businessday market monitor FMDQ Close Benchmark NTB* & CP*
Bitcoin
NSE
Everdon Bureau De Change
Foreign Reserve $35.7bn
Biggest Gainer Seplat
Biggest Loser
3.90 pc N2.1 25,582.23
GBP-$:1.29 YUANY - 56.62
Commodities
NAHCO
N385
Cross Rates
-4.76 pc
Cocoa US$2,595.00
Gold $1,933.94
news you can trust I ** tuesDAY 08 september 2020 I vol. 19, no 646
Crude Oil $42.19
I
N300
Market
₦ 4,423,186.36 -0.76
Foreign Exchange
Buy
Sell
I&E FX Window CBN Official Rate as at September 4, 2020
ntb
www.
MTN Nigeria plc CP
386.00 379.00
0.00 1.80
0.01 4.77
3m 2m 28-oct-20 25-nov-20 392.38 395.23
Axxela Nsp-spv Funding 1 (Natural Gas) PowerCorp plc plc
0.00
0.47
0.44
0.00
8.90
8.75
9.64
11.44
6m 12m 24-feb-21 25-Aug-21 403.75
420.81
60m 36m 30-aug-23 27- aug-25 498.32
@
g
LOLADE AKINMURELE
590.10
g
Naira defies CBN’s $51.8m sales to BDCs, falls to N444.33k … as FX reserves increase by $38.50m HOPE MOSES-ASHIKE
L
Continues on page 31
Dangote Cement plc
*NTB - Nigerian Treasury Bills; *CP - Commercial Paper
Business leaders, others oppose bill to give CBN governor immunity eaders in Nigeria’s private sector have risen against a controversial bill that aims to give the Central Bank of Nigeria (CBN) governor more powers, including immunity from third-party lawsuits. The Bill, which has been passed by the National Assembly but awaits the President’s assent to become law, will replace the Banking and Other Financial Institutions Act (BOFIA). The business leaders as well as inves-
FGN
Spot ($/N) 25-Feb-21 5-Mar-21 23-Jul-30 30-Apr-25 20-May-27 27-Feb-34
$-N 428.00 442.00 1m £-N 548.00 576.00 Currency Futures 30-sept-20 389.54 €-N 490.00 516.00 ($/N)
g
Benchmark Sovereign & Corporate Bonds
N
igeria’s central bank resumed dollar sales to Bureau De Change (BDC) operators on Monday, selling $51.8 million to 5,180 BDCs across the country. Continues on page 31
See back page L-R: Ademola Adeyemi, business executive, institutional banking (Southwest), Sterling Bank plc; Emmanuel Emefienim, executive director, institutional banking, Sterling Bank; Noimot Oyedele-Salako, deputy governor, Ogun State, and Gbenga Akintola, GM, Ogun State Public Works Agency, during the presentation of protective jackets by officials of Sterling Bank as part of the bank’s corporate social responsibility programmes to the Ogun State government at the Governor’s Office, Oke-Mosan, Abeokuta, recently.
Buhari lists achievements at retreat, says reforms painful but good for economy
2
Tuesday 08 September 2020
BUSINESS DAY
NEWS
Malami denies plan to weaken EFCC Iniobong Iwok
A
ttorney-general of the federal (AGF) and minister of justice, Abubakar Malami has said that his office was not craving for more powers to weaken and have more control of agencies under its supervision. There were media reports on Sunday that Malami was pushing to weaken the powers of the chairman of the Economic and Financial Crimes Commission (EFCC) with a new bill. It was learnt that the bill was proposed weeks after the suspension of acting EFCC chairman Ibrahim Magu, who had accused Malami of frustrating the President’s anti-corruption war. The proposed law will require the director-general to be appointed by the President based on the recommendation of the AGF and subject to confirmation by the Senate. However, speaking Sunday night in an interview on Channels Television, Sunday Politics, Malami disclosed that it was only the National
Assembly who has legislative powers to expand its control over agencies under it. “The legislative function is vested in the National Assembly and by way of further expansion the office of the attorney-general is by no means craving for further powers with institutions, agencies under its supervision,” Malami said. The AGF further said such powers would be useless when it does not conform to the law and existing legislation of the National Assembly. He stressed that the office of the AGF was satisfied with the constitutional provision that gives its enough powers, on the supervisory role of the agencies under it. “When in constitutionally term, the powers are vested in the National Assembly even when you have the powers, I wonder what relevant the additional powers would be for you, if it is inferior to the constitutional provision,” “The office of the attorneygeneral is happy and content with the constitutional provision that gives its enough powers as far as the supervisory role of the agencies.
Obaseki, Malaysia seal deal for University of Innovation in Edo
E
do State governor and candidate of the People’s Democratic Party (PDP),Godwin Obaseki, has signed a deal with the government of Malaysia for the establishment of University of Innovation in Benin City, the Edo State capital. Obaseki, who disclosed this to journalists in Benin in on Monday, said the Memorandum of Understanding (MoU) was part of his administration’s efforts to bring more development into the state to boost the state’s economy and better the lives of Edo people. Obaseki, in the last three years and nine months, has
leveraged on his experience as a seasoned investment banker to bring developmental projects to the state through MoUs with local and international investors. The 5500bpd Edo Modular Refinery, which is nearing completion; the 55MW C C T E C- O s s i o m o Pow e r Plant, which has been completed and ready for use; the Benin Enterprise and Industrial Park, which development is ongoing and the Benin River Port, for which preliminary works are also ongoing, among other legacy projects of the Obaseki-led administration were birthed on the back of MoUs with
investors. According to the governor, “As I speak to you, I have signed a MoU with a company in Malaysia to bring a University of Innovation to Benin City. We are in discussion with one of the best schools in Malaysia and we have signed a MoU with them. “The technology hub in ICE has been given to them as they are bringing a university to benefit our people. We have a lot of good things to do for the people and you need to vote for the PDP in the September 19, 2020 gubernatorial election to sustain the developmental strides of this government across all sectors
of the state.” Obaseki continued: “If we need to move forward, we need to end the reign of the godfather in the state. This election is not about Osagie Ize-Iyamu and Obaseki but between Obaseki and Adams Oshiomhole. What he is doing to me in Benin City is the same thing he is doing to my deputy, Philip Shaibu in Edo North. The godfather in Edo State must be buried on September 19, 2020. “The reason why we must remove godfathers from the state and bury them politically is to stop their overbearing influence on the affairs of the state.
Meadow Hall to train, certify teachers through PDE programme BUNMI BAILEY
D
riven by its passion to raise the standard and quality of educators in Nigeria, Meadow Hall is set to commence a Professional Diploma in Education (PDE) programme in January 2021. Meadow Hall Professional Diploma in Education programme is an approved teacher training programme with an enriched curriculum that combines 21st Century best practices, current issues in education and the Teacher Registration Council of Nigeria’s (TRCN) PDE curriculum. The programme is targeted at individuals currently teaching without the required qualifications, prospective teachers, education/school administrators and business executives who aspire to join the teaching profession or own a school. The intensive programme will be facilitated by experienced and top-notch learning instructors and supportive mentors. The commencement of this programme is coming on the heels of Meadow Hall’s approvals from the National Commission for Colleges of Education
(NCCE) and the Teacher Registration Council of Nigeria (TRCN). Application for the 2020/2021 entry class has started and will close on November 28, 2020. Meadow Hall PDE programme is an initiative of Meadow Hall Group, an Education Group founded by Kehinde Nwani, with a vision of developing people to become change agents through the enriching opportunities provided by the group’s subbrands. With Christ as its main core value, Meadow Hall has delivered quality educational services to infant, primary and secondary school students. Its consulting and foundation arms have delivered creative and innovative continuous professional development training programmes to over 12,000 public and private school teachers in more than 7 Nigerian cities. According to Taiye Erhumwunse, head of Meadow Hall Consult, the PDE programme would use a blended approach of virtual and faceto-face learning to enable a flexible programme schedule for working teachers and business executives, to update their skills.
www.businessday.ng
L-R: Babajide Sanwo-Olu, governor, Lagos State, being presented with a plaque; Humphrey Olumakaiye, bishop and missioner of Lagos Diocese, and his wife, Motunrayo, during the opening of the 2nd session of the 34th Synod of the Lagos Diocese at Our Saviour’s Church, TBS, in Lagos, yesterday.
Nigerian youths urged to innovate their way to the top Chuka Uroko
A
project management professional, Onyinye Igbokwe, has urged Nigerian youths to innovate their way to the top by engaging themselves in things that are fruitful. Igbokwe who has rich experience in engineering, mining, interior architecture and building sectors, where she had worked either as part of a project team, led the business operations or strategically managed people to deliver on the organisation’s set objectives, also urged the youth
to start to invest in ourselves rather than waiting for the government. The Stanford trained professional and Founder of UJALI Limited was among transformational leaders at a 6-hour virtual conference attended by participants from Africa, Europe and other parts of the world, who addressed Nigerian youths. The conference was the 2nd anniversary lecture of anaedooline. com with the theme, ‘The Place of Youth in Politics and Economy’. Other speakers at the annual lecture were Wole Soy-
https://www.facebook.com/businessdayng
inka, the first Nobel Laureate from Africa; Peter Obi, former governor of Anambra State; Innocent Chukuwma, the CEO of Innoson Motors; Kingsley Moghalu, a former Deputy Governor of Central Bank of Nigeria (CBN), and Nonso Smart Okafor, a state legislator from Anambra State. “Where do we go from here?” Igbokwe wondered in her presentation, adding, “we must create a platform that will allow entrepreneurs to thrive. We can build incubators where Venture Capitalists (VCs) can invest in ideas that are bankable, sustainable and
@Businessdayng
viable,” she added. She also spoke about a pioneer app from Ujali Limited called the Ujali Pro. According to her, this is an innovative digital platform that provides an adaptive marketplace where corporate organizations can connect with the best subject matter experts in the broad area of human capacity development. The platform, she assured, was ready to bridge the gap in corporate learning by providing the medium that allows business schools to create tailored programmes for African businesses.
Tuesday 08 September 2020
BUSINESS DAY
www.businessday.ng
https://www.facebook.com/businessdayng
@Businessdayng
3
4
Tuesday 08 September 2020
BUSINESS DAY
www.businessday.ng
https://www.facebook.com/businessdayng
@Businessdayng
Tuesday 08 September 2020
BUSINESS DAY
www.businessday.ng
https://www.facebook.com/businessdayng
@Businessdayng
5
6
Tuesday 08 September 2020
BUSINESS DAY
NEWS
AM&P Advisory Services acquires 55.1m units of UACN shares worth N312.9m …at average price of N5.68 per share Iheanyi Nwachukwu
A
M & P Ad v i s o r y Services which has indirect relationship with the group managing director of UAC of Nigeria Plc (UACN) has bought 55.1 million units of the company’s shares. The transactions were sealed on the Nigerian Stock Exchange (NSE) on August 31, 2020 at an average price of N5.68 per share, cumulatively valued at N312.9 million.
Details of the share purchases show 54,030,858 units were purchased at N5.75 per share on August 31, 2020; 200,542 units were bought same say at N5.70 per share. Also, on August 31, 2020 AM&P Advisory Services bought 868,600 units of UACN at N5.60 per share. As at close of trading on Monday, September 7, 2020, UACN shares traded at N6.3 per share. UACN is a holding company focused on delivering superior returns through
disciplined capital allocation and operational improvements across its portfolio. UACN is a holding company that owns businesses with some of Nigeria’s strongest brands and widest distribution. It has a rich and diverse history and has been active in the Nigerian economic landscape since 1879 holding. Incorporated over 2 years ago (December 19, 2017) in Mauritius, AM&P Advisory Services is a company limited by shares.
Nigeria to benefit from UK’s £7.2m COVID-19 research support Godsgift Onyedinefu, Abuja
T
he United Kingdom (UK) on Monday announced some £7.2 million Covid-19 research support to Nigeria and other countries to address the impact of the pandemic in vulnerable communities. The UK government said it was investing in 20 new research projects which includes; delivering mass vaccination capacity in Bangladesh, protective equipment for refugees in Jordan and remote healthcare access for patients in Nigeria. These 20 new projects will benefit from a share of £7.2 million of UK government funding to develop new technology and processes to address challenges in partnership with some of the UK’s leading research institutions. Some of the projects according to a statement from the UK department for International Trade are; a training programme to be led by King’s College London for healthcare workers across Nigeria and Tanzania enabling them to deliver trusted and safe care to patients over the phone where internet availability is limited.
Trials will involve 20 health clinics in each country to test the effectiveness of remote health appointments, recommended by the World Health Organisation (WHO) during the pandemic, to help minimise physical contact that could spread the virus. King’s College London will work with University of Ibadan, Nigeria; Makerere University, Uganda; and St. Francis University College of Health and Allied Sciences, Tanzania. The University of Bath and University of Lagos aim to address the issue of limited Covid-19 testing capacity in Africa by leading a project to measure the disease in domestic wastewater, which can help reveal the health status of a population. “By studying wastewater, real time information about infection prevalence across South Africa and Nigeria can be accessed, enabling rapid identification of Covid-19 hot spots, and helping to shape decisions around entry and exit from ‘lockdown’ periods” the statement read. “The University of Birmingham, working with Brac University and Bangladesh University of Engineering and Technology will lead a project to increase
vaccine access in developing economies, by researching more effective ways of storing and transporting vaccines from manufacture to the point of use. Weak supply chains with inconsistent temperature control can reduce the effectiveness of vaccines by up to 25 per cent, so this vital project will help fast track Covid-19 vaccine delivery”, it added. “Defeating coronavirus is a truly global endeavour, which is why we’re backing Britain’s scientists and researchers to work with their international counterparts to find tech solutions to treat and combat this virus around the world,” business secretary, Alok Sharma said. The funding follows the launch of the government’s ambitious R&D Roadmap in July, which committed to boosting international collaboration in research and development and establishing global scientific partnerships that will create health, social and economic benefits across the world. It will be managed by UK aid programmes- the Global Challenges Research Fund (GCRF) and the Newton Fundthrough UK Research and Innovation.
Climate change: Nigerian Breweries invests N500m on reforestation in Ogun RAZAQ AYINLA, Abeokuta
I
n effort geared towards meeting up with the United Nations’ target of 45 percent reduction in greenhouse emissions by 2030 and 0% in 2050, Nigerian Breweries Plc is investing N500 million on reforestation scheme in Ogun. The investment will aid the reclamation of the degraded Olokemeji forest reserve in Odeda local government area of the state. In this respect, the Nigerian Breweries is partnering Ogun State to plant 600,000 trees on 500 hectares of land
within the Olokemi forest reserve for a 10-year duration with a view to mitigating the negative effects of deforestation, climate change and greenhouse emissions. Speaking at the signing of memorandum of understanding (MoU) with Ogun State government in Abeokuta, on Monday, Sade Morgan, director of corporate affairs, NB Plc, said the reforestation plan was aimed at preserving the environment, protecting the watershed and replenishing soil water, thereby mitigating the effects of global warming. Morgan, who said that the project was an affirmation of www.businessday.ng
Nigerian Breweries’ sustainability of Brewing a Better World (BaBW), disclosed that N500 million was being committed to it, and would be executed in conjunction with the International Institute for Tropical Agriculture (IITA) for a period of 10 years. Speaking at the event, Tunji Akinosi, the state commissioner for forestry, decried the continued encroachment on forest reserves by people who engage in unauthorised felling of trees, illegal farming and other activities, saying these were detrimental to forestry growth, management and development of the state. https://www.facebook.com/businessdayng
@Businessdayng
Tuesday 08 September 2020
BUSINESS DAY
www.businessday.ng
https://www.facebook.com/businessdayng
@Businessdayng
7
8
Tuesday 08 September 2020
BUSINESS DAY
www.businessday.ng
https://www.facebook.com/businessdayng
@Businessdayng
Tuesday 08 September 2020
BUSINESS DAY
comment
9
comment is free
Send 800word comments to comment@businessday.ng
Rights of persons under the Nigerian data protection regulations
ULOAKU EKWEGH
I
t is right to say that a lot of things that people need to do from opening a bank account to subscribing to cable TV would require sharing some form of personal information. The requested personal information usually ranges from name, address, a photo, an email address to bank details, social networking websites, medical information. The shared personal information is processed and stored in one way or the other. Some pertinent questions that would likely come to mind in this regard include whether one has rights in relation to his or her personal information shared for various purposes and whether such personal information is adequately protected under the law The Nigerian Data Protection Regulations (NDPR) was signed in January 2019 and it applies to all transactions intended for the processing of personal data regardless of the means by which the data processing is being conducted or intended to be conducted in respect of natural persons in Nigeria. The Regulation applies to persons residing in Nigeria or residing outside Nigeria who are citizens of Nigeria. The National Information Technology Development Agency (NITDA, hereinafter referred to as The Agency) is the Regulatory body charged with the protection of Personal Data and other related matters. The NDPR makes provisions for the following rights
Right to information: Every person who is required to share his personal data has a right to information. This right starts prior to collection of the personal data and continues after the personal data has been collected. A. The type of information to be provided to persons prior to the collection of their personal data are listed in section 3(7) (a-n) of the NDPR and they include; a) the identity and the contact details of the Controller; b) the contact details of the Data Protection Officer; c) the purpose(s) of the processing for which the Personal Data are intended as well as the legal basis for the processing; d) the legitimate interests pursued by the Controller or by a third party; e) the recipients or categories of recipients of the Personal Data, if any; f) where applicable, the fact that the Controller intends to transfer Personal Data to a third country or international organisation and the existence or absence of an adequacy decision by The Agency; g) the period for which the Personal Data will be stored, or if that is not possible, the criteria used to determine that period; h) the existence of the right to request from the Controller access to and rectification or erasure of Personal Data or restriction of processing concerning the Data Subject or to object to processing as well as the right to Data Portability; i) the existence of the right to withdraw consent at any time. B. Every person who has shared his personal data also has a right to be informed about how such personal data is to be processed. The information should be in a concise, transparent, intelligible and easily accessible form. It should also be provided free of charge, in writing, or by other means, including, where appropriate, by electronic means. The information may be provided orally, if the person requests that it should be done in that manner.
It also important to mention that where one’s personal data are transferred to a foreign country or to an international organisation, the person has a right to be informed of the appropriate safeguards for data protection in the foreign country. The person has the right to obtain without undue delay the rectification of inaccurate personal data concerning him or her. Considering the purposes of the processing, the person also has a right to have incomplete personal data completed, including by means of providing a supplementary statement. Right to deletion of data Persons have the right to request the deletion of their personal data without delay. The personal data should be promptly deleted if one of the following grounds is applicable: a) The Personal Data are no longer necessary in relation to the purposes for which they were collected or processed; b) The Data Subject withdraws consent on which the processing is based; c) the Data Subject objects to the processing and there are no overriding legitimate grounds for the processing; d) The Personal Data have been unlawfully processed; and e) the Personal Data must be erased for compliance with a legal obligation in Nigeria. Right to restriction of processing of data One also has the right to obtain the restriction of processing of his or her personal data under any of the following circumstances: a) The accuracy of the personal data is contested by the person for a period enabling the verification of its accuracy; b) The processing is unlawful, and the person opposes the erasure of the personal data and requests the restriction of their use instead; c) the personal data is no longer required for the purposes of the processing, but they are required by the person for the establishment, exercise or defence of legal claims; and d) the person has objected to processing of his or her data, pending the verification whether the
‘
The next time you are required to provide some personal data for one purpose or another, remember that you have rights in this regard and can make relevant demands to ensure that your personal data is adequately safeguarded
Ekwegh is a private legal practitioner with over 15 years legal experience in law firms and as in-house counsel. She is also a fellow of the Institute of Management Consultants. Email: uloekwegh@yahoo.com
Olusegun Osunkeye: Of rectitude and professionalism
H
istory will never forget how great men lived their lives, says the sage. So let it be with Chief Olusegun Oladipo Osunkeye, a contemporary business and management titan who traversed the Nigerian boardrooms with bespoke glee like a colossus. With a record 41 unbroken years with Nestle, it was obvious that his skills were so abundant and enduring to the extent that he became an oracle of some sort within the Nigerian industrial landscape. Being decorated with the three highest national hours (Officer of the Order of the Niger, Officer of the Order of the Federal Republic and Commander of the Order of the Niger) within a spate of 10 years is also an indication of his relevance and recognition within the Nigerian development space. This is particularly a record very rare for people within the corridors of the national economy. These attributes typify the fact that Oshunkeye has never touched anything without embellishing it to a very significant level. To say that he has been idolised by the country’s industrial titan is about saying the obvious based on the abundant records that trail his passage on the sands of the Nigerian times. Within all the time he held sway within the Nigerian organized private sector he remained the barometer with which the picture of national productivity was measured, considering his insistence on standards, transparency, philanthropy, equal opportunity and engagement with government for policy initiatives. His footprints are obviously embedded on the last pages of the various national industrial master plan documents over the years. At 80, Oshunkeye is still strong to peruse through the good words about him as a respite from God whom he has served even at this time
in various forms and times within his Anglican Church of Nigeria platform where he has been decorated and honoured with 16 different positions between 1993 and today. This does not in any way diminish his standing as a super ego within his cultural enclave where his community relevance has also endured him with the highest title in the land. He has obviously given much to his environment in the form of service and has really desired so much from government, religious and cultural institutions. His has been an admixture of responsible service to various institutions that propagate the growth of humanity and its needs. His record of excellence in management has become the precursor of his other contributions to national development and point of contact with all that needed his expertise as well as the rallying point for the entire services he has rendered to humanity. As a professional accountant, Oshunkeye has been in love with numbers, each time the numbers did not meet his projection it matters a lot to him, but most of the time it did. As an incredible optimist, they really count and that was why he insisted (in 1991) on hitting N1 billion turnover at Nestle against the optimism of his contemporaries whom he proved very wrong. “I wanted us to achieve over one billion Naira turnover in 1992 and some of them said that it was impossible. But I told them that it was very possible with them because I had faith in their ability, they had been well trained and motivated. Lo and behold, we achieved N1,025 million (N1.02 billion) by team work, corporation, understanding and unity of purpose by all. I was the leader and I led from the front”. He established critical success factors as a reputable CEO, some of which included
www.businessday.ng
transparency, honesty and integrity. With all these, trust and confidence visited him as birth rights with which his journey to the corporate world rolled down like waters. Recognitions to Oshunkeye by his colleagues have always been naturally tailored to capture the real essence of his level of professionalism and off-handish display of intelligence. Ten years ago, when he was 70, his boss at Nestle headquarters in Switzerland noted that, ”in the 36 years that I have known you, you have been and remained an example of rectitude, professionalism and great human qualities. It is people like you who have instilled in me a love for Africa and the belief that with the right approach the many difficulties along the way can be overcome and a brighter future for the people achieved. In discussions on the subject of African development, I often refer to my experiences in your market, where the company managed by you was able, despite a harsh business climate, to uphold in all respect a standard of quality which matched the best in the Nestle universe”. This was a rare expression from a boss and a confession that left the manufacturing institutions on his feet. Alexander Jost, Oshunkeye’s boss, wrote an opus on him. Here, Oshukeye was not just seen by Mr Jost as an industry titan but an “African Ambassador.” A Kings College of Lagos product, and proficiently trained accountant and administrator from England, no professional management body left him out of their fellowship award rollcall while he was as well bestowed with most prized doctorate award of universities. The numerous awards in the country are competing for space on the shelf in his home, as they want to keep their presence with a man they see as a consultant and mentor of immense quantifi-
https://www.facebook.com/businessdayng
legitimate grounds of the processing of the data override his or her own rights. Where the processing of a person’s data has been restricted such personal data shall, except for storage, only be processed with his or her consent or for the establishment, exercise or defence of legal claims or for the protection of the rights of another natural or legal person or for reasons of important public interest in Nigeria. Right to portability Persons have the right to transmit their personal data from one controller to another controller without hindrance. This right to portability can be exercised where: (a) The processing is based on consent, or (b) On a contract, and (c) The processing is carried out by automated means. Persons, in exercising their right to portability are entitled to their personal data being transmitted directly from one controller to another, where technically feasible. Provided that this right shall not apply to processing necessary for the performance of a task carried out in the public interest or in the exercise of official authority vested in the Controller. It is worthy to mention that the NDPR states that the exercise of the foregoing rights shall be in conformity with constitutionally guaranteed principles of law for the general protection and enforcement of fundamental rights. Right to object to processing Persons also have the right to object to the processing of their personal data intended to be processed for marketing purposes. The next time you are required to provide some personal data for one purpose or another, remember that you have rights in this regard and can make relevant demands to ensure that your personal data is adequately safeguarded.
Nik Ogbulie able value. Born on September 7 1940,in Agege, Lagos State, he had his secondary school education at Kings College, Ikoyi, Lagos from 1954 to 1958 after which he obtained professional accounting education while working with Akintola Williams and company where he was highly recommended and offered a very strong support as one of the very strong accounting trainees. By 1965, he had passed all the requisite tests to qualify him as an outstanding accountant, having qualified by passing the ACCA finals as well as that of the Institute of Taxation of UK. From that moment, his work history changed as he went from one executive training to another across the world and was at the same time being head-hunted for one top position to another. He was as great and as important in all his areas of service but the crowning glory of his career and professional engagement was better seen from the prism of his over 40 years in Nestle Foods, where he led a revolution in corporate performance while using that revered position to be of greater value to his country, Nigeria. The Babalaje of Egbaland is married with children who are making their mark in various fields of human endeavour. For now, he has found time to spread his dictum in public places of professional and intellectual background in his bid to continue to contribute in making Nigeria a better place to live. When next time you see him in the church as an “alter boy” do not just mind, because it does not matter to him: that is the way he lives his life with God. Ogbulie is a Lagos-based financial journalist.
