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FG to spend N2.3trn to fund its T Economic Sustainability Plan
ISAAC ANYAOGU he Federal Government will spend an estimated N2.3 trillion to fund its new Economic Sustainability Plan it is counting on to revive the economy. A draft of the plan which Continues on p age 31
Nigeria takes another unsteady step towards downstream deregulation Page 31 Inside
Lack of KYC, BVN impede access to CBN’s N50bn COVID-19 fund P. 30
Ahmad Lawan (l), Senate president, and Ibrahim Gambari, chief of staff to President Muhammadu Buhari, when the latter paid a visit to the Senate president, in Abuja.
Edo guber: APC chieftain asks Buhari, Tinubu to stop Oshiomhole’s impunity P. 30
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Buhari administration’s five-year performance review: A verdict global Perspectives
OLU FASAN
A
head of the fifth anniversary of President Buhari’s administration on 29 May, the presidency published a document titled “Buhari administration fifth anniversary factsheet”, which sets out the administration’s achievements over the past five years. In a piece accompanying the document, Femi Adesina, President Buhari’s senior media adviser, averred that “Between May 29, 2015 … and now, the Buhari administration has made salutary impact in almost all facets of Nigerian life.” Of course, this is all self-referential and self-congratulatory. Put simply, Buhari set his own exam paper and marked it himself, awarding himself an “A” grade. But if Nigerians were to second-mark the exam paper, they would probably award him a “C-minus” on the basis of these two exam questions: Has President Buhari fulfilled the promises he made to Nigerians during the 2015 presidential election? Are Nigerians and Nigeria better off today than they were five years ago? These questions are important because a) fulfilling manifesto promises makes an electoral democracy credible and b) improving the lives of citizens is what politics and government should be about. As Aristotle put it, politics is “primarily concerned with the actualisation of human flourishing”. And Thomas Jefferson said: “The care of human life and happiness is the only legitimate object of good government”. Now, take the election promises. Everyone knows that Buhari’s party, All Progressives Congress, APC, campaigned on a change agenda in 2015, and presented him as the saviour the nation needed, who, like Nelson Mandela, General Dwight Eisenhower or General Charles de Gaulle, would rescue the country from decline. But the APC
did not only brag about Buhari’s leadership, vision and competence, they also set out detailed manifesto commitments in a document titled “An honest contract with Nigeria”. According to the Centre for Democracy and Development’s “Buharimeter”, Buhari made 222 campaign promises during the 2015 presidential election. But for this piece, let’s just highlight the following: Free primary and secondary education; turning federal-owned hospitals into “world-class standards with five years”; one million housing units per annum; at least 20,000 MW of electricity within four years; massive infrastructure projects; massive social security scheme; three million jobs a year; a “post-oil economy” and 10 percent annual GDP growth rate; zero-tolerance of corruption; ending insecurity; devolving powers, duties and responsibilities to states and local governments to entrench true federalism. Now, five years on, can anyone say that Buhari has been the transformational leader? Has he turned out as the Nelson Mandela or the Dwight Eisenhower or the Charles de Gaulle of Nigeria? The answer must be “no”! And he has not fulfilled most of his campaign promises; certainly not the free education, not the world-class hospitals, not the one million housing units a year; not the 20,000 MW of electricity (only about 3,400 MW is generated); not the three million jobs a year; not the post-oil economy or even an economy that grows at 10% annually; and not the political restructuring. In other areas, such as infrastructure projects, social security scheme, anti-corruption and tackling insecurity, the impacts on people’s lives are miniscule, despite the huge resources put into them. When I read the presidency’s 62-page long “fifth anniversary factsheet”, my gut reaction was: “Really? Just these in five years?” In his piece accompanying the “factsheet”, Adesina said “facts speak for themselves”, adding: “facts are stubborn things”. But what are the facts that show that the Buhari administration has irreversibly transformed Nigeria? Well, let’s analyse the “factsheet”. As you would expect, the first on the presidency’s list of achievements is the massive investments in agriculture. These investments and other government interventions are said to have boosted local production of a number of
food items, such as rice. But production is not the same thing as productivity. As Nonso Obikili rightly argued in his column last week, you can boost local production by banning imports and subsidising domestic producers, but that would prevent efficiency and productivity, which are linked to competitiveness. Truth is, agricultural productivity is very low in Nigeria, with value-added per capita rising by less than 1 percent annually, according to the Food and Agriculture Organisation, FAO. Nigeria may have comparative advantage in agriculture, but it doesn’t have a competitive advantage. For instance, Nigeria is the world’s largest producer of cassava and shea nut, but it is not an exporter of these products. Why? Because their quality does not meet international standards. The FAO says that Nigeria loses $10 billion in annual export opportunity from groundnut, palm oil, cocoa and cotton alone because of the agricultural sector’s inefficiency and low productivity. So, pouring billions into the sector just to boost local production is a waste of scarce resources and no good government would count that as an achievement. Interestingly, the Buhari administration also lists trade as its achievement, citing the establishment of the Nigerian Office for Trade Negotiations, NOTN. But which trade agreement has Nigeria negotiated – with Europe, the US, the UK, Japan or even China – to boost exports? The answer is none. Nigeria is more interested in banning or restricting imports than in promoting exports. The Renminbi-Naira swap agreement with China is aimed at making it easier for Nigeria to import from, not to export to, China. And although President Buhari reluctantly signed the agreement establishing the African Continental Free Trade Area, AfCFTA, his government has nothing to ratify and implement the agreement. Of course, infrastructure projects feature prominently in the “factsheet”. The Buhari government has spent billions of naira on infrastructure projects, such as rail lines, roads, airport terminals, water projects, etc. But while President Buhari counts infrastructure investments as an achievement, he is saying nothing about the massive debt his government has accumulated over the past five years. He inherited an external debt of $10.32 billion in 2015, but by the end of 2019 he had ratcheted it up to $85 billion,
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As the presidency says, the focus of the administration has been on security, reviving the economy and fighting corruption over the past five years, well, the truth is that it has failed woefully. The economy remains comatose, corruption hasn’t gone away, and insecurity remains widespread
about N27 trillion. Although a recent report said the federal government’s debt servicing costs ballooned to 92.2 percent of its revenue in Q1, the government still wants to borrow $3.3 billion. The section titled “Debt Management” in the factsheet should have been titled “Debt Trap”! Yet, Buhari is counting debtfuelled infrastructure development as an achievement. Not in my book! Then, take the so-called Social Investment Programme. Again, the government spends billions on naira on this programme even though its impact on poverty-reduction is miniscule. For instance, let’s assume that, according to the government, one million households, not individuals, are receiving the monthly N5,000 conditional cash transfer, what is 1m when nearly 100m Nigerians live in extreme poverty? Nigeria is the poverty capital of the world, yet the government is trumpeting a programme that benefits less than 1 percent of the extreme poor as “the largest and most ambitious social safety net programme in the history of Nigeria.” Counting that as an achievement is like pulling the wool over the eyes of Nigerians. Space will not permit covering all the so-called achievements in details. But if, as the presidency says, the focus of the administration has been on security, reviving the economy and fighting corruption over the past five years, well, the truth is that it has failed woefully. The economy remains comatose, corruption hasn’t gone away, and insecurity remains widespread. Ove the past five years, killer herdsmen and Boko Haram terrorists have killed and maimed thousands of Nigerians. Recently, Buhari himself said: “I’m surprised that Boko Haram still exists”. Of course, it still exists and operates with impunity and spread! Truth is, two things characterise the Buhari administration. First, it is a spendthrift, a profligate government, that believes in excessive borrowing and wasteful spending. Second, it believes in institutional tinkering rather than radical reforms. Hence, five years on, it has made no significant difference, absolutely not transformational. So, my verdict on his five-year performance review? Poor! Dr. Fasan, a London-based lawyer and political economist, is a Visiting Fellow at the London School of Economics. e-mail: o.fasan@lse.ac.uk, twitter account: @olu_fasan
Board structure and composition
A
while back, putting together a Board of Directors was a lot like decorating a Christmas tree - the CEO would pick out a nice selection of glittering ornaments, then top off the tree with a flashy star (David A, Nadler, Beverly A. Brian- Building Better Boards: A Blueprint for Effective Governance 27”). This analogy puts into context the traditional and informal process of nomination and appointment of members of the Board of Directors. The CEO had the most influence in the process, nominating his/her friends and professional acquaintances. A Board was considered “balanced” as long as its composition included one or two other CEOs, a sprinkling of bankers, lawyers, academics, retired politicians, and community leaders (and indeed traditional rulers). In recent years there has been an increasing focus on the Structure and Composition of corporate boards. Regulators, investors and other stakeholders are demanding a more structured and systematic approach to Director selection and Board composition. The recently launched Nigerian Code of Corporate Governance, 2018 has outlined 28 principles intended to foster an improved corporate governance regime in Nigeria. Principle Two deals with Board Structure
and Composition. “The effective discharge of the responsibilities of the Board and its Committees is assured by an appropriate balance of skills and diversity (including experience and gender) without compromising competence, independence and integrity’’. Board effectiveness hinges to a large extent on the diversity, experience, skills, and objectivity of Board members. The Code does not prescribe a minimum or maximum Board Size. It however encourages the Board to ensure appropriate balance of knowledge, skills, experience, diversity and independence to objectively and effectively discharge its governance role and responsibilities while determining its composition, size and structure taking into account the scale and complexity of the Company’s operations; the need for sufficient members to serve on its Committees and the need to secure quorum at meetings. Diversity has been widely defined to include a variety of attributes including knowledge of the field, skill and experience as well as age, culture and gender relevant for promoting better decision-making and effective governance. Interestingly, the diversity discussion has mostly focused on gender. However, age and cultural diversity can only be ignored to the detriment www.businessday.ng
of Board effectiveness. In an age of disruption and fast passed technological advancement, it is in the interest of a forward-looking Board to ensure the younger generation is appropriately represented in its membership. A pan-national, regional or multinational entity would better serve the interests of its stakeholders if its Board is composed of members from diverse cultural, racial and ethnic backgrounds. The Code encourages the Board to put in place a Diversity Policy and establish measurable objectives for achieving diversity in gender and other areas. The Board is required to periodically invigorate its capabilities by ensuring the appointment of new members with relevant skills and fresh perspectives, while retaining valuable knowledge, skills, experience and diversity and maintaining continuity. Thus, whilst not setting term limits for Non-Executive Directors (save for Independent Non-Executive Directors), the Code encourages the Board to periodically refresh its membership. A periodic evaluation of its membership against the objectives of the Diversity Policy as well as the skills set required to lead the organisation is useful. The Board is expected to ensure and maintain its own independence to ensure effectiveness.
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Bisi Adeyemi The Code recommends that no individual or small group of individuals should dominate the Board’s decision-making. In this regard, the Code provides that a person (or group of persons) who is not a serving Director of the Company should not exercise any influence or dominance over the Board and/or Management. Such a person or group of persons would be deemed a shadow director as defined by extant laws. Note: The rest of this article continues in the online edition of Business Day @https:// businessdayonline.com/ Bisi Adeyemi is the Managing Director, DCSL Corporate Services Limited. Kindly forward comment(s) and reaction(s) to badeyemi@dcsl.com.ng. DCSL provides Governance Advisory, Corporate Restructuring & Board Evaluation, Board & Senior Management Training, Retreats & Strategy Sessions, Executive Talent Recruitment, HR Outsourcing, Company Secretarial services
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An empty seat for Koleade Adeniji Abayomi, SAN; OON ‘ Imparting Bashorun J.K Randle
K
ole was very close to His Royal Highness Oba Lamidi Olayiwola Adeyemi III (exSt. Gregory’s College) the Alafin of Oyo and Sir (Dr.) Kofo Abayomi’s very senior chieftaincy title: Olu ‘sokun was his for the asking/ taking. It was very magnanimous of him to let the honour go to a younger man, Chief Fubara Anga (ex-King’s College/ Cambridge University). What is beyond question is that Kole was very deep. Of course, he was a scholar in Law and jurisprudence. He combined it with deep knowledge of Yoruba history, customs, traditions and rituals -- right down to free flowing Ifá incantations. For a man who attended three universities in England, his fluency in Yoruba language, proverbs, metaphors and cadences was unrivalled. Over the years he remained the same Kole who was in McKee-Wrights House at King’s College while I was in the most coveted Harman’s House. Up Harman’s!! Our connection was further reinforced by our common enterprise. While he was training lawyers to be learned/knowledgeable and of sound character in accordance with the eth-
ics of the profession they had freely chosen, I was engaged in the same endeavour with regard to Chartered Accountants--as President Of The Institute Of Chartered Accountants of Nigeria and Chairman Of KPMG Africa as well as Chairman and Chief Executive of J. K. Randle Professional Services. We both arrived at the same conclusion, namely there is nothing more fulfilling, more gratifying or more soul stirring than watching your former students/ trainees excel in your profession and other areas of human endeavour; and even surpass one’s own achievements. Imparting knowledge is the easy bit. Imparting ethics and morality which would ensure that accountants and lawyers can justly claim to be the conscience of the nation and the lightning rod for truth, honesty and integrity, is far tougher. The ultimate prize is the prospect of those who are teachers being rewarded with reverence and mutual respect by those who were once their student/proteges. Perhaps I should add that Professor Olanrewaju Fagbohun, SAN, the ViceChancellor of Lagos State University is not the only former student of Chief (Dr.) Kole Abayomi to head a university in Nigeria and other parts of the world. Professor Ben Enwonwu was also deep, very deep. A peep into his soul would reveal the following: “Professor Ben Enwonwu, MBE was a Nigerian Painter and Sculptor born in Umuese- Aroli, Onitsha, Nigeria in 1917. He attended the prestigious Slade School of Fine Art, University College, London and in 1945, the Ruskin School, Ashmolean, Oxford University where the Slade had been relocated during World War II. Arguably the most influential African artist of the 20th Century, his pioneering career opened the way
for the post-colonial proliferation and increased visibility of modern African art. He was the first African artist to win critical acclaim, having exhibited in august exhibition spaces in Europe and the United States. Since 1950, Professor Enwonwu was celebrated as “Africa’s Greatest Artist” by the international media and his fame was used to enlist support for Black Nationalists movement all over the world. The Enwonwu crater on the planet Mercury is named in his honour. Professor Enwonwu was awarded MBE in 1955 by Queen Elizabeth II, and received the National Order of Merit by the Nigerian government for contributions to art and culture in 1980.” What was amazing was that the erudite and charismatic Professor Enwonwu somehow got to know that my grandfather, Dr. J. K. Randle was a great and generous patron of art. He was also an avid and enthusiastic collector. He had awarded a scholarship to Mr. Aina Onabolu to enable him to study fine art in London in 1910 or thereabouts. Not only did Onabolu become an accomplished artist (in addition to being Dr. Randle’s godson), his son Ebun followed in his footsteps and was the arts master at King’s College where he encouraged me to become a professional artist!! Also, for quite a while I was an art student under Chief Omotayo Aiyegbusi, a graphic artist, designer and silkscreen artist from Ondo. He designed book jackets for notable publishers like Cambridge University Press, Evans Brothers and individual writers. He also designed greeting cards and calendars. He was a founding member of the Society of Nigerian Artists. He had an art studio at Onikan, Lagos. My third art teacher was Chief Timothy Adebanji Fasuyi.
knowledge is the easy bit. Imparting ethics and morality which would ensure that accountants and lawyers can justly claim to be the conscience of the nation and the lightning rod for truth, honesty and integrity, is far tougher
J.K. Randle is a former President of the Institute of Chartered Accountants of Nigeria (ICAN) and former Chairman of KPMG Nigeria and Africa Region. He is currently the Chairman, J.K. Randle Professional Services. Email: jkrandleintuk@gmail.com
Governance ethics: Any lessons from the African Development Bank?
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ribery and corruption are often perceived as a public sector issue. However, the increasing frequency of reports of cases of corporate wrongdoings shows that corruption is also endemic in the private sector. Evidence shows that corruption is not a completely neutral act. It often comes with reputation, litigation, regulatory, supply chain, and even financial risks. As such, it is very important to mitigate and manage corruption in the private sector, and its associated risks. One way to do this is through the adoption of policies or codes that communicate an organisation’s values and goals. Despite being a private sector approach to risk management, the development and adoption of anti-corruption/governance focused policies has two broad origins. The first is that it can be a regulatory requirement or a prerequisite by member organisations/states in the case of multilateral agencies. For example, the UK Bribery Act (2010) places a burden on UK entities operating abroad either directly or through agents to ensure that they have written anti-bribery policies in place. The second origin is volitional – where an entity voluntarily codifies the values it wishes to be associated with in the pursuit of its business. Whether these policies are a regulatory requirement or voluntary, their existence is gradually becoming a competitive tool aimed at meeting the good governance expectations of potential investors, customers, business partners, et cetera. In some cases, unsurprisingly, they are explicitly positioned as impression/reputation management mechanism. Notwithstanding the strategic relevance of such policies, their implementation, one way or the other, is always an indirect indicator of an organisation’s ethical climate – i.e. employees’ shared perceptions of the ethical practices and procedures of a firm.
The implementation of corporate policies can be informed by different schools of thought. Some schools hold onto the tenets of the letter of the policy or the rule-based compliance approach. Contextualising this would result to responses such as – “that is what the policy/ law/regulation says.” It is about adherence to the extant laws or regulations. Obviously, this is deeply rooted in legalism; and usually leads to a box checking approach to compliance. Other schools focus on the spirit of the policy or what it intends to achieve. This gives way to a more widespread and critical interest in the value judgment underlying the organisational decisions made by employees, and particularly those responsible for the strategic direction of the firms. A review of most compliance programmes in organisations would show that the legalistic school of thought is often the dominant orientation towards the implementation of corporate policies. This is unsurprising, as the function is usually manned by legal professionals or compliance officers with a leaning towards legalism. The legalistic approach to corporate codes of conduct may have the benefits of efficiency, certainty, and confidence provided by legal frameworks. However, given the dynamism and fluidity of ethics, as a precursor to laws and regulations, a narrow adherence to laws and regulations may be counterproductive – especially in grey areas where issues are not strictly white or black. Moreover, the effectiveness of corporate codes of conduct are largely dependent on appropriate organisational culture. Studies show that organisational members imbibe their cultures (e.g. the values of corporate ethics) through socialisation. This implies that ethics and governance in corporations will benefit from multidisciplinary perspectives and as such should not be restricted to lawyers and compliance officers. It should also involve www.businessday.ng
those who curate organisational cultures – for example human resources and organisational development professionals. This makes a case for the consideration of compliance from a sociocultural paradigm. Arguably, an organisation through socialisation provides its members with a shared set of values and norms, with strong cues for conformity. In other words, it can be argued that organisations are themselves mechanisms for behavioural control, where individuals receive behavioural instructions and act on these cues (positive or negative) to perform their respective roles. That is to say, if an organisation explicitly or implicitly teaches, encourages, condones or allows its employees to use unethical methods in their dealings with its stakeholders – clients, shareholders, suppliers, regulators, other employees, et cetera, it is likely that these will be internalised by the employees and passed on to new members despite what is written in corporate codes. In that case, culture literally eats corporate codes for breakfast! This thinking raises a fundamental question as to which part of an organisation should then champion the embedding of organisational ethics in an organisation? Would it be the Risk management/Compliance/Internal Audit/ Corporate Counsel functions as presently constituted in most organisations or should emphasis rather shift to incorporate the organisational development function, in order for ethics to be deliberately designed into the organisational culture? In my opinion, the latter option and a paradigm shift are necessary. This proposed paradigm shift in the embedding/implementation of business ethics programmes in an organisation is worth considering because corporate failures are costly to organisations by damaging their reputations, harming employee morale, and increasing regu-
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He was born in April, 1935 at Ilesha Osun State to a family lineage famous for production and ornamentation of art and craft for the king’s palace. His grandfather, the Asolo of Isona was the head of the artists’ guild based in Isona, Ilesa. He was admitted into the Nigerian College of Arts and Science, Zaria in 1954 to study art as one of the pioneer students, he later completed a postgraduate diploma in education moderated by London University. He was an art teacher at St. John’s Teacher’s College, Owo in Ondo State where he taught for fourteen months before his appointment as art education officer at Kings College, Lagos. He was a founding member of the Society of Nigerian Artists and he served as its first secretary with Prof. Yusuf Grillo as president. He was also the first Nigerian member of International Association of Artists (IAA) based in Paris and was later elected its vice president. I hope I can complete the painting of “EMPTY SEATS AT THE METROPOLITAN CLUB” in time for auction at the 2020 ART X Exhibition being organized by Tokini Peterside, the indefatigable, resourceful and creative daughter of Dundun and Atedo. She has really done wonders for Nigerian/African art going by her several appearances on CNN. Of course, the proceeds of the auction of the painting will be handed over to The Corona Fund for Artists. All that creative energy that is wasting away or in storage during the pandemic must surely find release when the nightmare is over.
