BusinessDay 14 Apr 2020 by BusinessDay

Buhari extends lockdown in Lagos, Abuja, Ogun by 14 days …directs development of comprehensive policy to help economy adapt to COVID-19 reality Innocent Odoh, Harrison Edeh & James Kwen, Abuja

resident Muhammadu Buhari has extended the lockdown in Lagos, Ogun and the Federal

Capital Territory by another 14 days effective 11: 59pm Monday, directing ministers to develop a comprehensive policy for Nige-

on Monday, Buhari said, “Having carefully considered the briefings and report from the Presidential Task Force and the various options offered, it has become necessary to extend the

current restriction of movement in Lagos and Ogun States as well as the FCT for another 14 days effective from 11:59 pm on MonContinues on page 29

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Private sector says willing to help bridge Nigeria’s COVID-19 testing gap … as community transmission grows ANTHONIA OBOKOH & MICHAEL ANI

he Nigerian government is racing against time to meet the increasing demand for testing as the coronavirus pandemic spreads to local communities, but private sector players say they are willing and capable to assist in bridging the testing gap arising from the country’s underfunded health sector. “Many of us in the private sector health space have laboratories with polymerase chain reaction (PCR) equipment and we are willing to invest to conduct more tests because unless we test more, we might not know the real picture of the situation,” one private sector health player said. Africa’s biggest economy was the first country in sub-Saharan Africa to record a case of the pandemic in late February. Since then, some 288 persons have tested positive for the virus as at 6:00pm on Friday, 51 have been discharged and seven deaths recorded, according to data from the Nigerian Centre for Disease Control (NCDC). But Nigeria’s low number of infections is not because the government has particularly been effective with preventing Continues on page 29

Inside Rising insecurity, violent crimes in Lagos as lockdown takes toll P. 2

L-R: Uduak Yemi-Eweka, human resource manager; Jonathan Aminu, general manager, corporate affairs, both of Crown Flour Mills Limited; Kayode Alabi, deputy governor, Kwara State/state chairman, technical committee on Covid-19, and Somnath Mandal, plant manager, Crown Flour Mills, at the presentation of a trailer load of pasta to the Kwara State government as part of Olam’s contribution towards cushioning the effects of the Covid-19 pandemic, at the Government House, Ilorin.

Millions of SMEs pushed to the brink amid lockdown ODINAKA ANUDU & JOSEPHINE OKOJIE

oshua Adekunle happily survived on packets of sweets before the coronavirus-induced lockdown. His entire life was anchored on the daily sales he made under Obalende Bridge in Lagos. All his wares were worth N5,500 and he made daily sales of N500 to N1,000. As little as these were, they took care of him. But since the announcement of total lockdown in Lagos two weeks ago by President Muhammadu Buhari, Adekunle’s life has

As FG offers little hope

seemed hopeless. He has sold all his wares at an auction and spent the money on food. “My biggest concern now is to eat some food,” Adekunle, who sleeps in a dingily-lit one room at Ajah with four other micro business owners, said. “I don’t know what to do after the lockdown because there will be no money to start life again,” he said. A large chunk of Nigeria’s 41.5 million Micro, Small and Medi-

um Enterprises (MSMEs) could go under due to the coronavirusinduced lockdown aimed at halting the spread of the deadly virus. The measure to control the virus is in line with global best practices, but it will lead to shocks, shutdowns and unprecedented job losses in Nigeria as the Federal Government continues to drag on plans to provide palliatives to help the businesses, analysts say.

Millions of workers will not return to their jobs after the pandemic, with unemployment peaking at 23 percent before the pandemic. The World Bank said in a 2015 report that 40-50 million additional jobs were needed between then and 2030 to reduce poverty and boost inclusive growth. MSMEs contribute 50 percent to Nigeria’s GDP and account for 86.3 percent of Continues on page 29

Tuesday 14 April 2020

BUSINESS DAY

news LCCI outlines ways to ensure post COVID-19 economic stability … as NECA begins free training of young entrepreneurs JOSHUA BASSEY

he Lagos Chamber of Commerce and Industry (LCCI) has advocated tax breaks and concessions for investors by suspending all forms of taxes for health sector investors, agriculture and agro-processing, aviation and hospitality sectors for at least one year to hasten economic rebound in the aftermath of the current COVID-19 lockdown. Also, the Nigeria Employers’ Consultative Association (NECA) says it is commencing a free online training of young entrepreneurs who would add to building the struggling economy. Muda Yusuf, director-general of LCCI, said the government would also need to extend filing of annual returns, including payment of due amounts, to June 30, 2020. Hepushedforunconditional waiver of penalties and interests of all outstanding tax payments and temporary suspension of recently introduced 50 percent increase in Value Added Tax (VAT) till the end of 2020. Yusuf further called for a 50 percent reduction in all taxes currently being paid by companies in manufacturing for

one year, and the suspension of PAYE for all employees for a period of six months. This, he explained, would put some money back in the hands of the employees during this period to strengthen the purchasing power of citizens and stimulate output within the economy. “The COVID-19 pandemic has raised serious concerns about economic sustainability and business continuity, both of which are interdependent and mutually reinforcing. It has become imperative to commence conversations about policy measures and reforms that need to happen for the realisation of desired continuity outcomes,” Yusuf said. He said it is thus important to begin to set agenda for the Nigerian economy after the pandemic, what he called a post-pandemic rescue plan. “This is done through the injection of liquidity [depending on the fiscal space] or through policy measures that offer some accommodation that facilitates economic and business recovery,” Yusuf said. “To save the economy from collapse, we need to salvage investments across all levels – micro, small, medium and large enterprises,” he said.

Rising insecurity, violent crimes in Lagos as lockdown takes toll ISAAC ANYAOGU, TEMITAYO AYETOTO & DESMOND OKON

esidents are now barricading streets and organising community vigilante groups in response to rising spate of criminality in some parts of Lagos as security agencies appear in denial at best and helpless at worst. In areas like Iyana Ipaja, Abule Egba, Command and Miran, robbers are raiding houses and looting shops as the lockdown ordered by President Muhammadu Buhari has shut economic activities and compounded hardship on millions of people, especially those in the informal economy who constitute nearly 60 percent of the economy. “Please inform Governor Sanwo-Olu that people living

in the following areas cannot sleep and have no peace because of robbery attacks: Ijaye, Abule Egba, Miran, Command, Iyana Ipaja, Aboru. Robbers now operate from house to house every day even in broad daylight,” a social media user said on Twitter. Curating the views of Nigerians on social media and the reports of our correspondents in various parts of Lagos, BusinessDay has received reports of robberies and violent crimes in the following areas: Somolu, Abule Egba, Ijaiye, Miran, Iyana Ipaja, Ikorodu, Agege, Ajah, and Ijora. Around 2 am within the environs of Agege and Pen Cinema on Monday, the voice of a female resident who was calling for help through a video posted on Twitter at the time of occurrence said there were over 100 street urchins roaming the

streets and causing havoc. “We are no more safe in Agege-Okekpoto, Agunbiade from Pen Cinema. We beg you, please come and help us. We’ve called the police, for the past one hour, they said they are on their way [but] we’re not hearing any siren, nobody is showing up,” she cried. “What kind of country is this? You people are isolating us [and] you’re not doing anything...our lives are no more secured. People are hungry. These boys have entered, they’re over 100 of them. Please come and help us. They’ve been attacking for over one hour. They came en masse. Please help us, we beg you,” she wailed. Seun Adeogun, a resident of Abule-Egba, joined his fellow youths to keep vigil on the community on Sunday after a robbery attack two days

earlier at Agbe Road, a link between the popular suburb, Ahmadiyya, and Abule-Egba. “We just started hearing a noise that they (robbers) are around. Before we knew what was happening, there were already gunshots. They entered some buildings, raped some ladies, and forced open some food items shops. They were after food, money and whatever they could get,” Adeogun explained in a phone conversation. “We had to put ourselves together as youths because we were not sure the police would come on time. We may have to defend ourselves. We have been on red alert just to make sure that they don’t come in to attack us,” he said. While some of the robbers escaped, he said two were caught and beaten before being handed over to the police.

Marginal oil field bid offers opportunity to build fiscal buffer – Experts HARRISON EDEH, Abuja

he government’s consideration of selling marginal oil field licences amid dwindling revenue and the ravaging coronavirus pandemic could be a late decision, according to oil sector governance experts, but the plans hold huge prospects for fiscal buffers. The current fall in oil prices is pushing the Federal Government, which is currently experiencing a cash crunch, to think up other ways to raise revenue besides depending on monthly crude oil sales. BusinessDay had earlier reported government’s proposed plan to hold a bid round for marginal fields in few weeks’ time, which is expected to help raise capital and shore up fallen oil income. The government has not held marginal field bid rounds since 2003, and oil sector governance experts have lauded the current initiative. “The marginal oil field licence sale holds huge prospects for the Nigerian economy in building fiscal buffers and further driving indigenous participation in Nigeria ‘s oil and gas sector which we are yet to structure proper economic gains from,” Adeola Adenikinju, a professor of Energy

Economics at the University of Ibadan, told BusinessDay. Forty-five marginal oil fields were already in the basket at the Department of Petroleum Resources (DPR), the industry regulatory agency, BusinessDay learnt. There are also additional 11 fields revoked by the DPR due to inability to use them. These are Movido-Ekeh, GolandOriri, Independent Energy-Ofa, Associated-Tom Shot Bank, Bayelsa-Ayala, Sogenal-Akeni, Delsigma-Ke, Bicta-Ogedeh, Guarantee-Ororo, EuraficDawes Island and SaharaTsekelewu. This will bring to 56 fields located on land, swamp and shallow water terrains from which investors can choose. But the experts who spoke exclusively to BusinessDay called on the government to learn from the excruciating experience of the oil shocks volatility and commence the process of economic diversification while building fiscal buffers for the economy. “We are exposed to all forms of volatility because we’ve failed to reform the oil sector. Better late than never. We must utilise thisopportunitytobuildthehorizontal and vertical aspects of our economy.BythatImeanthatwe must increase the local value of ouroilresource,”Adenikinjusaid. www.businessday.ng

Olubamiwo Adeosun (m), secretary to the state government, Oyo State; Bashir Bello (l), commissioner for health; Olanike Adeyemo (r), chairman, Oyo State Covid-19 Decontamination/Containment Project, and others, during the flag-off of Oyo State Covid-19 Decontamination/Containment Project at Governor’s Office Secretariat, Ibadan.

Opportunities for stronger portfolio diversification seen in foreign currency-denominated investments, says FBNQuest SEGUN ADAMS

ndividuals and corporate organisations can invest in Nigerian Eurobonds to lower risk exposure of their investments amid uncertain times and hedge against currency risk, according to FBNQuest analysts. The coronavirus-induced huge volatility in the exchange rate has intensified risk of lower real returns from investments in naira-denominated assets due to possible higher inflation, while investment returns in dollar terms are potentially lower for those to whom the dollar value of their wealth is critical. “These include parents that have to pay fees to schools abroad and others who have

regular or occasional foreign currency obligations,” said FBNQuest. According to the analysts, all these highlight the value of diversifying into foreign currency-denominated investments. The analysts said FBN Nigeria Eurobond (USD) Fund, an alternate investment options, provides the opportunity to invest in Eurobonds issued by the Nigerian government and Nigerian banks. The FBN Nigeria Eurobond (USD) Fund is managed by FBNQuest and requires a minimum investment of $2,500 only to get started, a relatively low amount when compared to the minimum entry requirement of other Eurobond funds offered in

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the country. “It is noteworthy to mention that Nigeria has no history of default on its foreign currency, even when oil prices fell to $10 a barrel in the late 1990s,” said FBNQuest. The analysts said sovereign default risk remains low, and Nigeria remains in a strong position to meet its foreign currency obligations which are estimated to not exceed $2.5 billion this year. In just over a month, the COVID-19 pandemic has unleashed a global economic slowdown that is unprecedented in a time of peace. In March, gigantic economic stimuli have been proposed by governments and central banks to manage the impact of a public health scare that @Businessdayng

may change our world as we know it forever. While governments and businesses across the world are trying to come to terms with the attendant impact of the border closures, stay-athome orders and the rising rate of infections on economies, portfolio investors are also confronted with tough decisions to preserve the value of their assets. Financial markets have also not been spared in the slowdown, as stock markets in Europe and America have fallen sharply. The price of crude oil has also fallen, and oil-producing economies like Nigeria are facing a significant price shock with weaker fiscal buffers than they had to soften the blow from past price slumps.

Tuesday 14 April 2020

BUSINESS DAY

news Covid-19: Poor hospitals, inability to contain put Nigeria at high risk than Italy, US, others - Lukman James Kwen, Abuja

chieftain of the ruling All Progressives Congress (APC), Salihu Lukman, has observed that, given the poor state of hospitals, if Nigeria is unable to contain the spread of Covid-19 the experiences of Italy, Spain, United States, France, among others, will be child’s play. Lukman says should that happen, records of cases and deaths could be phenomenal considering the high incidences and poor records of citizens in the country having medical conditions such as tuberculosis, high blood pressure, diabetes, asthma and lots more. In a statement titled: ‘Fight against Spread of Covid-19 in Nigeria: Issues and Factors Hindering Success’, he states that the low engagement strategy by the Presidential Taskforce (PTF) on the Covid-19 campaign is also reducing citizens’ ability to own the fight against the spread in the country. Lukman says with the num-

ber of cases spreading to more states and also on the increase within states, the possibility of extending the lockdown to other states could be high. “Assuming the number of cases is to be the determinant of whether the lockdown will be extended beyond April 14, 2020, will that be sufficient to contain the spread? Given that after the lockdown of Abuja, Lagos and Ogun, more states recorded new cases, wouldn’t this be indicative of the need to have a national lockdown?” he queries. The director-general of Progressives Governors Forum (PGF) suggests that the PTF need to broaden the scope of its membership at two levels, approach the question of expansion based on the strategy of using communication to mobilise the participation of everyone, both governmental and nongovernmental. He notes that communication on Covid-19 should not be about simply passing information to citizens about what government is doing, but that it

should be more about accommodating the views and interests of Nigerians through their representatives. This, he says, can come about through the deployment of some approaches that allows identified representatives to interact with members of the PTF and through such interactions influence decisions. The APC kingpin states that it is good to have all senior Federal Government functionaries driving the process and consulting other arms of governments – National Assembly and governors - but this can be strengthened by going beyond consultations. “The reality is that consultation alone, will hardly produce the needed ownership and synergy of initiatives even within governmental structures. In fact, one can argue that some of the critical observations of the leadership of the National Assembly from the session with the Minister of Humanitarian Affairs and more recently with the PTF on Thursday, April 9, 2020, is a confirmation of the limitations

of consultations. “What is required is that, depending on the terms of reference of the PTF as given by the President, the PTF should consider co-opting members of the National Assembly to join the Committee. “Similarly, is the issue of coordinating with states. The PTF chairman, Mr. Boss Mustapha, has reported at least in two of its daily media briefing sessions that they have had teleconferencing with Governors. The reality of ensuring successful containment of the spread of Covid-19 will however be hinged on the effectiveness of states to enforce measures around social distancing including lockdown. “Although, it is true that the Federal Government exercises jurisdiction over agencies of law enforcement, the truth is that in our context law enforcement alone will not guarantee success. Some of the factors that account for this include the fact that our law enforcement agencies are already overstretched with all the problems of insecurity in the country,” he notes.

Covid-19: Alaro City rolls out initiatives to assist Lagos SEGUN ADAMS

laro City, the new satellite city being built in the Lekki Free Zone, has commenced various initiatives to assist Lagos State battle the COVID-19 pandemic and support Lagos residents during the crisis. The distribution of relief items for targeted communities in the state commenced last week with the donation of 500 bags of rice and other relief materials to the Epe community. Alaro City has also embarked on a civic education campaign aimed at boosting awareness on effective ways of combating the pandemic. Top executives of the organisation have also partnered with the Lagos branch of a global leadership community of business executives to fund the construction of a COVID-19 treatment/isolation centre in Eti Osa Local Government Area, which has been identified as the area with the highest number of infected cases in the state. Odunayo Ojo, CEO of Alaro City, said the government’s effort - particularly Lagos State government led by Governor Babajide Sanwo-

Olu - to contain the spread of the virus and support communities in need were commendable and required the support of all stakeholders. “While the pandemic has made things inconvenient for everyone, we recognise that there are people who have had it worse,” he said. “Therefore, this modest intervention is our own way of helping our communities and assisting government at all levels to effectively contain the coronavirus by getting people to stay at home. We have started with Epe, which is our host community, and will also reach other communities across the state.” Ojo said Alaro City had partnered media companies in sensitizing the public on effective ways of limiting the spread of the pandemic. “Public enlightenment is vital and needs to be sustained to enable Lagosians and Nigerians beat this virus,” he said. “We are channelling resources through key media partnerships to ensure people remain sufficiently educated and enlightened on the right steps to take in limiting the spread of coronavirus. We will also continue to support the government in battling this pandemic.”

How improvement plan will enhance Discos’ investment tracking by NERC HARRISON EDEH, Abuja

L-R: Folake Soetan, acting CEO, Ikeja Electric; Kola Adeshina, board chairman, Ikeja Electric, and Gbolahan Lawal, commissioner for agriculture,Lagos State, after the meeting with Lagos State Ministry of Agriculture,

FRC issues guidance for external auditors, matters to consider during Covid-19 period Hope Moses-Ashike

inancial Reporting Council (FRC) of Nigeria assesses the impact of COVID-19 on audit of reporting entities in Nigeria and after consultation with key stakeholders, releases guidance for external auditors and matters to consider during COVID-19 in order to maintain high-quality audit in Nigeria. FRC published the guidance on its website for external auditors and matters to consider during COVID-19 after assessing its impact on the audit of financial statements. The Council, which aligns with all the measures by the Federal and State governments as well as relevant agencies in containing the COVID-19, is

concerned about the financial health of corporate entities as usually reported in financial statements, especially during this difficult period and therefore believes that additional time may be required to document, review audit engagements due to some measures taken by Federal and State governments in collaboration with Ministries, Departments and Agencies (MDAs) to contain the scourge of COVID-19. The measures include travel bans, quarantines, social distancing, and closures of nonessential services. Undoubtedly, these measures have triggered significant disruptions to businesses worldwide, resulting in an economic slowdown and other economic challenges. www.businessday.ng

FRC classifies the situation into three major audit categories as follows: 1. Audit of 2019 Financial Statements which have been completed, audit opinion issued and report already released to shareholders. No impact of COVID -19. Only accounting issues in first-quarter reports and onwards. 2. Audit of 2019 Financial Statements that are still ongoing with respect to reporting periods ended on or before December 31, 2019. Auditors are required to consider the adequacy of disclosures included in the financial statements as companies are required to disclose the following for each material category of non-adjusting events after their reporting period: (a) the nature of the event; and (b) an estimate

of its financial effect, or a statement that such an estimate cannot be made. The FRC considers the impact of COVID-19 outbreak to be material. 3. Audit of 2020 Financial Statements (Accounting periods ending on or after January 1, 2020). The guidance highlights the implications of the COVID-19 outbreak on audits and auditors in Nigeria and actions to be taken when carrying out audits during the current Covid-19 crisis in the following areas: New Audit Engagement; Audit Planning, Execution and Reporting; Assessing the Impact of COVID -19; Events after the reporting date; Going concern; and Audit of 2020 financial statements (Audit and Accounting issues).

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here is a possibility of the Nigerian Electricity Regulatory Commission (NERC) making the much needed progress in addressing liquidity concerns affecting the power sector, as it has directed the 11 distribution companies (Discos) to submit a performance improvement plan that would look at how they plan to improve services in their respective franchise area. The power sector post privatisation has been marred with liquidity concerns and inefficiency, which had often been put at the door step of the Discos this has made the government at various points threatening to recapitalise the Discos overtime on the back of poor performance, being a critical factor in revenue collection for the power sector value chain. Experts insist that increase in tariff and performance improvement plan commitments of the Discos should go to some level of service improvement, as the regulator may determine appropriate and feasible plan in the circumstances. The regulator, it would be noted, has in order No: NERC/198/2020 directed the 11 Discos to disaggregate its respective service areas and support it with a proposal of ‘service reflective’ tariff that shall be graduated by quality of service in the respective franchise areas. This development, experts say, will assist the NERC in monitoring various tariff classes alongside level of power supply in line with Discos performance targets. @Businessdayng

“By signing off on the proposed network improvement and reliability assurances, NERC will be able to monitor the compliance of the said Disco regarding the respective commitment,” Chuks Nwani, an energy lawyer and power sector governance expert, told BusinessDay. “I agree that the quality of service in service areas should determine the tariff to be approved for that area. Tariff increase shouldn’t be country wide but based on network improvement and reliability on the proposed service area,” he said. He noted that to justify tariff increase in Abuja metropolis and the expected average power availability in the area for instance, the time frame to complete the investment and assured reliability and the tariff that would support the investment must be established and properly monitored by NERC, which is key in attracting the needed progress. Speaking further, Sam Amadi, a former chairman of the NERC, said the directive is the right way even as he observed that the problem with the tariff is that it has been emphatically coat reflective overtime. Amadi observed, “The second aspect and perhaps more important aspect of cost-reflectivity is whether the proposed tariff is matched with the quality of service. “Costs should follow investments and more investments should lead to improvement in service. Emphatically, the need performance improvement plan goes to show how possible increase in tariff will result in service improvement.”

Tuesday 14 April 2020

BUSINESS DAY

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Covid-19: Privacy, confidentiality of patients must be respected, breach creates stigma HARRISON EDEH, Abuja

residential Task Team on Covid-19 has appealed to Nigerians to respect the privacy and confidentiality of patients diagnosed with the COVID-19 pandemic, pointing out that such actions create stigma and could make symptomatic patients underground while destroying the fight against the pandemic. Sani Aliyu, national coordinator of the Presidential Task Team, gave this information on Monday while giving updates on the fight against the COVID-19 pandemic. “I want to mention the issue of privacy and confidentiality and request that we continue to respect the privacy of those they are being diagnosed with his disease,” he said. Aliyu stated, “Repeated breaches of confidentiality by putting out the names of those that are positive in the public sphere or providing detailed description of these people to enable them to be identified publicly does not help the pandemic. “If anything drives people underground and makes it difficult for us to be able to test persons, it creates fear in the society and creates stigma and overall destroys what we see trying to do, which is trying to get on top

of the pandemic.” The virus does not discriminate between the rich man and the poor man, he said. Aliyu said, “My plea to all of us is to respect the privacy of those that have seen diagnosed with this disease. If there is a need to break the privacy for public health purposes it would be done by the recognised authority.” Speaking further on testing, he said, “Part of the reason why we have not been able to proceed as fast as we can is that we have not been able to a have the much demand for testing in those labs that we have activated. “I’m asking those labs particularly the ones that have been activated to please put forward that we allow them key in particularly in areas that there is suspicion of people having the virus. “That would also not only include persons who have had contacts with persons who have travelled abroad it also includes persons with unusual tract infections particularly severe tract infections requiring hospitalisation. “Perhaps those labs that we have activated in the last one week please widen the scope when it comes to the selection of testing protocols so that we can identify and isolate properly.”

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Coronavirus: Edo targets screening of 500,000 residents in few weeks IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin

do State g overnment says it plans to screen over 500,000 citizens across the 18 local government areas (LGAs) in the next few weeks. The state governor, Godwin Obaseki, who made the disclosure in his Easter address said the state government had also secured two additional testing facilities, saying the additional testing facilities were part of gov-

ernment efforts to increase detection and manage cases of Coronavirus (COVID-19) in the state. “We want to screen up to 500,000 citizens in Edo over the next few weeks, and I am pleased to inform you that we now have two additional testing facilities in Benin City, where we plan to test up to 5,000 citizens. We will review our current policies when we obtain sufficient data and

… secures two additional testing facilities evidence from the screening and testing”, he said. The governor, who said the government was working assiduously to contain the scourge, urged residents to adhere to directives on good hygiene and safety, including regular washing of the hands, use of sanitisers and observing social distancing. “Ideally, the Easter season is marked by congregational worship and visits to loved

ones, but I appeal to you to restrain from sustaining this practice this period. The social distancing and stayat- home orders still subsist, so I enjoin you to maintain contact with your relatives and loved ones through digital media channels such as WhatsApp, Facebook and Zoom, so that we can all be safe and protected. If you must go out, do so wearing facemasks”,he added.

Covid-19: StarTimes develops videos to curb fake news

s the COVID-19 keeps spreading across Africa, governments and organisations are devising measures to help stay safe from the pandemic. As part of its social responsibility drive, Africa’s Pay-TV operator, StarTimes has released a series of anti-pandemic knowledge videos to help curb the spread of fake news and rumours about the virus and to further raise public awareness. According to the company, 30 short videos on the anti-pandemic has been produced by its African

staff working remotely from their hometowns and can be viewed in 6 different languages (English, French, Portuguese, Swahili, Hausa and Chinese). The company noted that StarTimes decided to release the series of anti-pandemic knowledge videos totalling 30 due to the fake news that has been circulating on social media and people have been acting irrationally out of fear and ignorance which can be dangerous for communities. “As a leading media group based in Africa, it is

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StarTimes’ role to disseminate accurate and scientific information to fulfil the social requirement. Recently, a dedicated TV programme “StarTimes Daily — COVID-19 Report“ was launched in providing viewers with update and data about the pandemic in Africa and in the world every weekday. “ The anti-pandemic knowledge videos further support African people with scientific knowledge to protect themselves with the right behaviours against possible infection. The video is with accordance and

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guidance from an experience international professional organisations such as the WHO. The company further explained that “The 30 short videos rotating around 300 times will be on ST Guide and 22 self-operated channels that includes; ST Novela E, ST Novela F, and ST Novela P. Also, the video will be available on the StarTimes ON App and the official Facebook page and Youtube account of StarTimes for better exposure to audiences on diverse platforms.

