreaming Gender inclusion is a core objective of the REA to promote and drive female participation in electrification initiatives. • Rural Electricity Users Cooperative Society (REUCS) The Electricity Users Cooperative Society is an initiative of the REA that is aimed at mobilizing benefiting communities to achieve sustainability of electrification projects. You have been very determined on facilitating your key programmes such as energizing market and education, could you speak to us on the success of such programs? As you are aware, education and local economies are two critical sectors that improves per capita productivity and improves national development. As an Agency that believes in the strategic use of off-grid technologies, these are two sectors we currently have programmes for. The Energizing Economies Initiative (EEI) and Energizing Education Programme (EEP) has enabled the deployment of off-grid solutions to economic clusters and Federal Universities across the country. So far under the EEI, over 12,000 shops are now receiving clean, safe, reliable and affordable electricity supply. The Pilot Phase of the Energizing Economies Initiative has commissioned the Sura Shopping Complex Independent Power Project in Lagos state powering 1,047 shops, as well as the Ariaria Market Independent Power Project, Aba, Abia State, powering over 4,000 shops and has launched over 6,000 energized shops at Sabon Gari market, Kano State with more connections in the pipeline. Deployment is currently ongoing in markets under Phase 1 of

the EEI. This phase is expected to provide clean, safe and reliable power to 12 markets across Lagos, Kano, Edo, Ogun, Ondo and Oyo. The REA plans to create an enabling environment where the private sector developer handles all the project delivery steps from inception to conclusion. The Phase 2 rollout plans are currently in view and conversations have begun between the developers and State Governments. Secondly, the first phase of the Energizing Education Programme (EEP) funded by the Federal Government consists of 9 universities and 1 affiliated teaching hospital. Two projects have been commissioned; a 7.1 MW Solar Hybrid Mini Grid at Bayero University, Kano and 2.8MW Solar Hybrid Mini Grid at Federal University Ndufu-Alike Ikwo, Ebonyi State (FUNAI). In addition, 1.6 Federal University of Petroleum Resources (FUPRE), Delta State, 1.12MW Abubakar Tafawa Balewa University, Bauchi are completed and ready for commissioning while other projects under phase 1 of the EEP are at various stages of completion. The Programme will provide reliable power supply to over 580,000 students, 80,000 teaching and administrative staff, 1,400 doctors and 5,500 medical professionals. As a result, 860 harmful diesel-fired generators will be decommissioned. Phase 2 and phase 3 of the EEP will

be funded by the World Bank and African Development Bank through the Nigeria Electrification Project. One by one, some major government outfits and private sector companies are ditching the ongrid power for off- grid power. Could you kindly share your thoughts on how REA is steering this development? The REA through its several programmes and initiatives provide the enabling environment for private developments to catalyze off-grid energy development and attract investments. The Agency creates an enabling environment for private sector-led projects, which includes conducting prefeasibility assessments, energy audits, enumeration, data analysis, identification of qualified private sector developers, and project stakeholder engagements. Apart from the implementing role being played by the REA, our activities and programmes also helps encourage industry collaboration, knowledge exchange as well as investments. We do this in collaboration with our development partners as well as key private sector developers. These activities being driven by the REA have continued to educate and enlighten critical stakeholders in government and private sector on the reliability and sustainability of off-grid technologies. REA have continued to stimulate the renewable energy sector in Nigeria while putting developers on their toes to provide and deploy industry-standard off-grid

solutions, per time. Our universities and hospitals are experiencing your key interventions. Talk us through further on this, and whether there are concerns. Education and quality health care are backbones to economic development. The REA through the Energizing Education Programme (EEP) aims to provide clean and reliable electricity in Federal Universities and affiliated Teaching Hospitals. We have seen the successful completion of projects in Bayero University, Kano, Alex Ekwueme Federal University, Ndufu-Alike Ikwo, Ebonyi State with other projects under phase 1 at various stages of completion Also, since the beginning of the Covid-19 pandemic, the REA has deployed 4 solar mini grids to Isolation Centers in Gwagwalada and Ogun State as well as the NCDC Laboratory in Lagos in its bid to support the efforts of the FG in containing the Covid-19 pandemic. Following the impact of the Agency’s intervention in 4 COVID-19 Isolation Centers, a series of engagement between the REA, the World Bank, Federal Ministry of Power, the Federal Ministry of Health and the Nigeria Center for Disease Control (NCDC) plan to scale up this intervention by energizing 100 additional COVID-19 centres (Phase 1) and 400 Primary Healthcare Centres (PHC) (Phase 2) across the nation. We intend to scale up on all these interventions to cover more universities and health facilities across the country.

There are still concerns that off-grid solutions are still on the high side on the back of duty concerns. Could you speak on this development? Are there any discussions with the government on pruning down the duty cost? Just like we have in many countries deploying mini-grids, we continue to scale barriers as the industry develops. Tariff, for example, can be seen as a barrier, but not to the extent of it crippling the growth of mini-grids. Another barrier we are working fervently to scale is on importation of renewable energy components. Players in the industry have expressed their views on the removal of VAT for solar and renewable energy companies. This is actually a policy issue that we are currently collaborating with other relevant agencies to solve because we believe that if the government continues to drive beneficial policy issues around renewable energy, it will help bring down the cost of renewable energy deployment for private use, business use as well as deployment in communities. East Africa tells a beautiful story of advancing off-grid energy solutions; are their chances we could adopt their model of success? Off-grid solutions are witnessing a rise in adoption in Nigeria with investments coming in from Donor Organizations such as the World Bank and African Development Bank. I believe Nigeria is setting the pace in the advancement and deployment of off-grid solutions in Africa. Other African countries can learn a lot from what Nigeria is doing.

With our unique history of energy poverty in Nigeria, the Nigerian government have taken steps towards steering the nation on the path to improved energy access. The programs being deployed by the REA, as mandated by the Federal Government are data-driven, locally developed but globally appealing programs designed to solve our energy problems, sustainably. With the franchise regulation by the Nigerian Electricity Regulatory Commission, are there plans to incentivize and woo more Nigerians into the off-grid market? That is the idea. NERC’s franchise arrangement caters to the electricity distribution sphere of influence and covers (i) metering, billing and collection; (ii) total management of electricity distribution function in a ring-fenced area; (iii) total management of distribution feeders including billing and collection; (iv) loss reduction and provision of embedded generation; and (v) any other innovative franchise models developed by the Disco. As a relatively novel technology, the floodgates are open to energy developers in the off-grid market. This is helpful as deliberately aids competition in the off-grid market. With a competitive market, service delivery and quality of deployed systems automatically improves. Remember that under the Nigeria Electrification Project (NEP), there are already well-set funding models such as the Output Based Fund (OBF) for the sale of solar home systems to homes and businesses across Nigeria and the Performance Based Grant (PBG) for the deployment of mini grids to unserved and underserved commu-

nities in Nigeria. All these are open to developers in the off-grid market to key in and access funding targeted at powering Nigeria. There are lots of investment opportunities in the off-grid electricity market; what is the REA message to investors who may want to switch investments to East Africa? I would say to those investors, stay in Nigeria and keep investing. The Federal Government is doing a lot towards simplifying ease of doing business in the country. Nigeria is attracting investment not just in the energy space but also in other sectors. The investment opportunities in the Nigeria off-grid market is big. As you are aware, asides having the largest economy in subSaharan Africa, Nigeria is one of the best locations in the world for the deployment of mini-grids and solar home systems. Currently, the energy gap in Nigeria is huge. Millions of MSMEs, industries and agencies are being powered by carbon emitting generating sets. What this means is that the investment in clean, safe and reliable energy in Nigeria creates an option for a switch to cleaner, more sustainable energy for consumers. Also, through critical agencies such as REA, the Nigeria Electricity Regulatory Commission (NERC) as well as the Federal Ministry of Power, the Federal Government of Nigeria is deliberately providing an enabling environment for off-grid investors as well as private developers to flourish. We also have the advantage of global attention through funding and technical support in the Nigeria off-grid space. Very few African countries currently deploys forward-leaning, investor-friendly programs as we do in Nigeria. There is significant rise in the adoption of off-grid solutions with lots of return of investment. Therefore, we keep seeing more private developers applying into REA’s several programmes. In the recent past, you advanced move in attracting about N350 million from the World Bank and another fund from the ADB; could you talk us through that procedure and the success recorded? The procedure is simple, we showed them the potentials of investing in Nigeria and the growth of the energy sector and they agreed with us. Since the investment from these banks under the Nigeria Electrification Project, several activities have taken place to ensure the success of the program. The World Bank and the Africa Development Bank are two important stakeholders supporting the Federal Government’s Nigeria Electrification Project (NEP). NEP is private sector-driven initiative designed to provide electricity access to households, micro, small and

medium enterprises in off grid communities across the country through renewable power sources. Currently, NEP is being funded by the World Bank through a $350 million loan and a $200 Million loan from the African Development Bank. The first PBG completed project under the NEP by PowerGen Renewable Energy with 157kw capacity was commissioned on 7th December, 2019 in Rokota Community, Edati Local Government Area, Niger State. The second and third NEP PBG Mini-Grid projects with capacities of 67.32kW each were commissioned on 13th April 2020 at Oloibri and Akipelai communities, Bayelsa state by Renewvia Solar Nigeria Ltd. A total of 921 connections have been achieved so far in households, MSMEs and Public facilities and a total capacity of 198.64kW of energy deployed. In addition, Over 68,000 solar homes systems have been installed in households, MSMEs and public facilities by the eleven (11) companies who have signed grant agreements. The capacities of the system ranges from 6Wp to 75Wp translating to over 2,443kW of installed capacity across the 36 states in Nigeria. Under the NEP-AfDB, the REA is commencing Phase I of the productive use appliances and equipment for off grid communities with seven (7) existing mini grid sites to demonstrate the effectiveness of the productive use component in rural economies and to ascertain the optimal business models and subsidy designs to be deployed in the subsequent phases of the program roll out. Developers of operational mini-grids were invited to indicate interest by submitting responses to an Application Survey launched on the REA website. Nineteen (19) applications were received, of which ten (10) sites were shortlisted for field studies (7 shortlisted and 3 reserve sites). Field studies have been completed to validate the basis for investment decisions. The approvals for grant agreements will elicit the launch of the Component 2 Phase I by the end of October 2020. So far, private developers have been accessing these funding windows to deploy mini-grids as well as solar home systems. In addition, We have brought together private developers and other energy stakeholders to ensure the success of the program. Kindly share with us your message to Nigerians, especially the rural dwellers, as we celebrate 60 years since independence. Nigeria has come a long way since independence. We have witnessed growth and the Federal Government is doing its best towards developing rural communities, especially by provision of clean, safe and reliable electricity through the REA. We are resilient, determined and hardworking people. Therefore, we should ensure we only focus on moving our country forward to greater heights.

Wednesday 07 October 2020

BUSINESS DAY

FEATURE

Proposed PIB alone cannot insulate Nigerian economy from oil volatility …Reforms incomplete without amending constitutional provision barring ‘rainy day’ fund ISAAC ANYAOGU

igeria has been unable to pass a petroleum industry law for nearly 20 years but the 9th assembly due to its rancour-free relationship with the executive may succeed in turning it into a law but without amending the constitution to allow for saving some oil revenues, the country remains susceptible to shocks from a volatile oil market. The 252-paged Petroleum Industry Bill, 2020, covers governance of institutions in the sector, the role of the minister, establishes two regulatory agencies, transforms the national oil company into commercial entity, clarifies relationship between host communities and oil companies and provides a new fiscal framework for the sector. Some of the provisions have interested industry observers. For example, it is legally putting an end to subsidies on petrol, the NNPC will become a limited liability company with commercial focus, open up oil sector contracts enhancing accountability and prevent companies from hoarding leases. However, analysts say while these are necessary reforms, current efforts to reform should include ways to prevent mistakes of the past like an inability to save for a rainy day in periods of abundance to insulate the economy from a volatile oil market. “it appears to be quite a comprehensive piece of legislation, which articulates many issues. However, a few issues such as financial savings are not dealt with,” says Ayodele Oni, energy lawyer and partner at Bloomfield law firm. “Although, there is the Nigerian Sovereign Investment Act (NSIA), the PIB could do more to specifically complement the NSIA Act as regards oil wealth savings. Also, more could have been done in the PIB relating to transparency of revenues,” Oni said. Price volatility is a common feature of the oil market, exposing oil-dependent countries like Nigeria to regular economic crises when prices tumble. A lack of transparency in managing oil incomes fuels corruption and communal agitations in the Niger Delta. Between May 1987 and May 2020 according to the Nigerian Extractive Industries Transpar-

Source: NEITI ency Initiative (NEITI) data, the oil market has seen about half a dozen periods of boom and busts with significant consequences to the Nigerian economy. Oil prices started rising in 1990 in response to the Iraqi invasion of Kuwait on August 2, 1990 and reached a peak of $35.92 per barrel in Octoer 1990. Keeping with the volatile behaviour, oil prices started falling as the U.S.-led coalition experienced military success against Iraqi forces, concerns about longterm supply shortages eased and prices began to fall and dropped briefly below $20 per barrel in March 1991. Following this, oil prices were in the range of $18 to $22 per barrel, but dipped to $14.51 per barrel in December 1993. Subsequently, oil prices remained below $20 per barrel until March 1996. From April 1996, oil prices were between $18 and $22 per barrel. The onset of the East Asian financial crisis brought in a crash in oil prices, with prices reaching a low of $11.28 per barrel in December 1998. The Asian financial crisis, was a sequence of currency devaluations and other events that began in July 1997 and spread through many Asian markets. The currency markets first failed in Thailand as the result of the government’s decision to no longer peg the local currency to the U.S. dollar (USD). Currency declines spread rapidly throughout East Asia, in turn causing stock market declines, reduced import revenues, and government upheaval. After the crisis, oil prices started rising again and by January 2003, they were above $30 per barrel. This increase in prices continued and oil prices were www.businessday.ng

above $100 per barrel in March 2008. They remained above $100 for seven months, peaking at $147 per barrel in July 2008. According to the EIA, the main drivers were a strong world economic growth driving growth in oil use, moderate supply growth, increased interest and participation from investors and financial entities without direct commercial involvement in physical oil markets. Oil prices fell sharply from October 2008 as a result of the global financial crisis and reached $39.16 per barrel in February 2009. It started with a subprime mortgage lending crisis in 2007 and expanded into a global banking crisis with the failure of investment bank Lehman Brothers in September 2008. Huge bailouts and other measures meant to limit the spread of the damage failed and the global economy fell into recession. Thereafter, oil prices started rising again and crossed the $100 per barrel mark in March 2011. Another period of oil price collapse started in late 2014. Following increased production from shale producers,oil prices fell from $103.59 per barrel in July 2014 to $59.29 per barrel in December 2014. This decline continued and prices reached a trough of $30.32 per barrel in February 2016. Oil prices increased and were above $50 per barrel between 2018 and 2019. However, the price war between Saudi Arabia and Russia and the onset of the COVID-19 pandemic led to a bust. Oil prices declined from $67.04 per barrel on January 2, 2020 to $37.71 per barrel on June 2, 2020, a 44 percent fall. At each period of boom, Nige-

