BusinessDay 12 Aug 2020 by BusinessDay

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news you can trust I * *WEDNESDAY 12 AUGUST 2020 I vol. 19, no 626

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Lagos targets local production of 1m electricity meters within 4 years

… receives over 100 designs for smart meter Hackathon programme JOSHUA BASSEY & ISAAC ANYAOGU

agos State government is seeking partnerships that will deliver the local production of between 600,000 and 1 million electricity meters to meet the needs of citizens and address challenges Continues on page 30

Piracy could worsen on Nigerian waters as minister ignores Senate directive on anchorage contract ISAAC ANYAOGU

iracy and criminal activities in Nigeria’s territorial waters, which cost an estimated $2.8 billion in 2018 according to the United Nations Office for West Africa and the Sahel, could worsContinues on page 31

President Muhammadu Buhari (r), and Vice President Yemi Osinbajo (l), during a virtual meeting of the Nigerian Governors Forum Security Committee with the President and Heads of Security Agencies at the Presidential Villa in Abuja, yesterday. NAN

In numbers, how Nigeria would look with higher COVID-19 testing With 1.9m cases would rank 4th globally

LOLADE AKINMURELE

f Nigeria did as many tests as Brazil, nearly 2 million people in Africa’s most populous nation may have been infected with the virus, which is more cases than Spain, Italy and the UK combined. When Brazil, the most popu-

lous country in Latin America, waltzed into second spot on the list of countries with the most cases of the coronavirus, it cast an uncomfortable spotlight on Nigeria where low testing rates may be masking the number of infected persons. One of the worst-case scenarios of the virus is unfolding in Brazil, which had report-

Higher than Spain, Italy, UK combined

ed over 3 million cases and 101,857 deaths as at August 12. Between late May and midJune, the country galloped past Spain, Italy, and the UK in overall cases and total fatalities. With Brazilian authorities lifting quarantines despite rising cases, many health experts say it is conceivable that when Covid-19 finally recedes, the densely

populated country of 210 million people, where poverty is rampant and the enforcement of safety measures like social distancing is almost impossible, will have been hit harder than any other country. Brazil’s similarities with Nigeria suggest the latter should Continues on page 30

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news Commuters to enjoy shorter travel time as GBfoods delivers N5.5bn factory in Ogun GBfoods rich global practices and make sure we were able to meet regional experiences to support the demands of our customers, Oshodi-Abule Egba BRT begins operations Daniel Obi consumers growing needs, whilst not only in Nigeria but also in JOSHUA BASSEY

housands of commuters on Oshodi-Abule Egba route are in for a shorter travel time following the flag off of the 13.65km Bus Rapid Transit (BRT) corridor. The Lagos State government is deploying some 550 high and medium capacity buses on the road just the governor, Babajide Sanwo-Olu says his administration is determined to actualise the state’s integrated transport management system planned to move passengers seamlessly on road, waterways and rail. Speaking at the official launch of the BRT corridor and its e-ticking platform on Tuesday, Sanwo-Olu, said that the 13.65 kilometre journey to Abule-egba from Oshodi, which use to take over an hour would now be completed in less than 30 minutes. According to him, the event fulfils his administration’s pledge to significantly improve traffic management and transportation system in the state. “This is the very first of our six-point development agenda encapsulated as T-HE-M-E-S. This administration made the pledge knowing

that you, our people, are the main reason we have been entrusted with the management of your commonwealth”. “Although our promise was to deliver this project in May this year, it had to be shifted forward due to the disruption brought about by Covid-19”. He noted that the bus transit system has proven to be an effective means of achieving a fast, reliable and efficient movement of large number of people across the state. “Since March 2008, when the first phase of this new initiative was launched, thousands of Lagosians have continued to enjoy improved travel experience along the designated routes every day. In order to ensure that the BRT service is accessible to greater number of our people and in line with the Lagos state strategic transport master plan which seeks to integrate road, water and rail transportation, new corridors and routes are being opened,” he said. Sanwo-Olu said that the project was significant because of its immense benefits to Lagosians in the different communities it straddles and to visitors. “This new BRT corridor will bring great relief to over 60,000 commuters who will use this www.businessday.ng

facility daily. Travel time, which is estimated at an average of two hours during peak periods, will be significantly reduced to an average of about thirty minutes. This will translate to improved health of our people, a safer environment, and increased value of socio economic activities in our state,” he added. Managing director of Metropolitan Area Transport Authority, (LAMATA), the regulators of the BRT scheme in the state, Abimbola Akinajo said that the project attested to the commitment of the government to live up to its promise to reform traffic management and public transportation, which is the first pillar of the THEMES agenda of the current administration. “It is a major link for millions of Lagosians who commute in and out of Alimosho, Egbeda, Ijaiye, Iyana-Ipaja and other places to other parts of Lagos or to neighbouring Ogun State and the Republic of Benin. “This new BRT corridor will bring about an improved mobility with the capacity to move over 350, 000 passengers per day, reduce travel time by at least 35 percent, enhance social and economic development along the corridor and enhance the projection of Lagos as a world class society amongst others,” she said.

Bfoods says it has completed state-of-art production factory in Sango, Ogun State for Bama Mayonnaise production, a foremost mayonnaise brand in Nigeria. The factory which will support the local manufacturing of Bama mayonnaise, with its original recipe successfully rolled out its first batch of products to the Nigerian market recently. This investment is an added assurance of GBfoods’ commitment to continually contribute to Nigeria’s economic and social development through the localisation of its products, the company said. It is contributing to the preservation of forex, locally sourced raw materials and employment. According to the company, the “factory draws from a blend of

highlighting the opportunity for their communities to be a part of the long-standing heritage. This will, in turn, make Nigeria a key export hub for Africa and will further lead to the creation of jobs and the development of human capital in the country”. Speaking to journalists at a webinar conference, the CEO of GBfoods Africa, Vicenç Bosch reiterated Bama’s commitment to maintaining its original recipe developed over 80 years ago in the United States of America while being produced in Nigeria. He said, “The tradition and origin of American recipes is what makes Bama unique and superior in comparison with our competitors”. Vicenç Bosch further stated “Our priority when building this international standard production facility in Nigeria was to

other African countries”. In addition to the new factory, the company has also unveiled a new packaging design, featuring a quality stamp to reiterate the product’s category-leading position, and to emphasize its superior quality and taste to consumers. With the quality stamp feature, customers are now able to identify and purchase original Bama products. The new design stays true to the corporate colours, brand characters, and label art that are synonymous with Bama Mayonnaise while making the shelf presence and overall impact much stronger. Bama’s superior formula and product have been uniquely put to the test, delivering a smooth texture and mouth-watering creamy experience to deliver the taste which spreads moments of love to all its consumers.

Nosak group appoints Oloriegbe GMD SEYI JOHN SALAU

anagement and board of Nosak Group has announced the appointment of Thomas Oloriegbe as the new group managing director (GMD). He brings on board his wealth of experience and vast

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knowledge along with his exceptional track record of immense success in manufacturing operations. As the new GMD, Oloriegbe will oversee the business operations of the group while providing strategic guidance and direction for the various businesses. He will be saddled with the responsibility of driving concerted efforts towards @Businessdayng

attaining the group’s short and long-term goals. Prior to his appointment, Oloriegbe served in the capacity of the group chief operating officer (GCOO) for a period of four years, where he was responsible for coordinating administrative and operational functions of the various strategic business units.

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Our economic crisis: Use N200 billion to generate N18 trillion revenue

Franklin Ngwu

ith the increasing negative impacts of COVID-19, it is becoming clearer that Nigeria is really in an unprecedented socio-economic and health crisis. Everything seems to be going south- unemployment, inflation, diaspora remittances, poverty, insecurity, foreign reserve, investments, exchange rate and firms’ profitability. In the revised 2020 budget, not only has projected oil production been reduced from 2.18 mb/d to 1.7mb/d, the oil price has also been adjusted downwards from $57/bb/l to $30/bbl. Relatedly, while revenue projection has been reduced from N8.42 trillion to N5.08 trillion, the deficit has increased from N2.17 trillion to N5.2 trillion. However, of the key items that have been adjusted, expenditure received the lowest reduction from N10.59 trillion to N10.27 trillion while the exchange rate moved from N305/ US$ to N360/US$. To address the multiple challenges, the federal government has been responding through different policies. These include the fiscal stimulus of N2.3 trillion to execute the National Economic Sustainability Plan, increasing domestic and external borrowing, intensifying tax revenue generation, refocusing recurrent expenditure among other factors. While these policies and actions are commendable, they are

insufficient if we want to grow from our revised 2020 GDP growth of negative 5.4 percent to the positive 2.4 percent projected in 2021 and beyond. More creativity and effective leadership are required. To get a better idea of the complexity of the challenges we have, it might be better to use a risk approach. Clearly, Nigeria is presently facing four major types of risk- economic, health, insecurity and emerging political risk with our economic outlook and outcome from 2021 and beyond dependent on the way we handle these risks in terms of our mitigation strategies. On the economic risks, the key challenge is how to craft robust fiscal and monetary policies to diversify the economy and increase revenue. Using the National Economic Sustainability Plan with a focus on Agriculture, it is very possible to permanently generate over N18 trillion revenue every year. Please note that I mean over N18 trillion which is almost double of our 2020 budget of N10.27 trillion. This will address our revenue problems; reduce insecurity through the millions of jobs that will be created and lead to a better exchange rate due to the massive foreign revenue that will be generated. In the National Economic Sustainability Plan, the budget for Agriculture is N634,982,256,367.46. Interestingly, with good vision, just about N200 billion of the N634,982,256, 367.46 can be used to permanently and positively change the course of Nigeria on many fronts. All that will be required to do is to clearly identify about ten economic trees that can generate about N25,000 annual revenue per tree and then mandate each state to plant a minimum of 20 million trees. Examples of such trees include Palm, Coconut, Soursop, Avocado, Guava and Bitter Kola. At a subsidised rate of N250 per tree, the 20 million trees will cost each state in Nigeria about N5billion and N180

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As the benefits of the tree planting suggestion will take about three years to manifest, there is also an urgent need to pursue other immediate strategies to enhance our preparedness and resilience amidst COVID 19 challenges

billion for the 36 states. Using improved seedlings that fruits after about three years means that each state in Nigeria will be able to generate about N500 billion every year which means additional revenue of about N18 trillion every year for Nigeria. With such an amount every year, it means that we can generate almost double of our total budget of about N10.27 trillion from Agriculture and precisely from two to three economic trees. In addition to the direct revenue that can be generated from selling the outputs as just raw materials, the value chain will be a magnet to foreign investors leading to more spill over opportunities and investments. While Indonesia made about $18.4 billion from palm oil (about N7.2 trillion) in 2017, Nigeria’s encumbered 2020 federal budget is only N10.27 trillion! In the same vein, while India’s coconuts are valued at about $10 billion, Philippines $6.7 billion and Indonesia $4.5billion, the three countries account for about 60 percent of the $35.6 billion global coconut market. So, while Indonesia makes about $23 billion from just two economic trees- coconut and palm trees, Nigeria borrows $3.5 Billion from IMF and begging World Bank for an additional $1.5 billion. As the benefits of the tree planting suggestion will take about three years to manifest, there is also an urgent need to pursue other immediate strategies to enhance our preparedness and resilience amidst COVID 19 challenges. First, we need to pursue a unified exchange rate that will likely result in about N400-N420 to $1. This can be achieved through the average of the multiple exchange rates we have and deliberate mopping up of the excess liquidity in the market. With such move and proper forward guidance policies from key regulatory agencies such as CBN on key issues such as interest rate and inflation, a

better stability will be achieved. Second is the urgent need for deliberate efforts to reduce the cost of governance. Its urgency is like yesterday. We cannot in the face of an overwhelming crisis such as COVID 19 continue to run a very extensive and expensive system of governance as we currently do. The need to fully implement the Orasonye Report cannot be over emphasised in line with the saying that leading by example is an excellent way to teach, President Buhari needs to exhibit courage and urgently reduce the number of ministers and aides to serve as a reference point for others to follow. This is also the case with the high cost of running the National Assembly. With courage, the President needs to clearly agree and pursue the necessary constitutional amendments and persuasions required to make our National Assembly work a part time one with significant reduction in the number of National Assembly members. A suggestion will be to have only one chamber (upper or lower) with each state having only three members. Third is the need to pursue devolution of powers particularly transferring some items from the exclusive legislative list controlled by the federal government to the concurrent and residual lists controlled by the state and local governments? This will help liberate our economy enhancing more private sector participation through the reduced regulation that can be achieved. Fourth and for immediate liquidity is the need to sell many government assets that are idle and wasting. As they say, where there is a will, there is a way! Dr. Ngwu, is an Economist/Associate Professor of Strategy, Corporate Governance & Risk Management, Lagos Business School and a Member, Expert Network, World Economic Forum. E-mailfngwu@lbs.edu.ng.

The one language company

ctivity based approach to strategy demonstrate that everyone in the organisation is a part of strategy - Michael E Porter A study done by Maracon indicated that less than 20 percent of well-formulated strategies are executed successfully and, on average, firms deliver only 50 percent of the financial performance their strategies promise. If a well formulated strategy is not executed how can an organisation expect superior performance? A similar study carried out by Effectory with over 300,000 responses worldwide gives us an idea to what the problem might be. Less than 50 percent of employees say they understand their firm’s strategy. In another study conducted by McKinsey only 34 percent of 772 directors believed their boards understood their strategy. Now, no matter how good employees may be, one thing to understand is that they are not mind readers. A strategy not understood can in no way be executed effectively. Also if the board does not understand the strategy how can they provide the necessary support needed for a successful execution of the strategy? Except everyone in the organisation understands and speaks the same language, that means understands and believes in the strategy, it cannot be effectively executed. A company where the strategy is understood and believed in by everyone is called ‘the one language organisation’ and effective execution is limited to the extent to which everyone in the organisation speaks the same language. Solving execution problems therefore is about solving a language problem.

When Michael Porter introduced the value chain, which is an activity-based approach to strategy, he aimed to demonstrate that everyone in the organisation should be a part of the strategy irrespective of their function. His work implied that superior performance is a product of linguistic unity. If linguistic unity is so important just why does not every organisation ensure that they are unified in language? There are five reasons why this happens. The first reason is that most executives are clueless on the subject of strategy. Irrespective of the wide popularity enjoyed by strategy in business literature it remains a little understood concept for many executives. Values, vision and mission are all mistaken as strategy. Model and tactics are all lumped together as strategy. Strategy is the configuration of activities in a way it distinguishes a firm. It is the positioning of a company in its competitive environment in a way that gives it an edge over the competition. This simple misunderstanding has cost lots of organisation in wrong investment decisions. The second reason is the sacred respect accorded to the strategy by executives. Most senior executives are scared that communicating their strategy will expose them to strategy theft. But come to think about it, such executives should understand that they stand a more serious problem than strategy theft. Preserving your strategy so that your competitors don’t know about it and at the same time shutting your people out means it will not be executed and that means you will at best play along others as a corporate mediocre. How often have you read about the strat-

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egy of Google, Apple, Bulberry and Nike? For example it took US car manufacturers many years to get good at Toyota’s lean manufacturing methods, even though Toyota willingly gave factory tours to its rival executives. More recently, traditional companies continue to struggle to adopt the digitally powered methods of online leaders like Amazon.com and Google, although the outlines of these methods are well known. What does it show? Communicating your strategy doesn’t compromise your position if you really have a strategy (read my article on Nigerian companies rarely have a strategy) The third reason (and it’s a sad one) is that executives are not committed to their strategy. Strategy is about choices and sometimes choices can be very expensive. When the consequences of the choices you make begin to close in on you the chances of shifting your position increases except if you are truly committed to the decision on where and how to play in the market. At such moments, executives get into a lot of trouble in their bid to meet short term targets. They become occupied with moves like outsourcing, diversification and restructuring even when such moves lack alignment with their strategy that they quickly look sight of their choice. This usually happens because strategy is seen by many managers as how to increase shareholders’ return. So everything that helps us meet that goal today is a good strategy, they think. But that is also why companies are simply struggling along rather than thriving. High performing companies do not change their strategy like diapers because it often comes with a steep price. By focusing on the

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Brian Reuben

choices you have made about where to play and asking yourself hard questions about how to best keep yourself in the game you deepen rather than shift your position. By realising that your decisions shape the destiny of your company you realize that products or segments do not necessarily determine outcome but the configuration of activities within your value chain. Staying true to your strategy helps people in the organisation learn and speak the same language. To take the “One Language Company” FREE assessment test kindly email admin@ brianreuben.com Dr Brian Reuben is a thought leader on the subject of Strategy in Nigeria. He speaks at business events globally. He has written over 150 articles and facilitated over 200 strategy training programs for senior executives in diverse industries. He has advised and mentored senior executives in several organisations including Africa-Reinsurance Corporation, Savile Energy Luxembourg, Department of Petroleum Resources, Trident Energy United Kingdom, BusinessDay, and Dolphin Telecom among others.

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Recovery: Ending the lip service to cost containment in Microfinance (2) Small Business handbook

Emeka Osuji

e c o n cl u d e t h e discussion of cost containment today. The idea of costs, and how to keep them in check, is age-old but still very hot and trending. The pandemic has claimed many lives and wrecked the global economy. Close to 20 million people have been infected and the daily rate of new cases is put at about 250,000. In Nigeria, the challenge of balancing health and economic security is still in the front burner, with the citizens

divided between full reopening of the economy and the current partial lockdown. Clearly, the pandemic is not going away in a hurry, and even if it does, its impact will be with us for at least the next half a decade. Over much of this period, revenues are not going to return to pre-COVID 19 levels, especially in the near term. At best, they will begin to crawl back up but very gradually. Clearly, for as long as the lockdown continues, things will remain difficult and cash flows will not return. Unfortunately, costs do not get locked down, and they don’t go south in a hurry. If anything, costs tend to rise with the lockdowns as avoidable costs, like continuous use of generators and itinerant trips to the kitchen, happen more often when people are locked up at home. In good times, people are busy in the office or on the road. Many people, out of the lack of time and work pressure, do skip some meals in a day. They may not have time for lunch and may nibble on whatever they find in the office. However, once locked down, every meal becomes unavoidable. People even do more than three square meals a day, just because they are close to the kitchen, and the fridge in the bedroom has become a regular place to visit. These events are simply an invitation to cost escalation, and reinforce the urgent need for cost containment. Working smart, and skipping all avoidable costs, should be the guiding principle of all entities, public and private, at times like these. Recently, one of the federal agencies in the aviation sector claimed to be paying N1.5billion as staff salaries every month. Of course, in Nigeria, people get paid for staying at home, and this culture continues to be on display even as many workers stayed at home. It is likely that many organisations not only keep paying basic salaries, they also paid transport and lunch allowances. I bet you in organised systems some of these allowances will go, even if you have to return it to the people by another name – say palliative.

This is how they get money to support those out of job in the form of unemployment benefits. The burden of the high wage bill was worsened by the pandemic as no cash was coming in. The question is: who are the workers in this agency knocking out N1.5billion a month as salaries, even in a pandemic lockdown? How many of them are real workers, and how many are ghost workers included in the payroll by the top executives of the company? In Nigeria, all you hear is that an agency has cleared all the ghost workers in the payroll but nobody ever asks the critical question: how did the ghost worker obtain the relevant documentation needed to get on the payroll in a government department. Isn’t that curious if not strange? Since we cannot punish ghost workers, it makes a great deal of sense to fish out those who put them on the payroll. It’s wrong to just eject the ghost and leave the guide that showed it the way into the payroll. As for operators in the microfinance sector, cost containment should be a way of life. Operating in an environment of virtual absence of functional public infrastructure, and also dealing with the neediest group in the society, should never be mistaken for a tea party. Cost centre managers must therefore understand the dynamics of effective cost containment. There are five elements to manage, if costs are to be kept under effective control. First is to avoid impulsive spending. Managers must make sure every project, for which resources must be allocated, must get into their spending plan. Projects must be clearly identified before costs are incurred on them. Resource planning helps an organisation to get a handle on its costs. This is why entities make budgets. It enables them to establish the need for a particular cost item. Once a need has been properly established, the next important thing to do is to estimate the approximate resources to be expended on it. Based on the established need for a project and the estimate of costs

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We can reduce it by a deliberate pursuit of low cost funds, relative to expensive term deposits. A good segmentation of the market and blending of high and low cost deposit liabilities could help in this regard

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

Why all poor farming results now

hy are differently poor results and low populace engaging in the farming activities? This is all due to the neglect of the Government in promoting and in the development of the Agricultural Sectors, even making and looking at agricultural practices to be attractive and lucrative, in making people go to the farms. Even though the populace are seeing agricultural practices as a difficult task and using poor crude implementation for cultivation and no advanced technology and the poorly distribution channels and the cumbersome in transportations, poorly post harvesting, preservation technology and management practices, with the poor extensions services

delivering systems. More of this is the bone of contention’s issues that is mitigating in the development of the Agricultural sectors and resulting in poor farming results. Enhancement of the livestock sector by addressing animal diseases It is very important to eradicate the various Animal Diseases, which are ravaging the livestock Units, and Hindering, Production, Marketing, Distribution Systems, even affecting the demands of Farm Labour, Meat distributions in most of the farming communities. The various widespread of an Animal Infectious is being common in the Sheep, Poultry , Cow , Rabbits , Snailery and Goats Productions, presently

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the prevalence posed, a serious threat to food industries and the various social – economic consequences and affecting the different livelihoods, Security Challenges, with the decreasing of people going to livestock productions. The various infectious and devastating disease are also noted in small ruminant during the pregnancy periods, production, selling stages, maturity stages, marketing, distribution, transportation’s, growing stages, this issues is farfetched and it is being discussed across the world and its should be everyone life concerns and timely addressing, the solutions and by providing a quality services, by the Veterinary Doctors and the establishment of a Vaccination

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attaching to them, a budget will be drawn up. Spending is usually controlled by budgets, which help to keep things in focus and in relation to revenue. Allocating costs to budgets creates a new responsibility: the need to keep an eye on the cost to ensure it behaves according to plan, and to correct any inconsistent movements in it. Cost control is an important activity in cost management. Effectively handling these four elements of cost management will slow down the tendency of costs to run away from plans. Accordingly, operators must do all of four things, including reviewing and ensuring that they are operating with the most appropriate business model. The model in use has impact on cost and efficiency in microfinance because it impacts on staff numbers and relevant efficiency ratios. They must also deliberately focus on cost of funds with a view to reducing it drastically. Banks buy and sell money, essentially, and profit is the difference between cost of sales and revenue from sales. Interest expense is a key element of the cost of sales. We can reduce it by a deliberate pursuit of low cost funds, relative to expensive term deposits. A good segmentation of the market and blending of high and low cost deposit liabilities could help in this regard. Improved risk profile will put a downward pressure on costs, even from the point of view of premium paid for deposit insurance, Cost segmentation is also very important because it allows operators to focus only on the most important costs. Frills and unnecessary costs are to be avoided including new branches and equipment that are not immediately needed. Capital projects add to the capacity of the entity to produce more income and hence profits. However, they are not to be embarked upon when cash flows have vaporised and a lockdown is in force.

MICHAEL ADEDOTUN OKE

Center and with the call for the supports of the International charities and humanitarian organisations, to start campaigning for the provision of Vaccination Centers for routine, Animal emergency life responds, quick Interventions systems and funding and supplying of drugs.

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Why it matters Character Matters with Daps

Dapo Akande

n a world where societies are continuously looking to be more inclusive, ours seems to be going in the opposite direction. Following the recent Black Lives Matter demonstrations that seemed to engulf the whole world, organisations and major corporations in the US have started working on ways to include more blacks in a way that all Americans will have a sense of belonging. Some have introduced more inclusive company policies while others are sponsoring programs to better position members of the black community to take advantage of business opportunities. Meanwhile, we live in a nation where in a cabinet of forty three government ministers, only seven are women. In a world where we have a fortyyear old woman, Jacinda Arden, proving herself a most competent Prime Minister of New Zealand, we’re yet to produce the first female State Governor after twenty one years of uninterrupted democratic governance. And in case you’re wondering, Arden became Prime Minister at just thirty seven years old. I don’t think we need to say too much about the German Chancellor, Angela Merkel, who has been leading one of the world’s economic powers (and by far the most powerful

European nation) for the last fifteen years. Permit me to also mention the wheelchair bound Governor of the richest state in the world’s wealthiest country, Gregg Abbot. Mr Abbot, Governor of California, has had to make use of a wheelchair since he suffered a freak accident while jogging about three and a half decades ago. A tree fell on him during a storm and paralysed him from the waist downwards. This didn’t discourage him from running for Governor and neither did it stop him from winning. I think that says something about his society; but here we are, struggling to appoint just seven women into the country’s central government. This doesn’t give us too much to feel proud about. I came across the amazing story of a blind South Korean percussionist the other day. His name is Kyungho Jeon. It was incredible watching this chap play so superbly even though he couldn’t physically see what he was playing. He said it has been his long-time dream to one day play in an orchestra, but how would he follow the lead of the conductor, like the rest of the orchestra would? No matter how beautifully he plays, how can he possibly play in harmony with the other instrumentalists? And so his dream has remained just that, a dream. But it’s looking like it may not remain like that for much longer. The Haptic Baton was developed by a musical designer, Vahakn Matossian and his father, a composer. They were moved to invent this device when they heard the story of the young Korean man and his unfulfilled dream. The baton used by an orchestra’s conductor works with two bands that the musician wears; one on each of his thighs. The bands have a vibrator in them so as the conductor waves his baton; the bands sense it and instantly vibrate.