Tuesday 14 April 2020

BUSINESS DAY

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Tuesday 14 April 2020

BUSINESS DAY

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Oil glut: Stakeholders want government to get serious about economic diversification Olusola Bello

takeholders in the oil and gas industry have once again spoken on the need for government to get more serious about the issue of diversification of the Nigerian economy by settling down and reappraising the whole economy and developing mechanism to stop getting jittery any time there is a problem with crude oil price. According to them, the country’s reliance solely on crude oil as a major source of foreign earning is the one reason why the country is thrown into this current quandary. They say government must more than ever before get serious by looking at other sources that could help boost the economy. Diran Fawibe, chairman/ CEO of International Energy Services Limited/Doris Joint Venture, says overtime, price of crude of oil has not been stable and because of this the Nigerian economy suffers whenever there is crisis. He states that it

is good that government reviewed her budget to reflect the current reality in the oil and gas industry. He commends the group managing director of NNPC for his efforts at revamping the refineries, which he says would be handed over to private concerns after the exercise. He states that through the refineries the economy could receive boost as some of their products could be exported to earn foreign exchange. Bank-Anthony Okoroafor, chairman of Petroleum Technology Association of Nigeria (PETAN), while speaking on the matter, notes: “We must sit down and look at our entire economy properly. We must put things in motion to always hedge against this”. He says Mele Kyari, group managing director of the NNPC has started well by proposing to give refineries to private hands and de-regulating the downstream. “We must support his hard decisions to reduce all leakages so that we can use our

revenues wisely to create longlasting productive economy that will not catch pneumonia whenever oil prices drop,” he states. We should not be pouring hard-earned foreign exchange on unproductive ventures, as all unproductive ventures should be sold, he advises. “The current oil glut is estimated at around 20 million barrels per day (BPD). Even though the OPEC+ cut of 10 million BPD is historic, it only represents about half of the global surplus. G-20 energy ministers are expected to deliver another five million BPD,” he notes. Victor Eremosele, chairman/CEO of MC Consulting, in his assessment of the economy in relation to recent development in the global oil market, states: “The current oil glut is estimated at around 20 million BPD. Even though the OPEC+ cut of 10 million BPD is historic, it only represents about half of the global surplus. G-20 energy ministers are expected to deliver another five million BPD.”

FG warns non-accredited private health facilities against treating Covi-19 cases ... initiates compensation package for health workers handling pandemic James Kwen, Abuja

inister of health, Osagie Ehanire, has warned health personnel in non-accredited private health facilities against treating Covi-19 cases as doing so will result to self-infection and cross infection. Ehanire, who gave the warning Monday at the briefing of the Presidential Taskforce on Covid-19 in Abuja, said treating Covi-19 in private homes and private hospitals could increase the chances of spreading the killer virus. He announced that the Presidential Taskforce on Covid-19 was working on compensation packages to recognise the sacrifices and motivate brave health

workers directly handling on the Coronavirus pandemic. The minister said such packages would go beyond the life insurance of public servants and health workers hazard allowance, disclosing that life insurance of over 3000 health workers has been donated by a private insurance company. The minister also said, the accreditation team of the Ministry has finalize protocols for use in accrediting isolation and treatment centres to ensure the maintenance of good standards and enjoined all states to strictly adhere to those standards. “All centres have been accredited in the Abuja metropolis which I inspected at the weekend and recommended them as fit for use in addition to the National Hospital and the

University of Abuja Teaching Hospital. “The Federal Ministry of Health and the Federal Capital Territory shall be meeting to harmonize strategies and functions. The Case Management Team has concluded the training of health care workers in Abuja who will be attending to patients in the Centres”, he said. Ehanire further announced that: “the Federal Ministry of Health began a comprehensive review of the health sector Covid-19 response this morning (Monday) in order to build the new robust strategic plan and structure that will address the expected challenges of the imminent community transmission phase, and the outcome will be made public in a few days”.

FG activates GEEP initiative to cushion Covid-19 impacts on SMEs KELECHI EWUZIE

etermined to cushion the economic impacts of the coronavirus pandemic on small medium enterprises, petty traders and artisans nationwide, the Federal Ministry of Humanitarian Affairs, Disaster Management and Social Development has activated the GEEP infrastructure initiative. Government Enterprise and Empowerment Programme (GEEP) is one of the social intervention programmes, comprising of TraderMoni, MarketMoni and FarmerMoni and executed by the Bank of Industry. GEEP is a completely digitised programme where all eligible traders are captured into a database, verified via phone and facial recognition technology, and receive disbursements in mobile wallets. Over the next few weeks, a

total of N5 billion is expected to be disbursed through GEEP, reaching up to 500,000 petty traders nationwide. With several states going on lockdowns, petty traders and micro enterprises are hit the hardest as they live on daily incomes from trade. These loans are to cushion the income losses, while also enabling these traders to serve their communities with essential items like food, hygiene products, and domestic supplies. The first phase of 100,000 loans has kicked off. Uzoma Nwagba, chief operating officer of the programme, says there has never been a better time for this project to meet such critical need. I am just grateful that we have the infrastructure to do this. The primary focus of the Ministry now is how to scale things up. One of the rounds of disbursements took place at the Obalende LCDA Community Market recently in Lagos. Obwww.businessday.ng

serving strict social distancing guidelines, petty traders with their wares were in safe distances apart, in which they were provided with GEEP loans by kitted staff of the programme. Shoppers from the community, standing in pre-marked boxes for each trader, were able to purchase needed items and return home. To speed up of rollout of disbursements, a number of the beneficiaries are traders previously captured and verified in the GEEP database. Speaking for the market women, the Iyaoloja of Obalende thanked the Federal Government for the opportunity of the loans. In her words “you know we market people earn living by buying and selling. With this Coronavirus, everything has been very slow; no market, but people need to eat and market is open small. This Federal Government loan will help us a lot. We are more than 500 in our group.” https://www.facebook.com/businessdayng

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SystemSpecs, Paga partner to deepen digital payments Segun Adams

ystemSpecs, a Nigerian fintech company and provider of Remita, and Paga, a mobile money service provider in Nigeria, have partnered to extend the frontiers of electronic payments in Nigeria. This comes as Nigerians social distance, stay at home and remain safe order in the face the Covid-19 pandemic is in place. In a recent announcement by the organisations, the first phase of the collaboration would enable Paga customers to easily initiate and complete payment to all Remita billers and merchants right from Paga’s web channel – paga.com. Paga’s agents nationwide would also be able to process end-to-end payments to all Remita customers from their platforms. The initiative is applauded by industry enthusiasts and is expected to chart the path for deeper collaboration within the fintech ecosystem, making electronic payments more attractive and less stressful for customers irrespective of their needs and location. According to Ezinne Obikile, SystemSpecs executive director, Infrastructure and Payments Gateway, “SystemSpecs is committed to driving financial inclusion and providing payment convenience to all, which underscores this strategic partnership with Paga to extend a wide range of financial solutions and services to customers everywhere, even at a time as this.” Also commenting, Jay Alabraba, co-founder and Director

of Business Development, Paga said: “In our commitment to make payments easier for all Nigerians and businesses, we are pleased to collaborate with SystemSpecs. Our goal is to always provide an improved experience to our customers everywhere, by leveraging digital technology. This collaboration would further help us meet the needs of individuals who seek to make various bill payments, including those in emerging markets.” The immediate impact of the collaboration on the public is the easy generation of Remita Retrieval Reference (RRR) and payments into the Federal Government’s Treasury Single Account. It would also enable payments to other Remita billers such as state governments, tertiary institutions and other organisations by Paga customers and agents directly through Paga platforms. Founded in 2009 with a purpose to make it simple for one billion people to access and use money, Paga is the largest digital wallet operator in Nigeria with a nationwide network which consists of over 23,000 agents, including mom and pop stores as well as pharmaceutical and grocery stores where people can walk in for quick and easy access to financial services. Launched in 2005 by SystemSpecs Limited, Remita is a suite of financial technology solutions trusted by governments, banks, fintechs, businesses and individuals for the comprehensive management of billings, collections and payment infrastructure needs.

Covid-19: China denies alleged ill-treatment of Nigerians, others Innocent Odoh, Abuja

ollowing the furore about alleged ill-treatment of Nigerians and other Africans in Guangzhou, capital of the Guangdong Province of China, in the implementation of measures to contain the spread of the COVID-19(Coronavirus),theChinese government has said it has not adopted any discriminatory measures against Africans. Chinese Foreign Ministry spokesperson Zhao Lijian said the measures taken were to contain the risk of imported cases of the virus and also prevent domestic resurgence. He said China had achieved remarkable progress at this stage, thanks to our mostcomprehensive,rigorousandthorough measures. “We are still facing great risks of imported cases and domestic resurgence particularly. As the pandemic spreads all over the world, imported cases are causing mounting pressure,” he said, adding that all countries were taking containment measures to prevent it from further spreading. Lijian said in the fight against the coronavirus, the Chinese government had been attaching great importancetothelifeandhealthof foreign nationals in China, stressing that contrary to the reports of discrimination, all foreigners are treated equally. “We reject differential treatment, and we have zero toler-

ance for discrimination. Since the outbreak, the authorities in Guangdong attach high importance to the treatment of foreign patients, including African nationals. Specific plans and proper arrangements are made to protect their lives and health to the best of our ability, thanks to which we were able to save the lives of some African patients in severe or critical conditions,” he noted. HesaidfurtherthattheGuangdong authorities attach great importance to some African countries’ concerns and are working promptlytoimprovetheirworking method. The measures include: provision of health management services without differentiation, to designate hotels for the accommodation of foreigners required to undergo medical observation and adoptpriceadjustmentforthosein financial difficulties; to set up effective communication mechanism with foreign consulates-general in Guangzhou; and to reject all racist and discriminatory remarks. “The Chinese people always see in the African people partners and brothers through thick and thin. China-Africa friendship is unbreakable as it is deeply rooted in this land. African friends can count on getting fair, just, cordial and friendly reception in China. The foreign ministry will stay in close communication with the Guangdong authorities and continue responding to the African side’s reasonable concerns and legitimate appeals,” he said.

Empty choir and orchestra stage for the 2020 Easter Concert of Apostolic Faith Church in Lagos on Sunday. Pic by Pius Okeosisi

Discos say two months free electricity subject to NASS stimulus package HARRISON EDEH, Abuja

ssociation of Nigerian Electricity Distributors (ANED) last Thursday said the two months free electricity to all Nigerians as a palliative for the Coronavirus pandemic was subject to stimulus package being passed by the National Assembly and subject to assent by the President. This was disclosed in a statement through its spokesperson, Sunday Oduntan, affirming their alignment with the Federal Government and National Assembly’s efforts to provide free electricity for two months as a palliative for the effects of the Coronavirus pandemic on Nigerian electricity consumers.

The Discos in the statement said the energy to be supplied for the two months was not free but was being paid for by the Federal Government, in partnership with the National Assembly. BusinessDay had earlier analysed and reported that the government had to pay electricity suppliers an estimated N120 billion to provide Nigerians free electricity for two months. The spokesperson noted that the ability of the DisCos to go forward with the two months free electricity was subject to the stimulus package being passed by the National Assembly and signed into law by Mr President. According to the Discos, “While this palliative seeks to mitigate the economic challenges that Nigerians are being sub-

jected to during this COVID-19 period, it is our hope that we not lose sight of the no-cost reflective tariff challenges that the Discos continue to suffer under.” The Discos also lauded the President, members of his government and the National Assembly for this initiative, noting that the clarification became necessary due to questions that have arisen around how the cost that would accumulate be absorbed in the Nigerian Electricity Supply Industry (NESI). Speaker of the House of Representatives, Femi Gbajabiamila, has emphasised the need for an all-inclusive relief package for Nigerians by government, arising from the effects of the Covid-19 crisis. He said one of the most ef-

fective means of alleviating the financial burden of the stayat-home order to prevent the spread of the virus was for the government to give a 100 percent waiver on the electricity consumed by every household in the country. The speaker made his position known during a meeting between the leadership of the National Assembly and the minister of finance, Zainab Ahmed, the minister of state for petroleum resources, Timipre Sylva, the governor of the Central Bank of Nigeria (CBN), Godwin Emiefiele, the group managing director of the Nigeria National Petroleum Corporation (NNPC), Mele Kyari, and others, for an update on the COVID-19 interventions.

NOVA Merchant Bank supports fight against Covid-19 with relief materials HOPE MOSES-ASHIKE

OVA Merchant Bank has donated various relief materials to the vulnerable sector in Lagos in response to the fight against the coronavirus (COVID-19) pandemic. The provision will support the drive to limit the spread of COVID-19 in Nigeria. Beneficiaries of this intervention include Pacelli School of the Blind, Surulere; Vigilant Heart

Orphanage, Lekki; Heritage Home Foundation, Ikota, and Old People’s Home, Yaba. Handing over the items, Omolara Abiola, head, brand marketing and corporate communications, NOVA Merchant Bank, on behalf of the Board expressed the bank’s commitment to the fight against COVID-19. “COVID-19 is a global pandemic and it is our responsibility to protect our communities by taking deliberate steps to limit the spread of this virus,” Abiola

said. Phillips Oduoza, NOVA Merchant Bank group chairman, speaking on the bank’s CSR efforts, said “communities around us should benefit from our presence especially at times like this. “Even though we are a relatively new bank, we believe in supporting the society as this gesture is to complement the efforts of government in providing relief to Nigerians. “I would also like to use this opportunity to commend the

government for its deliberate response to limit the spread of the scourge and will like to call on other corporate organisations and highly placed Nigerians to join the government in the fight against COVID-19,” he said. NOVA Merchant Bank offers an integrated suite of financial solutions covering wholesale banking, investment banking, asset management, wealth management, trade services, transaction banking, cash management and digital banking.

Covid-19: More Nigerians to benefit from free SMS than data

s part of a broader support package to help curtail the spread of the global coronavirus pandemic in Nigeria, MTN is giving up to 300 free SMS per month to all its subscribers, to ensure that they can communicate with their loved ones. The company on its Twitter page sent out a creative announcing the giveaway with the following message: “We understand how important it is to keep in touch with loved ones during this period. Now you can with FREE 300 SMS to all networks.” Spread across an entire month, the free SMS package allows MTN’s over 70 million subscribers across Nigeria to send 10 SMS daily for 30 days to all networks. With the cost

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of an SMS pegged at N4, this is estimated to cost MTN billions of naira to execute. While there have been commendations by Nigerians, some have been critical of the support package, preferring instead that the company gives out free data. They argue that SMS is outdated and that more Nigerians rarely send SMS these days since there are various messaging and social media apps preinstalled with text features. These are not only relative, but unverified arguments and appear to contradict available facts and statistics. Concerned by the criticism, MTN has clarified its reason for the free SMS. In a press release detailing its interventions so far, the company said the free SMS

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was to ensure its subscribers, “most importantly those in the most vulnerable situations”, can continue to communicate with and support their loved ones and friends. One of the most important measures to fight the coronavirus pandemic and protect oneself in this present digital era of unrestricted flow of information, is the ability to access reliable and validated information about the nature of the virus from authorised channels. With the number of smartphone users in Nigeria pegged at roughly 25 and 40 million, this means that the dissemination of reliable information via social media to curtail the spread of the pandemic, would be restricted @Businessdayng

to those with smartphones; a number that will shrink if we take into consideration the number of people that own more than one smartphone. The prevalence of the Covid-19 pandemic has brought great fear, misinformation and a lot of fake news. Even for city dwellers, the ownership of smartphones and access to the internet means that they are more susceptible to being misinformed. Statistics show that roughly 20 percent of MTN subscribers own a smartphone. This means that the remaining 80 percent of MTN’s 70 million plus subscribers, the majority of who live in semi-urban and rural communities, do not own a smartphone. That is over 40 million people.

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Imponderables as Achilles heel in economic management

Emeka Okolo

he argument as to whether Economics should be regarded as an art or science was seemingly resolved long ago by majority of the professionals. The verdict: it should be regarded as a social science; even though it deals with measurable or systematic principles but because it impacts primarily on decisions of human beings in their environments which may not be reasonably predicted, its exactitude as a “pure” science may be compromised. It is trite that any economist worth the name making forecast/prediction that may ultimately transform to a policy usually has underlying assumptions as guide. It is therefore an impossibility to expect to see a “one handed” economist as some people are wont to suggest. On one hand, a particular outcome is possible based on certain assumptions while a different outcome may likely occur if some assumptions are varied, on the other hand! As uncanny as an economist may be, there are certain issues that are beyond his realm. These are euphe-

mistically couched as imponderables. Whether at micro or macro levels, they are ever present and crucially too! And how many economists can take the place of Nostradamus? Consider any artisan whose income is derived through daily activities and has needs always mapped out to align with expectations from his daily income and suddenly there is a restriction in movements arising from a new development in town that his capacity to earn his income is severely affected. As an economist in his own right, how is he expected to juggle his needs that may range from anything from monthly house rent to feeding his family on daily basis against his now rested daily income stream? Take it to another level. Consider an entrepreneur who has set up an SME outfit with borrowed fund from a bank backed naturally by a well written Business Plan detailing amortisation schedule and all warts. For effect, this outfit has its clientele base within Nigeria and few states in ECOWAS sub-region and suddenly the border is closed, thus diminishing its outreach and now Corona Virus aka COVID-19, to boot. Who factored in these disruptions which durations are best left to imaginations? How is his company expected to meet its obligations to its bank, creditors and other critical stakeholders including its employees whose continued employment (in a country already teeming with unemployed people) and thus means of livelihood are in serious jeopardy? What applies to an SME, applies a fortiori to a bigger corporate whether quoted or unlisted, mutatis mutandis. The narrative so far has been at

the micro levels. Now let’s extend it to the macro height and take a good consideration of the big elephant in the house – the Nigerian State. It is no longer news that COVID – 19 is currently ravaging the entire world (Nigeria inclusive). It is equally no longer a matter of conjecture that the mainstay of Nigeria’s economy – crude oil - is having a bashing in the international market. What’s more, it is no longer breaking news that the price of oil in the international market is currently trending at $20/barrel (as this article is being crafted), whereas the benchmark on which the 2020 budget is anchored on was $57/barrel (following adjustment by the National Assembly after the Executive’s initial proposal of over $60/barrel) and facing likely adjustment to about $30/barrel. Who saw this coming? Add to that the ego tiff going on currently between Russia and the Kingdom of Saudi Arabia which some commentators have chosen to call price war, then the picture becomes gloomier. As the Yankees will say: you ain’t seen nothing yet! The question on the lips of Nigerians now is: how far is their country from another recession barely three years of exiting the last one? The answer to me is blowing in the winds! Truth be said, imponderables are as eerie as anything one can fathom but unfortunately, they have more often than not, not been accorded the “due respects” they deserve by economists and those entrusted with economic planning and management. Not few economists (including this writer) and commentators were aghast at the fixing of oil benchmark for the 2020 budget at $57/barrel at a time the international

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Truth be said, imponderables are as eerie as anything one can fathom but unfortunately, they have more often than not, not been accorded the “due respects” they deserve by economists and those entrusted with economic planning and management

price of crude with its yo-yo dance was averaging $65/barrel. It was clearly overly optimistic! The counter argument has been that since the issue of diversifying the Nigerian economy has been more of sloganeering than action and based on the fact that the country’s foreign earnings revolve around crude oil, the assumption of a benchmark not too far from the prevailing oil price at the time of budget preparation was justified. This stance aside not taking into reckoning the volatility in the international oil market, clearly violates the principles of conservatism and prudence which are time honoured concepts in basic accounting. Granted it will be a herculean task predicting what imponderables at any given time might be, recognising their existence and ability to spring up anytime is the first step in containing them whenever they arise. The second step is assigning “weighty” weights to them. In building scenarios, different weights should be assigned to each case and the position of the worstcase scenario assumed. Inevitably, the worst-case scenario usually turns out to be the clincher; if the future outcome aligns with the worst case, the entity is in good stead but if better, it becomes a buffer. With that and applying the aphorism of ceteris paribus, a better result will always be assured instead of overly relaying on the latter to navigate through the unpredictable landscape of economic planning. This applies in equal measure at both micro and macro levels. Dr. Okolo is a Chartered Stockbroker and Management Consultant based in Lagos.

Unenlightened self-interest

ne of the surest ways to know if a society will make economic progress is to see if its so-called elite understand the concept of enlightened self-interest. It basically means furthering the interests of others, ultimately to serve your own self-interest. Think of people like Cornelius Vanderbilt, John Rockefeller, Andrew Carnegie and JP Morgan. These were selfish men who ruthlessly amassed huge fortunes, but then turned around and “helped” a lot of other people, and thus secured two things - their own legacies, and the prosperity of their descendants. But these men walked the earth more than a century ago. In our time we have seen Bill Gates, as an example, ruthlessly build up Microsoft to be the dominant player in the desktop computing world, and now, having secured the future of his progeny, he is going about securing his legacy through his foundation. One of the things he is doing, and doing well, is health. Last week, Gates gave a series of interviews to various international media organisations regarding the current COVID-19 pandemic, and in each of those interviews, he showed a clear understanding of the dangers of the virus and the empathy of someone who wants to help. It also helped that he, at various points the world’s wealthiest man, was social distancing. Now contrast that with the behaviour of Nigeria’s top of the pile. Since this pandemic came to Nigeria, our elite have not acted with discipline, or with any form of enlightened self-interest. This lack of discipline has endangered the lives of fellow citizens starting from the very top. President Buhari’s chief of staff, Abba Kyari was one of the first members of the elite to contract the deadly virus after a visit to Ger-

many that a Chief of Staff should not have been involved in, but that is another matter. After he returned to Nigeria by way of the United Kingdom and Egypt, rather than selfisolate as stipulated by the Nigeria Centre for Disease Control, Kyari went about exercising his power and being seen in close proximity with a lot of Nigeria’s power elite including but not limited to Adams Oshiomhole, George Akume, Lai Mohammed, Ramatu Tijjani, Zubair Dada, Garba Shehu, Yahaya Bello, Boss Mustapha, Osagie Ehanire, and most notably, Nigeria’s richest man, and a friend of the aforementioned Bill Gates, Aliko Dangote. The ill-discipline was not limited to the ruling party as the governor of Oyo state, one of his special assistants, the governor of Abia state, all had their moments of indiscretion. Then there are our celebrities who following a lockdown which many have rightly said is hard enough for a largely indigent country such as Nigeria, still found time to share the virus amongst themselves in award shows and most ironically, in a house party hosted by Funke Akindele, who just happened to have done some television ads advising people on the need for social distancing and is a (now former) brand ambassador for Dettol. The actions of Nigeria’s religious elite have also caused shame. We have had Islamic clerics encouraging their adherents to turn up for Jumat services despite the knowledge that India’s exposure to the virus exploded after a Muslim conference (as did Malaysia’s), and many Christian clerics thumbed their noses at the government’s order to close. In one of the more famous ones, Chris Oyakhilome served to fuel a conspiracy theory that has come to be associated with the pandemic.

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Perhaps imbued by a loss of church and personal income following the movement of restrictions in a bid to stem the spread of the virus, Oyakhilome’s resort to questioning the existence of the virus, thereunto attacking the proposed 5G technology as an instrument of the Antichrist is as worrisome as it is laughable. Even worse, the federal government’s attempt to dispel rumours of its decision to buy 5G technology from China served to add to the fake news and misinformation that has been making the rounds, and it goes to show that the Buhari administration has not learnt anything from its handling of the “Jubril of Sudan” case where the President’s handlers encouraged him to make a statement proving that he’s alive and not a body double. If there’s an open secret about the lack of development in Nigeria, it is the problem of leadership. From what events have shown in the last few weeks, however, the problem goes beyond the leadership and includes followers as well, as fitness enthusiasts, largely from the middle class, took to the Oworonshoki Expressway in Gbagada, Lagos last week openly defying the stay at home order--an offence which Funke Akindele and a number of others have been prosecuted for. This is not to lay the blame squarely on the shoulders of the citizens however because if Nigeria’s elites had acted responsibly, we probably would not have gotten here in the first place. A self-aware, enlightened elite would be the vanguard of fostering a deep and contextual understanding of the pressing issues of the day. In a pandemic-laden environment that is exacting significant social and economic costs, it is a moral and pragmatic imperative. Unenlightened self-interest, in

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Cheta Nwanze

which most or all persons act according to their own myopic selfishness, means that the group suffers loss as a result of conflict, decreased efficiency because of lack of cooperation, and the increased expense each individual pays for the protection of their own interests. Unenlightened self-interest is why trust in government and its governing ability has plummeted from the heady days of optimism that marked our return to democratic rule. Unenlightened self-interest is why power, health, infrastructure and education have not been fixed. Unenlightened self-interest is why a political restructuring of the country has not happened. In the final analysis, the Nigerian penchant for tolerating and even rewarding the bad behaviour of its elites and ruling class will, among other things, severely undermine the containment efforts as well as, give free rein to gross irresponsibility as well as nonaccountability which no sane society should condone. The lack of self-awareness of that elite and ruling class will ultimately lead to our society’s destruction. Cheta Nwanze is the lead partner at SBM Intelligence and heads the company’s research desk.

