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news you can trust I ** monDAY 15 june 2020 I vol. 19, no 584

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ANAP Foundation COVID-19 Think Tank recommends measures as Nigeria scrambles to secure livelihoods

LOLADE AKINMURELE

igeria is facing a $7 billion FX demand backlog that is rolling back ugly memories of the dark days of 2016 when manufacturers and investors were starved of dollars leading to a near collapse of the economy. The estimate of $7 billion was arrived at by bankers who say manufacturers have unmet dollar demand of $2 billion while

Nigeria losing investor confidence, int’l banks pull plugs on local lenders Manufacturers unable to open letters of credit Foreign investors shut out of cheap Nigerian stocks over repatriation worries

STEPHEN ONYEKWELU

igeria is scrambling for solutions to the new normal that has befallen the world thanks to the coronavirus Continues on page 31

Court restrains Dangote, Nigerian Police from Interfering with BUA’s operations of Obu-Okpella Mines

Continues on page 31

Inside

Experts to brainstorm at BusinessDay’s national discourse on Nigeria’s Covid-19 response P. 30

… local epidemiological data show rising new infections curve

L-R: Francis O. Obiakor, project manager, Apapa Clinker Export/Gypsum Import Terminal (Dangote Projects Limited); Akin Omole, managing director, Greenview Development Nigeria Limited; Sada Ladan-Baki, group executive director, Dangote Industries Limited; Ekanem Etim, director, export, Dangote Industries/Dangote Cement plc, and Tukur M. Lawal, SGM, head, community affairs and environment, Dangote Cement plc, during the sail-off of vessel (in the background) conveying clinker to Senegal from Dangote Cement Export Terminal, Apapa, Lagos.

Federal High Court in Benin City has restrained Dangote Industries and Continues on page 31

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AfDB crisis: Adesina needs more than technocracy to run a multilateral body global Perspectives

OLU FASAN

hen Akinwumi Adesina ran for the presidency of the AfDB in 2015, I wrote a piece in this column entitled “AfDB presidency: Adesina, best candidate for the job” (BusinessDay, May 4, 2015). I wholeheartedly supported his candidacy because he was the best of the eight candidates vying for the AfDB top post, and I was delighted when he was elected the eight president of the bank in April 2015. So, it’s discomforting that he is now in the eye of the storm, facing intense internal and external attacks. In January this year, anonymous whistle-blowers called “Group of Concerned Staff Members” brought a 20-point allegation of corruption against him. Adesina strongly denied the allegations and rebutted them in a 260-page document. The bank’s ethics committee investigated and totally exonerated him. But the US rejected what Steven Mnuchin, its Treasury Secretary, described as “the wholesale dismissal of all allegations without appropriate investigation” and demanded an independent probe. This is unprecedented in the bank’s 56-year history. But also unparalleled is the controversy surrounding Adesina’s presidency. His immediate predecessor, Donald Kaberuka, a Rwandan, served two terms of ten years, from 2005 to 2015, without any public controversy. Adesina, who is running for a second term, is the sole candidate in the election scheduled for August. But the US said further investigation was necessary “to ensure that he has broad support, trust and clear shareholder mandate.” This has prompted concerns that the US might want to thwart Adesina’s second term chances. But why is Adesina beleaguered?

Well, we must start from 2015. Although Adesina won the election, it wasn’t a landslide. He secured about 60 percent of the votes. He was not the favoured candidate of most of the non-regional member countries of the AfDB, which control 40 percent of the bank’s shares. The US, which is the largest non-regional shareholder, with 6.5 percent, and second largest, overall, after Nigeria, which has 9.1 percent, did not back his candidacy! Adesina is the first AfDB president who never previously held office as a finance minister or central bank governor. For some, this was an issue with his candidacy in 2015. But the main fears of those who didn’t support Adesina for the AfDB presidency were that a Nigerian president would unduly favour Nigerians with appointments and contract awards and lend too easily to Nigeria. It is interesting that these two issues – favouritisms towards Nigeria and Nigerians – are at the heart of Adesina’s current travails. Let’s be clear. As the US’s first representative to the AfDB, Harold E Doley Jr, recently said, “Akinwumi Adesina is a global player of impeccable character.” He is clever and charismatic; a man who is confident of his own technical ability and convinced about the rightness of his policy approach. But, sadly, he does not seem to understand the world of realpolitik. In the famous book, The Political Economy of Policy Reform, John Williamson, the renowned economist, said that technocrats must have two skills. First, they must have the technical ability to judge what institutions and policies are needed to achieve positive economic outcomes. Then, they must have the political skills to be able to persuade and win people to their side. So, technocracy is not enough! Truth is, given some people’s concerns about his candidacy in 2015, Adesina should have done more to manage relationships better with the US and staff of the bank. After all, as the saying goes, “keep your friends close and your enemies closer.” Yet, he did not, it seems, pay sufficient attention to the sensitivities of the US, the bank’s second largest shareholder and the world’s economic superpower. Several years ago, I had lunch in Lon-

don with the Regional Director (Europe) of the AfDB, Nfor Susungi, a Cameroonian, and asked him about the influence exerted by the bank’s non-regional members. He replied: “It is true, but it’s also to be expected”, adding that “one would not normally expect that they should be shareholders without being able to exercise influence”! He also said they exercised influence beyond their share capital in the bank because they controlled the financial markets from which the AfDB raised funds, such as its recent oversubscribed $3 billion Fight COVID-19 social bond on the London Stock Exchange. Of course, the influence of nonregional members is also due to Africa’s economic decline. In his memoirs Beckoned to serve, former President Shehu Shagari said that, in 1981, he wanted to veto a proposal to allow non-Africans to have equity in the AfDB but changed his mind. Why? Well, he said because other African countries “were not able or willing to pay their annual contributions”, adding: “Unfortunately, Nigeria could not single-handedly rescue the bank from its acute financial dilemma.” So, think of it. African countries cannot wholly fund the AfDB themselves and need the non-African members, who own 40 percent of the bank and from whose financial markets the bank mobilises additional resources. Yet when the non-African members raise concerns about how the bank’s funds are used, Africans cry “colonialism”. Where is the logic? Every student of economic history knows that the US has long been tough on external lending. This dates back to the creation of the IMF and the World Bank in the 1940s when the US insisted that the IMF must lend to countries with conditionality on economic reforms and financial discipline. The US’s approach hasn’t changed, and its view is that the AfDB is lending too easily. David Malpass, the World Bank president, made this point in February when he said that the AfDB “is pushing large amounts of money into Nigeria, South Africa and others”, adding that the bank “has a tendency to lend too quickly.” Of course, it’s true that the US frowns at the AfDB pouring money into Nigeria’s agricultural sector because Nigeria bans US agricultural imports. In 2018, when

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President Buhari went to the White House, President Trump told him pointblank: The US “gives Nigeria well over $1 billion in aid every year”, he said, adding that it’s very important that “we are able to sell our great agricultural products into Nigeria”. So, there is an element of President Trump’s transactional worldview in his attitude to the AfDB’s lending to Nigeria. But the general concern is that the AfDB is behaving like China, lending heavily to Africa without demanding reforms, and worsening the continent’s debt problems. I share that sentiment! Unfortunately, the US’s concerns about AfDB’s governance fuelled its hawkish response to the whistle-blowers’ allegations. But Adesina should have handled the matter with tact. Instead, he wrapped himself in the Nigerian and African flags, turning the issue into a Nigerian/African-US face off, with former African leaders, such as President Olusegun Obasanjo, issuing grandstanding statements. President Buhari’s chief spokesman, Femi Adesina, wrote a piece referring to “an onslaught led by America” and bragging that the finance minister, Zainab Ahmed, wrote a “decisive letter”, rejecting America’s demand for an independent review. But how “decisive” was the letter? The bank’s board eventually bowed to US pressure and agreed to an independent probe. The truth is that it wasn’t only the US that called for an independent review, the UK as well as the eurozone and Nordic countries also called for an independent investigation, which made the opposition of African leaders to an external review seem like special pleading. Surely, if, as I hope, the independent review exonerates Adesina, it would hugely boost his position and reputation. But he should learn the lessons of his travails. We live in the world of realpolitik, where technocratic ability or policy expertise is not enough. In running a multilateral organisation like AfDB, a leader also needs political skills to recognise and work with real sources of power. I wish him well!

Every student of economic history knows that the US has long been tough on external lending. This dates back to the creation of the IMF and the World Bank in the 1940s when the US insisted that the IMF must lend to countries with conditionality on economic reforms and financial discipline

Dr. Fasan, a London-based lawyer and political economist, is a Visiting Fellow at the London School of Economics. e-mail: o.fasan@lse.ac.uk, twitter account: @olu_fasan

Rape – the “pandemic” destroying the womenfolk and girl child

andemic is defined as an adjective (of a disease) prevalent over a whole country or the world, also, it is described as a noun, outbreak of a particular disease. This word has been frequently used in the last few months a result of the COVID 19 situation across the world. But in the middle of the COVID19 pandemic, another more deadly outbreak has been ongoing and have resurfaced, which is Sexual Abuse, specifically, rape. Rape is an unlawful sexual activity involving sexual intercourse done forcibly or under threat of injury against a person’s will. It is estimated that approximately 35 percent of women worldwide have experienced some form of sexual harassment in their lifetime. The majority of countries that have data available on rape, report that less than 40 percent of women who experience sexual violence seek help, while less than 10 percent seek help from law enforcement because of stigma and shame. In the last few days, we have seen hashtags calling for justice on the lives of rape and sexual assault victims and we wonder why, how and where these occurrences took place without witnesses to the stories we hear. It is sad to say that amidst the global lockdown situation, some vicious souls still prowl about searching for vulnerable or not persons to devour. #JusticeforUwa #JusticeforTina #Jus-

ticeforJennifer and the list goes on and on. We can be sure that many other cases were buried on the grounds of shame and cultural values and it almost appears as though the women are forever making up stories of these events as some say, but it takes one who has been battered to know what it’s like to walk in those shoes. It is no longer news that Africa have the highest prevalence rate of child sexual abuse around 34.4 percent and these numbers are likely to go up if disciplinary actions are not taken seriously. South Africa have the highest rate of rape in the world of 132.4 incidents per 100,000 people. According to a survey conducted by the South African Medical Research Council, approximately one in four men surveyed admitted to committing rape, this is outrageous and detrimental to the society. Although the Parliament of South Africa enacted the Criminal Law (Sexual Offences and Related Matters) Amendment Act in 2007 attempting to amend and strengthen all laws dealing with sexual violence, the rates of reported rape, sexual abuse of children and domestic violence have continued to rise. Back to Nigeria, there have been many instances where rape occurs, we have seen where girls have been sent to relatives due to her immediate family not being able to cater for her needs, and they are taken advantage of. House helps have been raped by fathers of www.businessday.ng

the household, bosses have raped subordinates, criminals have not only attached homes but raped female members of the family, fathers have even raped their children and recently, we just experienced where a young girl was raped by some boys in the church, a place of worship, very pathetic. The side effect or aftermaths of rape is destroying the womenfolk and girl child considering the studies that have shown Post Traumatic Stress Disorder (PTSD), depression and suicidal thoughts, sense of vulnerability, shock, numbness, anger and blame to mention a few are what victims go through. Marriages have even been destroyed due to the effect of rape experienced by the wife, that was carried into adulthood. What could be worse than being hurt by those who should feel empathy towards you. Some blame this callosity on the pattern of raising children differently in homes, though, this may not hold in all cases, but it might not be far from the truth. In all of this, we need to be careful not to build or allow a culture that condones this “pandemic” and to build a generation of women and girl child that can live safely and aspire to what they want to become in life, because our culture tends to be silent and not punish offenders adequately. But we cannot entirely counter the belief of

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Nneoma Nkechi Rochas Okorocha wrong upbringing being the cause of rise in rape cases, and we have seen studies showing that upbringing shapes the thought pattern of many individuals. In its entirety, we hope for a better society that will stand up and support assaulted women, and encourage women not to keep quiet when they are victims of this terrible act. Parenting and good family life play a major role in the upbringing of the male child, and the notion of men being entitled to bodies of women should continually be frowned at, especially in breaking the stereotype portrayed by cultures across Africa. Note: The rest of this article continues in the online edition of Business Day @https:// businessdayonline.com/ Dr Okorocha is the founder/CEO of WODDI Contact: 08072025170 www.woddi.org

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An empty seat for Koleade Adeniji Abayomi, SAN; OON ‘ Thereafter, his Bashorun J.K Randle

onsidering that members of the Metropolitan Club in a dazzling demonstration of generosity and public spiritedness raised almost N60 million for the purchase of an ambulance as medical equipment/test kits which were donated to the Lagos State Government in its efforts to combat the CoronaVirus, raising N100 million from the members of the Club towards the rescue of struggling artists who are at peril from the pandemic would not be beyond reach. Thankfully, we all recognise that Art emboldens us and connects us to a higher purpose. I am particularly encouraged by Prince Yemisi Shyllon (a member of Metropolitan Club who is an internationally renowned art collector) and Femi Akinsanya who enjoys a similar reputation who have jointly declared: “Art is a universal language that speaks to all people and is able to evoke emotions, ideas and thoughts in a world where written and spoken language is the primary form of communication.” Enwonwu was absolutely convinced that I was the right candidate to understudy him as he embarked on his great task of painting the empty seats of the Metropolitan Club on (al fresco) canvas. Kole was entirely in agreement. Now, Enwonwu has been gone since

5th February 1994 and Kole (a victim of the CoronaVirus) will be buried in London at Gunnersbury Cemetery, 143 Gunnersbury Avenue, London W3 8LE, United Kingdom on Friday 24th April, 2020. In the meantime, The Metropolitan Club is under lockdown on account of the CoronaVirus pandemic. I have checked the rules of the Club and it is strictly forbidden for members to sneak into the club premises. When the club re-opens, I shall undertake the painting of the empty seats with appropriate zeal. If only Kole had tarried a little longer he would have been 80 years old on 20th August 2020. There is no way he would resist telling his signature joke (heavily nuanced with sexual connotation and erotic reference to the female anatomy) as “The Baba ‘isale’ (bottom) of Lagos”. Whenever we met at the Metropolitan Club; Lagos Dining Club; Association of Lagos Titled Chiefs or anywhere else he would mischievously accost me and declare: “No matter the task or challenge, you have a choice – start at the bottom, work your way to the middle and finish on top. The alternative is to start at the top and move to the middle but make sure you get to the bottom.” Thereafter, his laughter and good humour would overflow and engulf his circle of admirers. By his own admission, in recent years Kole had confined his physical exertions to splashing around in his swimming pool. No more cigars. Fine wines and Dom Perignon Champagne were history. His ever-present companion was the gold-topped walking stick. The effervescent and vibrant bon vivant had been subdued by age and health challenges. Alas, we missed all the signals. Ahead of Kole’s 80th birthday this year, he and his darling wife had made

comprehensive plans for celebrations. His friends and well-wishers would not be left out. That was what prompted some of us to suggest an eclectic symposium that would showcase Nigeria’s abundant intellectual talents and match them, (by leveraging on the celebrant’s longstanding connection with Cambridge University and Oxford University) with Nigerian Intellectuals. On our shortlist were the likes of: Louise Richardson (Vice-Chancellor) – University of Oxford; Robert Collier – University of Oxford; Wale Adebanwi – University of Oxford; Rowan Williams (former Archbishop of Canterbury) Master of Magdalene College; University of Cambridge. Also, on the list were: Jeffrey Sachs – Columbia University; Peter Lewis – John’s Hopkins University; Robert I. Rotberg – Harvard University; Henry Louise Gates – Harvard University; Cornel Ronald West – Princeton University / Harvard University. The plan was to invite Baroness Patricia Scotland, QC, the SecretaryGeneral of the Commonwealth of Nations to chair the event. The symposium would seek to evaluate the contribution of graduates of Oxford University; Cambridge University; Harvard University and other leading (world class) universities to the development of: Law; Justice; Order; Accountability and the Economy in Nigeria. The panel discussion would be chaired by Hajia Amina Mohammed, Deputy Secretary-General of the United Nations – with Christiane Amanpour; Richard Quest; Fareed Zacharia; and Zain Asher of CNN as well as Patti Boulaye as discussants. Hopefully, Sara Sidner of CNN will do us the honour of anchoring the panel discussion. On my part, I would launch two new

laughter and good humour would overflow and engulf his circle of admirers. By his own admission, in recent years Kole had confined his physical exertions to splashing around in his swimming pool

books: “Giving and Misgivings” and “Injury piled upon injury” A separate launch on January 13th 2021 is in the works for “TRUST AND MISTRUST” which should provide a detailed and riveting account of how about thirty years ago Michael Piltoff, an American approached me in California to join him in pursuing business opportunities in Nigeria. His father was about to retire as a Vice- President of what is now Exxon-Mobil and his employers offered him the handling of projects in Nigeria as part of his retirement/welfare package. He handed the projects over to Michael who was engaged (or about to get married to Nene Amachree, a Nigerian lady). Michael had never been to Nigeria and he desperately needed a trustworthy Nigerian with whom to partner while he stayed behind in the United States of America. According to Michael, it was his prospective mother-inlaw who recommended me without any reservation. Sadly, on account of my being the Chief Executive and Chairman of KPMG Nigeria I felt obliged to decline. Instead, I recommended Zam Unu, a chartered accountant who had previously served under me at KPMG. It turned out to be a big mistake. Huge contracts soon materialized in a joint venture with Parsons. Zam thoroughly “zammed” me!! The publication is being delayed in order to allow Zam and Engr.Orlando Ojo to tell their own side of the story. I intend to extend the same courtesy to Engr. Akin Odunmakinde, the Chief Executive Officer of Delta Afrik. J.K. Randle is a former President of the Institute of Chartered Accountants of Nigeria (ICAN) and former Chairman of KPMG Nigeria and Africa Region. He is currently the Chairman, J.K. Randle Professional Services. Email: jkrandleintuk@gmail.com

The 14 principles of management

y the help of someone you had your first bath; our last birth will also by the help of someone. And in between we manage. Life and business are a series of interdependent steps. Most people don’t get it right. But it’s not mythical. Getting them right comes from simple but organised steps. It is showing average people how to do the work of supposedly superior people. As managers of that growth process, we go from the unknown, to being average then good to great. And in that journey, we hit success, then significance, and cumulatively more achievement and then sustenance. It’s actually in that order. And bear in mind that there’s a huge difference between success, significance, achievement and truly building sustenance (structure/system). Anyone can succeed, as a one off. But to keep it going, there are steps and principles to those achievements. In business, achievement comes to someone when he is able to do great things for himself. Success comes when he empowers people to do great things with him. Significance comes when he develops people to do great things for him, but legacy, an institution and a system is created only when a person puts his organisation into the position to do great things without him. At this level comes the building of an institution. An institution is a system designed to outlive the founder. And systems run on processes. This entire route is built on a set of principles and the interdependence of systems. A system is a set of processes that can run without you. As your business grows, you’ll need to build systems and processes that can be automated as much as possible. You’ll need to build distribution systems, inventory systems, marketing systems, customer relationship and support systems, research and development

systems, effectiveness and performance measurement and improvement systems, accounting and hiring systems, and many others. Whatever systems you plan to build, beyond initiating and formulation, it must be managed independently and then interdependently with others. For your organisation’s management to be most efficient and effective, your management must possess certain principles. Henri Fayol in the early 20thcentury introduced 14 principles for managing growth and organisations, which I’d be sharing. They are universal and irrefutable. Those principles are specialisation; managerial authority; discipline; unity of command; unity of direction; subordination of individual interests; proper remuneration and motivation; centralisation; chain of command; order; equity; job security; initiative, and team spirit. Now, let’s quickly explore each. Division of work – Break down your organisational goals and objectives. While goals are directional, objectives are specific. It’s from the specificity of objectives that responsibilities and roles are born. In other words, each person (or departments) must specifically be assigned to roles. And having each of the objectives to run as operations and projects is key. To deliver on each objective, a Work Breakdown Structure is key. In terms of operations and getting things done, it’s more efficient to have the same people do the same thing yet interdependently with others doing what they do consistently with a high level of mastery. In other words, when employees are specialised, output can increase because they become increasingly skilled and efficient. Authority – It’s always great to break down your organisation into hierarchy from top down. Just like a pyramid, break your organisation into executive, then management and then the genwww.businessday.ng

eral staff. Executives and managers must have the authority to give orders, but they must also keep in mind that with authority comes responsibility. Discipline – While motivation gets us started, it’s discipline that keeps us going. Discipline must be upheld in organisations, but methods for doing so can vary. To get anything is to be persistent, but to keep it going, it must be consistent. And the key variable is discipline and commitment. Too many people are consistently inconsistent with where they consistently need to be. To be different is to be disciplined and committed. Unity of command – Everybody’s work is really nobody’s work. People need to be managed. And people seem to go off their trajectory without control and supervision. Supervise people. But all employees should have only one direct supervisor. It’s easier to get the intended result that way. Unity of direction – There’s nothing that can’t be achieved without unity and vision. Teams with the same objective should be working under the direction of one manager, using one plan. This will ensure that action is properly coordinated. Subordination of individual interests to the general interest – Always have a picture of what you want most to be over what you want. That’s long term over short-term goals. And beyond even you, the interests of one employee should not be allowed to become more important than those of the group. This includes managers. Remuneration –People need motivations and incentives. It’s not always money (but that’s also a good option). Employee satisfaction depends on fair remuneration for everyone. This includes financial and non-financial compensation. Once in a while create a surprise with bonuses, giveaways or even public admirations

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EIZU UWAOMA

and recognitions. It goes a long way. As a leader, people don’t care how much you know till they know how much you care. Centralisation – Be close yet far. Be far ahead to motivate them but close enough to relate to them. This principle refers to how close employees are to the decision-making process. It is important to aim for an appropriate balance. Scalar chain – Flat hierarchy can be confusing. Employees should be aware of where they stand in the organisation’s hierarchy, or chain of command. Order – Sometimes it’s important to create order outside-in. It does matter how you look, where you come from and what you do. It’s even safe to say that it does matter how your work environment looks and feels. The workplace facilities must be clean, tidy and safe for employees. Everything should have its place.

