BusinessDay 14 Oct 2020

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Foreign Reserve $35.7bn

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28344.04

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NEWS YOU CAN TRUST ** WEDNESDAY 14 OCTOBER 2020 I VOL. 19, NO 671

FOREIGN EXCHANGE

Crude Oil $42.28

I

N300

$-N 450.00 £-N 600.00 €-N 540.00

g

I&E FX Window CBN Official Rate as at October 12, 2020

NTB

FGN

Dangote Cement plc

Axxela NSP-SPV Funding 1 (Natural Gas) PowerCorp plc plc

Spot ($/N) 29-Apr-21 5-Mar-21 23-Jul-30 30-Apr-25 20-May-27 27-Feb-34 386.00 379.00

466.00 1M 616.00 Currency Futures 28-Oct-20 388.88 554.00 ($/N)

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MTN Nigeria plc CP

Benchmark Sovereign & Corporate Bonds

g

0.00

0.00

1.33

4.05

3M 2M 25-NOV-20 30-Dec-20 391.71 394.55

-0.01

0.00

6.36

6.86

6M 12M 31-Mar-21 29-Sept-21 403.06

420.09

0.00

-0.03

7.75

9.44

60M 36M 27-Sept-23 24- Sept-25 497.46

589.09

*NTB - Nigerian Treasury Bills; *CP - Commercial Paper

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Nigeria’s cancer sufferers struggle for care under 10 radiotherapy machines, instead of 200 TEMITAYO AYETOTO

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i g e r i a’s e s t i m a t e d 302,076 populace who battle with cancer are faced with a struggle for remedial treatment under less than 10 radiotherapy machines available country-wide, where at least 200 are required in tandem with the World Health Organisation’s (WHO) recommendation of one machine per one million people.

They equally suffer 96.6 percent

deficit of clinical oncologists as less than 100 oncologists practise in Nigeria instead of 3,000, Abubakar Bagudu, president, African Organisation for Research and Training in Cancer (AORTIC) said during the African Cancer CEO’s Forum held virtually.

Despite the disease being preventable and curable, cancer still leads to 13 percent of deaths in Nigeria on the back of late presentation, lack of awareness, poor prognosis and patient’s denial.

By the time they approach hospitals, the malignant disease would often have advanced to a stage where radiotherapy is unavoidable, since access to comprehensive cancer care is so limited.

At that point, some meet with needless and untimely deaths as it takes about four months to get the diagnosis of cancer to the appropriate cancer clinics.

“Most cancer patients are at risk Continues on page 30

Government uncertain of Eurobond issuance in 2021, but will review tax, fiscal laws ... anticipates worse macroeconomic outcomes H2 ONYINYE NWACHUKWU & DOZIE EMMANUEL

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inister of Finance, Budget and National Planning, Zainab Ahmed, says government is not yet sure whether it would issue any Eurobond next year for budget funding, a decision that would largely depend on developments in both the local and international Continues on page 30

Inside

Government gets timely reminder of constraints in solely funding infrastructure P. 2

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news Is CBN having an overbearing influence on the power sector?

ISAAC ANYAOGU

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n the last few weeks, the Central Bank of Nigeria (CBN) has issued a directive authorising banks to ring-fence collection accounts of electricity distribution companies (DisCos), and now it is leading the implementation of a national metering plan raising concerns that it is having an overbearing influence on the sector.

On the flip side, in the last five years alone, the CBN has provided over N1.3 trillion in bailout funds for the troubled power sector. So, the bank believes it has a right to a say.

The concern is that it may be displacing the regulator even though it lacks the requisite technical knowledge to regulate the sector.

“In recent times, the CBN seems to be dictating certain important developments in the power sector, with very little inputs from other key stakeholders such as the Ministry of Finance and the NERC as the power sector regulator,” said Chuks Nwani, an energy lawyer.

Some see its intervention in the Presidential Metering Initiative as an example. The Bulk Procurement of 6.5 million meters, which the government negotiated with labour unions, willcost$405million.TheWorld Bank is providing $200 million while the CBN will provide the balance of $205 million.

The scheme will be handled inthreephases.Inthefirstphase, there will be direct financing of all meters ready for quick deploymentincludingmetersat theports,thosein-countryavailable stock, committed orders by MAPsbetweenSeptember2020 and April 2021.

In the second phase, the CBN financing and procurement targeted exclusively at local manufacturers and assemblers will be concluded in the fourth quarter of 2021.

The last phase would be the World Bank International procurement, which gives a 20-percent buffer allowance to local manufacturers to order to improve their competitiveness and encourage joint ventures with local companies by December 2022.

The CBN will provide funding in the first two phases, and some analysts fear that the CBN’s intervention without a framework designed by the regulator may imperil the metering plan.

Though the Nigerian Electricity Regulatory Commission (NERC), the ministries of Finance and Power among other stakeholders were at the meeting where this plan was discussed, sources privy to the discussion say the CBN is acting as a super-regulator, with widening influence over the sector.

According to the Federal Government, the Presidential Metering Initiative was created due to the inability of

local meter manufacturers assemblers to meet immediate demand for prepaid meters.

This informed the suspension of the 35 percent levy on meters.

Some meter manufacturers say they can close the metering gap estimated at 6.5 million. There are currently nine local meter manufacturing firms in Nigeria with a capacity to produce about 100,000 meters monthly according to operators.

“We can close the metering gap in less than 5 years,” said Yahaya Yahaya, company secretary of Momas Electricity Meters Manufacturing Company Limited (MEMMCOL), a local meter manufacturing outfit.

But it is doubtful consumers are willing to wait that long.

The absence of meters and the problem of estimated billing it creates constituted over 65 percent of customer complaints against DisCos. Providing meters is one way the government is trying to placate customers over the tariff review, an indication that an immediate solution is required.

Yet, the CBN says it will only fund local meter manufacturers and assemblers, a decision some industry operators say could derail the plan. When the regulator announced its Meter Assets Provider (MAPs) Policy in 2018, in recognition of the country’s manufacturing challenges, allowed both manufacturers and importers of fully built meters or semi-built meters to participate.

The challenge with the CBN’s rule, according to some operators, is that it is discriminatory against MAPs who are already fulfilling the terms of their respective contracts based on a valid MAP regulation by NERC. This could become litigious as excluded players may perceive it as giving an unfair advantage to their peers.

It could create the risk of DisCo collusion with local meter manufacturers like it happened in the CAPMI metering scheme, where despite advance payment by customers for meters, many customers were not eventually metered, and their funds also not returned. Already, local manufacturers say standards presented by different DIsCos are not uniform, which is raising their operational cost.

It is possible that the CBN intervention could leave DisCos with more debts on their books as it is not clear who will bear the cost of procuring the meters. DisCos and electricity customers are already impacted by the N213 billion intervention by the CBN under the Nigeria Electricity Market Stabilisation Facility (NEMSF) and the N701 billion Power Sector Payment Assurance Guarantee, which form part of the high retail electricity tariffs being paid by electricity customers.

Analysis

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Government gets timely reminder of constraints in solely funding infrastructure FAVOUR OLAREWAJU

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igeria needs private capital to address a yawning infrastructure deficit that is holding the economy back.

At a webinar titled “Public Private Partnership Approaches to Rapidly Upscaling Nigeria’s Economic Infrastructure,” Tuesday, the speakers highlighted the constraints of government funding of infrastructure.

Mobolaji Balogun, CEO of ChapelHill Denham, said Nigeria’s budget translated into 7 percent of GDP. Out of this, capital expenditure (CAPEX) takes up just 29 percent

(N3.85trn) of the proposed 2021 N13.08 trillion budget or worse off barely 2 percent of GDP. This proposed share of capital spending for 2021 is an improvement from the current 2020 allocation of N1.96 trillion, which is 18.9 percent of the 2020 budget, Balogun said.

However, Balogun said Nigeria still had to go a long way in improving infrastructure spending to have the desired positive changes.

“Infrastructure expenditure needs to increase by 20 percent yearly; precisely, the estimated allocation to the Ministry of Works and Housing needs to be at least 10 times of its $1 billion to reach $10-15 billion in having sub-

stantial impact on the sector and economy,” said Balogun.

Recently, the minister of finance stated Nigeria needed an estimated N36 trillion annually for the next 30 years to solve Nigeria’sinfrastructureproblem.

This means the sum spent by the government annually on capital projects is significantly short of the sum needed to tackle Nigeria’s infrastructure problems.

Babatunde Fashola, minister of works and housing, agrees that government funding is not enough but reflects on the tedious process of Public-Private Partnerships (PPPs).

Contrary to the common assumption that PPPs automatically take effect immediately they are announced,

the PPP process is not that straightforward given the fact that the objectives and profit accountability for private and public ventures differ.

In highlighting the tension and difficulties of PPPs, Fashola mentioned that in developed countries, private sector only funds about 3040 percent of capital projects while the remaining 60 percent is funded by government Also, these advanced economies have MSMEs making up 60-70 percent unlike that of Nigeria.

Private sector previously insisted on federal support agreement in case government defaults and to prevent

Continues on page 30

President Muhammadu Buhari (r), receiving letter of protest of the Lagos #EndSARS protesters from Babajide Sanwo-Olu, governor, Lagos State, after his meeting with the President in Abuja, yesterday.

Nigeria’s private sector surpasses peers on Covid-19 intervention STEPHEN ONYEKWELU

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igeria is spending 57 times less than the global average per head on coronavirus patients. Nevertheless, its private sector has contributed five times more than the global average and people familiar with the disease burden in sub-Saharan Africa are calling for more funding.

Sub-Saharan Africa governments do not have the firepower required to throw a blanket over the virus that other regions have, experts say. The world is spending over $2,000 (N766,800) per capita to combat Covid-19, while Nigeria for instance is spending $35 (N13,419) per capita (as at July 2020).

The private sector accounts for 5 percent of total funding mobilised versus less than 1 percent in other parts of the world. Nigeria’s private sector is doing comparatively

well. However, sustainable measures are required to fill the financing gap in the long run.

“Evidence points to the fact health pandemics do more damage over the medium and long term in Africa than in other regions of the world,” Aigboje Aig-Imoukhuede, chairman, Africa Initiative for Governance and co-founder of Nigeria Solidarity Support Fund, said at a World Bank Group’s event that brought together African policymakers, international institutions, bilateral development partners, and representatives from the private sector.

The objective was to provide a platform for African policymakers to highlight the acute challenges faced in their fight against the pandemic and efforts to mount a crisis response and promote a strong and sustainable recovery; take stock of promising country experiences and support provided by the interna-

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tional community in Africa’s fight against the pandemic; and agree on additional concrete measures from both public and private sectors to fill the large medium-term investment and financing needs that countries are facing.

“From HIV/AIDs to Malaria to Ebola, other regions of the world may have put each pandemic to bed, but 10-20 years thereafter, Africa still carries an unacceptable disease burden. Some think that global health pandemics do as much damage to African economies as do global financial crises,” Aig-Imoukhuede said.

As the world rolls out responses to the challenges of Covid-19, such as digital reskilling programmes, experts say concerted efforts are required to avoid inadvertently creating a global underclass of extreme poor, underprivileged, disadvantaged citizens mainly in Africa who cannot access these @Businessdayng

mainstream solutions.

Aig-Imoukhuede believes the Africa response must be globally funded and locally relevant, supported by the public sector and private sector as partners in the business of saving lives.

This involves engaging innovative financial platforms such as the Nigeria Solidarity Support Fund, which is established for Nigeria by Nigerians in partnership with the Global Citizen organisation. It is an all-digital crowd sourcing philanthropic platform that is sustainable transparent that support the vulnerable citizens of Nigeria. The Support Fund has targeted $50 million in under a month and already 10 percent on the way.

Other measures suggested include funding from the international financial institutions starting with debt relief.

This also demands that the international private sector and Africans in the diaspora come to the table.

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NES 26: Building partnerships for resilience!

FRANKLIN NGWU

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rom the 26-27th of this month October 2020, a most important discussion on the socioeconomic future of Nigeria will take place. It is the 26th conference of the Nigeria Economic Summit Group (NESG) in partnership with the Federal Ministry of Finance, Budget and National Planning with the theme “Building Partnerships for Resilience”.

Given our current dire socio-economic situation, the summit with its focus could not have come at a better time. Before COVID-19, Nigeria faced many socioeconomic challenges. With COVID-19, our situation has significantly worsened with almost all socio-economic variables heading south-inflation, unemployment, poverty, inequality, foreign direct investment, insecurity and many others.

Just as COVID-19 kills more people with underlying health challenges, our current socio-economic situation makes us a good victim of COVID-19.

Whereas the Federal government is responding through different measures particularly the N2.3 billion National Economic Sustainability Plan, more efforts and activities are urgently required.

This is the focus of the NES 26! Aptly described as a “Big Conversation for Action’’, the summit among other factors aims to “(i) reflect on the state of the economy, rethink our economic fundamentals and deliberate on the impact of the global epidemic. (ii) Highlight the role of Nigeria’s

sub-nationals as frontiers for national development (iii) Explore emerging trends in the horizon that will enable Nigeria to capitalise on new opportunities and (iv) Agree on a compact with clear and decisive actions that commit stakeholders to collaborate and build resilience for Nigeria’s households, businesses, and economy by ensuring that Nigeria meets the SDGs by 2030” Divided into 26 sessions with about 125 speakers, the NES 26 summit is arguably a summit of immense importance for the socio-economic survival of Nigeria.

For instance, one of the eight plenary sessions, “Empowering Sub-Nationals” will focus on how the Sub-Nationals (states and local governments) can be better empowered to unlock their endowments, potentials and competitiveness. As we all know, there is too much emphasis on the Federal government for all our development challenges. While we presently operate a Federal system of governance with three layers- the federal, the states and the local governments, an opportunity for more inclusive and sustainable Nigeria will be to properly examine, formulate and execute policies to enhance the functional effectiveness of the states and local governments.

With infrastructure a key factor for our socio-economic development, a question demanding a detailed answer is the way the Sub-National governments can be better empowered to provide more and better infrastructure for their states and local governments. Asking the question in another way will be to examine other factors that constrain the Sub-Nationals in providing the much-needed infrastructure in our states and local governments. As this session demands high level interrogation and ownership, the panel session will consist of two strategic state governors, leadership of the national assembly, a key member of the 2014 National Conference and globally acclaimed

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With infrastructure a key factor for our socio-economic development, a question demanding a detailed answer is the way the Sub-National governments can be better empowered to provide more and better infrastructure for their states and local governments

expert on empowering sub-nationals. Just as this session and infrastructure are germane to our future existence and growth as a country, so are the other sessions particularly the plenary sessions.

The first session “Nigeria’s Turning Point” will focus on the agreement that the framework we have used in the last 60 years cannot be said to have delivered the desired economic development outcomes and as such the need for a different approach. This approach will be a new synergy or partnership between the Sub-Nationals and the private sector particularly on how the endowments and potentials of the sub-nationals can be better explored and managed by the private sector. Like the session on Empowering the Sub-Nationals, the panel members for this session will include two very important state governors and two very influential private sector leaders with immense impacts on our daily lives.

Just as COVID-19 has suddenly disrupted economies and businesses, so is the search for effective leadership to manage and proactively lead in these uncertain and challenging times especially with our escalating socio-economic challenges. This the focus of the third plenary session. Titled “Leadership in a Time of Crisis”, it is a session with an interrogation inclination to examine the kind of leadership we need in a turbulent environment and uncertain times we are in. It will examine and identify the strategic approaches that our leaders can use in building sustainable and resilient organisations and nations.

To further provide more details on the partnerships, broad based inclusive policies and actions, commitments and investments required is the session on “The Unfinished Business: Meeting the SDGs by 2030”. Given that the achievement of the 17 Sustainable Development Goals (SDGs) will depend on the strategic decisions of our leaders, this session will

identify key actions that should be pursued, and progress required in advancing the three pillars of the SDGs. Related to the pursuit of SDGs is a special session titled “Women in Leadership: Towards the Global Goals”. Driving mainly from the appreciation of the unquestionable positive impacts of our mothers and sisters in domestic, national and global developments, this session will examine and provide implementable suggestions to further empower women.

It will focus on how to significantly reduce or eliminate factors of inequality, poverty, insecurity that constrain progress to gender equality and empowerment of women for higher participation and leadership in both public and private sectors.

With many other sessions, the concluding one will be the plenary session on “The Path to Recovery” to clearly itemise urgent and lasting actions required not only to rescue Nigeria from recession and vagaries of COVID-19 but also usher in a coherent strategic plan for a sustainable and inclusive Nigeria.

Due to seriousness attached to this session, the panel is made up of members with the highest reach and impact on our society- a strategically important state governor and minister, a central figure in the management of our economy, an immensely influential private sector leader and a renowned international scholar and economic development expert. With the array of sessions and patriotically thinking speakers for the NES 26, it is indeed a platform and opportunity that should not be missed. It is a summit for forward guidance for the private sector and anybody interested in the future of our dear nation, Nigeria!

Dr. Ngwu, is an Economist/Associate Professor of Strategy, Risk Management & Corporate Governance, Lagos Business School and a Member, Expert Network, World Economic Forum. E-mail- fngwu@ lbs.edu.ng

How ‘intrinsic’ is GDP as an economic metric in Nigeria?

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ince the concept of Gross Domestic Product (GDP) – the measurement of the final value of the goods and services produced within a geographic boundary of a country during a specified period of time (say a quarter or year) – was fine tuned in 1934 by Simon Kuznets to modernize it, as it were, the concept has assumed larger than life in very significant dimensions. It has come to be regarded as the world’s most powerful statistical indicator of national development and progress and used as a metric for international comparisons in the hands of the Bretton woods institutions.

The concept is so overwhelming that many economic managers are so fixated on it that they would do everything within their power to ensure that it turns positive for their economies within any measuring period as any negative growth for two consecutive quarters will automatically translate to the dreaded word: “RECESSION”. Does this sound familiar?

Of late, there is frantic effort by Nigerian economic managers to see that the country escapes recession very fast as it is almost certain the next quarterly report by the National Bureau of Statistics (NBS) for the period ended September 2020 will follow the pattern of the preceding one, in which case the country would have officially entered recession. That explains the rationale behind the current, albeit controversial mooting of the idea to sell some of the country’s assets.

But does GDP tell the whole story? Does it give an indication of the actual standard of living in an economy like Nigeria? Nigeria may be posting impressive GDP growths year on year but how impactful are those to the ordinary citizens? Even

the per capita GDP (which is the ratio of GDP to the total population of the country) assumed to be the mean standard of living may be large relative to other countries’, how evenly distributed is that, especially in a country like Nigeria where inequality in terms of wealth is highly pronounced?

As per the International Monetary Fund (IMF) ranking of countries by GDP, Nigeria was ranked 26th in 2019 with estimated GDP of $446.54 billion ahead of countries like United Arab Emirate (UAE), Norway, Israel, Ireland, Singapore, Hong Kong, Malaysia and Denmark, to mention just few. However, in terms of quality of life, can any unbiased umpire rank Nigeria ahead of these countries? In other words, is Nigeria a more “liveable” country than those?

The scenario above has led many economists and development planners to caution on the excessive fixation on GDP as an economic indicator. In fact, Simon Kuznets, widely regarded as the originator of the modern concept of GDP, did warn against using the concept as a measure of welfare. And therein lies the snag!

In Nigeria, GDP whether positive or negative at any given period will always remain a statistical number if the qualitative aspect of the people’s welfare is not factored in to measure any progress.

What use is the GDP figure if the health sector of the economy is in a deplorable situation and citizens are daily dying of preventable diseases and the managers of the economy (who do not have faith in the sector) are going abroad on medical tourism for even minor ailments? What is hospital per capita in the country? What is the ratio of doctors to patients?

The same foregoing measurement can be ex-

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tended to the education sector. Why is the sector perennially in a comatose situation that no topranking public servant has his child in a public school? Why are private educational institutions thriving compared to their public counterparts?

Why are lecturers in public institutions perennially on strikes? What is school per capita in Nigeria?

What is the ratio of lecturer to student population in a typical public tertiary institution in Nigeria?

What is the level of development in terms of transportation in Nigeria? How are the rails, roads, airports and seaports developed? How many avoidable deaths have been recorded on the roads? How many man hours are daily lost on the roads? What is rail per capita in Nigeria? The list is indeed endless!

Electricity that has been associated with modern civilization, where is Nigeria in the scheme of things in the sector? A country with about 200 million citizens is always in a celebratory mood whenever 7,000 megawatts of electricity are generated. Don’t ask about the distribution side of it!

Yet industries are expected to blossom under that situation and generate employment.

Housing sector is yet another one up for interrogation. Many figures have been bandied about the housing deficit in Nigeria. One thing is however, certain: it runs into millions. Even those that have accommodation: how decent? What is room per capita?

Employment is another important index.

Where the rate of unemployment is daily soaring, what use is a positive GDP to the economy? Those that are employed: how gainfully employed are they? What job satisfaction do they derive? Are they actually employed or under employed?

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EMEKA OKOLO What is the level of security enjoyed by the citizenry? No day passes without one report or another of killings either by insurgents or armed militias. What use is positive GDP if Nigerians cannot feel secure as to move around in the country, not to talk of having their two eyes closed while asleep?

If political liberties of Nigerians are abridged or the authorities lack civic engagement with the citizens as per government policies, what will a robust GDP figure do to assuage life satisfaction of the citizens?

Based on the foregoing, it is therefore hardly surprising that a lot of countries have treated the concept of GDP as an economic metric with caution and have gone beyond it via other dimensions. For example, New Zealand has a “wellbeing” metric. It has developed a budget based on it rather than on GDP to align public spending with broader objectives. In 2013, the Organisation of Economic Cooperation and Development (OECD) better life index was published. In 1990, Mahbub Ul Haq, a Pakistani economist at the United Nations introduced the Human Development Index (HDI). The HDI is a composite index of life expectancy at birth, adult literacy rate and standard of living measured as a logarithmic function of GDP, adjusted to purchasing power parity.

Dr. Okolo is a Chartered Stockbroker and Management Consultant based in Lagos.