As the conductor switches the baton from one hand to the other, so does the vibration move from one thigh to the other. This enables a blind musician to follow the lead of the conductor even though he can’t see the conductor. Quite incredible, isn’t it? With this invention, the ceiling that had been placed above this blind South Korean and anyone else in the same boat as him has been shattered. Previous limitations to his ambitions, dreams of self-actualisation and society saying, “this is how far you can go in life” have been stripped away. All because some people out there thought it unfair that the composition of orchestras don’t truly reflect society. They refused to accept the status quo which says some people should be precluded because of their peculiar circumstance and not because they’re not good enough. These men cared enough to take it upon themselves to find a solution that would help bring into the fold, those whom circumstances had hitherto disenfranchised. For the last five years, our President has been criticised for making lopsided appointments which appear to grossly favour a particular section of the country. Despite several appeals made by well-meaning Nigerians, the unevenness of the appointments just seems to be increasing. No reasonable man will dispute the fact that the majority of the appointees are more than qualified but what about the optics? For a country whose progress has for decades been stunted by stifling tribal sentiments, I sincerely believe all should be done to make everybody feel they belong. If we’re to look at Rwanda, where incidentally, 50 percent of the government ministers are women, we will find that it’s against the law and even labelled “divisionist” to claim your tribe before your nationality.

‘

Let me ask you this and I would like you to please answer honestly. If the President was to have a Rawlian “veil of ignorance” placed over his head, rendering him temporarily ignorant of his background and place in society before making his appointments, do you think he would appoint the same people?

Inclusion seems to be the name of the game there and going by all indices, it certainly appears to be working for them. Ethiopia is the only other African country that can boast of as many women with ministerial portfolios. Is it a coincidence that in a continent where the majority of the countries are flailing economically, the performances of these two represents the very few beacons of hope? Expectedly, some may put up the very valid argument that a “tribal blind” person shouldn’t be at all concerned about where the President’s appointees hail from and like I said, it would be a valid point. However, let me ask you this and I would like you to please answer honestly. If the President was to have a Rawlian “veil of ignorance” placed over his head, rendering him temporarily ignorant of his background and place in society before making his appointments, do you think he would appoint the same people? I believe I can leave you to answer that all by yourself. There’s no gainsaying though, that the day Nigerians from all walks of life, of all religions and all tribes, agree that they are at last enjoying the pleasant fruits of good governance, that’s the day they will stop worrying about where their leaders hail from. All round good governance will automatically provoke a sense of belonging and from that point onwards, no one will really care where any leader comes from anymore. Changing the nation...one mind at a time Akande is a Surrey University graduate with a Masters in Professional Ethics. An alumnus of the institute for National Transformation and author of two books; The Last Flight and Shifting Anchors. Contact: dapsakande25@gmail. com

Building power plants in a regulated price regime Nigeria’s power generation dilemma

t is common sense that you cannot sell a product that you don’t have and cannot get from any available seller. Similarly, as Nigeria’s 11 Distribution companies (DisCos) increase metering of the population and repair their aged infrastructure, as the Transmission Company of Nigeria (TCN) improves beyond its current wheeling capacity of 5,400MW, and as gas supply increases, generation capacity will quickly become a bottleneck in spite of promises of 25GW by 2025. We have heard promises of an improved Nigerian Electricity Supply Industry (NESI) before, but for one reason or another, they never come to pass. Generation companies (GenCos) are literally the “engine room” of the power value chain, and strategically reside in the middle of the chain. For this engine room to work optimally, gas producer and transport to the left must reliably supply gas fuel as needed without disruption, while transmission and distribution to the right must evacuate generated power to create room for more power to flow. Clearly, without GenCos working optimally and with the capacity to reliably produce power in excess of what is actually needed by the DisCos, the country will run into deficiency as the gas side, transmission and distribution side get fixed. Nigeria’s current installed capacity of 12,552MW generating capacity is well below the standard of a developing nation, and this primarily, amongst other factors outside the ambit of this article ensures that it remains a consumer nation instead of a producer nation,

which it should be aspiring to. For over a decade, installed capacity has remained relatively flat with a sustained actual generation of less than 4,000MW, which is a meagre 31 percent of the installed capacity. In a July 2016 report titled “Powering Nigeria for the Future”, PWC stated that Nigeria’s annual per capita power consumption in 2015 was 151kWh. Average power utilization of 8 developing countries including Sri Lanka at the lower end (588kWh), Vietnam (1,465kWh) and Egypt (1,877kWh) in the middle of the pack, and Ukraine at the top (3,234kWh) showed that Nigeria should have a power consumption of at least 1,213kWh. Factoring population growth at the time of the report, it was expected that the average per capita power consumption of the 8 countries would grow to 1,818kWh by the year 2025, with Nigeria’s expected to increase to 433kWh. The expected growth in Nigeria’s number is so far not happening, even though its population has grown from 182million in 2015 to over 200million in 2020, further reducing the per capita power available to the population since the actual power available has not grown since 2015. Over a 15-year period from 1995 to 2010, Vietnam grew its per capita power consumption from 159 to 1,035kWh, representing an increase of 6.5times. Between 2005 and 2015, Vietnam with a population of 93.4million increased their generation capacity from 12GW to 40GW, i.e. a 236 percent increase. Vietnam’s GDP per capita increased from $687.48 in 2005 to $2,085.10 in 2015 mainly

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due to industrialisation, while Nigeria’s grew from $1268.38 to $2730.43 in the same period mainly from oil and gas. A significant increase in Nigeria’s per capita power consumption of at least 6.5 times is therefore both feasible and viable in the country if a different approach is applied in dealing with the power sector. It is clear that Nigeria must as a matter of urgency; grow its power generation capacity to at least 40GW by 2031. The current Siemens deal signed by the Federal Government promises to increase capacity to 25GW by 2026 by resolving some transmission, fuel and distribution issues, rehabilitating some existing ailing plants and adding about 7.6GW. This new 7.6GW would include the 4,000MW slated to be built by NNPC. It would therefore appear that yet again, we are doing the same things and expecting a different result. Currently, the Nigerian Bulk Electricity Trading PLC (NBET) pays the existing gridconnected GenCos from 38 percent to as low as 11 percent for the power they generate. How can they invest more to organically grow our installed capacity? Further, the looming risk that the country will not honour agreements signed with businesses is a major discouragement to potential investors, such as some elements of the government calling into question the agreement signed with Azura Edo IPP, the only privately-owned world class IPP built in Nigeria in recent times. It is not out of place for the curious Nigerian that cares about true growth of the country to wonder why it is believed that signing a “country

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Chukwueloka Umeh

to country” agreement between Nigeria and Germany is the silver bullet needed to solve our long-suffered power sector issues. Why do we continue to look overseas for solutions to the NESI when the best and possibly only solutions are staring us in the face? Nigeria’s continued search overseas is akin to a family that lives on the banks of a very clean stream but treks several kilometres each day to buy water from a man that collects the same stream water, bottles it and sells to them at a profit. The solution to Nigeria’s generation problem resides squarely in completing the privatisation of the NESI. What obtains now is a NESI that is partially privatised, but still suffers from regulations and government influence that has stifled organic growth and private investment. The NESI regulators should keep in mind that they cannot regulate something that does not exist. They should therefore throw their full weight behind the private companies in the power sector and allow them to grow organically to better serve Nigerians. Dr. Umeh is the Managing Director/CEO of Century Power Generation Ltd and the Group Chief Operating Officer at Nestoil Group.

F a

Wednesday 12 August 2020

BUSINESS DAY

Editorial Frank Aigbogun

Abuse of trust by public servants

editor Patrick Atuanya

Corruption cannot coexist with national development

Publisher/Editor-in-chief

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

t is shocking the magnitude of theft by individuals entrusted with the management of Nigeria’s financial resources. We believe this is an abuse of trust and confidence reposed in them by both the government and citizens. It is rather unfortunate and shameful that two key federal government agencies; the Economic and Financial Crimes Commission (EFCC) and the Niger Delta Development Commission (NDDC) respectively are being probed for massive corruption. However, the revelations are not entirely strange, especially in Nigeria where corruption has become endemic. Indeed, revelations from ongoing investigations prompted President Mohammed Buhari to express regret that some appointees, both in his administration and previous ones, have abused the trust reposed in them. Such comment indicates the level of rot in the system. For several years, the issue of corruption in public life has been

a matter of national discourse. At national and state levels, panels have investigated and still investigating one act of misdeed or the other by public officials. Over the years, Nigerians have witnessed the probe of issues around contract awards, police pension funds, petroleum subsidy, capital market infractions etc. Now, for an administration that made anti-corruption its swansong, it is rather baffling that corrupt practices among government officials still thrives. It will therefore be more devastating if reports from on-going probes end up on the bookshelf. Several reasons have been adduced for the persistence of corruption in Nigeria, unfortunately however, the society seem to have condoned corruption in the past by obliging “chieftaincy titles” to men and women in high positions of authority or those with large cache of cash, instead of demand accountability on the source their wealth. The result is that today, public service is so steeped in corruption that it is becoming a way of life. Truth is, moral and ethical be-

haviours are difficult to legislate in a free and truly democratic society. However, a government or social system can compel by diverse means the adoption by its citizens of certain values and desirable norms of behaviour including ethical living and moral uprightness. Regrettably, the perfection of open corruption on a huge scale was the most destructive legacy Nigeria permitted in the past. The result was the near annihilation of the national psyche, the complete loss of faith in honesty, and the almost unshakeable entrenchment of cynicism toward the leadership and the entire system itself. It is common knowledge that the objective of most aspirants to public office in Nigeria is to partake in the sharing of the proverbial national cake. Perhaps, this informed the famous statement by a former Nigerian political leader late Chief Obafemi Awolowo who in 1982 said that since independence; “our governments have been a matter of few holding the cow for the strongest and most cunning to milk”. Under such circumstances, he explained, people run over others

in quest for self-aggrandizement. Unfortunately, over 3 decades after, the status quo remained. Whichever way it is looked at, the fact remains that corruption cannot coexist with national development. Time has come when a stop must be put to wanton looting of public treasury. We therefore join other Nigerians to condemn the brazen stealing of our commonwealth by few privileged political office holders in collaboration with civil servants. As a nation, we cannot allow this malady to continue unchecked. The federal government as a matter of necessity must take steps to convince Nigerians of its genuine determination to stamp out corruption. Reports of on-going investigations must be made public as well as implemented. There is no doubt that good leadership and good governance usually evoke positive and dynamic response from the governed. In the battle against corruption in public life, the highest echelons of President Buhari’s administration must show commitment to uprightness as well as dedication to the war against corruption.

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Wednesday 12 August 2020

BUSINESS DAY

news

Alleged Perjury: Court fixes August 24 to hear case against Ize-Iyamu, Audu Ganiyu Felix Omohomhion, Abuja

Federal High Court in Abuja, on Monday fixed August 24 to hear the suit seeking to disqualify the Edo State All Progressives Congress (APC) candidate in the September 19 governorship election in the state, Osagie Ize-Iyamu and his deputy, Audu Ganiyu. Justice Taiwo Taiwo adjourned the case after granting an application for substituted service of the court processes on the third and fourth defendants, Ganiyu and Ize-Iyamu respectively. Two chieftains of the APC, Momoh AbdulRazak and Zibiri Muhizu had dragged the APC’s candidates in the governorship election over alleged perjury. Defendants in suit marked FHC/ABJ/ CS/758/2020, APC, Independent National Electoral Commission (INEC), Audu Ganiyu and Osagie Ize-Iyamu as 1st, 2nd, 3rd and 4th defendants respectively. The plaintiffs are asking the court to disqualify the deputy governorship candidate, Ganiyu from participating in the forthcoming election on account of supplying false information to INEC in aid of his qualification for the governorship poll slated for next month. Ganiyu, in the suit filed on July 10, 2020, by the plaintiffs’ lawyer, Friday Nwosu, was also accused of certificate forgery. They further prayed the court to annul the nomination of Ize-Iyamu as APC’s governorship candidate on account of running with an allegedly unqualified deputy. In addition, they prayed the court for another order restraining the APC from contesting the September 19 governorship upon the disqualification of the 3rd and 4th defendants. In a 41 paragraph affidavit deposed to in support of the suit, the plaintiffs averred that Ganiyu contravened provisions of the electoral laws by providing false information and lying on oath in his form CF 001 he submitted to INEC in support of his qualification for the September 19 governorship election in Edo State. Accordingtothedeponent,Abdul-Razak,“there are several irrevocable different and false informationgivenbythe3rddefendantabouthimselfwhich cannot be true in his 2020 INEC form EC-9. “That I know as a fact that both the alleged name Audu Abudu Ganiyu in his 2020 form EC-9, Audu Abudu Ganiyu in the WAEC (GCE) of December 1983, Audu Gani on the APC card No: 0054243, are not the name of the 3rd defendant as fully and definitely confirmed by the statutory declaration of age (exhibit 6A) that accompanied 3rd defendant’s 2019 form CF 001 personally deposed to by the 3rd defendant at the Registry of the Chief Magistrate Court, Yaba Lagos State on 24/5/1996”. Abdul-Razak further claimed that the deputy governorship candidate, who is a serving member of the Edo State House of Assembly representing Etsako West constituency, submitted a different name to INEC in 2020 from what he submitted in his 2015 and 2019 CF 001 forms. He argued that the 3rd defendant had no time in the various certificates paraded by him, attached any change of name to prove the names belong to him. The plaintiffs further accused the deputy governorship candidate of superimposing the letter ‘A” on the testimonial issued by a state authority or institution to read from originally Audu Ganiyu to Audu “A” Ganiyu which he presented same to INEC in aid of his qualification for the election. When the matter came up Monday, counsel to the plaintiffs informed the court that while both 1st and 2nd defendants have been served with the processes, the 3rd and 4th have not been served and as such he has brought an application for substituted service. Counsel to the 1st defendant, Ehiogie WestIdahosa, acknowledged service while there was no appearance for INEC. In a short ruling, Taiwo granted the application as prayed and ordered that the court processes, including the hearing notice, be pasted on the Benin City residents of the 3rd and 4th defendants. He subsequently adjourned till August 24 for hearing in the substantive suit. www.businessday.ng

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Wednesday 12 August 2020

BUSINESS DAY

COMPANIES&MARKETS IATA’s Business Confidence Index paints I-invest opens equities market to millions of Nigerians tougher 12 months ahead for airlines MIKE OCHONMA

…CFOs, Cargo heads expect stagnant profits

Hope Moses-Ashike

esults reported in the International Air Transport Association’s (IATA’s), the representative body for the global airline industry’s ‘Airline Business Confidence Index July 2020’ survey, published last week indicates that no less than 68 percent of the world’s airline chief financial officers (CFOs) and heads of cargo expect profits to drag or decline further over the next 12 months. Further, 77 percent of the respondents to the IATA survey reported that, airlines suffered a fall in profits during the second quarter of this year. However, that represented a slight improvement in comparison to the situation reported in its previous survey, published in April. In the latest report, 19 percent of respondents actually

reported that their profits had risen. This was due to their focusing on air cargo operations, the yields for which rocketed because of a lack of capacity resulting from the loss of passenger airliner belly hold cargo capacity caused by the near global halting of passenger flights. Furthermore, 32 percent of respondents expected their profits to improve over the next year as air passenger travel resumed. Regarding the overall impact of the Covid-19 pandemic, only 19 percent of respondents expected air traffic demand to return to 2019 levels within just six to 12 months, while 39 percent thought it would happen within 12 to 24 months, but the largest group, 42 percent, expected it to take more than two years to be achieved. In terms of regions, 42 per-

ew and experienced retail investors can now own a piece of the companies listed on the Nigerian Stock Exchange (NSE) using the i-invest app on their smartphones from the comfort of their offices or homes. The secure investment app, which revolutionized fixedincome trading, now empowers investors in the equities market to execute trades during trading hours; it gives them full control of their portfolios. Oluseye Olusoga, managing director, Parthian Partners, who disclosed this in Lagos, said the convenient access to real-time equities trading on the NSE offered by i-invest is in line with Parthian Partners and Sterling Bank’s innovative approach to offering stress-free services to millions of Nigerians at home and in the Diaspora. i-invest was launched in 2018 by Parthian Partners in partnership with Sterling Bank. It is a secure digital platform for investments which is regulated by the Nigerian Securities and Exchange Commission (SEC).

cent thought that the AsiaPacific would be the first to return to 2019 levels, followed by 35 percent saying it would be Europe. The Middle East was selected by 10 percent, Africa and North America by 6 percent each, while 0 pecrent chose Latin America. Focusing in on the question of demand, the survey showed that 96 percent of respondents had suffered from a fall in passenger demand during the second quarter. IATA observed that this was unsurprising. However, there was no unanimity when it came to expectations of passenger demand over the next 12 months, with 42 percent expecting a further decrease in demand, 8 percent believing it would neither get worse nor get better and 50% expecting an improvement. Regarding cargo demand, 30% of the survey respondents reported an increase during

the second quarter, due to the lack of capacity created by the grounding of airliners. For the next 12 months, 37 percent foresaw a decrease in cargo traffic volumes, 13 percent expected no change and 50 percent believed they would increase. Unsurprisingly, there have been and are expected to be consequences for airlines’ workforces. During the second quarter, 45% of respondents reduced their staff complements, as part of cost-cutting in response to Covid-19; on the other hand, thanks to the assistance of their governments, 52 percent were able to avoid cutting jobs at that time. However, 55% believe that they will have to dismiss workers during the coming year, as they expect the scope of their operations will be smaller following the pandemic, which will require further cost-cutting.

Olusoga urged investors to take advantage of the iinvest platform to trade in the shares of any of the 161 companies listed on the Nigerian Stock Exchange. He added that the platform allows for trading with direct reflection of the business as done on the NSE during the daily trading period between 10 am and 2.30 pm every weekday while investment in either Eurobond or treasury bills could be done at any time of the day. According to Olusoga, anyone can start investing within minutes of downloading the i-invest app. After downloading the app, a prospective investor registers and can make payment into the app’s wallet which could then be used for investment immediately. He explained that the app provides a secure, fast, and convenient way for the average man to access investment products otherwise reserved for the elite. The easy-to-use application was designed with customers in mind and gives interest on every investment option. Customers can view their portfolio of investments anywhere at any time.

FSDH Holding holds first-ever AGM, group posts N5.8bn 2019 profit Seyi John Salau

O R-L: Hon. Abdullahi Adamu Candido the Executive chairman of Abuja munipal Area Council (AMAC), Dr.Teniola Adesanya; Executive Chairman of OXFORD INTERNATIONAL GROUP and Mr Henry Ogunkorode ED Marketing Oxford International Group at the grand inception ceremony of the company in Abuja.

AXA Mansard sells pension subsidiary to Eustacia Limited

XAMansardInsurance Plc has announced its divestment from its pension subsidiary, AXA Mansard Pension Limited, after agreeing to sell its stake to Eustacia Limited, a member of the Verod Group. According to the company, this is part of the insurance firm’s plan to focus on and grow its insurance businesses across all parts of the country noting that Eustacia Limited was selected as the preferred bidder, after the completion of a bid process. “AXA Mansard along with the minority shareholder agreed to sell the entire issued ordinary share capital

of AXA Mansard Pensions comprising of 60% shareholding (2,067,672,000 shares) held by AXA Mansard Insurance Plc and 40% shareholding (1,378,448,000 shares) held by the minority shareholder,” the company said. The sale is coming after obtaining the Shareholder’s approval at the Company’s Extra-Ordinary General Meeting held on the 13th of February 2020, the Company commenced the process of divestment by appointing Messer Rand Merchant Bank as the Financial Advisers while Aluko & Oyebode acted as the Legal Advisers on the transaction. The insurance firm also

in its statement said that the divestment has received letters of no objection from the National Insurance Commission (NAICOM), National Pension Commission (PENCOM) and the Federal Competition & Consumer Protection Commission (FCCPC). In his reaction, Kunle Ahmed, CEO, AXA Mansard Insurance Plc, said that the transaction marks a new step in the insurance firm’s broader strategy to focus on and grow their life, property & casualty and health businesses across all its geographies. Ahmed said that the AXA Group sees great potential in the Nigerian insurance market and believes it is

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ideally placed to capture these opportunities due to its market leadership position. On his part, Dapo Akisanya, CEO of AXA Mansard Pension Limited said that they are confident about Verod’s strong commitment to providing the company with the requisite support to actualize their promise to its clients and stakeholders. A partner at Verod Group, the new owners, Eric Idiahi, said, ‘’We strongly believe that this is the ideal time to enter the market and that AXA Mansard Pensions provides an excellent beachhead from which to establish a consolidated position and gain market share.”

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n the 13th of July 2020, FSDH Group held its first Annual General Meeting under its new financial holding structure. The new structure birthed FSDH Holding Company Limited in 2019, a non-operating financial holding company regulated by the Central Bank of Nigeria (CBN) and now parent company to diverse financial institutions with remarkable footprints in the banking, asset management, stockbroking & financial advisory, and pension fund administration sectors of the economy. In his address, Hakeem Belo-Osagie, Chairman of FSDH Holding Company Limited shared that the Group has set out with the ambitious vision of becoming Africa’s leading ﬁnancial asset aggregator with a smart Pan-African footprint, and a mission to improve outcomes for customers and subsidiaries while delivering value for shareholders. He addressed the slowdown in the Nigerian and global economies as a result of the Covid-19 pandemic, stating that the restriction of economic activities and social distancing policies @Businessdayng

combined with the oil price crash, will lead to diminishing growth for the Nigerian economy. Citing FSDH Research report projections, he stated that the economic growth may decline by 5.9% in 2020 if the pandemic is not contained and the Federal Government/CBN led stimulus measures are not fully implemented. Belo-Osagie pointed out that low investor confidence as a result of dollar shortage, and the volatility of equity markets all reinforce the need for the FSDH Group restructuring. ‘’We wanted to empower each business to focus strictly on its respective core operations, while allowing the Holding Company guide the Group in pursuing an expanded business model, through both organic and inorganic approaches. As an institution founded in the middle of a crisis, FSDH Group has succeeded by being innovative, and consistently being ready to take measured risks. We intend to continue to expand our businesses meaningfully, and in this regard, there are some strategic initiatives underway that will materially change the outlook of the Group.’’

Wednesday 12 August 2020

BUSINESS DAY

COMPANIES&MARKETS

Business Event

AIICO’s staff to work from home till Jan. 2021 Modestus Anaesoronye

IICO Insurance Plc has extended its Work from Home policy to allow more of its employees work from home till January 2021.Currently, about 50 percent of its workforce work from home, while others enjoy the flexibility of running weekly rotation as a social distancing measure. In view of the recent shutdown of the Third Mainland Bridge and its effects on movements across Lagos, the Management of the Company has deemed it fit to allow majority of its employees take advantage of the Work from Home arrangement. According to Babatunde Fajemirokun, managing director/CEO “We are in unprecedented times and we keep evolving and adapting to the new normal. We are mindful of what our employees go through, commuting to and from work. Our robust Business Continuity Plan, which we implemented during the lockdown period, has proven to be quite effective in running business operations either on premise or remotely. Our employees’ productivity

during that period was quite impressive. We will continue to leverage our Business Continuity arrangement to deliver value to our customers while ensuring our employees’ wellbeing and safety. Oluyemi Obakin, Head, Human Resources, added “AIICO’s Work from Home policy had been in existence since 2018; we only modified and expanded it to adapt to current realities. It is among several other people initiatives we have deployed to boost employees’ morale and productivity level. Members of staff have expressed appreciation to the Management for this kind gesture. “I am so excited at this announcement. This has eliminated the stress of the daily movement to and back from work. I can rest some more and I am able to focus on delivering on my tasks.It is so thoughtful of Management and I want to say thank you.” says, TokeFalomo. Femi Oluwatowoju also says “The traffic situation in Lagos, resulting from the various construction activities costs me hours in daily movements. With the WFH opportunity, I can deliver more now on the job, having been provided

with all necessary tools to function remotely. Also, I can spend more quality time with my family.” While all branches will remain opened and properly manned to attend to walk-in customers, AIICO has continued to invest in improving her digital solutions to ensure customers can do all transactions at their convenience. Ella, AIICO’s social media artificial intelligence chatbot, has been actively used by customers for inquiries, instant purchase of insurance products, policy renewals, claims reporting and lots more. The company encourages the public to take advantage of its various interactive digital platforms, which are available 24/7 for engagements and business transactions. AIICO Insurance is a leading composite insurer in Nigeria with a record of accomplishment of serving its clients that dates back over 50 years. Founded in 1963, AIICO provides life and health insurance, general insurance and investment management services as a means to create and protect wealth for individuals, families and corporate customers.