Note: the rest of this article continues in the online edition of Business Day @https:// businessday.ng Uwaoma is a start-up, corporate restructuring and strategy consultant. contacteizu@gmail.com

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EU to spend billions to secure coronavirus vaccine Brussels calls for advanced purchased deals with pharmaceutical groups for promising drugs Michael Peel, Leila Abboud and Hannah Kuchler

russels plans to pump billions of euros into advance purchase deals with pharmaceutical companies for potential coronavirus vaccines, in a sign of intensifying rich country efforts to secure supplies of any future treatment. The EU proposes using a “large majority” of a €2.7bn emergency fund for the effort but is also committed to ensuring fair access worldwide to pandemic remedies, according to a draft European Commission strategy. The document, due to be discussed by EU health ministers on Friday, highlights the urgency of European efforts to escape a pandemic that has hit the populations and economies of many of its countries hard. “A permanent solution to the Covid-19 crisis is most likely to be brought about by the develop-

ment and deployment of a safe and effective vaccine against the virus,” said the paper, which is due to be published next week and has been seen by the Financial Times. “Every month gained in the deployment of a vaccine will save many lives, many jobs and many billions of euros.” Money from an EU fund known as the Emergency Support Instrument would be mobilised — and potentially topped up — to finance manufacturers’ efforts to make vaccines at speed and scale. The funds would be targeted primarily at drugs that will enter clinical trials this year with a view to mass production in 2021. What we want to do is to secure sufficient supplies to our member states, while also taking global responsibility EU official The new fund would avoid companies whose only manufacturing capacity is in the US, since Washington has indicated it wants US-made medicines for itself, an EU official said. “Location is important, timing is important and the solidness of the scientific approach is important,” the official said of how the EU would pick the companies it works with. “We need to make sure we are betting on candidates that have a good chance of being successful.” EU officials insisted they were co-operating rather than com-

peting with a similar initiative set up by Germany, France, Italy and the Netherlands — all of which are EU members — to secure access to some of the scores of vaccines under development internationally. A senior EU official initially said the UK, which left the bloc in January, would not be part of the vaccine scheme — but the bloc later said London could have access during the Brexit transition period that runs until the end of the year. The commission paper insists the EU will continue “playing its part in ensuring global access to the vaccine, irrespective of wealth”, despite campaigners’ fears of a squeeze on supplies to poorer nations. “What we want to do is to secure sufficient supplies to our member states, while also taking global responsibility,” said another EU official. “This is, in fact, in our own self-interest, because no region is safe until the virus is under control everywhere.” France’s Sanofi, the world’s third-largest vaccine maker, said it welcomed “any EU co-ordinated initiative which would safeguard production of a Covid-19 vaccine in European facilities and ensure vaccine availability for the European citizens and the rest of the world”. Paul Hudson, Sanofi’s chief executive, has been calling for Europe to adopt a system similar to the US, where the govern-

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What we want to do is to secure sufficient supplies to our member states, while also taking global responsibility,” said another EU official. “This is, in fact, in our own self-interest, because no region is safe until the virus is under control everywhere

ment’s Biomedical Advanced Research and Development Agency has bankrolled the development and manufacturing of Covid-19 vaccines by his company and others. Mr Hudson created a scandal in France last month and earned a summons to see President Emmanuel Macron when he suggested that Barda’s investments could mean that the US would be first in line for any successful vaccine. He later apologised and pledged that Sanofi would manufacture its Covid-19 vaccines both in the US and Europe to ensure access for all who needed it. Barda has committed more than $1bn to a joint project between UK pharmaceuticals group AstraZeneca and Oxford university, and about $500m each to US groups Johnson & Johnson and Moderna to expand manufacturing capacity for their vaccines. It has also made smaller investments in projects from academia and in the supply chain, for example, making a grant of $143m for manufacturing special vials in which to distribute a vaccine. When asked about the new EU funding, J&J said it would “continue to work with local and international health authorities, governments, regulators and NGOs”. Moderna did not respond to a request for comment. FT

Ideas for a new Nigeria: The focus should be on basic education

ECONOMIST

(fifth in a series of five volumes)

ducation needs no introduction. In terms of development, it is the be all and end all of everything. Education is about the norms you choose to keep or discard. It is the skills to produce stuff that are valuable ala my previous productivity article. It is how you think of choices at elections. It is the way society responds to public health challenges such as the current COVID-19 pandemic. Education is about everything that we know and do and how we transmit what we know across society and across generations, and also how we systematically learn new information. Education is not just about going to school and getting certificates but about learning stuff. Every country, including us, should want to get everyone to be as “educated” as possible, to learn as much useful stuff as possible that hopefully aids their productivity, and to continue to generate knew knowledge. We generally think of education in three stages: basic education, post-basic education, and advanced learning and knowledge creation. In terms of education being a public good basic education is perhaps the most important. It is in the public interest for everyone in society to know how to read, write, communicate, think, and to know the basics

about everything society knows. It is in the public interest for everyone to know about public health challenges so they wear their masks during pandemics and understand the dangers of open defecation. It is in the public interest to know how to think about issues before they vote for leaders and how to understand the impact of their activity on the environment. Basic education is where people learn the basics that allow them to learn more specific skills that enhance their productivity and income in the future. In our current educational structure this would be primary and secondary school. Unfortunately, despite being the most important part of the education lifecycle it is the part that typically receives the least support. The federal government typically spends about two percent of its budget on basic education. About half of that goes to the universal basic education fund and most of the rest go to a handful of federal government colleges. The states and local governments (who are statutorily responsible for basic education) do a bit more but not nearly enough. If we are to judge by the outcomes then we are failing woefully. Only about 75 percent of pupils actually complete primary education. Our secondary enrolment rate was just 42 www.businessday.ng

percent in 2018. Things are much more worrying if you consider the quality of education and spatial variation across the country. To be clear it is not that Nigerians do not realise the importance of basic education. From the latest living standards survey, in many parts of the country, specifically in urban areas, education is typically one of the largest expenditure items for households after food. But 40 percent of households are poor and a many more are just outside the official poverty line. Those who are wealthy enough bail themselves out with a quality private education but the rest are left unfortunate. But remember, basic education is a public good. If society decays because of the poor basic education then there will be nowhere to hide even if you managed to go to a top tier school. If we want to build the country that we want then the starting point is to make sure that everyone – EVERY SINGLE PERSON – has a good quality basic education, and we must back that quest up with money, time, and effort. The federal government needs to stop hiding behind statutory responsibilities (which as I have mentioned before were not handed down on a tablet to Moses) and take more responsibility in pushing towards this necessary goal. The states and local govern-

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NONSO OBIKILI

ments also need to do much better and be incentivised to do much better. The current status quo where the spending focus is on tertiary education probably needs to end. Personally, I think the entire university and polytechnic system should be defunded and scrapped and replaced with a system of courses where people pay their teachers directly and just keep learning whatever they think is useful. Maybe with some funding for really advanced PhD. level learning and for research, and some support for the brilliant but verifiably poor. But that is a story for another time. As a country we need to figure out how to get to the basic education promised land, and for that we all need to put the money, time and effort on that table. Dr. Obikili was the chief economist at BusinessDay

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BUSINESS DAY

Monday 15 June 2020

EDITORIAL Publisher/Editor-in-chief

Frank Aigbogun editor Patrick Atuanya

Petrol deregulation: Stop taking baby steps The FG must take giant steps that will leave positive impacts on its trail

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

he recent debunk by the Petroleum Product Pricing Regulatory Agency (PPPRA) on the deregulation of the downstream oil sector is an indication that the Nigerian federal government is not prepared to take quick steps to achieving growth in the space and that calls for a reconsideration. Last week, Nigerians woke up to the news that the Nigerian downstream petroleum sector had been fully deregulated by the federal government. According to the news, the PPPRA had removed the existing price cap on the premium motor spirit (petrol), adopting a market-based pricing system and allowing marketers the freedom to fix the price at which they can sell the product to consumers. However, PPPRA debunked the news, clarifying that the agency has not conferred such powers on petrol marketers. According to the agency, it will continue to guide market participants on the monthly fair retail market price at which petrol shall

be sold across the country. The PPPRA argued further that in a deregulated market, the role of a regulator in monitoring and regulating activities in the sector cannot be over-emphasised. Hence, putting to an end all the initial jubilation about full sector deregulation, having already deregulated diesel (AGO) and kerosene (DPK) pricing. This is rather unsurprising given how almost impossible an autonomous body (PPPRA) saddled with the responsibility of determining the pricing policy of petroleum products and regulating supply and distribution, reports to the minister of state for petroleum, Timpre Silva, and finally to the President Buhari, also a Minister of Petroleum, would itself remove the power to deregulate. Also, it justifies its power in a bid to protect the final consumers from exploitation and develop uniformity of price across the country. The call to deregulate the downstream petrol sector is a call to end under recovery (subsidy) cost incurred by the federal government which, according to 2019 NNPC report, stood at N551 billion.

Amount spent on subsidy could be redirected to more profitable and growth stimulating ventures. Nigeria has long exited its boom days and should focus on justifying costs (spending) with projects that would unlock opportunities and value. Making a case for PPPRA, a deregulation of the downstream sector would likely lead to fallout of higher petrol prices against lower disposal income of households, especially poor households. Also, the call to collapse the multiple exchange rate windows currently maintained by the Central Bank of Nigeria (CBN) as a measure that will complement and make effective a deregulation will likely weigh further on consumers’ purchasing power. Given that inflation is likely to occur following a devaluation, imports will become more expensive, causing a cost-push inflation. Also, with exports becoming cheaper, manufacturers may have less incentive to cut costs and become more efficient. Therefore, over time, costs may increase. However, looking at the bright side, a deregulation in the down-

stream sector will unlock investment opportunities and boost productivity through healthy competition. Over the years, foreign firms have pulled out of Nigeria’s downstream sector as government control crimps margins and takes away the shine from a once buoyant industry. This, coupled with the removal of subsidies on petrol, will mean no more under-recovery cost, hence, saving the Nigerian federal government more money to deploy into more productive ventures. Opening the sector to market forces would improve profitability among firms and enhance business activities. Downstream firms on the Nigeria stock exchange (NSE) market are grossly underperforming as their fundamentals remain very weak, hence eroding investors’ holdings in those firms. Nigeria cannot afford to keep wasting this crisis. Now is the time to make bold reforms across key sectors of the economy. To unlock value, the federal government must stop taking baby steps. What it needs at the moment are giant steps that will leave positive impacts on their trail.

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Monday 15 June 2020

BUSINESS DAY

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Sunday 15 June 2020

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

ECONOMY

Honeywell, 7 others, get FG’s tax incentive, as Flour Mills, WAMCO applications declined OLUFIKAYO OWOEYE

igerian Investment Promotion Commission (NIPC) has released the Report of Pioneer Status Incentive (PSI) applications processed between 01 January and 31 March 2020. Pioneer Status Incentive is a tax holiday that grants qualifying industries and products relief from the payment of corporate income

tax for an initial period of three years, extendable for one or two additional years. The Q1 Report shows that 18 new applications and 1 extension application were received during the period. 8 applications were granted approvals-inprinciple, each for 3 years. The companies made a total investment of N151.916 billion, have 1,460 staff and are in various sectors including agriculture, construction, administrative service, infor-

mation & communication, and manufacturing. 1 company was granted extension for 2 years; the company had a total investment of N88.700 billion, while its staff strength was 573. The Report further revealed that Fujian Stone Company Limited was the only company granted Pioneer Certificate with confirmed production date. During the reporting period, applications from Flour Mills of Nigeria, Friesland

Campina WAMCO Nigeria Plc and Kuber Development Limited were declined. As at 31 March 2020, 39 companies were still enjoying PSI, they include Lafarge Africa Plc; Obu Cement Nigeria limited; Crown Flour Mills; Olam Hatcheries Limited, Hayat Kimya Nigeria Limited among others. No a p p l i c a t i o n w a s deemed abandoned, 125 applications were still pending, and no pioneer status certificate was canceled.

L-R: Jerry Oche, district manager, Lagos Railway; Daniel Odibe, general manager, External Affairs of APM Terminals Apapa, and Ifeoma Ezedinma, director, regulatory services, Nigerian Shippers’ Council, at the resumed evacuation of containers by rail at APM Terminals Apapa, Lagos.

FINTECH

AELLA inaugurates HEALTH INSURANCE with free 30-day coverage TEMITAYO AYETOTO

ella, a fintech startup, has stated its readiness to provide quality health insurance coverage for over 500,000 Nigerians in 2020 by making available a 30-day, N800, 000 worth of healthcare coverage for participants signed up on its Aella app. The company which recently launched Aella Care, a health insurance scheme in partnership with Hygeia; a foremost HMO in Nigeria to support the Federal Government’s drive in boosting the country’s insurance scheme, said the resolve to make it more attractive to get more people on board was reached based on the high number of people who signed up in its pilot week. This gave the hunch that more Nigerians will sign up on the Aella health insurance plan if knowledge about the benefits of protection from the rising costs of healthcare services in the country is understood. It said paid customers and new users will have access to general consultation, pharmacy benefits, antenatal care, and

Platform Capital gifts University of Lagos three Ultra-Modern learning facilities KELECHI EWUZIE

BANKING

Unity Bank begins recapitalisation process records N44.69bn gross earnings in 2019 HOPE MOSES-ASHIKE

…declares N550M PBT in Q1 2020

igeria’s commercial lender, Unity Bank Plc, has commenced the process recapitalization after declaring gross earnings of N44.59 billion for 2019 financial year, and N550 million Profit Before Tax (PBT) of N550 million in the first quarter of 2020. Continuing a path to strong growth started in 2018 financial year, after taking a bold corporate action to clean up its balance sheet in 2017, the bank has become stronger and better. The Bank has also posted PBT of N550m in its Q1, 2020 result released alongside with the 2019 Financial Year result to the Nigerian Stock Exchange (NSE) on Tuesday. A review of the Bank’s Q1 2020 result showed that the

lender recorded growth in Profit After Tax (PAT) by 9% to N506.07 million as against N464.87 reported in the same quarter in 2019. The audited 2019 full year result showed that the Bank recorded a Profit Before Tax (PBT) of N3.64 billion, while Profit After Tax (PAT) closed at N3.38 billion, thereby consolidating on the gains on the reforms instituted by the Bank to grow a healthy balance sheet since the past two years. A review of the Bank’s performance shows a relatively strong growth across key financial metrics such as the Net Operating Income for the year ended December 2019 which rose by 76.39% to N23.211 billion from N13.159 billion in the corresponding period of 2018.

delivery services, accidents, and emergencies, dental care, surgeries, and more on them for free for 30 days. Co-founder and chief executive officer, Akin Jones said to get under the health insurance care, interested persons must download the Aella App as the access is open for all to enjoy the benefits. Jones said though Aella App was launched as a digital lending platform, the recurrent theme where 25 percent of the loans were being used to pay for medical expenses, second only to small business loans and other bill payments opened up to them the situation in the health insurance system. The app, he said provides users with a fast medium to ensure their health, access loans, and pay bills. Its monthly subscription and credit payment model allows millions of underbanked users access services that have hitherto been inaccessible to them As of 2016, only three percent of healthcare expenditure in Nigeria was paid for using Health Insurance, and to bridge this gap, Aella is using a four-pronged approach which includes trust, access, pricing, and education.

Net Interest Income also posted strong growth as it grew by 18.06% to N16.493 billion from N13.970 billion the previous year. This is even as the Bank’s Total Asset saw a 71.93% increase to close at N293.052 billion from N210.80 billion in the corresponding period of 2018. The retail lender also recorded a total comprehensive income of N5.52 billion while Earnings Per Share stood at 28.94 Kobo. The result further showed that having better positioned itself to advance credit to the economy through the cleaning up of its loan book in 2017, the Bank grew its loan books by 135.87% to N104.02 billion in 2019 as against the N44.10 billion it closed in 2018.

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The Bank had embarked on several cost minimization initiatives that have continued to yield positive results. These measures led to a decrease in the Bank’s Total Operating Expenses to N19.57 billion in 2019 from N20.71 billion in 2018. The Bank will continue to implement these measures, which are aimed at building processes that attract efficiency gains in resource allocation throughout the Bank, to boost profitability and bring more value to shareholders. Commenting on the results, Tomi Somefun managing director/Chief Executive Officer of Unity Bank, said that “the potential in many aspects of the business as reflected in growing balance sheet of the Bank is indicative of market confidence in our repositioning efforts”.

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rowth markets focused, principal investment and advisory firm, Platform Capital has refurbished and donated 3 ultra-modern lecture halls for the University of Lagos Business School (ULBS)’s Executive MBA programme. The company in the process of carrying out the facelift, renovated the entire building and fitted the lecture halls with state-of-the art technology including interactive white boards, sound systems and versatile furniture, to ensure a best-in-class digital learning environment for students. Akintoye Akindele, chairman, Platform Capital notes that the launch of the world class lecture halls in the University of Lagos (UNILAG), was just phase 1 for the University of Lagos. Speaking at the handing over of the facility to University of Lagos management, Akindele notes that the company is to complete the entire building before the end of the year, install a full end-to-end fibre data link to complement the state-of-the-art telecom@Businessdayng

munications and infrastructure. According to him, “With that in place, from these lecture halls, we can run programmes from Harvard to Silicon Valley Business School to ISM Paris and many more business schools online and real time for our best and brightest on the continent”. “If we educate and expose one mind who goes, innovates and solves a problem, imagine the compound effect of that on Africa.” he said. In addition to the refurbished rooms, Akindele pledged the sum of $10,000 as a prize to the best graduating student, automatic employment at Platform Capital and its portfolio companies for the top 3 graduating students and internships for students of the ULBS Executive MBA programme annually. Oluwatoyin Ogundipe, vice-chancellor, University of Lagos while receiving the facility says it is a unique facility like will enable students to have online lectures real-time, adding that it will not only increase the university ranking, but will also increase her visibility as a university that is e-learning compliant.

Monday 15 June 2020

BUSINESS DAY

COMPANIES&MARKETS

Business Event

ENERGY

Sahara Energy affirms commitment to cleaner fuels OLUSOLA BELLO

s economies begin to recover and trade restrictions ease following the COVID-19 pandemic, an increase in demand for Very Low Sulphur Fuel Oil (VLSFO) should see prices strengthen Andrew Laven, Chief Operating Officer, Sahara Energy Resources DMCC, Dubai has said. In an article for leading trade publication Energy Voice, Laven explored key industry developments in the six months since the introduction of the IMO:2020 policy. Looking ahead, he reaffirmed Sahara Group’s commitment to cleaner fuels, welcoming industry-wide efforts to reduce maritime sulphur emissions and commending the energy sector’s transition to VLSFO without incurring anticipated delays. Sahara Group continues to demonstrate leadership in the energy sector globally, providing full backing for progressive policymaking in support of wider sustainability initiatives. Previewing Sahara Group’s plans for the United Arab Emirates and other markets, Laven reiterated the energy conglomerate’s preparedness for transitions to cleaner fuels. “For the foreseeable future this will

be the marine fuel of choice and we want to play our part in ensuring availability and supporting the supply chain that is necessary to keep trade moving.” In the article, Laven also looks ahead to the economic recovery following the COVID-19 pandemic and the preparedness of the shipping business to meet demand: “As the global lockdown eases and economies awake, the shipping business will inevitably see increased demand. International shipping is responsible for around 90% of world trade. This will drive demand for VLSFO and prices should strengthen. The build-up of stocks in advance of 2020 meant shortages did not occur and the reduction in demand through COVID-19 meant the supply chain hasn’t been fully tested.” Addressing fears that the energy sector would not adjust smoothly or productively to the IMO 2020 policy, Laven said: “While the talk was negative, the industry proved very capable of rebalancing and the shift to VLSFO started during the third quarter of 2019. The spike in HSFO was driven by restricted availability as storage shifted to VLSFO. The price of VLSFO rose, at times to higher than the next alternative, MGO. As the supply chain became more robust and stocks of

VLSFO built up, the differential to HSFO dropped. On occasions, HSFO actually became more difficult to purchase than VLSFO.” Laven also looked at the relative stability of the market around HSFO (Highsulphur Fuel Oil) in the last six months, noting that: “The most dramatic change was that the demand for HSFO collapsed, but so did the supply. As a result, the prices for HSFO have remained remarkably stable, despite the changes. In March, oil prices fell, owing to the impact of COVID-19 and oversupply, having an impact on fuel prices. Despite this, HSFO prices remained stronger than VLSFO.” Recognising the unexpected role that the coronavirus pandemic has played, Laven placed the state of the energy sector in a new context, pointing out that: “It has been a long six months since January 2020. There is no question now that the impact of the pandemic is likely to have a bigger effect on the marine business than even the most cynical projections around IMO 2020 would consider. The oil industry had quickly moved past the switch to a lower sulphur fuel, but COVID-19 has driven a level of economic disruption that will be much longer lasting.”

L-R: Founder & C.E.O, Recycle Point, Mazi Ukonu; Public Affairs, Communications and Sustainability Manager, Coca-Cola Nigeria Limited, Nwamaka Onyemelukwe; Recipient of Coca-Cola World Without Waste buy back Incentive Scheme, Mrs. Abidemi Salau; and Public Policy Analyst, Coca-Cola Nigeria Limited, Emeka Mbah; as RecyclePoints rewarded Word Without Waste Champions in celebration of World Environment Day, in Lagos on Friday.

