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news you can trust I ** wednesDAY 15 july 2020 I vol. 19, no 606

Amid fraud allegations, students on NDDC, PTDF scholarship stranded abroad ISAAC ANYAOGU

hile billions of naira was allegedly being misappropriated in the Niger Delta Development Commission (NDDC), scores of students on its scholarship abroad remained stranded, and the outbreak of coronavirus has worsened their situation. The students, who are beneficiaries of the Commission’s postgraduate foreign scholarship programme, have told BusinessDay that their tuition and grants for living expenses have remained unpaid, increasing the possibility that they may fail to complete their programmes. This is also the same fate facing students under the Petroleum Technology Development Fund (PTDF) scho larship Continues on page 31

Inside

We have addressed concerns of striking doctors – Sanwo-Olu P. 25 Nigeria’s e-commerce firms count losses amid rumoured spike during COVID-19 lockdown P. 30

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Palm oil, poultry, packaging lead new manufacturing jobs As patronage spikes expansion by 25% Recent statistics reflect opportunities in economy

Odinaka Anudu

ightened borders and shift in tastes among Nigerians ramped up patronage of palm/ vegetable oil, plastic packaging and poultry products in 2019, forcing the producers to lift year-on-year job numbers in the manufacturing sector by 25 percent. Total jobs created by manu-

facturers in 2019 were 22,729 as against 18,203 reported in 2018, representing a 25 percent increase year-on-year, the Manufacturers Association of Nigeria (MAN) notes in a report sent to BusinessDay. Out of these jobs, the plastics industry, especially packaging companies, posted 4,207 new jobs (18.5%). Food and beverages, led by the vegetable/palm oil and poultry segments, trailed,

reporting 3,697 fresh employment (16.2%) in 2019. Food/beverages and plastics sub-sectors posted the highest job numbers in 2019, though the former created most jobs in the second half of the year (21% of the total jobs) than any other industry, according to MAN. This is an indication that the sub-sectors are seeing new opportunities in the economy. “The issue of border closure

favoured some manufacturers and disfavoured others. The vegetable oil companies and those in poultry were among those favoured,” Olusegun Osidipe, director of Economics and Statistics at MAN, who prepared the report, told BusinessDay. “Border closure in August had a spiral effect among them, and it ushered in the festive season Continues on page 31

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Reps bar INEC officials from contesting elections James Kwen, Abuja

he House of Representatives Tuesday took steps to restrain electoral officers, particularly state and national commissioners of the Independent National E l e c t o ra l C o m m i s s i o n (INEC) from participating in partisan politics and seeking elective positions up till five years after leaving office. The house passed for second reading, a bill to amend the Electoral Act to prohibit electoral officers from engaging in partisan politics within five years of retirement, resignation and official relief of duties. The proposed legislation seeks to amend the Principal Act by creating new Sub-section 2 in Section 146 which shall

read: “Notwithstanding (1) above, and anything to the contrary in any enactment or law, a person who holds or has held office as a member of the commission appointed by the President by virtue of the 3rd Schedule, Part 1 (F) of the 1999 constitution (as amended) and Resident Electoral Commissioner (REC) appointed under the Act shall not, until after a period of five years immediately after retirement, resignation or official relief of duties, be qualified for any elective office in Nigeria”. In a lead debate, sponsor of the bill, Tasir Oluwale-Raji (APC, Lagos) argued that given the information available to a National Electoral Commissioner and the Resident Electoral Commis-

sioner respectively, during their period of service as electoral staff, of which the general public is not privy to especially the methods and the procedures on how elections are conducted, it has become imperative to restrict them from aspiring for elective positions in government for a period of at least five years of their disengagement from the commission. Oluwale-Raji contended that such officers within this timeframe would have lost touch with happenings in the electoral body. The act, he said, is tailored towards the protection of the integrity of the INEC, elections and build the confidence of the electorate towards the activities and affairs of the commission.

E-voting: INEC to send proposals for Electoral Act amendment to NASS Iniobong Iwok

he Independent National Electoral Commission (INEC) says it is working to fulfill its earlier promise that all elections from next year would be conducted and transmitted electronically. Recall that Mahmood Yakubu, INEC chairman had said recently hinted that electronic voting would be adopted in future elections beginning with

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the 2021 Anambra State governorship election. He said the measure was to check electoral fraud and give credibility to the electoral system in the country. “The commission is committed to introducing at least electronic balloting in the major election we are going to conduct next year, which happens to be the Anambra governorship election,” Yakubu had said. Agitations for the commis-

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sion to adopt electronic voting in all elections had intensified, due to complaints of irregularities that marred the 2019 general elections. However, stakeholders have expressed reservations on the readiness of the commission to adopt this process. They based their fears majorly on the non-amendment of the 2010 Electoral Act by the National Assembly. But in an interview with BusinessDay, Tuesday, Festus Okoye, INEC national commissioner for information and voters education, said the full compendium of the commission’s proposals on the constitutional amendment would be presented to the National Assembly in the next few days.

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Naira devaluation: Reactive and counterproductive

Franklin Ngwu

ust as COVID-19 kills more people with underlying health challenges, its emergence has made our litany of socio-economic problems more precarious. With worsening foreign exchange revenue and demand, it seems that further devaluation of the Naira is inevitable. However, while there is no doubt on the negative consequences of Covid19, the problem is the way we (Nigeria) directly or indirectly contribute to our economic problems and then turn around trying to solve the same problem. A very good example is our foreign exchange challenge. Precisely, the problem we have is not of devaluation, it is one of limited foreign exchange revenue source and weak foreign exchange management. I will dwell on the latter in this piece with solution to the limited foreign exchange sources examined next week. To be clear, all these calls and demands for further devaluation of the Naira are flawed and clearly derive from our reactive approach to all our socioeconomic problems. If a currency that is officially exchanging at N360 to the $1 (the global currency) is not devalued, I am at a loss on what further devaluation will achieve in a mono-economy

such as ours. If we cannot achieve a higher export at this rate, even a further 100 percent devaluation will not create the miracle. The USA, UK and Germany with the most valued currencies have continued to maintain their global export competitiveness. Just as our problems are clear, the solutions are not far fetched. All that is required is a courageous and committed leadership with proactive, innovative solutions to our problems. How can we be talking of further devaluation when inflation is above 12 percent and unemployment above 35 percent and these problems have remained a major challenge for both the CBN and fiscal policy providers for the last 45 years. In the UK with the most valued currency and whose policies we often adopt, inflation is below 1.5 percent, the unemployment rate is 3.9 percent and interest rate is 0.25 percent from the Bank of England and below 5 percent from the UK commercial banks. As earlier stated, while Covid 19 and consequent fall in oil prices have contributed to our foreign exchange problems, a further contributory factor is the way the CBN (not started by Emefiele) has managed our foreign exchange earnings. In the current Federal Allocation approach, the CBN substitutes the accrued dollars with printed naira which are then shared to states and other beneficiaries in line with the agreed sharing formula. As the Naira-substituted Dollars form our so-called external reserves, this approach is inherently faulty and counter-productive as it contributes significantly to our exchange rate problems. Given our high import dependence and other factors such as corruption, this approach creates and sustains a kind of internal pressure on

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To test its workability, it can be agreed that all beneficiaries of the Federation Account should get their allocations 50 percent in dollars and 50 percent in Naira for at least one year for a start

the Naira due to the exchange of most of the allocated Naira back to foreign currencies (Dollars) by the initial beneficiaries. It is this internally created problem that the CBN then tries to address by selling back some of the withheld dollars (foreign reserves) as dollar injections. Through this flawed process, the CBN therefore creates an economy that will continuously under-perform with persistent excessive fiscal deficits and inflation. We are, therefore, creating and sustaining our problems through induced demand for dollars and reactive supply in the form of regular dollar injections into the economy by CBN. Therefore, one of the real solutions to our foreign exchange problem is the need for CBN to critically rethink the way our dollar-bearing Federation Account is managed. As a suggestion, it might be better for the CBN through a carefully managed and supervised system to allocate part of the dollars directly to the concerned beneficiaries (federal, state and local governments) through their special accounts either with the CBN or banks. Arguably, this will be more proactive and appropriate to our situation. It will also help address another major monetary problem of the CBN which is the persistent excess liquidity in the system. The banks will be better stimulated to rightly intermediate the economy rather than their current rentseeking and limited intermediation contributions. Although I appreciate that the CBN main mandate is to protect and defend our legal tender, the Naira, the truth is that our exchange rate and economic situation require some innovation which sometimes might sound unpopular. While some might argue that this will be illegal as it will amount to

15 money-saving hacks for your business

t is no hidden secret that properly run businesses have a far higher probability of living longer than their founders, even if those founders live to be 100 years old. These businesses are constantly mindful of their revenue generation activities and their cost drivers, so that they can consistently remain profitable. How do businesses increase profit? They do this by increasing revenue generation and also by reducing costs. The focus today is on adopting a few hacks that can result in money savings for the business and consequently, higher profit. Here are just a few cost saving hacks and you may already be applying some of them. If so, keep it up. 1. You don’t have to buy brand new fixed assets. Fans, TVs, computers, etc. do not have to be purchased brand new. Look for reliable vendors selling second hand assets. Furniture like tables and chairs don’t have to come from popular retail centres; get recommendations from friends, acquaintances or colleagues for reliable second hand dealers. I know a certain business owner who bought a second hand HP laptop for N100,000. The brand-new laptop of that particular model was costing N300,000. He has now used that fairly used laptop for three years and it’s still functioning properly. Choose utility over aesthetics where aesthetics is going to cost you so much more; especially if you are not selling luxury products. You need to remember that your office is neither a museum nor a tourist centre, therefore keep things practical. 2. Use independent contractors for different services – Accounting, Marketing, IT Support, HR and so on. Only keep in full employment those who form the core part of your operations. Even your sales team can be outsourced. There are

Direct Sales Agencies who can deliver sales for a minimal fixed fee and commissions on each sale. In doing this, you are not denying your business the benefits of such services, rather you have found a cost-effective way to acquire those benefits. 3. Be reluctant to sell on credit. It is advisable that you sell on credit with great caution after several background checks. That’s right; you also have a right to research your customers’ behavioural patterns with your competition. The reason is that sales on credit can easily become bad debts written off to your Profit or Loss statement. This translates to a reduction in your profit. 4. Consider barter arrangements for some services, so you don’t have to part with money. You might part with time or products. You would therefore need to quantify properly. In adopting this, you need to assess that the exchange value for both items of products or service are at par, so that neither party is cheated. 5. Get a prepaid electricity meter for your business premises so that you can control how much you are spending on electricity. In doing this, you avoid getting bogged down with estimated bills that are sent to you even when no electricity has been supplied. With a prepaid electricity meter, you can decide you will only spend N10,000 monthly, for instance, and control how you use your appliances. You may not have to use the fridge for the entire 8 hours you are in your office; maybe opt for 4 hours. Same goes for other heavy power consuming appliances. Here you have control, so take advantage of it. 6. Minimise costs associated with inventory and supply chain. There are costs associated with having too much goods and having too little goods in store. Ascertain your economic order quantity. That is, the amount of stock/inventory

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that will allow you minimise both holding cost and ordering costs. If your supplier and logistics company will grant you a discount for certain bulk orders, you need to compare that discount to the additional storage space you might need. Are you also sure these items will move fast enough for you to recover profit multiple times and cover the storage cost? Such considerations lead to more effective cost savings. 7. Office stationery is usually overlooked and constitutes a whole lot of wastage in some offices. Go paperless as much as possible. Print only those things that must be printed, perhaps for regulatory reasons. For instance, invoices and other tax audit related documents, because routinely these officials come around to check. But stationery consumption is one area of waste that businesses don’t typically check. If you want your staff to learn something, for instance, just send it to them electronically. If you’re worried about loss of data, then consider cloud-based storage options. Drop Box, We Transfer etc. They are comparatively cheaper than having all documents printed and filed. 8. Get a smaller, cheaper office space or sublet to other credible business owners. How many of your customers visit your office? Right now, the future of work is going to be more virtual; brick and mortar offices will no longer be as prominent. But this still doesn’t apply to all business types. Some businesses still need to have their staff together due to the sort of collaboration required to get work done. For instance, manufacturing concerns, fashion houses, and so on. Even then, make the most of the space and sublet excess space to reduce the rent burden. 9. Pay taxes on time to avoid costs arising from late payment penalties. Several businesses have lost money by delaying payments on taxes;

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dollarisation of the economy, the truth is that our economy is already dollarised, and possibly “poundanised” and “euronised.” It is a matter of being practical or merging theory with reality to achieve a better and sustainable outcome. If legislation is required, it should be sought and received to effectively jumpstart the process. As they say, special situations require special solutions. To test its workability, it can be agreed that all beneficiaries of the Federation Account should get their allocations 50 percent in dollars and 50 percent in Naira for at least one year for a start. Moreover, if we are truly practicing a federal system of government, I do not think that the states will not be allowed to generate foreign exchange through the export of their products. The pressure on the Naira will be reduced through which a more stable exchange rate that is market determined can be achieved. It will reduce or eliminate the persistent excess liquidity in the system through which the banks have continuously made unmerited profits. Further cost reduction and elimination of waste will be achieved through the limited use or lack of the need to issue treasury bills that are normally used by the CBN to mop up excess liquidity. As some of the treasury bills are sometimes turned into treasury bonds, the government and the economy will benefit from the saved interest payments and debts. It will make Nigeria a better economy and country! 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.

Jovita Madojemu

thus, accumulating huge amounts in penalties and increasing overall amounts paid out to tax authorities. For example, VAT attracts a N5,000 penalty for every month you don’t remit your taxes plus interest. This is avoidable by paying promptly on or before due dates. 10. Get most, if not all your meetings online. Use Zoom, Skype, WhatsApp and other alternatives to have your meetings. Don’t feel embarrassed about saving on GSM call costs when you can make those calls over data. This is even a good way to maximise your data plan. Virtual meetings also impact positively on your travel time and costs of fuel and vehicle maintenance and repairs from going all around town in the pursuit of business. 11. Consider repair options before going for full replacement. There is always the temptation to quickly replace an item if it is not working, when you can actually opt for a repair and save money thereby. For instance, if your laptop battery life is shorter than its original lifespan, consider changing the battery for N15,000 rather than deciding you need a new laptop that may cost you N200,000 or more. Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Madojemu is the Managing Director of Pundit Bookkeeping Services; a company bridging the gap between emerging businesses and professionally prepared accounts. Jovita seeks to empower young businesses with financial intelligence, for business growth and sustainability. Instagram @jovitamadojemu, @punditbk; Twitter @punditbk; Email – jmadojemu@punditbookkeeping.com

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Recovery 105: SMEs must follow the money Small Business handbook

Emeka Osuji

he disappearance of customers’ cash flows has made it imperative for all businesses, large and small, to seek alternative sources of cash. As inflows dry up and bills flood in, the time has come to seek new directions to business continuity. Cash has never been a greater king than it is today. The Central Bank knows this, hence the many attempts to bring back hope for small businesses through soft loans and grants. However, not many MSMEs know where and how to find the Central Bank money? This is partly because some are yet to understand the character of the economic consequences of the pandemic. It is important for every business to maintain its vision and stay in shape even as things bite harder. Finance, which has become, an even more critical resource, will gravitate to those who are attractive to it. Those who talk to God must first get into the attitude of prayer. They don’t talk to God dancing around. The rate at which people die from COVID 19 is nothing compared to the rate at which it devastates an economy. The number of reported deaths, divided by the reported cases - what people in

the medical and demography professions call the crude mortality ratio of a disease, is very important in giving hope to those infected. Looking at this ratio for the Coronavirus infection, which hovers around three to four percent, it would appear that the raging fear of the pandemic is exaggerated or even misplaced. The low mortality ratio seems to have provided a reason to assuage the fears of victims and even those not yet infected. Quite seriously, there is nothing that should scare anyone with a sickness that parades such low capacity to kill, baring of course, other underlying factors like old age and preexisting chronic diseases - what they call co-morbidity. There is however, economic morbidity – death by economic causes. Avoiding this death is as important as avoiding infection of the virus, and every economic agent must guard against it. Even with the reported low mortality rate of the virus, there are some other facts about it that are not so comforting, which add to the fear of economic death. For one, there is, as yet, no known cure for COCID 19. While a number of therapeutics are undergoing clinical trials in several countries, including China, and more than 20 vaccines are in the process of development, there are currently no vaccines that have been licensed, or therapeutics publicly available. Besides, the fact that some carriers may be asymptomatic and infect unsuspecting victims, amplifies the fear of the disease. The greater fear is actually on the economic front. That is probably why many countries are rushing to unlock their systems only to relock them, the fear of the economic

consequences of prolonged lockdown are as grave as the fear of death, and this should propel our innovative spirit. In its report on the impact of COVID 19 on the tourism industry, the United Nations World Tourism Organization [UNWTO] gave a first assessment highlighting a massive shrinkage in international arrivals and receipts in 2020. In fact, the UNWTO has revised its 2020 prospects for international tourist arrivals to a negative growth of one percent to three percent. This development implies an estimated loss of US$30 to $50 billion in international tourism income. This impact cuts across several regions, including Asia and the Pacific, which is predicted to be the worst-hit region, with an anticipated fall in arrivals of 9 percent to 12 percent. Pandemics, including Coronavirus, are not new to the world. The world has seen several of such disasters in history and can easily chart a cause of recovery for itself. Those who prioritize their action properly may turn the corner faster than others. The economic and health consequences of a pandemic are most seriously felt by the most vulnerable and the poorest members of society. This was what happened during the Global Financial Crisis and the Ebola Crisis. The three most serious epidemics in history - the Bubonic Plague, also called Black Death, which killed about 60 million people, from 1348-1351, had the same effect. It was so bad, that in many areas between 25-40 percent of the population died. In a particular extreme case, about 80 percent of the population of a place was wiped out. Like COVID 19, the plague did not kill indiscriminately. Most of its victims had underlying

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Recovery will require a lot of financial and managerial engineering, SMEs must therefore follow any trails that lead to the cash

Note: The rest of this article continues in the online edition of Business Day @https:// businessday.ng Dr Osuji is head of the department of Economics at Pan Atlantic University Lagos. eosuji@ pau.edu.ng @Emekaosujii

The underdog

honestly can’t speak for other nationalities because I can’t pretend to know too much about what makes them tick but there’s an attribute the British have that I love and it’s their inclination to back and appreciate the underdog. “Well done. Smashing effort. Better luck next time” are very typical of the Brits to say. If nothing else, it’s an encouragement that there should be a next time. Maybe that’s why we don’t see too much of an unholy desperation to win at all cost. Barring the look of disappointment on the face of the losing side, it can be quite a task to figure out which side won, as both sides receive almost equal praise. And because of this encouragement, the losing side feels adequately encouraged to try again. “Hopefully, just a little more effort should do it”, he would say to himself. This therefore means your silent prayers for people aren’t always enough. People need the odd word that will spur them on and make them feel the effort they put into it was worth something and there’s hope to get better. This can be crucial, even if it’s just to acknowledge their courage to have given it a shot. I believe Nigerians have a way to go in this area. Here, everyone must always be seen to be on the winning side because no one wants to be associated with “losing”. I read somewhere that the only people who deserve to be referred to as “losers” are those who after falling, refuse to get up and try again, and not those who merely encounter a temporary defeat or setback but keep trying. If Abraham Lincoln had not had enough people around to encourage him after his many failures in life, I doubt he would have had the fortitude and the belief in himself to carry on. His sixth sense which kept telling him he had an appointment with destiny would have been dismissed as mere wishful thinking. After two failed attempts in business and eight, yes eight failed attempts to win elections at the state legislature, Congress and Senate, he eventually landed the biggest of them all, the

Presidency. And the irony is that this man who must have been labelled a failure by some, as he kept coming up short in multiple endeavours, became arguably the best and certainly the most revered President in US history. If he had listened to the deafening discouragement of silence, we would never have heard his name. Along the way, there were those who still clapped for him, applauded his tenacity and encouraged him to give it another push. The cheers were loud and clear. Fear of mockery, the longing for recognition and adulation; and perhaps the more reasonable human need to be valued, are just some of the reasons why our people feel they must win at all cost. And it’s destroying us. Literally. It has noticeably led to an elasticity in values and a blurring of the line between right and wrong in our society. It has desensitised us to the feelings of others, rendering the underdog an “orphan” in most competitive arenas of life. Absence of sufficient encouragement at the right time has often led to the abortion of glorious destinies, as abandoned dreams lay scattered on the bye lanes. Such people had been made to feel they lacked the talent to succeed. So, they gave up. Self-esteem and belief in oneself, required to carry on, had been consistently chiselled away by those not sensitive enough to realise just how much their actions or inactions affected others. I’ve noticed over and over again, how our people find it hard to clap at functions to salute the effort of performers, except when the performance attains a level they define as perfection. This really gets to me. I feel anyone with even a shred of empathy would know how it must feel to be at the receiving end. I remember a time at school. I must have been thirteen or fourteen years old. Each of the school Houses had worked hard at putting together a musical stage play. It wasn’t a matter of simply selecting the best actors your House had and putting those boys forward to represent you. No, that was far from the idea. Yes, every-

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one knew it was meant to be a competition between Houses but everyone had to be involved in one way or the other. That’s why it was quite common to see a hairy, baritone voiced Sixth Former playing a maiden and putting on the most ridiculous falsetto voice in an attempt to sound female. The more unlikely the candidate, the better. On the surface, the goal of each house was to win but the real name of the game was to teach the boys to cooperate with each other. Very much like life, cooperation and collaboration keep the wheel spinning. A mindset of “me, myself and I” can only get one so far, and it certainly won’t take anyone to anywhere good. A man who refuses to learn the art of collaborating with others to achieve a common goal can be nothing but a liability to any team he’s attached to. His selfish attitude will always get in the way. His stunted social skills, required to interact harmoniously from a place of patience, tolerance and understanding with others, would prove to be a major roadblock to producing desirable results. Not well versed in the subtle art of giving a little to take a little, his attitude will just “scatter” everything. Kindly forgive my colloquial language but you know there are some terms you just have to use to adequately capture the essence of what you’re trying to say. There are times when grammar just doesn’t cut it. Anyway, the House plays were much enjoyed by pupils, teachers and parents alike. It presented an opportunity to let our hair down and have some fun. So, on one of these nights, our House was called to perform. My part was a very small one, so thankfully, not much could go wrong. About seven of us stood in a line and we took it in turns to step out and sing a very short solo before stepping back into line. Straightforward enough. So, as it got to my turn, I stepped forward, matching the gusto of those who preceded me. And... that was it. I’d forgotten my lines. I quickly cast my

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conditions, like those of the majority of COVID 19 victims, which amplified their chances of infection and death. The other very catastrophic epidemic was the deaths of Native Americans, following the interaction of the Old and New Worlds, and the 1918 Influenza Pandemic. They all had serious economic, human and material consequences, often ending in a recession. Recovery requires the injection of fresh capital at all levels of business. That is why governments around the world are rallying round their financial systems to shore up support to the real sector. Undoubtedly, the economic engine of the world has been turned to “slow”. This is normal with pandemics, and comes with a chain of reactions that usually take a while to fully unfold. The business community has been hit so hard that it will take some time to recover. In the United States alone, over 40 million people have lost their jobs and more are going to do so. Recovery will require a lot of financial and managerial engineering. SMEs must therefore follow any trails that lead to the cash or find somebody who knows somebody who can lead them to the cash. They must also look out for innovative ideas. The disappearance of internal cash flows makes it mandatory for them to seek external financial sources. By now every MSME should have heard of the facilities offered by CBN, and be on their trail.

