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news you can trust I ** wednesDAY 08 july 2020 I vol. 19, no 601

Lagos needs to invest in three-leg transportation system to become competitive – experts … US-based expert recommends use of mass transit, train, ferries … Aigbogun blames policy failures for perennial traffic congestion MIKE OCHONMA, CHUKA UROKO, AMAKA ANAGOR-EWUZIE, MICHAEL ANI & ENDURANCE OKAFOR

agos, Nigeria’s biggest commercial city’s quest to become a mega or smart city and a 21st Century economy, will depend, to a large extent, on the government’s political will to effectively solve its failed transportation system, public and private sector transportation experts have said. The experts, who spoke on Tuesday in a virtual meeting put together by the United States Consulate in Nigeria with the theme, ‘The Never-Ending Story, Lagos Traffic Congestion: What Can be Done? Will it be Done?, note that improving traffic situation by investing in a three-leg

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Overwhelmed by COVID-19, Nigerians face food crisis over disruptions to planting season Indorama shutdown has affected fertiliser availability for 2020 – NSIA

Ignatius Chukwu, Onyinye Nwachukwu, Odinaka Anudu, Josephine Okojie & Caleb Ojewale

wear y Nigerian population that has over four months endured the economic siege brought by the coronavirus (COVID-19) pan-

demic is facing an even harsher reality of food shortage. The scarcity of food will not only be about availability, but also affordability, which would further strain finances for millions of people whose incomes have already been hit by the pandemic. People dealing with pay cuts, job losses, and higher costs of

living may soon have to increase their feeding costs, an essential part of human existence even as some already resorted to rationing their food intake. Even with the cost of food that appears bound to increase, its supply will still not be able to meet demand of Nigeria’s 200 million population.

Many farmers across the country were unable to commence this year’s planting season at the right time due to movement restrictions that prevented them from accessing inputs such as seeds, fertilisers and even physical access to Continues on page 29

Continues on page 29

Inside

UBA Group announces appointment of deputy managing directors for Nigeria, Africa P. 28

L-R: Sarbeswar Sahoo, MD, Prestige Assurance plc; Doyin Salami, chairman, Prestige Assurance plc; Funmi Oyetunji, non-executive director, Prestige Assurance, and Diekola Onaolapo, CEO, Eczellon Capital Limited, at the signing ceremony of Prestige Assurance plc’s proposed rights issue in Lagos, yesterday.

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‘Democracy will fail if we don’t think as citizens’ Covid-19 could transform western societies. But without a stable middle class, the state risks succumbing to plutocracy

Martin Wolf

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t is clear then that the best partnership in a state is the one which operates through the middle people, and also that those states in which the middle element is large, and stronger if possible than the other two together, or at any rate stronger than either of them alone, have every chance of having a well-run constitution.” Aristotle, Politics Covid-19 has been a global shock. But will it be a transformative one? The answer is that it might be a transformative event for a number of western societies, notably the US and UK. For western liberal democracies, the era after the second world war can be divided into two sub-periods. The first, running roughly from 1945 to 1970 was the era of a “social democratic” or, as Americans might say, a “New Deal” consensus. The second, starting around 1980, was that of the “global free market”, or the “Thatcher-Reagan consensus”. Between these two periods came an interregnum — the high-inflation 1970s. We are now living in what seems to be another interregnum, which began with the global financial crisis. That crisis damaged the ideology of the free market. But, across the western world, valiant attempts were made to restore the ancien régime, through the rescue of the financial system, tighter financial regulation and fiscal austerity.

The New Social Contract Coronavirus has exposed frailties of our economic and social model. In a series of articles this week, the FT explores how the pandemic is forcing a rethink of the role of citizens, the state and business. Will low-paid workers ever get a raise? Tuesday, July 7 Who will pay the bill? Taxing multinationals Wednesday, July 8 Generation is the new class - the crisis for millennials Thursday, July 9 How business became addicted to debt Friday, July 10 In the event, the rise of populist nationalism followed this attempted restoration. With his protectionism and bilateralism, promise to preserve social security and initial (since forgotten) emphasis on rebuilding infrastructure, Donald Trump became leader of his party because he was not a traditional free-market Republican. With his commitment to levelling up poorer regions and favourable references to Franklin Delano Roosevelt’s New Deal, Boris Johnson has also indicated a new direction of travel. These leaders have buried Ronald Reagan and Margaret Thatcher. Coronavirus has also now caused a still more dramatic return of government than the financial crisis. This may mark the end of the second postwar period of transition. Around what idea might politics, society and the economy now revolve? The answer should be citizenship, a concept that goes back to the city states of the Greeks and Rome. It is more than just a political idea. As Aristotle also said: “man is a political animal”. We are only fully human, he thought, as active participants in a political community. In a democracy, people are not just consumers, workers, business owners,

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In a democracy, people are not just consumers, workers, business owners, savers or investors. We are citizens. This is the tie that binds people together in a shared endeavour

savers or investors. We are citizens. This is the tie that binds people together in a shared endeavour. In today’s world, citizenship needs to have three aspects: loyalty to democratic political and legal institutions and the values of open debate and mutual tolerance that underpin them; concern for the ability of all fellow citizens to lead a fulfilled life; and the wish to create an economy that allows the citizens and their institutions to flourish. Anger and despair at the system The most important reason for emphasising citizenship today is that outlined by Aristotle almost two and a half millennia ago. A necessary condition for the stability of any constitutional democracy is a thriving middle class (by which is meant people in the middle of the income distribution). In its absence, the state risks turning into a plutocracy, a demagogy, or a tyranny. With the hollowing out of the middle class, even established western democracies are now in danger. As Eric Lonergan and Mark Blyth argue in Angrynomics, the combination of adverse economic developments with manifest unfairnesses has made many people angry. In , Anne Case and Angus Deaton argue that these developments have also driven many into severe ill-health. They note that the death rates of middle-aged white Americans have risen since 2000. Something similar seems more recently to be happening in the UK. “Deaths of despair”, they suggest, “are prevalent among those who have been left behind, whose lives have not worked out as they expected.” How did we get here? How does Covid-19 fit in? And how might our ideas and policies need to change? The postwar settlement worked

well, for a while. It was egalitarian and economically dynamic, especially in countries devastated by war. Western governments took an active role in managing their domestic economies, while simultaneously liberalising and expanding foreign trade. Intellectually, this should be called the Age of Keynes. But it died with the surge in inflation, which precipitated the labour unrest and economic slowdown of the 1970s. The Keynesian era was then followed by that of Milton Friedman, characterised by globalisation, liberalised markets, low marginal taxes and a focus on controlling inflation. This new global era saw striking successes, notably reductions in global inequality and mass poverty. It also was an era of important innovations, notably in information technology. Not least, it was the era in which Soviet communism collapsed and the ideal of democracy spread across the world. Yet a number of big weaknesses emerged. Economic growth in highincome countries tended to be low relative to that achieved in the postwar era. The distribution of income and wealth became more unequal. The economic value of relatively uneducated labour fell relative to that of college graduates. Labour markets became more “flexible”, but earnings were more precarious. The more unequal the society, the lower its social mobility. In cultures that emphasise the obligation to look after oneself, inequality as such may not be so socially or politically destabilising. But the sense of deteriorating prospects for oneself and one’s children certainly matters. So, too, does a strong sense of unfairness. FT

Nigeria’s neglect of education and Anambra’s educational champions

obody can convincingly controvert the fact that education is the bedrock of national development. Countries with functional educational systems invariably have reputable good universities that offer students qualitative education and equip them with skills. They are research-oriented schools. And they produce knowledgeable graduates, who can contribute their quotas to the technological, scientific, and economic development of their countries. It is the humans, who can mobilise and galvanise other factors of production and drive developmental initiatives in their countries. That is the chief reason why USA, Britain, France, Germany, Israel, and Canada have achieved technological advancement and economic prosperity. And many centuries ago, during the pre-colonial era, the empire of Mali reached the zenith of its power, flourished, and proposed because of the existence of the Timbuktu University, there. Sadly, in Nigeria, since the inception of the second republic, the quality of education obtainable in Nigerian schools, ranging from the kindergarten to the tertiary level, has been decreasing, steadily. The pitiable condition of our schools as well as our dysfunctional educational system is majorly caused by the government’s utter and criminal neglect of educational issues in the country. Does our country’s annual budget reflect UNESCO’s Stipulations on member countries’ budgetary allocation for education? The stark fact is that matters affecting our education are being treated in a cavalier manner. Our government’s neglect of the education sector is graphically depicted by most public schools’ dilapidated buildings, with the roofs

blown off and the walls falling down. In some primary and post-primary schools in the north, the classrooms are bare of pieces of furniture; consequently, the pupils and students do sit on bare floor to learn. To make matters worse, the teachers moonlight to augment their meagre monthly salaries. So, not being unaware of our niggling educational problems, and teachers’ lack of enthusiasm for their teaching job, Peter Obi unveiled his educational roadmap, and religiously implemented it, which saw to the revamping and re-positioning of our schools, starting from the kindergarten level to the tertiary level. Not only did he donate classroom blocks to schools, he also bought buses for them, and equipped their science laboratories with tools and pieces of equipment. His successor in office, Willie Obiano, has continued to sustain and maintain the high tempo of improvement in the Anambra state’s educational sector. Their efforts at revamping and re-positioning the Anambra state educational system have been yielding positive results. Anambra state has been posting stellar and splendid performances in such examinations as NECO, SSCE, NABTEB, and UTME. Not long ago, students of Regina Pacis Secondary School, Onitsha, Anambra state, took other students from other countries to the cleaners in the Technova science competition in Silicon Valley, America. Till now, students from secondary schools in the state have continued to hold their own in global educational competitions. But Anambra state is the home state of globally recognized scholars, scientists, novelists, and great writers. Have you forgotten that the inimitable novelist, Chinua Achebe, hailed from Anambra state? Likewise, Chimamanda

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Ngozi Adichie, whose literary feats are reaching stratospheric heights, is from Abba, Anambra state. Again, Chike Obi, a great mathematician of global repute; Kenneth Dike, a world class historian; and Chuba Okadigbo, a scholar par excellence hailed from Anambra state. It appears that almost every native of Anambra state is blessed with immense mental gifts and endowed with the Anambra state’s spirit of enterprise, hard work, and sanguine disposition. That could be the reason behind Rose Nkem Obi’s emergence as the winner of the Nigeria’s Maltina Teacher of the Year Award at its maiden edition in 2015. And, in 2017, Clement Nwoye Okodo won the 2017 Federal Ministry of Education Teachers’ and School Award for primary schools in the country. Both Rose Nkem Obi and Clement Okodo are indigenes of Anambra state. More so, in the 2020 Unified Tertiary Matriculation Examination (UTME), two candidates, who are natives of Anambra state, namely Agnes Egoagwuagwu Maduafokwa and David Okwuchukwu Nwobi, took the first and second positions, respectively. Agnes Maduafokwa, who scored 365 marks, wants to study Production Engineering at the University of Ibadan while David Nwobi, who scored 363 marks, would like to study Mechanical Engineering at the Kwara State University; based on the information contained in the UTME form he filled. It is noteworthy that Miss Agnes Maduafokwa, who is an indigene of Ihiala, Anambra state, is related to the late Nkem Nwankwo’s family of Nawfia, Anambra state, owing to her maternal ancestry. Nkem Nwankwo was a revered literary scholar and novelist in his lifetime. Coincidentally, David Nwobi, the second-best candidate in the 2020 UTME, is an indigene of Nawfia.

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CHIEDU UCHE OKOYE Expectedly, it is a glorious moment for the people of Nawfia and Ihiala towns in Anambra state. And they’re basking in the reflected glory of their prodigious children, who are academic champions. These children, who are geniuses based on any mental and academic assessments, have great fascination for physics and mathematics, which informed and influenced their choices of course in the University. Both want to study different types of engineering courses. Nigeria, as a country, needs engineers to give impetus to its drive and quest to achieve rapid industrialisation of the country. So, I call on the government and wealthy individuals to accord honour and scholarships to the top performers in this year’s UTME in order to boost their morale and spur them to strive to attain greater heights in the academics. And I urge Gov. Willie Obiano to continue implementing his pragmatic educational policies, which have positively transformed our school system. Now, our Anambra state students can compete favourably with their peers from other countries in global educational competitions. Okoye is a poet

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Recovery 104: Save the MSMEs from banks and taxmen Small Business handbook

Emeka Osuji

lot is being done to protect the MSME sector. This concession must be given upfront but enough is yet to be done. The sound of all the billions of naira being provided for them to access is as deafening as it could be misleading The Nigerian economy is, at least, 65 percent informal, and certainly not on its way to change that toga. The sector plays the role of a back-stopper and defender of the undefended, bearing the brunt of the outcomes of the procyclical nature of our mixed economic system. Such consequences are worse in economies where public policy, driven more by whim, politics and corruption than economics, often stand reason on its head. With this in mind, we can properly situate the financial packages to where they belong: grossly inadequate. The result of perennial bad leadership is the virtual non-existence of any form of public utility in places where close to 70 percent of the people live and work – the rural areas. Operators in the MSME sector provide virtually everything for which they are levied taxes – roads, water, security and even electricity, despite all kinds of roadmaps

drawn by experts but implemented by people who know nothing about “Map Reading”. The World Bank has just ranked Nigeria 171 out of 190 countries on global access to electricity, and 33 out of 46 Sub-Saharan African countries – after its electricity system was privatized. This has resulted in a 2020 Ease of Doing Business Index positon of 131 out of 190 countries. Evidently, our country has a lot to do. While, hopefully, concrete steps are being taken to improve the operating environment for MSMEs, it appears we still have some challenges to resolve in the area of policy and practice cohesion, regarding the revival of the economy, especially as it affects the informal sector. There is little doubt that the Central Bank has been very active in fighting against an anticipated pandemic-induced recession. However, there is a growing concern about the alarming rate at which all kinds of charges are emerging and being thrown at hapless bank customers, who are essentially the small business operators. In Lagos, the Commissioner of Finance was quoted on the social media as saying that “the Nigerian economy can recover through taxation”. According to the report, he said that Nigeria needs to summon the political will to embark on taxes. How sad! As if to agree with what ordinarily cannot pass for the result of any deep thinking or rigorous analysis, a national daily was reviewed on Channels Television on Monday, boldly displaying over ten tax heads, mostly new, that should help the banks “rake in more money”. What a heartless set of leaders of a half-dead population. If these plans come true, we might just be robbing Peter to pay Paul – emptying one pocket

to fill the other. I have said in various fora that it is a no brainer that what increases tax revenue is not the political will to tax or the multiplication of tax heads. Nor is it a product of heavy research to know that cutting flesh off a sick thin animal in order to enrich the owner’s breakfast is insanity. Taxation 101 should teach all these tax experts that more taxes will come from a widened tax base (populated by new growing firms), that is administered efficiently and transparently; and not duplicated tax heads. The animal, whose flesh is being cut for “Suya” – especially the MSMEs, are sick and dying. More taxes on them will be counterproductive in the sense that as they die more people get on the unemployment benefit scheme (in saner societies) and the state loses more. It appears, therefore, that while the CBN is busy churning out financial packages for the MSMEs, banks and tax systems, in dire need of integrity pills, are hot on the sector’s hills with multiple charges, in the name of increasing tax revenue. If we think deeply, we may discover that taxes from these MSMEs cannot help us. Leaving them totally tax-free will not significantly hurt us. We will achieve more with improved cost-containment than reckless tax drives that worsen bad economic situations. We have signally failed to curb the huge fraud going on between tax officials and top corporates, refused to cut cost, and chosen to chase shadows among MSMEs, especially the micro and small entities. We can see the efforts of the CBN to steady the hands of small businesses impacted by the pandemic. It provided the sum of N50 billion to help “households and MSMEs affected by COVID 19” and a lot more for other sectors.

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The corrupt multiple exchange rate system currently creaming national resources into private hands must go. Luckily, there is significant pressure from those who pay the piper, to get Nigeria to harmonize its exchange rates or continue its unsustainable profligate lifestyle within its depleted revenues

at that. Why do you think anyone who even toys with the idea of running for President has to court them and seek their support? Ask Barack Obama. He initially made the mistake of devaluing this block but scurried back when his campaign and his chances began to nosedive very quickly. He wasn’t ready to kiss the Presidency good bye. Jews make up just 2 percent of the total population of the US but according to Forbes, 30 out of the richest 100 billionaires in the US are Jews. Add to this incredible statistic, the fact that of the 200 people that have won the Nobel Prize, 62 (31 percent) have been Jewish. So, who would be foolish enough to push them to the point where they will leave, only for them to compete with US nationals, as citizens of another country? Israel, which has a policy (Aliyah) of nationalising any Jew anywhere in the world who decides to “return” home to Israel, would welcome all back with open arms. What on the other hand, do most African countries have to offer our black brothers and sisters in the diaspora, should they decide to return home? Before the white man can value the life of the black man, the black man must first value himself and his own. Africans must develop some self-respect and conduct themselves in a way that no longer makes them a laughing stock. By making contributions which cannot be discounted, they must make themselves relevant at the table, when issues that affect mankind are being discussed. They must stop going cap in hand, asking for aid after the world has watched them in full glare squander their resources by way of endemic corruption and embarrassingly poor governance. If they want to be respected, they must first respect themselves. Before black lives can matter in America or anywhere else, they must first matter here, in Africa. Having said all about the Jews, Nigerians abroad aren’t total slackers either. Obama attested to this, possibly out of a subconscious sense of pride in his African roots, when he once alluded to the findings of data collected by Rice Univer-

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sity in Texas, which says Nigerian-Americans are the most educated ethnic group in the US. The Migration Institute records that 29 percent of Nigerian-Americans are degree holders compared to a national average of just 11 percent. So, what are we talking about? “If na brain, we get am”. We have a slew of Nigerian Professors at all the Harvard and Yales of this world. Some of the most successful doctors in the US are also of Nigerian stock. In sports, we had more Nigerians at the last few Olympics representing other countries than those representing Nigeria. We have a multitude of successful people in the diaspora but look at their homeland. A man that cannot put his own house in order and cater adequately for his own family cannot dare talk when others are talking. And if he’s bold and shameless enough to still go ahead and speak, who’s going to listen? Maybe, others of his kind, but certainly none of those that matter. I really do feel for the African American because he finds himself a citizen of a country which still treats him as a second-class citizen and yet his “motherland” which treats her own in arguably a worse manner, doesn’t make running “home” a wise or remotely viable option. So, he just has put up with the least poor option and make the most noise he can for a change. The fact that Nigerians are still risking their lives daily to cross the desert with the hope of eventually finding themselves in a saner country is enough evidence to back up my submission. The African American would have benefitted immensely, had there been a “big brother” in the shape of “mother Africa”, who he knows is there and capable of protecting his interest. A sense of wellbeing is largely impossible when man doesn’t have a sense of belonging. Let me further illustrate. An old friend called me a couple of years ago feeling really awful with himself. He said he was given the task of anchoring a question and answer assignment on his old school WhatsApp platform but complained bitterly about how it panned out. He was asked to

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Note: The rest of this article continues in the online edition of Business Day @https:// businessday.ng Dr Osuji is head of the department of Economics at Pan Atlantic University Lagos. eosuji@ pau.edu.ng @Emekaosujii

I agree, Black lives do matter

want to speak on a snippet of what our very own “African Giant” said as he received his BET award for the record setting second time: “For Black lives to matter, Africa must matter”. It goes without saying that our dear nation, Nigeria, the so-called giant of Africa has been a colossal let down to black people the world over. Burna Boy’s sobriquet as the African Giant was not earned because he’s the tallest or largest African artiste in physical stature but because of remarkable achievements in his trade, his commanding presence amongst his peers and his indomitable spirit which portrays him as a larger than life character. His physical size doesn’t matter a jot. To drive home my point, Nigeria is yet to come anywhere near the gigantic strides a diminutive state such as Rwanda has taken in the last few years. Nigeria, along with the majority of black Africa is yet to achieve much that could possibly make black Americans and the like proud of their heritage. What is it that will make their head swell? What can they point to, that will shut the mouths of their “oyinbo” fellow Americans, when they so blatantly derogate them? What position is the black American in to even “shakara” his antagonists a bit by threatening to return to his African roots if he isn’t better valued and appreciated in his “adopted” country? Anti-Semitism is still very much alive in today’s America but should the Jewish community threaten to return en mass to their “homeland” of Israel, the establishment will have little choice but to come begging. Otherwise, what would happen to the financial pillars of the US economy, California’s Hollywood and New York’s Wall Street, both totally dominated by Jews? You don’t believe me? If you’re someone conversant with Jewish names, I challenge you to look up the names of those who head the world’s largest Banks and financial institutions on Wall Street. Look out for the names of Hollywood’s biggest television and movie producers. Remove the Jews and you’ll be left with not just a skeleton but an incomplete one

There are reports that the SME COVID 19 Fund has been fully disbursed, as at the end of May, indicating improved disbursement procedure, relative to some earlier funds provided prior to the pandemic, that were hard to access. Although we are yet to certain the spread of the beneficiaries and the extent to which the real targets were reached, the CBN can be trusted to do a better job than the Ministries that distributed cash palliatives in ways that pointed to discrimination and abuse of office. I believe the authorities owe Nigerians from all sections, the duty to ensure equitable distribution of national resources and should actually go out of its way to bring in areas where ignorance or lack of opportunities may keep potential beneficiaries out. In furtherance of its efforts to provide a countercyclical force against the current rush down the hill, the CBN is also doing much in the area of interest rate and inflation management. The Monetary Policy Rate (MPR) has been closely monitored and managed to incentivize lending and borrowing activities, cutting the MPR 100 basis points to 12.5 percent, while holding all other policy parameters, the Cash Reserve and Liquidity ratios, constant at 27.5 percent and 30 per cent, respectively. That points to a clear intention to soften the market for banks to interact with borrowers and ultimately activate key growth parameters, like jobs and consumer spending.

Character Matters with Daps

Dapo Akande put up a couple of questions on the given topic, so he did. How many people responded? One. His wife who attended the same school. Let’s face it, when people don’t see you as a success, they seldom reckon with you. The chances are, if a person perceived to be successful had anchored the assignment, far more people would have responded. These would have included both those still striving to succeed and those who were already there. The former may respond to impress the “big man” while the latter will want to be seen to be “supporting” his paddy. What does a successful man need from another successful man? It’s not always business or even more contacts. But at the very least, he’ll enjoy two things; the bragging rights that come with calling the other “big man” a friend and the pride that comes with knowing you’re a “member” of the “relevant”. Now, how many African Americans align themselves to their mother continent and how often have nations weighed the possibility of adverse repercussions from Africa, in their treatment of blacks? I think that tells us a lot. “Wealth makes many friends” is a universal truism. I hardly need mention that perceived failure seldom attracts any. Changing the nation...one mind 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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Nigeria: Contribution of non-oil exports to economic growth

Timi Olubiyi

igerian revenues have consistently come from two sources: oil and nonoil. The former, which is oil, has historically been the most significant contributor to budget finance of the nation. Therefore, Nigeria is an economy that is mostly dependent on crude-oil and with the dwindling in the price of crude oil, the country needs not to be told that tough times beckons due to global shocks. Although technically, I do not share the view that the Nigerian economy lacks diversification, overdependency on crude oil earnings and issues with revenue has been the case. Nigeria is well diversified in terms of people, culture, resources, and government revenue expectations. But the actual scenario is that we depend mainly on revenue from crude oil sales for foreign exchange earnings. However, I firmly believe we can achieve more by expanding our foreign exchange earnings capacity. For the records, through diversification we get revenue from these critical components of the non-oil sector, Federal Government of Nigeria (FGN) share of Value Added Tax (VAT), Company Income Tax (CIT), Customs (Import, Exports & Fees), independent and other revenues which include dividends, recoveries/fines, among others. We can look inwards to

improve on these government revenue positions. While Nigeria is agreeably the most significant oil-exporting country in Africa, the big issue is that the country’s foreign earnings from crude oil consistently experience high volatilities. Moreover, the national budget of Nigeria depends mainly on the earnings from this commodity for the high percentage of the budget implementation. Therefore, in my view, Nigeria’s 2020 budget assumptions; such as the oil production volume of 2.18 million barrel per day, oil benchmark of $57, the N305 exchange rate to the dollar, GDP growth rate of 2.93 percent, and an inflation rate of 10.81 percent projections now appear totally out of reach. Additionally, the low crude oil price and COVID-19 pandemic effect are likely to impact negatively on these national expectations significantly. Consequently, it might further influence high inflation numbers in the country because the fate of the naira is usually tied to the global oil price regime. Simply put, volatility in global crude- oil price can cause a drop in the external foreign reserve level, restrict the availability of funds, causing inadequate funding of investments and projects; weakening of foreign exchange earnings, increasing the need for rescheduling debt obligations, increased cost of living. It can even promote and encourage smuggling, and the diversion of petroleum products across borders. Apart from all these, the big challenge that Nigeria continues to face due to these current realities is mainly the paucity of revenue. Therefore, dependency on crude oil earnings majorly has placed the country in an awkward position due to the decline in the oil price and the COVID-19 pandemic. It is imperative to mention that the price of oil is usually out of the government’s control; however, non-oil revenue is very much

in their control, and the government needs to act on this fact. Consequently, it is pertinent to note as a country that we must explore other avenues to make our economy viable rather than depend solely on crude oil for foreign earnings. The option is to focus on the non-oil sectors and give it optimal attention such as the manufacturing, agriculture, information technology, and most importantly the SME sector which can drive job creation, improve industrialisation, increase GDP performance, and play a crucial role in the process of economic growth. Significantly government needs to consider widening the Tax net of the country. To reckon, Taxes are typically the primary source of government revenue of some country, such as in South Africa with 98 percent total Tax revenue, 80 percent in Ghana. And in the US, 94 percent of federal revenue is from Taxes according to available report. Similar economics with comparable parameters with Nigeria is Mexico Indonesia, Turkey with acronyms (MINT) Nigeria is currently doing poorly. It is widely acclaimed that Tax revenues are critical to economic development. Undoubtedly, the government needs to encourage non-oil sectors and also formulate trade policies to develop and promote competitive trade and investment in the sectors. This response will encourage the development and growth of the non-oil areas without mincing words. However, the most imperative is the creating of an enabling environment, which is necessary to reduce regulatory risks. Furthermore, Nigeria is yet to fully explore the science and technology sector to boost its financial economy and innovative capabilities. This sector has been the source of technological innovations and digital economy boom in countries such as China, India, and Japan. The develop-

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Simply put, volatility in global crude- oil price can cause a drop in the external foreign reserve level, restrict the availability of funds, causing inadequate funding of investments and projects; weakening of foreign exchange earnings, increasing the need for rescheduling debt obligations, increased cost of living

Note: The rest of this article continues in the online edition of Business Day @https:// businessday.ng Dr. Olubiyi is an Entrepreneurship and Small Business Management expert. He is a prolific investment coach, Chartered Member of the Chartered Institute for Securities & Investment (CISI) and a financial literacy specialist. He can be reached on the twitter handle @drtimiolubiyi and via email: drtimiolubiyi@gmail.com, for any questions, reactions, and comments.