Donald Amaeshi latory costs—not to mention the wider damage to society’s overall trust. Often times, how these polices are implemented yield them to the scrutiny of court of public opinion. For instance, African Development Bank’s (AfDB) compliance to its code of ethics in the handling of a whistle-blower’s complaints against its President is the fulcrum of a raging public debate. AfDB’s code of ethics specified that investigation be performed at the preliminary stage by the Board, but is silent on whether the Board could use an external, independent party at this first stage; or rely solely on its internal structure. Notwithstanding, AfDB was advised to bring in an external investigator to consider the matters raised by the whistle-blower. Going by the legalism approach, an investigation was conducted internally. Thus, the compliance box was successfully checked in this instance. However, unfolding events suggest that the decision-making process behind this compliance has wider implication on the perceived ethical orientation of the entity, as expressed in the US Department of Treasury’s letter to the Board of Governors of AfDB. From a best practice perspective in investigations, the advice to bring in an external investigator might have been predicated on the belief that an internal investigation team may be caught in the power dynamics at play in AfDB because of the calibre of personnel involved. This is a valid consideration in the practice of investigation.
Note: the rest of this article continues in the online edition of Business Day @https:// businessday.ng Amaeshi is a governance practitioner with extensive corporate ethics and investigation experience. He can be reached via: d.amaeshi@researchnigeria.net
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African Development Bank bows to US pressure over inquiry into alleged wrongdoing Lender agrees to independent review of earlier probe that cleared bank chief Akinwumi Adesina
David Pilling
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he African Development Bank has bowed to US pressure to open an independent evaluation of an inquiry into its president, Akinwumi Adesina, after weeks in which past and present African leaders have complained bitterly that Washington is meddling in the institution’s affairs. The accusations surrounding Mr Adesina, a dapper, bow-tie-wearing former Nigerian agriculture minister, have plunged the AAA-rated lender into its most serious crisis since 2003 when it had to relocate to Tunis for a decade because of civil war in Ivory Coast. The dispute has been brewing since January, when whistleblowers, calling themselves “concerned staff members”, sent a 16-point document to the bank’s anti-corruption department and its ethics committee. They accused the president of ignoring bank procedures and appointing old friends, many of them Nigerians, to AfDB jobs. They also spotlighted examples of lucrative contracts that they alleged had been awarded without due process. The ethics committee, chaired by Takuji Yano, Japan’s executive director at the bank, cleared Mr Adesina of all
wrongdoing. But in a leaked letter from May 22, Steven Mnuchin, US Treasury secretary, expressed “deep reservations” about the “integrity” of the internal inquiry and pushed for an independent probe. The US is the bank’s secondbiggest shareholder after Nigeria. The AfDB on Thursday reiterated its support for the original decision of the ethics committee but said it had agreed to an “independent review” of those findings in order to satisfy all members of the bank’s board. Mr Adesina has vigorously denied what he called “trumped-up allegations”, lashing out in a May 27 statement at “attempts by some to tarnish my reputation and prejudice the bank’s governance procedures”. Under Mr Adesina, the bank, which lends to projects designed to combat poverty, won approval from its 80 members in October last year for a $115bn capital increase, the largest in its 55-year history, more than doubling its capital. The decision was seen as a vote of confidence in Mr Adesina, 60, who is still planning to seek re-election for a second term in a contest that has been rescheduled for August because of the coronavirus pandemic. Mr Adesina has won support for his re-election as bank president from 54 African countries. Mr Mnuchin’s call for an independent probe has pitted the US — and several European governments that have also pushed for an investigation — against many of Mr Adesina’s supporters, who quickly rallied to his defence. “I’ve known Dr Adesina for several years, we’ve worked together, and I’ve no doubt about his integrity,” said Arunma Oteh, an academic scholar at Oxford university and former treasurer
at the World Bank. “We are in the middle of a Covid-19 pandemic and the African Development Bank is one of the most important institutions for rallying the economic resources to fight this,” she said, alluding to the bank’s issuance of a $3bn “Fight Covid-19” social bond and its establishment of a $10bn crisis facility. Ms Oteh refrained from criticising Washington directly, saying only: “When you’re an African you have to be above board because people will assume you’re doing wrong. And when you are Nigerian it is even worse.” But other supporters were less restrained. “We are not in the 1950s. You can’t write to Africans as if we were your slaves,” said one person, who has worked at the bank. Some allies of Mr Adesina said it was hypocritical for a US administration, in which President Donald Trump is advised by his daughter and son-in-law, to complain about Mr Adesina’s alleged nepotism, one of the accusations against him. They also accused Washington — fresh from its withdrawal from the World Health Organization — of using multilateral institutions to pick fights with China, although Beijing has not traditionally played a big role at the AfDB. “The African Development Bank is a pride for all of Africa, and its President, Dr Adesina, has taken the bank to enviable heights,” said Olusegun Obasanjo, a former president of Nigeria, and Ellen Johnson Sirleaf, a former Liberian president and Nobel Peace laureate, in a joint statement with several other former African leaders. The bank’s procedures should be honoured, they said, referring to
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Under Mr Adesina, the bank, which lends to projects designed to combat poverty, won approval from its 80 members in October last year for a $115bn capital increase, the largest in its 55-year history, more than doubling its capital
the internal inquiry that had already cleared Mr Adesina, criticising what they described as American hubris: “No nation, regardless of how powerful, has a veto power over the African Development Bank.” Some close observers of the bank said Mr Adesina’s attempt to garner political support had backfired. “He’s wrapping himself in the African flag to say these colonialists are interfering,” said one African banking executive. Others pointed to what they said had been Mr Adesina’s high-handed style and alleged habit of firing people without due process in order to bring in his compatriots, something he has denied. It was not only the US that had asked for an independent inquiry. The UK and several Nordic countries also pushed for an external investigation, if only to clear Mr Adesina’s name in time for August’s election. In its statement on Thursday, the bank said that the inquiry would take “two to four weeks maximum” in order to accommodate the electoral calendar. Ms Oteh, the former World Bank treasurer, said that attempts to impugn the bank’s reputation were misguided. At least the AfDB held competitive elections to select its head, she said, referring to Mr Adesina’s victory in 2015 against several candidates, including the finance ministers of Cape Verde, Chad and Ethiopia. That was not like the Asian Development Bank, said Ms Oteh, where the president was always a Japanese national chosen by Tokyo. Nor was it like the World Bank itself, she added, where all 12 presidents since 1946 have been American. FT
Ideas for a new Nigeria: Why we should all push for women inclusion in governance
ECONOMIST
(fourth in a series of five volumes)
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top of the list long running problems with humanity is the systemic discrimination against women. For long periods in history, and up to contemporary times, many societies have systematically discriminated against women resulting in a plethora of unequal outcomes compared to men. Despite the gains made in some parts, women remain disadvantaged in terms of basic human rights, access to economic opportunities, access to resources, justice on gender-based violence, and importantly, in the wielding of political power. Nigeria is one of the packs. Across most measures of gender equality, we score poorly even compared to a world that is also unequal. This systematic discrimination has gone on for so long that biases that we don’t even realise that we have are part of everyday life. A couple of weeks ago I took one of those quizzes to see if had a gender bias against women. I consider myself a feminist but I still failed the quiz. The biases that discriminate against and disenfranchise women run deeper than many of us want to accept. These biases are not just in our heads. We have cultural, legal, and political institutions that continue to reinforce these biases both directly and indirectly. This means that attempts to push for gender equality have to be deliberate. It is not enough to raise up our hands and say “Oh I don’t discriminate against women”. We have to be a lot more deliberate than that. But there is more. Pushing for gender equality is an objective in its own right, but as economists are learning, it is also very good
economics. Research continues to show time and time again that investing in women is one of the better investments any society can make. Investing in girls tends to have higher impacts on future income, as well as better health outcomes such as fewer maternal deaths. Women tend to re-invest a lot more of their income into the health and well-being of their families, and so investing in women tends to have higher effects on the education of both male and female children. Women tend to default less on loans. Including women in conflict resolution tends to result in lower incidence of violence and more peace. I could go on. This is not just random data from far flung reaches of the world. Research on Nigeria tells the same story. From the latest poverty report published by the NBS, households headed by women tended to be a lot less poor than those headed by men. This was true across almost all levels of education, occupations, and in both rural and urban areas. In fact, one of the most interesting research papers I read recently shows that women who benefited, either directly or indirectly, from the education reforms in the 1970s, one of Africa’s largest school construction projects by the way, increased the educational attainment of their children especially their girls. If investment in women is so great then how come it doesn’t just happen? The short answer is politics. The decisions on policy are made by those seated at the table and the women on that table in Nigeria are few and far between. We have never had a female www.businessday.ng
president or vice president in Nigeria’s history. In the current political regime, there are no female governors and only two deputy governors out of 36. In the national assembly only about 5 percent of the senators or representatives are women. A situation which is mimicked in most of the state assemblies. Whichever way you cut it; women are currently excluded from the political decision-making process. As research has shown, when women are excluded gender inequality worsens and women suffer as policies on their issues get downgraded. There are some who would argue that you don’t need women to make pro-women decisions and the men are just as capable. But that is nonsense. If you examine Nigeria’s history the most significant events that have promoted women’s participation and rights and made a difference have been championed by women. Whether it be the riots against unfair taxes in Aba or the struggle for women’s rights in Abeokuta. Essentially, if the best investments we can make as a country are in women and women are not currently part of the decision-making process, then we need to change that. We need a political revolution championed by women that puts women on the decision-making table. A political revolution supported by women and men who are inspired to put their time and money to supporting participation in governance. The support of men is important because this is not a burden to be borne by women alone. In fact, I dare say, there is no bright future for Nigeria if the question
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NONSO OBIKILI
of women’s participation in politics is not answered. The old ways forcing women into dedicated “women’s wings” with little authority, or waiving registration fees in contests that are designed to prevent them for winning need to be called what they are: complete wastes of time. Of course, the question of honesty, competency, and credibility are important and you don’t just want any women in governance. But we should also be applying the same standards to men many of whom are dishonest, incompetent and have little credibility but somehow still manage to find themselves in leadership positions. And yes, the long-term goal is to get to the point where there is true equal opportunity without the systematic bias, but until then deliberate action is needed. As for me I have a new philosophy with regards to my interaction with politics from now on: No women? No vote. Thank you to Belinda Archibong, Fakhrriyyah Hashim, Nwakaego Onike, and one other who wants to remain anonymous for helping me shape my thoughts on this topic. Dr. Obikili is the chief economist at BusinessDay
@Businessdayng
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BUSINESS DAY
Monday 08 June 2020
EDITORIAL Publisher/Editor-in-chief
Frank Aigbogun editor Patrick Atuanya
Nigeria’s education system is vital to productivity, fix it! PPP initiatives, government aid must be encouraged
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 FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai COPY SALES MANAGER Florence Kadiri DIGITAL SALES MANAGER Linda Ochugbua GM, BUSINESS DEVELOPMENT (North)
Bashir Ibrahim Hassan
GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu
n a number of deficiencies and inequalities, the COVID-19 pandemic has unmasked the gaps in Nigeria’s education system. Given the importance of education to human development and its irrefutable role in economic development, fixing these inequalities should make the list of priorities. Economic productivity is a function of quality education system. A United Nations International Children’s Emergency Fund (UNICEF) Report states that 10.5 million of the Nigerian children aged 5-14 years are not in school. Only 61 percent of 6 to 11-year-olds regularly attend primary school. Some states in the North Eastern and North Western parts of the country have more than half of their girls not enrolled in schools as marginalisation ensures that girls in those regions are deprived of basic education. This explains why Nigeria contributes 20 percent of the total global out-of-school population. The COVID-19 outbreak has worsened these numbers.
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In an unintended but necessary action, the Nigerian federal government and state governments ordered the closure of schools at all levels and forms in a bid to curb the spread of the deadly virus. This, of course, has disrupted learning processes and outcomes of students across the country. However, amid this unfortunate event, COVID-19 pandemic is revolutionising digital and online education globally. While some schools in Nigeria have fully embraced the ‘new normal’, children in rural and underserved communities in some Nigerian states, are being left behind as they are not equipped to adapt or transition to the new methods of learning. Prior to the outbreak of the COVID-19 pandemic, there was a number of challenges inherent in the Nigeria’s education sector. Also visible is the low attention paid to developments in the sector by the federal government as shown in its budgets. Recently, the FG cut a whopping 54.25 percent from its 2020 budgetary allocations for Universal Basic Education to N51.1 billion, down from N111.7 billion. All
these have reflected in the suboptimal performance in the sector. In 2019, the sector recorded a weak growth of 0.80 percent. The pandemic, however, provides opportunities to revive and develop the education sector. Very commendable are the efforts of some private and nongovernmental sectors executing projects such as Digiterate and Teach for Nigeria in Lagos. However, there are some children who currently cannot keep up with their peers because they don’t have access to digital tools. Such children may never catch up and will continue to feel the effect of this gap long after the pandemic is over, according to the World Economic Forum (WEF). The challenges in the Nigerian education system are partly an issue of access; it is also that of quality. To drive quality and access, Public-Private Partnerships (PPPs) and government aid must be encouraged. According to WEF, “PPPs can do much to improve the quality of, and increase access to education for poor children in underserved communities. More schools in such areas, especially
Lagos, would go some way to start shifting the teacher/student ratio which has hit alarming lows of 1:83 at points during the past decade.” If Nigeria must have a vibrant education system, education should be viewed as a high government priority. There should be an understanding that an investment in it is one in human capital and very beneficial to economic development. This should inform budgetary allocations into the sector. Also, investing in educational tools of the future alongside a total revamp of the educational sector is key. Reforms in the national curriculum post-pandemic would be an effective way to also bridge the inequality gap. Nigeria’s human development index is very poor and depicts the miserable state of its citizens. What better way to improve this index if not investing in quality education? This is a sustainable mission that must be embarked on because the more educated a country is, the more productive its workforce becomes, and the more it grows economically.
HEAD, HUMAN RESOURCES Adeola Obisesan
EDITORIAL ADVISORY BOARD Imo Itsueli Mohammed Hayatudeen Afolabi Oladele Vincent Maduka Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Mezuo Nwuneli Charles Anudu Tunji Adegbesan Eyo Ekpo Wiebe Boer Paul Arinze Boye Olusanya Ayo Gbeleyi Haruna Jalo-Waziri Clement Isong
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Monday 08 June 2020
BUSINESS DAY
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18 BUSINESS DAY
FT
Monday 08 June 2020
FINANCIAL TIMES
World Business Newspaper
European economy ‘through the worst’ but activity still depressed
Shopping, leisure and work-related travel all begin to improve but tourism subdued VALENTINA ROMEI
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uropeans have begun to return to work, shopping and dining out, suggesting the worst of the economic damage inflicted by coronavirus pandemic lockdowns has passed, but overall activity remains well below normal standards, pointing to the long haul back to recovery the region faces. High-frequency data indicators such as mobility and consumer spending suggest that the sharp economic contraction that has gripped major European economies since March began to ease in May and early June. The figures are more up to date than official economic indicators, which have only been published up until April, although they are also experimental and the extent to which they reflect the subsequent trends documented in official data is variable. “There is some evidence that European economies are through the worst of this really sharp fall in output,” said Neil Shearing, group chief economist at Capital Economics. “Things are starting to bottom out . . . but I think the recovery is going to be extremely weak.” For many economists the data support the view that the pandemic has deepened the divide in economic performance between northern and southern European countries. Shopping and leisure Eurozone shoppers bought
Customers at a restaurant by the Grand Canal in Venice, Italy, as European economies begin to reopen © REUTERS
fewer goods in April than in any other month since record began in 1995, according to official figures. Yet, since lockdowns began to relax in May, trips to shops, bars and restaurants have started to increase again, particularly in France and Italy, according to Google Mobility data. Spain and the UK lag behind, while Germany and other northern European countries experienced a milder contraction and smaller differences with pre-crisis levels, largely reflecting less stringent restrictions. EU car sales dropped by an annual rate of 76 per cent in April, according to sector data. But internet browsing, a forwardlooking indicator of spending, points to some normalisation in
consumer demand. Visits to car sales websites increased by early June as showrooms began to reopen, according to web tracking company SimilarWeb. Europeans also showed renewed interest in buying furniture and houses. High-frequency data indicate “that the recovery took off midway through May, with Germany leading the pack”, said Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics. But economists warn the recovery will be gradual across the region, particularly in countries and sectors where lockdowns were more stringent or hampered by some continuing restrictions, as well as low consumer and business confidence. Bert Colijn, senior economist,
at ING, warned that “a lot of the restrictions are going to stay with us for quite some time which means [activity] will take longer to recover to the level where it was before the crisis”. Work Figures to be published this week are expected to show that in April, industrial production in the eurozone experienced the largest contraction since records began in 1992. But Google Mobility data suggest that the decline in trips by Europeans to factories and offices eased in May. The same pattern is replicated in road and public transport data. Nikola Dacic, a Goldman Sachs economist, said that mobility indicators should be “highly informative about the pace at which activity is rising in the initial
phases of recovery” as the crisis was primarily caused by restrictions on movement. New job openings remain subdued, however, even in less-affected economies such as Germany. High unemployment and falls in household income are also likely to contribute to the continued economic drag. Rosie Colthorpe, an economist at Oxford Economics, said that across Europe “high uncertainty and a weak outlook for employment means that consumers may choose to save rather than spend”. European governments and central banks have supported the economy with large stimulus packages but some economists fear the support might run out before activity is strong enough to support more hiring. “We suspect that a fragile recovery will require steady interventions for some time,” said Nadia Gharbi, Europe economist at Pictet Wealth Management. Travel Travel and tourism is one of the hardest-hit sectors of the economy and continues to show little improvement. By June 2, the number of flights landing and departing in Europe was down 90 per cent compared with the same day last year and was largely unchanged over the past month, according to FlightAware, an aviation software and data company. Europe’s hotel occupancy rates were stuck at one-tenth of capacity by late May, according to STR, a hotel data company — worse than 30 per cent for the US and 40 per cent in China.
Fidelity chief warns of global corporate solvency crisis Anne Richards says asset managers unable to provide enough cash to keep businesses afloat
ATTRACTA MOONEY
F
idelity International boss Anne Richards has warned that the asset management industry will struggle to provide enough capital to fix the solvency problems public businesses face as economies emerge from lockdown. The fund management executive, whose investment company oversees £305bn in client assets, said many businesses would need an injection of capital to offset the high levels of debt they had accumulated during the crisis, which has left whole industries unable to operate. But she said it was vital that businesses focused on ensuring they had access to as many pools of capital as possible, adding: “The [asset management] industry is not going to be enough to solve this solvency problem.” The scale of cash needed to repay the public funding businesses have received from governments or central banks is likely to be so large
Anne Richards: ‘If you don’t want that drag from the overhang to depress the recovery, you have to think about the plan to recapitalise’ © Bloomberg
that it is “either going to be written off or sit on balance sheets, where it will have a depressing effect”. “If you don’t want that drag from the overhang to depress the recovery, you have to think about the plan to recapitalise. The [fund] industry can support a high proportion of that, but I don’t think it can do all of that recapitalisation.” Her comments come as investors grapple with big questions over which companies to back and www.businessday.ng
which to let fail, after the pandemic left businesses ranging from travel to retail struggling to survive. The UK has already experienced a spate of fundraisings as companies attempted to deal with cash flow problems, with more than 50 share placings taking place in the two months from late March alone, according to PrimaryBid, a group that links retail shareholders with companies. The [asset management] industry is not going to be enough to
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solve this solvency problem Anne Richards But even more businesses are expected to turn to share sales in the months ahead in order to balance debt to equity ratios, a measure used to understand whether companies have enough cash to satisfy debt obligations. Others will attempt to build cash piles that allow them to buy up other distressed businesses. Although fund managers globally are sitting on larger cash piles than usual — at 5.7 per cent compared with a 10-year average of 4.7 per cent, according to a Bank of America survey — Ms Richards said there were not huge levels of cash quickly available to support companies. The chief executive, who took over the running of the asset manager in 2018, signed a letter in April urging companies to respect the rights of small shareholders in future equity fundraisings. The letter was sent after many businesses shunned retail shareholders while running emergency equity placings in response to the @Businessdayng
pandemic. Ms Richards said there were some circumstances where putting aside pre-emption rights, which give original shareholders a first right of refusal on share issuances, made sense but said that it was important to be able to tap retail shareholders for capital. She added that it was unfair that retail investors were also missing out on good investment opportunities. Despite huge volatility in markets, Ms Richards said Fidelity had fared well. The asset manager suffered just two weeks of net investor redemptions so far this year. Portfolio managers at Fidelity are holding slightly more cash than usual as part of an effort to manage liquidity “very closely”. But she said the rapid action from central banks in response to the crisis had stabilised markets, giving people confidence that although “we might be going into a deep recession, that didn’t mean a financial crisis”.