Character Matters with Daps

Dapo Akande eyes around the hall, from the right to the left but the words were nowhere to be found. After giving myself a couple of seconds, which felt like an hour, I quickly stepped back into line. You can’t imagine how embarrassed I was. The whole world, or so it seemed, stood still for me and in the end...nothing. Of course, my mates didn’t let me hear the last of it for the next week or so but what should I expect? In typical English fashion though, the teachers and parents just laughed it off as one of those things that can happen to anybody. With a genuine smile, parents greeted me with, “good effort Akandi”. They could never pronounce it as Akande, with the second “a” sounding like an “o” as we Yoruba pronounce it. “Don’t worry, you’ll do better next time” or “you did better than I would have” were the typical greetings that night. Anything to make me feel better with myself and realise it wasn’t the end of the world. Nobody bothered me by asking what happened because that was painfully obvious. Stage fright had caused me to forget my lines. Plain and simple. In the end however, the applause was no less and I was encouraged to “fight” another day. Changing the nation... one mind at a time. Akande is a Surrey University graduate with a Masters in Professional Ethics. An alumnus of the institute for National Transformation and author of two books; The Last Flight and Shifting Anchors. Contact: dapsakande25@ gmail.com

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BUSINESS DAY

Wednesday 15 July 2020

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Climate change: What Antarctica’s ‘doomsday glacier’ means for the planet

Thwaites Glacier is melting at an alarming rate, triggering fears over rising sea levels Leslie Hook, Steven Bernard and Ian Bott

ven by the standards of Antarctica, there are few places as remote and hostile as Thwaites Glacier. More than 1,000 miles from the nearest research base, battered by storms that can last for weeks, with temperatures that hit -40C in winter, working on the glacier is sometimes compared to working on the moon. Dubbed the “doomsday” glacier, Thwaites, perhaps more than any other place in the world, holds crucial clues about the future of the planet. Only a handful of people had ever set foot on Thwaites before last year. Now it is the focus of a major research project, led by British and American teams, as scientists race to understand how the glacier — which is the size of Britain and melting very quickly — is changing, and what that means for how much sea levels rise during our lifetimes. “It is the most vulnerable place in Antarctica,” says Rob Larter, a marine geophysicist and UK principal investigator for the Thwaites Glacier Project at the British Antarctic Survey. He takes a map and points to parts of the deteriorating glacier that have already broken off. “A lot of this is no longer there,” he says. The scientists studying Thwaites go to extreme lengths to carry out their research. Geologist Joanne Johnson spent eight weeks sharing a tent with just one other person in the Thwaites area earlier this year. “If something goes wrong, you are a very, very long way from help,” says Ms Johnson, a geologist at the British Antarctic Survey. Getting along with your colleague is crucial for survival. “Although you are in isolation, you are actually not very isolated at all, because you have this person who is with you 24

hours a day.” The extreme version of lockdown, she says, was not too bad. “I really enjoy that kind of world, I enjoy the isolation, and feeling like you are at one with the landscape,” she says. But the situation of Thwaites Glacier is more alarming. “The glacier is changing so fast at present, that we are very concerned that it will drain a lot of ice into the sea,” says Ms Johnson. “It is quite unstable, and you can see that when you fly over it, with loads of crevassing.” Ms Johnson is studying the rocks underneath the glacier, which will help to reveal its history. Knowing more about how Thwaites behaved in the past, she explains, should help scientists predict how it will respond to a warmer climate in the future. Her research is part of the International Thwaites Glacier Collaboration, a £20m effort by British and American scientists that is one of the most ambitious Antarctic research projects ever undertaken. But understanding the Thwaites Glacier is not just academic — it is crucial for predicting how sea level rises will impact on cities, and how we should prepare for a radically different world. If Thwaites continues to deteriorate, then by the end of the century the glacier could be responsible for centimetres or tens of centimetres of sea level rise. “That doesn’t sound like much, but it is,” says David Vaughan, director of science at the British Antarctic Survey. “It is not about the sea coming up the beach slowly over 100 years — it is about one morning you wake up, and an area that has never been flooded in history is flooded.” Melting ice threatens US Antarctica holds around 90 per cent of the ice on the planet. It is equivalent to a continent the size of Europe, covered in a blanket of ice 2km thick. And as the planet heats up due to climate change, it doesn’t warm evenly everywhere: the polar regions warm much faster. It puts the icy continent of Antarctica and Greenland, the smaller Arctic region, right at the forefront of

global warming. The South Pole has warmed at three times the global rate since 1989, according to a paper published last month. As Antarctic ice melts and the glaciers slide toward the ocean, Thwaites has a central position, that governs how the other glaciers behave. Right now, Thwaites is like a stopper holding back a lot of the other glaciers in West Antarctica. But scientists are worried that could change. “It is a keystone for the other glaciers around it in West Antarctica . . . If you remove it, other ice will potentially start draining into the ocean too,” says Paul Cutler, programme director for Antarctic glaciology at the National Science Foundation in the US. Thwaites is getting thinner and smaller, losing ice at an accelerating rate. “The big question is how quickly it becomes unstable,” Mr Cutler adds. “It seems to be teetering at the edge.” By itself, Thwaites could raise sea levels about 65cm as it melts. But if Thwaites goes, the knock-on effect across the western half of Antarctica would lead to between 2m and 3m of sea level rise, says Mr Cutler, a rise that would be catastrophic for most coastal cities. Right now climate modellers say sea levels will rise between 61cm and 110cm by the end of the century, assuming the world keeps emitting carbon dioxide at current levels. But if Thwaites collapses faster than expected, then the amount of sea level rise caused by Antarctica could be double what is in the models. The influence of gravity on the ocean means that sea levels will rise more in certain places. And an increase of that order would leave some cities more exposed than others, particularly the east coast of North America. Impact of warming oceans The good news is that the Antarctic continent is not melting that much, yet. It currently contributes about 1mm per year to the sea level rise, a third of the annual global increase. But the pace of change at glaciers like Thwaites has accelerated at an alarming rate, even

‘

Right now climate modellers say sea levels will rise between 61cm and 110cm by the end of the century, assuming the world keeps emitting carbon dioxide at current levels. But if Thwaites collapses faster than expected, then the amount of sea level rise caused by Antarctica could be double what is in the models

Favour is to men of skill

f you put on a dark shade, everything would likely appear dark to you regardless of how bright they are. While people don’t always wear physical shades, no mind is without a shade. Therefore, as humans, we always interpret life with a psychological pair of lenses (otherwise known as our mind map or mental frame or mindset). According to Stanford Mind & Body Lab, a mindset is “a mental frame or lens that selectively organises and encodes information, thereby orienting an individual toward a unique way of understanding an experience and guiding one toward corresponding actions and responses.” Because our mindsets are formed by information that we acquire over time from stories we are told as well as our education and experiences, memoirist Anais Nin was right when she said, “We don’t see things as they are, we see them as we are.” When lazy people ponder Solomon’s ancient muse, “Favour is not to men of skill,” they interpret it to suit their lazy disposition to life. They say things like “Favour does not come by labour” “You don’t need to be so skilful; once it’s your time, it’s your time.” They end up with an entitled mentality, telling you to “You better help me now, else, when it is my time, I will not

look at your side.” Guess what? It is never their time. In fact, at best, they experience near-successes and stay stuck for a long time. When they eventually begin to realise what they have missed, time is no longer on their side. I have always told people, “The race is not to the swift but it is good to be swift! Favour is not to men of skill but it is very important to be skilful.” I hardly relax from honing my skills and acquiring new ones. The first error that people who misinterpret Solomon’s proverb commit is that they don’t complete it when they quote it. They simply say, “The race is not to the swift, favour is not to men of skill.” Here is the complete proverb: “The race is not to the swift, nor the battle to the strong, nor bread to the wise, nor riches to men of understanding, nor favour to men of skill; but time and chance happens to them all.” The second error is that lazy people do not understand the concept of time and chance. They merely settle for simplistic conclusions. Everyone is born with talents which are Godgiven but we have to cultivate them through intentional personal development. So, while you might be skilful by grace, the real question

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is, can you be consistent enough to be prepared and remain at the top of your game when your time and chance come? It is not enough to be swift – add consistency: Are you still practising? It is not enough to be strong – add consistency: Are you still exercising? It is not enough to be wise – add consistency: Are you still studying? It is not enough to be skilful – add consistency: Are you still honing your skills? In the game of life, commitment and consistency always make the difference and they are better predictors of success than talents. This is what Solomon was pointing out. Joseph started as a dreamer and dream interpreter in his father’s house. When Pharaoh needed one in the palace, he was still fresh and even better because he stayed consistent. Favour is to men of skill! David started as a shepherd protecting his father’s sheep from wild animals. When the wild Goliath showed up, David was more than ready. Goliath was David’s opportunity, not his opposition to greatness. Favour is to men of skill! What of Cristiano Ronaldo? What of Messi? Talk about consistency! See how many times people have predicted

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though it would take thousands of years for Antarctica itself to melt. As concentrations of carbon dioxide in the atmosphere increase to levels never before experienced by humans, researchers are trying to understand how the planet is changing. Antarctica is central to that task. “Antarctica is by far the biggest risk,” in terms of extreme sea level rise, says Anders Levermann, a professor at the Potsdam Institute for Climate Impact Research, and the author of several papers on the Antarctic ice sheet. The big question is not whether, but how quickly, sea levels will rise. Ice takes time to melt and heat takes time to distribute through the climate system. Little is known about the physical properties of ice sheets and how they deteriorate over time, which is why understanding Thwaites is so critical. Mr Levermann explains that the physics involved is similar to putting an ice cube on a plate and watching it melt. “It is very difficult to say how fast sea level is rising, but it is not very difficult to say how much ice can survive on a planet that is 1C or 2C or 3C warmer, and how much the ocean will expand,” he says. Even though emissions of carbon dioxide have fallen significantly during worldwide lockdowns, the long-term prognosis is not good. Carbon dioxide can stay in the atmosphere for a century or longer, its levels are still increasing and the planet is still warming. Recent months have seen a series of grim new milestones: last month was the hottest June on record. And in July, a heatwave in the Russian Arctic near Siberia reached a record 38C, triggering a series of devastating wildfires. Many of the warming processes taking place on the planet are already “locked in” — like the disappearance of summer Arctic sea ice or the melting permafrost of Siberia — meaning that we may not be able to stop or reverse them. All we can do is research them, and understand what they mean for our lives.

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BRIGHT UKWENGA

Ronaldo to fade away like his predecessors. He keeps proving them wrong despite his age. Why? He worked on himself intentionally and consistently for his time. Favour is to men of skill! What is the conclusion of the whole matter? Skilful men who are consistent at their craft eventually attract powerful men into their lives. Only skilful and trustworthy men are useful to those in power; others are dependent and easily dispensable. So, when your skilfulness is in place, it is just a matter of time, powerful men will look out for you. That is what it means for kings to come to the brightness of your rising. Can you just stay consistent and keep being your best at what you do? You might not be getting the gigs now, but isn’t that a test of consistency? Don’t just wait for your time, work for your time! Ukwenga is an esteemed Author, Conference Speaker, Leadership Development Consultant, and the CEO, ScribeTribe an innovative media and publishing enterprise helping individual and corporate brands to express their ideas creatively and effectively.

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Wednesday 15 July 2020

BUSINESS DAY

Editorial Frank Aigbogun

Lagos transport system and infrastructure challenge

editor Patrick Atuanya

Occasional repairs are necessary, but poorly timed

Publisher/Editor-in-chief

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

Bashir Ibrahim Hassan

hen experts gathered recently and took a hard look at the transport system in Lagos, Nigeria’s sprawling city and its commercial nerve centre, the verdict was that the system has failed, hence the city’s never-ending traffic congestion story. By reason of its population, Lagos is indisputably a mega city but one with a very difficult residential and commercial environment made worse by its small land area estimated at 358,862 hectares or 3,577 square kilometers— about 0.4 percent of Nigeria’s total land area. Transportation systems in Lagos and the attendant city-wide gridlock are such that the experts who spoke at a webinar hosted by the United State’s Consulate, Lagos noted they impact negatively on the state’s economy by killing productivity. Increasing gridlock, according to them, also limits growth of businesses, causes severe physical and mental stress for the average Lagosian who stays in traffic for an average of 10 hours a day in order

to carry out his daily activities. Lagos is as a mega city is also aspiring to become a smart city and a 21st Century Economy but it is not enough to just wish to be one. The city-state needs to do what other mega, smart cities and thriving economies of the world have done to be what and where they are today. We agree with Robin Hutcheson, director of public works, Minneapolis, USA, that Lagos is fast becoming a world economy that is growing rapidly. But to support the growth of its economy, the state needs investment in its transportation system, bearing in mind, however, that investors would only come if they see there is an ease for people to get to work. Besides repurposing space and effectively removing more people per hour and per lane by converting a lot of space to bus-only lane, we are of the view that Lagos needs to urgently improve traffic situation by investing in a three-leg transport system such as rail, mass buses transit and ferries, which will also drive job creation and business growth. But that is not all. Poor and insufficient infrastructure stock is at the core of Lagos transportation problem. Apart from undeveloped water-ways,

rail transportation for mass movement is non-existent in this city with an estimated population of 20 million. This lack derives from failure of policies in the state. The failure of policies, in turn, is the reason for the inability of the state to revolutionise its public mass transit system, and to focus more on a functional water transportation system as a way of utilising the natural resource it has as a coastal city. For 11 years, the state has been working on its well intentioned rail system planned to move people massively from Okokomaiko to Marina on Lagos Island. It is the same story for the reconstruction and expansion of the Lagos-Badagry Expressway from four to 10 lanes. It beats the imagination that the socio-economic benefits of that road project in terms of business opportunities and increased real estate activities all of which will generate revenue to the state is lost on a government that is so passionate about economic growth and citizens’ well-being. Consciously or unconsciously, Lagos seems to gloss-over infrastructure maintenance. Here is a state where road transportation accounts for over 90 percent of its entire transportation

system, yet most of the roads are in terrible condition. It appears to us that the idea of a stitch in time saves nine is foreign here. Roads are left to deteriorate terribly and collapse before they attract government attention. This too explains, in part, why drainages are left to fester with garbage until rains come with flooding that submerges homes and communities. It is our well considered opinion that in a city as large and economically viable as Lagos, roads infrastructure must not be left to deteriorate. The repairs we see occasionally are necessary, but are poorly timed, creating the impression that government’s empathy is non-existent Like many other Lagosians, we consider it insensitive and ill-advised that government has decided to repair sections of Eko Bridge, Third Mainland Bridge and Apapa-Ijora Bridge all at the same time, not minding that all these bridges connect to the commercial hotspots of the mega city. Besides disrupting business activities, the repairs also pile pressure on motorists at a time when life and living are unbearably difficult. We believe there are better ways to do all these and get better results.

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

EDITORIAL ADVISORY BOARD Imo Itsueli Mohammed Hayatudeen Afolabi Oladele Vincent Maduka Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Mezuo Nwuneli Charles Anudu Tunji Adegbesan Eyo Ekpo Wiebe Boer Paul Arinze Boye Olusanya Ayo Gbeleyi Haruna Jalo-Waziri Clement Isong

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BusinessDay avidly thrives on the mainstay of our core values of being The Fourth Estate, Credible, Independent, Entrepreneurial and Purpose-Driven. • The Fourth Estate: We take pride in being guarantors of liberal economic thought • Credible: We believe in the principle of being objective, fair and fact-based • Independent: Our quest for liberal economic thought means that we are independent of private and public interests. • Entrepreneurial: We constantly search for new opportunities, maintaining the highest ethical standards in all we do • Purpose-Driven: We are committed to assembling a team of highly talented and motivated people that share our vision, while treating them with respect and fairness. www.businessday.ng

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Wednesday 15 July 2020

BUSINESS DAY

COMPANIES&MARKETS TELECOMS

Nigeria has 189.2m active voice subscribers as Q1’20 internet customers jumped 17% - NBS OLUFIKAYO OWOEYE

he Nigerian telecommunications industry has become one of the largest telecommunication markets in Africa. Telecoms data for the first three months 2020 showed that a total of 189.2 subscribers were active on voice as against 184.6 million in fourth quarter 2019 and 173,7million in first quarter 2019. This represented 2.48percent increase in voice subscriptions Quarter on Quarter and 8.96percent Year on Year. According to the Telecoms Data released by the Nigerian Bureau of Statistics, a total of 136.2million subscribers were active on internet as against 126.1 million in fourth quarter 2019 and 116.3million in first quarter 2019. This represented

8.03percent growth in internet subscriptions Quarter on Quarter and 17.10percent Year on Year. As expected, Lagos State, Nigeria’s sprawling commercial capital has the highest number of subscribers in terms of active voice per State in Q1 2020 and closely followed by Ogun and Kano States respectively while Bayelsa and Ekiti States have the least number of subscribers. Similarly, Lagos State has the highest number of subscribers in terms of active internet per State in Q1 2020 and closely followed by Kano and Ogun States respectively while Bayelsa and Ebonyi States have the least number of subscribers. Katsina state recorded the biggest increase at 3.679 million internet subscribers in the first quarter of 2020 compared to 3.17 million and

2.6 million subscribers in the 4th quarter and 1st quarter of 2019 respectively. This represents a 15.8% jump quarter on quarter and 41.5% jump year on year. Edo State was second year on year recording 36.8percent jump to 4.3 million internet subscribers. MTN has the highest share of voice & internet subscriptions, with 73.5million and 57.28million respectively; Glo has 33.87miilion internet subscribers and 51.85million voice subscribers; Airtel has 51.29million voice subscribers and 36.82million internet subscribers; Etisalat has 7.76million internet subscribers and 12.13million voice subscribers. Internet subscriber ’s growth in Nigeria continues to record double-digit growth and is one of the fastest in the world. From a negligible 0.1%

average contribution to Nigeria’s Gross Domestic Product (GDP) before 1999, prior to the adoption of GSM, the sector’s contribution to GDP since 2010 has averaged 8.9% with nominal activity rising from N26.3bn to N7.4tn by 2019 (implying more than 200.0x increase). More interestingly, the sector was the fastest growing in Nigeria between 2000 and 2010, growing at a normalized average of 34.9%, before moderating to an average growth of 4.6% from 2011 to 2019. Possible attributable factors to moderation in growth could be mobile subscribers approaching saturation, recession in 2016, intense competition and regulatory constraints. As at Dec-2019, the telecoms sector accounted for 19.6% of the larger services sector of the economy.

L-R: Olusegun Emmanuel, product development manager; Joseph Samuel, executive chairman, Origin Group, and Kunle Ball, executive vice chairman, Origin Group, at the unveil of the tractor hailing mobile platform, TRACTORONTHEGO (TOG) by Origin Group in Lagos.

Siemens Energy joins the fight against COVID-19 in Nigeria …. donates testing kits, medical PPEs to Lagos State Government IFEOMA OKEKE

n a bid to support the government’s effort in the fight against the spread of COVID-19 in Nigeria, Siemens Energy Limited has made donations of SARS- COV 2 RT PCR test kits and personal protective equipment including face masks and gloves to the Lagos State Government. In the wake of this unprecedented health crisis, the contribution of these vital supplies reiterates the company’s drive to support the Government and aid the global fight against the pandemic. Representatives of Siemens Energy, Mr. Oladayo Orolu, Head, Business Development and Government Affairs, and Titilola Taiwo, Communications Manager, on Monday, July 6th, 2020 presented the items to the Lagos State Government and the Nigerian Centre for Disease Control (NCDC). Receiving the items on behalf of NCDC, Mrs. Olajumoke Babatunde, Head of Unit, NCDC Lagos Office appreciated the kind gesture by Siemens and expressed her gratitude. Also present to receive the items for the Lagos State Government (LASG) was Jide Razak, the warehouse manager. Acknowledging the donation, Chikwe Ihekweazu, Director General, NCDC, stated, “We are deeply grateful for your generous donation to support the COVID-19 national response. These would greatly support the ongoing efforts towards achieving our national COVID-19 testing strategy.” Commenting on what the initiative means to Siemens,

Onyeche Tifase, the CEO, Siemens Energy Limited, said, “Siemens has a longstanding commitment to Nigeria and we believe that as a private entity we have a role to play to consistently support governments and societies where we operate. In this crucial time, we are playing our part to fight against the COVID-19 pandemic in Nigeria by providing essential materials to support our government and those at the front lines. “Also, we cannot but commend our medical community and other workers on the front line for their sacrifice during this time. As Nigerians we need to take individual responsibility and play our part to flatten the curve by practising social distancing and adhering to the directives given by the government and health bodies”, she added. Oladayo Orolu, the head, Business Development and G ov e r n m e nt Re l at i o n s, Siemens Energy Limited, said, “The testing kits and medical PPEs presented are aimed at complementing the commendable effort of the government in the fight against COVID-19 and to ensure that the healthcare community gets the adequate support they require in this trying time. Our goal is to support the Government’s efforts to expand testing capacity and contain the spread of COVID-19 in Nigeria.” Since the entry into the Nigerian market 50 years ago in 1970, Siemens has consistently leveraged their expertise to impact Nigeria through various partnerships and initiatives focused on creating societal, economic and environmental contributions.

Sigma Pensions lists opportunities for pension investments amidst market volatilities MODESTUS ANAESORONYE

igma Pensions has stated that that they are committed to protecting and improving their customers return on investment amidst the global economic shocks and waves. The Pension Fund Administrator also said it’s able to understand investment market and hedge its customers fund against volatilities. Adewale Okunrinboye, head, Research & Strategy, Sigma Pensions, gave this reassurance during the Company’s Webinar where he spoke

extensively on ‘Reshaping the Future of Work & Optimizing Investment returns after a Pandemic.’ Using his knowledge with research, he also gave the participants investments tips by urging them to invest more in dollar backed investments to secure against foreign currency volatility. Okunrinboye said: “The way we designed our investment strategy is always thinking of the long-term focus. We ensure that that our portfolio is well diversified and even if there is volatility, our ability to recover back is very strong such that it is not a loss situa-

tion. Also, beyond the shortterm volatility, we are also constantly scanning to better opportunities such as investing in companies that are the most innovative in their sectors whatever the sectors.” “So, because we are focused on the long term, we have the tolerance to wave through it and that is something that should always be reassuring to our customers.” Furthermore, on investments tips, he said: “For equities, focus on companies which are leaders in their field from a technology perspective. Telecoms firms, fintech players and e-commerce. In

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addition, healthcare is also a focus as more funds will go into pharmaceuticals, hospital care etc. On the interest rate side, focus on instruments which gives a currency hedge like Eurobond funds.” “Low oil prices suggest the CBN’s ability to hold the value of the exchange rate is much weaker. Thus, the probability of the Naira losing value is much higher. As such, investing in dollar backed investments is as a good way to hedge against the currency weakness.” The session which was moderated by Adaora Ude, head of Human Resources,

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Sigma Pensions explored the emerging trends in Human Resource Management and proffered solutions to the various issues that have arisen from the current crises. It also highlighted how Pension contributions have been impacted and recommends steps to recovery. Speaking on business continuity and how businesses and individuals can give themselves a competitive advantage in today’s workplace, Bina Idonije, senior counsel, Labour & Employment, Sub Saharan Africa, General Electric urged that companies and individuals to adopted @Businessdayng

technology and innovations constantly. She said: “To ensure you remain relevant and build the skill set that are required for today and tomorrow. Also, organisations should stop thinking about technology as something that is for the IT department, it should be part of you strategy. If it is not part of your strategy then you are not planning long term.” “Technology and how you can leverage on it for your business to optimize your business isn’t part of an organisations plan, then that organisation is planning to be around for a long time.”

