BusinessDay 09 Mar 2020 by BusinessDay

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news you can trust I ** tuesDAY 10 march 2020 I vol. 19, no 516

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See extended coverage on pages 33, A6, A7 & A8

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As global stocks sell off by most since financial crisis CBN urged to allow naira weaken to deal with shock

igeria doesn’t have the buffers it did in 2008 to shrug off an oil-induced global recession, leaving the economy more vulnerable to a fiscal and monetary crisis this time around. “The buffers we have today are nowhere near 2008 which means we are more vulnerable to an economic meltdown that could be worse than 2016’s recession,” said Bismarck Rewane, a leading Nigerian economist and CEO of consulting firm, Financial Derivatives Ltd. “The steps the government

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History on playback as Sanusi deposed, exiled … He was dethroned for insubordination – Kano govt ... Obasanjo: It is sad and good news ZEBULON AGOMUO, INIOBONG IWOK (Lagos) & ADEOLA AJAKAIYE (Kano)

he 14th Emir of Kano, Muhammadu Sanusi II, was on Monday dethroned and exiled by the government of Kano State, the biggest economy in Nigeria’s northern region. It looked like a military coup, though without bloodshed, as Abdullahi Ganduje, governor Continues on page 35

Inside

Nigerian stocks roiled as oil price war plunges market by most in 25 months P. 33 L-R: Godwin Emefiele, governor, Central Bank of Nigeria (CBN); Clement Agba, minister of state for finance, budget and national planning; Zainab Ahmed, minister of finance, budget and national planning, and Timipreye Sylva, minister of state for petroleum resources, briefing State House correspondents on the impact of COVID 19 on Nigerian economy at the Presidential Villa in Abuja, yesterday.

Second coronavirus case was locally transmitted in Ogun – minister P. 34

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COVID-19 marches on: It’s time to act

STRATEGY & POLICY

MA JOHNSON

ost people of the world would not have known a place in China called Wuhan until a deadly coronavirus known as COVID-19 appeared from the city’s wildlife market. Wuhan, the capital of Central China’s Hubei Province of about 11 million people, is the epicentre of the coronavirus. For residents of Wuhan, life has not been easy because of the lockdown by the Chinese government of Xi Jinping. At most, the spread of the virus was slowed by the lockdown imposed in China and other countries’ efforts to identify infected people and anyone they might have been in contact with. As you may be aware, seniors and people with weakened immune systems are at increased risk. There is information out there in the public domain that the best defences include basic precautions like hand washing, staying calm, and protecting medical workers. The disease, according to the World Health Organization (WHO), is different from influenza. It is not Severe Acute Respiratory Syndrome (SARS), neither is it Middle East Respiratory Syndrome (MERS). The spread of the coronavirus is on a global scale. The index case in Nigeria is from an Italian who is in the country on a business trip from Italy. Miraculously, no death has been recorded in Nigeria so far. As days go by, it is becoming very

clear to experts that the epidemic will take a long time to contain. At the time of writing, it is reported by CNN that more than 3000 people are dead with over 92,000 infected cases registered worldwide. Globally, people are concerned and many people want to know the truth behind the outbreak of the virus in Wuhan. At least, only Chinese government will be in the best position to say correctly what went wrong in Wuhan. Analysts believe that someday the truth will be known about the coronavirus. At the appropriate time, the whole world will know the truth about this deadly disease, and the truth will set us free. But one thing is certain, the first whistleblower, Li Wenliang, a doctor who reported a mysterious SARS-like illness paid the price- he died of the coronavirus. Despite controversies trailing the coronavirus outbreak, the novel disease also known as CONVID-19, is spreading rapidly as days go by. The coronavirus has subjected authorities in many countries to stress. Critiques are already judging countries-developing and developed - on how they respond and in what way they treat those infected by the virus. Going by the spread of the coronavirus, many countries including the G7 (seven most industrialized countries) are already embarrassed by the disease in a tragic way because they were ill prepared for the outbreak. The crisis has become a great strain on China’s political leadership as it has on its medical workers. An official account was reported saying that the coronavirus is “a major test of China’s system and capacity for governance.” This may sound like a grim assessment, but many foreign policy analysts are of the view that Western democracies may not fare much better than China. In fact, they say “the world is about to wit-

ness the fracturing of the global health policy space and what happens when countries do not work together.” They equally write that the WHO “continues to operate on a budget equivalent to that of a large hospital in the United States, because member states won’t pay up – crippling its ability to truly lead any global fight against new and emerging disease.” The coronavirus outbreak is occurring at a time when most economies are fragile. Since the outbreak of the virus, the price of crude oil in the international market has gone down. The IMF had to downgrade its outlook for global growth this year 2020. Nigeria, an oil- dependent economy may review her 2020 budget over the coronavirus. The impact of the virus on sports may eventually cause a postponement of the Olympic Games scheduled to take place in Tokyo in 2020. Due to an increasing number of those affected by the virus, Italian schools and colleges have been shut down for 2 weeks. Global travels and tourism have been affected as flights have been suspended to Beijing, Hong Kong, and Shanghai. Most hotel rooms are empty in Wuhan, the centre of the deadly viral outbreak. The outbreak has brought everyday business to a halt and closed down such popular tourist attractions such as Beijing’s former imperial palace, Shanghai Disneyland, Hong Kong Disneyland and the city’s Ocean Park. Unconfirmed sources say that about 8 percent of administrators in Iran has tested positive to the deadly virus while the WHO says there is shortage of medical supplies globally. Reacting to the virus, the Director General, National Agency for Food and Drug Administration and Control (NAFDAC) raised the alarm on drug insecurity in Nigeria in an interview titled “Drug Shortage Imminent if Coronavirus Epidemic Persists,” The

‘

Quote: Although we conquered Ebola in Nigeria a few years ago, one expects health authorities worldwide to deal decisively with the novel coronavirus. It is time to act.

Guardian, February 22, 2020. “Nigeria needs to increase local manufacturing of drugs to avoid drug shortage that reflects drug insecurity. We import about 65-70 percent from South-east Asia countries, mostly from China and India. If an epidemic like coronavirus persists, there could be drug shortage.” Furthermore, the DG acknowledged that: “There have been reports that some medicines are effective to some extent against the virus. A registered drug that was reported to be effective to some extent is chloroquine. The drug is under research for the virus. A caution must be taken because chloroquine, an old antimalarial that was banned from use should not be used for the treatment of malaria because it is no longer effective for malaria.” Although, there is no universally accepted vaccine for the cure of the dreadful virus, China is reported to have recommended an arthritis drug for complications arising from the virus. While a Ghanaian pastor sells coronavirus anointing oil to members of his church. As we wash our hands with soaps and use hand sanitizers, all nations of the world must pull resources together to combat COVID- 19. Although we conquered Ebola in Nigeria a few years ago, one expects health authorities worldwide to deal decisively with the novel coronavirus. It is time to act. The outbreak of COVID-19 has shown us that health is better than wealth. So when citizens say that those in authority at all levels – local, state, and federal - should do more in the provision of healthcare to the people, it is because prevention is better and cheaper than cure. Thank you! Johnson is an author and a retired naval engineer who has passion for African development and good governance

Nigeria’s transportation sector: Increasing productivity through technology and human resources development

ransport and logistics are integral to any society. Their strategic importance cannot be underestimated as products and services must reach their final consumers. The importance of the sector to the overall development of any nation cannot be over emphasized as transport innovation was a catalyst for growth in the 19th century industrial revolution, and innovations in transport and logistics also led the economic and environmental drivers of the technology revolution of the 21st century. Transportation is a key factor in all aspects of national development and its process involves the need to collect, assemble, transfer and distribute goods, services and people from one location to another. Transportation systems globally are experiencing ongoing change and thanks to modern transformative technologies, education and innovation. The innovation of Intelligent Transportation Systems (ITS) is an advanced application that provided swift interconnected services to the different modes of transport. It consists of traffic management which enables users to be safer, more informed, and be more coordinated and smarter. ITS helps cities to function more productively, while improving the lives of citizens: Travel across traditional modes of transport (such as boats, cars, bus, train and air) sees immediate benefits in enhancing traffic safety, creating immediate alerts for dangerous weather, heavy traffic, and unsafe conditions which results in reduction of accidents and loss of lives. The ITS

revolution is currently providing a major positive impact on transport development and the awareness of communication in modern day society. Real-time weather monitoring systems help connect information related to wind speed, visibility and road conditions, rainfall, providing traffic control and information on current driving conditions. It also limits infrastructural damages such as impacts of heavy vehicles burden on roads and its networks especially if they are overloaded. Modern technology such as weightin-motion systems also helps to measure the size, type and weight of vehicles as they travel and transmits the collected data to a central server. ITS also helps in traffic control systems by permitting traffic lights to react to changing traffic patterns, instead of working on a fixed schedule in traffic. Most adaptive traffic light systems use smart intersections that help grant priority to certain vehicles such as public transit and emergency vehicles. Modern economies globally are relying on ITS in disrupting other industries while value adding to their own and it is very important for our nation’s transport sector to follow suit. Innovative technologies such as cloud based services, mobile devices and applications (or Apps), sensors and the internet of things (or IoT), are helping drive augmented reality, autonomous transportation, block chain technology and big data. All these helps in increasing productivity and lending efficiency to modern day transportation systems but also revolutionise the overall value chain of the sector which means the future is increasingly bright for innovation and research www.businessday.ng

in transportation management technology, if we work towards achieving smarter solutions. Many of these are logistical solutions that have the potential to stimulate rapid transformative economic growth, for pairing down flights, reducing wear and tear on vehicles, more timely public transport system and better navigated boats. While using modern technology system to enhance and transform the transportation and logistics sector, it is also very important for us to give priority attention to human resources development by increasing funding for transportation, research and educational institutions offering transportation management technology courses in graduate and post-graduate courses. Nigeria should give priority attention to recognised institutions such as the Federal University of Technology Owerri (FUTO), Federal University of Technology Akure (FUTA) and Federal University of Technology Minna (FUTMINNA), offering transportation courses at the highest level and make it one of the major hubs for research, innovation and development centres in addition to the existing ones to boost the transport sector for competitive advantage. Our transport authorities can also provide platforms for our tertiary institutions to form international partnerships with institutions offering transport related courses, such as Australian Maritime College, Monash University Australia, Malmo University Sweden, Dalhousie University Halifax Canada, Suny Maritime College USA to help improve sharing of knowledge and ideas, innovation, skills and expertise to help develop the sector.

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Festus Okotie The paradigm in transportation policy is shifting to become more dynamic and there is a growing realization that transportation institutions need to broaden their focus beyond academics and focus also on the business, technology and management offerings that will attract more investment to the sector both locally and internationally to stimulate the growth of the economy. Evidence of degeneration and setbacks in the transportation sector of Nigeria has been blamed partially on poor human resource development and infrastructural deficits which are needed to connect the nation and accelerate the movements of goods and services across the country. While GDP from transport in Nigeria increased to $720.241 million in the third quarter of 2019 from $642.927 million in the second quarter of 2019 with a far greater potential, a greater transport network and infrastructure will make the sector more attractive and give rise to more foreign investment opportunities.

Note: the rest of this article continues in the online edition of Business Day @https:// businessday.ng Okotie, a maritime transport specialist, writes via fokotie. bernardhall@gmail.com, Fokotie@bernardhallgroup. com

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Rules of contagion RAFIQ RAJI

hen I woke up to the news in late February of a confirmed case of COVID-19 in Nigeria, quite frankly, I was not surprised. It was inevitable; after cases started emerging in Europe, at least. With the benefit of hindsight, it is probably a good thing that our land borders had been closed a long while before the outbreak reached our shores. The border closure did not make sense economically at the time. But bizarrely and even paradoxically, it has turned out to be a blessing in disguise. I am not really interested in what it is, COVID-19 or coronavirus; such fancy names, they give these viruses. As an individual, the best you can do is what you should ordinarily do in normal times: maintain good hygiene, eat healthy, exercise regularly, and so on. There are additional measures, of course. In figuring these out, I have been doing some reading. Yes, one follows the regular updates by the federal and state governments, World Health Organisation and others. But it is also important to understand what underpins the measures they announce and the advice they give. In Nigeria, based on my own observations, our best shot at dealing with the crisis is finding and isolating whoever is infected before he or she mixes with the general population. This is because even as the majority of Nigerians desire to live clean and healthy lives, the poor circumstances of the majority of us suggest this remains a desire than reality for most. Thus, an outbreak of Chinese or Iranian proportions would almost certainly be devastating. We must not allow that to happen. And it is in our power to do so. How so? The Chinese and Iranians made a couple of mistakes. There is a natural tendency to hide the undesirable for sometimes justifiable reasons

like avoiding a panic, bad press and so on. But there are exceptions. It is widely known that a disease outbreak with the potential to become an epidemic or pandemic, must be quickly contained and communicated. The natural tendency is to hope that a full containment would make the latter needless. Time and time again, this has proven not to be the case. Health epidemics are eventually revealed, no matter how hard a government tries to hide the facts initially. And the very measures, which if taken much earlier, would have prevented a worsening of the situation, tend to be implemented eventually. To find answers and put my observations in context, I read London School of Hygiene & Tropical Medicine associate professor Adam Kucharski’s 2020 book “The Rules of Contagion: Why things spread – and why they stop”. It was one of a couple of books recommended by the Financial Times for readers who might be interested in understanding epidemics – or pandemics if global – as we all grapple with the current one. I found some of Kucharski’s insights to be very instructive and shall share them forthwith. A disease outbreak typically has four main stages: spark, growth, peak and decline. And in some cases, it is a cycle, repeating the four stages continuously until the end. In my view, the individual can take the most effective precautions at the spark and early growth stages. If you do nothing then, there is little else you would be able to do as an individual that would likely really matter. Coercive measures, like quarantines, curfews, school closures, restrictions on public gatherings, and so on tend to be implemented by the authorities at the high growth stage. That is, when it is abundantly clear that an outbreak has reached epidemic proportions. But the individual who has not done the needful, like stocking up (not hoarding) on essentials, etc. would be greatly inconvenienced at this stage. Because at this time, it would take longer to procure these things and you would probably not get everything you seek. Thankfully, our situation in Nigeria has not reached that level yet.

By my reckoning, we are still at the spark stage. And thankfully, a very small spark at that; considering there is only one confirmed case of COVID-19 in Nigeria (at the time of this writing). By about a month from when that case was confirmed, in early April, say, our situation would probably be clearer. That is, we would then know for sure if there is going to be a growth stage, with more cases confirmed, or if as was previously the case for Ebola, we have successfully nipped the outbreak in the bud. Hide But what is the individual to do? In Kucharski’s narration, Andy Haldane, chief economist of the Bank of England identifies two typical responses by the public in past epidemics: flight or hide. The former is irresponsible, of course; and increasingly not feasible even for the well-heeled. Hiding behaviour is more ideal. This entails “dodging situations” that could lead to infection, washing hands, avoiding public gatherings and so on. Put more systematically, “outbreaks need three things to take off: a sufficiently infectious pathogen, plenty of interactions between different people, and enough of the population who are susceptible.” Which one of these three can the individual manage? Social interactions. But are you going to just isolate yourself wherever you are? Certainly not. You could, if you could. But you would still need to go out from time to time. Still, it is generally accepted wisdom that large public gatherings should be avoided. And yes, Friday Muslim prayers and Sunday Christian services qualify as large public gatherings. You do not have to attend that party. A foreign trip can be postponed. An upcoming sports festival in one of the states should probably be postponed. As research finds that children have by far the most social contacts, especially in “intensely social environments” like schools, it may be wise for schools to be closed for a period of two weeks or more. (Kucharski highlights how schools are “potential mixing pot[s] of infection.”) High-capacit y mos ques and churches are intensely social environments as well, and should probably be

‘

By my reckoning, we are still at the spark stage. And thankfully, a very small spark at that; considering there is only one confirmed case of COVID-19 in Nigeria (at the time of this writing)

closed to the public for the same period. Our famed religiosity could be an inhibitor. Telling Nigerian Imams and Pastors to suspend their prayer events for a period, when many are likely to become even more religious, is not likely to sit well with many. This is not surprising. As I recall, at some point during the 2014-16 West African Ebola epidemic, it became increasingly astonishing that Liberia was recording greater success with managing the crisis than neighbouring Sierra Leone. The reason why became obvious soon enough. The large Muslim population in Sierra Leone continued to wash the bodies of their infected dead in the Islamic way, increasing transmission.

As a Muslim, I understand quite well the difficulty in subscribing to the more effective solution of burning the infected bodies instead. While in the end, that is an individual choice, the reason for the different outcomes are glaringly obvious. And for the current outbreak, Iran eventually closed its religious shrines and has stopped Friday prayers for the time being and Saudi Arabia has banned all pilgrimages to Mecca this year. These are sensible moves. Precautionary measures are most effective when things are relatively okay. But naturally, there is a tendency to wait until the risks are writ large. And probably rightly so. Later certainty makes hindsight biting, however. Could the already more than 100,000 COVID-19 cases around the world have been lower had precautionary measures been taken earlier; that is, even as the current global response has been relatively swift? Maybe. Maybe not. And yes, it has probably not come to the point where we need to take such extraordinary measures in Nigeria. And hopefully, there would not be a need to. Still, why take the risk?

“Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

Tapping into trade links for growth How Nigeria will benefit from AfCTA depends on how prepared it is

igeria can grow its way through trade, diversify the economy and generate jobs by strengthening intra-regional and global trade links. Rapid urbanisation, a huge working-age population, large market size, abundance of agricultural and natural resources together with seaports located across the country position the country for reaping the benefits of linking with regional and global value chains. Last year, Nigeria signed the Africa Continental Free Trade Agreement which is expected to boost trade in the continent by 52 percent in 2022.. Global value chains (GVCs) – the import and export of raw materials, parts and components, semi- and finished goods between firms across countries – has evolved over 20 years. Complex production processes for making cars and computers have been broken up into smaller, simpler parts and specialised tasks performed by different countries, easing the way of less developed countries into the global trade. Advances in ICT and transportation

coupled with trade policies and cheap labour have delivered immense benefits to emerging economies in Asia and Europe, integrating them into the global economy. GVCs rapidly expanded global trade, accelerated economic growth and reduced poverty. It has allowed poor countries converge i.e. catch up with richer economies – 1 billion people escaped poverty as a result of labour-intensive trade-led growth in countries like China, Vietnam and Bangladesh. Oildependent Nigeria can learn how to diversify its economy and generate jobs from these countries. Nigeria, like most African countries, however, due to trade barriers, poor infrastructure and logistics has been unable to take part in global or regional value chains. Job creation rates in Nigeria have been too slow to keep up with labour force growth. Between 2010 and 2017, average job growth was 1.6 percent, weaker than labour force growth of 3.9 percent according to PwC, a consultancy. To cut the unemployment rate, it is estimat-

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ed that Nigeria needs to add at least 3 million new jobs annually or 4.5 percent annual job growth rate, which translates to nearly 200 percent rise from the current annual growth rate. Currently, 40 percent of Nigeria’s population is below the age of 14, and about 70 percent are aged below 35. These statistics are significant because around 55 percent of young people in Nigeria aged 15 to 35 are unemployed or underemployed. The global pool of labour is shrinking in developed countries and China; their companies are relocating to attractive destinations with skilled labour, competitive wages and well-equipped and efficient ports. Chinese companies are looking to set up factories elsewhere, in Ethiopia and other East African countries, for example. Nigeria’s first deep sea port, located at the Lekki Free Trade Zone (LFTZ), will make the country the trans-shipment hub of the region. Once completed it will offer factories located within the LFTZ links to region and global markets. For chief executives of manufacturing com-

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panies in Nigeria, poor accessibility/gridlock at the ports and the resulting high demurrage costs as well as poor infrastructure (roads and rail) as their third and fourth biggest challenges, according to the Manufacturers’ Association of Nigeria CEO Confidence Index (MCCI) for the third quarter of 2019. Regulatory reforms improved Nigeria’s position on the Doing Business Rankings in 2019; it moved up 15 places to 131st position. However, starting a business is still a challenge, so too are getting electricity, registering property, paying taxes and trading across borders. The GVC model of the fast is being replaced. New technologies: automation, artificial intelligence (AI) and machine learning (ML) are improving efficiency, boosting productivity and reducing the need for labour. Nigeria must rethink how it can drive growth, reduce poverty and generate millions of jobs from connecting to the GVCs. For example, how to adapt its ports, roads and rail infrastructure as well the skillsets of its young population to meet these changes.

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EDITORIAL Tapping into trade links for growth PUBLISHER/EDITOR-IN-CHIEF

Frank Aigbogun

How Nigeria will benefit from AfCTA depends on how prepared it is

EDITOR Patrick Atuanya

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

developed countries into the global trade. Advances in ICT and transportation coupled with trade policies and cheap labour have delivered immense benefits to emerging economies in Asia and Europe, integrating them into the global economy. GVCs rapidly expanded global trade, accelerated economic growth and reduced poverty. It has allowed poor countries converge i.e. catch up with richer economies – 1 billion people escaped poverty as a result of labour-intensive trade-led growth in countries like China, Vietnam and Bangladesh. Oil-dependent Nigeria can learn how to diversify its economy and generate jobs from these countries. Nigeria, like most African countries, however, due to trade barriers, poor infrastructure and logistics has been unable to take part in global or regional value chains. Job creation rates in Nigeria have been too slow to keep up with labour force growth. Between 2010 and 2017, average job growth was 1.6 percent, weaker than labour force growth of 3.9 percent according to PwC, a consultancy. To cut the unemployment rate,

it is estimated that Nigeria needs to add at least 3 million new jobs annually or 4.5 percent annual job growth rate, which translates to nearly 200 percent rise from the current annual growth rate. Currently, 40 percent of Nigeria’s population is below the age of 14, and about 70 percent are aged below 35. These statistics are significant because around 55 percent of young people in Nigeria aged 15 to 35 are unemployed or underemployed. The global pool of labour is shrinking in developed countries and China; their companies are relocating to attractive destinations with skilled labour, competitive wages and well-equipped and efficient ports. Chinese companies are looking to set up factories elsewhere, in Ethiopia and other East African countries, for example. Nigeria’s first deep sea port, located at the Lekki Free Trade Zone (LFTZ), will make the country the trans-shipment hub of the region. Once completed it will offer factories located within the LFTZ links to region and global markets. For chief executives of manufacturing companies in Nigeria, poor

accessibility/gridlock at the ports and the resulting high demurrage costs as well as poor infrastructure (roads and rail) as their third and fourth biggest challenges, according to the Manufacturers’ Association of Nigeria CEO Confidence Index (MCCI) for the third quarter of 2019. Regulatory reforms improved Nigeria’s position on the Doing Business Rankings in 2019; it moved up 15 places to 131st position. However, starting a business is still a challenge, so too are getting electricity, registering property, paying taxes and trading across borders. The GVC model of the fast is being replaced. New technologies: automation, artificial intelligence (AI) and machine learning (ML) are improving efficiency, boosting productivity and reducing the need for labour. Nigeria must rethink how it can drive growth, reduce poverty and generate millions of jobs from connecting to the GVCs. For example, how to adapt its ports, roads and rail infrastructure as well the skillsets of its young population to meet these changes.

HEAD, HUMAN RESOURCES Adeola Obisesan

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

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Pseudo democrats as albatross to credible local government elections

RILWAN BALOGUN

he quote is a reflection of a British development economist in one of his works titled “the bottom billionaire: why the poorest countries are failing and what can be done about it”. My digestion of this book necessitated my thought and conclusion on one of the major reasons why hard-core development eludes local communities and of course, development still a mirage in many part of Nigeria’s urban settlements. If there is any electioneering exercise that is supposed to be the fairest, untainted and uninfluenced representation of the people’s will, then, nothing can be far from saying that it should be local government elections. As a matter of fact, researches have shown that 95 percent of local government elections held in Nigeria can best be regarded as an exercises that were put up merely to satisfy the constitutional requirement of having elected chairmen, thus, qualifying the whole exercise as a mere formality or charade, and at best could be termed as a process premeditated on the farce of the ruling party in the state takes it all. This undeniable fact and other downgrading phenomena is perhaps what brews an age-long or continued argument as regard the status of local government, whether, in its factual sense, local government can be regarded as a tier of government. In a political parlance, a tier of any government is inherently expected to be independent, at least to some reasonable levels, from undue external influence from other tiers of government. This does not portend that it should exist or function in isolation, rather, paradoxically in complementary subordination to the state government. As a creation of the constitution, section 7(1) of Nigeria’s 1999 constitution guarantees a system of local government

by democratically elected councils. Going by the ipsi sima of the provision of the constitution, the provision clearly states that the system of local government by democratically elected local government council is under this constitution guaranteed, and accordingly, the government of every state shall, subject to section 8 of this constitution, ensure their existence under a law which provides for the establishment, structure, composition, finance of such councils. The theme of this piece is not focused on whether local government is ipso facto or ipso jure a government or centred on analyzing the propriety or otherwise of using appointed officers in running the governmental affairs of local governments instead of elected officers, rather it is factual exposition and analysis of the pseudo-democratic dispositions of all political actors in Nigeria, in particular the state governor masquerading as democrats. The pertinent question that needs be asked firstly, is that how could a government which came into power by a small percentage of margin votes above the simple majority, on which basis the INEC declared him a winner, would in a twinkling of an eye, perhaps few years, claim victory in all the local governments of such state? This is even more complicated, where in the obvious reality of his underperformance, and botched electoral promises, where it is very glaring in all ramifications that his performance, since the inception of his administration is nothing to write home. Put poignantly, a democratically elected governor that secured victory with a slim simple majority; that is one-third of votes cast in two-third of local governments in his state, would conduct an election into the offices of the chairmen in same state, under same political party that brought him into power and such party would garner all or almost all the votes in that elections! I could sense the weird thought racking the brain of every reader

of this piece, that in some possibilities, electorates have the proclivity to consider and vote candidates and not political party. But then, could it be reasonably justified that the whole candidates, subsequently fielded by the ruling party have grassroots acceptance from the majority of the electorates in the state? Or at best, it could be said that they all rode through the political popularity, rigging tactics of the ruling party in the state, to the extent that even in areas where it is crystal clear that the opposition holds sway or has an overwhelming majority? Among other compounding questions, one may further probe, inquisitively, is why are Nigerian states’ governors, particularly, always fake to be democrats? Can a true democrat be someone who does not allow the will of the majority to prevail? Charity undeniably begins at home, so goes an age-long saying. This sequence to the fact that, can a person who is undemocratic in running the affairs within his political party and state feign to be democratic when he finds himself at the helms of affairs at the national politics? Being a democrat, I strongly believe, should be from within and not from without. The simple reality of the status of local government elections in Nigeria is that it is just a jamboree exercise that is put up as farce to the constitutional requirement of electing local government chairmen through a democratic process of electioneering. For the purpose of precision, I will at this injunction cite some states as examples of where local government elections were held, just like every other elections, as a charade and business as usual of the winner takes it all. In the local government elections held on July 22, 2017 in all the 20 local governments and the 37 Local Council Development Areas in Lagos state, the ruling party in the state, APC, held sway with an overwhelming votes, sweeping all the local governments and local council’s elections. Whilst in the governorship elections held on April 11, 2015, it had the APC winning in 15 local governments out

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Elections determine who is in power, but they do not determine how power is used

of the 20 LGs in the state. In delta state also, the gubernatorial contest between Dr. Emmanuel Uduaghan of the people Democratic Party (PDP) and Chief Great Ogboru of the Democratic People’s party (DPP) in 2011, had the former win 14 Local governments while the latter won in 11 local governments. In a twist of event, in the local government elections held on Saturday, October 2014, the PDP who managed to scale through the constitutional simple majority cleared 23 out of the 25 LG elections held on October 25, 2014 in the state. On the same level, the September 28, 2016 gubernatorial election held in Edo had an overwhelming victory for the APC gubernatorial candidate, Godwin Obaseki who won in 13 out of the 18 local government in Edo state. However, despite the fact that the margins led by the victorious APC in some LGs in that guber elections were slim, and the lackluster performance of governor Obaseki for almost 18 months in power, the march 3, 2018 LGs elections had the APC held sway as APC was declared winners in all the 18 local government in the state. The local government elections held on April, 2019 had APC candidates declared winners in all the 14 local government and councillorship seats in Zamfara state. This was an election conducted under the tenure of former governor AbdulAziz Yari. I am doubly sure that had the elections to the chairmanship and councillorship seats be held under Governor Bello Mattawalle of the PDP, who was later declared winner by judicial fate, the whole seats would have been garnered by the ruling PDP. I have gone to cite these sizeable examples, with many more still handy as convincing nuggets to the focal point of this piece, this is done all in a bid to drive home my point that local government election in Nigeria a sham, charade, and nothing but exercise by political actors or state generalissimos, who are far from being regarded as democrats but masquerading as ones.

Safer payment solutions will drive adoption of prepayment for ecommerce transactions

ince the debut of ecommerce in Nigeria, a great number of consumers have always preferred paying for their products upon delivery, due to doubt on the quality of the product that the merchants might deliver. The American Express Digital Payments Survey (2017) showed that 73 percent of consumers have made three or more online purchases in the 12 months prior to June 2017. However, 27 percent said they have abandoned an online purchase due to security concerns around their credit cards. Hence, they opted for safer payment options. Despite the mixed feelings in the use of online payment as noted in the foregoing, there is a positive aspect after all. Another survey of online shoppers showed that nearly half of the online shoppers, about 47 percent of them said they have increased the frequency of their online purchases over the last year. According to 71 percent of merchants in the survey, the proportion of their annual sales generated through online and mobile channels increased over the previous year. In Nigeria, JumiaPay is at the forefront of driving transactions on leading ecommerce platform, Jumia. The adoption of the payment platform is fast on the rise. An increasing number of Jumia consumers are making the shift from payment on delivery to prepayment through JumiaPay. Their preferences for choosing the payment platform differ. For instance, Mrs Blessing Atibioke’s preference for JumiaPay as a payment method on Jumia is hinged on the fact that refunds of payment via JumiaPay are faster than other payment methods, without the hassle of calling the Customer Care team for help.

In essence, she prefers prepayment through JumiaPay because of its operational efficiency. For Alex Fanika, his preference for prepayment through JumiaPay is hinged on its costsaving benefits. Alex, who shops on Jumia One in bulk and resells to his customers, prefers to pay through JumiaPay because of the 5 percent discount he gets on each purchase. For a fledgling entrepreneur that he is, every discount he gets saves him a lot of money, which he can re-invest into his business. Although, early predictions for the instant move to cashless society proved rash, however cash payments are beginning to dwindle. According to a report by the Federal Reserve Payments Study, non cash payments increased at an annual rate of 5.3 percent (3.4 percent in value). Debit, credit and ACH payments grew while check payments fell during this time period. It is worthy of note that apart from these statistics, a greater number of people who will be shopping online is projected to skyrocket than the previous years. Statista, projected that in 2021, there will be 2.1 billion digital buyers worldwide, up from 1.66 billion in 2016. This means while some may be scared, others are very willing to use the online payment system. The more popular online commerce is, the more trust that people are likely to put into this type of service. By 2026, it is projected that mobile payments will have passed the 50 percent milestone, becoming mainstream in most markets. According to the Ovum’s report, business owners must adjust their e-commerce marketing strategies to this new reality because experts have predicted that as payments generally evolve slowly, mobile devices will take the lead. Meanwhile, service

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development and adoption will speed up, and ultimately reduce the use of physical credit cards with a great potential to radically reduce cash payments. Another determining factor for online payment would be the growing and bustling youth population across the world. This upwardly mobile class of the population is grappling with technology by the day and are willing to explore every opportunity they can grab. They are referred to as the millennials and the generation Z-ers. Regarding the millennials, a research by Visenze stated that over 60 percent of millennials and generation Z-ers are likely to complete transactions on their mobile devices. The report also stated that about 80 percent of the youths prefer to learn about new products on a phone. The future, in that sense, is probably almost entirely mobile-first, as new generations are likely to put more trust into e-Commerce on this medium. Across the globe, the future is tilting towards cashless policies. A common measure of how close to a “cashless society” a country is becoming is some measure of the number of cashless payments or person-to-person transactions are done in that country. Although trust and security are still major factors considered by the consumers, these fears have been quelled most likely due to the consistent improvement on the features of the online payment platforms. More so, some experts are also concerned about the capacity of the service providers to meet the demands of online shoppers due to the almost seamless form of transaction by consumers. Interestingly, experiences from some Scandi-

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OLUKAYODE KOLAWOLE navian countries provide greater hope for online prepayment. In countries like Denmark, Norway and Sweden, the transactions across the country are over 50 percent cashless. According to Nayax, Swedes have taken to cashless payment wholeheartedly. If you visit Sweden, be sure to take your credit card or mobile phone with you. Only 15 percent of payments involve cash transactions, and it is rare that a person will be limited to paying with cash. A popular mobile payment app, Swish, used by half of the country’s 10 million population, enables payment transfers to people and businesses. Sometimes, it is difficult to use cash in Sweden. For instance, drivers of Swedish buses no longer accept coins or banknotes. The pervasive use of debit and credit cards by Swedes has led many stores to no longer accept cash. Their motivation for this development according to the Swedes are speedier service and creating a safer environment because some of the store owners believe that the removal of cash lowers the risk of robberies. With these, the future of online shopping apparently looks bright.