Making Lagos State more inclusive for people living with disabilities

“

hen written in Chinese, the word crisis is composed of two characters - one represents danger, and the other represents opportunity.” That insight was contained in a speech by one of the greatest presidents in American history – John F. Kennedy. More than half a century of history and human advancements has not changed the truth in that statement. This past one year has been one of the most turbulent in the history of democracy in Lagos State, more so for a party that contained internal tensions to face one of the worst cases of voters’ apathy in a keenly contested general election. But like a phoenix from the ashes, the man at the centre of the storm has consistently proven himself worthy as leader of Africa’s 5th largest economy. Sanwo-Olu’s emergence as governor of Lagos State is a strong vindication of two critical requirements of democratic leadership – Pedigree and Character. Like a Yoruba adage has it that when you are born well (pedigree); you should endeavour to “re-birth” yourself (character). It is not surprising that these two qualities have stood him out as he had unarguably contended with more crises in one year than most governors in a whole term in office. From an inheritance of dilapidated and deteriorating road network, further defaced by horrifying mounds of smelly refuse everywhere, traffic gridlocks holding the transport system by the jugular and a largely dispirited civil service, Sanwo-Olu had quite a full plate on a table set well before formidable “enemies”. His character showed up as he owned up to

the situation by renouncing the title of His Excellency, choosing to be referred to instead as Mr. Governor, until he is convinced to have earned the accolade. He remained articulate, firm and focused as he eschewed controversy with clarity of purpose and a single-minded focus on delivering good governance to Lagosians. And then the big one struck – the COVID-19 Pandemic. Again, as in moments of crises of this magnitude, what really matters, more than anything else, is leadership. It is good enough that Lagos State has been steadily consolidating on transformational visions of Bola Ahmed Tinubu and his political dynasty. Hence, Sanwo-Olu was gifted with a structure that fields a pedigree of some of the best eggheads and technocrats in his administration – from a young, dynamic and perceptive Head of Service, to a celebrated Professor of Medicine as Minister of Health, among others no less qualified and decorated. Perhaps what proves the greater challenge to governance in the face of the global pandemic in Lagos State was not so much about our moribund healthcare infrastructure, but the underbellies of years of sustained inequality, poverty and a lack of social protection safety nets that would have provided a pathway for addressing the socio-economic dimensions of managing a public health crisis of a global dimension like COVID-19 presented. The scary security situations that reared a monstrous head seemed to momentarily stun years of steady investment in the State’s security infrastructure. Then again, leadership came to bear as the situation was swiftly and decisively brought under control and peace returned to Lagos State.

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However, Lagos State might be missing out on a unique opportunity embedded in the COVID-19 crises. In tackling the serious socio-economic dimensions of what appears primarily as a health challenge, an inclusively robust system of policy and practice in governance has been identified as a critical prerequisite to bridging gaps in service delivery to all citizens, with particular attention to vulnerable groups like people living with disabilities, the elderly and children. This has been a dangerous blind spot in the current administration. On May 6, 2020, the UN Secretary General launched a report calling the world’s attention to the silent dangers of the COVID-19 pandemic as it intensifies inequalities experienced by the world’s one billion people with disabilities. In calling for a disability-inclusive recovery and response framework to the crisis, António Guterres called governments’ attention to the fact that even under normal circumstances; people with disabilities are less likely to access education, healthcare and income opportunities, or to participate in their communities. They are also more likely to live in poverty, and to suffer higher rates of violence, neglect and abuse. “The pandemic is intensifying these inequalities — and producing new threats,” he revealed. It’s no gainsaying that Sanwo-Olu’s administration has been able to harness the opportunities in the dangers of a global pandemic to revamp the health sector through various infrastructural and human resource investments. The security apparatus has witnessed a significant overhaul; even as normal governance and service delivery to Lagosians has not taken a back seat on account of COVID-19. The

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ment of the science and technology sector is integral to promoting an innovative culture that subsequently encourages the development of the Nigerian economy. The use of technology will allow improvements in our health systems, citizens’ welfare, education, international trade, and infrastructure development. In the business world, it will aid automation of current processes in business, such as distributions, sales, after-sales services, and inventory management, thereby increasing ease of doing business. Furthermore, the agricultural sector that has been neglected over the years needs revamping, and all the agricultural research institutes across the nation need to be revived. In a recent report, the country’s population has been projected by the United Nations to surpass the United States by 2050. Therefore, the food security policy framework to prepare for this population surge and the initiatives to attract investments into the agriculture sector is highly necessary now than ever before. I am equally aware that Nigeria is endowed with several mineral deposits; this could serve as a huge source of additional revenue and employment opportunities. More mineral deposits are yet to be discovered and exploited in the different states of the country. Therefore, the government needs to set the policy to discourage politicizing the implementation of mining projects.

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Dare Dairo

disappearing gridlocks and cleared refuse are sterling testimonies to this effect. In all fairness, even people living with disabilities have not been totally ignored. The various palliatives at mitigating the hardships of the lockdown have been systemically focused on people living with disabilities and the elderly. The lapses are understandable in light of preexisting challenges of data gaps and absence of articulated policies and practice of inclusion. Even some of the previous gains are being lost to the perceived silence of the governor to disability issues. What Lagos State needs urgently is an articulated response aimed at integrating disability and inclusion in the THEMES agenda with the sole aim of evolving an economy around disability in ways that will sustainably generate wealth, employment and bridge the inequality gaps recognised in the report by the UN Secretary General. Inclusion is not about charity, and persons with disability should not be seen as a liability to governance and government. SanwoOlu has excelled through a turbulent year in office to make a mark for himself as a leader of mettle, character and purpose. He has even more to offer Lagosians as he has definitely not forgotten anybody included in his mandate – including people living with disabilities. Dairo is the Lagos State Chairman of the National Association of Persons with Physical Disabilities

F a

Wednesday 08 July 2020

BUSINESS DAY

Editorial Publisher/Editor-in-chief

Frank Aigbogun

COVID-19: Imperative of improving on Nigeria’s response Measures must be all-encompassing and objectives well defined

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

Bashir Ibrahim Hassan

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

ust as other COVID-19 infected countries, Nigeria began its fight against the deadly virus when it confirmed its first case on February 27, 2020. Responses seemed swift; unintended measures were enacted and people realised that COVID-19 outbreak wasn’t a joke. Against the wish but expectation of many, the number of COVID-19 cases in the country has surged since February with hundreds of new cases recorded daily. Try as governments at federal and state level do, Nigerians are yet to see a flattening of the curve. Many have survived, few have died and others still stand the risk of contracting the virus. Winning the battle against the current plague ravaging the lives and livelihoods of Nigerians is dependent on the country’s ability to prevent, detect and respond to a public health crisis such as the COVID-19 pandemic. Unfortunately, our evaluation of these independent variables in Nigeria is similar to the World Health Organisation’s Joint External Evaluation (JEE) assessment of Nigeria in 2017. According to the assessment,

Nigeria was thought to have limited capacity to “prevent” biological, chemical, or radiation health risks. Although better at “detecting” new health risks through real-time surveillance and laboratory capabilities to test diseases, sustainability is questioned. Also, Nigeria was recorded to perform badly in “response”. This is reflected in the country’s weak infrastructural capacity to respond to sudden health risk like the COVID-19 pandemic. The status hasn’t changed in 2020. The discovery of a vaccine may be the sole hope for Nigeria if its entities do not swing swiftly into action to address the distressing assessment on preparedness to tackle public health risks. One way will be to boost testing capacity for COVID-19 and fund the purchase of relevant medical equipment. Compared with peers in SubSaharan Africa, Nigeria has one of the lowest test samples. As at July 4 2020, only 151,121 samples had been tested in Nigeria for a population estimated at 200 million. This represents 0.07 percent of the population. It is a cause for concern that, in contrast to Nigeria, South Africa, a country of 58 million people, has as

at June 30, conducted 1.63 million tests, representing 2.8 percent of its population. It has become, not just urgent, but also imperative that Nigeria funds the purchase of more ventilators and intensive care unit beds given the consistent surge in the number of confirmed cases. As at April, Nigeria could boast of just 450 ventilators and 350 ICU beds, according to a report by Brookings. This, in our view, is a far cry from the identified need. Though we commend the Nigerian federal government and the CBN on the initiatives taken so far to ameliorate the health, social and economic impact of the pandemic, we are at the same time miffed that some of the policy responses have weaknesses and, taken together, are not commensurate with the magnitude of the problem. The Economic Stimulus Bill 2020, for instance, excludes the Nigerian informal sector – projected to be worst hit – which accounts for about 65 percent of Nigeria’s total GDP and 90 percent of the workforce while aimed at providing 50 percent tax rebates to businesses that are registered under the Companies and Allied Matters Act.

It is important to point out that businesses in the informal sector are not registered but are often supported by microfinance facilities. It is unfortunate that the government’s N20,000 cash transfers to the poor and vulnerable registered under the National Social Register (NSR) is limited to just 2.6 million households registered on the NSR platform. This is a meagre 2.9 percent of 87 million Nigerians estimated to live on less than $1.90 a day. This also implies that about 76 million Nigerians are not captured on the NSR register, hence reveals gaps in Nigeria’s information management system. The CBN’s N3 million stimulus package to poor families impacted by COVID-19 requires collateral and is not interest-free. Many poor families do not have collaterals to present nor can they afford interests charged on these loans. Many are poor because they have no jobs. It is imperative therefore those measures must be all-encompassing, meaning that objectives must be properly defined and well executed. From what we see, Nigeria isn’t off the hook yet as far as the pandemic is concerned. The country must improve its ability to prevent, detect and respond to the COVID-19 pandemic.

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

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Wednesday 08 July 2020

BUSINESS DAY

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Wednesday 08 July 2020

BUSINESS DAY

COMPANIES&MARKETS

Business Event

Premium Pension returns over 400% to pioneer customers MODESTUS ANAESORONYE

remium Pension Limited (PPL), one of Nigeria’s leading Pension Fund Administrators (PFAs) in terms of investment return has achieved another milestone in the Nigeria’s pension industry as the first PFA to attain the unit price return of N5.0004 in the oldest Fund (Fund II) recently. Fund II is the largest fund with active contributors below the age of 50 years. Further investigation revealed that Premium Pension is being followed by

NLPC with N4.7335, Crusader Pension N4.6939 and ARM Pension with N4.6426 as at 30th June. The Company maintained a 5 years average investment return of 13.14 percent on the fund (Fund II) under Management. Also, the PFA overtime has consistently maintained a top tier performance in other funds. Currently, the total Asset under Management by the PFA is over N760 billion as at 2nd July, 2020. It appears the PFA is living up to their mission to grow members wealth to enable

them embrace their golden years. Further review also revealed that Premium Pension has the highest unit in Fund III in the industry (a splinter of the Fund II effective July 2018). Premium Pension Ltd is one of the first set of Pension Fund Administrators (PFA) licensed by the National Pension Commission (PenCom) in December 2005. With over 600,000 members and N760 billion in Assets Under Management (AUM), and one of the fastest-growing PFAs, consistently delivering competitive returns.

Pereira Sheteolu, Programme Manager/CEO, Lagos State Agricultural Development Authority; Kenneth Adejumoh, Corporate Communications Manager, Nosak Group; Hakeem Sadiku, Head of Sales & Marketing, Nosak Farm Produce Limited and Oreagba Akeem, Chief Agric Officer, Lagos State Ministry of Agriculture during the donation of Famili Vegetable Oil to the Lagos State Food Bank.

CEO Lifepage Group, others re-launch Financial Freedom Masterclass IFEOMA OKEKE

ladipupo Clement, the founder/CEO of Lifepage Group and a team of financial experts in Nigeria and Africa has re-launch financial freedom masterclass to train and coach 10,000 Professionals. Clement started off as a Junior E xecutive of a leading financial services group in Nigeria and rose to become a Regional Vice President. He trained over 200 of the company’s workforce nationally during his tenure. He uses his online platform to reach out to au-

...to train 10000 professionals

diences around the world as an author, speaker, and trainer. To d a y , O l a d i p u p o Clement is a global investor and trusted wealth creation and retention coach with a career spanning over two decades. He has proven his ability to guide upcoming and established entrepreneurs in the field of “wealth creation.” He further proves he is a master craftsman in wealth creation by commencing the 4th edition of the “Financial Freedom Masterclass.” @ www.oladipupoclement.com

He w ill b e coaching a n d t ra i n i ng m i l l e n n i als through the most legitimate and sustainable paths to achieving financial freedom. Clement is the founder/ CEO of Lifepage Group, a Real Estate Investment Company. He leads a group of investors comprising over 15,000 subscribers and realtors. As a wealth creation coach, he is championing the crusade for the economic emancipation of the average African, through platforms such as the Wealth Creation Summit and the Mega Housing Summit.

Nosak Farm Produce donates to LASG COVID-19 relief support

osak Farm Produce Limited, a subsidiary of Nosak Group has donated cartons of Famili Vegetable Oil to support the Lagos state government’s food bank in response to supporting the state’s fight against COVID-19 pandemic. Nosak Group is an indigenous industrial conglomerate with diversified interests in various sectors of the Nigerian economy, with a corporate policy to constantly seek opportunities to add value to the prosperity of the country, its people and all stakeholders. Ke n n e t h A d e j u m o h, corporate communication manager, Nosak Group, said the Lagos State government has taken frontline initiatives to help cushion the effects of the coronavirus pandemic

on Lagosians through various efforts to curtain the spread of the virus. Ha ke em Sa d iku, t he Sales & Marketing Manager, Nosak Group said, “As a Group, we understand it is a collective responsibility to cater for the less privilege and vulnerable persons in our environment, which has prompted us to support the state government with the donation of our Famili Vegetable Oil as palliatives to ameliorate the effect of COVID-19.” Receiving the donations, the Acting Commission for Agriculture, Abisola Olusanya, represented by the Programme Manager/Chief Executive Officer, Lagos State Agricultural Development Authority, Pereira Sheteolu expressed gratitude to the Group for making the donation of Famili www.businessday.ng

vegetable oil to support the state government in providing food for the vulnerable citizens of the state. “On behalf of the Lagos State Governor, Mr. Babajide Sanwo-Olu, the Acting Commissioner for Agriculture, the Permanent Secretary of the Ministry of Agriculture, Dr. Shakirudeen Olayiwole Onasanye and the entire good people of Lagos State, we appreciate Nosak Group for donating the edible oil. This is a demonstration of love and care for the citizens of Lagos State”, he stated. As a corporate organisation, the Group has used the occasion to reassure the state government of its commitment to provide partnership and support for the state on projects and activities to benefit the citizens.

Middle Lion Wesley Kafidiya, District Governor Presenting an Appreciation Award to Lion Ibrahim Abiodun, member Ikeja Metro Lions Club; 2nd right, Lion Blessing Umebali, Region 6 Chairperson; 3rd left, Lion John Oriazowan President, Ikeja Metro Lions Club; 1st left Lion Ahmed Olusi, Secretary Ikeja Metro Lions Club; 2nd left Lion Anigbo Ikechukwu, Club Committee Chairperson; and Lion Emmanuel Okoduwa all at the Region 6 Mark of Excellence Award held over the weekend.

Nigeria’s cinema industry faced with over $50m investment losses, seeks govt’s intervention SEGUN ADAMS

ig e r i a n c i n ema exhibitors, distributors and employees have recently lamented over the imminent collapse of the theatrical sector in Nigeria, and by default, the Nigerian film industry, due to the financial implications of the continued suspension of cinema operations, as a result of the lockdown. Fo l l ow i n g t h e d i re ctives issued by the Federal Government on Monday, March 30, 2020, for the immediate lockdown of establishments, cinemas have since been shut down. Consequently, the Nigerian film industry, which is reputed to be the secondbiggest film industry in the world (based on the number of films released), producing an average of 50 films weekly, accounting for over N200 billion in annual film industry revenue, and providing over one million jobs as the highest employers of labour after the agricultural sector, with a potential to produce one million more jobs (as estimated by World Bank), is faced with a danger of going extinct. In the government’s effort to re-open the economy, the importance of prioritising the

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safety of Nigerians cannot be overemphasized. However, it is also expedient to consider the huge economic disaster brought upon this very important sector, by the continued suspension of cinema operations and other film-based businesses. Over 250,000 workers, some of whom are directly employed by 58 taxpaying cinemas in the country have been furloughed; recent multi-million dollar investment like MX4D, IMAX & 4DX theatre halls with heavy technical equipment has been left to deteriorate; international/local creditors and investors are crying out for their money; production of films has been suspended, consequently resulting in joblessness and huge debts for Nollywood professionals. In 2019, the sector grossed over N10 billion in box office earnings alone, with estimated total revenue of N35 billion. Thus, the most rational treatment from the federal government should be to include Cinema and Allied services in all possible financial interventions. Following the FG directive to re-open domestic flights from July 8, 2020; a critical evaluation of operational processes would reveal similarities between airports and cinemas. A domestic flight from @Businessdayng

Lagos to Yola is 2hours 30minutes, which is the same Running Time for all Movies. Likewise, each customer is expected to spend minimum of 3-4hours for a domestic flight trip which consist of Arrival at Airport, Ticket Purchase, queuing, waiting, boarding, Flying and Exiting the Aircraft; the same Hours per Customer processes can be likened to Cinema Visitor. It is only more logically justifiable to classify Cinemas alongside Aviation (in prioritizing resumption), rather than with the hospitality sector, consisting businesses such as event centres, hotels, and bars with almost very different processes. Psychologically, the lockdown has had a depressing impact on Nigerians, which can only be checkmated by allowing people to ease off at leisure centres with welldefined safety measures in place. Speaking at a meeting recently held at Lagos State Safety Commission, the Chairman of Cinema Exhibitors Association of Nigeria, Patrick Lee said CEAN have collectively outlined 10 Safety Protocols in guidance with NCDC Guidelines that would efficiently enhance cinema operators to combat the spread of the disease whilst receiving customers at the movie theatre.

Wednesday 08 July 2020

BUSINESS DAY

AGRIBUSINESS

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Nigeria’s post-harvest losses surge amid COVID-19 pandemic Millions of smallholder farmers in Nigeria have had to watch their fresh produce rot in their farms due to lockdown restrictions imposed by the government. This has led to the surge of post-harvest losses in the country, writes JOSEPHINE OKOJIE.

ayowa Adegoke, a 32-yearo l d

smallholder farmer in Epe Local Government Area of Lagos, felt the economic string of COVID-19 just days after the government imposed the lockdown in late March. For Mayowa, who grows watermelons 96.7kilometers away from Mile 12 market - where he sells fresh produce- his pain was doubled. He was forced to make a tough decision when he was denied movement by security operatives who were enforcing the lockdown. He could not move some of his fresh watermelons to the market despite the exemption of agricultural produce from the restrictions. He had to abandon his two-hectare farm of watermelons which were ready for harvest at the time – a loss he estimated at N2million. “I couldn’t harvest my watermelons because I was unable to access the market. The security operatives did not allow me to pass through the check-point despite several attempts,” Adegoke says. “By the time the lockdown was lifted, more than half of the watermelons I wanted to harvest had got spoilt on the farm,” he further says. Adegoke, who became a farmer after five years of fruitless job search, is now trying to keep his business afloat – his only means of survival. His situation is similar to what millions of smallholder farmers that grow perishable crops across the country go through. It has led to a surge in the country’s post-harvest losses currently estimated at $9billion (N3.4 trillion based on the current official rate exchange rate of N380) by the Federal Ministry of Agriculture. “Far mers who grow perishable crops suffered most during the initial lockdown. This led to a surge in post-harvest losses,” says Ibrahim Kabiru, national

interstate lockdown directive took effect,” says Godwin Akpa, a trader in Mile-12 Market, while the interstate restrictions were on. “The numbers of tubers that get spoilt by the time we get to Lagos has increased tremendously because we spend a long time on the road,” Akpa says. He notes that the increase in the number of food losses is also responsible for the surge in food prices across the country as farmers and traders are compelled to shift the cost to the final consumers. Post-harvest losses

A watermelon farm

president, All Farmers Association of Nigeria (AFAN) from his Kebbi farm. “ Ma n y o f t h e m a re still struggling to recover from the huge losses they incurred and could not even access the Central Bank’s N50billion credit facility,” he notes. Post-harvest losses in Africa’s most populous nation have been estimated to range between 5 and 20 percent for grains; 20 percent for fish and as high as between 50 and 60 percent for tubers, fruits, and vegetables, according to experts. Since the outbreak of the COVID-19 pandemic in Nigeria, the country has experienced an unimaginable food loss, threatening food security and precipitating massive importation, experts say. It has led to Nigeria’s food import bill of about N261 billion within the first three months of the year, showing that the country is largely www.businessday.ng

dependent on external sources to augment local production, data from the National Bureau of Statistics (NBS) show. The value of imported agricultural goods for the period was 12 percent higher than in the fourth quarter of 2019 and 10.6 percent higher than the corresponding quarter of 2019. The interstate lockdown further compounded the

problem, as traders spent a longer time in transit of fresh produce from the north where the crops are grown to the south where the majority of the consumers are located. “We usually spend a day and a half in transporting our yams from Benue to Lagos State. But now it takes an average of three days because of the numerous check-points since the

Soaring food prices From tomatoes to potatoes and other key staple food items in the country, prices are surging. BusinessDay survey at Mile-12 Market in Lagos shows that a 50kg bag of local parboiled rice, which was sold for N20,000 preCOVID-19, now sells for N25,000, indicating a 25 percent increase in price. A small basket of fresh tomatoes now sells for N4,000 as against N2,000 sold prior to the outbreak of COVID-19 pandemic. A big basket of tomatoes now sells for N15,000 as against N8,000 pre-COVID-19. A f i v e - l i t re k e g o f vegetable oil, sold for N2, 000 before the lockdown, now sells for N2, 500, indicating a 25 percentage increase in price. For spaghetti, a carton now sells for N4, 200 as against N4, 000 sold before the lockdown, indicating a five percentage increase in price. Inflation in Afr ica’s

biggest economy accelerated to 12.4 percent in May 2020, the highest in two years, and has been largely driven by food inflation, data from the NBS show. Experts say the country’s inflation for June will further accelerate- when the figures will be released later in the month-owing to continuous rise in food prices. Widening food deficit Africa’s most populous nation is populated with 200 million people who must be fed with staples ranging from rice and beans to tomatoes and maize. Yet, there is still much demand-supply gap in most of the staple foods, even as the population growth rate stands at 2.6 percent per annum. The World Population Prospects 2017 has projected Nigeria’s population to surpass 300 million mark by 2050. Nigeria’s widening food deficit was highlighted in the Agriculture Promotion Policy (2016 – 2020) document of the Federal Ministry of Agriculture which shows there are 20.14 million tonnes of crop deficit and 60 million poultry birds’ deficit. Post-harvest losses are still a big issue. The surge in post-harvest losses triggered by the pandemic will further widen the country’s food deficit, experts say. “Currently, we do not g row e n o u g h b e c au s e farmers are still farming using old techniques and if we continue to lose many of the crops already harvested, then our food deficit will continue to increase tremendously,” says Abiodun Olorundenro, m a n a g e r, A q u a s h o o t s Limited. “O u r p o p u l a t i o n i s growing very fast and we are yet to increase our productivity. This is even making the few available more expensive for consumers,” Olorundenro adds. This report was facilitated by the Wole Soyinka Centre for Investigative Journalism (WSCIJ) under its COVID-19 Reality Check project.

