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Buhari disappoints speculators, unveils Gambari today as new CoS ... private sector unsure of economic implication Iniobong Iwok

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gainst all permutations on the likely replacement of the late Abba Kyari, chief of staff to President Muhammadu Buhari, the president left many speculators tongue-tied as he announced Ibrahim Gambari, a scholar-diplomat, as his new CoS. Shortly after the demise of Kyari, speculations were rife that Buhari was likely to choose among some familiar names in the corridors of power.

Among the names that featured were those of Babagana Kingibe, Hamid Ali, Adamu Adamu, Boss Mustapha, Nasir El-Rufai, Ismaila Isa Funtua, Buba Marwa, among others.

It was also touted that the president was not likely going to announce Kyari’s replacement until the 40 days of mourning in line with Muslim rites were over.

Continues on page 31

Inside

COVID-19: CBN says working on grants, facilities to aid researchers produce local vaccines P. 27

L-R: Olorunimbe Mamora, minister of state for health; Sadiya Umar Farouk, minister of humanitarian affairs, disaster management and social development; Mohammed Abubakar, minister of environment; Ramatu Tijjani, minister of state, FCT; Boss Mustapha, secretary to the government of the federation; Nduka Obaigbena, chairman, Thisday Media Group; Osagie Ehanire, minister of health; Tope Sonubi, managing director, Sahara Group, and Mohammed Bello, minster of FCT, during the inauguration of Thisday Dome COVID-19 Testing, Tracing and Treatment Centre, in Abuja, yesterday.

Why investors prefer Egypt to Nigeria amid coronavirus pandemic

LOLADE AKINMURELE & SEGUN ADAMS

E

gypt has continued to distinguish itself from Nigeria in the eyes of foreign investors for reasons ranging from foreign exchange liquidity to higher economic growth rate and lower inflation.

For foreign portfolio investors, foreign exchange liquidity

is the latest reason why Nigeria is being sidestepped in favour of Egypt.

Although both countries are facing dollar liquidity challenges amid the coronavirus pandemic, foreign portfolio investors say it is easier to move money in and out of Egypt than it is in Nigeria.

“In Nigeria, there’s a near $1 billion worth of trapped funds due to the dollar scarcity and the

CBN is somewhat suppressing demand as a result,” one investor told BusinessDay. “Nigeria’s foreign exchange challenge is not unique but the situation is more bearable in Egypt,” the investor said on condition of anonymity.

For the more crucial foreign direct investors, Nigeria’s appeal is less than Egypt due to faster economic growth, lower infla-

tion rate and better ease of doing business.

While Nigeria is said to be Africa’s most promising economy given its huge market and the abundance of resources, offshore investors took their patient capital to Egypt in 2019, making the North African country the hotspot for FDI on the continent.

Continues on page 31

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Poverty crisis & our governors: Where is the vision & plan?

Franklin Ngwu

W

ith the recent report on poverty and inequality in Nigeria released by National Bureau of Statistics, it is abundantly clear that we are in a crisis as a nation.

How do you explain that we have about sixteen states in Nigeria with poverty rates of over 50 percent and in some states such as Ebonyi, Jigawa, Taraba and Sokoto, it is within 80-90 percent? Are there governors and local governments chairmen in these states, a very senior British friend and an Economist, worriedly asked me. The most disturbing aspect is that the worst performing states are all governed by governors on their second terms in office and lamentably, they are all aspiring for higher or relevant positions in 2023. It is really confusing and very difficult to understand leadership and governance expectations, and the criteria used in electing leaders in Nigeria, my senior British friend aptly but frustratingly concluded!

The question is what kind of vision and strategy did second term governors like Aminu Waziri Tambuwal, Mohammed Badru Abubarkar, Dave Umahi, Ifeanyi Ugwuanyi, Darius Dickson Ishaku, Abubakar Sani Bello, Abdulahi Ganduje and Aminu Bello Massari use in their first terms and was reducing the level of poverty in their respective states ever considered an important governance issue?

When we add the emerging negative socio-economic impacts of COVID-19 to the disturbing poverty levels which many Nigerians view as underreported, any discerning mind will appreciate that we are in a most troubling and perilous situation.

Unfortunately, rather than show serious concern and required leadership and vision, majority of our governors are appallingly most unserious and even contributing to the crisis. In sane societies, the poverty report should attract serious reactions from the Nigerian Governors Forum and the governors particularly from the ones with over 50 percent poverty rates in their states. Not only are they expected to react, it is also expected that they should clearly announce strategic policies and plans that will significantly reduce the embarrassing poverty levels.

But of course, this is Nigeria where such reports don’t matter.

The leaders are neither disturbed nor the followers inquisitive and demanding good stewardship. It is the same ineffectiveness on COVID-19. If they are not announcing and implementing contradictory laws and policies in their respective states, their actions and inactions suggest more of leaders competing to have more COVID-19 cases possibly to attract more money from the Federal government.

In some instances, they are even helping to spread the virus behaving like “The Elected Sons and Agents of Corona Spread”. How do you explain our governors agreeing and implementing forceful eviction and relocation of Almajiris to their so called “states of origin” during this COVID 19 crisis? Who really bewitched Nigeria, a friend painfully asked!

As COVID 19 has further exposed the precarious state of our flawed economy and the revenue and poverty implications for our states, it is becoming more apparent that most of our governors lack the vision and leadership to lead us. Given the abundant resources we are blessed

‘

With a below per capita annual expenditure of about N137,430 as the baseline for being described as poor, lifting the citizens of Ebonyi or any other state in Nigeria out of poverty is one of the easiest things to do

with, there is no state in Nigeria that is not viable. The only thing lacking is good vision and leadership. Ebonyi state for example has no reason to be fourth state with the highest level of poverty in Nigeria with about 80 percent poverty level.

Moreover, the situation and position might even be worse if we add the numerous Ebonyi youths that constitute over 70percent of street traders and hawkers in our major cities such as Lagos, Abuja and Port Harcourt.

With a below per capita annual expenditure of about N137,430 as the baseline for being described as poor, lifting the citizens of Ebonyi or any other state in Nigeria out of poverty is one of the easiest things to do. It does not require too much expenditure nor any elaborate policy. All that will be required in the case of Ebonyi for instance is to ensure, encourage, support and supervise that every indigene of Ebonyi plants a minimum of ten palm trees for instance. It can also be any of the highly demanded fruits such as coconut, avocado, lemon, mango and orange. As a fruiting tree of each of the above trees gives about N25,000 every year, it means that the annual income of every indigene in Ebonyi will increase by N250,000. All that will be required from the state government is to provide access roads for planting and evacuation.

With every indigene planting a minimum of ten trees, a population of about three million people will translate in Ebonyi state having about 30 million palm or coconut trees. At N25,000 revenue per tree, it means that the annual revenue of Ebonyi indigenes will increase by about N750 billion after three years (required for the trees to start bearing fruits). As the money will go to individuals, if Ebonyi state government decides to place a tax of 5percent, it will receive additional annual internal generated revenue of about N32.5 billion just from one or two types of trees (for instance palm and

coconut trees). This is higher than her annual internal generated revenue of about N26.5 billion.

Moreover, with the availability of 30 million palm or coconut trees, Ebonyi state will be known as the palm or coconut tree cluster of Nigeria and expectedly, will attract investors in the whole chain with part of the N32.5 billion used to support the demand and supply expansion of the products.

Just as it can be done in Ebonyi, so it can be done in Enugu and Abia. It is clearly a further confirmation of bad governance on the part of South East governors that only Anambra state made it in the first ten states with the lowest poverty levels. Where is the branded entrepreneurship skills of the Igbos? Is it not most disappointing that even with the heritage of Enugu state as the former capital of Eastern Nigeria, the poverty level is still about 60 percent? As I earlier asked, it is difficult to understand the economic development plans of Ifeanyi Ugwuanyi, Dave Umahi and Okezie Ikeazu.

With the proximity of the South East states, there is no reason why a detailed and robust regional economic development plan should not be developed and effectively executed. Given the already existing comparative advantage in palm trees, imagine the impact if the five South East states will agree and just plant 30 million palm or coconut trees per state.

That will give about 150 million trees with an annual additional revenue of about N4 trillion. In 2017, Indonesia made about $18.4 billion from palm oil (about N7.2 trillion). Nigeria’s encumbered 2020 federal budget is only N10.27 trillion! As they say, where there is a will, there is a way!

Dr. Ngwu is a Senior Lecturer in Strategy, Finance and Risk Management, Lagos Business School and a Member, Expert Network, World Economic Forum.

E-mail- fngwu@lbs.edu.ng

How to become an entrepreneur

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re you bored with your work or have just been furloughed? Do you wish to control your own time? Do you have a dream to start a business, employ people, deliver services, and make a positive impact on society, particularly in these unprecedented times?

But do you also feel intimidated and your thoughts shrouded by these fears: The fear of rejection: “Your idea is too small, leave business for the geniuses.”

The fear of inadequacy: “Who are you; you can’t do it; business is not for people with low capital and limited connections.”

The fear of being judged: “Business is not in your family blood, don’t even start dreaming.

The fear of failure: “What if I run out of capital and fail?”

Well, let me assure you that entrepreneurship is a skill that can be acquired by anyone.

You don’t have to be a superstar to become a businessperson.

The journey to becoming an entrepreneur The journey to entrepreneurship starts with YOU. No one is going to fight your fears for you.

You must confidently confront them and be decisive as you declare: Now is the time to start my business journey. If you can, I will advise that you save up a year’s worth of your living expense and set aside some investment. This would come handy on the proverbial rainy day. Waste no time anymore. Wake up, stand up, and let your business ideas start taking a practical, tangible form. This article gives you five factors you must consider if you want to become an entrepreneur and succeed at it.

The idea Have you ever wondered whether the ideas that you are passionate about are too small and

can’t be developed into a thriving business?

Based on my personal experience, please allow me to mention that there is nothing in entrepreneurship or politics or any other field for that matter called “small idea”. Former Prime Minister of Britain, Winston Churchill, once said: “No idea is so outlandish that it should not be considered with a searching but at the same time, a steady eye.” You need a steady eye to get your evolving idea on the path to a successful business. For example, one of the world’s renowned businessman, Richard Branson started Virgin Airlines after he was stuck at an airport in Puerto Rico on his way to the Virgin Islands. With fewer passengers going to that destination, the flight was cancelled. This inconvenience birthed a business idea in Richard Branson’s mind. He saw an opportunity to start an airline that would also fly to the Virgin Islands. Thus the birth of Virgin Airlines.

So, never underestimate the power of your ideas, especially when inspired by life experiences/problems. Any well-thought-out business idea that addresses societal issues, fine-tuned value proposition, clearly stated unique selling points and spiced up with focus and determination could produce impressive results.

The starting point Just imagine: after she gives birth, a new mother has no parenting manual. How does she begin taking care of her child? She starts by trying, fumbling, and learning along the way.

The same goes for starting a business. The best way is not to shun the emerging idea but to start, fall, rise, and from the lessons learned, become better. Your aim should be to establish a venture even when you don’t have all the components at a go. The best way to start is by selling your idea to people that you trust to support you. Steve

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Jobs, the founder of Apple, had no cash and no clients when he established Apple. What he did next is a beautiful example you can learn from: a. He persuaded a local computer shop with payment on delivery to order his non-existent Apple computers. b. Using the order he just got as evidence that he could pay, Steve jobs persuaded a dealer in computer parts to sell him the components he required to start his work. c. Jobs and a small team worked on building the first Apple PCs in their garage, delivering them on time and making a smooth profit. d. Apple had been born out of nothing.

One could contend that the complex, volatile, and ambiguous socioeconomic environment in Nigeria may make it almost impossible for a Steve Job to succeed in Nigeria. Nevertheless, there are still many Femis, Ngozis and Razaqs today who are doing well in their business in the nation.

Scale the heights Keep in mind that no business can develop on an indefinite basis. Most companies are more effective in different sizes and stages of the firm.

For example, if you desire to establish a big food business, you may realise that starting a fourperson restaurant is relatively easier. However, building a large-scale catering business may be more difficult. If your long-term goal is to be big, your strategy could be to start small, then expand later.

Seek help Build a team even if it means having freelance accountant, human resource advisors, sales personnel and IT consultants, some of whom may come free from peers, friends and family.

Get an advisory board-This would be a group of experienced non-competing professionals who can help with; ideas, challenging assumptions

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Alim Abubakre and make you accountable, shape strategy, motivate and share contacts. … and finally Skill and tenacity are significant factors that will help you drive safely on the journey of entrepreneurship. To build the requisite skills, you need to come up with a continuous personal development plan. This personal development plan would entail an honest assessment of your strengths and weaknesses as well as how to leverage your strengths to address your limitations. A development plan of how to improve, for example, your conceptual, digital, communication or networking skills should have a timeline, say six months, and a to-do list. For instance, in the next six months, you may need to read more, watch more relevant videos, attend some training and look for a mentor. Here are eleven areas that you could consider setting up a business: 1. Telemedicine 2. IT 3. Health care, 4.

Education 5. Renewable energy 6. Supply chain 7. Arts & Entertainment 8. Security 9. Fashion 10.

Agricultural value chain 11.Fin Tech. Good luck!

Dr. Abubakre is a British based Entrepreneur with an unparalleled passion for Africa, Academic, and Director with active links and engagement with Africa. He is on the advisory board of the London Business School Africa Society, lectures in a top 15 UK university and founded TEXEM, UK a consultancy firm ten years ago which has trained over 4,000 executives in the UK and Africa.

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SHAPE up like a start-up: Don’t waste the crisis Small Business handbook

Emeka Osuji

I

f the lockdown ends today, what are you going to do about reopening your business? Will you go straight to your office or shops, clean up the rooms and get going with business, or are you going to spend a week calling the public utilities such as Eko Electricity Distribution, the Water Corporation and the security service providers, to bring you their bills so you can pay and have services restored?

The answer to these questions will depend on what you did with the crisis.

There is an adage that says “Never waste crisis”. This means, not only that we must use our lockdown time effectively and actively to work the crisis, taking advantage of every opportunity that it offers, but also to learn from its pains.

There are many money-making and money-saving events intertwined with the crisis. Only the initiated will find them. Who could believe that Nigerians are masters of mask production?

As I believe that most of us are aware, every crisis has a twin brother which is called opportunity. Each crisis we face, no matter how bad, offers us opportunities to make progress in some aspects of life. This is why in Chinese,

the same word or symbol that represents crisis also represents opportunity.

So, before you know it, Wuhan, China, which gave us COVID-19 (no thanks to them), will be making progress because of it and in spite of it, while the rest of the world focuses on the problems it brought. Two different perspective but one is superior.

So what do we need to do? In addition to the tips we have shared regarding house-keeping: customer maintenance and client protection, route preservation, in the sense of supply and distribution lines protection, digital education and staff preservation and training, more still needs to be done in the areas of readiness to relaunch.

The world is gradually coming to terms with the fact that our lives may not stop so that COVID-19 will pass. What if it walks slowly or is not in a hurry or outrightly refuses to pass. We are going to see businesses open even with full awareness of the risk implied.

Without doubt, almost all businesses are going to be like start-ups, not minding how long they have been in operation, when the crisis is over.

The world is going through a kind of war, and when wars end, there is hardly any difference between old and new companies, rich and poor, educated and illiterate. Those who saw Cyprian Ekwensi at the end of the war, when he demonstrated that real honour lies in being able to do publicly what the public thinks is menial to you, will understand that there is no big business now. Every business is looking for survival. Everyone will sort of begin afresh. When this COVID-19 war is over your old business will have some of

the traits of a start-up, and the extent of those traits could be deep or shallow, depending on what you did with the crisis. More important is how you adapt to the new normal. Don’t allow your weight to pull you down. Don’t waste the crisis. A crisis wasted is a fortune lost.

It is not going to be enough to be one of the trees in your former forest that will still be standing, when the guns stop booming. Many businesses will be living dead or at best scarecrows.

That is how deep the pit is and that is from where you must clamber. That is also not a job your pastor or Iman will do. It is entirely up to you. So we need to do a few things that will ensure that we hit the ground running at the end of the day.

First we must understand the factors that have impacted our business, and what the new normal for our industry is. I do hope that we all understand that the new normal is not a blanket cover for everything. While certain elements of it are common to all businesses, such as digitization and social distancing, there are other industryspecific new norms that will arise.

For instance, some businesses entail customers clustering together as of necessity. Their new normal in that regard differs from that of a courier firm, for instance. Some events have changed the timelines and ability of businesses to resume normal operations.

For starters, the nature and stringency of the stay-at-home order in their area of operation may differ from mine as of now. There are varying degrees of lockdown in Nigeria. The number of persons infected by COVID-19 seems

‘

Without doubt, almost all businesses are going to be like start-ups, not minding how long they have been in operation, when the crisis is over

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

Because they care

F

or long, the way of the world has been to exclude others. Making others feel excluded while we’re part of an exclusive “club” generally makes us feel good, powerful and special. Enjoying privileges reserved only for those worthy enough to belong to this group has an appeal to the ego, that is almost irresistible.

This is by no means a Nigerian thing or an African thing, it’s a human thing. Some societies have merely advanced to a level where this primordial inclination has become largely subsumed by elevating the notion of the common good.

It may be worthy to note that feeling on the outside, out of the loop, that we don’t belong or are that we’re not relevant and somehow inferior, is a major cause of mental illnesses so prevalent globally nowadays. The interesting thing is that by tradition, Africans have always been communal people, where everybody is included and everyone matters. We were in many ways more democratic in our style of governance and in the way we conducted our daily lives than we are now, as we continue to practice the mode of democracy foisted on us. Back then, important decisions were often taken collectively, involving all members of the community and not just a select group or a privileged few.

The African ethos of those days was not too different to that of some countries of the Orient today; such as China and Japan, where the interest of the society is placed before the interest of the individual. It’s no wonder the source of the adage, “it takes the village to train the child” can be found in Africa. This same disposition proved invaluable in helping the nationals of these Oriental countries to toe the lines dictated by their leaders when it came to containing the Coronavirus outbreaks in their country. This can be juxtaposed to the situation in the West where long held democratic ideals made it difficult for citizens to obey government directives and stem their natural urge to resist.

As an illustration, the city council in Huntington Beach, California, recently voted in favour of authorising the city attorney to initiate legal action

against the state. Not because they were suffering the unbearable pangs of hunger caused by the lockdown but because their beaches remained “locked” while those in other counties have been reopened to the public. Asian societies on the other hand, adhere to philosophies which prioritise community needs over the personal benefits of individuals. The state is always primed to put the collective welfare of the people over individual rights. With the benefit of recent happenings because of the pandemic, one can easily contrast this with Europe and North America, where warnings were dismissed by heads of government, local leaders, and the public. Merit can be found in the argument that a strong sense of community will ensure people take actions that will indicate their support of each other.

The story of The Abolarin College at the ancient town of Oke-Ila Orangun, Osun State, founded and funded by Oba Dokun Abolarin, is a truly inspiring one which epitomises a fundamental aspect of godliness. I believe it would be helpful for us to understand that godliness goes beyond just adhering to fasts when called and attending all church programs but instead can be defined as conducting one’s life in a way in which God would readily agree, mimics His character.

Abolarin College was established with one purpose in mind. To provide free qualitative education to indigent children, all because the man involved refuses to accept this should remain the exclusive preserve of the well-to-do. And when I say free, I really do mean free, as the school provides everything, including school uniforms, school bags, writing materials, feeding, bed linen and anything else you can think of, absolutely free for it’s one hundred or so pupils, and making no demand of parents who can barely keep head above water. As a further demonstration of his large heartedness and disposition to include rather than exclude, admission is not limited to his subjects only. The pupils come from all over the country. However, if the child is not conversant with the Yoruba language, he or she must learn it,

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in addition to English and French, because these are the languages alternately used to conduct their school assemblies.

One thing I find fascinating though is Kabiyesi’s humility, uncommon in this part of the world, by regularly putting aside his royal robe and adorning the teacher’s garb, as he teaches his pupils too. Money cannot buy the invaluable lessons this simple gesture imprints on the impressionable minds of these children. To lead is to serve. This is certainly one Oba who recognises the motivational power inherent in leading from the front. Reminiscent of the Japanese educational philosophy of raising leaders by inculcating this spirit of service in pupils, Kabiyesi’s pupils too must carry out daily chores for the benefit of all.

For example, pupils take it in turn to help the cooks in the kitchen to prepare school meals and just as the female pupils braid each other’s hair, it is the duty of the boys to barb each other too.

And before your imagination gets the better of you and you begin to wonder about how squalid an environment the school premises must be because it’s free, let me put you straight. This is a beautifully built institution powered by two large generators, donated brand new by an organisation which keyed into its noble vision. The children are always neatly attired in their comely uniform and all pupils are provided with their own personal computers, in addition to the provision of many other modern-day facilities, required to provide a conducive environment for learning.

There are many ways in which one can define character. It can be defined as possessing the moral antenna to first seek out and thereafter to attach appropriate importance to the right values. It can also be described as having the moral strength to abide by these values even when it may not be convenient to do so. There are times when it may even be detrimental to one’s personal interest. In my opinion, character is also evident when one sees the big picture and pursues its fulfilment over the long term, placing this over and above the gratification of serving one’s personal interest.

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to have been the basis of the severity in most cases. Currently, only two states have not reported any infections yet.

Proper social distancing (minimum of six feet or two meters between individuals) within the business locations may be a challenge. Come to think of it, how many people will like to be in a crowded enclosure soon after this event? Even long after, some people will still be apprehensive. This means that our ability and level of contact with customers and other employees will likely be impaired. This is more so for businesses that involve a lot of human contact, such as spas, beauty salons, gyms and classrooms. It is going to be less so for restaurants, retail stores and others with more indirect contacts.

A certainty in all of this is that Nigeria will never be the same after this event. Every business entity will have to relearn the rules of the new normal, as if it was a start-up. It will confront serious challenges as we begin our movement along a new trajectory to recovery. And we must not forget that consumers still will have their fears as companies open their doors. This is the time to begin to take full ownership of our destiny.

Operators must know how much their area of operation was impacted. We must do all these with an eye of forces that will boost sales immediately. This is also the time to be sure the water is running and the light supply has not been cut. Recheck your surroundings, just as a start-up about to open its doors to the public would.

Character Matters with Daps

Dapo Akande This is an attribute sacrosanct to nation building and it is one, Kabiyesi is endeavouring to inculcate in all of his pupils. What better way is there to do this than to lead by example.

I believe it was Mother Theresa who once said, “We ourselves feel that what we are doing is just a drop in the ocean. But if that drop was not in the ocean, I think the ocean would be less because of that missing drop. I do not agree with the big way of doing things.” This epitome of love is telling us we don’t need to wait until we’re able to do the grandest gestures because many of us may never find ourselves empowered enough to do so. We can however do what we’re able, in our little corner. Unknown to most people, that’s indeed how the world changes; doing the little that you can and not leaving it to the other.

In a country where we have far more people living in poverty than those who don’t, it’s fairly obviously many brilliant children, due to privation, must be falling through the cracks every day.

Kabiyesi and those led to support him, may never get to fully appreciate the impact their actions are having, not just in the lives of these children, but in the lives of a whole new generation. Just because they care.