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What I learned from navigating the worlds of plenty and poverty simultaneously

DAVID HUNDEYIN

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rowing up as a Jehovah Witness is what I believe played the most important role in creating the person I later became. This is because there were only two ways to survive - to either swallow the Kool Aid wholesale and become a fully signed up automaton, or to discover the intricacies of leading an epic double or triple life.

It will shock no one to find out that I embraced the second option enthusiastically. What it meant was that while I was a normal kid in school and outside the house, at home and around the Kingdom Hall, I had to transform into different people to fit both places respectively.

At home I was the quiet kid who shut himself up in his room all day reading, only coming downstairs to eat and occasionally play football when my folks were out. At the Kingdom Hall, I was Johnny Everyman who smiled at everybody and shook everybody’s hands calling them “Brother” this, and “Sister” that.

Anyone seeing me would believe that I was truly one of them - regular, working class salt-of-the-earth who lived in Ikosi, Ketu and Mile 12 in the immediate vicinity of the Kingdom Hall.

Bourgeois Dave In reality, I was the doted-on youngest son of a multimillionaire real estate investor who had about as much in common with them as I did with a remote tribe of Central African pygmies. Their lives centred around that neighbourhood - they were born there, went to school there, grew up there, often went from high school straight into trade work there, got married there, had kids there and died there.

I was born in a 2-bedroom duplex in Amuwo-Odofin, grew up in an 8-bedroom mansion in Ogudu GRA, went to school in Ikeja, traveled to another continent for university and generally had a much bigger worldview than they did. Even the Kingdom Hall we congregated in was built and donated by my dad something he went to great lengths to conceal, unsuccessfully.

I secretly hated going there two or three times a week. I hated walking around Ketu preaching a message I did not believe in to poor people who needed jobs and opportunities and education, not more dreams, deities and hot air. I hated having to pretend to be “Brother Dave” at the Kingdom Hall, when I knew that the filial affection was a mile wide and an inch deep - I distinctly

remember my parents laughing their heads off in private when they realised that one of said “brothers” was interested in courting one of my older sisters. I knew that we did not actually belong among people we could not relate to in any way, and I did not see the point in pretending to like them.

Humble Dave This experience however, turned out to be valuable for two major reasons. First, it taught me how to effectively camouflage myself and fit in with people from a different background to what I was used to.

Unlike many of the people who I grew up with, I had the unique opportunity to experience Nigeria from completely different positions and develop an appreciation for both worldviews.

From a selfish point of view, this helped me become better at navigating the political minefield that is the Nigerian workplace. When I started working in Nigeria after youth service back in 2014, I had figured out how to strike a balance between being my normal confident self who bowed to no one and coexisting with people who would never forgive you for having wealthy parents.

The second and more important thing it taught me was empathy for other people who had a different experience of Nigeria and the world from the one I would otherwise be exclusively familiar with. A major problem that afflicts people from my

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When you see the Nigerian government react with confusion to fury from its youth population following its refusal to get a rogue security agency under control, it is a telltale sign of a government made up of people who simply do not regularly walk around the streets of Ikosi and Mile 12

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tions and the reorganise action of their business models to allow for adaptability and resilience in this challenging environment. The realignment of value chains, operations, and distribution networks is the new normal for driving efficiency in these unprecedented times. Countries, sectors and businesses have experienced decreased economic activities and unusual revenue and profit outcomes which have resulted in job losses and reduced staffing strength. The increasing spread of the virus and the isolation and quarantine requirements have made citizens rely more on online and digital services for food, shopping, schooling, remote work, and leisure.

Agriculture, trade and supply chain disruptions On average, the trends and impact of COVID-19 will differ by sector and segment as some businesses will benefit greatly from these disruptions while others will struggle to stay afloat.

Businesses in the consumer and industrial markets including African farmers have found themselves left with surplus perishable products due to travel restrictions and a drop-in demand as restaurants, markets, and food outlets have been closed. This is a long-term threat to food security as most cities have experienced artificial scarcity and a significant hike in the price of food and other staples. As a net importer of raw materials and finished goods, Africa’s agricultural sector has been impacted by the pandemic as the restrictions affected the import of raw materials, expertise labour and equipment. Although South Africa, Morocco and Egypt have sophisticated supply chains similar to those of developed countries, the rest of the continent is still trailing behind, due to weak infrastructure.

Unlike the agricultural sector, the e-commerce and telecommunication sectors have

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been experiencing a boom. Major ecommerce and online stores are barely able to keep products in stock on their online marketplace due to the increasing demand. Most ecommerce stores have had to employ more workers to be able meet up with increased customer demand. Communications service providers are also experiencing an increase in demand for their products to support remote working across all industries.

Corporations and companies are striving to adapt to current realities to ensure that they avoid finding themselves in a distressed situation. Overall, Covid-19 is straining capacities and resources and introducing new dynamics to normal business operations within the continent. The pandemic has succeeded in shortening supply chains across sectors and encouraging business owners and organisations to think of more innovative ways of digitalising their business process to not just scale operations but to survive in these trying times.

Corporate reorganisation and technology Before this time, workers clamouring for remote work arrangements and flexible work hours from their employers have met stiff resistance. However, during this pandemic, workers have been encouraged or obliged to work from home if the nature of their job allows it. For most of these workers, it is their first time as “teleworkers” and their working environment is likely to be deficient in many aspects compared to their workplace. Employers have been forced to make adjustments to internal operations and invest in remote work infrastructure to accommodate the new work pattern for their staff such as providing personal work tools and the internet for each staff. With this level of independence, employers have also had to introduce digital tools for monitoring and supervising the tasks carried

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Just not before there is some avoidable human suffering thrown into the bargain.

David Hundeyin is a writer, travel addict and journalist majoring in politics, tech and finance.

He tweets @DavidHundeyin.

COVID-19 & digital transformation – a silver lining for inclusive sustainable development in Africa (1) he Africa Centres for Disease Control and Prevention (Africa CDC) on Wednesday 23 September 2020 stated that the number of confirmed COVID-19 positive cases across the African continent reached 1,420,629. According to their statement, the death toll related to the ongoing COVID-19 pandemic has risen to 34,327 so far. Currently, the primary concern for governments across the continent and globe include, fighting to see an end to the pandemic, increasing health care spending to ensure that medical supplies are available, and putting in place measures to flatten the curve. Beyond all these, there are severe economic consequences to this outbreak.

There have been several forecasts of a global downturn and there are high chances of countries experiencing recession and significantly lower growth than anticipated.

According to the World Bank Global Economic Outlook, “every region is subject to substantial growth downgrades. East Asia and the Pacific will grow by a scant 0.5 percent. South Asia will contract by 2.7 percent, Sub-Saharan Africa by 2.8 percent, Middle East and North Africa by 4.2 percent, Europe and Central Asia by 4.7 percent, and Latin America by 7.2 percent.

These downturns are expected to reverse years of progress toward development goals and tip tens of millions of people back into extreme poverty”.

Following the restriction in movement and close down of businesses, it is important that the continent plans towards a smooth recovery after the pandemic has taken its toll.

Introduction With over 32 million cases globally, the COVID-19 pandemic is disrupting supply chains and causing companies to be forward-thinking by embracing the digitalisation of their opera-

background is the cavalier assumption that everyone is fundamentally like them, or at least a total failure to appreciate just how different many people’s experience of life is.

When you see the Nigerian government react with confusion to fury from its youth population following its refusal to get a rogue security agency under control, it is a telltale sign of a government made up of people who simply do not regularly walk around the streets of Ikosi and Mile 12. If they did and they had some kind of sense of how desperately angry and stressed the mood on the street is, they would never behave like this.

They spend most of their time however, exclusively rubbing up against people who are just like them, and that is why we keep having these regulatory flights of fancy.

Eventually what will happen of course is that the streets will make their displeasure felt very sharply and unpleasantly, after which such policies will be quietly and unceremoniously reversed.

@Businessdayng

CHIDINMA ONUKOGU

out by staff in all their different home locations.

It is expected that this work pattern will become the new normal.

Other routine business operations have been digitised and a lot of transactions and operations have become paperless. Meetings have moved from physical board rooms to virtual platforms.

Virtual meetings and remote working arrangements have significantly reduced commute time to and from work, which is time-saving and cost-efficient. With fewer reasons to have physical interactions with co-workers and customers, most business managers are questioning the need for their numerous offices, workspaces, and branches. Considering the cost of maintaining multiple or large office spaces, several companies are strategizing their businesses to function without these spaces, thereby reducing their operating costs and enabling them to survive better. Fewer office spaces would also mean fewer blue-collar office jobs which would ultimately result in a further reduction in operating expenses.

In order to meet their top line and help their communities, some business owners have diversified their product line to accommodate the production of essential health care commodities and personal protective equipment that they ordinarily would not produce. The shortage and dire need of these medical supplies have caused distilleries and breweries to produce hand sanitizers, car manufacturers to make face shields and ventilators, and garment manufacturers to produce face masks and hospital gowns.

Onukogu is a Commonwealth Scholar and an Economist.

She is currently a Postgraduate Student (International Development) at the University of Portsmouth.

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12

BUSINESS DAY

Wednesday 14 October 2020

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Security is key to entrepreneurship and prosperity in Nigerians SMALL BUSINESS HANDBOOK

EMEKA OSUJI

L

ast week, we tried to restate the fact that finance is a major challenge faced by the SME sector, not just in Nigeria but practically everywhere in the world. We however, emphasised that it is not the most critical challenge. We identified some other factors that are equally, if not more important, than finance.

Indeed, we cautioned that under certain circumstances, the coalition of the other challenges often turns around to reinforce and often exceed the negative impact of lack of finance.

In that regard, it was our candid opinion that putting finance high above other challenges plaguing the SME sector may be a recipe for failure.

This has been the experience of many programme efforts in many climes. It is an experience we are likely to repeat, going by some of our current policy actions. In other words, whatever policy action that is proposed or taken in an effort to empower operators in the SME sector, must be comprehensive. It must

include social overhead capital and common services – the elixir for private enterprise.

The structure of the Nigerian economy makes it imperative that we continue to talk about certain development-related issues, to the extent that some people are feeling the issues are over flogged. That is how it sometimes feels when we discuss poverty, the informal sector and the developments around them. We cannot therefore be guilty of overemphasis on subjects that are rather getting worse by the day – poverty and insecurity. It is certainly not a case of saying something ad nauseam, if we discuss poverty every day in Nigeria.

For one, we hold the poverty crown of the world. Second, our ranking on the scale of failing states is worsening and unemployment is rising. Youth unemployment is in the region of 60 per cent and there is a risk of youths transiting from unemployment to high crime. Our economic life is threatened by the soon-to-come obsolescence of hydrocarbon, and our diversification efforts need time to materialise.

The Nigerian economy is overwhelmingly informal, and informality is related to poverty. A lot is being done to increase transition to formality through the education of entrepreneurs and the promised simplification of business interactions in the country. However, mush is yet to

be seen to have been done, as multiple and illegal taxation, extortion by security men unleashed on the roads, purely for commercial purposes, have made both inter- and intra-state trade and movement almost impossible, especially in the south, where security men act as though they are an army of occupation. They have run riot forcing motorists to tip them on the way. There has been little political will to end this scourge and the result is fear, hatred for security operatives and poverty among the people.

As current reports paint pictures of worsening poverty, such that the number of abjectly poor Nigerians is projected to hit 150 million by 2021, just next year, and government continues to struggle with its finances, leading to policies that are not people-friendly, it would be a disservice to downgrade the discussion and insecurity and speak only to economics. Our life as a nation depends on our ability to drag more of our people out of the class of the abjectly poor and increase the size of our middle class. We often forget that it is the middle class that makes the critical mass of investment that pushes development, but only when secure.

The problem of Nigeria has been compounded by the fact that most of the evils we identified in this column, over the past several years, as poverty generators have either become worse or given birth to children, contrary to

head. For how long will our children continue to ask “Why?”.

“Why is the country like this?”

“Why do things not work?” “Why will my country not support me to fly like the eagle that I am?” “Why are my ambitions being deliberately thwarted by officials whose job it is to ensure I succeed?” “Why can I not move from point A to point B without the fear of being accosted or brutalised by those who swore an oath to serve and protect me?” “Why do I feel as if I’m being side-lined or worse still, victimised for my God given talent?” “Why should I have to grovel and beg for what should be mine by right?” “Why is it that everyone appears to be so religious yet it’s the evil ones who seem to thrive?”

“Why is our generation still praying for the same things your generation has been praying for, for so long?” “Daddy, for how long will we continue to deceive ourselves and hope for a better future when tomorrow never seems to come?” “Why...Why...Why?” Folks of my generation have offered their children every explanation in the book, in a vain attempt to convince them all will still be well. We began by uttering them with confidence, albeit contrived. We then appealed to their faith in God. Unsuccessful yet again, we resorted to reversed psychology by chiding them for their unbelief.

Before we knew it, we found ourselves attempting to temper their fury by empathising with their frustrations. It soon dawns on us that we have come full circle and things are yet to change.

Filled with questionably placed

patriotism, we sold them a vision of a good tomorrow. The same ones our parents sold us in adolescence and which many of us, refusing to give up hope, continue to sell ourselves even now in maturity. Taking a good look around, it all begins to sound hollow and hollower by the day. No longer totally convinced ourselves, it becomes an increasingly herculean task to convince the other. For how long shall we continue to excuse the inexcusable? How many more stories can we tell our children, in good conscience? I think you’ll agree that one of the things which make us human and distinguishes us from robots is our individuality. This extends to our threshold also and that’s why some who find themselves out of excuses, having exhausted all they could think of, to the same questions over the years, simply throw their hands up in surrender. They give up altogether and before you know it, whisk their children out as they wave with undisguised lament, “so long” to their country. With a deep sigh of relief and yet as if to console themselves too, they say to no-one in particular, “at least I tried”. For how long will this be our story? I wish I could answer that.

One day our children scattered across the diaspora will hear of that distant land where because of poor leadership, the sun was said to have smitten the people by day and the moon in solidarity, did the same by night. But our prayer is that the story they’ll hear then, will be very different to the one we tell today. We hope by

‘

Our life as a nation depends on our ability to drag more of our people out of the class of the abjectly poor and increase the size of our middle class. We often forget that it is the middle class that makes the critical mass of investment that pushes development, but only when secure

our expectation of their elimination or reduction. A war-torn country cannot be counted among the prosperous nations of the world, while the war lasts. As we write, there is no visible sign of an end to insecurity in Nigeria. Rather, if care is not taken, we are just at the beginning of what looks like a persistent and increasing attack on the rural dwellers in Nigeria. One of the key causes of rising poverty in the country is that more people join the rank of the hopeless every day, than exit the dreaded conundrum of poverty and insecurity.

Somehow, we seem to have put certain external interests ahead of ours. We allow such things as the so-called ECOWAS protocol on the free movement of people, including killer herdsmen from all over Africa to come into the country. We are guaranteed unsafe communities as these migrants extend their ambitions from merely grazing their cattle to owning a piece of the Nigerian space. Farming has come to an end and even social life, like weddings and other community-based activities, are on stop. We cannot hope to bring a single person out of poverty in 20 years, for as long as there is no freedom. Whatever it costs Nigeria to secure its people is a worthy investment in its future.

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

How long?

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or how long will our country continue to put forward its worst XI instead of its 1st XI team? For how long will our leaders portray a country blessed with some of the most brilliant minds anywhere in the world as “no good doers” who know how to say all the right things but whose sincerity somehow always comes into question when it comes to execution? For how long will mediocrity be celebrated in our nation, confounding the rest of the world who see the genius of our people in their countries every day?

For how long will Nigeria be presented to the world in awfully bad light causing us to bow our heads in shame and disbelief? For how long will our leaders continue to blot out the dazzling stars that we are? For how long shall we continue to ascribe the alarming rate of unnecessary deaths to acts of God? The average life expectancy in Nigeria is a pitiable 53 years compared to 71 years in war-torn Syria.

Ponder on that for a moment. For how long will we question why we even bothered to go to school if at the end of the day, we’ll be overlooked in favour of another, who knows next to nothing? For how long will our leaders continue to ignore the most obvious solutions to the myriad of problems bedevilling our society in favour of a glaringly hopeless alternative, leaving the hapless people to pray and fast for a miracle that will invariably never come? Two plus two will always equal four no matter how hard you pray or how deep in the sand you bury your

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‘

Filled with questionably placed patriotism, we sold them a vision of a good tomorrow. The same ones our parents sold us in adolescence and which many of us, refusing to give up hope, continue to sell ourselves even now in maturity

CHARACTER MATTERS WITH DAPS

DAPO AKANDE then we would have transmuted from a nation where possible is selfishly made impossible to a nation where impossible becomes possible.

We hope by then, our people here in Nigeria will be supported, enabled and given the opportunity to equal and even best the achievement of their kinsmen in foreign lands. We hope by then we will have gotten our groove back and will proudly display our full ability as great people for the whole world to acknowledge and admire.

We hope by then, we shall no longer be a source of disappointment to our expectant African brothers because of our penchant to underperform, much like a man dancing with two left feet.

And I hope this rallying cry will touch the heart of all, so this dream will one day become our reality. To all the above, may I please hear a loud Amen!

Changing the nation...one child at a time.

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

@Businessdayng

BUSINESS DAY

Wednesday 14 October 2020

13

EDITORIAL PUBLISHER/EDITOR-IN-CHIEF

Frank Aigbogun EDITOR Patrick Atuanya

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

Bashir Ibrahim Hassan

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

ASUU and the sustainability of public universities in Nigeria Education is key to gainful development and thoughtful nations invest immensely in it

O

n Monday, 12th October, 2020, educational institutions in Nigeria (basic and tertiary) opened for academic activities after seven months closure due to COVID-19. Regrettably, federal universities failed to reopen, no thanks to ongoing 27 weeks old strike action embarked by the Academic Staff Union of Universities (ASUU).

The strike has crippled all academic and non- academic activities.

It is not the first time and may not be the last going by the nature of the government not to keep to promises. But the humongous damage strikes due to our educational system cannot be quantified. Irrespective of the angle it is viewed, ASUU’s demands must be addressed once and for all.

The sustainability of public universities in Nigeria forms the basis of ASUU’s struggle which many misunderstand. ASUU is asking the federal government to improve facilities on the campuses, improve student’s welfare, revitalise the universities as agreed with the government years back and rescind decisions over the use of IPPIS payment platform and pay the backlog of earned allowances spanning over seven years.

Regrettably, one major language government understands is strike.

Truth is ASUU strikes have been

yielding good results one of which is the establishment of TETFUND but more needs to be done to keep pace with global realities in the sector.

Agreed, students experience unnecessary delays whenever ASUU proceeds on strike. But the lecturers themselves also pay the price which includes subjecting them, their families and dependents to various degrees of torture, pain and discomfort including nonpayment of salaries and allowances.

The fact that the education sector is experiencing this level of hitch should unsettle any responsible government.

A visit to many of the public basic and tertiary institutions in Nigeria, reveals sordid tales of decayed infrastructure and absence of teaching tools. In some; students’ seat on the floor and balconies to take lectures; no blackboards. Hostels and buildings are in dilapidated forms. Toilet facilities, well equipped libraries and functional laboratories are nonexistent. The result is that many students who left such schools were seriously deficient in most subjects.

Some couldn’t even read and write properly, which wasn’t the fault of the teachers but the inability to teach the young mind without the requisite teaching tools.

The situation has not only affected the quality of education in Nigeria, it has also worsened the plight of public schools as people preferred the packaging of private schools to the quality learning obtainable in

public educational institutions. Worst still, those who are in the position of restoring our public schools, namely, government officials, either send their children abroad to study or delved into establishing their own private schools for business purposes. It is this ugly development that ASUU is trying to change. If only the Nigeria Union of Teachers had joined hands with ASUU, it would have been a different scenario.

The least point of the current struggle is the federal government’s insistence that academic staff of federal universities enrol in the Integrated Payroll and Personnel Information System (IPPIS) which according to the government would promote transparency and accountability. With corruption as one of our major undoing as a nation, anything that will promote accountability and transparency is welcomed. However, more important is the workability of the IPPIS in the tertiary education system in Nigeria.

Many have accused ASUU of being corrupt, having members do more than one job and many others as the reason for the rejection of IPPIS. But it is important we understand that the universities have a different mode of operation compared to what is operational in the civil service.

In ASUU’s opinion, IPPIS is not designed to accommodate such things as remuneration of lecturers on sabbatical, external examiners and assessors and earned academic allowances.

Hence, forcing IPPIS will mean that the idea behind seasoned academia going on sabbatical to other federal universities is jettisoned. The reason for external examination and assessment which is to uphold the integrity of the University system by attracting experts in certain fields either within or outside the country to assess our lecturers or examine our students with the introduction of IPPIS also will be frustrated and will impact negatively on the ranking of Nigerian universities. In addition, IPPIS does not recognise the retirement age of Academics. All of these make IPPIS a bad idea to the University system.

It is on this premise that ASUU tasked itself to develop the UTAS (University Transparency and Accountability Solution) to make up for the inadequacy of the IPPIS to the Academic sector. One will expect that as partners in progress, the Government should rather be looking at ways to adopt the UTAS for Academic staff since ASUU not only noted the challenge with IPPIS but has come up with a solution. Forcing ASUU at this point to join the IPPIS suggests that rather than promoting accountability and transparency in the University system IPPIS may be out to achieve a hidden agenda.

The fact remains that education is a sure tool for gainful development and nations that understand this invest immensely in their education system.

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14

Wednesday 14, October 2020

BUSINESS DAY

COMPANIES&MARKETS How the NSE Premium Board is performing in 2020 OLUWAFADEKEMI AREO

T

he Nigerian equity market capitalisation is valued at N14.8 trillion and members of the premium board make up 47.1 percent of this total at N6.97 trillion.

The Nigerian Stock Exchange (NSE) premium board was launched in August 2015 to showcase companies that adhere to the best of international practices on corporate governance and also meet all the Nigerian bourse’s highest standards.

Today, the Nigerian equity market capitalisation is valued at N14.8 trillion and members of the premium board make up 47.1 percent of this total at N6.97 trillion.

Since its inception, companies have been making applications to join the NSE’s elite group of issuers as the premium board is also called, but only 8 companies have attained this feat.