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Wednesday 08 July 2020

BUSINESS DAY

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Wednesday 08 July 2020

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Tuesday 07 July, 2020

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

GAINERS Company

Opening

Closing

Change

AIRTELAFRI

N317.1

N328.7

11.6

BUACEMENT

N39.9

N40.9

ZENITHBANK

N16.05

N16.35

0.3

N2.97

N3.26

0.29

N4.2

0.2

REDSTAREX

Company

ASI (Points)

Opening

Closing

Change

OKOMUOIL

N77.4

N69.7

-7.7

MRS

N13.8

N12.45

-1.35

UNILEVER

N13.8

N12.45

-1.35

MTNN

N116

N115

-1

VALUE (N billion)

N127

N126

-1

MARKET CAP (N Trn)

DANGCEM

24,097.48

DEALS (Numbers) VOLUME (Numbers)

4,060.00 155,529,293.00 2.600 12.570

Nigeria stock market extends losses on waning bargains Iheanyi Nwachukwu

igeria’s stock market recorded another session of negative close by -0.05percent on Tuesday July 7 as investors failed to increase their bargains in a number of fundamentally sound stocks with prices that remain cheap and attractive. Decreased activity on the buy-side of the remote trading session on the local Bourse helped to push prices of stocks lower with corresponding impact on the cumulative value of listed stocks. Okomu Oil led the losers’ league after its price decreased from N77.4 to N69.7, shedding N7.7 or 9.95percent. It was followed by Unilever Nigeria Plc which decreased from N13.8 to N12.45, after losing N1.35 or 9.78percent; and MRS Plc which declined

from a high of N13.8 to N12.45, shedding N1.35 or 9.78percent. Dangote Cement Plc also made the top laggards list after dropping from N127 to N126, down by N1 or 0.79percent; and MTN N Plc which dropped from N116 to N115, shedding

N1 or 0.86percent. As a result, stock investors booked about N7billion loss at the close of trading session while the market’s year-to-date (ytd) negative return increased to -10.22 percent. The Nigerian Stock Ex-

Nigeria’s SEC reemphasizes implementation of Capital Market Master Plan

he continued implementation of Capital Market Master Plan will be one of the major focuses of the new management of the Securities and Exchange Commission (SEC) led by the Director General, Lamido Yuguda. Yuguda resumed on Monday July 6 alongside the Executive Commissioners namely: Reginald Karawusa, Ibrahim Boyi and Dayo Obisan. The new management team brings to the SEC decades of capital market and organisational market experience between them. This, combined with the ground work done by the past managements and the quality and professionalism of SEC staff should impact very positively on the capital market, Yuguda said. While the new management team at SEC also seeks

possible ways of strengthening the Capital Market Master Plan for enhanced impact, the members will equally work towards improved market regulation, surveillance and general development, the new DG said. “In order to do this effectively, we will need to develop relevant capacities. This we shall do by first learning from existing internal efforts and also from other available innovative approaches. We would

Lamido Yuguda www.businessday.ng

also foster collaboration with relevant stakeholders, be they private, public or international in achieving our mandates”, he said. The Capital Market Master Plan launched in 2014 has the objective of positioning the capital market for an accelerated development of the national economy. Yuguda, who expressed sincere gratitude to the immediate past management team of the SEC for the great job they did in the last two years and the efforts they put in to ensure the stability and development of the market noted that the Capital Market Master Plan “has definitely contributed to the development of the Nigerian capital market and the economy in line with its objectives. Many of the plan’s initiatives have been successfully implemented while many others are Work in Progress.”

change (NSE) All Share Index (ASI) closed lower at 24,097.48 points as against preceding day high of 24,109.65 points while the value of listed stocks decreased to N12.570 trillion from preceding day high of N12.577 trillion. In 4,060 deals, investors exchanged 155,529,293 units valued at N2.6billion. “From time to time we notice equity markets taking a pause, trading sideways for a month, before launching again upwards or downwards. One of the ways to measure the health of an equity market is its turnover. “The Nigerian equity market’s turnover has been trending downwards recently, prompting the question: Where is the institutional investor? The answer might be: “Presumably, buying long-dated bonds, rather than equities,” according research analysts at Coronation Merchant Bank.

Global market indicators FTSE 100 Index 6,189.90GBP -96.04-1.53%

Nikkei 225 22,614.69JPY -99.75-0.44%

S&P 500 Index 3,177.42USD -2.30-0.07%

Deutsche Boerse AG German Stock Index DAX 12,616.80EUR -116.65-0.92%

Generic 1st ‘DM’ Future 25,977.00USD -202.00-0.77%

Shanghai Stock Exchange Composite Index 3,345.34CNY +12.46+0.37%

NSE upgrades Issuers’ Portal to enhance market integrity Iheanyi Nwachukwu

he Nigerian Stock Exchange (NSE) has upgraded its Issuers’ Portal (XIssuer) to further enhance market integrity. X-Issuer which was first launched in 2013, is a secure web-based portal designed to enable Issuers conveniently file information in an electronic format to The Exchange. It is a key regulatory initiative of the NSE, developed to ensure electronic delivery of Issuers’ mandatory filings and other information in a structured and continuous manner to capital market stakeholders. The enhanced X-Issuer comes with modern layout, improved functionalities and new user-friendly features to further enhance the compliance and regulation experience of Issuers. Some of the new features include the Release Calendar Module to allow issuers proactively file corporate actions and upcoming meetings;

and an information channel for Fund Managers to share information about their funds. The Exchange remains committed to investing in business innovation and technological enhancements that will enable it to meet the needs of its stakeholders especially as we transition to a world of reduced physical interactions. The X-Issuer is one of The Exchange’s dedicated efforts to improve the level of services it provides to the market, while enhancing its ability to compete effectively in the global marketplace. Speaking on the development, the Chief Executive Officer, NSE, Oscar N. Onyema, noted that, “This upgrade affirms our commitment to eliminating information asymmetry in our market and protecting investors.” “The X-Issuer has, therefore, been enhanced to ensure that investors, analysts and other stakeholders are better able to evaluate data in an accurate, timely and more efficient manner.

UBA Group appoints Liadi, Alawuba as Deputy Managing Directors for Nigeria and Africa Iheanyi Nwachukwu

nited Bank for Africa Plc has appointed Ayoku Liadi and Oliver Alawuba as Deputy Managing Directors in charge of UBA’s Nigeria and Africa businesses, respectively. The creation of the new positions, reporting to Group CEO, Kennedy Uzoka, represents further strategic recognition of the growth of UBA’s pan-African business, now representing in excess of 40percent of Group revenue, and the critical importance of Nigeria, the Group’s largest market. Combined with UBA’s unique International Business, operating from New York, London and Paris, UBA Africa and Nigeria, offer an unparalleled service offering to clients across Africa and

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globally. Commenting on the appointments, Group Chairman Tony O. Elumelu said: “In 2005, we set out our panAfrican vision. Fifteen years later, we are present in 20 African countries, serving over 20 million clients, leveraging our service culture and technology platform, to provide an integrated and seamless customer offering across the continent. In Africa, we lead in innovation and service, whilst our International Business, operating from New York, Paris and London, provides global and African clients access to treasury, trade finance and corporate banking products, uniquely tailored to the African opportunity. These senior appointments represent our commitment to optimize our management structure to best serve our clients and drive our business success.” Oliver Alawuba has worked @Businessdayng

with the UBA Group for almost 20 years and was appointed in January 2020, CEO for the Group’s Africa operations and Oliver’s knowledge of UBA’s business in Africa is unrivalled. He previously held the role as CEO of UBA in Ghana and more recently, as Regional CEO for UBA in Anglophone Africa. Ayo Liadi joined the UBA Group in 2014 and was appointed the Executive Director of Lagos and West bank in Nigeria, two years later. Ayo is widely recognised for his innovation in driving business development. Also announced on Tuesday July 7 by the UBA Group Board was the retirement from the Board with effect from August 01, 2020, of Dan Okeke who has been with the UBA Group for 22 years. Dan served on the Board as an Executive Director for three terms and a total of nine years.

Wednesday 08 July 2020

BUSINESS DAY

BANKING CBN’s N2.2trn CRR debits mean downward pressure on banks’ liquidity position Stories by HOPE MOSES-ASHIKE

he Central Bank of Nigeria (CBN) has within the last four months precisely, April to July 2020, debited banks about N2.2 trillion for breaching its Cash Reserves Requirements (CRR). This implies further downward pressure on deposit money banks liquidity ratios and earnings according to analysts at FBNQuest. With eyes on rising inflation and surging liquidity, the CBN on January 24, 2020 raised the CRR by 500 basis points to 27.5 percent from 22.5 percent since 2016. CRR is the percentage of banks’ deposits required to be kept in reserves with the Central Bank. Last week Friday, the CBN debited banks an additional sum of N118 billion for breaching its CRR requirements. Last week’s

debit is the fourth by the CBN this year and brings the total sector debits for 2020E to about N2.2 trillion. Johnson Chukwu, managing director/CEO, Cowry Asset Management Limited said in January that the banks are now suffering from multiple regulatory headwinds. One is that the CBN on one hand wants them to lend 65 percent of their deposits and also keep 27.5 pecrcent of their deposit with CBN and 30 percent liquidity, but the CRR does not count as liquid assets. So it is almost impossible for the banks to comply with all these regulatory requirements and still make profits. In its previous note on the Implications of CBN’s debits on banks for CRR compliance in June 24, 2020, FBNQuest analysts discussed the impact of the discretionary debits on banks’ liquidity positions, cost of funds, and the potential implication of a rise in the cost of funds on

Godwin Emefiele, CBN governor

banks‘earnings. “In this analysis, we attempt to quantify the opportunity cost of the debits

How Access Bank creates business for Women SMEs via W initiative

ccess Bank through the W initiative, ha s e mp ow e re d women, owned and managed SMEs by putting together an innovative bundle of offerings designed to support the more than a few aspects of business during the global pandemic. The W Initiative of bank remains a pioneer proposition to promote women’s economic empowerment in Africa with over a decade of active participation in creating and supporting the Women’s Market across its focus segment. Being the forerunner of the gender-focused initiative in the industry, The W initiative has yet again demonstrated a feat by supporting women especially Women SMEs during these times. The bundled offerings consist of; the introduction of the W Webinar Series, implementation of a 90 days moratorium and extension on all existing loans to Women owned and managed SMEs without penal charge, introduction of the bespoke business debit card and creation of an e-commerce enabled website to enhance the digital presence for female owned businesses. Speaking on the bank’s innovative for SMEs with

a focus for Women owned businesses, Ayona AgueleTrimnell, group head, Women banking said “At Access Bank, we are mainly committed to drive women’s economic empowerment in the markets we serve. We are also actively involved in supporting women-owned businesses to thrive through this period by leveraging digital platforms to sell their goods and services, providing alternate channels of banking as well as easing the burden of loan repayment while considering the impact

of the global pandemic on SMEs.” She further mentioned that “The Bank has adopted virtual platforms to ensure that Women owned SMEs are given an enabled environment to thrive and continue their businesses despite the global pandemic.” Access Bank has an unflinching commitment to empower women and contribute immensely to the growth of the women market in Nigeria and beyond for accelerated social and economic growth.

and its potential impact on earnings for our coverage universe”, the analysts said. Unlike previous debits for

universe. According to the report by the firm, it is clear that the CBN sees these discretionary debits as a viable administrative tool for foreign exchange management. “In our view, the CBN’s stance on CRR debits is at variance with its desire for banks to expand their balance sheet to increase lending to the real economy. Year-to-date, our universe of banks stocks has shed -21 percent compared with the -9.3 percent return on the NSE ASI. Nonetheless, we expect the hawkish stance of the CBN to continue to have a negative read-across for banks’ share performance. Our preferred names within the sector are GT Bank and Zenith (both rated outperform) because of their supportive valuations (P/B multiples of 0.8x and 0.4x for 26.6% and 22.7% respectively) and the quality of their financial soundness indicators relative to peers”.

Ecobank restates commitment to SMEs, agric sectors

cobank Nigeria has restated its commitment to support and sustain the development of Small and Medium Enterprises (SMEs) in all sectors including the Agriculture sector of the nation’s economy, following the emerging economic climate. This was the submission of speakers at the Ecobank Webinar held recently in Lagos. In his presentation tagged: Harnessing CBN and other funding opportunities for small and medium enterprises in the emerging economic climate, Emeka Agada, head, SME, Ecobank Nigeria,

Emmanuel Ukpebor, head of business &credit, Assets Microfinance Bank discussing strategies with Idris Ibrahim, group managing director, Assets Microfinance Bank during the bank’s second year anniversary in Lagos recently. www.businessday.ng

which Zenith and UBA were the most affected banks under the coverage of FBNQuest, Stanbic IBTC and GT Bank were the hardest hit this time around, both with debits of N15 billion each. “Based on the total sum that each bank has been debited this year and our NIM assumptions for each bank, we estimate an aggregate opportunity cost of funds of N86 billion for our universe of banks coverage. Due to the sizable debits on their accounts with the CBN, Zenith and UBA have the highest opportunity cost of funds at about N34.4 billion and N15.8 billion respectively”. In contrast, Fidelity and Access are the least impacted, with opportunity cost of funds of N2.9 billion and about N3.8 billion respectively. Assuming these funds were available to be deployed for lending by the banks, all else being equal, the firm estimates an average earnings impact of about -14.0 percent for its coverage

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stated that the bank will continue to harness and explore the various CBN intervention schemes and other funding and trade opportunities provided by Ecobank Nigeria for small businesses . He further added that Ecobank has also made available solutions that enhance trade through provision of working capital and digital platforms for payments and collections. According to him, Ecobank recognises that one of the ways of creating jobs, reducing poverty and achieving economic growth and development is by the timely extension of credit to businesses, stressing that the bank is a big player in financial intermediation in that sub sector. “Ecobank is a major player in the SME space. We have won several awards in this regard. Which is why Ecobank is commonly referred to as the SME friendly bank. We will continue to partner with CBN and other funding partners to play the important role of promoting economic growth and development through the process of financial intermediation in the sub sector under any circumstance” he said. Agada listed business loans offered by Ecobank to SMEs as merchant advance for businesses using digital collection channels, inventory finance for key distribu@Businessdayng

tors, shop owners facility for traders, purchase order and invoice discounting, asset finance, agriculture finance amongst others. He further stated that the bank also supports trade by providing solutions for facilitating onshore and off-shore activities such as export finance, import finance, bonds, guarantees, small scale import forex via form Q etc. He further stated that Ecobank is also a major participant in the CBN Interventions such as Creative Industry Initiative (CIFI), Healthcare Intervention Fund, Real Sector Support Facility(RSSF) and all Agric related intervention funds amongst others. Moji Oguntoyinbo, head, AgriBusiness, Ecobank Nigeria, in her presentation titledHarnessing CBN and other Ecobank funding opportunities for Agric business in the emerging economic climate, said Ecobank, is sustaining its commitment to the agriculture sector in partnership with NIRSAL and some other developmental institutions in the next two to three years. According to her, Ecobank is a partner with the CBN in all its intervention schemes and programs which are focused on the development of the agricultural sector. ‘’This relationship is generating activities across the entire value chain of the sector’’, she stated.

Wednesday 08 July 2020

BUSINESS DAY

insurance today

E-mail: insurancetoday@businessdayonline.com

For effective risk management, leave insurance for insurers

How African insurers can leverage technology to grow premium, reduce claims experience

Modestus Anaesoronye

he Economic Sustainable Committee led by the vice president, Yemi Osinbajo was reported to have recommended to the Federal government that the Nigerian Social Insurance Trust Fund should provide insurance cover to health workers in the country. This is when it’s obvious that insurance industry still provides life insurance both to individual and as group. It is based on this role that the insurance industry provided insurance protection to front line health workers attending to patients during the Covid-19 pandemic, apart from other insurance protections (Group Life) the health workers may have got from their employers before the Covid-19. With that recommendation, the first question that comes to mind is, when did the NSITF become an insurer to sell life assurance products in the country, more so when the Insurance Act 2003 has not been amended or repealed to give other institutions such power? It has been a regular occurrence when it comes insurance matters, if not it would be very difficult to assign responsibility of another industry to a specialized institution like the NSITF apart from that which it has statutory been established to provide services on. Those who made such recommendation may be looking at the Corporation’s asset base only as strong enough, forgetting that there is something which is called reinsurance. For without reinsurance, which is centered on the concept of further spreading of risks, any organ-

L-R: Sarbeswar Sahoo,MD/CEO,Prestige Assurance Plc; Funmi Oyetunji,non executive director; Doyin Salami,chairman; Abayomi Odulana,company secretary during the 50th Annual General Meeting of the company held recently in Muson Centre,Lagos.

ization that sells insurance using only its asset base as security will end up insolvent after a while. Another issue that comes to mind is the issue of underwriting of the risks, for instance, will all the health workers pay a flat rate as premium cover, just as we have in the Employee Compensation Act 2010 which requires that organization should pay 1percent of the employee’s salary as contribution for cover. Insurance definitely does not work in such manner. One hopes such recommendation does not pass approval as the insurance companies in the country are still better placed to provide insurance covers to the health workers in the country. This has been a function which the industry has been doing since it came to prominence in the country from 1921. More so, insurance industry has over the years provided protections against fire, motor accident, general accident, theft among others in the country. Agreed, that there had been some

bad experiences in terms of management of claims, but this cannot be said of all the players, even as larger part of such opinion today are misinformation. There is no gain saying that the insurance companies like their counterparts in other parts of the world have provided protection to households and corporate entities through selling of products like fire insurance, theft insurance, money insurance, goods in transit among others. In this way, the industry has come to assistance of their insured’s in time of losses and needs. Another issue that should be of importance is that the industry over the years has acquired skills in risk management which it has placed at the benefits of the insuring public. Allowing an institution without such kind of skills to dabble in insurance will definitely end up as a disaster to the entire nation. Therefore, the government should have a re-think on this matter. The truth is that the insurance industry is a conglomerate of businesses

that exist for the survival of other businesses. This does not only apply to businesses but also to individuals. This is a function which the nation cannot afford to miss to a misdirected policy. The truth is that the insurance industry in Nigeria is presently in a better position to handle life assurance covers to the health workers than any other institution right now. On the part of the insurance industry, this calls for a rethink on the way that we carry out our businesses, especially in the area of claims management. We should not do those things that will give the authorities the basis for making out policies that are not in the interest of the industry which on the long run may also not be in the interest of the country in general. In this regard, the position of this write up is that insurance business should be left in the hands of the insurance companies who not only understands the technicalities of the practice but also, provide better insurance cover to Nigeria. We do hope Mr. President will ignore that recommendation.

igital insurance thought leaders are looking at technological innovations that will enable underwriting companies in Africa grow premium, reduce claims experience and increase profitability, leveraging analytics, Blockchain & AI Innovation. Besides, it will also enable them compete effectively with insuretechstartups that are already becoming major threats by proving insurance services online. To this end, The Africa Bancassurance Academy Limited (ABA) and West Africa Business School (WABS), is brining digital insurance thought leaders including Jean-Stéphane Gourévitch, CEO and Founder, Mobile Convergence Ecosystems Ltd UK ; Dr. Robin Kiera, CEO of Digitalscouting.de, Co-Author of award winning The InsurTECH Book, Ambassador of Open Voice Network, &Ambassador of Female Founders in InsurTech at Quesnay Inc., among others in a virtual discuss slated to hold between 27th and 28th of July. At a virtual media briefing held yesterday in Lagos, Obasi Ngwuta, the Director General &Chief Executive Officer of West Africa Business School (WABS) and Founder & Chairman, Africa Bancassurance

Academy Limited, told financial correspondents that the Digital Insurance Innovation Conference in Africa (DIICA) 2020,is designed to provide a comprehensive learning to people either working in or interested in innovating in insurance space creating products and access to services supported by technology. Ngwuta said DIICA is a professional conference recommended for re/insurance companies, banks and financial industry regulators across the Africa. It provides a platform for insurers, banks, policy makers, global risk managers, and intermediaries to connect and develop their knowledge, build valuable networks, explore emerging trends and map out actionable initiatives that will drive the sustainable growth of their business. With the theme: Insurance Digitalization, Insurance Transformation, Distribution Innovation and Managing Operational Risk in Covid19 Era, the Digital Insurance Innovation Conference in Africa 2020is where leading insurance, banking and government leaders from across the world congregate online to hear subject matter experts discuss upcoming trends, business opportunities, biggest challenges and best practices to adapt to the shifting insurance market demands in Covid-19 era.

WAICA Re grows premium by 21% to $70m Modestus Anaesoronye

AICA Reinsurance Corporation (WAICA Re) has closed the 2019 financial year with a Gross Written Premium(GWP) of $70 million, which represents 21 percent growth compared to 2018 figures. The reinsurance firm also

achieved a profitability of $9.5 million, which represents a profit growth of 38 per cent, even as its total sssets remained strong at $137 million and a shareholders fund of $89 million. Of all the classes of insurances it wrote, the accident class generates the highest net income for the group with over $4 million as at 2019 reporting year. Speaking on the activities of the firm, Abiola Ekundayo,

the group managing director, said, it has expanded across West Africa, East Africa, North Africa and Southern Africa, whilst writing reinsurance businesses from Africa and beyond. The company, he added, has grown from a zero gross premium to $70M in 2019 and still continues to grow, saying, WAICA Re, have, during the period also submitted itself to credit rating with both AM Best and GCR Ltd, while

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currently having an AM Best FSR rating of B+(Good) and an ICR of bbb-, with stable outlook for the ratings. On Covid-19 and its impact on insurance and reinsurance business, he said, WAICA Re’s operations have been limited in terms of physically connecting with its clients, due to the travel ban and restrictions, as well as social distancing and other preventative measures. However, he stressed that

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technology has enabled the firm interact effectively with existing and potential clients virtually online, adding that, “we are also able to work 100 percent remotely from home (activated as part of our business continuity plans) and we are certain that these measures have forestalled any stiffening of our operations.” To him, “At the core of WAICA Re are the people that drive the systems and processes. Our people are @Businessdayng

our strongest assets. In addition, the strong capital base, efficient ICT and the trust we have built over the years (as a reliable partner to our stakeholders) are what make WAICA Re strong.” He re-assured all stakeholders that WAICA Re is positioned for continuous growth and improvements and that, it is ready to do more to ensure stakeholders are adequately covered and compensated.

Wednesday 08 July 2020

BUSINESS DAY

INTERVIEW Our Target is to close year 2020 with Two Hundred Billion Naira balance sheet – MD, Jaiz Bank Hassan Usman is a seasoned and accomplished banker with decades of experience behind him. He is currently the Managing Director/CEO of Jaiz Bank Plc. Hassan is a 1985 first class graduate of Accounting from Ahmadu Bello University, Zaria, and an alumnus of Maastricht School of Management, Netherlands. In this exclusive interview with Bashir Ibrahim Hassan, GM, Northern Operations, BusinessDay, Hassan speaks on his bank’s stellar performance in 2019, which he describes in his own words as the “best since inception”; challenges of operating under Covid-19; and his optimism for a better operating economy in the country and his bank’s ambitious target for the year 2020, amongst others. Excerpts:

How has COVID-19 impacted the bank? COVID-19 has posed a great challenge for everyone, and to us as well. Our priority has been on how to operate without jeopardizing the health of our staff and customers that are coming. This was a big challenge; so we had to ask more than half of staff to stay and work from home. At the beginning, movements were restricted, and customers were not able to reach us, as their businesses were also under lock and key. Productively, not just for Jaiz bank but nationwide and worldwide, was affected. We still cannot tell you the real impact of COVID-19 on the Nigerian economy. Nobody can tell precisely how it is going to work out, but we pray and hope that as the system is being opened, that we only lost one quarter, and fourth quarter will come in with some growth, so that eventually we don’t go into recession by the end of the year. But, definitely, we are in a new normal, so we are poised to adapt to the new challenges. Our staff and supervisors are getting better with working off location. We have started to recover the level of productivity prior to COVID-19. We have started to re-engage and continue with our financial services to our customers. For Jaiz, I can say that, for this year, I do not see us doing much less than what we were able to achieve last year, in terms of productivity and all other indicators of our balance sheet. I am very hopeful that we will not see a serious reduction in our performance. Perhaps, we may not see the doubling of our productivity as it was in 2019, but I do not see us doing less. Talking about the projection of a deeper recession and slower growth in 2021, can you take us through how concerned you are with all these predictions. IMF have their criteria for making predictions. They don’t always have to come through www.businessday.ng

Hassan

and we pray they don’t come through for Nigeria. Most of the predictions are tied to government revenues, especially the oil sector revenue, which are significant. But in Nigeria, we look at the composition of agriculture, which the government has been giving much attention. It’s also doing well, but not just the traditional agriculture but the entire sector, with more processing capacity, especially in rice and other products. That is the area in which we envisage some growth, and if indeed the economy opens up, I hear the government will intervene in critical areas of the economy where the pandemic has beaten hard. I am hoping and believing that the economy will remain stable up till the end of the years and if that happens and if we do not have more se-

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‘

We look at the composition of agriculture, which the government has been giving much attention. It’s also doing well, but not just the traditional agriculture but the entire sector, with more processing capacity, especially in rice and other products

‘

How would you rate last year’s performance? he jury is out there -- we thank God Almighty for making the 2019 the best year we have had, We grew more than 50 percent in terms of size. Our deposits and assets grew more than 50 percent and our profit was more than doubled. On every count, 2019 has been the best year we have had since we started operating in 2012. How were you able to achieve this success? All of this is a continuum. I have always said that Islamic financing for non interest banking is new and everything new is like baby -- when you give birth to a child, you do not expect the child to start running; it take some time to grow, and business acclimatizes with the world. When a woman is in labour, you are expected to provide whatever the mother and the child would need to grow, just citing an example. Unfortunately for the Islamic bank, when it was born some of those infrastructure required to grow it was not there, but, happily, from 2018 the liquidity management product started to come in; so the bank is able balance the portfolio, risk and increase its returns. And as we grow the branch network and increase customers, as the customers get good services, they also tell others. So you have the words of mouth advertisement, which lead to more customers, and as they grow the profit comes with it. All of this is underscored by the commitment of the board and the staff of Jaiz bank. The bank has staff that are committed to the system and are ready to sacrifice to make sure the bank grow. Many of our staff left their conventional and other institutions. So they are committed to deliver on the job. They take the job as a way of providing humanity with a need.