Changing the nation...one child at a time Akande is a Surrey University graduate with a Masters in Professional Ethics. An alumnus of the institute for National Transformation and author of two books; The Last Flight and Shifting Anchors. Contact: dapsakande25@ gmail.com

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BUSINESS DAY

Wednesday 13 May 2020

comment Nigeria: A chance for re-awakening Austin Okere

B

y March 2020, it had become very clear that COVID-19 was a global pandemic.

The news media was awash with a shock announcement by the Central Bank of Nigeria on her exchange rate policy.

“In what can be regarded as an unexpected yet positive move, the Central Bank of Nigeria (CBN) on Friday moved the official exchange rate from N307/ $1 to N360/ $1. At the Investors and Exporters Window (I&E), the CBN also adjusted the NGN peg upwards by 5.7 percent, as it raised its intervention rate to N380 from N366.” this caption was Dateline Mar 24, 2020 on Nairametrics.com.

I wrote this article three years ago on January 20, 2017, after a sharp drop in oil prices – and surprised how relevant it is even today. What was our experience as a country, what did we learn from it and how is it that we have once again been caught desperately unawares?

Why can’t we fix our educational system and send our children to schools here? And fix our hospitals and treat our sick here, instead of our notoriety as big spenders on medical tourism?

Nigerians are gradually coming

to terms that the cheese has indeed moved this time. The days of lucre and easy money, fuelled by petrodollars are far behind us; no thanks to shale oil and other sources of energy.

The aimless swagger has been replaced by a renewed sense of purpose and the need to produce in order to survive. No wonder Agriculture seems to be the only game in town these days. To borrow from the words of Pravin Gordhan, Finance Minister of South Africa, it is now Agri-Cool. All manner of yesterday’s nose thumpers now proudly call themselves farmers; it is beginning to have a nice ring and tone to it.

Unlike other oil boom and busts, it seems that this particular bust is here to stay. We seem to be in a stalemate. If we cut production to shore up prices, the shale producers will seize the opportunity to increase their own production and drive the prices right down. Not to talk of the conscious global effort towards cleaner renewable energy, and the significant improvement in its technology and adoption. COP 21 in Paris cemented the commitment to clean environment and green energy.

Time there was not too long ago in Nigeria, when first class and business class seats on commercial airlines were filled way before economy seats, and private jets littered all our airports.

But how did we get here and how did we subsequently fall from such deluded Olympian heights? The recurrent mistake we keep making as a nation is failing to anticipate and plan for our oil windfalls. There have been many boom opportunities since Nigeria joined the Organisation of Petroleum Exporting Countries (OPEC) in 1971; Oil prices increased by 400 percent in six short months after the Yom Kippur War following the Arab Oil Embargo. Crude prices doubled from $14 in 1978 to $35

per barrel in 1981 following the Iran/ Iraq war. The price of crude oil spiked in 1990 with the uncertainties associated the Iraqi invasion of Kuwait and the ensuing Gulf War – the so called “Gulf War windfall” under then Head of State Ibrahim Babangida. The report of the panel of enquiry headed by the eminent Pius Okigbo in 1994 was critical of the government’s role in mismanaging the $12.4 billion windfall. Perhaps most of it had gone with the wind.

Data from the U.S. Energy Information Administration shows that the latest windfall happened between February 2011 and August 2014, under the Goodluck Jonathan presidency, when oil prices were much in excess of $100 per barrel. Another golden opportunity was squandered, characterised by organised kleptocracy of epic proportions as has now come to light.

There is a saying in my native Igbo culture that an abomination that endures for long enough becomes part of the culture. Corruption came close to achieving this status in Nigeria.

Our inflated egos were matched with the adventure into GDP rebasing in 2014 which put Nigeria as the largest economy in Africa, overtaking poster boy South Africa. Alas this new status, propped up by an artificial exchange rate sustained by huge foreign reserves did not last. As the reserves dwindled, partial reality in the foreign exchange rate has wiped away close to half of the estimated $510 billion GDP, and along with it our bragging rights.

I say “partial reality in the foreign exchange rate”, because I still feel that a differential of over 60 percent between the official rate and the parallel rate to the dollar seems to suggest that one of the rates is way off the mark. The acute shortage of the “official dollar” seems to suggest that the parallel rate is closer to the mark.

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It should be understood that such distortions open huge arbitrage opportunities for those with access, which distract from productive pursuit. Rent seeking from allocation of dollars creates a new crop of overnight billionaires akin to those created during the era of petroleum subsidy

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pandemic in short supply, medical shipments have been seized in national interest while some countries have ceased export of these items. In one of the most bizarre incidents, shipments of PPEs ordered by France from China were literarily hijacked by traders who paid a higher amount right there at the airport. So, you imagine if Nigeria had invested in its local fashion industry in a systematic manner and one which has backward integration even to the cotton farms, we may well be exporting PPEs. Nigeria can do it. The country has successfully implemented a local content policy that has yielded great economic and industrial benefits in the oil and gas sector. Last week, the Local Content Act, which is the ground norm for domesticating technical and commercial activities in the oil and gas sector that hitherto were either exported or controlled by expatriates and other countries, was 10 years old. The major objective of the law, in basic terms, is whatever job a Nigerian can and is qualified to do, it is forbidden that such jobs be given to an expat.

Same applies to service companies. The legislation went further to create the Nigerian Content Development and Monitoring Board (NCDMB) to implement the law and also develop capacities of Nigerians and their companies to play strategically in the oil and gas industry.

Qualified Nigerians and local service companies will be particularly delighted at the growth they have experienced since the Local Content Act came into being. There have been many achievements, some of them signifying

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Okere is the Founder of CWG Plc, the largest ICT Company on the Nigerian Stock Exchange & Entrepreneur in Residence at CBS, New York. Austin also serves on the Advisory Board of the Global Business School Network, and on the World Economic Forum Global Agenda Council on Innovation and Intrapreneurship.

Austin now runs the Ausso Leadership Academy focused on Business and Entrepreneurial Mentorship

a turning point. While Egina FPSO, which was partly fabricated in Nigeria and a first of its kind, stands out as the apogee of growing technical and industrial expertise, the concomitant benefits are even more important. An engineering and fabrication yard was established in Lagos to integrate the FPSO vessel. Projects of this type will in future be fabricated in Nigeria and will no longer be exported. Indeed, Nigeria will likely attract FPSO fabrication and integration projects from oil producing hubs in Africa.

NCDMB has been fortunate to have visionary and highly competent helmsmen since it was established. With a sharp focus on the development aspect of its mandate, NCDMB, under Simbi Wabote, its current CEO, has been quite aggressive in deepening Nigeria’s role in the industry by laying the building blocks for an industrial transformation. Projects such as the oil and gas parks; establishment of modular refineries; Project 100 where indigenous companies with promise are supported to grow into industrial powerhouses; the Nigerian Content Intervention Fund, which eases access to fund for Nigerian companies and the 10-year strategic roadmap that has the potential to move local contribution to the country’s oil and gas industry from its current 37 percent to 70 percent by 2027. These major steps forward, among many others, show what is possible when there is a good mix of vision, planning and high capacity to implement the plans.

This model can be replicated across many sectors. Take health, for instance. When it was

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The thing about the market is that you can distort it for a while, but you cannot hold it back for long. The market is like water; it will always find its level.

The earlier we let this happen the better for our economy. Within the period of a decade, I have witnessed the British pound at close to £1 to $1.9 and now as low as £1 to $1.22; and yet the British government is not scrambling to shore up the pound by all means (including expensive subsidy of the currency).

It should be understood that such distortions open huge arbitrage opportunities for those with access, which distract from productive pursuit. Rent seeking from allocation of dollars creates a new crop of overnight billionaires akin to those created during the era of petroleum subsidy. In the long run, it blows no good wind.

I have always argued that more important than the exchange rate, is the stability of the rate, which removes uncertainty, and attracts investment. As it is, we are inadvertently inviting more pressure on the naira because even locals are saving their money in dollars, albeit at zero interest rates. And why not? They have figured out that even at the relatively high interest rates on treasury bills and fixed deposits, savings are halved in real terms due to the fastdeteriorating exchange rate of the naira.

Note: The rest of this article continues in the online edition of Business Day @https:// businessday.ng

COVID-19 pandemic – Lessons for local content practice in Nigeria mbibing the admonition of Winston Churchill’s “never let a good crisis go to waste”, in the novel COVID-19 pandemic, could be quite difficult. The world is in turmoil; hundreds of thousands of people have died and economies are plummeting. Can any good come out of such a terrible era? It seems so, as Queen Duruibe, one of the many fashion designers in Aba, is thriving. She is producing face masks and other personal protective equipment (PPE). She switched to producing these items because of the demand since the beginning of the year. She is reported to be producing 10,000 face masks daily.

She joins an army of small businesses in the fashion industry in Aba, which have received support from the state government to produce items that are required to combat the pandemic.

In a recent report on cnn.com, tailors in Aba have so far produced 200,000 face masks and 3,000 overalls, the Abia State Marketing and Quality Management Agency was quoted as saying. It is a classic case of local content capacity meeting opportunity; albeit, inadvertently. In spite of the best efforts of Aba tailors, they do not have the capacity to meet demand for PPEs in Nigeria. Many countries, notably the industrialised nations hit by the pandemic, are struggling to get supplies for their medical personnel in the frontlines combating the pandemic.

COVID-19 is making countries realise why they should invest in local capacities to meet their needs. With the demand for PPEs and other items required for the management of the

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Adewole Ojo touted that the COVID-19 outbreak could be treated with existing medications, NAFDAC immediately requested a pharmaceutical firm based in Nigeria to produce millions of doses of the drug. The same drug has been the source of rancour between a leading economy and its close ally in Asia. Without the local capacity to produce the drug, Nigeria would probably have had a worse outcome during this pandemic.

The NCDMB has had to walk a fine line between deepening local content and attracting technical expertise and capital that Nigeria sorely needs. Focusing on growing local capacities does not necessarily translate to closing borders to foreign technical expertise and capital. Many sectors will benefit from deliberate actions to increase the productive capacity of Nigerians to meet local needs.

The number of COVID-19 infections is growing in Nigeria and across the world. The pandemic will most likely redefine globalisation. There is, however, no doubt that although it is a huge crisis, there is no better time than now to start looking inwards with a view to strengthening the country’s industrial capacity. The local content model in the oil and gas industry has worked excellently. This model can be replicated in many other sectors to grow the economy and guarantee the long-term sustainability of Nigeria.

Ojo is with Four Points Communications and can be reached on adewole.ojo@fourpoints.ng.

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Wednesday 13 May 2020

BUSINESS DAY

Editorial Needless ding-dong on fuel price

Publisher/Editor-in-chief

Frank Aigbogun

Nigeria needs clear policy direction on subsidy removal

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

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rdinarily, vehicle owners and those who use PMS primarily to fuel their generators ought to be delighting in gratitude to the Nigerian National Petroleum Corporation for what has happened with PMS prices. Thrice in two months, NNPC has reduced the pump head price of premium motor spirit. It reduced from N145 per litre to N108 per litre in the latest price slash.

The plaudits are not coming forth though because citizens and the industry alike are bemused over the actions that represent plenty of motion but no movement in real terms. NNPC is virtually the sole importer of PMS and refined petroleum products into the country even as theoretically the field is open to other players.

The confusion arises from the absence of a clear policy direction on the deregulation of the downstream sector of Nigeria’s oil industry. Nigeria’s oil has suffered the double blows of a global decline in oil prices bordering on disinterest in crude oil and the effects of COVID-19 that shut industries.

Demand fell by more than 80 per-

cent as did prices.

Since this development, NNPC has played the role of policy formulator, regulator, and player in the oil market.

Mele Kyari, Group Managing Director of NNPC, has been the spokesperson of government on the imperative of subsidy removal.

Kyari articulated the outlines of the government’s view of the oil market on 7 April. He explained in a Nigerian Television Authority interview that the federal government is removing the subsidy on petroleum products because it does not benefit the ordinary Nigerian.

The statement was an outstanding reversal of the government’s mantra over the last 30 years that the petroleum subsidy is in place to protect the interest of the common man. Where and when the Federal Government agreed on the necessity to remove the subsidy, it lacked the political will to design and implement the needed policy and implementation.

Kyari now states that the federal government would leave market forces to determine the pump prices of the product. The NNPC boss said that deregulating the market would release funds for the government to spend on deepening the country’s

infrastructural base.

“As you are aware, fuel was selling for N145 before the current COVID-19 impact came into play.

Selling fuel at N145 means that you are doing some form of underrecovery which means that NNPC gets the product and sells at below market price and take the hit on cost differential,” Kyari stated. “What we have done is that market forces will come into play such that at the end of the day, Nigerians will benefit from the enormous resources when that amount is ploughed back.

“You are also aware that fuel under-recovery means that we are taking back some money which would have gone back to fund infrastructure, health and education that we know today we are lagging. Given this opportunity, we must ensure that these resources are available, then we stop subsidising the elite. And when we say subsidy or under-recovery, it is also an elitist thing.

“In some cases, it is the elite that has two, three or four cars in their houses, and the ordinary man or Nigerian does not benefit from it. This is the time to ensure that things get to the ordinary man and not for the elite.”

Kyari spoke extensively on costmanagement in the oil industry and

the challenge of responding to the expectations of its stakeholders.

NNPC reduced the price of PMS on 19 March from N133.28 per litre to N113.28/litre. Group General Manager, Group Public Affairs Division Dr Kennie Obateru announced the latest price drop. He stated that “The new ex-depot price of Premium Motor Spirit (PMS), otherwise called petrol, reflects the company’s market strategy to make more sales while complying with the Petroleum Products Pricing Regulatory Agency’s (PPPRA) price template.”

It is unclear what to make of the statements and actions of the Federal Government on PMS prices and petroleum subsidy. If they are doing under-recovery at current prices, it means the subsidy regime still exists.

What is then the talk about doing away with the subsidy?

More significantly, the Petroleum Prices Regulatory Agency has yet to come up with a fresh template and direction for the industry that would enable the involvement of other players in the importation of PMS and other products. The Federal Government should make pronouncements that provide clarity on where, when, and how Nigeria would do away with petroleum subsidy

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Wednesday 13 May 2020

BUSINESS DAY

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COMPANIES & MARKETS Cheap Nigerian Stocks outperform African Peers amid Rebound from Virus

COMPANY NEWS ANALYSIS INSIGHT

SEGUN ADAMS

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igerian Stocks are leading continental peers amid a rebound from heavy losses due to a double whammy of record oil price declines and coronavirus-induced lockdowns that had pushed stocks into a bear market territory.

The Lagos bourse had cut year’s losses to near single digit on Monday, thanks to its stellar performance since April which has seen Nigerian stocks ahead of other African bellwethers.

Nigerian stocks still down -10.78% was ahead of South Africa (-11.49%), Egypt (-26.57%), Kenya (-15.48%) and Morocco (-22.5%) after trading closed in Lagos on Monday.

In the last one month, Nigerian stocks have gained 12% compared to South Africa’s 5%, Kenya’s 7%, Morocco’s 2% and Bloomberg’s Africa/Middle East tracker which is up 2%.

After a depressing March, Nigerian stocks last month showed resilience in the face of severe disruption to economic activities due to the coronavirus pandemic.

As a result, the domestic bourse in April saw its best

performance since January, with local investors as net buyers, taking advantage of cheap valuations in the market and positioning for dividend payments.

Wahab Mustapha, Senior Analyst, Equity Research at Lagos-based Cordros Capital Ltd told BusinessDay last week that March’s sell-off was overdone and the stock market is in a stronger position “compared to the COVID-19 induced selloff, where we are coming from,” he said.

So far, the market has remained upbeat, recording its longest bull run since January which lasted for nine trading days to Thursday last week.

Despite cheap valuations at a Price to Earnings of 7.48x compared to South Africa’s 13.02x, Egypt’s 8.69x, Kenya’s 8.86x and Morocco’s 17.63x, offshore investors seem to be risk-off towards Nigerian stocks on currency volatility concerns.

In April, Renaissance Capital’s local unit told Bloomberg that offshore investors remain on the sidelines.

NSE’s domestic and offshore investors’ participation data published in May showed the N87.73bn outflow for FPIs versus N34.38 outflows for locals in March while inflows

were N22.49bn and N98.31bn respectively. Despite improvements on the NSE, an expected sharp drop in the economy this year (-3.4% by IMF’s estima-

tion) is expected to rub off on stock outlook for the year.

Last year Nigerian stocks fell almost 15% compared to Morocco’s stock market gain of

8.38%, Egypt’s gain of 7.33%, South Africa YTD of around 8% and Kenya decline of 6.33%.

In January, NSE had its best start to a year in more than a

Nestle records N11.20bn Q1 ‘20 profit amid stock price rebound OLUFIKAYO OWOEYE

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till basking in the euphoria of a rebound in its share price, food and beverage giant, Nestle Nigeria Plc, has released its unaudited financial statement for the first quarter (Q1) for the period ended 31 March.

Revenue for the period ended March 31, 2020, declined marginally to N70.33 billion from N70.97 billion for the corresponding period in 2019. This represents a 0.9% decrease.

The decline in revenue rose on the back of pressure on the company’s food business segment where is sells Maggi, which was down 8.7percent year-on-year to N41.5bn in Q1 2020. The decline in the demand of Maggi came as restaurants were closed and fewer social events due to lockdown measures.

Conversely, the beverage business segment where it sells Milo beverage drink, recorded a massive 13.1percent year-onyear growth to N28.8bn in Q1 2020. This growth was driven by panic buying activities ahead of the lockdown.

Cost of sales for the first quarter of 2020 declined 2.1percent to N38.67 billion, as

against N39.50 billion that was recorded for the corresponding period in 2019.

Gross profit was higher at 1.1percent year on year to N33.1bn in Q1 2020 from N32.7bn in Q1 2019.

Profit after tax for Q1 2020 stood at N11.20 billion, as against N12.85 billion that was achieved for Q1 2019. This shows a 12.84% decline.

The makers of Nescafe and Golden Morn recorded a Net Finance Cost of N82.7m in Q1 2020 compared with Net Finance Income of N34.0m in Q1 2019. This was due to a significant decline in Finance Income (down 33.5% y/y to N335.2m) because of the lower yield environment prevalent in Q1 2020.

Marketing and distribution expenses surged to N11.04billion from N10.37 billion also administrative expenses increased to N3.07billion from N2.01 billion in Q1 2019.

Earnings per Share declined to N14.12/s in Q1 2020 from N16.21/s in Q1 2019. On a q/q basis, Net Income was up 24.5% due to lower Operating expenses and lower Effective tax rate relative to Q4 2019. www.businessday.ng

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decade and some analysts then had predicted around 5% gain for the year.

NSE closed 0.39% lower on Monday.

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Wednesday 13 May 2020

BUSINESS DAY

COMPANIES&MARKETS

COVID-19 shows why Africa should prioritise ICT in national development FRANK ELEANYA

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ne of the lessons the COVID-19 pandemic has brought home is the strategic importance of information communication technology (ICT) in national development, says global technology manufacturer, Huawei.

In a statement signed by Chen Lei, president of Huawei Southern Africa region, the company says while it is critical to react appropriately, governments across the continent should start preparing for the next phase.

“At Huawei, we are aware of the massive effect of the pandemic, as well as how seriously communities would be affected. However, we are also conscious that as well as protecting lives, we need to help lay the foundation for the next stage of society’s technological advancement – the Fourth Industrial Revolution,” Lei says.

He observes how the lock-

down induced by the pandemic has led to creative activities. Of note is the recent YouTube video of young South African dancer Hlumelo, who has been under lockdown in his home township of Gugulethu.

A member of the Zama Dance School, Hlumelo has not let the lockdown hold him back, and has continued practising his steps for the moment when he and his friends can perform together again.

Similarly, during the Chinese lockdown, members of the Shanghai ballet continued to practise – wearing facemasks – for their upcoming performance of Swan Lake. They took precautions but remained focused on the next phase of their development.

According to Lei, Huawei has been fortunate to be able to assist with social distancing levering on its technologies on the request of organisations in Africa.

The company provided video conferencing systems in different countries that

enabled information sharing domestically and experience exchange internationally between epidemic prevention experts in China and Africa.

“Our remote videoconferencing systems have helped medical institutions communicate more efficiently. We have also implemented an AI-based diagnosis solution in several medical institutions.

CT scan reviews can now be completed in two minutes, 80% faster, in a race with time, critical for saving lives,” he notes. “When the dust settles, and we begin to arrive at the much-heralded “new normal”, we will have seen the immense potential for ICT to build social cohesion.”

Lei says a new business model is taking shape across sectors, one characterised by remote work, distance education, remote healthcare, online shopping and mobile money. These business models span transportation, security, finance, medicine, education and entertainment.

COVID-19: HOW Foundation feeds Isiokpo Community

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n an effort to curb the spread of the deadly Corona Virus pandemic, and to further support government in making living easier for the masses, a nongovernmental organization, Herbert Onyewumbu Wiwge, (HOW) Foundation, has put smiles on the faces of thousands of people in some communities in River State.

Recently, the foundation distributed sundry foodstuffs and relief packages to several homes, families, and communities in the state, as part of its complementary efforts to alleviate the mounting effects of the lockdown and restrictions measures adopted by the Rivers State government re-COVID-19.

Notably, HOW Foundation’s activities in the state are basically to alleviate the effects of the lockdown, and by extension, aid the underprivileged people in the state to stay home as the lockdown begins.

The foundation’s CEO, Ms. Antonia Ally, made it known to the people of Isiokpo community and its environs that the NGO’s decision is to spread love and alleviate the effects of the lockdown on the people of Rivers State in general, and to connect with the mission statement of the non-profitable organization.

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According to her, the foundation had been feeding several homes and indigents in Lagos state for weeks and had now decided to extend this novel gesture to the good people of Isiokpo community and its environs. “We believe that majority of those that are alive today have never experienced a pandemic, and to cushion the effects of the lockdown occasioned by COVID-19, the HOW Foundation had made available palliatives to the people of Isiokpo and its neighboring communities in River State,” she said.

The founder of the foundation, Mr. Herbert Onyewumbu Wigwe, also added that the serial distribution of foodstuffs to people is a conscious plan to tackle the post-pandemic effects. He said a lot of businesses have been badly affected and economies have been disrupted, and as a foundation, we have come to the aid of the people and assist this Isokpo community by targeting the

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households with the distribution of our food relief materials.

His Majesty, Blessing Wagor (JP), the Nye Nwe Ali of Isiokpo community, thanked the foundation, especially the founder, Herbert Wigwe. “He is a good man who remembered the people of our community in this troubled period of hunger and he has also promised that the palliatives will be shared with all the families in the community with the help of our council chiefs,” he said.

In his remarks, Chief Wobodo Amadi, Chairman Isiokpo Council of Chiefs, added a thankful prayer for the founder of the foundation and said, “those who remember to feed the needy in this deadly pandemic period deserve more blessing and as he (Herbert Wigwe) is feeding us, God won’t let him, his family and the entire team to be hungry, God will continue to protect you all, thank you.”

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Wednesday 13 May 2020

BUSINESS DAY

AGRIBUSINESS

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In association with

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Nigeria’s palm oil imports from Malaysia drop 24% amid coronavirus pandemic Josephine Okojie

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igeria’s crude palm oil imports from Malaysia - secondlargest grower of the crop has declined by 24 percent in the first three months of 2020 amid the novel coronavirus outbreak, data from the Malaysian Palm Oil Council (MPOC) show.