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Leadership, faith and fear in times of crisis

STRATEGY & POLICY

MA JOHNSON

ver a decade ago, I was on a study tour of a country in West Africa. While in the country, I had the opportunity to meet with a chief who was in his twenties in a small town. It was a fascinating experience. One of the questions I remember asking him was “How did you become a chief at a young age?” His answer: “I was seen as someone who added value.” That is what all good leaders do – add value. Good leaders will always see their roles as a means to help others, not just themselves. Most importantly, leaders have always needed empathy to allay the fears of their people in times of crisis. Empathy allows leaders to build and develop relationships with those they lead. Empathy can be used for good and evil. When empathy is used for evil, it causes confusion and ambiguity. In fact, empathy will create uncertainties in the minds of those being led. When empathy is used for good it helps leaders provide truthful, caring and helpful information to the followers while at the same time remain calm, steady and decisive. Empathy is a crucial part of emotional intelligence that leaders need to employ in time of crisis. The world is facing a crucial time of fear and uncertainty with the invisible enemy known as coronavirus. It is novel, according to experts, because it is different from other types of coronavirus experienced by humanity in the past. Governments, the World Health Organization (WHO), and healthcare workers are battling to keep patients

and workers safe, informed and calm. When fear takes control of the dire situation in which we have found ourselves, one can expect reactions to follow along a continuum from frank denial to full scale panic. What is the cause of panic in this COVID-19 era? The greatest cause of panic is misinformation. Fake news has taken centre stage across the globe. Politicians and pastors are purveyors of fake news. Some state governors are positive carriers of fake news. One state governor in the South-South region of Nigeria was reported to have told his people that there is no need for social distancing but only face mask should be worn. What a misinformation? Some analysts have argued that there is a problem attributing panic simply to misinformation. For one they argued, it ignores a far deeper issue, which is trust. Put bluntly, many people they say, no longer have trust in institutions that purport to arbitrate between falsehood and truth, misinformation and information. Globally, there was an alarming trust deficit at the outbreak of the disease. But the level of distrust that pervaded the entire world at the outbreak of the disease has gone down a little when it comes to governments and international agencies. There is still cause for concern because trust is what underwrites our contracts with those in authority. It forms the basis of governance. Without trust there are chances that people will panic in time of crisis. Panic is not desirable at this time because it will not stop the deadly disease from moving round the globe. As people panic because of fear, there are conspiracy theories all over the place about the coronavirus and the use of the fifth generation in cellular technology popularly referred to as 5G. There are teachings linking the 5G network to coronavirus and anti-Christ. Is this theory a result of ignorance or panic? Or both of them? Popular pastors and some politicians have found a dubious way to link the 5G technology with spiritual things and the coronavirus pandemic. When I heard

this theory from one of our pastors and a senator in Nigeria, I was disappointed. But that is empathy in action wrongly applied. The question I asked is: “What has the wisdom of Solomon got to do with the age of Methuselah? Methuselah as revealed by the scriptures is the oldest man created by almighty God while Solomon was the wisest man who ever lived. The conspiracy theory on 5G has led to confusion and fear in some countries. In fact, some 5G masts have been set ablaze in the UK and other countries. That the 5G was part of new world order, according to the pastor, is correct. But it is incorrect to say “that some prominent persons in authority in the world were trying to build a religion, economy and government for the entire universe.” Quoting the Book of Revelation Chapter 13, the pastor was alleged to have confused members of his church by saying that there is no need for a vaccine adding that “these are part of the anti-Christ’s plan for the new world order. One could look at any issue from a theological angle or from a scientific standpoint, but people should not be misinformed. Certainly, with advancement in technology, the 5G is being touted as the technology that could make the 4th Industrial Revolution- internet of things, Artificial Intelligence, Robotics, etc- a reality. It is an innovation that will be required for transferring huge volume of data which involves using higher wave frequency than previous generations. With 5G, we will have faster download speeds, reduced congestion and lower latency. If we need more information on 5G technological revolution, we should read it up in relevant blogs or website. Those of us in leadership positions should not create fear in the minds of those we lead through fake news. It is gratifying to know that other well-informed critics have equally used the pulpit to counter beliefs linking 5G network with spiritualism and the coronavirus. They explained that there is no link between the 5G technology and end-time signs. At least those who

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What is the cause of panic in this COVID-19 era? The greatest cause of panic is misinformation. Fake news has taken centre stage across the globe. Politicians and pastors are purveyors of fake news. Some state governors are positive carriers of fake news

are privileged to study Theory of Electromagnetic Waves and perhaps, Signal Processing in Communications Theory understand the principles governing the use of a mast to transmit data. The coronavirus is a pandemic as declared by the WHO and other official healthcare providers. If some say that coronavirus is caused by the 5G mast, what do we say about people infected with the virus in villages where the mast is not installed? Religious leaders are urged not to plant fear in people whenever there is crisis. I agree with those who believe that the church should be more concerned about preparing their members for the second coming of our Lord, instead of condemning a major technological breakthrough. So, since the outbreak of the disease, why should developed countries destroy their economies up to the tune of trillions of US Dollars because they want to put chips in people’s bodies? Why should New York City’s public-school system, the largest in the USA, remain closed till September 2020? It is because of the devastating effect of the coronavirus on humanity. We all have a responsibility to relay facts with empathy and clarity, not confusion. False assurances, fake news and propaganda are worthless and undesirable in this time of uncertainty. This could cause greater alarm when the truth is revealed. All said, spreading false hope is destructive. True empathy requires the ability to understand the fears and concerns of others and provide best recommendations- even if they are not what people want to hear. At this time of international emergency, there is urgent need for global empathy. The current situation calls for us to empower ourselves and others to collectively come together, bringing out the best in us as we strategize to overcome this global health crisis. Rather than misinform, leadership should turn hope into action. Thank you! Johnson is an author and a retired naval engineer who has passion for African development and good governance

Nigeria’s transportation sector: Adaptation to pandemics (COVID-19) and solution

he unprecedented impacts and disruptions as a result of coronavirus known popularly as COVID-19 is affecting all economies and markets globally. It is caused by the SARS -COV-2 and has continued to grow with more than 175 countries and territories reporting cases. There are currently 1,604,718 global confirmed cases and 95,735 deaths from COVID-19 outbreak as of April 10,2020,03.37GMT and 305 confirmed cases and 7 deaths in Nigeria. The response by governments and organisations all over the world has suddenly impacted our way of life and that of the global transportation systems. The speed with which these impacts has hit the world is unprecedented, especially because the different modes of transport (airlines, railways, maritime, pipelines, private and public transport systems) have all experienced drastic fall of customers and patronage. This has resulted negatively in shutting down of operations and in many cases reduction in service delivery levels which has thrown nations and the entire transport systems into the worst case ever experienced by mankind, worse than the similar case of 1918 influenza pandemic caused by an H1N1 virus with genes of avian origin. Though, COVID-19 pandemic has negatively dislocated and shutdown industries and economies, there seems to be some unique opportunities attached to it, such as helping the sector to reposition itself to be broader in

business approach and seamless. Before the outbreak of the virus, Nigerian economy had great potentials for growth, it is currently the largest in Africa with a gross domestic product (GDP) of $446.543 billion (2019). The lack of a well-diversified economy and weak healthcare system is a great challenge that might affect the economy of Nigeria if urgent steps are not taken in addition to the International Monetary Fund (IMF) revision of the 2020 GDP growth rate from 2.5 percent to 2 percent as a result of a relatively low oil price and limited fiscal space. Additionally, the country’s debt profile had been a source of concern for policymakers and developmental practitioners, as the most recent estimate puts the debt service-to-revenue ratio at 60 percent, which is likely to worsen amid the steep decline in revenue associated with falling oil prices. These constraining factors will aggravate the economic impact of the COVID-19 outbreak and make it more difficult for the government to manage the crisis. Transportation sector contribution to Nigeria’s GDP increased to $720.241 million in the third quarter of 2019 from $642.927 million in the second quarter of 2019 and contributed 2.49 percent to nominal GDP in Q1 2019, an increase from 1.85 percent recorded in the corresponding period of 2018, higher than 2.05 percent recorded in the fourth quarter of 2018. The importance of the sector as the gateway to the economy of nations cannot be overemwww.businessday.ng

phasised, especially because transportation is an essential service needed all over the world to move passengers, goods and services with safety and security as its fundamental objective in delivering quality service and also a top priority for the government (the regulators) to ensure everyone working in the sector and using it in Nigeria are safe and secure. Coronavirus pandemic has opened a huge gap in the sector and it needs to be closed urgently because of Nigeria’s poor transportation system which is not well regulated and monitored. The Use of motor bikes, tricycle, poor transport infrastructures and lack of modern transport technological system in driving the sector, lack of modern transport policies, very little or no attention by the government to the sector, lack of professionalism in the sector are some of the areas with gaps that needs to be closed for maximum efficiency, repositioning and growth of the sector. The existing gaps in our nation’s transportation systems before the coronavirus pandemic has further widened because of the pandemic and so our government needs to begin strategizing towards taking urgent steps to close the wide gap created, because of the need of steady supply of food, medical supplies, emergency goods with minimal delays or restrictions needed and other essential services needed to maintain a balance in our nations supply chain networks for the sustenance of life and our economy. The response of mobility service providers

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Festus Okotie

(MSP’S) to COVID-19 after the lifting of the ban of restrictions on movement should create a new culture in our nations transport system, especially on ways of managing the right blend of mobility options through adopting modern methods of transportation, if we are really serious in building a more diversified economy and transport sector. This will help us create higher standards especially in our public transport systems where there are little or no standards of monitoring, managing and regulating the system by the government.

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BUSINESS DAY

Tuesday 14 April 2020

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Online disinformation and the African firm (1) Rafiq Raji

nline disinformation or “fake news”, that is, false information strategically shared on the internet to cause harm, costs the global economy US$78 billion a year, with 84 percent of businesses around the world increasingly concerned. A false rumour could trigger a run on a bank, a sharp fall in share prices, or loss of interest in a company’s products. Global firms like Starbucks, Coca-Cola and Microsoft have been victims of online disinformation. In Starbucks’ case, bogus tweets about the coffee chain giving out free coffee to undocumented immigrants were posted anonymously by a disgruntled individual. For Coca-Cola, false news was circulated that one of its bottled water brands was infested with parasites. And in the case of Microsoft, lies were spread that its game console killed someone. In Africa, where a lot of businesses depend on word-of-mouth, increasingly via social media, fake news could be even more devastating. This is because the continent’s dominant youth population, the main target of foreign and local businesses on the continent, get most of their news from the internet, especially social media. With such internet platforms also providing a very easy and relatively cheap means for users to weigh in on the news, it takes very little for any news or information of interest, whether true or not, to become dominant. Consequently, it is also easy for information to be manipulated to mischievous ends. Thus, online disinformation is increasingly a matter of great concern for African businesses as well. While I use the terms “online disinformation” and “fake news” interchangeably, the latter is considered by some in academia to be inadequate; albeit either one is a form of

“information pollution” or “information disorder”. The appropriation of the term “fake news” by politicians to describe news they disagree with is one reason why. More importantly, my focus is online disinformation, which is the sharing of false information on the internet with the intention to do harm, as opposed to misinformation, which similarly involves sharing false information but with no intention to do harm. Much of the emphasis on online disinformation in the literature relates to politics. Online disinformation has been attributed for the victory of American president Donald Trump in the 2016 elections, for instance. Brexit, the exit of the United Kingdom from the European Union, would probably not have succeeded without fake news, it is believed. There have also been instances of foreign attempts to influence some African elections via social media. But even as businesses are increasingly targets of disinformation, with sometimes devastating consequences, there is relatively less focus on their predicament in the literature and media; more so with respect to African firms. I aim to fill this gap by answering the following questions: How are African firms or foreign firms operating on the continent dealing with online disinformation? What strategies are most effective in combating corporate fake news in Africa? And what are the pitfalls African firms should avoid with respect to online disinformation? The internet enables fake news…and platforms are best suited to curb it Internet platforms make it easy for fake news to spread quickly in unprecedented ways. This is because there is little or no bar-

rier to entry and internet platforms do not do as much as they should and could to combat online disinformation because of the economic benefits. “Fake news and other forms of information corruption have been perennial features of Google and Facebook’s online environments…[with]…countless examples of disinformation that survived and even thrived because it fulfilled economic imperatives”. According to Stengel (2019), social media platforms “benefit just as much from the sharing of content that is false as content that is true”. Even so, Zuboff (2019) asserts social media platforms have the tools to block fake news. Having failed to diligently self-regulate, however, there are growing calls for direct regulation by the authorities. Interestingly, even big tech would not mind being regulated now – after much resistance hitherto – and have suggested frameworks that they reckon would be effective or perhaps self-serving; depending on who you ask. In mid-February 2020, Facebook chief executive Mark Zuckerberg called for regulation in four key areas: elections, harmful content, privacy and data portability. Of course, it is

probably smart on his part to pre-empt what is increasingly inevitable. Regulators, like the European Union, do not find his proposals to be far-reaching enough, however. In any case, various internet regulatory regimes are being explored around the world. In the United Kingdom for instance, broadcasting regulator Ofcom has been handed an expanded role as internet watchdog, to predictably, some pushback from big tech firms; albeit it is still trying to figure out how it would do so effectively. A global internet regulatory framework, especially in regard of online disinformation, would probably be required at some point. Edited version of article was first published by Nanyang Business School’s NTU-SBF Centre for African Studies. References available via link viz. https//nbs. ntu.edu.sg/Research/ResearchCentres/CAS/ Publications/Documents/NTU SBF%20 CAS%20ACI%20Vol.%202020-17.pdf “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @DrRafiqRaji)”

Coronanomics

he above is an interesting coinage of what are envisioned was going to be the topic of this article. Temple Asaju of Channels Television had come to interview me at home on related issue and I mentioned to him that I was contemplating an article on the Nigerian economy today under the rampaging Coronavirus; what steps we have taken so far for containment, its consequences on the economy, what was left to be done and the outlook, when he suggested the above title. And I have now since realised that it is word that is gaining traction as being generally accepted going forward. We are all now in uncharted waters as we discuss. It is almost surreal. How do you begin to get yourself into a frame of mind to discuss an economy when all the countries of the world with insignificant exceptions are facing the same situation of a lockdown of their respective economies? When the challenge is the same; that of saving the life of the populace as the toll is now so massive, unrelenting, furious and scary as we pray for curve to begin to flatten? In Nigerian on Thursday, April 9, 2020 the gruesome moving statistic indicate that the country has 276 confirmed infections, 6 deaths with 44 so far discharged. We are not to be complacent as most of the countries today with frightening number of daily deaths; up to 800 deaths a day were at some point in time at the same stage as we find ourselves now. Another feature which makes this pandemic worrisome is that an infected person could be without symptoms while actively spreading the virus. As should be expected some concern has

been voiced that maybe we could have acted a bit earlier than we did. Be that as it may it is correct to note that once we took off, we did so with speed. The Central Bank to its eternal credit was at the forefront as it galvanised action to contain the pandemic. The Governor led private sector interest to rally round as humongous sums of monies were pledged towards confronting this enemy virus even as the Central Bank itself followed up rapidly with targeted funds to reach out to the more vulnerable sectors of the economy. A whopping amount of N1.1 trillion was indicated as intervention funds for support of the critical sectors of the economy; local manufacturing and those engage in areas that could foster import substitution and for those in the health sector; laboratory, researchers and innovators. There was also N50 billion targeted credit for Small and Medium scale enterprises, for households badly affected by the virus whereby a maximum loan of N25 million for SMEs was imposed at a low interest rate of 5 percent with repayments scheduled to align with the particular characteristic of the cash flow of the business. The problem with the targeted funds has always been that potential beneficiaries encounter the brick wall in attempting to access them. In view of the obvious urgency now we appeal that the Central Bank should go the extra distance in ensuring that the funds reach the hands of those who are able to deploy them profitably to jump start dormant activities in the economy. The particular advantage of investments arising therefrom is that they are more reliable as they have the potential of changing the

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lives of the beneficiaries positively. In response to prevalent market conditions the Naira exchange rate was allowed a 15 percent loss in value to debut at 360 from the previous 305 exchange rate to the dollar. The rate differential with the parallel market and the Investor/ Exporter window could not be wiped out which could have been the preferred outcome. The rates remain the significant distinguishing features of the various windows. Obviously in this crisis situation it will be unrealistic to worry now about the economic fundamentals of inflation, interest rates and exchange rates. The Quantitative Easing across board in many affected countries as they provide palliatives would most certainly cause spike in inflation. But let’s achieve containment; preserve lives and thereafter there will be plenty of time for such routine also other important concerns to be taken on board. Someone joking remarked that for once the Fiscal and Monetary authorities are pulling in the same direction. Well that is as it should be as there is only one direction to pull now which is against the pandemic. The Fiscal authorities have risen to the occasion with cash transfers which has generated some controversy regarding the spread of the beneficiaries and some even complained that the knowledge of the scheme as it operates is quite limited. There are issues regarding transparency surrounding the scheme which have caused eye brows to be raised when the office of the Accountant General of Federation was up in suspicious flames as the National Assembly started asking

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Boniface Chizea about records to back the alleged humongous outlay on the scheme. The lessons from this experience is that this country should have long ago gotten to a stage whereby something like unemployment benefits are institutionalised. The fact remains that most of those in leadership position are not sensitised to the fear of insurrection by the down trodden which would end up engulfing all concerned. Otherwise it is in the enlightened interest of all to encourage the establishment of such welfare schemes and this I suppose should be one of the major takeaways from this pandemic. Former Vice President, Atiku Abubakar has made every reasonable recommendation which is endorsed by a majority of the informed amongst the population that developing countries ravaged by the pandemic should stand on the moral high ground to demand debt forgiveness from the West. Afterwards the infection arrived our shores by those infected who have visited overseas countries.

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Tuesday 14 April 2020

BUSINESS DAY

EDITORIAL Frank Aigbogun

Past policy inconsistencies will weigh on Nigeria’s recovery

editor Patrick Atuanya

After the contagion, the government must stay the course of reform

Publisher/Editor-in-chief

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

olicy uncertainty and inconsistency has been a major culprit among several fundamental factors that have kept both local and foreign patient capital away from the Nigerian economy, it is the reason why investors take speculative positions in the capital markets and why a chunk of our foreign reserves is flighty. Investors worry about the inability of the Nigerian federal government to maintain clear and consistent policies pursued when a crisis happens, only to revert post crisis. This behaviour is not market friendly and must stop if we must advance as an economy. The current COVID-19 pandemic has forced the Nigerian authorities (fiscal and monetary) to roll out policies in a bid to ameliorate the impact of the virus on the economy. Recently, the NNPC announced there will be no more subsidy, and how a new “price modulation” mechanism will be used to ensure that they do not have

any under-recovery. This is not a new development in the history of Nigeria. Subsidy removal has always been a response to a crisis, say, when oil prices plummet, and yet after the crisis, it is reversed when prices begin to trend upwards. A refusal to fully deregulate the downstream sector, put an end to price fixing, is a refusal to open up the space for private investment which would spur healthy competition and growth in the industry. The Central Bank of Nigeria too is very much guilty of policy inconsistencies. Especially its defend-the-naira-at-all-cost strategy. Recently, the CBN devalued the naira (it says it was adjusted) to N360/$1 from N306. It also allowed the rate at the Importer and Exporters (I&E) window to adjust to N380 in response to market developments. However, are there any institutional changes to guarantee that when this crisis is over, the CBN won’t revert this policy? Every economy runs basically on two wheels; the trade

wheel and the liquidity wheel. Prior to the outbreak of the novel coronavirus, COVID-19, in the fourth quarter of 2019, the global market was flooded with cheap capital due to the large liquidity injections by the central banks of the US, the UK and EU. Smart and proactive economies joined the race to attract these cheap sources of capital while Nigeria slacked, its policies weren’t perceived as favourable. Now with the outbreak of COVID-19, not only has the pandemic depressed export, it has halted production and claimed lives in their thousands. It has also increased further liquidity glut in the global economy as governments across the world respond to the crisis by throwing money at it. Here could be another opportunity for Nigeria to get its fair share of the glut, but her weak fundamentals make this at best a mirage. Standard & Poor (S&P), a rating agency, lately downgraded Nigeria from stable to negative on the back of the country’s weak buffers. Likewise, the Internation-

al Monetary Fund (IMF) revised downwards Nigeria’s growth forecast from 2.5 percent to 2 percent. It predicts that inflation is likely to increase while terms of trade and capital outflows will make our external position more vulnerable. Hence, the need to grow revenue. Oil prices are still depressed, Mexico is yet to accept the oil production cuts agreed at last week’s OPEC plus meeting to shore up its dwindling sources of revenue. While Nigeria borrowed recklessly when oil prices were stable, it doesn’t have such luxury today given its weak earnings, besides the proportion of its revenues spent on repaying debt has ballooned. Nigeria must unlock value from its dead assets. The federal government owns stakes in companies, owns lands and other assets which are wasting away and can be unlocked to attract foreign capital. These assets can be sold, securitised or leased. Above all policy clarity and consistency are paramount to boost investors’ confidence.

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Tuesday 14 April 2020

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

CONSUMER GOODS

Flour Mills of Nigeria lists N20bn bonds on NSE SEGUN ADAMS

he Nigerian Stock Exchange (NSE) has listed two bonds of Flour Mills of Nigeria Plc (FMN) worth about N20bn. The bonds listed are N12.499bn 3-Years 10 percent Series 3 (Tranche A) Fixed Rate Senior Unsecured Bond due 2023; and the N7.5bn 5-Year 11.10 percent Series 3 (Tranche B) Fixed Rate Senior Unsecured Bond due 2025. The bonds were issued by Flour Mills of Nigeria Plc under the N70bn Bond Issuance Programme. According to the NSE, the Bonds both Tranche A and B of Series 3 were 100 percent subscribed. The listing of the bonds on NSE would provide deeper liquidity for the instruments allowing investors to trade them. Peter Gbededo, Group Managing Director, Flour Mills Nigeria Plc, said the response from the market vindicates the company’s decision to have taken the additional step in diversifying its financing options beyond

short-term commercial bank debt. “We are delighted to return to the capital market with such a successful outing, especially with the level of interest shown by investors,” said Gbedebo. “Furthermore, we are excited about the role NSE is playing in deepening secondary market liquidity thus aligning our market with

international best practices, and we look forward to enjoying the benefits of these efforts in our short and long-term instruments.” The series 3 Tranche A and B were issued 27 February but the former will mature 27 February 2023 while Tranche B will mature 27 February 2025. Offer for the bonds opened

3 February 2020 and closed 14 February 2020, according to information provided by the NSE. The NSE on Thursday also listed Primero BRT Securitization SPV Plc N16.5bn series one, 17 percent fixed-rate bonds due 2026 under the N100bn Medium Term Bond Program of Primero BRT Se-

Femi Gbajabiamila (m), speaker, House of Representatives; Ndudi Elumelu (l), minority leader, and Yusuf Tanko (r), chairman, House Committee on Health Services, at an interactive meeting between the House Committee on Health Services and the Nigeria Centre for Disease Control (NCDC) to ascertain the Nation’s level of preparedness against Coronavirus outbreak in China at the National Assembly, Abuja.

Households prefer higher interest rates to inflation

igerian households prefer higher interest rates to higher inflation as seen in inflation attitude survey for the first quarter of 2020 by the Central Bank of Nigeria (CBN). In the survey, respondents were asked to choose between raising interest rates in order to keep inflation down and keeping interest rates down to allow prices to rise. Consequently, 30.4 per cent preferred interest rates to rise in order to keep inflation down while 32.8 per cent said they would prefer prices to rise faster, 36.8 percent of the respondent had no idea. The Q1 2020 Inflation Attitudes Survey was conducted during the period February 24th –March and 3rd April, 2020 from a sample size of 2070 households randomly selected from 207 Enumeration Areas (EAs) across the country, with a response rate of 99.8 per cent. Responses on what the impact of a rise in interest rates in the short and medium terms would have on prices showed that 54.2 per cent thought a rise

the requisite measures to guarantee that our staff can provide requisite support, our stakeholders are able to conduct business digitally, and that all relevant information continues to flow into the market to spur capital market activity during the COVID-19 pandemic,” Onyema said. To comply with the Federal Government’s directive for financial and capital market operators to maintain skeletal operations amid state-wide lockdown in Lagos, the NSE activated its business continuity plan to ensure the safety of workers and market participants. It also restricted access to its offices to essential staff who ensure smooth remote trading and provide remote technical support to Dealing Members and continue to provide remote access to listed companies and issuers. “The ability of our financial and money markets to continue to operate during this crisis is testament to a well-functioning economy,” said Oscar Onyema, CEO of the NSE.

LOGISTICS

ECONOMY

HOPE MOSES-ASHIKE

curitization SPV Plc. Primero BRT’s bonds were also 100 percent subscribed. Amid the ongoing coronavirus pandemic, CEO Oscar Onyema has assured that the stock exchange has put in place the necessary mechanisms to support capital market activities. “We have put in place

in interest rates would make prices in the street rise slowly in the short term, as against 5.4 per cent that disagreed. While in themedium term, 52.2 per cent agreed that a rise in interest rates would make prices in the street rise slowly, 6.9 percent disagreed. Since June 2009, the statistics department of the CBN conducts the inflation attitudes survey on quarterly basis, to sample the views of households on how they view the price changes of goods and services in the last twelve months, and their expectations of price changes over the next twelve months. Respondents’ opinions were used to explore the general public’s understanding of monetary policy framework. This is because inflation expectations and public understanding of what influences them are important parameters for successful monetary policy formulation. Good estimates of inflation expectations and the level of public understanding of the underlying factors would assist the Bank to assess the impact of its efforts in maintaining

price stability in the Nigerian economy. Respondents were asked what would become of the Nigerian economy if prices started to rise faster than they do now. The survey result showed that 56.3 per cent of the respondents believed that the economy would end up weaker, 7.6 per cent stated that it would be stronger, 20.7 percent of the respondents believed it would make a little difference, while 15.4 per cent did not know. The responses showed considerable support for price stability, as majority (56.3 percent) agreed that the economy will end up weaker. This is consistent with the notion that inflation constrains economic growth. The CBN’s staff projections indicate that real GDP in Q1 and Q2 2020 will slow because of the tepid global demand, resulting from the recent outbreak of COVID-19, depressed global aggregate demand and supply, and the oil price war which has resulted in supply glut and decline in crude oil prices. “This muted outlook for the

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first half of the year may thus, dampen overall growth prospects for 2020,” said Godwin Emefiele, governor of the CBN. When asked how prices have changed over the past 12 months, respondents gave a median answer of 3.6 per cent. Of the total respondents, 13 per cent thought prices had gone down or not changed, 57.6 per cent felt that prices had risen by at least 3.0 per cent, while 27.8 per cent felt that prices inched up by more than 1.0 per cent, but less than 3.0 per cent. Those that had no idea were 1.7 percent. The median expectation of price changes over the next 12 months was that prices would inch up by 3.2 percent. From the total responses, 51.3 percent of the respondents expected prices to rise by at least 3.0 per cent over the next 12 months, 24 per cent expected prices to increase by more than 1 percent, but less than 3 percent. However, 22.1 per cent of the respondents were optimistic that prices over the next 12 months would either go down or remain the same.