@Businessdayng

rious deterioration in the price of crude -- which is around $40 now -- if it remains or improves better than that, I’m inclined to hope that we won’t go into a deep recession. How do you see the future of Islamic banking in Nigeria, considering the pace of growth? We expect that the Islamic banking by now should have grown more than what it is at present. Banking is a technical business that requires you dealing with resources belonging to many stakeholders. It is not the speed, but ensuring enhanced maturity level. Just like we see the growth of a child, it takes proper care and nurture for a child to grow. Jaiz have a vision to be the clear leader in Islamic financing in sub-Sahara Africa. To do that, Jaiz will have to grow and become a major player in Sub-Sahara Africa. Virtually, it is the major player in Nigeria and I have no doubt that we are on our way to being the major player in sub-Sahara africa starting with Nigeria. The road is bumpy but we have a product and model built on fairness and transparency. We hope that the value of this model is seen not only here but across the globe. And because of the value we bring to the table, it is growing at a double-digit pace. If you talk about a system growing double-digt pace, it surpasses any other sector in the economy, except maybe the Fintech, Iin 2015, our balance sheet was about N50billion. By the end of 2019, we are at N150 billion, which means we have tripled the size. By the end of business in June, we were almost getting to N180-N190 billion. Our target is to close this year with N200 billion balance sheet size. So in five years, if you grow from N50 billion to N150 billion, it means we are growing by at least 50 percent in less than 6 ye. We are doing 3 times what we had. Growing by this rate, I believe, just give us time we will be there.

Wednesday 08 July 2020

BUSINESS DAY

INTERVIEW ‘Digitalisation can help Nigeria achieve inclusive growth and economic development’ In a recently published white paper on “Enabling a Digital Nigeria” Microsoft outlined key steps towards the realisation of Nigeria’s plan to digitalise. In this interview with Segun Adams, Akin Banuso, country manager, Microsoft Nigeria, talks about the challenges and opportunities of going digital for Africa’s biggest economy. Excerpt: What will a digital Nigeria look like in terms of development and opportunities? or us to take advantage of the opportunities that would be presented in this fourth industrial revolution, there is the need to create a digital Nigeria. The creation of that digital Nigeria is what would help the country achieve the social and economic development goals that we are looking towards. A lot of what we spoke about in the position paper on “Enabling a Digital Nigeria” are the things that allow us achieve the economic development growth by ensuring financial inclusion, increasing the number of citizens that can meaningfully participate and hold a stake in the economy. Nigeria cannot do that on a large scale if it does not go digital which would enable more people to be included and participate meaningfully in the economy and in that growth.

in Infratech is that we need to get going about building those things that are foundational and making sure that we are prioritizing working with the government to build up that Infratech and we are seeing it grow. There are one or two issues which we mentioned somewhere, like the policy across the country in terms of the Right of way to lay cables for telecom companies, which is not uniform. Policy varies from state to state as they charge different amounts for laying the cables. These are things that the government can come together, look at and see how we can move that forward.

It is a very curious case that digital economy is about 15% of the global GDP and is expected to be a quarter of the world’s economy in less than a decade but Nigeria is missing in that economy. What would you say has been a challenge for us? The digital economy in Nigeria has largely been in its infancy and a lot of potentials that Nigeria has relates to not so much technology by itself but the resources that Nigeria has, which is the human capital. Really what we need to do is find a way to mine that and allow people to participate in this digital economy. If you look further in our paper you’d find that we talked about inclusion, and inclusion means we need to have the right infrastructures to allow people to be included in this economy and that is growing. While it is not where it needs to be, this has started. In your paper, Microsoft talks about the technology drive not just in terms of infrastructure but also from a mindset perspective. What does this mean for Nigeria? Very simply put, having a strategic mindset alongside a right technology can drive a successful transformation and you would see this in any large organization; it is not only about having the right people, the right process but also, the right mindset. This means that you should be thinking about how you can transform the culture to drive value from technology. It is about Nigeria’s effort to prioritize the growth of the digital economy across all the levels of Government, and you can think about elections, you can think about the three-tiers of our government, think about the local government and where you live; if only you were able to report the potholes that are appearing on your street to the local government

Akin Banuso

by simply deploying digital technology on your smartphone, think how quickly they can respond and that is at the third and lowest tier. You can go further up to the state. Also, think about opportunities like the biggest costs in properties. Think about when people want to rent properties or acquire a house or register land or title, think about how long and the cost it takes and all fraught in security and fraud. You can introduce digitalization in those processes, and instead of spending months and paying lawyers to go search paper piles, we could just digitalize that and you can have the reports within few minutes by just going online on a cloudbased solution. The mindset needs to change, it is not just technology itself, we need to be ready to just digitalize our whole process and that’s what we talked about; how the mindset alongside the right technologies will drive a successful transformation. There’s this common saying these days that “Data is the new oil”, and we know in the Nigerian context the over-reliance on oil for export earnings has not been very helpful hence talks diversification. Do you think digital is also a way to grow considering the success of India? I hundred percent think so, Nigeria must pursue every opportunity for economic growth. As part of that, building a healthy economy is one of the paths that the country must take. You talked about India, that is a very good example and if you think about what we are already doing here, when you look at the paper, we talked about our global customer support service team. We have a partner of ours called Tech Expert which started here two years ago and they started off by hiring 200 people supporting Microsoft customers globally. As of now, they’re at over a thousand and still growing. So you can see the kind of impact that has, not just from the job being created but also, the ecosystem www.businessday.ng

that it creates because you then have a whole bunch of young talented people with skills and experience of working with customers across the globe - and I am talking about in the US and in the UK where they’re solving big problems for big organizations and big customers of ours. This allows them to acquire the skills and the experience which are valuable when they come back into our society. We are working with them in what we call our user group and they are helping us during this COVID-19 pandemic to create an innovative solutions in health care to help government and everyone. In a recent report, Ernst & Young (EY) argued that new investments in infrastructures that support Infratech will be more valuable than investments in concrete and steel. Given that perspective, what should Nigeria be doing today? So again, there are numbers of steps that we put forth in the position paper on Microsoft that includes adopting technologies with long-term benefits and ensuring these technologies are delivered inclusively and equally responsibly to as many people as possible which will aid social and economic development in Nigeria. If you think about it, investing in the basic infrastructure of having broad activity right around the country would, first of all, help us to develop a sustainable and inclusive digital ecosystem where youths anywhere in the country will be able to access the right information, the right training and also would be able to contribute from wherever they are. Look at what’s happening during the COVID-19, unlike their peers with access to the internet, the students who do not have access to the right infrastructure cannot continue learning. At best what they have is access to lessons over the radio which is not interactive. So I think the way to look at what the EY global report was talking about

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What are the challenges and opportunities we should expect in terms of the policy framework and what should be top priorities when we’re talking about cloud computing for Nigeria and AI? The opportunities for artificial intelligence to augment human capabilities and improve society are almost limitless at this point. You can already see that there are self-driving cars on the streets in certain places, there is digital assistance that can anticipate our needs and there is digitalized health diagnosis, so AI is beginning to change the lives of people for the better. A lot of recent projects that have been done in AI is built on advances in Machine Learning, Reasoning and Perception. We are already applying AI solutions in Nigeria with some of the commercial customers, in terms of, imbuing and embedding AI in our technologies. For instance, when you call your bank, they could have AI help you out and resolve your problems before you even get to talk with a person, and that quickly is augmenting and enhancing the human capabilities. When we see the role of the government in this is in creating a legal and policy framework that will enable access to data or would encourage investment in AI technologies and ensure that AI technologies are trusted because it is very important; trust is a key component of this because we see AI as augmenting human capabilities and not replacing human beings. It is about making human life better and supporting human beings in making better decisions. For example, the advent of AI and its popularity is raising some issues and questions that we need to consider very carefully and that needs to be addressed to support AI innovation and preserve timeless value such as respect for individual autonomy and privacy. Also, we believe that the government should lead by example, so Nigerian should live by example as well. For example, government and multilateral institutions can help drive the adoption of AI by launching projects and systems that take advantage of cloud-powered AI. If you think about it, AI is built upon Machine Learning and normally, countries like Nigeria @Businessdayng

might find it difficult to participate in launching such projects because putting together a supercomputer and AI projects costs a lot, really a lot of dollars for that. With the advent of the cloud, you can rent the horse power that you need for that period you need it rather than buy these things and have them sitting there when not in use. When the government starts to build out and run projects and encourage research, then that will also require attracting a lot of data scientist to work on government projects. That is already a way of attracting and retaining our brightest talents. So if you are a young bright data scientist rather than thinking that you want to go abroad, you have a chance to work on projects right here in Nigeria that would be exciting and be of great benefit. There are a lot of things that people are using AI for these days like human genome sequencing, et cetera, even trying to find out cures to lifelong illness that we’ve been struggling with as a human race; if you can work on such exciting things why do we need to leave the shores of Africa? What are the things we need as a country to archive our 2024 Nigeria cloud computing policy target of a 30% increase in adoption of cloud computing by that time among federal public institutions and SMEs? I can’t speak on where we are right now but I would say that to reach that target there is a need to be a focused effort in terms of trying to digitalize the public sector, But at this time, the government needs to be working with the private sector because the private sector has a lot of experience in this. You mentioned the banks, for example in the banking industry, in finance we’ve already deployed technologies such as AI, so we have partners who have come up with solutions, for example, in doing fraud detection. Do you know we have a technology that locks out hackers even if they have password access to one’s online banking platform? The algorithm behind the technology can figure out by using biometric technology which means that the algorithm can figure out by how you enter the details of the password, by the keyboard presses whether or not you are the owner of the account. It can figure out such things, so AI can be used for multiple scenarios. In terms of government adoption, I think it’s very important that the government partners with the private sectors that are already using this and are far ahead. So we need to see more public-private partnerships, we need to see more government institutions, more government prioritization and communication, and this is already happening where the government is already starting to release policies, for example, policies and regulations around the use of cloud.

Wednesday 08 July 2020

BUSINESS DAY

INSIGHT

Infrastructure in Nigeria: Unlocking

InfraCredit - Business Model he InfraCredit business model was simple, in concept. There were many potential infrastructure projects, companies, or funds that needed to borrow long-term capital, but whose stand-alone credit was unattractive to most investors (including the expected large pool of investable pension fund capital). Prospects were bleak for raising either debt or equity for those projects. To address this problem, InfraCredit and its allies would perform their own underwriting of the risk and uncertainties. If satisfied, InfraCredit would enter into a contractual obligation with the project borrower to provide credit enhancement: a callable facility to which lenders could turn if the principal borrower got into trouble. The presence of InfraCredit would make some projects “bankable” which would not otherwise have been able to attract investors; and the presence of InfraCredit would enhance some rated securities several grades, making them both investable by more conservative institutions and also lowering the interest rate demanded by investors. This was a valuable commitment. For this service, InfraCredit would receive a fee from the issuers (the borrowers). These fees would be the major source of revenues for the Company. Operating costs included the costs of investigations, due diligence, and underwriting; sales and marketing to attract projects (and investors); and overhead and salaries. According to its promotional material, InfraCredit expected to adopt a “zero loss underwriting policy” and only underwrite a portfolio of investments that contained very low potential default frequency and low loss severity characteristics.42 Observers noted that if there were guarantee payment losses, those of course would also be operating losses for the Company. Traditional insurance companies and banks would expense and carry a loan loss reserve (in this instance a guarantee loss reserve). As yet it was unclear to observers how InfraCredit would book this consideration. In part, the accounting treatment would depend on the terms and conditions under which InfraCredit could reach back to the contingent capital. InfraCredit - The First Deal: Viathan SPV InfraCredit’s first credit enhancement transaction closed in January 2018 with an entity called Viathan Funding. The press release said, in part:43 With InfraCredit’s guarantee, Viathan Group through Viathan Funding Plc, a special purpose vehicle established to raise debt

capital, successfully accessed the debt capital markets for the first time by issuing a NGN 10.0bn 16.0% Series 1 Senior Guaranteed Fixed Rate Bond Due 2027 (the “Viathan Bonds”) backed by the irrevocable and unconditional guarantee of InfraCredit and accorded ‘AAA’ long term national scale rating by Global Credit Ratings Co.(GCR) and Agusto & Co.c The Viathan bond issue was subscribed by sixteen institutional investors including about a dozen PFAs and two insurance companies. The largest investors were two PFAs, ARM and Stanbic. See Exhibit 12 for a list of all Viathan bond investors and the amounts of their investments. The Viathan bonds priced at an 82bps premium to the 10-year sovereign benchmark bond (NIGB 16.288 03/17/2027 Govt), according to the press release. It was expected that the bonds would be listed on the FMDQ OTC Securities Exchange. Observers noted that it was beneficial for institutional investors to have access to a liquid market in the event www.businessday.ng

they did not want to hold the bonds to maturity. Viathan expected to use the bonds to expand its generation capacity by 7.5 MW, to construct a 104,800 scm/dayd Compressed Natural Gas (CNG) plant, and to refinance short-term bank debts, according to the release. This was the final step in a long process for Viathan. In July of 2015, the private equity firm Synergy Capital invested in the existing Nigerian operating business Viathan Engineering LTD. The intent was to build and own power projects.44 Subsequently, Synergy Capital and Viathan Engineering formed Viathan Funding as a special purpose vehicle (SPV) to pool cash flow generated by certain Viathan assets for the purpose of raising debt capital. Viathan Funding as a potential bond issuer was given an implicit BBB credit rating by Global Credit Rating Co. (GCR), a rating agency, in June of 2017.45 With the involvement of InfraC-

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redit, in October of 2017 the Viathan Bonds were rated AAA by GCR. The offering was oversubscribed, and the bonds were sold, including to the 16 institutional investors mentioned above.46 Observers commented that this infrastructure offering was denominated all in local currency (the cash flows, the investors, and the returns) and was AAA rated without a sovereign guarantee. As the first fully guaranteed private infrastructure bond issued to finance a privately-owned Nigerian power company, the Viathan bond was viewed by a number of pension funds as an attractive investment opportunity. According to Eric Fajemisin, Stanbic’s CEO, The bond was of interest to us because it was a ‘first of its kind’ type transaction, infrastructure bond issued by a private entity to finance a privately-owned power company. We view this as an area with huge potential if accessed correctly as it presents huge benefits for institutional investors like pension fund administrators and managers. It also was materially enhanced via @Businessdayng

the security structure provided by NSIA and GuarantCo.47 Fajemisin viewed the Viathan bond as being clearly aligned with Stanbic’s longterm sustainable return focus and meeting the PFA’s most critical investment considerations: improved diversification, attractive yields/returns, and significant de-risking (100% guarantee and issuance backed by solid credit rating). Further, he recognized the important role infrastructure investing could play in addressing the large infrastructure gap in Nigeria, noting that “with efficient deployment of capital, we expect infrastructure investing to be a major catalyst for the next growth phase. Stanbic is keen to take advantage of opportunities in this regard so long as risks can be identified, agreed and effectively mitigated.”48 In line with regulatory limits, Fajemisin expected infrastructure bonds and funds to make up close to 15% and 10% of the Stanbic portfolio, respectively. In January of 2018, Nigerian government bonds denominated in Naira (FGN Bonds) and maturing in 2027 were trading at yields of about 14.40%.49 For comparative purposes, in many emerging

Wednesday 08 July 2020

BUSINESS DAY

pension fund investments (3) countries 10-year BBB corporate bonds traded at about 400 bps above a treasury offering of similar tenor.50 InfraCredit Growth Trajectory InfraCredit had ambitious growth goals. Analysts projected guarantees in place to approximately triple each year for the first several years of operations (see Exhibit 9).51 InfraCredit would presumably face sales and underwriting challenges in identifying, qualifying, and closing deals at that pace. InfraCredit’s credit enhancement business model might not require as much capital as a direct investing model, but the balance sheet would likely still need to grow (see Exhibit 9). The Viathan portfolio contained several assets, one of which was a 7.5 MW expansion of a power plant. If InfraCredit could successfully unlock funding for smaller power plants, not needing complex guarantees, this would be very positive for the nation. Azura-Edo: An atypical megaproject or a model to emulate? A benchmark large power project was the Azura-Edo facility. Azura-Edo IPP was a Special Purpose Vehicle (SPV) established to design, finance construct and operate, on a build-own-operate (BOO) basis a 459 MW gas-fueled open cycle gas turbine (OCGT). According to a World Bank Project Appraisal,52 the SPV’s sustainability would depend on the SPV’s ability to design, finance, procure, construct, test, commission, operate and maintain the power plant. The SPV would have one main source of revenue derived from the sale of electricity under a power purchase agreement (PPA) entered into with NET (the Nigerian electrical transmission utility). The project cost was estimated in 2014 to be about $US 813 million and completion was planned for 2018. The direct EPC (Engineer, Procure, Construct) cost of the plant was about US$387 million, or about US$843 per kW which was in line with international experience. The Azura-Edo financial configuration was complex and involved many levels of guarantees that were slow and difficult to secure. As summarized in the World Bank project appraisal document: Based on the Lender’s Financial Model…the SPV is financed with 27.5 percent equity and 72.5 percent senior and mezzanine debt. The senior debt will be provided by a mix of international banks led by Standard Chartered Bank, with a total aggregate amount of US$200 million; they will be beneficiaries of IBRD’s and MIGA’se guarantees, each covering 50% of the exposure in this tranche. The local commercial tranche is expected to amount up to US$150 million, to be provided by First City Monument Bank PLC (Nigeria)(“FCMB”) who, in turn, is expected to receive (and pass on to the Project) concessional financing from Nigeria’s Bank of Industry (“BOI”) through the Power Aviation and Infrastructure Fund (PAIF). The DFI tranche is expected to represent close to US$240 million of the senior debt financing, of which IFC expects to commit US$50

million. The Project financial plan also includes up to US $61 million of mezzanine financing, of which up to US $30 million is expected to be provided by IFC.53 The financial model projected availability, tariffs, revenues, and costs that anticipated a healthy annual debt service coverage ratio (DSCR) for the senior debt of more than 1.7x the annual obligation See Exhibit 13 for a presentation of the Azura-Edo pro-forma project costs and financial plan. The World Bank mentioned that for a project of this size and perceived risk, lenders expected that kind of cushion. Observers noted that this was an extensive administrative and legal effort involving many entities, much development finance, and substantial financial conservatism. For the most part, the availability of debt and guarantees from IDFI’s was limited. According to InfraCredit’s promotional material (referring to Nigeria’s National Integrated Infrastructure Master Plan), Nigeria needed US$ 25 billion per year to bridge its infrastructure deficit. That worked out to more than 30 Azura-

Edo scale projects per year; not a likely prospect given the constraints in banks and the effort to get that project organized. InfraCredit believed that 1 trillion Naira (about US$3 billion) was the estimated minimum amount of potential pension funds investable in eligible infrastructure bonds (based on current PFA Investment Thresholds and Limits in Draft (2015) PENCOM Investment Guidelines).54 If accurate, that could be a source of capital for dozens of projects and also obviate the need for multiple international approvals. InfraCredit - What could go wrong? At the project level, most of the exposures that the World Bank mentioned for the SPV could all have significant downsides. The World Bank listed over 50 in its Road Concession Risk Matrix,55 in broad categories including design risk, site risk, construction risk, force majeure risk, revenue risk, operations and maintenance risk, performance risk, other market risk, political risk, default risk, and strategic risk.

At the portfolio level, an entity like Viathan Funding had exposure to multiple projects. This could represent useful diversification – or there could be project on project impacts if the projects were dependent on each other or on a common component like fuel, transport, working capital, or personnel. At the guarantor level, InfraCredit was exposed to problems in the underlying business performance of the assets funded by the securities InfraCredit was enhancing. From an operating point of view, InfraCredit had to successfully source potential guarantee customers, underwrite and close on the obligations, manage the investment, and access either core capital or contingent capital to support the guarantees. Much could go right, but much could also go wrong. Another Approach: Africa Infra Plus Fund Africa Infra Plus Fund (InfraFund), sponsored by Africa Plus, had another approach to infrastrucwww.businessday.ng

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ture investment. Azura-Edo was a single project financed in large part with IDFI funds, and the Viathan SPV deal was a bond issue backed by cash flows from a portfolio of assets (and also AAA rated thanks to the InfraCredit guarantees). In contrast, InfraFund employed a capital structure more like a US private equity investment (and structured as a trust). In the InfraFund model investors committed capital for a set period, the trust invested directly in multiple projects or companies, and liquidity events were expected in the 3 to 5-year time frame in each investment.56 The Africa Plus team felt that there were very few examples of successful large-scale projects in Nigeria. In addition, they identified the focus of the majority of foreign investors as interest in large-scale projects. The Africa Plus team thus wanted to address three key unmet needs of the infrastructure investing market: Continues tomorrow

Wednesday 08 July 2020

BUSINESS DAY

MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

Clarion Bonded Terminal reopens for business, offers demurrage exemptions to cargo owners …Customs has absolves our operations of all blames - management amaka Anagor-Ewuzie

larion Shipping We s t A f r i ca n Ltd, operator of Clarion Bonded Terminal located in KLT, which operates under Apapa Command of the Nigeria Customs Service (NCS), said the management of Customs has absolved it of all allegations that led to stalling of it operations as well as sealing of the terminal on June 11, 2020. The terminal operator, which reopened for business on July 3, 2020, said it has also concluded arrangements to offer demurrage exemptions to all cargo owners that have paid their duties and was ready to take delivery of their consignments before its operation was stalled in June. Speaking in Lagos on Monday during a courtesy visit to Hassan Bello, executive secretary of the Nigerian Shippers Council (NSC), Emmanuel Osonwa, legal advice to Clarion Bonded Terminal, who commended the Council for its intervention in reopening the

L-R: Ifeoma Ezedinma, director, Regulatory Services, Nigerian Shippers’ Council; Hassan Bello, executive secretary/CEO, Nigerian Shippers’ Council; Klaus Laursen, newly appointed country manager of APMT and Emeka Ogbaje of APMT, during courtesy visit of Klaus Laursen to the Council recently.

terminal for business after about three week of sealing, said Customs has reopened the terminal after full investigation that exonerated the terminal from all blames. According to him, the terminal has also given demurrage waivers from the 11 June, 2020 when the terminal was sealed, to Friday July 3, 2020 when it was reopened to shippers plus another four extra days.

He said the terminal has introduced several trade facilitating tools such as 24-hours operations including Saturday and Sunday, 100 percent evacuation of cargo using barges as well as efficient cargo handling equipment to not only ensure that shippers are well served, but to offer cost effective services to their customers. Osonwa, who stated that

NIWA blames Ikorodu boat mishap on violation of extant regulation amaka Anagor-Ewuzie

he ill-fated Lalek Marine boat that capsized on Friday night with 14 passengers onboard, failed to adhere to 6pm sailing regulation guiding water transportation services in Lagos, the National Inland Waterways Authority (NIWA), has said. According to preliminary report on the sad incident released by the Lagos area office of NIWA, the boat operator apart from violating the extant law guiding the time of operation, which is 6pm and not 8pm, the boat operator also overloaded the boat against the Covid-19 protocol, which allows only 60 percent carrying capacity for all types of boats in order to encourage social distancing. “We at NIWA responded immediately and joined the

Marine police, LASWA and other concerned agencies to rescue the 14 passengers and also recovered six others already drowned, with one missing,” explained a statement signed by Sarat Lara Braimah, Lagos area manager, NIWA. According to Braimah, the Ebute Ero jetty, which was the departure point of the ill-fated boat, will henceforth be monitored by NIWA police pending the conclusion of investigation on the incident. She further disclosed that the owner of the boat is being tracked down by NIWA to offer explanation on how the unfortunate incident happened. She noted that NIWA management had about a month ago offered waiver and reduced sundry fees as well as other operational charges across board in the brown water economy to help stakeholders stick to post Covid-19 protocols and www.businessday.ng

to check tendencies that might encourage violation of extant regulation. “The Managing Director of NIWA, George Moghalu knew some operators might be tempted to make quick money in order to make up for the lost opportunities and financial losses experienced during the lockdown. Therefore, he was proactive to reduce the fees and charges, knowing the expected impact of the new normal on operators but we can see from what happened that some operators are ‘so uncaring and selfish’ to end the lives of innocent people through blatant violation of the rules of engagement,” Braimah said. Recall that the boat named Lalek Marine, operated out of Ebute Ero jetty on Friday night by 8pm and capsized on its way to Ikorodu, shortly after departure, with 14 passengers rescued and six dead with one missing.

efficient service delivery was the major reason that prompted the introduction of these trade facilitation tools, said the terminal was determined to give relief to its customers by using barge operations to ameliorate the difficulties and delays that come with commuting through Apapa traffic congestion. Giving insight into what happened, Osonwa said

the terminal, which was allocated two ships by Maersk Line and one ship by Cocos Shipping PIL, was carrying out its timely and expeditious cargo evacuation from the ships when the Customs controller of KLT came and sealed the terminal over allegations of ‘illegal activities and lack of Customs approvals for Clarion to operate a bonded terminal’. According to him, the controller at that time thought Clarion was supposed to be doing only empty containers. “This happened on June 11, 2020 and we had close to 4,000 containers inside the terminal. We know Customs as agency that maintains discipline and standards as regards to their revenue but on our part, we knew that all our operations were legal. This was why we went further to ask questions because prior to the sealing of the terminal, officers of Apapa Command who were assigned to the terminal, were also doing their jobs and releasing goods without issues,” he said. Osonwa, who stated that nobody notified them before

the sealing as required by Customs and Excise Management Act (CEMA) that guides Customs operations, said there were some containers loaded on barges at seaside ready to leave APM Terminals to Clarion terminal, when the operation was stalled. “We sent all our approval papers to Customs headquarters through the ACG Zone ‘A’ because we were not able to go to Abuja to make our submission due to the Covid-19 lockdown. Believe me, with Covid-19 in place, issues became more difficult to handle and that was why it took these length of time to resolve,” he explained. He however said that the most important thing was that after investigation, Customs saw that the terminal did not do anything illegal as alleged. “We want our customers to know exactly what happened. It was not our fault in anyway. This was why we are giving demurrage waiver but with frame. We have notified our customers to come and take delivery. Those who have paid duties before the sealing would enjoy demurrage waivers,” he added.

