BusinessDay 16 Jul 2020 by BusinessDay

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news you can trust I ** THURSDAY 16 july 2020 I vol. 19, no 607

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Stock market readies for rough start to earnings season T T

579.04

Multiple checkpoints by Customs, agencies stifle ease of business at ports … fuel corruption

AMAKA ANAGOR-EWUZIE

Iheanyi Nwachukwu

he Nigerian stock ma rke t i s g ra d u ally adjusting to the reality of highly anticipated w eak second-quarter (Q2) earnings of listed companies. From a fundamental perspective, July is an earnings reporting month that captures the financial performance of companies in the second-quarter (Q2) period of April to June. In what signals the Q2 earnings season, more companies have either held or scheduled their Board meetings to consider Continues on page 31

he long list of checkp o i nt s i m p o r t d o c u ments are expected to pass through before importers’ goods are allowed to leave the Continues on page 31

Inside

Mobile devices seen taking over media consumption as COVID-19 disrupts industry P. 30 L-R: Rabiu Abdullahi Umar, group chief commercial officer, Dangote Industries Limited; Michel Puchercos, group managing director/CEO, Dangote Cement plc; Funmi Sanni, marketing director, Dangote Cement plc, and Adeyemi Fajobi, national sales director, Dangote Cement plc, during the Dangote Cement Bag of Goodies 2 National Consumer Promotion press launch in Lagos,yesterday.

Dangote Cement’s ‘Bag of Goodies’ promo season 2 to produce 9 millionaires daily P. 30

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BOFIA: CBN seeks additional powers to resolve failing banks, freeze accounts linked to criminals ... wants creation of special courts for financial sector Onyinye Nwachukwu, Abuja

entral Bank of Nigeria (CBN) is seeking legal powers to enable it expand options available to it in resolving failing banks and managing systemic crisis without recourse to the public treasury. To this end, and in line with international best practices, the CBN is seeking for the establishment of what it called ‘a resolution fund’ to pool together resources for managing banking sector distress. The CBN made the appeal Wednesday to members of Senate Committee on banking, Insurance and other Financial Institutions at the Senate Committee public hearing on its Bill for an Act to repeal the Banks and Other Financial Institutions Act (BOFIA) 2004 and re-enact the Banks and Other Financial Institutions Act 2020. The CBN also recommended, “The adoption of additional resolution tools such as bail-in -which ensures that losses are absorbed by shareholders and creditors; sale of business - which allows the resolution authority to sell all or part of the failing bank to a private acquirer; and asset separation - which entails isolating the “bad” assets of the bank in an asset management vehicle for orderly wind down, if immediate liquidation is not justified in current market conditions.” CBN director, legal services, Kofo Salam-Alada, made the submissions to the Senate

at the public hearing. “We noticed that the powers of the CBN to intervene in the process of managing a failing bank and Reinstatement of a bank in a grave situation and bring it back to sound financial health was omitted in the Bill. “The omission erodes the powers of the CBN and creates a huge gap in the regulatory and resolution framework. Therefore, we propose that the extant provisions should be reinstated,” the bank submitted. The CBN is further seeking for powers in the impending amendment to the BOFIA to freeze accounts link to criminals, while also canvassing for the creation of a credit tribunal - a special court- that would help address the perennial problem of non-performing loans in the country. Salam-Alada said fraud and finance crimes would be checked if the CBN Governor has powers to apply to the court for orders to freeze accounts which are deemed to be linked with criminal and other civil infractions. He lamented that this power was omitted in the Bill inadvertently in the current Act. “As part of measures to address the role of non-performing loans, we propose the creation of a Credit Tribunal. The Overarching objective is to create an efficient regime for the recovery of eligible loans of banks and Other Financial Institutions (OFls)

and enforcement of rights over collateral securities,” he said. The CBN further thinks it is important for the new BOFIA to allow the apex bank Governor to designate systemically important banks based on clear parameters and prescribe additional supervisory requirements for them considering their size, complexity and the risk they pose to the entire banking system and the economy. Salam-Alada said the amendment of BOFIA had become important considering that several new types of licensed institutions have entered the Nigerian financial Services sector since the Act was enacted in 1991. These include the noninterest banks, credit bureaux, payment system service providers, among others. “There is a compelling need to introduce new provisions in the Bill to address the unique peculiarities of these institutions”, he affirmed”. The CBN commended the senate committee for proposing more stringent fines and penalties regime in the bill in comparison with the extant Act, but noted that the revised fines and penalties may not be sufficiently deterrent in some instances given current economic conditions. For instance, the bill does not clearly differentiate between criminal and administrative sanctions, and the CBN view is that the bill should be made to empower it to impose administrative sanctions or penalties.

MSMEs urged to embrace risk sharing for increased access to finance SEYI JOHN SALAU

he current socio-economic realities in Nigeria including the Covid-19 pandemic has brought to the fore the need for additional support in alleviating the financial constraints faced by the Micro, Small and Medium Scale Enterprises (MSMEs). This was the main thrust of the discussion by industry experts at the just concluded Development Bank of Nigeria (DBN) webinar series themed, “Risk sharing: a key driver for increased financial access and economic development for MSMEs.” The DBN webinar series aimed at providing capacity building for MSMEs through digital platforms to ensure they are empowered to remain in business through these hard times. The webinar panelists highlighted that Credit Guarantee Schemes (CGS) were popular policy instruments created to help alleviate the credit constraints faced by MSMEs. In Nigeria, however, there exist some challenges with risk

sharing in the local market as most MSMEs do not fully grasp the concepts of risk-sharing and credit guarantees. While discussing, they also stressed the need for key industry stakeholders, MSMEs, banks, and regulators to openly discuss alternative means of financing and the existence of risk-sharing. “Risk sharing facilities will help increase access to finance which helps MSMEs grow, increases employment and output in the economy,” said Ayodele Olojode, the group head emerging business, Access Bank Plc. According to Olojode, MSMEs do not have regular and sustained access to finance because of limitations like high interest rates, lack of tangible collateral and economic conditions. Olojode opined that the volume of guarantees and the size of the industry contributions to MSMEs remain low compared to peers in other economies. “Credit guarantee is the future because it will compensate for insufficient collateral, provide regulatory capital relief www.businessday.ng

for banks, growth for MSMEs, increased economic GDP and job creation,” said Olojode. Ahmed Rostom, the senior financial sector specialist, World Bank, shared data on economic growth challenges and the impact of Covid-19 in Nigeria, from surveys carried out by the World Bank between April and March 2020. The survey highlighted the impact of Covid-19 on the Nigerian economy stating that 42% of individuals who were working before March 2020 especially those working in the hospitality and service industry are no longer working, a situation which he described as disturbing. Claire Omatseye, MD, JNC International, while rounding off the webinar stressed the importance of risk sharing among all stakeholders. “For MSMEs, risk sharing helps eliminate financial oppression and predatory lending, while also ensuring prosperity is shared equitably. For the government, risk sharing contributes to the realisation of its economic objectives and stabilisation policies,” said Omatseye. https://www.facebook.com/businessdayng

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Clean-up: FG opens fresh contract bid for water projects in Ogoniland

he Federal Government on Wednesday opened a fresh bid to select contractors to provide potable water in oil spill impacted Ogoni communities in Rivers. Marvin Dekil, the project coordinator, Hydrocarbon Pollution Remediation Project (HYPREP) said at the opening of the bid in Port Harcourt that the project was an initiative of the UN Environment Programme (UNEP) report on Ogoniland. The UNEP in 2011 recommended the provision of running water for Ogoni communities whose underground water got polluted by decades of oil spills. Dekil said that HYPREP under the federal ministry of environment would coordinate the water projects in Eleme, Gokana, Khana and Tai areas, covering Ogoniland to ensure early completion. “Today we are opening bids for six lots to six competent companies to provide potable water to various locations in

the four local government areas of Ogoniland.“We are optimistic that we will secure contractors that will immediately be mobilised to sites within the next three to five weeks. “The water project will be done simultaneously with remediation works currently ongoing in 57 sites spread across the areas,” he said. Dekil said no fewer than 40 companies had submitted expression of interest to participate in the bidding for the project. According to him, the minister of environment, Mohammed Abubakar and HYPREP had agreed to spread the project to communities not directly impacted by oil spillage. “In addition, the water that we are going to provide in Ogoni communities will meet the United Nations and World Health Organisation standards. “Ogali, Kpean, Nsisioken, Korokoro, K-Dere and B-Dere in Ogoni are the communities that UNEP identified for the water projects.

Senate seeks cancellation of 30 years age limit for job seekers Solomon Ayado, Abuja

he Senate on Wednesday asked President Muhammadu Buhari to direct the federal ministry of labour and productivity to inaugurate a committee to review the 30 years age limit for job seekers. Specifically, Senate said if the current age limit is cancelled, it will allow competent applicants to be employed by the ministries, departments and agencies (MDAs) of government. The call by Senate followed a resolution on the consideration of a motion brought by Ibrahim Gobir (APC-Sokoto East). Gobir noted that recruitment requirements by the MDAs and other private bodies which set age barriers “inadvertently excludes and marginalises skillful and competent

prospective applicants from participating in such exercises.” “Due to the high unemployment rate in the country, many graduates spend up to 10 years seeking employment and this puts them in a disadvantaged position by no fault of theirs. “Many individuals resort to falsifying their age all in a bid to fall within the required age limit for them to be gainfully employed.” He warned that “this development, where a person believes he is unemployable can lead them to embracing criminal activities and further increase the growing crime rate and insecurity in the country.” Senate president, Ahmad Lawan, in his remarks bemoaned the discrimination against job seekers as a result of the barrier imposed by the prescribed age limit.

DCSL hosts 8th annual audit c’ttee master class David Ibidapo

CSL Corporate Services Limited (DCSL) will host the second stream of audit committee members, internal and external auditors and chief finance officers from various sectors of the economy to its flagship annual audit committee Masterclass on July 16, 2020 with the theme “improving the performance of the audit committee.” The event is in pursuit of DCSL’s commitment to encouraging the adoption of good corporate governance practices by members of the audit committees. The global pandemic and its impact on economies around the world have brought to the fore the need for the committee to be up-to-speed with emerg-

ing trends to improve effectiveness and also ensure business sustenance and continuity. Year on year, the Masterclass has hosted distinguished subject matter experts and this year is no exception as sessions will be facilitated by Romeo Savage, board member, Institute of Internal Auditors (IIA); Franklin Ugwu, Lagos Business School and Bisi Adeyemi, MD/ CEO, DCSL Corporate Services Limited. Discussions at the Masterclass will focus on business continuity in uncertain times, delivering remote audits, tips and challenges as well as crisis resilience and the role of the audit committee. This edition will be delivered virtually using state-of-the-art technology for optimal classroom learning experience. www.businessday.ng

Edward Kallon (r), United Nations’ Nigeria resident coordinator and humanitarian coordinator, receives Kayode Fayemi, chairman, Nigeria Governors’ Forum/governor, Ekiti State, during his courtesy visit during which they discussed laws and policies around the Global Spotlight Initiative to end violence against women and girls in Nigeria, in Abuja, yesterday.

FEC approves 2021-2023 MTEF, projects N12.66trn 2021 budget Tony Ailemen, Abuja

…targets N7.50trn revenue generation

of N7.50 trillion. Agba on projected revenue for 2021, “yes, I spoke of the various assumptions that has been made in terms of parameters and those assumptions are what drives revenues that we get and in terms of how you are able to reflate the economy and spend helps your GDP. “For Nigeria, it was projected that by the end of this year we should have the GDP top at -4.42 percent. However, with the stimulus if properly done and executed, we expect that the GDP will improve to about negative -1.8 percent. “So in terms of the revenue projection, for 2020 it was N5.84 trillion but for 2021 we expect that it will be N7.50 trillion. “Even though the oil production is much lower than our capacity, because we

ederal Executive Council (FEC) on We d n e s d a y a p proved the 20212023 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/ FSP) with N12.66 trillion budget projections for each of the three fiscal years. Briefing State House correspondents at the end of the eight FEC meeting presided over by President Muhammadu Buhari, which lasted well over eight hours, the minister of state for finance, budget and national planning, Clement Agba, listed other projections in the budget as $40 per barrel oil benchmark, oil production volume of 1.6 million barrel per day, inflation rate of 11.9 percent, projected gross domestic growth rate of 3 percent and revenue target

BLS Global holds next African Investment Immigration virtual expo BUNMI BAILEY

emand for investment into property-linked second passport residency programmes has spiked despite the travel restrictions brought on by the global Covid-19 pandemic, says Sam Hussain, managing director of BLS Global. “Following the unexpected Covid-19 onset and consequent global economic slump, it was expected that global growth would slow in 2020, however, no-one expected it to be so sudden and off the back of a global health emergency. It has caught many investors off guard and has caused many of them to seek out opportunities for residency by investment,” Hussain states. To this end, BLS Global will hold virtual expo between July 22 and 23, inavirtualconferenceat10amto5pm. Diversification of both business and personal affairs through multiple residencescandeliverincreasedqualityoflife,mobility,security,educational options, and improved tax and estate planning capabilities. The Citizenship by Investment (CBI) Programme has been a growing industry, giving high net-worth

individuals(HNWIs)andtheirfamilies the opportunity to be able to secure long-term plans, through residency and citizenship overseas through investments. There are several countries that can provide a high quality life for thesecurityoffamiliesandbusinesses. Living in a country with high taxation can be very hard on businesses and one sure way to reduce the tax rate is by moving your business or moving to a country with a lower tax rate. ManyHNWIscanhavetheflexibilityof choosing where to base their business and where to live to help secure the future prospects for their family. Having a second passport can provide access to better healthcare provisions, higher education standards for children, a stable political environment and security in preserving assets. Outbound migration is becoming increasingly popular in South Africa, Nigeria, Ghana, Kenya, Namibia, Algeria, Morocco, Ivory Coast, Egypt, Tunisia, and many other African Countries for HNWIs and their families. This is because they recognise the potential of having a second citizenship or residence for the purpose of flexibility,mobility,andthefreedomto live and work in an increasingly global environment.

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are restricted by the OPEC Plus quota in order to get the prices at par, we have brought in 63 Government Owned Enterprises (GOE). We are bringing them into the budget order to be able to sure up the budget by additional N2.17 trillion into the budget, hence we are saying we are projecting a larger budget size for 2021 over and above the N10.84 trillion for the revised 2020 budget. “When you look at the N7.5 trillion and the expectations to spend N12 trillion, yes definitely there will be gap and that gap has to be financed. “Is the plan for borrowing payment? Yes there is. Even in the 2020 budget we had provisions to repay debt and in the 2021 there is provision to repay debt. There is a sinking fund, we look at the ratio

and ensure that we are able to pay our debts. Of course that is why we have the debt management office to run those numbers and advise us.” The Cabinet members at the virtual FEC used the opportunities to present implementation plans for the recently signed N10.81 trillion 2020 budget. The revised budget signed into law last Friday and the Economic Sustainability Plan (ESP) contain the Federal Government actions response to the disruptive c o ro nav i r u s ( C ov i d - 1 9 ) global pandemic that had seen Nigeria’s projected 2020 revenue fall by as much as 40 percent . The virtual meeting, the eight since the resumed meeting of the FEC, is held at the Council Chambers of the State House, Abuja.

Hope for improved power supply as Lagos, USAID sign deal Joshua Bassey

agos, Nigeria’s largest commercial and economic hub moves a step closer to improved electricity supply as it signed a collaborative pact with theUnitedStatesAgencyforInternational Development (USAID). The agreement positions the state to effectively launch the Lagos Integrated Resource Plan (IRP) under the Power Africa-Nigeria’s Power Sector Programme initiative (PA-NPSP). At a virtual signing of the letter of agreement between the state government and the United States’ agency on Tuesday, the governor, Babajide Sanwo-Olu, said there was no better place to start the journey towards improving access to electricity in sub-Saharan Africa than in Nigeria. He further noted that “the integrated resource plan is a priority initiative for the Lagos State government as it underpins our power reform strategy to ensure that access to reliable and af@Businessdayng

fordable electricity of residents becomes a reality”. The governor expressed gratitude to the Power Africa-Nigeria Power Sector Programme for leading the initiative and extend same to all of the domestic stakeholders for providing support by their collective resolve to ensure that the Lagos Integrated Resource Plan becomes a reality and for their unwavering commitment to making Lagos greater. The state commissioner for energy and mineral resources, Olalere Odusote, described the cooperation as a significant milestone in the implementation plan of the state government toward improving access of residents to affordable electricity. “It is impossible to have a sustainable economic plan without an strategic energy plan.” The objective of the Lagos State government, he said, “is to deliver affordable, reliable, and sustainable electricity to Lagos residents, a key enabler for the vision of making Lagos a 21st century economy.

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Coronavirus sets a new stride for digital transformation ISAAC ESOWE

he recent National Bureau of Statistics’ (NBS) data on the contribution of the Information and Communications Technology’s (ICT) sub sector to the Gross Domestic Product (GDP) shows that digital transformation has the potential to be a driver of continued growth in all the sectors of the economy. During the coronavirus crisis, digital payments have been keeping economies running and helping people reduce contact with the virus. The current health crisis coded COVID-19 has transformed the way and manner businesses operate in Nigeria and the world at large. The pandemic brought many challenges and also came with a lesson. Speaking during the Rand Merchant Bank Nigeria’s (RMBN), Economic and Business Conference Webinar Series, tagged: “Digital Transformation: Building change into our DNA,” Chief Executive Officer, RMBN, and Regional Head of West Africa, Michael Larbie, said the COVID-19 pandemic has unfolded the need to adapt to new world order, as most businesses have gone digital. He also highlights that the webinar series is positioned to stimulate businesses to be responsive in the face of the current economic challenges and be able to create customercentric and digitally-savvy solutions in preparation for the post-COVID 19 era. Digital transformation is not just about disruption or technology. It is about value, people, optimization and the capability to rapidly adapt when such is needed through intelligent use of technologies and information. In his comments, head of consulting, Agusto Consulting,

Jimi Ogbobine, opined that COVID-19 and the social distancing measures have pushed more customers into online and ecommerce solution, more customers have downloaded Apps from varied services which ranged from banking to food or grocery delivery services. This new trend gives firms a greater opportunity to harness consumer analytics better and improve the predictive techniques of the app as more customers use these online solutions and electrotonic channels to settle other business obligations. Payment activities through electronic channels in Nigeria were valued at N10.3 trillion in January 2020, according to the Nigerian Interbank Settlement System (NIBSS), the January figure represents a 29 per cent increase in transaction value compared to N8.41 trillion recorded in January 2019 but a marginal decline of 4.1 per cent from N10.74 trillion e-payment deals facilitated by banks in December 2019. Experts said payment through all the channels – ACH, NIP, E-Billspay, POS, ATM, MMO and WEB to in-

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crease to N163.9 trillion in 2020. Again, amidst the pandemic, the ICT sub sector contributed a higher margin to the GDP when compared to crude oil in the first quarter of 2020. The sector contributed 14.07 per cent while crude oil, the mainstay of the country’s revenue, contributed 9.50 per cent. This, however, is considerably higher than its 13.32 per cent contribution a year earlier in Q1 2019 and 13.12 per cent in the last quarter of 2019. While on the other hand, the oil sector contributed 7.32 per cent in Q4, 2019 Telecommunications and Information Services, as a subsector, had a growth rate of about 9.71 per cent in Q1 2020. However, its growth was less than the 10.26 percentage growth recorded in Q4 2019, and 12.18 per cent recorded in Q1 2019. “If the figures released recently by NBS that ICT contribution to GDP of 13.8 per cent is anything to go by, then it will be more than double the oil and gas contribution of 8.8 per cent (presently) in two years”, according to Isa Ali Ibrahim Pantami, the Minister of Com-

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munications, Federal Republic of Nigeria. Contributing to the Economic and Business Conference Webinar Series, the general manager, enterprise marketing, MTN Nigeria, Onyinye IkennaEmeka, stressed the need for the government and private sector to invest more in telecoms infrastructure for digital businesses to be sustained in the long term. Further, she stressed that a great deal of work and investment has been done to prepare the telecoms sector to support the development of the Nigerian economy, adding that Nigeria has shifted from 2G to 4G and 4G+, and is constantly evolving to ensure customers derived the best value from telecoms infrastructure. She maintained that networks were collectively advancing their capacity and capability, so businesses could move swiftly into the digital age, and urged telcos to transform themselves, as this is critical if they want to continuously meet customers’ expectations. By implication, this im-

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plies finding ways to become a value-added service provider, noting that telcos need to relook at customers’ journeys, define mobile-first strategies, and move to platform services. She said the customer is at the heart of this, and the key to understanding the customer is by keeping a finger on the pulse of their data. The founder and chief executive officer, Flutterwave, Olugbenga Agboola, said the pandemic had forced businesses to transform, noting that technology is a massive enabler of transformation, while the human connection is needed to make technology optimal. He said it was expedient to strike a balance to get desired results and deliver optimal satisfaction to customers. Founder and chief executive officer, Qucoon, Yinka Daramola, maintained that digital needs must become a way of life, as businesses globally are experiencing transformations led by technology. He emphasized the need for business leaders to embrace the positive impacts brought by the on-going digital transformation, its cost savings, and efficiencies, noting that the new normal would be a constant change and businesses would need to choose their partners based on their ability to support agility and security. In her remarks, academic director and a professor at the Lagos Business School, Olayinka David-West, said to transform efficiently, businesses should be innovative around customer needs, agile in responding to them, and should always implement digital strategies to ensure that customer data is protected. “Nigerian businesses will sustain their digital transformation if they lead it from within, focusing on the desired outcomes and aligning with the overall strategy,” she added.