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ria was reckless in its spending and at every bust, the economy was on its knees. “With high prices and steady flow of cash providing an illusion of prosperity, decision makers of resource-rich countries usually increase government expenditures and make other choices that cannot be sustained by low commodity prices,” NEITI NEITI said that in addition, natural resource dependence weakens accountability mechanisms, as extractive states (as opposed to tax states) are inclined to white-elephant projects, leakages, state capture, and graft. This is why it has proposed a healthy minerals savings fund, the size of which should reflect not only the volume of revenues from mineral resources, but also the size of the national economy. Nigeria is already sold to the idea of saving some oil windfalls but the funds are mostly inadequately ringfenced, and are too tiny to fully serve the intended purpose. At the thick of COVID-19, Nigeria’s three ‘rainy day’ funds Stabilisation Fund, Excess Crude Account, Nigeria Sovereign Investment Authority (NSIA) - had about $2.25 billion, which can fund about 7.7 percent of the revised 2020 federal budget. This compares poorly with Norway, with a sovereign wealth fund worth more than $1 trillion. To assuage the impact of COVID-19 on government’s earning, Nigeria withdrew $150million but Norway cashed $37b. Norway’s withdrawal ($37bn) is about 25percent higher than the Federal Government’s N10.5trillion 2020 budget. However, Nigeria’s challenges are more fundamental. NEITI suggests amending Section 162 (1)of the 1999 Constitution which @Businessdayng

prescribes that government income, apart from personal income tax, should be placed in the Federation Account and shared among the Federal, State and Local Governments. Former president Olusegun Obasanjo began the Excess Crude Account in 2004 to save oil revenues above income benchmarks and state governors balked. In reality, apart from spending pattern often accused of being frivolous, many states are challenged by today’s problems so the country needs to earn more money. NEITI also recommended abolishing the 0.5percent Stabilisation Fund and the ECA then transferring the balance in those accounts to the NSIA. The transparency watch dog further advised Nigeria to abolish the Oil Price-based Fiscal Rule (OPFR) where revenue in excess of oil price benchmark is saved and replace it with mandatory saving of a percentage of daily oil production like Angola does, saving proceeds from 10percent of its daily production. This ensures savings at all times, whether prices are high or low. Nigeria can save proceeds of between 5percent and 20 percent of its daily oil production. With this, Nigeria could easily save between $1b and $3b every year even in period of low oil prices. NEITI further recommends transferring the proceeds from the percentage of daily oil production to NSIA to invest in easily convertible instruments as well as raising the NSIA’s Stabilisation Fund from 20 to 40 percent and sharing dividends from NSIA’s earnings every year. Nigeria has reviewed its Value Added Taxes and recently passed a new company administration law. In addition, it must boost non-oil exports which according to the Central Bank, increased from $4.6b in 2018 to $10.4b in 2019, bumping non-oil export to 16 percent of total exports ($64.9b) in 2019. “This is a good pointer to what is feasible. It will be important to further diversify sources of exports and foreign exchange earnings by boosting not just raw but processed agricultural and solid minerals exports, fast-tracking the export processing zones and providing reasonable incentives to attract investors to them, and introducing fiscal, monetary and industrial policies that will make the country competitive for direct and portfolio investments,” NEITI said.

Wednesday 07 October 2020

BUSINESS DAY

BANKING

Share your experience at banks with us via: hope.ashike@businessdayonline.com

CBN, banks in ambitious move to close financial inclusion gap among women HOPE MOSES-ASHIKE

The Framework released by the CBN was developed in conjunction with the Financial Inclusion Special Interventions Working Group (FISIWG), EFInA, and Women’s World Banking (WWB). The Framework identifies the key barriers to attaining this goal, frames the strategic imperatives and recommendations required to overcome these barriers, and sets the stage for the formulation of a set of actions that are implementable, feasible, and trackable. This blueprint will have a separate implementation plan that includes the specific roles and responsibilities of all relevant stakeholders in improving access to finance by women in the country. The goal of attaining the financial inclusion of Nigerian adult women and men at equal levels by end 2024 is ambitious. However, the CBN has provided indications of what would be required to achieve the ambitious overall financial inclusion target. These include product development, financial education and consumer protection, the leveraging of digital platforms, and the proliferation of agent networks. An ambitious financial inclusion target cannot be reached without closing the gender gap; this entails addressing these requirements, and others, with a gender lens. As part of efforts to give Nigerian businesses access to cheap credit, the Apex bank last month after the two day Monetary Policy Committee (MPC) meeting held in September, surprisingly cut its benchmark interest rate by 100 basis point to 11.5 percent from www.businessday.ng

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The plan while laudable is very ambitious given the historical progress made in achieving financial inclusion as well as the current economic situation. Typically a slowdown in the economy results in more people being financially excluded

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he ultimate objective of Nigeria’s Central Bank within five years of second administration of Godwin Emefiele, governor of CBN, is to ensure that 95 percent of eligible Nigerians have access to financial services by 2024. To achieve the target, there is need for closure of the gender gap in the country. The 2018 Enhancing Financial Innovation and Access (EFInA) access to finance survey in Nigeria shows that the national financial inclusion rate was 58.9 percent of women compared with 67.4 percent of men, or a gender gap of 8.5 percent. is planning to move financial inclusion gender gap from 8.5 percent (based on 2018 data) to no gender gap in 2024. The Bank disclosed this in the Framework for Advancing Women’s Financial Inclusion In Nigeria released last week, specifically September 29, 2020. Financial inclusion is all about individuals and businesses having access to useful and affordable financial products and services that meet their needs, including transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way. Presently, nearly one billion women around the world do not have access to formal financial services. According to the World Bank’s latest Global Findex Database, 58 percent of women had a bank account in 2014 versus 47 percent in 2011. But on the flipside the gender gap between men and women’s access to financial services in developing economies stands still at nine percentage points. That gap is even wider in some regions, 18 percent in South Asia, and in the Middle East, where men are twice as likely as women to have an account. Given the persistency of the gender gap in financial inclusion, members of the Alliance for Financial Inclusion (AFI), including Nigeria, committed in 2017 to the Denarau Action Plan to increase women’s access to quality and affordable financial services globally — bridging the financial inclusion gender gap. The Denarau Action Plan targets to accelerate the progress of women’s financial inclusion by halving the financial inclusion gender gap across AFI member jurisdictions by 2021. The Plan outlines ten steps to support the commitment of AFI members to close the gender gap in financial inclusion.

12.5 percent in May 2020. However, Gbolahan Ologunro, a research analyst at Lagosbased CSL Stockbrokers said, “the recent decision by the MPC to reduce the Monetary Policy Rate (MPR) is aimed at aligning market rates with the MPR given the current wide divergence. More importantly, this corroborates the apex bank’s agenda in stimulating credit creation in the economy through reduction in lending rate amid declining output. Recall the CBN reduced the interest on savings deposit to 10 percent of MPR from 30 percent

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in order to drive down cost of funds for DMBs and in turn support lower lending rates. With this decision, the interest rate on savings accounts will trend further downwards. However, this may not translate into any meaningful improvement in loan creation in the economy, as banks will likely remain cautious in expanding their loan book due to the multiplicity of headwinds in the operating environment”. More, so, the CBN reserves 60 percent of its N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF) for women entrepreneurs. Some of the Nigerian banks have tailored their products and services to meet the financial needs of women. In a bid to promote best practice and support women entrepreneurs globally to drive change, economic expansion, and advance communities around Africa, Access Bank Plc through the W Initiative has deepened its relationship with female entrepreneurs in Nigeria. Wema Bank Plc recently partnered with insurance AIICO Insurance Plc and AIICO Multishield Health Management Organisation (HMO), to provide better healthcare services for its women. In line with the bank’s initiative, the partnership seeks to enhance the lifestyle and general well-being of women within the community. Ecobank Nigeria on July 2020 unveiled a special loan package for female entrepreneurs in the country. The Ecobank Female Entrepreneurs’ Initiative (EFEI) @Businessdayng

loan is specially designed by the bank to financially empower female business owners and entrepreneurs in the country. First Bank of Nigeria has reiterated its commitment to empowering women through its FirstGem product and other array of services. Guaranty Trust Bank plc, recently partnered African-focused entrepreneurship accelerator, She Leads Africa (SLA) and the Work in Progress! Alliance (Oxfam and VC4Africa) to launch the She Leads Africa Accelerator, a 3 month program designed to identify, support and fund the next generation of Nigeria’s brightest female entrepreneurs. Women’s financial inclusion is not only a powerful force in the economy and in society: it is a particularly powerful force. While both men and women benefit from financial inclusion, there is evidence that economic inequality falls more when women have greater access to finance than when men have greater access, the framework stated. Responding to the CBN’s move, Bunmi Lawson managing director/CEO, EdFin Microfinance Bank Limited, said the CBN should be commended for focusing in the gender gap when it comes to financial inclusion. Lawson who doubles as director of EFInA said the research based firm had done extensive research on the issue which shows that financial inclusion is worse amongst women across all geopolitical zones. “The plan while laudable is very ambitious given the historical progress made in achieving financial inclusion as well as the current economic situation. Typically a slowdown in the economy results in more people being financially excluded,” Lawson said. Specific, she said incentives have to be given to financial institutions as well as organisations focused on women to enable more women become financially included. It is not just about opening a bank account but also ensuring they have income in a sustainable manner to enable them use and benefit from having access to financial services. “Government for instance could run a program around maternal care to give discounts if a woman has a bank account and seeks to access government services. It is a step in the right direction Government should work with MFBs and non-traditional organisations focused on women to drive the implementation,” she said.

Wednesday 07 Octobermber 2020

BUSINESS DAY

FINANCIAL INCLUSION

& INNOVATION

Why less than 2% of Nigerian farmers receive payment through bank accounts

ENDURANCE OKAFOR

hile Nigeria’s agriculture sector contributes about 23percent to the country’s Gross Domestic Product (GDP) and employs over 50 percent of the working population in Africa’s most populous nation only about 2 percent of the farmers receive payment through an account. Study shows that there is a consensus on the linkages between financial inclusion, inclusive growth, and poverty reduction and thus financial inclusion of farmers is critical for agriculture-sector growth but most farmers in a country like Nigeria still do not have access to formal financial services. According to the World Bank, a national survey of smallholder households in Mozambique, Uganda, Tanzania, Côte d’Ivoire, Nigeria, and Bangladesh by the Consultative Group to Assist the Poor (CGAP) find that the proportion receiving payment into an account is less than 2 percent. Lack of trust, high cost of account maintenance, distance to the access point are some of the barriers to financial inclusion of farmers in Africa. Most rely on saving in kind or cash at home or depending on family and friends or informal service providers such as savings groups, savings collectors, and money lenders. Access to mobile money accounts seems to be a key driver of the levels of digitization of agricultural payments. Data by the World Bank shows that among the countries with the largest share of adults receiving agricultural payments into an account, most receive the payment into a mobile money account. In Kenya and Ghana, 37 percent of agricultural-payment recipients receive payments into a mobile money account. In Uganda and Zambia, 28 percent and 27 percent, respectively, receive such payments into a mobile money account. These countries are also among those with the highest uptake of mobile money: the share of adults with a mobile money account is 73 percent in Kenya, 51 percent in Uganda, 39 percent in Ghana, and 28 percent in Zambia. This lack of access to formal financial services has severe financial implications for Nigerian farmers. Limited access to financial services makes it more difficult for them to take advantage of business opportunities, invest and save for the future, and insure against risks.

WorldRemit offers 2% discount to Nigerians sending money home from UK

To analyze this issue, the World Bank recently released the report ‘Digitization of Agribusiness Payments in Africa: Building a Ramp for Farmers’ Financial Inclusion and Participation in a Digital Economy. The report argues that digitization of agribusiness payments can help advance financial inclusion of farmers. On the importance of financial inclusion for farmers, the report explained that the transaction history that farmers accumulate can provide a basis for formal financial service providers to assess creditworthiness, opening an avenue to formal credit, insurance, and savings products that equip them to deal with income shocks and smooth consumption, thus improving overall wellbeing. “When faced with a bad harvest or significant livestock loss, farmers bear the entire financial risk of such a loss since they lack access to financial tools that could help them manage these risks,” the report explained, adding that reliance on informal providers can be quite costly and risky, “not only putting the safety of savings at risk but also limiting access to credit and insurance.” According to the Washington-based institution digitization of payments by agribusinesses to farmers can act as the ramp to broader financial inclusion and better use of these accounts. It defined digitization of payments to mean a payment being made electronically into a “transaction account.”

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According to 2017 Global Findex, 13 percent of account owners globally reported having opened their first account to receive private-sector wages, government payments, or payments for the sale of agricultural goods. About 20 percent farmers in sub-Saharan Africa reported having opened their first account to receive an agricultural payment. Administered to 45 firms, and 29 agribusiness respondents the survey by the World Bank included 16 firms that operate globally or regionally and have operations in several African countries and 13 firms that operate at a national level, the result of the survey by the World Bank recommends key actions that can help accelerate digitization. “Governments should strengthen the foundations of their national digital economy and the enabling environments for agritech, fintech, and e-commerce,” the report said, adding that the actions are critical since improvements in these areas make it more feasible for agribusinesses to digitize their payments to farmers and increase farmers’ ability to use digital payments. It also recommended that governments should take targeted actions to strengthen the rural DFS ecosystem: Targeted actions are needed to strengthen the rural DFS ecosystem since rural areas face specific challenges related to their geography. “These include actions to increase the density of CICO (cash-in-cash-out) agents in rural areas and increase the opportunity for rural residents to use e-money.

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n the run-up to the 60th anniversary of Nigerian Independence on October 1st, WorldRemit, one of the leading digital payments platforms, is offering a helping hand to the approximately 215,000 Nigerians living and working in the UK. Anyone sending money home to Nigeria with WorldRemit this September will enjoy a 2 percent discount and pay no WorldRemit fees on every transaction, putting more money in the pockets of those who need it most, the payment company said. Furthermore, customers will stand a chance to win one of 240 prizes, including 60 iPhone 11 devices, 60 £60 Amazon shopping vouchers, and each winner will also get a £60 Jumia voucher for their recipient to put to good use back home in Nigeria. “Being able to send money home is a huge source of pride for Nigerians working in the UK, just as October’s Independence Day will be a huge source of pride for our nation. At such a difficult time for Nigerians both at home and abroad, I hope these prizes, together with a month of WorldRemit fee-free and discounted transfers will help to lighten the load for this hardworking community, and give us all a cause for celebration,” Gbenga Okejimi, Country Manager, Nigeria at WorldRemit said. According to Okejimi: For many more, the real prize will be knowing that money sent home reaches loved ones quickly, transparently, and with all of the safety afforded by a global leader in digital payments. “It will also be a great relief to know that the app means you don’t need to venture out to the high-street at the moment.” “Customers using WorldRemit can send money home, with funds typically landing in the recipient’s bank account in a matter of minutes. Exchange rates are competitive, fees are low and fixed, and customers are kept updated by iPhone and Android notifications every step of the way.” Collectively Nigerians send home £3.27 billion per year in remittances, which is more than any other nationality living in the UK. As Nigerian children prepare to head back to school after the longest summer break on record, Nigeria faces a potential currency crisis in the wake of this year’s oil price crash and the world continues to wrestle with a global health emergency. The financial demands on Nigerian’s sending remittance money home from the UK are at an all-time high.