Wednesday 15 July 2020

BUSINESS DAY

COMPANIES&MARKETS DEALS

Helios Holdings merges with Fairfax Africa Holdings OLUFIKAYO OWOEYE

airfax Africa Holdings Corporation has reached an agreement to merge with Helios Holdings limited, the Africa-focused private equity firm, Helios Holdings Limited. The purpose of the merger is to create a truly pan Africa focused alternative investment firm According to a statement made available by Fairfax, when the deal is finalized, which is expected to occur in the third quarter of this year, Fairfax Africa Holdings Corporation will be renamed Helios Fairfax Partners Corporation. The company will remain listed on the Toronto Stock Exchange and the Helios co-founders will be joint Chief Executives of the new company. Completion of the Transaction is subject to customary conditions, including receipt of applicable regulatory approvals, the approval of the Toronto Stock Exchange, and approval by Shareholders. The terms of the deal will also require Helios to exchange 45.9percent of equity and voting interest in the new

…to be renamed Helios Fairfax Partners Corporation company. Helios will contribute its performance and management fees through its present and future holdings under the Helios funds, thereby making Helios Fairfax Partners Corporation one of the biggest Africa-focused asset management firms by complementing the experiences and funds of both companies under one umbrella. The new company will also have a larger capital base for diversified investment inflows to the continent through years of experience in third-party investment management operations and the support of longer-term institutional shareholders. The main objectives of this deal are Helios Fairfax Partners Corporation would become the leading panAfrica focused listed alternative asset manager with unique capabilities to invest across the continent; the deal would create a diversified investment platform combining best in class third-party investment management capabilities with the strength of long-term shareholders in a permanent capital vehicle; provides an enlarged capital

base, increasing capacity to invest as well as to launch additional and differentiated Africa focused asset management strategies and initiatives; reinforces the parties’ shared long-term commitment to be a consistent and trusted provider of capital to growing African businesses across market cycles; Tope Lawani and Babatunde Soyoye, the cofounders and Managing Partners of Helios Investment Partners LLP, will become joint CEOs of the combined holding company, enabling the company to build on the track record they have established over the last 15 years Tope Lawani disclosed that the deal w ill offer emerging market investors the opportunity to gain exposure to the continent through their portfolio. “We take a long-term view on our investments, and many have proved resilient even in this pandemic with a number of our investments in sectors such as telecommunications, payments, and food,” Lawani said.

Microsoft 365 rolls out cost-effective work, learning solutions for corporates, education institutions KELECHI EWUZIE

etermined to make virtual interactions more natural, engaging, and more human for corporate organisation and educational institutions, Microsoft 365 business, has announced a set of new features in Microsoft Teams. The company observes that as the global response to Coronavirus pandemic also known as COVID-19 evolves communities around the world has moved from an era of “remote everything” into a more hybrid model of work, learning, and life. Jared Spataro is corporate vice president for Microsoft 365 Business says the new features in Microsoft Teams allows people at work and in education to feel more connected with team members; make meetings more inclusive and engaging and help streamline work and save time. Spataro opines that the product is all about enabling people everywhere to collaborate, to stay connected, and to discover new ways to be

productive from anywhere. According to Spataro, “At Microsoft, we have spent the last few months learning from our customers and studying how they use our tools. We have also worked with experts across virtual reality, AI, and productivity research to help understand the future of work” Spataro who is in charge of Microsoft 365 marketing, business management and product marketing stated that research conducted by the company has shown that many employees feel less connected since moving to remote work, and experience more fatigue during video meetings than during in-person collaboration. Commenting further on the new solution, Jared Spataro noted that there are several aspects of the solution tailored to meet the needs of the future of work and education. According to him, the list includes Dynamic view; Together mode, Video filters, Reflect messaging extension, Live reactions, Speaker attribution for live captions and transcripts, Chat bubwww.businessday.ng

bles, Interactive meetings for 1,000 participants and overflow Others are Microsoft Whiteboard updates, Tasks app, Suggested replies, Cortana in Teams, Microsoft Teams displays and Touchless meeting experiences. Spataro opines that these features will roll out later this year as they all reflect the company’s vision for the future of work: where everyone is able to contribute and do their best work; where they can move fluidly between experiences, apps, and devices; where AI lends a helping hand to streamline tasks, provide short cuts, and save you time; and where technology contributes to wellbeing and doesn’t detract from it. “From the kickoff call to the project’s launch and all points in-between Teams is the place where people come together to get work done. Working alongside our customers, we’ll continue reimagining the future of work and delivering technologies that put people at the center of every experience,” Spataro said. https://www.facebook.com/businessdayng

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Wednesday 15 July 2020

BUSINESS DAY

cityfile DSS ‘official’ bags 12 years in jail

Federal High Court in Ibadan has sentenced one Ademola Lawal to 12 years in jail for impersonating the Department of State Services (DSS) and N1.85 million fraud. Delivering judgment on the case on Monday, Justice Patricia Ajoku convicted and sentenced Lawal based on the evidence before her and the fact that the convict pleaded guilty to the charges preferred against him. Ajoku, who noted that the court took awareness of the fact that the convict pleaded guilty, said: “It is my belief that the convict is remorseful of his action now and has demonstrated that he is willing to change and contribute positively to the society. “Nevertheless, Lawal is sentenced to two years in prison for each of the six offences to serve as deterrent

to others. However, sentences shall run concurrently. She ruled that in addition to the sentence, Lawal shall pay the monies he fraudulently obtained from his victims which shall be forfeited to the Federal Government of Nigeria. The defence counsel, Musbau Olapade, had shortly before sentencing, prayed the court to temper justice with mercy in sentencing his client. Olapade said that the convict was a first time offender and had learnt his lesson in a bitter way. At the trial, counsel to the DSS, T.A. Nurudeen had told the court that the convict was arraigned on a six-count charge bordering on impersonation and threat. Nurudeen said that the convict committed the crime between 2015 and 2019 before he was eventually apprehended.

Makinde proposes N3bn investment to boost water supply in Oyo remi feyisipo, Ibadan

overnor Seyi Makinde has proposed a N3 billion investment plan for water supply in urban and rural areas in Oyo State. Najeem Omirinde, chairman of Oyo State Rural Water Supply and Sanitation Agency (RUWASSA), stated this on Monday in Ibadan while speaking with newsmen on the activities of the agency. Omirinde said N500 million of the N3 billion water investment plan would be dedicated to repairing faulty public boreholes throughout the state. He added that chairmen of all local government areas and Local Community Development Areas (LCDAs) had

been contacted to submit the list of such 10 faulty boreholes in their respective areas. Omirinde said Makinde had directed that every new borehole dug in public areas must be solar-powered so as to ensure the durability of the project. He, however, called on residents to write to the agency whenever they want to dig boreholes for public and private use. According to him, the cost of sinking boreholes by the agency would be cheaper in comparison to the cost to be charged by private boreholedrilling companies. The agency chairman said that Makinde had assured the people of the state of his readiness to make water available to ease scarcity.

Suspected armed robbers and accomplices arrested by Oyo State Command of the Nigeria Security and Civil Defence NAN Corps, in Ibadan.

Qua River encroachment threatens to wipe out community on back of NDDC abandoned project

he Iwuochang community in Ibeno local government area of Akwa Ibom has appealed to the Federal Government to build an embankment at the Qua Ibom River to check its continuous overflow. The community at a news conference in Ibeno on Sunday said that the encroachment by the river leaves the community and its dwellers in danger. According to the village head of Iwuochang, Daniel Afia, already property worth millions of naira and some members of the community have been displaced. Afia said that in some cases the high tide submerged houses that are closed to the river bank. He expressed concern over

possible threat of wipeout due to an abandoned embankment project awarded by the Niger Delta Development Commission (NDDC). He however said that the project, which was awarded by the NDDC, was built to some level but abandoned about eight years ago. “ T h e c o nt ra c t w a s awarded in 2012 by NDDC to Smith Engineering. The project was designed to replace an old and worn out embankment around the river to forestall frequent encroachment into the community during high tide,” Afia said. Afia said that the community had made several attempts to reach the contractor, who had since abandoned all their equipment at the site.

The village head alleged that no NDDC project had been completed in the area and cited several examples of abandoned roads in his area. He cited the road linking Ibeno with Eastern Obolo as one of the commission’s abandoned projects in the coastal area. Also speaking, Willie Sam, the vice president of Iwuochang community youths, said that the inability of the contractor to complete the project has forced many residents around the coastal line out of their homes. “You know they had to remove the old embankment to build the new one, but after removing it they abandoned the project, leaving the community bare to high tide. “All the houses around here were occupied by their

landlords but they have all been sacked because the encroachment is usually fast and unexpected,” he said. Willie lamented that on several occasions, he had taken letters on behalf of the community to the NDDC office in Port Harcourt and its Uyo office without response. The chief security officer of the area, Ebrewong Eshiet, however, blamed failures of NDDC projects in the region on poor supervision and contract award on political grounds. He also lamented that the community youths employed by Smith Engineering during the project were still being owed salaries. He said these were in addition to exposing the community to a possible wipeout due to the failed embankment.

COVID-19: Bayelsa residents embrace use of face masks Group condemns rising cases of domestic violence against women Samuel Ese, Yenagoa

mproved compliance with the use of face masks is being witnessed in Bayelsa as the directive making it mandatory in the state came into effect on Monday, July 13. Cityfile observed residents in tricycles, markets, business premises and offices in the state capital, Yenagoa have embraced the facemasks, meant to curtail the spread of Covid-19 in the coastal state. Last week, Governor Douye Diri announced the new measure to combat the spread of the coronavirus as the number of confirmed cases of infection continues to rise. The update on Monday

showed that Bayelsa State had 14 new cases bringing the total confirmed cases in the state to 313 out of which 153 discharged and 18 deaths recorded. Governor Diri had announced that defaulters would be arrested and prosecuted while stressing that supermarket owners, banks and tricycle operators would also be liable if violators are found in their premises or tricycles. Meanwhile, there are concerns among some residents that the governor’s executive order specifying the new Covid-19 measures has not been made available to the people. Emmanuel Ataya, a resident who spoke to Cityfile, stressed the need for the state www.businessday.ng

Covid-19 task force to print the new measures in pamphlets for distribution to residents. It was also observed that security agents even went into streets in Yenagoa and arrested people indiscriminately as against the executive order which restricted compliance to public places. However, there is the fear that agencies enforcing the executive orders, including the police have been targeting petty traders for extortions. Reacting to the indiscriminate arrests, Boma Spero-Jack, technical adviser to the governor on security and chairman of the security sub-committee of the Covid-19 task force, denied that those involved were members of his committee.

Modestus Anaesoronye

he Professional Insurance Ladies Association (PILA) has condemned the increasing cases of rape, assault and domestic violence against women in the country. PILA said this barbaric action against women particularly the underage does not only dehumanise the victims, but destroys their career and future. Joyce Ojemudia, president of PILA who lent her voice to condemn the ugly development, which has assumed higher dimensions in recent times, said the government

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must rise to its responsibility to protect the women. Ojemudia said stricter measures must be put in place to ensure that culprits are brought to book and justice given to victims. She particularly called for proper investigations into the case of Uwa Omozuwa, a 22-year-old 100 level student of University of Benin, who on May 27, was found in a pool of her blood after being raped and killed in a church where she had gone to study. She cited the case of 17-year-old Tina Ezekwe, who was murdered by triggerhappy officers of the Nigeria @Businessdayng

Police in Lagos, as well as other reported cases of violence against women, with a bid to bringing the perpetrators to justice. Ojemudia, who was inaugurated as the new president of PILA in May, said part of her focus during the two-year tenure would be to create strategic engagements and alliances with federal and state ministries of women affairs and other female professional groups for mutually beneficial relationships. The intention, Ojemudia noted, is to make the voice of PILA more heard in the scheme of things in the country.”

Wednesday 15 July 2020

BUSINESS DAY

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Wednesday 15 July 2020

BUSINESS DAY

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Wednesday 15 July 2020

BUSINESS DAY

BANKING Enhancing loan recovery across banking sector with CBN’s GSI guideline Stories by HOPE MOSES-ASHIKE

he Central Bank of Nigeria (CBN) on Monday, issued a guideline on Global Standing Instruction (GSI) to enhance loan recovery across the banking sector. The GSI is expected to serve as a last resort by a creditor bank, without recourse to the borrower, to recover past due obligations (Principal and Accrued Interest only, excluding any Penal Charges) from a defaulting borrower through a direct set-off from deposits/investments held in the borrower’s qualifying bank accounts with participating financial institutions. This is in pursuant of the powers conferred on the Central Bank by Section 2 (d) of the Central Bank of Nigeria Act, 2007; to promote a sound financial system in

Nigeria. The objectives of GSI include to facilitate an improved credit repayment culture; reduce Non-Performing Loans (NPLs) in the banking industry; and watch-listing consistent loan defaulters. A report by CBN staff showed a marginal increase in the non-performing loans ratio in April as compared to February 2020. Also, there were modest declines in key profitability indicators including Return on Equity (ROE) and Return on Assets (ROA), but increase in industry size at May 2020 still depicts a robust banking system. The CBN noted that the GSI shall not serve as a tool to recover any penal charges that may have accrued on a credit/loan and included as part of outstanding balances/obligations of a borrower. The types of accounts that qualify for GSI are individual savings accounts;

Godwin Emefiele, CBN governor

individual current accounts; individual domiciliary accounts; investment/de-

COVID-19: Bank of Industry strategizes for hard-hit sectors

he Bank of Industry (BOI) is reviewing its strategic priorities to ensure continuous support for enterprises, especially those hard hit by the COVID-19 pandemic. Specifically, it is deepening penetration in agroprocessing, food processing, technology, healthcare and pharmaceuticals to stimulate economic recovery and growth. Kayode Pitan, managing director of the bank who disclosed this at a webinar on overcoming business challenges presented by the COVID-19 pandemic, said it is an additional response to the significant changes in the global and local operating landscape. Soon after the outbreak of the pandemic, the bank responded with a number of measures to reduce the economic impact on customers. Among them, the bank reduced interest on its direct line of credit by 2% for one year from April 1, 2020 to March 31, 2021; granted a three-month moratorium on principal repayment to all beneficiaries of the BOI Fund from April1, 2020 to June 31, 2020; with option to extend by up to 12 months for customers with proper justification on case by case basis. For loans issued under the Central Bank of Nigeria (CBN) intervention programme and

in line with a CBN directive, the bank reviewed interest rate downwards to 5% per anum, with a 3-month moratorium. Also thee bank worked with the Nigerian Content Development Management Board (NCDMB) to reduce interest rates on credit facilities approved under the Nigerian Content Intervention Fund from 8% per anum to 6% per anum, including extension of the moratorium period. More directly, BoI made financial contributions to the relief efforts of governments and the organized private sector. At the webinar, Pitan noted that Nigeria, like many countries around the world, has not been immune to the economic headwinds created by the COVID-19 pandemic and has therefore been impacted with revenue shortfall and the fear of possible recession; low investor confidence; downgrade of credit ratings and difficulty in funding social intervention programmes due to reduced revenue projections.

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He said many of SMEs are expected to have challenges staying operational due to cash-flow constraints, and that will likely increase unemployment, reduce productivity and increase social tensions. Looking ahead, the managing director of Nigeria’s oldest and largest Development Finance Institution said it is reviewing further sectoral peculiarities and extent of impact of the pandemic on areas such as manufacturing; oil and gas; cinemas/entertainment; and hospitality for the development of tailored long-term palliatives; increasing business advisory support for given current headwinds; and deliberately seek out alternative countries for future sourcing of raw materials and equipment. On the felicities of the CBN to lenders, he said there will be continuous engagement with the apex bank on current intervention funds and new ones targeted at weaker sectors following the pandemic; and in collaboration with the Federal Government, improve social intervention for micro enterprises, for example, through the GEEP programme. BoI will also proactively engage its international lenders given the current headwinds and ensure availability of needed funding to support planned developmental support.

posit accounts (N & Foreign Currency); and electronic wallets, as well as joint ac-

counts. GSI stakeholders as outlined in the guideline include borrower, creditor bank, Participating Financial Institutions (PFI), Nigeria Inter-Bank Settlement System (NIBSS) and the CBN. The borrower is expected to execute a GSI mandate in hard copy or digital form, ensure that the terms and conditions of the mandate are clearly understood before execution, and ensure that all qualifying accounts are linked to his/her BVN. The guideline noted that in the event that a borrower’s qualifying account which is not linked to his/ her BVN is identified, such BVN shall be watch-listed. On the other hand, the role or responsibility of the creditor bank is to ensure that borrowers are properly educated about the GSI mandate and its implications; and enshrine same in their loan application pro-

cess. Such a bank needs to review and validate the GSI mandate instrument prior to loan disbursement, indemnify NIBSS and other Participating Financial Institutions from all liabilities that may arise from inappropriate use of the GSI infrastructure, and retain copies of physical or digital version of the executed GSI mandate and to provide same when required. The creditor bank is to ensure that the GSI trigger amount is only for outstanding principal amount and accrued interest (excluding ANY Penal Charges), comply with CBN’s prudential guidelines as it applies to classification of loans, and as a risk management tool, the managing director/CEO of each PFI shall routinely update the board of directors on the GSI process as it relates to frequency of use and amounts recovered or released.

BDCs call for suspension of all increases in taxes, tariffs ... Want CBN to deemphasize portfolio inflows

ureaux De Change (BDC) operators have called on the federal government to suspend all increases in taxation and tariffs until the economy recovers from the impact of the COVID-19 pandemic. The Association of Bureaux De Change Operators of Nigeria (ABCON) made this call in its Quarterly Economic Review report for the second quarter of the year (Q2’2020). While commending the recent decision to suspend the proposed hike in electricity tariff, ABCON urged that the same decision should be extended to proposed increases in taxation and tariffs, stressing that shortfalls in the budget as a result of the suspension should be covered with COVID-19 related donations. “Most importantly, government should as a major policy during this COVID-19 recovery period suspend any imposition or increase in taxation instead such shortfalls that might have emerged between national budget adjustments and expenditures should be covered by various financial support to COVID-19 from foreign and local contributors. In line with this observation, all current increases on in tariffs and taxes could be deferred until when the economy recovers from the effects of the

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pandemic,” the Association stated. ABCON also called for actions to minimize disruptions in the food chain noting that, “The lockdown and the consequent effects have been in Nigeria for about four months now in various states of the federation. One of the evident consequences of COVID-19 crisis is the potential to trigger a food security crisis in Nigeria, with agricultural production potentially contracting between 2.6 percent in an optimistic scenario and up to 7% if there are trade blockages according to a World Bank survey. “Thus, there should be more emphasis on saving lives and protecting livelihoods through strengthening health systems and taking quick actions to minimize disruptions in food supply chains. There should also be faster implementation of social protection programs, including cash transfers, food distribution and fee waivers, to support citizens, especially those working in the informal sector.” In the same vein, the Association has called for a paradigm shift in the foreign exchange market with the Central Bank of Nigeria (CBN) focusing on to supply side management from demand side management. In this @Businessdayng

regard, ABCON President, Aminu Gwadabe said: “The CBN should look beyond the portfolio inflows, which adds to the public debt, and seek stable and germane sources of foreign exchange. “The present unification of exchange rate should also be supported by new techniques and redefined trade policies particularly to mismatch import duties where duties on raw materials are sometimes higher than imported finished goods.” ABCON also stressed the need to open up the remittances market to allow more operators, especially BDCs, so as to increase access points, drive down the cost of remittances services for customers and also enhance financial inclusion across the country. “Opening up the remittance market generates competition among remittance payment operators. This is an important factor for the development of the market because it helps to keep the costs of these services low for consumers, helps increase access points, promote product innovation, and can ultimately contribute to greater financial inclusion. Lack of necessary inclusion makes a good volume of the flow into Nigeria’s system to go into the unofficial market sector,” it stated.

Wednesday 15 July 2020

BUSINESS DAY

insurance today

E-mail: insurancetoday@businessdayonline.com

Covid-19 pandemic has brought about positive innovations in insurance service delivery - Efekoha After two years in the saddle as the President and Chairman of Council of the Chartered Insurance Institute of Nigeria (CIIN), Eddie Efekoha is fulfilled that he achieved all that he set out to achieve. Efekoha in this interview to mark the end of his tenure tells Modestus Anaesoronye his journey in the last two years. Excerpt: At your Investiture as the 49th President of the CIIN, a number of laudable projects were outlined. To what extent were you able to accomplish these? irst, I owe this honour and privilege to Almighty God and to the Governing Council of the CIIN for the confidence reposed in me to steer the Institute for two years. Though it came with enormous responsibilities as I initially planned for only one year tenure but as fate will have it and also as necessitated by the turn of events, I reluctantly accepted to serve for the second year. I have always had passion for training and imparting knowledge as evidenced in prior positions I held in the Institute such as Chairman of Education Committee and the College of Insurance and Financial Management Board. Similarly, an important aspect of the CSR of my organisation, Consolidated Hallmark Insurance is the Annual Essay Competition for Tertiary Institutions. Therefore, it was not surprising that this passion influenced the main focus of my presidency as elucidated in my theme of Advancing Insurance Education and Professionalism. The fact that the CIIN had the statutory responsibility of determining the skill and knowledge requirements of insurance practitioners further reinforced that vision in me. Foremost on the agenda was ensuring that our professional members of the Institute acquired cutting edge skills that match up with global standards and enables them to compete favourably with their counterparts in other sectors. During my tenure, there was growth and development in the intellectual capacity of members and also the infrastructure of the CIIN; by extension, the CIFM which is its training arm. The relationship between the Institute and the CII UK was strengthened and among some of the fruits therefrom were revision of syllabus and the domestication of CII textbooks which were launched in June 2020. Similarly, the Institute’s Mentorship Programme was actualized with the organisation of an inaugural bootcamp where industry leaders shared experiences with young professionals with the aim of inspiring them to strive for greater achievements. The event also had Niyi Adesanya, a renowned life coach deliver a very impactful paper on leadership. Furthermore, the College has become the focal point for human capital development for insurance industry in Nigeria. This is evidenced by the partnership between the College and National Insurance Commission which resulted in the first ever Insurance Directors Conference and recently in the Actuarial Development Programme. Hence, the Institute more than ever before effectively delivered on its statutory duties during my tenure. This is not forgetting the tremendous infrastructural development at the College. The College campus now has a standard tennis court, well-furnished accommodation both for students, staff and visitors. We also recently commenced the construction of a world class auditorium, a N300m project kicked off with a sud-turning ceremony in November 2019 for which an initial seed fund of N100m was immediately provided.