L-R: Olubunmi Braheem, state nutrition officer, Lagos State; Modupe Adeyinka, Lagos State chapter coordinator, Civil Society Scaling-up Nutrition; Uche Ralph-Opara, Lagos State Team Lead, Alive and Thrive; Hassan Shola, state health educator, Lagos State Ministry of Health; Adebunkola Adefule-Ositelu, chairman, Lagos State Traditional Medicine Board, and Adetoke Adekitan, nutrition programme officer, Lagos State Primary Health Care Board, during the Alive and Thrive Media Parley with Stakeholders in commemoration of the 2020 World Breast Feeding Week in Lagos.

L-R: Olanrewaju Ogunbanjo, non-executive director, SUNU Assurances Nigeria Plc; Adeleke Hassan, executive director; Samuel Ogbodu, managing director, John Akujieze, company secretary; and Akeem Adamson, chief finance officer during the Company’s Annual General Meeting in Lagos.

Rainoil deepens gas penetration with 8,000MT tank capacity ....Sylva, Kyari applaud company’s investment

Odinaka Anudu

ainoil Limited, a leading integrated company operating in the downstream sector, has launched its Liquefied Petroleum Gas (LPG) facility with a tank capacity of 8000 metric tons (MT). The LPG also has a fleet capacity of 40 LPG trucks. Speaking at the commissioning of the LPG business, Timipre Sylva, minister of State for Petroleum Resources, said the oil and gas firm partners with the government in gas utilisation and development, thereby creating jobs in the country. According to Sylva, who commissioned the multi-product facility at Ijegun, Lagos last Thursday, Rainoil is working in tandem with the vision of the Federal Government in making gas a preferred fuel in the country. “I am excited at what I am seeing here today. Everything can speak for itself. As you can see, energy is very important in the global economy and I am glad that Nigerians are playing key roles in the oil and gas industry,” he said. He noted that Rainoil’s investment in gas development aligns with President Buhari’s agenda in the National Gas Expansion Programme (NGEP), adding that the government has

declared 2020 as ‘the year of gas.’ He stated that the country has sufficient gas reserves to meet its energy needs and is happy to see Rainoil align with the government’s drive to deepen LPG penetration and attain 5 million MT of LPG consumption by 2022. Mele Kyari, group managing director of the Nigerian National Petroleum Corporation (NNPC), applauded Rainoil Limited for its sterling efforts in ensuring in-country utilisation and deepening of gas penetration in the nation. Kyari, who lamented that Nigeria is a net importer of petroleum products, announced that NNPC is ever ready and willing to support all the companies that are making efforts to accomplish the federal government’s developmental agenda. “We believe that gas is our next instrument for developing our economy, and we commend Rainoil in its effort in ensuring the use of gas in the country,” he said. Earlier in his address of welcome, Gabriel Ogbechie, group managing director, Rainoil Limited, said that the decision to invest in growing the LPG sector started in 2018. According to him, ‘Rainoil Gas’ will meet the energy needs of customers at the retail end in www.businessday.ng

the coming months. Ogbechie believes that the expansion of Rainoil Limited perfectly aligns with the company’s vision and mission to continually proffer solutions to fill the voids in the energy sector. Nigeria has the fastest growing LPG sector in the world with a projected LPG market size of $10 billion. Rainoil Gas is expected to support the Federal Government’s policy on deepening LPG penetration and will improve domestic consumption of LPG nationwide. Ogbechie affirmed that Rainoil Gas will provide direct and indirect employment opportunities, including training, skills acquisition, transfer and enhancement. Its operations also have an added environmental protection benefit as it reduces gas flaring and encourages the use of cleaner fuels. He said that Rainoil Limited has grown over the last 20 years to include: three ultra-modern petroleum product storage depots— 50 million-litre capacity each in Delta State, Cross River State and Lagos State; over 81 retail outlets across the country; a fleet of over 100 tank trucks for efficient delivery of products and one shipping vessel with a total capacity of over 20,000 metric tonnes. Rainoil Limited is a wholly indigenous company.

Lion Tolulope Senbanjo, Cabinet Treasurer, District 404B2 Nigeria (middle) flanked by the District Governor, Lion Ademola Adesoye 1st right and Leo Giwa Boluwatife, Leo District President, 1st left with other Lion leaders during his celebration as a 10 Star Diamond recognition of Progressive Melvin Jones Fellow at the District Cabinet Meeting held in Osogbo, Osun State

L-R: Ada Ihesiaba, billing department, Ports and Cargo Handling Services, a subsidiary of SIFAX Group; Abayomi Obadare, general manager, Billing, Ports and Cargo Handling Services and an awardee who has spent 15 years in the service of SIFAX Group; Oluwakayode Alonge, group head, human resources, SIFAX Group, and Abiodun Junaid, senior manager, human resources, SIFAX Group, during the SIFAX Group Long Service Award presentation which was held across all subsidiaries recently.

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Wednesday 12 August 2020

BUSINESS DAY

INTERVIEW ‘To compete globally, Nigeria must deliberately groom young leaders with right skill sets’ Lack of quality education, eroding societal value systems and absence of access to capacity building opportunities are some of the challenges bedevilling youth development in Nigeria. On a mission to address these challenges, using The Bridge Leadership Foundation (TBLF) platform, LIYEL IMOKE, former governor of Cross River State in this interview with KELECHI EWUZIE, shares insight on how the foundation has leveraged Career Day programmes in the last 10 years to raise a community of inspired, equipped and influential young leaders in Nigeria and Africa. Excerpt: What is the biggest challenge facing youth leadership in Nigeria and to what extent can you say the TBLF has contributed in solving them? don’t believe we can identify a single biggest challenge facing youth leadership. There are several, ranging from quality of education to societal value systems and even access to capacity building opportunities. I have never believed that there are successful lawyers or doctors or governors or presidents. I think there are successful people. Lawyer, governor, president or minister, those are just titles. You don’t need a title to lead. What we do at the Bridge Foundation, especially at Career Day, is groom successful people. You have successful people and thought leaders talking to young people about character building, talking to them about personal growth, talking to them about integrity. What is important for us at the Bridge Foundation is to breed successful people who by the time they get a title are leaders already. Many people that are leading today do not have a title but they are leaders in their schools, they are leaders in their homes, they are leaders in their communities. To my mind, the only way to address the challenges Nigeria and the Continent are confronted with, is to groom successful people from a very young age. The earlier our young people are exposed to leadership and entrepreneurial training, the higher the probability of successful outcomes.

and leadership outcomes. Over 213 communities have been reached. Over 57 student-led change projects have so far been initiated by students to the benefit of other students, their schools and communities. Over 451 volunteers and mentors have supported our projects.

How does TBLF structure its career day programmes to ensure it can mobilise both the private, public sectors in the fight against perennial poor leadership across all levels? The Career Day addresses the core essence of human life, speaking to the need for everyone to find a system that puts them ahead in whatever endeavour of life they find themselves. It also plays a critical role of helping shape the mindset, values, can-do attitude and nationalistic contribution required of every aspiring leader. This is something that resonates with any sector public, private and others. When it comes to grooming quality leaders, Nigerians increasingly list corruption, godfatherism as obstacles. How can these pressures be resolved? When it comes to grooming quality leaders in Nigeria or anywhere else in the world, it’s important for the

Liyel Imoke

people that are being groomed to understand their WHY. The reason why they want to go into leadership or become leaders. The reason why they want to lead their communities because if you understand your why you will not be disrupted by corruption and godfatherism. Partnership with private sector is very critical to achieve the vision of TBLF. How do you see the role of well-meaning individuals in the quest to enthrone qualified and capable leadership at the Federal and Subnational levels in Nigeria? The Foundation has and is partnering with private sector players who share our vision of grooming the next generation of leaders. Qualified and capable leadership anywhere in the world, can only be enthroned when we share and work together to achieve a common vision. What inspired you to start TBLF? I had the privilege of getting into politics at a relatively young age with a commitment to serve, because of my background. This afforded me the opportunity of meeting with many young people, particularly in rural communities, most of them full of energy and hope. Most of them wanted jobs while some wanted to be politicians. The majority of them had attended some educational institution, but clearly had no leadership or entrepreneurial skills. If Nigeria and indeed Africa is www.businessday.ng

ever to become globally competitive, we must deliberately groom a generation of young leaders with the right skill sets. The vision is to raise a community of inspired, equipped and influential young leaders who lead themselves and others. We are building generations of young people educated to become compassionate, entrepreneurial and engaged citizens who are empowered to take responsibility for leading their own lives and making a difference in the world. Can you tell us about the TBLF programmes in Nigeria and the works it has done in the last 10 years? At the Foundation, our programmes include Leadership and Community Development (LCD) Programme, Teacher Support Programme (TSP), Transformational Mentoring Programme (TMP), Pacesetters Mentoring Programme (PMP), and Grooming Enterprise Leaders (GEL) which focuses on Employability, Entrepreneurship and Social Change. Also, we hold 2 major events every year: The Career Day and The Bridge Awards. Cumulatively, we have impacted over 53,510 persons through these programmes directly. 161 students received scholarships, 110 students were mentored and 898 public secondary school teachers trained. 704 youths have been trained on work readiness skills, 4,950 students equipped with leadership skills and 38,630 youths inspired to lead successful personal, career

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For you to come this far, you must have had some ups and downs in the journey. Was there any point in time when you felt like quitting? Any regrets being where you find yourself? When we started The Bridge Leadership Foundation, I did have a great vision for it. But as you know, with any great vision comes great obstacles, but obstacles are just part of the journey. They say every Crown has a cross and when you understand that obstacles are part of the journey, you find opportunities in the obstacles. Wayne Dyer said “When you change the way you look at things, the things you look at change”. When you look at an obstacle and examine it as an opportunity, you always have the energy to push through the obstacle. One would have thought that Covid-19 was an obstacle that would have stopped us from having the Career Day this year, but we chose to see the opportunity rather than the obstacle. We opted to have a fully virtual Career Day event and by so doing, reached audiences beyond Nigeria. We not only had viewership form all over the world, we all had our largest attendance to date. We also had viewership from a much wider age bracket than is usually the case at our physical event. Our online streaming data showed over five percent of our audience as being between the ages of 60 and 65. Our data shows that as a Foundation, we reached further than we previously had and that is because we looked at an obstacle which was Covid-19, which kept us home, and we thought how can we turn this into an opportunity. The Nigerian economy has been greatly impacted by the Coronavirus pandemic. Is this in any way impacting operations of the Foundation and what measures have been put in place to overcome these? The pandemic has certainly impacted on the Foundation just as it is impacting every aspect of the global economy. For example, all the programs we implement in schools have been affected momentarily because schools are temporary on lock down. Because of the social distancing and @Businessdayng

physical distancing measures, some of our on-field training has been put on hold by our partners and so on, but, it has also presented an opportunity to redesign, rethink, retool, and consider how to offer more value with less logistical concern. As I mentioned earlier, our last Career Day was held virtually for the first time since 2011 and we still reached more people, offered same value (if not more) with less resources. We were up for the challenge and we are more than prepared. Increasingly, technology is narrowing the space for professional practices across all sectors with its disruptive impact. How true is this? How prepared are foundations like TBLF for this new normal going forward? TBLF has adjusted and is repositioning its programs and activities, taking full advantage of the opportunities that present themselves, for instance, The Career Day. We were up for the challenge and we are more than prepared. It is really about our adaptability. It is really about our adaptability. Adaptability is a leadership quality. Just like there’s intelligence quotient, there’s also emotional intelligence an there’s adaptability intelligence. Leaders need to be able to adapt. Yes, we are ready for the new normal. From your perspective as a former governor of Cross River State, what critical steps would you recommend to make Nigeria better? We now live in a global village. It’s no longer just about Nigeria because what’s happening in America affects what’s happening in Nigeria and what’s happening in South Africa affects what’s happening in Nigeria. So, it’s a time for us to groom the next generation because tomorrow belongs to the next generation. We groom them by exposing them to thought leaders, exposing them to world leaders, so that they think better, they dream bigger. The good thing about thinking is that once you start thinking, you think bigger. If you don’t think at all you will remain where you are. I recommend we expose the young generation to the rest of the world because the rest of the world is now a global village. What are your projections for TBLF in the next decade? It is our plan that with the right programs, initiatives, partnerships and collaborations, we would have directly impacted over 500,000 youths by 2030 and in so doing, positively impacted Nigeria and Africa.

Wednesday 12 August 2020

BUSINESS DAY

insurance today

E-mail: insurancetoday@businessdayonline.com

Why Nigerian insurers may need to consider SUNU Assurances expert advice for counterparts in East Africa underwriting profit up Modestus Anaesoronye

recent study by Deloitte themed ‘Insurance Outlook Report 2019/2020 on East African Insurers has revealed that why growth trend between them and Nigeria may be different, customer expectation with developments in technology is the same. The report further suggests that insurers will need to restrategise by adopting technology to serve customers or face fierce competition and eventually go out of

relevance. The report which covered Kenya, Tanzania and Uganda, observed that insurers in the region have experienced better times than their financial performance in the recent years. The sustained economic growth in the region has not translated into a positive trajectory for insurers. According to the report, the operating environment has only become more competitive with premium rates being revised downwards in the more competitive business classes. “Suboptimal investment returns on property and equity markets, which have

been used as a safety net to compensate for underwriting losses, have further driven down the fortunes of insurance companies.” Furthermore, the pace at which disruptive technologies have been taken up by incumbents and the entrance of non-traditional insurers in the market, is slower than expected, the report stated. On the expert advice, it noted that insurers need to look at ways of remaining relevant in the competitive scene while improving their operational efficiencies using technology. “Customers are becoming more enlightened, aware of

their insurance needs, and are increasingly being skeptical of what insurers have to offer them. Globally, insurers have taken steps to modify their product and service offerings in line with customer behaviours, though the trend is yet to be experienced in the East African Region. “The first insurers, who capitalise on the opportunities that digitisation and automation offer, will most likely be the biggest beneficiaries. It is up to insurers to start small without fearing to fail and make iterative changes to their business as usual approaches.”

L-R: Mary Aworetan, head IT, Old Mutual; Alero Ladipo, executive head, Marketing & Customer Experience, Old Mutual; Olufunke Oyetola, director, Public Private Partnerships, Lagos State Ministry of Education; Gbenga Adeosun, St. Francis Junior Grammar School Student during Old Mutual’s presentation of remote learning aid materials to students in Lagos

Old Mutual partners Lagos to support students learning in vulnerable communities Modestus Anaesoronye

n response to the Covid-19 inspired shutdown of schools in Lagos State, the Nigerian subsidiary of the pan-African insurance firm and global financial services provider, Old Mutual Limited, has partnered the Lagos State Ministry of Education to drive remote learning for students in vulnerable communities. Senior representatives from Old Mutual and the Lagos State Ministry of Education kicked off the presentation of free 10,000 radio units to students at St. Francis Jnr Grammar School in Iwaya Lagos on Monday, July 27, 2020 The programme, which

involves the broadcast of curriculum-based education through radio, is targeted at students in vulnerable communities with limited or zero access to internetbased virtual learnings. Old Mutual is ensuring that the remote learning initiative reaches 10,000 homes by donating free radio units to be distributed to schoolchildren across these underprivileged districts in Lagos State. In her remark, Alero Ladipo, executive head, Marketing & Customer Experience, Old Mutual said “we understand that despite the impressive growth in internet connectivity and access in Nigeria, there are low-income families who cannot afford to access internet-based virtual learnings, which is fast bewww.businessday.ng

coming the conduit of remote education. “As an organisation, we believe that no one should be left behind in the provision of quality education. So, we are proud to partner the Lagos State Government, who shares the same ethos and have evolved a low-tech and affordable strategy to drive remote education through radio broadcasting. Our support is to enable children from 10,000 low-income families, who cannot afford a radio set, to be able to tune in to this remote education during this pandemic.” Folashade Adefisayo, Lagos State commissioner for Education, who was represented at the event by Olufunke Oyetola, director, Public-Private Partnerships, Lagos State Ministry of Edu-

cation stated that the support from Old Mutual would help the state in its quest to broaden the scope of education in the state. “The Old Mutual support is coming at a critical time when we need more hands to help build the future of our children. This exemplary gesture will help us to accelerate the adoption of virtual and remote learning as education and schooling would never remain the same post-COVID-19,” she said. “As a government and promoters of quality education in the state, we have put in place adequate measures to track the development and usage of the devices by the children for educative purposes. We believe the children would put the materials to good use,” she added.

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30% in 2019 Modestus Anaesoronye

nderwriting firm, SUNU Assurances Nigeria Plc’s has grown its underwriting profit by 30 per cent from N914 million in the 2018 financial year to N1.2 billion in 2019. This is majorly due to decrease in net claims incurred by 24 per cent from N868 million in 2018 to N658 million in 2019. The Group witnessed an improved production in terms of Gross Written Premium with 0.4 per cent increase from N3.049 billion in 2018 to N3.060 billion in 2019. This according to the company was due to the hard work of the business strategic teams despite declining to underwrite some class of businesses because of regulatory pronouncement. In the same vein, the company’s investment income grew from N519.57 million in 2018 to N719.52 million in 2019. The company also showed its strength in meeting up with its primary obligation by paying claims to the tune of N657.9million in the year under review. Kyari Abba Bukar, chairman, SUNU Assurances Nigeria, who made this known at the physical/virtual 33rd Annual General Meeting of the company said the Audited Financial Statements of the company and its subsidiaries for the year ended December 31, 2019 was approved by NAICOM via its letter dated 9th March, 2020 within the stipulated deadline, with no contravention of any law and regulations during the year under review. He further stated that in spite of the numerous challenges facing the company, ranging from the Bonds debt with its attendant huge finance cost, NAICOM previous penalty on offshore transactions which has a yearly payment of N86.6 million till 2021, they were able to achieve a modest result in 2019 financial year. He said: “During the year, we were able to increase significantly our processes through improved operating efficiency, optimizing our current assets and improving operating efficiency which is part of our strategy. We also seek to create further value by developing the opportunities embedded in our existing operations which present the most attractive options for growth. We are always looking beyond our current oper@Businessdayng

Kyari Abba Bukar

ations for sustainable growth opportunities. “Going forward, we shall strive to operate our business with a sharp focus on efficiency, transparency and sustainable cost improvements. To this end, the company had been through a period of change which included the implementation of new operating procedures to strengthen our internal capabilities and prevent leakages. I have no doubt that the future will bring many new opportunities and challenges but we have learnt that by focusing on running safe and efficient operations, maintaining our costs and managing our strategic objectives, we would continue to succeed”. Speaking on the new minimum paid-up capital requirements of Insurance and Reinsurers Companies in Nigeria by NAICOM, he said: “The shareholders at its Extraordinary General Meeting (EGM) held in March 2020 unanimously approved the resolutions put forward for the recapitalization of the company including but not limited to the cancellation of four existing ordinary shares out of every five ordinary shares held by members of the company; the total number of issued ordinary shares post the reconstruction exercise would be 2.8 billion ordinary shares while 11.2 billion ordinary shares were cancelled and unissued; and the refinance of the debt owed to Bondholders with an option to convert the debt to equity at the prevailing market price. “The company has obtained the approvals of NAICOM, FRCN, and CAC for the completion of the share reconstruction exercise and conversion of the Bond debt to equity. Similarly, the Federal High Court, Lagos Division sanctioned the company’s application for the confirmation of the reduction of the issued share capital of the company as required by Section 106 of CAMA. The final approval of SEC and NSE is currently being awaited to complete the exercise and credit the CSCS accounts of shareholders.

Wednesday 12 August 2020

BUSINESS DAY

BANKING

Share your experience at banks with us via: hope.ashike@businessdayonline.com

Agony of banks’ customers queuing for hours to access money Stories by HOPE MOSES-ASHIKE

ustomers are not finding it easy to carry out their various transactions at bank branches across the country as they spend longer hours outside and inside the banks. Investigation shows that many bank branches have been closed since the COVID-19 pandemic lockdown. Some of the banks’ staff members are observing work shifting as a measure to guard against contracting coronavirus. Access Bank Plc and FirstBank of Nigeria at Point Road Apapa have been closed since the lockdown. Customers who visited the banks were redirected to other branches in the area. Many of the affected customers went to the social media to cry out. Lagos Traffic Reports claimed at GTBank, Ikorodu branch, the security and cleaners were selling slot numbers to individuals at N1,000 to access the bank and there was no orderliness of any kind. The veracity of

this claim, however, could not be ascertained. A customer of FirstBank with a Twitter name, Adaniel, tweeted, “I was baffled at what I experienced at FirstBank Limca Road, Isolo today (Monday). The attendant was rude and unethical. Spoke as if I came to beg for money. Please are we supposed to spend two hours standing at your bank to get one transaction done?” In response FirstBank said, “Hello AdeosoAdenola28, we appreciate your feedback, apologise for your ill experience and any inconvenience caused. Kindly state if your complaint/request/enquiry has been treated, to enable us advise as appropriate.” Also, Kuforiji Olugbenga, tweeted on Monday, “Come to GTBank branch at Iju Road, you will queue till you start wondering why you are yet to get into banking hall after three hours to get hold of your own money. I still wonder…”. One of Access Bank’s customers at Ajao Estate, said, “I was in a bank twice last week. I spent two hours or more on each of my visits. I had to wait

Customers queuing at a branch of FirstBank ATM at Apapa, as the bank has been closed since lockdown.

for almost two hours outside before spending almost an hour inside on my second visit. There is always a long queue outside and inside. One of the reasons for being inside is the inefficiency of the cashless economy because apart from cash deposits and other transactions, the ATM may be faulty or someone might have pilfered money from someone else’s account online.” Uche Uwaleke, a professor

of capital market at Nasarawa State University Keffi, said the reason for the long queues are: first, social distancing rules, and second, failure of points of sale (POS). “You find queues also in supermarkets as a result of this,” he said. He said failure of POS transactions has become frequent due to network challenges, which is why a number of people are found inside the banking hall just to lodge

UNION Bank, Awarri strengthen students capacity in Artificial Intelligence

nion Bank, through its education platform Edu360, has announced its partnership with Awarri, a pan-African technology company, to launch The Next Robotics Legend initiative, a programme designed to train students in Artificial Intelligence (AI) and Robotics, and ignite a world of possibilities. This first-of-its-kind robotics training and competition for students aged 11 to 16 is being organised as part of the Bank’s efforts to boost education in Nigeria through Edu360. The initiative will focus on identifying and nurturing young potential inventors and creators who will receive necessary training to solve some of the challenges plaguing the Nigerian society. During the entry period from August 7th to 21st, 2020, entries will be accepted on the Edu360 website, from parents and guard-

ians of interested children within this age bracket. The top 25 entries will be shortlisted to participate in the intensive 3-month training programme and each of the participants will receive a tablet with preloaded information; a MekaMon, a robot which offers an unparalleled education experience in advanced robotics as well as access to seasoned tutors for the programme duration. At the end of the free training programme, participants will be required to identify a need in their community, and apply the skills learnt to proffer a solution. The student with the best solution will be admitted for a mentorship program with Awarri, the advanced AI and robotics company owned by Silas Adekunle - top international robotics engineer renowned for creating the world’s first intelligent gaming robot. Speaking on the Bank’s partnership with Awarri, Ogowww.businessday.ng

chukwu Ekezie- Ekaidem, head, corporate communications and marketing at Union Bank, said, “Edu360 is excited to work with Awarri on this initiative because this links three areas that we are passionate about – Education, Innovation and Talent Development. Our focus on these three areas stems from the realisation that they are crucial in driving development and sustainable impact in Nigeria. We are focused on collaborations and partnerships that will boost the development of education and shape a better and sustainable future.” To ensure the sustenance

of the initiative, Edu360 will partner with four secondary schools by providing robotics toolkits and training for their teachers to enable them include robotics in their curriculum. Edu360 was established by Union Bank in 2018 as a platform to drive muchneeded reform within the Education sector and rapidly accelerate access, quality and learning outcomes for Nigerian children and youth. Union Bank remains committed to supporting initiatives that will deliver a more sustainable future for generations to come.