In 2015, First Bank Nigeria Holding (FBNH), Dangote cement, and Zenith bank were listed on the board, while in 2018, Access bank, SEPLAT, United Bank for Africa (UBA), and WAPCO joined the board.

MTN Nigeria obtained approval to be listed on the NSE in 2019 and in the same year joined the premium board, having met all the board’s requirements.

The premium board is therefore enriched with representatives from the financial, industrial, oil and gas,

and Information and Communications Technology (ICT) sectors.

To be listed on the NSE’s premium board, the company must have at least 70 percent rating on the NSE’s Corporate Governance Rating System (CGRS), have a market valuation of at least N200 billion, and a free float of at least 20 percent of its issued share capital.

Revenue In the first half of 2020, the premium board made combined revenue of N2.86 trillion showing a 6.32 percent growth from the N2.69 trillion obtained for the same period

in 2019.

This is coming at a time when publicly listed companies are facing multitudes of challenges amidst the COVID-19 pandemic and other pandemic-induced shocks straining the company’s earnings.

The revenue growth of the board was driven largely by MTN Nigeria from the ICT sector at N638 billion while SEPLAT from the oil and gas sector reported the lowest revenue at N80 billion for the period.

All members of the board saw average revenue growth of 7.4 percent in their re-

spective companies except for SEPLAT which saw a 26.

5 percent decline in revenue for the first half of 2020.

Profit Together, the NSE premium board reported a profit decline of 7.75 percent in the first half of 2020 at N465.32 billion from N504.42 billion in the first half of 2019.

The grow th in profit could have been higher but SEPLAT recorded a loss of N37 billion which was a common trend for companies in the oil sector who were affected by the shocks of the pandemic and the

crash in oil price.

Among the members of the premium board, Dangote cement from the industrial goods sector made the highest profit of N126 billion while WAPCO, also in the industrial goods sector recorded the lowest profit at N23.3 billion.

Despite reporting the lowest profit on the board, WAPCO’s half-year 2020 profit represented a 158.9 percent jump from N9 billion recorded for the same period in 2019.

Earnings Per Share (EPS) Over the last six years,

L-R: Bola Adetayo, director, strategy and business development, Green Eagles Agribusiness Solutions Limited; Taiwo Oluwadahunsola, CEO; Emmanuel Ijewere, director and board member; Osiefa Akinbayo of Lagos State Ministry of Commerce Industry and Cooperatives, and Tasala Osinowo, MD, Green Eagles, at the Symposium organized for Cooperatives in Lagos State. Pic by Pius Okeosisi

the EPS of members of the premium board has fluctuated along growths and declines.

Among the members belonging to the financial services sector, only Zenith bank and FBNH showed growth in the portion of its half-year profit allocated to each outstanding share of its common stock.

EPS for Zenith bank was 16.6 percent up at N3.3 in the first half of 2020 from N2.83 recorded for the same period in 2019 while FBNH reported a positive EPS of N1.35, up 60 percent from N0.84 in the first half of 2019.

For the industrial goods sector, both WAPCO and Dangote cement recorded EPS growth in first half f 2020 as WAPCO improved its EPS by 47.9 percent to N1.45 from N0.98 in the previous year while Dangote cement saw EPS growth of 6.23 percent to N7.45 from N7.01.

SEPLAT of the oil and gas sector reported a loss in the first half of 2020 and as such had a negative EPS for the period as opposed to N65.92 in the first half of 2019, while the EPS in MTN Nigeria of the ICT sector dropped to N4.66 from N4.89 for the same period in 2019.

Asset turnover ratio In the first half of 2020, UBA topped the financial services sector of the premium board with an asset turnover of 7.47 percent, depicting that UBA generated N7.47 in sales for every N1 in total assets.

Cititrust Holdings Plc launches Investment/Asset Red Star Express plc posts N750m PBT, pays dividend to shareholders Management Company in Malawi IFEOMA OKEKE KELECHI EWUZIE

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ed Star Express Plc, a world leading courier and package delivery company in Nigeria, has declared a profit before tax of N750 million for the year ended March,31 2020.

The company a licensee of FedEx in Nigeria which shares are listed on the floor of the Nigerian Stock Exchange (NSE), in the review financial year also declared a dividend of 35kobo for every 50 kobo share to shareholders.

It would appear that Red Star express is prepared for the current economic situation as the Board of Directors have taken a proactive decision to shore-up its revenue reserves. In the financial year ended March 31, 2020 the company recorded revenue of N10.5billion which is 5 percent increase over the preceding year.

Sulieman Barau, chairman of the company while addressing stakeholders at the 27th

annual general meeting of the company in Lagos said the profit before tax of N750 million was 0.5 percent higher than the preceding year.

Barau said the increase in revenue was made possible as a result of some growth platforms which were established and are being nurtured, which include the West African branch expansion and the new special business units which were championed by the Management of the company to take advantage of some emerging opportunities.

“We hope to explore this further in the new financial year to minimise the disruptions brought about by the COVlD-19 impact” Barau said. He further said that the performance reflected the company’s commitment to the creation of shareholder wealth notwithstanding the prevailing economic circumstances, having built a longstanding culture of staying true to its promise of rewarding investors.

While all resolutions placed before shareholders were approved, the General Meeting approved company consolidated financial statements for the financial year ended 3lst March 2020 as well as the payment of N324 million dividends to its shareholders. He assured shareholders of the plan to continuously deliver a strong and sustainable performance that enhances maximum returns to shareholders.

“As we march forward in the year with confidence and optimism, knowing full well that our businesses have been repositioned to take advantage of key opportunities as we stay on course in the execution of our growth strategy,” Barau said.

Peter Olusola Obabori, group managing director/ CEO stated that despite the global and domestic economic challenges occasioned by the Coronavirus pandemic during the financial year that affected revenue trajectory, the company

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C

ititrust Holdings Plc, a Pan African Investment Holding Company, has launched a wholly-owned Investment/Asset Management Company subsidiary in Malawi, the South Atlantic Asset Management Limited Malawi (SAAML).

The launch followed the receipt of approval from the Registrar of Financial Institution, Malawi, for the firm to provide Portfolio/Wealth Management, structured investments and other investment advisory services to individuals, corporations and institutional investors.

Cititrust in a statement said the unveiling of this remarkable feat is in pursuant to the Portfolio Management License granted to South Atlantic Asset Management Limited on October 6, 2020 in line with the Malawian Financial Service Act (FSA)

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2010 and Financial Services (Establishment and Operations of Portfolio Manager) Directive 2015.

Victor Ekhor, the Chief Executive of South Atlantic Asset Management Limited, Malawi, said the launch of the Asset Management business ties in with CITITRUST’s plan to become a dominant player in the Financial Services sector.

“We are enthusiastic at the unique opportunity to bring investment products to the Malawian market, as our goal is to constantly provide a wide range of solutions to support the evolving needs of our partners and the entire investment community,” he further stated.

“The issuance of this approval by the Registrar of the Financial Institution is a laudable development, and one that will most definitely lead to an unprecedented basis for value creation within the Asset Management Space @Businessdayng

in Malawi,” Victor added.

Speaking on the vision for South Atlantic Asset Management Limited, Yemi Adefisan, the Group Chief Executive of Cititrust Holdings Plc, said, “We intend to support African Businesses and unlock the continent’s potentials through the management of several investment funds and provision of financial advisory services. Our focus is on growing wealth for our esteemed clients through our well-thought-through products.

“At Cititrust, our people have extensive experience in the financial services sector across Africa and are devoted to pooling complementary resources and functions to give clients the best value.

We look forward to offering unique and creative solutions, backed up by world class technology, to transform current market offerings and do more for our clients,” Adefisan added.

Wednesday 14 October 2020

BUSINESS DAY

AGRIBUSINESS

15

In association with

ag@businessdayonline.com

‘We offer opportunities for investors in Nigeria’s poultry industry’ Bill Kenneths is the chief executive officer of Farmsponsor – an agri-tech investment platform focused on poultry production. In this interview with Josephine Okojie, he spoke about the country’s poultry industry and how Farmsponsor investors can earn 15percent ROI in three months.

C

an you tell us about Farmsponsor agri-tech?

Farmsponsor is an agric-tech business that operates in the poultry value chains which is not limited to crowd-funding to empower local farmers, but other investments in the hatchery, breeders farming, feed milling, chicken processing, and storage among others.

Why do you specialise in poultry production instead of food crops?

Our kick-off strategy was to focus on the poultry business which we have gained a lot of expertise.

Also, we have been exposed to the industry and taken advantage of the investment opportunities in poultry farming in Nigeria within our two years of operation. Now, we are gradually expanding into the oil palm plantation and refinery business. Our mobile application Vestpaywhich exposes users to related agribusiness services and profitable investments is currently in the live beta testing phase.

Who are your off-takers?

Our goal is for our products to make it from farm to table quite easily w h i l e ma i nt a i n i ng t h e w h o l e s o m e n e ss o f t h e product no later than one week from harvest, through restaurants, supermarkets, and e-commerce. Our other off-takers are; wholesalers, grocery stores, offshore companies, and general merchants are also our customers.

What makes your platform better for farmers and investors - that is, why must investors choose your platform instead of others and why must farmers enrol with Farmsponsor?

Farmsponsor is poised to deliver superior value all year round to sponsors, farmers, and consumers alike. With a return of 15perceny per farming cycle of 12 weeks and a debenture of 2.5X in our five-year expansion plan, Farmsponsor has the best returns in the ma rke t. Sp o n s o r s may also choose to retain their

Bill Kenneths

sponsorship in future cycles or convert it to equity on the platform. Through the Farmsponsor Out-Grower Scheme (FOGS), farmers enjoy access to quality farm inputs and services (feed, medication, day-old chicks, vet doctors, insurance) as well as market for their birds.

How many farmers are involved with Farmsponsor and their locations in the out-growers’ scheme?

We have over 300 farmers in our farming programmes across Nigeria. The majority of our farmers are in Rivers, Abuja, and Ebonyi states.

Farmers do default in loan repayment most times.

How is your experience like with farmers you are working with?

Poor infrastructure to manage the affairs of f a r m e r s i n o u t- g row e r programmes forms part of the reasons for failure due to wastage of farm resources, which inevitably leads to high production cost.

However, farmers on FOGS cooperate are provided with inputs and services as well as market to lift lots of their burden from the farming cycle.

The average return on investment per unit of a www.businessday.ng

poultry farm on your platform is 15 percent in 3 months. How realistic is this ROI considering the current scarcity of maize and the high cost of other inputs?

The ban on maize importation has led to the high cost of chicken feeds and has resulted in high production cost of frozen chicken. Implementing risk mitigation strategies such as diversification and insurance reduces some of these risks during this period.

A l s o, r e v e n u e f r o m Farmsponsor’s activities on other value chain investments has kept us on the safe side since the ban. We, however, believe that the narrative will soon change as the ban on maize importation on its own present Nigerian farmers’ opportunity to expand their maize cultivation with high hopes of profitability after harvest, and Farmsponsor is not left out in this space.

There has been a protest by some investors over their unpaid dividends by some agri-tech investment platforms.

What is the situation like with investors on your platform?

Our case is different.

Sponsors are always excited to refer family, friends, and colleagues to our platform.

We have never missed a payout day obligation since inception in May 2018.

How can investors i nv e s t i n a ny o f y o u r poultry farms?

To invest in any of our p o u l t r y f a r m s, s i m p l y follow the following steps; visit farmsponsor.com.ng, register and update your profile, select from the farm list of open windows and follow the instructions through to sponsor a farm and you can also pre-invest (automatically sponsor a farm in the next window)

by Vestbanking. Fund your vest bank wallet on your dashboard with the amount you want to sponsor by using the standing order ‘sponsor a farm’. For those interested in our private sponsorship offer ; visit f a r m s p o n s o r. c o m . n g / privatesponsorship, fill the form, and submit your confirmation request. You can also download the Private Sponsorship Pitch Deck for this page on your dashboard.

How can Nigeria bridge its supply and demand gap in local poultry production?

With the ban on the importation of processed chicken products and the distribution of grants and loans to poultry farmers, as well as the relief on the importation of agricultural machinery/raw materials, the government has reduced the supply and demand gap for local poultry production significantly. Poultry farmers and agro startups in this sector should synergize to take advantage of this opportunity.

How can the government deal with the rising cost of poultry feeds?

The government can tackle the problem of the rising cost of poultry feeds by subsidizing the cost of producing feeds in the area of electricity, storage, and inputs for the commercial feed producers.

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Green Eagles targets cooperatives for GreenWealth initiative JOSEPHINE OKOJIE

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reen Eagles Agribusiness Solutions Limited, a leading agribusiness is targeting cooperative societies for its GreenWealth Initiative in Nigeria’s agricultural sector.

The Gre enWealth Project, an agricultural initiative aimed at ensuring food security, export prominence, economic diversification, and sustainable wealth for all stakeholders.

The project is designed to enhance profitability for stakeholders across agricultural value chains, as well as facilitate easy and profitable entry for investors to become farm sponsors. “ Fo o d s e c u r i t y h a s become a more serious issue than ever, and as a nation, we must bridge the local deficit in the production of critical food and cash crops to avert a major food crisis,” Taiwo Oluwadahushola, chief executive officer during a symposium for cooperative societies in Lagos recently.

Oluwadahushola stated that cooperative societies have a vital role to play in the achievement of the

GreenWealth objectives.

“We are persuaded that Lagos State Cooperatives can play a vital role in the achievement of the GreenWealth objectives as well as provide tremendous benefits to all individual members in terms of decent RoI, lower food prices, a strengthened naira and increased purchasing power of every Nigerian worker,” he said.

“Our projections show @Businessdayng

we can assure an annual return 30percent to sponsors, that is 15percent every six months. At the end of each investment circle, a sponsor may request a rollover or principal repayment” he added.

Speaking also, Osiefa A ki n bayo, d i re c to ragribusiness, Lagos State Ministr y of Commerce Industry and cooperatives, encouraged cooperative societies to take advantage of the opportunity the project presents.

“This is indeed a good opportunity for cooperatives to invest in agribusiness especially now that the nation is diversifying into agriculture,” she said. “ T h e G re e n We a l t h Project is a laudable initiative and I must commend the management of Green Eagles Agribusiness for this,” she added.

Emmanuel Ijiwere, a board of directors of the firm emphasized that its high time individuals take action and make agriculture a major source of livelihood at all levels while ensuring food security in Nigeria and Africa as agribusiness is now the new oil.

Similarly, Bola Adetayo, director of Strategy and business development

said that the GreenWealth Project will help in creatively restructuring the nation’s agribusiness space to achieve the goal of shoring up the nation’s GDP through agriculture.

“In achieving this goal, we will facilitate the establishment of Integrated Farm Estates in 774 Local Government Areas across the countr y to drive a rapid increase in crops & livestock,” she said.

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Wednesday 14 October 2020

BUSINESS DAY

FINANCIAL INCLUSION

& INNOVATION

Nigeria’s digital economy gets boost as UK signs literacy agreement for northern rural clusters …project designed to reach 1,000 beneficiaries in 10 rural clusters across 10 states …targets women and girls, Persons Living with Disabilities ENDURANCE OKAFOR

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s part of Nigeria’s National Digital Economy Policy and Strategy (2020-2030) Vision to transform the country into a leading digital economy providing a better quality of life for all Nigerians in 10 years, the UK Government, through its Prosperity Fund Digital Access Programme, has signed a resilience training agreement with Tech4Dev, to carry out Basic Digital Literacy for Rural Clusters in Northern Nigeria to Enhance Pandemic Resilience.

Signed on the 5th of October 2020, by the Foreign, Commonwealth and Development Office (FCDO), and the Nigerian nonprofit organisation Technology for Social Change and Development Initiative (Tech4Dev), the agreement which will be implemented across 10 rural clusters in 10 States across Northern Nigeria will demonstrate a scalable, sustainable model for digital skills development in underserved communities in Nigeria, a statement from the UK high commission in Lagos said.

The programme, according to the UK commission will run from October 2020 to February 2021, during which 1,000 beneficiaries who have had little or no prior digital knowledge will undergo a rigorous 12 weeks training required to navigate today’s digital world.

The programme is aimed at sparking their interest in gaining advanced digital skills or even pursuing a career in technology.

The Curriculum would include a computing device and internet usage, digital information handling, online communication, online safety, virtual collaboration and exchanges, etc.

The target audience for the training would be reached by Tech4Dev through advocacy and outreach; community engagement, local

community stakeholders, community town criers, local community influencers and the traditional media in these communities.

“Nigeria’s Economic Sustainability Plan, as well as Nigeria’s Digital Economy Strategy, have identified the development of digital skills as key to unlocking economic prosperity for all Nigerians. With social distancing and lockdowns to curtail the spread of COVID-19, digital literacy has become a must-have. But for millions of people who are unable to use technology, the offline world is economically and socially isolating,” Ben Llewellyn-Jones OBE, the Deputy High Commissioner in Lagos said.

According to Llewellyn-Jones digital literacy helps vulnerable populations to develop the capabilities needed to leverage technology for business, education and communication. “Improving digital literacy helps builds a more

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prosperous future for all Nigerians.

The UK Government is pleased to be able to support this programme to support Nigeria’s economic development and help make more people more resilient in tackling the shared challenge of COVID-19.”

For the digitally-excluded or underserved groups in Nigeria, this project will help close the digital divide, enable inclusive digital access for all and build communities’ resilience to current and future pandemics.

Commenting on the signed agreement from the Foreign, Commonwealth & Development Office (FCDO) in London, the Head of Digital Development and global lead for the Digital Access Programme, Alessandra Lustrati, said: “The Basic Digital Literacy for Rural Clusters in Northern Nigeria Project aligns with Sustainable Development Goals related to education, reduction of poverty and inequality, and contributes to

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digital inclusion as a key enabler of local development processes. By investing in digital literacy for disadvantaged people living in rural clusters in Northern Nigeria, this project will contribute to reducing vulnerability by enabling access to vital information, increasing the employability of beneficiaries and reducing the gap in the digital skills needed during this pandemic” Lustrati also explained that the project will target vulnerable groups from the perspective of gender, disability and socioeconomic status.

“This pilot will directly benefit 1,000 people, and even more importantly, it will serve to demonstrate a scalable, sustainable model of digital skills development which public and private stakeholders can further invest in. The Digital Access Programme team is delighted to have supported the design and launch of this project, and we will be actively monitoring its impact and emerging lessons over time.”

@Businessdayng

FirstBank deepens financial inclusion drive, disburses N17bn loans through FirstAdvance ENDURANCE OKAFOR

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ustomers of First of Bank Nigeria Ltd have been able to access over N17billion worth of loans through the bank’s FirstAdvance, a digital lending solution, as compiled from the tier-one bank.

According to the lender, FirstAdvance is designed to offer convenient and easy access to cash for salary earners whose accounts are domiciled with FirstBank and have received regular salaries for two months, before the loan request.

In barely a year since the launch of FirstAdvance, over 128,000 unique customers in over 782,996 successful transactions have so far benefitted from loans.

Meanwhile, the World Bank believes financial inclusion does not only end with having access to financial services but being able to access credit. Data by EFInA shows about 40 million Nigerians are outside the formal financial system, a barrier that is constraining many from accessing loans. Explaining how FirstAdvance works, FirstBank said: “Processing a loan with FirstAdvance is implemented in less than a minute and it is accessed in two ways, the USSD code; *894*11# or the Bank’s recently upgraded mobile banking application, FirstMobile”.

Further to its pursuit of providing options to Nigerians across all income bands, FirstBank also offers Personal Loan Against Salary (PLAS) to individuals in paid employment who need long term loan to meet their financial obligation more especially as the economy returns to normalcy post-COVID-19 pandemic and as schools resume. FirstBank’s Personal Loan guarantees a convenient repayment plan of up to 60 months.

According to Gbenga Shobo, FirstBank’s Deputy Managing Director, meeting the needs of “our customers have always been our priority and we are delighted with the volume of loans disbursed to Nigerians as it reinforces the confidence of Nigerian workers in FirstAdvance, our digital lending solution and also our long-term offerings through Personal Loans for people in paid employment.”

Wednesday 14 October 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

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Wednesday 14 October 2020

BUSINESS DAY

insurance today

E-mail: insurancetoday@businessdayonline.com

Lessons for Nigeria as Ethiopia makes progress in micro insurance Modestus Anaesoronye

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n Monday 12th October 2020 Business Day published a story that Insurance was playing a catchup on financial inclusion target, linking it sluggish start off of the micro and takaful schemes.

The take-off of both schemes the story observed was expected to drive penetration among low income mass of the population, as well as the grass root population in the push for financial inclusion target.

Meanwhile, review of the report from Micro Insurance Network on study of micro insurance in Ethiopia show that reaching the customers one-on-one is key in understanding what they need and to success of the scheme, according a research report.

This is not happening in Nigeria yet, as the few licensed micro and takaful insurers are

L-R: Damilare Bakare, head, ITC; Humphrey Ozegbe, head, Human Capital; Tony Saiki, Ag. head, Marketing; Daniel Braie, managing director/CEO; Abi Longe, speaker at the Customer Service Week; Okanlawon Adelagu, executive director, Tech; Emmanuel Otitolaiye, chief finance officer; Oluwaseun Ajila, head, Internal Audit; Imo O. Imo, head, Strategy & Bus. Dev; Taoheed Sikiru, chief compliance officer; all of Linkage Assurance Plc during the Insurer’s 2020 Customer Service Week held at the Company’s head office in Lagos

not reaching out to the population. They are not seen in the streets, they are not seen in the market places, where are they marketing the products?

The Report as Micro Insurance Network with the theme: ‘Know Your Customer: Challenging conventional wisdom in insurance’, says:

When researchers found that half the population of Ethiopia were both interested in and could afford to buy microinsurance products, it turned conventional thinking on its head. “We discovered things which were completely different from our preconceived ideas,”

says Craig Thorburn, lead financial sector specialist at the World Bank. “You can’t assume you know best what customers want. Anyone who is interested in being a profitable insurance company can’t afford to ignore a market of 50 million people sitting on their doorstep.”

