BusinessDay 12 Mar 2020

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news you can trust I ** thursDAY 12 march 2020 I vol. 19, no 518

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fter several days of silence amid a coronavirus outbreak and full-blown oil price war, Nigeria’s fiscal and monetary authorities will announce measures in coming days to deal with the economic fallout that has sent oil prices tumbling.

“We will not hesitate to de-

Dangote urges diversification as banks quote dollars at N390 No buyers for 50 cargoes of Nigeria crude, 12 LNG cargoes

What are the likely policy responses from FG to oil collapse? See page 39 ploy additional measures to shield the Nigerian economy from headwinds,” Central Bank Governor Godwin Emefiele said at the consultative roundtable

themed ‘Going for Growth 2.0’ held in Abuja on Wednesday.

Brent crude prices have slumped more than 40 percent this year to around $37 a bar-

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Nigeria to unveil fiscal, monetary plan to counter oil slide, coronavirus ONYINYE NWACHUKWU, Abuja

fgn bonds

Treasury bills

rel, as Saudi Arabia and Russia jostle for market share and the coronavirus slows global growth Continues on page 38

NGUS feb 26 2025 380.00

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No respite for investors as stocks slump for third straight session in week SEGUN ADAMS

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tocks continued their descent on Wednesday, recording their secondbiggest decline in 2020 to widen year’s loss by the most yet.

The most capitalised stock, Dangote Cement, shed 10 percent to N153 a unit after remaining relatively quiet in the previous market routs, pushing the market 3.35 percent lower and YTD to -12.18 percent. Stock investors have now lost over N1trn since Monday.

The cement maker makes up about 21 percent of the entire stock market.

Despite the downturn in the market, banking stocks saw relatively strong bids for the first time this week as stocks “fall to very attractive levels enough to compensate for risks”, said Gbolahan Ologunro, an analyst at Lagos-based CSL Stockbrokers Ltd. Ologunro said live trade data suggest movement in Dangote Cement share price might have been due to the activity of a single unnamed investor.

Nestle, United Capital and Oando were among the laggards Continues on page 38

Inside

L-R: Aliko Dangote, chairman, Dangote Group; Rotimi Amaechi, minister of transport; Babatunde Fashola, minister of works and housing; Zainab Ahmed, minister of finance, and Godwin Emefiele, governor, Central Bank of Nigeria (CBN), at the consultative roundtable with the CBN governor themed ‘Going for Growth 2.0’, at the CBN headquarters in Abuja, yesterday.

Pic by Tunde Adeniyi

Senate seeks ban of electricity generators despite poor power supply P. 2

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Thursday 12 March 2020

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news High cost oil producers like Nigeria to suffer worst impacts of price war ISAAC ANYAOGU

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s oil pro ducers scramble to outdo one another in offering bargain prices for crude oil, countries that will hurt the most are those with a higher cost of production like Nigeria, a situation it has failed to address over the years.

Over 40 percent of Nigeria’s crude oil production now happens at offshore fields which are very expensive requiring huge capital outlay.

The rest happens in onshore terrains marred by militancy, oil theft, and brigandage.

In addition, oil companies are now required to pay punitive taxes and royalty rates upon the revision of a Deep Offshore Act when compared with Nigeria’s OPEC peers.

“Besides the high tax and fiscal regime, which is not the friendliest, there is also a high level of insecurity in the oilproducing areas which ensures that operators have to incur other miscellaneous costs that may be inapplicable in other regions,” said Desmond Ogba, an energy lawyer at Lagos-based Templars law firm.

Yet, the fiscal and regulatory environment is marked by instability carrying huge political and business risks which, when factored in, push Nigeria’s cost of production effectively around $30 a barrel, one of the highest in OPEC.

“Oil producers price the political risks and instability in Nigeria into their investments and this raises production costs in Nigeria,” said Ayodele Oni, energy lawyer, and partner at Lagos-based Bloomfield law firm.

The challenge for Nigeria is that it is entering into a price war with producers like Saudi Arabia whose cost of production hovers around $4 per barrel and Russia with over $560 billion in foreign currency reserves.

Nigeria’s foreign currency reserves are a paltry $37 billion, setting the stage for David vs Goliath-style confrontation absent the sling and stones.

However, the true cost of crude oil production in Nigeria often depends on which government official is reading a prepared speech.

“Let me go back memory lane. The technical cost of crude oil production in the 1980s/90s was around $4 per barrel. In early 2000, it was between $5 and $6 per barrel. Today, it is over $35 per barrel,” said Timipre Sylva, minister of state for petroleum resources, at a seminar on effective cost management in the oil and gas sector in Abuja last December.

At a consultative roundtable with the CBN governor

Senate seeks ban of electricity generators despite poor power supply ... prescribes 10 years imprisonment for importers Solomon Ayado, Abuja

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he Senate is seeking to ban electricity generating sets in the country and is proposing 10 years imprisonment for importers of generating sets.

This is contained in a bill sponsored by Bima Enagi (Niger South), which passed first reading in the Senate on Wednesday.

“All persons are hereby directed to stop the use of electricity generating sets which run on diesel/ petrol/kerosene of all capacities with immediate effect in the country,” the bill stated.

The proposed ban is applicable to all types of

generators, except for ones providing essential services such as in hospitals and other health facilities.

Analysts say the bill is a joke in a country where the Federal Government has yet to figure out a sustainable solution to the regular power outage that has bedevilled the country for decades now. Businesses and households rely on power generating sets to supply own power, which adds to their costs.

While power supply hovers around mere 3,000MW, Saleh Mamman, minister of power, recently threatened to dump the electricity distribution companies (DisCos) over epileptic power supply, blaming current situation

on their inability to distribute stranded power. “ Ni g e r i a c u r re n t l y generates 13,000MW of electricity, it transmits 7,000MW to DisCos while the distribution companies can only distribute 3,000MW to end users,” Sale said.

But in a response to the claim, Association of Nigeria Electricity Distributors (ANED) argued that the statement by Saleh was untrue, saying the quantum of power that DisCos supply to their customers was based on the allocation they got from the TCN. It said TCN wheels a mere 4,303MW supplied to consumers.

It is amid this back and forth that the Senate is

proposing to ban the use of generators.

“A ny b o d y w h o i m ports generating sets, or knowingly sells generating sets shall be guilty of an offence and be liable on conviction to be sentenced to imprisonment for a term not less than 10 years,” the bill said.

According to the bill, generators used for “essential services include medical purposes (hospitals and nursing homes and healthcare facilities), airports and railway stations/services”.

Other essential services allowed to use generators are elevators, escalators, research institutions and some facilities that require 24-hour power supply.

Continues on page 38

MTN plans for new Group CEO as Shuter steps down in 2021 Jumoke Akiyode-Lawanson

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TN Group says it is currently working on a succession plan for the company, as the group president and CEO, Rob Shuter would be stepping down from his role at the end of his contract in March 2021.

According to MTN, the succession process will be concluded during the year, enabling a seamless handover.

Charles Molapisi, the chief technology and IT officer, MTN Group, has been appointed to the group executive committee and the fixed contract of the group chief operations officer, Jens SchulteBockum, has been extended until March 31, 2022.

The company, which recently released impressive results for the year ended December 31, 2019, said the encouraging outcome was delivered against challenging macroeconomic conditions, particularly in South Africa, with muted economic activity and the rand weakening against the US dollar.

“In 2019, the 25th anniversary of MTN Group, we delivered commercial momentum across our operations as well as great progress in our

strategy and strong financial results, despite challenging trading conditions.

“We added 18 million customers to reach a total of 251 million and increased our data users by 17 million to 95 million and our fintech customers by 7 million to 35 million. This growth is central to our belief that everyone deserves the benefits of a modern connected life. We also saw improvements in customer experience, network quality and market share across the Group,” Shutter said.

In constant currency terms, group service revenue increased by 9.8 percent to R141.8 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) expanded by 13.6 percent to R53.4 billion. The holding company leverage ratio improved to 2.2x, which is well within the group’s guidance range of 2.0 to 2.5x, and MTN reduced its capex intensity to 17.5 percent from 19.3 percent, indicating greater efficiency in deploying assets.

Driven by the strong earnings performance, operating cashflow increased by 18 percent and the return on investment increased from 11.5 percent in 2018 to 14.3 percent in 2019 on an IAS17 basis. www.businessday.ng

L-R: Isyaku Tilde, acting executive commissioner, operations, Securities and Exchange Commission (SEC); Mary Uduk, acting director-general; Daisy Ekine, chairperson, Market Wide Technical Committee on Commodity Trading Ecosystem, and Edward Okolo, acting executive commissioner, corporate services, SEC, during a press briefing of the forthcoming SEC International Conference on Nigeria Commodities Market 2020 in Abuja, yesterday.

Pic by Tunde Adeniyi

CBN extends uniform account number to OFIs by April 20

… fixes March 15, 2021 as deadline for compliance HOPE MOSES-ASHIKE

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he Central Bank of Nigeria (CBN) on Wednesday revised the Nigeria Uniform Bank Account Number (NUBAN) to include the Other Financial Institutions (OFIs) for efficient operations of electronic funds transfer and cheque clearing operations by Deposit Money Banks (DMBs) and OFIs. Other Financial Institutions are institutions, apart from commercial banks, that carry out financial services and activities. They include microfinance banks, primary mortgage banks, finance

companies, development finance institutions.

The revised standard takes effect from April 20, 2020 with a deadline of March 15, 2021 for full compliance, according to a circular signed by Musa Jimo, director, payment system management department, CBN. The circular stated that appropriate sanctions would be imposed for contraventions and non-compliance to the revised standard.

The CBN first issued the NUBAN standard in August 2010 to achieve uniform customer bank account numbering structure among all the deposit money banks in

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the country.

In view of the success of the NUBAN standard across DMBs and the increasing role of the OFIs in the electronic payment system, the apex bank said it was imperative that the scope of the standard be expanded to include the OFIs. “It is in this regard that the revised standard on Nigeria uniform bank account number scheme for banks in Nigeria was revised to include the OFIs,” the circular stated.

The NUBAN issued to a customer shall be 10 digits which is unique within each deposit-taking institution, the CBN said. @Businessdayng

The standards set out the approved structure of a customer account number in all deposit-taking institutions in Nigeria.

According to the circular, the NUBAN format shall consist of 16 digits with the following structure: ABCDEFGHIJKLMNO-P where – For DMBs: ABCDEF is the 3-digit Financial Institution code assigned by the CBN, with 3 leading zeros, e.g., ‘011’ and ‘232’ become ‘000011’ and ‘000232’, respectively.

For OFIs: ABCDEF is the 5-digit Financial Institution code assigned by the CBN with a leading ‘9’ e.g. ‘50547’ becomes ‘950547.

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ACCA forum: Experts urge professionals on tax planning, compliance to new Finance Act AMAKA ANAGOR-EWUZIE

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xperts in the tax industry have advised practitioners to learn the importance of planning for tax payment and complying with the provisions of the new Finance Act of 2019.

Speaking at an interactive forum organised by the Association of Chartered Certified Accountants (ACCA) in partnership with the Chartered Institute of Taxation in Nigeria (CITN) in

Lagos recently, Taiwo Oyedele, PWC West Africa Tax leader/partner, who was the keynote speaker, stated that increase in Value Added Tax (VAT) from 5 percent to 7.5 percent had resulted in rise in the cost of production, and market prices of goods would go up because companies must pay tax.

To Oyedele, all taxes are borne by people through the price of goods, adding that professionals have a lot of work to do under the new Finance Act.

“It is good to do tax planning but the most important thing is to get everybody into the tax net first.

When people are invading tax, it cost even higher than trying to do the right thing,” he said.

He pointed out the need for professional to learn to put some planning behind their companies’ tax payment, and listed options such as claiming capital allowance on assets such as car, phones and others as good way to plan.

In terms of tax compliance,

he noted that many professionals were worse than the ordinary people because there were tax consultants who do not pay taxes, but “these kinds of people help companies to comply when the practitioner is not compliant.”

He advised professionals using company name such as ‘Taiwo & Co.’ to use this opportunity to register a limited liability company, where all their revenues can be transferred to enable him pay lower tax rate of Personal Income Tax (PIT) as low as 2 percent on the

initial company.

Oyedele, who noted that there were lot of corruption among practitioners than the entire population, appealed to people to say no to bribery to enable the system get better, adding that practitioners needed to be committed to doing the right thing.

Titilayo Fowokan, group head, Strategic Tax and Compliance, Dangote Industries Limited, who noted that the Finance Act came with mixed feelings for the industry, said there were issues of

Awaiting trial inmates get opportunity of freedom in Lagos JOSHUA BASSEY

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n a move aimed at decongesting the prisons (now known as correctional centres), the Lagos State government has urged lawyers, families and the general public to forward details relating to trial of clients/relations being held over minor offences to the office of the Chief Registrar of Lagos State High Court to commence the process of granting freedom to such inmates, especially those on awaiting trial.

Nigerian prisons are generally congested due to slow judicial processes, leading to thousands of inmates being held as awaiting-trial. There is also the issue of several others on death row, as state governors have consistently shy away from signing the death warrants of condemned inmates.

Equally contributing to the sad narrative is alleged frequent raiding of suspected crime hideout by the police, where persons arrested in

such operations, who cannot bail themselves as well as those accused of minor offences are taken to the prisons without trial in some cases, thereby further worsening the congestion.

However, a notice signed by the chief registrar, titled “correctional centres decongestion exercise,” in pursuant to the directive of the Chief Judge (CJ) of Lagos State, and in preparation for the next correctional centres decongestion, request members of the bar and the general public to send to the office of the chief registrar detailed particulars of awaiting trial inmates who have spent two years and above in any of the correctional (prison facilities) in Lagos State.

The notice advised that all such requests must reach the office of the chief registrar on or before March 20, 2020, indicating name of the persons involved, high division and number as well as the magistrate court division and number of the trial.

CBN to issue N512.8bn TBs in Q2 2020 … as dollar sells above N370 HOPE MOSES-ASHIKE

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entral Bank of Ni g e r i a ( C BN ) will issue a total of N512.8 billion worth of Treasury Bills in the second quarter of 2020, as the same amount will be maturing between March and May this year.

The CBN stated this in the Nigerian Treasury Bills issuance programme calendar released on Wednesday.

The breakdown of the Nigerian TBills programme to be issued in the next three months of the year 2020, which represents the amount that will mature during the period, consists of a total of N94.2 billion for 91 days tenor, N86.2 billion for 182 days tenor and N332.3 billion for 364 days tenors.

The CBN issues TBs twice in a month to help the Federal Government fund its budget deficit, support banks in managing liquidity in the system and curb inflation.

However, nervous consumers are buying up the US dollars to hedge against imminent devaluation of the naira.

Conse quently, after trading on Wednesday, the dollar was sold above N370 from N359/$ sold on Monday at the black market.

“I did not even see the dollar. It is scarce,” one of the black market operators at the Lagos International Airport told BusinessDay. Also at Apapa and Festac areas of Lagos, dollar was scarce as customers were seen scrambling and making calls all over in quest for the dollar. www.businessday.ng

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small, medium and large, and the question was basically how to classify and separate them from each other.

According to Fowokan, the first mixed feeling was on the rate, which sent many signals to the industry as to what to do about customers that have paid in advance for products, and “so, most companies took the heat of the change in VAT because they could not go and tell customers that have paid earlier to pay additional 2.5 percent VAT.

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news

As 39 Covid-19 contacts set to regain freedom in Ogun … people jittery, say freed contacts may be treated as pariah

RAZAQ AYINLA, Abeokuta

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s the 14-day observation period for the 39 contacts of the first Italian index case of Coronavirus isolated in the Lafarge Africa’s facilities at Ewekoro in Ogun State lapses today, uncertainties rise over the reunion of the contacts with family members and the communities at large, as some residents are already expressing some degree of anxieties.

Some residents of Ewekoro, who spoke with some journalists that visited the Isolation Centre within Lafarge facilities on Wednesday, observed that the place was somehow deserted except for the security men manning the gate of Lafarge Africa’s Ishofin Estate as the residents await what would happen on Thursday or Friday, when the 39 contacts would be freed and reunited with their families.

Recall that the first Italian index case of the Covid-19 was recorded in Lagos en route Lafarge Africa’s facilities in Ogun State on February 28, which prompted government, World Health Organisation and Lafarge Africa to isolate 40 persons that had had contact with the Italian for close clinical observation for a 14-day period.

But, Osagie Ehanire, minister of health on Monday, announced that one of the 40 isolated contacts at Ewekoro was diagnosed and tested positive to the deadly virus, though not symptomatic as of Monday that marked 11 days of isolation and close clinical observation of the contacts, confirming the second Coronavirus case in Nigeria, reducing the number of isolated contacts at Ewekoro to 39.

BusinessDay reports that some residents and members

of staff who spoke with the journalists in confidence said “though some members of staff know some of the contacts as some of them are living close to the facilities with their families, the non-disclosure of the contacts’ identities would also contribute to panics and uncertainties that surround the whole things.

“Although, our facilities have been taken over by Government, Nigeria Centre for Disease Control and WHO as you can see - the Ishofin estate has been converted to Isolation Centre, but I think Government needs to do more by updating the people of the goings-on to douse the tensions, I won’t lie for you, by seeing us with Lafarge uniforms, people are panic, it takes us to explain all the efforts being taken to douse people’s tensions.

“Tomorrow (Thursday) will clock 14 days of close clinical observation and we shall thank God if the remaining contacts are negative but it will take lots of information and explanations to the people why they must not treat the freed contacts as pariah because may think that they will contract the deadly disease from them.

“Therefore, they will run away from them once they know that they are the contacts. Identities of these people can’t be covered continuously rather they must demythicise the myths, rumours and fallacies around the Coronavirus for these people to be properly reunited with their families and communities at large.”

Meanwhile, the Ogun State government has said its proactive measures being put in place to contain and prevent the spread of COVID-19 outbreak popularly known as Coronavirus in the state is yielding positive results.

Eko Bridge no longer safe for public use, says works controller JOSHUA BASSEY & CHUKA UROKO

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he Federal Ministry of Works and Housing says the popular Eko Bridge in LagosStateisnolongersafe for public use following the sudden discovery of worn-out bearings on a sectionofthebridge(betweenAlaka and Costain inwards Apongbon), which forced its closure to traffic flow by the Lagos State government on Tuesday night.

Adedamola Kuti, the Federal controller of works, Lagos, made this known after he led Governor Babajide Sanwo-Olu and other Lagos officials to inspect the bridge.

The Eko Bridge was constructed in the 70s by the military administration of Yakubu Gowon, and until recently, not undergone any major maintenance works.

“We just discovered that the bearings are gone. The bearings are broken, and we are having problem with the bridge deck. As a matter of fact, the bridge is no longer safe for public use.

“We need to carry out detailed investigation: an assessment of this particular bearing and all that,

… no definite date for re-opening to traffic then we will be able to give further information on what we can do, but for now the bridge is not safe for public use. It has to be shut down,” Kuti said.

Meanwhile, the Lagos State government would be carrying out full Traffic Impact Assessment (TIA) on the bridge. The state government is also vexed by dead (stationary) weight on the bridge as a result of the continued occupation of heavy duty and stationary trucks on the bridge.

“These are bridges that are not made to have dead weight on them and what do I mean by dead weight, all the heavy trucks and containers that are parked on them. They are not designed for such usage.

“And so what we will do is to go back with our ministry of transportation, and do a full traffic impact assessment. And we will see where we can advise commuters on how to go about their vehicular movement just as we provide adequate alternatives,” Sanwo-Olu said.

The discovery of the worn-out bearings forced the federal and state authorities to shut the bridge to traf-

ficflowintheearlyhoursofWednesday, March 11, triggering massive gridlocks in and around Surulere and its environs with motorists and commuters bearing the brunt.

Sanwo-Olu told journalists after inspecting the bridge that the government would take immediate steps to fix the defect as well as beam searchlight on other bridges.

He said the government had to close the bridge as precautionary measure, insisting that the bridge and others in the state must be repaired, and assured that contractors would get to work to carry out repair works on the defective section within the shortest possible time.

Decrying the manner Lagos bridges have been abused, the governor assured that the state’s ministry of transportation would ensure that traffic rules and principles were followed.

“I want to reiterate, and to assure Lagosians that both Lagos government and the federal ministry of works will get to work and we’ll see how quickly we can rem-

edy the current situation,” he said.

Meanwhile, the Federal Government said there was no definite date yet when the Alaka Bridge would be opened to traffic. This announcement means that motorists who must use the Eko Bridge to access Apapa or the Island have to plan their movement very well in order to save time and be useful to themselves thereafter.

The decision to close the Bridge was jointly taken by the Lagos State and Federal ministries of works and their transportation counterparts who converged on the bridge that night for the emergency closure Kuti explained to BusinessDay on Wednesday that repay work on the bridge would commence after investigation of the discovered fault.

“We have shut down the bridge so that we can carry out full investigations on the extent of damage to the bearings discovered to be bad; the investigation is going to be comprehensive and so we will not go into speculations on when the bridge will be opened to traffic,” he said.

African Leadership Magazine honours First Bank, CEO

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irst Bank of Nigeria Limited and Adesola Adeduntan, its CEO, have been respectively awarded the African Bank of the Year and African Banking Personality of the Year 2019 at the eighth African Leadership Magazine Persons of the Year Award dinner. The event themed ‘Africa for Africans – Exploring the Gains of a Connected Continent’ was recently held in Johannesburg, South Africa.

The First Bank CEO was honoured with the African Banking Personality of the Year award in recognition of his significant contribution to the financial industry and Africa’s socioeconomic development while First Bank, which celebrated it centennial anniversary in 2019, was identified with the African Bank of the Year Award for its leading role at demonstrating high performance across various metrics, in terms of maintaining public trust, business integrity, corporate governance, ethical codes of conduct, excellent customer service and innovative banking products and offerings.

Adeduntan dedicated the awards to all his colleagues at First Bank of Nigeria Limited

and FBNBank, its business footprints in over half a dozen countries across three continents, thus; FBNBank UK, FBNBank China, FBNBank Ghana, FBNBank DRC, FBNBank Senegal, FBNBank Sierra Leone, FBNBank Gambia and FBNBank Guinea, as with their commitment the bank has continually reinvented itself, impacting and promoting financial activities, especially with its renowned leading digital banking services.

The event had in attendance over 200 prominent political, business and diplomatic leaders including; President of the African Development Bank, Akinwumi Adesina; South African Deputy President, David D Mabuza, South African Ministers Nkosazana Dlamini-Zuma and Lindiwe Zulu, and Ken Giami, Publisher of African Leadership Magazine among others.

According to African Leadership Magazine, its Persons of the Year Award is a vote-based awards programme, reserved for African business, political, diplomatic, sports and entertainment leaders, who are considered to have blazed the trail in different categories in the year under review.

L-R: Evan Leybourn, founder, Business Agility Institute/speaker; Abiodun Osoba, founder/CEO, The Agile Advisor Africa/ chairman, Agile Practitioners Association of Nigeria; Hardish Wilkhu, director, Cognetiks Consulting/speaker, and Tunde Giwa, head, enterprise Agile Transformation, The Agile Advisor Africa/director, Agile Practitioners Association of Nigeria, at the DevOps conference during the 2020 annual Agile Nigeria Conference in Lagos.

Pic by Pius Okeosisi

These 4 start-ups are most innovative in Nigeria for 2020 BUNMI BAILEY

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iggyvest, Tizeti, Kobo360 and 54gene are the four most innovative start-ups and are among the top 10 African companies for 2020.

According to the 2020 World’s Most Innovative Companies (MIC) list by Fast Company, one of the world’s most influential media brands, the list provides both a snapshot and a road map for the future of innovation across the most dynamic sectors of the economy.

The annual list features 434 businesses from 39 countries, including more than a few African companies who stand shoulderto-shoulder with the likes of Snap, Microsoft, Tesla, Spotify, and Canva on the list.

“Though the leading companies in Africa are finding solutions to local problems, their applica-

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tions are relevant well beyond their borders,” the company stated.

Innovation can be defined as the introduction of new or significantly improved goods or services to the market, or the use of new or significantly improved processes for producing goods and services.

It is important to ensuring the future success and competitiveness of business enterprises in an increasingly competitive global economy.

Piggyvest: A four-year-old company was chosen for helping West African millennials invest and save for the future. The savings platform helps users save by automatically deducting fixed amounts from their accounts at set periods (according to user’s instructions) and moving the money into savings or investment accounts.

Tizeti: This was chosen for harnessing the power of the sun for an affordable 4G network.

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This Nigerian start-up, launched in 2016, is known for providing public Wi-Fi hotspots in urban areas and rolling out a high-speed network across the country using solar-powered towers.

Kobo360: Launched in 2016, was chosen for connecting African truck drivers with companies in need. The Kobo360 digital platform facilitates freight logistics services by connecting truck drivers and fleet operators with companies they need their goods moved throughout Nigeria and beyond.

54gene: This company was launched in 2019 and was chosen for building an Africa-wide genetic biobank. This genetics company has taken the first step toward creating an Africa-wide genetic biobank by partnering more than a dozen hospitals in Nigeria in an effort to collect, sequence, and analyse the genomes of their patients. @Businessdayng

Damilola Adewale, an economic researcher, says this new development affirms the Information and Communication Technology (ICT) sector as the number one driver of growth of non-oil sectors in Nigeria.

“There have been a lot of investment activities going on in that space. Most of them have been able to secure funding from international organizations. If this is sustained, then the momentum of growth in the sector will remain strong, even if the broader economy is growing somehow slowly,” Adewale states.

Apart from Nigeria, companies from Kenya, Senegal and South Africa also made the top 10 most innovative list.

On the worldwide scene, Snap, an American camera and social media company, was rated the number one most innovative company for setting social agenda.

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Research&INSIGHT

In association with briu@businessday.ng

A WEEKLY PUBLICATION OF BUSINESSDAY RESEARCH & INTELLIGENCE UNIT(BRIU)

08098710024

How rice fared in 2019: Highlights from the Nigeria Rice Industry Report 2020 ADEMOLA ASUNLOYE

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n the Rice Industry Report 2020, which is produced

by BusinessDay Research & Intelligence Unit (BRIU) and that will be released by month end, we bring to the attention of our readers the global trends, new developments and opportunities in the rice industry.

In 2019, the global grain production sits on a production quantity of 2.63 billion metric tons. From this, the production of corn and wheat came to 1.1 billion metric tons and 731.45 million metric tons respectively, while rice paddy amounted to 728.07 million metric tons (MMT) (Statista figure, 2018) and milled production at 499.2 MMT worldwide respectively.

Of the total worldwide grain produced in 2019, rice paddy production (or milled) alone had a share of 27.72 per cent (or 19 per cent). Based on the volume of production in 2019, rice emerged as the world’s third most produced cereal crop after maize (1.12 billion metric tons) and wheat

Source: USDA, BRIU

of wheat, rice, barley, oats and rye.

In 2019, the yield of rice measured in metric tons per hectare (t/h) was up by 1.10 per cent globally to 4.58 t/h from 4.53 t/h from the previous year.

Asia generally was prevalent in milled production by far among other regions. Sub-Saharan Africa trails Asia with a milled production quantity of 18.60 MMT which is about 3.09 MMT larger than that of South America.

Nearly 447.35 MMT of rice is grown in Asia (East, South, South-

Source: USDA, BRIU

(731.45 MMT). It is grown in more than a hundred countries on a total harvested area of approximately 162.71 million hectares worldwide in 2019.

Global production of major grain-crops showed decreased production in corn and sorghum at a year-on-year (YoY) decline of 0.99 per cent and 3.77 per cent respectively. Whereas, there was increase in the quantities produced

East), representing 90.07 per cent of the global production (496.67 MT). In Sub-Saharan Africa, 18.60 MMT representing 3.75 per cent of the global production of milled rice was produced in the same year.

As the global milled production witnessed 0.88 per cent increase from 494.83 MMT in 2018 to 499.18 MMT in 2019, global consumption further increased by

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0.95 per cent from 482.161 MMT to 486.747 MMT within the same period. Contrary to the growth in production (milled), world acreage lowered by 0.15 per cent from 162.95 million hectares in 2019 to 162.71 million hectares in 2019.

China is currently the world leader even in hybrid rice production. Despite China’s highest volume of production, the country stands alone in rice consumption of 142.72 MMT. Other major milled rice producing countries in 2019 aside from China and India are Indonesia, 36.70 MMT; Bangladesh, 34.91 MMT; Vietnam, 27.77 MMT, even as production correspondingly decreases in size in Thailand, Myanmar, Philippines, Japan, Pakistan, Brazil (7.14 MMT), the United States (7.11 MMT), Cambodia (5.74 MMT), Nigeria, South Korea (3.87 million metric tons) and Egypt.

Nigeria, although the 14th in the world, leads as the largest rice producing country in Africa with 4.79 MMT of milled rice in 2019 from about 7.4 MMT of paddy production estimate. The paddy produced was down by 3 per cent or 200 thousand metric tons, lower than post market year (MY) 2018/19 estimate of 7.6 million metric tons. The drop is attributable to a 3 per cent reduction in forecasted area harvested, representing a fall off of around 100,000 hectares compared to MY 2018/19.

However, consumption (7.0 MMT) outweighed production in Nigeria by 146.13 per cent of milled production in 2019.

Before August 2019 when the

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Federal Government of Nigeria (FGN) closed land borders against the importation of the banned commodities, Nigerians’ demand for foreign rice has been strong even when restrictions were placed on the importation of rice.

Estimates show that overall, the ratio of the sale of foreign rice to local rice in the Nigeria markets is 5 to 1, according to USDA. That is, there are five bags of imported rice for every bag of local rice sold in the market.

The direct rice shipments of rice to Nigeria from Thailand and India have been declining in recent years; even though there have been large officially reported increases in rice exports to Nigeria’s neighbours- Benin, Cameroun, Niger, and Togo. These countries with lower import tariffs and porous borders created conditions

the domestic rice not price competitive.

On the flip side, upon the land border closure, Nigerians have been compelled to shift preference to local rice varieties. Consequently, farmers and millers in the rice value chain are gaming up to increase production quantity as they laud the Federal Government of Nigeria (FGN) on the border closure.

As there are two sides to a coin, this decision by the FGN was condemned to be retrogressive as it affects all other commodities, products and businesses, even outside the agricultural sector.

Some experts opined that rather than a ban on rice importation (border closure) to reduce smuggling, a reduction in import tariffs will automatically discourage smuggling.

Source: USDA, BRIU

favourable for transhipments.

Imported rice is also cheaper than locally produced rice, further driving consumer demand to foreign rice. Prior to the border closure, a bag of imported rice weighing 50 kilograms was sold at an average of N13,500, while an equivalent size bag of parboiled local rice was sold for an average of N15,500.

Some factors are responsible for the high price of local rice.

These include high production costs, due to high input costs, low quality seeds, inadequate infrastructure and high internal transportation costs from farm gate to the markets. These make

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There has been significant progress made in curtailing smuggling, even though the effect of the ban rippled across the land as aggregate demand for locally produced rice garner more pressure on the prices of local rice varieties at the commencement of the border closure.

Now, the prices of rice are beginning to adjust based on increase in local production.

Private sector investors are keen to invest in rice production given the support programs and protective trade policies. The calls from the consumers for quality locally produced rice calls for standardisation of the Nigerian local rice.

Thursday 12 March 2020

BUSINESS DAY

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news

REA gets $200m to power 105,000 homes with renewable energy Cynthia Egboboh, Abuja

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he Rural Electrification Agency (REA) says it got a $200 million fund from the African Development Bank (AfDB) to power 105,000 households that could benefit over 500,000 people in Nigeria.

Ahmad Salihijo, managing director, REA, disclosed this on Tuesday, stating that the Federal Government in its bid to improve energy access for rural communities had secured a $200 million AfDB investment to develop the off-grid sector of the Nigeria Electrification Project (NEPAFDB).

Salihijo said the NEP was comprised of four components which include; Solar Hybrid Mini Grids at $70 million, Energy-Efficient Appliances for Productive Use at $20 million, Phase 3 of the Energizing Education Program at $100 million, and Technical Assistance and capacity building at $10 million.

“The Nigeria Electrification Project (NEP) is not new.

It is already the largest single investment stream in Nigeria’s off-grid sector addressing the energy access challenge through mini-grids, the solar home systems and the Energizing Education Program (EEP) of the Federal Government.

“We have now clearly shown the abundant opportunities and the gain in shifting focus from the grid-based energy to delivering renewable, off-grid solutions to Nigerian communities.

“These initiatives are making a difference in how energy access objectives are fulfilled sustainably, while at the same time, making a difference in the lives of the Nigerian people that were unserved or underserved”.

The minister of state, power, Goddy Jeddy Agba, in his remark commended AfDB for the partnership. Agba, who referred to the success story of Rokota Mini Grid in Niger State, executed by REA with World Bank’s funding in 2019, said, “If we could have many of those things done across the country, we could have a lot to shown in a very short time.”

The acting vice president, Power Energy, Climate and Green growth Complex, AfDB, Wale Shonibare, said Nigeria needed to connect 500,000 to 800,000 households per year to achieve the electricity for all target by 2030 in line with the Sustainable Development goals (SDGs) as 80 million Nigerians lack access to sustainable and affordable electricity.

Shonibare noted that although Nigeria’s power sector was privatized in 2013, it still struggles to generate 4,000 megawatts (MW) for the Nigeria population, leaving 80million without access to power.

“With the improvement in off grid technology, there is now a means to reach unserved and underserved communities”.

FIRS cautions on risks in deploying ICT-based inventions for tax collection in Africa Cynthia Egboboh, Abuja

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xecutive chairman, Federal Inland Revenue Service, Muhammad Nami, has cautioned the West Africa Tax Administration Forum (WATAF) on the disruptive tendencies embedded in the Fourth Industrial Revolution being driven by powerful Information and Communication Technology-based inventions like Block chain, Machine Learning and Artificial Intelligence.

Nami said while these technological innovations have the beneficial tendency to help revenue agencies in their assigned national task, they also

have great ability to undermine tax collection because they have created new, fluid, hard-to-trace ways of doing business that makes it difficult for revenue agencies to tax their transactions.

At the WATAF capacity building seminar for tax administrators from across West Africa, held in Abuja Tuesday, Nami explained that the disruptive technological innovations in the world presently, such as Block chain technology, Machine Learning and the whole gamut of Artificial Intelligence (AI) have dire consequences for developing economies in terms of revenue loss and high staff

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turnover.

Speaking further, Nami stressed on the need for Managers of Human Resources in Tax Administration to recognize the dynamics of changes occurring in the world in terms of the way businesses are being done and reported with a view to adjusting accordingly in order for these revenue agencies to meet their mandates to the government and people of their respective nations.

“The effects are also in the areas of staff dissatisfaction and deliberate ‘Head hunting’ of the very best of our staff by private entities which continue to deplete our work force”, he said.

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“The increasing recognition of the important role of tax administrations in sustainable domestic revenue mobilisation for our governments has expanded our scope of operations thereby making it necessary for us to re-jig our approach to human resources management.

“I call on you all to make a resolution that after this threeday training you will form a mind-set that i tuned towards harnessing previously untapped potentials that exist in our systems by optimal use of our human resources in accordance with the global best practices.”

Babatunde Oladapo, executive secretary, WATAF, said en-

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suring competence and integrity of tax administrators was critical in ensuring improved and sustainable domestic revenue for member states, adding that there was an urgent need to develop an institute for tax resource management in Africa.

Oladapo noted the urgent need to promote stronger capacity among tax administrators as challenges that constraint revenue collection emerges too often.

He said, “There is need for us to build up capacity of our tax administrators as we realise that human capital plays a vital role in tax administration in the region.

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Are they true?

ik MUO

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n these days of fake-news and its twin brother, hate-speech, it is wise for one to take precautions because as our people would say, nkwucha abuhu ujo (taking precaution is not a sign of cowardice).

There are some stories I have been reading in recent times and to be on the safe side, I just want to ask everybody and nobody in particular whether there is any truth in them. I am particularly expecting the confirmation of the minister of information, who is the author and finisher of fake news and allied matters.

Here we go.

In the past one week, the story has been making the rounds about how the new $22.7 billion loan recently approved for the government (not for we the people) would be utilised. The sharing formula as reported is: North Central, $6.5 billion; North West, $6.4 billion; SouthSouth, $4.3 billion; General (which one be dat?), $5.9 billion; North East, $300 million; South West, $200 million; South East, $000000000!

Is it true that the money borrowed on our behalf and which all of us will repay is to be shared like this? Is it possible?

How can North Central, North West and “General” take 70% of the money? When did South-South join the list of the “oppressors”? And, particularly, is it true that the South East will not get anything out of it; a loan borrowed by the federation and which the federation would repay? What exactly is happening?

The other day, I heard about the National Agency for the Education, Rehabilitation, De-radicalisation and Integration of Repentant Insurgents in Nigeria’ sponsored by Senator Ibrahim Geideam representing Yobe East. The proposed agency will be funded from the Universal Basic Education Commission and the Tertiary Education Trust Fund and the repentant Bokos will among other things be entitled to foreign education. The Chibok commu-

nity, Bring Back Our Girls movement, and the Centre for Anti-Corruption and Open Leadership, have spoken against all or some aspects of the proposed law.

But I have other concerns. How can we give foreign education for people who so loathed western education that it is a fundamental part of their ideology (western education is evil)? Foreign education for people who never attended even nursery school before? How can this foreign education be imparted and acquired? However, my question is…

Is this true?

Sometimes ago, I heard that our magnanimous government awarded contract for a rail line to Maradi in Niger Republic. In a situation where there are no rail-lines to Onitsha and Nnewi or even to Igbo-Ukwu, my place of birth, I wondered why the rail to Mararadi should be a priority. Just the other day, I also heard that N30 billion has been approved for roads to (or in) Niger Republic. I have read and re-read the story and the latest version is that the roads would just stop at the border of Niger republic. I hope it stops just at the border but as in other cases here, I ask: is it true? Are the roads in Niger or just at the Niger border? Why this interest in Niger republic? And by the way, is this true?