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Red Star assures customers of ongoing operations amid lockdown IFEOMA OKEKE

ed Star E xpress Plc, one of Nigeria’s foremost logistics solutions providers, has assured clients and customers that it is able to make deliveries during the lockdown currently being observed i n va r i ou s p a r t s o f t h e country. According to Sola Obabori, the company’s Group Managing Director, the company is able to facilitate deliveries of essential items, such as groceries and medication, within the cities. “Despite the lockdown being observed in various cities across Nigeria, Red Star E xpress Plc is still able to deliver groceries and me dication w ithin the cities. Our couriers are available to pick up and deliver all essential items during this period. “Even though our centres have been closed for the time being, our cus@Businessdayng

tomer ser vice lines are still functional for customers to call and request for pick-up and delivery. Moreover, customers can make use of the Online Shipping platform on our website to order pick-up and deliver y from the comfort of their homes,” he added. Obabori also stated that while restrictions in international movements h av e h u g e l y i m p a c t e d on deliveries of international shipments, work is ongoing to ensure that the challenge is resolved in the nearest possible future. “O n a re g u l a r b a s i s, restrictions on international travel are having an effect on international deliveries. We are monitoring to ensure that we find solutions to making regular international deliveries as soon as norm a l c y i s r e s t o r e d . We are hopeful that this can be made possible in the nearest possible future,” he stated.

Tuesday 14 April 2020

BUSINESS DAY

COMPANIES&MARKETS

Business Event

OIL& GAS

Axxela Donates Life-saving Medical Supplies to Lagos State Government DIPO OLADEHINDE

xxela Limited has made a multimillion naira donation of 5,000kg of medical oxygen to Lagos St at e G ove r n m e nt, t h e epicentre of Nigeria’s fight against deadly coronavirus. Speaking on the initiative, Ax xela’s CEO, Bolaji Osunsanya said “As an economic enabler, we have taken active steps to engage the government on pain points, and the seamless synergy between the private and public sector will help us overcome this crisis. A s a n e s s e n t i a l s e rvices provider, Axxela has ensure d that our business enterprise continues to function optimally to p rov i d e u n i n t e r r u p t e d natural gas supply to critical businesses and infrastructure. Accordingly, we have prioritised natural gas supply to power plants

that supply electricity to medical facilities, as well as industrial producers of fast-moving consumer goods critical to the wellbeing and sustenance of many during this period.” With 20 years of business operations in Nigeria and its expansion to West African region, Axxela has built a culture of safety and a reliable reputation of empowering industries and communities by delivering value-adding energy solutions for socioeconomic growth and empowerment. According to Axxela’s Community Relations and Security Manager, Aloiye Aigbonoga, the donation is part of Axxela’s holistic contributions to curtail the spread of the Coronav i r u s i n Ni g e r i a. He said, “As the world deals with a rapid infection rate, w e have a responsibil ity to buckle down and collaborate effectively to fight against the raging pandemic. We applaud the

leadership of our state and federal governments and the Nigeria Centre for Disease Control (NCDC), the selfless endeavours of all. Recall, President Muhammadu Buhari announced a sum of N10 billion grant to Lagos State, being the epicentre of the virus, while N5 billion was allocated to the National Centre for Disease Control (NCDC). While other corporate organisation such as Access Bank, Zenith Bank and Guaranty Trust Bank gave N1 billion each with facilities for isolation center. Other individuals who have donated N1billion each include Aliko Dangote, Tony Elumelu, Femi Otedola, Abdulsamad Rabiu, Herb er t Wig w e, Segun Agbaje, Tim Ovie and Emmanuel Lazarus who gave N2 billion, while Atiku Abubakar gave N50 million and N10 million from Tuface Idibia.

L-R: Nkechi Ejesi, corporate communication and sustainability manager FrieslandCampina WAMCO; Olayiwole Onasanya, permanent secretary, Lagos State Ministry of Agriculture, and Ojeawe Ajulo, corporate social responsibility manager, FrieslandCampina WAMCO, at the presentation of Peak and Three Crowns milk cartons to support over 100,000 families in low-end communities and vulnerable groups in Lagos State in the fight against COVID.

L-R: Dayo Lagide, director, grant management, Lagos State Ministry of Health; Ituah Ighodalo, senior pastor, Trinity House; Moyo Adejumo, director, pharmaceutical services, Lagos State Ministry of Health, and Stella Olurakinyo, pastor, Trinity House, during the presentation of relief materials to Lagos State COVID-19, lead by the senior Pastor Trinity House, in Lagos.

APPOINTMENTS

NEM announces key changes to Board SEGUN ADAMS

EM Insurance has announced the appointment of two Non-Executive Directors to its board, a move that would add to the wealth of knowledge and experience of the board and add value to the Company, the insurer said on Wednesday. In a n o t e t o t h e Ni g e r i a n St o ck E xc ha ng e (NSE), NEM said its Board of Directors has unanimously approved the appointment of Papa Madiaw Ndiaye and Kelechi Okoro as Non-Executive Directors of the Company subject to regulatory approvals from the National Insurance Commission. “The Board and Management of NEM Insura n c e Pl c a re c o n f i d e nt that the wealth of knowledge and experience they bring will be a great addition to the Company,” the insurance company said. Papa Madiaw Ndiaye is the Chief Executive Officer and Founding Partner of AFIG Funds, a fund manager focused on

growth and equity investments in West, Central and East Africa. He is also the Chairman of the Funds’ Investment Committee. Prior to AFIG Funds, he was one of the founding partners of Emerging Markets Partnership (EMP) in Washington (now ECP). Prior to joining EMP, he held s e n i o r re s p o n s i b i l i t i e s for IFC’s equity and debt investment activities in capital markets and fina n c i a l i n s t i t u t i o n s i n Africa between 1996 and 2000. He spent the early part of his career at Salomon Brothers and joined J P M o r g a n ’s E m e r g i n g Markets Group in 1992. In 2000, He was named Special Advisor for Economic and Financial Affairs to the President of the Republic of Senegal and Chairman of the Senegalese Presidential Economic and Financial Advisory Council. He serves on the boards of several African companies and non-profit organizations pertaining to Africa. He graduated from Har vard College with a Bachelor’s degree in Ecowww.businessday.ng

nomics. He holds an M.A. in International Affairs f ro m t h e U n i v e r s i t y o f P e n n s y l v a n i a’s L a u d e r Institute, and an M.B.A. from the Wharton School of Business. On the other hand, Kelechi Okoro is a Partner at AFIG Funds. He is responsible for sourcing, executing and managing investments for the funds under management. Prior to joining AFIG Funds in 2013, He was at Argentil Capital Partners where he originated and executed infrastructure transactions. Prior to Arg e ntil, h e w orke d w ith t h e In f ra s t r u c t u re a n d Natural Resources Group of the International Finance Corporation (IFC), and at ARM Investment Managers (with ~USD 2bn AUM), both in Nigeria. He holds a Bachelor’s in Human Physiology from the University of Ibadan, and an M.B.A. from Lagos Business School. NEM has declined some 14% so far in the year. However, the insurer is outperforming the broad mark et down 21% as at Wednesday.

L-R: Nwosu Chizibere, student, Holy Trinity College (HTC); Olorunfemi Tomiwa, student, HTC, Lagos; Toki Mabogunje, president, Lagos Chamber of Commerce and Industry (LCCI); Adewole Moyinoluwa Patricia, student, HTC; Asuku Favour, student, HTC, and Celine Onwukwe, teacher, HCC, during a courtesy visit of the School to the President of the Lagos Chamber of Commerce and Industry at Commerce House, Victoria Island, Lagos.

L-R: Olumide Bolumole, head, listing business division, The Nigerian Stock Exchange (NSE); Oluwaseun Johnson; Emeka Nwagboso, acting executive director, Project Pink Blue; Ebunola Anozie, president/CEO, COPE Foundation; Bola Adeeko, head, shared services division, NSE; Eno Essien, chief executive officer, Rheytrak; Abigail Simon-Hart, co-founder, Bricon Foundation; Chuks Igbokwe, and Omolola Salako, founder, Sebeccly Cancer Care, during the Closing Gong Ceremony to commemorate the World Cancer Day at the Exchange

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Tuesday 14 April, 2020

BUSINESS DAY

Media business

For 78 days, Covid-19 issues continue to shape media reports in Nigeria Daniel Obi

ovid-19 has dominated the attention of most media new channels in Nigeria for consecutive three months. It will likely continue to dominate for more weeks as the issue is of global and national concern, upending global economy. Media news channels, from print, broadcasting to social media in Nigeria are leading with stories on Covid -19 after 78 days the virus entered Nigeria. The first case of coronavirus was confirmed by Federal Ministry of Health on February 27, 2020 after the outbreak of the virus in China early December, 2019. In fact, no issue, perhaps in a long time has attracted the attention of the media for such duration than the present pandemic which has killed over 100,000 globally with America accounting for over 20,500; Italy over 19,000; Spain 16,000; France 13,000; UK, 9,000; China 3,000; Iran 4,000; Nigeria

10; Ghana 8; Niger 11; South Africa 25; Egypt 146; Morocco 111 and Algeria 275 deaths. Boko Haram which has killed nearly 30,000 people with more than two million people displaced, according to report monitored in Aljazeera does not even get information in some media or has been played down in other news channels unlike the Covid -19 which the media has continued to feed on

for three months. Most writers and broadcasters, even in different fields are taking their issues from the perspective of Covid -19. This according to an analyst, it is to remain relevant as Covid -19 is topical with global attention which is also affecting Nigeria economy and private business. Since the outbreak of the virus mid- December, 2019 in China, media consumption

has increased according to a study by Kantar, a global firm that characterizes itself as “data, insights and consulting company”. The firm has more than 30,000 employees working in 100 countries in various research disciplines. But among all the media news channels which have gained in usage, traditional nationwide broadcast and newspapers are the most trusted sources of informa-

tion, the Kantar report said. The report said 52% of the 25,000 consumers across over 30 countries polled identified traditional media (broadcast and newspapers) as ‘Trustworthy’ source than social media. “Government agenc y websites are regarded as trustworthy by only 48% of people, suggesting that government measures are not providing citizens around the world with assurances and security” while social media platforms are regarded by only 11% of people as a source of trustworthy information. Companies are also leveraging the increase in media consumption to promote their brands, tying their media activity to Covid -19 campaigns. Meanwhile, the overall media coverage of COVID ’19 by Nigerian media has been scored high by communication experts who underlined the exhibited professionalism and balanced stories about the pandemic. However some analysts still believe that more is still needed from the media to

WFA appoints Acting ADVAN President as VP

BD Brand Talk

Social versus physical distancing: Lessons for brands Mike Umogun

n a TED talk a few years ago, Susan Pinker a psychologist, author and social science columnist for The Wall Street Journal and former weekly columnist for the Globe and Mail, and the New York Times drew our attention to the secret of living longer citing 2 scientific works. The 2 studies cited by Susan for her conclusions are the following: a) “Social relationships and mortality risk: A meta-analytic review,” HoltLunstad, Julianne, Smith, Timothy R., and Layton, Bradley J, PLOS Medicine, 2010 and b) “Loneliness and Social Isolation as Risk Factors for Mortality,” Julianne Holt-Lunstad, Perspectives on Psychological Science, 2015. These studies were meta-analytical reviews conducted to determine the extent to which social relationships and social isolation influence risk for mortality. They clearly and rightly show that the quality and strength

of the social relationships, social integration and social isolation that we experience are key determinants and predictors of premature death. According to the reviewer of the study, Susan Pinker and the researcher Julianne HoltLunstad, these are the 10 things we need to do to live long :Exercise Regularly, Indulge in social interaction, Maintain Close Relationship, Quit Smoking, Quit boozing, Take a flu vaccine, Get cardiac rehab, Main a trim a lean figure, Prevent Hypertension, Take in clean air According to the World Health Organization one of the basic protective measures against the new coronavirus is maintaining physical distance. The WHO says we must maintain at least 1 metre (3 feet) distance between yourself and anyone who is coughing or sneezing. Why? When someone coughs or sneezes, they spray small liquid droplets from their nose or mouth which may contain virus. If you are too close, you can breathe in the droplets, including the

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COVID-19 virus if the person coughing has the disease and a disturbing process of infecting hundreds if not thousands of other persons may follow. However gradual death may occur if you are maintaining social distancing instead of physical distancing. According to Reuters News The World Health Organization is officially advocating against the phrase “social distancing” and it is from here on recommending the phrase “physical distancing” The idea is to clarify that an order to stay at home during the current coronavirus outbreak isn’t about breaking contact with your friends and family — but rather keeping a physical distance to make sure the disease doesn’t spread. The sentiment was echoed by Massachusetts Congresswoman Ayanna Pressley. “I would argue that what we are doing right now is physical distancing, not social distancing,” she said during a town hall today, as quoted by the Dorchester Reporter. “We are creating physical

distance between us to limit the spread of the virus,” she added. “But we should be doing that in the same breath as we are maintaining our social connections and sense of community and common sense of purpose.” Stanford University professor of psychology Jamil Zaki also argued that we should cut it out with all the talk about “social distancing”. “We should think of this time as ‘physical distancing’ to emphasize that we can remain socially connected even while being apart.” “Social distancing is vital to slowing the spread of COVID-19, but it also pushes against human beings’ fundamental need for connection with one another,” Zaki added. “Ironically, the same technologies we often blame for tearing apart our social fabric might be our best chance, now, of keeping it together.” The term social distancing has been made popular by the media and this is not what we need at this time. Brands and individual need to practice physical distancing while encouraging social interaction

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dig deep and interrogate certain actions or inactions to slow the progress of the pandemic which has tested national systems including the health sector and Nigeria’s preparedness to such sudden developments. “The media has lived up to expectations of the public”, says Charles Igbinidu, Managing Director of CFO and Associates Public Relations. He agrees that though there is a level of tension over avalanche of information but said without the information more Nigerians would be ignorant about the disease. To the CEO of Neo Media, Ehi Braimah, the coverage has been appropriate and professional excluding the fake news dwelling on inaccurate COVID’19 myths. In his comment, John Kokome, a public affairs analyst also agrees that the Nigerian media is doing its bets within the circumstance it has found itself but said that the media can do more by digging deep to uncover question Nigerian government preparedness to such occurrences.

and close relationship. The WHO has noted that part of what we need to get out of this pandemic is social solidarity and communal support. Connection need not be physical ours is a wired world and a global village. So how should brands do this? The FMCG companies and others should take a cue from the banks, insurance companies and even schools by reaching out to their customers direct during this critical time. Showing empathy, sharing mini gift items and sharing useful and authentic information at this time could be a nice way of social interaction and close relationship. We should deplore all our social media arsenal (What’s app, Instagram, Face Book, LinkedIn and Podcasting) to create a closer social rapport with our employees, customers and consumers. No to social distancing and yes to physical distancing.

Michael. Umogun @kantarmillwardbrown.com @Businessdayng

he World Federation of Advertisers (WFA) at its Executive Council Meeting has unanimously appointed Bunmi Adeniba a member of the global leadership team as vice president. Adeniba, the Acting President of The Advertisers Association of Nigeria, will take up the role Regional Vice President overseeing the Africa Operations of the WFA. The WFA regional Vice President is responsible for coordinating the regional network of Advertisers in Africa. In a statement, Stephan Loerke Chief Executive Officer of the WFA said that Adeniba as the head of its Africa operations would drive the WFA programs in Africa, which essentially was to help advertisers improve the effectiveness and efficiency of their marketing communications through benchmarking, and sharing of knowledge, experiences and insights. Adeniba in her response said that she was honoured to have been nominated for the role.

Tuesday 14 April 2020

BUSINESS DAY

INSIGHT

COVID-19: FAQs for businesses

s the world battles the outbreak of C OV I D - 1 9 , w e understand that our clients are faced with unprecedented legal challenges as it relates to their businesses, which understandably raise several questions that require urgent answers. Our team of lawyers has provided several frequently asked questions and answers that may prove useful to businesses in these times. Please note that our responses below are not to be considered as legal opinions, as such will be dependent on specific fact patterns. Should you require tailored and specific answers to your business questions, please do not hesitate to reach out to any member of our team. EMPLOYMENT

Yimika Phillips yphillips@olaniwunajayi.net

Olaniran Osotuyi oosotuyi@olaniwunajayi.net

Ivie Erediauwa ierediauwa@olaniwunajayi.net

Can an employer require an employee to notify the company if they have been exposed, have symptoms, and/or have tested positive for the COVID- 19 virus? An employer can and should require an employee showing symptoms while in the workplace to notify their supervisor, and such employees should be directed to remain at home until they are certified by a medical practitioner to be non-infectious in accordance with the health manual published by the organisation or the WHO prescriptions on COVID-19. Employers can likewise require employees who begin exhibiting symptoms outside the workplace, to contact the company by telephone or email. Is an employer legally required to notify its employees if a member of its workforce is tested positive for COVID-19 virus? An employer is under no legal obligation to notify its employees if a member of its workforce is infected with the COVID-19 virus. However, in compliance with best practices, an employer should disclose this information to its workforce by notifying its employees that there has been a confirmed case of COVID-19 within the organisation, whilst ensuring that it does not disclose any details from which the individual may be identified. It is crucial to recall that an employee’s health status is personal data, and is thus protected under the Nigeria Data Protection Regulation. Can an employer be legally compelled to notify the state and/or federal health minwww.businessday.ng

istries, either proactively or in response to a request from the ministry or other government agency in case an employee is infected with the COVID-19 virus? An employer is under no legal obligation to report either a suspected or confirmed case of COVID-19 to the health ministries. However, where this information is requested directly by the health ministries, the employer may be required to disclose such relevant information to avoid obstruction of the agency’s duties as it relates to curbing the spread of the virus under the relevant laws or regulations. Nonetheless, in disclosing this information, the employer must act with the knowledge that the health status of an employee is personal data as contemplated under the Nigeria Data Protection Regulation. As such, the employer may not disclose more information about the employee than is necessary at any given moment. Is an employer legally obligated to shut down its place of work if an employee tests positive for the COVID-19 virus? There is no legal obligation on an employer to close a place of work if it is discovered that an employee is infected with the COVID-19 virus. However, the employer owes a duty of care to its employees, contractors and visitors to the premises, in relation to health and safety. As such, in the event that an infected employee is discovered, the employer must take all reasonable and practicable measures to ensure that the work environment is cleaned in accordance with WHO standards, and does not constitute any risk to employees, contractors and visitors. This may include temporarily closing the place of work until all health and safety activities have been completed. Additionally, pursuant to the provisions of the Quarantine Act 1954, the President and/or state governors are authorised to make Regulations to curtail the spread of any infectious disease. In the event that any directives or orders made pursuant to these Regulations compel the closure of a workplace that has been visited by an infected employee, that employer will be obligated to comply. Are there any potential legal issues arising from enforcing work-from- home policies during the period of the COVID-19 outbreak? Based on the advice of the Federal Ministry of Health, as

well as the NCDC, the President of the Federal Republic of Nigeria directed a cessation of all movement in certain parts of the country for an initial period of fourteen (14) days – with effect from 11pm on Monday, 30th March 2020. The natural consequence of the Presidential order is that all employees within the areas on lock-down will be required to work from home for the duration. As such, there are no complex issues arising therefrom. Notwithstanding the above, even where such a government mandated lockdown is not imposed, an employer will have good grounds for requesting all employees to work from home, in the interest of ensuring the health and safety of employees, contractors and visitors. Can an employee’s quarantine or self-isolation period be deducted from his or her annual leave or sick leave? Generally, an employee is entitled to his or her annual or sick leave as set out in the contract of employment, the company’s handbook or where applicable, collective bargaining agreements. Thus, where an employee, due to an infection or fear of an infection, is in quarantine or self-isolation, such can only be said to form part of the employee’s sick leave, but not his or her annual leave. Can terms of employment be renegotiated during this period of the pandemic? Given the exigencies of the pandemic, an employer may initiate renegotiations of employment terms with its employees during this period. However, any unilateral variations of the terms of employment by the employer could be deemed to be a breach of contract or constructive dismissal of the employee in question. Can an employer unilaterally reduce the salaries of its employees during this period of COVID-19 outbreak? Except agreed upon in the contracts of employment, an employer cannot unilaterally reduce the salaries of its employees. Such reduction can only be done with the consent of the employees, which must not be tainted by any vitiating element. Where such reduction is done unilaterally by the employer, it risks facing claims of constructive dismissal or breach of contract. What urgent plans or policies should an employer put in place to mitigate the impact of COVID-19 from an employment perspective?

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ID-19 pandemic, terminate an employee’s contract of employment on the ground of redundancy. The validity of this would however depend on the circumstance of each situation, and compliance with the provisions of the Labour Act in the case of clerical and unskilled workers. Termination by redundancy does not however relieve the employer of its obligations to pay exit benefits to the employees.

The outbreak of COVID-19 does not necessarily mean that a company’s business should totally shutdown. A company can still further its business, albeit in a minimal capacity, during this period of emergency and uncertainty. In achieving this, a company should put in place a business continuity plan and a policy on COVID-19 that would enable the company navigate through the risks of COVID-19, especially from the employment perspective. Essentially, the business continuity plan and the COVID-19 policy would contain policies that would keep employees safe whilst at the same time discharging their duties to the company. These would typically include policies on remote working and virtual meetings, among others. Can an employer unilaterally reduce the working hours of its employees and pay them on the basis of the reduced hours so as to manage the business impact of COVID-19? An employer is at liberty to reduce the working hours of its employees. However, such reduction of working hours cannot result in the reduction of the agreed salaries and other payments that employees are entitled to; except where there is an express provision in the contracts of employment to that effect. Accordingly, any reduction of working hours that would affect the salaries of employees must be done with the consent of the employees. Are employees still entitled to full salaries if they are unable to work at all during the COVID-19 outbreak? Employees will be entitled to their full salaries notwithstanding their inability to work @Businessdayng

during the outbreak. However, where the contract of employment envisaged an emergency such as COVID-19 and provides that salaries shall not be full, an employer would have a basis for not paying full salaries. Can an employer suspend its obligations under the employment contract during the period of the COVID-19 outbreak? An employer is liable for its obligations under an employment contact and cannot suspend same unless voluntarily agreed to by its employees. A unilateral “suspension” may be challenged as constructive dismissal. Where the ongoing obligations of the employer may be prohibitive, the employer may terminate the contracts of employment in accordance with their terms, with an undertaking to re-engage affected employees after the pandemic, where the company is financially able to do so. Are employees still entitled to all employment rights even though they are working remotely or not working at all?

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Based on the advice of the Federal Ministry of Health, as well as the NCDC, the President of the Federal Republic of Nigeria directed a cessation of all movement in certain parts of the country for an initial period of fourteen (14) days – with effect from 11pm on Monday, 30th March 2020

Employees are entitled to all employment rights even though they are working remotely or not working at all. However, an employee may not be able to lay claim to benefits such as lunch benefits, official drivers and likewise during the outbreak. Can employers force employees to go on forced paid leave during the government mandated lock-down period? Employers may encourage or persuade their employees to treat the lock-down period as their paid annual leave, in the interest of sustaining the company in the long run. However, employers cannot compel employees to make use of their leave entitlement during this period. Can an employee be disciplined for failing to resume at work for fear of contracting COVID-19? An employer may exercise its disciplinary powers over an employee who fails to resume at work for fear of contracting COVID-19. However, the disciplinary powers may only be exercised if the employer can establish that the employee’s fear was baseless or without merit. Can an employer terminate the contracts of employment of its employees without notice or payment in lieu of notice due to COVID-19 outbreak? Usually, an employment contract would contain a notice period which must be given by either party when terminating the employment contract. Payment can also be made in lieu of the notice agreed under an employment contract. However, where no period of notice is stipulated in an employment contract, an employee is entitled to a reasonable notice or that stipulated under the Labour Act in respect of workers. Notwithstanding the outbreak of COVID-19, an employer cannot terminate the contracts of employment of its employees without giving the requisite notice as agreed, or payment in lieu of the agreed notice period.

Can an employee bring a claim against the employer for getting infected with COVID-19 in the workplace? An employee may bring a successful claim against an employer for getting infected with COVID-19 virus within the workplace if the employee can establish that the employer knowingly or negligently put the health of the employee(s) at risk. An example includes forcing employees to resume to the office despite government orders to stay at home as a preventive measure. REAL ESTATE Can a landlord summarily evict a tenant for being infected with the COVID-19 virus? A landlord cannot summarily evict a tenant for being infected with the COVID-19 virus. However, the landlord is at liberty to terminate any tenancy agreement in accordance with the terms of the contract and the relevant Tenancy Law. Can a tenant/lessee suspend the payment of rent claiming that the COVID-19 outbreak gives rise to a force majeure event? It is possible for a tenant/ lessee to suspend payment of rent on grounds of force majeure, provided that the Tenancy/Lease Agreement permits the suspension of ob-

ligations on the occurrence of such events, and a pandemic such as COVID-19 is provided for as one of such events. Can a tenant/lessee suspend payment of utilities such as Electricity, Water, etc. especially where the premises are shut down as a result of a stay-athome order? A tenant/lessee cannot unilaterally suspend payment of utilities in the absence of a waiver by the landlord/lessor or the Government, depending on whom the obligation is owed to. Notwithstanding, it is envisaged that where the premises are shut down, the tenant/lessee may be able to negotiate a reduction in the service fee for the period where the services were not provided due to the shutdown. Can a landlord prevent the entry of an individual tenant or an employee of a tenant onto its premises as a result of possible infection with the COVID-19 virus? Landlords are not empowered or entitled to do this; however, the tenant is required to comply with the directives of the Government with respect to self- isolation. Where the tenant is an employer, such a tenant has the obligation of taking necessary steps to protect its employees and third parties in accordance with Government directives. What are the additional obligations of landlords and tenants in relation to reducing the spread of the COVID-19 virus in a leased premises? There are no specific extra obligations on landlords and tenants with respect to minimizing the spread of COVID-19. However, all residents are expected to comply with the directives of the Federal and State Governments regarding measures to be taken to reduce the spread of the virus.