O n a y e a r- o n - y e a r basis, Nigeria’s crude palm oil (CPO) imports from Malaysia decreased from 102,685 metric tons (MT) in 2019 to 78,529MT in the first three months of 2020, indicating a 24,156MT reduction in volume for the period.

Experts say the sharp drop in the volume of importation can be attributed to the obstruction in the global supply chain triggered by the novel coronavirus which has negatively impacted international trade.

Since the novel coronavirus was first discovered in Wuhan

– China, global trade has been brought to a standstill as countries introduced lockdown and quarantine measures to curb the spread of the virus.

The data from the MPOC shows that total Malaysian palm oil export for the period declined by 25percent as factories using CPO as raw materials shut down

production, forcing prices of the product to drop at the international market.

Africa’s most populous nation’s crude palm oil is less competitive to the imported ones owing to the high production cost, infrastructural gaps, and high logistic cost among others.

Owing to this local

Sales workers at the distribution center of Abu’s Market in Lagos.

Abu’s Market partners to tackle hunger amid coronavirus spread Josephine Okojie

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ith millions of Lagosians struggling to get access to food amid the outbreak of the novel coronavirus pandemic, ABU’s Market have launched an initiative to tackle hunger amid the virus spread by providing home delivery of essential items for vulnerable Nigerians.

Rotimi Deji, founder, Hills Harvest, said this idea was born out of the need to reduce community spreading within the state, as home delivery will keep people indoors while providing them with a sense of inclusion. “ The Abu’s Market a subsidiary of Hills Harvest started as a strategy to address issues along the farming supply chain between farmers of Eweko Farmers’ Cooperative in Lagos and the consumers,” Rotimi said.

He adds that the initiative will also help farmers reduce their post-harvest losses as fresh food produces gets to the consumers on time.

He stated that Lagos is the epic center of coronavirus in the country with a large number of its population at risk of having the worst hit of

manufacturers have resort to importing CPO rather t ha n p at ro n i s i ng l o ca l producers despite an increase in production in recent years.

A l s o, t o b r i d g e t h e demand-supply gap, as the countr y population continues to rise rapidly with the production of CPO not moving in the same

the virus, adding that most of the residents live below the poverty line of $2 per day.

“In a country like Nigeria, where about half of the population lives on less than $2 per day, many families would need to be supported to survive the crisis and the government’s stimuli alone simply cannot do it,” he said.

“In response to this hunger crisis, Abu’s market launched a care package offer which included basic food needs for a family for six for a 21days period; rice (5kg), yam(2 big tubers), garri (5kg), vegetable oil (1ltr), Red palm oil (75cl), salt (500g), seasoning(100 cubes), semovita(5kg) and tomatoe paste (10 sachettes) with a call for NGOs, churches, mosques and private individuals to partner to support these vulnerable families that are in dire need to survive,” he said.

“Without adequate food supply these families will defy the lockdown order to find survival food while st i mu l at i ng c o m mu n i t y spreading of the virus,” he added.

Since the launch of the care package, Abu’s Market has partnered with Ejiroghene and Victoria Madedor in c o l l ab o rat i o n w i t h L B S Agribusiness Management www.businessday.ng

trajectory.

“Nigeria has significantly increased its production in the last 10 years but is still importing a lot of CPO into the country,” Fatai Afolabi, executive secretary, Plantation Owners Forum of Nigeria (POFON), said in a statement.

Since losing its position as one of the world’s largest palm oil producers, Nigeria is yet to recover and take its proper place in the comity of crude palm oil producing nations owing to the discovery of oil, which changed the country’s palm oil narrative of the 60s.

As a result, Indonesia and Malaysia have surpassed N i g e r i a’s p r o d u c t i o n , becoming the global leaders in oil palm production.

To curb large volume importation of CPO, the government in 2016 included it on a list of items restricted from FX. The Federal Government introduced measures last year to further boost local production and ensure the country attain self-

sufficienc y in palm oil production.

Henry Olatujoye, former national president, National Palm Produce A s s o c i at i o n o f Ni g e r i a (NPPAN), stated that the inability of the government to provide a reliable data for the industry has remained a major problem for the industry.

He called on the government to provide reliable data for the industry to create effective planning and efficient implementation of programmes for palm oil production in the country.

Oil palm has the capacity to produce more oil than any other oilseed crop. About 90 percent of palm oil is used in the production of foods, while the remaining 10 percent is used by the non-foods industry, industry players say.

Fo o d s l i k e n o o d l e s, vegetable oil, biscuits, chips, margarines, shortenings, cereals, baked stuff, washing detergents, and even cosmetics are made from palm oil.

How BASF West Africa supports Nigeria’s fight against Covid-19 Programme (Class 13) to get food delivered to over 300 families within the densely populated areas in Ajegunle, Makoko, Bariga, and Ojuelegba among others in the state.

Joy a widow living at Onipa and a beneficiary of the care package provided by the organisation appreciated Abu’s Market for their support to vulnerable Nigerians.

“Since the lockdown, I have been unable to feed my children but I am unable to earn any income,” she said.

To ensure timely delivery, Abu’s Market also partnered with some bike riders for the delivery of the essential food items without the consumers incurring any additional cost, thus, creating jobs for the rider.

“Riders help bring produces from its aggregation hub to homes at a much faster rate,” Rotimi who was earlier quoted said.

Unfortunately more needs to be done as breadwinners of families are losing their jobs due to the lockdown necessitated by the pandemic given that organisations can no longer afford to keep them, while some have suffered from pay cut of up to 70percent in some instance, he says.

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ASF West Africa has supported the government of Lagos State in the fight against coronavirus (COVID-19) by donating 1,000 protective face shields for health workers in the isolation centres in state.

According to a statement made available to BusinessDay, the demand for certain medical devices, including personal protective equipment (PPEs), during

this COVID-19 pandemic, has exceeded the available supply worldwide.

To bridge this gap, BASF explored the option of the production of medical face shields via its expertise in 3D printing.

These face shields are being distributed in the countries and communities in which the company operates, including Nigeria.

The medical face shields will help frontline health care workers in Lagos state

L-R: Mpfareleni Luvhengo, technical sales specialist for West & East Africa; Juliet Ibekwe, technical sales support; Jide Razack, representing Lagos State commissioner for transport; and Oyewale Akeredolu, business development/account manager; all of Performance Materials Division of BASF West Africa, at donation of 3D printed face masks to Lagos State Government in Lagos recently

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@Businessdayng

protect themselves as they provide care to COVID-19 patients.

Jean-Marc Ricca, managing director and country cluster head for BASF West Africa, said that in addition to these donations, and in line with BASF’s principles on sustainability and value to society, the organisation would also contribute to societal empowerment by supporting the local production of top range face masks, having identified small scale technology startup companies with competence to produce these masks. “ L e ve rag i ng o n ou r global expertise, we will support these companies by exposing them to best practices, latest technology and access to market,” he said.

He a p p re c i at e d t h e efforts of Nigeria‘s medical team who are in the front line, doing their best against COVID-19 and reiterated that BASF worked tirelessly to support its customers during the lockdown period by ensuring continuous supply of raw materials for the manufacturing of food and other essential items.

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Covid-19: Insurers face health, travel, business interruption claims …even as pressure mounts on sales Modestus Anaesoronye

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he Covid-19 outbreak and its attendant impact on businesses and the economy are taking huge toll on the insurance business.

In the midst of low sales as result of less face-to-face contact with customers, and the gradual adoption of technology as a sales tool, insurers are being faced with health, travel and business interruption claims.

In most advanced markets business interruption is a big deal, particularly now that organisations had to shut down for the Corona virus lockdown for weeks and months, meaning that insurers that provided cover for these loss positions will

have huge claims on their hand.

Experts who shared their views recently at an interactive and cross-border webinar organized by the National Insurance commission (NAICOM) in collaboration with the Financial Institutions Training Centre (FITC) observed that in the midst of the challenges, there are hidden opportunities.

According to them, the importance of innovation and technology in diving insurance sales and distribution cannot be overemphasized at this time, as this has become critical in growth sustenance post covid-19 era.

Ganiyu Musa, group managing director/CEO, Cornerstone Insurance Plc who was the lead speaker during the interactive ses-

Ganiyu Musa, group managing director/CEO, Cornerstone Insurance Plc

sion provided detailed background on the impact of the global pandemic to the Nigerian economy which is faced with two shocks – the global pandemic and oil price crash.

Musa also highlighted some of the key impacts of the pandemic on global insurance - recession and financial crisis, supply chain, sales, operations, travel and regulation.

Sunu Group donates PPE to support fight against Covid-19 in Lagos Modestus Anaesoronye

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unu Assurance Plc and its sister company, Sunu Health Nigeria Limited has donated N15 million worth of Personal Protective Equipment (PPE) to Lagos State Government to help protect front line health workers against Coronavirus.

The parent company Sunu Group, one of the leading Pan-African group of insurance has in total donated N300 million worth of PPE across Africa as part of its support to Governments.

Kyari Abba Bukar, chairman, Sunu Assurance Plc while donating the equipments to the Lagos State Government at its Medical Warehouse in Lekki Lagos, said they decided to provide them to protect the front line workers who are the ones taking care of the people that test positive to the virus.

He stated that Coronavirus is a novel virus that has no cure and the only way to cure it is through prevention.

He said: “All over the world, we hear doctors and health care workers being infected by the virus. We need

our doctors to be hale and hearty in order to deliver care to the people.

“We have personal protective equipment’s worth about N15 million that we are giving out to protect our front line workers”.

This is Sunu Group’s contribution to the pandemic all across Africa. Suno is in 14 African countries primarily west African countries both

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the French speaking and the English speaking west African countries. In each and every country there has been similar donations being made of PPE for the front line workers that are tackling this pandemic.

Samuel Ogbodu, managing director, Sunu Assurance, on his part said the Sunu Group took the decision to donate the PPE across Africa.

“Since the Coronavirus is ravaging the whole of Africa, the Group decided to contribute its own quota in the fight towards the elimination of covid 19 in the various countries where are present.

We are present in 14 countries in sub-Saharan Africa.

“Aside from this, Sunu Assurance here in Nigeria also contributed to the insurance industry N11 billion insurance cover for 5000 frontline health workers under the Nigeria Center for Disease and Control (NCDC). We will also be supporting the less privileged people. We also pray for the front line workers.

“As an insurance company, our advice to the people is that they should protect themselves against the virus by following the social distance guideline and also ensure that they have insurance policies in place to protect their lives and businesses.

Sunu Health, Patrick Korie listed the personal protective equipment they are donating as N95 masks, splash resistant suits and googles.

He disclosed that while the donation is for Lagos State, the Group plans to donate to other states as the idea is to cover all countries.

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He also submitted that the implications for the Nigerian Insurance industry will cut across revenue, claims costs, liquidity, investment return, underwriters, brokers, regulators and customers.

He however highlighted the emerging opportunities to include technology and innovation, opportunity in life and health, increased government investment in the health sector and creative products for a logistics firm, Internet service providers among others.

Experts at FITC, providing further insight on the essence of the discussion said the Covid-19 pandemic has thrown significant challenges to businesses across the globe.

The impact of this devastating crisis brought by the

pandemic affects the insurance industry in multiple ways such as policy payouts, revenue loss, liquidity, technology and market shifts.

Each of these considerations, the FITC said has its distinctive challenges and if harnessed constructively, can be a great source of innovation and growth. The impact of this pandemic on the insurance industry varies from employee and business continuity issues to client service considerations to the financial outlook.

According to them, insurers are responding to the widening outbreak on multiple fronts—as claims payers, employers, and capital managers. Each has its own distinct challenges, not just for the insurance industry, but for the economy and society at large.

Royal Exchange GMD woos young people on career opportunities in industry

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oung generations of Nigerian’s have been urged to take career in insurance as the industry has great potentials for growth and opportunity for employment and career advancement.

Wale Banmore, group managing director (GMD), Royal Exchange Plc made the call at the Babcock University Students Association Day recently, where Banmore said the insurance industry in Nigeria is a N450 billion sector and has the capacity to grow to trillions and its getting there. Besides, it is a major employer of labour, especially skilled insurance professionals, amongst other fields.

“Without insurance, there would be fewer jobs, and even fewer businesses. Who here will buy a car without insurance, or visit the hospital without health insurance?

We help companies remain in business.

According to him, many interesting career paths which cater to varied skill sets and interests abound in insurance.

We have need for most of the professionals – engineers to do risk surveys, accountants to keep financial records, Information Technology to develop @Businessdayng

our software used for operations, Customer Service, etc.

Opportunities also abound for independent agents, brokers, etc.

Banmore said insurance industry offers competitive compensation packages to attract and retain the best talents. With opportunities for growth and professionalism via the training arm, the Chartered Insurance Institute of Nigeria (CIIN), the prospect to grow is limitless.

Workforce Opportunity for Millennials/Innovators – Now is the time to get into the industry, bring your disruptive ideas, your innovations, unique skill-sets and expertise is what is required as we prepare for the next growth phase of the insurance industry in Nigeria.

Banmore, while giving reasons why insurance should be considered as a first choice career, noted that the insurance market is a resilient marketplace and as a result, it can be a solid bet for those looking to enjoy a long and prosperous career.

“As you might have gleaned from my presentation today, the insurance industry is growing and needs you to help it take the quantum leap forward.

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Continental Re reports Risks that businesses may face as reopening of economy 29% growth in gross premium for Q1 continues in Covid-19 …experts recommend loss prevention measures

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s companies and institutions reopen for businesses gradually after the easing of the lockdown, insurance experts recommend that loss prevention measures would be critical in achieving successful operations.

Allianz Global Corporate & Specialty’s (AGCS) Risk Consultants say’s that, with businesses in many countries now reopening after a period of inactivity, it is important that they remain vigilant about the risk environment in order to identify unknown problems which might have occurred during closure, as well as to mitigate losses that might occur as a result of reopening.

“Restoring operations at a facility that was once idle or vacant presents another set of loss prevention challenges, particularly to manufacturing plants with hazardous equipment or processes,” explains Stephen Clark, global technical/ expertise manager for Property Risk Consulting at AGCS. “For example, fuel-fired equipment may need to be restarted, which creates an additional risk of fires and explosions. There may be a reduction in workforce available to operate and maintain production equipment safely or to respond to emergencies. Also, lapses in maintenance of buildings, equipment and fire protection systems may create hazardous conditions.”

Businesses should pay particular attention to the condition of electrical equipment and installations, as around 20 percent to 30 percent of AGCS fire claims are related to these.

Insurers have also seen a number

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of claims from fires resulting from technical defects or operational error after machinery has been restarted or cleaned in preparation for reopening of facilities, which has then caused further disruption to operations.

AGCS analysis of insurance industry claims shows that fires already account for almost a quarter (24 percent) of the value of all business insurance claims over a five-year period – the major cause of losses – while faulty workmanship and maintenance (8 percent) and machinery damage (5 percent) rank as the 3rd and 7th top causes of claims respectively.

According to the AGCS bulletin Coronavirus: Property loss prevention measures for restarting businesses after a temporary closure another essential action for businesses to consider before restarting operations is restoring site security.

A thorough self-inspection of the site, including all buildings and equipment, to detect and correct any unsafe or abnormal conditions,

such as damage, maintenance issues, improper housekeeping or storage, signs of vandalism, etc. should also be considered. Businesses should also complete and reinstate any inspection, testing and maintenance procedures that may have lapsed since the shutdown.

As always when restarting idle machinery, operators should follow standard operating procedures and manufacturer guidelines for bringing shutdown equipment or processes back online.

In addition, those facilities introducing alcohol-based (flammable) disinfectants, such as hand sanitizers, should implement proper fire safety precautions. This should include keeping them away from ignition sources, such as open flames, encouraging employees to rub their hands dry to allow vapors to safely dissipate, disposing of all waste rags in approved, normally closed containers, and storing flammables in designated cutoff rooms or approved cabinets.

espite unprecedented challenges across Africa resulting from the COVID-19 pandemic, Continental Reinsurance has posted a 29 percent increase in gross premium income for the first quarter of 2020.

As the group reports an overall increase in gross premium income to N 11,560 million for the period, and with contributions from across its six locations remaining strong and steadily growing, Femi Oyetunji, group managing director, cautioned “The pandemic has alerted us to expect variations in key performance metrics, which are highly likely to impact our annual objectives.

“COVID-19 has caused extreme personal distress and challenged business sustainability across the world. However, it has also created an environment for greater collaboration, innovation and digital transformation, particularly within the insurance industry.”

Oyetunji said “as insurers, we should be demonstrating our value more effectively as lubricants of the economy and create greater cohesion with other sectors of our economies. As we do with the UN–Principles of Sustainable Insurance, steadfastly integrate our global efforts to proactively prevent and manage climate related catastrophes and pandemics, he said.

“Certainly, as insurance leaders, we are focusing attention to the crisis on the continent by working with industry players to contribute towards resolving this challenge.

We are closely monitoring developments in our markets. We have instituted internal protocols to protect our staff while supporting our clients

uninterruptedly and have the right strategies to trigger a return to normal – health concerns and government permitting.

Oyetunji stated further that, “ as the pandemic continues, we have also prioritized financial donations through industry bodies in our various jurisdictions to be used sustainably and equitably for the benefit of the citizens.”

Underwriting profit was N 1.565 million for Q1 of 2020 representing a 622 percent increase in comparison to the same quarter previous year’s N 217 million, demonstrating increased emphasis on underwriting discipline and cost control.

Profit before tax for the period was N 2.479 million, a 446 percent increase over the same period last year.

The company also saw a 14 percent increase in claims incurred amounting to N 4.675 million, which underpin’s Continental Re’s continuing commitment to meet its obligations in support of its clients.

Investment and other income stood at N 555 million; a 6 percent decline owing to a low-interest regimen and bearish markets.

Continental Reinsurance is a private pan-African reinsurance company that has been on the continent for over 30 years. It writes business in more than 50 African countries, which are serviced from six client service centres in Nigeria, Botswana, Cameroon, Côte d’Ivoire, Kenya and Tunisia. It also has an in house technical ‘referral competence’, Continental Property and Engineering Risk Services (CPERS), that services all its clients across Africa. With a diversified and profitable portfolio, it offers its clients a product of indisputable value underpinned by uncompromising service and technical capability.

AIICO gross written premium up 33% to N50.1bn in 2019 Modestus Anaesoronye

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he AIICO Group’s gross written premiums for the year ended December 31, 2019 increased by 33 percent to N50.1 billion from N37.7 billion in 2018. This outstanding performance was predominantly driven by growth across all lines of business within the Group, the Company said on Monday.

Profit before tax (PBT) soared toN6.2 billion, an increment of 78 percent compared to the N3.5 billon achieved in 2018. Profit after tax (PAT) also grew by88 percent to N5.9 billion, compared to N3.2billion in 2018. Basic earnings per share (EPS) increased by 89% from 44k in 2018 to 83k in 2019.

Babatunde Fajemirokun, managing director/CEO said that “Over the course of 2019, we undertook a thorough review of our businesses with a clear aspiration to attain market leadership through profitable growth”. Stemming from the progress made so far, it is my belief that we are on course and have the right strategy in place to deliver even more sterling performance in the years ahead.”

In accordance with our commitment to fulfilment of our obligations to our clients, gross claims grew by 6 percent from N29.0 billion in 2018 to N30.6 billion in 2019. From this amount, about 75 percent was for benefits and claims payment in our Life business with the remaining 25 percent incurred in the Non-Life business. www.businessday.ng

Babatunde Fajemirokun, managing director/CEO, AIICO

The Group, however, experienced an underwriting loss of N6.34 billion in 2019. This is predominantly driven by the increase in life technical reserves (change in life funds) in the Life business. The Non-Life business

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achieved N2.4 billion underwriting profit in 2019. This increase in life technical reserves is based on significant growth in new business, impact of changes in yields on federal government securities and assumption changes such as mortality, withdrawal experiences, policy expenses and increased inflation. Hence, the underwriting loss of N6.3 billion is a notional loss (non-cash) given the format of insurance accounts used for a composite player in Nigeria. For Life insurance businesses, investment income (including theincrease in fair value of assets backing life technical reserves) is typically combined with premium income to fund the technical reserves (change in life funds), meet part of claims settlement then contribute to cover expenses and return a profit to shareholders. There@Businessdayng

fore, adjusting for investment income for the Life insurance business would result in an underwriting profit for the composite insurance operation and the Company.

The total assets grew by 45 percent from N110 billion in 2018 to N159.5 billion in 2019.

Having received approval to increase the authorized share capital of the Company in line with the new regulatory capital requirements for a composite insurer, Shareholders’ Equity of the Company increased by 92 percent to N27.9 billion (from N14.5 billion in 2018) driven by the successful completion of a private placement investment by two strategic investors (LeapFrog Nigeria Insurance Holdings Limited and AIICO Bahamas Nigeria Limited) and improvements in retained earnings.

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BANKING Covid-19: CBN’s economic stimulus measures a reflection of growth opportunities HOPE MOSES-ASHIKE

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Godwin Emefiele, CBN governor

credit facility through NIRSAL Microfinance Bank for households and Micro, Small and Medium Enterprise (MSMEs) Taking advantage of the opportunities created by the Covid-19, EdFin Microfinance Bank Limited, with special focus on education, last week, engaged school owners on how to assist them access the CBN intervention fund.

“As part of our plans to help our customers mitigate the impact of COVID-19 pandemic, we have scheduled a webinar for all our school owners to help them access the NIRSAL CBN Intervention Funds for COVID-19,” Bunmi Lawson, managing director/CEO, Edfin Microfinance Bank Limited, said.

“Please note this webinar is free. EdFin does not guarantee your application will be successful but it sure helps to fill the forms and additional documents properly. Edfin will stand as guarantor to its clients who have zero default days on 31st March 2020.”

Other monetary policy www.businessday.ng

responses include: reduction of interest rates on all applicable CBN interventions from 9 to 5 percent; liquidity injection of N3.6 trillion (stimulus package in the form of loans) into the banking system; and granting of Deposit Money Banks (DMBs) leave to consider temporary restructuring of loan terms for businesses/ households affected by Covid-19.

Standard Chartered Plc, in April, introduced a

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three-month payment holiday on personal loans and retail mortgages to support clients during the current pandemic crisis in Nigeria.

Nigeria’s Private Sector Coalition Against COVID-19 (CACOVID) has contributed N27.2 billion, as at April 23, 2020.

On March 26, 2020, the CBN on behalf of the Bankers’ Committee and in partnership with the private sector led by Aliko Dangote Foundation and

In order for us to mitigate the negative impact of the twin shocks, we need to, as a country, maintain delicate balance between saving the lives of our people and growing the economy

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igeria, no doubt, has been hit by twin shocks – the COVID-19 pandemic and declining oil prices. The two problems have dealt a big blow on the social and economic lives of the people.

The crises, however, can be translated into opportunities to get the economy back to its footing.

Following the outbreak of coronavirus, there has been reduction in global GDP growth by 1.3 percent, with about $1.1 trillion being spent on the world economy.