L-R: Senior Special Assistant to Lagos State Governor on Agriculture, Mr. Gbolabo Olaniwun; Lagos State Acting Commissioner for Agriculture, Ms. Abisola Olusanya; Project Officer, Lagos State Abattoir, Oko Oba Agege, Dr. Omileye Ayokunle and Director, Veterinary Services, Lagos State Ministry of Agriculture, Dr. Rasheed Macaulay during acting commissioner inspection tour to Lagos abattoir in Oko Oba Agege on Thursday.

CSR

FBNInsurance gross premium written up 45% to N37.63 bn in 2019 MODESTUS ANAESORONYE

BNInsurance Limited in the 2019 financial year recorded sustained growth and sterling performance in all business segments, with Gross Premium Written (GPW) up to N37.63 billion, an increment of 45 percent compared to the N25.98 billion achieved in 2018 This was presented at t h e Co mp a ny ’s 2 0 1 9 e Annual General Meeting (e-AGM) held in Lagos recently. Speaking at the AGM, Val Ojumah, managing director/CEO FBNInsurance Limited, stated that the company closed the year with positive results and also made prompt claims payment to customers. Review ing the year ’s performance, Val Ojumah said “Our Gross Premium Written (GPW) rose to N37.63 billion, an increment of 45% compared to the N25.98 billion achieved in 2018; while Profit Before

Tax (PBT) appreciated by 28% from N6.13 billion in 2018 to N7.82 billion in 2019.” This performance, he attributed to the company’s sustained growth and continuous penetration into the retail segment of the industry. “In the same vein, as a responsive and reliable insurer that keeps its promises, we promptly paid claims to our clients to the tune of N9.90bn which is a 130 percent increase from N4.31bn paid in 2018. One of our primary objectives is to help people, businesses and communities get back on their feet when the unexpected happens. Therefore, it has been – and continues to be – our commitment to transact business in a sustainable manner that ensures that we are there for our customers today and long into the future. It is this disposition that is once again responsible for our accomplishments in 2019 which represents our best year so far in the www.businessday.ng

history of FBNInsurance,” he added. Adenrele Kehinde, chairperson of the Board of Directors of the company, while commenting on the company’s financial returns, ascribed the performance to the sporadic growth and sterling performance of the company in 2019 which was made possible through mining the “hidden treasures” in the Retail life insurance market which holds enormous and growing opportunities for the company. Also, in demonstration of its commitment to its shareholders, the insurer announced a dividend of 97k per share, representing a 49 percent increase from 65 kobo that was declared in 2018. FBNInsurance has consistently paid dividends to its shareholders since 2013. Recall that FBNInsurance recently won the 2019 Best Life Insurance Company in Nigeria Award at the World Finance Award held in London.

Cecelia Ezeilo (3rd, l); deputy governor, Enugu state; Afolabi Adeleye (4th, L)representative of the managing director of Nestle Nigeria Plc, with other dignitaries during the handover of COVID-19 pandemic lockdown palliatives by Nestle to Enugu state government in Enugu /NAN

50 notable professionals make the maiden edition of Workbooth Career influencer awards

ifty professionals from across Africa have been unveiled as finalists of the maiden edition of the Career Influencer Awards. The initiative which was put together by the Pan African digital management magazine, The Wo r k b o o t h Ma g a z i n e, seeks to identify and celeb rat e i n d i v i d u a l s w h o have gone out of their way to support colleagues, associates and mentees to achieve career excellence and be outstanding as professionals. Of the fifty, ten including marketing expert, Fiyin Toyo, HR expert, Olufunke Amobi, Leke Oshiyemi, and Modou Njie from The Gambia, were selected by an external panel as elite members of the Awards Platinum Club. Others like Olufemi Ibitoye, Wale Olajumoke, May Ogoibe, To-

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yin Adesola, Adeniyi-Adeleye Sandton and Yewande Jinadu also made the top ten list. The final 50 however, had the likes of HR specialist, Yemi Faseun Marketing professional, Ayodeji Razak, entrepreneur Seni Adetu as well as Martin Wanjobi from Kenya and the duo of Sulani Nyimbili and Doris Sakupwanya from Zambia. According to the Editor of the Workbooth Magazine, Tunde-Success Osideko, there are many outstanding career stars in Africa but they are unknown because they do not necessarily hog the limelight. That is why we want to shine the spotlight on them. We believe that this recognition will lead to validation, celebration and perpetuation of good deeds across Africa. He continued, ‘At The Workbooth Magazine, we are keenly interested in the growth of every African professional but we know @Businessdayng

that for growth to happen there must have been a genuine labour of love demonstrated in the form of mentorship, coaching and support. We thought to celebrate the very many men and women who take time off to be blessings to others because they really, are the backbone of a thriving workplace and excellent professionals’. Other finalists include Goodness Armstrong, Emmanuel Michael, Funmi Adegbola, Ayodele Olatunbosun and Beatrice Miangogo. Seyi Iweani, Adekemi Adisa, Udochi Anokwu, Gbenga Totoyi and Ayodeji Iwayemi were some of the other awardees. The ceremony though held virtually on Saturday, 13th of June had in attendance, former CBN and ECOWAS HR Director, Chizoba Mojekwu as the Guest Speaker and celebrities including singer, Praiz, comedian, Dr Frick as well as other professionals.

Monday 15 June 2020

BUSINESS DAY

In Association With

The fire this time

Police violence, race and protest in America Will protesters in American cities bring progress, or set back the cause they champion?

NE HUNDRED THOUSAND Americans are dead from a virus. A feat of space flight demonstrates American ingenuity. In cities across the country, protests sparked by racial injustice are showing an ugly side of America to the world. In November voters must choose between a Republican running on a law-and-order platform, and an uninspiring vice-president running for the Democrats. The year is 1968. It is also 2020. In 1968 the virus was flu and the space mission Apollo 7. But the injustice had the same corrosive effect. As James Baldwin wrote in the early 1960s, racism “compromises, where it does not corrupt, all the American efforts to build a better world— here, there or anywhere.” Today more than 350 cities nationwide erupted after George Floyd, an unarmed African-American man, was killed by a white police officer (see article). For nearly nine agonising minutes, deaf to Mr Floyd’s pleas and the growing alarm of the crowd, the officer choked the life out of him. No wonder the spark ignited a bundle of kindling lying nearby. The fire this time is burning for the same reasons it has so often in the past: that many AfricanAmericans still live in places with the worst schools, the worst health care and the worst jobs; that the rules apply differently to black people; the fact, rammed home by covid-19, that whenever America suffers misfortune, black America suffers most; a sense that the police are there to keep a lid on a city’s poor, even as they protect wealthy suburbs. And, yes, the sheer intoxication that comes from belonging to a crowd that has suddenly found its voice, and which demands to be heard. The cycle of injustice, protest, riot and conservative reaction

has come round many times since 1968. So many, that it would be easy to conclude that police violence and racial inequality in America are just too hard a problem to fix. Yet such pessimism is unwarranted. It is also counterproductive. Activists sometimes charge that the entire criminal-justice system is racist. Police unions protect their members, including the rotten ones. In recent days a police car has rammed protesters and officers have assaulted people on the street. But the system is made up of thousands of jurisdictions and police departments. They are not all the same. For every Minneapolis, where some thuggish officers went on “warrior” courses and saw themselves as an occupying force, there is a Camden, New Jersey. Camden’s police force was so broken that in 2013 it was disbanded and the city started afresh. Its police chief was this week able to march with peaceful protesters through their city. Policing America is hard because America is more violent than any other rich country and

its citizens more heavily armed. About 50 police officers are murdered while doing their job each year. But the sustained falls in crime over the past three decades have made room for less warlike law enforcement—by training officers to defuse confrontation, not seek it, and by making them accountable whenever they use force. Many police departments, including Camden, have already taken this chance to turn themselves round (see article). Others have not, partly because the federal government under President Donald Trump has eased the pressure for change. But the police and prosecutors are under local democratic control. They can be made to embrace reform if enough people vote for it. Pessimism is self-defeating, too. It is a short step from thinking that America’s original racial sin is so deep that it cannot be overcome, to thinking that smashing and burning things is justified, because it is the only way to get attention. Yet if today’s protests slide into persistent rioting, as in 1968 after Martin

Luther King’s assassination, the harm they cause could be felt most keenly in African-American districts. Those people who can leave will. The left-behind will be worse off, as home values plunge and jobs and shops disappear. The police may withdraw, leading to an increase in crime, which in turn may eventually bring more violent policing. The scars will be visible for decades. Across the country, black leaders, who have seen this happen before, are telling protesters not to undermine their cause. “A protest has purpose,” said Atlanta’s mayor, Keisha Lance Bottoms, condemning the vandalism in her city. In recent days protesters have heeded that and have been trying to restrain those who just want to start a fire—some of them white troublemakers. Black leaders also understand how riots can wreck a political cause. When neighbourhoods are ablaze, the rest of the country focuses on putting out the fires. Harm to police officers in riots may cause voters to forget where their sympathies lay when it all began. When rioting takes hold,

those who support the protests may find that their demands for change are drowned out by the clamour for order to be reestablished. In a presidential election, fear often beats idealism. Mr Trump seems to want this to be the choice in November. He has encouraged his supporters to clash with protesters outside the White House and been looking to deploy active troops alongside the national guard so as to “dominate” what his people call the battlespace (see article). Law and order helped Richard Nixon beat Hubert Humphrey in 1968. It could work again. Yet fear betrays Mr Floyd’s memory. The more America is united, the better it can strive to ensure that all its citizens are able to live by its founding ideals. Unity will not come from Mr Trump, who has spent four years trying to divide the country. Instead, the leaders of protest movements, along with America’s mayors and police chiefs, must inspire it themselves. If the protests are overwhelmingly non-violent, they also carry a promise. Not that the protesters will get everything they want, nor that the injustices holding back AfricanAmericans can all be put right at once, but that tomorrow can be better than today. By the end of the decade in which Baldwin wrote of the need to heal America, the country had set about dismantling the legal edifice of racial segregation. It was also in the grip of a reaction from those who thought civil rights had gone too far. America is like that. Progress tussles with its opposite. But Americans have been tugging away at racism for half a century. This week, when the cruel death of a black man drew protesters of all races onto America’s streets, it was not just a sign of how much work lies ahead, but also that progress is possible.

Monday 15 June 2020

BUSINESS DAY

In Association With

Tomorrow’s problem

Don’t worry about inflation—yet Monetary stimulus is unlikely to spark sustained price rises while labour markets remain depressed

EVER BEFORE have central banks created so much money in so little time. In the past three months America’s monetary base has grown by $1.7trn as the Federal Reserve has hoovered up assets using new money. As The Economist went to press, the European Central Bank (ECB) was expected to expand its emergency bond-buying programme beyond its initial size of €750bn ($830bn). Money-creation has tacitly financed much of the emergency spending unleashed to help economies through the pandemic. It has also propped up asset markets. The Fed is buying junk bonds; the Bank of Japan has stepped up its purchases of equities and could soon own over a fifth of many large Japanese companies (see article). All the while economies are contracting. As a result, America’s base-money-to-GDP ratio may grow by nine percentage points in the second quarter of 2020. That would be by far the biggest such rise in decades. It is only natural for moneycreation on this scale to spark fears about inflation, which is the consequence of too much money chasing too few goods and services. All the more so because the pandemic has constrained production, at least temporarily, by forcing factories and shops to close and limiting global trade. It is no surprise,

therefore, that a vocal minority of investors and economists predict an inflation surge, including researchers at Morgan Stanley; Ray Dalio, a hedge-fund manager; and a clutch of monetarist academics. Similar forecasts after the financial crisis in 2007-09, when central banks’ balance-sheets also ballooned, proved to be wholly wrong. But, in contrast to then, much of today’s stimulus is ending up in households’ bank accounts. In April, for instance, Americans’ total incomes rose by 11% thanks to emergency

support from the government (and, indirectly, from the Fed), even as overall wages and salaries fell by 8% as 20.5m workers lost their jobs. More money in consumers’ pockets, according to hawkish logic, means this time will be different—and that inflation is more likely. It is not. Several reasons suggest the hawks will probably be proved wrong again. Even accounting for the fall in oil prices, inflation is sharply lower in most places because households are slashing their consumption and saving more (see

article). Some of that is by necessity—it is hard to spend when shops are shut. But even as economies reopen, spending is likely to remain tepid, not least because unemployment is soaring. America’s latest monthly unemployment figures, due on June 5th, are likely to show a jobless rate of 20%. It would be similarly high in many other countries, like Britain, were they not generously subsidising employers’ payrolls. Job insecurity in a depressed labour market is reason enough to save. And governments cannot replace

lost incomes indefinitely. Many are already thinking about how to wind down their support in order to get people back to work. The immediate risk, therefore, is not too much inflation, but too little, amid a slow recovery and a painful economic restructuring. Many firms will emerge from lockdown with huge debts. Many workers may need to move from one industry to another. In such an environment the chief danger will be that policymakers withdraw stimulus too soon. That is what happened in 2011, after the global financial crisis, when the ECB raised interest rates. Financial markets seem to expect such stimulus to be insufficient. Their inflation expectations suggest the Fed, the ECB and the Bank of Japan will all undershoot their targets on average for the next decade. Even America’s buoyant stockmarket is favouring firms that can thrive in a low-inflation environment. Only after economies and job markets have healed will a sustained rise in inflation become a risk. Governments will emerge from the pandemic with much higher public debts, and they may be tempted to press monetary policymakers to keep interest rates low rather than to apply the brakes. Even then, inflation will become a threat only if central bankers buckle under the pressure and thus start to lose the faith of the markets. In other words, there will be a time to worry. But it is not now.

Made in China

Will the Wuhan virus become a pandemic? Probably. But public health services can help determine how severe it turns out to be

WO THINGS explain why a new infectious disease is so alarming. One is that, at first, it spreads exponentially. As tens of cases become hundreds and hundreds become thousands, the mathematics run away with you, conjuring speculation about a health-care collapse, social and economic upheaval and a deadly pandemic. The other is profound uncertainty. Sparse data and conflicting reports mean that scientists cannot rule out the worst case—and that lets bad information thrive. So it is with a new coronavirus, known as 2019-nCoV, which has struck in China. The number of reported cases grew from 282 on January 20th to almost 7,800 just nine days later. In that time four reported cases outside mainland China have multiplied to 105 in 19 territories. Doubt clouds fundamental properties of the disease, including how it is passed on and what share of infected people die. Amid the uncertainty, a simulation of a coronavirus outbreak by Johns Hopkins University in October, in

which 65m people lost their lives, was put about as a prediction. It is not. Those are the right questions, though: will the new virus become a global disease? And how deadly will it be? A definite answer is weeks or months away, but public-health authorities have to plan today. The best guess is that the disease has taken hold in China (see article) and there is a high risk that it spreads around the world—it may even become a www.businessday.ng

recurrent seasonal infection. It may turn out to be no more lethal than seasonal influenza, but that would still count as serious (see article). In the short term that would hit the world economy and, depending on how the outbreak is handled, it could also have political effects in China. The outbreak began in December. The repeated mingling of people and animals in China means that viral mutations that infect humans are likely to arise there; and mass

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migration to cities means that they are likely to spread between people. This virus probably originated in bats and passed through mammals, such as palm civets or ferret badgers, ending up in Wuhan’s wet market, where wild animals were on sale. Symptoms resemble flu, but can include pneumonia, which may be fatal. About 20% of reported cases are severe, and need hospital care; about 2% of them have been fatal. As yet, there is no vaccine or antiviral treatment. The greatest uncertainty is how many cases have gone unrecorded. Primary health care is rudimentary in China and some of the ill either avoided or were turned away from busy hospitals. Many more may have such mild symptoms that they do not realise they have the disease. Modelling by academics in Hong Kong suggests that, as of January 25th, tens of thousands of people have already been infected and that the epidemic will peak in a few months’ time. If so, the virus is more widespread than thought, and hence will be harder to contain @Businessdayng

within China. But it will also prove less lethal, because the number of deaths should be measured against a much larger base of infections. As with flu, a lot of people could die nonetheless. In 2017-18 a bad flu season saw symptoms in 45m Americans, and 61,000 deaths.

BUSINESS DAY

Monday 15 June 2020

INTERVIEW

I am most concerned about the second wave of COVID-19 in Nigeria - Sani-Gwarzo Nasir Sani-Gwarzo, is an accomplished public health physician with decades of experience in disease control and epidemic response and, currently, the Permanent Secretary, Ministry of Commerce, Trade and Investment. Sani-Gwarzo, an indigene of Kano, was assigned by the Federal Government through the Federal Ministry of Health under the leadership of Hon. Osagie Ehanire, to lead a fact-finding and technical support delegation to Kano amidst the fast rising COVID-19 cases and “mysterious deaths” in the State. He, in this exclusive interview with the BusinessDay’s Bashir Ibrahim Hassan, speaks on the successes his team recorded, challenges encountered, the maximum support received from the Minister of Health and the Governor of Kano in discharging the onerous task, amongst others. Excerpts:

here was Kano before your inter vention, in terms of infection and deaths and where is it now after your intervention? Kano was a very hot topic at the very beginning. We intervened out of agitation from several quarters, and following the request from the governor himself, and the directive from the minister of health and, of course, the approval of the President for the team to be constituted and dispatched to Kano. Once the team was selected to visit Kano, I was appointed to lead the mission, having spent most of my life in public health, involved in disease control and epidemic response. However, I was no longer in the sector, as I had moved to the Federal Ministry of Industry, Trade and Investment as the permanent secretary. We went to Kano on the 28th of April, with people dying, and more cases of Covid-19 being reported. We could see the concern of people, the apprehension and the confusion. That was the situation. But I am happy to say that at the end of our assignment, the situation has stabilized and normalcy is returning -- it has not returned fully, but the death rate has started reducing to a pre-epidemic level; and although the number of Covid-19 cases was rising, hope in the minds of people increased, and people started accepting the disease as a reality, going for testing; with those who test positive no longer scared to go for treatment. The treatment centers are performing and people are being discharged from the centers. More people are coming forth to volunteer to support. People who had tested positive and tested negative at the end of the day were openly requesting to be made public. At the advocacy level, the Kano state government deserves commendation, particularly for the leadership of Governor Dr. Abdulahi Umar Ganduje He is one governor that has, truly speaking, shown personal leadership -- he did not rely on hear-say, but was engaged on a day-to-day basis, participating virtually in every programmme. That shows you the level of his commitment. On the technical side, coordination was experiencing major hitches at the time we visited, when

Nasir Sani-Gwarzo

the entire Kano state response team was facing massive difficulties, with about 4-5 members of the team infected with the virus and were in isolation and some in self-quarantine. So the committee was not fully functional at that time. New members were then brought into the team. Then moving to laboratory and testing level, for those who come down with the disease, it took a long time for their samples to be sent to Abuja or other centers for testing. Although the Kano testing centre was established and screening centers in Bayero University, some members of the laboratory testing teams got infected and it had to be closed temporarily at the time we went to Kano. So samples had to be shipped on daily basis to Abuja, with attendant delays. At the time there was over 1000 pending samples in Abuja without results coming back, and with the level of fear, apprehension and tension, some patients even died before their esults came back. Putting heads together with the state team, we were able to www.businessday.ng

put a lot of things in shape, so the laboratories were reopened and changes were made in order to make sure that infection control was constituted. We brought a team of experts from Irrua Specialist Teaching Hospital in Edo State that helped in building not only the capacity but also the confidence of health workers on how to do things in a dangerous environment while being thoroughly professional and safe at the same time. Although the situation was dangerous, you could see that the level of confidence and availability of materials especially infection prevention and control materials, helped in reducing the risk. I’m happy to say that from the day we constituted that team, no other persons were infected among all the health workers. The testing gradually rose from 0 to 44 and kept increasing in the particular center, another centre was opened and its testing capacity rose from 96 to 180 and at the time we left it was at 360 capacity, the third center was opened, it started

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with a capacity of 150 and kept rising to about 500, so by the time we left Kano, on the average Kano state alone test about 660 daily within these three centers, and it supported Jigawa, Kano and Katsina states. Samples were being brought from these states for testing and we had a redoubled capacity that could be expanded to 1500 per day out of the three centers so there is a clear achievement in that aspect. The number of patients in isolation, quarantined or intensive care facilities at three levels of care rose phenomenally from what we met. Initially it was about 3 centers; Dawaki, Muhammadu Buhari hospital and Aminu Kano teaching hospital that had a holding center, but by the time we left, we had other holding centers from the Kano state government in partnership with the Dangote foundation, with BUA and the teaching hospitals of Aminu Kano and Bayero universities. Bayero University Teaching Hospital’s capacity was increased with a second lab that could test 500. There were also expansions to facilities at Dala hospital, former Daula hotels, the Neurology Center and the one at the stadium was almost finalized by the time we left. Then in addition to the increased holding capacity, the quality of care significantly improved because we trained the care givers, the clinicians, the laboratorians, the nursing workers mostly in the areas of infection control. The number of people being catered for was increasing. One good thing is that the government became more responsive to criticism and not only admitted its errors but improved on its actions. For example, in the area of feeding the patients, when patients complained about late feeding, the timing improved significantly. Through dialogues between the government of Kano state and NCDC, the issue of when to discharge patients were amicably resolved when agitations erupted among the patients. The other area of improvement was the operation of the rapid response team. The Kano issue started with about 8 teams of rapid response providers who would go to houses and pick samples, pick patients and take them to centers if their results are out, but finally the team had to increase from 15 to 23, which grew to 66 as we aimed for 100. In addition to the Kano state government, agencies like INEC, @Businessdayng