Brokerage fraternity explore on rebuilding institutions post Covid-19 Modestus Anaesoronye

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gainst the backdrop of myriad of challenges confronting Nigeria as a nation, especially the economy due to Covid-19, the Nigerian Council of Registered Insurance Brokers (NCRIB) would be yielding its 2020 National Insurance Brokers Conference and Exhibition to discuss on how to rebuild devastated structures and institutions.

The Conference, which will be hybrid of both physical and virtual meeting, in adherence to government directives on social distancing, is expected to draw participants across the globe and would be preceded by the Annual General Meeting of the Council.

According to the Council, Steve White, chief executive officer of British Insurance Brokers Association (BIBA) would be speaking on the theme paper “Rebuilding Institutions post Covid-19” while Yomi Adebanjo, company secretary, Fidson Healthcare Plc would be speaking on “Dissecting CAMA 2020”.

Addressing journalists at a pre conference briefing , Bola Onigbogi, president of the Council, noted that the choice of Steve White to deliver the theme paper gives international coloration to the Conference as she said that delegates would be benefiting from BIBA’s experience, particularly, its systematic way of building institutions.

Onigbogi noted that White, who was appointed the chief

executive officer of BIBA in 2013 was based on his pedigree and achievement as the CEO of the largest Insurance Broking regulatory body in the world.

According to her, it is expected that after the conference, delegates are to be stimulated to get involved in systematic rebuilding of institutions that might have been destroyed by the advent of COVID-19.

NCRIB President also noted that the choice of “Dissecting CAMA 2020” as the sub theme for the conference was based on the need for the Council’s members and delegates to understand the nitty-gritty of the new law promulgated by the Federal Government to regulate business environment.

“The approval of the new

CAMA 2020 demonstrates government’s commitment to improving the ease of doing business in Nigeria. I believe that the various reforms of the new act will simplify regulatory processes, improve the operating business environment and re-energize the private sector which is the growth engine of Nigeria.

“Therefore, it is expedient for us as a body to understand the basic requirements and demand of our business to guide against running afoul of the law. Rising from this conference, it is hopeful that delegates would have been educated on what is needed to thrive in the present Nigerian business environment. The choice of Mr. Adebanjo to deliver the sub theme paper was deliberate and apt, Onigbogi noted.

Standard Alliance Insurance appoints Omotayo Awodiya new MD Bunmi Bailey

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tandard Alliance Insurance Plc has announced the appointment of Omotayo Awodiya as its new managing director.

The announcement was made at the Company’s 22nd Annual General Meeting (AGM), which took place virtually on September 30, 2020 Awodiya, is a seasoned Insurance Practitioner, an Associate Member of Chartered Insurance Institute of Nigeria

and Chartered Institute of Insurance Brokers as well as a Fellow of the Institute of Corporate Administration.

He has over 30 years’ experience in the Insurance industry, having worked in managerial cadre of companies like Executive Insurance Company Limited and Industrial & General Insurance Company Limited, among others. Prior to his appointment he was the managing director of Global Allianz Insurance Brokers Nigeria Limited, a position he held for over a decade. www.businessday.ng

“Coming to work for the company is like home coming, I was with the Company for more than 10 years before I left as a General Manager. So, there is nothing unfamiliar to me about the company’s operations and her great team of professional staff,” Awodiya said.

He also assured that the Management and Directors are working assuredly to meet the recapitalization deadline as well as position the company’s operations for post recapitalization competition.

While appreciating the un-

wavering support of all stakeholders, he assured shareholders that they would soon get good returns on their investments as immense efforts are being made to improve the Company’s profitability.

Also, at the AGM Johnson Chukwu was re-elected as the Company’s chairman and the appointments of Oduniyi Odusi-executive director; Agnes Umukoro -non-executive director; Uzoma Igbonwa non- executive director and Uwais Haruna Mohammedindependent director.

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Michael J. McCord, managing director of the MicroInsurance Centre at Milliman, agrees. “Some people said, why bother asking - we already know the answers.

But of course we now know the answers were not exactly what people thought.”

Both Thorburn and McCord were among the authors of the 2018 report What people want: investigating inclusive insurance demand in Ethiopia. The discovery that half the population were willing and able to pay for insurance cover surprised them. “It’s the sort of insight that only comes from knowing your customer intimately,” says Thorburn.

“Many companies say taking the time and effort to understand your customers thoroughly is too expensive.

But if a product doesn’t work well, it’s usually because the company doesn’t understand the customer. If you launch a product without doing the research, it’s going to fail, it’s going to pollute

the market and customers won’t be served well.”

The MiN’s latest Expert Forum KYC: Bugbear or hidden gem? brought Thorburn and McCord back together to stress the importance of consumer research before designing, developing and bringing a product to market. Assumptions about customer needs are often based on conventional wisdom which, when tested in the field, proves to be incorrect or at least misleading.

The 2018 report was on a scale rarely seen in the insurance industry. 3000 household surveys, 32 focus groups and countless followup interviews. “We not only know what customers are concerned about, we know if they sleep on a mattress, what their house is made of, how far they have to walk to hospital, which language they speak, which crop they get income from, who has a mobile phone and what kind of health issues they have,” says Thorburn.

Sigma Pensions launches chatbot to improve customer experience

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igma Pensions, as part of its commitment to create unwavering and enhanced customer service, has launched an Artificial Intelligence (AI) powered chatbot named ‘Nafi’ on WhatsApp to provide real-time self-service to customers.

Customers can now leverage on Nafi’s real-time messaging and response to check account balance as well as make general enquiries on their Retirement Savings Account (RSA) account.

Speaking on the launch of Nafi, Afolabi Folayan, executive director of Operations, said: “Sigma Pensions continues to explore ways to improve our customers’ experience throughout their pension journey and interactions with us. With the launch of “Nafi”, customers have the support they require literally on their palms right from the opening of their Retirement Savings Account to enjoying a pleasant retirement life. The ease of use and comfort of the customer has been taken into consideration in developing this App, and it will ensure you have all the relevant information you need to stay rest assured that your pension is safe and growing”.

On his part, Ugonna Onuoha, the chief technol@Businessdayng

ogy officer, said the chatbot would enable response to priority customer queries in real time. Queries such as how to open an RSA with Sigma Pensions, view their RSA PIN and balance, see the unit price for fund subscribed to, check the current status of benefits applications and see the last amount contributed.

Also, he added that the easy accessibility of Nafi would help Sigma Pensions build a stable relationship with the customers without them having to seek out physical channels.

Other self-service platforms by Sigma Pensions are the Sigma Buddy mobile app, Sigma Internet Portal on the website, Sigma-1-Dial (*7737*2#) and a Sigma multilingual call self-service Interactive Voice Response.

Sigma Pensions has also provided the ability for customers to complete RSA registration and the mandated bio-data recapture online via the website. The client will immediately receive confirmation of completion of the process with the newly registered RSA or notice of any missing documentation or incomplete registration.

In addition, customers can also contact Sigma Pensions through Sigma Live Chat on the website.

Wednesday 14 October 2020

BUSINESS DAY

BANKING

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

Here are 22 banks that suffered CBN’s CRR deduction worth N462.7bn Stories by HOPE MOSES-ASHIKE

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ast week, precisely, Friday, the Central Bank of Nigeria (CBN) debited banks of Cash Reserve Ratio (CRR) worth N462.7 billion for breach of its lending policy, BusinessDay has gathered.

The affected banks include Access (N75bn), Zenith (N60b), GTB (N55bn), Stanbic (N50bn), UBA (N45bn), Standard Chartered Bank (N40bn), Ecobank (N23bn), FCMB (N20bn), Unity (N15bn), Polaris (N14bn), and FBN Quest (N12bn).

Others are FBN (N10bn), CITI (N10bn), Providus (N8bn), Union (N7bn), Wema (N7bn), Coronation (N5bn), Fidelity (N4bn), Nova (N4bn), Titans (N2.7bn), Suntrust (N2bn), Globus (N1bn), Keyston (Nil), Heritage (Nil0 and FSDH (Nil).

On June 2019, the Central Bank of Nigeria (CBN) announced a new policy measure, which requires Deposit Money Banks (DMBs) to maintain a minimum 60 percent loan to deposit ratio.

The objective was to grow the economy through marking credit available to the real sector of the economy.

This, the regulator later raised to 65 percent and set December 2019 as deadline for compliance by banks.

Loan to Deposit Ratio (LDR) is a ratio, represented in per-

centage, between the banks total loans and total deposits.

We give them incentives that when they lend to the Small and Medium Enterprises (SMES), and private sectors, they will be granted certain dispensations to make them happy while failure to comply will result into taking 50 percent of the un-lent portion of their loans into the CRR,” Godwin Emefiele, governor of the CBN said.

In July 2019, the CBN wielded the first big stick on 12 banks for LDR default to demonstrate

its determination to jumpstart the economy. The regulator deducted N500 billion from the accounts of 12 banks for failing to meet the target to provide credit to their customers.

The deduction will continue to increase the effective CRR beyond the statutory threshold and limits the ability of the banks to consider other likely potential income positions, according to Nigeria’s Economist and Investment Professional.

What the deduction means for the sector is that it puts pressure

on the Net Interest Margin of the banks as these funds earn zero interest with the CBN, the Economist said.

This is responsible for the low deposit rates in the banks as banks may be wary of taking deposits. On the positive side, the economist said the low interest rate has shifted investors focus to other asset classes with higher yield which aligned with the CBN’s position.

The CBN at the first meeting of the Monetary Policy Committee (MPC) on January increased

the CRR to 27.5 percent from 22.5 percent. The increase then was as a result of concerns on the excess liquidity in the banking sector, occasioned by open market operations (OMO) ban for non-bank investors and corporates.

In March this year, the CBN deducted a whopping N1.4 trillion from the banking sector’s CRR as all Nigerian Deposit Money Banks (DMBs) and Merchant banks failed to meet the 65 percent Loan to Deposit Ratio (LDR) at the end of March 2020.

Olusegun Akintunde, financial market analyst at Polaris Bank Limited, said the impact has always been the same, squeeze the system of liquidity and impact the ability of banks to bid for FX in size.

On June 2020, the CBN debited banks the sum of N216bn for breaching its CRR requirements.

One of the major implications of the CRR debits for deposit money banks is the adverse material impact on their liquidity ratios, FBNQuest said in a note in June 2020.

On July 2020, the CBN debited banks an additional sum of N118bn for breaching its CRR requirements.

The higher CRR is in line with the CBN’s liquidity mopping efforts which have intensified this year amid rising inflation.

The Monetary Policy Committee (MPC) noted in its last meeting that the CBN policy measures have assisted in boosting credit to the agricultural and manufacturing sectors.

UBA enhances customers’ access to banking services with 100,000 PoS amidst Covid-19

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eeply committed to customer experience and satisfaction, United Bank for Africa (UBA) has within the Covid-19 pandemic, deployed a total of 100,000 Point of Sales (PoS) terminals to merchants, Ariaria market Aba, restaurants, Street and other markets, for seamless access to banking transactions by customers.

To further include the unbanked and the underbanked population, the bank has established 5,000 banking agents across the country.

“We did over N50 billion on PoS and agency banking and we are sustaining these ecosystems, post-Covid-19,” Alex Alozie, group head, operations, said at

a virtual media parley to celebrate Customer Service 2020 on Wednesday.

Michelle Nwoga, who also spoke at the meeting, said the bank prides itself as an organisation that always takes customers first.

She said COVID-19 has changed the way businesses do business and that the bank is now very much a data driven organization.

“You have to transform internally to be able to deliver value for your customers. We have kicked off a transformation journey that will be able to impact our customers,” Nwoga said.

The theme of this year’s Customer Service Week is ‘Dream Team’. The Customer Service www.businessday.ng

Week is an annual celebration globally in recognition of the importance of customer service, to appreciate the staff who serve and support customers with care and professionalism.

Alozie said in the last one year, UBA embarked on an intensive drive to transform its services to customers, not only in the banking halls in Nigeria, but also across Africa and beyond, to all the regions where it operates.

He said the bank has made sure that its customers enjoy optimal self-service, where they can make use of their devices to carry out any form of transaction seamlessly, without having to go to the banking halls.

“We have seen a lot of improvement in this area, especial-

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ly during the COVID-19 pandemic. In fact, I can say the pandemic brought out the best of us. With newly improved products like UBA Connect – where our customers can carry out transactions from anywhere in the world – and our recently improved mobile applications, our uptime has improved significantly, and our branches have also recorded considerable improvements. All these are a result of the transformation journey embarked upon by the bank,” Alozie said.

In its expansion plans, the bank intends to open additional 25 branches across the country before the end of 2020. Alozie said this in responding to BusinessDay’s question about strong focus on digitisation leading to @Businessdayng

closing of some branches. He said branch closure is not in the agenda of the bank.

According to him, the bank is moving in a direction that would ensure that every customer’s needs are met whether by the brick and mortar bank or through digital offerings.

“We have opened 6 branches in the last two months and we are committed to opening 25 branches by the end of 2020.”

As part of the bank’s Customer Service Week celebration and to appreciate customers, 12 customers won N5,000 each while 10 customers won free airtime during the UBAInstaLive giveaway.

The next giveaway will hold right on Twitter on Friday at 6:00PM, the bank tweeted.

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Wednesday 14 October 2020

BUSINESS DAY

MARITIMEBUSINESS SHIPPING

LOGISTICS

MARITIME e-COMMERCE

How SIFAX’s investment in bounded terminal eases cargo clearance from Lagos Ports Over the years, traffic congestion within Apapa and Tin-Can Island Ports has continued to go from bad to worse. This has resulted to long man-hour loss for port users such that cargo owners and residents spend quality time on the road while trying to have access into Apapa port city. To ease the impact of Apapa gridlock on importers and exporters that rely on ports in Lagos for business, forward thinking companies such as SIFAX Group has invested heavily on off-dock facilities also known as bounded terminals to facilitate cargo clearing and evacuation. AMAKA ANAGOR-EWUZIE reports.

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nland container terminals, popularly known as bounded terminals, are facilities located outside the seaport where containers can be moved for onward Customs examination, clearing and release in order to reduce or avert congestion in the main seaport terminals.

Usually, once there is 70 percent yard occupancy at the port terminal, it means there is need to stem some of the laden containers to bounded terminals that are licensed by Nigeria Customs Service (NCS) in order to decongest the port yard.

Presently, Apapa port is experiencing 90 percent yard occupancy, which shows that there is congestion and longer dwell time for imports.

This is why the SIFAX Container Terminal at Ijora Causeway, Lagos is coming at time when it’s needed and holds high hopes and opportunities for consignees.

With the terminal, which is located along the Ebute Metta Creek in Ijora, Lagos, importers doing business in Apapa and Tin-Can Island Ports can now heave a sigh of relief as consignees can now avoid the dreaded Apapa gridlock by designating their cargoes to the new terminal where containers can be stemmed from the main seaports using barges.

Registered under the Apapa Command of the NCS, the terminal is well equipped with the right facilities, equipment and experienced personnel that can make loading and offloading of cargoes a great experience. The equipment include - reach stackers, forklifts, CCTV, empty and full container handlers, and well secured with both private security guards and men of the Nigerian Police Force.

Findings show that the terminal is run using the globally-tested OSCAR terminal operating system which allows easier location and retrieval of containers. Also, personnel with industry experience spanning many years in the profession of handling containers with good customer service would be on ground to deliver best value to consignees. The terminal’s billing system positioned, and the staff well trained to work through multiple service points for fast service delivery.

At the recent commissioning of the terminal in Lagos last week, Taiwo Afolabi, group executive vice chairman of SIFAX Group, said the company decided to invest in the facility to make the process of cargo clearing a wonderful experience as opposed to what is obtainable in the main ports.

Afolabi, who was represented by Adekunle Oyinloye, group managing director, SIFAX Group, said the new terminal, which would be a model

and sits on 11 acres of land, will leverage on technology and innovations to deliver an unparalleled customer experience as well as cutting-edge inland container services.

“The SIFAX Container Terminal, Ijora, Lagos is our modest response to a major issue in the maritime industry – access to Lagos ports. The logistics nightmare in Apapa caused by the traffic congestion experienced by port users compelled the group to look for a solution that addresses the seemingly intractable problem. With this terminal, agents, truckers and consignees do not have to go to the ports before getting their consignments cleared,” he said.

On the unique advantages of the terminal, Afolabi said consignment would be transferred primar-

ily through barges from Apapa and Tin-Can Island ports, adding that the good road network in the area also offers clients faster and efficient cargo clearing.

“This terminal is IT-driven because the Group has decided to invest in technology to sustain quality service delivery to our clients.” Afolabi further said.

One of the advantages of the facility, according to BusinessDay check, is that the Group’s flagship businessPorts & Cargo Handling Services Limited, located at Terminal C, Tin-Can Island Port, will be able to stem cargo to the terminal using barge, addition to about 100 modern trucks owned by the logistics subsidiary of the Group, which can move consignments to any part of the country.

Also, the Group has efficient clearing and forwarding team that has built a robust relationship with Nigeria Customs, which would be on ground to support the clearing needs of consignees.

On the other hand, the Group has empty container depot located just about 200 meters to the terminal to sort the challenge of returning empty containers for consignees. With this, the terminal in essence has a capacity to function as a one-stop shop for all logistic needs.

Hadiza Bala Usman, managing director of the Nigerian Ports Authority (NPA), who also spoke at the event, described the facility as a turning point in Nigeria’s quest to encourage private participation in the provision of facilities for economic growth and development.

Represented by Onari Brown, executive director, Marine and Operations, Usman said the initiative by SIFAX Group was a clear manifestation of the company’s identification with the policy trust of government by creating a port expansion facility through the conception and realisation of this project.

This facility, according to her, will have direct socio-economic benefits including port decongestion, quick turnaround of vessels, easy cargo clearance and reduction of traffic on port approaches, employment generation for host communities, human capital development, increased GDP and increase revenue to government.

She further disclosed that the terminal was equipped with fixed import/export laden and empty containers equipment aimed at absorbing pressure from the main ports and increasing overall terminal holding capacity of the ports in Apapa.

“With the sustained creation of the right environment for business to L-R: Adekunle Oyinloye, Group Managing Director, SIFAX Group; Wale Afolabi, managing director, Instarmac Nigeria; Onari Brown, executive director, Marine and Operations, Nigerian Ports Authority and Adewale Adeyanju, president general, Maritime Workers Union of Nigeria at the commissioning of the new SIFAX Container Terminal, Ijora Causeway, Lagos

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thrive by government as exemplified by the port concession programme of the NPA, there is great hope for growth and development for the overall sectors of the economy,” she said.

On his part, Mohammed Abba Kura, Customs Area Controller, Apapa Command, who noted that the new terminal makes its three bounded terminals belonging to SIFAX Group that are located under Apapa Command, said Customs is always ready to support genuine investors in facilitating international trade.

“Once business starts fully, the terminal will have much on their hand to handle because containers can be brought to the terminal using barges and cleared cargoes can as well be evacuated using barges or trucks due to ease of access along the coastline,” Kura said.

Vicky Haastrup, executive vice chairman, ENL Consortium lauded SIFAX Group for always being at the forefront of innovations in the country’s maritime sector.

Haastrup, who doubles as the chairman, Seaport Terminal Operators Association of Nigeria (STOAN), described SIFAX investment as truly Nigerian, adding that Nigerians are stepping up in the maritime sector, which was formerly dominated by foreigners. “Nigerians are now taking their rightful place in the maritime sector and we see many more to come. This shows that the NPA under Hadiza Bala Usman is truly supporting indigenous terminal operators to grow,” she said.

SIFAX Container Terminal at Ijora Causeway is strategically located within the precincts of the Lagos ports to provide a viable option to all importers, exporters and shippers, who had suffered untold hardship over the years from Apapa debilitating traffic.

The new terminal will give consignees and agents the opportunity of faster and easier clearance of consignments as well as access to a better road network devoid of crippling traffic congestion that makes accessing and exiting the Lagos ports a painful experience for truckers and other port users.

Apart from the cargo handling equipment, the terminal also boasts of the right environment and ambience for clients to conduct their businesses. They include a well-equipped clinic; business centre where services such as document photocopying, typesetting and internet services are offered; and a well-furnished agent house to give customers the deserved comfort. It was also understood that in the nearest future, the Group has plans to upgrade the terminal to a jetty, where vessels can berth as it has begun works with relevant regulatory agencies to achieve this feat.

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TRANSPORTation Motoring

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ModernTravel

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Africa auto sales down 28% on Covid-19 DPR, NCS, FBN, GTB win big at Toyota Awards … Grey vehicle imports constitute over 80% MIKE OCHONMA Associate Editor

whilst ensuring the safety of the consumer without major disruption to the existing used-car market.

“Ultimately all secondhand vehicles should come from vehicles that were assembled on the continent, or that were imported as new vehicles, as part of an automotive programme’’.

Coffey says the automotive industry plays a disproportionately small role in manufacturing Africa. In 2019, new-vehicles sales in Africa represented 1.3 percent of global demand, while Africa has

17.2 percent of the world’s population.

He pointed out that, the economic benefits of having a fully-fledged integrated auto manufacturing sector are considerable and requires advanced manufacturing technologies, while it also creates a deep value chain and skilled employment.

The significant growth to five-million vehicles sold in Africa requires the implementation of effective automotive policy that would serve as the core focus of the AAAM. The AAAM is actively

‘

In 2019, new-vehicles sales in Africa represented 1.3 percent of global demand, while Africa has 17.2 percent of the world’s population

promoting the rollout of vehicle manufacturing value-chains in Africa, which requires intervention from governments to curb illegal, grey and secondhand imports, as well as the drafting of policies to support local vehicle and parts assembly.

Nigeria’s minister, NRC boss for Africa’s rail freight use in logistics confab MIKE OCHONMA

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igeria’s minister of transportation; Rotimi Amaechi will be joining other government officials across the globe next week Monday and Tuesday for the forthcoming Africa’s rail freight use virtual conference. Kurt Bauer, directo, long-distance traffic and new rail business, O.B.B. Personenverkehr Germany is expected to deliver the keynote address.

The Africa’s Rail Conference holds physical conference every year in South Africa to chart a course on ways of exploring areas of improvement on the continent’s rail system, but this year’s event will be restricted to virtual conference due to the coronavirus pandemic.

