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news you can trust I ** wednesDAY 11 march 2020 I vol. 19, no 517

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Atedo Peterside says Sanusi’s removal has sent Nigeria backward, opts out of confab on economy ... deposed emir gets board appointment in Kaduna ... legal team raises alarm over Sanusi’s safety segun adams (Lagos) & Adeola Ajakaiye (Kano)

ell-respected banker and founder of Anapjet, Atedo Peterside, has lashed out against the controversial removal and banishment of former Emir of Kano, Sanusi Lamido Sanusi, calling it an affront on the Nigerian constitution. He has also warned of a high likelihood of Nigeria falling into another economic recession if the right policy mix was not adopted urgently. In a letter to the governor of the Central Bank who had invited him to a conference holding this morning to discuss the economy, Peterside said he chose to stay away from the meeting in protest against the action of the Kano State governContinues on page 39

Inside

Shell-Ejama community dispute: First Bank sets record straight P. 37 Go underweight Nigerian banks, EFG Hermes tells investors P. 37

L-R: Duoye Diri, governor, Bayelsa State; Ben Ayade, governor, Cross River State; Godwin Obaseki, governor, Edo State; Placid Njoku, deputy governor, Imo State; Rotimi Akeredolu, governor, Ondo State, and Nyesom Wike, governor, Rivers State, during the inauguration of the advisory committee of the Niger Delta Development Commission at the Presidential Villa in Abuja, yesterday.

Nigerians buy dollars to hedge uncertainty amid FG inaction LOLADE AKINMURELE & SEGUN ADAMS

he currency of Africa’s top oil producer fell by 2 percent at the black market to N367 Tuesday from N359 a day earlier as Nigerians piled into the dollar to hedge against a possible devaluation of the naira, amid a lack of reassurance from the Federal Government over the growing economic

Naira falls in black market on higher demand Stocks selloff continues, MTNN drops to lowest since listing

uncertainty. Despite clawing back some of its 24 percent loss Monday, rising 9.75 percent to $37.71 per barrel Tuesday, Brent crude remains below Nigeria’s budget

benchmark of $57 a barrel, piling pressure on Nigeria at a time of weak fiscal and external buffers. Fears over a second naira devaluation in four years have heightened since the plunge

in oil prices which has led to dwindling export revenue and fast depleting foreign-exchange reserves. Continues on page 39

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Like Easter like Yom Kippur: The essence of multiple streams of income Small Business handbook

Emeka Osuji

salient point about history is that it takes its cue, on reward and punishment, from the Old Testament. It gives an eye for an eye and takes a limb for every limb. Accordingly, history is kind only to those that are nice enough to remember it. Those who forget it and, especially, those who banish it from their academic curricula, are punished without abatement. The 1973 Yom Kippur War, between Israel and the Arabs led by Egypt and Syria, the fourth Arab-Israeli war, which lasted from the 6th to the 25th of October, turned oil into a famous celebrity product around the world. Prior to that event, oil which was said to have been discovered in Oloibiri in today’s Bayelsa State in 1956 (now a hotly disputed part of our national colonial story), was not of much significance in the finances of the people of the protectorates. It is now the only significant thing. As Easter approaches and an oil trade war, between Saudi Arabia and Russia, looms large, a reenactment of the Yom Kippur war, which happened during a Jewish festival by that name, seems to be in the offing – the Easter Oil Price War. Trouble began when Russia decided not to be part of a Saudi-led proposition of PEC Plus members to cut output by about 1.5million barrels per day. Of course, by the size of its output, Russia would have borne a

large chunk of the cut; something in the region of about 500,000barrels per day. In reaction, Saudi Arabia opted to raise its production and flood the market. Price went rolling down the hill, tearing through the Nigerian government 2020 budget in its wake. This event is going to be very significant in the lives of men and nations. Already, Nigeria is in the loan market, having worked through the National Assembly, to borrow 23billion US dollars to finance some infrastructure, controverted for their lack of national spread and capacity to yield foreign currency (or any currency at all) for servicing the loan, meant to be repaid in dollars. Indeed, palpable restiveness has enveloped the air in many countries, including Nigeria, which for all intents and purposes, now has its national budget limping towards the south as oil prices race towards 25 US dollars. Energy stocks reacted violently on Monday following massive sell off triggered by the fears of both the oil price war and Coronavirus. The implications of these events on poverty and its many indivisibilities will be telling, especially for countries relying mostly on oil. The significance of oil was bolstered during the Yom Kippur War because the Arabs collectively boycotted any form of oil trade with the friends of Israel, which are essentially the Western nations. The result was an astronomical hike in the price of crude oil. It also presented Nigeria with the biggest temptation it has ever faced – the temptation to abandon all other sources of income to concentrate on oil. Some have argued that most of the troubles we face today in Nigeria are by-products of excessive dependence on oil, including the operation of a unitary government in the name of a federation, and the adoption of a wasteful presidential system fraught with incongruencies. These are in addition to the

famous Dutch Disease that has afflicted the country over the past several decades. The yoyo that has become the finances of the government of Nigeria typifies the lot of an individual with only one skill, and derivatively, a single source of income. Some people go to school and graduate in a discipline, say Economics, and that’s all. Although they may be the best in that particular discipline, they know little about anything else. If you mention anything else, they are quick to brandish their undoubtedly very good credentials in their discipline, and tell you they are not interested in the rest. Their income is from this one discipline only. Even if they lose their jobs in that field, they wait till another one comes in the same field. If the industry goes into recession, they will not retrain but instead wait for the recession to end. These people have only one stream of income. If anything happens to that stream they go dredging the earth around the stream only, to ensure that water (income) continues to flow but it doesn’t. Unfortunately, the impact of technology, globalization and all the bad/ good things of this modern era are quick to turn lucrative careers into relics of history. Sometimes they even ensure that a stream of income, once dried up, never returns. That is what is happening to the giant nation of Africa, whose foot is rapidly turning into clay. Nigeria has only one significant source of foreign exchange earnings, petroleum. It currently produces about two million barrels a day, and its price determines what revenues she has for national projects. All other sectors of the economy have continued to play minor roles over time. Somehow, the fear of the consequences of over-dependence on oil has, from time to time, been recognized, discussed and seemingly properly un-

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Every individual must learn to avoid the Monocultural economic challenges Nigeria has put upon itself by developing alternative careers and hence streams of income

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

The many or the few?

elow, is something I stumbled across a little while ago and it really got me thinking. It went like this: (A) African leaders are high on rhetoric but shallow in execution. (B) They often lack the ability to establish a sound and strategic balance between politics and economic development. (C) Many display low moral standards in personal conduct and public office performance. (D) They possess poor social skills to mobilise across ethic/tribal boundaries - often evoking tribal differences to gain or maintain power. Do any of these ring true to you? And if they do, when? In the past or now? It saddens me to say that in general, all the observations above appear quite correct. At least, in my humble opinion. It depresses me to say they seem even more so now than ever before. Particularly, if Nigeria is anything to go by. For the sake of this discussion though, we will concern ourselves with just the first three submissions. Nigerian leaders have never been short of rhetoric; always very quick to make fantastic promises, especially when soliciting our votes during the election period, but seldom following through to implement or execute them for the benefit of these same voters. This propensity to say what they don’t mean and meaning what they don’t say, is largely responsible for the noticeable voter’s apathy, witnessed during our general elections for some time now. Talk is cheap, as they say. Here is also a country where everything is politicised and the country is the worse off for it. Policies which would benefit the people and bring meaning to their lives is sacrificed on the altar of politics. Examples abound, but two which readily

come to mind are instances which we were told occurred during the Obasanjo Presidency. According to what one read in the newspapers then, the Governor of Lagos state at the time, had concluded plans to reconstruct the road leading to Murtala Mohammed International airport and had in fact mobilized the construction company to site; only for hoodlums brandishing all sorts of dangerous weapons to storm the place and chase all the workers away. According to the report, it was suspected that they were doing the bidding of the then Federal Minister of Works, also a Lagosian, who insisted that only the Federal government had the right to repair the road, as it was, and remains a Federal road. Incidentally, that same road was recently reconstructed and it may further interest you to know this only happened when the ruling political party at the centre also held sway in the state. In this country, it’s always about politics. A similar incident was said to have occurred at the Lagos state end of the Lagos - Ibadan expressway, involving the same political rivals. And because of this, those travelling in and out of Lagos would continue to risk their lives driving on the notorious, pothole infested road for another decade or more before it’s finally reconstructed; much like the road leading to the airport which had for long become a national embarrassment. All this, because the two political actors happened to be in opposing political camps; that’s all. Political consideration took precedence over the safety and convenience of fellow Nigerians. How does one also begin to quantify what the people of this nation have lost over the decades, in terms of economic development, because politics took priority over the people? This has a been a recurring decimal

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here for far too long. Our leaders urgently need to be reminded that Nigerian lives matter too. As regards low moral standards in personal conduct and public office performance, we will be here all day if we start talking about corruption. So, I’ve decided to approach it from a different angle. Instead of listing all the corruptive acts our leaders have become infamous for, I want to examine a theory about what constitutes morality. The Utilitarian theory, championed by Jeremy Bentham says an action would be adjudged moral or not, by its consequences. So, if your action causes the greatest amount of joy to the greatest number of people, while causing harm or pain to the least number of people, it would be considered morally right. This means the number of people your action benefits, must by far outweigh those whose interest, it’s detrimental to. Of course, it also means that an action which may appear wrong “to the naked eye” could eventually be judged to be moral, if it benefits more people than those it doesn’t. With that established, let’s now look at the decision taken by our House of Representative members recently, to import three hundred units of the 2020 Toyota Camry, for the purpose of carrying out their official duties. If one is to employ the theory of Utilitarianism as a barometer, how morally right would their course of action be considered to be? How many of their compatriots, who they purport to represent, does it benefit, for the government to utilize scarce foreign exchange to import these vehicles? Does a decision to choose this option, over purchasing vehicles assembled here in Nigeria, where the funds will remain here, appear remotely patriotic? Does it beat a wonderful opportunity to boost our already

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derstood in Nigeria. This is apparently the reason why several committees and economic experts have recommended the diversification of the Nigerian economy away from oil. Sadly, like a man under a trans, Nigeria continually saunters away from this all-important national challenge. As a result, there seems to be no end to the confusion in Nigeria’s economic management community, which catches cold every time oil prices sneeze. The youth must learn from Nigeria’s inability to develop its economy away from oil dependence. We all have our individual economies, just like nations, and we can make the same mistake Nigeria has made. Certain mistakes die hard, and more so when they relate to careers. We may get too old to retrain and even if we do, we might not be employable for age, and can ill afford the gestation period of some businesses. So we must train as much as possible now, ensuring that we do have alternative steams of income. Young people must avoid the many easy steps to poverty. One of them is lack of alternative competencies or fixation to a single career or source of income. Nigeria has failed in many ways: a failed automotive industry policy that disregards local production, and spites made-in-Nigeria cars; a totally impotent economic diversification policy that pays lip service to economic reform, and a shameful failure to cut the cost of governance and curb daylight robbery by state governors, who complete looting their states, award themselves shameful retirement benefits and begin new careers at the National Assembly. Every individual must learn to avoid the Monocultural economic challenges Nigeria has put upon itself by developing alternative careers and hence streams of income.

Character Matters with Daps

Dapo Akande prostrate economy, by helping local assembly plants to expand and increase capacity through increased patronage? Does it make more economic sense than supporting the growth of local factories so they can employ more staff, thereby removing many from the disgraceful unemployment statistic of 23 percent in 2018, which is expected to reach an alarming rate of 33.5 percent this year, according to a report in the Daily Post? I’ll leave you to answer all those questions. One thing I will say though is that their action which at least on the surface of it, appears to only benefit about 300 people out of a population of over 200 million, is not too different to that of the former Minister of Works, who believed it more important to satisfy his ego than yield to a move which would serve the interest of the general populace. It doesn’t take a genius to guess what Jeremy Bentham would have said about that. Not all actions which fall on the right side of the law can also boast of being ethical. The many or the few? The choice is yours. Changing the nation...one mind at a time. Akande is a graduate of the University of Surrey, UK, author of the acclaimed book: The Last Flight: A personal journey to discovering values. Contact: dapsakande25@ gmail.com

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The Coronavirus and the Nigerian economy

Olanrewaju Rufai

s fears of a global coronavirus pandemic continue to grow, there are increasing worries it could bring the global economy to a standstill. The new coronavirus, otherwise referred to as COVID-19, which originated in the central Chinese city of Wuhan, has already killed almost 4,000 people and infected over 100,000 across at least 25 countries and territories. Although Wuhan and several other cities have been locked down, the virus continues to spread, with one confirmed case in Nigeria. Given the overall vulnerability of the Nigerian economy to external shocks, particularly to volatility in global crude oil prices and disruptions in China, the nation’s biggest trading partner, the impact of the coronavirus on Nigeria cannot be underestimated. Already, the outbreak has caused severe economic and market dislocation across the globe, disrupting global supply chains and travel. This is particularly compounded by the strategic importance of China to an increasingly connected global economy. The effects of all these on

Nigeria are not insignificant. Most glaring is the impact of the pandemic on the global prices of crude oil, Nigeria’s major export. Since January, the spread of the coronavirus has sent global stock markets tumbling and reversed nearly all the positive momentum in oil prices over the past four months. As the virus spreads beyond Asia, the oil market continues to suffer enormous losses, with Brent crude oil prices falling to $45 per barrel. Furthermore, the near-term outlook looks grim while the forecast for the rest of the year remains considerably unfavourable. The effect of this development on the Nigerian economy could be significant. The last major crash in the price of crude oil in 2014 precipitated the downturn in the nation’s economy, culminating in a recession. Thus, there are reasonable fears that a sustained period of low oil prices could send the nation’s economy spiralling into another downturn. This is quite worrying given that since the 2014 slump in global oil prices, the Central Bank of Nigeria (CBN) has rolled out a string of policies geared towards maintaining an artificially strong Naira reliant upon high crude oil prices and external borrowings. Thus, if crude oil prices remain in the $40-range for an extended period of time or drop even further, there could be even more pressure on the already pressured exchange rate and the nation’s overall economy. In addition, the current crude oil price of $45 a barrel is significantly below the $57 a barrel benchmark planned in the nation’s 2020 federal

budget. Therefore, if the low crude oil price regime persists for an extended period of time, the viability of the nation’s 2020 budget will remain further in doubt. Already, the nation’s Finance Minister has alluded to this, expressing worries that a sustained period of low crude oil prices could scupper the nation’s financial projections. Another risk posed by the COVID-19 pandemic to the Nigerian economy is the likelihood that the nation’s already high inflation rate could rise even further. Given that China accounts for about a quarter of Nigerian imports, greasing much of the country’s supply chain; and that the nation is reliant on China for raw materials, inputs and machinery utilized in local production, there is a significant possibility that the pandemic could induce an increase in the cost of local production or at least a significant reduction in the already limited local production capacity. Furthermore, if China remains unable to export due to a myriad of reasons, there is a risk that raw material and inputs usually sourced from China for the manufacturing industry might need to be sourced from other nations where they are presumably more expensive. The economic effect of this will also be an increase in the prices of goods and services, thus resulting in a rise in the inflation rate. All of these highlight a fundamental structural problem with the Nigerian economy. Nigeria typically exports low value raw materials and imports high value finished goods, a situation which makes the nation’s economy highly susceptible and vul-

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All of these highlight a fundamental structural problem with the Nigerian economy. Nigeria typically exports low value raw materials and imports high value finished goods, a situation which makes the nation’s economy highly susceptible and vulnerable to external shocks

nerable to external shocks. Therefore, there is a need to encourage local manufacturing and spur the export of processed goods. Perhaps most importantly, there is a need to address the biggest elephant in the room: Nigeria’s reliance on the sale of crude oil as the major source of the nation’s foreign exchange earnings. There is a need to diversify the nation’s economy away from a reliance on crude oil. The need to restructure and diversify the productive base of the economy, with a view to reducing dependence on the oil sector and imports has never been more apparent. As long as the Nigerian economy remains a monoeconomy totally dependent on oil revenues, the nation will continue to remain vulnerable to oil price shocks. Therefore, Nigeria needs to ensure sustainable fiscal management that is resilient to global oil price cycles. Overall, there is a significant likelihood that the economic impacts of the coronavirus pandemic on the Nigerian economy could be even more far-reaching and extensive than anticipated. Given the overall vulnerability of the Nigerian economy to volatility in global oil prices and disruptions in its biggest trading partner, China, the impact of coronavirus on Nigeria might go far beyond infectious diseases. Therefore, now is the time to act and set plans in motion to protect the nation’s economy from an impending COVID-19 induced disaster. Rufai holds a first class degree in Management and Masters degrees in Management and Finance. He is a finance and strategy analyst and can be found on Twitter @LanreRufai_.

Achieving sustainability in business; the how and why

he concept of Sustainability in business (also known as Corporate Sustainability) centres on meeting present needs without impeding the ability of future generations to meet their needs. Investopedia indicates that the concept of sustainability comprises of three pillars: economic, environmental, and social. The pillars can also be referred to informally as profits, planet, and people. They are sometimes also referred to as the triple bottom-line. The Sustainability approach encourages businesses to make decisions in terms of years and decades rather than on the next quarter’s earnings report and to consider more factors than simply the profit or loss involved. In 1999, the United Nations introduced the world’s largest corporate sustainability initiative encouraging companies to align their strategies and operations with universal principles on human rights, labour, environment and anti-corruption and take actions to advance societal goals. The question one will then ask is “how can a business achieve sustainability”? David Newman a Senior Strategist lists the following as strategies that businesses can employ to achieve corporate sustainability; Changing how the business views sustainability benefits – from cost reduction to revenue growth- This involves being able to show the Board that the sustainability approach is not just about cost reduction

but that it will definitely guarantee a return on Investment (ROI) though it may be take a longer time and be more painstaking. Moving sustainability out of departmental silos into shared business goals- This entails not assigning the responsibility of sustainability to only one department. The responsibility of sustainability should be shared across board an organization which each department being held accountable for a portion or percentage. Reporting and sharing the things that matter with the people who care –These deals with being able to identify the target audience and frequency of sustainability reports. Sustainability reports shouldn’t just be a mere box checking exercise. Knut Haanaes also recommends the following practical tips to help businesses achieve sustainability; i. Aligning strategy with sustainability, ii. Placing compliance first before competitive advantage; iii. Being proactive rather than reactive; iv. Being transparent; Engaging the Board and ecosystem. Another way of successfully implementing a Corporate sustainability framework has been identified as ensuring that employees of businesses believe in and are engaged in achieving the vision. Social and environmental concerns are usually seen as conflicting with financial goals of businesses. Therefore, another question that would most likely be loom-

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ing in the minds of some business owners would be “what’s the need for Corporate sustainability, is it worth embracing?” An article in the Harvard Business Review credited to Tenise Whelan and Carly Fink indicates that embedded sustainability efforts clearly result in a positive impact (emphasis mine) on business performance. The Article with facts and figures from relevant studies listed the following as benefits of corporate sustainability; Improving financial performance; Building customer loyalty; Fostering innovation; Driving competitive advantage through stakeholder engagement, improving risk management, attracting and engaging employees. Professor Michael H. Posner also opines that Business sustainability is essential to the long-term prosperity of global companies. The listed benefits are indeed great and every business enterprise would wish to enjoy such benefits over time. The practice of Corporate sustainability is still in a nascent stage in Nigeria as a lot of business enterprises are yet to embrace and incorporate it in its strategy. However, it is gaining more support and awareness in recent times. It is worthy to mention that the Nigerian Stock Exchange (NSE) released sustainability disclosure guidelines in December 2018, A reporting compliance timeline was laid down alongside the rules. This indicates that there is a need for listed businesses to imbibe Corporate sustain-

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ULOAKU EKWEGH

ability in order to have a sustainability report. The Guidelines are mandatory for companies listed on the Premium Board of the NSE. Businesses are enjoined to take deliberate steps towards achieving corporate sustainability regardless of whether they are under a regulatory obligation to do so or not. There is need for businesses to think of the future not just in terms of profits alone but also the overall impact of their business operations on people and the environment. The best time to start is today. Ekwegh is a private legal practitioner with over 15 years legal experience in law firms and as in-house counsel. She is also a fellow of the Institute of Management Consultants. Email: uloekwegh@yahoo.com

Wednesday 11 March 2020

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Editorial Publisher/Editor-in-chief

Frank Aigbogun

Caught between Corona and the Saudi-Russia oil price wars

editor Patrick Atuanya

Coordinated fiscal and monetary stimulus imperative

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

etween a coronavirus-induced slowdown in global economic activity and bruising ego battles of Russia and Saudi Arabia, the price of oil tumbled to $35.48 per barrel on Monday with possibilities of going as low as $20 per barrel. It immediately exposed the vulnerability of Nigeria where oil continues to be the primary determinant of economic activity. The 2020 budget received the first hit as it is predicated on an oil price of $57 per barrel. The price drop raised spectres of the recession of 2016 caused by a similar drastic fall in global oil prices. Nigeria got out of it essentially due to the recovery of those prices. Talk of diversifying the economy away from its dependence on a single commodity has remained mere talk. Price volatility is a characteristic of global commodities. Oil is regularly prone to shocks from two areas. They are economic or geopolitical. The March 2020 rapid drop owes to the conver-

gence of the economic and geopolitical shocks. The global epidemic of the coronavirus started in Wuhan Province of China in December 2019 spreading death and fear across the world. As of 9 March, there were over 111,000 cases globally. Global and domestic markets are in panic mode with stock prices crashing everywhere. The UK recorded 319 positive tests for the disease on Sunday, 8 March following tests on 24, 960 people. Italy has the worst case in Europe with incidents and death toll rising daily. Italians have also been implicated in the spread of the disease to most other countries. An Italian was the index case in Nigeria where a second victim was identified on Monday 9 March as one of those who had contact with him. Italy locked down 16million residents in its Northern province as the disease spread. There were about 564 confirmed coronavirus cases in the US, majorly in Washington State and California. The disease has claimed 3,892 people since it commenced in December 2019. Experts say

deaths worldwide from coronavirus exceed those caused by SARS. About 62,375 individuals have recovered from COVID-19 while more cases are popping up outside mainland China China nexus is critical. China is the factory of the world, with coronavirus shutting down most of its operations. The slowdown led to reduced demand for oil. The geopolitical angle to Nigeria’s oil travails arose from the disagreement between Russia and Saudi Arabia, two of the world’s leading oil producers. The oil price threat comes at an even more critical period for Nigerian than the 2016 case. Unlike then, Nigeria has run down its external reserves. Our reserves were $36 billion in February 2020 from $40.55 billion in October 2019. Our reserves had previously reached $63 billion. Strong reserves are the bestknown bulwark against the uncertainty of declining income arising from low oil prices. To add to Nigeria’s economic management dilemma, our debt stock has quadrupled since 2015. With the ap-

proval by the National Assembly of an additional loan of $22 billion that the federal government claims it needs, the country now has an uninspiring mix of low oil prices, reduced external reserves and huge debts. Government economic agencies must now pursue policies other than those that depended on oil price stability. Coordinated fiscal and monetary stimulus is imperative. We have had a situation where the government has pursued simultaneously increased taxation and increased government spending rather than either. It has created confusion. There is a need to outline clear policies that would stimulate the economy and promote investment in areas with a multiplier effect on activities. Diversification beyond oil while a medium and long-term strategy must commence now with clearly visible plans. The federal government must also grab the low-hanging fruits in several areas of inertia in policy, from oil and gas investments through power, infrastructure projects and the enabling environment for business.

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$22.7 billion loan: Will our children forgive us? Franklin Ngwu

ontrary to his boisterous voice, the solemn tone and admonitions of my Macroeconomics Professor in University of Manchester during sessions on “public debt in an intergenerational context’ remains fresh in mind even though it happened over 15 years ago. As we quickly learnt, the lowered tone and caution were to draw our attention to the immense seriousness of the issue particularly the long-term implications of public debts. Two questions are normally used to buttress the enormity of the challenge and consequences. First is the challenges of intertemporal allocation consequences of government debt and second, the issues of welfare determination for different generations. As I read and watched the way some APC senators led by the Senate President pushed the approval of $22.7 billion loan request, the view of a friend that Nigeria is really bewitched seems valid. “Am not sure they (senators) are aware of their responsibilities. This is not about APC and PDP or PMB and Jonathan, it is about Nigeria today and tomorrow. It is about the future of this country, our children and the unborn generation. Are they (senators) not supposed to subject the loan request to the highest level of scrutiny and debate, examining and

re-examining, asking and re-asking questions upon questions on every item and line of the loan request to ensure that it is in the best and equitable short, medium and long term interests of present and future Nigerians? When the consequences of this unpatriotic act of some of our senators start manifesting, many of them will not be there’’, my disturbed friend lamented! Nobody is questioning the government’s claims of enormous infrastructural deficits in Nigeria that might require loans to address, the question, in particular, are on the huge amount required and implications for the present and future Nigerians, the items to which the loans will be used for and the process of approval. In each of these key areas, there are too many unanswered questions. From 2015 when PMB became the president to September 2019, our public debts increased by 108 percent moving from N12.6 trillion to about N26.2 trillion (about $85 billion). As adding additional $22.7 billion will take the total debt stock to about $108 billion, a key question that is normally ignored is the sustainability of the debts particularly our ability to service and repay the debts. In the 2020 approved N10.59 trillion budget, while only N2.46 trillion was allocated to capital expenditure, debt service took about N2.7 trillion, about a quarter of the total budget. Expectedly with additional $22.7 billion, the cost of debt service will exponentially increase though depending on certain conditions. Moreover, when you go through some of the items to which the loan will be supposedly used for, one begins to wonder if we are conscious of the full implications of such borrowing or if we think that it is free money. Nigeria is really a puzzle where the more you look, the less you really see. The list is littered with items that

‘

Nigeria is really a puzzle where the more you look, the less you really see. The list is littered with items that are neither needed nor should be the concern of the Federal Government

are neither needed nor should be the concern of the federal government. “As it is, most of the money for many of the projects will not be properly utilised”, another friend frustrated with the state of affairs in Nigeria grieved. A typical example is the purported request of $500 million for NTA digitization project. Others include $100 million for Nigeria Housing Finance Project Guarantee Scheme, $500 million for the National Social Safety Net Project, $50 million vocational training in power sector, $500 million Better Education Service Delivery for All (BESDA), $500 million nationwide Development Finance Project, $450 million Development Finance Project for Ministry of Power, $20 million nationwide Development Finance Project, $1.28 billion MSME project, $100 million Staple Crops Processing Zone Support Project in Kogi State, $200 million nationwide Agriculture Transformation Agenda Support Project II, $500 million nationwide Staple Crops Processing Zone Projects, $150 million Rural Water Supply and Sanitation Project for North East and Plateau State, $200 million Fiscal Governance and Institutions Project, $33.7 million Institutional Strengthening and Implementation of Policy Reforms for Ministries of Works and Housing, and $150 million for the Development of the Mining Industry. Truly, given Nigeria’s already high debt level and as grieved by my friend, some of the projects should not be pursued with loans and should not be the concern of the federal government. With pervasive lack of patriotism and corruption in the country, most of the nationwide projects will either be poorly executed or not executed at all. Even when executed, the utilization of the projects will be disappointing. A very good example is the Digital Bridge Institutes built by Nigeria Communication Commis-

sion that are either grossly underutilised or unutilised as is the case with the one in Enugu state. If we are truly interested in the sustainable growth and development of Nigeria, it is important that the PMB led government appreciate the wellestablished fact that government cannot be involved in everything. There is no need in increasing Nigeria’s debt with items that will be better handled by the state governments and the private sector. All that needs to be done is for the federal government to patriotically accept the urgent need to review the exclusive list with the aim of moving some items such as mining, education, health, agriculture and even power from the exclusive list to the concurrent list. In addition to the need for devolution of powers, more reforms to improve the rule of law, regulatory quality and government effectiveness are what we need as against the lamentable accumulation of debt on Nigerians. Of the total global investible funds, over 20 percent earn negative interests. The question and focus should be on the reasons why these funds are not coming to Nigeria. How can a country of our size and potential attract less than $1 billion in FDI in 2019? These are key issues that should be of focus to attract the needed finance and investment for our sustainable development and growth. To our senators, we implore them to remember that the future of our dear nation is in their hands and in line with our national anthem, may the labour of our heroes past not be in vain and may the God of creation, guide our leaders right! Dr. Ngwu is a Senior Lecturer in Strategy, Finance and Risk Management, Lagos Business School and a Member, Expert Network, World Economic Forum. E-mail- fngwu@lbs.edu.ng

Nigeria: Update on the bill to amend the Arbitration and Conciliation Act Breaking the ice 019 was a very busy year for the arbitration community in Nigeria and in different parts of the world. We witnessed several momentous developments for international arbitration in SubSaharan Africa and particularly, in Nigeria. As with every year, 2019 came with its high and low moments. While 2019 is gone and now history, this article, the first of two parts, considers one of the major developments for the arbitration community in Nigeria, likely to be of interests to arbitration enthusiasts, that happened or continued in the past year. In the second part, I shall consider the update on the US$9 Billion arbitral award against the Nigerian government. Update on the Bill to amend the Arbitration and Conciliation Act One of the major significant events for arbitration in Nigeria for 2019 is the muchanticipated Arbitration and Conciliation Act (Repeal and Enactment) Bill, 2019 (HB. 91) (the ‘Bill’) currently pending before the House of Representatives (HoR). It would be recalled that the Nigerian Senate had passed the Arbitration and Conciliation Act CAP A18 LFN 2004 (Repeal and Re-enactment) Bill, 2018 (S.B.427) into law in 2018. The Bill pending before the HoR is sponsored by Hon. Mohammed Monguno of the All Progressives Congress and passed its First

Reading on 11 July 2019. The Second Reading of the Bill was done on 18 December 2019 and the Bill has now been referred to the Committee of the Whole to be presided by the Speaker of the HoR. The “Committee of the Whole,” as used in this context, refers to the entire 360 members of the HoR sitting as a committee in a deliberative capacity (as opposed to a legislative capacity). It is expected that the Committee of the Whole will consider the Bill in great detail, while making relevant amendments to the Bill, including adding, changing or deleting words in the Bill, with a view to coming up with the final version of the Bill. Thereafter, the Bill is expected to go through the Third Reading stage before being reconsidered and passed. Upon its passage, the Bill has the potential to make Nigeria become a force to reckon with among the comity of preferred global arbitration regimes. Quite useful to note that the Bill include provisions which give the impression that Nigeria is ready to join the bandwagon of pro-arbitration legislative regime, particularly, as it relates to third-party funding (TPF). Given some of its very innovative provisions, it is expected that the passage of the Bill, will bring about increased preference for Nigeria as a seat of arbitration by the international arbitration community and also make Nigeria become a pro-arbitration legislative regime like Hong-Kong and Singapore.