I also heard that a former presidential aspirant (of which party), Alhaji Adamu Garba had proudly declared that the Almajiri system is the culture, pride and honour of the north. I do not want to mutilate his views and as such I represent verbatim “Almajiranci is our pride and our honour. Yes! we agreed that the program should be reformed but it should not be condemned. No sane society will destroy its culture but seek to reform,” All advanced countries value their heritage, why not us? “It’s God’s destiny that children are birthed to their specific parents & it’s their responsibility to shape the vision of who their child might grow to be. “They chose Almajiranci. The want their children to profess Quran, how is that a crime?

“They’re also Nigerians with choice.”

Did he actually say this? Is he aware that the Kano State government has just banned street begging, which has become synonymous with the almajiri system? And by the way, where are his children… NOW? On the streets or in some exclusive schools in Nigeria or abroad?

I also heard that a Nigerian pastor David Kingleo Elijah, General Overseer of Mount of Possibility Church, Ojo, Lagos, has vowed to go to China to destroy the deadly Coronavirus. He boisterously declared that “I am going to China to go and deal with Coronavirus. I am going to prophetically destroy Corona Virus.

The fact that he still calls it Corona Virus, instead of COVID-19, shows the extent to which he has grasp of current affairs and events. But did he actually say so?

And does he need to go to China when we now have some cases of COVID-19 in Nigeria. However, like the other issues above, I ask; is it true?

I have not commented on these issues. I just wat to confirm if they bare TRUE before making my comments because I don’t want anybody to accuse me of spreading fake news or hate speech, both of which have been declared the greatest danger to the Nigerian nation. Please, are they true?

Other Matters: Quick-quick loans; caveat emptor!

On 24/1/2020, I received a rather strange message from my bankers at Access Bank: “Need quick cash? Payday loan is here for you. No collateral; no paper work. Dial *901*11#”. Few days later, they improved the message and added “no wahala”.

On 5/2/2020, they upped the ante and offered a “lightening deal” of 2 percent cash-back if I took the payday loan, urging me and a thousand and one others, to hurry up while the offer lasted. I am still planning to hit *901*11# to get started. Before then, there have been these enticing advertisements and announcements from RenMoney, Page Financials and others, urging us to borrow as much as N5 million, within minutes, by mere phone calls, without collaterals, without any headache and indeed just for the asking and just like that! I have been wondering whether this is happening in this same Nigeria where banks would ask for your greatgrand-father’s guarantee, a testimonial from your primary school headmaster and probably a resolution of your village witches before granting any type and any amount of facility.

I need to try one of them, to confirm that these are indeed real-life offers but before then, let’s take a trip into the history of Nigerian moviedom. In the first Nollywood Movie, “Living in Bondage”,

‘

I have not commented on these issues.

I just wat to confirm if they bare TRUE before making my comments because I don’t want anybody to accuse me of spreading fake news or hate speech, both of which have been declared the greatest danger to the Nigerian nation

Dr Muo is of the Department of Business Administration, OOU, Ago-Iwoye

#EachForEqual: Let’s celebrate international women’s month

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t is a well-known fact that women are underrepresented in the financial and technology sectors. The median age in Africa is 19: in order for the continent to capitalise on its demographic dividend, women must be given the same opportunities that are afforded to men. Organisations such as Women’s Technology Empowerment Centre (W.TEC) and Pearls Africa based in Nigeria are aiming to boost representation through mentoring and training to girls and young women, in preparation for roles in the technology sector.

Here at WorldRemit, we are proud to highlight the notable contributions made to fintech by our colleagues, Sharon Kinyanjui and Cynthia Ponera.

Sharon is the Head of East & Central Africa, responsible for development and expansion across over ten markets in these regions. Sharon is a team leader, with extensive technical expertise gained through over 15 years of international business development. Sharon has extensive knowledge and experience of remittances previously holding management roles in EMEA for Western Union. She said, “Inclusion of women in the tech space needs to become standard practice. We need to build an envi-

ronment which allows girls to flourish in the fintech space. Women are frequent consumers of tech and therefore need to be included in the conversation. Qualified women should continue to take more leadership positions within organisations in the tech ecosystem.”

Cynthia is country manager for Tanzania where she is responsible for generating new business by building relationships with partners and identifying key areas for growth. Cynthia has extensive experience in the banking industry, specialising in digital and alternative channels. It is here that she became chairperson of the Women Network Forum, which was created to empower women to take leadership roles. She championed the #SheforShe and #HeforShe campaigns, where she challenged men and women in leadership positions to provide mentoring to upcoming female talent.

In keeping with her passion for technology and how it can be used to empower women, Cynthia’s master’s thesis was on the effect of mobile money on female financial inclusion in Tanzania.

In keeping with their passions for women in technology, they also recognise the ability of digital financial services such as mobile money

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to drive greater financial inclusion, gender parity. With over 122 million users of mobile money services in Africa, and smartphone connections forecast to grow to 636 million in 2022, hitting the UN’s Sustainable Development Goals which call for equality and lower remittance costs are likely to depend on building the right infrastructure to support consumers.

Digital approaches to financial services such as mobile money is having a transformative impact on low-income households, as they provide a path to greater financial security and prosperity. Research by MIT revealed that access to mobile money lifted 2 percent of the Kenyan population out of poverty. Mobile money was also found to have enabled Kenyans to set up their own businesses. The impact was even more pronounced for female-led households, where mobile money was thought to have given women the freedom to move from agricultural jobs to entrepreneurial and formal employment. While Nigeria has not yet achieved the same level of success recorded in Kenya, according to the MasterCard Index of Women Entrepreneurs 2019, “Nigeria had the second-highest proportion of women in professional/technician roles among the 58 markets

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Andy (Kenneth Okonkwo) was lured into sacrificing his wife as a precondition for joining a secret society, in his quest to become a “big boy”. When the chips were down and he started seeing the other side of the coin, he regretted, rather late in the day, that “Paulo akowasilolu M ifea ofuma” (Paulo did not fully explain this thing to me). Why are these financial operators adopting Paulo’s tactics in these amazing quick-loan offers? What is the T&Cs that will surely apply and why would they not make it explicitly clear to everybody?

Some of these loans are to be serviced from the borrower’s salary or other sure sources of income. How feasible is this in our environment, in which an employer (from whom repayment will surely come) can close shop overnight due to one ill-conceived government policy? How many trailers are lined with goods along Nigeria borders due to the border closure policy and how many have lost their jobs due to the ban on e-hailing executive okada by the Lagos State government. How will those who offered quick loan to those involved recoup their money? For the lenders, our elders say that giving water to the monkey is not a problem; the main problem is how to retrieve your cup from him, as he jumps from one tree to another!

For the borrower, the BOOK warns that the borrower will always be a servant of the lender (Proverbs, 22;7), who will go as far as seizing his bed if and when he defaults (Proverbs, 22:27). Debts also become addictive; it becomes an opium to which the borrower becomes hooked and cannot escape. To both parties, the advice of Shakespeare (Hamlet,1:3) is germane; neither a borrower nor a lender be. When a cock starts running after you first thing in the morning, the first thing is to FLEE because you do not know if it had developed some biting capabilities the night before. When people who did everything to frustrate your loan-requests, suddenly start laying red carpet for you to come and borrow, the wisest thing to do is to flee. If you will not flee, then stop and THINK. My final word to the borrowers is Caveat emptor; as for the lenders, I hope they know what they are doing.

Gbenga Okejimi surveyed and an exceptionally high percentage of females as entrepreneurs.”

In the diaspora community, women have oftentimes been identified to be making significant contributions to their families and communities back home. Remittances sent and received by women are usually spent on household provisions and healthcare, which have indirect societal benefits. However, as women tend to remit smaller amounts more often as compared to men, they are subject to higher transaction costs. Research by the UN & EU Women Migrant Project, suggests that female remittance senders could be susceptible to paying more than male counterparts to transfer the same amount of money. According to the Global Migration Group, women have paid remittance fees of up to 20 percent more than men.

Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Okejimi is the country manager, Nigeria & Ghana, WorldRemit

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The Nigerian society makes it difficult for good leaders to emerge ‘ True, Nigeria is CHRISTOPHER AKOR

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n his “The trouble with Nigeria,” the late renowned playwright and social critic, Chinua Achebe, diagnosed Nigeria’s problem thus: “The trouble with Nigeria is simply and squarely a failure of leadership. There is nothing basically wrong with the Nigerian character. There is nothing wrong with the Nigerian land or climate or water or air or anything else.” Achebe believed with good leaders, Nigeria could resolve its inherent problems of tribalism, corruption, social justice, the cult of mediocrity, and lack of patriotism.

Since the publication of the pamphlet in 1983, virtually every analysis of the Nigerian situation has tended to follow Achebe’s thinking.

In recent times, analysts are quick to point to the brilliance of Nigerians doing exploits around the world to show that Nigeria has all the human resources it needs to develop and that what it lacks is a committed and visionary leadership to harness such vast resources to develop the country.

It does not matter to these analysts that the leadership is a direct product of the society and portrays the values, customs and ideals of the society.

No wonder the French philosopher Joseph De Maistre made the famous remarks that “every nation gets the government it deserves.”

True, Nigeria is not conducive for the production of good leaders. To begin with, the Nigerian society has a

defective understanding of the social contract. Like I argued elsewhere, the Nigerian notion of citizenship is basically right-based – one that sees itself more as receiving from, and not giving to the state. With the discovery of oil, the taxation systems instituted by the colonialists were gradually dismantled such that rather than depend on the people for its revenue, the government had no recourse to the people. Rather, the people became heavily dependent on the government for their survival.

So, by default, the Nigerian state is set up not to be accountable to its citizens since its source of revenue is not from the people.

Even with the advent of democracy that right-based conception of the social contract is yet to abate. Citizens see elected officials as going to eat from a “national cake” and also make huge financial demands from their representatives. A Nigerian legislator once complained that he gets inundated daily with financial requests from his constituents that if he were to attend to all of them, his entire salary/ allowances won’t be enough to take care of 50 percent of such requests.

This becomes an added incentive to engage in corruption. That is why, for instance, despite Nigerians shouting themselves hoarse, the salaries and allowances of their legislators remain the highest in the world: they need money to cater to the innumerable demands of their constituents who do not care what bills they sponsor but what they can get out of them. It is not hard to see that even the best elections cannot be free from voter inducement and vote buying.

What about the middle class – that broad group of people in contemporary society who fall socioeconomically between the working class and upper class or in classical

Marxian speak, located between the bourgeoisie/capitalist class and the proletariat – and who traditionally are so critical to the sustenance of democracy, good governance and economic development? Well, they have been consumed by the narcissism and greed which prioritises self over the society?

Rather than positioning themselves as bulwarks against bad governance and dictatorship, they have become, as I argued in this space sometime back, “the greatest advocates of the ruling class [and] the greatest defenders of Nigeria’s politics of plunder, neopatrimonialism and prebandalism.” They offer their services to any government in power and suggest ingenious ways that the ruling elite can remain unaccountable and undemocratic. Just one example will suffice here. In the aftermath of the civil war, the intellectual wing of the middle class, which greatly helped to stabilise the military in power began to advocate for a diarchy – a form of government where both the military and civilians rule – as the best system for Nigeria.

The failure of Nigeria’s social class becomes apparent in a place like Lagos – Nigeria’s largest city and the city that boast of the highest number of middle class in the country, reputed to be in their millions. The Lagos state government has been fighting since 1999 to institute a rights-duties conception of the social contract by compelling the largely middle class in Lagos to pay taxes – and they have been largely successful. Lagos state is largely run by tax-payers money, which dwarfs oil money by a ratio of 1:6 at the very least.

However, the Lagos experience confounds long-established social contract theories that accountability naturally improves as the government relies more on the people for

not conducive for the production of good leaders.

To begin with, the Nigerian society has a defective understanding of the social contract.

Like I argued elsewhere, the Nigerian notion of citizenship is basically rightbased

its revenues (through taxation). The Lagos state government is one of the notorious non-accountable states in Nigeria. It not only refuses to publish its statement of accounts, it runs the government in such an opaque manner that leaves no one in doubt that it is a feudal system with fealty to only one master - the godfather of the state, who brooks no disloyalty from any government personnel, elected or appointed.

Yet election after election, the vocal but ineffective middle class shirks its responsibility to challenge such feudal system and acquiesce to the wishes of the feudal lord no matter how irrational. In 2019, the former governor of the state was denied a second term for disloyalty and someone, whose only political ambition, by his own admission, was to be Chief of Staff, was imposed as the governor of the state. But he went through the process or elections and secured a whole 75 percent of the votes cast. The statistics was harrowing. Out of the 5.6 million registered voters in the state, less than a million voted.

During the election campaign, I was invited to moderate a town hall meeting between Lekki residents and then candidate of the All Progressives Congress. I overheard an argument between the organisers and a member the campaign team of the candidate.

The individual made it clear to the organisers that the governorship candidate was only being magnanimous by attending the town hall meeting, but that he doesn’t need their votes to win. Besides, as he claimed, the middle class don’t vote. And even when the candidate came for the event, he arrogantly refused to entertain any of the requests made by residents of the area. This is an area with a population in the millions.

Coronavirus and its implication on business

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e all woke up to the news of an Italian with the coronavirus in Nigeria on the 28th of February 2020. That news set panic and distortion to our daily activities and since then monitoring data on infections has been so important to the government and public health agencies across the nation.

The coronavirus disease 2019 (COVID-19) developed in a densely populated manufacturing and transport hub in Wuhan central China and has since spread to more than 50 other countries and regions (as of 29 February 2020).

The coronavirus disease can infect both animals and people and can cause a range of respiratory illnesses from the common cold to more dangerous conditions like Severe Acute Respiratory Syndrome, or SARS. The big question then begging for answers in the coming days in Nigeria is “Is coronavirus a challenge to business and how worried should I be?

Though it is hard to be pre-emptive on the outcome especially since it’s a health-related issue but then one thing is sure coronavirus is a big risk to business. This risk is recognised and visible, it is likely to have significant implications on businesses and its environment and beyond. Therefore, as a business owner, entrepreneur or SME operator you have to be relatively concerned about the development and equally track the progress of the outbreak going forward. This will help in no small measure to come up with ideas to scale through the difficult time the outbreak has presented.

The emergence of the corona virus in Nigeria is a bad indicator for our economic performance. If the spread is not curtailed immediately it might have a negative impact on bilateral cross-border relations, inflow of For-

eign Direct Investment, employments, imports and export trades, industrial activity, tourism, air travels, social events, schools and more than likely it might disrupt or crash the economic forecasts and revenue estimates of the nation.

This arrival might equally impact negatively on many businesses particularly SMEs given high uncertainty around production and demand if the virus continues to spread.

Therefore, it is important to be proactive and strategise in your business. Because it is unclear how fast and how far it might spread and again the uncertainties surround the virus’s is a huge cause for concern. The impact of the disease in the coming days might also become much larger if the coronavirus spreads without meaningful intervention. Though it is still too early to measure the full financial impact of the disease on the economy, but the early signs don’t look good. Recall, the major import trading partner of Nigeria is China and China is the secondlargest economy in the world. Exports from China to Nigeria was captured as $1.04 billion during 2018 and was on the increase in 2019 according to the United Nations. Therefore, with the current state of things in China the percentage of export trade from that country is likely to be affected. The demand for Chinese products into the country through exports might suffer declines. Because with millions of workers now in quarantine and many of the manufacturing plants shut down, China is struggling to get economic activity back on track.

The relative importance of China in the worldwide economic landscape will more than likely cause a domino effect in the value chain across the world.

Therefore, for the global economy this event can lead to recession considering the outbreak

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of the virus have been detected in many developed countries of the world with over 50 countries already battling to curtail the spread and more than 80,000 reported cases as of February 29 2020. The economic impact of the deadly virus is very high and perhaps with the postBrexit effect, and US-China trade war the year 2020 might be a year of market dislocations and difficult time for many economies especially on international trades.

The COVID-19 is likely to cause huge market and work disruptions in the value chain of these following sectors in aviation, retail businesses education, automobile, Hi-Tech, tourism, entertainment, hospitality, electronics, consumer and luxury goods. Already big companies like Apple, Hyundai, Kia have announced strategic plans to cushion the effect of the disease, with most of them reducing their revenue targets.

However, stock prices of many blue-chip companies across the globe especially where high numbers of cases have been reported are already falling due to the surge in coronavirus cases. More so stock market performances across the globe have been fluctuating with larger percentage reacting negatively to the impact of the incidence.

Nonetheless, the good news is that the current level of detections and quarantined in Nigeria is controllable and manageable. The real subject matter for the government and other economic policymakers, is to see that the virus is short-lived in Nigeria. Because generally in Africa we lack effective surveillance, diagnostic, and hospital capacities to identify, isolate, and treat patients during such outbreak. This weak system may increase the possibility of contagion if not well managed and this could have both social and economic consequences. The

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Timi Olubiyi federal and states governments including the public health agencies have these all-important responsibilities, that is prevent the pandemic from spreading beyond control and also put measures in place to keep it from happening again. It is essential to start vigorous awareness campaign and this needs to be accelerated to keep citizenry informed about their hygiene, the disease pattern, early signs and what to do if such cases are noticed.

It is widely believed that this event will be only a temporary disruption, but so far, the virus has proven to be difficult to contain and hard to predict. However what businesses can do to cushion the effect of the surge of the disease in the meantime is to strongly imbibe technology usage to reduce human contacts and adopt effective use of social media marketing, campaign and advertisements for their products and services. SME operators, entrepreneurs including large firms should move closer to clients by encouraging delivery services and also design strategic plans to drive sales so that revenue targets for year 2020 will be visible.

Dr Olubiyi holds a PhD in Entrepreneurship and Small Business Management. He is a prolific investment coach, Chartered member of the Chartered Institute for Securities & Investment (CISI) and a financial literacy specialist. He can be reached via email drtimiolubiyi@ gmail.com and twitter handle @drtimiolubiyi

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BUSINESS DAY

Thursday 12 March 2020

Editorial Publisher/Editor-in-chief

Frank Aigbogun

Too sluggish and costly: Economic diversification in Nigeria Nigeria must take proactive measures to propel growth

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

Bashir Ibrahim Hassan

T

he latest indicators on the economic performance of Nigeria coupled with shocks in the global economy re-echo how vital diversifying the Nigerian economy is. For the current administration diversification has remained a rocket science, a fancy word it talked up on its agenda for the economy upon resuming office. How long does it take an administration to successfully diversify an economy; 4 years, 8 years or forever?

Data on the 2019 gross domestic product (GDP) shows an annual growth rate at 2.27 percent the fastest since 2016, but still below population growth rate of 2.59 percent.

And all thanks to oil. But more and more Nigerians are poor and unemployed.

Meanwhile, current events in the crude oil space, with prices plunging to as low as $36.63 per barrel puts Nigeria

in a more worrisome position.

Recession, naira devaluation, declining foreign reserves, stock market rout, high borrowing cost etc. are some of new headaches Nigeria has to deal with.

Despite the hard work of some in the public and private sectors to push the economy forward. Pushing a car to jump start it works sometimes, but if the engine is broken no amount of pushing will replace the engine. The economy is broken, it has to be fixed otherwise growth will remain sluggish.

We can blame this on Nigeria’s slow response to diversify its economy among other factors. Nigeria cannot afford to remain sluggish in positioning itself for growth, but must be proactive to propel growth.

The economy isn’t void of sectors with potential; instead these sectors are starved of patient investment in the form of foreign direct investment (FDI. Instead the Nigerian monetary

authority through its unorthodox policies fuelled by the obsession to defend the naira at all cost has chosen to pursue foreign portfolio investment (FPI), the so-called hot money, as a priority. On the fiscal side, the federal government hasn’t shown seriousness in attracting FDI into the country with policies market-driven reforms that make the economy right for investment. Two big sectors that employ a lot of low skilled labour, agriculture and trade, continue to struggle. Agriculture continues to grow at near the slowest pace in two decades and the trade sector remains in a technical recession no thanks to the border closure.

A closer look at the 2019 GDP report reveals some bright spots. The telecommunication sector, for example, has a lot of potential to attract lots of investment. The level of investments in a sector largely determines the growth potential of that sector.

Other sectors could benefit from the reforms and regulation that boosted investment in telecommunication. Opening them all up for investments will help Nigeria break loose of its shackles to an uncertain crude oil market.

Take for example the motion pictures, sound recording and music production sub-industry in the ICT sector. It has recovered from a decline (minus 0.4 percent in 2018) to growing again at 0.2 percent. This was buoyed by the growth in revenue generated from the number of movies and music produced last year. The growth achieved last year is nothing to cheer, government policies had nothing to do with it. If deliberate efforts are made to fix the economy, for instance, fix electricity supply which will help reduce the cost of making movies and music backed with strong anti-privacy policies, growth in this sector as well as others is better be imagined.

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu HEAD, HUMAN RESOURCES Adeola Obisesan

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What the data reveals about our health, population and life choices The Public Sphere

CHIDO NWAKANMA

C

ourtesy of UNICEF and the Federal Ministry of Information, I was part of a significant discussion of a study that should receive more attention than it is getting. It is the Nigerian Demographic and Health Survey that reports on various areas of our lives and the choices citizens make.

The 2018 edition was the focus of the two-day workshop, “Media Dialogue on the NDHS, SDGs, Data and Solution Journalism”.

It was held at the Bayview Hotel, Port Harcourt. The NDHS 2018 is the sixth since the survey commenced.

NDHS regularly provides information and estimates on fertility levels, marriage, sexual activity, family planning, breastfeeding practices, nutrition childhood and maternal mortality. It also provides data and information on maternal and child health, malaria, domestic violence, disability, and female genital mutilation.

Headlines from our practical session captured the trends. 97 percent of Nigerians have no health insurance, though only 29 percent of children

under 6 months in Nigeria exclusively breastfeed, or only 31 percent of Nigerian children complete immunization to Nigeria ranks fifth in under-5 deaths globally. Others include why one Million Nigerian children die before their fifth birthday to Kebbi leads, Ogun lowest in under-5 mortality and How doctors and hospitals make women lose care in the first three months of pregnancy without meaning to do so.

Maureen Zubie-Okolo led with a breakdown of the significant trends the report captures. According to this extensive survey of Nigeria’s 36 states and FCT, women head 18 percent of households in the land. Households in Nigeria have an average of five members (4.7) and 46 per cent of the population is under 15 years.

Sanitation and water practices are improving across the land. It is one of those data trends that raise an eyebrow as it reports that up to 66 per cent of households have access to improved water compared to previous studies. It is, of course, better in the urban areas with only 28 percent unimproved versus 42 percent in rural areas.

The NDHS discloses that 59 percent of Nigerian households access electricity; it is 83 percent in urban areas and 39 percent in rural areas. Mobile phones are available to 88 percent of Nigerians, with 95 percent urban and 82 percent rural. Television is present in 49 per cent of households, with a skew of 71 percent urban and 30 percent rural.

Secondary education is the most common among Nigerians with 48 per cent of men and 40 percent of women.

Those with “more than secondary education” are 17 percent men and 11

percent women. The number of those with no formal education is still a disturbingly high 35 percent of women and 22 percent of men aged 15-49.

NDHS 2018 then reports a literacy rate of 72 percent for men and 53 percent for women. The majority are in the urban areas as 86 percent men and 74 percent women. This is significant because most sources attribute to Nigeria a literacy rate of 63 per cent.

Exposure to media is challenging.

More than half (51 percent men and 56 percent of women) have no exposure to media of any kind. Thirty-nine per cent of men listen to radio versus 30 percent of women while 34 and 33 per cent each watch television. Only five per cent of women and 15 percent of women read newspapers. Internet usage is at 35 percent for men and 16 per cent for women.

Nigeria follows the trend of postindustrial societies where sales and services occupations predominate.

It accounts for 62 percent of the jobs women 15-49 did in the last 12 months before the survey and 26 percent of the men. Men were more in agriculture (42 percent) with women at 22 percent.

Thirteen percent of men are in professional/technical/managerial positions as against nine percent of women.

Mortality in children remains a challenge. It speaks to the quality of life including nutrition and healthcare. “Childhood mortality in Nigeria remains high. Every year, an estimated one million Nigerian children die before their fifth birthday. Nigeria is one of five countries in the world with the highest number of under-five deaths.

The infant mortality rate was 67

‘

Mortality in children remains a challenge.

It speaks to the quality of life including nutrition and healthcare.

Childhood mortality in Nigeria remains high.

Every year, an estimated one million Nigerian children die before their fifth birthday

Nwakanma is a Visiting Member of the BusinessDay Editorial Board and serves on the Adjunct Faculty at the School of Media and Communication, Pan Atlantic University, Lagos. Email chidonwakanma@ gmail.com.

Beyond influence and result, leadership is behaviour

I

t was another new call from an ardent reader of this column on Monday. The call turned out to be one of the most interesting responses I have received from the readers of this column. The caller wants me to focus on leadership and organisational development topics. He was surprised I wrote on INEC and business process continuity, on the job for Asiwaju Bola Tinubu, and the lessons from Rwanda. Babs, don’t be distracted, focus on your core area as a leadership and organisations’ culture consultant and expert he advised. He concluded by making a demand.

He asked, what’s leadership in one word?

That’s what I want you to write on this Thursday. I replied with the word ‘yes sir’.

I appreciate the time and the opinion of Mr. Bashir Mohammed. It’s good to know that people who read your column have something to say to you even if they are shy from writing their comments. I run a blog, and most of the hundreds of comments in response to my articles are from readers outside Africa. I wonder if Nigerians or Africans, in general, appreciate the fact that sharing their views based on the author’s position is invaluable and goes a long way to enriching the knowledge base of the topic of the discussion. My assertion is not the same for gossip news on print and social media platforms.

Just like Mr. Mohammed, I equally love my article on the culture where I positioned that culture eats strategy for breakfast or lunch. I love the result-oriented leadership, culture-the executive integrity under audit, the anathema in the workplace and a host of business-related topics published in this column. I strayed into writing on Nigeria and the sustainable development goals, INEC, the culture of Sycophancy and others in an attempt to be a social commentator and contribute to the trending issues. Perhaps, someone might learn from my messages and apply their contents to improving our public organisations and make them

sustainable institutions.

Be that as it may, I appreciate the fact that organisation and leadership development is my strength based on the call from Bashir and other dedicated readers of this column. I have worked and consulted for organisations with one view in mind. To make an institution of every organisation by engaging and developing people who are capable of producing sustainable results within a short time.

Leadership is a broad topic with many people claiming to be experts or coaches in it. We have heard many views on leadership: what it is and what it is not, the type or level of leadership and how to be a good leader or what not to do as a leader. I have followed some schools of thought which claimed leadership is all about influencing others. Some claim it is about results or the legacy that leaders leave behind. I agree with all these opinions on leadership. To be a leader is however, a journey, not a destination. Anyone who sees leadership as a destination is likely to be seeing the act of leadership as positional.

Leadership is an influence on others. The starting point to having followers is your ability to make them believe in your ideology and reason with you in the pursuit of a worthy goal. Influence is an essential part of leading especially for leaders who are in the front of volunteers. Volunteers are the most difficult people to lead. If you can lead a voluntary organisation successfully, you can run any organisation as you would have developed a high ‘influence quotient’ in the process of leading volunteers. Influence in a business organisation can be gained by what the followers’ stands to gain or lose if they do not follow the leaders.

The fear of sanction or failure to get rewarded can make people adhere to the dictates of the leaders at the expense of their will. If your influence as a leader is based on fear or for the sake of compliance, then you are leading by a borrowed influence. Real influence is gained

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when people follow you voluntarily.

A resulted-oriented leader will focus on the result and mostly use the official influence to attract followers. In a few rare cases, followers are motivated by the impact of the leaders. Voluntary and committed influence is prevalent where the people see the financial, emotional or other associable benefits of achieving result together with and through the leaders. For example, where a profit target is given to leaders and the reward shared with the team base on contributions or other parameters perceived as fair or equitable, the team members are motivated to fight for the outcome and submit to the leaders’ direction in the quest to achieve the set target. The team tends to behave like lions going on the same mission in a row and with the determination to crush any opposition on their way.

Influence is essential. It can be ‘gained or borrowed’ as noted in the above analogy. Influence is the starting point for leaders who are to produce results. The results leaders produced can be short-term or sustainable results. Where leaders produce results to meet their expectations and get rewarded for the teams’ efforts without a sense of worth or belongingness to the followers, the result tends to be difficult to sustain. The scenario is reflected in the financial performance some organisations delivered compare to their peers in the same industry.

A company might have employed some staff, with more branches and advertising costs but have a profit before tax (PBT) lower than another company with a smaller but highly productive teams within the same sector.

The staff productivity ratio is an indicator of whether the influence quotient in a company is voluntary or compliance based.

In between influence and result is behaviour. To me, leadership is about behaving in a certain way to influence people toward making progress in the realisation of a worthy idea or objective. Whether the leader is gaining posi-

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deaths per 1,000 live births for the 5 years preceding the survey, while under-5 mortality was 132 deaths per 1,000 live births. This implies that more than 1 in 8 children in Nigeria dies before their 5th birthday. The under-5 mortality rate has decreased since 2008, from 157 deaths per 1,000 live births to 132 deaths per 1,000 live births. Similarly, there has been a slight reduction in infant mortality, from 75 to 67 deaths per 1,000 live births. However, there has been no noticeable change in the neonatal mortality rate over the same period.”

Health insurance remains out of reach to the majority of Nigerians.

Ninety-seven per cent of both men and women have no health insurance. With the mandatory recapitalisation of the insurance industry, one hopes that a few players would check to confirm if there is a market in this wide gap and develop it.

The National Population Commission in collaboration with the National Malaria Elimination Programme of the Federal Ministry of Health implemented the 2018 Nigeria Demographic and Health Survey (NDHS). USAID. Funding came from a host of international agencies. They include USAID, Global Fund, Bill and Melinda Gates Foundation, the United Nations Population Fund and the World Health Organisation. Dataset available at DHSprogram.com.

Positive Growth with Babs Babs OlugbemI tive influence or not is a function of his or her behaviour. If the result is going according to plan, the action of the leader and the team is in sync with the strategy for the business. If the strategy is appropriate for the market segment and the leader’s behaviour is not influencing the people to implement the key strategic actions, the result will show the lack of synergy in the people’s emotions and the potency of the strategy adopted. Leadership is influence and result but more importantly, is the behaviour of the leaders and his team in a given scenario to enforce the desired outcome.

Behavioural leadership is so essential for the sustainability of the organisation result, continuity of commitment of staff and value given to the stakeholders. It is the failure to behave in line with the crafted vision, mission and core values envisaged for organisations that make the level of result and influence fall below the brand value and perception. I have seen organisations with the best human resource persons yet with lower productivity and staff engagement because the behaviours of the leaders are not in tune with the vision of the founders or the past success derails the founders.

Note: The rest of this article continues in the online edition of Business Day @https://businessdayonline.com/ Babs Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, Positive Growth Africa. He can be reached on babs@babsolugbemi.org or 08025489396.

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COMPANIES & MARKETS

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COMPANY NEWS ANALYSIS INSIGHT

OIL & GAS

Blue Seal Energy announces plan to construct $12.5m chemical production plant DIPO OLADEHINDE

B

lue Seal Energy Group (BESG) has announced plans to construct a-35,000 metric tons per annum capacity chemical production plant, at an estimated cost of $12.5 million plant in Ibeju Lekki, Lagos.

At the project groundbreaking ceremony, the Chief Executive Officer of Blue Seal Energy, Doyle Edeni, said the facility was being constructed to bridge the massive importation of chemicals into the country and also bridge the gap between demand and supply of industrial chemicals, water treatment chemicals, and oilfield chemicals.

Edeni, added that the first phase of the 35,000 metric tons per annum chemical plant would cost about $12.5 million with a potential to expand and would also solve Nigeria imported chemicals to the tune of $1.4 billion in 2019 alone, out of which his company was responsible for $5 million yearly. “ We wa nt t o h e l p change the narrative of

our country from being an import-dependent to manufacturing and exportbased country,” Edeni said.

Edeni explained that 30 percent of the funding would be sourced locally, while 70 percent would

be sourced outside the country.

He lamented that the uncertainty in the countr y’s business environment has forced many of its competitors to shut down, adding that the inability to

project the industry needs for chemicals, especially for refineries and other petrol chemical plants has further compounded their woes.

Edeni, added that citing the plant in the same

area with Dangote refinery and fertiliser plant was strategic, saying, “Dangote Refinery will be our major client considering his proximity to our plant.”

He noted that the company plan to employ about

L-R: Mansur Ahmed, president, Manufacturers Association of Nigeria (MAN); Simukai Munjanganja, area head, legal and external affairs, British American Tobacco, West and Central Africa, and Niyi Adebayo, minister of industry, trade and investment, representing Vice President Yemi Osinbajo, at the Nigeria Manufacturing and Equipment expo 2020 in Lagos.

500 pe ople in the first phase of the project, adding that the number would be raised to 1,000 in due course. “ The difference this project will bring into our operation is that we don’t have to suffer losses due to expired chemicals because they are very costly for you to detoxify,” Edeni said.

Edeni, listed the socioeconomic benefits of the chemical plant to Nigeria as improved access to industrial chemicals to boost local production; support to the federal government’s campaign for indigenous production of goods and services; and creation of secondary industry and indirect jobs for suppliers of raw materials.

Th e BE S G b o ss sa i d the need to establish a factory became compelling because of all these above-listed constraints, coupled with logistics issues which prolong the arrival of chemicals into Nigeria up to three or more months.

According to him, the associated cost required to dispose of these chemicals had become a huge burden because such could not be dumped into the environ-

EQUITIES

Meristem launches N1bn exchange traded funds on NSE MODESTUS ANAESORONYE

M

e r i s t e m Wealth Management Limited has launched a N1 billion offer for subscription on two Exchange Traded Funds - Meristem Growth ETF and Meristem Value ETF. The two Exchange Traded Funds track the NSE-Meristem Growth Index and NSE-Meristem Value Index respectively. These are style indices which provide investors with a wide array of diversified stocks, professionally selected after satisfying the criteria and will thus be managed by dedicated fund managers.

The Meristem ETF offer for subscription opened on February 25, 2020 and will close on April 2, 2020.

The offer is 50 million

units each of the Meristem Growth ETF and the Meristem value ETF at N10 per unit.

Speaking to journalist, Sulaiman Adedokun, managing director, Meristem Wealth Management explained that, as a company Meristem is constantly seeking new and innovative ways to create wealth opportunities for clients.

He further explained that as a way of adding unique value to investors, the Meristem Growth ETF is designed to track growth stock whilst the Meristem Value ETF will track value stocks.

This strategy avails investors a dual purpose, with an investment style that allows them to meet specific need using abroad product portfolio. He concluded by stating that the Meristem ETF can be dewww.businessday.ng

scribed as “The Jack of the Trade” as it offers investors opportunities to achieve their investment desires in the equity market while shielding them from excessive risk.

The Indices being tracked by the ETFs are reviewed semi-annually, to ensure that all stock selected under each index keeps delivering on their promise.

Earlier in the month, Meristem in partnership with the Nigerian Stock Exchange organized the smart investing workshop on “Using Exchange Traded Funds as a proxy for investing in Nigerian equities” in a bid to sensitize different classes of investors on the benefit of ETF investments. Discussions arising from the workshop bordered around the cost advantage, diversification

benefits, dividend policy, amongst other advantages of ETF investing.

Commenting on the subject issue, Taiwo Yusuf, head Asset Management stated that “All ETFs earn the underlying dividends of its constituent stocks and the dividends are paid net of all fees”.

Furthermore, speaking on the purchase requirements of the Meristem ETFs, Damilola Hassan, head Wealth Management, Meristem, mentioned to that “The Meristem ETFs offer hassle-free and costeffective investment option to investors. With a minimum of N10, 000, investors can have access to a wide range of stocks across different sectors including banking, industrial goods, conglomerate, agricultural sectors and a

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host of others that meet their investment style criteria. She also stated that, The Exchange traded fund typically mirror the performance of the index it tracks. “With the Meristem Growth and Value ETF, you are able to easily track the performance of the selected stocks without going through the rigor of stock analysis and selection” At the close of the offer, the ETF will be available for trading on the Nigeria Stock Exchange. You can trade via the Meritrade app, a fully electronic trading platform that delivers speed, efficiency and transparency. The platform, which was launched in 2014 is available on Playstore and iOS, with Meritrade investors able to access and trade all listed stocks on the Nigeria Stock @Businessdayng

Exchange, including the ETFs in real time.

Meristem for the past 16 years has been consistent in value creation and innovation within the capital market space. In 2018, the Nigerian Stock Exchange awarded Meristem as the best digital broker of the year. In 2018 also, Meristem became the first Nigerian asset management firm to attain compliance with the Global Investment Performance Standards (GIPS) by the CFA Institute. In 2017, Meristem handled the single largest trade in the history of the Nigerian Stock Exchange.

The firm has remained a leading player in Nigeria’s competitive investment market with a solid reputation as a highly professional and client-centric firm.

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Thursday 12 March 2020

BUSINESS DAY

COMPANIES&MARKETS

Business Event

Julius Berger abumet commissions evonig glass production factory in Abuja ENDURANCE OKAFOR

N

igeria’s leading, most resilient a n d re l iab l e engineering construction company, Julius Berger Nigeria Plc has offially launched its new innovative product, the Evonig Glass in Abuja.

Combined with the launch is the commissioning of the state-of-the art IGU production line at which event guests and specially invited industry and other corporate players had an opportunity to have a first hand look at some of the latest industrial production facilities and processes at the Abumet factory at Idu industrial area, Abuja.