What alternative remedies can a tenant/lessee consider if their contract/lease does not entitle them to suspend their obligations on account of force majeure? Negotiations will need to be entered into with the lessor/ landlord regarding possible extension of payment deadlines or waivers, as the common law doctrine of frustration of contract will not be applicable in this instance, given that the tenant/lessee is not being precluded from enjoying the benefits of the lease/tenancy due to some intervening event. Can a landlord/lessor unilaterally decide to close the whole or a part of a building to help stop the spread of the COVID-19 virus? Unless otherwise provided in the lease/tenancy agreement, the landlord/lessor is not ordinarily empowered to unilaterally close a part or the whole of its building except the required notices to quit are issued to the affected tenants/ lessees in accordance with the relevant Tenancy Law or their respective agreements. Can a tenant/lessee unilaterally decide to shut its premises to help stop the spread of the COVID-19 virus? Where the tenant/lessee is the sole occupant of the premises with the right of exclusive possession, they may unilaterally decide to shut the premises. However, where the tenant/ lessee shares the premises with other tenants/lessees, he/she can only unilaterally shut down their own portion of the premises provided this does not impact the rights of the other tenants/lessees. Can the Government order the closure of the whole or a part of a building where infected people reside? By the provisions of the Quar-

Can redundancy be a ground for the termination of employment contract as a result of the COVID-19 outbreak? An employer may due to the COVwww.businessday.ng

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antine Act 1954, the President is authorized to make regulations to prevent the spread of any infectious disease. In this regard, we note that the Regulations passed by the President are silent on this power. However, the Lagos State Government has also passed the Infectious Diseases Regulations which grants the Lagos State Government the power to take steps deemed necessary to curtail the spread of the virus. This may be extended to closure of buildings. What should real estate developers with development loans do in view of the looming slowdown in house purchase uptake? On 16th March 2020, the Central Bank Of Nigeria (CBN) announced a series of palliative economic measures aimed at alleviating the adverse impact of COVID-19 on economic operators, including real estate developers, namely: (a) moratorium of one year on all principal repayments on all CBN intervention facilities; (b) reduction of the interest rate on CBN intervention facilities from 9 to 5 percent for one year; (c) creation of a N50 Billion targeted credit facility for Small and Medium-sized Enterprises (SMEs) impacted by COVID-19; and (d) grant of leave for Deposit Money Banks (DMBs) to consider temporary and time-limited restructuring of the tenor and loan terms for businesses adversely impacted by COVID-19. In this regard, the real estate developers may, so far as it is applicable to them, take benefit of the CBN’s economic palliative measures to mitigate the impact. Alternatively, discussions for a standstill or moratorium on principal and/ or interest may be initiated with the lender(s). How are payments under the contract for sale of land affected if the completion date falls during a period when the lands registries are closed in view of the restriction order? This will vary from one agreement to another depending on the specific terms of the agreement. In a typical sale of land transaction, a purchaser’s obligation to pay the balance of the purchase price is typically tied to completion in exchange for the release of the completion documents. In some circumstances, parties agree that the entire purchase price or a portion of it can be released to the vendor on the completion date upon release of the completion documents to the purchaser. Whilst the @Businessdayng

closure of the Lands Registry may delay the registration of the sale/transfer, it is noteworthy to state that the vendor will receive the purchase price and possession of the property will be given to the purchaser, upon attainment of the completion date. It is only after this that the deed of assignment entered into after the conclusion of the agreement for sale of land will be perfected, including registering at the Lands Registry. As such, the closure of the Lands registry may not necessarily have an impact on payments under the agreement, given that completion can be achieved without the registration at the Lands Registry. How does the current closure of the lands registries and various governmental offices affect completion in various sale and purchase transactions? The parties must consider the following issues in a property sale transaction:(a) as part of the completion obligations, the vendor is required to deduce its title to the land while the purchaser conducts an investigation of title and search at the Lands Registry to ascertain good title to the land; and (b) completion date is not attained until the purchaser has completed the search, satisfied of the vendor’s title and legal estate duly vested in it. Given that the closure of the lands registry may negatively impact the ability of the purchaser to conduct an investigation of title to the land and this potentially affects the attainment of completion date, it is advisable for the parties to discuss a possible extension of time to a more realistic date so as to allow each party to comply with its completion obligations. How does closure of registries affect the handover of possession of the property on a sale transaction? It is market practice for possession of the property to be granted by the vendor to the purchaser upon the payment of the purchase price to the vendor and execution of the formal conveyance. It is therefore unlikely that the closure of the Lands registry will affect the handover of possession of the property to the purchaser. What steps, if any, is the Lands Registry taking to help with the registration of documents that may have statutory or contractual timelines? We are not aware of any measures taken so far. Courtesy: Olaniwun Ajayi LP, Lagos

Tuesday 14 April, 2020

BUSINESS DAY

ADVERTISING Implementation of SOP in Outdoor business more relevant after Covid -19 Daniel Obi

he entry and spread of coronavirus in Nigeria has upended business as many of them are adjusting and adapting to new changes to survive, including cutting of budgets. Already, businesses, prior to this time were hard hit by the tough economic environment which also necessitated adjustments in business actions. The entire advertising industry was not left out from the knocks as operators were owed payments by clients for several months in addition to cutting of budgets with some regulation stifling the industry. Experts have therefore predicted that with low oil price sales at $30 per barrel below $57 projections, adjustment in 2020 budget downwards which will affect capital expenditure across ministries, sluggish growth of the country’s economy at 2.27% compared to 6% in 2014, slow diversification of the economy from oil will all combine to lead to economic slowdown. Prior to coronavirus in Nigeria, practitioners in out of home business who are under heavy operational burden had met to seek solutions to survival and jolt the industry in the face of difficult economy. Among the solutions was to establish Standard Operating Procedure, SOP for the smooth conduct of out-of –home advertising busi-

ness in Nigeria. Implications of the twin effects of coronavirus on business and expected economic difficulties have therefore made any recommendations and their implementations for the survival of the industry more relevant. Sharing the context of Nigeria’s present reality with the practitioners at outdoor stakeholders’ meeting recently, Onyekachi Onubogu, CEO, Frutta Juice and Services told the OAAN members to protect their stake if they consider themselves as stakeholders in the industry. “As stakeholders, we all have a single interest in ensuring that the industry not only survives, but thrives”. He agrees that the marketing and advertising sector in Nigeria is struggling and “that is why we

are concerned about the declining revenue and the problem is if it keeps declining, then we are in trouble”. To deal with certain challenges confronting the industry, especially delayed payment, patronage of non-registered practitioners by clients and regulation, Onubogu sees cooperation among the OAAN practitioners as solution. “Unless we cooperate in the industry, nobody will win and there is no winner when the industry is sick”, he said. Onubogu who wondered why agencies have not taken clients to court for breach of contract, advised them that until they can blacklist clients, “you won’t wield powers. But the only way to do it is if you work together as stakehold-

ers in the industry to create and drive value not just for the clients but for your businesses”. To deal with non-registered members, he said OAAN must create platform and procedures of engagement with clients with spelt out sanctions and that APCON should maintain a list of members that clients must abide for engagement. Speaking at the forum, JoeEugene Onuorah, Deputy Director/Head of Registration and Professional Development at APCON said sometimes OOH may execute jobs haphazardly due to lack of funds thereby distorting the strategy of the campaign and the desired value delivered. “With all the complications engendered by the absence of sustainable terms of engagement, committed to by the parties involved, everyone----the advertiser, buying agency, the OOH operator, and the regulator----loses revenue and value, one way or the other”. He said rather than push the blame for consequential loses, it pays the stakeholders to come together to agree on guiding principles for an out-of-home advertising contract and commit to jointly enforcing the terms of the contract on any defaulting stakeholders. Emmanuel Ajufor, president of the Outdoor Advertising Agencies of Nigeria, (OAAN) said standard operating procedure becomes necessary in order to standardise how the business is being run and to adopt global best practices in the business.

FoodCo introduces same-day home delivery service Daniel Obi

oodCo Nigeria Limited, a diversified consumer goods company w ith interests in retail, quick service restaurants, manufacturing and entertainment, has announced the introduction of its Same-day Home Delivery Service in Lagos. FoodCo Same-day Home Delivery Service offers an alternative shopping channel for customers who would rather shop from home, particularly as a precautionary safety measure in the face of the ongoing coronavirus (COVID-19) pandemic. Deliveries are guaranteed typically with two hours of customers placing their orders, which is the fastest of any available delivery service in Lagos. Ade Sun-Basorun, Chief Executive Officer, FoodCo Nigeria Limited, in a statement made

available to BusinessDay said the Same-Day Home Delivery Service is conceived as part of the brand’s civic responsibility in ensuring that Nigerians have seamless access to essential supplies even as they obey regulatory guidance to stay at home to contain the spread of disease. This is in addition to other COVID-19 response measures taken

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by FoodCo including hourly cleaning of common areas and frequently used shopping items as well as maintaining social distancing in-store. He s t at e d : “ T h e Fo o d C o Same-Day Delivery Service is an easy-to-use, fast and convenient service for customers who would rather shop from the comfort of their homes. The service offer-

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ing has been in development for some time but we made the decision to roll out quickly in response to customer anxiety over running out of supplies in view of the regulatory advice for people to stay home to stem the spread of the virus. “As a retail company, FoodCo falls within the category of essential services allowed to operate during this period to ensure that people have access to basic supplies. We would like to assure our customers that our outlets will remain open and that they can continue to depend on us for the affordable prices they have come to trust. FoodCo recently donated medical equipment to the University College Hospital (UCH), Ibadan, as part of its intervention towards promoting effective care for patients with the coronavirus. Items donated include a patient monitoring machine, oxygen concentrator and suction machine. @Businessdayng

Plural Media, Invent Media, others begin awareness campaign on Coronavirus

equel to its commitment to Corporate Social Responsibility (CSR), Plural Media an Out-of home media agency in Nigeria and Invent Media, also a major player in the OOH advertising sector have commenced massive awareness campaign on Coronavirus on their top of the market digital billboards products Pan Nigeria. The campaign are ways of helping to mitigate the debilitating on-slaught of the Coronavirus pandemic which has led to the death of no fewer than 100,000 people across the globe. The dreaded pandemic codenamed COVID-19 broke out late last year in Wuhan, a city state in China and has since spread through countries of the world leading to lockdowns in several cities and a gradual collapse of global economies. In Nigeria, the pandemic has recorded about seven deaths while no fewer than 300 cases have been indexed. Justifying its Company’s lead campaign on safety and Health Awareness Campaign on the pandemic, Managing Director of Plural Media, Uduak Bassey said “Plural Media embarked on this noble Campaign solely to save lives, adding that as a responsible corporate citizen, we have no choice than to live responsibly”

Modion Communications campaigns clinch two highly coveted SABRE Awards

odion Communications, Nigeria’s fastgrowing Public Relations and Marketing Communication solutions providing agency, has announced that two of its campaigns have won the SABRE Awards, Africa’s most coveted prize in Public Relations. The agency joins 16 other PR agencies across Africa awarded 35 Diamond and Gold trophies in the 2020 African SABRE Awards competition. PRovoke Media which manages the Sabre Awards in partnership with the African Public Relations Association (ARPA) said it received 150 entries from agencies across Africa. Modion Communications’ 2019 gripping teaser activation for Leadway Assurance, tagged #SeeFinish, was adjudged the winner for THE SABRE Award for superior achievement in brand-building. The 2019 multi-layer crisis management strategy for Gokada, Nigeria’s mobility firm, tagged #Gokada2.0, was the agency’s second entry for the competition. The campaign emerged winner of the sabre award for superior achievement in reputation management category, beating leading agencies from Kenya and Ghana.

Tuesday 14 April 2020

BUSINESS DAY

Happier times in an age before travel bans © Alamy

How coronavirus is turbocharging office holiday politics Annual leave rosters were always a nightmare to devise but now they have become impossible Pilita Clark

A ‘‘

Having once had the job of drawing up team holiday rotas, I know it has always required the skills of a Nobelwinning diplomat and a butcher

t the start of this year I made a plan to spend this Easter break flying down on easyJet to a house near a beach at the bottom of Spain. Along with the plans of numberless others, it failed. EasyJet is grounded. I am locked down in London. The beach in Spain is closed and in a town just up the coast, some locals greeted a convoy of ambulances trying to bring in pensioners evacuated from a virus-ravaged care home by pelting the vehicles with stones. All things considered, staying home instead has been fine, especially since I still have a job and more to the point, managed to take a chunk of annual leave before the world shut down. A lot did not, which is one reason why the politics of the office leave roster have gone into corona overdrive, while the idea of the holiday itself is being upended. Having once had the job of drawing up team holiday rotas, I know it has always required www.businessday.ng

the skills of a Nobel-winning diplomat and a butcher. The needs and wants of all staff must be carefully juggled and judged before a final, decisive chop. It is difficult to imagine how much harder that task is now. Last week I came across people in the City of London who had been working exhausting hours for weeks, in swamped teams. Now they needed volunteers to cancel the Easter breaks they had booked months earlier. No one was risking their lives, as health workers around the world are. All were able to work at home, unlike the bus drivers, supermarket staff and couriers who do not have the choice. Yet they still faced a dilemma. If they failed to stay at their desk, how safe would their job be if their company started the cutbacks ripping through their industry? If they failed to take a holiday, how safe would their marriage — or mental equilibrium — be after yet another draining week of work? At the other end of the spectrum, I spoke to people whose bosses had told them they should take leave now if they could, because otherwise they

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were likely to get too tired and if they all tried to take time off at once later there would be chaos. “They said we can’t have everyone taking holidays in September or whenever this is all over,” said one analyst at a bank. “We haven’t been given any formal rules about it from the top but this is what is happening in the division where I work.” Fair enough, I thought, until I joined a video hang-out where one of the speakers announced he was actually about to go on holiday for a week. To do precisely what, I wondered. It has been impressive to read about “Costa del Yorkshire” Brits who have dragged beach towels and pebbles into their living rooms to recreate the holiday spots they are missing. Top marks also go to the confined French couple who went to the bother of posting photos of themselves in sunglasses and swimwear to look as if they were on their cancelled break in Mexico. In real life though, how much fun can really be had on a holiday cooped up at home? A frazzled colleague who decided to do it reports it was better than expected. Completing a @Businessdayng

1,000-piece jigsaw puzzle for the first time in years proved surprisingly therapeutic. It was pleasing to see his shocked teenagers discover on a family movie night that Alien and other films made decades before their birth were actually quite good. Serious progress had been made on one or two outstanding chores around the house. Still, he would have preferred the week in the countryside that he was originally supposed to have taken. And there was the not insignificant matter of using valuable annual leave in semicaptivity. Or so he thought. It is a measure of the mass corona confusion at large that neither he nor I knew at the time that the government had made a notable announcement on statutory annual holidays, which are mostly lost if not taken. To help key industries, rules would be relaxed so that workers could carry unused leave into the next two years. This move was widely reported but in the tsunami of coronavirus news, it has taken time to sink in. It was, in other words, very much like almost everything else in this eerie, unsettling time.

Tuesday 14 April 2020

BUSINESS DAY

CEOs must turn their coronavirusprompted pay gestures into real reform When the crisis is over, remuneration will be a lightning rod for public and political discontent Andrew Hill

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Remuneration committees will have an important role in curbing unwarranted or unintended windfalls. Pay structures at most companies need simplifying

or decades, chief executives seemed to be paid according to two rules of thumb. First, they deserved to earn more than the average business leader. Second, their pay should never go down. Warren Buffett nicknamed the pay consultants who lubricated the remuneration merry-go-round “Ratchet, Ratchet & Bingo”. Covid-19 could reset these rules permanently. As chief executives take tough decisions about the salaries, jobs, and future of their staff, many are recognising that at the very least they too should be seen to suffer. They are still benchmarking against their peers. But now decisions are based as much on how much they should give back. as on how much they should take out. Ana Botín, chairman of Santander, agreed to contribute half her pay to a medical equipment fund created by the Spanish bank. Michael O’Leary, abrasive chief executive of Ryanair, joined the airline’s staff in taking a 50 per cent cut for April and May. They are outliers. Many chief executives are sacrificing less. They are part of a growing “20 Per Cent Club” of bosses reducing their salaries by a fifth, while staff contemplate weeks in government-backed furlough schemes. There are other differences. Lop 20 per cent off the median FTSE 100 chief ’s salary of £876,000 and he or she still takes home £60,000 a month before tax. Chief executives’ pay-cut pledges are typically time-limited and their bonus and long-term incentive plans are mostly intact. By contrast, UK furlough payments are capped at £2,500 a month. Workers are crashing down through the layers of Abraham Maslow’s hierarchy of needs towards the lowest level where they have to focus on health and shelter. The UK charity Citizens Advice reported last month that in the first fortnight of the crisis, it fielded many requests for information about flight and hotel cancellations. Then came a wave of concern about sick pay, followed by rewww.businessday.ng

Ana Botín: the chairman of Santander agreed to contribute half her pay to a medical equipment fund created by the Spanish bank © Pablo Blazquez Dominguez/Getty

quests for advice about redundancy and state benefits, and finally about how to cope with spiralling debt. Another psychologist, Frederick Herzberg, observed that staff were more likely to grumble when they lost “hygiene factors” such as a decent wage and job security, rather than applaud when they were present. This crisis is a large-scale test of that hypothesis, at a time when, for many workers, good hygiene is more than a mere metaphor. It is good to see chief executives acknowledge the plight of staff. It makes a change from hearing them bracket themselves with some professional footballers, who have been slow to waive part of their galactically large wages, even as their clubs are tossing the minions who clean the stars’ boots or cook their meals into furlough. Xavier Baeten, who studies executive pay at Belgium’s Vlerick Business School, says the trend differentiates this crisis from the financial meltdown of 2008, when only a minority of companies cut chief executives’ pay. Regulators have already stepped in to warn banks to “exercise extreme moderation” on bonuses. But Prof Baeten notes that even companies that stand to do well during the pandemic have “a bad feeling” about being seen to reward executives too lavishly.

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My hunch, and hope, is that this time chief executives will recognise how fragile trust in business is. By converting early goodwill gestures into permanent pay reform, they can work to shore it up For now, though, I have a sense boards are doing the minimum necessary to shield themselves from reputational damage. The real proof of chief executives’ appetite for sacrifice and solidarity will come as they emerge from the acute phase of the pandemic and consider whether to address the chronic problems with executive pay. Some will argue they should be rewarded if they successfully @Businessdayng

lead their companies through the biggest threat to their survival since the second world war. Others will point out that in the same way that lavish remuneration in good times was a mere fraction of the value they could create for shareholders, cutting pay in bad times would not be enough to stave off calamity. There are limits, though. Remuneration committees will have an important role in curbing unwarranted or unintended windfalls. Pay structures at most companies need simplifying. In a crisis, nobody really cares what the intricate inner workings of a watch look like as long as it tells the correct time. Incentives themselves need readjusting. Alex Edmans, an advocate for paying executives in restricted stock, argues in his new book Grow The Pie that reformers should aim to encourage leaders “to create long-run value for society, rather than reduce the level of pay”. In the UK at least, chief executives’ pay had already plateaued before this crisis. But afterwards, remuneration will again be a lightning rod for public and political discontent. My hunch, and hope, is that this time chief executives will recognise how fragile trust in business is. By converting early goodwill gestures into permanent pay reform, they can work to shore it up.

Tuesday 14 April, 2020

BUSINESS DAY

EDUCATION Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

CONVID-19: Varsity don, Badaki says Nigeria missed opportunity for early containment MARK MAYAH

university don, Olusegun Lasisi Badaki (Prof) of the department of science education, Federal University Dutsinma (FUD), Katsina state has faulted Nigeria’s response to the CONVID-19 pandemic. Badaki, who spoke with Businessday in telephone chat, described the Coronavirus disease as one that has shocked the world, saying the measures currently being taken against the disease as belated. In his word: “We are now taking measures that we should have taken from the first day that the index case came in. I wish we had done what we are doing now at that time. We waited too late for action to be taken. We missed the opportunity because if we had taken these steps that we are taking now at that time, we would be in a better position.

President Buhari

“We started with one case and took about nine days before the second case came up and subsequently we are

getting cases more rapidly till now,brought back by the number of people coming back into the country. At

COVID 19: Kwara designs ‘mass media class’ for SSS 3 SIKIRAT SHEHU, Ilorin

wara State Ministry of Education and Human Capital Development under the leadership of Ahmed Fatimah Bisola, Commissioner, has designed a “mass media class” for Senior Secondary School students in the state to mitigate effect of the closure of schools due to the Coronavirus pandemic. By this programme, students preparing for WAEC and NECO examinations can

sit back at home and watch or listen to lessons by the teachers on Television and Radio stations as scheduled. A statement signed by the commissioner, stated that “the Ministry is aware that exams were approaching before the State Government issued a directive on #Stayhome as one of the decisive measures to fight the spread of Covid-19. “It is regrettable that the Government can not predict an end to this scourge but it is safe and strongly advisable to abide by the directive given so that the citizens can stay safe. “While every efforts world-

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wide are on the approach to stop the spread of Covid-19 and the discovery of vaccine to cure the virus, the Ministry has designed a mass media class where resourceful teachers on different subjects would be brought on Radio to teach Secondary School Students. “The Radio Class is designed in such a way that Students will be allowed to call for questions and clarifications. Students in the state are hereby strongly advised to take advantage of this opportunity to continue their learning so that they can easily meet up with the syllabus.” The schedule programmes will be holding at Sobi FM; Monday to Friday - 1pm to 2pm Kwara Radio FM Monday, Tuesday & Friday - 4pm to 4:30pm and Wednesday & Thursday - 6:30 to 7pm On Gravity FM Igboho; Monday to Friday - 9am to 10am and NTA Ilorin; Monday to Friday - 10am - 11am

the border, all they can do is check your temperature, and you may not be symptomatic, but it is in the fol-

lowing up that we have a problem.” Lamenting that there were not enough test centres in the country for the diagnosis of the disease, Badaki said even the existing centres could be better utilised. Said he: “How are we utilising the available test centres? We should be having information about how many tests are carried out by each of the laboratories and that way, experts would be in a position to advise the government on the way forward. “I get worried when they say we have 50 or 51cases, but nobody has told us how many samples they have tested and if we are only testing 200 samples and getting 50 cases, that is horrendous. It means that a quarter of everybody is positive. “But if we are testing 4,000 and getting 50, then it becomes a little different. So I don’t think we are getting enough information from those in charge. “Apart from the labs, we

need test kits and reagents. It all boils down to having the guidelines. Government should put effort into what every individual should do so they can take the right steps.” Calling for better preparation to tackle disease epidemics, Badaki tasked the government to make use of it’s own people to fight the Convid,-19 menace adding: “We never expected that it would be so bad. This is a new virus that is spreading all over the world and because it is new, people do not have immunity against it and so it is going to spread for some time until it can be put under control. “There are enough talented people in the country and if you put money into research and science, there is no way we would not make progress. It is a matter of relevance. The government has been paying lip service to research. I called on all stakeholders to ensure right pegs is in right direction,” Badaki reiterated.

UNILAG student wins 2nd position in Architecture writing contest MARK MAYAH

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bdullah Ogunsetan, a 200 Level stu d e nt o f t h e Depar tment of

Architecture, has added another garland to the University of Lagos. He emerged 2nd Best in the Undergraduate Category of the inaugural A3Archnet Prize for Writing on African Architecture.

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Ogunsetan’s entry is an essay on the Ode Omu Mosque, located in Osun State, Nigeria. The A3-Archnet prize for writing on African Architecture was created to raise a crop of African architects who will be armed with the knowledge of forebears who created important buildings while laying the foundation for the digital documentation of Nigeria’s built heritage. Chiagozie Enwonwu of the university of Benin is the winner of the undergraduate category with her entry on Egedege N’ Okaro, Benin which is recognised as the first 1-storey building in the ancient Benin Kingdom. The Vice-Chancellor, UNILAG, Oluwatoyin Ogundipe, on behalf of staff and students, congratulates Abdullah Ogunsetan on his achievement.