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With respect to the mention of TPF in the Bill and taking into account that the Bill tacitly recognises third party funding , I have previously argued that the Bill, upon its passage, would have effectively overridden the common law position on maintenance and champerty (even though a commentator is of the opinion that the common law principle of maintenance and champerty does not apply to TPF. In the commentator’s view, the law as it stands does not prohibit the incidence of TPF in Nigeria-seated arbitrations. The new development on TPF notwithstanding, I have recommended in some of my previous publications that the drafters and/ or the lawmakers should consider including substantive provisions expressly allowing TPF, following the examples of pro-arbitration legislative regimes such as Singapore and Hong Kong. It suffices to say that I am not alone in my position as another scholar has equally alluded to the fact Nigeria would benefit from establishing a comprehensive regulatory framework for TPF. Given the ongoing discussion among scholars and arbitration enthusiasts as to whether the Bill “clearly authorizes” TPF and whether it is sufficiently clear that TPF is allowed under the Bill or that the mention of TPF in the Bill demands further clarity, it needs not be said that the lawmakers will do well to clear the confusion and clear all doubt as to the issue

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Joseph Onele

of TPF under the Bill. Concluding remarks Yet again, it remains to be seen if the HoR will pass the Bill before the end of this year and include more (substantive) provisions to address some of the concerns highlighted by the arbitration community, different stakeholders as well as arbitration enthusiasts. It is my sincere hope that the HoR will speedily pass the Bill, with a view to restoring investors’ confidence in the ability of once revered ‘giant of Africa’ and how serious as well as committed Nigeria is as a nation, to provide a more favourable business climate for foreign investment. One can only hope the lawmakers will allow good reason prevail and do the needful timeously. thejosephonele@gmail.com

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Nigeria’s agric export falls 30% despite FG’s diversification rhetoric Josephine Okojie

igeria has seen its 2019 agricultural e x p o r t volumes fall by 30.23 percent despite the Federal Government’s diversification efforts. The value of the country’s agricultural export decreased by N32billion from N302billion exported in 2018 to N270billion in 2019, indicating a 10.6percent decline, data from the National Bureau of Statistics shows. On a quarter on quarter basis, the value of Nigeria’s agric export increased by N26billion from N42billion in the third quarter to N68.2billion in the fourth quarter of 2019. According to the NBS data, sesame seed led the list of agricultural commodities exported for the period, followed by cocoa and frozen shrimps

and prawns. The foreign trade report shows that sesame seeds worth N28 billion were exported during the period. Key industry players who spoke to BusinessDay attr ibuted the decline

in export to the gridlock experienced within the year at the country’s seaports. “I believe that the gridlock we experienced in both Apapa and Tin are the major reason for the export decline,” AfricanFarmer

L-R: Segun Oworu, digital farming project lead, Bayer Middle Africa Ltd; Wole Oshin, head -agribusiness, Stanbic IBTC Bank PLC; Demola Sogunle, chief executive, Stanbic IBTC Bank PLC; Angel AdelajaKuye, consultant to Ogun State Governor on Agriculture and Aliu Iyanuoluwa, CEO/co-founder, MyFarmbase Africa during the Agric-tech Youth Empowerment Masterclass at the recently concluded Social Media Week in Lagos.

OTACCWA partners GCCA to develop Nigeria’s cold chain industry Josephine Okojie

he Organization f o r Te c h n o l o g y Advancement of Cold Chain in West Africa (OTACCWA) has been admitted into the Global Cold Chain Alliance (GCCA) and is now an affiliate partner of the association in a bid to develop Nigeria’s cold chain industry as well as the West Africa region. GCCA announced on its website that OTACCWA has become a member of the global cold chain association effective from February 24th, 2020 for technology advancement of the industry in the West Africa region. “A f u n c t i o n a l c o l d chain system is vital for achieving sustainable food and nutrition security and effective healthcare delivery in Nigeria and rest of SubSaharan Africa,” Augustine Okoruwa, chairman board of trustees, OTACCWA said in a statement. “ O T A C C W A ’ s affiliation to GCCA is a mark of recognition and responsibility in driving its objectives and developing global best practices in Nigeria and rest of Africa for collective impact,” Okoruwa said.

Mogaji, head-agribusiness group, Lagos Chamber of Commerce and Industry said. “Lots of commodities meant for export got rot at the ports because of the gridlock and congestion.

He noted that OTACCWA has been at the fore-front of promoting and facilitating the development of the cold chain system in Nigeria and West Africa in general. Also speaking on the membership, Alexander Isong, vice president of OTACCWA said that the organisation is seeking to establish in the country and the West Africa region c o l d c h a i n s t a n d a rd s, logistics, ware housing and solutions to post-harvest losses while preser ving nutritional components of farm produce. “We also seek to establish an efficient and standardized mode of cold chain transport for pharmaceutical products. In achieving this goal OTACCWA is now an affiliate member of GCCAwhich is an international body that promotes and helps implement cold chain solutions worldwide,” Isong said. According to him, the cold chain nascent industry in Nigeria has tremendous growth potential that would have a transforming impact on the economy. Similarly, Tunde Okoya, president, OTACCWA said that the partnership with GCCA opens a new vista of opportunities for members www.businessday.ng

of OTACCWA to access and interact with stakeholders in the global cold chain family. “It is a game-changer in terms of capacity building and access to new technology,” Okoya said. Commenting on behalf of GCCA , Mrs. Amanda Brondy, senior director – international projects of the association says OTACCWA’s leadership has recognised the value of the services provided by GCCA and agreed membership was a worthwhile endeavour. We are happy to welcome them as an affiliate, GCCA said on its platform. “One benefit for GCCA members is the possibility to connect with companies in West Africa through a source that is familiar with GCCA and willing to invest resources into improvement,” said Brondy. Cold chain is an integral part of agriculture having been identified as a means to significantly reduce the posthar vest loss of perishable fresh fruits and vegetables, it is also vital for the preservation of fish, seafood, meat, chicken and other perishable foods. Cold chain is also a vital part of delivering medicine for adequate health care coverage in Nigeria.

Exporters could no longer meet up with their contractual agreements,” Mogaji who is also the chief executive officer of Farm Credit said. He stated that exporters were forced to abandoned export as they could no longer cope with the situation. Nigeria’s non-oil export came under serious in 2019 over the worsening state of the Apapa and Tin Can roads that leads to the nation’s Lagos seaports. As a result, agro commodities worth billions of naira rotten away in various warehouses as port processes became impossible owing to the negative impact of the deplorable state of the Apapa and Tin Can roads then. The Cashew Farmers Association had said in 2019 that the gridlock situation then, trapped about N108billion worth cashew export.

But the situation at the ports has since improved and experts are positive that the country export for the 2020 period will increase. “The country’s export volumes will pick up in 2020 as the port situation has improved and we have also recorded new entrance of farmers,” Mogaji who was earlier quoted said. “Exporters will export more as volume increases and the port situation improves,” he added. Dur ing the quar ter, analysis of trade by region showed that Nigeria exported mostly to Europe, followed by Asia, Africa, America, and Oceania. By country of destination, Nigeria exported goods to India valued at N628billion, Spain at N493billion, France at N371billion, and the Netherlands at N356billion for the period. Agriculture accounts for 2.98 percent share of total trade for the period.

NIRSAL partners Microsoft to boost agric productivity with digitalisation Josephine Okojie

n a bid to boost farmers’ productivity and drive agricultural digitalisation, the Nigeria Incentive-based Risk Sharing System for Agr icultural Lending (NIRSAL) has partnered Microsoft- a global tech giant in the deployment o f i t s A z u re Fa r m B e at s platform in the country. The Azure FarmBeats is a purpose-built agricultural cloud platform that enables the aggregation of agricultural dat a a n d g e n e rat i o n o f actionable insights into farm health and conditions, soil moisture, crop layout, and farm population by harnessing the power of

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artificial intelligence (AI), the Internet of Things (IoT), and cloud technology. NIRSAL has turned to Microsoft Azure FarmBeats as the perfect platform to enable comprehensive farm monitoring which is critical to the institution’s Credit Risk Guarantee (CRG) to financiers and investors to minimise the risks associated with agriculture and agribusiness financing, it says in a statement. “We are certain that Azure FarmBeats will be the tool that will help us to analyse the data being produced f ro m f a r m s a n d a l l t h e possible ways we can use it to stabilise the agricultural v a l u e c h a i n s ,” A l i y u

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Abdulhameed, managing director and CEO, NIRSAL said while commenting on the collaboration. “Also, boost the confidence of investors to eliminate barriers to the free flow of finance and investments into agribusiness in Nigeria,” Abduhameed said. He said agriculture is the foundation of the country’s economy as it remains the major source of livelihood for most Nigerians. He added that the sustainability and growth of the sector is crucial for national development. Als o sp eaking at the signing ceremony, Akin Banuso, country manager, Microsoft Nigeria Limited, said his organisation is excited to be working with NIRSAL to promote precision agriculture in the country. He stated that the technology will leverage both experience and field structure created by NIRSAL to transform the agric sector, adding that FarmBeats will dr ive innovation in the sector. NIRSAL has continued to de-risk Nigeria’s agribusiness finance value chains, fix the gaps and build long term capacity and institutionalised incentives for agric lending through its five strategic pillars.

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BUSINESS DAY

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How Lagos agro market will impact farmers’ livelihood Josephine Okojie

s part of efforts to address the issues of food waste and market access to farm produce, as well as to positively impact the livelihood of farmers in the state, the Lagos state government has launched a new platform to connect farmers with urban markets. The Babajide Sanwo-Olu led government through, the Lagos State Ministry of Agriculture, launched its maiden Market Linkage Initiative, tagged Eko City Farmers Market (ECFM), which connects smallholder farmers to buyers in an urban and modern setting. “Studies have shown that farmers in the state lack direct access to the markets of their products such that most of the time, they sell to middlemen at rather incredible prices. The farmers that can penetrate the market find it even more difficult to break even as they are forced to sell at the association-dictated prices,” said Prince Gbolahan Lawal,

state Commissioner for Agriculture. The commissioner said the state plans to develop the Eko City Farmers Market into an international food market and innovative exchange. A l s o s p e a k i n g , Fe m i Hamzat, deputy governor of the state declared that the state will

open its online marketplace to connect farmers and buyers in real time. “O u r a d m i n i s t r a t i o n will continue to leverage contemporary solutions to provide the best of its kind market linkage services,” Hamzat said. With a GDP of $50 billion

as of 2019, which is higher than the GDP of some African countries, Lagos is conservatively estimated to consume at least N3 billion worth of fresh agricultural produce daily. Figures from the state government show 8,000 heads of cattle are slaughtered daily

L-R: Yakubu Oseni, chairman, Senate Committee on ICT and cybercrime; Obinna Chidoka, member, House of Representatives; and Margaret Olele, executive Secretary/CEO, American Business Council at a workshop on data protection in Abuja recently.

in Lagos abattoirs as of 2018, with 15.96 million of 50kg bags of rice consumed annually. According to the state g overnment, the mo del market is aimed at providing safe, healthy and affordable fresh produce for consumers in the state as well as providing market access for farmers. Fishermen from the coastal communities across the state brought their catch. Different types of fresh and live fishes were displayed for sale. Cow meat sellers also slaughtered some heads of cattle. Cassava farmers sold unprocessed root and tuber c ro p s to buye rs. Ab ou t 142 participated and 771 purchased fresh and freshly packed foods from the farmers. Also, fresh perishable fruits and vegetables like watermelon, banana, spinach, greens, carrots, oranges, onions, green pepper, hot chili and tomatoes of the high quality were sold at friendly prices to customers, while farmers maximised profitability by eliminating or minimising middlemen.

Ashake Akinwande, a catfish farmer who participated in the maiden edition of the farmers’ market, commended the initiative. She said as a fish farmer, she would normally sell at a loss to middlemen who would barely help her breakeven. “I thank Governor Babajide Sanwo-Olu for this initiative. Because of it, people like me will smile home today. The access I have to buyers via this platform means I can sell my produce directly at a reasonable price,” Ashake said. The Eko City Farmers’ Market was also an opportunity for the government to demonstrate that its partnership with the Kebbi State government was paying off. Bags of Lake Rice were put on display with each customer only able to buy five for fairness and equity. A bag of 25kg was sold for N8,500, while a 50kg bag was sold for N17,000, an amount far lower than other brands of rice in the same category which goes for as high as N23,000 to N25,000 for a 50kg bag in the market.

Livestock transformation key to Nigeria’s food security - Oshatimehin Ogun restates commitment SIKIRAT SHEHU, Ilorin

arriet AfolabiOshatimehin, Kw a r a S t a t e Commissioner for Agriculture has said that the successful implementation of the National Livestock Transformation Programme ( N LT P ) o f t h e F e d e r a l Government is crucial for the country’s quest of attaining s e l f -s u f f i c i e n c y i n f o o d production. Declaring open a threeday training workshop on the NLTP ahead of its implementation in the state, Oshatimehin explained that Kwara was participating in the programme to empower its citizens, guarantee food security and boost productivity.

“In achieving the plan, Kwara has assembled a robust and highly experienced project management team that would be supervised by a steering committee chaired by the secretary to the state government,” she said. “ Th i s s h ow s t h e h ig h premium the state places on the NLTP,” she added. The commissioner s a i d a t ra i n i n g e x e rc i s e will be carried out to train enumerators on how to effectively aggregate data needed for the NLTP. Oshatimehin stated that the country spent $1.3billion annually on milk importation and another $8billion on beef (both live and processed) imports, saying that the state is strategically positioned to take advantage of the opportunities in the livestock

value chain. “Our cost of production of a Kilogramme of beef estimated at $6 per Kg is one of the world’s highest, compared to $4 per Kg in the Netherlands and $2.5 per Kg in India.” “In Israel, some cows give up to 40 Litres of milk per day; Europe and the Americas, it averages 26-30 Litres per day. Our cows produce just 1-1.5Litres per day,” she further said. The commissioner explained that the government had allocated resources to support the quick rollout of the programme, urging the enumerators to put in their best, while assuring them that their hard work and dedication would be rewarded. She says about 3000

N-Power Agro Corps were being trained to take the necessary data that would help in implementing the NLTP. Also speaking, Sheriff Salau, project management team lead of Kwara NLTP, posits that the plan was designe d by the Fe deral Government to develop the various value chains in the livestock sector as well as address herders-far mers clashes across the country. “The government is trying to come up with a win-win for farmers and herders to live in harmony. Knowing the paucity of funds at the state level, the government has decided to support participating states in facilitating the development along the value chains,” said Salau.

adults. The nutritionist stated that health is affected by poverty which is strongly connected to other aspects of sustainable development, including climate change, water and sanitation, gender equality. According to him, many factors play a part in maintaining good health. The factors, he said, include eating a balance d diet, regular exercise and rest. “Good health can decrease your r isk of developing

certain conditions, including heart diseases, stroke, some cancers and injuries”, he said. The Dietitian noted that to balance the healthy living equation, we must rely heavily on the nutrients, vitamins and minerals gotten from daily food consumption to stay healthy. “One of the best measures for building and sustaining a healthy lifestyle is to regularly complement mealtimes with 100percent fruit juice and antioxidant-rich food.”

Expert advocates healthy living equation

lusola Malomo, a nutritionist and the national publicity secretary of the Nutrition Society of Nigeria (NS), has called on Nigerians to work towards achieving a balance in what he called healthy living equation. He said that good health is a fundamental human right and key indicator of sustainable development every Nigerian deserve. Ma l o m o s a i d t h i s i n the Februar y edition of

his monthly healthy living dialogue, an initiative in partnership with Chi Limited. The dialogue is a part of the juice manufacturer’s ‘Noadded Sugar’ campaign. The nutritionist advised against neglecting one’s health, saying that could result in preventable health challenges. He added that poor health resulting from absence of necessary nutrients threatens the rights of children to good education and limits economic opportunities of www.businessday.ng

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to cotton farmers Josephine Okojie

he Ogun State g ove r n m e nt ha s assured members o f t h e Na t i o n a l Cotton Association of Nigeria (NACOTAN) of its continued support in improving the p ro d u c t i v i t y o f c o t t o n production in the country. Dapo Abiodun, executive Governor of Ogun made this disclosure at the official flagoff of the recovery of cotton outputs for anchors for the 2019 planting season, in Ijebu Igbo, Ijebu North Local Government Area of the state. Governor Abiodun, re p re s e nt e d by Ad e o l a Odedina, Commissioner f o r A g r i c u l t u re h i n t e d that the government recognised the employment generation potentials of cotton enterprises and the importance of sustaining the need for raw materials by textile and allied industries. “We will support smallholder far mers to raise their yield through deliberate extension services in the Anchor Borrowers Programme under our watch”, he said. He expressed the government’s tireless resolve to continue to link farmers in @Businessdayng

Dapo Abiodun

the state with the industrial process, as part of the national effort to reduce imports and encourage exports, while at the same time, providing employment. Odedina further stated that Ogun has earmarked 10,000hectares of land for cotton production. He advised the state cotton growers association to speed up the process of completing their documentation with CBN and other anchors, for this year’s growing season under the state government facilitated by the Anchor Borrowers Programme. In their separate remarks, Wa h a b O s e n u , b r a n c h controller of CBN Abeokuta, and Shola Osasona, state chairman of NACOTAN, appreciated government effort targeted at linking farmers to credit, input, mechanisation, and assured markets.

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Wednesday 11 March 2020

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

BANKING

GTBank shares falls to 39-month low as banking stocks slide most since 2013 SEGUN ADAMS

hares of big lender GTBank fell almost 10 percent on Monday to the lowest level in about 39 months as banking stocks took a beating after oil price hit the lowest levels since 2017. The bank’s shares fell 9.96 percent to N22.15 a unit in Lagos, as other big lenders suffered a similar sell-off dragging the sector’s index by 8.95 percent, the most since June 2013. Analysts at Afrinvest on Monday said they 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. A d e ro n k e A k i n s o l a,

banking analyst at Lagosbased Chapel Hill Denham cautioned that in-

vestors, lacking patience, should watch the trend before taking position in

the market. Chapel Hill Denham earlier in March rated GTB

L-R: Roy K. Lillyman, Head of School, Hampton Preparatory School; Linda Adeyemi-Haastrup, Founder; Kemi Balogun, founder, Hampton Preparatory School; Bamidele Abiodun, wife of the Ogun State governor; Iyefe Oludoyi, founder, Hampton Preparatory School; Peter Thomas Esq. and Emma Elegbe, head of lower school at the official opening of Hampton Preparatory School upper school in Lagos.

BANKING

at a BUY with a 12-month target price of N46.17, which implies a total return of 111.03 percent (capital gain of 103.4 percent and dividend yield of 7.6 percent). The lender in 2019 grew Earnings Per Share by 6.6 percent year-onyear to N6.69. The bank grew gross earnings by o.1 percent to N435.307bn with Net interest income growing by 4 percent while non-interest income grew 8.8 percent. However, analysts at Chapel Hill Denham noted that GTB demonstrated Cost efficiency as the costto-income ratio fell to 35.6 percent in 2019 from 36.6 percent in 2018, driven by the operating income growth of 5.5 percent yearon-year compared to the operating expense growth of 3.0 percent in the same period.

OIL & GAS

Standard Bank issues inaugural green bond for Oando first Oil firm to become ISO 27001 Certified sustainable environmental financing MICHAEL ANI

tandard Bank of South Africa Limited (“SBSA”) has issued its first-ever green bond, via a private placement with IFC, a development finance institution focused on the private sector, part of the World Bank Group. The green bond which is a 10-year facility comes with an express purpose of raising capital for use in on-lending by Standard Bank Group’s (SBG) sustainable finance business unit and achieving longer tenor financing. The $200 million, London Stock Exchange-listed green bond is Africa’s largest green bond and South Africa’s first offshore green bond issuance. The capital raised as a result will be used to finance eligible green assets (renewable energy, energ y efficienc y, water efficiency and green buildings) aligned to SBG’s sustainable bond framework. The IFC’s performance standards, which are part of the IFC’s sustainability framework, have become

globally recognized as a benchmark for environmental and social r isk management in the private sector. Sim Tshabalala, Standard Bank Group chief executive, says, “ The bond issue reflects SBG’s strategic focus on sustainable finance in line with our Social, Economic and Environmental (“SEE”) value drivers and vision to drive Africa’s growth with minimal adverse impact. Our strategy aims to embed social, economic and environmen-

tal considerations into our borrowing, lending and business practices in a way that helps us to continue supporting our clients, whilst producing value for society at large.” According to Nigel Beck, Executive Head Sustainable Finance for SBG, “When it comes to financing, clients should be considering green, social and sustainable products as investors increasingly shift their mandates to sustainable businesses. Standard Bank is at the forefront in Africa with an

innovative and dedicated sustainable finance business offering that benefits clients, communities, the environment and the corporate governance landscape.” “The bond showcases the role that capital markets can play in mobilizing climate-smart finance and we hope it will inspire more companies in South Africa to unlock investment for climate-related projects,” says Kevin Njiraini, IFC Regional Director for Southern Africa and Nigeria.

OLUSOLA BELLO

ando PLC, Nigeria indigenous e n e r g y g ro u p listed on both the Nigeria and Johannesburg Stock Exchange, has become the first Oil and Gas Company in Nigeria to receive the prestigious ISO 27001 Certification from Certification Partner Global FZ LLC. ISO 27001 is the international standard outlining best practices for information security management systems. Speaking at the certificate presentation ceremony, the Group Chief Corporate Services and Operations Officer, Oand o, Z u b a i r u Mu n t a r i said; “This is a significant achievement for Oando. By implementing and following the necessary steps to comply with this standard, we can identify, control, and eliminate security risks, ultimately validating the security practices adopted within the organization. The certification also means that we are able to provide our stakeholders with a higher degree of L-R: Goddie Ofose, CEO, December 29 Media/convener, Industry Evening Summit; Caroline Oghuma, executive confidence in the quality head, corporate affairs, Multichoice Nigeria; Israel Opayemi, president, Public Relations Consultant Association and stability of data secuof Nigeria (PRCAN), presenting overall marketing practitioner of the year-2019 to Martin Mabutho, chief customer rity and further validating officer, Multichoice Nigeria, at the 2020 Industry Evening Summit at Sheraton Hotel Ikeja at the weekend. www.businessday.ng

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our commitment to the highest standards of information security. The Head of IT, Oando Group, Idris Musa, who directed the project attributed the success to the commitment by management towards managing business compliance and operational risks associated with the use of information systems and digital assets. He said: “The investment in ISO 27001 enterprise security framework have allowed us structure and implement modern security controls in a complete and cohesive manner thereby strengthening our data and information system governance.” Commenting on the certification, the Chief Operating Officer, Digital Encode Limited, Obadare Peter said; “Essentially, the certification aims to establish and put in place good information security practices across the Oando Group. The certification is proof that the Company’s systems and processes have been audited against international best practice, positioning Oando as operating to global standards.”

Wednesday 11 March 2020

BUSINESS DAY

COMPANIES&MARKETS

Business Event

FINANCIAL SERVICES

AB Microfinance Bank eulogises contribution of women to entrepreneurship, economic development MODESTUS ANAESORONYE

B Microfinance Bank,one of Nigeria’s leading Mi c ro f i n a n c e Banks has said that Nigerian women which constitute over 60 percent of the bank’s customer base have shown great entrepreneurial acumen in growing their business concerns through facilities granted by the bank. Pawel Wodz, chief business officer of the bank who disclosed this at an event held by the bank to celebrate the global International Women’s Day said that the Bank recognises the contributions of women to the nation’s economic development. The event, which attracted women from different walks of life including Onyeka Onwenu, Nigerian music legend, Modupe Ladipo, managing partner, Prosperar Consulting among many others also had some of the bank’s female customers and employees in attendance, Wodz said “At AB Microfinance Bank, we give our female clients equal opportunities with their male counterparts in business financing and other areas they need our support. Our records show that they have incredibly been able to utilize these facilities to

grow their businesses in many ingenious ways. We are highly encouraged by this and we thought that it would be a great idea to further encourage them by recognizing, celebrating and honouring these wonderful women that are changing the face of businesses in Nigeria and the International Women’s Day provides the opportunity for us to show how appreciative we are to them”, he said. Speaking on the theme for this year’s celebration #EachFor Equal – Wodz said that an equal world is an enabled world adding that “We can actively choose to challenge stereotypes, fight bias, broaden perceptions, improve situations and celebrate women’s achievement with the theme for the 2020 International Women’s Day”. He a d d e d : “G e n d e r equality is essential for economies and communities to thrive. A gender equal world can be healthier, wealthier and more harmonious. At AB Microfinance Bank, we understand this fact and we will not only celebrate our female clients on that day, but also our female employees for their dedication and commitment to the organisation. Onyeka Onwenu in her contribution said the call for gender equality in Nigeria can be best achieved if Ni-

gerian women come to the realisation that they carry great transformational power. According to her, women do not live for themselves as nature has made them care givers for the whole world, the country, the economy and their families stressing that the drive for gender equality should start by the women themselves. She said that women need to take charge and not necessarily wait for men to relinquish equality on a platter of gold. She however decried some cultural practices in Nigeria that tend to relegate women to the background. Also speaking, Ladipo said that the available data was unequivocal: “No matter where in the world you are born, your life will be harder if you are born a girl. The average girl in sub-Saharan Africa ends her education with two fewer years of schooling than the average boy. One in five girls is married before her 18th birthday, trapping her on the wrong side of a power imbalance even within her home”. Ladipo added that despite the valiant efforts of activists, advocates, and feminist movements – the world has refused to make gender equality a priority as Global leaders have not made the political and financial commitment necessary to drive real change.

L-R: Esther Obafemi, head digital transformation; Olubukunola Olateru, company secretary; Dolapo Otegbayi, specialized nutrition director; Ben Langat, managing director; Ore Famurewa, executive director, corporate affairs; Nkechi Ejesi, corporate communication and sustainability manager, and Bola Fadaka, employee relations manager, as FrieslandCampina WAMCO celebrates International Women’s Day with 50% increase in top female leadership of the company in Lagos, weekend

L-R: Zainab Abdulrasheed-Adegoke, chairperson, International Women’s Day 2020 Planning Committee, NNEW; Funke Kumapayi, member, International Women’s Day 2020 Planning Committee, NNEW; Olakitan Wellington, national publicity secretary, NNEW; Oluwaseun Yesufu, head, programmes and training, International Chambers of Commerce Nigeria, and Funmilayo Arowoogun, chairperson, Ogun State Chapter, NNEW, during the International Women’s day 2020 rally/plenary session in partnership with Alive and Thrive in Lagos

COMPANY RELEASE

Autusbridge Consulting set to host sales and marketing professionals

eading business solutions provider in Nigeria, Autusbridge Consulting Limited, is set to host global players, entrepreneurs and sales and marketing professionals at a one-day sellers’ conference and innovations expo (SCIE) in Lagos. The sales conference, which is a unique gathering of sales, marketing and revenue-driving professionals across the country is aimed at equipping the Nigerian salesforce with the selling and marketing skills that will take their performance to the zenith, while also exposing them to global trends and innovative ways to up the ante of their game. The one-day sellers’ conference would hold on Thursday, April 2, 2020, at NECA House, Alausa, Ike-

ja, Lagos, the conference has on its radar topnotch speakers with a requisite pedigree in sales and marketing and other soft skills that are very germane to the profession. Speaking to newsmen on the importance of the sales conference to the productivity and efficiency of every organisation, chief executive officer of Autusbridge Consulting, O lugbenga Johnson, said every business needs representation at the expo for them to do more with their sales. D escr ibing the S CIE 2020 as the gathering of strikers, Johnson said salesmanship is an essential for every entity, profit or nonprofit alike, who desires growth and wishes to be around for the long haul. “To borrow from a football scenario, the salespeople are the strikers. They www.businessday.ng

are the ones who go after the goal and deliver the goods. “However, the salesforce can also be limited in their performance because, unlike the footballers, they are not often trained or drilled enough to sharpen their skills and equip them to perform at optimum. “A Nigerian company has decided that this malaise must not continue and is organising the conference for sales and marketing professionals across the country and West African sub-region” The AutusBridge CEO n o t e d f u r t h e r t hat, “ I f you are looking for ways to hone your sales and marketing skills, then you should be at the Sellers Conference and Innovations Expo (SCIE) to give your business the competitive edge.

L-R: Oo Nwoye (ED, TechCircle), Uzoma Dozie (Founder, Sparkle), Odun Eweniyi (Co-founder, Piggyvest), Honey Ogundeyi (Country Director, UK-Nigeria Tech Hub), Fola Olatunji-David (Google), Andrew Alli (Investor), at a UK-Nigeria Tech Hub event orgainsed in Lagos.

L-R: Emeka Ogbu, vice president, Nigerian University Games Association (NUGA); Eniola Ogunlade, brand development and activation manager, Premier Cool, and M.G Yakasai, treasurer, NUGA, at the official press briefing for HIFL 2020 at Radisson Blu, Lagos.