@Businessdayng
10
Tuesday 08 September 2020
BUSINESS DAY
comment
comment is free
Send 800word comments to comment@businessday.ng
What’s Africa’s engagement strategy towards China?
Accountability, transparency and responsibility are imperatives for success STRATEGY & POLICY
MA JOHNSON
C
hina’s presence in Africa is not new. Gavin Menzies, a retired Royal Navy submariner and banker who later became an author in his treatise “1421: The Year China Discovered the World,” documented that “on 2/2/1421, kings and envoys from the length and breadth of Asia, Arabia, Africa and the Indian Ocean assembled amid the splendours of Beijing to pay homage to Emperor Zhu Di, Son of the Heaven.” Since the late 1950s, China has been offering assistance to African states. Chinese focus on investment in Africa was narrow in the 20th Century. But in this age, Beijing’s investment has expanded. China’s expanding involvement in Africa through aids is an integral component of a grand strategy to restore itself to its perceived “rightful” position in global dominance. So, what is Africa’s strategy towards bilateral or multilateral engagement with China? Yet to be seen. But whatever is Africa’s strategy towards engaging China, Xi Jinping has a dream it is vigorously pursuing in Africa. At the heart of Jinping’s strategy in Africa is economic interest. Interest in accessing and exploiting Africa’s vast natural resources. I have read in many journals and newspapers that Africa’s dream is to have infrastructure. It is good for African countries to have infrastructure. But I am yet to know the African country whose loans from China is to actively build the capacity of its people. It is people that will operate and manage infrastructure and possibly conceptualise, design, and produce new ones. This is my view because we are in a world of competition, economic inequality and dazzling technological
capabilities, where ideologies spread like wildfire, and the stakes are too high. We live in a world of uncertainties where the consequences are too dire to hold on to theories that worked centuries ago and hope for the best. I love to remind my respected readers that the centre of gravity of any nation is the people in a civilised society. An investment in Africans acquiring appropriate knowledge will yield the best dividend. If those in government cannot invest in infrastructure and human capital, they should not refer to loans from China as a product of “debttrap diplomacy.” Yes, Africans want infrastructure and that is why when one travels through most Africa’s capital cities and commercial centres, it is hard not to see China’s presence and influence. But loans collected from China by African countries would be repaid with interest within a specified period. In most parts of Africa, new railway tracks are being laid, roads are built, seaports deepened, commercial contracts signed- all these are happening on a weird scale by China- whose appetite for commodities seems limitless. So, questions are being asked by pundits whether China’s strategic grand design promises the much-needed transformation in Africa? Or, is this friendship between China and Africa one of exploitation by the former? Added to the salvo of questions is the urgency to know: “Who really owns the railways in Nigeria: China or Nigeria?” (BusinessDay August 17,2020). Nigerians have expressed fears that Chinese loans may jeopardize sovereignty as members of the National Assembly allegedly uncovers clauses conceding Nigeria’s sovereignty to China. Apart from concerns raised about the ownership of the railways in Nigeria, what generated an uproar recently was an Information Communication Technology contract. The contract in question, according to reports, was a 2018 loan for $400 million from the China Exim Bank to build Nigeria’s National Information and Communication Technology Infrastructure Backbone Phase II Project. It is the word “sovereign” in the clause that has generated the din. With
the exception of those in government, most Nigerians were offended. Nigerian media organisations carried the story condemning the action of the federal government. The social media was completely taken over by the meme that China will seize the country’s national strategic assets. But a few legal experts were quick to add that “there is nothing in the clause that cedes sovereignty of Nigeria to China.” In fact, the Minister of Transport, Rotimi Amaechi says during the interview that: “There is no clause in the contract ceding Nigerian sovereignty to China. There is none! What we ceded was commercial immunity which prohibits any country from taking us to court.” If not Chinese, then who will give loans? Many scholars call the Chinese boom “a phenomenal success story for Africa,” and see it continuing indefinitely. Statistics show that Africa is the source of at least one-third of the world’s commodity but the poorest of all the continents in the world. Despite the depth of poverty in Africa, China will need these commodities as its manufacturing economy continues to grow. “if one understood the economics behind manufacturing, then it would be much easier to understand China’s determination to build roads, airports, seaports, and railroads all over Africa,” according to an article in The Atlantic titled “The Next Empire.” In the midst of controversies however, the Chinese foreign ministry denied that China had any clause in the contract. And that it has always followed one of its terms in any agreement which states that “no imposition of our will on African countries.” Considering the rise in infrastructural development across Africa, one would have expected to see a transformational moment for Africa. A continent without conflict, where more food is produced and more jobs are created. African continent where there is no conflict. But this is barely the case. The narrative of Africa as the world’s poorest continent would have changed positively but for the prevalence of wars, and steady decline in governance in most countries within the continent. If African governments had taken advantage of the injection of funds into an economy of over one
‘
I love to remind my respected readers that the centre of gravity of any nation is the people in a civilised society. An investment in Africans acquiring appropriate knowledge will yield the best dividend
Johnson is an author and a retired naval engineer who has passion for African development and good governance
How to identify your side hustle
I
don’t know about Notorious BIG, but we all know that mo’ money equals mo’ security – not problems! Research has shown that on average, a millionaire (in US Dollars) has seven different sources of income while middle-class individuals have only one. As a millionaire, you have the freedom to go anywhere at any time! Are you looking to go to Christian Dior Spa in Paris after your brunch in Geneva? Yes, you can, being a millionaire will take you there. Being a millionaire gives you the freedom to splurge responsibly, you do not have that pressing guilt that comes when you are about to buy the BMW 8-Series Gran Coupe knowing school fees are due in a few weeks. Why? You are a millionaire, there is plenty more. Being a millionaire also gives you the freedom to live for passion and do what you want. Are you passionate about animals and driven to create an Elephant sanctuary in Ogun State, go right ahead, you are a millionaire! I’ll leave you to keep researching the advantages of being a millionaire over being working class, but I am solidly planting a flag in the millionaire camp. In my quest to become a millionaire and diversify my sources of income, I hit the first block:
“what else can I turn into a source of income?”. I went to my best friend, Google, and searched for how to identify your side hustle. I read many articles that say go for things you are passionate about - you must love the idea; passion is what drives you forward and keeps you going when things are tough. Passion is what people see and why they choose to buy from you. But I found I can be passionate about a lot of things that will not bring me money. So, I kept searching! I stumbled across articles that say look at what others are doing, what they are making money from and you should get into that. And I thought to myself, there has to be a better way than copying - I mean we do not need another printing press in Shomolu. So, I kept searching! Several years later, I have now found two successful ways to identify your side hustle and I will share these with you: 1) Identify your character strengths! “Character Strengths are the positive parts of your personality that impact how you think, feel and behave”. Once you have identified your character strengths, reflect on them and identify opportunities where you can use your strengths. Using your character strengths to generate an income will help you find meaning in what you do. www.businessday.ng
A couple of my character strengths are Leadership and Love of Learning, so I have identified opportunities within the role of a C-Suite Executive as well as being a Professor where I learn to teach. You can identify your character strengths by completing the VIA Survey of Character Strengths from the University of Pennsylvania. 2) Complete a career finder personality test! A combination of Myers & Briggs’ personality types and Holland Code system of career typing helps you predict the right career path for you based on your personality. Completing the career finder personality test, I have found that some of the careers I can explore include Training & Development Manager as well as Human Resources Manager. You can identify your careers to explore by completing The TypeFinder Career Planning Test. Identifying opportunities and potential side hustles is the first step to diversifying your income. Once these prospects are identified, you can then take the next step – breaking into the market. You will need to understand the market; where the white spaces are, who the key players are, how they are positioned, and so on. Contact Versa Research for all your market understanding needs!
https://www.facebook.com/businessdayng
billion people, perhaps Africa would have been ready in all respects to participate actively in global trade under the AfCFTA. Instead, the begging bowl strategy is what most African countries adopt. It is the adoption of the begging strategy that makes most African countries ask someone else to take care of their problems. But Nigeria’s transport minister says: Who else is going to lend us money for infrastructure?” We started with Europeans. This was followed by the Americans. Now, Nigeria and other African countries look up to China as a global power from where their help flows. But when the infrastructure fails as a result of roads that are sub-standard; trains that are likely to be unserviceable, one can only hope that policy makers will not tell the government of Xi Jinping to either produce another train or provide loans for the repairs. Pundits on Sino-Africa relations keep asking relevant questions on China’s burgeoning partnership with Africa: Is a hand’s off approach to governmental affairs appropriate? Can Chinese money and ambitions succeed where Western engagements have manifestly failed? Or, can we take it that China has become the latest in a series of colonial and neocolonial powers destined like others to leave its own legacy of bitterness and disappointment? Can Africans blame China? Negative! I say this because there is no free launch anywhere in the international arena. Who does not like free gifts? Although African countries like free gifts, China is playing a strategic role in Africa that will enhance its national interests. So, African countries that have taken loans from China are encouraged not to default. What should guide policy makers who travelled to Beijing with a begging bowl strategy is to avoid a loan default. If African countries that took loan from China defaults, they should be prepared in all respect for arbitration and may forfeit some strategic national assets. Thank you!
Busola Akin-Olawore I now have three side hustles, and what I have realised is that having them helps me 1) Increase and diversify my sources of income 2) Explore my passions and pursue other career paths without losing my stable job 3) Develop my skills especially time management skills, become a well-rounded person and challenge myself 4) Expand my network Before you go off and start building side hustles, I should tell you that it is not for the faint of mind. It is another responsibility and another job; it comes with its own set of challenges and concerns. Be aware that it will be more work than your current 9-5 because you play the role of product/service manager, accountant, customer service and admin. It is very easy for you to get burnt out and the slow pace of the process might be challenging but to make it, you have to stay focused on your goal - being a millionaire. Akin-Olawore is the Founder & Director of Research at Versa Research; boutique research firm that gathers data on the market, marketing, social and consumer trends.
@Businessdayng
BUSINESS DAY
Tuesday 08 September 2020
comment
11
comment is free
Send 800word comments to comment@businessday.ng
Capitalism and governance
Rafiq Raji
W
hat is capitalism? This is the question Harvard University professor Rebecca Henderson starts with in her 2020 book “Reimagining capitalism: How business can save the world “. Capitalism is certainly “the greatest source of prosperity the world has ever seen”. But it is also on “the verge of destroying the planet and destabilising society”. Capitalism has been a huge success and a disastrous failure. Henderson’s thesis
is that a rethinking may enable us to enjoy more of the good and prevent or mitigate the bad. According to Henderson, the three greatest problems of our time are massive environmental degradation, economic inequality, and institutional collapse.” Fossil fuels, which drive our industries, are destroying the earth’s climate. Our oceans are becoming acidic, with sea levels rising in tandem. There is increasingly less arable land. And we no longer have enough fresh water to meet our needs. If we do not change the way we do things, there would be deeper economic recessions, more flooding, and hunger in the nearer future. In Africa, we know a lot about environmental degradation. Foreign firms extract mineral resources from our lands with scant regard for sustainability. But are they entirely to blame if they do so in the full glare of the authorities with relative impunity? We also know about hunger, drought, and increasingly now, flooding. Imagine the bizarre contrast. One moment, we worry about little or no rainfall. Then it pours, and our worry turns to the harvest, as a big part is washed away. We also know a bit about the value of fresh water. With dysfunctional or
no water infrastructure in most of our cities, we find solace in water drawn from boreholes and wells, which we are barely able to purify enough to avoid falling ill. But even that is becoming scarce in fast-drying northern lands owing to climate change. Such is the value now placed on the resource that one African government is mulling the enactment of a law to regulate water as a resource like it does crude oil and other extractives. Talk about an example of capitalism gone too far or governance gone awry. But our type of capitalism is not the free-market kind. Ours is crony capitalism, which Henderson defines as “a political system in which the rich and the powerful get together to run the state – and the market – for their benefit.” “Extractive elites monopolise economic activity and systematically underinvest (when they invest at all) in public goods such as roads, hospitals, and schools (Henderson, 2020).” Our elites are extractive. So even when they mean well – they rarely do – we find it hard to believe them. Thus, if you wonder why there are uproars when supposedly development-oriented policies are announced, this is why. The people do not believe that they would be
‘
Our elites are extractive. So even when they mean well – they rarely do – we find it hard to believe them. Thus, if you wonder why there are uproars when supposedly developmentoriented policies are announced, this is why. The people do not believe that they would be the ultimate beneficiaries
the ultimate beneficiaries. So, when electricity tariffs are raised, petroleum pricing liberalised, and water about to be regulated, there is hardly any explanation by a government that would be convincing enough to its majority poor, whose already meagre earnings would afford them even less. What is the role of business in all these? Whether our type of capitalism is underpinned by cronies or the vagaries of the markets or both, their shareholders are the main beneficiaries. So, in order to keep their spoils, they have to be mindful of the gaps in public governance in their respective jurisdictions. Our power companies should abide by the deliberate price discrimination mechanism in the regulations to ensure the poor are able to afford enough electricity for their needs. Oil and mining companies should extract resources in our lands with as much care as they do back home. And our governments should certainly not regulate the very basic amenities they have failed to provide. “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”
Restriction of business objects under the CAMA 2020 – a gain or bane for corporate practice?
I
t is no longer news that the President of Nigeria has assented to the Companies and Allied Matters Act 2020. While most controversy that has greeted the passage has largely emanated from faith-based organisations, there are however other pertinent concerns buried within its 870 sections. This discourse intends to specifically address the challenges that may arise from the removal of the restriction placed on the business object of the company on the one hand, and the requirement of placing the business object restrictions of the company in its articles on the other hand. The business object of a company The business object of a company sets out the business activities the company may lawfully carry out. It prescribes exhaustive businesses at least before the 2020 Companies and Allied Matters Act- which the company may undertake but by no means mandated to entirely carry out. The Company and Allied Matters Act 1990 (the Old Act) restricted the businesses which a company can engage in to only that contained under its Memorandum of Association so that when a company undertakes a business outside this scope, it is said to have acted ultra vires its powers. Section 39 of the Companies and Allied Matters Act 1990 (Old CAMA) places the aforementioned restriction on the business object of a company. The section states that “A company shall not carry on any business not authorised by its memorandum and shall not exceed the powers conferred upon it by its memorandum or this Act.” Subsequent sub provisions of the above section, retains the validity of the business or transaction and precludes any person save for investors and creditors of the company to question its validity on the ground that the company has exceeded the scope of its registered business object. Section 39 above is a Nigerian solution to the common law problems in corporate law. At common law, a company is limited to acting within the objects set out in its memorandum. Anything purported to be done by a company beyond that object is ultra vires and void. The Companies and Allied Matters Act 2020 (the new CAMAs) has now supposedly
done away with this restriction requirement. Section 35 of the New Act provides that “Unless a company’s articles specifically restrict the object of a company, its objects are unrestricted”. This new provision is a copious replica of Section 31 of the English Company Act of 2009 and essentially, advances two new introductions. The first is that a company can now engage in any business at all save for when that business has been restricted by its articles. While the second proposition is that restriction on business objects will now be contained in the articles for it to hold legal weight. This is notwithstanding that the business object is contained in the Memorandum of Association. The good intentions of introducing this provision may be overwhelmed by subsequent resolutions of the confusions invited by a combined reading of it and other provisions of the companies and allied matters Act. This difficulty especially relates to transitional problems, application defects and fluid conceptualisations, we shall discuss them accordingly. Transitional provisions The first difficulty that may arise from the application of the New CAMA provision is transitional issues. This essentially is caused by the removal of Business object restriction from the memorandum and placing it in the articles. Under the Old CAMA, the business objects of the company and any restriction to be placed thereon, are solely matters reserved for the Memorandum of Associations. A combined reading of Sections 27, 38 and 39 of the old CAMA will evince this fact. Further, Section 27, 43 and 44 of the New CAMA is even in all fours with the above position of the law on this subject. In a precipitous turn of events however, Section 35 of the New CAMA provided that any restriction to be placed on the business object of the company should be contained in Its articles of association. The reasonable interpretation of this is that while the Memorandum of association is the authorised business object host, any restriction to be placed on it going forward should be contained in the Articles of Association of the company. Some restrictions could have been stipu-
www.businessday.ng
lated previously in the Memorandum of Association and not in the articles as is the norm under the old regime. The question then is what is the position of the new CAMA on their application? Section 45 of the New CAMA purports to provide a solution. It provides that such restrictions placed on the power and capacity of the company by the Memorandum of Association to carry on its authorised business or object (emphasis supplied) can be enforced by certain persons. However, the restriction earlier referred to is placed on the business object and not the authorised business object. In other words, whatever business object not restricted becomes the authorised business of the company upon incorporation, Section 45 above supposed that the restriction is placed on the authorised business of the company. Section 45 therefore falls short of providing for a transitional provision. At most, corporate law practitioners can only really rely on the saving provisions of Section 869 of the New CAMA. The approach adopted by the English Company Act and that of Hong Kong is preferable. Section 28 of the English company Act provides that the Provisions in the memorandum of existing companies will be treated as the provisions of the Articles if they are of a type that will not be in the memoranda of companies. In the same line, companies’ ordinance of Hong Kong prescribed that existing clauses of their MOA will be treated as part of the articles. Application defects Section 44 of the New CAMA prescribes the implication of companies acting outside the scope of their activities. The Section makes the actions of companies engaging on an object expressly prohibited by its memorandum of association as ultra vires. Noticeably, this section does not refer to the Articles of Association which the New CAMA has made the custodian of the business object restraint. With this understanding lies another difficulty- what will be the legal consequence if a company acts beyond its object as contained in the articles? The New CAMA is silent on this in the light of Section 44 referring to the Memorandum instead of the articles of association. God forbid that we shall refer to the
https://www.facebook.com/businessdayng
Christian Tochukwu Onuora
adverse provision of the common law. Fluid conceptualisations Section 44 has two problems. The first was what was adumbrated above. The second is the use of the words “Expressly prohibited”. An “express prohibition” may differ from “specific restriction” as used in section 35. Save for the inclusion of some statutory bars on the powers of the company such as offering donations or gift to a political party, it is rare to see a company’s Memorandum of Association expressly prohibiting certain businesses. The new CAMA fails to adopt a unified and nonconflicting approach to the restriction that can be placed on the business object. Is It the intention to make acts of the company outside the specific restricted objects as ultra vires or expressly prohibited objects as ultra vires? It is not exactly clear from the altitude of the act. In conclusion, the overall intention of the passage of the Companies and Allied Matters Act 2020 to open up the business environment from unnecessary legal and regulatory bottlenecks of the Old CAMA may be stalled by unforeseen difficulties arising from its application. A holistic application of the Act must be in perspective while considering the business object of the company. Necessary steps therefore need to be taken to make the good intentions of the Act more assertive in actual practice. Onuora is a Lagos based Corporate lawyer with Taxation and Corporate law practice as his key practice areas. He can be reached via 12onuora@gmail.com
@Businessdayng
12
Tuesday 08 September 2020
BUSINESS DAY
EDITORIAL Publisher/Editor-in-chief
Frank Aigbogun
FG now seeing the bigger picture on subsidies Nigeria must remove every vestige of subsidy, it is killing the economy
editor Patrick Atuanya DEPUTY EDITORS John Osadolor, Abuja Tayo Fagbule NEWS EDITOR Osa Victor Obayagbona NEWS EDITOR (Online) Chuks Oluigbo MANAGING DIRECTOR Dr. Ogho Okiti EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, STRATEGY, INNOVATION & PARTNERSHIPS Oghenevwoke Ighure ADVERT MANAGER Ijeoma Ude MANAGER, CONFERENCES & EVENTS Obiora Onyeaso BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai COPY SALES MANAGER Florence Kadiri DIGITAL SALES MANAGER Linda Ochugbua GM, BUSINESS DEVELOPMENT (North)
Bashir Ibrahim Hassan
GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu HEAD, HUMAN RESOURCES Adeola Obisesan
P
erhaps one of the more enduring impacts of the Coronavirus pandemic is the clarity it has brought on the ruinous impact of consumption subsidies. After years of wasteful spend, the Federal Government has finally said goodbye to the catastrophic policy – even if unwillingly. This shift is not the product of deep thinking, rather a burgeoning fiscal crisis on account of a slump in crude oil earnings and a rampaging pandemic were the triggers. With the exception of the new fiscal bill 2020, this government’s fiscal policy has been primeval leaving the economy comatose. Reflective in the recent PMS price increase to N151.56, the fuel subsidy removal policy of the FG is commendable however, we canvass for the removal of every vestige of subsidy in the economy in order to attract productive investments. This is non-negotiable if Nigeria really wants to achieve growth and development. We must avoid henceforth, mistakes made in the past and act COVID-19 induced lessons. The Buhari government distrust private capital for investments but gladly accept it as
loans. It wastes resources propping up the naira while ignoring billions of dollars’ worth of economic loss because investors, uncertain of recovering their money, keep them away. It builds expansive infrastructure but excludes mechanisms to recover costs. Lacking understanding of how markets function, it regulates thriving industries to death. Rather than push for inclusive trade, it shuts borders and is imposing import-substitution in an economy where it is cheaper to move a container from China to Lagos, than from Apapa to Sagamu. Sometime this year, the FG secured $750 million funding from the World Bank for the ailing power sector. The condition for this loan is that the government stop subsidising power and ensure tariffs guarantee commercial returns. It has spent over N380 billion so far on electricity subsidies in 2020 after bailing out operators with the princely sum of N1.7 trillion since May 2015. Since 2017, it has been burning over N1 trillion yearly to subsidise petrol while defunding healthcare and education. It maintains a dizzying amount of bureaucracy to manage the business of importing refined petrol from Custom officials to those managing petroleum equalisation funds. Yet, it spends a
fortune paying workers of the three petroleum refineries who don’t even produce enough petrol to power their own generators. As COVID-19 led to shut-down of factories and airlines, the demand for oil crashed and prices fell providing an opportunity to get out of fuel subsidies completely. Instead, the government announced an end to subsidies but it would still determine prices. The Buhari government has cultivated the socialist posture and has gone to great lengths to disassociate itself from moves to raise prices of petrol. It took massive lobbying by Ibe Kachikwu, former minister of state for petroleum resources and officials of the ministry to secure Buhari’s approval to raise the pump price of petrol in 2016. Soon after oil prices rose and the government resumed paying subsidies but declined to speak about it publicly. The government’s actions may be inspired from its rear-view focus in running the affairs of the nation. It met an economy in shambles when it assumed office, rather than get to work, it spent months lamenting the state of affairs. In keeping with this philosophy, it refused to abolish petrol subsidies fearing a similar backlash former President Goodluck Jonathan received in January 2012 when he announced
an end to the policy which almost sank his government. But at the time, the argument for subsidy removal was unpopular in the context of the profligacy of government officials and widespread corruption which many Nigerians attribute low government earnings to rather than subsidies. This is why the mind-numbing disclosures of fraud from the subsidy scheme in 2011 didn’t sway the masses, in any case, it was the role of the government to prevent these frauds. In reality, though, the subsidy is untenable today as it was in in 2012. For example, in 2011 alone, $9.3 billion was spent on subsidising imported refined petrol. This represented about 30 percent of Nigeria’s government’s expenditure, 4 percent of GDP and 118 percent of the capital budget. In comparison, Nigeria’s education, health and works/roads’ budget for 2011 were just a mere $2.2 billion; $1.32 billion and $680 million respectively. But the Buhari administration which rode into power on the wave of popular discontent over corruption has continued to maintain the same policies like subsidies that bred corruption in the past. So, the current decision to abolish them augurs well for the economy but to make them sustainable, they must be backed by law.
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 Konyin Ajayi
Enquiries NEWS ROOM 08169609331 08116759816 08033160837
} Lagos Abuja
ADVERTISING 01-2799110 08033225506 SUBSCRIPTIONS 01-2799101 07032496069 07054563299 DIGITAL SERVICES 08026011296 www.businessday.ng The Brook, 6 Point Road, GRA, Apapa, Lagos, Nigeria. 01-2799100 Legal Advisers The Law Union
Mission Statement To be a diversified provider of superior business, financial and management intelligence across platforms accessible to our customers anywhere in the world.