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A branch of AcessBank in Apapa closed since lock down

one complaint or the other. The solution, he said, is to improve internet bandwidth and for banks to upgrade IT infrastructure. “Third is poor service from ATM either due to malfunction or insufficient cash provision which often happens when a particular branch is experiencing liquidity challenges,” Uwaleke said. He said to improve liquidity of deposit money banks, the Central Bank of Nigeria

(CBN)’s Monetary Policy Committee (MPC) should consider reducing the Cash Reserve Requirement (CRR) at its next scheduled meeting in September. Uju Ogubunka, president of Bank Customers Association of Nigeria (BCAN), said a serious institution that sees what is happening will make amends. He said banks should deploy more hands and recall some staff to speed up customer service.

Afreximbank wins two EMEA best structured finance awards

he African ExportImport Bank (Afreximbank) has been recognized by Europe, the Middle East and Africa (EMEA) Finance’s 12th African Banking Awards for two transactions processed under its Intra-African Trade Initiative. Afreximbank was recognized for its leading role in the $737 million bundle of guarantee facilities granted to Elsewedy Electric Group and the Arab Contractors for the construction of the Rufiji Dam and Hydropower Plant in Tanzania. Afreximbank was appointed as Global Coordinator and Financial Advisory to arrange the guarantee facilities for the project. The transaction won the award for the best structured finance deal in North Africa as part of EMEA Finance’s African Banking Awards. Afreximbank’s $100 million global guarantee facility in favour of Orascom Con@Businessdayng

struction was also awarded best structured trade finance deal in Africa. The facility aims at supporting the Egyptian construction company to expand its business in the rest of Africa through projects in key strategic sectors. Kanayo Awani, managing director of Afreximbank’s intra-African trade initiative, said: “The promotion, facilitation and financing of intra-African trade are at the core of Afreximbank’s strategy. We are thrilled to see our efforts acknowledged once again. The complex bundled guarantee facilities we arranged for the Rufiji Dam a n d Hyd ro p ow e r Pl a nt proves that African risks are bankable. It is perhaps the largest intra-African transaction entirely financed by African institutions. We are also proud to see our support to Orascom’s projects across Africa recognized for its performance.”

Wednesday 12 August 2020

BUSINESS DAY

FINANCIAL INCLUSION

& INNOVATION

How smartphone penetration can broaden Nigeria’s financial inclusion drive Stories by Endurance Okafor

rom 1892 when Nigeria’s first commercial bank was established in Lagos, the banking business in Africa’s largest economy has evolved to a point where bank customers can now complete a transaction at the comfort of their palm. The rapid penetration of Nigeria’s financial services over the years has been noteworthy, and the increasing ownership of smartphones, especially among the lowincome groups, has been instrumental in reforming the financial services landscape. Jumia’s 2019 mobile report shows that Nigeria had over 172 million mobile subscribers in 2018, a 6.4 percent improvement as compared to the 162 million recorded the previous year. Another study by Global System for Mobile Communications (GSMA) reveals that 53 million Nigerians had smartphones in 2018; this figure represents 36 percent smartphone adoption. The Londonbased company expects Nigeria’s smartphone adoption to increase to 144million by 2025. According to market analysts, more affordable smart-

phones, improved distribution network, and expansion of networks by service providers are some of the reasons for the surge in Nigeria’s smartphone ownership. Mobile smartphone prices went from N77,867 in 2014 to N63,807 in 2016, and N34,246 in 2018, as compiled from Jumia’s mobile report of 2019. Meanwhile, in Computer Village, Ikeja, the phone market hub in Lagos, a buyer can get a brand new budget smartphone for as low as N10,000 and pay around N6,000 for a fairly used one. As more Nigerian households increasingly have access to smartphones, especially

low-income households, many more individuals and businesses are now gaining easy access to a range of pricefriendly financial services. Following the successful marriage of smartphones and financial services which is helping to give more Nigerians easy access to financial service, industry analysts believe financial inclusion would certainly not be a distant goal to achieve. According to the World Bank, digital financial services, powered by fintech, have the potential to lower costs by maximizing economies of scale, to increase the speed, security and transparency of

transactions and to allow for more tailored financial services that serve the poor. “Fintech is helping governments quickly and securely reach people with cash transfers and other forms of financial assistance and reach businesses with emergency liquidity,” Ceyla Pazarbasioglu, Vice President Equitable Growth, Finance and Institutions, The World Bank Group said. While digital banking is already a widespread trend in most cities in Nigeria, the challenge, however, for financial service providers has been to reach the unbanked population who are mostly in the rural area.

“By giving these people access to basic financial instruments and allowing them to avail easy credit, these Internet-enabled smartphones give enough power in the hands of the poor, who can now be encouraged to save and get rid of the tangles of poverty,” Neel Juriasingani, CEO and Co-founder, Datacultr, a webbased financial software solution, said. According to Juriasingani, from creating a bank account to making payments, transactions, fund transfers, applying for loans, managing insurance, pensions, and cheque book requests, smartphones can allow people to fulfil all their financial requirements, without them having to physically visit banks or any other financial institution. The success story of India’s financial inclusion drive which leveraged the use of smartphones is one that holds lessons for Nigeria. Data by Datacultr shows that over 332 million Indian citizens have already opened mobile phone-based financial accounts under the government’s mass financial inclusion programme, Jan-Dhan Yojana. As a result, the share of Indians with at least one financial account has more than doubled to 80 percent since 2011.

Despite having over 196 million active mobile phone users as of June 2020, Nigeria has more 40 million of its adult population without access to a basic bank account and the 80 percent financial inclusion target by the Central Bank of Nigeria is under threat amid the impact of COVID-19. The country’s extremely poor population which was estimated by the World Poverty Clock to be over 90 million people as of March 2020 is one of the reasons responsible for Nigeria’s high financial exclusion rate. “Financial inclusion starts with revenue generation. You cannot be financially included if you don’t generate income for yourself or simply put if you don’t have money,” GuyBertrand Njoya, the CFO of Metro Africa Xpress (MAX), said, adding that no one can be financially included if they don’t have the finance to bring into the system. Promoting widespread financial inclusion is one of the key catalysts cited by analysts needed to ensure continued development and growth of any nation. “The multiplier effect of bringing people into a system outside of “cash-in, cash-out” is what we need in Nigeria,” Segun Agbaje, the CEO of GTBank said

Huawei’s new digital payment cloud provides these 3 solutions for mobile operators

uawei, a multinational technology company recently announced the launch of a new digital payment cloud solution to help digital payment service operators to build super app centered payment ecosystems that will accelerate digital financial inclusion in emerging markets. The Chinese ICT company made the announcement at its Better World Summit 2020, a virtual conference that held

from July 27, 2020, to July 30, 2020. The summit has focused on ways of deploying millions of 5G base stations to drive commercial success. At the launch of the new solution, Huawei assured that the digital payment cloud is designed to provide a payment platform and super app that helps mobile payment operators build an ecosystem quickly and efficiently. Explaining the importance of the new payment cloud solution, the Shenzhen-based

company said super app is a critical platform and engagement point for ecosystem partners and provides an efficient merchant marketplace. “According to GSMA, mobile money today has over 1 billion registered users after more than 10 years of development,” Ryan Wu, director of Huawei software marketing and solution sales department said. Wu, however, added that merchant payment is still at its infancy. “We all know that

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the key to success in the mobile payment business relies on the ecosystem.” According to Huawei, its new digital payment cloud solution brings value to payment operators in the following ways: Firstly, it will provide ‘extreme digital experience’ which will allow the opening of both user and transaction data in real-time, ensuring real-time query experience for users and merchants. Secondly, it will expedite

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service TTM with the help of solutions like application programming interface (API), H5, and mini-apps. And at last, the solutions will provide agile interactions. Explaining further, Huawei said the solution will provide a digital experience for operators. “With digital architecture, both user and transaction data can be opened in real-time, ensuring real-time query experience for users and merchants. Real-time risk control can be built based

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on AI analysis capabilities to identify fake transactions and avoid cash-out risks.” Expedite Service TTM is another benefit the operators will be able to enjoy while using the solution. With the open ecosystem, Huawei explained that the solution provides technologies that will enable partners to launch the service on the super app within one week and marketing campaigns from idea to launch within three weeks.

Wednesday 12 August 2020

BUSINESS DAY

AGRIBUSINESS

In association with

ag@businessdayonline.com

Cashew processing creates investment opportunities for Nigerian entrepreneurs Josephine Okojie

ashew is a crop with high export potentials, especially when processed. Currently, Nigeria process less than 5 percent of its total cashew exported, causing an annual estimated loss of N1.5 billion to the country. This implies that the country exports about 95 percent of its total cashew nuts unprocessed. According to Anga Sotonye, chief executive officer, Universal Quest Limited, the biggest opportunity in the cashew value chain is processing and the industry is waiting to be fully tapped. “Processing is where the money really is but we process very little for export. A ton of processed cashew as we speak is $12,000 while a ton of raw cashew is $1,200. You can see the difference is massive,” Anga said.

Going by Anga statement, this means that for every amount earned in export of raw cashew, Nigeria would have made about seven times the value of what it is currently been made. Cashew sells like cakes in the United States, India,

Spain, and many parts of Europe. Apart from helping to maintain a healthy heart and bones, cashew also helps in weight loss. Cashew nuts are used in producing chemicals, paints, v a r n i s h e s, i n s e c t i c i d e s

and fungicides, electrical conductress, and several types of oil. Ca s h e w e x p o r t e r s i n Nigeria made $300 million in 2016 and $350 million in 2017, according to Tola Faseru, former president, National Cashew Association

L-R: Gabriel Ogbechie, group managing director, Rainoil Limited; Mele Kyari, group managing director, Nigerian National Petroleum Corporation (NNPC); Timipre Sylva, minister of state for petroleum resources; Abdullahi Mahmud Gaya, chairman, House Committee on Petroleum Resources (Downstream); Adokiye Tombomieye, chief operating officer, upstream, NNPC; Emami Ayiri, CEO, A&E Group; Godrey Ogbechie, group executive director, Rainoil, at the commissioning of Rainoil Liquified Petroleum Gas (LPG) facility in Lagos last week.

Biotechnology needs proactive reporting, scientists tell science journalists …say technology is key to Nigeria’s food security Josephine Okojie

cientists and plant breeders in the country have urged agricultural journalists to be proactive in their reporting about the science of biotechnology in food production. The scientists who spoke to journalists at a day training organised by the Open Forum on Agricultural Biotechnology (OFAB) in Lagos recently, say effective science communication collaborations are critical in changing the perception problem associated with the science behind genetically modified organism. The y state d that the introduction of genetically modified crops in the country will help boost farmers productivity while ensuring the attainment of fo o d security for Nigeria. “In the last decade, Nigeria has been a leading importer of maize, soya beans, rice, and other finished food products. Unknown to many Nigerians, these products are coming to us from countries that have long deployed biotechnology tools

such as genetic modification in their agriculture,” said Alex Akpa, National Biotechnology Development Agency (NABDA). “For the research institutes to fulfill their mandates and contribute meaningfully to the nation’s quest for self-sufficiency in food production, the media must support and protect them from anti-technology lobbyists,” Akpa said. He says no country has been able to develop without effectively integrating science and technology into its development agenda, noting that Nigeria is currently following the path by adjusting to the current realities. He urged journalists to dismiss misleading information about GMOs among farmers and the general populace. Rose Gidado, country coordinator, OFAB Nigeria said that biotechnology is taking mankind beyond ever known depths of understanding chemical and physical basis of life and matter to molecular basis of creation. Gidado stated that biotechnology is divided into traditional and modern. www.businessday.ng

She says the traditional biotechnology process involves fermentation and selective breeding while the modern involves tissue culture, molecular genetics, and genetic engineering. She noted that biotechnology is applied in the agricultural, health, industry, and environmental sectors. Ni g e r i a h a d i n 2 0 1 8 approved the registration and release of two new varieties of cotton and in 2019 approved Pod Borer Resistant (PBR) Cowpea (beans) variety for commercialisation. Also speaking, Rufus Ebegba, director-general, National Biosafety Ma n a g e m e n t A g e n c y responsible in the regulation of genetically modified crops in the country, said that Nigeria has developed a national biosafety framework to regulate the activities of modern biotechnology and its use so that they do not cause harm on human health and the environment. He said that the assessment is carried out by identifying the gene used to modify the crop, the source of it, and how safe the organism has been over

the years for consumption and the environment. Similarly, Ebegba said that the organisation also looked at the gene that has been moved into a new organism if it has been crossed from a substantial gene and altered in such a way that has now lead to the introduction of new toxins that causes allergies. Aghan Daniel, communication officer, African Seed Trade Association, Kenya in his k e y n o t e a d d re s s u r g e d agricultural journalists to fully understand the country’s certified seed production system where the GMOs fall under, saying it is important to understand the process of producing seed. “To begin with, editors must look at the bigger picture and help journalists to write in a way that correctly portrays the methodology of the introduction of GMOs in Africa,” Daniel said. “My eight-year experience working with seed companies show that what the farmer and common man read is that the acceptance of GMOs is a death knell to conventional crops,” he said.

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of Nigeria (NCAN), who disclosed this to journalists at the Annual Cashew Logistics meeting, held in 2017. Two good things about cashew are that its return on investment is as high as 55 percent and its payback time is just 12 months, say experts. The cashew crop can be grown in the entire SouthWe s t, S ou t h -S ou t h a n d South-East region, with Enugu, Oyo, Anambra, Osun and Kogi having the largest production areas. Nigeria’s cashew is usually harvested between FebruaryJune, though farmers stock the crop and export it all year round. Nigeria is rated as the fourth-largest producer of cashew nuts in Africa and sixth in the world, with a 160 thousand metric per annum and is expected to reach 500,000 metric tons by 2020. Tips for cashew export As a potential investor, thorough research must be carried out to have a clear understanding of the

business, what it entails, and the targeted market. If you wish to process for the local or international market, then be ready to procure machines such as boiler, sheller or cracker, d r y e r, p a c k a g i n g , a n d machine. Cashew nut kernels are produced by shelling the raw cashew nuts, which grows at the end of the cashew apples using a sheller or cracker. An average hand sheller machine can shell 900 cashew nuts per hour. Cashew nut kernels are primarily judged by their sizes, colour and moisture content. Ivory colour whole cashew kernels represent the highest quality grade while the broken kernels are seen as quality deterioration. Apart from value addition, entrepreneurs must embrace innovation and technology, while ensuring that their products are desirous of competing favourably at the international market as well as good packaging or their products.

Green Eagles launches GreenWealth initiative to drive Nigeria’s food security …to create farm estates in all LGAs Josephine Okojie

reen Eagles Agribusiness Solutions Limited, a leading agro enterprise in Nigeria, has launched the GreenWealth Project to drive agric productivity, stimulate economic growth, and ensure the attainment of food security in the country. The GreenWealth project is designed to enhance profitability for stakeholders across the agricultural value chains as well as facilitating and providing a profitable platform for individuals and organisations to invest in the sector. “Food security has become a more serious issue than ever, and as a nation, we must bridge the local deficit in the production of critical food and cash crops to avert a major food crisis,” said Taiwo Oluwadahushola, CEO, Green Eagles Agribusiness Solutions during the launch of the initiative in Lagos recently. “Green Eagles Agribusiness S olutions Limited is set to spearhead the creative restructuring and innovation @Businessdayng

required to achieve Nigeria’s food security goal with the launch of the GreenWealth Project,” Oluwadahushola said. “In achieving this goal, we will facilitate the establishment of Integrated Farm Estates in 774 Local Government Area across the federation to drive a rapid increase in crops & livestock, which is produced round-the-year at significantly lower production costs, until we achieve equilibrium of demand and supply at consistently lower prices,” he added. He said that the launch of the GreenWealth Project will help in creatively restructuring the nation’s agribusiness space to achieve the goal of shoring up the nation’s GDP through agriculture. Also speaking at the event, Adebola Adetayo, managing director, said the initiative will provide sustainable livelihoods for millions of rural dwellers and unemployed youths as well as providing sustainable returns for sponsors. Similarly, she notes that the project will stir up unprecedented economic prosperity in and around rural communities.

Wednesday 12 August 2020

BUSINESS DAY

Harvard Business Review

ManagementDigest

The agile family meeting Bruce Feiler

t a moment when many families around the world are confined to their homes, climbing the walls and searching desperately for fresh techniques to manage household chaos, one proven solution that my family, along with many others, is using comes from an unlikely source: agile development. It’s no secret that working parents face enormous pressures. Ellen Galinsky of the Families and Work Institute asked a thousand children, “If you were granted one wish about your parents, what would it be?” Parents predicted that their children would say, “Spending more time with us.” They were wrong. The children wished that their parents could be less tired and less anxious. So how can we reduce that stress and help families to become happier? The single best solution I found may be the simplest of all: hold regular family meetings to discuss how you’re managing your family. MEET THE FIRST AGILE FAMILY A few years ago, my research brought me to the Starr family home in Hidden Springs, Idaho. The Starrs are an ordinary American family with their share of ordinary American family issues. David is a software developer; Eleanor is a stay-at-home mom. At the time, their four children ranged in age from 10 to 15. Like many parents, the Starrs were trapped in that endless tension between the sunny, smooth-running household they aspired to be living in and the exhausting, earsplitting one they were actually living in. What the Starrs did next, though, was surprising. Instead of turning to their parents, their peers or even a professional, they looked to David’s workplace. Specifically, to a philosophy of business problem-solving that David had studied and taught: agile development. The techniques worked so well for their family that David wrote a white paper about it, and the idea spread from there. THE THREE QUESTIONS The idea of agile was invented in the 1980s in large measure through the leadership of Jeff Sutherland. A former fighter pilot in Vietnam, Sutherland was chief technologist at a financial firm in New England when he began noticing how dysfunctional software development

was. Companies followed the “waterfall model,” in which executives issued ambitious orders from above that then flowed down to harried programmers below. “Eighty-three percent of projects came in late, over budget or failed entirely,” Sutherland told me. Sutherland designed a new system, in which ideas flowed not just down from the top but up from the bottom and groups were designed to react to changes in real time. The centerpiece is the weekly meeting that’s built around shared decision-making, open communication and constant adaptability. Such meetings are easy to replicate in families. In my home, we started when our twin daughters were 5 and we chose Sunday afternoons as the time for our meetings. Everyone gathers around the breakfast table; we open with a short, ritualistic drum tapping on the table; then, following the agile model, we ask three questions.

thoughts would go in, but few ever came out. Their emotional lives were invisible to us. The family meeting provided that rare window into their innermost thoughts. The most satisfying moments came when we turned to the topic of what we would work on during the coming week. The girls loved this part of the process, particularly selecting their own rewards and punishments. Say hello to five people this week, get an extra 10 minutes of reading before bed. Kick someone, lose dessert for a month. Turns out they were little Stalins. Naturally, there was a gap between the girls’ off-the-charts maturity during theses 20-minute sessions and their behavior the rest of the week, but that didn’t seem to matter. It felt to us as if we were laying massive underground cables that wouldn’t fully light up their world for many years to come.

1. What worked well in our family this week?

1. EMPOWER THE CHILDREN. Our instinct as parents is to issue orders to our children. We think we know best; it’s easier; who has time to argue? And besides, we’re usually right! But as all parents quickly discover, telling your kids the same thing over and over is not necessarily the best tactic. The single biggest lesson we learned from our experience with agile practices is

2. What didn’t work well in our family this week? 3. What will we agree to work on this week? Like most parents, we found our children to be something of a Bermuda Triangle: words and www.businessday.ng

So what did we learn?

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to reverse the “waterfall” as often as possible. Enlist the children whenever possible in their own upbringing. Brain research backs up this conclusion. Scientists at the University of California and elsewhere found that kids who plan their own time, set weekly goals and evaluate their own work build up their prefrontal cortex and other parts of the brain that help them exert greater cognitive control over their lives. These socalled executive skills aid children with self-discipline, helping them to avoid distractions and weigh the pros and cons of their choices. By participating in their own rewards and punishments, children become more intrinsically motivated. 2. PARENTS AREN’T INFALLIBLE. Researchers have found that the most effective business teams are not dominated by a charismatic leader. Rather, members of particularly effective teams spend as much time talking to one another as to the leader, meet face-to-face regularly and allow everyone to speak in equal measure. Sound familiar? 3. BUILD IN FLEXIBILITY. Another assumption parents often make is that we have to create a few overarching rules and stick to them indefinitely. This philosophy presumes we can anticipate every problem that will @Businessdayng

arise over many years. We can’t. A central tenet of the tech sector is that if you’re doing the same thing today that you were doing six months ago, you’re doing something wrong. Parents can learn a lot from that idea. The agile family philosophy accepts and embraces the everchanging nature of family life. It anticipates the reality that even the best-designed system will need to be re-engineered midstream. *** As I was leaving the Starrs’ home, I asked Eleanor what’s the most important lesson I should learn from the first agile family. “In the media, families just are,” she said. “But that’s misleading. You have your job; you work on that. You have your garden, your hobbies, you work on those. Your family requires just as much work. The most important thing agile taught me is that you have to make a commitment to always keep working to improve your family.” What’s the secret to a happy family, in whatever situation you find yourself and whatever kind of stress you face? Try. Bruce Feiler is the author of six consecutive New York Times bestsellers. His latest book is “Life Is in the Transitions: Mastering Change at Any Age.”

Wednesday 12 August 2020

BUSINESS DAY

MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

Here are issues affecting import, export trade in Nigerian ports amaka Anagor-Ewuzie

resently, there are myriads of issues affecting import and export trade negatively in Nigerian ports, starting from the day the goods arrive to when they are cleared from the port, shippers have said. They listed the issues to include failure of shipping companies to receive empty containers, high cost of transporting containers, and collection of official and unofficial payments by government agencies among others. Jonathan Nicol, president, Shippers of Shippers Association of Lagos State, who stated that shippers lose money even after clearing their cargoes due to the fact that shipping companies have failed to retrieve empty containers, said imports and exports trade have continued to suffer in recent time. According to him, manufacturers and shippers suffer huge clearing bills while getting their consignments delivered to them. For instance, trucking has become another challenge such that shippers pay as much as N1 million to transport container to a nearby

city like Ibadan while local trips cost between N350,000 to N800,000 which is unacceptable. “Today, trade facilitation no longer exists in our ports. Some agencies are making so much money from shippers instead of advising government to control excesses at the port. The Federal government agencies are sapping shippers dry through official and unofficial compulsory payments made on every consignment,” Nicol said in the statement sent to BusinessDay. Nicol, who stated that clearing cargo in Nigerian ports is eight times more than the cost of the goods, said that in clearing goods, shippers must get extra funds for distribution to corrupt platforms in the ports, which is one of the reasons goods are abandoned at the port. “Shippers do not have a seamless method put in place by government to exit their goods from the port. There are trucks everywhere within and around the vicinity especially along the corridors to the port. Places such as FESTAC, Mile 2 and The Marine Beach Bridge have now become holdingbays, and as long as trucks park on top of bridges, life span of our bridges will continue to be threatened,” he explained.