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Wednesday 11 March 2020

BUSINESS DAY

cityfile FCDA activates Abuja master plan on Sani Abacha Way JAMES KWEN, Abuja

he Federal Capital Development Authority (FCDA) says it has activated the Abuja master plan in respect of Sani Abacha Road, which separates the Central Bank of Nigeria (CBN) headquarters and National Christian Centre. Consequently, the Sani Abacha Way has become a one-way drive, from the National Mosque through 5th Street towards the NTA headquarters. According to a notice sighted by BusinessDay, the following would apply in compliance with FCDA enforcement requirements: “A simplified guidance: No driving towards the National Mosque from the NTA headquarters (CBN) Ecumenical Centre. “We wish to emphasise that the FCDA has expressed commitment to mobilise all relevant enforcement agencies to ensure compliance with the above and we advise all to continue to be lawabiding and cooperate with the FCDA accordingly, as well as adhere to the advisory contained herein. “Gridlock and confusion on that road is envisaged till motorists understand the new traffic rule. Advised to take alternate routes,” the notice reads.

Auto crash claims 23 in Jigawa

t least 23 persons have lost their lives in a ghastly accident involving a bus on JahunKiyawa Road, in Jahun local government area of Jigawa. Spokesperson of the Jigawa State police command, Abdu Jinjiri, confirmed the incident to newsmen in Dutse, the state capital. Jinjiri said that the accident occurred about 11:30 a.m. He alleged that the driver of the bus lost control when one of the tyres burst and hit a house at Gwanfai village. According to Jinjiri, immediately after the tyre burst, the vehicle caught fire and all the 22 passengers onboard including the driver burnt beyond recognition. “The victims included 18 males and five females,” the spokesman said. The bus with registration Number YD 183 HJA, which was supposed to carry 14 passengers was overloaded with 22 passengers traveling from Jahun to Shuwarin town.

Members of the Awareness for Good Leadership, Peace and Development (APGDA), during a peaceful protest and submission of a petition on the need to adopt more proactive security measures and demand for open policy in Katsina State, at the state Governor’s Lodge, in Asoko, Abuja on Monday. NAN

N5bn lost annually to abandoned Ikere Dam, says community REMI FEYISIPO, Ibadan

bedi Frontliners, Iseyin (EFI), a socio-political group, says over N5 billion is lost annually to the abandoned Ikere George Dam project, located in Iseyin local government area of Oyo State. The group is saddened that critical potential of the dam in the areas of power generation, potable water distribution, aquatic re-

sources and farming have been left to waste away. According to EFI, time was rife for the Oyo State government and federal authorities to agree on concessioning the dam to enable the state leverage it for power generation. Segun Fasasi, the publicity director of the group, stressed the need for Governor Seyi Makinde of Oyo State to seek audience with concerned federal agencies in order to curb the current waste and harness

the potential of the dam for the economic benefits of Oyo. The Ikere George Dam project was initiated in 1979 by the then Olusegun Obasanjo’s military administration while work started on the 565 cubicmetre multi-purpose dam in 1980 by the civilian administration of President Shehu Shagari, after which it was abandoned till date. “Our countr y has shown overtime that we like to see resources go

to waste. We have gotten reliable data on financial losses to Nigeria if you look at the potential of the Ikere George Dam: The body of the water for drinking and farming, fish business, recreational activities and generation of power and the rest and I can safely tell you we lose over N5 billion annually to the abandonment of the project.” Fasasi said the people of Iseyin would continue to support the programmes

and policies of the Makinde administration. Oyo State commissioner for energy and mineral resources, Seun Ashamu had recently talked about the efforts being made by the state government towards independent power supply as alternative to poor supply from the national grid. Ashamu said that the state would take advantage of its vast natural resources like dams and landscapes to achieve the feat.

ICPC arraigns ex-PPMC boss’ wife, others over alleged N2bn fraud

he Independent Corrupt Practices and other related offences Commission (ICPC) has arraigned Ochuko Momoh, wife of a former managing director of the Pipelines and Products Marketing Company (PPMC), Haruna over an alleged N2 billion fraud. The ICPC charged Momoh alongside five others with 22 counts bordering on money laundering. The other defendants are Blessing Azuka-Agozi, StanbicIBTC Bank Plc, Energopol Nig., Limited, Blaid Construction Limited and Blaid Farms Limwww.businessday.ng

ited. Momoh was alleged to have laundered funds estimated at over N2 billion, using her companies: Blaid Construction and Blaid Farms. She was also accused of refusing to honour ICPC investigators’ invitation. Azuka Agozi was also alleged to have, while serving as the company secretary of Energopol Nig Ltd, reneged in 2016 on her pledge to provide ICPC’s investigators with documents relating to the contracts her company allegedly executed for PPMC and for which it was alleg-

edly paid huge sums. Stanbic IBTC was accused of failing to report suspicious transactions in the accounts of Blaid Construction and Blaid Farms to the relevant authorities as required by law. While both women pleaded not guilty when the charge was read to them at a Federal High Court, Abuja, on Monday, the court, acting under the provision of Section 478 of the Administration of Criminal Justice Act (ACJA), recorded not guilty plea for the four companies. The defendants’ coun-

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sel, Ade Adedeji, urged the court to grant his clients bail on self recognition. Adedeji particularly said Momoh was ready to stand trial and would not jump bail, because she was eager to clear her name and retrieved the assets, including bank accounts seized by the prosecution. Counsel to the ICPC, Osuobeni Akponisimingha, did not oppose the defendants’ request for bail, but urged the court to ensure that they were available for trial. Justice Taiwo Taiwo admitted both Momoh to bail @Businessdayng

in the sum of N2 million with two sureties in like sum and Azuka-Agozi to bail in the sum of N1 million with one surety each in sum. Taiwo ordered that Momoh’s sureties must be a Grade Level 15 officer with a Federal Gove r n m e nt ag e n c y w h o must deposit a recent passport with the court. The judge released the defendants to their lawyer, but predicated their freedom on ability to meet bail conditions within 72 hours. The judge adjourned trial until May 19, 2020. NAN

Wednesday 11 March 2020

BUSINESS DAY

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Wednesday 11 March 2020

BUSINESS DAY

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Wednesday 11 March 2020

BUSINESS DAY

MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

LADOL gains capacity to cut cost for IOCs, industries with Mammoet’s lifting technology amaka Anagor-Ewuzie

s part of its determination to cut down cost o f e xe cu ting projects for International Oil Companies (IOCs), industries and ship owners, the Lagos Deep Offshore Logistics Base (LADOL) has received and installed two Mammoet’s giant cranes for lifting heavy project cargoes in its quayside. With the installation of this heavy lifting technology in LADOL Free Trade Zone, Nigerian economy would now be able to retain jobs and wealth that were formerly exported to other countries. Speaking at the groundbreaking ceremony held in Lagos on Monday, Jide Jadesimi, executive director, Business Development of LADOL described the cranes as unique infrastructure that would transform LADOL into a heavy lifting terminal in Nigeria. “This simply means that for the first time ever in the history of Nigeria, heavy cargoes can be handled at the LADOL quayside, which will service projects not just in Nigeria but for the entire West African sub-region,” he stated. According to him, a LADOL’s client, who is a ship

L-R: Harmen Tiddens, general manager, West Africa; Oliver Dirkzwager, commercial manager, West Africa; Jacky Van Den Brink, regional managing director, East Africa, all for MAMMOET; Jan Van Weijen, consul general, Kingdom of Netherlands; Oladipupo Jadesimi, chairman of LADOL; Leyton Daniel, chief operations officer, LADOL; Jide Jadesimi, executive director, Business Development and Amy Jadesimi, managing director/CEO of LADOL during LADOL-MAMMOET ground breaking partnership at LADOL’s Free Zone in Lagos on Monday.

owner, complained that he recently had to send his vessel to Cameroon because there was no facility in Lagos where he could take his vessel out of the water, do the repair work that was required and put it back into the water. “For exporting the job, what should have cost about $100,000, ended up costing him over $500,000, and it also took longer time such that his company lost the contract. By having equipment such as MTC 15 crane, Jadesimi stated that LADOL would be able to assist those

kinds of clients and companies to reduce cost and actually make sure that the can get services they needed to really boost Local Content and Nigerian economy. “Let’s not lose these jobs and monies to neighbouring countries. We know what is happening with the Africa Free Trade Agreement, which is going to become even more competitive in the future. So, we have to acquire this kind of infrastructure in Nigeria to be able to attract these kinds of cargo and businesses,” he said. Continuing, he stated

that, “We also know what is happening with the congestion in Apapa Port. So, while the Federal Government is doing everything it can to alleviate that situation, we the private businesses and also as a duty free zone located within Apapa, we need to do our part to enhance the Ease of Doing Business in Nigeria,” . On his part, Jan Van Weijen, consul general, Kingdom of Netherland, who described LADOL as a very good operator of the Free Trade Zone, said the installation of the heavy lift-

ing cranes at the terminal would enable LADOL and Mammoet to domesticate resources and increase capacity in the harbour. “This partnership will bring in new businesses. The customers will be happy because they can get heavier things in and out of Lagos than they could before. It would also increase the business handled by LADOL and lower cost for customers,” Weijen said. Amy Jadesimi, managing director of LADOL, said the collaboration with Mammoet has made Nigeria the hub for heavy lifts for the region, adding that the terminal by this now has capacity to do fabrications, repairs, and integration in Nigeria. “This will attract business from outside the country, but most importantly, there is no reason to fabricate and send it out of the country, translating to increase in local demand for fabrication and engineering. This would also result to the creation of tens of thousands of jobs,” she stated. Stating that the challenges facing local fabrication is sending fabricated pieces abroad for integration due to lack of lifting capacity, Jadesimi stated that, ships and oil rigs can now come from all over the country or region to be repaired

at LADOL, which would grow the size of market with higher revenue for government, higher job creation for Nigerians and naturally lower cost for businesses. “Lowering our cost is critical at this stage. Nigeria is suffering from a drastic decrease in oil price and that is going to force changes, but these are changes we should make anyway. Even if the oil price was to be 100 dollars per barrel, Nigeria is still too expensive. We have to lower our cost and our collaboration with Mammoet would lower the cost of doing business,” she said. Mammoet has installed in LADOL its heavy lift terminal crane - MTC 15, which turns any quay into a heavy lift terminal. With a load moment matching a 1,200 ton crawler crane or a large floating sheerleg, the crane enables loads up to 600 tons to be lifted to and from the quay from nongeared cargo vessels. Experts believed that this lifting capacity is ideal for loading and offloading heavy items such as columns, vessels, reels, engines and any other project cargo. One of the cranes has been installed at the LADOL quayside earlier in the year while the second cranes which is currently at the base, be erected by one and half weeks to come.

Ship owners seek disbursement of $200m CVFF as Jamoh takes over in NIMASA amaka Anagor-Ewuzie

aritime industry stakeholders especially indigenous ship owners have called for timely disbursement of the monies accumulated in the long awaited Cabotage Vessel Financing Fund (CVFF) to enable shipping development. Ship owners, who commended the appointment of Bashir Jamoh as the new director general of the Nigerian Maritime Administration and Safety Agency (NIMASA), believed the new DG would bring development, success to the industry especially due to his vast knowledge of the industry. Recall that Jamoh was on

Wednesday appointed DG of NIMASA by President Muhammadu Buhari to replace the outgoing DG, Dakuku Peterside, whose 4-year tenure has elapsed. Jamoh, who doubles as the current president of the Chartered Institute of Transport Administration (CIoTA) has spent close to 30 years in the maritime industry. The CVFF was established alongside the Nigerian Coastal and Inland Shipping (Cabotage) Act of 2003, to empower indigenous ship owners to take control of the nation’s coastal and inland shipping business, otherwise known as Cabotage trade. Sadly, 17 year after, the Federal Government is yet to apply the over $200 million accumulated in the fund into www.businessday.ng

the acquisition of vessels, which was the real reason for setting it up. Greg Ogbeifun, former president, Shipowners Association of Nigeria (SOAN), described the choice of Jamoh as good development for the industry. He urged Jamoh to ensure the timely disbursement of CVFF and to also use his wealth of experience to build indigenous capacity as well as address challenges of maritime security in Nigeria’s maritime domain. “He should conclude the issue of CVFF which has just been initiated. The CVFF is an issue that has been on the drawing board for a long time and finally a committee has been set up by the Minister of Transportation to review the guideline. So, he

should quickly step into that and make that a reality. That way he would have the support of the entire maritime sector,” he added. On maritime security, he stated that Jamoh is an expert in the issue of maritime security and would articulate an effective solution to the lingering maritime security issue that is making Nigerian waters very unsafe for international shipping. “The issue of capacity development both in human capacity and infrastructure are platform that are critical to actualising the pillars of the Cabotage Act,” he said. According to him, “It is a rare opportunity to have somebody who has been in the system over a couple of decades, without needing

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to be tutored on the agency’s mandates. This is the first time a true insider is being appointed as the DG and that to me is a very good development. He definitely will have his own strategy on how to deliver on the mandate,” he said. To him, Jamoh has taken his time to develop himself, career wise going by his profile, meaning that he has the practical experience as well as the field knowledge. Aminu Umar, immediate ex-president of Nigerian Shipowners Association (NISA), who commended Jamoh’s appointment, stated that his presence in the outgoing management team will enable him to continue from where the past administration stopped. “With Jamoh’s appoint@Businessdayng

ment, the presidency has put a round peg in a round hole and it is very different from bringing an outsider to start learning the industry. Jamoh has been in NIMASA for so long and as part of the management team of NIMASA, I believe he will continue from where Peterside stopped,” he said. Kunle Folarin, chairman, Port Consultative Council (PCC), who expressed gladness over Jamoh’s appointment, said the industry has been pushing that an industry person rather than politicians be considered for the office of NIMASA DG. Folarin expressed optimism that Jamoh’s appointment will help grow the industry to make it relevant not only in Nigeria but also globally.

Wednesday 11 March 2020

BUSINESS DAY

MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

Maersk unveils plans to provide logistics support for FMCG companies in Nigeria amaka Anagor-Ewuzie

etermined to ensure eff e c t i v e way s of managing complexities in the supply chain, Maersk has unveiled plan to provide logistics and supply chain management support to Fast-Moving Consumer Goods (FMCG) companies in Nigeria. FMCGs are products that are sold quickly and at a relatively low cost. They include non-durable household goods such as packaged foods, beverages, toiletries, over-the-counter drugs, and other consumables. These products are usually consumed on a small scale and are generally available in a variety of outlets including grocery stores, supermarkets and warehouses. Anita De Werd, head, marketing and business development, Africa Region of Maersk, said in Lagos recently

that the company aims to support Nigerian FMCG companies to effectively manage their inventories and product delivery. De Werd said Maersk recognises the importance of bringing together expertise, platforms and clients to find practical, effective methods and solution for addressing the complexities in the FMCG supply chain. “Managing the complexity in supply chain demands a good balance between the costs, demands and preferences for doing business around the world. We plan to deploy our international track record in supply chain management to the benefit of our customers. This means they will, through us, have instant access to the vast array of knowledge and experience that we have gained from working with different industries, regions and systems,” she stated. According to her, Maersk is not only able to understand the issues around logistics and supply chain manage-

ment facing FMCG companies, but more importantly, able to bring solution to their pain points by developing the appropriate solutions for their specific needs. “Maersk is the global integrator of container logistics.

We handle about a fifth of global containerised trade. Our purpose as a company is to enable trade for the benefit of society and our customers,” she said. She said the shipping giant will focus on solving FMCGs

supply chain needs from end to end, taking the complexity out of container shipping. “We are at the forefront of developing innovative supply chain solutions, fusing our global network and depth of expertise with pioneering

digital innovations to enable our customers to stay ahead,” De Werd added. Research has it that the global FMCG market is projected to reach $15.3 trillion by 2025, recording a compound annual growth rate (CAGR) of 5.4 percent from 2018 to 2025. Also, the global FMCG market has experienced healthy growth over the last decade because of adoption of experience retailing along with reflecting consumers desire to enhance their physical shopping experience with a social or leisure experience. Meanwhile, Nigeria’s burgeoning population remains a strong fundamental attraction to the FMCG sector. Though the country’s FMCG sector has, however, faced challenges over the few years as a result of decline in the purchasing power of consumers as a result of the fall in oil revenue, reduced disposable income, and high cost of logistics service due to the need for improved infrastructure.

How OMSL rescued Chinese vessel from pirate attack on Nigerian waters amaka Anagor-Ewuzie

cean Marine Solutions Limited (OMSL) said it recently saved Nigeria from what would have been a monumental international embarrassment by rescuing a Chinese vessel from the hands of pirates. According to a news report on Fleetmon, builders of the world’s first public vessel data collection, which helps

organisations deliver better logistic reports, a general cargo ship called the Hungarian Glory, managed by Tianjin Xinhai Intl. Ship Management was attacked by pirates on Thursday March 5th on the coastal side of Lagos. “The ship was drifting after the attack, not responding to contact requests. According to the tracking report, the ship started moving at around 1300 UTC on Mar 6, after about an hour, it went adrift again. As of 1500 UTC on Mar

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6, the ship was still adrift or moving at slow speed,” the report stated. According to the report, the Nigerian Navy patrol boat, NNS Sparrow approached the vessel, which was said to have 23 crew all Chinese onboard, in nearly 24 hours after the alert. NNS Sparrow is one of the patrol boats of the OMSL audited and approved by the Nigerian Navy and fitted with comprehensive communication equipment, enabling full

situational awareness for clients’ enhanced protection. It executed the rescue mission and safely brought the vessel back to Lagos. “The vessel is not our client’s vessel but the Navy beckoned on us to assist considering the amount of bureaucracy it would take them to execute rescue operation. We work with the Navy and they are in charge of our vessels so it was easy for them to divert our vessel from SAA (Secure Anchorage Area) for the res-

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cue. They only informed us of their decision because it is of national interest,” the report stated quoting a source close to OMSL that does want his name on the print. According to one of the Chinese operator, “We are glad that when it was necessary, Nigeria had a company it could call on for such emergency operation. We applaud the OMSL for their prompt, proactive and professional intervention.” OMSL is Nigeria’s leading

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asset protection company dedicated to protecting her natural resources from graft and illegal activities. The security firm was established to enhance the safeguarding of maritime-related commercial investments by offering expert advice and real-time solutions to security problems. It has gone further by providing premier security solutions that helps to promote a safe business environment not only in Nigeria but the entire West African Coast.

Wednesday 11 March 2020

BUSINESS DAY

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Wednesday 11 March 2020

Harvard Business Review

BUSINESS DAY

ManagementDigest

Interview Part 1

Author Aean Koontz on staying inspired the New York Times paperback bestseller list and sold two million copies in the first year. And that showed us that we’d been right. We could tell that enthusiasm was building. It wasn’t delusion. Then it was just slow, incremental sales growth and critical reception that started to be of a different kind.

Alison Beard

Dean Koontz is one of the world’s most prolific and bestselling writers, with more than 120 novels to his name. During a difficult childhood, books were his refuge, so he has devoted his life — 6:30 a.m. to dinnertime, six days a week, for the past five decades — to creating fictional worlds across a range of genres for his devoted readers.

here you your ative ergy

do find creenand

stamina? It goes back to what books meant to me when I was young. I came from a very poor family. My dad was a violent alcoholic. Books were both an escape and a lesson that other lives were different. They showed me the level of success the world offered. And that was plenty of motivation to change my destiny. I realized that you can make what you want of life, and I don’t think I’ve ever stopped feeling that way. I’ve never stopped being excited about books and the potential of them. So there’s never been a time when you’ve thought, I can’t keep doing this anymore? If I wrote the same book every time, which is what publishers prefer you to do, I would go profoundly nuts. It’s a formuladriven business — if you’ve written one book about a bricklayer, they want you to write 1,000 books about a bricklayer — but I’m constantly changing things up. The advice has been not to do that, not to mix genres, not to try different kinds of storytelling, and I understand that. It’s more difficult to market a book that’s not like the book that everybody bought and enjoyed before. On the other hand, doing anything for as long as I’ve done this can lead to boredom, and change — going for something you haven’t gone for before and that you’re terrified you’re going to fail at — is how I avoid it. When an idea comes to me, and it seems too big to write, too complicated to convey to a reader, that’s when I’m most energized. The challenge is a medicine against boredom. It inoculates you. How do you gauge the

right level of creative risk to take? I wrote a book many years ago called “The Bad Place,” with a character, Thomas, who’s a boy with Down syndrome. My agent at the time, after reading the manuscript, called me up and said, “The Thomas character is pure genius. I can’t believe you pulled this off.” And I said, “You know, I loved writing from that character so much I thought about doing an entire novel from the point of view of someone with Down syndrome.” She was silent for about half a minute, then said, “There’s such a thing as too much genius.” But I think you can pull off anything if you put your mind to it. Language is so flexible and beautiful and offers so many techniques to a writer. You initially wrote under pseudonyms. When did you realize that your name carried currency? In my early days, every time I did something a little bit different, which was most of the time, agents and publishers would say, “You must have a pen name.” I was naive, so I did. Then gradually I saw that something was happening around the books under my own name. I wasn’t a bestselling author yet, www.businessday.ng

but we were getting 30 or 40 letters a week, instead of three or four. So in the late ’70s or early ’80s, my wife and I decided to buy back the rights to many of my books. We had to stretch ourselves, and other writers thought I was insane. Publishers would sell them back to me, but often at what they’d paid me for them, which meant that I had essentially done the books for nothing. But there were two reasons we did it. One, I had written a number of science fiction novels, and we knew that if they stayed in print, I would forever be a science fiction writer in critics’ minds. Once they label you, it takes years to get past it. So by buying those titles back, we were eliminating that danger. Two, we felt the other books would have ongoing value if I became a bigger seller. I remember one case where we went to the publisher of four of my books that I’d written under a pen name and asked to buy them back. I don’t know whether it was a bad day for him or he was just mean-spirited, but he said, “You can have them for nothing. They’re worthless anyway.” And rather than be insulted, we said, “Well, thank you very much.” And the very first one of those four that we released under my name spent six weeks at number one on

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It took 18 years to get from your first novel, “Starquest,” to your first bestseller. Was that a frustrating wait? It’s such a thrill to be published in the first place. If you’ve been dreaming about a life of books since you were a child, you can go for years on a modest level of success and feel perfectly comfortable. But it was frustrating later on when I felt that certain books had what it took, but we weren’t getting the support to make it happen — or when we would have a paperback bestseller, but my hardcover publisher would say, “Oh, you’ll never have a hardcover bestseller.” Eventually I understood that success requires the support of an agent and publishing, and I had to move at various times in my career — not out of agitation or anger but just when it became apparent that change was necessary. Sometimes it’s painful to do, because you’re leaving people you’ve come to like very much. But it’s not them, it’s the system that isn’t working for you anymore. When you have a hit book, is there huge pressure to do it again? My first book to reach No. 1 in hardcover was called “Midnight.” My publisher called me and said, “I have wonderful news.” But before I could say, “Whoopee!” she said, “Now you must understand: You do not write the kind of books that can be No. 1, and this will never happen again.” And my balloon of excitement was deflated in an instant. We had four No. 1 books after that, and she said the same thing every single time. So at first I didn’t have pressure to keep it up; instead, I had to keep proving myself. Finally I said, “I have to go somewhere where they think it is going to happen again.” What is your approach to working with editors? Working well together is crucial. @Businessdayng

I had one situation in which I was very excited about a publisher and editor, then discovered I was getting editorial by committee — all kinds of notes that conflicted with one another. An editorial relationship has to be real and between me and somebody I respect, and I’ve been mostly fortunate in that regard. I know there are some writers who don’t want to take any direction. But even though I’m obsessive-compulsive as a writer — I rewrite every page 20 or 30 times before I move to the next one, so I turn in a pretty clean manuscript — I know a good editor can always spot things I haven’t thought of or make little fixes. And there’s no reason not to listen with an open mind: “Yeah, I could do that” or “No, I can’t.” It forces you to explain why you did things a certain way. And if you can’t, if something doesn’t have a thematic reason you can easily lay out, then you did sort of fudge it, and you’ve got to revisit it. If you can answer the question, it makes it clear that you did it for the right reasons. Now, my wife is my toughest and fairest critic. When she reads something and has a problem, I look at it in a very serious way. If she doesn’t have a problem, I feel more confident with it. Your wife has played such a big role in your professional life. Is it difficult living and working together? I know people who think it’s the sure road to divorce. But our offices are side by side in the house, so it’s 24/7 — and I can’t imagine it any other way. One reason our marriage works so well is that we share the same sense of humor — ranging from dark to silly. We both know that there is almost nothing in life that isn’t funny in retrospect, and if you have that attitude, work and domestic issues don’t get as serious, because you know a month or a year or two from now, it’s all going to look very small. Also, she has a different set of skills and abilities than I do, so we fit together like a puzzle, almost. Her skill is accounting and numbers, and mine is not. I probably haven’t written a check in a year and very few over the past 50, and I never could balance a checkbook. So all of that’s lifted from me, and I get to focus more intently on what I do.

Wednesday 11 March 2020

BUSINESS DAY

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State’s partnership, collaboration key to effective enforcement of compulsory insurances …as NAICOM plans second phase of MDRI Modestus Anaesoronye

artnerships with states have been identified as critical to the implementation and effective enforcement of the different compulsory insurances. According to analysts, the states are critical stakeholders in driving enforcement at the state levels across the country. The National Insurance Commission (NAICOM) said recently that its ability to court the states into partnering with the insurance industry to promote the compulsory insurance scheme is critical to the success of the scheme. Sunday Thomas, acting commissioner for insurance/ CEO of NAICOM said the commission is engaging Nigeria’s ‘Governor’s Forum’ to partner with the insurance industry in enforcement of the compulsory scheme. Thomas said that through the forum, the governors can be made to see the benefits of the partnership for their citizens. “Beyond the benefits of protecting the citizens against third party risks, it will be a source of employment for the partner states, and source of internally generated revenue, Thomas said. In 2009, the Commission launched the Market Development and Restructuring Initiative (MDRI) project aimed at a comprehensive pursuit of development of the industry as well as ensuring full compliance with extant Laws in respect of compulsory insurances. The first phase of the project according to NAICOM was successfully carried out in all the six geo-political zones in the country. Thomas said that the second phase of the MDRI project will soon be unveiled and it will mark out clear targets and tasks for all stakeholders in the industry. “The Commission is committed to vigorously pursue the continued implementation of Compulsory Insurances to which collaboration and supports from all stakeholders are key towards achieving the desired goal. The compulsory insurance includes Motor Third party Insurance of section 68

L-R: Victor Peters, head, Agency Operations; Felicia and Lucky Aigbogun, silver trophy winner, overall best Agency in renewal premium; Funmi Omo, managing director/CEO; Olabisi Adekola, executive director, Finance; and Bode Raji, head, Finance all of African Alliance at the company’s annual Agency awards held recently.

of the Insurance Act 2003; Buildings under construction of section 64 of the Insurance Act 2003; Occupiers liability insurance of section 65 of the Insurance Act 2003; Group life Insurance in line with the Pension Reform Act 2004 and Health Care Professional Indemnity Insurance-under section 45 of the NHIS Act 1999. But as beautiful as these initiatives, not much success has been achieved in terms of implementation and enforcement of the laws, so have yet to impact on the industry revenue generation. Efforts of the commission to embark on enforcement have also not yielded much fruit as a result of lack of human and material capacity to drive the process. The security agencies including the police and the road safety corps that should complement the industry to ensure enforcements have also not been efficient having compromised in many instances, and this has further worsened the enforcement process. Across the country are ongoing con-

structions works on public buildings, which require building liability insurance or building construction insurances against third party liability, meaning that owners or promoters of such projects or properties have committed certain offences punishable by law, and therefore needs to be prosecuted. For instance, Section 64(1) of the 2003 Insurance Act states that “No person shall cause to be constructed any building of more than two floors without insuring with a registered insurer, his liability in respect of construction risks caused by his negligence or the negligence of his servants, agents or consultants, which may result in bodily injury or loss of life to or damage to property of any workman on the site or of any member of the public. According to the law, the duty to insure under subsection (1) of this section shall arise when a building is under construction. Subsection three states that a person who contravenes subsection (1) of this section commits an offence and on convic-

tion shall be liable to a fine of N250, 000 or imprisonment for three years or both. While session 65 states that every public building shall be insured with a registered insurer against the hazards of collapse, fire, earthquake, storm and flood. “Public building”, in this section includes a tenement house, hostel, a building occupied by a tenant, lodger or licensee and any building to which members of the public have ingress and aggress for the purpose of obtaining educational or medical service, or for the purpose of recreation or transaction of business. The insurance policy under subsection (1) shall cover the legal liabilities of an owner or occupier of premises in respect of loss of or damage to property or bodily injury or death suffered by any user of the premises and third parties. An occupier or owner of premises who is in default of this section commits an offence and is liable on conviction to a fine of not more than N100,000 or to imprisonment for one year or both.