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Tuesday 10 March 2020

BUSINESS DAY

COMPANIES & MARKETS

Company news analysis insight

AGRICULTURE

Odu’a Group expands investment in agribusiness to surpass N1.208bn dividends RAZAQ AYINLA, Abeokuta

L-R: Wunmi Williams, chief executive officer, Nakenohs Boulevard; Kofo Akinkugbe, special guest/founder, Secure ID, and Familusi Babajide, executive director Africa, Under40CEOS, at the Under40CEOS International Women’s Day Meet up in Ikoyi, Lagos.

BANKING

Access Bank grows fourth quarter profit by 2.7% OLUFIKAYO OWOEYE

igeria’s biggest bank by customer base, Access Bank’s gross earnings for full year 2019 ended 31st December, grew 26.1percent to N666.8billion from N528.7billion in full year 2018. Profit before tax grew by 11.8percent to N115.4bn. Profit after

tax grew by 2.7percent to N97.5bn. Net Assets also grew by 24.4percent to N610.2bn from N490.5bn. Loans and Advances to customers surged to N328.6billion in 2019 from N259.8billion in 2018. Income from fees and commission grew to N91.84billion from N62.09billion. Income from channels and other E- business ballooned t o N 3 6 . 0 4 b i l l i o n f ro m

N14.16billion. Channels and other E-business income include income from electronic channels, card products and related services. Access Bank concluded a merger deal with Diamond Bank during the year under review saw operating expenses surged to N159.09 billion from N116.94billion. Expenses incurred from the merger deal stood at N6.58billion.

The management announced a proposed final dividend of N0.40k bringing the total dividend for year 2019 at N0.65 per share. The Central Bank of Nigeria during the year under review raised banks’ loan to deposit ratio to 65 percent and according to the apex bank this became imperative to revive the tepid growth in real sector of the economy.

L-R: Richard Okeowo, chairman, FAE Envelopes Nig Ltd; Lukman Adams, overall best distributor; Funlayo Okeowo, MD/CEO, FAE Envelopes Nig Ltd, and Adeleke Adeleye, chief operating officer, at the annual FAE Envelopes distributors’ conference in Lagos. www.businessday.ng

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riven by the mission to surpass the profit threshold of N1.2 billion recorded in the last five years of managerial control of Odu’a Investment Company Limited, Adewale Raji, Group Managing Director of Odu’a Group has declared the Group’s intention to expand its investment in Agribusiness, focusing more on agricultural production and processing to earn more money and pay share more dividends among owner states - six Southwest states, namely, Ogun, Oyo, Ondo, Ondo, Ekiti and Lagos states. It will be recalled that Adewale Raji, Group Managing Director of Odu’a Group had in the last five years of his first tenure, shared N1.208 billion for owner states as dividends and had also pledged to surpass the N1.2 billion thresholds in the next five years of second and final tenure, restructuring the inherited farm plantations across the Southwest states and investing more in tomato and cassava for production and processing of raw tomatoes into tomato paste as well as processing of cassava into industrial starch and high quality cassava flour for bread production and confectioneries. Speaking during a courtesy visit to Governor Dapo Abiodun of Ogun state in Abeokuta on Friday, Adewale Raji, Chief Executive Officer of Odu’a Group noted that the Company has a clear mandate from is shareholders to be the engine room for the economic development of the Southwest, adding that the visit to Governor Abiodun was to inform the governor of the Company’s present activities in the area of agriculture at the Group’s farm planantions such as Tomato Plantation at Imeko-Afon local government area and Agro Park Plantation at Ayetoro in Egba North local government area of Ogun state. He said, “Odu’a Investment has a clear mandate from shareholders to be the engine room for economic development of the Southwest. In our discussion with the governor, we did update him about various steps being taking, particularly in agriculture and what we are trying to do across the Southwest, including what we are currently doing at our farm location in Imeko, Ogun state, where @Businessdayng

a tomato project is ongoing. We intend to extend cassava cultivation to industrial starch and high quality industrial flour very soon.” Raji added that the company identifies with the different programmes of the Ogun state government as it relates to creating jobs for its teeming youths and empowering them through the different initiatives, like connecting demand to supply, just as he lauded the State agricultural programme, where youths are empowered with land and inputs, assuring that Odu’a Group would continue to work on the platform of public private partnership to take the economy of the state and the Southwest, to the next level. Raji also noted that Odu’a Investment Company Limited has the support of its shareholders in its quest to ensure that a new Company that would be able to access the Central Bank of Nigeria (CBN) interventions as well as funds from the multilateral and development finance institutions is created to be able to really expand the investment scope of Odu’a Group of Companies in such a way that more investments are created for sustainability and profitability as “the Group does not want to have funds constraints at any point in time.” Responding on behalf of Ogun state government, Adeola Odedina, Commissioner for Agriculture, challenged Odu’a Group of Companies to adopt more robust strategies that would enable the Company break even and stay competitive in the Country’s business environment with a view to improving the economies of the owner states, saying the investment arm of Southwest states must not only create wealth for shareholders, but must also create employment opportunities for the jobless youths in the region. Odedina noted that the Southwest region has the required manpower capable of returning the Company back to the era when it made lot of profits and compete favourably with its peers in all spheres of business and commercial ventures, but pleaded with the staff to look at ways of breaking new grounds and not to allow the legacies of the late sage, Chief Obafemi Awolowo, go down the drain, adding that doing so would mean that the present generation would have nothing to bequeath the next generation.

Tuesday 10 March 2020

BUSINESS DAY

COMPANIES&MARKETS

Business Event

OIL & GAS

Aramco shares fall below IPO price for first time since listing OLUFIKAYO OWOEYE

hares of Saudi Arabian state oil giant Aramco plummeted on Sunday, after the state oil giant announced it would reduce the price it charges customers for its oil. Aramco’s price tanked as much as 9percent on Sunday trading in Riyadh, dropping below 30 riyals. That takes the stock below the 32 riyals per share level that the company was listed at less than three months ago. In a notice to buyers sent

Saturday, Aramco said it was cutting most prices by $6 to $8 a barrel. The move comes after a longstanding partnership between some of the world’s largest oil producers, including Saudi Arabia and Russia, severed on Friday. The sides had failed to reach an agreement on production cuts to support the price of oil in the face of the coronavirus-related economic slowdown. The fall in Aramco’s shares marks a major blow for the kingdom, which sold a 1.5percent stake in the company in December in the world’s largest initial

public offer. It was billed as a test of Crown Prince Mohammed bin Salman’s global standing and a fresh source of funding for his economic reforms. The price of oil has been volatile in recent weeks as worries about the coronavirus outbreak and its impact on global growth have roiled markets, more broadly. “A irlines are cutting back on flights, travel is going right down, traffic is going down, factories are closing. “The demand for energy is falling and is going to fall further,” analyst said.

L-R: Khadijat Sadiq, HoD, aviation medical clinic, MMA; Charles Aroguma, head of safety, Bi-Courtney Aviation Ltd; Olatokunbo Arewa, international airport terminal manager, MMA; Captain Mukherjee, chief operations officer; Abraham Benson, marketing manager of Daraju Industries Ltd, and Grace Okolie, head, marketing, Bi-Courtney Aviation during the donation of FRESSIA hand sanitizers, hand wash, facial wipes, and medical soaps to FAAN for prevention of the spread of the coronavirus.

ENERGY

Saudi Arabia slashes April crude oil prices after OPEC’s supply pact collapsed

audi Arabia slashed its official selling price (OSP) for April for all its crude grades to all destinations, after OPEC’s oil supply cut pact with Russia fell apart on Friday, sending oil into a tailspin. State oil giant Saudi Aramco has set its Arab light crude oil to Asia for April at a discount of $3.10 to the Oman/Dubai average, down $6 a barrel from March, the company said in a statement late on Saturday.

It cut the April OSP of its Arab light crude oil to the United States to a discount of $3.75 per barrel versus ASCI, down $7 a barrel from March. Aramco lowered its OSP for Arab light crude oil to Northwestern Europe to a discount of $10.25 per barrel to Ice Brent, down $8 a barrel. A three-year pact between OPEC and Russia ended in acrimony on Friday after Moscow refused to support deeper

oil cuts to cope with the outbreak of coronavirus and OPEC responded by removing all limits on its own production. Oil prices plunged 10% as the development revived fears of a 2014 price crash, when Saudi Arabia and Russia fought for market share with U.S. shale oil producers, which have never participated in output-limiting pacts. Saudi Arabia is OPEC’s defacto leader and the world’s biggest oil exporter.

L-R: Biodun Adefila, chief operating officer, SO&U; Udeme Ufot, group managing director, SO&U/winner industry recognition lifetime award; Mojisola Saka, chief operating officer, Soulcomms Ltd, and Abiola Williams, chief operating officer, Lucid Audio Visuals, at the Inaugural Industry Evening with Goddie Ofose in Lagos.

Banking

Access Bank makes top 500 global valuable banking brands HOPE MOSES-ASHIKE

igeria’s largest retail Bank, Access Bank Plc., has been named as one of the top 500 global banking brands, according to leading business valuation and strategy consultancy, Brand Finance. Access Bank has demonstrated growth since it was last ranked as the fifth most valuable Nigerian bank in the 2017 Banking 500 report. The Bank now ranks second with a valuation of $242 million. The Bank’s valuation comes on the back of its successful merger with Diamond Bank in April 2019, and its recent expansion into the East African market. The nine-months post-merger financial results

posted by the Bank showed gross earnings of N513 billion, an increase of 37 percent above the N375.2 billion recorded within the same time frame in 2018. Further analysis of the results showed the Bank’s asset base remained strong and diversified, growing by 33 percent to N6.6 trillion as at September 2019, up from N4.95 trillion as of December 31, 2018. The Herbert Wigwe, group managing director, Access Bank Plc., talking about the Bank’s growth trajectory, said, “In the last twelve months, Access Bank has grown into a powerhouse in the Nigerian and indeed, African banking industry. We are happy with all the successes recorded so far, and we hope to reach and surpass www.businessday.ng

other targets we have set for ourselves. Access Bank will continue on its journey to becoming Africa’s gateway to the world, through strategic expansion into new and emerging markets within and outside Africa and providing best in-class customer experience.” He went further to urge investors and other stakeholders to keep their faith in the Bank, reassuring that the Bank will stay true to its values of ethical and sustainable banking practices. “Access Bank will continue to innovate and remain profitable while offering value to all investors and stakeholders. As we strive to expand our business operations, we will remain true to our core values of sustainable banking and adherence to global best practices,” Wigwe concluded.

L-R: Israel Kristilere, senior pastor, Sheperd Hill Baptist Church; Titus Eyitayo celebrant›s spouse, Comfort Eyitayo, 1st deputy vice president, ICAN; Nnamdi Okwuadigbo, ICAN, president, and Emmanuel Ijewere former ICAN, president, at the 65th birthday celebration of Eyitayo in Lagos.

L-R: Lateef Olusesi, manager, Fit Nigeria; Gbenga George, brand activation manager, FrieslandCampina WAMCO; Abimbola Craig, Celebrity Guest; Seyi Olusore (a.k.a Shedams), fitness instructor and Boboye Taiwo, operations attendant, Upbeat Management, during the ongoing Three Crowns fitness challenge in Lagos.

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Tuesday 10 March 2020

BUSINESS DAY

Media business Advertising practitioners, government officials tasked to consciously tell Nigeria’s positives stories … To expand Nigeria’s reputation index globally Daniel Obi

igeria is struggling with image problems due to various factors including its historical inability to consistently project its positives. In absence of this, the negatives sometimes unconsciously promoted by the local and international media have dominated the scene which the young Nigerians have grown to, not only accepted as norm but magnified. For the country to therefore gradually and steadily wriggle out of this poor reputation index, Lanre Adisa, a top Nigerian advertising practitioner who is Chief Commercial Officer of Noah’s Ark challenged communication professionals, governments and all stakeholders in brand to make conscious, deliberate and organised efforts to tell the many positive stories of the country.

L-R: Lanre Adisa, CEO, Noah’s Ark/guest speaker; Lolu Akinwunmi, GMD, Prima Garnet Africa; Goddie Ofose, convener; Nn’Emeka Maduegbuna, chairman/CEO, C&F Porter Novelli, and Charles O’Tudor, GMD, Adstrat Communication, at the inaugural of an industry evening with Goddie Ofose summit in Lagos.

In the past, there were image management efforts by Ministry of Information such as ‘Nigeria: Good People, Great Nation’, ‘Heart of Africa Project’ and ‘Change Begins with me’ which did not make much impact. But Adisa believed that continuous weaving of Nigeria’s positive stories in ad-

vertising messages will prove fruitful. Speaking on the theme : “Advertising and the Power of the Nigerian Story”, at a special industry evening parley convened by Goddy Ofose, one of Nigeria’s brand journalists, Adisa firmly believed that advertising has huge mind-

power with both intended and subtle messages. He said every piece of advertising message must be seen as an opportunity to shape minds and make impact for a particular era. “When the full power of advertising is unleashed, it shapes the story of a brand for good” he stressed.

He also explained that every piece of communication arts, be it an ad, music or film project provides a veritable platform to project Nigeria’s story. Stating that nations tell theirs through what they do or what they say about themselves, Adisa said Nigerian story is vibrant and no one can tell it better than us. “So we need to shun all the excuse, the time to do that is now. The power is in our hands”. Members of the panel that included top industry players like Felix King Eiremiokhae of Oracle; Martin Mabutho of MultiChoice; Jaiye Israel Opayemi of ChainReactions; Bunmi Oke of Ladybirds; Moji Saka of SoulCom and Odion Aleobua of Modion Communcations noted that outsiders have been telling the Nigerian story for too long. The panel also noted the lack of buyin by some Nigerians in the Nigerian brand. They agreed that advertising and conscious efforts by the government to

tell Nigerians story will turn things around. Earlier in his welcome address, Goddy Ofose, said the event was designed to bring together industry leaders to rev up conversations that will move the Nigerian Marketing and Communications industry forward. In his comment, Gboyega Akosile, Chief Press Secretary to Lagos State governor said, “Programmes like this will inspire increased awareness on ways advertising and marketing can stir up businesses to grow the value of Brand Nigeria”. At the event, three industry achievers - Udeme Ufot, CEO/GMD SO&U, former APCON chairman; Lolu Akinwunmi, GMD, Prima Garner, former APCON chairman and Nn’Emeka Maduegbuna, CEO, C and F and foremost PR practitioner were honoured. Other 17 marketing practitioners were honoured for their outstanding performance in the industry.

Paga partners with Flutterwave on payment gateway

NIMN set to prosecute Dufil, AB Inbev, Lafarge’s marketing chieftains, over illegal practice

Daniel Obi

obile payments company, Paga, has entered into partnership with Flutterwave to support secure one-click payments for Paga wallet users at any merchant where the Flutterwave gateway is enabled. Founded in 2016, Flutterwave enables its customers to build customizable payment applications through its APIs. Through this partnership, Paga will now feature as a payment option for merchants that integrate the Flutterwave payment gateway, thus allowing its customers to pay merchants from their Paga wallet. The collaboration immediately opens up Flutterwave’s merchants base of airlines, media outfits, hotels, ticketing companies, fashion retailers, etc. to Paga’s over 14

million customers. “At Paga, we build solutions to make it simple for consumers and businesses to access and use money. By partnering with Flutterwave on their gateway, we give our customers access to quickly make payments to an even larger pool of merchants,” said Jay Alabraba, Paga Co-founder and Director of Business Development in a statement made available to BusinessDay. “It’s a winwin situation. Customer has a faster payment option and merchant gets their money seamlessly. Also, important-

ly, the service is end-to-end secure.” Commenting on the new development, Flutterwave’s Co-Founder and CEO, Olugbenga “GB” Agboola said in the statement, “We’re on a mission to simplify payments for endless possibilities giving everyone an opportunity to grow. We’re excited to connect all businesses on Flutterwave to Paga’s rapidly growing customer base where a new wave of prosperity across Nigeria, Africa, and the World will be witnessed as a result of this and that’s why we are here.”

Domino’s Pizza hits 50 outlets in Nigeria

omino’s Pizza has opened its 50th store at Jara Mall, Simbiat Abiola Way, Ikeja, Lagos. The new Domino’s 50th store also adds to the organisation’s 106th store for all its three brands including

Coldstone Creamery and Pinkberry Gourmet Frozen Yoghurt, since it started operations in Nigeria in 2012. C o m m e nt i ng o n t h e opening, Patrick McMichael, CEO of Eat’N’Go Limited in a statement said the company has a 2020 vision to greatly www.businessday.ng

expand its presence within the Nigerian market. He said “the launch of the new Ikeja outlet would ensure that all our customers continue to have great access to our products and also in line with our 25minutes delivery guarantee within the Ikeja axis”.

he National Institute of Marketing of Nigeria (NIMN) is making plans to prosecute six individuals, including marketing chieftains of Dufil Prima Foods Plc, Girish Sharma; Anheuser-Buch Inbev’s (AB Inbev), Tolulope Adedeji and Lafarge Africa Plc’s Viral Agrawal, for flouting marketing practice rule in Nigeria. The institute, in an affidavit sworn to by its Registrar, Sydney Ogodo, at the Federal High Court of Nigeria, Ikoyi, in Lagos, on Wednesday, February 26, 2020, accused the individuals and three others, Folarin Lebile of the CWAY Group; Kola

Oni of Axa Mansard Insurance Plc and Norden Thurston of the 7up Bottling Company, of practising marketing, without any proper certification from the institute. The institute’s Registrar, Sydney Ogodo, in the affidavit, explained that the institute, established by an Act of the National Assembly of the Federal Republic of Nigeria, in 2003, to register any person who practises marketing in the country, decided to tow the judicial path, after several overtures from it were rebuffed by the concerned individuals. Ogodo stated that before resorting to prosecuting the individuals, the institute had, in 2018, made publications in the national dailies, asking

individuals, practising marketing in the country without any valid registration with the institute, to begin the process of registration. According to him, while many responded, and had since been members of the institute, the six individuals did not heed the Registration call, even after the institute’s council decided to engage them, personally, in 2019. The institute, is therefore seeking, among other reliefs, an Order of Perpetual Injunction, ‘restraining the individuals, whether by themselves, their assigns, servants, agents, officers, privies or whatsoever from practising or earning fees as marketers in Nigeria, until they have registered with the Claimant.’

Top Nigerian brands, influencers win at maiden edition of Gage Award

he maiden edition of Gage awards, an internet award, conceptualised to reward excellence in digital application and online presence, has recognised top Nigerian brands and individuals, who have shown dexterity in using digital to boost the nation’s economy. The maiden edition of the award which had 22 categories, with five of the categories audience drive, was held in Lagos recently with GTbank,

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Airtel, Jumia and other top brands, clinching awards in various categories. GTBank won the banking

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app of the year while Jumia won the Website of the Year and Jumia Food also won in the Breakout App of the year categories. Others winners are Sex for grade by Kiki Mordi, in the online film and documentary of the year; Skinny Girl in Transit also won the Web Series of the Year among others. The managing director of Airtel Nigeria, Segun Awosanya, won the Online Person of the Year, while Onyeka Akuma, bagged Entrepreneur of the Year award.

Tuesday 10 March 2020

BUSINESS DAY

ADVERTISING There is increasing shift in market research towards analytics – Kantar CEO Charles Foster, CEO, Kantar Insight for Africa and Middle East was in Nigeria recently to discuss growth strategy with key clients and other stakeholders. BusinessDay engaged him on various issues including drivers for growth, state of Kantar business and future of marketing research in Africa and the Middle East. During the discussion, Foster said any business which does not have insight and data that support business decisions is less able to grow than a business which has real understanding of the consumer and what they need to do to grow their products. He said insight and research are integral part of business for growth. Excerpts Considering population, investment opportunities and insecurity, what is Nigeria to Kantar? igeria as far as Kantar is concerned is one of the three key hubs we have across Sub Saharan Africa. It remains a country we regard as having greatest potential for growth. Growth is very important to us as a business because we see a huge scale size of what the market is going to turn into. In fact security issues are not a consideration for us as we have similar issues everywhere we operate across Africa and Middle East. In my view, Nigeria is not worse than anywhere else that we deal with on regular basis but the potential here by share of virtue of the size and scale of the business that we operate across Africa particularly if the country starts to industrialise and moves away from more traditional trading activities. I see more evidence of Dangote putting in more infrastructure that will support the development of the country in terms of not only on roads but refineries as opposed to our current import culture. I think that the underpinning of the country will be revolutionalised by that kind of behavior. I think that a trading country in Africa is not what we need, but we need manufacturing sector that is active, we need people on the ground, not buying and selling but producing,

Charles Foster

distributing and selling. I see more evidence of that happening and if that is the indeed the direction the country is going, then the future is sure. What I fear is the opposite as many countries in Africa don’t have that kind of manufacturing base such as Agriculture that is a big sector. How does your role apply to small businesses in any economy that do not have funds for research purposes? The big companies are being at-

tacked daily by little companies in subtle ways. You find that some big players are actually anxious about protecting their market share. Small companies are producing similar products already produced by big companies and some of the managers perhaps come from those big companies and started their own. As this happens, they are giving active competition to the big companies. The big players have relied on the power of their brands and distribution. Sometimes, actually the power of the brands is less strong as it used to be because sometimes some of the small players deemed to be, as effective, delivering products benefits the consumers want. For instance, in the hotel business, some small players are giving the big brands competition. The power of little brands, particularly tech brands to really have an impact on the big players cannot be underestimated. What do you see as trend of research across Africa and Middle East Regions? I oversee countries from Pakistan, Saudi Arabia, Morocco, Senegal, South Africa and there is enormous transaction across those countries. In Nigeria, about 65 % population own smart phone, this means that there are about 40 % you can’t reach via technology. Most countries across the world, we reach people online or via a computer link. Clearly, Africa has to

pursue this route very actively. The overriding trend across the world on how we collect data is not our raison d’etre. What we increasingly do is to deliver insights into the data, we actually don’t just report it. But we are far more focused on what the data means to business. One of the implications of that information is in terms of driving any future business decision they may make. Traditional marketing research versus Analytics … the way forward. I don’t think that traditional market research is growing across Africa. Actually what is growing is the broader industry research, insights and analytics. The global research report on the size of the industry and how it is growing the number is not impressive. In Kenya, the actual traditional research industry shrunk about 2-3 years ago but the analytics business grew. By analytics we mean the ability of market research companies and other consultancy companies to bring to the table, analysis of their big data, consumer trends and get to the real behavior of data analysis which leads to understanding of a whole business life, which in many cases involves the predictive aspects. Actually there is a shift in the research industry towards more analytics hence the marginal growth we are witnessing is from this arm of the business What is your prediction for

research business for 2020? All predictions say that in 2020 research will grow, not huge but it will grow. Globally there will be growth. In Nigeria I want to see growth but Nigeria’s economy has not actually leveraged the big potentials. If I look at regions, the biggest growth will come from Middle East and less from Sub Saharan Africa. Could you summarise your presentation at the recent lecture? I was reflecting on a study we did world-wide among CMOs and CEOs on what makes companies grow faster. That is against the backdrop of the fact that less than one of 10 companies around the world shows growth. In that research, we did interviews among 600 CEOs and CMOs around the world and 15,000 interviews among the marketers. We broke out the result among companies which have shown growth against those not growing. We identified those growth factors in the growing companies. For instance don’t fish where you have always fished, look outside the traditional areas of expertise, and build expertise from people not born of the same background. Again businesses need to increasingly become integral part of community they operate in. Again companies need to be careful of adaptation of global models into local markets but more importantly companies need to be creative.

Asha, new lubricant in Nigeria’s competitive market, gets automobile mechanics’ approval Daniel Obi

ngine oil is one product that many vehicle owners use often to sustain the lives of their automobiles but some individuals lack the knowledge about the products’ composition. This knowledge gap, especially about appropriateness of engine oil for particular vehicles has given room for existence of fake products in the market. These low formulated lubricants sometimes compete on price with genuine products. No wonder some vehicles smoke and pollute the air with environmental-unfriendly emissions from their engines. Most times, vehicle owners rely on the experience of auto mechanics for suitable lubricants to enhance their vehicle performance. It was therefore comforting when Lagos State chapter of Nigerian Automobile Technicians Association, NATA, after examining Asha Engine Oil, the new entrant in to the lubricant

market, produced by Asharami Synergy, a Sahara Group Downstream Company, approved it. In guiding vehicle owners on engine oil usage, Julius Lawal, chairman, Lagos State chapter of NATA confirmed that his members have tested Asha engine oil and have approved it as it does not form sludge inside engines and it does not dry up. The NATA official said his members are the end users of engine oil, noting that some oils in market dry up when put inside engines while others form sludge which indicates that the additives are not good enough. Lawal affirms that Asha lubricant is produced with high international standard. Asharami Synergy is pushing quality product and education of the vehicle owners who should get involved in the selection of what lubricant matches their engine – and not leave this all-important decision to the discretion of mechanics or ‘engineers’ only, some of who are not honest. www.businessday.ng

As the product penetrates the market, the approval by the auto engineers is indicative of the quality formulation and complements the approval by American Petroleum Institute (API) and Society of Automotive Engineers (SAE) of the Asha lubricant. The Asha engine oil range which includes Asha Crest, Asha Xtra, Asha Trans and Asha HD Premium

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which Moroti Adedoyin-Adeyinka, the MD/CEO of Asharami Synergy said at the launch of the lubricants in Lagos, have undergone extensive quality tests and have been certified for distribution across the country. This should give consumers seeking pocket friendly, safe, and durable, affordable and high performing lubricants a huge dose of “peace of mind” . “The Asha Engine Oil range can be applied to all manner of engines in generators, light and heavy-duty machines, cars, trucks, motorcycles, among others. We are delighted to give Nigerians the ultimate choice of engine oil that is pocket-friendly and outstanding by all parameters,” she said. Given the huge amount of new and ‘tokunbo’ engines in circulation, choosing the right lubricant is the most important decision car owners have to make to ensure long lasting performance. According to auto experts, the right oil for cars are specified in vehicle manual and vehicle users should take notice of @Businessdayng

American Petroleum Institute (API) and Society of Automotive Engineers (SAE) original codes. The new Asha Engine Oil range come in different sizes. For instance, Asha Crest comes in one and four litres respectively; Asha HD: 4 and 25 litres while Asha Trans comes in 1 litre. The company said Asha Crest is superior quality multi-grade engine oil made from the highly redefined paraffinic base oils. It is particularly suited for petrol and diesel passenger cars, 4-wheel drive vehicles, light vans, generators and motorcylces. The Asha Engine Oil Marketing and Sales Manager, Seun Yussuf said at the launch of the lubricants that Asharami Synergy was working with top distributors and other stakeholders to ensure seamless access to the engine oil across the nation. It is gratifying to vehicle owners that more quality lubricant products are entering the Nigerian market at competitive prices to ensure high performing and long lasting engines.

Tuesday 10 March 2020

BUSINESS DAY

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Tuesday 10 March 2020

BUSINESS DAY

People gather for a rally in Ethiopia: across Africa the the median age is 19.4 and 70 per cent of the 1.2bn population is under 30 © AFP via Getty Images

Africa’s youth on life, work and WiFi: ‘I feel my future is here’ Two-thirds of respondents to survey say this is the start of the “African Century” David Pilling

phatso Elizabeth Gama, a sharply dressed 19-year-old agricultural student in Lilongwe, Malawi’s capital, is certain she has more opportunities than her parents, partly thanks to technology. “This is a new generation with more advanced technology and more access to information,” she said. As well as using her Chinesemade phone to talk to friends, download music and search for study-related material, she has turned it into a means of doing business. “We order stuff from Tanzania and South Africa like clothes and shoes and we get orders and deliver them,” she said, adding that she posted advertisements on WhatsApp message groups and paid some vendors using mobile money. “Youth have lots of good business ideas, even if the capital is lacking to get start-up loans,” she said. Ms Gama’s experience is roughly in line with a new survey of African youth, which finds that many 18-to-24-yearolds across the continent are entrepreneurial, optimistic and

tech savvy. Nearly four in five of 4,200 young people interviewed in 14 sub-Saharan countries by PSB Research, a US-based polling firm, believe that WiFi is a human right, while two-thirds say they are witnessing the start of the “African Century”. In a continent where the median age is 19.4 and 70 per cent of the 1.2bn population is under 30, the survey sought to capture the attitude of young people born after the end of apartheid in 1994 and decades after colonialism crumbled from the late-1950s. Among the survey’s most surprising findings are that two-thirds of young people have regular access to the internet; that, if given $100, half would start a business; and that 82 per cent think they will be better off in two years. The survey, from in-depth interviews with rural and urban youth from a broad income range, found that nearly 90 per cent of young people had a smartphone — a much higher percentage than for the population as a whole, where smartphone penetration is about 40 per cent. PSB claimed a margin of error of +/-2 per cent. The results are in sharp contrast to a prevailing view of Afwww.businessday.ng

rican youth as frustrated at lack of job opportunities and angry with their ruling elites, whom they deem to be corrupt and out-of-touch. Young people, some of them professionals, led uprisings last year in Algeria and Sudan, and youth protests have been a feature of politics in countries including Ethiopia and Uganda. The Ichikowitz Family Foundation, which sponsored the report said it sought to counter the stereotype that young people felt hopeless and angry, and instead acknowledge that many young Africans were seeking to solve their own problems. The Foundation stressed the independence of PSB and denied that the survey could have been skewed to elicit an optimistic picture of a continent where one in three people lives on less than $1.90 a day. Asked about the continent’s biggest challenges, respondents cited the creation of jobs as the second most important priority. Reducing government corruption was top. Paul Collier, an Africa expert at the Blavatnik School of Government in Oxford, has warned against the idea that entrepreneurship and “microenterprises” — often single-person

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businesses — can solve Africa’s problems. Lack of industrialisation and formal-sector jobs, he has argued, will keep productivity low and poverty levels high. Ms Gama, the student in Lilongwe, made the link between lack of formal employment and the fashion for entrepreneurship. “Jobs are very scarce,” she said. “Business or something like that is the way to go nowadays.” In Abidjan, Ivory Coast’s main commercial city, Moneka Tai, a 19-year-old student, sells natural hair products on Instagram under her own Mo’Hair brand. She saw opportunity at home and has not been tempted to migrate. “I feel my future is here. If everybody goes, who is going to contribute to the country?” Ms Tai agreed with the Foundation’s proposition that young Africans were less hung up on colonialism. “We are always blaming the west for stealing from Africa,” she said. “But if our streets are not clean, that’s not the fault of Europe. We as Africans must take responsibility.” The sense of opportunity is not pervasive. Demeku Kushina, a shy 19-year-old from a poor region of southern Ethiopia, said she had come to work @Businessdayng

in Addis Ababa as a housemaid to make money. She earns about $45 a month. One of seven children, who looked after oxen and cows as a child, Ms Demeku would like to go to school to learn to read and write. “But my brother doesn’t want me to learn,” she said of her 38-year-old sibling, a daylabourer in the capital city. “I am supposed to make money and help my mother. If I go to school, I’m not going to be able to do that.” Ichikowitz Family Foundation Ivor Ichikowitz, chairman of the Ichikowitz Family Foundation, is also founder and chairman of the Paramount Group, Africa’s largest private arms manufacturer. The South African-based group manufactures armoured vehicles, naval ships, avionics systems and fighter jets. The company has sold equipment and knowhow to countries in the Middle East, South America and Africa, including Saudi Arabia, Gabon and the Republic of Congo. Mr Ichikowitz has sought to draw a distinction between his defence business and the activities of his foundation, which focuses on wildlife preservation and other philanthropic initiatives.