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SMEs: Mastering the art of collaboration

Timi Olubiyi

he novel coronavirus has been devastating in terms of impact on economies, businesses and household. Due to this, businesses and activities today are facing increasing levels of competitive pressure and difficulty in improving or sustaining performance. The new normal has made the management of many companies seek innovative strategies to advance their company’s competitive advantage as well as their profitability. To stem the negative impact of COVID-19 on businesses, among the strategic tools gaining prominence at present is a strategic alliance. Different strategies can be employed by SMEs and large firms to gain entry into new markets or stem the tide of the COVID-19 impact, however, strategic alliance comes with a cost advantage. It is usually a collaborative arrangement and has been adjudged the core elements of today’s business tactics. A strategic alliance can be described as a concerted effort by two or more independent firms to have a collaborative and synergistic relationship in terms of human and material resources for mutually beneficial objectives. Simply explained, in the street of Lagos State Nigeria, a usual scene is that of food hawkers, one that comes to mind is

that of local cooked beans sellers (ewa aganyin) on one hand and bread sellers (Agege bread) on the other hand. They strategically collaborate to hawk side by side, thereby securing more patronage as bread taken with beans is a popular staple meal for teeming Lagosians. Even at that level, evidence suggests that forming alliances enhance business performance. The formation of strategic alliances in these times can be seen as a strategic business response to the COVID-19 pandemic and the increasing uncertainty and complexity in the business environment. In simple words, a strategic alliance is an agreement between two or more organisations or individuals to cooperate in specific business activity so that each benefits from the strengths of the other and eventually gains competitive advantage. Strategic alliances involve organisations of at least two enterprises or specialty units that cooperate to accomplish deliberate critical objectives that are commonly useful. With the COVID-19 pandemic, it is expected that an increasing trend towards business and multi-company alliances will help companies in their business process and corporate culture reviews. As an example, we might see hardware and software companies collaborate, even creative and musical collaborations are very likely, the strategic alliance between the restaurant and bottled water producers, a delivery company with retail outlets, eateries and poultry farm ventures, a telecommunications company and phone manufacturers including software companies. In addition, producers/ manufactures can directly collaborate with supermarket and retail stores. An excellent strategic alliance is generally between two or more parties that provide complementary expertise to each

other. Firms can equally explore the opportunity of an international strategic alliance with a foreign company to improve competitiveness and reduce operational cost. Strategic alliance is crucial and can guarantee an improved competitive advantage. However, it is a bit different from the formal business partnership because the collaboration may not involve stringent business partnership registrations and logo adoption. However, a strategic alliance is just a cooperative agreement between business firms for mutual benefit. It is simply a collaborative effort that allows businesses to pool and/or share resources such as finance, staffing, skills, expertise and information or knowledge; this approach benefits the collaborators’, and it is a powerful strategic option to grow business performance. I foresee within the next two years, significant collaboration and several corporate alliances worldwide to sustain business performance and also mitigate the impact of the COVID-19 pandemic. Companies will form this strategic alliances to obtain one or more of the following, technological advantage, product or service demand optimization, reduce the burden of infrastructure constraints, reduce costs of operation, improve customer satisfaction, improve inventory and increase market share, improve economies of scale, a way to bring a new product/ service to market faster, reduce financial risk and/or spread the risk, and a way to remain competitive. There is a large body of knowledge and academic references to suggest that firms engaging in strategic alliances achieve more significant gains and business performance. In fact, many global companies have multi-

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Strategic alliance is crucial and can guarantee an improved competitive advantage. However, it is a bit different from the formal business partnership because the collaboration may not involve stringent business partnership registrations and logo adoption

Taking the lead in the second half of 2020

common question I have asked all my coaching clients since the year began is: what do you desire in 2020? From all the responses, I can see the desire to live a fulfilled life in most of the respondents. Some people want to get fulfilment from their job and career, some want a happy home and relationship with their partners while others wish the company they work for and the country they live in is better than it was in 2020. No doubt, the year 2020 started with a virus bug, and it has been a difficult year for everyone and in every environment. Your desire to make the best out of the year 2020 is valid and can still be achieved if you don’t give up. realistically, it is better to achieve some percentage of your goals than using the coronavirus as an excuse to give up in the second half of the year. The second half of every game is crucial irrespective of what has happened in the first half. There records of teams that have turned their losing fortunes around in the second half. The Nigeria football team came from 3-1 to defeat the Brazilian team in Atlanta 1996 and went ahead to win the Olympic gold medals. The Damman Miracle was another example when the Nigeria U-20 team came from a 4-0 deficit to defeat the USSR team in the quarter-final in Saudi 89. I have always asked my clients and proteges to start the year with why. Why are you in 2020? What will you do to make you deserve what you have desired for the year? In most cases, life will give us what we deserved and not necessarily our desire. Desire is, however, the basis for the discipline to take action that will make you deserve your desire. Looking for fulfilment is as old as the

journey of life itself. People change career, partner, relationship, location and many more in finding fulfilment in life. Fulfilment is an inner desire supported by the sense of achievement or contentment for something. Fulfilment is key for you to consider this year one of the best years in all aspects of life. At old age, a memory devoid of fulfilment is an indicator of a life not lived to the fullest. Personal fulfilment is key to community, organisational and national fulfilment. A country with high per capita income (PCI) can be said to be more fulfilled in general terms than those whose PCI is among the least in the world. Individual fulfilment is so important that the World Happiness Report is now a source of policy ideas for some countries where the fulfilment of people is seen as a national productive asset. Nigeria ranked 91st out of 156 countries behind Libya, Algeria and Morocco in the 2015-2017 Ranking of Happiness. And now that we have an unseen virus living with us, we have to be determined to be happy, never to give up and work twice as we would have done ordinarily to make the year 2020 counts. The focus is on individuals as nations do not necessarily give up. it is individuals that tend to give up surrendering to the situation or circumstances. Our circumstances are not as powerful as our resolve not to give up in life. The individual must be happy before the family, society and the country can be ranked as happy. Individuals who want to be happy in 2010 and beyond must take the lead. To take the lead as noted in my book is do things that fulfil you aside from things that only give you income. I have used the lead as an acronym for live, energise, activate and develop the

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fulfilment centre in people. The fulfilment centre is simply in activities that fulfil an individual and gives him a sense of satisfaction. The foundation of the activities that will make life meaningful to you is your talent. Talent is not a big mountain no one can climb. It is simply any activity you love to do repeatedly with a sense of satisfaction at the end of it. The situation we found ourselves where a virus has limited our movement is an opportunity for us to reflect and know life is short. There is no other time to do and live a fulfilled life than now. An employee that found his fondness for two out of six of his deliverable activities at work has found gold. All he needs is to do more of such activities voluntarily for the workplace or at any opportunity. If perhaps, the activities that fulfil you are outside your required job functions, the activities are latent talents to you and must you use them to avoid dissatisfaction. The best way to avoid turning your talents into toxic assets is to use them voluntarily. It is therefore in your best interest to volunteer your talents in the workplace whether you are being measured by them nor not. If you do this more in the second half of 2020, you will move to operate in your strength zone at work, enjoy your daily routines and merge your responsibility with your desire to be free and fulfilled. The research work of the Gallup group advanced the need for individual fulfilment and its relevance to organisations and nations. Marcus Buckingham and Donald Clifton identified four traces of talents in the book, Now Discover Your Strength. These indicators are spontaneous reaction, yearning, rapid learning and satisfaction. I explained how to use these four indicators to maximise your efforts this

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ple alliances, and even some global businesses adopt collaborations with numerous partners to improve competitiveness. Therefore, the main reason for strategic alliance adoption is to increase profitability and overall business performance. Application of corporate alliance and collaboration as a strategy helps tackle problems such as lack of capital, marketing issues, weak innovative capability, high operational, poor technology usage, and ineffective logistics management. Significantly, a strategic alliance is mostly done as a complementary business relationship. More so the alliance amongst businesses is usually based on mutual trust, and a large body of research identifies that the main desire of firms to engage in an alliance is to improve firm’s performance. More so it gives the competitiveness to produce a better performance than when not collaborating. The overall advantage of the strategic business alliance is that it gives ample opportunities for relational rents and competitive advantage, where relational rent is defined as ‘a supernormal profit jointly generated in an exchange relationship that cannot be generated by either firm in isolation and can only be created through the joint contributions of the specific alliance partners Note: The rest of this article continues in the online edition of Business Day @ https://businessday.ng Dr. Olubiyi is an Entrepreneurship and Small Business Management expert. He is a prolific investment coach, Chartered Member of the Chartered Institute for Securities & Investment (CISI) and a financial literacy specialist. He can be reached on the twitter handle @drtimiolubiyi and via email: drtimiolubiyi@gmail.com, for any questions, reactions, and comments.

Positive Growth with Babs Babs OlugbemI year in the book, Take the lead with a subtitle, how to live, energise, activate and develop your strength zone. I’m sure the coronavirus cannot stop you despite its many limitations. If the collective fulfilment of individuals makes great organisations and countries, there must be roles for business entities and sovereign nations in increasing people’s happiness and increasing the real wealth of societies. Business organisations have people as their major assets for achieving the stakeholders’ objectives. Organisations are therefore encouraged to develop a culture where people are engaged in activities that play into their strength zones. If employees do what is within their strength zones, unnecessary costs of attrition, recruitment, illness and customer service failure will be avoided. It is obvious you cannot play every employee in their strength zone, otherwise, the majority will not be in sales or some of the difficult areas in an organisation. Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, Positive Growth Africa. He can be reached on babs@babsolugbemi.org or 08025489396.

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Thursday 16 July 2020

BUSINESS DAY

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The politics of palliatives…Insecurity: From Abaribe to northern elders & youths

ik MUO

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or those who have not had COVID, or witnessed the mess it leaves behind, again, I urge you, do whatever you can to avoid this tornado. It will roar through the body – kill some on the way –injure all in its path – and then when you think “well, thank God that’s gone,” look around, the damage is strewn everywhere and will be with you long after the crisis has passed. COVID is a tornado with a very long tail. This is evidence-based advice from the irrepressible Richard Quest. He has been through it and is currently suffering from the aftermath and he says: do all you CAN to avoid it. He who has ears, let him hear (Mt,11:15). Beyond that and before we delve into the main dish for today, the spirit has laid it in my heart to share with you some sundry Coro-related developments. In the first instance, Russia has just completed human trials for a Coro vaccine, which proved to be safe and effective, according to Chief Researcher at the Centre for Clinical Research on Medications, Sechenov University, Russia, Elena Smolyarchuk. Secondly, Donald Trump, the author and finisher of Trumpocracy, has worn a face mask for the first time. All along, he has been acting contrary to what he has been preaching. I hope our own oga at the top here will follow suit. Thirdly, Nigeria has produced its home-made test kit and according to The DG of National Biotechnology Development Agency, Prof. Alex Akpa, the RNASwift Extraction kit will expand our testing capacity and reduce test cost by over 500 percent testing costs about N50,400 but according to a recent punch Report private laboratories charge additional sundry fees that raise it to between N60,000 to N100,000. Finally, there is this disturbing and unfortunate report that many coro patients reject their test results, in Jesus name! According to Ogumbiyi, a psychiatrist and member of LASG Psychosocial Support Group for Coro patients, people whose tests are positive resort to cursing health workers, rejecting

the outcomes in the name of God and probably adding ‘it is not my portion’. There is nothing that our Big God cannot do but He has also empowered us to use our intellectual and material resources to manage our health. I am not an adjudicator in the court of heaven but I believe that people who endanger their lives through this mindset will answer for it when that inevitable time comes. Now, “Palliative” is one of the new terms and practices that emerged from our largely cut and paste approach to the management of Coro. The word is not “new as in new” but it has recently taken a new and life-and-death importance. During the war, we had another term for it: relief! The more organised nations, who knew and know what they want, who know the number of people they have, whose economies are formal and data based, believed that lock-up, luck-in or lockdown are key to the war against Coro. And because they are conscious of their responsibilities to their people and know that failure and to do so has severe consequences, they therefore designed programmes to supply their people with the necessities (and at times even beyond the basics) so as to be locked up so that the coro-spirit would pass over them. They paid handsome cash into their accounts, dropped food (+tea items, fruits and drinks) at their doorsteps, placed cooked food at bus stops and other strategic locations so that those who are hungry could pick and arrange with doctors to provide non-coro medications for the people. In Nigeria, we do not know how many we are; we do not know what we want; those in government are rather tokenistic and do not believe that they owe much duty to the people, they will rather fleece the people at any slighted opportunity to satisfy their gluttonous greed; most of the economy is informal and underground and most of our people were by the fireside before the harmattan season came. Yet, we locked up and to follow their footsteps, we initiated a palliative programme or rather, something that looked like it. Two recent stories show how we managed and mismanaged the palliatives and how it was difficult for those who needed it to benefit. The acting Managing Director of the Niger Delta Development Commission the latest sure-bet casino in town, Kemebradikumo Pondei, has just disclosed how the NDDC spent N1.5 billion on palliatives to the staff who are regularly paid their salaries and allowances. In the palliative bonanza, somebody allegedly received N10m, I51 staff received between N3m-N7m,

650people received N1m-1.5m while the “hoi pol-loi” among them received a “paltry” N600,000 apiece! It is as written in the Book: For whoever has, to him more shall be given, and he will have an abundance (Mt, 13:12a); but whoever does not have, even what he has shall be taken away from him. As this story was trending the women with disabilities lamented their exclusion from palliative distribution and that they had been ignored in designing the interventions. At a newnormal meeting (virtual) with BON and sponsored by Urgent Fund-Africa, one Udoka explained that her share of N1m palliative from Ebonyi State for the disabled was N1500 and that the cost of transportation to collect the palliative was much more than the palliative itself especially as she had to go with a guide. Her case was even “better” because others did not receive a farthing! And so, the second part of that Biblical quotation comes in handy “but whoever does not have, even what he has shall be taken away from him”. (MT, 13:12b). When he spends N4500 to collect N1500, has what she has not been taken from here? (To be continued) Other matters: Insecurity, from Abaribe to northern elders to northern youths On January 29yh this year, Senator Abaribe bemoaned our worrisome insecurity environment and hit the nail on the head by calling on the President to resign because when you want to deal with a matter, you go to the head and because everything rises and falls on leadership. The Senate President cautioned him against hate speech while the presidency described him as “armchair critic, known for making stray comments, who unlocked the door to enable the escape of traitorous and treasonable suspects” who should have been behind bars. (Ik Muo, Abaribe, na you biko1&2. February 2020). A lot has happened on the security front since that punchy Abaribe Declaration. In February 2020, the Coalition of Concerned Northern Youths reviewed the security situation and called on PMB to resign because he had fared worse than Jonathan. They declared that PMB had “woefully failed to secure the lives of Nigerians due to probably lack of will, commitment or competence” and that Nigeria was on the route to Somalianisation. It was around the same time that Bishop Kukah declared, with reference to insecurity and at the burial of the murdered seminarian, Michael Nnadi in Kaduna (11/2/20) that “our years of hypocrisy, duplicity, fabricated integrity, false

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In Nigeria, we do not know how many we are; we do not know what we want; those in government are rather tokenistic and do not believe that they owe much duty to the people, they will rather fleece the people at any slighted opportunity to satisfy their gluttonous greed

Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Dr Muo is of the Department of Business Administration, OOU, Ago-Iwoye

Re-election: Hon. Obe Failed Ejigbo LCDA?

he legislative arm of Ejigbo LCDA, Lagos, in 2019, reportedly passed a vote of absolute confidence on Monsurudeen Oloyede Bello Obe, incumbent Chair of Ejigbo LCDA. The latter earlier served the same council as vice chair. It therefore stands that he is not an amateur leader when it comes to governance at grassroots government. The vote of confidence passed on Obe by the councillors is not surprising, considering certain media accounts about his accomplishments. It was widely reported that he, within 60 days of his swearing in as chair, constructed three roads, built two health centres and was embarking on building three schools. Interestingly, the said feats were recorded in an era, where marking 100 days in office, even with absolutely nothing to show, is projected as democratic accomplishment.