@Businessdayng

Wednesday 07 October 2020

BUSINESS DAY

insurance today

E-mail: insurancetoday@businessdayonline.com

Report shows how Covid-19 is changing claims trends, risk exposures for companies as Sepp, AGCS chief claims officer. “The growing reliance on technology, shift to remote working, reduction in air travel, expansion of green energy and infrastructure and a rethinking of global supply chains will all shape future loss trends for companies and their insurers.” Estimates vary, but the insurance industry is currently expected to pay claims related to the pandemic of as much as $110 billion in 2020 according to Lloyd’s. AGCS alone has reserved

Modestus Anaesoronye

he Covid-19 pandemic is one of the largest loss events in history for companies and insurers alike. However, it’s not only the magnitude of losses which is unprecedented. Claims trends and risk exposures are likely to evolve in both the mid- and long-term as a result of the pandemic. With the reduction in economic activity during lockdown phases, traditional property and liability claims have been subdued, most notably in the aviation and cargo sector, but also in many other industries with fewer accidents at work, on the roads and in public spaces, according to a new report Covid-19 – Changing Claims Patterns from Allianz Global Corporate & Specialty (AGCS). “The coronavirus out-

Sunday Thomas, Commissioner for Insurance

break has reduced risk in some areas while, at the same time, changing and heightening it in others. The wider changes in society and industry brought

about and accelerated by the pandemic are likely to have a long-term impact on claims patterns and loss trends in the corporate insurance sector,” says Thom-

Leadway Assurance positive about future, 50 years after establishment Modestus Anaesoronye

eadway Assurance Company Limited, one of Nigeria’s leading insurers has officially unveiled the anniversary logo commemorating 50 years of providing exceptional service to Nigerians, while also positive about the future. The logo unveiling ceremony, toned down to align with social distancing conditions, also saw the flag-off a series of commemorative events to acknowledge stakeholders who have contributed to its success. Present to witness the event at the Company’s Corporate Office in Iponri, Surulere, includes Tunde Hassan-Odukale, managing

about €488mn $571mn) for expected Covid-19 related claims, especially for the cancellation of live events and the disruption of movie or film productions in the entertainment industry. “We have seen claims in some lines of business, such as entertainment insurance, surge during Covid-19, while traditional property and liability claims have been subdued during lockdown periods,” says Philipp Cremer. AGCS global head of claims,. “There is still the potential for claims to occur as

director; Adetola Adegbayi, executive director, General Insurance, and erstwhile managing director, Oye HassanOdukale and other company executives. In a message to stakeholders titled, ‘50 and Fluid, A Time for Gratitude’, Tunde HassanOdukale thanked stakeholders in the Nigerian insurance ecosystem including clients, brokers, partners, staff, wellwishers and the regulator for their contribution towards Leadway’s success story. “The occasion of our 50th anniversary is a time for reflection and gratitude. Reflection on the strides, successes, and challenges past; gratitude for the journey so far and the opportunities of the future. Ours started with the dream of a man who wanted to serve.

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He knew that to give life to this vision, he would need to work with other people of like minds. …Ever the community man and humanist, our founder, my father, Hassan Olusola Odukale, believed and firmly practiced the saying “if you want to go fast, go it alone; but, if you want to go far, go with others”. “As excited as we are to celebrate our accomplishment in the last 50 years, we do recognize that there is more work to be done to achieve our ambitious goals for Leadway. I have no doubt that with the relentless pursuit of customercentricity, leveraging innovation and digital technology, the next 50 years will be better than the past,” he added. In 1960, Sir Olusola Hassan-Odukale, a textile merchant trading in fabric for suits, shirts, and ties, became the first individual insurance agent for any insurance company in the North of Nigeria. Thus, he began his insurance experience, which would later culminate into him setting up Gaskiya (Hausa word for integrity) Insurance Brokers. In 1970, the brokerage was transformed to Leadway Assurance Company Limited, laying the foundation what has now become Nigeria’s leading insurance company. The company commenced operations in the first quarter of 1971.

factories and businesses restart after periods of hibernation, and given the longer development patterns for third-party claims in longtail lines.” Also, claims notifications from motor accidents, slips and falls or workplace injuries slowed as more people stayed at home, and with the temporary closure of many shops, airports and businesses during lockdowns across the world. AGCS also noticed a positive impact on US claims settlement from the suspension of courts and trials. Some claimants and plaintiffs have been more open to negotiating settlements out of court rather than opting to wait a long time until their case is admitted – a trend also highlighted in another recent AGCS publication on liability loss trends. In general, claims activity is likely to pick up again following resumption of economic activity.

Radix Pension moves to the top on returns on investment Modestus Anaesoronye

adix Pension Managers, a Pension Fund Administrator (PFA), has risen to the fifth position on Return on Investment (ROI) in assets under management among its peers in the pension management business. The RSA Fund III ROI from January 2020 to August 2020 for all PFAs in the country indicated that Radix emerged among the top five PFAs with high performance level. Fund III, one of the four distinct funds of the RSA Multi-Fund Structure introduced by the National Pension Commission (PenCom), allows a contributor to choose the fund through which his or her pension contributions would be invested by his or her PFA. Also, RSA Multi-Fund Structure is designed for investing pension contributions based on the age and risk profiles of RSA holders. The four distinct funds differ from one another based on age classification, namely, Fund I (less than 50 years, but based on request. This fund is particularly suitable for contributors with a longer duration of employment as their fund can be invested in a higher yield); Fund II (default fund for all contributors less than 50 years.);

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Kunle Adeboye

Fund III (50 years and above); Fund IV (strictly for retirees). The rates of return on pension fund investments vary from year to year, depending on prevailing economic conditions and performance of the Nigerian financial markets, as well as the investment strategies of the various PFAs. However, the Commission monitors the PFAs to ensure that returns are competitive and fair. Income generated from investing pension contributions is fully distributed into the RSAs of contributors based on the proportion of the assets in the individual RSA. Radix however recorded a 14.78 per cent return between January and August 2020 on the investment made for contributors in this category. Meanwhile, the PFA also performed well in the investment of funds under the RSA Fund I, Fund II and Fund IV @Businessdayng

with an average aggregate return of 9.28 per cent over the same period. Which is above the industry average ROI. Kunle Adeboye, managing director, in a statement, attributed the performance of the company’s funds to efficient investment strategy. According to him, the economic review of the First Half of year 2020 showed a major hit on the economy from the impact of the pandemic that is ravaging the global economy, with weeks of lockdown witnessed in major economic nerves of the country. He said despite the high volatility witnessed across markets, including the equities market and fixed income, coupled with instability in the economy in Quarter 1 2020, the RSA Fund I, II, III & IV had returned 3.11 per cent, 5.81 per cent, 7.64 per cent and 6.84 per cent in Q 1 2020. Consequently, the funds have returned an average of 80.02 per cent from inception across all funds. He maintained that irrespective of events and trends across markets and the economy, Radix pension Managers remains committed and resolute in ensuring that it attains optimum return on each fund through efficient investment strategy driven by sound research and risk management process.

Wednesday 07 October 2020

BUSINESS DAY

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

N10m gas-powered OMAA buses for local assembly GPC Logistics unveils …Comes with 200 liters gas, 70 liters petrol tanks

new identity at 10, gets board chair

MIKE OCHONMA Associate Editor

MIKE OCHONMA

igeria’s emerging focus on gas as alternative to petrol for vehicles received a boost penultimate week when OMAA Global, patent owners of the new OMAA brand of mini-buses keyed into the federal government’s policy following the reveal of H-Series mini-buses in Abuja, Nigeria’s political capital and seat of government. With the historic launch of the new H-Series range of mini-buses that comes with 200 liter capacity of gas and 70 liters of petrol during the event attended by representatives of government from the ministry of petroleum and the National Automotive Design & Development Council (NADDC), OMAA Global saisd the next move is on local assembly of the buses by the end of this year. Describing transportation in the country as a critica factor in moving passengers, goods and services from point A to B, Chinedu Oguegbu, founder of OMAA Global and the brain behind the new OMAA commercial bus available in manual transmission and automatic transmission in future,lamentedthat,lackofefficient transport system constrains the economy, making productivity low, despite its role as the engine of economic growth.. This is coming at a time when the cost of doing business is high with the commercial transportation sector as one of the critical sectors in the economic and social integration value chain. Every model of OMAA bus is suitable for intra-city and school shuttle including application as a panel and an ambulance. The

PC Energy and Logistics, one of the nation’s fastest growing logistics firms, has revealed the company’s new brand identity. Confirming this in Lagos, Elvis Okonji, managing director and chief executive of GPC, Elvis Okonji, said that, this move is reflective of the changes in the stature and personality of GPC as a “future forward” brand. Coming on the heels of the company’s 10th year anniversary, industry watchers say this developmentisstrategic.Commencing operations with only five units of used Mack trucks and one client (Lafarge), GPC has metamorphosed into a major player in the logistics space operating a fleet of over 700 (brand new) trucks. Parading a team of thorough-

franchise owners say, it is offering the OMAA at a competitive introductory price of N10 million depending on customisation. It comes as a single or dual offering (dual fuel engine system), which implies that customers can have the bus sold to them as either premium motor spirit (PMS), compressed natural gas (CNG) or liquified petroleum gas (LPG). In terms of safety and ruggedness, it has a drum brake disc technology and solid sus-

pension systems comparable to other competing brands in the local market. Exterior-wise, there are central lock key systems, the tyres sits on alloy wheel or the conventional steel wheels. These two choices are strongly casted taking into consideration the peculiar rough roads that we have in the country today. For daylight or night visibility, OMAA boasts of LED lamp, the high mount brake light with the latest timeless design.

Interior-wise, customers are at liberty to decide on which seat choices to make, as it comes in three variants including fabrics or leather. In terms of passengers comfort, OMAA is lithered with an all-round air-conditioning system both front and rear that are also adjustable from the rear in addition to the rear view mirror. The features mentioned are in addition to other features in other vehicles like the automatic brake system (ABS), electronic brake

distribution (EBD) system. The prospective customers have to buy any of the OMAA bus with or without a DVD, the preferred size of the LCD or the reverse camera. Customers are guaranteed of timely delivery time schedule to customers within a period of one to four month pre-order notice. Every OMAA bus is price competitive fits every budget of intending customers and offered at a very reasonable discount either for basic models or customisation.

What is automatic transmission fluid (ATF), What Does it Do? MIKE OCHONMA

TF is what cools and lubricates the components within your automatic transmission system. This automatic transmission system is what frees you from having to change your gears manually, converting power from your engine to your steering system and allowing you to steer the vehicle with ease. The fluid lengthens the life of the internal components and ensures that your vehicle is able to function efficiently. Why is this important ATF protects the components within your transmission system and prevents them from overheating. Without it, your vehicle would not be able to manage the high amounts of heat energy produced, and the transmission would essentially fail. Using the incorrect trans-

mission fluid would also cause your transmission system to degenerate if left inside the vehicle for too long. Needless to say, it’s important to ensure that you have the right type of fluid topped up. What are signs of using incompatible fluid Unfortunately, it is impossible to have a single type of ATF which is suitable for use in all automatic transmission systems. This is because each transmission manufacturer will www.businessday.ng

design their system using a variety of different frictional materials. Only a transmission fluid with the right type of additives will be able to satisfy the frictional requirements of that particular transmission system.There are a number of noticeable signs that you are using the incorrect type of automatic transmission fluid, some of which may include longer transmission shifts, problems changing gears, or strange sounds coming from your engine.

If you are experiencing any of the previously mentioned symptoms, then it’s important for you to take your vehicle to a mechanic right away. On the other hand, the computer systems on board many modern vehicles tend to compensate for poor gear shifting, meaning that you could remain fully unaware of a problem with your ATF, as you would not experience the aforementioned symptoms. For this reason, it is imperative that you take your vehicle in for servicing, so that your mechanic can keep an eye on the aspects of your vehicle and ensure all the right fluids are in place. Eliminating incompatible transmission fluid Using an incompatible ATF can have devastating effects. So, if you want to reduce as much of the damage as possible that results from leaving an incorrect type of

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fluid, seek to arrange a transmission fluid flush for your car by your local mechanic, who will use a flushing machine to draw out all the fluid, and then replace it with a more compatible type. You may have also heard of a transmission change, but don’t make the mistake of getting the two confused. A transmission change will only drain the pan of automatic transmission fluid and replace the filter. Such a process may not get rid of all the fluid entirely, and as such, remnants could still exist. This service is more so used for the removal of built up contaminants in the fluid over replacing the fluid altogether. Your mechanic will be able to determine the right automatic transmission fluid to use for your vehicle, or it can found in vehicle’s owner’s manual. @Businessdayng ???????

bred and passionate professionals, the company leverages big data from market intelligence and historical records in its decision making, strategy formulation, product development, relationship, and employee management, to deliver value-added services to its clients. As part of its repositioning, GPC Energy and Logistics has alsoannouncedtheappointment of Mike Ozemhoka Asekome as new board chairman. Other new appointees to the board include Jimoh Rasak Ishola Famuyiwa, a monarch and the Onipapa of Papalanto in Owu Kingdom, Ogun state, Vivian Isioma Okwudike and Uzoma Francis Christopher. Asekome, an associate professor of finance and banking in the Department of Economics, Banking and Finance at the Benson Idahosa University, Benin City, holds a doctorate degree in business administration (specializing in financial management) and master’s degree in business administration (MBA) from the University of Benin. He also holds M.Sc. Economics and B.Sc. Agricultural Economics degrees from the University of Ibadan. With over 15 years university teaching experience in the department of economics, banking and finance in Benson Idahosa University, Benin. The new board chairman has served as consultant on various assignments sponsored by the World Bank, FAO, IFAD, IITA, FADAMA, RUFIN and Edo State SEEFOR providing training, capacity building and mentorship to SMEs on entrepreneurship projects. He is a banker, agricultural economist, and certified microfinance trainer.

Wednesday 07 October 2020

BUSINESS DAY

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Business Event

Roads

With high expectations on the quick extension of the standard gauge rail lines from Ebutte-Metta Junction (EBJ) into Apapa seaport, the picture above on the right is the current update (asphalt) of the $1.5billion Lagos-Ibadan 156.5 kilometer rail line modernisation project. On the left is the old narrow gauge line.

Abdu Aliyu, director personal income tax, Borno State Internal Revenue Service; Ali Manga Bulama , executive chairman of the agency, and Frederick Apeji , chairman, Alford Conferences, during the Alford Conferences Limited presentation of excellence in IGR award 2019/2020 to Borno State Internal Revenue Service in Maiduguri recently

Apapa Rail to drive favourable trade balance for Nigeria upon completion GIFT WADA, Abuja

xecutive secretary of the Nigeria Shippers Council (NSC) said the Apapa rail upon completion would boost the country’s exportation and provide favourable trade balance. The council while stating the significance of the Apapa rail, lamented Nigeria’s Import to exportation ratio at 8:4 which it described as as a poor performance In an interview with BusinessDay in Abuja, Hassan Bello, lamented that with about 63 export products, Nigerians lack of infrastructures makes Exporting difficult and expensive compared to other countries. He said “when Apapa rail begins operation, congestion will disappear, the cost will crash, there will be efficiency and we would attract more cagoes” “The issue is that when we import like 800,000 containers per annum, there must be a different way of evacuating them. But we also want these containers when they come loading, they should not go empty. The ratio now is 8:4. for every container now that comes in, only 4 go out loaded. all others are empty containers. this is risky, it shows we are not trading well, we are not exporting well. “We want to ensure that every container that comes in, goes back loaded not emty, that means we would have favourable terms of trade with other countries.” Considering the fall back in oil price and the countries export potentials, Bello noted that the Apapa rail Infrastructure would cut down cost of exportation, simplify processes and give Nigeria a competitive advantage “Let’s improve our infrastructures and processes so that we can export. If we have exports, Nigeria will not depend on oil anymore. We would have good trade, and logistics, access to market and finance, simplification

and digitalization of process” “We have introduced rail service, about four Troup has been done and that will ease the congestion. we have the standard gauge into Apapa. The roads are being done now, by March 2021 crick, and Liverpool would have been completed and most importantly the road linking to Tincan, Oshodi, will be delivered. that would be a relief. when we have rail, inland waterways and roads, the congestion will disappear, the cost will crash, there will be efficiency and we would attract more cagoes’’ While stating the importance of the Apapa rail, Bello said for everything trips, 38trucks are taken off the road. He disclosed that the shippers council is also concentrating on other modes especially the inland water ways where batches would be used to deliver or clear Cargoes from the rail. “Rail will solve a lot of problems chief of which having multiple modes of delivery and evacuation of Cargoes. We have relied until recently on roads alone with dangerous consequences; access to the port is denied especially for export cargoes, this has led to delay, loss of revenue, loss of manpower.” rail is faster, cheaper and reliable and more certain. We have 300, 000 metric tons of cargoes from Lagos to Kano, tho and back and that exclude the export, so you can see the improvement in our logistic chains so we can haul cagoes from Kaduna, Kano, Aba, Enugu and other places towards the sea for export” He also revealed that the Nigeria shippers council is looking at standard operating procedure for export and as well as a port community system whereby there would be a one stop shop for export including the inspection, availability of produce to export. Bello said “ we are even talking of agric based export. if you have agric based export, we have to add value. We shouldn’t export them in

their raw form, let’s process it, that will bring employment opportunities and be more beneficial to us. “We had a meeting with lots of produce association,coca ginger, rubber and other products to see where we have comparative advantage and then push further” he concluded. Meanwhile, Simon Irytwange, President, National Association of Yam farmers, processors and Marketers speaking on the challenges of exporters in the country said access to the rail is a major issue that would be addressed by the rail system. He further explained that Nigeria’s exportation would gain a favourable balance if all forms of delays are taken off to help exporters meet with delivery time. “We cannot access the port easily, and not as if we don’t have what we can give to other countries, even if it is yam alone, we have so much yam for exportation but the difficulty we have with exportation is the gridlock terminal into Apapa “If the rail help us aggregate our produce mainland and move it straight into Apapa without any gridlock, that would be a very great opportunity for exporters of Agricultural produce in Nigeria “When Ships leave the United Kingdom and other countries into Nigeria, they come fully loaded, but when they are going back they go back empty. When these Ships carry our produce, instead of going back straight to the East, they will go up to North Africa to get their ship fully loaded. This is what most of the ships do and it has been affecting our delivery time. Speaking on the adverse effect of Nigerians lack of rail Transport on exportation, an export consultant, and Managing Director Multi-Mix Academy, Madu Obiora, said Nigerians rating in the global logistics performance index of the world Bank is very low because of the lack of access to port

Ambassador Chioma Omeruah (m) flanked with AdronHomes staff , at the Independence Anniversary Celebration of Nigeria@60 recently in Lagos.