African Alliance CEO charge’s agents to develop new markets Modestus Anaesoronye

ife underwriting specialist, African Alliance Insurance Plc has charged its agency network to build up capacity, identifying new markets to sustain the growth of the portfolios. The company gave the charge recently when it rewarded its standout sales men and women for their excellent contribution to the growth of the company. Speaking at the event, Funmi Omo, managing director/CEO, African Alliance

Insurance, congratulated the winners but charged them not to relent on their oars. “Our premium income rose by 45 percent year on year in 2019 and we are successfully growing a retail market that is sure to bloom. We can and we will do more this 2020. It is a new start and a brand new opportunity to do even more work. We will not leave you to it, you can rest assured of the management’s continued support towards achieving your budgets,” she said. Reiterating the management’s position, Victor Peters, Head of Agency Operations, African Alliance Insurance, encouraged www.businessday.ng

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the team to build up their capacity to sell more by identifying new markets, digging further into already identified ones and strategic recruitments across the sales force. The Awards ceremony which held in Lagos saw a total of 26 awards presented to deserving Agents, Unit Managers and Agency Managers from all over the country. Mary Akwamanti (Ilupeju Area) won the gold trophy for being the best Agency in first year premium income based on product line while Lucky Aigbogun (Asaba Area) won the silver trophy as the top Agency in renewal premium income. @Businessdayng

Wednesday 11 March 2020

BUSINESS DAY

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Insurers embrace index based scheme to scale up 15m smallholder farmers Modestus Anaesoronye

ndex based agriculture has become a topical issue in Nigeria, talked about among insurance companies, farmers and the development partners within the agricultural scheme. This is as the country plans scaling up index insurance for smallholder farmers. Nigeria through CCAFS is integrating index-based insurance with climate risk management strategies including climate information services, and providing technical input, as Nigeria’s plans to scale up agricultural insurance for 15 million of its smallholder farmers. CGIAR is a global partnership that unites international organizations engaged in research for a food-secured future. CGIAR research is dedicated to reducing rural poverty, increasing food security, improving human health and nutrition, and ensuring sustainable management of natural resources. As climate change takes hold, increasingly erratic

Staff and Management of Anchor Insurance Company Limited during a fitness and awareness creation walk recently

weather and climate shifts threaten already tenuous agricultural livelihoods and food security in the developing world. Because of the high cost of verifying losses on large numbers of small landholdings, traditional loss-based insurance is not viable for remote rural smallholders. Over the past few decades, a new science-based

solution has arisen, capturing the imagination of development practitioners that could usher in a new era of intensified agricultural production and provide a safety net for all farmers at the same time. Today, advances in satellite technology and data analysis help avoid the pitfalls of high transaction costs and therefore expand the potential

reach of insurance policies to rural areas previously considered uninsurable. In this new paradigm, insurance payouts are pegged to easily measure environmental conditions, or an “index,” that is closely related to agricultural production losses. Possible indices include rainfall, yields, or vegetation levels measured by satellites.

When an index exceeds a certain threshold, farmers receive a fast, efficient payout, in some cases delivered via mobile phones. Despite the promise of these system, doubts have been raised over whether poor farmers struggling to feed their families would be willing to buy insurance, despite the fact that this insurance could, in fact,

increase their productivity and food security. In addition, there are considerable challenges that must be overcome to effectively service remote areas with poor infrastructure. Challenging this narrative, CCAFS research showcases initiatives that have overcome many of these challenges, scaling rapidly over the past few years to reach tens of thousands to tens of millions of smallholder farmers in some of the poorest areas of the world. CCAFS has shown that key traits of successful index insurance schemes include the involvement of farmers in the index design process, close alignment with policymakers and the private sector, and collaboration with researchers. CCAFS is now engaged with scaling up index-insurance in three key regions. In East Africa, CCAFS is investigating the potential for index-based insurance to increase uptake of droughttolerant maize and bean varieties. In South Asia, CCAFS is testing the feasibility of index-based insurance for flood damage to crops.

Coronavirus: Will the outbreak lead to an explosion of large insurance claims from businesses?

he German insurer, Munich Re has provided cancellation insurance for the Tokyo games ‘in the hundreds of millions of euros’ ( AP ) Hundreds of flights have been cancelled, major sporting events called off. Business has dried up entirely for some unfortunate firms. The economic damage from the coronavirus outbreak has already been significant. And it’s likely to get worse. There’s speculation the Tokyo Olympics this summer might need to be postponed – a festival on which the Japanese government has already spent some $25bn (£19bn). But that’s why businesses and individuals take out

insurance isn’t it? To cover themselves for when unexpected and hugely damaging shocks like disease outbreaks hit? The UK government this week, under pressure from industry lobby groups, designated Covid-19 a “notifiable disease”, in order to make it easier for affected companies to claim insurance. So can we expect an avalanche of claims and big losses for insurance companies as a result of this outbreak? Or are companies in for disappointment if they expect to be compensated for the economic damage wreaked by Covid-19? What insurance is actually available against disease? It’s worth drawing a distinction between two broad www.businessday.ng

categories of business insurance, say experts. First, there’s event cancellation insurance, which is a type

generally offered by sophisticated insurance markets like Lloyd’s of London or major insurance conglom-

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erates. Torsten Jeworrek of the German insurer Munich Re told Reuters last month that

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his firm had provided cancellation insurance for the Tokyo games “in the hundreds of millions of euros”. Second, there’s the more general cover for “business interruption” offered to companies by smaller insurance firms. But if a firm is covered it’s covered, isn’t it. Not necessarily. It all depends on the wording of the individual insurance contract. But it’s important to bear a broad principle in mind, namely that there’s a difference from the perspective of the insurance company between “definable” and “undefinable” risk. And insurance firms are unlikely to have written an insurance policy that covers a firm from the impact of an undefinable risk. Source: UK Independent

Wednesday 11 March 2020

BUSINESS DAY

BANKING Banks align products, services to meet women’s needs at IWD Stories by HOPE MOSES-ASHIKE

igerian banks took turns to celebrate women at this year’s International Women’s Day (IWD) through products and services designed to meet their financial needs. The banks that identified the needs of women and also celebrated their great potentials include Fidelity Bank Plc, Union Bank Plc, Unity Bank Plc, and EcoBank Nigeria, among others. International Women’s Day is a day set aside globally to celebrate the social, economic, cultural and political achievements of women and also reflect on action to accelerate gender equality. Fidelity bank reaffirmed its readiness to assist women entrepreneurs in the country take their businesses to the next levels of growth by making available to them, low-cost intervention funding and transactional platforms, and tailored business advisory and capacity building services. Nnamdi Okonkwo, managing director/CEO, disclosed this Friday at “Giving

her Wings”; a platform to mentor, build and connect young women entrepreneurs with role models held at its private banking office in Lagos. The event was organized as part of activities marking the 2020 International Women’s Day. He said the bank’s longrunning support for the growth and development of small businesses in Nigeria stems from its recognition of SMEs as critical agents of economic development and

transformation in Nigeria and the world at large. Union Bank recently marked the International Women’s Day, reaffirming its commitment to women empowerment with the launch of the Alpher Mentorship Programme. The Mentorship Programme aligns firmly with the global IWD 2020 theme – Each for Equal, a call for individuals to join the push for gender parity across the world. The Mentorship

scheme will provide a platform for young women to be mentored for a year by successful career women within Union Bank. Speaking concerning the IWD celebrations and the launch of the Alpher Mentorship Programme, Lola Cardoso, head of retail banking and digital, said, “as we join the world to celebrate International Women’s Day, we are especially proud to unveil the Alpher Mentorship Programme, an

Heritage Bank advocates increased support for MSMEs

eritage Bank Plc has called for increased support for Micro, Small and Medium Scale Enterprises (MSMEs) in order to achieve the country’s quest for double digit economic growth. Noting the improvement in the country’s Gross Domestic Product (GDP) growth rate to 2.27 percent in 2019 from 1.91 percent in 2018, Ifie Sekibo, managing director/CEO said that increasing support to MSMEs, given their dominant role in the economy, will help to leapfrog Nigeria to double digit GDP growth rate. Highlighting the importance of MSMEs contributions to the nation’s economy, he said, “Nigeria has 41.5 million MSMEs which contributed about 48 percent of the GDP in the last five years. With a total number of about 17.4 million, MSMEs account for about 50 percent of industrial jobs and nearly 90 percent of the manufacturing sector, in terms of

number of enterprises in the country.” According to him, there are lots of opportunities for the country in MSMEs and Heritage Bank is taking the lead through various initiatives such as its youth entrepreneurship development program which is aimed at

increasing the contributions of the MSME segment to the economy. Sekibo said for Nigeria to achieve its aim as giant of Africa or as an economy to be reckoned with in the world, a lot of mileage needs to be covered in the SMEs subsector.

Ifie Sekibo, managing director/CEO, Heritage Bank www.businessday.ng

initiative which will provide young women with the support they require to thrive. Through our Alpher proposition, we will continue to support and enable success for women of all backgrounds.” Ecobank Nigeria, reiterated its commitment to gender parity among staff. In a message to commemorate International Women’s Day (IWD) 2020, Patrick Akinwuntan, managing director/CEO, said this year’s edition with the theme: #EachforEqual underscores the compelling need of gender equality and sustainable efforts of women empowerment at workplace for which Ecobank is proudly committed. “For us in Ecobank, this event allows us to reflect on the achievements of female Ecobankers and other great achievers in our space and society. Ecobank is proud to support change makers of all ages in the global movement to advance gender equality and empower women. We always remind ourselves of our corporate pledge to ensure parity. Ecobank women have distinguished themselves and continue to make impact in the various roles in the bank. We use this opportunity of

the IWD to celebrate these great Ecobankers.” Unity Bank Plc called on Nigerian women to see initiatives that promote gender balance as further opportunities to excel in their chosen careers. Tomi Somefun, managing director/CEO, made the call in Lagos in a remark to mark this year’s International Women’s Day. In a statement by the bank, Somefun stated that “gender balance initiatives provide opportunities that must be explored by every woman.” Going down memory lane when she started her career over 30 years ago, the Unity Bank boss welcomed the concerted efforts that have been put into achieving gender balance in recent times which has been very purposeful, noting that women in career jobs which were fewer in number before this time had to fight for space. “Certain roles are now assigned to women. But I think that beyond that, as women, we should not fall back and relax. We should earn whatever space that is given to us and excel at it. Being a woman should not be an excuse for not doing well,” Somefun said.

Access Bank launches ‘TraderLite’ for small businesses

He stated, “The contribution of the MSMEs to the Nigerian economy cannot be undermined. So if the MSMEs are supported financially and they take their rightful place in the economy of Nigeria, it will create a lot of middle class income earners which is very vital to the economy of any nation. “Heritage Bank is collaborating with relevant operators of MSMEs to help them grow into big and sustainable businesses because we believe some of these businesses are critical to the survival of the nation,” he said. He explained that the entrepreneur schemes of the bank in the support for business had always focused on dependable job-creating sectors, such as agricultural value chain (fish farming, poultry, snail farming), cottage industry, mining and solid minerals, creative industry (tourism, arts and crafts), and Information and Communications Technology (ICT).

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n the bid to stimulate the growth of the economy, Nigeria’s leading retail bank, Access bank plc has launched TraderLite, an account that enables micro businesses, with turnover between N50, 000 and N1 million, operate their businesses with their individual name or registered business name. Speaking at the launch of the new product, Victor Etuokwu, executive director, retail banking, said the bank looks at its customers beyond being just customers but also as partners. “The future of Nigeria’s economy is Small and Medium-Scale Enterprises because they can provide more than enough jobs to the unemployed if empowered. And that is why the bank’s passion is to offer more than financial services to its customers and also work with them in growing and expanding their businesses. Whichever category you fall into; we are here to work with you to take your business to a whole new level,” he said. TraderLite , a variant of the diamond business advantage @Businessdayng

account within the bank’s emerging businesses portfolio, is specially designed for micro businesses with the aim of providing financial inclusion for businesses in that segment while equipping them with the required skills to grow their businesses. The product has two variants namely: DBA TraderLite Individual, which is for individuals with unregistered businesses and DBA TraderLite Business, for registered businesses. The diamond business advantage proposition from Access bank has been designed to add value to Micro, Small and Medium scale business owners so that they can grow their businesses with smart banking. The proposition provides SME’s market linkages, increased referral base and networks that enable them scale the hurdles of accessing new markets for their products. Networking sessions such as business clubs, business clinics, and business seminars enable MSME customers expand their referral base through interacting with other MSMEs.

Wednesday 11 March 2020

C002D5556

BUSINESS DAY

FEATURE

Looking within: Empowering Nigeria’s next generation of entrepreneurs IFEOMA OKEKE

ntrepreneurs are driving Nigeria’s next wave of economic growth, and they are looking to banks to help them do it. Strategic partnerships are how Nigeria’s entrepreneurs are driving the country’s next growth wave Championing economic growth with support for entrepreneurship Entrepreneurs are crucial to economic growth, in any country. The best entrepreneurs drive innovation, create high-quality jobs, spread wealth and widen prosperity, contributing to vibrant markets that boost inclusion and sustainability. Nigeria’s entrepreneurial visionariespossess an untapped wealth of ideas with the potential to transform our economy. Manyare held back by a lack of access to the capital requiredto translate these ideas into successful businesses. This gap in access to finance has becomeamajor hindrance to therapid development of entrepreneurship in the countryover the years. A recent city-level study on six entrepreneurship ecosystems by Endeavor Insight, with support from the Bill & Melinda Gates Foundation, found that in Bangalore, Dhaka, Lagos, Nairobi, Kampala, and Dar es Salaam, a large proportion of companies are not only SMEs but low productivity microbusinesses, making no significant impact on local job creation, economic growth or other measures of productivity. Of 800 companies in Lagos (9,500 jobs between them), almost half had fewer than three employees and had never raised capital. The top 10 percent created more than twothirds of employment and only 2 percent reached a scale of 100 staff. The average Nigerian entrepreneur has experienced the challenges of entrepreneurship in a developing economy. However, they are motivated by the unexplored possibilities within the space and the opportunities that now exist, thanks to government and private initiatives that are removing the traditional barriers to accessloans and other financial opportunities. Forward-thinking Banks like Access Bank have become firm favourites in this regard. With the knowledge that Small and Medium Scale Enterprises are important engines that drive economic growth, employment and social cohesion in any country, Access Bank remains committed to its goal of financing and facilitating sustainable growth for entrepreneurs in Nigeriathrough innovation and best class product ideas, which are uniquely tailored

A cross section of participants at Access/She Leads Africa event

to meet the requirements of specific businesses. Empowering entrepreneurs through foresight and innovation Lack of jobs and a rise in poverty have turned many away from traditional paid employment and encouraged many to take a stab at private entrepreneurship. Nigeria has never seen so many young people take charge of their destinies, yet, a large number of them possess little to no experience of the many complex decisions that determine the growth trajectory of their businesses. This is where institutions like Access Bank are stepping up, partnering these innovators, andhelping them secure the required funds and mentorship to start, grow and sustain their businesses. Here are some of the avenuesthrough which Access Bank is empowering entrepreneurs: W Initiative Discussions on Access Bank’s contributions to the growth of small and medium scale businesses in Nigeria is incomplete without mentioning the W Initiative, a networking and empowermen platform tailored specifically for women.Since its creation in 2014, the initiative hasremained the home of everything Access Bank has to offer women. It has also helped to solidify the bank’s position as the Bank of choice for women in the markets and communities it serves. In furtherance of its commitment to women’s economic empowerment, Access Bank has deployed several programs through the W initiative which include; Womenpreneur Pitch-A-Ton Looking to provide business and financial support to femaleentrepreneurs in Nigeria, Access Bank recently empowered 50 women through its Womenpreneur Pitch-A-Ton, a capacitybuilding initiative that provided financial grants as well as a miniMBA in conjunction with the www.businessday.ng

“

Seeking tooffer even more value to its customers’ businesses, the Bank also developed several initiatives – trainings, seminars, and workshops with industry specialists– to help entrepreneurs build capacity for business International Finance Corporation (IFC).The three winners who emergedfrom thePitch-A-Tonwere rewarded withN9 million to upscale their businesses. W Power Loan The ‘W Power Loan’, is exclusively available to businesses that are managed by women or have at least 50% female ownership. Designed to close the financing gap for female-owned businesses, theW Power Loan provideswomen access to credit facilities at an interest rate lower than the regular market price, and is perfect for women operating in Fashion, Catering/Eateries, Manufacturing, Beauty & Wellness, Hospitality & Tourism, Education, I.T and HealthCare sectors. Since its launch in July 2018, a total of 2116 loans valued at 14 billionnaira have been disbursed to bridge expansion of operations, acquisition of fixed/capital assets https://www.facebook.com/businessdayng

and working capital requirement of female-owned businesses.Access Bank’s commitment to empowering these businesses has contributed significantly to the development of many SMEs in Nigeria with a direct impact on the socioeconomic growth of the country. Also worthy of noteis the fact that the Bank has recorded zero percent (0%) non-performing loans to date, which serves as a testament to the financial growth and stability of the beneficiaries (women). Womenpreneur business workshop Through the Enterprise Development Center (EDC) certified program, ‘Womenpreneur Business Workshop,’ Access Bank has bridged business and managerial skill gaps amongst thousands of female entrepreneurs. More than 700 families benefited from the educational advisory sessions/fairs, facilitated by world-renowned experts, including Peggy Hanefors of Ascent Education. Cash Flow – Collateral-free loans for SMEs One of the key challenges many SMEs face in accessing loans are collateral requirements. In response to this, Access Bank is introducingCash Flow, a specific lending assessment method that enables the Bank offer loans to customers who ordinarily would have been excluded because of their financial standing.The Bank determines each business’s loan requirements, allowing them to access up to N5 million without collateral. In 2019, Access Bank’s finance support targeted 30,000 Micro, Small, and Medium Enterprises (MSMEs). In the preceding year, the Bank advanced N37billion new loans to MSME new customers, making them the highest lender to operators in that segment of the economy. According to Access Bank’s Head of Emerging Business, Ayo Olojede, “We don’t pay lip service @Businessdayng

to our love for MSMEs. To the extent of how much we want to support them, we have also invested significantly in our understanding of the risk factors as well as the variables in that segment.” The collateral-free loans are available to businesses in all sectors of the economy. Beyond banking To meet the needs of growing businesses, Access Bank partnered with several law firms across the country to register unregistered SMEs at a discount summing up to 70percent of the market rateand afford them the opportunity of owning corporate bank accounts for their businesses. Seeking tooffer even more value to its customers’ businesses, the Bank also developed several initiatives – trainings, seminars, and workshops with industry specialists– to help entrepreneurs build capacity for business.Furthermore,Access Bankprovides business management and technological support, such as website design and more to MSMEs at highly discounted rates. ‘More Access to market’ initiative To increase the reach and access of entrepreneurs to their target market, Access Bank has also partnered with EbonyLife TV to supportentrepreneurs by way of advertisement. As a result of this initiative, businesses get to enjoy: •Exposure to potential customers throughEbonyLife TV on DSTV and StarTimes •Sponsored production of 15-second video spots; and •Broadcast of the video 3 times a week for the duration of the selected plan (such as quarterly, bi-annually, and annually). With access to SME finance becoming a key priority in developing countries like Nigeria, and the non-availability of debt finance to ensure smooth operations and expansion, Access Bank has been able to prevent the failure of several indigenous businesses, while also supporting their expansion. The Bank’s efforttowards empowering the next generation of entrepreneurs have brought about social inclusion, socio-economic impact and all-round advancement for business owners in the country, with over 2200 entrepreneurs benefitting actively from the Bank’s entrepreneurship schemes. It has become increasinglyevidentthat innovative empowerment initiatives will play a major role in positive economic transformation and enablement of the next generation of entrepreneurs in Nigeria. However, there are no doubts that Access Bank has sufficiently restored hope to indigenous business owners, and proven that its value is indeed beyond banking.

Wednesday 11 March 2020

BUSINESS DAY

TRANSPORTation Motoring

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Roads

COVID 19-induced oil price dip threatens local vehicle prices MIKE OCHONMA Transport Editor

ith an already impoverished Nigerian middle class left without the purchasing the power to acquire new vehicles, there are fears among some concerned stakeholder in the local automotive market that, following the fall in global oil prices triggered by the spread of the Coronavirus endemic, that showrooms and stock yards for new vehicles may soon be empty in the following weeks and months. The impact of the deadly coronavirus scourge is in one way or the other negatively affecting various aspects of the economy in Nigeria including the market for vehicles as the apprehension and confusion generated by the disease rages. In a telephone conversation with BusinessDay on Monday, Thomas Pelletier, managing director/country delegate, CFAO Automotive Group while stating that there is not much impact felt yet, said that, the effect of what is happeing currently around the globe should be of serious concern to the global automotive industry. According to Thomas Pelletier, ‘’No much impact yet, but we expect volatility in freight cost and some shortage of components to original equipment manufacturers (OEMs) that affect production’’. The implication of this is that the cost of foreign exchange will be high and its accessibility may be very difficult. Responding to enquiries on proactive steps that the local automotive market should take if the situation lingers, the CFAO boss said, there are none unfortunately describing the situation as beyond anybody’s control.

Toyota to scrap VP’s position in management rejig MIKE OCHONMA

He said the good news is that, the virus seems to be under control in China from where it originated from. He expressed hope that it should be done with in Europe in the next one month. On the sharp drop in oil prices

‘

We are studying the situation and would react accordingly as events unfold. Oil price drop will only affect the industry if there is devaluation of the Naira. Prices of vehicles will go up and this might affect sales and the over all market size

and how it will affect the automotive business, Thomas Pelltier described the impact as a huge and major one that may affect the auto market tremendously if foreign exchange becomes scarce again. Kunle Ade-Ojo, managing director and chief executive of Toyota Nigeria Limited while expressing his views on how the coronavirus disease would affect automotive businesses in Nigeria disclosed that it is mainly on new production and shipments of automotives and spare parts already ordered. On fears of possible increases in prices of new vehicles in the wake od dropping oil prices, the Kunle Ade-Ojo simply responded, ‘’We are studying the situation and would react accordingly as events unfold. Oil price drop will only affect the industry if there is devaluation of the Naira. Prices of vehicles will go up and this might affect sales and the over all market size. Oil tumbled 31 percent in a matter of seconds overnight on Sunday, representing the sharpest decline ever since the Gulf War in

1991. The losses are being fueled by sinking demand due to coronavirus concerns, which has in turn sparked a series of price cuts. Saudi Arabia slashed its prices by the most in at least 20 years over the weekend. A price-cut free-for-all has broken out globally following the collapse of an OPEC+ alliance last week. Exactly one year ago, there were about 11.8 million licensed cars on Nigeria’s roads as at Q4 2018, compared to 11.6 million in the corresponding period of 2017 with commercial vehicles holding about 58.08 per cent of the number. The size of the imported vehicle market in Nigeria is currently estimated at N1.2 trillion (approximately $3.3 bilion), and about 70 percent of this are second hand vehicles, also known as tokunbo. With a new car policy imposing a 35 percent import tariff and another 35 percent as levy, market watchers still believe that used car market is still thriving despite the closure of its land borders with other neighbouring countries since last year.

n a strategic move aimed at cost cutting, improving and streamlining the company’s structures, Toyota Motor Corporation has scrapped the office of the executive vice president (EVP). It also named Kenta Kon as its next chief financial officer. Kon, who is currently chief accounting officer, will take on the company’s number two position in April in a statement by the Japanese automaker. Under the new structure, Toyota said it would scrap its six executive vice presidents positions, first introduced at the company in 1982, with current roles becoming chief operating officer responsibilities. Four of the six executive vice presidents will largely keep their existing roles without the EVP title. It is the latest in a series of structural changes at Toyota, one of the world’s largest automakers, which is trying to simplify its operations to become more nimble to compete with rivals in developing electric vehicles, self-driving cars and other new technologies.

Kenta Kon

Retooled Outlander gets new look, more features MIKE OCHONMA

itsubishi is sweetening the deal for those seeking a family-sized SUV with all-wheel-drive. The facelifted Outlander seven-seater which just arrived in the African market, but not yer in Nigeria sporting a new look, lower price tag and beefed up specification. You can tell the 2020 model apart by its new ‘Dynamic Shield’ front bumper and grille design, complete with boomerang shaped elements, as well as by its redesigned alloy wheels and new rear bumper highlights. Inside it, the occupants can find

upgraded leather seats, new dashboard trim and a redesigned 20.3cm touchscreen infotainment system www.businessday.ng

with Android Auto and Apple CarPlay connectivity as well as a reverse camera and park distance control.

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There is only one model derivative, badged GLS, and it comes fully loaded. It has also gained some new cabin features, such as electric lumbar support and seat warmers for the front seats, a new dual-zone climate control system with rear vents, electric parking brake with auto-hold and additional storage compartments for the pear passengers, who also now receive their own USB inputs. Other standard features include an electric tailgate mechanism, multi-function steering wheel, auto headlights and wipers and pushbutton start. The vehicle offers seating for seven within three rows and the @Businessdayng

second row has slide and recline adjustments. As before, the Outlander is powered by a normally aspirated 2.4-litre petrol engine that produces 123kW and 222Nm. Power goes to all four wheels through a six-step CVT continuously variable transmission and super all-wheel control all-wheeldrive system. The latter can be configured by the driver via four modes: Eco, Normal, Snow and Gravel. Upon available in many of the African, it will be offered with includes a five-year/90 000km service plan, three-year/100 000km warranty and five years of roadside assistance depending on the country.

Wednesday 11 March 2020

BUSINESS DAY

TRANSPORTation Motoring

RailBusiness

ModernTravel

Roads

10th generation E-Class gets midlife refresh, new engines MIKE OCHONMA

with 200kW and a 3-litre straight-six that’s good for 270kW, both featuring EQ Boost mild hybrid technology. The latter unit is, of course, a milder version of the engine that already powers the MercedesAMG E53 models, and this variant carries over to the new range, still producing 320kW and 520Nm. Diesel is still a big part of the engine mix with a range of four- and sixcylinder units producing between 118kW and 243kW, while the range is also being ‘greened-up’

with seven plug-in hybrid variants available in both petrol and diesel formats. Inside, the basic cabin design remains as before, with a wide-screen instrumentation and infotainment unit perched above four circular central air vents, but the technology has been updated. Most notably, the latest-generation MBUX multimedia system features here, and buyers can opt for the MBUX Interior Assistant that allows various functions to be controlled via move-

ment recognition. Another new feature is energising seat kinetics, which supports beneficial changes in seated posture by means of minute movements of the seat cushion and backrest when on a journey. There is also a very long list of latest-generation advanced driver assistance systems on offer here, including active distance assist with route-based speed adjustment, active stop-and-go assist, active steering assist and active blind spot assist, now with exit warning.

Bad driving that must be avoided to arrive alive MIKE OCHONMA

here are several scenarios that may grind a driver’s gear and these include potholes, faulty traffic lights and bumper-tobumper traffic. While some drivers might navigate these situations with surprising calmness, bad driving remains one thing all motorists can’t stand. No matter how proficient you are at driving, you may land up in an accident if you or the drivers around you don’t follow certain rules of the road. If you want to be a more considerate driver, there are a few habits to be avoided at all costs. Bad driving habits are serious acts that have the potential to damage cars and cause bodily harm and if you want to be a more considerate driver, here are a few habits to avoid at all costs. Tailgating: It is one of the first things you learn when you prepare to write your learner’s licence: always leave a safe following distance between you and the car in front of you. According to

ollowing the rampant cases of vandalization and increasing cases of theft of materials used in the ongoing construction of Lagos to Ibadan standard gauge rail modernisation project by hoodlums, the federal government has established a Nigerian Railway Corporation (NRC) Command of National Security and Civil Defense Corps (NSCDC). Last year, the federal government condemned the stealing of clips, bolts and knots on Lagos-Ibadan rail track by vandals. Fidet Okhiria, managing director of the Nigerian Railway

in Lagos recently, Abdulahi Gana, commandant-general represented by K.S Aminu, the deputy commandantgeneral, assured management of the corporation of readiness to tackle security challenges and threats on NRC facilities. He also seemed for cooperation of other sister security agencies and staff of the corporation in the gathering of intelligence towards total eradication of vandalism and other criminal elements within the railway corridor. Meanwhile, work across the 10 stations along the 157 km long Lagos-Ibadan standard gauge rail line has been progressing slowly and

Corporation said over 5,000 clips and 10,000 bolts as well as knots stolen by vandals had been replaced along the track which according to him is an additional cost in the rail project modernisation efforts. The deployment of corps is to safeguard the critical national assets and infrastructure of the corporation and that of Chinese Civil Engineering & Construction Corporation; the contractors handling rail modernisation projects in the country according to a statement issued and signed Yakub Mahmood, deputy director, public relations of the NRC. Niyi Alli, director of operations representing Fidet Okhiria, managing director of the corporation while speaking during the inauguration of the command in Lagos, said officials of the corps should consult with the management of the corporation whenever there is security threat. Niyi Alli assured management of NSCDC of the commitment of NRC management towards provision of necessary logistics such as office and residential accommodation that enable the railway command of NSCDC to take off hitch free and perform maximally towards provision of security. Speaking during the inauguration of the command

this has on many occasions worried the minister of transportation raising doubts if the project will be completed and delivered next April as earlier planned by the federal government. Last week, Rotimi Amaechi, minister of transportation, had said the outbreak of coronavirus in China might delay the completion of the rail project. The Chinese government he said had prevented some of the workers from returning to Nigeria because of the disease. The virus, which has become a global health challenge, is threatening the April deadline of the project handled by the China Civil Engineering and Construction Corporation (CCECC). Jerry Oche, Lagos railway district manager, told BusinessDay that the federal government would not sacrifice the health of its citizens because of any project. Oche said if the Chinese were going to come back to Nigeria and continue the project, they must be certified free of the virus, adding that, though the federal government is passionate about the project, the health of Nigerians remains a priority. “The simple question we should ask ourselves is what do we want? Do we want to be infected with the coronavirus because we want to meet the time for the completion of the project?” he asked.

MIKE OCHONMA

he tenth-generation Mercedes-Benz EClass has been given a midlife refresh and it’s far more than just a subtle upgrade that has us splitting hairs about new bumper accents. For starters, Mercedes has completely redesigned the front and rear ends of the car, thereby distinguishing it a lot more from its C-Class junior model that many accused it of resembling a bit too closely. The new frontal design appears to take inspiration from the AMG GT range, while the rear end gets a new horizontal taillight design in place of the previous vertical set-up. But the design changes are just the tip of the iceberg here as the new midsized sedan also gains new engines as well as advanced cabin gadgets and driver assistance systems. The big news on the engine front is a brand new pair of turbopetrol engines made up of a 2-litre

FG sets up NSCDC Command over Lagos-Ibadan rail project vandals

Arrive Alive, “most rear-end collisions are caused when drivers do not obey sufficient following distances”. It’s also pretty aggressive. If you have ever driven in front of someone who insists 5mm is a sufficient following distance, you will know how stressful it is. Studies have found that, the driver of a vehicle travelling at or above 100km/h needs 1.5 seconds to react if someone suddenly stops in front of them. Think about that the next time you find your car edging a bit too close for comfort.