There is no sense, denying that the inhabitants and visitors to Ejigbo LCDA did not see some of the roads credited to Obe. It is equally certain that the pitiable state of some of the rehabilitated roads, before the advent of his administration, was raising questions about the relevance of other local government councils in Lagos and Nigeria at large. It further states that some road-users, trying to connect the popular NNPC and Canoe Roads, would confirm how the rehabilitation of some of the roads by Obe brought great relief to them. It is however certain that credible observers and assessors can easily assess the integrity of Obe and his government. They would simply peg his stewardship at below average mark, merely walking or driving through some of his so-called rehabilitated roads. In short, they will not just appreciate how tax-payer’s monies were

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woefully wasted; they will feel and boldly attest to what motorists and passengers face, on a daily basis, plying the completely deplorable roads that have not lasted up to four years. Interestingly, Obe is already seeking re-election, possibly because he has “questionably” secured part of the support he needed from his councillors. Some catchy posters, announcing his intention are still pinned to some strategic spots across the council. Unsurprisingly, the posters especially highlighted some of the ongoing and completed road projects credited to his government. Luckily, the coast is now clear for Obe and his colleagues to continue in office. The controversies about the actual years of their tenure in office have been laid to rest. There are also strong indications that the Lagos State Independent Electoral Commission, LASIEC would likely

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piety, empty morality, fraud and pharessesm have caught up with us.” About that time, the Chief of Army Staff, General Buratai had declared we had defeated insurgency but faced the challenges of terrorism (12/2/20) and that contrary to peoples demands, the sacking of service chiefs would not end the Boko haram onslaught or general insecurity in the nation. The Secretary to the Government of the Federation also declared that the Service Chiefs would not be sacked. On 12/2/20, the President, in company of defence minister, the National Security Adviser, the governors of Imo and Cross River states among others was booed in Maiduguri when he went on condolence/solidarity visit over BH attacks. Garba Shehu explained some politicians mobilised and monetised some miscreants to boo his principal. In the same February, an all-out war ensued between the National Security Adviser, Babagana Mngono and late Chief of Staff, Abba Kyari over the latter’s meddlesomeness in national security matters. The President also advised Katsina residents not to return fire-forfire on the bandits because it would lead to counter attacks and warned them against self-help (17/2/20). In the same February 2020, the Northern Elders Forum demanded “thorough overhaul of the leadership of our security and public safety agencies and injection of higher levels of competence, integrity and accountability in the manner our security agencies deal with security challenges”. Within the same period, the Boko Haram terrorists attacked the Chibok community again just as they invaded and burnt churches, hospitals and vehicles in Adamawa and burnt down a Military Base in Dapchi. As that was happening, the Inspector General of Police informed us that the police force needed at least 250,000 more assault raffles, 1000 APCs and 774 drones while the US offered N2.5 billion for information on Abubakar Shekau. The BH rascals also organised a successful bloody ambush in which we lost about 50 soldiers. From Boko-Haram, we move on to “Bandits” who stormed a church and kidnapped Pastor Genesis Zaka and other worshippers at Rafi LGA of Niger State (5/3/20) and thereafter stormed some Southern Kaduna communities, killed 51, and rendered the community desolate (6/3/20).

Sunday Odiaka conduct elections into the councils, next year. Meanwhile, it is understandable that Obe has constitutional right to aspire to any political office in the country. But, is it enough seeking and “actually” getting the people’s political approval? Has Obe truly complemented the people’s trust with appreciable and long-lasting dividends of democracy? Honestly, is Obe not very far from delivering dividends of democracy to the people of Ejigbo LCDA, looking at the disgraceful state of some of the roads, he rehabilitated in less than 4 years? Odiaka is a result-driven media content analyst, helping forward-thinking individuals and organisations maximise potentials and increase return on investments. He can be reached through: shorikwueodiaka@gmail.com

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Thursday 16 July 2020

BUSINESS DAY

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Magu, his bosses and Nigeria’s failed fight against corruption

CHRISTOPHER AKOR

have tried to refrain from commenting on the recent arrest and detention of the erstwhile acting Chairman of the Economic and Financial Crimes Commission (EFCC), Ibrahim Magu. He was arrested and later suspended ostensibly to allow for a seamless investigation into allegations levelled against him by the Attorney-General and Minister of Justice principally on discrepancies between recovered assets and those actually lodged in the coffers of the Central Bank of Nigeria, selling of recovered assets to cronies and general abuse of office. Let me be upfront. I think the arrest and suspension of Magu is a non-issue and the result of crude power play between different factions of the ruling cabal and has nothing to do with fighting corruption or accountability in the polity. However, the issue has dominated national discourse with the faction on top currently using the media to spread salacious news about the misconduct of Magu in office, just the way Magu institutionalised media trial of suspects and political opponents. To begin with, Nigeria’s war against corruption is fundamentally defective

in that it does not take a holistic view of the problem of corruption. It only seeks to punish (or more appropriately make scapegoats) and not prevent corruption. We know from history and from studies that the real cause of corruption is the absence of a real and capable state. We also know that an effective war against corruption must look at the sources, nature and trends in the evolution of corruption and map out strategies to tackle it from the root. However, in the fight against corruption in Nigeria, the emphasis is not on the creation or building of a capable state (strong institutions as well as institutions of restraints) but on moral suasion and the creation and duplication of agencies that are still subject to the whims and caprices or in the Nigerian parlance “the body language” of the “big man”, who use the agencies to prosecute his political battles. Most of Nigeria’s institutions were destroyed during military rule, including the police, which gave rise to wanton corruption. However, on return to democratic rule in 1999, instead of embarking on reforms to rebuild state institutions and especially the police, the government, in seeking for quick wins, and maybe also reacting to pressures from the international community, created brand new agencies to perform the functions of the police. Of course, with time, the same problems that rendered the police ineffective have caught up with the anticorruption agencies and have rendered them virtually useless also. Very little efforts were made to reform the public service after 1999. Real reforms of the public service to plug the

loopholes through which corruption takes place have not taken place. The public service is as bastardised at it was in the heydays of military rule and it is still possible or even now much easier for elected and appointed public officials to ignore, circumvent and sidestep all public service rules and procedures to embezzle and steal public resources entrusted to their care without the fear of repercussions. While the country continues to experience massive financial haemorrhage in the public sector, the government keeps flaunting its anti-corruption credentials while celebrating successful convictions of a handful of officials. Of course, corruption is a highly emotive issue in Nigeria and every government must be seen to be fighting it. Since the popularity of a government depends almost exclusively on the public perception of its anti-corruption efforts, successive governments have learnt the art of media trials to shore up their popularity. Hence Nigeria’s whole anti-corruption war have been reduced to this sort of charade - rash and indiscriminate arrests, media trials, outright falsehood bandied as investigations, and supposed confessional statements obtained mostly under duress and splashed generously on the pages of newspapers but with few and largely unsuccessful arraignments, prosecutions and convictions. In most cases, the investigation and prosecution of suspects are so shoddily and shamefully done that it becomes impossible to convict the accused. This has been the modus operandi of the EFCC under Ibrahim Magu.

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It may be easier to create agencies to fight corruption. It may be easier to launch a media campaign against perceived corrupt officials or even make scapegoats of some, but such actions never get the country anywhere. They are just mere tokenisms that fizzle out with time

Time to disturb agriculture’s silent markets

n the middle of the 2016 recession, the Nigeria agricultural industry witnessed the emergence of some truly innovative Startups. Digital Agriculture went mainstream. And companies launched products to facilitate widespread participation in the sector through micro-investments. The impact has been huge. Agricultural extension has improved. Never before have the potential for an agricultural revolution to usurp the tyranny of oil in the economy looked more plausible in the last decades. More importantly, the persistent challenge of smallholder farmers’ inaccessibility to credit were tackled through commercialised crowdfunding platforms from companies such as FarmCrowdy, ThriveAgric, and Farmforte. As the second-half of 2020 unravels, the economic landscape has so far taken a similar shape from four years ago. For the first time in history, oil prices went negative. Forex reserve is declining. The Naira is falling. Inflation rate is peaking. Technically, the country is in a recession, again. The situation has catalysed interest in the Nigeria agriculture sector, but because of the unreliability of the Naira, there is a caveat against capital-intensive local investments. Perhaps it is time to draw attention to the silent but lucrative markets investors and motivated entrepreneurs can exploit in this sector with the possibility for global relevance. These high-growth niche markets are sitting ducks, waiting to be disturbed. And with the right momentum, investors and entrepreneurs can compound their initial outlay and protect against devaluation by leveraging customised local solutions to service a global clientele. Agricultural inoculants Inoculation is the introduction of beneficial microorganisms to the soil or plant seeds before planting. The microbes establish successful symbiosis that enhances soil fertility, high crop yield, and improved resistance to diseases.

Agricultural inoculants contain these microbes (bacteria, fungi, protozoa, virus, algae) and their strains. The global market is growing as fast as interests towards organic low-input agriculture produce goes. But despite the success of the N2Africa project that has proved the viability of the market in Nigeria, commercialisation has remained poor. The International Institute of Tropical Agriculture (IITA) in Nigeria found that Inoculation resulted in an additional 150,000 ton per year of soybeans (alone!) worth $93 million per year to farmers. Consumers are becoming health conscious of their food; government policies are favouring biofertilizers and awareness for regenerative agriculture practices among farmers is increasing. There is a gap to be filled for agricultural inoculants adapted to the local environment. Therefore, the global relevance of a local solution will scale if they meet the ongoing challenge to develop alternatives that may help to solve major environmental and human health problems associated with the use of chemicals in agriculture. This is a lucrative opportunity Agtech start-up here must not miss. Agricultural pheromones Just as the demand for organic agriculture grows, integrated pest management practices are also gaining popularity. Pheromones are chemical signals that have evolved for communication between members of the same species. Particularly, Insect (and recently, Nematode) pheromones are manipulated to control insect pests of agriculture and horticulture as a sustainable alternative to conventional pesticides. Because Each pheromone is designed for a specific target, they are efficient at managing destructive pests immune to conventional pesticides while allowing the beneficial ones to continue to support plant growth. Serious side effects from the conventional use of traditional chemical pesticides is avoided.

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In 2016, on recommendation of The National Horticulture Research Institute, the Nigerian government introduced a containment programme in its 2016 budget to tackle tomato pest infestation. A UK company, Russell IPM, was contracted to help. There is a market here. Traditional agrochemical companies neglect the insect pheromone market due to the limited volume of active ingredients, but the growth of precision farming shows its promise. However, the real opportunity lies in cornering a local market in Africa, and setting up a distribution channel that international player seeking to strengthen their global market position can acquire Blockchain in agriculture The diffusion of Blockchain technology beyond its initial fintech application is moving at lightning pace. Adoption is being driven by the palpability of its potential and long-term value as a trusted way for data management. The applications of blockchain technology ranges from optimised food supply chains, agricultural insurance, smart farming, agricultural product traceability and improved transaction efficiency. In fact, blockchain in the agriculture market has the highest known estimated compound annual growth rate (CAGR) of about 50 percent. Data collection and utility is expensive in Nigeria, and the need for multiple intermediaries makes the agricultural value chain extremely costly. But blockchain shows promise to transform the sector if smallholder farmers can be successfully trained and integrated into an ecosystem where their transactions are honestly recorded. The demand for blockchain in agriculture is being pushed by the need for global supply chain transparency; increasing cases of food fraud estimated to cost about $15 billion per year; and food wastage & theft estimated at an annual cost of $2.5 trillion. Success at providing

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But even with the Nigerian standards, Magu was unqualified to be made Chairman of the EFCC. Twice his name was forwarded to the Senate for confirmation; twice he was rejected based on damning security reports from the Department of State Security, another agency that reports directly to the president. Yet, he was illegally kept in office until he had fulfilled the purpose(s) for which he was kept there and his bosses had no further use for him. It may be easier to create agencies to fight corruption. It may be easier to launch a media campaign against perceived corrupt officials or even make scapegoats of some, but such actions never get the country anywhere. They are just mere tokenisms that fizzle out with time. Examples from other climes such as Uganda show that a country can have the best anti-corruption legislation in the world and still see all its corruption indices worsen. What helps a society to effectively tackle and prevent corruption is the creation of a capable state and that begins with respect for and strengthening of state institutions. Perhaps, as Reuben Abati, in his most reflective moment noted, “our biggest mistake lies in the strange assumption that our problems will disappear simply through intra-elite displacement or the symbolism of grand gestures.” No! Our salvation as a nation lies in the creation of a capable state – a state that works according to laid down rules and procedures and not according to the ‘body language’ of a leader. Then, just maybe, we can stop this “boringly repetitive national life cycle”

Elem Oghenekaro a scalable solution provides unlimited possibilities for global expansion. Food waste management Africa loses about $48 billion to high postharvest losses and spends about $35 billion annually on food importation. Only about 30 percent of food produce arrive at the tables of Nigerian homes from the farm, while Nigerians spend a total of N334.3 billion to import prepared foodstuffs. The need for food waste management systems cannot be overemphasised. The advantage here is two-fold. Designing solutions to reduce food waste from production to processing, storage to distribution; also provides the opportunity to utilise the waste as renewable energy sources. Food waste consisting of organic and biomass waste serve as a great source of biofuel for electricity generation, biofertilizer for soil remediation and plant growth, and animal feed. Government efforts towards promoting environmental sustainability, rising cost of living, lack of resources and rise in raw material costs are pushing the growth of this market. And Venture Capital firms are waiting to spend their money! Plant genomics The market of Plant genomics constantly evolves with technological advancement. As a field aimed at describing, sequencing, and studying the genetic compositions, functions, structures, and interactions of plant genomes, it is in perpetual growth. But plant genomics in Africa is largely led by non-profit research organisations. Note: The rest of this article continues in the online edition of BusinessDay @https://businessday.ng www.twitter.com/elemoghenekaro; gmail.com

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BUSINESS DAY

Thursday 16 July 2020

Editorial Publisher/Editor-in-chief

Frank Aigbogun

CBN money supply policies compound Nigeria’s woes

editor Patrick Atuanya

Discretionary CRR deductions causing more harm than good

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

n the last four years, the Central Bank of Nigeria (CBN) in its bid to defend the naira at all cost, has relied mostly on unconventional policies. These unorthodox policies have birthed even more to fix the shortcomings of prior policies, with the costs outweighing the benefits to the general economy. The CBN incurred over N3 trillion in interest payments between 2018 and 2019 from selling over N22 trillion worth of Open Market Operation (OMO) bills – a short term money market instrument it uses to control money supply in the economy. Towards the end of 2019, OMO bill issues were targeted at foreign investors after banning non-banks, local corporates and individuals from trading. This was in a bid to encourage dollar inflow at mouthwatering rates to lessen pressure on the naira due to growing dollar demand. Now, with the COVID-19 induced plunge in oil prices resulting in low foreign reserves for Nigeria, the CBN now realises that its stock of OMO bills of over $55 billion at high yields of 12.2 percent to 15.3 percent,

of which foreign investors account for about a third of the stock is no longer sustainable. In fact, some foreign investors have their dollars trapped and can’t get out given the CBN’s dollar demand management strategy in a difficult time like this. This has caused foreign investors to shun the auction of OMO bills so far this year. Due to the inability to mop money supply at such a high cost, the CBN has resulted in debiting banks who breached the 27.5 percent Cash Reserve Ratio (CRR) and 65 percent Loan to Deposit Ratio (LDR) directives in order to discourage banks from buying OMO bills off foreign investors trapped in Nigeria. The CRR represents a minimum amount banks are expected to retain with the CBN from customer deposits while the LDR represents a minimum amount that the bank must lend to the private sector from customers’ deposits. The CBN’s discretionary Cash Reserve Ratio (CRR) deductions as a tool to mop up liquidity from the banking sector when its OMO tool has failed, damaging its balance sheet with high but unsustainable interest pledges is not only unac-

ceptable but also unprofessional. This year alone, the CBN has debited Nigerian commercial banks a total of N2.2 trillion for breaching. Debits in this manner will squeeze banks’ profitability and reduce their incentive to lend even in a period when lending to the private sector is needed to boost economic activities following the impact of the COVID-19 pandemic. Prior to these deductions, the Nigerian banking sector has had to deal with a higher CRR and LDR, leaving them with little to trade with. In January 2020, the CBN attributed the reason for raising the CRR to inflationary pressure in the economy. Also, it attributed the increase in LDR to the need to spur lending to the private sector. Raising CRR when trying to boost lending is counterproductive. An increase in CRR reduces the amount of money available to banks to lend which ultimately affects their interest income. Also, the new CRR has done nothing to curb Nigeria’s spiralling inflation which has risen to 12.40 percent as of May 2020. This is because Nigeria’s inflation is explained by increase in the cost

of commodities amid shortage and increased cost of production rather than too much money pursuing few goods. The rise in Nigeria’s inflation is the aftermath of the government’s policy to close the land borders coupled with the disruption of supply chains after COVID-19 slammed the brakes on trade locally and globally. Overall, the CRR experiment of the central bank has yielded no positive results. It is estimated that banks would have made N86 billion in net profit on the N2.2 trillion debited from their accounts by the CBN. This is rather detrimental to banks and may hinder the part banks have to play in providing the required boost the Nigerian economic needs to recover from the negative impact of the COVID-19 pandemic. To a large extent, the success of an economy depends on the competence of its policymakers and regulators – and in these unprecedented tumultuous times – on its fiscal and monetary authorities. When the visions of these principal agents are myopic, then crises of different forms and degrees are imminent. This is the Nigerian case and the reason for its woes over the years.