Efekoha

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partly for the increase in enrolment rate for the examinations. Secondly, under my tenure, the CIIN instituted scholarships for best students in insurance in various tertiary institutions while we have preserved the discounts offered to students in tertiary institutions writing the Institute’s examinations. How confident are you about CIIN Associates’ ability to compete favourably with counterparts from all over the world considering the structure of the CIIN Examinations today? The Institute’s examinations both in content and delivery are of global standards because it benchmarked against leading insurance

‘

We had embarked on the digitalisation project which sets us on the path to effectively and efficiently accomplish our statutory functions

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‘

Also worthy of note during my tenure was the active advocacy for the adoption and implementation of compulsory insurance at various levels of Government and which took institute to various states within the country. In summary I feel as fulfilled as I end my tenure, having executed all I set out to achieve and much more when I came into office as the President of our great institute. Specifically, one of the projects in your presidency’s agenda was equipping accredited Insurance Departments of tertiary institutions across the country. How successful were you in this regard? The CIIN under my tenure made remarkable progress by building on the work of my predecessors. We donated two complete sets of CIIN course books to seven (7) institutions of higher learning namely: University of Lagos, University of Uyo, Enugu State University of Technology, Ekiti State University, Niger Delta University, Ken Saro-Wiwa Polytechnic, and College of Insurance and Financial Management. In total, 462 course-books were presented to these institutions. In the same vein, the CIIN Insurance Textbook for Senior Secondary School Students was also donated to secondary schools in Delta State in line with the Institute’s initiative geared towards promoting insurance as a career choice for secondary school leavers. Making CIIN Examinations affordable and accessible was part of your mandate, how well did you achieve that? I must say that this was successfully achieved regardless of rising inflation and costs in the country; the fees for the CIIN Professional Examinations have not been increased and remain the most affordable when compared with what similar professional bodies charge. The CIIN has also continuously advocated for insurance organisations’ support for staff writing professional examinations. This has accounted

institutes all over the world. Consequently, our Associates have continuously excelled in countries where they have been opportuned to practice the profession. Nigerian professionals hold leadership positions in insurance all over the world. Even our female are recognised as trailblazers in Africa as highlighted by the African Insurance Organisation at its annual conference in 2019. These successes were achieved because of the dynamism of our examination process, ensuring that course books are produced and examinations are conducted in emerging areas in the insurance business. In recognition of this some other countries within and outside the sub region have requested that the our examinations be conducted in their countries. Similarly, Mandatory Continuous Professional Development (MCPD) is required of all Associates and this is promoted by both the CIIN and CIFM to afford insurance professionals the opportunity of continuously upgrading their skills in line with emerging trends in the insurance market. I am delighted to inform you that a lot of the Institute’s Associates easily pass mandatory insurance practice examinations in other countries; an attestation to the fact that the CIIN Examinations is of global standard What is the impact of Covid-19 on activities of the Institute? The Institute like other organisations in the world has been affected by the pandemic however; this has brought about positive innovations in its service delivery. While our professional examinations have been put on a temporary hold, we are rigorously exploring digital means of conducting our examinations and training including relating with our members. The foray into virtual training began with the recent CIIN/CIFM Webinar themed ‘Insurance Value Delivery in the Pandemic and Beyond: A New Reality’ which was aimed at sensitising our members about the need to ensure value delivery in the adoption of technology. While the planning of digital examinations which is the ultimate is still in progress, we are awaiting a relaxation of restrictions and rules from government to conduct the postponed examinationsdue in the first diet in year 2020. The CIFM on the other hand now conducts all its training programmes online including certification workshops i.e. agents and bancassurance officers together with the Diploma Programme. One of the exciting opportunities that the pandemic has created is the ability to collaborate with foreign experts in the College thereby bringing training programs of global standard to our members at affordable prices. This is a reflection of the fact that the Institute is a very dynamic organisation with tremendous human and capital resources. Going forward, how prepared is the Institute for new normal? Permit me to reiterate that the Institute is a dynamic organisation that has continuously adapted to past and ongoing global challenges. This is our success factor. Before now, we had embarked on the digitalisation project which sets us on the path to effectively and efficiently accomplish our statutory functions. Hence, adapting to the new normal has been made easier than it would have been.

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Wednesday 15 July 2020

BUSINESS DAY

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Wednesday 15 July 2020

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tax issues Key considerations for improving electronic tax administration in Nigeria Elizabeth Olaghere and Oyindamola Adewuyi 2020 Outlook - The Nigerian economy n December 2019, the Nigerian President, His Excellency, Muhammadu Buhari, approved an initial N10.59 trillion ($35billion) budget for 2020. The budget had an estimated deficit of N2.18trillion naira ($7.2billion) to be financed through foreign and domestic borrowings. The budget was prepared against the assumption that Nigeria’s benchmarked (Brent) crude oil would trade at $57 per barrel. Unfortunately, oil prices have been on a rapid decline (currently trading at about $20) due to the misalignment between Saudi Arabia and Russia on global oil pricing and fears over the global impact of the Coronavirus pandemic. This regrettably aggravates the existing budget deficit. Indeed, the explosion of the Coronavirus (Covid-19) pandemic has sent unprecedented shocks to the global economy, and the need to contain it comes at a significant economic cost. Countries must be willing to brace up for a new global recession that is predicted to be worse than the 2008 recession. The national response to the pandemic evolves daily as nothing is certain except the reality of an inevitable global economic shock. Like many other countries, Nigeria is navigating through unchartered economic territory and has had to adjust its budget to meet new economic realities. Remarkably, the revised benchmark price of $30 per barrel is still much higher than the current price. Nigeria is confronted with both the fall in oil prices as well as a potential reduction of income from taxation. It is, therefore, imperative that the tax collection system is agile and efficient enough to optimize tax compliance and collection. This may tackle some of the budgetary pressures on the Nigerian economy. But how prepared are we to leverage technology seamlessly? Electronic taxation in Nigeria The current state of play Over the past decade, there has been a strong global move towards digitalization. Most sectors are gravitating towards improving and transforming their business operations. Business functions and business processes are leveraging technology solutions to expand the use and context of digitized data. In most economies, tax authorities have also harnessed the benefits of digitalization and enhanced revenue collection through seamless adoption of technology. Some tax authorities in Nigeria are also adopting digitalization, as onerous manual processes are being replaced with more convenient methods for taxpayers through electronic services. For example, as part of the relentless digitization efforts of the tax authorities, the Federal Inland Revenue Service (FIRS), in 2017, announced the introduction of six (6) new electronic tax services (e-services)

for the convenience of taxpayers in Nigeria. These are: e-Registration: for the registration of new taxpayers with FIRS; e-Stamp Duty: for the payment of stamp duties on qualifying documents; e-TaxPay: presenting more modern payment solutions for all Federal Government taxes and levies through any of the following platforms – Nigeria Inter-Bank Settlement System (NIBSS), Remita and Interswitch; e-Receipt: for receiving and verifying e-receipts generated after taxes are paid through the e-TaxPay; e-Filing: for taxpayers to file their tax returns online via the website: https://efiling.firs.gov.ng; e-TCC: a platform intended to replace the physical application, issuance and verification of a company’s Tax Clearance Certificate (TCC). Other more recent efforts include the e-filing of transfer pricing (TP) declaration and disclosure forms as well as country-by-country reporting, introduced by the FIRS. State tax authorities are also advancing their automation efforts. Lagos State has made significant strides in digitalizing tax administration. Some of their efforts include auto-generated individual taxpayer IDs, which are generated online in very simple steps, using a newly developed self-service portal solution (LIRS e-Tax). The Lagos State Internal Revenue Service (LIRS) has also been accepting Personal Income Tax returns through online filing, since 2019. Certainly, there is no better time to evaluate the capabilities of a digital tax system than a period when social distancing and lockdowns are being enforced to curtail the spread of Covid-19. It has been three years since the FIRS introduced the e-filing platform allowing all taxes and levies collected by the FIRS to be filed online, yet companies still use the parallel paper-filing process. The requirement to physically action items contradicts the idea of an electronic system and negates efficiency gains from the digitalization of the process. Another challenge faced by users of the electronic tax platforms is the www.businessday.ng

significant downtime experienced during the peak of the tax filing or Tax Clearance Certificate (TCC) application periods. In recent times, some companies that attempted to download their WHT credit notes found that the portal was inaccessible for days. Such issues discourage taxpayers from relying on these online platforms. Taxpayers have also raised concerns about the security of logging in to the online portals, which use a simple password system. Security and confidentiality are critical to tax administration. Any potential weaknesses leveraged by hacks in the system would be costly to the reputation of the tax authorities and the trust of taxpayers. In addressing these challenges, the Nigerian tax authorities may consider evaluating lessons from other countries that have made significant advancement in their electronic tax administration. Some key considerations for effective electronic tax administration in Nigeria 1. Upgrade of data management systems: The unreliable nature of online tax portals is a major reason why many taxpayers, including nonresident companies, are forced to use the traditional paper filing, despite the inconveniences. In order to enhance taxpayer experience, the Nigerian tax authorities would need to upgrade their servers, to accommodate the volume of traffic anticipated from users of the portals. This will reduce the frequency of downtime experienced on the portals and attract more taxpayers to the convenience offered by the digitalization of the processes. 2. Smart use of data analytics and information management systems: Data analytics and access to real time transaction information can be a game changer in harnessing the benefits of a digital tax administration. For example, through issuance of electronic tax invoices for VAT purpose, tax authorities can form an expectation of tax due from a Company before the returns are filed. This could help curb under remittance of taxes and drive compliance. Kenya has a success story to tell in this respect, as the digitalization of

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VAT operations helped to boost their tax collection by more than $1 billion between 2016 and 2017. The FIRS is also moving in the right direction, as it recently introduced a VAT automation collection system. The platform, identified as VATrac, will enable seamless collection and remittance of VAT on relevant transactions covering branded shops, super stores, general supermarkets, standard restaurants and eateries. The platform will also enable direct audit/reconciliation of all VAT transactions to enhance tax compliance. The automated system was scheduled to be effective from 1 April 2020, as the approved channel for all VAT returns filing and payment processing for the affected businesses. However, the implementation seems to have been delayed, following the effects of the national lockdown. Nonetheless, the VATrac is a welcome development, equally underscored by FIRS’ assurance to taxpayers that the system will improve ease of doing business without disrupting the affected business’ operations. The FIRS should however create more awareness by sensitizing the public on the modalities for implementing the system as there are still some lingering issues on the operationalization of the system. In addition, the FIRS should ensure that data privacy measures are given priority. The United Kingdom (UK) has also steadily transformed itself into one of the most digitally advanced tax administrations by successfully reducing the need for filing annual tax return and creating a single view of a taxpayer’s affairs through a portal on the Government website. The UK tax authorities are also able to pre-populate personal tax returns with some information in their database; such as an individual’s earnings and taxes paid. Also, their payroll tax system, which was once largely reliant on annual returns, was replaced in 2013 by Real-Time Information (RTI); a solution that involves employers updating Her Majesty’s Revenue and Customs (HMRC), along the same timeline that they pay their employees. The aim is for HMRC to profile each employee accordingly and ensure that the correct amount of tax is collected from individuals at each pay point in the year, thereby reducing the tax gap. Globally, governments are using data analytics to help optimize tax collections and monitor compliance initiatives to advance overall efficiency. The exponential use of data analytics in real-time and predictive tax administration will revolutionize the Nigerian tax administration as data can be transformed into a powerful tool to monitor tax compliance. 3. Effective integration of tax database with existing database management systems: The tax authorities should consider leveraging existing data from banks and other government agencies, to expand the tax net. The Nigerian government is already taking a step in the right direction, as the amendments to Section 10 of the Companies Income Tax Act (CITA) now provides that every @Businessdayng

company must have a TIN, which should be displayed by the company on all business transactions with other companies and individuals, as well as corporate documents and correspondence with tax authorities, ministries and government agencies. More importantly, banks and other financial institutions are now expected to request TIN as a precondition for opening a bank account or for continued operation of existing accounts. Extending this initiative to individual bank accounts will create more visibility and transparency with unreported income earners, thereby minimizing tax leakages and expanding the tax net. It is, however, important that the tax authorities safeguard all data and information of taxpayers obtained from the integration process, to ensure that data privacy laws are strictly adhered to. 4. Enhanced tax audit and verification systems: A risk-based audit, linking the likelihood and nature of an audit to the taxpayer’s inherent risks, will be a time-saving tool for the tax authorities. Also, the e-filing platforms should be robust enough to enable taxpayers file their tax returns, receive assessment notifications and submit responses online. The e-TCC platform should enable taxpayers track the status of their TCC applications online, know when there is additional information required to update their records and further process their application. This should have an ‘upload’ function for support documents (like evidence of tax payments), required to ease the process. 5. Security of taxpayers’ data: Taking advantage of modern cyber security methods to address security challenges on the online platforms would help build taxpayers’ confidence in the system. The portals should use strong encryptions to protect taxpayers’ data. Strong passwords should be required to set up and log in to a taxpayer’s account online. Multifactor authentications (requiring more than just a username and password) for a taxpayer to access his account should also be available. Conclusion Government must promote a compliance culture developed through taxpayer education and simplified digital filing processes. Online tax services must be robust enough to function as an intelligent solution that can accommodate endto-end validation, combat tax fraud and police tax returns. The journey to fully implementing and reaping the benefits of a seamless e-tax administration system is neither short nor simple. There is no one-size-fits-all solution; however, an assessment of the above consideration will enhance the performance of our tax system in Nigeria and ultimately increase government revenue. Elizabeth Olaghere is a Senior Manager and Oyindamola Adewuyi is a Senior Tax Adviser in KPMG, Nigeria. The authors can be contacted at: Elizabeth.Olaghere@ng.kpmg.com & Oyindamola.Adewuyi@ng.kpmg. com respectively.

Wednesday 15 July 2020

BUSINESS DAY

AGRIBUSINESS

In association with

ag@businessdayonline.com

Agro players want exclusion of political farmers from zero-interest credit facilities Josephine Okojie

wing to the recent announcement by the Central Bank of Nigeria (CBN) of a planned integration of noninterest loan window on all its intervention programmes, particularly the Anchor Borrowers Programme (ABP) and the Targeted Credit Facility (TCF), agro players are demanding that the beneficiaries be exclusively genuine farmers through their associations. The farmers stated that impostors and politicians should be prevented from hijacking inter ventions meant for farmers to boost productivity and attain food security amid the COVID-19 pandemic. In a statement made available to BusinessDay, Uchegbu Chijioke Nicholas, chairman, Poultry A s s o c i a t i o n o f Ni g e r i a (PAN) - Imo State Chapter and secretary-general, All Far mers Ass o ciation of Nigeria Imo State chapter, appreciated the apex bank for th e p ro p o s e d ze ro interest-rate credit facilities for farmers.

“ T h e p ro p o s e d n o n interest credit intervention is a welcome development so far as it will target farmers in their areas of comparative advantage,” Nicholas said. “This should be driven by the commodity Associations in collaboration with Agricultural development programmes of each state. Unless we strengthen these Associations no funding will reach the target farmers,” he

added. To mitigate the impact of the COVID-19 pandemic on the agricultural sector, the apex bank and other stakeholders recently launched an initiative to increase food production by about 10 million metric tons within a year. The joint venture, in partnership with the private sector through some outgrower schemes, involves

Palm kernel processing gets boost as Golden Seed invest in nutcracker plant Josephine Okojie

i g e r i a ’s p a l m kernel processing has re ceive d a boost as Golden Seed Fats and Oils have invested in a 155,000-ton capacity nutcracker plant in the South-South region of the country. The firm is already into the production of edible oil and working with about 2,000 smallholder farmers under the auspices of the Nigerian Palm Producers Association and the Oil Palm Growers Association of Nigeria (OPGAN). Als o, G olden S e e d Fats and Oils have made a huge investment in power generation from palm oil shell. “Our 155,000 tons per annum capacity of palm nut cracker is largest in West Africa; 100,000 tons palm kernel shell plant; 15,000 tons of palm kernel oil and 20,000 tons of palm kernel cake,” said Lanre Sam-Akinkunmi, cofounder and chief executive

officer, Golden Seed. “Because of the capacity, we have begun the process of generating our energy to ease the burden on the community,” Sam- Akinkunmi said. Acknowledging that energy is a prerequisite for rural communities’ development and the achievement of national and international development goals, he added that the project would turn oil palm waste into sustainable renewable energy. He said oil palm produces large quantities of processing residues that have energy generation value. According to him, the utilisation and generation of oil palm biomass is accepted and offers benefits for rural areas related to job creation and infrastructure. He added that the project would use oil palm waste to challenge poverty, empower smallholder farmers in rural communities while impacting their livelihoods. He said the firm had done these in Ondo, Edo, and some www.businessday.ng

farmers and off-takers to ensure value chain development of the crops, boost in farmers’ livelihood through access to improved inputs. Lateef Sanni, a professor, and former deputy vicechancellor, Federal University of Agriculture, Abeokuta (FUNAAB), said that the proposed non-interest rate credit intervention is a laudable programme that has

the potential of helping over 2million smallholder farmers across the country. Sanni who is also the p ro j e c t m a n a g e r, I I TA , BASICS-II said that the noninterest facility would remove the aspect of five to nine percent of the economics of production from the fund to be loaned to farmers by the apex bank. “If farmers have access to quality seeds, agricultural inputs like herbicide and fertiliser and apply good agricultural practices, there is the assurance that such farmers would get a double yield of cassava, maize, and rice harvest,” he said. “Production cost will also be lowered, thereby, earning more income per hectare,” he further said. “There is no more excuse for farmers not to obtain credit facilities and engage themselves in more productive ventures. All the youth must be gainfully employed. Agriculture is our best option with a clear focus on job creation, sustainable livelihood, and rural development,” he added. The apex bank had disclosed that the job and fo o d increas e exp e cte d

from the scheme would be achieved through zerointerest inputs financing options such as fertiliser, seeds, seedlings, pesticides and other farm inputs in the 36 states of the federation and the Federal Capital Territory. It would run for one year and about two million hectares of land would be cultivated. Also, It will involve crop and animal production, and each farmer would cultivate one hectare. The priority crops and livestock targeted by intervention programme for the local market are rice, maize, sorghum, groundnuts, cowpea, cassava, millet, livestock, palm kernel, and cotton, while sesame seeds, h i b i s c u s, c o c o a, h i d e s, and skin; horns and hoofs are targeted for the export market. Godwin Emefiele, governor of CBN said during a review session on the ABP and the strategies for the 2020 agricultural wet season that the creation of a noninterest window was a result of appeals from stakeholders for farmers across the country to also be considered for funding under the noninterest facilities.

Leverage opportunities in agric value chains to create wealth, experts tell youths parts of Delta States where producers were majorly located to aggregate from them who produced in small quantities, saying that they were grouped to increase volume during off-take. Sam- Akinkunmi also noted that the firm was working at integrating its carbonisation stove to be launched in September to process palm kernel shells to charcoal to service the cement industry. The co-founder called on the government to push oil palm as the economic engine of rural Nigeria while noting that the act will have a multiplier effect on investments, consumption, and exports of the produce. To ke e p t h e p a c e o f growth in the industry, he said Nigeria needs to enhance productive capacities and boost investment flows in oil palm. He said there is a need to help producers to become more competitive by making improvements at all levels of the value chain.

Josephine Okojie

xperts in the agricultural sector have urged youths in the countr y to leverage opportunities created by the pandemic across various value chains to create wealth and generate employment. The experts, who spoke at a recent youth webinar with the theme ‘Rural Youth Engagement in Agribusiness –Post-COVID-19’ organized by Agrafair and supported by the Enterprise Development C e nt re ( E D C ) e x p re ss e d optimism that the country can create jobs through the sector if value chain opportunities are fully tapped by the youths. “There is no better time than now that young people should claim their place in the agricultural sector by leveraging opportunities in that space,” Peter Bankole, director of the EDC said. Bankole said that the EDC currently has an engagement with the Master Card

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Foundation to create 10million jobs in the country with agric value chain accounting for 70percent of it. He noted that adequate training will be provided and finance among others to ensure youths in the agricultural sector succeed in the space. Also speaking, Olowolabi Osinowo, managing partner, Kartios Farms while sharing his experience as an agripreneur said that the sector remains strategic as it can accommodate everyone. Osinowo urged youths to take advantage of the opportunities across the value chains by addressing challenges limiting players in the sector. He added that youths should seek knowledge on the area they have identified opportunities and also go for training while seeking mentorship. M o d u p a o l u O y e t o s o, founder and CEO, SmartFarm Nigeria said that since the sector is becoming more v i b ra nt, te ch n o l o g y a n d @Businessdayng

innovation is inevitable. She stated that youths need to adopt smart farming by leveraging technology to boost productivity. A c c o r d i n g t o h e r, manufacturers are now lo oking inwards for raw materials, thus, creating more opportunities for youths to leverage in the sector to create wealth for themselves. In her welcome speech, Njideka Anyanwu, president, Agrafair, Youth &Women in Agribusiness Advocate and host of the webinar said that her organisation advocates youth involvement with emphases on rural communities. “The strength of our nation is our youths and if we decide to ignore them, then we are sitting on a keg of gun powder that when it exploded, no one will be left untouched,” Anyanwu said. “Our goal is to see that youths regarding their tribe, colour, religion, sex, education, and cultural background realize their full potential,” she added.

Wednesday 15 July 2020

BUSINESS DAY

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

Yutong, Kojo Motors join FG in Covid-19 fight ..Distributes 41,000 face masks to road transporters

MIKE OCHONMA

MIKE OCHONMA Transport Editor

oncerned about the safety of road travelers and committed to complementing the efforts of the federal government in the fight against the ravaging coronavirus pandemic, Kojo Motors Limited, principal representatives and sole franchise owners of the Yutong range of high, medium and low capacity buses in Nigeria has embarked on the distribution of face masks and other safety materials to all the transporters using the Yutong commercial buses in the country. President Muhammadu Buhari had on June 30 this year lifted the ban on interstate travel outside curfew hours with effect from July 1, 2020 during a briefing by Boss Mustapha, chairman, Presidential Task Force (PTF) on Covid-19 and Secretary to the Government of the Federation (SGF) under the current phase of the gradual easing of lockdown ordered to curtail further spread of pandemic. In a telephone chat with BusinessDay, Chino Ogwumike, general manager, Kojo Motors Limited explained that distributing the 41,000 face masks to 15 transport companies in the country by his company being the franchise owners of the brand in collaboration with Chinese Yutong bus makers was to complement the commendable efforts of the federal government through the PTF towards the renewed battle against the corona-virus scourge. According to Chino Ogwumike, ‘’Kojo Motors and Yutong China prioritizes passengers safety. For us, no contribution towards containing the coronavirus disease is too much towards the protection of the lives of the traveling public’’. As the time of filing this report, not less than 15 transporters benefited from the 41,000 face masks largess. They include G.U. Okeke, Chisco, God Bless Ezenwata, Ifeanyichukwu, Landstar Express, E.Ekeson and Eddyson Motors.