Data from EY show 4.9 percent decline in global oil demand. Crude oil prices declined dramatically to as low as $17 per barrel by the end of March 2020, and $83 billion has been withdrawn from emerging markets since the start of the crisis. Also, there has been 30 to 40 percent decline in global Foreign Direct Investments (FDI).

Countries across the globe have responded by fighting for themselves with several measures to protect their own people and economies, regardless of the spillover effects on the rest of the world.

The Central Bank of Nigeria (CBN) has responded in several ways by supporting hospitals and pharmaceutical industry with low interest loans to immediately deal with the public health crises. The bank is also working with the private sector Coalition Against COVID (CACOVID) to support the Presidential Task Force o n C O VID-19acrossitsres p o n s e , while mobilizing palliatives for the poor and vulnerablevulnerable.

Two months ago, the CBN announced its support of critical sectors of the economy with N1.1 trillion intervention fund.

As part of the monetary policy response to the Covid-19, the CBN created a N50 billion targeted

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Access Bank, came together to form the CACOVID. Ayodeji Ebo, managing director, Afrinvest Securities Limited, said the quantum of the CBN stimulus is less than 5 percent of GDP, hence impact will be limited. “ “While we expect a boost for the health sector given that the sector has been relying more on expensive bank loan for funding, the SME fund may not provide as much impact based on the size of fund relative to the funding gap in that space,” Ebo said.

President Muhammadu Buhari, on March 29, 2020, in a nationwide broadcast on the COVID-19 pandemic, ordered three months repayment moratorium for all TraderMoni, MarketMoni and FarmerMoni loans. Ayodele Akinwunmi, relationship manager, investment banking at FSDH Merchant Bank Limited, believes there is an opportunity to rebuild the economy to achieve food security, diversified revenue, foreign exchange and employment generation.

Time to build healthcare, education and infrastructure that will support sustainable growth.

The opportunities will be a function of how well the stimulus packages are targeted and implemented, according to Uche Uwaleke, professor of finance and capital markets at the Nasarawa State University, Keffi.

He said the opportunities will be lost if the intervention funds fall into wrong hands. So, the CBN should put in place a water-tight monitoring mechanism to ensure that the overarching objectives of containing and mitigating the negative impact of COVID’19 on lives and livelihoods are achieved.

“As we already know, the CBN has lowered interest rates on all its interventions and have commenced disbursement of N50 COVID’19 response concessional facilities through the NIRSAL to @Businessdayng

affected households and businesses. There is also the over N100 billion to tackle the health crisis due to the pandemic. These provide opportunities to revive agricultural value chains, small businesses as well as expand health facilities nationwide. The forbearance to banks is also an opportunity for them to restructure doubtful loans, improve liquidity position and prudential ratios especially NPLs,” Uwaleke said.

Laoye, Jaiyeola, past president and directorgeneral of the Nigerian Economic Summit Group (NESG), said the economic outlook for Nigeria was not favourable considering the sharp fall in global oil prices and the impact of the coronavirus on the economy.

He projected higher inflation rate going forward against the background of forex exchange shortages, devaluation arising from diminishing forex reserves and increase spending by the government to reinflate the economy.

Jaiyeola called on the government to review its economic policy and ensure a quick diversification of the economy to steer the country away from import dependence and increase non-oil revenue.

“In order for us to mitigate the negative impact of the twin shocks, we need to, as a country, maintain delicate balance between saving the lives of our people and growing the economy,” he said.

These twin shocks are not necessarily mutually exclusive, and both can be pursued simultaneously, Demola Sogunle, managing director/CEO, Stanbic IBTC Bank Plc, said.

Sogunle also stressed the need to diversify the economy from over -reliance on crude oil as a source of revenue and focus more on the real sectors such as agriculture, manufacturing, and SMEs, adding that digitisation was clearly the way to go and future of banking going forward”.

Wednesday 13 May 2020

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TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

N215.3m Rolls Royce Cullinan SUV eyes younger millennials

Lagos gridlock upbeat as rainy season begins

MIKE OCHONMA Transport Editor

MIKE OCHONMA

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he debut of RollsRoyce’s latest ‘murdered out’ Black Badge series SUV is tragetting younger brand of car buyers at the iconic car firm and checks reveal that, the N215.3million (£405,000) Cullinan Black Badge is the first sport utility vehicle (SUV) to receive the ‘murdered out’ all-black treatment.

The manufacturers’ factory price is dependent on buyers specific tastes including personal customisation before shipment to country of destination and applicable tax at the country of final shipment.

Cullinan Black Badge production process involves replacing the traditional chrome trims with a black chrome to make the car look more sinister.

In taking the younger back to history, the black chrome design Rolls Royce was originally created after the Second World War when people began hot-rodding and using high-temperature black paint.

Rolls-Royce’s latest ‘murdered out’ Cullinan Black Badge as published here has attracted a younger brand of car buyers, just as it was designed to be The Spirit of Ecstasy bonnet ornament is one of the main features to be designed in black chrome to help make the car appear more sinister.

The look was then rediscovered

The car is aimed at ‘the innovators, trailblazers, rulebreakers and above all those who dare in the 1990s and since then it has been a hit with younger, more modern audiences since. And now Rolls, one of the most traditional of the world’s top car brands, have got in on the act.

In the submission of a satisfied Torsen Muller-Otvos, chief executive officer of the super high

premium automaker: ‘Black Badge reflects the desires of a distinct group of Rolls-Royce clients: men and women who take risks, break rules and build success on their own terms’.

BMW, the parent company of Rolls-Royce, voted in 2015 on the drastic decision to ‘murder’ the Spirit of Ecstasy bonnet ornament by changing it from silver to black.

The decision to abandon tradition was made so that younger customers could see Instagram potential in the darker car trims.

Rolls-Royce said the car is aimed at ‘the innovators, trailblazers, rule-breakers and above all those who dare’.

The Cullinan is the first SUV to receive the ‘murdered out’ treatment following the success of the Dawn, Ghost and Wraith models.

The concept worked and onein-four of their cars sold globally belong to the Black Badge series and the more sinister design has lowered the average age of their customers from 50 to 42 since 2015.

Other models like Dawn, Ghost and Wraith have all received the Black Badge treatment. The Spirit of Ecstasy is not the only feature to be redesigned. The grille, the boot handle and exhaust pipes have all been made in black chrome, but the door handles have been kept as normal chrome.

ommuters in Lagos should brace up and plan their movement with the exoected increase in vehicular traffic as the rainy season begins to gather momentum.

What is important according to some commuters is not only the upsurge in the number of private and commercial vehicles on the road, but also the compromise of some traffic officers in uniforms and their civilian accomplices, the bad road conditions as well as the poor driving culture of road users.

Among the worst corridors where traffic officers are ‘helping themselves’ and thereby allowing mainly commercial bus drivers to constitute long hours of traffic are the Lagos-Badagry road, specifically between the Volkswagen of Nigeria (VoN) auto assembly plant and the Lagos State University, Ojo. Within this corridor, official of the Lagos State Traffic Management Authority (LASTMA) are seen by the road side during critical rush hours walking and discussing in groups while frustrating traffic situation that they can easily manage and control lingers.

According to one Samsom Odafe who drives along the corridor on daily basis; ‘’You cannot compare the efficiency of these LASTMA officials in this area with other parts of Lagos, especially in Lekki, Eti-Osa, Ikeja or even Surulere. Honestly, the state government should do something about their attitude to work more so when they are paid with tax payers money’’.

NADDC DG commends Stallion, Coscharis, CFAO, Mandilas for backing FG’s COVID-19 fight MIKE OCHONMA

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or supporting ongoing efforts towards combating the deadly coronavirus, prominent automotive companies, including the Stallion Group, CFAO, the Mandilas Group, and Weststar, have earned the appreciation of the Federal Government.

Aliyu Jelani, OFR, director-general, National Automotive Design & Development Council (NADDC) has commended some top frontrunners in Nigeria’s automotive business for their steadfastness in with the federal government in the fight against the coronavirus disease.

Aliyu noted that, the support the auto industry is giving to the federal government is indicative of their commitment to safeguarding the citizenry.

Among the list of companies in no order of ranking, that has clearly their demonstrated corporate social responsibility support towards the anti-COVID-19 cause is the Stallion Group. Through its philanthropic arm called Stallion Empowerment Initiative, the group has been supplying locally produced rice and fish to all the

government-run hospitals dedicated to Covid-19 in the country.

The gesture is expected to last for three months.

Anant Badjatya, CEO of Stallion group said the company further committed a staff bus each for the five government-run COVID-19 hospitals in Lagos, in addition to providing drivers and fuel for the vehicles. This gesture he hoped will facilitate safer and comfortable movement of the health care workers who are in the frontline in this fight against the virus.

Chairman, Stallion Group, Sunil www.businessday.ng

Vaswani, stated, “These are exceptionally difficult times and urgent emergency resources have to be deployed to cope with the needs of affected states and support their health care systems.

“At Stallion Group, our top priority is the health and safety of our employees, customers and our community. There is nothing greater than the safety of the people of this country and it is our responsibility to support the government and the community in this time of need. We are deeply grateful to every health care worker and person

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who has risked their life to fight this pandemic and will continue to support them.”

Similarly, Massilia Motors (sole distributor of Mitsubishi Motors in Nigeria), last month presented food items to 1000 homes in Ijora, a suburb of Lagos state, where the company’s headquarters is located.

Food items, including bags of rice, beans, sugar, salt, as well as vegetable oil, pasta, and tomato pastes, were handed over to Oba Abdul Fatai Aremu Aromire, the Ojora of Ijora, by a Massilia Motors team led by the Deputy Managing Director of the company, Kunle Jaiyesimi.

Also, the Mandilas group Limited, sole franchise dealer of Carrier air-conditioners in Nigeria, donated air-conditioners in support of GTBank’s effort to create a 110bed isolation centre at the Mobolaji Johnson Arena, Onikan, Lagos.

To make certain that the 32 Carrier ceiling concealed ducted air-conditioning units were professionally installed, the group’s team of technicians was deployed to the project where they ensured the products were functioning efficiently ahead of the commissioning of the centre by Governor Babajide Sanwo-Olu. @Businessdayng

Commenting on the project, Ola Debayo-Doherty, Mandilas group chief executive officer, Mandilas Group Ltd, commended the Lagos state government’s efforts at checking the spread of the coronavirus.

The air-conditioning units are humidity and temperature-controlled with high filtration levels for clean indoor air quality, preventing the presence of stale air in the room.

Coscharis group also donated relief materials to the Lagos state government. President of the group, Cosmas Maduka, said “We have been following with great details the global developments as it relates to the COVID–19 health situation which is really unprecedented and has brought the whole world to a standstill.

As it is, as a responsible corporate entity, we are heeding to government and the health institutions’ advice to ensure the safety of our assets whom are our staff and all our entire stakeholders.”

“Automotive stakeholders such as Innoson, Simba and others, have also risen to the occasion of producing relevant health-related vehicles such as ambulances,”Aliyu stated.

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Wednesday 06 May 2020

BUSINESS DAY

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

Toyota’s new ambulance for critical COVID-19 patients

every bus has at least a driver and other people directly or indirectly depend on its operation for their livelihood.

“Britain, which is one of the countries worst hit by coronavirus, depends a lot on road transportation, and they didn’t starve the transporters and the drivers of palliatives. The country has provided about a million pounds for the transporters to maintain their vehicles, including washing and disinfecting them before they are back on the road. This does not include palliatives to the drivers and their families.

“Government should consider the fact that when the prohibition on inter-state passenger transportation is lifted, we are still going to face the challenge of observing social distancing, which means carrying fewer passengers and its effect on the recovery of our businesses.”

According to him, a situation where 15-seater mini buses admit only seven or eight travellers, and luxury buses reduce their passengers from 59 to 25 or 30 to ensure distancing, will hamper recovery from the effects of the present ban, unless government extends considerable incentives to the owners.

s of date, the new coronavirus pandemic has already affected several countries around the world, with more than 3.25 million confirmed cases and death toll hitting the 230,000 mark, and still counting.

As such, Toyota Motor Corporation (TMC) has extended its hand in order to assist in this time of crisis. Earlier last week, the carmaker announced the production of medical face shields for Japan, with production capacity boosted up to 40,000 units per month. The produced

The automaker’s latest addition to its coronavirus aid is this a Toyota Hiace converted into a vehicle transport specifically modified to ferry seriously-ill COVID-19 patients. This is the first Toyota designed to transport COVID-19 patients in severe condition.

The Hiace-based transport is developed to be an “airborne droplet circulation control vehicle,” which features an interior compartment to separate the front cabin from the rear holding area.

The newly-developed vehicle’s design is simple: an exhaust fan was placed

items can also be exported to other countries of the world for the treatment of the spreading deadly virus.

In Japan, there are 14,305 confirmed COVID-19 cases with 455 deaths. Tokyo, the nation’s capital, tallies the most number of confirmed cases and casualties, with Osaka and Kanagawa following behind.

Toyota has aided in the transport of COVID-19 cases, as well. It has provided 11 vehicles for mildly-ill patients since April 10, covering Tokyo, Chiba Prefecture, and Miyagi Prefecture.

in the interior barrier to continuously expel air into the rear compartment, preventing contaminated air to breach the cabin.

Toyota’s new vehicle was donated to Showa University Hospital, Tokyo, joining the carmaker’s initial fleet of transport aid. The marque intends to continue developing these vehicles in response to requests from medical facilities and local governments – all part of Toyota’s Kokoro Hakobu Project, a collective Toyota effort that started since the wake of the Great East Japan Earthquake.

or other harsh and abrasive cleaners. These chemical products could damage your vehicle’s upholstery and/or interior surfaces.

Instead, alcohol-based wipes or sprays containing at least 70% alcohol are effective against the coronavirus according to the CDC, and can be safely used in your vehicle.

How to clean the touchscreen. Your infotainment touchscreen is tricky because it’s a high-touch area that should not come in contact with aggressive cleaners. Rather use screen

wipes or a soft cloth dampened with soap and water to clean the screen surface, then wipe it dry with a clean, soft cloth.

Ammonia-based cleaners should not be used on infotainment screens, as they can damage the antiglare and anti-fingerprint coatings.

If your car has a competent voice control system; though an experience that is rather rare, using it might help you to avoid touching the screen altogether.

According to Nissan, the following checklist covers

MIKE OCHONMA

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Transporters seek FG’s support on lockdown MIKE OCHONMA

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ublic transporters in the country said they are seriously feeling the crippling effects of their businesses due to the ravaging coronavirus pandemic, if the federal government does not quickly intervene with some kind of grants for inter-state movements on long distance passenger transportation.

Expressing this view recently, Prince Emeka Mamah, first vice-chairman of Public Transport Owners of Nigeria Association (PTONA), lamented that, the total ban on interstate transportation can lead to the collapse of their businesses if there is no quick intervention in the form of assistance.

Last month, PTONA, an umbrella body of inter-state road transporters across the country, had in a letter to the vice president Yemi Osinbajo and chairman of the Presidential Economic Sustainability Committee on COVID-19 Pandemic, appealed for urgent government financial support to pull the transport owners back from the brink.

Signed by the national president, Isaac Uhunmwag-

ho and the secretary, Frank Nneji, the association’s letter implored government to set up a N20 billion COVID-19 intervention fund with the Bank of Industry (BOI) to assist inter-state passenger operators nationwide.

PTONA also appealed to the vice president to grant its members special concession on import duties payable on buses from 35 percent to 10 per cent; as well as direct the Central Bank of Nigeria to prevail on all commercial banks to restructure all term loans for businesses like inter-state passenger transport affected by the pandemic.

According to Mamah, “This total ban on inter-state transportation can lead to the collapse of our businesses if the Federal Government does not quickly intervene with some kind of grants. In fact, it will be very difficult, if not impossible, for inter-state transporters, whose thousands of buses have been ‘locked down’ for nearly two months, to recover without incentives, even after the COVID-19 measures have been relaxed”.

Mamah lamented that apart from losing daily returns, the mini and luxury buses which have been parked at the respective stations of the members since

the inter-state lockdown was announced last March are procured on loans from banks are accumulating arrears of re-payment and interests.

“Having been parked for weeks, these buses not only attract arrears of unpaid loans and interests, they are also incurring maintenance costs. And by the time they are to resume operations – and nobody knows when – we will need to spend heavily on replacing tyres and other items, before returning them to the road.

The transport owners however commended the concerted efforts of the federal government, the Presidential Task Force on COVID-19, and the various state governments towards combating the pandemic.

He advised that road transportation which is the nation’s most popular means of movement, should not be allowed to be one of the casualties of the global scourge, even as he expressed the fear that it would take the sector more than a year to recover.

The chairman of Ifesinachi Industries Ltd argued that to ground thousands of buses for many weeks without palliative measures has social implications, because

Do’s and dont’s of car disinfection

W

hile hand washing and face masks are the most common preventative measures in the battle against Covid-19, the disinfecting of surfaces is another important habit to develop, and that includes your car.

The Centers for Disease Control and Prevention in the United States recommends wearing disposable gloves for cleaning and then disinfecting surfaces. If a surface looks dirty, it should be wiped down with soap and water prior to disinfection.

For instance, Nissan rec-

ommends using a soft or microfiber cloth dampened with soap and water to wipe down hard surfaces.

Cleaning liquids to avoid.

The carmaker also warns

that while most common household disinfectants are effective, some are not ideal for use on a vehicle, including bleach, hydrogen peroxide, benzene, thinners

the areas that are important to disinfect in battle against Covid-19 spread. These include the teering wheel, key and remote fob, start button (if applicable), exterior door handles, both sides and the boot lid-grab areas Other areasthat requires disinfecting are the interior door pulls, both sides and interior door panels, rear view mirror, back and edges, air-conditioning vents, gear lever, indicator lever, windscreen wiper controls, centre console knobs and arm rest including the parking brake handle/release lever.

Wednesday 13 May 2020

BUSINESS DAY

23

MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

Apapa: NPA opens discussion with Lagos, Ogun state govts to establish truck parks …Parks to support use of electronic call-up system, ease gridlock amaka Anagor-Ewuzie

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o r r i e d by the difficulties experienced by cargo owners while moving their goods especially export cargoes into the port, the Nigerian Ports Authority (NPA) said it has opened discussions with the Lagos and Ogun State Governments to establish transit parks for trucks.

The truck parks, if established would enable the use of the long-awaited electronic call-up system for trucks going into the port, which in turn, would reduce the traffic congestion on port access roads caused by long queue of trucks waiting to gain access into Apapa and Tin-Can Island Ports.

Hadiza Bala Usman, managing director of the Nigerian Ports Authority (NPA), disclosed this last week during an interactive session on Webinar tagged, ‘Non-Oil Exports: Disrupting Nigeria’s Growth Cycle’, which was organised by

BudgIT. She also stated that the authority is also concluding plans to put the truck park located at Orile Iganmu area of Lagos into use for the purpose of introducing electronic call-up system.

According to her, NPA has made efforts to address the concerns around delays in moving export goods into the ports by facilitating ag-

gressive deployment of rail to link Lagos Port Complex and Tin-Can Island Port, which is being championed by the Federal Ministry of Transportation.

While expressing worries over the traffic congestion on the port roads caused by lack of multimodalism as 75 percent of cargo pass through the roads, Usman noted that the NPA has encouraged and

licensed operators to use barges to move cargo out of the port.

Based on this, she stated that the authority went further to sign memorandum of understanding with APMT Capital to utilise barges in movement of cargoes out of the port.

Usman however stated that terminal operators have set up priority window for

amaka Anagor-Ewuzie

…Credits success to teamwork, solid finance, determined shareholders

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e r i d ia n Po r t Services (MPS) said it has successfully completed the entire Phase 1 works at Ghana’s Tema Port Terminal 3 expansion project, two months ahead of schedule.

Though, the entire Phase 1 works of the port project was due for completion on 28 June 2020 after the terminal went live on 28 June 2019 with two berths, but the finalisation of the first phase of the terminal was announced on 30 April 2020.

By implication, both due dates were successfully achieved and works were completed ahead of schedule.

The combination of a great teamwork, solid project finance and determined

shareholders were among the main contributors to the successful delivering of this mega infrastructure ahead of the contractual date in 3.5 years (41 months), according to APM Terminals, one of the sponsors of the port project.

The new harbour basin, research shows, was built on a 3Km long beach directly on the Atlantic Ocean and right on the Meridian Timeline.

“Building into the sea, from the beach, the breakwater root goes 1,550m into the ocean with a 2Km long arm extending eastwards from the root of the breakwater parallel to the quay wall. The 3,558m long breakwater is harbouring a vast 450Ha of maritime waterfront.”

Also, the harbour basin is accessible through a 3,500m long by 225m wide entrance channel into a turning basin/circle of 500m diameter.

The access channel has been www.businessday.ng

dredged to 18.7m, while the turning basin has a 17.4m depth and the quay wall has a 16.9m draught to accommodate 16m draught vessels at the berths.

Matthieu Ferraro, construction manager, disclosed the composition of the work done by the collaboration of all contractors and their associates which has resulted in a fully functional terminal.

He stated that the Phase 1 scope of works included building a 1,000m long wharf which consists of three berths and a 98Ha terminal facility on land reclaimed from the sea with all drainage, sewage, water, fire, electrical and IT services included.

He listed 12megawatt back-up power station as well as major facilities such as administration buildings for MPS and the authorities, a maintenance workshop, a 60-bay unstuffing shed for

motion Council (NEPC), said Nigeria’s non-oil export grew from USD1.7 billion in 2016 to USD3.16 billion in 2018 according to International Trade Centre, Geneva.

Awolowo, who listed major export commodities to include cocoa, cashew, sesame seeds, leather and fertilizer, stated that export services amounted to N5 billion in 2017.

He pointed out that despite these developments, Nigeria can still be termed a mono-product economy that export mainly crude oil.

Based on this, Usman pointed out the need to encourage local investors and make domestic investment a priority. She said that as a large country of consumers, Nigeria needs to increase local production in order to earn foreign exchange through export.

“Nigerian crude shipment contributes the highest revenue of the ports. This underscores the importance of diversification of the economy through non-oil exports in order to reverse the trend,” Usman suggested.

COVID-19: SIFAX Group boss identifies recovery strategies for businesses

MPS delivers Tema Port expansion project two months ahead of schedule amaka Anagor-Ewuzie

export cargo especially for Agric produce export.

Emphasising that rehabilitation of access roads to the ports falls under the purview of Federal Ministry of Works, she noted that access roads need to be rehabilitated for cargo to be evacuated quickly.

“There is need for all agencies to do their part effectively because the Key Performance Indicator (KPI) of NPA is tied to the effectiveness of other agencies such as the Nigeria Customs Service (NCS), Federal Ministry of Works among others.

Customs needs to provide scanners for quick examination and clearance of cargo at the port,” she said.

Usman further pointed out the need for the Single Window platform to be put in place by the NCS and its supervisory Ministry of Finance in order to eliminate manual documentation that has encouraged corruption and human interface at ports.

On his part, Segun Awolowo, executive secretary/CEO of the Nigerian Export Pro-

Customs officials, six scanners, several gate facilities, a fire plant, sewage treatment facilities and 1,400 reefer container plugs as part of facilities in the newly built terminal.