Prioritise seafarers’ welfare, MTSL urges stakeholders …Sets to hold virtual seminar on Thursday amaka Anagor-Ewuzie

he Mission to Seafarers, Lagos (MTSL), a humanitarian and non-governmental organisation has urged maritime stakeholders to prioritise seafarers’ welfare as a means of developing manpower and capacity of seafarers. The MTSL, being one of over 260 Missions to Seafarers centres operational across the world, is dedicated to caring for Seafarers. As welfare focused organisation, the MTSL will on Thursday 9 July, host a virtual seafarer seminar tagged, ‘Seafarer Welfare: Are We Missing the Boat?’ Apart from bringing activities of the mission to the public, it will also bridge the gap between industry players and intimate stakeholders with the seafarers’ community in Lagos, and world over. “It is our hope and intention that we can form a sustained and substantive collaboration with the industry and the public, even as we

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strive to reshape seafarers’ welfare in the country,” said Adebayo Sarumi, chairman, MTSL at a media briefing to announce the mission’s upcoming webinar in Lagos. According to Sarumi, seafarers’ welfare is a hydroheaded challenge that has institutional, political, cultural and social indicators on the larger society. Sarumi, who noted that over 3,000 ships call Nigerian ports annually, said that over 80 percent of the ships that berth on Lagos waters are being foreign flagged. “The delivery of these goods by sea is often taken for granted because of the consistent flow of trade. A pointer to this is, the fact that even during this precarious COVID-19 period, maritime trade remained an essential service,” said Sarumi, adding that seafarers are also essential workers whose welfare should be prioritised. He called for collaboration with maritime stakeholders in developing standardised MTS facility in Apapa, which is in @Businessdayng

line with the mission’s strategy of upscaling the centre to an acceptable standard. Abimbola Aduroja, the MTSL Chaplain, said the mission has identified some of the needs of the seafarers as it relates to welfare, hence the need to refocus the centre. According to Aduroja, the webinar will address the issue of employment and employability of seafarers in Nigeria. “It is our hope that both the public and industry stakeholders would join us in this regard.” The facilities being developed at the centre include recreational area such as a lounge, swimming pool, media centre, gym, library and quiet rooms for meditation among others. Speakers for the webinar includes Adewale Adeyanju, president-general Maritime Workers Union of Nigeria; Ibrahim Abdubakar Jibril, director, Maritime Labour Services, NIMASA; Ben Bailey, director, advocacy and regional engagement MTS, UK, among others.

Wednesday 08 July 2020

BUSINESS DAY

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Wednesday 08 July 2020

BUSINESS DAY

FEATURE AKK Pipeline sets stage for Nigeria’s economic stability

Federal government under President Muhammadu Buhari has finally laid the long awaited foundation for the country’s economic recovery with the activation of the highly fundamental AJAOKUTA-KADUNA-KANO(AKK) pipeline project.

he flag off of the project addresses anxiety among Nigerians over government’s nonresponsive posture towards unending calls for congenial business environment. It also marked a significant leap in the implementation of the nation’s lingering gas infrastructure blueprint designed to enable the industrial sector of the economy optimize its potentials. In flagging off the project virtually from the State House, Abuja, President Muhammadu Buhari directed the Minister of State Petroleum Resources and Group Managing Director (GMD) of NNPC to authorise the Engineering, Procurement and Construction (EPC) consortiums involving indigenous pipeline giant, Oilserv Limited, to commence construction operations at the project camp sites without further delay. “We promised the Nation that we will expand the key critical gas infrastructure in the Country to promote the use of gas in the domestic market. These include the Escravos to Lagos Pipeline System - 2 (ELPS-2), Obiafu to Obrikom (OB3) pipeline and the AKK. I therefore directed NNPC to ensure that these critical projects are completed on time, within budget and specification,” the president stated. President Buhari summarised the key economic objectives of the project: “When completed, the AKK Gas Pipeline Project will provide gas for generation of power and for gas-based industries which would facilitate the development of new industries and also the revival of moribund industries along transit towns in Kogi State, Abuja (FCT), Niger State, Kaduna State and Kano State. “This will ultimately create numerous direct and indirect employment opportunities while fostering the development and utilization of local skills and manpower, technology transfer and promotion of local manufacturing. The project is therefore part of the delivery of our Next Level Agenda for sustainable development and enhancement of the economic prosperity of our country.” Policy Focus The AKK pipeline which was conceived as part of the Nigerian Gas Masterplan (NGMP) by former administrations of the federal government had remained in the policy shelf for nearly a decade. Its implementation by the present administration is a significant progress from the delivery of the Obiafu-Obrikom-Oben (OB3) gas grid development. The AKK project is designed to enlarge the domestic gas market by using the energy demand from the northern parts of the country to enhance the commerciality of domestic market play and confer viability on investments in government’s gas commercialization agenda. According to the Nigerian National Petroleum Corporation (NNPC), the gas commercialization programme is meant to leverage on the nation’s huge natural gas reserve base to stimulate growth and enable Nigeria’s migration from the current mono-economy into a diversified economy. The AKK project would enable the injection of 2.2 billion standard cubic feet of gas per day (bscf/d) into the domestic market upon completion, and facilitate additional power generation capacity of 3,600 megawatts (MW), the corporation said. The 614 kilometer pipeline is expected to spark off economic activities that would ultimately deliver on a bundle of broad national economic aspirations in the petroleum industry through which the

Ajaokuta-Kaduna-Kano

government targets to position the country’s abundant natural reserves as the key enabler for economic diversification from oil dependence. Processes in realizing the policy targets include clearly mapped out strategies to deepen the domestic gas market, arrest gas flaring at oil production sites, enhance national revenue through natural gas commercialization, boost the Nigerian Content of the huge budget petroleum industry, and build sustainable energy infrastructure for the domestic economy. According to the project profile from the Nigerian National Petroleum Corporation (NNPC), the $2.592 billion AKK pipeline project will provide channel for the upstream and midstream petroleum industry operators to deliver their natural gas output into the grid and spur industrial evolution along the new pipeline corridors in northern Nigeria. Economic Significance Energy is considered most critical among all factors of production, and acute shortage of energy has been the major bane of industrial and commercial enterprises in the country. Thus the AKK pipeline is therefore considered a key factor in sustainably resolving issues of industrial energy for the present and future generation of Nigerians. Before now, members of the Organized Private Sector (OPS) of the Nigerian economy, especially the Manufacturers Association of Nigeria (MAN), had consistently called on government to provide critical factors of production to make investment in the Nigerian business environment attractive, and economically rewarding. Leaders in the country’s OPS agree that the best response government has given to the agitation from the business community is to provide hope for production infrastructure that would make the domestic environment more attractive to investment. So, AKK pipeline when realized will be a sustainable factor of production that would enhance the local operating environment for business in the country. The facility will also remain central to all aspects of Nigeria’s industrial development: boosting power generation, stimulating manufacturing activities and de-constraining new field development in the oil industry. In the upstream sector of the petroleum industry, the AKK pipeline will www.businessday.ng

enable more oil production by helping operators to meet the condition of zero flare development plans. So, operators who have been held down by market limited destination for associated gas are now provided space in the AKK pipeline. Again, expanding the domestic gas market with the AKK pipeline will boost investor confidence in the government’s flare gas commercialization programme by providing ready offtake channel for harnessed gas. This strongly propels Nigeria’s drive to attain zero emission at oil production sites and probably enable the country exit the inglorious global greenhouse emission chart. Again, the AKK pipeline promises double barrel economic advantage for the country by earning direct income for government and also helping develop indigenous industrial capacity by providing cheaper, cleaner and more sustainable energy. It will become a consistent revenue earner for all stakeholders including the government by operating a tariff based gas transmission services to assist producers wheel gas to market. It will also entitle government to tax income, equity dividend and direct market returns on volume gas sales. Also, the AKK pipeline flaunts all the attributes of industrial stimulus. Manufacturing capacity in Nigeria today is highly constrained by energy issues. Running manufacturing by liquid fuel is far too expensive and unprofitable; power supply for industrial activity is grossly inadequate. So the AKK pipeline holds potentials to feed power plants with adequate fuel energy to generate adequate electricity for homes and businesses. The pipeline can also directly feed industry and commerce with cleaner, cheaper gas energy. In both ways the AKK pipeline is going to enable the industrial sector of the economy optimize its potentials for growth, job creation and contribution to gross domestic product (GDP). Nigerian Content Perhaps the biggest value is that the AKK pipeline holds the biggest valid testament to government’s commitment to the Nigerian Content Policy. Save the funding arrangement which necessarily entails Chinese content in the project, the full project scope would have been delivered by the indigenous Oilserv consortium which also delivered the even more challenging Obiafu-Obriko-Oben (OB3) pipeline on which the AKK pipeline is anchored.

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More importantly, the involvement of Oilserv makes the project more realistic. The reliance on local expertise also makes the infrastructure more sustainable and cheaper in terms of long term maintenance plan. With the Oilserv consortium government would not suffer maintenance hitches similar to the impasse that plague the local refineries following the refusal of original builders to honour maintenance commitments. It is therefore taken for granted that the Oilserv consortium would regularly be on ground to guarantee the integrity of the pipeline. Chairman of the Oilserv Group, Engr Emeka Okwuosa, says that the consortium led by his company is working in concert to provide best in class EPC services for NNPC and Nigeria in consonance with the company’s track record of delivering world class pipeline construction even in most challenging terrains. “Oilserv is a100 percent indigenous company currently employing more than 600 staff. With this new AKK development, it probably will go to between 1,500 and 2000 at the peak of the personnel matrix. “But the fact remains that we are ready. This is not the first project. We are commissioning the OB3 gas project which is slightly larger than this in terms of diameter. The OB3 is 48 inches in diameter. So we have the experience, we have the personnel, we have the equipment and we are capable and we would deliver this project. On the projects potential for job creation, Engr Okwuosa declared that the company would significantly increase its workforce during the project’s time frame, adding that additional staff would be recruited from communities that host the project. “Like I said, we will crank up our employment by more than 1000 and major part of this 1000 will be indigenes of the areas where we are. We have a clear programme to develop the areas where we build pipelines.” In advancing Oilserv’s performance profile in petroleum industry pipeline delivery, Engr Okwuosa declared that the consortium is conversant with driving through tough and challenging terrains. “Every project comes with its challenges. There are challenges in driving a project like this in virgin forests, to go through rivers, rocks, to deal with security issues. These are challenges but I don’t have fears because we have the knowledge and the experience to deal with it all. We are very ready to deliver the project and deliver the project on time.” Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, vouched for the contractors selected for the project. “We are confident that the EPC contractors will deliver the project on time, within budget and to quality specifications,” he declared. Mallam Kyari stated that “The current Administration under the leadership of His Excellency, President Muhammadu Buhari has made it a priority to ensure revenues from oil and gas resources are utilized to support the emergence and growth of other non-oil sectors of the economy,” inferring that the pipeline is one of the economic diversification efforts of the government. As Governor Yahaya Bello of Kogi State couched it, use of indigenous Oilserv consortium in delivering the AjaokutaKaduna-Kano pipeline project is one of the most significant economic stimuli that will catalyze growth activities in Nigeria in the prevailing coronavirus era. The indigenous consortium of companies led by Oilserv Limited is to deliver the first phase of the 40 inch diameter @Businessdayng

pipeline which would run from Ajaokuta in Kogi State to KP303 between Abuja and Kaduna. The consortium is also to deliver a Terminal Gas Station (TGS) which is a 24 inch 15 kilometer spur line to a planned power station in Abuja. Governor Bello’s applause for Nigerian Content of the project laid ground for him to take early lead in projecting graduates of his government’s technical training programme for absorption in the construction stages of the project, appealing that the involvement of the local youths would go a long way in building community stakeholding in the project. Role for Host Governors The governor’s keen observations also amplified President Buhari’s call on the governors of the states that host the pipeline rights of way provide the contractors the enabling social and security environment to deliver the projects within the specified time frame. “I am counting on the Executive Governors of Kogi, Niger, Kaduna and Kano States as well as the Minister of the Federal Capital Territory to provide the enabling environment and support for the project,” the president appealed in his speech at the flag off event. In reiterating the need for well meaning Nigerians to support the pipeline project, President Buhari emphasized the need for the country to lay solid infrastructure for diversification of the economy in the face of emerging dangers of continuing to rely on crude oil export income. “The lessons learnt from the Novel Corona Virus (COVID-19) Pandemic further underscore the drive of this Administration for export substitution initiatives and projects that will promote local manufacturing. Consequently, harnessing and commercializing our vast gas reserves is an enabler for rapid economic development and diversification of the economy. This remains a cardinal objective of our Administration’s drive towards ensuring a stable, sustainable and more prosperous future for our citizenry,” the president stressed. As currently planned, the AKK pipeline project is envisaged to be completed by 2023 when the tenure of President Buhari would elapse; a consideration that might have informed the short delivery time lines and segmentation of the contracts among consortiums that have simultaneously started work at Ajaokuta and Kaduna respectively. Conclusion It is therefore strongly inferred that President Buhari is conscious of the need to deliver the AKK pipeline before leaving office; a strategy that would avert leaving behind another white elephant project that might build into the unenviable projects list that already contains well conceived but stalled megaprojects like the Ajaokuta Steel Rolling Mills, Kogi State; the Aluminium Smelter Company Limited (ALSCON), and Nigerian Newsprint Manufacturing Company, Akwa Ibom State, just mentioning a few. Although the pipeline runs into the northern parts of the country, its full economic chain connects the south by providing market and viability for gas production, processing and monetization investments in the Niger Delta. With its economic benefits connecting all sections of the country and integrating its full business cycle it is therefore critical for all stakeholders, including professional groups, business groups, political administrators and community stakeholders to support the AKK pipeline and enable it deliver full objectives and benefits for all.

Wednesday 08 July 2020

BUSINESS DAY

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Wednesday 08 July 2020

BUSINESS DAY

news UBA Group announces appointment of deputy managing directors for Nigeria, Africa

COVID-19 shrinks e-bills payment to five-month low

nited Bank for Africa plc (UBA), a panAfrican financial services group, has announced the appointments of Ayoku Liadi and Oliver Alawuba as deputy managing directors in charge of UBA’s Nigeria and Africa businesses, respectively. The creation of the new positions, reporting to Group CEO, Kennedy Uzoka, represents further strategic recognition of the growth of UBA’s pan-African businesses, now in excess of 40 percent of Group revenue, and the critical importance of Nigeria, the Group’s largest market. Combined with UBA’s unique international business, operating from New York, London and Paris, UBA Africa and Nigeria, offer an unparalleled service offering to clients across Africa and globally. Commenting on the appointments, Group chairman Tony Elumelu, said: “In 2005, we set out our pan-African vision. Fifteen years later, we are present in 20 African countries, serving over 20 million clients, leveraging our service culture and technology platform, to provide an integrated and seamless customer offering across the continent. “In Africa, we lead in innovation and service, while our international business, operating from New York, Paris and London, provides global and African clients access to

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treasury, trade finance and corporate banking products, uniquely tailored to the African opportunity. These senior appointments represent our commitment to optimise our management structure to best serve our clients and drive our business success.” O liver Alawuba has worked with the UBA Group for almost 20 years and was appointed in January 2020, CEO for the Group’s Africa operations. Oliver’s knowledge of UBA’s business in Africa is unrivalled, as he previously held the role as CEO of UBA in Ghana and more recently, as Regional CEO for UBA in Anglophone Africa. Ayo Liadi joined the UBA Group in 2014 and was appointed the Executive Director of Lagos and West bank in Nigeria, two years later. Ayo is widely recognised for his innovation in driving business development. Also announced was the retirement from the Board with effect from August 1, 2020, of Dan Okeke, who has been with the Group for 22 years. Dan served on the board as an Executive Director for three terms and a total of nine years. According to the Group chairman, “Dan was born for UBA. He has worked tirelessly for the Group and achieved so much in the past two decades. We will miss him, but he will still be very much around us.”

afety measures to check coronavirus (COVID-19) spread did not spare elect ro n i c t ra n s a ctions as the volume of e-bills dropped to its lowest in five months, but the value is held up. Although the number of mobile phone connections in Nigeria has increased, the volume of e-payments for bills dropped between January and May 2020, according to data from Nigerian Inter-Bank Settlement System (NIBSS). The volume, which began the year at 122,685 in January dropped to 44,465 in May, representing over 100 percent decline. It is the first time in four years the volume has repeatedly failed to match or surpass the figures from the same period in the previous year. January 2019 was the last month the volume of e-bill payment recorded a high of 134,656, and since then growth has declined. Several reasons are re-

sponsible for the decline. Apart from the drop in income due to layoffs, pay cuts and furloughs, the closure of schools due to Covid-19 lockdown, affected the volume of payments. Payment of school fees often accounts for the most volume and value of etransactions. It should also be noted that electricity distribution companies like Ikeja Electric plc suspended disconnection for two weeks in April for customers it said cannot afford to pay because of the

lockdown. The short-term palliative meant that customers did not pay for electricity during the period, which also affected volume. The first month of the lockdown - April - was the most affected as transactions dropped almost half (40,992) from what they were in March 2020 (80,418), and more than double compared to April 2019 (95,784). While volume dropped, value, however, is relatively holding up, posting an alltime high of N107 billion in

March. Although the lockdown was declared in March, total compliance began in April. Hence, experts say it is possible that many Nigerians had anticipated a long-term shut down, and this would likely explain the drop in volume and value in April. While the month of April saw the worst decline in volume, the value for the same month dropped to N85 billion from N107 billion the previous month. The value dropped further in May to N80.2 billion.

Hiding group accounts, oil contracts hurt NNPC’s transparency efforts ISAAC ANYAOGU

ecenteffortsbytheNigerianNationalPetroleum Corporation (NNPC) to increase transparency are marred by non-publication ofitsgroupfinancialaccountsand refusaltodisclosecontractssigned with oil companies. In June, the NNPC published itssubsidiaries’accountsbutwithheld the critical Group account. The NNPC business operations are managed through Strategic Business and Corporate Services Units (SBUs/CSUs) in diverse locations across Nigeria, and its group accounts present a complete picture of its financial affairs. “It is expedient that its accounts are published such that the general citizenry in whose interests the NNPC manages these resources are apprised of its dealings,” Ayodele Oni, energy lawyer and partner at Lagos-based Bloomfield law firm, says. At a time when countries are keen at attracting investments into their energy sectors, and the NNPC is involved in many joint ventures and other shared production arrangements with local and international oil companies, analysts say Nigeria should know these details.

“It is auspicious that in line with international best practices, the NNPC needs to be positioned as the channel for Final Investment Decision by publishing it and adopting other best corporate governance practices,” Oni states. The NNPC is also not making the public contracts Nigeria signed with oil companies five years into the administration of President Muhammadu Buhari, who came to power vowing to end corruption. Petroleum contracts set out the legal framework for oil and gas projects. When they are published, it allows for public scrutiny but previous governments have balked at disclosing them, claiming it could expose company secrets, give undue advantage to competition and violate contract terms. But an analysis of 23 upstream and downstream contracts in Nigeria, including 10 model contracts, by Rob Pitman and Anne Chinweze, analysts at the Natural Resource Governance Institute (NRGI), an extractive sector transparency non-profit, reveals that contracts in Nigeria contain several terms for which a strong public interest case can be made for disclosure. www.businessday.ng

Governor Dapo Abiodun (3rd l) of Ogun State and his entourage, during a visit to communities in Abeokuta ravaged by flooding caused by Saturday’s torrential rain.

Insurers resort to cutting cost, better risk management as recession beckons Modestus Anaesoronye

o withstand economic shocks and possible recession that could hit countries’ economies following Covid-19 pandemic, insurance firms have resorted to cutting cost as well as adopting risk management measures to remain viable. This comes on the heels of analysts’ predictions that the pandemic may result in economic recession that may hit hard on the economy of countries, with Nigeria strongly pointed at. Experts at PwC in its latest report titled ‘Demand and Supply Shocks from Covid-19 to keep Inflation Higher for

Longer,’ estimate that headline inflation will average 12.2 percent in 2020 compared to 11.4 percent in 2019. According to the agency, this is based on expected second wave of the pandemic that could further threaten outlook for global economic growth, coupled with the absence of major shocks to food supply in Nigeria. Since the advent of the pandemic in Nigeria on February 27, 2020, and subsequent lockdown of the economy to contain it, insurers like many other businesses have been struggling to make sales, as consumers’ income witnessed tremendous decline. But what has been a major

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different with other consumables is that insurance in this part of the world is seen as luxury, as most consumers give preference to essential needs before insurance. This, according to industry operators, is expected to impact on companies’ productivity and profitability in the third and last quarters. To contain the impact therefore, insurers are adopting strategies to reduce cost of business acquisition as well as management expenses, while adopting proper underwriting to ensure effective risk management. According to many of them, thiswillnotaffectqualityofserve of claims payment, but proper underwriting will be key. @Businessdayng

Tope Smart, immediate past chairman of the Nigerian Insurers Association (NIA), speaking on the impact of Covid-19 on the industry, states that this will no doubt impact on the operation of member companies. Smart, who is also the group managing director of NEM Insurance plc, says, “My advice to operators is that this is the time to eliminate unreasonable expenses and conserve resources as much as possible in preparation for economic downturn.” Inaddition,theriskmanagement mechanism of each company must be activated in order towithstandtheheadwindsthat may come, Smart notes.

Wednesday 08 July 2020

BUSINESS DAY

News Overwhelmed by COVID-19, Nigerians face... Continued from page 2

their farms. By the time some were able to get critical

inputs, they could only cross their fingers and hope for the best, even though climate, which determines seasons does not reckon much with hope but the right actions at the right time. “As far as agriculture (in Nigeria) is concerned, this is the time for planting in some places and this is already disrupted,” Matthew Omidiji, MD, Premier Seeds Limited, told BusinessDay in April when the lockdown started. “Definitely, there is going to be scarcity of food next year,” he said. Though agriculture was supposed to enjoy some privileges and get exemptions from the restrictions, the situation did not improve satisfactorily in the weeks and months that followed. “Farming by nature has its logistics side, so if inputs cannot get to the end user at the appropriate time, there’s no gainsaying it is going to affect the entire chain,” Tunde Kayode, GM/ group head of Farm Inputs, Elephant Group plc, says. Farmers continued to count losses owing to the pandemic and they now fear it could trigger a food crisis in Africa’s most populous nation by 2021, as production declines. From crops to livestock, farmers are recording significant declines in productivity, which at harvest will reveal serious food shortages in the country. “I had to sell all my broiler birds at half their prices during the lockdown because I could not continue to feed them after four months,” Dayo

Gawati, chief executive, Fdot Farms, states. “Now, my poultry cage is empty and I can’t afford to buy enough day-old chicks because of the revenue loss I suffered earlier from the pandemic,” Gawati says, saying he could only afford to buy 400 day-old chicks which are less than a third of what he had pre-COVID-19. Like Gawati, other farmers hinge the expectation of a food crisis next year on the obstruction of the country’s fragmented farming supply chain, which has led to spike in input prices. “The obstruction in the supply chain owing to the pandemic is responsible for the hike in food prices across the country,” notes Ibrahim Kabriu, national president, All Farmers Association of Nigeria. “If we fail to have bumper harvest this year for most crops, 2021 will be a very tough year for Nigerians because prices are going to escalate further when there is a shortfall in food production”. He notes, “Far mers couldn’t access key inputs during the lockdown when the planting season commenced but the situation has changed.” Nigeria is already approaching the peak period of the rainy season – June through November— when flooding usually submerges and destroys crops. If this happens, food shortages will be further heightened. “There will be a 10 or 12 percent reduction in farm produce this year, and if the coronavirus continues to spread to rural communities the reduction might get to 25 percent,” Ayo-

Lagos needs to invest in three-leg transportation... Continued from page 1

transport system such as

rail, mass buses transit and ferries, will not only improve traffic situation, but also drive job creation and business growth. For them, not only does the state’s increasing gridlock killing productivity and limiting the growth of businesses, it is also causing severe physical and mental stress for the average Lagosian who stays in traffic for an average of 10 hours a day in order to carry out his daily activities. To ease the traffic jam and pressure on Lagos roads, residents would have to make efficient use of its roads and other transport channels. Robin Hutcheson, director of public works, Minneapolis, USA, said the state must have a functional transportation system capable of commuting people with ease. According to Hutcheson, Lagos State is fast becoming a world economy that is growing rapidly. However, to support the growth of its economy, it needs investment but investors would be much

more interested in coming if they see there is an ease for people to get to work. “To ease traffic in a city like Lagos would mean to repurpose space and effectively remove more people per hour and per lane by converting a lot of space to bus-only lane. One single person in a car is not efficient use of space,” she said. Taking a clue from her vast experience in transport management, she said, studies have shown that for every dollar invested in transit, cities get as much as $2.90 in benefits. “To be competitive in the market, cities must invest hugely to achieve a good transport network. With that more jobs will be created,” she said, explaining that in most cases, the business community happens to bear the biggest burden in the form of reduced employees’ productivity and increasing cost. Lagos should make more use of efficient public transportation as opposed to the many private vehicles, which she said, have a higher occupancy rate. She also called for the use of technology in inwww.businessday.ng

Geoffrey Onyeama (r), minister of foreign affairs, and Zhou Pingjian, outgoing Chinese Ambassador to Nigeria, during a virtual farewell meeting with President Muhammadu Buhari, at the council chamber, Presidential Villa in Abuja, yesterday.

deji Balogun, country manager, AFEX Commodities Exchange Limited, predicts. “We need to declare a state of emergency on the cultivation of wet farming and ensure that there is free movement of trucks conveying food on the roads and ports,” Balogun says. An earlier analysis of projectionsbynationalleadersofsome agricultural commodity producers by BusinessDay shows productivity this year could reduce by an average of up to 47.5 percent, as the COVID-19 induced lockdowns restricted farmers from engaging in different production activities. Maize, Wheat, Soybean, Poultry were projected to decline between 30 and 70 percent, even though Rice and Cassava growers claim they do not expect any decline in output, and in fact, possible increments. In all of this, availability of fertiliser has remained an up-

hill task, with prices more than doubled across the country. From N5,500, which should be the cost of a bag of fertiliser on account of the Presidential Fertiliser Initiative, the input now sells for as much as N13,000 when BusinessDay made enquiries in the farming community of Ketu-Epe in Lagos. Indorama, a leading fertiliser producer, was reported to have shut down during the lockdown, owing to operational challenges, a claim the company stated was untrue. Jossy Nkkwocha, Indorama’ spokesman, told BusinessDay the fertilizer plant did not shut down despite the lockdown. According to Nkkwocha, an average of 90 trucks load at Indorama at Eleme every day taking away 54,000 bags of 50kg fertilizers. He said the plant was able and ready to meet all demands but said any decline would be due to drop in demand.