FRSC explains traffic diversion during 3rd Mainland Bridge closure

President Buhari’s official car

Others are Delta Express, Welfare Transport, SD Express, Ifesinachi Transport, Efex Executive, Young Shall Grow and ABC Transport amongst others. It would be recalled that Kojo Motors Limited, sole manufacturers’ representatives and local assemblers of the Yutong vehicles in Nigeria joined other participating brands at the beginning of this year when the revamped Argungu Motor Rally was held. The rally which kicked off from the Eagle Square Abuja to the historic and ancient town of Argungu in Kebbi state covered not less than 1,000 kilometers across cities and states in the north. Various Yutong bus models were also on display at the last trade fair in Sokoto state. In June 2019, a new chapter was opened in the anal of commercial transportation history in Nigeria when Kojo Motors Nigeria Limited in collaboration with leading bus manufacturer, Zhengzhou Yutong

Bus Company of China, launched for the first time in any part of the world, the first ever 14-meter Yutong coach. The Yutong T139HDH coach was officially unveiled at a grand world launch ceremony inside the Civic Center, Victoria Island, Lagos. The resplendent luxury high capacity bus with a capacity for up to 63 passengers features the Mercedes Benz (OM 457LA) engine, Mercedes Benz AMT gearbox, Germany sachs clutch, Germany ZF automatic steering axle, airbag suspension System, etc. The bus features in-built DVR cameras for monitoring, onboard WiFi to ensure passengers remain connected and video-on-demand to also keep passengers entertained. Some other features of the Yutong T139HDH include the liquid crystal dashboard which is three times brighter automatic headlights that come on immediately it gets dark, electrically controlled

passenger curtain, a provision for USB ports for passengers and electrically controlled driver’s window and rear mirror. It also comes with automatic windshield wiper, seven colorful interior ambient lights as seen in the pictures below, AUS which prevents the bus from moving when passengers are getting in and out, an electronic braking device (EBD) and electronic stability program (ESP) and many more. Yutong brand of buses is manufactured by Zhengzhou Yutong Bus Company of China. The company has 80 percent share of the bus market in China. It also has a Global market share of 15 percent and has been the world’s largest bus maker for seven consecutive years. ‘’Kojo Motors and their manufacturers have a lot of confidence in the Yutong buses after subjecting them to extensive rough road tests across Nigeria’’. Chino Ogwumike, concluded.

iversion and safety precaution are imminent owing to the emergency rehabilitation on the third mainland bridge in Lagos, Boboye Oyeyemi, corps marshal, Federal Road Safety Commission (FRSC), Boboye Oyeyemi says. The federal government had announced plans to shut down the third mainland bridge for maintenance work from July 24, 2020 to January 24, 2021, with the first phase of the project covering the rehabilitation of the Oworonshoki bound lanes. The next phase of another three months for the second phase would cover the repairs of the Lagos bound lanes. Oyeyemi said other routes had been identified for motorists plying from Ikoyi, through Osborne as a result of the closure. He further said that motorists from Obalende on Lagos Island intending to use the bridge “are advised to navigate through Carter Bridge-IddoOyingbo-Adekunle-Herbert Macaulay way-Jibowu-Ikorodu road and connect their destination’’. Alternatively, he said, they should pass through Carter Bridge-Ijora Causeway (Ijora Olopa by LAWMA Office) Eko Bridge through Funsho Williams Avenue-Ikorodu Road for further transit. “Motorists from Lekki/Victoria Island intending to use the third mainland bridge are advised to use the Ozumba Mbadiwe road or Ahmadu Bello Way-Bonny Camp Independence Bridge (Mekunwen Bridge)-Onikan (by Zone 2 Police Zonal Headquarters)-Marina BridgeApongbon-Eko Bridge-Funsho Williams Avenue to Ikorodu and so forth. “For road users driving inwards Adekunle from Adeniji and from Lekki/ Ikoyi/Obalende/Lagos Island, they are advised to Link Cater Bridge-IddoOyingbo-Ebute Metta-Adekunle to advance further.’’ Oyeyemi advised motorists intending to use the bridge during the maintenance period to endeavour to go through the alternative routes identified. “The expected diversion for Phase A in the morning from 12 a.m. to 1p.m., motorists plying from Oworonshoki to Lagos Island traffic will only be on the Lagos island bound lane.

NRC working on passenger train restart amid Covid-19 MIKE OCHONMA

here health department of the Nigerian Railway Corporation (NRC) is presently working on a comprehensive corona virus safety protocol that would pave the way for the commencement of passenger train services across the country. Fidet Okhiria, managing director, Nigeria Railway Corporation told BusinessDay last Monday that, the safety protocols being worked on by the health department will may take two weeks. Okhiria said that, though NRC may not be generating revenue on its passenger train services, but

insisted that, the corporation is deeply concerned about the safety of commuters using the train serwww.businessday.ng

vice and will not compromise the health and safety of passengers for whatever reasons just for profit motive. NRC in March this year notified the traveling public that, it would suspend passenger operations as a result of the increasing cases of coronavirus disease in the country. NRC had in a statement signed by Yakub Mahmood, deputy-di-

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rector, public relations, explained that its operations would end on Monday, March 23, 2020. He said the board and management of the corporation said the decision was taken in light of the Covid-19 pandemic, which started in Wuhan, China, before spreading globally. The escalation of the disease forced many countries of the world to impose local and global restrictions on both land and air travels. Meanwhile, the NRC says it has to work on passenger coaches to ensure social distancing if its Mass Transit Train Services (MTTS) must resume operation. According to Jerry Oche, Lagos railway district manager, “We are @Businessdayng

working round the clock to see how we can maintain social distance in the coaches, if we must run and keep social distance. Nobody can tell when this Covid-19 will end; it has come to stay for some time and the government is already opening up the space gradually’’. ‘’Coaches of the mass transit trains service are to be worked upon to accommodate the possibility for social distancing, if we must resume and maintain social distancing,” he said. According to him, the Diesel Multiple Units (DMUs) trains are under repairs in case the need arises for the corporation to begin MTTS amidst Covid-19.

Wednesday 15 July 2020

BUSINESS DAY

MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

We deliver efficient, profitable and reliable freight process using technology - Sola-Usidame For decades, the freight forwarding industry in Nigeria has relied on outdated system that compels importers and exporters to deal with over 20 touch points scattered across the country, just to complete a single transaction. In this interview, Hio Sola-Usidame, lead partner, Oneport 365, shared how the company is leveraging on one-stop-shop technology to simplify shipping and freight forwarding business in Nigeria. AMAKA ANAGOR-EWUZIE captures his thoughts. Excerpt. You are about to launch a revolutionary freight forwarding solution. Tell us about it. he freight forwarding industry has been a traditional one and has endured considerable inefficiencies for decades. These inefficiencies include drawn-out quotation times, wasting productive hours on keeping track of contracts, emails and cargo location. There are layers of complexity added by various industry players on what should be a simple and transparent process. Another challenge that has a direct and measurable impact on the business bottom line is the additional or hidden charges that result in significant difference between initial quote received and final invoice. The OnePort 365 platform is optimised for ease and powered by technology. Through the digitalisation of processes, we deliver a transparent, efficient, profitable and reliable freight process. On the platform, exporters, importers and local traders can compare multiple competitive freight transport rates; book ocean shipping and inland transportation vendors; secure cargo insurance and customs brokerage services; manage all freight documentation and access an extensive network of short and long-term warehousing. It was built to simplify the unique challenges faced by importers/exporters from the African continent. We optimise trade operations for African businesses and ensure they attain success. We do this by facilitating improved freight planning and providing them with 100 percent visibility, optimal freight process automation and real-time monitoring of their cargo’s progress. Our solution is cloud-based and can be accessed anywhere which is a great advantage in the current work-from-home era.

down to the Southern region where we utilise the two major ports for cargo departure.

How long did it take to put this together and how reliable is the system? Prior to OnePort 365, we provided freight forwarding services to a wide

Hio Sola-Usidame

range of businesses as Logigrains. Logigrains has become a B2B brokerage firm. During that period, we experienced first-hand, inefficiencies of the traditional freight forwarding process. This formed the business and technical foundation of our platform. As a result, constructing a detailed product roadmap that streamlines and optimises the freight process was concluded in only a couple of months while building the platform took a quarter. We began operations as OnePort 365 in the fourth quarter of 2019. We are driven by the challenges of our clients. Our solution was designed and is backed by the technology to deliver on the promise of an optimised, profitable and reliable freight management process. In addition to tech, we have a dedicated team of experts that support clients at every stage of the shipment process. The system itself is reliable. However, traders and vendors alike will need to embrace a fundamental cultural transformation from man-

ual practices to digital processes in order to apply the full potential of our solution. How diverse is your vendor base? Are you looking to include more? Vendors on the platform cut across various touch points of the freight process. We have partnered with various trucking companies across the country; we offer full container load ocean shipping on all ocean vessel carriers; short- and long-term warehousing for storage and cargo consolidation. In line with our customer experience optimisation model, we will consistently look to include more vendors to deliver competitive rates and superior service. In terms of coverage, where does your strength lie? A significant proportion of our clients’ shipments of agro-allied raw materials and solid minerals originate from Northern Nigeria. We have a strong network of truckers and warehouses from the North

Your service is built around technology. How do you intend to achieve this considering the fact that Nigerians are still used to manual ways of doing things? The freight forwarding industry remained a traditional one globally for a very long time, I daresay for centuries. It remained so even in the midst of a radical digitalisation of almost every other sector. This is a relevant query and it speaks to the need for a cultural shift; a transformation of the freight forwarding culture that will be facilitated by a host of benefits. At OnePort 365, we have digitalised the customer process to provide a better customer experience including seamless quotation and booking processes with comprehensive online documentation. The platform also includes a dashboard with a holistic view of shipment locations and other shipment information. With these, customers gain competitive advantage by saving associated freight transaction costs and time; being able to track live data for better freight planning and quicker decision making. Automated processes also provide profitable growth opportunities for vendors. These benefits, we believe, will play a fundamental role in compelling the players in the sector to adapt quicker to a digitalised system. In India, a similar market, the industry is adapting to digital transformation at a very fast rate. We have faith in the ability of Nigeria and the rest of Africa to do the same, maybe at an even faster rate.

ing transported, especially via road, you would have to rely on the driver to know the location of the cargo. In a number of cases, the trucker provides inaccurate information on location and arrives at destination days later than expected. In worst case scenarios, the cargo and driver go missing. With our tracker, our clients can monitor shipments from anywhere in the world. Another example is lack of shortterm warehousing arrangements. The standard rental agreement for warehouses in Nigeria still remains yearly rent. A number of our clients are commodity traders, and seasonality is a key factor for them. An exporter trading, let’s say, sesame seeds four months a year and requires a consolidation warehouse in Kano. The question is why does he need to pay a year’s rent for a warehouse he only uses for four months? Our platform offers our clients access to over 40 warehouses across Nigeria, all on a pay as you use basis. Traders can rent these warehouses for short periods, even as short as a week. The competitive live rates we offer on the platform are very similar to what is offered globally. Except in our case, beyond convenience, the all-inclusive pricing helps thwart “hidden” charges.

How can you compare your product with what is being used in other continents? Our platform addresses inefficiencies common to the global freight forwarding industry as well as the unique process and infrastructure challenges we face in Africa. Example is our real-time cargo tracking system. When freight is be-

What impact, in your opinion, will the challenge of persistent traffic gridlock within Apapa and TinCan Island seaports have on your operation? A key issue remains that at least 80 percent of cargo in and out of Apapa is transported via road. This is one major contributing factor to the congestion. In order to manage the delay caused by the traffic gridlock, we offer intermodal inland logistics of cargo (by road, rail and barge) into the Lagos seaports. This helps us remain agile and provide the most efficient mode available to our clients. We are also optimistic about the Nigerian’s Shippers’ Council measures to enhance the efficiency of service delivery at the ports through digitalisation.

This, he said, was because oftentimes security agencies in their eagerness to arrest pirates, arrest the wrong set of people. “It is by working with the authorities that we would be able through our advocacy to give assistance to seafarers.” He called for support from donor agencies into making its centre the oasis of comfort for seafarers, as he urged industry players to always consider arbitration first before

going to court whenever they have disagreement that involves seamen. Dotun Makinwa, member and media coordinator for the MTSL said the initial plan of the mission was to celebrate the Sea Sunday, but it was expanded to a week-long activity. “The whole idea was to expose the travails of seafarers to the world and solicits corporation from all stakeholders in improving the lots of seafarers,” he added.

MTS Lagos canvasses support for seafarers on Nigerian waters SEYI JOHN SALAU

ission to Seafarers, Lagos (MTSL) has called on players in the nation’s maritime industry to give support to seafarers, who in the line of their duties face serious life threatening dangers. Speaking during the online Sea Sunday thanksgiving service held

in Lagos on Sunday to mark the end of the 2020 Mission Week, Adebayo Sarumi, chairman, Management Committee of MTSL, said the seafarer by nature of his work, carries the entire world trade on his back - the exchange of trade and services depends specifically on the ship and seafarers keep the ship moving irrespective of what is happening across the world. He said the week-long activity www.businessday.ng

was aimed at calling the attention of Nigerians to the plight and welfare of seafarers, who he considers to be itinerant tradesmen. On security along the Gulf of Guinea region, Sarumi said the Mission is collaborating with the Nigerian Maritime Administration and Safety Agency (NIMASA) and other agencies in the maritime industry to curb instances of piracy that posses threat to seamen.

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@Businessdayng

Wednesday 15 July 2020

BUSINESS DAY

news Diri stays as Supreme Court dismisses Alaibe’s suit Felix Omohomhion, Abuja

h e Su p re m e C ou r t has dismissed Timi Alaibe’s suit, challenging the candidacy of Duoye Diri in the February Bayelsa State governorship election. Alaibe had questioned the process that led to the emergence of Diri as the governorship candidate of Peoples Democratic Party (PDP) in the state. A five-member panel of justices of the apex court presided by Justice Olabode Rhodes-Vivour dismissed the appeal, on the grounds that the issue of election of party’s candidate is an internal affairs of a political party. Counsel to Alaibe, Ifedayo Adedipe, withdrew the appeal after the panel members brought his attention to the fact that the issues raised in the appeal were not about the primary election but about internal affairs of the party. The apex court had drawn the attention of the counsel to the grouse of the appellant which centered on the process that produced delegates for the primary

election and not the primary election itself. Quoting part of the processes filed by Alaibe, the panel held that he never claimed to have won the primary election and as such his matter was a pre-primary election issue that the court cannot delve into. Adedipe told the court: “My Lords, at this level, I can’t pretend not to see the handwriting on the wall in view of the position of the panel, which held that the case was an internal matter of the party. In view of my Lords’ observation and x-raying of the case, I apply for the withdrawal of the appeal.” Following his application and the non objection by respondents in the matter, the panel of justices of the apex court unanimously struck out the appeal. Alaibe, who had lost the suit at the Federal High Court, Owerri and the Port Harcourt division of the Court of Appeal, had in the suit challenged the participation of two delegates who voted in the primary that produced Diri as the party’s candidate.

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We have addressed concerns of striking doctors – Sanwo-Olu JOSHUA BASSEY

overnor Babajide SanwoOlu of Lagos State, Tuesday, at the Infectious Disease Hospital (IDH) in Yaba told journalists who asked question about the ongoing warning strike by doctors and health workers in the state that it was the responsibility of the government to cater for the welfare of all workers. “I also have the responsibility to ensure lives of all residents and their property are secured. This is paramount to us. The media would agree with me that in the last 412 days we have come on board, security and welfare of the people have been part of our guiding principles. And we will keep doing that as we go along. “However, disputes are also natural in human relationship. People might see things differently from the way others do see it. Personally, I am not upset about the warning strike embarked on by the Medical Guild. The action is not anything to grieve about; it is really all around communication and understanding. You will understand things when you see knowledge, and wisdom will also come in when you seek knowledge. These are key guiding principles. The issues of disagreement are very simple; it is because of lack of adequate communication,” the governor said. The first thing they said is that, we owe some workers hazard allowances. For the benefit of the public, our Government is the

first, in March, that started paying hazard allowance to our entire health workers, almost 20,000 of them. We increased the hazard allowance by 400 per cent and this is verifiable. Lagos is the first to do this. All the entire health workers - doctors, nurse, drivers, hygienists – got a 400 percent on hazard allowance as enumerated in their payment structure. Above that, we realised we needed to give additional incentive to frontline workers specifically engaged in the fight against COVID-19 pandemic. This is called COVID-19 allowance, which is outside their regular salaries and hazard allowances. The COVID-19 allowance is for over 1,000 medical officers and other auxiliary workers in all of our isolation centres. On this additional allowance, I do not need to consult with anybody. It is something I felt it was needed. Lagos is the first in the country to create this additional allowance and we are doing it not because we wanted to show off. We realised Lagos is the epicentre of the COVID-19 pandemic and I think we should show leadership and commitment to all our frontline staff. So, we created that allowance and paid it. So, as we go along, we needed to review our strategy, because our strategy at that time when we created the COVID-19 allowance was to contain the pandemic before it would get to the communities. So, we paid the allowance, which, in my view and everyone’s view, was roof-top. We actually paid people

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allowances that were like twice of their monthly salaries. We had thought COVID-19 is a pandemic we would resolve within one or two months. So, we created the allowance as motivation for everyone on the frontline. Disagreement on tax issues The other concern of the health workers is taxes. Tax is a component of the law of the federation. However, I have been hearing about excess tax since I was Commissioner for Establishment. Medical workers have been complaining that they are taxed more than necessary. At that time, the Lagos Inland Revenue Service (LIRS) chairman solved those problems. The salaries of medical workers have since been improved since that time. Maybe the issue now is that, they still feel their salary is small. Taxation and salary deduction is a function of the law and there are things that are allowable and things not allowable. Even at that, we said let’s further look at the salary and asked about the amount of tax can the Government place on the salary of a medical officer. At best, maybe it is N5,000, N7,000 or N8,000 they are talking about. Doctors’ residential quarters With all the best intention, we have two developers we have commissioned to build accommodation for health workers. Even if we start today, the minimum period we can deliver such project is 24 months. To build an accommodation is not something you can just

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tell me do within a short period. In this premises we are now (IDH), there is a plan to develop Doctors’ Quarters. There is an international company that has said they want to work with us to build a hospital. I told them what we urgently need is Doctors’ Accommodation. As I speak to you, the design of the project is coming up. Same thing is happening in Lagos State University Teaching Hospital (LASUTH); we have a private sector firm we are already talking to. We have agreed to build Doctors’ Quarters for the health workers, but it is not something that will happen in a day. Space has to be aligned, designs have to be done and funds have to be available. So, we said within 24 months, we will see what can be done. On shortage of medical personnel We have a standing order on replacement on exit of any health worker. The Health Service Commission does not even need my permission to do that. It has been our standing rule only for the health workers and teachers to replace upon retirement. Because of the current pandemic, there have been, in the last six months, about 600 to 700 general health workers – doctors, nurses, hygienists – that have had to retire due to statutory retirement age. We have since given approval for replacement. COVID-19 has kept all of us at home for the past three months. Over 65 percent of civil servant in Alausa are still at home.

26 BUSINESS DAY

Wednesday 15 July 2020

news Explainer:

Why Russian Coronavirus vaccine is far from ready DIPO OLADEHINDE

n Monday, Nigerians and the rest of the world were in jubilation after claims that Moscow’s Sechenov University has completed clinical trials of a vaccine for the coronavirus pandemic that has killed over 500,000 people globally. Russia’s Sechenov University Centre for Clinical Research on Medications head and chief researcher Elena Smolyarchuk, study data showed the vaccine candidate’s effectiveness, reported Russian news agency TASS on Monday. Smolyarchuk was quoted by the news agency as saying: “The research has been completed and it proved that the vaccine is safe while volunteers will be discharged on 15 July and 20 July.” “An in-ward treatment of the first group of volunteers, who were tested for the safety and tolerability of the vaccine, will end on July 15,” the TASS agency quoted Russian Defence Ministry as saying. The news from Russia was among the top trending news on Twitter with over 20,700 tweets in less than one-hour raising hope that the end has finally come to the deadly pandemic that has taken a large toll on the global economy. Need for caution However, the reports did not specifically mention that it was just the phase one trials that had been completed while phase two trials is expected to start on Monday July 13. Clinical development is a three-phase process. During phase one, small groups of people receive the trial vaccine. In phase two, the clinical study is expanded and vaccine

is given to people who have characteristics (such as age and physical health) similar to those for whom the new vaccine is intended. In phase three, the vaccine is given to thousands of people and tested for efficacy and safety. Need for Stage 2 and Stage 3 According to Sechenov University, on Monday, July 13, the second group of volunteers, who are tested for the efficiency and immunogenicity of the vaccine, will be injected with the second component of the vaccine against the coronavirus.” “The second round of trials will involve the injecting the vaccine amongst civilian volunteers as well. “Efficiency and immunogenicity (generation of immune response)” is tested in phase two of trials. It is in this stage that researchers try to see whether the vaccine is triggering the desired immune response in human beings, and what could be the suitable dose to generate this response,” Russia’s Sechenov University clarified. Large number of volunteers, usually numbering several thousands, is enrolled for the third phase in which researchers try to ascertain whether the immune response is able to fight the virus in real life situations. This process can take several months. As of now, even the success of phase two trials is not certain. It will have to be assessed after the completion of the trials. It is not clear whether the Russian candidate vaccine will go through phase three trials as well. Two months ago, a potential antiviral drug called remdesivir for the coronavirus reportedly failed in its first randomised clinical trial.