Monday 08 June 2020
BUSINESS DAY
19
COMPANIES & MARKETS
US companies scurry back to IPO market after rapid recovery Further deals are coming, say bankers, as Wall Street has its busiest week in a year RICHARD HENDERSON
C
ompanies are pulling forward plans to go public in the US, responding to a surge in demand for new stock market listings that just culminated in the busiest week in a year. This week delivered $3bn in proceeds from initial public offerings, the biggest haul since May last year. Excitement peaked on Wednesday when the two biggest deals since the Covid-19 crisis were expanded after orders exceeded the amount of stock on offer. In the morning, Warner Music priced its shares near the top end of the pre-flagged range and increased the offering by a tenth to $1.9bn — making it the year’s largest US flotation so far. By the evening, ZoomInfo, a marketing software company, had priced above its previously set range to raise $935m. On Thursday, after ZoomInfo’s stock rose more than 60 per cent on debut, fintech Shift4 Payments priced its imminent flotation above the previously set range, raising $345m. The healthy demand for the deals reflected a renewed vigour among equity investors. US stocks have risen more than 40 per cent since their March low, completing the strongest 50-day run in history, fuelled by optimism over the global rebound from the coronavirus pandemic. “We’re seeing demand as strong or stronger than we saw before
Warner Music, which includes artists such as Cardi B, is among the companies to announce listings, which also include ZoomInfo and Shift4 © FT montage; Tasos Katopodis/Getty Images for Universal Pictures
the Covid-19 crisis,” said Paul Abrahimzadeh, co-head of North American equity capital markets for Citi. “You’re going to see a lot more IPOs coming.” Carter Mack, president of JMP Group, said he is working with a dozen companies on listings at the moment — a “record backlog” that includes four groups considering moving their listing one month forward to June. Vroom, the used car sales app, is set to price on Wednesday, and a series of other deals are waiting in the wings, according to bankers. A listing for Albertons, the supermarket chain, is weeks away, according to a person with knowledge of the deal. DoorDash and Postmates — rivals in the food delivery business — are also among the companies known to be considering a listing.
The recent IPOs reinforce the idea that equity investors are embracing high-quality growth companies right now. If companies are ready, there is a good window available Greg Chamberlain, JPMorgan Chase Palantir, the data-mining group that has considered a listing for years, fanned expectations of a share sale last month after Alex Karp, its chief executive, said in an interview with Axios that a deal could occur within a year. The IPOs done so far this year are dominated by technology and healthcare groups — the two bestperforming sectors of the US stock market in 2020. Greg Chamberlain, head of US technology, media and telecommunications equity capital markets
for JPMorgan Chase, said the flurry of listings will encourage companies that have submitted their paperwork to press ahead. “The recent IPOs reinforce the idea that equity investors are embracing high-quality growth companies right now,” Mr Chamberlain said. “If companies are ready, there is a good window available.” An uptick in listings is likely to include a broader set of sectors, added Jim Cooney, head of equity capital markets for the Americas at Bank of America. “We’re seeing an acceleration in IPOs and the nearterm pipeline is broader than just tech and healthcare,” he said. Helping the deal flow is the drop in the Cboe Vix index of market volatility. The benchmark, known as Wall Street’s “fear gauge”, surged above 80 in March to a record high,
but fell to 26 points this week, a level not seen since February. Less than a tenth of $100m-plus deals in the US have occurred when the index is above 25 points, according to Dealogic data going back to 2000. The recovery in sentiment has helped to push the total amount issued across equity markets — from new listings to secondary offerings and big block trades — to $65.5bn in May. That was the highest monthly total on record, edging ahead of the sum raised in December 2009. The May tally included big secondary offerings from Shopify, the Canadian ecommerce group, and PNC Financial’s $13bn sale of its stake in BlackRock. The surge in equity issuance has been mirrored in debt markets, where US investment-grade bond issuance has already surpassed $1tn for the year. Yet for all the optimism over dealmaking, doubts linger about asset prices. Many investors worry that the rally has become detached from reality given some dire economic forecasts, while protests over police brutality have swept the US and tensions with China have risen. The presidential election in November provides another potential source of volatility for would-be issuers. “The risk of the unknown and a potential sell-off is top of mind for many people,” said Mr Cooney of Bank of America. He noted that issuers who are able to “accelerate” their listing plans are doing so, “since market conditions later this year may be more uncertain.”
Japan’s long-term borrowing costs hit highest in a year Traders nervous about appetite for new debt to fund fightback from Covid-19 LEO LEWIS
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apan’s long-term borrowing costs have jumped to their highest levels for more than a year as investors and traders brace for a summer deluge of bonds issued by the government to fund its Covid-19 fightback. The yield curve — which shows the extra yield demanded for debt as its maturity lengthens — has steepened for Japanese government bonds, as it has for other countries such as the US that are also borrowing and spending heavily to counter the economic effects of the virus. Traders of JGBs said this trend was due to nerves about the market’s appetite for the coronavirus-driven supply glut from July, but also doubts over how much longer-dated debt the Bank of Japan will buy under its long-established policy of yield curve control. “The market has basically
Since Covid-19 took hold earlier this year, Japanese policymakers have unleashed waves of fiscal and monetary stimulus to support the economy © Bloomberg
decided that the BoJ wants the yield curve to steepen and will hold back on buying much at the super-long end of the curve,” said one Tokyo-based bond trader, who asked not to be named. “Everyone is on high alert at this point for confirmation that we’re guessing the BoJ correctly.” Traders’ bets on the appetite of the BoJ and other buyers such as life insurers and pension funds have sent long-term bond www.businessday.ng
prices falling, pushing the 30year JGB yield up to more than 0.5 per cent, the highest since May 2019. The spread between 20-year and 30-year bond yields has also widened to more than 0.15 percentage points in recent days. That gap could widen further, say strategists. “The market might currently not be pricing in a further increase in supply should the current issuance
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plan underestimate the drop in tax revenue from weaker economic activity,” warned Société Générale economist Takuji Aida. The central bank’s fine-tuning of the JGB yield curve is closely watched around the world as more central banks take a Japanlike path towards low or negative interest rates and large assetpurchase programmes. Since Covid-19 took hold earlier this year, Japanese policymakers have unleashed waves of fiscal and monetary stimulus to support the economy, estimated by Fitch Ratings as amounting to 10 per cent of the country’s economic output. Japan’s finance ministry last week announced that it would increase the supply of JGBs for the financial year ending March 2021 to Y253tn ($2.3tn) from the initial plan of Y153tn — the third upward revision since April. About Y23tn of the increased issuance will be interest-bearing, which means that from July, @Businessdayng
issuance of 30-year JGB will rise from about Y700bn at each auction to Y900bn. Shuichi Ohsaki, chief Japan rates strategist at Bank of America, said attention at future auctions would focus on whether the BoJ increases its bond purchases in step with the new issuance. It might choose not to increase its purchases of 25-year debt and longer, he said, because of concerns about the risks posed to life insurers and pension funds from “excessive flattening” of the curve. These institutions rely on yields on long-dated debt to match their liabilities, or the promises made to policyholders. Such a move by the BoJ would risk disrupting the supply-demand relationship in shorterdated debt, Mr Ohsaki added. A higher 20-year yield “could put upward pressure” on the 10-year yield, which is the target of the yield curve control policy, he said.
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Monday 08 June, 2020
BUSINESS DAY
Live @ The Exchanges Equities close week on a negative note Stories by Iheanyi Nwachukwu
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igeria’s stock market closed the trading week ended June 5 on a negative note after Friday’s trading session ended in red. Profit taking in large cap stocks like Dangote Cement Plc, BUA Cement Plc, Nigerian Breweries Plc, Cadbury Nigeria Plc and Guinness Nigeria Plc help fuel the journey southward. Investors in the market booked N118billion loss in the review trading week. Its Year-to-Date (YtD) negative returns increased to -6.80percent. The NSE ASI decreased by 1 percent to 25,016.30 points, while the value of listed stocks decreased to N13.049trillion. The market recorded total turnover of 1.469 billion shares worth N23.553 billion in 22,911 deals, in
L-R: Tayo Lawal, director, finance and account, OPay; Bola Adeeko, head, Shared Services Division, the Nigerian Stock Exchange (NSE); Oladipo Omogbenigun, director of Payment Solutions & Corporate Partnerships, OPay; Adetokunbo O. Fabamwo, chief medical director, Lagos State University Teaching Hospital (LASUTH); Ibrahim Mustafa, director, Clinical Services & Training, LASUTH; Olakunle Olumuyiwa, director of Remittance, OPay; and ADNS. Adebola Aina, head, Nursing Services, LASUTH during the donation of 100,000 face masks to LASUTH by OPay under the NSE’s Masks for All Nigerians campaign .
contrast to a total of 1.255 billion shares valued at N13.501 billion that exchanged hands preceding week in 20,554 deals. The Financial Services industry (measured by volume) led the activity chart with 861.775 million shares
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valued at N8.545 billion traded in 11,647 deals; thus contributing 58.66percent and 36.28percent to the total equity turnover volume and value respectively. The Consumer Goods industry followed with 184.644 million shares
worth N5.880 billion in 3,953 deals and the Services industry, with a turnover of 119.238 million shares worth N270.084 million in 1,043 deals. Trading in the Top Three Equities namely FBN Holdings Plc, Guar-
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anty Trust Bank Plc and Zenith Bank Plc. (measured by volume) accounted for 456.576 million shares worth N6.940 billion in 5,921 deals, contributing 31.08percent and 29.47percent to the total equity turnover volume and value respectively. All other indices finished lower with the exception of NSE AFR Div Yield and NSE Consumer Goods Indices which appreciated by 1.20percent and 0.26percent respectively while NSE ASeM closed flat. Twenty-six (26) equities appreciated in price during the review week, lower than thirty-four (34) equities in the preceding week. Thirty-nine (39) equities depreciated in price, higher than twenty-one (21) equities in the preceding week, while ninety-eight (98) equities remained unchanged, lower than one hundred and eight (108) equities recorded in the preceding week.
@Businessdayng
Berger Paints berths with Berger Swift Painting
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s an innovative and customer-focused c o mpa ny , B e rg e r Paints Nigeria Plc has set up Berger Swift Painting to deliver quicker, neater and smoother painting in the most efficient and effective way with the use of mechanized and advanced tools. Industry watchers were quick to say that Berger Swift Painting, the first of its type in Nigeria, is expected to carve a niche for Berger Paints Nigeria Plc service delivery and upscale the company’s competitive edge. They also believe that the new service will enhance customers’ satisfaction and comfort. Incidences of prolonged painting, dusty environment and imperfect painting will soon be over in Nigeria with the launch of a unique premium painting solution, Berger Swift Painting (BSP) by a frontline manufacturer of Coating and Allied Products, Berger Paints Nigeria (BPN) Plc.
Monday 08 June, 2020
BUSINESS DAY
MARKETS INTELLIGENCE
21
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Stocks rebound significantly in Q2 despite worsening economic and health conditions in Nigeria …Nigeria could enter its 2nd stagflation in just 4 years later this year BALA AND IFEANYI JOHN
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fter suffering a major decline in the first quarter of the year, the stock market seem to have rebounded significantly in Q2 2020, despite growing fears that the economy may officially enter a stagflation at the end of the third quarter of the year. A stagflation is defined as a persistent high inflation combined with high unemployment and stagnant demand in a country’s economy. Inflation has climbed for the eighth consecutive month to 12.34 percent and the government forecast inflation could rise to 14.13 percent in 2020 while the economy will contract by 4.42 percent. This signals Nigeria could enter its 2nd stagflation in just 4 years, however, investors seem to have overcome the economic fears at least since the start of Q2. In Q1 2020, the Nigerian Stock Exchange All Share Index declined by 27.2 percent as a global health pandemic combined with an oil price meltdown and nationwide lockdown literally brought the economy grinding to a halt. As the global lockdown has began to ease, oil prices continue to recover, boosting investor confidence and jumpstarting a boom in the stock market. Unlike the first quarter of the year, the second quarter has been more fruitful for investors who have seen the All Share
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n what was a surprise turn of events, it appears the economic slowdown experienced in Nigeria in the first quarter of the year was worse on non-oil sector than it was on oil sector which most analysts had written off. In the first quarter of 2020, Federal retained revenue as project in the initial 2020 budget was estimated to be N1.96 trillion in the first 3 months of the year, but what was actually earned was only N950.5 billion, representing a revenue shortfall of around N1.015 trillion. Most analysts expected that revenue shortfall in government trea-
SHORT TAKES N312m After a disappointing 2018, Fidson healthcare seems to have regained its mojo as it records an after-tax profit of N312 million in full-year 2019 for the period ended 31 December. Revenue dipped 13.5 percent to N14.06bn from N16.22bn in the same period in 2018. Efficient cost management saw its cost of sales decline 17.35percent to N8.19bn from N9.91bn
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Index rise by 18.6 percent quarter to date as at Friday after market close. Some analysts are now starting to question to stock market rapid climb to pre-crisis levels as the threats which led to the initial stock price collapse remains and have gotten worse in most cases. The health pandemic appears to have worsen in Nigeria. As at the start of Q2, there were only 111 recorded coronavirus cases in Nigeria but as at June 4 2020, the number of coronavirus cases in the country had risen 100 folds to 11,166 recorded cases and 323 deaths in the country. The economic woes have continued which has caused the federal
government to commence a gradual reopening of the country after weeks of enforcing citywide lockdowns in some of the major economic centers of the country. The International Monetary Fund (IMF) had earlier forecasted that Nigeria will see her economy contract by 3.4 percent in 2020. However, the Federal Government of Nigeria is taking a more pessimistic stance, forecasting that the economy could contract by as much as 4.42 percent in its revised 2020 budget. In fact, the Federal Minister of Finance, Zainab Ahmed said in a press statement in May that the Federal Government expects that without
a fiscal stimulus, the economy will contract by 4.42 percent in its best case scenario and contract by 8.9 percent in its worst case scenario. The Minister also stated that she was hopeful that will a fiscal stimulus package in place, the Nigerian economy may contract by only 0.59 percent in 2020 but went ahead to budget assuming a 4.42 contraction in the economy in 2020. Analysts are currently amiss as to whether the stock market recovery will be sustainable over the coming months but in the meantime, it appears that they will rather join the party than sit on the sidelines and watch no matter the risk.
FG Suffer N1trillion revenue shortfall in Q1, as Non-Oil Revenue contracts faster than Oil Revenue IFEANYI JOHN
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sury will largely be driven by weakness in crude oil prices which fell sharply in Q1 from $66 at the start of the year to $22.75 at the end of Q1 2020. However, data obtained from Nigeria’s 2020 revised budget report showed that oil revenue declined by only 30% compared to non-oil revenue which fell 40 percent below its budgeted estimate for Q1. Although in terms of value lost, oil revenue declined by around N195.3 billion compared to nonoil revenue fall of around N181.87 billion. However, this only reflects the fact that Nigeria continues to be predominantly funded by oil revenue and the high income from oil is what will cause the actual amount to exceed the drop in nonoil revenue even though based on a percentage decline the non-oil
revenue had a worse performance. The repercussion of lower oil income earned is already impacting all tiers of government as they saw their allocations decline significantly during the first three months of the year. The Federation Account Allocation Committee (FAAC) disbursement to the three tiers of government dropped from N716.3 billion in January to N581.57 billion in March, representing a decline of about 18 percent. Analysts now forecast that FAAC allocations may drop further to N370.89 billion in the second half of the year if crude oil price averages $25/b this year. The forecast drop represents a decline of about 48 percent in FAAC disbursement from its January figure, which is in line
with the 52 percent drop in revenue below budget in Q1. This really should not come as a shock as the last time oil price averaged $30 in the market was in January 2016. The following month, only about N370 billion was shared to all tiers of the government from the total earnings accrued in January 2016. The federal government has now revised its oil price benchmark from $57 to $25 for the rest of the year. If oil prices average $25, then FAAC disbursements of less than N400 billion could be the new reality for the government. As at market close on Friday, bonny light crude oil price had risen to $38.27 as oil price has rallied strongly since the gradual reopening of the global economy.
The stock market declined for the fifth-straight trading session on Friday to end its worst week after CBN’s CRR policy weighed on banking stocks and set off 2020’s longest bear-run. Nigerian equities fell for all five trading sessions last week to close 2.65 percent lower weekon-week, and end January on a very different tempo than it began the month. Bank stocks shed 5.17 percent to push Year-to-date return to 7.46 percent, down from around 10 percent at the beginning of the week, while analysts say the bearish sentiment will likely extend to trading this week. “Next week, we expect bearish pressures on the equities market to remain, as investors continue to selldown on banking counters,” said analysts at Lagos-based Chapel Hill Denham in a note to clients.
N23bn Interswitch Limited has listed its N23bn callable senior unsecured bond with a tenor of seven years at a fixed rate of 15percent, embedding a call option that can only be exercised from the second year, are payable in full at maturity A callable bond is a bond that the issuer may redeem before it reaches the stated maturity date. In essence, a callable bond allows the issuing company to pay off their debt early. According to the company, this is part of its N30bn debt issuance programme through a special purpose vehicle, Interswitch Africa One Plc.
BusinessDay MARKETS INTELLIGENCE Team Lead: BALA AUGIE, IFEANYI JOHN; Graphics: FIFEN FAMOUS
BMI provides in-depth analysis and data on industries, companies, stocks, currencies, fixed income/credit, economics, regulation and factors that influence investor’s decision-making Continues on page 37 Email the BMI team balaaugie@yahoo.co.uk; augiebala@gmail. www.businessday.ng
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Monday 08 June 2020
BUSINESS DAY
COMPANIES & MARKETS
COMPANY NEWS ANALYSIS INSIGHT
ECONOMY
COVID-19 leaves 38% of workers without work as commerce sector worst-hit, NBS says SEGUN ADAMS & BUNMI BAILEY
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lmost four out of ten workers stopped working due to the novel coronavirus pandemic with those in commerce sector worst affected, according to a new report by the National Bureau of Statistics (NBS) on the socio-economic effects of Covid-19 on Nigerian households. The 38% reported to have stopped working is based on a survey carried out between April and May, and puts into perspective the expected spike in unemployment from the coronavirus impact which disrupted activities across sectors of the economy. “Workers in all sectors were affected by the pandemic, but primarily those working in commerce, services and agriculture,” said NBS. While NBS reports states
that “The survey revealed that 42% of respondents who were working before the outbreak were no longer working the week preceding the interview for reasons related to COVID-19.”, a breakdown it gave showed that 4% of those that stopped working
were actually “unrelated to COVID-19”. Highlighting impact by sectors, the data bureau said 14% of respondents were working in the commerce sector before the outbreak but have since stopped working due to COVID-19.
AGRICULTURE
Olam set to deepen local rice production to curb post COVID-19 food crisis CYNTHIA EGBOBOH
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lam Nigeria has disclosed its plans to ramp up local rice production through it’s over 5000 hectare, fully mechanized largescale rice farm in Nigeria. In a statement on friday, Okolobi-Okolobi Emmanuel, Olam Farm Manager said that the farm is ready to commence a massive agrarian drive in a bid to save Nigeria from the effects of a post Covid-19 food crisis. “It will be recalled that President Muha m mad u Buhari urged Nigerian farmers to embark on massive food production this farming season as in his words, Nigeria must produce what it eats” . “In furtherance of this resolve by the President, Olam Nigeria is pledging to continue its support in the fight to ensure food security and helping the country reduce its food imports by ramping up Rice production through it’s over 5000 hectare, fully mechanized
large-scale rice farm that produces 2 crops a year for the Nigerian market”. He further explained that the farm which has an integrated rice mill with a production capacity of 120,000 tonnes is committed to producing only local and home grown quality rice with the variants of Mama’s Pride and Mama’s Choice. “Olam is working with more than 20,000 direct Outgrower famers and sensitizing more farmers to plant Rice and handholding them with training and inputs in 5 states of Nigeria”. “In addition, Olam participates across the country as the biggest off taker of paddy rice from Nigerian farmers impacting livelihoods of more than 100,000 farmers directly and indirectly”. Olam farm in its bid to make Nigeria the agricultural hub on the African continent have also commenced sourcing, procuring, grading, processing and exporting other agricultural products such as cocoa, cashew, sesame and cotton.
The Manager further noted that Olam Rice Farm and Mill in Rukubi,Nasarawa State in effort to fulfil its Social corporate responsibility has created both direct and indirect employment to the tune of 2500 people, thereby helping the local community survive and enriching the farmers around and within the environs. “We must not forget that the COVID-19 pandemic is arguably the biggest challenge facing humanity today. It is ravaging not only Nigeria but the global economy”. “As part of the efforts to support Nigeria’s fight against Covid-19, Olam has successfully given palliatives to host communities, embarked on enlightenment and educational campaigns in form of radio and TV jingles in local languages to stress the need for social distancing , wearing of masks as well as hands washing whilst ensuring they are all in line with Covid-19 protocols as espoused by WHO and NCDC”.
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“This is equivalent to 60% of all those working in the sector prior to the pandemic,” it said. 9% of respondents in Agric and Services each, 7% in Construction and 3% in Public Administration stopped working because of
the pandemic. The poorest households formed the highest of workers that stopped working (45%) but the rate was also high for the wealthiest households (39%). The middle-class saw a rate of 42%, the second highest.