HEAD, HUMAN RESOURCES Adeola Obisesan

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

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Thursday 16 July 2020

BUSINESS DAY

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Thursday 16 July 2020

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

Market capitalisation

NSE Premium Index

The NSE-Main Board

N12.695 trillion

2,099.77

N12.680 trillion

2,118.36

NSE All Share Index

Week open (03-07–20)

24,336.12

Week close 10 07–20)

24,306.36

Percentage change (WoW)

-0.12

Percentage change (YTD)

-9.45

0.89 0.10

NSE ASeM Index

NSE 30 Index

NSE Banking Index

NSE Insurance Index NSE Consumer Goods Index NSE Oil/Gas Index

1,054.83

742.08

126.61

430.83

196.21

1,815.20

1,118.11

927.31

1,022.11

1,044.50 1,042.02

267.55

741.05

283.19

125.69

413.75

194.89

1,792.75

1,094.31

937.78

5.85

-0.73

-1.03

0.00 0.00

-11.26

-0.24 -11.53

-20.64

-0.10

-3.96 -30.21

NSE Lotus II

-0.67

-1.24

-25.77

-2.29

NSE Ind. Goods Index

-2.13 1.74

NSE Pension Index

1.13 -11.03

Review:

Fixed income, currency market turnover in May lowest since January 2018 Iheanyi Nwachukwu

igeria’s Fixed Income and Currenc y (FIC) markets turnover for the month ended May 29, 2020 was N11.78trillion, indicating a month-on-month (MoM) decrease of 29.46percent (N4.92trillion) from the turnover recorded in April 2020 (N16.70trillion), according to the latest monthly report released by FMDQ Securities Exchange. The FIC market turnover in May represents a year-on-year (YoY) decrease of 42.51percent (N8.71trillion) from the turnover recorded in May 2019 (N20.49trillion). The turnover recorded in the FIC markets in May 2020 represents the lowest turnover recorded since January 2018 (N11.71trillion). However, year-to-date ( YtD) turnover increased to N100.80trillin representing a YoY increase of 0.70percent (700billion) on the YTD turnover of N100.10trillion recorded in May 2019. The Money Market Repurchase Agreements (Repos) & Unsecured Placements transactions and OMO bills jointly accounted for 61.26percent of the total FIC market turnover recorded in May 2020, as Money Market transactions (mainly Repos) replaced Foreign Exchange (FX) as the highest contributor to FIC markets turnover in May 2020, compared to April 2020. FX Market Total FX market turnover in May 2020 was $7.62billion (N2.94trillion), representing a MoM decrease of 32.92percent ($3.74billion) from the turnover recorded in April 2020 ($11.36billion; N4.38trillion), continuing the recent downward trend in FX turnover since April 2020, albeit at a slower rate than the MoM decrease recorded in April 2020 (60.72percent; $17.57billion). Analysis of FX market turnover

indicated a general decrease in FX market activity by trade type, with Member-Client trades accounting for 55.61percent ($2.08billion) of the total MoM decrease in FX turnover, while FX Derivatives accounted for 89.30percent ($3.34billion) of the total MoM decrease in FX turnover by product type in May 2020. However, it is noteworthy to mention that the turnover for Member-CBN FX Spot trades increased by 100percent MoM from $0.16billion in April 2020 to $0.32billion in May 2020. In the OTC FX Futures market, the near month contract (NGUS MAY 27 2020) with a total outstanding notional value of $2.51billion expired and was settled, whilst a new far month (60-month) contract, NGUS MAY 28 2025 was introduced at a contract rate of $/N584.11. The total notional value of open OTC FX Futures contracts as at May 29, 2020 stood at circa $13.94billion, re p re s e n t i n g a 7 . 0 7 p e rc e n t ($1.06billion) decrease on the value of open contracts as at April 30, 2020 (circa $15billion), while the total notional value of OTC FX Futures contracts traded since inception stood at $46.80billion as at May 29, 2020. The average CBN Official Spot $/ Naira exchange rate remained flat at

$/N361 in May 2020 compared to the average rate recorded in April 2020, while the Naira depreciated against the US Dollar at the Investors’ and Exporters’ (I&E) FX Window, losing $/N1.18 (average of $/N384.99 in April 2020) to close at an average of $/ N386.17 in May 2020. In the parallel market, the Naira depreciated against the US Dollar losing $/N22.37 (average of $/N426.35 in April 2020) to close at an average of $/N450 in May 2020. Fixed Income (FI) Market (T.bills, OMO bills and FGN Bonds) In the primary market, average discount rates on the 91-day T.bill increased by 49 basis points (bps) to 2.48percent in May 2020, representing the first time discount rates have increased since October 2019 when the CBN effectively bifurcated the bills (T.bills and OMO bills)segment of the FI market. However, the average discount rates on the 182-day and 364-day T.bills declined further by 2bps and 12bps to 2.79percent and 3.93percent respectively in May 2020, while there were no new OMO bills issuances in May 2020. The coupon rates for newly issued 5-year and 30-year FGN Bonds increased by 20bps and 10bps to 9.20percent and 12.60percent respectively in May 2020, compared to the coupon rates for issuances in April

2020. Conversely, the coupon rate on the 15-year FGN Bond decreased by 30bps to 11.70percent in May 2020 As at May 29, 2020, the total value of T.bills and FGN Bonds outstanding was N2.76trillion and N10.03trillion, representing MoM increases of 4.15percent (N110billion) and 4.05percent (N390billion) respectively, while the total value of OMO bills outstanding was N9.52trillion representing a MoM decrease of 4.23percent (N420billion) from N9.94trillion as at April 30, 2020. In the secondary market, turnover for T.bills increased significantly by 900percent (N270billion) to N300billion, thus trading intensity for T.bills increased to 0.11 in May 2020 from 0.01 in April 2020, representing the first (1st) MoM increase in trading intensity in 2020. Conversely, OMO bills and FGN Bonds turnover decreased MoM by 60.89percent (N4.67trillion) and 17.83percent (N0.28trillion) to N3trillion and N1.29trillion respectively in May 2020, resulting in the decline in their respective trading intensities to 0.30 and 0.13 in May 2020 from 0.75 and 0.16 in April 2020 Trading intensity for bills (T.bills and OMO bills combined) increased YoY to 0.52 in May 2020 from 0.43 in April 2020 whilst that of FGN Bonds declined to 0.13 in May 2020, compared to 0.17 recorded in May 2019. In May 2020, bills within the 6M–12M maturity bucket remained the most traded across all tenors on the sovereign yield curve, accounting for 72.33percent of the total Fixed Income market turnover. FGN Bonds within the 20Y – 30Y maturity bucket remained the most traded debt capital market securities, accounting for 6.97percent of total Fixed Income market turnover. Weighted average yields on short and medium-term maturities increased by 28.69percent and

0.80percent respectively in May 2020, while the weighted average yields on long-term maturities decreased by 1.03percent in May 2020. Additionally, inflation-adjusted yield remained negative across the short to medium-term securities (1M – 5Y), while long term securities (that is 7Y – 30Y), excluding the 7Y and 10Y securities recorded positive inflation-adjusted yields in May 2020. Money Market (Repos/Buy-Backs and Unsecured Placements/Takings) In May 2020, total turnover in the Money Market segment increased MoM by 39.74percent (N1.20trillion) to N4.22trillion, jointly driven by the 34.68percent and 340percent MoM increases in Repos/Buy-Backs and Unsecured Placements/Takings turnover to N4trillion and N220billion respectively. H o w e v e r, M o n e y Ma r k e t turnover in May 2020 represented a YoY decrease of 12.99percent (N630billion) on the turnover recorded in May 2019, due to the YoY decrease of 13.61percent (N630billion) in the Repos/BuyBacks turnover. Average overnight (O/N) rates increased by 11bps to close at an average of 5.85percent in May 2020 from 5.74percent recorded in April 2020. Conversely, average OBB rates decreased by 2bps to close at an average of 5.13percent in May 2020 from 5.15percent recorded in April 2020 Market Surveillance Total number of executed trades reported on the Bloomberg E-Bond Trading System in May 2020 was 3,220, representing a MoM and YoY decrease of 28.03percent (1,254) and 78.45percent (11,725) from the number of executed trades recorded in April 2020 (4,935) and May 2019 (14,945) respectively, as a result of the general decline in market activity due to the impact of the COVID-19 pandemic on economic activity.

the increasing number of COVID-19 cases in Nigeria and weak economic conditions,” said research analysts at Cordros Capital. “We continue to advise investors to trade cautiously and seek trading opportunities in only fundamentally justified stocks”, the analysts said. Nigeria’s stock market decreased by 0.12 percent in the trading week ended Friday July 10 as the local Bourse saw a mix of bargain hunting and profit taking activities.

Stock investors booked about N16billion loss in one week. The stock market’s negative return year-to-date (YtD) stood lower at-9.45 percent at the close of the week’s trading session. The Nigerian Stock Exchange (NSE) All Share Index (ASI) and Market Capitalisation depreciated to close the trading review week at 24,306.36 points and N12.679trillion respectively as against preceding trading week when both indicators closed at 24,336.12 points and N12.695 trillion.

Stocks to remain under pressure in July Iheanyi Nwachukwu

he bears will not easily relinquish their positions on the Nigeria Bourse as risks to sustained rally persist. The continued spread of Covid-19 and its negative impact on major global and domestic indicators remain a source of worry to investors and businesses. As a result, stock buyers are advised to trade cautiously as more market

watchers foresee a more pressured Bourse in the meantime, despite the attractiveness of a number of fundamentally sound stocks hence. Going into July, analysts remain very cautious on the equities market in the short term. Their second-quarter (Q2) results are expected to more precisely reflect the impact of the Pandemic-driven decline in economic activity. “The local market saw a mix of bargain hunting and profit taking last week as the index traded range www.businessday.ng

bound in most of the sessions. With the continued spread of the Coronavirus pandemic across countries and its severe impact on major global and domestic indicators, we envisage a persistently pressured market in the meantime, despite the attractiveness of a number of fundamentally sound stocks hence, a cautious trading strategy is advised”, Vetiva Research analysts said. “In our opinion, risks remain on the horizon due to a combination of

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Thursday 16 July 2020

Innovation

BUSINESS DAY

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

TECHTALK

Broadband Infrastructure

Bank IT Security

Nigeria’s IXPs grow internet traffic from 500MB to 125GB in 8 years from localisation ...saved $40 million annually from localising traffic FRANK ELEANYA

igeria’s internet exchange points (IXPs) grew internet traffic from just 500 megabits per second (Mbps) in 2012 to peak traffic of 125 Gbps in 2020 with the cost savings increasing forty times to $40 million each year from localising traffic, according to a report by Internet Society. This is the result of a tenyear vision that aims at making 80 percent of internet traffic in Africa locally accessible by 2020. Prior to now, emails sent and received in Africa typically leave the sender for a long journey outside the continent, usually to Europe, America or even Asia before returning to the inbox of the intended recipient around the corner. This is also the case for locally-relevant media content, with queries going outside the continent when a user wants to visit a webpage, listen to a podcast, or watch a local video. Content providers serving Africa usually find it easier to host their content outside the continent due to infrastructure, security, and cost reasons. In an article for BusinessDay, Funke Opeke, CEO of MainOne, a major data centre provider in Nigeria, explained that the process of routing traffic outside the continent puts more costs on internet service providers and delays

content delivery to the region by approximately 150 milliseconds which further compromises the user experience. A study commissioned by the Internet Society in Rwanda discovered that a local content developer achieved a savings of only USD 111 per annum on hosting overseas, but this cost Rwandan ISPs about USD 13,500 in transit costs to deliver the content to local users. Stakeholders have since then advocated for hosting more of the traffic in the country. In 2018, localisation and interconnection were said to be responsible for a jump from less than 3MBs to over 50Mbps in less than two weeks on the network of a few telcos. Across the continent, accessing Google platforms has also become faster largely because of its local hosting strategies. Users can now access the most updated traffic

map, search results, and play videos without buffering on Google platforms. The global tech company made this possible by placing hundreds of thousands of ‘cacheservers’ with local ISPs around the world to improve end-user performance. IXPs across the continent, including Nigeria, are integral to achieving this goal. An internet exchange point (IXP) is a physical location through which internet infrastructure companies such as internet service providers (ISPs) and content delivery networks (CDNs) network with each other. These locations exist on the edge of different networks and allow network providers to share transit outside their own network. By having a presence inside of an IXP location, companies are able to shorten their path to the transit coming from other par-

ticipating networks, thereby reducing latency, improving round-trip-time, and potentially reducing costs. According to the report, since 2012, the average cost of international IP transit has decreased substantially from $450 to $27.45 and where there were no carrier-neutral

data centres in 2012, there are now a number of them, including several hosting nodes of Internet Exchange Point of Nigeria (IXPN) in Lagos. The IXPN currently covers seven; four in Lagos and one each in Abuja, Port Harcourt, and Kano. The Lagos nodes connect both to each other and to the nodes in the other three cities. Membership is spread across the nodes, with 38 in the largest Lagos node and from 3 - 18 in the three nodes outside the city. Connectivity is sufficient among the nodes in Lagos, but the cost of intercity capacity means that connectivity to the nodes outside Lagos is weak. While the connections between cities represent a departure from typical practices for an IXP, they are accepted specifically because of the challenges in intercity capacity. Deploying fibre infrastructure across the country is key to increasing the capacity of

IXPs and internet traffic in Nigeria. Only recently, seven states agreed to reduce the right of way (RoW) fee for laying fibre infrastructure. While some states like Anambra and Kaduna decided to waive the fee, Ekiti, Plateau, Katsina, and Imo are charging N145 while Kwara state wants to take N1 per kilometre. Apart from the need for other states to reduce their fees, infrastructure companies also require subsidies from regulators like NCCs to be able to deploy fibre cables in all the 774 local governments as proposed by the National Broadband Plan 2020-2025. IXPN peering networks are growing in Nigeria as more foreign investors see the potential of the market and stake claims. Today, membership in the network in Lagos includes international content providers such as Akamai, Facebook, and Google; as well as international carriers like China Telecom, Glo, and Main One. “Government policy and regulation have a significant impact on the development of a country’s Internet ecosystem. The regulator can determine the nature of entry and competition in telecom markets, including fixed and mobile broadband and backhaul, and the subsequent level and focus of investment in those markets. In addition, government policy directly affects the willingness of content providers to host content in a country. Finally, broader policies affect the affordability of services,” the report noted.

TradeDepot closes $10m funding in chase for major slice of Africa’s retail market FRANK ELEANYA

igerian-based TradeDepot, an eCommerce platform for retailers said it has secured an additional $10 million as it moves to corner a major share of the offline retail market in Africa estimated at $1 trillion. The business to business platform had raised $3 million Series A round led by Partech in 2018. The $10 million preSeries B equity round is also co-led by Partech, International Finance Corporation, Women Entrepreneurs Finance Initiative (We-Fi), and MSA Capital. The funding, according to a statement from the company, would be used

to continue its integration of the fragmented informal retail supply chain in Nigeria, expand into other African cities and launch a suite of financial products and credit facilities, to support its retailers. Founded in 2016, TradeDepot makes household supplies like milk, soap, detergent, and other essentials readily available and affordable while working with its global distributors and manufacturers including Nestle, Unilever, GB Foods, and Danone. Over time, the company has amassed a network of over 40,000 micro retailers in Nigeria. Onyekachi Izukanne, TradeDepot’s co-founder and CEO, said the company’s eyes are on the bigger retail

market in Africa. “Africa’s offline retail market is estimated at $1 trillion, and this new investment allows us to capture an even greater segment of that market,” Izukanne said. “We will continue to use data to drive efficiencies and provide an easier stock acquisition service for our 40,000+ retailers, driving down costs for them by negotiating even better deals with our global manufacturing partners, whilst simultaneously providing a better, faster route to market for our suppliers.” On TradeDepot’s mobile apps on Play Store, WhatsApp, and USSD, retailers can order and pay for goods and have them delivered directly to their stores via the company’s fleet of vans

and tricycles. Retailers can also order stock and manage their inventory online, with a number of ways to pay, including digital payments and cash. TradeDepot also distributes consumer goods brands to the informal sector using a direct-to-retail platform. Suppliers can plan and monitor their sales routes in realtime as well as gain invaluable insights into trade and retail data through the CRM and data management system on TradeDepot. Using data and analytics to inform better retail decision making at each stage of the supply chain, TradeDepot has recorded considerable growth since its launch, activating a new store every three minutes, and receiving a retailer order every 4

seconds, on average. The company has also tripled its volume of trade in the last 12 months. “TradeDepot is a rising star in the African internet landscape, helping digitise a substantial underserved informal retail segment, which is the pillar of economic growth in Africa,” Wale Ayeni, Head of Africa Venture Capital Investment at IFC, said. “The founders’ vision to build a digital platform that improves the unit economics of serving the mass-market is one that we feel privileged to support.” TradeDepot would also be launching a suite of financial technology products and credit facilities. Retailers that do not have collateral that banks demand can leverage

Team: Frank Eleanya, frank.eleanya@businessdayonline.com; Caleb Ojewale, caleb.ojewale@businessdayonline.com www.businessday.ng

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their trading relationship with TradeDepot, to access the funds they need to buy more goods, scale their businesses, and generate more revenue. The company said retailers would be offered mentorship and opportunities to link with domestic and global markets, to further support its predominantly female customer base to grow and expand their businesses. “The founders have a wealth of experience that puts them in a great position to execute on their vision, and their approach and results todate are why we are so excited by the extraordinary entrepreneurs harnessing the power of technology to address issues across the continent,” Tidjane Dème, General Partner at Partech said.

BUSINESS DAY

Thursday 16 July 020

Friday 16 July 2020

BUSINESS DAY

Corporate Social Impact

Onuwa Lucky Joseph Editor, (08023314782)

Black Lives Matter:

Brands Voicing their Alignment with the Cause ONUWA LUCKY JOSEPH

ast week, we dwelt on Black Lives Matter and how organisations are supporting the movement with their time and moneys. This week, we hear from some of the organisations themselves, their feelings with regards to the Matter, and why seating on the fence is not an option. Black Lives Matter actually is a metaphor for discrimination of any sort. When people are picked on based on perceived differences and oppressed and even killed, decent humanity cannot but voice its dissent and insist for a level playing field for on. More needs to be done, clearly, but it’s a good start. Companies awakened to their social responsibility are a good thing for the world and a strong force for good. Square Enix (Japanese video game developer, publisher, and distribution company) “Everyone at Square Enix’s offices and studios across the globe stands with our Black community in the fight against racism, prejudice and hate. We are pledging $250,000 and will match employee donations to support the Black Lives Matter organization and other charities, in the effort to help combat racial injustice and positively affect change in the world”. Ubisoft Entertainment SA (French video game company headquartered in Montreuil with several development studios across the world) “We stand in solidarity with Black team members, players, and the Black community. We are making a $100,000 contribution to the NAACP and Black Lives Matter and encourage those who are able to, to donate. “The killing of George Floyd and the systemic racism faced by the Black Community is deeply disturbing and painful. We believe in liberty and equality, and stand in solidarity with Black team members. “Discrimination, exclusion and prejudice are things we should all work to change.” Etsy (American e-commerce website focused on handmade or vintage items and craft supplies) “We stand in solidarity with communities who are voicing their anguish, anger and deep frustration with systems that oppress and devalue Black lives. “We stand against police brutality in all forms. “We stand against a criminal justice system that disproportionately targets Black Americans. “We stand against the widespread disenfranchisement of Black and Brown communities whose voices are silenced at the polls. “To support organisations working tirelessly for criminal justice reform and those that assist Blackled institutions, we’re donating $500,000 to Equal Justice Initiative and $500,000 to Borealis Philanthropy’s Black-led Movement Fund. We encourage our community to

Breonna Taylor

Ahmaud Arbery

join us in fighting for organizations that are leading the fight for change.” H&M (Hennes & Mauritz AB is a Swedish multinational clothingretail company known for its fastfashion clothing for men, women, teenagers and children) “We believe in equal rights for everyone. We stand with and support the Black community – today and every day. “We understand that this goes far beyond a social media post. We’ve learned the hard way how much work we still must do to live by the values we believe in. We’re committed to using our voice and influence to do our part and stand up against racism and discrimination. “Today, H&M group will donate 500,000 USD to @naacp, @colorofchange and @aclu_nationwide. We support these organisations in their efforts for justice, economic rights and democratic empowerment. Let’s change. Together. Everlane (American clothing retailer that sells primarily online) “Black Lives Matter. And so do our actions. ⠀ “Today we’re donating $75K to @ eji_org and $75K to @aclu_nationwide, the latter of which will continue to receive support through our 100% Human initiative. Our team has also built out a simple document with resources on how we can all take action. “Protesting, posting resources, calling representatives, donating, sharing, and listening—all are important ways to show up for this historic moment. We’re giving our team the space to participate in any way they choose. Every action counts, and come November, we know what will count the most.⠀ “Today we demand change. Tomorrow we vote.” Toms Shoes (Designs and markets shoes — as well as eyewear, coffee, apparel and handbags) “#GeorgeFloyd, #BreonnaTaylor, #AhmaudArbery, #TonyMcDade and countless others. We will not forget them, and we know that we need to be part of the change. Over the next three months, we are donating $100,000 to organizations that are www.businessday.ng

working to combat racial injustice, starting with a donation to Black Lives Matter (@blklivesmatter). We will also continue to listen, learn, and act. Join us.” Spanx (American underwear maker focusing on shaping briefs and leggings) “If you are neutral in situations of injustice, you have chosen the side of the oppressor.” – Desmond Tutu “At Spanx, we always aim to be a source of bright light and positivity in this world. Today, we cannot ignore the injustices and darkness of our outside world. We are overwhelmed with sadness, frustration, heartbreak and anger over recent events. We want you to know that though you see us as a brand, we are made up of real people who care deeply about the justice and equality of everyone. We share your outrage and sorrow over the injustices that led to the

tragic loss of the life of George Floyd, along with Breonna Taylor, Ahmaud Arbery, Tony McDade, and so many more. It’s time to not only stand up for what’s right and speak out against racism, but to take action. We know that it’s in all of our hands to create a better world. Today, we’re using our social platforms to reiterate that we are committed to being a better ally to fight systemic racism. We will actively practice anti-racism through awareness and education, self-introspection and action. We are calling leaders, we are signing petitions, we are spreading ways to take action – but there is so much more that can still be done. “We are donating $100,000 across national organizations focused on combating racial injustice: Black Lives Matter, NAACP Legal Defense and Education Fund and The Minnesota Freedom Fund. In addition, we are committed to donating an additional $100,000 to organizations in our own home of Atlanta. To be an ally is to speak out against injustice and to be ears to listen to the POC experience. To be an ally to us means having a heart for empathy for the oppressed and a hand to make change. “The time for silence is over. It’s time to learn, to grow, to change.” #BlackLivesMatter #JusticeforGeorgeFloyd #AntiRacism LEVIS (American clothing company known worldwide for its Levi’s

brand of denim jeans) “Levi Strauss & Co. is in mourning. We mourn how the Black community has suffered a disproportionate number of deaths related to Covid-19. And we mourn the heartbreakingly perpetual violence against Black Americans simply for being Black. It is time for us to be seen and heard. “The events of the past week have shined a spotlight on the systemic racism and injustices directed at the Black community throughout our nation’s history. In response to the heightened moment of tension playing out in cities across the U.S., LS&Co. is making a $100,000 donation to our longstanding partner, @ aclu_nationwide. In addition, the Levi Strauss Foundation is making a $100,000 grant to @livefreeusa, an organization on the front lines of social-justice issues. The organization is led by Pastor Mike McBride, who is part of our foundation’s Pioneers in Justice initiative, which supports next-generation civil rights activists. The foundation has invested $7.3 million in this initiative over the past 10 years.” GAP INC. “A Time For Action “For 50 years, we’ve committed to standing with our employees, customers, and communities to be a force for good. With our brands, we have made a $250,000 donation to @naacp and @embracerace to fight against racial injustice. Our hope is that together we can make the next 50 years brighter and more inclusive for all.” Warby Parker “To our Black community members, employees, customers, colleagues, and friends: We see you, stand with you, and are pledging $1 million to organizations and initiatives focused on combating systemic racism.” (Substantial materials adapted from CNET)