OUR Core Values
BusinessDay avidly thrives on the mainstay of our core values of being The Fourth Estate, Credible, Independent, Entrepreneurial and Purpose-Driven. • The Fourth Estate: We take pride in being guarantors of liberal economic thought • Credible: We believe in the principle of being objective, fair and fact-based • Independent: Our quest for liberal economic thought means that we are independent of private and public interests. • Entrepreneurial: We constantly search for new opportunities, maintaining the highest ethical standards in all we do • Purpose-Driven: We are committed to assembling a team of highly talented and motivated people that share our vision, while treating them with respect and fairness. www.businessday.ng
Tuesday 08 September 2020
BUSINESS DAY
www.businessday.ng
https://www.facebook.com/businessdayng
@Businessdayng
13
14
Tuesday 08 September 2020
BUSINESS DAY
COMPANIES&MARKETS The Companies and Allied Matters Act 2020 - what you need to know Part 9 – schemes of arrangement UDO UDOMA & BELO-OSAGIE
Background The Companies and Allied Matters Act (Chapter C20) Laws of the Federation of Nigeria 2004 (“CAMA 1990”) was initially made law in Nigeria in 1990 as a decree of the military government. It was modelled on the English Companies Act 1985. For thirty years, there were no significant amendments to the CAMA 1990, notwithstanding that England has, over the past three decades, amended and replaced its own Companies Act. Nigerian companies had to, essentially, rely on a 30-year old law to govern the way businesses operate in our dynamic and exponentially evolving global community. However, this all changed on Friday the 7th of August 2020, when President Muhammadu Buhari, gave his assent to the Companies and Allied Matters Act 2020 (“CAMA 2020”). In the course of a 12-part series, Udo Udoma & BeloOsagie will provide a review of the provisions of the CAMA 2020, highlighting changes that have been introduced into the body of Nigerian company law by this groundbreaking legislation. Scheme of arrangement – the concept Section 710 of CAMA 2020 defines an “arrangement” to mean “any change in the rights or liabilities of members, debenture holders or creditors of a company or any class of them or in the regulation of a company, other than a change effected under any other provision of this Act or by the unanimous agreement of all parties affected”. Simply put, a scheme of arrangement is an arrangement between a company and its shareholders or its creditors for the purpose of effecting a transaction which cannot be effected pursuant to any other provision of CAMA. Examples of transactions that are usually implemented using schemes of arrangement include mergers and corporate restructurings. A scheme of arrangement could also be used in the context of a share acquisition to ensure that the shares sought to be acquired by an investor are acquired from all shareholders on a uniform basis. The focus of this article is on schemes of arrangement and mergers. The process of implementing a scheme of arrangement or merger Where an arrangement is proposed between a com-
pany and its members, an application is submitted to the Federal High Court (“Court”) and, pursuant to that application, the Court will order the company to hold a meeting of its members – commonly referred to as a court-ordered meeting. The resolution required to approve a scheme of arrangement (“Scheme”) is a special resolution, that is, a minimum of 75% of the votes cast by members present and voting at the court-ordered meeting. Under the CAMA 1990, once the Scheme was approved by the shareholders, the Court had the power to refer the scheme to the Securities and Exchange Commission (“SEC”) to investigate the fairness of the Scheme and, thereafter, submit a report to the Court. If the Court was satisfied as to the fairness of the Scheme, the Court would sanction the Scheme and, once this is done, the terms of the scheme become binding on all the shareholders of that company. The Scheme became effective when a certified true copy of the Court order was registered with the Corporate Affairs Commission. Re-introduction of provisions relating to mergers, share acquisitions and other forms of corporate restructuring The CAMA 2020 re-introduces provisions prescribing the process for (i) effecting mergers and other forms of arrangements; and (b) acquiring the shares of dissenting shareholders. The background to this is that when the Investment and Securities Act 1999 (“ISA 1999”) was passed, it repealed Part 17 of the CAMA 1990. Some of the repealed provisions included sections 591 to 593 of CAMA 1990 which dealt with schemes of arrangement. Specifically, section 591 dealt with reconstruction and merger of companies, section 592 dealt with powers to acquire shares of dissenting shareholders and section 593
dealt with the right of dissenting shareholders to compel the acquisition of their shares. The text of these three sections were deleted from the CAMA 1990 and re-enacted as sections 100 to 102 of ISA 1999. When the Investment and Securities Act 2007 (“ISA 2007”) repealed the ISA 1999, however, only sections 101 and 102 of the ISA 1999 made it into the ISA 2007 - as sections 129 and 130; section 100 of the ISA 1999 was omitted. The effect of this omission was that there was no longer a statutory basis for the market practice that had developed in Nigeria, in relation to the process by which schemes of mergers and other forms of reconstruction, were carried out (that is to say, the process of applying to the court for an order to convene meetings to approve the scheme and, ultimately, to sanction the scheme and make a wide range of orders relating to the transfer of rights and liabilities under the scheme). The Federal Competition and Consumer Protection Act 2018 (“FCCPA”) was signed into law on 30th January 2019. One of its effects was the repeal of sections 118 – 128 of the ISA 2007 dealing with mergers and acquisitions. Unlike the previous repeal of Part 17 of the CAMA 1990 and the repeal and re-enactment of the ISA 1999 as the ISA 2007, the text of the repealed ISA 2007 provisions was not reproduced in the FCCPA. Fortunately, the CAMA 2020 re-introduces the texts of the previous sections 591 – 593 of the CAMA 1990 (which are very similar to sections 100 – 103 of the ISA 1999). This re-introduction is significant for several reasons: a) it will ensure that there is no lacuna in the process of effecting a scheme of arrangement and that the law once again sets out clearly the process by which all forms of schemes can be effected; b) there will once again be statutory backing of the
www.businessday.ng
right to invoke the Court’s jurisdiction to make orders for various matters to be dealt with in the context of a merger such as the transfer of rights, assets and liabilities from one company to another, the allotment of any shares or other interests and matters incidental or consequential to the Scheme; c) the process for dealing with dissenting shareholders in a scheme (i.e. sections 129 and 130 of the ISA 2007) has been reunited with the provisions that set out how to conduct a scheme (i.e. the repealed section 591 CAMA 1990 and section 100 ISA 1999); and d) as a consequence of the above, the CAMA 2020 contains a complete set of provisions for the conduct of schemes of arrangement including schemes of mergers. The framework for implementing schemes was re-introduced with two important changes. Firstly, the merger becomes effective and binding on the companies once it is sanctioned by the Court and, therefore, even before the Court sanction is filed at the CAC. The Court sanction must, however, be filed at the CAC within 7 days. Secondly, section 711 does not empower the Court to refer the scheme of merger to the SEC to consider the fairness of the scheme – which section 715 does. Consequently, while it is possible to structure a scheme under both sections 711 and 715, schemes structured under s. 715 can be referred by the Court to the SEC to determine the fairness of the scheme and, schemes under s.715 do not become effective until the Court order sanctioning the scheme has been filed at the CAC. Certain companies (for example, private and unregulated companies) may, therefore, consider implementing mergers or other forms of arrangement or reconstruction using the simplified framework prescribed in section 711 of the CAMA 2020. This series was produced by Udo Udoma & Belo-Osagie for general information purposes only and does not constitute legal advice and does not purport to be fully comprehensive. If you have any questions or require any assistance or clarification on how the subject of this guidance note applies to your business, or require any company secretarial or business establishment services, please contact us at uubo@ uubo.org
https://www.facebook.com/businessdayng
Offshore Capital flows to Emerging Markets slow to five-month low of $2.1bn in August MERCY AYODELE & OLUWAFADEKEMI AREO
E
merging Markets (EM) attracted only $2.1 billion offshore capital flow in August, 86.1 percent decrease from the $15.1 billion recorded in July with most regions recording outflows. The August capital flows for EMs is the lowest in five months from the contraction seen in March. According to the Institute of International Finance (IIF), data shows that the rebound inflows to EM is small compared to outflows earlier in the year. “One reason may be growing differentiation in flows to EM, with some markets seeing outflows that continue to build,” IIF said. Regionally, EM Asia was the most benefited region, registering inflows of $4.7 billion, followed by Latin America ($0.7 billion), with all the remaining regions posting outflows. Equity and debt inflows for the period were $4.4 billion and -$2.3 billion respectively, according to the Institute of International Finance (IIF). “Gyrations in the US-China trade narrative, a fresh bout of market turmoil in some EMs and lingering questions on the post COVID-19 recovery path marked
the dynamics of non-resident flows during August”, said the Washington based institution. “ Ne gat i v e s e nt i m e nt on emerging markets approached extreme levels during March, setting the stage for a period of stabilization and more two-way discussions on risks and opportunities in the EM space”, said IIF. Offshore capital flows in March were negative as equity and debt flows were -$52.4 billion and -$31 billion respectively. This was greatly attributed to the impacts of the COVID-19 pandemic and series of lockdowns implemented by emerging markets to curb the negative impact which roiled the markets. There was, however, a rebound in April as capital flows bounced to $17.1 billion, reversing the recorded outflow in the previous month. The rebound however slowed in May to $4.1bn before a swift jump to $32.9 billion in June, and it hit $15.1 billion in July. Debt flows posted their first outflow reading since the March shock, at -$2.3 billion while on the equity side, inflows to EM x/ China equities amounted to $3.8 billion, while flows to China posted marginal gains of $0.6 billion.
Only Six subsectors of the Nigerian Manufacturing sector expanded in August 2020 …as manufacturing PMI contracted by 48.5 index points OLUWAFADEKEMI AREO
O
nly six subsectors of the 14 subsectors surveyed in Nigeria’s manufacturing sector showed expansion in the month of August, according to the PMI report released by the Central Bank for August. The expanding subsectors include non-metallic mineral products; cement; plastics & rubber products; transportation equipment; chemical & pharmaceutical products and textile, apparel, leather and footwear. Nigeria’s manufacturing Purchasing Managers’ Index (PMI) contracted by 48.5 index points in the month of August, indicative of a four consecutive months contraction. Nonetheless, manufacturing supply delivery time remained faster in August at 53.0 points while production level, new orders, employment level and raw materials inventory continued to contract. The first contraction was reported in May 2020 at @Businessdayng
42.4 index points and the months after, June and July also recorded contractions of 41.1 and 44.9 indices points respectively. Nigeria’s manufacturing Purchasing Managers’ Index (PMI), a gauge for manufacturing point of view and therefore uses their responses to set questions on core variables in their businesses. A PMI above 50 points shows that the manufacturing/non-manufacturing economy is generally expanding, 50 points depicts no change and below 50 points indicates that it is generally contracting. The contraction the manufacturing sector has seen since May 2020 is closely tied to the effects of the restrictions on economic activities in a bid to curb the coronavirus pandemic. The August manufacturing PMI of 48.5 index points is however an improvement from the 44.9 index points recorded in July as there has been a gradual normalisation of the economy as lockdown is being eased and the economy is opening up.
Tuesday 08 September 2020
BUSINESS DAY
15
COMPANIES&MARKETS Cititrust unveils Asset Management Subsidiary Bank stocks gain by most in 3 months after CBN slashes interest rate on deposits LOLADE AKINMURELE
N
i g e r i a n bank stocks gained by the most in three months Tuesday after the Central Bank of Nigeria (CBN) reduced the interest rate on savings deposits to a minimum of 1.25 percent per annum from 3.75 percent. The rate reduction which became effective today (Sept.1) is expected to translate to increased profitability for banks as it reduces their cost of funds. It means they can save money that would have gone into paying higher interest on savings deposits. Banks with already low cost of funds like Guaranty Trust Bank and Zenith Bank, are however expected to benefit the least from the new directive. The banking index, which tracks the share price movement of publicly listed banks in Nigeria, was up 1.25 percent, with the big banks gaining the most in three months, according to data from the Nigerian Stock Exchange (NSE). Ecobank gained the
most with a 6.4 percent gain Tuesday, the biggest jump in three months. United Bank for Africa (UBA) was also up 4.8 percent Tuesday while Access Bank climbed 3.23 percent. First Bank was up 3.06 percent while Stanbic IBTC gained 1.25 percent. Zenith Bank and Guaranty Trust Bank rose 0.6 percent and 0.39 percent respectively on the day. “Given that savings deposits account for around
20 percent of the deposit liabilities of commercial banks, the new directive should be positive for banks in terms of a slight reduction in their overall cost of funds,” analysts at Lagos-based investment bank, FBN Quest said in a Sept.1 note reacting to the new directive. “All else being equal, our back of the envelope calculations indicate that on average, the cost of funds for our universe of banks
could potentially decline by around c.50bps in Q4,” the FBN Quest analysts said. “In terms of earnings impact, we estimate an average increase of around 8 percent in the 2020 Profit Before Tax (PBT) for our banks universe.” They how ever add a caveat that the stringent rules around interest on savings make it doubtful that the impact will be that material.
C
FS Group Plc, a subsidiary of Cititrust Holdings Plc, a Pan African Investment Holding Company, has launched a wholly-owned and new Investment/ Asset Management Company subsidiary, Cititrust Asset Management following the receipt of approval from the Securities and Exchange Commission (SEC) for the firm to provide Portfolio Management to corporations and institutional investors as well as Wealth Management, structured investments and other financial advisory services. The unveiling and remarkable feat is announced in pursuant of the Fund/ Portfolio Manager License granted to Cititrust Asset Management Limited on August 31, 2020 in terms of the Investment & Securities Act (ISA) No. 29 of 2007 to conduct capital market transactions. The Country Chief Executive of CFS Group Plc., Ikechukwu Peter said “The launch of the Asset Management business ties in with our plan to become a dominant player in the Financial Services sector. We are enthusiastic at the unique opportunity to bring investment products to the market as our goal is to constantly provide a wide
range of solutions to support the evolving needs of our partners and the entire investment community”. “The issuance of this approval by the Securities and Exchange Commission is a laudable development, one that will most definitely lead to an unprecedented basis for value creation within the Asset Management Space,” Peter said. Speaking on the vision for Cititrust Asset Management Limited (“CAML”), the Group Chief Executive of Cititrust Holdings Plc., Adeyemi Adefisan said: “we intend to support African Businesses and unlock the continent’s potentials through the management of several investment funds and provision of financial advisory services. Our focus is on growing wealth for our esteemed clients through our well-thought-through products”. “At Cititrust, our people have extensive experience in the financial services sector across Africa and are devoted to pooling complementary resources and functions to give clients the best value. We look forward to offering unique and creative solutions backed up by world class technology to transform current market offerings and do more for our clients”, Adeyemi Adefisan said.
FBNInsurance-Sanlam promises continued quality service to brokers Six banks begin GH QR code deployment in Ghana MODESTUS ANAESORONYE
F
BNInsurance together with its subsidiary, FBN General Insurance and its new owners, the Sanlam Group has pledged to provide excellent services to its teeming clients. The assurance was given during a virtual Brokers Forum organised by the Group, aimed at welcoming the Brokers to the Sanlam family while providing an overview of the Groups operations and reassuring the Brokers of a seamless transition with the new ownership. The Forum was well attended by over 30 top ranking Brokers of FBNInsurance and FBN General Insurance as well as the Executive members of both businesses and the Sanlam Group. Speaking at the forum, Heinie Werth, chief executive officer of the Sanlam Emerging Markets (SEM), stated that the core strategy of the Sanlam Group is to be one of the leading pan-african financial service providers. “With a business presence in
33 countries in Africa, we want to be the preferred service provider across the continent when it comes to providing financial solutions and it is part of our ambition to be the number one pan-african financial services provider.” On the way forward following the transfer of ownership of FBNInsurance and its subsidiary, FBN General Insurance to Sanlam, Werth stressed that the role of the Group is to leverage Sanlam’s 103 year old pedigree and provide the Management of both companies with the requisite support and technical skills to bring new products and services to the Nigerian insurance market. While addressing the Brokers’ further, Werth sought their support and commitment in building and growing the Group’s operation in Nigeria, stressing that “We are optimistic that the FBNInsurance and FBN General Insurance teams will continue to provide the same excellent services to you and your clients that you have become accustomed to over the years. There is no doubt about this.” In the same vein Val www.businessday.ng
Ojumah, managing Director/ CEO, FBNInsurance appreciated everyone in attendance, especially the Brokers for their invaluable support to the Nigerian life and general insurance businesses and craved their indulgence for continued support to FBNInsurance and FBN General Insurance. Bode Opadokun, managing Director/CEO, FBN General Insurance on his part applauded the Brokers for their continued support to both businesses over the years while reassuring them: “We remain committed to partnering with you in offering innovative product solutions to our customers and we are open to more suggestions that would help improve our service delivery to you,” he said. With over a hundred years in wealth creation, Sanlam, a leading diversified pan-African financial services group, has a business that cuts across 42 countries globally. Listed on the Johannesburg and Namibian Stock Exchanges, the market capitalisation of Sanlam is over $7billion with 104,000 employees across the world.
IFEOMA OKEKE
S
ix banks in Ghana have initiated services to allow the public pay for goods and services through the universal Gh QR code. The banks are Ecobank, GCB Bank, Zenith Bank, Bank of Africa, Fidelity Bank and Agriculture Development Bank. The remaining banks are still in the process to enable them begin the rollout. Mahamudu Bawumia,Vice President of Ghana, launched the universal QR code in March this year. The service adds on to the plethora of electronic payment solutions that the Ghana Interbank Payment and Settlement Systems (GhIPSS) has rolled out over the years. With the QR code, customers only need to scan the codes displayed at various shops and other outlets with their smartphones to make payment. Those who do not have smart phones can pay with their feature phones by dialling a code that will also be displayed at the merchant’s location. QR code is cheap and easy to set up. It is also a quick and secure way to
https://www.facebook.com/businessdayng
make payment. It takes away the direct contact associated with cash transactions, which makes it safer to use during the Covid-19 pandemic. Ecobank had earlier deplored QR codes but could only be used by their customers.However with the introduction of the Gh QR code, Ecobank has converted most of their existing QR codes of clients, to make them acceptable to all customers regardless of their banks. The other five banks have begun deploying their Gh QR codes at various outlets. Archie Hesse,Chief Executive of GhIPSS, commended the banks that have started deployment and encouraged businesses to liaise with banks to have the Gh QR code installed to increase their payment options to customers. Hesse also challenged the remaining banks to quicken up the processes, as they risk losing their clients to other banks. The QR code for payment is simple to set up as it only involves generating unique QR codes which can be a mere sticker posted on the wall of the shops or on a small stand. @Businessdayng
“Once you find the QR Code displayed, you just have to scan and you pay or dial the USSD code and pay, it is that convenient. Gh QR is universal so anyone can use any of them, regardless of your bank”, Hesse stressed. A wide range of businesses including taxi drivers, small shops, super markets, pharmacies, chop bars, restaurants as well as major service providers can all use QR codes to accept payments, the GhIPSS Boss noted. Ghana’s payment system has been modernised with the introduction of many electronic payment solutions that have made payment a lot more convenient, secure and faster. The addition of the Gh QR code has increased the choice that customers have to pay for goods and services. This will eliminate the several instances where businesses lose out, because the customer has run out of cash. Currently customers can pay from either their bank account or mobile money wallet through different channels such as MoMo pay, POS and now Gh QR code among others.
16
Friday 08 September 2020
BUSINESS DAY
Friday 08 September 2020
BUSINESS DAY
17
INTERVIEWS
CAMA 2020: What it is, what it is not – CAC registrar general GARBA ABUBAKAR, Registrar General of Nigeria’s Corporate Affairs Commission (CAC), in this interview with JOHN OSADOLOR and HARRISON EDEH, speaks on the controversial Companies and Allied Matters Act (CAMA) 2020. He gives blow-by-blow explanation of the various sections of the Act and what makes it different from the CAMA 1990.
T
alk to us through some of the new developments in the new CAMA at it replaces the one
of 1990. As you may be aware, on the 24th of July, 2020, Mr. President assented to the new Companies and Allied Matters Act (CAMA) bill which repealed and replaced the CAMA Act 1990. The new law will soon be gazetted and it’s supposed to take effect immediately after it is gazetted. There are major developments in the new law that will change the face of our company’s regulation and supervision framework. Let me start with the major areas of differences between the new CAMA and the repealed Act. The new law has 870 sections as against 612 sections in the former law. This means we have 258 new sections. Of this difference, 167 sections are completely new, while 91 were modifications of some of the provisions of the repealed law. And unlike the repealed law that was divided into four parts, the new law is divided into seven parts. Under the old law, the law provided for only three legal entity types; companies, business names and incorporated trustees. We now have two new legal entity types that have been added; we have limited partnerships and limited liability partnerships. These are new legal arrangements that were alien to our law before, but they have now been introduced and they are consistent with what obtains globally. My approach will be to discuss the different sections. I’ll highlight some of the major changes as it relates to companies. I will start from the administrative part of the law and even the composition of the commission. We have additional board membership that have been introduced; we now have federal ministry of finance as a member of the board, the Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN) will also be on the board and the National Association of Small Scale Enterprises. This will bring the membership of the board to about nine (9). Then, other issues relate to companies. So many changes have been introduced in line with the ease of doing business initiatives of the government and to strengthen the legal framework and provide for greater disclosure by registered entities. On the ease of doing business, some of the major changes that I will highlight relate to capacity to form a company and access to registration services. Under the former law, to register a company, you’ll require a legal practitioner to depose your declaration that the requirements of the law have been complied with before that company can be registered. Although, over the years, the commission had tried to introduce regulatory measures to reduce the impact of the provision, particularly on small entrepreneurs that may not afford the services of
a legal practitioner. But, what the law has done now is that, the owner of the business or agent can simply sign a statement of compliance that you have met the requirements of the law, it doesn’t have to be under any statutory declaration. So, with that, CAC can go ahead and register. But, if you decide to use a legal practitioner in the registration process, the window for statutory declaration is still there. This will actually reduce the cost of registration, because in the ease of doing business measurement criteria, the World Bank is looking at the totality of the cost, not just statutory fees that you are paying. While calculating the cost of the registration they factor all the monies that you ordinarily pay to agents or intermediary to do the registration. So, this approach is now optional. You can do it yourself if you choose. But, we recognize that not everybody has the time to do it themselves, there are people that have the resources. But, the concern is about the small entrepreneurs, they may not even have the capital, they may even have to borrow the money to even pay the registration fees. Such kind of person should not have the additional burden of having to engage a professional. Secondly, the minimum share capital threshold for companies’ registration has also been increased. Under the old law, with N10, 000 share capital, you can register a private company. And the N10, 000 doesn’t mean that you have to provide the money, atleast, that is the authorized share capital. The assumption is that, you can have other sources of running your company, you can borrow and run your company, you don’t have to bring the capital at the point of registration except if the company is coming to a close. Under the old law, all you are obliged to share among the shareholders is 25℅, you can leave 75% unallotted and this can remain in your books for an inordinate period. This means that when you have new investors you can give them those shares. The new law says no, whatever share you register, you must distribute it at the point of registration, to cure any mischief that may arise. But, that doesn’t remove your right to increase the share capital whenever you intend to. And, the essence of this is that, you don’t have to spend money registering share capital that you may not have any immediate need for. So, if all you require is N100, 000 to operate, you don’t have to register a company with N500, 000 share capital, just register with N100, 000. When you are ready to increase, if you have grown to a size that necessitates an increase, then you increase and pay at the point of this increase. So, this is the analogy. Then, the concept of one-man company, until this new CAMA, to register a company, you require a minimum of two persons; shareholders and directors, they could
be individuals or cooperate bodies for shareholders. Over the years, in the course of discharge of our statutory responsibility here, we’ve come across cases where companies where faced with a challenge, particularly 2-man companies, when the principal owner dies. In most cases, we discover that the second person was included merely to satisfy legal requirements. In actual sense, he doesn’t even know how this business is being run, he doesn’t contribute anything. But because on the record he is a shareholder and a director, you can’t do anything without his consent and knowledge. So, in most cases you have hostile succession process when the principal owner dies, and at the end of the day, you’ll discover that the estate of the deceased is always at the receiving end, because one person who never partook in the running of the business can hold him to ransom, simply because somebody decided to put his name there to satisfy other requirements. So, with this, as an individual, you don’t need a second person, not even your wife. You can register your company alone and it will have the same legal capacity like any company that has 1000 shareholders. It will have a separate legal personality from you, it can sue and be sued in its own name and it can exist in perpetuity. Even after you are gone, somebody else can take over and continue and it can hold asset in its own name. This is a very good development, because people have the freedom to use their own businesses. In the past only business names can have one person. The challenge with business names is that, the business name dies with the owner because it doesn’t have separate legal personality. But, in companies, it can exist in perpetuity. If you have any property in the name of the company, somebody can take over the company and indirectly, he also owns the property. So, this will go a long way in minimizing cases of disputes particularly succession and inheritance and also provides a good avenue for people that cannot work with others to manage their own business alone. The next issue has to do with small companies, the law has provided so many exemptions for small companies. We are taking into cognizance their own circumstance as ‘small’. The strict requirement for annual audit and filling of annual financial statements, mandatory appointment of secretary, all these things have been removed. A small company is a private company that have a turnover of not more than N100 million and net assets of not more than N50 million and the majority of shares have to be held by the directors of company. And government should not have an interest in that company, there shouldn’t be any foreigner or foreign company that has interest. Once you meet this requirement, you qualify as a small company, but,
what we are trying to do is to align some of the provisions of this law, with the provisions of the Finance Act, as it relates to the turnover threshold, because incidentally the law says turnover of N100 million, net assets of N50 million or such other amount as may be set by the CAC. So, we intend to bring down the turnover threshold to N25 million to make it consistent with the Finance Act, so that we will have atleast a predictable system. Anybody that knows that he is exempted from tax, is also exempted from this. Because, that is what brings regulatory arbitrage, if you have different standard for different regulators, but when we have a uniform standard, that will reduce cases of regulatory arbitrages. So, as soon as the law is gazetted, part of some of the regulation we are going to come up with will include this; it will provide for a lower threshold, in line with what obtains in the Finance Act. The other changes that are significant, have to do with beneficial ownership disclosure. We call it “person with significant Control.” As you may know, there is global attention on knowing the ultimate beneficiaries of companies, because companies by their nature have separate legal personality from their owners and the law allows a company to own another company. So, sometimes it’s difficult to know the ultimate individuals that are actually benefitting from these companies. And because of concerns about corruption, money laundering and others, global attention have shifted to lifting the veil to know those persons that are actually benefitting. We are focusing on the
extractive sector under the EITI, the Open Government Partnership Commitments, we also have the financial action task force recommendations, all these international bodies, as part of the condition of membership. Members are supposed to have a registered beneficiary of owners of these companies. And if you recall in 2016, during the annual anti -corruption summit, Mr. President made this pronouncement that Nigeria is going to establish a registered beneficiary owners of companies. Unfortunately, due to absence of a legal framework that could not be realized, that gap has been closed now. We have provisions under the new CAMA Act that allows for mandatory disclosure of persons with significant control. We decided to adapt the wider framework of control as opposed to strict definition of ownership. Our provisions are in line with the United Kingdom model and it’s not just limited to ownership of shares. If you own shares up to a threshold of five (5) percent or voting rights of 5 percent, or, while by virtue of your position, either as a shareholder or otherwise, you control the employment of the majority of the directors, or, under any guise, you have any form of authority as to the manner the company is managed, then you fall within the definition and you must disclose your status. You are required to provide the information to the company within 14 days of falling into this category and the company has a window of 30 days to file this information with the Corporate Affairs Commission (CAC). This is a new requirement as I said and the Commission is required to establish registered beneficial owners. The register will be publicly available, because this is what we have signed off in OGP, and this is what we have signed off in EITI. In fact, because of the absence of a legal framework, NEITI was forced
to come up with an interim register, which is publicly available now to make the requirements of the EITI, because EITI had a deadline of January 2020, for the implementation of the register. The intention is that, by the time the central register is developed, you may not need sectorial registers, the central register will take over from this. We are already getting support from the World Bank under the OGP multi donor fund, they have earmarked 400,000 dollars to support the development of this registered beneficial owners. So, this is a very significant development and it will actually support our anti-corruption initiative, so that at a glance particularly for you journalists, you may have information that Mr. A has interest in a company that has an oil bloc or a mining lease , but this information may not be anywhere in the record. He may be using proxies or other fictitious identity. You can easily expose this and this will call for investigation and if found to be true, there are sanctions provided in the law for non-compliance, so, this is actually the objective of this. Other issues relate to public companies, by their name, any member of the public can own shares in a public company. The governance framework until now, was not robust, was not strict and the checks and balances were not stringent. Although different regulators had issued corporate governance code, but you have a lot of unregulated areas where companies operate on their own. Incidentally, the new law now provides that every public company must have a minimum of three independent directors and the law has enshrined the qualifications of these independent directors. Some of these qualifications are: he shouldn’t be the director himself or his relative shouldn’t be an employee of the company, whether past or present; he shouldn’t have made or received any payment for an amount above N20 million; and he or his relative shouldn’t have any shares or interest in that company of up to 30 percent. So, if you fall into this category, you are not qualified as an independent director. This will ensure checks and balances. Since you are not affiliated to any of the major shareholding
blocs, the assumption is that, you will have level of independence to actually operate objectively and call to question any issue that you are not actually satisfied with. This will bring better governance, particularly in our public companies. Other issues have to do with being a multiple director in public companies, and the combination of the role of chairman and chief executive. Under the new law, one individual cannot combine the offices of chairman and chief executive. This is to ensure checks and balances. You cannot be a director in more than five public companies, and even where it is less than five, you have to disclose those public companies that you are serving as a director. This will actually ensure transparency, so that you don’t end up being a director in a company whose activity conflict with each other. You use the knowledge you derive from one company to the benefit of the other. So, if you disclose that you are in company A & B, and they are in the same line of activity or trade, you may not be allowed. Another issue has to do with general meetings. Unfortunately, the changes for public companies are not significant because nobody anticipated COVID-19, nobody thought we will be in an era where the whole world was at a standstill for months, where nobody could go anywhere. And people were forced to hold meetings electronically, so we didn’t anticipate this kind of scenario, we didn’t make provisions for electronic meeting for public companies. But private companies can hold their meetings electronically, but moving forward, this is one area of amendment that we are going to look at so that we can have a quick amendment of this area to allow for electronic meeting by public companies in a manner that will ensure participation of all shareholders and in a manner that will not be manipulated by the presiding officers. This is a work in progress, there are areas we are compiling for possible amendment. Then, the issue of dividends. Under the repealed law, there is no limit to when you recover unclaimed dividends. Now, after 12 years, the dividend will revert to the company and it will be distributed to the members as profit. And the law has also provided that companies should publish in two national newspapers the names of people that have not claimed their dividends. Some people have raised concerns on this, on the issue of data privacy. The data privacy relates to personal information about your date of birth, address and other things, not just name. I don’t see anything wrong in publishing names of shareholders in companies, atleast that will be publicly available and anybody that sees his name or the name of his late father or uncle can go for his money and provide proof. Some have raised concerns that fraudsters may take advantage of that and claim the money. I don’t think anybody will pay you without proper scrutiny and
you have to provide nexus between yourself and the deceased. For small companies, they are exempted from annual general meetings. They don’t have to hold formal annual general meetings. And, as I have said, they are exempted from mandatory requirement of audit and appointment of secretary. Then, the issue of company seal is now optional, because this was one area of concern under the ease of doing business, a company need not have a seal. So, any document signed by a director or secretary, whether or not it has a seal is deemed to have come from an authorised source. Another significant change for companies relates to the insolvency framework. Under the former law, immediately a company is at the verge of insolvency, the company was always at the mercy of the lenders. There was no provision for the company to initiate on its own, any resolution mechanism that will ensure that issues of insolvency are resolved on its own terms. They are always at the mercy of the lenders. And we have seen from the various reports, most companies that go through the process of receivership, they hardly survive, they end up being wound up. We now have a new provision on company voluntary arrangement that will allow the company to approach the court, to appoint an administrator, who is independent of the lenders to manage the affairs of the company, to pay the liability and preserve the assets. So, in the process of that, you are preserving jobs, because, it’s not the creditors that are stakeholders.You also have the employees and even the government that receives taxes from these companies. This is a very good development. From this, CAC will be accrediting insolvency practitioners, this was not part of the former law. This will actually minimize the high turnover of companies, the hostile process will be minimized and we will see more companies surviving insolvency, because you have an independent person who is accountable to all the parties not just one party. Where the creditor appoints, it’s the creditor that dictates in most cases how the receiver will conduct himself. So, this is a good approach and it will go a long way in helping some of these small companies that may have this kind of issues. On business names, we also have more elaborate provisions on business names. It’s a name that allows you to trade under a name and style, there is no distinction between you and the business. But we have significant that changes relate to associations under part C. You must have read the reports in the media, people are questioning the provision that gives CAC the power to suspend trustees. This is not a new thing, we are talking of ease of doing business, best practice and competitiveness. You cannot compete using your local standards. If you want to com-
pete, you have to use the globally accepted standards and some of the changes that have been introduced, are nowhere close to some of the provisions that we have in the Charities Act of the UK, we just borrowed some provisions from the charities Act. They are not even as for reaching as what you have in the Charities Act. And, as I have said, the difference between part C and part B and A is that registration under part C is not mandatory. You have a choice, if you feel you can run your association on your own, without registration, go-ahead and run your association. Whether a donor will give you contribution is another issue, or whether your congregation will agree with you is another issue, but you have the freedom. But, where you agree to submit yourself to registration, then you must be subject to the oversight of that regulatory body. The fact that this law has not changed in the last 30 years does not make what we are doing right. The provisions in the repealed law on associations were just a replica of what we had in the Land Perpetual Association Act which was a pre-1900 law. Developments globally on registration of associations and charities have moved beyond anybody’s imagination and in any case, these organizations are not for profit, there are physical issues involved. So, there has to be a lot of scrutiny on how the income and property of these associations are managed and there is to be a clear separation between the income of this associations and the income of the founders and the trustees. The trustees are the legal representatives, they’re mere trustees and they have a fiducial relationship. They are not supposed to benefit personally from the income the Organization is making outside their out-of-pocket expenses, where they engage in activities on behalf of the association. They’re not supposed to share whatever income is made. CAC will not arbitrarily remove or suspend a trustee. First, there has to be a petition, or there may be circumstances where there are reasons to believe that there are infractions. CAC will have to give opportunity to the trustees to respond, before you can take any further action. Even where they respond and you are not satisfied with the response or where you feel it is necessary for them to step aside, to allow for unfettered investigation, then you can suspend them, otherwise, you leave them in office. This power is not absolute, CAC has to exercise this power judiciously because we can be challenged. So, I can’t see the hue and cry. Maybe because over the years people have been left on their own, unchecked, unregulated without any form of accountability. How many of these organizations even hold annual general meetings as provided by the law? How many of them render account to their membership? All these have to change!