Dangote, and BUA, Federal Road Safety Commission and Federal Ministry of Health provided vehicles, which increased the efficiency of the response. What were the challenges you faced? Of course, when you bring team together there must be challenges, when team members come from different backgrounds in the health delivery system, harmonizing efforts around new norms can be difficult. Sometime, at the beginning it was difficult, especially to get the technical team to hold meetings because they were always on the move running from one place to another. Of course, they were responding but it would have been more catalytic to sit down and harmonize. But we soon sorted things out. The governor had established his own personal think tank, he had a team that assemble good materials for him, the team comprised of retired workers, people who had worked in good places like USAID, national and international programs, he brought them together to advise him and they made some good inputs so we find it seamless to work with them. The think tank in the team with development partners with our own team collaborated and produced this document, which is the strategic incident action plan for Covid-19. This document provide the entire response, structure and functionality, the things being addressed, the budget and timelines, anybody who wants to work in Kano state can now use this. So, this now, unified the response. It was a combination of team effort that required assurances to be given that we were not here to take anybody’s job, or to duplicate what they were doing but we were working with one plan and one response. So they understood that with time and we worked together. We did not do it, we only helped the state government in doing it. All we did was to help them coordinate it most professionally. What could have been the situation without your intervention in Kano? There are state governments that have done a lot. At the time we went to Kano, things had started improving, particularly the fear had reduced. That is very important in epidemic response and crisis management. It’s not just in reducing the dan-

Monday 15 June 2020

BUSINESS DAY

INTERVIEW

Nasir Sani-Gwarzo

ger. Increasing the people’s confidence is very important and we are very happy to note that after the improvement in Kano the minister said that we should cover other states and we suggested to him to make Kano the hub. The governor of Kano said he would support and gave us a secretariat. That secretariat helped us -- it had everything we needed under one roof. It had accommodation, feeding, conference rooms, technical break-out rooms, offices and even stalls where we kept our supplies and a place to park vehicles. So that gave us the opportunity to shuttle other states and we invited other states to come to Kano for training. We virtually covered about 9 states -- Kano, Kaduna, Jigawa, Sokoto, Bauchi, Borno, Gombe were visited while we remotely engaged the two we could not visit -- Yobe and Zamfara. One of the best responses I saw was Borno state. They had a wellarticulated plan but we also at every stage gave them the lessons learnt in Kano and many of them readjusted their plans accordingly. Do you think the deaths before the intervention were preventable? Typically, with every epidemic, when an epidemic starts you can call every death preventable in terms of its cause. But, with the benefit of hindsight, if we had known it was Covid-19, we would have applied the same tests that we applied at the end of the day. But, most of the deaths were not in hospitals, but mostly at home. We did what we call verbal autopsy - an internationally agreed system of study that gives you some degree of accuracy on what you want to find out. And, we did a set of questionnaire and case definitions. If you have any person that reported to have in the period www.businessday.ng

come up with these symptoms, it is likely to be Covid-19; and also we went ahead to see what happened to relatives. So, with all these factors put together, we aggregated the numbers to give a certain level of accuracy what could have been the cause. When we did that about 68.2 percent came out very high on the Covid-19 probability. What we recorded was circumstantial evidence. We took samples from the dead persons, from the nausea swabs and also the throat swabs and tested and the biological evidence was there that it was Covid-19, so that was why we concluded that at the peak of death, 60-68 percent could be Covid-19-related. After doing direct testing on dead persons, we also kept testing people that were dying. All around the world we see countries with the best response reopening even without obeying guidelines. As Nigeria begins the gradual easing of the lockdown, what is your greatest fear, do you think we are prepared? My concern remains that in health issues there is no level preparation that is ever enough. So I still have my apprehension and concerns that with all the level of achievement made and the impact of the lockdown that has resulted in a downward trajectory of the epidemic and the fact that we are not out of the wood yet. Typically, 80 percent of infected persons do not show symptoms, but how do you know whether we are testing people who are sick and that is the 20 percent? Unless we do community level testing, we will not be able to get the remaining 80 percent. So with all these fears and the fact that now after the lockdown people are engaging in more risky behaviors and oblivious of the fact that a lot more damage can be done. I am

NEWS most concerned with the possibility of a second wave, and if this happens it can be very serious. This is not the time to celebrate or reduce guard and preventive measures but this is the time to consolidate them and prepare for the worst even while we are praying for the best because the second could be dangerous. Why is the level of infection and deaths low in Africa and Nigeria? They are not necessarily low, but lower, in comparative scale, with other countries because those countries that are reporting higher deaths, they report virtually every death, every infection. They are not just testing sick people but are doing community testing and that is why they have bigger figures and we are not doing any of these two, we are not doing community testing, we are not testing sick people or recording every death; else we would have seen a higher figure. Also, other things that are in our favour include the demography of Africa. There is a - shaped demography, where we have more people at the base, more younger people and very few elderly people around the age of 60-65. Who does the epidemic consume mostly? The elderly and the sick, but in Africa we have more youth and below hardly go beyond the age of 60 and those that do are less in number compared to the elderly population in European countries. So you find out that more people will die in those countries because the age factor. Number 2, our epidemic started later after theirs started; so we had learnt a lot of lessons on how to prepare -whereas they were hit unprepared and I’m sure you realize that our index cases came in much later after their deaths were already at its peak. There are other factors. While some of them are speculative, others are real; but you find out that it has spared us and it is a blessing for Africa. Do you see Kano having the capacity to implement the recommendations in the document developed, and what legacy do you think you would leave behind in the fight against the virus in Kano? The job is not over and we have made recommendations to the ministry of health to continue to maintain the hub that we have created in Kano to cover the other states at least for three months or more. Like I said, there is no state where we did not establish something directly. It was in line with their themes. As they were implementing, we were providing support. There was no place we left a vacuum in terms of capacity, confidence building and technical know-how, ability to respond and ability to continue to scale up response. Most of the training we did was not enduser training but training of trainers, master level training. So you can see the states really moving forward with it and I have a lot of confidence that the states will keep moving and it will add value if from time to time the Federal Ministry of Health intervenes and supports by providing new insights and resources, because this epidemic can easily exhaust the capacity of states.

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Lagos requires 260,000 units of blood annually to meet transfusion demand JOSHUA BASSEY

agos State commissioner for health, Akin Abayomi, says the state requires about 260,000 units of blood annually to meet with the growing blood transfusion demand at health facilities in the state. Abayomi said this on Sunday during a Zoom Live Feeds organised by the Lagos State Blood Transfusion Service (LSBTS) to commemorate this year’s World Blood Donor Day, noting that efforts were being intensified by the state government to meet and surpass this requirement through recruiting and retaining voluntary blood donors. “To maintain an adequate blood supply, one to 2 percent of the population needs to become regular blood donors; this is about 260,000 in a growing population of over 26 million in Lagos state. The regular supply of blood is essential as the lifespan of blood is very short. Each unit of blood donated remains viable for 35 days. Thankfully, we are working hard in partnership with the public and private sector, non-governmental organisations, religious bodies, youth organisations to achieve this target number,” he said. The theme of the 2020 World Blood Donor Day is “safe blood saves lives, give blood and make the world a healthier place.” The commissioner said encouraging and promoting voluntary blood donation in a safe and conducive environment was the goal of the state government. “This year’s theme has come in at a time the ongoing COVID-19 pandemic and the various phases of lockdown and travel restrictions have brought about some challenges to our blood donation drives. “The need for blood transfusions

and medications based on blood components has however continued despite the COVID-19 pandemic, the LSBTS voluntary blood donation centres were open all through with an extension in our opening hours,” he said. He said there was scientific confirmation that the coronavirus was being transmitted by blood transfusion. Rather, he urged for strict safety measures including hand washing sites, use of hand sanitizers, and use of personal protective equipment as well as maintaining social distancing. He explained that making the world a better place was not only about blood collection from donors or its transfusion, but the collection of convalescent plasma from those that had recovered from COVID-19 infections in preparation for an interventional study in the treatment of patients with severe COVID-19 infection. While noting that there is no substitute for blood, the commissioner noted that the lives of hundreds of patients including pregnant women, children with severe anaemia, accident victims, patients with cancer and haemoglobinothies are saved by blood transfusion stressing that adequate and timely supply of safe blood is needed to continue helping those people who are in need of blood transfusion. “We therefore cannot over emphasised the need to ensure availability of blood in our blood banks where patients who require blood transfusion can be readily supplied. While I would like to say thank you to all voluntary blood donors who have made it a duty to give the gift of life – blood, I would also like to use this medium to encourage citizens who are healthy and fit and aged from 18-65 to please give blood.”

FITC hosts global business experts on resources for Enterprise Risk Management, Business Continuity SEGUN ADAMS

inancial Institutions Training Centre (FITC) in its continuous bid to provide knowledge-driven solutions to the financial services and associated sectors will host the Enterprise Risk Management Series themed – ‘Enterprise Risk Management and Business Continuity Planning’ on June 19, at 10am. The FITC Enterprise Risk Management Series is an innovative programme under the FITC Business Impact Series (BIS) umbrella. BIS is a global platform designed to offer business insight, engagement, knowledge, and excellence to young, middle and senior-level professionals across diverse sectors including financial services, energy, technology, manufacturing and other sectors across the sub-Saharan Africa. In 2020 alone, FITC has delivered several virtual programmes under its Business Impact Series with over 9,000 attendees from more than 860 organisations spanning 43 countries and five continents including Africa. The risk landscape is becoming ever more challenging with the impact, scale and scope of events increasing simultaneously in unpredictability, probability and value. To successfully steer organisations towards resilience and value, senior decision-makers need to embed enterprise risk management and

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business continuity management capabilities within their organisations. They need to build meta-readiness and deliberately design systems, processes and culture to maintain continuity and adequately respond to any future crisis while ensuring an effective (leadership) succession plan. This improves an organisation’s resistance to any severe business disruption, regardless of the event’s risk, scope, rarity and impact. The FITC Enterprise Risk Management Series aims to bring together top executives and industry experts, to share knowledge on contemporary and relevant issues in enterprise risk management and business continuity planning. Topics to be covered include; Business Continuity Planning: Taking Planning to Action; Insights, Tools and Resources for Enterprise Risk Management and Business Continuity in time of Crisis; The Future of Enterprise Risk Management: Key ERM Strategies and Managing the Risk Landscape with Business Continuity Management and Enterprise Risk Management Processes. The line-up of speakers for this programme include - Oscar Onyema, CEO, Nigerian Stock Exchange as keynote speaker; Juliet Ehimuan, director, West Africa, Google; William Wilson, head, Operational Risk, Africa & India, First Rand Group; Adedoyin Odunfa, CEO, Digital Jewels, and Ayotunde Coker, managing director, Rack Centre.

Monday 15 June 2020

BUSINESS DAY

MARKETS INTELLIGENCE Supported by Asset Management Corporation of Nigeria (AMCON)

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Week Ahead

Watchlist

Snap shot of cement makers’ Q1 performance BALA AUGIE

e crunched the numbers of major players in the industrial goods sector and we found that they weren’t tasty, but some of them bucked the trend. A decade ago investors had betted that burgeoning middle class, and infrastructure deficit would spur the industry to unprecedented growth. However, protracted economic downturn means procrastinators actually got it wrong as companies’ profit withered away like chaff blown away by the wind. In 2016 when the economy went into a recession, the construction sector declined by 5.9 percent compared to the growth of 4.4 percent recorded in 2015. Dangote Cement, the largest

company by market capitalization saw gross profit margin fall to 43.72 percent as at March 2020, from 45.90

percent the previous year. Lafarge Africa’s gross profit reduced to 27.67 percent in March 2020 as against 30.32 percent as at March 2019. BUA Cement, the third largest firm by market capitalization, saw gross profit dip to 27.67 percent as against 30.31 percent the previous year. This means these companies are not making money on each product they sell, leaving little money to cover operating expenses and other finance cost. No business thrives in a sluggish

economy, and slow construction activities have resulted in weak sales volume. According to the Q1-2020 GDP report published by the National Bureau of Statistics (NBS) on 24 May 2020, economic growth slowed to a nine-quarter low of 1.87 percent yoy from 2.55 percent yoy in Q4-2019 and 2.12 percent yoy in Q2-2019. Additionally, the statistics body added that capital importation for the first quarter (Q1) 2020-the total amount of foreign investment inflows into the Nigerian economydeclined by 31 percent year on year (y/y) to $5.85 billion in the first (Q1) 2020 from $8.51 billion in Q1 2019. There are tough times ahead for cement makers as Federal Government has reduced the amount budgeted for capital expenditure by 20 percent in the 2020 budget due to coronavirus pandemic shocks on revenue and crude oil price. Constructions activities have been suspended across the country due to lockdown measures impose by government to curb the spread of the virus. The International Monetary Fund says Nigeria’s economy is expected to shrink by 3.4 percent this year and Africa’s largest economy could face a recession lasting until 2021. The insidious virus has shattered Nigeria’s economy as Brent crude oil fell from $70 per barrel at the dawn of 2020 to $20 per barrel as of April 22, 2020.

7.5% VAT fails to spur government income in Q1 …FG suffered 42 percent VAT income shortfall in Q1 IFEANYI JOHN

hen the Federal Government raised the Va l u e A d d e d Ta x (VAT) in Nigeria to 7.5 percent, it was hoping to raise up to N73.14 billion in the first quarter of the year. However, as at the end of March, the federal government reported that total VAT earnings accruing to the Federal Government in the first three months of the year was only N42.23 billion, representing a revenue shortfall of around 42 percent. The decision to increase VAT was to help boost non-oil government income in order to further diversify the Federal Government

revenue sources and ensure that the country continues to make progress in diversifying the economy away from oil. The new VAT was implemented on February 1 according to reports from reliable sources. However, like almost every other thing in 2020, VAT earnings performance has not gone according to plan. Total VAT income expected in the first quarter of the year was N522.45 billion but the country could only collect N296.78 billion in Q1 as weaker economic growth and consumer spending weighed heavily on VAT performance. From the N296.78 billion, only 15 percent flowed to the Federal Government based on the revenue sharing formula, providing them

P.E

SHORT TAKES N312m After a disappointing 2018, Fidson healthcare seems to have regained its mojo as it records an after-tax profit of N312 million in full-year 2019 for the period ended 31 December. Revenue dipped 13.5 percent to N14.06bn from N16.22bn in the same period in 2018. Efficient cost management saw its cost of sales decline 17.35percent to N8.19bn from N9.91bn

5 The stock market declined for the fifth-straight trading session on Friday to end its worst week after CBN’s CRR policy weighed on banking stocks and set off 2020’s longest bear-run. Nigerian equities fell for all five trading sessions last week to close 2.65 percent lower weekon-week, and end January on a very different tempo than it began the month. Bank stocks shed 5.17 percent to push Year-to-date return to 7.46 percent, down from around 10 percent at the beginning of the week, while analysts say the bearish sentiment will likely extend to trading this week. “Next week, we expect bearish pressures on the equities market to remain, as investors continue to selldown on banking counters,” said analysts at Lagos-based Chapel Hill Denham in a note to clients.

N23bn with a gross VAT income of N44.52 billion while the State Government and Local Government collected N148.39 billion and N103.87 billion respectively. The VAT sharing formula provides State Government with 50% of the pot while Local Governments get 35 percent of whatever is collected as VAT in the country. The abysmal performance of VAT earnings meant that it was only able to contribute 4.4 percent of total revenue generated by the Federal Government in Q1. The federal government earned a total of around N950.56 billion in Q1, about N1 trillion less than budget projections. Based on current trends, FG could finish 2020 with a revenue shortfall greater than N3 trillion as Nigeria projects an economic

contraction of 4.4 percent this year, about 1 percentage point higher than International Monetary Fund (IMF) prediction of 3.4 percent economic contraction in the country. “As the economic downturn worsens, it is very difficult to see how the Federal Government revenue performance can improve significantly in the remaining months of the year. However there is renewed hope that oil revenue which accounts for half of Federal Government will outperform current revenue expectations on the budget as oil prices is currently trading above $40 per barrel, more than 150 percent above the new oil price benchmark of $25 per barrel,” said Obinna Uzoma, chief economist at EUA Intelligence

Interswitch Limited has listed its N23bn callable senior unsecured bond with a tenor of seven years at a fixed rate of 15percent, embedding a call option that can only be exercised from the second year, are payable in full at maturity A callable bond is a bond that the issuer may redeem before it reaches the stated maturity date. In essence, a callable bond allows the issuing company to pay off their debt early. According to the company, this is part of its N30bn debt issuance programme through a special purpose vehicle, Interswitch Africa One Plc.

BusinessDay MARKETS INTELLIGENCE Team Lead: BALA AUGIE, IFEANYI JOHN; Graphics: FIFEN FAMOUS

BMI provides in-depth analysis and data on industries, companies, stocks, currencies, fixed income/credit, economics, regulation and factors that influence investor’s decision-making Continues on page 37 Email the BMI team balaaugie@yahoo.co.uk; augiebala@gmail. www.businessday.ng

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Monday 15 June, 2020

BUSINESS DAY

BD Money Money Brain with JR

The 4 pillars of personal finance mastery (2 of 4) JR Kanu

o you’ve committed to getting your finances under control this month of June. Maybe it was even your 2020 resolution. Although the year has not gone at all according to plan, it is possible to see the slowdown from the coronavirus as the forced reset you’ve been needing for self-care and improved financial health practices. The first pillar of financial health I recommended last week was the discipline of tracking one’s income and expenses. This week, we look into understanding your Net Worth. Did you know that everyone, including you and I has a Net Worth? It is not just a concept that’s reserved for public figures. In this article, we will dive in to why it matters to you and how it dramatically transforms your financial mindset, motivation, and actions. First, let’s define basic Net Worth. For the sake of simplicity, let us look at your Net Worth at the end of this year. My preference has always been to use a mathematical equation to explain this con-

cept. + 2020 Income [Passive and active income] + Assets [Cash in the bank, mutual funds, other currencies] - 2020 Expenses [Your spending, bills, insurance] - Debt Liabilities [Short and long term debt] --------------------------------------------------= Your 2020 Net Worth So, to have a positive Net Worth, your income and assets must surpass your expenses and liabilities. A wealthy person, by definition, is someone with a relatively large Net Worth.

How does this understanding of Net Worth affect your financial mindset? Last week when I challenged you to track your expenses, I was setting you up to master one of the quickest ways to increase your Net Worth by reducing the value of the minuses in your equation. Tracking expenses has proven to dramatically reduce and even eliminate some entirely. Once expenses are mastered, the next and more difficult step is to increase your income. Your active income is what you earn from your work while passive income is what your money does when it

works. The first one is straightforward - you increase your salary, get a better-paying job and boom, you’ve increased your active income. Passive income requires a bit more set up. One of the simplest ways to set this up is to at least hold as much cash as you can in money market funds and treasury bills if you are not planning to use the money for three months or more. Other sources of passive income include stock dividends, rental income, royalties from creative work, to name a few. Owning assets can be a two-for-one special. First, the value of the asset goes into your Net Worth, but if it’s an active asset, then it’s also likely earning you income. For example, owning property that you’ve rented out gives you the value of the property as well as its rental income. Another example of an active asset is owning a company that is growing in value and pays you a salary. As an owner in the company, your Net Worth grows as the company grows and becomes more valuable and at the same time, you’re earning wages. Two birds, one stone. Simply owning a piece of the company by being a part

investor or owning employee equity is another way to enjoy this two-for-one benefit. If you haven’t already, make sure that your contributions at work are valued enough that you are offered a seat at the equity table. The sooner, the better. Unless you’re planning to hold them for 10 years or more, the value of assets such as land can or stocks can fluctuate in the short term, but usually rise over the long term. It is much more manageable and expensive - to own an active, income-generating asset. Hopefully you now see how understanding the components of the Net Worth can affect your financial motivation. Set yourself up for passive income and asset ownership. At the very least, put your excess cash if any - to work in a mutual fund. You can start with as low as NGN2,000. If you’re an employee at a place that offers employee stock, earn that stock by being excellent at your job and bringing it to their attention in your meetings and performance reviews. Not only will you command a higher salary,

you will also open the conversation for equity. A crisis - global pandemic? - is an especially effective time to showcase your value to a company. You can shine in your personal finances and professional life. I fully expect it. Every Monday, JR discusses topics focused on career and money management, seeking to highlight the lessons being learned by young professionals navigating similar paths. If you would like to submit a topic or question, please send a DM to his social media handles - jrkanu on Instagram or email stories@reach.africa JR Kanu is the creator of the app, REACH: Expense & Money Manager - www.reach.africa. This app has helped thousands of young people across Africa to better understand and manage their money. He is also the author of the book, Money Brain: Career & Money Management in Your 20s and 30s - moneybrain.reach.africa. He is a builder of African businesses, lover of African art, an avid reader, writer, and huge advocate of the cities of Jos and Lagos.