Taiwo Ogunpaimo, senior marketing specialist, itel Mobile Nigeria, presenting a box of relief items to a beneficiary, during a special outreach, to commemorate itel Love Always On CSR initiative’s 5th anniversary and Nigeria’s 60th independence in Lagos.

L-R: Esther Ezenwoko, people manager, Pabod Plant, International Breweries Plc; Akintayo Oguntunde, plant manager, pabod plant, International Breweries Plc; Ipalibo Harry-Banigo, deputy governor of Rivers State, and Marian Reginal Ukwuoma, corporate affairs and sustainability manager, pabod plant, International Breweries Plc, during her excellency’s visit to the plant on its Independence Day celebrations.

Wednesday 07 October 2020

BUSINESS DAY

MARITIMEBUSINESS SHIPPING

LOGISTICS

MARITIME e-COMMERCE

Nigeria’s shipping business, seaborne trade still dominated by foreigners @ 60 AMAKA ANAGOR-EWUZIE

ixty years after Nigeria gained independence from her colonial masters, the nation’s shipping business estimated at over N2 trillion, is still being dominated by foreign vessel owners. Consequently, the nation’s maritime industry is presently losing billions of dollars in freight earned from shipping business. Also, the country has been recording low gross in national tonnage capacity as only few indigenous owned ships are available to compete with foreign ships in the carriage of goods. For ship owners, this can be attributed to lack of quality vessels as Nigerian shipping companies have been finding it difficult to compete with its foreign counterparts. Margaret Orakwusi, chairman of the Shipowners’ Forum, who noted that banks are not lending to ship owners at single digits, said cost of funds has been a major challenge to financing vessel acquisition in Nigeria. “There is huge gap in indigenous ownership of vessels in Nigeria largely due to lack of fund to acquire new vessels or refurbish the existing fleet. This is why Nigerian ship owners need cheap funds with single digit interest rate to finance vessel acquisition,” she stated. Orakwusi, who raised alarm that ship owners are drowning in debts to banks, blamed the situation on lack of special lending terms despite the fact that shipping is an investment with long gestation period. Hassan Bello, chairman of National Fleet Implementation Committee (NFIC), who stated that the recent survey by the committee revealed

that the failure of Nigeria to have functional fleet of vessels participating in freighting Nigerian imports and exports cargoes, had seriously impacted the economy. Bello said that many Nigerian youths, who ordinary would have benefited from either seafaring jobs or other indirect jobs in the maritime sector, have been out of jobs. According to him, NFIC survey estimated that upon the development of National Fleet, over 131,304 direct and indirect jobs would be created for Nigerians in fiveyear period. “Without the establishment of National Fleet of vessels, Nigerian maritime sector has been making insignificant contributions to the nation’s Gross Domestic Product (GDP). Against this backdrop, it has been estimated that over $5.42 billion is expected to be added to the GDP while over $1.63 billion would be generated into

the Federation Account as corporate income tax paid by indigenous shipping firms within five years,” Bello said. He listed other impact of lack of National Fleet to include distorted trade balance, poor image and class status among comity of maritime nations. Bello, who acknowledged that owning of Nigerian registered, flagged and crewed ships would have an immeasurable effect on the economy, stated that Nigerian ship owners have been losing by allowing foreigners to own and operate ships on the nation’s waters. He said shipping business, together with other aspects of the maritime industry, would finance Nigerian annual budget if properly harnessed. Meanwhile, Mina Oforiokuma, member, Governing Council, Nigerian Content Development & Monitoring Board (NCDMB), said that,

for Nigerian ship owners to compete favourably with its foreign counterparts, the NNPC must provide the contracting tonnages that would enable Nigerians to invest in vessel acquisition. He stated that NNPC, which is the biggest employer of marine assets that feed the import of petroleum products into Nigeria, and services the export of petroleum products, can be an enabler by providing those contracts of carriage that would make vessel acquisition a more bankable investment in Nigeria. “Nigeria needs to increase the number of indigenous players in its shipping sector, by participating in the Direct Sales and Direct Purchase (DSDP) of Crude oil contract especially importation of refined products, which NNPC can reserve for Nigerians,” he suggested.

Usman re-elected vice chair of IMO Facilitation Committee AMAKA ANAGOR-EWUZIE

adiza Bala Usman, managing director of the Nigerian Ports Authority (NPA) has been re-elected the vice-chair of the International Maritime Organization (IMO) Facilitation (FAL) Committee. According to a statement by Ibrahim Nasiru, assistant general manager, Corporate & Strategic Communications of NPA, the latest election took place during the clos-

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ing of the 44th session of the Facilitation Committee (FAL 44), which held virtually between September 28 and October 2, 2020. He said the Facilitation Committee is saddled with the responsibility of addressing the efficiency of shipping by dealing with matters relating to enabling international maritime traffic including the arrival, stay and departure of ships, persons and cargo from ports. The committee, he stated, also ensures that the right balance is struck between

maritime security and facilitation of international maritime trade. Responding to her re-election, Usman described it as honour to Nigeria, promising to work with the chair and the entire IMO Secretariat in realising the lofty objectives of the FAL Committee and the IMO. While acknowledging the chair of the committee, Marina Angsell from Sweden for her leadership, she also thanked the IMO SecretaryGeneral and the Committee for re-electing her to serve.

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NIMASA boss to remain president of Institute of Transport Administration till 2022 AMAKA ANAGOR-EWUZIE

ashir Jamoh, director general of the Nigerian Ma r i t i m e A d ministration and Safety Agency (NIMASA), would retain his seat as the national president of the Chartered Institute of Transport Administration of Nigeria (CIOTA) till another election in 2022. This is as the Institute recently elected members of National Executives Committees and endorsed members of the Governing Council to drive its focus. CIOTA, according to a statement by its National President, had in June 2020 set up a 5-man committee to organise a General Meeting to ratify members of the National Working Committees, Council for the Registration of Transportants (CORTRANS), Zonal Chairmen/Representatives; and to conduct elections to fill up the executive positions from November 2020, in line with the provisions of CIOTA establishment Act, 2019. He however stated that the newly elected national executives as well as members of the Governing Council will be inaugurated at the Institute’s Annual General Meeting (AGM) which will take place at a later date. At the election, Chinda Evans Ogbuji emerged National Secretary while Oluwaseyi Joseph Afolabi was elected as the Assistant National Secretary. Chioma Azionu became National Treasurer while Elei Green Igbogi is now the National Financial Secretary. Other winners include Chizoba Anyika elected as National Publicity Secretary and Kenneth Ibiama emerged as National Provost. The post of the National Auditor 1 was won by Patrick Erhinure, Stella Chukwunonyelu Faleye emerged National Auditor 2 while Ijeaku Onyewuego became National Auditor 3. The Institute ratified the nomination of Innocent Chuka Ogwude as chairman, Council for the Registration of Transportants (CORTRANS) while other members include Calistus Ibe, Samuel Odewumi, Bala Zakka, Osuala Emmanuel Nwagbara, Matthew I. Akinlabi, Taiwo Olufemi Salaam, Aluma Daniel Ogbonna (Admin), Yakubu A. Yakubu and Chinda Evans Ogbuji. Five sectorial Development Sub-Committees covering the Maritime, Road, Aviation, Pipeline and Rail were also put in place. Mem@Businessdayng

bers of the sub-Committee on Road comprises of Chris Asoluka, Kurahson Ben Inuwa, Babatunde O. Samuel, Okorefe Charles, Hamman Mary Madu, Tony Iju Nwabunike and Folajimi Iretolu while Samuel G. Odewumi, Taiwo O. Salaam, Seni Ogunyemi, Bako Danladi Mohammed, Dieseruvwe Stephen Kweku, Umar Iya and Ijeaku Onyewuego. Members of the Rail Sub-Committee include Bamidele Badejo, Aliyu Mainasara, Uche Increase O., Oche Jerry, Apeh Adejoh Samuel, Abdullahi A. Bashir and Joseph O. Afolabi while the Aviation Sub-Committee is made up of Chigozie O. Amaechi, Oluropo Owolabi, Igwe N. Francis, Danjuma A. Ismaila, Onwuka C. Augustus, Uwem Ekanem and Rasheed I. Aiyelabegan. Also, Bala Zakka, Martin Onovo and Felix E.K Nakpodia, Lawal Balarabe, Matthew Akinlabi, Udoaka Friday, and Balogun Olajide Alade are of the Pipeline Sub Committee. Seven National Working Committees were ratified to handle Operations & Planning, Education and Training, Membership and Social Welfare, Finance and Accounts, Media and Publicity, Disciplinary and Legal Advisory. Members of the Operations & Planning Committee include Kabir M. Murnai, Nnamdi C. Eronini, Uche O. Increase, Akujobi Celestine Chukwuemeka and Isma’ila Abdullahi Kuraye. On Education and Training Committee, Callistus Ibe, Charles Asemine, Ajao S. Adeyemi, Maduka Ozili and Reuben O. Nwaogbe were appointed members while Prince G.O Don-Aki, Azionu A. Chioma, Hassan Abubakar, Kenneth Ibiama, and Gimba Ganiyu are in Membership and Social Welfare Committee. The Media and Publicity Committee comprises Chizoba Anyika, Chinda Evans Ogbuji, Ubong Essen, Philip Okoronkwo and Ezinne Azunna. Oba R. I Balogun, Zebulon Ikokide, Dominic Obiajulu, Emmanuel Echigeme and Lucky Eze Onumaegbu are in the Disciplinary Committee while the Legal Advisory Committee consists of Sotonye Inyeinengi-Etomi, Osuala Emmanuel Nwagbara, Abdul Dirisu , Yakubu A. Yakubu and Iyelolu Bukola Adenike. On the Finance and Accounts Committee are the National President, Deputy President, the National Secretary, the National Treasurer and the Financial Secretary of the Institute.

Wednesday 07 October 2020

BUSINESS DAY

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Wednesday 07 October 2020

BUSINESS DAY

This is MONEY

• Savings • Travel • Debt & Borrowing

A guide to your Personal Finance

• Utilities • Managing your Tax

What does 60 mean to you?

on. Will your pension be enough? Living solely on a pension is impossible for most people; you will need other sources of passive income from personal savings and investments to be able to maintain the lifestyle you have grown accustomed to, and to meet your obligations. Your current income is a good starting point for calculating how much you will need. Experts suggest that one may need between 60% and 80% of current income to main-

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Your current income is a good starting point for calculating how much you will need. Experts suggest that one may need between 60% and 80% of current income to maintain your current lifestyle in retirement

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n many corporate organisations, 60 is the retirement age, whether you are ready or not, and even when you have so much more to give; it can be quite disconcerting and unsettling to have to move on if you are not mentally and financially prepared. Research suggests that life after 60 can be one of the most challenging and uncertain times of life. If planned for, however, it can and indeed should be a most fulfilling and rewarding time. What will you do? Will you take some time off as you consider your next steps? Perhaps you want to start a business of your own, travel, do something completely different, give more focus to your legacy, or actually retire in the traditional sense of relaxing and taking things easy. Whatever you choose to do, life after 60 should be an exciting and fresh new canvas that gives you the freedom to follow your dreams. You have worked for so many years, perhaps with not enough time to do all the things you love. Now you are relatively free from intense family and career commitments; you can travel, focus on yourself and enjoy new experiences, but only if you can afford it, or if your loved ones are willing and able to fund the lifestyle you deserve. Financial independence typically means having enough income to pay for your living expenses for the rest of your life without having to work full time unless you wish to do so. Here are some strategies that successful sixty-somethings have applied to make the best of this time: Health is Wealth Good health is key to a successful retirement. The endless opportunities in retirement can only be attained if you have invested carefully and remained healthy. Healthcare costs tend to increase as you age, so preventive medical

attention including regular screening and a healthy lifestyle is essential. Protect your later years by taking care of your physical and mental health with enough rest, regular exercise, and a healthy diet. In your 60s and beyond, you fall into the high-risk category for complications resulting from the COVID-19 virus. Be conscious of meticulously observing all the set protocols; wear a facemask, wash your hands frequently and use a hand sanitizer and most importantly, avoid large crowds. Ideally, your medical insurance should have been in place for decades before now, but even if you have no cover, put something in place as soon as possible. Even the most elaborate retirement plans can be totally decimated if you find yourself in poor health and without adequate health insurance in place. Cut back on your expenses Entering retirement should force us to rethink every aspect of our financial situation. You may be forced to give up some of the luxuries that you were accustomed to. Be prepared to adjust your lifestyle and spending habits as appropriate and if necessary. It can be particularly challenging where you have been a corporate executive for many years with perks that you took for granted and never costed. Some of the most vulnerable are those retiring from senior leadership roles in the private or public sectors with all the attendant perks. For those still working, don’t be complacent; as you enjoy all the trappings, be sure to give attention to building your own assets by saving and investing, for a time that will surely come. Be mindful of debt While you are working, debt can be a nuisance, but can be managed with sufficient regular income coming in but it can be a huge burden particularly where you are no longer earning. Even if you cannot afford to pay it off completely, try to reduce it, particularly the high interest debt. With overwhelming debt, it will be impossible to retire in financial security, so this must be tackled head

tain your current lifestyle in retirement. Give some focus to acquiring assets that can appreciate in value and generate passive income. Interest from your bank deposits is a reliable, predictable form of income. Property is one of the most dependable assets when carefully acquired with professional guidance. It is a great source of passive rental income when chosen right. The stock market has a good long-term track record, and many successful investors have built significant wealth this way earning regular income from dividends or selling stocks that have appreciated in value. Every investment opportunity comes with risk, so do seek professional advice. Postpone retirement? It is not uncommon to work well into your golden years. If you cannot afford to retire just yet, consider easing into retirement by working part time. You may have to postpone retirement or revise your retirement goals downwards, particularly if your family members are not in a position to fully support you. A few more years of earning can make all the difference; this will give you time to accumulate and invest additional funds for retirement. Many people are still fully engaged in some activity or other well into their seventies and even beyond and living a full

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and fulfilled life. Remember that the aim should be to work because you want to, and not because you have to. Where can additional income come from? What do you love to do that you are very good at? Can you monetize it? Explore opportunities that can earn you additional income without losing focus on your primary objectives. If you left your former employment well, you may be able to offer your services on a project or consulting basis for a few hours a month. Remember you have garnered so much knowledge over decades; use it. Consider writing a book, getting into the corporate speaking circuit to impart knowledge. Such opportunities keep you mentally active, relevant and earning. Are you a gardener? Are you a talented interior designer? Are you a great cook? Do you love to bake? Do you have special subject skills that you can teach? There are so many opportunities to keep you earning from what you already know. Just start. Choose what you love. Seek professional advice A financial advisor will review your specific situation, taking into account your risk tolerance, financial status, your goals and your family situation, and help you develop a financial plan to include short @Businessdayng

term and long-term investments. But the onus is on you to develop your understanding of the basic financial principles, as you must ultimately take responsibility for your financial future. Don’t be derailed by peer pressure Particularly in a somewhat ostentatious society such as ours, many feel pressured to dip into their retirement funds just to keep up appearances especially after leaving a high profile or prestigious role. This is one of the surest and quickest ways to financial ruin. You cannot know the details of anyone’s journey. Stay focused on your own goals and plans and not someone else’s. 60 is a landmark, but a relatively short time in the life of a nation. Just as we must assess our country, take stock, learn from our mistakes and failings, and strive to do far better, take a look at yourself and make the necessary changes. As life spans are getting longer, it is not unusual nowadays to spend 25 or more years in retirement. Careful planning is necessary to build substantial savings reserves now to be sure that your financial resources can last as long as you hope to do.