Tuesday 10 March 2020

BUSINESS DAY

Academic focus limits business schools’ contribution to society FT survey of best in class social research ranges from smartphone dangers to crime-busting Andrew Jack

The use of therapy and cash payments in Liberia has been proven to reduce violent crimes. © Getty

ing and academia’s preference for peer-reviewed theory. The result has been publication of research in a limited range of specialist journals with limited readership. To d a y , m a n y b u s i n e s s schools in emerging economies, founded with a more practical focus and strong links to companies, have joined the chorus for reform. “We need research that is relevant to business,” says Konstantin Krotov, head of the graduate school of management in Russia’s Saint Petersburg university. There is growing pressure for change and accountability from government and philanthropic funding agencies. UK regulators

have introduced the Research Excellence Framework, for instance, which requires universities to provide evidence of their impact. Similar systems have been launched in Australia and the Netherlands. Yet the science of measuring the impact of research remains in its infancy. Most performance measures rely either on: inward-looking validation by academics citing each other in journal articles; broader references in the media or social networks, or anecdotal case studies of success. It may take years after publication before academic research finds practical applications in changing policies in the

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The virtual network’s vision for 2030 spells out the aspiration that by that year business and management schools worldwide will be “widely admired for their contributions to societal wellbeing

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n subjects from climate change to knife crime and racism in recruitment to kidney transplants, business school professors are conducting research geared towards making a positive impact on society. Despite criticism that much of their activity focuses on abstract, abstruse and overly academic topics with little resonance beyond the higher education sector, a survey by the Financial Times shows a rich and varied range of research by faculty on topics with strong social value. Bill Glick, professor of management at Houston’s Rice University, maintains, however, that such examples remain too rare. Much business school research, and public funding for it, is “underperforming”, he claims. He argues that talent and resources are too often channelled into theoretical work read by few people with limited application: “There is an emphasis on quantity over quality and novelty over replicability.” Prof Glick helped found the Responsible Research in Business & Management Network (RRBM), which at its inaugural conference in Rotterdam last year hosted more than 60 academics determined to make business schools’ research more relevant to society. It will hold a second event in London this summer. The virtual network’s vision for 2030 spells out the aspiration that by that year business and management schools worldwide will be “widely admired for their contributions to societal wellbeing”. Their “timely and cutting edge” research, it adds, will produce “well-grounded knowledge on pressing problems”. Some observers suggest that the often esoteric orientation of research is partly a legacy of reforms in US management education after the second world war. The changes were designed to bridge a gulf between the practical work of business schools and more traditional academic disciplines. Over time, this has led to a divergence between the needs of business for hands-on train-

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private or public sectors. The original authors, meanwhile, may never be credited. Moreover, top researchers may not be the best teachers to share their work effectively with students. Mike Taylor, head of metrics development at consultants Digital Science, argues that intermediaries such as bloggers can play a bigger role in bringing academic work to the attention of decision makers. Academic publications alone are a reductive way to assess the broader impact of business school research. Wilfred Mijnhardt, policy director at the Rotterdam School of Management, suggests taking into account a fuller range of “outputs”, including dissertations, grants awarded and patents. He is among those exploring ways to weight the value of total research by analysing whether articles refer to the UN’s Sustainable Development Goals (SDGs). Yet that approach still falls short of judging the quality of the ideas themselves, since it may represent “box-ticking” rather than providing important new insights. To aid the debate, the FT asked business schools to select up to five papers by their academics, published in the past five years, that they considered to have social impact. It then @Businessdayng

used Altmetric, a service owned by Digital Science, to quantify the online resonance that each had with the wider world beyond universities, drawing on references ranging from academic citations to social media posts. The top 100 results, broken down by Altmetric’s individual categories, some of which are set out in the columns below, were striking for their variety. The highest scoring paper overall was Brain Drain, submitted by the Rady School of Management at the University of California in San Diego. It sought to test whether carrying a smartphone, even without looking at it, can impair cognitive performance. The work that received the most references in policy documents produced by governments and organisations outside academia was from the University of Exeter in southwest England. It was on the use of therapy and cash payments in Liberia to reduce violent crime. The most references on Mendeley, a platform that hosts discussions among academics, came from a paper submitted by Corvinus University of Budapest on the conceptual framework of the Intergovernmental Platform on Biodiversity and Ecosystem Services.

Tuesday 10 March 2020

BUSINESS DAY

EDUCATION Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

How Lagos partnership with private sector is shaping educational outcomes KELECHI EWUZIE

etermined to deliver approved educational outcomes in line with his T.H.E.M.E.S pillars of governance agenda, The Lagos State Governor, Babajide SanwoOlu has expressed the State Government’s readiness to collaborate and partner with the private sector stakeholders in the education sector. Sanwo-Olu says by increasing the budgetary allocation to Education and supporting programmes like Eko-Excel initiative - Excellence in Child Education and learning, he demonstrates his commitment to this important sector. The governor while speaking at the Year 2020 Education Public-Private Partnership Dialogue in Lagos Tuesday stated that the first “E” in the T.H.E.M.E.S pillars of governance agenda represents the administration’s commitment to reform the education sector

The Lagos State Governor, Babajide Olusola Sanwo-Olu (2nd from left); Commissioner for Education, Folasade Adefisayo (2nd from right) at the Year 2020 Education Public-Private Partnership Dialogue in Lagos

for an overall objective of a Greater Lagos. According to Sanwo-Olu, “So far, 60,000 chairs and table units had been distributed to some schools and promised that a hundred thousand unit is targeted before the year ends”. “To better encourage Teachers in Public Schools, SanwoOlu promised that designs for Teacher’s quarters within the

School premises would soon commence. He added that his administration would give 20 cars to best-performing teachers across the 20 Local governments in the State”, Sanwo-Olu said. Earlier, the Honourable Commissioner for Education, Folasade Adefisayo while presenting the BOS Education Transformation Plan (BOSETP) needs of Educa-

tion reeled out the efforts and achievements of the Ministry since coming onboard. Adefisayo revealed that the Ministry had begun the construction and upgrade of public schools and in view the commissioning of a new school. “Reviewing and optimising the curriculum, organising, instituting a better school governance and administration and improving the capacity and

welfare of students and school personnel investment in technology and state of arts training and induction of teachers through the Eko-Excel are few of the Ministry’s achievements.” She concluded. Akindayomi Afolabi one of private-sector Partners in her presentation at the event, promoted inclusive education and called for an increase in the funding for Special Schools and Inclusive Units. Afolabi expressed readiness to serve and transform schools by bringing skills and experience to achieve sustainability in the sector, adding that the education reform team will adopt 10 Secondary schools and prepare them for the workplace. In the highlight of his keynote address, he stressed that as policy makers and private sector professionals, there is need to ensure that emerging generations of young people are exposed to the same highquality educational opportunities with a comprehensive and well-rounded education that

involves the impartation of skills such as empathy, leadership, self-confidence as well as inculcating values and ethics in young adults. He harped on the need for support resources and the feedback of the Private Sector to achieve lofty ambitions which require strategies for achievements of set goals through supportive and seamless means for attainable outcomes. Sanwo-Olu outlined areas which stakeholders in the Private Sector can collaborate with Government; adopting schools and teacher training centre to fund, equip and upgrade; providing accommodation; donating equipment and technology tools. Funding a Lagos State Teachers’ Welfare Fund; sponsoring work experience schemes for students and teachers, sponsoring Local and International exchange programmes; investing in Special Needs Education; providing consultancy services for monitoring and evaluation, capacity development, data gathering and analysis.

NTIC strengthens science, art potentials of students ILUSEC 92 set deepens teaching, learning

with N1M electricity projects

…holds Science and Art fair KELECHI EWUZIE

igeria Tulip International College (NTIC), Lagos “formerly known as Nigeria Turkish International College as part of efforts to create awareness about the importance of taking care of the earth, has organised her 3rd Science and Art Fair. The event tagged ‘Working at Saving the Earth’ (WASTE) afforded the students in 14 different school clubs the opportunity to showcase their inventions to parents and other invited school. Emre Dogan, Principal, Nigeria Tulip International College said the event was organised to encourage the students to show their talents. Dogan said that the students, through the exhibition, explained how awareness about recycling and conservation of water can contribute to comfortable living and advancement of the human race. According to him, “The aim of the science fair is to offer something different in education, educating the children away from the classroom. The process is such that children are allowed to display their creativity”. Fausat Akinsanya, vice prin-

cipal (Secondary school) and head of science department said the science fair is an annual event of the school. Akinsanya says the theme for this year’s event was all in a bid to create awareness about the importance of taking care of our environment, adding that with a change of attitude by parents and students, the earth would be a better place. On her part, Jumoke Thomas, vice principal, nursery and primary of the school while explaining plans put in place to groom the next generation of leaders, observes that we are in the 21st century a such school

management must change their method of teaching to align with global best practices. In the education sector today, there is a lot of trends as new things keep coming up, so it will require a 21st century teaching and learning skills by school management to remain relevant. According to Thomas, “Today we do a lot of project-based learning which gives the children the opportunity to apply what they are being taught in class to their everyday lives. So that is how we balance the indoor and out-doors learning experience”.

Ogunfuyi Hassan, representing the director Science and Technology Department, ministry of education Lagos State inspecting the student project alongside Emre Dogan, principal at the 3rd edition of Science and Art fair of NTIC Lagos www.businessday.ng

KELECHI EWUZIE

etermined to strengthen capacity in teaching and learning in Nigeria, the 1992 old students (pacesetters set) of Ilupeju Secondary School, Lagos has commissioned a 7.5 KVA power generating set and the general wiring of the blocks of classroom worth one million naira to their Alma Mata. Olayemi Kudaisi Azeez, pacesetters’ President, expressed excitement about the tremendous support the old students had made towards developing the school and improving the education system. Azeez, an education administrator and head teacher at Redeemers International School for lower school while speaking at the commissioning of the power generating set, stressed on the need for teacher’s capacity building to improve the standard of teaching in the state, just as she admitted that there is need for government to do more to improve the environment and hygiene conditions in public schools. On the old students plans for the school in future, the set President reiterated the association’s commitment and

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L-R: Wale Elebiju, vice president, Ilupeju Secondary School 1992 set (ILUSEC); Idowu Oyebanjo, member 92 pacesetters set; Subar Miriam Apinke, principal, Ilupeju Junior Secondary School; Olayemi Azeez, president, ILUSEC 1992 set; and Adebowale AB, principal, Ilupeju Senior Secondary School, at the commissioning of the ILUSEC Electricity Projects funded by Pace Setters in Lagos.

well cared for”, Oyebanjo said. He assured that the set has put in place a very robust system of maintenance. According to him, “There is a maintenance schedule, a written maintenance contract is in place to ensure that the equipment is well maintained. We will also encourage the school to follow the maintenance regime we have put in place”. On how Alumni can help support the development of their Alma Mata, Oyebanjo started that the first thing is academic. In academic inter@Businessdayng

vention, he opines that it is important to make sure that the students are well taught all their subject because they are the leaders of tomorrow. “There should also be career guidance and counseling where the students are exposed to training career prospects so they are guided on the best career path to pursue”, Oyebanjo said. Alumni can also get involve in recruiting first class teachers to help in teaching these students in support of government’s effort.

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Tuesday 10 March 2020

BUSINESS DAY

EDUCATION

These five learning management systems top list in Nigeria STEPHEN ONYEKWELU

i g e r i a n s a re warming up to the idea of smart learning; both schools and individuals are adopting various learning management systems (LMS) as the practice spreads around the world. A learning management system is a software application that is used to organise and share electronic (or elearning) materials, assignments, and assessments through an online platform for students to learn from. It also tracks and calculates grades, facilitating communication among students and teachers. Unlike the traditional model of teacher-learner classroom interaction, learning management systems offer an individualised and comprehensive learning model that is more interactive and often lacking in the traditional model. LMS has become a veritable tool in the hands of an educationist who have embraced it both locally and globally. In Nigeria, these five learn-

ing management systems are becoming popular, according to Gopius, an e-learning platform that provides educational resources to support learning. TutorNG: developed by Exolve Technologies Ltd, TutorNG is a learning management system targeted at both students and tutors worldwide.

For those keen on learning something not taught in traditional schools and classrooms, this platform provides the needed solution. It offers a platform for learning, incorporating both e-learning and other features in its interface, and allowing both tutors and learners to interact while on

this platform. TeachMe: this is another learning management system in Nigeria. Here, you can basically share and sell your knowledge online for a fee. You can also learn such skills as programming, yoga, design, photography, and a whole lot of other skills.

Uni-Ilorin VC enjoins 11, 816 matriculants to map out objectives SIKIRAT SHEHU, Ilorin

ulyman Age Abdulkareem, professor of Chemical Engineering and the ViceChancellor, University of Ilorin, has enjoined the newly admitted students of the institution to have a roadmap that will give a clear direction to their vision and mission to have a rewarding and fruitful experience in their sojourn at the University. Abdulkareem, stated this recently in his address at the institution’s 2019/2020 Matriculation Ceremony for the 11, 816 newly- admitted students

at the University Auditorium. About 172 of the matriculants are international students. The Vice-Chancellor says: “To have a rewarding and fruitful experience in your sojourn at this University, you must have a roadmap that must give a clear direction of your vision and mission. The mission is what you must set out to accomplish as a student and vision is the resultant effect of what will manifest after your academic attainment. “In the absence of well mapped out objectives, your mission may not be fully realised, if there is any concrete time for setting your mission, the time is now.

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“I can assure you that the University is always ready to assist you in your endeavours to achieve your objectives. On our part, as staff members of this University, we will give you all the support you need with a high level of commitment, discipline and respect for your persons”. In his address, entitled “The Time Is Now”, Abdulkareem disclosed that a total of 105,058 candidates picked University of Ilorin as their first choice during the 2019/2020 admission exercise that is culminating into their matriculation, saying “This is about more than 5,000 above the 104,000 candidates that

won us the JAMB award for being the most sought after University in the 2018/2019 admission exercise. “Out of the 105, 058 candidates that chose our University as their first choice in the 2019/2020 admission exercise, 45, 330 candidates scored 180 and above from where only 11,816 candidates, including 172 international candidates, were ultimately successful in gaining admission into our most admired University”. While congratulating the matriculants, the Vice-Chancellor noted that the University of Ilorin is the most sought after University in Nigeria due to its “stable calendar, academic excellence, discipline as well as industrial harmony”. The VC advised them to guard and manage their time because time is precious, “Do not postpone till tomorrow what you are capable of doing today. Putting forward what you can do in the meantime is procrastination and you should remember that it is the thief of time. You are not only expected to be sound academically, but you are also required to be well-behaved and responsible,” said Abdulkareem. A major highlight of the ceremony was the administration of the Matriculation Oath on the fresh students by the Registrar, Fola Olowoleni.

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SmartLecturer LMS: targeted at higher institutions, it is one of its kind, allowing open access by both lecturers and students alike. The platform appropriates and integrates learning management strategies using asocial network platform, eliminating partially or fully the need for face-to-face interaction and instruction. The platform is a testament to the gradual dominance and taking over of emerging LMSs over traditional models of instruction. Educe: this is another company that specialises in building resourceful learning management systems. Currently, the company has two learning management solutions under its sleeve; Rapid Learning, which is a platform that supports standard course development protocols, and Schoolket, which is a framework for building learning management systems targeted at Nigerian secondary schools. The platform comes with a school management system, a website template, and an enhanced android app, which you can only access when you pay a fee.

Wizitup: this is a cloudbased proprietary system focused on providing top of the range education online. For those who wish to connect to the platform but with inadequate data access, their educational content can be provided offline through localised installations, preloaded tablets, or through mobile apps installed in their smartphones. The good news about it is that it is completely free to use, and is targeted at both primary and secondary school students. A learning management system presents many advantages. It is easy to implement because it is a piece of software which is easy to implement in an educational centre. Virtual classrooms or campuses act as support and a channel of communication, for teachers and students alike, when going forward with an educational project or virtual learning. Improving the learning experience is the ultimate goal of any virtual campus. LMS is not only a virtual space created for learning, but make learning a more complete experience.

IAC Ilorin to commence postgraduate courses on Aircraft maintenance SIKIRAT SHEHU, Ilorin

he International Aviation College, Ilorin, has disclosed that the institution in collaboration with the Kwara State University (KWASU), Malete will soon commence Postgraduate Diploma courses in Aircraft Maintenance Engineering. Ahmed Yusuf Gobir, the Chairman, Governing Council of the College disclosed this in his office while receiving members of the Ilorin Emirate Durbar Committee led by its Chairman, Suleiman Yahaya Alapansanpa. Gobir explained that all the courses to be run by the College would be supervised by the Nigerian Civil Aviation Authority (NCAA) postgraduate in aircraft maintenance licence, while the NBTE would concurrently supervise the National Diploma and Higher National Diploma programmes. According to him, such programmes and other courses would not only improve the capacities and the expertise of the students but also improve the financial situation of the College to stand on its own without waiting for government subventions. Gobir, who is also a pi@Businessdayng

lot disclosed that he met on ground on his appointment as Chairman, Governing Council of the College, various challenges but said that with the commitment and support of staff; he was able to identify areas to focus on, adding that they have all succeeded in turning around the administrative and academic activities of the College. Also speaking, Benedict Adeyileka, the Rector of the College, noted the Chairman has been of tremendous support to the College since he assumed duty, more so with his versatile experience in the aviation industry. The Aviation College according to Adeyileka is working towards producing world-class pilots who can be employed in any aviation industry in the world, adding that the Aviation College is the only one owned by a state government in the entire West African Region, as he commends the initiative of the state government for establishing the institution. Suleiman Yahaya Alapasanpa, the leader of the visiting team, who was represented by Usman Abdulazeez implored the Chairman to see his appointment as an act of God, urging him to continue to work assiduously to take the College to greater heights.

Tuesday 10 March 2020

BUSINESS DAY

property&lifestyle How Land Use Act deprives Nigerian citizens ownership of affordable housing ENDURANCE OKAFOR

igerian property developers are close to being handicapped at delivering affordable housing for the larger population in Africa’s largest economy owing to barriers posed by the 40-year old Land Use Act. Difficulties in acquiring land for real estate development could mean less inventory in the market or the available products will come at a higher cost as access to land is the foundation of any real estate project. The latter is the case for Nigeria, a country which requires an estimated N170 trillion to N200 trillion to bridge its housing deficit estimated at 20 million units. “The major issues that continue to affect housing delivery in Nigeria, which also account for the wide demand-supply gap, include constraints related to the high cost of securing and registering secure land title,” said Nasir El Rufai, Kaduna State governor. When BusienssDay asked Adekunle Abdul, Managing Director, Metro & Castles Homes, a real estate development company, what it will take a real estate developer to provide afford-

able housing for Nigeria’s low-income earners, he said everything depended on the price of land because developers do not have control over the price of lands. “The cost of building a house is the same, whether you are building in VI or Ikoyi, but it is the land value that drives the cost of properties high,” Abdul said. The Land Use Act nationalizes all lands in Nigeria and places a government official between a legal contract of sale of land between two parties. It places all land in Nigeria in “trust” of the government and specifies

that future transfers or sale of land must be confirmed by a government official, in writing, irrespective of the value of the transaction. “It shall not be lawful for any customary right of occupancy or any part thereof to be alienated by assignment, mortgage, transfer of possession, sublease or otherwise howsoever - without the consent of the Governor in cases where the property is to be sold by or under the order of any court under the provisions of the applicable Sheriffs and Civil Process Law,” the Land Use Act read. According to Matthew

Enya Nwocha, Senior Lecturer at Ebonyi State University, section 22 of the Act is particularly “devastating as it prohibits any person to whom the governor has granted a statutory right of occupancy from assigning, mortgaging, transferring, subleasing or howsoever adversely dealing with the land against the terms of grant without having first hand obtained the consent of the governor.” Enacted in 1978 during a military regime under Oludegun Obasanjo, the Land Use Act was enacted to check land speculation which is a key

driver for the astronomical rise in land values. But due to lack of modification of the Act, the opaque law is now a setback for many real estate developers as it makes it difficult for them to get access to affordable and stress-free land. Issues around the rigorous process, including long duration and high cost of obtaining land documentation, are the key setbacks highlighted by the industry stakeholders. “The bureaucracy combined with the corruption in the titling process will not allow things to get done. Whatever has been done still has not solved the problem of titling,” Jide Ogunleye, CEO of Denaro Properties Ltd said. Industry players had believed before the enactment of the law that once ownership of land was vested in the government, speculators would be forced out of business and government would then be able to stabilize the value of the land. “The Act was intended to assist the citizenry, irrespective of their social status, to realize their ambition or aspiration of owning the place where they and their families would live a secure and peaceful life,” an 80-year old real estate developer, who asked not be identified, told BusinessDay.

A recent report by PWC revealed that Nigeria has an estimated $900 billion worth of dead capital in residential real estate and agricultural land. Dead capital is described as assets that cannot be converted to economic capital. “Approximately 95 percent of household dwellings in Nigeria have no title or a contestable title,” Andrew S. Nevin, Partner and Chief Economist at PwC said, adding that in Lagos, for example, it takes an average of 12 procedures and 105 days to register a property or as long as two years. The provision by the Act that the state governor has to grant a statutory right of occupancy before a person can use his landed property for mortgaging, transfer, subleasing or other dealings is one of the major reasons for the country’s housing deficit, BusinessDay findimgs show. Individual efforts at increasing Nigeria’s real estate by way of developing more houses have not helped to reduce the demand-supply gap or increase the ownership level estimated at a little above 20 million units. Despite its large-size population and self-acclaimed biggest economy in Africa, Nigeria is crawling behind its peers in terms of homeown-

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Here’s what delivery of Trinity Towers, others will mean to property market … office space market expects 130,000sqm in 2020; 20% due in Q1 CHUKA UROKO

t is expected that two large-size iconic office buildings, Trinity Towers and Famfa Oil Towers, among others, will be delivered to the Nigerian office space market in the coming months of this years. This, according to close property market watchers, holds out implications for landlords or space suppliers, office space consumers who will be benefiting from it and also for the market itself which will suffer further dip in terms of demand. Available data shows that as many as 130,000 square metres of new office space will be coming into the market in 2020 and 20 percent of these deliveries will be ready by the first quarter of the year. Data compiled by Broll Property Services Nigeria, as contained in the Broll Intel Property Market Viewpoint, highlights the grade A office space market, showing that as at second half of 2019, the total stock of office space in Nigeria was 110,000 square metres. The data shows further that, year-to-date, 45,000 square metres space have

been completed; about 130,000 square metres are under construction; 20,880 square metres are on hold while, year-to-date, the gross take-up stands at 20,100 square metres, leaving the market with 41 percent vacancy rate. An ambitious project being developed by Dayspring Property Development Company, Famfa Oil Towers is a 20-floor office building located on Alfred Rewane (Kingsway) Road in Ikoyi. The Tower sits on 5,695 square metres and promises, on completion, to deliver to the market 55,000 square metres which is the size of its gross floor area (GFA). The Tower on which piling works commenced in the last quarter of 2016 by Trevi Foundations is expected to be completed this year. Besides the three floors of office space dedicated to Famfa Oil, the property will also offer leasable office space and a multipurpose hall, each with a dedicated well-appointed entrance at the ground floor. Trinity Towers, a huge project being developed and promoted by the City of David Church, a province of the

Redeemed Christian Church of God (RCCG), is located in the heart of the fast developing commercial centre of Oniru, Victoria Island, Lagos. Upon completion, the development will boast 13,320 square metres of contemporary real estate, spanning 12 floors with parking for 670 cars in the multi-storey car park, 5000-seater concert hall, indoor amusement for children, retail therapy for the shopaholic, two cinema halls, a gymnasium, rooftop swimming pool, helipad, medical centre, café and restaurant,

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multi-purpose halls, banking halls, and ATM Gallery. Both towers will be contributing significantly to the 130,000 square metres expected to be delivered into the market this year. Analysts are of the view that the delivery of whole 130,000 square metres into this market means landlords have more competitions to face; more concessions to give to prospective and existing tenants, and also more vacancy rate and higher maintenance cost to contend with. Due largely to over-supply

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and slow activities in the economy, office space is tenants’ market. Tenants have become increasingly choosy, putting the landlords at their beck and call. Nnenna Alintah, head, Property Intel, Nigeria, recalls that occupier requirements remained fairly unchanged in the market in the second half of 2019, with the top factors driving building selection (besides costs) being location, security, building efficiency, HSE features, and onsite amenities. Expectation is that with the new deliveries, tenants may be requiring more and that will squeeze the landlords further in terms of construction cost and evolving strategies for tenant retention. “Landlords still view the market as a tenants’ market. Competitive leasing terms are still being offered on a case-by-case basis conditional on the impact of a prospective tenant on existing tenant mix and the size of take-up,” Alintah affirmed. At the two major locations for Grade A office space, rents have remained largely steady. Whereas it has remained steady at US$700 per square @Businessdayng

metre per annum, in Victoria Island, average rents are steady at US$698 per square metre per annum. Analysts do not see demand increasing from the present levels. The Broll Intel market viewpoint notes that with no significant movement upwards in the level of enquiries, demand is not expected to increase in the near-term. It notes further that, in the near-term, deliveries in the market are small, but the market should feel real injection of space in the next eight to 24 months. “The market is also to see less speculative build as investors become more risk-averse and indigenous developers become more cash-flow sensitive,” Alintah said. She was also of the view that “rents are to trend steady conditional on the health of the economy and in turn the real estate market”. Generally, with the outlook of the economy mixed, many landlords remain on the fence or cautiously optimistic about the performance of the real estate market in 2020 and, therefore, do not foresee any real capacity for rental growth in the near-term.

Tuesday 10 March 2020

BUSINESS DAY

property&lifestyle 3 major trends to consider as guide to investing in real estate CHUKA UROKO

t a time like this in Nigeria when choices are narrow in terms of investment asset classes to choose from, investment advisors say that investors should consider trends that guide rewarding investment. The investment advisors urge caution and wisdom, saying that investments should be done with purpose; it should not be made out of fear, but with a sense of mission. At the moment, they say, three major trends stand out as guides to investors. One is the rising population of millennials. It is estimated that 50 percent of the world’s population is under the age of 30 and these are the people referred to as millennials. “The values of this generation are set to become the norm. As a connected and truly global generation, they feel a collective responsibility, they care and show they do through their actions,” noted Udo Okonjo, the Vice Chair/CEO of Fine & Country West Africa. Fine & Country is a leading real estate marketing, consultancy and advisory firm that has very strong footprints in the Nigerian real estate market in terms of number of closed deals and speed of transaction. The company, already in its 10th year of doing business in Nigeria, provides answers with the speed of light to questions bordering on what, when, how and where to invest, especially in luxury real estate. Okonjo describes the millennials as “digital natives with a different mindset and priorities from previous generations,” pointing out that they value a conscious but experience- and funoriented lifestyle.

Obileye is a UK-trained lawyer and CEO, Great Heights Property and Facilities Management Limited Email: Tundeobileye@greatheightslimited.com

The use of KPIs to measure vendor performance

As digital natives, she explained, the millennials are disrupting the traditional models and redefining consumption, with millennial brands emerging. “Micro apartments are developing as an attractive type of housing for millennials and investors,” she noted. It is her view that the millennials are the largest generation in history and soon coming to full maturity as investors. Sustainability, clean energy and investing matter to them and will gain in importance in the coming years. Another trend to consider while investing in real estate is co-investing:. This is because community is very important to most people. There are several advantages to investing as a group/club.

Besides sharing risks, there is safety and security to be found in multiple advisers and well-researched information usually found in investment clubs. Aggregated wisdom is the most powerful force to be found in co-investing and, according to Okonjo, group members can share their collective wisdom, lessons and opportunities. Another major advantage of investing with a community, she said, was exponential growth. Research has shown that accountability fast-tracks results. The power of a tribe is important in investing. Technology is yet another trend that is guiding almost all investments and it is very clear that the future of invest-

ing is digital. Big data will have a huge impact on how people invest in the future. Tech scientists have projected that, in the next decade, the strength of corporate organizations will be measured by how much data they have captured and will be able to capture. Tech giants such as Google, Facebook and Amazon have garnered influence today as a result of data power. Available record shows that there are 2.45 billion active users on Facebook monthly. “It is projected that, in future, when data is captured and analyzed, investment scientists will be able to determine what investment opportunities to create based on these statistics,” Okonjo said.

How Land Use Act deprives Nigerian citizens ownership... Continued from page 23 ership level in the country. Housing anywhere else in the world is a basic necessity, which in the order of human needs, ranks third after food and clothing but in Nigeria, the country with the largest population in Africa, it is a luxury accessible and affordable by only the rich who constitute less than 10 percent of the country’s over 200 million population. Whereas homeownership level is 25 percent in Nigeria, it is 84 percent in Indonesia, 75 percent in Kenya and 56 percent in

Infrastructure Maintenance With Tunde Obileye

South Africa, making Nigeria a laggard among its peers. Only 5 million of the 69.54million Nigerians reported by the National Bureau of Statistics (NBS) to have been gainfully employed as at third quarter of 2018 earn a salary of N3 million and above per year, as compiled from data by Graeme Blaque Group, a Lagos-based advisory firm. This data put employed Nigerians who can buy affordable housing at only 7.19 percent, meaning that as much as 64.54 million people who earn less than N3 million cannot afford to www.businessday.ng

buy a house except of course there is an increase in their income level. According to the Association of Housing Corporation of Nigeria (AHCN), an umbrella organization for all federal and state housing agencies, the underdevelopment of Nigeria mortgage sector in driving homeownership is worrisome as more than 90 percent of new homes utilise funds from personal savings for incremental construction. “The structure of the mortgage industry is the problem; there is the highinterest rate and this is on

the back of the economic condition,” Adeniyi Akinlusi, president of Mortgage Bankers Association of Nigeria (MBAN) and CEO, Trustbond Mortgage, told BusinessDay. The high mortgage interest rate in Nigeria is considered one of the key culprits responsible for the country’s housing crisis. The typical mortgage rate in Nigeria ranges from 7 to 10 percent for Federal Mortgage Bank of Nigeria (FMBN) and from 15 to 25 percent for commercial mortgage institutions, making it one of the highest in the world.