In the Part C of that Amendment, is there any provision that gives CAC power to tell a church to decide who will be appointed as a member of the trustee? All these things are governed by the constitution, if the members agree that this should be the trustees or governing body, once they meet the qualification criteria; that they are of sound mind, they have not been convicted for any offence involving fraud or dishonesty in the last five years, they have not been declared bankrupt and they are not below 18 years. Once you meet these qualification criteria you can be a trustee. If, it is the decision of the members to make members of the same family or father and son trustees, so be it. But, the snap there is, for most of the organizations , you will see that they may have a congregation of 500,000 to one million, but on the record, the membership may not be more than five or six. By law, it’s the members that will take the decision. If you are attending congregation either in a mosque or church and you do your worship there, you are not necessarily a member of the legal association, you may not exercise any power of voting or removing anybody. The advice I’ll give is that people should read some of these constitutions. If somebody invites you to join, you need to know your rights, you need to know what the association constitution entails. But, the bottom line is, the organizations are supposed to be guided by their constitution and by law. And as I said, there is no restrictions, if you don’t fall into the disqualification criteria, you are qualified to be a trustee. It behooves the members to change the rules and say look, if you’re affiliated to Mr. A or Mr. B either by marriage or by blood, you cannot be this or that. That’s not our business. The area we are concerned with as regulators is how the income is managed. Whether the income is being shared contrary to law, these are the areas we are concerned and whether these organizations are operating in line with their constitution. Because, you cannot do a constitution and act contrary to the constitution. So, that’s the areas we are concerned with. And, as you may know, we have read some of the reports on the actions of the Charities commission and some of the Nigerian owned churches or organizations in the UK, where some of the trustees where suspended. So, this is nothing new, nobody will be suspended without hearing from him. And, as I have said CAC will exercise its powers judiciously and if there is any petition against anybody, CAC will not just act on the basis of the petition from one side without hearing from the other side. Finally, our actions are subject to judicial review. So, even when CAC suspends, an aggrieved person can go to court and challenge the action of the CAC.
18
Tuesday 08 September 2020
BUSINESS DAY
EDUCATION Weekly insight on current and future trends in education
Primary/Secondary
LASUBEB prepares for school reopening, trains school administrators, others MARK MAYAH
A
s part of preparatory guidelines for the reopening of schools, the Lagos state Universal Basic Education Board [LASUBEB], has expressed its readiness to resume classroom academic activities in compliance with the directive of the state Governor, Babajide Sanwo-Olu, which necessitated a two-day capacity building workshop on post COVID-19 and classroom Management for its schools administrators. According to the Executive Chairman, LASUBEB, Wahab Alawiye-King, while briefing the participants, revealed that the training programme was supported by the Universal Basic Education Commission, UBEC mainly for school Managers, Administrators, Guidance Counsellors and Teachers. He said that the programme was designed to further reinforce COVID-19 guidelines and regulations, psycho—social support services and classroom management techniques, while also preparing teachers for the new phase in the educational
Wahab Alawiye-King, LASUBEB executive chairman
sector. Alawiye –King, who expressed satisfaction with the training programme, stated that it would help keep teachers abreast of global transformational teaching techniques in a post COVID-19 era across the six education districts in the state. He implored the participants to reproduce the knowledge derived from the training at their various places of primary assignment in order to move education in the state
to a greater height. He said: ‘’I urge you to make school improvement the first and foremost responsibility in improving education standard. The reopening of schools is part of a wider plan by the government to ease the lockdown and gradually reopen schools. ‘’For Lagos State, schools are an important part of the equation. Teachers in public schools have been going through series of training at keeping them abreast with the new normal,’’ AlawiyeKing said. The chairman assured parents and pupils that LASUBEB has prepared the teachers to adapt to the new reality and adopt relevant hygiene protocols for reopening, describing the COVID-19 era as ‘’a new normal, that we all must learn to live with, accept and be willing to overcome.’’ He however, noted that the reopening of schools is a process with different stages, namely; pre-opening, reopening and post-re-opening stages that need to be adequately planned for. The Board, he maintained is prepared for the resumption of academic activities having provided all necessary
facilities and infrastructures needed to maintain and comply with COVID-19 safety protocols. ‘’LASUBEB is ready to enforce and ensure that both public and private schools maintain physical distancing as well as other safety guidelines. In her remarks, SUBEB Board member in charge of curricular, Sherifat Abiodun Sanusi, thanked the executive chairman for approving the training programme and advised teachers to be alive to their duties and to complement government’s huge investment in the education sector by following the best practices in the post COVID-19 education management. She enjoined the participants to make judicious use of the knowledge acquired through the training exercise to finetune their teaching techniques to ensure effective teaching and learning for the benefit of Lagos school children as they are the leaders-in-waiting. The two-day training programme went simultaneously in the six education districts in the state with participants expressing satisfaction on qualities of facilitators at the event.
COVID-19 has negatively affected Nigeria’s primary education system, says NGO MARK MAYAH
T
he Global Initiative for Entrepreneurship and Capacity Development has said that the Coronavirus pandemic has negatively affected the education of school children. Founder of ICLED, Olajumoke Familoni [prof], said this at virtual conference, themed Nigeria Reads: A panacea for Reducing the Digital Divide and Marginalisation of the pri-
mary school pupils as a result of COVID-19 pandemic. Familoni explained that families who could not afford data or lived in remote villages were the worst hit as such kids had not been able to participate in e-learning. She added that some children were seen hawking different items on the streets. ‘’COVID-19 has a bad terrible effect on the education of our children especially for those in the villages and those who cannot afford or do not have access to mobile data.
Some children are on the streets hawking, going to markets, playing around. ‘’COVID-19 has really exposed the divide in our nation; while those who have access to data are the only ones attending online schools. Those who are less privileged have not been learning. The federal and state governments need to do something as these will breed more miscreants, boko haram terrorists and the likes, ’she said. It was in this direction that she partnered with an organisa-
tion, Smart Kids Club, United States of America, which created an application called ‘’Nigeria reads app’’ which was also unveiled during the conference. According to her, the application would bridge the global digital divide in primary education in Nigeria as it does not require data to operate it. She said: ‘’This application from our USA partner, Smart Kids Club will bridge the divide by teaching reading skills for literacy and mathematic skills for numeracy.’’ Familoni said the application had the entire Nigerian educational curriculum for different age, classes and level of the children. She said: ‘’This application will be very useful for teachers, students and parents anytime, especially in this era of the new normal [virtual learning]. So we will strongly recommend it to every school and every parent who desires to get the best out their children with minimal efforts and minimal cost. There are also children in the cities and in the Northern areas that have no access to education due to lack of data and power. The COVID-19 has increased the number of students with no access to education and increased in vices such as rape, abuse, kidnapping and poverty,’’Familoni said.
Wahab Alawiye-King, executive chairman, LASUBEB, (with mic) alongside other Board members, presenting Y2018 UBEC intervention specialised vocational equipment and instructional materials to six inclusive units in Lagos state. www.businessday.ng https://www.facebook.com/businessdayng
Higher
Human Capital
Grant varsities autonomy, says Nwoko, former varsity lecturer and World Bank consultant MARK MAYAH
A
former university lecturer and World Bank consultant, Chinedum Nwoko, has urged federal and state governments to immediately put in place necessary platform to commence the process of granting the nation’s varsities academic, finance and administration autonomy, in order to put final stop to frequent strikes by ASUU, NASU and SSANU. The Academic Staff Union of Universities (ASUU) has been going on strike for a number of years over the same issue – government not honouring agreements reached with the union; yet, nothing seems to have changed. Nwoko, who taught for many years at the university of Nigeria [UNN], Nsukka, Enugu state, in an exclusive interview with BusinessDay in his Abuja office, said granting universities autonomy and introduction of tuition fees in public varsities will improve educational output, that allow various institutions to deliver more competent graduates and higher quality research methodology as well as putting an end to issue of government not honouring agreement with varsities unions in tertiary institutions. Nwoko, who is also consulting chief executive, DT
Policy Associates, believe that as long as tuition in public universities is free, the problem will continue, adding that tertiary education should not be free. “Tuition is free in federal universities in Nigeria and that is a problem because there is no free lunch in education,” he said, stressing; “students are the future hope of their families and the nation, so they should be the centre of gravity of the university system and should not be made to suffer.” He said: ‘’There is sufficient evidence to suggest that autonomy for universities would provide better educational outcomes and have a direct impact on labour market productivity. Government can’t fund public varsities education any longer. In the past, there were five varsities, today there are no fewer than 81 federal and state varsities. Let each university appoints its VC as well as governing council and determine how each of these varsity should be run. According to Nwoko, ‘’universities autonomy, specifically in reference to academic approach, staffing, internal decision-making, and financial practices, in combination with proper funding, is likely to enable universities to produce graduates with better competencies and to enhance both the quality and quantity of research output.
Schools, community synergy best option to fix infrastructure challenges in education KELECHI EWUZIE
A
healthy working relationship between members of the community, school staff and staff of the local government education authority is crucial to the successful operation of schools. Over the years, theft, damage to facilities, and irregular compound maintenance has been common. However, following the creation of the Edo Basic Education Sector Transformation programme (EdoBEST), the rate of school vandalism has significantly reduced. EdoBEST, which is one of Governor Godwin Obaseki’s flagship programmes, has driven this change through its community engagement initiatives which form one of the five pillars of the programme. The initiative involves the reconstitution of the SchoolBased Management Committees (SBMCs) and deployment of a large team of social mobilisation officers (SMOs). As a result of these engagement initiatives community members now have a stronger sense of responsibility to the schools in their communities. The actions of Adeboye Amu of Sabongida Ora Community in Owan West are just one example of how commu@Businessdayng
nities are taking responsibility for their schools. It was surprising to some people when they sighted him helping to control traffic at the gate of Obe Primary School. However, they later realised that his priority was ensuring that pupils could safely cross the busy AfuzeAuchi road. Recently he shared that, “EdoBEST has trained and empowered me to become an SBMC Chairman, thereby, making me more involved in the activities of the school.” He went further to state that, “even with contractors, after getting all necessary permissions from the Board and LGEA, I am the main focal person they meet as I am directly in charge of the school. I oversee the planned intervention, and work with them, in a supervisory role, to ensure that the stated aim of the intervention is achieved.” Increased community engagement at Obe Primary School has also led to an improvement in school maintenance. A recent visit revealed that the grass had been cut by community youths. It was also clear that all of the school’s facilities and offices were intact and in good condition. Developing school infrastructure and facilities is another pillar of the EdoBEST Programme.
Tuesday 08 September 2020
BUSINESS DAY
www.businessday.ng
https://www.facebook.com/businessdayng
@Businessdayng
19
20
Tuesday 08 September 2020
BUSINESS DAY
BDTECH
In association with
E-mail: jumoke.akiyode@businessdayonline.com
What to expect from Nigeria Innovation Week 2020 ... as innovation becomes even more critical Jumoke Akiyode Lawanson
A
s technology industry stakeholders and enthusiasts prepare for the Nigeria Innovation Week -- a week long event that brings together players in different sectors of Nigeria’s economy, who are keen on leveraging technology for business and economic growth, is set to hold a virtual summit from Tuesday October 6, 2020 to Thursday, October 8, 2020, people are wondering what to expect from this year’s edition. This is especially considering the fact that the COVID 19 pandemic has made innovating even more critical for both public and private sectors of every economy. With a focus on ‘Innovating in Critical Times’, the event organisers have confirmed that the week will be packed with several activities like innovation exhibitions, Nigeria innovation summit, Nigeria innovation awards, and the yearly report of the state of innovation in Nigeria. At the event, ideas, trends, opportunities around technology, innovation, and entrepreneurship development in Nigeria will be discussed. Speaking about the event, Kenneth Omeruo, the lead convener and the founder of InnovationHub Africa & Resources Limited, said that innovation in the 21st century
is putting nations ahead of others. According to Omeruo, Nigeria Innovation Week is a week set aside to showcase innovative businesses, ideas, products and services from Nigeria. “It also reviews the state of innovation in Nigeria, where we are today and how we can move forward. “Participation in this week-long event is opened to local and international businesses, organisations, government agencies, start-ups,
entrepreneurs, research centres, tertiary institutions, and all the stakeholders in the innovation ecosystem”, he said. Omeruo said the event will also showcase innovative businesses, ideas, products and services from Nigeria. “The state of innovation in Nigeria is also reviewed to understand its position and how it can be improved”. Tony Ajah, the programmes director, said the summit receives
delegates from local and international businesses, organisations, government agencies, states and representatives, embassies and high commissions, investors, CEOs, start-ups, entrepreneurs, research centres, tertiary institutions, business leaders/decision makers, and all the stakeholders in the innovation ecosystem. “This year has been tough for businesses but companies that are innovative see opportunities
in most crisis. Nigeria Innovation Week 2020 will feature innovation showcases and exhibitions, keynote presentations on emerging technologies and their industry application, panel discussions, innovation management insights as well as workshops, networking and awards. He listed programmes during the week-long virtual event as follows: “There will be innovation showcase and exhibitions from innovation hubs, and research centres with solutions for industrial applications, adoption and commercialisation on the first day. “We have also planned that on day 2, there will be innovation showcase and exhibitions from tertiary institutions from the 36 States of the federation, government agencies, and international organisations. “The Nigeria Innovation Summit and the Nigeria Innovation Awards will hold on Thursday, October 8, 2020”. Speaking on why corporate organisations and individuals should participate, Ajah said: “The event benefits each participating key player in the innovation ecosystem from government institutions, states and agencies to businesses and organisations, academic and research centers as well as start-ups and young entrepreneurs.”
Cybersafe Foundation appoints Peter Obadare as chairman advisory board Jumoke Akiyode Lawanson
P
eter Adewale Obadare, a popular cybersecurity thought leader, has been appointed as the chairman, Advisory Board of Cybersafe Foundation. The non-governmental organisation says it’s on a mission to facilitate pockets of change that ensure a safer internet for everyone with digital access and residents in Nigeria. In this role, Obadare will oversee the activities of the board and all sub committees as set in the foundation’s corporate governance
manual. Obadare who doubles as the cofounder and chief operating officer of Digital Encode Limited, is a seasoned PAN-African CyberSecurity & GRC thought leader; a Fellow of the British Computer Society (FBCS); Fellow Institute of Management Consultants (FIMC); Fellow, Institute of Information Management (FIIM); Fellow Institute of Brand Management (FIBM); Chartered Information Technology Professional (CITP); the First PECB Certified Data Protection Officer (CDPO) in Nigeria; the First Ec-Council Licensed Penetration Tester (LPT) in Africa; First Ec-Council Certified
www.businessday.ng
BlockChain in Africa; second COBIT 5 Certified Assessor in Africa Payment Card Industry Data Security Standard Qualified Security Assessor (PCI DSS QSA), amongst others. The cyber security expert and GRC technopreneur with over 50 international professional certifications to his credit and was awarded Honorarary Doctorate Degree in Cybersecurity from Trinity International University of Ambassadors Atlanta Georgia, United State of America. Obadare is a well-recognised subject matter expert with numerous successful engagements to his
https://www.facebook.com/businessdayng
credit in Africa. Commenting on the appointment, Confidence Staveley the founder/executive director, Cybersafe Foundation, a recepient of Top 50 Cybersecurity Women in Africa, said that as they aspire to become very successful and impactful organisation, the foundation recognises need to tap from the knowledge, experience and insight Obadare brings, to enable them attain unprecedented new heights. “We are excited to welcome a seasoned cybersecurity leader, Obadare as the chairman of our advisory board. His personal values
@Businessdayng
such as passion, excellence, service and integrity align perfectly with that of CyberSafe Foundation. “We believe his knowledge, experience and insight, will catalyse attainment of unprecedented heights in our pursuit to enabling a safe cyberspace for Nigeria and in extension, Africa. There could be no better time to have such a valuable, passionate and expert leader for our advisory board,” she said. The board is responsible for creating vision for the Foundation, articulating its values and principles, setting goals, developing effective governance policy, meeting and monitoring standards.
Tuesday 08 September 2020
BUSINESS DAY
21
Media business Survey identifies employee non-retention in PR industry as a major challenge, offers solutions Daniel Obi
A
ttracting and retaining the right talent within the PR industry in Nigeria emerged as one of the top challenges the Nigerian PR industry faces, according to the latest Nigeria PR report. The report states that the challenge is worrisome given the importance of people to excellent service delivery, client satisfaction and the growth of the business. “But talent is not only important to the external growth of the organization, but the costs involved in terms of time and expense to recruit, interview, and train new employees also need to be considered too. “Then for trained employees that go on to work in other organizations, they also take with them the experience and know-how, adding to further costs for the organization”, the report said. Insights from the report indicate that 70% of the professionals within the industry have less than five years of work experience.
On what therefore needs to be done to make the PR industry more attractive to new entrants into the industry, the research report conducted by BHM, a foremost PR firm in Nigeria advised that seasoned professionals and institutions should begin to explore the establishment of teaching faculty in PR management to equip new graduates seeking career opportunities in PR. There also needs to be a
clear understanding of the role of the public relations professional and the set of skills required for a successful career. “It is also important to define possible career paths, so as to attract the best minds into the industry”. To do this, they need to be equipped with adequate training to go from the basics of writing and communication, ethics, working in a team, time management, to include more
specialized skills tailored to the various job roles. “One example to learn from can be the graduate trainee programme model where new graduates are put through various aspects of PR so that they get work experience and can select the areas that align with their interests and abilities” The report said even for the staff with 5-10 years of experience (18 per cent), there are opportunities for PR training programmes to equip them with middle management skills. The report further states the need to retain mid-level managers which it said becomes even more apparent when the industry considers the gender composition of senior management in PR. “Not only are we losing midlevel managers, but we are also losing our female midlevel managers according to Omawunmi Ogbe of GLG Communications. Although women dominate PR and Marketing, it is contrasting to note that the majority of the top positions in the industry, across agency and regulatory bodies are occupied by men.