Expected at the virtual conference alongside the transportation minister Clive Roberts, a professor of railway systems and railway research director, Birmingham centre for rail research and education, United Kingdom, Julio Gomes-Pomar, chairman, IE Centre for Transport Economics and Infrastructure Management, Spain.

e sp i te t h i s yea r ’s c o ro nav i r u s p a n demic that negatively affected businesses globally and forced many to cut back on their finances, there are still few organisations like Toyota Nigeria Limited (TNL) that braved the devastating impact of the hiatus to appreciate corporate institutions and individuals that supported them in 2019 in commomeration of its annual awards that started way back in 2005.

At the appreciation and presentation ceremony held at the corporate head office of TNL in Lekki last weekend, the Department of Petroluem Resources (DPR) won the Evergreen Customer of the Year award for its commitment to and consistent patronage of Toyota products and services over the years.

In the customer category, the Nigeria Customs Service (NCS) came first in the Customer of the Year cat-

dealers which serves as a testimony to Nigerians that Toyota is the brand to match in terms of quality, durability, reliability and professional after sales delivery.

Managing director said that TNL has enjoyed the patronage of innumerable number of customers since inception while continuously seeking the best approach and technology to meet customers’ needs and aspirations. He assured customers of commitment to continue to meet market expectations at every customer touch point. ‘’Consequently, TNL on annual basis rewards its loyal customers that have remained resolute in their commitment to the brand and its services.

Year 2020 was not an exception despite the challenges posed by the pandemic, the organization made good to reward its loyal customers’’. The managing director concluded.

Toyota Nigeria Limited remains the sole distributor of Toyota products for Toyota Motor Corporation (TMC) Japan in Nigeria. The company

egory while First Bank Nigeria (FBN) plc and Guaranty Trust Bank (GTB) emerged the first and second runner-up in the customer of the year category respectively.

Representatives of all the winning organizations expressed appreciation for TNL’s recognition and reward of their patronage. They assured that they will continue to patronize TNL while encouraging them to remain consistent in their delivery of quality service and products to their customers.

Also rewarded at the ceremony were the motoring journalists that proved their mettle and professionalism in their objective reporting of activities and events in the automobile industry and TNL activities.

Mike Ochonma of BusinessDay, Theodore Opara of Vangaurd and Rasheed Bisiriyu of Punch emerged winners in the motoring journalists’ category.

Speaking during the award presentation, Kunle Ade-Ojo, managing director and chief executive of Toyota Nigeria Limited stated that TNL appreciates and values all its customers and would remain resolute in its superior quality service delivery to them.

He declared that over the years, many of the Toyota customers have been outstanding and committed in their patronage of its products and services from its accredited

is well positioned pan Nigeria to provide industry-best aftersales service in the areas of genuine parts, vehicles servicing/repairs and sales of Toyota vehicles approved for Nigerian roads/environment by TMC Japan.

Chairman of TNL, Michael Ade.Ojo, noted that “the Superior Quality Toyota brand is built on a strong foundation of the Can-Do spirit, noting that nothing will hinder TNL from its teeming loyal corporate and individual customers through the years.

Ade.Ojo thanked dealers that have been resolute in their quality of service delivery to customers including journalists that have remained transparent in their reports on the auto industry and Toyota activities. ‘’We will continue to seek new ways to reach out to our numerous customers to fulfill our mandate to keep them happy and satisfied. This gesture I must emphasize is hinged on our philosophy of rewarding loyalty no matter the circumstance. We will push beyond new horizons to achieve set targets”.

Head, dealer development and special projects, Henry Ojuoko thanked all winners for their continued patronage/ commitment and encouraged others to be in the winner’s seat next time as the company looks forward to a bright and rewarding 2021.

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he Covid-19 pandemic has wreaked havoc on new-vehicle sales in Africa, which are expected to drop from 1.16-million units in 2019, to a current forecast of 830,000 units this year, says Dave Coffey, chief executive officer, African Association of Automotive Manufacturers (AAAM) at its event and Deloitte Africa Automotive Forum event.

Reacting on the development, the AAAM chief executive said, “This is a 28 percent reduction, which is quite significant.

However, the market will recover, and we believe that new-vehicle sales on the continent can increase to five-million units per year in the medium term.”

Coffey says secondhand and grey vehicle imports constitute more than 80 percent of vehicle sales in Africa. He stated that with an effective auto ecosystem, this can be reduced to an acceptable ratio that enables integrated auto manufacturing,

…BusinessDay reporter wins in media category

Asphalt formation that will carry the ongoing $1.5 billion LagosIbadan standard gauge rail track passing under the newly constructed dual carriage bridge at Costain bus stop. The new rail line will be linking the ever busy and container-infested Apapa seaport to connect the Ebutte-Metta Junction (EBJ) of Lagos rail district.

Pix by Pius Okeosisi

Others government functionaries are Andy AppiahKubi, deputy minister in the ministry of transport, Ghana, James Sankwasa, deputy minister in the ministry of works and transport, Namibia and Ronah Serwadda, commissioner and regional integration expert, ministry of East African Community Affairs, Uganda Expected at the virtual meeting is Fidet Okhiria, the newly reappointed managing director of the Nigeria Railway Corporation (NRC) that will be joining speakers from Ghana and Senegal in providing spotlights into the hottest projects www.businessday.ng

in in these countries and what is being done to open the investment door.

Crucial topics that will be handled by various industry experts are cyber-defence: guarding rail against evolving threats, smart infrastructure: digitalising to optimise your assets as it relates to rail technology, extending the life of rolling stock via on board monitoring, including data and analytics in African Rail operations in terms of intelligent infrastructure.

Other areas of searchlights are the new tech in train to ground communication, shifting from a product-only busi-

ness to a lifecycle business in rolling stock, forging rails path towards IoT infrastructure, signalling and communications build out in Africa, observing rolling stock and detecting early failure, and leveraging ML, AI and automation to address cost and performance.

Slated for discuss is increasing private investment into African Rail projects using the Luxembourg model, assessment on regional integration-Taking full advantage of the Africa continental free trade area agreement, use of rail freight in logistics, rains with brains: Advantages of AI and digitisation in terms of operational efficiency with finance and investment experts taking a look at developing a bankable project.

While speakers on intermodal freight will be discussing issues on overcoming barriers of entry preventing emergence of new entrants, technological advances in operational efficiency when it comes to operational efficiency, government officials from Namibia, Botswana, Congo and Mauritius will be looking at what is being done to open the investment door taking excursion at the hottest projects in the pipeline.

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interview Political class is the primary beneficiaries of the anomaly in our politics, so lacks the incentive to correct it – Ezekwesili Oby Ezekwesili, former education minister and ex-vice president of the World Bank’s Africa region, as well as a presidential candidate in the 2019 presidential election in Nigeria is a popular voice in the Continents political space. In this interview with select journalists unveils her latest research work on major setbacks to genuine enthronement of democratic cutlture in Nigeria and Africa. Modestus Anaesoronye presents the report. Excerpt:

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s a prominent stakeholder in Nigeria’s socio-economic development, what would you identify as the major setbacks to genuine enthronement of democratic culture?

I recently completed research on this issue as a Richard von Weizacker Fellowship at the Robert Bosch Academy in Berlin. As a candidate for the office of the President of Nigeria in the 2019 elections, I directly witnessed the absurdity of our politics and it naturally awakened my intellectual curiosity. What I observed in politics in that short time set me off on a journey to reflect and better understand the challenges of our Democracy, Politics and Governance. My research #FixPolitics has some interesting findings that specifically address your question.

There are three interconnected factors that hinder democratic development in Nigeria and the rest of our continent. These are : The absence of a productive and politically literate, empowered and engaged voting population; The dominant culture of a political class (politicians and their allies across society) that subordinates the collective good of the society to their personal interest without any consequences; and The existence of weak constitutional, political and electoral institutions and context which lead to an ineffective regulatory context for politics.

What essential features should define the ambitious project of fixing politics in Africa, particularly in Nigeria, the most populous Black Country?

My #FixPolitics research findings concluded that every democracy including that of Nigeria can function well when it stands on three triangulated pillars of : Empowered and Engaged Citizens who vote rationally for candidates that can effectively run government on their behalf; Ethical, Competent and Capable Politicians who compete for votes by presenting citizens with alternative plans of how they will govern on their behalf; credible Institutions that include constitutional , political and electoral bodies to regulate the relationship between citizens and politicians. This means there are three key factors that determine the quality of political culture and outcomes in democracy; the engagement of the citizens as informed and active electorate; the quality of the political class and politicians who vie for elective offices; and the institutional integrity of the political regulatory system and context.

The #FixPolitics research evaluated how well these three triangulated pillars are doing in Nigeria and Africa more broadly. We have five major findings: Adopting a theoretical model that assumes Governance as a product or service in a market structure, we simplified and were able to interrogate what

happens between the demand side ( that is, the electorate or voters), the supply side (that is, the political class who run for elective offices) and; the institutional and regulatory context ( that is, constitutional, political and electoral environment) in which both sides interact; Our politics is structurally challenged with unequal power relations between the people and a political class that is unaccountable in the exercise of their public mandate. We named the phenomenon, “monopolistic democracy” and like all monopolies, society is endangered by the distortionary effect it has on social outcomes; If we do not #FixPolitics urgently, Politics will disintegrate and destroy Nigeria permanently and that is because, our ruling class has entrenched a corrupted political culture that stunts the common good of citizens and their society without any consequences.

Others are the corrupted political culture which undermines citizens, families, communities, society at large, businesses and the economy as well as government, public institutions and the governance processes; and the corrupted political culture is invasive and pervasive and thus constitutes a major obstacle to economic growth and development of Nigeria and continent. This inhibitive effect on development is the reason for high incidence of extreme poverty in Nigeria despite the huge endowment of population and natural resources. The good thing is that the solutions to these problems were also identified by the research.

Where should the effort to fix politics begin and what could be a probable timeframe to evaluate progress?

The research found that any effort to #FixPolitics has to begin with the Citizens pillar of the democracy triangle. It is only the Citizens Pillar that retains the credibility to fix the broken political system www.businessday.ng

and corrupted culture that is to be fixed. The Political Class Pillar cannot #FixPolitics because they are the primary beneficiaries of the anomaly in our politics therefore inherently lack the incentive to correct it. The Regulatory Pillar unfortunately lacks the independence, strength, capability and the credibility to check the excesses of the political class in particular. It therefore leaves only what makes the research unique is how it uses evidence to sequentially guide citizens that are persuaded to act.

Fundamentally, the Citizens who step out to #FixPolitics must act on all three pillars concurrently and simultaneously. The solutions highlighted each Pillar must be systemically launched at the same time as the others. Citizens have to execute the political structural transformation agenda in a systematic, coherent, coordinated and collaborative way. It is the only way citizens’s effort will gather the systemic momentum and creates political structural shifts that correct political culture and outcomes.

A silo approach at addressing the problems identified for each of the triangulated pillars will fail for lack of integrative impact. It is why the Work Study Group- WSG is made up of a diverse group of Nigerians from all regions of Nigeria, works of life and political persuasion. The members of the WSG are bound in the common vision, mission and core values of transforming Nigeria’s deformed politics and governance by rallying behind the #FixPolitics research findings. The WSG members work together to design and execute the programs under each of the three pillars while collaborating on cross-cutting issues in an ecosystem-building approach. On evaluating progress of #FixPolitics, it is important to clearly convey that this initiative is not a dash but a marathon. This initiative is not about 2023. #FixPolitics is about designing Nigeria’s and Africa’s way out of the trap of un-

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derdevelopment occasioned by our faulty political foundation. It is not partisan. It is about building a new political culture of taking responsibility through participation and empowered engagement by citizens and providing service and public accountability by public leaders.

More specifically, the workplans developed for each pillar have specific and easy-to-measure actions that are of short, medium and long-term delivery and impact. For example, in the Emerging a New and Value-Based Political Class Pillar, we are establishing an Unconventional School of Politics, Policy and Governance which will fully commence in 2021 and annually produce at scale a new class of value-based politicians on a mixed curriculum of theory and practice of ethical politics, design of sound economic, social, sectoral and structural policies and building strong, open, accessible, transparent and accountable institutions, regulatory and legal contexts. We are aiming to graduate 500 such people twice each year. Our school is unconventional because it is designed to disrupt the mindset of the 500 citizens that will have the privilege of being admitted into each class cohort every six months. Since the current marketplace of supply of politicians is holding the country hostage to a destructive political culture, we can upend their dominance by producing a new political class of public leaders with the requisite character, competence and capacity.

A complex mix of challenges, including low literacy level and economic deprivation has thrown up what could be described as crisis of democracy in Nigeria, is it possible to inject sanity into the country’s politics?

You are spot on identifying the adverse impact of low literacy level and poverty on our democracy. In my research, there is a conclusion that these two factors inhibit the quality of voting decisions of our electorate that are within the low-income class. First, the illiterate is likely to be poor. The daily financial worth of the productivity of poor people in our country is extremely low and so whatever is offered them by unscrupulous politicians on Election Day is hugely attractive. For them Election Day is simply another day of struggles to eke out a living. Election Day is not a decision about the next four years for most poor voters.

They have concluded that since governance did not improve their wellbeing in the previous years, nothing in the future would change.

They therefore rationally make a decision to sell their vote and “earn an income” for each time they do so. In my conclusions, I wrote it this way: “The Price of the vote of the low-income voters in Nigeria is extremely low, and corrupted politicians can easily pay for it.”

Second, the poor who are illiterate will also likely lack political literacy and so do not realize the power of their constitutional right to vote. @Businessdayng

In the power relations between the electorate and those they vote into office, the former have failed to take their primacy in our democracy.

What does the #FixPolitics research recommend for these two issues?

Design a bundled and simultaneous program of economic empowerment and political literacy for low income voters. The economic empowerment component of the program raises their productivity.

The political literacy component raises their political consciousness and awareness of their self-interest in elections and governance that follows afterward. Organizations and groups interested in emerging an empowered and engaged electorate then work together to use Technology to identify, connect, combine and scale up existing and new programs of economic empowerment for women and young people who together make up more than 70 percent of the voting population. Remember that women and young people are also the voting constituencies that actually turn up to vote on Election Day to vote. Imagine that in between our electoral cycles (that’s four years between one election and another), some organizations and groups collaborate to design a new economic empowerment initiative that is bundled with political literacy sessions or that they redesign existing programs in an intentional way to raise the productivity and political knowledge of say, Akara sellers across Nigeria.

Imagine that currently Akara sellers toil for just a daily net income of say, N1000- N2000. Imagine that the programs succeed such that their average daily financial output double or triple , rising above the “price that politicians will offer for their vote in elections”. Now imagine that four years later, the now more productive, empowered and more politically-conscious Akara seller is faced with the offer to sell their vote. What do you think will happen in their decision-making? It is more probable that they would resist the offer and rather vote for candidates that will govern to improve their wellbeing because they have experienced improvement from a thoughtful and effective intervention. Now they know why choosing the right candidates in elections can further improve their households and communities.

Finally, Design and launch an innovative data-based nationwide political literacy campaign using community organizing modules to awaken and engage the over 60% of low-income registered voterpopulation that has never participated in elections by voting after being registered to vote. That only 15 million out of 84 million registered voters elected a President into office in 2019 is a risk that can be transformed into an opportunity to bring in new voters without the distorted incentives of repeat voters to sell their vote.

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Wednesday 14 October 2020

BUSINESS DAY

INSIGHT Address by Engr. Suleiman Adamu, Fnse, Faeng., honourable minister of Water Resources on the occasion of the 2020 Global Handwashing Day Commemoration media briefing, 12th October, 2020

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PROTOCOL am pleased to address you at this media briefing event as we highlight the activities outlined for the commemoration of the 2020 edition of the Global Handwashing Day. As you may be aware, October 15 was designated by the United Nations General Assembly as a global advocacy day dedicated to increasing awareness and understanding about the importance of handwashing with soap, which is an effective and affordable way to prevent diseases.

This day is expected to catalyse local, national and global actions and build the culture of hand washing with soap.

• The 2020 Global Handwashing Day theme of ‘Hand Hygiene for All’ is aligned to the recent Hand Hygiene Global Initiative launched by World Health Organization (WHO) and UNICEF to implement the recommendations on the prevention and control of COVID-19. This initiative is aimed at ensuring behaviour change and lasting infrastructure beyond the pandemic and requires putting in place policies, institutional environment, handwashing facilities and scaling up successful evidence-based approaches for a sustained hand hygiene practice. As a country, we need to develop a comprehensive roadmap to ensure that hand hygiene remains a mainstay among the populace, long after the pandemic.

• Handwashing with soap is critical to disease prevention and not only helps people improve their health, but also removes barriers to economic opportunity, allows children to learn and grow, and helps strengthen communities. It is considered as an affordable, accessible “do-it-yourself” vaccine for sanitation and hygiene related diseases like diarrhoea, cholera, typhoid fever and pneumonia which are prevalent in our communities. It is estimated to cut deaths from diarrhoea by almost half and deaths from acute respiratory infections by a quarter. A recent study showed that regular handwashing with soap can reduce the likelihood of COVID-19 infection by 36%.

Handwashing with soap also helps to ensure the sustenance of efforts to end Neglected Tropical Diseases (NTDs) such as River Blindness, Lymphatic Filariasis, Onchocerciasis, Soil Transmitted Helminthes and Schistosomiasis.

• According to the 2019 Water, Sanitation and Hygiene National Outcome Routine Mapping (WASHNORM) re-

Engr. Suleiman Adamu

port, national access to basic hygiene services indicated by availability of handwashing facility with water and soap is 16% with an estimated 167million people lacking access and disparity across locations and wealth quintiles. In schools and health care facilities, access to basic hygiene is 10% and 20% respectively while only 5% of public places such as markets and parks have basic hygiene facilities.

• These figures signified a marked reduction in access to hygiene services compared to the 2018 WASHNORM survey.

While a high knowledge of handwashing practices estimated at 81% was reported in the 2019 WASHNORM survey, only 10% of the population can demonstrate proper handwashing with water and soap under running water while a minimal 5% are likely to practice proper handwashing with water and soap at critical times which includes after defecation, touching animals or sick persons, playing and before cooking, eating, handling food, or feeding others.

• We understand that the outbreak of COVID-19 has reawakened a consciousness of handwashing practices and it is important that we maximise this opportunity and ensure the sustainability of these infrastructures and behaviour, to achieve hand hygiene for all.

This calls for collaboration and partnership with all Stakeholdwww.businessday.ng

ers because everyone has a role to play. My Ministry was recently admitted as a partner of the Global Handwashing Partnership which is the umbrella body of organizations promoting the cause of handwashing with soap globally. We will be leveraging on the opportunities that this global partnership presents to Nigeria towards improving the culture of handwashing with soap in the country.

• As you may be aware, the ‘Clean Nigeria: Use the Toilet’ Campaign to end open defecation in the country by the target year of 2025 is ongoing and hygiene promotion is an integral component, with emphasis on handwashing at critical times, to break the faeco-oral route of disease transmission.

A national study to analyse the handwashing programming landscape in the country was also carried out this year with the support of our partners and the report of that study will be shared as part of the planned activities for commemorating this year’s event.

• The National Task Group on Sanitation (NTGS) which is a coordinating mechanism for sanitation and hygiene at the national level, has planned the following activities for the commemoration of the 2020 Global Handwashing Day: • On Tuesday, 13th October 2020, a webinar will be held to discuss the state of handwashing in the country and unveil the national handwashing study re-

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port which is expected to inform handwashing programming in the country.

• There will be a month long electronic and social media engagements on Radio, Television and Social Media platforms.

This includes discussion programmes, airing of jingles in local languages across different States; digital posters, banners, short videos, bulk SMS messages, etc.

• Awareness and sensitization visits will be carried out on Thursday, 15thOctober 2020 to designated markets and motor parks across the Area Councils in FCT to highlight effective handwashing techniques and distribute handwashing materials.

• The main commemoration event on Thursday, 15th October, 2020 will be a visit to the Medium Security Custodial Centre at Kuje, where I will be presenting alongside my colleagues, handwashing facilities and products to the Facility, and also perform the symbolic handwashing.

• The Honourable Ministers of Education, Health and myself will also be participating in an early morning live TV programme on Thursday, 15thOctober.

• In the afternoon of Thursday, 15th October, a live Facebook talk show event will be held to engage online audience on the significance of effective handwashing with soap.

There will also be presentation of handwashing facilities to selected schools, healthcare facilities and markets across the FCT in the course of this month.

• All these activities are with the support of our partners – Action Against Hunger, OPSWASH, Procter and Gamble, Reckitt Benckiser, UNICEF, WaterAid and WSSCC. Across the country, state level activities are also being carried out during this period to commemorate the day which are all aimed at creating massive awareness across the country on the adoption of the habit of handwashing at critical times.

• As I conclude, the tagline: Hand Hygiene for All, reminds us to ensure that we make available opportunities for everyone to practice handwashing with soap at all critical times as we build a culture of good hygiene practices which lasts well beyond this pandemic period. I therefore enjoin us all to always remember that handwashing with soap is for all – great and small, young and old, rich and poor. We should therefore be an advocate for making it a habit as we celebrate the 2020 Global @Businessdayng

Handwashing Day. Let us all choose handwashing not only on Global Handwashing Day and during Pandemic alone, but every day.

‘Hand Hygiene for All’ WELCOME ADDRESS

BY MRS DIDI WALSONJACK, PERMANENT SECRETARY, FEDERAL MINISTRY OF WATER RESOURCES ON THE OCCASION OF MINISTERIAL MEDIA BRIEFING ON GLOBAL HANDWASHING DAY COMMEMORATION, 12TH OCTOBER, 2020 PROTOCOL I am happy to welcome you to this media briefing event to highlight planned activities to commemorate the 2020 Global Handwashing Day. We are commemorating the 2020 Global Handwashing Day under the platform of the National Task Group on Sanitation (NTGS) and with the support of our Partners.