Mohamed Samara, MPS CEO, said the project has had great experience for most of the workforce (mostly Ghanaians) that cut across engineering (civil, geotechnical, marine, hydro, mechanical, electrical, electronic etc.).

He stated that it has afforded them the opportunity to gain in-depth knowledge with the integrated safety and quality controls.

“Since the Go-Live of Terminal 3 in July 2019, we have witnessed a steady increase in productivity and flow of container traffic with the implementation of the highly efficient integrated systems and operational processes,” he added.

https://www.facebook.com/businessdayng

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dekunle Oyinloye, Group Managing D i re c t o r, S I FA X Group, has identified comprehensive review of business processes and operations as well as willingness to adapt to new realities as survival strategies for businesses amid current economic crunch as a result of the outbreak of coronavirus (COVID-19) pandemic.

Reviewing the impact of the health crisis on businesses in Nigeria, he listed supply chain disruption, inflation, hike in prices of goods and services, weakened consumer purchasing power, contracting economy and business collapse, especially among Small and Medium Enterprises (SMEs) and high-risk corporations as major hurdles businesses are currently facing.

According to Oyinloye, businesses need to build resilience in the midst of harsh operating environment.

“It is not an all-gloom situation as many businesses @Businessdayng

will rise from the ashes of this pandemic to recover well and post impressive returns.

There are opportunities even in bad situations. Businesses just need to position themselves correctly for these opportunities,” he said.

He stated that ideas, processes and mindset that were useful pre COVID-19 might become obsolete for businesses as the world gradually transit to a new era.

“There is need for critical thinking, new business processes and templates, improved technology adoption, identifying and embracing new business opportunities and ability to adapt and respond to changing business dynamics,” he stated.

Oyinloye further lauded the combined efforts of governments, corporates, development partners, health workers on the frontlines and other stakeholders, in tackling the pandemic.

He added that such collaborative efforts would certainly help in containing the spread of the virus and for better management of the fall out.

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Wednesday 13 May 2020

BUSINESS DAY

FEATURE

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 13 May 2020

BUSINESS DAY

25

news

Reps clear way as Independent Candidacy Bill passes second reading James Kwen, Abuja

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head of the 2023 general, the House of Representatives has cleared the way for independent candidates, not sponsored by any political party to contest for elective offices.

This is as the House on Tuesday passed for second reading, a Bill for an Act to Alter the Constitution of the Federal Republic of Nigeria, 1999, to allow for independent candidacy to any elective office in Nigeria.

The present electoral system as defined by Section 131(c) of the 1999 Constitution of the Federal Republic of Nigeria stipulated that one can only contest for elective office if he or she is a member of a political party and is sponsored by that political party.

In a lead debate, the sponsor of the Independent Candidacy Bill, Mohammed Mongonu (APC, Borno), argued that the independent candidacy would spur true federalism in the country and deepen the democracy being practiced.

The House Chief Whip asserted that the current challenges in the political firmament prompted the Bill, which would allow every citizen to vie for political offices, adding that the rules of politics

were not cast in stone but were subjected to amendments to meet contemporary challenges.

Mongonu said views abound that few people who hijack political parties hinder those that have contrary views from theirs from expressing themselves politically on the platform of a political party.

According to Mongonu, “The perception right now in the political arena is that political parties are often hijacked by a powerful few and the decided who becomes the candidate for the party in any given election.

“Some people who have genuine intention to contest elections and make meaningful contribution in office are often schemed out. It is against this background that I move this Bill to create space for independent candidacy in our political process”.

Speaking in support of the Bill, Sergius Ogun (PDP, Edo) said Nigeria practiced the American Presidential System of government where independent candidacy was allowed and the country could not deviate from this norm.

When the independent candidacy comes and is fully established in Nigeria’s politics, it would go a long way to strengthen democracy in the country, he said.

www.businessday.ng

Imported vaccine may not be effective NOVA Merchant Bank holds 3rd in Nigeria, Unilorin professor AGM virtually ENDURANCE OKAFOR

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igeria needs to go back to funding laboratory research in order to develop a local vaccine for the Covid-19 disease as there is the probability that imported vaccines may not be effective in the country, according to Matthew Kolawole, a virologist and also professor at the Faculty of Science, University of Ilorin (Unilorin).

With a high community transmission of the novel virus, the professor says Nigeria needs to look inward on how it can develop its Covd-19 vaccine.

“If we have a vaccine from outside, it is possible it won’t be effective in this country,” Kolawole states on Sunrise Daily, a Channel TV breakfast show on Tuesday, saying, “We need to return to the track because Nigeria in the past was developing vaccines that we were even exported to West African nations.”

Data by Nigeria Centre for Disease Control (NCDC) show that 242 new cases of Covid-19 were confirmed on Monday, giving a total of 4641. Out of which, Lagos, the epicentre of the pandemic in Nigeria, led with 88 cases, and was closely followed by Kano (64 cases). A

spate of deaths in Kano, initially dubbed ‘mysterious deaths’ have been confirmed to be linked to the virus.

While 49 cases were recorded in Katsina, 13-Kaduna, 9-Ogun, 6-Gombe, 4-Adamawa, 3-FCT, 1-Ondo, 1-Oyo, 1–Rivers, 1-Zamfara, 1-Borno, and 1-Bauchi, NCDC data revealed that 902 patients had been treated and discharged, and the death toll had climbed to 150 since the first case was reported in Nigeria on February 28, 2020.

Meanwhile, as of Tuesday, there has not been a certified cure by the World Health Organisation (WHO) for treating coronavirus.

The professor is, however, promoting local production of the Covid-19 vaccine in Nigeria, and according to him: “Of course, there is a need for follow up which has to do with funding, Nigeria is highly endowed with the technical know-how and the human resources.”

He explains that Africa’s most populous nation has a lot of experts but “all we need is for us to move on from the stage of the proposal to the stage of funding.”

This is coming as Nigeria is stretching its arms to finding a possible cure from any part of the world, especially from Africa.

https://www.facebook.com/businessdayng

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ova Merchant Bank on Thursday, May 7, 2020, embraced digital technology as the financial institution held its third annual general meeting (AGM) virtually at its head office in Victoria Island, Lagos.

The meeting was held virtually in strict adherence with stipulations by the Federal and state government in a bid to limit the spread of the coronavirus pandemic currently ravaging the world.

The meeting, led by the chairman, NOVA Merchant Bank, Phillips Oduoza, had in attendance the managing director, Anya Duroha, company secretary, Nnadozie Ohaji, Board of Directors, shareholders, as well as representatives from key financial regulatory organisations including the Central Bank of Nigeria and the Nigerian Deposit Insurance Corporation.

Shareholders at the meeting lauded the innovative concept of the virtual meeting, which according to them, showed that the bank is ahead in keeping up with the times, while ensuring continuous safety of both staff and shareholders.

They also commended its

@Businessdayng

impressive performance and urged the bank to continue the growth trajectory notwithstanding the current macroeconomic headwinds occasioned by the coronavirus and drop in oil price.

While presenting the bank’s financial performance for the year ended December 31, 2019, Oduoza noted that the bank reported a significant improvement in all the key financial indices compared to 2018 achievements.

He attributed this growth to the successful execution of the 2019 strategic plan in line with the key strategic pillars to position the bank as a market leader by 2025.

“While we acknowledge the present macro-economic landscape and its concerns, and even though we see that the situation remains very fluid, It is our firm belief that the COVID-19 crisis will also result in several opportunities for the Bank, as industry dynamics evolve,” Oduoza said.

He assured the shareholders that the Bank will continue to focus on digital banking, provision of long-term funding, wholesale and investment banking while maintaining a lean operating philosophy.

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Wednesday 13 May 2020

BUSINESS DAY

news

Mirene Global gets data protection compliance licence from NITDA SEGUN ADAMS

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ational Information Technology Development Agency (NITDA) has issued Mirene Global Consults a Data Protection and Compliance Organisation (DPCO) licence.

As a DPCO, Mirene Global Consults will assist public and private organisations to comply with the Nigerian Data Protection Regulation (NDPR) through provision of the following services: Comprehensive Data Mapping Audit, Data Protection Impact Assessment, Risk Management Framework, Create Bespoke NDPR Policies & Procedures, Support Implementation and Training, Set-up Ongoing Due-Diligence Process, Recommend Right Tools for Compliance Maintenance, and provide Data Protection Officer (DPO) as-a-service.

Speaking on this development, Michael Irene, managing partner, Mirene Global Consults, says, “This licence couldn’t have come at a better time. Our appreciation goes to NITDA for granting us the license.

To create a safe Nigerian business environment, it is imperative for organisations to showcase their technical and organisational measures in management and security of data.”

The Nigerian Data Protection Regulation (NDPR) aims to achieve the following: safeguard the rights and freedom of humans, foster safeconduct for transactions involving the exchange of Personal Data, prevent manipulation of Personal Data, and ensure that Nigerian businesses remain competitive in international trade through the safe-guards afforded by a just and equitable legal regulatory framework on data protection.

The regulation applies to companies and businesses that collect personal data via online services from consumers or via other electronic means.

Speaking further, Irene says, “We have also worked in the EU with several organisations to help them build, plan and implement the processes and controls needed to demonstrate and manage ongoing GDPR compliance.

“With Mirene training programmes, organisations can meet the education and awareness goals of the Nigerian Data Protection Regulation and the EU data protection regulation (GDPR). Our training packages will not only create robust awareness but also help improve the skill set of privacy professionals.” he concluded.

Governors to meet today for review of COVID-19 health response, strategies Joshua Bassey

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overnors of the 36 states of Nigeria under the aegis of Nigeria Governors’ Forum (NGF) have announced plans to meet for a review of various strategies to dealing with the COVID-19 pandemic ravaging the country.

They explain that the need to review and assess the various health responses by states and Federal Government deployed against the deadly respiratory disease had necessitated the meeting.

The Forum’s spokesperson, Abdulrazaque Bello-Barkindo, reveals that the meeting, scheduled for Wednesday, May 13, is in line with the governors’ periodic assessment of impact of the various measures put in place to curtail the spread of coronavirus in the country.

Bello-Barkindo, in a statement on Tuesday, notes that the meeting would form the eight series of such teleconference meeting to be held by the 36 state governors since the outbreak of the pandemic.

According to Bello-Barkindo, part of the issues to be discussed at the meeting scheduled for 2pm include an update from the Presidential Task Force, on Covid-19, a

new initiative code-named CACOVID – Volunteer Health Workers Support Scheme to States, which includes a consideration for a CACOVID – healthcare training proposal, among others.

He adds that the governors would use the opportunity to also review the situation across the states in Nigeria, while proposing measures to navigate the effect of the pandemic on the citizens and economy.

“The governors will also take a peek into the CACOVID Distribution of palliatives and also receive a feedback from states. It is expected to get an update on the lockdown and see whether or not the palliatives have made any impact on the citizenry.

“The governors will also discuss the NCDC Bill, 2020 among other matters, apart from taking a critical look at the nation’s economic sustainability plan, post Covid19.

“The Group Managing Director of the Nigerian National Petroleum Corporation (GMD-NNPC), Mele Kyari is also expected to join the meeting to discuss the intervention and coordination efforts of the NNPC since the outbreak of the pandemic,” according to the statement.

Goxi Microinsurance brings succour to victims of fire outbreaks, others

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OXI Microinsurance, a premier microinsurance company, says it paid over N41 million claims to operators of micro and small business enterprises in first quarter of 2020.

According to the managing director, Shina Gbadegesin, the claims range from incidences of fire occurrence, death, burglary and disability. The victims of recent fire incidents at Balogun, Amun and Owode Markets in Lagos State were among the beneficiaries.

A total of 181 policyholders who are owners of micro

and small businesses benefitted from the claim paid by the company.

The MD reiterated the commitment of the microinsurance company to assist low income people and owners of micro and small businesses to manage their associated risks in order to create a sustainable future for them and their family.

GOXI Microinsurance was in 2019 licensed as the first stand-alone microinsurance company in Nigeria to provide insurance products and services to owners of micro and small businesses. www.businessday.ng

L-R: Aisha Kaura, wife of the chairman of Bagudo Local Government Area of Kebbi State; one of the beneficiaries, and Zainab Bagudu, wife of Kebbi State governor, during the distribution of COVID-19 palliatives to vulnerable women, youths NAN and physically challenged persons by the governor’s wife, at Illo town in Kebbi State.

NEITI report confirms FAAC shared N1.945trn between FG, states, LGs in Q1 2020 HARRISON EDEH, Abuja

… Q1 disbursement is highest since 2014

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that the Q1 2020 FAAC disbursements are the highest first quarter disbursements since 2014. “Total disbursements were N1.648 trillion in Q1 2015, N1.132 trillion in Q1 2016, N1.411 trillion in Q1 2017, N1.938 trillion in Q1 2018, and N1.929 trillion in Q1 2019,” the publication states.

The review examines FAAC disbursements in the first quarter of this year and made projections on the possible impacts of COVID-19 on government revenues.

“While total disbursements in Q1 2020 were slightly higher than Q1 2019 and Q1 2018, disbursements to the three tiers of government in Q1 2020 were slightly lower than Q1 2019 and Q1 2018.

This is due to transfers to other accounts in Q1 2020, which were not done in either Q1 2019 or Q1 2018. These include allocations to the North East Development Commission and transfer to Excess Crude Account,” the review stated.

The NEITI Quarterly Review explained that total FAAC allocations during the period under review comprised of gross disbursements to the Federal Government, States, Local Government Councils and the 13% Derivation. It also covered cost of

mid the growing challenges of the COVID-19 pandemic and lockdowns across the world, the Federation Accounts Allocation Committee (FAAC) disbursed N1.95 trillion to the Federal, states, local government areas and other statutory agencies in the first quarter (Q1) 2020.

A breakdown of the disbursements shows that N791.4 billion went to the Federal Government, N669 billion was shared by the states and about N395 billion was shared by the 774 local government areas.

The balance went to the North East Development Commission, the Excess Crude Account, Federal Inland Revenue Service (FIRS), Nigeria Custom Service (NCS) and the Department of Petroleum Resources.

Orji Ogbonnaya Orji, director of communications and strategy in NEITI, said in a statement that these pieces of information and data were contained in the latest edition of the Quarterly Review

by Nigeria Extractive Industries Transparency Initiative (NEITI) released in Abuja.

The NEITI report also notes

collections by the Nigerian Customs Service, the Federal Inland Revenue Service, the Department of Petroleum Resources and other allied handling charges.

NEITI noted that from the previous years, with the exception of 2018, the general trend since 2015 had been that total disbursements fell in the second quarters, before rising in the third quarters. It also noted that with the COVID-19- pandemic, it is almost certain that total disbursements will fall in the second quarter of 2020.

On FAAC disbursements to states between January and March this year, there was a wide disparity between states as Osun State with the lowest allocation received N6.44 billion and Delta State with the highest disbursement received N52.03, a difference of 708%.

The review also disclosed that Delta State’s net FAAC disbursements were higher than the combined total net disbursements of N50.67 billion of the six lowest receiving states, comprising Osun, Cross River, Plateau, Ogun, Ekiti and Gombe. Further analysis revealed that combined disbursements to four states (Delta, Akwa Ibom, Rivers and

Bayelsa) with the highest net FAAC disbursements were higher than the combined net disbursements for the 17 states with the lowest disbursements.

“The combined total net disbursement to these four states was N167.76 billion. This figure is higher than the combined total of N159.99 billion received by the 17 lowest receiving states (Osun, Cross River, Plateau, Ogun, Ekiti, Gombe, Zamfara, Kwara, Nassarawa, Ebonyi, Taraba, Benue, Adamawa, Bauchi, Abia, and Kogi)”, the review stated.

According to the NEITI Quarterly Review, 31 states received less than N20 billion as total net FAAC disbursements in the first quarter of this year while only five states received more than N20 billion. The States are Lagos (N26.23 billion), Bayelsa (N35.14 billion), Rivers (N39.99 billion), Akwa Ibom (N40.61 billion), and Delta (N52.03 billion) respectively.

Furthermore, the review disclosed wide disparity in the amounts deducted from the states as their debt obligations.

For instance, Lagos State had the highest deductions of N14.92 billion, while Yobe State had the lowest deductions of N820.18 million.

As NHA seeks N1.5bn grant to cushion effect of COVID-19, appeals for 3-year tax exemption in Nasarawa Solomon Attah, Lafia

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hairman, Nigeria Hotel Association (NHA) in Nasarawa State, Abeku Danjuma, has appealed to the state government to grant them N1.5 billion stimulus to cushion the effects of COVID-19 on their businesses.

The chairman also appealed to the state government to grant their members three years tax exemption to enable them recover from the loss incurred during the partial lockdown in the state.

Danjuma made the appeal when he led other members of the association on a courtesy visit to the commissioner of in-

formation, culture and tourism, Dogo Shammah, in Lafia, the state capital.

The chairman, who attributed the low patronage in hotel business to the partial lockdown, said the sector in the last few weeks had been deserted by the emergence of the coronavirus.

He explained that hotels in the state were badly hit and had lost almost everything to the outbreak of COVID-19 and its consequences, saying, “Our businesses were shut down since the outbreak without customers, which means complete blockage in our income.

“The stimulus would serve as a backup to sustain the hospitality and tourism industry

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from total collapse and prevent job loses.”

He further appealed that the government should grant them three years tax holiday to enable them recover from the shock of the effects of the pandemic.

He also said the government should grant them permission to conduct home delivery of food to their clients that required such services due to restriction of movement.

“The government should also approve special identity cards to staff of hotels registered with the association to enable them move to markets for purchase of essential items for their hotels,” he said.

The NHA chairman therefore directed all their members @Businessdayng

not to retrench staff to avoid youths restiveness in the state and hardship on the people.

Responding, the Commissioner of information thanked the association for their contribution to the economy development of the state.

Shammah expressed the willingness of the Governor Abdullahi Sule-led administration to work with the association toward the development of the tourism industry.

He explained that already the government was working on a bill to reposition hotels in the state for better performance, and therefore assured the association that their request would be forwarded to the governor for consideration.

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news

Dollar shortage pushing us to the brink say Nigerian manufacturers

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igerian manufacturers are struggling to stay in business because a foreign-exchange shortage spawned by the collapse in oil prices means they can’t import raw materials.

According to a report by Bloomberg, the industry’s difficulties are the latest signs of strain in Nigeria’s foreign-exchange regime.

The central bank was

forced to devalue the naira in March as income from crude sales that generate 90% of the West African nation’s export earnings dried up. Foreign investors looking to repatriate their funds have been asked to be patient.

Members of the Manufacturers Association of Nigeria have been unable to access hard currency for the past five weeks, the group said in a report at the weekend.

Investment bank FBNQuest estimates there’s a $1 billion backlog of unmet dollar demand in Nigeria.

“Everybody is trying to remain afloat,” Mansur Ahmed, president of the MAN, said Monday.

“Certain sectors will suffer more than others, notably those companies that are heavily dependent on imports” such as pharmaceuticals, electricalproducts and automobile

businesses, he said.

The naira currently trades at 445 per dollar on the streets of Lagos, the commercial capital, compared with the official rate of 386 per dollar. Twelvemonth naira forwards were trading at about 514 per dollar on Monday, suggesting investors see the currency falling to around that level in a year.

Economies around Continues on page 31

R-L : Aliyu Modibbo Umar, chairman, FCT Ministerial Expert Advisory Committee on COVID-19; Muhammed Bello, minister of the FCT; Ramatu Tijjani-Aliyu, minister of state, FCT, and others, at the commissioning of 500-bed COVID-19 Isolation and Treatment Centre at Idu District, in Abuja.

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Buhari gets full approval of NASS on N850bn external borrowing to fund 2020 budget … as Reps begin review, probe of the power sector James Kwen, Abuja

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resident Muhammadu Buhari on Tuesday got the full approval of the National Assembly to borrow N850 billion to fund critical projects in the 2020 budget.

This followed the approval by the House of Representatives of the president’s request to raise N850 billion in the New External Borrowing Plan of the Federal Government in the 2020 Appropriations.

Buhari had in a letter to the House last week Tuesday requested the approval of the loan which had already been approved by the Senate on April 28.

The House approved the request after consideration of the report of the committee of the whole. The report submitted by Alhassan Ado-Dogwua, leader of the

House, requested the House to “Approve the Request to Raise N850 Billion in the New External Borrowing Plan in the 2020 Appropriations Act in Naira from the Domestic Capital Market”.

Fe m i Gb ajab i a m i l a, speaker of the House of Representatives, had not read the letter in full, but a copy of the same letter sent to the Senate said the 2020 Appropriation Act provided for N1,594,986,700,544 of new domestic borrowing and N850 billion of new external borrowing. These borrowings were to finance the 2020 budget deficit of N2,175,197,885,232 only.

“Furthermore, the Senate may wish to note that external borrowing from the international capital market increases Nigeria’s external reserves, provides access to lower costs as well as avoids crowding out private sector www.businessday.ng

borrowers who also wish to access the domestic capital market.

“However, recent developments in the global economic environment as a result of the coronavirus pandemic and the decline in international oil prices have made it less attractive to borrow from the international capital markets at this time,” the letter said.

To ensure that there are adequate funds to finance critical projects and programmes in the 2020 budget, the president said he was seeking the Senate’s approval of that resolution to raise the N850 billion of new external borrowing in naira from the domestic capital market instead of from the international capital market.

“However, it remains our intention to access the international capital market when conditions improve to

refinance this N850 billion of new borrowing and epitomise the benefits inherent in external borrowing,” Buhari said in the letter to the Senate.

He said he had directed the minister of finance, budget and national planning to make herself available to provide the Senate any additional information or clarification it may require, adding that he looked forward to expeditious consideration of the request to accelerate the raising of the N850 billion new borrowing “to part finance the 2020 budget deficit as well as to deliver critical programmes and projects to the Nigerian people”.

Meanwhile, the House of Representatives on Tuesday mandated its Committees on Power and Privatisation to review the extant laws, regulations, policies, and contractual arrangement guiding the Power Sector Reform.

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COVID-19: CBN says working on grants, facilities to aid researchers produce local vaccines … We are not expecting vaccines until 2021 – FG Anthony Ailemen, Innocent Odoh & Harrison Edeh, Abuja

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he Central Bank of Nigeria (CBN) on Tuesday said it is developing a framework under which grants and long-term facilities would be provided to researchers, science institutions and biotechnology firms to develop a local vaccine.

This is aimed at encouraging greater research and development of drugs and vaccines that would help prevent the spread of the coronavirus in Nigeria, Godwin Emefiele, CBN governor, said at the commissioning of THISDAY Dome COVID-19 Testing, Tracing and Treatment Centre in Abuja.

“Needless to state that if we are to wait for foreign countries to develop their own vaccines, we will be the last in the queue to receive curative remedies for our teeming population,” Emefiele said speaking on the need to develop a homegrown solution to tackle the dreaded virus.

He challenged Nigerian scientists at home and in the diaspora to go back to their laboratories and develop a

Nigerian vaccine.

The THISDAY Dome COVID-19 Testing, Tracing and Treatment Centre, donated

by THISDAY Media and Technology Group, is capable of accommodating about 360 patients with potential to hold up to 500 patients with further needs and is equipped with a mobile laboratory. It was commissioned by Boss Mustapha, chairman, Presidential Task Force on COVID-19.