Dangerous overtaking: No-one wants to drive behind someone who is cruising at 60km/h in a 100km/h zone. It seems like some motorists either don’t see or don’t care about the long line of traffic they cause by moving at a snail’s pace. Overtaking is a relatively simple process, but some drivers throw caution to the wind when they try to drive past another vehicle. It is important not to overtake at bends and corners, when the car in front of you has stopped in front of a pedestrian crossing, or when some-

one is slowing down to yield. Texting while driving: How does the idea of driving blindfolded sound? Well, that is essentially what you are doing when you peep at your phone while you are driving. According to the World Health Organisation, the average motorist takes his or her eyes off the road for 4.6 seconds to send or receive messages. That is way more than enough time to cause an accident. If you receive a WhatsApp message while you’re driving, the sensible thing to do is to ignore it. You can respond once you’ve reached your destination. You never know when you’re going to be involved in an accident. Avoiding bad driving habits will swing the odds in your favour, but sometimes it is out of your hands. If a driver behind jumps a traffic light and slams into your car and they don’t have insurance, you need to have comprehensive car insurance to be able to claim from your insurer. You shouldn’t have to stress about insurance.

Wednesday 11 March 2020

BUSINESS DAY

FINANCIAL INCLUSION

& INNOVATION

We are confident about achieving 80% financial inclusion target - CBN Endurance Okafor

ncluding 80 percent of Nigeria’s adult population into the formal financial cycle by 2020 is still achievable, the Central Bank of Nigeria (CBN) told BusinessDay recently in Lagos. Our expectation is to meet the 80 percent financial inclusion target. That is what we are working towards, Aishah Ahmad, Deputy Governor of the Central Bank of Nigeria told BusinessDay. About seven years ago the Central of Nigeria in collaboration with industry stakeholders established the National Financial Inclusion Strategy (NFIS), an initiative the apex bank planned to leverage on to achieve 20

percent financial exclusion target by 2020. “We have confidence that we are going to meet the 80 percent target,” Ahmad said adding that the apex bank is sure about achieving the target “because of the many regulations the CBN has brought out to attract new

players into the industry.” But the CBN had in a circular on July 2018, lamented that Nigeria was not meeting any of the financial inclusion targets agreed and contained in the 2012 Financial Inclusion Strategy. Not only was the country not meeting its targets, but it

was also declining in growth. For instance, while Nigeria achieved 60.3 percent in 2012, it declined to 58.4 percent in 2016 against a target of 69.5 percent translating to financial exclusion of about 41.6 percent. The 2018 data by EFInA put Nigeria’s financial in-

clusion rate at 63.2percent, meaning that as much 36.8 percent or about 40 million adults still lack access. If the apex bank is to achieve its objective through the strategy launched in 2012, it would have to bridge the 16.8 percent inclusion gap before year-end. Even though Nigeria’s 2018 inclusion data revealed that more people were beginning to have access to financial services, the pace of inclusion was however lower than the country’s population growth rate, a survey by industry players shows. “What we saw between the 2016 and 2018 data was that more people were becoming financially included but not at the same pace as the population growth rate,”

Dayo Odulate-Ademola, Head of innovation at EFInA said. For this reason, EFInA believes the “80 percent financial inclusion target for this year is unlikely to be met.” To achieve a more inclusive financial inclusion at an affordable rate, industry experts have advised that Nigeria would need to leverage technology to give access to its excluded population. “To achieve the 80% inclusion target through the strategy, technology has to play a massive role,” Wole Adeniyi, executive director at personal & business banking, Stanbic IBTC Bank said. Adeniyi added that he sees “technology democratizing access in Nigeria’s financial inclusion space.”

Financial Inclusion, a sustainable pathway to empowering women Ijeoma Nwagwu & Ibukun Taiwo

ttaining the Sustainable Development Goals (SDGs) is one of the most ambitious projects on the planet. A project of immense scale and unfathomable impact, it is no surprise that several experts have doubted the possibility of ever attaining them. Why? For one, the SDGs are severely underfunded as the estimated budget is $USD 5-7 trillion, and so far, the grand rhetoric over the subject matter far outweighs the efforts made towards attaining them. And thus the need to find innovative ways to optimize resources in the pursuit of realizing the SDGs. As we celebrate the International Women’s Day as well as Women’s History Month, we want to share our conviction about the role financial inclusion plays in the achievement of at least, two of the SDGs that matter a lot to women – Gender Equality (SDG 5) and Poverty Eradication (SDG 1). We believe that deliberately solving financial inclusion for women will have a cascading impact on equality and poverty eradication. Benefits of financial inclusion Financial inclusion, the access to and use of financial products and services, when properly planned, implemented and managed, can enhance women empowerment in a number of impor-

tant ways. First, having access to financial services can enhance women’s ability to adequately plan and manage their financial lives. Melinda Gates, Co-Chair of the Bill & Melinda Gates Foundation, said, “When the government deposits social welfare payments or other subsidies directly into women’s digital bank accounts, the impact is amazing. Women gain decision-making power in their homes, and with more financial tools at their disposal, they invest in their families’ prosperity and help drive broad economic growth.” Second, it can grant women more financial autonomy over their lives. Autonomy is a critical lever in human empowerment and for women, it is even more pertinent as social norms and cultural dynamics limit women’s autonomy. For example, in some regions, women need a man’s permission to borrow or engage in a contract. Third, to a large extent, financial inclusion can reduce women’s vulnerability by providing an avenue for them to borrow to meet unexpected expenses, such as medical treatments and school fees. Dearth of appropriate financial services for women Most people agree on the importance of financial inclusion particularly for women and the potential impact it can have on the community/economy. However, access to financial services and products remains elusive for

women with about 1 billion women still financially excluded globally. In Nigeria, 20.5 million women live day to day without a bank account (EFinA, A2F 2018). As we reported in our 2019 State of the Market Report, the majority of these women are young women and widows. Among the plethora of reasons for this gap in financial inclusion, is the dearth of appropriate financial products created specifically for women in the Nigerian banking system. Many of these products offer limited value propositions to women and thus experience little to no adoption. While organizations from across a wide range of industries create products and services targeted along gender

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lines, the banking industry still lags behind in addressing specific financial needs of women. To better design financial products that will enhance women’s economic empowerment, banks and other financial service providers need a better understanding of: • the market demand. What barriers do women face in adopting financial services? Some usual suspects include illiteracy, lack of funds, time poverty etc. • the social and cultural context. For example, social customs that forbids women to do some jobs or limits their mobility. • the legal and institutional context. For example, the laws about the ownership of

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land by women or access to justice, or restrictive collateral requirements for loans. Other inhibitors to female financial access Millions of women around the world continue to battle the daunting realities of having limited or no rights, being sidelined or violently mistreated, and living in abject poverty. In some parts of the world, women have no right to property, they’re not equally educated and are often forced into early marriages and motherhood. In a survey to understand the relationship between giving women land rights and agricultural productivity in Southern Africa by the charity organization, ActionAid, it was discovered that while land rights were viewed as very important by women for many reasons, women usually did not have access to the landed property. Not only that but these women were also uneducated which was a huge barrier to adopting new technologies. Illiteracy and the consequences of illiteracy i.e. low self-esteem, a lack of confidence, etc. were factors preventing these women from receiving credit, further limiting their use of land. In short, it was a vicious cycle of poverty. Ensuring that women benefit from financial services require us to have in-depth understanding of the diverse inhibitors women face. Financial inclusion and women’s empowerment – the evidence @Businessdayng

It is important to note that financial access alone is not enough to empower women and ensure progress towards the Sustainable Development Goals. Financial products and services need to enhance access to other social necessities such as health, vocation and education in the interest of making holistic impact on the women within their families and communities. The provision of women’s financial inclusion products should therefore carefully consider the context in which women live and the levels of discrimination – at the institutional and community levels - they may face which limit their use of financial services. If financial institutions reevaluate and reconstruct their approach in communicating with women when launching new products, and also become deliberate in meeting the specific needs of such women, the growth opportunities will be phenomenal. As we celebrate the International Women’s Day, let us remember that empowering women is not just about social parity but it is a quest that has tangible benefits for us all, on a personal, communal and national level. The more women are empowered, the better our world will be at every level. Dr Ijeoma Nwagwu and Ibukun Taiwo are members of the Sustainable and Inclusive Digital Financial Services initiative of the Lagos Business School.

Wednesday 11 March 2020

BUSINESS DAY

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Wednesday 11 March 2020

BUSINESS DAY

news

Coronavirus: FG urged to restrict entry points for international airlines to Lagos, Abuja airports IFEOMA OKEKE

takeholders in the aviation sector have called on the Federal Government to restrict entry points for international airlines to Murtala Muhammed International Airport (MMIA), Lagos, and Nnamdi Azikiwe International Airport, Abuja, in a bid to curtail the spread of coronavirus. This call is coming after Nigerian confirmed its second case of coronavirus. John Ojikutu, aviation security consultant and secretary general of the Aviation Safety Round Table Initiative (ASRTI), told BusinessDay that his suggestion to the Federal Government was to limit the points of entry for foreign airlines to Lagos and Abuja to be able to effectively monitor foreign visitors and reduce pressure on our limited medical facilities to enable Nigeria concentrate on its infected nationals, if any. Ojikutu said running after visiting foreigners would not only diminish the country’s limited health facilities but stress its insufficient medical staff. “This idea of travel restrictions must begin with the airlines operators. If any airline brings an infected passenger that tested positive at the point

… as airlines cancel flights to Nigeria of entry, the directive should ensure that the passenger is refused entry and the airline must take the passenger along on its return journey. “In the past, cases of airlines carrying passengers that violated rules of entry at destinations attracted fines. The Nigeria Civil Aviation Authority (NCAA) should come out with these directives to airlines with sanctions on breaches,” he said. Olumide Ohunayo, aviation analyst, said it would be too hasty to put travel restrictions now since the second person tested positive was from the index passenger, therefore Nigeria just needs to continue mop-up of all those affiliated to the index passenger on the flight and when the index passenger moved from Lagos to the base. “We need to fortify our borders and restrict entry points for international flights to Abuja or Lagos pending when the coronavirus has been curtailed. What is more important is to reduce the multiple entries for airlines. “For the two entry points, the personnel should be well fortified and have all the equipment they need. We need to get more volunteers and more training should be given to them. My choice on these airports is based

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on the equipment and personnel stationed at the international entry points of these airports. Other countries are working to curtail it and countries like Germany and Italy who took this for granted are now paying the price,” Ohunayo said. Turkish Airlines on Tuesday announced that it had cancelled all its flights to Lagos, Abuja and Port Harcourt to avoid further spread of the coronavirus. The airline, who flew in the current index case to Nigeria in a statement, says the cancelation of flights to its three destinations in Nigeria is in view of the coronavirus situation all over the world. The statement says “the cancellations will start for flights originally scheduled to arrive Lagos on March 17, 23 and 29th, while flights for Abuja scheduled for March 13, 16th, 20th, 25th, 27th and April 1, 2020. “Flights for Port Harcourt will not operate on March 11th 13th 18th, 25th and 25th.” Cabo Verde Airlines has also suspended its flight operations to Washington from March 8 to May 31, 2020, due to significantly reduced customer demand prompted by global health concerns related to coronavirus or COVID-19.

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Wednesday 11 March 2020

BUSINESS DAY

news

FG recovers N3.7bn from NDDC directors, contractors - Buhari ....NDDC was a cesspool of corruption - Okowa Tony Ailemen, Abuja

resident Muhammadu Buhari on Tuesday, said law enforcement agencies had recovered over N3.7 billion as well as various assets worth billions of naira from contractors and former directors of the Niger Delta Development Commission (NDDC). This is as he revealed that government had also placed lien on assets worth over N76 billion, currently under investigations. The President disclosed this while inaugurating the NDDC Advisory Committee, comprising the nine governors of the Niger Delta region and the ministers of Niger Delta Affairs and Environment. Specifically, President Buhari said: ‘‘To date, the EFCC and other agencies of Government have recovered over N3.7 billion in cash as well as various assets worth billions of Naira from some contractors and former Directors of the Commission. ‘‘Furthermore, I am told that Government agencies have placed liens on over N6 billion of assets, which are being investigated.’’ The President told the committee that these abuses of the past clearly showed the need for strict and diligent oversight, going forward. He, therefore, charged them to discharge the new assignment diligently and effectively, working closely with the relevant ministries, adding that he looked forward to seeing positive changes in the affairs of the Commission as well as on the ground in the

Niger Delta region. President Buhari recalled that in 2016, his administration launched the “New Vision for the Niger Delta (NEVIND)”, aimed at bringing sustainable peace, security, infrastructure and human capital development to the region. He said the medium to achieve this noble objective was through the Ministry of Niger Delta Affairs, NDDC and the Presidential Amnesty Programme (PAP). The president, however, expressed regret that in the past these institutions were unable to deliver their mandates due to mismanagement. ‘‘As a result, the people of the Niger Delta were left with abandoned infrastructural projects and substandard social programmes which were designed to improve their living conditions. ‘‘It is to reverse this trend that I approved, in February 2020, the constitution of a 10Man Presidential Monitoring Committee (PMC) as provided for in Section 21 of the NDDC Establishment Act.’’ He noted that the PMC, to be chaired by the minister of Niger Delta Affairs and its members drawn from various MDAs, would focus on monitoring the operations and activities of the commission, and would be reporting to him. In the same vein, the president said the inauguration of the NDDC Advisory Committee was in line with the provisions of Section 11 (I) of the NDDC Establishment Act, explaining that the Committee is charged with the responsibility of advising the Board and monitoring its activities.

Why all finance, account officers in Lagos must be IPSAS certified - commissioner JOSHUA BASSEY

agos commissioner for finance, Rabiu Olowo, says the target by the government to ensure that all finance and account officers in the public service are International Public Sector Accounting Standards (IPSAS) certified is to properly position Lagos for fast-paced service delivery. Olowo stated this at the opening of a training session for 500 finance/account officers on IPSAS certification ongoing in Ikeja, the state capital. He said this had become even more compelling given that the Governor Babajide Sanwo-Olu administration prides itself in transparency, accountability

and prudent management of resources available to the state. According to Olowo, although the state government already boasts of over 500 IPSAS certified finance and account officers, there is the need to up the number by incorporating all officers managing the finances of the state across all ministries, departments and agencies (MDAs). “We want to simplify the process of preparing our financial statements, we want the new officers being trained to be able to support the State Treasury Office (STO) in the preparation of financial statement and be very critical of financial figures by doing the needful before forwarding their reports to the STO, thereby reducing the time that would

be spent in perfecting such financial reports,” he said. The commissioner explained that the determination of the government to make its officers compliant with the 21st Century ways and methods of accounting in line with international standard necessitated the training, which will prepare the participants to write the certification examination of becoming IPSAS certified. The commissioner attributed the impressive financial ratings of the state financial management by both local and international rating agencies to the professionalism and competence of the professionals handling the financial statements of the state, stressing that it was important for the government to sustain and

possibly surpass the status quo. Abiodun Muritala, the state accountant-general and permanent secretary, State Treasury Office, expressed the view that if the additional 500 officers being trained qualify as IPSAS certified, the state government, by implication, would boast of more competent hands and core professionals to handle management of its finances. “The state governor has lent his support to this training. He believes in IPSAS training and this he has shown by approving that all the finance and accounts officers be trained to migrate from the initial cash basis system of accounting because of some limitations inherent in the process,” said Muritala.

L-R: Mohammed Abdullahi, minister of state for science and technology; Niyi Adebayo, minister of industry, trade, and investment; Abimbola Ogunnusi, representing director-general, Raw Material Research and Development Council, and Mansur Ahmed, president, Manufactures Association of Nigeria (MAN), during the opening ceremony of Nigeria Manufacturing and Equipment expo 2020 in Lagos, yesterday. Pic by Olawale Amoo

ECOWAS urged to adopt microeconomic MDXi’s Azure platform enables JMG, NYCOP backs Jamoh’s appointment as policies for Eco take-off others with critical applications hosting NIMASA DG end of each year for at least Innocent Odoh, Abuja

resident Mahamadou Issoufou of Niger Republic has called on the Fifth Legislature of the ECOWAS Parliament to encourage their various state governments to adopt microeconomic policies that would lead to the attainment of convergence criteria for the take-off of the Eco currency for the region. Speaking at the inauguration of the Fifth Parliament in Niamey, the Nigerien capital, on Monday, President Issoufou described the adoption of a single currency as a major project of the community. The West African Monetary institution had spelt out 10 convergence criteria to be met by each member state for the implementation of a single currency tagged Eco, which was finally agreed by the Heads of States and Governments of the regional body to be introduced by the year 2020. Some of the primary criteria for each member state to achieve include achieving a single digit inflation rate at the

three years, a fiscal deficit of no more than 4 percent of the GDP, a central bank deficit financing of not more than 10 percent of the previous year’s tax revenues, gross external reserves that can give import cover for a minimum of three months. Issoufou said his country had achieved all the criteria and ready for the launch of the currency this year. “Our people want this single currency because it helps their interest in particular to support the growth of the economy of our state, supporting inter ECOWAS commerce and trade that will grow the promotion of roads, infrastructure, railways, power and so many other projects that will make it possible for our region to contribute to the 2053 agenda, and especially the continental free trade area,” he said. He stressed that both the national and ECOWAS parliaments had a role to play in the realisation of the projects that would transform not only ECOWAS region but also the continent as a whole.

ollowing the launch of its Microsoft Azure Stack service, MDXi, MainOne’s data centre subsidiary, becomes the first service provider in Nigeria to deliver Azure consistent services from an in-country data centre. MDXi’s Stack platform, provided in partnership with Microsoft and HPE operated by Selectium, will enable companies currently seeking Azure Cloud services obtain the same worldclass services closer to home, significantly reducing customerfacing latency. The MDXi Azure Stack offers an enterprise-grade hosting solution that complies with local regulatory standards, enabling more businesses in Nigeria simplify their IT implementation and reap the benefits associated with Cloud operating models. These solutions apply across all sectors ranging from E-Commerce solutions where local hosting enable transactions in a few milliseconds, to crystal clear voice call centre applications, among others. The Cloud services enable businesses build modern applications across hybrid envi-

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ronments; allowing them to migrate critical applications from legacy technology to modernised and more efficient technology without having to go offshore. MDXi has provided Cloud and value-added services, including Cloud hosting solutions, disaster recovery and managed services, to various clients in large Enterprises and SMEs, over the past five years with best in-class uptime performance. In 2018, during the Presidential Enabling Business Environment Council (PEBEC) Impact Awards programme, the company won an award for its contribution to improving Nigeria’s rank in the “Ease of Doing Business” index through its hosting of critical applications for the CAC’s business registration website. MDXi’s dedication to best practices and world-class delivery has been critical for the organisation’s capacity to provide quality services in the deployment, operations and management of critical ICT infrastructure including Cloud solutions, services and network management facilities for clients across West Africa.

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ational Youth Council of Ogoni People (NYCOP) has expressed its support to the appointment of Bashir Jamoh, as the new director-general of the Nigerian Maritime Administration and Safety Agency (NIMASA). NYCOP in a letter signed by eight of its members, including the president, Young Nkpa, and the secretary, Celestine Nkiri, said it welcome the news of Jamoh’s appointment as NIMASA DG “with renewed enthusiasm.” According to the letter, “We are particularly excited that given his established track record at NIMASA as a highly-experienced and well-groomed maritime expert with passion for maritime security, Dr. Jamoh’s appointment represents for Ogoni people and indeed the entire Niger Delta, the opportunity for renewed sustainable economic development and environmental sustainability, together with the restoration of peaceful and beneficial development of the natural resources of which Ogoniland is endowed.” The incoming NIMASA boss, who has a PhD from the University of Port Harcourt, specialising in logistics and transport management, is also the current @Businessdayng

president of the Chartered Institute of Transport Administration of Nigeria (CIoTA). He holds membership and fellowship attainments in several prestigious national and international professional bodies The 56-year-old maritime expert joined NIMASA in 2003 as assistant chief commercial officer in charge of Eastern and Central Zones. Jamoh, who hails from Kaduna State, also holds a Master’s degree in Management from Korea Maritime and Ocean University. He also attended Bayero University, Kano 1993; Institute of Administration, 1986 Ahmadu Bello University, Zaria; and Kaduna Teacher’s College, Kaduna 1983, where he obtained Post Graduate Diploma in Management, Diploma in Accounting, and GII Teacher’s Certificate, respectively. This seasoned administrator and maritime expert has also attended several leadership and management courses at the Harvard University US, Oxford University UK; Cambridge University UK; International Training Centre of ILO Turin Italy; and Institute of Public Private Partnership Washington DC.

Wednesday 11 March 2020

BUSINESS DAY

news

Emirates celebrates women film Private sector urged to adapt Fourth Industrial Revolution to achieve growth directors at International Women’s Day Gbemi Faminu said. cession, we have attained a the age of the AfCFTA.” BUNMI BAILEY

mirates, the world’s fourth largest airline by scheduled revenue passengerkilometres flown, says it is celebrating female-film directors in the movie industry as part of events marking the 2020 International Women’s Day. The female film directors are featured as a way to celebrate the female gender for their outstanding achievements in the industry. One of the movies being featured on ‘ice’ at this year’s commemoration of Women’s Day is ‘New Money’, a Nollywood movie. It is a 2018 Nigerian film directed by Tope Oshin

with production by Inkblot Productions and FilmOne. It is a human-angled story filled with range of emotions which will be featured on all Emirates flights on March 8. Similar to what the world stands for at this year’s International Women’s Day, Emirates Airline will consistently adopt an inclusive approach and gender appreciation in its staffing outlook. Its female personnel therefore feel a strong sense of belonging. As a gender-friendly iconic brand, Emirates gives endless opportunity to its entire staff, including women. For example, at Emirates you can find female pilots in a previously male dominated space.

PenCom issues new corporate governance code for Pension Fund Operators Modestus Anaesoronye

ension regulator, the National Pension Commission (Nigeria) has issued a new corporate governance code for Pension Fund Operators (PFOs). As contained in a circular issued on Tuesday and signed by Ehimeme Ehioma, head, Surveillance Department of the Commission, this will assist the PFOs meet their governance responsibilities and drive greater corporate accountability. The circular stated that following the issuance of Nigerian Code of Corporate Governance 2018 by the Financial Reporting Council (FRC) of Nigeria, the National Pension Commission has developed industry specific draft Corporate Governance Guidelines for PFOs. It states that the Circular aims at encouraging PFOs to embrace good corporate governance practices and high

professional ethics in their organisations. Besides that, it says the circular is to provide measures that would strengthen corporate governance practice as well as assist PFOs in meeting their governance responsibilities and ensuring greater accountability. The Financial Reporting Council of Nigeria had in 2018, developed and issued the Nigerian Code of Corporate Governance (The Code). The code became effective from January 2, 2020, and each sector regulator/supervisor was expected to issue the industry specific guidelines. The Corporate Governance Circular for PFOs is a set of principles based on best practices, intended to guide Pension Fund Administrators (PFAs), Closed Pension Fund Administrators (CPFAs) and Pension Fund Custodians (PFCs), on the structures and processes for achieving optimal governance practices.

FG convenes over 75 public/private sector players over economy MICHAEL ANI

he crash in global oil prices may have finally woken Nigeria from its slumber to seek the needed reforms that would bolster revenue and drive growth in an economy expanding below population. The Nigerian government has summoned business leaders, economic thinkers, policy analysts and technocrats from all walks of life to make recommendations that are long overdue for Africa’s largest economy. The gathering, tagged ‘Going for Growth 2.0: A Consultative Reoundtable with the CBN Governor’, may have been a reaction to the slow economic growth which analysts say is weak to create the needed jobs and lift the over 90 million Nigerians living below the poverty line. From the financial services sector to industrial and consumer goods, and down to the power sector, there is virtually no one who wields economic power in the country

that has not been called upon to brainstorm and present the way forward to President Muhammadu Buhari, who has over time turned a deaf ear to recommendations seeking reforms. The sudden willingness of the Buhari government to listen to reforms from especially the private sector comes after the country has once again been caught in the web of both a demand and supply shock which is threatening the financial health of the government and could bring economic activities to a halt. “It is too little too late that it is coming when things have already fallen apart. Calling them now, I do not see how much of a difference that would make,” said Cheta Nwanze, lead partner at SBM Intelligence. “However, the fact that President Buhari is calling them is positive in the sense that he recognises that something is fundamentally wrong and he is trying to fix it with the right people,” Nwanze said in a phone response to BusinessDay. www.businessday.ng

he Federal Government has urged the private sector, especially manufacturers, to adapt to the Fourth Industrial Revolution and incorporate its elements in order to achieve improved growth and economic development. Speaking at the fifth edition of the Nigeria Manufacturing and Equipment Expo 2020, organised by the Manufacturers Association of Nigeria (MAN), Yemi Osinbajo, Nigeria’s vice president, said the country’s economy was at a crucial point after its recovery from the 2016 recession, and in its recovery process, it was necessary to become familiar and incorporate elements of the Fourth Industrial Revolution. “After emerging from a re-

reasonable measure of macroeconomic stability with positive growth for more than 2 years. We stand on the brink of the Fourth Industrial Revolution, a technological revolution that will fundamentally alter the way we live, work and relate with one another,” he said. Speaking on the Africa Continental Free Trade Area (AfCFTA), the vice president, represented by Niyi Adebayo, minister industry, trade and investment, said, “Imminent is the emergence of the AfCFTA, an agreement that would change the way the positioning of the Nigerian market and the way trade is carried out in Africa. “The manufacturing sector is at the centre of our strategy for attaining sustainable growth and must prepare itself for the Fourth Industrial Revolution coming in

Although the country is preparing to fully benefit from the agreement, challenges still abound, however, solutions are not far-fetched, he said. “Nigeria is gearing up to take advantage of these changes but the challenges that remain are significant. We continue to face the challenge of meeting domestic food requirements, providing raw materials for the manufacturing sector, and exporting at quantity and quality levels required for successful market participation. “We know what must be done and we are agreed on what must be done. We must create good jobs and economic opportunities, we must rapidly industrialise and build infrastructure gaps and provide the environment for businesses, small and large to thrive,” he

In his welcome address, Mannsur Ahmed, president, MAN, said the theme of the expo, ‘The Fourth Industrial Revolution and the Nigerian Manufacturing sector,’ was informed by the observed global trends and current development experienced in some developing nations, which had used industrialisation as a growth tool to drive and transform their economy as well as improve their standards of living. “The emergence of new technology, changing markets and the upcoming African free trade market call for stakeholders collaboration to anticipate and response appropriately to the evolving manufacturing ecosystem, which is been ushered in the rapid adoption of these new and innovative technology.

L-R: Ladi Balogun, group chief executive, FCMB Group plc; Jide Balogun, CEO, Primrose Development Company Limited; Olasubomi Balogun, celebrant/founder, FCMB Group, his wife Abimbola Balogun; Bolaji Balogun, chairman, Lafarge Africa plc, and Gboyega Balogun, director, CSL Stockbrokers and FCMB Trustees, during the 86th birthday celebration of Olasubomi Balogun in Lagos.

Forbes ranks Access Bank top Nigerian firm in CSR performance

ccess Bank plc has been ranked the overall best company in corporate social responsibility (CSR) and sustainability in Nigeria for the year 2019, as published in Forbes Africa. The ranking was based on a result drawn from impact assessments of 910 organisations operating in Nigeria over the last 13 years. According to the report, the ranking took into cognizance the bank’s participation in impactful national projects, its recognitions and ratings from international award bodies, investment in CSR and sustainability in the period under review. Reacting to the ranking, Omobolanle Victor-Laniyan, head, sustainability, Access Bank, said, “Access Bank has a corporate strategy and philosophy which places sustainability at its core. We ensure that our projects and initiatives are impactful and strategically linked with the United Nations Sustainable Development Goals. “Over the years we have recorded outstanding results by undertaking several initia-

tives across the country, and we are deeply honoured to be recognized as the overall best company in CSR and Sustainability.” Having launched the Nigerian Green Bond Market Development Programme in June 2018, the bank’s determination to promote sustainable growth through funding of projects at a lower cost of capital led to the issuance of a N15 billion (441m) corporate green bond in 2019. The issue is the firstever Climate Bonds Initiative certified corporate green bond in Africa. Additionally, it is worthy of note that the bank dedicates a minimum of 1 percent of its profit-before-tax to sustainability. The bank also championed the Malaria-to-Zero initiative, co-created the first disability inclusion hub in Nigeria, initiated and led the development of the Nigerian Sustainable Banking Principles and has brought about socioeconomic benefits to host communities across Nigeria through its employee volunteering scheme.

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Reform: Edo Poly gets weather station from NiMET, sets for programme in meteorology, climate change

n the back of Governor Godwin Obaseki’s tertiary education reforms in the state, the Edo State Polytechnic, Usen, has completed the installation of a meteorology weather station at the school premises donated by the Nigeria Meteorology Agency (NiMET) to strengthen teaching and research in environmental sciences and climate change. The institution is also concluding plans to commence a Diploma programme in meteorology and climate change. Rector of the institution, Abiodun Falodun, who said this in an interview with journalists, noted that the institution was pursuing an aggressive development programme that would see it compete with its peers globally. According to Falodun, “We have a mutually beneficial relationship with NiMET, which led to their donation of the meteorology weather station to the Polytechnic. This is part of our strategy to deepen industry-academia relations to ensure that we are at the @Businessdayng

fore-front of development in the industry. We have just installed the weather station and we hope to extend the relationship to other areas such as their participation in the running of the diploma programme in meteorology and climate change, which will soon commence. “We are strengthening units and departments in the institution to be able to respond to the needs of the society. We have the Centre of Geospatial Information Science (CGIS) to attend to uses of geospatial science. With the weather station, we are setting a target to become a centre of excellence in weather and environmental science. This is intended to ensure that our students get the best of education in this discipline and that they also get hands-on experience in these areas.” Falodun added that the institution was pursuing other measures to attract local and international academics to provide bespoke education to students and create the right atmosphere for multidisciplinary research.