• Handwashing with soap is a lifeline to preventing many sanitation and hygiene related diseases. In the context of the COVID-19 situation, it is one of the main non-pharmaceutical preventive measures. The essence of commemorating global days such as the Global Handwashing Day is to create awareness, advocate for increased collaboration and partnership in the national effort to improve access to handwashing services and mobilize the populace on a sustainable behaviour change path. This is expected to provide the basis for our developmental efforts in building a healthy and virile nation.

• Today’s event is being hosted by the Honourable Minister of Water Resources, Engr. Suleiman H. Adamu, joined by his colleagues from line Ministries such as Agriculture and Rural Development; Education; Environment ; Finance, Budget and National Planning, Health, Humanitarian Affairs, Disaster Management and Social Development; Information; Women Affairs; Works and Housing, as well as our Development and Private Sector Partners.

• This is being done in the spirit of collaboration and partnership as we build a culture of handwashing with soap and ensure good progress in our national aspiration of making Nigeria an enviable place to live for all citizens: where we all wash our hands at critical times!

5. I welcome you all once again and wish us all a fruitful media parley. Thank you.

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Wednesday 14 October 2020

NEWS

Private investments will bridge vocational skills gaps in Nigeria- experts KELECHI EWUZIE

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ndustry experts say continuous investment by private sector in vocational skills development is the solution if Nigeria is to address the unemployment challenge in the country.

Jordi Borrut Bel, managing director, Nigerian Breweries Plc, says private sector involvement in creating entrepreneurial opportunities will help women and youth acquire various vocational skills needed to be self-employed and employers of labour rather than job seekers.

Bel while speaking at the recent launch of a youth and women empowerment programme for 475 people in five communities across Lagos, Ogun, Kaduna, Enugu, and Imo where the company has business, said the initiative was in line with the company’s ‘winning with Nigeria’ philosophy.

Speaking while declaring the empowerment programme open, explained that the initiative which started with a pilot run last year is part of the company’s commitment to harness the potentials of the youths and

women in local communities for development.

According to Bel, “there is no better time to partner in the empowerment of youth and women than now, as Nigeria and the world faces up to the economic challenges brought about by the coronavirus pandemic. At Nigerian Breweries and as a Partner for Recovery, we recognize that it is now, more than ever before that we should empower our women and youth”.

Sade Morgan, corporate affairs director, Nigerian Breweries Plc, equally stressed that the programme themed ‘empowering our women and youth for growth’ was designed as a veritable platform to unlock the potentials of Nigeria’s huge youthful population and women for greater economic benefits not only for the communities but Nigeria as a whole.

Morgan expressed optimism that the initiative would not only offer needed solutions to entrepreneurial gaps in those communities but also play a huge role in achieving part of the United Nations Sustainable Development Goals.

L-R: Bunmi Obadina, chairperson, marketing committee, Lagos Chamber of Commerce and Industry (LCCI) Trade Promotion Board; Muda Yusuf, director-general, LCCI; Gabriel Idahosa, vice president, LCCI, and Segun Alabi, head of corporate communications, LCCI, at a press conference to announce the 2020 edition of the Lagos International Trade Fair, in Lagos, yesterday.

Covid-19: LCCI incorporates virtual participation into 2020 trade fair GBEMI FAMINU

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heLagosChamberofCommerce and Industry (LCCI) has made plans to expand this year’s Lagos International Trade Fair beyond the four walls of the Tafawa Balewa Square, Lagos, where it is held annually.

The chamber is incorporating a virtual form of the event— first of its kind—to run concurrently with the physical event.

Speaking to journalists in Lagos on Tuesday, Gabriel Idahosa, chairman of the Trade Promotions Board, LCCI, said the disruption in commercial and human activities on the back of the coronavirus pandemic has created a new normal which the activities of the trade fair will align with. This includes the hosting of the first virtual international trade fair, which will have modalities similar to Zoom

meetings along with the physical event. The fair will hold from the 6th – 15th of November 2020.

“As we all know, the Covid-19 pandemic has altered almost every sphere of human activity and we are all seeking solutions to emerging problems. Therefore, the Trade Promotion Board has approved the hosting of a virtual trade fair as part of the 2020 Lagos International Trade Fair,” he said.

He said plans are at an advanced stage for the customisation of a virtual portal that will host the virtual trade fair.

He disclosed that over 1500 participants have shown interest through registration, adding that many more are still registering for the fair, including those who will travel from other countries to participate. He noted that a major advantage of the virtual programme is the unlimited number of participants.

Antwerp Port International of Belgium takes over Bakassi Deep Seaport project MIKE ABANG, Calabar

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maritime giant, Antwerp Port International of Belgium has taken over the Bakassi Deep Seaport, which is one of the legacy projects of Governor Ben Ayade of Cross River State.

This was disclosed on Tuesday by Ayade during a boat ride to the site of the deep seaport, with representatives and port director, of Antwerp Ports International, Stefan Cassimon.

Ayade said the essence of the visit was to inspect the site and survey the location’s suitability and adaptability of the port.

He said the tour would strengthen commitment to the partnership with the Port of Antwerp International and the Cross River State government to either take the investment

from public placement strategy or direct investment by investors.

The governor expressed delight that a celebrated name in the maritime Industry was involved in the Bakassi Deep Seaport project. Ayade had earlier received a Belgian ambassador, Daniel Betrand, who led the team on a courtesy call on him at Government House, Calabar.

Ambassador Bertrand on his part said the team was in Calabar to “to discuss further on the wonderful project in Bakassi and to ensure that the project will be a success as soon as possible.”

The ambassador disclosed that “Cross River is of interest to Belgium because you are close to the sea where you have so many potentials and endowed with very industrious population. So, I think that a lot is possible here for you and for us.” www.businessday.ng

More woes for Nigerian companies as FG plans tax increase for 2021 budget funding ENDURANCE OKAFOR

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lready struggling with the impact of Covid-19, Nigerian companies may be faced with more challenges as the Federal Government plans to increase tax, review tax waivers/concession to generate revenue to fund its 2021 ‘Budget of Economic Recovery and Resilience’.

With a budget deficit of N5.19 trillion, which represents 3.64 percent of Nigeria’s gross domestic product (GDP), the proposed 2021 budget with an aggregate expenditure of N13.08 trillion is expected to be funded through the estimated federal revenue of N7.886 trillion while the deficit will be financed by both domestic (N2.14trn) and foreign (N2.14trn) borrowing.

While reading the public presentation of the 20201 budget proposal on Tuesday, Zainab Ahmed, minister of finance, budget and national planning said: “In producing the Finance

…to review tax waivers Bill 2020, we are further reviewing current tax and fiscal laws and consulting widely.”

According to Ahmed, “the objective of the incremental, but necessary changes in the Finance Bill include;” supporting the realisation of the revenue projections in the 2021 budget; mitigating regressive taxation; integrating international taxation trends to domestic tax laws; supporting Micro, small and mediumsized businesses.

“I would not expect that taxes should go up, it would be a wrong fiscal policy strategy. You can increase the taxes you collect without increasing rate. You can reduce the deduction, allowances and the waiver or increase the tax base,” Taiwo Oyedele, the fiscal policy partner and West Africa tax leader, PwC said.

While presenting the proposed 2021 budget on Thursday October 8, 2020, President Muhammadu Buhari said he has directed the minister of finance

to finalise the Finance Bill 2020, which will be forwarded to the legislators for passage into law.

“The Finance Bill is to support the realisation of our 2021 revenue projections, adopt appropriate counter-cyclical fiscal policies and enhance the efficiency of fiscal incentives,” Buhari said.

According to the 2021 budget presentation document seen by BusinessDay on Tuesday, one of the ways Nigeria government plans to improve revenue, particularly to fund the proposed 2021 budget removal of tax incentive.

“We included a Tax Expenditure Statement (TES) as part of the documents accompanying the 2021 budget for the National Assembly which and it “seeks to dimension the cost of tax waivers/concession and evaluate their policy effectiveness,” the finance minister said.

As of March 31, 2020, Pioneer Status Incentive (PSI) data by the Nigerian Investment Promotion

Commission (NIPC) shows that 39 companies were still enjoying tax waiver, some of which include Lafarge Africa Plc; Obu Cement Nigeria limited; Crown Flour Mills; Olam Hatcheries Limited, Hayat Kimya Nigeria Limited among others. Meanwhile, about 125 applications were still pending.

According to Oyedele, analysis from the finance minister shows that Nigeria is currently giving away more in tax waiver than what they are collecting and “that’s something any responsible government would want to rationalise.”

But he also warned that the government should bear in mind that “this is the time companies are trying to survive so anything that’s going to be rationalised should not affect their survival.”

Meanwhile, the total revenue of the Federal Inland Revenue Service (FIRS) for the 2019 fiscal year stood at a total of N5 trillion, below the N8.8 trillion target for the year which translates to a tax to GDP ratio of 6.1 percent

BDCs urge CBN to address huge exchange rate mismatch in FX market HOPE MOSES-ASHIKE

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he Bureau De Change (BDC) operators through their association have called on the Central Bank of Nigeria (CBN) to address the huge exchange rate mismatch in the forex market.

Association of Bureaux De Change Operators of Nigeria (ABCON) made the call in its quarterly economic review report for the third quarter of the year (Q3’2020).

“It is illogical to intervene in the market at N380 when open market is moving at N460. Who takes the margin? This is an exchange rate mismatch. The solution to the problem is not throwing millstones or blackmail of any sub-sector of the market, the

…as naira stable at N458 margin ends in one market and is functional to the volume to satisfy market deficit in supply,” the association stated.

Naira on Tuesday remained stable as the dollar traded at N458. The local currency weakened by N2 against the dollar, which sold for N459 on Tuesday as against N457/$ on Monday.

At the Investors and Exporters (I&E) forex window, naira remained stable at N386.00 per dollar. Analysts at FSDH research said most participants maintained bids between N384.00 and N392.89 per dollar.

ABCON also advised the CBN to consider raising the liquidity ratio of banks to

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discourage foreign currency holding and thereby increase availability of forex especially for the purpose of increasing liquidity at the official retail segment where BDCs operate.

On the other hand, ABCON, called for increased cooperation among BDC operators so as to attract autonomous foreign exchange inflows facilitated by the reopening of the economy.

“Operators are set to make windfalls as foreign currency arrears coming from the long business lockdown are reopening. Traders through cooperation can attract huge autonomous foreign exchange volume through interplay of fine exchange rate mar@Businessdayng

gins from the liquidity in the open market,” the association stated.

The association also cautioned the CBN against pegging of the interest rates and other variable, stressing that this can lead to malfunctioning of the system.

The association instead, recommended that the monetary authority should intervene in selected priority sectors through incentives, adding that this will allow for smooth flow of the whole economy, especially when complemented with fiscal management efforts.

ABCON has cautioned against increasing the retirement age, saying it works against policies to reduce youth unemployment in the country.

Wednesday 14 October 2020

BUSINESS DAY

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Wednesday 14 October 2020

BUSINESS DAY

news Nigeria’s cancer sufferers struggle...

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of mortality if infected by

Covid-19. The first patient that died of Covid-19 in Nigeria had multiple myeloma, which is a form of cancer. There is always crowding in most of the cancer centres that we have because there are so few,” Bagudu said, speaking during the programme aimed at appraising the situation of cancer management on the African continent.

The scarcity of radiation oncology resources in Africa holds glaring evidence in not only Nigeria’s poor healthcare system, but also an increasingly worsening economy that places the cost of care at few treatment centres beyond the reach of average people.

It is not unusual to find patients abandoning their therapy because they cannot afford treatment.

While cancer treatment is free for nationals in Zambia, for instance, Nigerians are yet to feel the impact of promised government support for cancer patients.

In 2018, Nigeria’s National Cancer Control Plan was launched with a budget of $308 million to control cancer and $192 million for prevention for five years.

Osagie Ehanire, Nigeria’s minister of health, in his speech noted that N729, 861,797 was appropriated in the 2020 budget for the Catastrophic Health Fund, a provision to support the treatment of indigent Nigerians diagnosed with breast, cervical and prostate cancers.

However, these plans have remained paperwork.

The Federal Ministry of Health in the last quarter of 2020 is still promising to ensure that the fund is released within this budget cycle.

The largest African economy is outside the circle of three countries including South Africa, Egypt and Morocco, able to meet the International Atomic Energy Agency recommendation of 250 population per 1 radiotherapy machine.

Out of the 385 radiotherapy machines in sub-Saharan Africa, Egypt boasts of almost 100 while Nigerians struggle with two.

The country is yet to develop a fully-fledged cancer institute that can cater to the needs of its sick people.

“We have seven centres of

excellence. These are departments not stand-alone cancer centres. There is the national cancer institute that is being talked about. We need to have things like that so that we will be able to move the agenda forward,” Bagudu said.

According to a Lancet publication, sub-Saharan Africa will require about 5,000 radiotherapy machines by 2023, with at least 1,208 domiciled in Nigeria based on the estimate of 1 per 250 people.

The projection is that by the year 2030, cancer death would have decreased by about 30 percent in developed countries, but in developing low-income countries such as Nigeria, mortality will increase by about 70 percent.

Countries including the United States are averting millions of deaths by leveraging advances in cancer treatment and care, leaving Africa with the greatest burden of the disease.

Oncologists now use scientific innovations like immunotherapy to target cancer, stop or slow the growth of cancerous cells. Other innovations like gene therapy, radiomics, thermal ablation of tumours and many others have sprang up across the world.

According to Bagudu, the government can reach out to the manufacturing industry on how more machines can be leased on hire purchase to support more patients.

While prevention remains the most effective for achieving low-cost cancer control, efforts to provide affordable medicines should be intensified, he said.

Africa and Nigeria in particular should really benefit from investing and supporting the development of local biopharmaceutical industries, he said, noting that this approach will help the continent establish a solid biopharmaceutical and research hub while growing the needed talent pool of researchers and clinicians.

For Dina Mired, president, Union for International Cancer Control (UICC), the tools to make progress are available but political leaders must demonstrate the will to use them just like they have done to address Covid-19.

“If $1 is invested in early detection for everyone in a country, it will save the country $7 per person from treatment. The country ends up saving money,” she said.

Government gets timely reminder...

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another government from defaulting, but politics came into play until President Musa Yar’Adua approved this agreement. However, there is a limit to what can be achieved in 4 years before another government takes over.

Low budget constraint, the time taken to negotiate and seal deals is another critical factor.

“Also, customs service to finance mobile scanners across the nation to facilitate efficient

revenue collection stemming from border closures; government also announced the intention to construct railway as part of capital projects.”

Also, Lamis Dikko, chairman, Infrastructure Bank plc, said, “The assumption that people are not willing to pay for services is wrong because persons in the rural areas set aside a certain amount each morning to pay those who carry water in gallons.”

According to Dikko, if the amount that individuals www.businessday.ng

L-R: Zainab Ahmed, minister of finance, budget and national planning; Ben Akabueze, director-general, Budget Office of the Federation, and Sirika Hadi, minister of aviation, during the breaking down of the 2021 Appropriation Bill in Abuja, yesterday.

Pic by Tunde Adeniyi

Government uncertain of...

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capital markets.

“Eurobond in 2021 is on

the table and it depends on whether the international capital market would be better than the local markets to source funds,” she said in response to a question during the public presentation of details of the 2021 budget before the National Assembly in Abuja, Tuesday.

But in efforts to rev up revenue generation, the Federal Government is reviewing current tax and fiscal laws and is already consulting widely as it finalises Finance Bill 2020, which would be forwarded to the National Assembly for consideration and passage into law.

At the event, the finance minister disclosed of an incremental, but necessary, changes in the Finance Bill, which would target: supporting the realisation of the revenue projections in the 2021 budget; mitigating regressive taxation; integrating international taxation trends to domestic tax laws; better targeting of tax incentives, and supporting Micro, Small and Medium-sized businesses.

The N13.08 trillion 2021 budget, which President Buhari laid before the National Assembly last Thursday, contains an overall budget deficit of N5.196 trillion, representing 3.64% of the country’s total GDP. The deficit is to be financed mainly by borrowings, including for N2.14 trillion from domestic sources and N2.14 trillion foreign sources.

N709.69 billion Multi-lateral/ bi-lateral loan drawdowns, while N205.15 billion would be sourced from privatisation proceeds.

It would be recalled that spend in paying for water is accumulated, it will exceed the funds that would have been set aside by government for that purpose.

“Worse off, Nigeria’s capital market is not determined by the forces of the market, which affects electricity, the downstream sector and national savings irrespective of inflation and exchange rate,” said Balogun.

Inflation of 13.2 percent, exchange rate of N381 and interest rate of 2 percent on yields affect private sector, which eats into national savings.

Buhari had expressed serious concerns over government poor revenue generation, and directed that incomes of Government Owned Enterprises (GOEs) be scrutinised henceforth and limits imposed on their cost-to-revenue ratios.

But Ahmed assured that the government was already implementing several measures to overcome income constraints.

She said besides the Strategic Revenue Growth Initiative (SRGI), government was leveraging technology and automation, plugging fiscal drainers and ensuring more effective independent revenue monitoring.

Consequently, CEOs and key management staff of GOEs are now expected to sign performance contracts expected to set financial indicators and targets for each of their institutions.

The finance minister also announced that the cost-torevenue ratio of GOEs had, by presidential directive, been limited to a maximum of 6070%, while regular monitoring and reporting of revenue and expenditure performance of those Entities will be undertaken by both the budget office of the federation and the office of the Accountant Generation of the Federation.

Thesearesomeofthecritical initiativesasgovernmentretools strategies on revenues, which have plunged significantly this year on account of Covid-19 pandemic and low oil prices.

According to Ahmed, the current sub-optimal revenue performance of most GOEs would be addressed through effective implementation of the enhanced Performance Management Framework.

“Capital optimisation cannot be taken in isolation of the pricing model, for which the people should be able to set their prices.”

Balogun cites an illustration of when telecommunication services set their prices low to attract and grow their market while steadily providing services having invested over $2 billion consistently on annual basis for 19 years, unlike the case of Nigeria.

“Markets have an incredible way of regulating itself through the forces of competition, providing opportunities for even greater investment

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She expressed optimism that the Finance Bill 2020 would improve the revenue profile of the country as revenue generation, which has become a big threat to the funding of the 2021 budget.

She said bill, which would accompany the 2021 budget proposal, would contain measures to advance the Sustainable Revenue Generation Initiative (SRGI), and hinted plans to work closely with the National Assembly to amend relevant laws that would drive smooth implementation of the revenue initiative.

The minister further stated that the Executive had included a Tax expenditure Statements (TES) as part of documents sent alongside the 2021 budget to the National Assembly. The TES seeks to dimension the cost of tax waivers/concessions.

Tax expenditures are currently estimated at: Company Income Tax, N1.18trn; VAT, N3.1trn; Customs Duties N347bn; VAT on Imports, N64bn.

“Going forward, we will set annual ceilings on Tax Expenditures to better manage their impact on already constrained government revenues,’ Ahmed said.

“Achieving fiscal sustainability and macro-fiscal objectives of government will require bold,decisiveandurgentaction.

Government is determined to act as may be required.

“Thus, key reforms will be implemented with increased vigour to improve revenue collection and expenditure management. Government will however remain mindful of the need to provide safety nets to cushion the impact of any reform measures on the vulnerable segments of the population,” she said.

On the 2020 budget per-

formance, the minister explained that relative to the revised 2020 budget parameters, H1 performance numbers are all positive, while H2 performance was generally expected to be worse than H1.

She disclosed that at the end of August 2020, N761.79bn had been released for capital expenditure, thus rising to N1.2trn by end of September 2020.

In his opening remarks, director-general, Budget Office, Ben Akabueze, said the budget process had been opened up for transparency not just within government circle.

He pointed out that the 2021 was not about whose agency got what, but who is generating what and how they could improve the revenue profile of government.

The 2021 Appropriation Bill is 21 percent (N2.27trn) higher than the N10.81 trillion revised budget for 2020.

Tagged ‘Budget of Economic Recovery and Resilience,’ the 2021 budget is expected to accelerate the pace of economic recovery, promote economic diversification, enhance competitiveness and ensures social inclusion.

Components of the 2021 proposed budget include: a non-debt recurrent expenditure of N5.65 trillion, compared to N5.82 trillion approved for 2020; and N3.85 trillion for capital expenditure, as against N2.69 trillion (capex) allocated for the current fiscal year.

The 2021 budget is based on crude oil benchmark price of $40 per barrel (pb), compared to $28pb in the amended Appropriation Act 2020.

Oil production for next year is estimated at 1.86 million barrels (mbpd) of oil per day, as against the revised estimate of 1.80mbpd for 2020.

and returns,” said Balogun.

The minister emphasised that the federal roads although important were not nearly as essential as the state and local government roads that people use every day.

Frank Aigbogun, publisher, BusinessDay Newspaper, highlighted that the $33 billion held in treasury and government bonds was enough capital to start with, particularly if access was improved and market-based prices were encouraged.

The World Bank’s 2020 edition for the Ease of Doing Business Report notes Nigeria

as one of the top 10 improvers as it moved to being ranked 131st worldwide from 2019’s 146th rank.

This reflects that despite the difficulties, the country has improved in many aspects including starting a business, dealing with construction permits, accessing electricity, registering property, trading across borders, and enforcing contracts.

This is mainly due to strong inflows from giant American companies like Uber, and Facebook, as well as Emergent Payments, and Meltwater Group.

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Wednesday 14 October 2020

BUSINESS DAY

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NEWS

IMF says Nigeria’s economy to contract by 4.3% in 2020, grow by 1.7 in 2021

Dangote, others to enjoy 50% tax rebate for constructing 780.15km roads - Osinbajo TONY AILEMEN, ABUJA

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irms partnering with the Federal government to build roads under Public Private Partnership’s (PPP) arrangements are to enjoy 50 percent tax rebate as part of the 2017 Road Trust Fund (RTF).

The fund is a tax credit scheme to incentivize private sector participation, which was reinforced in the Executive Order No. 007 of 2019, the Companies Income Tax (Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme).

Vice President Yemi Osinbajo who disclosed this on Tuesday, stated that the costeffective measures, embarked upon by the Buhari administration is now delivering 19 road projects across the six geopolitical zones in the country totaling 780.15 km.