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

Wednesday 07 October 2020

BUSINESS DAY

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Wednesday 07 October 2020

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IGR: 36 states, FCT generate N612.87bn in H1 2020 - NBS Dozie Emmanuel

he National Bureau of Statistics (NBS) has disclosed that the 36 states of the federation and the Federal Capital Territory (FCT) raked in a total of N612.87 billion as internally generated revenue (IGR) for half-year 2020 (Q1 2020 and Q2 2020). At the Q1 2020, the figure stood at N353.14 billion, and N259.73 billion in Q2 2020, indicating a negative growth of - 26.5 percent quarter on quarter. The bureau made this available on its website on Tuesday. NBS stated that the IGR from the 36 states and the FCT for 2019 was at N693.91 billion, which indicates a negative growth of -11.7 percent year on year. The report showed that Lagos had the highest IGR of N204.51 billion recorded

in H1 2020, closely followed by Rivers with N64.59 billon, while Jigawa State recorded the least at N3.005 billion. It further revealed that in the Northeast, Bauchi got the highest IGR of N5.752 billion in H1 2020, closely followed by Borno with N5.379 billion. Gombe had the least at N3.787 billion. In the Southeast, the report shows that Enugu State had the highest IGR of N12.262 billion in H1 2020, followed by Anambra with N9.546 billion. Abia State got the least at N6.188 billion. The report also indicates that in the Northwest, Kano State led the chart with N17.509 billion, followed by Kaduna with N14.549 billion. In the North-central, Plateau State had the highest IGR of N9.400 billion, followed by Kogi with N7.434 billion. Meanwhile, FCT recorded N35.206 billion in H1 2020.

Osinbajo advocates support for education revolution to combat poverty KELECHI EWUZIE

ice President Yemi Osinbajo has called for universal support for education as a foundation to lift countries out of poverty. Osinbajo stated this at the launch of the ambitious World Education Week – a six-day online global education showcase with over 85,000 registered online attendees in 146 countries. Osinbajo stated that we cannot talk about delivering quality education in today’s world without rethinking our models and leveragingtechnology;andrethinkingoureducationcurriculatogive students the relevant knowledge and skills to make them active contributors in today’s economy. According to him, “Quality of education is key since it is a predictor of a nation’s gross domestic product (GDP) - arguing that poor education policies

and practices lose economic output, threatening to create a permanent state of economic backwardness. Increasing education and skills can boost a lower-income country’s GDP by 28 percent over the next 80 years”. In supporting the Federal Government to achieve its goals, Teach for Nigeria announced the launch of its ambitious “10 by 10 SDG 4 Pledge” as an expression of its intention to scale its work to ensure that it delivers on its vision to achieve education equity. This pledge means that over the next ten years teach for Nigeria will work with select stakeholders to improve the learning outcomes of 10,000,000 children in schools across Nigeria. At Teach for Nigeria this will be done by attracting high potential candidates to partake in training programmes and thereafter place them in schools as teachers and school leaders.

TISL launches product to bridge financial inclusion gap John Salau

n line with the efforts at deepening the financial inclusion and cashless polices of the Central Bank of Nigeria (CBN), Tetup International Services Limited (TISL), has launched Cash Deposits Voucher (CDV) in Lagos. According to TISL, the initiative is aimed at promoting cashless banking that allows individuals to render banking services on their own. Speaking on the new product, Etuk Happiness, CEO, TISL, said that CDV currently enjoys a first comer advantage in the financial sector and that it would solve about 80 percent of the challenges faced by bank customers in a brick and mortar banking hall. According to Happiness, CDV is an innovative product embedded with many security layers to checkmate fraud and other illegal activities by both agents and staff.

“Security has been put in place to prevent fraud on our platform,” he assured. He stated that each of the vouchers has a unique identifier and linked to licensed agents authorised to deal on Tetup platform, while licensed agents are also entitled to 40 percent commission on the platform. James Okocha, vice chairman, Tetup International Services Limited, said CDV was a timely initiative that supports social distancing caused by the emergence of Covid-19 and its economic implication on global economy. According to Okocha, though the initiative was birthed before the outbreak of Covid-19, it aligns with the economic realities of post pandemic financial institutions, both locally and on the global stage. He noted that people live in a world of problems; hence CDV is a problem solving initiative for the Nigerian Fintech sector. www.businessday.ng

Lagos red rail line becomes operational 2022 – LAMATA MD Joshua Bassey

bimbola Akinajo, managing director, Lagos Metropolitan Area Transport Authority (LAMATA), says the long proposed Lagos Red Line rail system will eventually roll 24 months from now (October, 2022). Akinajo gave the confirmation at a milestone meeting with contractors and consultants on the implementation of the Lagos Rail Mass Transit (LRMT) involving the Red and Blue Line projects, on Tuesday. A st ate m e nt by Ko la Ojelabi, the external relations manager of LAMATA, after the meeting, was, however, silent on completion date for the Blue Line rail, which construction on Mile 2-Orile Iganmu-Marina corridor, started about 10 years ago.

LAMATA, a World Bankassisted agency of the Lagos State government is saddled with the task of drawing up public transportation master plan for Nigeria’s economic capital. The agency also supervises the implementation of the various rail lines proposed for the state. At the meeting, Akinajo said there were already established positions on timeline for the delivery of the rail lines to passenger operation. The red line is one of seven rail lines identified in the Lagos’ Strategic Transport Master Plan for the mass movement of commuters, and reduction in congestion which continues to characterise vehicular and human movement in Nigeria’s biggest economic state. The LAMATA MD underscored the importance of the 24-kilometre which stretches between Oyingbo and Ag-

bado, representing the first phase of the 37-kilometre red rail road project to the people of the state, saying rail was one of the ways cities deal with traffic congestion. “The Red Line is supposed to be a quick win because it will share tracks with the Nigerian Railway Corporation (NRC) on its Lagos – Ibadan rail corridor. There will be no delays, no budget or cost overrun and there will not be any shift in delivery date,” Akinajo stated. She added: “Our meeting is just to take stock of what we have done so far since this project started and to re-emphasise that there is no room for slippage in the delivery of the Red Line.” In order to ensure train movement is not obstructed, Akinajo stated that four overpasses and three pedestrian bridges shall be constructed to eliminate level crosses

and pedestrian access on the rail tracks and guarantee unhindered movement of the train which would have eight minutes headway, while ensuring safety by eliminating vehicular and pedestrian interactions along the rail line. “Our projection is that the first phase of the Red Line will carry between 350,000 and 400,000 passengers daily. So we would not compromise on the agreed timelines. Funding for the project is ready and secured, so there will not be any funding issue,” she stated. Also speaking, director of rail transportation, LAMATA, Olasunkanmi Okusaga reiterated that the contractors and consultants on the projects must work together, saying challenges must be quickly reported and resolved in a way that would be beneficial to timely delivery of the projects.

L-R: Alfred Adewale Martins. Catholic Archbishop of the Metropolitan See of Lagos; Marie Fatayi-Williams, coordinator of Network of Young Catholic Carers for the Environment in Nigeria (NYCCEN), and Marcellinus Teko, administrator of the Holy Cross Cathedral, at the final week of the 2020 season creation, jubilee for the earth commemorative tree plating at the grounds of the Cathedral Lagos.

Buhari to present 2021 budget to N/Assembly Thursday KAMARUDEEN OGUNDELE, Abuja

resident Muhammadu Buhari will on Thursday present the 2021 budget at a Joint session of both chambers of the National Assembly. This was announced when the Senate President, Ahmad Lawan, read a letter from the President during plenary on Tuesday. “May I crave the kind indulgence of the Distinguished Senate to grant me the slot of 11:00hrs on Thursday, October 8, 2020, to formally present the 2021 Appropriation Bill to the joint session of the National Assembly. “While I look forward to addressing the joint session, please, accept Mr. Senate President, the assurances of my highest regard, Buhari wrote

…as Senate holds valedictory for Oko in the letter.” Also on Tuesday, the Senate held a valedictory session in honour of the late Rose Oko, who represented Cross River North, and died on March 23 in United Kingdom. The Senate leader, Abdullahi Yahaya, moved the motion for the suspension of Order 17 of the Senate rules to allow the family, dignitaries and other close relations of the deceased into the red chamber. Other dignitaries at the occasion were a former governor of Cross River State, Liyel Imoke; former governor of Anambra State, Peter Obi; former Senate President, Pius Anyim and the minister of women affairs, Pauline Tallen.

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Yahaya explained that the Senate could not hold the session earlier because of the Covid-19 pandemic and the annual vacation of the National Assembly. He eulogised the late Senator as an accomplished educationist due to her achievement in the educational sector. “Rose Oko was very knowledgeable, she was a dependable ally to me in our committee responsibility,” he added. Yahaya said the late Senator would be remembered for her brilliance, and prayed that God would grant her eternal rest. The minority leader, Enyinnaya Abaribe, pointed out that Oko was the fourth senator to have died since the inaugura@Businessdayng

tion of the 9th Senate. Abaribe described her as a gentle speaker that made great point in her presentations. He called for the renaming of the headquarters of the Nigerians in Disapora Commission after her, because of her contributions as chairman of Senate committee on diasporia and non-governmental organisations in the 8th Senate. President of the Senate, Ahmad Lawan, expressed his condolence to Oko’s immediate family, adding that her death was a great loss to the country. He said the late senator was productive and had impacted positively in her state and Nigeria in general, hence her life should be celebrated.

Wednesday 07 October 2020

BUSINESS DAY

news

COVID-19: Minister orders probe into alleged diversion of N2.67bn meal subsidies Godsgift Onyedinefu, Abuja

damu Adamu, minister of education, has ordered a full-scale investigation into the alleged diversion of N2.67 billion released to the 104 Unity Colleges during the Covid-19 lockdown for meal subsidies. This follows the report of the Independent Corrupt Practices and Other Related Offences Commission, (ICPC) that the said sum found its way into individual accounts. According to a statement

signed by Ben Bem Goong, director, Press and Public Relations, federal ministry of education, the minister has directed the ministry to collaborate with officials of the ICPC to unearth the facts as well as find a lasting solution to the payment system for meal subsidies to ensure accountability and transparency. The investigation is to establish the veracity of the claims to ensure that there is no diversion of public funds or misappropriation of same. In response to queries issued by the ministry, the principals of the Unity Colleges explained

that payments on meal subsidies to the colleges on the Government Integrated Financial Management Information System, (GIFMIS) platform was designed to accommodate individual officers of those colleges who were officially recognided to receive such payments and disburse same to food vendors. This, they said followed difficulties encountered by farmers, local food vendors and market women who do not have Tax Identification Numbers (TIN), PENCOM and other requirements to access the payment platform.

Agents seek Customs CG’s intervention at Tin-Can Port AMAKA ANAGOR-EWUZIE

learing agents operating at the Tin-Can Island Port have called on Hameed Ali, the Comptroller General of the Nigeria Customs Service (NCS), to intervene in activities of compliance team impeding trade facilitation at the Tin-Can Island command of the service. According to them, compliance team which was created in 2019 is the brainchild of the Customs Area Controller, Musa Baba Abdulahi to arrest infractions in duty payments by importers and clearing agents before they exit the seaport. They accused the team of impeding trade facilitation by

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slamming Debit Note (DN) on already cleared cargoes and have also taken over the responsibility of the Customs valuation unit. Chukwu Nwanne, a clearing agent, bemoaned the activities of the compliance team which he said was against trade facilitation as entrenched by the CGC. “When you obtain valuation, before your document gets to where you want to release the goods, you would find out that the Compliance Team has already issued a Debit Note (DN) requesting you to come and negotiate,” he alleged. He said the compliance team which was established by the area controller is strangulating importers, as they have deviated fromwhattheywerecreatedtodo.

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“What they ought to be doing is to pinpoint to the controller of any infraction. The valuation department of Tin-Can Island command has lost their relevance because whenever they issue value on cargoes it doesn’t hold water. The compliance team are now the one giving DN to clearing agents. Which should we now follow? This is duplication of duty,” Nwanne said. Continuing, he said: “The compliance team was created because of importers that underdeclare their cargoes, and the compliance team was supposed to be dealing with the noncompliant importers and their agents. But now, the compliance team slams DN on everybody,” he said.