However, Uche Orji, CEO, Nigeria Sovereign Investment Authority (NSIA), which oversees importation of raw materials for fertiliser production in the country, told BusinessDay that Indorama indeed shut down on June 1, and re-opened temporarily on June 15, and only recently started producing again after what he described as a full month of shutdown. BusinessDay gathers that three people died in Indorama, leading to a shutdown of all their factories in the middle of May. This made the company to evacuate almost 350 personnel as they could not work. The deaths in the plant, attributed to COVID-19, necessitated the shutdown, which invariably created some setback in fertiliser production and supply. The shutdown at Indorama, according to Orji, “created a bit of setback” in fertiliser

availability. However, he said more than 6 million bags of fertiliser had already been produced and sold, with a plan for 12 million bags this year, which may now be difficult to achieve as the planting season is already at its peak. “We have run this programme for 3 years and never had any shortage; the shutdown is what has affected the programme so far, especially with what happened at Indorama,” Orji said. “The Indorama thing is the biggest problem, and frankly we need to find a way to solve this problem,” Orji said. The company’s inability to process at capacity (even though it denies this), has severely impacted availability of fertiliser for this year’s planting season, and may now be too late to supply farmers. Unless farmers find a way of multiplying their farm harvests, a food shortage awaits the country in 2021.

creasing the use of waterways transport, vehicle restraint schemes, rail rapid transit, parking restrictions and public transport improvement. “These should include improved connectivity options such as sidewalks, bike lanes, trams, metro, bus, light rails, train, and additional creative options to foster connectivity between buildings, facilities,” she said. Frank Aigbogun, publisher of BusinessDay Newspapers, blamed lack of effective policy at all tiers of government for the traffic menace on Lagos roads. Aigbogun decried threats to lives of commuters on a daily basis and the dwindling employees’ productivity, as they spend as much as 30 hours in traffic every week, a time synonymous to a full monthly work time an average employee spends working in Europe. He however wondered why a city like Lagos, being a major contributor to the Nigeria’s economy, is being ignored for many years by the Federal Government. According to Aigbogun, ‘’Some time ago, I was with the vice president and the minister of finance, and I asked them why a greater

percentage of the revenue contributed by Lagos, being the economic and commercial capital of Nigeria, cannot be used in finding solution to the perennial traffic logjam in Lagos.” For Lagos to come off the traffic menace, government must be serious on revolutionising public mass transit transportation system, focus more on functional water transportation system as a way of utilising the natural resource of a coastal city, he said. “Any serious government must evolve a defined solution and effective implementation of policies and programmes that will guarantee quality of lives to its citizens. He insisted that both the Federal and Lagos State governments must be part of the solution to the traffic quagmire that has bedevilled the city,” he said. As a long-term solution to the problem, Innocent Ogwude, a professor of Transport Management and former vice chancellor, FUTO, Imo State, recommended a good land use planning, which he believed could discourage everybody from commuting

at the same time to one destination. Usually, the island in the city, where most businesses operate, Ogwude said, advising that government should plan its land use in such a way that the outskirts of the town should also be viable and attractive with thriving businesses. “I am of the opinion that lorry (truck) parks should be built on the outskirts of Lagos, from where the lorries should come into the metropolis on call. And they should only ply the roads in the night,” he said. The professor stressed that everybody shouldn’t be going to one particular place like Victoria Island and Apapa for business, noting that the problem of congestion in Apapa could be solved by completing the Lekki Deep-Sea Port and also building another DeepSea Port in Akwa-Ibom State. “Apapa should be relieved if this is done,” he reasoned, adding that urban transportation should be made attractive so that private capital would be invested in that sector. On the things Lagos State has been doing to improve the situation, Fredrick Oladeinde, Lagos State commissioner of transportation, agreed with

the thoughts of the keynote speaker, which believed that a city as populated as Lagos required the United Nations’ Sustainable Urban Mobility Solution. Oladeinde pointed out the fact that Lagos had given a lot in terms of fertilising its mass transit system through investing heavily in mass transit and creating BRT corridors along densely populated areas such as Ikorodu to CMS, Oshodi to Abule-Igba, which would soon be commissioned as well as CMS to Okokomaiko. The population of Lagos State, according to Oladeinde, is over 21 million, and when you talk about urbanisation, there is need to consider the population, which can lead to congestion, if not well managed. “Lagos State has also been investing heavily on water transportation, and building jetties. We initially brought in about 14 boats and we are also encouraging private sector to bring in more boats so that people can use water transport. Lagos is also working on mass transit, which will encourage people to leave their vehicles at home and use mass transit that is safe and secure,” he said.

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Wednesday 08 July 2020

BUSINESS DAY

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Wednesday 08 July 2020

BUSINESS DAY

news

Prestige Assurance to raise N6.8bn in rights issue

restige Assurance is set to raise N6,817,898,003 through the issue of 13,635,796,006 shares at N.50 kobo per share, to meet up regulatory requirements and enhance its business operations. The firm disclosed this at the signing of its proposed Rights Issue on Tuesday. The rights issue is part of Prestige Assurance’s recapitalisation strategy in response to the regulatory directive from the National Insurance Commission (NAICOM) and path towards the implementation of the company’s medium-term strategy. NAICOM has mandated a minimum recapitalisation for general insurance business in Nigeria of N10 billion in admissible Share Capital by September 2021 and with this, the firm has said it intends to prosecute towards becoming a top industry player over the medium term of 5 to 7 years. Speaking at the signing ceremony, chairman of Prestige Assurance, Doyin Salami said: “We are inviting investors to our business and at the very least, we are able to say that not only have we been around for the entirety of Nigeria’s post independent bit, we are also able to say that even in the worst time, this company not only have we weathered it, we have come out

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much stronger.” “As far as Prestige is concerned, the future is very bright. Prestige has already started the process even ahead of planning for the future. The intension over the next 5 to 7 years is to be one of the top 5 insurance companies operating in general insurance business in Nigeria.” Speaking further, the chairman said: “As we open our rights issue, inviting subscription to 13,635,796,006 our intention is to raise additional capital to grow our business. Although regulatory inspired, but we intend to make the best of this inspiration.” He explained that the resources would provide the company with the capital to do a number of things such as development of products that are in tune with the aspirations of Nigerians. Speaking also, Diekola Onaolapo, the CEO of Eczellon Capital, the issuing house, said: “We are pleased to have the signing ceremony after obtaining the requisite approvals from the Securities & Exchange Commission (SEC) and the Nigerian Stock Exchange.” Responding to a question about the recapitalisation prospect, he added: “It is our opinion that the Nigerian insurance industry requires a deepening and we are in agreement with the policy drives of NAICOM.

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Okokomaiko axis of Lagos-Badagry Expressway, Lagos, taken over by flood

Pic by Pius Okeosisi

FG begins implementation of ESP as Osinbajo meets members Tony Ailemen, Abuja

he Federal Government on Tuesday kicked off planned implementation of the Economic Sustainability Plan (ESP). Vice President Yemi Osinbajo on Tuesday hosted a virtual meeting of the Economic Sustainability Implementation Committee to work out details of the implementation, at the Presidential Villa, Abuja. The Plan entitled “Bouncing Back” was recently approved by the Federal Executive Council (FEC) and seeks to address the severe downturn in Nigeria’s oil earnings, due to the coronavirus global pandemic. Vice President Osinbajo, while presenting the report, said

the ESP would take prompt preemptive measures to address Nigeria’s unemployment rate, projected rise to 33.6% or about 39.4 million people by the end of 2020. The National Bureau of Statistics (NBS) had projected that millions of Nigerians will fall into extreme poverty before the pandemic ends, unless urgent action was taken to deal with underlying factors. “GDP may fall to between -4.40% and -8.91%, depending on the length of the lockdown period and strength of our economic response. The ESP is also working to ensure that Nigeria will henceforth “produce what we eat and consume what we produce”. “To create millions of new jobs, we need to focus on encouraging local production, lo-

Reps approves N168.809bn budget for FIRS James Kwen, Abuja

he House of Representatives Tuesday approved N168.809 billion budget for the Federal Inland Revenue Service (FIRS) for the 2020 fiscal year. The approval followed the consideration of the report of the house committee on finance on the 2020 budget of the FIRS by the committee of supply, chaired by the speaker, Femi Gbajabiamila at a plenary. Presenting the report, chairman of the committee on finance, James Faleke asked the house to consider the 2020 budget of FIRS and approve the recommendations therein” (Pursuant to Order Eighteen, Rule 41(2) (h) of the Standing Orders of the House of Representatives). Faleke demanded that a total expenditure of N168,809,476,220 be approved to defray the proposed personnel, overhead and capital expenditure of the Service for 2020. The committee’s report recommended that: “the digitalisation of all processes in the administration of tax in FIRS should be undertaken so as to catch up with rapidly increasing economic activities most often carried out on-line without physical presence.

“FIRS (Establishment) Act and other tax laws be amended to make it possible for FIRS to modernise its operations with relevant technology”. The report further prayed the house to accept the need for the Service to have an Intervention Fund and recommended an approval of one-off Special Purpose Fund to the tune of N100 billion. According to it: “This fund will expressly assist the FIRS fund its immediate but pressing needs such as completion of the FIRS head office building complex within twelve months, six training schools, 30 prototype tax operations offices, purpose-built facilities for efficient taxation of the upstream petroleum industry and ICT infrastructure to identify and track digital transactions”. Meanwhile, the Executive Chairman of FIRS, Mohammed Nami said the agency has projected N70 billion as revenue from stamp duty collections in 2020. Nami, who disclosed this during a budget defence session with the House of Representatives committee on finance, said the Service has introduced a new tax called flagship tax through which taxes are collected, adding that stamp duties would boost its revenue profile.

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cal services, local innovation, and emphasise the use of local materials. The ESP is also exploring ways to encourage Nigerians to produce locally made food, build houses and construct roads, using local materials in all cases. “If we must import, it must be to support local production.” The Federal Government programme will encourage mass agricultural programme expected to bring between 20,000 and 100,000 hectares of new farmland under cultivation in every state of the federation, and create millions of direct and indirect job opportunities. Others include extensive Public Works and Road Construction Programme focusing on both major and rural roads, and using locally available materials like

limestone, cement and granite. It is also working on a mass Housing Programme to deliver up to 300,000 homes annually, engaging young professionals and artisans who form themselves into small and medium scale businesses within the construction industry, using indigenous labour and materials. Installation of Solar Home System, targeting 5 million households, serving about 25 million individual Nigerians who are currently not connected to the National Grid. The ESP is also working on support for local production and manufacturing of all that is possible, including tech apps, software, shoes, garments, steel fabrication, ceramics and furniture, with the required capital and essential machinery, Osinbajo said.

Senate okays 14-yr jail term as it passes sexual harassment bill Solomon Ayado, Abuja

he Senate on Tuesday passed a bill to prohibit sexual harassment of students in educational institutions, pegging the jail term at 14 years or minimum of five years without an option of fine for any educator found guilty of sexual offences in tertiary institutions. The bill, when finally granted assent by President Muhammadu Buhari will penalise the impropriety of the act, with or without consent. Tagged “A Bill for an Act to Prevent, Prohibit and Redress Sexual Harassment of Students in Tertiary Educational Institutions and for other matters connected therewith 2019,” with 27 clauses, it is sponsored by the deputy Senate president, Ovie Omo-Agege. The bill defines sexual offences as including sexual intercourse with a student or demands for sex from a student or a prospective student or intimidating or creating a hostile or offensive environment for the student by soliciting for sex or making sexual advances. Other forms of sexual harassment identified in the bill @Businessdayng

are grabbing, hugging, kissing, rubbing, stroking, touching, pinching the breasts or hair or lips or hips or buttocks or any other sensual part of the body of a student; or sending by hand or courier or electronic or any other means naked or sexually explicit pictures or videos or sex related objects to a student, and whistling or winking at a student or screaming, exclaiming, joking or making sexually complimentary or uncomplimentary remarks about a student’s physique or stalking a student. Omo-Agege explained that “the most effective way to deal with the offence of sexual harassment in our tertiary institutions is to penalise the very impropriety of the act, with or without consent.” According to him, sexual harassment must be defined in tertiary educational institutions as statutory rape with strict liability for offenders to be prosecuted easily. On the extension of the bill to primary, secondary schools, worship centres and work place, Omo-Agege said doing so will not be necessary because the Criminal and Penal codes already adequately deals with these categories with sufficient clarity.

Wednesday 08 July 2020

BUSINESS DAY

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CBN’s official FX rate at N381 will curb FG, Lagos appeal to motorists round tripping - analysts over 3rd Mainland Bridge …announce traffic diversions

...forex turnover rises by 918.42% Hope Moses-Ashike

he Central Bank of Nigeria (CBN) on Tuesday adjusted the exchange rate at the official window by 5.54 percent to N381 per dollar from N361/$, a move seen as helping to curb round tripping. With the new rate, the CBN has unified the exchange rate as the foreign exchange spot and forward shows that dollar was quoted at N380.69k at the Secondary Market Intervention Sales (SMIS) – a window where importers access foreign currencies. At the Investors and Exporters (I&E) forex window, Naira was stable as the dollar was quoted at N386. 50k, data from FMDQ indicated. Ayodeji Ebo, managing director, Afrinvest Securities Limited said this is a positive move by the CBN. The convergence of the rates across the various FX segments will curb round tripping and improve investor confidence.

The final lap, he said, was the improvement in liquidity at the I&E window to complement the CBN’s efforts towards a stable naira. “We need the CBN to also intervene in the I&E window and reduce the backlogs. We expect the black market to appreciate in the near term converging towards the N400/$1 psychological level as CBN improves on the supply of the greenback,” Ebo said. Godwin Emefiele, the CBN governor had told some foreign investors that the desire of the apex bank was to achieve exchange rate unification around the Nigerian Autonomous Foreign Exchange Market (NAFEX)/ I&E rate. The I&E forex market is Nigeria’s dominant market for the purchase and sale of forex and it is a free market where everybody is free to sell their dollars and those who want to buy are free to buy dollars. Earlier in the morning of Tuesday, the market opened with an indicative rate of

N387.18k, representing a marginal depreciation of N0.18k when compared with N387.00k opened with on Monday, data from FMDQ revealed. The foreign exchange daily turnover rose significantly by 918.42 percent to $103.37 million on Tuesday from $10.15 million recorded on Monday at I&E window. Uche Uwaleke, a professor of finance and capital markets, Nasarawa State University Keffi, said any further adjusting of the official exchange rate by the CBN to align with the rate in the Autonomous Foreign Exchange Market has both merits and demerits. On the upside, it translates to increased naira inflows into the Federation Account implying that the three tiers of government will have more money to distribute. Also, it eliminates opportunities for currency round tripping and sharp practices associated with having multiple exchange rates thereby promoting transparency in the country’s forex market.

JOSHUA BASSEY

he Federal and Lagos State G overnments have appealed to motorists and residents of Lagos to cooperate with appropriate agencies during the six-month partial closure of the Third Mainland Bridge for maintenance works, which is expected to commence on July 24. Speaking during a press conference jointly addressed by the federal controller of works in Lagos, Olukayode Popoola; Lagos State commissioner for transportation, Frederic Oladeinde and the special adviser to Lagos State governor on works, Aramide Adeyoye, on Tuesday, they assured Lagosians that necessary measures would be put in place to reduce gridlocks during partial closure of the bridge. Popoola said there would be diversion of traffic in two phases during the partial closure of the bridge between Friday July 24, 2020 and Janu-

ary 24, 2021. Popoola said the phase one of the diversion, which will last for three months for repairs of the Oworonsoki bound lane of the bridge, would be from 12:00am to 1:00pm from Oworonshoki to Lagos Island on the Lagos Island bound lane, while the afternoon traffic from 1:00pm to 12:00am would be from Lagos Island to Oworonsoki on the Lagos Island bound lane. He said the phase two of the diversion, which would last also for three months for repairs of the Lagos Island bound lane of the bridge, would be for morning traffic from 12:00am to 1:00pm from Oworonsoki to Lagos Island on the Oworonsoki bound lane, while the afternoon traffic from 1:00pm to 12:00am would be from Lagos Island to Oworonsoki on the Oworonsoki bound lane. Speaking on the inconveniences the maintenance of the bridge might cause motorists, the federal controller of works,

said the Federal and Lagos State Governments would work with appropriate agencies to direct traffic flow in the affected areas and alternative routes. “Motorists are advised to also ply these alternative routes: First, from Carter Bridge through Iddo through Oyingbo to join Adekunle ramp inward Oworonsoki. Secondly, from Ijora Olopa through Western Avenue to Ikorodu Road.” Lagos commissioner for transportation, Oladeinde said priority would be given to those driving from Mainland to the Island in morning and afternoon to use the Third Mainland while those driving against traffic will use the alternative routes. Oladeinde assured motorists that the Lagos State Traffic Management Authority (LASTMA) would work with Federal Road Safety Corps (FRSC) in all the alternative routes to ensure that motorists have a smooth journey during the partial closure of the bridge.

WAEC set August 3rd as date for 2020 WASSCE Kelechi Ewuzie

he West African Examinations Council (WAEC) has announced August 3 to September 5 for the conduct of the much-awaited West African Senior Secondary Certificate Examination for School Candidates, 2020. Patrick E. Areghan, head of Nigeria National Office of WAEC stated this at a press conference in Lagos Tuesday. Areghan announced that a total of 1,549,463 candidates have registered for the diet from 19,129 schools out of which 786,421 are males and 763,042 are females. The WASSCE examination was earlier scheduled to take place between April 6 and June 5, 2020, but had to be postponed due to the outbreak of the COVID-19 pandemic. Areghan said the council has introduced a novel arrangement for this year’s examination as it would be held from Monday through Saturday, in order to achieve the five-week span. He further noted that the choice of the period (August 3 to September 5) was not arbitrarily set, adding

that WAEC consulted extensively with the governments of all the five member countries before arriving at the period. According to him, in deference to the Federal Government of Nigeria, the five-week arrangement was arrived at in order to make room for the other examining bodies to equally conduct their examinations in good time. The shortening of the period is also of advantage in terms of reducing the period of mass social interaction with its attendant consequences. He further stated that in conducting the examination, the council has taken due cognizance of the various measures/protocols rolled out by the federal and state governments of Nigeria, aimed at checking the spread of Covid-19. “We have encapsulated all these measures in a pamphlet which will be circulated to all stakeholders for their necessary guidance. For the sake of emphasis, schools must provide wash-hand buckets with running water, soaps, hand sanitizers and thermometer hand-gun to check the temperature of all concerned,” he said.

Buhari asks Senate to confirm 11 judges for FCT High Court, others Solomon Ayado, Abuja

he Senate on Tuesday received a request from President Muhammadu Buhari for the confirmation of 11 nominees as judges of the Federal High Court of the Federal Capital Territory (FCT). Buhari’s request was contained in a letter which was read during plenary by the Senate president, Ahmad Lawan. Buahri explained that his request was in accordance with Section 256(2) of the 1999 constitution. The judges include Abubakar Husseini Musa, (Adamawa State); Edward Okpe, (Benue State); Babashani Abubakar, (Borno State); Emuesiri Fran-

cis, (Delta State); Jude Ogho, (Delta State); Josephine Enobi, (Edo State); Christopher Opeyemi Oba, (Ekiti State); Mohammed Idris, (Kano State); Hassan Maryam Aliyu, (Kebbi State); Fashola Akeem Adebowale, (Lagos State); and Hamza Muazu, (Niger State). However, the Senate minority whip, Philip Aduda, while relying on Order 43 of the Senate Standing Rules, objected to the absence of a nominee from the FCT. But chairman of Senate committee on judiciary, human rights and legal matters, Opeyemi Bamidele, explained to the contrary that the FCT already has judges on the bench of the FCT High Court. www.businessday.ng

L-R: Olamilekan Adegbite, minister, Ministry of Mines and Steel Development, Sumaila Akaba, managing director, Ajakuta Steel Company; Abba Bello, managing director, Mustapha Usman, legal adviser to NEXIM Bank and, Abney Shall-Holma, chairperson of Sealink Implementation Committee during the signing of Memorandum of Understanding with NEXIM Consortium and Ministry of Mines and Steel Development, in Abuja, yesterday.

Orange explores M & A as it plans entry into Nigeria FRANK ELEANYA

range, the largest telecommunication operator in France, is exploring different entry options into the Nigerian market, particularly merger and acquisition, BusinessDay can report. The company had in June said it was considering entering the Nigerian and South African telecommunication sectors as a player and would give itself a few months to make a possible move. “It could make sense to be in economies such as Nigeria and South Africa. If one considers there are things to do, the time frame I’m considering is rather a few months than a few years,” Stephane Richard, CEO of the company had said. The plan aligns with its Engage 2025 plan which is a

multi-service strategy aimed at diversifying its operation to represent 20 percent of the business at the end of 2025. Among its ambitions is to make Orange the reference digital operator in Africa and the Middle East by 2025. “Regarding Nigeria, Orange is open to opportunities in some of the big African markets where we do not have any retail presence yet. However, please note that there is no specific project on the table currently. For your reference, I would remind you that we are a contender for the upcoming tender in Ethiopia,” an Orange spokesperson told BusinessDay via email. Orange has been investing $1.1 billion yearly in the Middle East and Africa region as part of its Engage Plan programme. Orange’s interest in Nigeria

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has been an open secret since 2017 when it tried to get into the market by acquiring Etisalat Nigeria. When Etisalat Nigeria was struggling financially in 2017, Orange was reportedly in negotiations to pick up a 65 percent stake in the company. Although it later withdrew from the deal when it became obvious another company, Teleology, was the favorite for the 9Mobile deal, Orange has since established some foothold in the country. Olusola Teniola, president of Association of Telecommunications Companies of Nigeria (ATCON), told BusinessDay that Orange has already established mutually beneficial relationship with two members of his association. ATCON has about 107 members. Orange’s entry strategy into the Nigerian telecom sector @Businessdayng

would likely be from its established network which is also similar to its strategies for other markets it operates in Africa. As of 2019, Orange had a presence in 18 countries in Africa and the Middle East where it had 125 million customers on 30 October. With sales revenue of €5.2 billion in 2018, this area is a strategic priority for the group. Orange Money, its mobile-based money transfer and financial services offer is available in 17 countries and has 45 million customers. “The current strategy for Orange in the Francophone countries, as well as potentially expanding to Francophone and Anglophone countries, ensures that we anticipate offerings seeking either a merger and acquisition approach into our market,” Teniola told BusinessDay.

Wednesday 08 July 2020

BUSINESS DAY

news

Alleged N700m fraud: Ize-Iyamu’s ill health stalls trial Idris Umar Momoh & Churchill Okoro, Benin

ustice Mohammed Garba Umar, of the Federal High Court sitting in Benin, on Tuesday, adjourned the alleged N700 million fraud against Edo State All Progressives Congress (APC) candidate, Osagie Ize-Iyamu and four others, till July 14. Other persons being tried by the Economic Financial Crimes Commission (EFCC), are former Edo State PeoplesDemocraticParty(PDP)chairman, Dan Orbih; the state chairman of the party, Tony Aziegbemi; former deputy governor of Edo State, Lucky Imasuen, and one Efe Erimuoghae Anthony. Thepresidingjudgeadjournedthe case to Tuesday, July 14, following the APCgovernorshipcandidate’sabsence in court due to ill health. Others were, however, present in court. Justice Umar ordered Ize-iyamu to appear in court unfailingly in the next adjourned date. The accused are facing a eight-

count charge bordering on illegal receipt of public funds to the tune of N700millionforthepurposeofthe2015 general election. The anti-graft agency in suit No FHC/BE21C/ 2016 further accused the defendants of conspiring among themselves to commit the offence in March, 2015, alleging that they took possession and control of the funds without any contract award. ThecourthadonJune18,2020validated the corruption charges against the defendants, and adjourned the case to July 02, 2020 for further hearing. Speaking to newsmen after the court sitting, counsel to the first defendant, Charles Edosomwan, said Ize-Iyamu couldn’t make it to court because he is indisposed and had to present a medical report attesting to it. Edosomwan noted that there are pending motions challenging the jurisdiction of the court. He said Osagie Ize-Iyamu has always been in court and had never missed a court date till today. He added that the law provides for his protection as far he is willing to face his trial.