The impact of the COVID-19 pandemic has had a negative effect on Nigeria households’ total income, as a high rate of households reported income loss since mid-March. 79% of households reported that their total income decreased. Income from all sources were affected by the pandemic and reported to have decreased since mid-March. “However, the rate was highest for income from non-farm family business (85%) compared to household farming, livestock or fishing (73%) and wage employment (58%),” the report stated. Nigeria was among the first countries in Sub-Saharan Africa to identify cases of COVID-19 and has recorded over 11,000 cases since its index case in late February. The country’s economy by 1.87% in Q1 2020, the slowest in over a year, on non-oil sector weakens.
CWG partners Clari5 to help African banks combat financial crimes real-time MODESTUS ANAESORONYE
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eading information technologycompanyCWG, has partnered with Banking Enterprise Financial Crime Risk Management products company Clari5 to jointly help African banks combat enterprise fraud and money laundering. Through this strategic partnership, CWG and Clari5 will provide solutions to African banks to counter enterprise-wide fraud and money laundering risk. Banks across Africa can now benefit from the unparalleled advantages of Clari5’s extreme real-time, cross channel, enterprisewide fraud risk management capability. “We are tremendously excited to partner with Clari5,” said Adewale Adeyipo, group CEO, CWG. “The pan-African fraud and money laundering landscape has become alarmingly sophisticated over the last few years and clearly banks are seeking more efficient solutions to combat the scourge. But dealing with the new reality is beyond the league of
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conventional, siloed antifraud solutions. With Clari5, banksnow the power of a world-class enterprise-wide real-time financial crime management solutionthat has been changing the way banks fight financial crime.” Clari5 CEO, Rivi Varghese, added, “We believe that the best way to combat fraud and money laundering is with a solution that can behave like the human central nervous system to synthesize intelligence from across all channels of the bank in that very moment when it matters most. Clari5’s provenreal-timeproduct capabilityin thwarting financial crime, coupled withCWG’s unparalleled market reach and rich legacy of engagement successes makes it a compelling value proposition for innovative African banks to prevent bottom-line losses to financial crime. We are both proud and delighted to partner with CWG – the legendary African technology leader.” With over two decades of contribution to the Information & Communication Technology sector, CWG – an ISO9001 certified technol@Businessdayng
ogy conglomerate has set a benchmark for technology and service excellence in Africaby consistently delivering service excellence using global best practices. CWG commenced operations in Nigeria in 1992 as Computer Warehouse Limited primarily to cater to hardware projects. In 1994, CWG established DCC Networks as its communications arm to provide VSAT, Metropolitan, Wide / Local Area Networks to corporates. In 1997 CWG acquired Expert Edge Software to address demands in software solutions, systems and training. Clari5 is endorsed Category Leader in Financial Crime Risk Management Systems for Enterprise Fraud by Chartis. Research, Winner of IBS Intelligence Global Fintech Innovation Award, Best Fraud Detection Product Award by Risk.net and ranked consistently in global RiskTech and Regtech Top100 rankings andquadrants, Clari5 redefinesreal-time, cross-channelbanking Enterprise FraudManagement using a centralnervous system approach tofight financial crime.
Monday 08 June 2020
BUSINESS DAY
COMPANIES&MARKETS Century Group partners BAB to attain strong mileage in the energy sector IFEOMA OKEKE
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entury Group, a global industrial group o p e ra t i n g i n the energy and non-energy sectors through various subsidiaries has partnered Bumi Armada Berhad (BAB) a Malaysian owned International offshore energy facilities and ser vicing company which has helped it attain very strong mileage in the market space. This partnership is better evidenced w ith the emergence of Century as a leading African Indigenous Firm transmuting from a major Service provider to a formidable asset owner. With this effective partnership, Century is said to be competing excellently in the tanker space within the African markets. Furthermore, the partnership is said to have taken advantage of the local content policy to become a crucial Player in the Floating Platform Storage Output (FPSO) – (Perkassa& Perdana) deals in Nigeria. Ken Etete, the Group CE O of Centur y Group in a statement said Cen-
tury Group which is guided by strong and affirmative ideological vision have succeeded in building one of Africa’s major Energy platforms’ as can be evidenced with the Group being the first company in Africa to predominantly focus on floaters. He said Centur y has been able to offer cost effective ‘derisking’ solutions to clients in a period when options are limited and incentives for production are scarce. Etete in a recent discussion averred to the fact that, “it all started on Sloan Street in London in 2006 w ith the bir th of Bumi Armada Nigeria and BAB’s first two FPSO (Perkassa & Perdana) deals in Nigeria.” According to him, BAB gave Century opportunities to showcase its capabilities under reasonable terms and was flexible to respond to the realities of the Nigerian oil and gas tanker needs and resources. “Today, we own two of our own and again BAB has a hand in making that a reality,” he said. He s t at e d t hat “ T h e Management of BAB despite contractual differ-
ences were objective, civil, transparent and practical in considering the interests of all; for this, I am humbled.” Century Group and its partners according to Etete are showing that in business, growth and speed anchored on revenue is not always an indication of success. “Successful corporations are those which transcend generations and empower people to achieve something profound and new. Organizations can go farther when they collaborate and look beyond the immediate business rainbows to support each other genuinely. “BAB, an Asian company has done a great service to Africa by promoting a company with global focus in providing innovative solutions. “With a unique and mutually respectful relationship like this, this partnership will surely have a lot more to achieve together thereby deepening expectations and showcasing to global markets they very strong positives embedded in a value driven growth trajectory amongst serious partners,” Etete explained.
L-R: Austin Avuru, Chief Executive Officer, Seplat Petroleum Development Company Plc; Dr. A.B.C. Orjiako, Chairman, SEPLAT and Edith Onwuchekwa, Company Secretary/Chief Governance Compliance Officer, SEPLAT, at the SEPLAT 7th Annual General Meeting held in Lagos recently.
L-R Commissioner for Local Government & Chieftancy Affairs, Dr. Wale Ahmed, Secretary to the State Government, Mrs. Folashade Jaji, Head of Service, Mr. Hakeem Muri-Okunola and Commissioner for Establishment, Training and Pensions, Mrs. Ajibola Ponnle during the Ministerial Press Briefing to Mark the first year Administration of Governor Babajide Olusola Sanwo-Olu in office at Alausa Secretariat, Ikeja, Lagos yesterday. Pix by Peter Usinola. www.businessday.ng https://www.facebook.com/businessdayng
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Monday 08 June 2020
BUSINESS DAY
Start-Up Digest
In association with
Covid-19: Startups adjust model to grab new opportunities Odinaka Anudu & Josephine Okojie
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t is not all bad news for the Nigerian economy as the novel coronavirus pandemic opens new vistas of opportunities for Nigerian start-ups, forcing them to tweak their business models. Some start-ups are selling more of their products online while others are diversifying into other new businesses in line with the new normal. This is a proof that there are opportunities even in adversity. Steven Nwadike, cofounder, Tringoo, a technology start-up that connects users to vetted professional photographers, tells StartUp Digest that Covid-19 has forced him to innovate and win. “Since the outbreak of the coronavirus, we have implemented the work-at-home policy and our productivity level increased,” he says. “We created two business strategies to survive the economic fallout from the pandemic. As a photography business, we were not able
to generate income since the outbreak as government placed restrictions on social gatherings. So we develop a Peexoo Look Alike initiative for people to visit our platform to search for their Look Like images,” he further says. This strategy, he says, went viral as 5,000 people subscribed on his platforms. Similarly, Tringoo created a learning platform for photographers on its platform to learn and upscale their skills. Sanni Sheriff is the founder, Sannikayz Kitchen, a food start-up.
It has not been easy for Sheriff as Nigerians can no longer visit restaurants to eat owing to the pandemic. But Sheriff has adopted a different approach to conquer the situation. “So, we decide to launch a private kitchen and create a home delivery service to remain in business. Since then, orders from our customers have been on the rise daily.” Coronavirus has affected over 11,000 in Nigeria, killing more than 300. Weeks of lockdown have put a number of small businesses in
MSMEs urged to embrace innovation as coronavirus-induced crisis heightens Gbemi Faminu
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layers in the micro, small and medium enterprises (MSMEs) space have been asked to embrace innovation and reforms in order to recover after a long coronavirus-induced break. Ifie Sekibo, MD/CEO, Heritage Bank Plc, in his address at the ‘Upgrade Summit 2020’ webinar, said that despite the importance of MSMEs as drivers of economic growth, they are susceptible to shocks and can easily collapse. He said after such a big and unprecedented break in business, it is important for MSMEs to re-strategise and develop business recovery plans using innovation. At the event themed ‘Converting Ideas into Reality with Focus on SMEs’ held recently, Sekibo said that evidence has shown that for MSMEs to continue to survive and remain the bedrock of any vibrant economy, the players must continuously
reinvent themselves, complement each other, dream big, possess cutting-edge ideas and think and rethink before venturing into businesses. He further said that there is a need for MSMEs to look inwardly, learn and relearn, possess the spirit of selfsacrifice and believe. “MSMEs are a crucial part of every economy, but for them to remain relevant and to survive in the business environment, they need to engage in a lot of innovative and reformative activities, equipping themselves with enough knowledge and qualities to remain relevant in the long run,” Sekibo said. He also said that most entrepreneurs burn with ideas but need to mine them so that they can blossom, adding that they need to have mentors that will enable them to achieve their goals and sell the ideas. “Among small and medium-sized enterprises (SMEs) in Nigeria, there has been too much of an individual focus, www.businessday.ng
rather than a holistic or intergenerational focus. There is not enough focus on partnership among Nigerian SMEs and this causes ventures to fail,” Sekibo stated. The MD advocated that more needs to be done in the area of empowering the entrepreneurship sector by the government and financial institutions because it is an agent of development. Speaking on Heritage Bank’s efforts so far, Sekibo affirmed that the bank’s philosophy does not rely on traditional banking metrics like growth in the number of accounts alone but also on supporting MSMEs. “One of our major cardinal points as a bank is supporting micro, small and medium scale businesses and our strong desire is to see young men and women succeed in any area of their business. This will help the society and economy to grow, thereby moving the nation from poverty occasioned by Covid-19 to prosperous economy,” he said.
Africa’s largest economy out of business. But many startups are embracing the new normal, adopting innovation to beat the current economic slump. Adenike Adedoyin, CEO, Glamour Beauty Salon, no longer relies on plaiting of hair but now produces wigs of all kinds. “Instead of sitting in my shop and waiting for customers to come, I produce and take to them,” Adedoyin says. The education system is not left out of this innovation. Charles Obisike, a
secondary school teacher, has created an online platform for students desirous of learning physics and mathematics. The lessons are between 20 and 60minutes long, and students are allowed to pay one they have received the lessons. Chukwubuike Nnoli is the chief executive officer of Zubnol Investment Limited. Before now, Nnoli had been a producer of throw pillows, bed sheets, baby duvets and embroider y products. But he now makes quality face masks to prevent the spread of COVID-19. The Awka, Anambra State-based manufacturer, says he has the capacity to produce 10,000 to 20,000 face masks every week. Nnoli says that one major difference between his products and others is that they are fully sanitised and sealed per pack before being supplied to customers. “This helps protect hundreds of Nigerians from being infected with Covid19,”he says. Nigeria has 41.5 million MSMEs in the country which contribute 50 percent to Nigeria’s GDP and accounts for
86.3 percent of jobs (59.6million jobs in 2017), according to a report by the National Bureau of Statistics (NBS) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN). The Enterprise Development Centre of the PanAtlantic University recently conducted a survey on the impact of coronavirus on small businesses. About 88 percent of MSME owner-respondents said they would tinker with their business models, with 47 percent likely to consider new businesses due to the harsh realities of the pandemic. These are mainly due to to the influence of technology which has now re-defined the way business is done. Olusola Babatunde, a fashion designer and the managing director of Onestop Celebration Limited, has commenced the production of facemasks and other protective instruments in Nigeria. “I felt strongly that I could do something to contribute my own little quota to curbing the spread of the COVID19 virus in the country,” she notes.
Entrepreneur launches online platform to support 100, 000 startups Josephine Okojie
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s Nigeria gradually adjusts from the economic fallout of COVID-19 pandemic, Beatrice Erhomonsele, founder of Beatrice Business Spa, has launched an online platform to provide learning courses for 100,000 startups to reposition their businesses and bounce back. The platform is designed for entrepreneurs who intend to learn more about the dynamic and constantly evolving business ecosystem. Sp e a k i n g d u r i n g t h e launch, Erhomonsele said COVID-19 has made digitalisation of startup business inevitable considering the lockdown that crippled businesses all over the world. “Start-ups interested in effectively growing their businesses, increasing sales and marketing, customer satisfaction, understanding taxes, and corporate compliance, should visit our newly released website and explore the different tools and re-
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sources that can help their businesses to grow their ROI (return on marketing investment),” she said. She warned that for startups to survive in the post COVID-19 era, infusing technology in business processes is the only way to achieve profitability and reduce shocks arising from the aftermath of the pandemic. According to her, the website offers practical information and training on life dynamism, career growth, emotional intelligence, and rich templates for different occasions. “The site is a platform for sharing expertise and offering consultations and personalised support to clients. The site design makes it easier for us to provide clients with expert opinions and feedback on their marketing strategies, and to succeed in their marketing efforts and get results faster and more consistently than before,” she said. “More information can be found on www.beatriceerho@Businessdayng
monsele.com. The website and online courses are developed and supported by team of distinguished training and coaching experts,” she added. The training materials featured on the site include a range of topics covered in her blog posts, while the online courses talk about fundamentals of entrepreneurial operations, how to build a startup, emotional intelligence in the workplace, learning how new products are built and launched for success, lead generation and brand awareness. Erhomonsele stressed that her coaching and training classes enable business owners to scale and grow their businesses within the shortest possible time. She enjoined local business owners interested in the courses or in need of a consultation session to contact her on +2348059270472 or info@beatriceerhomonsele. com or get in touch using the contact form provided on the website.
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real sector watch
Manufacturers, exporters count losses as Covid-19 bites ODINAKA ANUDU
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anufacturers and exporters are counting their losses as measures taken locally and globally to curb the spread of coronavirus continue to hurt them. Inter-state movement is still largely restricted despite directives by the Federal Government to security agencies to allow vehicles conveying certain types of products passage. Manufacturers say they are still struggling to get their raw materials to their factories as security agents request bribe before allowing their vehicles passage. Mansur Ahmed, president, MAN, said federal and state governments must urge security agencies to allow movement of manufacturers’ vehicles to forestall closure of factories due to intense pressure on margins. “With the current logistics nightmare, a lot of agrobased raw materials will go
bad before they reach the factories,” he said. ‘Logistics is still a challenge; you can’t move goods easily,” he further said. Jon Kachikwu, CEO of Jon Tudy Enterprises, a Lagos-based food processor, whoalso exports to the United States, in a telephone interview, said high cost of logistics was having a big impact on his produc-
tion cost. “Bringing in a bunch of plantains into Lagos used to cost N800 to N1,000, but you have to spend at least N2,000 now because security agencies insist on being ‘settled’,” he said. “Security agencies are simply frustrating us. The Federal Government said we can bring in food, but this is not the case. The
government should visit security checkpoints and see how much frustrating things are,” he said. He urged the government to intervene, saying that businesses were barely surviving. He pointed out that border restrictions by many countries were also hurting Nigerian exporters. The manufacturing sec-
tor contributes over 11 percent to Nigeria’s Gross Domestic Product (GDP). The sector is hard hit by poor infrastructure in the country as players continue to be pummelled by rising logistics costs. Energy cost is high, and taxation is mostly cumbersome in Africa’s largest economy hard hit by revenue crisis owing to low crude oil prices and lockdowns. Nigeria relies on crude oil for 75 to 80 percent of their foregn exchange and revenue. The non-oil export sector is hard hit by a poor transport system, and lack of competitiveness in the global market. Okhai Ehimigbai, export manager at Aarti Steel, which exports steel products and zinc ash, said his company had earlier stopped export to the Economic Community of West African countries (ECOWAS) due to the closure of the border. He added that the company no longer exported at the moment owing to coronavirus measures taken by many countries. Manufacturers fear that
banks and creditors may swoop on them from the third quarter of the year as their hope of paying back loans looks slimmer due to a worsening economy and ravaging virus. “There is no written report on this, but our members have been complaining that they can’t pay salaries and that banks may close in on them, which may lead to take-over,” Ambrose Oruche, acting directorgeneral of the Manufacturers Association of Nigeria (MAN), said. A less strenuous situation occurred in 2016 when foreign exchange inflows into Nigeria fell by more than 50 percent. Fifty-four firms shut down in 2016/17, according to Frank Jacobs, the MAN president. More than 200,000 jobs were reported lost during this period. Muda Yusuf, directorgeneral of the Lagos Chamber of Commerce and Industry (LCCI), told BusinessDay recently that the country must ensure that its real sector was competitive to reduce over-reliance on oil receipts.
mono product economy. In 2018, Nigeria’s total non-oil export earnings from more than 25 commodities in 2018 were $3.3 billion, according to the NBS, but Bangladesh, once one of the poorest countries on earth, earned 10 times that amount ($33 billion) from exporting only one product—textile. Bangladesh has 5,000 garment factories, employing about 20 million people, mostly women, pushing the extreme poverty index down to 12.9 percent, according to the World Bank, as against Nigeria’s nearly 50 percent. Nigeria does not have any full-fledged textile firm today. Yale economist Ahmed Mushfiq believes that Bangladesh’s recent economic success is attributed to the flourishing garment manufacturing industry. Similarly, between January and December 2018, Vietnam earned $244.72 billion from export of finished products from garments and shoes to smart phones, according to General Department of Vietnam Customs. Giant phone makers such as Samsung, Intel and LG
produce smart phones in Vietnam today and export from there. In 2018, the countr y fetched over $50 billion from export of phones and their components— the biggest turnover among export items— according to the country’s General Statistics Office. It earned $27.3 billion from phones between January and July 2019. The Southeast Asian country attracted Foreign Direct Investment of $16.74 billion between January and July 2019, according to the country’s Foreign Investment Agency. In the whole of 2018, Nigeria’s FDI was $2.2 billion, from $3.5 billion the previous year, according to the United Nations Conference on Trade and Development. According to Vo Tr i Thanh, a Vietnamese economist, key to Vietnam’s growth was market reforms. The countr y worked on private business right; macroeconomic and social stability, while opening and integrating its economy into the regional and world economy, especially in the areas of trade and FDI.