Precarious situation for private schools as COVID-19 takes toll on owners, teachers Churchill Okoro, Benin

s coronavirus disease (Covid-19) continues to take its toll on all sectors, one major area it has adversely affected is the education sector owing to the closure of both private and public schools. With no end in sight to the ravaging pandemic, stakeholders in the educational sector, particularly the private school owners and teachers are faced with unprecedented suffering amid continued closure of schools. The suffering had on May 25, 2020, prompted the Association of Private School Owners of Nigeria (APSON) to demand for stimulus packages from the government at all levels to help cushion the effects of the current lockdown on its members. The closure of educational institutions as part of measures to reduce the spread of the virus

by the government led to the sack of teachers as proprietors of these schools are trying to survive, and no longer have enough money to carry on with wages when there is no payment of school fees from the students. While the majority of teachers that weren’t displaced have not received salary since the outbreak of the disease, others are left with no choice but to fend for themselves through various means. T h e n o n - p ay m e n t o f monthly salary to employees has indirectly affected those who depend on them for a living as they have to face the untold hardship and the reality of the rigours of everyday life. Life as a teacher has not always been easy in this country; coronavirus has made it worse and it has been an upsetting experience for us, and I don’t pray it continues in the coming months, says Gabriel Iroghama,

a private school teacher. The father of two said since March he hasn’t received a dime from his workplace, and had to resort to bricklaying jobs so he can eke out a living. “I am one of those private school teachers affected. By the end of July, it will be five months since without salary. It hasn’t been easy for me, my children, wife and siblings. “My wife and I are teachers and we depend solely on wages that come from where we teach, but the pandemic has rendered us redundant, and I had to start molding blocks at construction sites, while my wife now sells bread. “I can’t blame the owners of the school; they are also trying to survive the pandemic. After Covid-19, it will be difficult for schools to return to normal,” he said. Lucky Ofure, a biology teacher in a private school, who corroborated Iroghama’s story said the last time he received

salary was in February, 2020. “I teach Biology in a private school in Benin and the last time I was paid was around February. What we are going through is beyond what I can explain. Reacting to the plight of the teachers, the National President of the Association of Private School Owners of Nigeria (APSON), Godly Opukeme said efforts to get a stimulus package from the Federal Government have been unsuccessful. Opukeme, noted that the stimulus package will go a long way to help private school owners stay afloat during and after the Covid-19. “Education sector is the most affected sector by Covid-19, particularly the private schools. While other businesses have opened for their daily activities, schools have not opened for academic activities and we can’t even get stimulus packages from governments.

L-R: Osagie Ehanire, minister of health; Victor Okafor, regional manager, RB Nigeria; Abdullahi Mashi, permanent secretary, Federal Ministry of Health, and Tahir Mohammed, managing director, Direct to Retail NG, during Dettol & Jik’s donation of hygiene products to the Federal Ministry of Health in Abuja.

Pension reforms: Edo tops states with Edo denies plan to borrow N20bn valid life insurance for workers “We have the highest external

BudgiIT, CISLAC call for legislative framework for management of recovered assets

Hope Moses-Ashike

n the back of far-reaching reforms by the Governor Godwin Obaseki-led administration in furtherance of its commitment to the welfare of workers, Edo State has been listed among three states and the Federal Capital Territory (FCT) with valid Group Life insurance cover for workers. According to the National Pension Commission (PenCom), Edo, Lagos, Kaduna and the FCT have been consistent with their subscription to the scheme while some other states are still at the preliminary stage of implementation. A 2020 Mid-Year Report by the Edo State Pension Bureau revealed that: “The sum of N80, 713,446.34 was paid as premium for 9,803 Edo State employees under the Contributory Pension Scheme (CPS), who are beneficiaries of the state’s Group Life Insurance cover. From the commencement of the CPS on 1st January 2017 till date, a total sum of N 81,169,724.24 has been paid to

Idris Umar Momoh & Churchill Okoro

families of 34 deceased employees of the State Public Service who were enrollees of the CPS.” The state government also expended over N4.3 billion in clearing the backlog of outstanding pension arrears owed about 3,128 pensioners in the state and another N25,047,472,632.77 in the monthly pension payment of 13,081 pensioners from November 2016 to May 2020. PenCom in a notice entitled: ‘Re: Compliance with Guidelines for Life Insurance Policy for Employees and Submission of Insurance Certificate for 2020,’ stated that it was the right of all employees in the public service of the Federation, Federal Capital Territory and states that have implemented the Contributory Pension Scheme as well as private sector, under Section 4(5) of the PRA 2014 to have life insurance policy taken on their behalf by their employers for an insured amount of not less than three (3) times their annual total emolument. www.businessday.ng

do State government has denied the allegation making rounds that it planned to borrow N20 billion from the capital market to finance the forthcoming September 19 governorship election in the state. The government’s denial came on the heels of a protest by members of the Joint Forces for the Defence of Democracy (JOFDES) yesterday in Benin, the state capital. The protesters had alleged that the state governor, Godwin Obaseki plans to obtain another loan of N20 billion from the Nigeria stock market. The protesters described the alleged attempt by the state government to borrow the money as a calculated plan to mortgage the future of the state. Osemwengie Isere, who led the protest to the Nigeria Union of Journalists (NUJ), Edo Council noted that Edo State has the second highest domestic debt profile in the country behind Lagos state.

debt in the entire South-South with an external debt profile of $257.92 million as at March 2020. “Apart from the few renovations of already existing infrastructure, we have not seen any landmark or gigantic projects the government has done with funds accruing to the state. “We therefore find no justification for the government’s desire to acquire another N20 billion loan in a few weeks to the governorship elections in the state,” he said. But reacting to the allegations, Crusoe Osagie, the special adviser to the state governor on media and communication strategy, accused the state leadership of the All Progressives Congress (APC) as the mastermind of the protest. Osagie, who denied the alleged plans by the state government to borrow such funds, noted that the people of the state would not be distracted by the antics of the opposition party and its candidate in the forthcoming September 19, 2020 governorship election in the state.

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udgIT Foundation and The Civil Society Legislative Advocacy Centre (CISLAC), Transparency International in Nigeria; two leading non-governmental organisations in the advocacy for openness, accountability and transparency in Nigeria have called for a comprehensive legal framework for the recovery, coordination, monitoring and utilisation of looted assets in Nigeria. The absence of a proper legislative framework for monitoring and managing recovered assets from proceeds of crime has created room for looting and mismanagement of recovered assets. The failure to enact the Proceeds of Crime Act (POCA), which would serve as a crucial legislative framework for management of recovered assets would undoubtedly create further complications. In recent years, Nigeria has received major foreign returns @Businessdayng

from looted assets including $311 million Sani Abacha loot from USA & the Bailiwick of Jersey returned in 2020; $322 million of Abacha loot from Switzerland returned in 2018; and $233 million Abacha loot from Lichtenstein returned between 2013-2014. However, it is difficult to ascertain Nigeria’s progress and level of success on utilisation of these recovered assets due to lack of transparency. With respect to funds recovered domestically, the issues are numerous including lack of public audits and a central register or database for all recovered assets, among others. While events surrounding the suspension of the EFCC acting chairman, Ibrahim Magu, are unfolding - reactions from his lawyer points to the fact that if there had been an existing central database for recovered assets in their different phases of forfeiture; be it interim or final forfeiture, some of the allegations against him would have been proven or debunked.

Wednesday 15 July 2020

BUSINESS DAY

POLITICS & POLICY Akpabio vs Joi Nunieh:

Let nothing happen to our daughter - Wike

Ignatius Chukwu

overnor of Rivers State, Nyesom Wike has joined the festering fray between Akwa Ibom-born Minister of Niger Delta, Godswill Akpabio and Rivers-born Joi Nunieh, immediate past acting managing director of the Niger Delta Development Commission (NDDC). Akpabio unilaterally removed Nunieh from the NDDC and replaced her with Bayelsa-born Daniel Pondei, a professor of virology from the Niger Delta University (NDU), but Nunieh has bounced back to lay damaging allegations against the minister at the National Assembly and in

television interviews. These have led to calls for the removal of the minister but the minister has questioned the stability of character of the woman and defended himself, saying he did no wrong. To make the accusations stick, Nunieh, daughter of first Ogoni lawyer, claimed that she slapped the minister at a guest house in Abuja to rebuff his advances on her. Fearing that the dispute may lead to harm as some top politicians easily resort to, the Rivers State governor, who was a top People’s Democratic Party (PDP) leader with Akpabio before the minister defected to the All Progressives Congress (APC), has issued stern warning against any thought of harming Nunieh. In a statement in Port

Marginalisation: Delta council boss urges group to embrace dialogue Francis Sadhere, Warri

hairman of Warri South Local Government Area, Michael Tidi has urged the Movement for the Development of Itsekiri Oil/ Gas Producing Communities (MDIOGPC) to embrace dialogue and jettison their threats to ground the oil and gas industry in the country over perceived marginalisation. Tidi explained in a statement made available to BusinessDay in Warri that executing the threat in the face of the global economic downturn occasioned by the coronavirus pandemic, would further deplete the revenue profile of the Federal and State Governments and subsequently reduce government’s financial muscle to address the genuine agitation. The Warri South Local Government Chief Security Officer, alluded to the Delta State Government’s position that the world has been watching the commendably peaceful protests by the Itsekiri group over the unfair deprivation of the Modular Floating Dockyard (MFD) for training of students of the Nigerian Maritime University and the legitimate demand for resumption of construction work at the Gas Revolution Industrial Park Project (GRIP) in Warri South-West Local Government Area. “The world knows it is unconscionable to deny the oilproducing people Oil Mining Licences (OML) and Marginal

Fields generously given to others to their exclusion,” Tidi said. While noting that the Federal Government has awarded the electrification project that will benefit about 50 communities in the Escravos area and work is ongoing, but need be expedited, Dr. Tidi stressed the need for sustained dialogue by members of the Movement for the Development of Itsekiri Oil/ Gas Producing Communities, MDIOGPC as well as other critical stakeholders from Warri South, Warri SouthWest and Warri North Local Government Areas with the Federal Government, so as to urgently fix issues of ocean surge, environmental degradation, land reclamation and lack of other basic infrastructures plaguing the oil and gas producing/riverine communities of the three Warri Local Government Areas. Recall that Gbaramatu Ijaw and the Itsekiri group, had reiterated their threat to ground Nigeria’s oil and gas industry over lack of assurance by the Federal Government to address demands such as facilitation of the abandoned age-long Omadino - Escravos Road and the Koko/Ogheye Road Projects as well as the need for the Federal Government to immediately halt the current process of bids for the 57 Marginal oil Fields, wherein they called for the doctrine of necessity to be invoked and applied to incorporate the interest of competent companies owned by Gbaramatu indigenes as well as Itsekiri Sons and Daughters from oil and gas producing communities. www.businessday.ng

Nyesom Wike

Harcourt Tuesday, July 14, 2020, the state government said it has viewed with concern, the recent

developments at the NDDC in which the name of their daughter, Joi Nunieh has been dragged into.

The statement signed by the Commissioner for Information and Communications, Paulinus Msirim, stated: “We hereby call on those involved in the ongoing investigations in the NDDC to ensure that Dr. Joi Nunieh does not suffer any harm in the course of their undertakings. ”We wish to state categorically that the Rivers State Government will never support any action that will prevent or jeopardise the laudable intentions of His Excellency, President Muhammadu Buhari, to positively reposition the NDDC and fulfil the yearnings and aspirations of the people of the Niger Delta. ”However, we wish to state that while we are not interested in identifying with the present unfolding

drama in the NDDC, we will not fail to protect our daughter from actual harm or perceived danger. ”The state owes it as a duty to protect her citizens from danger no matter their political affiliation and we cannot fold our hands and watch anyone harm her or indeed any Rivers citizen. We advise those involved in the present altercations in the NDDC to thread with caution in their actions and utterances.” Reactions are training the warning as some say the ball is in the court of the Akwa Ibom State government to declare security support to their own son, Akpabio. Many observe that Nunieh, the Rivers daughter, has an Akwa Ibom top aide, showing that when the going was good, states did not matter.

Buhari was wrong to retain Magu in acting capacity for five years - Ubani Iniobong Iwok

onday Ubani, a former chairman of the Nigerian Bar Association (NBA), Ikeja branch, has blamed President Muhammadu Buhari over the conduct of the embattled suspended former chairman of the Economic and Financial Crimes Commission (EFCC), Ibrahim Magu saying that he should not have been allowed to remain in acting capacity for five years. Buhari recently suspended Magu from office, while he is being probed by a panel led by a former president of the Court of Appeal,

Justice Ayo Salami (retd), for his actions while in office. He has been probed based on several allegations, many emanating from reports by the AttorneyGeneral of the Federation (AGF), and Minister of Justice, Abubakar Malami (SAN) and DSS submitted in 2016 and 2017 to the Senate. But speaking on the Magu’s probe in an interview with BusinessDay, Thursday, Ubani said Buhari’s refusal to remove him from office despite the DSS report indicting him and his non-confirmation by the National Assembly aided his conduct. According to him, “The moment he was not con-

firmed, the President should have acted and appointed someone else but doing nothing and keeping him in acting capacity for five years makes him feel that he is larger than life and was indispensable which also made him to do most of the things he did there. “You don’t allow an individual in a country of 200 million people to be in a position for five years, even when he was rejected by NASS; it is wrong when the law setting up EFCC did not allow that,” Ubani said. Speaking further, Ubani seeks the setting up of another agency to manage the confiscated assets in EFCC custody to prevent abuse by

the commission; stressing that Magu’s conduct was a setback to the current administration’s anti-graft war. “Yes, just like the previous chairmen of the agency, they always end up disgracefully because of certain acts they committed while ruining the agency. Part of which is the recovered loot. “Most times, there has always been an issue on the management of the recovered loot; I think we have to probably look at the laws setting up EFCC and then the power given to them on recovered loot, whether another agency should be in charge of recovered loot to avoid all this,” he added.

Supreme Court validates virtual court sitting Iniobong Iwok

he Supreme Court Thursday validated the virtual court sitting, saying that it was constitutional while it was a decision of the State Chief Judge on how they wish to operate proceedings in their states. A 7-man panel of the apex Court led by Justice Olabode Rhodes-Vivour gave the submission during the hearing of separate suits filed by the Attorneys-

General of Lagos and Ekiti States on the adoption of remote hearings by judges in their states. The panel ruled that virtual court sittings are presumed to be valid and not to be declared unconstitutional. Members of the panel dismissed the fear said to be entertained by many judges as to the constitutionality of remote hearings in the country. They maintained that the Chief Judges of the states that had issued practice

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directions to provide for virtual sitting when convenient had the duty to enforce the directive. The panel described the suits of both the Lagos and Ekiti states’ AGs as speculative as the suits did not disclose how virtual proceedings had injured the interest or right of anyone. The Lagos State AG, Moyosore Onigbanjo (SAN), and that of Ekiti State, Olawale Fapohunda, then withdrew the suits after members of the apex Court panel described the suits @Businessdayng

academic and speculative. In striking out the suit, Justice Rhodes-Vivour held that it was not unconstitutional. Lagos State had filed the suit to challenge the power of the National Assembly to amend Section 274 of the constitution which seeks including virtual proceedings in the Constitution. Ekiti State had urged the court to make an affirmative decision on the issue to remove the speculations and uncertainties being entertained about it by judges.

Wednesday 15 July 2020

BUSINESS DAY

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BUSINESS DAY

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Wednesday 15 July 2020

BUSINESS DAY

news Here are opportunities, risks in real estate investment along Lekki Regional Road CHUKA UROKO

he whole essence of providing infrastructure, especially roads, in any given location or neighbourhood is not only to give residents stress-free access to other important locations, but also to enhance the value of real estate assets within the area. This, according to government authorities, partly explains the decision of the Lagos State government to embark on the construction of the 8.5km Lekki Regional Road amid dislocation of economies and development projects across the globe by the rampaging coronavirus pandemic. The road, to be constructed on a 45-metre wide Right of Way (RoW) with, at least, three bridges and 15 culverts, experts say, presents both opportunities and risks to property investors who may wish to take advantage of the road expected to offer alternative route to the ever-busy Lekki-Epe Expressway.

A major opportunity the new road project offers investors is quick appreciation in property value. “The interesting thing is that the announcement of the construction of the regional road is already impacting positively on real estate in the Ajah and Elegushi areas. “More specifically, it is directly impacting on major new city projects happening on the new Lekki Central Zone and the new Lagoon District, both located within the Lagoon water body to the north of Lekki-Epe Expressway,” a developer confirms to BusinessDay, craving anonymity. Aramide Adeyoye, special adviser to Governor Sanwo-Olu on works, affirms, pointing out that a major beneficiary of this project is Gracefield Island in Lekki Central. Another gainer is Orange Island and Ostia, also located within the Lagoon District. Jaco Van Heeyl, an engineer and construction manager of Gracefield Island,

Nigeria’s e-commerce firms count losses amid rumoured spike during COVID-19 lockdown Jumoke Akiyode-Lawanson

hile e-commerce giants such as Amazon in America, Alibaba in China, ebay and others were cashing in, making revenues in trillions of dollars during the peak of COVID-19 pandemic, as a result of foresight and tenacity, e-commerce firms in Nigeria struggled to keep up with operations. They started counting their losses when the Federal Government decided to lockdown several states without classifying e-commerce delivery operations as essential service. E-commerce is a thriving global industry and has

become more popular in Nigeria with increased internet penetration and high numbers of smartphone ownership. In advanced climes where access to the internet and of course, literacy rate stand at appreciable level, e-commerce has become a lifestyle for many. Interestingly, before the COVID-19 pandemic, global retail sales, of which e-commerce makes up a major part, is projected to rise further to an estimated $27 trillion by the end of 2020. This sub-sector, although predominantly urban in Nigeria, was clearly hit hard when the Federal Government locked down e-commerce activities by not clearly classifying e-commerce companies

and their workers under ‘essential services’. Konga, one of Nigeria’s largest e-commerce companies, says its operations were stalled as its staff were treated as non-essential duty persons. “It took some explanation for our staff to be allowed to do their businesses during the lockdown. In some states, it was practically impossible as e-commerce delivery workers were either harassed or turned back from performing their duties,” a source at Konga tells BusinesDay. “Konga staff were either harassed or turned back from making deliveries. Delivery men were harassed while moving items inter-state. There were also reported cases of

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igeria’s financial market would be awash with liquidity as maturing Open Market Operation (OMO) bills, treasury bills (TBs) and bond coupon worth N359 billion hit the financial market this week. A breakdown of the inflows shows that the Central Bank of Nigeria (CBN) is scheduled to roll over maturing Nigerian (NT-Bills) worth N107.1 billion through a Primary Market Auction (PMA) on Wednesday. Similarly, inflows from both maturing OMO instruments (N146.9bn) and bond coupon payments (N105.0bn) will help to improve system liquidity. “Due to the huge level of maturity this week, we expect the NTBills PMA will be oversubscribed, leading to further drop in stop rates. We also expect the CBN to conduct OMO auction on Thursday to keep system liquidity in check,” Ayodeji Ebo, managing director, Afrinvest Securities Limited, says. The NTBills secondary market last week traded with mixed sentiments largely driven by depressed liquidity levels. At the start of the week, system liquidity opened negative at - N95.2 billion following the previous week’s CRR debit by the CBN. This

triggered mild selloffs as well as increased borrowings from the CBN’s standing lending facility, which further worsened system liquidity to (- N273.6bn) on Wednesday, according to a report by Afrinvest. However, sentiments slightly improved on Thursday as combined inflows from OMO maturities worth N 92.5 billion and a late CRR refund (about N300bn) ushered in trickles of demand on the short-term bills. Consequently, average yield across the yield curve ticked higher by 2bps Wo-W to settle at 2.1 percent with system liquidity closing at N128.3 billion long on Friday. Notably, most of the selloffs occurred at the belly of the yield curve: 29-Oct-20 (+47bps), 12-Nov-20 (+40bps) and 26-Nov-20 (+33bps) bills. At the bond market, bearish sentiments resurface as average yield advances to 8.0 percent on tight system liquidity. Against the backdrop of the liquidity squeeze, the rally in the domestic bond market also ended last week as average yield advanced 16bps W-o-W to settle at 8.0 percent. Specifically, selloffs were more pronounced on the short-dated bonds following gains on the 27-Apr2023 (+136bps), 15-Jul-2021 (+111bps), and 14-Mar-2024 (+84bps) instruments. www.businessday.ng

Continues on page 31 L-R: Ifeoma Ezedinma, director, regulatory services, Nigerian Shippers’ Council; Hassan Bello, executive secretary/ CEO, Nigerian Shippers’ Council; Klaus Lauren, country manager, APMT, and Emeka Ogbaje of APMT, after a meeting between the organisations in Lagos.

Maturing OMO, TBs, bonds worth N359bn to hit financial market Hope Moses-Ashike

harassment within some metropolis. Lagos was no exception. In Rivers State, not a single Experience Store was opened during the lockdown. Strict enforcement by the state government meant no e-commerce delivery man was allowed movement even within the metropolis,” the source says. Also, Jumia, a leading ecommerce firm in Nigeria, reveals that it saw significant drop in number of sales during the lockdown period. According to Massimiliano Spalazzi, CEO, Jumia Nigeria, the online retail store saw a drop in numbers at the beginning of the lockdown across many

Devaluation, rising Brent as litmus test for FG’s commitment to end subsidy … downstream players’ margins under more pressure DIPO OLADEHINDE

he gradual improvement in oil price and double currency devaluation are expected to test Nigeria’s current resolve to jettison fuel subsidy in the coming weeks. For the second time in five months, the Central Bank of Nigeria (CBN) devalued the naira by some 5.8 percent to N381 per dollar following the crash in oil receipts, Nigeria’s major foreign exchange earner. The CBN first devalued the official rate in March when it moved from N306/$, where it had been for over two years, to N360/$. For most market watchers, a double devaluation of Nigeria’s currency and a gradual increase in international oil price to $43 imply an increase in the landing cost, which would mean a looming further increase in the price of

petrol and might bring back narration of under-recovery, popularly called fuel subsidy. Although, Timipre Sylva, minister of state for petroleum resources, last week restated that the price of petrol would be determined in line with global best practices. However, steady recovery of oil prices and devaluation of naira will test the present government’s resolve on deregulation. For most downstream stakeholders, the statement by the minister is a familiar one, as petrol pump price was hiked from N87/litre to N145/ litre on May 11, 2016, and many assumed this signalled full deregulation. This wasn’t the case however as the subsidy regime was still in place. The exchange rate factored into the landed cost of fuel was between N280 and N285/$. “It is still impossible to tell if there is an end to the subsidy regime, as a return in the for-

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tunes of the crude oil market would mean an increase in petrol prices, which would be met with stiff resistance by consumers,” analysts at CSL Stockbrokers Limited, Lagos (CSLS), a wholly-owned subsidiary of FCMB Group plc say. “This is not really full deregulation yet. However, coming weeks will expose the true situation of things,” says Ayodele Oni, energy lawyer and partner at Lagos-based Bloomfield Law firm. “As long as they have a role to play in pricing, I don’t think it is completely deregulated,” he states. A sharp decline in global crude prices, triggered by the global pandemic, completely wiped out the subsidy via significantly lower landing costs, paving the way for a reduction in the pump price of petrol in mid-March. As international oil price settled around $42, Petroleum @Businessdayng

Products Pricing Regulatory Agency (PPPRA) announced a new petrol pump price band of N140.80 and N143.80 per litre for the month of July after initially fixing N125 per litre in March, which was reviewed downwards in April to N123.50. “We no longer fix prices. We use the average of the previous month’s market fundamentals to set the margins for the next 30 days, taking all market factors into consideration,” PPPRA’s general manager, Olasupo Agbaje, said last week while shedding lights on the new PMS pricing regime. Beyond the issue of higher landing cost, the deregulation of the downstream oil sector remains an important free-market reform required to ease pressure on government finances as well as boost profitability of the operators in the downstream sector.