Wednesday 07 October 2020

BUSINESS DAY

news COVID-19 protocols elongate queues... Continued from page 1

gers are required to register via a national payment portal online and pay for a repeat (second) PCR test to be done upon arrival in Nigeria. This payment portal will provide passengers with the options of where and when to carry out the PCR test.” The statement added that passengers would be given appointment time and dates to present themselves at the Sample Collection Centres located in their states of residence for a repeat Covid-19 PCR test on the seventh day after arrival. However, against these provisions made by the PTF, passengers arriving from various countries have continued to complain that the dedicated online travel portal for pre-arrival payment for PCR test in Nigeria has not been working. This has resulted in passengers joining long queues while filling several forms, which are submitted to dedicated departments that must approve them before clearing passengers for departure or arrival. In a viral video shot by a journalist a few moments after arriving the Nnamdi Azikiwe International Airport in Abuja recently, the journalist protested that despite doing a free test in London, he was still forced to pay N48,000.00 and was given a piece of paper, and told to go to a clinic that could only be found in Abuja after he was told that the clinic had branches nationwide. Also, a Lebanese national who arrived at Abuja airport recently said he had passed through different airports before arriving in Abuja, but only in Abuja was he told to stand in long queues and fill forms. He stated that the NCDC portal was not working, and he registered his displeasure, saying, “I arrived in Nigeria and there was a long queue of people waiting to pay money for Covid-19 tests. Is the one I did in London not enough? Are Nigerian hospitals better than London hospitals?” A passenger who identified himself as Chukwuma told BusinessDay, “If you do not get to the airport at least five hours before your flight, you will definitely miss your flight. I have travelled to at least two countries since Nigeria resumed international flights and I have never seen such delays as a result of unnecessary paper works that could be easily done online.” Chukwuma said it took him over four hours to get cleared by airport officials for a five-hour journey to Addis Ababa, Ethiopia. Airport officials have also seized the opportunity to extort and charge multiple payments for tests, while some officials negotiate negative status for a fee. BusinessDay’s checks show that passengers will be required to pay N50,400 for

each Covid-19 tests at Lagos State accredited labs. However, when BusinessDay correspondent visited Nigeria’s busiest airport, MMIA, to get a grasp of the alternatives that Nigerians were exploring to escape the charge, she found out a secret scheme where travel agents and conniving doctors arranged coronavirus test results for travellers pressed for time. To authenticate the scheme, the correspondent struck a deal of N25,000 with an agent who promised to get the result out in 48 hours without an actual test. Although the ports authorities stiffened its scrutiny of travellers, there are clear indications that outbound travellers going on a long trip would not stop seeking the backdoor for cheaper results, particularly when they know that some countries care less. But BusinessDay’s investigation reveals that the fee, which has incited some travellers into seeking cheaper results through the backdoor, is 36 percent more expensive than what South African private labs charge; 23 percent higher than Kenya’s; 42 percent more than Ghana’s; 42 percent higher than Senegal’s, and 74 percent more than India’s. Chinedu Eze, a journalist who recently returned from Brazil, confirmed how tedious the process was getting cleared at the airport when arriving. “Sometimes I think that the reason why the government introduced stringent laws and policies is to create rooms for loopholes where public servants and those who are connected will make money. When the law is too rigid, people look for alternate ways. And this heightens corruption, fraud, and fuels unpatriotic behaviours,” he said. “On paper, Nigeria may have the strictest Covid-19 protocol for air transport, but in reality, those connected to government officials, lab owners and hospital owners are ripping off innocent travellers. When the government digitised yellow card and reeled out the usual stringent conditions you must meet to obtain it, two days after, cleaners at the airport started selling it. Covid-19 test certificates are being sold at the Abuja and Lagos airports,” Eze said. Seyi Adewale, CEO of Mainstream Cargo Limited, told BusinessDay that the extreme protocol had been currently simplified for inbound and outbound international passengers. Adewale explained that many countries have now relaxed requirements into their country as passengers do not need any protocol into the US, for example, and UK bound passengers could fly without bottlenecks that were at the outset. He said passengers only need to selfisolate when they arrive at their destinations. www.businessday.ng

L-R: Femi Gbajabiamila, speaker, House of Representatives; Ahmed Lawan, Senate president, and Vice President Yemi Osinbajo, during the tripartite consultative committee Meeting at the Presidential Villa in Abuja.

In 10 numbers, how Nigeria’s biggest... Continued from page 1

by costs rising 4.9 percent

faster than revenue. N5.43trn The revenue of the NSE 30 firms combined increased by 2.57 percent to N5.43 trillion in H1 2020 from N5.29 trillion in H1 2019. This indicates that despite higher total revenues, the N192.4 billion increase in cost surpassed the N136.13 billion rise in revenue within the period under review and that contributed to lower profits. N2.76trn Costs incurred by the entire NSE 30 companies rose to N2.76 trillion in half-year 2020, a 7.48 percent increase from N2.57 trillion in June 2019. This figure again proves that revenue growth was much slower than the rise in cost. 64% Companies in the agriculture sector were the most profitable of the 30 companies surveyed in H1 2020, as the combined profit of two companies representing the sector, Presco and Okomu, grew by 64 percent to N8.39 billion from N5.1 billion recorded in the same period last year. Presco and Okomu produce palm oil. While Presco grew profit after tax by 70 percent to N4.39 billion from N2.57 billion in H1 2019, Okomu recorded a profit after tax of N4 billion, a 58 percent increase from N2.5 billion as at June 2019. N475bn The biggest financial services companies grew their combined profit after tax by 1.40 percent to N475.3 billion in H1

2020 from N468.78 billion in H1 2019. The numbers analysed areforthe12commercialbanks that feature in the NSE 30. The combined share prices of the 12 banks dropped by 6 percent to N10.68 as the market closed on October 5, 2020, compared to N11.4 in January 2020. The companies that gave the sector a boost in the H1 2020 are Fidelity Bank, First City Monument Bank (FCMB), Stanbic IBTC, First Bank and Zenith Bank, as they grew profit by 33 percent, 28.8 percent, 24.7 percent, 23.8 percent, and 16.9 percent, respectively. On the other hand, United Bank for Africa (UBA), Ecobank Transnational Inc (ETI), Union Bank of Nigeria (UBN), GTBank and Access Bank saw profit dip by 21.7 percent, 18 percent, 9 percent, 4.9 percent and 1.36 percent, respectively. -N35.8bn The three oil and gas companies that make up the NSE 30 posted a combined loss of N35.8 billion in the first half of the year. The companies surveyed include, Total Nigeria, Seplat and 11plc. Mobil (11 plc) was the only oil and gas company that made a profit during the period, even though profits dipped by 39.6 percent to N2.5 billion in H1 2020, from N4.17 billion as at June 2019. Total Nigeria recorded a loss of N537 million in June 2020, a 513 percent crash from a profit of N129.9million recorded in the same period last year. Seplat also posted a loss of N37.8 billion in H1 2020, a

201 percent decline from the profit of N37 billion recorded in H1 2019. -51% The three biggest industrial goods companies saw profit dip by 51 percent to N117 billion in the first half of the year from N240 billion in H1 2019. Despite the drop in profit, the share price of the three companies increased by 3 percent to N67.25 from N65.3 year to date. Dangote Cement, the largest industrial goods company, saw profit plunge 70 percent to N58.9 billion in H1 2020 from N200 billion recorded in the same period last year. LafargeAfrica(WAPCO)had an impressive performance as the company’s profit shot up by 158.9 percent to N23 billion in H1 2020 from N9 billion recorded in the first half of 2019. BUA Cement also grew profit by 13 percent to N34.8 billion in H1 2020 from N30.6 billion recorded in the same period last year. -45% The largest companies in the consumer goods sector were the third greatest contributor to the profit decline of the NSE 30. The sector saw profit dip by 45 percent to N33bn in June 2020 from N60.8bn as at June 2019. Eight companies from the sector feature in the NSE 30. They include Guinness Nigeria, Unilever Nigeria, Nigerian Breweries, International Breweries and Nestle. Others are Flour Mills, Dangote Sugar and Nascon. The share price of the eight companies dipped 20 percent to N162.57 from N204.6 YTD.

The companies with the biggest declines in profit are Guinness (329%), Unilever Nigeria (181.9%), Nigerian Breweries (58%), International Breweries (36.7%) and Nestle (16.8%). The following companies were however able to grow their profit despite the pandemic: Flour Mills (98%), Dangote Sugar(5.51%),andNascon(2%). -32% Julius Berger, the only construction company to make the NSE 30 list, recorded a profit after tax of N1.9bn in the first half of 2020, a 32 percent decline from N2.8bn in the same period last year. Also, the share price of Julius Berger fell by 2 percent to N16.3 from N16.58 between January 1 and October 1, 2020. -4.7% MTN, the only telecom company among the NSE 30, saw its profit dip by 4.7 percent to N94.8bn for H1 2020 in contrast to N99bn in the same period last year. MTN’s share price has jumped29percenttoN135from N105 on a year-to-date basis. Top five companies with the biggest jump in profit in H1 2020 The top five profitable companies with the highest percentage increase in profit after tax are Lafarge Africa (158.9%), Flour Mills (98%), Presco plc (70%), Okomu Oil Palm (58%) and Fidelity Bank (28.8%). The five companies with the largest percentage decline in profit after tax are Total Nigeria (513%), Guinness Nigeria (329%), Seplat (200%), Unilever Nigeria (181.9%) and Dangote Cement (70%).

Oil producers fret as multilateral...

Stocks go the Bull lane with N1trn...

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for the “Principles for Responsible Banking” which include alignment with the Paris Agreement. They should all be working on plans to phase out fossil fuel finance. Other institutions that have expressed interest to divest include Norway’s sovereign wealth fund, the Catholic Bishops’ Conference of the Philippines, the Rockefeller Brothers Fund, the British Medical Association, Amundi Asset Management, Caisse des Depots, New York City, the City of Cape Town, KfW Group, Stockholm Univer-

sity, the Tate museums in the UK, Allianz Insurance, and St Mary’s Episcopal Cathedral, Edinburgh – the first cathedral in the world to divest. For example, Norway which racks in about $1 trillion sovereign wealth fund that’s come handy in softening the impact of the pandemic also prides itself on being a leader in the green transition. It’s got the biggest share of electric cars per capita, sponsors rainforest preservation across the globe and even claims its oil is just about the cleanest in the world thanks to low emissions in the production phase.

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vogue since 2009, which sought to use FGN bonds/T-bills and OMO bills as means of attracting US dollar to stabilise the naira, the recent OMO policy by the CBN, which prevents domestic investors from participating in the auction, has sent yields to its worst record. Effect from October 23, 2019, the apex bank banned non-bank locals (individuals and corporates) from participation in its OMO at both the primary and secondary markets. “Investors are taking a position in stocks with consistent @Businessdayng

dividend payment history and high dividend yield relative to the fixed income market,” Ebo said. BusinessDay analysis of the players driving the rally in the NSE shows that only a few stocks, which seem resilient to investors, are topping the gainer’s chart. While the rally in the stock market has been linked to only a third of the benchmark index’s 153 members, analysts believe the weak state of the Nigerian economy is the reasons why investors are only putting their funds on stocks that show resilience.

Wednesday 07 October 2020

BUSINESS DAY

POLITICS & POLICY Reps move to set time for hearing, determination of civil, criminal cases JAMES KWEN, Abuja

he House of Representatives has begun the process of altering the 1999 Constitution of the Federal Republic of Nigeria (as amended), to set time within which civil and criminal cases and matters are heard and determined at trial and appellate courts in order to eliminate unnecessary delay in justice administration and delivery. The move is contained in a Bill for an Act to alter the Constitution of the Federal Republic of Nigeria, Cap. C23, Laws of the Federation of Nigeria, 2004, sponsored by Onofiok Luke, member representing Etinan/ Nsit Ibom/ Nsit Ubium Federal Constituency of Akwa Ibom State. The Bill, which had scaled through first reading in the Green Chamber and a copy of which was sighted by BusinessDay, states that Chapter VII, Part IV of the Principal Act (1999 Constitution) is altered by inserting after section 287, a new section “287A”. The section “287A (1) provides that in any civil or criminal matter except in election

petition, a trial superior court of record shall deliver its judgment in writing within 270 days from the date of the filing of the civil or criminal matter. It also states that in any civil or criminal matter except in election petition, a trial inferior court of record or tribunal shall deliver its judgment in writing within 210 days from the date of the filing of the civil or criminal matter. The amendment stipulates that notwithstanding the provisions of subsections (1) and (2) of this section: “A trial superior court of record may deliver its judgment in writing within 330 having regard to the circumstances of the matter and in particular to the complexity of the matter, number of parties, number of witnesses, number of documents or other exceptional circumstances. “A trial inferior court of record may deliver its judgment in writing within 270, having regard to the circumstances of the matter and in particular to the complexity of the matter, number of parties, number of witnesses, number of documents or

other exceptional circumstances”. The proposed legislation prescribed that an appeal arising from a civil or criminal matter except in election petition shall be heard and judgment delivered in writing by an appellate court within 180 days from the date of the filing of the appeal, or such number of days not exceeding 270 days, having regard to the circumstances of the appeal and in particular to the complexity of the appeal, calling of fresh evidence or other exceptional circumstances. It provides that: “No judgment of court shall be a nullity for the only reason that it was not delivered within the time set by this section of the Constitution. “Where in a particular legal year, any court delivers judgment beyond the time set by this section of the Constitution relying on exceptional circumstances, the judicial or presiding officer of the court shall before the beginning of a new legal year send a report on any such matter to the National Judicial Council and state the exceptional circumstances.

Lagos East: I am confident of defeating Abiru, APC - Gbadamosi

… Says true federalism, restructuring solution to state’s problems INIOBONG IWOK

abatunde Gbadamosi, candidate of the People’s Democratic Party (PDP) for the October 31 senatorial by-election, has said that he was confident of emerging victorious by defeating his main rival and candidate of the ruling All ruling Progressives Congress (APC), Tokunbo Abiru in the election. The Lagos East Senatorial seat became vacant after the death of Senator Bayo Osinowo. Gbadamosi, a real estate mogul, was the Action Democratic Party (ADP) governorship candidate in the 2019 election. Speaking with journalists shortly after opening his campaign office in Shomolu, Gbadamosi said the APC candidate was not his match because contesting the by-election was not his decision. He promised purposeful representation of the constituency if elected; stressing that it was time the people of the constituency were liberated from the grip of some

APC candidate, Abiru, canvasses police reforms …Says, ‘SARS must stop killing youths

he candidate of All Progressives Congress (APC) for the Lagos East Senatorial by-election, Tokunbo Abiru, on Tuesday canvassed comprehensive reforms of the Nigeria Police as one of the strategies to end the brutality of youths by the Special Anti-Robbery Squad (SARS). Abiru, who is the immediate past group managing director/chief executive officer, Polaris Bank Limited, also rejected arbitrary arrest of youths carrying laptops or holding android phones, noting that, “it is a practice that must not have a place in our policing or criminal investigation system.” The candidate, while speaking at a meeting with stakeholders in Ijede Local Council Development Area (LCDA), promised to pursue comprehensive police reforms, condemning the attack on a young citizen in Ughelli, Delta State on October 3 and extra-judicial activities of some SARS operatives across the federation. At the meeting were also the Chairman of APC Senatorial Election Campaign Council, Kaoli Olusanya; husband of Ogun State Deputy Governor, Bode Oyedele; a federal lawmaker repre-

individuals in the state. The PDP stressed that the constituency had not received enough attention by successive administrations in the state, while lamenting the decay of infrastructure. According to him, “We are confident that we would take this seat because of the special dynamics that exist in Lagos East. Lagos East is one of the most deprived in terms of infrastructure, a lot of investment from people like me, Dangote, and others in Ikorodu, but all this investment has not been accompanied by infrastructure by the government. “There is governance absence in the whole of Lagos East, but the governors have been restricted by the godfather, who is the real governor of Lagos State. The governors have not been able to make decisions without his input and when they do, it is often reversed”. Speaking further, he dismissed calls for special status for Lagos State, saying that the solution was for Nigeria to practise true federalism and for the nation to be restructured to guarantee development.

Lagos Assembly urges Buhari to address agitations for restructuring, dialogue INIOBONG IWOK

L The candidate of All Progressives Congress (APC) for Lagos East senatorial by-election, Tokunbo Abiru flanked by Chairman of Ijede LCDA, Salisu Jimoh (left); Chairman of the APC Senatorial Campaign Council, Kaoli Olusanya (first right) during a street march in Ijede LCDA ahead of the October 31 senatorial by-election in Lagos East … on Tuesday

senting Ikorodu Federal Constituency II, Hon. Jimi Benson, and Majority Leader of Lagos State House of Assembly, Hon. Sanai Agunbiade, among others. Speaking at the meeting, the APC candidate expressed grave concern over the activities of SARS, an arm of the Nigeria Police, and cases of recent and previous instances of brutality and extra-judicial killings. Abiru observed that the most recent incident involved “a young Nigerian in Ughelli, Delta State on October 3. This incident reportedly typifies the extrawww.businessday.ng

judicial activities of some SARS operatives across the federation.” While he described the decision of the InspectorGeneral of Police, Mohammed Adamu, to ban all the tactical squads of the force, Abiru noted that the ban was “not sufficient to guarantee or restore confidence of our youths, and indeed the entire countrymen, in the police.” Among others, the tactical squads, which were banned on Monday, comprise SARS, Federal Special Anti-Robbery Squad (FSARS), Special Tactical Squad (STS), Intelli-

gence Response Team (IRT) and Anti-Cultism Squad, among others. However, Abiru acknowledged that the ban of the tactical squads “is a required step that should be taken and I am happy that this first step has been taken.” Beyond IGP’s decision, Abiru said the time “to end all extra-judicial activities by everyone of our security organisations is now,” saying he was committed “to this agenda as a citizen that places high premium on every life, mainly our youths on whose shoulders rest the future of our fatherland.”