Why Nigeria must export value-added products Odinaka Anudu
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igeria needs to break away with e x p o r t i ng raw materials to the global market and must rather increase the quantity of value added, manufactured products it ships out of the country. This is because Nigeria is earning peanuts from export of raw products which are usually raw materials for European, American and Asian factories. In 2013, non-oil exports data from the Nigerian Export Promotion Council (NEPC) showed that total earnings by the end of the year were $2.97 billion. Of this, cocoa and its preparations comprised $758.64 million, amounting to 26 percent of the total non-oil exports value within the year. The global cocoa beans market was estimated at $9.94 billion as of 2018, according to a work done by Grand View Research. On the other hand, the global chocolates market was estimated at $140 billion as of the end of the same year,
according to another research work by Research and Market.com. This shows that the chocolates market is 14 times the cocoa beans market. This means that Nigeria exports cocoa and then imports finished beverages and chocolates. The country then loses foreign exchange, jobs and ancillary industries that should have sprouted from such value chains. “If I am sending cashew nuts in a raw form, I get $800 per ton, but if it is processed, I get close to $2000 per ton. So the money-making thing here is value addition,” Attah Anzaku, CEO of AgroEknor, an international commodity trading firm said. “Why most people are not so interested in exporting value-added products is that they are just satisfied with the little dollar they get from raw products. But if that is what you want out of life, good for you. If you go abroad to all the shelves and retail stores, you see most of the things we sell to them. I was in Barcelona recently and I saw tiger nuts bar. A tiger nut was selling for 20 euros. If you are selling www.businessday.ng
that in a raw form, you will not get as much as that,” he explained. Nigeria’s 2013 NEPC data revealed that cocoa was followed by sheep, goat skin and leather, sesame seeds, aluminium, rubber, tobacco products, cotton yarn and woven fabrics. Also on the list were copper, cashew nuts, edible nuts, prawns, shrimps, fish and crustaceans. In 2013, Italy, known widely as producer of quality shoes and leather products, spent $355.63 million on purchasing sheep and goat skins from Nigeria. Also, Spain bought sheep, goat skin and leather valued at $51.67 million from Nigeria while India spent $24 million on buying them from Africa’s largest economy. In a similar fashion, China, world’s fastest-growing country, bought Nigeria’s leather worth $93.8 million. Evidence shows that Italian and Spanish leather products, regarded as superior to Nigerian counterparts, are in various Nigerian markets and are often patronised by the rich class as they are expensive and durable. Some
of the leather inputs used in making these foreign leather products might have come from Nigeria. While tanneries are exporting processed animal skins, shoemakers in Aba, Abia State industrial capital, travel to China and several African countries in search of skins. “What happens is that the tanneries in Kano and Kaduna process animal skins and sell them as leather in the global market, earning foreign exchange,” said Chinatu Nwagbara, coordinator of Made-in-Aba Project, who produced shoes for Olusegun Obasanjo in 2016. “So we go to China and other countries to buy. Sometimes, we buy our products and re-import,” he said. While export of skins is a business decision, merely exporting raw products to Europe and the Americas while local industries starve of the same inputs is not be the best industrial strategy any nation should pursue. Even though the situation is slightly changing, the change is still insignificant. Lack of value addition is already hurting Nigeria’s
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Monday 08 June 2020
BUSINESS DAY
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Globalisation unwound
Has covid-19 killed globalisation? The flow of people, trade and capital will be slowed Editor’s note: The Economist is making some of its most important coverage of the covid-19 pandemic freely available to readers of The Economist Today, our daily newsletter. To receive it, register here. For our coronavirus tracker and more coverage, see our hub
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VEN BEFORE the pandemic, globalisation was in trouble. The open system of trade that had dominated the world economy for decades had been damaged by the financial crash and the Sino-American trade war. Now it is reeling from its third body-blow in a dozen years as lockdowns have sealed borders and disrupted commerce (see Briefing). The number of passengers at Heathrow has dropped by 97% year-on-year; Mexican car exports fell by 90% in April; 21% of transpacific container-sailings in May have been cancelled. As economies reopen, activity will recover, but don’t expect a quick return to a carefree world of unfettered movement and free trade. The pandemic will politicise travel and migration and entrench a bias towards self-reliance. This inward-looking lurch will enfeeble the recovery, leave the economy vulnerable and spread geopolitical instability. The world has had several epochs of integration, but the trading system that emerged in the 1990s went further than ever before. China became the world’s factory and borders opened to people, goods, capital and information (see Chaguan). After Lehman Brothers collapsed in 2008 most banks and some multinational firms pulled back. Trade and foreign investment stagnated relative to GDP, a process this newspaper later called slowbalisation. Then came President Donald Trump’s trade wars, which mixed worries about bluecollar jobs and China’s autocratic capitalism with a broader agenda of chauvinism and contempt for
alliances. At the moment when the virus first started to spread in Wuhan last year, America’s tariff rate on imports was back to its highest level since 1993 and both America and China had begun to decouple their technology industries. Since January a new wave of disruption has spread westward from Asia. Factory, shop and office closures have caused demand to tumble and prevented suppliers from reaching customers. The damage is not universal. Food is still getting through, Apple insists it can still make iPhones and China’s exports have held up so far, buoyed by sales of medical gear. But the overall effect is savage. World goods trade may shrink by 1030% this year. In the first ten days of May exports from South Korea, a trade powerhouse, fell by 46% year-on-year, probably the worst decline since records began in 1967. The underlying anarchy of global governance is being exposed. France and Britain have squabbled over quarantine rules, China is threatening Australia with punitive tariffs for demand-
ing an investigation into the virus’s origins and the White House remains on the warpath about trade. Despite some instances of co-operation during the pandemic, such as the Federal Reserve’s loans to other central banks, America has been reluctant to act as the world’s leader. Chaos and division at home have damaged its prestige. China’s secrecy and bullying have confirmed that it is unwilling—and unfit—to pick up the mantle. Around the world, public opinion is shifting away from globalisation. People have been disturbed to find that their health depends on a brawl to import protective equipment and on the migrant workers who work in care homes and harvest crops. This is just the start. Although the flow of information is largely free outside China, the movement of people, goods and capital is not. Consider people first. The Trump administration is proposing to curtail immigration further, arguing that jobs should go to Americans instead. Other countries are likely to follow. Travel is restricted, limiting the scope to find work, inspect plants and drum up
orders. Some 90% of people live in countries with largely closed borders. Many governments will open up only to countries with similar health protocols: one such “travel bubble” is mooted to include Australia and New Zealand and, perhaps, Taiwan and Singapore (see article). The industry is signalling that the disruption to travel will be lasting. Airbus has cut production by a third and Emirates, a symbol of globalisation, expects no recovery until 2022. Trade will suffer as countries abandon the idea that firms and goods are treated equally regardless of where they come from. Governments and central banks are asking taxpayers to underwrite national firms through their stimulus packages, creating a huge and ongoing incentive to favour them. And the push to bring supply chains back home in the name of resilience is accelerating. On May 12th Narendra Modi, India’s prime minister, told the nation that a new era of economic self-reliance has begun. Japan’s covid-19 stimulus includes subsidies for firms that repatriate factories; European
Union officials talk of “strategic autonomy” and are creating a fund to buy stakes in firms. America is urging Intel to build plants at home. Digital trade is thriving but its scale is still modest. The sales abroad of Amazon, Apple, Facebook and Microsoft are equivalent to just 1.3% of world exports. The flow of capital is also suffering, as long-term investment sinks. Chinese venture-capital investment in America dropped to $400m in the first quarter of this year, 60% below its level two years ago. Multinational firms may cut their cross-border investment by a third this year. America has just instructed its main federal pension fund to stop buying Chinese shares, and so far this year countries representing 59% of world GDP have tightened their rules on foreign investment. As governments try to pay down their new debts by taxing firms and investors, some countries may be tempted to further restrict the flow of capital across borders. It’s lonely out there Don’t be fooled that a trading system with an unstable web of national controls will be more humane or safer. Poorer countries will find it harder to catch up and, in the rich world, life will be more expensive and less free. The way to make supply chains more resilient is not to domesticate them, which concentrates risk and forfeits economies of scale, but to diversify them. Moreover, a fractured world will make solving global problems harder, including finding a vaccine and securing an economic recovery. Tragically, this logic is no longer fashionable. Those three body-blows have so wounded the open system of trade that the powerful arguments in its favour are being neglected. Wave goodbye to the greatest era of globalisation—and worry about what is going to take its place.
Monday 08 June 2020
BUSINESS DAY
27
In Association With
Dragon strike
China has launched rule by fear in Hong Kong The rest of the world should worry, too
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HE PEOPLE of Hong Kong want two things: to choose how they are governed, and to be subject to the rule of law. The Chinese Communist Party finds both ideas so frightening that many expected it to send troops to crush last year’s vast protests in Hong Kong. Instead, it bided its time. Now, with the world distracted by covid-19 and mass protests difficult because of social distancing, it has chosen a quieter way to show who’s boss. That threatens a broader reckoning with the world— and not just over Hong Kong, but also over the South China Sea and Taiwan. On May 21st China declared, in effect, that Hong Kongers deemed to pose a threat to the party will become subject to the party’s wrath. A new security law, written in Beijing, will create still-to-be defined crimes of subversion and secession, terms used elsewhere in China to lock up dissidents, including Uighurs and Tibetans. Hong Kong will have no say in drafting the law, which will let China station its secret police there. The message is clear. Rule by fear is about to begin. This is the most flagrant violation yet of the principle of “one country, two systems”. When the British colony was handed back to China in 1997, China agreed that Hong Kong would enjoy a “high degree of autonomy”, including impartial courts and free speech. Many Hong Kongers are outraged (see article). Some investors are scared, too. The territory’s stockmarket fell by 5.6% on May 22nd, its biggest drop in five years. Hong Kong is a
global commercial hub not only because it is situated next to the Chinese mainland, but also because it enjoys the rule of law. Business disputes are settled impartially, by rules that are known in advance. If China’s unaccountable enforcers are free to impose the party’s whims in Hong Kong, it will be a less attractive place for global firms to operate. China’s move also has implications far beyond Hong Kong. “One country, two systems” was supposed to be a model for Taiwan, a democratic island of 24m that China also sees as its own. The aim was to show that reunification with the motherland need not mean losing one’s liberty. Under President Xi Jinping, China seems to have tired of this charade. Increasingly, it is making bare-knuckle threats instead. The reelection in January of a China-sceptic Taiwanese president, Tsai Ing-wen, will have convinced China’s rulers that the chances of a peaceful reunification are vanishingly small. On May 22nd, at the opening of China’s rubber-stamp
parliament, the prime minister, Li Keqiang, ominously cut the word “peaceful” from his ritual reference to reunification. China has stepped up war games around Taiwan and its nationalists have been braying online for an invasion. China is at odds with other countries, too. In its building of island fortresses in the South China Sea, it ignores both international law and the claims of smaller neighbours. This week hundreds, perhaps thousands of Chinese troops crossed China’s disputed border with India in the Himalayas. Minor scuffles along this frontier are common, but the latest incursion came as a state-owned Chinese paper asserted new claims to land that its nuclear-armed neighbour deems Indian (see article). And, as a sombre backdrop to all this, relations with the United States are worse than they have been in decades, poisoning everything from trade and investment to scientific collaboration. However much all the regional
muscle-flexing appals the world, it makes sense to the Chinese Communist Party. In Hong Kong the party wants to stop a “colour revolution”, which it thinks could bring democrats to power there despite China’s best efforts to rig the system. If eroding Hong Kong’s freedoms causes economic damage, so be it, party bigwigs reason. The territory is still an important place for Chinese firms to raise international capital, especially since the SinoAmerican feud makes it harder and riskier for them to do so in New York. But Hong Kong’s GDP is equivalent to only 3% of mainland China’s now, down from more than 18% in 1997, because the mainland’s economy has grown 15-fold since then. China’s rulers assume that multinational firms and banks will keep a base in Hong Kong, simply to be near the vast Chinese market. They are probably right. The simple picture that President Donald Trump paints of America and China locked in confrontation suits China’s rulers well. The party thinks that the balance of power is shifting in China’s favour. Mr Trump’s insults feed Chinese nationalist anger, which the party is delighted to exploit—just as it does any tensions between America and its allies. It portrays the democracy movement in Hong Kong as an American plot. That is absurd, but it helps explain many mainlanders’ scorn for Hong Kong’s protesters. The rest of the world should stand up to China’s bullying. On the SinoIndian border, the two sides should talk more to avoid miscalculations, as their leaders promised to in 2018. China should realise that, if it tries the
tactics it has used in the South China Sea, building structures on disputed ground and daring others to push back, it will be viewed with greater distrust by all its neighbours. In the case of Taiwan China faces a powerful deterrent: a suggestion in American law that America might come to Taiwan’s aid were the island to be attacked. There is a growing risk that a cocksure China may decide to put that to the test. America should make clear that doing so would be extremely dangerous. America’s allies should echo that, loudly. Hong Kong’s options are bleaker. The Hong Kong Policy Act requires America to certify annually that the territory should in trade and other matters be treated as separate from China. This week the secretary of state, Mike Pompeo, declared that “facts on the ground” show Hong Kong is no longer autonomous. This allows America to slap tariffs on the territory’s exports, as it already does to those from the mainland. That is a powerful weapon, but the scope for miscalculation is vast, potentially harming Hong Kongers and driving out global firms and banks. It would be better, as the law also proposes, to impose sanctions on officials who abuse human rights in Hong Kong. Also, Britain should grant full residency rights to the hundreds of thousands of Hong Kongers who hold a kind of second-class British passport—much as Ms Tsai this week opened Taiwan’s door to Hong Kong citizens. None of this will stop China from imposing its will on Hong Kong. The party’s interests always trump the people’s.
No-frills education
Trust, slavery and the African School of Economics Leonard Wantchekon is trying to build a world-class university in Benin
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S LEONARD WANTCHEKON was having breakfast with his wife, Catherine Kossou, in 2007, she recalled how one friend could not trust anyone. Even as a child her friend would say: “That person is going to sell you,” or “He will make you disappear.” The words struck a chord with Mr Wantchekon. Now a professor at Princeton University, he was born in Zagnanado in central Benin. Some of the music he listened to in his youth—such as that of Orchestre Poly-Rythmo de Cotonou—had songs that warned against trusting those close to you. He wondered: “Does this have something to do with slavery?” Benin was a hub of the slave trade. More than 1m people were trafficked from the interior to the port of Ouidah, and then to America, Brazil or the Caribbean. Alongside Nathan Nunn of Harvard University, Mr Wantchekon looked for a relationship between the intensity of the slave trade and low levels of trust (and thus commerce). He found one. The resulting article is
in the top 1% of most-cited economics papers. The story of the paper has broader relevance, explains Mr Wantchekon (pictured). It was his data-mining skills that helped him find the answer. But it was his Beninese background that raised the question. Mr Wantchekon is one of just a few African economists at elite Western universities. Most scholarship about Africa is done by academics www.businessday.ng
who are neither African-born nor based in Africa. Influential development journals have few African scholars on their boards. Most major conferences about Africa do not take place there. The imbalance is partly a result of bias in overseas universities. But it is also because of conditions at African ones. Higher education is not a priority for politicians, who often send their children abroad, or donors, who prefer to fund schools.
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The result is underfunded and overcrowded universities that do not equip enough African graduates with the skills required to get into worldclass doctoral programmes. The consequence is a profound loss, argues Mr Wantchekon. Countless young African intellectuals do not get a fair chance. The world gets a skewed picture of African countries because many of the best researchers come from elsewhere. That may be changing. In 2014 Mr Wantchekon founded the African School of Economics in AbomeyCalavi, Benin. Its aim is to offer African students the highest standards of mathematics and economics teaching, ensuring they can compete with graduates overseas. It is refreshingly drab, with no splurging on a flashy campus or needless technology. The 100 or so students pay $2,400 per year, about the same as at a public university. “This is not about doing something grandiose,” says Mr Wantchekon. It is a model that can be replicated. Another campus was opened this @Businessdayng
year in Ivory Coast. The school draws on several influences. The name nods to the London School of Economics. Princeton is one of more than a dozen “academic partners”. But another institution serves as an inspiration, too.
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Monday 08 June 2020
BUSINESS DAY
abujacitybusiness Comprehensive coverage of Nation’s capital
More insurgents surrender as troops sustain onslaught in Northeast Godsgift Onyedinefu, Abuja
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igerian military said more insurgents have surrendered to it’s troops of Operation Lafiya Dole while scores have been killed following sustained artillery bombardments and ground assaults against Boko Haram/ISWAP Terrorists hideouts in North East. John Enenche, Coordinator, Defence Media Operations who made this known in a statement said terrorists namely; Mohammed Babagana, Modu Jugudun and Alhaji Usman surrendered to troops of Delta Company in Borno State. “The trio confessed to having escaped from their Boko Haram Camp in Dabulari Village, Bama LGA of Borno State after a heavy artillery bombardment of the Camp
by troops that led to the death of many of their erstwhile colleagues. During interrogation, they confessed regretting their actions and called on their former colleagues to give up the struggle and save themselves from unprofitable death,” the Co-ordinator said. He also disclosed that on 3 June, troops of Army Super Camp 6 Konduga, Borno State in conjunction with Borno State Civilian Joint Task Force, conducted a deliberate ambush operation against the terrorists at Lawanti River line and killed 6 of them. Enenche also said on 2 June, the combined troops of 19 Brigade and 401 Special Forces Brigade conducted a robust clearance operation at Doron Naira and Magaji which resulted in the neutralisation of 9 terrorists.
COVID-19: NAHCON awaits Saudi official decision on Hajj 2020 James Kwen, Abuja
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he Chairman / Chief Executive Officer of National Hajj Commission of Nigeria (NAHCON), Zikrullah Hassan said the Commission is still waiting for the Kingdom of Saudi Arabia to make an official decision on the 2020 Hajj pilgrimage before making its own, in the face COVID-19 pandemic. The CEO spoke at a seminar hosted by Association of Hajj and Umrah Operators of Nigeria (NAHCON) via Zoom Video Conference on the topic “The Future of Hajj and Umrah operations
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he Nigerian military said its troops of Operation Katsina has killed 392 bandits in Northwest and Northcentral as bandits fleeing military onslaught in these regions resorted to reprisal attacks on civilian targets. John Enenche, Coordinator Defence Media Operations DMO, who disclosed this while giving an update on military operations for 28th May - 4th June, however announced the launch of Operation Accord to tackle inter-state movement of bandits and consequent attacks on civilians. “Operation Accord was preemptively planned by the High Command of the Armed Forces of Nigeria to handle this situation. In this regard, the
... To upgrade, rehabilitate 12 health facilities James Kwen, Abuja
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he Federal Capital Territory Administration (FCTA) has expressed determination to complete renovation of 12 Primary Health Centres (PHC) before the end of this year. FCTA also indicated interest to upgrade six Primary Health Clinics to PHCs and rehabilitate six additional PHCs across the six Area Councils of the Territory. FCT Minister of State, Ramatu Aliyu disclosed this at the flag off of sensitization workshop of key stakeholders for the establishment of the community primary healthcare management
system in Abuja. Aliyu said integrated healthcare delivery system was key to socio economic development and progress of any nation, just as she emphasized active community participation in healthcare delivery. The Minister who was represented by her Senior Special Assistant on Administration and Strategy, Muhammad Usman, stated that the FCT Administration within a year has made progress towards revitalization of the primary healthcare scheme and linked residents to services. The Minister who acknowledged that FCTA was aware of the deplorable state of primary healthcare in-
frastructures and the enormous amount of money required to rehabilitate them, however assured that a phased approach to fix them would be adopted. “Health which is a fundamental human right, requires PHC approach which allows for Integrated care comprising preventive, promotive, curative and rehabilitative services extending from “womb to tomb”. It is the first point of contact with the National Health System and a key to socio economic development and progress of a country. As a matter of fact, Universal Health Coverage cannot be achieved without the involvement of the local community. “The FCTA within a year,
has progressed towards revitalizing the PHC scheme and linking residents to services. To strengthen PHC leadership and governance, the administration approved the implementation of the FCT PHCB Act, 2019 and soon the FCT PHCB with the Area Councils PHC Governance structures would be established in line with the Act. “In the area of PHC infrastructure to expand physical access services, we are aware of the deplorable state of our PHC infrastructure and the enormous amount of money required to rehabilitate them. That is why we are adopting a phased approach to fix the problems”, Aliyu added.
After the Pandemic”. Hassan who was the Lead Discussant acknowledged the economic impact of the Covid-19 on Hajj in Nigeria, alternative action or activities that can be undertaken by Muslims that had plans to perform this year’s Hajj in the face of global lockdown and expressed the optimism that the 2020 Hajj could still hold in spite of the fear and uncertainty due to the Coronavirus. He highlighted some of the heartwarming factors to include, the recent reopening of the mosques for prayers and easing of lockdown across the country.
Military launches operation to tackle inter-state movement of bandits, kills 392 Godsgift Onyedinefu, Abuja
FCTA completes renovation of 12 Primary Health Centres this year
Chief of Defence Staff ordered the commencement of Operation ACCORD from 1 June 2020”, the Coordinator said. Enenche explained that Operation Accord is a concomitant operation by all the theatres of operations in the North West and North Central regions of the Country targeted at tackling banditry and other criminal activities. Enenche also said Nigerian ArmedForcesandothersecurity agencies in the Northeast have been on the offensive against the terrorists mainly through the Land and Air components of Operation Lafiya Dole. According to him, the significant feats achieved in this theatre include killing of key BHT/ISWAP commanders, destruction of their logistics bases and cutting off their supply routes. www.businessday.ng
Muhammad Musa Bello (r), FCT minister, welcoming Tajudeen Adigun (m), chairman, Fct League of Imams Initiative, and Samson Jonah, chairman, Fct Christian Association of Nigeria, to the meeting on the re-opening of places of worship in the FCT.
Olam Nigeria set to deepen local rice production to curb post COVID-19 food crisis Cynthia Egboboh, Abuja
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lam Nigeria has disclosed plans to ramp up local rice production through it’s over 5000 hectare, fully mechanized large-scale rice farm in Nigeria. Emmanuel OkolobiOkolobi, Olam Farm Manager in a statement said the Farm is ready to commence a massive agrarian drive in a bid to save Nigeria from the effects of a post Covid-19 food crisis. “It will be recalled that President Muhammadu Buhari urged Nigerian farmers to embark on massive food production this farming season as in his words, Nigeria must produce what it eats.
“In furtherance of this resolve by the President, Olam Nigeria is pledging to continue its support in the fight to ensure food security and helping the country reduce its food imports by ramping up Rice production through it’s over 5000 hectare, fully mechanized large-scale rice farm that produces 2 crops a year for the Nigerian market”, Okolobi-Okolobi said. He further explained that the farm which has an integrated rice mill with a production capacity of 120,000 tonnes is committed to producing only local and home grown quality rice with the variants of Mama’s Pride and Mama’s Choice. “Olam is working with
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more than 20,000 direct Outgrower famers and sensitizing more farmers to plant Rice and handholding them with training and inputs in 5 states of Nigeria. “In addition, Olam participates across the country as the biggest off taker of paddy rice from Nigerian farmers impacting livelihoods of more than 100,000 farmers directly and indirectly”, he stated. The Manager noted that Olam Rice Farm and Mill in Rukubi, Nasarawa State in effort to fulfil its Social corporate responsibility has created both direct and indirect employment to the tune of 2500 people, thereby helping the local community survive and enriching the farmers around @Businessdayng
and within the environs. “We must not forget that the COVID-19 pandemic is arguably the biggest challenge facing humanity today. It is ravaging not only Nigeria but the global economy. “As part of the efforts to support Nigeria’s fight against Covid-19, Olam has successfully given palliatives to host communities, embarked on enlightenment and educational campaigns in form of radio and tv jingles in local languages to stress the need for social distancing , wearing of masks as well as hands washing whilst ensuring they are all in line with Covid-19 protocols as espoused by WHO and NCDC”, OkolobiOkolobi added.