Tuesday 14 April, 2020

BUSINESS DAY

EDUCATION

Royal fathers wade into ASUU strike • Stakeholders meeting slated May 4, 2020 • Venue to be communicated to all parties them to suggest viable solutions to the present crisis. Those in the frontline of the peace moves, according to BusinessDay investigations include, Ooni of Ife, Oba Adeyeye Enitan Ogunwusi, Emir of Kano, Aminu Ado Bayero, Emir of Bauchi, Suleima Adamu, Alaafin Of Oyo, Oba Lamidi Adeyemi and Oba of Lagos, Rilwan Akiolu. Others are: The Obi of Onitsha, Nnaemeka Alfred Achebe, Attah Igalaland, Ameh Oboni and other prominent traditional rulers across the six geo-political zones. The traditional rulers, our correspondent gathered have created a forum through which they intend to preach

MARK MAYAH

oyal fathers in the country have waded in to save tertiary institutions from imminent collapse. Virtually all the nation’s public universities have been shut academically due to the on-going industrial strike embarked by members of the Academic Staff Union of Universities (ASUU) on Monday, Match 23, 2020. The traditional custodians are contacting parents, religious leaders, the affected teachers and government officials in their domain urging

Rilwan Akiolu, Oba of Lagos

COVID-19: Youth Corps members leading campaign against pandemic Adenike Adeyemi

orona Virus disease (COVID-19), is an infectious disease that affects the lungs with resultant coughing, fever and shortness of breath. It is a Pandemic ravaging countries across the world. In Nigeria, virtually all States of the federation and Federal Capital Territory, (FCT), have announced various measures including a “stay at home”order to effectively check the spread of the virus. The Nigeria Centre for Disease Control (NCDC) in its daily updates on the Pandemic confirmed that 238 people were infected with the Virus, 33 recovered after receiving treatment and 5 died as a result of the disease. The figures keeps increasing as reflected in the number of confirmed cases across States and FCT,

Abuja. In view of the alarming rate in which the Virus keeps spreading globally and Nigeria in particular, Management of the National Youth Service Corps (NYSC), in its determination to effectively contribute towards national effort at stemming the tide of the Pandemic promptly complied with the Presidential directive by releasing it’s Orientation Camps facilities nationwide to serve as Isolation Centres for COVID-19. The Scheme has since made adequate arrangements and provided relevant facilities that will enhance effective utilisation of the Orientation Camps as Isolation Centres for the treatment of citizens confirmed to have been infected with the virus. Already, Corps Medical personnel across States of the federation and FCT Abuja do not only engage themselves in various activities in Hospitals designated for this purpose,

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they have also been involved in organised enlightenment campaigns through Radio, Television and other online media platforms to sensitise Nigerians on the adverse effects of the disease and the need to adhere to safety measures outlined by relevant health bodies to stem the tides of the Pandemic . The NYSC Scheme has since inception contributed immensely to the development agenda of the nation. It has continued to satisfy the needs of the nation at the grassroots, state and national levels; meeting vital manpower requirements and overall objective of various Health and other critical sectors of our national economy. The Community Development Service programme of the Scheme is primarily aimed at harnessing the Skills of graduate youth Corps members into an effective machinery for national development. Under

this programme, Corps members are usually organized to work with local communities to promote and execute development projects as well as complement the activities of government at all levels in the stride for national development. In conjunction with various national and international organizations, NYSC played leading role in the successful implementation and achievements of the objectives of a number of national programmes aimed at eradicating diseases of public health concerns such as the Guinea Worm eradication programme, National Reproductive Health and HIV/AIDS project, National Roll-Back Malaria programme, Campaign against Ebola virus and Lassa fever diseases, Polio eradication, Yellow fever immunization campaigns, Cholera, Cerebrospinal Meningitis and other national immunization programmes among many others. In clear terms, NYSC presence in the rural communities across the country provide good opportunity to identify national development challenges and commit necessary resources to tackle them. This also underscores the philosophy behind the founding objective of the Scheme which seeks “ to develop in the Nigerian youths attitude of mind acquired through shared experience and suitable training which will make them more amenable to mobilization in the national interest”.

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peace between the government and the teachers. Also, education ministry sources confirmed to BusinessDay that meeting between the minister, Adamu Adamu, the concerned traditional rulers and teachers from the nation’s public universities have been scheduled to hold on May 4, 2020. Although, the meeting venue have not been fixed due to the present lockdown in virtually most of the states and Abuja, as a result of CONVID-19 pandemic, but competent ministry sources confirmed that to attend the “Caucus” along with the traditional rulers and education minister is ASUU President

and secretary respectively. It would be recalled that the union had disagreed with the government especially on the implementation of the Integrated Personnel Payroll Information System (IPPIS), which ASUU had maintained was an imposition on the union and vowed to resist it. While the University Transparency and Accountability System (UTAS), proposed by ASUU as alternative to the IPPIS was rejected by the government. As at press time, several calls made to phone lines of ASUU President, Biodun Ogunyemi, for confirmation of the proposed peace meeting wasn’t through as his phones reported to be put off.

Kogi state varsity appoints first female acting VC MARK MAYAH

ogi state Governor, Yahaya Bello, has approved the appointment of Marietu Tenuche (Prof ) as the Vice Chancellor, Kogi State University (KSU), Anyigba. Until her appointment, Tenuche, 61 was Dean School of Post Graduate Studies and chairman of the committee of Deans and Directors. Born on 29th September 1959, Tenuche obtained her West African School Certificate from Government Girls Secondary School Yola in 1976 and a University of Cambridge G.C.E. Ad-

Marietu tenuche, VC KSU @Businessdayng

vanced Level Certificate from the School of Basic Studies, Kwara State College of Technology now Kwara State Polytechnic Ilorin in1978. She obtained a B.Sc Political Science degree(2nd Class Upper), from the Ahmadu Bello University in 1981, an M.Sc. (Pol. Science and later a PhD Political Science degree in 2001. Between 1982 and 1992 she was engaged as a lecturer at the Kwara State Polytechnic Ilorin. She joined the services of the Kogi State University, Anyigba (KSU) at the inception of the university in 2000 as Lecturer 1 and rose to become a Professor of Political Science in 2011. Her area of research interest is political economy and gender issues. She served as the acting Dean of the Faculty of Social Sciences KSU between 2001 and 2006. She was appointed Deputy Vice-Chancellor (Academic) KSU first from 2004 -2006 and again from 2008 to 2011. She was appointed Deputy Vice-Chancellor (Administration) KSU in 2011 and successfully completed her tenure in 2013. Professor Tenuche was a delegate to the 2014 National Conference where she represented the North Central Geo-Political Zone.

Tuesday 14 April 2020

BUSINESS DAY

property&lifestyle Where to invest and get good values, returns in time of coronavirus CHUKA UROKO

his, indeed, is not time when investors need to act fast, because they need to watch and see what timeline the rampaging coronavirus sets and also where the economic pendulum swings to. But, be that as it may , those who must invest can start to figure out where the trends will create the best opportunities and good returns once the COVID-19 crisis is over. Investment analysts in Nigeria are already betting on a possible recession following the performance of the crude oil market in the wake of the coronavirus pandemic which has dragged prices down below the country’s budget estimates and benchmark. In an answer to what real estate investors can do in time of coronavirus, Ingo Winzer, a market analyst, says what the investors can do “depends on how much confidence they have in the idea of a sharp but short recession.” “In fact, I think that real estate, and especially rentals, will be a dynamic area for development and investing. This has nothing to do with buying property cheap but rather with investing more wisely and precisely,” Winzer

notes. According to him, a crisis is often a catalyst to accelerate trends that are already known, pointing out that recession will always push more people towards renting. In its recent report on the State of the Real Estate Market, Fine & Country West Africa International, notes that multi-family units, specifically apartments, tops the list in order of preference for most developers and, of course, investors in Nigeria. The report explains that apartments would appear to make more economic sense to developers, as multiple units can be developed on a piece of land, without taking up too much space. It adds that land optimization is consequential to maximizing value when developers are considering developmental options and also the ease of sale and lease or rent. In terms of location, the report’s analysis of both rental values and returns on investment for different areas and house-types shows that , in spite of their relatively higher values, Victoria Island and Ikoyi have more promising outlook and offer. According to the report, rental values in Victorial Island, as at the end of second half of 2019 stand at N1.5 million per annum for 1-bedroom apartment; N3.5—

8.5 million for 2-bedroom; N5.5—15million for 3-bedroom and N6-25million for 4-bedroom apartment. In Ikoyi, it is N4—5 million per annum for 1-bedroom; N6.5 million for 2-bedroom; N10 million for 3-bedroom and N10—25 million for 4-bedroom apartment. Return on investment on these apartments is quite significant. In Victoria Island, the return on the different apartment sizes stands at 2.7—3.7 percent per annum for 1-bedroom; 7—10 percent for 2-bedroom ; 6.1—10 percent for 3-bedroom; 6.1— 9.2 percent for 4-bedroom duplex and 3.75—6 percent for 4-bedroom terrace. In Ikoyi, it is 9 percent for 1-bedroom; 5.4—8.6 percent for 2-bedroom; 5.3—8 percent for 3-bedroom 4.5—8.3 percent for 4-bedroom duplex and 4.8—5-4 percent for 4-bedroom terrace. A closer look at these analyses shows that returns are higher for smaller apartment units, especially 2-bedroom which, according to David Mbah, Manager, Commercial Sales at Fine& Country, means that demand is more for these house-types than the big-size apartments. It also means that smaller unit apartments are the new investment destinations and any investor wanting to enter the market amid the COV-

ID-19 pandemic should look in that direction. It needs be pointed out though that the opportunities which both Ikoyi and Victory Island offer also come with some level of risks or threats. In Victoria Island, the strengths of the location are in its excellent location, ease of obtaining approvals for development based on precedent, high rents and return on investments (ROI) based on demand, and a wide mix of support service companies. But the development of

Alaro City raises bar in fight against COVID-19, gives civic education … as top executives, partners fund isolation centre construction CHUKA UROKO

laro City, a mixedincome, city-scale development nestled in the North West Quadrant of the Lekki Free Trade Zone in Lagos, has raised the bar in the fight against the dreaded COVID-19 pandemic, assisting Lagos State government in its efforts to contain the disease. Besides the distribution of some relief materials comprising 500 bags of rice and other relief materials in its host community of Epe, the City has also embarked on civic education campaign aimed at boosting awareness on effective ways of combating the pandemic.

Additionally, top executives of the satellite city have also partnered with the Lagos branch of a global leadership community of business executives to fund the construction of a COVID-19 treatment and isolation centre in Eti Osa Local Government Area, which has been identified as the area with the highest number of infected cases in the state. “Government’s effort, particularly Lagos State government led by Governor Babajide Sanwo-Olu, to contain the spread of the virus and support communities in need are commendable and requires the support of all stakeholders,” Odunayo Ojo, CEO of Alaro City, noted in

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a statement at the weekend. Ojo noted further that while the pandemic has made things inconvenient for everyone, there are people who have had it worse, adding, “therefore, this modest intervention is our own way of helping our communities and assisting government at all levels to effectively contain the coronavirus by getting people to stay at home. We have started with Epe, which is our host community, and will also reach other communities across the state.” Ojo disclosed that Alaro City has partnered with media companies in sensitising the public on effective ways of limiting the spread of the pandemic. He explained that public enlightenment was vital and needed to be sustained to enable Lagosians and Nigerians beat this virus. “We are channelling resources through key media partnerships to ensure people remain sufficiently educated and enlightened on the right steps to take in limiting the spread of coronavirus. We will also continue to support the government in battling this pandemic, ” Ojo

assured. Beneficiaries of the relief items distributed in Epe thanked Alaro City for the assistance. Sunday Dada, a resident in Epe, expressed gratitude for the support which he said came at a vital time. “I want to use this opportunity to thank Alaro City for this assistance during such a period as this COVID-19 (crisis). Oba Kamorudeen Animashaun, the Oloja of Epe Kingdom, commended Alaro City for the gesture and urged beneficiaries to stay indoors so as to limit the spread of the virus. “The management of Alaro City are responsive and reliable; this is why we like them; they care about the people of Epe and they have again shown that by this kind gesture,” he said. Launched in January 2019, Alaro City is planned as a 2,000-hectare mixedincome, city-scale development with industrial and logistics locations, complemented by offices, homes, schools, healthcare facilities, hotels, entertainment and 150 hectares (370 acres) of parks and open spaces.

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Eko Atlantic City in the long term is a major threat to the continued prosperity of Victoria Island. So, potential investors should always bear in mind that this development, which is already evolving with some residential and office developments coming up fast, may throw the spanner in the works. Opportunities in this location include ease of rental as a large pool of prospective home buyers, both local and Nigerians in Diaspora, would rather buy out right a

finished product that meets their immediate needs in Ikoyi; amendment in Lagos planning legislation is expected to make zoning for commercial use easier. But there are threats too. These come in as construction challenges leading to delay of delivery; lack of availability of financing for projects or mortgages for prospective buyers; presence of competing developments within the same axis and planning challenges to secure permission for commercial office use.

COVID-19: It is a trying time for the construction industry — Awobudu CHUKA UROKO

he construction industry in Nigeria and the world over is currently in a trying time no thanks to coronavirus which has crippled all human activities including building and construction, Kunle Awobudu, President, Nigerian Institute of Building (NIOB), has said. This, indeed, is not the best of time for an industry where , Awobudu noted, work is determined by man-hours. “The lockdown and sit-at-home order by the government means everybody is idle. Many projects have been suspended and that means we are wasting man-hours; when you are wasting man-hours, you will feel uncomfortable,” he said. The NIOB president noted that both the industry and economy are losing much as a result of the lockdown. According to him, projects which have been suspended were planned not to suffer time over-run so that they could be delivered in time and on budget. He added that projects are not supposed to stop suddenly and explained that apart from endangering the stability of the @Businessdayng

building, it leads to loss of materials. “Rain could come and wash sand to the drain; it could also weakens other materials like wood for casting slab or roofing,” he noted. Awobudu is particularly worried over job losses in the industry. According to him, “construction workers are wage earners; they are not supposed to earn salary when they are not at work. Now, they are not working and so, there is no pay; that means they have no job as it were.” He said that even if the lockdown is relaxed and people are allowed to return to work, it will be difficult for construction workers because they still have to observe social distancing and washing of hands while at work, but they cannot, making them vulnerable to the disease. Awobudu is of the view that time has come for Nigeria to look inwards in terms of local building materials production. He explained that most of the building materials used in Nigeria are imported from China from where coronavirus originated. That means no materials will be allowed to come from that country in the near future.

Tuesday 14 April 2020

BUSINESS DAY

property&lifestyle Lockdown: Stakeholders seek exemption for essential real estate services providers ENDURANCE OKAFOR

With Oluwakemi Adeyemo

o e n s u re t h e smooth running of residences to support millions of Nigerians who are observing coronavirus lockdown in Lagos, Ogun and the federal capital territory (FCT), real estate players have urged government to consider exemption of property and facilities management services providers. Failure to designate property and facilities management services as essential may either force these professionals to have to execute their responsibilities under the strictest conditions or they may be compelled to abandon some or all of their responsibilities, the stakeholders said. “This could make living conditions unbearable for their clients, leading to potential lawsuits postCOVID19,” Tayo Odunsi, CEO of Northcourt, a real estate advisory real estate firm, said in a recent online discussion tagged remote real estate. To curtail the spread of the deadly coronavirus, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days with effect from 11pm on Monday, March 30, 2020. The restriction will also apply to Ogun State due to its proximity to Lagos and the high traffic between the two states. Essential service providers like-healthcare workers, security offices, waste management workers, fire and emergency service workers

How crisis affects real estate and what investors can do

are however exempted from the lockdown to make the restriction bearable for Nigerians who are not allowed to leave their homes. “It is important everyone stays at home, but while we do so, a few people need to ensure our stay at home is as bearable as possible. Someone needs to ensure basic amenities such as power, water, security and janitorial services, etc are running smoothly,” Odunsi said. With a broad spectrum of value chain in Nigeria’s real estate sector, the industry is considered as one that is very diverse, as it does not only entail developing, buying and selling of property, but also includes property and facility management services. These two aspects are cited by industry players as the segments that should be designated as

essential services. According to John Oamen, Co-Founder of LiveVend.com, a real estate price discovery platform, it is understandable that the nation is on lock down as a result of the COVID-19 pandemic but the security and safety of the people is what the lockdown is really about. “For us to avoid opening another blindspot, certain individuals have to be exempted. We suggest that real estate essential services be part of the exempt. Especially the likes of facility managers, and handymen e.g electricians, plumbers etc.,” Oamen told BusinessDay. The industry players encouraged government to look into the exemption as the lockdown period will mean there will be a lot more pressure on home

appliances considering that more people are mandated to stay at home. “We have noticed that it is breeding a higher demand on real estate essential services like facility managers. Hence the need for the exemption, the stakeholders said. “As important as the exempted professionals are, there are professionals that ensure everyone can stay in their homes peacefully and in good state. These professionals are property and facility managers. These two roles, though different, are closely related and are often offered by estate surveyors, engineers, technicians and other professionals in the built environment and hospitality sectors,” Odunsi explained in an e-mail response to a BusinessDay question.

Propertymart sensitizes community on ways to combat coronavirus CHUKA UROKO

n a seemingly little but very strategic and significant way, Propertymart Real Estate Investment Limited has embarked on community sensitization as part of measures by both federal and state governments to contain and curtail further spread of of Coronavirus (COVID-19) in Nigeria. In its host community, Shangisha and environs, the property developer has carried out a public sensitisation and awareness campaign on COVID-19, educating them on personal hygiene, social distancing

Talking Real Estate

and other measures to avoid contracting the virus. Staff of the company, who carried out this exercise, stressed the need to maintain good personal hygiene, avoid touching their faces and washing their hands regularly with soap. They also advised the residents to comply with all laws by the federal and state governments to curb the spread of COVID-19, noting that it was for their safety. A healthcare kit containing sanitisers and medicated soup, among others, were also distributed to people by the company. Arasi Abimbola, managwww.businessday.ng

ing director of Propertymart, explained that the sensitization was the least the company could do for its immediate community, mainly as more cases were being recorded across the nation. “These are trying times for every Nigerian, and we feel we could contribute our little efforts to curtailing the spread of COVID-19 by teaching people to embrace hygienic practices. They need to stay safe, and this is the message we are preaching. It is a deadly virus, and we need to do our best to avoid getting infected,” he said. Arasi added that the com-

pany was poised to do more across other communities in Lagos and assured of their readiness to assist the government in curbing the spread of the virus. A significant player in Nigeria’s real estate sector since its incorporation in 2008, Propertymart has delivered over 6,000 housing units and serviced plots to families and individuals in Lagos, Ogun and the Federal Capital Territory (FCT). Some of its key projects include Citiview Estate, Arepo; Mitchel Mews, Magodo; Edensville Estate, Simawa and Mitchville and Bel Terraces, Abuja.

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eal estate is designed to sustain human existence. It is also the asset class that allows you and I express our dreams, desires and aspirations. It is crucial to wealth creation. It is envisaged that there will be lots of changes during and after the current crisis. These changes will affect how people define real estate space. Although there are also quiet speculations that the status quo would be maintained. While we want to survive, we need vibrant economies to survive. Therefore, businesses and people have to adopt the rules of survival. It is then crucial that you think of who you will become after now. The solid real estate is so crucial that even in a capital and equity business, no matter how low the price of a unit of stock drops, whatever value is left of the unit of stock is a result of the real estate element in the business while the price fluctuation is often a function of human emotions and sentimental activities. Real estate enthusiasts all over the world, on several platforms, have been asking a similar question lately and, it is, “how will real estate be affected by the current crisis?” Crisis, as we know, causes change. It sometimes forces change and adjustments. This crisis is not different. It will, no doubt, cause some changes. Economic experts have advised individuals to keep and ensure they have access to liquidity during a crisis. Therefore, real estate should not be an asset class for consideration during a crisis or even immediately after. While it is okay to consider such advice, I would say that it should be subject to your peculiar needs, existing investment portfolio mix and how you define real estate with regards to your wealth creation goal. It is easy to think that real estate is usually badly hit during a time of crisis. But, it depends on the aspect you have invested in and how you have invested. Real estate is an asset class that retains value for an investor. It gives some stability to your investment portfolio and is not subject to quick free fall as is common with other asset classes. However, it may take time to sell and convert @Businessdayng

to cash because it can also be an emotionally charged asset class, and hence, underperforming. The tangibility and use of solid real estate becomes more evident during a crisis. It becomes clear how much space needs to be shrunk and how much space needs to be expanded. Other aspects of real estate also begin to get some consideration. New definitions may even emerge, especially as real estate is broadly defined to include all that nature provides. Sales volume of certain types of real estate may decrease during crisis. For instance, the number of people looking to sell a home in some locations may reduce or increase. The same goes for buying a home. Again, this depends on the dynamics of a crisis. A crisis, such as our world is facing now, will cause certain demography to realize the importance of having their own space either through rent or ownership such that by the time the economy revives and stabilizes, there will be an increased demand for residential real estate as people would require bigger or smaller spaces to adjust to current realities. The changes that accompany a crisis can also drastically reduce the patronage for some other aspects of real estate business for a while. Spaces are likely going to be used more for storage and logistics than for hospitality and other businesses. Real estate businesses that cater to the latter category should get creative and plan some conversions to mitigate the effect of the downtime. While the disposable income of people is expected to shrink towards the use of some kinds of space, there are aspects of real estate that stay relevant and attract more spending in and out of a crisis. They are those that meet survival or basic human needs. Food is essential to survival and so is shelter and general wellbeing. An investor should consider adding basic essential real estate to their portfolio mix now but in an organized and carefully planned manner. Now, more than ever, your investment portfolio must have the right mix of real estate asset.

Tuesday 14 April 2020

BUSINESS DAY

BDTECH

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E-mail: jumoke.akiyode@businessdayonline.com

‘Our goal is to deliver access to smartphone financing technology’ PayJoy is a global provider of smartphone locking and smartphone scoring technologies that are used to reduce the risk of non-payment, and enable smartphone financing and lending in emerging markets. In this exclusive interview with Jumoke Lawanson, Gib Lopez, the co-founder and chief operating officer of Payjoy talks about the need to use technology to increase access to finance, its partnership with leading original equipment manufacturers, technology regulation, expansion plans and other issues. Excerpts. What is Payjoy and what are your plans for the Nigerian telecommunications sector? ayjoy was founded in 2015 with the mission of delivering access to smartphone financing technology to people in emerging markets worldwide. We are the leading enabler of pay-as-you-go smartphone financing. Payjoy enables consumers with no bank accounts or formal credit history to purchase smartphones in instalment payments. It does so by turning the smartphone into collateral through software technology that locks the phone when payments have not been made. We are active in over twelve countries including all four major regions; America, Asia, Africa, South East Asia.

break down the phone and sell off the parts. When we see things like that we can either fix them or reduce the ability for people to make profit off stealing the phones. We have partnerships with companies like Qualcom – the world’s leading chipset manufacturer and we have license agreement partnerships with major OEMs, so people can see that the smartphone locking technology is working and that builds our credibility.

What informed PayJoy’s decision to bring the smartphone locking technology solution to Nigeria in order to aid device financing? When we look at the globe, we think that most countries outside of the largest developed countries have a credit system that doesn’t function very well. There is very low credit penetration because there’s not much information on people. A lot of information that is out there isn’t very useful and may not be accessible. We think that with our technology, we can help reduce that barrier and help people get access to finance. Nigeria is a big, exciting country. It is a developing economy with a lot of potential and so when we looked at the African market, Nigeria was on the top of our list of countries to go into. We started in a couple of other African countries like Kenya, Zambia, Senegal and Cote D’Ivoire first and then expanded into Nigeria. How important do you think smartphone phone financing/loan facilities are today, especially with the availability of very low budget smartphones? I think there are two major things. One is the importance of access to finance to buy technology and the other is the cost and capability of smartphones. People value the power and capability of high technology devices which usually cost more. Things like sound quality, cam-

Gib Lopez

era quality, battery capacity, ability to run all apps etc. are what people value. The reason why some people buy the cheaper mobile phones that cost about $60 or less is not because that’s what they desire, but because that’s what they can afford to buy at the time. What we do is that we can turn that $60 upfront purchase into a down payment, smooth out the rest of the payments and let them pay over time for the device they really want and need. When we see statistics on the changing nature of these prices, I think it’s born out of a constraint and not desire. People want the higher devices that are critically important for their lives and we enable that for them through our partners. On the importance of the loan, we typically find that in countries like Mexico, Kenya and Indonesia, people have a small amount of money every month but can’t come up with a huge sum of money in one month. If someone can come in and offer credit, they can afford to pay in bits to get something that’s really important to them. But because credit lenders don’t have the confidence that they’ll get repaid, because people can’t promise collateral and there isn’t a credit score, they don’t lend, so that market doesn’t move. When we come in, we

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enable them to virtually collect these devices as collateral so that the lenders can feel more comfortable lending. With this technology, they can actually lend meaningful amounts and totally transform the market. How secure and reliable is your technology and how do you ensure that borrowers pay as at when due and stay within the terms and conditions of the contract for securing a loan? Making sure that our technology is strong and secure enough to motivate repayment is our core business. When we started, people said this wouldn’t work in San Francisco, Los Angeles and Mexico because very smart tech gurus will look for ways to break into the system, but over the years, our lock has been very resilient. We have tested it at very large scale with hundreds of thousands of devices all over the world in countries like Indonesia, Nigeria and India and our lock has held up. We have an amazing technical team coming from Google, Facebook, leading original equipment manufacturers (OEMs) and chipset manufacturers. For us, that security is our number one priority. We have also spent a lot of time monitoring ways that people can

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Considering that there is already lending for smartphone available in the country, how do you intend to make sure that Payjoy is successful in this market? Lending for smartphone purchase tends to only be available to the top 5-10% of the population. People that already have plenty of money, documented income, credit history are the ones that the system already works for. Payjoy is aiming to solve it for the other 90-95% of the population that do not have any formal income or credit. We can make this a profitable business for the banks, fintech companies, microfinance institutions to reach the low income segment of the population because we reduce the risk with our locking technology which will cut the default rate. I know in Nigeria, financial inclusion is a major topic, and we see ourselves as being a necessary ingredient for people to really reach to the 80% percent of the population otherwise it’s incredibly difficult to lend money when you know nothing about people without collateral or address verification. With technologies like this, people are usually concerned about the security of information on their smartphone devices. How secure is data on the device with Payjoy? This is something we take very seriously. We play in an ecosystem with Google, Android, leading OEMs and we have very close relationships with them and we rely on their security, so they enforce certain things. We just touch a different part of the phone and we do not touch information on the phone. When we lock your phone, we don’t have the capability to access personal information. The partners we work with are the only ones that can see your information.