Investing

Experts highlight opportunities for Nigerian businesses, individuals amid Covid-19 LOLADE AKINMURELE

xperts at a recent webinar highlighted some opportunities for businesses and individuals in Nigeria as the world attempts to get to grips with the COVID-19 pandemic that is ravaging economies globally. The webinar, themed ‘Staying ahead of economic shocks’ was facilitated by DAS Hub Africa and moderated by Chinwe Egwim, Senior Economist at FBNQuest Merchant Bank and author of Amazon best seller, Understanding Economic “Jargon”. Sharing their wealth of knowledge on how to stay ahead of economic shocks were Ify Isiekwe, Country Economist, Department for International Development (DFID); Bunmi Asaolu, Deputy Director and Head of Equities, FBNQuest, Ayomide Mejabi, Chief Economist sub-saharan Africa at JP Morgan; Foluso Gbadamosi, Director, Business Process and Technology, Prime Atlantic Group, Lameen Abdul Malik, CEO of Honest Management and Ivana Osagie, Founder of Professional Women Round-

table. Asaolu of FBNQuest spoke on how assets, global and local, have been negatively impacted by the panic selling triggered by the pandemic. “The panic made a mess of everything, even gold that is considered a safe haven asset sold off initially before seeing a recovery,” Asaolu said. “But I think the worst of the virus scare is behind us,” he said, before recommending Eurobonds, dollar-denominated funds, stocks of market leading companies in banking, telecommunication, cement etc. and fixed income assets as good investment opportunities in the market. Ify Isiekwe, DFID’s Country Economist, said the pandemic and its attendant impact on global oil prices had exposed Nigeria’s failure to diversify its economy. “We need to diversify,” Isiekwe said. Nigeria relies on oil exports for more than half of its annual budget and 80 percent of foreign exchange earnings. Although oil prices have doubled to $40 per barrel in the last one month, as OPEC+ producers head towards a consensus on extending output curbs, prices remain below the Nigerian government’s initial estimate of $57 per barrel for 2020. www.businessday.ng

Beyond the oil price channel, Isiekwe said the two other ways the pandemic could affect Nigeria are in the form of a decline in private investment and lower government spending. “The COVID-19 outbreak could further disrupt the income flow circulation within the Nigerian economy if authorities cannot contain the virus,” Isiekwe said. He however listed areas that held opportunities despite the adversity to include technology, digital financial services, healthcare and digital education. He also advised businesses and individuals to stay liquid at this time. “I’m not sure these are the times to

have heavy financial commitments except necessary”. “As we get a clearer trajectory of the global health crisis and financial markets, you may consider index funds, growth stocks, short-term bonds and if you are significantly liquid, you can buy property,” Isiekwe added. Ayomide Mejabi, JP Morgan’s sub-Saharan Africa Chief Economist started off his presentation by analysing the expected impact of the pandemic on Nigeria’s Gross Domestic Product (GDP). Mejabi expects a GDP contraction this year in line with consensus estimates. The International Monetary Fund (IMF) forecasts the Nigerian economy

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to contract by 3.4 percent, the biggest contraction since 1987, as the double whammy of low oil prices and the pandemic rocks Africa’s largest economy. Mejabi’s view is that the economic downturn will test the government’s capacity to implement bold reforms in the foreign exchange market, power sector and downstream petroleum sector. “The government has already announced plans to converge the multiple exchange rates in the fx market, abandon wasteful petrol subsidies and adopt market reflective electricity tariff, these reforms will be key for Nigeria post-covid19,” Mejabi said. The challenges thrown up by the pandemic for both the Nigerian government and businesses are helping technology firms gain even more prominence while accelerating new technology trends. Foluso Gbadamosi, the Director for Business Process and Technology at Prime Atlantic Group, was keen to share opportunities in digital platforms. “Seven of the ten largest companies in the world by market capitalisation are digital platform businesses and they also make up four of the top 5 trillion dollar companies in the world,” Gb@Businessdayng

adamosi said. “The winning business idea today and in the future must be one that leverages technology,” Gbadamosi added. Lameen Abdul Malik, CEO of Honest Management, spoke about the opportunities in Agriculture. He urged businesses to tap into the billion-dollar agricultural value chain. He highlighted opportunities in both the domestic and export food market. “Africa spends $35 billion importing food and by 2025 that figure will more than triple to $110 billion, this creates an opportunity in food production and supplies,” Malik said. Ivana Osagie, founder of Professional Women Roundtable, educated attendees on the importance of honing their skills in order to increase their value and stay relevant amid these unprecedented times. Osagie gave an extensive guide on how employees should use this period to add value to their respective organisations and how jobseekers should focus on strengthening their skills as well as leveraging platforms that would assist with boosting visibility. She explained that relevant positioning is important for the upcoming economic upswing post-covid19.

Monday 15 June 2020

BUSINESS DAY

This is MONEY

• Savings • Travel • Debt & Borrowing

A guide to your Personal Finance

• Utilities • Managing your Tax

12 money tips for fathers family. 5. Teach your children to save and invest early Fathers have the responsibility to teach their kids the value of money and how to manage it responsibly. Teach them the difference between wants and needs. Teach them about the dangers of instant gratification and the importance of saving for the future. These early lessons will last them a lifetime. A child who understands how to manage his or her money has a good chance of future financial independence. The gift of financial literacy is one of the greatest gifts you can give your children. 6. Create memories Far too many family holidays end up being just mum and the kids. Don’t miss out on this precious family time of which memories are made. A family that spends quality time together builds powerful timeless bonds. You don’t need to have an expensive holiday in a far away destination. Consider a “staycation; it is important for them to get to know their country. Explore some of the wonderful landmarks and historic sites. Pour over maps and let them do the research and choose the next destination together. Show them Africa. 7. Save for your retirement To set your family up for future financial independence begins with you and your spouse securing your retirement. If you don’t plan for this, you may become a burden. It is nice if your children take care of your needs because they wish to but not because you are broke. Your future security is important with

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If something happens to both you and your spouse, who should raise your kids? Don’t leave this to the court to decide. Consider where the guardians live, their financial situation, how many children they have and how they are being raised, their spouse and so on

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athers are special every day but Father’s Day celebrated on the third Sunday in June each year stands out as a day to honour fatherhood and paternal bonds, as well as the extraordinary influence of fathers in society. The family is the foundation, a critical unit of society so the effective leadership of that unit has massive implications for society. Father’s Day is also a good time for fathers to reflect on the critical role they play as the head of the family. There is enormous pressure on fathers to provide for their families. Money affects everything; from getting married and starting a family, educating children, starting a business, buying a home, caring for aging parents, losing a loved one, planning for retirement and your estate. Too many people get swept up in such events without being prepared financially. Here are 12 money tips for dads. 1. Invest in yourself You are your greatest asset; start with you to get the best return on that investment. Invest in yourself constantly and be proactive about developing yourself both personally and professionally. We live in a world that is in a constant state of flux; this pandemic is the most profound situation that we may ever go through in our lives. How are your faring? You should always be learning, growing and adapting with the times. Be conscious of this and be deliberate about taking your family, career or business to the next level. 2. Seize opportunities This unique time presents both opportunities and challenges. Are you sitting on the sidelines waiting for a vaccine for Covid-19, or are you looking at the opportunities that are waiting to be

tapped? What problem can you solve now? How can you adapt your products or services to meet the needs of this time? Some of the greatest successes have come from times like this. Will you be one of the success stories? 3. Establish an emergency fund Your emergency fund should have enough cash to cover at least six to twelve months of living expenses. If you can’t achieve that just yet, start small but meticulously. Each month, as soon as your salary is credited, have a certain sum set aside towards savings. Automating your savings is the most convenient way of achieving this. Start with what you have. There is so much uncertainty; no job or business is secure. 4. Protect your family with insurance We tend to assume that bad things won’t happen to us and far too many people ignore the need for insurance until a major mishap or setback occurs; it is then that the impact of inadequate insurance coverage becomes glaring. As a father, it is your responsibility to prepare for the worst-case scenario; just in case. Life insurance is a must for dads, particularly if you are the primary breadwinner. No matter how meticulous you are with your finances, failure to purchase adequate insurance can impair your financial future and put you and your loved ones in a desperate situation in an instant. Motor vehicle, household, health, educational and life insurance are just a few of the various policies that are available to protect you and your

healthcare insurance in place. 8. Talk about money with your partner Money woes are a leading cause of fractured relationships and divorce. Money secrets lead to mistrust and resentment putting a huge strain on the relationship. By involving your spouse in the family finances and working as a team to achieve family goals, there is a far greater chance for success both for money matters and your relationship. 9. Save for your children’s education Funding your children’s education ranks as one of life’s largest expenses. Plan for their education as you plan for their life. When children are still young, you have the benefit of time to select investments, including educational plans, that of-

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fer the prospect of higher returns over the long term. If sound investments are not made early, covering the huge expenses for the secondary and post-secondary years can be challenging. It takes discipline, consistency and sacrifice to amass the money that you need to educate them and give them the best chances in life. 10. Do you have an estate plan? Considering the worstcase scenario is something that no one likes to think about, but it is only by having a clear estate planning mechanism in place, that you can protect your immediate family, including your wife and children, and ensure that your investments and property and other assets that you have built actually go to those that you intended them for. Too many fathers die intestate leaving trauma and acrimony in their wake. Don’t assume that if you pass on, your spouse and children will automatically become beneficiary to your estate. If you were to die intestate, that is, without leaving a will, strict rules rank your nextof-kin, and your property will be distributed according to law of intestacy, which may vary from state to state. Review and update your will, trust and other estate planning documents periodically, to ensure that they are in accordance with your current status and intentions; check and update beneficiary designations periodically, say once a year. At some time or the other, you have probably had to fill out a form or some other documentation where you had to clearly state your next of kin. Is it still appropriate? Select a guardian; if something happens to both you and your spouse, who should raise your kids? Don’t leave this to the court to decide. Consider where the guardians live, their financial situation, how many children they have and how they are being raised, their spouse and so on. Discuss the pros and cons of various options with your partner and come to a de@Businessdayng

cision and include this in your will. Don’t forget to inform the guardians and gain their acceptance of this huge responsibility. 11. Have you embraced technology? The opportunities with the internet and social media are immense. Have you thought about establishing an online presence? The present and future are digital. Are you there? Can you build an online brand and present your content, your goods and services to the world? Can your team work from anywhere? 12. Give your family your time In the final analysis, all the money in the world cannot replace that precious time for bonding, building and nurturing relationships with your children. If any thing good came out of this global pandemic, it has forced many families together. Be deliberate about being involved in the home online school and precious family moments. You may never have such extended time with your family again; the children will be gone soon. Make your presence count. Happy Fathers Day!

Instagram and Twitter: @ mmwithnimi, Facebook and Google+: ‘Money Matters with Nimi’. www. moneymatterswithnimi. com, or send us an email info@ moneymatterswithnimi. com Nimi Akinkugbe has extensive experience in private wealth management. She seeks to empower people regarding their finances and offers frank, practical insights to create a greater awareness and understanding of personal finance. For more personal finance tips, contact Nimi: Email: info@ moneymatterswithnimi Website: www. moneymatterswithnimi. com Twitter: @MMWITHNIMI Instagram: @ MMWITHNIMI Facebook: MoneyMatterswithNimi

Monday 15 June 2020

Harvard Business Review

BUSINESS DAY

MONDAYMORNING

The strategic side gig KEN BANTA AND ORLAN BOSTON

mit Paley spent the first seven years of his career as a reporter for The Washington Post. While he put in long hours, he also made time to serve on the board of his alma mater’s newspaper, where he could help aspiring journalists and learn how nonprofits worked. After leaving the Post and attending business school, Paley joined McKinsey as a consultant. Again, he made it a priority to volunteer, this time staffing nighttime and weekend phone lines for the Trevor Project, an organization that works to prevent suicides among LGBTQ youth. Eventually he joined its board (full disclosure: one of us also serves on it), which gave him exposure to the operational challenges of such groups and inspired him to get more involved in McKinsey’s nonprofit work. This eventually culminated in his being named CEO of the Trevor Project in 2017. “By investing my time outside work in things I was passionate about, I learned things that made me better at my job,” Paley explains. “Those experiences also prepared me for future leadership roles that I didn’t know I would have.” That’s the power of strategically taking on extra jobs outside your organization.

WHAT IS EXTERNAL ENGAGEMENT? A lot of managers and leaders focus obsessively on their current jobs and companies. Many believe they simply can’t be successful without that kind of single-mindedness. Of course, most people now realize that to advance in your career, you need diverse experiences and should explore opportunities in a variety of functions, industries and geographies. But the general thinking is that when you get a challenging role, you should give it all your attention to make sure you excel. That approach can pay off in the short term. However, in our combined work with thousands of executives as well as in our own experience, we’ve found that it can stymie your long-term development. Why? Now more than ever, engagement in strategic side gigs is a requirement for executives. The pace of change is also making it difficult for cor-

porate learning departments, management schools and executive education programs to keep their curricula relevant. As a result, leaders who want to rise need to find ways to expand their field of vision and build their knowledge, skills and connections even as they carry on their daily work. This goes well beyond attending industry conferences or taking classes at night. We’re talking about meaningful engagement in outside activities that expose you to different people, information and cultures but are also in some way synergistic with both your personal interests and your current or future primary work. That can include membership on boards, teaching, publishing, public service, investing in startups and so on. Think of yourself as having a portfolio where your job is squarely in the middle, various outside activities surround and complement it, and you deploy what you’ve learned in each realm to the others. When we surveyed 122 senior executives from a spectrum of industries, all agreed that outside engagements were critical to leadership success. To learn how leaders find the right opportunities and what they gain from them, we conducted interviews with leaders of varying career stages. In this article we’ve distilled their lessons.

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HOW CAN YOU MAKE IT HAPPEN? — FINDING THE TIME: One of the biggest constraints executives face is an already packed schedule. But you can find the time if you make it a priority. You can, for instance, block off one or more hours a week on your calendar for these activities. Often you can space them out. In other words, you need to deliver in your job and for your family before you can take on additional responsibilities. But if things lighten up, seize the opportunity. — IDENTIFYING ROLES: How can you find the right opportunities? First, spread the word within your organization and to your contacts that you’re looking for outside activities relevant to your job or skills. Explore your passions and see if groups connected to them have any open positions that would give you a chance to learn. Seek out friends and colleagues who already have volunteer jobs and offer to help them. Get your name out there through public speaking, social media and publishing so that people start presenting possibilities to you. After this period of exploration, you’ll want to be selective about the roles you commit to seriously. — JUSTIFYING YOUR COMMITMENT: When you take on a strategic side gig, it’s often wise to ask for permission from your employer and family. The key is to show

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the relevance, including both personal benefits, such as increased engagement and energy, and organizational ones, such as a broader network. WHAT ARE THE LONGTERM BENEFITS? — RECHARGING YOUR ENERGY: Keith Krach, the U.S. undersecretary of state for economic growth, energy and the environment, says that when you squeeze in time for outside activities, it can actually help you avoid burnout. “I’ve found that the busier you are, the more you can take on, and you definitely get better at your job,” he says. During his career, which began in General Motors’ engineering group, he has served on various nonprofit and corporate boards. — BUILDING KNOWLEDGE, SKILLS AND CONFIDENCE: The best external engagement gives you something to bring back to your own organization. A great example comes from Rosanne Haggerty, the president and CEO of Community Solutions, an organization dedicated to ending homelessness. At age 30 she started her first nonprofit and, about that same time, applied to be on the board of trustees of her alma mater, Amherst College. Although it was daunting to take on the two commitments at once, she says, “the timing was perfect in that I received a remarkable education about what it meant to work with a board and what @Businessdayng

to pay attention to as I grew my own nonprofit. Serving on that board was like taking a master class in nonprofit leadership and long-term stewardship. Wherever you are on your career journey, anytime you can learn new skills, manage a complex project and even make some mistakes you can bounce back from, it will be extremely valuable.” — DEVELOPING A BROADER PERSPECTIVE: When you do important work in other fields, you uncover areas of untapped opportunity for yourself and your organization. You can make connections that help you become a better innovator and manager. Ten years into her first nonprofit CEO role, Haggerty took time off to go to Tokyo on a fellowship and study how a different society was responding to homelessness. “It redirected my thinking in ways that still reverberate,” she says. Finding the right engagement outside your day job isn’t always easy. But once you do it, it usually opens the door to many other opportunities. And it’s those experiences that will become your personal competitive advantage.

Ken Banta is the founder and principal of the Vanguard Group for Leadership. Orlan Boston is a partner in the Ernst and Young LLP Global Health Sciences practice.

Monday 15 June 2020

BUSINESS DAY

Start-Up Digest

30% of MSMEs in Nigeria won’t survive coronavirus pandemic — Survey MICHAEL ANI

hree out of eve r y 1 0 Mi c ro, Small and Medium Enterprises (MSMEs) operating in Nigeria will not survive the coronavirus pandemic, according to a new survey showing how bad businesses in the segment have been negatively affected by coronavirus. Dubbed ‘the impact of Covid-19 on Nigeria MSMEs,’ the new survey done by FATE Foundation in partnership with BudgIt Nigeria was designed to give insight into the prolonged impact the COVID-19 pandemic on MSMEs in the country. Responses were gathered from 1,943 businesses, 80 percent of which were micro businesses polled across various sectors in the country. The survey showed that the impact of COVID-19 on businesses in the segments has been brutal, with 94.3 percent of them reporting they are worse-off on all financial fundamentals from sales to revenue, down to their cash flows. That would deal a big blow to employment, income expenditure, poverty rate and real gross domestic product growth of Africa’s largest economy, which looks onto businesses in the segment to employ about 84 percent of its working population, and rake in as much as 50 percent of national GDP, according to a survey by the National Bureau of Statistics (NBS) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN). On employment, Nigeria could see a host of its population becoming jobless, which would further exacerbate the country’s unemployment rate which is already at a record high of 23 percent as of third quarter, 2018—the last time statefunded data agency, NBS, updated the figures, From the survey, about 80 percent of businesses reported that they were likely to lay off employees. Their decision to retrench staff is due to a number of factors including prolonged periods of the pandemic, inability to pay staff, poor sales and restriction of movement. Those who might manage to survive the tsunami of being laid-off from work would see a deep cut in income which could go a long way in threatening their livelihoods, pushing them into poverty. The new survey is some-

Sustainable hiring practices for MSMEs and startups

O what in tandem with that conducted by the NBS when it surveyed 1950 households showing that about four out of every 10 of them lost their jobs due to the pandemic, while 79 percent saw their total income decreased since mid March, almost about one month after the index case was first reported in the country Meanwhile, 47.1 percent of MSMEs surveyed by FATE Foundation said they were positive that their businesses would survive the pandemic while 22.8 percent were indifferent. As blood is to man, so are MSMEs to the growth and survival of any economy. Hence effectively supporting them, especially at a time like this when the global economy is on the verge of a recession, should be a priority for stakeholders and government as they work towards economic recovery and slowing down job loss, analysts have said. As a way of supporting households and MSMEs that are affected by the coronavirus pandemic, the Federal Government, through the Central Bank of Nigeria (CBN) and the Federal Ministry of Finance, Budget, and National Planning, rolled out some monetary and fiscal measures to help mitigate the impact of the pandemic on the economy, Nigerian businesses and households. One of such was the introduction, in April, of a N50 billion Targeted Credit Facility (TCF) as a stimulus package for MSMEs. While critics have raised concerns that the intervention fund is too little to move the needle for the country’s over 41.5 million MSMEs, many businesses have complained of not being able to access any of such stimulus from the government yet. From the survey, 94.2 percent of MSMEs said they haven’t received any support whatsoever. This might be mean more crises for Africa’s largest www.businessday.ng

economy showing signs of weakness from the devastating effect of the COVID-19 pandemic. The Nigerian economy slowed 1.87 percent in the first quarter of 2020 from 2.55 in Q4’19, owing to a slower growth in both the country’s oil and non-oil sector. The country has also been tipped by the World Bank to contract as much as 3.2 percent by year end. But despite the hurdle, Nigerian businesses have continued to show resilience as they rethink various strategies that would help them in cushioning the impact of the pandemic. From the survey, about 49.7 percent of entrepreneurs said they see opportunities to create new products/services while about 42.3 percent of them see opportunities to expand/ diversify their businesses. The survey report urges the government to enable financial and non-financial support to reduce cash flow burdens. It also recommends a low-interest financing, asking the government to work with development finance partners to set up targeted sector resilience funds to support essential sectors and industries significantly impacted by the crisis and attendant lockdown. It further urges the government to set up non-financial support through regulatory reliefs in the form of tax deferrals and reliefs, delay collection of licenses and permit fees, and tax filing extensions for businesses. It also wants the government to provide payroll support for MSMEs to enable them keep paying salaries. According to the report, a strong opportunity for the federal and state governments will be to explore policies and regulatory considerations that help to enable internet penetration particularly high speed internet access for non-urban and city segments.

ur article last week discussed the importance of building trust and collaborative culture as employees work remotely during the pandemic. We suggested that instead of resorting to micromanagement and hyper surveillance to ensure employees are always on the clock, managers might want to design, recruit, and train their teams so that organisations have a minimised need for surveillance technology. Given the issues of employability locally and regionally, we know that this is easier said than done. However, organisations must hire expecting and planning to upskill their staff whilst tapping into their ingenuity, creativity and grit. As entrepreneurs and leaders, it is worth developing management styles and company cultures where employees understand the ‘why’ (and ‘what’) of their deliverables and are both expected and positioned to grow. Today, we would like to discuss hiring and training staff within this framework. As an SME or startup owner, you likely need experienced staff to hit the ground running but are not always able to afford to pay for people with the desired level of expertise. On the other hand, you do not have the time to train people with no experience, even if their starting salaries are more in your budget range. How do you deal with this scenario while ensuring that your hiring practices are sustainable and realistic? By this time, you have likely found out that something has to give. So, consider developing a hybrid solution, suited to your particular business, that invests in hiring experienced staff for key senior positions. At Spurt! we have dedicated ourselves to helping organisations like yours engage with the hiring process differently. For young ventures, your low ratio of highly skilled and experienced staff are expected to spend a chunk of their time actively training junior staff who might be less experienced. On the other side, hire junior staff in a way that prioritises character, attitude, and propensity for learning quickly, over experience or specific knowledge of the industry. So what you need are smart people that can learn quickly by observing and doing, with managers that

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can see themselves not only as responsible for getting the job done, but upskilling the junior staff members. This means that for the senior manager/trainers – let’s call them anchor staff – you are hiring not just for their experience, but for their ability to train and build capabilities into other people, and for the junior staff – let’s call them pipeline staff – you are hiring for aptitude and attitude. Your approach to hiring for these two position types will necessarily be different. For your anchor staff, it is not only about expertise and experience. These people also need to have the ability to develop processes and systems that will transform your firm into a sustainable institution. They will be the ones who help you to build and grow the business, and they need to be cross-functional, especially in the context of a small firm. These processes and systems do not have to be complicated but instead structured as a function of your current organisation’s needs and capacity. Seek out people that come with a mindset that

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These people also need to have the ability to develop processes and systems that will transform your firm into a sustainable institution goes beyond getting the job done and extends to ensuring that the work delivery is repeatable and reliable for every customer. Anchor staff need to be able to carry people along. It must be a key requirement you emphasise. This requires that you have practical interview sessions which are designed to engage them on microprojects with a junior member of staff as part of the recruitment process. Use this to assess their communication and leadership styles. See beyond whether or not the task was completed satisfactorily. Look instead at how it was completed: did the person communicate and were they able to guide junior staff effectively to complete the @Businessdayng

task. It should be a carefully designed group task that takes a couple of hours so that you can build out rubrics designed to look out for these specific attributes. For junior staff, start by accepting that the person’s first month or two will be a learning process and think long term. This is how investment banks can hire History and English degree holders that have taken no finance classes. They hire for the person’s ability to learn and grow quickly. So, if you ask a question on a topic that they are not familiar with, see how they respond. Do they ask more questions? Do they respond to the answers you give them? Do not be afraid to teach during an interview, but make sure you look out for those that can and do learn from the information you are giving. Again, a group activity with senior staff will help as part of the recruiting. How do they react to new information? To what extent are they asking questions? What is their general attitude? How creative are they in coming up with solutions? The point is that when hiring in this way, you hire with the mindset that you are hiring capable teachers and students. It would be nice to have readymade staff, but sadly that is not the reality. However, it is possible to design your employee base by hiring certain kinds of people. Furthermore, as the leader or head of people at your firm, you should be ready to think strategically about people, with the idea of collaboration at the centre of your strategy. If everybody that comes into your firm immediately sees that it is a firm where all learn and grow together, the teacherstudent relationships (at all levels) will thrive. As your existing staff become more experienced, they also become anchor staff who train and develop newbies. In so doing, the culture of shared learning grows at your firm and an open and collaborative culture develops. Patience is required, but it pays off. As always, feel free to reach out to us at Spurt! with any questions on how your firm can effectively execute this strategy for your particular context. Kristin & Oladoyin www.spurt.solutions Reach us at admin@spurt.group if you have any questions or comments.