Giving his address at the event, the General Manager of Abumet, the top grade metal and glass subsidiary of Julius Berger Nigeria Plc, Mr. Tamas Hovart defined Evonig Glass as an industrial acronym which is proudly synthesises the two words ‘Evolution’ and ‘Nigeria’. The product, Tamas said, “is not just an improvement of exist-

ing offerings in the Nigerian market; it is a combination of the latest technology and a skilled and committed Nigeria team.” The Evonig Glass, Tamas further explained, “is a special offering defined by great production quality according to best international standard, innovation, availability, local content and a strong Nigerian workforce, reliable technical partnerships and advanced technology as well as sustainability and reliable after sales service.”

The General Manager of Abumet, Tamas informed guests at the event that current industrial and procurement estimates of supply to the Nigerian IGU market is put at 90% for imported production and 10% for local production.

This situation, he said, exposes the Nigerian users of the product to long wait for offshore shipments and prohibitive exposure to foreign exchange challenges.

Julius Berger Abumet, Tamas said, “aim to offer comparably faster delivery times for a high quality insulated glass unit solution made in Nigeria with international

standards, at a competitive rate.”

The Julius Berger Abumet Evonig glass, offer technical solutions more commonly known as Double glazing, a well-known application in Sub-tropical areas, which consists of two glass panel separated by a vacuum or gas filled space to reduce heat transfer and noise across a part of the building; and Triple glazing which consists of three-glass panel and two space to achieve greater performance level.

This glazing technology now manufactured in Nigeria by Julius Berger Abumet is highly recommended where the temperature difference between interior and outside spaces is significant so that greater thermal insulation required.

Tamas confidently spoke of the Tkey benefits of using Insulated glass units to include energy savings by which “the insulated glass windows prevent heat loss when it is cold and sustains the cool air when it is hot….” This, the Abumet General Manager said, reduces power consumption in a building and saves cost.

L-R: Uaboi Agbebaku, Company Secretary/Legal Director, Nigerian Breweries Plc; Grace OmoLamai, Human Resource Director, Nigerian Breweries Plc; Aghata Amata, Media entrepreneur; Afua Osei, Co-founder, She Leads Africa; Jordi Borrut Bel, Managing Director, Nigerian Breweries Plc; Toyin Gbagi, Partner, Audit Services & Head, People Strategy, KPMG; Amaechi Okobi, Group Head, Corporate Communications, Access Bank Plc and Sade Morgan, Corporate Affairs Director, Nigerian Breweries Plc during the celebration of International Women’s Day 2020 by Nigerian Breweries Plc held in Lagos

L-R: Adekemi Adisa, general manager, organisation effectiveness and performance, MTN Nigeria; Mobolaji Balogun, chief executive officer, Chapel Hill Denham, Nigeria; Esther Akinnukawe, chief human resources officer, MTN Nigeria; Ferdinand Moolman, chief executive officer, MTN Nigeria, and Linda Saint-Nwafor, chief enterprise business officer, at the commemoration of the International Women’s Day at the MTN Head Office in Ikoyi.

Laterna Ventures commits to developing knowledge capacity for younger generation KELECHI EWUZIE

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eading importer and distributor of books in Nigeria Laterna Ventures Limited says it is committed to investing in opportunities that will aid the improvement of the knowledge economy of Nigeria especially the next generation.

The company observes that there is a decline in book reading culture amongst students in Nigeria today and one of the major reasons for this is the advent of mobile devices which takes away the focus of students.

Nnaji Ugbaja, Corporate Affairs Manager, Laterna Ventures Limited observes that doubt, mobile devices are essential for students but because of the availability of other contents on them, they tend to make students lose focus on the essence of book reading. The Advent of social media is also not helping matters.

Ugbaja while speaking at an event to mark the World Book Day is an annual event dedicated to the celebration of books, copyright and authors says the company has been celebrating the event

for many years because of her role in the provision of books to Nigerians.

According to him, “Laterna also targets children for the event because they are our future leaders and we need to encourage them to adopt the culture of continuous and consistent reading from childhood”.

World Book Day is an annual event commemorated every first Thursday in March and it’s a UNESCO supported the event which seeks to promote reading culture globally. It’s celebrated in over 100 countries globally every year and schools Nigeria celebrate it. In some schools, they hold a week-long event to mark the day.

Laterna partnered with Princeton School, Grange School, Corona School, Pinefield School and Imperial Spring Schools in commemoration of the World Book Day 2020. The team also worked with Greenwood House School and Meadow Hall School to mark the day.

Ugbaja further said that this year, the company decided to combine visitation to schools with invitation to schools to cater to every www.businessday.ng

school that is willing to partner with us to celebrate this special day. Some schools do not want to visit our store due to logistics so we take the event to them and those that are willing to visit are also accommodated.

“In the past, we have also celebrated with public schools but this year we decided to focus on private schools because they are making giant strides in the education space and we need to appreciate that. We also have a plan for public school reading session in the offing”.

He implores government at all levels to give more attention to events that encourage children to see reading as a lifestyle because most of the things they need to succeed in life can be found in books.

“Beyond curriculumbased reading government and all stakeholders involved in the development of the overall well-being of children should encourage them to read for fun, leisure, personal development, social inclusion and to be abreast of contemporary global issues because the world is a globally community today”, Ugbaja said.

L-R: Nkechi Nwachukwu, marketing manager, Brian Munro Ltd; Bola Lofindipe, national sales manager; Mr & Mrs Mathew Momoh of Just Drinks (over-all winner of the coveted prize); Paul Wilson, MD/CEO Brian Munro Ltd, and Rilwan Shofunde, senior brand manager campari, at the 2019 Campari Nigeria Trade Partners Award in Lagos recently

L-R: Abdul Kareem Abdullahi, PRO immigration, FAAN; Akintayo Akinseloyin, brand manager, Hypo Hygiene Products Limited; AJ Dan Musa, HOD operations, FAAN; Julian Bright Idiaghe, HOD corporate affairs, FAAN, and Opeyemi Awojobi, sponsorship/product placement manager, Hypo Hygiene Products Limited, during the donation of Hypo bleach and toilet cleaners to Federal Airports Authority of Nigeria (FAAN) , to help promote hygiene and strengthen the efforts of officials in preventing the Coronavirus at Murtala Muhammed International Airport

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Stanbic: Analysts see upside potential despite new low Iheanyi Nwachukwu

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BNQuest research analysts said in a March 10 note to investors that they have upgraded their rating on the shares of Stanbic IBTC Holdings Plc to “outperform” from “neutral”.

Stanbic opened for trading on Monday March 9 at N35 per share but the historic global market rout driven by oil price pushed its stock to N31.50 per share, its 52-week low.

“Having shed -23.2percent year-todate (Ytd) versus -4.4 percent return recorded by NSE ASI, Stanbic’s shares imply a potential upside of 63percent from current levels”, FBNQuest research analysts further added.

“Our new price target of N51.2 is also circa 11percent higher”, according to the analysts. The stock had reached a corresponding 52 week high of N48.50 per share.

“At current levels, the shares are trading on a 2020E price-to-book (P/B) ratio multiple of 0.98x for 21.8percent return on average equity (ROAE) in 2021E or a significant premium of 102percent to the 0.49x 2020E multiple for 16.8percent ROAE that our universe of banks is trading on,” the analysts stated further.

The analysts’ new rating follows the Holding Company (HoldCo) financial institution’s recently released financials. Stanbic IBTC Holdings Plc, a member of Standard Bank Group recently released its audited results for the full year ended December 31, 2019. The group declared a profit after tax (PAT) of N75billion. This represents

Last 7 Days Trades (Stanbic IBTC) Date

March 9th 2020

Price (Naira)

March 6th 2020

March 5th 2020 March 4th 2020

Volume

5,309,133

35.00

2,920,516

35.70

239,372

32.50

259,351

252,148

31.50

March 3rd 2020

32.50

March 2nd 2020

32.50

February 28th 2020

32.50

an increase over its year end 2018 profit after tax which was N74.4 billion.

Profit before tax for the year 2019 was N90.9 billion, representing a 3 percent increase over 2018 figures which stood at N88.2billion.

Stanbic IBTC proposed N2 final dividend payable to shareholders on June 18, 2020, which will be brought to shareholders for approval at its annual general meeting (AGM) on June 17.

The company’s non-interest revenue also grew by 6 percent to N108.8 billion in 2019, from N102.6 billion which it recorded in 2018.

Stanbic IBTC Holdings also reported growth in its total operating income, from N180.8 billion in 2018, to N186.6 billion in 2019, representing a 3

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percent increase.

As at December 31, 2019, the total assets of the Stanbic IBTC Group stood at N1.876trillion. This reflects a 13 percent increase, when compared to the value of the assets which was N1.663trillion as at December 2018.

“With an average oil price assumption of less than $35/barrel for its oil and gas loan book and a largely hedged position, management is optimistic that the subdued pricing environment for crude oil will have very limited impact on asset quality for its oil and gas exposures which account for circa 30percent of its total loan book. In line with guidance, we have maintained our 2020E loan growth forecast at 15percent”,

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62,214 11,589,876

FBNQuest research stated in their recent note.

While speaking on the full year audited group results, Yinka Sanni, Chief Executive, Stanbic IBTC Holdings Plc said: “Our financial results were largely in line with market guidance. We achieved double digit growth in both assets under management (AuM) and loans. Loanto-deposit ratio was 67.5 percent, above the regulatory minimum of 65 percent as at 31 December 2019. Nonperforming loans ratio was 3.9 percent, similar level with prior year and within acceptable limit of 5 percent.”

Highlighting some of the growth areas in the full year audited group results, he noted: “The Group’s total

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assets grew by 13 per cent aided by the growth in loans and financial investments portfolio. Our Personal & Business Banking division contributed to profit yet again with a significant improvement in profit after tax yearon-year.

Cost of risk was 0.2 percent compared to the write-back in prior year due to a nonoccurrence of a significant recovery, however it is still well below our guidance of 3 percent. Our sustained focus on cost containment coupled with revenue growth during the year yielded an improvement in cost-to-income ratio of 50.4 percent from 52.9 percent in 2018.”

While acknowledging that the regulatory and economic environment could sometimes be challenging, he stated that the company remained resolute in its target to emerge as Nigeria’s leading end-to-end financial solutions provider. He stated: “While we look to 2020 with great optimism, we are fully aware of the challenging macro-economic and regulatory headwinds that we must contend with as we enter a new decade.

Nonetheless, our strategic journey towards becoming the leading endto-end financial solutions provider by 2023 continues as we leverage our universal capabilities whilst focusing on cost management, digitisation and client centricity in accelerating growth in 2020.”

Stanbic IBTC continues to benefit from its adoption of a digital strategy as well as operating a Holdings company structure which enables subsidiaries to cross-sell and also leverage expertise within the Group.

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Bond Market: 2020 budget review fuels uncertainty in the market

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E-mail: iheanyi.nwachukwu@businessdayonline.com

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Market and Economy

n the previous week, the local secondary bond market sentiments turned bearish, as reports that the FGN is planning to carry-out a review of the 2020 budget created some level of uncertainty about the direction of the bond market. As a result, average yield climbed higher by 1percent week-on-week (w/w) to close at 10.25percent.

Notably, only yield on the July2021 note declined w/w.

At the Eurobond market, sentiments stayed downbeat as the effect of Coronavirus and OPEC+ inability to reach a prompt consensus on crude oil supply cut further pressured global crude oil prices lower.

However, given the large level of sell-offs seen in the week before, activities in the market were broadly quiet. In all, average yield on the sovereign Eurobond tracked higher by 4bps w/w, to 6.6percent while average corporate Eurobond yield closed flat at 5.3percent.

This week, we expect activities at the Eurobond market to remain sluggish as foreign investors continue to

huge pressures as the naira depreciated 36bps w/ w to N366.6/$1. Finally, at the parallel market, the local unit closed flat at an average rate of N359.0/$1. Relatedly, Nigeria’s gross external reserves declined marginally when compared with the previous week, shedding 15bps w/w to $36.2bn.

Notably, further deterioration of Brent price to $45.3 will exert more pressure on FX. Oil prices dip to a record low In the previous week, the global market was largely bearish, as major global markets (US, Germany, Europe, France, & UK) under our coverage traded southwards. Notably, a surprise 50bps rate (to 1percent - 1.25percent) cut by the US Fed during the week failed to spur an enduring bullish run in the US market as the inability of OPEC+ to reach an agreement on deeper crude oil supply cuts escalated global risks.

Further out, countries continued to take precaution against the increasing spread of the Coronavirus across the world. In Italy, all schools and

look to crude oil prices as a the fundamental for investing in Nigeria’s Eurobond. For the domestic bond market, local investors will look to the FGN for some direction on the planned budget review and its implication for 2020 borrowings.

FX: Gross reserve declined marginally to $36.2bn In the previous week, across the three main FX windows we track, we saw naira depreciated across board save for the parallel market which closed flat. At the official window, the local unit depreciated by 2bps w/w to N307.0/$1 as demand for dollar continued to grow. The I&E window also witnessed

universities were shut down across the country till March 15 to prevent a further spread of the virus. Also, the government of Saudi Arabia suspended the annual umrah pilgrimage over fears of the new coronavirus spreading to across the country.

In the oil market, the Brent crude price worsened further amid weaker energy demand. Thus, Brent price declined 9.9percent w/w to close at $45.3/b on Friday, the lowest in more than 2 years, as OPEC members awaited Russia’s consent to its proposed supply cut during its March meeting. This week, we expect the inability of the OPEC+ to reach an agreement on a further

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supply cut to impact global crude oil prices negatively.

Banking stocks up 3.8percent w/w as investors hunt for juicy dividends The all share index added 0.2percent to close at 26,279.61 points while the year to date ( Y TD) returns settled at -2.1percent as investors bet on double-digit dividend paying banks. Investors gained N37bn as the market capitalisation closed at N13.7trillion. In terms of activity, the value and volume traded increased by 7percent and 17percent to an average of N5.2billion and 309million units respectively.

D r i v i n g d ow n t o t h e sectors, we observed mixed performances across the sectors under our coverage. The banking sector (+3.8percent) gained the most, driven by a significant gain by top tier names - FBNH (+13.8percent), STANBIC (+7.69percent), ET I ( + 8 . 3 p e rc e nt ) , U BA (+2.9percent) and ZENITH ( + 1 . 6 p e rc e n t ) . No t a b l y , GUARANTY published its audited full year result and the company reported gross earnings of N435.3billion (+0.1percent y/y), interest income of N296billion (-3.5percent y/y) and PAT of N196.9billion (+6.6percent y/y). GUARANTY declared a final dividend of N2.50/ share, resulting in 10.1percent dividend yield.

Also, STANBIC released its audited FY-19 result and reported gross earning of N233.8bn (+5.1percent) and PAT of N75billion. The company declared a dividend of N2 resulting in a dividend yield of 5.7percent. The insurance sector (+1.4percent) followed suit, driven by LAWUNION (+16.7percent) and AIICO (+7.8percent). Also, the oil and gas sector (+0.8percent) added points thanks to MOBIL (+9.7percent) which announced its voluntary delisting during the week.

On the other hand, the consumer goods sector (-5.9percent) closed lower amid loss es in NE STL E (-10percent) and DANGSUGAR (-9.1percent). Similarly, the Industrial goods sector (-4.3percent) declined as industr y heavyweight BUACEMENT (-5percent) declined.

Neimeth pays dividend as shareholders approve restructuring

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he directors of Neimeth International Pharmaceuticals Plc have expressed determination to grow the turnover of the company to the N4billion mark in the immediate future.

At the annual general meeting i n L a g o s, s h a r e h o l d e r s unanimously approved the balance sheet restructuring that enables the company to offset accumulated losses with reserves, thus putting the company in good stead to declare dividend from current net earnings.

Shareholders gave the board of the company the nod to reduce the share premium account of the company from N1.02 billion to N122.439 million, with the reduced amount of N898.164 million being credited to a capital restructuring reserve account and applied to write off accumulated losses.

Shareholders commended the improvements in the operations of the company.

Key extracts of the full-year audited report and accounts for the year ended September 30, 2019 and the first quarter of this current business year period ended December 31, 2019 had shown sustained growth in both sales and profitability.

Founder, Independent Shareholders Association of Nigeria (ISAN), Sunny Nw o su c o m m e n d e d t h e management and board of the pharmaceutical company for the performance in recent period noting that the balance sheet restructuring was in the interest of shareholders.

A noth er sha reh ol der, Matthew Akinlade expressed confidence in the new management of the company citing recent growths in performance indicators.

He said shareholders are hopeful that this effort will soon translate into returns in terms of dividend payment.

Addressing the shareholders, Chairman, Neimeth International Pharmaceuticals Plc, Ambrose Orijiako reiterated the commitment of the board and management to shareholders’ value creation.

He assured that the directors would not rest

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until there is return for investment of shareholders in the company, promising the shareholders dividend in the nearest future.

He said company had, in 2019, began the articulation of strategies meant to drive vigorous expansion initiative, adding that the company would launch a five-year strategic plan to reposition the company to play a greater role in the wider healthcare industry and ensure good returns on investment for shareholders.

Speaking further on the strategic direction for 20202024, Managing Director, Neimeth International Pharmaceuticals Plc, Matthew Azoji, said the strategic focus of the company in years ahead is to initiate bold and gradual expansion initiative that would see the company increasing market share in the healthcare industry.

He said the five-year strategic plan would guide the company’s vigorous expansion programme, which include the upgrade of the company’s factory at Oregun, Lagos state; development of new manufacturing facilities and expansion of the company’s marketing drive to Sub-Saharan Africa.

He added that to achieve the expansion plans, more investments would be needed in course of the five -year period, thus shareholders might be called upon for support.

Azoji said part of the new strategic focus of the company is to partner with local and international brand owners n the area of contract manufacturing.

“We have excess capacity in some product lines and challenges in others. We plan to engage in contract manufacturing for other @Businessdayng

companies for those lines we have spare capacity and use that to grow our turnover.

We also plan to secure the good manufacturing practice (GMP) certificate of the World Health Organisation,” Azoji said.

The audited results showed that Neimeth’s turnover rose from N2.27 billion in 2018 to N2.37 billion in 2019. Gross profit also indicated similar modest growth rising from N1.16 billion in 2018 to N1.20 billion in 2019. Operating profit rose by 47.9 per cent to N413.38 million in 2019 as against N279.42 million in 2018. Finance costs also declined from N112.96 million to N108.9 million.

Profit before tax jumped by 82.9 per cent from N166.46 million in 2018 to N304.44 million in 2019. After taxes, net profit increased by 48.7 per cent from N148.02 million to N220.15 million. With these, earnings per share rose by 50 per cent to 12 kobo in 2019 as against 8.0 kobo in 2018.

Performance ratios u n d e rs c o re d sig n i f i ca nt improvements in the profitability of the company.

While gross profit margin dropped from 51.1 per cent in 2018 to 50.6 per cent in 2019 due to industry-wide headwinds, operating profit margin, which denotes the company’s managerial ability to curtail headwinds and drive core business operations profitably, improved by five percentage points from 12.3 per cent in 2018 to 17.4 per cent in 2019. Pre-tax profit margin-which measures untaxed profit per unit of sales, nearly doubled from 7.3 per cent in 2018 to 12.8 per cent in 2019. Net profit margin, after taxes, also improved from 6.52 per cent in 2018 to 9.28 per cent in 2019.

Thursday 12 March 2020

Innovation

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19

TECHTALK

Broadband Infrastructure

Bank IT Security

Tech holds promise as justice system excludes 90% Nigerians FRANK ELEANYA

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ne of the major conclusions by stakeholders from a recent BusinessDay summit on legal business was that the justice system in Nigeria was technologically backward and lacks the capacity to compete with peers in South Africa, Egypt, and Kenya.

This is coming on the heels of the revelation that only ten percent of Nigeria’s more than 180 million people have access to the justice system. Less than ten percent can afford the premium placed on justice.

“The judicial system isn’t serving the purpose that it is supposed to serve,” said Ngozi Aderibigbe, partner at Jackson, Etti & Edu. “How much justice are people getting from the justice system?”

With little investments deployed to acquiring new technologies, justice delivery in the country remains at the mercy of traditional court processes, meaning that cases are delayed for centuries, data collected are lost in volumes of dusty files, lawyers resort to textbook tactics while judges lose track of time buried in frivolous lawsuits.

The result is an inordinately expensive justice system that excludes hundreds of millions of Nigerians who cannot afford the cost of

delays and the rising cases of questionable judgments that have seen many judges sent on suspension thereby eroding what is left of the integrity of the judiciary.

The situation is even more worrisome. Abi Haruna, managing lead counsel, Siemens, said that foreign organisations and investors are also losing confidence in the system and if handed a choice, they would prefer their investments are under legal systems outside Nigeria.

“Delay, access and the quality of judgment are the major challenges in the

Nigerian judicial system.

Investors don’t like questionable justice systems.

They want certainty,” he said during a panel session at the summit tagged ‘Disruptive Technology and the Future Realities of Legal Business’.

Part of the problem lies in the size of the industry.

First, there is little information about the actual size of the justice system in Nigeria.

However, almost on a daily basis, new law firms spring up across the country.

Collins Onuegbu, founder and executive vice-chairman of Signal

DAAYTA 2nd edition winner secures N12 million grant FRANK ELEANYA

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aper Packaging C o m p a n y ( T PPCNG) which emerged winner of the Deji Alli ARM Young Talent Award (DAAYTA) has secured an N12 million grant from organisers of the event.

The company which beat off competition from the other five contestants, provides a biodegradable paper-based alternative that is friendly to the environment for the food industry. It was founded by Eferobosa Onuegbu in 2014 in Port Harcourt.

T h e D A AY TA p r o gramme which was inaugurated by ARM in hon-

our of its founding CEO Deji Alli in 2015 is part of the company’s CSR efforts to educate and empower the younger generation to make a meaningful socioeconomic impact in their immediate environment and the nation at large.

This is the second edition of DAAYTA after the first edition in 2019 with WeSabi Solutions emerging winner to claim the N12 million grant.

DAAYTA 2020 focused on start-ups with a minimum viable product (MVP) and at least one customer.

425 applications from startup entrepreneurs were received and following a meticulous review process, the top 6 contestants

were identified and chosen. These six made their pitches at the event in the hope of winning the N12 million grant.

The top six contestants in order of winning are Winner - Eferobosa Oguegbu of The Paper Packaging Company, 1st runner up - Emmanuel Ezenwere of Arone; 2nd runner up - Chidi Nwaogu of Publiseer; 3rd runner up - Debo Odulana of Doctoora e-Health Limited; 4th runner up - Bright Williams of Neohaul Technologies; and 5th runner up - Ahamefula Uzoma of Livekampus Technologies.

TPPCNG currently has three branches in Nigeria, including Lagos, Port Harcourt, and Abuja.

Alliance, said information about the size of the justice system would help in determining the capacity of the market in providing sufficient services to the people. It would also be necessary for determining what technology investments to make. Adopting technology comes at a cost and only financially liquid law firms can make the necessary technology leap.

Given that the size of the largest law firm in the country, Aluko & Oyebode, only boasts of 85 staff members, compared to the top five legal firms in South Africa

with each having more than 400 staff members, Nigerian law firms do have a long way to go Gbenga Oyebode, chairman of Aluko & Oyebode said while the sufficiency of the talent in the justice system is not in doubt, they need to be trained to run the industry as a business. The majority of lawyers have not been trained in the broader picture of the system hence it is practically impossible to attract investments.

“I think the Nigerian law school isn’t fit for purpose, some Nigerian lawyers can’t read a balance sheet,” Oye-

Signal Alliance kicks off customer week with focus on tech space FRANK ELEANYA

E

nterprise IT firm, Signal Alliance will be looking to deepen the conversation on growth of the tech ecosystem in Nigeria during its Customer Week which began 9 March and ends on 13 March 2020.

Customer Week for the company is a period set aside annually for it to appreciate numerous customers, partners, and other stakeholders among which are some of the top tier banks in Nigeria and global tech firms like Microsoft.

Founded in 1996 by Collins Onuegbu, Signal Alliance has grown to become a major technology Integrator for corporate organizations in Nigeria with experience in enterprise technology

services, from cloud technology, infrastructure and enterprise services, data and AI, IT security, managed and outsourced services and enterprise software services. Signal Alliance has also extended its services with subsidiaries and affiliates in renewable energy, health technology, FinTech, and enterprise resource planning.

The company is also a multiple Microsoft gold partner and services some of the largest Microsoft customers in Nigeria, supporting some of the critical applications that have made Microsoft the number one software company in the world. It also holds strategic partnerships with global technology providers like Cisco, Trend Micro, UiPath, Informatica, Fujitsu, and Broadcom.

“We do not take for grant-

Team: Frank Eleanya, frank.eleanya@businessdayonline.com; Caleb Ojewale, caleb.ojewale@businessdayonline.com www.businessday.ng

bode said. “I think Nigerian lawyers think they are practicing law and it isn’t a business but it is a business. Law isn’t just something that we practice.”

The industry’s seeming apathy to technology means that non-legal entities are beginning to encroach and even dominate most services that are usually seen as lawyers domain. Highdemand legal services such as document review; Contract management ; Litigation support; Discovery and electronic discovery; Contract lawyers and staffing; Investigation support and legal research; and IP management are becoming the primary domain of Alternative Legal Services Providers (ALSPs).

The ALSPs are playing a bigger role in providing legal services. Businesses are now more often turning to these innovative companies for many routine legal services, and law firms are even outsourcing certain jobs to ALSPs that would be too expensive and timeconsuming to do in-house.

Olasupo Shashore, former attorney general and commissioner for Justice Lagos State said the adoption challenge can be addressed by removing regulatory bottlenecks that shut out opportunities for law firms to scale their business. The structure of the system, he says, isn’t such that law firms can take foreign investments.

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ed the pivotal contribution of our customers to the growth of our organization, this program is one of the many ways we appreciate them for trusting us with their business and standing by us through the years,” said Adebola Adeyinka, Marketing Manager.

As a tradition over the past 10 years of its inception, Customer Week is held within the 1st quarter of the year with various activities during the week.

As part of activities for the week, Signal Alliance in partnership with BusinessDay Media, HBSAN, ISPON and Fintech 1000+ will bring together 20 Nigerian technology thinkers and influencers to a roundtable conversation to review the past 20 years of tech in Nigeria and make forecasts for now and the next two decades.

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Thursday 12 March 2020

Harvard Business Review

BUSINESS DAY

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ManagementDigest

Spotlight on productive innovation: Building a culture of experimentation Stefan Thomke IT TAKES MORE THAN GOOD TOOLS. IT TAKES A COMPLETE CHANGE OF ATTITUDE. n December 2017, just before the busy holiday travel season, Booking. com’s director of design proposed a radical experiment: testing an entirely new layout for the company’s home page. All the content and design elements — pictures, text, buttons and messages — that Booking.com had spent years optimizing would be eliminated.

Gillian Tans, Booking.com’s CEO at the time, was skeptical.

Why didn’t senior management just veto the trial? Because doing so would have violated one of Booking.com’s core tenets: Anyone at the company can test anything — without management’s permission.

Booking.com isn’t the only firm to discover the power of online experiments. But in studying more than a dozen organizations and analyzing anonymized data on experiments from upward of 1,000, I have seen that many firms run no more than a few dozen that have little impact.

If testing is so valuable, why don’t companies do it more? After examining this question for several years, I can tell you that the central reason is culture. To successfully innovate, companies need to make experimentation an integral part of everyday life — even when budgets are tight. That means creating an environment where employees’ curiosity is nurtured, data trumps opinion, anyone can conduct or commission a test, all experiments are done ethically and managers embrace a new model of leadership.

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CULTIVATE CURIOSITY Everyone in the organization, from the leadership on down, needs to value surprises, despite the difficulty of assigning a dollar figure to them and the impossibility of predicting when and how often they’ll occur. When firms adopt this mindset, curiosity will prevail and people will see failures not as costly mistakes but as opportunities for learning. At many companies, the risk associated with experiments makes managers reluctant to allocate resources to them. But the gains enjoyed by companies that have made the leap of faith should give others the courage to follow them.

INSIST THAT DATA TRUMP

OPINIONS The empirical results of online experiments must prevail when they clash with strong opinions, no matter whose opinions they are. This is the attitude at Booking.com, but it’s rare among most firms for an understandable reason: human nature. We tend to happily accept “good” results that confirm our biases but challenge and thoroughly investigate “bad” results that go against our assumptions. The remedy is to implement the changes that experiments validate with few exceptions.

DEMOCRATIZE EXPERIMENTATION As I’ve noted, any employee at Booking.com can launch an experiment on millions of customers without management’s permission. About 75% of its 1,800 technology and product staffers actively use the company’s experimentation platform.

Standard templates allow them to set up tests with minimal effort, and processes like user recruitment, randomization, the recording of visitors’ behavior and reporting are automated.

Democratization, of course, has its challenges. One is the risk that teams or individuals could break something on Booking.com’s high-traffic website, causing it to crash. Another is that each team has to set its own direction and figure out which user problems it wants to solve. That requires extensive training and ongoing discussions among team members about what the right problems are. Debates are encouraged, and people reach out to col-

leagues if they see anything that strikes them as questionable.

This system gives teams the autonomy they need to try out new approaches they believe are valuable and allows people throughout the company to monitor the experiments and provide feedback in real-time.

It truly liberates everyone to test any idea about how to improve Booking.com’s business.

BE ETHICALLY SENSITIVE When contemplating new experiments, companies must think carefully about whether users would consider the tests to be unethical. While the answer isn’t always clear-cut, organizations that fail to examine this question risk sparking a backlash.

Research suggests that companies that test new ideas first face greater customer scrutiny than competitors that implement new practices without conducting any experiments. In a published analysis of 16 studies in domains such as health care, vehicle design and global poverty, bioethicist Michelle Meyer and her collaborators concluded that participants considered A/B tests to be more morally questionable than the universal implementation of an untested practice (A or B) on the entire population — even when both treatments were unobjectionable.

Clearly, ethics training and some kind of oversight are necessary. The challenge is conducting the latter in ways that don’t make people overly cautious or tangle them in red tape.

EMBRACE A DIFFERENT LEADERSHIP MODEL By democratizing experimentation and following test results where they lead, companies can enable employees to make good decisions on their own and accelerate innovation and improvements. But if most decisions are made this way, what’s left for senior leaders to do, beyond developing the company’s strategic direction and tackling big decisions such as which acquisitions to make?

There are at least four things: — SET A GRAND CHALLENGE THAT CAN BE BROKEN INTO TESTABLE HYPOTHESES AND KEY PERFORMANCE METRICS: Employees need to see how their experiments support an overall strategic goal.

— PUT IN PLACE SYSTEMS, RESOURCES AND ORGANIZATIONAL DESIGNS THAT ALLOW FOR LARGE-SCALE EXPERIMENTATION: Scientifically testing nearly every idea requires infrastructure: instrumentation, data pipelines and data scientists. Several thirdparty tools and services make it easy to try experiments, but to scale things up, senior leaders must tightly integrate the testing capability into company processes. Doing so requires striking the right balance between centralization and decentralization.

— BE A ROLE MODEL: Leaders have to live by the same rules as everyone else and subject their own ideas to tests.

They should heed the advice of Francis Bacon, the father of the scientific method: “If a man will begin with certainties, he shall

end in doubts; but if he will be content to begin with doubts, he shall end in certainties.”

— RECOGNIZE THAT WORDS ALONE WON’T CHANGE BEHAVIOR. Ultimately, being a leader in an experiment-driven organization means letting go and empowering employees to perform their own tests — which doesn’t happen by simply telling people that they can do so.

REALIZING THE TRANSFORMATIVE power of experimentation requires a sustained commitment. Over time experiments will result in thousands of small and not-so-small changes that collectively generate huge benefits. Providing the right tools, while essential, is the easy part and isn’t enough to make experimentation a way of life. The lesson is that it’s not so important whether any one experiment succeeds or fails; what matters is how decisions are adjudicated under uncertainty in an organization. They should not be based on faith or opinion alone. If they can be put to the test, they should be.

Stefan Thomke is the William Barclay Harding professor of business administration at Harvard Business School. He is a leading authority on the management of business experimentation and innovation and has worked with many global companies on product, process and technology development.

He is the author of “Experimentation Works: The Surprising Power of Business Experiments.”

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Thursday 12 March 2020

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Consumer goods firms face double whammy on oil, coronavirus …industry profit falls to six year low BALA AUGIE

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he profits of the largest consumer goods firms’ have fallen to a six-year low, and huge production cost looms, thanks to economic fallout from the coronavirus that is threatening the international oil market.

The virus contagion is increasingly worsening and has resulted in low demand for crude oil as OPEC and nonOPEC members have failed to reach an agreement over output cut.

A volatile crude oil price is inimical to the consumer goods sector because it could stoke a severe dollar scarcity that would make it difficult for companies to import raw material and equipment as the central bank would be struggling to protect the external reserves from receding.

For the year ended December 2019, the 10 largest

companies posted a cumulative profit of N47.03 billion, this compares with N64.49 billion in 2018, N97.22 billion in 2017, N49.83 billion in 2016, N84.73 billion in 2015, and N87.66 billion in 2014.

The charts show the fastest bottom line (profit) was in the financial year 2017/16 when companies increased the price of key products to fend off the effect of spiraling cost of production.

Also, the introduction of a new foreign exchange regime in June 2017- that paved way for fast-moving consumer goods firms to have access to foreign currency- added impetus to earnings.

While profit declined the most in 2019/18 financial year, companies could see margins deteriorate further this year if the coronavirus that has killed over 4,000 across the world continues to threaten global economy and the international oil market.

International Brent crude traded at $37.45 on Tuesday, up over 8 percent, while

U.S West Texas Intermediate (WTI) stood at $34.05, around 9 percent higher.

It comes after Brent and WTI both dropped 24 percent on Monday, sinking to more than four-year lows.

The sudden drop in oil price, the worst since 1991, rekindles the dark memories of 2015 when a reduction in commodities price stoked a chronic dollar scarcity that paralyzed the industry as firms were unable to import raw materials and equipment.

In 2016, at least 272 firms were forced out of business as they capitulated to the headwinds, according to the Manufacturing Association of Nigeria (MAN).

That same year, South Africa’s largest publicly traded company, Truworth closed its operations in Nigeria due to stringent import restrictions.

The fear among experts is that the central bank does not have the buffers or ammunitions to protect external reserves that have been falling since last year, a double whammy for consumer goods firms already struggling with deteriorating margins.

The nation’s external reserves are set to drop below $37 billion, the lowest level in 27 months.

Their production costs will go up as they may find it difficult to bring in raw materials, but the impact of an economic shock this time around may not be as severe as 2015 because a lot of them had deleverage the balance via rights issue,” said Abiola Gbemisola,

equity research analysts at Chapel Hill Denham Limited.

“The recent vagaries in the oil market further compound their woes. Sugar producers will take some hit because they have to source some their raw materials from Brazil; Producers of wheat and beer will also be impacted,” Gbemisola.

Gbemisola said Guinness Nigeria is the most vulnerable to a shock because it has total debt of N5 billion while International Breweries had raised rights issue to settle its $250 million liabilities.

The largest consumer goods firms haven’t been able to turn each Naira invested in sales into higher profit.

The cumulative net profit margins of these firms was (0.82) in December 2019 from 6.55 percent the previous year.

However margins improved to 7.32 percent in December 2018 from 4.67 percent in December 2016, thanks to strong sales growth propelled by hike in price of commodities.

For the year ended December 2019, Unilever Nigeria recorded its first loss of N4.76 billion, this compares with a profit of N2.14 billion in 2018, N7.45 billion in 2017, N3.07 billion in 2016, N1.97 billion in 2015, N2.41 billion in 2014.

International Breweries’ recorded a loss of N9.13 billion in December 2019, this compares with profit of N3.27 billion in 2018, N1.42 billion in 2017, N1.03 billion in 2016, N1.94 billion in 2015, and N2.10 billion in 2014.

Nascon Allied Nigeria Plc

posted a profit of N1.94 billion in December 2019, the lowest in five years..

Analysts say the devaluation of the currency on the back of continued depletion of the external reserve will erode the purchasing power of consumer and hurt the revenues or output of companies.

There is definitely a risk if the central bank fails to hold the currency the way they did the last time.

“A base devaluation will make people poorer and companies will bear the brunt as they are finding it difficult

to pass on high input cost inform of higher prices to consumers,” Onyeka added that high cost of raw materials in the case of a deviation could result in cost push inflation.

Inflation in Nigeria quickened to a 21-month high of 12.30 percent in January as food shortages caused by border closures continued to drive up the price of staples Over 50 percent to Nigerians live on less than $1.98 a day, while unemployment rate is at an all-time high of 23 percent

sales, making them to retaliate by introducing Coca-Cola Zero Sugar, also called Coke Zero or Zero Sugar between the periods of 2017-2018.

According to BusinessDay analysis of the sugar data from the National Sugar Development Council (NSDC), a parasternal of the Federal Ministry of Industry, Trade and Investment responsible for the regulation of all activities in the sugar sub-sector, sugar consumption steady decline by 20 percent to 1.25 million tonnes in 2018 from 1.56 million tonnes in 2016.

Ayorinde Akinloye, a consumer goods analyst at Lagosbased CSL Stockbrokers said that Nigerians are now adopting the lifestyle of healthy liv-

ing by adapting for healthier sugar substitutes like honey.

Last year, a report by Euromonitor International, the world’s leading independent provider of global strategic intelligence said that producers of carbonated drinks may be challenged by the emerging health and wellness trend of consumers as they may shift to low sugar juice as an apparent healthier alternative.