“Once validated by the health authorities, the CBN will step in and do the needful for the sake of over 200 million Nigerians now confronted by COVID-19,” Emefiele said.

“Our inability to accurately predict the extent to which the coronavirus could spread, and how long it would last, requires that we build sufficient capacity within our health system in order to contain the spread of the virus, state by state, city by city, and preserve the lives of vulnerable Nigerians.

This requires that we all come together to support the ‘work of the Presidential Task Force in its determination to save lives and stem the pandemic,” he said.

Public varsities lag private peers as COVID-19 ‘forces’ digital learning … infrastructure deficit, strike take the blame KELECHI EWUZIE

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igital learning is gaining prominence across the globe amid the coronavirus pandemic that has forced closure of traditional schools, but government-owned universities in Nigeria are finding that they are ill-prepared for the shift.

Larry Dignan, editor in chief of ZDNet and editorial director of TechRepublic, in a March 22, 2020 article for Between the Lines, said, “It is online learning’s big moment and education is about to be revamped just as much the industries that are going to remote work due to the novel coronavirus.”

Privately-owned universities in Nigeria have embraced this “big moment”, but not so for most federal and state universities across the sixgeo-political zones who are battling with lack of basic infrastructure for online learning, ASUU strike, among other challenges.

Amid the disruption in traditional learning occasioned by closure of lecture halls, Adamu Adamu, Nigeria’s minister of education had, through @Businessdayng

teleconferencing with all vicechancellors, provosts and rectors of tertiary institutions in the country, directed the tertiary institutions to move to online learning with immediate effect.

But over a month after, most public universities say they are awaiting the directive from the Academic Staff Union of Universities (ASUU) to call off the strike they embarked on since March 23 over the Federal Government’s decision to withhold the February salary of their members who refused to enrol on the Integrated Payroll and Personnel Information System (IPPIS). Only Kaduna State University, Lagos State University and First Technical University in Ibadan are public tertiary institutions that have keyed into the online classes, a check by BusinessDay shows.

Maurice Onyiriuka, a lecturer in one of the state universities, acknowledged that online education is the only viable option to minimise academic losses to students, but said universities’ lecturers who are supposed to upload their lecture notes online are still on strike.

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news Why investors prefer Egypt to Nigeria...

Continued from page 1

“The data show Egypt is more serious than Nigeria,” a money manager told BusinessDay. “There’s a lot of catching up for Nigeria to do in terms of making the environment more conducive for investment.

The Petroleum Industry Bill, for instance, which should trigger FDI into the oil sector, has no business being stuck for decades.”

Last year, Nigeria with an inflow of $3.4bn barely got half of the FDI receipt Egypt had ($8.5bn), according to data from UNCTAD, the main UN body dealing with trade, investment and development issues.

After the oil crash of 2016, Egypt undertook structural reforms that have moved the economy to a more market-oriented one. Under the auspices of IMF, the country embarked on a three-year reform programme and the results have seen stronger FDI inflows compared to peers.

Among other things, Egypt took steps to keep public debt on a downward trajectory, phased out subsidies on most fuel products as part of the IMF-backed economic reform programme and freed up fiscal space for social spending.

Fuel subsidies, for instance, are gradually making way in order to incentivise private investment.

According to Egypt’s petroleum minister, the country’s spending on fuel subsidies dropped by about 65 percent to 21 billion Egyptian pounds ($1.34 billion) in July-March.

These steps improved the perception of Egypt in the eyes of foreign investors.

Notably, floating the

Egyptian pound has helped the country attract foreign flows into its economy via the oil and gas sector, while major investments have been in telecommunications, real estate and tourism.

Today, the dollar exchanges for 15.79 Egyptian pound while the naira, at N360/$, is said to still be too strong.

The Central Bank on Sunday promised an orderly exit for investors repatriating capital but the naira non-deliverable for ward contracts are showing signs of currency pressure with five-year contracts above N500.

Another clear distinction between both economies is seen in their respective central banks’ firepower. For Nigeria’s more rigid currency regime, the CBN has $34bn while its Egyptian counterpart has $37bn.

The availability of dollars for Egypt has helped ease pressure on consumer prices which have fallen from over 20 percent to just 5.881 percent while Nigeria’s inflation, at 12.26 percent, is moving further from CBN’s preferred maximum of 9 percent, according to latest data.

Egypt’s economy, as a result of some of the fiscal, monetary reforms including privatisation of assets, has led to its fast growth and the resilience of its economy.

Compared to Nigeria’s 2.3 percent, Egyptian economy grew by 5.6 percent for their respective 2019 fiscal year.

The International Monetary Fund (IMF) says the country’s economy would expand 2 percent in 2020 and Nigeria’s would contract 3.4 percent due to the COVID-19 effects.

Dollar shortage pushing us to the brink...

Continued from page 27

the world, developed and emerging alike, have been caught short of dollars thanks to the coronavirus crisis.

A small group has benefited from swap lines with the U.S. Federal Reserve designed to alleviate those pressures, which became particularly acute in March. Nigeria is not on the list, which does include countries such as Brazil and Mexico.

As Nigerian manufacturers turn to domestic suppliers for raw materials, machinery and spare parts, the association appealed to the central bank

to review rules hindering the ability of lenders to extend credit.

This includes “policy contradictions” that require banks to lend 65% of their deposits -- a measure aimed at stimulating credit -- while parking 27.5% of their capital with regulators, which makes a “lesser quantum of money available for lending,” the group said in a statement.

Manufacturers are also seeking lower interest rates and bigger loans, the size of which “has shrunken greatly” as increased borrowing by the government crowds out companies, MAN said. www.businessday.ng

L-R: Auwal Musa Rafsanjani, executive director, Civil Society Legislative Advocacy Centre (CISLAC ); Femi Gbajabiamila speaker, House of Representatives, and Samson Itodo, executive director, YIAGA Africa, after a meeting with members of Civil Society Organisations on the appraisal of measures in tackling the health and economic effects of the Covid-19 pandemic on Nigerians, at the National Assembly, Abuja.

Buhari disappoints speculators, unveils...

Continued from page 1

But it was only 25 days yesterday when the announcement came.

Another school of thought had also said that such an announcement would not come until after the Ramadan period currently in place.

But the announcement yesterday has put to rest all permutations. Gambari, BusinessDay gathered, would be officially inaugurated today.

“It’s positive that the president didn’t waste time in appointinganewchiefofstaff,even though this looks very much like a political appointment,” an investment banker who did not want to be named said.

“That it’s a political appointment brings some uncertainty with it as we do not know his economic leaning,” the investment banker said.

A Lagos-based asset manager said the new appointee seems to have impressive credentials but there’s little out there about what such an appointment would mean for the economy given he has mostly been in public service.

“For now, it’s anyone’s guess what implication this

Nigeria’s monetar y policy committee bucked the global trend of slashing borrowing costs to minimize the fallout of the coronavirus because of persistently high inflation, keeping its benchmark rate at 13.5% in March.

Central Bank of Nigeria spokesman Isaac Okorafor didn’t answer calls seeking comment.

The central bank previously had multiple exchange rates that applied to exporters, investors, foreign-exchange bureaus and others.

The system was an effort to control demand for dollars and help keep the naira steady -- a lynchpin of President Muhammadu

has for the economy other than a new chief of staff is about to be installed in timely fashion following the passing of Abba Kyari,” the person said.

By selecting the diplomat, President Buhari must have found in him some qualities that wereinthelateKyariandstrongly believes also that he would deliver good, a political commentator said pleading anonymity.

Recall that that Buhari so relied on his late CoS that he almost handed to him the reins of power, making the man assumed so much power as if he were a prime minister in a presidential setting.

At his death, Buhari declared: “Kyari was the very best of us, a loyal friend.”

The man Gambari He was the first UnderSecretary-General and Special Adviser to the SecretaryGeneral on Africa (19992005). In that capacity, he worked closely with heads of government, key policymakers as well as institutions in the continent to develop the New Partnership for Africa’s Development (NEPAD).

During this period, he was concurrently the Resident

Special Representative of the Secretary-General and Head of the United Nations Mission to Angola (2002-2003).

He has been a delegate to the Assembly of the African Union as a national delegate (1984-1985) and as a member of the UN Secretary-General’s delegation (2000-2012).

Ambassador Gambari, is currently the Founder/Chairman of Savannah Center External link in Abuja, Nigeria, a think-tank for research, training and public policy debate on the nexus between diplomacy (conflictresolution),democracy and development in Africa. His last assignment at the United Nations was as the Joint Special Representative of the Secretary General and Chairperson of the African Union Commission/ Head of the UN and AU Hybrid Mission in Darfur (UNAMID) from January 2010 to July 2012.

During Ambassador Gambari’s tenure, UNAMID was the world’s largest international peacekeeping mission.

The Ambassador has held severalleadershippositionsatthe national, regional and international levels and has built extensive contacts with governments as well as public and private institutions, especially in Africa.

Buhari’s economic policy.

The bank abandoned the policy on March 21 when it devalued the currency after oil prices more than halved, raising pressure on crude-dependent economies like Nigeria.

The country is Africa’s largest producer of the commodity.

On Sunday, central bank Governor Godwin Emefiele said the bank has put in place an orderly process for investors looking to repatriate their funds, but they’ll need to wait. The country’s available foreign-exchange holdings will be devoted to strategic imports or to service obligations that are a priority, he said.

Last month, as part of its request for $3.4 billion of emergency funding to help the government deal with the fallout from the coronavirus pandemic, the central bank promised the International Monetary Fund it will seek a more flexible and unified naira.

The central bank has said that 1 trillion naira ($2.6 billion) of its virus intervention fund will be used to support domestic manufacturing.

The industry was the biggest borrower in the nine months through February, which the central bank has attributed to its policies that forced lenders to extend more debt to the private sector.

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@Businessdayng

He was the Chairman of the United Nations Special Committee Against Apartheid (1990-1994) during which he worked closely with African governments to coordinate UN policy to eradicate apartheid, thereby building trust and confidence with governments and policymakers in member countries of the Southern African Development Community (SADC).

At the global level, Gambari was Under-Secretary-General and Head of the United Nations Department of Political Affairs (2005-2007). In that period, he also operated as UN Secretary-General’s Special Envoy on Cyprus, Zimbabwe and Myanmar. On 22 May 2007, the Secretary-General entrusted him with the Good Offices Mandate on Myanmar. He was also appointed in 2007 by the Secretary-General as Under-Secretary-General and Special Adviser on Iraq Compact and Other Issues, positions he held until 2009.

Before joining the United Nations, he served his country as Ambassador and Permanent Representative of Nigeria to the United Nations (1990-1999). He was also Minister of Foreign Affairs of Nigeria (1984-1985) and worked closely with regional leaders, institutions and governments, particularly within the Economic Community of West African States (ECOWAS) on the economic and political development of the sub-region.

He was born on November 24, 1924 in Ilorin, the capital of Kwara State. He will be 76 years old in November.

He attended King’s College in Lagos then proceeded to the London School of Economics where he got a degree in Economics.

For his Masters and Doctorate Degree, he attended Columbia University. He majored in Political Science and International Relations.

He was the Minister for External Affairs between 1984 and 1985 under the then military Head of State, Major General Muhammadu Buhari.

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Odu’a Investment gets new chairman, board members REMI FEYISIPO, Ibadan

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wner states of Odu’a Investment Company Limited have appointed new chairman and five members into the board of the conglomerate. The investment company, owned by Oyo, Ondo, Ogun, Osun, Ekiti and Lagos State, announced Lawrence Segun Aina as the new chairman.

Aina, a former executive director of operations and technology, Ecobank, and chairman, Fintech Associates, will be leading the team of distinguished directors who are: Segun Ojo, a former commissioner for finance, budget and economic planning, Ondo State; Tola Kasali, who served as commissioner for rural development in Lagos State between 2003-2007; Seni Adio, managing partner of Copley Partners (Solicitors & Barristers); Olusegun Olujobi, who is ex-Accensure and energy industry player, and Bimbo Ashiru, a banker and immediate past commissioner for commerce and industry, Ogun State.

The appointment and inauguration of the new board was

announced on May 7, by the owner states.

Chairman of the Southwest Governors’ Forum and the Ondo State governor, Oluwarotimi Akeredolu, on behalf of the shareholders, expressed confidence in the individual capabilities of the Board members.

He said their nominations were made after a careful consideration of their wealth of experience, integrity and deep knowledge of the business environment.

The governors charged them to contribute their competence and expertise towards the repositioning and restructuring of the organisation in order to enhance performance, profitability and sustainable growth of the company’s businesses.

They were charged to ensure that the company delivers on its mandate to be the engine room for the economic development of the South West.

With the reconstitution of the Board, the shareholders have demonstrated their commitment to reposition Odu’a for the economic greatness of the South West.

L-R: Solomon Olasupo, commandant, Nigeria Security and Civil Defence Corps (NSCDC) in Plateau State; Simon Lalong, governor, Plateau, and Regina Soemlat, state commissioner for finance and member of the state’s COVID-19 management team, during the governor’s monitoring of the enforcement of the total lockdown for COVID-19 at the border of Plateau with Kaduna State, in Gengre on Tuesday.

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Restart or re-stop? Economies reopen but chaos abounds Titi Omobude

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ommuters began to gather at the imposing Oshodi traffic interchange as early as 5am Tuesday. Many appear to comply government directives to wear face coverings when out of home. The majority of the commuters are daily paid workers who must work daily to live. They have been locked up in their home for six weeks because of the coronavirus pandemic lockdown imposed by the government.

One, Ade Lateef, a bricklayer who lives in Agege is hoping he will be lucky at a large construction site on the island where he worked until the Coronavirus lockdown. “Everyday, I go there but they have not re-opened and now I have nothing to feed my wife and three children”, he told me, rushing towards a CMS bound commercial bus.

Ade, 55 is one of the two million or more workers n Africa’s most populous city who can now leave their homes since the restrictions were relaxed last

Justice delivery must not suffer on back of COVID-19, Sanwo-Olu says ... swears in 8 High Court judges Joshua Bassey

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overnor of Lagos State, Babajide Sanwo-Olu, has charged judicial officers to ensure that justice delivery does not suffer setback as a result of the COVID-19 pandemic.

Sanwo-Olu says members of the judiciary have a duty to keep the wheel of justice administration turning in this period of coronavirus (COVID-19) pandemic by fully acquainting themselves with the new culture of justice dispensation being driven by technology.

He gave the charge while swearing in eight newly appointed judges of the Lagos State High Court at Government House, Alausa, on Tuesday.

The judges include Dorcas Olatokun, Yahqub Oshoala, Omotola Oguntade, Olufunke Sule-Amzat, Rasul Olukolu, Sharafa Olaitan, Ezekiel Ashade, and Adeniyi Pokanu.

The governor said the continuity of judicial services in the period of public health emergency remained vital to boosting people’s confidence in the administration of justice system and to ensure adequate enforcement of regulations initiated to stop the spread of the pandemic.

According to Sanwo-Olu, “This chamber we are holding the swearing-in has just been opened for the first time in the last two months. This is the reality of the global coronavirus pandemic, which has evolved new culture in our interactions at homes and offices.

“In this period of public health emergency, we need the judiciary to keep the wheel

of the justice system moving.

The administration of justice system must not be halted because of the health crisis. Our judicial should fully adapt to the evolving culture and be at the services of those who seek redress and justice at the court.

“I have no doubt that the Lagos State judiciary, under the leadership of My Lord Justice Kazeem Alogba, will be an arm of government that we can continue to rely on as a partner in boosting people’s confidence in government and justice system.”

He said the judges earned their nominations and appointments to the High Court of the state based on their sterling credentials and experience in the respective areas of engagement.

He said: “Having gone through your resumes, I know you have all distinguished yourselves in the legal profession and we expect you are bringing your years of experience and service. We are convinced this journey would raise the standards of our judicial service.

“I congratulate our newly sworn-in justices and we believe you all have what it takes to be fair and equitable in dispensation of justice to our citizens.

By being sworn in as judges, you have brought honour to your family names. However, you must ensure that your names are not tarnished in the course of discharging your duty.”

The governor thanked National Judicial Council (NJC) for the painstaking vetting of the appointed judges’ credentials, noting that he was convinced that quality and calibre of the new judges would improve judicial process in the state.

week. But most offices and construction sites in the sprawling city have yet to open more than six days after they were told they could restart business.

As darkness gave way, hordes of mask wearing Lagosians begin to troop out of their homes as the continent’s largest economy hopes to restart economic activities crushed by stay at home orders forced by the coronavirus pandemic.

The government has warned it will re-impose the lockdown if residents would not heed to social distancing regulations in this city of 20 million people.

In Europe and elsewhere, newly reopened cities, are emerging from lockdowns as authorities seek to achieve the delicate balance tween health concerns and the need for the people to eke out a living.

Nigeria and others face a delicate balance of trying to restart battered economies without fueling a second wave of coronavirus infections.

Social distancing has become the order of the day but just how to do that on the usu-

ally congested passenger buses in Lagos is the big question.

In Senegal, the government has also began easing those restrictions, with the people told they must now learn to live with the virus that has killed over 286,000 worldwide. Over a million of those who were infected globally, have now recovered according data from Johns Hopkins University.

The extensive railway network in India roared back to life Tuesday as the government there allowed people back outside. The train tickets were sold out in hours in Delhi and Mumbai. The Netherlands sent children back to school and Greece and Spain further eased restrictions.

In Paris, hairdressers practiced their new workflow over the weekend ahead of Monday’s reopening, and planned to charge a “participation fee” for the new disposable protective gear they’ll need for each customer. Walk-in customers will be a thing of the past, said Brigitte L’Hoste, manager of the “Hair de Beaute” salon, who

expects the number of appointments to be cut in half.

“The face of beauty will change, meaning clients won’t come here to relax. Clients will come because they need ..”

Fears about new waves of infection have been born out in Germany, where a new cluster was linked to a slaughterhouse; in Wuhan, the Chinese city where the virus started; and in South Korea, where a single nightclub customer was linked to 85 new infections.

The South Korean government pushed back hard against that wave, halting the school reopenings that had been planned for this week and re-imposing restrictions on nightclubs and bars.

It is now trying to track 5,500 people who had visited a popular Seoul entertainment district by checking credit-card transactions, mobile-phone records and security camera footage.

In Africa, the danger inherent in restarting the economy was demonstrated in Ghana last week when a single coronavirus sufferer infected up to 500 workers at a plant.

Hurdles for new NBET board as poor remittances threaten bulk purchasing role HARRISON EDEH, Abuja

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ewly constitute d board of Nigerian Bulk Electricity Trading Company (NBET) chaired by Nigeria’s minister of finance and national planning, Zainab Ahmed, will face the hurdles of ensuring improved remittances by the Distribution Companies (Discos), enforcement of cost reflective tariff to enable it play its role as a bulk trader.

NBET was primarily established to play the role of a bulk purchaser through absorbing payment shocks and ensuring Generation Companies (Gencos) are paid in full, as such gas companies are paid also in order to enable market flow and avoid shocks that could lead to shut down of the electricity market in the country.

This role has not been

played efficiently, as power sector analysts say the Nigerian Electricity Regulatory Commission (NERC) needs to up its game in enforcement of a cost reflective tariff for the market, while addressing liquidity shortfall concerns that would guarantee any intervention NBET provides for the market, and even its possible recapitalisation.

“NBET cannot play that role of a building purchaser effectively by absorbing payment shocks and gap filling if the NERC cannot enforce a measure that guarantees the recovery of any intervention made by NBET,” Chuks Nwani, an energy lawyer and power sector analyst, states, exclusively to BusinessDay. Nwani expresses optimism that the minister of finance and national planning, Zainab Ahmed, chairing the board would offer her first-hand

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knowledge of what goes on in the sector as such she could fast track the process of ensuring NERC enforces effective cost reflective tariff to enable possible recapitalisation of NBET to play its bulk purchasing role effectively.

Nigeria’s electricity market had been characterised by numerous liquidity concerns and rising market debts.

With the increasing impact of rising foreign exchange on operating cost, anticipated gas shortage as bulk of the commodity used in nervy generation is associated gas, with the fall in oil prices will drive down demand and production, and the Covid-19 pandemic will leave the sector in worse shape.

Gas producers who generate the critical feedstock required to produce over 75 percent of Nigeria’s electricity are being owed billions of naira

by Gencos. Gencos in turn only @Businessdayng

get a query of their invoices by the Nigerian Bulk Electricity Trading guidelines company.

Joy Ogaji, executive secretary of Association of Power Generation Companies (APGC), told BusinessDay that the newly constituted board would need to sort out concerns of market discipline working with NERC in order to improve remittances to the market.

“They would also need to work with industry stakeholders to create a steady, growing electricity for the country, while also activating power purchase agreement contracts with a two-tier pricing capacity and energy, even if in a graduated manner going forward,” Ogaji said.

The newly NBET board should be able to provide effective payment security and guarantee for Gencos exposure to market, she said.

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FINANCIAL TIMES

World Business Newspaper

Global stocks hold steady as economies unwind lockdowns

Shares on Wall Street on track for fourth day of consecutive gains PHILIP GEORGIADIS AND HUDSON LOCKETT

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lobal stock markets wavered between modest gains and losses on Tuesday as governments grapple with the challenge of easing lockdowns while reducing the risks of a second wave of infections.

Shares on Wall Street opened higher, leaving its benchmarks on track for a fourth successive day of gains. The S&P 500 and the tech-heavy Nasdaq Composite both gained 0.4 per cent in the first minutes of trading.

Investors are closely watching the reopening of major economies, looking for signs of any flare-ups of the virus that could stall progress.

The UK has outlined a plan to slowly unwind its lockdown, while New York is poised to begin reopening, having passed the critical phase of its coronavirus ordeal, the state’s governor declared on Monday.

Economists at HSBC said realtime data point to a slow and steady recovery of economic activity in Europe, but that risk appetite for the region’s markets “remains

Fears have emerged over a possible second wave of infections in parts of Asia © AP

limited”.

European markets recovered from a negative open to nudge higher in afternoon trading. London’s FTSE 100 climbed 1 per cent, boosted by rallies in Vodafone and Kingfisher, while the composite Stoxx Europe 600 index rose 0.2 per cent.

Stocks across Asia softened on

new concerns over the impact of coronavirus in the region. Jim Reid, strategist at Deutsche Bank, said a pick-up in cases among economies that had reopened was one of the causes for the modest selling.

Fears have emerged over a possible second wave of infections in parts of Asia, with Wuhan — the origin of the virus in China — this

week reporting its first cluster of new infections since relaxing quarantine measures.

South Korea’s Kospi index dropped 0.7 per cent after authorities reported a cluster of fresh Covid-19 infections tied to an outbreak in Seoul’s nightlife district.

Hong Kong’s benchmark Hang Seng fell 1.4 per cent, while Japan’s

Topix slipped 0.3 per cent.

Stock markets have rallied in recent weeks on optimism that the global economy will make a V-shaped recovery once policymakers manage to contain the disease. But some investors believe markets will struggle to mount further gains.

“Despite the recent gains made

by US large-caps, we think it’s likely a stretch for investors to chase the move much higher from here,” warned Eoin Murray, head of investment at Federated Hermes International.

Oil prices were higher a day after leading producer Saudi Arabia said it would reduce output by another 1m barrels a day from next month in a bid to shore up prices.