Wednesday 11 March 2020

BUSINESS DAY

news Shell-Ejama community dispute: First Bank sets record straight HOPE MOSES-ASHIKE

irstBankhasresponded to reports of the garnishee order made absolute by a court seeking to attach the funds of First Bank at the Central Bank of Nigeria (CBN). First Bank’s involvement in the matter only arose from the litigation guarantee in the sum of N17.2 billion plus interest it issued at Shell’s request as a condition for the stay of execution of a ruling in a lawsuit between Shell Petroleum Development Company Limited (Shell) and the Ejama Ebubu Community which is still subject to two separate and subsisting appeals before the Supreme Court of Nigeria. “While FirstBank will not go into the details of the matter as same remains subjudice, it is important to state that the said ruling was made without regard to the said appeals before the Supreme Court. It is also

necessary to put it on record that the sum of N182.7billion remains strange to us as we are not aware of any such judgment sum by any court of law capable of being enforced by a garnishee proceeding,” First Bank said in a statement. With specific reference to the reported recent ruling of the Federal High Court sitting in Abuja, First Bank and all the other necessary parties to the garnishee order proceedings have filed their respective appeals against the ruling. The appropriate applications to restrain parties from overreaching and undermining the outcome of the appeals are also in place already. “As a responsible corporate citizen, FirstBank has always conducted its business operations in strict compliance with all extant rules and regulations whilst meeting its obligations as and when due,” the statement said.

Jobless data remain unknown as NBS extends release date amid ‘budget issues’ …labour force report last published for Q3’18 ENDURANCE OKAFOR

igeria’s labour force statistics, the report that shows the quarterly data of the country’s employment and unemployment rates, has not been published for almost two years. Going by the calendar on NBS website, the statefunded bureau was due to publish the 2019 labour forces statistics on Tuesday but was unable to deliver the report due to lack of funds, a source from the agency told BusinesssDay on the condition of anonymity. No new date has been announced. “Funds haven’t been allocated to NBS or any other

agency,” an NBS top executive said. The latest available data on Nigeria’s unemployment rate is for the third quarter of 2018. The statistics office has failed to publish the data at least three times since then, as compiled from its calendar. While the agency says it has been handicapped by funds, it has been able to release other reports on its website. “Not every report we publish requires funds or a lot of funds so some can be easily published, unlike the unemployment data that involve surveys and fieldwork,” the NBS source said. According to the most recent unemployment data by NBS, Nigeria’s jobless

rate was at a record-high of 23.1 percent in Q3 2018. The country’s unemployment rate embarked on an upward spiral in 2015 after a decline to 6.4 percent a year earlier. Labour force statistics is considered by economists as an important economic and social indicator used in the analysis, evaluation, and monitoring of the economy, the labour market, and a wide range of government policies. Ayorinde Akinloye, an analyst at Lagos-based CSL Stockbrokers, said labour force statistics is one of the most important indicators for an economy as it explains how well hiring and job creation are following

an economic downturn or upturn. “Also, it gives a gauge of how strong the average consumer is. Not having this data limits such insight on economic activities as well as consumer strength,” Akinloye said. Since 2017 when oil-dependent Nigeria emerged from its economic recession, not only has the country’s economic growth been sluggish but only a few sectors triggered the expansion, further undermining the country’s capacity to create enough jobs to meet the growing number of labour market entrants. Out of about 4.8 million Continues on page 39

Go underweight Nigerian banks, EFG Hermes tells investors … as stocks plunge

HOPE MOSES-ASHIKE

igerian banking stocks plunged yesterday, a day after the all-out price war between Russia and Saudi Arabia sent global oil prices tumbling. Consequently, bankinggiant shares such as Zenith Bank, Guaranty, FBNH, UBA and STANBIC nosedived by 9.69 percent, 9.93 percent, 9.28 percent,9.60percentand10percent, respectively, on Tuesday. Given macro-economic disruptions, EFG Hermes, an Egyptian investment bank, is suggesting that investors reduce their weighting of Nigerian banks. “We would be comfortable recommending holding GTB at current valuations given its long USD position, higher-than-sector average Net Interest Margin (NIMs), strong Capital Adequacy Ratio (CAR), and higher quality asset book,” a report by Simon Kitchen, head of macro-strategy at EFG Hermes Research, Mohamad Al Hajj; vice president - head of MENA strategy, EFG Hermes Research, and Mohamed Abu Basha, director - head of macroeconomic analysis, EFG Hermes, said. Nigeria is probably the most vulnerable from a macroeconomic standpoint as the decline in oil price combined with potentially lower exports (of oil) could potentially tip the country back into recession. Weaker GDP growth could make it more difficult for Ni-

gerian banks to meet their Loan to Deposit Ratio (LDR) targets resulting in greater cash reserve ratio (CRR) deposit requirements, which would be a negative for net interest margins (NIMs), the firm stated. Nigeria’s Gross Domestic Product (GDP) expanded by 2.55 percent in fourth (Q4) 2019 from 1.91 percent growth in 2018. The Central Bank of Nigeria (CBN) in October 2019 raised the Loan to Deposit Ratio of banks to 65 per cent, after the September 30 deadline given to the banks to meet its 60 per cent directive. However, the regulator has extended the deadline of the 65 percent LDR to March 31, 2020. However, “as we have consistently seen since 2016, the CBN is likely to provide asset quality forbearance and thus the cost of risk could remain under control”,the analysts said. On the positive side, the firm said devaluation could even be positive for Nigerian banks as most of them are long USD. In the report, the firm thinks Nigerian names will be more under pressure vs East Africa or Morocco. This is simply due to the fact that there are more negative variables in Nigeria vs other economies. “We would expect Dangote Cement to be under intense pressure (margin erosion to sustain) if the economic impact was large. In Nigeria, we think Lafarge Africa will ride it out better as its financials are recovering from a low base,” it said. www.businessday.ng

Seyi Makinde (sitting), governor, Oyo State; signing AMOTEKUN bill into law, flanked from left by Abiodun Fadeyi, deputy speaker, Oyo State House of Assembly; Oyewole Oyewo, attorney general and commissioner for justice; Rauf Olaniyan, deputy governor; Debo Ogundoyin, speaker, Oyo House of Assembly, and Olubamiwo Adeosun, secretary to the state government, at Governor’s Office Secretariat, Ibadan.

Buhari writes NASS, seeks amendment to Finance Act … wants new law effective Feb. 1, animal feeds exempted from 7.5% VAT JAMES KWEN & SOLOMON AYADO, Abuja

resident Muhammadu Buhari is seeking inclusion of animal feeds in the list of basic food items that are exempted from the new 7.5 percent Value Added Tax (VAT) through amendment of the Finance Act. In separate letters to the Senate and the House of Representatives titled ‘Transmission of the Finance Act, 2019 (Amendment) Bill for consideration and passage into law’, President Buhari asked that the

Act be amended to indicate that the new law took effect from February 1, 2020. The amendment sought by President Buhari is also seeking to accommodate aspects of the tax holiday incentive for agriculture, by targeting the incentive to small and medium sized companies that invest in primary crop, livestock and forestry. Buhari said the favourable consideration and passage of the amended law would provide support to the implementation of the 2020 federal budget. In the letter to the Senate read by Senate President Ahmad Lawan, and

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the letter to the House of Representatives read by Speaker Femi Gbajabiamila at plenary on Tuesday, Buhari said pursuant to Sections 58 and 59 of Constitution of the Federal Republic of Nigeria 1999 (as amended), he was formally requesting that the Finance Act, 2019 (Amendment) Bill, be considered for passage into law. “ This Bill s eeks to amend the Finance Act, 2019, as recently passed by the National Assembly, by clarifying that the administrative effective date for the increase in Value Added Tax from 5 percent @Businessdayng

to 7.5 percent is the 1st of February 2020; “That animal feeds are included in the list of basic food items that are exempted from Value Added Tax; and aspects of the tax holiday incentive for agriculture, by targeting this incentive to small and medium sized companies that invest in primary crop, livestock, forestry and fishing agricultural production. “This incentive is also to be administered by Nigerian Investment Promotion Commission pursuant to the Industrial Development (Income Tax Reliet) Act,” the letter said.

Wednesday 11 March 2020

BUSINESS DAY

news

Facebook celebrates female achievers across SSA following International Women’s Day … as 23% of businesses on Facebook are led by women businesses, create jobs and Jumoke Akiyode-Lawanson livelihoods, reach customers they could never have reached s part of ongoing cel- before and create change. In ebration of International Africa, 23 percent of the busiWomen’s Day, and under ness leaders surveyed through the banner of this year’s theme Facebook are women, starting #EachforEqual, Facebook hon- their businesses for a variety ours women from across Af- of reasons, including flexible rica who have been using their working conditions (4%), to voices to bring people together, pursue a passion or dream build and make significant (33%) or wanting to be their impact in their communities, own boss (29%). while inspiring other women by Below are some of the womchanging the African narrative. en from across the continent Nunu Ntshingila, regional that are using Facebook’s platdirector, Africa, Facebook Inc, forms to create movements for said: “Every day, all around the social change, build successful globe, and specifically here in businesses and inspire others: Africa, we see women on our Technology developers: Peplatform supporting one anoth- culiar Ediomo-Abasi (Nigeria): er through events and fundrais- A leading woman in tech who ers, connecting through groups, was part of a hackathon team growing communities and that developed a blockchain building livelihoods through solution to address violence their small businesses. against women. “The narrative of the African · Gertrude Nyenyeshi (Kewoman is one of strength, deter- nya): A gaming enthusiast, mination and creativity. We’re web and mobile designer who proud to continue to support builds digital skills with her local and celebrate all women who developer community continue to achieve so much · Edidiong Asikpo (Nigeria): by utilising the power of their A software engineer, developer voices through Facebook, Ins- and leader of Facebook’s Detagram and WhatsApp.” veloper Circle in Uyo. She is Platforms like Facebook also part of SheCodeAfrica and continue to be an important Women Will community circles tool for women business lead- that inspire other women to ers worldwide. They establish start careers in technology.

Senate okays Corporate, Allied Matters Amendment Bill to boost investment ... moves to review NAMA operations Solomon Ayado, Abuja

igerian Senate on Tuesday okayed the Corporate and Allied Matters Act Amendment Bill, 2020, to foster ease of doing business and boost investment in the country. The bill is sponsored by the Senate leader, Yahaya Abdullahi (APC – Kebbi North). The passage by the Senate followed consideration of the bill. Senate said the amendment of the law became imperative because it had not been significantly amended in the last 28 years since when it was enacted in Nigeria as a decree of the military government in 1990. The amended bill, when finally signed into law by the President, “the business landscape in Nigeria will be reorganized and liberated hitherto from the heavy constraints of several provisions in the Companies and Allied Matters Act 1990, responsible for obstructing modern business practices in the light of national and global business reforms.” Also, the Bill “seeks to provide an efficient means of regulating businesses, minimize the compliance burden of

small and medium enterprises (SMEs), enhance transparency and shareholder engagement, and promote a friendly business climate in Nigeria.” It will further address the seeming stagnancy and primitive methods of doing business in Nigeria, essentially to meet up with the present international best practice as well as promote ease of doing business. “The introduction of model netting provisions in the Bill as a means of mitigating credit risks, according to Abdullahi, would promote financial stability and investor confidence in the Nigerian Financial Sector, and increase investor confidence in the Nigerian Financial Sector as well as all sectors of the economy. “Similarly, economic impact of the provisions of the Bill would ensure more business-friendly regulation for Micro, Small and Medium Enterprises (MSMEs). “The amendment to CAMA is also expected to have the potential to increase activities of MSMEs, with the overall effect of growing the Nigerian economy in the process, providing more jobs and guaranteeing economic stability,” according to the bill.

Reps summon Nigige, Adamu, Ogunyemi over ASUU strike James Kwen, Abuja

ouse of Representatives has summoned the minister of labour and productivity, Chris Ngige, minister of education, Adamu Adamu, and president of the Academic and Staff Union of Universities (ASUU), Biodun Ogunyemi, over the ongoing industrial action by the university lecturers. The ministers and ASUU president are to appear before the House to to discuss issues relating to the recurring strikes in Nigerian universities and find solutions that would end the ongoing labour dispute. The House took the decisions on Tuesday during plenary when it unanimously adopted a motion of urgent public importance on the Academic Staff Union of University (ASUU) strike’, moved by Dachung Bagos (PDP, Plateau). Presenting the motion, Bagos said some schools had just resumed for academic exercise and if the strike was allowed to take full effect, it would cost a lot of students extra academic years. He noted that the continued strike had encouraged

education tourism of Nigerians to other countries, and expressed concerns that the yearly strike by ASUU was becoming a national embarrassment. Other lawmakers, while contributing in support of the motion, wondered why it had taken the Federal Government and ASUU so long to come to an agreement. Supporting the motion, Adewunmi Onanuga said there was need to find out what ASUU was really seeking and why it was difficult to meet, and urged the House to support ASUU and ensure that their demands were met. On his part, Tajudeen Yusuf said there should be parliamentary intervention because there was an issue of trust in the ongoing crisis, saying: “What is agreed by men of honour should be honoured. Both parties keep coming back every six months, what kind of wickedness is that. “This agreement should be a public document that will hold people accountable. A country that genuinely desires to have good education should not be having this kind of crisis. It is becoming a pain in the ears as it is recurring yearly”.

Boko Haram: FG, LCBC strategise to promote business, investment in liberated areas Innocent Odoh, Abuja

he Federal Government, the Lake Chad Basin Commission (LCBC), the United Nations, the African Union and other stakeholders have mapped out strategies to promote business and attract investment within areas of the Lake Chad Basin said to have been liberated from the Boko Haram insurgents. Indications to this development emerged on Monday when a delegation of the LCBC, led by its executive secretary, Maman Nuhu, presented the Regional Stabilisation Strategy (RSS) document to the minis-

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I, formerly known and addressed as Adeniyi Opeyemi Blessing , now wish to be known and addressed as Adeniyi Opeyemi Aderonke. All former documents remain valid. General public please take note.

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I, formerly known and addressed as Tanmola Imobekhai now wish to be known and addressed as Tanmola Ejoor. All former documents remain valid. General public please take note.

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I, formerly known and addressed as Mrs. Rasaq Mulikat, now wish to be known and addressed as Miss. Adepegba Mulikat Abisoye. All former documents remain valid. General public please take note.

ter of foreign affairs, Geoffrey Onyeama, which gives the template for a comprehensive political, educational and economic rejuvenation of the region as well as create a conducive environment for business and investment in the region ravaged by the insurgents. The delegation of the Lake Chad Basin Commission is undertaking a sensitisation campaign on the framework of RSS for the Lake Chad Basin region on nine pillars initiated to also improve skill acquisition, increase advocacy, fight against extremist ideas, reduce poverty, enhance women and youth empowerment, among others. Onyeama in his remarks states that the humanitarian and military security challenge of the Lake Chad region is something that impacts very severely and harshly on the four Lake Chad Basin countries – Nigeria, Niger Republic, Chad Republic, and Cameroon.

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I, formerly known and addressed as Omowunmi Apinke Onimole now wish to be known and addressed as Omowunmi Apinke Martins. All former documents remain valid. General public please take note.

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I, formerly known and addressed as Miss Iriri-Oyibo, Helen Ovighoronyevwo, now wish to be known and addressed as Mrs Torty, Helen Ovighoronyevwo. All former documents remain valid. General public please take note.

L-R: Abiodun Osoba, founder/CEO, The Agile Advisor Africa/chairman, Agile Practitioners Association of Nigeria; Tunde Giwa, head, Enterprise Agile Transformation, The Agile Advisor Africa/director, Agile Practitioners Association of Nigeria, and Itohan Iyalla, lead product consultant, Renmoney/Agile Practitioner, during a press conference on the 2020 Annual Agile Nigeria Conference in Lagos.

Oil war: Russia might be back on negotiating table with Saudi Arabia DIPO OLADEHINDE

here are strong indications that Russia might be back on the negotiating table with Saudi Arabia as oil price jumped by around 10 percent on Tuesday, a day after the biggest rout in nearly 30 years. Speaking to reporters Tuesday, Russia’s Energy Minister Alexander Novak said that Moscow had not ruled out measures with Organisation of Petroleum Exporting Countries (OPEC) to stabilise oil markets, according to Interfax news agency. “The arrangement was unpopular with key members of the Russian elite notably Rosneft’s Igor Sechin and the economic damage caused by the COVID-19 outbreak provided a handy pre-

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text for abandoning the deal,” Daragh McDowell, head of Europe and principal Russia analyst at Verisk Maplecroft, told CNBC via email. Russia’s energy ministry has proposed to hold a meeting with Russian oil companies on Wednesday, Reuters reported, citing two unnamed sources. But in response, Saudi Arabia’s energy minister told Reuters he did not see a need to hold an OPEC+ meeting in May-June if there was no agreement on what measures should be taken to deal with the impact of the coronavirus on oil demand and prices. “I fail to see the wisdom for holding meetings in May-June that would only demonstrate our failure in attending to what we should have done in a crisis

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like this and taking the necessary measures,” Prince Abdulaziz bin Salman said. Brent crude futures were down by as much as 31 percent to $31.02 on Monday, their lowest since mid-February 2016. At that low, prices were down nearly $20 a barrel from a high before the meeting of OPEC and its allies on March 6. This means that in total, and based on their average February production, OPEC members lost more than $500 million in revenue, according to Reuters calculations. The losses are a lot more pronounced when compared with the high of $71.75 a barrel that Brent hit in January. A Rystad Energy impact analysis shows that the United States @Businessdayng

Drilled but Uncompleted Wells (DUCs) will be the first assets to be threatened by the newly formed low price environment, as their breakeven costs are now only dollars away from market prices. “Around 80 percent of shale DUCs currently have break-even oil prices below $25 West Texas Intermediate ($30 Brent),” Rystad Energy’s data show. As the market searches for a floor, Rystad Energy believes prices will experience extreme levels of volatility in the coming days and will have to go even lower than the current $35 Brent, as the potential 2 million barrels per day (bpd) surplus in the market in the second quarter of 2020 may grow even larger depending on the production response from OPEC and Russia.

Wednesday 11 March 2020

BUSINESS DAY

news

Atedo Peterside says Sanusi’s removal... Continued from page 1

ment and because he saw

L-R: Julius Berger Abumet, GM, Tamas Hovarth, explains a point to Niyi Adebayo, minister of Industry, Trade and Investment, as Ita Enang and Belinda Disu, director, Julius Berger, listen at the Evonig Glass Production Plant commissioning in Abuja.

Nigerians buy dollars to hedge uncertainty... Continued from page 1

The plunge in oil prices and falling reserves could curb the central bank’s ability to support the currency. Nigeria has been here before, when it devalued the naira by some 40 percent after oil prices bottomed in 2016. The currency also fell marginally to N366.75 per dollar from N366.71 a day before at the Investors and Exporters window. “There’s a huge demand for dollars at this time as investors sell-off Nigerian equities and try to hedge against a currency devaluation,” a fund manager who did not want to be named said. “The CBN doesn’t have the external buffers to fight an oil-induced global financial crisis and that raises all sorts of questions over the stability of the naira,” the person said. The CBN’s reserves have decreased by 20 percent in the past two years to the lowest since November 2017 at $36 billion, and may soon reach the $30 billion threshold set by Governor Godwin Emefiele for the country to consider a devaluation. Emefiele told investors late last year that it would take reserves of $30 billion and oil prices at $45 to re-consider its foreign exchange (FX) policy.

Fitch said Tuesday that the collapse in global oil prices, if sustained, could affect the sovereign rating of Nigeria and other countries who are net exporters of oil, particularly those with fixed exchange rates. “With oil prices likely to stay low for some time, countries that are in a somewhat vulnerable external position and have a fixed exchange rate are of course particularly vulnerable,” Jan Friederic, Middle East and Africa sovereign analyst told Reuters. F i t c h , S & P ’s a n d Moody’s have all downgraded Nigeria this year citing low oil prices. Rising fears over a possible devaluation, despite modest gains in the oil price Tuesday, is also hurting Nigerian stocks which recorded their biggest selloff in 10 years on the day. The Nigerian Stock Exchange All Share Index slumped 4.9 percent by the close in Lagos, the sharpest decline since March 2010, and falling for a third day to a four-year low. Bank stocks, the most liquid sector on the exchange, saw the worst of the sell-off, tumbling 13 percent, the most since 2012 and stretching their losses over the past three days to 23 percent. Nigeria’s second-biggest stock by market capi-

Jobless data remain unknown as NBS... Continued from page 37

Nigerians who entered the country’s labour market between 2015 and 2018, about 635,000 jobs were created within the period, indicating only a job was available for every 8 people who joined Nigeria’s economically active workforce. While there seems to be no end in sight for the country’s soaring jobless

rate, the challenge could be resolved through private sector expansion and industrial growth, according to the research arm of the Nigerian Economic Summit Group (NESG). For Nigeria to keep its unemployment rate stable at record-high 23 percent, the country would need to create at least 3.3 million jobs every year to avoid exacerbating joblessness and www.businessday.ng

talisation, MTNN closed at the lowest price since its listing in May 2019, to join in Tuesday’s rout. More than half-a-trillion naira was wiped from the stock market on Tuesday. “The market is choreographing where people think the economy is headed,” said Wale Okunrinboye, Head of Research at Lagos-based Sigma Pensions Ltd. There was also a selloff in the open market operations (OMO) market as foreigners drove yields upward by 17bps to 14.9 percent. Investors also dumped Treasury bonds which closed on the day at an average yield that was 35bps higher at 10.7 percent. “As oil prices struggle to trend upwards amid no respite for the COVID-19 outbreak, we expect sentiment to remain bearish in the next trading session,” said Afrinvest in a note to client. GTB already at a 39-month low slid further by 10 percent to N19.95 a unit. Nascon, Dangote Sugar, Fidelity Bank, and Neimeth all lost 10 percent in the day with all major sectorial indices closing in the red. Amid the ongoing carnage there has been little or no statements or response from the Federal Government, except setting up a committee to

look into the matter, even as other countries move to reassure investors. The Bank of Russia Tuesday readied its defences against further market turmoil, bringing forward foreign-currency sales after the rout in oil prices made the ruble the worst-performer globally. The decision to start the foreign-currency sales early is aimed at “increasing the predictability of the actions of the monetary authorities and reducing volatility on financial markets amid significant changes in the world oil market,” according to a website statement from the central bank. The government will also halt its weekly localbond auctions in order to avoid “excessive pressure” on debt markets, the Finance Ministry said in a statement on Tuesday. United States President, Donald Trump told Republican senators on Tuesday that he wants a payroll tax holiday to help cushion the fallout from the global slowdown, the Chinese government is also preparing an economic stimulus, while the European Central Bank said it is ready to take ‘targeted’ action to address the economic impact and the Bank of Japan has signalled it will inject liquidity into markets and hinted at greater asset purchases.

absorb new labour market entrants, even though it struggled to create a fifth of the jobs in the last four years. Creating 3.3 million jobs annually means Africa’s largest economy would need to revert to the private sector by attracting more foreign direct investments (FDI). “At the moment, Nigeria’s private sector does not have the capacity to absorb the rapidly increasing unemployed population in the

short term,” NESG stated in its recent report. While Nigeria’s unemployment and employment data for the last six quarters remain unknown, NBS disclosed on its calendar that it would publish the Q1 and Q2 2020 labour force statistics in August this year. “Work hasn’t started” on gathering unemployment data due to “budget issues”, the NBS source told BusinessDay on Tuesday.

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no point joining in the discussion at a time like this. “The theme for your Roundtable Session is ‘Going for Growth’. Rapid growth is only achieved on the back of significant investment activity. Going for growth should therefore be a holistic concept that embraces the sum total of actions and activities that we need to encourage in order to boost investor confidence, including respect of individual freedoms and the rule of law,” Peterside said in the letter dated Tuesday, March 10. “Sadly, yesterday’s [Monday] events have turned back the clock at a time when our economy is at a precipice and when we need to tell ourselves some home truths and speak truth to power in a constructive manner,” he said. Peterside said he received an invitation, at short notice, to be a panellist at a CBN Consultative Roundtable Session taking place in Abuja on Wednesday (today). While thanking the CBN governor for the invitation, he said he reckoned the right thing was for him to respectfully decline to participate. “It is true that I am currently out of the country, but it is also true that I could have reorganised my activities and flown into Abuja in time to join you tomorrow [Wednesday] morning. My refusal to join you has more to do with the monumental events that took place yesterday viz the removal of the Emir of Kano from office and the release of information that purportedly seeks to exile him and restrict his movements or confine them to a little known enclave in Nassarawa State,” he said. He said he and his wife were invited to the Commonwealth Service that held in Westminster Abbey in London on Monday and they witnessed a colourful ceremony which included speeches by a variety of personalities, including Anthony Joshua, the Nigerian-British heavyweight boxing champion. He said Anthony Joshua and other speakers reminded them eloquently about what could go right when “we embrace the forces of modernity whilst recognising and upholding our proud cultural heritage”. “At the exact same time, I was distracted by disturbing news from Kano yesterday [Monday] which confirmed what can go wrong, when those in authority pay lip service to the Nigerian Constitution and then proceed to violate the fundamental freedoms that it guarantees each individual because they prefer to cling to practices like exile which they learnt from colonial masters and the military. These practices have no place in a democratic dispensation,” Peterside said. “By coincidence, the ExEmir of Kano is your predecessor in office at CBN. Ordinarily, he qualifies to be invited for tomorrow’s event. Did you invite him?” @Businessdayng

He said he had decided to stay away from the Consultative Roundtable and to instead use the opportunity of the letter to draw the attention of a wider audience to his displeasure with the events of Monday. “Please forgive me because I am in no mood to immediately pretend as if all is well by proceeding with business as usual. At an appropriate time I will send you my thoughts on how to quickly eliminate the policy inconsistencies that threaten the stability of our macroeconomy as CBN continues to seek to defy the odds by simultaneously pursuing a low domestic interest rate regime which clearly cannot coexist with high inflation and naira exchange rate stability in the face of collapsed/collapsing oil prices and an insatiable and uncontrolled appetite for foreign currency loans. “This unsustainable policy mix has spooked investors (local and foreign), thereby making it increasingly likely that the Nigerian economy slides back into a recession, unless you quickly embark on some course correction. I wish you happy deliberations tomorrow,” he said. Meanwhile, the Kaduna State government on Tuesday announced the appointment of Sanusi into the board of the Kaduna Investment Promotion Agency (KADIPA). The reconstitution of the board of KADIPA was approved by Governor Nasir El-Rufai, according to a statement from the Kaduna State Government House. “Malam Nasir El-Rufai has appointed His Highness, Muhammad Sanusi II into the board of KADIPA. The appointment is part of the reconstitution of the board of KADIPA, which is statutorily chaired by the deputy governor, and has as internal members senior officials of the Kaduna State government,” Muyiwa Adekeye, special adviser to the governor on media and publicity, said in a statement, Tuesday. “Governor El-Rufai said that Kaduna State hopes to benefit from the profile, experience, intellect and networks of His Highness, Muhammad Sanusi, who before becoming Emir, had built a solid reputation in global financial circles. Malam Nasir El-Rufai said that Kaduna State is honoured to be able to call on the services of a man of such calibre to drive its development,” Adekeye said. Sanusi’s legal has raised an alarm about the safety of the deposed emir, making an appeal to well-meaning Nigerians and the international community to prevail on the Kano State government to release him from its custody. The legal team, headed by Abubakar Mahmoud, immediate past national president of the Nigerian Bar Association (NBA), said the life of Sanusi, who is banished to a remote village in Nassarawa State by the Ganduje administration, is under threat.

Wednesday 11 March 2020

BUSINESS DAY

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Wednesday 11 March 2020

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POLITICS & POLICY Makinde signs Amotekun Bill into law, warns opposition against undue criticism REMI FEYISIPO, Ibadan

overnor Seyi Ma k i n d e o n Tuesday signed into law the bill establishing the Oyo State Security Network Agency, code-named Operation Amotekun. Operation Amotekun was launched on January 9 this year in Ibadan, Oyo State capital, by the six south west governors. The Oyo State House of Assembly on February 24 held a public hearing and passed the bill on March 3. Makinde, while signing the bill into law at the executive council chambers, Governor’s Office, warned kidnappers, bandits and other perpetrators of heinous crimes to steer clear of the South Western region. According to him, criminally-minded people should stay away from Oyo State and the entire South-West geo political zone, saying “Amotekun would get them if they refuse to leave.” While calling on prospective investors not to entertain any fear as the government will not renege on its promise to provide an enabling environment for businesses to thrive, said

Oyo State Governor, Seyi Makinde (sitting); signing Amotekun Bill into law, with him from left, Deputy Speaker Oyo State House of Assembly, Abiodun Fadeyi; Attorney-General and Commissioner for Justice, Oyewole Oyewo, a professor; Deputy Governor, Rauf Olaniyan; Speaker, Oyo State House of Assembly, Debo Ogundoyin and Secretary to the State Government, Olubamiwo Adeosun, at Governor’s Office PHOTO: Oyo State Government. Secretariat, Ibadan.

the state was now safe and secure for business. “We will continue to create a safe and secure environment at the state and local government levels so that our people can go about their lawful business,” he added. Makinde also warned opposition elements and naysayers in the state, who he said have been criticising his

government unnecessarily to have a rethink. He stated that some critics went on air to say that he did not have a manifesto to work with, adding that it was a wrong assertion to make because he launched a 102-page document that promised accelerated development for Oyo State ahead of the 2019 election. According to him, “Our

government has been diligently following the promise of accelerated development since inauguration.” The governor also said that development of the state was beyond quick fixes, as according to him, “good governance should not be taken as 100-metre dash but handled with effective and proper planning.” According to him, “We

came in with a proposal to the people of Oyo State. We promised them accelerated development. It is a 102page document; it is still there and we are following through on those ideas we espoused in the document. But they want people to believe that we don’t have a clue. We don’t have to join issues with them, because we know what we are doing. “But I am an engineer and when you see an engineer digging in front of your house, he already has the concept of what he is going to come out with from there. As a matter of fact, what is coming through already exists in his mind and on paper. “Yes, they [previous administration] took Oyo State through quick fixes in eight years and that is why, within eight to nine months, some of the infrastructure they claimed they have done have fallen apart. So, we are carefully doing the planning and we will deliver to the people of Oyo State projects that will outlast this administration.” The governor, who wore Amotekun attire with his deputy, as well as other executive members, said the signing of the bill was historic, adding: “I signed the State Security Network

Agency (Amotekun) Bill, 2020 into law. It’s been a long and torturous journey that started as far back as July 2019. Today, history has been made as Oyo State joins other southwest states to have the Amotekun law in force. He re-emphasised that the Amotekun Corps was not a replacement of the traditional security agencies. “It is to complement the efforts of the federal security agencies that are stretched to the limit as a result of pockets of insecurity all over Nigeria,” he said. He thanked the traditional security agencies for the work they are doing despite budgetary, operational and personnel deficits, stressing that the Amotekun Corps would meet some of these gaps which will help secure Oyo State better. Speaker, Oyo State House of Assembly, Debo Ogundoyin led other lawmakers to present the bill to the governor for his assent. Also at the signing were the Deputy Governor, Rauf Olaniyan; Attorney-General and Commissioner for Justice, Oyewole Oyewo, a professor, and Secretary to the State Government, Olubamiwo Adeosun.