Plugging the loopholes in the laws ONUWA LUCKY JOSEPH

hose charged with making our lives easier tend to obsessively identify ways to make things harder for us all. And this is unusually highly pronounced in the area of crafting as well as execution of laws and regulations. The Federal Road Safety Commission, for instance, stipulates that using your phone while driving, attracts a fine of N4,000. What it fails to say is whether that applies to folks who are in stand-still traffic and who need to reach folks waiting for them or needing their attention. If an unfortunate driver makes the mistake of making or taking a call while stranded in traffic, FRSC officials who, camouflage style, are keenly wandering around, is in danger of having his/her car forcefully violated by the intruding officials who insist the driver is in contravention and so must pay the 4k fine. Of course, many drivers, in view of their

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ignorance of the actual fine regime even pay higher as long as they are sure they wouldn’t need to go through the stress of being further delayed. There are enough legit lawbreakers to help FRSC meet its revenue target rather than the resort to harassment of folks already stressed out under the weight of bad roads, floods, robberies, etc. If a man on free flowing traffic is making or receiving a call, that clearly is an infraction. But a man @Businessdayng

who cannot park, but is ‘parked’ on the road as a result of traffic that’s not moving cannot now be made to pay that fine. It is doubly punitive and it’s one of those things that make ordinary people lose faith in the country. The latest enforcement bonanza for law enforcement agents is the face mask protection against Covid 19. A couple of folks have died on account of the overzealous attempt at enforcement. Now, why would a healthy Nigerian die for not donning a face mask? Why? The laws don’t speak for themselves. That’s why awareness campaigns must go beyond mere mention of new laws on the news. The Federal Ministry of Information must sufficiently acquaint the citizenry with all they need to know. Nigeria must learn to deal civilly with its citizens. (Kindly send feedback to 08023314782 / csrmomentum@gmail.com)

Thursday 16 July 2020

BUSINESS DAY

INTERVIEW ‘Nigeria needs a national carrier urgently for socio-economic development’ Nigeria is currently losing millions of dollars to foreign airlines as she has no national carrier. IBRAHIM MSHELIA, a pilot, chairman, West Link Airlines and politician, says Nigeria needs a national carrier urgently for its socio-economic development. In this interview with JOHN OSADOLOR, he also speaks on several issues including the aviation industry and Borno State politics. Excerpts:

oes Nigeria need a national carrier owned by government? Nigeria cannot continue to allow foreign airlines serve its major international travelers to and from the country alone for any longer. This Covid-19 pandemic has shown that we acted inappropriately as a nation, in my opinion. No nation can survive local currency slide against foreign currency when the country depends on import. Foreign airlines playing major roles in providing our international travel connections solely is not only counterproductive but disastrous. The foreign airlines have to take their money out and these people don’t spend or accept naira in their countries, they have to process our naira and take out more acceptable and stronger foreign exchanged currencies out of our economy (USD, EURO or Pounds,etc.). A government that wants to do well should not watch quietly for the length of time Nigeria has done; without coming to the sector’s rescue. I will therefore support a national carrier by government now because aviation was deregulated over 30 years ago. The private sector operators were solely allowed to run the sector and they have done very well indeed on the domestic front and must be commended, supported and patted on the back. But then, even after government deregulates, the government still remains responsible to general citizenry and those working, doing business and living in Nigeria, paying their taxes deserve security of their air travel as well as all other interests. Now, if Government owned Nigeria Airways and shut it down due to failures, deregulated the industry as developed nations did, allowed and designated private operators on domestic, regional and intercontinental routes, government also equally has the responsibility to evaluate its own performance. This evaluation includes but not limited to the deregulated sectors as well. I believe also that everyone of us here who has 30 years or more experience in the industry can bear witness to the abilities or otherwise of our aviation private sector operators over the past, at least 25 years as well. They have done very well in sustaining our domestic operations and nobody can disprove this. However, we cannot fairly and rightly say that of the regional and intercontinental routes which are even worse (international as most refer). While the regional, like west coast, have been served fairly well, even though not as well as the domestic (Lagos to Dakar, Accra, etc.), we can still say that the private sector can handle the regional operations better with cooperation from the government in terms of balanced fees and charges as their foreign counterparts enjoy from their own governments. We can engage government and get this ironed out.

Ibrahim Mshelia

As for the international, can we authoritatively say that the private sector has done well on the international/intercontinental routes? The answer needs no efforts to determine. It is NO! Let’s go back history lane for a bit. Nigeria Airways came into being on 23 August 1958 under the name West African Airways Corporation Nigeria Limited (WAAC Nigeria), also then known as Nigeria Airways Limited (NAL). It succeeded the folded West African Airways Corporation (WAAC), at the time. The title “WAAC” was retained due to the prestige this company had previously earned. But once Nigeria Airways started making its own name, it was dropped and NAL remained till 2003. Prior to 2003, I would say about five to 10 years before then, the airline was already, almost crippled due to several reasons. At one time, from over 23 aircraft, they had just one flying the domestic route alone and using sales money to fuel the aircraft. From 1958 to say, 1994, the airline was doing well and a pride for, not only Nigeria but black Africa. As a student pilot then, my dream was to fly Nigeria Airways’ DC 10 back then. By the time I graduated, the airline was in a tough time. That was how good it was. The airline flourished well for at least about 25 years before it started drawing concerns from successive governments and eventually in a democratic dispensation, the airline was liquidated in 2003. NAL was run then like a government transport department with budget from subventions; hence it collapsed when funding from government stopped. I recall it was this same president that was head of state when most government agencies were told to self- sustain. Then it was a very good thing and best idea. The eventual liquidation however, happened in democratic dispensation, meaning the people themselves dissolved the airline. Their elected representatives did it. Not the military dictators as we www.businessday.ng

would have easily blamed. Having said these, if government could fund the airline well then till it could no longer do it and asked it to fund itself and then it collapsed; there were so many lessons to have been learnt by the private sector operators who now took the centre stage. It is a fact that government always takes blame and bashing by the general public for failures of both the private and public sectors. The aviation ministry today can roll out a long list of who and who has been designated on the lucrative defunct Nigeria Airways routes but failed to perform to satisfaction on even already developed routes. Don’t forget private operators inherited developed routes that they did not use or lose money to develop. Anyone doing those routes should start fairly well and post profit quickly. But what has happened, we are all living witnesses to it. So, if today, government decides to appropriate funds to restart a new airline to fly its flags around the world, I cannot blame that government at all. A true lover and patriot should concern his or herself with immediate solution first, whichever way, rather than the same rhetoric and the cliché being taunted that “Government has no business in doing business.” Really! What’s the primary function of government then? It is to provide security for people and businesses, private or public, within its sovereignty. Why are you supporting government ownership of an airline when everyone is looking up to the private sector for solution? My reasons for supporting government now are many but the basics are simple: If government can evaluate itself and drastically take actions such as liquidate an entity like NAL, then government with the same sense of responsibility to citizenry and those who live and do business in our country, similarly bailed out airlines recently to sustain the sec-

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tor, then now decides to take further actions to remedy this over 30 years of abysmal performance by the private sector on the international routes, then why the brouhaha? Have those in the aviation private sector organized ourselves to do what NAL did in its days, even on just two routes alone consistently: that is: Lagos/Abuja to London and Lagos/Abuja to New-York for the over three decades of deregulation? So, what are we now talking about here please? I challenge anyone to come and prove to me that today, government is now wrong for taking this decision. Let’s talk with facts and figures and not selfish sentiments. I, however, caution that the airline government wants to set up should strictly not involve itself with domestic and regional, but partner the domestic private sector operators of its choice to feed it. Those in the aviation private sector have failed to deliver on the international/intercontinental routes as evidenced by every day, seeing major foreign world carriers flying daily flights to various destinations in Nigeria. If we had strong private sector operators, less of the major carriers’ direct presence will be seen, as they would have interlined with our carriers; which is the easiest and modern ways of doing aviation business today. There are now Oneworld, Star Alliances, etc. That was what Nigeria Airways was able to achieve then and remained in IATA clearing house till things became sour after government withdrawal of subventions. So, now let’s first even define government. Who is government? Government is all of us including the private sector operators. So if we cannot even agree and merge and form strong airline or two airlines to compete, due to cultural and selfish reasons, then why should the general public suffer humiliations, hiked prices, uneasy connections, having no choice of our own, etc. Government has responsibility to act and government, I mean, previous government acted well by bailing out and the bailout was abused, we are also all living witnesses. Today, this government has acted and to me acted right. Government actions also do not have to be pleasing to few individuals but the general public. I strongly believe the general public desires and will perform economically better with reliable international/intercontinental routes operated by own national carrier. In the absence of strong viable flag carriers to meet the huge demand, the government action is the most secured and patriotic step in my opinion. I wish to also advise government to give private sector operators first right of refusal in shareholding acquisition in the new airline. National carrier to fly Nigerian flag around the world should no longer be negotiable. It’s so dear to national security if not anything else. Ethiopia is on the lips of every child around the world. Ethiopian @Businessdayng

Airlines’ engineers trained with Nigeria Airways engineers here in Lagos in the late 50’s and today Ethiopian Airlines can do checks (D- check is like renewing the life of the plane or major components for second life and we don’t even have a national airline that still flies, let alone a befitting maintenance repair and overhaul facility of international standard to attract foreign exchange to our treasury. Kudos to the government for this bold step I would say. In addition, we the private sector will learn perhaps in the near future and correct our attitude toward better results. At that time, government can decide to get out again. For me therefore, this action is most welcome but should be done with ultimate view to divest to the private sector again when things would have improved. How do we achieve this? My take therefore is that by all means government should seek support of National Assembly and I appeal to the representatives of the people to appropriate the money needed to setup a befitting national carrier that will do only the intercontinental routes like London, Paris, Frankfurt, New-York, etc. while the airline gets fed by the domestic and regional private sector carriers they choose to interline with. A standard MRO should be considered along as well, to save capital flight through maintenance. We have very brilliant pilots and engineers in this country that can steer this project to compete in no time with the world’s best. We have been exporting our best brains for too long to develop other countries and time has come that we must be patriotic. Imagine that despite all these, government has made pronouncements through the supervising Minister, Hadi Sirika, that the pandemic has affected us so mush and government feels and shows concern. If government has done well there because private sector will benefit directly, and the reason for all the support is because government ought to care about security of investors because they generate and pay taxes, the general public also pay taxes, let government also help their difficulties, suffered over the years! We know how Nigerian passengers are treated on foreign airlines; even the well behaved ones are not spared. Let’s call a spade a spade. You were a candidate in the 2019 governorship election in Borno State. How is the state doing now? Borno State is a state staggering for seemingly elusive stability under a heavy yoke of poverty. The endemic poverty in the land is fueled by age-long governmental neglect and a lingering traditional overconcentration of development in a zone to the detriment of other communities, some of which government presence had taken flight, for as long as over four decades.

Thursday 16 July 2020

BUSINESS DAY

FEATURE Imperative of airport concession in revenue generation OSA VICTOR OBAYAGBONA

partnership (PPP) is the Standard. Airport concessions have become the norm all over the world. In fact, some countries have sold significant equity stakes in their airports in a bid to reduce the financial burden on taxpayers and dramatically improve the overall traveller and retail/concessionaire experience, by allowing professional asset managers to take over and run the assets more efficiently than the government. The world’s favourite airports are either long-term concessions or privatised assets. Airports like Gatwick (UK), Lisbon Airport (Portugal), Santiago Airport (Chile), Kansai, Osaka, and Kobe Airports (all 3 in Japan) have long since been concessioned to airport operators - usually made up of a consortium of professional asset managers with decades worth of experience in financing and operating world-class airports and aviation assets. Nigerians lead in this area too. However, stakeholders in the aviation sector have said if the Federal Government must concession Nigerian airports, it must adopt the right models in a bid to address infrastructure deficit. Privatisation reduces the need for public sector investment, provides access to larger commercial sectors, and allows airports to diversify services without the fear of government control and interference, Nnaji Nnolim, chairman, House of Representatives Committee on Aviation, once said. In theory this may lead to increased operational efficiency as well as create new paid incentives for management and employees, he said. Available statistics indicate that more than 50 percent of European airports have some form of private ownership, with this percentage increasing significantly since 2011. According to Nnolim, most large www.businessday.ng

Australian airports are now owned by consortiums of private firms. He said Gold Coast Airport, Ghana, for instance, is arguably an example of a successful privatisation model, having seen almost $233 million of investment since it was taken over by Queensland Airport Limited in 1998. “Many countries are seeking to replicate this model/success. In May, Japan invited the private sector to submit proposals for the operation and management of seven airports under a 30 to 35 year concession. The country’s transport ministry is attempting to leverage on the private sector to promote tourism in the Hokkaido region. “Elsewhere, Brazil is planning to shut down its National Airports Authority and selling its 54 airports to private companies. It kicked off the ambitious programme last year, raising $889.08 million through an auction of concessions for four airports,” he said. Bayo Ogunlesi, chairman/managing partner of the private equity firm, Global Infrastructure Partners, is perhaps one of the most renowned private sector leaders operating an airport. His firm acquired a majority stake in London Gatwick Airport in a deal worth £1.5 billion. His firm also owns Edinburgh Airport (since 2012). Savvy private sector and finance leaders like Ogunlesi have the ability to attract private sector and multilateral/development finance institution funding, arguably more efficiently than public sector institutions, because they bring fresh, private sector energy and vision to these assets, inspiring confidence in a broader range of capital markets players than an institution like FAAN. Private sector operators will also prioritise effective management, human and physical capacity development and a performance

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culture - three foundational ingredients required to run modern infrastructure and deliver compelling experiences for travellers and indeed concessionaires operating within these facilities. Government can’t deliver the modern experiences stakeholders deserve and are willing to pay for. In terms of passenger, airline and concessionaire experiences - Nigeria’s international airports lag behind many other African airports. We’re all aware of the commotion on twitter when Ghana’s new passenger terminal was unveiled. Nigerians were understandably upset but perhaps also in denial! How do they expect a cashstrapped government to continue funding inefficiently run airports? It is in everyone’s interest - government, airlines, Nigerians, etc, for these airports to be handed over to

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With Nigeria’s God-given natural and human resources, and a solid leapfrogging plan and strategy, we should be aiming for a futuristic airport of $2.5 billion

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t is a common saying that the government has no business doing business. Recent happenings, especially occasioned by the coronavirus (COVID-19) pandemic, have gone to further strengthen this saying. This can further be seen in the various businesses the Nigerian government set up through the years – they all went the same way. Nigeria Airways, National Electric Power Authority, NITEL, Nigerian Shipping Line, etc, all failed because government business is seen as an orphan. The Nigerian National Petroleum Corporation, Nigerian Railway Corporation, National Broadcasting Corporation, and other government establishments still alive, operate below expected level and are not viable in the real sense – as the government yearly fund them through the annual budget, except the NNPC, whose performance is still below level year in year out. They exist just to create jobs and not for profit in the actual sense. Why is this so? Because government establishments are commonly seen as a cake everybody would always want a piece of. As it has been said in different fora, government has no business doing business, instead it should provide the right environment - ease of doing business, infrastructure and electricity, favourable tax regime and policies with quick and independent judicial system, and above all, viable regulation to attract both local and foreign investors. If not for the intervention of the Labour Union, the threat by the Federal Airports Authority of Nigeria (FAAN) to pay staff half salary for May and June because of poor revenue is an avoidable situation. If Nigerian airports were privately managed the operator would have run the business efficiently enough to have reserves and be able to access credit cheaply to avoid such a discouraging situation. So far, the dwindling airports’ operation revenue points to the fact that the time is ripe for Nigeria to totally concession it airports. A concession agreement typically refers to a contract between a company and a government that gives the company the right to operate a specific business within the government’s jurisdiction, subject to certain terms. It is an established fact that there are companies and individuals in Nigeria today capable in handling and managing any type of concessioning the Nigerian government may want to enter into. Even nations more prudent in public management have seen that to create jobs, and for proper management, concessioning airports is the way to go. When it comes to airports - concession or public private

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serious and responsible operators from the private sector. This becomes particularly important in the new global context of COVID-19, the New Normal. We all know the government will struggle to make and maintain the necessary investments in infrastructure, personnel and technology required to make the airport experience safe and enjoyable, so, why not let those who know how to make a business of it and drive accountability take the lead? I mean - how many times have you gone to the restroom in an airport to wash your hands only to find that there is no soap or running water? Let us look at the concessionaires too - the shops in our international airports resemble the shops you would find in anywhere else in Nigeria. These retail outlets deserve the very best in terms of infrastructure, because they are among the very first and last touchpoint travellers - most of whom are business travellers - will experience of Nigeria. They should be promoting the very best of made-in-Nigeria alongside the very best the world has to offer. Modern airport operators from the private sector know the importance of matching retailers to the profile of travellers frequenting these airports in a more effective way than public sector institutions who, even though well-meaning, are constrained by many factors that do not add value to the selection and/or procurement processes involved in approving retailers to operate in our airports. This should not be misconstrued as elitism - not at all. Instead, it is about selecting the best to represent what the airport and country stand for. Showcasing the very best of a nation’s culture - airports all over the world are also touch points used to showcase the very best of the countries culture. Heathrow, Gatwick, or Tambo, etc., all showcase the very best creative and cultural outputs of their home countries, but in Nigeria this is not the case, even though Nigerian Art and Culture sector enjoys a tremendous audience and patronage the world over. We should be showcasing the very best of our own in these locations. The government needs to explore a Public Private Partnership (PPP) and concession the airports carrying along the workforce at FAAN, Simon Tumba, CEO of NigeriaTravelsmart.com, said. “With Nigeria’s God-given natural and human resources, and a solid leapfrogging plan and strategy, we should be aiming for a futuristic airport of $2.5 billion. We have the population, the market and geographic position to make and realise such aspirations. “The aviation unions who are averse to concession of our airports are merely shooting themselves in the foot, and in the long run, may end in regret and bitter cries,” Tumba said.