“The juice manufacturers are set to derive further benefit from this trend over the forecast period and this development is supported by growing concerns over the health risks associated with high sugar consumption,” the report further stated.

Health experts believe

that sugar consumption is a major cause of obesity and many chronic diseases, such as diabetes.

Also the World Health Organisation (WHO) recommends that in both adults and children there should be a reduced intake of free sugar (monosaccharides and disaccharides) added to foods and beverages by the manufacturer, cook or consumers throughout the life course.

Nigeria has the youngest population in Africa which is enticing for any manufacturer with a product that targets young people. So it is no doubt, that it presents a huge opportunity for entrants into the food and drink industry.

COMPANY

PepsiCo follows health trends with Pepsi Max BUNMI BAILEY

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he increasing preference of consumers for drinks with low sugar content has propelled leading drink manufacturer, PepsiCo, to launch Pepsi Max as part of strategy to stay competitive in the soft drinks industry.

Pepsi Max is a low calorie and sugar-free cola manufactured by PepsiCo as an alternative to Pepsi and Diet Pepsi.

Business Day earlier reported that taste was the new focus for soft drink makers to compete and gain market share as against price and quality. With the introduction of the zero-sugar drink,

it looks like producing drinks with low or no sugar is the new tread.

According to Eronmosele Aziba, a Lagos based consumer analyst, the soft drink manufacturer is competing for market share by tapping in the increasing health awareness trend.

“Considering that CocaCoke, the biggest player in the soft drinks market has such a product (Zero Sugar), it is no surprise that other competitors will introduce theirs as well,” “And at the moment there is limited ability for them to adjust prices, so they have to find other ways to compete for market share by introducing this product to the market,” www.businessday.ng

Aziba further said.

When Bigi Cola, a major competitive carbonated drink produced by Rite foods limited was launched in 2014, it garnered patronage from consumers, owing to its low sugar and calorie content which affected Coca- Cola

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Thursday 12 March 2020

BUSINESS DAY

23

ENERGYREPORT Oil & Gas

Power

Renewables

Environment

Nigeria’s economic trouble deepens as IEA forecast decline in global oil demand for 2020 olusola Bello

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igeria economic trouble is being compounded as the International Energy Agency has forecasted it expected the global oil demand to decline this year as the impact of the new coronavirus (COVID-19) spreads around the world, constricting travel and broader economic activity.

International Energ y Agency (IEA) said it slashed its demand outlook by 1.1 million bpd due to the coronavirus outbreak and its impact on economies.

It now sees global demand falling by 90,000 bpd year on year in 2020, after its executive director Fatih Birol warned two weeks ago that the coronavirus outbreak could hit global oil demand growth more than initially expected Already the price of a barrel of Brent which is equivalent of Nigeria ‘a Bonny Light Tuesday morning rose to $37 per barrel after having fallen to as low as $32 on Monday.

Analyst say the country

must begin to tighten it belts as many of the government project would be stalled if this is not over come early enough.

They also want the government to hands off subsidy and completely deregulate downstream sector of the petroleum industry. So that she can free her self from the spending on fuel subsidy Nigeria depend on oil as it major foreign exchange earnings and more than 78 per cent of her foreign reserves

also depend on the crude oil export. The country budget for fiscal year 2020 is based on $57 per a barrel of crude oil.

Rate of unemployment could increase and it is even feared that the country could go into recession if care is not taken thereby increasing the level of poverty in the land.

The agency in its latest release on Monday morning concerning global oil demand said the situation remains fluid, creating an extraordinary

L-R: Yakubu Lawal, general manager, communications, Niger Delta Power Holding Company (NDPHC); Simon Lalong, Governor of Plateau State, and Chiedu Ugbo, managing director, NDPHC, during the award of best power agency for the year 2019

T

he Major Oil Marketers Association of Nigeria has said it will support the Federal Government and the Nigeria National Petroleum Corporation to eliminate fuel theft and other illegal activities in the downstream petroleum industry.

Adetunji Oyebanji, chairman, MOMAN, said the association recently attended a working session under the direction of the Group Managing Director of the NNPC designed to curb and indeed eliminate fuel theft.

The MOMAN boss in chat with the press reiterated that its membership in no way condones fuel theft, fuel adulteration or illegal refining of petroleum products by unlicensed entities.

According to him, MOMAN member working with its business partners, will do all in its power to support the Federal Government and the NNPC to eliminate these Olusola Bello, Team lead,

malpractices.

He said this would include working with transporters and dealers to strengthen processes and ensure that no illegal or adulterated products find its way into their system.

Speaking on Compressed Natural Gas (CNG), he said, his association is fully in supportive of the Federal Government’s drive for the full exploitation of the country’s gas reserves including deepening the use of Liquefied Petroleum Gas and Compressed Natural Gas. He stated further that to develop the CNG as a cleaner and more affordable alternative to Premium Motor Spirit is a key objective of this policy.

The move towards CNG he explained would reduce the overreliance by the Nigerian populace on petrol.

“Towards this purpose, MOMAN is prepared to invest in the safe installation of LPG (and, when the time is right, CNG facilities in its stations across the country,” he said.

He added that this would eliminate the unsafe practice

Graphics: Joel Samson.

www.businessday.ng

Olusola Bello

of dispensing LPG through unlicensed roadside vendors.

He said, “With respect to CNG, MOMAN encourages immediate engagements with the private sector to identify policy measures that will make deployment of at retail outlets a reality for the country in the shortest possible time.

MOMAN he said will collaborate with government and other stakeholders in implementing any such initiative, stressing the need for the restructuring or reform of the downstream oil industry.

According to him, the elimination of oil theft and leakages in the system, the optimization of the supply chain, the introduction of alternative energies and the regular and consistent maintenance of the distribution infrastructure are necessary aspects of the downstream reform.

He said the passage of the Petroleum Industry Bill would provide and opportunity for the country to resolve all these once and for all.

demand this year drops for the first time since 2009 because of the deep contraction in oil consumption in China, and major disruptions to global travel and trade,” it stated The short-term outlook for the oil market will ultimately depend on how quickly governments move to contain the coronavirus outbreak, how successful their efforts are, and what lingering impact the global health crisis has on economic activity. All the details of our new forecast can be found in the March edition of our Oil Market Report.

“The coronavirus crisis is affecting a wide range of energy markets – including coal, gas and renewables – but its impact on oil markets is particularly severe because it is stopping people and goods from moving around, dealing a heavy blow to demand for transport fuels,” said Fatih Birol, the IEA’s Executive Director.

He said: “This is especially true in China, the largest energy consumer in the world, which accounted for more than 80 per cent of global oil demand growth last year.

While the repercussions of the virus are spreading to

other parts of the world, what happens in China will have major implications for global energy and oil markets.”

Already Russia has just sparked what may end up being among the ugliest oil price wars in recent history.

And Saudi Arabia is firing back. As the two oil superpowers face-off, American oil companies may end up as the biggest victims.

Russian President Vladimir Putin announced on Sunday that present oil prices were sustainable for the Russian economy. Adding that Russia had the tools to react to any adverse results of the spread of the coronavirus on the global financial climate.

“I want to stress that for the Russian budget, for our economy, the current oil prices level is acceptable,” Putin explained in a meeting with Russian energy officials.

Now some oil analysts are anticipating barrel prices as low as $20 within the year.

Some experts have suggested that Russia’s move is intended to counter U.S. shale producers and hit back against the U.S. for targeting the Nord Stream 2 gas pipeline connecting Russia and Germany.

Pricing, infrastructure imbalance worsen Nigeria’s CNG investments deficit - NIPCO

Oil marketers promise to support government efforts to curb fuel theft Olusola Bello

degree of uncertainty over what the full global impact of the virus will be.

In the February market report, the IEA had slashed its 2020 oil demand growth forecast by 365,000 bpd to just 825,000 bpd—the lowest oil demand growth since 2011, and warned that the coronavirus outbreak would lead to the first quarterly contraction in global oil demand in more than 10 years.

“In our central base case,

I

nappropriate pricing, paucity of infrastructure and non-existence of a regulating agency are partly responsible for investment deficit rocking Nigeria’s Compressed Natural Gas (CNG) industry.

Sanjay Teotia, Managing Director, NIPCO Gas limited, who, according to a stated this, during a media tour of some of NIPCO’s facilities in parts of Benin City, the Edo State capital. He noted that the development of CNG, which is also being used to fuel vehicles for profitability and environmental friendliness is also being hampered by lack of accessibility to land.

He expressed regret that with the enormous gas reserves in the country, the potentials in the sector have not been fully utilised to the benefit of the people.

Nigeria, Teotia said, would continue to miss the gains of the deposit of such gas reserves if the challenges were not resolved.

“He however lauded the

Federal Government’s National Gas Expansion Programme Committee, which was recently inaugurated by the Minister of State for Petroleum Resources, Timpre Silva, and chaired by Mohammed Ibrahim to steer the gas sector for optimal performance,” the statement signed by Lawal Taofeek, Assistant general manager, Corporate Affairs.

The setting up of the committee, the Nipco Gas boss said, in a statement signed

by Lawal Taofeek, Assistant general manager, Corporate Affairs was very apt and a clear indication of the genuine resolve of the present administration to tackle challenges that bedevil the sector and to pave the way for better utilisation of the nation’s massive gas resources in the overall interest of stakeholders . According to him, the company, which got its license to operate in 2007, have seven gas stations in Benin alone, with other stations in Lagos and Delta States, stating that NIPCO has laid 51km gas pipeline in Benin to distribute CNG to

Email: energyreport@businessdayonline.com, Tel: +234-8023020011

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@Businessdayng

the seven stations in the city.

He said; “Currently, we have converted no fewer than 5000 vehicles from PMS/ Diesel to CNG, and now distribute the product to few eateries in the city. We have the capacity to dispense 500 Standard Cubic Meter (SCM) and also dispense to no fewer than 20,000 vehicles here.

The sector has the potential to provide numerous job opportunities and create a lot of economy potentials for the country once the government provides the necessary framework to enhance its growth, he said.

He however said for once, there must be appropriate pricing of gas to allow for affordability and the issue of land must be addressed as well.

States government he said can encourage investment in the sector by giving land at a reduced rate.

Some of the motorist who spoke with newsmen during the tour expressed delight on the over 40 percent saving they make using gas as auto fuel compared to using white petrol

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Thursday 12 March 2020

BUSINESS DAY

BUSINESS TRAVEL

NAHCO restates commitment to support workplace gender equality

Stories by IFEOMA OKEKE

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he Nigerian Aviat i o n Ha n d l i n g Company Plc ( N A H C O Av i ance), one of Nigeria’s leading ground handling service providers has restated its commitment to support gender equality in the workplace and helping young girls develop interest in the aviation sector.

Speaking during an event held by the organisation to commemorate the International Women’s Day, Olatokunbo Adenike Fagbemi, managing director of the company, said the event is to celebrate women in the aviation sector.

“This is second time we are having this event. The first time, we had female engineers from within the aviation industry and outside and we had something smaller but this time around, we have females from airlines, the Federal Airports Authority of Nigeria, (FAAN), customs and other stakeholders. We want them to share with us on International Women’s Day

around the theme ‘Each for Equal’ and looking at generational equality.

“If you notice most of the people that gave the speeches are focusing on the younger ladies. What we want to also do this year is to get enough women in aviation at the senior level and go to schools around Lagos and talk to the girls. I have also discussed with the people that came for this event so that next year, we will also reach out to the younger girls so they

understand what the aviation industry is all about, so they can start showing some interest.

“We want them to understand that it is more than being a pilot or air hostess, it also involves working on the aircraft, working with cargo, providing safety services, being a regulator and air traffic management amongst other things. So, there is a place for everyone,” Fagbemi said.

She disclosed that a lot of times she gets emails from

people referring to her as ‘Mr’ as people just assume she should be a man because of her position.

She acknowledged that there has been a lot of gender imbalance in aviation, adding that at NAHCO, everybody is given equal opportunity.

Speaking on the impact of coronavirus on the company, she said, “Coronavirus just started and February is usually a low month for cargo but there is an impact because passenger traffic has reduced.

COVID-19: Emirates introduces waiver policy to help customers change travel dates

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mirates is providing customers more flexibility, choice and value through its newly introduced waiver policy for all booked tickets issued on or from 7 March until 31 March 2020, allowing customers across its network the choice of changing their travel dates without change and reissuance fees as a result of the COVID-19 situation.

The move provides Emirates’ customers with peace of mind should they decide to change their travel plans due to the evolving situation.

Customers can change their booking to any date for travel within an 11 month date range in the same booking class without change penalties. Difference in fare, if applicable applies. The policy covers all existing destinations across the Emirates network.

Adnan Kazim, chief commercial officer, Emirates Airline, said: “We want our customers to feel fully supported, comfortable and confident when making travel plans, while offering

them the best fares, without incurring change fees should they decide to delay or adjust dates. The situation remains dynamic and we will continue to look at ways to provide flexibility, convenience and peace of mind for our customers.”

“Emirates Skywards will also be providing more flexibility to its members who have been impacted by the outbreak of the coronavirus through imposed travel restrictions and flight reductions.

“Skywards Platinum, Gold and Silver members can maintain their cur-

www.businessday.ng

rent status by fulfilling 80 percent of their tier travel requirements between 31 March and 30 June 2020. In addition, Skywards members booked to travel between 1 March and 30 June 2020 will be able to benefit from an additional 20 percent bonus Tier Miles,” Kazim said.

Emirates is also taking its aircraft cleaning process to the next level through additional precautionary measures of implementing enhanced disinfecting procedures after flights from destinations most affected

by COVID-19.

Kazim noted that if the airline is alerted to any suspect or confirmed cases of infectious diseases, teams will be immediately deployed for a deeper cleaning to thoroughly disinfect all cabins of that aircraft with stronger, approved chemicals.

He assured that across all its aircraft, Emirates utilises HEPA filters, which are proven to remove more than 99 percent of viruses in the cabin environment. If there is a suspected case onboard, Emirates will go a step further to replace all the HEPA filters on the aircraft.

“Customers are advised that fare differences or applicable taxes may apply if they wish to change their bookings to a different fare class.

Current refund and rebooking conditions for tickets issued before 5 March still apply.

“Customers impacted due to cancellations of flights impacted by the COVID-19 virus are advised to check emirates.com for rebooking or rerouting options,” the airline stated

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We still provide services to our airlines but we also know that some of our airlines are already cancelling flights.

“For now we are okay, but we are more conscious. Every day we have talks on hygiene and we are changing some of the cleaning materials that we are using for the aircraft. So that is an impact for us.”

Also speaking at the event, Yakubu Henrietta, general manager, public affairs, FAAN said women representation in aviation is not yet a 50-50 representation but women are truly coming up but there are more women in aviation now than it was maybe a decade ago.

Henrietta noted that women are now ready to come to the fore front now. “I remember when I was made acting general manager of Public Relations, FAAN, a lot of people were doubting my abilities and the best form of revenge is success and that was when I told myself that I would do better than my predecessors and I’m proud to say that I am doing very well.

“When people relegate us to the background, it gives us a push and it makes us perform better than men in the indus-

try,” she said.

She disclosed that she had a lot of male bosses that were doing very well and they were interested in seeing her grow in the system, so she looked up to them.

On the steps the airports are taking in fight against coronavirus, she said in all international and domestic airports FAAN is doing so well in the fight against coronavirus.

“I just came back from Germany and there were no checks there but I can tell you that in the aircraft to Lagos we were given forms to fill. When I came back they refused to clear me because they insisted that I must write the number of my flat on the form. We are doing a lot better than some other country.

“Airlines’ revenue has been affected. The flight was half full when I was coming because there are a lot of travel restrictions and people are playing safe. There are no direct flights from Lagos to Italy or China. When passengers come and display any of those symptoms, people are put on stand for further checks.

Nigerians pray a lot and God has been helping us,” Henrietta said.

Air Peace boosts opeartions with new ERJ-145 aircraft

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i g e r i a’s l e a d ing carrier, Air Peace, has taken delivery of a new ERJ-145 aircraft to help boost its domestic and regional operations.

The aircraft, with registration number 5N-BXG, arrived the Murtala Muhammed International Airport at about 19.30hrs on Wednesday, March 4, 2020, from Morocco.

Disclosing this to Newsmen, Stanley Olisa, senior communications executive of the airline, stated that the new arrival is a 50-seater jet.

He declared, “Air Peace is very happy to announce the arrival of its seventh Embraer 145 Jet, which has been undergoing routine checks in Morocco”.

Olisa, who restated the airline’s determination to ease the burden of travel in @Businessdayng

Nigeria and beyond, noted that the airline now has 27 aircraft in its fleet.

“With this latest ERJ-145, we now have 27 aircraft.

Do not forget that we’re still expecting some of the Embraer 195-E2 Jets we ordered last year,” he said.

The airline’s image-maker assured the flying public that the airline is poised to interconnect various cities in the country and promised more domestic and international routes like Johannesburg, London, Houston and Mumbai.

It would be recalled that Air Peace, West and Central Africa’s largest airline, last year, at the Dubai Airshow, signed an order for 3 E195E2 Jets. This is in addition to the 10 earlier ordered.

With these orders from Embraer, the airline became the launch customer of this type of aircraft in Africa.

Thursday 12 March 2020

BUSINESS DAY

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LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

INSIDE Highlights of the Legal Business Tech Forum

COVID-19: The politics, economics and consequence(s) of the Russia/Saudi Arabia Price Tolu Aderemi

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26/27

Top 20 Nigerian law firms and company leveraging technology for service delivery

28/29

How to be a tech-savvy lawyer

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Digitisation and accessible databases

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Legal Business Tech Awards & Recognition

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n Friday, March 5, 2020, global crude oil producing countries converged in Vienna, Austria to agree cutting crude oil production by 1.5 million barrels a day through to the end of the year. If successful, that would have been the biggest cut since the 2008 financial crisis. On Monday, March 9, 2020, the world was shocked to note that what appeared a price war has now turned to a volume war. More production with a cut in price.

The price war and its impact on the global and local market can be likened to throwing a hand grenade into a blood bath. It is unnecessary, preposterous, ill-timed and commercially insensitive. Particularly in the wake of an everincreasing causalities with over 4,000 people dead and 117,000 confirmed cases. China, the world’s largest importer of crude oil has cut demand by over 50% having similarly cut down production and in/out bound flights from the Republic. This is on account of the deadly Coronavirus outbreak which has affected over 121, 000 people globally.

Industry stakeholders have noted that the early expectations of the impact of the deadly virus on crude oil demand transitioned from a mere reduction in Chinese crude oil demand and has snowballed into a reduction in jet fuel consumption. This will have a greater impact on global economic growth in the following ways: That less crude oil and its by-products are consumed and produced as a result of the restrictions on travels which in turn resulted to less use of jet fuel, slow supply chains and decline in industrial activity; and Stock market reaction engendered a broader market sentiment about the health of the global economy, projections about the future oil demand which both prompted the movement away from en-

ergy stocks further drawing down prices.

OPEC and the International Energy Agency (IEA), consequent to the above, recently lowered forecasts for oil demand in the year 2020. The spread to the United States of America and Europe will have greater consequences, as the risk of key financial centres are becoming materially susceptible to the virus and consequently hinder growth.

The rapid spread of infected cases from China to South Korea, Iran, and, most recently, Italy, California and Africa, highlight the challenges associated with containment and further delay projections of when the outbreak might peak. The continued spread of the virus at this stage seems inevitable, severely impact oil consumption and increasingly, affect expectations for economic growth.

The duo of Saudi Arabia and Russia have left the world in shock as oil prices have plummeted about 20% as a result of volume war. In what can be described as its worst one-day crash in crude prices in nearly 30 years, the European stock market plummeted in the opening min-

utes of trade with the FTSE 100 (UKX) plunged by 8.5%; its worst day since the global financial crisis of October 2008.

Germany’s DAX (DAX) went down by 7.4% whilst Italy’s benchmark index fell by 7.1%.

Shares in British Petroleum (BP) crashed by 20% whilst US oil prices have nosedived 23% trading at $31.84pbd, global benchmark. For its part, Brent crude has gone down by nearly 21%, trading at $35.88bpd.

These are all consequences of the price/volume war of Saudi Arabia and Russia.

Price wars have no utilitarian value as they create extreme uncertainties and birth difficult economic times. The price war of 2014 shut down the oil price from $100pbd to about $40. We expect to have worse.

Undoubtedly and unless strategically managed, Nigeria and a few other countries may slide into recession; being oil dependent to funding their respective budgets. It was therefore not surprising that Nigeria’s President Muhammadu Buhari rose to the occasion by promptly setting up an emergency technical team to review the effect of the Coronavirus on Nigeria and Nigerians having benchmarked

crude oil production at 2.18 million b/d at $57 p/b. This team of technocrats can bear no magic other than to scale down on capital and recurrent government expenditures and more importantly, re-focus on our non-oil export market. Nigeria’s excess crude oil account must also be affected, and State governments must brace up for the near-hard imminent times.

Crude Oil prices (unless Russia and Saudi Arabia sheath the sword) may go below $20pbd and even lower.

Is it time to critically cut down unnecessary government spending? Perhaps yes!

Is it time to re-consider patronizing local automobile manufacturers for the purchase of official vehicles? Yes! Is it time to enhance Nigeria’s comparative advantage? Indeed!!! Is it time to open the borders for continental cross-border trade of locally produced/manufactures goods? Absolutely!!!

These are tough economic times and only the tough will get going.

Tolu Aderemi is an Energy & Infrastructure Partner of Perchstone & Graeys LLP.

www.legal.businessday.ng legalbusiness@businessday.ng

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BD

Thursday 12 March 2020

BUSINESS DAY

Tech Edition

LegalBusiness

LEGAL BUSINESS THIS WEEK

Highlights of the Legal Business T

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lot has happened in the last one week. The most recent being the dethronement and banishment of the former Emir of Kano, Sanusi Lamido Sanusi, Russia/Saudi Arabia oil price war and the deep dive of oil prices.

In the case of Sanusi, the dethroned emir has since put together a strong legal team led by Abubakar Balarabe Mahmoud, SAN to challenge his banishment and detention on the grounds that it is illegal and unconstitutional. Mahmoud disclosed on Tuesday that the Emir’s legal team would be relying on Section 35 of the constitution, which guarantees every citizen the right to personal liberty and also defines the basis for which a person’s liberty may be denied for this suit. He also described the practice of banishment of deposed emirs as a colonial practice which is archaic and has no basis under Nigerian law or the constitution. We will follow and report these developments as they unfold.

he Legal Business Unit of BusinessDay held its inaugural Legal Tech Forum on March 4th 2020 at the Four Points by Sheraton. The event opened with a welcome address by Frank Aigbogun, the Publisher, BusinessDay Media and compered by Tolu Aderemi, a partner at Perchstone & Graeys, LP. Thereafter, the Keynote address was delivered

by Jan van Weijen, the Consul General of the Kingdom of the Netherlands. In his speech, he noted that investments in technology have already produced many changes in the profession, however, technology is not a magic bullet and must be appropriately incorporated into the workings of an organisation.

He lauded innovators who were using technology to provide access to justice such as Bankli, Appruve, Petty Cash, the Flemor Project and DIYLaw yet cautioned that inclusiveness is important, as those who do not have access to use or create digital products are unlikely to be represented in its technology.

The first panel, Leveraging Technology was moderated by Adeleke Alex-Adedipe, who noted

that the conservative nature of the profession has slowed down the rate of adoption of legal technology and increased the reach of Alternate Legal Service Providers (ALSPs).

Adedoyin Pearse, General Counsel at Siemens, stated that the demand for more time and cost- efficient services is a big attraction of ALSPs. Magic Circle law firms recognizing this have registered ALSPs as well, where they roll out simplified legal services to clients.

“Globally, we’re seeing a lot of collaborations, cocreations, deploying solutions”, she said. She added that as lawyers we must acknowledge the change is here and that collaborations with ALSPs and/or other firms is the future of legal services. Other considerations of the panel included considerations on data storage, security and cost efficiency. It was noted that while it was more cost effective to store data offsite, the security and ability to control of the data must also be considered. Thus, we have to give more thought to infrastructure necessary to we have to localize critical data. It was also emphasized that an understanding of the technological design is important in order to adequately provide legal cov-

Gbenga Oyebode, MFR

Jan Van Weijen

While we await these developments, COVID-19 continues to take its toll on the world and in this edition, Tolulope Aderemi, Partner, Perchstone & Graeys offers us a perspective on COVID-19, the politics, economics and consequences of the Russia/Saudi Arabia price war.

In this past week, the Legal Business Unit (LBU) of BusinessDay also organised its inaugural Legal Tech Forum, which brought together, key players in the legal business and tech industries. These include legal practitioners, business and tech experts, policy makers and regulators.

The event, themed, Disruptive Technologies and the Future Realities of Legal Business, took a look at how the legal industry was harnessing technology to improve services to clients; and how large organisations were digitalizing their services and processes in tune with the times. Panel discussions also focused on technological advancements in law firms; data analytics; knowledge management ; talent management ; data security, residency and warehousing considerations for client privacy and confidentiality and the promotion of commerce through access to justice with legal technology.

Our edition this week, tagged ‘The Tech Edition’ highlights some of the highpoints of this event among other topical issues in legal technology. Please read on.

Theodora Kio-Lawson Editor, Legal Business Abayomi Adebanjo, General Counsel, MainOne www.businessday.ng

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Adedoyin Pearse of Siemens @Businessdayng

Thursday 12 March 2020

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BUSINESS DAY

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Tech Edition

s Tech Forum erage for businesses. Tech is not an enabler anymore; it is now a business driver and a great way to scale services to clients.

The speaker on the second panel, Ngozi Aderibigbe in delivering her address noted that access to justice is necessary for commercial development because commerce is built upon contracts. “Contract law drives commerce; having clarity and predictability on how relationships in the course of business should be guided is a key aspect of growing any economy.”

She noted two key challenges that must be addressed for the legal system to be a successful export in AfCTA– delay, as the length of time it takes to conclude any litigation, destroys the commercial basis for instituting the litigation, and cost of

litigation- as this directly affects the SMEs, which are the bedrock of any economy.

John Edokpolo, General Counsel at Microsoft, said technological adoption is a way to increase the efficiency in the court system which translates to cheaper litigation, adjudication and increasing the confidence of investors and startups so they have confidence in the legal system. The legal system can be a strategic pillar for economic development through the use of technology, however, the vision must be at the governmental level.

Collins Onuegbu on his part said there was room for the legal industry to scale due to the size of most law

Olasupo Shasore, SAN

Oyindamola Company Secretary, Heirs Holdings

Frank Aigbogun, Publisher, BusinessDay.

Bidemi Olumide, CEO Taxaide & Partner, AO2 Law

Ngozi Aderibigbe

Tolulope Aderemi, Partner, Perchstone & Graeys

firms.

“If for instance, only 5% are accessing legal services, then the scale of growth is much,” Onuegbu said. However, the legal firms must move fast to scale or lose market share once the AfcftA kicks in.

According to Abi Haruna, the biggest problems with the Nigerian legal industry include Delay, Access and Predictability of Judgment at the court. “We’re working at about 10% efficiency in terms of how many cases which were brought to court that can be handled,” Haruna said.

The panelists further raised questions about how to transform the justice delivery system in Nigeria- from filing to how the decisions are made. They also explored how digitizing the entire value chain could boost GDP and increase Foreign Direct Investment inflow.

During the fireside chat, Olasupo Shasore, SAN, Gbenga Oyebode, MFR and Jan van Weijen explored talent and knowledge management through technology for increased revenue generation. “We have a justice system, but we have huge problems,” said Shasore, who said there was a huge resistance to the solutions to the problems from the users- lawyers, judges and clients in the private sector and also the regulator.

Gbenga Oyebode emphasized that lawyers must remember that legal practice is a business. He added that Nigerian law firms and lawyers can benefit from learning operational techniques from the international law firms, being technology savvy isn’t only about managing the backend but also being prepared for future clients who would be mostly technology companies.

Jan van Weijen noted that a strong benefit of the country is its inventive, industrious, and intelligent people, that a year’s investment in the human capital in educational clusters like Lagos, Benin, Ekiti would lead to a remarkable growth in the digitalization of the legal industry.

Adeleke Alex-Adedipe, Managing Partner, DOA

Collins Onuegbu

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Thursday 12 March 2020

BUSINESS DAY

LegalBusiness Tech Edition INDUSTRYFILE Top 20 Nigerian law firms and company BD

Technology is indeed disrupting the way business is done in most industries. Developments and trends in technology such as big data and analytics, cloud computing, artificial intelligence and machine learning underpin the emergence of tools that significantly impact, and in many cases, radically change the traditional methods for doing business across virtually all business sectors.

In the legal services industry, the last decade has witnessed an explosion in the creation and provision of applications and other technological tools designed specifically to support lawyers in the delivery of their services.

Together with other generic tools that are not specifically designed for the legal services industry, these tools provide opportunities for lawyers to enhance their capabilities in service delivery beyond the limits that were possible with “older” technologies. As part of our initiative to explore key issues facing lawyers and the legal services industry, the Legal Business Unit carried out a survey to determine the extent to which Nigerian law firms leverage new technology in the practice and business of law. This report was published in our February 27th edition.

In this edition, tagged ‘The Tech Edition’, we take a look at 20 law firms, Alternative Legal Service Providers (ALSPs) and Lawtech Solutions Providers who are advancing legal service delivery through the use of technology. Below are our top 20.

1. ACAS-LAW As soon as you walk into the Acas-Law office you immediately get a sense of the emphasis they put on technology. If one uses office modernity as the metric for technological adoption then Acas law would be at the very top of most lists. When we get down to the intricacies we can see that this appearance is not just for show because beneath the sophisticated exterior, there is a robust technological system that streamlines the business and boosts the efficiency of operations.

Acas utilises the increasingly popular combination of Law Pavilion and NextCounsel. In addition to this, they have also incorporated document generation software for a more efficient client delivery system. This software integrates with word processing t

2. AFRICA LAW PRACTICE (ALP) ALP is a highly efficient law firm. Pound for pound you would be hard-pressed to find a law firm that embodies a more modern ethos.

ALP uses a combination of local and international online report databases. They also currently uses NextCounsel in combination with Xerox. One notable use of technology by the firm is through Nextcounsel’s transaction tracking feature. They get the full benefit of this service by linking it to their accounting software. Although human involvement is still required due to the discrepancies that exist in Legal practice, they can generate accurate cost by combining both technological and human data. This feature fosters transparency with the transaction and billing process. Precision in billing across the board in the Nigerian Legal Industry is less than ideal but in observing ALP’s system one could say we are beginning to see the birth pangs of a streamlined and transparent billing system, that is almost completely automated. ALP currently have three dedicated staff members that cater to Tech/Fintech.

3. ALUKO AND OYEBODE Aluko and Oyebode’s use of technology for service delivery is highly commendable. With a back office that is seamlessly aligned with its front office through the use of a case management system, it is easy for the firm’s support services to follow up on billing and tracking of work done by its fee earners.

The firm is currently laying foundations for the adoption of AI for e-invoicing, billing system, case management and client management.

4. A02 LAW/TAXTECH AO2 Law is a Nigerian law firm established to help clients achieve success through practical and innovative legal solutions. They have harnessed digital technology and alternative resourcing models to deliver services more efficiently to their clients, particularly with regards to the provision of tax services, through an affiliate vehicle known as TaxTech® This company pioneered the automation and adoption of technology in automating tax processes in Nigeria. It adopts Unstructured Supplementary Service Data (USSD) for tax inclusion and regulation and deploys mobile applications for tax computation and notification. They have also adopted disruptive ledger technologies such as blockchain for tax asset reconciliation and leveraged on machine learning for data capturing, data analysis and processing.

5. BANWO & IGHODALO Banwo & Ighodalo is one of the largest law firms in Nigeria today, with 12 partners and over 70 lawyers. The firm has been described as “a very efficient law firm”, that is “highly responsive and flexible”. These attributes are clearly indicative of a focus on technology. What stands out to us about this firm is their pragmatic use of technology in achieving their objectives. They do not throw money at all solutions available in the market, despite having the resources to do so. They are one of the few firms that have centralized and digitized all their firm data, thus enabling their lawyers prompt access to firm resources regardless of location.

7. BLOOMFIELD LAW FIRM A recent addition to the Chambers Global ranking was listed as 2020 Corporate Commercial leading law firm. At present they utilize Microsoft 360 as well as other document-sharing software which enables its teams to work in real time.

8. DETAIL SOLICITORS When it comes to digital optimization for service delivery, Detail is a leading firm in this regards. The firm makes use of artificial intelligence (AI) in several areas of its practice management. With optimized solutions, the Detail is able to track and collate billable time spent by its lawyers. With the use of a top solution for data residency, the firm makes good use a repository for all data shared on all active and passive projects, with regards to case management. This is also used to monitor project status. For client management, the firm uses solutions such as Active Campaign to automate some client management processes.

The law firm also utilizes Microsoft Sharepoint and Basecamp, as well as the useof cloud based encryption for warehousing and data management.

9. DUALE OVIA & ALEX-ADEDIPE For this Technology Media & Telecommunications (TMT) law firm, law practice management is efficiently done with the use of modern technology. This is one firm which has used automation to define its service delivery from end to end, with adequate tech support at all levels – including, billing, invoicing, client management and case management.

6. BERGER PAINTS NIGERIA PLC. IN-HOUSE TEAM This in-house team leverages on the use of technology by driving applications for preparation of contracts by all customer interfacing departments with a final review undertaken by the legal unit. To this end, automated contracts are made possible with the market facing units able to undertake the initial drafting by inputting data peculiar to the relevant transaction. The department’s Turnaround Time (TaT) is more efficient for it, as the need to revert to the legal team before consummating transactions has been eliminated.

The Berger in-house team currently utilizes NAV and PFMS for the business automation and performance management functions respectively.

10 GEORGE ETOMI & PARTNERS Set up 35 years ago, George Etomi & Partners, ticks many boxes as a pioneer in the use of technology in the legal industry. This includes the revolutionary adoption and use of electronic diaries, internet/emailing system, web mails, windows, Floppy Discs before its peers.

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LegalBusiness Tech Edition

leveraging technology for service delivery 11. GUINNESS NIGERIA The Diageo in-house team is one of the most innovative in-house departments and is recognised for its innovation use of legal technology to manage in-house operations. Particularly for the way it has deployed technological tools and software in automating in-house functions previously performed manually.

12. JACKSON, ETTI & EDU (JEE) JEE is a full service law firm currently ranked as a 2020 Chambers Global leading law firm in Intellectual Property Law. In addition to automating its backend processes through online legal research and practice management tools, JEE has an optimised portal on its website where clients can log in to check the status of their transactions and cases.

13. JUDY LEGAL The guys at JUDY Legal are vying to become beacons of innovation with their ambitious legal solutions tool. On the journey to achieving this, they have amassed a database consisting of 30,000+ judgments and legislation from Nigeria and Ghana for their legal research solution. This extensive database is funneled through an intuitive U.I system and this further enhanced with adaptability through the incorporation of artificial intelligence and machine learning.

A noteworthy feature of this solution is the implementation of a collaborative research feature which enables two or more lawyers to make highlights on a given passage and share comments in real-time.

JUDY have their sights set on bigger things they don’t seem like the type to rest on their laurels so expect more innovative features from them.

14. LAWPAVILION The LawPavilion Software Solutions is notably one of Nigeria’s leading legal IT Research Tools for Lawyers, Judges and Law firms.

LawPavilion Business Solutions provides cutting edge IT Solutions for the Legal Industry, with products such as LawPavilion Prime, LawPavilion Case Manager (individuals, law firms and banks), LawPavilion Court Manager, LawPavilion Solicitors and Arbitrators’ Toolkit

15. MYLAW.NG Mylaw.Ng is a digital platform that facilitates access to legal services, particularly to MSMEs and individuals. It recognizes that a majority of the Nigerian population are denied access to justice because they are unable to afford the fees charged by traditional law firms. Whilst there are quite a number of other digital platforms that provide affordable legal services, Mylaw is unique because it is co-founded by a senior partner in a traditional law firm and relies on collaborations with traditional law firms to provide its services.

This is very much in line with global trends which are emphasizing digitization and commoditization of legal services as well as collaboration among firms to deliver such services where they are unable to do so individually.

16. NEXT COUNSEL Next Counsel is the first indigenous practice management software tailored for the African legal industry. It offers a good range of solutions which have contributed to increased use of technology by Nigerian firms. Many savvy law firms have adopted their solutions in the last few years for different purposes including, document management, case management, billing and expense management, and report improved efficiencies in both their law firm administration and practice. In particular, Next Counsel solutions, as well as advocacy by the company over the years is helping to change the thinking around data capture, analysis and reporting among law firms. Consequently, more firms are beginning to recognize the need to track important parameters and create visualisations which give insight and aid decision making.

17. OLAJIDE OYEWOLE LLP Olajide Oyewole LLP (“OOLLP”) is a leading business law firm and is the DLA Piper Africa member firm in Nigeria.

DLA Piper, is a global law firm with a network of over 5,000 lawyers cutting across 40 countries. Membership of the network uniquely positions OOLLP to take advantage of legal tech resources available to the group. In particular, OOLLP is able to access the group’s very large legal repositories for research purposes. This process is further optimized by the solutions created by the group -using Azure Cognitive Services- which enable lawyers to find and aggregate data quickly leading to more efficient service delivery.

18. OLANIWUN AJAYI LP The leopard they say, never changes its spots. However, it appears that the law firm, Olaniwun Ajayi LP, didn’t get the memo because after 60 years of it existence, the firm can be described as one which has judiciously evolved with the times.

As one of Nigeria’s largest firms, Olaniwun Ajayi has positioned itself to compete favourably with the top law firms with the procurement of some of the best legal resources, including tech software solutions available in the global market. This unique approach sees them utilising transformational solutions that streamline processes, improve operational efficiencies, shorten WIP to cash and ultimately help them run a better and more profitable business.