Mamador brand empowers Nigerian women, organises first ever virtual August Women Meeting
I
n keeping with the times as occasioned by the covid-19 pandemic, PZ Wilmar through its premium brand; Mamador, successfully hosted the first ever virtual August Women Meeting. The Mamador August Women Meeting which was a weeklong series of activities came to a successful conclusion on Friday, 28th of August 2020. The August Women Meeting is a women gathering recognised amongst the Igbo community as the annual homecoming congress. This women gathering has been used over the years, as an opportunity for the Igbo wom-
enfolk in diaspora and in the cities to travel back to their villages to meet with their local counterparts to discuss matters pertaining to community development, as well as other cultural and socioeconomic initiatives. However, the COVID-19 pandemic posed a major threat to the gathering for this year’s August Women Meeting, owing to the fact that many are keeping safe and unable to travel, especially those in diaspora. The Mamador brand therefore took it upon itself to create an opportunity for these women to gather online as it organised the very first virtual
August Women Meeting in history. Speaking on this initiative the Marketing Manager, PZ Wilmar, Chioma Mbanugo congratulated the brand on the success of Mamador August Women Meeting. “Understanding the importance and significance of the August Women Meeting,
not just the cultural aspect, we felt it was necessary to host an online version. Times are fast changing; we now live in a world where distance shouldn’t be a barrier to our collective growth and development. This August Women Meeting has always provided women with the opportunity to gather and foster community growth and development, as well as support each other whichever way they can. That is why I am very delighted that we have been able to achieve likewise with our first ever Mamador August Women Meeting.” She said.
Dive In Festival returns to Nigeria, addresses inclusion, gender diversity in insurance industry
A
gainst a backdrop of a global pandemic and mounting pressure to achieve inclusion and gender diversity, Dive In Festival makes an impressive return to Nigeria and goes virtual. The virtual event slated for September 24, 2020 will focus on topics such as flexible working allyship, gender identity, mental and physical health in the workplace. Facilitating this virtual event in Nigeria is Esther
Awoniyi, financial broadcast journalist and business anchor at CNBC Africa with renowned speakers and leaders in insurance sector. They include Adetola Adegbayi, Executive Director of General Insurance Business Division, Leadway Assurance Company Limited; Funmi Omo, Managing Director, African Alliance Insurance Plc; Corneille Karekezi, Group MD/CEO, African Re Group; Nike Anani, Speaker, Co-Founder African Family Firms and Mentor NextGen, www.businessday.ng
Ibitunde Balogun, Executive Director Tangerine Life Insurance Limited. A statement said this year’s theme “Promoting Inclusion & Diversity in the Nigerian Insurance Industry for a Quantum Leap”, highlights the current situation of women in the insurance industry, roles they play and the future of organizations if inclusion and gender diversity is promoted. The new virtual format of the festival makes it widely accessible by hundreds of attendees per
event and for the first time, attendees will be able to partake in the Dive In events across the globe, regardless of geography. Reflecting on this year’s festival Dominic Christian, Global Chairman of Aon’s Reinsurance Solutions, sponsors of Dive In Nigeria said in the statement: “In light of recent events, the Dive In Festival’s mission is to advance the development of inclusive cultures that are vital for businesses and great for people is more important than ever.”
https://www.facebook.com/businessdayng
FPL Media baits advertisers with technology to boost ROI
F
our Pulley Limited, an technology driven out-of-home agency has assured prospective advertisers of its readiness to offer technology driven OOH solutions for their brand needs. Dropping the hint recently in Lagos, managing Director of FPL, Lanre Ashaolu said in a statement the age of new normal has imposed new imperatives on the stakeholders in the Nigerian Integrated Marketing Communications sector to think out of the box, hence the need to be innovative, creative and technologically savvy. Specifically, he said Four Pulley Ltd has “opted to ignite a strong passion to leverage technology to improve return on investments for advertisers and the Nigerian OOH consumers. The industry top notch
who lamented the multifaceted challenges currently facing the OOH industry in Nigeria said the best way the sector could over-come the rampaging encroachment of the digital media is by embracing technology. In view of this, he disclosed that “FPL has been investing a lot on technology, artificial intelligence to be able to deliver accurate feedback in terms of how effective advertising campaigns work on our platforms”. He observed that since the advent of the digital age has made traditional media irrelevant, the outdoor advertising sector should as a matter of urgency begin to look at the direction of technology to remain relevant and in contention. This according to him would make OOH operators offer more premium services to their clients.
Nigerian Bottling Company installs high-speed canning line at Ikeja Plant
T
he Nigerian Bottling Company Ltd (NBC) has announced the successful installation of a new high-speed canning line at its Ikeja, Lagos plant, as it forges ahead with its business transformation and optimisation plan. The new high-speed line will significantly increase the company’s production capacity for canned products, thereby reducing production time and making more Coca-Cola can products readily available to refresh Nigerians across the country. In addition to the increased production capacity, all Coca-Cola products from the line will come in modern sleek cans. Commenting on the company’s latest milestone, Director, Public Affairs and Com-
munications, NBC, Ekuma Eze, said the new line and its supporting capital investment are in line with the company’s commitment to continue investing in the country. “As a consumer packaged goods company, NBC is committed to supporting the Nigerian economy and its people. In addition, as our products continue to cater to a growing range of tastes, we seek to continue to offer our consumers a wider choice of healthier options, premium products and increasingly sustainable packaging. This is why we’ve made this significant investment into the installation of this new can manufacturing line at our Ikeja plant. This is just one level of our ongoing organizational transformation and optimization plans “he said.
FG appoints new APCON CEO
T
he new Registrar/ CEO of Advertising Practitioners Council of Nigeria (APCON) Olalekan Olumuyiwa Fadolapo has formally taken over on Tuesday, 1st of September as the 4th substantive Registrar of the Apex Regulatory Body. The brief handover ceremony which was presided by the Acting Registrar, Ijedi Iyoha was held in the conference room at APCON House, Lagos. While handing over, Iyoha urged staff to support and cooperate with the new Registrar in his drive to take the organisation to greater heights. Fadolapo who was received by top Management and staff of the Council expressed gratitude to God and to the Federal Government for the confidence reposed in him to serve the nation in that capacity, pledging to build on the @Businessdayng
Olalekan Olumuyiwa Fadolapo
successes and achievements of his predecessors in realising the organisation’s mandate. He said the remarkable stewardship and achievements of his predecessors were possible as a result of the harmonious working relationship that existed within the high level management and staff, adding that there was the need to build on these achievements.
22
Tuesday 08 September 2020
BUSINESS DAY
Feature
COVID-19: Why Nigeria must halve over $1bn medical tourism John seyi salau
I
nternational health travel must not be confused with having an unplanned surgery in a foreign country due to an unexpected illness or injury. International health travel as medical tourism means intentionally going to another country for medical care. In all its definitions, it can be agreed that medical tourism occurs when one travels outside his/ her place of residence in search of health or medical care for whatever reason. It could either be inter-state in a country or from one country to another. In recent times, medical tourism has been considered as a worldwide multibillion-dollar phenomenon that is expected to grow considerably in the next decade. Be it for general well- being, cosmetic surgery or life-saving procedures, people are expected to traverse from developing countries to developed countries to access health care mainly driven by various factors such as affordability, easy access, quality and sometimes just a simple getaway. Patients from these developed countries such as United States, United Kingdom and Europe who seek health care in less developed countries such as India and China are more interested in low cost healthcare and no waiting period.
As it has been widely reported, the cost of healthcare in the US is the most evident key factor that encourages US citizens to seek health care outside the country. This has inevitably proven that medical tourism is the norm for cutting and lowering costs which has continued to excessively soar. In this part of the world, Nigeria, the case is different. A multitude of reasons conspire to push patients out of the country for health care. Nigerian authorities have stated that the country is losing more than $1 billion annually to medical tourism as tens of thousands of Nigerians travel abroad in search of the best treatment. Whether it is cost (financial and non-financial), access (physical and skilled workforce) to quality of care, there is an unspoken increasing preference to travel overseas for health care at the slightest opportunity or just for the pleasure of it. Many Nigerians are known to have a GP abroad who tends to their every need, even to a negligible cough. Just before the COVID-19 pandemic, a friend had informed me of his travel plans, solely for his annual medical check-up. Another friend also stated that after he was diagnosed of hernia and was scheduled for surgery in Nigeria, he opted to fly out to see his GP for a second opinion. These and many more are
Dr. Dorothy Jeff-Nnamani MD/CEO, NOVO Health Africa
clear reasons that attribute to the loss of over $1billion in medical tourism in Nigeria; while International Medical Travel Journal and Global Medical Travel and Tourism estimates that inbound medical tourism generates a whopping $3.5 billion of revenue for the USA. During the recent commissioning of a Federal Medical Center in the Northern part of Nigeria, the Medical Director identified the following as common challenges faced in running the facility – ‘lack of an Xray machine, scarcity of potable water, shortage of consultants and indiscipline amongst staff’. I dare to say that these challenges can be ameliorated. Although it has been argued that in a perfect world, people should need not travel in search of medical care, either
www.businessday.ng
way, both antagonists and protagonists of medical tourism can agree that the international health travel is a thing of choice and people should not be forced into making those choices. It is worthy to note that a major factor responsible to this choice is the ease of travel. Our increasingly globalized world has made international travel faster, cheaper, and more accessible. Even though the financial implication to travel abroad is a bit high priced, families and friends usually rally round the patients to offset cost of procedures in foreign lands. Some people who can afford the travels may even see it as a tourism opportunity to explore the foreign lands and recuperate after their procedure - using one airline ticket to kill two birds. COVID-19 has devastatingly affected several medical travel destinations, making countries to look inward in correcting the deficiencies that promote undue seeking of medical treatments abroad and thus reducing the high number of billions lost annually over the past decades. Since the lockdown and travel restrictions, Nigerians at home have been forced to patronize the health sector in its present condition. With the light beamed on the industry, health care professionals have had to standup to the challenge
https://www.facebook.com/businessdayng
in their different capacities. While we hear stories of people visiting hospitals in the country for the same reasons they would have travelled abroad - cosmetic surgery, brain surgery, broken arms, sprained ankles, heart attacks and other medical emergencies, there is no available data to compare the country’s health indices in the past five months before the lockdown and travel restrictions. However, the industry recorded some technological advancements especially around Telehealth, knowledge sharing through remote medical applications with other health experts outside the country and digital subscription for health insurance. Affordability also influences the decision to travel abroad mostly for those travelling from developed to less developed or developing countries. Health care is cheaper in developing countries. However, due to the poverty rate, this affordability can be said to be relative. Dynamic initiatives to offer health insurance even at the lowest level of the social strata including public health programs that support detection of diseases at the early stages to prevent huge financial loses when treating complicated cases is key. When trying to save lives, families have had to go to any extent selling their lands to seek care abroad. The richer @Businessdayng
social class are forced to spend significant amount of their life savings. Paying huge sums of money has no direct correlation with quality of care. Health insurance helps to provide the affordability within the community. It is reported that the primary reason that clinics and hospitals in the developing countries can lower their prices is directly related to the nation’s economic status. Explaining further, the direct correlation with per capita gross domestic product of the country is observed, which is a proxy for income levels. Consequently, surgery prices are from 30% to 70% lower in developing countries when compared to the US. Globally it was a manufacturing economy before now; in present times it is a service, information, and creative economy. Daily, we are confronted with new and possible ideas to help drive the health sector. Some of the ideas are coming from other sectors and will need a platform for collaboration. We need leadership with broad functional orientation to promote inter-sectoral collaboration, explore opportunities, make other sectors real partners and stakeholders to drive the flow of revenue and resources and bridge infrastructure gap. Partnerships are crucial for sector growth especially in a technology advanced world as we are today, of which the health sector yearns greatly for it.
Tuesday 08 September 2020
BUSINESS DAY
23
Investments
ENERGY INTELLIGENCE
Market Insight Companies Commodity Tracker Policy
OIL
GAS
PETROCHEMICALS
POWER
Oil Marketers’ revenue to drop by N4.3trillion in 2020 – Agusto & Co DIPO OLADEHINDE
A
g u s t o & C o, an indigenous African credit rating agency is forecasting a revenue fall of about N4.3 trillion by oil marketers in Nigeria due to the economic impact of coronavirus pandemic on fuel consumption. “The consumption of petroleum products particularly Premium Motor Spirit (PMS) and Aviation Turbine Kerosene (ATK) is expected to decline to 27.2 billion litres in 2020 given the severely restricted travel and transportation activities during the second and third quarters of the year,” Agusto & Co said in its 2020 Oil and Gas Downstream Report. Agusto & Co expects the above development to translate to a revenue decline of N4.3 trillion in 2020 for both major and in-
dependent oil marketers. The Federal government had in March announced its plans to stop the subsidy payment regime as they said that the downstream sector of the oil industry will be fully deregulated. Petrol prices in the oil-rich country have increased for three straight months, rising from slightly over N121 ($0.32)
per litre in June to over N143 ($0.38) in July, N150 ($0.39) in August, and N162 ($0.43) in September. Agusto & Co. expects the recent adjustment of the official exchange rate from N306 to N380/$ to test the sustainability of the pricing template before the end of 2020. “Notwithstanding, the new pricing regime
is expected to emplace a more transparent operating model, stimulating investment growth and encouraging the importation of products by Oil Marketing Companies,” Agusto & Co. said. The rating agency said the lockdown restrictions implemented by the government as part of an effort to curtail the spread of the coronavirus disease
Despite missing 2020 deadline Nigeria’s gas flare rate decreases steadily STEPHEN ONYEKWELU
N
igeria’s ambitious objective of commercialising gas flares from the country’s over a hundred flare sites appears to be yielding positive outcomes, despite missing the 2020 deadline to end all flares. The Nigerian National Petroleum Corporation’s (NNPC) Financial and Operations Report for June, the latest, shows that gas flare dropped by 138.79 million standard cubic feet per day (mmscfd) year-on-year. This represents a 22.69 percent decrease year-on-year. The report shows 472.94 mmscfd of gas was flared in June compared to 611.73 mmscfd in June 2019. This represented 7.84 percent and 6.11 percent gas flare rates respectively. Gas flare rate was 6.50 percent for May, that is, 486.19 mmscfd compared with average gas flare rate of 8.05 percent, that is, 626.24 mmscfd for the period May 2019 to May 2020. Gas flare rate was 7.93 percent in April, that is, 617.32 mmscfd compared with the average gas flare rate of 8.30 percent, that is, 652.48 mmscfd for the period April 2019 to April 2020. However, the gas flare rate in March was higher at 9.08 percent March, that is,
679.54 mmscfd compared with average gas flare rate of 8.43 percent, that is, 666.90 mmscfd for the period March 2019 to March 2020. In February, gas flare rate was 7.60 percent, representing 629.88 mmscfd compared with the average gas flare rate of 8.46 percent, which represents 672.93 mmscfd for the period of February 2019 to February 2020. At the beginning of the year, January, gas flare rate was 7.90 percent, which represented 643.59 mmscfd compared with average gas flare rate of 8.46 percent, that is, 671.40 mmscfd from January 2019 to January 2020. Although the percentage of gas flared has continuously fallen this year, Nigeria had initially set 2020 as the deadline to eliminate gas flare from the country’s 178 flare sites, limiting it to
2 percent where it is inevitable. This was 10 years ahead of the 2030 date set for ending gas flaring globally. In 2015 there were 39 companies directly involved in oil and gas production in Nigeria, producing natural gas from 189 fields with daily associated gas production of 4.74 billion standard cubic feet per day (bscfd) and non-associated gas production of nearly 3.46 bscfd. All associated gas was routinely flared and disposed-off into the atmosphere during the early days of oil production in Nigeria. This practice of flaring 100 percent of associated gas lasted until the commencement of gas supplies to industrial users in Aba in 1963. Despite this early source of utilisation and other government schemes, over 95 percent of associated gas
was routinely flared over the next 15 years. Gas flaring increased sharply in the 1970s due to increased oil production that was triggered by higher international crude oil prices. Conversely, the slowdown of crude oil production in the 1980s brought about a reduction in associated gas production and gas flaring. At the dip of production in 1987, flaring of associated gas had dropped from over 95 percent to 70 percent. This means that with the current gas flare rate of less than 10 percent in 2020, Nigeria appears to be making some progress. What accounts for this are the many gas utilisation initiatives that the government is spearheading and partly due to the activities of the Nigerian Gas Flare Commercialisation Programme.
affected the consumption of petrol significantly. The report revealed that the growth of the Nigerian oil and gas downstream industry remained hindered by the lack of substantial investments, import constraints, and regulated pump prices. It said, “This is largely attributable to the dominance of the government in the industry, particularly in relation to the importation of refined petroleum products. “Over the years, the industry has enjoyed a stable demand for petroleum products as a result of the subsidies provided by the government. This contributed to the gradual crippling of government finances.” Agusto & Co. noted that the Federal Government had taken positive steps to fully deregulate the industry, highlighting the recent reviews of petrol pump price.
It said, “The consensus medium-term outlook for the crude oil market is positive, which implies that the price of petrol will be higher than the old regulated pump price in the near future. “The pricing of PMS will continue to be overseen by the Petroleum Products Pricing Regulatory Agency through a pricing template. The new pricing template takes several factors such as the petroleum product cost and the foreign currency conversion rate into consideration.” Agusto & Co noted that no white fuels were produced at the nation’s refineries for the seven months from June to December 2019 due to on-going rehabilitation works. Agusto & Co. also believes that the continuous efforts of the government to deepen the utilisation of LPG in Nigeria will continue to bear fruit in the medium to long term.
Total, carmaker PSA set up $6B EV Battery Venture
S
upermajor Total continues to invest in clean energy by creating a joint venture with automaker Groupe PSA to manufacture batteries for electric vehicles in Europe—a project expected to mobilize investment of more than US$5.9 billion (5 billion euro. Total, via its subsidiary SAFT, will contribute to the project with industrialization and research and development (R&D) expertise, while PSA will contribute its automotive production experience, the French oil giant said in a statement. An R&D center in Bordeaux and a pilot site in Nersac, France, have already launched work to develop new high-performance lithium-ion technologies. The companies plan to launch mass production after the R&D phase ends at two gigafactories in Europe, one in Douvrin, France, and one in Kaiserslautern, Germany. The joint venture plans to “ensure industrial independence in Europe for the conception and manufacture of batteries, with an initial capacity of 8 GWh, reaching a cumulative capacity of 48 GWh on both sites by 2030,” Total said. The new joint venture, Automotive Cells Company (ACC), has received finan-
cial support from the French and German authorities and is expected to begin manufacturing batteries from 2023. “The creation of ACC illustrates Total’s commitment to meet the challenge of climate change and to develop as a broad energy company, a major player in the energy transition, by continuing to provide affordable, reliable, and cleaner energy,” Patrick Pouyanné, Chairman of Total, said. “Our ambition is to leverage the recognized expertise of our subsidiary SAFT in batteries and the industrial know-how of our partner PSA to meet the strong growth of electric vehicles in Europe,” the executive added. Apart from EV batteries, Total has been heavily investing in solar projects and storage systems in recent years. The announcement for the upcoming gigafactories from European companies came just as Elon Musk was visiting Gigafactory Berlin to see how work on Tesla’s first Gigafactory in Europe was progressing. “Great trip to Germany. Support from government and people is super appreciated!” Musk said on Thursday.
EDITOR: Isaac Anyaogu / Analysts Stephen Onyekwelu, Dipo Oladehinde / Feedback: 07037817378, / email: isaac.anyaogu@businessday.ng,
24
Tuesday 08 September 2020
BUSINESS DAY
Harvard Business Review
MANAGEMENTDIGEST
Why a COVID-19 World Feels Both Tiring and Hopeful for College Students SCOTT BERINATO
A
shley Whillans is an assistant professor in the negotiations, organizations and markets unit at the Harvard Business School. Laura M. Giurge is a postdoctoral research associate at London Business School. Lucia Macchia is a doctoral candidate at City, University of London. Ayse Yemiscigil is a postdoctoral research fellow at Harvard Kennedy School. COVID-19 is one of the most transformative and unpredictable pandemics in recorded history. It has fundamentally altered the way we live and work. It is easy to see why students are exhausted: Loved ones are getting sick, virtual classes are energy-draining and it is hard to focus amid worries about repaying loans and finding a job. From virtual graduation parties to postponed internships, students are contemplating career decisions — and COVID-19 is changing what we desire from our jobs and lives. These divergent reactions are driven by the fact that COVID-19 is not only a situation that threatens economics or physical health, it is a situation that threatens both. Indeed, COVID-19 is unique because it is a collective concern that involves money and disease. Between March and May 2020, we surveyed more than 1,300 college students who were attending college full-time in the U.S., the U.K. and Canada. To capture their lived experiences with the coronavirus, we asked students to report on how their health and household finances had been affected. Students told us about their feelings of loneliness and stress, how uncertain they felt about choosing their career, how worried they felt about their current and future financial situation, and how often they engaged in existential thinking — what researchers classify as thinking about one’s life beyond the here and now. As one student told us: “As more things are canceled, and there is more uncertainty about the future, I have come to appreciate things I was taking for granted. I am happy
that I have money saved and that my career path is practical. Before I felt pressure not to choose jobs based on money and security, but now I see that these factors are important when society is in a tough spot.” What we found at the end of our research should come as no surprise: 32% knew a close family member or a friend who had been sick with COVID-19, and 60% of students had lost income, and this was leading to higher levels of stress. In contrast with other survey data showing that students’ mental health has been stable during COVID-19, students in our study who had experienced effects on their health and finances were lonelier and more stressed than students who hadn’t. The students we surveyed reported high levels of stress and loneliness. Most students reported moderate to high levels of stress — 54% reported feeling that they “often” or “always” could not control the important things in their life, and 56% felt isolated from others on a regular basis. Moreover, about 15% had worried about their personal safety, food security or housing in the past week. These students were not only worried about the present, but when asked to think about www.businessday.ng
the future, they worried that they would not be able to find a job (60%), would struggle to meet living expenses (58%) or would experience significant financial instability upon graduation (50%). However, there was a silver lining. Many students also demonstrated a heightened concern for helping others and hoped to find work that fulfilled a greater purpose. Specifically, students reported a heightened interest in pursuing careers that were useful to society. The single highest job priority for the college students we studied was “to have a job that allowed them to help other people.” In light of the economic recession, perhaps unsurprisingly, students’ desire to have a purposeful career was followed closely by “having a job that resulted in high income” and “job security.” Prosocial and economic-based career motivations were stronger in this student sample than opportunities for advancement, job flexibility and free time — three motivations that typically dominate career interests among this age group. The work-relevant motivation to help other people was especially strong for students who reported engaging in existential thinking. Students who spent time during the
https://www.facebook.com/businessdayng
COVID-19 pandemic reading, thinking about or discussing their beliefs, reflecting on the nature of the universe or thinking about the meaning of life beyond the “here and now” reported feeling 3 to 5 times more strongly about choosing a career that helped others and served the world than students who did not report spending time engaging in deep thinking and reflection. These results are consistent with research on terror-management theory showing that reflecting on our own mortality can powerfully shape our values and goals. When people think about their place in the world and reflect on the transient nature of life, these thoughts encourage what researchers call “prosocial motivation” and, in turn, can inspire generous actions at work and in life, such as volunteering and mentoring. Research suggests that when people are made aware that life is limited, they more readily experience gratitude and appreciation for what they have in life (instead of focusing on what they do not have), and are more likely to help others as a result. Crisis events like the COVID-19 pandemic are especially likely to trigger awareness about mortality and inspire self-reflection and generosity — as long as indi@Businessdayng
viduals focus on the positive, reach out and find allies when they feel overwhelmed, and make space to actively reflect on their feelings and experiences. We are all exhausted and stressed. Perhaps more than any other group, students are especially concerned with what the future holds. Yet we can all learn something from our data and this moment. Using this present as a chance to reflect about life’s meaning, and our own desired legacy, can increase our resilience in facing our unknown challenges. In becoming more resilient and reflective, we will both reduce our own personal stress and become more focused on helping our families, our communities and our country. For those who are not only managing the day-to-day stress of the pandemic but also trying to thrive during a major life transition — such as graduating from college and job seeking — it is especially easy to become worn down right now. What we have to remember is that putting our mental health first is not selfish. In fact, it is prosocial. Taking the time to reflect on and digest the current situation will put all of us in a better position to enact our changing goals and help and support those around us.
Tuesday 08 September 2020
BUSINESS DAY
25
FEATURE 10 more years to deliver on the SDGs - Will the impact of Covid-19 help or mar efforts in achieving these goals?