Wednesday 15 July 2020

BUSINESS DAY

News Palm oil, poultry, packaging firms lead 25%... Continued from page 1

when patronage was usu-

ally high. Due to shortage of imported items, many Nigerians patronised the companies. Many of the companies struggled to meet demands and had to expand and engage more hands due to the increased patronage,” he said. Firms that benefitted from the tightened borders included PZ Wilmar, De-United Foods, Okomu and Presco, BusinessDay gathers. A senior manager of a vegetable oil producer, who pleaded anonymity, confirmed that his company expanded in 2019 due to tightened borders, but added that inability to clear goods early at the ports due to congestion prevented the company from creating more jobs. The Federal Government shut Nigeria’s borders with Benin Republic in August 2019 to curb smuggling of rice and petrol. This attracted internal and external opposition, as neighbouring countries said the decision was taken unilaterally. However, Nigeria’s poultry farmers said the border closure favoured them, forcing them to patronise local feedproducing companies and pushing Nigerian consumers to buy local poultry products. “The demand for local poultry products has increased quite much since the border closure. Buyers are visiting our farms daily to make orders which we have not experienced before,” Onallo Akpan, director-general of Poultry Association of Nigeria (PAN), told BusinessDay in October 2019. “We have sold all our boilers and have restocked for December. Lots of farmers are now expanding their production to meet up with demand, especially in December,” Akpan further said. Manufacturers in the plastics industry attributed increase in jobs in the subsector to shift in lifestyle. “What we are seeing is that more Nigerians prefer to buy food in plastic packs rather than eat in open places. Even in rural communities, the use of plastics is becoming increasingly popular,” a plastic manufacturer said. Euromonitor International, a research firm, said in its November 2019 report that the packaging industry growth was fuelled by modern retail stores springing up across the country. It said open markets, kiosks and independent small grocers were the leading distribution channels for packaged food in Nigeria, and together dominate sales. “Modern grocery retailers are seeing a strong growth in share, with convenience stores, supermarkets and hypermarkets all expanding in number,” Euromonitor International said. Nigeria’s unemployment rate has worsened since 2014,

rising from 6.75 percent to 23.1 percent in the third quarter of 2018. The National Bureau of Statistics (NBS) has not released job numbers for nearly two years, forcing analysts to speculate. The outbreak of Covid-19 is likely to worsen general unemployment, with the Lagos Chamber of Commerce and Industry (LCCI) projecting that cost-cutting measures adopted by firms today might see unemployment rate surge to 40-45 percent by end of 2020. “Unemployment rate is expected to increase drastically post-lockdown except government takes urgent steps to support business owners towards surviving and ensuring business continuity,” Muda Yusuf, director-general, LCCI, said. The already-stressed Nigerian economy suffers from high poverty rate with almost 50 percent of the population in extreme poverty. Inflation rate is rising, reaching 12.40 percent inJune2020,meaningthatNigeriansarespendingmoreonbuying food and other necessities. Jobs have been on the decline in the manufacturing sector since 2016, when 27,749 jobs were created by MAN members. The number fell to 22,729 in 2019. Job numbers will be worse in 2020, as many manufacturers are not open or are scaling down production owing to Covid-19, MAN said. “Many companies are not in production today,” said Ambrose Oruche, acting director-general of MAN. “There are high job losses already and nothing much will happen until we are back to normal,” he further said.

L-R: Babajide Sanwo-Olu, governor, Lagos State; Akin Abayomi, commissioner for health, Lagos State; Giscard El-Zoghbi, chief operating officer, IHS Nigeria Limited, and Segun Akintemi, CEO, Page International Financial Services Limited, during the commissioning of a state-ofthe-art 36-Chamber Morgue, donated by IHS at the Infectious Disease Hospital, Yaba, Lagos, yesterday.

Amid fraud allegations, students on NDDC... Continued from page 1

scheme. “I have not been paid my stipend since last year December. I have no doubt in my mind that the fund is committed to our welfare here. This is why I am pleading unto you to help me remind the people in

charge to help ease my suffering here,” one student wrote to an official of the PTDF pleading for payment. “My suffering here has taken a new dimension leaving me with zero chances of survival. As you may know, I have been surviving by borrowing and at this point nobody wants to lend me money because of my inability to pay my initial debt to them. Please I really need help financially and I would really appreciate any assistance extended,” the student wrote.

Here are opportunities, risks in real estate... Continued from page 30

had earlier been reported as saying that Gracefield would benefit greatly from both the proposed Lagoon Highway and the Lekki Regional Road but, in his view, the Regional Road was of immediate importance. A recent independent market survey shows a 25-percent increase in value on Gracefield Island within Lekki Central where, on completion, the Lekki Regional Road brings commuters within 10 minutes from Ikoyi and 5 minutes from Lekki Phase 1, on a road which, the developers say, will be devoid of social distractions. But concerns remain on the probable and possible risks investors may face in that corridor. Idris Salako, Lagos State commissioner for physical planning and urban development, has already warned developers to keep away from the RoW of the proposed Lagoon Highway. This means that land buywww.businessday.ng

ers and estate developers have to be cautious enough to do their due diligence well before committing money on any property—landed or built-up in that corridor. “The construction of that road, arguably, makes this corridor a very attractive investment destination, but investors have to be wary; anybody who buys within the roads RoW is sure to lose his investment,” the developer warns. Some developments in that corridor such as the Cowrie Creek Estate are already affected by the road’s RoW and property owners in that estate estimate that about N10 billion could be lost to the road construction. Other developments may suffer the same fate, as Salako observes that the corridor had been encumbered by physical developments, including shanties, which negate the objectives for which the regional road was conceived, regretting that some estates, buildings and structures had

Hundreds of students on scholarship from the Nigerian government have been stranded abroad since 2018. Their tuition and living expenses have been unpaid and officials have often failed to provide an explanation. Many now survive on the kindness of strangers and support from family members. Their plights have become worsened by the outbreak of the coronavirus pandemic with schools abroad forced to shut down. Many are facing deportation because they can no longer pay for accommodation. Some have been sent away from campus and are now living with friends. Kalu Otisi, spokesperson of the PTDF, did not respond to BusinessDay enquiries about the agency’s plans for the students stranded abroad.

encroached on the RoW of the road in Lekki axis. Citing Section 21(1) (a) of Lagos State Urban and Regional Planning and Development Law, 2015, which bestows on him the power to revoke otherwise approved building layouts, the commissioner announced the revocation, in part, of a section of Elegushi Chieftaincy Family Layout that falls within the regional road alignment. An earlier report by BusinessDay quotes the commissioner as saying that “Lagos State granted title to land measuring about 500 hectares and issued layout approval (1991) wherein four major roads were recognised. “These are Coastal Road and Lekki-Epe Expressway, Southern part of Elegushi Land, Regional Road and Lagoon at the Northern part of the Elegushi layout, all running parallel to one another. The roads have been envisioned to engender social-economic and transportation development of the state.”

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The scholarship programmes instituted under the government of former President Goodluck Jonathan ran into troubled waters when in 2015, he lost the general elections and Muhammadu Buhari came into power and the funding became infrequent. The PTDF is a Federal Government agency with the mandate of developing indigenous human capacity and petroleum technology to meet the needs of the oil and gas industry. It routinely invites applications from Nigerians for Overseas MSc and PhD Scholarships to institutions under its UK strategic partnership initiative. Successful candidates were awarded scholarships to study in the UK. Under the scheme, candidates are invited to apply through PTDF to specific programmes at the partner institutions in any of the coun-

tries. The award includes the provision of flight tickets, payment of health insurance, payment of tuition and bench fees (where applicable) as well as the provision of allowances to meet the costs of accommodation and living expenses. Following concerns over the spreadofcoronavirusinNigeria, the management of the PetroleumTechnologyDevelopment Fund (PTDF) in February suspended the selection interviews fortheawardof2020/2021Overseas Scholarship. The suspension is a precautionary measure to limit the risk of exposure to the virus by shortlisted candidates, interview panel and staff of the Fund. A new date for the continuation of the exercise will be announced in due course and all affected candidates will be duly notified of further developments regarding the exercise.

Nigeria’s e-commerce firms count losses... Continued from page 30

states in Nigeria as a result of the COVID-19 pandemic. However, the company stabilised at the beginning of May, with the ease of lockdown, and saw a spike in number of purchases for essential goods such as groceries and household items, Spalazzi notes. Speaking at a webinar to announce Jumia’s plans for its eighth-year anniversary with members of the media, Spalazzi states, “We definitely had challenges due to the COVID-19 lockdown, currency devaluation and prices of goods increase in this market. However, with our contactless delivery initiatives, contactless payment via Jumia Pay and partnerships with several companies that produce consumer goods, we saw more new and old customers come on our platform to shop in safety when the lockdown was eased on the 4th of May 2020.” Stakeholders say that Nigerian government must recognise that for its economy to grow, trade including ecommerce in this time of Forth Industrial Revolution should @Businessdayng

be encouraged, especially as the few e-commerce companies still in operation are already being squeezed by several challenges including logistics, dealing with fake or substandard goods, consistent currency devaluation, among other issues, which led to the likes of Deal Dey, Olx, Kaymu and others to close shop. While Amazon’s Jeff Bezos’ net worth was estimated at $143 billion, a surge by more than $28 billion from last year, as he profited largely from the coronavirus pandemic when shoppers turned to online shopping rather than visit physical stores, in Nigeria, there were cases of security men delaying delivery for days by ‘impounding’ vehicles and keeping them for as long as they wished. Delayed delivery makes nonsense of e-commerce. One of the unique selling points of online shopping is prompt delivery of goods. Once purchased goods are delayed, the suspense dies and so does the utility of the goods. Unfortunately, this was what Nigeria’s e-commerce companies suffered during the lockdown.

Wednesday 15 July 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

UK orders ban of new Huawei

Boris Johnson’s government says existing kit must also be stripped from 5G networks by 2027 GEORGE PARKER, NIC FILDES AND HELEN WARRELL

uawei, the Chinese telecoms company, is to be banned from supplying new equipment for the UK’s 5G mobile phone networks from December 31, in a big U-turn by Boris Johnson’s government. The UK prime minister’s National Security Council agreed on Tuesday that existing Huawei equipment must also be stripped from 5G networks by 2027 — a slower timetable than that demanded by some Tory MPs. Just hours before the decision was announced John Browne, the chairman of Huawei’s UK board, said he would step down from the position in September. Lord Browne, who ran BP between 1995 and 2007, spent five years as Huawei’s first independent chairman. The NSC, attended by senior ministers and security chiefs, concluded that further US sanctions on Huawei, introduced in May, meant that the Chinese company’s equipment could no longer be fully trusted for use in Britain’s new telecoms infrastructure. Cu l tu re s e c re t a r y O l i ve r Dowden admitted the ban on Huawei could delay the full rollout of 5G networks in Britain by two years and add hundreds of millions of pounds to its costs. The UK’s full-fibre broadband operators will also be given two

UK intelligence chiefs had warned Boris Johnson they could no longer be confident that new kit used by Huawei was secure © Zuma Press/Alamy

years to “transition” away from the purchase of Huawei equipment. However, the Chinese company’s existing kit used for 2G, 3G and 4G networks is deemed secure and will not have to be removed. The 5G decision represents a significant strategic victory for US President Donald Trump, whose administration has been urging Mr Johnson to kick Huawei out of Britain on security grounds for months. Mr Trump’s latest sanctions would stop Huawei using US-made chips in its equipment, raising the prospect that the company would

have to rely on China-made alternatives. Having previously advised ministers that the risk from Huawei could be mitigated, UK intelligence chiefs warned Mr Johnson that they could no longer be confident that new kit used by the Chinese company was secure. The decision to ban the use of new Huawei equipment came six months after Mr Johnson infuriated Washington by agreeing that the company could take up to a 35 per cent share of the 5G market. Officials insisted the decision

was taken on “purely technical” grounds and was not the result of pressure from the White House. One official said the US sanctions on Huawei had been a “gamechanger” for security reasons. The Tory China Research Group, including former party leader Iain Duncan Smith, had urged Mr Johnson to remove Huawei from the 5G network by 2023, a timetable deemed unrealistic in the telecoms industry. A slower stripping out of Huawei will be less disruptive, but the change of tack by Mr Johnson

will nevertheless cause a further deterioration in strained relations between London and Beijing. Mr Johnson angered Beijing this month by confirming the offer of citizenship to up to 3m Hong Kong citizens with British overseas passports; the Foreign Office estimates up to 200,000 could come. Chinese investment is also widespread in the UK economy, from train companies to the nuclear power sector. Mr Johnson will now wait to see what kind of retaliatory measures Beijing might take. China’s ambassador to the UK said this month that Britain’s actions were being scrutinised for signs it could not run its foreign policy independently of the US. “The China business community are all watching how you handle Huawei. If you get rid of Huawei it sends out a very bad message to other Chinese businesses,” Liu Xiaoming said. “We want to be your friend. We want to be your partner. But if you want to make China a hostile country, you will have to bear the consequences.” Huawei UK’s Ed Brewster described the British government’s decision as “disappointing”. “We remain confident that the new US restrictions would have not have affected the resilience or security of the products we supply to the UK,” he added. “Regrettably our future in the UK has become politicised, this is about US trade policy and not security.”

BlackRock punishes 53 companies over climate inaction World’s biggest asset manager is under scrutiny for its role in tackling global warming ATTRACTA MOONEY

lackRock has punished more than 50 companies from US oil major ExxonMobil to Swedish carmaker Volvo over their lack of progress on tackling global warming, six months after it warned of huge investment risks from climate change. Larry Fink, chief executive of the $6.8tn investment house, said in January that BlackRock would get tough on groups that were too slow to take action on climate change, announcing a host of measures from dumping some coal holdings to using its votes at annual meetings to signal dissatisfaction with how businesses were dealing with global warming. The move came after BlackRock faced repeated accusations that it had failed to take meaningful action on environmental issues, despite public declarations about the risks of global warming. In a report released on Tuesday, the New York-based group said it had placed 244 companies “on watch” for insufficient progress on climate issues. It said it took

voting action at the annual meetings of 53 companies (22 per cent) over climate issues so far this year, largely through voting against the re-elections of directors. Companies punished included German carmaker Daimler, US coalminer Peabody Energy and Fortum, the Finnish electricity company. BlackRock said the remaining 191 companies “risk voting action in 2021 if they do not make substantial progress”. www.businessday.ng

“Our approach on climate issues, in particular, is to focus our efforts on sectors and companies where climate change poses the greatest material risk to our clients’ investments,” the group said. BlackRock was criticised this year for failing to support several climate-change resolutions, including at Santos and Woodside Energy, the Australian oil companies. At Santos and Woodside meetings, resolutions to set targets

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in line with the Paris agreement, which aims to limit global temperature rises, received unprecedented support from shareholders. However, BlackRock voted against the proposals. It also did not back a climate change resolution at JPMorgan, the US bank, which would have passed with the asset manager’s support. BlackRock has historically outsourced its decision on how to vote at some banks, including JPMorgan, because its largest shareholder was PNC, a bank. PNC sold its stake in BlackRock in May. In its report, BlackRock said it supported climate resolutions at several companies, including at Exxon, Chevron and Ovintiv, the energy companies. At Woodside, BlackRock said that while it “agreed with the intention of the shareholder proposal”, it was concerned that the resolution required the company to calculate Scope 3 — or customer emissions — by 2021, a move it did not believe was appropriate in such a short timeframe. “We expect Woodside to continue to review and set ambitious @Businessdayng

emissions reductions targets as the natural gas sector improves its ability to understand and manage Scope 3 emissions,” BlackRock added. Dan Gocher, director of climate and environment at the Australasian Centre for Corporate Responsibility, a shareholder advocacy group that filed the resolutions at Woodside and Santos, said that while BlackRock was at odds with many investors over its lack of support for climate resolutions, its willingness to vote against directors over climate issues was good news. “That’s an interesting use of their power. The willingness to vote against directors is something other investors aren’t willing to do,” he said. In his January letter, Mr Fink said global warming represented a risk to markets unlike any previous crisis. “Even if only a fraction of the projected impacts is realised, this is a much more structural, longterm crisis,” he said. “Companies, investors, and governments must prepare for a significant reallocation of capital.”

Wednesday 15 July 2020

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Wall Street edges higher as earnings season kicks off

Investors lodged in ‘zone of uncertainty’ while US states grapple with coronavirus HARRY DEMPSEY AND HUDSON LOCKETT

all Street stocks inched higher on Tuesday, as investors assessed an opening foray in a quarterly earnings season that will guide them on the pace of the US economic recovery. The S&P 500 was up 0.5 per cent at lunchtime in New York as gains for energy stocks offset a mixed start to earnings season for the Wall Street banks. The tech-weighted Nasdaq was up about 0.2 per cent. Wells Fargo slashed its dividend by 80 per cent after sinking to a $2.4bn loss, while Citi said its net income for the second quarter came in at $1.3bn, down 73 per cent from the year before, citing a “deterioration” in the economic outlook. JPMorgan warned of “significant uncertainty” ahead and revealed almost $10.5bn of loan loss provisions in the second quarter. “Equities are navigating through a zone of uncertainty, because earnings visibility remains elusive and fresh spikes of Covid-19 are occurring in the majority of US states, delaying and even rolling back economic reopening,” said Terry Sandven, chief equity strategist at the wealth management unit of Minnesota-based US Bank. Europe caught up on Tuesday with Wall Street’s late losses a day earlier, with the continent-

wide Stoxx 600 and Frankfurt’s Xetra Dax both shedding 0.8 per cent. London’s FTSE 100 ended little changed. Investors are bracing themselves for a grim US earnings season, with S&P 500 companies expected to report a 45 per cent plunge in quarterly profits. That would be the biggest drop since the depths of the 2008-2009 financial crisis. Elizabeth Geoghegan, fixed income portfolio manager at Mediolanum, said it was notable that stock markets had risen so high while the yield on US 10-year Treasuries had been depressed. Typically, low medium-term bond yields point

to muted expectations for future economic growth. On Tuesday, the 10-year Treasury yield slipped a further 0.03 percentage points to come close to 0.6 per cent, as investor demand for the haven asset remained strong. “It is a sign of how cautious investors are about this rally — they are participating in this uptick but they’re not willing to let go of their haven Treasury assets,” she said. The muted activity on Tuesday follows a turbulent session in New York on Monday, when the S&P 500 ended almost 1 per cent lower after briefly crossing into positive territory for the year.

That decline was spurred in part by California’s decision to join Texas and Arizona in rolling back its economic reopening. Gavin Newsom, governor of the most populous US state, ordered the closure of bars, cinemas and dine-in restaurants in an effort to contain a sharp rise in Covid-19 cases and hospitalisations. The Cboe’s Vix index of S&P 500 volatility, known as Wall Street’s fear gauge, was elevated above 30 on Tuesday following the sharp declines. The closely watched Bank of America survey for July revealed that fund managers viewed tech stocks — which fell sharply on Monday — as the best short

position to hold, given their high valuations and stretched performance. Chris Beckett, head of equity research at Quilter Cheviot, said that valuations of tech companies were reasonable, considering they had prospered from the shift towards working from home and ecommerce during the pandemic. Latest coronavirus news Follow FT’s live coverage and analysis of the global pandemic and the rapidly evolving economic crisis here He added that outlooks provided by companies during earnings season would help direct stocks, since investors already expected second-quarter results to be awful. “We get better access to company management at a point where they feel more able to give a clear steer of what current trading looks like and what the future looks like.” Equities in the Asia-Pacific region recorded broad losses. China’s CSI 300 index of Shanghaiand Shenzhen-listed stocks shed 1 per cent after the US vowed on Monday to adopt a tougher stance against China’s territorial claims in the South China Sea. Offshore investors shifted out of Chinese stocks at a record pace with net sales of Rmb17.4bn ($2.5bn) via stock connect programmes between Hong Kong and mainland bourses on Tuesday, according to Financial Times calculations based on Bloomberg data.

Investors yank $500m from super-leveraged US tech fund Record weekly outflow from ETF known as ‘TQQQ’ suggests wariness after momentous rally RICHARD HENDERSON

n exchange traded fund designed to amplify the moves of red-hot US tech stocks has just suffered its worst ever week of outflows, suggesting that investors are growing wary of highly stretched valuations. Investors pulled $491m from the ProShares UltraPro QQQ ETF last week in the biggest weekly withdrawal since the ETF launched a decade ago, according to data from Bloomberg. The ETF — known by its ticker TQQQ — is a risky investment, aiming to use leverage to deliver three times the daily performance of the Nasdaq 100 stock index, which tracks the biggest companies listed on the techheavy market. The outflows failed to make

much of an impression on the fund’s assets, which closed the week at a record $7.1bn, propelled by a strong performance for stocks including Apple, Amazon, Alphabet and Tesla. The fund’s holdings are up about two-thirds in value from the start of the year, roughly three times the return of the benchmark. But the redemptions from the UltraPro QQQ fund — the largest leveraged ETF — could be a sign that investors are easing out of tech stocks after a momentous rally, said Ben Johnson, head of ETF research for Morningstar. The tech-focused benchmark includes mega-cap stocks that have acted as haven assets during the Covid-19 crisis and represent more than a fifth of the US stock market — the highest proportion on record. www.businessday.ng

“We’ve seen quite a run in the Nasdaq 100 in recent months and it’s likely time for many to consider locking in the gains,” he said. On Monday tech stocks were the hardest hit in a rapid afternoon sell-off after California rolled back most of its economic reopening measures to contain the pandemic. Such an announcement would typically trigger a shift toward tech stocks, “but in this case they felt the biggest pain — I found that telling,” said Jim Tierney, chief investment officer of US concentrated growth at AllianceBernstein. “Maybe people are saying they’ve run pretty far and maybe investors are taking some profits.” The Nasdaq 100 is up 21.4 per cent for the year, compared with

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a 2.3 per cent loss for the S&P 500. The price-to-earnings ratio, a popular yardstick of valuation, has also widened between the two indices. Investors are paying 33 times the trailing year’s profits for companies in the Nasdaq 100 compared with 21 times for stocks in the S&P 500 — a gap that has nearly doubled since the start of the year, and is at its widest since December 2007. “It’s very much about priceto-earnings multiple expansion rather than earnings growth,” said Mr Tierney. The year’s best performer in the Nasdaq 100 is Zoom, the video conferencing group that has become a market favourite after a surge in use of its product during lockdowns. The stock has nearly tripled in value. Tesla, the second-best performer, is @Businessdayng

up more than 250 per cent for the year. ETFs that use borrowed money to magnify returns have drawn criticism in the past. Carl Icahn, the billionaire investor, has repeatedly taken aim at such instruments over the years, saying they have helped turn the stock market into a “casino on steroids”. A “short” version of the ProShares Ultra QQQ ETF — designed to deliver three times the inverse daily performance of the Nasdaq 100 — had $261m of inflows over the week, the most in more than three months. “This category of funds is not intended to serve investors with a long-term orientation,” said Mr Johnson of Morningstar. “It’s about capitalising on short-term moves in the market.”