Monday 15 June 2020

BUSINESS DAY

Start-Up Digest

In association with

How Ojo’s compliance officers protect churches, event centres from COVID-19 spread Josephine Okojie

s Nigeria gradually re-opens its economy amid the COVID-19 pandemic, Michael Kehinde Ojo, founder, Black Knight Protection, has readied a team of compliance security officers for churches and event centres. This is to ensure that religious centres and social gatherings adhere to every security safety guidelines issued by the federal and state governments to curb the spread of the COVID-19 pandemic. Ojo, whose business has been negatively affected by the pandemic, has adopted a new strategy to survive the difficult moment. “Since the pandemic, there has been a major interstate restriction and a hold on large events. This has caused a fair amount of delays in event-related jobs,” he says. “ H o w e v e r, w e h a v e adapted ourselves to offer

safe and effective security to aid the country to safely exit this pandemic,” he says. He explains that his organisation has advanced on training its employees to be healthier and safety aware. He notes that each member of his team that has gone through the intensive training is now fully equipped to act as compliance security officers for churches and event centres across the country as Nigeria gradually re-opens its economy. “This will enable us to work at an advantage within the government guidelines to enforce compliance when working at our various client locations,” he says. He is among the network of leading captains in the security industry that are building a professional security business. Since starting his business, Ojo has been able to put a state-of-the-art security system in place to help event planners and businesses in the country to have peace of mind by providing them with top-notch security solutions.

Michael Ojo

Inspired by the need to provide a frontline security solution squad that delivers bespoke services in the country’s security industry, the entrepreneur was

Why Edyglad has remained in business 12 years after, by CEO Odinaka Anudu

l a d y s Igb e ke l e, chief executive of Edyglad Cakes and Event Company, has explained that passion and ability to satisfy clients are key factors that have sustained the business in the last 12 years. Igbekele said, in an interview, that her journey into entrepreneurship began while she was in the higher institution but officially kicked off in 2008. “I worked for some years in the public sector before deciding to turn my passion into business,” she said. “I went further to register a company in 2008 after attending several trainings to be certified as a cake baker and confectioner.” The entrepreneur explained that of all her passions, she picked up cakes and events as a business, which had remained robust in the last 12 years. “I am very passionate about my works and believe in creativity. I love imparting knowledge. This has led to the birth of an academy to train more people to be financially independent and

Gladys Igbekele

also give back to the society. This happens through mentorship of upcoming entrepreneurs with interest in baking and event planning,” she explained. She further said that Edyglad was today known for exceptional “beauty to behold tasty cakes and confectioneries” as well as planning of events. Igbekele noted that it had become necessary to empower youths and women at this time through her culinary academy so as to help them become financially independent. She has trained about 210 since inception. On how she was able to meet her client’s needs durwww.businessday.ng

prompted to establish his business in 2015. “We cater for events, securing elites and VVIP clients,” the young entrepreneur says.

He was able to raise his initial start-up capital from his existing business-Smart Link Management. “I was already running Smart Link Management from the UK and we had already established a successful business over the years,” he says. “With the success of Smart Link Management, we were able to raise the initial capital to set up @blackknighprotection,” he adds. The business currently has over 200 registered trained bouncers. Evaluating the Nigerian security industry, he says the industry has continued to thrive yearly. He says that with continuous training adopted by business owners in line with government guidelines and policies, the country will experience a more flourishing security sector. He further says that he plans to establish a certified fully operational and integrated security training academy in the long run. Speaking on some of the major challenges confront-

ing his business, the youngentrepreneur says multiple taxation and infrastructure gaps remain major issues limiting productivity. “I quickly realised that in order to survive long term, one must be psychologically and financially prepared to deal with some of the lapses that drain business profit, such as electricity and unnecessary taxes,” he explains. He urges the government to bridge the huge infrastructure gaps in the country while also calling on them to build an effective tax system that eliminates unnecessary fees levied on business operators. He states that his business has not received any support from the government to survive the difficult moment of the pandemic. On his advice to other entrepreneurs, Ojo says, “be passionate about the business and be consistent. Finally, and most importantly, look at value. What value is your business bringing that differs to what others are offering?” he asks.

Lack of information, poor structure top reasons for MSMEs’ failure — Experts ing the total lockdown, the event and catering expert said it was easy to meet clients’ needs during the lockdown because food and confectioneries fell under government essentials. She revealed that her brand cooked and packaged food for home delivery which was made possible by her outfit’s delivery van. Speaking on her brand’s post-coronavirus plans, she explained that Edyglad was poised to do more for new and current clients by ensuring all staff adhered to health and safety protocols in event planning, food handling and customer delivery. “It’s part of our business policy to abide by government and industry rules in order to maintain the integrity of our organisation,” she said. Sharing success insights with upcoming female entrepreneurs, Igbekele advised them to know what their clients wanted and ensure they met that need. “They must imbibe the spirit of hard work, collaboration and excellent customer satisfaction. All these are what has kept me going till date,” she concluded.

Gbemi Faminu

he micro, small and medium enterprises (MSMEs) are confronted with many challenges. Such challenges include lack of long-term and single-digit funding, poor infrastructure, multiple taxation and high energy costs, among many others. The problems have been exacerbated by COVID-19, which has wiped out millions of small businesses already. In a phone conversation, Seun Oshoniyi, head, membership relations, Lagos Chamber of Commerce and Industry (LCCI), said the problems of MSMEs dwelt more on lack of information, poor people-network, and lack of expert advice. She said their problem was not necessarily funding, as many believed. “While many entrepreneurs claim that funding is a problem, you will be shocked to see that when they are pitched to investors or have access to grants, many of them are absolutely clueless on what they should use the money for,” she said. She explained that many

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people just enjoyed being referred to as CEOs without making necessary investigations regarding proper handling of a business, adding that most entrepreneurs lacked access to the right information that would help them grow their businesses. She further said that some of them undermined the importance of technology, digital marketing and social media. She pointed out that many MSMEs lacked proper structure and framework with which they could successfully carry out their business, adding that they also shied away from professional services to save costs and end up getting into trouble. “ Entrepreneurs ne e d competent accountants to file their books; seasoned lawyers to help them make major decisions and documentations; a board of advisors, and personnel managers to help source employees,” she said. “If they do not have these handy professionals, there is a limit to what grants and loans can do,” Oshoniyi said. Tony Anele, group head, consumer and retail banking, UBA, said at a business forum in 2019 that many @Businessdayng

businesses failed due to lack of structure and not necessarily finance, as it was often thought . This, he believed, would be reduced when the entrepreneurs sought professional advisory services. Data from the National Bureau of Statistics (NBS) show that the number of MSMEs in Nigeria rose from 37 million in 2013 to 41.5million in 2017. Micro enterprises were 41.47 million, constituting 99.8 percent of the total enterprises, while small and medium businesses were estimated at 73,081, which is 0.2 percent of the total. Despite their relevance to the economy, the report shows that the number of medium scale enterprises dropped by 61 percent, from 4,670 in 2013 to 1,793 in 2017, while the total MSMEs grew marginally by 12.1 percent. A survey conducted by BusinessDay among some entrepreneurs shows that many of them (90 percent ) highlighted funding as a major problem they are battling with. However, business experts have said funding is not majorly a business problem but indicates inefficiency on the part of the entrepreneur.

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news

There are growth opportunities in digital journalism - Aigbogun Anthonia Obokoh

ublisher/CEO, BusinessDay Media Limited, Frank Aigbogun, has said there are growth opportunities in digital journalism in Nigeria. Research has shown that digital journalism has opened up new opportunities for news to be explored from time to time in possible angles. Since the advent of digital technology, a lot of changes are happening in the world of journalism, according to Aigbogun. “The transition has been made possible by digitalisation in journalism, and good journalism must be paid for and only good journalism would save journalism,” Aigbogun said, at a webinar on ‘Journalism in the Digital Age: Essential Skill Requirements’ organised by School of Media and Communications (SMC), Pan-Atlantic University, Lagos. The publisher in his presentation titled ‘Journalism in the Digital Age: Myths and Realities’ said the digital era had made it easy for journalists to specialise in any aspect of the profession. “Journalists don’t know mathematics, but in today’s journalism where data journalism comes to existence, any journalist that cannot talk about data or ratio has no place in journalism today or tomorrow,” he said. “The reality of journalism in a digital age is increasing popularity of citizen journalism and the rise of solution journalism,” he said. The media expert emphasised that there were intersections of journalism and technology, adding that there were different forms of technology that had become almost the life blood of journalism in

today’s world. According to Aigbogun, there is also an evolution of talents in the newsroom. He noted that the valuation for newspaper was still traditional, saying the face of today’s journalism was fact checking, research, explainer, and multimedia storytelling. “The most important innovation to succeed in the digital age of today is to migrate from AD revenue to reader revenue. Those that have succeeded today are those that have moved advertising revenue to reader revenue,” he said. “The truth of the matter is the advantage of digitalisation in the scale that it offers has not been fully leveraged or taken advantage of,” he said. Advising on what is next for publishers, Aigbogun noted that there was a change in consumer behaviour around the world and the newspapers were trying to align and follow their audiences. “We are going after them, providing them our services in whatever form they choose to consume. Certainly, at a fee and not free,” he said. “If in 2020 a publisher is not charging for digital content, such publishers should not be publishing, let alone journalism because they are headed on a part that goes nowhere. That is the reality,” he emphasised. He, however, advised publishers to look at pay walls, stating that media organisations could increase their subscribers’ revenue by creating pay walls. Earlier, Ikechukwu Obiamyan said it was very fitting for journalism in the digital age and it was very important to us as journalist to be better equipped and pay attention and learn.

Government, media, companies tasked to take action on environmental protection Daniel Obi

yriad of increasing human activity, which is impacting negatively on the environment, causing destruction of the eco-system and threatening human and animal lives, is becoming unendurable. The need therefore to protect the environment for sustainability moved speakers at the recent webinar on environment sustainability organised by Lafarge Africa plc to call on the media, government and companies to take positive actions towards safeguarding the environment for future generations. Today, overpopulation, pollution, burning fossil fuels, which cause global warming, wildfires and deforestation, have combined to trigger climate change, soil erosion, undrinkable water, air pollution causing different sicknesses. With these, experts believe a change in lifestyle and awareness are what is required to protect the eco-system for plants, animals and humans.

movement of young Edo professionals christened “I am Edo” has been launched in Lagos. The movement, the mission of which is to inspire a spirit of patriotism in Edo people and mobilise citizen action for good governance, has also endorsed the second term bid of the incumbent governor, Godwin Obaseki, pledging support for his candidacy under any party. Speaking during the launch event, Tony Usidamen, convener of the ‘I am Edo’ Movement, noted: “For far too long, hardworking sons and daughters of Edo have distanced themselves from politics and governance in the state, and watched as a few entitled politicians, who are a demographic minority, call the shots in the affairs of the state, and brazenly plunder our commonwealth. “As major stakeholders in

the Edo project, we the young professionals—home and abroad—can no longer stay on the sidelines. This is why the ‘I am Edo Movement’ was birthed to galvanise Edo people to take control of their destiny, and join in the process of restructuring, remodelling and rebuilding the state, so that all citizens can journey towards their dreams with confidence and dignity.” Usidamen further said: “Indeed, the power and responsibility for social change lies in the hands of the people. Through media advocacy and grassroots campaigns, we want to encourage participation in the electoral process, drive systemic changes in the community, local government, and state administration, and engender inclusive socio-economic development in line with the principles of democratic governance and social justice.” On the choice of Obaseki as their preferred candidate in the www.businessday.ng

on the environment,” he states. Also speaking, Folashade Ambrose-Medebem, director of communication, public affairs and sustainable development, Lafarge Africa, states that World Environment Day, marked this year on June 5, is one of the key vehicles through which Lafarge Africa underscores its commitment to the SDGs 17 goals. “We join forces with the world to stimulate worldwide awareness of global challenges to ensure that we humans take care of the environment we all live in and take the necessary actions to protect it,” AmbroseMedebem says. According to AmbroseMedebem, recent events show the fragility of the environment and there is no better time than now to focus on biodiversity as over a million species of wildlife in their natural habitat are at the verge of extinction due to human activities. Buttressing Momoh’s call on stakeholders, AmbroseMedebem says all Nigerians have a mandatory role to play ir-

respective of the industry we are in to protect the environment, as “Everyone must take action.” She explains that sustainable development is about meeting the needs of today without jeopardising the needs of tomorrow. Therefore, “Our daily actions as individuals and corporates must be geared towards a better future for humanity and the environment – the earth, humans and animals alike. She also challenges the media to assist in pushing the narrative on environmental protection. The media have a strategic role to play in setting the agenda and driving awareness around global issues, especially on the Sustainable Development Goals, she says. The need to protect the environment and create the necessary awareness gave rise to the World Environment Day founded by the United Nations Environment. This year’s theme, ‘Time for Nature,’ focuses on providing the infrastructure to support life and development.

APMT Terminal in Apapa, Lagos. Pic by Pius Okeosisi

Edo professionals launch movement, endorse Obaseki’s second term bid Iniobong Iwok & CHURCHILL OKORO

Speaking during the webinar, John Momoh, chairman/CEO of Channels TV, expresses worry that Africa is facing dramatic increase in air and water pollution, as drought is also causing wildlife extinction. According to Momoh, “Unless significant action is taken to clean up the continental environment, the future is bleak” He therefore calls on all stakeholders and institutions to come on board for the protection of the environment as this has become critical for survival of humans and animals. Momoh, who advises institutions to develop policies on the environment protection, also challenges the media to intensify research and reporting on environmental issues to bring to the fore the dangers of environmental degradation to the attention of the populace. “Environment reporters should intensify research before embarking on report for proper education with intention to provide clear and necessary information for understanding

September 2020 gubernatorial election in the state, the convener said: “The positive impact of the intervention programmes of the Obaseki administration across key sectors of the economy—including education, healthcare, agriculture, power, manufacturing and industry, roads and infrastructure, art and sports, law and order, and the civil service—is clear for all to see. “And so, when one finds a crop of leaders who go against the grain, selfless men and women that identify with the challenges and aspirations of the people they govern, and are committed to economic and material advancement of the majority rather than a few, it is only natural that we support them. The credential of the other major contender, who seems to have the backing of self-acclaimed godfathers in the ruling APC, pales into insignificance in comparison.”

NRC, APMT’s new SOP to enhance efficient cargo evacuation by rail MIKE OCHONMA

he development and deployment of new StandardOperatingProcedures (SOP) by the authorities of APM Terminals (APMT) Apapa and Nigerian Railway Corporation (NRC) are aimed at bridging the communication gap and ultimately leading to more efficient cargo evacuation by rail. Daniel Odibe, general manager in charge of external affairs of APMTs Apapa, stated this on the heels of the recent rejig of movement of freight by rail out of Apapa port by the NRC. Last Monday, APMT Apapa and the NRC restored rail connectivity for containers to the Lagos Port Complex (LPC) in Apapa as part of efforts to reduce traffic congestion on roads. According to the APMT spokesman, “This is an important

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milestone for the port. Having a Standard Operating Procedure for receiving trains into the terminal and servicing them, helps planning, as you have adequate information ahead of time.” While thanking the Nigerian Shippers Council (NSC) for the support, Odibe said with the closure of a section of the Apapa Bridge for repair works, the resumption of rail services would help reduce a backlog of containers waiting at the port. Apapa seaport has recently seen a growth in barging operations with a growing number of containers moved daily by barges from the port. Recall that the APMT constructed the port’s rail line and connected it to the national line in 2013, to provide alternate to road transport for customers. Re-commencing the rail operation will remove trucks from the @Businessdayng

road and improve environmental standards. Re-introducing rail connectivity at the port follows on from the acquisition of two new Mobile Harbour Cranes earlier this year. These were part of an agreed investment of $80 million for the year 2020-2021, bringing the total investment by the company in Apapa since 2006 to $438 million, which is the highest by any private terminal operator in Nigeria. Speaking with BusinessDay on the environmental benefits of freight movement by rail, Jerry Oche, Lagos district manager of NRC, said, “A train is made up of 19 wagons and each of the wagons can take one 40 feet or two 20 feet containers. So, if we are doing 40 feet, that is 19 trucks off the road and if it is 20 feet that is 38 trucks off the road per trip. We are starting with two trips per day and we hope to increase it in no distant time.”

Monday 15 June 2020

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news Low tech use, ineffective credit model seen hampering FG’s N471bn mass agric scheme JOSEPHINE OKOJIE & BUNMI BAILEY

he Federal Government plans to spend N472 billion to fund its mass agricultural scheme it bets will create jobs, increase local productivity, and stimulate growth, according to the government’s new Economic Sustainability Plan (ESP). But the mass agricultural scheme will yield little or no result if the government fails to address lingering problems that have continued to limit productivity and have led to the collapse of previous programmes, experts say. The experts say low scale technology use, ineffective credit model, lack of competitiveness in the agricultural sector, among others will hamper the Federal Government’s push to fast-track economic recovery post-COVID-19 through the sector. “No matter the number of

programmes we create, Nigeria’s agriculture will not foster growth and create jobs until we address the fundamental issues limiting productivity,” said Kolawole Adebayo, professor at the Faculty of Agricultural Extension and Rural Development, Federal University of Agriculture, Abeokuta. “We need to increase our mechanisation use on our farms, run an effective credit model, improve our infrastructures and make our marketing structure more reliable to foster growth and attain food security,” Adebayo said. He added that until Nigeria fixes these lingering problems in its agricultural sector, the country would continue to waste resources and time without a substantial result. Agriculture in Africa’s most populous country has long been touted as a remedy to the country’s oil dependency owing to its attendant expo-

nential gains by way of earnings, employment, and other spin-offs. But despite the potential of changing the fortunes of the Nigerian economy, the agricultural sector still grossly falls short of its potential. Low level of agricultural mechanisation on farms across the country still persists, limiting the capacity of farmers to expand their cultivation areas, perform timely operations, and achieve economies of scale in food production. “How do we boost productivity, create jobs, and attain food sufficiency when we still farm with hoe and cutlass?” AfricanFarmer Mogaji, head, agribusiness group, Lagos Chamber of Commerce and Industry, asked. “It is not about bringing new programmes, it is about addressing the issues preventing us from getting the results we desire,” Mogaji said.

Data from the UN’s Food and Agricultural Organisation (FAO) show that Nigeria is one of the least mechanised farming countries in the world with the country’s tractor density put at 0.27 hp/hectare, which is far below the FAO’s 1.5hp/ hectare recommended tractor density. Although agriculture accounts for over a quarter of the country’s GDP, Nigeria still spends a whopping $22.5 billion yearly on food imports. As a result, the country is not food secure. Low yields per hectare and wastage levels remain high in farming areas, reducing supply to processing factories and markets, requiring them to keep importing supplies. The net effect is limited job growth across the value chain from input production to market systems, and the continued use of limited foreign exchange earnings to import food.