Dangote Industries Limited, the Nigerian Liquefied Natural Gas Limited, and others are currently undertaking the construction of the roads which are in advanced stages of completion The reconstruction of Apapa-Oshodi-Oworonshoki-Ojota Road in Lagos State (34 km) and the Obajana-Kabba Road in Kogi State (43km) are being undertaken by Dangote Industries Limited, while the construction of 38km Bodo-Bonny Road and Bridges across Opobo Channel in Rivers State, is being handled by the Nigerian

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Liquefied Natural Gas Limited.

The Vice President, speaking at a webinar on Public-Private Partnerships, organized by the Law firm of Yusuf O. Ali & Co in collaboration with the Business Law Department of the Faculty of Law, University of Ilorin, said the government had in 2017, introduced the Road Trust Fund (RTF).

“The fund is a tax credit scheme to incentivize private sector participation in the development of federal road infrastructure. The relief is enjoyed by a deduction of 50 percent of the amount spent on the project from the income tax that would have been payable by the company.”

The VP also referred to the Executive Order No. 007 of 2019, the Companies Income Tax (Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme), adding that the “ objective of the Scheme is to accelerate public road infrastructure development by incentivizing private sector entities to construct and refurbish eligible roads across the country in exchange for tax credits, which could then be applied against company income tax payable,” he stated.

“Nineteen roads have been approved so far by Mr. President under the Scheme, totaling, 780.15 km. These roads, in eleven (11) States across the six geo-political zones, are being executed by six (6) private sector players in the manufacturing and construction industries.”

Emphasising the importance of PPPs in funding critical infrastructure projects, the Vice President said “there can hardly be a better time to explore the use of PPPs especially in the delivery of public infrastructure.”

HOPE MOSES-ASHIKE

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igeria’s economy is expected to contract by 4.3 percent in 2020 from 2.2 percent in 2019 and later recover with a growth rate of 1.7 percent in 2021 according to the International Monetary Fund (IMF).

The IMF on Tuesday released its World Economic Outlook (WEO), which also projects 13.7 percent inflation rate for Nigeria in 2020 and 11.6 percent in 2021.

Olalekan Aworinde, public sector economic lecturer, Babcock University, said the contraction as projected by IMF is as a result of Covid-19 pandemic, which has stalled economic activities.

He also pointed out infrastructural deficit as another factor that inhibits growth. Aworinde said on phone that institutional framework that ought to regulate economic activities are lacking and that also hinder growth.

“Corruption will continue to

…projects 13.7% inflation in 2020, 11.6 in 2021 hamper growth,” he said.

On the positive growth expected by 2021, he said it could be that the institutional framework is going to be in place and also some of the government spending may propel growth.

Aworinde also mentioned the 2021 budget released by the Federal Government few days ago and the Nigeria’s Central Bank’s plan to give out loan as part of growth drivers in 2021 as projected by IMF. Global growth is projected at −4.4 percent in 2020, a less severe contraction than forecast in the June 2020 World Economic Outlook (WEO) Update. The revision reflects better than anticipated second quarter GDP outturns, mostly in advanced economies, where activity began to improve sooner than expected after lockdowns were scaled back in May and June, as well as indicators of a stronger recovery in the third quarter.

Global growth is projected at 5.2 percent in 2021, a little lower

than in the June 2020 WEO Update, reflecting the more moderate downturn projected for 2020 and consistent with expectations of persistent social distancing.

Following the contraction in 2020 and recovery in 2021, the level of global GDP in 2021 is expected to be a modest 0.6 percent above that of 2019. The growth projections imply wide negative output gaps and elevated unemployment rates this year and in 2021 across both advanced and emerging market economies.

Regional differences remain stark, with many countries in Latin America severely affected by the pandemic facing very deep downturns, and large output declines expected for many countries in the Middle East and Central Asia region and oil-exporting countries in sub-Saharan Africa affected by low oil prices, civil strife, or economic crises.

Growth for emerging market and developing economies excluding China is projected at –5.7 percent for 2020 and 5 percent

for 2021. The projected rebound in 2021 is not sufficient to regain the 2019 level of activity by next year. Growth among low-income developing countries is projected at –1.2 percent in 2020, strengthening to 4.9 percent in 2021.

Higher population growth and low starting levels of income imply that even this more modest contraction compared with most emerging market economies will take a very heavy toll on living standards, especially for the poor.

The global economy is climbing out from the depths to which it had plummeted during the Great Lockdown in April. But with the Covid-19 pandemic continuing to spread, many countries have slowed reopening and some are reinstating partial lockdowns to protect susceptible populations. While recovery in China has been faster than expected, the global economy’s long ascent back to pre-pandemic levels of activity remains prone to setbacks.

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L-R: Denrick Moos, chief executive officer, Lekki FreePort Terminal; Biodun Dabiri, board chairman, Lekki Port LFTZ Enterprise Limited (LPLEL); Ademola Adeniran, port authority engineer, Nigerian Port Authority (NPA); Du Ruogang, chief executive officer, LPLEL, and Steven Heukelom, chief technical officer, LPLEL, during commencement of the construction of the Quay Wall of the Lekki Deep Sea Port at the project site in Ibeju Lekki, yesterday.

Nigeria pushes for cost consideration in amendment to IFRS HOPE MOSES-ASHIKE

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igeria’s International Financial Reporting Standard Experts Forum (IFRSEF) has called on the International Accounting Standard Board (IASB) to consider costs and other peculiarproblemsofemergingmarkets in its current effort to amending primary financial statements.

IASB is responsible for issuing the International Financial Reporting Standard (IFRS), which Nigeria and some other emerging markets have adopted. Recently, IASB issued an Exposure Draft on primary financial statements inviting comments from the public to enable it amend the statements. Primary financial statements are statement of profit or loss and statement of financial positions and their notes.

The amendment if effected will mean that the way companies in Nigeria present their in-

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come statement and statement of financial position will change.

Companies are likely to incur heavy cost to implement the new changes. Such costs may include training cost for accountants and audit staff and investment to update accounting system to be able to generate financial statements that comply with the amendment.

The call for comment on the exposure draft ended on 30th September, 2020 and organisations that submitted comments to IASB include Accountancy Europe, America Accounting Association, Japanese Bankers Association, IATA Industry Accounting Working Group, Saudi Organisation for Certified Public Accountants, New Zealand Accounting Standards Board, CPA Australia, European Securities and Markets Authority (ESMA), Accounting Standards Board of Japan (ASBJ), New York State Society of Certified Public

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Accountants, The Institute of Chartered Accountants of India, The Swedish Financial Reporting Board, Korea Accounting Standards Board, Johannesburg Stock Exchange (JSE), South African Institute of Professional Accountants, Financial Reporting Council, UK, among others.

A copy of IFRSEF response made available to newsmen shows that IFRSEF has approached its response from cost benefit analysis taking into consideration the peculiar circumstances of Nigeria and emerging markets in general.

Specifically, where IASB asked for other comments, IFRSEF advised as follows: “We wish to draw attention to ambiguity, complexity and lack of clear definition of certain proposals, especially main business activity. We are also concerned with requirement for additional disclosures that do not contain new information and are not @Businessdayng

useful information to providers of financial capital. The effects of ambiguity and additional disclosures that are not useful are increased implementation costs especially in emerging markets.”

On where IASB wanted to introduce disclosure of management performance information, IFRSEF has this to say: “We do not agree that information about management performance measures as defined by the Board should be included in the notes to the financial statements?” It then proceeded to give reason for the disagreement as follows: “These figures are already available within financial statements and can be assembled by analysts and users of financial statement. A requirement to disclose this in the notes to the financial statements is expanding IFRS financial statement which to preparers amounts to extra cost to produce information that does not increase the usefulness of financial information.

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BUSINESS DAY

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A2 BUSINESS DAY

Wednesday 14 October 2020

NEWS

#ENDSARS: Government kick-starts process of reform in Nigeria Police ...as Sanwo-Olu sets up N200m trust fund for victims ...Reps to include compensation fund in 2021 budget way was blocked, resulting in FRANK ELEANYA, DESMOND OKON, Lagos; ANTHONY AILEMEN & JAMES KWEN, Abuja heavy traffic build-up as the during a plenary, yesterday, protesters made their way to he Federal Govern- that it would appropriate funds Government House, Alausa, ment has kicked- for the compensation of the to hand over their protest letstarted the process of victims of the #EndSARS pro- ter to Governor Sanwo-Olu for onward delivery to President carrying out reforms in tests in the 2021 budget.

Femi Gbajiabiamila, speak- Muhammadu Buhari, in Abuja. the Nigeria Police Force (NPF), In Port Harcourt, the Rivers as the Inspector General of er of the House, said the action Police, Mohammed Adamu, would be in line with the Reps’ State capital, EndSARS protestat a stakeholders’ meeting in resolve to ensure that the lives ers were in a daring mood folAbuja on Tuesday, ordered a of those reportedly killed dur- lowing a directive by the state halt in the use of arms against ing the protests in different governor, Nyesom Wike that no protesters by the police going parts of the country did not go protest should hold within the capital city. His directive was in vain. forward.

“We should get the list of ignored as thousands of young This development is coming after protests spread in those that lost their lives so people including mothers major cities across the country that during this budget process, took over major streets in Port on Tuesday, including Port we’ll be able to appropriate for Harcourt, calling for an end to Harcourt, Ibadan, Kaduna, their full compensation,” the police brutality.

Oyo State governor, Seye speaker said.

Abuja, and Lagos.

In Lagos, the state gov- Makinde, however, took a difPresidential Muhammadu Buhari had following the dis- ernor, Babajide Sanwo-Olu ferent tactic by directing the solution of the Federal Special has promised the creation of police to stay away from proAnti-Robbery Squad (FSARS) a N200 million Trust Fund testers and asking soldiers ordered an immediate re- directed at the victims of SARS to rather ensure that no lives sponse to the yearnings of brutality. The fund, according and properties were lost to the Nigerian youths who continue to Sanwo-Olu, would go to the protest.

In Kaduna, while hundreds to protest against brutality by families of victims of SARS. This was, however, as the of young people protested, the operatives of the FSARS, across protest continued in some acting commander, Kaduna the country.

As part of the response to parts of Lagos, yesterday. For State Vigilance Service and his the movement, the House of example, the Alausa/Ikeja axis team with the police and civil Representatives also assured of the Lagos-Ibadan Express- defence were present to ensure

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the protest was peaceful.

After the stakeholders’ meeting on the implementation of the recommendations of the Presidential Panel on the Reform of the Special Anti-Robbery Squad (SARS), in Abuja, the Ministry of Police Affairs and Police Service Commission affirmed the fivepoint demand of the protesters and the ENDSARS movement were genuine and would be addressed by the President Buhari’s administration.

Resolutions reached at the forum include the setting up of an independent investigation panel to look into the violations of human rights by the defunct SARS and other segments of the police. The independent panel would be set up by the National Human Rights Commission within a week.

It also agreed that a call for memoranda from members of the public whose rights have been violated by the defunct SARS and other segments of the police will be released by the commission within one week.

World Food Day: Lagos wants secondary students to go into agriculture INIOBONG IWOK

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agos State acting commissioner for agriculture, Abisola Olusanya has urged secondary school students in the state to go into a more productive agricultural labour force as adults.

Olusanya made the call on Tuesday at the School Quiz Competition organised by her ministry as part of activities marking the Y2020 World Food Day celebration in Lagos State.

She said this has become imperative in order to solve the problem of unemployment, vacuums being created by the ageing farmers as well as mitigate the possible effects of global food crisis.

The acting commissioner noted that the importance of the agricultural quiz competition cannot be overemphasised as it aims to further stimulate the interest of students in agriculture as a subject.

“I am sure that all the students here are aware of the huge potentials that exist in Nigeria’s agricultural sector and the strategic position

Senate confirms 8 Supreme Court justices KAMARUDEEN OGUNDELE, Abuja

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he Senate on Tuesday confirmed eight new justices for the Supreme Court.

They are Justices Lawal Garba, North West; Helen Ogunwumiju, South West; Abdu Aboki, North West; I. M. M. Saulawa, North West; Adamu Jauro, North East ; Samuel Oseji, South South; Tijjani Abubakar, North East; and Emmanuel A . Agim, South South.

The confirmation followed the submission of screening report by the chairman of the committee on judiciary, human rights and legal matters, Opeyemi Bamidele after Seyi Makinde (2nd r), governor, Oyo State; Debo Ogundoyin (2nd l), speaker, Oyo State House of Assembly; Hosea Ayoola (l), chairman, State Advisory Committee, and Toyin Ajamu, secretary to Soun of Ogbomoso, during a visit to Soun Palace over the attack on the palace by #ENDSARS protesters in Ogbomoso.

INTELS pledges readiness to dialogue with NPA AMAKA ANAGOR-EWUZIE

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NTELS Nigeria Limited, Nigeria’s oil and gas logistics giant has pledged readiness to enter into a constructive dialogue with the Nigerian Ports Authority (NPA) in order to reduce the indebtedness accrued up to now.

INTELS, which stated in a statement published on national dailies on Tuesday, said the attacks do not reflect the truth about its operations, and with the support of the banking system, it would be necessary to re-establish a climate of serenity and dialogue with the Authority, which has been interrupted.

The company, which stated that it has endured series of

political attacks in recent times, said it has a long history with the Nigerian Ports Authority (NPA), which began in 1982 and has substantially contributed to the increase in government revenue.

“INTELS has made a significant contribution to capitalising the NPA by establishing an agreed mechanism for debt repayment through part of the proceeds from pilotage. It should be remembered that a substantial part of the proceeds of the pilotage activity, managed by INTELS in its role as agent, then flow into the NPA coffers via the accounts indicated by the NPA, according to a mutually supportive mechanism tested and hitherto working smoothly,” it stated.

The company further said it www.businessday.ng

has by itself and in conjunction with its affiliates, built and developed over 7km of equipped docks in different Nigerian ports, including Onne, Calabar, Warri and Lagos, more than 6 million square metres of industrial facilities and over 2,000 housing units.

“Through its substantial investments over the years, INTELS has played an indispensable role in facilitating and enhancing the operational activities of major oil companies in Nigeria, providing them with invaluable services and facilities based on efficiency and productivity,” says the management in the publication.

Listing the advantages of its investment in Nigeria, the company said in the develop-

ment of its business, it has always favoured extensive use of local suppliers and manpower, thus contributing to the country’s economic well-being as well as the local economy.

“INTELS activities have created employment for over 10,000 personnel, including direct and indirect employees of third parties, utilising less than 100 expatriate staff members. It periodically allocates resources to support widespread community projects by initiating the development of new entrepreneurial initiatives, promoting sports activities aimed at young people and implementing structural assistance, including nonroutine maintenance where required,” the management further stated.

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of the various stakeholders within the various agricultural value chains.

“Thus, the ministry of agriculture, through programmes such as this, intends to encourage the students to grow into a more productive agricultural labour force as adults thereby solving, to a reasonable extent, the problem of unemployment and vacuums being created by the ageing farmers, as well as, mitigating the possible effects of global food crisis.

“The importance of this agricultural quiz competition cannot therefore be overemphasised as it aims to further stimulate the interest of students in agriculture by assisting them to recall and imbibe information on various aspects such as improved agricultural techniques and innovations,” Olusanya explained.

The schools’ quiz competition was won by Ansarudeen Senior High School, Surulere while Ajara Senior Grammar School, Badagry came second and Abibat Mogaji Millennium Secondary School, Dopemu came third.

consideration by the senate committee of whole.

President Muhammadu Buhari had written the senate for the confirmation of the justices of the Court of Appeal for elevation to the Supreme Court.

The senate president, Ahmed Lawan, congratulated the nominees and asked them to sustain their good public record.

He also advocated better funding for the judiciary in order to be able to discharge their responsibilities very well.

“It is the duty of the government including to provide improved funding for the judiciary,” Lawan said.

Delta budgets N378bn for 2021 FRANCIS SADHERE & MERCY ENOCH, Asaba

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he Delta State government, on Tuesday, approved a draft estimate of N378 billion as budget for 2021 which would be presented to the state House of Assembly next week for approval.

This was part of resolutions reached at the state executive council meeting presided over by Governor Ifeanyi Okowa.

Briefing journalists after the meeting, the commissioner for information, Charles Aniagwu said N174 billion was earmarked as recurrent expenditure while N203 billion would be channelled into critical infrastructure, emphasising that the budget would be used to advance the ‘Stronger Delta Vision’ of the state government.

“The first very important @Businessdayng

decision that was reached at today’s exco is the approval of the draft estimate of 2021 budget of the state. A budget of N372 billion was presented by the economic planning ministry for consideration at the state council.

“After some adjustments here and there and the need for us to also tackle certain critical infrastructure in the state, the budget was taken up to N378 billion. So, that is what is going to be presented to the state House of Assembly.

“Good enough, in that budget, we have about N174 billion and some fractions that will be deployed to recurrent expenditure and the remaining N203 billion and some fractions will be deployed to address critical infrastructure in the state and this infrastructure is aimed at strengthening the ‘Stronger Delta Agenda’ of the administration.

Wednesday 14 October 2020

BUSINESS DAY

NEWS Debt crisis in Africa validates Nigeria’s apathy towards Eurobond market BALA AUGIE

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looming debt crisis in Africa has validated the Federal Government’s apathy towards the Eurobond market as the country is looking for alternative ways to raise funds in the face of an impending recession.

Vice President Yemi Osibanjo said the commercial borrowings are expensive and it is prudent to avoid them.

“We are not likely going to explore the Eurobond market because we are trying to avoid commercial borrowing,” said Osibanjo.

The country has $11.20 billion Eurobond outstanding with a yield of 6.60 percent, and the World Bank has delayed $1.50 billion facility on the grounds that policy makers have refused to adopt a unified foreign exchange rate.

However, a fixed income analyst who doesn’t want his name mentioned is of the view that Nigeria and other Africa countries will continue to tap the Eurobond market because they have not yet

developed their own domestic market to a point that they can borrow deeply.

“The United States government is running a budget deficit, but it still borrows deeply. Nigeria will issue next year,” said the analyst.

Commercial borrowings have become a burden on African countries which are on the verge of a record default of Eurobond repayment, which investors fret could trigger debt crisis.

The ten largest African countries by gross domestic product have a combined outstanding Eurobonds of $99.30 billion, according to data compiled by United Capital Limited.

Though governments across the continent have been borrowing with abandon for capital projects, their problem stems from falling commodity prices and an exodus of capital triggered by the coronavirus pandemic.

Zambia had asked for a six-month interest-payment holiday to give it the leeway for debt restructuring aside from mounting obligations to bondholders. The South Af-

rican nation is owing China, and government debt stood at $11.1 billion (88% of GDP) in 2019, according to Fitch Ratings.

The fall in global commodities crash and Covid-19 crisis have exposed these countries to spiralling debt service cost, which is inimical to commercial creditors.

Zambian debt burden is set to reach 110 percent of gross domestic product this year, according to Moody’s investor service Limited.

Chad has asked the world’s largest commodities trader, Glencore Plc, and other private creditors to delay debt payments under a global push for debt.

Kenya said it’s at risk of debt distress as external borrowing costs rise faster than foreign revenue.

“Even though Angola has negotiated $6.0bn in debt relief with some of its lenders and promised to fulfil its debt obligations, the country remains at a high risk of default on its five outstanding Eurobonds, especially if crude oil prices fall further,” said analysts at United Capital Limited.

Explainer

What revival of Libya’s largest oil field means for Nigeria, OPEC DIPO OLADEHINDE

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or Nigeria and some other Organisation of Petroleum Exporting Countries’ (OPEC) members, the quest to defend battered oil prices faces another major test after Libya has restarted production at its largest field, Sharara.

The news of increasing supply ser ves as a fatal blow to the benchmark of Nigeria’s crude oil, which has more than doubled to around $42.45 a barrel since May, but still down 36 percent this year.

Libya is currently producing about 300,000bpd and Sharara could add up to 200,000bpd more after the lifting of an oil port blockade by the eastern-affiliated Libyan National Army.

From below 100,000bpd, oil output reached close to 300,000bpd in a matter of two weeks. And plans are to continue ramping up as the governor of Libya’s central bank has called on the industr y to raise oil production to 1.7 million bpd, which would be more than the country produced before the oil port blockade – 1.2 million bpd.

The National Oil Corporation, which has been saying for months the blockade is costing Libya billions in lost oil revenues, earlier this month reported it had booked in July the smallest

monthly revenue this year.

At $38.2 million, the July figure was down from $2.1 billion a year earlier.

Headwind for OPEC Libya is an OPEC+ member and home to Africa’s largest crude reserves. But it is exempted from the group’s supply cuts initiated in May as the coronavirus pandemic stifled economies and caused oil prices to fall.

The alliance, led by Saudi Arabia and Russia, planned to ease the curbs by 2 million barrels a day from the start of 2021.

The news from Libya’s Sharara will be a huge concern for OPEC and its allies who now face a dilemma on either to include or exclude Libya, which was previously exempted from production cuts because of its internal turmoil that affected oil production.

“The Libyan oil restart is gaining momentum faster than most people expected,” said Bill FarrenPrice, a director at energy analysis firm Enverus. The likelihood of more Libyan exports is “an additional headwind for OPEC at a time when it is already grappling with softer than expected demand as the second wave of Covid-19 intensifies.”

JPMorgan Chase & Co. forecasts that production will rise to 1 million barrels www.businessday.ng

daily by March 2021.

The producers’ group will meet again in December 1 to discuss whether to continue the supply reductions or further increase in the first half of 2020.

OPEC pumps about a third of the world’s crude and the biggest of its 15 members is Saudi Arabia, one of America’s closest friends in the Middle East.

While the group does not target a specific oil price, it adds or removes supplies in the market and therefore can affect the cost of crude.

Nigeria’s concern Africa’s biggest oil-producing country needs the oil price to rise and in the worst case, remain steady at any price above the $40 benchmark of the 2021 budget.

To a c h i e v e t h i s , t h e country needs to avoid disruptions in crude production and also hope that the alliance under OPEC achieves its objective, even though many are yet to comply with the output cut, including Nigeria.