Their document managing system enables lawyers to create, manage and collaborate on documents and emails from anywhere on any device. This vision doesn’t end with the tools they procure, O&A has created an agile culture among their workforce and this is reinforced through frequent staff training and software sensitisation.

19. PERCHSTONE & GRAEYS Perchstone & Graeys, a leading commercial law Firm, delivering services in arbitration, oil and gas, banking and finance, capital market, tax, litigation, amongst others. The firm utilises Fee Guard, a project management software that manages client instruction from receipt to finish. With this, they are able to assign teams to instructions, and value the time spent on the instruction. The team lead and partner is also able to assess how much time each associate has spent on assigned tasks, and by the end of each week is able to adequately assess the performance of the team, and if the brief was fulfilled profitably based on team efficiency. They also utilise real-time document sharing software and online subscription platforms for research.

20. THE NEW PRACTICE (TNP) TNP is a commercially oriented law firm with a global outlook and a vibrant team of business savvy lawyers. In 2019, it became an Anderson collaborating firm. TNP prides itself as having a culture of innovation and we think this is evident in their approach to leveraging technology. For this firm, optimizing technology in legal practice has not been about having a large technology budget or causing major technological disruptions but rather has been about consistency in using readily available tools to achieve efficiencies in client service delivery. For them, every element involved in delivering engagements is important; from the hardware that is used to the mindset of the lawyers.

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Thursday 12 March 2020

BUSINESS DAY

LEGALTECHHUB

BD

LegalBusiness Tech Edition

How to be a tech-savvy lawyer Bolakale Mallick

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eing a tech-savvy lawyer goes beyond being able to operate a computer or any other gadget. Since technology is a tool to make our lives easier, a tech-savvy lawyer must be able to combine available tech tools for maximum productivity.

Contrary to popular reasoning, you don’t need expensive software to be tech-savvy; all you need is the ability to use what you have to achieve your goals.

We can make this article all about advanced tools such as transactional analytic tools or advanced due diligence tools that are barely customizable, expensive and may not deliver as much as you would want them to. But, how about using readily available tools to create your own solutions? For example, combining Microsoft Excel and Microsoft Teams to conduct due diligence easily? We discuss this and other tips below.

Productivity Daily tasks of a lawyer may be boring and routine-like but it gets more boring and frustrating where a counter party edits a voluminous document without tracking their changes or leaving comments. Gosh! How do you expect me to read through hundreds of pages just to hand-pick recent changes? But this is where the sad news ends.

Microsoft Word has a feature called “Compare”. Just like the name, compare allows you compare different versions of the same document without having to manually read through them.

This feature, which comes bundled with Microsoft Word, shows you the changes in the document within seconds. This saves a lot of time spent in reviewing documents. Compare can be located under the Review tab of the Microsoft Word Application.

Another useful feature of Microsoft Word is “Read-Aloud”.

Your colleague may not be around to help you look through a document but Read-Aloud can help you know whether you make sense. Once you click on the Read-Aloud icon, Microsoft Word reads the document to you.

The “Idea” feature in Word 2018 is yet another feature that can help with a lawyer’s productivity. It not only corrects grammatical errors but is also able to ensure that your content is gender and politically inclusive. It can read a document and suggest more suitable ways of drafting to eliminate the use of passive words or sentences.

Yet another tool that helps me eliminate spelling errors is Grammarly. It is built with artificial intelligence technology, and just like Idea in Word, Grammarly is able to read and understand the

context of a write-up and help to correct the use of sentences as well as words.

Collaboration Most people are familiar with collaboration software like Slack, however very few people are aware of a great tool called Microsoft Teams which comes bundled with Microsoft Office365.

Microsoft Teams is the new Microsoft tool that helps to foster collaboration and manage projects amongst team members.

Various members of a team are able to work easily on the same document, invite guest users from outside their network and also track workflows and projects all within the same application. It also integrates well with all other Microsoft Tools. The features of Teams make it an ideal tool for legal engagements such as Due Diligence. Lawyers can upload checklists created in Excel directly to the platform and share same with other team members. Also, input and review of due diligence reports can be carried out almost simultaneously by various team members. Teams also come with a tele-video conferencing tool.

Agreement Precedents, Drafting and Review It can get really stressful when you have to draft boiler plate terms in an agreement, or where your client has requested an agreement in an area you are not so familiar with. Precedent books are good to have in this regard, but they are not as productive as electronic tools like Onecle or Business in a Box (BIB). With Onecle, you can easily download an editable template and redraft it to suit your purpose within a very short time.

Tools like Law Repository deploy artificial intelligence algorithms to help you generate agreements within minutes. You can use the tool to generate a standard-type agreement and subsequently amend it to suit your purpose.

On a slightly different note, Thought River is another great tool that can be deployed by

transactional lawyers to speed up agreement reviews. The software is able to analyze contract documents, answer pre-loaded questions, give you a summary of the obligations of a Party and help you insert standard type comments.

This software would do the work of a first level associate and all you have to do is revise the suggestions and comments and send back to the counterparty within the shortest time possible. Donna is another great tool that solicitors can easily integrate as an add-in to their Microsoft Word application to assist them with Agreement drafting and review within the shortest possible time. The best thing about these tools is that they can be integrated with your Microsoft Word so you can use them within your favourite text editor.

Search Engine Optimisation (SEO) Increasingly, lawyers rely on search engines in the course of their work. Advanced searches help to ensure efficient, time –saving searches. Simple tricks such as adding quotation marks to a word or phrase, ensures that only materials with those words are brought up. Also, where you need to exclude a word, place a minus sign (-) in front of the word that you don’t want. Conversely, you may place a plus sign (+) in front of words that you need the search engine to focus on.

Lawyers also need their web content to be easily located by their target audience. Search engines use artificial intelligence algorithms to match keywords with a user’s search word for the best results. It therefore means that your content must contain as many keywords as necessary to be able to match your content with a user’s search. Lawyers can leverage on search engine optimization (SEO) tools like “WebTextTool” (renamed to Textmetrics) to help them analyse written content and suggest words that will give their content priority on Google search as well as other search engines. Textmetrics can

also be integrated with Microsoft Word as an add-in to make suggestions on making your content search engine friendly and finding the best keywords for your posts.

Creativity It is not too surprising that Lawyers avoid design and creativity in their presentations. But what is the essence of having a presentation that is not presentable?

Many lawyers bore their audiences with so much text, that it becomes difficult to remember anything on their slides. Thankfully, a new feature that comes packaged with PowerPoint allows you generate creative ideas for your slides without having to design them by yourself. When you create the headings and body of your presentation using the template textbox in PowerPoint, the “Idea” feature, using artificial intelligence has the ability to suggest artwork to complement the information on the slide. It also has the ability to recommend alternatives to images you may have chosen, and arrange both image and text in a more presentable form. Using this tool, you are able to spend less time designing your presentation and focus more on delivering quality content.

A picture they say is worth a thousand words. This is why lawyers must evolve from the traditional way of communicating through writing to communicating through designs. To give you a head start at designing something really cool, you may use online software like Canva. This software is built to help you get started with your designs in minutes. It has inbuilt templates in different sizes that will readily fit into any social media post area. Using the simple drag and drop function, you can select a background, add images and choose a text font that suites your design. You can even animate your design with ease and without prior knowledge of animation. Canva is available on both web and mobile devices and will save you a lot of the money

that would otherwise be paid to a graphics designer.. Get up to speed with putting out that great law idea of yours today in a more memorable way.

Utility Sometimes, work can be so much that you start to feel like hiring a personal assistant. But when you consider your monthly pay, you might have a second thought. If you can’t afford to hire a personal assistant, it might be helpful to have an electronic assistant at least. Personally, I use tools like AnyDo, Trello or Asana to organize my day to day tasks, keep to-do lists, and also stay tuned to my schedule.

Alternatively, you may want to try Google Assistant on the android phone or Siri on an iPhone.

They are great assistants and can help you set tasks, reminders and alarms etc. With voice command activated, you can request phone calls, send text messages, translate languages, get directions, manage shopping lists, get updates on financial markets or any topic of interest. They can also take as well as read notes, texts or even emails to you. You can organize more with assistants and the best thing about them is that they come bundled with your phone’s or computer’s operating system (Siri), so you don’t have to pay extra money.

Mallick is an innovative lawyer with combined experience in Law and Information and Communications Technology (ICT). Having worked as a computer engineer for four (4) years, he applies himself to creating value in Nigeria’s ICT sector through innovative and extra-legal solutions. Mallick blends his computer engineering skills with his experience as a legal practitioner to provide bespoke legal advice to the firm’s technology clients. He specialises in FinTech, blockchain, artificial intelligence, cybersecurity, data protection, intellectual property, and technology law in general. He is currently rounding up his LL.M program in Cyberlaw.

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BUSINESS DAY

LEGAL BUSINESSTECH SURVEY

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LegalBusiness Tech Edition

Digitisation and accessible databases Excerpts from our recent report based on our survey and findings on the use(s) of technology in the Nigerian legal services industry; and some of the key insights and deductions from our findings.

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hese findings indicate very wide divergence in law firm practices on digitisation and storage of digital data. The range of practices is illustrated by our findings on three firms discussed below.

The first, a leading firm with about 10 partners and 80 associates implemented a one-time massive digitisation initiative, scanning print documents into machine readable form and collating digital documents to create an office wide information system, which all staff could access for research purposes. The firm undertook perhaps the most extensive digitisation effort amongst the firms that we surveyed. However the benefits of digitisation were not fully realised, possible because the scanned documents were not machine readable, or the technology powering the search engine may not have been optimal. Staff are frequently unable to optimise their searches using keywords and phrases and frequently have to resort to reading individual documents to find relevant information, causing significant loss of time Another challenge highlighted by a partner in the firm was the inconsistency in updating digitised data since the initial digitisation exercise.

The second firm was similarly sized as the first and is similarly positioned in the Nigerian legal services market. But there had been no attempt to digitise the firm’s data or resources, or to store them in a manner that would be centrally available.

Lawyers kept their own documents or work products, and all related data. This made research quite onerous as lawyers were essentially limited to only the data/ resources they had individually accumulated over time . If they needed to conduct research on areas that other colleagues had worked on, they would have to ask around, leading to a significant loss of time and efficiency.

The third firm, much smaller than the other two, had fully digistised its resources and continues to make updates. Digitised documents are uploaded unto Microsoft OneDrive. This enabled lawyers to undertake advanced searches because of the underlying technology. Some lawyers in the firm also used plugins that enabled them to optimise searches, generating quicker and more accurate search results.

The clear take away is that Nigerian law firms are only just beginning to understand the potential for exploiting their data and so there are still significant efficiency gaps in their efforts so far.

Contract drafting Technology in contract drafting used to be about leveraging

digital templates (compact discs or web resources).- These were merely sample contracts that lawyers could use as a guide in contract drafting. With developments in technology, web-based contract drafting tools began to include add-on features that aided drafting and generally made the process more efficient.

Examples are drafting assistants that identify errors to ensure a better draft. These tools are also integrated with other tools such as reference books, files or other information and questionnaires that enable users to build their own contracts, thereby reducing steps in the drafting process and leading to significant efficiency savings.

Surprising, whilst all our respondents relied on internet based tools in one form or another for drafting contracts, none of them, not even the 30% using paid subscription drafting software, indicated that they utilised the automation capabilities of the tools that they subscribed to. It is also interesting to note that a significant proportion of the respondents that used paid subscription software also used free templates found from simple google searches. and did not seem to find a substantial difference in the benefits that they derived from these tools.

One noteworthy point is that in conversations regarding automation in contract drafting, several respondents referred to local Nigerian “lawtech” firms that provided automated contract services online to clients at significantly lower rates than the traditional Nigerian law firm would typically charge. Some also commented that automated contracts were increasingly being used by in-house counsel, eliminating the need in many instances for

external counsel. None of the interviewees indicated that their firms had begun to offer their clients the option of automated contracts as is happening in other jurisdictions.

Legal Practice management Electronic legal practice management tools have existed for a long time. Initially, these were primarily stand-alone billing and time tracking tools. Over time and with advances in technology, dedicated legal practice management software have emerged. These now offer firms integrated and intuitive solutions that capture the major aspects of a law-firm’s day to day processes. Common features of many legal practice management software include case management, contact and client relationship management, document management, document assembly, calendaring, time tracking, billing, accounting and payroll solutions. The advantage of integrating these features is that is enables firms to better use, manage, consolidate, share and protect information while also tracking their business processes.

About 50% of the firms that we spoke to have attempted to implement integrated electronic practice management tools.

More than 40% of our total sample size used or had attempted to use indigenous software which provided multiple functions and aided integration. The local software providers also offered customisation to suit the needs of various firms. However, a significant number of respondents in this category stated that their firms had encountered problems which eventually led them to abandon the software. The problems ranged from software glitches -which led to inaccurate

results, to difficulty in using the software. Many respondents did not find the local offerings to be user friendly, and had difficulties integrating the applications that they were already using to these software tools. Some respondents also noted the challenges involved in ensuring continuous digitisation and the effect that this had on the accuracy of the results from the software tools.

A small percentage (about 12%) of the firms that we surveyed adopted a different route to integrated practice management.

These firms use generic software that are not specifically dedicated to law firm management, such as Microsoft Office 365 . Their position is that it is an easier and more cost-efficient way to implement practice management as they are able to integrate seamlessly with other Microsoft applications that they already use. They were able to save documents directly to cloud-based storage and to have access from multiple locations, whilst being assured of adequate protection. They also spoke of the various collaborative options that Microsoft Office provided and stated that to use other software would be a duplication of resources. In their view, most of the features contained in the locally available software were already available for “free” in the Microsoft applications.

Legal Transaction Management Legal transactions can be complex and often evolve in a manner that can seem chaotic. In many transactions, there are countless paper documents, revisions, and signatures to review, negotiate, and track. These often include many mundane administrative tasks as well as back and forth between all the parties involved.

These days, legal transaction management software that automate the most tedious parts of managing deals are available.

They provide transaction-specific analytics and reports, enable legal teams and clients to collaborate on documents and automate -signature collection and archive transaction-related information to create digital “closing books” in a secure and trusted environment.

None of our respondents used software that enabled them automate workflows involved in legal transactions. However, a small number used software such as Microsoft’s SharePoint that enabled collaboration among their legal team and resulted in significant time savings. Teams were able to create sites to share documents and information with colleagues, which enabled collaborative real time editing and allowed everyone on the team to stay up to date and coordinate their efforts on a project regardless of location.

Key Insights Our survey clearly indicates that there are wide variations in the manner in which law firms and practitioners leverage technology in their practice of law. Whilst the survey does not present an exhaustive picture of the ways in which practitioners use technology for law practice, we are able to draw some key insights from their responses.

Much of emerging technology is already embedded in everyday tools that lawyers use Providers of technology solutions - both generic and dedicated legal tech tools are constantly using the latest technological innovations to enhance and refine their products. For example, Microsoft 365’s suite of offerings are infused with AI capabilities that users can leverage. Developments in emerging technology have led to improvements in the offerings of Nigerian legal tech provider, LawPavilion.

Law firms currently use technology primarily to enhance internal processes Our survey indicates that our respondents leverage technology primarily for the purpose of saving time and enhancing efficiency.

Whilst this is generally one of the key objectives for investing in technology in any industry, tech use has grown beyond this level.

Most industries, including the legal services industry in other jurisdictions, now leverage technology for service delivery.

• To be continued next week LINDA ARIFAYAN, a researcher and analyst, is a member of the Legal Business team at BusinessDay.

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Thursday 12 March 2020

BUSINESS DAY

TECHINSIGHT

Dispute Surveys: 3D drone mapping and GIS analysis as an indispensable tool Ikechukwu Onuoma Esq.

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echnological advancement in the field of aerodynamics has triggered the invention of drones. Drone mapping is the use of drones to carry out precise 3-dimensional mapping of areas (especially areas in dispute or areas that are inaccessible) that could be used in preparing a dispute survey plan. A dispute survey plan is a pictorial representation of the land in dispute with reference to features and boundaries of the land based on a chosen scale and specific measurements. Images and other information acquired by the drone are analyzed and presented as a dispute survey plan using a Geographic Information System (GIS) software.

When preparing a dispute or litigation survey plan, the surveyor knows it is essential to show features that will fortify the evidence.

These features could be old existing features or real time captured features. In most cases superimposing or charting of one feature over another by the surveyor is highly recommended. This is done in order to establish a proper relationship in his evidence as presented in a litigation survey plan. This could be achieved to a

very sound accuracy by employing drones to capture the aerial view of the land in dispute. Thereafter, a critical analysis and representation of the information acquired are accomplished using a GIS platform.

In most land dispute cases for the safety of the surveyor, it might not be best interest to physically carry out surveys and measurements on ground. Especially if the surveyor is not accompanied by security operatives but he could adhere to remotely acquire information about the land through

drone mapping. Drone mapping is built on the integration of Global Positioning System (GPS) and 3D aerial drone capture to produce a digital boundary map (includes also digital elevation model, tree canopy height model, contours etc.) referenced to a geographic coordinate and drawn to scale, employing a sound cartographic skill. This is usually done by surveyors trained on drone piloting and GIS analysis. The use of drones for mapping removes the risk of physical assault on the surveyor and his team members

while they are conducting their surveys on ground.

During the course of land dispute cases, dispute survey plans are admissible in court as evidence with respect to the identity and features of a land. A piece of land is usually identified by natural features, conventional features, boundary beacons etc.

These natural features include rivers, mountains, hills, grasslands, ditches, trees, center of roads and other physical features like a market grave yard maybe conventional. Quite a few parcels of land under contention have their property survey plans prepared earlier. 3D digital map acquired in real-time by a drone plays a vital role in representing all these features, subsequently the features are plotted by a surveyor and drafted into a survey plan. However, as Surveyor Edward Ejiofor Ezeanaka rightly puts it: “At times, there may be features of evidential importance whose minuet size may not be captured or identified by a drone. Then ideally a proper ground truthing must be done to represent these key features in the survey plan”. When there are features that cannot not be capture by the drone, the surveyor is required to make an extra effort to capture these small details and represent

them accordingly in the dispute survey plan.

In most dispute survey plans, the third dimensional attributes and contours are rarely represented. They could be an immeasurable attribute if rightly presented in the litigation survey plans. Survey beacons serve as a boundary indicator and has a penal effect if tampered with.

To this effect if the third dimensional attribute (orthometric height value or contour value) is attached to these beacons in the litigation survey plan, it could serve as a plus to validate the position of the survey beacons whenever it has been fiddled with. Following the reasoning that boundary beacons could be moved off from its original position but the actual topography of land is always maintained. It will be to a greater advantage if topographic survey plans are incorporated as one of the registrable land instrument for acquisition of certificate of occupancy and certificate of ownership. What else could form a better representation of the landed property than an actual replica of its topography on paper?

Ikechukwu Onuoma Esq. is the Managing Partner, Obra Legal

AwaRDS & Recognition

Legal Business Tech Awards & Recognition

A fundamental part of the Legal Business Tech Forum was the recognition of law firms and organisations for their use of technology to drive legal services, as well as their contributions to the development of technology in the legal industry.

The GUINNESS NIGERIA In-House Legal team was recognised as the most innovative in-house Department 2020 for its innovation in the use of legal technology in managing in-house operations. Particularly for deploying technological tools and software in automating in-house functions previously performed manually. www.businessday.ng

GEORGE ETOMI AND PARTNERS (GEP) received the Pioneer Award for Legal Tech in Nigeria for being one of the foremost commercial law firms, quick to adopt the use of technology in its practice 35 years ago.

NEXT COUNSEL was recognised as software solutions provider of the year, due to its ability to drive the use of technology in the industry. Amongst other outstanding qualities, Next Counsel led the development and deployment of practice management tools by several Nigerian law firms. https://www.facebook.com/businessdayng

OLANIWUN & AJAYI LP for Excellence in Cyber Security and Information Security for the year, 2020. This was in recognition of the firm’s consistency in deploying top of the range cyber and information security measures in protecting proprietary data and client information.

BusinessDay also recognised DETAIL SOLICITORS as the Most Innovative Law Firm 2020 for leveraging legal technology tools in the business of law. Particularly for their unique approach in utilising Artificial Intelligence (AI) components of general enterprise solutions to create efficiencies in legal practice. @Businessdayng

Thursday 12 March 2020

BUSINESS DAY

Corporate Social Impact

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Onuwa Lucky Joseph (08023314782) Editor.

Still On The International Women’s Day:

Women’s rise in the Workplace and the headlong collision with children’s rights Onuwa Lucky Joseph

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here’s no way to write on this topic without coming across as some clueless retro sapien. The Hermescloaked daggers and swords look sure to come out to deal some damage. But let’s do it anyhow.

Even though cigarette ads are now no longer run in the media, not even on social media, we can’t forget the ground breaking Virginia Slims ads of the 60s, 70s, 80s and 90s, created by the legendary Leo Burnet Agency: “You’ve come a long way, baby”, they cheered. And the sentiment caught on like wildfire because this was at the incipient and therefore most radical stage of the feminist movement. Caution was regularly thrown to the wind as women gave bear hug after bear hug to the new culture of equality which saw them coming into their own, out from the many years of freezing cold when they existed literally as appendages of the menfolk.

‘Burn the bra!’ is one of the lasting legends of that era, although the original organisers of the event where this was supposed to have happened have come out repeatedly to debunk the ‘myth’. One of the organisers, Ms. Robin Morgan says the protest was against a Miss America pageant in New Jersey where some freshly minted feminists had come out to object against not only the physical criteria for picking a Miss America, but also to register their displeasure at the racist nature of the pageant, it never producing any lady who was not white and in good health. However, though they aver it never really happened, the symbolism of bra burning as a symbol of protest against the millennia of women lockdown by male dominated society is so strong that it has remained a lasting meme of the 60s feminist movement.

So, while we are not here talking cigarettes, we must say that the women of the world have come a long way. And seeing as not all women are comfortable with the word ‘Baby’, - it’s been interpreted as denigrating to their struggle – we won’t use it here again. Women have come a long way! Period. From being perceived as mere receptacles for The Man’s seed to populate the earth; from being the eternal subject lorded over by The Man; from being the stay at home Mom who sweated every detail,

Funke Okpeke

Stella Okoli, CEO Emzor Pharmaceuticals

physical, mental and emotional to keep the home together; from being the one who waited on The Man, who was there to help meet every whim of his; from being the ones at offices and bureaucracies who, according to Ms Morgan, ‘made the coffee, but not policy’, women have come a mighty long way .

There have been great strides since those heady days, not all of them acceptable to the menfolk being routinely displaced from prized perches some of them had cornered forever only on account of their gender and race or gender alone. We have seen women upstage men on different stages. True, this is billed more as a collaboration than as a competition, but you don’t take over someone else’s platform by appealing only to the commonsense of The Man who considers the stage his bully pulpit.

Some things goeth not without a fight. And this, men understand intrinsically. Women, increasingly, are not shy about turning on the aggressiveness in order to get what they believe has been denied them for aeons.

In many parts of the world today, female children grow up believing, knowing, in fact, that they can be anything. Anything, including president or prime minister or queen. Slay queens yet abound, of course, but you’d www.businessday.ng

be stunned to see the many who only use that as their preferred route to being Lady Boss. In looking to occupy the topmost perch in the land, there are now, globally, many role models to look up to. In 1960, Sirimavo Bandaranaike became the Prime Minister of Sri Lanka. Yes, Sri Lanka was, still is 3rd world and a conservative society, but that didn’t prevent it from blazing the trail, which India quickly trod with its election of Indira Gandhi as Prime Minister in 1966. And then, in 1969, came Golda Meir in Israel.

Isabel Peron (who started her professional life as a dancer), succeeded her husband Juan Domingo Peron in 1974 as president of Argentina. The ‘developed’ world didn’t get on the charts until 1979 with the emergence of Margaret ‘Iron Lady’ Thatcher in the UK and Maria de Lourdes Pintasilgo in Portugal.

Although Africa registered its own bona fides in 2006 via the election of Ellen Johnson Sirleaf, there had been other titular heads of state in Africa before then, namely Sylvie Kinigi in Burundi, 1993; Agathe Uwilingiyimana in Rwanda, also in 1993, and Mame Madior Boye, of Senegal in 2001. And since Sirleaf, there’s been Joyce Banda who was first Vice President and then

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President of Malawi from 2012 to 2014. Another titular head was Cissé Mariam Kaïdama Sidibé of Mali in 2011, while 2015 saw the emergence of Ameenah Firdaus Gurib-Fakim in Mauritania and Saara Kuugongelwa-Amadhila in Namibia. Nigeria? Someday.

The Nigerian corporate sector however has icons aplenty, beginning with names like the late grand dame herself, Bola Kuforiji-Olubi. She has been succeeded by the likes of Folorunsho Alakija, Amy Jadesinmi of Lagos Deep Shore Logistics (LADOL), Funke Okpeke of Main One, Mo Abudu of EbonyLife TV, Ibukun Awosika, first female chairman of First Bank Plc; Stella Okoli of Emzor Pharmaceuticals, Tara Fela-Durotoye, and many others.

It’s been a lot of progress for women in the corporate and other sectors but has it been a corresponding good for their children? So far, the human species can only repopulate itself via the instrumentality of women.

Not just to give birth, but to nurture. And in both categories, a significant number of women are deciding otherwise. More women are getting married later or not at all, and more women are deciding never to have children. It’s so bad in the developed world that in Japan, Russia and Germany for instance, government is cooking up incentives to encourage more women to give birth and also to set up homes.

But the nurture part is the more critical. With women now as absent as the men from the home, who brings up the kids?

Teachers? Peers? Social Media?

Nature abhors a vacuum. Someone or something else will take the place of the woman who is now busy pursuing self actualisation goals than generational goals. Even though men may not actively say it, they always appreciated that role that devolved to women. While they were out ex@Businessdayng

hibiting machismo and bringing in the goods, the women stayed steadfast to the business of raising a new generation of people.

It was they who taught kids the ways of the clan, of their people.

Rain or shine, war or drought, they were always at their duty post doing their bit to ensure the new generation was adequately equipped to face the world as they grew into adulthood.

The great arbiter in this matter now happens to be the corporate organisations, which for reasons of sustainability of the species, must look for innovative ways to adjust the growing domestic disequilibrium. It falls on the private sector, especially, even as they ensure the rise of women within their systems, to ensure that our women, (who still tend to be largely traditional and conservative in their mindset), do not leave their children unattended. Our fathers might not be a lost cause, and some of them have rightly picked up the gauntlet with regards to looking after the kids, but that process is a long drawn one that won’t attain critical mass for a while yet.

Ultimately, society, even at a time of massive disruption needs some stability that helps keep cherished traditions going.

The opportunity cost of women spending an inordinate amount of time in the office is too gargantuan to grasp. The loss, while not showing on the company bottom-line will surely register on society’s P&L Statement, the losses growing every quarter.

So we cannot but ask that more companies come up with more female friendly and family friendly policies. Equality must still distinguish between our natural differences and the roles we play in society. Longer maternity leave for women. (Paternity leave helps too). Creches in offices. Flexibility that ensures women can do school runs.

Clearly, a woman who knows her kids are safe will be far more productive. Allow married women or single mothers close one hour earlier. Hey, they got another big job to do at home.

And, yes, this is where the clash with the feminists might arise as they insist on doing everything just the way the men do it. It’s a debate for another day, but suffice to say that no two fights are fought in the same way and no two fighters come to a fight with the same fight strategy. Women must harness their competitive advantage in a wy that benefits all..

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Thursday 12 March 2020

BUSINESS DAY

Corporate Social Impact

How corporate Nigeria is making women advancement its business Onuwa Lucky Joseph

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igerian women are, like their counterparts in other parts of the world, making their mark in the corporate sector. What is quite remarkable is how the sector quickly caught on to the potential of gender diversity with women playing stronger as customers but even more as valued staff and leaders helping take their different companies to greater heights.

According to The Center for Creative Leadership, “previous research shows that Fortune 500 companies with the highest representation of women on boards financially outperform companies with the lowest representation of women on boards. Moreover, gender-diverse teams have higher sales and profits compared to male-dominated teams, and a recent Gallup study found that gender-diverse business units have higher average revenue than less diverse business units”.

Maybe Nigerian corporates are aware of a variant of the above study, or maybe they just know that business involving women tend to be good business.

We here profile 3 companies in different sectors and their philosophy cum approach towards empowering their female staff, female customers and female stakeholders.

The Coca Cola Company Coca Cola has always believed in gender diversity, and our company has made commitments to the advancement and empowerment of women.

The Coca Cola Company believes there is no better investment than in women to spur economic growth and foster sustainable development. Women are pillars of the communities where we operate, they are critical to local and global business success.

Women are critical not only to the success of the Coca Cola System, but also to the continued success of our economies and our world.

Emeka Emuwa, CEO Union Bank

The Company efforts have resulted in significant progress: Women represent 30% of senior leadership roles compared to 19% in 2018 and this is a journey towards 50/50 gender parity.

We have invested over $10.8bn along with our partners on the safe birth initiative targeted at safe motherhood, thereby reducing maternal mortality to ensure a better world.

Our 5by20 efforts have impacted and uplifted 4.6million women entrepreneurs across the globe, out of which 400,000 are Nigerian women.

A road to economically empowering 5million by end of 2020. Investing in women builds strong businesses, communities and families.

Union Bank Plc Union Bank has achieved 50/50 gender balance with its Management Trainee programme and

Amaka Onyemelukwe, Manager, Public Affairs, Sustainability & Communications, The Coca Cola Company

Jane and Emeka Maduegbuna, Co-Founders of Afrinolly.

expects to attain a fully balanced employee workforce in a few years.

Union Bank’s Women Empowerment Hub (Wehub) was established in 2016 as a platform to motivate, connect and provide support to its women through mentoring, training and networking opportunities.

The We Hub community has continued to enable success for Union Bank women across the country.

In 2019, Union Bank reiterated its commitment to women by awarding 40 scholarships to women entrepreneurs to build their capacity through the Enterprise & Leadership Program (ELP) organised by China Europe International Business School (CEIBS) in partnership with Leading Ladies Africa.

The Bank also established an innovation hub for women from low-income communities in partnership with MamaMoni Empowerment Foundation. The first set of 60 women recently graduated from the scheme, empowered with life skills to establish and run their own businesses.

As part of CSR activities and Union Bank’s commitment to SDG 2 (reducing hunger) and SDG 5 (gender equality), the Bank partnered with Gartner Callaway Sustainability Company Ltd. to train and empower 50 women in urban farming. In 2018, Union Bank held a training day for the women to teach them about managing their finances as well as accessing funds

for their businesses. At the end of the two-week training, the women were given grow bags to assist them in growing lettuce and kale for sale.

International Women’s Day Quotes “Well-behaved women rarely make history.”

– Eleanor Roosevelt

“Where there is a woman, there is magic.”

Afrinolly Limited Afrinolly Limited has always harbored a soft spot towards Womenin-Business or Budding Female Entrepreneurs. From the onset, we’ve gone out of our way to encourage and make room for them to spread their wings and soar.

At Afrinolly, we’ve developed various ways of partner and encouraging these entrepreneurs, by finding way to lessen the burden, by supporting their laudable projects, either by way of providing them with Free Spaces for their projects and sometimes accompanied by Meals.

Another means we’ve deployed is also by making our equipment available to them and recently, by availing them the opportunity to for improve on their skills through our Partnerships outside the shores of Africa.

For example, we partnered with Niyi Akinmolayan, a very passionate film maker whose wife is an award winning Editor. This decided him to train more female editors as his way of helping give Female Budding Editors a fair representation within the creative industry.

We partnered with him by availing him with a really conducive space for the training and meals for the

ladies in training for the duration of that project.

We as well partnered with our darling Bolanle Banwo, founder of The Female Designer Movement, TDM and Geneza Design School to provide training space, until she could now host and train her female design enthusiasts at her Geneza Design School location.

We’ve been known to provide screening spaces for Filmmakers just to encourage their film projects. One of those was Tope Oshin’s documentary on Amaka Igwe titled “Amaka’s Kin - The Women of Nollywood”.

There’s also our partnership with Facebook group leaders; Louisa Ekwy, Igweze Michael of Natural Hair Babes group and Natural Hair Ville. Here’s another equally strong amazing group of female members, just seeking a place to gather and share knowledge and skills. We obliged them to make it happen.

At Afrinolly, we’ve also gone out of our way to support female entrepreneurs – who haven’t all been from the Filmmaking strand, but we’ve partnered with Strong Women from across the spectrum of the Creative sector.

All we watch out for is a sense the passion, commitment to your cause, backed up with a level of Preparedness; we just add our little push to help you reach that goal.

(As told by Jane Maduegbuna, CEO, Afrinolly)

“Life is tough, my darling, but so are you.”

–Stephanie Bennett-Henry

“Women are the “A strong woman looks a challenge largest untapped in the eye and gives it a wink.” reservoir of talent –Gina Carey – Ntozake Shange in the world.”

–Hillary Clinton (Kindly send feedback to 08023314782 / csrmomentum@gmail.com)

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@Businessdayng

Thursday 12 March 2020

BUSINESS DAY

Live @ The Exchanges Stock market rout persists on Nigerian Bourse amid oil, covid-19 shocks ...over N400bn lost again Iheanyi Nwachukwu

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he rout in Nigeria stock market continued on Wednesday March 11 as investors feared growing uncertainties in both global and local economies.

The domestic market remained volatile in the face of uncertainties around global crude oil prices, the Coronavirus (covid-19). Also, speculations around the possible devaluation of the local currency continue to make stocks unappealing to investors.

Oil prices fell on Wednesday, giving up earlier gains, after Saudi Aramco said it had been directed by the energy ministry to raise its production capacity by a million barrels per day.

Saudi Arabia intensified the oil price war by ordering

its state-owned producer, to raise the maximum production rate to record highs of 13m barrels a day.

Brent crude slid $1.20, or 3.2%, to trade at $36.01 per barrel, while U.S. West Texas Intermediate crude dropped $1.12, or 3.2%, to $33.24.

As at 2:30pm on Wednesday, Nigeria’s listed stocks shed over N425billion, an implication that investors are still not willing to take up this Naira assets. Nestle Nigeria Plc led the basket of losers after its share price decreased from N1017 to N915.3, losing N101.7 or 10percent, followed by that of Dangote Cement Plc which decreased from N170 to N153, losing N17 or 10percent. Unilever Nigeria Plc rallied most, from N10.6 to N11.65, losing N1.05 or 9.91percent, while UBA Plc rose from N5.65 to N6.2, adding 55kobo or 9.73percent.

Ahead of Wednesday’s outcome, FBNQuest research analysts had expected the bearish stance to persist on the nation’s bourse. Though, they added that bargain hunting may give the market support in coming session.

As at the sound of closing gong on the Bourse, the Nigerian Stock Exchange (NSE) All Share Index (ASI) decreased by 3.35percent from preceding trading day high of 24, 388.66 points to 23,572.75 points. The value of listed stocks decreased from N12.709trillion to N12.284trillion. The market has decreased by -10.30percent this week, -10.08percent this month, and -12.18percent this year In 7,150 deals, equity investors exchanged 1.391billion units valued at N17.647billion. Zenith, GTBank, FBNH, UBA, and Wapic Insurance were actively traded stocks on the Bourse.

L-R: Isyaku Tilde, acting executive commissioner, Operations, Securities and Exchange Commission; Mary Uduk, acting director general SEC and Daisy Ekine, chairperson, Market Wide Technical Committee on Commodity Trading Ecosystem during briefing on International Conference on Nigeria Commodities Market 2020 in Abuja.

SEC advocates structured commodities market

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he Securities and Exchange Commission (SEC) has advocated for a more structured commodities market that will provide a fair playing field for local market participants, while providing the required infrastructure for the international market to be exposed to Nigerian commodities.

Mary Uduk, acting Director General of the SEC stated this during a briefing on the forthcoming International Conference on Nigeria Commodities Market held in Abuja. She recognised and applauded the

Federal Government’s actions in diversifying the Nigerian economy and moving us away from an overreliance on one commodity. A structured market for commodities she said, will also provide price discovery to market participants – producers and consumers alike – leading to efficiency and better decision making.

The SEC Boss said the three existing commodities exchanges in Nigeria backed by robust public participation from key stakeholders notably financiers, donors, public stakeholders’/ government officials, and inter-

national commodity exchanges as well as the larger Nigerian retail investment community can unlock a vast amount of capital in the short to medium term.

According to her, the capital market has the capacity to unlock better access to credit and finance for the sector through innovative financing structures and products.

“This is also true for Nigeria’s abundant minerals, especially the solid ones. Many of these minerals are presently dug up on a subsistence basis and sold in markets around the world in disorderly fashion.

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Thursday 12 March 2020

BUSINESS DAY

INSIGHT Olajumoke Adenowo wins Forbes Woman Africa Entrepreneur Award 2020 STEPHEN ONYEKWELU

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orbes Africa, a sub-tittle of the New-Jerseybased American business magazine has named Olajumoke Adenowo, one of Nigeria’s finest female architects as the winner of Forbes Woman Africa Entrepreneur Award for 2020. She also made the list of Africa’s 50 Most Powerful Women.

The American magazine announced this on March 6, at a Gala Dinner and Awards ceremony which took place in Durban, KwaZulu-Natal, South Africa.

The Forbes Woman Africa Entrepreneur Award recognises remarkable women across the African continent making a significant impact on their immediate communities. Recognising Adenowo validates her entrepreneurial spirit.

In 1994, Adenowo founded AD Consulting, an architecture firm that specialises in Master Planning of ecosensitive developments. The firm has won many international awards.