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hen organizations outsource the maintenance of their facilities to vendors, the most common challenge faced by facilities managers is measuring vendor performance which is essential to the success of outsourcing. Facilities managers can apply numerous Key Performance Indicators (KPIs) to measure performance or service provided by vendors as part of vendor management. The list of KPIs that can be used is endless and will depend on the circumstances of each built environment. Also, the objective of each organization/facilities manager will be crucial to determine the KPIs. KPIs can range from quality and response time against service level agreement (SLA), asset performance, asset reliability etc. Some of the KPIs to be considered by facilities managers are the following: Customer Service Levels: The average response time measures the time between the moment a customer calls to register a complaint or make a request, and when a technician responds to it. This is crucial because response time is a common problem among customers. Facilities managers can use several KPIs, such as average response time, first call resolution, and customer satisfaction to measure how well the vendor is performing. Backlog: This KPI measures maintenance tasks that are essential to repair or prevent equipment failures but that have not been completed yet. These include preventive maintenance, predictive maintenance, corrective maintenance and inspections. Facilities managers are advised to measure backlogs in hours and convert the data to backlog weeks. A healthy total backlog is four-six weeks but oftentimes, facilities managers usually prefer a @Businessdayng

two-four week backlog. Schedule compliance: This KPI measures the ability of the vendor to schedule and complete work for customers on the date or time as promised. Quality: Facilities managers can employ several KPIs to measure quality. Mean time between failures (MTBF) can help them validate the quality of the repair, while mean time between maintenance (MTBM) measures the time between maintenance activities. Conflict resolution: Conflict is unavoidable and if not properly addressed by the facilities manager, it can affect core business in a bad way. The resultant effect is that it can negatively impact both parties involved. Facilities managers need to resolve most conflicts as early as possible. Focusing on these issues can help avoid and resolve conflicts before they interfere with the relationship between the vendor and organization. A breakdown between the vendor and organization invariably affects service levels to the customers. Communication: It is important to have a documented plan that establishes clear lines of communication covering the service provider working in the facility, client, and users of the facility. Facilities managers can measure how well the established clear lines are applied. Fa c i l i t i e s m a n a g ers should revisit performance KPIs regularly. A well-defined scope of service requirement in place augmented by qualitative and quantitative methodology to assist in selecting the right provider, the most appropriate type of contract, policy and procedures established for communication and conflict resolution, the result is more likely to be that the key performance indicators provide a cost-effective and beneficial relationship between the in-house department and the services vendor.

Tuesday 10 March 2020

BUSINESS DAY

BDTECH

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E-mail: jumoke.akiyode@businessdayonline.com

How to properly secure your android smartphone JUMOKE AKIYODE-LAWANSON

e come across news of ransomware attacks, data leaks and privacy breaches every other day, so it is not surprising that people are always looking for ways to secure their android devices. The good news is that you can tighten up the security of your android phone by taking a few simple steps. To secure your device against malware or ransomware attacks, Google offers a few security features on android itself. It recently rolled out the Google Play protect feature for all android devices running Google play services version 11 and above. This is the latest security feature on android; available by going to settings, google and selecting security. It scans the apps on your device to make sure that there aren’t any security threats. If you want to improve your security further, you should enable the improved app detection feature because it lets play protect scan unknown apps downloaded from sources other than the play store for better detection of any malicious code. Also make sure you do not open any suspicious links or emails and don’t download apps or any other content from unreliable sources. If

you follow this. You should have no problems at all. Make sure to install the latest software updates available for your device because it might feature a security badge for the latest malware or ransomware out there. Secure your data: You are wrong if you think that you are a casual user and do not have any sensitive data on your phone. Everyone has important data on their phone, and for this rea-

son, android allows you to encrypt your device so make sure you enable the encryption on your phone by going to settings, security and tapping the encrypt phone option. This action encrypts your accounts, settings, downloaded apps, app data, media and other files. Once your device is encrypted and you have set up a screen lock on your phone, your data will only be decrypted when you enter the pin or passcode. You must be

thinking how is that different from your regular pin or passcode protection? Well, the data saved on an android device can still be accessed through various tools even if you have set up a lock. On the other hand, if you have encrypted your android device, your data will only be accessed if you enter a pin or passcode. Before you encrypt your device, please note that this action might slow down your phone just a bit and you cannot dis-

able encryption without doing a factory reset. Another thing you can do is to make sure to store important data in the internal storage of your device. This is because external storage drives use a mixture of EXD and other system. So when you can connect your device to a PC, the applications on the PC have blocked level access to files on the SD card. While securing your android device against malware is important, securing your privacy is also very important. Make sure you lock your phone properly by using the fingerprint scanner or pattern lock option on your device. It is also advisable to disable smart lock. Because even though it is a handy feature, it unlocks your phone automatically in some situations which might result in someone accessing your phone and getting through your privacy. If you plan to hand your phone over to other people to use sometimes, then make sure you create a separate user account to switch to. Also, enable two step verifications on all your social media accounts. Go to Google security check up page ( https://myaccount.google. com/security)to keep a check on the devices that you’re logged in to. Here, you can also check out the permissions different apps and services are taking from your Google account.

Empowering social entrepreneurs to achieve more using technology JUMOKE AKIYODE LAWANSON

icrosoft, through its Microsoft for startups initiative, has announced the launch of its Global Social Entrepreneurship programme. Around the world, startups are creating new businesses, built around powerful technologies and designed to make the world a better place. Innovators and entrepreneurs are finding new ways to harness technology to drive purpose-led social enterprises that measure success not just by the profits they generate, but by the good they do. Microsoft is deeply inspired by the commitment of these social entrepreneurs, who are focusing their passion for positive change on improving human health and the environment, advancing social and economic equity, and much more.

But these are huge, complicated problems and far too large for any single organisation to hope to solve alone. So to empower social entrepreneurs, Microsoft is launching a new Global Social Entrepreneurship programme to offer qualified startups access to technology, skills, customers and grants. The Global Social Entrepreneurship programme has benefits aimed specifically at elevating startups addressing an important social and/or environmental challenge through their products, services or operations. “Solving global social and environmental challenges requires synergy of the right technology, partners, conducive environment and technology. When startups work together with investors, enterprises, governments, non-profits and communities, we are able to unlock new potentials,” Amrote Abdella, Micro-

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soft4Afrika director, said. This global initiative is designed to help social enterprise startups build and scale their companies to do good globally. Microsoft believes in providing the foundational building blocks to help social entrepreneurs create companies that can achieve worldwide impact. Social enterprises that become part of the Global Social Entrepreneurship programme will receive access to free Microsoft cloud technologies, including up to $120,000 in Azure credits, along with technical support and guidance. According to Microsoft, a dedicated programme manager will help Global Social Entrepreneurship startups market and sell solutions and connect to large commercial organisations and nongovernmental organisations that are potential customers. Participants focused on sustainability, accessibility, and skills

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and employability will also be eligible for grants. Furthermore, the social enterprises that join the Global Social Entrepreneurship programme will be part of a worldwide community of like-minded innovators who come together to share ideas, foster connections and celebrate success. The programme is available in 140 countries and will actively seek to support underrepresented founders with diverse perspectives and backgrounds. Social impact startups from around the world are welcome to apply. The criteria to qualify for the programme includes a business metric that measures impact on an important social or environmental challenge; an established product or service that will benefit from access to enterprise customers; and a commitment to the ethical and responsible use of AI. Qualified startups will be eligible for grants in the areas of sustain-

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ability, accessibility, skills and employability. Local startups like ICE Commercial Power, a technology-enabled renewable energy provider scaling distributed solar micro-utilities in rural, underserved, and unserved regions of Nigeria have benefitted a great deal from the programme. ICE deploys modular, cloud-connected solar power systems (called microgrids) to provide clean, reliable electricity to small businesses who have resorted to using dangerous and expensive self-generation with diesel/petrol generators. To achieve this strategy at scale, ICE incorporates strong community engagement in target communities by training and employing local youth to participate in the development of their communities. The ICE strategy delivers sustainable impact and job creation in communities that need it most.

Tuesday 10 March 2020

BUSINESS DAY

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

Tek Experts partners LSETF to tackle unemployment issues in Nigeria JUMOKE AKIYODE-LAWANSON

…Discuss plans to position Nigeria as IT hub for Africa

s part of its ongoing recruitment drive in Nigeria, global IT support company Tek Experts attended the Lagos State Employment Trust Fund’s (LSETF) ‘Showcasing Leading Practices for Job Creation’ summit. The summit, which took place in Lagos recently, highlighted some of the key unemployment issues affecting the country. Representatives from different levels of government including both state and local government and some of the region’s top employers were in attendance to discuss possible solutions. In addition to seeking to create links and partnerships with corporate organisations, a key objective of the summit was to influence government policy to improve results and outcomes for target groups – namely, women, young people and entrepreneurs. Tek Experts Nigeria, which provides technical and specialised support to some of the world’s largest technology brands, is already a major employer in Lagos but is looking to expand even further. With a current staff strength of 1,250, over the next 18 months, the company plans to increase its team in La-

gos to 2,500. Lars Johannisson, country manager at Tek Experts Nigeria, who delivered a talk at the summit called ‘Jobs for the Future: Leveraging Technology for Job Creation, said: “At Tek Experts, our number one goal is to provide excellent customer service and we can only achieve that by making sure we have the best possible

people doing the job. “We were very happy to be a part of this summit and enthusiastic about our partnership with LSETF because we believe it is one of the best platforms for us to recruit the finest talent in the industry. Our partnership also shows our commitment to continue to create more IT jobs that will position Nigeria as a major IT

hub in the African continent.” In his opening remarks at the summit, Dele Martins, a member, board of trustees, LSETF, said this year’s theme hinges on the understanding that “by drawing successful experiences from both the private and public sectors in putting people to productive work, we can identify sustainable solutions for job creation.”

L-R: Ayuba Shuaibu; executive secretary, Universal Service Provision Fund (USPF), Adeleke Adewolu; executive commissioner, stakeholder management, NCC, Suleiman Elias Bogoro; executive secretary, Tertiary Education Trust Fund (TETFund), Umar Danbatta; executive vice chairman, Isa Ali Ibrahim Pantami; minister of communications and digital economy,

Emirates app hits 20 million downloads with strong mobile strategy, consumer uptake ...Biggest base of app users amongst full service international airlines with full features in 19 languages JUMOKE AKIYODE-LAWANSON

s the race for “share of mobile” continues, Emirates airlines marks a major milestone with 20 million downloads of its mobile app on the back of a strong mobile and digital strategy that has led to solid consumer uptake particularly in Africa, GCC and Asia. Catering to its global customer base, the Emirates app is available in more languages than any other airline app in the world, with full features set in 19 languages including Arabic and Mandarin. Available on Apple Store, Google Play Store and most recently the Huawei AppGallery, it is amongst the highest rated airline apps in the world. Boutros Boutros, Emirates’ divisional senior vice president, corporate communications, marketing and brand said: “Our Fly Better brand promise means that Emir-

ates aims to provide the best possible customer experience – not only onboard and on the ground, but also online, where the vast majority of our customers increasingly want to interact with us at every stage of their journey. We’ve seen a huge uptake of our mobile and online services, particularly in developing markets where consumers have really embraced a mobile-first lifestyle.” Boutros said that; “Over the past three years, we’ve made significant investment into Emirates’ mobile and digital channels, leveraging native app and cloud capabilities, global best practices in terms of software engineering, cross-functional ways of working, and leading data and marketing technologies. This is an ongoing investment, and we will continue to improve and add innovative app features and products, to keep apace and ahead of our customers’ expectations.” Innovative feature and www.businessday.ng

functions launched on the Emirates app in the past 18 months include; The ability to create a personalised ice playlist via Emirates app and to synchronize it with the airline’s system on-board, as well as the ability to preview the seat and the overall onboard product before travelling via 3D cabin models. The app also allows the ability to bid on tickets for highly-sought after sports and cultural events sponsored by Emirates around the world, using Emirates Skywards points and the ability to navigate through Emirates’ hub, Dubai International airport, and easily find your way to your boarding gate. In addition to features and functions, Emirates has also prioritised the improvement of site speed, as it is a major determinant of customer satisfaction with their online experiences. According to https:// www.webpagetest.org/, Emirates.com is now among the fastest airline websites globally, in par-

ticular when accessed via a mobile device on 3G and 4G. Other fast facts on Emirates’ app: •The most popular content on the Emirates app is in-flight dining menu. •The most popular activities on the Emirates app are flight searches followed by checkingins and accessing mobile boarding passes. •In an average month, more than 1 million check-ins are performed via mobile devices, representing greater than 60 percent of all online check-ins, which in turn account for 50 percent of total check-ins •Customers performed more flight searches on Emirates’ direct channels via mobile devices than via desktop or laptop computers. •App push notifications have become the preferred and dominant customer communication channel, compared to SMS and email.

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“I believe strongly that this summit aligns with the ‘Next Level’ goals of both the Federal Government and the Lagos State Government’s agenda on job creation.” “Strategic partnerships with likeminded organisations such as Tek Experts Nigeria will bring us closer to achieving our goal of providing viable jobs in Lagos State and the country at large,” he said. Tek Experts Nigeria is a key proponent for diversity and inclusion. As well as being an equal opportunities employer, the company has made concerted efforts to help women build a successful career in technology. In 2019, 10 female software engineers from Tek Experts Nigeria completed the Microsoft LEAP Engineering Acceleration Program (LEAP). In the same year, Tek Experts released a White Paper entitled: ‘Achieving Gender balance: Views from across the IT Industry’ which surveyed over 2,000 women working in IT across the globe and analysed issues that were raised by respondents with some of the leading figures for diversity in Nigeria, including the Pearls Africa Foundation and the Women’s Technology Empowerment Center (W.TEC).

Brief:

MTN Nigeria renames virtual top-up channel to Topit JUMOKE AKIYODE-LAWANSON

TN Nigeria’s electronic mobile recharge vouchers through short USSD codes, online banking, Point of Sales (POS) and Automated Teller Machine (ATM) options, formerly known as VTU has been renamed to Topit. The Mobile Network Operator (MNO) recently held a press conference at its head office in Ikoyi Lagos to officially announce the revamp and rename of its virtual top up services. Topit provides an efficient means of recharge for data and airtime distribution across diverse forms of electronic recharge. With improved user experience, MTN says it mitigates against any perceived price distortions and eliminates the irregularities associated with recharge PINs / Vouchers / Cards. With Topit, MTN customers can buy airtime as low as one naira and up to three mil@Businessdayng

lion naira. According to MTN, the service is also beneficial to retailers, trade partners and potential new partners as it provides ease of entry to start a recharge business, while saving costs of warehousing and inventory management. Speaking at the unveil, Adekunle Adebiyi, chief sales and distribution officer, MTN Nigeria, said, “We have launched this platform as part of our continuous drive to make customers’ lives easier, brighter and better. We believe in a modern connected world, one in which our customers can get solutions at the snap of their fingers. This is what Topit delivers. We are excited at the amazing opportunities this platform offers our customers, retailers and trade partners.” The electronic recharge forms include Phoneto-Phone, POS, Bank’s ATM, MTN’s website and MyMTN App. Customers can also recharge via USSD, by dialing *456# or *904#

Tuesday 10 March 2020

BUSINESS DAY

Investments

ENERGY INTELLIGENCE

Market Insight Companies Commodity Tracker Policy

OIL

GAS

PETROCHEMICALS

POWER

Insight

Rystad, Goldman Sach, Citigroup, others slash forecast for oil to prevent an already sizeable inventory accumulation around the world, because of the slump in demand in the coronavirus outbreak. For the third and fourth quarter of 2020, Goldman Sachs now sees Brent Crude averaging $53 a barrel in Q3, down from a previous forecast of $60, and averaging $59 in Q4, down from $65 expected previously.

DIPO OLADEHINDE

ome of the world’s biggest investment and energy intelligence firm are all eating their words and retracting earlier projections for oil market after some of the world’s most powerful oil-producing nations failed to agree on a production cut to cushion the impact of the coronavirus outbreak. Nothing should depress oil markets more than the failure Organisation of Petroleum Exporting Countries (OPEC) and allies members to be cut by an extra 1.5 million barrels per day (bpd) in total until the end of 2020. However, there is also a more worrisome fact. Rystad Norway based, independent energy research company Rystad Energy revised its forecast on Friday, estimating that oil demand growth will come in at 500,000 bpd for the year, down

from 1.1 million bpd that it estimated in February. This is assuming that the Covid-19 epidemic will largely be contained by the end of June, which in turn implies a further downside risk. Rystad sees supply continuing to surge in countries that are not bound by any production quotas – namely in the US, Brazil, Norway, and Guyana. Goldman Sach American multinational investment bank G oldman Sachs slashed again its esti-

mates for 2020, noting that even deeper OPEC+ cuts and central banks’ interventions may not be able to erase the glut amid depressed oil demand and Brent crude could fall to as low as $45 a barrel next month. Goldman Sachs’ cut its 2020 global oil demand growth forecast again to 150,000 bpd, when it had previously forecast growth of 0.55 million bpd, and before that, 1.1 million bpd. According to a Goldman note, OPEC+ cuts may help inventories balance later in 2020, but they will not be able

Citigroup New York based Citigroup slashed its forecasts for commodity prices across the board, with crude oil getting the steepest downgrade, the investment bank said in a note, as carried by Bloomberg. Citigroup reduced its oil price forecasts for three of the quarters this year and doesn’t rule out Brent Crude sliding to as low as $47 a barrel as the bank now sees the impact of the coronavirus on oil demand—and the economy in general—as being more severe than initially thought. Citigroup now sees Brent

Crude averaging $54 a barrel in Q1, down by a massive $15 from the previous forecast of $69. The forecast for WTI Crude prices was slashed to $50 a barrel this quarter, also down by $15 from a previous estimate of $65 per barrel. The bank also cut its estimates for the following two quarters this year, expecting the impact of the coronavirus outbreak to be longer and to linger across the global oil market until the fourth quarter. Citi sees Q2 Brent Crude prices at $50, down from a previous forecast of $68 a barrel. Third-quarter Brent Crude prices are now expected at $53, down from $63 a barrel. For Q4, Citigroup revised up its forecast to $58 from $57 a barrel. Bank of America Merrill Lynch Bank of America Merrill Lynch (BofA) slashed its 2020 oil price forecast for Brent Crude by $8 per barrel. BofA cuts its 2020 average oil price projection for WTI Crude to $49 a barrel and for Brent to $54 per barrel.

US net petroleum exports hits highest levels in February - EIA

he United States was a net exporter of crude oil and petroleum products last month, with the four-week average net imports at a negative 907,000 barrels per day (bpd) in the last week of February, the lowest ‘imports’ level in EIA data dating back to 1973, according to EIA’s weekly data on net imports of crude oil and petroleum products.

Since the start of 2020, the U.S. was a net exporter of crude and petroleum products in each of the weeks in January and February, EIA data shows. The United States exported more crude oil and petroleum products than it imported in September 2019—the first month in which America was a net petroleum exporter since monthly records began in 1973, the U.S. En-

ergy Information Administration (EIA) said at the end of last year. In September 2019, the U.S. exported 89,000 bpd more crude oil and petroleum products than it imported, due to surging U.S. crude oil production and the lifting of export restrictions in 2015, and to continuously growing oil products output and exports, the EIA said in December 2019.

On an annual basis, the United States will become a net oil and oil product exporter this year, thanks to continued growth in production combined with slacker domestic demand, the EIA said in its 2020 Annual Energy Outlook in January. Despite the ‘net petroleum exporter’ status, the U.S. continues to be a net importer of crude oil—it continues to import more vol-

umes of crude oil than it exports. In November 2019, the latest monthly data, America imported 5.8 million bpd of crude oil and exported 3.0 million bpd of crude, the EIA said last month. Moreover, despite the fact that the United States is now a net petroleum exporter as a whole, most regions other than the U.S. Gulf Coast region remain net petroleum importers, the EIA noted.

Tuesday 10 March 2020

BUSINESS DAY

ENERGY INTELLIGENCE Market

Oil price free-fall presents Nigeria with mixed fortunes STEPHEN ONYEKWELU

il price has lost more than a one-third of its value sparking fears of a crash similar to the one of 2014 that consequently led Nigeria into a recession in 2016. The three-year pact between the Organisation of Petroleum Exporting Countries and Russia ended in acrimony on March 06 after Moscow refused to support deeper oil cuts to cope with the outbreak of coronavirus and ramped up production by shale oil producers in the United States of America are factors which have led to oil price slump to a four year low. People familiar with the matter said Russia believes North American shale producers would reap the benefits from the new attempt to shore up prices and has decided to back out of discussion for deeper production cuts in another stand-off with US shale as happened in 2014. This has led to Saudi Arabia’s unwillingness to take on more cuts without Russia a partner. “Of course, if there is no agreement, Saudi Arabia will produce whatever the customer asks for,” said one OPEC delegate. When

asked if countries were entering into a fight over market share, he said: “It could be.” Brent crude, the international benchmark for oil prices tumbled to $41.28 dollars per barrel, the lowest since 2016 according to oil price live updates by oilprice. com. This puts oil-dependent countries such as Nigeria and many oil firms under weighty strain and economies around to world respond to the coronavirus outbreak. Nigeria’s economy faces

a dire situation. In the 2020 budget benchmark, Africa’s biggest oil producer assumed an oil price benchmark of US$57. This was factored into Nigeria’s revenue projections of N8.15 trillion to which oil was expected to contribute about a quarter – that is N 2.64 trillion. Additionally, a daily production of 2.18 million barrels of oil a day was part of the assumptions. With slowing demand for oil which is a proxy for slowing eco-

nomic activities in China, Nigeria has been exposed to external shocks it has little control over and may face sever revenue shortfalls. When the price of oil fell from highs of about $112 a barrel in 2014 to below $50 in 2015, as is the case now, Nigeria’s economy went into a tailspin and then a recession in 2016. This was because crude oil sales account for about 70 percent of government income and about 90 percent of foreign exchange earnings.

Critics argued that government policies made a bad situation even worse in 2016. A fall in oil prices triggers shortfalls in public revenue which often forces the Central Bank of Nigeria into applying monetary policies that limit the demand and supply functions of markets, such as interventions that defend the naira to avoid currency devaluation. Two recent reports by BusinessDay last week one on March 03 “Nigeria is missing opportunities to cut petrol subsidy as oil prices decline” and the other on March 06 “Petrol landing cost at 2-year low gives Nigeria leeway out of subsidy” have suggested that the slumping oil price is an opportunity for Nigeria to rid itself of subsidies in the domestic oil market which have continued to hurt the country’s economy. The global slide in oil prices is bad news for the government because it would lose a sizeable fraction of estimated oil revenue as a result but this also means a thinner petrol subsidy bill at home. Falling oil price puts pressure on the naira and experts have suggested cutting subsidies on power and petrol to prevent heavy consequences on the economy, the advantages of which are not felt low income earners.

Regulation

Licenses for private refineries expire 2020, only a handful will reach commissioning ISAAC ANYAOGU

he Federal Government has issued 45 licenses to private companies for the construction of refineries including modular refineries and as the licenses expire this year, many will fail to reach commissioning, analysis show. All the licenses issued till date has a combined capacity to refine 2.15million barrels of crude oil a day, slightly lower than Nigeria’s current output, and government officials say, the refineries when completed with turn Nigeria into West Africa’s refining hub and cut billions of naira spent yearly in importing refined products. Waltersmith Refining and Petrochemicals modular refinery with a capacity to refine 5000 barrels per day with a key equity investment from the Nigerian Content Development and Monitoring Board (NCDMB) is expected to be completed in May 2020. The construction of the 7,000bpsd OPAC Refinery in Umusetti, Delta State, and 10,000

bpsd Niger Delta Petroleum Resources Refinery expansion project in Ogbelle, Rivers State, seem to be nearing completion but these are the exceptions. According to document obtained from the Department of Petroleum Resources website, seven of the companies granted licenses are expected to break ground before they expire. Our www.businessday.ng

analysis show that perhaps three or four may succeed before the year runs out. Eighteen of the licenses were classified as active but analysis show that barely five are can boost of any real work on site. The 650,000 barrels a day Dangote Refinery is included in this category but even that will not be ready this year as completion

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date has been moved to 2021. Yet, already, 13 of these licenses have expired already and many are still classified as sourcing for funds. Licenses to Establish issued to Eko Petrochemicals for a 20,000 capacity modular refinery and 24,000 refinery capacity for Kainji Resources have expired since 2017 even if they have @Businessdayng

FEED approval from the DPR. Fifteen licences issued to various companies including Sifax, Grifon, Aiteo, Masters Energy and others have since expired but the dream of a completed refinery is yet to be realised. Yet these refineries do not look like they will come on stream this year implying that Nigeria will still spend over N700million a day to import petrol. The NNPC refineries do not fare better. The three refineries lost a total of N123 billion last year, the corporation said in its October operations and financial report. The refineries, which are located in Port Harcourt, Kaduna and Warri, have a combined installed capacity of 445,000 barrels per day but have continued to operate far below the installed capacity. Analysts say that until, Nigeria removes a subsidy on petrol, many of these refineries will not see a path to profitability which will help make case to investors for the critical funds required to complete them.

Tuesday 10 March 2020

BUSINESS DAY

offgrid Business

Cape Verde’s model to rely solely on renewable energy holds lesson for Nigeria DIPO OLADEHINDE

hile the race to rely exclusively on renewable energy heating up around the world, one tiny African nation Cape Verde and not Nigeria is hoping they can lead the charge for the continent. With a population of 548,800 inhabiting 10 islands, the small island archipelago nation off Africa’s northwest coast has set itself a very bold renewable energy target to obtain 100 percent of its electricity from renewable resources by 2025. The Cape Verde islands are looking to wind and solar power to bring down their high energy bills, while at the same time doing something positive for the environment, a development which a public-private partnership is helping make

this a reality. The project under the banner, ‘sustainable energy for all’ is poised to turn Cape Verde into a country that fully depends on renewable energy. Although most of the residents already have access to electricity, but about one-third still rely on firewood and charcoal for

cooking. “We have invested in many renewable projects in Africa, including the Cabeolica Wind Farm in Cape Verde, which won recognition in the International Finance Corporation Emerging Partnerships top ten private-public partnerships in Africa,” Africa

Finance Corporation (AFC) president and CEO Samaila Zubairu said in a statement. According to sources from renewable Africa, “Cape Verde gets up to 78percent of its power from hydroelectricity sources while Wind power and geothermal energy each make up 10percent of the national

grid while the remaining amount is harnessed from biomass and solar.” Like its mainland African neighbours, Cape Verde has a variety of renewable resources and technologies to choose from in order to fully maximise its offgrid potentials . It has wind resources like Morocco, the solar potential of the Sahel, geothermal resources like Kenya, and marine energy comparable to many coastal countries. Also, Cape Verde’s tropical location has good potential for solar photovoltaic (PV) electricity with different energy sources suggesting that the solar PV capacity potential is more than double the currently installed electrical generating capacity. Unlike Cape Verde, Africa’s most populous country needs more than 10 times its current electricity output to generate supply for its 198 million people, nearly half

of whom have no access at all, to achieve this the government must find an efficient way to bring power to rural communities and also help clean up a country with some of the world’s worst urban pollution rates. Nigeria is endowed with huge energy resources, yet it perennially suffers energy poverty. Also, the reliance on fossil fuel to meet Nigeria’s energy need has been attended with many problems such as physical deterioration of energy transmission and distribution facilities, inadequate metering system, and inadequate generation capacity among others. Stakeholders have emphasis that Renewable energy will be key to Nigeria’s economy which needs quick and stable growth over a few decades if it is to create jobs for its 21 million unemployed citizens and lift 87 million people out of extreme poverty.

Comment

Documenting Energy Access in Nigeria Adesoji Adeyemi-Adejolu

igeria is often referred to as the “Giant of Africa” because it is the most populous country in Africa and with her strong economy. Unfortunately, energy access in the country continues to decline especially with the increasing population and her citizens suffer in darkness with little or no access to electricity. It is midnight as I typed this article in my second-floor apartment and predictably there’s no electricity, but the loud and disturbing noise of generator sets all across the street. Even after the Federal Government of Nigeria privatized the power sector, “UP NEPA” still remains a popular chant amongst Nigerians, whenever the DISCOs restore electricity. It has become a tradition in my country that every household and business owner owns a generator set. While the higher-class people in Nigeria own at least two diesel generators, one for main and the other as a backup; the lower class people own smaller petrol generators especially the very popular “I better pass

my neighbor generator”. I live and work in Lagos city, which is among the largest economies in Africa but that doesn’t guarantee me and every other resident access to reliable electricity from the national grid. Imagine what could be the hope of the several millions of people living in Nigeria’s rural communities, who are off the grid. This obviously reflects the dire energy poverty in my country, with a vast majority well over half of the population having no access to the national grid. In the past three years, I had traveled to over ten rural communities across the country, and I was amazed at the level of economic activities in all of these unserved communities, with farming being the most common trade with retailing and hospitality among others. Recently rural electrification is gradually on the increase in Nigeria, with solar mini-grids available in communities like GbamuGbamu, Tungajika, Angwarina, Demshin, Baawa, Bisanti, and many others. The Nigeria Electrification Project (NEP) which is an initiative of Rural Electrification Agency (REA), is private sector driven and seeks

to provide electricity access to households, micro, small and medium enterprises in off-grid communities across the country through renewable power sources. NEP is being implemented by the REA in collaboration with the World Bank. REA is a Federal Government Agency saddled with the responsibility of providing electricity to rural communities in Nigeria. A 24KW PV solar-based mini-grid project was commissioned in October 2015 in Bisanti, and in December 2017, I visited Bisanti alongside other World Bank/REA

Green MiniGrid Africa Summit delegates, on a tour of the solar mini-grid facility and the community. Bisanti is a landlocked community near Bida, located in Katcha Local Government Area of Niger State in Nigeria, with an estimated population of about 2,000 people. Interestingly, I still speak with my friend Bala from Bisanti. He is the local resident who operates and manages the mini-grid site and his service has aided the sustainability of the project. Bisanti residents are part of the very small fraction of people in Nigeria, who

Analysts: Isaac Anyaogu (Team Lead), Stephen Onyekwelu, Dipo Oladehinde

enjoy reliable access to electricity. Ibrahim Musa who runs a mini-supermarket dubbed the “Wallmart of Bisanti” doesn’t have to suffer anymore to operate and maintain his diesel generators. The pace of our development in Nigeria is hindered by the energy poverty we have here in the country. So it’s okay to say, “Energy is Development”. This inspired me to produce an independent documentary project to tell an important story of our energy shift from an impoverished past to a sustainable future.

Through the stories of relevant stakeholders in Nigeria, Beyond The Grid – Nigeria’s Energy Autonomy captures the journey to a decentralized renewable energy future. Following the Nigerian government aim to make reliable electricity available to 90 percent of the population by 2030; with at least a 10 percent share of renewables by 2025, Beyond The Grid follows the deployment of solar mini-grids in un-served rural communities. With innovative ideas and viable technologies accelerating the decentralized renewable energy (DRE) market, Nigeria has an opportunity to look beyond the grid and invest in a faster and sustainable path to energy access. But the question still remains; can Energy Autonomy be the solution to Nigeria’s long-lasting electricity misfortune? The documentary film aims to promote rural electrification projects; influence political manifestos towards energy access; encourage investments in the renewable energy sector and create awareness on decentralized renewable energy. Adesoji Adeyemi-Adejolu is a Documentary Filmmaker based in Lagos.