NPA refuses to license shipping firms for non-provision of holding-bays amaka Anagor-Ewuzie

etermined to put an end to the menace caused by littering of empty containers on Lagos roads, the Nigerian Ports Authority (NPA) said it refused to renew licenses of shipping companies for failure to provide empty container holding bays. Speaking at 14th Annual Business Law e-conference held recently with the theme, ‘Business Unusual: Digital Acceleration for Growth in a New World,’ Hadiza BalaUsman, managing director of the NPA, said NPA had sanctioned shipping companies for non-provision of empty container holding- bays. According to her, the authority had given modality in which every shipping company are required to take out equivalent number of empty containers every month, which they bring in and non-compliance to that, would lead to sanction. “We have actually refused to renew licenses of shipping companies due to non -provision of empty container holding bays,” she said. She stated that to renew license of shipping companies, they have to show evidence

of empty container holding bays that is commensurate to the vessels they bring into Nigerian ports. She however assured port users the authority will leave no stone unturned to ensuring that the shipping companies adhere to what was agreed in terms of maintaining the balance between what is going in and what is going out in regards to empty containers. Edeme Kelikume, managing director of Connect Maritime Services, blamed the congestion on lack of holdingbays for empty containers, which has had demurrage implications running into billions of naira on businesses. According to him, available holding-bays and other infrastructure around the ports for dropping empty containers are not enough and there is need for more to be provided by shipping lines. He called on the NPA to compel shipping lines to provide more holding-bays. On the role of tank farms in the persistent congestion in Apapa environment, Usman said the authority recognises that within the Apapa corridors there are tank farms and evacuation of petroleum products from the farms, which have attendant congestion arising from that area. www.businessday.ng

He however said that delaying cargo in the port is not good for anyone, especially volatile cargoes used in the soft drink industries, and the reckless handling of such cargoes can have a very devastating effect on the port. The renowned shipper also disclosed that vessels are now leaving Nigeria to other African countries to discharge their cargo especially those on Time Charter contracts. Stating that without the

cargo, which shippers bring, there will be no port, he said importers and exporters should be respected as nation builders, self-made individuals and progressive corporate entities, which they are. “No shipper would want to abandon his cargo if clearing expenses is within his budget. The regulators of our ports have a dual role to play in protecting the interest of shippers, and making sure goods brought into the country are

cleared promptly by stopping harsh government’s import policies,” he suggested. He further disclosed that Shippers Association of Lagos State is already discussing with its counterparts in the country, and will support any action that will bring economic sanity within the clearing and logistics chain. While noting that the alignment of major stakeholders to checkmate infractions, such as port corruption, viola-

L-R: Ada Ihesiaba, Billing department, Ports & Cargo Handling Services, a subsidiary of SIFAX Group; Abayomi Obadare, general manager, Billing, Ports & Cargo Handling Services and an awardee who has spent 15 years in the service of SIFAX Group; Oluwakayode Alonge, group head, Human Resources, SIFAX Group and Abiodun Junaid, senior manager, Human Resources, SIFAX Group during the SIFAX Group Long Service Award presentation held across all subsidiaries recently.

tions of rules of engagement and enforcements, show that government agencies have nothing to offer anymore to the trading public, he said the alignment will be a wakeup call to all including importers, who declare something different from what is found in their boxes. He called on government to remove domestic items from prohibition list because seizing importers goods, is draconian. “Import restrictions should be restructured and actions that will forcibly take cargo from shippers and auctioned privately, should be abolish because shippers need to be encouraged.” Nicol, who pointed out the need to reduce costs of doing business at port, said government should muster political will to remove all the so-called government security agencies in the port, with the exception of the Nigeria Customs Service, which is already a para-military outfit. “If that is done, people can now hold Customs responsible for any failure in the Port. Since, the port was concessioned; the security of the port should be left with the concessionaires with the Nigeria Police patrolling the port because the port is a very high risk security area,” he said.

SIFAX Group honours 46 staff at Long Service Award

IFAX Group has rewarded and honoured 46 staff at its annual Long Service Award to deserving staff, who have served for a minimum period of 10 years with cash gifts for their meritorious, consistent and outstanding service to the company. The awardees received their gifts at a private ceremony held across various subsidiaries recently. Taiwo Afolabi, Group Executive Vice Chairman,

SIFAX Group lauded the staff for their passion, dedication and hard work in uplifting the company to its current heights. “I must salute your courage and dedication. It means a lot to me that you have all dutifully contributed to the growth of the company in your different subsidiaries and in various capacities. I am touched because these gestures have shown to me an unrivalled level of loyalty to both the company and your jobs. Thank you for

believing in the SIFAX Group dreams and contributing your quota on a daily basis to see it come to fulfillment,” he said. A d e ku n l e O y i n l o y e , Group Managing Director, SIFAX Group, urged the recipients to see the recognitions as a call to better and higher level of service and commitment, adding that the company would continue to provide the required assistance and support to its workforce, including remuneration, training and pro-

motion in a bid to motivate for optimum performance. Of the 46 staff honoured and rewarded, 43 of them had served for 10 years, two for 15 years and one for 20 years. Responding on behalf of the recipients, Abayomi Obadare, general manager, Billing and Commercial, Ports & Cargo Handling Services Limited, lauded the management for the culture of rewarding staff. He assured the management that recipients would be inspired to do more.

CMA CGM, Hapag-Lloyd unveil fresh Asia rates amaka Anagor-Ewuzie

MA CGM and Hapag-Lloyd have announced new prices from Asia to various destinations including West African ports, effective from mid-July and August. Hapag-Lloyd will implement the following general rate increase (GRI) in the eastbound trade from East Asia to all United States and Canada destinations as of 15 August (date of cargo receipt at origin).

This general rate increase will apply to all dry, reefer, non-operating reefer, tank, flat rack and open-top containers as follows: For instance, East Asia to North America (US and Canada) will pay US$960 per all 20’ container types and US$1200 per all 40’ container types. Here East Asia is defined as being the countries/districts of Japan, Republic of Korea, China/ Taiwan, China/Hong Kong, China (PRC), China/Macau, Vietnam, Laos, Cambodia, Thailand, Myanmar, Malaysia, Singapore, Brunei,

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Indonesia, The Philippines and Russian Pacific Coast Provinces. In addition, CMA CGM has published a general rate restoration (GRR) from Asia to Mozambique and West Africa. With effect from 16 July, the French carrier will apply a GRR of US$150/TEU from Asia, including China, Taiwan, South Korea, South East Asia, East Coast of India, Bangladesh & Sri Lanka and excluding Japan, to all ports in Mozambique. This general rate restoration will apply to dry, reefer, out of gauge (OOG) and break @Businessdayng

bulk cargo. In addition, CMA CGM will apply the following GRR, effective from 20 July for dry reefer, OOG and break bulk cargo with China, South Korea and Taiwan as origin while all West African ports as destination would pay quantum of US$200 per 20’ container and US$400 per 40’ container. Also, cargo coming from South East Asia & East Coast of India and going to any West African ports is also expected to pay quantum of US$200 per 20’ container and US$200 per 40’ container.

Wednesday 12 August 2020

BUSINESS DAY

TRANSPORTation Motoring

RailBusiness

ModernTravel

Roads

Massilia’s new Pajero Sport packs a punch ... Rugged, smoother, more comfortable MIKE OCHONMA Transport Editor

mid coronavirus pandemic ravaging global economies an bringing many businesses to their knees, businesses are gradually picking up among local automotive dealers with Massilia Motors, the sole distributor of Mitsubishi Motors in Nigeria officially unveiling the 4th generation Mitsubishi Pajero Sport SUV (Sports Utility Vehicle) in a first of its kind virtual car launch in Nigeria. Affected by the Covid-19 protocols in Nigeria, the event was witnessed on YouTube by customers and other stakeholders who were shown the salient features of the 2020 Mitsubishi Pajero Sport SUV, and also taken on a 360° virtual tour of the debutant premium model. Managing director of Massilia Motors/country delegate of CFAO Nigeria, Thomas Pelletier stated that the new Mitsubishi Pajero Sport is tough, reliable, and comfortable. According to him, “The 2020 Pajero Sport combines

off-road performance and luxury on-road comfort. It is a proper 4x4 that I have had the opportunity to experience here (Nigeria) during the rainy season. It has a comfortable suspension and a powerful engine. It is simply rugged and smooth.” Pelletier stated that Massilia Motors, in sustaining its tradition of quality after-sales services, has unveiled a Service

plan, if broken down, would cost only N12,500 monthly for Mitsubishi customers. The new Mitsubishi Pajero Sport is a blend of innovation and advanced technology bound to be welcomed by the industry and eventual owners. At the launch, Olatunji, general manager in charge of sales of Massilia Motors, demonstrated how to open

the tailgate (booth) automatically without using his hands. He said, “even when both hands are engaged with shopping bags, you only need a movement of your foot under the rear bumper to open it. Also coming as an irresistible new feature is the Smartphone-Linked Display Audio (SLDA). This infotainment feature is easier to see with its 8-inch display screen

and enables the driver to link his phone to the car and have access to his information including satellite navigation i.e. Google maps on touchscreen via Android Auto or Apple CarPlay apps. Additional features is the 8inch LCD coloured meter cluster, an upgrade of the electronic parking brake (EPB), now coming with the auto hold function, the forward collision mitigation system (FCMS), adaptive cruise control (ACC), blind spot warning (BSW), etc. The 3.0-litre V6 petrol engine comes with a remarkable fuel economy and an 8-speed automatic transmission. The new Mitsubishi Pajero Sport is an All-Terrain champion, just as a roof spoiler and shark fin antenna have also been added, with a variety of colours to choose from. Massilia Motors is a joint venture of the CFAO group and the Chanrai Group, uniting forces to offer ultimate customer satisfaction. Other Mitsubishi models available in Nigeria are ASX, Eclipse Cross, Pajero, Outlander, and the L200 Pickup.

Stallion, Bajaj tests Keke ruggedness on 5000 km rally

tallion Auto Keke Limited and the new and exclusive distributor of Bajaj Auto for 3 wheeler and 4 wheeler business in the country last weekend flagged-off the “First Keke Rally In Nigeria’’. The Keke rally comprises a convoy of 5 Kekes with their experienced riders, a branded truck for customer engagement and market activation and security agents, amongst others. Expected to kick off at the Stallion Bajaj showrom at Ijesha, in Lagos, the rally is expected to cover 5,000 kilometres driving through 28 cities in sixteen states across the country. This rally will stand testimony to the fact that the New Baba Bajaj is a strong and durable Keke for the Nigerian roads. It will further add to the brand promise that the new baba Bajaj, runs faster and lasts longer. Starting from Lagos, the rally will cover Ogun, Oyo, Kwara, Kogi, Benue, Enugu, Ebonyi, Cross River, Akwa Ibom, Abia, Rivers, Anambra, Delta, Edo, Ondo, Ekiti, Osun States. The durable drive of 5000kms will spread the message of being responsible and maintain hygiene to stop the spread of coronavirus. The team is also scheduled to visit identified cultural sites in the states as

a comprehensive exercise designed to celebrate the Nigerian history and its deep rooted indegenous culture. Kekes journey to these sites and the background stories will connect the young Nigerians to their rich heritage. At an interactive session with motoring journalists at the dealer launch, Manish Rohtagi, managing director, Stallion Auto KeKe Ltd said, Bajaj is the pioneer Keke brand in Nigeria well known for its durability, speed and overall performance and is loved by millions. He promised that, the new distributorship will www.businessday.ng

bring immense value to the dealers, fleet owners, riders and consumers, adding that Stallion’s advantage lies in its decentalised operation and quicker decision making, which will help drive operating efficiency. The business is expected to grow at a much faster rate as Stallion will actively push for the adoption of Keke by existing partners and the customer ecosystem. It will bring differentiated customer service, and ease of spare part availability through its existing footprints in the auto industry. He also explained that

plans are underway to engage more dealers across the country and provide first class after sales support aiming at sharp service within 4 hours, rider training schools and Rider and Mechanic empowerment programs. Stallion Bajaj boasts of sales and service outlets at 96 locations spread across Nigeria and will add 30 more Exclusive and MFS outlets by the end of 2020 taking the count to 126. The areas of focus would be Illorin, Yola, Warri, Benin, Yenogoa, Sokoto, Kebbi, Lokoja and Bauchi. Also speaking, Arpita

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Luthra, general manager in charge of marketing for Stallion Group, highlighted that Stallion Auto Keke Ltd will invest significantly in improving stake holder’s interest, business and livelihood. Be it landmark consumer connect campaigns like the Stallion Bajaj Keke Rally doing the durability drive of 5000 kms touching 28 cities or rider training facilities or scholarship programs for the Keke riders and mechanics, the alliance of Stallion and Bajaj will enable progress, improve lives and dominate the market. @Businessdayng

Rail needs innovative risk-sharing structures to thrive

frican railway owners and operators should consider linking freight and passenger rail services as a way of diversifying the risks and rewards that have become evident in these systems on the back of the Covid-19 crisis, says Development Bank of Southern Africa transport, logistics and bulk water infrastructure finance principal Nangamso Maponya. Speaking at an Africa Rail webinar, hosted by event organiser Terrapinn, Maponya said she would like to see how the railway sector and its investors could diversify or mitigate the risk of revenue loss on one system while using the revenues from the other side to balance the scales. She noted that, since the Covid-19 crisis gained traction, with lockdowns in various African countries being implemented, passenger rail had had a reduction in business of between 50 percent and 90 percent. “There has been a massive reduction in passenger rail because of low economic activity, as well as physical distancing protocols.” Heavy revenue losses resulted in some railway systems becoming unsustainable, thereby placing the burden on government to inject additional funds to keep the systems operating. “This kind of risk that came with the virus was not well thought through in advance. No one saw this coming and we were underprepared for the impact it would have on the transport system.” She stated. The webinar agreed that, in the case of Covid-19, the transport sector was particularly affected because it became an unwitting primary enabler of viral transmissions across the country; therefore, the transport sector’s risk profile should be reconsidered in future. “We are forced to become more resilient from a socioeconomic perspective, and Africa’s leaders will have to rethink many prior assumptions to find new balances for individuals and the collective,” commented Winston Cluff; managing director at Cluff Trade & Investment. Switzerland-based Rail Working group managing director Howard Rosen added that global collapse of commodity prices and general reduction in trade resulted in railway sector facing these same challenges globally not just in Africa, notwithstanding Africa’s generally having less developed infrastructure and less financial resources at its disposal for infrastructure development. Rosen noted that, from 2010 to 2018, debt to gross domestic product ratio increased from about 40 percent to 59 percent across Africa. This had only been worsened by Covid-19. “We know we need to invest in the future of railways, but how are we going to do it when governments’ resources are increasingly constrained because of the outcome of the Covid-19 crisis”.

Wednesday 12 August 2020

BUSINESS DAY

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Wednesday 12 July 2020

BUSINESS DAY

NEWS Afrinvest sees upside in some insurance stocks amid economic downturn

CBN to roll over N144.8bn maturing government instruments today he financial market liquidity w ill improve as the Central Bank of Nigeria (CBN) is expected to rollover maturing government bills worth N144.8 billion at the Primary Market Auction (PMA) on Wednesday (today). A breakdown of the instruments showed that N56.8 billion Open Market Operation (OMO) and N88.0 billion Nigerian treasury bills would be maturing this week. “We expect investors to trade cautiously in anticipation of the PMA, we also expect yields to remain low as investor demand on the bills still overshadow supply,” analysts at Afrinvest Securities Limited said. Trading in the Nigerian Treasury Bills secondary market was mildly bullish as slight demand from lost bids of about N202.3 billion at the Primary Market Auction that held 2 weeks ago filtered into the market. The week kicked off with high liquidity in the system to the tune of about N778.0 billon on Monday, but this plunged to about N268.6 billion on Tuesday following Cash Reserve Ratio (CRR) debits by the CBN. In the absence of inflows from maturities and Federal Account Allocation Committee (FAAC) disbursements during the week, liquidity further declined to N220.7 billon on Friday, a report by Afrinvest noted. According to the report, mild buying interests were recorded across the trading sessions and as a result, average yield dipped, albeit marginally, by 4bps W-o-W to close at 1.7 percent. A bulk of the demand

was witnessed at the short and medium end of the curve, particularly the 27Aug-20 (-28bps), 14-Jan-21 (-20bps) and17-Sep-20 (-15bps) maturities while the long-term instruments traded relatively flat. At the foreign exchange market, Naira was unchanged at all market segments on Tuesday. Dollar was quoted at N385.50k, and N474 at the Investors and Exporters (I&E) forex window and the black market respectively. The local currency was stable at N475 and N381 per dollar at the retail bureau and official spot window respectively. The foreign exchange market opene d w ith a marginal depre ciation of N0.03k to N386.20k on Tuesday morning as against N386.17k opened with on Monday, data from FMDQ showed. Last week, the foreign reserves of CBN experienced a fall as FX outflows continue to surpass inflows, declining by $222.14 million to $35.66 billion as of August 7, 2020. Moreover, the update of spot rate on CBN ’s website from N361/$ to N379/$ is an indication of the step taken by the CBN for the unification of its exchange rate. In the I&E FX market, Naira appreciated by 0.13 percent as the dollar was quoted at N385.50k on Monday compared to N386.00 as on the closing of the previous week. Most participants maintained bids between N359.00 and N390.00 per dollar, according to a report by FSDH research. The foreign exchange daily turnover dropped by 95.69 percent to $3.97 million on Monday from $92.22 million recorded on Friday last week, data from FMDQ revealed.

CHANGE OF NAME

CORRECTION OF NAME

Hope Moses-Ashike

I, formerly known and addressed as Feyisikemi Tolulope Oluwatusin now wish to be known and addressed as Oluwafeyisikemi Victoria Gbabijo. All Former documents remain valid. General public please take note.

CHANGE OF NAME

I, formerly known and addressed as Miss. Oluwaseun Ayodele Alabi now wish to be known and addressed as Mrs. Oluwaseun Ayodele Omotayo. All Former documents remain valid. General public please take note.

...downgrades AIICO, Consolidated Hallmark, AxA Mansard

My name was wrongly written on my BVN in Access (Diamond) Bank as Olamide Olamide Comfort instead of Akintola Olamide Comfort. Henceforth, I want to be addressed as Akintola Olamide Comfort. All former documents remain valid. General public should take note.

CHANGE OF NAME

I, formerly known and addressed as Miss Sorinola Busola Omolara now wish to be known and addressed as Mrs Ndaman Busola Omolara. All Former documents remain valid. General public please take note. www.businessday.ng

BALA AUGIE

espite investor apathy towards insurance stocks due to lack of growth prospect in the industry, analysts at Afrinvest Securities see upside potentials in Cornerstone Insurance as current valuation presents 46.54 percent to its current market price of N0.60 as August 11. Analysts at the investment house, in its insurance sector outlook, said it recommendations were driven by Cornerstone’s operational efficiency compared to peers in the composite insurance. For instance, the insurer’s net income margin increased to 40.74 percent as at June 2020 from 0.71 percent as at June 2019; the improvement in profit was largely driven by uptick in investment income and slow growth in expenses. Analysts at Afrinvest Securities had a Sell “ratings” on AIICO Insurance (due to poor management of its Life and Non-Life Annuity),

Consolidated Hallmark (as a result of its exposure to sectors that would be affected by the pandemic), and Wapic (Due to its lacklustre operating performance. They also placed a “REDUCE ratings” on Mansard (on the back of its foreign liability exposure and expected rise in claims). The listed insurers in Africa’s largest economy do not have an attractive valuation to attract or allure the right investors as the industry is beset by a myriad of challenges undermining growth. Unlike banks that are awash with liquidity because of their strong capital base that enable them surmount macroeconomic headwinds and investment in short term government securities to underpin earnings, insurers weak capital position hinders them from participating in big ticket business. Guaranty Trust Bank, the largest lender by market capitalization, has a shareholders’ fund of N575.56 billion as

at December 2019, which is 2.87 times the combined total equity of 13 largest insurers. Analysts say the harsh and unpredictable macroeconomic environment, poor regulations, apathy towards insurance, and lack of trust for operators by the general public makes it difficult for insurers to thrive. With a high unemployment rate and inflationary pressures that hinders consumers from opening their springs, insurance in this part of the world is for the rich. Little wonder Nigeria continues to lag its peers in terms of penetration which stood at 0.5 percent compared with South Africa (12.9 percent), Kenya (2.8percent), Angola (0.8percent) and Egypt (0.6percent) while density at $6.2 also remains weak compared to South Africa ($762.5), Kenya ($40.5), Angola ($30.5) and Egypt ($22.8). There is light at the end of the tunnel as analysts at Afrivest Securities are of

the opinion that the new minimum capital set by the National Insurance Commission would spur mergers and acquisitions needed to galvanize the industry. “We preach consolidations in form of mergers and acquisitions in order to leverage synergies and reduce operational costs,” said analysts at Afrinvest Securities. The coronavirus pandemic that ravaged global economy has put the major source of revenue and foreign exchange earnings under pressure, as the outlook for the overall economy and the insurance sector remains bleak. Against this backdrop, the IMF forecasted that the Nigerian economy would contract by 5.4 percent given external headwinds. The insurance sector may suffer from an economic recession due to lower subscriptions as an insurance premium represents discretionary expenses to most consumers.

L-R: Adesuyi Olagbegi, assessor, disciplinary tribunal; Henry Olayemi, past president; Olatunde Amolegbe, president/chairman of council; Adedapo Adekoje, immediate past president, and Adedeji Ajadi, registrar/chief executive, all of Chartered Institute of Stockbrokers (CIS), during the investiture of Amolegbe as the CIS 11th president and chairman of council, in Lagos, yesterday. Pic by Oalwale Amoo

Air Peace to recall sacked pilots as minister intervenes IFEOMA OKEKE

he management of Air Peace has agreed to recall some of its sacked pilots following the intervention of Hadi Sirika, Nigeria’s minister of aviation in the crisis between the airline and the leadership of the National Association of Airline Pilots and Engineers (NAAPE). In a verbal agreement reached at a meeting on Tuesday involving the disagreeing parties, Allen Onyema, chairman of Air Peace, acceded to the minister’s appeal for the recall of the maximum number of pilots that the airline can accommodate without

going under. In their presentation, NAAPE, led by Galadima Abednego, its chairman, said that some missteps could have been made in the course of the standoff between the airline and the union, and appealed to the minister to intervene in order to resolve the impasse. Abednego said that as a union it was a painful thing to see a large number of their members thrown into the labour market, and further appealed to employers of labour to see the union members as partners, and not adversaries. On his part, Onyema expressed disappointment over what he called the ingratitude

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of some of the airline’s pilots after everything done to make them comfortable on their jobs. He recalled how Air Peace had trained over 80 pilots and an equal number of aircraft engineers, giving its staff the best remuneration package within the sector only for them to disappoint at a time their understanding was needed. He, however, commended Hadi Sirika for providing the required leadership to the industry and promised his full cooperation in ensuring the growth of the aviation sector in Nigeria. The aviation minister in his remarks called for the @Businessdayng

understanding of everyone, especially the labour unions, of the prevailing situation in the aviation industry, saying it was not the time for unnecessary upheavals. He commended Onyema for his enormous contributions in developing the industry, but appealed to him to recall the maximum number of the sacked pilots that the airline can comfortably accommodate in the prevailing circumstances to which airline operator agreed. The minister called on all stakeholders in the aviation industry to put all hands on deck in ensuring a rapid recovery from the effects of the Covid-19 pandemic.

Wednesday 12 August 2020

BUSINESS DAY

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Wednesday 12 August 2020

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Wednesday 12 August 2020

BUSINESS DAY

News Nigeria’s states are sinking in a sea of N4trn domestic debt

he economies of Nigeria’s states are sinking under the suffocating weight of domestic debt owed by the states and which has now ballooned to more than N4 trillion. This debt burden excludes the issuance of Naira denominated bonds which currently stand at over N390 billion. Analysts at FBNQuest say the total domestic debt of state governments as at end of March 2020 stood at N4.11 trillion, equivalent to 2.9 percent of Nigeria’s Gross Domestic Product (GDP). The figure is unchanged from three months previously but it had increased by a frightening N840 billion in 2015 alone, when the first of five debt relief packages were launched by the Federal government. According to the analysts, the annual rise in the debt burden of the second tier of government has since slowed with the states now subject to greater regulatory oversight. In addition, Nigeria’s banks have generally lost their appetite to lend to states

due to the weakness of the oil price and its impact on the monthly distributions by the Federation Account Allocation Committee (FAAC), on which most states depend. The five largest debtors at the end of 2019 included three oil producing states. The outstanding debt of these five states made up 32.7% of the total for all 36 states, leaving the sizable balance divided between 31 other state governments and the Federal Capital Territory. As with external borrowings, Lagos State which is the largest domestic debtor in terms of bank borrowings and bond issuance is judged by its accounts for 2019 to be well placed to meet its debt obligations. Its total revenue of N645 billion, of which internally generated revenue (N348bn) comfortably exceeded statutory allocations from the FAAC (N230bn). Net earnings of N366 billion were translated into an overall surplus of N67 billion after capital items, depreciation and public debt service (N63bn).

Nigeria’s micro pension suffers setback on poor savings culture, COVID-19 Modestus Anaesoronye

he lack of savings culture among Nigerians and the current economic downturn occasioned by COVID-19 pandemic have frustrated the effective take off and full implementation of the country’s micro pension scheme. As at the end of May 2020, only about N24 million has been generated from the informal sector scheme, a year and six months after it was launched by President Muhammadu Buhari in the wake of his second-term bid. Micro pension, an offshoot of the Contributory Pension Scheme (CPS) now swelling with over N10.8 trillion in assets under management with over 9 million registered contributors, is expected to galvanise the informal sector players and provide them with effective plan for retirement.