Monday 08 June 2020
BUSINESS DAY
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news
Agusto affirms Coronation Merchant Bank’s rating at A+ with Stable Outlook
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oronation Merchant Bank remains one of the top rated merchant banks in Nigeria as shown by the recently released Rating Report by Agusto & Co, a rating agency in Nigeria. In the report, Agusto affirmed the A+ rating assigned to the bank with stable outlook, and stated that the rating reflectted the bank’s position in the merchant banking space, good capitalisation, good asset quality and good liquidity position. In preparing the report, the agency took into cognisance the impact of the COVID-19 pandemic, which has led to severe uncertainty surrounding the Nigerian economy. A review of the bank’s financial performance showed that as at December 31, 2019, the bank’s gross loans and advances stood at N72.7 billion, representing a year-on-year increase of 33.9%. As at FYE
2019, the bank did not record any credit deterioration with the entire credit portfolio classified under stage 1. Core capital grew by 6.3% to N33.7 billion as at FYE 2019, more than double the regulatory minimum for merchant banks operating in Nigeria. As at the same date, the bank’s capital adequacy ratio stood at 19.2% surpassing the 10% regulatory threshold. As at March 2020, Coronation MB had about $310 million in trade finance lines including a $40 million trade finance guarantee facility obtained from the International Finance Corporation (IFC). The bank’s intended five-year bond is also expected to support funding stability. Overall, the rating agency is of the opinion that the bank is adequately positioned to grow business volumes, albeit moderated by the prevailing economic conditions.
Nigeria restates commitment to OPEC+ oil production cut resolutions HARRISON EDEH, Abuja
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he Federal Government of Nigeria has restated its commitment to the April 2020 oil production cut agreement by OPEC+ members. Timipre Sylva, minister of state for petroleum resources, who stated government’s position, said oil producing countries under the aegis of OPEC+ had in April 2020 resolved to reduce daily output by a cut of 9.7mb/d. The move, he explained, is aimed at halting a further drop in the global price of crude oil as a result of the coronavirus pandemic. According to NNPC data, Nigeria in the month
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Onyinye Nwachukwu, Abuja
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he Bureau of the Board of Governors of the African Development Bank (AfDB) has authorised an Independent Review of the Report of the Ethics Committee of the Boards of Directors, which earlier cleared the president of the bank, Akinwumi Adesina, of any wrong-doing in allegations against him. The decision was taken at the meeting of the Bureau Thursday regarding the whistle-blowers’ complaints against Adesina, who had repeatedly said the 16 allegations levelled against him were “false, had no facts and not evidence-based.” In a communiqué after the meeting, the Bureau of Board of Governors - the highest decisionmaking organ of the bank - agreed that the Ethics Committee of the Boards of Directors performed its role on the matter in accordance with the rules of the bank but that the review was to accommodate
some views of some governors and the need to carry everyone along in resolving the issues. The decision, many say, does not align with the position of the United States government which had called for a fresh “in-depth investigation of the allegations.” The communiqué, which was signed by the chairperson of the Bureau of the Boards of Governors,NialeKaba,read:“The Bureau reiterates that it agrees that the Ethics Committee of the Boards of Directors performed its role on this matter in accordance with the applicable rule under Resolution B/BG/2008/11 of the Board of Governors. “The Bureau also reiterates that the Chairperson of the Bureau of the Board of Governors performed her role in accepting the findings of the Ethics Committeeinaccordancewiththesaid Resolution. “However, based on the views of some Governors on the matter and the need to carry every Governor along in resolving it,
the Bureau agrees to authorize an Independent Review of the Report of the Ethics Committee of the Boards of Directors relative to the allegations considered by the Ethics Committee and the submissions made by the President of the Bank Group thereto in the interest of due process. “The Independent Review shall be conducted by a neutral high calibre individual with unquestionable experience, high international reputation and integrity within a short time period of not more than two to four weeksmaximum,takingtheBank Group’s electoral calendar into account. “TheBureauagreesthat,within a three to six month period and following the independent review of the Ethics Committee Report, an independent comprehensive review of the implementation of the Bank Group’s Whistle-Blowing and Complaints Handling Policy should be conducted with a view to ensuring that the Policy is properly implemented, and
revising it where necessary, to avoid situations of this nature in the future.” According to a source at the bank that spoke with BusinessDay, the decision of the bank’s boardofgovernorsdoesnotmean a fresh probe but is to ensure that the ethics committee did the right thing in their earlier investigation of Adesina. “The Bureau stands by the ethics report, but wants a review of the process just to ensure that due process was followed. “It is just to erase fears by some members. Outright dismissal of the demands of some of these shareholders may not be the best. This appears like a diplomatic ‘solution’ to please all,” he said. Nigerian President Muhammadu Buhari had on Tuesday pledged support for Adesina, assuring he would work with all African leaders and stakeholders of the bank to mobilise support for Adesina’s re-election on the premise that he “had done well” and deserved a another term.
of May reduced its production to 1.613mbd as against the1.829mb/d originally earmarked, representing a compliance rate of about 52%. The Ministry of Petroleum noted in a statement at the weekend that the percentage of compliance was however opposed to the 19% reported by Thompson Reuters, adding, “It is instructive to note that the Agbami and Akpo figures reported by Thompson Reuters are classified as condensates, and as such, are excluded for quota determination.” It stated emphatically that Nigeria’s current daily production is below the commitment level of 1.412mb/d, which consequently will translate to full compliance by the end of June, 2020.
AXA Mansard commits to environmental protection, celebrates World Environment Day XA Mansard Insurance plc, a member of AXA, a worldwide leader in insurance and asset management, has announced its commitment to promote environmental protection awareness as it joins the world to celebrate World Environment Day. World Environment Day is celebrated June 5, every year. The theme for this year’s celebration is, ‘Time for Nature,’ with a focus on its role in providing the essential infrastructure that supports life on Earth and human development. In his statement, Kunle Ahmed, CEO AXA Mansard Insurance plc, said, “At AXA Mansard, we aim to reduce the environmental impact of our operations through the management of energy, paper and water consumption as well as reducing our overall emissions and waste. “AXA Mansard therefore reiterates its commitment to: Reduce our energy con-
AfDB Board of Governors authorises review of ethics committee report on Adesina
sumption through a focus on energy efficiency solutions that optimize the usage in our buildings. “Reduce our office paper consumption and minimize the use of paper for our marketing and distribution activities whenever allowed by local requirements and regulators. “Reduce our water consumption in all AXA Mansard’s facilities and reduce the emissions derived from our business travel by minimizing the number of long-distance trips of our employees, stimulating the use of alternative means of communication. “S e e k s u p p l i e r s t h at support us in this journey through their solutions and business practices following the guidelines set in our Responsible Procurement Strategy.” To support the implementation of these commitments, AXA Group has developed specific policies and guidelines applicable to the whole Group. www.businessday.ng
L-R: Samson Jonah, chairman, Christian Association of Nigeria, Federal Capital Territory (FCT); Tajudeen Adigun, chairman, league of Imams Initiative, FCT, and Muhammad Bello, minister, FCT, during a meeting on the reopening of places of worship in FCT Abuja.
We will sustain attention to road infrastructure in Delta - Okowa Francis Sadhere, Warri, & Mercy Enoch
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overnor Ifeanyi Okowa of Delta State last Thursday restated the importance of roads connectivity to economic development of the state, saying in spite of prevailing coronavirus pandemic, governance and infrastructural development of the state would be sustained. The governor made this known while speaking with newsmen shortly after inspecting the AlihamiAgbor-Nta-Oki road in Ika South Local Government Area, Owanta Erosion Control and road project, and Federal Road Safety Corps (FRSC) Training School, OwaOyibu in Ika North East Local Government Area. He said connecting the state with roads and bridges would ensure economic growth of communities, and assured Deltans of his administration’s commitment to executing projects that would impact on the people. Okowa, who was conducted
round the projects by the commissioner for environment, Chris Onogba, and his housing counterpart, Festus Ochonogor, said, “We will continue to execute programmes and projects that will make our people to be prosperous. “In spite of the COVID-19 and the slowdown of so many things we are doing as a state, there was the need to go down and check the things that we intend to continue in the next few weeks. “I first visited the Alihami-Agbor-Nta-Oki road; it was a surprised visit and the contractor himself was not on site but the workers were on site and it afforded me the opportunity to have first-hand knowledge of level of work being done; a lot of drainage work has been done and some sections of the road have been stone-based. “That road is very important because when it is completed to Edo State junction, it means that those going to Jesse, Oghara and Sapele axiswillhaveamuchfasterrouteand thatisverygoodforusandourpeople
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because it connects Delta with a sectionofvillagesthatareactuallyinEdo, and then to the Jesse end. “The road interconnectivity is good for commerce and economic development of the benefiting communities and we will continue to construct as many roads as our finances can enable us.” On the Owanta gully erosion and road project, the governor said before now, the place was terrible as several homes had been lost to the erosion, but expressed optimism that with the work being done now, several homes had been saved. “It is actually a project of Delta State with the World Bank. This is one of the five sites in Delta and the contractor, Levante Construction, is doing well. We are happy with the work being done and he has assured us that even through the rain they will continue working to ensure that a lot of homes are saved. “We are in the process of awarding contracts for other erosion control projects in the state,’’ he said. @Businessdayng
He said the FRSC training school was a collaborative project between the state and the agency. “It is a partnership between the state and the Federal Road Safety Corps because we believe that the school will have an impact on the economy of this area. We are providing the buildings; they will provide other needed infrastructure and provide the staffing to enable the school take off. “Right from the lockdown, we allowed some contractors to return to site with strict adherence to the NCDC protocols and that was why we allowed the erosion control project to continue because it could have been very devastating but am glad that the contractors are on course and they have assured me they will continue to work throughout the rains,’’ the governor said. On COVID-19, he said Delta’s confirmed cases had risen to 106, adding that the numbers were restricted to certain local government areas while the state was monitoring the development.
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Lack of KYC, BVN impede access to CBN’s N50bn COVID-19 fund ... only N4.1bn disbursed to 5,868 ... Organisations engage applicants on easy access Hope Moses-Ashike (Lagos) & Onyinye Nwachukwu (Abuja)
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he N50 billion Targeted Credit Facility for households and Small and Medium Enterprises (SMEs) introduced in March 2020 by the Central Bank of Nigeria (CBN) has been poorly accessed so far. The low access to the fund released as a stimulus package to mitigate the impact of COVID-19 is attributed to low adoption of Bank Verification Number (BVN) and poor Know Your Customer (KYC). The CBN in March set up the N50bn facility to be disbursed at single digits through the NIRSAL Microfinance Bank for households and small- and medium-
sized enterprises (SMEs) that would be particularly hard hit by COVID-19, including hoteliers, airline service providers, healthcare merchants, among others. Godwin Emefiele, governor of the CBN, said at the last Monetary Policy Committee (MPC) meeting on May 28, 2020 that the apex bank has approved N10.9 billion to 14,331 beneficiaries under the N50 billion Targeted Credit Facility for households and SMEs, out of which N4.1 billion has been disbursed to 5,868 successful beneficiaries. “I think it is too low considering that the impact of COVID-19 is now being felt especially by businesses and households,” Bunmi Lawson, managing director/
CEO, EdFin Microfinance Bank Limited, said. Lawson was concerned that the economy is not digitalised as much as possible for people at the bottom of the pyramid. She was also worried that some of these people do not have BVN and that KYC should be able to identify those who have applied two or three times. Lawson said if everybody has the National Identity Number which could be linked to BVN and credit bureau, it would help to ensure that the people who applied for the facility actually need the money and can be traced in case of default. “This really highlights why government needs to push for financial inclusion at the bottom of the pyra-
mid. They need to make the process transparent, even the ones that have been disbursed,” she told BusinessDay on phone. However, some organisations are engaging businesses on how to access the CBN facility through webinar series. For instance, EdFin MFB, with special focus on education, has been engaging with school owners on how to assist them access the CBN intervention fund. “As part of our plans to help our customers mitigate the impact of COVID-19 pandemic, we have scheduled a webinar for all our school owners to help them access the NIRSAL CBN Intervention Funds for COVID-19,” Lawson said.
Edo guber: APC chieftain asks Buhari, Tinubu to stop Oshiomhole’s impunity …Obaseki says academic certificates intact, bans direct primary JAMES KWEN (Abuja), IDRIS UMAR MOMOH, CHURCHILL OKORO (Benin) & INIOBONG IWOK (Lagos)
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ioneer deputy national auditor of the All Progressives Congress (APC), Muhammad Bala Jibrin, has called on President Muhammadu Buhari, Bola Tinubu (the party’s national leader), and all other well-meaning leaders of APC to come out and condemn the acts of impunity by Adams Oshiomhole, the party’s national chairman, and save the party from imminent collapse. The call is coming amid disagreement over the mode of primary election to be adopted by the party at its governorship primary election in Edo State scheduled for June 22. Godwin Obaseki, the incumbent governor, is seeking re-election for a second term in office, but a faction of the party, apparently backed by Oshiomhole, is making getting his party’s return ticket an uphill task. While Oshiomhole, in a letter to the Independent National Electoral Commission
(INEC) dated May 19, 2020, had said the party would use direct primary to select its candidate, Anselm Ojezua, state chairman of the party, said the party’s State Working Committee chose indirect primary and that the National Executive Council of the party had said each state was at liberty to adopt any method of preference. Political analysts believe that indirect primary election would enhance Obaseki’s chances of securing the APC ticket for the September 19 Edo governorship election, though the governor has said he would emerge as APC candidate irrespective of the mode of primary election adopted. But Jibrin, in a statement made available to journalists in Abuja, railed against Oshiomhole’s actions, saying the national chairman is engaged in not only abuse of office but is trampling on the APC Constitution simply to perpetuate impunity and injustice just because he holds the office of national chairman. He lamented that Osh-
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Dollar inflows seen eluding Nigeria as EM currencies rally BALA AUGIE
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Ifeanyi Okowa (m), governor, Delta State; Sadiya Umar-Farouq (l), minister of humanitarian affairs, disaster management and social development, and Festus Keyamo (r), minister of state for labour and employment, during the visit of a presidential delegation to assess the impact of the recent early morning inferno that engulfed Ogbeogonogo Market in Asaba.
Rental market in delicate balance as landlords receive requests for rent relief, extension … experts say commercial, residential properties at risk of rent default from August CHUKA UROKO & ENDURANCE OKAFOR
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he rental market in Nigeria is in a delicate balance as COVID-19 takes toll on individual, household and organisation incomes, leading to tenants requesting for rents relief or extension from their landlords who are equally impacted by the deadly virus. These requests cut across the various segments of real estate, particularly residential, commercial office space and retail facilities, raising concerns among investors and
close watchers of the market as to the future of the market. What this means is that in the days and months to come, apart from the frosty relationship that may arise between landlords and their tenants, rental properties will suffer from lack of maintenance and sustainability. Again, new investments in build-to-let or buy-to-let properties will drop significantly. “These are unprecedented times and, in the industry, we need to put aside personal conveniences and come together for the greater good,” Paul Onwuanibe, CEO, Landwww.businessday.ng
mark Group, told BusinessDay. “At Landmark, we are engaging with all our tenants with a cocktail of relief options ranging from rent-free months, flexible payment plans, lease extensions and reduced escalations.” Landmark Group is the developer of the expansive Landmark Village which is a destination for living, working and leisure. Onwuanibe said that “consideration for rent-free period depends on the tenant sector. Some get one month while some two months. We can’t afford three months.”
Ayo Ibaru, COO/director, real estate research at Northcourt, also confirmed to BusinessDay that based on request, a few property owners are beginning to work out softer payment methods for their tenants. He said for commercial properties, some landlords have stopped rent collection for a few months. “These landlords are agreeing to collect same in the nottoo-distant future. They are also willing to discuss extended payment terms,” he said, adding that some property owners are accepting smaller part-payments than usual.
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weaker dollar will not provide a fresh spur to Nigeria because a nebulous exchange rate system and fiscal deficits discourage investors from investing in naira assets. The United States (US) currency has lost latitude versus other countries, especially the euro, as investors brush off political instability and pin their hope on an economic recovery with countries relaxing lockdowns. Any gain for the euro against the dollar ends up making developing nations more competitive in global trade against the euro zone. Put another way, it enables emerging-market currencies to appreciate against the dollar while maintaining some of their previous competitiveness. The broader recovery in risk sentiment or rising risk appetite is paving the way for global equities outside the US to play catch-up with the S&P 500. When the US dollar weakens, it is gradually accompanied by stronger commodities prices which boost growth in trade and trade surplus for commodity exporters. But the multiple exchange rates adopted by the Central Bank of Nigeria (CBN), fol@Businessdayng
lowing the 2014 crude oil price collapse that depleted the external reserves, and harsh operating environment have stoked capital flight in the last five years, hence undermining inflows of foreign direct investment into the country. Offshore investors are more concerned about their ability to repatriate foreign exchange proceeds, but lack of transformation policy on the part of the present administration has stoked investor apathy towards the equity market. Gbolahan Ologunro, equity research analyst at CSL Stockbrokers Limited, said investors prefer emerging-market countries to Nigeria because of their exchange rate framework and lower vulnerability to macroeconomic shocks. He said there won’t be surge in dollar inflows due to clumsy rates and that the country may not see a surge like in 2017 when the CBN introduced the Importers and Exporters’ forex window. “The inflow will not translate into increase in appreciation for local currencies,” said Ologunro. Wale Okunrinboye, equity research analyst at Sigma Pensions Limited, said investors are struggling to pull between $1.5 billion and $2 billion out of the country.
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news FG to spend N2.3trn to fund its Economic... Continued from page 1
President Muhammadu Buhari described as “our most exacting yet” was de-
veloped in response to the ongoing global economic and health crises which have taken a toll on the economy. According to the plan obtained by BusinessDay, the chunk of the stimulus, as much as N471 billion, will go to the agricultural sector with the objective of expanding existing production in the agricultural sector and stimulating establishment of new farms in partnership with state governments, the private sector and individual citizens. “The intention is for the project to create jobs by focusing on increasing land under cultivation with state governments contributing between 20,000 to 100,000 hectares from a combination of aggregated smallholder farms between 1 acre to 1 hectare and utilisation of abandoned states farm settlements and agricultural projects,” the document said. The plan also shows that the sector getting the next huge boost is small businesses in three tracks. The first track is to guarantee offtake scheme for MSMES, survival and intervention fund in the amount of over N415 billion. The plan is big on mass agricultural programme Nigerians are already familiar with. It also seeks to stimulate growth through major and rural road construction programme, mass housing programme and large scale installation of solar home systems in a minimum of 5 million households currently not on the grid. “The strategy is to ensure that all these programmes use only local materials,” the document said. The government says its role is to be the provider or facilitator of resources for private sector programmes, and ultimately to be the guarantor of last resort of what is produced. “This means that government must help to guarantee
uptake for work done, houses built, or goods produced,” the plan said. On how the programme will work, the document says, for example, that “for roads, where we cannot afford to import bitumen or asphalt with our scarce resources, we have to use limestone and rocks in abundance. So all roads, especially the roads to be built with pension fund investments, must use locally produced materials.” The same principle is to be appliedinthemasshousingprogrammes where local materials and labour only will be used. However, it will make some exemption in the offgrid energy space allowing for ‘minimal imports’ to provide solar power for 5 million households. “There are indications that some of the world’s leading manufacturers are prepared to set up manufacturing locally. With a plan for 5 million homes to be delivered by the private sector, this can be attractive to the manufacturers,” the government report said. It further said that the plan will entail massive support for MSMEs in local production technology, agro-allied valuechains, garment production, information and communication technology, entertainment, tourism, etc. “Insteadoftheprospectof30 million unemployed Nigerians staring us in the face, we can put 30 million Nigerians to work immediately. The principal challenge of our economy is implementation. This also means coordination. We can mobilise Nigeria behind MSMEs and insist on local production, especially in the agro-allied valuechain,” the report said. The final plank of the plan is the social investment programme where it is proposing a one-off cash payment of a minimum of N10,000 to at least 30 million Nigerians, and the government will spend over N400 billion on various programmes.
Edo guber: APC chieftain asks Buhari... Continued from page 30
iomhole, in his bid to continue with illegalities and acts of impunity, which he perpetrated on a large scale during the November 2018 APC primary elections, without conscience and sense of fairness and justice wrote a letter to the Independent National Electoral Commission (INEC) that the APC had decided to adopt direct primary for the Edo State APC governorship. Jibrin emphasised that the APC National Executive Committee (NEC), and not the National Working Committee (NWC), has the final say on the mode of primary election as recently done for Edo.