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How have you been able to deal with the strict regulation of technology in Nigeria to ensure that you wouldn’t have a hurdle in future? Every country is unique and has its own challenges. One of the reasons why we are very happy to be a technology provider in Nigeria is because it allows us to be more scalable, and so, we purposely go for fairly minimal level of integration and that’s why we don’t touch personal identifiable information. We adhere to all local regulatory and tax compliance which is necessary. But we are not licensing ourselves as a lender, we are not providing capital and that makes it much easier for us to expand across the globe. Seeing that technology is indeed very dynamic, are there any plans for Payjoy to expand into other services apart from smartphone locking technology? Our goal is to unlock access to finance for people around the world by reducing risk. The first technology we developed was a smartphone locking technology which is the collateral and collection piece. The next technology we are developing is a smartphone scoring technology which will be made available to any company that would want to use for data. Initially, we had thought of looking to develop locking technology for other devices such as TVs, laptops, PCs, etc. but what we realised is that if we expand from smartphones, the best next step was cash loans to buy anything else, which is more useful than locking other devices. Payjoy raised $40million from top venture capital firms, how do you plan to keep raising capital and what do you intend to use the funds for? Our most recent raise was $20million series B equity raise from Greylock Partners with participation from Union Square Ventures, EchoVC and Core Innovation Capital. The two things we are doing with this money is that we are continuing to invest in our technology to remain the global leader in smartphone locking technology and the second thing is hiring more people as we expand to help build our relationship with local partners.

Tuesday 14 April 2020

BUSINESS DAY

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

SA to Enugu Governor on ICT urges youths to embrace digital skills acquisition Jumoke Akiyode-Lawanson

igerian youths have been advised not to be carried away by the aphorism of ‘leaders of tomorrow’ but should rather embrace entrepreneurship and digital skills to remain relevant in the future economy. Nnaemeka Ani, the special adviser to Ifeanyi Ugwuanyi, Enugu State Governor, on Information and Communications Technology (ICT) has stressed that young people must prepare themselves to face emerging digital revolution. He said that more than ever, it is vital for Nigeria to prepare her youth for the digital economy and the future of work. Ani said that with 60 percent of the country’s population identified as young people, it is now pertinent to note that the labour market of the future will require new skills including digital fluency, creative thinking, problem-solving, collaboration, empathy and adapt-

ability. The SA on ICT to Enugu State Governor made these remarks while fielding questions from journalists in the State recently, adding that appropriate action will help the country to harness this promising demographic dividend. Speaking specifically on proactive stance of the State

to reduce the risk of massive labour substitution and endemic unemployment, especially at post-COVID-19 pandemic era, he said the administration of Governor Ifeanyi Ugwuanyi is enabling the youths to leverage the new entrepreneurial and economic opportunities associated with the digital economy.

Ani who until his appointment was the chairman of Mexygabriel Nig Ltd; chairman, Njalo Technologies Limited – promoters of Njalo.ng; co-founder of GrassRoots.ng and other businesses, said, while some steps are being made at the country level in preparing the youth for a digital economy and the future of

Facebook invests additional $100 million to support news industry during the Coronavirus crisis …Includes $25 million in emergency grant funding for local news Campbell Brown

he news industry is working under extraordinary conditions to keep people informed during the COVID-19 pandemic. At a time when journalism is needed more than ever, ad revenues are declining due to the economic impact of the virus. Local journalists are being hit especially hard, even as people turn to them for critical information to keep their friends, families and communities safe. Today we’re announcing an additional $100 million investment to support the news industry— $25 million in emergency grant funding for local news through the Facebook Journalism Project, and $75 million in additional marketing spend to move money over to news organizations around the world. Through the COVID-19 Community Network grant program, direct funding is helping journalists cover

important stories when we all need them most. We’re building on this work and will direct a portion of these funds to publishers most in need in the hardest hit countries. The first round of these grants went to 50 local newsrooms in the US and Canada. Here are some examples of how they’ve used the funding to support their COVID-19 news coverage: • The Post and Courier, South Carolina Took down its paywall for coronavirus stories. It will use the grant to cover travel costs and remote work capabilities to extend coverage to rural, news desert portions of the state. • Southeast Missourian, Missouri Publishing email newsletters highlighting coronavirus coverage. The newspaper will use its grant to bolster remote work technology and on contingency plans for reaching elderly readers should print distribution be disrupted. • El Paso Matters, Texas www.businessday.ng

New local online news organization launched earlier this year by former El Paso Times editor Bob Moore. The team will use their grant to hire freelance reporters and translators to expand coverage of coronavirus in El Paso and across the border in Ciudad Juarez, Mexico. “This money will not only help keep journalists reporting right now amidst the crisis, the funding will also fuel opportunities for local media to accelerate business transformation toward a more sustainable digital footing,” said Nancy Lane, CEO of Local Media Association. “Local news organizations, especially hyper-local news organizations including those serving black and other underserved communities, have experienced challenges with the sustainability and distribution of news and information in the current media environment. COVID-19 has exacerbated an already existing crisis and our jobs have just gotten tougher. With such a sizable

infusion from Facebook, local news organizations across the country will benefit as will our readers, our viewers and our listeners,” said Janis Ware, publisher of The Atlanta Voice. This commitment builds upon $300 million we’ve committed already to serving journalists around the world through diverse and inclusive news programs and partnerships, including Report for America, the Pulitzer Center, the Community News Project and the Facebook Journalism Project’s Local News Accelerator training program. If people needed more proof that local journalism is a vital public service, they’re getting it now. And while almost all businesses are facing adverse financial effects from this crisis, we recognize we’re in a more privileged position than most, and we want to help. Campbell Brown is the VP Global News Partnerships, Facebook.

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work, Enugu State Government has taken meaningful actions to address the yawning skills-gap and digital infrastructure inadequacies bedevilling the State. “The future economy demands that Governments at different levels wear their thinking cap. In Enugu State, we are fortunate to have an administration that is given to creating responsive education systems. This entails serious reviewing and updating of the education apparatuses at primary, secondary and tertiary levels,” he said. According to Ani, equipping our young people with technical skills like digital fluency will empower them to assume responsibilities like coding and virtual designing, which will be in demand in the digital economy. “Also, formulating policies for the digital economy is critical subject matter here. If you consider the uncertainties of the technological revolution and the consequent susceptibility of the digital economy to cyber-crime

and monopolies, the State Government is guided by regulatory policies that keep stakeholders in check. Such policies are helping to create an environment in which young people’s digital enterprises can grow, and in which appropriate education and employment opportunities will be accessible to all people irrespective of position in the society,” he said. Ani further promised that the State Government will keep expanding digital infrastructure, stating the government’s willingness to work with ICT companies to connect the State with digital infrastructure, such as fibre optic networks, and improving access to electricity and digital devices which are highly important to improve connectivity within the State. He called for more collaboration between governments, multinational development banks and the private sector to create room for innovative financial models which promote upskilling among entrepreneurs.

COVID-19: Konga assures on deliveries of essentials to last mile Jumoke Akiyode-Lawanson

onga, leading ecommerce company, has assured Nigerians of its utmost commitment to ensuring that essential deliveries reach them, irrespective of their locations, especially during the current shutdown of the country in order to slow down the spread of coronavirus. ‘‘We are structured for times like this and will not disappoint with critical supplies and that is why our strategic logistics/retail stores will remain open in many states across five economic zones,’’ said Nnamdi Ekeh, Co- CEO, Konga. Indeed, the Federal Government has enforced a total shut-down of the country as a means of curbing the spread of COVID-19. Earlier, bans had been imposed on mass gatherings, with airports, markets, schools and religious gatherings, all as part of preventive measures. In addition, Nigerians had been strongly advised to observe social distancing and to spend more @Businessdayng

time at home. However, Konga says it had anticipated the potential critical nature of the coronavirus pandemic, for which it displayed a high-level emergency readiness. The company says that weeks before the pandemic started spreading rapidly across Nigeria, it had internally activated a comprehensive preventive compliance system which drew widespread commendation. Konga had also set up a N10m intervention fund, amongst other incentives which it has started disbursing via shopping vouchers, to ease the impact of the COVID-19 scourge on Nigerians. And with the shut-down sparking fears among Nigerians, Konga assured that it would continue to ensure that deliveries of essential materials such as medicine, groceries, food items, health equipment and other important home needs are delivered to the last mile, through Kxpress, its internally owned logistics company, irrespective of customers’ locations nationwide. ‘‘We are available online 24 hours,’’ Ekeh said.

Tuesday 14 April 2020

BUSINESS DAY

Investments

ENERGY INTELLIGENCE

Market Insight Companies Commodity Tracker Policy

OIL

GAS

PETROCHEMICALS

POWER

Analysis

Marginal field bid rounds: Doing things right or doing the right things? ISAAC ANYAOGU

he Federal Government of Nigeria is holding a bid round for marginal fields in a few weeks which is expected to help raise capital and shore up fallen oil income but it could not have chosen a worse time. TImipre Sylva, Nigeria’s minister of state for petroleum resources has received the approval of the president to hold the marginal field bid round. Officials of the ministry of petroleum resources have now confirmed that this would happen soon. The current fall in oil prices which has crimped oil earnings is unarguable the major driver behind this decision. Federal allocation looks set to fall below N600billion next month unless oil prices recover, pushing the Federal Government to forage for other ideas to raise revenue besides depending on monthly crude oil sales. The current APC-led Federal Government has not been shy about bold reforms in the oil and gas sector. But it has excelled at prioritizing the inconsequential. For example, in the past five years, oil-producing countries have been enacting progressive fiscal terms for their energy sector, Nigeria has been doubling down on regressive regulations. Last year, Algeria passed a new hydrocarbon law aimed at attracting foreign investment into its oil and gas sector even collaborating with five major international oil companies operating in the country and cut the total tax burden on international oil companies (IOCs) from 85 percent to around

60 - 65 percent. Nigeria, on the other hand, announced plans to recover $62 billion from International Oil Companies (IOCs) whom it accused of underpaying royalty rates. Never mind, it was the government’s decision not to review the rates when expired two decades ago. In November, Nigeria reviewed the Deep Offshore and Inland Basin Production Sharing Contract (Amendment) Act, 2019 which requires an adjustment of the revenue due to the Federal Government from production sharing contracts (PSCs) whenever the price of crude oil exceeds $20 per barrel in real terms. While these are fine reforms, they are unsuited for an environment where rivals are offering juicy terms for investments. The impact of these poorly-timed reforms is that the country is yet

to see a significant investment in over a decade. Nigeria is doing the same thing with the decision to hold a marginal field bid round now when oil prices are unstable and when it has yet drafted competitive fiscal terms for its oil. The danger for prospective investors is that pricing models used to acquire fields could become unrealistic in a short time. Many will then be forced to abandon the fields. Nigeria’s marginal fields’ accounts for less than five percent of total output. An investor’s guide to Marginal Oil field acquisition prepared by the government says Nigeria has an estimated 2.3 billion barrels of crude oil reserves in over 183 fields classified as marginal however despite this potentials, marginal field still contribute poorly to Nigeria’s total production.

According to a report by the Department of Petroleum Resources (DPR), only 9 marginal fields are currently producing from the 30 fields awarded during the last bid rounds. There is no telling if the new ones that would be awarded will succeed. “Perhaps owing to lack of experience and due to the fact that it was the first marginal field licensing round, some of the licensees entered into financial and technical arrangements with foreign partners without proper due diligence which, in turn, failed to bring some of the aspirations of the licensees to reality,” Bloomfield law Practice Investors Guide note on Marginal fields bid round said. Since marginal fields are oil fields that IOCs abandon because of limited commercial potential, it provides opportunities for lo-

How to choose a viable field – by Ayodele Oni T he Minister of State for Petroleum, disclosed plans for a marginal oil and gas fields licensing round, this year. Practical issues and information for wouldbe bidders and enthusiasts. A key consideration, around marginal fields bid rounds, is to have more Nigerians participate in upstream activities (and amongst others, reduce capital flight). Ditto for the indigenous sole risk regime. The Petroleum Act, provides the statutory framework for farm-out of marginal fields in Nigeria and there would always be guidelines issued for any relevant bid round. International Oil Companies are allowed to negotiate farm-out of marginal fields with bidders and Ogbele field, located onshore & carved out of oil mining lease (OML) 54, was the first marginal field to be so farmed-out pursuant to the Petroleum Act. As stated, the relevant guidelines issued before any bid round, will state the process, stages & application requirements (such as pricing, capacity, qualifica-

tions etc) for entities interested in bidding. It is likely that this time around, much of the process will be online. Lessons from advising some of the players in that segment- wrong technical & financial partnerships is a key reason for failure. Not all holders succeed in generating www.businessday.ng

wealth from their fields. Thus, due diligence- legal, technical & commercial, of would-be partner(s) is crucial. Agreements between/amongst members of consortia & amongst winners and subsequent partners, must not be lopsided. Engage experienced lawyers to hold hands in

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this case. This is particularly where indigenous players seek to involve experienced foreigners/ technical partners. Due diligence, on the relevant fields, is crucial, considering the sunk cost involved, the capitalintensive nature of the sector & cost of failure. The entire contractual structure and arrangements must appropriately cater to adequate risks assessment and allocation. To reduce the likelihood of losing several millions of dollars, financing and technical documentation should be adequately drafted with thorough risks allocation and commercial considerations. Due thought should be given to likely future partnerships/ exits, The entry strategy must involve a strong analysis & understanding of relevant technical risks/issues associated with specific fields & measures intended to cater to the same. Key queries are- Is there adequate infrastructure to properly integrate operations? Can the OML holder help? The internal structure should @Businessdayng

cal players to gain oil exploration experience. But in a low oil price environment and with huge exposure to Nigerian banks by local oil and gas companies, few would have the financial resources to participate in a bid round. When this happens, incompetent money bags snap the fields but lack the resilience required to shepherd a field from exploration to first oil, and navigate the murky waters of uncertain oil prices, they grow and itch and abandon the fields. There are forty-five fields in the basket at the DPR. 11 fields were revoked by the DPR making a total of 56 fields available for this bid round, located on land, swamp and shallow water terrains. Marginal fields in Nigeria have an average economic life of between 8 and 15 years and can produce between 4,000 boepd to 30000 boepd per field, it begs the question why the Federal Government has refused to conduct bid rounds in over a decade. But operators have not always been prolific producers. A total of 30 marginal field licenses have been awarded since the policy was introduced and only around 30percent of the fields have reached commercial production. Marginal field production only makes up 3.05percentof crude oil output between 2015 and 2016, says analysts at Bloomfield law firm. While government officials have often expressed an ambition to raise oil production by 4million barrels, it has stopped short of conducting bid rounds for larger acreages, that would help it meet the target. Marginal field bid rounds will do little to achieve this target.

be strong- decision making, HSE issues (especially dealing with the DPR EGASPIN), fund management and reporting, are very critical for success. Your relationship with OML Holder, also crucial Summary- (1) commercial and not emotional decision (2) sufficient data (formal & informal) (3) strong technical & financial arrangement (4) think of entry & exit (5) A-list professional advisors (6) no strange bedfellows (7) strong internal controls. (8) adequate infrastructural support by OML Holder (9) strong negotiation of Farm-out Agreement (yes, mainly standard/ template, but still room to negotiate) (10) strong risk assessment & mitigation strategy (11) understand the policy, regulatory & legal issues. (12) Don’t bid, if things don’t add up (13) engage professional advisors early (14) understand the fiscal issues clearly, including issues around the technical allowable output (15) You swim or sink with good/ bad data, good/ bad partners/professional advisors.

Tuesday 14 April 2020

BUSINESS DAY

ENERGY INTELLIGENCE Condensate to the rescue as new OPEC deal pushes Nigeria oil production below revised 2020 budget DIPO OLADEHINDE

frica biggest oilproducing country can pump more oil from condensates as new historic deal by some of world biggest oil producers is expected to peg Nigeria’s oil production below the revised volume in the proposed amended 2020 Appropriation Act. The Organisation of Petroleum Exporting Countries (OPEC) deal expected to help prop up prices which have been battered by a price war between Saudi Arabia and Russia, and the coronavirus crisis will see Nigeria’s oil production pegged to an awerage of 1.4 million bpd below the revised volume of about 1.7 million barrels contained in the proposed amended 2020 Appropriation Act. New economic realities have change Nigeria’s expectations as Federal Government cut down the 2020 budget by over N320 billion and proposed a new budget of N10.27 trillion against the N10.59 trillion passed by the national assembly. Condensate to the rescue Despite the significant difference between the new OPEC output ceiling and the proposed production capacity in the 2020

budget, Minister of State for Petroleum Resources, Timipreye Sylva expressed optimism Nigeria would still break even and meet its revenue target. The minister noted that Nigeria will now be producing “1.412 Million Barrels per day, 1.495 Million Barrels per day and 1.579 Million Barrels per day respectively for the corresponding periods in the agreement.” He said the OPEC production quota calculation does not usually cover condensate production, which Nigeria has the advantage of using to shore up its oil production capacity with an average of between 360,000 and 460,000 barrels per day. Wood Mackenzie estimates

that export grades aside, roughly 12 percent of Nigeria’s production could be classified as condensate but that it could be higher. This cloudy, but sizeable, chunk of output could keep Nigeria from capping. “Nigeria does produce quite a bit of condensate, but apart from Akpo it’s not really measured because it’s blended into crude,” Wood Mackenzie’s Anderson said. What is condensate Condensates are liquefied once extracted from high-pressure reservoirs, where they exist as a gas. Nearly all oilfields produce some condensates, usually in small amounts. Once it becomes a liquid, there is no

widely agreed way to differentiate condensate from crude. “Previously, due to the whole issue of militancy, quotas were not an issue,” said Gail Anderson, research director at consultancy Wood Mackenzie told Oilprice. But now, “if you start thinking about OPEC cuts, then the definition of crude and condensate becomes quite important.” Irrational Plan Most analysts have questioned the decision of Nigeria’s new production cut of 1.4 million which was arrived based on 23 percent reduction in its October oil production of 1.83 million bpd. “Nigeria cannot afford to cut output to the suggested

levels for long, -- how sincere the government is about such steep production cuts will be swiftly put to a test next week, when the revised 2020 budget is expected to be put to a vote in the National Assembly,” Teneo Intelligence vice president Malte Liewerscheidt said in a note late Friday. Production at these levels triggered by militants attacks in 2016-17 resulted in shortfalls in government revenues and foreign exchange proceeds. This led to “the largest expansion in foreign borrowing in 20 years and the introduction of measures to ration access to foreign exchange that are still in place today,” Liewerscheidt said. Nigeria’s oil production reached 2.3 million barrels of crude per day as of April 5 with an increase planned to 3 million, according to state-owned oil company group managing director Mele Kyari. “This does not look like a good deal for Nigeria, We should have negotiated for a 23 percent cut on production of 2.3 million bpd not 1.83 million bpd,” Charles Akinbobola, energy analyst at Lagos based Sofidam Capital said. Akinbobola said the new OPEC decision will impact the economy adversely considering the economic significance of the commodity.

San Leon give details of $40m received for OML 18 development DIPO OLADEHINDE

ondon Stock Exchange (LSE) listed San Leon Energy has provided inside details concerning funds its expects for development of Oil Mining License (OML) 18 including the newly received $40 million while changing the terms of its lending notes agreement with Midwestern Leon Petroleum. Nigeria focused oil company San Leon said it had received a loan notes payment of $40m further boasting the company is in a “very strong position armed with such significant cash.” “San Leon has around $100 million of additional Loan Notes and interest receipts expected by the end of next year, as well as income from the provision of our technical services to Eroton as operator of OML 18,” San Leon’s Chief Executive Officer Oisin Fanning said in a

statement. OML 18 is located in Rivers State and hosts the Akaso, Asaritoru, Awoba, Bille, Buguma Creek, Krakama, Orubiri, Cawthorne Channel and Alakiri fields. Fanning noted that San Leon expects to receive dividends from its indirect shareholding www.businessday.ng

in Eroton in due course as it looks forward with confidence to updating shareholders on the Company’s growth and progress. Sources said an alternative crude oil evacuation and storage system is being installed on OML 18, with a link running to a Floating Storage and Offloading (FSO) vessel, named ELI

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Akaso. The pipeline is due to be completed, and ACOES commissioned, in May. Incorporated in August 2013, and began full operations in 2015, Eroton E&P won the bid for the 45 percent total interest in OML 18, previously held by the Shell Petroleum Development Company, Total E&P Nigeria Limited, and Nigerian Agip Oil Company Limited which was then producing 10,000 barrels per day (bpd) but later improved to 65,000bpd after Eroton took over. San Leon also announces that it has entered into an agreement dated 6 April 2020 amending the Loan Notes Instrument (the “Amendment”) between the company and Midwestern Leon Petroleum Limited. Midwestern Oil & Gas is the guarantor of the loan notes. Midwestern also has a 13.18percent stake in San Leon and a 60percent stake in Midwestern Leon @Businessdayng

Petroleum. Under the new agreement, San Leon is owed $82million, with another payment of $10million due by October 6 this year. The rest of the loan is due to be paid off in three quarterly payments, starting on July 2021 and being completed by December 2021. “The Directors consider, having consulted with the Company’s nominated adviser, Cantor Fitzgerald Europe, that the terms of the Amendment are fair and reasonable insofar as the Company’s shareholders are concerned,” San Leon said in a statement. San Leon admitted it has received just over $190million in payments from its loan, with around $74million held in cash as of April 7. It has no debt. The loan notes were originally worth $175.5milion. The loan notes have an interest rate of 17percent per year.

Tuesday 14 April 2020

BUSINESS DAY

news

Private sector says willing to help... Continued from page 1

L-R: Joy Egolum, corporate affairs manager (headquarters and Lagos), Nigerian Breweries plc; Ismail Abdul-Salam, Lagos State epidemiologist; Richard Ajayi, company medical adviser, Nigerian Breweries plc, and Chisom Onyeka, corporate affairs advisor, during the presentation of drinks to Infectious Diseases Hospital, Yaba, as part of the company’s CSR donations to government to support the fight against COVID-19.