Nigeria’s $3bn cosmetics industry hit as facemask use slows demand for makeup products ENDURANCE OKAFOR

n a world of facemasks, restriction of public gathering above 20 people and the new normal of working from home, Nigeria’s beauty and personal care industry is taking a big hit from coronavirus pandemic. Information Resources reported a 46 percent drop in sales of global make-up products as of mid-May, but the beauty industry in Nigeria may have seen a higher decline by more than 50 percent, according to analysis from BusinessDay survey. Sarah Imafidon, a business development manager at one of Nigeria’s top oil and gas companies, usually spends about N50,000 on make-up products every month, but for the past two months, the 30-year- old said she has

not bought or had the need to use the products. “My position requires me to get clients for my company and so before COVID-9 outbreak in Nigeria, I would normally attend a lot of meetings and conferences but for almost three months now, I haven’t done any of those, so no need for

make-up,” Imafidon said. One month after Nigeria reported its first COVID-19 case on February 27, 2020, the government in Africa’s most populous nation ordered the cessation of all movements in Lagos, Ogun and the FCT for 35 days to curtail the spread of the virus which has since affected 13,873 people with 382 deaths and 3,351 discharged. While some other states also adopted the total lockdown with the exemption of essential service providers, businesses and several industries were disrupted with events, weddings, conferences, etc postponed indefinitely. According to stakeholders in Nigeria’s beauty and personal care industry, the impact of COVID-19 has affected almost all the players in the beauty business as the pause in activities for an industry like Nollywood has brought them a big loss. “I do make-up for a lot of celebrities, either when they are going for video shoots or casting for movies. But since COVID-19 I have not had jobs and hence no need to buy new make-up products,” a Lagos-based make-up artist said on the condition of anonymity.

Experts to brainstorm at BusinessDay’s national discourse on Nigeria’s Covid-19 response segun adams

A medical personnel takes sample from a boy at the start of community testing of COVID-19 in Gwale and Municipal Local Governments in Kano State. NAN

Dangote exports clinker abroad, boosts FG’s forex drive ...MAN commends firm for spearheading Nigeria’s export drive BUNMI BAILEY

o reaffirm its status as the biggest cement producer in Africa, Dangote Cement has set the pace with the exportation of 27,800 metric tonnes of clinker to a neighbouring African country. With this historic maiden voyage from its export terminal located in Apapa Port, Lagos, at the weekend, Dangote has gradually made Nigeria, which until recently was one of the world’s largest bulk importers of cement, first, self-sufficient in cement production, and now an exporter of cement clinker to other countries. The exportation of clinker from the Dangote Cement Ex-

port Terminal will also place Nigeria as one of the leading clinker exporters in the world. The company is expected to increase the quantity of clinker export to other African countries within the next few weeks, it was further learnt. It said this development would enable Dangote Cement take advantage of the African Continental Free Trade Area, and by so doing contribute to the improvement of intra-regional trade within the ECOWAS region. The Manufacturers Association of Nigeria (MAN) has, therefore, commended Dangote Cement for leading the way for Nigeria to become one of the biggest cement and clinker exporter in the world. www.businessday.ng

Speaking during the departure of the ship conveying clinker from the export terminal at the weekend, Sada Ladan-Baki, group executive director, Dangote Group, said the increased exportation of clinker and cement to other African countries would not only place Dangote Cement among top clinker exporters in the world, but would also boost Nigeria’s foreign exchange earnings and reduce unemployment in the country. “The beauty of what we have done is that we are going to be generating foreign exchange for the country in terms of dollars and euros. For every batch of clinker we export, the money comes back to Nigeria,” Ladan-Baki said.

“The amount we are talking about is not small. Presently, Dangote Cement should either be number one or number two exporter of cement in Africa and the revenue we have generated in the form of foreign exchange is running into millions. Today, we have formally launched the Dangote Cement Export Terminal. We are still going to do another major launch when the second ship is going out of the country,” he said. Ladan-Baki recalled that only a few years ago, Nigeria was one of the world’s largest bulk importers of cement, but “Dangote has gradually made Nigeria self-sufficient in cement production as well as an exporter of clinker to other countries”.

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xperts in all fields of endeavour and from various climes will on 16th and 17th June, 2020 brainstorm on a national discourse tagged, ‘A National Conversation: Mapping Nigeria’s Response to COVID-19.’ The discourse to be hosted by BusinessDay Media, West Africa’s leading business news and intelligence provider, will feature the experts, who leaders in private and public sectors. They are expected to make sense of Nigeria’s response to the novel coronavirus outbreak and provide clear directions on where the economy is headed. Registration for the event, which holds at 11am on each of the days, is ongoing at https://conferences. businessday.ng//anc2020. Conversations at the digital dialogues will be led by luminaries such as Zainab Shamsuna Ahmed, minister of finance, budget and national planning, and Akin Abayomi, Lagos State commissioner for health. The digital event will address the front-burner issues as Nigeria reopens its economy as well as position @Businessdayng

participants to filter through the noise and take advantage of opportunities in the country. Other speakers include Ibukun Awosika, chairman, First Bank of Nigeria; Obiageli Ezekwesili, member, advisory panel, Nigeria Natural Resources Charter/ former VP, World Bank Africa; Aliyu Abdulhameed, MD/CEO, NISRAL; Doyin Salami, chairman, Economic Advisory Council; Olisa Agbakoba, senior partner, Olisa Agbakoba Legal; Mansur Ahmed, president, Manufacturers Association of Nigeria (MAN); Ofovwe AigImuokhuede, director, Africa Initiative for Governance, and Philip Asiodu, former minister of petroleum. Also expected to speak at the digital dialogues are Yemi Kale, statistician-general, National Bureau of Statistics; Peter Obi, former governor of Anambra State; Charles Robertson, global chief economist, Renaissance Capital; Abubakar Siddique Mohammed, vicechair, ANAP Foundation COVID-19 Think Tank; Sutura Aisha Bello, PPP component lead, UK Nigeria Infrastructure Advisory Facility (UKNIAF), among others.

Monday 15 June 2020

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news ANAP Foundation COVID-19... Continued from page 1

pandemic that started in China seven months ago. In view of this, ANAP Foundation COVID-19 Think Tank has proposed a collection of recommendations to facilitate the gradual reopening of the economy to secure livelihoods and prevent further job losses. COVID-19 epidemiology data from Nigeria Centre for Disease Control show the number of new infections rising, a sign that the curve is yet to flatten and that the spread of the virus has not been brought under control. This means more caution is needed in reopening the economy. This view has been adopted by the ANAP Foundation COVID-19 Think Tank, which was established on March 22, 2020 to help Nigeria respond to the pandemic. On June 13, 501 new confirmed cases and eight deaths were recorded in Nigeria. Till date, 15,682 cases have been confirmed, 5,101 cases have been discharged and 407 deaths have been recorded in 35 states and the Federal Capital Territory. There has been an average of 421 cases daily in the last 14 days as against an average of 21 cases in early April. Nigeria has limited options and the clock is ticking. Epidemiological and evidencebased exit strategies out of lockdowns include waiting for herd immunity to take hold. This is a situation where 6080 percent of the population becomes infected, and the natural transmission of infection ceases. But no country, not even the worst hit on the globe, has achieved this. Nigeria cannot hope to attain this either. The other possibility is to work towards a scenario where new infections from an infected patient fall to 1 or less than 1. Again this will not happen until the infection has peaked, the curve flattened and transmission risk tremendously reduced in the population through a combination of strategies. Nigeria is yet to achieve this milestone from the epidemiology evidence the NCDC provides. Of course, Nigeria could also wait for a widely available

vaccine. Despite optimistic projections to the contrary, the prospects for this could take up to 1 to 2 years. After carefully examining the options available based on epidemiological evidence, the ANAP Foundation COVID-19 Think Tank has recommended measures adapted to Nigeria’s unique conditions. “Key options should focus on messaging for prevention, risk mitigation and behaviour change; these must be our ‘vaccine’ for now,” the Think Tank said in its ‘Occasional Paper 01’ sighted by BusinessDay. In detail, this means the government at all levels, civil society and all relevant partners and stakeholders need to invest heavily in Behaviour Change Communication (BCC) interventions to bring the public to a shared understanding of the risks and repercussions of COVID-19 infection. These investments involve time and money with behaviour change scientists leading the charge. Needed also are clear strategies to build a high level of trust among the people, and between the people and government institutions to aid adherence to official recommendations and guidelines for COVID-19 prevention. Trust is the currency of public health. The Think Tank strongly recommends a review of the national containment guidelines, particularly with regard to religious and large indoor social gatherings. “It is our opinion that lifting the suspension on these (as recently announced by Presidential Task Force) was premature; without the successful buy-in of the entire community for physicaldistancing,wearingofmouth and nose cloth coverings and general hygiene etiquette,” the ANAP Foundation COVID-19 Think Tank said. An important component of these recommendations is the decentralisation of the national response in favour of streamlined partnerships between the state governments, private health sector, national and international non-governmental organisations and development partners in various components of the response.

Court restrains Dangote, Nigerian Police from... Continued from page 1

the Nigerian Police Force

from interfering with BUA Group’s operations of the disputed Okpella mining sites in Okpella, Edo State in a judgement it delivered recently. A statement by the management of the company on Sunday recalled that BUA was legally operating on its mining sites before operations at three of those mines were abruptly disrupted by the Inspector General of Police and the Edo state commissioner of Police on the order of Dangote Industries

& Dangote Cement Plc in 2017. According to the statement, the court ordered the Inspector General of Police as 1st Respondent, Commissioner of Police, Edo State as 2nd Respondent, DangoteIndustries,3rdRespondent and Dangote Cement Plc as 4th Respondent to steer clear of the mining sites or interfering in any manner whatsoever with BUA’s operation of disputed mining lease sites. The statement reads: “BUA wishes to inform its shareholders, employees, customers, regulators, host communities, www.businessday.ng

R-L: Niyi Adebayo, minister of industry, trade and investment; Sunday Dare, minister of youth and sports development; Lekan Afolabi, deputy chairman, House of Representatives Committee on Sports; Muhammed Bello, minister of the FCT; representative of President Muhammadu Buhari; Kola Abiola, son of the winner of June 12, 1993 presidential election, and others looking at the portrait of the late M.K.O. Abiola, at the rebranding of the National Stadium, Abuja, as Moshood Abiola Stadium, Abuja, as part of activities to mark the 2020 Democracy Day in Abuja.

Nigeria’s FX demand backlog returns to 2016...

despite repeated assurances, particularly to foreigners seeking to repatriate money. Godfrey Mwanza, head of Africa franchise at SouthAfrica-based ABSA Asset Management, who has been investing in Nigeria for over 10 years, has money stuck in Nigeria like was the case in 2016. “My experience during the last oil price crash was that I couldn’t get money out in time and so suffered the full brunt of devaluation,” said Mwanza, who sits in South Africa. “This time around I sold very early and was able to exit 80 percent of my Nigerian holdings. The last 20 percent got stuck in the queue,” he said. Mwanza said the dollar scarcity in Nigeria has dis-

couraged him from investing in the country’s equities even when he’s itching to invest. “Despite recent rallies in local stocks, I am unlikely to re-invest in Nigeria until either a meaningful devaluation happens or oil prices rise to over $55 per barrel,” Mwanza said. While he estimates the backlog from foreign equity market investors alone is $2bn, Mwanza said “the true backlog will be higher because you have to also add foreign corporates and foreign OMO investors”. “My understanding is that total foreign holdings in OMO securities is roughly $10bn and yields have fallen/ become less attractive, so I imagine some fraction of that $10bn wants to get out but can’t and is forced to roll over,” Mwanza told BusinessDay by email. In 2016, the Nigerian economy contracted for the first time in a quarter of a century as the CBN’s capital controls exacerbated an already precarious situation for Nigeria which was battling a slump in oil prices and local production. The CBN eventually bit the bullet by devaluing the currency and creating a separate window for investors and exporters which helped ease the dollar illiquidity and aided the economy to

security agencies and the general public that the Federal High Court, Benin, in a recent judgement, has made an order which upholds BUA’s fundamental right to peaceful possession of theminingsitesinObu,Okpella, Edo State (operated by BUA Cement and which BUA became seised by virtue of mining leases granted by the Federal Government of Nigeria), without unlawful interference from the Inspector General of Police, 1st Respondent; Commissioner of Police, Edo State, 2nd Respondent; Dangote Industries, 3rd Respondent; and Dangote Cement Plc, 4th Respondent.

“It would be recalled that BUA was legally operating its various mining sites in ObuOkpella, Edo State before the above named respondents abruptly disrupted our operations at three of those mines in 2017 during the pendency of two other matters. The 1st and 2nd Respondents at the behest of the 3rd and 4th Respondents invaded and shut down the operations. We then approached the courts to enforce our fundamental rights to the property of the mines as well as our rights to continue operating from those mines. Whilst we were awaiting judgement, we continued to

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foreign equity investors and foreign holders of the CBN’s OMO bills account for roughly $5 billion combined. The Central Bank of Nigeria (CBN) has long maintained that there’s enough liquidity to meet what it calls “legitimate” dollar demand, but bankers, manufacturers and foreign investors say the apex bank is struggling to fulfil dollar obligations

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somewhat recover. Dollars have expectedly become hard to come by again in Nigeria, Africa’s largest oil producer, following the collapse in international oil prices. Oil exports account for over 80 percent of dollar inflows into Nigeria, making it the largest source of the greenback into the country. Although the CBN has weakened the official rate to N360 from N306 and allowed the rate at which investors and exporters bought dollars to weaken to N380/$, the naira still trades 20 percent weaker in the parallel market. The disparity between the FX rates in the country has deterred foreign portfolio inflows, another main source of dollars into the economy. “The CBN should be seeking ways to boost dollar supply in the country as a way of complementing lower dollar receipts from crude oil sales, instead it has quickly resorted to its unsuccessful demand management strategy that hammered the economy in 2016,” one economist said. Another major source of dollars into Nigeria that is fast running into troubled waters is diaspora remittances. The CBN’s capital controls mean dollars sent into the country by Nigerians in diaspora are mandatorily converted at N374 per US dollar. That’s 20 percent weaker than the sustain our operations from our other numerous mines in that areaunaﬀectedbytheseactions. The statement further explained that: “After a prolonged trial, which commenced in 2017, the court not only found that we have always been in possession of the mining sites but clearly found that the 1st and2ndrespondentswereused and allowed themselves to be used by the 3rd and 4th respondents to invade, and disrupt our operations in the aﬀected and disputed mine sites during the pendency of two other matters between us and the 3rd and 4th respondents. @Businessdayng

parallel market rate of N450 per dollar. Western Union, one of the leading international money transfer operators, only agreed to pay the naira equivalent of the $1,000 sent to Chris Nwankwo by his brother in the United States last week at N374. Nwankwo would rather he exchanged the dollars at the parallel market where he would have got more naira for less dollars. “The mistake I made was asking my brother to send the money through a formal channel, it certainly makes more sense to beat that process and have my dollars exchanged at a higher rate,” Nwankwo, a Lagos resident, told BusinessDay, insinuating he would route his dollars through unofficial channels next time. Nwankwo’s plight sounds all too familiar. The same scenario was constantly at play in 2016 when Nigerians sought other ways of avoiding the CBN’s capital controls to receive dollars in order to take advantage of the premium the dollars was exchanging for on the streets. That further stoked the dollar shortage in the country as people stopped routing dollars thorough banks. “There’s an exchange rate misalignment that has been exacerbated by the oil price crash and the CBN can either seek ways to boost supply in the market or resort to its demand management strategy of 2016 and it has opted for the latter, essentially choosing to collapse the economy on the altar of FX like in 2016,” another economist who did not want to be quoted said. Like in 2016, the foreign exchange shortage is also forcing international banks to pull the plugs on local lenders as they fear they may struggle to repay dollars with dwindling oil receipts and the CBN rationing scarce dollars arbitrarily. Analysts say the CBN’s actions could severely dent the credit rating of Nigerian

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news

What governments can do differently in housing sector to revive post-Covid-19 economy CHUKA UROKO

ince after the Shehu Shagari and Lateef Jakande days when governments at federal and state levels built low-cost housing for low-income earners, successive administrations at both levels have been building houses, but for commercial purposes, thus scheming out low income home buyers. At a media programme recently, Babatunde Fashola, the minister for works and housing, affirmed that the government had been, and would continue to deliver housing through the ministry and its agencies such as the Federal Housing Authority (FHA) and Federal Mortgage Bank of Nigeria (FMBN). This decision to dabble into an area where they are supposed to be players has always pitched the governments against private sector operators who allege that governments are crowding them out of business, insisting that “government has no business in business, especially housing.” As part of strategies to revive the economy post-Covid-19, the government is considering embarking on massive housing development and roads construction to generate economic activities and create jobs. Housing sector developers have commended this thinking,

saying however that there are other ways government can go about this and still achieve the same result of providing shelter for the largely homeless Nigerians, creating jobs and, by extension, reviving the economy. “Alternatively, government can look into reviewing policies surrounding and affecting businesses in the country to support growth of businesses. A lot of businesses have been negatively hit by the pandemic. This cuts across SMEs to large corporations. “Particularly, estate developers in the private sector can be incentivised towards a more robust housing delivery. Tax holidays can be granted to the housing sector as well as duty waivers on non-luxury building materials,” Gbenga Olaniyan, CEO, Estate Links, advises in an interview with BusinessDay. Olaniyan explains that with favourable policies in place, businesses can be resuscitated and investors would be encouraged to come into the country, noting that some of the policies in place in the country have stifled businesses. “Also, loans should be given with favourable payback conditions for both parties,” he says. According to Olaniyan, when the commerce of a nation is worked upon, it affects almost every sector, explaining that when this is done, firms could then begin to regain grounds, pay employees

and expand such that there would be more money in circulation, leading to a win-win situation for all. Government has provided subsidies to almost every other industry apart from the real estate industry, Damola Akindplire, managing director of Alpha Mead Development Company (AMDC), notes, saying it was time for government to provide cheap credit to the real estate sector and its value chain. He states that government should also encourage tax waivers like the Executive Order 7 for private companies that deliver houses below N15 million, so that there could be some traction in the affordable housing space. The government, private sector, professionals, community, and the individual are the five essential participants in delivering affordable housing. Paul Onwuanibe, CEO, Landmark Africa Group, explains to BusinessDay in an interview that each party is distinct yet linked to the group. “They have direct responsibility for affordable housing to be delivered and to be sustainable. Although each player may act independently even when some or all the other essential players are yet to get on board, a collaborative effort among all the five participants will yield fruitful results,” he states.

3 out of 10 MSMEs in Nigeria won’t survive coronavirus pandemic – Survey MICHAEL ANI

hree out of every 10 Micro, Small and Medium Enterprises (MSMEs) operating in Nigeria will not survive through the coronavirus pandemic, according to a new survey, showing how bad businesses in the segment have been negatively affected since the outbreak started. Dubbed “The impact of COVID-19 on Nigeria MSMEs”,the new survey done by FATE Foundation in partnership with BudgIt Nigeria was designed to give insight into the prolonged impact the COVID-19 pandemic is having on MSMEs in the country. Responses were gathered from 1,943 businesses, 80 percent of which were micro businesses polled across various sectors in the country. The survey showed that the impact of COVID-19 on businesses in the segment has been brutal with 94.3 percent of them reporting they are worse-off on all financial fundamentals from sales to revenue, down to their cash flows. That would deal a big blow to the employment, income expenditure, poverty rate and real gross domestic product growth of Africa’s largest economy, which looks onto businesses in the segment to employ about 84 percent of its working population and rake in as much as 48 percent of national GDP, according to PwC data. On employment, Nigeria could see a host of its population

becoming jobless, which would further exacerbate the country’s unemployment rate already at a record high 23 percent as of third quarter 2018, the last time statefunded data agency, NBS, updated the figures publicly. From the survey, about 80 percent of businesses reported that they were likely to lay off employees. Their decision to retrench staff is due to a number of factors including prolonged periods of the pandemic, inability to pay staff, poor sales and restriction of movement. Those who might manage to survive the tsunami of being laid off from work would see a deep cut in income which could go a long way in threatening the livelihoods of many Nigerians and push more people into poverty. The new survey is somewhat in tandem with that conducted by the NBS when it surveyed 1,950 households, showing that about 4 out of every 10 of them said they lost their jobs due to the pandemic, while 79 percent saw their total income decreased since mid March, almost about one month after the index case was first reported in the country. Meanwhile, 47.1 percent of MSMEs surveyed said they were positive that their businesses would survive the pandemic while 22.8 percent were indifferent. MSMEs are important to the growth and survival of any economy, hence effectively supporting them, especially at a time like this when the global economy is on the verge of a recession, should

be a priority path for stakeholders as they work towards economic recovery and slowing down job loss, analysts have said. As a way of supporting households and MSMEs that are affected by the coronavirus pandemic, the Federal Government through the Central Bank of Nigeria (CBN) and the Ministry of Finance, Budget, and National Planning rolled out some monetary and fiscal measures to help mitigate the impact of the pandemic on the economy, Nigerian businesses, and households. One of such was the introduction in April of a N50 billion Targeted Credit Facility (TCF) as a stimulus package for SMEs. While critics have raised concerns that the intervention fund is too little to move the needle for the country’s over 41 million MSMEs, many businesses have complained of not being able to access any of such stimulus from the government yet. From the survey, 94.2 percent of MSMEs said they haven’t received any support whatsoever. This might be more crisis looming for Nigeria’s economy already showing signs of weakness from the devastating effect of the COVID-19 pandemic. The Nigerian economy slowed 1.87 percent in the first quarter of 2020 from 2.55 percent in Q4’19, owing to a slower growth in both the country’s oil and non-oil sectors. The country has also been tipped by the World Bank to contract as much as 3.2 percent this year.