Africa economy to shrink by 1.7% as COVID-19 bites harder, says AfDB Onyinye Nwachukwu & Cynthia Egboboh, Abuja

frica Development Bank (AfDB) has projected a contraction of Africa GDP by 1.7 percent in 2020, dropping from 5.6 percent from January 2020 pre Covid-19 projection. AfDB said the 1.7% contraction is a baseline scenario, but in the worst-case, GDP could fall to –3.4 percent by the end of the year. The bank, however, sees a partial recovery of about 3 percent for the region in 2021. The AfDB in its Revised Africa Economic Outlook (AEO) noted that while the continent remains the least affected continent with over 400,000 reported cases of Covid-19 and 10,000 deaths as of June 2020, Nigeria, Egypt,

South Africa, and Algeria remain hotspots for the virus. Hanan Morsy, director, ECMR, AfDB, presenting the outlook on Tuesday during a virtual conference, said that Covid-19 has necessitated the bank’s reassessment and review of growth projections from what it outlined earlier in January. “We are now talking about Africa being in recession, the first in many decades. The curve of the pandemic is bending gradually in Africa, but hotspots are present in South Africa, Egypt, Nigeria, and Algeria,” said Morsy. According to her, inflation has quickly increased in the continent because of supply chain disruptions—up to 5 percent more in some countries. Exchange rates have equally fluctuated widely, especially for frontier economies as a result of

capital outflows. Oil exporting countries in the region will face dire consequences on low prices, while East Africa’s economy may not be badly affected on account of diversification which they had embarked on, pre-Covid, she explained. According her, if the virus continues beyond the first half of 2020, there would be a deeper GDP contraction in 2020 of 3.4 percent, down by 7.3 percentage points from the growth projected before the outbreak of Covid–19. Extreme poverty is projected to increase by 2.14-2.84 percent in 2020 and by 2.51-3.63 percent in 2021, while Covid 19 could push 49 million people on the continent into extreme poverty. The AfDB thinks that the reopening of the economy could be done in an incremental man-

ner considering transmission risks, by allowing businesses with low-to-medium transmission risks such as manufacturing, construction, and retail services to commence operation first. The bank specifically recommended two strategies for reopening economies and accelerating recovery. These include: “zero tolerance” approach which means “governments would refrain from reopening economic and social activity until there are zero or no reported new cases of the infection. This is likely to take longer and have unbearable costs. “The “staggered” approach means that governments would reopen economic and social activity in a phased and incremental manner on the basis of transmission risks.

COVID-19: Bayelsa distributes another round of palliatives CALEB OJEWALE

ayelsa State government has begun the distribution of food items as part of the palliatives to cushion the effects of the coronavirus pandemic in the state. The items being distributed, the third round of palliatives by the state government, include rice, garri, beans, sugar, salt, spaghetti and noodles. The governor’s acting chief press secretary, Daniel Alabrah, disclosed that upon the directive of Governor Douye Diri, the items are being distributed to the eight local government areas across the state. The items were received from the Niger Delta Development Commission (NDDC), the Goodluck Jonathan Foundation, Dangote Group and Multi-Pro Limited

among other corporate organisations and individuals. Giving a breakdown of the donations and the distribution during an enlarged meeting of the state’s COVID-19 Task Force at Government House, Yenagoa, the Secretary to the State Government, Konbowei Benson, said the Goodluck Jonathan Foundation donated 1,000 bags of 5kg rice and beans each, NDDC 870 bags of 50kg rice, 2,112 bags of beans, 2,934 cartons of noodles and 60 bags of garri. Dangote Group donated 3,000 10kg bags of rice, 1,920 packs of sugar, 976 bags of salt and 6,008 cartons of noodles while Multi-Pro presented 24,709 cartons of noodles. Benson said the Brass Local Government Area was allotted 2,400 cartons of noodles, 1,600 bags of 10kg rice, 1,600 bags each of sugar and garri, 1,600 cartons of spaghetti and 90 bags of salt.

Unicaf Nigeria essay competition winners announced

nicaf Nigeria wishes to thank the over five hundred Bachelor degree holders, who took part in the essay competition ‘Is online learning the future of education?’ to win scholarships and cash. The judging committee expressed satisfaction with the high overall standard of the essays submitted and selected the three top winners, who received their prizes at an awards ceremony held online, on Friday, July 3, 2020, via the Zoom app, because of the measures to contain the Covid19 disease. The awards ceremony brought together the three winners, members of the Unicaf Nigeria team, and members of the Unicaf International Marketing team at the organisation’s HQ in Cyprus. The first winner, Chinelo Dike-Okonkwo, was awarded a full scholarship for a Master’s degree of her choice with

Unicaf University through online delivery, plus $300 in cash. Chinelo thanked Unicaf and Unicaf University for this great opportunity to earn a Master’s degree online at no cost and without having to give up work, or move away from home. She added: ‘Unicaf’s goal for educating youths in underserved markets has always struck me as a noble initiative. Now, under Unicaf’s guidance, I am privileged to be a part of a growing number of beneficiaries, who can study for high quality degrees without the financial burden of high fees, that typically comes with such studies. I would like to tell every person out there, longing to further their educational pursuits, in a bid to accelerate their careers, to keep the faith, without being deterred by challenges and to remain true to themselves and their goals.’ www.businessday.ng

Vice President Yemi Osinbajo virtually chairs the Economic Sustainability Committee meeting where details of implementation were worked out following the approval of the plan, in Abuja yesterday.

Kano to spend N2.3bn on construction of access road to Dala Inland Port Adeola Ajakaiye, in Kano

ano State government has approved N2.3 billion for the construction of access road to the Dala Inland Dry Port; one of the projects being developed at the Federal Government’s designated Special Economic Zone, in Kano. The planned network of roads will connect businesses at the economic zone, to warehouses, as well as transportation and logistics facilities being built at the port. Mohammed Garba, the state commissioner for information, who confirmed the investment in the economic zone at a news briefing on Tuesday, stated that the approved sum was part of the several other ones, discussed and agreed to, at the last executive council meeting to boost the require infrastructure that would aid economic development in the state.

Also, a source at the Dala Inland Dry Port, who does not want his name printed, told BusinessDay that the investment would go a long way in fast-tracking the completion of the project. According to the source, the inability to access the economic zone is hampering the smooth full take off of the port which was conceived during the second tenure of President Olusegun Obasanjo, about 18 years ago. “We are indeed grateful to the Kano State for the money earmarked for the provision of access road to the Special Economic Zone, which is situated on a vast land in Zawachiki where Dala Inland Dry Port is located. “The port was conceived to serve the numerous new businesses that are going to sprout out in the economic zone. So I will like to commend the government for this kind gesture,” said the source.

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Again, Wadume’s trial stalled Felix Omohomhion, Abuja

n a space of one week, the absence of Justice Binta Nyako of a Federal High Court, Abuja on Tuesday stalled the trial of the Taraba State’s kidnap kingpin, Hamisu Bala, otherwise known as Wadume, and his codefendants. Wadume and his co-defendants are standing trial on charges bordering on terrorism and kidnapping brought against them by the Federal Government. Last week, the court had adjourned the matter till Tuesday, July 7, for continuation of trial because the judge didn’t sit. Lawyers and the defendants arrived the court for commencement of trial on Tuesday, but were informed that the case would not go ahead due to the absence of the judge. They, however, took a new date of July 13, 2020. Justice Nyako in an earlier proceeding had denied the defendants bail while delivering ruling in their bail application because she “saw no reason to @Businessdayng

grant them bail.” She ordered accelerated trial which would necessitate weekly sessions. Wadume and his co-defendants are standing trial on a 13-count amended criminal charge bordering on terrorism, kidnappingandcollectionofN106 million ransom, among others. Other defendants include a police inspector, Aliyu Dadje, Auwalu bala, Uba Bala, Bashir Wazlri, Zubairu Abdullahi, and Rayyanu Abdul. They pleaded not guilty to all the charges read to them and their lawyers accordingly moved their bail applications, which Justice Nyako declined to grant. The judge however ordered that the defendants be moved from the custody of the Special Anti-Robbery Squad (SARS) of the police to the Kuje Correctional Centre, in Abuja. She also ordered that the authorities of the Correctional Centre should allow the defendants access to medical facility and their lawyers while in their custody.

Wednesday 08 July 2020

BUSINESS DAY

POLITICS & POLICY Edo guber: Now that the campaign has begun Iniobong Iwok

ith few weeks to the September 19 off-season gubernatorial election in Edo State, the Independent National Electoral Commission (INEC) has announced the lifting of ban on campaigns for the election, giving candidates the permission to sell their programmes to the electorate. INEC had last week published the provisional list of the governorship candidates, from 14 political parties, which had 13 males and one female. Meanwhile, the gubernatorial election is expected to be a two-horse battle between incumbent Governor Godwin Obaseki who recently defected to the main opposition, the People’s Democratic Party (PDP) to clinch the party’s ticket, and the candidate of the ruling All Progressives Congress (APC), Osagie Andrew Ize-Iyamu. Judging from events in Edo State in recent years, the rivalry between Governor Obaseki and his presumed political godfather, Adams

Osagie Ize-Iyamu

Oshiomhole, who recently lost his position as the national chairman of the APC, one can say that the election would be fiercely contested. It is believed that Oshiomhole facilitated Obaseki’s emergence as his successor against all odds; however, their relationship broke down just shortly after Obaseki assumed office, and both have become irreconcilable despite several peace moves. Observers believe that Os-

Godwin Obaseki

hiomhole influenced Obaseki’s disqualification by the party’s governorship primary screening panel, while giving his backing for Ize-Iyamu to clinch the party’s ticket. However, considering the bruises Oshiomhole has suffered in recent times, political observers believe that he would be out with full force to prove a point to Obaseki and the PDP that he is still a force to reckon with in the state.

Akeredolu didn’t win 2016 governorship election, APC rigged poll results against PDP’s Jegede - Ex-SSG KORETIMI AKINTUNDE, Akure

ess than 12 hours to the sudden resignation of embattled Secretary to Rotimi Akeredolu-led Ondo State Government, Ifedayo Abegunde, popularly known as Abena, the immediate past Secretary to the State Government on Monday revealed how the ruling All Progressives Congress (APC) and Governor Rotimi Akeredolu rigged 2016 governorship election against the will of the Ondo State electorate using the federal might. Abegunde, who featured on a live radio programme on Crest 87.7 FM in Akure, Ondo State capital few hours after his sudden resignation, declared that he decided to resign his position as Governor Akeredolu’ All Progressives Congress (APC) in Ondo State is fast losing popularity and people’s acceptance due to the governor’s highhandedness, selfishness and dictatorial behaviour which have brought the state backward. “Akeredolu didn’t win the election in 2016 but we made it possible for him to become governor. We were the pillars

behind him and we will not support him again. He will lose this time around. “The government of Akeredolu is making the entire people of the state to suffer and I cannot be part of that any longer. Everyone is suffering. He doesn’t pay salaries at the right time. As a matter of fact, Akeredolu has not performed to the expectations of the masses apart from the roads he is building,” he said. According to the former SSG, “Akeredolu has turned former Governor Olusegun Mimiko to a saint with his own abysmal performance. We now see that Mimiko did well as governor because he gave his people enough funds to enable them cater for the needs of their own supporters. I had worked with three governors, and I can say that in the history of Ondo State, Akeredolu is the worst governor. “Akeredolu has reduced the government to the property of his wife, son and inlaws from Imo State. All the contracts in the state are being given to his wife, son and the people from Imo state”. Speaking on how he was maltreated in Akeredolu’s cabinet which prompted the reason behind his resignawww.businessday.ng

tion, Abegunde said the hardship was too much as he was unable to cater for the needs of all his followers because the governor didn’t release any money or grants for his office. Reacting to the allegation of N5 million which Governor Akeredolu reportedly said he was giving him as office grants monthly, Abegunde said the governor was only telling lies, challenging the governor to come forward with an evidence regarding that. “I was suffering in his administration because he didn’t release any fund for my office grants. He has been telling lies that he was giving me N5 million every month even when he knew he didn’t give me such money. “Where on earth did the governor give me such funds? Recently, I reported him to Governor Kayode Fayemi of Ekiti State and he promised to invite both of us to Abuja for settlement. I remember that I told Fayemi that I was going to spit on the face of Akeredolu if he repeated the lie that he was giving me N5million monthly, and I would then return to Akure to resign and as well inform the public of his looting sprees,” he said.

But one area that has remained a source of concern to Nigerians is the manner political campaigns are carried out in Nigeria. Often time, political parties and politicians fail to focus on issues. Instead of concentrating efforts to highlight how they would solve the myriad of problems confronting the people, emphasis is always on name-calling and character assassination.

The problem has been fuelled over the years by the do-or-die politics being practised in Nigeria and has led to political rascality which has further affected the credibility of the nation’s electoral system. Perhaps, the Kano State Governor, Abdullahi Umar Ganduje, and the head of the APC campaign committee in the Edo election, may have fired the first shot on Monday when he said the ruling party would win the election by every means possible, threatening that they would isolate the Rivers State Governor, Nyesom Wike, who is the head of the PDP campaign committee in Edo State. “We know the opposition is planning to rig the election; we know their tactics, we know their methodology and we shall dismantle all their tactics to ensure that we win this election,” Ganduje said. “We know PDP made Wike their chairman, I assure you, we will isolate Wike in an isolation centre and before he recovers, the election is over,” he further said. Political analysts say part of the problem could be blamed on the lack of ideology by present crop of politi-

cal parties and politicians. “It is an old problem we have, our campaigns are not based on issues, and that is partly because our parties don’t have programmes and ideology; you cannot differentiate them from each other; so, what would they tell the people? “They engaged in personality attacks, we heard what Ganduje said on Monday, but people may interpret it in different meanings and ways. “I would be happy if the candidates can focus on issues facing the people rather than attacks, but I would not be disappointed if the same scenarios repeat itself in Edo, Sylvester Odion Akhaine, a professor of political science from the Lagos State University (LASU), said. Akhaine, however, advocated for a new orientation among politicians in Nigeria, and a change in the nation’s political institutions. “I have always said in my writings that the present crop of African leaders are not making sense, they are not learning, we need to go back and teach them, we need new ideas, institutions on how to transform the society,” he added.

Oyegbola joins Abeokuta north LG chairmanship race, promises infrastructure upgrade Iniobong Iwok

s t h e u p c o m i ng Ogun State Local Government election continues to gather momentum, Lanre Oyegbola has announced his candidacy, promising to bring real transformation and development to the constituency if elected into office. Oyegbola an erudite marketing communications practitioner is contesting on the platform of the ruling All Progressives congress (APC) where he is a registered member of Ward 1 in the local council area. In a statement to journalists Monday and personally signed by him, Oyegbola said that the cardinal programmes of his administration will include upgrade of existing infrastructure and provision of additional ones, qualitative education, excellent healthcare, economic growth and job creation, improved security, and better welfare for the people of the local government area. He said that the local council requires purposeful leader with entrepreneurial background to catapult it

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to becoming the most outstanding in the entire state, stressing that it can only be achieved with the support of the people and by harnessing the potentials. According to him, “Abeokuta North Local Government needs a visionary servantleader who will represent the aspirations of the people and communities; someone who puts people before politics; with a clear vision for the future of the local government and its people, a man who brings real life experiences from business and community roles. “I personify these aspirations and positive changes that the people are yearning for; and this is why I am offering myself as a servant of my people”. Oyegbola further assured the people of the council that he would be available to listen to their concerns, explore innovative solutions and seek opportunities to deliver optimal democratic gains at all times. He stressed that if voted into office he would work for the progress, prosperity and overall development of the people and communities. “I commit to promoting the good of our people through @Businessdayng

real transformation in our wards, towns and villages. I pledge to preserve the dignity of every Abeokuta North LGA native. I promise to make the people a priority and the focus of my administration,” he added. The APC chieftain further emphasised that he would leverage his private sector experience to attract investments to the local government area. This will create jobs, thereby stemming unemployment, especially amongst the youth. Oyegbola asides attending prestigious institutions and working in reputable organisations, has built a distinguished career in marketing communications, spanning corporate strategy, business development, advertising and media. He was the DG of Fela Durotoye’s presidential campaign team in 2019 and has a passion for mentoring young entrepreneurs. He served as executive director at Verdant Zeal Group, a leading marketing communications company in Lagos, before setting up Boomerang Havas Africa. He holds a MSc. in Marketing from the University of Liverpool, United Kingdom.

Wednesday 08 July 2020

Harvard Business Review

BUSINESS DAY

MANAGEMENTDIGEST

True friends at work ALISON BEARD THE CASE FOR MAKING DEEPER CONNECTIONS WITH COLLEAGUES. ed Byrd was my first work best friend. When I joined the Free Lance-Star newspaper as a cub reporter, we immediately bonded. We’d attended the same university (albeit a decade apart); we both liked to run in the mornings and drink wine on Friday nights. More important, we enjoyed working together. We shared ideas, advice, annoyances and jokes. He made my professional — and personal — life better. Since then I’ve developed other deep friendships through work. At the Financial Times, I met Rebecca Knight, who 20 years later feels like a sister, and David Baker, who was the first nonfamily member to see an ultrasound of my son and who last year entertained him, then age 11, with magic tricks. At HBR, I have Dan McGinn, Scott Berinato and Amy Gallo — people who know me, my work and my life extremely well. I’m one of the lucky ones. As a trio of 2020 books show, work friendships yield many benefits. In “Social Chemistry,” Yale professor Marissa King explains that your social connections are a strong predictor of your cognitive functioning, resilience and engagement. She cites studies showing that teams of friends perform better; that people with supportive co-workers have more work-life balance and are less stressed; that strong personal ties increase information- and idea-sharing, self-confidence and learning; and that those who have close friends at work are more efficient in and satisfied with their jobs. She points to research by Tom Rath suggesting that if one of your colleagues is a “best” friend, you’re seven times more engaged at work than the average person. In “Together” the former U.S. surgeon general Vivek Murthy calls friendship fundamental to successful professional relationships, adding, “It’s in our relationships that we find the emotional sustenance and power we need to thrive.” And in “Friendship,” an exploration of the “evolution, biology … and power” of these bonds,

the sociologist Lydia Denworth writes that they give us purpose, meaning and a more positive outlook. The mere presence of a friend can make it easier to tackle challenges, she explains, and our blood pressure and immune cells are significantly affected by how much we like the people we spend our time with. (I’d add that, recent social distancing notwithstanding, most employed adults do spend more hours, virtually if not in person, with co-workers than with family or nonwork friends.) Think, too, of all the famous BFFs who have teamed up to achieve greater success, by launching companies (Jobs and Wozniak), decoding our psyches (Kahneman and Tversky), dominating sports (LeBron and Wade), excelling creatively (Elton and Bernie) and supporting one another’s careers (Oprah and Gayle). It’s clear that work friendships are worthwhile. However, not everyone has them. King writes that in 1985 nearly half of Americans had a “close” pal at the office, but by 2004 only 30% did. And the percentage of people who say they care about having friends at work drops from 54% among baby boomers to 41% among millennials. She adds that most adults spend less than 40 minutes a day socializing, 10% less than they did a decade ago. www.businessday.ng

The problem, of course, is our limited time and energy. Denworth says it best: “The thirties … are … described as the decade where friendship [gets] killed off by marriage, children, jobs, relocating.” We get super busy and “don’t prioritize friends.” Still, given the hours and interests we share with colleagues, work should be an easy place to build these relationships. Murthy notes that it’s already where we develop “middle and outer circle friendships.” So why not try to find “intimate confidants” there too? According to all three authors, that takes intentional effort. King: “In each moment we have the choice of whether and to what extent to connect with the person before us.” Denworth: “You must … put time and attention into building quality relationships.” Murthy: “Creating a connected life begins with the decisions we make in our day-to-day lives.” Want more specific advice on how to develop deep friendships at work? First, be patient. As Denworth points out, people generally need 80 to 100 hours together before they can call one another a friend and more than 200 hours before they would deem themselves “best” friends. There are ways to speed that process, however. Proxim-

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ity helps. King notes that “the probability of two people communicating is inversely proportional to the physical distance between them.” One survey of cadets showed that seating assignments were a stronger predictor of friendships than religion and hobbies. Another study showed that half of employee interactions (both electronic and face-to-face) were between people sitting next to each other, while the rest were between coworkers in the same row or on the same floor. Of course, few of us pick our workstations. But most of us can vary our routines to interact with colleagues in whom we see a possibility for greater connection. Another strategy is to look for commonalities with your workmates. Denworth reminds us of Aristotle’s words “A friend is another self.” But be sure to think broadly. Don’t just consider people of your same age and background or in your department. Seek out others who share your passions, hobbies and worldviews. There’s something even more key than proximity and similarity, though: reciprocity. True friends support one another, generating mutual positive feelings and personal growth. As Murthy writes, “Friends show that they care about each other.” King, who studies networking behavior and categorizes peo@Businessdayng

ple into three types — conveners, brokers and expansionists — has some of the best advice on this front. She explains that self-disclosure and working to understand others’ perspectives strengthen convening — or tightly knit — relationships. She adds that both asking for help and becoming a better listener and more thoughtful questioner will enhance trust. Denworth agrees: “The best friendships invite vulnerability.” Two summers ago, I got the awful — and surprising — news that my friend Ted had passed away. I was at the office when I opened the email. I was in shock. A few minutes later, Dan arrived at his desk, which for the past 10 years has been next to mine, and asked, as he always does, “How are you doing?” I burst into tears. “My friend — my you when I was at my first job — just died,” I blubbered. “He was my you,” I explained again, unsure that I was making sense. But Dan understood. He came over, put a hand on my shoulder, and said, “I’m so sorry.” He stood with me while I cried. Real life happens at work: success, joy, failure, trauma. We need real friends — right there, at our side — through it all.

Alison Beard is a senior editor at Harvard Business Review.

Wednesday 08 July 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

Brazilian president Jair Bolsonaro tests positive for coronavirus

Far-right leader reports high temperature and says high death toll is due to ‘fear of the virus’ BRYAN HARRIS AND ANDRES SCHIPANI

razilian President Jair Bolsonaro has tested positive for coronavirus, days after he celebrated the July 4 weekend with the US ambassador and a host of his top ministers in Brasília. The 65-year-old said he started feeling weak on Sunday, and “it worsened on Monday, with malaise, tiredness, muscle pain, and fever of 38 degrees”. He said doctors treated him with the controversial antimalarial drug chloroquine. “If I hadn’t done the tests and hadn’t been taking chloroquine, I could be contaminating people. Now I have to avoid infecting others,” he said. He added there was “no alternative” to chloroquine. The positive diagnosis makes the former army captain among the few world leaders to contract the illness, including Boris Johnson in the UK. Mr Bolsonaro has long denied the seriousness of the pandemic and has attended numerous rallies and events often without any precautions, such as wearing a

‘The virus is like the rain, it will hit you,’ Jair Bolsonaro said on Tuesday as he announced his test results © TV BRASIL/AFP/Getty

mask. He has described the disease as a mere “sniffle” and once said: “The virus is there. We need to face it like a man.” Speaking at a press conference on Tuesday, Mr Bolsonaro said: “The number of deaths has increased not because of the virus but because of the fear of the virus. The virus is like the rain, it will hit you.” He concluded by taking off his mask and giving a thumbs-up.

Like his ally US President Donald Trump, Mr Bolsonaro has also defended the use of chloroquine and hydroxychloroquine to fight the disease. Upon a request from Brasília, the US dispatched 2m doses of the drugs to Brazil, although some state governors said they refused to distribute them. On Saturday, the Brazilian leader was photographed celebrating the US national holiday

alongside his foreign minister, his chief of staff and the US ambassador to Brazil, raising the prospect that a number of members of his cabinet could also have the disease. In March, several close aides to the Brazilian leader were diagnosed with Covid-19 soon after a summit between Mr Bolsonaro and Mr Trump at the US president’s Mar-a-Lago resort in

Florida. The diagnoses sparked a frenzy of speculation that Mr Bolsonaro had been exposed to the disease. A court eventually ordered him to publish test results, which showed he was not ill. Mr Bolsonaro’s health has been an ongoing source of concern after he was stabbed while campaigning for the presidency in 2018. That attack resulted in him undergoing multiple surgeries. Brazil is in the middle of one of the world’s largest coronavirus crises, with more than 65,000 deaths from the disease. Despite the escalating situation, however, city and state officials across have begun to reopen their economies with limitations on working hours and crowd density. In São Paulo — Brazil’s largest city, which was hit hard at the beginning of the outbreak — bars and restaurants on Monday opened for the first time in four months. Throughout the crisis, Mr Bolsonaro opposed shutdowns and sparred constantly with state governors over how to handle the pandemic. “Life goes on. Brazil has to produce, the economy has to move,” he said.

Tensions rise on the Nile over Africa’s largest dam Ethiopia ready to start filling vast reservoir even if talks with Egypt and Sudan collapse HEBA SALEH

gypt, Ethiopia and Sudan are engaged in last-ditch talks to resolve a dispute over Addis Ababa’s construction of a giant dam on the river Nile that Cairo fears could lead to damaging water shortages. This month Ethiopia is set to start storing water in the vast reservoir of the $4.8bn Grand Ethiopian Renaissance Dam, set to be Africa’s largest, and which it sees as a pathway to widespread electrification and a prosperous future. But after almost 10 years of failed talks with Egypt and Sudan, the two countries with which it shares the Blue Nile, tensions are rising and mistrust prevails. Addis Ababa has said it will start to fill the dam whether or not a deal is agreed. Abdel Fattah al-Sisi, the Egyptian president, previously said Egypt would take all necessary measures to protect its rights to the Nile water, while Abiy Ahmed, the Ethiopian prime minister, has said his country was ready to “mobilise millions” to defend the dam. In May, Egypt called on the United Nations Security Council to press Addis Ababa to come

to a deal. “The unilateral filling and operation of this dam, without an agreement that includes the necessary precautions to protect downstream communities . . . would heighten tensions and could provoke crises and conflicts that further destabilise an already troubled region,” said Sameh Shoukry, the Egyptian foreign minister, in a speech to the Security Council in late June. Both governments describe the issue as “existential” for their people. But despite the at-times aggressive rhetoric, “I don’t think there is any consideration of military action being taken seriously”, said Hafsa Halawa, non-resident at the Middle East www.businessday.ng

Institute, a US think-tank. The hydropower project will have the capacity to generate 6,000 megawatts of electricity, making it Africa’s largest. The dam is seen by Ethiopia as a linchpin of its development plans, allowing it to bring electricity to tens of millions of its people. Ethiopia has rejected the notion that Egypt has “historic water rights” or that “current use” can be used as a guide to how much water the downstream country should receive. But in Egypt, a country with a population of 100m that is totally reliant on the Nile for water, there is deep alarm over future short-

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ages as unfettered control of the flow of water passes to Ethiopia. Cairo wants to seal a comprehensive deal to govern the filling and operation of the dam that would include agreed drought mitigation protocols. In February, Ethiopia rejected an agreement drafted by the US and the World Bank after talks in Washington. Ethiopian officials said the deal was biased towards Egypt. Egypt also fears that without agreement on a binding dispute resolution mechanism — something that Ethiopia has refused — it will be at the mercy of its upstream neighbour. It is concerned shortages would damage its economy and destroy the livelihoods of millions of farmers. Some 86 per cent of the water reaching Egypt comes from the Blue Nile in the Ethiopian highlands. For its part, Addis Ababa insists it will adhere to commitments to “cause no significant harm” but will not be bound by agreements that could tie its hands in operating the Grand Ethiopian Renaissance Dam or building more dams upstream of it. “Ethiopia feels no compulsion to sign anything that could potentially disadvantage it in the @Businessdayng

future,” said William Davison, Ethiopia analyst at the International Crisis Group, a think-tank. “Egypt and Sudan on the other side want something that is as detailed and as binding and long-lasting as possible.” Addis Ababa says it has been frustrated in previous attempts to exploit the river because of colonial era agreements requiring Egyptian consent. It has long been angry about a 1959 agreement between Egypt and Sudan on the Nile from which it was excluded. “Ethiopia is not asking too much; it is seeking to correct past injustices and share this precious resource in an equitable and reasonable manner,” said Taye Atske-Selassie, Ethiopia’s representative addressing the Security Council last week in response to Egypt’s complaint to the UN. Egypt’s fear is that if Ethiopia fills and operates the dam without an agreement, other Nile basin states could follow suit. The White Nile, another tributary of the river, is shared by almost a dozen countries. “Egypt wants to prevent being put in this situation again to stop unilateral actions and developments upstream without a consultation process,” said Ms Halawa.