Wednesday 15 July 2020

BUSINESS DAY

news

2020 WASSCE Exam: Order partial reopening of schools, Reps tell Buhari MARK MAYAH

ouse of Representatives has called on President Muhammadu Buhari to order a partial reopening of schools to allow pupils sit for the 2020 West African Senior Secondary School Certificate Examination. The house made the call at the plenary on Tuesday following a unanimous adoption of a motion moved by a member, Nnolim Nnaji. The committee on basic education and services had earlier on Friday faulted the decision by the Federal Government to suspend the plan to partially reopen schools for pupils in final classes to take external examinations. The committee had particularly criticised the decision

to disallow Nigerian students from sitting for WASSCE to be conducted by the West African Examination Council for the 2019/2020 academic session. Schools at all levels have been shut since March due to the Covid-19 pandemic. The Presidential Task Force (PTF) on Covid-19 had in June said the Federal Government, in what it called “safe reopening of schools,” approved the resumption of students in graduating classes, including primary 6, junior secondary school 3 and the senior secondary school 3. In approving the resumption of graduating classes, the government said water must be provided in schools for handwashing and both pupils and teachers must wear face masks while observing social distancing.

AXA Mansard encourages investment culture in Nigeria through Money Market Fund SEGUN ADAMS

XA Mansard Investments Limited, a multiexpert asset management company within the AXA Mansard Group, a leader in financial protection and wealth management, encourages the use of its Money Market Fund as a savings tool in navigating the current economic downturn intensified by the pandemic. The AXA Mansard Money Market Fund is a large pool of funds from different similar minded investors that is invested in money market instruments which include treasury bills, fixed deposits and commercial papers. Asides the fund being managed by a team of experienced professional asset managers, customers also enjoy competitive returns on savings, can track daily interest with ease, have access to prompt liquidations without

penalties and can transact online and via USSD. According to Deji TundeAnjous, CEOr at AXA Mansard Investments, “We are fully digital, empowering our customers to access important savings and investment opportunities conveniently. We also recently collaborated with Jumia One to create more value and expand accessibility for our clientele. Our team of professionals are unrelenting in their drive to create a delightful client experience that enables people better manage their finances.” Tunde-Anjous concluded by saying, “As a nation, we are faced with many economic challenges, intensified further by the Covid-19 pandemic. Our remit at AXA Mansard Investments is to bring our expertise to bear in enabling people realise much more from their available resources by making the right savings and investment decisions.”

Lagos, partners lead talks on world youth skill day

agos State Technical and Vocational Education Board (LASTVEB) is organising a two-hour webinar on Wednesday (today) to mark this year’s World Youth Skill Day with the theme: “The new norm: Implications of the pandemic on jobs & future skills development.” The theme is against the backdrop of the Covid-19 pandemic currently ravaging the global economy. The 2020 international youth skill day webinar seeks to review the current realities and implications for the job market, spotlight the new normal and the future of work in Nigeria. It is also packaged to highlight the emerging skill sets for the new decade, as well as rethink the quality and relevance of education and the acquisition of technical/vocational skills in a thrift-world economy

like Nigeria’s. The event features Governor Babajide Sanwo-Olu as the keynote speaker, while Ndidi Nwuneli; co-founder, AACE Food Processing and Distribution Company is lead speaker. Panelists include Adeoye Fadeyibi; managing director, Eko Electricity Distribution Company; Adenike Adekanbi, general manager, Infrastructure Assets Management Agency, Lagos State; and Tobia Wolfgarten, team lead, TVET GIZ. It is to be moderated by Olatunbosun Alake, the special adviser to Sanwo-Olu innovation and technology. Expected participants are stakeholders drawn from the technical education filed, private sector (employers of labour), the academia, community leaders and Lagos State technical college officers, students among others. www.businessday.ng

L-R: Gloria Nwakamma, representative of Small and Medium Development Agency of Nigeria (SMEDAN); Oladele Ajayi, special adviser to the Lagos State governor on commerce, industry, and coorporatives; Lola Akande, commissioner, Lagos State Ministry of Commerce, Industry, and Coorporatives; Bola Balogun, permanent secretary, and Ade Adedeji, representative, Central Bank of Nigeria (CBN), during the Lagos State council meeting on Micro, Small and Medium Enterprises (MSMEs) in Lagos, yesterday. Pic by Olawale Amoo

Poverty is more pertinent issue to Nigerians than COVID-19 - new report ENDURANCE OKAFOR

igerians are more concerned about the country’s poverty rate and the poor state of the economy than they are about the deadly coronavirus, according to a new survey by Novare Equity Partners. While 44 percent of Nigerians sampled in the survey Novare commissioned CIT Group, a financial holding company to conduct, said the coronavirus outbreak was accelerating rapidly in Nigeria, 47 percent said poverty was the most important issue currently facing the country. “Although the Nigerian government is perceived well for its response to Covid-19, data indicates that Nigerians are worried about the economy and poverty,” Derrick Roper FIA managing director,

Novare Equity Partners said. Titled: ‘Focus on NigeriaPerceptions on Economy and International Investment’, the report released Tuesday from the survey fielded between 3rd and 7th July 2020 revealed that the economy and Covid-19 were the second and third most disturbing issues Nigerians are faced with. “We are not surprised by the result of the survey report. Nigeria is faced with an enormous employment challenge,” Andrew S. Nevin, partner and chief economist at PwC said, adding that millions of informal workers lost their jobs and their livelihood during the lockdown period. According to Nevin, it is, therefore, reasonable that Nigerians will be more concerned about having back their livelihood. “Even though the federal and state governments, churches and

Boko Haram: Reps to probe resignation of 356 soldiers James Kwen, Abuja

he House of Representatives has mandated its Committee on Army to investigate the resignation of 356 soldiers serving in the North-East, theatre of war against the dreaded Boko Haram insurgents as such incidents portend serious security threat and an impending military mutiny. This resolution was sequel to the adoption of a motion of urgent public importance moved by Mohammed Monguno, chief whip and co-sponsored by Nkelruka Onyejeocha, deputy chief whip, Ndudi Elumelu, minority leader and Toby Okechukwu, deputy minority leader during a plenary on Tuesday. Moving the motion, Monguno expressed worry that military sources have attributed these massive resignations to loss of morale, unimproved allowances, mass casualties

in the hands of Boko Haram terrorists due to lack of intelligence apparatus and fighting equipments, as well as poor welfare packages for the soldiers by army high command. He said the Nigeria Army which was founded in 1960 was the largest component of the Nigerian armed forces with a staff strength of about 200,000 soldiers charged with the responsibility to take charge of land warfare operations as well as protest and defend the territorial integrity of our nation. The chief whip noted that on the 22nd of June 2020, a lance corporal in the Nigerian Army by name Martin Idakpein made an online video wherein he condemned the lackadaisical attitude of the chief of army staff towards the attacks and killings of innocent Nigerians and soldiers as well as the untold hardship that soldiers face while conducting combat operations.

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NGOs tried, it is still a difficult situation for people that are not working.” Economic pain became more acute for Nigerian households due to the measures targeted at flattening the coronavirus curve in Africa’s largest economy. Nigeria’s economy is projected to post as much as five percent contraction in 2020 due to the impact of Covid-19 which has disrupted a lot of businesses and industries. Meanwhile, 87 percent of the respondents from the survey conducted by the New-York based institution said that coronavirus has weakened Nigeria’s economy. More than two months after the government began to re-open the economy on May 4, 2020, following the fiveweek lockdown in FCT, Lagos and Ogun States, analysts say businesses are yet to recover

from the shock. Analysis of the survey result by Novare revealed that 42 percent of respondents believe Nigeria’s economy is doing very poorly at the moment. This is against the one percent that said the economy was doing very well. On the survey methodology, Novare said a nationally representative survey of n=1,000 respondents was conducted in Africa’s most populous nation with 18+-year-old members of the general public. “A sample size of n=1,000 yields a maximum margin of error of +/- 3.2% at a 95% confidence interval,” it assured. National security and defence, terrorism and job were the other most pressing issues highlighted by Nigerians as 30 percent pointed at the security while 26 percent each cited the latter.

LCCI flags Nigeria’s rising debt profile, poor metering by DisCos Odinaka Anudu

agos Chamber of Commerce and Industry (LCCI) has said that Nigeria’s rising debt profile is a source for worry, urging the Federal Government to apply caution on the continued use of debt to meet fiscal obligations. At a virtual press conference held on Tuesday, Toki Mabogunje, president of the chamber, said Nigeria should explore the option of equity financing as it was a better and more sustainable strategy at this time the country was struggling to generate adequate revenue. Nigerian states and the Federal Government recorded a total debt stock of N28.63 trillion in the first quarter of 2020, representing a 4.44 percent increase from N27.40 trillion in Q4 of 2019, according to data from the National Bureau of Statistics (NBS). The cash-strapped Federal Government has secured $3.4 @Businessdayng

billion and $288.5 million from the International Monetary Fund (IMF) and African Development Bank (AfDB) respectively, and it could secure another $1.5 billion from the World Bank. Mabogunje said Nigeria’s quest for borrowing could push the country’s debt stock to N33 trillion by year-end (22 percent of GDP), a situation that would hurt the economy more. She acknowledged the postponement of the planned hike in electricity tariff by the power distribution companies (DisCos) to the first quarter of 2021, considering the impact of COVID-19 on households and businesses which were yet to recover from its shock. She said electricity supply was being challenged by inappropriate tariffs which undermined the economics of investment in the power sector and consequently inhibited investment in the sector, thereby impacting adversely on liquidity in the sector.

Wednesday 15 July 2020

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Tuesday 14 July, 2020

Top Gainers/Losers as at Tuesday 14, July 2020 LOSERS

GAINERS Change

ASI (Points)

Company

Opening

Closing

UNILEVER

N12.45

N13.65

1.2

GUARANTY

N22

N21.3

-0.7

DEALS (Numbers)

BUACEMENT

N41.2

N41.45

0.25

ZENITHBANK

N16.2

N15.6

-0.6

JAIZBANK

N0.54

N0.56

0.02

GLAXOSMITH

N4.8

N4.35

-0.45

VOLUME (Numbers)

TRANSCORP

N0.62

N0.64

0.02

ACCESS

N6.3

N6.1

-0.2

NEM

N2.05

N2.06

0.01

AFRIPRUD

N4.25

N4.07

-0.18

Company

Opening

Closing

Change

24,114.59 4,174.00 208,203,183.00

VALUE (N billion) MARKET CAP (N Trn)

1,.58 12.579

GTB, Zenith, Access lead laggards as stock market fails to impressive Iheanyi Nwachukwu

or the second time this week, the Nigerian stock market failed to impress investors after another session of negative close on Tuesday July 14. Though, the outcome didn’t surprise many market watchers who had earlier this week seen the need to trade cautiously in the absence of any positive catalyst capable of lifting investors’ confidence. Banking stocks like GTBank Plc, Zenith Bank Plc and Access Bank Plc occupied the topmost position on the losers’ table. GTBank Plc dipped most on Tuesday after its share price moved from day open high of N22 to N21.3, losing 70kobo or -3.18percent. Zenith Bank Plc also decreased from N16.2 to N15.6, shedding 60kobo or -3.70 percent;

while Access Bank Plc dipped from N6.3 to N6.1, losing 20kobo or -3.17percent. Cumulatively, investors booked about N45billion loss at the close of remote trading session on Tues-

day. This negative trend in the stock market is expected to continue on Wednesday July 15 as factors triggering the bearish sentiment remain. For instance, the con-

tinued spread of the Coronavirus and its negative impact on major global and domestic economic indicators remain a source of worry to investors and businesses. The Nigerian Stock Exchange (NSE) All Share Index (ASI) decreased by 0.34 percent to 24,114.59 points while the value of listed stocks decreased to N12.579trillion as against preceding trading day high of 24,200.60 points and N12.624trillion respectively. The stock market’s negative return year-todate (YtD) stood higher at -10.15percent. This month, the market has decreased by -1.48percent. In 4,174 deals investors exchanged 208,203,183 units valued at N1.058billion. Sterling Bank Plc, UBA Plc, Japaul Oil Plc, FBN Holdings Plc and Zenith Bank Plc were actively traded stocks on the Bourse.

Orange Corners Nigeria incubation programme: 5 Start-up entrepreneurs emerge winners

itilayo Medunoye, Founder of Milky Express, Jide Ayegbusi, Founder of Edusko, Isaac Oladipupo, Founder of Afrilearn, Victor Emaye, Founder of Medipal Health care and Kenneth Okonkwo, Founder of IrriTech Services have emerged winners of the Innovation Fund at the Orange Corners Nigeria Incubation Programme Stream 2. The fund, which is a total of 135,000 EUR Start-up capital with a 75percent grant, 25percent loan ratio will be divided amongst the 5 winners. Orange Corners Nigeria is a Dutch initiative, supported by the Netherlands Enterprise Agency and implemented by Nigeria’s foremost Enterprise Support Organization, FATE Foundation. The programme which launched in Nigeria in July

10, 2019 has to date supported 40 Entrepreneurs with Enterprise Training, Business Incubation and Advisory Services, Mentoring and Funding valued over Eighty Million Naira for prototype development and testing. Stream 2 of the six months long programme began in February, 2020 and rounded up with a business pitch com-

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petition in June 25, 2020. During the pitch competition, Incubates presented their businesses to expert Jury comprising of Tim Spaans, Deputy Programme Manager, Orange Corners, Pradeep Pahalwani, MD Securisk Brokers, and Temitope Onitiri, Partner Audit, KPMG Nigeria. The Jury also determined the winners of the Orange corners Innova-

tion Fund. Speaking shortly after the programme, Executive Director, FATE Foundation, Adenike Adeyemi, congratulated the winners whilst cheering them of the well-deserved win. She also expressed delight at the successful conclusion of the programme stating that “the foundation is very proud of to record the success of the second stream of the programme and its achievements over the years. The Entrepreneurs have proved to be resilient, socially impactful and innovative, by developing sustainable solutions pre and during the COVID-19 pandemic. We congratulate them for rising above the challenges. We also look forward to collaborating with more private companies in supporting more young entrepreneurs in Nigeria’’.

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Global market indicators FTSE 100 Index 6,179.75GBP +3.56+0.06% S&P 500 Index 3,167.45USD +12.23+0.39% Generic 1st ‘DM’ Future 26,249.00USD +281.00+1.08%

Nikkei 225 22,587.01JPY -197.73-0.87% Deutsche Boerse AG German Stock Index DAX 12,697.36EUR -102.61-0.80% Shanghai Stock Exchange Composite Index 3,414.62CNY -28.67-0.83%

NSE simplifies investing in capital market Iheanyi Nwachukwu

he proliferation of dubious investment schemes that often result in loss of money by unsuspecting members of the public continues to make the role of financial literacy imperative. To play its part, Nigeria’s leading bourse, the Nigerian Stock Exchange (NSE) has issued the second edition of its comic, StockTown, dedicated to providing financial literacy education to Nigerians. The comic, available in digital format on a dedicated website at www.nsestocktown.com builds on The Exchange’s advocacy for safe and trusted investment schemes. The story picks up from the first edition, following the life of Mora Johnson as she seeks to liberate her family from their financial struggles by investing in the capital market. This second edition highlights some major lessons for potential and existing investors including the need for vigilance in avoiding Ponzi schemes and unregulated investments, whilst advising prospective investors to seek proper guidance before making investment

decisions. Readers can look forward to a simplified explanation of the history of the capital market, its evolution over the years, and how anyone can start making investments today in the Frequently Asked Questions (FAQs) section of StockTown. Commenting on the importance of this comic book, Head, Corporate Communications, NSE, Olumide Orojimi said, “Investor Education is a priority for us at The Exchange. We have identified the need to empower individuals across all levels to make good financial decisions and better their lives now and in the future. As the investment landscape continues to evolve to accommodate more retail participants, we are excited to leverage new and existing platforms to present investment products and processes in ways that are both appealing and easy to understand, particularly in this new normal. We hope that StockTown becomes a widely-read resource for potential and existing investors, the financially excluded, millennials and the larger public.” StockTown is just one of the many ways NSE demonstrates its strong commitment to promoting financial literacy in Nigeria.

NSE hosts its Good Cause Ambassador to Digital Closing Gong Ceremony

s entertainment becomes one of the leading elements of influence, especially amongst younger generations, the world is quickly recognising and leveraging the arts to drive societal change. This was highlighted by the Chief Executive Officer, The Nigerian Stock Exchange (NSE), Oscar N. Onyema during a digital Closing Gong ceremony in honour of Innocent ‘Tubaba’ Idibia, NSE Good Cause Ambassador on Monday, 13 July 2020. Speaking during the session, Onyema noted that, “Since hitting the limelight over 20 years ago, Tubaba has continuously used his music as an instrument to drive change and impact within the society. We were, therefore, delighted @Businessdayng

to appoint Tubaba as the NSE Good Cause Ambassador in August 2019. Following his appointment, Tubaba has been collaborating with NSE on its various CSR programmes such as the NSE Corporate Challenge, NSE Essay competition and more recently the Masks for All Nigerians campaign. We consider our partnership to be impactful and this continues to reiterate our philosophy that everyone has an opportunity to help make the world a better place.” On his part, Tubaba expressed his delight to collaborate with NSE saying, “I am truly honoured to have been selected as the NSE Good Cause Ambassador and to be given the privilege to sound the Closing Gong on The Exchange today.

Company IN FOCUS

BUSINESS DAY Wednesday 15 July 2020 www.businessday.ng

FirstBank: Empowering staff; driving productivity against the odds

s the coronavirus pandemic forces firms to downsize and cut their wage cost to cope with the adverse economic realities, First Bank of Nigeria Limited (FirstBank) is bucking the trend with a different approach that puts its staff first, writes Segun Adams. In a pandemic year where employees are agreeing to pay cuts to keep their jobs and businesses are either downsizing or simply liquidating, First Bank of Nigeria Limited is an outlier, taking an unusual approach to demonstrate how organisations can still ensure the best outcomes for both employer and employees. The first-tier lender last Friday promoted a crop of its staff across all levels in a rare show of corporate resilience in the banking industry and beyond, both locally and across the borders. According to FirstBank, keeping staff motivated during these unprecedented times is not only crucial for the soul of businesses, but it also demonstrates corporate responsibility. In the wake of the new coronavirus pandemic, there have been unprecedented layoffs across the world as companies went bust, unable to generate cash to sustain their operations. The United States, the world’s biggest economy has recorded a historic rise in unemployment with over 45 million initial unemployment claims in the last three months. In Britain, HSBC, a giant global bank, is reviving plans for a 35,000 job cut due to pre-existing problems thought to have been worsened by the pandemic. Big banks like Morgan Stanley, Deutsche Bank, Citigroup, Barclays, Société Générale among others have announced about layoffs exceeding 60,000 jobs. In Nigeria, 38% of the workforce was jobless in April due to the virus and lockdowns, the National Bureau of Statistics (NBS) estimates. In the MSMEs sector, 50,000 jobs were lost and 10,000 businesses have shut down according to Auwal Bununu Ibrahim, the National Vice President, North Central of the National Association of Small and Medium Enterprises, (NASME) and in the Aviation industry, some 24,000 jobs were lost as of April. While banks in the country have been barred by the Central Bank of Nigeria (CBN) from lay-

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Adesola Adeduntan, CEO, First Bank

ing off staff without regulatory approval, there is no obligation for banks to implement promotions or raise pay. In fact, most lenders have initiated pay cuts to cope with the excess capacity arising from skeletal operations and depressed levels of economic activities in the economy which is reeling from the coronavirus and lockdown shocks. But against the odds, FirstBank promoted its staff and didn’t cut down salaries. In a recent article, Forbes stated that the manner in which firms treat their employees during the ongoing health and economic crisis will not only be remembered for years to come but have a direct effect on their productivity going-forward. “How businesses respond will have a lasting impact on employee behaviour including, engagement, productivity and loyalty,” the American business magazine noted.

Hertzberg’s Two-Factor Theory also known as dual-factor theory postulates that career progression is a motivating factor for employees to work harder. As the coronavirus pandemic continues to take a toll on the mental health and focus of employees in the country, and across the world, due to uncertainty of job status, lower income and a disruption to their career development, FirstBank stands out as a safe and rewarding place to work. The stability and confidence enjoyed by the bank’s staff are the vital environment human resources experts say is necessary for firms that will successfully navigate the tides of current realities. In a recent BusinessDay Webinar, Nkemdilim Begho, CEO, Future Software Resources Limited advised that businesses can engage their team and see how they can help in creating

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The stability and confidence enjoyed by the bank’s staff are the vital environment human resources experts say is necessary for firms that will successfully navigate the tides of current realities

Even before current events, FirstBank has always proven to be conscious of the impact a stimulating and rewarding environment can have on the overall employee performance and thus, provided value accretion to shareholders, customers and other stakeholders new ideas and products that the company can deliver. The resultant effect will be greater efficiency of staff and innovation whereas, elsewhere organizations are bound to struggle with a demotivated workforce which could lead to inefficiencies and higher costs for the businesses with adverse implications for bottom-line. To realise optimal human resources contributions, Begho acknowledged the need for firms to sustain team bond and ensure that morale of their staff is high. Even before current events, FirstBank has always proven to be conscious of the impact a stimulating and rewarding environment can have on the overall employee performance and thus, provided value accretion to shareholders, customers and other stakeholders. From its competitive remuneration across cadres including mid-level and senior-level employees to benefits that cover medical insurance and disability insurance, sick leave and vacation, and retirement options, FirstBank puts its workforce first ensuring that they are well motivated and equipped to deliver higher productivity. FirstBank has featured on some of the best workplace rankings including A Great place to Work and Jobberman. Last year, the big bank ranked among the

Jobberman 2019 best 100 companies to work for in Nigeria, a list that scrutinizes over 60,000 companies to pick the best 100 based on strict metrics. The bank has enjoyed positive reviews from credible job/career sites like Indeed where it banks a 4.1/5 positive rating. A former employee of the bank Aderemi Adebiyi commended the institution for its keen interest in the welfare and career progression of its employees. “I worked in the Bank for 15 years and do not regret it. It’s fast-paced, performance-driven with good career progression prospects, promotions and varies streams of career development,” Aderemi said. “The company also offers paid trainings.” FirstBank’s talent management strategy is aimed at supporting employee engagement, employee motivation and increased productivity, and leadership development across all levels of employees within the organization, according to its website. As a tenet of career development, FirstBank has devoted itself to creating a culture of continuous learning tailored to the needs and aspirations of the employees and the business itself. The bank’s FirstAcademy and learning centres strategically located around the country allows for e-learning, mobile learning, physical classrooms and virtual libraries to allow all employees the opportunity to equip themselves for future roles that benefit both them and the organization. This means pandemic or not, learning is continuous and uninterrupted. FirstBank also prides itself as an equal opportunity employer so that qualified persons irrespective of gender, culture, age, nationality, sexual orientation, disability or social background can participate in its business. At the same time, FirstBank remains a performance-driven organization and merit-based, allowing individual talents to be rewarded for their hard work and contribution to overall organisational goals. With people as one of the bank’s greatest assets, it strives to maintain a pool of multi-skilled and well-rounded employees relying on initiatives like Job Shadowing, Coaching, Counselling, Mentoring, Succession Planning and Career Maps to develop and retain talents at all levels of the organisation’s operations.

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