Thursday 16 July 2020

BUSINESS DAY

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

The NBA has lost its voice as prime defender of integrity and independence of the Bar and judiciary – Olumide Akpata As the 2020 elections of the Nigerian Bar Association (NBA) draw close, candidates vying for different executive offices have continued to share their programmes and developmental strategies for the association. In this interview with BusinessDay Law Editor, THEODORA KIO-LAWSON, NBA Presidential aspirant, OLUMIDE AKPATA, speaks of how the poor treatment of lawyers by employers has made the legal profession in Nigeria a laughing-stock; his dissatisfaction with the administration of justice system in Nigeria; the need to train, retrain and equip lawyers to advise in different aspects of the economy; the NBA-SBL collaboration with the National Assembly under the Nigerian Economic Summit Group, UK DFID, which created the National Assembly Business Environment Roundtable (NASSBER) under his leadership, among other issues. EXCERPTS…

You are a member of the

Olumide Akpata

National Executive Committee (NEC) of the NBA and a past Chair of the Section on Business Law (SBL). As a bar leader and a stakeholder in the business community, how do you think Nigeria’s administration of justice system has affected local businesses and foreign investments into the country? And what can the NBA do to improve or enhance this? The honest answer to your question that I am dissatisfied with the way that the administration of justice system in Nigeria has affected investments in Nigeria. The importance of the justice delivery system in any country cannot be overemphasised. Indeed, in the World Bank Ease of Doing Business Report which is published annually, there is a cardinal place for access to justice for the enforcement of contracts, as one of regulatory areas that are central to how the private sector works, and by extension how the economy of a country performs. The preponderance of opinion is that with the right economic policies, foreign direct investment inflow into developing economies

INSIDE The allegations agianst D’banj bear uncanny similarities to Harvey Weinstien’s

can be a major catalyst for economic development. But before an investor, especially a foreign investor, can take a business decision to invest in an economy, part of what he takes into consideration is the extant regulatory framework in such economy and the administration of

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I am dissatisfied with the way the administration of justice system in Nigeria has affected investments in Nigeria

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et’s begin with current realities such as the advent of a pandemic. Pre COVID-19, only a handful of local commercial law firms appreciated the need for virtual meetings, remote working and law/legal tech generally. However, it’s the new norm today. Do you see practice in Nigeria falling back to the ‘old norm’ in the not-so-distant future? If not, where are we headed in another five-ten years? It is a fact that the global legal market, like all other aspects of life, is increasingly driven by technology and any person or group of persons, including Nigerian lawyers that fail to adopt technology as an essential tool will be left behind while the rest of the society will move on. And this is not good for the legal profession and for the society. You are right that relative to what obtains in the rest of the world, only a few Nigerian law firms had embraced technology generally and law tech in particular pre COVID-19 and if we are being frank COVID-19 caught the legal profession in Nigeria unprepared. As strange as it sounds, a sizable number of lawyers did not have such basic information technology tool as work emails, let alone more sophisticated research and firm management software. Yet, emails are the most common mode of communication in the business world today. Even before COVID-19, I had always said that the biggest clients will continue to go to responsive, reliable lawyers that can attend to their needs in an efficient and effective manner. At a time when physically meetings are not currently fashionable, the imperativeness of technology has never been more profound. So, law tech, characterised by virtual meetings and hearings, remote working etc, is the new norm and I believe that it has come to stay. Any law firm that wants to compete, remain relevant, and survive must continue to evolve. This will entail progressively investing in technology. Additionally, this will help them stay abreast of developments in the global legal market. Hopefully it can only get better in the years to come.

justice system in place in the event of a dispute. It is a view widely shared that the Nigerian justice system is faulty, and despite the high level of intellect that abound in our profession (both at the Bar and on the Bench), the justice delivery system is not delivering optimally and the legal profession

How the 2020 elections of the NBA will be rigged

in Nigeria is punching way below its weight. In truth, no society or its commerce can thrive without an effective judicial system. As I said not too long ago, the consequences of failures of the administration of justice system failure in Nigeria include the fact that the lawyers themselves who are key stakeholders in the system largely consider the process to be tedious and inefficient; the economy continues to suffer on account of the apparent lack of synergy between it and the system, and perhaps most importantly, the citizenry has lost faith and confidence in the justice delivery system. Using the illustrative example of the court system, the justice delivery system in Nigeria has been historically plagued by fundamental ills such as delay and congestion of cases in courts, stories of judges who do not sit and sadly do not inform counsel in advance only for counsel, who sometimes come from outside jurisdiction, to find out after waiting long hours in court; or judges with overloaded dockets without basic facilities and resources and who sometimes keep counsel in court from morning till 4pm before adjourning; over crowded court rooms that are inadequate and unfit for purpose; archaic systems of filing and storage of court processes; undue delays in delivering rulings and judgments, etc. When you add to this list the perennial disrespect for the sanctity of contracts by successive Nigerian governments across all tiers, and the lack of regard to the rule of law and the fundamental rights of citizens, then you can imagine how bad the situation is. All of these contribute to the reason why despite its enormous potentials, much-needed FDI inflows to Nigeria remain comparatively low. What can the NBA do to improve or enhance this? It is important for the NBA to realise that it is the responsibility of the legal profession in every country to service the economy, and that as the largest economy in Africa, the legal profession in Nigeria has a key role to play and a ready market to service. The NBA as an Association needs to study the contribution of legal services to the economy of developed countries e.g. the United Kingdom. As a matter of deliberate policy, the government of the United

Kingdom has created an enabling environment for legal services to be a revenue earner. This is why English law became the law of choice in cross border transactions, and English courts routinely serve as the courts of choice in agreements involving international parties. This contributes a lot to the economy of the United Kingdom in general and significantly improves the fortunes of their lawyers. We need to open our eyes and see the big picture. Regrettably, for too long we have made the choice to restrict ourselves to dispute resolution practice to the exclusion of other practice areas, thereby saturating the space, for the benefit of a privileged few and with disastrous financial consequences for the average lawyer in Nigeria. The tone from the top needs to change. We must as a matter of urgency emphasise the training and retraining of lawyers and to equip them with the tools and capability to advise in different aspects of the economy. Nature abhors a vacuum, and if we continually fail to do so, others will come and fill the gap. With globalisation and the coming into force of the Agreement establishing the African Continental Free Trade Area, this is no longer a remote possibility. The Section on Business Law, which is the specialist arm of the NBA has a member-base of business law practitioners, how has that community of corporate and commercial lawyers engaged with law/ policy makers and regulators to shape policies and enhance business processes in Nigeria? As a Section of the Association, the raison d’etre, as it were, of the NBA Section on Business Law (NBASBL), which I had the privilege to lead from 2016 to 2018, was to raise the level at which business lawyers practice in Nigeria. One of the ways in which we did this was to regularly and proactively engage the regulators and policy makers to contribute in shaping the direction of legislations in Nigeria especially those that had an impact on the economy of the nation. We became the convergence-point of lawyers, regulators, policymakers,

Continues on page 23

Cma’s report on Google’s dominance within the digital economy and applicable legal standards under Nigerian law

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Thursday 16 July 2020

BUSINESS DAY

PERSPECTIVE

LegalBusiness

The allegations agianst D’banj bear uncanny similarities to Harvey Weinstien’s CHUBA AGBU

oncerning rape in Nigeria, save perhaps, for the Fatoyinbo and Busola Dakolo case there has never been a more galvanised effort from activists to seek justice against a high profile individual, as we see in the case of Mr Dapo Oyebanji, popularly known as D’banj. It bears striking similarities with the spectacle and nature of accusations levied against Media Mogul Harvey Weinstein. Both are high-status individuals in their respective countries and D’banj’s alleged attempt at suppressing his victim’s freedom of expression can be compared to Weinstein’s use of private investigators to spy on and influence his victim’s actions against him. However, the difficulty in making a Rape Charge stick in that case and, in a more developed New York justice system, indicates that for Seyitan Babatayo, the chances of a successful outcome are slim. Sentiments from the #metoo movement first trickled into Nigerian Socio-sphere during the advent of the Weinstein issue, and as more rape cases became public, this morphed into the #saynotorape movement. Scrutiny of the Nigerian Justice System was at an all-time high; this was not aided by statistics that indicated that only 65 rape cases since 1979 had lead to convictions, contrasted with a survey that found that 24.8 of females’ ages 18 to 24 years experienced sexual abuse before

age 18. A revolution was brewing, and just as Weinstein is the scapegoat for the #metoo movement, sexual violence activists are gunning to have D’banj fill this scapegoat role. His alleged reaction, which involved kidnapping and evidence tampering, have enhanced the belief by many that he is guilty and there is optimism that this saga will see D’banj end up behind bars.

Despite this, the reality is that proving this matter beyond a reasonable doubt, the burden of proof in court, will be a considerable hurdle. In an extensive review on the Nigerian Anti-rape law, Oluwole Alfred Olatunji identified an area in provisions which make rape prevention difficult. He stated that a victim of rape needs to establish that penetration occurred, corroboration(or validation) of

the crimes to be established, and proof must be provided that consent was not given. It is also important to remember that the Jury acquitted Mr Weinstein of the most severe charges against him: two counts of sexual assault, which required prosecutors to prove that he had committed a serious sexual assault against at least two women. It was also determined that Mr Weinstein was not guilty of first-degree rape and the Jury had to convict on third-degree rape due to insufficient evidence to prove the use of force or threat. In her statement, Seyitan averred that she reported the incident a year and a half after it occurred, and this already narrows the success of proof beyond a reasonable doubt. The case of Popoola v State (2013) 17 NWLR (Pt 1382) P. 100 and a few cases till date have concluded with convictions handed out to the accused. What these convictions show is that there are reoccurring elements that significantly impact on the success of the case to succeed; physical evidence is almost always present, reporting is almost immediate and the victim is usually a minor. An exigent trait that we not only see in the Weinstein case but also the Bill Cosby and R.Kelly cases is the number of Accusers that came forward. Weinstein had 80 women accuse him of sexually related crimes, Bill Cosby had 60 Women come forward and for R.Kelly it was around 10. Many feel that without the number of accusers that came forward the respective cases would likely have

never gained the traction needed to warrant convictions for the accused. Not only did this number help to establish a behavioural pattern, but testimonies were also used to corroborate each other which reinforced the greater case against him. Seyitan is a solitary voice in bringing forth this type of charge against Dbanj. Although she has been able to rally concerned activists and members of public alike to her cause there is no judicial precedent that exists that suggests this translates to a legal advantage. Ultimately without any testimonies of similar misconduct by the accused, it will be easier for an argument of “he said, she said” to work. More important than the letter of the law, will be the frame of mind of the Judge. Cultural norms determine judgments in rape cases far more than legal definitions, found Dan Kahan, a professor in law and psychology at Yale, in a 2009 study. Also working in Seyitan’s favour is that she averred in her statement, that she has the support of Legal Luminary Mr Abimbola Akeredulo. It is not yet known in what capacity she is offering support but it is almost certain that her experience and skill probably give Seyitan her best chance. Finally, just like in the Weinstein case, a plea bargain seems very unlikely because of the high profile nature of the matter. Dbanj’s audacious N 1.5 Billion lawsuit against Seyitan for Defamation is further proof that this is off the table.

BARPERSPECTIVE

How the 2020 elections of the NBA will be rigged CHIDI ANSELM ODINKALU

n his infamous letter issued last month to the 1998 transitional President of the Nigerian Bar Association (NBA), Chief T.J.O. Okpoko, a Senior Advocate of Nigeria (SAN), senior Nigerian lawyer, Chief Adegboyega Awomolo, himself also a SAN, appealed that “it will be a great failure of leadership for the senior advocate to surrender leadership to outer Bar when there are willing and able senior advocates.” In an election in which two of the three aspirants for the top prize of president of the Nigerian Bar Association (NBA) are SANs, this was as close as anyone could come to openly advocating rigging the election à la carte, without calling the crime by its name. Barring last minute course correction by the Electoral Committee of the NBA (ECNBA), Chief Awomolo is likely to get his wish: these 2020 NBA elections, like the two before it in 2016 and 2018, have been set up to be rigged to order.

While Chief Awomolo may have provided the motive or rationale for rigging the NBA election, the mechanics of procuring the rigging are in the hands of the ECNBA. By way of context, it is useful to explain that the NBA elections are digital. In their 2018 book, How to Rig an Election, Nic Cheeseman and Brian Klaas point out that “once upon a time, to do www.businessday.ng

the dirty of changing votes, you had to be present in the actual polling location. That is no longer true.” In an earlier piece of work on “Making Democracy Harder to Hack” published in the Michigan Journal of Law Reform in 2017, Scott Shackleford and his collaborators examined essential vulnerabilities that make rigging

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possible in digital democracy, focusing in particular on three aspects: who can vote (voter rolls); who you vote for (voting platforms) and vote computation. (how many votes each candidate receives). As will be shown shortly, all three vulnerabilities are deliberately built into the NBA’s electoral processes. Essentially, there are four vulnerabilities that have been designed to guarantee rigging of the vote in the 2020 NBA election. These are voter rolls (register), portal integrity (or lack of it), voter verification opacity and prohibitive transaction cost, and lack of independence in the ECNBA. I will explain each of these briefly. Voter Register: Voters in NBA ballot have to meet three conditions. First, they must be enrolled as lawyers in Nigeria. This is easily confirmed from the Roll of lawyers kept with the Supreme Court. Every lawyer on the Roll has an enrolment number, with which their enrolment can be verified. Second, the person must have @Businessdayng

paid his annual practicing fees by 31 March. The collecting bank for this is Access Bank. It should be easy to verify those who paid from the records or tellers of the bank. In reality, the only people who have access to this record are the President of the NBA and those whom he wishes to. Third, the voter must also have paid his or her branch dues by 31 March. The NBA comprises 125 branches. Each branch manages its own processes for collecting dues. These are not standardized. The list of eligible payees is at the say so of the different branch chairmen. Without access to the records of the bank or of the branches, the register of voters lacks integrity and it shows. When the ECNBA issued the provisional register at the end of May 2020, it contained 21,067 names. By the time it issued what it called a final list one month later in June, it had ballooned by 186.65% to 39,321.

To be continued next week

Thursday 16 July 2020

BUSINESS DAY

LEGALINSIGHT

LegalBusiness

CMA’s report on Google’s dominance within the digital economy and applicable legal standards under Nigerian law On 3 July 2019, the UK Competition & Markets Authority (CMA) commenced a market study into the online platforms and digital advertising markets in the UK, as to whether there exist adverse effects on consumers, and the extent to which steps can be taken to remedy or mitigate such effects. The CMA released the final report (the Report) of this study on 1 July 2020, wherein it inter alia, found Google to have market power in the general search engine market, and proposed a range of regulatory options to promote competition and reverse the effects of market failure within these markets. Using the factual conclusions presented in the Report with some minor amendments made to fit the prevailing market condition, this article examines how Google’s conduct as described in the Report may be challenged under Nigeria law.

CHUKWUYERE EBERE IZUOGU

Highlights of the Report he Relevant Market: In carrying out the study, the CMA identified the relevant market by observing direct indicators of market power such as market share, revenue and barriers to entry prevailing in the candidate market. This is unlike a traditional competition inquiry where the relevant market is comprised of a product and geographic component. In assessing Google’s conduct, the CMA identified the general search engine as the relevant market, which was described as web tools which consumers use to find various information online in response to search queries. Search engines generate revenue mostly from search adverts which appear next to consumer search queries. In the UK, Google generated over 90% of the search advertising revenues in 2019. Search engines compete for consumers by seeking to provide high quality and relevant search results. Consumers use search engines in a variety of ways including, web browsers, web navigation, search apps on mobile devices and voice assistants. Based primarily on the number of individual search queries made in each search engine, the CMA determined Google to have approximately 90% of market share in the UK, from January 2018 to December 2019 (the relevant period). Google’s conduct: To maintain its market power in the general search engine market, the CMA found that Google entered into default agreements with several device manufacturers, whereby it paid them, on the condition that Google Search is set as the primary default search engine. The CMA also observed that the condition to set Google Search as the primary default search engine was applicable across the entire range of devices manufactured by a device manufacturer. In terms of territorial scope, most of these default agreements applied worldwide or EEA wide with some cases of country-level exceptions. Adverse effects: Google’s default position as the primary search engine across the majority of devices creates a barrier to entry and expansion for competing search engines by making it difficult for them to access consumers and generate revenue from search related advertisements. In competition law this effect is known as market foreclosure. Google’s position is further reinforced by its ability

Chukwuyere Ebere Izuogu

to pay device manufacturers to secure its position as the primary default search engine. The result is that Google has continued to entrench its dominant position being the default search engine on several devices including Apple and android devices. Google’s conduct can also harm consumers in several ways, firstly because of its market position, Google has no incentive to improve its search quality, thus innovation is retarded in the general search engine market. Secondly, consumers are likely to suffer privacy harms as a result of the use and exploitation of their personal data across multiple Google services and partners, and thirdly, there is the likelihood of an increase in the price of goods and services relying on search advertisements. Applicable legal standards under Nigerian Law Under Nigerian Law, several legal standards may apply when assessing Google’s conduct but this article will focus on only; The Federal Competition and Consumer Protection Commission Act 2018 (the FCCPA): Under this standard, Google’s conduct of entering default agreements with several device manufacturers is likely to constitute an abuse of its dominant position in the general search engine market in Nigeria, in which according StatCounter, Google’s market share was approximately 97.19% across all platforms (comprised of desktop, tablet and mobile devices) during www.businessday.ng

the relevant period. Section 72 (1) of the FCCPA prohibits one or more undertaking from abusing its position of dominance. If the default agreements are designed as and/or has the effect of an exclusive dealing agreement, defined in Section 167 (1) of the FCCPA as a practice whereby an undertaking as a condition for supplying goods and services “induces a customer to meet such condition by offering to supply goods or supply goods or services to the customer on more favourable terms or conditions if the customer agrees to meet that condition”, then Google may be challenged for violating Section 72 (1) of the FCCPA. In other words, Google may have abused its dominant position by inducing device manufacturers through monetary compensation, as a condition for supplying its Google Search engine to them, if they agree to set it as the primary default search engine on their device(s). Where an exclusive dealing agreement has the same effect as a tying agreement, it may be challenged by relying on Section 72(2)(d)(iii) of the FCCPA. This holds true, particularly where Google in supplying its android operating system to device manufacturers require that Google Search be the primary default (or only) search engine. However, it bears emphasis to note that while exclusive dealing is not stated as an example of an abusive conduct in the FCCPA, it may