Wednesday 08 July 2020

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

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Italian mafia bonds sold to global investors Instruments were backed by front companies charged with working for the ’Ndrangheta organised crime group MILES JOHNSON

nt e r n a t i o n a l i nv e s t o r s bought bonds backed by the crime proceeds of Italy’s most powerful mafia, according to financial and legal documents seen by the Financial Times. In one case, the bonds — backed in part by front companies charged with working for the Calabrian ’Ndrangheta mafia group — were purchased by one of Europe’s largest private banks, Banca Generali, in a transaction where consulting services were provided by accountancy group EY. An estimated €1bn of these private bonds were sold to international investors between 2015 and 2019, according to market participants. Some of the bonds were linked to assets later revealed to be created by front companies for the ’Ndrangheta. The ’Ndrangheta is less wellknown outside Italy than the Sicilian mafia but has risen over the past two decades to become one of the wealthiest and most feared criminal groups in the western world, engaging in crimes ranging from industrial-scale cocaine trafficking to money laundering, extortion and arms smuggling. Europol, the EU’s law enforcement agency, has estimated that the activities of the ’Ndrangheta, which is not made up of a centralised organisation but hundreds of autonomous clans, generate

a combined turnover of €44bn a year. Other investors in the bonds included pension funds, hedge funds and family offices, all looking for exotic ways of earning high returns at a time of record-low interest rates, according to people involved in the deals. The bonds were created out of unpaid invoices to Italian public health authorities from companies providing them with medical services. Under EU law, overdue invoices owed by state-connected entities incur a guaranteed pen-

alty interest rate. This makes them attractive for special purpose vehicles, which place them into a large pool of assets and issue bonds backed by the expected cash flows from the future settlement of the invoices. Most of the assets securitised in the deals were legitimate but some were from companies later revealed to be controlled by certain ’Ndrangheta clans, which had managed to evade anti-money laundering checks to take advantage of international investor demand for exotic debt instruments. One bond deal purchased by

institutional investors contained assets sold by a refugee camp in Calabria that had been taken over by organised criminals. They were later convicted for stealing tens of millions of euros of EU funds. Almost all were private deals not rated by any credit rating agency or traded in financial markets. CFE, a Geneva-based boutique investment bank, constructed the vehicle that sold bonds to investors including Banca Generali. When contacted by the FT, Banca Generali said it was unaware of any problems with the

underlying assets that backed the bonds it had purchased for its clients and that it had relied on other intermediaries to conduct anti-money laundering checks on the underlying portfolios. “Banca Generali and Banca Generali Fund Management Luxembourg are getting to know right now of the mentioned bad news,” the company said. It “rel[ied] on the notion that the transaction was eligible when [they] entered the securitised portfolio”, it added in an emailed statement. CFE said it had never knowingly purchased any assets linked to criminal activity. It added that it conducted significant due diligence on all the healthcare assets that it handled as a financial intermediary, and that it also relied on the checks of other regulated professionals who handled the invoices after their creation in Calabria. Both companies said that any legal issues that emerged after the invoices had been acquired were immediately reported to the Italian authorities. CFE said that the total amount of invoices later revealed to be linked to organised crime made up a very small proportion of the total amount of assets it had handled connected to the Italian health systems. EY, which was not required to conduct due diligence on the assets in the securitisation when providing consulting services for the structuring for one of the vehicles purchased by Banca Generali, declined to comment.

Oil crash piles pressure on bloated refining sector Overcapacity leaves operators facing dwindling profits, particularly in Europe DEREK BROWER AND DAVID SHEPPARD

il refineries are struggling as the worst demand-crash in decades cascades through the industry, leaving plants around the world at risk of closure. Demand for fuel remains depressed and stockpiles are bulging, while the crude refiners’ process has become more expensive following deep Opec-led supply cuts. That is squeezing margins for the plants, which convert the crude into products such as diesel, jet fuel and petrol. Europe is considered most at risk because facilities are generally older and governments have embarked on initiatives to phase out some fossil fuels from transport. But analysts at UBS said almost 3m barrels a day of refining capacity — equivalent to about twice as much as the UK consumes or roughly 3 per cent of the global total — needs to be removed from the global market by the end of 2021 to restore the sector’s profitability. Small US refineries and some capacity in Asia-Pacific could also be forced out, the analysts add. Newer refineries tend to be more

complex and efficient, allowing them to process a wider variety of crude oils at a lower cost. But plants built in the 1950s and 1960s, as mass-market adoption of motor vehicles took off, look vulnerable — especially in the context of a lot of new capacity coming on stream in developing countries, from Nigeria to Kuwait. “We had too much refinery capacity before Covid,” said Robert Campbell, head of global oil products for Energy Aspects, a conwww.businessday.ng

sultancy. “We’ve certainly got too much now.” Twice weekly newsletter Energy is the world’s indispensable business and Energy Source is its newsletter. Every Tuesday and Thursday, direct to your inbox, Energy Source brings you essential news, forward-thinking analysis and insider intelligence. Sign up here. Demand for fuel has started to recover from the depths of lockdowns in April and May — when global consumption was down by more

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than 20 per cent — but few see it reaching pre-outbreak levels before late 2021. Some plants are already losing money, once total costs of operating are factored in. Analysts say the outlook for the industry is reminiscent of the period after the financial crisis, when profit margins recovered only after a number of facilities shut for good. Predicting which refineries could close is difficult, as governments often place plants on life support owing to concerns over security of supply and job losses. But industry figures say plants such as Essar’s refinery in Stanlow in the north-west of England and Eni’s Milazzo in Sicily may struggle, along with Grangemouth, Scotland’s sole motor fuel refinery. Commodity trader Gunvor is already looking to mothball its plant in Antwerp. Essar said the Stanlow refinery was a “profitable and sustainable” business. Eni said it was “not making any specific assessment” on the Milazzo plant, which it jointly owns with Kuwait Petroleum Italia. Petroineos, owner of Grangemouth, did not respond to requests for comment. Even before coronavirus, the industry was under pressure from @Businessdayng

long-term plans to move away from petroleum fuels and competition from newer plants in Asia. HollyFrontier, a refiner in the US, recently converted its plant in Wyoming to biodiesel. Eni and Total may do the same with plants in Europe, said UBS. “There will be a shakeout in the refining sector,” said John Auers, executive vice-president of Turner, Mason & Company, a consultancy. Margins have plunged in recent weeks as oil prices rose faster than the price of finished fuel. Richard Joswick, head of refining analysis at S&P Global, said that in an average year refiners net roughly $10 a barrel — and are now getting about half that. Certain plants are earning even less. Par Pacific, a US refiner, reported margins of just $0.24 a barrel in the first quarter from its operations in Hawaii — a 93 per cent drop from a year earlier. Despite weakening margins, the US refining sector has been relatively resilient, partly because it throttled back processing operations as demand dropped earlier this year. About a third of the country’s capacity was idle in April, according to the US Energy Information Administration.

Wednesday 08 July 2020

BUSINESS DAY

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Wednesday 09 July 2020

BUSINESS DAY

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PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 220,380.40 6.20 0.81 342 13,012,162 UNITED BANK FOR AFRICA PLC 212,036.41 6.20 2.48 179 10,188,644 ZENITH BANK PLC 513,332.67 16.35 1.87 398 7,993,495 919 31,194,301 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 183,065.99 5.10 0.99 191 7,842,446 191 7,842,446 1,110 39,036,747 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,340,769.00 115.00 -0.86 84 10,232,114 84 10,232,114 84 10,232,114 BUILDING MATERIALS DANGOTE CEMENT PLC 2,147,103.93 126.00 -0.79 103 767,881 LAFARGE AFRICA PLC. 161,077.95 10.00 - 98 1,729,235 201 2,497,116 201 2,497,116 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 227,139.60 386.00 - 11 13,728 11 13,728 11 13,728 1,406 51,779,705 REAL ESTATE INVESTMENT TRUSTS (REITS) SFS REAL ESTATE INVESTMENT TRUST 1,386.00 69.30 - 2 2,750 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 1 35 UPDC REAL ESTATE INVESTMENT TRUST 10,139.42 3.80 - 2 2,850 5 5,635 5 5,635 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 5 5,635 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 66,487.53 69.70 -9.95 69 1,590,953 PRESCO PLC 45,250.00 45.25 - 15 37,006 84 1,627,959 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,500.00 4.25 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,530.00 0.51 -8.93 23 652,703 23 652,703 107 2,280,662 DIVERSIFIED INDUSTRIES JOHN HOLT PLC. 198.47 0.51 - 0 0 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 25,201.75 0.62 -1.59 70 8,381,748 U A C N PLC. 20,745.34 7.20 - 24 232,087 94 8,613,835 94 8,613,835 BUILDING CONSTRUCTION ARBICO PLC. 280.67 1.89 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 24,789.60 15.65 -5.44 151 3,202,006 ROADS NIG PLC. 165.00 6.60 - 0 0 151 3,202,006 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 17,631.97 0.95 -4.04 11 4,215,675 11 4,215,675 162 7,417,681 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 7,438.02 0.95 - 1 70,000 GOLDEN GUINEA BREW. PLC. 829.98 0.81 - 0 0 GUINNESS NIG PLC 30,665.36 14.00 - 118 1,811,163 INTERNATIONAL BREWERIES PLC. 106,105.17 3.95 - 32 252,792 NIGERIAN BREW. PLC. 272,294.51 34.05 - 80 1,807,764 231 3,941,719 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 140,400.00 11.70 - 62 351,825 FLOUR MILLS NIG. PLC. 75,857.02 18.50 - 61 360,409 HONEYWELL FLOUR MILL PLC 7,295.78 0.92 1.10 36 365,458 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 1 250 NASCON ALLIED INDUSTRIES PLC 25,169.66 9.50 -5.00 44 3,109,848 UNION DICON SALT PLC. 2,993.06 10.95 - 0 0 204 4,187,790 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 12,677.86 6.75 - 43 216,060 NESTLE NIGERIA PLC. 931,371.10 1,175.00 - 50 25,000 93 241,060 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 6,992.22 5.59 - 20 133,702 20 133,702 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 16,676.00 4.20 5.00 43 1,563,726 UNILEVER NIGERIA PLC. 71,525.32 12.45 -9.78 86 1,245,598 129 2,809,324 677 11,313,595 BANKING ECOBANK TRANSNATIONAL INCORPORATED 88,077.85 4.80 - 30 141,025 FIDELITY BANK PLC 49,257.15 1.70 1.80 84 8,076,096 GUARANTY TRUST BANK PLC. 619,526.32 21.05 0.24 450 19,723,812 JAIZ BANK PLC 15,321.41 0.52 -7.14 28 1,160,832 STERLING BANK PLC. 35,124.31 1.22 4.27 19 411,431 158,708.10 5.45 - 16 42,134 UNION BANK NIG.PLC. UNITY BANK PLC 5,493.99 0.47 - 7 107,169 WEMA BANK PLC. 20,444.47 0.53 1.92 27 1,803,265 661 31,465,764 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 10,197.18 0.90 1.11 74 6,610,163 AXAMANSARD INSURANCE PLC 16,695.00 1.59 -9.66 20 358,862 CONSOLIDATED HALLMARK INSURANCE PLC 3,983.70 0.49 - 0 0 CORNERSTONE INSURANCE PLC 8,101.23 0.55 - 3 33,000 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,757.62 0.24 -4.00 8 1,196,822 LAW UNION AND ROCK INS. PLC. 4,296.33 1.00 - 0 0 LINKAGE ASSURANCE PLC 3,440.00 0.43 -8.51 24 3,159,923 MUTUAL BENEFITS ASSURANCE PLC. 2,458.00 0.22 4.76 3 502,375 NEM INSURANCE PLC 10,825.03 2.05 - 5 99,000 NIGER INSURANCE PLC 1,547.90 0.20 - 1 100,000 PRESTIGE ASSURANCE PLC 2,989.76 0.47 - 3 21,022 REGENCY ASSURANCE PLC 1,467.13 0.22 - 0 0 SOVEREIGN TRUST INSURANCE PLC 2,272.89 0.20 - 0 0 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 1 10,000 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 8,397.09 0.35 6.06 18 738,279 160 12,829,446 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,835.43 1.24 - 10 135,000 10 135,000

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 6,784.62 1.05 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 5,671.82 1.36 - 0 0 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 8,000.00 4.00 - 42 92,514 CUSTODIAN INVESTMENT PLC 29,409.32 5.00 -9.09 20 460,969 450.00 0.30 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 35,248.83 1.78 4.09 38 1,925,207 ROYAL EXCHANGE PLC. 1,337.80 0.26 -7.69 13 1,117,124 STANBIC IBTC HOLDINGS PLC 317,775.26 30.25 - 53 370,052 UNITED CAPITAL PLC 15,600.00 2.60 0.38 63 1,366,139 229 5,332,005 1,060 49,762,215 HEALTHCARE PROVIDERS EKOCORP PLC. 2,991.61 6.00 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 888.28 0.25 - 0 0 0 0 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 593.50 0.60 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 5,946.13 2.85 - 11 104,985 GLAXO SMITHKLINE CONSUMER NIG. PLC. 5,441.24 4.55 -8.08 63 1,999,209 4,796.15 2.78 - 29 427,734 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 2,582.85 1.36 -6.21 25 417,461 556.71 3.62 - 0 0 NIGERIA-GERMAN CHEMICALS PLC. PHARMA-DEKO PLC. 325.23 1.50 - 0 0 128 2,949,389 128 2,949,389 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 1 4,000,000 1 4,000,000 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 764.87 0.26 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 216.00 2.00 - 0 0 247.48 0.50 - 0 0 TRIPPLE GEE AND COMPANY PLC. 0 0 PROCESSING SYSTEMS CHAMS PLC 1,080.09 0.23 - 6 93,033 E-TRANZACT INTERNATIONAL PLC 10,962.00 2.61 - 0 0 6 93,033 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,235,304.40 328.70 3.66 10 363,047 10 363,047 17 4,456,080 BUILDING MATERIALS BERGER PAINTS PLC 1,956.31 6.75 - 2 14,680 BUA CEMENT PLC 1,385,052.08 40.90 2.51 43 423,088 CAP PLC 14,455.00 20.65 - 8 21,359 MEYER PLC. 265.62 0.50 - 0 0 1,769.32 2.23 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 53 459,127 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,192.12 2.03 - 0 0 2,818.12 1.60 - 6 20,300 CUTIX PLC. 6 20,300 PACKAGING/CONTAINERS BETA GLASS PLC. 30,773.28 61.55 - 2 2,853 GREIF NIGERIA PLC 388.02 9.10 - 0 0 2 2,853 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 61 482,280 CHEMICALS B.O.C. GASES PLC. 1,877.26 4.51 - 6 13,310 6 13,310 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 77.00 0.35 - 0 0 0 0 6 13,310 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,377.79 0.22 -4.35 36 9,623,527 36 9,623,527 INTEGRATED OIL AND GAS SERVICES OANDO PLC 28,592.25 2.30 1.32 52 2,435,094 52 2,435,094 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 69,450.65 192.60 - 13 12,002 ARDOVA PLC 15,173.90 11.65 - 38 321,632 CONOIL PLC 14,572.99 21.00 - 14 13,662 ETERNA PLC. 2,921.28 2.24 - 9 57,010 MRS OIL NIGERIA PLC. 3,794.59 12.45 -9.78 6 137,663 TOTAL NIGERIA PLC. 33,103.38 97.50 - 18 58,931 98 600,900 186 12,659,521 ADVERTISING AFROMEDIA PLC 887.81 0.20 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 15,796.05 1.62 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 235.27 0.20 - 2 3,429 2 3,429 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,019.91 3.26 9.76 8 318,758 361.01 0.77 - 0 0 TRANS-NATIONWIDE EXPRESS PLC. 8 318,758 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 1 2,500 1 2,500 HOTELS/LODGING CAPITAL HOTEL PLC 3,763.54 2.43 - 0 0 IKEJA HOTEL PLC 2,120.37 1.02 - 1 12,000 TOURIST COMPANY OF NIGERIA PLC. 7,076.28 3.15 - 0 0 TRANSCORP HOTELS PLC 30,401.62 4.00 - 0 0 1 12,000 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 3,960.00 0.33 - 1 1 1 1 PRINTING/PUBLISHING ACADEMY PRESS PLC. 193.54 0.32 - 2 856 LEARN AFRICA PLC 817.74 1.06 - 1 1,500 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 435.72 1.01 - 1 36,000 4 38,356 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 928.31 0.56 - 4 16,213 4 16,213 SPECIALTY INTERLINKED TECHNOLOGIES PLC 688.80 2.91 - 0 0 SECURE ELECTRONIC TECHNOLOGY PLC 1,126.31 0.20 - 0 0

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BUSINESS DAY Wednesday 08 July 2020 www.businessday.ng

Martin Wolf: ‘Democracy will fail if we don’t think as citizens’

ovid-19 could transform western societies. But without a stable middle class, the state risks succumbing to plutocracy Covid-19 has been a global shock. But will it be a transformative one? The answer is that it might be a transformative event for a number of western societies, notably the US and UK. For western liberal democracies, the era after the second world war can be divided into two sub-periods. The first, running roughly from 1945 to 1970 was the era of a “social democratic” or, as Americans might say, a “New Deal” consensus. The second, starting around 1980, was that of the “global free market”, or the “Thatcher-Reagan consensus”. Between these two periods came an interregnum — the high-inflation 1970s. We are now living in what seems to be another interregnum, which began with the global financial crisis. That crisis damaged the ideology of the free market. But, across the western world, valiant attempts were made to restore the ancien régime, through the rescue of the financial system, tighter financial regulation and fiscal austerity. In the event, the rise of populist nationalism followed this attempted restoration. With his protectionism and bilateralism, promise to preserve social security and initial (since forgotten) emphasis on rebuilding infrastructure, Donald Trump became leader of his party because he was not a traditional free-market Republican. With his commitment to levelling up poorer regions and favourable references to Franklin Delano Roosevelt’s New Deal, Boris Johnson has also indicated a new direction of travel. These leaders have buried Ronald Reagan and Margaret Thatcher. Coronavirus has also now caused a still more dramatic return of government than the financial crisis. This may mark the end of the second postwar period of transition. Around what idea might politics, society and the economy now revolve? The answer should be citizenship, a concept that goes back to the city states of the Greeks and Rome. It is more than just a political idea. As Aristotle also said: “man is a political animal”. We are only fully human, he thought, as active participants in a political community. In a democracy, people are not just consumers, workers, business owners, savers or investors. We are citizens. This is the tie that binds people together in a shared endeavour. In today’s world, citizenship needs to have three aspects: loyalty to democratic political and legal institutions and the values of open debate and mutual tolerance that underpin them; concern for the ability of all fellow citizens to lead a fulfilled life; and the wish to create an economy that allows the citizens and their institutions to flourish. Anger and despair at the sys-

tem The most important reason for emphasising citizenship today is that outlined by Aristotle almost two and a half millennia ago. A necessary condition for the stability of any constitutional democracy is a thriving middle class (by which is meant people in the middle of the income distribution). In its absence, the state risks turning into a plutocracy, a demagogy, or a tyranny. With the hollowing out of the middle class, even established western democracies are now in danger. As Eric Lonergan and Mark Blyth argue in Angrynomics, the combination of adverse economic developments with manifest unfairnesses has made many people angry. In Deaths of Despair and the Future of Capitalism, Anne Case and Angus Deaton argue that these developments have also driven many into severe ill-health. They note that the death rates of middleaged white Americans have risen since 2000. Something similar seems more recently to be happening in the UK. “Deaths of despair”, they suggest, “are prevalent among those who have been left behind, whose lives have not worked out as they expected.” How did we get here? How does Covid-19 fit in? And how might our ideas and policies need to change?

The postwar settlement worked well, for a while. It was egalitarian and economically dynamic, especially in countries devastated by war. Western governments took an active role in managing their domestic economies, while simultaneously liberalising and expanding foreign trade. Intellectually, this should be called the Age of Keynes. But it died with the surge in inflation, which precipitated the labour unrest and economic slowdown of the 1970s. The Keynesian era was then followed by that of Milton Friedman, characterised by globalisation, liberalised markets, low marginal taxes and a focus on controlling inflation. This new global era saw striking successes, notably reductions in global inequality and mass poverty. It also was an era of important innovations, notably in information technology. Not least, it was the era in which Soviet communism collapsed and the ideal of democracy spread across the world. Yet a number of big weaknesses emerged. Economic growth in highincome countries tended to be low relative to that achieved in the postwar era. The distribution of income and wealth became more unequal. The economic value of relatively uneducated labour fell relative to that of college graduates. Labour

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It is clear then that the best partnership in a state is the one which operates through the middle people, and also that those states in which the middle element is large, and stronger if possible than the other two together, or at any rate stronger than either of them alone, have every chance of having a well-run constitution Aristotle, Politics

markets became more “flexible”, but earnings were more precarious. The more unequal the society, the lower its social mobility. In cultures that emphasise the obligation to look after oneself, inequality as such may not be so socially or politically destabilising. But the sense of deteriorating prospects for oneself and one’s children certainly matters. So, too, does a strong sense of unfairness. This is where the idea of “rigged capitalism” is relevant. One aspect of this is the inordinate growth of finance. Another is the shift towards the maximisation of shareholder value as the sole goal of companies and the associated tendency to reward management by reference to the price of stocks. Another aspect is the decline in competition, documented for the US by Thomas Philippon in his book The Great Reversal. Also relevant is tax avoidance, notably by corporations. US multinationals have been allowed to report a huge proportion of their foreign profits in small, lowtax jurisdictions. Such opportunities and many others in different areas are not just being exploited. They are being actively created, through lobbying. However convenient it is to blame foreigners, they are not the guilty parties. Trade, especially the sudden expansion of manufactured imports from China in the first decade of this century, generated local shocks. Yet Harvard economist Elhanan Helpman concludes a review of the literature by stating that “globalisation in the form of foreign trade and offshoring has not been a large contributor to rising inequality”. Changes for the workforce Far more important has been technological change. Particularly significant has been rapid productivity growth in manufacturing, as Martin Sandbu argues in The Economics of Belonging. Also important has been the rising demand for skilled labour relative to unskilled labour. The decline of manufacturing as a source of employment has

had adverse effects on towns and regions in which they were concentrated. When factories close or lay off a large proportion of their workforce, the wider local economy is also adversely affected. Such “left behind” regions have become a crucial element in the coalitions of the disaffected. Meanwhile, cities, especially the great metropolises, are dynamic hubs for educated people and new activities, as Oxford university economist Paul Collier has noted. The global financial crisis was the outcome of financial liberalisation in the context of rising macroeconomic imbalances, as argued by Matthew Klein and Michael Pettis in Trade Wars are Class Wars. The most important outcomes were the sudden economic collapse, the rescues of the financial system, the subsequent emphasis on curbing government spending and the post-crisis slowdown of economic growth. In the eurozone, this was exacerbated by the way in which creditor countries lectured the strugglers on their alleged irresponsibility. Mr Trump became president of the US and Mr Johnson became prime minister of the UK because of their success in incorporating the resentment of those “left behind” into their conservative coalitions. This, in turn, was partly a reaction of large parts of the old working classes to the transformation of the traditional parties of the left (Labour and Democrats) into ones more representative of university-educated cosmopolitan voters, and ethnic and cultural minorities. Impact of the pandemic Some argue that viewing these political shifts in economic terms is an error. These are, they argue, responses to cultural changes, such as immigration, the changing place of women and new sexual mores. This is unpersuasive, for two reasons: first, cultural and economic changes cannot be separated from each another; and second, culture does not change so quickly. What needs explaining is the shifts in voting behaviour. The answer is the changing allegiances of people who have come to suffer from status anxiety — the fear that they live on the edge of an economic cliff or are already falling over it. Into this already fraught situation has come the thunderstorm of Covid-19. This in turn has had at least five big effects. First, it has caused an economic shutdown to curb the spread of the disease. This came at the expense of the young, who are relatively immune to the effects of the virus, and in favour of the old, who are the most vulnerable. Second, it has tended to hit women harder than men and the unskilled harder than the skilled. This is explained by the relatively high intensity of female employment in some hard-hit (and risky) service sectors and to the ability of a higher proportion of skilled people to work securely from home.

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