Nigeria depends on oil sales for about 60 percent of its revenue and 90 percent of its foreign exchange earnings, though it only accounts for less than 10 percent of GDP, according to the International Monetary Fund (IMF). https://www.facebook.com/businessdayng

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BUSINESS DAY

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BUSINESS DAY

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Live @ The Exchanges Market Statistics as at Tuesday 13 October 2020

Top Gainers/Losers as at Tuesday 13 October 2020 LOSERS

GAINERS Company

Opening

Closing

Change

Company

Opening

Closing

Change

ASI (Points)

STANBIC

N42.5

N44

1.5

GUARANTY

N30.3

N29.55

-0.75

DEALS (Numbers)

NB

N48.6

N49.1

0.5

CUSTODIAN

N5.25

N5

-0.25

INTBREW

N4.29

N4.7

0.41

ETRANZACT

N2.35

N2.12

-0.23

VOLUME (Numbers)

ETERNA

N3.99

N4.38

0.39

AFRIPRUD

N5.6

N5.39

-0.21

VALUE (N billion)

CADBURY

N7.15

N7.25

0.1

N6.8

N6.6

-0.2

MARKET CAP (N Trn)

UBA

28,344.04 4,498.00 535,831,943.00 5.019 14.814

Stocks gain in choppy trade Iheanyi Nwachukwu

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i g e r i a’s stock market closed positive on Tuesday October 13, reversing previous day’s loss, thanks to equities like Stanbic IBTC Holdings Plc and Nigeria Breweries Plc and others that helped drive the N3billion gain.

Investors showed interest in Stanbic IBTC Holdings stocks which pushed the price higher, from N42.5 to N44, up by N1.5 or 3.53 percent.

Also, increased bet on Nigerian Breweries Plc helped push the price from N48.6 to N49.1, up by 50kobo or 1.03 percent.

Other gainers include International Breweries Plc which advanced from N4.29 to N4.7, up by 41kobo or 9.56percent; Eterna Plc which rose from N3.99 to N4.38, adding 39kobo or 9.77 percent while Cadbury moved from N7.15 to N7.25, adding 10kobo or 1.40 percent.

The +0.02 percent increase in the NSE All Share Index ASI pushed slightly higher the year-to-date (YtD) positive return +5.60

percent.

The Nigerian Stock Exchange (NSE) All Share Index (ASI) moved from day open low of 28,337.49 points to 28,344.04 points at the close of trading session on Tuesday, while market capitalisation increased from N14.811trillion to N14.814trillion, up by

N3billion.

In 4,498 deals, investors exchanged 535,831,943 units valued at N5.019billion. GTBank Plc, UBA Plc, FBN Holdings Plc and Transcorp Plc were actively traded stocks on the Bourse.

Equity analysts at Lagos-based Vetiva Securities

had noted that with a number of investors still taking advantage of the recent bullish drive, coupled with the reduction of aggressive funds into the equities market, they expect some more price corrections in the next few sessions, “though the possibility of bargain hunting cannot be overruled.”

senior unsecured notes and the National Long- and Short-Term Ratings on the N150 billion structured note programme for senior unsecured debt are in line with the Bank’s issuer ratings,” Fitch said.

Stanbic IBTC Holdings PLC is a subsidiary of the Standard Bank Group. Its principal operating entity is Stanbic IBTC Bank, a mid-tier commercial bank, which represented 96 per cent of the holding company’s consolidated assets at the end of 2019.

Both entities are highly integrated with Standard Bank Group’s risk-man-

agement framework with access to Standard Bank Group’s competitive advantages relative to peers. This also includes connectivity to its network and the ability to serve large domestic and multinational companies.

The ‘AAA (nga)’ is given to issuers with the lowest expectation of default risk when compared with their competitors. The National Short-Term Rating of ‘F1+(nga)’ is assigned to issuers that have the strongest capacity for timely payment of financial commitments in comparison to other issuers in Nigeria.

Stanbic IBTC retains Fitch’s AAA rating Iheanyi Nwachukwu

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lobally renowned credit rating agency, Fitch Ratings has reaffirmed that Stanbic IBTC Holdings Plc and its subsidiary, Stanbic IBTC Bank have retained their National Long-Term’ AAA (nga)’ and National ShortTerm’ F1+(nga)’ ratings.

Fitch Ratings is a leading provider of credit ratings, commentary and research for global markets. The National Long-Term’ AAA (nga)’ and National ShortTerm’ F1+(nga)’ Ratings are

the highest possible ratings on Fitch’s rating scale.

Stanbic IBTC Holdings Plc and Stanbic IBTC Bank were rated high based on the potential support from their parent company, Standard Bank Group, which is based in South Africa.

According to Fitch Ratings, both organisations retained their ratings as a result of the vital role they play in Standard Bank Group’s primary operations in West Africa as well as its size and high operational integration.

“The National LongTerm Ratings on Stanbic IBTC Bank’s N30 billion www.businessday.ng

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Global market indicators FTSE 100 Index 5,969.71GBP -31.67-0.53% S&P 500 Index 3,510.86USD -23.36-0.66% Generic 1st ‘DM’ Future 28,603.00USD -195.00-0.68%

Nikkei 225 23,601.78JPY +43.09+0.18% Deutsche Boerse AG German Stock Index DAX 13,018.99EUR -119.42-0.91% Shanghai Stock Exchange Composite Index 3,359.75CNY +1.29+0.04%

Stockbrokers to set blueprint for economic revival

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n pursuit of their roles as economic engineers and agents of wealth creation, stockbrokers in Nigeria are warming up to prepare a roadmap on how the Federal Government can leverage the capital market to put Nigeria’s dwindling economy on sound footing.

By this strategic move, stockbrokers shall on Wednesday, November 4 and Thursday, November 5, 2020, converge for the 2020 Annual Conference of Stockbrokers on both physical and virtual mode to articulate options for the nation’s economic revival with the Theme: “Navigating through the Storms-Reenergizing the Economy through the Capital Market”.

The Conference, coming at a period when the Nigeria’s Vice President, Professor Yemi Osinbajo says that government is seeking alternative avenues for money, will attract indigenous and foreign finance and investment experts, top level government functionaries, capital market regulators, investors and other members of the capital market ecosystem.

“The significance of this year’s Theme, is better appreciated against the backdrop of the current situation whereby the Federal Government is in dire need of fund to finance the economy. The key messages to the government and companies in Nigeria are that of hope and renewal by taking advantage of opportunities to source long term fund through the capital market.

“The Federal Government should access medium and long term fund from the market to finance budget deficit and build infrastructure among others. Companies should also explore the market to shore up working capital, invest in Information and Communication Technology (ICT) grow business, enhance profitability and boost return on investment (ROI).”, says Olatunde Amolegbe, the President, CIS. Corroborating him, the Institute’s Registrar and Chief Executive, Adedeji

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Ajadi noted that Covid-19 pandemic had necessitated the need for comprehensive turnaround of Nigeria’s economy.

“We are sending a poser to the government: With the challenges of Covid, a looming recession and other economic issues in Nigeria, how do we turn our economy around? We are suggesting that, if wellexplored, the capital market can be a major catalyst to drive the desired growth, and take us through the ‘storm’,” says Ajadi.

Some of the issues that will dominate discussion of seasoned experts from diverse professional background include : Alternative Investments: How to Invest when Traditional Options Taper;?The Nigerian Stock Exchange Demutualization: Demystifying the Big Picture; Infrastructure and Deficit Funding: Bridging the Gap via the Nigerian Capital Market and Rebirth of CAMA: Implications for Capital Market Ecosystem.

Federal and State Governments had several times raised capital through the market to fund development projects. Recently, the Federal Government raised N200 billion through its Sukuk 1 and 11 to fund over 26 roads across the six geopolitical zones in the country.

Nigeria, the largest country in Africa by population, is battling with myriad of economic challenges. Its ability to realize optimal economic potentials is constrained by structural issues, including inadequate infrastructure, limited foreign exchange capacity, trade barriers, growing unemployment, investor apathy, spiraling inflation and other macroeconomic vagaries.

Government’s penchant for borrowing to finance budget deficit has consistently drawn the ire of economic experts who often express concerns on the implications of debt burden on the nation’s monetary policy.

The high profile Annual Conference is a platform for engaging discussion of issues to move the economy and market forward.

Wednesday 14 October 2020

BUSINESS DAY

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Live @ The STOCK Exchanges Prices for Securities Traded as of Tuesday 13 October 2020 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 280,807.28 7.90 -0.63 197 7,926,808 UNITED BANK FOR AFRICA PLC 225,716.18 6.60 -2.94 356 32,953,112 ZENITH BANK PLC 627,929.88 20.00 0.25 469 14,829,898 1,022 55,709,818 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 224,345.58 6.25 0.81 295 15,424,779 295 15,424,779 1,317 71,134,597 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,849,631.83 140.00 - 154 1,082,700 154 1,082,700 154 1,082,700 BUILDING MATERIALS DANGOTE CEMENT PLC 2,556,076.11 150.00 - 99 448,721 LAFARGE AFRICA PLC. 273,832.52 17.00 -0.59 154 4,880,865 253 5,329,586 253 5,329,586 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 247,146.72 420.00 - 16 1,609 16 1,609 16 1,609 1,740 77,548,492 REAL ESTATE INVESTMENT TRUSTS (REITS) SFS REAL ESTATE INVESTMENT TRUST 1,386.00 69.30 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,163.30 40.65 - 2 1,070 UPDC REAL ESTATE INVESTMENT TRUST 10,139.42 3.80 - 4 40,101 6 41,171 6 41,171 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 3 100 VALUEALLIANCE VALUE FUND 3,692.74 115.05 - 0 0 3 100 3 100 9 41,271 CROP PRODUCTION FTN COCOA PROCESSORS PLC 572.00 0.26 - 0 0 OKOMU OIL PALM PLC. 76,312.80 80.00 - 24 16,448 PRESCO PLC 60,500.00 60.50 - 22 26,850 46 43,298 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,500.00 4.25 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,860.00 0.62 -1.59 24 1,602,470 24 1,602,470 70 1,645,768 DIVERSIFIED INDUSTRIES JOHN HOLT PLC. 217.92 0.56 - 0 0 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 25,608.23 0.63 -3.08 68 15,355,631 U A C N PLC. 19,880.95 6.90 - 51 1,450,294 119 16,805,925 119 16,805,925 BUILDING CONSTRUCTION ARBICO PLC. 152.96 1.03 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 26,611.20 16.80 - 39 463,940 ROADS NIG PLC. 165.00 6.60 - 0 0 39 463,940 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 15,033.58 0.81 -1.22 19 863,851 19 863,851 58 1,327,791 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 6,968.25 0.89 - 8 107,775 GOLDEN GUINEA BREW. PLC. 829.98 0.81 - 0 0 GUINNESS NIG PLC 32,855.74 15.00 - 101 2,491,915 INTERNATIONAL BREWERIES PLC. 126,251.72 4.70 9.56 28 469,729 NIGERIAN BREW. PLC. 392,647.89 49.10 1.03 66 3,219,081 203 6,288,500 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 163,982.86 13.50 - 94 814,479 FLOUR MILLS NIG. PLC. 86,107.97 21.00 - 53 516,548 HONEYWELL FLOUR MILL PLC 7,612.99 0.96 4.35 27 689,891 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 828.63 4.65 - 3 100,100 NASCON ALLIED INDUSTRIES PLC 32,058.20 12.10 - 20 201,238 UNION DICON SALT PLC. 2,993.06 10.95 - 0 0 197 2,322,256 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 13,616.96 7.25 1.40 29 552,205 NESTLE NIGERIA PLC. 931,371.10 1,175.00 - 12 14,927 41 567,132 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 1 50 VITAFOAM NIG PLC. 7,505.06 6.00 -0.83 38 858,346 39 858,396 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 15,881.91 4.00 - 46 495,559 UNILEVER NIGERIA PLC. 77,557.57 13.50 - 58 147,006 104 642,565 584 10,678,849 BANKING ECOBANK TRANSNATIONAL INCORPORATED 78,903.07 4.30 1.16 147 5,389,355 FIDELITY BANK PLC 58,818.84 2.03 -0.98 123 11,457,750 GUARANTY TRUST BANK PLC. 869,691.35 29.55 -2.48 391 100,311,790 JAIZ BANK PLC 17,383.91 0.59 1.72 35 2,747,700 STERLING BANK PLC. 40,018.68 1.39 -0.71 63 6,061,155 UNION BANK NIG.PLC. 145,603.76 5.00 -1.00 41 578,001 UNITY BANK PLC 6,662.92 0.57 - 7 23,210 WEMA BANK PLC. 22,373.19 0.58 -1.69 27 1,332,220 834 127,901,181 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 1 6,000 AIICO INSURANCE PLC. 11,420.85 0.84 3.70 21 1,134,200 AXAMANSARD INSURANCE PLC 19,215.00 1.83 - 5 32,711 CONSOLIDATED HALLMARK INSURANCE PLC 3,960.67 0.37 - 1 8,900 CORNERSTONE INSURANCE PLC 10,899.84 0.60 - 2 9,000 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,050.56 0.28 - 15 2,299,399 LAW UNION AND ROCK INS. PLC. 4,725.96 1.10 - 11 136,066 LINKAGE ASSURANCE PLC 4,400.00 0.44 - 1 200 MUTUAL BENEFITS ASSURANCE PLC. 2,346.27 0.21 - 8 2,097,039 NEM INSURANCE PLC 10,561.01 2.00 - 5 75,000 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 3,816.72 0.60 - 0 0 REGENCY ASSURANCE PLC 1,600.50 0.24 9.09 14 245,790,421 SOVEREIGN TRUST INSURANCE PLC 2,272.89 0.20 - 1 5,000 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 1 200 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 8,876.92 0.37 -2.63 15 772,642 101 252,366,778 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 3,132.69 1.37 - 10 122,500 10 122,500

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BUSINESS DAY Wednesday 14 October 2020 www.businessday.ng

What’s the worst that could happen?

The world should think better about catastrophic and existential risks Plans and early-warning systems are always a good idea

O

N SEPTEMBER 2ND 1859 C.F. Herbert, prospecting for gold in s outh-eastern Australia, saw something sublime in the evening sky.

“A scene of almost unspeakable beauty presented itself, lights of every imaginable colour were issuing from the southern heavens,” he would later recall. “The rationalist and pantheist saw nature in her most exquisite robes. The superstitious and the fanatical had dire forebodings, and thought it a foreshadowing of Armageddon and final dissolution.”

Those who saw cataclysm in the auroral display were not exactly wrong: just ahead of their time. The Carrington event, as the geomagnetic storm Herbert observed came to be known, was the result of 100m tonnes of charged particles thrown off by the Sun a few hours earlier slamming into Earth’s magnetosphere, a protective magnetic sheath generated by currents in the planet’s liquid core. The electromagnetic effects of the onslaught did not just produce a truly spectacular display of the Southern Lights (and the Northern ones, too, visible as far south as Colombia). They induced powerful currents in any electrical conductors to hand. Some telegraph networks took on a life of their own, no longer needing batteries to generate signals.

Such effects mattered little 20 years before the advent of the light bulb. In today’s ubiquitously, fundamentally and increasingly electrified world a “coronal mass ejection” (CME) as large as that of the Carrington event could cause all kinds of chaos. Induced currents would topple electrical grids. Satellites would have their circuitry fried or be dragged from the sky as the outer atmosphere, bloated by the storm’s energy, rose up towards them.

How bad the effects of an offthe-charts CME might prove is up for debate. Some say a really big storm would knock the power out in various places for a few hours, as a moderate one did in Quebec in 1989. Others predict something little short of the end of days. That the world will some day find out who is right, though, is beyond debate. Solar physicists put the odds of a Carrington-level geomagnetic storm some time in the next ten years at around one in ten. Eventually one will come.

Geomagnetic storms are one of a small set of events found in the historical and geological record that present plausible threats of catastrophe. Pandemics are another, giant volcanic eruptions a third. Seeing how well—or how poorly—countries are currently coping with the only one of these

catastrophes of which they have prior experience raises the question of how they might cope with the others.

Technology plays a crucial role in the hazards such events generate. It can bring surcease, as a vaccine might for a pandemic.

It can bring vulnerability, as electric grids have when it comes to geomagnetic storms. And it can also bring forth new risks of its own. The most obvious are the technologies of internal combustion and nuclear weaponry, which made possible catastrophic global warming and war on an unprecedented, environment-shattering scale. It is possible that further techno-disasters may lie ahead— and that they may be the most serious of all, putting the whole human future in jeopardy.

In a recent book, “The Precipice”, Toby Ord of the Future of Humanity Institute at Oxford University defines an existential risk as one that “threatens the destruction of humanity’s long-term potential”. Some natural disasters could qualify. An impact like that of the 10km asteroid which ushered out the dinosaurs 66m years ago is one example. A burst of planet-scouring gamma rays from a nearby “hypernova” might be another. A volcanic “supereruption” like the one at Yellowstone which covered half the continental United States with ash 630,000 years ago would probably not extinguish the human race; but it could easily bring civilisation to an end. Happily, though, such events are very rare. The very fact that humans have made it through

hundreds of thousands of years of history and prehistory with their long-term potential intact argues that natural events which would end it all are not common.

Do you feel lucky, punk?

For already existing technologically mediated risks, such as those of nuclear war and climate collapse, there is no such reassuring record to point to, and Mr Ord duly rates them as having a higher chance of rising to the existential threat level. Higher still, he thinks, is the risk from technologies yet to come: advanced bioweapons which, unlike the opportunistic products of natural selection, are designed to be as devastating as possible; or artificial intelligences which, intentionally or incidentally, change the world in ways fundamentally inimical to their creators’ interests.

No one can calculate such risks, but it would be foolish to set them at exactly zero. Mr Ord reckons almost anyone looking at the century to come would have to concede “at least a one in 1,000 risk” of something like a runaway AI either completely eradicating humanity or permanently crippling its potential. His carefully reasoned, if clearly contestable, best guesses lead him to conclude that, taking all the risks he cites into account, the chances of humankind losing its future through such misadventure in the next 100 years stands at one in six. The roll of a single die; one spin of the revolver chamber.

Mr Ord is part of a movement which takes such gambles seriously in part because it sees the

‘‘

In a recent book, “The Precipice”, Toby Ord of the Future of Humanity Institute at Oxford University defines an existential risk as one that “threatens the destruction of humanity’s longterm potential

stakes as phenomenally high.

Academics who worry about existential risk—the trend began, in its modern form, when Nick Bostrom, a Swedish philosopher, founded the Future of Humanity Institute in 2005—frequently apply a timeagnosticversion of utilitarianism which sees “humanity’s long-term potential” as something far grander than the lives of the billions on Earth today: trillions and trillions of happy lives of equal worth lived over countless millennia to come. By this logic actions which go even a minuscule way towards safeguarding that potential are precious beyond price. Mr Ord, one of the founders of the “effective altruism” movement, which advocates behaviour rooted in strongly evidence-based utilitarianism, sees a concern with existential risk as part of the same project.

Risks that are merely catastrophic, not existential, do not tend to be the subject of such philosophical rumination. They are more amenable to the sort of calculations found in the practice of politics and power. Take the risk of a nuclear attack. According to Ron Suskind, a reporter, in November 2001 Dick Cheney noted that America needed new ways to confront “low-probability, high-impact” events. “If there’s a 1% chance that Pakistani scientists are helping al-Qaeda build or develop a nuclear weapon,” the vice-president said, “we have to treat it as a certainty in terms of our response”. Such responses included new wars, new government agencies (the Department of Homeland Security) and new executive powers, including warrantless surveillance.

If every perceived 1% risk were met with such vigour the world would be a very different place— and not necessarily a safer one.

But it is striking that some risks of similar magnitude are barely thought about at all. Imagine Mr Cheney was considering the possibility of losing a city over a 20-year period. What else puts a city’s worth of people and capital at a 1% risk every few decades?

The sort of catastrophic risks that crop up every millennium or so, threatening millions of lives and cost trillions. Perhaps they should be treated equally seriously. As Rumtin Sepasspour of the Centre for the Study of Existential Risk at Cambridge University puts it: “Governments need to think about security as just one category of risk.”

Carrington events are a good example. The most devastating effect of a really large CME would probably be on the transformers in electrical grids: gigantic, purposebuilt machines that step voltage down between the long-range transmission grid and the distri-

bution grid which runs lower-voltage power into homes, businesses and hospitals.

Strong enough induced currents could damage some of these transformers beyond repair. Because it typically takes between six and 12 months to get a replacement transformer made—and only a few countries have the industrial capacity to make them— that could leave grids crippled for some time. “If you simultaneously lose the ability to pump water, to pump fuel, to communicate, lose eyes in the sky, you pretty quickly get into territory that’s never really been explored before,” says Dan Baker, the director of the Laboratory for Atmospheric and Space Physics at the University of Colorado, Boulder.

Stockpiling backup transformers could help mitigate some of those problems. But large transformers are not commodity items.

“They don’t have a big warehouse holding these things ready to roll out,” says Mr Baker. Redundant local supplies, such as backup generators, would also help. Mr Baker is not sure, though, that enough is being invested in them.

Sudden impact In general, scientists and policy wonks who think about these things suspect that grid operators are not as prepared as they should be for a Carrington level storm.

But some see progress. William Murtagh, who works at the Space Weather Prediction Centre in Boulder, says American policy on space weather has come a long way, to the point where there are now bipartisan bills going through Congress and that grid operators are being required to certify the excess voltages their systems can cope with.

America does, at least, have a solid plan: the National Space Weather Strategy and Action Plan, published in March 2019. It also has an early warning system. The National Oceanographic and Atmospheric Administration, which runs the space-weather centre in Boulder, also runs a satellite called DSCOVR. Rather than orbit the Earth, DSCOVR circles a point on a line between the Earth and the Sun—the point about 1.5m kilometres inward from Earth where the two bodies’ gravitational attractions balance each other out.

Conceived of mainly as a way of looking back at an Earth spinning in eternal sunshine, DSCOVR also measures the stream of charged particles flowing past it from the Sun. When a storm passes by, the satellite’s operators down in Boulder will hear about its approach from DSCOVR between 15 minutes and an hour before the brunt of it hits the magnetosphere, depending on its speed.

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