He argued that Article 20 (IV) of APC Constitution states: “Without prejudice to Article 20(ii) and (iii) of this Constitution, the National Working Committee shall subject to the approval of the National Executive Committee make Rules and Regulations for the nomination of candidates through primary elections.” This, Jibrin said, shows that the powers to determine the mode/type of election to be used for the nomination of candidates rest with NEC and not NWC, or at least MUST get the approval of NEC. “So, the truth is that Edo State APC chapter was correct to say that only the NEC has the final say on the matter and not the NWC,” he said. www.businessday.ng
Seyi Makinde (l), governor, Oyo State; Rotimi Akeredolu (r), governor, Ondo State; Aderonke Aderemi (m), new president of Oyo State Customary Court of Appeal, and others, during the swearing-in of the president at Government House, Ibadan.
Nigeria takes another unsteady step towards downstream deregulation … PPPRA removes price cap on petrol but will continue setting prices … FG loses billions in revenue from not taxing petrol OLUSOLA BELLO, ISAAC ANYAOGU & DIPO OLADEHINDE
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he Petroleum Products Pricing Regulatory Agency’s removal of the price cap on Premium Motor Spirit (petrol) may be a step towards deregulation, only that it could be undermined by the agency’s decision to continue setting prices for the commodity. The removal of price cap on a litre of Premium Motor Spirit (PMS) was contained in a market-based pricing regime for the commodity released by PPPRA. According to the regulation signed by Abdulkadir Saidu, executive secretary, PPPRA, the Market-Based Pricing Regime for Premium Motor Spirit (PMS) using the Pricing Template of the PPPRA removes the existing price cap per litre for PMS and institutes a market-based price for the commodity. This seemingly signals a desire to allow the market determine price, but the next paragraph unravels the plan. “The price of Premium Motor Spirit advised by the agency shall be the guiding retail price at which the product shall be sold across the country,” said paragraph 3, section 2 of the regulation dated March 20. Also, in a clarification statement on Sunday, the PPPRA explained that its recently published regulation on official deregulation of petroleum pump price does confer on marketers the power to fix prices for the product as they deem fit, but rather
guiding prices would be advised by the PPPRA according to market realities. The agency said it would monitor market trends and also advise the NNPC and oil marketing companies on the monthly market-based guiding price, which would include the indicative retail price at which the product should be sold across the country. “For the avoidance of doubt, it is instructive to state that no private individual or group has the mandate to fix prices of petroleum products; however, the statutory regulatory body is saddled with the responsibility of advising guiding prices,” said the statement signed by Saidu. Relying on this regulation, the Federal Government claimed it has deregulated the sector, but many in the industry disagree. “This is not really full deregulation,” said Ayodele Oni, energy lawyer and partner at Lagos-based Bloomfield Law firm. It is another step closer to deregulation and at best a partial deregulation, he said. “As long as they have a role to play in pricing, I don’t think it is completely deregulated,” he said. The regulation would suggest that marketers are free to import and sell petrol, but in reality,theireffortswillberuined by Nigeria’s multiple exchange ratewindowswhichcreateprice distortions, hurt businesses and encourage corruption. “A major hurdle oil marketers have to cross is lack of FX liquidity,” Omotola Abimbola, an industry analyst at Chapel Hill, said. “Given the recovery in oil prices in recent days,
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and the FX rate in the more liquid parallel transfer market, it might be unprofitable for marketers to import and retail PMS at current price (N121.50-N125) by Q3 2020.” Abimbola noted that if the NNPC continues to import based on the official FX rate of N360, marketers may continue to rely on NNPC for supply, except the CBN creates a special window for oil marketers to obtain FX at the same rate (back to FX subsidy?). Therefore, industry operators are not excited about the new regulation because in practice, little else has changed. The possibility of attracting investment will be stymied by government price controls. One marketer said that as long as the PPPRA continues to set prices, it cannot be full deregulation. The Nigerian government’s attachment to petrol is stronger than a junkie’s addiction to cheap crack. Though it has burnt over $63 billion on subsidies between 2006 and 2018, it still has no desire to wean itself of this addiction. Gradual recovery of oil prices will test the government’s resolve on deregulation. Apart from the wasteful subsidies, the Nigerian government loses billions in revenue because it does not tax consumption of the product. At the daily consumption rate of 55 million litres per day, according to the regulators, VAT of 7.5 percent on every litre of petrol costing N121.5 will generate over N501 billion in revenue daily, a big boost to a government staring down at a fiscal crisis. @Businessdayng
According to operators, full deregulation includes allowing the market fix prices. This means that marketers will sell based on the cost of buying refined products outside Nigeria, cost of freight and port charges. It demands dismantling systems that aided the subsidy regime, like the Petroleum Equalisation Fund, and the restructuring of the PPPRA which was created to midwife a deregulated downstream sector but has managed to sidestep this function to maintain a tenuous grip on relevance. However, some governments provide a price guidance to protect consumers and in Nigeria, oil marketers have not always been altruistic, which makes a case for government intervention. In 2012, many were sanctioned for fraudulently accepting government payments even though they did not deliver petrol. Dan Kunle, an energy finance expert, said the PPPRA’s action could forestall the formation of a cartel by oil marketers to exploit Nigerians through price manipulation. But providing guidance on prices is not the same as setting prices. The South African government provides guidance using the average price of fuel for the previous month to arrive at new prices because it refines its own petrol. This provides marketers certainty in holding stock. It is not the same in Nigeria. On most days the refineries do not refine enough petrol to power their own generators. So the PPPRA is forced to set prices bench-marking it against international crude oil prices, fraught with volatility.
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Reps want TCN to enforce, prioritise Executive Order on local content … urge new TCN boss to partner key stakeholders to address grid collapse HARRISON EDEH, Abuja
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igeria’s Federal House of Representatives on Friday called on the Transmission Company of Nigeria (TCN) to prioritise Executive Order on local content by ensuring local engineers with capacity were mobilised to be part of jobs in the transmission infrastructure maintenance and management. Magaji Ayua, chairman, House Committee on Power, said this during an oversight visit to the TCN in Abuja, directing the company not to allow donor agencies who assist them with grants to dictate foreign companies to get transmission project contract. “The President has signed the Executive Order on local contenting directing that no project should be giving out to foreign companies without Nigerian content. My committee would look into this critically in adherence to the Presidential Executive Orders. Nigeria is for Nigerians and Nigeria first. “No matter how technical the project is, there could be technical partnership agreement,” he said. He emphasised that nobody would say he would give us loan and dictate to us whom we should give the contract, saying, “We want to bring down unemployment and this is one of the ways we could address that concern.” Speaking further on the oversight visit, he said, “We are basi-
cally here to note four things: First, you have a multi-lateral way of getting funding for the projects you do and through appropriation. We want to know the projects that were done in 2019, how much you got in 2019 in terms of budget releases. “We want to find out how much project was executed in 2019, and how much internally generated revenue, and what are the money used for and which project they were used for. The loans you got and possible grant also and how much was it in 2019 and what was it done with. “We are here to ensure things are done property. We have to commend the TCN, so far you have been doing well but there is also room for improvement.” The complexity of this sector lies in the harmonious relationship of value chain players, he said, adding, “If for instance they said that the TCN has a wheeling capacity or transmission of 10,000 megawatts, while the Discos can only take not more than 3,000 and we are paying for undelivered capacities, then something has to change.” Earlier in his remarks, Sule Abdulaziz, managing director, TCN, whose first official assignment is to host the House of Representatives members, said the immediate focus of the new management would be on replacing existing equipment that were failing and prone to breakdowns.
All On supports Renewvia with $1.2m in rural Bayelsa off-grid electrification project … over 400 households so far connected in Ogbia areas
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ll On, a Shell funded Nigeria off-grid impact investor, has committed $1.2 million or N540 million support to Renewvia Energy Corporation of the US to begin off-grid electrification project in rural Bayelsa communities. Renewvia Energy Corporation (a global solar developer) and All On took effective action on Tuesday, June 2, 2020, when they announced a partnership to electrify rural communities un-served by conventional utilities in the Niger Delta region of Nigeria. The agreement includes a commitment of $1.2 million from All On to enable Renewvia develop and operate solar mini-grids to bring clean energy, and ultimately spur economic development in the region. The first two mini-grids were said to have been commissioned and are operating in the villages of Akipelai and Oloibiri to support the surrounding communities. Renewvia’s mini-grid in Oloibiri will power the new Oloibiri Health for Life Medical Centre (H4LC) and Knowledge Management Institute, one of the hub health facilities funded by the Shell Petroleum Development Company of Nigeria (SPDC) under the flagship Oloibiri Health Programme. The programme is a local government-wide health system strengthening partner-
ship with the Bayelsa State government. It will provide reliable and consistent power at a reasonable cost to enable frontline healthcare workers provide affordable, accessible and quality assured health care to Ogbia communities. Renewvia Energy Corporation is a top 500 Global Solar Developer headquartered in the Atlanta, Ga. It designs, installs, owns and operates commercial and community solar power systems across three continents and provides a complete range of solar energy solutions including turnkey solar installation, integrated financing and solar consulting services. The CEO of Renewvia Energy Corporation, Trey Jarrard, says the corporation is thrilled to partner All On to bring reliable, clean energy to communities who need it most. “We have connected hundreds of households in Akipelai and Oloibiri to our mini-grids, and we expect to see measurable economic benefits for these communities in the near future.” The solar mini-grids in Akipelai and Oloibiri utilize lithium ion battery storage to provide reliable power throughout non daylight hours and are designed to scale as individual and communal power demand increases, without any financial burden to the community. These mini-grids will immediately help over 400 households and multiple small- and medium-businesses scale activities and drive community-level economic growth. www.businessday.ng
Nnamdi Okafor (l), managing director, and Daisy Danjuma, chairman, both of May and Baker Nigeria plc, at the 69th annual general meeting (AGM) of the company in Lagos.
NBS survey shows more jobless Nigerians, poor from impact of Covid-19 … commerce, services, agriculture most hit sectors MICHAEL ANI
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new survey by the NationalBureauofStatistics (NBS) has shown that moreNigerianshavebecome jobless and/or poorer from the economic and health impact of the coronavirus pandemic. Known as the Covid-19 National Longitudinal Phone Survey (Covid19 NLPS), the survey captures responses from 1,950 households aimed at tracking and monitoring the impact of the pandemic on health and livelihood of Nigerians. It is
the first of its kind, conducted between April 20 and May 11 this year in collaboration with the World Bank and the Living Standards Measurement Study. Forty-two percent of the respondents or 819 households, who were working before the outbreak reported they were not working due to the pandemic. This means that a host of Nigerians within the working population have become jobless, worsening the country’s unemployment figure that is already at an all-time high of 23 percent as of the third quarter
of 2018, the last time the statefunded agency publicly updated the figure. During that time, some 20.9 million Nigerians were unemployed. The figure would have more than triple, based on analysts estimate. The impact of the outbreak on employment was felt more in the commerce, service, and agricultural sector of the economy, the survey shows. Meanwhile, 79 percent of the respondents or 1,540 households reported that their total income has decreased since
mid-March, with many struggling to keep up with the purchase of staple food like yam, rice and beans. The pandemic is also increasing the number of out of school as Nigeria continues to close learning centres as part of the measures to contain the spread of the virus. Thirty-eight percent of the household surveyed with children who attended school prior to school closures due to the pandemic reported that their children did not engage in any learning/education activities.
CACOVID donates N250m medical equipment to Oyo isolation centre
Jumia partners IrokoTV, offers free subscription to prime members
yo State governor, Seyi Makinde, has described as indispensable roles being played by the private sector led Coalition Against Covid-19 (CACOVID) in the fight against the pandemic, saying the initiative of the private sector group was well thought out. The governor, who was represented by his deputy, Rauf Olaniyan, was speaking weekend at the handover of medical equipment worth N250 million to the state at the Saki Isolation Centre in Oyo State. He assured that when completed, the coronavirus treatment facility in Saki area of the state would be an improvement of the one existing in Olodo area of Ibadan. Some of the equipment include, lead ECG electrode, heavy duty apron, autoclave, auto syringe pump, biohazard bag, blood warmer, centrifuge (refrigerator), defribilators (AED) and portable ultrasound imaging. Others are mobile digital xray unit, face shield, protective goggles, hospital gown, oxygen cylinders, wheelchairs, oxygen concentrator, oxygen regulators, nebuliser, kidney dish,
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patient multiparameter monitor, stretcher, suction devices among others. Governor Makinde explained that the Saki Isolation Centre to be completed and Commission soon will be for both treatment and research, adding that the facility will have provision for observatory, isolation and treatment. He thanked the CACOVID team for the initiative and donations assuring that all the facilities are to be deployed to the Saki isolation centre because of the peculiarities of the axis which serves as a border town with some neighbouring West African countries. He said “The Saki Isolation Centre is going to be three-inone. It will have what you call an observatory, isolation and treatment centre. “The reason we need to have an observatory is because Saki is a border town and many people come in from different parts of the West African states, especially Burkina Faso and Benin Republic, they come in through that area. “So, when patients come in, what we do is to create an observatory. An observatory is not available in Olodo as I speak.
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umia Nigeria has announced a new partnership with Africa’s foremost digital entertainment provider, IROKOTV, to provide free IROKOTV subscription to Jumia prime members bundled with the 3-month, 6-month and 12-month Jumia Prime Membership plans. In a similar development, the e-commerce platform is teaming up with global fintech firm, Mastercard to offer a 25% cash-back exclusively to all Mastercard holders who purchase the 12-month Jumia Prime membership. Massimiliano Spalazzi, the CEO for Jumia Nigeria, says the new partnership with IrokoTV is to make shopping exciting for new subscribers on its platform. According to Spalazzi, the partnership means new and existing customers can now enjoy limitless access to Nollywood films and TV Series available on the IrokoTV platform. “We are particularly excited about this offer because while we partner with a Nigerian startup, it also helps to provide free digital entertainment for Nigerians who are currently spending @Businessdayng
more time at home as a result of the COVID-19 lockdown,” Spalazzi says. Additional benefits for subscribers on the Jumia Prime Membership are free shipping on Jumia Express items, free delivery on Jumia Food orders, an IrokoTV package, Boomplay premium unlimited listening, and many others. Launched in June 2019, Jumia Prime is a membership programme that gives access to a range of digital services and offers from Jumia. Designed for the frequent shoppers, Jumia Prime eliminates shipping fees, so members make savings every time they place an order on a service that is currently available in Lagos, Abuja and Ibadan. Jason Njoku, CEO of IrokoTV said the partnership with Jumia gives the online screaming platform the opportunity to provide its exclusive Nollywood movies and series to Jumia Prime members. “Members would also be able to download and watch from our libraries of Korean, Telenovelas, Bollywood, and Kiddies content. We believe this partnership would be the first of many collaborations with Jumia across Africa.”
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Sanwo-Olu presents staff of Why marginal oil field licensing round may fail again - stakeholders “A total of 57 fields located “It will however succeed if Aside from this, he said, “Nigerian office to ex-commissioner as Olusola Bello the intention is to build capacity banks are yet to figure out their on land, swamp and shallow as it will impact on the economy medium- and long-term strate- offshore terrains are on offer,” the greatly,” he said. gies post COVID-19, and because DPR said in a statement posted on 15th Oniru of Iru Kingdom takeholders in the Nigerian According to Avuru, there of this there would not be much its Twitter feed. Joshua Bassey
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raditional rites to mounting the seat of Oniru of Iruland, in Lagos, which became vacant in 2019, were on Sunday concluded with the presentation of staff of office to the new Oniru, Gbolahan Lawal, immediate past Lagos State commissioner for agriculture. The 15th Oniru of Iru Kingdom is to be addressed as Oba Abdul-Wasiu Omogbolahan Lawal, Abisogun II. He succeeds the 14th Oniru, Oba Idowu Oniru, who passed on in September 2019 at the age of 82. The new monarch, who resigned his appointment as commissioner a couple of days ago, received the staff of office barely three days after the kingmakers and elders of Iruland selected him among the lists of princes who vied for the throne. Presenting the staff of office to the Oniru, Lagos State governor, Babajide Sanwo-Olu, charged him to sustain the peace and harmonious relationship that had existed in the land. Sanwo-Olu described the colourful coronation which held within the Oniru palace on Victoria Island, as historic and called on the people of the kingdom to join hands with him for the growth and progress of Iruland, and of Lagos State. He said of the traditional institution as the first system of governance, noting that it would forever remain a strong link to Nigeria’s heritage at all times. “There is no doubt that the future of Iru Kingdom will continue
to be bright and promising, and that the ascension today of His Royal Majesty, Oba Abdul-Wasiu Omogbolahan Lawal, Abisogun II, marks the start of the next phase of the journey into that future,” Sanwo-Olu said. “Today is a historic day in the history of Iruland, as we gather to celebrate the installation of the 15th Oniru of Iruland, it is my firm expectation that you will all rally round your new Oba and join hands with him for the growth and progress of Iruland, and of Lagos State.” According to Sanwo-Olu, given the pedigree of the new king, there is no doubt that his reign would be a progressive one. Oba of Lagos, Rilwan Akiolu, described the ascension of the new monarch as divine, saying it was why the process leading to his emergence was fast, and urged him to ensure unity, justice and fairness among the ruling houses. “Move the Oniru family forward. Ensure the indigene and non-indigene enjoy. Be open to the people. You should leave the Oniru palace better than how you met it,” Akiolu said. In his acceptance response, the new Oniru promised to rule with justice and fairness as advised, adding that that his mission was to first unite the Oniru family for the progress of the kingdom and the success of his reign. “On behalf of all the sons and daughters of Iruland, I express profound gratitude to the kingmakers and the government of Lagos State in ensuring that there was fairness, equity and justice in the process leading to my selection as Oniru of Iruland,” he said.
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petroleum industry have picked holes in marginal oil field licensing bid round recently announced by the Federal Government. A good number of them have warned that the exercise will fail if it sole aim is to make money for the government to support the budget rather than building capacity. While a good number of the stakeholders do not have problems with the time of the exercise, others feel the exercise is ill timed in view of the present global circumstances in which COVID-19 is ravaging the whole world. Investors, they state, may not be inclined to put in money thereby defeating the essence of the exercise, which is building local capacity. Austin Avuru, managing director/CEOr of Seplat Petroleum Development Company, had said recently during a webinar conference on the oil and gas industry that there was no right time for the exercise, but it must not be done with the sole intension to collect signature bonus.
are 10 oil marginal fields already producing from the 24 fields in the previous exercise, stating that this next one should build on the success of the last one. He said the last exercise helped built the needed capacity and efficiency that was needed in the country. Okorafor Bank Anthony, the immediate past president of the Petroleum Technology Association of Nigeria (PETAN), agreed with Austin Avuru over the timing of the exercise. “The timing for the Marginal Bid round is ok. It should have been done 10 years ago. It will open up the economy and create more jobs.” But Diran Fawibe, chairman/ CEO of International Energy Services Limited (IESL)-Doris joint venture, completely disagreed with the opinion of both on timing, saying the timing was completely wrong in view of the prevailing conditions globally and locally. He said no international investor would support such an exercise under the prevailing situation because of COVID-19.
enthusiasm to finance or fund marginal oil field exercise.” To him, the first quarter report of National Bureau of Statistics shows a disappointing foreign investment inflow to the oil and gas sector of just about $10 million. This is just about .017 percent of the inflows for the banking sector. He warned that the problems that bedevilled the last exercise that resulted in their non-performance might rear its head again, and this might eventually lead to the revocation of some of the fields. He said using the exercise to raise money was wrong; adding that the various fees charged for prospective investors might also inhibit Nigerians from participating. He wondered whether people would get value for their money when looking at the reserve base of some of these fields. The Federal Government officially launched its first licensing round for marginal oilfields in nearly 20 years, the Department of Petroleum Resources (DPR) said on Monday.
The new licensing round is the first marginal field round since 2002, which the country hopes will boost oil output and bring in much-needed revenues from fees associated with the licences. Marginal fields are smaller oil blocs that are typically developed by indigenous companies. Companies that emerge winners must demonstrate progress on an awarded field within 60 months otherwise the Ministry of Petroleum Resources has the authority to cancel the farm-out agreement. The DPR has set out a number of steps for bidders, with fees payable at various points. A registration fee of N500,000 ($1,290) is the first payment, a N2 million ($5,200) application fee per field, a N3 million ($7,800) bid processing fee per field, a data prying fee of $15,000 per field, a data leasing fee of $25,000 per field, a competent persons report fee of $50,000 per field and a field specific report of $25,000 per field. Signature bonuses are also payable.