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nevertheless constitute an abuse of a dominant position if it has the same effect similar to another prohibited abusive practice, and/ or is exclusionary and has an anticompetitive effect that outweighs its technological efficiency and other pro-competitive gains. As indicated in the Report, the effect of this conduct is market foreclosure which in the case of Nigeria is presumed to be very high because, at least 88.88% of competing search engines are unable to directly access consumers without matching Google’s payment to device manufacturers. Innovation may also be retarded in the general search engine market because Google as the dominant search engine provider may have no incentive to improve its search quality. The Nigerian Communications Act (the NCA): Although arguable, Google’s conduct can be challenged under Regulation 13 (e) of the Competition Practices Regulations 2007 made under the NCA. This provision authorises the Nigerian Communications Commission (the Commission) to review an exclusive dealing agreement between a licensee and another third-party, whereby the exclusivity has or may have the effect of substantially lessening competition in related communications markets. In this case, the licensees are mobile device manufacturers (or distributors) who are licensed in the class license category, and have entered into the default agreement with Google. General search engine on mobile devices would be the relevant communications market on the basis of Section 167 of the NCA which defines communications to include the communication between a person and a thing. Thus, the interaction between a person using a mobile device and Google search engine is a form of communications that clearly falls within the Commission’s subject matter jurisdiction. In addition, the Commission has historically regulated content on the internet by imposing various regulatory obligations on licensees with regard to the dissemination and/or transmission of certain types of content online. The market share of Google search on mobile devices including tablets during the relevant period is approximately 96.99%. Evidence of a substantial lessening of competition would be market foreclosure of competing search engine on mobile devices which is at least 85.71% during the relevant period. In addition, consumers experience harm in terms of re@Businessdayng

tarded innovation in the general mobile search engine space. Conclusion The CMA in undertaking the market study should be commended for providing competition perspective on aspects of the digital economy, and stakeholders irrespective of jurisdiction are encouraged to refer to the Report as a formidable source material in this regard. The digital economy which has an estimated value of $11.5 trillion globally with the total amount spent on search advertisement globally in 2019 at about $106.5 billion thus underscoring its importance in our activities online and to the global GDP. However, as I have noted in my article of 14 February 2020 in this column, competition authorities in multiple jurisdictions have raised concerns as to whether the exercise of market power in the digital economy would deter entry for new entrants and ultimately harm consumers, as a result of which many of them are considering (or have considered) the appropriate regulatory intervention required to mitigate this exercise of market power including using ex ante rules to regulate large online platforms. Whether or not this is appropriate for Nigeria would depend on lessons learned from applying the FCCPA and other existing rules and their (in)adequacy in responding to this concern. In addition, if this concern becomes real and is supported by sound evidence, the monopoly provisions of the FCCPA provides some flexibility for an “action to be taken” on the recommendation of the Federal Competition & Consumer Protection Commission to remedy or prevent any adverse effects resulting from an existing monopoly situation occurring within Nigeria, only after the conclusion of a monopoly investigation. Be that as it may, competition regulation and enforcement are still nascent in Nigeria, and bound to have lots of learning curve for regulators and other stakeholders which will undoubtedly shape our competition jurisprudence. Only time will tell when this will become and how far existing rules would go to promote competition and protect consumers in Nigeria’s digital economy.

Chukwuyere, formerly a Tech Policy Fellow at Mozilla Foundation, presently a Research Fellow at the African Academy Network on Internet Policy and Senior Associate at Streamsowers & Köhn.

Thursday 16 July 2020

BUSINESS DAY

INTERVIEW

The NBA has lost its voice as prime defender of integrity... fails to carry out this sacred duty, we would continue to dash the hopes of the millions of our compatriots who look up to us to fight against all forms of injustice, condemn unpopular government policies and check abuse of power. You are right that there is a lot the NBA can learn from the NBA-SBL especially in the area of proactively engaging with the government and the security agencies. Beyond this, the voice of the NBA must be heard in respect of the policies and actions of government, and our position must be unequivocal in defence of the supremacy of the constitution, the sanctity of the rule of law, the independence of the judiciary and the need for respect of judgments and orders of courts at all times, and not just when it is convenient.

Continued from page 20 and government. Issues affecting Nigeria’s economy were regularly deliberated upon at our seminars, conferences, and workshops. As our flagship Annual Business Law Conferences showed, the NBA-SBL became so important that anybody who considered himself a player in Nigeria’s economy must attend an SBL event. In the process we impacted our members and provided them the knowledge and opportunity to hone their skills in various areas of legal practice, thereby raising the bar of commercial law practice in Nigeria. Under your leadership, the NBA-SBL actively collaborated with the National Assembly [NASS], the Nigerian Economic Summit Group (NESG), and the UK Department for International Development [DFID] – a partnership known as NASSBER and another with the Presidential Enabling Business Environment Council (PEBEC). What was the objective at the time and was this achieved? As I said earlier one of the mode of operation of the NBA-SBL was, and remains, to actively collaborate with policy makers and regulators to enhance the business environment in Nigeria. Some of the collaborations which I remain very proud of include working with the Presidential Enabling Business Environment Council, PEBEC, led by Nigeria’s Vice-President and our senior colleague, Prof. Yemi Osinbajo, SAN, and the Enabling Business Environment Secretariat EBES under the leadership of Dr. Jumoke Oduwole. The objective was to improve the ease of doing business in Nigeria and we set out to achieve this by reviewing extant laws and regulations and the monitoring of the productivity and response time of Government Ministries, Departments and Agencies. We also established a partnership with the National Assembly under the then leadership of Bukola Saraki as Senate President, and the Nigerian Economic Summit Group, with support from the UK Department for International Development (UK DFID), to create the National Assembly Business Environment Roundtable (NASSBER) as a platform for the legislature and the private sector to engage, deliberate and take action on a framework for improving the Nigerian business environment. That partnership resulted in a comprehensive review of the institutional, regulatory, legislative and associated instruments affecting businesses in Nigeria. As a result of these collaborations, within a few months of work, doing just a few things, and simply by plucking a few low-hanging fruits, Nigeria climbed up 24 notches on the Global Ease of Doing Business Index. Although I like to say that what we were able to do was little in the grand scheme of things, compared to all that needs to be done, but in truth quite a lot was achieved. More significantly, those efforts were indicative of what can be achieved if we worked together and are galvanized by the ultimate objective. For me, it was the promise that it holds that encourages me. It showed that with square pegs in square holes, and with vision and

focus, you can achieve a lot. Speaking of efficient laws which impact businesses in Nigeria, the NBA-SBL also under your leadership was involved with the amendment of CAMA and there seem to have been some progress over the years towards making it an amended law. For a bill which signifies meaningful progress towards aligning business practices, why do you think it is taking so long for it to be assented and actually passed into law? The Corporate Affairs Commission, CAC was one of the agencies of Government that our activities and collaborations with the Government centred on. The CAC has in the past few years undergone a quiet transformation, under the leadership of the current Registrar-General, who happens to be on the Council of the NBA-SBL and a colleague we hold in the highest esteem. The only thing missing is to provide the legislative backing to the reforms and this is expected in the form of the Companies and Allied Matters Act, CAMA Amendment Act. I honestly didn’t think that by this time, the new CAMA would not have entered into force. As an Association we have to continue to advocate for new laws and the CAMA when it is finally accented to by the President promises to be one the of the most revolutionary legislations in the country’s history, at least as far as the economic development of the country is concerned. The Section on Business Law over the years, has been characterized with many developmental strides. As Chairman of the 2016-2018 Council, what informed some of the fundamental contributions you made to the section’s accomplishments, such as the SBL Club in universities? And when you look back, are you happy you birthed this vision? Indeed, I am very proud of what we achieved, and continue to achieve at the NBA-SBL from the foundational Chairman Mr. George Etomi to the current Chairman Mr Seni Adio, SAN. What we demonstrated to the rest of the Association is that you can set a standard and maintain it. As a Section, we brought pride and respect to the Association. As you mentioned, I was the Chairman from 2016-2018 and together with www.businessday.ng

the Council, we achieved quite a lot. I have said this countless times, and will say it again, one of my biggest achievement was easily the decision to set up SBL Clubs in six universities across the six geopolitical zones in Nigeria. The idea behind setting up the SBL Clubs was to expand the horizon of law students and enable them, at a foundational level, to develop appropriate interest in contemporary areas of law practice. One of my biggest desires for the NBA is for the Association to champion a transformation of the system of legal education in Nigeria in order to actualise a system that produces knowledgeable, competent and ethically conscious lawyers. This should be a matter of serious interest to all lawyers and to the NBA as an Association because today’s student is tomorrow’s lawyer and would constitute the workforce for the future. To build sustainable, complaint and competitive practices, we need a well-educated and skilled workforce in the legal profession. For us we got tired of complaining about the quality of lawyers, and decided to do something about the situation. Just a few days ago, I received a heart-warming message from one of the beneficiaries of the initiative. So I remain happy to have birthed this idea and I am gratified that the current NBA-SBL administration led by Seni Adio, SAN has continued in the tradition. It can only get better. The NBA is constantly accused of being a toothless bulldog. So, speaking of a progressive bar and borrowing a leaf from the NBA-SBL, how can lawyers generally be more involved in influencing government action? While I would refrain from using the phrase, toothless bulldog to describe our noble Association, I do not think that there is anybody who can argue with the fact that NBA has in recent times lost its voice as the prime defender of the integrity and independence of the Bar and the judiciary and of the Nigerian society at large. Things are so bad that even lawyers themselves who are supposed to be the defence of the rule of law and the society are now victims of the harassment and abuse by security forces. For too long the NBA has yielded its position as the conscience of the Nigerian society and the bulwark against tyranny and injustice in Nigeria. As I have said countless times, as long as the Bar

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You are in the race to become the next president of the NBA at the forthcoming elections which holds in a few weeks, do you trust the e-voting system as it is today? And if not, what can be done to increase candidate/voter confidence in the process? In answering this question, let me make it clear that the universal suffrage introduced in place for the 2016 election and the e-voting system have both come to stay and are non-negotiable as far and the future of the Association is concerned. That said, as an optimist I want to say that I trust the e-voting system but in reality, the feelers from the ECNBA regarding their readiness for the 2020 election, which is just about two weeks away, do not inspire much confidence and leave a lot to be desired. Several articles and opinions have already been written in respect of the 2020 NBA elections and the campaign team of at least one of the Presidential candidates has written to express their unease with the way things are going. And I have to agree with them. The voters’ register is demonstrably flawed; there are unresolved issues with the frustrating and completely unnecessary verification exercise that appears designed to disenfranchise; and above all, contrary to all known best practices, the technology to be deployed at the poll is shrouded in secrecy. The loud silence of the ECNBA is bewildering. All I can say at this time is that I was in University at the time of the crisis that tore the Association apart in 1992 and which lasted for six years; and that there are still hangovers from the fallouts of last two elections. Anything short of a fully transparent, free, fair, credible and user-friendly election in 2020 may potentially plunge the Association into another round of crisis from which it may not recover. Re Lawyers Welfare: many senior practitioners and law firm partners - particularly courtroom lawyers do not believe that the remuneration of lawyers can be efficiently regulated and have even accused some NBA presidential candidates who have professed to make a change, as being overzealous and unrealistic. What are your thoughts about this? I can confidently say that my plans for the welfare of the Nigerian lawyer is neither overzealous nor @Businessdayng

unrealistic. I have said it before that the promotion of the welfare of Nigerian Lawyers is the raison d’etre of the NBA and that I strongly believe that while the Bar should remain a watchdog in the society, it must not do so to the neglect of the welfare of the members. I have also made it clear that my idea of welfare for lawyers, both young and old, does not consist of providing fleeting handouts or freebies to lawyers. I would rather have lawyers equipped with modern skills and tools to provide for themselves and for the NBA to provide the enabling environment for lawyers to earn better. I cannot deny that the question of the working conditions of lawyers especially the remuneration of legal practitioners in private practice is undoubtedly one of the more controversial issues for an NBA President to tackle. This is borne out of the realisation that the remuneration of legal practitioners in private practice is purely a contractual issue between the lawyer and his employer and the NBA as presently constituted lacks the powers to determine or police that. Having said all of that, we cannot run away from the reality which is that a good number of lawyers work without any formal employment contract and are left at the mercy and whims of their employers. In some cases, the poor remuneration of lawyers is a function of the inability of the employers seniors to do better. But in many other cases, this practice is completely unjustified. The poor treatment of lawyers by their employers has made the legal profession in Nigeria a laughingstock and no Association worth its salt would fold its hands and do nothing about it. Indeed, there are thousands of senior lawyers who pay their drivers and domestic staff more than they pay legal practitioners in their employ. In this regard what I can promise, at the very least, is to give institutional backing to the ongoing discussions regarding the remuneration of lawyers with a view to devising feasible and enforceable ways to improve the lot of our members. One example that readily comes to mind is the need for an NBA Remuneration Committee to charged with this responsibility. Incidentally, we have a Legal Practitioners Remuneration Committee, established by section 15 of the Legal Practitioners Act. But this Committee is headed by the Attorney General of the Federation and the President of the NBA is only a member of the Committee. It is also instructive to note that this Committee’s business primarily focuses on the fees chargeable by lawyers to clients as opposed to the remuneration of legal practitioners in private practice. This is why I believe that we need an NBA Remuneration Committee that devise feasible ways to improve the poor remuneration of legal practitioners in private practice and also make recommendations to the NBA President for onward representation to the Legal Practitioners Remuneration Committee established under the Legal Practitioners Act. There are also other measures that are not necessarily enforceable or mandatory or punitive in nature, but which can have the effect to encouraging and creating incentives for law firms and senior lawyers to pay their young lawyers. I pledge to explore these measures.

Thursday 16 July 2020

BUSINESS DAY

BUSINESS TRAVEL As first female in AIB, it’s a privilege to work in male-dominated industry - Ajayi Taiwo Ajayi is the first female Accident Investigator in Accident Investigation Bureau (AIB). In this interview, she speaks on her experience as a woman working in an industry dominated by men. She also speaks on the role AIB is actively playing in Nigeria and West Africa.

But you have to mentally strong and focused. After going through that training, you have to learn how to fly a plane which is also rigorous, because if you have phobia for flying, then you would have serious problems. It is after that, you will be sent to a facility for on the job training to put what you have learned into practice. What advantages did your training as an air traffic controller give you as a safety investigator? When I got in here, we didn’t have someone who was a full-fledged air traffic controller that could guide us with the reports. But being an air traffic controller and a safety investigator, whenever the air traffic controller is speaking with the pilot, you will be able to know if what the pilot says is a source of concern because it might be a leading trail to what really happened. You will also be able to tell if the air traffic controller gave the right direction to the pilot, so it is so many things that are intertwined and helps with the job. How do you sometimes feel knowing that you are one of the few women working in a male dominated industry? It’s a privilege to work in this situation because it gives you a high sense of responsibility and you don’t take things for granted. You try to follow information that you are given and have a cordial relationship with people around you which makes the work go on well. Did you study any aviation related course in the university? I studied Biochemistry at the University of Lagos and I did my National Youth Service in Jos, Plateau State. One of the most important aspirations I have is to have 100 percent safe skies in Nigeria and Africa if possible. When you write a report, it is not to indict anybody or apportion blame but it is to forestall future occurrence. I pray for the management www.businessday.ng

Taiwo Ajayi

we have in AIB and with the way things are improving, we know that the sky is the limit for us. From your experience working in AIB, would you say that they have sufficient capacity and manpower in terms of having safety officers that can handle difficult situations? Right now, we have 34 safety investigators on ground and we have some people on standby who have been recruited because there is always a succession plan in management. We believe that once everybody is well trained for the job, we would be able to handle any situation, not like before when we had less manpower. AIB is playing a massive role in the West Africa as we have made our services available to countries outside Nigeria. The number of accident investigators we have can cover the whole of Africa and they are well trained. In West Africa, not all of them have independent accident investigators like Nigeria, so they look up to us and we are available

at any time to render help. We are trying to go multi modal which is a very big opportunity waiting for us to also engage more people.

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Aviation has been a man’s world for a long time but in life, when opportunity meets you, you have to take hold of it and do whatever you can do with it and that is what happened in my own case

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‘

Why did you decide to go into aviation? hen I was growing up, the frequent p l a n e crashes that used to occur made me curious to know why it was so and I wished in my mind that I will have the opportunity in future to know what causes planes to crash. I eventually found work in aviation after school and when the opportunity presented itself to train as an investigator, I took it. When you get in here, you need to get training to be able to know the job. I was scheduled to go for air traffic control training, which I did and I got interested in it because I observed that when some of our senior colleagues write reports, there would be aspects where they would need to be at the scene in order to evaluate the situation of things. The knowledge of air traffic control is something that is invaluable because it gives the safety investigator an edge. It was after I got a job here that I knew that aviation is a highly regulated industry. It’s a lot of hard work and perseverance. What was the training like? For the air traffic control, it was very rigorous because you will have to do a lot of practical and reading because lives are involved. An air traffic controller can handle up to 1000 passengers because you are controlling an aircraft carrying about 250 passengers which a doctor can’t handle on a normal day. If there is a breakdown in separation, that would cause a huge problem. That is why we undergo series rigorous training where even your emotions have to be kept in check because sometimes, some of my colleagues get overwhelmed during the stimulator training and just start crying when they are told that they have caused the crash of 200 passengers.

From your experience and observation, why do you think that you are the first woman safety investigator despite having an accident bureau which has been in operation for many years? How come the agency is just producing the first female investigator now? Why haven’t we had more women in the past? Aviation has been a man’s world for a long time but in life, when opportunity meets you, you have to take hold of it and do whatever you can do with it and that is what happened in my own case. The perception has been that aviation is a man’s world but it is just now that women are breaking barriers and doing excellently well. We now have lots of female pilots, engineers, air traffic controllers and many more. I have been in AIB for seven years and I can tell you that women are taking their place in the industry. Have you been a part of any investigation and if you have done, how challenging have they been as no two accidents are the same. I have participated in a couple of accidents and incidents. When I got in, we had senior colleagues who wanted us to get used to the job. I remember that there was an accident in Lagos and I was drafted to the site and it was a horrible scene. I couldn’t get over it for a week because there was total destruction. We did a lot of work during the investigation of that accident. We took pictures, collected lots of evidence and after that, we did other investigations with my colleagues and we drafted our reports from there. Sometimes, you go for investigation and you copy the evidence and at the end of the day, they get overwritten. Such an experience can be very frustrating. It means you have to go to other units to know what went wrong. When you say that reports are overwritten, what do you mean? When you overwrite a report, it means that the

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event was overwritten by something. You may have a piece of evidence but then you discover that the pilot had an issue before landing, maybe they were supposed to switch on or switch off something in the cockpit and they didn’t do it. That may make us lose what we are looking for because we won’t be able to get that information and we won’t know what transpired. It’s like when you are driving your car and you stop, you may have to switch off your air conditioner or radio before switching off the engine. In aviation, there are procedures for everything and those procedures must be meticulously followed. There is a procedure for landing, there is a procedure for shutting down the aircraft and every other process must be done properly. If they are overwritten, how do you now get accurate information for your investigation? It is not only from the Flight Data Recorder (FDR) or Cockpit Voice Recorder (CVR) that we get our evidence; there are other places where you get information. You get information from the air traffic controllers, from the aircraft log book and we also ask the crew questions. In our team, we have very experienced people who know what the procedures are and know when they guidelines have been a diversion from the rules. Were you the only female your class at the aviation school? No. It was a combination of people from different agencies. We did the ATC before I went for investigation. I went to the aviation school at Zaria for basic training in investigation and I got the opportunity to train in air traffic control and safety. It was a very gruelling experience but I passed all my exams because it is not everyone that trains that scales through as it is very difficult.