T
Introduction he world as we know it has to a large extent changed forever due to the ongoing COVID-19 pandemic which has bedeviled respective governments responses globally. While Covid-19 continues to spread at an alarming rate of contamination, governments are easing restrictions and have lifted the lockdowns in many countries. At the beginning of the evolution of the pandemic, most countries in the world adopted some measures in response to the Covid-19 pandemic. After a few months of implementation, the global economy began to suffer, and the government authorities opted to relax the restrictive measures in order to revitalize corresponding economies. For instance, some Heads of States in the United States and Italy have had some disagreements with their administrations and/or a large part of citizens in their countries. They are criticized for putting the economy ahead of people’s lives. The leaders are therefore faced with a veritable equation: limiting the pandemic under the constraint of boosting economic activity. Locally at home, the Federal Government has done considerable work in ensuring the effects of the lockdown which started in March of 2020 but has since been gradually lifted, does not adversely affect the most vulnerable in society. The Economic Sustainability Plan outlines succinctly steps the government aims to take in channeling resources to key focus areas such as: Agriculture, Public Works, Housing, Strengthening the social safety net and of course supporting the Micro, Small and Medium Enterprise in the country. A stimulus package of 2.3 Trillion Naira has been earmarked for this endeavor. On the other hand, the Sustainable Development Goals (SDGs), a series of 17 goals that were adopted by all United Nations Member States in 2015 as a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030 is severely threatened by the pandemic. Regrettably, the Covid-19 pandemic is not only the defining global health crisis of this generation but also an unprecedented socio-economic crisis. The ongoing pandemic has uncovered the numerous gaps in policy versus practice around responses to the pandemic calling to question how realistic the 2030 target to attain the goals. Although all the SDG’s are important and a lot of work has gone towards its attainment, in this economist’s view, the goal most directly affected by Covid-19 pandemic is SDG 3 (Good Health and well-being). This novel goal specifically aims to ensure healthy lives and promote wellbeing for all at all ages. However, the infection rate and spread of COVID-19 all over the world has dampened the outlook since we can all admit that “Good Health” is the backbone of
every activity in the world. Although axiomatic but to buttress my point of view, without good health, one cannot have good education, and ultimately grow the economy for all to benefit. As you already know, a healthful lifestyle provides the means to lead a full life with meaning and purpose. On the education front, the Covid-19 pandemic has caused the largest disruption of education systems in history, affecting nearly 1.6 billion learners in more than 190 countries and all continents. According to the United Nations, school closures and other learning spaces have impacted 94 percent of the world’s student population, up to 99 percent in low and lowermiddle income countries. To be sure, the pandemic has deprived children and young adults of their regular education which will have lingering and substantial effects that may likely transcend generations in Nigeria in particular but globally in general. Historically and still relevant till today, education has been used as a tool to eradicate poverty in the world and progress societies overall aspirations. Accordingly, 171 million people could be lifted out of extreme poverty if all children left school with basic reading skills. That is equivalent to a 12% drop in the world total. Before the Covid-19 pandemic in Nigeria, quality education and literacy rate were already low. About 10.5 million of the country’s children aged 5-14 years were not in school. Only 61 percent of 6-11-year old regularly attended primary school and only 35.6 percent of children aged 3-5 years received early childhood education. The figures have increasingly become worse since the advent of COVID-19. Let me be clear on this, although every government has struggled with ensuring students www.businessday.ng
continue their education with minimal disruptions, Nigeria is having a more daunting task with limited resources to transition effectively from the traditional face to face mode of instruction to a more hybrid approach of limited face to face and leveraging on ICT (online learning). As a result of unpreparedness, we can trace the unintended consequences and perhaps collateral damage as follows; Closures of educational institutions will not only affect the education of the current students enrolled but also the ability of some parents to actively go into work making them at risk of losing their source of income and also, we can expect an increase in violence against women and girls. Presently, there are only a few educational institutions in the country that have adopted the virtual learning format leaving the most vulnerable out consequently, exacerbating the inequality between the richest and the poorest students. Towards the attainment of SDG 8 (Decent work and Economic Growth), there is no gainsaying that the impact of the pandemic has adversely affected the macroeconomic landscape which naturally affects the unemployment rate GDP rate and so on. Simply put, the Q2 economic performance has exposed the over reliance of oil, inadequate Healthcare infrastructure, the fractured supply chains and the country’s ability to remain attractive for foreign direct investments. The economic contraction of 6.1 percent in the second quarter of 2020 will leave lasting scars through lower investment, an erosion of human capital through lost work and schooling, and fragmentation of global trade and supply linkages. Developing economies such as Nigeria were already experiencing weaker growth before the crisis, now
https://www.facebook.com/businessdayng
the health cum economic shock of Covid-19 makes digging out of the contraction much more daunting. Indeed, Nigeria is still dependent on crude oil as it derives 90 percent of revenue from exports so the current crash in oil prices has also contributed to the Covid-19 challenges. The Federal Government has projected revenue flow from oil to decline from 5.5 trillion Naira in 2020 to 1.1 trillion Naira. To make matters worse, Nigeria has been battling the rise in unemployment and quite frankly, the pandemic has only made matters worse. One in every two Nigerians in the country’s labor force is either unemployed or underemployed. While Nigeria’s unemployment rate has climbed to 27.1% (up from 23.1% in Q3 2018), the country’s underemployment rate which reflects those working less than 40 hours a week, or in jobs that underutilize a person’s skills, time, or education has increased to 28.6% according the National Bureau of Statistics. Concluding Remarks and Policy Prescriptions The pandemic presents both an enormous challenge and tremendous opportunities for reaching the 2030 Agenda and the Sustainable Development Goals (SDGs). The SDGs are a roadmap for humanity. They encompass almost every aspect of human and planetary wellbeing and, if met, will provide a stable and prosperous life for every person, and ensure the health of the planet. This year SDG’s like most initiative have received a grievous blow, one that will be far reaching for years to come. The pandemic has affected numerous SDG goals immensely. To avoid further deterioration towards the attainment of the goals but more importantly to guide the government on the direction the country should be heading; this economist proposes @Businessdayng
the following; • Containing the spread of COVID-19 outbreak by sensitization and robust testing. Also, it would be worthwhile to ensure signed agreements with COVID-19 vaccine manufactures to enable nationwide vaccination can be achieved. • Boost investor confidence by easing foreign exchange restrictions to limit inflationary pressure i.e. healthcare related products and perhaps some staple food items. Additionally, refocusing the Apex banks core mandate of price stability and unifying the exchange rate while increasing exchange rate flexibility in order not to mount continuous pressure on the reserves and/or risk another round of devaluation. • Strengthen the transmission mechanism for supporting economic activities towards Women, MSME’s and vulnerable communities in our society. In conclusion, it is my humble opinion that Nigeria as a country remains resilient and can overcome the challenges inherent in a COVID-19 world. Nevertheless, the impact of Covid-19 can only mar the efforts in achieving these goals if we collectively fold our arms and do nothing.
Prof. Joseph Nnanna Development Bank of Nigeria
26
Tuesday 08 September 2020
BUSINESS DAY
property&lifestyle Real estate offers viable investment options as returns on savings tumble CHUKA UROKO
D
ue largely to the severe impact of Coronavirus pandemic on national and global economy, how to put the economy back on track has become the main pre-occupation of economic policy makers, leading to a comprehensive review of preCovid-19 fiscal and monetary policies. In Nigeria where the local currency, the Naira, is struggling with deep devaluation, the country’s Central Bank (CBN) has been upbeat with a number of monetary policies that are stripping the economy of whatever it could give back to investors as returns on their investments. There has been a significant drop in interest rate on savings. By the last count, interest rate on savings has dropped from 3.9 percent to 1.29 percent per annum or 0.104 percent per month. Similarly, interest rate on Treasury Bills, which used to be a preferred destination for investors with relatively patient capital, has crashed from 18 percent per annum a couple of years ago to less than 4 percent at the moment, making it an unattractive asset class for yield-hungry investors. But all hopes are not lost. Real estate is a viable option. It provides a leeway for investors with patient capital for medium to long term investment that pays significantly for the effort in terms of return on investment. Though there
are many ways to invest in this asset class, it calls for caution about risks. Experts say investing in real estate is a great way to trade with money and earn profits. If you know how to manage things and can do the research yourself, you can make much profit through these investments. Arguably, real estate investment is popular all over the world. It is an easy way to earn cash, and an investor can build up a future for himself through it. But sometimes,
people lose their investment when they are not careful. If you study and research your business, you will be capable of building a financial future in real estate. There are ways to make money from real estate investment and these include trust deals, rentals, house hacking, home renting, and flipping property. A prospective investor can decide on his own which way he finds the best. Though this is not catching up fast in Nigerian market, an investor can make a profit
more easily from real estate investment trusts (REITs) than buying property by himself. REITs act like mutual funds. You can invest in different properties. It is better than investing in only one property. In the long run, all investments go to buying properties. You wait for the eventual profits after investing in properties. REITs are typically handled by a company as has been done by Union Homes, UPDC, Skye Shelter etc. In rentals, the investor has to buy a property and rent it
to a trusted person. He earns money from rent and uses it to pay the mortgage of the property if the property was bought through mortgage. By the end of the mortgage, his earning will be significantly increased due to rent increases. Money is, however, spent on maintenance and repairs. Many people think that rent is fixed, but it’s not. Property value depends on the location and economic state of the country. If the economy of the country falls, then the property owner needs to rent it for a lesser amount. House hacking is a profitable way to make good money. For this, the investor needs to buy a multi-flat building. He can live in one unit and rent out other units. This will help him in getting monthly cash from rent, and he can easily bear his expenses. Home renting is similar to house hacking, but this method is more straightforward. The investor lives in a house where he doesn’t need to use all the rooms. So, he can rent the property easily while living in it. He doesn’t even need to purchase that property to give rent to people. Flipping property means an investor purchases a house, updates and repairs it, and then he sells it for more than the amount spent on purchasing and updating it. Therefore, he should know that most of his time, money, and energy will be required to make money this way in real estate. He needs to have money to buy the property and time to renovate it.
Naira devaluation holds two benefits for Nigerians in Disapora investing in real estate Endurance Okafor
N
igeria’s persistent dollar scarcity which has led to a further weakening of the naira holds two benefits for Nigerians in Diaspora who are looking at investing in real estate market back home. The 23 percent naira devaluation by the Central bank of Nigeria (CBN) as of August 2020 means that Nigerians abroad who are earning in foreign currencies can buy more properties this year than they did last year at a low cost or they can now spend less while buying a property in Nigeria. For example, a property that was sold for $30,000 (about N9.2m) in 2019 when the exchange rate was officially at 307/$ is now going for $24,180 (N9.2m) due to the less value of the naira. “A weaker exchange rate in Nigeria definitely holds investment opportunities for Nigerians in the diaspora
to invest in real estate because all of a sudden assets are now cheaper for them because they earn in foreign currencies,” Tayo Odunsi, CEO, Northcourt said. Exacerbated by the outbreak of Covid-19 and lower crude oil price, dollar shortages in Nigeria pushed the Central Bank to adjust its official currency peg against the dollar by N72. The apex bank first devalued the official exchange rate in March to N360 from N307. With the further decline in oil price, a commodity that accounts for more than 90percent of the country’s foreign-exchange earnings and more than a half of its revenue, the CBN on August 7 moved the FX rate from N360 to N381 per dollar. The naira should be anywhere between N427 and N491 to the dollar, converging with the black-market rate, Renaissance Capital said in a note to clients on July 7. “The devaluation of the
naira presents an opportunity for eagle-eyed Nigerian property investors in the Diaspora to add more properties to their investment portfolio because the lower value against the foreign currency gives them the opportunity to buy more for less,”Freeman Osonuga, a property broker and MD of Adloyalty Business Network said. Also, Fitch Solutions expects the naira to weaken to N475 against the US dollar at the end of this year, and further decline to N510 next year. “The depreciation will come in a series of steps, as in recent years, “it said, adding that policymakers are very unlikely to fully liberalise the FX regime. Data compiled from abokiFX.com, a platform that collates rates from street traders in Lagos shows that naira’s black-market rate sold at N440 per dollar on Friday from N306 a year ago. “A low-interest rate regime creates a secondary situation
www.businessday.ng
locally for real estate developers as they are yearning for off-takers which might not be strong and so internationals have an advantage because it is a buyer’s market and not seller’s,” Odunsi said. Following the impact of COVID-19 on the Nigerian economy and especially the real estate industry, analysts see the property industry to be a buyer’s market as real estate investors and potential home buyers now have higher bargaining power. ”l can tell you for a fact that we have also witnessed a surge in the sales of properties in the past few months due to the devaluation of the naira probably because many home based investors are trying to hedge their funds against inflation by investing in real estate, ”Osonuga said, adding that Nigerian investors in the Diaspora are also able to secure more property investments with same amount. Meanwhile, real estate
https://www.facebook.com/businessdayng
developers are also facing the brunt of the currency devaluation considering that they depend on 50 percent import of their building materials, meaning they are likely to spend more for less. On the strategy that can be employed by real estate developers to deliver low cost property despite the high construction cost, Odubsi said ”in the past, and I am sure that’s what is happening now, developers have had to become more creative in how to deliver their products without increasing price because in a weak economy you can’t increase price but you still need to be profitable. According to the CEO, a developer who would normally build a four-bedroom house on 450square metres is likely to now build the same property size on a 250 square metres, meaning it has an extra 150 square metres that can be used for another real estate development. @Businessdayng
Gtext Homes launches first 100% virtual property purchase platform in Nigeria Endurance Okafor
N
igeria’s real estate industry has received yet another impact of technology as Gtext Homes, a real estate development company, has launched a 100 percent virtual property purchase platform, the first of its kind in Nigeria’s property market. With the company’s innovative outing, potential property owners and investors can now inspect, get a land allocation and make payment online. According to Stephen Akintayo, the company’s CEO, not only does Gtext Homes offer 100 percent virtual real estate transactions, but also sends the property document to the buyer regardless of their location around the world. “Gtext Homes is the first company to have a 24/7 Customer Relationship Management (CRM) in Nigeria’s real estate industry and also the first to start 100 percent virtual property purchase in Nigeria,” Akintayosaidatthelaunchofthe e-commerce platform in Lagos. Explaining how the e-commerce platform works, Gtext Homes said that through the innovation, it can do a virtual inspection which enables its clients from anywhere in the world to see their product offerings followed by a virtual allocation and then payment. “Not just that, we have launched an e-commerce platform; you can also pay via our platform instead of doing transfer and not just that you can then manage your account; you can see how much you have paid and the amount that is left from maybe your installment payment plan,” the CEO said. As part of measures to serve its 10 percent clients in Nigeria as well as the 90 in the Diaspora, Gtext Homes also launched a 24/7 CRM services. The new product enables the company to attend to its clients at any time of the day. “Even if it’s 2 am WAT, our clients from any part of the world can reach us and this is also because most of our clients are in the Diaspora,” Akintayo said. On how the company plans to handle the issue of trust, a challenge that is common in Nigeria’s property market, Akintayo said Gtext Homes doesn’t have trust issues. “We don’t have a trust issue, anybody who follows our brand knows that we are trustworthy and also I built a reputation even before I went into real estate and so trust has never been an issue because 90 percent of our clients are those in the Diaspora, that means they have not seen the land and yet they were paying,” he said.
Tuesday 08 September 2020
BUSINESS DAY
www.businessday.ng
https://www.facebook.com/businessdayng
@Businessdayng
27
28
Tuesday 08 September 2020
BUSINESS DAY
BUSINESS TRAVEL
Non-deployment of drones didn’t affect material gathering in the recent helicopter crash – AIB-N boss Akin Olateru is the commissioner and Chief Executive Officer of Air Investigation Bureau Nigeria (AIB-N). In this interview with IFEOMA OKEKE, he speaks on how COVID-19 has affected AIB-N and how far the agency has gone in investigating the recent helicopter crash in Lagos. What is your assessment of the global aviation industry in the midst of Covid-19 pandemic? ovid-19 is not new to anybody; even kids on the streets know what it’s all about. The pandemic has affected the aviation industry worldwide. We are one of the industries that this Covid-19 has affected a lot in terms of revenue loss. It’s a very expensive virus and it has crippled a lot of activities, a lot of families are out of jobs. I think Nigeria has done its best to curtail it. I give a lot of credit to the Presidential Task Force (PTF) on Covid-19. They have been able to manage it very well. We just don’t have experience in this. It took us like a plague. So far, I am impressed with the way we have been handling it. I am impressed; we will make adjustments as we go along in terms of relaxation and all of that. It depends on scientific evidence available to the team. I believe the phase will pass; things will be back to normal, but when? It is the scientists that will come out with vaccines that will help to mitigate this risk. I believe it’s a matter of time, things will fizzle out and things will return to normal. How is your organisation addressing the challenges brought about by Covid-19 pandemic? In terms of performance, we refused to let the pandemic affect us. We are still doing what we would do normally, Covid-19 or not. We still ensure we deliver on our mandate, we ensure we do what we have to do, but the only problem we have is funding. Covid-19 has affected our revenues greatly. You know our source of revenue is from the three percent we get out of the five percent we collect from the Ticket Sales Charge/Cargo Sales Charge (TSC/CSC). So, in terms of affecting us, it’s more or less funding. But, in terms of doing delivery on our mandate, we made sure it hasn’t af-
C
fected us in any way. Sir, how far have you gone with your plans to expand the scope of your incident and accident investigation to other modes of transportation in the country? You will agree with me that it will start once the bill is approved by the National Assembly and the President. Currently, we are set out to investigate air accidents and there is a proposed bill in the National Assembly. At the House of Representatives, it has passed the second reading; we are waiting for a public hearing on the new AIB bill. At the Senate, we are waiting for a second reading and public hearing. Thereafter, it will be transmitted to the President for assent. For us, when you look at what we’ve done in air transport, we have been able to mitigate so many risks; we have managed to learn from our lessons in serious incidents. You look at aviation, it is a highly regulated industry, very expensive, highly technical, the fastest and the safest means of transportation and it is because of all these checks and balances that have made it so. There is a difference between investigating for liability, criminality and safety. AIB has been investigating for safety, not for liability and it is the same we want to take to other modes of transportation. It is not about who is at fault, it is about how we can prevent future occurrence. This is our core mandate and this is what we want to focus on. That is where we are and it’s going to take effect as soon as we have the greenlight from the president. Just as you know, accident investigation is a very complex assignment, what challenges do you face in the cause of discharging your duties? When you look at it, challenges could come in any organisations in four major areas; equipment, infrastructure, human capital and sys-
www.businessday.ng
Akin Olateru
tems processes and procedures. I always say that if you score less than seven out of 10 in any of these four areas, you still don’t have a company. If you have the best equipment and you don’t have manpower, you are not going anywhere. And if you have the best manpower, equipment, but you don’t have a good infrastructure and there are no systems and procedures to help them navigate their workings, you are not going anywhere. So, those four areas, I will say we had a huge challenge in them when I came in. Of course, the pillar of all the four is funding, but with the support of the Aviation Minister and the National Assembly, we have been able to navigate throughout that. Sir, since your assumption of office over three years ago, how much have you expended on training of your personnel and accident investigations? There are no two accidents that are the same; they may look the same,
https://www.facebook.com/businessdayng
but there are no two accidents that are the same. Also, in terms of costing, I don’t think I have been able to break it down to an exact figure. So, I will not be able to give you the exact figure, but I can describe the process for you. The type of accident will determine the cost. Sometimes, we have to send an engine back to the manufacturer, they call it engine teardown. So, we have to factor in the cost of shipping. What we want to ascertain is the engine producing power as at the time of the crash. So, there are several things that can push up the cost in accident investigation. It is a painstaking process, very detailed exercise, tasking and sometimes, it can be daunting because you must get it right. This is what accident investigation is all about. You must ensure whatever fact you put out there, you have enough evidence to back it up and this is why we go through so many different processes, depending on the crash. We get support from engine manufacturers, airframe manufacturers, and from some countries because it can be very complex sometimes. You trained about 10 investigators on the use of drones recently, were you able to deploy it to the crash site of the Quorum Aviation helicopter crash? No, we didn’t. AIB is a responsible agent of government. We can’t flout any government rules and regulations. To operate a drone, you need a license and we are yet to sort that out with the NCAA. In getting the license, part of the requirements is to train your people on how to handle the drones, which we have satisfied. The operator has to be licensed by NCAA. So, we are in the process of normalising our documentations. You will agree with me that any company or agency of government must constantly review its processes to enhance service delivery. That is one thing we do here,
@Businessdayng
we see how we do it and how we can make betterment or simplify the processes or get a better result for better performance. Did this hinder your job in getting materials from the crash? The non-deployment of drones didn’t affect our level of material gathering. The fact is drones are extremely essential when you have a wider area of crash, when you have a crash spanning about half a mile or a mile for instance. It takes time to walk through that to gather information or evidence, but for this one, we were fortunate the crash site was a bit contained. It was not over a large expanse of land. So, that is why we didn’t really miss it, but we hope to fast-track our application with the NCAA. But, on that day, LASEMA used their drones to take some pictures, but for us in AIB, we did very well. We have gathered the right information. Deployment of drones will happen once we have necessary permit and licensing from the NCAA. Apart from the flight safety and material science laboratories you already have, which other projects are the management thinking of embarking upon? Currently, the Federal Executive Council (FEC) approved construction of AIB headquarters and AIB training school in Abuja. These projects have started; we have two laboratories – flight safety and material science. For the material science laboratory, it’s a work in progress because we want to transform the material science lab to an avenue where we can make money. We cannot charge for what we do. We don’t charge for accident investigation; we don’t invoice anybody. We can look for little areas where we can use our resources to make money. That is the way we are going so that we can be able to address the issue of funding.
Tuesday 08 September 2020
BUSINESS DAY
29
News Buhari lists achievements at retreat, says reforms... Continued from back page
PPRA made the announcement a few days ago setting the range of price that must not be exceeded by marketers. The advantage we now have is that anyone can bring in petroleum products and compete with marketers, that way the price of petrol will be keep coming down. 15. The recent service based tariff adjustment by the Discos has also been a source of concern for many of us. Let me say frankly that like many Nigerians I have been very unhappy about the quality of service given by the Discos, but there are many constraints including poor transmission capacity and distribution capacity. I have already signed off on the first phase of the Siemens project to address many of these issues. Because of the problems with the privatization exercise, government has had to keep supporting the largely privatized electricity industry. So far to keep the industry going we have spent almost 1.7 trillion, especially by way of supplementing tariffs shortfalls. We do not have the resources at this point to continue in this way and it will be grossly irresponsible to borrrow to subsidize a generation and distribution which are both privatized. But we also have a duty to ensure that the large majority of those who cannot afford to pay cost reflective tariffs are protected from increases. NERC, the industry regulator therefore approved that tariff adjustments had to be made but only on the basis of guaranteed improvement in service. Under this new arrangement, only customers who are guaranteed a minimum of 12hours of power and above can have their tariffs adjusted. Those who get less than 12 hours supply, or the Band D and E Customers MUST be maintained on lifeline tariffs, meaning that they will experience no increase. This is the largest group of customers. Government has also taken notice of the complaints about arbitrary estimated billing. Accordingly, a mass metering program is being undertaken to provide meters for over 5 million Nigerians, largely driven by preferred procurement from local manufacturers creating thousands of jobs in the process. NERC has also committed to strictly enforcing the capping regulation which will ensure that unmetered customers are not charged beyond the metered customers in their neighbourhood. In other words no more estimated
Billings. 17. In addressing the power problems we must not forget that most Nigerians are not even connected to electricity at all. So as part of the Economic Sustainability Plan, we are providing Sola r home systems to 5 million Nigerian households in the next 12 months. We have already begun the process of providing financing support through the CBN for manufacturers and retailers of Off Grid Solar Home Systems and Mini-Grids who are to provide the systems . The Five million systems under the ESP’s Solar Power Strategy will produce 250,000 jobs and impact up to 25 million beneficiaries through the installation This means that more Nigerians will have access to electricity via a reliable and sustainable solar system. 18. The support to Solar Home System manufacturers and the bulk procurement of local meters will create over 300,000 local jobs while ensuring that we set Nigeria on a path to full electrification. The tariff review is not about the increase, which will only affect the top electricity consumers, but establishing a system which will definitely lead to improved service for all at a fair and reasonable price. 19. There has been some concern expressed about the timing of these two necessary adjustments. It is important to stress that this is coincidental in the sense that the deregulation of PMS prices happened quite some time ago, it was announced on 18 March 2020 and the price moderation that took place at the beginning of this month was just part of the on-going monthly adjustments to global crude oil prices. Similarly, the review of service-based electricity tariffs was scheduled to start at the beginning of July but was put on hold to enable further studies and proper arrangements to be made. This government is not insensitive to the current economic difficulties our people are going through and the very tough economic situation we face as a nation, and we certainly will not inflict hardship on our people. But we are convinced that if we stay focused on our plans, a brighter andmore prosperous days will come soon. Ministers and senior officials must accordingly ensure the vigorous and prompt implementation of the ESP & all of our programmes, which will give succour to Nigerians. 20. In this regard, the Central Bank of Nigeria (CBN) has created credit www.businessday.ng
facilities (of up to N100B) for the Healthcare (N100 Billion) and Manufacturing (N1 Trillion) sectors. From January, 2020 to date, over N191.87B has already been disbursed for 76 real sectors projects under the N1TRN Real Sector Scheme; while 34 Healthcare projects have been funded to the tune of N37.159B under the Healthcare Sector Intervention Facility. The facilities are meant to address some of the infrastructural gap in the healthcare and manufacturing sector as a fall out to the COVID-19 pandemic and to facilitate the attainment of the Government’s 5-year strategic plan. 21. Distinguished participants, to address our current economic challenges, and consolidate on our achievements over the past year, this retreat has been designed to: • Review the performance of each Minister in delivering the priority mandates, including programmes and projects assigned to them upon their appointment in 2019; • Identify key impediments to implementation; and • Re-strategize on how to accelerate delivery of results, given the current economic situation. 22. The retreat would also provide the opportunity to effectively evaluate the activities of the Ministries over the last twelve months with regard to the delivery of our agenda and promise to Nigerians. 23. The Ministers are urged to work closely with the Permanent Secretaries to ensure accelerated and effective delivery of the policies, programmes and projects in the priority areas. I have also directed the Secretary to the Government of the Federation to intensify efforts at deepening the work of the Delivery Unit under his coordination towards ensuring effective delivery of Government Policies, Programmes and Projects in the coming months. It is also my expectation that progress on performance of the implementation of the 9 priority areas will be reported on a regular basis. 24. In closing, I encourage optimal participation and contribution by all participants, while observing all the necessary safety protocols and compliance with COVID-19 guidelines. 25. On this note, it is my pleasure to formally declare this Retreat open. I look forward to a very fruitful session and stimulating exchange of views. 26. Thank you. 27. God bless the Federal Republic of Nigeria.