Brass people seek remediation for Agip’s Export Terminal environmental impact Samuel Ese, Yenagoa
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eople of Brass Community in Brass Local Government Area of Bayelsa State are seeking remediation on the environmental and economic damages to the Brass Canal by the Brass Crude Export Terminal for the past 48 years. Brass Community made the demand in a letter to the managing director of Nigeria Agip Oil Company (NAOC) by a firm of solicitors, Ntephe, Smith and Wills on May 25, 2020. The letter states that the remediation of the Brass Canal is long overdue and is being delayed by NAOC, an affiliate of Eni: it operates the offshore oil terminal along with some onshore oil blocks in addition to Joint Venture stakes in other fields operated by Shell in Bayelsa State. Brass Community says Agip is not forthcoming in spite of a subsisting regulatory directive to conduct a Comprehensive Impact Assessment (CIA) to determine the effect of the facility and proffer remedy and compensation. The letter also reads that the oil firm has also delayed the implementation of a joint inter-agency site visit to resolve the issue and commence remediation of the impacted areas. “In furtherance of the human security, economic and environmental interests of your
hosts, Brass Kingdom, touching also on Nigeria’s national interests and Bayelsa state’s strategic interest, we remind you to overdue obligation on the Brass Canal viz. “Proper remediation of ecological damage caused by continous discharge of toxic wastes at your Brass Terminal everyday for the past 48 years. “Adequate compensation based on impartial impact assessment, a restoration and pollution prevention plan as per best practices. “We put you on notice to stop desperate attempts by your officers to compromise or induce key interests, aimed at evading regulatory compliance, frustrating the Ministerial directive for an independent Comprehensive Impact Assessment as a basis for adequate remediation and compensation,” the solicitors stated in part. The community also wanted the oil firm to refrain from efforts to waive NAOC’s environmental obligations to the people of Brass Kingdom by inserting obnoxious clauses into draft Memorandum of Understanding with the people. Brass Community said in the letter that it had ascertained during a visit to the canal in 2015 by environmental and legal experts that there is a daily discharge of some 150,000 barrels of toxic waste consisting of untreated produce water and sludge into the canal. www.businessday.ng
L-R: Obafemi Hamzat, deputy governor, Lagos State; Rabiu Olowo, commissioner for finance; Babajide Sanwo-Olu, governor, and Hakeem Muri-Okunola, head of service, during a press briefing on the State’s guidelines and protocols for the second phase of the gradual easing of C0VID-19 lockdown, at Lagos House, Marina.
AfDB approves Nigeria’s development strategy paper Adeola Ajakaiye, Kano
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he African Development Bank (AfDB) has approved Nigeria’s Country Strategy Paper (C SP) 2020-2024, which builds on the successes and challenges of the 2013-2019 edition and incorporates emerging developmental realities and opportunities shaping Nigeria’s political and economic landscape, including in the post-COVID-19 period. The Board of Director of the Bank gave the approval on May 27, 2020, a statement made available to BusinessDay, Friday, revealed. Ebrima Faal, senior director of the bank in Nigeria, disclosed that the decision was a re-affirmation of the bank’s
institution’s support for Nigeria’s socio-economic advancement. “In the implementation of the CSP, the Bank will also support Nigeria to address economic shocks associated with the COVID-19 pandemic and oil price shocks by focusing our interventions in sectors that will strengthen public health infrastructure and accelerate efforts towards economic transformation and diversification of export earnings and fiscal revenues from oil. “The 2020-2024 CSP identifies supporting infrastructure development and promoting social inclusion through agribusiness and skills development as key priority areas for Nigeria. These priorities have been selected to leverage Nigeria’s rich endowment of natural and human resources toward transforming the lives of its people.
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It is in this the context that the new CSP has been customized to support government efforts in confronting challenges and to foster long-term, socially inclusive development,” Ebrima explained. Ebrima stated that under the CSP, the Bank would deploy a combination of sovereign and non-sovereign financing instruments to support the two priority areas, including investment and institutional support projects, evidence-based analytical work in numerous economic sectors, policy dialogue and provision of advisory services. He noted that a special focus would be put on supporting the Nigerian private sector, in terms of financing and advisory services, and on Public-PrivatePartnership (PPP) initiatives that enable innovative, long-term investment in energy, transport @Businessdayng
and water and sanitation. “The Strategy Paper is the result of participatory consultations with a range of key stakeholders, both state and non-state actors as well as bilateral and multilateral development partners. The CSP is fully aligned with the Bank’s Ten-Year Strategy, the High 5 priorities and Nigeria’s own Economic Reform and Growth Plan (ERGP), as well as the global Sustainable Development Goals (SDGs). “As of December 2019, the Bank Group’s active portfolio in Nigeria comprised 61 operations, with a total commitment of about $5 billion. Of the total active operations, 29 were in the public sector, with a commitment of $2 billion (43%) and 32 non-sovereign operations with a total commitment of $3 billion, equivalent to 57% of the total portfolio,” he said.
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Coalition set to publish names of NASS members who collected fully-paid contracts in NDDC without executing them … says N40bn accusation is trumped charge to derail the management Ignatius Chukwu
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s the fight between the Niger Delta Development Commission (NDDC) and two committees of the National Assembly in charge of Niger Delta region becomes fierce, the names of National Assembly members that got numerous fullypaid contracts in the Commission but failed to execute any may soon be published in Nigeria’s national newspapers. A coalition of four non-governmental organisations (NGOs) says it is in possession of the authentic list of such lawmakers and payment details with bank records. The group speaking under a joint council, Niger Delta Elements Progressives Union (NIDEPU) and League for the Sustainable Development of the Niger Delta (LSDND), says they have given the NASS committees 14 days to drop the plan to probe the Interim Management Committee of the NDDC or protest marches around the nine states of the region would explode.
The statement issued by the president of the coalition/council, Bassey Ntak, secretary, Silas Braide, Lawrence Akpeti (coordinator, Warri-based Niger Delta Elements Progressive Union, NIDEPU), and Kingsley Arthur (coordinator, Effurun-based League for the Sustainable Development of the Niger Delta, LSDND) was made available to newsmen in the Niger Delta after their meeting in Port Harcourt on Saturday, June 6, 2020. The NDDC had last week said it had the full list of NASS members who collected contracts with full payments and walked away, only to turn round to want to stop forensic audit or frustrate the processes through probes and intrigues. Facts had emerged in 2019 that one lawmaker alone pocketed about 300 contracts with payments for about 200 of them without doing them. Another consultant was said to be collecting N1 billion every month for merely going to pick up statutory payments from oil majors on behalf of the Com-
mission, while yet, some lawmakers were said to submit list of their contracts that must be paid for before the Commission’s budget would be passed. These accusations seem to rock the relationship between the Commission and the NASS, but the managing director of the NDDC, Kemebradikumo Daniel Pondei, who came in on February 13, 2020, said last week that it was only the handiwork of about two leaders of the NASS committees making it look like the entire committees or NASS were involved. This must be why the coalition in their statement urged the leadership of both houses (Senate president and speaker of House) to call the two committee heads to order so as to stop interfering with the work of the IMC, when it is still not too late. The group observed that the tenure of the IMC would end in December 2020 when the forensic audit ought to be concluded and that the game plan may be to keep the management busy with fights and probes until the audit time would elapse.
Osahenye, elected president, Chevening Alumni Association of Nigeria GODFREY OFURUM
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ester Osahenye, a senior manager with MTN Nigeria, has been elected president of Chevening Alumni Association of Nigeria. Osahenye, a writer, speaker and ICT4D promoter, was elected at a highly attended virtual extraordinary general meeting (EGM), May 30, 2020, and will lead the globally recognised alumni association for two years. Before his election as the president, Osahenye was the general secretary of the association. Chevening Scholarships is the UK Government scholarships and fellowships that enable future leaders to study in the UK, while joining a global community of professionals, who are creating positive change around the globe. Others elected are Adetoun Mustapha, vice president, Oluwafemi Adedipe, general secretary, Suleiman Mshelia, emerged as the assistant general secretary, Ajibola Anjorin, chief whip, Nkiru Okobi, financial secretary, while Marilyn Eze, was elected, legal adviser of
the association, and Ijeoma Onyeator of Channels TV was elected publicity secretary. In September 2019, at their annual general meeting, the association also elected the following as their Board of Trustees. They are John Momoh, president, Channels TV, who was elected, chairman, BoT, Amina Oyagbola, a legal adviser and management consultant, member, Adamu Garba, member, Markie Snomie Idowu, member, and Florence Iheme, member. With the recent election, the president of the association and the general secretary become members of the board or trustees, as stipulated in their constitution. Osahenye in his acceptance speech promised to work with the Exco and the BoT to rejig the CAAN mentoring programme that would help returnee Cheveners to find their feet in the corporate world. He also reaffirmed the Alumni association commitment to grow educational programmes in Nigeria, through its educational workstreams. According to him, CAAN will embark on science,
technology, engineering and mathematics (STEM) boot camp for young Nigerians, which would be sponsored by CAAN and its global alliances. “Chevening offers a unique opportunity for future leaders, influencers, and decision-makers from all over the world to develop professionally and academically, network extensively, experience UK culture, and build lasting positive relationships with the UK. “Since 1983, over 50,000 professionals have studied in the UK, through Chevening. “In Nigeria more than 1,400 Nigerians have benefited from Chevening Scholarship and fellowships, among them are Nigerians such as John Momoh of Channels TV, Simon Kolawole, a journalist, columnist and the publisher of The Cable News, Okey Nwuke, deputy managing director, Coscharis Group, Amina Oyagbola, a seasoned lawyer and the founder of WISCAR, Philip Isiakpa, publisher, Business a.m, Kenneth Amaeshi, a professor at the University of Edinburgh, and Herbert Wigwe, group CEO, Access Bank.
1st Anniversary: APC chieftain commends Tinubu over Sanwo-Olu’s success story Iniobong Iwok
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chieftain of the All Progressives Congress (APC) in Lagos State, Lanre Razak, says the national leader of the party, Bola Ahmed Tinubu, deserves commendation over the excellent performance of the Lagos State governor, Babajide Sanwo-Olu, in his first anniversary in office. Razaq, who is a member of the Governor’s Advisory Council (GAC), has taken a critical look at the governor’s performance one year in the saddle and declared it a success story, saying, his achievements in all sectors
of the economy have given him a pass mark. In a statement he signed, weekend, the former Lagos State commissioner for public transportation, said, “Tinubu deserves kudos in the sense that, his foresightedness in giving the state performing candidate like Sanwo-Olu has made him a trust-worthy leader who desires the best for the state. “This is not the first time Tinubu would give us a befitting governor for the state,” reminding that, “that was how he brought out Babatunde Raji Fashola, from the blues and the state was better for it.” On Sanwo-Olu, Razak stated emphatically that, he had as-
Wema Bank re-opens branches, advises customers, staff to remain cautious
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ue to the Federal Government’s directive to ease the nationwide restrictions on movement and key businesses, Wema Bank plc will re-open all its branches nationwide. In a statement released by the bank, from Wednesday, June 3, 2020, all branch offices resumed normal services from 8am to 4am, Monday through to Friday. Ademola Adebise, MD/CEO Wema Bank, explained that “though work resumes in earnest, what is of utmost importance is the health and safety of all,”
stressing that the bank would take necessary precautionary measures to ensure the safety of staff and customers. Re-echoing the sentiments of the managing director, Funmilayo Falola, head of brands and marketing communications, disclosed that “while at work, staff are to ensure they keep to all our health protocols, like wearing of face masks, disinfecting work desks regularly, and frequently making use of hand sanitizers”. Adebise also encouraged bank customers to maintain strict adherence to the safety protocols
Edo guber: Why direct primary cannot hold in Edo - Obaseki Iniobong Iwok
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t appears the planned primary election of the Edo State chapter of the All Progressives Congress (APC) may run into a hitch, this is as the state governor, Godwin Obaseki, has insisted that direct primaries cannot hold in the state. The APC National Working Committee is insisting that the party will conduct a direct primary to choose its governorship candidate for the September 19 election in the state. But, according to the governor, who spoke through his special adviser on media and communication strategy, Crusoe Osagie, only indirect primary could hold in the state in accordance with the rule gazetted in newspapers on Friday.
The state government had gazetted a new rule on Friday banning direct primaries in the state. The new rule partly reads: “That in respect of political gatherings for the purpose of conducting primaries for any of the parties desiring to field candidates in the forthcoming gubernatorial election, gatherings of more than 20 persons may be allowed, subject to the written approval of the Governor, if such gatherings do not exceed 5,000 persons; hold in Benin City and in a single facility with a large seating capacity of not less than 10,000 persons; are provided with adequate health, safety and sanitary facilities and are COVID-19 response compliant with social distancing policy, hand-washing and proper use of www.businessday.ng
sertively convinced even all the doubting Thomases that he was a blessing to the good people of Lagos through his achievements within just a year in office, praising the governor for desiring maximum welfare and safety for his people. Singling out the way he currently handles the dreaded coronavirus, Razak said Sanwo-Olu has confirmed that he was truly well prepared for any eventuality about the COVID-19, pointing out that, “if not, the whole country would have been in medical disarray now as people would have been running helter-skelter to seek for succour that never exists outside the government’s arrangement.”
face masks fully observed.” Osagie said: “The Presidential Task Force on COVID-19 has said in its briefings that states should manage the pandemic through measures unique to their states. On the basis of that, we have deployed this measure in Edo State, the rule has been gazetted and so direct primaries cannot hold here as far as that regulation is concerned. So, it has to be indirect, in order to be working in line with the extant rule in the state. “The only mode of primary that is permissible according to that law is indirect primaries, and we believe it is correct to do so because for that option, it is just one location and you can deploy all agencies of government responsible for ensuring compliance with the protocols. https://www.facebook.com/businessdayng
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both in the banking halls and in their respective environments. In his words, “customers are advised to take absolute responsibility for their safety and that of their families. Be vigilant in your neighbourhoods, on the roads, and in the banking halls. It is important for us all to be as alert as ever and not take the eased lockdown as a room for laxity”. He advised that everyone stays staunch in their resolve to curb the spread of the virus and asserted that both staff and customers would have to work independently to achieve this.
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Company IN FOCUS
BUSINESS DAY Monday 08 June 2020 www.businessday.ng
FirstBank raising corporate, national leaders through knowledge-based investments
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s a foremost agent of development, humans require a desirable level of knowledge to accomplish set goals and attain proficiency in sustainability. This makes a significant and deliberate thrust of investment by institutions like FirstBank in strategic and qualitative education very remarkable. Amid the global fight to contain the coronavirus disruption to many sectors including education, due to lockdowns, FirstBank initiated a quick response to sustaining learning for students in the country. FirstBank’s quick response in proffering a solution at such a novel scale targeting one million students in the country, was no doubt leveraged on its e-learning initiative advanced competitive edge. By default, leaders-to-be are expected to be well-equipped and armed with exceptional skills transmitted through the best consistent systems of education, to be at par with peers globally. However, in developing countries such as Nigeria, poor educational infrastructure could prove detrimental – eroding the competitive edge of the youth. The lack of supportive structure to enable a seamless switchover to online learning mode in the event of school closures is evidence of this gap. The impact could be disastrous, except there is an intervention such as the FirstBank e-learning initiative. Before the outbreak of the COVID-19 pandemic, 10 universities and 3 secondary schools had been supported with infrastructure projects, while another 10 universities benefited from professorial Chairs sponsored by FirstBank. In response to this pandemic however and with clear foresight the Bank again took a determined position to intervene in this critical area to secure the future of Nigeria’s youth and the nation. “While the needs of children can easily be forgotten at a time like this, we consider it important to make provisions that ensure they have access to learning resources and ensure they remain fully engaged so they can compete favourably with their peers internationally,” said the Bank which has spent over 15 Billion Naira in over two decades to positively impact communities across the Six Geo-political zones in Nigeria, adding: “Education is something we are big on and can demonstrate consistency over the years” Over 40,000 volunteering hours invested by FirstBank staff in various classrooms, teaching
Adesola Adeduntan, CEO, FirstBank.
young people across the country, financial literacy, entrepreneurial and career counselling have impacted over 80 secondary schools and 70,000 students. With the potential of elevating the standard of education post-COVID-19, the FirstBank e-learning initiative is building on the Bank’s milestones of raising a new and young business savvy and financially independent generation. Setting the pace for societal impact through education is a major thrust for FirstBank as can be further gleaned from its inhouse training school, FirstAcademy, established in 2012 to raise corporate leaders. The Academy’s training programmes which are delivered using blended methodologies such as Instructor-led, eLearning, In-plant or Open programmes and also leveraging a robust Learning Management System (LMS) is configured for both offline and online access or via a mobile device. The offline, and online approaches to accessing learning resources have also been adopted for its ‘one million students’ elearning initiative. The online model offers public schools students access to the solutions through apps and web options, on a free or subsidised subscription model; while the offline
model is designed for indigent students who may not have access to devices. According to the Bank: “The partnership with Lagos State has seen us provide low-end devices for students preloaded with Roducate offline; content which include Government accredited curriculum for primary through secondary and several university courses. This solution will see Lagos state offer children in the lower bracket, who may not have access to devices or data from home affordable smart phones preloaded with the curriculum. The phones have SIMs and limited data tied, only, to the Roducate learning product, which means the recipients cannot browse, but can still submit tests and mock exams, thus encouraging safe learning. As the Bank further noted, the initiative will facilitate innovation around education: “impacting how our children are educated in Nigeria forever, with the complementarity this brings. For example, no need for expensive text books for those who can’t afford it. It also offers a potential platform to promote financial inclusion – a core strategic goal of the bank through financial literacy of students.” As FirstBank explained, delivering solutions to the target au-
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Organizations are only as strong as its weakest leader – that’s why great organizations such as ours, invest in leadership development as a business strategy
dience comprising students, the youth and staff of the organisation through its educational intervention initiatives, has prompted the Bank to build partnerships with various notable international and local institutions, drawn from the public and private sectors. Some of the Bank’s partners include United Nations Educational Scientific and Cultural Organisation (UNESCO), educational content owners, technology companies, Telcos, OEMs, Radio and TV broadcast stations. Currently, the Bank in the drive to migrate one million students to e-learning platforms, in addition to the Lagos State and Roducate partnership is also kickstarting partnership with IBM; Curious Learning and a host of other pre-qualified partners As recently announced by the Bank, the IBM Digital - Nation Africa (DNA) program –was used to kick-off its e learning capacity building and empowerment series, designed as an online youth-focused learning program that enables innovation and skills development on emerging technologies. The program is categorised into three stages (Explorer, Innovator and New Collar) and includes Coding, Cloud, Artificial Intelligence; Data Science & Analytics, Internet of Things, Blockchain, Cybersecurity, Quantum Computing and structured for everyone interested in acquiring skills in emerging technologies. “In our drive to move one million students to e-Learning, students will be encouraged to access the DNA for free via our sites and portals. As part of our commitment to self-development internally, every staff will also have the opportunity to access the DNA programme through our FirstAcademy learning portal,” the Bank said. Hinged on the objective of building a professional workforce equipped with competitive skills and competencies to excel, the Academy is currently structured across 4 multi-level Schools as well as working partnerships with select Ivy League Institutions for FirstBank Leadership Development. “Organizations are only as strong as its weakest leader – that’s why great organizations such as ours, invest in leadership development as a business strategy. Leadership influences culture and plays a critical role in our sustained success. In the past few years, there has been significant investment in developing leadership competencies at varying levels across the Bank’s hierarchy,” the Bank said. Some of the flagship pro-
grammes driven by the Academy to support the Bank’s strategic leadership imperatives include the Senior Management Development Programme (SMDP), the Leadership Acceleration Program (LAP) and the FirstBank Management Associate Program (FMAP). FirstAcademy has so far, raked in significant recognition in many categories, including being recognised as the pioneer of Mobile Learning in the Nigerian Banking Industry, for delivering the FirstAcademy mobile app. FirstAcademy also received a Silver Award for best impact by Corporate University on the Implementation of Business Strategies of the Organisation 1894- Award, issued by the Global Council of Corporate Universities. In 2015 the Chartered Institute of Bankers of Nigeria (CIBN), accredited FirstAcademy and granted an unprecedented exemption for graduates of the Foundation School programme totalling 12 courses out of 19 ACIB courses. Considered as the bedrock of society’s advancement, education indubitably plays a key role in shaping the world and mitigating crisis. By closing knowledge gaps, education continues enhance the quality of human judgments, decisions and behaviour, which engenders good leadership, to this end, students are seen as the leaders of tomorrow. Despite the impact of FirstBank’s e-learning initiative, there remains a yawning gap for more innovative learning interventions in the public sector’s educational system from well-meaning organisations, who recognise that the best legacy a nation like Nigeria can have, is an advanced system of education that is tailored to meet the needs of the present and future. When delivered in a dynamic structural mix of brick, mortar and electronic interfaces, such educational models would readily churn out more competent corporate and world leaders without needing to take a break. Regulators through relevant policies and incentives need to act urgently to spur more investments in education by the private sector, as quantitative and qualitative education remain the fulcrum of nation building per excellence. The FirstBank education investment model, being the leading light in the country as at today, should be adopted as a blueprint for attaining optimal results both in the public and corporate sectors; indeed, further replications of the model, will no doubt ensure that Nigeria secures many seats on the global table of national and corporate leaders.
Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Advert Hotline: 08033225506. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Patrick Atuanya. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.