New Odu’a Investment Board set to re-position company ... to partner IFC, AfDB, Afrexim Bank, others REMI FEYISIPO, Ibadan

o enhance its performance, profitability and sustainable growth necessary to achieve the expectations of its shareholders and other stakeholders, the newly inaugurated board of Odu’a Investment Company Limited (OICL) led by the chairman, Segun Aina, is set to re-position and restructure the conglomerate and its subsidiaries. To this end, the Board has drawn up 11-point agenda and quick wins for its first 85 days in office, which would provide the requisite foundation needed for the transformation of the company. The agenda include the development of a five-year strategic plan - 2020-2025. A Board strategic retreat to be facilitated by KPMG has been scheduled to hold in July 2020. The retreat will determine strategies required to refocus, recalibrate and accelerate delivery of desired results. The Board will also identify new key investment opportunities in agriculture, technology, and commercially viable infrastructure, ensure the creation of a project management office and corporate transformation agenda, improve brand and media profile and have oversight function in rigorous quarterly business reviews. The Board, in alignment with the drive of the owner state governments to unlock value in the agriculture value chain in the South West, is committed to operationalise the South West Agricultural Corporation Limited (SWAGCO) by end of June 2020. Likewise, the Board recog-

nises the importance of funding, strategic partnership and alliances in the growth of the business, as such, it will identify and create local and international relationships with funding partners such as IFC, African Development Bank (AfDB), Afrexim Bank, and other leading local and international institutions. To ensure Best Practice and Corporate Governance in Odu’a Investment, according to Aina, the Board will accelerate the completion of the Corporate Governance Advisory Assignment being carried out by KPMG and would provide all necessary support to ensure it strengthens executive capacity with recruitment of two Executive Directors in due course. One of the objectives of the shareholders is to make Odu’a Investment a world-class company with strong governance framework that could compete with similar organisations in terms of growth, profitability and sustainability. To achieve this objective among others, the Board commenced action immediately it was inaugurated on May 7, 2020, and have held two board meetings within two weeks to quickly familiarise itself with the operations and current status of the company as well as chart a roadmap for operation. At a recent virtual meeting held with the management team of Odu’a Investment, chairmen/managing directors of Subsidiary Companies on May 22, 2020, the Board emphasised profitability, professionalism, team work and culture change in the management and operations of the group. www.businessday.ng

Muhammad Muhammad, director-general, National Emergency Management Agency (NEMA), presents bags of fertilizer to a beneficiary during the inauguration of fertilizer distribution to farmers affected by 2018 flood and communal conflicts in Benue State. NAN

AEDC confirms metering 100,000 customers in franchise areas HARRISON EDEH, Abuja

buja Electricity Distribution Company (AEDC) has confirmed that metering performance under the meter asset provider scheme (MAP) reached a milestone May 5, when the company metered the 100,000th customer in its franchise areas of FCT, Kogi, Nassarawa and Niger State. The MAP schemes started in May 2019 as a power sector strategic initiative aimed at eliminating estimated billing and closing the metering gap. The Nigeria Electricity Regulatory Commission (NERC) puts the number of customers in

Nigeria currently on estimated billing at 62.3 percent. Oyebode Fadipe, general manager, communications at AEDC, says in a statement that the achievement is the result of collaborative effort between AEDC project team and the three Meter Asset Providers (MAP) as well as the NERC, which has always provided the broad policy guidelines for the execution of the project. The meter asset providers are MOJEC International Metering Company Limited (FCT & Kogi State), Tubor Energy (Nasarawa State) and Meron Consortium covering Niger State. AEDC’s managing director,

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Ernest Mupwaya, attributes the success so far recorded by the company to the state-ofthe-art ICT facilities as well as the simplified multiple meter application channels that allow customers to apply for meter from the comfort of their homes in any part of the world. According to Mupwaya, immediately the company commenced business in 2013, AEDC identified metering as a major success pillar for the reduction of ATC&C losses, hence it has pursued it vigorously, putting in place all necessary infrastructure to ensure that as many customers as possible are metered within the shortest possible time. @Businessdayng

“From the beginning, we recognised the importance of metering of customers as one of the key strategic business initiatives we must pursue vigorously,” he says. This is what informed the several steps we had taken even before the commencement of MAP in May 2019, he states, and in order to speed up the MAP programme, we resorted to Mobile MAP Metering. “It is this mobile approach coupled with the robust ICT infrastructure, support from the regulator, our MAPs as well as our project team that has helped us to reach this milestone,” he says.

Monday 15 June 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

Beijing braces for coronavirus second wave as city shuts market

Imported goods face backlash after state media blames salmon shipments for new cluster DON WEINLAND IN BEIJING

eijing is bracing for a second wave of coronavirus after the Chinese capital was forced to lock down residential compounds and close a large market in response to new locally transmitted coronavirus cases. City authorities at the weekend confirmed 41 symptomatic cases and 46 without symptoms, according to a statement from the World Health Organization, many of which had links to Beijing’s largest fresh seafood and vegetable market in the western area of the city. A city of more than 20m people, Beijing enforced some of China’s strictest travel controls at the start of the pandemic. Until the latest outbreak, the city had gone more than 50 days without a new case. In the early days of the pandemic, which originated in the central China city of Wuhan, Beijing managed to keep total infections below 600. The home of the country’s top leadership, city managers imposed severe

Paramilitary police move to guard Beijing’s Xinfadi food market which was shut due to a new cluster of coronavirus cases in the city © AFP via Getty Images

restrictions on entering the capital that included mandatory quarantines in government facilities. Most international flights have been diverted to nearby cities so as to lower the risk of imported infections in China’s

political hub. Over the weekend, authorities closed the Xinfadi market, a sprawling complex that provides most of Beijing’s fresh seafood, fruits and vegetables. Several residential compounds on the west side of the city have been

locked down and more than 100 people have been put in quarantine. In a stark turn of events, several cities across China have warned their residents against travelling to Beijing, including Dalian and Dandong in north-

eastern China. China has adopted a “zero tolerance” stance toward new cases. Areas that present any new cases have been quickly locked down, often trapping millions of people. In May, several areas in northern China were locked down after small clusters of the virus were detected. Many other countries have developed plans to manage small, inevitable outbreaks while avoiding sweeping closures of districts or cities. A report from nationalistic tabloid Global Times reported that the virus was detected on cutting boards used for imported salmon at the market. This led to a frenzy of online commentary blaming imports for the new cluster. Many shopping centres across the city have reportedly removed salmon from shelves. The reports linked to imported salmon have helped fuel the idea that coronavirus did not originate in China and may have been brought in by foreigners. Chinese diplomats have promoted the concept that the US military may have planted coronavirus in Wuhan last year.

Owners of AS Roma seek new buyers after collapse of €750m sale Deal for Italian football club fails as impact of virus-induced fixtures suspension bites ARASH MASSOUDI, JAMES FONTANELLAKHAN, MURAD AHMED AND SAMUEL AGINI

he owners of Italy’s AS Roma are searching for new buyers for the Serie A football club after a planned €750m sale collapsed due to the pandemic, according to two people with direct knowledge of the matter. AS Roma’s existing ownership group, which includes the club’s president James Pallotta, are working with bankers at Goldman Sachs as they seek fresh bids, these people said. The search comes after a deal clinched late last year with Texasbased billionaire Daniel Friedkin fell apart in recent months, they added. Goldman has reached out to several potential buyers, including wealthy clients and Wall Street investors, but has not received any firm offers. Goldman declined to comment and AS Roma did not respond to a request for comment. The collapse of the deal represents the latest fallout from the suspension of football fixtures in the wake of the coronavirus emergency. Even with Serie A matches due to resume on June 20, steep falls in revenues for clubs in Europe’s top leagues due to lost broadcasting, sponsorship and ticketing income this season have made it difficult for

investors to assess the value of teams. Two people close to Mr Friedkin, whose family owns the Gulf States Toyota Distributors car dealership franchise and other business interests, said that the US billionaire made a revised offer of €575m in late May, which was rebuffed on May 28 by Mr Pallotta. These people added that Mr Friedkin offered to pay in instalments beginning with €125m at signing. After that he would have paid a further €52m over six months www.businessday.ng

and €85m by the end of the year. They added that he would have also covered €300m in debts by the end of the year and would have covered minority interests in the club with an extra €13m. Mr Friedkin would be open to re-engaging with Mr Pallotta, said a person close to the US billionaire, who added, however, that he was not going to put more money on the table. “He’s not a hothead. If Jim chang-

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es his mind and comes back willing to do a deal Dan will sit down with him,” this person said. One person close to AS Roma refuted the idea that there had been a counter offer and questioned whether Mr Friedkin had the money secured to pursue any transaction. This person added that conversations with other bidders continued and that there was no certainty a deal would be reached. One adviser to AS Roma said that @Businessdayng

several people within the club were dismayed by Mr Pallotta’s decision to walk away from the deal. “It was a risky move to reject €575m,” the person said. Joseph DaGrosa, a US private equity investor whose General American Capital Partners investment group sold its stake in French club Bordeaux last year, is among those considering a bid for AS Roma. A representative for Mr DaGrosa did not respond to a request for comment. While resuming fixtures in Serie A, Italy’s top division, will protect broadcasting deals, ticketing income is set to fall, with spectators unable to attend stadiums due to social distancing restrictions. Revenue across the division is expected to drop by €400m this season, according to consultancy Deloitte. Mr Pallotta’s attempts to invest in the club and increase revenues faced challenges before the coronavirus-induced crisis. AS Roma’s plans to build a €300m stadium outside the capital city have been thwarted over the past four years by a number of issues, including a corruption investigation. Serie A is considering measures to provide more financial assistance to clubs, including engaging in talks with private equity firms CVC Capital Partners and Bain Capital about selling a minority stake in the competition.

Monday 15 June 2020

BUSINESS DAY

COMPANIES & MARKETS

Private equity barons grow rich on $230bn of performance fees New analysis estimates performance of PE funds, net of fees, matches public equity markets

CHRIS FLOOD IN LONDON

handful of super wealthy multibillionaires have accumulated vast riches from running private equity funds that have performed no better on average than basic US stock market tracker funds since 2006. The number of private equity barons with personal fortunes of more than $2bn has risen from three in 2005 to 22, according to a new analysis which estimates investors paid $230bn in performance fees over a 10-year period for returns that could have been matched by an inexpensive tracker fund costing just a few basis points. “This wealth transfer from several hundred million pension scheme members to a few thousand people working in private equity might be one of the largest in the history of modern finance,” said Ludovic Phalippou, professor of finance at Oxford Saïd Business School. The biggest winners have been the founders of Blackstone, Apollo, KKR and Carlyle — the four largest private equity managers. Stephen Schwarzman’s personal fortune of $17.7bn ranks the Blackstone co-founder as the world’s 29th richest billionaire, according to the annual Forbes list. Leon Black’s $7.7bn fortune ranks the Apollo founder at 63rd, while George Roberts ($6.1bn) and Henry Kravis ($6bn) of KKR rank as the

108th and 112th richest billionaires. David Rubenstein, Carlyle co-founder, is at 275th place with an estimated wealth of $3.1bn. Private equity contracts are complex and opaque with little public information disclosed about fund performance. But claims that illiquid private equity strategies deliver markedly superior performance to public markets have attracted huge inflows from institutional investors including pension schemes, insurers, sovereign wealth funds, endowments and family offices. Mr Phalippou’s analysis indicates that large US public pension plans earned about $1.50 (net of fees) for every $1 invested in private equity funds between 2006 and 2015. This translates

into annualised returns of about 11 per cent, little different from the US stock market over the same period. “The performance of PE funds, net of fees, matched that of public equity markets since 2006,” said Mr Phalippou. Blackstone said that Mr Phalippou’s analysis contained conceptual errors and was deliberately aimed at producing negative conclusions. “We have delivered exceptional outperformance to our investors, including 31m US pensioners,” Blackstone said. An alternative methodology for evaluating private equity returns, known as public market equivalent, points to similar results.

More recent vintages of PE funds since 2015 have not fully matured and were excluded from the analysis. Low interest rates and rising valuations in the long bull market for equities which followed the financial crisis provided an ultra-benign environment for private equity managers. Mr Phalippou warned that any lengthy period of weaker stock markets could expose flaws in the industry’s expensive business model where large fees are paid every year to investment banks, consultants, lawyers and accountants along with interest payments by portfolio companies on debt raised from institutional investors. “The private equity industry

may need to rethink its business model, lowering costs and reconsidering how performance fees are paid in order to remain sustainable. This, however, will probably generate fewer billionaires,” he said. Other recent analysis has drawn similar conclusions. A report published in February by Bain & Company found investors did better from tracking the S&P 500 over the past decade than investing in US buyout funds. A recent analysis of 717 private equity groups by Victoria Ivashina and Josh Lerner, two Harvard Business School professors, said the division of profits among senior partners depended on whether they were founders of the partnership and not on their record as investors. Carlyle said that it was “inappropriate” to include other asset classes and strategies, such as real estate, energy, and long-dated private equity, with buyout funds as each has a different risk/return profile and time horizon. “Carlyle is proud of its track record of investment performance that has enabled it to keep the trust of its investors for decades,” said a company spokesperson. KKR said: “We are proud of our long track record of outperformance for our investors and disagree with the representations in the [Phalippou] paper which are based on flawed assumptions and selective engagement with the facts.”

Gas exports plummet at US ports Higher natural gas prices on the Gulf of Mexico coast are putting American producers out of the market GREGORY MEYER IN NEW YORK AND DEREK BROWER IN LONDON

he coronavir us has crushed exports of liquefied natural gas from US shores, curtailing an important sales outlet for the world’s largest gas producer. Shipments will have dropped by 60 per cent in July from their peak in January, the Energy Information Administration forecast last week, with the US sending out the least liquid gas since before a string of new processing units opened between Texas and Georgia. Trade in LNG has tied together gas markets once segmented by continents, as gas is chilled and condensed for transport on ships. The US contributed more than half the liquefaction capacity added in the world last year, according to the International Gas Union. When Sempra Energy’s Cameron LNG

The Freeport LNG facility in Quintana, Texas, US. Just over 750,000 tonnes of LNG had left US ports on 11 tankers from June 1 to late last week © Craig Hartley/Bloomberg

produced its first volumes last May, President Donald Trump visited the plant to cheer on the US as “the energy superpower of the world”. Some European countries have hoped these rising supplies would help break their dependence on Russian natural gas imports. Poland recently decided it would not renew a long-term supply deal with Russia’s Gazprom that expires in 2022, favouring imports of Norwww.businessday.ng

wegian and American gas instead. The US state department last year hailed the country’s new LNG capacity as allowing “molecules of freedom to be exported to the world”. For now, though, natural gas prices on the Gulf of Mexico coast are above those in east Asia and Europe, putting US LNG out of the market, according to brokers, especially once shipping costs are

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factored in. The pandemic has caused the biggest fall on record in world gas demand, giving buyers the upper hand. Natural gas prices are so cheap in Europe that an LNG cargo from France is scheduled to arrive in Mexico this month, undercutting exports of US gas delivered by pipeline, said Tudor, Pickering, Holt, an investment bank. “Essentially, the world doesn’t need more LNG from the US at this moment,” said Dumitru Dediu, a partner at McKinsey who consults for the energy industry. Just over 750,000 tonnes of LNG had left US ports on 11 tankers from June 1 to late last week, according to ClipperData, a vessel-tracking service. In May, 3.6m tonnes of LNG had been shipped on 53 vessels. Volumes of pipeline gas fed to the six LNG terminals in the mainland US have dropped below 4bn cubic feet per day, down from more than 9bn cu ft/d in January, IHS @Businessdayng

Markit PointLogic data showed. US oil and gas fields will produce about 90bn cu ft/d of gas this year, the EIA estimates. About 45 shipments planned in July, or more than 60 per cent of the total, have now been cancelled, said brokers and analysts. But about half of the US’s exports are underpinned by long-term contracts that require buyers to pay even for cargoes they cancel, insulating the revenues of plant operators such as Cheniere Energy, which owns liquefaction units at Sabine Pass, Louisiana and Corpus Christi, Texas. Buyers’ appetite for US gas will eventually perk up again, say analysts, not least for strategic reasons. “How much Qatari exposure do you really want? How much exposure to Russia do you want?” asked Frank Harris, head of global LNG at Wood Mackenzie, a consultancy. “So there will be a need for more US LNG.”

Insight

BUSINESS DAY Monday 15 June 2020 www.businessday.ng

Foodmaker that swooped on lunch of older peers OLUFIKAYO OWOEYE

here is hardly a shortage of stories on companies that have been on the receiving end of Nigeria’s sluggish economy, but the success stories of others, who have thrived in the midst of several landmines manage to slip away quite frequently. One of such companies is Singapore-based Tolaram Group, the company that has turned instant noodles into a staple of the Nigerian diet. In what could be termed a leap of faith, and realizing an opportunity to create noodles market in the country, Tolaram started importing noodles into the country in 1988. To better appreciate the bold step, in 1988, the country had witnessed six coups in her 28years of independence. The high political risk and volatile operating environment were enough reasons to make the case for investing in the country less compelling. Undeterred by the myriad of challenges, two brothers and executives from Singapore, Haresh and Sajesh Aswani who had been selling textile moved into action from an initial importation of two containers of Indomie noddles to a muti-milliondollar foods company that now has a wide range of investments in the country from consumer goods, industrial, energy and infrastructure, digital and financial services. Nigeria is currently among the largest consumers of instant noodles, according to figures from the World Instant Noodles Association, with 1.92billion servings as of May 2020, the country occupies 11th position in the global demand for noodles ranking. In 1995, the company entered a joint venture with Salim Group, the Indonesian company behind Indomie and began the manufacturing of Indomie in the country. Although it has not been a smooth ride as growth came slowly, it took 13 years for revenues to reach $10m in Nigeria, before sales began doubling annually by the mid-2000s. Inconsistent government policies, currency devaluation, ban on

importation crude palm oil into the country, shortage of Foreign exchange to import some of its raw materials means the company would have to device a strategy to weather the storm. “When you do business here you have to mitigate your risk, so you hedge, number one, and two, you try and get as much local financing as possible,” Haresh Aswani said in an earlier interview granted to a media outlet “Sometimes it’s at a high cost but if something goes wrong, it’s worth it.” he added. No wonder, Dufil Prima, the Noodles-making arm of the company is no stranger to the debt capital market having issued an aggregate of N21 billion in commercial paper between 2016-2017 and a bond issue due to mature in 2022. In March this year, it announced the opening of series 1,2 and 3 commercial paper program under its revised N30billion program. A commercial paper is an unsecured, short-term debt instrument issued by a corporation, typically to meet short term liabilities. Tolaram has grown to almost $1 billion in turnover, with Nigeria accounting for $900m of the group’s annual sales. It has also built and operates 13 manufacturing plants in Nigeria, and runs a 1,000+ plus truck logistics company Indomie is now in every corner market stall across Nigeria, and in most kitchen cupboards. The chicken flavored

is the most common in most Nigerian homes with children and students alike take instant noodles as breakfast, as snacks, and lunch at school. Over the years, it has also faced intense competition, beating old peers in the consumer goods space to their game. The list includes food makergiants Nestlé’s Maggi noodles brand, Honeywell, Chikki, Supreme Noodles, among others and now controls about threequarters of Nigeria’s $600m noodle market. In 2017, Dangote Noodles Limited, a unit of Nigerian company Dangote Flour Mills sold two of its production lines to Dufil Prima Limited makers of Indomie Noodles for N3.7billion “One of the key factors for us to decide to go [into] other products was after we beat Nestlé at their game, we realised we can take on multinationals and win,” Aswani said. Not resting on its oars, Tolaram has in recent years entered a series of joint ventures: a milk business with Denmark’s Arla Foods, cereal and snacks with Kellogg’s and, dental care products with Colgate-Palmolive. Tolaram promoters of the Lekki Port LFTZ Enterprise Limited (LPLEL), through a special purpose vehicle for the construction of Lekki Deep Sea Port at the Lagos Free Trade Zone, last year announced the signing of a $629 million facility agreements with the China Development Bank (CDB) for the construction of a port which is to be Sub-Saharan

Africa’s deepest port and Nigeria’s first deep sea port. The new port would be financed with facility from the China Development Bank, and $470m in equity from the stateowned China Harbour Engineering Company, which has a 52.5 per cent stake and will build it. Tolaram owns 22.5 per cent, the Nigerian Ports Authority has 5 per cent and Lagos state 20 per cent. It also mulls entry into the digital banking space leveraging its wide Africa distribution network. Potential in Nigeria’s food business valuechain remains untapped Amid several challenges, players in the food business value chain such as Tolaram have continued to smile to the bank as household spending on food continues to surge. Figures from the 2019 consumption expenditure pattern report show that the total household expenditure on food and non-food for 2019 was N40.27 trillion. Of this total, 56.65percent at N22.7trillion of total household expenditure in 2019 was spent on food with the balance of about 43.35percent at N17.4trillion was spent on nonfood items According to a report by the World Economic Forum WEF, Nigeria tops the list of nine countries in the world that spend

over 40percent of household income on food. Four of them are in Africa: Nigeria 56.4percent; Kenya 46.7percent; Cameroon 45.6percent; and Algeria 42.5percent. Four are in Asia: Kazakhstan 43.0percent; Philippines 41.9percent; Pakistan 40.9percent ; and Azerbaijan 40.1percent. Guatemala is the only South American country to appear in the list and spends 40.6percent of its household income on food. On the other hand, only eight countries in the world spend less than 10percent of their household income on food. Four of these are in Europe: the UK is third at 8.2percent, followed by Switzerland at 8.7percent; Ireland spends 9.6percent and Austria 9.9percent. The remaining four countries are spread across the globe. The US spends the least at 6.4percent, Singapore spends the second lowest amount at 6.7percent. Canada spends 9.1percent on food, while Australia spends 9.8percent By implication, in richer countries, food spending has become a small part of the weekly household spend perhaps diminishing but the reverse is the case for poor countries where it accounts for huge percentage of household spending. In a recent interview Haresh Aswani, managing director Tolaram Nigeria advised potential investors eyeing Nigeria to look at Nigeria as a long-term country. “Do not look at Nigeria as a short-term country. You must have a focused commitment. You must have a strong stomach to do business in Nigeria and most importantly you have to be patient. It’s not a country the makes decisions very fast. We are still settling down and the government is still settling down but I think that in time it will find its footing. The great thing is that Nigeria has embraced democracy and it is a big step for the country. Nigeria is still like a growing child and it still needs time to mature” he said.

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