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email: isaac.anyaogu@businessday.ng, stephen.onyekwelu@businessdayonline.com, oladehinde.oladipo@businessdayonline.com

Tuesday 10 March 2020

BUSINESS DAY

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Tuesday 10 March 2020

BUSINESS DAY

Live @ The Exchanges Investors lost N330bn in one day as oil price shock rattle equities Stories by Iheanyi Nwachukwu

igeria stock investors were caught in web of over N330billion loss on Monday March 9 as investors priced in risk of historic oil price decline. Bank stocks were seemingly of less interest to equity buyers on the Nigeria Stock Exchange (NSE) as seen in early day market rout that took off such huge amount from investors portfolio. P r e s i d e n t Mu h a m m a d u Buhari and officials dealing with government finances met on Monday. Their meeting came amid crashing crude oil price which crashed to $30 per barrel as of Monday. Stock investors had ahead of 9:30am trade opening time

walked into Custom Street, Lagos Nigeria in fears. They were not willing enough to take future risks in local equities as record shock in the oil price continues to rattle markets. The Nigeria’s stock market which began this Monday morning sustains negative trading sentiment amid a fragile macro-economic environment as crude prices continue to slide, coupled with continuous threat posed by the fast spreading Coronavirus across the world. “Sentiments remain weak. Hence, we advmeeting ise investors to trade cautiously, taking positions in fundamentally justified stocks”, said Cordros analysts in their March 9, note to investors. At the close of trading day’s session, the market lost over N330billion. The value of listed stocks decreased to

N13.428trillion from an open level of N13.365trillion. The NSE ASI also came down to 25,647.54 points, down by 2.41 percent. Oil prices suffered an historic collapse overnight after Saudi Arabia shocked the market by launching a price war against onetime ally Russia. US oil prices crashed as much as 34% to a four-year low of $27.34 a barrel as traders brace for Saudi Arabia to flood the market with crude in a bid to recapture market share. Crude was recently trading down 27% to $30.04 a barrel. Brent crude, the global benchmark, plunged 26% to $33.49 a barrel. Both oil contracts are on track for their worst day since 1991. The shock to oil also rattled stock markets, which were already in a panic because of the novel coronavirus outbreak.

L-R: Edward Okolo, acting executive commissioner corporate services, Securities and Exchange Commission; Reginald Karawusa, acting executive commissioner Legal and Enforcement SEC; Becky Adeyemi, Obstetrician Gynaecologist Alliance Hospitals and Services; Mary Uduk, acting director general SEC; Karmell Andzenge, Leadership and Management Consultant and Isyaku Tilde, acting executive commissioner, operations, SEC during 2020 International Women’s Day Celebration in Abuja.

Chams expands frontiers of E- verification, dentification

frontline provider of intelligent business solutions, Chams Plc has continued to grow its business through strategic partnerships and introduction of innovative products and services that are tailored to the Nigerian and African markets. By focusing on the uniqueness of its customers, Chams has created bespoke customer-centric solutions that optimize business processes, particularly in the identity verification space. The company has further s e g m e n t e d i t s i d e nt i t y verification solutions in order to meet specific requirements of its broad customer base. For instance, under Chams’ unique products, customers including individuals, Small and Medium Scale Enterprises

(SMEs) and Governments among others use various services to confirm identity of an employee or bulk verification. The leading identit y management company prides itself in providing customized identity services, particularly for organizations, where updating, or validating the identity of individual’s information against the organization’s customer database is key to maintaining data quality, validity and integrity. According to recent figures released by Nigeria Interbank Settlement Systems (NIBSS), more than 40 million Nigerians now have a Bank Verification Number (BVN). Both NIBSS and the Central Bank of Nigeria (CBN) are working towards increasing this number rapidly to aide financial inclusion for www.businessday.ng

all Nigerians. To compliment these initiatives, Chams has put in place an optimized platform for easier identity verification. Through the new platform, customers gain access to a wide range of digital identity verification services, all through a single platform. This platform is linked to recognized data sources such as the BBN Credit Bureaus and Federal Road Safety Commission (FRSC) and Driver’s Licenses, amongst others. The Group Managing Director, Chams Plc, Gavin Young, stated that : “ An example of an innovative identity verification solution we provide to State Governments, which has made a major difference in improving the lives of State Pensioners, is our pensioner verification app. https://www.facebook.com/businessdayng

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Tuesday 10 March 2020

BUSINESS DAY

INTERVIEW

‘Brand loyalty is built by establishing connections with consumers’ Cheng Fuller is the inaugural marketing vice president of Hubmart Stores, which prides itself as “a deliberate blend of international retail standards beautifully combined with Nigerian heritage”. Fuller, filmmaker, actor, and marketing expert who was instrumental in the rollout of Hubmart, in this interview with Bunmi Bailey, speaks on the marketing landscape in Nigeria and his contributions to its growth.

ow have you been able to change the landscape of marketing in

Nigeria? Over time, I have initiated, preached and proliferated the gospel of “Brand-Consumer community relationship building” as a tool for effective brand marketing, bearing in mind the popular dictum, “people don’t care how much you know, until they know how much you care”. Lasting brand loyalty is built by establishing endless connections with the consumers. That is the overarching philosophy which drove the way I set up and rolled out Hubmart’s marketing efforts at startup and till today. Remember the Hollywood comedy movie – Barbershop? It showed consumers becoming one family with the salon, sharing gossips, solving issues for the shop and their immediate neighbourhood. This is fiction, but it also demonstrated a very important lesson in marketing in today’s harsh macroeconomic environment, “Be your customers’ neighbour”. This philosophy and message is rapidly gaining grounds amongst consumerfacing brands and across the marketing space. What inspired you to go into marketing? My professional journey began in 2004 when I joined KPMG, one of the big four advisory firms. While there, I had extensive hands-on experience managing projects in the private and public sectors in both advisory and execution support roles. During my time at KPMG, I had an epiphany and realized that, “full value in professional services” was not just about optimizing a business’ internal processes, finances and operational efficiencies to help deliver on the brand’s promises to customers”. More was required to complete the value chain. That more being the definition and articulation of what that promise to the customer should be – and design of the road map for communicating same to the customer”. It was this search for the missing piece in the full value chain that drove me to broaden my scope and branch into marketing strategy, brand management and advertising.

economic pressures. Customers are now increasingly seeking bargain opportunities, seeking out cheaper substitutes and reducing rate of consumption of luxury items. For a marketer in this environment, Return on Investment (ROI) on marketing efforts becomes inelastic, consumer buying decisions will be more significantly influenced by Point of Sales (POS) activities when juxtaposed with advertising (ATL) activities. Like I tell people these days, “marketing is most effective on the consumers at the moment of choice”

Roger Delves

Given the current weak economy that Nigeria is experiencing, is advertising still relevant? A report compiled by Brian Wieser, of the WPP Company, estimates that global advertising (excluding U.S. political advertising) will end 2019 with 4.8 percent growth, down from 5.7 percent in 2018. Moreover, it predicts global advertising will decelerate further in 2020 and 2021, coming in at a pace of 3.9 percent and 3.1 percent, respectively. Growth is expected to range between 3 percent and 4 percent through 2024, according to the report. This sluggishness he attributes to the weakening global economy. I stand by this insight but also dare say, this trend will apply to the Nigerian Advertising landscape, but to a lesser extent. Advertising revenues will still grow at a significantly declining rate as a result of our curwww.businessday.ng

rent macroeconomic realities. However, brands will continue to strive to maintain market share, strive to capture more of consumers’ share of wallet. Consequently advertising spend revenues will either inch up or hold steady. Brands will increasingly expect innovative utilization of available ad budgets implying more innovative advertising and marketing efforts going into 2020. What are the challenges that marketers face? In today’s world, our current south-trending macroeconomic environment is putting severe pressures on businesses and consumers concurrently. This has impacted sales for the businesses (via consumers’ declining purchasing power and reduced disposable income) and consumer brand habits (as they now have to adopt belt tightening posture to survive the harsh

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What are the innovative tools needed to attract consumers in this weak economy? Another mantra I preach these days, “Advertising is dead, long live product activation” I counsel brands to increasingly leverage POS activations and big seasonal events to drive consumer capture and brand purchase consideration. Black Friday sales, seasonal discounts are key examples of this. Another good tool brands should increasingly leverage is innovative product placement and tactical brandin-use placements. I have even executed this pro bono for some of the brands I am close and friendly with personally on some of my productions. I am open to doing this for other brands pro bono as well, but on a case by case basis. You recently floated your own production company; why did you decide to start it and how has it been so far? I am a firm believer in the dictum, “Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. After what I consider an illustrious career in consulting, the often much talked about and elusive job contentment did not come, I moved on to Marketing and Advertising, which helped quiet the continual riot and uproar in my spirit about what value given to others was, but it didn’t do it for me. After a period of soul searching and pondering on my one great unfulfilled promise possibly the greatest promise I made to another per@Businessdayng

son – I changed course and took the path which led me to my baby - Pandemonium pictures. In June 2019, she was birthed. Immediately after, the company commenced pre-production on some movie and television projects. This was borne out of the need to rapidly fulfil that promise. Today we have Endlesss, Sting, Secrets reboot and are in pre-production for three other projects. We have set up our independent ad-Backed broadcast platform while partnering with another content streaming service – Moove TV. It’s seemingly the best course of action I took in my life. It has been rewarding, satisfying, peace giving (especially seeing that it has helped me honor that my promise to some extent) and has made work a perpetual vacation for me – of course film making has loads of ups and downs but on the balance of things, I am vexed with myself for not taking this walk earlier in my life. Tell us about the promise you made to your father? “Footprints in the Sand”. That summarises it. I have had a very interesting life, so has my father (God rest his soul). We had the fun times – a few, and walked through hell a lot – this we did together. I lost my beloved mum who died at just 36, lost two younger ones, and fought a lot of battles – health and otherwise. As we came out of the high waters of life to catch our breath, my beloved father (I chose to always refer to him in the present tense – even though he passed on at the young age of 59, he forever lives on for me till date), kept asking one favour of me insistently – “make an impact, touch lives, don’t talk change, be change”. He kept saying a great man leaves people awed in his presence, but a legend leaves generations celebrating his legacy. He shaped my view of reality. Our mortal lives and our concept of time are transient. A dot in the context of eternity. Greatness lasts for a lifetime, but legends span eternity. Making movies, shaping stereotypes and narratives seem to be my tiny step in the direction of fulfilling that promise to my dad. This is why I started tackling topical matters in my productions – Domestic Violence (Endless); Surrogacy (Sting), more on the way.

Tuesday 10 March 2020

BUSINESS DAY

news global oil crisis

Buhari sets up committee over crude price, virus

… as Nigeria’s lip service to diversification shows TONY AILEMEN, Abuja

aced with the reality of several years of lip service to economic diversification, President Muhammadu Buhari on Monday summoned his top economic managers and inaugurated a committee to assess risks to the economy in a seemingly knee-jerk reaction to a looming crisis as oil price slides. Despite decades of mouthing the diversification slogan, Nigeria, Africa’s biggest oil producer, was again caught unawares as price of crude oil in the global market plunged, occasioned by the outbreak of the coronavirus and the Saudi Arabia/Russia tussle which could see price drop to a low of $20 per barrel. The crash in the global prices of crude oil, Nigeria’s main source of budget funding and biggest source of export earnings, from $53 per barrel last week to about $35 per barrel on Monday, is bound to have a telling negative impact on the country’s income and spending plan this year. BusinessDay gathered that the reality of the situation may have compelled President Buhari to summon Zainab Ahmed, minister of finance, budget and national planning; Timipre Sylva, minister of state petroleum resources, and Clement Agba, minister of state, budget and national planning, to find a solution to the crisis that is set to affect the nation’s budget this year. E c o n o m i c e x p e r t s, however, believe that these ad hoc solutions are half-

baked and may not provide the necessary solutions to cushion the effect of the staggering dangers ahead. Ikemesit Effiong, head of research at the SBM, sees the response as “belated”, faulting the absence of adequate buffers in the economy. “That said also, we are seeing a huge budget gap now, and this will mean more borrowing aside the recently approved $22.7bn approved by the Senate,” said Effiong. He noted that all bonds to be floated by the government, which are expected to be benchmarked against oil sales, will be affected by the dwindling oil prices and the country’s debt-to-GDP ratio would increase. Economic experts say the regular attempts by the Central Bank of Nigeria (CBN) to defend the naira would likely crumble on the back of the current situation. Inflation, they say, may also spike, following the new VAT rate, while life will be more difficult in the next few months which will again force consumption to fall. On its part, the government needs to increase spending on infrastructure, reduce spending on consumables, reduce the budget deficit put at N4.3trn in the 2020 budget, experts say. Faced with revenue crunch and increasing debt levels, economists say Nigeria can totally remove the fuel subsidy which was put at N1.1trn last year so that funds can be freed up for infrastructure such as the Mambila power project.

Nigerian stocks roiled as oil price war plunges market by most in 25 months ... banking stocks suffer worst day since 2013 SEGUN ADAMS

igerian stocks on Monday slumped by the most in over two years after top-producer Saudi Arabia started a price war that pushed oil to record-low and triggered fears of a free-fall in the commodity’s value. The main equity gauge fell 2.41 percent – the heaviest decline since a 2.41 percent drop on Feb 13, 2018 – to a year-low of 25,648.61 points, while banking stocks slumped by 8.95 percent, the most since June 2013. “With the wide spread of COVID-19 inducing a fouryear low in global crude oil prices, we believe the dark clouds are gathering,” said Lagos-based Afrinvest in a note to clients. Analysts at the investment bank expect investors

to remain risk-averse towards the equities market in the near term, “although there is headroom for bargain hunting activities due to cheap valuation of stocks and the local bourse relative to peers”, they said. Aderonke Akinsola, banking analyst at Lagos-based Chapel Hill Denham, said investors, lacking patience, can watch the trend before taking position in the market. “There is still a lot of offer in the market for banking stocks,” said Akinsola, adding that the sell-pressure could subside towards the end of the week – especially with positive news on oil, the virus or policies to stimulate the economy and market. Volume and value traded dropped by 49 percent and 57 percent to 185.6m units and N1.8bn each as investors lost N329.4bn on Monday. Only Consolidated Hall-

mark gained in the day, advancing 3.7 percent to 28 kobo per share, while 11 others declined 10 percent. Investor sentiment as measured by market breadth (advance/decline ratio) declined to 0.03x from the 1.2x recorded in the previous trading session as one stock advanced relative to the 38 that declined, said Afrinvest. Access Bank, Conoil, United Capital, Unilever, Cornerstone Insurance, GTBank, Fidelity Bank, Oando and Stanbic IBTC were among the stocks that lost 10 percent each. Big lenders like Zenith, First Bank, and UBA were caught in the onslaught. Stocks saw a disappointing Monday, with five sector indices tracked by BusinessDay in the red, due to the fallout of an oil war by Saudi Arabia that caused oil price to fall by the most in over two decades to the lowest level

since 2017. Weighed by the slowing demand for oil due to the coronavirus outbreak, OPEC had sought to balance price by taking 1.5 million barrels per day out of the market. The cartel planned to take 1 million per day while Russia and the group’s other allies contribute the other 500,000 per day. But lack of cooperation from Russia, an OPEC ally, saw Saudi Arabia initiate a price war, ramping up output and selling oil at a record discount causing the price to fall to around $35 per barrel over the weekend. Brent futures slightly improved to $37.41 per barrel in late trade in London on Monday. The current price puts the stability of the naira in jeopardy and echoes the 2016 decline which threw Nigeria to its first recession in 25 years.

L-R: Asue Ighodalo, founding partner, Banwo and Ighodalo; Oscar Onyema, CEO, Nigerian Stock Exchange; Godwin Obaseki, governor, Edo State, and Philip Shaibu, deputy governor, during a closing gong ceremony at the exchange in Lagos, yesterday.

CBN may increase yield to evade capital flight as oil price crashes … Analysts differ on currency devaluation …OMO yield rise by 165bps to 14.70% HOPE MOSES-ASHIKE

he Central Bank of Nigeria (CBN) will have to increase the Open Market Operation (OMO) yield to sustain Foreign Portfolio Investment (FPIs) in the face of crash in the price of oil, Nigeria’s mono-product, according to analysts polled by BusinessDay. Following the outbreak of coronavirus in China, the price of Brent crude fell to

as low as $35 per barrel on Monday, from the peak of $68/barrel in January 2020. The current price is below Nigerian government’s $57/b budget benchmark for the 2020 fiscal year. Oil revenue accounts for the largest chunk of the country’s forex inflow. Aggregate foreign exchange inflow into the economy amounted to $36.36 billion in the fourth quarter of 2019, according to the CBN’s economic report for that quarter. www.businessday.ng

“The immediate concern of the CBN would be how to sustain/keep the FPIs from capital flight as the current reserves level might not have enough buffer to withstand this. This might include increase in yield to reflect the current risk,” said Akintunde Olusegun, financial market analyst at Polaris Bank Limited. Olusegun said the apex bank has consistently maintained it will not devalue the currency, even though cur-

rent realities that are beyond the control of the CBN would further fuel speculation of devaluation. “I don’t see the apex bank opting for that option in the immediate term. I expect them to throw in other measures (orthodox and unorthodox) aimed at defending the local currency. I see devaluation as a worst case for the CBN,” Olusegun said. In the OMO bills market on Monday, the bearish sentiment was sustained as the

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average OMO yields increased by 165 basis points to 14.70 percent compared with the last close of 13.05 percent on Friday. A report by FSDH Research shows that selling pressure was witnessed across short, medium, and long tenor maturities, with average yields widening by 52 basis points, 77bpd, and 237bps, respectively. Yields on 11 bills fell, with the 27-August-20 maturity bill recording the highest yield decline of 2bps, while @Businessdayng

yields on 28 bills advanced with the 8-Dec-20 maturity bill registering the highest yield increase of 416 basis points. The impact of the declining oil price due to the COVID-19 outbreak is adding downward pressure on the external reserves. Nigeria’s gross official reserves have declined by $1.71 billion to $36.30 billion in February 2020 and down to $36.22 billion as at March 5, 2020. This was the 9th successive monthly decline.

Tuesday 10 March 2020

BUSINESS DAY

news

Falsehood on social media is an epidemic like coronavirus, says sponsor of anti-social media bill Solomon Ayado, Abuja

enator representing Niger East, Mohammed Sani Musa, who is sponsoring the anti-social media bill in the Senate says falsehood and information manipulations on the internet is not just a virus but an epidemic like the coronavirus. Musa said the ugly trend require every urgent legislation to fight against, ensure control and regulation of the use of social media so as not to jeopardise national growth. According to Musa, the bill is not intended to infringe on the fundamental human rights of the citizenry but to eradicate propagation of falsehood as enshrined in the Constitution. The senator stated this in Abuja on Monday during a public hearing on the anti-social media bill, tagged “Protection from Internet Falsehood and Manipulations Bill 2019’’. The bill was first introduced by the Senate of the Federal Republic of Nigeria on November 5, 2019, to criminalise the use of the social media in peddling false or malicious information and to punish offenders. However, Musa said if the

bill finally passed through and assented, it would institutionalise a framework on the use of internet for information dissemination. He said the bill was not plagiarised as alleged in certain quarters. “The falsehood and information manipulations on the internet are not just a virus but haves become an epidemic like the coronavirus the entire world is fighting to cure. “We are aware of Section 39(1) of the Constitution, which stipulates that every person shall be entitled to freedom of expression without interference. “The bill is not to infringe fundamental human rights but it is as enshrined in the Constitution. I will continue to push on grounds why Nigeria needs to enact the anti-social media bill. “Nobody is going to block people from the use of social media but you must be in line; nobody is saying you cannot criticise government but you must not propagate falsehood; This is what this bill intends. “A lot of people have gotten married through the social media and it is one of the many benefits of the social media, but information manipulation and falsehood can collapse a nation and the globe in general,” he said.

MDAs refusing to pay 7.5% for contracts awarded at 5% - FIRS James Kwen, Abuja

he Federal Inland Revenue Service (FIRS) has said some Government Ministries, Departments and Agencies (MDAs) are insisting that the contracts they awarded were based on the old 5 percent VAT rate and therefore cannot pay 7.5 percent at the point of completion. FIRS executive chairman, Mohammed Nami, who disclosed this Monday at a meeting with the James Faleke-led House of Representatives Committee on Finance, also said some business premises in the country were resisting efforts by the Service to deploy technology in the collection of government revenue by connecting them to a common server where it could monitor their transactions, as it was done all over the world. Nami accused some multinational companies operating

in the country of not paying the required tax to the government as they fake the issue of pioneer status to get tax exemption for a period of five years instead of the three years contained in the laws. According to Nami, the FIRS is seeking the support of the National Assembly to amend the laws dealing with pioneer status for companies, insisting that several companies in the country were abusing the law and getting undeserved tax waivers. He said FIRS had sent an executive bill to President Muhammadu Buhari through the office of the Attorney General of the Federation to allow the agency to deploy technology in generating revenue to enable it to raise huge revenue for the government. Nami decried the problem of revenue leakages which has made Nigeria, though the number one economy in Africa, to rank far behind South Africa in terms of tax- --to GDP,

explaining that while tax to GDP in Nigeria stands at about 6.3 percent, tax to GDP in South Africa is 27 percent, and that Nigeria’s tax rate stands as the lowest in Africa. The FIRS chairman said as a result of these leakages, the service is was not able to generate revenue for the government to fund the budget as several Nigerians who are supposed to pay tax in the country were avoiding it. He said private companies recruited by the FIRS to help collect revenue on its behalf were poorly remunerated as they are entitled only to 1 percent of the amount they collect, which may not be enough to offset their expenses, hence some of the tax consultants resort to underhand dealings, negotiating with taxpayers on reducing their declaration so that they can get more money to off et their expenses. Nami also lamented the underpayment of revenue in the oil and gas sector and some

multinationals who hide under the pioneer status clause in the laws to evade paying taxes, adding that while the law allowed for a three year tax holiday based on the pioneer status, these companies now resort to retooling the factories and apply for another two years tax holiday. He disclosed that FIRS was working on taxing companies with significant economic presence in the country that are currently not paying tax such as Google, Ali Baba, among others through which internet business is being carried out. The FIRS boss also disclosed that since the Finance Act has given the FIRS the express power to collect stamp duty, it intends to deploy technology in carrying out the function, adding that it is seeking to connect the money deposit banks, the Central Bank of Nigeria with technology so that the 50 kobo stamp duty will drop immediately into government account.

Minister decries poor agric growth despite interventions, investments … commends CBN, but admits fiscal authorities have failed

Cynthia Egboboh, Abuja

inister of agriculture and rural development, Muhammad Sabo Nanono, on Monday decried the poor growth in the agriculture sector despite notable interventions, particularly coming from the Central Bank of Nigeria (CBN). The minister acknowledged that in the last five years, only the CBN through its interventions had vigorously supported agriculture, admitting that the fiscal authorities, which he is part of, had failed that all important sector. “We need to do more on the fiscal side,” he stated, speaking at the senior policy seminar of the African Economic Research Consortium (AERC), in Abuja. Despite its critical importance in terms of jobs and FX earnings, Nigeria’s agriculture only grew by 1.79 percent in Q2, 2019, even though it went up to 2.28% in Q3 and then to 2.31% in Q4. “The Nigeria agricultural sector in recent past has attracted several influx of investment as well as the CBN intervention, but we have not been able to fully tap and make optimum use of these investments. Our markets are disorganised, we still have poor extension workers as well as the issue of logistics, we need to create mobility for goods and services,” the minister

stated. Emphasising that the potential of the sector has not been adequately harnessed, the minister said the country had up to 92 million hectares of arable land but had only been able to cultivate about 4 million hectares due to continued old method of farming, as against mechanisation. “There is no way the sector can record substantial improvement without mechanisation. At seven tractors per 100 square kilometres of land, Nigeria is still far from reaching its target of food security as it currently needs 100-200 tractors per 100 square kilometres of land,” he said. Developing the sector is critical to addressing the issues of unemployment and malnutrition in Nigeria, as the sector holds the potential to create jobs through its various value chains, he said. CBN governor, Godwin Emefiele, said Africa was not winning the war against acute hunger and malnutrition as food insecurity and malnutrition had continued to plague the lives of millions across the continent. Represented by Isaac Okorafor, director of corporate communications, Emefiele noted that according to the 2019 Global Report on Food Crises, Africa remained disproportionally affected by food insecurity with more than half of the global 113 million acutely malnourished. www.businessday.ng

L-R: Bukola Odunlami, programmes manager, health team, Pistis Foundation; Adenike Dosunmu, medical team member, Pistis Foundation; Leonard F. Thomas, general manager, Pistis Foundation; Ibijoke Sanwo-Olu, first lady, Lagos State; Doyin Femi-Johnson, board member, Pistis Foundation, and Banke Odunsi, medical team member, Pistis Foundation, at the presentation of the Ubomi 1.0 Medical and Surgical Outreach Report organised by Pistis Foundation to the First Lady of Lagos State.

Second Coronavirus case was locally transmitted in Ogun – minister … as search continues for 2 on-board Turkish Airline IDRIS UMAR MOMOH, CHURCHILL OKORO, Benin, Godsgift Onyedinefu Abuja, & Obokoh Anthonia, Lagos

inister of health, Osagie Ehanire, has confirmed a fresh coronavirus case in Nigeria, saying the person who tested positive on March 8 was not an imported case but an Ogun State contact of the Italian who brought in the virus, and was one of the 40 persons in isolation being closely monitored. The Nigeria Centre for Disease Control (NCDC) on Monday morning announced the second case of Covid-19 (Coronavirus) in Nigeria. The minister, who also announced the new case at a briefing at University of Benin Teaching Hospital (UBTH), Benin City, the Edo State capital,

explained that contact tracing and monitoring in respect of the coronavirus index case presently receiving treatment in Logos had been diligently and conscientiously pursued since February 27, when the case was first diagnosed. Ehanire noted that there were 40 persons in Ogun and 20 in Lagos under isolation and had remained free of any symptoms since. “Nevertheless, the Federal Ministry of Heath following best practice decided to test these persons for possible presence of coronavirus in their systems. On the 8th of Mach, scientists confirmed the presence of coronavirus in one of the contacts. “It is my duty therefore to announce a new case of coronavirus disease (COVID-19 in Nigeria. The newly confirmed case is an Ogun State contact of the index case. But he has no

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significant clinical symptoms. This brings the total number of confirmed cases in Nigeria today to two,” the minister said. The minister also said the first case, an Italian businessman who had flown into the country through Turkish Airlines presently does not have any cynical symptoms and is in care of the Infectious Disease Hospital, Yaba, Lagos State. He added that other contacts of the index case in Ogun and Lagos would remain in isolation and tests would be carried out on those not yet tested, including some in other states. He further informed that a team of researchers from various institutions in Nigeria led by top scientists from the Nigeria Institute of Medical Research (NIMR) Lagos combined their efforts to successfully perform the genome sequencing of the coronavi@Businessdayng

rus strain that the index case brought to Nigeria and proved it to be a match with the virus circulating in Italy and Wuhan. Meanwhile, speaking at a press conference to give update on coronavirus, the commissioner for health, Lagos State, Akin Abayomi, said the two individuals who had close contact with the Italian man in the Turkish Airline with Number TK625 had remain unreachable despite all efforts. “There are two passengers on that Turkish Airline, which had close contact with index case on the 24th of February, the two individuals with the name Enweluntan Godfrey (male) and Salami Abiodun Sadeeq (male) had been unreachable despite several efforts as a result of wrong information on their forms. We will like to reach out to the media and general public to be of assistance in looking for them.”

Tuesday 10 March 2020

BUSINESS DAY

news

History on playback as Sanusi deposed... Continued from page 1

of Kano State, not only

L-R: Sonny Echono, permanent secretary, Federal Ministry of Education; Chukwuemeka Nwajiuba, minister of state for education, and Adamu Adamu, minister of education, during the 2020 Commonwealth Day celebration in Abuja, yesterday. NAN

FG faces oil slump with all indicators worse ... Continued from page 1

must take to calm the markets this time will be much more profound since sufficient buffers don’t exist,” Rewane who is also a member of the Presidential economic advisory council said. Nigeria survived the 2008 global recession thanks to sufficient buffers in the form of external reserves worth $62 billion and excess crude savings of $20 billion. In 2008, Nigeria also owed $3.7 billion in external debt and inflation rate was 11.58 percent. The exchange rate was also N117 per dollar. The same indicators are almost unrecognisable today. External debt for one has surged 627 percent to $26.9 billion as at September 2019, according to data by the Debt Management Office (DMO). External reserves have nearly halved to $36 billion and excess crude savings are 90 percent depleted to below $2 billion (including the funds under management by the NSIA). Total government earnings have also slumped three-fold to $17.9 billion, according to Central Bank of Nigeria (CBN) data. Inflation rate is also higher today at 12.13 percent while the exchange rate has weakened to N306 or N366 depending on which market is being tracked whether it’s the CBN official window or the Investors and Exporters window. The stock market’s valuation is also down from $48 billion in 2008 to $42 billion as at March 9, 2020. “The indicators clearly show we are not anywhere prepared for an oil dip of this magnitude,” said Kyari Bukar, former chairman of private sector advocacy group, Nigerian Economic Summit Group (NESG). “If Nigeria’s fiscal position wasn’t already precarious enough, this makes it

ever more pronounced,” Bukar added. Nigeria’s fiscal weakness and external vulnerabilities were the deciding factors when the International Monetary Fund (IMF) downgraded the country’s economic growth forecast to 2 percent from 2.5 percent in February. “External vulnerabilities are increasing, reflecting a higher current account deficit and declining reserves that remain highly vulnerable to capital flow reversals,” said Amine Mati, a Senior Resident Representative and Mission Chief for Nigeria at the IMF. “Under current policies, the outlook is challenging. Inflation is expected to pick up, while deteriorating terms of trade and capital outflows will weaken the country’s external position,” the IMF said even before the coronavirus outbreak and Saudi Arabia’s oil price war sent crude tumbling to historic lows. Oil’s drastic dip has sparked the biggest stock market sell-off since the financial crisis in 2008. Shares around the world faced one of their worst day Monday with the dramatic falls leading to the day being dubbed “Black Monday”. London’s index of top shares ended the day almost 8 percent lower, with some £125bn wiped off the value of major UK firms. Similar falls took place across the US, Europe and Asia as a row between Russia and Saudi Arabia saw oil prices plunge. Nigerian stocks also fell by the most in 25 months Monday while Yields on the country’s 2049 Eurobonds climbed 143 basis points to 10.18 percent, the highest on record, while the naira depreciated by 13bps to 366.71/US$ at the I & E window but remained flat at 360/US$ in the parallel www.businessday.ng

market. Nigerian President Muhammadu Buhari set up a committee Monday that featured the minister of finance as well as the Central Bank governor Monday to look into the impact of the coronavirus outbreak and oil downturn on the economy. Further clarifications on the decision made by the committee will be communicated in the coming days, according to Zainab Ahmed, the minister of finance. Nigeria must come up with a strategy to deal with the imminent financial crisis at a time when investors are betting on a naira devaluation. The central bank’s reserves have decreased by 20 percent in the past two years to the lowest since November 2017, and may soon reach the $30 billion threshold set by CBN Governor Godwin Emefiele for the country to consider a devaluation, Jason Daw and Phoenix Kalen, strategists at Paris-based SocGen, wrote in note on Monday. The central bank may start adjusting currency policy before it reaches that point, they said. Naira fundamentals are on an unsustainable trajectory and under current external conditions, especially lower oil prices, the risk of a devaluation is “very elevated,” the SocGen strategists wrote. “The combination of a current-account deficit -- previously due to strong imports but now being compounded by weak exports -- portfolio outflows and lower oil prices will continue to deplete FX reserves and pressure the naira.” Afrinvest advices a gradual adjustment of the currency that would better help the economy adjust to the current shocks and support government revenues. The analysts say a 12-month forward rate suggests a currency value of N408.94/$ and “using the long-term Real Effective Exchange Rate or REER

equilibrium of Nigeria, we forecast a similar 10.0%15.0% adjustment,” they said in a note to clients Monday. Meanwhile, currencies of global oil producers dropped to uncomfortable lows. The Russian Rubble fell 8.24 percent against to trade against the green back at 74.2937 a unit. Big oil producer, Venezuela saw its inflationstricken Bolivar Sober sell for 0.04 percent higher at 73,132.6172 to one dollar. United States dollar also climbed 0.13 percent against the Saudi Riyal to trade at 3.7581. Similarly, Brazil’s Real weakened Monday to sell higher at 4.7608, while Kuwait’s Dinar depreciated marginally against the dollars to 3.2788. US dollar also gained 0.5 percent on the Egyptian pound to sell for 15.7150 a unit, as oil producers watched Saudi Arabia sell its oil at a discount in a bid to force Russia back to the negotiation table for the cartel’s biggest production cut since 2008. Most oil producers saw their currencies fall, the Angolan Kwanza to 488.0425 while the Iraqi Dinar remained flat at 1,182.8718. “For Nigeria, pressure on the currency amid slower dollar inflow would be on the front burner as the ability of the Central Bank of Nigeria to support the naira with its dwindling foreign exchange reserve comes into question,” one economist who did not want to be quoted said. The buffer has declined since the start of the year to only about $6bn above the apex bank’s minimum threshold. Last month, Bloomberg polled more than a dozen analysts, fund managers and economists in Nigeria and abroad who said a devaluation of the naira is imminent at most by 2021.