… as industry generates paltry N24m 18 months after launch Unfortunately, programmes initiated by the National Pension Commission to kick start the process of mass enrolment have been affected by COVID-19 pandemic, which did not only affect players’ drive but also affected the small and medium scale businesses that were targeted for enrolment. Analysts at Stanbic IBTC Pensions Managers had said a statement on their website in the wake of the pandemic that coronavirus had hit investment globally, and would hurt the country’s over N10 trillion pension funds, especially in the stock market. “The coronavirus pandemic that has hit investment globally would hurt the country’s N10.22 trillion pension funds, especially in the stock market. Although only 5 percent of funds which amount to about N511 billion are invested in the capital market, the fund would have

tumbled if PenCom had not limited investment of pension managers in the stock market.” According to the Pension Fund Administrators (PFAs), the Micro Pension Scheme enables organisations with less than three employees, self-employed individuals and other workers in the informal sector to contribute voluntarily towards retirement. A closer interaction with operators, particularly the PFAs, who are the natural sellers of the product, reveals an insignificant impact as the potential consumers were said to be bugged down with survival and meeting basic needs. According to many, the slow growth of the economy, growing unemployment, poor access to funding for business, declining standard of living among households, high inflation are bottlenecks that have not enhanced appetite

L-R: Philip Shaibu, deputy governor, Edo State and running mate; Governor, Edo State, Godwin Obaseki, candidate of the People’s Democratic Party (PDP) in the forthcoming gubernatorial election, and Deke Kanoba, Egiegbai of Ekperi Kingdom, during the governor’s visit to the traditional ruler in Etsako Central Local Government Area of Edo State.

Unlock stranded oil field, OML11, stakeholders urge government Olusola Bello

takeholders in the Nigerian oil and gas industry have again emphasised the need for the government to make haste and ensure the unlocking of Oil Mining Lease 11 (OML11), which has remained dormant since Shell Petroleum Development Company (SPDC) withdrew from the location in 1993. According to them, the oil bloc harbours a lot of reserve that could have been to the advantage of the country today but nothing is happening in it. They says the Department of Petroleum Resources (DPR) is currently running the 2020 bid round for 57 marginal oil fields located offshore, swamp and onshore terrains in the Niger Delta. This exercise is expected to be concluded this year. The activities are run in accordance with specific guidelines made public as part of the bid process. When completed, the fields would be allocated to the oil companies who successfully scaled through the Technical and Commercial tender evaluations, and pay the required signature bonus. Thereafter, the companies will be given licence to enter into the fields to commence exploration and development to produce oil and gas. The 57 fields selected care-

fully excluded all the fields in OML 11 within the geographical territory of Ogoni land that have remained locked in due to crisis in the communities, and insecurity. The exclusion, they say, is necessary to avoid further crisis, as every attempt by the Nigerian National Petroleum Company (NNPC) to cede the Ogoni oil fields to an operating company for resumption of Exploration and Production (E&P) activities have failed, since the forced shut down in 1993 when the operator, SPDC, was chased away. “All the plans to get an operator back have failed, primarily because the attempts were done secretly, with selected companies not going through an open and transparent process, in line with recognised industry practices. Some of these companies included Belema Oil, Robo Michael, TEN Oil, and more recently Sahara Energy. All these were rejected by Ogoni people because they were allegedly forced on them,” the state. According to Eddie Wikina, former managing director, Treasure Energy Resources Limited, and an ex-general manager in Shell Nigeria, it is generally a considered opinion that any process that will lead to a successful resumption of E&P activities in Ogoni must include views and wishes of the people, and they must be open and transparent. www.businessday.ng

for savings. “You know micro pension is voluntary, so people want to first of all meet basic needs; even the formal sector that is compulsory, how many employers are complying,” one of the operators asked. President Buhari at the launch of the micro pension scheme on March 28, 2019, said the scheme targets the significant majority of Nigeria’s working population who incidentally operate in the informal sector. With an estimated 80 million people working in the informal sector of the economy, the Micro Pension Plan would take care of participants from various informal sector workers - including market women, members of the National Union of Road Transport Workers, and members of textile, garment and tailoring associations, among others, the president had said.

Here’re 4 major takeaways from Lagos reformed Land Use Charge 2020 CHUKA UROKO

ollowing the agitation and public outcry that trailed the new Lagos Land Use Charge (LUC) Law 2018, the Babajide Sanwo-Olu administration decided to undertake a thorough review of the law and recently came out with what is now known as Lagos Reformed Land Use Charge 2020. The state government had, under former Governor Akinwunmi Ambode in 2018, repealed its 2001 Land Use Charge Law and replaced it with a new Land Use Charge Law 2018, which did not only increase the charge by almost 400 percent, but also consolidated all property and landbased rates and charges into the land use. Accordingly, all tenement rates law, ground rates law, the neighbourhood improvement charge and all other similar property rates or charges, other laws or amendments to any

such property laws ceased to apply to any property in the state from 2018. But the reformed LUC Law has set aside all that and reverted to pre-2018 charge, bringing relief and lightening the burden placed on the shoulders of property owners by the LUC Law 2018. “In the reformed Land Use Charge, we have enlarged the definition of who is a pensioner. The scope of that definition has been enlarged to include retirees from private sector organisations who can now enjoy full exemption from the charge in respect of properties they own and reside in,” Rabiu Onaolapo Olowo, the state’s commissioner for finance, explains. Olowo, who spoke at a media programme in Lagos, states that the reformed LUC comes with 48 percent charge reduction, meaning that a property owner in Ikeja, for instance, who paid N27,000 by 2018 rate, will now be paying about

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N14,000 or thereabout. Another take-way from the reformed LUC is that there is a reintroduction of 25 percent discount for early payment of the charge. “All property owners who are able to pay their charge before the due date will enjoy this concession,” the commissioner emphasises. He states further that the new LUC also comes with some waivers, which he explains, were introduced by the state government as a form of palliative to cushion the hash economic and social impact of Covid-19 pandemic on the people. “Because of that, all penalties for payment defaults for 2017, 2018 and 2019 have been waived. But government is not waiving the amount payable. What we are waiving are the interests and penalties for failure to pay. This means that the 2018 law subsists for those charges payable then,” he explains. For purposes of clarity, the commissioner says LUC was @Businessdayng

calculated based on land area, the building area, the kind of building on the area and the value of the land on which the building stands. This means that a storey building will attract more charge than a bungalow. Again, it means that a building in Ikoyi attracts higher rate charge than another in Ikeja, because the land values in the two areas are different. Olufemi Dipe, a property owner in Ikeja, describes the reformed LUC Law as a very good development from the government, thanking the government especially for the inclusion of pensioners who retired from the private sector in the list of those exempted from paying the charge. Another property owner residing in Akute, who identified himself simply as Hyacinth, lauds the government on the reformed LUC, noting, “This is the best thing to happen in the state since the time of Lateef Jakande.”

Wednesday 12 August 2020

BUSINESS DAY

news Lagos targets local production of 1m electricity... Continued from page 1

associated with estimated billing. Olalere Odusote, commissioner for energy and mineral resources, in an interview with BusinessDay states that the Eko Innovation Centre (with the Ministry of Energy and Mineral Resources as title sponsors) is promoting efforts to provide affordable meters to the populace by facilitating a meter design Hackathon (a bidding competition) to improve energy distribution, monitoring and preventing revenue leakage. “On the campaign trail there were two big issues that Lagosians complained the most about; it was traffic and transportation and lack of constant supply of electricity. So, instead of putting up big electricity projects that may or may not be completed, we decided to target where the problems are, to invest in those areas because our job is to solve problems. What the governor has said in his wisdom is that as much as possible we should meter all Lagosians over the next four years,” Odusote says. The programme that will see design teams produce hardware and software designs for meters has kindled the interest of local engineers, bankers and local meter assembling firms who are now in talks with the government on how to scale scheme and replicate it across Nigeria. The combined winning team comprising software and hardware design teams will be awarded N7 million and a percentage of the intellectual property royalties from the winning solution. “Since we opened the meter portal, we have received a total of 51 hardware teams that have registered and 58 software teams have registered to participate in the hackathon. Eleven teams have submitted their prototype designs and 9 teams on the software side have submitted their designs,” the commissioner states. The initial plan of the scheme was to design a prototype that would be taken to China to mass produce and eventually develop capacity locally to scale production across Nigeria, but the Covid-19 has compelled the government to boldly seek initiatives to manufacture locally, he notes. At the current cost of

over N44,000 for a singlephase meter, it will cost an estimated N44 billion to provide enough meters to meet the Lagos State metering gap, which the commissioner puts at approximately 1 million. However, the state is hopeful that the designs will deliver smart meters that will cost at least half of the current cost. One way the state is trying to keep costs down is, if designs reach the stage of mass production, by partnering with companies that manufacture components. According to Odusote, the state government is already working to revive El Sewedy Electrical Nigeria Limited, a transformer and other electrical component manufacturer, a joint venture between Lagos State government and the EL Sewedy Group of Cairo, Egypt, located at TogaZanmu in Badagry. The El Sewedy factory was commissioned in October 2010 by the administration of Babatunde Fashola with an installed capacity for 1,400 transformers per annum. The factory, which was planned to expand into the production of electrical meters, however, shut down operations after a few years. Metering is a thorny issue in Nigerian electricity supply industry. According to a report by the Nigerian Electricity Regulatory Commission (NERC), of the 10,374,597 registered electricity customers, only 3,918,322 (37.77%) have been metered as at the end of the fourth quarter of 2019. Thus, 62.37 percent of the registered electricity customers are still on estimated billing, which has contributed to customer apathy towards payment for electricity, the commission said. In 2018, NERC began a Meter Asset Provider programme to allow thirdparty investors provide meters for customers at a fee but the levy and the foreign exchange challenges hamper the project. According to NERC, only 22,825 end-use customers’ meters were installed during the fourth quarter of 2019, a significant fall from the 83,768 meters installed during the third quarter. If the programme succeeds, the Lagos government is looking to replicate it across Nigeria. www.businessday.ng

L-R: Ayo Ibaru, COO, Northcourt; Lanre Howells, MD, Beyond Building; Fela Durotoye, CEO, Gemstones Group; John Oamen, CEO of Cutstruct, at the flagging off of Phoenix Mall, Ogudu, Lagos.

In numbers, how Nigeria would look... Continued from page 1

be just as hit by the virus as the former but for low testing, which has kept numbers artificially low in Nigeria.

Brazil’s average age of 31 years compared with Nigeria’s 18, however, suggests the latter should record fewer fatalities. By testing approximately 13.2 million people, Brazil has carried out tests for 6.3 percent of its population. The virus cases reported in Brazil and the number of tests done mean one out of four people tested returned positive, that is a test positivity rate of 22.9 percent. Nigeria on the other hand has tested 317,496 people, 0.15 percent of its 200 million people, and would need to test 12.6 million people to be at par with Brazil. If Nigeria did that many tests, the number of people infected with the virus could be as much as 1.8 million, using the country’s test positivity rate. Nigeria’s total cases of 46,867 as against the number of tests done mean one in every six people tested had the virus, which gives a test positivity rate of 14.7 percent. If Nigeria did the 12.6 million tests required to be at par with Brazil, a test positivity rate of 14.7 percent means Nigeria would have recorded 1.9 million cases, ranking it fourth of countries with the highest cases of the virus globally, behind US, Brazil and India and ahead of Spain, Italy and the UK (932,526) combined. That is also 38 times more than what the country is currently reporting. “Nigeria would find many more cases if there was more testing,” Charles Robertson, the global chief economist at Renaissance Capital told BusinessDay by email. “But Nigeria is also a young country, so many more cases will be asymptomatic and it should be less deadly,” Robertson said. The implication of many more people being infected with the virus than is reported is the greater risk it adds to the rate of spreading, making the virus deadlier.

Nigeria’s fatality rate is 2 percent, having recorded 950 deaths as at August 12. That means only 2 percent of infected Nigerians have died, which is lower than the 3.6 percent global average and Brazil’s 3.3 percent. Nigeria’s fatality rate means the number of deaths from the virus would have been 36,000 if Nigeria tested as many people as Brazil (12.6m). Nigeria is also the only country in the world with over 200 million people to have done below 1 million tests. That has helped keep reported cases of the virus in Nigeria 12 times lower than the 545,476 cases reported by the continent’s virus hotspot, South Africa. South Africa has carried out approximately 3.2 million tests despite having a population less than Nigeria’s at 55 million. More than one million people in Africa have been infected with the coronavirus but health experts say the numbers do not give a full picture of the outbreak on the continent. As at August 11, Africa had recorded a total of 1,061,661 cases, and more than half of these are in South Africa. Matshidiso Moeti of the World Health Organisation said the cases were a small fraction of the global count but low testing in many African countries meant infections had been under-reported. The WHO is concerned that testing is not available at the grassroots level in Nigeria. “The challenge is how to decentralise these tests available in states and in countries like Nigeria, where we need to get to people in the local governments,” the agency’s programme manager for emergency response for Africa, said. Why Nigeria is not testing enough people Nigeria currently has the capacity to test only 2,500 samples a day and just half of these are actually administered each day because of the shortage of human resources, testing kits, and laboratories, and case definition for testing that prioritises symptomatic cases and their contacts. While testing is free in state-

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owned laboratories, there are few of these facilities and they are in major cities. This often means that health officials sometimes have to transfer samples to other states to confirm results due to a shortage of test kits. Chike Ihekweazu, director, Nigerian Centre for Disease Control, acknowledged the slow turnaround time for testing and said the response was partly due to the challenge the country faced initially trying to repurpose its laboratories to test for the virus. Ihekwaezu said South Africa in contrast, with the highest numbers of testing on the continent and the highest numbers of cases, was able to easily do this. Despite the yawning gap in testing, Nigeria is reporting lower cases of the virus, a development critics take a dim view of. Lagos, the epicentre of the virus in Nigeria, with 15,957 cases, recently closed health centres specifically created to treat COVID patients. Last week, the state’s governor, Babajide Sanwo-Olu, announced that worship centres could accommodate half their capacity during services and restaurants were back in business, citing a steady decline in cases. There are concerns that people there are self-managing their symptoms at home. Lagos has tested 66,431 samples so far, a fraction of its 20 million residents. Another barrier to testing is cost, according to Mobihealth International CEO, Funmi Adewara, who was interviewed by the CNN. Adewara’s organisation is among those assisting laboratories with Covid-19 test sample collection. Private facilities charge $132 for tests in addition to the cost of processing the tests. The fee, she says, is prohibitive for a majority of Nigerians without health insurance, especially as many have been hit by the economic impact of Nigeria’s five-week lockdown to tackle the pandemic. “How many people have that kind of money to pay for this test?” Adewara said. @Businessdayng

She added that Nigeria’s testing model excludes asymptomatic carriers, a critical data point that could give health officials a clearer insight into the outbreak in the country. “We haven’t tested enough to the point that we have data to interpret the pattern of infections if we’re only testing those with symptoms, but the good thing is that the mortality rate seems low going by official figures,” Adewara told CNN. Why Brazil is so similar to Nigeria The large population of both countries makes it almost impossible to enforce strict compliance with safety measures from social distancing to wearing face masks and washing hands regularly. High rate of poverty and lack of access to basic amenities like clean water in both countries also means several people cannot afford face masks and other protective gear, and cannot wash hands regularly. In the densely packed favelas (slums) threaded through Brazilian cities, social distancing is not feasible and not working means not eating, especially with the cash-strapped state unable to provide enough support. This sounds all too familiar for Nigerians. The densely populated commercial capital of Lagos also makes it hard to maintain social distancing. Nigerians who do not own cars are in the majority in a country where 87 million people are in extreme poverty and live under $1.90 per day. That means the majority are still crammed up in commercial buses when moving around. Not commuting to their places of work despite the risk they are exposed to also means not eating for many Nigerians. Like Brazil, strict lockdown measures had to be eased after it became clearer that the longer they stayed the more they threatened the economy and the livelihoods of Nigerians who feed from daily wages. The face mask wearing culture is also waning in Nigeria, as is the case in Brazil. Some people dump it in their pockets until they are mandated to wear it to enter into a banking hall or a shopping store.

Wednesday 12 August 2020

BUSINESS DAY

Insight Piracy could worsen on Nigerian waters as minister ignores Senate directive on anchorage contract Continued from page 1

en as Federal Government agencies seek to scuttle a contracted security arrangement ran by Ocean Marine Solution Limited, and the Nigerian Navy.

tics for the Nigerian Navy to effectively perform 24/7/365 patrol operations as well as to provide the required protection for vessels waiting to berth at the Lagos ports. “That since no fraud is found in the operations of the OMSL and is operating at no cost to government, OMSL should be allowed to continue its operation at the SAA until such a time when a better and more cost effective system is put in place by the government,” the lawmakers said. The lawmakers further recommended that the Nigerian Navy should be properly funded to enable it procure needed vessels to clear the over one hundred and fifty (150) vessels deficit to enable them carry out their constitutional responsibilities without over depending on Private Maritime Logistics Support Companies (PMLSC). Suspending the contract imperils OMSL’s over $400 million investments and does not give investors confidence in the country. Those familiar with the SAA project say the cost of vessels acquisitions and operational running cost is at no cost to Government and was never mandatory for ships, rather it involved ships that desire the service under a willing buyer, willing seller arrangement. OMSL has a fleet of 42 purpose-built and Nigerian Navy (NN) approved Offshore Patrol Boats Ocean Marine Solutions, the Federal Government will be saddled with the task of buying these same equipment alongside training personwww.businessday.ng

nel to run operations. Hosa Okunbo, OMSL chairman, during his presentation at the National Assembly joint committee that investigated its activities said, “The company has always operated on the charges to ships operating under the SAA” Cost-effective Enquiries show that it cost vessels that patronise OMSL operated SAA an average of $11,500, which comes to about $2500 for the first day and $1500 for the remaining days in a seven-day period which is a maximum period that vessels must berth at SAA for the service provided. Operators find it cheaper than hiring mercenaries for protection. For example, a company has to pay $225,000 on a one-month voyage at a cost of $2500 per mercenary which comes to $7500 a day over a total one-month voyage of 30 days from Europe and much higher from farther destinations like Singapore and United States and Far East. But with OMSL, they pay only $11,500 for the exact days required their vessels. The SAA traffic is about

20 vessels at any particular time and they pay on average $1,650 per day, which generates about $33,000 daily to OMLS who own 8 vessels operating in the SAA. The company subsidies the cost of hiring its vessels to NPA at an average $4,150 per vessel but hires it to the oil companies for about $8,500 per day. Meanwhile, NIMASA under the supervision of federal ministry of transport hires similar vessels at $10,500 daily and currently has six of such vessels for enforcement at a total cost of $63,000. “This is why we say OMSL is on National Assignment rather than perceived misconception of profit making,” the company said. The APC-led government has said it would encourage local entrepreneurs even as it strives to encourage investors. Analysts say forcing out a local player runs contrary to this claim. Operators are concerned that this situation could imperil the sector. McGeorge Onyung, managing director of Jevkon Oil & Gas, Nigeria Limited, said his association is very concerned about the

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With an 853km coastline and rampant piracy, the Nigerian waterways presents a security nightmare. To reduce attacks, the Nigerian Navy and a private security company, OMSL collaborated and designated a secure place where vessels can anchor safely from the threat of pirate attack - Secure Anchorage Area – for a fee. However, Rotimi Amaechi, minister of Transportation suspended the scheme in February saying it is illegal and does not benefit the Federal Government. The Minister is paying an Isreali security outfit to train Nigerians to manage the security along the waterways at a cost of $195million. He also said some assets including six interseptor boats, six armoured vehicles, helicopter and special mission vehicles will be provided. But shipping companies are wary. Under government management, scores of pirate attacks occur and the SAA provided respite. In the first three months of this year, there were 47 attacks compared to 38 for the same period last year, according to the International Maritime Bureau (IMB). The Gulf of Guinea, a key production hub surrounded by eight oil exporting countries in West Africa, is now a global hot spot, accounting for 21 attacks so far this year and 90 per cent of all kidnappings at sea in 2019. They fear that with the decision to nullify OMSL’s contract could jeopardise their operation and actually lead to economic loss for the country as ships could began divert goods destined to Nigeria to neighbouring ports. Senate investigation The Senate and the House of Representatives on the Nigerian Navy, Marine transport and Finance investigated claims of illegality in the operations of OMSL in December 2019 and gave the company a clean bill of health. The lawmakers said the company should be commended for its genuine national interests in investing over $400million into the Security at the Secured Anchorage Area (SAA) in particular and the Nigerian waterways in general by providing the needed platforms and logis-

Suspending the contract imperils OMSL’s over $400 million investments and does not give investors confidence in the country https://www.facebook.com/businessdayng

safety of the nation’s waterways. “Our position have always been that we need a sustainable solution to security in our waters,” Onyung said. He stated that if nation’s waterways are not safe we will loss business, stressing that the country remain a very important vessel destination in Africa. He, therefore, called the parties involved to come to a round table discussion and tackle the grey areas with a view to resolving them in national interest. “We are ship owners we have high tickets bank transactions on and we carry heavy loans to acquire our ships and we do not want our business disrupt by hoodlums and charlatans and pirates so we would support any action whoever whether it is government or private solution that is going to ensure that our waters are safe from pirates so that we can conduct our businesses properly,” Onyung said. Also speaking in the same vein, Kennedy Rhima CEO of First Planet Energy, said that the continuous engagement of Ocean Marine Solution Limited will bring about the safety and security of vessels in the Lagos Pilotage district and called for a closer collaboration between the Nigerian Ports Authority, NPA, the Nigerian Navy and other stakeholders involved in the matter. “The matter has been a controversial, the safety and security of both vessels and personnel manning these vessels should be the goal of parties involved. I will urge @Businessdayng

Captain Okunbo to liase with the relevant agencies involved and straighten whatever needs to be straighten,” Rhima said. Since 2007, Ocean Marine Solutions with Operations Centres at key strategic locations in Port Harcourt, Warri and Lagos, provide vital static asset protection to the Oil and Gas industry and much-needed escort and mobile services for commercial vessels transiting through Nigerian water and Gulf of Guinea. Analysts say the government should consider what it could be giving up by insisting on suspending the contract. The amount paid by shippers can best be seen as a stipend compared to the cost of attacks and import loss that may occur from pirate attacks, which led the shipping companies embracing such idea of operation. Therefore, while the SAA operations continue to undergo criticism by government agencies, they (the concern agencies) refuse to accept the obvious and clear fact that the operational and maintenance cost are must to be offset, and such fund has to be included in the charges. Unfortunately, what is more worrisome in the developing situation is the fact that before the decision to sack OMSL was carried out, stakeholders were not consulted otherwise, it would not be in the interest of any to suggest the later. There are now concerns Nigerian waters which are vast and ports such as Port Harcourt as well as other coastal areas constantly been ravaged by sea pirates and operators, may get worse a situation that could have been avoided with the SAA. This could put Nigeria at an economic disadvantage and hinder investor confidence. Operators say the government should be looking at replicating similar services in Warri and Port Harcourt axis to reduce the piracy and increase revenue to these state governments so as to decongest the Lagos port which had now become a safe haven for ships because of OMSL. Some operators seeing cost savings from the SAA have urged the Federal Government to allow the programme to take over and manage the deep blue project because of the huge investment by the Federal Government which, if not efficiently managed could become another failed project.

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Malabu oil: Adoke’s trial stalled due to failure of EFCC to list witnesses Felix Omohomhion, Abuja

he Economic and Financial Crimes Commission (EFCC) on Tuesday, once again stalled the trial of former attorney-general of the federation (AGF) and minister of justice, Bello Adoke (SAN), at the Federal High Court, Abuja. The anti-graft body failed to provide names and particulars of witnesses in the proof of evidence as required by law when the case resumed Tuesday. Adoke alongside an oil magnet, Aliyu Abubakar are standing trial on a fourteen count amended criminal charge bordering on money laundering. They, however, pleaded not guilty to the charges. After their arraignment last week, the trial judge, Inyang Ekwo had adjourned till Tuesday, August 11 for commencement of trial. But the trial was stalled as the anti-graft agency allegedly breached section 379(1) of the Administration of Criminal Justice Act (ACJA) 2015, when it failed to supply the identities and summary of its witnesses it intend to call to the defendants. When proceedings resumed yesterday, the prosecution led by Bala Sanga called his first witness, one Clement Osagie, an official of the Cen-

to comply with the law. The other defendant however did not object to the request for a short adjournment following which trial judge in a short ruling adjourned trial to August 13, 2020. Ekwo in adjourning the trial ordered the prosecution to serve the defendants with all the particulars, processes that they are entitled to within 24 hours. In the amended charge, Adoke was accused of collecting the sum of N300 million from Abubakar as alleged proceeds of unlawful activities in 2013 while in the same year, he was said to have collected another sum of $2.2 million from one Rislanudeen Muhammed. He was also accused of disguising a sum of N300 million being proceeds of unlawful activities he accepted from the second defendant. On the other hand, the second defendant, Abubakar, was said to have in September 2013 received cash payment of $2 million and another $4 million from one Abdulkareem Mustapha while in September and October same year he was alleged to have collected another sum of $84.7. In another charge, the second defendant was accused of receiving $3 million and concealing the source of same.

tral Bank of Nigeria (CBN), who was on subpoena. However, Olalekan Ojo, counsel to the second defendant, objected to the witness on the grounds that he was unknown to his client as a witness of the EFCC in the trial. The senior lawyer drew the attention of the court to the charge and proof of evidence, adding that in breach of the enabling law, the prosecution did not list any of its witnesses and also failed to attach summary of the witnesses’ statements as required by law. Ojo cited section 379 of the ACJA in his argument, adding that in line with provision of the section, the EFCC ought to supply names and particulars of the witnesses to the defendants to enable them prepare their defence adequately. He insisted that fair trial demands that the defendants must know those that will testify against them in a criminal matter. The senior lawyer accordingly urged the court to compel the prosecution to do the needful before the trial can commence. Responding, Sanga, who informed the court that he got to know about the witness only Monday evening, conceded to the argument and prayed the court for a short adjournment

Why Delta approved tax relief for SMEs Francis Sadhere, Warri

elta State government has explained why it approved tax palliatives for some categories of Small and Medium Enterprises SMEs) in the state. Chief tax officer of the state and chairman, Delta State Internal Revenue Service,

as well as the compulsory 10 percent penalty for tax default. According to the revenue service boss, private schools and hospitals, eateries, publishing houses as well as entrepreneurs in the informal sector would also benefit from the tax reliefs provided they showed justifiable cause through a formal application.