Millions of SMEs pushed to the brink... Continued from page 1

jobs (59.6 million jobs in 2017), according to a report

by the National Bureau of Statistics (NBS) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN). Ike Ibeabuchi, chief executive of a small-scale manufacturing outfit in Enugu and Abuja, said he has no money to pay his workers because there is no production, distribution and, consequently, revenue. “The year is lost for some of us who are in small and medium businesses,” Ibeabuchi, who produces chemicals, said. “Even after the pandemic and lockdowns, the consumers will be so poor that they can’t buy, and firms won’t be able to raise prices, even though the situation warrants that.” In 2016, oil price fell to below $40 per barrel, leading to low foreign exchange inflows into the Nigerian economy that relies on oil proceeds for 75 percent of its revenue and over 90 percent of FX. Between 2016 and 2017, about 272 MSMEs were forced to shut down, with 180,000 jobs lost, according to a 2017 survey jointly done by NOI

Polls, the Manufacturers Association of Nigeria (MAN) and Centre for the Studies of Economies of Africa. The current situation will be worse, say analysts, with everything from production to supply on lockdown, and recession knocking. Chukwubuike Nnoli, chief executiveofZubnolLimited,producerofpillowsandmattressesin Anambra, has asked his workers to go home. Raw materials he ordered have not arrived and his customers are in their rooms. Temiloluwa Smyth, CEO of Smyth Couture, a fashion designer, said since the pandemic, people have stopped making outfits as there are no events or occasions to wear them to. The national survey of MSMEs conducted by NBS and SMEDAN in 2017 said the number of MSMEs has risen from 37 million to 41.5 million MSMEs. The growth is due to the rising number of survivalists who opened micro businesses in the face of economic slump in order to survive. Small businesses face multiple taxation, high energy cost, poor access to credit and infrastructure, but the current situation has combined with these age-old

Buhari extends lockdown in Lagos... Continued from page 1

day, 13th of April, 2020. I am therefore once again asking you all to work with government in this fight.” Buhari said it was a difficult decision to take, but he was convinced it was the right decision. He said the cessation of movement, physical distancing measures and the prohibition of mass gatherings remain the most efficient and effective way of reducing the transmission of the virus. “By sustaining these measures, combined with extensive testing and

contact tracing, we can take control and limit the spread of the disease. “Our approach to the virus remains in 2 steps First, to protect the lives of our fellow Nigerians and residents living here and second, to preserve the livelihoods of workers and business owners,” he said. He directed the ministers of industry, trade and investment, communication and digital economy, science and technology, transportation, aviation, interior, health, works and housing, labour and employment and education to jointly develop a www.businessday.ng

problems to worsen their plight. “The number of mediumsized enterprises decreased significantly from 4,670 in 2013 to 1,793 in 2017, indicating a 61 percent drop,” the NBS and SMEDANreport,whichcovered between 2013 and 2017, said. This means that 2,877 firms shut down within four years. Degun Agboade, president, Nigerian Association of Small and Medium Enterprises (NASME), said the COVID-19 pandemic and lockdown have been devastating for MSMEs in the country, especially for micro businesses who survive on daily incomes. “The impact has been colossal on us. Everything is totally paralysed and many of us will not be able to recover when all this is over. The impact will be longer than we expect and the government is not doing enough to support us at this time,” he said. Nigeria’s GDP grew 2.27 percent in the last quarter of 2019, according to the NBS, but this is lower than the population growth of 2.6 percent. Bongo Adi, a Lagos-based economist, said this is a bleak period for many companies, especiallytheMSMEs,asnocountry has been able to arrest the virus. He said the impact of the pandemic was beyond what

the MSMEs could handle, adding that government must create palliative measures. “The MSMEs cannot solve this because this is not a normal challenge. Their supply and logistics have been cut off from various sources so there is nothing they can do,” he said. Friday Opara, director, strategic partnership, SMEDAN, said small businesses are on life support now. “The government should do something to help the small businesses in this pandemic, considering their contribution to GDP and to employment,” Opara said. “Some grants and loans should be provided for them at a single-digit interest rate with all the funds at the disposal of the coronavirus committee,” he said. He stressed the need to mobilise small businesses to produce personal protective equipment (PPE) for the hospitalsandthegeneralpublicrather than import them from China. Abiodun Adedipe, economist and CEO, B. Adedipe Associates, said at a Lagos Business School webinar that businesses, including MSMEs, must intensify internet presence and e-commerce while pursuing operational and cost efficiency in order to stay afloat.

comprehensive policy for a “Nigerian economy functioning with COVID-19”. “The ministers will be supported by the Presidential Economic Advisory Council and Economic Sustainability Committee in executing this mandate,” he said. He also directed the minister of agriculture and rural development, the national security adviser, the vice chairman, National Food Security Council, and the chairman, Presidential Fertiliser Initiative, to work with the Presidential Task Force on COVID-19 to ensure the impact of this pandemic on the country’s

2020 farming season is minimised. “This is not a joke. It is a matter of life and death. Mosques in Makkah and Madina have been closed. The Pope celebrated Mass on an empty St. Peter’s Square. The famous Notre Dame cathedral in Paris held Easter Mass with less than 10 people. India, Italy and France are in complete lockdown. Other countries are in the process of following suit. We cannot be lax,” he said. Buhari, however, said that the previously issued guidelines on exempted services shall remain. He stated that the repercussions of any prema-

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the spread of the disease – it’s more likely because the country is simply not testing enough people, sources familiar with the matter told BusinessDay. “The low numbers reported so far in our country only reflect the fact that our scale of testing is lagging behind,” a health expert who doesn’t want his name in print told BusinessDay. Nigeria has only seven lab centres where it tests for the virus. The NCDC said it is ramping up by creating more lab centres that would assist the country to increase the number of tested persons to as much as 2,000 daily. Due to inadequate testing centres, the NCDC restricted the class of persons who can be tested for the virus to only those showing symptoms of fever, cough or difficulty in breathing and who within 14 days before the onset of illness had any history of travel to and more than 24 hours transit through any high-risk country with widespread community transmission of SARS-CoV-2, or who have had close contact with a confirmed case of COVID-19, and/or exposure to a healthcare facility where the virus case(s) have been reported. Data tracked by BusinessDay show that since the first coronavirus case was reported in late February, Nigeria has succeeded in testing slightly over 2,000 persons. That figure is about 11 times less than the 44,000 tests South Africa, the continent’s second largest economy, has conducted, despite recording its index case a week later than Nigeria. But private sector health players who spoke with BusinessDay said they are willing to assist in scaling up testing processes and improve on the turnaround time for the results if they are allowed to come in. “Government needs to open testing to the private sector, and replicate involvement of the private sector in isolation centres. Seven privatelyowned diagnostic centres with 35 to 40 centres across

the country, drive-through testing being considered,” another private healthcare player with about five diagnostic centre across the country said. From the outset, the private sector has shown some dogged response in supporting the government in the fight to contain the spread against the virus. From donating funds into thecoffersofthegovernmentfor purchase of ventilators to buildingisolationandsupportivecare centres, private sector players havesupportedthegovernment andarereadytostepintofurther ramp testing capacity. Nigeria has about seven private healthcare companies that have nearly 45 standard and well-equipped laboratories across the country who could help plug the testing gap, BusinessDay learnt. They include Synlab (formerly Pathcare), Union Diagnostic, AfriGlobal Medicare, Me Cure Healthcare Limited, Echo Lab, and Lancet. The World Health Organisation has recommended scaling up of testing facilities, particularly in African countries, as that is one of the measures to better track and isolate those struck with the virus from the community. But Africa’s largest economy appears to be short of the financial power to expand testing centres, as the government finances are already stretched to limit due to the fall in crude oil prices and production, the country’s biggest earner of revenue. And except the private sectors are allowed to come in, ramping up test centres might be difficult in line with economic realities. When BusinessDay rang the toll free line of the NCDC, a representative of the disease control agency said she was unable to confirm whether discussions were ongoing to get private hospitals involved in testing as the agency has been working with only government-owned ones. “However, if there is a need to bring in private sector players, it would be made public,” the representative said.

ture end to the lockdown action are unimaginable. “We must not lose the gains achieved thus far. We must not allow a rapid increase in community transmission. We must endure a little longer,” he said. “I will therefore take this opportunity to urge you all to notify the relevant authorities if you or your loved ones develop any symptoms. I will also ask our health care professionals to redouble their efforts to identify all suspected cases, bring them into care and prevent transmission to others,” he said. The president also expressed concern about the increase in number of con-

firmed cases and deaths being reported across the world and in Nigeria specifically. “No country can afford the full impact of a sustained restriction of movement on its economy. I am fully aware of the great difficulties experienced especially by those who earn a daily wage such as traders, day-workers, artisans and manual workers,” he said. “For this group, their sustenance depends on their ability to go out. Their livelihoods depend on them mingling with others and about seeking work. But despite these realities we must not change the restrictions,” he said.

@Businessdayng

Tuesday 14 April 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

China-Africa relations rocked by alleged racism over Covid-19

Africans in Guangzhou evicted from hotels and had passports confiscated, officials say David Pilling and Sue-Lin Wong

ino-African relations have been plunged into crisis after African officials reacted furiously to allegations that their nationals were being routinely discriminated against in Guangzhou, southern China, as alleged potential “carriers” of coronavirus. Video posted on social media over the weekend showed people of African descent being evicted from homes and hotels, sleeping rough and being refused service in shops. Widespread reports alleged others have been forced into quarantine despite testing negative for Covid-19. African ambassadors in Beijing wrote a letter to China’s Ministry of Foreign Affairs, seen by the Financial Times, condemning what they said was “the persistent harassment and humiliation of African nationals”. Families with young children had been forced to sleep on the streets and passports had been confiscated, they said. “The singling out of Africans for compulsory testing and quarantine, in our view, has no scientific or logical basis and amounts to racism towards Africans in China,” the letter said, flagging the possibility of a backlash against the Chinese diaspora living on the African continent. A second letter obtained by UN officials and signed by a group called the All African Community in Guangzhou accused China of “being at war” with Africa. “The inhuman treatment, hatred, and outright discrimination of Africans that is currently going on in Guangzhou, China is beyond expression,” it said. In Guangzhou, Alush, an entrepreneur from Chad, said he had

People wearing masks in Guangzhou, Guangdong province. Video posted on social media over the weekend showed people of African descent being evicted, sleeping rough and being refused service in shops © Alex Plaveski/EPA/Shutterstock

not left the city for four months and twice tested negative for coronavirus. Nonetheless, he was told by Chinese authorities to self-quarantine for 14 days because he was African, he said. “I’m really sad, I don’t understand,” he told the FT. “I have my own company here, I pay my taxes, I have a work permit. It’s just not right how they are treating us.” A Nigerian businessman who did not want to give his name said he had been evicted from his apartment and refused entry to a local supermarket when he tried to buy food and water. “I feel like Chinese people hate black people,” he said. “Not everyone hates us, I have some very kind Chinese friends who are like brothers but I hear people call me racial slurs on the subway, in shopping malls, on the streets.” “A lot of my African friends in Guangzhou say they want to go back

to Africa once the quarantine measures lift,” he said. McDonald’s admitted to an incident in which a black person had been refused service, saying it apologised unreservedly and was conducting training on diversity and inclusion. “Currently, all customers are welcome to all our restaurants after body temperature check-up with health QR code issued by the local government,” it said. Africans have long complained of experiencing racism in China. In 2018, China’s national broadcaster televised a blackface skit during the annual Spring Festival gala, the most watched television programme in the world. On another occasion, a Chinese laundry detergent brand had to apologise after it released an advertisement showing a black man getting “washed” into a lighter skinned Asian man in a washing

machine. But the latest events risked lasting damage, experts said, to a political, commercial and cultural relationship that has become increasingly important to China and Africa. In several African capitals, ministers reacted angrily, breaking a normal taboo against open criticism of China, which is a big lender to many African governments. Between 2000 and 2018, Chinese institutions, including the China Development Bank, lent an estimated $152bn to 48 African states, according to the China Africa Research Initiative at Johns Hopkins School of Advanced International Studies. Chinese ambassadors to Abuja in Nigeria and Accra in Ghana were among those summoned by their respective host governments to give an explanation. In Addis Ababa, the capital of Ethiopia, Moussa Faki,

chairperson of the African Union Commission, said he had “invited” the Chinese ambassador to the AU to express “our extreme concern”. Zhao Lijian, a foreign ministry spokesman, said Beijing was taking the allegations seriously. The foreign ministry would continue “close communication with the Guangdong authorities and continue responding to the African side’s reasonable concerns and legitimate appeals,” he said. The Chinese, he added, regarded Africans as “brothers and partners”. One senior official in east Africa said many African governments felt betrayed as Beijing had specifically asked them not to repatriate their citizens when the coronavirus outbreak began in Wuhan. “There was a strong campaign from Chinese themselves to ask Africans not to panic and to keep their students and traders there,” said the official, who asked not to be identified by name. “So there’s a reaction: how could you do this to us?” Eric Olander, managing editor of The China Africa Project website, said the events of recent days had “led to an unprecedented rupture in China-Africa relations”. In recent weeks, China had presented itself as an important benefactor to Africa, making large donations of medical supplies, such as masks and test kits sent by Jack Ma, the co-founder of Alibaba. But, said Mr Orlander, Beijing was in danger of losing that goodwill. “Time is quickly running out for the Chinese side to find a way out before sentiment on African social media metastasises and further limits the options of African leaders to move on and focus on more pressing national priorities with the Chinese like debt relief”.

ADB triples coronavirus funding for members to $20bn Asia-Pacific development bank announces move to help governments battle economic fallout Henny Sender

he Asian Development Bank has tripled to $20bn its funding to help member states deal with the economic fallout of the coronavirus pandemic, as new research suggests the global economy is facing its worst collapse since the second world war. Masatsugu Asakawa, president of the ADB, told the Financial Times, that the multilateral Asia-Pacific lender would further increase the funding if the downturn proves deeper and more long-lasting. “We focused on the demand

side looking at consumption and investment in China and other countries,” Mr Asakawa said. “We are now focusing on the supply side as well. If [the disruption] is worse than our projections, we will revise our outlook and, yes, it is possible to have further packages.” The ADB expects the Asia-Pacific region to grow by 2.2 per cent this year, down from 5.2 per cent in 2019. Mr Asakawa added, however, that the IMF was expected to come up with a more downbeat forecast when it releases its own estimates later this week. “We have to make sure the pandemic doesn’t evolve into a www.businessday.ng

financial crisis,” Mr Asakawa said. The increased funding announcement comes just weeks after the ADB announced a $6.5bn package to help countries in the Asia-Pacific region and the China-led Asian Infrastructure Investment Bank unveiled a separate lending programme worth at least $5bn. The G20 is expected this week to offer lower income countries a moratorium on bilateral government loan repayments, to stave off an emerging markets debt crisis. Data from the latest Brookings-FT tracking index, which compares indicators of real ac-

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tivity, financial markets and investor confidence with their historical averages, suggest the long-term economic consequences of the coronavirus pandemic will be profound. Researchers said the lack of a co-ordinated international response had exacerbated the negative economic impact of the health crisis. The bulk of the $20bn ADB package will go to helping governments finance expanded budgets. But $2.5bn will be in the form of grants and concessional loans to help members procure medical equipment. Loans will also go to financial @Businessdayng

institutions “to rejuvenate trade and supply chains”, the ADB said in a statement. Asian supply chains had already been severely disrupted by the USChina trade war before the coronavirus outbreak. The ADB said it was working closely with other international organisations including the IMF, the UN and the World Bank. But it pointedly did not mention the AIIB. “They are an investment bank,” said Mr Asakawa. “Do they support this kind of assistance? Do they ever offer concessional loans or grants? If so, our door is not closed.”

Tuesday 14 April 2020

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

US stocks slide as investors fear quarterly earnings news The market rallied last week by the most since 1974, but caution has returned Colby Smith, Adam Samson and Daniel Shane

S stocks lost momentum after the biggest weekly rally since 1974 as investors braced for earnings reports that will set out how severe a blow the Covid-19 outbreak has dealt to corporate America. The S&P 500 was down 2 per cent in morning trading on Monday, shaving some of the 12 per cent gain it made last week when dramatic action by the Federal Reserve promised to shore up the economy and credit markets. “We have gotten a lot of the catalysts already to take markets higher,” said Brian Levitt, global market strategist at Invesco. “The problem now is that the next catalyst is going to come from the medical community rather than from the fiscal or monetary side.” Most European markets are closed for Easter Monday. Earlier, equity markets in Japan and South Korea opened the week with declines of more than 1.5 per cent. The CSI 300 index of the biggest listed companies in Mainland China was down 0.4 per cent on Monday. Market attention has begun

to shift to the quarterly earnings season in the US, which will cover the period when the Covid-19 crisis was gathering pace in the first three months of 2020. It will also give analysts and investors an opportunity to query executives on their outlook for coming months. The country’s biggest lenders, JPMorgan Chase, Bank of America, Citigroup and Wells Fargo, are all set to publish their quarterly accounts this week.

They are typically considered bellwethers for the broader economy because of their central position in the financial system. In the past three months, Wall Street analysts have reduced their earnings per share estimates for 2020 for companies in the S&P 500 index by 15 per cent, according to FactSet data. Profits are now forecast to decline 8 per cent this year, which would mark the biggest fall since 2009 during

the financial crisis. David Kostin, chief US equities strategist at Goldman Sachs, said worse could be on the horizon. “Concerned investors have focused on the fact that the first-quarter earnings season will inevitably lead to a wave of downward revisions to analyst estimates,” he said. A decline in forecast earnings would prove problematic, Mr Kostin said, because it means investors would need to accept

more stretched price-to-earnings valuations, or stock prices would need to fall further. The S&P 500 is down around 14 per cent for the year, having recovered over recent weeks from a sharper fall. In commodities, oil prices zigzagged after Saudi Arabia and Russia reached a deal to make the biggest production cuts on record. Brent crude was recently down less than 1 per cent, at $31.33 per barrel, having earlier climbed as high as $33.99. US marker West Texas Intermediate ticked up over 1 per cent to $23.10. The choppy trade came after Opec+ producers agreed to remove almost 10m barrels per day from global supply. The cuts start from May but gradually diminish in size before expiring in April 2022. “The problem is that Opec+ have taken too long to get to this point,” said Warren Patterson, head of commodities strategy at ING. “We are seeing significant levels of demand destruction right now,” Mr Patterson added that there was “downside risk” to crude prices, given a global glut was likely to last through the second quarter, but that the deal could put a floor under Brent crude of about $25 per barrel.

What does the US-backed Opec+ deal mean for the world? Coronavirus looms large over an agreement held together by diplomatic acrobatics Anjli Raval, Derek Brower and David Sheppard

pec agreed the biggest ever oil output cuts with the backing of Russia, the US and the wider G20 group of nations in an effort to bolster crude prices that the coronavirus outbreak has helped push to 18-year lows. The question now is what the agreement means for the future of the energy industry and whether it will help oil prices recover. How does the agreement stack up? After four days of talks, Opec and allies including Russia agreed on Sunday to cut a record 9.7m barrels a day of production — close to 10 per cent of global pre-crisis demand. A concession to Mexico, allowing it to curb production by a smaller proportion, meant the deal fell slightly short of the 10m b/d initially agreed on Thursday. Curbs of 9.7m b/d for the socalled Opec+ group will stay in place for May and June, after which the cuts will shrink to 7.7m b/d for the rest of the year, and then 5.8m b/d from January 2021 to April 2022. Saudi Arabia and its Gulf allies,

which accelerated production over the past month as part of a price war, will make bigger cuts that people close to the kingdom said would take the tally for Opec+ countries to 12.5m b/d. Contributions from other producers, such as the US, Canada and Brazil could take the tally over 15m b/d. Yet these are not official curbs as part of the deal, but production declines caused by weak oil prices. The level might be even higher — closer to 20m b/d, Opec delegates said, if oil purchases by countries for strategic stockpiles are included. How did global oil diplomacy enable the deal? The oil cuts deal is double the size of the curbs agreed following the global financial crisis and brings to an end a price war between Saudi Arabia, Opec’s de facto leader and largest producer, and Russia, a non-member that last month refused to sign up to more modest cuts. Aside from bringing Russia’s president Vladimir Putin and Saudi Arabia’s crown prince Mohammed bin Salman back together, the cuts received the support of US president Donald Trump as well as broad www.businessday.ng

backing from G20 nations and the International Energy Agency, founded in the 1970s to protect western consumers from Opec. That underscored both the scale of the crisis and diplomatic footwork needed to bring it together. Will it rescue the oil market? Despite its historic scale, the deal will not end a far greater collapse in global demand caused by the coronavirus pandemic, which has pushed consumption down by 30 per cent of the global total, about the equivalent of Opec’s entire output. For now, the scale of that demand hit will dominate the market. To find a market for their oil, producers will also need to keep discounting their barrels. This will be another headwind to any price rally. The Opec cuts will not begin until May, and some of the supply onslaught of recent weeks is already making its way to the market. The deepest phase of the cuts will last only through May and June too. Oilstorage tanks and pipelines could be full by then, leaving no option but to stop producing oil. Roger Diwan at IHS Markit said that while the deal removed the spectre of an “aggressive price war”, it “does not solve the distress physi-

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cal markets are likely to face in May and June”. Traders will also need to decide whether they believe Opec producers will fully deliver their cuts, especially as prices rise. Russia committed to cut 2m b/d, but in previous deals in recent years it struggled to honour cuts a tenth of that size. Iraq’s compliance record is also patchy. Bill Farren-Price of RS Energy Group said he believed the cuts would in reality amount to 6.8m b/d or less. Compliance would crumble if prices rose too, admit Opec delegates. “As soon as prices rise, it will be like herding cats,” said one official. Why did Trump push for the deal? Opec has been a constant irritant for the US president. Even before he assumed office, he railed against the cartel. Once in the White House, Mr Trump repeatedly berated the group and demanded it produce more oil to drive gasoline prices lower. A couple of weeks ago, he even he hailed the price collapse as like “a massive tax cut”. But it was Mr Trump that instigated this Opec deal seeking to raise oil prices — a stunning pivot in an election year. @Businessdayng

His about-turn was a big win for executives in the US shale patch that lobbied hard for him to intervene, knowing their businesses — and, as Mr Trump noted, thousands of jobs in oil-producing states — were on the line. Harold Hamm, a friend of the president and head of one of the Bakken shale’s biggest oil producers, spoke two or three times a week to Mr Trump in recent weeks, urging the president to be tough on Riyadh and Moscow. Mr Trump agreed. “This will save hundreds of thousands of energy jobs in the United States,” the president said in a tweet on Sunday evening, while thanking Russia and Saudi Arabia for “the big oil deal”. Even the American Petroleum Institute, big oil’s most powerful lobbying group in Washington, which had opposed any intervention in the market, welcomed the deal on Sunday and praised Mr Trump’s leadership. While he gains a win for helping to secure the deal, Mr Trump is also likely to avoid the wrath of consumers. “Low gasoline prices are not a big thing at a time when most everybody is at home and can’t drive anyway,” said Daniel Yergin, head of IHS Markit.

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BUSINESS DAY Tuesday 14 April 2020 www.businessday.ng

CEO in focus

Yetunde Taiwo: Bold petroleum engineer in charge of a $700m domestic gas project DIPO OLADEHINDE

etunde Taiwo is a petroleum engineer and CEO of ANOH Gas Processing Company (AGPC), the firm of one of the largest greenfield gas condensate development projects in Nigeria worth $700 million. The firm under the leadership Yetunde Taiwo is one of major momentum to the domestic gas aspiration of the Federal Government for increased power generation and industrialization. Gas is one of the hydrocarbons Nigeria has in abundance, yet under-utilised. With the need for increased energy generation, industrial production and household consumption, the country is beginning to explore measures to take advantage of stranded investment in the natural gas space. Yetunde Taiwo, is the CEO in charge of AGPC, a company expected to manage a $700Million midstream development that will monetise 300Million standard cubic feet produced every day from the Assa North /Ohaji South fields, straddling Shell-operated Oil Mining Lease(OML) 21 and Seplat operated OML 53, onshore eastern Nigeria. Assa North-Ohaji South project The AGPC projects involve the development of the Ohaji South gas and condensate field located within the license block OML 53 and the Assa North field in license block OML 21. The two fields are together expected to produce 600 million standard cubic feet per day (Mscfd) of gas, equivalent to approximately 2.4GW of electricity. The generated electricity is sufficient to supply for approximately 2.4 million homes. On funding, the phase one development of ANOH midstream is expected to cost $700million, of which the JV of Seplat and NGC will fund $420m. AGPC proposes to raise $280m in debt comprising senior tranche and vendor financing. Also, the Assa North and Ohaji Southfields are expected to contain reserves of 4.3 trillion cubic feet (Tcf) of gas in addition to 215 million barrels (Mmbbls) of condensate. The project will be connected to large-scale gas reserves to Nigeria’s main demand centres through the Oben hub owned by Seplat. The produced gas will be treated at the processing facility owned by SPDC JV and

Taiwo

then forwarded through the Obiafu-Obrikom-Oben pipeline network. Asides the projected $261 million as annual revenue from its Assa North /Ohaji South (ANOH) gas and condensate field project, Taiwo takes hold of the biggest Domestic Gas project promoted by an Independent, indigenous Nigerian company. Of the total gas production, 300Mmscfd will be processed at the new gas processing plant owned by the SPDC JV, while the remaining gas will be processed at the proposed processing plant by SEPLAT Petroleum. The processed gas will be transported to the EscravosLagos Pipeline System (ELPS) and West African Gas Pipeline (WAGP) through a 26km-long spur line connecting to the OB3 pipeline. The produced LPG will be trucked directly to Owerri, while the condensate will be exported to either Shell Bonny and or ENI’s Brass River terminal.

AGPC was incorporated in 2017, is responsible for the project development and operation and maintenance. Seplat holds 50percent stake in AGPC, while Nigerian Gas Company (NGC), a wholly-owned subsidiary of Nigerian National Petroleum Corporation (NNPC), holds the remaining stake. AGPC is run in the model of Nigeria Liquified Natural Gas (NLNG) Ltd, which implies its an Incorporated Joint Venture (IJV) between a private hydrocarbon firm and a Nigerian state hydrocarbon company. In this case, Seplat and the Nigerian Gas Company are co-venturers. Which means that in her role, Taiwo takes hold of the bigticket project expected to create thousands of new jobs, spur domestic gas demand, generate electricity, create an opportunity to diversify revenue of the Nigerian government, strengthen the country’s revenue base and turn Nigeria into a dominant geopo-

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Asides the projected $261 million as annual revenue from its Assa North /Ohaji South (ANOH) gas and condensate field project, Taiwo takes hold of the biggest Domestic Gas project promoted by an Independent, indigenous Nigerian company

litical player in Africa, using its gas resources, just like Australia, Russia or Qatar. A Final Investment Decision (FID) on the project was made in December 2018, with commissioning planned to be completed by the first quarter of 2020. The field is expected to produce between three and 3.4 billion standard cubic feet of gas per day by 2020. Her career Taiwo moved closer to her current position in January 2018, when she was appointed GM Commercial-ANOH. In that position, she was accountable for delivering all commercial agreements relating to the ANOH Gas Processing Company start-up. Those agreements include gas sales and purchase, gas marketing, condensate offtake, CHA (Crude Handling Agreements), LPG offtake and other commercial agreements with lenders and investors. She takes the job three and half years after her appointment as Head of Gas Business at Seplat, the continent’s largest homegrown hydrocarbon producer, where she oversaw the development of one of the fastest-growing domestic gas businesses in Nigeria. As General Manager in charge of Seplat’s gas business, Yetunde leads a team to evaluate all gas projects and provides commercial and investment advice to the company executives. She also manages the long-range strategic objectives for the gas

business, which includes a startup gas processing company to be on stream in 2019. Under the watch of Taiwo, Seplat grew its operated gas production capacity from 300Million standard cubic feet per day (300MMscf/d) to 525MMscf/d. Taiwo was, until August 2015, the General Manager, Planning at NAPIMS, the Investment arm of Nigerian state hydrocarbon company NNPC. She was a member of the second-level management cadre that was retired as Ibe Kachikwu, minister of state at the Petroleum Ministry, swept into office as Group Managing Director of NNPC. Bajela-Taiwo was head of planning and economics at Seplat before she joined NNPC in 2013, as NAPIMS’ GM Planning.Now her role in Seplat has a higher profile. The NPDC/Seplat Joint Venture, which Seplat operates, is currently the third largest supplier of gas to the domestic market, after the NNPC/ Chevron JV and the NPDC/ NDWestern JV. She studied Petroleum Engineering at Nigeria’s premier university, University of Ibadan, where she bagged a Bachelor of Science degree in 1990. After graduation, Yetunde worked briefly with Elf Nigeria Limited (now TOTAL) before launching her career with Chevron Nigeria Limited as a Petroleum Engineer, where she specialized in Production and Reservoir Management. That eventually led to a fifteen-year career spent with Chevron in various positions such as Reservoir Management Team Lead, Planning Advisor, Economics Manager and Project Manager. It was in this capacity that she moved onwards to join BG Nigeria as the first Country Economics Manager in 2007. Soon afterwards, her expanding expertise allowed her movement into Government and independent oil companies in Nigeria before she showed up at Seplat in May 2011 as head of planning and economics. When Yetunde is not preoccupied by work, she enjoys writing as it’s her dream to have her writings published someday. Together with a few of her friends, she manages a non-profit association, ‘Education for Life’ that mentors children between the ages of 10 – 15 and provides educational assistance to indigent female children within her immediate community. Married with two children, Yetunde is an ardent theatre lover and delights in watching plays and cultural shows.

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