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dethroned the emir, a former governor of the Central Bank of Nigeria (CBN), but also got him arrested and exiled him to Nasarawa State, where he is expected to spend the rest of his life in asylum. In his stead, Aminu Bayero, son of the late Emir Ado Bayero, was appointed as the new emir. The Kano State government said it dethroned Sanusi because of insubordination. The state government had earlier created four new emirates in Bichi, Rano, Karaye and Gaya, each with a first-class emir, in what many commentators saw as Ganduje’s attempt to whittle down Sanusi’s influence in the state for being “too vocal”, especially in his criticism of the governor. Until then, the Emir of Kano was the only first-class emir in the state. Sanusi was appointed the 14th Emir of Kano in 2014 after his suspension from office as the governor of the CBN. He is the grandson of Muhammadu Sanusi I, the 11th emir of Kano, who was deposed in 1963 after a disagreement with Ahmadu Bello, the Sardauna of Sokoto and the then premier of Northern Region. Kano had maintained single rulership since the establishment of the Sokoto Caliphate in 1804. In 2017, the Kano State House of Assembly set up an eight-man ad-hoc committee to investigate an allegation of fraud levelled against Sanusi. He was accused of mismanaging N4 billion of the emirate’s funds. The emir, however, denied the allegation. The probe was suspended after Governor Ganduje forwarded a letter to the lawmakers. Those who had followed the rancorous relationship between Ganduje and Sanusi said the development was not surprising. Former President Olusegun Obasanjo described the dethronement as “sad and good news”. In a letter addressed to Sanusi as “Your Royal Highness and Brother”, Obasanjo said Sanusi’s removal was sad because it was undeserved, but good because the former emir had “paid the price”. He did not elaborate. “My prayer is that God should give you the fortitude and courage to continue on the path that you have chosen for yourself in the best interest of our country and humanity,” Obasanjo wrote. Balarabe Musa, a former Second Republic governor of the Old Kaduna State, told BusinessDay, “I am not surprised; I saw it coming. But I am indifferent about all that happened today (Monday). Personally, what I am after is that what has been done today by the governor should be within the law; it is the law that should be respected and not the governor of Kano State.” Sanni Yabagi, national chairman of the Action Democratic Party @Businessdayng

(ADP), condemned the action, saying it was not done in the interest of the masses but to satisfy a few individuals. He described Governor Ganduje’s action as authoritarian and undemocratic. “I reject the decision personally and I would not support such action that is against the people. Such action is at the detriment of the people; it is a sign of the highhandedness of the APC government. It is a sad development for the country,” Yabagi said. “Democracy is elastic and allows for dialogue; it must not be to upset the people’s will and affect social cohesion. We are not in a military regime,” he said. Ayo Adebanjo, a leader of Afenifere, a pan-Yoruba socio-cultural organisation, described the action as dictatorial and undemocratic. “Sanusi’s dethronement is dictatorial. We are not under military regime. What has he done? It further shows the dictatorial tendencies of this government and the APC,” Adebanjo said. Guy Ikokwu, a Second Republic politician, said although Governor Ganduje had no moral high ground to dethrone Emir Sanusi, given swelling allegations against him (the governor), it was not the first time dethronement and banishment of an emir was taking place in the north. “I do not need to comment so much on the drama in Kano. They know themselves so very much. What happened in Kano has happened before. What I think should bother us as Nigerians is that our beloved country is at the verge of sinking. Whether Christian or Moslem, we must wake up to the present realities,” said Ikokwu, who is also a member of the Ime-Obi (inner caucus) of Ohanaeze Ndigbo, the apex Igbo socio-cultural group. “Nigeria should return to good governance, security of lives and property, and again to the secularity of the nation. There is the urgent need to absolutely cancel the 1999 Constitution which has created a lot of problems for us,” he said. Ebenezer Bapatope, a former minister of transport and chieftain of the People’s Democratic Party (PDP), said he would not want to escalate the matter, but to rather advise that there should be an amicable settlement of the issue. “I know there has been a crisis between Ganduje and Sanusi; I do not want to escalate this. What Ganduje has done is unnecessary. They have to give peace a chance,” Babatope said. A prominent politician and former minister in from North East, who craved anonymity, said, “I come from Adamawa which is about 400 miles away from Kano. People in Kano know what they want. So, it is not good for me to begin to run commentary on the issue. If you talk too much or too fast, you could regret it later; so, it is better for me to exercise caution.”

Tuesday 10 March 2020

BUSINESS DAY

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Tuesday 10 March 2020

BUSINESS DAY

news Seize opportunity of lower oil prices to deregulate sector - stakeholders OLUSOLA BELLO

takeholders in the Nigerian downstream sector of the oil and gas industry have asked the Federal Government to capitalise on the crashing oil prices and deregulate the downstream sector of the industry. They say the crashing prices will translate in the reduction in the landing cost of petrol, which is currently put at N142, thereby giving the government the breathing space to shed off the burden of subsidy. The Major Oil Marketers Association of Nigeria (MAMON) has said they hope the government would seize the opportunities of the lower oil prices occasioned by Coronavirus to deregulate the

downstream sector of the industry and save itself of the humongous amount of subsidy payment it is using to support Premium Motor Spirit or petrol. According to MAMON, the landing cost of petrol today is about N142 per litre, which is much lower than what it used to be. This situation it says gives the unique opportunity to remove the whole subsidy business. Olatuni Oyebanji, chairman of MOMAN, says a similar situation like this happened in 2016, when the price of oil went to $40 per barrels but the country did not seize the opportunity, but now is another period the government can take advantage of this and see what it can do. Also, Muda Yusuf, directorgeneral, Lagos Chambers of Commerce (LCCI), notes

that deregulation would be a good idea. Diran Fawibe, chairman/ chief executive, International Energy Services Limited/Doris joint venture, states that deregulation is good idea but cannot happen immediately because stakeholder will have to watch the market and see if the downward trend continues unabated, then the government may start to think of deregulations. “There must be a gestation period because the current situation cannot translate into lower prices immediately. If the situation persists at the international level and it affects landing cost then it would be proper for the government to deregulate,” he says. Last week Thursday, OPEC pushed for crude output cut between OPEC and its allies – a

group known as OPEC+ - to be cut by an extra 1.5 million barrels per day (bpd) in total until the end of 2020. The call came ahead of an OPEC+ meeting scheduled for Friday in Vienna. The non-OPEC states were expected to contribute 500,000bpd to the overall extra cut, OPEC ministers said. But Russia and Kazakhstan, both members of OPEC+, said they had not yet agreed to the deeper cut, raising the risk of a collapse in cooperation that has propped up crude prices since 2016. This has led to the oil prices falling by as much as 25 percent by Monday morning, resulting in crude price falling from $45 a barrel to $36 per barrel. There are even fears that the price might still go down to as low as $20 per barrel in future if care is not taking.

Patrick Akinwuntan (2nd l), managing director, Ecobank Nigeria, with female staff Ayobanjo Oladuni; Ifeoma Ezeibenne, and Bose Adeoye, all of Ecobank Nigeria, during the bank’s commemoration of this year’s International Women’s Day (IWD) at the bank’s head office in Lagos.

We’re acquiring more equipment to deal with port congestion — APM Terminals AMAKA ANAGOR-EWUZIE

anagement of APM Terminals Apapa said on Monday that it had placed orders for more equipment to cope with the significant growth in the volume of cargo at the Lagos Port. This clarification is coming on the heels of a media report that the Nigerian Ports Authority (NPA) had issued a 30-day ultimatum to the terminal operator to address alleged lapses in its operations, which has reportedly resulted in port congestion. The ultimatum, which was reportedly given to the company last month, will expire this week. Speaking on the development, Martin Jacob, managing director of APM Terminals Apapa, attributed the growth in volume to conducive economic environment coupled with the closure of land border with Benin Republic. Jacob stated that Lagos ports witnessed a spike in volume as cargo, which hitherto used to go to Cotonou now came through Nigerian ports, with periods such as October witnessing up to

50 percent year-on-year growth in import volume. “APM Terminals Apapa has expedited the investment in additional equipment, with the first batch of three cranes already in operation after arriving within the last month. A further five cranes are scheduled to arrive within the next few weeks to not only handle the oceangoing vessels but also inject much needed capacity for the needed barging,” he stated. According to Jacob, the current investment phase, which will cover yard expansion apart from equipment, will cost the terminal operator about N65 billion. “APM Terminals Apapa is committed to delivering the Nigeria Ports Authority’s vision in enhancing the country’s maritime sector,” he assured. Recall that in 2006, APM Terminals Apapa was awarded the concession to manage, operate and develop the Apapa container terminal at the Lagos Port Complex, after the Federal Government concessioned Nigerian ports with the purpose of improving port services through private investment and expertise. www.businessday.ng

Labour law review: Why Reps should align with social partners - NECA JOSHUA BASSEY

igeria Employers Consultative Association (NECA) has advised the House of Representatives to carry along and collate inputs from all social partners in their quest to criminalise labour casualisation at workplaces in Nigeria. Labour casualisation describes a situation where employees in formal employment are denied negotiated condition of service and associated rights. The House of Representatives is currently seeking to introduce a bill into the Nigerian extant labour laws to criminalise casualisation as well as regulate the practice of outsourcing. Speaking on the development, Timothy Olawale, director-general, NECA, explained that while employers of labour were not against casualisation, it was important the lawmakers work with all social partners in the labour industry. “Over the years, NECA had frowned at casualisation

of labour, as it is against the principles of decent work and international best practices of the International Labour Organisation (ILO). “We, in fact, frown at all practices that tend to treat labour as a commodity to be exploited. However, in as much as NECA appreciates the concerns of the lawmakers in ensuring decent work for all Nigerians, the bill are, however, premature as ILO standards required input of all social partners (government, labour and employers) on any labour legislation,” Olawale said. Olawale said the move by House of Reps was also coming at a time the social partners were reviewing the entire labour laws in the country and had just concluded a threeday retreat, chaired by Festus Keyamo, minister of state for labour and employment. According to Olawale, there is the need for a harmonised labour law, adding that at the recent social partners’ retreat in Lagos, a lot of the areas in the labour laws that amendment were deliberated upon.

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Edo 15-man delegation joins discourse on ‘smart cities’ at global forum in Abu Dhabi

do State commissioner for physical planning and urban development, Erimona Edorodion Oye, and the minority leader, Nigerian Youth Parliament, Daniel Uwadia, were among the 15-man delegation from Edo State who attended the World Urban Forum (WUF10) in Abu Dhabi, United Arab Emirates (UAE) to chart paths for the implementation of the Sustainable Development Goals (SDGs) and the New Urban Agenda. The event in its tenth edition was organised by the United Nations (UN) Habitat, in partnership with the UAE government, to address the issue of rapid urbanisation and its impact on communities, cities, economies, climate and policies. In a statement, Uwadia said the five-day event, which held at the Abu Dhabi National Exhibitions Company (ADNEC), had the theme “Cities of Opportunities: Connecting Culture and Innovation”. Others are permanent secretary, Ministry of Physical Planning and Urban Development, Chris Abode; Benjamin Okoedion of Regint Ministries; Oghosa Enobakhare; Osahon Osaghae, CEO of H20 Enterprise; Osawe Uwagboe, chairman, Prince Uwagboe Students and Youth Foundation; Stephanie Osagie, and Stephen Aluya-Ovih, a freelance software developer, among others. The event had over 13,000 delegates in attendance including Prime Ministers, Governors, Ministers, Commissioners and other well-

meaning individuals from embassies, universities, NonGovernmental Organisations (NGOs), civil society groups, youth-led organizations and government agencies from over 168 countries. According to him, the programme focused on international and national legislation principles as it relates to the New Urban Agenda, the Agenda 2030 and issues bordering on the deforestation, climate activities and other hazardous effects of the rapid urbanization in areas like Lagos, Benin and PortHarcourt. “The parliamentary roundtable allowed the opportunity to network with top officials and parliamentarians from various countries and meet key stakeholders in the UN. Various cities/countries were represented at the exhibition grounds where they showcased the direction their governments are taking in advancing cultural and innovative urbanisation.” Receiving the Edo delegates, Nigerian Ambassador to the UAE, Ambassador Mohammed Dansanta Rimi, commended the Governor Godwin Obaseki-led Edo State Government for its efforts in youth development. He noted that Nigerian immigrants find it difficult securing jobs in the UAE because they lack not only formal education but also the technical skills to pilot certain position, noting “that is why we applaud the Governor Obaseki-led administration’s initiative to train and equip young people with essential skills.”

TRCN storms 33 states, Abuja for certificate verification … says exercise not to witch-hunt REMI FEYISIPO, Ibadan

eachers Registration Council of Nigeria ( TRCN ) has begun nationwide verification of teachers’ professional certification with state monitoring leaders moving from school to school. The monitoring of compliance with the Federal Government directives commenced on Monday with monitoring teams in 33 states of the federation. The exercise will not hold in Borno, Yobe and Adamawa states due to the challenges there. Registrar/chief executive of TRCN, Segun Ajiboye, on Monday said the verification exercise was not to witch hunt but to sanitise the profession, saying the exercise was targeted at ensuring that quackery was rooted out of the profession. On the exercise, Ajiboye, a professor, stated that the nationwide monitoring exercise received the support of states and schools. @Businessdayng

According to Ajiboye, “We have received report from Kaduna, Delta, Lagos, Rivers, Plateau, Dutse, Aba, among others, on the verification exercise. We are stepping it up and quality will not be mortgaged. Teaching is for professionals and will not be a dumping ground for quacks.” No serious country, he said, will allow its future leaders to be taught by quacks and charlatans. The TRCN boss, who maintained that quality of teachers teaching will affect the quality of education and learning outcomes, stated that the Federal Government would not trade teacher professionalism with anything. “If we want to get our education right we must get it right with the teachers. Quality teachers will translate to quality education. The reports reaching us across the states indicated that people were ready to ensure standards in the profession. Indeed, some have picked Professional Qualifying Examination forms,” he said.

Tuesday 10 March 2020

BUSINESS DAY

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Africa’s problem is leadership - Fmr JAMB boss … urges a redefinition of Nigeria’s educational system Mark Mayah

frica’s major problem is not scarcity of resources, but leadership, former registrar and chief executive, Joint Admission and Matriculation Board (JAMB), Mohammed Abdulrahman, said. ‘’Africa is poor because we have not been able to put our money where our mouth is,’’ he told BusinessDay in a telephone interview. In his view, there are two steps towards economic emancipation. They are: Political independence, which he says Africa has now overcome, and Worth-while citizen-based industrial development. It was indeed a broad session, touching on economy, politics, education and other vital national and international issues. To the educationist, Africa is still suffering the hangover of the 1980s, which he describes as ‘’a lost decade’’ in Africa. ‘’No matter what indicators need, we are worse than we were in past time,’’ Abdulrahman said, adding, ‘’The standard of living of the average Africa is fallen in education, health and social services - all these have suffered tremendously.’’ Abdulrahman, who was the registrar and chief executive of JAMB in the Ibrahim Babangida regime between 1986 and 1996, notes that when in

the 1960s, Nigeria was a major exporter of food, regrets that in the 1980s,it had turned to ‘’chief importer of food.’’ His argument is that the structural transformation required for change is yet to be placed, resulting in the depreciation of our relative importance in the world. He blames the problem on the elite, saying: ‘’We have been let down by the elite,’’ and therefore stresses the need for soul searching ‘’as to where we have gone wrong and how to overcome these.’’ Accusing the elites of shying away from politics, the former JAMB boss, who turned consultant to many Africa countries, described politics and development as a two sides of a coin. To achieve meaningful economic development, he says, ‘‘There is the need to exhibit confidence in ourselves.’’ On the Economic Community of West African States (ECOWAS), he advocates an effective, dynamic regional cooperation to bail the countries out of their economic mess. ‘’ECOWAS is our national market and backyard, ‘’ he says. On the sub-regional body’s achievements, he notes: ‘’The dream still remains the same after 35 years of its existence.’’ The educationist traces the problem of ECOWAS to the repatriation of foreigners in Nigeria in 1984, saying it virtually killed ECOWAS.

Academic future of students on hold as ASUU down tool for two weeks KELECHI EWUZIE

cademic plans and projections by thousands of public university students in Nigeria have been put on hold as the Academic Staff Union of Universities (ASUU) announced a two-week warning strike Monday. ASUU, umbrella body of public university lecturers in Nigeria, is angry over the Federal Government’s decision to withhold the February salary of their members who refused to enrol on the Integrated Payroll and Personnel Information System (IPPIS), adding that they prefer the University Transparency and Accountability Solution (UTAS). The IPPIS project, which commenced in 2007, is re-

sponsible for payment of salaries and wages directly to the bank accounts of Federal Government employees. Biodun Ogunyemi, national president of ASUU, called for the strike in Enugu, after the Union’s two-day National Executive Council meeting. Ogunyemi observed that their members in Federal institutions were yet to be paid their February salaries because of the issue of IPPIS, adding that they needed to let the Federal Government know that enough was enough. The ASUU president recalled that in their previous meetings, the minister of finance was solely concerned about IPPIS to the point that other issues were not addressed. He said the Union would reconvene if nothing was done at the expiration of the twoweek strike to determine the next line of action.

Kicking against the move by the Federal Government in 2019, Ogunyemi alluded that the IPPIS was not a home-grown initiative rather it was a prescription of the World Bank, which ultimate consequence was to create anarchy and therefore, retard the growth and development of Nigeria. “The system does not, for example, capture the remuneration of staff on sabbatical, external examiners, external assessors, and Earned Academic Allowances. It does not address the movement of staff as in the case of visiting, adjunct, part-time, consultancy service, which academics offer across universities in Nigeria,” he said. He added that implementing the IPPIS would mean asking lecturers to make the trip to the capital city of Abuja for physical biometric data

capture, should lecturers not be available when IPPIS personnel visit schools for the capture. “The implementation of IPPIS in Nigerian universities will further localise their operations and perspectives, thus negatively impacting their ranking in the global academic community,” he said. This new development of strike has thrown students in the state and Federal universities into a frustrating mood, as they have to put their plans on hold not thanks to ASUU strike. They earnestly desire this two weeks industrial dispute would be resolved soon. Students, all over Nigeria, whose academic pursuit has seriously been hampered, can attest to the negative implications of the delay in their general career in life. The effect of such strike cannot be overemphasised.

Hygeia launches healthcare payment for Nigerians in diaspora ANTHONIA OBOKOH

ygeia, Nigeria’s Health Maintenance Organisation (HMO), has launched a payment platform for Nigerians in the diaspora to pay their parents healthcare bill, saying it has formed a strategic partnership with PiPiT Global and Sochitel. According to the organisation, the new service gives Nigerians living in the UK another simple and affordable way to take care of their family back home without the need to remit cash home to do so. “Our research shows that there is a lot of demand for Nigerians in diaspora looking for affordable and reliable ways to take care of their loved ones. This partnership makes it easier for them to do this, and we are happy to be able to provide this service,” Obinnia Abajue, CEO, Hygeia HMO states in a statement. The organisation in a statement states that in the event of an emergency, the individual’s mind will be at peace as hospital care will be provided and bills paid under its senior healthcare plan. Hygeia HMO has made it a goal to continue providing affordable access to quality healthcare, and also to contrib-

ute positively to the Nigerian healthcare sector. With this partnership, Nigerians abroad can now simply visit the Hygeia HMO website and select their preferred plan by filling an online form. A payment order will be issued afterwards via email or SMS, which is accepted at any UK Post Office where they can make payment for the plan in cash. Once payment is processed, the healthcare cover from Hygeia HMO is in place. The goal is to improve the benefits of migration by making it simpler for Nigerians living abroad to purchase healthcare for their family and help their loved ones back home, the firm says. Speaking also, Ollie Walsh, CEO of PiPiT Global, notes, “Through this partnership, we are delighted that our payment platform will help the Nigerian diaspora to pay for Hygeia HMO healthcare for their family back home while working abroad. This service is available to them even if they don’t have a bank account in either country.” PiPiTGlobal’s platform for cash transfers enables international bill payments, e-deposits and e-commerce payments for customers living across the globe, he says.

Zainab Ahmed (r), minister of finance, budget and national planning, comparing notes with Ahmed Idris (l), accountant general of the federation, at the just concluded 2020 managemnt retreat organised by the office of the accountant general of the federation in Kano.

IIM-Africa calls for effective data management to drive digital economy Jumoke Akiyode-Lawanson

nstitute of Information Management (IIM) Africa has called for cautious efforts to infuse the culture of effective data and information management into the public and private sectors in Nigeria as means to drive digital economy. Thus, the Institute says there are urgent needs for government at all levels to initiate policies and measures to ensure proper management of information and data in the country. Oyedokun Oyewole, the president/chairman, governing council of IIM-Africa, made states this during a press conference to announce plans for the Institute’s annual conference, induction and investiture scheduled to hold on March 14, at the University of Lagos main auditorium, Akoka, Lagos. The US consular-general, US Consulate, Lagos, Claire Pierangelo, will deliver the keynote

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… unveils plans for annual conference, induction, investiture address. Oyewole says the conference theme: “Effective Data and Information Management: Key to Success in Digital Economy”, was carefully selected to set the parameters for data/information management, usage, creating processes for resolving data/ information issues aimed at enabling regulatory bodies and other stakeholders make decisions based on high-quality data and well-managed information assets in the digital economy era. According to Oyewole, the body will also leverage the conference period to highlight the various information gaps, information management needs, and also proffer required framework for effective data/information governance in regulatory agencies across the country. Several speakers and activities have been lined up for the day’s programme, which will also pin-point the vital role informa-

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tion management services play for developing economies like Nigeria. However, to develop and propagate these transformational powers of technology, the IIMAfrica believes that the primary requirements are skilled manpower, legislations, standards, and government support. On the induction and investiture, Oyewole describes IIM-Africa as an exceptional international professional institute developed to promote the highest standards of excellence, integrity, competence, and research in information management. “The Institute, with Chapters in Ghana, South Africa, Australia, United Kingdom, United States of America and Canada, is an embodiment of everything that is good and principled about professionalism in data, information, records, document, archives, and content management education, and capacity development,” he @Businessdayng

says. He says the Institute was established to assist organisations and government in Africa to be globally competitive, leveraging on quality data and information for better decision making, lower cost of operations, prevention and mitigation of exposure to information risks, promotion of quality and timely service delivery, effective monitoring and evaluation of business processes, increase control over access to information, enable information governance and so on. “The pace of change and the challenges of the digital economy era imply we’re not only seeing new opportunities but are also facing new risks. Strong leadership, governance, and professionalism in data, information, records, document and knowledge management will be key, both to seizing opportunities and meeting the challenges ahead,” Oyedokun states.

Tuesday 10 March 2020

BUSINESS DAY

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Tuesday 10 March 2020

BUSINESS DAY

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Tuesday 10 March 2020

BUSINESS DAY

POLITICS & POLICY Oshiomhole, a divisive character, now attempting to factionalise APC at Nat’l level – Edo party chieftains …As Lagos APC backs national chairman Iniobong Iwok

s the interlocutory injunction by Justice Danlami Senchi of t h e F C T Hi g h Court suspending Adams Oshiomhole as national chairman of All Progressives Congress (APC) continues to generate reactions across the country, leaders of the party in Edo State have accused Oshiomhole of perpetuating his divisive politics in the national secretariat of the party, and is now attempting to factionalise the party at the national level. But the Lagos State chapter of the APC has thrown its weight behind the embattled national chairman. Recall that executives of ward 10, Etsako West Local Government Area had suspended Oshiomhole for attempting to destabilise the party in the state in order to factionalise it, with his sponsoring of the Edo Peoples Movement (EPM), a rogue group that was later proscribed by the Edo State Chapter of the APC. Oshiomhole’s suspension was eventually ratified at the local council and state levels of the party. A cross-section of the party leaders said Oshiomhole, being a divisive character and having failed in his bid

to factionalise the APC in Edo State, is now attempting to disintegrate the party at the national level. A chieftain of the party in Edo South, Charles Idahosa, said he has warned severally of Oshiomhole’s duplicitous and divisive character, and that his views have now been brought to the fore with the recent turn of events at the national secretariat. According to him, “I have severally warned in the past that the President and all other organs of the party should be wary of Oshiomhole and his penchant for destruction. The latest events at the party’s secretariat are evidence to the fact that my plea all these months were in order. I want to remind the world that Oshiomhole has continued with the macabre dance of shame with his attempt to destabilise the party for selfish reasons. For selfish ends, Oshiomhole wants to bring down the roof on the party and its structure.” Leader of the APC in Edo North, Jeffery Obasanmi, said the seeming factionalisation at the National Secretariat of the party is the machination of Oshiomhole who is leading a proxy war in Abuja after the court asked him to step aside as National Chairman of the party. He said: “We know Oshiomhole very well and are very familiar with his tac-

Adams Oshiomhole

tics. He is very divisive and Machiavellian, which is why he is expectedly using proxies to create factions at the secretariat of the party.” Theo Okoh, a leader of the party in Edo Central, said Oshiomhole’s footprints are all around the fireworks over the holding of the scheduled National Executive Council (NEC) meeting. “We are very certain that Comrade Oshiomhole is the one leading the people laying claim to new appointments at the National Working Committee. Nothing is farther from the truth that

new appointments were made. Oshiomhole and his cronies are making attempts at high-jacking things and creating what seems to be a faction,” Okoh said. Throwing its weight behind the embattled national chairman however, the Lagos State chapter of the APC has accused mischief makers of fanning the embers of disunity in the party. In a statement to the media in Lagos on Monday, a copy of which was made available to BusinessDay, the state Publicity Secretary, Seye Oladejo, while faulting

the move to sack Oshiomhole as the national chairman, noted that the party had recorded monumental success in national and state elections since he assumed office. Oladejo charged all aggrieved leaders of the party to embrace dialogue in resolving contentious issues, stressing that it was obvious that current crisis may have been motivated by 2023 general election. He however, expressed the optimism that the party would resolve all contentious issues and emerge stronger. “We acknowledge and appreciate the dogged and passionate leadership of the national chairman which was mainly responsible for our victories in the national elections. We did not only retain the presidency but also won the majority of the seats at the National Assembly. “This gave birth to the progressive leadership at the two arms of the National Assembly. We can definitely not dismiss his monumental achievements which included breaking new grounds to the discomfort of opposition party,” the statement read in part. “As much as we will not like to say too much as the matter is already in court, recent reports that the crisis was borne out of 2023 ambitions underscore the

desperation on the part of some members of the political class. “At a time like this, Lagos State APC wants to identify with the majority of the noble, decent and honourable men who have pleaded for peace, decorum and discipline to reign supreme in our party,” the Lagos APC further said. According to the statement, “The gladiators should take a cue from history that’s replete with men who tried to play God but failed at the crucial moment. We dare say that no one is bigger than the party that has provided a platform and a voice for the gladiators to be relevant. “However, we regard this as testing the waters for the ultimate strategy of the enemies within to decimate the party before their final onslaught. “We’re strengthened by the resolve of men of goodwill who’re standing firm in support of one united and indivisible party. “We wish to call on the gladiators to shield their swords and deploy their strength to deliver on the various assignments entrusted to them. As much as we regard this development as a storm in the tea cup, we’re of the opinion that our party will emerge stronger at the end of the day”.

Lagos Assembly removes two principal Akeredolu’s convoy didn’t kill anybody, Ondo govt clarifies officers, suspends two members …Victim rammed into stationary vehicle - Police Iniobong Iwok

n a manner that can be described as a coup, the Lagos State House of Assembly has suspended two of its principal officers including the Chief Whip of the House, Rotimi Abiru and the Deputy Majority Leader, Olumuyiwa Jimoh. Two members of the House, Moshood Oshun (Lagos Mainland Constituency 2) and Kazeem Raheem Adewale (Ibeji Lekki Constituency 2) were suspended indefinitely during plenary on Monday. In announcing the suspension of the members, the Speaker of the House, Mudashiru Obasa stated that the House is the hope of the people and the heartbeat

of democracy and that it should be well guided. “I hereby invoke Section 68 and Section 70 4 (a, b) 2 and 3 of the House rules in respect of gross misconduct, insubordination and action that can destablise this House I hereby move that Moshood Oshun and Raheem Adewale be placed on suspension indefinitely,” the Speaker said. The two decisions were supported through voice votes by the members present during plenary. The request for the removal of the two Principal Notice and change in the leadership was contained in a letter read on the floor of the House by the Clerk of the House, Azeez Sanni. Sanni stated that the 26 members that signed the

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letter wished to notify the House “to change the leadership of the House including, Rotimi Abiru as the Chief Whip and Deputy Chief Whip, Olumuyiwa Jimoh.” The removal of the principal officers and suspension of the two members came amidst speculation that there were critical issues that could divide the House and that more revelations might come in the coming days. Meanwhile, the House has announced the death of Debo Adegbesan, a principal législative officer on grade Level 12, who died in the early hours of Monday 9th March, 2020 at the age of 37 years. The House subsequently adjourned sitting to Tuesday 10th March, 2020.

KORETIMI AKINTUNDE, Akure

ontrary to series of media reports on the social media platforms which claim that the convoy of Ondo State Governor, Oluwarotimi Akeredolu, on Sunday, allegedly crushed to death a middleaged motorcyclist in Owo area of the state, Nigeria Police Force and Ondo State government have debunked the stories as untrue. The storyline read that the unfortunate incident occurred around 8:30pm on Sunday close to a Technical College near Akeredolu’s campaign office in Owo which threw the family of the victim into mourning as a driver in the convoy of the Governor Akeredolu, who was said to be on high speed, rammed into the man and crushed him to death.

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But, the statement issued on Monday by the Commissioner for Information and Orientation, Donald Ojogo debunked the incident, saying the governor’s convoy did not involve in any accident that led to the death of anybody in Owo. He said: “The attention of the Ondo State Government has been drawn to the above news item that is trending in a section of the social media. It is untrue that the convoy of the Governor, Arakunrin Oluwarotimi Odunayo Akeredolu (SAN) was involved in the accident as ascribed in the report. “This clarification becomes pertinent in view of the misleading narrative that has trailed the unfortunate death of a motorcyclist who had collision with a stationary vehicle. This, without prejudice to police investigation, is the outcome of our preliminary probe on the heels of the anxi@Businessdayng

ety understandably generated by the deliberate news slant.” Also, the Ondo State Police Command noted that there was no iota of truth in the media reports as the investigation carried out by the police showed that the governor’s convoy didn’t hit any motorcyclist popularly known as Okada rider. Speaking through Tee-Leo Ikoro, the Police Public Relations Officer, (PPRO) said that he visited the accident scene to get first hand information about the incident and “It is good to correct the impression on the social media. Journalism is about factual reportage. “I went with some journalists. The car involved was parked and the cyclist rammed into a stationary vehicle. It is wrong for people to say it was the Governor’s convoy. The jeep is with us for proper investigation.”