Bayelsa, NIMASA partner on Maritime Academy, deep seaport SAMUEL ESE
B
ayelsa State government has solicited the partnership of the Nigeria Maritime Administration and Safety Agency (NIMASA) towards establishing a maritime academy, enhancing security within its maritime domain and developing its deep seaport. Governor Douye Diri, who disclosed this on Monday during a courtesy visit to the NIMASA director-general, Bashir Yusuf Jamoh, in Lagos, said the state had re-opened the process ofestablishingtheacademyand recognisedtheagencyascentral to actualising the project. The governor, in a statement by Daniel Alabrah, his acting chief press secretary, noted that Nigeria’s real wealth and that of Bayelsa were in its maritime environment and that his
administration was ready to tap into the resources to improve the state’s revenue profile. Governor Diri stated that with the longest coastline in the country, Bayelsa was rich not only in oil and gas but very much so in maritime resources. “This is the beginning of an improved relationship between NIMASA and the people of Bayelsa State. We are both bound by acommondenominator,which is water. Bayelsa is a wholly riverine state with all its local governments and their headquarters accessible by river and rivulets. Till date, there are three local government headquarters you can only access through water namely Brass, Southern Ijaw and Ekeremor. “My visit is to further deepen the existing cordial relationship between our state and your agency. A huge part of Nigeria’s coastline is in our state. So we need to
join hands together in order to strengthen the maritime domain of our country. “Let me inform you that the Bayelsa State government is in the process of establishing a maritime academy. The process started before I assumed office and I’m prepared to continue with the process of having a maritime academy. “I believe that the wealth of this country and that of Bayelsa is in our maritime domain. I therefore invite you to partner with the state government in the establishment of that academy,” the governor said. While calling on NIMASA to take advantage of the opportunities in Bayelsa’s maritime environment by establishing a befitting office in the state, he appealed for synergy with the agency in order to combat sea piracy, kidnapping and other criminal activities on the state’s waterways.
Duoye Diri (r), governor, Bayelsa State, receiving souvenir from Bashir Jamo, directorgeneral, Nigerian Maritime Administration and Safety Agency (NIMASA), during the visit of the governor to NIMASA office in Lagos, Monday.
SystemSpecs emphasises need for data privacy amid Fintech boom BUNMI BAILEY
A
s digital technology becomes more preponderant in Nigeria, data privacy and security concerns of consumers have become serious issues. SystemSpecs, foremost technology company and developer of Remita, HumanManager and Paylink digital solutions, has brought these issues to the fore during a recent web event on data privacy and the implications of the Nigeria Data Protection Regulation (NDPR) for financial technology stakeholders, organised by FinTechNGR. During the event, experts emphasised the need for fintech companies to be conversant with data regulations, keep customer data safe and ensure security across all their products and service touch points. Issued by the National Information Technology Development Agency (NITDA)
https://www.facebook.com/businessdayng
in January 2019, the NDPR is the main data protection legislation in Nigeria. Made by virtue of the National Information Technology Development Agency Act 2007 (the NITDA Act), it authorises the NITDA to develop guidelines in relation to the exchange of data and information. The NDPR is also Nigeria’s most comprehensive legislation on the protection of personal data. It governs the control and processing of personal data of natural persons residing in or outside Nigeria but of Nigerian descent. According to experts at the event, the regulation also provides guidelines for the roles of the various parties involved in the management and protection of data in Nigeria. These include the Data Subject (owner of the data), Data Controller (an organisation that determines the purposes and means of personal data processing), Data @Businessdayng
Processor (a legal entity that processes personal data on behalf of the data controller), and the Data Regulator whose responsibility is to monitor the data management process to prevent the violation of the rights of the Data Subject. According Gbenga Oludaisi, headofEnterpriseRiskManagement unit at SystemSpecs who represented John Obaro, the company’s CEO at the event, the NDPR requires that data processing fulfils certain conditions.Theseincludetheneedfor the purpose of processing the data to be recognised by regulation and be in the interest of the publicaswellasthedatasubject, consent of the data subject, and the performance of an obligation under a contract to which the subject is a party. “Regulation demands that data controllers ensure that they conduct data audit on a yearly basis and file the result of the audit with NITDA,” Oludaisi said.
30
Tuesday 08 September 2020
BUSINESS DAY
news Nigeria’s second-biggest sector headed for depression as growth catalysts still weak BUNMI BAILEY
A
fter five consecutive quarterly contractions, Nigeria’s second biggest sector by output contribution, trade, may be heading towards economic depression as major headwinds stifling the sector’s growth show no signs of abating any time soon. According to the recent National Bureau of Statistics (NBS) Q2 2020 GDP report, activities in the trade sector declined steeply by -16.59 percent in the three months through June 2020, as the combined impact of the global pandemic and associated containment measures, coupled with lingering foreign exchange crisis, hit the sector hard. With consumers’ purchasing power getting weaker in the light of rising domestic prices and the Federal Government stuck with its decision of shutting land borders, analysts expect trade to record negative growth in subsequent quarters over the medium term. “The sector will contract in the third quarter because people that are into trading activities are finding it difficult to access dollars,” Ayodeji Ebo, managing director at Lagosbased Afrinvest Securities Limited, says, noting, “We have five negative growth and we need three more. So, it is
not impossible for the sector to slip into depression.” Economists define depression as an extreme recession that lasts for at least three years. Since 12 quarters make three years, growth rate needs to be in the negative region in the next seven quarters, starting from the Q3-2020, before trade can be officially declared to be in depression. This is imminent, especially with the continued closure of the Nigeria-Benin Republic border in almost four quarters now. Ibrahim Tajudeen, head of research at Chapel Hill Denham, who agrees that the sector could plunge into depression, notes the absence of real growth catalysts capable of lifting the sector into positive growth territory. Trade sector, which comprises wholesale and retail, has been in and out of negative growth territory since 2016, but at a marginal level over myriad challenges ranging from unpredictable government policies to weak consumer demand. “The negative growth trend will most likely be sustained in coming quarters,” states Damilola Adewale, a Lagosbased economic analyst, who identifies weak consumer demand, rising inflation, port inefficiencies, foreign exchange uncertainties and border closure as the major challenges confronting the sector.
Reps mull amendment to Fiscal Responsibility Act to block revenue leakages ... want improved funding for healthcare, education, others in 3 years James Kwen, Abuja
I
n its Revised Legislative Agenda, the House of Representatives has indicated plans to initiate an amendment of the 2007 Fiscal Responsibility Act (FRA) to require revenue generating agencies deposit at least 80 percent of their revenues into the Consolidated Revenue Funds (CRF) rather than their operating surplus, which they arbitrarily determine as of today. The Revised Legislative Agenda document submitted to President Muhammadu Buhari, seen by BusinessDay, is not yet in public domain. The House also wants to introduce a Bill that would ensure effective coordination of donors and efficient/judicious use of all funds from foreign Official Development Assistance (ODA). The intended donor bill is also to ensure
that all donor assistance align with development plans, while placing priority on the engagement of Nigerian development practitioners/local experts in the implementation of donor programmes. Nigeria’s ninth House of Representatives had launched its legislative agenda last year November, which intended to among others, take necessary legislative steps to address national challenges, poverty, infrastructure decline, waste of resources, revenue leakage and corruption. But the outbreak of the COVID-19 pandemic, which has taken toll on all spheres of national live, particularly the economy, had stalled the attainment of those goals, necessitating an updated agenda that would carter for the emerging trends. The Updated Legislative Agenda, which was presented to President Muhammadu Buhari by the speaker of the
House, intends to initiate, pass and codify special interventions/legislations in response to impacts of COVlD-19 on the economy. Some of the interventions as outlined in the new agenda include stimulus packages, tax rebates, loan repayment waivers, especially for the Micro, Small and Medium Enterprises (MSMEs) and passage of the Petroleum Industry Bill (PIB) to improve efficiency, reduce wastage and limit corruption in the petroleum sector. The new agenda are also to promote SMEs in the country by mandating that a percentage of all Federal Government contracts be awarded to indigenous small and medium-sized enterprises and ensuring that all Ministries, Departments and Agencies (MDAs) of government are in full compliance with the Local Content Laws of the federation. Of all these, the amendment of the Fiscal Respon-
L-R: President Mahamadou Issoufou of Niger Republic; President Muhammadu Buhari of Nigeria; President Macky Sall of Senegal, and President Umaro Embalo of Guinea Bissau, at the 57th Ordinary Session of the ECOWAS Authority of Heads of State and Government in Niamey, Niger Republic, yesterday.
What we have learnt so far from banks’ Q2 earnings season BALA AUGIE
I
t is a mixture of good and bad for Nigeria’s largest banks that have released second quarter/half-year (HI) results. Coming into 2020, investors and analysts had anticipated that interest and non-interest income would be further pressured while margins constrained. But the unprecedented economic uncertainties caused by the coronavirus pandemic that disrupted business activities across the globe has worsen the pains of operators in the industry. Expectedly, the combined interest income and similar charges of the largest listed lenders dipped by 0.79 percent to N1.37 trillion from N1.38 trillion the previous year, data gathered by BusinessDay show. Analysts had expected the drop in interest income components of revenue as banks had been forced to lower interest rates earlier in a bid to meet the Loans to Deposit Ratio Requirement. Also, the hike in Cash Reserve Ratio (CRR) by the central bank to stimulate the economy during Covid-19 crisis and the low interest rate environment and declining rates on fixed income securities (OMOs and bonds) cast a pall on future earnings of banks. “Banks have announced
various types of relief programmes and made provisions for restructuring of loans, which involve payment holidays,” said analysts at United Capital in a recent note to clients. “The summary of the factors highlighted above means that the interest income on loans is expected to reduce,” they said. The combined total and advances for the 12 largest lenders increased by 8.37 percent to N16.46 trillion in June 2020 from N15.19 trillion the previous year, according to BusinessDay calculations. Combined total assets were up 19.10 percent to N41.56 trillion as at June 2020, thanks to increases in deposits from customers, trading assets and loan growth, according to the data gathered by BusinessDay. According to a recent report by the Central Bank of Nigeria (CBN), banking sector’s credit to the private sector rose by N757 billion or 2.57 percent to N30.189 trillion as at July 2020, compared with the N29.432 trillion it was at the end of June. The surge in lending to the private sector could be attributed to the central bank’s aggressive development finance as well as measures it introduced to cushion the effects of the COVID-19 pandemic on households and micro, small and medium scale enterprises, in which the banks are the participating financial institution. www.businessday.ng
sibility Act (FRA), 2007 and Donors Coordination Bill is expedient to check leakages and funds wastage as well as promote accountability and transparency, experts say. As it is presently, the Fiscal Responsibility Act 2007, mandates any government agency that generates revenue to remit 80 percent of its operating surplus to the Consolidated Revenue Fund (CRF) account, instead of the generated revenues. According to experts, the amendment of the Fiscal Responsibility Act will save a situation where revenue generating agencies spend huge percentage of funds generated on their expenditure, remitting a fraction to the national purse. Tope Fasua, CEO, Global Analytic Consult, says amending the FRA has become important because recent probes have revealed gross misappropriation of funds by most MDAs.
Doctors’ strike over welfare signals perennial neglect in healthcare may persist Temitayo Ayetoto
T
he ongoing strike by the Nigerian Association of Resident Doctors (NARD) has again proven that Nigeria may be far from a future where neglect of the healthcare sector needs would be over. It is the second time during the coronavirus pandemic that doctors have picketed the government for its failure to honour demands, including the implementationofresidencyfunding, COVID-19 allowance, payment of hazard allowance and the outstanding salary shortfall of 2014, 2015, and 2016. It is equally the second glaring opportunity that the Federal G overnment has squandered to demonstrate an unreserved commitment to prioritise its healthcare sector by boosting the morale of its fighters in a fight against a pandemic. Worldwide, health systems where essential workers are
owed salaries, allowances and lack the improved equipment to deliver quality results in their jobs naturally lose talents to climes where these demands are aggressively protected. Nigeria is one of those countries that employ fewer healthcare workers compared to the barrage of demands from an overwhelming population in its ill-equipped hospitals. At least, 7,875 Nigerian doctors are practising in the United Kingdom currently, according to the UK’s General Medical Council, while 4,000 practise in the USA. More than 20,000 Nigerian doctors currently work outside the country just as 80 percent of those working in the country are aggressively chasing exit options, a recent NOI Polls survey reveals. Whereas the country’s estimates show that it has one doctor to 6,000 people, as against WHO’s recommendation of one to 600 people.
https://www.facebook.com/businessdayng
Another poll citing the Medical and Dental Council of Nigeria (MDCN) reports that there are about 72,000 nationally-registered Nigerian doctors, with only 35,000 practising in-country. Estimates say there is a deficit of over 260,000 doctors in Nigeria and a minimum of 10,605 new doctors need to be recruited annually to meet global targets. NARD’s decision follows its national executive council meeting held to review the 21-day ultimatum issued to the government. In spite of the inclusion of residency funding in the revised 2020 budget, the association says the government has not made plans to implement payment. “NEC resolved to proceed on indefinite nationwide strike action from Monday 7th of September 2020 by 8am until the following conditions are met; immediate payment of the Medical Residency Train@Businessdayng
ing funding to all her members as approved in the revised 2020 budget; provision of genuine Group life insurance and death in service benefits for all health workers,” it said. “Payment of the outstanding April/May and June COVID-19 inducement allowance to all health workers; determination of the revised hazard allowance forallhealthworkersasagreedin previous meetings with relevant stakeholders; immediate payment of the salary shortfalls of 2014, 2015 and 2016. “Doctors working under the various tertiary health institutions to be placed on appropriate salary grade level and universal implementation of the Medical Residency Training Act of 2017 in all state tertiary health institutions; payment of all arrears owed our members in Federal and states tertiary health institutions, arising from the consequential adjustment of the National minimum wage.”
Tuesday 08 September 2020
BUSINESS DAY
31
News Business leaders, others oppose bill to... Continued from page 1
tors and lawyers say the bill
could create a monster regulator in the CBN, by allowing it to do and undo without judicial review. One of such provisions they say is Section 51 of the Bill, which grants immunity from judicial intervention to the Federal Government, the CBN, or any officer of the Federal Government or the CBN from any action, claim or liability to any person in respect of anything done in the exercise of their duties under the Bill. Section 51 of the Bill reads, “Neither the Federal Government nor the Bank nor any officer of the Federal Government or the Bank, shall be subject to any action, claim or demand by or liability to any person in respect of anything done or omitted to be done in good faith in pursuance or in execution of, or in connection with the execution or intended execution of any power conferred upon that Government, the Bank or such officer, by or under this Bill or the CBN Act or any rules, regulations, guidelines or directives issued thereunder or pursuant to any other relevant laws,” according to a copy of the Bill seen by BusinessDay. “What would a governor of the central bank need this immunity for?” asked a former governor of the apex bank who spoke with our reporter. According to the former apex bank governor, “You already have in BOFIA a section that requires any one to first write the governor before he or she can sue the governor. The governor does not need the kind of immunity we are talking about and I do not think there is any sensible country in the world with a provision like this. What do we do if it happens that a governor contravenes the very law establishing the bank?” In a letter seeking the urgent intervention of President Muhammadu Buhari, the leading private sector thinktank, the Nigerian Econom-
ic Summit Group (NESG), raised concerns about sections of the bill it said should be amended before presidential assent was given. The NESG also kicked against granting immunity to the CBN and its officers from judicial review of acts undertaken in the exercise of their administrative duties. The concerns of the business leaders include the real worry that the bill attempts to usurp the power of the courts to grant restorative or similar orders against the CBN or the governor in any action, suit or proceedings in relation to the revocation of a licence by the central bank and limits claimants remedy to only damages. They say the bill extends the scope of the central bank’s regulatory oversight and licensing over and beyond the collection and solicitation of deposits from the general public. In addition, they say the bill gives the governor of the CBN absolute powers to refuse to grant a banking licence without giving any reasons whatsoever. According to the business leaders, such enormous power goes against the grain of contemporary and good order regulatory oversight. The NESG also says the bill attempts to restrict/prohibit Nigerian banks from establishing any relationship with a foreign bank or other entity that does not have a physical presence in its country of incorporation. This will seriously impact the ease and efficiency of doing business by Nigerian banks. Other sections of the bill about which the NESG raised alarm is that it provides a process for the restructuring of banks outside of the provisions of the recently signed Companies and Allied Matters Act (CAMA). The bill also appears to suggest that the CBN may grant a licence to foreign banks to undertake domestic or offshore business within a designated free trade or special economic zone in Nigeria. In addition, the bill grants
Naira defies CBN’s $51.8m sales to BDCs... Continued from page 1
But this dollar allocation could not strengthen the value of naira, which as at 1.41pm on Monday had depreciated by an average rate of N4.33k as the dollar traded at an average of N444.33k compared to N440 traded on Friday on the black market. Aminu Gwadabe, national president, Association of Bureau De Change Operators of Nigeria (ABCON), told BusinessDay that 5,180 BDCs had been cleared to collect $10,000 each from the International Money Transfer Operators’ (IMTOs) proceeds
nationwide. He said payment had started in all the collection centres across the zones, which consist of Lagos 2,770 BDCs, Abuja 800 BDCs, Kano 900 BDCs, and Awka 450 BDCs. Currency traders, however, told BusinessDay that the $10,000 allocation to each BDC by the CBN was not enough to meet the huge demand for the greenback by end users. A breakdown of the exchange rate across three areas of Lagos where black market operators operate, as surveyed by BusinessDay, shows that dollar is going for N450 (selling) and www.businessday.ng
L-R: Boss Mustapha, secretary to the government of the Federation; Ibrahim Gambari, chief of staff to President Muhammadu Buhari, welcoming Vice President Yemi Osinbajo to the first year ministerial performance review retreat at the Presidential Villa in Abuja, yesterday. NAN
the CBN examiners powers to attend (as observers) management and board meetings of banks and other financial institutions or specialised banks. According to the NESG, the bill “will have serious negative throwback on the country as a whole, jeopardise ability to engage in third party transactions and enable unbridled exercise of power by officers of the Bank, in a world where the actions of the financial sector and its regulators are being brought under closer scrutiny. In modern democracies only heads of governments carry such immunity,” the NESG letter to Buhari read. Also, a former deputy governor of the central bank who spoke with BusinessDay expressed grave concerns, saying, “No CBN has had reason to push for such powers which blatantly attempts to give the current leadership of the bank power to break eggs without being questioned about where the omelettes are.” “Clearly, the economy will suffer for it as this proposed law only increases the risk associated with investing in Nigeria,” the former deputy governor said. A senior lawyer, who served as a state attorney general, not only questioned how the Bill managed to scale
through the National Assembly but also why there was no wide ranging consultation and days of public hearing to highlight the several contentious provisions in the Bill. He questioned why the National Assembly did not advertise its mind to the unlimited jurisdiction conferred by the 1999 Constitution on the Federal High Court to review decisions of regulators created by mere statutes that cannot override the same Constitution. He noted, “It is not clear the nature of the regulatory mischief that this attempt to confer Presidential-style immunity on CBN is designed to prevent and so we have here a very clear power grab that borders on case of regulatory megalomania.” However, Konyin Ajayi, a senior advocate of Nigeria and professor of law, comes to the defence of the bill. “It is nothing like the immunity that Governors enjoy; rather it protects actions done in good faith in the mould of existing laws that protects all public servants - by way of pre action notice or public officers protection law,” Ajayi told BusinessDay. “This is not new and has always been in BOFIA and has been upheld by the Supreme Court in a number of cases - in
line with high public policy considerations of protecting orderly public administration from frivolous actions.” The existing BOFIA does have a provision in Section 53 that reads: “Neither the Federal Government nor the Bank nor any officer of that Government or Bank, shall be subject to any action, claim or demand by or liability to any person in respect of anything done or omitted to be done in good faith in pursuance or in execution of, or in connection with the execution or intended execution of any power conferred upon that Government, the Bank or such officer, by this Act.” The new Bill will however confer more powers on the CBN, Businessday learnt. Calls to the CBN seeking clarity on what it expects to achieve with the new powers were not immediately returned. President of Progressive Shareholders Association of Nigeria (PSAN), Boniface Okezie, also questioned why the CBN governor wants to leverage the Bill to create immunity for himself, which he said would deter moves to question wrong doings in future. “Such a provision should be dead on arrival,” Okezie said. “Why immunity for
CBN? Does it mean they have skeletons in their cupboard which they wouldn’t want to be questioned,” he asked. Okezie said it would be better for NASS to rather make an act to make CBN not an appendix to the Executive. “That is the kind of law investors want to see not the kind that wants to create immunity for CBN governor,” he said. The Nigerian Bureau of Statistics (NBS) reported last week that Africa’s largest economy contracted by a record 6.1 percent in the second quarter of 2020, the most since 2004 as the country grapples with lower oil prices and the COVID 19-induced economic headwinds. Investment inflows into Nigeria fell by the most in four years to $1.29 billion in the same period. Badly-needed Foreign Direct Investment was at a paltry $148.6 million, a decline of 33 percent compared to last year. The CBN with its numerous intervention funds has extended its tentacles and authority to such diverse areas of the economy like arts and culture; entertainment; technology; healthcare; agriculture; aviation and others.
N438 (buying) at Eko Hotel, N438 (selling) and N434 (buying) at Lagos international airport, and N445 (selling) and N440 (buying) at Festac Town, Lagos. However, according to traders’ speculations, the rate moderated marginally as the FX market closed at an average rate of N441.67 per dollar, representing N2.67k gain over N444.33k traded intraday. With the closing rate, naira has lost N11.66k when compared with N430 it closed with on Friday last week on the black market. Reacting to the development, Johnson Chukwu, managing director/CEO, Cowry Asset Management Limited, is careful not use
one single day development to make judgment, but said, “The market needs to be observed as from Tuesday (today) to see what happens. If the CBN sustains dollar sales, naira would stabilise.” Bu t t h e g re e n b a ck closed Monday for N445/ intraday N450 (selling) and N438 (buying) at Eko Hotel, it weakened to N440 from N438 (selling) and N436 from N434 (buying) at Lagos international airport, and closed N440 from N445 (selling) and N435 from N440 (buying) at Festac Town, Lagos. Analysts and industry watchers doubt the sustainability of the fixed rate for BDCs by the CBN.
Taiwo Oyedele, head of tax at PwC, said the ability to sustain the rate of N386 prescribed by the CBN for dollar sale by BDCs would depend on whether the CBN itself can sustain the allocation of dollars to the BDCs to meet the demand in that segment of the market, some of which was speculative. At the Investors and Exporters (I&E) FX market, the naira appreciated by 0.03 percent as the dollar was quoted at N386 as compared to N386.13 the previous day. Analysts at FSDH said most participants maintained bids between N380 and N395.13 per dollar. Moreover, Nigeria’s FX
reserves grew slightly last week, despite the CBN’s interventions across the various FX windows. FX reserves increased by $38.50 million to $35.70 billion as of September 4, 2020. The CBN had in a circular last week signed by Ozoemena Nnaji, director, trade and exchange department, announced the applicable exchange rate for the disbursement of International Monetary Transfer Operators (IMTOs) proceeds as follows: IMTOs to sell to banks at N382 per dollar, banks to CBN at N383 per dollar, CBN to BDCs at N384 per dollar, and BDCs to endusers at not more than N386 per dollar.
https://www.facebook.com/businessdayng
@Businessdayng
With contributions from Iheanyi Nwachukwu
32
Tuesday 08 September 2020
BUSINESS DAY
NEWS
NESG draws attention to Nigeria’s low-interest rate environment
Lagos flattening COVID-19 curve, says Sanwo-Olu
…warns it puts domestic investors, pensioners at disadvantage
SEYI JOHN SALAU
Endurance Okafor
T
he distortions in the liquidity and interest rate management of Nigeria’s financial system will discourage savings and investments, as well as put pensioners and long-term savers at a disadvantage, a private sector-led thinktank and policy advocacy group, Nigerian Economic Summit Group (NESG) has said. According to the NESG, Nigeria’s low-interest policy is inimical to the President Muhammadu Buhari-led administration’s concern for the elderly, the weak, the infirmed and those who had served this country meritoriously in their prime. “The NESG observes with concern some distortions in the liquidity and interest rate management
of our financial system which has resulted in rate distortions, causing grave disadvantage to domestic investors and pensioners,” NESG said in a statement titled: “Matters of Urgent Attention” it released on Monday. According to the group, “it must be stressed that our country needs to mobilise domestic savings and investments even as we seek to attract foreign investments. We should be careful not to initiate policies that appear to discriminate against or discourage domestic savings and investors.” NESG explained that the low-interest rate policy was one of those that might make average Nigerians poorer by the day and so “should not be encouraged.” While interest rates have always been high in Nigeria due to the monetary system
in vogue since 2009 which sought to use FGN bonds/ T-bills and OMO bills as a means of attracting US dollar to stabilise the naira, the recent OMO policy by the Central Bank Nigeria (CBN) which prevents domestic investors from participating in the auction has sent yields to its worst record. Effect from October 23, 2019, the apex bank banned non-bank locals (individuals and corporates) from participation in its Open Market Operations (OMO) at both the primary and secondary market. The CBN’s policy is largely in line with its drive to divert liquidity away from riskfree instruments to the real sector. “Savers who have to earn below inflation rate return on their savings would see the value of their money eroded. Thus, by the time repayments are made, the purchasing power of the
saved money would be lower, which implies lower income, lower demand and lower output,” Ayorinde Akinloye, a research analyst at CSL Stockbrokers Limited said. Meanwhile, the central bank recently introduced a policy that slashed the minimum interest rate banks pay on savings deposits to 1.25 percent from 3.75 percent. While banks are expected to be the biggest beneficiar y of the rate reduction as it boosts their profitability, Nigerian savers are going to be negatively hit. By reducing the minim u m i n t e re s t ra t e o n savings deposits to 1.25 percent per annum, the negative interest earned on deposits by Nigerian savers will widen to -11.5 percent from -8.7 percent when inflation rate of 12 percent is factored.