Brent crude, the international benchmark, was up 2.4 per cent at just above $30 a barrel. West Texas Intermediate, the US marker, rose 5 per cent to $25.55.

Donald Trump, the US president, welcomed the rise in the oil price, saying the US energy industry was “starting to look very good again”.

The yield on US government bonds edged lower, with the 10year note slipping 0.01 percentage points to 0.7193 per cent.

BlackRock throws support behind US exchange start-up MEMX World’s largest asset manager takes board seat at venue that aims to shake up equity market PHILIP STAFFORD

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lackRock has joined a host of Wall Street banks, brokers and high-speed traders throwing their support behind Members Exchange, the new US stock-trading venue mounting a challenge to the New York Stock Exchange and Nasdaq.

The world’s largest asset manager is one of five new investors to join the latest round of fundraising for MEMX, raising another $65m ahead of its planned launch later this year. BlackRock will also take a seat on the board.

When it launches in the third quarter, MEMX will arrive into a highly competitive domestic market for trading shares. Last week regulators approved it as the 15th US stock exchange.

Most of the others are owned by the NYSE, Nasdaq or CBOE Global Markets.

BlackRock is one of five new investors to join the latest round of fundraising for MEMX © Bloomberg

BlackRock’s involvement adds to the swelling number of big capital-markets groups standing behind MEMX. Many of the most active traders of shares on US markets, including JPMorgan, Goldman Sachs, Morgan Stanley, Virtu Financial, Citadel Securities and Fidelity, have also supported the venture. www.businessday.ng

It also potentially extends BlackRock’s influence as one of the most vocal lobbyists for changes to policy in the US and Europe. “BlackRock has long been an advocate for market structure enhancements that increase transparency and efficiency,” said Hubert De Jesus, the company’s global head of market

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structure and electronic trading.

BlackRock also owns a 3.9 per cent stake in Nasdaq and a 4.9 per cent stake in Intercontinental Exchange, the parent company of NYSE, according to data from Refinitiv.

Market participants have complained about the annual fees charged by the big exchanges for access to real-time information on prices and trading interest for deals. Last week the Securities and Exchange Commission ordered exchanges to allow brokers more control over a slower but widely distributed stock market data feed.

MEMX will not charge initially for market data or for connecting to its venue, but plans to do so later, promising “simple and fair pricing”. Still, firms will incur other IT and trading costs themselves in moving to the new venue. The exchange is due to open in the third quarter, having @Businessdayng

put back an initial July launch date because of the pandemic.

“I can tell you from engagement with our customers that everyone is still very interested and excited to see us come to market,” Jonathan Kellner, chief executive of MEMX, told the Financial Times.

“People ultimately see that even if there is a small increase in costs initially, that the reduction in costs across the board, and the impact that we have, will be much greater. There’s going to be a renewed focus on costs as we come out of this.”

Mr Kellner said MEMX’s goal in recent months was to bring in more strategic investors, rather than raise more funds. Even so, the new funds takes its total fundraising to $135m. Banking group Wells Fargo and New York-based hedge fund Manikay Partners also invested in the latest round.

Wednesday 13 May 2020

BUSINESS DAY

34

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

China-focused hedge funds record best month in half a decade Gains in April helped by optimism over rebound by world’s second-biggest economy HUDSON LOCKETT

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hina-focused hedge funds recorded their best monthly performance in half a decade in April, as a rebound in the country’s markets following the coronavirus sell-off helped investors outperform their global peers.

The Eurekahedge Greater China Hedge Fund index — which tracks almost 70 hedge funds with about $30bn between them — climbed 9.7 per cent last month, according to new data. That was its best showing since April 2015, and brought its year-to-date performance to a gain of 2.5 per cent.

Hedge funds investing in the world’s second-biggest economy were supported by a strong rally in Chinese markets during the period, as Beijing began to restart commercial and industrial activities that had been paused to contain the Covid-19 outbreak.

Mohammad Hassan, head analyst for hedge fund research at Eurekahedge, said China-

Workers at a truck factory in Zhangjiakou, China, on Tuesday. The country is restarting commercial and industrial activities that had been paused to contain Covid-19 © AFP via Getty Images

focused funds had benefited from a tendency to invest in small and mid-cap companies, which had gained more in April than the larger and more frequently traded stocks in the CSI 300 benchmark index. The investment firms had “done a good job of capturing the market upside,” he said.

Global funds tracked by Eurekahedge climbed 3.7 per cent over the same period, their strongest monthly performance in years but still leaving them down 4.6 per cent this year.

“We think China as a whole, for risk-adjusted return, is still the best,” said Monica Hsiao,

chief investment officer at Hong Kong-based Triada Capital, an Asia credit-focused fund that saw a gain of 4.25 per cent in April.

The debt markets have generally been trickier to navigate.

Concerns have mounted over the outlook for Chinese property developers, which have

been hit hard by the pandemic and face a $20bn wall of payments on dollar debt maturing this year.

Tuesday also brought the first default in China’s offshore bond market to result from this year’s oil price crash. Hong Kong-listed oil explorer MIE Holdings confirmed it had failed to make an interest payment of about $17m within the 30-day grace period for its 2020 US dollar bond, which had a coupon of 13.75 per cent.

Ms Hsiao said that the default by MIE did little to move the dial for high-yield issuers in the region. The risk of offshore default for Chinese developers was also relatively low, she said, as borrowers had plenty of access to funding from banks onshore at rates far below what they could get from offshore markets.

With default rates by riskier Asian companies forecast to rise as high as 5.5 per cent this year, and US rates expected by some to climb into the doubledigits, “it makes sense to look at Asia as a diversification strategy”, Ms Hsiao argued.

Turkey ends ban on three foreign banks in currency spat Citi, UBS and BNP Paribas were frozen out of lira transactions last week ADAM SAMSON, ANNA GROSS, LAURA PITEL AND AYLA JEAN YACKLEY

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urkey has reversed a decision to ban several overseas banks from its currenc y market just days after it was introduced, the latest step in an unpredictable relationship with foreign lenders and investors.

The country’s financial regulator lifted the freeze on Monday after it last week claimed Citigroup, UBS and BNP Paribas had failed to settle their lira liabilities on time. The Banking Regulation and Supervision Agency said the liabilities had now been repaid, but added that “investigations into foreign banks that were late in fulfilling their obligations will continue”.

The scuffle is the latest incident in what some traders and analysts see as a series of mis-steps that have damaged Turkey’s appeal, but which the government says are crucial to support the economy through the Covid-19 crisis amid a barrage of lira-selling by foreign investors.

“The Turkish government has become a lot more abrasive with foreign banks,” said an executive at a large New York-based financial institution that is active in Turkey’s markets. He said the country was “slowly burning a lot of bridges”.

Last week’s ban came after the three banks purchased foreign currency from local lenders but did not pay the lira at the other end of the transaction “in time”, Mehmet Ali Akben, head of Turkey’s financial regulator said in an interview on Sunday with the state-run Anadolu Agency. This www.businessday.ng

broke regulations announced last week to stop “manipulative initiatives that threaten the financial system”, he said.

This is not the first time Turkish authorities have taken unusual action against foreign banks during periods of currency weakness. The BRSA last year launched an investigation into JPMorgan after the Wall Street bank advised investors to short the lira during a similar time of tumult for the currency.

But one person familiar with the Turkish government’s discussions said the short ban simply reflected the fair application of local regulations. “All of the

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offshore banks should be aware that the rules have changed,” he said. “You may like it, you may dislike it. But these are the rules . . . Something had to be done.” BNP Paribas, UBS and Citi declined to comment.

An executive at a large foreign bank operating in Turkey, which was not involved in the regulatory action, said some foreign lenders were wrongfooted by abrupt regulatory changes in recent weeks that were part of a broader crackdown to make it more difficult for traders to make bets that the lira would fall.

Given the large volume of trade in various types of instruments, such as bonds or equities, all of which settle on different timeframes, it is common for foreign banks to either buy or sell lira from local counterparts to smooth out their accounts at the close of business.

One person familiar with this process described the sanctions by the Turkish government imposed on the trio of lenders as “entrapment”, since “it would be impossible for these banks not to require some lira funding on some days to settle trades”. He @Businessdayng

said the actions had made some market participants “extremely nervous”.

Ilan Solot, market strategist at Brown Brothers Harriman, called the censure of the three banks an act of “desperation” as authorities contended with a 16 per cent fall this year in the value of the lira against the US dollar.

These types of measures imposed on market participants would eventually increase the cost of doing business in Turkey, and reduce the incentives for investing in the country, said Per Hammarlund, an emerging markets strategist at SEB. Turkey has cut interest rates several times to help support the economy through the coronavirus crisis, and also used up large chunks of its foreign currency reserves to try and protect the lira. But many investors and analysts remain nervous about the currency’s prospects.

Goldman Sachs warned at the weekend that the lira could fall further, hitting TL8.25 to the US dollar by this time next year, from TL7.08 now, citing concerns over “policy credibility”, falling foreign currency reserves and the coronavirus crisis.

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Wednesday 13 May 2020

BUSINESS DAY

ANALYSIS FT Why the coming emerging markets debt crisis will be messy

Large investment funds could play hardball with developing countries that default COLBY SMITH AND ROBIN WIGGLESWORTH

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he Maldives’ coralencrusted islands have long been irresistible to tourists. But today its secluded luxury resorts are deserted, except those converted into makeshift quarantine facilities for stranded coronavirus patients.

The virus has shattered global tourism and devastated the Maldivian economy. The IMF has gone from projecting a 6 per cent expansion in gross domestic product this year to an 8 per cent contraction.

The risk is that this brutal, abrupt recession could translate into the Maldives becoming the latest country to sink into sovereign bankruptcy.

Zambia, Ecuador and Rwanda have all announced in recent weeks that they are struggling to repay their debts. Lebanon has already kicked off its restructuring process, while Argentina, which was battling its creditors even before the pandemic struck, appears to be heading for its ninth sovereign default since independence in 1816. Investors believe many other developing countries are not too far behind.

The Maldives is hardly the biggest country likely to succumb, but given its debt burden to creditors such as China and the severity of its recession, it is the “poster child of how easily the dominoes will fall”, warns Mitu Gulati, a sovereign debt expert at Duke University.

The IMF has already lent the country $29m to tide it over, but warned that the loss of tourism has “severely weakened” the economy and that additional financial support would be needed. The country’s $250m bond due in 2022 has tumbled to trade at just 81 cents on the dollar, indicating that investors are increasingly concerned about the Maldives’ capacity to make good on its obligations.

The kindling for another big emerging markets debt crisis has been accumulating for years. Investor demand for higher returns has allowed smaller, lesser-developed and more vulnerable “frontier” countries to tap bond markets at a record pace in the past decade.

Their debt burden has climbed from less than $1tn in 2005 to $3.2tn, according to the Institute of International Finance, equal to 114 per cent of GDP for frontier markets. Emerging markets as a whole owe a total of $71tn.

“The challenge is enormous,” says Ramin Toloui, a former head of emerging market debt at bond manager Pimco and assistant secretary for international finance at the US Treasury, who now teaches at Stanford University. “The with-

© Dolores Ochoa/AP | Ecuador. The country says it may have trouble repaying its debts

drawal of money [from EM funds] is greater and more sudden than in 2008, the economic shock is huge and the path to recovery more uncertain than it was after the last crisis.”

The G20 has agreed to temporarily freeze about $20bn worth of bilateral loan repayments for 76 poorer countries. It has urged private sector creditors to do the same, but few analysts believe that is feasible, and predict the result will probably instead be a series of ad hoc debt standstills and restructurings for swaths of the developing world.

Resolving the coming debt crises may be even tougher than in the past, however. Rather than the banks and governments — the primary creditors in the mammoth debt crisis that racked the developing world in the 1980s and 1990s — creditors are nowadays largely a multitude of bond funds. They are trickier to co-ordinate and corral into restructuring agreements.

Although the need for financial relief is stark in many cases, there are indications that some investment groups may break with the custom of reluctantly accepting financially painful compromises to achieve a restructuring, and instead fight for a better deal.

“Normally these guys would get out of Dodge City at the first sign of trouble in the debtor country.

They’re not set up to deal with prolonged debt restructurings and don’t like the reputational risk that would result from an aggressive campaign against a country in deep economic and social distress,” says Lee Buchheit, a prominent lawyer in the field. “But having watched some holdout creditors extract www.businessday.ng

rich payouts, even some of the traditional institutional investors appear to be reconsidering the virtues of passivity.”

Holdout strategy In the past, such aggression has been the preserve of what critics call “vulture funds” — investors who seek to profit from government debt crises through obstinacy and legal threats.

Their basic strategy is to act as a “holdout”. Sovereign debt restructurings amount to exchanging a country’s old bonds for new ones, often worth less, with a lower interest rate or longer repayment times. Holdouts refuse to join in, and instead threaten to sue for the full amount. As long as the number of holdouts is tiny, countries have often elected to simply pay them off rather than deal with the nuisance of a potentially lengthy courtroom battle.

For example, when Greece restructured most of its debts in 2012, it grudgingly chose to repay in full a smattering of overseas bonds where hedge funds had congregated. Others, like Argentina, have chosen to fight. The uncertainty of the outcome — and how hard it can be to compel a country to pay through legal means — long ensured a delicate but functional balance to the sovereign debt restructuring process.

However, in 2016 Elliott Management’s Jay Newman etched his name in the annals of big hedge fund hauls by extracting $2.4bn from Argentina for the firm after a decade-long legal battle. “[Holding out] long seemed like a cat-and-mouse game that was costly and uncertain, but now

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it has shifted to a more promising strategy,” says Christoph Trebesch, an academic at the Kiel Institute for the World Economy in Germany.

Although still daunting, Elliott’s success could inspire more copycats and complicate the looming spate of EM debt crises, some experts fear.

Moreover, there are signs that traditional investment groups are also toughening up, which could turn a difficult process into a more protracted nightmare for government lenders and borrowers alike.

One lawyer who has worked with creditors points out that many investment funds have piled into EM bonds in recent years, and the prospect of deep and broad losses could be ruinous to some heavily-exposed funds. “Before, the holdouts were the main problem, but now it could be the traditional funds,” he says. “If your back is against the wall, you’re going to fight.”

After the IMF’s failed attempt to set up a quasi-sovereign bankruptcy court in the early 2000s, the main response by governments has been to introduce “collective action clauses” into their bonds. These dictate that if a large majority of bondholders vote for a restructuring, typically 75 per cent, the agreement is imposed on all holders.

But investors have wised up, buying bigger chunks of specific bonds in an attempt to amass such a large position that they enjoy a de facto veto over the restructuring terms of the instruments. And some older bonds have no such clauses.

So far there are only a few examples of larger investment firms taking a tougher stance, but they are notable for how successful they @Businessdayng

have been. The first was Franklin Templeton, which managed to extract what some analysts say were surprisingly favourable terms in Ukraine’s 2015 debt restructuring, having snapped up enough bonds to become the country’s largest private creditor.

More recently, Ashmore has built up a huge stake in Lebanon’s debt that in practice gives it a veto over how the country will restructure some of its bonds. And this year, Fidelity successfully played hardball with Buenos Aires, calling the Argentine province’s bluff that it was unable to make a $250m payment due in January. Buenos Aires ended up paying in full.

Fidelity is also part of a larger creditor group that has pushed back on Argentina’s plans to restructure its $65bn foreign debt burden. The group includes some of the world’s largest institutional investors, including BlackRock and T Rowe Price, and together with the two other main bondholder groups, wields enough power to make or break any deal.

Franklin Templeton and Ashmore declined to comment. Fidelity declined to comment on its Argentine bust-up, but said in a statement that its policies on sovereign restructurings had not changed.

“When it becomes necessary to negotiate with those who have borrowed our investors’ money, we do so in good faith and in a reasonable, professional manner,” the investment group said. “The interests we represent are those of the millions of individuals, and thousands of financial advisers and institutions who have entrusted their money to us to invest on their behalf.”

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Wednesday13 May 2020

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Tuesday13 May 2020

Top Gainers/Losers as at Tuesday 13 May 2020 LOSERS

GAINERS

ASI (Points)

Company

Opening

Closing

Change

Company

Opening

Closing

Change

CILEASING

N4.8

N5.1

0.3

DANGCEM

N150

N143.5

-6.5

DEALS (Numbers)

ETERNA

N2.33

N2.55

0.22

MTNN

N112

N111.6

-0.4

NPFMCRFBK

N1.23

N1.35

0.12

BUACEMENT

N31.9

N31.6

-0.3

VOLUME (Numbers)

MAYBAKER

N2.58

N2.68

0.1

N2.7

N2.43

-0.27

NEIMETH

N0.6

N0.66

0.06

N2.57

N2.32

-0.25

CAVERTON ARBICO

23,695.90 4,005.00 155,746,430.00

VALUE (N billion) MARKET CAP (N Trn)

1.675 12.349

Market loses N133bn as stock investors take profit in Dangote Cement, MTNN, BUA Cement Stories by Iheanyi Nwachukwu

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n line with the recent profit taking mood on the Nigerian Bourse, more equity investors on Tuesday May 12 reduced their stake in value counters like Dangote Cement Plc, MTNN Plc, and BUA Cement Plc. Nigeria’s stock market had opened this week on a negative note as investors continued to exchanged equities with the intention to take profit on recent gains.

Recall that the stock market had gained approximately N530billion in the trading week ended May 8.

Investors booked N133billion loss on Tuesday as supply for equities in the remote trading session failed to get corresponding demand.

Dangote Cement stocks decreased from N150 to N143.5, down by N6.5 or 4.33 percent. MTNN dipped from N112 to N111.6, losing 40kobo or 0.36percent. BUA Cement decreased from N31.9 to N31.6, shedding 30kobo or 0.94percent.

Market watchers say that with the declining activity level coupled with the negative market breadth posted on Tuesday, there is the possibility of a continued bearish pattern on Wednesday.

Though, recoveries in any of the heavyweight decliners on Tuesday may support a positive close on Wednesday.

Stock market disappoints as investors chose not to price-in

recent positive outlook in crude oil market after Saudi Arabia said it would unilaterally cut production by an extra million barrels a day in June. Though, Brent crude price still lowered to $29.97 as at 4:20 pm Nigerian time.

The market’s negative return year to date stood higher at -11.72 percent. This week, the market is down by -1.45 percent.

The Nigerian Stock Exchange All Share Index (ASI) decreased at the close of trading session on Tuesday May 12. It moved down by -1.06 percent to 23,695.90 points from 23,950.83 points the preceding day.

The value of listed stocks decreased to N12.349trillion from preceding day high of N12.482trillion. In 4,005 deals, investors exchanged 155,746,430 units valued at N1.675billion.

Covid-19: Nigeria’s SEC reiterates full Afrinvest Asset Management eyes disclosure by capital market operators $2m from Dollar Fund offer

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he Securities and Exchange Commission (SEC) has reminded regulated entities in the capital market to continue to make adequate disclosures on the impact of Covid-19 on their businesses This was contained in a circular issued on Monday May 11 by the Commission as it provided update to stakeholders within the capital market.

SEC said in the circular, “W hile w e continue to monitor the evolvement of the pandemic and its impact o n t h e cap i t a l ma rke t, all regulated entities are reminded to make adequate disclosures and report on how the pandemic is impacting operations and discharge of services to investors and other stakeholders.

“We also wish to assure investors that while efforts are on-going to ensure that capital market services remain accessible, the Commission’s priority is the protection of investors. Kindly contact us through sec@sec.gov.ng for complaints and enquiries.

The SE C als o state d that following the Federal Government’s partial easing of the lockdown measures introduced to minimize the spread of Covid-19 across Nigeria, the Securities and Exchange Commission, SEC has reopened its head office in Abuja. According to the circular, the Commission, in compliance with the various guidelines issued by relevant authorities, said its office is open to members of the public between 10 a.m. and 1p.m. on Mondays, Wednesdays and Fridays. www.businessday.ng

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frinvest Asset Management Limited - a subsidiar y of Afrinvest (West Africa) Limited - has launched the Afrinvest Dollar Fund; a flexible solution for investors looking to add Dollar-denominated securities to their portfolio.

The initial minimum investment amount is $1,000.

The $2million Fund is offering 20,000 units at $100 per unit. Afrinvest Dollar Fund is denominated in Dollars, meaning that all investors who wish to invest in the Fund will have to convert their funds to Dollars.

The objective of the Fund is to achieve income generation and capital appreciation in the short to medium term for investors. The Fund is designed to deliver significantly higher returns than what is obtainable from the average domiciliary account in the local banks.

There is free entry and exit for investors subject to the prevailing Fund price.

The benefits of investing in the fund according to the fund managers include: capital appreciation, competitive returns, diversified portfolio; and regular/steady income stream.

Individuals with future Dollar obligations like school fees, vacation, mortgage, birth tourism etc can take advantage of Afrinvest Dollar Fund. The fund managers projected 6 p e rc e n t t o 7 . 5 p e rc e n t return per annum from this investment.

The Afrinvest Dollar Fund is an open-ended mutual fund approved by the Securities and Exchange Commission (SEC) and it provides an opportunity for individual and institutional investors to diversify their portfolio and hedge against currency fluctuations.

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Global market indicators FTSE 100 Index 5,994.77GBP +55.04+0.93%

Nikkei 225 20,366.48JPY -24.18-0.12%

S&P 500 Index 2,928.43USD -1.89-0.06%

Deutsche Boerse AG German Stock Index DAX 10,819.50EUR -5.49-0.05%

Generic 1st ‘DM’ Future 24,167.00USD +43.00+0.18%

Shanghai Stock Exchange Composite Index 2,891.56CNY -3.25-0.11%

NOVA Merchant Bank holds 3rd AGM virtually

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ova Merchant Bank on Thursday, May 7, 2020 embraced digital technology as the financial institution held its third Annual General Meeting (AGM) virtually at its head office in Victoria Island, Lagos. The meeting was held virtually in strict adherence with stipulations by the Federal and state government in a bid to limit the spread of the Coronavirus pandemic currently ravaging the world.

The meeting which was led by the Chairman, NOVA Merchant Bank, Phillips Oduoza, had in attendance the Managing Director, Anya Duroha, Company Secretary, Nnadozie Ohaji, Board of Directors, Shareholders, as well as representatives from key financial regulatory organisations including the Central Bank of Nigeria and the Nigerian Deposit Insurance Corporation.

Shareholders at the meeting lauded the innovative concept of the virtual meeting, which according to them, showed that the bank is ahead in keeping up with the times, while ensuring continuous safety of both staff and shareholders.

They also commended its impressive performance and urged the bank to continue the growth trajectory notwithstanding the current macroeconomic headwinds occasioned by the coronavirus and drop in oil price.

While presenting the bank’s financial performance for the year ended December 31, 2019, Oduoza noted that the bank reported a significant improvement in all the key financial indices compared to 2018 achievements.

He attributed this growth to the successful execution of the 2019 strategic plan in line with the key strategic pillars to position the bank as a market leader by 2025.

“While we acknowledge the present macro-economic landscape and its concerns, and even though we see that the situation remains very fluid, It is our firm belief that the COVID-19 crisis will also result in several opportunities for the Bank, as industry dynamics evolve,” Oduoza said.