“This is validating, encouraging, and an affirmation of the fact that one can do things right and be celebrated. I stand on the shoulders of African female entrepreneurs who are committed to serving their families, communities, and the continent. Those who strive daily to optimise their potential against all odds,” Adenowo said.

The Forbes’ award winner said her parents forgot to teach her that being a woman was a “disability.”

This permitted her to venture into the world oblivious of her supposed disadvantage and simply expressed her gifting.

“My mother is a professor of Sociology, and as a child just watching her contribute value as she travelled the globe and handled her affairs competently gave me permission to aspire,” she said.

Adenowo is a multiple award-winning architect with over three decades of industry experience.

She started her career at the Femi Majekodunmi Associates, where she had the privilege of designing the Federal Ministry of Finance Headquarters in Abuja, and in 1994 founded her own architecture firm.

Described as Africa’s

Awards and accolades Here are some of the awards and accolades Adenowo has won over the years.

Rare Gems Award (awarded by the Women’s Optimum Development Foundation and the United Nations Information Centre) 2007, International Alliance for Women World of Difference 100 Award (2012), Best Commercial Designer at IDEA Awards (2012), Best Public Service Architecture at the International Property Awards (2013), Best Mixed-Use Architecture at African Property Awards (2013), Best Interior Architect at IDEA Awards (2013), Ekiti State Merit Awards (2014), Best Institutional Architect at IDEA Awards (2014), One of 100 Most Inspiring Women in Nigeria by YNaija (2014), One of the 10 Most Powerful Business Women in Africa by AFK Insider (2015), One of the Most Inspirational Women in Architecture today by Royal Institute of British Architects (RIBA) 2018, The New African Woman in Business Award (London, 2016), Lifetime Achievement Award by the Soroptimist International (2017), One of 100 Most Innovative Female Owned Businesses in Nigeria by 100 Women (2018), Africa’s Most Inspiring Business Woman by Africa Economic Builders (Abidjan Cote D’Ivoire (2018), Great Ife Distinguished Alumni Award (London, 2018), 2019 Leadership Award by the Constituency for Africa (Washington, DC), Art and Culture without Borders Award (Morocco, 2020), Forbes Woman Africa Entrepreneur Award 2020, Recognised as one of Africa’s 50 most powerful women by Forbes Woman Africa.

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‘starchitect’ and trailblazer by some international media houses, she is one of Africa’s most outstanding architects. She has also been named the Face of Architecture in Nigeria by a local national newspaper. she has been featured in the world’s foremost architectural journal, Architectural Record and in Forbes Women and Fortune magazine.

She is an alumna of a number of prestigious institutions including the Harvard Kennedy School of Government, Yale School of Management, IESE Business School, amongst others. She is a member of the Institute of Chartered Arbitrators (UK) and a Fellow of the Nigerian Institute of Architects.

Alongside 50 other African women such as Obiageli Ezekwesili, former Minister of Education in Nigeria and former Vice president Africa of the World Bank, Adenowo made Forbes list of Africa’s 50 Most Powerful Women.

This is a first-of-its-kind Pan-African unranked compilation of the continent’s leading women, drawn from business, politics, media, science, sports and public life, who are challenging the status quo and creating a trail on terrain where there was none. They are reshaping history, closing inequalities and pioneering new avenues of wealth creation and in turn, lifting others with them.

Folorunso Alakija, executive vice chair, Famfa Oil, @Businessdayng

Ibukun Awosika, founder and CEO The Chair Centre Group, Chimamanda Ngozi Adichie, author and public, and Ngozi Okonjo-Iweala, chair board of the Global Alliance for Vaccine and Immunisation were among some Nigerian women who made the list.

Olajumoke gained admission into Obafemi Awolowo University IleIfe at the age of fourteen, and she acquired the first distinction in Master of Science in Architecture in the University’s history.

In 1999, Olajumoke’s passion for raising transformational leaders led her to establish the faith based philanthropy, Awesome T re a s u re s Fou n d at i o n , recognised by the United Nations and affiliated to the Edmond De Rothschild foundation family Philanthropy Platform. Awesome Treasures Foundation is established on three continents w ith initiatives impacting millions.

Adenowo is a speaker of note at summits and conferences, and has spoken at several global platforms, including the Global Women’s Forum, Harvard Business School’s Africa Business Club, Cambridge University’s African Society, and SOLVE MIT’s flagship Conference for Global Thought Leaders and Innovators. Since 2011, she hosts her own syndicated radio program, Voice of Change on Leadership.

Thursday 12 March 2020

BUSINESS DAY

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Thursday 12 March 2020

BUSINESS DAY

news No respite for investors as stocks slump...

L-R: Dafe Akpeneye, commissioner, legal, licensing and compliance, Nigerian Electricity Regulatory Commission (NERC); Sanusi Garba, vice chairman, NERC, and Moses Arigu, commissioner, consumer affairs, NERC, during the public hearing on application for extraordinary tariff review pursuant to NERC regulations on the procedure for Electricity Tariff Review and (Business Rules of the Commission) Regulation held in Abuja, yesterday.

Pic by Tunde Adeniyi

Continued from page 1

in the day.

Nigeria to unveil fiscal, monetary plan to...

Continued from page 1

and spreads uncertainty.

Nigeria relies on earnings from oil for more than 90 percent of its export revenue.

The plunge in oil is piling pressure on Nigeria to devalue the naira as dwindling export revenue depletes foreign-exchange reserves, curbing the central bank’s ability to support the currency.

Reserves have fallen by 20 percent in the past two years to the lowest since November 2017, and may soon reach the psychologically important $30 billion mark.

Mele Kyari, group managing director (GMD) of Nigerian National Petroleum Corporation (NNPC), on Wednesday painted a gloomy picture of tougher times ahead for the Nigerian economy on the back of latest developments in the global oil market which have seen markets tumble amid fears of a potential global recession.

Kyari said there were over 12 stranded Nigeria LNG cargoes globally, which has never happened before, because of the collapse in oil and gas demand associated potentially and significantly with the coronavirus.

Liquid crude is also badly hit, Kyari said, adding that “today, Nigeria has some 50 cargoes of crude that have not found landing”.

“This means that the traders do not know where to take these products to.

That’s a huge problem and can be tolerated by some production environment like Saudi Arabia whose average production cost is about $4-$5 per barrel. This cannot happen in Nigeria,” Kyari said.

Nigeria’s average cost of production per barrel averages $30, according to Kyari.

“So prepare for trouble

for three months. Even if the price goes back to $58, you will have a backlog of production to clear,” he said.

The oil price shock due to the coronavirus came as a great surprise to the Nigerian government and the impact has put significant strain on the budget and the currency, Finance Minister Zainab Ahmed said at the roundtable.

The government may have to adjust its 2020 budget, which was based on a crude price of $57 a barrel, she said last week.

Nigeria’s budget is based on a crude oil price projection of $57 a barrel and targeted oil earnings of N2.64 trillion ($7.9 billion).

“These very strong headwinds are a wake-up call for us to look toward life without oil,” Ahmed said. “This is the right time for government to take measures.”

The International Monetary Fund (IMF) has cut its projection for Nigeria’s 2020 economic growth to 2 percent from 2.5 percent due to plunging oil prices stemming from the coronavirus outbreak.

Analysts say an already faltering Nigerian economy may balk under further pressure following the collapse in oil prices because the government has dithered for years to mount the bold economic reforms that Nigeria needs.

The oil price collapse may also quickly turn into a severe foreign currency crisis for Nigeria where panic buying of the dollar becomes very pronounced, with local banks on Wednesday quoting the greenback at N390 for offshore traders.

A planned Eurobond by Nigeria now looks increasingly unlikely at this time because of the higher cost.

A leading US bank says although the bond offer is still possible, Nigeria may www.businessday.ng

have to pay as much as 3 percent more to lure wary investors.

Africa’s richest man, Aliko Dangote, said at the roundtable that with the low oil price, it was imperative that the Nigerian economy is diversified.

“And it can only happen through agriculture and manufacturing which create a lot of jobs, middle class, and also transform countries,” Dangote said.

He said for the country to achieve this, there was need to embark massively on backward integration or import substitution.

Dangote said the structure of the Nigerian economy today was not sustainable for a population of 200 million and a population growth rate of about 2.7 percent, coupled with the fact that the country imports most of what it consumes.

He urged more people to delve into manufacturing and government to provide the enabling environment.

“We need to reduce cost of doing business. Government has lost so much money in the Apapa logjam.

In fact, three companies lost over N30bn in terms of profit.

“We need to look at infrastructure, power, because that is what will propel the SMEs,” he said.

Dangote recommended three things for efficient diversification to happen, including low interest rate, long-term funds, and support by the CBN in terms of making foreign exchange available for people to import plant and machinery.

Speaking on the muchawaited Dangote refinery, he said Nigeria would become the largest exporter of petroleum products in Africa by the time it is completed early next year.

He also announced that for the first time, Nigeria would, this year, become the largest exporter of fertiliser in sub-Saharan Africa.

Meanwhile, the battle for control of the global oil market intensified again on Wednesday as Saudi Arabia promised to increase production capacity and the United Arab Emirates said it plans to pump as much as possible next month.

Riyadh said it would boost capacity to an unprecedented 13 million barrels a day, doubling down on Tuesday’s pledge of extra output in April. The UAE, a close Saudi ally, then promised to push more oil to customers than it can produce.

Brent crude for May delivery was down 3 percent to $36 a barrel as at 11:30am Eastern Time.

The moves come after an alliance between the OPEC cartel, effectively headed by the Gulf nations, and Russia collapsed last week. Russia, for its part, has announced that it would retaliate by activating additional supplies of its own.

The Saudi energy ministry, headed by Prince Mohammed’s half-brother, ordered Saudi Aramco to boost its output capacity by 1 million barrels a day, the first increase in at least a decade.

Saudi Arabia’s plan “isn’t the best option” in the current market, Russian Energy Minister Alexander Novak told reporters in Moscow.

Abu Dhabi National Oil Co. will supply 4 million barrels a day of crude to customers in April, it said on Wednesday. That would mean adding more than 1 million barrels a day to what the UAE pumped in February. The country’s output capacity is 3.5 million barrels a day, according to the International Energy Agency.

Saudi Arabia and its allies are also slashing prices for their oil in an attempt to push out Russian crude and secure market share.

Iraq and Kuwait followed Aramco in cutting rates to customers all over the world.

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However, 18 stocks were up in the day, the highest number of gainers since the start of trading this week, while the insurance index gained out of five other major sectoral indices tracked by BusinessDay. Brent reversed gains in the day after initially crossing $39 per barrel as Russia indicated its door was open to Saudi Arabia and OPEC+ amid rifts between the big oil producers over production cuts.

But for Nigeria, the concerns have become multi-layered as oil below the country’s budget benchmark and the Central Bank of Nigeria’s preferred minimum has caused panic in the market with foreign investors fleeing and Nigerians swapping naira for dollars amid fears of a currency devaluation.

Banks on Wednesday quoted a dollar at N390 amid a surge in demand while traders on the black market were unable to meet demand.

Already, President Muhammadu Buhari has asked both the monetary and fiscal heads to meet alongside key officials to assess the impact of the coronavirus and oil decline on the economy.

Finance Minister Zainab Ahmed has indicated that the budget could be revised downwards. Analysts say it is the much-needed capital expenditure that would suffer.

Meanwhile, the IMF has downgraded Nigeria’s 2020 growth to 2 percent, a slowdown from 2019’s 2.27 percent

– even IMF’s revision had come before oil price plunged by the most since 1991.

But investors are not jumping into the fixed income space, said Ologunro. “They are adopting a wait-and-see approach to see if the government would borrow locally or internationally as current budget deficit worsens on oil downturn.”

On the shorter segment of the yield curve, investors bid 13.2X, 2X, and 2.6X the amount offered by the CBN across the 91-day, 182-day and 364-day each in Wednesday’s NTB Primary Market Auction.

The CBN had sought to raise as much as N86.3bn in the auction that saw rates dip across all tenors.

The 364-day bill closed lower at 5.3 percent from a previous level of 5.7 percent while 91-day and 182-day fell to 2.49 percent and 3.78 percent from 3 percent and 4 percent each.

The naira depreciated by 1.4 percent to NGN367.00/ USD in the parallel market and by 0.4 percent to NGN366.71/ USD at the I&E FX window, according to analysts at Cordros Securities.

Cordros noted that trading in the NTB secondary market was quiet as investors shifted focus towards the NTB PMA. However, average yield expanded in the OMO secondary market by 34bps to 15.2 percent as foreign investors continued to sell off short-dated instruments 3.00 percent, 3.78 percent (previously 4.00 percent), and 5.30 percent (previously 5.70 percent), the analysts said.

High cost oil producers like Nigeria to suffer...

Continued from page 2

in Abuja on Wednesday, Abba Kyari, group managing director, Nigerian National Petroleum Corporation (NNPC), said when your cost of production averages $30 and crude oil goes to $30-$32, “you are already out of business”.

Independents like Seplat are more efficient in managing costs and are able to be more resilient to periods of depressed oil prices. Seplat said operating costs per unit of production reduced 3 percent year-on-year in its 2018 financials to $5.77d per boe as a result of continued efforts to improve operational efficiency, helped by increased production.

This is not the same for the International Oil Companies (IOCs) which account for the bulk of Nigeria’s oil production.

Analysts say the IOCs tag on crude production per barrel, too many costs including redundancies, political risks, and insecurity to arrive at a higher cost of production which significantly impacts Nigeria’s earnings from its crude.

Kyari in his speech on Wednesday highlighted some other troubling details in the ongoing price war. Not only are prices crashing, producers are offering discounts of up to $5 in the case of Iraq and $8 in @Businessdayng

the case of Saudi Arabia.

“So when your crude oil sells at $30 and you are dropping it by $8, this means that you are selling at $22 in the market,” Kyari said.

Already, the NNPC boss said traders report over 50 unsold cargoes as the novel coronavirus depresses oil demand, worsening a bad situation.

The Federal Government has responded by setting up a committee but the United States seems to offer a more practical response. It is considering buying over 78 million barrels to shore up its strategic reserves and lift oil prices.

North American shale oil producers are gutting spending and drilling cuts to cope with the price war unleashed

by Saudi Arabia in response to Russia’s decision last Thursday to abandon a pact that has helped prop up prices.

Analysts say the Federal Government should recognise that a stable fiscal and regulatory environment inures producers against shocks in oil markets.

“Yes, there are other factors that are important including the quality of the crude and the terrain but without political risks, stability and rule of law, the costs significantly go up,” said Oni.

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Policy Options Before FG Policies Nigeria can adopt to withstand current economic turbulence An unexpected plunge in oil price by most since 1991 on Monday forced an emergency meeting of Nigeria’s fiscal and monetary authorities, who are expected to decide on best tools to avert a crisis. President Muhammadu Buhari ordered a high-level committee to look into the potential risk posed to Nigeria both by the coronavirus and the oil price war between Saudi Arabia and Russia. Ahead of the committee’s announcement, here are possible options it could consider for Nigeria, write ENDURANCE OKAFOR & SEGUN ADAMS. FISCAL POLICIES

MONETARY POLICIES

What analysts say

Petroleum Subsidy Removal

Naira devaluation

s one of the possible fiscal adjustments to check effects of the coronavirus outbreak and oil price decline on the economy, Nigeria can move for removal of the petroleum subsidy to free up resources for more expedient use (like financing projects) and ease perennial fiscal deficits that have prompted more borrowings by the government.

According to NNPC data, the government spent N730.9 billion in 2018 on what it called “under-recovery”, a euphemism for subsidy. This is higher compared to the budget of the Ministry of Education for that year (N651 billion), Ministry of Health (N356 billion), Ministry of Transportation (N267 billion), and Ministry of Agriculture and Rural Development (N203 billion).

Even though the government claimed it budgeted N350bn for petrol subsidies in 2019, N462.09bn had been spent in the first nine months of the year, according to NNPC data.

emoving the peg on the naira which would allow the FX market to determine its exchange rate could be one of the measures to keep Nigeria immune from the shock from crude price.

This could save CBN the funds it has been using to stabilise the local currency against the dollar and thus reduce depletion of the reserves.

The value of the naira dropped by more than 2 percent against the dollar on Wednesday as fear of a possible devaluation amid the price war led to a surge in demand for the US currency.

With two currency devaluation under his belt, CBN Godwin Emefiele said naira devaluation would only happen when the crude price drops below $45/barrel. A barrel of crude oil dropped to $30 on Monday on the price war between Russia and Saudi Arabia.

Economists have projected that the apex bank may be forced to leave the market to determine the exchange rate when reserves get some more heat from the declining oil price.

The reserve which has maintained downward trend in the last eight months worsened by a 49 percent decline from $37.73 billion the week earlier to N37.23 billion as of 13th February 2020, data by the CBN show.

A devaluation of the exchange rate will make exports more competitive and appear cheaper to foreigners which will mean that imports, such as petrol, food and raw materials will become more expensive. This will reduce the demand for imports. With exports more competitive and imports more expensive, Nigeria which is an import economy will likely see higher exports and lower imports.

Nigeria recorded a trade deficit of N579.06 billion in the fourth quarter of 2019, the first negative balance since 2016, as compiled from the data by the National Bureau of Statistics (NBS).

Andrew S. Nevin, partner/chief economist, PwC

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Higher Eurobond issuance Another option for the government might be tapping the international debt market for higher dollar-debt borrowings than it has planned for 2020 as a way to boost holdings of the greenback in reserve.

The government already seeks to raise $3.3bn in Eurobonds to paper over budget cracks.

However, the cost of such borrowing might be higher since international rating agencies like Moody’s and S&P have downgraded Nigeria’s creditworthiness.

Tax cut The fiscal authorities can lower the tax rate as a way of stimulating the economy to mitigate the impact of the coronavirus on growth.

Specifically, the government could cut the company income tax rate to create headroom for growth of firms and provide similar tax incentives to support business environment.

Similarly, fiscal authorities can also mimic a nominal devaluation of the exchange rate by increasing taxes on imports and reducing them on exports.

This would serve to ensure a favourable balance of payment and boost dollar receipt.

Budgetary adjustments to reduce wastages Another option for Nigeria would be to review the 2020 budget to cut off unnecessary costs and re-prioritise needs.

For instance, in the 2020 budget, personnel cost for MDAs alone stood at N2.83trn compared to an aggregate capital expenditure of N2.78trn.

Efficiently running the government and its agencies will reduce budget deficit and there would be less pressure to borrow.

‘

It’s important to state that economic managers have messed up by not preparing for this downturn. We had good five years to prepare, so any attempt to build some resistance now could be inadequate which means the inevitable is unavoidable

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Hike in MPR Raising the Monetary Policy Rate (MPR) from the current 13.5 percent could be one of the key decisions the central bank may want to consider at a time when the naira is losing its grip against the dollar.

Higher interest rates tend to attract foreign investment, increasing the demand for and value of a currency like naira.

Conversely, lower interest rates tend to be unattractive for foreign investment and decrease the currency’s relative value.

The total value of capital importation into Nigeria stood at $3.8billion in the fourth quarter of 2019. This represents a decline of 32.42 percent when compared to the third quarter of 2019.

Also, higher interest rates tend to reduce inflationary pressures and cause an appreciation in the exchange rate.

The fear of a further spike in inflation rate forced the CBN to undertake a moderate tightening stance at the first monetary policy of 2020, leading to the raising of banks’ cash reserve ratio (CRR) by 500 basis point, from 22.5 percent to a new level of 27.5 percent.

Nigeria’s inflation rate jumped to 21 month-high in January 2020 at 12.13 percent.

While the Monetary Policy Committee (MPC) is due to hold its next meeting on March 23, 2020, the central bank may consider holding an emergency meeting in order to counter the economic fallout of the coronavirus outbreak.

Capital control In 2015, the CBN started restricting FX for the importation of certain items that can be produced in Nigeria. That initiative has in some way reduced the pressure on the demand for dollar for importation purposes.

Even though that may come at a cost, the central bank may also want to consider adding some items that have alternative sources in Nigeria to the more than 42 items that have been restricted from accessing dollar.

Economists define capital control as a residency-based measure such as transaction taxes, limitation to FX, or outright prohibitions that a nation’s government can use to regulate flows from capital markets into and out of the country’s capital account.

CBN should limit government financing The central bank of Nigeria may want to consider limiting its finance to the Federal Government in order to save enough in the national purse to enable it to bear the money needs of the country.

As at the end of August 2019, the CBN had financed the Federal Government to the tune of N4.4 trillion, according to official data.

The apex bank continues to act as a piggy bank to a struggling sovereign while turning a blind eye to the economic consequence.

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ith Coronavirus and oil shock arriving at the same time, Nigeria is suddenly in a very difficult situation. There are no easy answers and the FG and CBN are facing some very hard and very urgent decisions about the economy.

Ayorinde Akinloye, a consumer goods analyst at Lagos-based CSL Stockbrokers It’s important to state that economic managers have messed up by not preparing for this downturn. We had good five years to prepare, so any attempt to build some resistance now could be inadequate which means the inevitable is unavoidable.

But as to what they can do now: Proper management of FX is important to prevent unnecessary scarcity. The federal government must work on fiscal stimulus for key sectors that may be affected in the event of widespread COVID-19 virus as well as possible devaluation.

Some of the fiscal stimulus could be lower taxes, selective credit schemes etc. But I strongly doubt they would consider fiscal stimulus as the federal government is heavily concerned about its own revenue than what happens to the private economy.

Obinna Uzoma, chief economist at EUA Intelligence Monetary policy 1. Devalue the currency to reduce the depletion of the reserves 2. Raise MPR to 15 percent to attract FPIs 3. Reduce LDR to 60 percent to allow banks stop creating more risk assets 4. Increase liquidity ratio to 35-40 percent to allow banks hold more cash in case there are significantly higher customer withdrawals 5. Fund AMCON to be able to buy some bad debts from Banks in the event of a widespread default in loans Fiscal policy 1. Raise up to N5trn to fund the deficit due to oil price crash 2. Scale back budget to have an actual spending of around N8trn 3. Increase allocation to health by at least N100b to combat covid-19 4. Improve tax collection to ensure stronger revenue 5. Use Tbill borrowings to support FAAC allocations.

This will ensure everyone gets a salary and job loss is contained Paul Uzuma, MD, Halo Nigeria Capital Ltd

Diversify the economy from crude oil export oriented economy. Tilt the economy to a private sector driven economy by reducing government involvement in economic/business activities, fiscal discipline (stop the persistent and reckless budget deficits), promote the inflow of FPI and FDI which can help with autonomous supply of forex. On the monetary policy side, as a short term palliative measure, the CBN could introduce 1 year 2 year forward contracts on USD, to give comfort to FPIs and private equity firms. @Businessdayng

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Thursday 12 March 2020

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Page Financials pledges supports for the arts What falling oil price could mean for Nigeria real estate investors, market

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tech-based consumer finance company, Page Financials, has pledged its support for the promotion of arts and culture in Nigeria. This is in line with its vision to drive increased awareness of the country’s local talents.

In a remark at a private viewing opening of the stage play titled ‘AREMU’, a showcase of the historical legacy of former President Olusegun Obasanjo in Abeokuta on Wednesday, the CEO of Page Financials, Segun Akintemi, reinforced the need to document historical references of our heritage as evident in the play about the lives and times of the former president.

According to Akintemi, “In the seventh year of our operations, it is time to show support for an industry that has shown tremendous growth in the same period that we have been in operations.

We commend the commitment of the giants in the inclusive industry from film to music and

fashion, and to stage plays, which has suddenly come alive to the benefit of the Nigerian populace.

“It is our hope that we would as a nation begin to document and showcase a lot more of our culture, tradition and politics through its representation on stage.”

He commended Joseph Edgar, the producer of the play and its crew, and assured him of their shared belief in the nurturing and development of talent within the arts, which has a potential to employ graduates and nongraduates in line with economic developmental goals with the added benefit of reducing unemployment in the long run by empowering the arts to its full potential.

The private viewing was hosted by the former President Obasanjo, with the governor of Ogun State, Dapo Abiodun, members of his cabinet and distinguished Nigerians from all works of life.

CHUKA UROKO

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umbling global oil prices occasioned by the coronavirus outbreak have been escalated by the Saudi Arabia/Russia price tussle, with projections that oil price could find a floor at $20 per barrel.

Even though Brent crude price edged up by 8.56 percent to $37.30 as at 6:15pm on Tuesday, the impact of the continued fall in prices would be severe on the economy of oil-dependent Nigeria, according to analysts, and real estate is one of the sectors that would be badly hit.

“The looming oil price war will definitely affect the real estate market in terms of transaction.

There will be a drastic reduction in all transactions. No investor is expected to invest in this economy,” said Frank Okosun, senior partner/CEO, Knight Frank Nigeria.

The real estate sector, particularly the office space and

residential segments of the sector, are already down with over-supply and high vacancy rates.

Of the 45,000 square metres of office space completed year-todate, only 20,000 square metres were taken up as at the second half of 2019, leaving the market with over 40 percent vacancy rate, according to a recent viewpoint on the property market by Broll Property Services Nigeria.

Incidentally, the top occupiers of these two segments are oil and gas and tech industries, meaning that demand and market transactions will drop considerably, affecting both the investors and the market.

Okosun, whose company is the world’s largest independent residential and commercial property consultancy, had in an earlier interview submitted that if Nigeria’s 2020 budget was well implemented, it would impact positively on the real estate sector because of the economic activities that would

follow and the real estate products that would be needed.

But in the circumstance, he does not foresee anybody looking for Grade A office space because there will be no dollar for rent. He hopes, however, that there will be demand for affordable office space for rent.

“The situation is such that anybody going to do any development now will be killing himself because nobody will be willing to buy, especially Ikoyi development where dollar may be needed,” he told BusinessDay on phone.

The challenge for both the market and space suppliers currently is that ongoing projects have to be completed and delivered to the market.

Available data show that as many as 130,000 square metres of new office space will be coming into the market in 2020 and that 20 percent of these deliveries will be ready by the first quarter of the year.

Both Trinity Towers and Famfa Oil Tower will be contributing significantly to these deliveries.

Whereas Trinity Towers will be bringing over 13,000 square metres quality real estate to the market, Famfa Oil Tower, a 20-floor Grade A office building, will be delivering 55,000 square metres.

Analysts are of the view that the delivery of 130,000 square metres into this market means the market will be over-saturated while investors will have more competitions to face, more concessions to give to prospective and existing tenants, and also more vacancy rate and higher maintenance cost to contend with.

Nnenna Alintah, head, Property Intel, Nigeria, said occupier requirements remained fairly unchanged in the market in the second half of 2019, with the top factors driving building selection (besides costs) being location, security, building efficiency, HSE features, and onsite amenities.

FHAN charts path for impact as Credit Direct’s Ademosu emerges president SEGUN ADAMS

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inance Houses Association of Nigeria (FHAN) will enhance the capabilities of its members and work closely with its regulator to boost its presence within the financial services sector, the body’s new president said at its annual general meeting in Lagos, Tuesday.

Akinwande Ademosu, CEO of Credit Direct and the newly elected president of FHAN, said repositioning the association would result in larger gains for the economy because finance houses are uniquely positioned to reach SMEs and the financially excluded.

“The relevance of the association has not been well established so we have to build an ecosystem, considering our contributions to the financial services sector,” said Ademosu, who disclosed that around 21 finance houses have joined the industry since 2019.

To increase impact, FHAN said it would focus on repositioning the association through rebranding

and image building, improving its relevance, as well as building and improving on existing systems and structures by empowering members.

The association added that it would embark on more purposeful regulator’s engagement with the Central Bank of Nigeria (CBN) and consider a partnership with other financial Institution’s Councils or bodies.

FHAN at its AGM noted improvements in its financial performance between 2017 and 2018 full-year where income hit an all-time high of N16.9 million.

The association which is made up of non-bank financial institutions also said it seeks greater regulation by the CBN on the activities of non-bank financial services operators outside its umbrella in a bid to improve trust and financial discipline in the industry.

According to FHAN, the corporative license issued at states level for around N15,000 is beclouding the influence of the sector because the operators are not regulated.

YABATECH partners Ford Foundation, wins $100,000 grant Mark Mayah, Lagos

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igeria’s oldest institution of higher learning, Yaba College of Technology (YABATECH), has been awarded a $100,000 Ford Foundation Project Grant for the development of the college Art Museum Project.

The project, which will incorporate advocacy against sexual harassment (SH) and Gender Based Violence (GBV), will be handled and supervised by the institution’s Grant Research Team.

The team, BusinessDay learns, is made up of A. A. Abiodun, a chief lecturer in the department of Chemical Science, Funmilayo Doherty, a principal lecturer in the department of Biological Science, and Odun Orimolade, a principal lecturer in the department of Fine Art. The trio wrote and package the proposal that won the grant for the college.

Paul Nwulu, a senior programme officer of the Ford Foundation, at the flag off of the project, said the partnership between YABATECH and Ford Foundation was that of progress and develop-

ment.

Nwulu enjoined the institution to make judicious usage of the grant, adding: ‘’Ford Foundation is at all times available if the need arises in other areas of attention.

“We are committed at improving infrastructures as well as human development in any institutions of higher learning that meet our requirements.’’

The rector, YABATECH, Obafemi Omokungbe, who was full of praises, commended Ford Foundation for the grant and assured Nwulu that the college management would support the project from the beginning to completion.

According to Omokungbe, the gesture by the Ford Foundation ‘’is worth emulating by other well-meaning Foundations and agencies across the globe. ‘’ He therefore enjoined those trusted with the project to make YABATECH proud by putting in their best in seeing to the completion of the project in good time.

The project is under the monitoring of Dabaseki Mac-Ikemenjima and the grant manager of the Ford Foundation office of West Africa, Joy Ehinor - Esezebor. www.businessday.ng

L-R: Jide Balogun, chief executive officer, Primrose Development Company Limited; Henry Egbeki, regional managing partner, West Africa, Ernst & Young (EY); Bolaji Balogun, chairman, Lafarge Africa plc, receiving the Lifetime Achievement Award on behalf of Olasubomi Balogun, founder of FCMB Group, and Obafemi Hamzat, deputy governor, Lagos State, during the EY Entrepreneur of the Year 2020 West Africa Awards, held in Lagos.

NIMASA hopeful on disbursement of Agric reforms: Japan constructs, equips N26m rice mill in Edo CVFF by end of 2020 AMAKA ANAGOR-EWUZIE

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igerian Maritime Administration and Safety Agency (NIMASA) has again assured ship owners and the entire maritime community of its commitment to commence the disbursement of over $200 million accumulated in the Cabotage Vessel Financing Fund (CVFF).

The CVFF was established alongside the Nigerian Coastal and Inland Shipping (Cabotage) Act of 2003, to empower indigenous ship owners to take control of the nation’s coastal and inland shipping business, otherwise known as Cabotage trade.

Sadly, 17 years after, the Federal Government is yet to apply the over $200 million accumulated in the fund into the acquisition of vessels, the real reason for setting it up.

Dakuku Peterside, immediate past director-general of NIMASA, gave the assurance in Lagos on Tuesday while presenting his valedictory speech prior to his handover of leadership mantle to the new executive management of NIMASA led by Bashir Jamoh, immediate past executive director, finance and administration.

Peterside, whose four-year tenure in NIMASA expired March

10, 2020, without renewal, said the agency would commence the disbursement of the fund toward the end of the year if the National Assembly gives the agency its consent to do so.

While thanking President Muhammadu Buhari and Chibuike Amaechi, minister of transportation, for the opportunity given him to serve Nigeria in the maritime industry, he disclosed that the agency under his leadership was able to put solid foundation in place for the disbursement of the CVFF fund.

He disclosed that in few weeks, NIMASA would be the first maritime administration in West and Central Africa to be ISO 2015:9001 certified.

According to Peterside, the agency has also reached an advanced stage in domesticating six new International Maritime Organisation (IMO) Conventions, and to also review both the Merchant Shipping Act 2007 and NIMASA Act 2007.

He said the agency under his care had also developed an integrated roadmap for the reform and repositioning of the Nigerian Ship Registration Office while the ship registry was currently being modernised to increase Nigerian tonnage.

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oves by the Edo State governor, G odw in Obaseki to sustain food security and create wealth for farmers in the state have received a major boost, as the Japanese government has donated a rice mill worth over N26 million to the state government as part of efforts to facilitate rice production in the state.

Addressing journalists during a courtesy visit to the governor at the Government House in Benin City, for the commissioning and hand-over ceremony, the Japanese Ambassador to Nigeria, Yutaka Kikuta, commended the achievements of the Governor Godwin Obaseki-led administration in the agriculture sector.

Recall that in the 2019 farming season, rice farmers in different settlements across Edo State recorded bumper harvest in farms cultivated in partnership with the state government.

Kikuta noted that the Japanese Government funded project titled, “The Project for Construction of Rice Mill at Ugbekpe-Ekperi Community of Etsako Local Government Area” would further enhance farmers’ income and foster socio-economic development of communities in Edo State.

He said the project, worth over N26 million ($85,523), would @Businessdayng

provide rice parboiling building, parboiling equipment, hauler, dehusker, destoner machine, soaking tanks, steaming tanks, a generator, and bagging machine, among others.

The ambassador said, “The use of the facilities will enhance the quality and marketability of milled rice in this community and nearby communities, thereby enhancing the income of rice farmers as well as fostering the social and economic development of these communities in particular and Edo State.”

He said the gesture was among the Japanese Embassy’s grassroots grant assistance to increase the quality of rice production in Edo State, noting that the Japanese Government has also signed exchange of note for the project to increase the diagnostic capacity of Nigeria Centre for Disease Control (NCDC) to fight against infectious diseases.

Kikuta said the Japanese government would continue to support the state government in other areas.

The representative of Edo State governor and Secretary to the State Government, Osarodion Ogie, reassured that the Obaseki-led administration would provide the needed assistance to ensure the success of the project.

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news

7.5% VAT will not affect old contracts - FG

SEC pushes for trading of agric produce, solid minerals in capital market

... declares ASUU strike illegal ... as FEC approves N13.9bn for pest, animal disease control

Cynthia Egboboh, Abuja

Tony Ailemen, Abuja

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ederal Government on Wednesday said the 7.5% Value Added Tax (VAT) will not apply to contracts awarded before February 2020, affective date for the take-off of the new VAT policy.

This clarification was part of the outcome of the Federal Executive Council (FEC) meeting presided over by President Muhammadu Buhari, Wednesday.

This is as government also declared the current warning strike embarked upon by members of the Academic Staff Union of Universities (ASUU) over disagreements with the Integrated Personnel Payroll Information System (IPPIS), as illegal.

Minister of labour and employment, Chris Ngige, while briefing State House correspondents after the FEC meeting, berated ASUU for embarking on the strike after it agreed to work with the Federal Government to check corruption and leakage in salary payments.

Ngige said going by the International Labour Organisation (ILO), Convention, ASUU was supposed to give notice to the government before embarking on strike.

“They didn’t give us the mandatory notice before they started the strike, so this strike is illegal. No employee is permitted to dictate to the employer, it is in the ILO Convention,” Ngige said.

He explained that the bone of contention was the IPPIS, which the Federal Government had introduced to curb corruption as well as fish out ghost workers in the system.

The minister said ASUU agreed with the government that leakages and corruption should be tackled, but had said that they have peculiarities that had made them not to embrace the IPPIS. He said it would amount to corruption for the university

teachers not to teach the students but expect to be paid within the period they were on strike, adding that the government would invoke “no work, no pay” policy.

He, however, said the union had men of integrity and that they would see reason why the IPPIS policy was necessary.

Works and housing minister, Babatunde Fashola, disclosed that the 15-kilometre 9th Mile to Enugu Road contract had been re-awarded to the Reynold Construction Company (RCC) at the revised cost of N29.4 billion after it was redesigned due to its difficult terrain.

“Of course, the 9th Mile section, as you might know, is a very tricky, difficult area; very steep, dangerous, a point of many accidents before, so we have to change design and do a lot of other alterations in quality to ensure now that we manage, not only the erosion there, but that very good work is done.

“So Council approved that in favour of Messrs RCC for the sum of N29.4 billion. It’s rolled into the existing contract, which I think was for 24 months.

Agriculture and Rural Development Minister, Sabo Nanono, said his Ministry got approval to spend N13.9b on pest control, animal diseases like rabies, lungs and liver diseases as well as Quella birds, especially in the Northeastern part of the country.

“There are 12 frontline states that are being affected by Quella birds, grasshoppers and those that have been pestering us.

“The prevalence of rabies in the country has risen quite substantially, in fact in some cases we have recorded some deaths. The Federal Government has taken serious look at it and has approved intervention fund of about N13.9 billion for this.

“The other is the issue of our ministerial briefing, which we briefed them on what we have been doing so far and what will be our target, but the focus on all these rest on four things”.

NDIC seeks AANI’s collaboration to enhance financial inclusion HOPE MOSES-ASHIKE

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he Nigeria Deposit Insurance Corporation (NDIC) has called for close partnership and collaboration with Alumni Association of the National Institute (AANI) for the rapid economic development of Nigeria.

Umaru Ibrahim, managing director/CEO, NDIC, made the statement while receiving the Alumni Association of the Institute that paid him a courtesy visit at the Corporation head office in Abuja on Tuesday. He said the Corporation was established in 1989 to promote public confidence in the banking industry, contribute to the stability of the financial system, as well as ensure an orderly resolution of failed financial institutions.

The NDIC’s CEO disclosed that presently about 40% of Nigerians were either financial excluded or operate outside the formal financial system, and therefore urged the Association to partner the Corporation to accelerate the pace of financial literacy and financial inclusion among the Nigerian public.

He disclosed that the Corporation, in close collaboration with the Central Bank (CBN), would continue to support the introduction of affordable products and services not only to the general public, but

also to vulnerable women and dwellers in rural communities.