Lagos Assembly names replacements for impeached principal officers

Kwara Assembly by-election: Abdulrazaq flags off campaign

… Seals sacked lawmakers’ offices

wara State G overnor, Abdulrahman Abdulrazaq has flagged off a marathon All Progressives Congress (APC) campaign tour crisscrossing various communities in Patigi Local Government ahead of Saturday’s by-election for the Patigi Constituency of the State House of Assembly. Abdulrazaq told locals how his administration was steadily changing the story of the area through various developmental projects that included renovation of schools, rehabilitation of roads, irrigation sites, and water projects. The campaign tour has so far touched down in Esanti, Patigi, Kpada, Rogun, and Lade as at Tuesday afternoon, with a few other communities slated to receive the APC team led by Abdulrazaq himself. Accompanied by Abubakar Sadiq (Kwara North), House of Assembly Speaker Yakubu Danladi, federal

Iniobong Iwok

h e L a g o s St at e House of Assembly Tuesday named two lawmakers as replacement for the principal officers impeached on Monday. The members, after plenary, unanimously elected Noheem Adams from EtiOsa constituency 1 as the Deputy Majority Leader while Mojisola Miranda representing Apapa constituency 1 was elected as the new Chief Whip. Before their election, Noheem was the chairman of the committee on Public Private Partnerships while Hon. Miranda was in charge of the committee on Job Creation. Their election came hours after the impeachment of Olumuyiwa Jimoh as the

Deputy Majority Leader and Rotimi Abiru, who was the Deputy Chief Whip. The two officers were removed by their colleagues after a voice vote. The House had also suspended two other lawmakers, Moshood Oshun from Mainland Constituency 2, and his colleague, Kazeem Raheem Adewale from Ibeju Lekki Constituency 2. They were suspended indefinitely for alleged gross misconduct and other infractions said to be against the rules guiding the House and its operations. Reading out the suspension, the Speaker of the House, Mudashiru Obasa, relied on the provisions of the House Rules and Standing Order. He had noted that the Legislature was the hope of the people of the state but www.businessday.ng

because of the conducts of the affected lawmakers, the hope seemed to be missing. “It is of this note that I invoke Orders 68, 71, (4) (a)(b)(11) and (111) of the Rules and Standing Order of the House in respect of gross misconduct, insubordination and actions that can destabilise the House,” he said. Meanwhile, offices of the sacked Principal Officers, Deputy Majority Leader (Wahab Jimoh), Chief Whip Rotimi Abiru and the two suspended lawmakers, Moshood Lanre Oshun (Lagos Mainland 2) and Kazeem Raheed Adewale (Ibeju Lekki 2) were sealed on Tuesday morning. It was learnt that the staff of the embattled lawmakers were not allowed to enter the offices before they were sealed.

SIKIRAT SHEHU, Ilorin

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and state legislators, cabinet members and local party apparatchiks, the Governor said his strides have justified the confidence of the voting public and would again speak for the party in the Saturday ballot. The poll comes three months after the death of Saidu Ahmed Rufai of the APC who held the seat. The APC candidate for the fresh ballot is Adam Ahmed Rufai. Abdulrazaq had while commending the people for their support in the 2019 poll, says: “You can see the crowd. People are understandably excited because we have been fixing basic amenities unlike in the past. We scored about 75percent here in the 2019 election. With the support of the people, we will exceed that in Saturday’s election. “We are working very hard and steadily to address the challenges in this area. We are aware of the challenges you faced as a result of overflow of River Niger. I have spoken with the Governor of Niger State and we are mak@Businessdayng

ing efforts to ensure that the dredging of the River Niger is captured in the 2021 budget.” He explains that the government is concerned about the havoc flooding wreaks on farmlands and houses every year. The governor, who officially received some local government chairmen and other opposition leaders into the party, assured the people of Patigi that the government remained committed to giving them the basic infrastructure that would impact lives. “We are also launching our Social Investment Programme this month to begin School Feeding Programme, support our market men and women, artisans to jump start their businesses and enterprises,” he said. “We are happy to be here. We are not visitors to this palace anymore. Let me once again thank you for the overwhelming support the party got in this area in the last general elections. We seek your support for our candidate, Adam Ahmed Rufai, in Saturday’s election,” he said.

Wednesday 11 March 2020

BUSINESS DAY

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Saudi Arabia escalates oil price war with plan to maximise supply State oil producer plans to ramp up production to 12.3m barrels of crude a day in April Anjli Raval and David Sheppard

audi Arabia will supply the oil market with 12.3m barrels a day in April, marking a dramatic escalation in its price war following the collapse of a production agreement between Opec and Russia to stabilise the market. The level is more than 2.5m barrels a day above what it was previously producing and greater than Saudi Arabia’s maximum sustained production capacity, suggesting that the kingdom will take barrels from storage to flood the market rapidly as it takes on rivals in a fight for market share. Olivier Jakob at Petromatrix said Saudi Arabia was pursuing a “shock and awe” strategy to demonstrate it had the capability to raise supply faster than any other producer. “Saudi Arabia is going all in on trying to disrupt the oil market,” said Mr Jakob. “Over the weekend they signalled a price war and now this has gone straight to a volume war. The market does not need that much crude oil. They are dumping the oil from storage.” The start of an oil price war at a time when demand is falling due to the coronavirus crisis triggered one of the biggest one-day price falls in history on Monday, roiling global financial markets as crude fell by as much as 30 per

cent to nearly $30 a barrel. Saudi Arabia is going all in on trying to disrupt the oil market Olivier Jakob, Petromatrix While markets stabilised on Tuesday, with Brent crude trading near $36 a barrel, traders and oil producers are bracing themselves for a protracted period of lower oil prices as tensions between Saudi Arabia and Russia — the two largest oil producers outside the US — worsen. Russia balked at a Saudi Arabia-led proposal for deeper and more prolonged cuts to stabilise crude prices last week, effectively collapsing its three-year-old agreement with the kingdom to

try and prop up crude markets. In response, the kingdom slashed export prices for its crude and said it would raise output, but the plan to supply 12.3m b/d is a faster and more aggressive increase than many oil traders were anticipating. Saudi Aramco has said it has spoken with customers and agreed to supply them with these levels starting from next month, according to one person familiar with the matter. The level is above what Saudi Aramco says is its maximum sustained production capacity of 12m b/d, the level at which the kingdom believes it can consistently pro-

duce for long periods of time. Just as news of the Saudi supply increase reached market participants, Russia’s energy minister Alexander Novak responded by saying it too could raise production by a further 500,000 b/d in the “near future”. But Russia does not hold the same kind of spare production capacity as Saudi Arabia, which for decades has kept oilfields in reserve that it can tap to raise output in weeks or months. Russia has been an unwilling participant in joint production cuts believing they only subsidised the US shale industry, which has captured market

share from rivals over the past decade. Moscow, which is irate with the Trump administration for sanctions against its energy sector, has spotted an opportunity to target the US economy. The US Department of Energy said late on Monday that the price war amounted to “attempts by state actors to manipulate and shock oil markets”, adding that the US as the “world’s largest producer of oil and gas, can and will withstand this volatility”. Prince Abdulaziz bin Salman, Saudi Arabia’s oil minister, said last week that any production cut deal would depend on the participation of major producers, including Russia, which it believes has been shirking off its share of existing supply curbs. Some energy analysts believe that the game of brinkmanship is intended to lure producers back round the negotiating table. The socalled Opec+ alliance has helped to stabilise prices, even as it allowed the US shale industry to thrive. Mr Novak on Tuesday said on Russian television that the “doors are not closed” for more future co-operation with Opec countries on oil policy. But others do not believe a rapprochement is coming any time soon, meaning the most economically vulnerable Opec producer nations will be hit hardest as will the budgets of energy companies.

Airlines slash capacity to cut costs as coronavirus hits demand Qantas warns slump will be ‘survival of the fittest’ as American and Delta lower forecasts

FT reporters

he crisis engulfing the airline industry deepened on Tuesday as carriers cancelled flights, withdrew guidance on their business prospects and implemented a series of austerity measures to cope with the travel slump caused by the coronavirus outbreak. “I think this will be a survival of the fittest,” said Alan Joyce, Qantas chief executive, as the Australian carrier outlined drastic cost-cutting measures on Tuesday that included cutting almost a quarter of international flights, asking staff to take unpaid leave and sacrificing his own salary for the next three months. “We know we can ride this out,” said Mr Joyce. “Not all airlines around the world will.” Later on Tuesday Norwegian Air Shuttle, one of the most financially stretched carriers, said

it would slash 3,000 flights over the next three months, equating to about 15 per cent of its total capacity. As the New York market opened, American Airlines and Delta Air Lines then pulled their 2020 financial forecasts and Delta said its capacity would be reduced by as much as 25 per cent internationally and as much as 15 per cent domestically. Cracks have already begun showing in those nations worst affected by travel restrictions. Korean Air has warned it may not survive if the coronavirus outbreak is not brought under control quickly. The group has cut 80 per cent of its international capacity due to the virus, compared with just 18 per cent in 1997-1998 during the Asian financial crisis. What is “daunting is that the situation can get worse at any time and we cannot even predict how long it will last”, Woo Kee-hong, Korean Air chief executive, told www.businessday.ng

employees in an email seen by the Financial Times. “If the situation continues for a longer period, we may reach the threshold where we cannot guarantee the company’s survival.” China’s main carriers — Air China, China Eastern Airlines, China Southern Airlines and Hainan Airlines — have slashed routes and put pilots on unpaid leave. Some have had to refinance their fleets. Beijing has provided state subsidies and is considering a bailout for Hainan, China’s fourth-largest carrier. Travel demand has crumbled as coronavirus cases have surged outside of China. The International Air Transport Association estimates the virus could reduce 2020 global passenger revenue by $63bn to $113bn. Delta said on Tuesday that it would defer $500m in capital expenditures, suspend share repurchases and delay $500m in pension funding. In addition it

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introduced a hiring freeze and offered voluntary leave options as part of efforts to lower costs. “As the virus has spread, we have seen a decline in demand across all entities, and we are taking decisive action to also protect Delta’s financial position,” said Ed Bastian, chief executive. American Airlines said its overseas capacity would be reduced by 10 per cent over the summer, including a 55 per cent reduction in trans-Pacific capacity. Domestically, capacity will be down 7.5 per cent. Among the changes to its schedule, American said it was suspending services to mainland China and Hong Kong from Los Angeles through the summer. From Dallas-Fort Worth it was suspending services to mainland China through summer and Hong Kong through June. The carrier is also suspending flights to Rome and Milan from Philadelphia. On the same day Italy’s prime @Businessdayng

minister Giuseppe Conte introduced a ban on all non-essential travel, European budget airline Ryanair suspended all flights to, from and within the country. Europe’s third-largest low-cost airline on Tuesday said it was also introducing emergency measures, including temporary lay-offs of a significant share of its workforce. The 3,000 flight cancellations will take place over the period midMarch to mid-June. British Airways cancelled all of Tuesday’s scheduled flights to Italy as the country goes into lockdown in an attempt to stem the spread of coronavirus. Wizz Air, the low-cost carrier, on Tuesday said it was suspending all flights to Italy with immediate effect as well as stopping flights to Israel from March 12. Lower-rated airlines have seen borrowing costs soar in recent weeks with debt from American Airlines and Virgin Australia both moving to distressed levels.

Wednesday 11 March 2020

BUSINESS DAY

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Deutsche Bank cleared Cyprus funds for businessman Jho Low Lender acted as correspondent bank for Malaysian facing allegations over 1MDB scandal Michael Peel Cyprus and Olaf Storbeck

eutsche Bank cleared funds for Jho Low, the Malaysian businessman fighting multibillion-dollar corruption allegations, ahead of his purchase of a house and nationality in Cyprus under the Mediterranean state’s “golden passport” scheme. Germany’s biggest lender acted as a so-called correspondent bank and processed a cross-border transfer of almost €6m. The payment was made in June 2015 from Mr Low’s Swiss account at Abu Dhabi-owned Falcon Bank to the Bank of Cyprus, according to a transaction record seen by the Financial Times. The money transfer happened several months after allegations surfaced that Mr Low helped misappropriate vast sums from Malaysia’s 1MDB state investment fund. The businessman, who is under US criminal indictment, has always denied any wrongdoing. Deutsche’s role in the transaction highlights the hazards of the correspondent-banking model, in which global banks provide international payment services such as clearing US dollar and euro transactions for smaller regional lenders, earning fees in return. The German lender is one of the world’s largest processors of crossborder payments. In 2019, it pulled out of correspondent bank activities in Cyprus and several other EU countries because of the risks involved. The payment of €5.96m to Mr Low’s Bank of Cyprus account was made on June 24, 2015, according to the bank’s incoming customer credit transfer document, which also recorded Deutsche’s role as

The DB transaction concerning Jho Low was made months before he became embroiled in the 1MDB scandal © FT montage / Getty / AFP

correspondent. Mr Low then bought a €5m house in the holiday resort of Ayia Napa and made a brief trip to Nicosia in September 2015 to pick up a Cypriot passport, under an official scheme that offered citizenship to foreigners who invested in high-end property. A fee of €650,000 relating to the property purchase was paid from a Cypriot developer to an agent, according to an invoice seen by the FT. Mr Low also gave €300,000 towards a theological school in Cyprus, according to interviews in local media with Archbishop Chrysostomos, head of the Eastern Orthodox church of Cyprus and a supporter of Mr Low’s citizenship application. The June payment to the Bank of Cyprus account came almost four months after the investigative website Sarawak Report

published a detailed article alleging Mr Low was central to a plot to misappropriate more than $700m from 1MDB intended for a business joint venture. Mr Low vigorously denied the allegations, including in an April 2015 interview with Euromoney, available online and headlined “Jho Low says it ain’t so”. Bank of Cyprus declined to comment. It reported transactions involving Mr Low later in 2015 to Mokas, the island’s body responsible for combating money laundering, according to local media reports. The US criminal indictment unsealed in 2018 accused Mr Low of conspiring with others to misappropriate more than $2.7bn from 1MDB. Under a separate provisional financial settlement with the US government unveiled last year, he agreed to forfeit as-

sets including a Bombardier jet, high-end real estate in London, New York and Los Angeles, and a “luxury boutique hotel” in Beverly Hills. He admitted no wrongdoing. A representative of Mr Low did not respond to a request for comment. Deutsche Bank is facing regulatory scrutiny over its vetting of transactions for Danske Bank Estonia. Between 2007 and 2015, the German lender processed up to €160bn of potentially suspicious transactions for the tiny Estonian branch of Danske. Last September, criminal prosecutors in Frankfurt launched an investigation into Deutsche’s role in the matter. Deutsche had limited direct anti-money-laundering responsibilities in the Cyprus transfer involving Mr Low, who was not its client. However, correspondent

banks are required to monitor their business partners’ transactions “with a view to detecting any changes in the respondent institution’s risk profile or implementation of risk mitigation measures”, according to a guideline from the Financial Action Task Force, a global anti-money laundering body. Abu Dhabi’s Falcon Bank received $3.8bn in cross-border payments between 2012 and 2015 involving accounts held by offshore-companies linked to the 1MDB scandal, according to an investigation published in 2016 by Swiss regulator Finma. The watchdog also found the bank had a “young Malaysian businessman with links to individuals in Malaysian government circles” among its clients. The unnamed person acquired $135m in assets “in an extremely short period of time” and later received $1.2bn in payments to his account. A Falcon spokesperson told the Financial Times that it “does not disclose any information about past, current or potential banking relationships due to Swiss banking secrecy.” Deutsche also declined to comment on “potential or actual client relationships”. A spokesperson added that “we are checking our banking partners diligently and are monitoring the transactions that we are processing.” Zurich-based Falcon Bank was sanctioned by Finma in 2016 for “serious shortcomings in [its] antimoney laundering activities and in risk management”. The lender had to pay back SFr2.5m in “illegally generated profits”, was banned from entering new business relationships with foreign politicallyexposed persons for three years, and told it would lose its licence should there be a further breach.

Why investors should brace for aftershocks

Good reasons to be wary remain despite bounce in equity markets following day of mayhem Robin Wigglesworth

inancial markets are enjoying a recovery after Monday’s shock. The bounce is natural, given the severity of yesterday’s 7 per cent crash in global equities. But investors tempted to buy the dip should be mindful that sell-offs of that magnitude tend to ripple far and wide. Saudi Arabia’s decision to start an oil price war triggered the biggest one-day slump in crude prices in almost three decades, and heightened the anxiety of investors whose nerves were already frayed by the spreading coronavirus. The result was a day of mayhem on markets, best exemplified by Wall Street’s “fear gauge”, the Vix, surging to its highest level since the peak of the financial crisis in 2008. The FTSE All-World stock index has

now tumbled 17 per cent from its February peak That sense of total capitulation, mixed with expectations of twin fiscal and monetary policy stimulus, has naturally led some investors to think that now is the time for bargain-hunting. European equities are about 3 per cent higher on Tuesday, and US futures indicate that the S&P 500 will open up at a similar gain. Buying the dip does make some sense. In time, lower oil prices should prove an economic boon, and China, the epicentre of the coronavirus outbreak, does indeed look like it has slowed the virus’s spread. “This is not 2008,” BlackRock, the world’s biggest asset manager, argued in a report sent out on Monday evening. “The economy is on more solid footing and, importantly, the financial system is much

more robust today than going into the crisis of 2008. We don’t see this as an expansion-ending event — provided that a pre-emptive and co-ordinated policy response is delivered.” Nonetheless, investors have a multitude of reasons to remain wary, which means Tuesday’s bounce could prove brief. While it is perfectly true that the financial system is far more resilient than it was during the financial crisis, market earthquakes of this magnitude tend to cause aftershocks. Investors have been pulling money out of riskier funds for a few weeks, but flows often lag returns. The severity of the recent slump means that even if markets continue a cautious recovery this week, many asset managers have to gird themselves for some hefty outflows in the coming days and weeks. That will probably reveal some further

faultlines that were previously hidden by buoyant markets. Awaiting a co-ordinated, aggressive policy response also looks hopeful. The Federal Reserve has already cut interest rates by half a percentage point, leaving it with just another percentage point before it hits zero — which it has indicated it considers its lowest possible level. The European Central Bank and the Bank of Japan already have negative interest rates and vast bond-buying programmes, and it is questionable what more they can do that would soften the coronavirus blow and reinvigorate economic growth. Fiscal policy, in terms of targeted government spending designed both to fight the pandemic and boost flagging demand, might do the trick. But given some countries’ sizeable budget deficits, high debt levels and the political resistance

in some quarters to fiscal stimulus, it seems Pollyanna-ish to think we will now see something that does more than soften the blow. While the oil price crash may be stimulative in time, the more immediate concern is the damage it might inflict on credit markets. Companies have been on a borrowing binge in the past decade, and yield-hungry investors have been willing to oblige. But the inevitable surge in energy company downgrades and defaults will echo through the corporate bond market. It is notable that the 2014-15 oil slump did little to invigorate economic growth, with the negative impact swamping the positives. We have moved from an environment where a global recession was hard to envisage, to one where it was possible, and now to one where it may be hard to avoid. We are not out of the woods yet.

Wednesday 11 March 2020

BUSINESS DAY

ANALYSIS

Joe Biden looks to extend lead in six Tuesday primaries

Michigan is biggest prize as Bernie Sanders seeks to regain momentum in Democratic race Lauren Fedor and James Politi

oe Biden and Bernie Sanders will go head-to-head in six Democratic presidential primary contests on Tuesday, as the former vice-president seeks to shore up his frontrunner status and the Vermont senator looks to re-energise his campaign. Mr Biden, 77, took the lead in the Democratic race in last week’s “Super Tuesday”, as support from African-American and suburban voters propelled him to victory across the south and in northern states such as Minnesota and Massachusetts. Mr Sanders, 78, won the delegate-rich state of California, but narrowly lost Texas to Mr Biden. Mr Biden has won 664 delegates so far, compared with Mr Sanders’ 573, according to the Associated Press. With 1,991 delegates needed for the nomination, 352 delegates will be up for grabs on Tuesday in Michigan, Missouri, Mississippi, Idaho, North Dakota and Washington state. Votes from Democrats living overseas will also be counted. The primaries will be the first since Elizabeth Warren, the senator from Massachusetts, and Michael Bloomberg, the former New York City mayor, dropped their presidential bids, setting up what is essentially a two-man race between Mr Biden and Mr Sanders. Tulsi Gabbard, the Democratic congresswoman from Hawaii, is

still running for president but has secured just two delegates. Tuesday’s biggest prize will be Michigan, which will award 125 delegates. Mr Sanders narrowly won the Midwestern state in 2016 when he ran against Hillary Clinton, but polls put Mr Biden in the lead. According to the RealClearPolitics average, Mr Biden has a 22.6 percentage-point advantage over Mr Sanders. International trade has proven a key point of difference between Mr Biden and Mr Sanders in Michigan, a state that has borne the brunt of America’s manufacturing slowdown, even as the rest

of the economy performed well in recent months. While Mr Biden, a moderate, has traditionally been sympathetic to open trade, Mr Sanders, a selfdescribed Democratic socialist, has consistently opposed US free trade agreements. Mr Sanders told ABC News on Sunday that recent trade agreements “cost 160,000 jobs here in Michigan because American workers were forced to compete against desperate people in Mexico and China . . . I led the effort against those disastrous trade agreements, worked with the unions. Joe voted for those trade

agreements.” It remains unclear whether Mr Sanders’ attacks will resonate with Michigan voters. Mr Biden, who is known in the state for helping to engineer the bailout of the US car sector during the financial crisis, has secured several high-profile endorsements in the state, including from Gretchen Whitmer, the governor. Endorsements have proved crucial to the turnround of Mr Biden’s candidacy, which took off after his 30 point victory in South Carolina. The backing of Amy Klobuchar helped the former vice-president win Minnesota

last week, while the support of Beto O’Rourke gave him a boost in Texas. More recently, Mr Biden has received endorsements from former presidential hopefuls Cory Booker and Kamala Harris. On Monday night, Mr Booker, a senator from New Jersey, and Ms Harris, a senator from California, campaigned with him in Detroit, where threequarters of the population is African-American. An estimated one-fifth of Democratic primary voters in Michigan will be black. Mr Sanders is betting on a large turnout from younger voters in Michigan, especially in college towns like Ann Arbor, where some 10,000 people attended a rally for the Vermont senator on Sunday. Both candidates have continued to criss-cross the country for campaign events, despite the spread of coronavirus. Mr Biden told NBC News on Monday that his campaign was following CDC (Centers for Disease Control and Prevention) advice. “If they conclude that there shouldn’t be big indoor rallies then we’ll stop big indoor rallies,” he said. “We’re going to do whatever they say.” Mr Sanders’ campaign emailed supporters to ask them to sign a petition demanding free coronavirus testing and treatment for all Americans. Mr Sanders has centred his campaign on a “Medicare for All” plan that would effectively eliminate US private health insurance.

Why there are no winners from the oil price plunge this time Coronavirus hit to demand will prevent any boost to growth, economists say Delphine Strauss

he last sustained fall in global oil prices from 2014 to 2015 was greeted as a shot in the arm for the world economy. This week’s crash, if it lasts, could be very different. The shock to supply — which analysts say could leave crude prices hovering around their current levels of between $30 and $40 while the price war persists — is expected to put enormous strain on the economies and public finances of oil-producing countries. In normal times the net effect on the global economy would still be positive, as lower fuel prices boost consumer demand and investment in non-oil sectors. But this time the global coronavirus outbreak offers little hope that consumers will rush out to spend the windfall. On Monday, the International Energy Agency said it expected global oil demand to fall this year for the first time in a decade owing to China’s economic slowdown and the disruption to travel and tourism around the world. “With a combination of a mas-

sive supply overhang and a significant demand shock at the same time, the situation we are witnessing today seems to have no equal in oil market history,” said Fatih Birol, executive director of the International Energy Agency. Economists at Morgan Stanley say there are three main channels through which a decline in oil prices will damage the global economy. It seems particularly unlikely that households will respond to lower energy costs by spending more now Jennifer McKeown, Capital Economics First, it will hit capital spending in oil-related sectors and producer countries. Second, strains in corporate bond markets — with some energy companies at risk of default — could exacerbate the recent tightening in global financial conditions. Finally, while there will be a benefit for consumers, it is unlikely to translate into higher spending in the near term. Andreas Economou at the Oxford Institute for Energy Studies, said: “Usually, consumer countries would benefit . . . but nothing is positive at the moment

for anybody.” The main oil-producing nations will feel the worst of the pain. An oil price of between $30 and $40 is not high enough for any of their governments to finance spending plans while running a balanced budget, according to IMF estimates of fiscal break-even rates. Although Saudi Arabia’s large foreign exchange reserves mean it can tolerate low prices for some time, Mark Lacey, head of commodities at Schroders, estimates that Riyadh’s decision to slash prices while pumping more oil could cost the country some $120bn. Mr Birol said on Twitter that in some big producer economies “sustained low prices could make it almost impossible to fund essential areas such as education, healthcare and public sector employment”, adding that this would make diversification at once “more important and more difficult due to the lack of funds to achieve it”. Other emerging markets could also suffer. James Lord at Morgan Stanley said oil importers “may on the face of it benefit, yet they rarely

do” — because sharp oil price falls were often accompanied by global risk aversion and higher borrowing costs. The implications for the US economy are more ambiguous. In the past, the main effect would have been to bring down gasoline prices for consumers at the pump — a development which would be a boon for any incumbent president in an election year. But now shale oil has made the US a net energy exporter and many shale producers risk falling into bankruptcy if prices remain at their current level. “You’re going to see companies hit, you’re going to see investment decline and local fiscal bases collapse that sustain spending on health and education in oil-producing states,” said Jason Bordoff, a professor at Columbia University. One region that should be an unambiguous beneficiary is the eurozone, where the chief effect of a fall in the oil price is to bring down consumer prices, boosting household finances. The European Central Bank’s rule of thumb is that every 10 euro fall in the oil price brings down

eurozone inflation by 0.3 percentage points within two months. “It is good news. It is one of the shock absorbers that can help,” said Holger Schmieding, an economist at Berenberg. But he added that while the effects on investment in the US energy industry would be immediate, any benefits to European consumers would feed through only in the longer term — making it more of a “consolation” than an immediate help to global growth. Jennifer McKeown, at the consultancy Capital Economics, said the near 50 per cent drop in the oil price since the start of the year would knock about 1 percentage point off headline inflation across the OECD — but warned that even in 2014, the decline in oil prices had not boosted consumer spending in the eurozone or US by as much as had been initially expected. Given coronavirus fears and related lay-offs, “it seems particularly unlikely that households will respond to lower energy costs by spending more now”, she said. If anything, the drop in the oil price “has raised the threat of a deeper downturn”.