Investigate Ondo toxic incident thoroughly, group tells police
Attorney-general/ minister of justice, and DG/CEO ICRC at one year ministerial performance retreat at Aso Villa on Monday
KORETIMI AKINTUNDE, Akure
T
Ogun to harmonise taxes, levies RAZAQ AYINLA, Abeokuta
A
s part of efforts to improve its ranking on ease of doing business, Ogun State government has assured investors of immediate harmonisation of taxes and levies separately and jointly charged by the state and local governments. Recall that investors and entrepreneurs under the auspices of the Manufacturers Association of Nigeria (MAN) and Ogun State Chambers of
L
agos State governor, Babajide Sanwo-Olu said on Monday that the state is currently witnessing the flattening of the Covid-19 curve. In the light of this, SanwoOlu has appealed to Lagosians to cooperate more with the government and continue to adhere to all necessary Covid-19 towards freeing the state from the pandemic. The governor spoke at the opening of the second session of the 34th Synod of the Diocese of Lagos, Church of Nigeria, Anglican Communion, which held at Our Saviour’s Church, Lagos, with the theme, ‘Pray, Serve, and Grow’. “It has been said that we will be picking dead bodies on the streets but we thank God He kept all of us. We have less than two percent fatality; when the statistics said that it will be 10 to 15 percent,” said Sanwo-Olu. According to him, the state government had anticipated that by August the curve would have flat out, meaning that the positivity rate would have flattened and Lagos will begin to see a downward trend. “I’m happy to inform the people of God that the curve is coming down, and we are beginning to see low number in the positivity of the Covid-19 in the state,” SanwoOlu stated. The governor in appealing to Lagosians, said “Though we are not out of the woods yet, we need to take precautions as we see the numbers coming down. Lagos, the epic centre indeed has risen up to the challenge. “We sympathise with the
people that lost their loved ones, and we pray that God will spare our lives. As a government, we will continue to do our best to save lives,” said Sanwo-Olu. Sanwo-O lu, however, urged the church to pray for the state government, noting that, “we acknowledge our limitations as human beings. We need the Supreme who knows all and is in charge of all circumstances man may face.” Humphrey Olumakaiye, the president of the Synod and Diocesan Bishop of Lagos, in his address condemned the recent hike in the price of fuel and electricity tariff, saying it will lead to more hardship for Nigerians and corporate organisations. “It is heartrending that all these are coming up at a time when we are just trying to get over the hassle brought upon us as individuals and collectively by the much dreaded coronavirus. “We should bear in mind that increase in electricity tariff and fuel price will definitely tell on other commodities and the poor masses are always at the receiving end,” said Olumakaiye. According to the Lagos Bishop, the poor masses should be able to find solace in the government and not otherwise, with the nation’s refineries made to work at full capacity while transparency should be ensured at all levels. “At a time like this, putting manifestoes aside, the government should seek the comfort of all the citizens. Truth be told, fuel and electricity are the essential palliatives that can go round without been shortchanged,” Olumakaiye stated.
Commerce, Industries, Mines and Agriculture recently complained on multiple taxes and levies being charged by the state and local governments in the state, which impact the overhead cost of manufacturing and service-based firms operating in Ogun. Speaking on this, Kikelomo Longe, commissioner for industry, trade and investment, stated that the harmonisation of taxes and levies would address investors’ concerns, adding that the government was ready to deal with touts by arrestwww.businessday.ng
ing illegal tax collectors and prosecuting them through its mobile courts. Longe, who paid working visits to select manufacturing industries across the state, including Purechem Cement Industries at Onigbedu in Ewekoro local government area and AACE Foods Limited, Sango-Ota in Ado-odo/ Ota local government area on Friday, assured investors that the Governor Dapo Abiodunled administration would to create the enabling environment for businesses to thrive. She, however, called on
industries in the state to synergise with the government in “building our future together agenda” through the use of the state job portal in recruiting their employees as well as engage in corporate social responsibility for their various host communities. Managing director, Purechem Industries Limited, Suresh Govindaram, said that over 600 Nigerians were employed in the company. He assured the government that the company would start using the job portal in recruiting its employees henceforth.
https://www.facebook.com/businessdayng
he authorities of Ondo/ Linyi Industrial Hub has called for proper investigation of the cause of the death of three persons allegedly linked to toxic waste in the Omotosho forest reserve in Ondo State. Three persons- Akinmusire Monday (35), Samuel Louis (45), and Ododolewa Adebowale (19), all residents of Akinfosile in Okitipupa local government area of the state, were last weekend reported to the police in Ondo, to have allegedly died from toxic waste complications. Speaking with journalists in Akure on Monday, chairman of the industrial hub, Alex Ajipe said it was imperative for the police to conduct thorough investigations into the circumstances surrounding the deaths. Ajipe noted that the police should be allowed to carry @Businessdayng
out appropriate investigation, including autopsy on the bodies of the dead, to ascertain whether they died from issues relating to toxic wastes in a forest. “While we appreciate the Nigeria Police for their prompt action, we urge them to do a thorough investigation of the incident and come out with the facts,” he said. Ajipe noted that all industries within the industrial hub were complying with the rules and regulations on the environment as provided for by the law. “I am stating here categorically that none of the companies here can dare to do what runs contrary to the dictates of our laws in this country. “Their operation is in tandem with international standards. We (management) personally invited all industrial unions to organise their various members in companies within the industrial hub.”
Tuesday 08 September 2020
BUSINESS DAY
www.businessday.ng
https://www.facebook.com/businessdayng
@Businessdayng
33
34
Tuesday 08 September 2020
BUSINESS DAY
Live @ The Exchanges Investors seen cashing out gains in Nigeria’s bank stocks heanyi Nwachukwu
N
igeria’s equities market opened this week on a negative note as investors moved to cash out some gains in a number of banking stocks that had rallied recently. Market watchers see the resumption of FX sales providing foreign investors the long-waited opportunity to sell their stakes and limit exposure in equities. Investors lost N13billion at the close of trading on Monday September 7. GTBank, UBA and Zenith Bank stocks topped the list of equities investors took profit on, which fueled the record decline in the market’s benchmark performance index while bargains hunting in Stanbic IBTC, Access Bank and others could not reroute the market. In 4,699 deals, investors exchanged 254,973,889 units valued at N2billion.
UBA, Zenith Bank, Access Bank, Custodian Investment and FBN Holdings were actively traded stocks. The Nigerian Stock Exchange (NSE) All Share Index (ASI) –decreased by 0.09percent to close at 25,582.23 points from preceding day high of 25,605.64 points while the market capitalisation of listed stocks decreased from N13.358trillion to N13.345trillion. The market’s negative return year-todate (ytd) stood at -4.69percent. GTBank stock price decreased most on the Bourse from N26.55 to N25.9, losing 65kobo or 2.45percent; followed by Dangote Sugar Refinery which dropped from N12.5 to N12.05, losing 45kobo or 3.60percent. Red Star Express also dipped from N3.89 to N3.72, losing 17kobo or 4.37percent. UBA decreased from N6.45 to N6.3, shedding 15kobo or 2.33percent; while Zenith Bank share price dropped from N17.4 to N17.3, losing 10kobo or 0.57percent.
www.businessday.ng
NSE to host capacity building session on Derivatives in Nigeria
T
he COVID-19 pandemic has metamorphosed into economic crisis for countries and financial markets that has caused volatility in price of commodities and stocks around the world. It has, therefore, become imperative for market participants to stay informed about new developments in financial products to make the right investment decisions. It is on the back of this that the Nigerian Stock Exchange
(NSE) is hosting a virtual training session for prospective derivatives products market participants on Tuesday, 8 September 2020. This virtual workshop themed adopting derivatives during stressed market conditions, will be hosted by the Chief Executive Officer, NSE, Oscar N. Onyema, and will feature Charles Rubin, Chief Executive Officer, CRUBIN Futures, USA as a speaker. The sessions have been designed to provide further
sensitisation on the NSE’s derivatives market, facilitate a better understanding of the derivatives product and highlight its applicability to hedge against crisis such as the current one. Interested participants such as Pension Fund Administrators, Asset Managers / Portfolio Managers, Regulators, Brokers, Bankers can access the workshop at https:// bit.ly/nse-derivatives-webinar. It is important to note that The Exchange continues
to make notable contributions to introduce Exchange Traded Derivatives to the Nigerian capital market and ensure alignment with the International Organization of Securities Commission (IOSCO) principles. Some of these efforts include facilitating access to recognised and licensed derivatives products, world class market surveillance technology, effective trading rules as well as appropriate risk management and clearing facilities.
African Alliance names Olabisi Adekola acting MD/CEO Modestus Anaesoronye
T
he Board of Directors of African Alliance Insurance Plc has appointed Olabisi Adekola as the acting managing director of the foremost insurer effective September 1, 2020. This follows the exit of the immediate past managing director of the company, Funmi Omo, after thirty years of meritorious service. Adekola is a financial analyst, investment
manager and proven business continuity leader with over twenty five years’ experience in financial management, internal audit and accounting. She began her career at Nigerian Hoechst in the mid-90s before joining African Alliance in 1997 as Assistant Superintendent in the Finance department. She rose through the ranks across various Finance/Audit functions to Head the Finance department as Assistant General Manager (Finance and Investment) in 2010. She was
https://www.facebook.com/businessdayng
promoted Executive Director (Finance) in 2012 capping a brilliant lateral growth in the company. Adekola holds an MBA in Financial Management from the Lagos State University and is a Fellow of both the Institute of Chartered Accountants of Nigeria (FCA) and Association of Investment Advisors and Portfolio Managers (FIAPM); an Associate Member of the Chartered Institute of Taxation of Nigeria (ACTI), Nigeria Institute of Management and Business
@Businessdayng
Continuity Professional, Disaster Recovery International. A brilliant mind, Adekola is also an alumnus of the prestigious Lagos Business School. By this appointment, albeit in acting capacity, Adekola becomes the latest in the elite line of home-grown Managing Directors the sixty-year old company has produced, further reinforcing the widely held notion that the company is a breeding ground of talents and outstanding professionals. She has since resumed in office.
Tuesday 08 September 2020
BUSINESS DAY
35
POLITICS & POLICY
Edo 2020: INEC expresses worry over drumbeats of war by political actors James Kwen, Abuja
A
head of the September 19 gubernatorial election in Edo State, the Independent National Electoral Commission (INEC) has expressed serious worry over what it described as, “loud drumbeats of war from political actors”. The Chief Press Secretary to the INEC Chairman, Rotimi Oyekanmi who expressed the worry on Monday at a webinar on Edo/ Ondo Elections by the International Press Centre (IPC), said there have been accusations and counter accusations. Oyekanmi said: “As we approach the Edo governorship election, it is clear that the good people of the state and Nigerians as a whole are very concerned about what will happen on election day. “On proactive measures taken by the Commission to address security concerns, consultations with the ICCES are on-going. About two weeks ago, the INEC Chairman, Prof. Mahmood Yakubu led a delegation to meet with the revered Oba of Benin to ask him to intervene and appeal to political actors to allow a peaceful election.”
According to him, “The respected Monarch promised to invite them to his palace for interaction and he has already done so. Plans have also been concluded for all the 14 political parties participating in the election to sign a Peace Accord in
T
okunbo Abiru, immediate past group managing director of Polaris Bank, yesterday promised that he would focus on the actualisation of special status for Lagos State when eventually elected senator representing Lagos East senatorial district on October 31. Abiru, a former Commissioner for Finance in Lagos State, also pledged that he would prioritise the completion of Lagos-Ibadan expressway and the reconstruction of Ikorodu-Sagamu road and Ikorodu-Epe-Ijebu-Ode highway when he assumes offices in November. The former bank chief made these pledges when the Chairman of All Progressives Congress (APC), Lagos State, Babatunde Balogun unveiled him as its flag-bearer for Lagos East senatorial by-election scheduled to hold on October 31. Among other party leaders, Balogun officially unveiled Abiru alongside Obafemi Saheed, the party flag-bearer for Kosofe II state constituency bye-election at the APC Secretariat, Acme, Ogba, Lagos State. After the presentation of the party flags, Abiru promised to join forces with the Speaker, House of Representatives, Hon. Femi Gbajabiamila; Senator Oluremi Tinubu and Senator Olamilekan Adeola, among others, to further efforts to secure a special status for Lagos State. Abiru said he would also pursue
as out of the 14 activities listed in the timetable that was released in February, 12 have been carried out, with only two - deadline and election proper left. “All the logistics needed for the election have been taken care of.
R-L: Babatunde Balogun, chairman, All Progressives Congress (APC), Lagos State; Tokunbo Abiru, APC Senatorial candidate and former GMD/CEO, Polaris Bank Limited; Feyisitan Abiru, his wife, and Lanre Ogunyemi, secretary, Lagos APC, during Abiru’s unveiling as the APC candidate for Lagos East senatorial by-election at the party’s secretariat, Acme, Lagos… yesterday.
Iniobong Iwok
and support initiatives and policies that would better the lot of the people of the state and Nigerians in general if elected. “I will be a senator of the Federal Republic of Nigeria with resolute focus on the welfare of Lagos East, Lagosians and Nigerians at large I will use the position of senator and my energy and resources to further their well-being, welfare, prosperity, empowerment and security. “In my role as a senator, my legislative activities will be anchored on two overriding considerations, one of which is to join hands with colleagues in the National Assembly from Lagos to further efforts to secure a special status for the state in view of its status as the financial, industrial, media and entertainment capital of Nigeria,” he noted. Abiru acknowledged the pressure on the infrastructure of Lagos State due to federal establishments like seaports, airports and military installations, and the mass rate of migration from other states into the state. On this note, Abiru said: “I will contribute towards improving national economic performance including, especially national revenue generation, industrialisation, infrastructure development, financial deepening and inclusion, employment generation and poverty reduction. “I intend to pay attention to execution of projects and initiatives which will have significant impact on the Lagos East Senatorial district and Lagos in general.” www.businessday.ng
The non-sensitive materials have been delivered to the 18 local government areas of the state. Our Electoral Officers, their Assistants and Supervisory Presiding Officers have been trained. “Officers nominated by the various security agencies under the Inter-Agency Consultative Committee on Election Security (ICCES) have also been trained and their actions will be guided by the Code of Conduct and Rules of Engagement for Security Personnel on Electoral Duty.” “To that extent, regardless of the not-so-pleasant experiences Journalists might have experienced with security agents during elections in the past, they are rest assured of a good experience this time round”, he added. In his remarks, Lanre Arogundade, executive director of International Press Centre (IPC), stated that the main duty of journalists during elections is to relay the information that citizens will require to make informed choices. According to him: “It is a duty we must not abdicate but which we have to undertake with the utmost sense of professional responsibility so as to set the appropriate pubic interest agenda as far as elections in Edo and Ondo states are concerned.”
Lagos East: Adebowale emerges ADP candidate
Abiru lists Lagos special status, Ikorodu-Sagamu road as top agenda Iniobong Iwok
the coming days. With all these efforts, it is our hope that the election will be held peacefully”. He stressed that INEC is ready for the election and is determined to conduct the exercise despite the current difficult circumstance
A
debowale Johnson has emerged the candidate of the Action Democratic Party (ADP) for the October 31 Lagos East senatorial byelection. Adebowale, a native of Ikorodu Lagos, was unanimously adopted with a voice vote, being the sole aspirant on the party’s platform, by over 100 delegates, from across the five Local government areas of the Senatorial district. The event was witnessed by officials of the Independent National Electoral Commission (INEC), the candidate’s supporters, well-wishers, members across the five LGAs, other LGs, state working committee
of the party led by Nasir Adewale Bolaji and National Publicity Secretary, Adelaja Adeoye. Recall that the seat became vacant as a result of the death of Senator Bayo Oshinowo, popularly known as Pepperito, who died as a result of Covid-19 complications. His party, the ruling All Progressives Congress (APC), has elected a former CEO of Polaris Bank, Tokunbo Abiru at its primary election held last Thursday, as candidate for the by-election. Speaking with newsmen, Adelaja Adeoye, national publicity secretary of ADP, who was the chairman electoral committee for the election, who conducted the election, noted that Adebowale has bright chances of winning the election.
He also said that ADP was not afraid to face the two other parties and their candidates- Abiru for APC, and Babatunde Gbadamosi for the People’s Democratic Party (PDP). It stressed that the seamless way in which the party’s primary was conducted showed that ADP was a truly democratic party. Some delegates from Kosofe, Ibeju-Lekki, Epe, Ikorodu and Shomolu expressed dissatisfaction over the slow pace of development in their senatorial district, lamenting that all the previous senators and other elected leaders have not served them well. They further expressed disappointment over the state of education, transportation and others in the areas.
Ondo 2020: Home-grown group to organise governorship debate for candidates KORETIMI AKINTUNDE, Akure
A
s the October 10 gubernatorial election in Ondo state draws closer, a coalition of civil society organisations, media, labour, professional bodies, and religious bodies on Monday said it had concluded arrangements to organise a debate for governorship candidates in the forthcoming election in the state. Speaking at a press conference at the NUJ Press Centre, Alagbaka Akure, Gbenga Abimbola said the purpose of the debate was creating a credible platform for an effective interface between candidates and
https://www.facebook.com/businessdayng
the people in the first instance, and among the candidates themselves. According to Abimbola, “The event, which will hold on 29th of September and 4th of October, will be broadcast live on Radio and Television stations based in the state as well as on digital platforms. “There is no gainsaying the fact that public debates among candidates seeking elective positions have become a norm in advanced democracies and is gradually being embraced in Nigeria, though a relatively new idea.” According to him, “The goal of election debate is to promote political tolerance, constructive @Businessdayng
dialogue and selfless service to the people. Election debate provides a neutral platform where candidates of political parties are grilled by independent moderators on critical issues to enable the audience compare the candidates’ positions on such issues. “As a matter of fact, debates are often the only time during a campaign when candidates are together at the same time in the same place. Debates also seek to fill the gap created by the one-way communication model that characterises campaigns whereby politicians only talk at the people without allowing people to ask questions.”
leaderSHIP
BUSINESS DAY Tuesday 08 September 2020 www.businessday.ng
Buhari lists achievements at retreat, says reforms painful but good for economy
I
t gives me great pleasure to welcome you all to the First Year Ministerial Performance Review Retreat. We are meeting a time that mankind is struggling to overcome the economic and social crisis caused by the COVID-19 pandemic, which has disrupted life as we knew it. The consequences of the pandemic will no doubt influence our deliberations at this gathering, especially as we will have to adjust our policy approaches and methods of working going forward. 2. I stressed at last year’s Retreat that the Nigerian people expect dedication and commitment by all of us in implementing policies, programmes and projects to improve the quality of their lives and to set Nigeria on the path of prosperity. I also reiterated the resolve of this Administration to set the stage for lifting 100 million Nigerians out of poverty in the next 10 years. Even today, these remain our overriding objectives. 3. The priorities we set for ourselves were around nine inter-related and inter-connected areas, which are: stabilizing the economy; achieving agriculture and food security; attaining energy sufficiency in power and petroleum products; improving transportation and other infrastructure; driving industrialization with a special focus on SMEs; expanding access to quality education, affordable healthcare and productivity of Nigerians; enhancing social inclusion by scaling up social investments; as well as building a system to fight corruption, improve governance and strengthen national security. 4. In the course of the past year, Ministers have rendered reports to the Federal Executive Council on their activities and outputs related to the achievement of these objectives. Some of the notable achievements include: i. Economic recovery prior to the outbreak of COVID-19. The economy recovered from a recession and we witnessed eleven quarters of consecutive GDP growth since exiting recession. The GDP grew from 0.8% in 2017 to 2.2% in 2019, but declined in the first quarter of 2020, as a result of the downward trend in global economic activities caused by the COVID-19 pandemic. ii. Implementation of a Willing Buyer, Willing Seller Policy for the power sector, has opened up opportunities for increased delivery of electricity to homes and industries. We are also executing some critical projects
President Muhammadu Buhari
through the Transmission Rehabilitation and Expansion Programme, which will result in the transmission and distribution of a total of 11,000 Megawatts by 2023. iii. On transportation, we are growing the stock and quality of our road, rail, air and water transport infrastructure. The Presidential Infrastructure Development Fund projects are also progressing very well. These include the 11.9 km Second Niger Bridge, 120 km Lagos-Ibadan Expressway, and 375 km Abuja – Kaduna – Zaria – Kano Expressway. At the same time, we are actively extending and upgrading our railway networks, as well as our airports which are being raised to international standard with the provision of necessary equipment, to guarantee world class safety standard. iv. The Government has continued to support the Agricultural sector, the key to diversification of our economy, through schemes such as the CBN Anchor Borrowers Programme and the Presidential Fertilizer Initiative programme. v. The work of the Presidential Enabling Business Environment Council (PEBEC) has resulted in Nigeria moving up 39 places on the World Bank’s ‘Ease of Doing Business’ ranking since 2015 and Nigeria is now rated as one of the top ten reforming countries. We are confident that the on-going ease of doing business reforms would result in further improvement of this rating. vi. Nigeria’s Law Enforcement Agencies have significantly scaled up their footprint across the country. As part of the efforts towards strengthening our internal security architecture, the Ministry of Police Affairs was created. Amongst others, we have increased investments in arms, weapons and other neces-
sary equipment, expanded the National Command and Control Centre to nineteen States of the Federation, and established a Nigerian Police Trust Fund, which will significantly improve funding for the Nigeria Police Force. We have also approved the sum of N13.3 billion for the take-off of the Community Policing initiative across the country, as part of measures adopted to consolidate efforts aimed at boosting security nationwide . vii. Efforts are also being made to empower the youth and other vulnerable groups by enhancing investments in our Social Investment Programmes. 5. These accomplishments are a testament to the fact that all hands are on deck in establishing a solid foundation for even greater successes in future. 6. Distinguished participants, when we met one year ago, little did we know that the world would be in a serious economic, social and health crisis that had left even the major economies in disarray, due to the COVID-19 pandemic. Just as in other jurisdictions, the socio-economic landscape of Nigeria has experienced a severe shock. Nearly 55,000 of our people have been infected with the virus while we have recorded 1,054 deaths by 4th September. The economy contracted by -6.1 per cent in the second quarter of this year; normal schooling has been disrupted; businesses are struggling and in certain instances completely closed; many people have lost their jobs and earning a living has been difficult. It has been a trying time for all of us and particularly for those in the informal sector who make their living from daily earnings. 7. It has not been any easier for Governments, Federal and State alike. As a result of the poor fortunes of the oil sector, our
revenues and foreign exchange earnings have fallen drastically. Our revenues have fallen by almost 60%. Yet we have had to sustain expenditures, especially on salaries and capital projects. We acted to mitigate the effect of the economic slowdown by adopting an Economic Sustainability Plan but we have also had to take some difficult decisions to stop unsustainable practices that were weighing the economy down. 8. The N2.3 Trillion Economic Sustainability Plan (ESP), consists of fiscal, monetary and sectoral measures to enhance local production, support businesses, retain and create jobs and provide succour to Nigerians, especially the most vulnerable. In addition to improving the health sector, the ESP lays emphasis on labour-intensive interventions in agriculture, light manufacturing, housing, and facilities management. It also complements on-going major infrastructural projects in power, road and rail by prioritising the building of rural roads, information and telecommunications technologies as well as providing solar power to homes which were not hitherto connected to the National Grid. 9. Alongside interventions in these critical areas, including agriculture and food security, affordable housing, technology, health, and providing jobs for youths and women post-COVID; the ESP will also provide different avenues whereby Government will support micro, small and medium enterprises (MSMEs) to enable them respond to the economic challenges of COVID-19. This includes safeguarding about 300,000 jobs in 100,000 MSMEs by guaranteeing off-take of priority products; and Survival Fund to support vulnerable SMEs in designated vulnerable sectors in meeting their payroll obligations and safeguarding jobs from the shock of COVID-19. 10. Under the ESP MSMEs component, both the Survival Fund (Payroll support), and the Guaranteed Off-take Scheme, GoS, are to impact about 1.7 million individuals within a three to five months timeline. Also, 45 per cent of total business beneficiaries will be female owned; and 5 per cent of total business beneficiaries will be dedicated to special needs business owners. 11. In addition, under the Survival Fund (payroll support) scheme; 250,000 new business names are to be registered at a discounted rate of N6,000 by the CAC, but this will be free for the MSMEs; while 330,000 transport
workers and artisans will get one-time grants. 12. Following an MOU to be signed by BOI and the FG, the total beneficiaries for Survival Fund Scheme tracks are about 33,000 beneficiaries per State; with a minimum payroll support at N30,000 and maximum support is N50,000. 13. The COVID-19 pandemic, has led to a severe downturn in the funds available to finance our budget and has severely hampered our capacity to ..one of the steps we took at the beginning of the crisis in March when oil prices collapsed at the height of the global lockdown, was the deregulation of the price of premium motor spirit (PMS) such that the benefit of lower prices at that time was passed to consumers. This was welcome by all and sundry. The effect of deregulation though is that PMS prices will change with changes in global oil prices. This means quite regrettably that as oil prices recover we would see some increases in PMS prices. This is what has happened now. When global prices rose, it meant that the price of petrol locally will also go up. 14. There are several negative consequences if Government should even attempt to go back to the business of fixing or subsidizing PMS prices. First of all, it would mean a return to the costly subsidy regime. Today we have 60% less revenues, we just cannot afford the cost. The second danger is the potential return of fuel queues - which has, thankfully, become a thing of the past under this administration. Nigerians no longer have to endure long queues just to buy petrol, often at highly inflated prices. Also, as I hinted earlier, there is no provision for fuel subsidy in the revised 2020 budget, simply because we are not able to afford it, if reasonable provisions must be made for health, education and other social services. We now simply have no choice. Nevertheless, I want to assure our compatriots that Government is extremely mindful of the pains that higher prices mean at this time, and we do not take the sacrifices that all Nigerians have to make for granted. We will continue to seek ways and means of cushioning pains especially for the most vulnerable in our midst. We will also remain alert to our responsibilities to ensure that marketers do not exploit citizens by raising pump price arbitrarily . This is the role that government must now play through the PPRA. This explains why the Continues on page 29
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.