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When asked if he had confidence in the electoral system, he noted that recent elections had been encouraging; stressing that incumbent President Muhammadu Buhari may be willing to leave a legacy behind. “Special status is not something I believe in; I am a greater believer in devolution of powers. I believe in domestication of corporate taxes, corporate governance, so that instead of having to register companies in Abuja, Lagos State should have limited liability companies where we pay corporate and consumption tax, which should be local. “But we are operating a unitary system instead of true federalism; we need restructuring of Nigeria; we need true federalism. When that happens, every state with resources would see growth. “It is a gradual thing, the process, right until the recent election in Edo, there was little to cheer. We saw what happened in Osun, Ekiti and other places where elections won by PDP were declared inconclusive.

awmakers in the Lagos State House of Assembly have urged President Muhammadu Buhari to listen to agitations from Nigerians for restructuring and dialogue on the future of the country with a view to addressing their fears. They also urged Governor Babajide Olusola SanwoOlu of the state to continue to provide the necessary atmosphere for the economic development of the state. The lawmakers took turns to speak on the 60th independence anniversary of the country after the Deputy Majority Leader of the House, Noheem Adams raised the issue during plenary on Monday 5th October, 2020 under Matter of Urgent Public Importance. Adams recalled that Nigeria got independence on 1st October, 1960. Going down memor y lane, he said that it was on 1st October 1900 that the Northern and Southern Protectorates were created and that in 1914, the northern and southern protectorate were amalgamated. “The Motion for the independence of Nigeria was moved in 1953 by Anthony @Businessdayng

Enahoro. We got independence in 1960, but we have had issues such as the civil war, economic challenges and others. “Since independence, the issue of national unity has always been the problem. The issue of economic development has been a problem and we have been depending on oil and attention has not been on industrialisation. “Lagos has always been at the forefront of development for the country, so the state needs to be given a special status,” he said. The Speaker of the House, Mudashiru Obasa said in his comment that the views of the lawmakers were not the same and that what they wanted were different. “If we talk about what we have achieved, we should compare it with the fund that we have had and see if they commensurate. “We should look at the countries that have developed not those that are struggling. We should look at our problems and see what we have done wrong. “We talk about poverty, unemployment, inflation, lack of qualitative education, ethnic division, Oodua, Biafra, Arewa and the people of Niger Delta are making agitations.

Wedneday 07 October 2020

BUSINESS DAY

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Wednesday 07 October 2020

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FG signs bilateral air agreement with USA, India Morocco, Rwanda IFEOMA OKEKE

he Federal Government has signed a Bilateral Air Service Agreement (BASA) with the USA, India, Morocco as well as Rwanda. Hadi Sirika, minister of aviation in his twitter handle @hadisirika stated, “I am glad to announce that Mr President, on behalf of Nigeria, has signed the instruments of ratification of the bilateral air service agreement between Nigeria and USA, India, Morocco as well as Rwanda.” This development is coming after experts have also called on the federal government to review the country’s BASAs. BASA, founded on the principle of reciprocity, is a deal that enables a country’s airlines to enjoy equal lever-

age, in terms of flight operations, in countries with which their home country has an air agreement. John Ojikutu, member of the aviation industry think tank group, Aviation Round Table (ART) and chief executive of Centurion Securities, told BusinessDay that the concerned authorities need to first identify the places where private airlines or private aircraft can be accommodated in the existing BASAs between Nigeria and these countries. “We had a similar problem with Arik operations to the UK some years ago and there were some ‘diplomatic’ moves that restored the airline operated from Gatwick to Heathrow. The question I asked then was; what would happen if tomorrow you get a national carrier flying; would the national carrier be flying to Gatwick or to Heathrow? “Some of these interven-

tions in private operations and international operations are not well thought out government decisions but unilateral exploitations of the systems by some individuals in official capacities. My take is, if we don’t have a national carrier, let there be flag carriers as all American Airlines are but there must be policies and regulations to become one. “That is why I said nationally, we must have policies that classify our airlines as regional flag carriers, continental flag carriers or intercontinental flag carriers. If Air Peace is being refused flights to UK now but BA is still allowed to fly into Nigeria, we must revisit the agreement that allowed Air Peace into UK pre covid19 within or without the BASA between the two countries if it is not a unilateral arrangement outside the BASA,” Ojikutu explained.

13% derivation fund creates opportunities for corrupt politicians - NEITI DIPO OLADEHINDE

ost of the communities living in the oil-rich Niger Delta region are not benefitting from the 13 percent derivation fund; rather it has created a window for corrupt politicians, said the Nigeria Extractive Industry Transparency Initiative (NEITI) in a newly released report. Despite being at the epicentre of several developmental policy initiatives aimed at assuaging the negative consequences of oil extraction in the region, some stakeholders say the development outcomes from those initiatives have met only minimal expectations. “Most of the communities are of the strong opinion that the funds have not in any significant way

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changed their living conditions for the better,” NEITI said. NEITI added that the funds have created opportunities for politicians, public office holders and their cronies to line their pockets while the people suffer from a lack of basic needs such as good roads, safe drinking water, health centres, electricity, and street lights. Revenue allocation in Nigeria is a controversial issue particularly the `principle of derivation’ which is highly contentious in the country’s fiscal federalism since oil discovery in 1958. The Federal Government was forced to concede 13 percent of the revenue accruing from oil to the Niger Delta states following violent agitation by groups in the region who felt excluded from the benefits of crude

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oil produced in their region. The fund is geared towards checking poverty, youth employment, and violence, among others in the region with states such as Bayelsa, Cross River, Delta, Edo, Akwa Ibom and Rivers, and adjoining states of Abia, Imo, and Ondo. However, the majority of the communities have been accusing the governors of diverting the money, denying their people the basic necessities of life. For example, four subnational oil producers and revenue earners which include Akwa Ibom, Bayelsa, Delta and Rivers States which received N1.60 trillion, N1.20 trillion, N1.38 trillion and N1.54 trillion, respectively from 2001 to 2018 are also among the highest indebted states in Nigeria.

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Wednesday 07 October 2020

BUSINESS DAY

news

IMF extends debt service relief for 28 low-income countries by 6 months Hope Moses-Ashike

he executive board of the International Monetary Fund (IMF) has announced the approval, on October 2, 2020, of a second six-month tranche of debt service relief for 28 member countries under the Catastrophe Containment and Relief Trust (CCRT). This approval follows the first six-month tranche (April 14-October 13, 2020) approved on April 13, 2020 and enables the disbursement of grants from the CCRT for payment of eligible debt service falling due to the IMF from October 14, 2020 to April 13, 2021, estimated at SDR 161 ($227) million. Subject to the availability of sufficient resources in the CCRT, debt service relief could be provided for a total period of two years, through April 13, 2022, estimated at nearly SDR 680 ($959) million. Relief on debt service will free up scarce financial resources for

debt service relief on obligations to the Fund falling due during the April 14 through October 13, 2020 assisted its poorest and most vulnerable members tackle the pandemic and its repercussions. Directors welcomed the country updates on the policy responses to the pandemic of CCRT beneficiary countries. They underscored the importance of continued followthrough on governance and transparency commitments by beneficiary countries to safeguard priority and Covid-19-related spending. Directors concurred that countries that received the CCRT debt relief are, in the main, pursuing sensible macroeconomic policies to support stability in response to the economic fallout from the pandemic. They also agreed that resources freed up by the initial tranche of CCRT debt service relief were helping to provide emergency health, social and economic support to mitigate the impact of the pandemic on lives and livelihoods.

vital emergency medical and other relief efforts while these members combat the impact of the Covid-19 pandemic. In the context of the approval of the first tranche, IMF managing director, Kristalina Georgieva launched an urgent fundraising effort that would enable the CCRT to provide relief on debt service for up to a maximum of two years, while leaving the CCRT adequately funded for future needs. This will require a commitment of about SDR 1 billion ($1.4 billion). Thus far, donors have provided grant contributions totalling about SDR 360 million, including from the UK, Japan, Germany, the Netherlands, Switzerland, Norway, China, Mexico, Sweden, Bulgaria, Luxembourg, and Malta. Executive directors underscored that the Covid-19 pandemic continues to exact a serious human and economic toll on the Fund membership. In this context, directors noted that Catastrophe Containment and Relief Trust (CCRT) grants for

Directors agreed that the available resources are sufficient to finance a second six-month tranche of debt service relief under the CCRT. Accordingly, they approved grant assistance for relief for 28 of the 29 eligible members with debt service falling due during October 14, 2020 and April 13, 2021 and looked forward to bringing the proposal for the remaining one member soon. Directors noted that the Fund has received grant pledges of just over one-third of the SDR 1 billion fundraising target and noted that available resources will need to be boosted to support the approval of future tranches. To this end, directors welcomed the generous contributions in recent months and stressed the importance of ongoing efforts to secure additional resources for timely grant assistance in the future. Directors agreed that it would be useful to conduct stocktaking on the CCRT before the end of the second tranche period in April 2021.

Glo moves to expand share of data, voice subscribers with Berekete FRANK ELEANYA

lobacom, Nigeria’s third-largest telecommunication company, has unveiled a new pre-paid tariff plan targeted at data and voice subscribers in Nigeria. According to Globacom, on Tuesday, existing subscribers who recharge a minimum of N100 would get a 700 percent bonus consisting of data and voice bundles. For new subscribers who have fully registered their SIM, recharged their lines, and have made the first call, there is a welcome bonus of N600, out of which N400 will be used for calls to all networks while N200 will be dedicated to data. Also, new customers who purchase between N50 and N10,000 worth of data plan are entitled to 100 percent extra data volumes. However, they will only reap this benefit for the first four months of joining the network. “At Globacom, we are continually seeking new ways to add value to the lives of our esteemed customers,” the company noted in a statement. “This

is one of such ways, and we can assure our customers that we will not relent. Our pledge is that we will continue to meet and exceed their expectations.” Earlier in the year, Globacom had launched products such as ‘My Own Don Better, Stay Home Data Plan’ in which it gave out 20 percent more data to all consumers to stay at home; Mega Data Plan which serviced the needs of customers with bigger data appetite; and Sponsored Data tailored towards the enterprise community for consumers to visit their websites without data. Bereket is expected to be the default tariff that new consumers will get. The telco also announced the signing of new brand ambassadors including Michael Collins Ajereh, popularly known as ‘Don Jazzy’, music sensation, Teniola Apata, also known as Teni The Entertainer; Simisola Kosoko who is better known as ‘Simi’, Odion Ighalo, Africa’s highest scorer at the last Nations Cup and Manchester United attacker; and Anthony Olaseni Joshua, World Heavyweight Champion who currently holds four boxing titles.

Nigeria’s first education microfinance bank partners Lagos State to provide low-cost funds STEPHEN ONYEKWELU

L-R: Gabriel Idahosa, vice president, Lagos Chamber of Commerce and Industry (LCCI); Muda Yusuf, director general; Toki Mabogunje, president; Michael Olawale-Cole, deputy president, and Babatunde Ruwase, immediate past president, during the quarterly press conference of the Lagos Chamber of Commerce and Industry on the state of the economy in Lagos, yesterday.

Insecurity, debt, Form ‘M’ policy hurting economy—LCCI Odinaka Anudu& Gbemi Faminu

nsecurity, huge debt profile and a policy on Form ‘M’ are all hurting the Nigerian economy, pushing businesses to the brink, according to the Lagos Chamber of Commerce and Industry (LCCI). At a ‘state of the nation’ press conference held on Tuesday in Lagos, the chamber said security breaches across the country were impacting negatively on investors’ perception of Africa’s most populous nation as an investment destination. “We call for an urgent review of the current security architecture to fix the seemingly worsening security situation,” Toki Mabogunje, president of the LCCI, said. Public debt stock grew by eight percent to N31 trillion at the end of the second quarter,

according to the Debt Management Office. The Federal Government recently got $3.4 billion and $288.5 million from the International Monetary Fund (IMF) and African Development Bank (AfDB) respectively, while negotiations are also on-going for a cumulative $1.8 billion credit support from the World Bank, African Development Bank (second tranche) and Islamic Development Bank. Mabogunje said adding this toprospective domestic issuances could possibly push the country’s public debt stock to around N34 trillion by yearend, equivalent to 23 percent of the gross domestic product (GDP). “The growing level of the country’s debt is fast becoming unsustainable in the light of dwindling oil prices and production. Our position is

reinforced by the uptrend in debt-service to revenue ratio from 60 percent by year-end 2019 to 72 percent as of May 2020. The high level of debt servicing continues to hinder robust investments in hard and soft infrastructures mwhich are key to stimulating productivity and improving living standards,” she said. The CBN, had in late August, instructed authorised dealers to only open ‘Form M’ for letters of credit, bills for collection and other forms of payments in favour of the ultimate suppliers of the products or services or original equipment manufacturers (OEMs). This excludes millions of MSMEs from getting the much needed foreign exchange. Muda Yusuf, director-general, LCCI, said the directive had disrupted many businesses, especially SMEs which

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constitute over 80 percent of businesses. He called for the review of the policy. According to Mabogunje, inappropriate foreign exchange policies could discourage fresh capital inflows, be it foreign direct investment, portfolio investment, remittances, or non-oil export proceeds into the economy. “This fact is evidenced by the sharp plunge in the level of capital imported into Nigeria, from $5.9 billion in the first quarter to $1.2 billion in the second quarter, partly caused by the capital control policy of the CBN,” Mabogunje explained. She said that in trying to protect the country’s FX, it was necessary to address problems on the supply side and not just concentrate on those who demand for FX.

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d Fi n Mi c ro f i na n c e Bank, Nigeria’s first financial institution dedicated to funding education has partnered with the Lagos State Employment Trust Fund (LSETF) to provide single-digit interest rate loans to over 2,000 private schools and individuals looking to fund their education in Lagos. This N5 billion intervention fund is part of the Lagos State government’s initiative to help schools recover from the shocks and losses because of Covid-19. Depending on capacity, each school will have the opportunity to access up to N5 million payable over 30 months at 9 percent per annum. Speaking at a webinar last week, Teju Abisoye, executive secretary of the Lagos State Employment Trust Fund (LSETF), announced the partnership with EdFin Microfinance Bank. He said it was a matching fund loan programme to support the education sector in Lagos State. The loans are targeted at s chools and relevant educational institutions such as vocational training centres that have been in operation for over one year. The loan will also support young people looking for financing to fund their education. LSETF recognises that the education sector creates jobs, and from the previous programmes done @Businessdayng

by LSETF, the education sector is a promising sector that will create the kind of numbers and jobs we need in Lagos state. Quality education is an important part of human welfare and existence and LSETF is happy to be affiliated with EdFin Microfinance Bank, the first specialised education finance bank to provide this service to affordable and flexible financing for all actors in the education ecosystem. Bu n m i L aw s o n , M D / CEO of EdFin MfB, is elated at partnership and thanks the Lagos State government for the initiative. She said this was the first dedicated education fund in Nigeria and EdFin being the first specialised education finance bank is happy to partner with the Lagos State government and the Lagos State education ecosystem to support schools with the funding they need. The fund will also assist employable persons fund their tuition to improve skills thus enabling then increase their income. Lawson stated that while the past seven mo nt hs have b e en ver y challenging especially for school owners due to the global pandemic, there was cause for optimism as new opportunities emerge as schools gradually reopen. She therefore encouraged all private school owners to leverage and maximise the unique opportunity this intervention provides to help position their schools to harvest the gains of the post lockdown era.