Monday Onyeme said the tax palliatives recently approved by the government was to assist private businesses in the state to remain in business and retain their workers amid the Covid-19 pandemic. Speaking in Asaba, Onyeme explained that the tax relief included waivers on the statutory 25 percent interest on delayed tax remittance

US Africa Development Foundation invests $20m to create prosperity pathways in Nigeria STEPHEN ONYEKWELU

n the last ten years, the US Africa Development Foundation has sought to sustainably improve the lives and livelihoods of underserved Nigerian communities in both rural and urban areas. USADF is a founding member of Power Africa established by the United States of America’s Congress to support and invest in Africanowned and led enterprises. The foundation operates a participatory, locally-led and community-driven approach to development in Africa. In Nigeria, it has invested over $20 million (N7.57 billion) in the last ten years with a focus on early start entrepreneurs, cooperatives in agriculture and energy. The Foundation has projects in the northern part of Nigeria, Middle Belt, South West, South-South, and South East

with impact measured using the triple bottom of impact on people, the environment, and profits. Nigeria occupies a significant position because of the scale of projects’ impact. “We start in the communities with focus on food security, job creation, and power,” C.D. Glin, president and CEO of USADF said on Power Solutions, a Nigeria Info FM programme. “In Nigeria, we have investments in powers solutions such as solar, hydro, biomass, and biogas.” Glin said USADF is driving energy access through the Power Africa for marginalised and underserved communities with a concentration on off-grid energy. Finding, funding and supporting earlystage energy entrepreneurs constitute the Foundation’s operational model. “We are investing in Nigerian energy solutions for Nigeria, that is, locally-led solutions. We bring capital and build local

capacity.” Through Power Africa, USADF and All On, an offgrid energy impact investing company seeded by Shell in Nigeria have established the Nigeria Off-Grid Energy Challenge, a multi-year partnership to identify and help scale innovative off-grid solutions to “power up” unserved and underserved areas in Nigeria. Sixteen Nigerian companies have been selected through the 2018 and 2019 editions. The winners of 2019 Nigeria Off-Grid Energy Challenge were ICE Commercial Power, Sosai Renewables, Greenage Energy, Pirano Energy, Sholep Energy, Entric Power Systems, ACOB Lighting, NexGen Energy, and Protergia Nigeria. In the first edition of the Challenge in 2018, the recipients were Prado Power Ltd, Darway Coast, Auxano, Eastwind Labs, Alyx, Creeds Energy, and iKabin.

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Wednesday 12 August 2020

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Union, MTN disagree over alleged abuse of expatriate quota, unfair labour practices FRANK ELEANYA & BUNMI BAILEY

rivate Telecommunications and Communications Senior Staff Association of Nigeria (PTECSSAN) and MTN, Nigeria’s largest mobile telecom service provider, have disagreed over allegations of abuse of expatriate quota, unfair labour practices and discriminatory treatment of workers in the company. The association on Tuesday threatened to disrupt the services of MTN, from August 24, if their demands are not complied with. At a press conference in Ikeja, Lagos, Okonu Abdullahi, general secretary of PTECSSAN, alleged unfair treatment of workers by MTN. “We want the world to know about the unfortunate

events in MTN which, if not quickly mediated, may portend great danger to the industrial relations clime within MTN Nigeria. We are also using this opportunity to inform the management of MTN of the consequences to industrial peace within its organisation if our demands are not met within 14 days from this day,” Abdullahi said. Abdullahi listed what the association considers unfair practices by the telecom giant to include lack of exit package structure for long serving staff, abuse of expatriate quota policy, flagrant disregard to the law governing maternity leave, refusal to sign the necessary instruments of engagement between the workers’ union and the management and restrictive career path for Nigerians. The association urged

the MTN to withdraw expatriates engaged to do jobs that Nigerians are qualified and capable of doing and regularise the employment status of the casual workers in the company. It also called for the immediate signing of the procedural agreement and commencement of negotiations on the Collective Bargaining Agreement (CBA) to meet the yearnings of its workers. But the telco in a swift response via a statement by its chief corporate services officer, Tobechukwu Okigbo denied the allegations and described them as lacking merit. The statement noted that the company has over the years built a ‘people first’ culture that empowers its employees, values inclusivity and hard work, and instils a responsibility for its customers and communities. “This is what defines and

unites us. MTN cares greatly about all its workers, deploying global best practice people solutions and policies that make MTN Nigeria a great place to work. We intentionally invest in our people. Indeed, MTN’s success in Nigeria is as a result of the hard work, commitment, and dedication of all staff, guided by a strong culture of people management. Our people and workforce are our most critical competitive advantage and a key differentiator in the marketplace so we take staff welfare, remuneration, and career development seriously. We have stringent policies in place that promote meritocracy and protect our employees from all forms of harassment and discrimination and creates a workplace where employees feel valued and safe,” Okigbo said.

We’ll continue to pursue peace despite provocation - Obaseki

do State governor, Godwin Obaseki has declared his administration’s commitment to ensuring peace in the state despite the politically charged atmosphere. Obaseki gave the assurance when he visited the Egiegbai II of Ekperi Kingdom, Deke Kanoba, in Etsako Central local government area of the state, on Tuesday, to seek the monarch’s prayers ahead of the September 19, 2020 Edo governorship election. According to him, “I will continue to do everything within my powers even in the face of provocation from opposition to ensure that our dear state is peaceful. “No business can thrive in a state where there is no peace. As a government, we are determined to explore all means possible to grow our economy. “I understand that there is

‘Post Covid-19 should spur patronage of made-in-Nigeria products’ KELECHI EWUZIE

L-R: Chibuzor Emenike, head communication and strategy, Nigerian Office for Trade Negotiations (NOTN); Glimy Modey, head of accounts NOTN; Victor Liman, acting chief trade negotiator/director general, NOTN, and Ogbu Paul, head legal/adviser legal, during a media lunch of Nigerian Policy Roadmap Document for Trade by NOTN in Abuja, yesterday. Pic by Tunde Adeniyi

441 first-class graduates apply for teaching jobs in Oyo

Champions League: Battles of the titans as 8 teams fight for spots in the semis

REMI FEYISIPO, Ibadan

he UEFA Champions League quarterfinals get underway in Lisbon on Wednesday 12 - Saturday 15 August 2020, four months later than scheduled because of the coronavirus pandemic and as one-off matches, all behind closed doors, rather than two-legged ties. The first quarterfinal takes place at Estadio da Luz in Lisbon, PortugalonWednesday12August, with Serie A side Atalanta tackling French Ligue 1 champions Paris Saint-Germain (PSG). While La Dea will be in rhythm from completingthe2019-20Italiantopflight season earlier this month, PSG have had only two competitive fixtures (the French Cup and French LeagueCupfinals)inrecentweeks and could come into the match ‘undercooked’. PSG manager Thomas Tuchel, has praised La Dea’s football and acknowledged that the

bout 441 first-class graduates from different fields applied to write the computer-based test (CBT) for teaching jobs that commenced in Ibadan, Oyo State government disclosed on Tuesday. The exercise which is to run through the week till Saturday attracted applicants from all the zones of the state. Chairman, Oyo State Teaching Service Commission, Akinade Alamu stated this while inspecting the exercise which held at the University of Ibadan CBT hall. Alamu said the interest displayed by the candidates in the teaching service portended significant turnaround for the education sector in the state, as the present administration un-

der the leadership of Governor Seyi Makinde has ensured all other inputs to achieve success have been provided. “We are happy to have the best applicants, especially the first-class graduates taking part in this exercise, the government of Oyo State is desirous of lifting education to a higher level so that we will have as much as the best among our applicants. “We want to bring back the pride attached to teaching in the old, it is the best profession and if we have the best hands joining, it is a good omen. “The scores at the interview level will place applicants higher, we have a mark for NCE, we have different mark for graduates and there is a higher mark for first class, this shows that the whole thing will be based on merit. www.businessday.ng

Anthony Nlebem

match will be a tough one: “Atalanta are a very spectacular team, very strong in attack. They play every time in order to score a lot of goals, and they go one-on-one in all parts of the field. It’s a really spectacular way of playing and I really enjoy watching them. Our challenge is to be ready for it and to prepare in a serious way. It will be a very tight game, a very hard game, but we are there to win it.” Thursday 13 August brings the second quarterfinal, with RB Leipzig and Atletico Madrid facing off at Estadio Jose Alvalade and looking to set up a meeting in the semi-final with the winner of Wednesday’s match. These two teams notably eliminated last season’s finalists – Leipzig crushed Tottenham Hotspur 4-0 on aggregate, while Atletico ended Liverpool’s reign as European champions with a 4-2 triumph overall – and both come into the clash full of confidence.

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also no place or business that can boom without constant electricity. We need electricity for our businesses such as fish farm which is a major source of income for the people of Ekperi. “It’s our interest to construct roads and other infrastructures for our people. We have had some challenges with the management of the Benin Electricity Distribution Company (BEDC). “But as a government, I want to assure you that we are very concerned about providing constant electricity supply to our people,” he added. The monarch in his response said that his palace was not partisan, adding that his interest was good governance. The traditional ruler, however, called on Obaseki to look into the activities of the BEDC in his area, hailing the governor for the construction of Ogbago and Osomhegbe community roads.

resident of the Institute of Chartered Accountants of Nigeria (ICAN), Onome Joy Adewuyi has called on Nigerians to use lessons from the Covid-19 pandemic as a springboard to embrace and patronise made-in-Nigeria products. Adewuyi observed that one of the great lessons from the Covid-19 pandemic and the attendant lockdown was the ingenuity displayed by Nigerians by producing their own face masks, water dispensers, sanitisers, personal protective equipment and ventilators. Speaking in Lagos during a media parley, Adewuyi noted that the period of the lockdown points to the huge human capacity and creativity that exists in Nigeria, adding that the spirit of WE CAN DO IT must be embraced, propagated and encouraged. While calling on the gov-

ernment to latch on this to drive national economic revival, the ICAN president advised that efforts should be reinforced through more investment in tertiary institutions to fine-tune these inventions. Adewuyi advised that diversification of the national source of foreign exchange must be done not only in words and plans but in real investment in infrastructure. She said Nigeria must evolve a strategy for the export of intangible human expertise to drive its development. She also posited that the nation should create business hubs based on specialisation in different zones of the country. “While agriculture is key and should be mechanised, except the nation adds value to its products before export, we would continue to be at the mercy of our trading partners. We need to process our agricultural products to add value and earn foreign exchange,” she said.

NDDC crisis: Firm denies contract scandal allegations Iniobong Iwok

firm Webster Global Ventures has described its inclusion in the list of companies allegedly coerced to be paid by the National Assembly as a deliberate effort to destroy the company’s reputation. The company described the statement credited to the acting managing director of the Niger Delta Development Commission (NDDC), Kemebradikumo Daniel Pondei as false, inaccurate, and misleading. In a statement made available to journalists in Lagos, the company said that the National Assembly never influenced any payment made to the company by the Niger @Businessdayng

Delta Development Commission (NDDC). Director of operations of the company, Opeolu Adarae, said the company completed all projects handed to it and not involved in fraud. According to him, “We are a company of international repute. No one should dent our image. The National Assembly never influenced any payment made to our company, because we completed all projects handled by us. We have never been involved in fraud. Nobody gave us recommendations. The company does not have any business with the National Assembly. The executive director, project of the NDDC, Cairo Ojuogboh inspected the project we completed and certified it”.

Wednesday 12 August 2020

BUSINESS DAY

Rendeavour’s record breakers in Africa, and in Nigeria

n July, Cold Solutions, a leading temperature-controlled warehouse and logistics service provider, announced that it will invest $70 million in building the largest, most-advanced cold storage warehouses in East Africa. The first 15,000 sqm facility, located at Tatu City in Kenya, caters for temperature ranges from +26 to -40 C. It is also designed to accommodate multiple product ranges, from fresh fruit and vegetables, to pharmaceuticals and vaccines, meats, poultry, and frozen foods. In January, Ariel Foods, a leading manufacturer of nutritional foods for high need populations, launched the largest ready-to-eat therapeutic food factory in Africa. The facility, located on a 28,000 sqm plot at Alaro City in Lagos, Nigeria, has an annual production capacity of 18,000 metric tonnes and is one of the most technically advanced ready to use therapeutic food manufacturing facilities in the world, enabling Nigeria to meet its own requirements and export nutritional foods. These two record-breaking investments – Alaro City and Tatu City – have one thing in common: they are being built in the strategic growth trajectories of the biggest cities in Nigeria and Kenya by the largest new city builder on the continent, Rendeavour. Not only does Rendeavour catalyse investment and economic growth, its credibility is based on a track record for delivering large-scale infrastructure. “At Alaro City, we have attracted almost 30 multinational and Nigerian companies since our launch last year,” said Yomi Ademola, Country Head, Nigeria for Rendeavour. “Alaro City’s first phase of residential plots sold out quickly and the second phase is moving at a similar pace. With clean title, high-quality infrastructure and multiple free zone benefits, we provide a business- and family-friendly environment that the market is keying into.” Planned on 2,000 hectares (over two times the size of Victoria Island) in the North West Quadrant of the Lekki Free Zone, Alaro City includes industrial and logistics locations, complemented by offices, homes, schools, healthcare facilities, hotels, entertainment and parks and open spaces. Over in Kenya, Tatu City, shows where Alaro City is headed. With 56 businesses operating or under development, two schools educating 3,000 students daily and 5,000 homes delivered or under development, the 2,000-hectare project has been embraced by Kenya as a foreign direct investment of national economic importance. Alaro City and Tatu City are just two out of seven new cities being built by Rendeavour on 12,000- hectare portfolio spanning Kenya, Ghana, Nigeria, Zambia and Democratic Republic of Congo. Stephen Jennings, Rendeavour’s founder and CEO has walked the talk with his serial investments on the continent. In 1995, Mr. Jennings founded Renaissance Capital in Moscow and in 2006 he set up African operations and today the bank is widely regarded as one of Nigeria’s and the continent’s leading investment banks. In 2012, he launched RenMoney in Lagos, Nigeria’s leading fintech consumer finance bank. In Rendeavour, Mr. Jennings and his partners created a vehicle for attracting additional investments from businesses who trust Rendeavour and the quality of its cities. “We provide the platform, and then bring dozens and dozens of big investors who now feel comfortable to come into the country,” said www.businessday.ng

Mr. Jennings during an interview with BusinessDay. “In Nigeria, for instance, Dhiren Chandaria, Chairman of Ariel Foods, hadn’t been to Nigeria before. He knew nothing about Nigeria. But he knew about Rendeavour, and he knew there is a market opportunity. So, he trusted us to create the environment where he can come in and substantially build his factory in six months.” The result of this is the record-breaking food factory – a landmark facility that can be seen from the Lekki-Epe Expressway – is on course to create hundreds of jobs. While Ariel Foods is gearing up to start operations, the developers are making significant progress in providing supporting infrastructure. The city’s initial road networks, built with rain gardens and cycling lanes, are at advanced stages; a 50 MVA power plant is under construction; and water and sewage infrastructure are also being built. Attracted by, among other things, the speed with which quality infrastructure is being rolled out in Alaro City, new businesses keep signing up to build their facilities. For Nigeria, two key economic development needs are being met in this project – foreign direct investment and model urban development. “This is what we do: create the living and working spaces that will help sustain and accelerate Africa’s economic growth, meet the aspirations of Africa’s burgeoning middle classes, and serve as a catalyst for further urban development,” said Mr. Jennings. “We have a long-term commitment to Africa, and to Nigeria in particular. Alaro City is a symbol of our commitment to Nigeria, and of the continuity of a partnership anchored in three administrations of the progressive Lagos State Government.” The economic nerve centre of the country, Lagos has led admirably from the front in providing exemplary public-private partnerships needed for economic diversification and growth. In Alaro City, the state government is well aware of the potentials of this particular model. Governor Babajide Sanwo-Olu, speaking during the launch of Ariel Foods, gave an indication of how much importance the state government attaches to its partnership with Rendeavour. “Alaro City is a critical part of our plan for the development of the Lekki Free Trade Zone,” he said. “When this project is completed, it will essentially amount to one of the busiest and most inclusive urban developments that the state has seen in recent times, and one which combines high quality residential, commercial and industrial facilities, all surrounded by 150 hectares of parks and green spaces.” The governor also endorsed the public private partnership between Rendeavour and the Lagos State Government as the model it seeks. “Our goal is for Alaro City to become a veritable model for PPPs of this kind,” he said. “We also intend for it to serve as a model for the kind of reasonably-priced and climate-friendly urban developments that Lagos deserves, as a 21st century megacity. We are thus grateful to Rendeavour for being excellent partners and investors on this project. I assure you that our administration in Lagos State will continue to guarantee policies, programmes and initiatives that will attract investments and create the right environment for these investments to thrive and create economic value.” In January, more than 10 multinational and Nigerian investors had signed up to build various commercial facilities in Alaro City. This number has grown just one short of 30 within six months, despite the economic shocks caused by the COVID-19 pandemic. It is just a matter of time before another record-breaking investment is announced at Alaro City.

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PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 232,821.23 6.55 -0.76 198 29,209,750 UNITED BANK FOR AFRICA PLC 222,296.24 6.50 0.78 156 3,111,371 ZENITH BANK PLC 529,030.92 16.85 0.30 323 15,307,622 677 47,628,743 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 183,065.99 5.10 0.99 200 8,015,283 200 8,015,283 877 55,644,026 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,412,009.80 118.50 - 105 200,958 105 200,958 105 200,958 BUILDING MATERIALS DANGOTE CEMENT PLC 2,317,509.01 136.00 -4.09 84 2,713,814 LAFARGE AFRICA PLC. 192,488.16 11.95 -0.42 104 3,459,716 188 6,173,530 188 6,173,530 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 205,955.60 350.00 - 63 14,755 63 14,755 63 14,755 1,233 62,033,269 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 - 1 5 UPDC REAL ESTATE INVESTMENT TRUST 10,139.42 3.80 - 0 0 1 5 1 5 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,692.74 115.05 1.37 1 1,898,000 1 1,898,000 1 1,898,000 2 1,898,005 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 73,451.07 77.00 - 22 14,009 PRESCO PLC 48,000.00 48.00 - 17 73,103 39 87,112 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,500.00 4.25 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,860.00 0.62 - 9 77,483 9 77,483 48 164,595 DIVERSIFIED INDUSTRIES JOHN HOLT PLC. 202.36 0.52 - 0 0 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 25,608.23 0.63 1.61 27 4,994,512 U A C N PLC. 17,287.78 6.00 1.69 98 3,873,778 125 8,868,290 125 8,868,290 BUILDING CONSTRUCTION ARBICO PLC. 206.42 1.39 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 23,839.20 15.05 - 29 192,283 ROADS NIG PLC. 165.00 6.60 - 0 0 29 192,283 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 17,631.97 0.95 - 10 735,262 10 735,262 39 927,545 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 6,733.37 0.86 - 4 62,450 GOLDEN GUINEA BREW. PLC. 829.98 0.81 - 1 16 GUINNESS NIG PLC 31,760.55 14.50 -3.33 199 2,970,243 INTERNATIONAL BREWERIES PLC. 83,272.41 3.10 -1.59 62 961,304 NIGERIAN BREW. PLC. 271,894.67 34.00 6.25 56 1,675,596 322 5,669,609 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 142,800.00 11.90 - 78 263,095 FLOUR MILLS NIG. PLC. 79,137.33 19.30 - 81 1,154,479 HONEYWELL FLOUR MILL PLC 7,612.99 0.96 - 37 1,222,683 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 26,494.38 10.00 - 17 90,842 UNION DICON SALT PLC. 2,993.06 10.95 - 0 0 213 2,731,099 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 13,241.32 7.05 6.82 33 282,637 NESTLE NIGERIA PLC. 931,371.10 1,175.00 - 41 228,826 74 511,463 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 7,192.35 5.75 - 28 859,080 28 859,080 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 16,874.53 4.25 - 22 391,658 UNILEVER NIGERIA PLC. 68,940.07 12.00 - 38 166,653 60 558,311 697 10,329,562 BANKING ECOBANK TRANSNATIONAL INCORPORATED 76,150.64 4.15 2.47 109 2,914,979 FIDELITY BANK PLC 52,154.63 1.80 0.56 88 27,777,266 GUARANTY TRUST BANK PLC. 729,893.24 24.80 1.02 330 25,281,764 JAIZ BANK PLC 16,499.98 0.56 - 21 676,134 STERLING BANK PLC. 34,548.50 1.20 -0.83 132 6,239,523 UNION BANK NIG.PLC. 157,252.07 5.40 - 22 189,540 UNITY BANK PLC 6,896.71 0.59 - 3 94,436 WEMA BANK PLC. 20,444.47 0.53 1.92 46 11,115,838 751 74,289,480 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 1 150 AIICO INSURANCE PLC. 10,197.18 0.90 1.11 42 2,607,853 AXAMANSARD INSURANCE PLC 15,225.00 1.45 -8.23 47 1,948,139 CONSOLIDATED HALLMARK INSURANCE PLC 3,008.10 0.37 -9.76 1 200,000 CORNERSTONE INSURANCE PLC 8,837.70 0.60 - 5 5,000 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,830.86 0.25 4.17 4 244,178 LAW UNION AND ROCK INS. PLC. 4,296.33 1.00 -3.85 10 3,248,552 LINKAGE ASSURANCE PLC 3,800.00 0.38 - 3 56,731 MUTUAL BENEFITS ASSURANCE PLC. 2,346.27 0.21 5.00 14 4,019,590 NEM INSURANCE PLC 9,874.54 1.87 - 8 110,175 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 2,862.54 0.45 -10.00 9 862,615 REGENCY ASSURANCE PLC 1,533.81 0.23 - 2 86,000 SOVEREIGN TRUST INSURANCE PLC 2,272.89 0.20 - 1 1,000 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. 2,940.00 0.21 - 5 31,000 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 7,917.25 0.33 - 14 184,987 166 13,605,970 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,881.16 1.26 0.80 7 373,678 7 373,678