In furtherance of its elaborate initiatives towards achieving the desired level of Financial Inclusion in the country, the NDIC Boss expressed the commitment of the Corporation to support the introduction of new channels of providing financial services such as Agency Banking, Payments Service Banks, and mobile banking among others which will enable small depositors have access to financial services across the Country. In that respect, he called on the general public, especially retired senior public servants and retired bankers to acquire Agency Banking and MFB licences in order to make modest contributions to the growth and promotion of these services in their respective communities.

Reacting to the welcome address, the AANI’s President and former Inspector General of Police, Mohammed Dikko Abubakar, disclosed that the purpose of the curtsey call was to identify with the way Ibrahim, who is also an alumni of the National Institute, had piloted the affairs of the Corporation since his appointment. He eulogised the CEO for the remarkable strides the Corporation had made under his exemplary leadership.

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ecurities and Exchange Commission (SEC) is making efforts that will enable the commencement of trading of local agriculture produce and solid minerals in the Nigerian capital market.

Mary Etuk, acting directorgeneral, SEC, said the capital market had the capacity to unlock better access to credit and finance for the agriculture sector through innovative financing structures and products.

As part of such efforts, SEC would be hosting an International Conference on the Nigerian Commodities Market 2020, with the theme “Commodities Trading

Ecosystem: Key to diversifying the Nigerian Economy.”

Speaking at the press briefing ahead of the event in Abuja on Wednesday, Etuk stressed that agriculture remained an important part of government economic diversification agenda, as it holds the potential of delivering on the country’s food security needs, provide jobs and increase the nation’s foreign exchange earnings.

She said, “Despite the potential of the agriculture sector to deliver on important economic metrics, credit to the sector has remained less than 5 percent of bank lending for the past 10 years severely hampering its development.

“This is also true for Nigeria’s

abundant minerals, especially the solid ones, many of these minerals are presently dug up on a subsistence basis and sold in markets around the world in disorderly fashion”.

Speaking further, the acting director-general stressed on the need to develop a structured market for local commodities while providing the required infrastructure for the international market to be exposed to Nigerian commodities.

“It is high time we created a market where these local commodities would be traded in an orderly manner, to the benefit of the Nigerian economy.

“A structured market for commodities will provide a fairer play-

ing field for local market participants, while providing the required infrastructure for the international market to be exposed to Nigerian commodities.

It will also provide price discovery to market participants, producers and consumers alike leading to efficiency and better decision making.

“The three existing commodities exchanges in Nigeria backed by robust public participation from key stakeholders notably financiers, donors, public stakeholders’/ government officials, and international commodity exchanges as well as the larger Nigerian retail investment community can unlock a vast amount of capital in the short to medium term.

Claire Pierangelo (l), consular general of the United States of America in Nigeria, with Adeyeye Ogunwusi, Ooni of Ife, NAN during her visit to Ooni’s Palace, in Ile-Ife.

It is normal to suspend Nigerian WHO declares coronavirus passport services - FG outbreak pandemic Innocent Odoh, Abuja

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ollowing reports that the Nigerian Consulate General in New York has suspended emergency passport services due to shortage of old booklets, the Ministry of Foreign Affairs has said the process is normal and nothing to worry about.

Spokesman of the ministry, Ferdinand Nwonye, told BusinessDay on Wednesday, “It is not only in New York, it occurs in most missions at times if they run short of the passport booklets. Even in Nigeria here there are times they will tell you that there is scarcity of booklet. So, there is nothing new about that.”

A report quoted by the News Agency of Nigeria (NAN) said in a notice dated March 6, 2020, the consulate said that only applicants on appointment would be attended to in the time being.

“The Consulate General will resume attending to all and sundry when the passport booklet supply improves,” the notice said.

The shortage, according to the Consul General, Benaoyagha Okoyen, is occasioned by gradual phase out of the old passport and transition to the new 10-year enhanced E-Passport. Okoyen gave the explanation while addressing a group of emergency

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passport applicants in his office in New York.

The applicants, who had showed up at the consulate before their respective interview dates, said they had no prior knowledge of the new policy. Some were said to be agitated after consular officials refused to attend to them for fear of flouting the policy.

Attempts at explanation fell on deaf ears as some said they came from far states, and could not afford the cost of putting up in New York.

Okoyen took time to explain the situation to them, saying, “There is a transition going on from the five-year to the 10-year validity passport, and we are trying to manage the old stock.

“We hope the transition process is completed soon, and once that is done this issue will be over.

“Currently, we only have limited number of booklets, which have been allocated according to our scheduled appointments,” he said.

According to NAN, some of the applicants, most of whom were seeking renewal of their passports, came from other consular jurisdictions.

Besides New York, Nigeria has two other consulates in the United States located in Atlanta and Washington, serving allotted numbers of the country’s 50 states.

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Anthonia Obokoh

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he World Health Organisation (WHO) on Wednesday declared Covid-19 (coronavirus) outbreak a pandemic.

As of Wednesday, March 11, 114 countries had reported that 118,000 had contracted Covid-19, the disease caused by the virus, known as SARS-CoV2.

“The situation will worsen.

We expect to see the number of cases, the number of deaths, and the number of affected countries climb even higher,” said Tedros Adhanom Ghebreyesus, director-general, WHO. The virus causes mild respiratory infections in about 80 percent of those infected, though about half will have pneumonia.

Another 15 percent develop severe illness and 5 percent need critical care.

The virus, which probably originated in bats but passed to people via an as yet unrecognised intermediary animal species, is believed to have started infecting people in Wuhan, China, in late November or early December. Since then the virus has raced around the globe.

While China appears on the @Businessdayng

verge of stopping its outbreak — it reported only 24 cases on Tuesday — outbreaks are occurring and growing in a number of locations around the world including Italy, Iran and the United States.

“The bottom line is: We’re not at the mercy of the virus,” Tedros said on Monday. “The great advantage is that the decisions we all make as governments, businesses, communities, families and individuals can influence the trajectory of this epidemic.

“The rule of the game is: Never give up,” he insisted.

The WHO has been criticized and second-guessed for not declaring the outbreak a pandemic sooner. Mike Ryan, head of the agency’s health emergencies program, admitted in a press conference on Monday that the agency fears that countries may interpret a pandemic declaration as a sign efforts to contain the virus have failed and they no longer need to try.

“For me, I’m not worried about the word. I’m more concerned about that the world’s reaction will be to that word. Will we use it as a call to action? Will we use it to fight? Or will we use it to give up?” Ryan asked.

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Thursday 12 March 2020

BUSINESS DAY

Garden City Business Digest NNEW pushes for women emancipation in PH through entrepreneurship and economic capacity • Marks International Women’s Day with training in organic farm foods Ignatius Chukwu & Favour Ichemati

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usiness women and those aspiring to entrepreneurship were brought together in Port Harcourt, Rivers State, to mark the International Women’s Day (IWD) at the MAN House on Danjuma Drive at TransAmadi Industrial Estate on Monday, March 9, 2020, to push for economic power.

The Port Harcourt chapter chairperson of the NECA Network for Entrepreneurial Women (NNEW), Teresa Njideka Ebisi (PhD), an Industrial Sociologist and Head of Department (HOD) at the Nnamdi Azikiwe University, Awka, Anambra State, who declared this, told BusinessDay in an exclusive chat on the event ground that the day is to mark the day of struggle for equality.

Talked about ‘GenerationEquality’, saying it means every being should be equal. “We are not trying to take over from men or take over the structures men built but we want equal opportunities in all institutions; political, economic, etc.

We say, whatever right accorded to men should also be accorded to women.”

She regretted that a lot of

L-R: NNEW PH treasurer, Motunrayo Obajimi; chairperson, Teresa Njideka Ebisi, PRO, Henrietta Okoya

women face marginalization just for being women, urging that women should be treated as equal being. “If men are in politics, women should be there too. If men are appointed, women should also be appointed”.

Saying it is a day to thank God for what they have achieved so far and ask for more, Ebisi asked God to help the women to have an egalitarian society where people

would be seen for what they are, not on gender basis. Gender equality is both men and women because we condemn women who unfairly treat men, she stated.

The industrial sociologist and business women said: “NNEW is pushing this agenda by creating awareness and to advocate for actions in policy and leadership. NNEW tries to nurture women in business and groom those that desire to

be in business. We have been steady on training women to be able to build their voices through empowerment and business expansion. This creates independence in women and they can stand on their own. When women are empowered, the nation is empowered and everybody will strive to achieve.

“Last year we say, ‘strike a balance’; this year we say, ‘each for equal’. NEW has ac-

tivities which we embark on.

The national NNEW lines up activities and the PH branch keys into them. The IWD is being celebrated nationally as we do here today. There is the ‘SheBoss’ project where we encourage women CEOs and bestow awards on them and encourage others to follow their footsteps.’

The unpaid work of a woman: Speaking later to the audience on what she called the unpaid work of a woman, Ebisi women should be appreciated for many reasons, but harped on the unpaid work of a woman which she said seems to be valueless, though tasking. “We hereby advise all women to try and be strong even when weak. I am happy to be a woman because God made us in a strong way. We can do many things at a time.”

She went on: “Our narrative has to change. God asked humanity to dominate the world; it includes both man and woman. He did not ask one to dominate the other. We should build together. They use stereotypes to stop the women, but mutual respect should be the way, not intimidation. Together, we achieve our goals. Bear your pains as you strive to grow. No one can hinder us.”

She talked about dedicating 2020 to developing business ideas and training women to be better entrepreneurs. “We will also help them nurture and grow their businesses towards financial empowerment so as to become independent.”

Ifeoma Ikejiaku, a PR practitioner and event manager, who was inducted as a member on the day, said IWD came as a result of the way women are being treated in most cases.

She agreed with Ebisi on ways women were being maltreated or marginalized but urged them to speak up and not die in silence.

In a key presentation on organic farm foods as health solution, the CEO of Anmak, Annastasia Akpebe, said there are three organs that do not sleep even when we sleep, when the rest of the organs sleep: Brain, heart, lungs. “The body heals itself through doing the right things to our organs.

Consider magical herbs and spices like ginger, garlic, lime, lemon, and tumeric as good sources of cleansing the body system from various sicknesses. There should be balance in treating men and women but not competition.”

She said that most foods these days and drugs rather harm the body and cut short lifespan.

Ogoni folks starved of information on clean up scheme, other oil decisions – CEHRD Report Port Harcourt

by Boat

IGNATIUS CHUKWU

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study just released in Port Harcourt has revealed that Ogoni people do not know what is going on about the $1Bn clean up exercise ordered by the United Nations nine years ago. The report said this is also the case in other oil-related issues and decisions. Recommendations have thus been made for the relevant agency to provide water as mandated by the United Nations Environmental Programme (UNEP).

The study thus shows that the rural people experience feelings of distrust, disappointment, deception towards government and the oil companies and have continued to doubt the sincerity and seriousness of the government to do a proper clean up, remediation and restoration of the environment.

The integrated baseline study was embarked upon by the Centre for Environment,

Human Rights and Development (CEHRD) to assess the impact of the clean up on human rights, environment and gender.

According to Sam Kabari, Head, Environment and Conservation of CEHRD, the research has disclosed that local communities, especially rural women, find it difficult to obtain sufficient information with respect to the Ogoni clean up. “They are also not adequately consulted on oil related activities including clean up.”

The issue of creating awareness and access to participation has become a huge issue in recent times up to the point of heavy suspicions that the $360m released by the oil major has been stolen, but the agency involved came up to clarify that not a dime has been pinched.

CEHRD is indicated as a foremost notfor-profit human and environmental rights NGO based in Port Harcourt. “In line with the mission and mandate of the organization, we carried out a study on the environmental, human rights, health and gender baseline for the Ogoni clean up”, said Kabari.

The report of the study, he said, is a product of a painstaking research undertaken by CEHRD which documents the current state of environmental, health, human rights and gender impacts of oil pollution in Ogoniland.

“It is a novel environmental impact assessment (EIA) in Nigeria, being the first to incorporate gender and human rights impact assessment.”

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He said the objectives of the study included providing baseline data on the environmental, health, human rights and gender situation in Ogoniland before the cleanup, as well as providing indicators/tools with which to monitor the clean up, remediation and restoration of the environment. It provides the tools to measure the success or otherwise of the clean up.

The research found out that oil operations have done a huge damage to the environmental, health and human rights of members of the Ogoni communities..

It also disclosed that Communities have cultures suspended as a result of oil contaminations, which is an infringement on their cultural rights.

It further found out that women, as a very vulnerable group, bear heavy burden of the pollution. The study noted that prolonged exposure to polycyclic aromatic hydrocarbon prevalent in the Ogoni area would increase cancer risk of the local population, especially skin, lung cancer, as earlier reported in 2011 by the UNEP report on environmental assessment of Ogoniland.

There is increased number of deaths and reduction in lifespan in some communities; there are numerous other health issues associated with contamination of oil, such as respiratory problems, eye problems, infertility, etc. Sadly, there is poor access to quality medical services in the impacted communities.

The study expressed concern that wastes

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generated in the course of the clean up may find their way into burrow pits in the communities, which is very likely to cause re-pollution of the areas. It also noted that repollution by activities of artisanal oil refining is a critical challenge for coastal cleanup and restoration of Ogoni environment.

It also disclosed that contamination of soil and natural habitat has severe negative impacts on livelihoods of community members who depend on the environment for survival and that surface and ground water quality is at critical level below permissible limits due to oil contaminations.

The study thus recommended among others that: “Steps should be taken to ensure that communities are adequately involved in the clean up processes to prevent conflicts, build trust in the relationship between the players and optimize the resources invested. Women, who bear a huge impact of oil contamination as a result of their high vulnerability, should be adequately involved in the clean up.”

It also recommended that standard waste management should be adopted for proper disposal of wastes generated in the course of the clean up to ensure there is no re-pollution. The report demanded for the Hydrocarbon Pollution Remediation Project (HYPREP) to reinstate public confidence.

Reassurance in the minds of the public that key environmental issues have been identified and will be monitored and mitigated, during and after the project is necessary.

@Businessdayng

Thursday 12 March 2020

BUSINESS DAY

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Investing in Rivers State International Women’s Day bonus:

How Bonny women may begin trading with US companies • BOCCIMA builds business coalition on the Island as $10Bn Train-7 rushes on Ignatius Chukwu

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he 2020 edition of the International Women’s Day (IWD) was celebrated in Bonny, Rivers State, with a difference as the Bonny Chamber of Commerce, industry, Mines and Agriculture (BOCCIMA) packaged a double programme that could move Bonny women to the next level through world class entrepreneurship as well as steps on economic emancipation.

The Director General of BOCCIMA, Constance Nwokejiobi, who packaged the double programme, noted that the Chamber has positioned itself to act as the business hub of Bonny Kingdom. “BOCCIMA will work through advocacy, digital marketing, networking opportunities, mediation and conciliation, international business activities, trade missions and trade events” to change Bonny into a modern business city.

She beckoned on the women to get on board quick to avoid sitting at the back eventually. She harped on innovation and IT as the way to go.

An elder who is the president of BOCCIMA as well as the chairman of board, Lawrence Jumbo, said BOCCIMA has come to stay but that they need support to make it go global.

Saying women were the sustaining force in life, he observed that most men credit their successes to either their wives or mothers. “Women can change Nigeria. We expect wives to advise their husbands against evil raging in the society today.”

He pointed to drugs addiction, terrorism, etc, which all started from homes and urged women to act, now.

Steps to going global -experts Experts who drilled the women said there is need to operate at global level because it is now a global village. The women were told that the first important step is to belong to a city chamber, in this case, the Bonny Chamber of Commerce. They were

L-R: Lawrence Jumbo, president of BOCCIMA; Tessy Biobaku, a topparticipant; BJ Chapp-Jumbo, BOCCIMA board member; Jessica Ezekiel-Hart, a professor and participant

told that the US has commercial service sections in all consulates, and where there is none, they use Economic Centres. At home (in the US), they are called export centres.

They work in embassies abroad to help US companies gain access to economies around the world.

Bulwark against reputation issues The Bonny women were made to understand that the US and some industrialized nations have devised other means to keep trading with Nigerians after reputation problems came on the scene. For this, they said it helps to conduct due diligence on companies in Nigeria. A particular resource person said it helps to get US companies to know who to deal with and who not to. “We try to find out if you are who you say you were.

Then, we do a listing because we want to work with those we know.”

Trade Counseling: One of the resource persons said; “We do this by conducting due diligence and recommend you to US companies back home. You must

have financial structure.” This may not be because those in the consulates are looking for high or low turnover but to see a structure in existence. It is the company back home that would want to know the size of capital it is looking for. The foreign company does not know you. It is through your business that they want to look at you.

So, endeavour to keep your books, they advised.

The women were made to know that the commercial officers of embassies do market research for foreign companies. Foreign companies will not come in directly, except through local partnerships. “So, position yourself. We send lists and some other times, we recommend about five local companies for the company abroad looking for partnership or agents down here to pick.”

For the US in particular, it was stated that some of the products used in relating with Nigerian business people include: “International Partner Search (IPS); we help them search for partners in Nigeria. Gold Key Matchmaking Service (GKMS);

we help them to get companies to match their business needs. Simple Company Promotion (SCP): We do simple promos for them. International Buyer Programme (IBP); we help get market for their products and advise them on how to behave in the local market”.

Nigeria’s population, an attraction It was revealed that many foreign companies are keen to enter the Nigerian market because of its population and the market it offers. Nigeria’s unique problems sometimes also create solutions that many foreign firms want to exploit. “One company wants to come and sell candles but we kept telling them Nigeria has candle makers.” The experts advised Bonny women and other SMEs to know that training is very important. Some commercial officers in embassies do advise companies back home to know that Nigerians crave for training on any equipment they are importing.

Thus, Original Equipment Manufacturers (OEMs) must include training and parts in the deals. “So, prepare

your company to benefit from the trainings for your workers. You could also be training others.”

Offshore Technology Conference (OTC) in Houston, USA, is always booming where US companies meet companies around the world including Nigerian firms, they said. This year, 50 Nigerian companies are said to have gone to Houston and BOCCIMA participated in some of those conferences and sold the Bonny Island business dream well and got positive responses.

For 2020 in focus: The resource persons said they were recruiting delegates to various programmes in the US. Through Business Matchmaking Meetings, they conduct due diligence to achieve this. Also, there is NUSA (Networking with USA). A Nigerian SME will just fill out a form of about two pages inviting the US team to come for inspection.

You just show your CAC certificate and industry association and pay N53,000 only into a UBA account, it was gathered.

For financial services, the EXIM Bank of US is said to have credit lines but benefiting firms must have been in operation for at least three years.

Many companies are said to be knocking to enter the Nigerian market, but the embassy screens them to enable Nigerian firms import. They said they do send persons to go to the firms and screen them before allowing Nigerian importers transfer funds.

They also look at ‘Letters of Credit’ matters. They now partner with BOCCIMA and they find companies in the US ready to do business in Bonny.

Partners will be welcome.

Many women asked questions and it was made clear that it is not true that US companies are not willing to come to Nigeria. Over 33 companies are coming to the exhibition in Lagos.

The issue has been on reputation and business climate in Nigeria. They also explained that travel ban imposed by the present president is not for business trips but residence visa.

Wigwe, Eweniyi, Idowu, share tips on entrepreneurship success factors at forum

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ver the course of life, I have found out that there are some essential building blocks that guarantee a sustainable entrepreneurship and these can be summarized thus: passion, competence, commitment, excellence, leadership, focus, innovation, relationships, continuous personal improvement through reading and other forms of exposure, and most irrevocably, hard work. With all of these in place, it is most certain that any entrepreneurial endeavours will be blessed with the accompanying rewards by God. This was the submission by the Group Managing Director and Chief Executive of Access Bank, Herbert Wigwe, who was the theme speaker at the Harvesters Entrepreneurship Forum [HEF2020] organized by Harvesters International Christian Centre at the weekend, which was beamed nationwide and monitored

in Port Harcourt.

Wigwe, a Rivers man, debunked the assumptions that Nigerians could not do something good. ‘’We can create our own institutions’’ he said, citing Access Bank and Dangote Group as some of the examples.

He noted that it is not the business of government to run businesses, saying job creation should be left to individuals. Such individuals, he said, should be competent, passionate and have a focused strategy of what they are doing. He also said such individuals should innovate always as the inability to do so could kill one’s business.

These seemed like clichés, but they are true, he affirmed. ‘’My theory: If you work harder than I, I will outsmart you. Follow your passion and you will do well. You must have excellence in your DNA. Build relationships; think of networks in the fields that are vital to www.businessday.ng

L-R: Joyce Daniels, Moderator, Bolaji lDOWU, Convener Harvesters Enterpreneurs Forum 2020, Herbert Wigwe, GMD/CEO Access Bank and Theme Speaker, Odun Eweniyi, Co-Founder, Piggyvests and Israel Ovirih both discussants

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@Businessdayng

you. If you are a recluse, it will not help you. You have to continuously improve yourself. Read voraciously like the late British Prime Minister Margaret Thatcher, but you do not have to be the most brilliant to excel in business.”

He advised that money should not be the main objective of a startup, but the passion to create value.

According to Wigwe, entrepreneurs should be ready for shocks as business failures should not deter one from taking risks. Rather, they should make one strong, he said. “Show me a man or woman who has made it in business and I will show you one who has failed many times over”, he said, citing himself.

He noted that the building of a bank is the most difficult thing to do. ‘’You pay the price for every wrong decision. No entrepreneurial journey comes without pains. Entrepreneurs do not see impossibilities.’’

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Thursday 12 March 2020

BUSINESS DAY

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Thursday 12 March 2020

BUSINESS DAY

47

Live @ The STOCK Exchanges Prices for Securities Traded as of Wednesday 11 March 2020 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 229,266.71 6.45 -6.52 354 27,014,578 UNITED BANK FOR AFRICA PLC 212,036.41 6.20 9.73 345 59,979,310 ZENITH BANK PLC 378,327.75 12.05 -7.66 2,141 412,407,439 2,840 499,401,327 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 157,939.29 4.40 1.14 483 303,031,738 483 303,031,738 3,323 802,433,065 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,106,692.10 103.50 -2.42 353 10,048,455 353 10,048,455 353 10,048,455 BUILDING MATERIALS DANGOTE CEMENT PLC 2,607,197.63 153.00 -10.00 30 721,027 LAFARGE AFRICA PLC. 190,877.38 11.85 -3.66 105 8,619,309 135 9,340,336 135 9,340,336 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 356,008.96 605.00 - 2 1,518 2 1,518 2 1,518 3,813 821,823,374 REAL ESTATE INVESTMENT TRUSTS (REITS) SFS REAL ESTATE INVESTMENT TRUST 1,386.00 69.30 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 8,538.46 3.20 - 5 46,500 5 46,500 5 46,500 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 5 46,500 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 58,570.07 61.40 - 37 303,737 PRESCO PLC 44,900.00 44.90 - 1 100 38 303,837 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,500.00 4.25 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,710.00 0.57 - 8 166,000 8 166,000 46 469,837 DIVERSIFIED INDUSTRIES JOHN HOLT PLC. 217.92 0.56 - 1 962 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 30,892.47 0.76 -1.32 101 20,076,098 U A C N PLC. 21,609.72 7.50 4.17 81 7,414,004 183 27,491,064 183 27,491,064 BUILDING CONSTRUCTION ARBICO PLC. 469.26 3.16 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 29,568.00 22.40 - 18 504,124 ROADS NIG PLC. 165.00 6.60 - 0 0 18 504,124 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,390.52 0.92 - 11 306,239 11 306,239 29 810,363 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 6,107.01 0.78 - 4 85,000 GOLDEN GUINEA BREW. PLC. 220.45 0.81 - 0 0 GUINNESS NIG PLC 55,197.65 25.20 - 34 116,748 INTERNATIONAL BREWERIES PLC. 170,574.14 6.35 - 10 59,794 NIGERIAN BREW. PLC. 263,897.77 33.00 -0.30 58 461,313 106 722,855 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 117,000.00 9.75 -1.52 103 2,000,660 FLOUR MILLS NIG. PLC. 90,208.35 22.00 -10.00 59 1,559,267 HONEYWELL FLOUR MILL PLC 7,295.78 0.92 2.22 19 1,515,762 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 27,951.57 10.55 -9.83 25 432,248 UNION DICON SALT PLC. 2,993.06 10.95 - 0 0 206 5,507,937 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 11,269.21 6.00 -9.77 44 541,443 NESTLE NIGERIA PLC. 725,518.27 915.30 -10.00 127 2,013,753 171 2,555,196 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 5,566.26 4.45 9.34 30 461,074 30 461,074 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 16,080.43 4.05 - 18 118,304 UNILEVER NIGERIA PLC. 66,929.31 11.65 9.91 44 1,491,429 62 1,609,733 575 10,856,795 BANKING ECOBANK TRANSNATIONAL INCORPORATED 88,995.32 4.85 -8.49 59 825,354 FIDELITY BANK PLC 49,257.15 1.70 4.94 79 9,006,814 GUARANTY TRUST BANK PLC. 585,680.47 19.90 -0.25 1,437 385,180,674 JAIZ BANK PLC 14,142.84 0.48 2.13 16 617,164 STERLING BANK PLC. 36,563.83 1.27 -9.93 41 30,205,189 UNION BANK NIG.PLC. 174,724.52 6.00 -5.51 43 3,961,781 UNITY BANK PLC 5,493.99 0.47 6.38 17 1,169,152 WEMA BANK PLC. 19,672.98 0.51 2.00 58 8,098,746 1,750 439,064,874 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 8,271.05 0.73 7.35 29 695,859 AXAMANSARD INSURANCE PLC 17,535.00 1.67 7.74 4 139,846 CONSOLIDATED HALLMARK INSURANCE PLC 2,439.00 0.30 - 2 30,000 CORNERSTONE INSURANCE PLC 7,217.46 0.49 8.89 3 147,827 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. 1,464.69 0.20 -4.76 11 2,000,000 LAW UNION AND ROCK INS. PLC. 4,296.33 1.00 -3.00 19 4,204,952 LINKAGE ASSURANCE PLC 3,200.00 0.40 - 1 23,238 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 0 0 NEM INSURANCE PLC 9,240.88 1.75 - 9 73,100 NIGER INSURANCE PLC 1,547.90 0.20 - 2 1,000,000 PRESTIGE ASSURANCE PLC 2,960.40 0.55 - 0 0 REGENCY ASSURANCE PLC 1,333.75 0.20 - 1 50,000 SOVEREIGN TRUST INSURANCE PLC 2,272.89 0.20 - 0 0 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 1 100 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 7,197.50 0.30 -9.09 30 30,688,182 112 39,053,104 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,126.57 0.93 9.41 9 181,089 9 181,089

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 6,784.62 1.05 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 5,671.82 1.36 - 0 0 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 8,000.00 4.00 - 25 348,349 CUSTODIAN INVESTMENT PLC 32,056.16 5.45 - 7 17,342 495.00 0.33 - 1 3,100 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 32,872.50 1.66 9.93 136 14,550,485 ROYAL EXCHANGE PLC. 1,131.98 0.22 - 0 0 297,815.82 28.35 - 10 6,597 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 12,660.00 2.11 -9.83 69 3,302,374 248 18,228,247 2,119 496,527,314 HEALTHCARE PROVIDERS EKOCORP PLC. 2,742.30 5.50 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 710.63 0.20 - 1 1,400 1 1,400 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 5,320.22 2.55 0.39 38 7,052,548 GLAXO SMITHKLINE CONSUMER NIG. PLC. 4,125.77 3.45 - 24 137,737 3,709.26 2.15 - 2 5,450 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 835.63 0.44 - 5 26,138 556.71 3.62 - 0 0 NIGERIA-GERMAN CHEMICALS PLC. PHARMA-DEKO PLC. 325.23 1.50 - 0 0 69 7,221,873 70 7,223,273 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 781.44 0.22 10.00 8 6,151,913 8 6,151,913 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,088.46 0.37 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 237.60 2.20 - 0 0 287.07 0.58 - 0 0 TRIPPLE GEE AND COMPANY PLC. 0 0 PROCESSING SYSTEMS CHAMS PLC 1,033.13 0.22 10.00 4 639,100 E-TRANZACT INTERNATIONAL PLC 10,962.00 2.61 - 0 0 4 639,100 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,123,311.48 298.90 - 4 1,026 4 1,026 16 6,792,039 BUILDING MATERIALS BERGER PAINTS PLC 1,767.92 6.10 - 8 25,000 BUA CEMENT PLC 1,195,411.70 35.30 - 12 319,700 CAP PLC 13,965.00 19.95 - 12 59,483 MEYER PLC. 244.37 0.46 - 0 0 1,769.32 2.23 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 32 404,183 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,192.12 2.03 - 0 0 2,254.49 1.28 -8.57 15 408,334 CUTIX PLC. 15 408,334 PACKAGING/CONTAINERS BETA GLASS PLC. 34,998.04 70.00 - 0 0 GREIF NIGERIA PLC 388.02 9.10 - 0 0 0 0 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 1 7 1 7 48 812,524 CHEMICALS B.O.C. GASES PLC. 1,685.79 4.05 - 1 566 1 566 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 1 566 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 0 0 0 0 INTEGRATED OIL AND GAS SERVICES OANDO PLC 26,105.97 2.10 -4.11 76 3,466,092 76 3,466,092 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 52,827.21 146.50 - 27 10,175 ARDOVA PLC 19,927.96 15.30 - 8 34,480 CONOIL PLC 10,131.70 14.60 -9.88 21 243,956 ETERNA PLC. 2,634.37 2.02 - 13 66,143 MRS OIL NIGERIA PLC. 4,206.05 13.80 - 0 0 TOTAL NIGERIA PLC. 36,328.84 107.00 - 17 35,127 86 389,881 162 3,855,973 ADVERTISING AFROMEDIA PLC 1,509.28 0.34 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 15,796.05 1.62 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 235.27 0.20 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,779.06 3.00 - 0 0 421.96 0.90 - 0 0 TRANS-NATIONWIDE EXPRESS PLC. 0 0 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,259.15 2.75 - 0 0 IKEJA HOTEL PLC 2,515.34 1.21 - 1 1,000 TOURIST COMPANY OF NIGERIA PLC. 7,076.28 3.15 - 0 0 TRANSCORP HOTELS PLC 30,781.64 4.05 - 2 620 3 1,620 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 3,960.00 0.33 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 223.78 0.37 - 1 500 LEARN AFRICA PLC 856.31 1.11 - 1 459 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 431.41 1.00 - 5 44,200 7 45,159 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 530.46 0.32 3.23 1 139,057 1 139,057 SPECIALTY INTERLINKED TECHNOLOGIES PLC 688.80 2.91 - 0 0

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Friday 13 March 2020

FT

BUSINESS DAY

49

FINANCIAL TIMES

World Business Newspaper

White House pushes tax cut to aid virus-hit economy

Donald Trump fails to make stimulus announcement as promised as Democrats push back on plan James Politi, Demetri Sevastopulo and Gregory Meyer

D

onald Trump has made an opening bid to Congress to cut payroll taxes until the end of the year, despite Democratic objections, as the administration launched talks with Congress on a stimulus package to shield the economy from the coronavirus outbreak.

Larry Kudlow, the director of the White House National Economic Council, said Mr Trump had raised the plan for a payroll tax cut, lasting beyond the November election, as the centrepiece of his economic response to the spreading disease, during a lunch with Republican senators on Tuesday.

At a White House briefing later in the day, Mr Kudlow said administration officials were still working out the details of the package, but payroll tax relief was “probably the most important, powerful piece of this” and would deliver “a big growth pay-off”.

Mr Trump himself did not appear at the press conference, despite having said on Monday that he would do so to personally announce a “very dramatic” package of emergency measures at the event.

White House proposals have run into immediate resistance from Democrats on Capitol Hill, casting doubt on Washington’s ability to rapidly coalesce around a big package to shield the US economy from the epidemic.

“The best way to prevent economic damage is to stop the spread of the virus. President Trump isn’t going to wriggle out of addressing this growing public health crisis

Donald Trump: ‘[The coronavirus] will go away, just stay calm’ © AP

with tax cuts,” said Ron Wyden, the top Democrat on the Senate finance committee, who added a payroll tax cut would not help workers without paid sick leave or who had lost shifts and tips. The tax is paid by employers and workers on their salaries to fund government pensions and healthcare, and generates $1.2tn in revenue annually.

This crisis demands a much more complicated series of solutions, it’s not just a matter of tax cuts Richard Neal, Democrat who heads the House ways and means committee A payroll tax cut has been used for stimulus before, by the Obama administration following the financial crisis, but many Democrats say there are better ways to target

economic relief.

One Republican lawmaker said a complication surrounding any negotiations was that Democrats were conscious that providing too large an economic stimulus package could help Mr Trump as he campaigns for re-election in November. He said one idea being discussed was to stagger any stimulus package — passing a first version soon and then looking at more measures if the coronavirus outbreak got much worse.

“This crisis demands a much more complicated series of solutions, it’s not just a matter of tax cuts,” Richard Neal, the Democrat who heads the House ways and means committee, which writes tax legislation, told the Financial Times.

He said the committee was

“working on emergency paid leave and unemployment insurance legislation, and we want to ensure that coronavirus testing can be obtained for free”.

The chance of a compromise on aspects of the package could not be counted out, however. Steven Mnuchin, the Treasury secretary, was separately upbeat after a meeting with Nancy Pelosi, the Democratic speaker of the House.

The pair last year negotiated a budget deal to fund the government and lift the US debt limit.

“We’re having discussions about various different policies,” Mr Mnuchin said. “There’s a lot of interest on a bipartisan basis to get something done.”

Mr Trump has faced scepticism from Democrats on another idea

some officials have floated, namely targeted tax relief for certain industries affected by the outbreak, possibly including airlines, hospitality, cruise lines and energy.

One US administration official said Mr Trump was also “considering federal assistance” for the shale oil and gas production industry, but that it would not amount to a bailout.

Shale energy is an important element of the economy in several states, particularly Pennsylvania, that will be critical in the November presidential election. But any effort to help shale producers was likely to face tough question from Democrats, particularly those without shale production in their districts.

“Instead of lining the pockets of Big Oil, Democrats are working on legislation to protect the financial security of working families affected by the spread of the coronavirus,” said Evan Hollander, spokesperson for House appropriations committee.

While Mr Trump wants to help shale companies, it would likely spark jockeying among other energy industry players. John Berger, chief executive of Sunnova Energy, a Texas-based solar power company, said any assistance for the oil and gas industry had to be matched by help for renewable energy, such by preserving tax credits set to expire.

Mr Berger said Vladimir Putin, Russia’s president, and Mohammed bin Salman, the de facto ruler of Saudi Arabia, had conducted “state intervention” in the markets with their price war that warranted a US government response. “If they do that [however] they need to treat us the same because we are just as important national security-wise,” he said.

Christine Lagarde calls on EU leaders to ramp up coronavirus response ECB president warns of impact as economists push Merkel to drop balanced budget commitment

Martin Arnold and Guy Chazan

C

hristine Lagarde has called on EU leaders to launch more urgent action to avoid the spread of coronavirus triggering a serious economic slowdown.

Speaking on a video call with EU leaders on Tuesday night, the president of the European Central Bank sought to shake them out of what she sees as a complacent attitude to the epidemic, according to a person briefed on her comments.

Forecasters have warned that the spread of the virus could drive the eurozone into a recession but there is growing frustration in some quarters that the ECB is once again being left to do most of the work to shield the bloc from an economic and financial crisis while govern-

ments such as Germany’s, which have the capacity to spend more, refuse to do so.

Ms Lagarde’s warning came just hours before Italian prime minister Giuseppe Conte announced on Wednesday that he was ramping up the size of a spending package to tackle his nation’s coronavirus outbreak to €25bn, in an effort to lessen the blow of a nationwide lockdown.

And a group of prominent German economists called on Angela Merkel’s government to abandon its commitment to a balanced budget in the face of the coronavirus epidemic and consider an extensive package of measures to help companies affected.

The calls for action come as the ECB prepares to meet on Thursday to consider its monetary policy response to the virus. www.businessday.ng

Financial markets are betting that the central bank will announce a further cut in its deposit rate to minus 0.6 per cent — following Wednesday’s emergency rate cut by the Bank of England and last week’s rate cut by the US Federal Reserve — and an expansion of its programmes of bond purchases and cheap loans to banks.

After Tuesday’s call, the European Commission said it was creating a €25bn investment fund to tackle the epidemic, to be paid for from existing resources. It also promised to loosen state aid and budget rules to allow governments to help struggling businesses and boost public spending.

However, leaders did not unite behind a co-ordinated EU-wide fiscal stimulus package, despite requests from France and other states for a “massive” response. One EU

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diplomat said the debate during the call did not move beyond “southern countries wanting more spending and northern member states being more reluctant”.

Kenneth Wattret, chief European economist at IHS Markit, said the relatively modest response of EU governments put the ECB under extra pressure. He likened it to “using a peashooter when a bazooka is required”.

On Tuesday’s call Ms Lagarde said a further loosening of monetary policy would only be fully effective if combined with a sufficient fiscal stimulus from EU leaders, according to one person briefed on the discussion. In that scenario, Ms Lagarde said, the shock of coronavirus would be shortlived. The ECB declined to comment on Ms Lagarde’s contribution to the call.

The group of prominent Ger@Businessdayng

man economists include Peter Bofinger, a former economic adviser to Ms Merkel’s government; Gabriel Felbermayr, head of the Kiel Institute for the World Economy; Clemens Fuest, head of the Ifo economic think-tank; and Michael Hüther, director of the German Economic Institute.

They said: “If we don’t succeed in containing the spread of the economic shockwaves and we start seeing a big wave of insolvencies, the state should consider as a last resort taking equity in companies.”

As an example, they cited the example of bank bailouts following the 2008-09 financial crisis.