Wednesday 07 October 2020

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Live @ The Exchanges Market Statistics as at Tuesday 06 October 2020

Top Gainers/Losers as at Tuesday 06 October 2020 LOSERS

GAINERS Company

Opening

Closing

Change

DANGCEM

N144

N158.2

14.2

N6.5

N6.1

-0.4

MTNN

N135

N142.7

7.7

NPFMCRFBK

N1.37

N1.25

-0.12

PRESCO

N55

N60.5

5.5

NEIMETH

N1.95

N1.85

-0.1

N48.8

N52.3

3.5

REDSTAREX

N3.3

N3.25

-0.05

STANBIC

N40.5

N42.5

N0.39

N0.36

-0.03

Company

Opening

BERGER

WAPIC

Closing

Change

ASI (Points) DEALS (Numbers) VOLUME (Numbers) VALUE (N billion) MARKET CAP (N Trn)

28,909.37 8,075.00 749,467,693.00 9.495 15.110

NSE maintains upward trend as investors buy mid/large cap stocks Iheanyi Nwachukwu

igeria’s stock market maintained its upward trend till close of trading on Tuesday October 6, 2020 following bargain hunting activities in a number of mid-to-large cap stocks. Chief among stocks that impressed equity dealers and investors on Custom Street include Dangote Cement Plc which increased most from day open low of N144 to N158.2, adding N14.2 or 9.86percent. MTNN Plc followed after advancing from N135 to N142.7, adding N7.7 or 5.70percent. In the same vein, Presco Plc made the top advancers league after its share price moved from N55 to N60.5, adding N5.5 or 10percent; while Nigerian Breweries Plc moved from N48.8 to N52.3, gaining N3.5 or 7.17percent. Stanbic IBTC Holdings Plc also increased from N40.5 to N42.5, adding N2 or 4.94percent. At the close of trading, the Nigerian Stock Exchange (NSE) All-Share

Index (ASI) appreciated by 4.92percent, from 27,554.56 points to 28,909.37 points, while Market Capitalisation increased by N708billion, from N14.402trillion to N15.110trillion. “Undeterred by the persistent uncertainties in the global space, coupled with the challenges facing the do-

mestic economy, investors’ continued to take advantage of cheap valuations in the equities market as the All Share Index (ASI) extended its days of capital appreciation to twelve consecutive trading periods”, according to Vetiva Research analysts. The analysts however believe the index will main-

tain its bullish momentum on Wednesday, “due to the continued inflow of funds into the equity space”. In 8,075 deals, investors exchanged 749,467,693 units valued at N9.495billion. Zenith Bank, UBA, FBN Holdings, Access Bank and GTBank were actively traded stocks on the Bourse.

L-R: Daniel Braie, managing director/CEO, Linkage Assurance Plc and Amb. Kanu Nwankwo , former captain of Super Eagles of Nigeria during Linkage Assurance Plc’s 2020 Customer Service Week held at the Company’s head office in Lagos

Lafarge Africa to rewards customers in 60th anniversary promo Iheanyi Nwachukwu

afarge Africa Plc has launched a promotion to appreciate and reward loyal customers as it celebrates the 60th anniversary. The promo, which has been ongoing for retailers since May climaxed with its extension to end users in August and it will run until the end of the year. The promo is targeted at all levels of the value chain: wholesale, retail, blockmakers and end users who sell or use Lafarge Africa’s suite of quality products for their building and construction projects. In addition to the instant prizes worth over N80million, the block makers category will have the opportunity to win more prizes in 6 raffle draw events aimed to promote

brand affinity, product advocacy and sustain our relationship with this segment. The Blockmakers stand a chance to win 8 Horsepower Lister Generators, 1.8kva generators, Block making machines, 2,000 litre water tanks and other household items. Lafarge is the first company to produce cement in Nigeria with quality products and iconic brands including Elephant cement, Lafarge Elephant Supaset, AshakaCem and Unicem brands for the local market; relying on its global expertise. Recently it has introduced innovative products like the newly improved Elephant Supaset in horizontal bags and Supafix tile adhesive. In addition to these outstanding brands, Lafarge also offers other specialised solutions for advanced constructions while

n the mechanics of the promo, Augustina Sobo-

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providing fee advisory services and customer service to support all customer needs. To commemorate the 60th Anniversary, Lafarge rolled out a marketing communication campaign tagged “We built this city.” The campaign showcases some of the iconic structures which Lafarge has built through the years. Such structures include: the National theatre Lagos, the Lekki-Ikoyi link bridge Lagos, National Assembly Abuja, Tinapa Resort Calabar, Akwa Ibom Stadium etc. These monuments are part of the Nigerian landscape of development – thus Lafarge has partnered in building Nigeria since independence. This campaign is being exposed on electronic, digital and outdoor media. As the company celebrates its 60th anniversary in Nigeria, it reiterates the loyalty

of customers which has sustained its profitability buoyed by increased sales, a steady demand for its range of innovative and international standard products. “This promo is designed to appreciate our customers who have been loyal to our brand over the years and to also show our potential customers that apart from the unparalleled products that we offer, Lafarge Africa is a company of choice. In this promotion, ‘Everyone is a winner”, Gbenga Onimowo, the company’s Commercial Director said. He added that home builders, artisans, engineers and contractors all over Nigeria have rewarded Lafarge’s commitment to the country as demonstrated in the increasing sales and stability and growing profitability of Lafarge operations.

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Global market indicators FTSE 100 Index 5,949.94GBP +7.00+0.12%

Nikkei 225 23,433.73JPY +121.59+0.52

S&P 500 Index 3,404.27USD -4.36-0.13%

Deutsche Boerse AG German Stock Index DAX 12,906.02EUR +77.71+0.61%

Generic 1st ‘DM’ Future 28,042.00USD +47.00+0.17%

Shanghai Stock Exchange Composite Index 3,218.05CNY -6.31-0.20%

Customer Service Week 2020: FCMB celebrates the spirit of team work, commits to excellent service

irst City Monument Bank (FCMB) has restated its commitment to provide the very best of service delivery and value-added offerings that will consistently enhance the experience of its teeming customers at every touch point. The Bank further assured that it will continue to leverage on its solid business models, highly professional staff, innovation, bespoke solutions and technology to turn the aspirations of customers to life changing opportunities. FCMB gave the assurance in a statement to commemorate this year’s international Customer Service Week, holding from October 5 to 9, 2020, under the theme, “Dream Team”. The theme essentially highlights the importance of teamwork in providing outstanding service to all customers at this challenging period. Moreover, it serves as a tribute to teams who work together to provide excellent and magical service to customers, most especially those that have embraced new work arrangements, passionate about what they do, strive for excellence, adapt to change and value teamwork despite the menace of the COVID-19 pandemic.

The Customer Service Week, which started 36 years ago, is a period set aside to recognise and appreciate the job done by people in service organisations in a way that emphasises the importance of customer service in running successful businesses as well as the role of employees towards achieving this. In the statement, FCMB announced several exciting activities to make this year’s Customer Service Week memorable and impactful, as the event offers another opportunity to further connect, engage and appreciate customers for their unbridled loyalty and patronage in the last 38 years that the lender has been in existence. The activities include, a customer appreciation drive whereby customers who buy airtime worth N500 and above via the Bank’s *329# USSD channel get a 10 percent bonus add-on all through the week; a virtual question and answer session between customers and the Divisional Head, Service Management & Technology. This will afford customers an opportunity to get first hand responses and clarifications on matters relating to their business relationship with the Bank.

Berger Paints appoints Obi as CFO

erger Paints Nigeria Plc has appointed Pheobe Onyinye Obi as its Chief Financial Officer. The appointment, which is consistent with the company’s policy of attracting talents has been endorsed by the Nigerian Stock Exchange, according to a statement from the leading manufacturer of coating and allied products. “We are pleased to inform our stakeholders and by extension, the public, that in furtherance of its’ plan to strategically position the Company’s operations for increased efficiency and enhanced value creation, the Board of Berger Paints Nigeria Plc (BPN), has approved the appointment of Pheobe Onyinye Obi as the Chief Financial Officer”, says the statement. Obi, an accomplished Chartered Accountant and Finance expert comes with robust industry experience, both local and international, spanning over fifteen

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years, including Strategic Planning, Budgeting, and Corporate Finance for highgrowth organizations. Prior to her appointment with Berger Paints Nigeria Plc, she worked with KPMG Professional Services (KPMG) from 2009 to 2018, where she rose from Senior Associate to Management Level. At KPMG, she spearheaded projects in Consumer Markets, adding several companies to the existing client base. Additionally, she met and surpassed deadlines and requirements of multinational group reporting both under IFRS and local statutory reporting requirements. Thereafter, she was engaged as Senior Accountant at Lion Seal Industries Limited, from January 2019 till March 2020, before joining the United Kingdom (U.K) based firm of Nomiworld and Sochitel Telecommunications Limited as Head, Compliance and Financial Controls in April 2020.

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BUSINESS DAY Wednesday 07 October 2020 www.businessday.ng

The changing geopolitics of energy

America’s domination of oil and gas will not cow China Being an importer of fossil fuels and an exporter of renewable technology is not so bad

“T

HE UNITED STATES OF AMERIC A is now the number-one energy superpower anywhere in the world,” President Donald Trump told oilmen in Midland, Texas this summer, from a stage decorated with gleaming black barrels. The sheer volume of hydrocarbons that such American oilmen have released from the shale beneath Midland and previously unforthcoming geology elsewhere gives substance to his boast (see chart 1). Over the past decade America’s oil output has more than doubled and its gas production increased by over 50%. America is now the world’s top producer of both fuels. Had they heard Mr Trump say that “We will never again be reliant on hostile foreign suppliers,” presidents from Franklin Roosevelt on might have nodded in envious approval. After the second world war America’s unmatched ability to consume oil outstripped its unmatched ability to produce it. Ensuring supplies from elsewhere became an overriding priority. The oil shock of the 1970s had a profound effect both on the economy and on geopolitics, driving much of America’s subsequent involvement in the Middle East. The surge in domestic supply in the 2010s both boosted the economy and opened up new geopolitical opportunities. America can apply sanctions to petrostates such as Iran, Venezuela and Russia with relative impunity. But what it might mean to be an energy superpower is changing, thanks to three linked global shifts. First, fears about fossilfuel scarcity have given way to an acknowledgment of their abundance. Not least because of what has been achieved in America, the energy industry now knows that it will be lack of demand, not lack of supply, which will cause production of oil, coal and, later, gas to dwindle. In its latest “World Energy Outlook”, published on September 14th, BP, an oil company which has recently said it plans to go carbon neutral, argues that demand for oil may already have peaked, and could go into steep decline (see chart 2 ). This is because of the second shift: an acknowledgment by most countries that, for the sake of the climate, reliance on fossil fuels needs to come to an end. And that leads to the third shift: electrification. Fossil fuels provide heat that is mostly used to move things, be they vehicles or electric generators. Solar panels and wind turbines provide energy as electricity straight off.

Maximising their emissions-free benefits means processes and devices that now rely on combustion must in future use currents and batteries instead. The BP analysis argues that in a world going all out for decarbonisation the share of energy used in the form of electricity would rise from about a fifth in 2018 to just over half in 2050. Falling demand for fossil fuels will tilt the balance of power away from producers and towards consumers—though there will doubtless be reversals now and then along the way. And in a world which needs to generate much more fossil-free electricity, mass production of the means whereby to do so will become crucial, as will government backing and know-how in deployment. Being a mighty pumper of oil will do a lot less for America under such conditions than once it might have done. But China, the world’s biggest fossil-fuel importer as well as its leading exponent of renewable energy at gigawatt scales, will have the wind, as it were, at its back. The covid-19 pandemic has provided a dramatic preview of a world in which demand for

oil falls instead of rising. When the globe stopped spinning in March, its thirst for oil suddenly subsided. Petrostates dependent on pricey oil for their spending now face gaping deficits. Investors have fallen out of love with oil companies. For all Mr Trump’s grateful boosterism, the value of America’s shale sector has fallen by more than 50% since January. ExxonMobil, an oil company included in the Dow Jones Industrial Average since 1928, has been kicked off it. With a market capitalisation of $155bn it is worth considerably less than Nike, a shoemaker with a swoosh. In the face of this turmoil China’s demand for oil imports, already the largest in the world, continues to grow—providing some welcome stability. The country’s independent refiners—the “teapots”—have become large enough that they help set oil’s price floor. “They are essentially the vacuum cleaner of the crude market,” says Per Magnus Nysveen of Rystad Energy, a consultancy. Michal Meidan, who leads China energy studies at Oxford University, points out that the trading

‘‘

What China lacks in oil and gas supplies it makes up for with industrial policy, which it has long been using to support domestic coal production and nuclear power as well as what is now by far the world’s largest renewables sector

arms of state-owned oil giants SINOPEC and China National Petroleum Corporation are now two of the three largest traders of crude cargoes priced on the Platts Dubai futures contract, which means they influence the price of crude bound for Asia. Low prices also allow China to build up its strategic reserves. Big finds off the coasts of Brazil and Guyana and the development of Australia’s liquefied natural gas (LNG) capacity, along with America’s shale boom, add to China’s opportunities; a buyers’ market is a good place to be the biggest buyer, notes Kevin Tu of Columbia and Beijing Normal Universities. There are plenty of bullish oilmen who think that, BP to the contrary, peak demand has yet to be reached. But even they recognise that the supply of oil below ground outstrips the thirst above it, and that competition for customers is likely to heat up. In some instances competition for Chinese demand may be straightforward. When it embarked on a price war with Russia this spring, Saudi Arabia slashed prices on shipments bound for China. The country’s biggest refiners are mulling a plan for a buying consortium to strengthen their negotiating power with the Organisation of the Petroleum Exporting Countries. China will probably also flex its financial muscle as petrostates buckle under debt. It has issued oil-backed loans to crude-rich countries such as Angola and Brazil for more than a decade. China’s position as a buyer also allows it to undercut America’s attempts to squeeze oil exporters. Chinese buyers long continued to import Iranian and Venezuelan crude. Its energy alliance with Russia is particularly important.

A different strength As energy expert Daniel Yergin points out in “The New Map” (see article) Vladimir Putin realised the significance of energy relations with China early on; but the pivot to China became more urgent after the financial crisis of 2007-09. In 2009 the China Development Bank lent two state-controlled Russian companies, Rosneft, an oil producer, and Transneft, a pipeline builder and operator, $25bn in exchange for developing new fields and building a pipeline which would supply China with 300,000 barrels of oil a day. In 2014 Western sanctions over Crimea inspired Gazprom, another Russian energy giant, to commit to a long-haggledover gas pipeline, the Power of Siberia, which opened last December. Tying in Chinese custom gives Russia a large market unmoved by calls for sanctions at a time when European demand is faltering. But as Erica Downs of Columbia University points out, “As soon as a pipeline is built, the balance of power shifts from supplier to buyer.” After the first oil pipeline was built, China refused to pay the agreed price. All this power in the market, though, cannot mask the geopolitical downside of relying on imports. Being a large importer may give you more power than being a smaller one; but it still leaves you vulnerable. China is acutely aware that much of its oil comes through the straits of Hormuz and Malacca, which could be closed by third-party conflicts or, in extremis, the US Navy. In recent months China’s concern about energy security has risen as relations with America have declined, notes Ms Meidan—for all the current talk of decoupling, China has been buying lots of LNG from America, as well as crude for its stockpiles. Communist Party documents for China’s new five-year plan emphasise the need for a more flexible, reliable energy system. What China lacks in oil and gas supplies it makes up for with industrial policy, which it has long been using to support domestic coal production and nuclear power as well as what is now by far the world’s largest renewables sector. Chinese companies have invested in mines from the Democratic Republic of Congo (DRC) to Chile and Australia, securing access to the minerals needed for solar panels, electric vehicles and the like. Unable to be a petrostate, it is becoming what one might call an electrostate, investing strategically all along the chain from mine to meter.

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.