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 6,784.62 1.05 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 5,671.82 1.36 - 0 0 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 8,600.00 4.30 2.63 37 607,045 CUSTODIAN INVESTMENT PLC 29,409.32 5.00 - 19 759,983 450.00 0.30 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 39,605.42 2.00 -2.44 43 8,789,580 ROYAL EXCHANGE PLC. 1,595.06 0.31 - 0 0 346,663.92 33.00 -4.55 29 1,299,397 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 18,840.00 3.14 -3.09 169 8,102,535 297 19,558,540 1,221 107,827,668 HEALTHCARE PROVIDERS EKOCORP PLC. 2,991.61 6.00 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 888.28 0.25 - 2 57,517 2 57,517 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 593.50 0.60 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 7,239.67 3.47 0.58 19 449,000 GLAXO SMITHKLINE CONSUMER NIG. PLC. 6,278.35 5.25 -0.94 41 899,970 5,227.46 3.03 -1.62 16 294,040 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 3,513.44 1.85 -0.54 33 1,285,484 556.71 3.62 - 0 0 NIGERIA-GERMAN CHEMICALS PLC. PHARMA-DEKO PLC. 325.23 1.50 - 0 0 109 2,928,494 111 2,986,011 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 -4.76 6 1,427,600 6 1,427,600 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 764.87 0.26 - 8 3,306 8 3,306 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 216.00 2.00 - 0 0 247.48 0.50 - 4 56,220 TRIPPLE GEE AND COMPANY PLC. 4 56,220 PROCESSING SYSTEMS CHAMS PLC 986.17 0.21 4.76 7 999,033 E-TRANZACT INTERNATIONAL PLC 10,962.00 2.61 - 0 0 7 999,033 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,307,836.72 348.00 - 22 29,746 22 29,746 47 2,515,905 BUILDING MATERIALS BERGER PAINTS PLC 1,753.43 6.05 - 8 16,361 BUA CEMENT PLC 1,319,016.59 38.95 - 24 54,292 CAP PLC 12,250.00 17.50 - 43 1,335,979 MEYER PLC. 265.62 0.50 - 0 0 1,769.32 2.23 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 75 1,406,632 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,192.12 2.03 - 0 0 3,082.31 1.75 2.86 10 1,162,400 CUTIX PLC. 10 1,162,400 PACKAGING/CONTAINERS BETA GLASS PLC. 30,773.28 61.55 - 0 0 GREIF NIGERIA PLC 388.02 9.10 - 0 0 0 0 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 1 10 1 10 86 2,569,042 CHEMICALS B.O.C. GASES PLC. 1,877.26 4.51 - 6 11,790 6 11,790 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 77.00 0.35 - 0 0 0 0 6 11,790 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,315.17 0.21 - 7 2,052,700 7 2,052,700 INTEGRATED OIL AND GAS SERVICES OANDO PLC 29,462.45 2.37 - 38 447,989 38 447,989 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 63,104.17 175.00 - 17 6,831 ARDOVA PLC 16,606.63 12.75 4.94 81 973,125 CONOIL PLC 11,727.79 16.90 - 21 137,049 ETERNA PLC. 2,477.87 1.90 - 23 502,562 MRS OIL NIGERIA PLC. 3,794.59 12.45 - 10 7,107 TOTAL NIGERIA PLC. 26,856.18 79.10 - 26 35,705 178 1,662,379 223 4,163,068 ADVERTISING AFROMEDIA PLC 887.81 0.20 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 15,796.05 1.62 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 235.27 0.20 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,381.18 3.65 - 12 133,095 361.01 0.77 - 1 25 TRANS-NATIONWIDE EXPRESS PLC. 13 133,120 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 1 90,000 1 90,000 HOTELS/LODGING CAPITAL HOTEL PLC 3,763.54 2.43 - 0 0 IKEJA HOTEL PLC 2,099.58 1.01 -9.82 1 109,000 TOURIST COMPANY OF NIGERIA PLC. 7,076.28 3.15 - 0 0 TRANSCORP HOTELS PLC 30,401.62 4.00 - 1 24 2 109,024 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 3,960.00 0.33 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 199.58 0.33 - 0 0 LEARN AFRICA PLC 794.59 1.03 - 3 15,000 STUDIO PRESS (NIG) PLC. 1,070.79 1.80 - 3 3,000 UNIVERSITY PRESS PLC. 478.86 1.11 - 8 30,641 14 48,641 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 779.12 0.47 - 2 110 2 110 SPECIALTY INTERLINKED TECHNOLOGIES PLC 688.80 2.91 - 0 0 SECURE ELECTRONIC TECHNOLOGY PLC 1,126.31 0.20 - 3 544

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Wednesday 12 August 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

US stocks nudge closer to record high

Global markets lifted by economic optimism and vaccine hopes Philip Stafford, Harry Dempsey in London and Hudson Lockett in Hong Kong

nv e s t o r s n u d g e d Wa l l Street’s benchmark stock market close to an all-time high on Tuesday, turning bullish on leisure and travel stocks and betting that coronavirus lockdowns will be limited. The S&P 500 was up 0.5 per cent at lunchtime in New York at 3,376, less than 2 points short of the intraday peak it reached in February, before Covid-19 fears gripped American and global markets. The tech-heavy Nasdaq, which hit a record high on Friday, was flat. The relative economic optimism led to selling in US Treasuries and the precious metals of gold and silver, which both hit highs earlier this month. Gold suffered its worst one-day loss since 2013. Gains for equities in the US followed a broad advance in Europe, following better than expected German economic data from the ZEW research institute. The benchmark Stoxx 600 rose 1.7 per cent, with London’s FTSE 100 up the same amount and the Dax 30 rising 2 per cent. MSCI’s broad index of markets in Asia advanced 1.1 per cent. A vaccine is on the way Rachel Winter, Killik & Co Market confidence has been bolstered by a barrage of monetary and fiscal stimulus as well as rising hopes for an effective Covid-19 vaccine. Russia on Tuesday said it had approved its vaccine for

use beyond clinical trials, while potential immunisations being developed by big drug companies around the world have shown promise. Goldman Sachs has forecast that the main US drug regulator would approve a Covid-19 vaccine before the end of 2020. Rachel Winter, associate investment director at wealth adviser Killik & Co, said Russia’s announcement “reminded people that a vaccine is on the way”. Shares in travel and leisure companies, which have been beaten down as coronavirus has caused a collapse in demand, were

among the top performers. Casinos group Wynn Resorts rose 6.8 per cent and Las Vegas Sands 5.7 per cent. In London, cruise operator Carnival rose 6.4 per cent, British Airways parent IAG climbed 8.4 per cent and InterContinental Hotels advanced 4.8 per cent. Investors shifted away from assets considered to be havens during times of uncertainty. US government debt came under selling pressure, leading the 10-year Treasury yield to rise by 0.07 percentage points to 0.64 per cent. The yield on German 10-year Bunds also rose by 0.05 percentage points to minus 0.47

per cent. Yields rise when prices fall. The US dollar index, a measure of the greenback against half a dozen peers, fell 0.2 per cent. Gold tumbled 4 per cent to below $2,000 a troy ounce, taking its losses since hitting an all-time high on August 6 to almost 6 per cent. Silver, which also hit a high in early August, fell 7 per cent to $27.09. Many investors continued to be bullish on the yellow metal. “We continue to like having exposure to [Gold Shares ETF], and consolidation here after such a big run is not a bad thing,” said analysts

at Bespoke Investment Group in New York. Investors have remained cautiously optimistic that US lawmakers will overcome gridlock in Congress to pass a further support package that could further cushion the economic blow from Covid-19, even though talks on a deal have stalled for the time being. Jan Hatzius, chief US economist at Goldman Sachs, said Republicans and Democrats were not, in fact, far apart and he expected lawmakers to agree by September a fiscal package worth $1.5tn. “This would keep fiscal policy sufficiently supportive to sustain the economic recovery,” he said. Meanwhile, US president Donald Trump said late on Monday that his administration was “seriously” considering pushing for a capital gains tax cut along with other measures to ease Americans’ tax burdens. The global economic picture has proved to be somewhat brighter than some investors had feared several months ago, said Klaus Baader, global chief economist at Société Générale. “The contraction in GDP has been quite a bit smaller than many had expected or feared.” Oil prices were higher ahead of the International Energy Agency’s latest forecasts on US oil production. Brent crude, the international benchmark, rose 0.6 per cent to $45.24 a barrel. West Texas Intermediate, the US marker, climbed 0.8 per cent to $42.28 a barrel.

Russia to start mass use of its Covid-19 vaccine in coming weeks Some experts cast doubt on Moscow’s ability to develop a safe and effective inoculation so quickly Henry Foy in Moscow and Clive Cookson in London

ussia has become the first country to grant regulatory approval to a vaccine against Covid-19, with mass production and immunisation of key workers to begin in the next few weeks. The move, the first time a Covid-19 vaccine has been approved for civilian use, comes after just two months of human trials and underscores Moscow’s desire to rush the vaccine through testing and trial procedures at breakneck speed in an attempt to beat western pharmaceutical companies. “This morning, for the first time in the world, a vaccine against the coronavirus infection has been registered,” announced President Vladimir Putin at a televised meeting with government officials on Tuesday. “I know that it works quite effectively, it forms a stable immunity. I repeat: it has passed all the necessary tests,” he said,

The vaccine, named Sputnik, was developed by the Gamaleya Institute in Moscow and financed by Russia’s sovereign wealth fund © REUTERS

adding that his own daughter had already been given the vaccine. Vaccinations of medical workers could begin as soon as this month, said Russian officials. But western experts have cast doubt on the Russian claims, questioning Russia’s ability to develop and approve a safe and effective Covid-19 vaccine even more quickly than projects in Europe, China and the US that are proceeding at full speed. They www.businessday.ng

also criticised Russian regulators and vaccine developers for failing to make scientific and technical information available for independent assessment. “Everyone else in the world is publishing details of their vaccines and clinical trial protocols but it has been very hard to find out much about the Russian vaccine,” said Danny Altmann, professor of immunology at Imperial College London. “We need a completely

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open, global assessment of different vaccine candidates.” The Russian vaccine, which will be marketed with the name Sputnik V, was developed by the state-run Gamaleya Institute in Moscow and financed by Russian Direct Investment Fund. It was developed using the same technology as previous vaccines developed by the institute to combat Ebola and Mers. Trials of the vaccine will continue even as it begins to be distributed to the public, the government said. Vaccinations for medical workers are expected to begin at the end of the month or in early September, according to Tatiana Golikova, deputy prime minister. But Eleanor Riley, professor of immunology at Edinburgh university, said: “There is a big difference between a large vaccine trial, with careful and frequent follow up of all vaccinated individuals, and deployment of a vaccine to the general public. “The current messaging from Russia is very unclear as to which @Businessdayng

of these two deployments — a large phase 3 clinical trial or mass vaccination of the general public — is being proposed,” she said. Alex Azar, US secretary of health and human Services, also challenged the Russian announcement. “The point is not to be first with the vaccine, the point is to have a vaccine that is safe and effective for the American people and the people of the world,” he said in a television interview. “We need transparent data and it’s got to be phase three data that shows that the vaccine is safe and effective.” Kirill Dmitriev, head of RDIF, said western criticisms of Russia’s vaccine development were designed to “discredit and conceal the correctness” of Moscow’s research. “Instead of constantly attacking Russia . . . they would be better advised to enter into a constructive dialogue with us and provide their citizens in the near future with a high-quality and safe drug that actually saves lives and can halt the pandemic,” he said.

Wednesday 12 August 2020

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

The Spac race: Wall St banks jostle to get in on hot new trend ‘Blank cheque’ companies now account for one in five dollars raised in IPOs Richard Henderson, Eric Platt and Ortenca Aliaj in New York

he last time Credit Suisse was neck and neck with the likes of Morgan Stanley and Goldman Sachs as a top underwriter of equity offerings, the Zurich-based bank still had the words First Boston in its name. But this year, it has one major Wall Street trend to thank for putting it back in the top three for the first time since 2005: a boom in so-called blank cheque companies. Special purpose acquisition companies, or Spacs, have grown from a niche part of equity markets to become a popular alternative route to public markets. Such vehicles raise money from investors with the aim of finding a private company to buy; if the sponsors fail to do that within a certain period, the Spac is dissolved and the money returned to shareholders. The rise of the Spacs has generated thick streams of fee income for underwriters and prompted several investment banks to reshuffle their equities teams to ride the trend. “The market is booming,” said Christian Nagler, a partner at law firm Kirkland & Ellis. “All the major banks are focused on Spacs and we are seeing a huge increase in highquality, first-time issuers.” Spacs have raised $23.9bn this year, globally, already eclipsing last year’s record haul by 70 per cent, according to financial data provider Refinitiv. Almost all of that

Special purpose acquisition companies have grown from a niche part of equity markets to become a popular alternative route to public markets

— $23.6bn — was generated in the US. Blank cheque companies now account for one in five dollars raised in initial public offerings: about three times the share of last year. The investment banks that have helped to usher in Spacs have not been the same cohort known for winning coveted mandates on bigname tech IPOs in recent years. Cantor Fitzgerald, the midsized New York investment bank, was the top Spac underwriter last year, followed by Deutsche Bank. Citigroup and Credit Suisse have

also built sizeable Spac businesses, advising on many of the largest blank-cheque listings over the past three years and this year muscling in as the top advisers. “People who have not been as experienced are trying to build an expertise,” said Doug Adams, the global co-head of equity capital markets at Citi. Citi has led all four Spac offerings from Michael Klein’s Churchill Capital, a firm run by a former Citi dealmaker. Last month Mr Klein caught the eye of bankers across

Wall Street when one of his Spacs struck an $11bn takeover of US healthcare company MultiPlan. Credit Suisse, meanwhile, has underwritten all three Spacs led by Chamath Palihapitiya, the former Facebook executive whose first blank cheque company merged with Virgin Galactic last year, thrusting Richard Branson’s space travel group on to the stock market. Bankers are now courting other buyout veterans and executives who could front their own Spacs. Chinh Chu, the former Blackstone

“rainmaker”, has launched four Spacs, including two this year with New York fund manager Neuberger Berman. Bill Foley, an insurance executive, has launched three and is aiming to raise $1.2bn in a fourth unveiled this month. Bill Ackman, the billionaire hedge fund manager, last month unveiled his first offering, raising $4bn to hunt for a tech “unicorn” — the largest sum ever raised in a Spac. “Brand name private equity firms and brand name public market executives brought a new light to investors and potential companies that wanted to merge with a Spac,” said Bennett Schachter, Morgan Stanley’s top Spac banker who joined last year from Goldman Sachs. Goldman, which has ranked among the top five underwriters of Spacs since the boom began in 2017, has stood apart from its biggest rivals because it has launched its own blank cheque vehicles. The first, which listed in 2018, raised $600m and in February merged with Vertiv, a digital infrastructure group. The bank’s second Spac raised $700m in June. The fees for bringing Spacs to life can be hefty. Banks typically earn 2 per cent of the proceeds when the IPO is finalised and a further 3.5 per cent when the Spac finds a company to buy and completes a takeover. While that is lower than the 7 per cent fee banks traditionally earn on the proceeds of a new listing, they also have other ways to drum up revenues.

Wiltshire valley locals build their own mobile phone network Ch4lke uses just five masts to deliver broadband-like speeds and bridge digital divide Nic Fildes in Bowerchalke

he village hall in Bowerchalke is an unlikely setting for a mobile technology revolution. Yet local residents, surrounded by crocheted goods and local jams, have spent three years forging a mobile phone network to bridge their own “digital divide”. The experimental Ch4lke Mobile, which runs over just five masts, can connect homes to a network capable of delivering broadband-like speeds, in an area that had been left behind by the digital revolution. The fledgling network has just secured part of a £2.25m government grant to fill in England’s largest “not-spot” — an area with no mobile signal — and could offer a solution to other pockets in the country blighted by a lack of coverage. The village sits in the picturesque Chalke Valley in Wiltshire, little more than 10 miles south of Stonehenge. It is known for its high

James Body, third from right, next to local MP John Glen, centre, with members of the Ch4lke Mobile team outside Bowerchalke village hall © Stuart Berman

quality watercress and a number of celebrity residents, including film director Guy Ritchie and television presenter James May. But perhaps more fortunately for its inhabitants, the village also boasts a small group of residents with technology backgrounds. Ed Gairdner, who used to work with tech start-ups in Silicon Valley, moved to the Chalke Valley from Hampshire four years ago and www.businessday.ng

became frustrated at the paucity of coverage. “We looked at the coverage maps in Carphone Warehouse before buying phones. We tried to do our due diligence — but there is no coverage here,” he said. According to tests performed by network measurement company GWS signals are weak to nonexistent in the valley. There is even a divide within the “digital divide” as some residents with houses

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high on the downs get a signal while others have no coverage at all. “It became a non-discussion subject in the pub as it would start too many arguments,” said James Body, chair of the parish council. Mr Body was unusually well placed when villagers began to complain to him about the lack of coverage. As a former officer in the British army’s Royal Signals, he spent a career in the military building networks and then went on to work in telecoms in the private sector. Bowerchalke lies just a few miles west of the cathedral city of Salisbury, which now has one of the fastest broadband networks in the country. But the steep, narrow Chalke Valley has cut it off from the wireless revolution after an earlier government project failed to deliver five large mobile towers. Despite few wanting the giant metallic structures, locals were angry at having no coverage. For Sue Lee, who runs a B&B next to the village hall, the lack of connectivity has cost her business. @Businessdayng

She describes various visitors abruptly leaving without paying after finding there was no mobile reception. She decided to harangue Mr Body. “Isn’t there anything we can do? It is ridiculous,” she recalled asking him. Since then, Mr Body has spent three years working with the community to develop a test network that operates off small antennas attached to the chimneys of thatched cottages. Inspired by an earlier initiative to set up a rural broadband network in Lancashire in north-west England called B4rn, the new mobile network relies on the willingness of the community to solve the problem themselves rather than wait for the government or the industry to sort it out. This also helps to lower costs as there is no rental or paperwork. The small base stations, that house the antennas, are also less of an eyesore than a mobile tower. The company compares its array of small cells to fairy lights reaching “every nook and cranny” of the valley.

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BUSINESS DAY Wednesday 12 August 2020 www.businessday.ng

Banks braced as pandemic poses biggest test since financial crisis Provisions for loan losses are at the highest in a decade as lenders prepare for large-scale company bankruptcies Stephen Morris and Owen Walker in London and Laura Noonan in Dublin

uring the depths of the coronavirus crisis in Europe in late March, Sergio Ermotti remembers sitting in his home study in Lugano, reflecting on the latest financial meltdown to engulf his career as a banker. “If I go through my last eight years, we had a lot of mini-earthquakes, but never of the magnitude of what we are seeing now,” the 60-year-old UBS chief executive says. “This is a crisis that is driven by fear in a different way . . . this time it’s not just about people losing their assets or savings, it’s about their life, it’s about their families. It’s so profound, so different.” Switzerland’s largest bank is weathering the crisis relatively well, considering its share price is down only 10 per cent this year, a more modest fall than any other global lender apart from Wall Street’s Morgan Stanley. This is no accident. Both have built wealth management arms that boast more than $2tn of client assets, generating consistent fees from the wealthy and super-rich desperate for advice on how to trade the pandemic. The rest of the industry — particularly those focused on bread and butter lending to small businesses and consumers — are facing their toughest test since the financial crisis of 2008, as untold millions of companies face bankruptcy amid unprecedented global lockdowns and travel bans. Governments and regulators have unleashed trillions of dollars of support measures to prop up the system, ensuring the flow of credit and functioning of markets, and helping households stay afloat with salary supports and repayment holidays. But many of those schemes are set to be withdrawn. Meanwhile, interest rates that were already negative in the eurozone have been slashed to zero in the US and 0.1 per cent in the UK, piling pressure on banks’ already slim lending margins. For the smallest and weakest still struggling to recover from the cataclysm 12 years ago, coronavirus could prove fatal. For the biggest, it portends a period of hand-tomouth survival — weak profits, no dividends and much lower, or no, bonuses — at a time when most investors had already turned bearish. As ever, Europe’s banks have suffered far more than their US rivals, which have fatter profits to see them through leaner years. Navigating the

Provisions are already to levels last seen in 2010 Loss loan provisions of US and European bank* ($bn)

*15 largest US and 32 largest European bank Source: Company reports, Bloomberg, Datastream, Worldscope, Citi estimates @FT

disruption has been complicated by up to 90 per cent of staff working from home for months on end. “For the large national banks, facing zero interest rates into the foreseeable future and the significant credit exposure, how can one be confident?” asks Bob Diamond, who ran Barclays during the last crisis. “Please explain to me where earnings are coming from?” Cushioning the blow of escalating defaults Vast credit losses are the primary concern. Six months into Covid-19, the numbers are already staggering. The 15-largest US banks have set aside $76bn to cover projected bad debts and their 32-biggest European cousins €56bn, Citigroup data shows. The combined total of $139bn in loan-loss provisions is the highest since the $186bn reached in the second half of 2009, the nadir of the financial crisis that brought down Bear Stearns and Lehman Brothers. Using a wider sample of banks, consultants at Accenture warn that the estimated losses from bad debts could rise to $880bn by the end of 2022. Loan-loss provisions have been increased by new global accounting rules — a consequence of the financial crisis — forcing lenders to build reserves well in advance of defaults, particularly in the US where they must now provide for lifetime losses based on the latest economic outlook. Vikram Pandit, Citigroup chief executive between 2007 and 2012, argues that this time like-for-like losses should be lower because consumers learnt from the “tough

times” they endured 12 years ago. “They are being quite prudent, they’re using some of this money they’re getting from the government to pay down debt, to reduce their balances, they’re spending a little bit less,” he says. Banks will not bear the full brunt of escalating defaults. The UK government’s emergency small-business lending programme — where as many as half of the “bounce back” loans, with a combined cost of at least £34bn, are not expected to be repaid — puts taxpayers on the line for losses. Payment holidays on credit cards, mortgages and rents are also masking the current stress on loan books. JPMorgan wrote off just $1.6bn of loans in its $998bn lending portfolio in its second-quarter results. The UK’s largest mortgage lender, Lloyds, has so far written off just £10.5m of its £38.4bn small business loan book — far below the average for the past three years — even though executives say bad loans could reach £5.5bn of its overall £440bn loan book this year. “It’s a fool’s game trying to predict the ultimate credit losses from the crisis,” says Jaime Ramos Martin, a fund manager at Aviva Investors, which manages £356bn and is a major shareholder in British banks. “Now more than ever, it’s about picking the business models that are right for the future and sticking with them.” For those with big investment banking operations, a surge in trading revenues derived from historically volatile markets combined with fees from record corporate debt

and equity issuance have softened the blow. Morgan Stanley posted its highest-ever revenue for a single quarter, including a market-leading 168 per cent increase in fixed-income trading. Despite big provisions for loan losses and future litigation costs, Goldman Sachs’ net profit held steady for the same reason, until an extra $2bn in provisions for settling the 1MDB legal case wiped out those earnings. However, the trading boom won’t last. JPMorgan boss Jamie Dimon has warned that markets revenues could halve during the rest of the year. More optimistically, Morgan Stanley’s finance chief Jon Pruzan says that while it is “highly unlikely” to see a repeat of the firsthalf trading bonanza, it would not be a “bad” end to the year since client activity remains “elevated”. Investors remain wary Investors remain sceptical. Uncertainty over loan-losses, concerns over revenues in ultra-low-rate environments and bans on dividends and share buybacks have translated into a mass sell-off of the sector. European bank stocks have plunged 39 per cent this year compared with a 13 per cent fall in the benchmark Stoxx Europe 600 index. In the US, the Nasdaq Bank Index has fallen more than a third, while the S&P 500 is flat for the year. That has wiped out a combined $987bn in shareholder value, Citi data shows. “Banks have fulfilled their role in the macroeconomy this time,” says Philipp Hildebrand, who headed financial stability at the Swiss National Bank in 2008 and is

now vice-chairman of BlackRock, the $7.3tn asset manager. “But in Europe at least, they have not performed from a shareholder point of view.” Even the most resilient have not been spared. “I’m feeling a bit exasperated,” admits Thomas Gottstein, chief executive at Credit Suisse, referring to the negative reaction to his bank’s $1.8bn second-quarter profit, up 19 per cent year-on-year. “After these numbers, for our share price to be down?” Investors no longer “differentiate between Swiss, other European banks and the US banks. They throw us all into the same bucket,” he adds. “There is a lot of concern about a second [coronavirus] wave, a W-shaped recovery, another lockdown . . . There’s a lot of cynicism out there.” European banks trade at an average 48 per cent of the book value of their net assets compared with 89 per cent in the US. Centuries-old national champions Barclays (€17.4bn), Deutsche Bank (€15.6bn) and Italy’s UniCredit (€17.2bn) are collectively worth less than Zoom, the $72bn (€61bn) videoconferencing company founded in 2011. France’s Société Générale — with its €1.5tn balance sheet and €3.2bn of profit last year — has seen its share price plunge 60 per cent in 2020 and is now valued at €11bn, less than lossmaking workplace messaging app, Slack, at €14bn. “Things are getting a bit crazy. Economies are in recovery mode, capital and cash positions are very strong and yet bank valuations are worse than in 2009, it beggars belief,” says David Herro, vicechairman of the $90bn asset manager Harris Associates, which owns top-five stakes in Lloyds, Credit Suisse and BNP Paribas. “I have to believe we are at or close to the bottom [of the valuation],” he adds. “It’s not easy keeping faith, but this virus will pass like all before it.” Not all share Mr Herro’s conviction. Bankers’ early optimism that the pandemic would manifest as a sharp economic shock followed by an equally rapid recovery — the ubiquitous “V-shaped” recession — has given way to pessimism. Ana Botín, executive chairman of Santander, the eurozone’s largest lender, said in March that her bank’s earnings could fall as little as 5 per cent this year, in the wake of the pandemic. Four months on, Santander has set aside €7bn to cover loan losses and booked a hefty writedown of its UK business, pushing the Spanish bank to the first quarterly loss in its 163-year history.

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