Germany’s debt-to-gross domestic product ratio has dropped below 60 per cent — much lower than most of its EU neighbours — and the country’s total budget surplus stood at a record €50bn last year.

50

Friday 13 March 2020

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Oil shock threatens to take wind out of sails for renewables shift Cheap petrol poses risk for electric vehicle demand and the appeal of efficiency measures Leslie Hook

T

he oil crash unleashed instant panic across financial markets, but Saudi Arabia’s decision to start a price war may yet have profound consequences for the world’s embrace of cleaner energy.

“It will definitely put downward pressure on the appetite for a cleaner energy transition,” Fatih Birol, head of the International Energy Agency, said of the historic fall in crude prices.

Analysts warned that the oil price shock could hurt demand for electric vehicles and dim the appeal of energy efficiency measures because the turmoil — allied to a slowing global economy — had a chilling effect on the most ambitious renewable plans.

Unlike the period of low oil prices during 2014-16, many countries including the UK and the EU have set out ambitious targets to cut net emissions to zero in the coming decades that require a huge shift in energy use.

Mr Birol said the situation would be “a good test” of all the climate commitments that government and companies had been making recently. “Observers will be quick to notice if governments’ and companies’ emphasis on the transition dies down when market conditions become more challenging.”

Cheap petrol is likely to make electric vehicles less attractive to consumers, at least in the short term. The global electric vehicle market had already suffered a slowdown last year because of weaker demand in China and the Americas. It is a picture that the spread

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

of coronavirus risks exacerbating as the global economy stumbles.

“The vehicle market is already shrinking and is now hit by potential supply chain shortages and lower consumer confidence,” the research group Bloomberg NEF noted in a recent report. “We now expect EV sales in China to take a hit in 2020 . . . This could still fall further as the full impact of the coronavirus becomes clear.”

Increasing the threat to the energy transition is that low energy prices often reduce the economic incentives to conserve it and find ways of using it more efficiently.

“Cheaper energy always leads to using energy in a less efficient manner,” said Mr Birol. “Low energy prices will make the economics of energy saving less attractive due to cheap oil and gas, and this will

definitely not be good news.”

For the power sector, the effect of cheaper oil looks set to be more mixed.

Power generation is not directly affected by shifts in the oil price because crude is rarely used for power generation. However, government policies that will shape the future of renewable energy could shift because of the current shock.

While the cost of wind and solar power have plummeted over the past decade, the level of government subsidy for them has also been declining in many countries.

Even before the economic shock of coronavirus, investment in clean energy peaked in 2017 and fell slightly in 2018 and the first half of 2019.

“Oil price shocks a few years ago did lead to downward pressure

on most investment by oil and gas companies,” said Helen Mountford vice-president for climate and economics at WRI. “I think we are in a different world today, and I think we will see a different result,” she added, pointing to the lower prices of wind and solar.

Another factor that could shape the outlook for clean energy is that oil and gas companies find it harder to fund the investments in renewable energy they had planned.

Valentina Kretzschmar, head of corporate research at Wood Mackenzie, points out that low oil prices also make it less attractive for producers to make big investments in new exploration projects.

“The argument that oil and gas companies will leave value on the table if they invest in renewables, that argument really does not hold

at $35 per barrel,” she said. Analysis

by Wood Mackenzie suggests that at current oil prices, more than 85 per cent of oil and gas projects globally would yield a return of less than 15 per cent.

However, some believe that the move towards cleaner energy has enough momentum to see off any challenge posed by lower oil prices.

While renewable energy projects typically generated lower returns than oil and gas exploration, they also offered long-term price stability that could become more attractive in the current market, said Mark Lewis, head of climate change investment research at BNP Paribas Asset Management.

“Already investors’ view of the oil sector has been under pressure for the past 12 months,” said Mr Lewis. “It is obviously the case, if there is a very severe economic shock, then renewables and climate change may risk falling down the political agenda again, but I don’t think they would fall as badly as they have in the past . . . This is different, the economics have moved too far now.”

Indeed, some analysts said that low oil prices could hasten a structural shift away from fossil fuels by making energy companies less attractive to investors. The generous dividends coveted by investors were already starting to disappear, with Occidental Petroleum slashing its payout on Tuesday.

“Governments need to keep the eye on the ball, here the ball is climate change,” said Mr Birol. “These issues are big issues — coronavirus, market conditions — but these are temporary. Maybe in a few months, maybe longer, the market conditions will recover, but our climate challenge will still be there.”

European stocks climb after Bank of England rate cut US equities set to fall and Saudi pledge on crude production pressures oil prices Myles McCormick, Hudson Lockett and Leo Lewis

A

n emergency rate cut by the Bank of England helped to bring a dash of optimism to European markets on Wednesday morning even as investor frustration over US stimulus plans left Wall Street poised to fall.

The Europe-wide Stoxx 600 was up 0.8 per cent by late morning in London — having jumped almost 2 per cent earlier in the day — while the FTSE 100 added 0.8 per cent. The gains came after the UK’s central bank said it would reduce its main rate by half a percentage point to 0.25 per cent and introduced a host of to measures to keep credit flowing to businesses.

Paul Dales, chief UK economist at Capital Economics, said the bank’s Monetary Policy Committee had “pulled the trigger on its

double-barrelled shotgun” and that while the move would not stop the economy stagnating or contracting in the second and third quarters, “it will help to ensure that the economy can bounce back . . . once the virus has peaked.”

Other European stock markets, which have been under significant pressure in recent days, also made gains. In Germany, the Dax 30 added 0.8 per cent, while in France the Cac 40 was up 1.1 per cent.

But European optimism failed to cross the Atlantic, where Wall Street was set to slide at the open as investors fretted over what kind of fiscal stimulus the government there was likely to provide. Futures trade pointed to a 2.1 per cent slide on the S&P 500 after the US benchmark yesterday ended a volatile session 4.8 per cent higher.

The White House on Tuesday pushed for a payroll tax cut as part of a “very dramatic” stimulus

package previously promised

by US President Donald Trump.

Democrats voiced opposition to the cut, casting doubt on the prospects of a quick shot in the arm for the US economy.

Louis Tse, managing director at Hong Kong’s VC Asset Management, said the lack of detail on the stimulus plan had extinguished what little investor optimism there was. “The market is still in a very jittery mood,” he said.

Oil fell, meanwhile, after Saudi Aramco announced it would increase its crude production capacity from 12m to 13m barrels per day, marking a further escalation of Saudi Arabia’s price war.

Brent crude, the international benchmark, was down 3.1 per cent at $36.07 and US marker West Texas Intermediate fell by a similar margin to $33.33. Both benchmarks had been up more than 5 per cent earlier in the day.

Oil prices crashed by more than a quarter on Monday after Saudi Arabia launched an oil price war.

Unease over this week’s collapse in the oil price and growing signs of the global spread of the coronavirus have continued to weigh on equity markets in spite of the action taken by central banks.

Haven assets rallied, signalling that investors were becoming more risk averse. Yields on 10-year US Treasuries dropped 5 basis points to 0.702 per cent, though still comfortably above recent lows. Yields fall when prices rise. Japan’s yen, which often serves as a haven during market tumult, strengthened 0.8 per cent to ¥104.83 against the dollar. Gold was up 1 per cent at 1,665 per troy ounce.

“There is a very grim sense of foreboding . . . the real risk is that, in the coming weeks, we start to see redemptions from some of the big long-only funds pushing entire

markets lower,” said one Tokyobased broker. Tokyo’s benchmark Topix fell 1.5 per cent.

The market is still in a very jittery mood Louis Tse, VC Asset Management Analysts warned against panic selling. “One of the risks in turbulent market conditions is being forced to sell assets to meet liquidity needs,” said Mark Haefele, chief investment officer, UBS Global Wealth Management, noting that offloading assets in a weak market locks in losses for the longer term.

Stock markets elsewhere in Asia-Pacific were also weaker.

Australia’s S&P/ASX 200 closed down 3.6 per cent even after the government announced a $1.6bn health package to combat the spread of coronavirus. Hong Kong’s Hang Seng slipped 0.6 per cent, while China’s CSI 300 dropped 1.3 per cent lower.

Friday 13 March 2020

FT

BUSINESS

51

ANALYSIS

Coronavirus testing: how are the hardest hit countries responding?

Governments with the highest number of cases have adopted contrasting strategies Edward White, Robin Harding, Yuan Yang and Davide Ghiglione

T

he Asian countries hardest hit by the coronavirus have each taken a different approach to testing, leading to questions about which strategy has been most successful.

Official data suggest the rate of new infections in China, where the outbreak started, has slowed.

A similar trend had been observed in South Korea, before officials reported the biggest one-day increase in the number of coronavirus cases in Seoul on Wednesday.

But while some experts have heralded the results as early signs of success, others warn that there might be problems with undertesting and accuracy, raising awkward questions for policymakers.

In the US, where Donald Trump has contradicted his own officials over the crisis, authorities have been accused of not testing aggressively enough. The UK on Wednesday announced it would increase testing by 500 per cent, from 1,500 daily to 10,000.

How have the Asian countries facing the biggest outbreaks and Italy, the European country with the biggest crisis, used testing?

South Korea conducted mass tests South Korea on Wednesday reported 242 additional coronavirus cases, taking the total caseload to 7,755. The increase came after the identification of a new cluster of infections at a call centre in Seoul and marked a reversal of four consecutive days of declining new infections.

Seoul has rolled out a mass public testing programme in response to a severe outbreak in the country that started in Daegu, the country’s fourth-biggest city.

Officials have sought to test anyone who might have been exposed to the virus, including many asymptomatic patients as well as

Medical staff take samples from workers at a South Korean call centre where a large cluster has been discovered © AFP via Getty Images

those with symptoms. More than 210,000 tests have been conducted with as many as 10,000-new tests conducted each day. The mortality rate has remained below 1 per cent.

“For controlling the epidemic, the best information you have is these tests, which tell you who is positive and who is not,” said Kee Park, a lecturer at Harvard Medical School.

Hong Ki-ho, a doctor at Seoul Medical Centre, believed the accuracy of the country’s coronavirus tests was “99 per cent — the highest in the world”. He pointed to the rapid commercial development and deployment of new test kits enabled by a fast-tracked regulatory process.

“We have allowed test kits based on WHO protocols and never followed China’s test methods,” Dr Hong said.

However, Choi Jae-wook, a medical professor of preventive medicine at Korea University, remained “worried”.

“Many of the kits used at the beginning stage of the outbreak were the same as those in China where the accuracy was questioned . . . We have been hesitating to voice our concern because this could worry the public even more,” Mr Choi said.

China focused on the most severe cases Coronavirus has infected more than 80,000 people and killed more than 3,000 in mainland China, but the number of new infections reported each day is declining, according to government data. On Tuesday, authorities said the number of new cases had fallen to their lowest level since January.

Beijing said that showed its sweeping lockdown of millions of people had worked.

Epidemiologists, however, have warned that a lack of testing capacity has led to a vast undercounting of the number of coronavirus cases.

China’s propensity to exclude less severe cases from their testing re-

gime means the ratio of deaths to confirmed cases is 3.91 per cent, which is probably a higher figure than if more people were tested.

The problem is particularly acute in the city of Wuhan, where the virus originated.

Wang Jing, a nurse at Wuhan Union Hospital West, said her hospital “needed to be stingy” with test kits. At the beginning of the outbreak, “if the patient wasn’t displaying serious symptoms, then a test kit shouldn’t be wasted”, she said.

Supply of test kits has improved and Ms Wang is now trying to test her hospital’s backlog of “suspected cases”. But she is still asked to use discretion when deciding who to test.

The problem of testing capacity in China is exacerbated by the low sensitivity of the tests: Chinese experts say that only 30-50 per cent of positive cases are detected with the kits available in the country.

To avoid sampling errors cloud-

ing understanding of how the virus is spreading, Benjamin Cowling, head of epidemiology at the University of Hong Kong, suggested periodic testing of a random sample to track the spread of the disease.

Japan was accused of not testing enough For weeks after the outbreak began, Japan only tested people with links to Wuhan, the heart of China’s outbreak, giving officials little chance to detect early domestic infections.

Japan has tested fewer than 10,000 people and there have been 513 confirmed diagnoses, according to the Ministry of Health, Labour and Welfare. Some patients first visited a doctor with symptoms a week or 10 days before they were tested.

Critics claim the government is trying to minimise the number of cases to rescue this summer’s Tokyo Olympics.

But Yasuyuki Sahara, senior assistant minister at MHLW, said the reality was more prosaic: limited capacity to perform the polymerase chain reaction tests used to confirm the presence of the virus.

“Initially, we could only do PCR tests at the National Institute of Infectious Diseases, but now that’s expanding to universities, quarantine stations and private companies,” he said.

Tokyo has prioritised testing accuracy over volume, with centralised control over who was tested.

That explains why South Korea was able to increase testing when Japan could not.

“The PCR tests we are doing are not necessarily the same as those in South Korea. PCR tests vary in speed and sensitivity,” said Mr Sahara. “In Japan, we’ve put great importance on providing an extremely accurate PCR test.”

With Shinzo Abe, prime minister, under pressure, the authorities have relaxed the requirement for Wuhan contact and plan to cover coronavirus tests on national health insurance.

Market turmoil brings windfalls for handful of funds

Performance gains come after years of sluggish returns for much of the industry Laurence Fletcher, Ortenca Aliaj and Robin Wigglesworth

A

handful of hedge funds betting on bonds or volatility have reaped profits from the turbulence in financial markets over the past fortnight.

One of the biggest gains came from Roy Niederhoffer’s New Yorkbased computer-driven hedge fund firm.

RG Niederhoffer Capital Management’s flagship diversified fund — one of the world’s oldest quant hedge funds — has gained 37 per cent this year, after losing 28 per cent in 2019 when markets rose.

“This is a sad situation that has created the ultimate in conditions

for our strategy,” Mr Niederhoffer told the Financial Times. “This is the kind of volatility we haven’t seen since the [global financial crisis].”

His fund tries to calculate when markets have become too fearful or too greedy and then buy futures in bonds, stocks and other assets to profit as they correct.

The performance gains come after years of sluggish returns for much of the hedge fund industry, leading some investors to pull their cash out.

Many managers have complained that markets dominated by central bank stimulus have been hard to trade. Investors said that a bout of sharp volatility could offer them the chance to prove themselves again.

Some funds betting on bonds have profited as bond yields, which move inversely to prices, have

tumbled over the past two weeks, driven by investor expectations of further interest rate cuts to combat the economic damage caused by coronavirus.

Danny Yong’s Dymon Asia Macro hedge fund gained 20 per cent in February and is now up more than 20 per cent this year. It has profited from bets on rising bonds and falling stocks, as well as wagering against the currencies of export-dependent countries.

Mr Yong said he is still positioned for a sell-off in risk assets and expects the S&P 500 — which has already dropped from more than 3,300 to around 2,750 — to fall to 2,580 in the coming weeks.

“The US will be hit hard, and will shockingly be the least prepared among the developed economies,” he said. He expects “significant

global supply chain disruption” and a “destruction” of demand as people have to stay at home because of the virus.

Mr Yong also expects monetary stimulus to have little impact in stimulating economic growth.

“When people fear for their lives, even if interest rates are negative, or cash handouts were given, it will take a while before they build the confidence to leave their homes to start spending again,” he said.

Brevan Howard, one of Europe’s best-known hedge fund firms, has been betting on falling bond yields, and its flagship fund rose 5.2 per cent in February, taking gains this year to 3.8 per cent, according to a person who had seen the numbers.

Meanwhile Brevan’s FG Macro fund, run by trader Fash Golchin,

gained 16.6 per cent last month and is now up 14 per cent this year.

Horseman Capital’s Russell Clark, a longtime bear who has been betting against stocks for years, has also gained. His Horseman Global fund is now up more than 20 per cent this year, according to investors.

Renaissance Technologies, the $60bn hedge fund firm founded by Jim Simons, has meanwhile recovered after being hit in February. Its Institutional Diversified Alpha fund gained 5 per cent this month, and is up 1.5 per cent for the year, said a person who had seen the numbers.

Its Institutional Diversified Global Equities fund is up 2.3 per cent this year, after gaining 6 per cent in March. Renaissance’s Institutional Equities fund is down 2.3 per cent this year.

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Wednesday 11 March 2020

BUSINESS DAY

NATIONAL NEWS FT What will the Fed do next to ease coronavirus threat?

US central bank under pressure to boost economy and calm market tumult

Brendan Greeley and Colby Smith

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onald Trump has resumed his demands for the “pathetic, slow moving” Federal Reserve to lower rates in the face of the coronavirus, and “Also, stimulate!”

The Fed has, of course, already lowered rates by a surprise half a point, something it had not done since the financial crisis. But it has also been busy since, in ways the US president might not have noticed.

The Fed is now fencing with both hands: having eased monetary policy to support growth, it is now expanding liquidity policy as well — moving extra cash out to banks to make sure financial markets function cleanly through the disruption caused by the outbreak.

Here are five things the Fed could still do.

Keep cutting Investors have already bet that the Fed will announce another interest rate cut at its next scheduled meeting on March 18. A big one, of threequarters of a percentage point. That would leave rates just one quarterpoint rate cut away from zero, a level not seen since 2015.

If markets become disrupted, it’s much more important to keep funding and credit flowing than to cut rates another 50 basis points Nellie Liang, Brookings Institution economist Zero looks like a limit. In the minutes of October’s meeting, a rare consensus of “all participants” — every single Fed president and governor — said that negative rates were not a good tool for the US. They had not worked well abroad, they concluded, and would prevent America’s banking sector from lending.

A drop in short-term rates may

not be the most useful response to the outbreak anyway. “A rate cut will not reduce the rate of infection. It won’t fix a supply chain,” Jay Powell, Fed chairman, said in his press conference last week. “We get that.”

The most recent cut “certainly is a cushion”, said Nellie Liang, an economist at the Brookings Institution who was the first director of the Fed’s Division of Financial Stability. “But if markets become disrupted, it’s much more important to keep funding and credit flowing than to cut rates another 50 basis points.”

Provide more liquidity to the banking system On Monday, after a collapse in oil prices panicked investors, the New York Fed announced it would increase the amount of cash it provides to banks through short-term lending in the repo market, where investors swap high-quality collateral such as Treasuries for cash.

Krishna Guha, vice-chairman at the investment bank Evercore ISI, called it a “baby step”, pushing instead for the Fed to “pull the trig-

ger” on larger liquidity measures.

Mr Guha said the central bank should consider offering up three or six-month loans, not just the current overnight and two-week loans being made available.

In 2007, as the financial crisis began to unfold, the Fed established the Term Auction Facility, or TAF, through which it offered one- and three-month cash loans to any bank, not just to its select list of “primary dealers”. The Fed could relaunch it with a simple vote from just its board of governors.

Charles Calomiris, a professor at the Columbia Business School who talks frequently to Fed policymakers, said promising to act might be as good as acting. “We stand ready to make sure markets are functioning in an orderly way”, could be a powerful message if the Fed were to say it, he suggested.

With the US Treasury, provide more liquidity to more institutions Under section 13 (3) of the Federal Reserve Act, the Board can decide in “unusual and exigent circumstances” to buy “notes, drafts and bills of exchange” — a way to

provide funding for financial institutions that are not banks, such as broker-dealers who trade stocks and bonds, which do not have access to the Fed’s other lending facilities.

But these purchases have to be used to shore up the financial system, and they couldn’t be used to prop up failing companies. And they would have to be temporary.

The Fed did this during the financial crisis, but Congress tightened up the rules afterwards, mandating that the Fed would have to consult with the Secretary of the Treasury if it wanted to do it again.

Jan Hatzius, chief economist at Goldman Sachs, said such a move was unlikely. “It would probably take a material further deterioration in market conditions and functioning for such facilities to be re-established,” he said in a note.

Roll out QE4 In contrast to their aversion to negative rates, policymakers have suggested they would consider fighting any future downturn with another crisis-era tool, quantitative easing, in which they would buy medium- and long-term US

government securities — and that they would do so “earlier and more aggressively than in the past”, according to meeting minutes. The Fed used QE three times after the crisis to bring down long-term rates and stimulate the economy.

In a speech in late February, Lael Brainard, a Fed governor, looked back at the financial crisis and concluded that “in some cases around the world, unconventional tools were implemented only after long delays and debate, which sapped confidence, tightened financial conditions, and weakened recovery”. She suggested the Fed not make that mistake.

The Fed does not appear to be ready yet. In his press conference after the surprise cut, Mr Powell said that “in the current context”, the Fed had no plans for monetary policy other than lowering rates.

With Congress, roll out ‘Super QE5’ On Friday, Eric Rosengren, president of the Boston Fed, said that if both policy rates and the yield on 10-year Treasury notes went to zero and stayed there, it would be difficult for either rates or Treasury purchases to have an effect on financial markets. You cannot drag something down when it is already on the floor.

In that case, he said, the Fed might consider buying “a broader range of securities or assets”, as Japan’s central bank has done through purchases of equities.

Mr Rosengren was floating an option well outside anything imagined in the Fed’s current rule book, however, one that would require new legislation from Congress.

There is no indication that anyone on Capitol Hill wants to try it yet.

Anyone who remembers what it took to pass and carry out the DoddFrank financial reform bill might expect it would take a much bigger crisis for anyone in Washington to consider doing it again.

Budget 2020: Sunak unveils £30bn stimulus to counter UK coronavirus shock UK chancellor announces biggest rise in borrowing for 30 years Sebastian Payne and Chris Giles

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ishi Sunak launched a £30bn fiscal stimulus package to counter the shock of the coronavirus outbreak in his first UK Budget, measures that aim to prepare for economic turbulence while also delivering on the Conservatives’ pledge to address regional inequalities.

The UK chancellor acknowledged the coronavirus would cause “temporary disruption” to the economy but said the government wanted to mitigate the impact.

He announced that statutory sick pay will be available to all those advised to self-isolate from the virus. The government will

Rishi Sunak leaves Downing Street on Wednesday morning to deliver his first Budget © Charlie Bibby/FT

refund the cost of statutory sick pay for up to 14 days to small and medium-sized businesses at a cost of £2bn. www.businessday.ng

He also pledged that the National Health Service will have however many “millions or billions” it required to tackle the ill-

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ness. “Whatever it takes, whatever it costs, we stand behind our NHS,” he said.

Mr Sunak set out a range of targeted measures to combat the spread of the virus and its impact on the economy. The Budget followed an emergency rate cut by the Bank of England from 0.75 per cent to 0.25 per cent.

A loan guarantee scheme will be launched for banks lending to small businesses up to £1.2m. Business rates will also be scrapped for the next year for hospitality companies, venue owners, galleries and cinemas with a rateable value of up £51,000 to help cushion the blow from decreased demand. Smaller businesses that pay no business rates will receive a £3,000 cash grant worth £3bn. @Businessdayng

The chancellor told the cabinet on Wednesday morning that the coronavirus was “front and centre in our minds” in writing the Budget and the measures he announced “will make the UK one of the best placed economies in the world to manage the potential impact of the virus”.

Mr Sunak’s statement marked the end of a decade of austerity, with significant increases in capital and day-to-day spending, financed primarily by extra borrowing.

“We are doing everything we can to keep this country and our people healthy and financially secure. We are clear this is an issue above party politics, we will do what is right for the country,” he told MPs.

Thursday 12 March 2020

BUSINESS DAY

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POLITICS & POLICY Uzodinma sends 22 commissioner-nominees to Imo House of Assembly for screening MIKE OCHONMA

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overnor Hope Uzodinma of Imo State has submitted the names of 22 commissioner-nominees to the Imo State House of Assembly for screening.

This is coming after the Supreme Court set aside the ruling of the Imo State Election Tribunal and that of the Federal High Court that earlier affirmed the victory of Emeka Ihedioha of the People’s Democratic Party (PDP) and upheld the election of Hope Uzodinma of the All Progressives Congress (APC) as the duly win-

ner of the last governorship election in the state.

Only last week, a panel of judges that reviewed the case brought by the ousted former Governor Emeka threw out the appeal filed by the PDP candidate, thereby setting the stage for Uzodinma to be at the helm of affairs in Imo State till the next four years.

The names of the 22 commissioner-nominees which include five females as announced by the state legislature are Iyke Njoku, V.E.O Ikegwuoha, a professor; Doris Akubuo, Dan Oguh, Noble Atulegwu, C.C. Osuala, Lambert Orisakwe and Obiageli Ajoku.

Others are Nkechi Ugwu,

Hope Uzodinma

‘Azebamwan, co-dissidents in EPM should accept Edo APC’s olive branch before it’s too late’

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pecial Adviser to the Edo State Governor on Media and Communication Strategy, Mr. Crusoe Osagie, has urged members of the dissident group, Edo Peoples Movement (EPM), which was proscribed by the Edo State Chapter of the All Progressives Congress (APC), to accept the olive branch extended to them by the party under the leadership of Governor Godwin Obaseki before it becomes too late.

Osagie, in a statement, said the party is willing to re-admit its remorseful members, who were led astray by Comrade Adams Oshiomhole and the EPM, noting that the window of opportunity is still open for them to retrace their steps.

He said that one Chris Azebamwan, who recently made statements against

the governor, has no locus standi to speak for the Edo State chapter of the party, as he has been suspended and is not a member of the State Executive Committee.

Ac c o rd i n g t o O s a g i e, “We have just learnt that a suspended member of the party, Chris Azebamwan made statements against the governor at a press briefing.

We want to inform members of the public that Azebamwan has been suspended from the party and therefore has no locus standi to speak on behalf of the party in the state.

“We urge Azebamwan and his co-dissidents to grab the opportunity presented to them by the party to retrace their footsteps so they can duly be readmitted. The window of opportunity is still open, but will close soon. So,

they should do the needful before it is too late.”

Noting that the state governor was not behind the travails of the suspended National Chairman of the APC, Comrade Adams Oshiomhole, he said, “We want to reiterate that the state governor is not behind the travails of the suspended national chairman. Comrade Oshiomhole is only reaping the consequences of his actions and inactions while he served as the national chairman, some which include the efforts to destabilise the party in the state. Others are his tactless handling of the crisis in the state chapters across the country, including the conflicts in Zamfara, Adamawa, Taraba, Rivers, Bayelsa and other states where his draconic stance cost the party dearly.”

APC crisis: Oshiomhole opposes Obaseki’s proposed meeting James Kwen, Abuja

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he South-South national vice-chairman of the ruling A l l P ro g re s s i v e s Congress (APC) Hilliard Eta who is believed to be in the camp of the embattled chairman of the party, Adams Oshiomhole Wednesday distanced the leaders of the party in the zone from the consultative meeting called by the Governor of Edo State, Godwin Obaseki.

G overnor Obaseki rep o r t e d l y s e nt l e tt e r s o f invitation to leaders of the party in the zone, to attend a C o n s u l t at i v e m e e t i ng on Thurs day, obviously to discuss the fate of Os-

hiomhole, whom he vowed to ensure his removal from office.

However, Eta in a swift reaction said the Edo Governor has no pow ers to call such meeting as he confirmed seeing the invitation Obaseki was sending out to people inviting them for a meeting.

According to him, “I am calling on all our par ty leaders to shun the meeting because he has no right to convene such meeting. I am the South-South vice chairman of the party and any APC leadership meeting is convened by me.

“I have also communicated to our political leader in the zone, the Deputy www.businessday.ng

Simeon Ibegbulem, Kingsley Ononuju, Declan Emelumba, Enyinnaya Onuegbu, Rex Anunobi, Raph Nwosu, Fabian Ihekwueme, To ny Um ez u r i ke, Iyke Umeh, Mathias Emejuonu, Love Ineh and Osunkwo.

Following the submission of the names, the Speaker of the House had set up an ad-hoc committee for the screening of the commissioner-nominees with Obinna Okwara as the chairman of the committee.

Other members of the committee include Kennedy Ibeh, Frank Ugboma, Eddy Obinna and Uju Onwudiwe. All the nominees are expected to submit all necessary documents.

Senate President, Senator Ovie Omo-Agege and he is not aware of any such meeting. So we are calling on all our leaders not to attend any such meeting because it is ill conceived and ill motivated.

“At this point in time we are focusing on how to strengthen our great party under the leadership of Adams Oshiomhole and not to destabilize the party.

“We urge all stakeholde r s i n c l u d i n g g ov e r n o r Obaseki to follow the constitution of the party which is supreme because any meeting called by him without the proper procedure is null and void” he maintained.

Ihiala LG backs Orajiaka for governorship race

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he entire Ihiala Local Government Area has unanimously pulled their weight behind the CEO of Auldon Toys, Paul Orajiaka, on his quest to become the next governor of Anambra State in the 2021 gubernatorial race.

The declaration was made at Odoata Ihiala by the political class, led by Kenneth Emeakayi, women leaders and youth leaders of Ihiala, who all pulled their weight behind Orajiaka, following a motion initiated by Hon. Simeon Ohajianya and seconded by Hon. Theo Nnorom.

Other distinguished personalities present at the meeting include; former member of the House of representatives for Ihiala Federal Constituency, Hon. Vitalis Okafor; former members of the Anambra State House of Assembly; former Anambra State commissioner; Hon. Bridget Obi; former chairmen of Ihiala Local Government Council, S.I. Nwaeme; Hon. B.I. Abajuo; Chinedu Ukachukwu; former deputy chairman of Ihiala Local Government Council, G.O. Eleanya; former Chairman of ANPP in Anambra State, Ichie Mike Ejezie, among others.

In his speech, Emeakayi said: “The political class in Ihiala, without a doubt, has carefully appraised the pedigree, philanthropic contributions to the state and background of the Harvard-trained businessman who has done well to excel in all his chosen fields with remarkable success to both and collectively come to a clear conclusion that he is more than suitable for the exalted job”.

Emeakayi said that the

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show of support became necessary for the progress and development of Ihiala community and Anambra.

According to him, “It is a well-known fact that Ihiala is to produce the governor irrespective of party affiliation; it is the community that will bring out the candidate that will run for the governorship race. To this end, we need an individual with the perquisite capacity, capability and most importantly the competence to lift Anambra to new highs, and Paul Orajiaka we strongly believe can deliver on this task”.

“The performance of the incumbent government in the community is commendable but more still needs to be done.

Theo Nnorom, in his remarks, said that the progress and community development of Anambra was the priority of all well-meaning indigenes of Anambra State. “In Paul, we are confident that he is more than good for the position.

Going by his background, he is from a reputable family and his father, popularly known across Anambra as M.O. Orajis, Enwegbaraku 1 of Azia, a philanthropist and a very good man at that, impacted the lives of Ihiala community with his numerous good deeds. His son, who we have now all agreed to support is a man of vision, with great business acumen as shown with the success he has attained in building his business from scratch to a thriving empire.

We believe he has all the qualities needed to steer Anambra to greatness, to this end we have all decided to pull our weight massively behind him.” @Businessdayng

Alleged N29bn fraud: Nyako says I’m not guilty Felix Omohomhion, Abuja

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urtala Nyako, the former governor of Adamawa State, Wednesday, said he has no case to answer in the N29bn fraud case filed against him by the Economic and Financial Crimes Commission (EFCC).

He told a Federal High Court, Abuja, that the money laundering charge filed against him and others, was spurious and lacked evidence.

Nyako, who prayed the court to strike out the suit in a no-case submission motion filed by his team of lawyers led by Kanu Agabi, on behalf of 1st, 2nd, 6th and 7th defendants, told the court that the prosecution has not been able to make out any case against him.

He said there was no case against him that requires him to open defence.

He said all the 21 witnesses called by the prosecution, no one was able to provide a single shred of evidence that suggested even remotely that a case had been made out against them.

“Apart from the fact that the charges are in themselves incompetent and irredeemably bad thereby rendering the entire trial a nullity,” Nyako said.

According to them, the prosecution made allegations against persons and companies who were not charged.

“The allegations made against these companies and individuals constitute elements of the offences charged.

“In order to succeed in all the counts, these elements must be proved. These elements cannot be proven behind the back of the companies and individuals against whom the allegations were made, having not been charged.

“Even if these companies and individuals were called as witnesses, that would not have been sufficient but none of them except Mary P was called.

“The failure to charge these companies and individuals against whom allegations were made in these counts constitute a failure of the prosecution to prove essential elements of the counts.”

Justice Okon Abang, the trial judge, after listening to the submission of the defendants gave the prosecution seven days to file and serve their written address.

The court then adjourned the case to March 25 for parties to adopt their written addresses for and in opposition to the defendants’ no-case submission.

industry Insight

BUSINESS DAY Thursday 12 March 2020 www.businessday.ng

How Nigerian manufacturers can survive falling oil prices MICHAEL ANI

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t could be 2016 again for many Nigerian manufacturers who fail to embark on strategies that would reduce their business exposure to the shocks that come with falling oil prices.

This could come with a lot of devastating consequences as seen four years ago when tumbling oil prices and low production caused a naira devaluation that jacked up commodity prices to an all-time high, eroded investments, increased stock of inventory and nearly brought economic activities to a halt.

And now the Nigerian economy has been caught unawares in a similar scenario it faced in 2016, after the outbreak of Coronavirus spreads into over 67 countries causing a slowdown in demand for global oil prices.

Brent crude price slumped by over 40 percent to $30 early hours on Monday, its biggest daily fall since the Golf War in 1991.

The abrupt drop in the prices of oil happened after Saudi Arabia, world’s biggest exporter of oil, decided to use its weapon to force Russia back to the negotiating table, after Moscow said it was not sticking to a 1.5 million barrel per day production cut with members of the Organisation Petroleum Exporting Countries (OPEC).

The disagreement between OPEC and allies forced Saudi Arabia to enact an oil price war by pumping in more crude in the market while still slashing the price at which it sold its oil in order to attract more buyers.

The supply glut, alongside the slow demand in the commodity, pushed the price to its lowest level since 2017. This has led to global sell-offs in stocks on Wall Street and caused yields on the U.S treasury bills to rally as investors demanded higher yields to keep their investments

S&P 500, known as the stock market index that tracks the stocks of 500 large-cap U.S companies, has shed 13 percent since the start of the year, with Goldman Sachs on Tuesday slashing its midyear forecast for S&P 500 on the back of a further fall in the market index.

The Dow Jones Industrial Average, an index that tracks 30 large, publicly-owned companies trading on the New York Stock Exchange (NYSE) and the NASDA, is also not left out as the index has shed over 15.76 percent year –to-date, The impact of the deadly Coronavirus, which has killed over 3,800 people and infected 120,000 people across the world, has caused global economies to shiver with many of them cutting their growth forecasts for the year.

Oil price gained momentum to $36 per barrel around 16:26 Nigerian time, after the U.S president Donald Trump, Tuesday, proposed a payroll-tax cut to boost the U.S economy.

Back home, Africa’s largest economy is already having a hard time being that it gets over 85 percent of its dollar liquidity

‘‘

Although the effect of the Coronavirus, which has resulted in the collapse of oil prices, is a macro and not a micro issue, as it is not within the powers of businesses to solve, it requires a fiscal stimulus response

and over 70 percent of revenue from crude oil sales. The commodity is already trading below the $57 mark which is the benchmark for its budget.

Falling oil prices do not align well for Nigeria as it would make the government handicapped in carrying out its planned expenditure and also put pressure on the naira.

Already, the country has blown over $8 billion of its reserve as it continues to defend the naira from falling against the dollar.

Sustained price at a low level could further lead to depleting reserves as the country would have less dollar to cover up for its import bills.

At the start of the year, Godwin Emefiele, governor of the Central bank, had assured investors that devaluation would only be considered if oil prices traded below $45 per barrel while external reserves fell below a $30 billion mark.

Already, with oil price trading as low as $36 per barrel, the first condition for a devaluation has been met. External reserve stood at $36 billion, based on CBN data, and has come under pressure as investors sell off Nigeria’s assets.

This has made analysts say devaluation might be in the cards for the West African nation, which has fought through its reserve to see its currency stabilise for close to four years.

Zainab Ahmed, Nigeria’s finance minister, has called for the review of the budget to reflect the current fall in oil price. The CBN, on the other hand, has convened a confab of over 75 business leaders from both the private

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Analysts advise that manufacturing companies that are heavily reliant on the importation of raw materials should consider local alternatives and public sector to discuss the growth of the economy in the wake of the current macroeconomic realities Aside from the fall in oil prices, Nigeria is having a tough time selling its already exported crude, with over 50 of its oil export cargoes currently unsold, according to statement

by Mele Kyari, group managing director(GMD) of state-owned oil company, the Nigerian National Petroleum Corporation (NNPC).

Manufacturers need dollars to import inputs or buy equipment for their day-to-day running of their operations. They also require foreign exchange to buy certain types of packaging materials and ramp up production.

An acute dollar shortage owing to falling oil prices could make manufactures get dollars at higher rates, which would lead to an increase in the cost of

production.

With the weak consumer income, manufactures, especially those producing substitute goods, might find it difficult transferring the high cost of production onto the consumers. This might push some out of business as it did in 2016 when 54 manufacturing firms shut down. It could also hit their revenues and profits hard.

Although the effect of the Coronavirus, which has resulted in the collapse of oil prices, is a macro and not a micro issue, as it is not within the powers of businesses to solve, it requires a fiscal stimulus response. Analysts have, however, proffered various steps to manufactures to take in order not to get too exposed to the shocks emanating from the pandemic.

One of these viable actions that could be taken by manufacturers to cushion the impact of the shock is local sourcing of inputs. Analysts advise that manufacturing companies that are heavily reliant on the importation of raw materials should consider local alternatives. This would make them less reliant on the dollar, which would be scarce due to the high demand.

Next that is related to the former is backward Integration.

Manufacturers can engage in backward integration by expanding their role to fulfil tasks formerly completed by similar companies up the value chain. It could be an outright purchase of another company that supplies the product and services needed for its production. And they can set up backward integration projects themselves in naturally gifted and less volatile states.

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