He assured the shareholders that the Bank will continue

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to focus on digital banking, provision of long-term funding, wholesale and investment banking while maintaining a lean operating philosophy.

Also speaking, the Managing Director/Chief Executive Officer, Anya Duroha said, 2019 was the year in which the Bank’s business made major leaps due to the resilience and commitment of our employees.

He said, “I am pleased to inform you that your investments in the Bank have continued to record double digit growth along all major parameters. This clearly demonstrates the level of confidence in the Bank and our offerings especially given the competitive nature of the

Phillips Oduoza, chairman, NOVA Merchant Bank

banking industry and our relative newness in the market.

“We were able to deliver these impressive results as we remained focused on our mission of creating superior value in the markets we serve and keeping our customers at the center of our business.

I believe this performance is sustainable by maintaining our relentless focus on providing a superior customer experience,” Duroha stated.

According to the MD, some of these key achievements include growth in deposits by 523percent, growth in loan book by 1106percent, increase in total assets by 155percent and rise in profit after tax by 43percent over the 2018 performance, adding that the customer base scaled up by 72percent while the cost to income ratio dropped by 8percent over 2018.

At t h e m e e t i n g , t h e shareholders also approved the reappointment of two retiring directors and urged the board to continue to steer the bank in the right direction.

Wednesday 13 May, 2020

BUSINESS DAY

37

tax issues Covid-19: FIRS waives interest, penalty on outstanding tax liabilities ...KPMG sees need for extension of eligibility deadline Iheanyi Nwachukwu

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he Federal Inland Revenue Service (FIRS) has issued a public notice disclosing its decision to waive interest and penalties on outstanding tax debts arising from desk reviews, tax audits and investigations.

“We commend the FIRS for its commitment to alleviating the impact of the Covid-19 pandemic on businesses. The waiver of interest and penalties on outstanding tax liabilities is a welcome development in light of the negative impact of Covid-19 pandemic on taxpayers”,

said tax experts at KPMG in their recent note.

To be eligible for the relief, FIRS

said the affected taxpayers must settle their outstanding tax debts in full by May 31, 2020.

KPMG noted that the deadline of May 31, 2020 to make full payment of outstanding tax debts may be challenging “as most businesses are currently experiencing loss of revenue and cashflow constraints”.

“Therefore, some taxpayers who genuinely want to take advantage of the relief may not have the financial resources to make full payment before the May 31, 2020 deadline.

The FIRS should, therefore, consider extending the deadline to allow such taxpayers to pay their principal tax liabilities in instalments as their cashflow permits within the shortest time possible,” the tax experts at KPMG noted.

The decision by FIRS follows

its earlier palliative measures and those of other agencies of the Federal Government to mitigate the impact of the Coronavirus (Covid-19) pandemic on taxpayers.

“The relief does not cover disputed tax audit liabilities in respect of which affected taxpayers have ascertained their undisputed tax positions.

“The FIRS should address this category of taxpayers who may want to take advantage of the relief and remit their undisputed tax liabilities pending resolution of their disputes with the FIRS. This would increase FIRS’ collection and relieve the affected taxpayers’ cashflow of the associated cost of penalty and interest”, KPMG stated further.

E&Y Insight:

Beyond COVID-19: Why agile tax operations are critical to recovery Kate Barton

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orporate tax and finance functions need to accelerate transformation of their operations if they are to support Covid-19 crisismanagement efforts and their organisation’s future recovery.

Unfortunately, recent EY research finds while some tax functions are well-positioned, many are struggling to put in place the right people and technology models to monitor, evaluate, and respond to fast-changing global conditions.

That readiness is critical now, with tax systems the focus of many of the comprehensive economicrelief packages introduced by more than 115 countries and jurisdictions since the World Health Organization declared COVID-19 a pandemic on March 11.

Provisions range from shifting filing and payment deadlines for income and indirect taxes as well as regulatory filings to an abundance of broad and targeted tax relief measures, all designed to offer a lifeline to get companies and individuals through an unprecedented crisis. Yet they can only be useful if businesses have a clear line of sight across their operations to best claim help and make use of it.

Our recent Tax and Finance Operate (TFO) survey was conducted before the pandemic, spanning more than 1,000 tax and finance executives from 42 jurisdictions representing 17 industries .

Almost all respondents indicated that they were transforming the operating models of their tax

and finance functions, reflecting a need to: ensure they have the right talent and technology capabilities available to monitor, evaluate and respond to major legislative change around the world, a need that has taken on new urgency in 2020; be prepared for the evolving talent demands requiring tax professionals to augment deep technical knowledge of laws and regulations with data, process and technology skills; future-proof their tax technology to keep pace with evolving digital tax filing requirements.

Respondents also indicated they want tax and finance professionals to spend less time on routine compliance and more time advising the business on broader strategies, while also reducing overall costs of the function. This sort of agility will be even more important during the post-pandemic recovery.

Many businesses were already falling short of these objectives before COVID-19. Some 39percent of respondents were having trouble attracting and retaining people with the necessary skills to be effective

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in the modern tax and finance function. And 65percent said their biggest barrier to achieving their tax function’s purpose and vision was they lacked a sustainable plan for data and technology.

While some organisations have the ability to both attract and hire the right talent and develop the best tools in-house, most can’t keep up given the rapid pace of legislative and regulatory change and technology advancements. It’s not surprising that 73percent said they were more-likely-than-not to cosource tax services in the next two years and rely on vendors who stay current by investing in both people and technology.

The speed with which stimulus measures were passed in response to COVID-19 is an acute reminder of just how quickly the tax legislative landscape can change. And because much of the emergency stimulus legislation is relying on deficit spending and tax expenditures, it’s likely that tax legislation, in particular, will continue to remain fluid as countries reckon with their fiscal balance sheets.

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In addition, the pressure to stay current with tax technology is unrelenting – and expensive – at a time when many companies are coming under cost pressure as part of their own financial recoveries from economic shock from the pandemic.

As businesses stabilise amid the immediate crisis, tax and finance functions will be called upon to play an even stronger role in helping companies determine next steps and what happens beyond the COVID-19 pandemic. Transforming the operating model to include some co-sourcing may help reduce overall costs, control unpredictable information technology expenses, and redirect internal resources to more strategic activities. It also enables organizations to leverage the vendor’s considerable and ongoing investments in the necessary talent, technology and data strategies to keep pace with an ever-changing world.

Every global business should now take four critical steps to get on a resilient path.

First, they should scrutinize their current tax and finance operating model. Now is the time to examine the organization’s priorities around cost controls, value creation and risk management to understand how the tax and finance function contributes to the overall business strategy. Once these priorities are clear, it is easier to identify gaps in people, processes and technology and decide how sustainable the current model is for the future.

Second, they should determine what capabilities to build. Keeping tax and finance activities in-house generally requires some degree of internal transformation to optimize @Businessdayng

existing people, overall tax processes, and technology. Some organizations may decide to keep activities they consider higher-value and best-in-class – for example, planning or managing tax controversy.

But they need to be sure they can perform them with effectiveness and control. Other more routine tasks may be better done using a multi-tenanted, state-of-the art technology platform owned by a capable service provider.

Third, they should determine what to co-source. Some organizations may decide it’s better to cosource some activities, especially those that are more routine such as completion of tax returns, regulatory filings and data collection.

It may be that co-sourcing these tasks can be performed at lower costs through centralisation or use of third parties.

Finally, find the right mix. Many companies will decide a hybrid approach is right for them, where they decide to continue to own some tax and finance functions they consider to be critical, while co-sourcing others. The right hybrid approach can improve both effectiveness and efficiency while empowering their people to focus on being a valueadded partner to the business by focusing on activities that improve the bottom line.

Summary Corporate tax and finance functions need to accelerate transformation of their operations if they are to support COVID-19 crisismanagement efforts and their organisation’s future recovery. ...Barton is EY Global Vice Chair – Tax

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Wednesday 13 May 2020

BUSINESS DAY

FINANCIAL INCLUSION

& INNOVATION

Mastercard to onboard 1bn people, 50m businesses into digital economy by 2025 Stories by Endurance Okafor

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astercard, a multinational financial services provider has pledged to expand its global commitment to financial inclusion by assuring to bring a total of 1 billion people and 50 million micro and small businesses into the digital economy by 2025.

Driven by the Covid-19 crisis, the New York-based company said the strategy will include a direct focus on providing 25 million women entrepreneurs with solutions that can help them grow their businesses.

“If we’re going to recover in any sort of long-term, sustainable way, we have to make sure that everyone is included. Getting people to access to the digital economy is a critical part of that,” Ajay Banga, chief executive officer at Mastercard said.

According to Mastercard, its new financial inclusion target is an opportunity to develop commercially-sustainable and scalable social impact with government and private sector partners.

The new commitment is an extension of Mastercard’s pledge in 2015 to bring 500

million excluded people into the financial system.

To attain the MasterCard’s one billion goal, Finextra cited a broad push across a range of fronts, like ongoing work on government disbursements, wage digitization of private sector workers, partnerships with mobile network operators, solutions for gig workers, scaling efforts with fintechs, digital platforms and digital wallets/apps and tech that addresses needs of the financially vulnerable.

“Achieving greater financial inclusion for individuals and small businesses into the digital economy requires collaboration and unique partnerships across sectors and geographies. As companies like Mastercard extend their financial inclusion commitment, society must adapt to meet the evolving needs of everyone in the global marketplace,” Klaus Schwab, founder and executive chairman, World Economic Forum was quoted to have said.

World Bank’s Global Findex Database of 2017 puts the global unbanked population at 1.7 billion adults, and Nigeria accounts for 36.6 million of that number.

The 2018 report by EFInA shows that more than 36.8 percent of Nigeria’s adult population are without a bank account.

The lack of access to formal financial services among Nigeria’s Small and Medium Enterprises (SMEs) has been a threat to their growth as poor credit history

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scale enterprises, private and public institutions,” Ezinne Obikile, Executive Director, Infrastructure and Payment Gateway, SystemSpecs, providers of Remita said.

The marriage between Sy s t e m Sp e c s’ p o p u l a r brand, Remita, robust financial technology and Cellulant’s extensive agency network would provide a larger number of Nigerians with easier access to make payments to Federal and State Ministries, Departments and Agencies, Corporate Organisations and other billers such as hospitals, e ducational institutions, electricity companies, water service providers and others on Remita’s large merchants’ base.

According to the Nige-

ria-based Africa-focused financial technology company, the collaboration would also enable Cellulant’s customers to make interbank electronic funds transfer from Cellulant’s web channel, mobile application and at agent locations.

In addition, Cellulant agents nationwide would be able to process payments to all Remita billers and make interbank transfers from their current web and mobile applications.

Meanwhile, SystemSPecs had announced in April that it collaborated with Paga, one of the foremost mobile money service providers to extend the frontiers of electronic payments in Nigeria.

The recent par tnerships by SystemSpecs are

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deposit of MSMEs. “Three countries - Brazil, China and Nigeria; contribute 67 percent to the total number of MSMEs, which is equivalent to 109 million enterprises. There are close to 12 million SMEs in China alone, which represents 56 percent of all SMEs in developing countries,” World Bank noted.

World Bank’s claim on the use of alternative data in assessing the creditworthiness of MSMEs can be affirmed by the 2016 report

by Global Partnership for Financial Inclusion (GPFI) as it said in its G20 publication that it encourages service providers to use multiple sources of digital data for evaluating consumer and small and medium enterprise (SME) creditworthiness.

“This approach should include appropriate safeguards while facilitating the development of such data and ensuring a fair, nondiscriminatory approach to its use. Examples of such alternative data sources include mobile phone use, utility payments, data enterprise registration information, and other information that can complement traditional loan repayment or insurance-related data,” G20 report explained.

First Bank records 9.5m customers on its USSD banking service

SystemSpecs collaborates with Cellulant to boost payment service technology ystemSpecs, developers of Remita has announced its partnership with Cellulant, a pan-African fintech and agritech leader, to provide easy-to-use, secure and convenient payment service options for individuals and businesses in ever y part of Nigeria.

The collaboration would boost the ability of the unbanked and underbanked population across the country to access financial services.

“We remain committed to driving innovation in the financial ecosystem through collaboration with other ecosystem players to provide seamless and secure technology to power the finances of individuals, small and medium-

hinders their chances of accessing loans for expansion.

Estimated at 37 million, Nigerian SMEs are said to have a finance gap of $158.13 billion, according to the 2017 SMEs report by the World Bank and Finance Forum.

According to the World Bank, SMEs play a huge role in facilitating economic development due to their flexibility and affinity to innovation. “Even more so in emerging economies with a high contribution from the informal sector.”

The recent report by the Washington-based financial institution title: MSME FINANCE GAP- Assessment of the Shortfalls and Opportunities in Financing Micro, Small and Medium Enterprises in Emerging Markets recommended the use of alternative data in assessed the creditworthiness of SMEs. “Access to credit for MSMEs and individuals can be enhanced and expanded by promoting the use of alternative data in credit reporting,” World Bank said.

Of the total 162 million formal MSMEs in developing countries, 141 million are microenterprises, and 21 million are SMEs, and Nigeria is quoted by the world lender as one of the countries with the highest

coming as social distance, stay at home and virtual engagement is the order of the day amid Covid-19 pandemic.

According to the announcement by the Fintech Company, the collaborations would enable customers of other service providers to easily initiate and complete payment to all Remita billers and merchants right from their web channel.

“SystemSpecs is committed to driving financial inclusion and providing payment convenience to all, which underscores these strategic partnerships to extend a wide range of financial solutions and services to customers everywhere, even at a time as this,” Obikile was quoted to have said.

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F

irst Bank, one of the oldest lenders in Nigeria has announced that it’s Unstructured Supplementary Service Data (USSD) has hit over 9.5 million customers.

According to the commercial bank, the new achievement is in a clear demonstration of its acknowledged leadership in electronic banking.

Describing the e-banking service which does not require the use of the internet, First Bank said its USSD platform is an easy to use, convenient, fast, user-friendly mobile banking channel through which various banking activities are carried out on a mobile phone – across the four major GSM network operators in the country.

Customers who are using the e-banking service that was launched in January 2015 are able to enjoy a wide range of financial services using the *894# code. These services include; Data and Airtime top-up for self and third-party individ@Businessdayng

uals, Quick Balance Enquiry, Fund Transfers, BVN Enquiry, BVN Linkage, Mini-statement, Account Number Enquiry, Account Opening, Merchant Payment and FirstAdvance loan service. The FirstAdvance loan service enables salary earners to take a loan up to 50% of their monthly salary.

“At FirstBank, we are excited about the impact our innovative solutions are making in the Nigerian payment landscape. Our *894# USSD banking has been a viable platform through which we take our banking services to the doorstep of our customers, right on the palm of their hands, without the limitation of an internet connection,” Chuma Ezirim, FirstBank’s Group Executive, e-Business & Retail Products said adding that the bank remains committed to creating various avenues to enable Nigerians carry-out various financial activities conveniently, safely and securely anytime, anywhere in Nigeria.

Wednesday 13 May 2020

BUSINESS DAY

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39

Company IN FOCUS

BUSINESS DAY Wednesday 13 May 2020 www.businessday.ng

FirstBank cardholders record N1.18trn in transactions value during lockdown

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ince its establishment in 1894, FirstBank has consistently built relationships with her customers, focusing on the fundamentals of good corporate governance, strong liquidity, optimised risk management and effective leadership.

These, amongst others, are the reasons the Bank has dominated the financial market for over 126 years.

The Bank has led the financing of private investment in infrastructural development in the Nigerian economy by playing key roles in the Federal Government’s privatisation and commercialization schemes, and entrenchment of the cashless policy which gave rise to electronic cards being a veritable entity in the day to day transactions among the bank’s customers.

Consequently, the use of its wide range of cards, developed with the ‘man on the move’ in mind, come with far reaching benefits and rewards, connecting the remotest of places even as the world is plagued by the novel Corona virus disease today.

The world as we know it today, is a global village, and its connectivity is at the tip of an individual’s finger. That aside, it also revolves around the use of ‘ordinary’ but highly customised cards and FirstBank is a confirmed Leader in this space. There’s no gainsaying the fact that for 126 years and counting, FirstBank, Nigeria’s premier bank, with accolades and awards trailing its existence, has continued to blaze the trail in certainly every financial innovation. And as the name signifies, has continued to be the first in virtually everything banking and finance. Little wonder that in December 2015 and May 2016, FirstBank was named the first financial institution in the country to achieve sustained alternative channels transaction volumes of 100 million transactions. Subsequently in 2017, the Bank also attained the Milestone of 10million card base, a feat that is first of its kind in West Africa and Second in Africa.

There is hardly any banking innovation, which is not traced to the company that has overtime woven itself into the very fabric of the society. Commenting on FirstBank’s strides, the Chief Executive Officer, Dr. Adesola Adeduntan, disclosed that the bank’s 53, 000 agents across the country processed about N512 billion worth of transactions with differing values while the lockdown lasted. He noted that the bank was “able to actively support her customers, their families and businesses through these challenging times.” This is nothing short of the FirstBank advantage.

Adesola Adeduntan, CEO, FirstBank.

Adeduntan reiterated the faith Nigerians have in the use of FirstBank cards, saying that during the period of the lockdown, Nigerians with FirstBank cards used them 105 million times to make payments or withdrawals worth about N1.18 Trillion as they relied on the Bank to settle their banking needs. In addition, the Bank’s CEO noted that approximately 12.6 million withdrawals to the tune of N156 billion were carried out across FirstBank’s ATMs nationwide.

“Our customers made transfers over 106 million times with a total value of about N8.18 Trillion across our digital channels. We have also recorded over 275,000 new sign-ups to alternative channels covering our Firstmobile, USSD and First-Online platforms,” the CEO informed.

While calling on lovers of stress-free banking to get on board, the FirstBank CEO further assured existing customers of the bank’s relentless efforts to ensure that banking transactions continue seamlessly, adding that COVID-19 will not slow down her activities and efforts at staying true to her brand promise to her customers.

FirstBank cards come in a wide range of categories, each fulfilling tasks that are better imagined, but nevertheless are

flexible and offer comfort, stressfree banking and wholesome peace of mind. It is therefore not a coincidence, that FirstBank is and remains Nigeria’s highest card transacting bank; a product of carefully thought out process, hard work and the quest to keep its customers first in all things.

This is especially important at a time when movement and business activities were largely hampered by the lockdown, with the maintenance of social distance and the potential increase in the use of the Bank’s alternative channels - which is facilitated by its cards – for various transactions and business activities, thus staying safe to win the fight against the COVID-19 pandemic.

The range of cards available to customers of FirstBank are categorised into three broad groups, viz; DEBIT, CREDIT and PREPAID Cards. The grouping covers outstanding cards offerings such as Naira MasterCard, Verve Card and the pioneering Visa Multi-Currency Card. Others are Expressions MasterCard, Platinum MasterCard, Visa Infinite Credit Card, Visa Gold Credit Card, Naira Credit Cards (Visa Classic and Platinum), Visa Prepaid Card and Verve Prepaid Card.

FirstBank’s Naira MasterCard

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FirstBank cards come in a wide range of categories, each fulfilling tasks that are better imagined, but nevertheless are flexible and offer comfort, stressfree banking and wholesome peace of mind

& Verve Card are Secured by Chip & PIN technology with local POS/Web limit increase available upon request. The Naira denominated MasterCard comes with various benefits such as online purchases, bills payments and cash withdrawals at ATMs world-wide. The various transaction limit(s) on Naira MasterCard issued by the Bank are N150,000 for ATM transactions, N2,500,000 for POS and N1,000,000 for Web transactions.

The FirstBank Verve Debit Card works with Chip and PIN technology to secure transactions. It allows the cardholder to conveniently pay for goods and services and is accepted by all ATMs, POS, Web, Mobile, Kiosk, and Bank Branch connected to the Interswitch network in Nigeria. It is available to all account holders and enables daily transaction limits of N150,000, and N500,000 on ATM and POS channels respectively. Customers can transact up to N1 million on the Web in a single transaction.

FirstBank cards also offer the Card Protection Transactions feature, which allows the cardholder to activate or deactivate it for all types of transactions, channels and locations, through the Card-in-Control Service on the Firstmobile app. The steps are few and simple: On the Firstmobile app, go to Self Service > Card Services and choose card type (Debit, Credit, or Prepaid) to be activated or deactivated.

Another card innovation service by FirstBank is the Visa Gold Card, which offers higher daily spending capacity and limit on ATM, POS and Web. With the Visa Gold Card, the customer is assured of $1,000 daily ATM withdrawal, $10,000 POS transaction and $5,000 on the Web at any location around the world.

It is a dollar denominated international Premium Credit Card issued in partnership with Visa International.

Moreso, it guarantees access to international emergency services such as Emergency Card Replacement & Emergency Cash Advance in situations where the card gets lost or damaged. The Visa Gold card comes handy when making airline bookings with its smooth seamless purchase options.

Yet another, among the FirstBank’s super cards, is VISA Debit Multi-Currency Card. It is by all intent and purpose, the first of its kind to be offered by any financial institution in Nigeria.

It is an enhancement to the existing Visa Debit Dual Currency card and can be linked to any or all NAIRA, USD, EURO and GBP accounts. It is an international card with Chip and PIN technology which can be used to make payment anywhere in the world and across all channels – ATMs,

POS & Web. With the Visa Debit Multi-Currency card, cardholders can make daily withdrawals to the tune of N150,000 (local) and $1,000 (international) from the ATM. However, on the Web, a total of N1,000,000 is permitted locally while $6,250 is allowed on the international corridor daily. POS transaction limit is N2,500,000 (local) and $2,500 (international).

The Platinum Debit MasterCard is a premium Debit Card denominated in Naira. It is linked directly to a customer’s Naira denominated Current and/or Savings account. It offers a convenient alternative to the use of cash, and cheques by giving direct access to funds in cardholders’ accounts across all channels like ATM, POS, and WEB etc.

Like other card types, its transactions are easily monitored via the FirstBank FirstMobile App or FirstBank Internet Banking service and offers 24-hour access support for all card-related complaints through First Contact. It is a card linked to a Naira denominated account, and it is valid for three years.

It is designed to suit the lifestyle of senior and management executives of multinational companies and leaders across various industries and sector of the global economy. Its daily limits include; ATM: N300,000; POS: N3million; Web: N2,000,000 as well as Cross-border TXN limit: $500 monthly.

For a brand that has consistently remained on top of its game, FirstBank Cards have received global recognition, as well as multiple honour for its reliable and trusted services.

Speaking further, Adeduntan highlighted that the contactless capability of the bank’s Visa and MasterCards support less human-to-human contact in executing transactions, in the same way that the Debit Cards have remained the base channel for self-onboarding to any digital channel such as USSD, Firstmobile, FirstOnline etc. It is therefore, imperative that customers get a Debit Card because of its peculiar nature to get enrolled on FirstBank’s digital channel for the best of services.

FirstBank’s benevolence did not end with making cards available to customers, but has initiated value added services attached to the cards including ‘discount at Merchants location such as Jumia Friday, Health Plus, among others. These are, without an iota of doubt, exclusive to FirstBank cardholders. This is why you must get your card(s) if you are yet to. Email us at firstcontact@ firstbanknigeria.com, or call your Relationship Manager/Private Banker for whatever card options you require.

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