Tuesday 10 March 2020

BUSINESS DAY

Oil price crashes, Economy in Turmoil

$30 oil: Nigeria’s oil companies will be hit hardest by funding crisis DIPO OLADEHINDE

or Nigeria’s domestic oil companies, an oil price within the range of $30 may bring another round of funding crises that might bring fears of 2016. As a result of the oil price slump in 2016, the indigenous firms that bought the assets could no longer generate revenue at the levels expected when they agreed to loan terms, putting themselves and banks at risk. It’s 2020 and the current oil price rout may mean a similar scenario is well on the cards for indigenous producers in Africa’s top oil producer. Many companies, including listed Seplat and Oando, gained influence and access to the country’s resource wealth in recent years, as international oil majors sold off assets to local companies as part of an indigenisation programme under the previous government. Royal Dutch Shell, Total and Eni were among foreign companies that sold off prime oil production areas before oil price started dropping. Domestic companies took on a lot of debt to buy these assets. But analysts say the new trend of events means they may not reap the rewards they had hoped for and now they may struggle to repay loans. “Domestic oil companies are in a conundrum,” says Lagos-based Alao Abiodun, head of energy research at New Nigeria Foundation. “Many of the loans were hedge at higher oil price the current situation will mean adjustment of those loans.” Domestic companies have had to restructure their loans at least twice since 2014 as revenues no longer matched debt

repayments, say energy sector analysts. Some sought access to alternative sources of funding to finance operations and acquisitions, but many initiatives have been unsuccessful. For example, Seplat’s latest report revealed the company spent N1.5 billion hedging its loans after the acquisition of participating interest in OML 53 in nine months 2019. “The contingency criteria was set on oil price rising above $90/bbl over a one-year period and expiring on 31 January 2020. The contingency criteria was not achieved during the reporting period, and as a result, the contingent consideration has been derecognised,” Seplat said. The managing director of one of the tier one banks in a conference call recently was reluctant to say where the oil and gas loans were hedged at because it seems everyone was caught unawares by the

current oil rout. “Most banks may need to extend the tenors of the facilities to reschedule cash flows,” Charles Akinbobola, an energy analyst at Sofidam Capital said. Kelvin Atafiri, who runs Cavazanni Human Capital Limited, an investment firm exposed to the oil and gas sector said the lower oil price will definitely have an effect on banks loans which might lead to deteriorating assets. With the assumption of higher oil price in 2020, at least three Nigerian oil and gas companies took investment decisions meant to drive business expansion on Nigeria’s onshore oil assets and marginal fields. Seplat Petroleum Development plc leads the pack with the acquisition of London-listed independent exploration company, Eland Oil & Gas, to consolidate its position as the leading indigenous ex-

ploration and production (E&P) company in Nigeria. Eroton, one of Nigeria’s junior indigenous E&P companies, put in place various ingredients needed to drill on the Akaso field in Oil Mining Licence (OML) 18, onshore Nigeria. Similarly, a joint venture led by Green Energy sanctioned the second development phase of its shallow-water Otakikpo oil field (OML 11) in the Niger Delta off Nigeria, according to London-listed partner Lekoil. The banks’ exposure in terms of loan facilities to the oil sector, according to a recent Central Bank of Nigeria (CBN) financial stability report is about N6.1 trillion. Oil represents about 90 per cent of Nigeria’s exports and provides the bulk of foreign exchange for the economy. Dollar revenues earned by indigenous producers feed into the local banking system through savings and loan repayments. Skye Bank was one of the banks that took advantage of the funding opportunities created by the divestment by IOCs before the oil price slump, however, the Central Bank of Nigeria revoked the operating license in 2018 because of the persistent failure of the bank to meet minimum thresholds in critical prudential and adequacy ratios. FSDH Merchant Bank Limited, in a report titled ‘Nigerian Banking Industry Report: Changing Strategies,’ said the challenges in the upstream and midstream sectors of the oil and gas industry continued to portend difficulties for bank lending. “The low oil price has made a lot of oil and gas loans not to be performing. This has adverse impacts on the profitability of the Nigerian banks,” FSDH said its report.

Nigeria caught out again on oil prices despite industry’s infamous cyclical nature STEPHEN ONYEKWELU

igeria’s failure to prepare for the rainy day of sharp decline in oil prices has come to haunt it, despite historical evidence that points to the boom and bust nature of oil markets. Oil markets are susceptible to both macroeconomic indicators such as aggregate demand and geopolitical factors. To redress this, oil producing countries save during periods of boom to create buffers for periods of bust. But Nigeria has failed to save for the rainy day from excess crude sales and behold, a rainy day has come and Africa’s biggest oil producer is out in the rain. Brent crude, the international benchmark for oil price, was $35.24 per barrel at 11:21 GMT on Monday, having lost $10.03 and fallen by over 22.16 percent, live updates from oilprice.com show. Falling oil prices means big ticket projects in Nigeria’s oil and gas sector are likely to stall, rig counts will fall, oil servicing companies

and suppliers will take some hit and oil and gas companies may start defaulting on loans from commercial lenders. “If this goes beyond two months, the Central Bank of Nigeria will be unable to defend the naira anymore and currency devaluation will necessarily set in. We saw this in 1979, 1985 and 2014-2015,” Gbite Adeniji, a former technical adviser (upstream and gas) to Ibe Kachikwu, former minister of state for petroleum resources, told BusinessDay on phone. The bottom has dropped off the oil market. It is a good opportunity for Nigeria to exit its subsidy regime and every Nigeria must tighten their belt now, Adeniji said. Unlike the 2016 lows, which were largely driven by oversupply, the current oil price free-fall is a demand-led crisis. The global economy is facing real questions about a recession, and the coronavirus continues to spread. Paris-based International Energy Agency said on Monday that the “visible decline in transport, industrial and commercial www.businessday.ng

activity” points to a drop in global oil demand of 2.5 million barrels a day for the first quarter, compared to the same quarter last year. Of that, China would account for 1.8 million barrels a day. “It is the most severe decline since Q4 2008, the height of the 2008-2009 global economic crisis, which saw demand tumble by 2.8 million barrels per day,” Ann-Louise Hittle, vice president, macro oils at Mackenzie, said in a statement. The consultancy sees demand contracting by over 2.7 million barrels per day if the impact of coronavirus has had on global oil demand is sustained. The failed OPEC+ meeting on Friday was not just about making a further output cut; it was also meant to ratify an extension of the now collapsed agreement between the 20 nations to remove as much as 2.1 million barrels a day of oil from the market. That deal, reached in December, expires at the end of this month, leaving members free to pump as much as they wish from April 1. Already, the Russian ruble tumbled to a

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four-year low Monday amid a crash in oil prices as authorities assured the public the country has enough foreign currencies to withstand the blow. The ruble fell 9 percent to trade at 75 to the US dollar, a rate last seen in early 2016. But Nigeria’s excess crude account (ECA) as of last month had depleted from $325 million to $70 million within one month due the country’s revenue challenges and lack of rules governing deposits and withdrawals from the special account. The account was designed during President Olusegun Obasanjo’s administration to house crude oil sales in excess of the budget benchmark, which is $57 per barrel for 2020 fiscal year. This means oil revenue above this benchmark is to be deposited in the ECA. Some oil analysts are anticipating barrel prices as low as $20 within the year. Some experts have also suggested that Russia’s move is intended to counter US shale producers and hit back at the US for targeting the Nord Stream 2 gas pipeline connecting Russia and Germany.

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Tuesday 10 March 2020

BUSINESS DAY

Oil price crashes, Economy in Turmoil Nigerian manufacturers shiver over tumbling oil prices as unemployment set to balloon MICHAEL ANI

ith wounds from the 2016 e conomic cr unch still trying to heal, Nigerian manufactures might be in for a much tougher time if oil prices which account for over 75 per cent of the country’s foreign exchange, touch as low as $20 per barrel. Manufacturers operating in Africa’s largest economy are rethinking strategies of going into backward integration or sourcing raw inputs locally even at a higher price with the fear over what the free-fall in the oil market could hold for the oil-dependent nation. “Most of our manufacturing firms import their raw materials for production, meaning that devaluation increases the chances of cost of production climbing significantly and they might not have the capacity to lift prices to cover up for the high cost of production considering the weak consumer spending power,” Ayorinde Akinloye an equity research analyst at CSL Stockbrokers Limited said. Global oil prices have taken a bitten since the outbreak of the endemic coronavirus; and have worsened further with no end in sight after Russia last Friday, pulled the plug on its three-year alliance with members of the Organization of the Petroleum Exporting Countries (OPEC). Brent crude, which stands as the international benchmark for oil, tumbled to $30 in the early hours on Monday, its biggest fall since 1991 when the United State entered a war with Iraq in re-

sponse to Iraq’s invasion and annexation of Kuwait arising from oil pricing and production disputes. Oil prices later pared its losses rising to $37 per barrel at 3:49 pm Nigerian time. Falling oil prices below budgeted levels do not sit well for Africa’s largest economy that depends so much on the commodity to attract dollars and carry out its fiscal obligations. Nigeria is caught up in the middle of escalating supply and demand shocks, with most of its already exported crude stuck in the market looking for buyers, making the country lose daily the needed foreign exchange to shore up its reserve. Manufacturers need dollars to buy equipment for their day-today operations to meet demand.

A halt in manufacturing operation can amplify the country’s unemployment which is currently at a record high of 23.1 per cent as of third quarter 2018, as more people entering the labour force would not find right companies to work in. A decline in oil prices would mean lower dollars coming into the country and this can exact pressure on the Central bank reserves, which need them to settle monthly import bills. It could also make the apex bank resort into naira devaluation as it weakens the CBN’s firepower from using its reserve to continually keep the naira at a fixed rate to the dollar. Devaluing the naira would cause a devastating effect on manufacturing countries as they would have to pay more to get dollars to

import machines for production. A clear case example was in 2016 when Africa’s largest economy suffered a huge dollar shortage owing to a collapse in crude oil prices and oil production. The devaluation sent commodity prices to as high as 18 per cent with manufacturing companies reporting shrinking margins and cutting down on expansion plan. In that period, oil prices fell to as low as $28.94 barrel per day while the disruption of oil pipelines sent production to $1.2 million barrel. These factors culminated into sending the economy into five quarters of negative growth, and triggered massive capital outflows, as foreign investors left in drove. The situation was much more precarious for manufacturers as they were left to battle with inad-

equate dollar liquidity to import, falling demand and the big naira devaluation that eroded their investments. “Since most manufacturing companies are import-dependent for raw materials, devaluation could trigger excess dollar liquidity in their balance sheet, making them resort into right issuance to clean up the debt,” Abiola Gbemisola, consumer analyst at Lagosbased investment firm, Chapel Hill Denham told BusinessDay Data from the Manufacturers Association of Nigeria (MAN) says a total of 54 manufacturing firm went down the drain due to the harsh economic condition at the time. Some 272 firms also closed shop due to the acute dollar shortage based on a 2017 report released by NOI Polls in association with Centre for the Studies of Economies of Africa. Over $8 billion of the country’s external reserve has blown out the Central Bank since the start of the year, as the apex bank fight to keep the naira stable against the dollar. The country may have exited the recession; its pace of growth is still weak at an average of 2 per cent and largely centred around activities in the oil sector. The on-going virus which has led to the death of over 3150, has taken a toll on oil prices due to slower demand from China and this could have negative consequences on the health of the Nigerian economy making the government handicapped in fulfilling planned expenditure particularly CAPEX, which would, in turn, affect the manufacturing sector.

Cash-strapped Nigerians at risk as oil decline threatens higher cost for businesses Gbemi Faminu

he decline in oil price to the lowest since 2017 does not bode well for business owners in Nigeria especially manufacturers, where economic conditions and infrastructure deficit have left many business dependent on abroad for inputs. But consumers will feel the brunt as well. Following the outbreak of coronavirus in China as well as the oil war declared by Saudi Arabia, the oil price has crashed by over 20 percent to as low as $35 per barrel from a peak of $68 per barrel in January 2020. While a low price will be good news for oil consumers, for producers like Nigeria the implication can be far-reaching – and the 2016 recession is a remainder of that fact. The over 20 percent drop in oil, which accounts for almost 90 percent of foreign exchange earnings as well as about half of federal

government revenue, could lead to more borrowings by the FG. In addition, this spells doom for business operators in the country because oil accounts for a major percentage of foreign exchange earnings. Concurrently, due to the increased VAT and high production cost, businesses will be forced to pass on the cost to already cash strapped consumers. This could be worsened by a looming pressure on inflation. According to a statement about the impact of coronavirus on the economy from the Lagos Chamber of Commerce and Industry (LCCI), signed by the director-general, Muda Yusuf, the drop in oil prices gives a gloomy outlook for the economy and foresees economic hiccups like increased cost of production, heightened inflationary pressures, etc “Oil revenue accounts for about 85% of foreign exchange earnings and is the major driver of accretion

to the foreign reserves. The slump in oil price and the associated adverse expectations will put fresh pressures on the reserves. This outlook has the following implications: likely increase production and operating costs for businesses, heightened inflationary pressures on the back of currency weakening, weakening of purchasing power with adverse implications for the welfare of the citizens, weakening of investors’ confidence, generation of speculative pressures on the currency, likely depreciation of the naira exchange rate” the statement reads. In 2019, consumers faced myriads of challenges from fragile economic growth to unfavourable protectionist policies of the government – border closure and foreign exchange restriction for food imports- which elevated food prices. For 2020, in addition to the increment in Value Added Tax to 7.5 percent, and the possible increase

in the prices of goods and services by manufacturers, consumers will experience tougher times. “Consumers will be worse off this year than in 2019 mostly in terms of price increase. The border closure if extended will continue to affect prices of major commodities. Although we had seen elevated prices of major food items in December, those prices will begin to come down mostly in January and February but where you will see that increase is from consumer goods firms,” Ayorinde Akinloye, consumer analyst at Lagos-based CSL Stockbrokers said. China is reported to be the world’s second-largest economy and a major manufacturing hub accounts for about a major part of Nigerian imports in diverse sectors especially manufacturing and trading. Data from the National Bureau of Statistics (NBS) shows that as of the third quarter of 2019, imports from

China stood at N1.22 trillion while capital importation from China stood at $26.95 million. the statement highlights that asides incurring higher production cost, manufacturers will experience challenges getting raw materials for production due to the crises in China disrupting the global supply chain, “The global supply chain has been deeply disrupted as China, which is the second-largest economy in the world, is a major supplier of inputs for manufacturing companies around the world, Nigeria inclusive. Many manufacturers and service providers in the country are already experiencing acute shortage of raw materials and intermediate inputs. This has implications for capacity utilization, employment generation [and retention] and adequacy of products’ supply to the domestic market. There is also an implication for inflation.” the statement reads.

Tuesday 10 March 2020

BUSINESS DAY

Oil price crashes, Economy in Turmoil Oil currencies bleed as investors fret over crude price SEGUN ADAMS

urrencies of some of the biggest oil producers in the world suffered declines Monday after crude oil dropped to uncomfortable lows on a price war between Saudi Arabia and Russia. Relative demand for US dollars against the currencies many top producers strengthened, according to data obtained from Bloomberg between 5-6pm GMT+1. The Naira weakened by 0.91 percent to sell for 365.76 per USD in the spot market while the Russian Rubble fell 8.24 percent against to trade against the green back at 74.2937 a unit. Big oil producer, Venezuela saw its inflation-stricken Bolivar Sober sell for 0.04 percent higher at 73,132.6172 to one dollar. United States dollar also climbed 0.13 percent against the Saudi Riyal to trade at 3.7581.

Similarly, Brazil’s Real weakened Monday to sell higher at 4.7608, while Kuwait’s Dinar

depreciated marginally against the dollars to 3.2788. US dollar also gained 0.5 per-

cent on the Egyptian pound to sell for 15.7150 a unit, as oil producers watched Saudi Arabia sell its oil at a discount in a bid to

force Russia back to the negotiation table for the cartel’s biggest production cut since 2008. While most of oil biggest producers saw their currencies fall, the Angolan Kwanza to 488.0425 while the Iraqi Dinar remained flat at 1,182.8718. As at the time of compilation, data on currency trading for the Iranian Rial was not available. For Nigeria, pressure on the currency amid slower dollar inflow would be on the front burner as the ability of the Central Bank of Nigeria to support the naira with its dwindling foreign exchange reserve comes into question. The buffer has declined since the start of the year to only about $6bn above the apex bank’s minimum threshold. Last month, Bloomberg polled more than a dozen analysts, fund managers and economists in Nigeria and abroad who said a devaluation of the naira is imminent at most by 2021.

How falling oil prices, potential devaluation will affect retailers BUNMI BAILEY

he sharp drop in global oil prices to a low of $36.85 per barrel as at yesterday 5:00pm will in no time wreak havoc on oil-dependent producers like Nigeria whose mainstay depends on the commodity and inflict pains on consumers already struggling with squeezed purchasing power. With oil prices below the Central Bank of Nigeria’s $50 per barrel benchmark for devaluation, and external reserves approaching the $30 billion mark, the country risks a second recession in four years, putting pressure on Emefiele-led apex bank to lower the value of the weakening naira, which analysts believed it overvalued by more than 10 percent. “Wholesalers, retailers and consumers may not feel the immediate impact of devaluation,” said Ayorinde Akinloye, analyst at CSL Stockbrokers. “However, the medium-term effect is inevitable,” Akinloye posited, adding that devaluation will make prices of goods more expensive as merchants pass cost to final consumers. Devaluation is the deliberate decision to reduce the value of a currency in a fixed exchange rate

making the value of the currency to fall. Domestic residents will find imports and foreign travel more expensive. However domestic exports will benefit from their exports becoming cheaper. After being hit hard by acute shortage of foreign exchange following the sharp decline in oil prices in mid-2014, Nigeria slumped into recession in the second quarter of 2016. Africa’s most populous nation lowered the value of the naira by more

than 40 percent to N306/$ from N199/$. The naira stayed relatively stable at some N360/$ buoyed by the introduction of the Investor & Exporter (I&E) window, which instilled some confidence in the market combined with recovery in oil prices. But now, the naira is trading at N366/$ as oil prices continues to tank. “A sustained oil price below $40 mean that a downturn is imminent,” said Damilola Ade-

wale, an economic researcher. Adewale maintained that devaluation will incite inflationary pressure as manufacturers and merchants pass cost to consumers to breakeven but reducing the value of the naira will do almost nothing to salvage Nigeria’s FX woes. “Devaluation will do more harm than good given present conditions,” Adewale said. For Cheng Fuller, a retail and marketing consultant, falling

oil prices will reduce investors’ confidence in the economy as most retailers who tend to expand their businesses need foreign investments. “Available of investable funds will now be a challenge for them,” he said. Since the coronavirus outbreak, global oil prices has been tanked due to low Chinese demand, it fell steeper after Russia balked at a plan by the Organization of the Petroleum Exporting Countries (OPEC) to cap Oil production to shore up prices. Last week Friday, oil prices benchmark tumbled 9.4 percent settling at $45.27 per barrel. The oil price at its current level is already below the federal government’s budget benchmark of $57 and the CBN resistance level which could spell naira devaluation given that FX reserves remains on a decline currently at $36billion Despite the country’s diversification efforts, its economy stills depends mostly on oil export earnings which stand a great risk of being vulnerable to price shocks and foreign exchange volatility. “At the end of the day, it just depends on the Monetary Policy Committee (MPC) response because it is a serious issue,” Omotola Abimbola, a macro and fixed income analyst, Chapel Hill Denham said.

Tuesday 10 March 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

Lagarde to confront coronavirus crisis at ECB policy meeting

Economists predict a eurozone recession as the virus spreads rapidly across the region Martin Arnold

hristine Lagarde will on Thursday take on her toughest test as head of the European Central Bank when it decides how to respond to coronavirus fears that have sent financial markets into a tailspin and threaten to cause a deep eurozone recession. As the first major central bank to hold a scheduled policy meeting since the full impact of the virus on the global economy took shape, the ECB president must on Thursday outline a response after the US Federal Reserve enacted its first emergency rate cut since the height of the financial crisis in 2008. Until only a few weeks ago, it had seemed the ECB would be responding to a brightening economic outlook. After two years of sagging growth and inflation the eurozone economy seemed to be turning a corner at the start of this year, with rebounding factory orders and improving business sentiment. However, that was before virus spread rapidly through many European countries, causing Italy to lock down a quarter of its population across much of its prosperous industrial north while triggering a sharp sell-off in financial markets on Monday. The virus is hitting exports to China and threatens to disrupt the supply of crucial parts from Chinese companies. Fears of contagion, school closures, event cancellations and travel restrictions on workers are hurting tourism, airlines and leisure companies across Europe — as well as investor and business sentiment. “The one billion dollar question

ECB president Christine Lagarde has hinted that her focus is on providing extra liquidity to the banking and corporate debt markets © Reuters

is: how long will it last?” said Jörg Asmussen, a former ECB executive board member who is now head of Germany’s insurance association. “Is it temporary? How many months before a V-shape recovery starts?” Ms Lagarde is also grappling with the question of what action the bank’s governing council could take when many observers believe it looks alarmingly short of options. Unlike the Fed, the ECB has not lifted rates from their post-2008 financial crisis lows. Instead it kept cutting, most recently in September to a record low of minus 0.5 per cent. As Ms Lagarde herself said recently, this had “significantly reduced the scope” to cut rates further. Policymakers across Europe, including the ECB, “still have lower rates than the US and do not need to

follow the Fed necessarily”, said Vítor Constâncio, former vice-president of the ECB. “Some will do it though, despite everyone believing that the effects are quite meagre.” There is already a growing debate about the adverse effects of keeping interest rates negative for many years and economists even doubt another cut would do much to help with the virus’s immediate impact. “When you have negative rates, you are effectively targeting bank reserves, you don’t need a rate cut to allow overnight market rates to drift lower temporarily,” said Lena Komileva, chief economist at G+ Economics. Complicating the picture for Ms Lagarde are the deep divisions in the ECB’s governing council, which blew up into a public spat the last time it

cut rates six months ago. Some policymakers strongly oppose further cuts. On top of this, the response by EU governments to the disruption of the virus has so far been patchy and underwhelming — particularly in comparison with the €200bn spending package co-ordinated by Brussels after the 2008 financial crisis. This all puts more pressure on the ECB to take action; financial markets are pricing in a further rate cut to minus 0.6 per cent. Many economists believe the ECB is likely to cut rates in response to the sharp appreciation of the euro in recent weeks, which threatens to put more pressure on the region’s export-dependent economy. Ms Lagarde, however, has hinted that her focus is on providing extra liquidity to the banking and corporate debt markets. She said in a recent

statement that the ECB was “ready to take appropriate and targeted measures” to address the crisis. A big worry for economists is that the strain on disrupted businesses could lead corporate debt markets, where levels of leverage and overall indebtedness have been rising, to seize up. One way to address this would be to expand the ECB’s €2.6tn asset purchase programme, which was relaunched last year. The ECB could temporarily increase its size, particularly by buying corporate paper. Another possibility would be to bulk up the ECB’s existing programme of targeted loans to banks at sub-zero rates on the condition that they use them to fund lending to small businesses. Finally, the ECB could widen the types of collateral it accepts from banks to include more loans to small businesses hit by coronavirus disruption. “Financial strains that worsen the downturn are a major risk,” said Adam Slater, lead economist at Oxford Economics. “Central banks may have to become directly involved in providing bridge financing to key firms and sectors, and in pushing banks to do likewise.” He added that this may require a suspension of EU fiscal rules to allow member states to run higher deficits. For the eurozone economy, which had already slowed to its lowest growth rate for seven years at 1.2 per cent in 2019, coronavirus could hardly have come at a worse time. The economies of France and Italy both shrank in the final quarter of last year, while Germany’s flatlined. Many economists are now predicting the eurozone will suffer a recession — two consecutive quarters of negative growth — in the first half of this year.

Oil crash: why Saudi Arabia has started a global crude price war Aggressive move by world’s top exporter has sent shockwaves through markets

Anjli Raval and David Sheppard

il prices crashed by as much as 30 per cent after Saudi Arabia fired the first shots in a price war, in crude’s biggest one-day fall since the early 1990s Gulf war. Riyadh’s threat to discount its crude and raise production prompted the price of Brent crude, the international oil marker, to fall to as low as $31.02 per barrel. West Texas Intermediate, the US benchmark, fell to $27.71 a barrel. But why did the world’s top exporter decide to move so aggressively, with demand reeling from the coronavirus crisis? And what does it mean for the wider oil industry? Why is Saudi Arabia launching a price war? Saudi Arabia had wanted to lead Opec and Russia in mak-

ing deeper cuts to oil production to support crude prices in the face of the coronavirus outbreak, which has disrupted global economic activity. But when Russia baulked at the plan, the Gulf kingdom turned on an ally it had worked with to prop up the oil market since 2016. Riyadh responded by raising production and offering its crude at steep discounts. Analysts said that was an attempt to punish Russia for abandoning the socalled Opec+ alliance. Saudi Arabia may also have wished to cement its position as the world’s top oil exporter, analysts added. The move demonstrated that Riyadh was willing to openly take on Russia and other higher cost producers. “There was a consensus among Opec [to cut production]. Russia objected and has said that from April 1 everyone can produce whatever they like. So the kingwww.businessday.ng

dom too is exercising its right,” said one person familiar with Saudi oil policy. Analysts have questioned the wisdom of Saudi Arabia’s approach. Its economy is not immune to a price crash, even if it believes it can win market share from its rivals. But under Mohammed bin Salman, crown prince, the kingdom has gained a reputation for risky and unpredictable moves when it has felt the need to assert itself. Why did Russia not agree to cut production? Russia said it wanted to see the full impact of the coronavirus on oil demand before taking action. But Moscow has also been keen to test the US shale industry. It believes that cutting output would only hand a lifeline to a sector whose growth has turned the US into the world’s largest oil producer, gaining customers at

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Russia’s expense. US sanctions on Russian energy companies, including those that targeted the trading arm of state-backed oil champion Rosneft last month, and attempts to halt the Nord Stream 2 gas pipeline to Germany, have infuriated the Kremlin. US shale has struggled to be profitable despite its growth over the past decade. People briefed on Moscow’s strategy said Russia thought there was an opportunity to hurt the US oil industry. “The total volume of oil that was reduced as a result of the repeated extension of the Opec+ agreement was completely and quickly replaced in the world market with American shale oil,” a spokesman for Rosneft said on Sunday. Saudi Arabia’s approach to a possible deal with Russia was a take-it-or-leave-it demand to join them in reducing an addi@Businessdayng

tional 1.5m barrels a day, taking total cuts to 3.6m b/d or roughly 4 per cent of global supply. That is thought to have riled Moscow, which does not see itself as a junior partner. What will happen to the US shale industry? The price crash came at a difficult time for US shale. While production has soared over the past decade, leapfrogging that of Russia and Saudi Arabia, the industry has burnt through borrowed cash, alienating investors. That has left it vulnerable to a drop in prices. The huge oil price fall since the start of the year has thrown any remaining expansion plans into doubt. The hit to production, however, may be muted. Many of the small independent producers that make up most of the US shale sector have hedged their output at higher prices. Supply is unlikely to fall immediately.

Tuesday 10 March 2020

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Oil price crash sends global stocks tumbling David Sheppard, Anjli Raval, Philip Georgiadis and Hudson Lockett FT Reporters

il prices crashed by more than a fifth after Saudi Arabia started a price war, s e n d i ng ratt l e d stock markets plunging and spurring a rush into government bonds as investors sought havens. Crude was on track for its biggest one-day drop since the 1991 Gulf war after the Saudi move, which threatens to swamp the oil market with supplies just as the coronavirus outbreak hits demand. Saudi Arabia will raise production and offer its crude at deep discounts to win new customers next month, according to two people familiar with the country’s oil policy. Oil prices fell as much as 30 per cent but later Brent trimmed losses slightly to be down 20 per cent at $36 a barrel, while West Texas Intermediate traded at about $33.00 a barrel. European stocks slumped, with London’s FTSE 100 down more than 6 per cent and on track for its worst day since the 2008-09 financial crisis. Germany’s Dax and France’s Cac 40 fell by similar amounts and the Stoxx Europe 600 index, which tracks the region’s largest companies, slid into bear market territory — meaning a fall of a fifth since a recent high. S&P 500 stock futures pointed to a slide on Wall Street when trading begins on Monday, falling as much as 5 per cent — the maximum allowed in a single session. In a rush by investors to find haven assets, the 10-year US

Treasury yield tumbled down through 0.5 per cent to a record low in the sharpest rally for American sovereign debt in more than a decade. The 30-year US Treasury yield dropped below 1 per cent, taking the entire US yield curve below that level for the first time. Investors now face the prospect of the 10-year yield, which stood at 1.5 per cent just 18 days ago, soon joining government bonds in Europe and Japan in negative territory. “The market is in the process of pricing a global recession,”

said George Saravelos, a strategist at Deutsche Bank. Big energy groups were under acute pressure. Shares in BP and Royal Dutch Shell lost about a fifth of their value in London trading. Smaller oil companies fell more sharply, with the UK’s Premier Oil collapsing in value by a half. “It is the most crude pricebearish combination since the early 1930s. The price collapse has just begun,” said Bob McNally at the Rapidan Energy Group. The currencies of oil-producing countries took a hit. The

Canadian dollar dropped 1.4 per cent against the US dollar while Norway’s krone fell as much as 4.7 per cent to its lowest level against the US currency since 1985. Russia’s rouble dropped 7 per cent against the dollar. “In economic terms, the major oil exporters will all suffer an unwelcome additional brake to growth,” said Kit Juckes, strategist at Société Générale. “For growth-sensitive and for oilsensitive currencies, it’s far too early to pick a bottom,” he added. The Australian dollar experienced a “flash crash”, plunging

almost 5 per cent against the US dollar in just 20 minutes to briefly touch its lowest level since the global financial crisis in 2008. Japan’s benchmark Topix closed down 5.6 per cent, meeting the technical definition of a bear market. The decline was the index’s biggest one-day fall since the UK’s 2016 Brexit vote. The yen, seen as a haven during times of market uncertainty, strengthened as much as 3.6 per cent against the dollar to ¥101.57, the highest in more than three years.

lenders including Société Générale, Deutsche Bank and UniCredit lost around a tenth of their value. Shares in Wall Street’s biggest banks were poised to fall around 10 per cent at the open. The 10-year US Treasury bond yield tumbled down through 0.5 per cent to a record low. The 30-year US Treasury yield dropped below 1 per cent, taking the entire US yield curve below that level for the first time. Investors now face the prospect of the 10-year yield — which stood at 1.5 per cent just 18 days ago — soon joining government bonds in Europe and Japan in negative territory. Interest rate futures now suggest the Federal Reserve will this summer cut its main interest rate back to the historic lows set during the 2008-09 financial crisis of 0 to 0.25 per cent. The Fed last week slashed rates by half a percentage point — the biggest cut since the crisis — to a range of 1 to 1.25 per cent.

The US central bank on Monday sought to ease conditions in the US money markets by increasing the size of its daily repo operations by $50bn to at least $150bn. Joachim Fels, global economic adviser at US asset manager Pimco, said a recession in the US and the eurozone in the first half of the year was now “a distinct possibility” and that Japan was “very likely” already in one. Traders moved into haven currencies, with the Japanese yen gaining more than 2 per cent to hit its highest level against the US dollar in more than three years. The currencies of oil-exposed countries came under heavy pressure. Japan’s benchmark Topix closed down 5.6 per cent, meeting the technical definition of a bear market. The yen, seen as a haven during times of market uncertainty, strengthened as much as 3.6 per cent against the dollar to ¥101.57, the highest in more than three years.