Wednesday 11 March 2020

BUSINESS DAY

tax issues Growing Nigeria’s tax revenue: what options are available? Blessing Idem and Oluwadamilola Abiru

here seems to be a global paradigm shift, as countries are more attuned to driving fiscal revenue growth through tax collection. Nigeria is not left behind in this trend, as her National Tax Policy emphasizes government’s commitment to diversifying the sources of fiscal revenues by significantly increasing tax to Gross Domestic Product (GDP) ratio. The Nigerian government has, in recent times, shown sustained attempts in ramping up non-oil revenue. The 2020 Budget makes this evident as the proportion of projected non-oil revenue to total revenue grew by 40percent from 2019 to 2020. Similarly, of the nonoil revenue, the proportion of tax revenue estimate has continued to grow, averaging about 39% over the last three years. Indeed, 2020 is not an exception as tax revenue is a significant component of the projected non-oil revenue. However, the actual tax collection over the year seems to be below the expected projection. For instance, the 2019 Half Year Budget Implementation Report, which was published by the Budget Office of the Federation, states that Value Added Tax, Companies Income Tax, and Special Levies fell short by N246.97 billion (28.99 percent), N211.67 billion (24.03 percent) and N37.65 billion (61.07 percent), in that order, when compared with their 2019 projected half year estimates. Also, according to OECD publication on Revenue Statistics in Africa, in 2019, Nigeria’s tax revenue to Gross Domestic Product (GDP) ratio is still about 5.7percent. This indeed is one of the lowest in the world and is very far from the average of 15percent collection by a typical developing economy and 40percent by a typical advanced economy. The foregoing is not strange to government and tax authorities as efforts have been made over the years to enhance tax collection. Government’s continuous effort in ratcheting up tax revenue gives a clear indication that the era of government’s reliance on oil revenue to keep government afloat is long gone. Tax is now the new petrol-dollars for Nigeria, as revenue from tax continues to fund government projects, in the face of dwindling fortunes from crude oil. Government’s effort at raising tax revenue Government and tax authorities have explored several initiatives over the years towards enhancing tax collection. Some of these include the introduction of tax amnesty schemes to encourage voluntary compliance and full disclosure, and increased/ multiple tax audits, freezing of taxpayers’ bank accounts, collaboration with banks and tax authorities of other countries to report information on bank accounts of individuals and companies, amongst others. According to the World Bank’s Ease of Doing Business Index report, 2020, Nigeria now ranks 131

out of 190 countries, moving up 15 places from 146th position in the 2019 Report. One of the 11 indicators considered in this report is “paying taxes”, which measures payments, time, and total tax and contribution rate for a business to comply with all tax regulations as well as post filing processes. This speaks to the success of government’s commitment to improve Nigeria’s business environment to attract investors, and invariably increase tax revenue. In addition, the Federal Government recently passed the Finance Bill 2019 into law. The Finance Act amends several tax provisions which have impeded investment in Nigeria, especially obsolete and contentious provisions relating to taxes, incentives, duties etc. The Act also seeks to provide a boost to small and medium scale enterprises by reducing their tax burden. More importantly, the Finance Act is expected to facilitate increase in revenue generation for government –as it seeks to expand the tax net through its inclusion of the framework for the taxation of digital economy, and the requirement of Tax Identification Number (TIN) as a prerequisite for bank account opening, among others. The Act also provides for a 50percent increase in the Value Added Tax Rate (VAT) from 5percent to 7.5percent, in order to boost tax revenue. While the passage of the Finance Act is noted as a commendable step to improving Nigeria’s tax environment, it is doubtful that the increase in VAT rate will translate to a significant increase in government revenue, given the country’s current economic reality. Therefore, it is expedient that the government and tax authorities consider other alternatives to achieving a sustainable increase in tax revenue. This article focuses on one important option – leveraging digital technology to enhance tax administration and boost tax revenue. Leveraging digital technology for tax administration - an alternative to consider During the last few years, the Federal Inland Revenue Service and several States Internal Revenue Service www.businessday.ng

have introduced e-filing / e—payment platforms. This should typically enable taxpayers to make payment of taxes through electronic channels, as well as upload tax returns on the FIRS / individual SIRS tax portal. However, this initiative is not fully optimized, due to teething problems including, but not limited to, information technology downtimes. The current process of tax administration in Nigeria can be better. Digitalization has changed the business model of most organizations. Therefore, to optimize tax collection from such businesses, the tax administration process should be largely digitalized. To achieve efficiency in a short-term, tax authorities should ensure that their electronic platforms function as expected. Also, the current manual tax audit / investigation process could be replaced with a more efficient approach whereby taxpayers can upload large documents/files to a “shared point”, from which tax authorities would access and review the documents. In such instance, audits would only be conducted after the tax authority has reviewed the documents obtained from the “shared point” and is not satisfied with the information reported by the companies. To achieve a long-term / sustainable growth in Nigeria’s tax revenue, tax authorities may consider streamlining their activities through information technology tools. Tax authorities of various emerging and developed countries have leveraged digital technology to increase their tax revenue collection. We have reviewed some of the technology tools and success stories of some countries that have implemented these tools to drive tax revenue. E-invoicing In a bid to counteract Value Added tax (VAT) fraud and evasion more effectively and in the long term, tax authorities of some countries commenced the implementation of mandatory e-invoicing. Mandatory e-invoicing enabled the tax authorities to acquire real-time data, enhancing risk analysis to detect and prevent frauds as well as the compliance and services to taxpay-

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ers. Vendors were provided with cash registers which were connected to the tax authority’s database, such that at the point of invoice generation by a vendor, the invoice information is equally passed on to the tax authority. Consequently, the tax authority gains real-time insight into transactions and greater compliance with VAT reporting, as sales data is automatically transmitted. According to OECD , the adoption of e-invoicing / cash registers resulted in an increased tax revenue for countries such as Singapore, Hungary, Rwanda etc. with the growth in tax revenue ranging from 15percent - 20percent. In addition, the Mexican Government reported that mandatory e-invoicing brought 4.2 million businesses into the formal economy. Data analytics / pre-filing of tax returns Tax authorities are pooling tax information from a multitude of sources, such as financial institutions, government agencies, e-commerce platforms, overseas tax authorities so that they can take advantage of big data analytics to facilitate tax administration. The data collected by tax authorities is not just in individual slices for each taxpayer, but a series of parts of a larger picture. With proper analysis, the authorities use information from taxpayers to detect non-compliance of third parties such as vendors. For instance, Tax authorities of advanced countries such as Germany, Finland have leveraged information from third parties to prepopulate Value Added Tax Returns and Personal income tax forms for companies and individuals respectively. Thereafter, the pre-filled tax returns are sent to the taxpayers for verification and submission of the verified tax returns to the tax authorities, where there are no objections. Risk - Based Tax Audit This is a tax audit selection strategy that involves the use of risk-scoring techniques to enable tax administrators to build several “profiles” for taxpayers and hence to identify those most likely not to comply with tax law. To achieve this, tax authori@Businessdayng

ties maintain significant amount of quality data (internal and external to the tax administration) on both past audit cases and current taxpayer attributes (audited and unaudited), and IT systems (hardware, software, and training) to process the data and provide scores and other pointers feeding into audit programming. As a result, tax administrators have developed audit strategies focused on taxpayer non-compliance risks. For instance, Ukraine employs a multistage process with frequent communication between the central and provincial offices in the formation of risk-based criteria for tax audits. Multiple data sources are analyzed in order to create the list of target corporate taxpayers. The size of the taxpayer operations is an important starting point. These data are mined for relevant information, and feedback is shared between local and central offices. Criteria for risk-based audits are based on the background data that are mined. According to World Bank, the implementation of a risk-based audit system in Ukraine has yielded numerous benefits, including a better voluntary compliance and a more efficient means of tax collection. There has been a 10 percent decrease in the number of audits performed at as well as a 45 to 72 percent increase in tax collections as a result of audits because the audits are more focused on high-risk cases. A higher hit rate creates a deterrent for delinquent behavior. Accordingly, the level of voluntary compliance seems to have increased, as indicated from declarations received from taxpayers. As a result of information matching, as highlighted in final audit or inspection reports, the level of data conformity has more than doubled, from 19 to 39 percent. Approximately one-third of corporate taxpayers have declared higher profit tax payments, and 40 percent have declared higher VAT payments. Conclusion The much-desired sustainable growth in tax revenue will only be achieved through long-term strategic initiatives. To achieve a long-term / sustainable growth in Nigeria’s tax revenue, tax authorities may consider deploying information technology tools which will enable direct and real – time access to taxpayers’ data. This could be in the form of a data gathering tool which would be linked to a central point in the tax authority’s database and transmit real-time transactions in encrypted form. Also, for an efficient tax audit process, tax authorities in should be more data centric -maintain quality data base and properly design audit selection strategy that is focused on high-risk taxpayers. While one may be concerned about the expected cost implication of a fully digitalized tax administration process, we believe that the benefits would compensate for this on the long-run, as the result will include increased voluntary compliance, expansion of the current tax net and a sustainable increase in tax collection. Blessing Idem and Oluwadamilola Abiru are senior advisers at KPMG in Nigeria

Wednesday 11 March 2020

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Tuesday 10 March 2020

Top Gainers/Losers as at Tuesday 10 March 2020 LOSERS

GAINERS Company

Opening

Closing

Change

NEIMETH

N0.4

N0.44

0.04

HONYFLOUR

N0.87

N0.9

0.03

NEM

N1.73

N1.75

0.02

STANBIC

NIG-GERMAN

N3.62

CAP

AFRINSURE

N0.2

GUARANTY

Company

ASI (Points)

Opening

Closing

Change

N115

N103.5

-11.5

DEALS (Numbers) VOLUME (Numbers)

MTNN

N36.75

N33.1

-3.65

N31.5

N28.35

-3.15

N22.15

N19.95

-2.2

VALUE (N billion)

N22.15

N19.95

-2.2

MARKET CAP (N Trn)

24,388.66 4,010.00 594,553,465.00 4.207 12.709

Global market indicators EURO STOXX 50 Price EUR 2,926.76EUR -32.31-1.09%

Nikkei 225 19,867.12JPY +168.36+0.85%

S&P 500 Index 2,782.71USD +36.15+1.32%

Deutsche Boerse AG German Stock Index DAX 10,561.06EUR -63.96-0.60%

Generic 1st ‘DM’ Future 24,070.00USD +193.00+0.81%

Shanghai Stock Exchange Composite Index 2,996.76CNY +53.47+1.82%

Fears as Nigeria stock investors book almost N1trn loss in 2 days Stories by Iheanyi Nwachukwu

he Nigerian stock market lost about N980billion in just two trading days into this week, fueling concerns over possible recovery in the near term. This historic loss seen within just two days was caused by additional N656billion loss on Tuesday March 10. This negative on Custom Street comes despite fading sense of panic over recent oil price dip. The Nigerian Stock Exchange (NSE) All Share Index (ASI) depreciated by 4.91percent to close at 24,388.66 points as against 2.41percent depreciation recorded the preceding day. The market’s Yearto-Date (YtD) returns currently stands at -9.14percent. “There is a whole lot of confusing presently. Everybody is looking for safe haven. Market has lost over 2percent this morning. Everybody is worried over what the future holds. The possibility of recouping the loss is very remote. Though I believe there is still hope for us here in Nigeria,” said a deal-

L – R: Jude Chiemeka, head, Trading Business Division, The Nigerian Stock Exchange (NSE); Oluwole Adeosun, member, National Council, NSE; Comrade Philip Shaibu, deputy governor, Edo State; Oscar N. Onyema, chief executive officer, NSE; Godwin Obaseki, executive governor, Edo State; Tinuade Awe, executive director, Regulation, NSE and Bola Adeeko, Head, Shared Services Division, NSE during a Closing Gong Ceremony at the Exchange.

ing member on the Nigerian Stock Exchange (NSE). Oil prices jumped by around 4 per cent on Tuesday after the biggest one-day rout in nearly 30 years, as investors eyed the possibility of economic stimulus, although a looming price war weighed on sentiment. US President Donald

Trump on Monday said he will be taking “major” steps to gird the US economy against the impact of the spreading coronavirus outbreak, while Japan’s government plans to spend more than $4 billion in a second package of steps to cope with the virus. Brent crude futures were up $1.44, or around 4 per

NECA’s Network of Entrepreneurial Women celebrates International Women’s Day 2020

ECA’s Network of Entrepreneurial Women (NNEW), a platform established to promote and nurture entrepreneurship amongst women in partnership with the Alive & Thrive Initiative and other stakeholders have held a rally and plenary session to commemorate this year’s International women’s day at the NECA House in Lagos. The 2020 International women’s day with the theme Generation Equality, Each for Equal, draws attention to the efforts individuals can make in building a balanced and just world to bring about gender equality. Speaking at the event, President of NECA Nnetwork of Eentrepreneurial Women (NNEW), Modupe Oyekunle, stated that the occasion

offers an opportunity to draw attention to the challenges of maternal protection at the workplace and improved enabling environment for nursing mothers. Modupe lamented the challenges the organization in partnership with Alive & Thrive has faced in persuading corporate organizations to put in place facilities like lactation rooms in their work place to enable nursing mothers exclusively breastfeed for six months. She noted that this gesture would increase productivity and give them peace of mind. She stated that, “the problem of gender inequality is no longer a women’s issue, but a business one and every one of us has a role to play in achieving a gender balanced Nigeria that does become www.businessday.ng

an enabled society and economic giant”. Keynote speaker and Group CEO of Mandilas, Ola Debayo-Doherty stated that an average woman is naturally gifted in multitasking, organizing themselves, their deliverables at work and at home. Ands this inborn gift is one which has propelled the active role of women globally in being at the fore front of changing societies. She urged women to collectively support one another, grow individual capacity & competence, take chances and maximise opportunities put a stop to the apologetic attitude on expectation of being a woman in getting favorable decisions which would ensure their continued growth in their various areas of engagements.

cent, to $35.80 a barrel by 0903 GMT, after hitting a session high of $37.38 a barrel. West Texas Intermediate (WTI) crude gained $1.52, or around 5 per cent, to $32.65 a barrel, after hitting a high of $33.73. Both benchmarks had plunged 25 percent on Monday, dropping to their lowest levels since February 2016 and

recording their biggest oneday percentage declines since January 17, 1991, when oil prices fell at the outset of the first Gulf War. As the oil price panic seemingly fades, bargain hunters on Custom Street, Lagos Nigeria remained risk averse as they failed to consider taking advantage of stocks

new low. FBN Quest analysts had expected the stock market to witness this same negative sentiment in Tuesday’s session. As at close of trading by 2:30pm Nigerian time on Tuesday March 10, stocks lost N656billion. The value of listed stocks stood at a new low of N12.709trillion as against an open level of N13.428trillion. This poor performance comes amid impressive dividend yields that attract investors ahead of their qualification and closure dates. FDC research analyst, Temitope Olugbile said on Tuesday that the oil market remains tricky. “Though we have seen slight recovery but the price war remains. For now, oil market remains very uncertain and we watch and see what happens in the near future”, she said. The future price of oil according to her remains around $40 per barrel. Stock markets in Europe opened slightly higher following Monday’s plunge, when shares saw the biggest falls since the 2008 financial crisis. London’s FTSE 100 share index opened up 1percent after having sunk 7.7percent in the previous session.

Wigwe says Access Bank thrust for 2020 is to significantly improve cost of funds, productivity, others

ccess Bank Plc recently released its audited full year results for the period ended December 31, 2019. The bank’s gross earnings rose 26percent year-on-year (y/y) to N666.7billion in FY 2019, (FY 2018: N528.7billion), with interest and non-interest income contributing 81percent and 19 percent respectively. Interest Income grew by 41percent to N536.8billion in full year (FY) 2019 (FY’18; N380.9billion), largely driven by the growing efficiency of our enlarged balance sheet. On the other hand, NonInterest Income decreased by 12percent y/y to N129.8billion in FY2019 from N138.2billion in FY2018, driven by our strategic intent to grow income sustainably through traditional banking. Profit before Tax (PBT) for the period was N115.4billion (+12percent; FY2018 N103.2billion) while

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Profit after Tax (PAT) increased by 3percent to N97.5billion from N95billion in FY2018. Return on Average Equity (ROAE) stood at 17.7percent with a Return on Asset (ROA) of 1.6percent in the period. Speaking on the result, Herbert Wigwe, GMD/CEO, Access Bank Plc said: “Access Bank in 2019 completed the merger and business combination of the erstwhile Diamond Bank making the bank the biggest bank in Nigeria by Total assets and number of customers as well as a significant retail footprint and infrastructure”. “The business combination allowed us complement our existing strong wholesale business with Diamond’s extremely developed retail business. In October 2019, we achieved full integration of both bank’s operating system, which further stabilized us for growth across all our platforms. @Businessdayng

“Our financial performance in 2019 was significantly influenced by the merger, as we recorded a modest growth in profitability. However we saw a temporary dip in our metrics as we sought to create excess capacity and IT redundancies to ensure that we continue to provide seamless ser vice to our customers throughout the integration period”, he noted. “Having completed this phase, we are now seeing positive and sustainable momentum across all our business lines. Our thrust for 2020 will be to significantly improve our cost of funds, productivity and efficiency of people and resources whilst optimising our cost. The asset base of the bank remained strong and diversified with growth of 44percent YTD in Total Assets to N7.15trillion in December 2019 from N4.95trillion in December 2018.

Wednesday 11 March 2020

BUSINESS DAY

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Wednesday 11 March 2020

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Tuesday 10 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. 245,262.06 6.90 -9.80 103 7,372,179 UNITED BANK FOR AFRICA PLC 193,226.73 5.65 -9.60 685 166,416,824 ZENITH BANK PLC 409,724.24 13.05 -9.69 451 30,085,909 1,239 203,874,912 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 157,939.29 4.40 -9.28 488 163,963,177 488 163,963,177 1,727 367,838,089 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,106,692.10 103.50 -10.00 35 173,045 35 173,045 35 173,045 BUILDING MATERIALS DANGOTE CEMENT PLC 2,896,886.26 170.00 - 19 106,529 LAFARGE AFRICA PLC. 198,125.88 12.30 -9.89 22 454,847 41 561,376 41 561,376 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 356,008.96 605.00 - 1 18 1 18 1 18 1,804 368,572,528 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 - 3 12,000 3 12,000 3 12,000 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 3 12,000 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 1 480 58,570.07 61.40 - 5 423 OKOMU OIL PALM PLC. PRESCO PLC 44,900.00 44.90 - 0 0 6 903 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,500.00 4.25 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,710.00 0.57 -6.56 29 2,357,140 29 2,357,140 35 2,358,043 DIVERSIFIED INDUSTRIES JOHN HOLT PLC. 217.92 0.56 - 0 0 1,903.99 2.93 - 0 0 S C O A NIG. PLC. TRANSNATIONAL CORPORATION OF NIGERIA PLC 30,892.47 0.76 -1.30 86 4,051,372 U A C N PLC. 20,745.34 7.20 -9.43 33 695,427 119 4,746,799 119 4,746,799 BUILDING CONSTRUCTION ARBICO PLC. 469.26 3.16 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 29,568.00 22.40 - 11 273,768 ROADS NIG PLC. 165.00 6.60 - 0 0 11 273,768 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,390.52 0.92 - 9 81,700 9 81,700 20 355,468 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 - 1 10,000 GOLDEN GUINEA BREW. PLC. 220.45 0.81 - 0 0 GUINNESS NIG PLC 55,197.65 25.20 - 14 6,910 INTERNATIONAL BREWERIES PLC. 170,574.14 6.35 -9.93 6 110,588 264,697.46 33.10 -9.93 95 15,860,034 NIGERIAN BREW. PLC. 116 15,987,532 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 118,800.00 9.90 -10.00 28 618,806 FLOUR MILLS NIG. PLC. 90,208.35 22.00 - 22 204,981 HONEYWELL FLOUR MILL PLC 7,137.18 0.90 3.45 19 3,594,820 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 30,998.43 11.70 -10.00 23 756,963 UNION DICON SALT PLC. 2,993.06 10.95 - 0 0 92 5,175,570 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 12,490.04 6.65 -9.52 30 274,441 NESTLE NIGERIA PLC. 806,131.41 1,017.00 - 50 38,357 80 312,798 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 5,090.94 4.07 - 41 683,243 41 683,243 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 16,080.43 4.05 -8.99 15 144,105 UNILEVER NIGERIA PLC. 60,897.06 10.60 -9.40 38 1,596,904 53 1,741,009 382 23,900,152 BANKING ECOBANK TRANSNATIONAL INCORPORATED 97,252.62 5.30 - 56 593,957 FIDELITY BANK PLC 46,939.17 1.62 -10.00 128 31,928,511 GUARANTY TRUST BANK PLC. 587,152.03 19.95 -9.93 366 54,518,139 JAIZ BANK PLC 13,848.20 0.47 -9.62 15 6,627,427 STERLING BANK PLC. 40,594.49 1.41 -9.93 43 7,267,950 UNION BANK NIG.PLC. 184,916.78 6.35 -9.93 9 161,767 UNITY BANK PLC 5,493.99 0.47 -2.08 22 846,082 19,287.23 0.50 -9.09 54 4,515,288 WEMA BANK PLC. 693 106,459,121 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 7,704.54 0.68 -9.33 56 5,265,076 AXAMANSARD INSURANCE PLC 16,275.00 1.55 -7.74 14 206,048 CONSOLIDATED HALLMARK INSURANCE PLC 2,439.00 0.30 - 2 119 CORNERSTONE INSURANCE PLC 6,628.28 0.45 - 6 132,183 909.99 0.20 - 0 0 GOLDLINK INSURANCE PLC GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,537.92 0.21 -4.55 8 1,347,055 LAW UNION AND ROCK INS. PLC. 4,296.33 1.00 - 8 105,850 LINKAGE ASSURANCE PLC 3,200.00 0.40 - 3 40,000 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 1 35,626 NEM INSURANCE PLC 9,240.88 1.75 1.16 13 535,749 NIGER INSURANCE PLC 1,547.90 0.20 - 5 250,000 PRESTIGE ASSURANCE PLC 2,960.40 0.55 - 2 57,500 REGENCY ASSURANCE PLC 1,333.75 0.20 - 1 100,000 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 -9.09 113 13,635,763 232 21,710,969 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 1,943.64 0.85 -9.57 15 1,232,730 15 1,232,730

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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 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 8,000.00 4.00 - 19 129,900 CUSTODIAN INVESTMENT PLC 32,056.16 5.45 - 13 18,560 DEAP CAPITAL MANAGEMENT & TRUST PLC 495.00 0.33 - 0 0 FCMB GROUP PLC. 29,902.09 1.51 -9.58 116 12,068,678 ROYAL EXCHANGE PLC. 1,131.98 0.22 - 1 86,906 297,815.82 28.35 -10.00 34 3,594,942 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 14,040.00 2.34 - 37 1,017,437 220 16,916,423 1,160 146,319,243 HEALTHCARE PROVIDERS EKOCORP PLC. 2,742.30 5.50 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 710.63 0.20 - 0 0 0 0 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 - 0 0 GLAXO SMITHKLINE CONSUMER NIG. PLC. 4,125.77 3.45 - 50 874,044 3,709.26 2.15 - 5 49,473 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 835.63 0.44 10.00 5 201,577 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 325.23 1.50 - 0 0 PHARMA-DEKO PLC. 60 1,125,094 60 1,125,094 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 1 9,087 1 9,087 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 939.21 0.20 -9.09 27 14,017,600 E-TRANZACT INTERNATIONAL PLC 10,962.00 2.61 - 0 0 27 14,017,600 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,123,311.48 298.90 - 11 1,529 11 1,529 39 14,028,216 BUILDING MATERIALS BERGER PAINTS PLC 1,767.92 6.10 - 5 60,400 BUA CEMENT PLC 1,195,411.70 35.30 - 20 529,650 13,965.00 19.95 -9.93 29 527,489 CAP PLC MEYER PLC. 244.37 0.46 - 0 0 1,769.32 2.23 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 54 1,117,539 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,192.12 2.03 - 0 0 2,465.85 1.40 - 6 37,270 CUTIX PLC. 6 37,270 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 - 0 0 0 0 60 1,154,809 CHEMICALS B.O.C. GASES PLC. 1,685.79 4.05 - 4 1,491 4 1,491 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 1 15,000 1 15,000 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 77.00 0.35 - 0 0 0 0 5 16,491 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 1 40,000 1 40,000 INTEGRATED OIL AND GAS SERVICES OANDO PLC 27,224.79 2.19 -9.88 90 11,869,267 90 11,869,267 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 52,827.21 146.50 - 54 186,606 ARDOVA PLC 19,927.96 15.30 - 3 13,660 CONOIL PLC 11,242.02 16.20 - 14 17,081 ETERNA PLC. 2,634.37 2.02 - 8 34,058 MRS OIL NIGERIA PLC. 4,206.05 13.80 - 0 0 TOTAL NIGERIA PLC. 36,328.84 107.00 - 21 128,930 100 380,335 191 12,289,602 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 - 11 106,400 TRANS-NATIONWIDE EXPRESS PLC. 421.96 0.90 - 0 0 11 106,400 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 - 0 0 TRANSCORP HOTELS PLC 30,781.64 4.05 - 3 506 3 506 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 - 9 77,840 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 431.41 1.00 - 5 38,900 14 116,740 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 513.89 0.31 - 4 160,800 4 160,800 SPECIALTY INTERLINKED TECHNOLOGIES PLC 688.80 2.91 - 0 0 SECURE ELECTRONIC TECHNOLOGY PLC 1,126.31 0.20 - 0 0

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BUSINESS DAY Wednesday 11 March 2020 www.businessday.ng

Coronavirus: China’s risky plan to revive the economy Beijing is targeting a second-quarter rebound but the crisis has exposed the limitations of the system under Xi Jinping Tom Mitchell, Christian Shepherd and Sherry Fei Ju, FT

hinese leaders used to worry about when economic growth might slip below the level of 6 per cent to avoid job losses and social unrest. But now, as they face the prospect of the first quarter of zero or negative growth since the chaos of Mao Zedong’s cultural revolution, they are closely watching the numbers of trucks rumbling in and out of places such as Qian’an. The district is home to some of the largest mills in Tangshan, an industrial hub east of Beijing in Hebei province that produces about 10 per cent of the country’s steel and is crucial to global markets for the metal. Trucks enter Qian’an carrying coking coal and iron ore, and exit loaded with steel. If the district’s mills can raise production quickly — as extreme measures taken to contain China’s coronavirus epidemic are eased — it will suggest that the short, sharp shock to the world’s secondlargest economy since January might well be followed by a second-quarter rebound — the much vaunted “V-shaped recovery”. Alternatively, the government’s efforts to restart activity in places such as Qian’an could lead to a rise in new infections, which would then lead to new containment measures and an even greater economic aftershock. President Xi Jinping doubled down on this gamble on Tuesday, when he made his first visit to Wuhan in central Hubei province, where the epidemic originated in December. These two starkly different scenarios explain why large trucks are about the only things entering and leaving Qian’an freely. Owing to its critical importance to the steel industry, the district has been placed under some of the strictest quarantine measures outside Hubei province. Supermarkets in Qian’an are closed and all residents have been asked to regularly report body temperatures and flu-like symptoms. Steelworkers cannot leave their mills and family members cannot visit them. With the exception of one mill that recently suffered a coronavirus outbreak, after one of its employees was infected at a village banquet, traders say all industrial firms in Qian’an are back up and running, albeit below normal levels of production. The question now is how much steel can they sell. “There is no demand, especially in northern China,” says Zhang Ying, a trader who regularly deals with Tangshan’s mills. “The best we can do is sell a very small portion of the steel to

southern regions or some priority construction sites that are up and running.” The disease’s transformation into a global epidemic — with case numbers climbing rapidly in countries as far afield as South Korea, Iran, Italy and the US — means China’s economy might recover only to discover that many of its largest trading partners remain ill, damping demand for its exports. From a political perspective, it will be impossible for Mr Xi, China’s most powerful leader in decades, to disown the economic consequences of the coronavirus calamity. Mr Xi said he was in charge of the epidemic response as early as January 7 — two weeks before its seriousness was first publicly recognised by the ruling Communist party and central government officials. That, in turn, has raised questions about the vulnerability of China’s increasingly authoritarian party-state. “The party propaganda ma-

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From a political perspective, it will be impossible for Mr Xi, China’s most powerful leader in decades, to disown the economic consequences of the coronavirus calamity

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In a short-term downturn, capital expenditures are only delayed. But some spending, such as lost box office revenues over the Chinese new year period — $3.9m this year compared with $1.5bn in 2019 — will never be recouped chinery has unwittingly admitted that Xi was responsible for the fiasco,” says Steve Tsang, head of the China Institute at Soas in London. “The changes Xi has made to the operation of the party-state have not strengthened its capacity to act in order to pre-empt a crisis. [Instead]it has made it easier for a crisis to emerge as it all depends on Xi understanding the situation properly and making the right call at critical moments.” An adviser to senior officials in Beijing agrees. “This virus crisis was really 70 per cent human error [attributable to] the leadership,” he says. Some economic projections make sober reading for China’s leadership. Bert Hofman, director of the East Asian Institute at the National University of Singapore, predicts that “first-quarter growth year on year may well be negative, between -2.0 and -6.5 [per cent]”. Such a sharp downturn, if it continues beyond the first quarter, could in turn imperil what the Chinese government has long seen as the principal function of strong growth in gross domestic product — urban job creation, targets for which are typically set at 10m or more new jobs each year. “Services and consumption

now contribute more than half of China’s GDP,” says Mr Hofman, a former China country director for the World Bank. “The economy is therefore more sensitive to a drop in domestic demand resulting from the epidemic and the government’s control measures. It is harder to make up lost ground in services than it is in manufacturing.” In a short-term downturn, capital expenditures are only delayed. But some spending, such as lost box office revenues over the Chinese new year period — $3.9m this year compared with $1.5bn in 2019 — will never be recouped. Amid signs that Beijing’s public health measures are beginning to contain the outbreak, officials from Mr Xi down are accentuating the positive. “The fundamentals of the economy will remain strong in the long run,” Mr Xi assured the presidents of Chile and Cuba during recent phone calls. When the National Bureau of Statistics released a record low figure for its official purchasing managers’ index on February 29, it added — in an unusually political aside — that “under the party’s firm leadership with Xi Jinping at the core, the virus is coming under control . . . and market confidence is steadily

recovering”. In a widely circulated report on Chinese social media, Zhang Anyuan, chief economist at Citic Securities, criticised analysts who have projected that first-quarter growth might only fall to 4 or 5 per cent year on year. “They look at the heavens to divine the future and assert that [the economy’s] medium and long-term outlook is still good,” Mr Zhang wrote. “If such headslapping political declarations become the basis for strategic decision-making, they will cause as much harm as the early misjudgments [about the seriousness] of the epidemic.” “How is it possible”, Mr Zhang added, “for the economy to achieve positive growth in the first quarter when more than 1bn people stayed at home for nearly a month?” Aside from the NBS’s February PMI figure, and a 17 per cent annual fall in the value of JanuaryFebruary exports reported by China’s customs administration on Saturday, most official data for the period will not be released until later this month. Until they are, optimists and pessimists alike can pick and choose from a host of contradictory anecdotal information — as well as various ad hoc indicators of economic activity — to bolster their arguments. Government officials typically cite data suggesting that the vast majority of companies have returned to work. But analysts caution that the figures reflect only the number of companies which have approval to operate, meaning that many businesses may still be operating at far below their normal rates. According to a China Merchants Bank index that uses satellite imagery to track night-time activity, as of Monday just under 60 per cent of 143 major industry sites across the country had resumed operations. G7 Networks, a start-up that collects GPS data from about 20 per cent of China’s cargo vehicles, has been releasing a daily tally that shows a rapid recovery in full-truck deliveries usually made by major companies, but only a gradual uptick for shared consignment shipments, which tend to be used by smaller businesses. Compared with early February when this data looked “extremely bleak”, big deliveries to factories and construction sites have rebounded to about 60 per cent of peak November levels. But smaller shipments are only running at about 26 per cent “not because there are no drivers, but because there are no orders”, says Sun Fangyuan, a G7 market director, adding that consumption had started to pick up in the past week.

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