US stocks plunge 7% as oil crash shakes financial markets Investors flee to safety of US government debt Philip Georgiadis, Adam Samson and Hudson Lockett

lobal stocks tumbled and investors sought cover in US government bonds after a crash in the price of oil rocked financial markets already reeling from the spiralling impact of coronavirus. Wall Street’s S&P 500 plunged 7 per cent, triggering a 15-minute trading halt meant to curb panicky selling. The Europe-wide Stoxx 600 swooned almost 8 per cent, while London’s FTSE 100 fell 7.7 per cent. Government bonds rallied as investors piled into the relative safety of sovereign debt and braced for more support from central banks, igniting the sharpest rally for US 10-year Treasuries in more than a decade. The gyrations across markets followed Saudi Arabia’s weekend decision to launch an oil price war, which sent the price of crude falling

as much as 30 per cent as the kingdom threatens to swamp supplies. The drop — the biggest since the Gulf war in 1991 — exacerbated two weeks of intense market turmoil caused by escalating concerns over the economic impact of the coronavirus. “In just over two weeks, investor sentiment has swung from complacency to panic,” said Paul O’Connor, a portfolio manager at Janus Henderson Investors. “What started as a virus-driven de-risking has now mutated into a broadbased, multi-asset capitulation,” he said. The start of trading in European equities markets was tumultuous: dozens of stocks took several minutes to begin trading with others still not trading half an hour after the opening bell. One trader said many stocks were thrown into volatility auctions which are used to smooth out tumult in individual share prices.

Stock markets across Europe tumbled, and Italy’s FTSE MIB lost more than a tenth of its value after 16m people in the country’s prosperous north were locked down in an effort to control the country’s virus outbreak. The Stoxx Europe 600 index, which tracks the region’s largest companies, slid into bear market territory — meaning a fall of a fifth since a recent high. Jim Reid, a strategist at Deutsche Bank, said the plunge in oil had led to a “complete capitulation” across other asset classes. Trading activity was aggressive with more than 4bn shares of major European companies trading hands by 1pm in London — more than three times the average over the past half-year, according to Bloomberg data. Major energy groups came under acute pressure. Shares in BP and Royal Dutch Shell lost about a fifth of their value in London trading. Some of Europe’s largest

Tuesday 10 March 2020

BUSINESS DAY

ANALYSIS

Barclays: the legal fight over a company’s ‘controlling mind’ The investigation into the bank’s actions has renewed calls for reform of laws over white-collar crime Caroline Binham and Jane Croft

oger Jenkins was once one of Britain’s most power ful bankers, earning as much as £75m in 2005. But sitting in the dock at London’s Old Bailey dressed down in a dark jumper and trousers, it was sometimes difficult to remember that he was once the “gatekeeper” of Barclays Bank’s multibillion-pound relationship with Qatar’s then prime minister Sheikh Hamad bin Jabr al-Thani, who he had first met on board a yacht in Sardinia. He was facing charges that — along with two other former Barclays Bank employees — he lied to the market over fees paid to Qatar, as the Gulf state invested £4bn to help save the bank at the height of the financial crisis. Calm throughout the fivemonth trial, Mr Jenkins rarely raised his voice under cross-examination even as he described being ordered back to work, just weeks after a heart attack, in August 2008, to help the bank avoid a humiliating UK taxpayer bailout. But when asked about his responsibility for the £322m in fees paid to the Qataris, he became animated. Mr Jenkins insisted that the two side deals were struck as part of fundraising, were genuine and not a “smokescreen” for illegal payments, as the Serious Fraud Office had alleged. He added that far from being “misleading”, the October 2008 capital-raising prospectus had been approved by Barclays’ board. “To imply . . . that I’m in some way guilty for this document, I’m sorry I find [it] very difficult to continue that conversation,” he told the SFO’s prosecutor Edward Brown QC in one charged exchange. “We have a board for that reason and I am not on that board. Sorry to be emotional about it.” His comment lies at the heart of the failed landmark UK prosecution — one that began nine years ago when the financial regulator’s investigation first started, took two jury trials and ended with Mr

Jenkins, along with co-defendants Richard Boath, a senior banker, and Tom Kalaris, former head of Barclays’ wealth division, being acquitted at the end of February. Tom Kalaris The ‘quarterback’ Barclays colleagues dubbed the American head of its wealth division the “quarterback” because of his role in helping to drive capital raisings over the line. During the trial, the father of five rolled out the big guns as character witnesses: the former chairman of the old markets regulator, the Financial Services Authority, Callum McCarthy, and the ex-Barclays chairman, David Walker, in place when authorities started circling the bank. Both vouched for him. The lack of prosecutions of senior bankers — arising out of events during the financial crisis — has unleashed public anger on both sides of the Atlantic. But the clean sweep of acquittals — which mean that no UK bank boss has been convicted or jailed over actions taken in the financial crisis — throws up wider questions about the UK’s ability to prosecute allegations of white-collar crime at the highest levels. Unlike in the US, prosecutors in England and Wales must demonstrate that the “directing mind” of a company was involved in alleged criminality if they are to prove a company liable. “It is almost impossible to find a controlling mind and prove that controlling mind is complicit in any criminality,” says David Green, director of the SFO when it launched its investigation into Barclays, who argues that prosecutions are being hampered by this legal requirement. “The email chain tends to dry up at middle management level.” “[The acquittals] will turbocharge arguments in favour of reform of the law on corporate criminal liability,” says Mr Green, now a partner at law firm Slaughter and May. “The current law was developed in the industrial revolution when companies were beginning to be formed and consisted of one person or two or three people

so it was very easy to identify who was a controlling mind.” His successor at the SFO, Lisa Osofsky, was even blunter during the trial, telling the BBC that the law was a “standard from the 1800s when ‘mom and pop’ ran companies — that is not at all reflective of today’s world.” The court case recalled the desperate measures Barclays took to stay out of UK government hands as markets nosedived in 2008. And with the SFO evidence hinging on extracts from Mr Boath’s taped phone conversations in 2008 — including lurid conversations in which he discussed with Mr Kalaris fears of going to jail — it was a vivid reminder of a different era. John Varley: The chief executive Mr Varley, 63, with his distinctive red braces and tailored suits, was the archetypal City banker as Barclays chief executive between 2004 and 2010. He came to the bank through family connections, marrying into the Pease family who sold their lender to Barclays in 1902. After rising up through the ranks, he became finance director and then chief executive. He remains the only chief executive of a major UK bank to face a jury over events related to the financial crisis. As part of this evidence, the jury heard that after Barclays agreed the Qatari fundraising, Mr Jenkins, who was paid £39.5m in 2007, pushed for an additional £25m special payment for his role in helping to raise the capital, saying he had helped “save our arses and jobs”. The SFO alleged the £322m side deal, or advisory services agreement — sealed with a sixparagraph handwritten letter, was a dishonest way of funnelling outsize fees to Qatari investors, including Sheikh Hamad. The case alleged that the payments were to help secure a £4bn investment into Barclays via emergency fundraisings in June and October 2008. The investment saved the lender from having to ask for a state bailout. When the SFO filed charges in 2017, it was the first time a major

bank and its chief executive had faced the prospect of a jury trial over events during the crisis. Unusually, the SFO decided to charge Barclays as a corporate defendant, accusing it of fraud and illegal financial assistance. Roger Jenkins: The ‘gatekeeper’ At one stage Mr Jenkins, 64, was among the best paid bankers in Britain — receiving a £25m bonus in 2008 as the “gatekeeper” of the relationship with Qatar. He had worked his way up from a graduate trainee to lead the bank’s structured wealth division. But John Varley, chief executive in 2008, was acquitted by the first trial judge last year and the corporate charges — built around a $3bn loan the bank extended to Qatar’s finance ministry just as the second fundraising was closing — were scrubbed even before trial. The SFO had accused Barclays of lending Qatar the money simply to reinvest in the bank, essentially propping up its share price. The court found no case of any criminal wrongdoing against Barclays, or Mr Varley, and the jury in the retrial made it clear they did not believe any allegations of criminality against the three defendants, taking just over five hours to clear them. But in the wake of the failure of both jury trials, lawyers now say prosecuting a big company in the UK looks to have become even harder. Prosecutors have struggled to meet the “controlling mind” test in the past. In 2015, the UK Crown Prosecution Service announced it would not be bringing any corporate charges against News Group Newspapers over the phone hacking scandal, which saw several of its journalists convicted for voicemail interception. At the time the CPS said: “The present state of the law means it is especially difficult to establish criminal liability against companies with complex or diffuse management structures.” Richard Boath: ‘The worrier’ The most junior defendant, Mr Boath’s telephone was routinely

recorded by Barclays because he dealt directly with clients and provided most of the SFO’s evidence. A self-described “worrier”, Mr Boath told the SFO — during eight days of questioning in 2014 and 2015 — that the bank paid Qatar outsized fees to secure its participation in the fundraisings. He was cleared by the FCA in its parallel regulatory case, and still has an employment claim outstanding against the bank. There is no precise definition of what constitutes a directing mind, but up until the Barclays case, it was thought, by prosecutors, that a group chief executive — as Mr Varley was — would make the grade. The first trial judge, Mr Justice Jay, obliterated that assumption: in essence, he ruled that Mr Varley was not the directing mind of Barclays — and, therefore, Barclays could not be prosecuted on the SFO’s evidence. Mr Varley was answerable to the board, which in the judge’s view meant he was not working as the company but for the company. Mr Justice Jay acquitted Mr Varley halfway through the first jury trial in 2019 on the basis that the SFO had brought insufficient evidence to show he had acted dishonestly; he could not be held accountable for alleged misrepresentations made to the market in Barclays’ name. In essence, the bank could not be held accountable for the actions of the chief executive, but neither could the chief executive be accountable for the actions of Barclays. In an unsuccessful appeal against Mr Justice Jay’s decision the SFO argued that the dual rulings would allow directors to “insulate themselves from liability” and make such alleged offences “impossible to prosecute”. Sheikh Hamad bin Jabr alThani: The money man Once the powerful prime minister of Qatar. Often known simply as HBJ, he also chaired Qatar Investment Authority which invested in Barclays. He first met Roger

Continues on page 48

Tuesday 10 March 2020

BUSINESS DAY

NATIONAL NEWS

Companies move to cover costs of coronavirus

Executives under scrutiny for how they treat customers and employees during outbreak Andrew Edgecliffe-Johnson

S companies are moving to reassure employees and customers that they will not be left out of pocket by coronavirus disruptions, pledging to shoulder the cost of medical testing, cancelled holidays, bank fees and lost wages. As executives grapple with the outbreak’s short-term effects on their supply chains and struggle to gauge its longer-term effects on demand, they are also under scrutiny for how they treat their most vulnerable customers and the cleaners, cooks and other workers who they pay by the hour. After Microsoft advised workers in the Seattle region to work from home, president Brad Smith noted in a blog post on Thursday that this could cause “hardship” for café staff, shuttle drivers and other support staff paid by the hour. The software company has decided to continue to pay those workers their usual rates, he said: ensuring that 4,500 hourly employees in its facilities “will continue to receive their regular wages even if their work hours are reduced”. “This is an unprecedented moment. It’s important that we approach it with a sense of calm and responsibility — because we have many people counting on us,” said Sundar Pichai, chief executive of Google and its parent company, Alphabet. The company would also ensure that hourly workers whose schedules

A worker wipes down fare gates at the Montgomery Street Bay Area Rapid Transit station on Saturday in San Francisco. © Getty

have been cut are compensated for the time they would have worked, he said on Friday. Chuck Robbins, chief executive of Cisco, promised similar support, saying on Twitter: “I encourage all of our peers to consider this as well.” Tim Ryan, chairman of PwC US, noted the outbreak followed a period in which companies have been talking up their “purpose” and their responsibilities to a broad set of stakeholders, rather than to shareholders alone. In

that context, the need to be seen to treat employees well outweighs the potential costs. “How [CEOs] react to it will be remembered. There’s a shortterm cost and none of us knows whether that will [last for] a quarter, six months or longer, but talent has a long memory and we are short of that talent,” he said. Companies’ responses to the coronavirus outbreak will highlight how widely they offer health benefits and paid time off, added Martin Whittaker, chief

executive of Just Capital, a nonprofit that ranks companies’ by their treatment of workers and other stakeholders. Business has also been at pains to reassure customers in recent days, as economists warned about a potential blow to consumer confidence. Citigroup announced on Friday it would offer assistance to individuals and small businesses affected by the outbreak, including waiving penalties and monthly fees. Aetna and Cigna were among

several health insurers saying they would shoulder “co-pays” and other costs of diagnostic testing and telemedicine visits for their members. And as the cruise industry’s trade association warned against any moves to impose restrictions on the industry, some operators scrapped their usual penalties for cancellations. Royal Caribbean said guests could cancel up to 48 hours before a sailing and receive full credit to be used before the end of 2021.

Barclays: the legal fight over a company’s ‘controlling mind’ Continued from page 47 Jenkins on a yacht in Sardinia in 2007, and a year later invested over £800m in Barclays. He was one of the Qatari investors who received a share of the £322m in fees paid by Barclays that were at the core of the Old Bailey trial. In a bid to clarify the law, Ms Osofsky could now ask the attorney-general to make a special reference to the Court of Appeal — this involves granting permission for a special case to be brought to decide a point of law. She has long called on parliament to overhaul “antiquated” fraud laws and allow prosecutions if a company fails to take adequate steps to prevent fraud by employees. “Although it’s easy from the sidelines to ask why haven’t people been held to account, and why haven’t there been criminal convictions a lot of the things that went on are difficult to prove to a criminal standard,” says Mark Button, director of the centre for counter-fraud studies at Ports-

mouth University in the UK. “And that is why not a lot has happened”. The identification principle governs almost all areas of corporate crime except bribery, where, since 2010, it has been possible to prosecute corporations under the UK Bribery Act for failure to prevent graft in their organisation. Since 2017 failure to prevent also covers tax evasion charges. Mr Green, and others, want parliament to extend that “failure to prevent” to cover economic crime, which would make it easier to prosecute large companies. The SFO has also been striking US-style deferred prosecution agreements where a company agrees to pay a hefty fine and overhaul compliance in exchange for a suspension rather than a prosecution. Since 2014 it has struck DPAs with seven companies, including Rolls-Royce, Tesco and, most recently, Airbus. But in none of those cases have any individuals been convicted, either because the SFO chose not to pursue charges, or because it failed at trial. www.businessday.ng

But the SFO’s approach to DPAs has raised questions over whether the process is fair because individuals can be named publicly as the wrongdoers and directing minds in a DPA yet be acquitted by a jury in a criminal court. In the Tesco case, the judge threw out the SFO’s case against three ex-executives on trial because it was “so weak”, even though they had been named as the supermarket’s directing mind in the corporate DPA. “We now have a system where it’s all about the money,” says Jonathan Pickworth, a lawyer at White & Case. “It’s almost like a new system of taxation, with little concern from the SFO about whether it can successfully prosecute the individuals whom the company and the SFO conveniently agree are responsible for the alleged offences.” More than a decade on from the emergency cash calls in question, the world has changed. Qatar is not quite the global powerhouse it was in 2008 after being isolated by its neighbours over regional

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divisions. Yet the Qatar Investment Authority, the state-owned holding company, remains the secondlargest shareholder in Barclays. For the bank, the spectre of a years long investigation — one of several misconduct issues it has faced — has weighed on its reputation. It still faces an outstanding £1bn lawsuit over claims of deceit by the firm founded by Amanda Staveley, the financier who orchestrated Abu Dhabi’s investment into the October fundraising. Barclays, and indeed Mr Varley and Mr Jenkins, now face delayed regulatory scrutiny from the Financial Conduct Authority over the Qatari affair. It was the FCA’s predecessor body, the FSA, that first opened a file on the bank after finding suspect emails during a routine visit in 2011. But for the SFO, the case has become bigger than the sum of its parts. The acquittal of Mr Varley and the scrubbing of the corporate charges in particular strike at its very purpose of being a “specialist prosecuting authority @Businessdayng

tackling the top level of serious or complex fraud” as the agency describes itself. The UK is not unique in failing to secure any convictions of bankers since 2008 despite banks paying eye-watering fines and costs in related litigation. The US has imprisoned just one banker over the crisis: a junior Credit Suisse trader, for inflating the price of subprime mortgages. He received a 30-month sentence. Elizabeth Warren, who until last week was vying to become the Democratic presidential candidate, tweeted that giant banks “will only clean up their act when their executives know they’ll face handcuffs when they preside over massive fraud”. In the UK Ms Osofsky has said the agency is “hamstrung” by the directing-mind principle. She told parliamentarians last year that without reform: “I can go after Main Street, but I can’t go after Wall Street”; in other words, small companies but not corporates with layers of control.

Tuesday 10 March 2020

BUSINESS DAY

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Tuesday 10 March 2020

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Monday 09 March 2020

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 271,920.98 7.65 -10.00 70 2,659,662 UNITED BANK FOR AFRICA PLC 213,746.38 6.25 -9.42 158 6,578,565 ZENITH BANK PLC 532,170.57 16.95 -9.84 598 53,514,893 826 62,753,120 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 174,092.17 4.85 -9.35 115 4,876,434 115 4,876,434 941 67,629,554 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,340,769.00 115.00 - 48 151,390 48 151,390 48 151,390 BUILDING MATERIALS DANGOTE CEMENT PLC 2,896,886.26 170.00 - 22 32,278 LAFARGE AFRICA PLC. 219,871.41 13.65 - 26 313,083 48 345,361 48 345,361 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 356,008.96 605.00 - 5 2,847 5 2,847 5 2,847 1,042 68,129,152 REAL ESTATE INVESTMENT TRUSTS (REITS) SFS REAL ESTATE INVESTMENT TRUST 1,386.00 69.30 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 8,538.46 3.20 - 43 3,013,491 43 3,013,491 43 3,013,491 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 43 3,013,491 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 58,570.07 61.40 - 3 570 PRESCO PLC 44,900.00 44.90 - 2 400 5 970 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,500.00 4.25 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,830.00 0.61 -7.58 11 848,580 11 848,580 16 849,550 DIVERSIFIED INDUSTRIES JOHN HOLT PLC. 217.92 0.56 - 2 11,258 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 31,298.95 0.77 -9.41 95 23,059,468 U A C N PLC. 22,906.31 7.95 -9.66 32 1,077,276 129 24,148,002 129 24,148,002 BUILDING CONSTRUCTION ARBICO PLC. 469.26 3.16 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 29,568.00 22.40 - 16 120,516 165.00 6.60 - 0 0 ROADS NIG PLC. 16 120,516 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,390.52 0.92 -9.80 6 232,947 6 232,947 22 353,463 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 6,107.01 0.78 - 9 122,500 GOLDEN GUINEA BREW. PLC. 220.45 0.81 - 0 0 GUINNESS NIG PLC 55,197.65 25.20 - 17 46,415 INTERNATIONAL BREWERIES PLC. 189,377.58 7.05 - 7 24,061 NIGERIAN BREW. PLC. 293,886.15 36.75 -9.93 19 2,037,470 52 2,230,446 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 132,000.00 11.00 - 38 196,648 FLOUR MILLS NIG. PLC. 90,208.35 22.00 - 26 786,545 HONEYWELL FLOUR MILL PLC 6,899.27 0.87 -9.37 13 948,055 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 34,442.70 13.00 - 25 692,138 UNION DICON SALT PLC. 2,993.06 10.95 - 0 0 102 2,623,386 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 13,804.78 7.35 -9.26 28 575,112 NESTLE NIGERIA PLC. 806,131.41 1,017.00 - 49 32,683 77 607,795 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 5,090.94 4.07 -9.96 28 1,045,010 28 1,045,010 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 17,668.62 4.45 - 31 349,213 UNILEVER NIGERIA PLC. 67,216.56 11.70 -10.00 34 789,023 65 1,138,236 324 7,644,873 BANKING ECOBANK TRANSNATIONAL INCORPORATED 97,252.62 5.30 -9.40 28 708,299 FIDELITY BANK PLC 52,154.63 1.80 -10.00 31 2,329,636 GUARANTY TRUST BANK PLC. 651,900.62 22.15 -9.96 208 15,205,747 JAIZ BANK PLC 15,321.41 0.52 -8.77 19 1,666,658 STERLING BANK PLC. 40,594.49 1.41 -9.62 9 359,777 UNION BANK NIG.PLC. 205,301.31 7.05 - 4 387 UNITY BANK PLC 5,610.88 0.48 -9.43 10 829,380 WEMA BANK PLC. 21,215.96 0.55 -9.84 16 2,528,020 325 23,627,904 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 8,497.65 0.75 -9.64 23 2,860,491 AXAMANSARD INSURANCE PLC 17,640.00 1.68 - 21 343,802 CONSOLIDATED HALLMARK INSURANCE PLC 2,439.00 0.30 7.14 9 1,393,000 CORNERSTONE INSURANCE PLC 6,628.28 0.45 -10.00 3 166,000 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,611.16 0.22 -8.33 7 3,024,445 LAW UNION AND ROCK INS. PLC. 4,296.33 1.00 -4.76 78 6,874,464 LINKAGE ASSURANCE PLC 3,200.00 0.40 - 0 0 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 1 50,000 NEM INSURANCE PLC 9,135.27 1.73 - 26 2,333,287 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 2,960.40 0.55 - 3 157,500 REGENCY ASSURANCE PLC 1,333.75 0.20 - 6 1,818,842 SOVEREIGN TRUST INSURANCE PLC 2,272.89 0.20 - 0 0 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 7,917.25 0.33 -9.09 21 6,371,530 198 25,393,361 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,149.44 0.94 -9.62 14 625,534 14 625,534

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 6,784.62 1.05 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 5,671.82 1.36 - 0 0 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 8,000.00 4.00 - 30 275,840 CUSTODIAN INVESTMENT PLC 32,056.16 5.45 - 17 367,220 495.00 0.33 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 33,070.53 1.67 -9.73 32 1,615,276 ROYAL EXCHANGE PLC. 1,131.98 0.22 - 2 10,024 330,906.47 31.50 -10.00 29 5,309,133 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 14,040.00 2.34 -10.00 46 1,477,974 156 9,055,467 693 58,702,266 HEALTHCARE PROVIDERS EKOCORP PLC. 2,742.30 5.50 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 710.63 0.20 - 1 100,000 1 100,000 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 5,299.36 2.54 - 7 21,600 GLAXO SMITHKLINE CONSUMER NIG. PLC. 4,125.77 3.45 -9.21 51 1,557,115 3,709.26 2.15 - 5 15,200 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 759.66 0.40 -9.09 12 609,143 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 1 5,000 76 2,208,058 77 2,308,058 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 -4.76 4 741,500 4 741,500 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,088.46 0.37 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 237.60 2.20 - 0 0 287.07 0.58 - 0 0 TRIPPLE GEE AND COMPANY PLC. 0 0 PROCESSING SYSTEMS CHAMS PLC 1,033.13 0.22 -8.33 14 5,076,584 E-TRANZACT INTERNATIONAL PLC 10,962.00 2.61 - 2 2,844 16 5,079,428 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,123,311.48 298.90 - 7 16 7 16 27 5,820,944 BUILDING MATERIALS BERGER PAINTS PLC 1,767.92 6.10 - 21 68,342 BUA CEMENT PLC 1,195,411.70 35.30 - 9 24,513 CAP PLC 15,505.00 22.15 - 13 70,637 MEYER PLC. 244.37 0.46 - 0 0 1,769.32 2.23 - 1 25,000 PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 44 188,492 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,192.12 2.03 - 0 0 2,465.85 1.40 -10.00 18 777,542 CUTIX PLC. 18 777,542 PACKAGING/CONTAINERS BETA GLASS PLC. 34,998.04 70.00 - 0 0 GREIF NIGERIA PLC 388.02 9.10 - 0 0 0 0 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 1 20 1 20 63 966,054 CHEMICALS B.O.C. GASES PLC. 1,685.79 4.05 - 3 1,500 3 1,500 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 1 400 1 400 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 77.00 0.35 - 0 0 0 0 4 1,900 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 4 82,728 4 82,728 INTEGRATED OIL AND GAS SERVICES OANDO PLC 30,208.33 2.43 -10.00 52 954,610 52 954,610 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 52,827.21 146.50 - 39 153,952 ARDOVA PLC 19,927.96 15.30 - 6 31,970 CONOIL PLC 11,242.02 16.20 -10.00 11 293,715 ETERNA PLC. 2,634.37 2.02 - 18 331,676 MRS OIL NIGERIA PLC. 4,206.05 13.80 - 1 3,000 TOTAL NIGERIA PLC. 36,328.84 107.00 - 15 18,300 90 832,613 146 1,869,951 ADVERTISING AFROMEDIA PLC 1,509.28 0.34 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 15,796.05 1.62 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 235.27 0.20 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,779.06 3.00 -8.26 16 432,252 TRANS-NATIONWIDE EXPRESS PLC. 421.96 0.90 - 1 500 17 432,752 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,259.15 2.75 - 0 0 IKEJA HOTEL PLC 2,515.34 1.21 - 0 0 TOURIST COMPANY OF NIGERIA PLC. 7,076.28 3.15 - 1 100 TRANSCORP HOTELS PLC 30,781.64 4.05 - 4 1,318 5 1,418 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 3,960.00 0.33 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 223.78 0.37 - 0 0 LEARN AFRICA PLC 856.31 1.11 - 14 89,330 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 431.41 1.00 -4.76 18 527,174 32 616,504 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 513.89 0.31 - 0 0 0 0 SPECIALTY INTERLINKED TECHNOLOGIES PLC 688.80 2.91 - 0 0

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leaderSHIP

BUSINESS DAY Tuesday 10 March 2020 www.businessday.ng

CEO in focus

How John Obaro plans to build a global brand in SystemSpecs

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DIPO OLADEHINDE

ohn Obaro is championing a vision at SystemSpecs, an indigenous software company most famous for the Remita e-payment solution, known for powering the services of most of the country’s top lenders and Nigeria’s Treasury Single Account policy. Obaro is one man who has successfully weathered the highs and lows of business ownership to not only build but sustain the success of the fintech powerhouse known today as SystemSpecs for over twenty-six years. For him, entrepreneurship has proven to be a worthwhile journey, notwithstanding the days of humble beginnings when efforts did not meet commensurate applause. Founded about 28 years ago, SystemSpecs is translating the African technology dream into reality by providing innovative technology solutions and services to organisations and individuals on the continent. Since the inception of its data referencing service in 2017, SystemSpecs has become wellknown as a key enabler in the ecosystem by providing insight on credit, streamlining lender’s risk decisions and facilitating the lending of over N35 billion to individuals and SMEs. Obaro’s entrepreneurship story is that which remains a source of inspiration for upcoming entrepreneurs. With the intrigues of uncertainty, Obaro took a plunge, resigning as a young and privileged banker at the International Merchant Bank (IMB) to establish his own technology firm, SystemSpecs. In time, the firm grew from a five-man Partner Agent of Systems Union, UK in 1992 to become a leading provider of the most widely deployed indigenous human capital software solution (HumanManager) and the most innovative and acceptable financial remittance solutions not only in Nigeria but also within the West African subregional market (Remita). For SystemSpecs, Nigerian and African origins remain a driving force as veritable sources of innovative technology that can rival any from other parts of the world which is why the company is developing and will unveil in quick succession various financial solutions to promote the Federal Government’s financial inclusion drive. The fintech expert noted that having done significantly well in the public sector through the adoption of the firm’s solutions by governments across Africa, and oversees the Federal Government of Nigeria’s Treasury Single Account (TSA) by Remita

Since the inception of its data referencing service in 2017, SystemSpecs has become well-known as a key enabler in the ecosystem by providing insight on credit, streamlining lender’s risk decisions and facilitating the lending of over N35 billion to individuals and SMEs Obaro

in about 22 states nationwide, SystemSpecs wants to expand to the private sector. Under the leadership of John Obaro, the company recently unveiled a new corporate identity which includes a new logo, new headquarters and the launch of Paylink by Remita, a product that allows individuals optimise social media as a one-stop-shop to receive payments by sharing a link. John Obaro said the firm’s values of ethics, diligence and integrity in business and friendship with customers remain the same. “Easily recognisable for the development and provision of top-class software technology solutions and services, we desire that our name resonates with all our stakeholders—customers, partners, investors, talent, aggregators, regulators, among others—anywhere on the globe as the home of inspired people, innovative solutions, excellent customer service and integrity,” he said at a recent event at the

company’s headquarters. Obaro, added that while SystemSpecs’ corporate brand identity would be refreshed to advantageously position the brand to harness the limitless opportunities of the future, the firm’s, “values of ethics and integrity in business, true friendship with our customers, open family-based relationships at work, respect for our neighbourhood and our people, and diligence in our work that we may stand before kings,” would remain the same. In order to maximise its potentials as Africa’s leading financial technology and human capital management firm, Obaro said the company’s new structure of operation reinforces its commitment to better serve its customers across different spectra, improve its visibility and cross-industry prominence, and free up its people for business and career growth. In affirmation of its new strategy business direction, SystemSpecs also recently restructured

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Founded about 28 years ago, SystemSpecs is translating the African technology dream into reality by providing innovative technology solutions and services to organisations and individuals on the continent

its new business operation into four strategic business units (SBU), namely Infrastructure and Payment Gateway; Application and Vertical Markets; Human Capital Solutions and Services; and Public Sector and Special Projects. It said the infrastructure and payment gateway business unit will provide a technology backbone to banks, payment processors, aggregators, and other service providers while the applications and vertical markets units will be responsible for all retail and corporate customerfocused financial products and services. Human capital solutions and services unit, it said, will manage all payroll and human resourcesfocused products and services. The company said its public sector and special projects unit will be in charge of the adoption of the firm’s solutions by governments across Africa and would oversee the federal government’s treasury single account (TSA) and its business in about 22 states nationwide. He disclosed that despite all the controversies surrounding the platform, the company processes about N20trillion yearly on TSA, and had saved the government about N450million monthly with IPPIS at the pilot stage, before it was awarded to a different contractor. On how the business has managed to stay afloat, despite not listing on the Nigerian Stock Exchange, Obaro noted that

SystemSpecs is mainly driven by organic growth which was built over the years. “Our payments solution, Remita is what many people know us for now. But our depth is more in Human Management. In fact, we originally built Remita to augment Human Manager. But then it has taken a life of its own, especially after we got into the federal government TSA programme which gave us some good or bad visibility, whichever way you want to see it,” Obaro said. On how SystemSpecs has fared outside of Nigeria, Obaro said countries across the continent are often impressed at the features and capabilities of its products and regularly express interest in exploring how our solutions can make their work and life better. “Our human capital management solution, Human Manager, has performed admirably outside the shores of Nigeria. It is tested and trusted by many multinationals with operations in a number of African countries. Our major focus was to ensure Remita becomes a major force to reckon with here in Nigeria and then begin to explore taking it out to other African countries,” Obaro said. Before Obaro started the company in 1992, the computer science graduate and MBA holder had built a decade-long successful career as a software developer and IT executive. He was among the team, at the now-defunct International Merchant Bank (IMB), that built Nigeria’s firstever online banking platform. Obaro graduated from Ahmadu Bello University, Zaria with a degree in Mathematics and Computer Science in 1979. He proceeded to earn an MBA from the University of Lagos in 1982 and was a member of one of the earliest sets of the distinguished Chief Executive Program of Lagos Business School at the PanAfrican University, Lagos. Overtime, one of the major hindrance to the growth of Small and Medium Enterprises (SMEs) is the lack of access to funds as a result of stringent measures such as lengthy, torturous approval processes as well as convoluted requests for collaterals. Experts have said a virile finance and credit system is a key enabler to the realisation of a number of sustainable development goals, particularly in reducing poverty and raising peoples’ social status, a development SystemSpecs under the leadership of John Obaro remains committed to most especially in empowering the delivery of digital lending to individuals, SMEs and larger organisations to enable them meet their financial needs.

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