Thursday 16 July 2020

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Wednesday 15 July 2020

Top Gainers/Losers as at Wednesday 15 July 2020 LOSERS

GAINERS Company

Opening

Closing

Change

AIRTELAFRI

N328.7

N340

11.3

DANGSUGAR

N11.6

N12.2

0.6

GUARANTY

N21.3

N21.5

0.2

Company

Opening

Closing

Change

N34.05

N30.7

-3.35

JBERGER

N17.2

N15.5

-1.7

STANBIC

N30.25

N29

-1.25

N4.5

N4.35

-0.15

N1.95

N1.83

-0.12

CUTIX

N1.69

N1.82

0.13

ACCESS

N6.1

N6.15

0.05

CAVERTON

ASI (Points) DEALS (Numbers) VOLUME (Numbers) VALUE (N billion) MARKET CAP (N Trn)

24,130.26 3,648.00 208,209,536.00 1.761

Global market indicators FTSE 100 Index 6,292.65GBP +112.90+1.83%

Nikkei 225 22,945.50JPY +358.49+1.59%

S&P 500 Index 3,207.18USD +9.66+0.30%

Deutsche Boerse AG German Stock Index DAX 12,930.98EUR +233.62+1.84%

Generic 1st ‘DM’ Future 26,639.00USD +148.00+0.56%

Shanghai Stock Exchange Composite Index 3,361.30CNY -53.32-1.56%

12.587

Market records mild gain as investors eTranzact targets to raise N7bn from ongoing Rights Issue buy Airtel, Dangote Sugar, others ...On the basis of 10 new shares for every 9 held shareholders

Iheanyi Nwachukwu

igeria’s equities market on Wednesday July 15 stopped record loss trend as investors raised bets in shares of Airtel Africa Plc, Dangote Sugar Refinery Plc and GTBank Plc. The choppy gains of N8billion on Wednesday happened as investors in 3,648 deals exchanged 208,209,536 units valued at N1.761billion. The Nigerian Stock Exchange (NSE) All Share Index (ASI) increased slightly by 0.07 percent to 24,132.30 points as against preceding trading day low of 24,114.59 points. The market’s negative return year-to-date (YtD) printed slightly lower at -10.10 percent. The value of listed stocks increased to N12.587trillion from preceding day low of N12.579trillion, up by

N8billion. Banking stocks like Sterling Bank, UBA, Zenith Bank, FBN Holdings, FCMB Group were actively traded stocks on the Bourse. Airtel Africa Plc recorded

United Capital Daily Insights:

Nigeria’s economy in H2-2020: Can stimulus packages prevent a recession?

n response to the COVID-19 pandemic, the FG and CBN have announced some stimulus packages aimed at easing the overall negative impact of the pandemic on businesses. However, the quantum of the stimulus compared to the size of the Nigerian economy may mean there would only be a marginal impact. To give perspective, the total amount of monetary support announced by both the FG and CBN is estimated at circa N5.3trillion ($14.6billion), equivalent to 3.7percent of GDP. However, we expect access to intervention funds to be limited to the formal sectors and big corporates. Thus, leaving the country’s large informal sector (above 60percent of the economy) exposed to the vagaries of the COVID-19 pan-

demic. Also, given that the current crisis is supply-side heavy (restriction of movement and business shutdown), it is clear that the demand-side responses by both the fiscal and monetary authorities (liquidity injections) would not be enough to prevent an economic contraction in the short term. However, the palliatives and reforms that are being announced may reduce the probability of sliding into a deep recession or quicken recovery once the incidence rate of the pandemic begins to drop and the economy is fully re-opened. Overall, the Nigerian economy may enter a technical recession by Q3-2020 (after two consecutive quarters of contraction in Q2 and Q3-2020), with a chance of early recovery by Q4-2020 or Q1-2021. www.businessday.ng

the highest increase after its share price moved from N328.7 to N340, adding N11.3 or 3.44 percent. It was followed by Dangote Sugar Refinery Plc

which moved up from N11.6 to N12.2, adding 60kobo or 5.17 percent and GTBank Plc which advanced from N21.3 to N21.5, up by 20kobo or 0.94 percent.

Tranzact is targeting to raise N6.99billion from its existing shareholders in its ongoing Rights Issue which opened on Tuesday July 14. The company is offering its existing shareholders 4,666,666,667 ordinary shares of N0.50 each, at N1.50 per share. The Rights Issue is on the basis of ten (10) new ordinary shares for every nine (9) ordinary shares held as at March 25, 2020. The acceptance list for the Rights which opened on Tuesday July 14, 2020 closes on Monday August 10, 2020. eTranzact is Nigeria’s premier payment processing platform. The company’s home grown Switch with its processing power activates its

partners to drive billions of dollars in transactions yearly through its card, and direct from bank account gateways. Shareholders of the company had last year given approval for the board of directors to raise additional capital to boost its operations. The decision to raise additional capital became imperative considering the need of the company to expand its operations, deepen its market share and to remain competitive in the financial technology industry. The capital to be raised will be used to upgrade and enhance the company’s technology infrastructure and network security systems and also to improve on its service delivery. The company will also invest in its agent network expansion programme, human resources and employee development.

Monitoring Group out with its recommendations to strengthen international audit, ethics standard-setting system

he Monitoring Group (MG) has published its recommendations to strengthening the international audit and ethics standard-setting system. The Monitoring Group is a group of international financial institutions and regulatory bodies committed to advancing the public interest in areas related to international auditrelated standard-setting and audit quality. The MG is responsible for the overall governance of the international audit and ethics standard-setting process and the review of its effectiveness. The set of recommendations fulfills the overall objective that the MG set out when the effectiveness review began in 2015 - to strengthen international audit and ethics standard-setting to enhance

its responsiveness to the public interest and improve audit quality. Specifically, the recommendations are designed to achieve the following objectives: achieve an independent and inclusive, multistakeholder standard-setting system; reinforce the consideration of the public interest within the standard-setting process and throughout the full cycle of standards’ development, with enhanced independent oversight and standard-setting guided by the Public Interest Framework; and foster the development of timely, high quality standards that respond to an accelerating pace of change. The Monitoring Group developed these recommendations through extensive outreach including the follow-

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ing: Issuance of a public consultation in 2017; discussions with international audit and ethics standard-setting, oversight, and auditing professional stakeholders; discussions held around the world with investors, regulators and other stakeholders; and discussions within and among the Monitoring Group member organisations. The future structure, governance, process of standardsetting and funding goals of the international audit and ethics standard-setting system as outlined in the recommendations represent significant enhancements to the current structure. These key enhancements to the current structure will strengthen the standard-setting process, which should result in standards that are more responsive to the public interest and in turn lead to improved audit quality. @Businessdayng

As a result, the MG believes that it is in the public interest to publish these recommendations so that stakeholders can begin implementation as quickly as possible. The MG envisages that a transition plan will be established within the next nine months and that these recommendations will be implemented within three years thereafter. Under the recommendations, the PIOB will continue to have the critical role of providing independent oversight of the public interest responsiveness of audit and ethics standard-setting. The MG looks forward to working with the PIOB and the standard-setting boards to achieve enhancements in the standard-setting system in the public interest and improvements in audit quality.

Thursday 16 July 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

Apple wins landmark court battle with EU over €€ 14.3bn of tax payments

Judges annul ruling by European Commission in blow to competition commissioner Margrethe Vestager JAVIER ESPINOZA, ARTHUR BEESLEY AND TIM BRADSHAW

U judges have quashed a European Commission order for Apple to pay back €14.3bn in taxes to Ireland in a landmark ruling that deals a big blow to competition commissioner Margrethe Vestager’s efforts to crack down on low-tax regimes in the bloc. The ruling hands a big legal victory to Apple and reduces the prospect of opening up other low-tax arrangements for multinationals around the EU to state aid scrutiny by Brussels. The EU’s second-highest court on Wednesday said Brussels did not succeed in “showing to the requisite legal standard” that the tech giant had received an illegal economic advantage in Ireland over its taxes. Apple paid €13.1bn in back taxes and €1.2bn in interest after Ms Vestager’s 2016 ruling that Ireland had given Apple a “sweetheart” deal for more than 10 years. The EU court said: “The general court considers that the commission did not prove, in its alternative line of reasoning, that the contested tax rulings were the result of discretion exercised by the Irish tax authorities.” The general court said it supported the EU’s right to scrutinise national tax arrangements. However, it is the second time that Brussels has failed to demonstrate that a multinational company benefited from state aid, after another

The EU’s second-highest court said the commission did not succeed in ‘showing to the requisite legal standard’ that Apple had received an illegal economic advantage in Ireland over its taxes © Dado Ruvic/Reuters

multimillion-euro case against Starbucks was overturned last year. As with the Starbucks case, legal experts warned that the EU would struggle to win an appeal on the points of law, since the commission largely lost the case on not being able to meet the burden of proof. Ms Vestager said in a statement that the commission would “carefully study the judgment and reflect on possible next steps”. “The commission will continue to look at aggressive tax planning measures under EU state aid rules to assess whether they result in illegal state aid,” she added. Apple said in a statement: “This case was not about how much tax

we pay, but where we are required to pay it. “Changes in how a multinational company’s income tax payments are split between different countries require a global solution, and Apple encourages this work to continue.” As one of the most profitable and valuable companies, Apple said it was the “largest taxpayer in the world”, paying out tens of billions of dollars in taxes over the past decade, and said it supported more than 1.8m jobs across the EU, including suppliers and app developers. However, it has been forced repeatedly to defend its tax practices,

with Apple chief executive Tim Cook grilled in a US congressional hearing on the matter in 2013. Ms Vestager’s original ruling followed an in-depth investigation that concluded that Ireland had given Apple a “sweetheart” deal for more than 10 years, which Dublin and the company always denied. The commission alleged that Ireland gave Apple a preferential tax arrangement — not available to any other company — that allowed the group to pay effectively less than 1 per cent in corporate taxes. Apple has consistently rejected the allegations and the arrangements at the centre of the case are no longer in place.

The EU now has two months and 10 days to appeal against the decision. The commission is likely to file an appeal and the case will be heard by the European Court of Justice, the EU’s highest court, which will issue a final ruling. State aid experts said the ruling would have immediate consequences for the EU. Dimitrios Kyriazis, head of the law faculty at New College of the Humanities, said it would be like a “torpedo” to Ms Vestager’s efforts to crack down on aggressive tax planning by multinationals and harmful tax competition by EU member states. Dublin was quick to welcome the ruling, saying “Ireland has always been clear that there was no special treatment provided” to Apple. The case is highly sensitive for Ireland, a global hub for hundreds of multinationals attracted by its low 12.5 per cent corporate tax rate and EU market access. With the country in sharp recession due to coronavirus, a negative ruling from the EU’s general court in Luxembourg would have been a big setback to a newly installed government that is struggling to overcome the health and economic challenges posed by Covid-19. In addition to handing down a record-breaking tax recovery order from the iPhone maker, Brussels had accused Ireland of inconsistent tax treatment of global companies and charged the country with not applying uniform rules in the taxation of non-resident groups.

Opec and Russia primed to unwind historic supply cuts Cartel and allies aim to restore crude output without knocking market sentiment ANJLI RAVAL, DAVID SHEPPARD AND DEREK BROWER

pec and Russia are primed to start unwinding the record oil supply cuts agreed earlier this year, as they aim to raise production without undermining a recovery in crude prices. The oil cartel and its allies are set to scale back the cuts of 9.7m barrels a day that took effect in May to 7.7m b/d from August, Opec delegates said on Wednesday. It would be the first test of their ability to start returning to the market the equivalent of almost 10 per cent of global crude output, which was removed this spring after Covid-19 lockdowns and travel bans crushed oil demand. It confirms the expectation since the latest Opec meeting that oil producers would reduce cuts to 7.7m b/d from August until the end of the year, before tapering further to 5.8m b/d between January 2021

and April 2022. The move is being closely watched by oil traders, after the cuts helped crude recover from below $20 a barrel in April to about $40 a barrel on Wednesday. Prices have also been supported by the gradual reopening of the global economy, www.businessday.ng

which has pushed demand higher and the oil market into a deficit. But adding back production is a delicate act, at a time when new coronavirus cases in the US and elsewhere are soaring. Donald Trump, US president, has championed April’s historic

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supply deal as a way to protect America’s shale oil industry, which has been hit hard by the dramatic drop in prices. Brent crude, the international benchmark, traded near $70 a barrel at the start of this year. Prince Abdulaziz bin Salman, Saudi Arabia’s oil minister, appeared conscious of this risk as he opened the virtual Opec meeting on Wednesday. “The extra supply resulting from the scheduled easing of [the] production cut will be consumed as demand continues on its recovery path,” he said. In his remarks, the minister added that the increase in production might be smaller than expected as countries that did not meet their supply cuts targets in the first three months of the deal hold back some production as a form of compensation. He said this could mean the cuts would only shrink to about 8m b/d, if countries such as Iraq and Nigeria did not release as many barrels on to the market. @Businessdayng

Prince Abdulaziz also indicated that, while Saudi Arabia’s production would increase in August, it would only be to supply the domestic market, where power demand for air conditioning jumps in the summer months. The kingdom’s exports are expected to remain steady in August. Saudi Arabia, which this year launched a price war to punish rival producers by flooding the market with its crude, has since sought to emphasise that the move was an “unwelcome departure” from its oil policy. Alexander Novak, Russia’s energy minister, said on Wednesday that oil nations were moving into the “second phase” of the supply agreement. “The market is very close to balance,” he added. Officials have been meeting more frequently to track the oil market during the Covid-19 crisis, with key decisions taking place outside of the traditional twice-yearly gatherings in Vienna.

Thursday 16 July 2020

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Global stocks gain on Covid-19 vaccine optimism

Wall Street opens higher on back of strong session in Europe SARAH PROVAN, JOSHUA OLIVER AND HUDSON LOCKETT

lobal stocks advanced as encouraging reports from vaccine trials plus hopes of further stimulus for pandemic-hit economies tipped the balance for investors. US stocks extended gains for a second day as the S&P 500 index rose 1.1 per cent at the opening bell on Wall Street. In Europe, equities accelerated an early advance, with the continent-wide Stoxx 600 adding 1.6 per cent to be on track for a third increase in four days. The UK benchmark FTSE 100 climbed 1.8 per cent. Reports on progress towards an Oxford Covid-19 vaccine added to the upbeat sentiment that was fuelled by news from Moderna. Shares in the US biotech group surged 8 per cent in early trading. The company said on Tuesday its experimental vaccine had produced an immune response in a small, early-stage trial. Jim Reid, analyst at Deutsche Bank, said the Moderna announcement had raised “hopes that the vaccine may be within sight”, despite noting the significant side-effects experienced by some patients in the study. Goldman Sachs defied the coronavirus crisis with the US investment bank reported a boom in bond trading to earn as much in the second quarter

of 2020 as it did a year earlier. The quarterly earnings season kicked off on Tuesday with three major US banks detailing the $28bn they set aside to cover future loan losses from the pandemic. In the US, investors appeared to have largely priced in the grim picture for corporate profits, which are expected to fall by the most since 2008. “The focus is more on what the companies can say in terms of for ward guidance,” said Kasper Elmgreen, head of equities at fund manager Amundi. “They are navigating a ship with very low forward visibility and a very wide range of outcomes.” Conditions in the New York

manufacturing industry improved this month at their best pace since November 18. Businesses, though, had a less optimistic outlook than in June. Chinese stocks proved an exception after US president Donald Trump signed legislation rescinding Hong Kong’s special trade privileges with America and clearing the way for sanctions on Chinese officials. “Investors are taking comfort in the fact that [Mr] Trump has an election to win in November and needs to support growth domestically,” said Charlotte Harington, a portfolio manager at Fidelity, “which should constrain how hard he is on China in the short term”.

The ratcheting up of USChina tensions sent the CSI 300 index of Shanghai and Shenzhen-listed stocks down 1.3 per cent, while Hong Kong’s Hang Seng ended the session flat. Still, the Chinese index is hovering close to a five-year record after an eight-day winning streak this month. Louis Tse, managing director at VC Brokerage, noted that investors had been expecting Mr Trump to sign the legislation for several weeks and that the news “was more or less discounted”. However, the mood in the market dimmed as Beijing vowed to retaliate. Offshore investors again dumped their holdings of

Chinese shares via stock market link-ups between Hong Kong and mainland bourses on Wednesday. At less than $400m, though, net sales came nowhere close to Tuesday’s record $2.5bn sell-off. Japan’s benchmark Topix index was up 1.6 per cent while Australia’s S&P/ASX 200 rose 1.9 per cent. Meanwhile, Lael Brainard, a governor at the US Federal Reserve, spoke out on Tuesday in favour of doing more to boost the economy. The promise of more support for the market has helped counter growing concerns over a resurgence of coronavirus infections. Oil prices pulled back from their early gains. A June report from Opec showed the oilproducing group’s output had fallen almost 2m barrels from a month ago. Brent crude, the international benchmark, bounced back in early afternoon trade, after briefly reversing a more than 1 per cent rise. It was recently 0.7 per cent higher at $43.19 a barrel while West Texas Intermediate, the US marker, rose by a similar percentage to $40.56. “The outlook is one of inventories drawing and is supportive of oil prices,” said Fidelity’s Ms Harington. “We don’t see Brent going back down to low $30s but if oil prices get too high we will get a shale response from the US.”

Iron ore outstrips gold as year’s best-performing major commodity Latest data suggest China could produce a record 1bn-plus tonnes of steel this year NEIL HUME

ron ore has outpaced gold to rank as the best-performing major commodity this year, as a rebounding China sucks in vast amounts of the key steelmaking ingredient from mines in Australia and Brazil. The price of the rust-coloured raw material has risen almost 21 per cent in 2020, just ahead of gold, which is up 19 per cent as central banks have introduced huge stimulus programmes to try to quell the coronavirus crisis. Such activities have pushed down yields on trillions of dollars of fixed-income assets, burnishing the relative appeal of gold, which yields nothing. Meantime, signs that China, the world’s biggest producer of steel, is mounting a solid re-

covery have propelled iron ore prices, which rose above $112 a tonne on Wednesday, according to S&P Global Platts, up 9 per cent over the past month. As part of plans to reinvigorate its economy, Beijing recently announced plans to boost spending on infrastructure through an increase in local government borrowing. A state-backed rally in Chinese equity markets has also played a big role, as investors looking for China-growth proxies have piled into iron ore derivatives. Tyler Broda, analyst at RBC Capital Markets, said long-term demand trends for steel remained uncertain, given China’s increasing dependence on debt to fund new investment. But the shorter-term outlook was bright, he said, because of policymakers’ clear focus on safeguarding www.businessday.ng

jobs. Data released this week showed China imported more than 100m tonnes of iron ore in June, up from 87m in May. That was the highest monthly figure since October 2017. It also means that China’s steel production in June is likely to have surpassed May’s total of 92.3m tonnes. This would put the country on course to produce a record 1bn-plus tonnes this year, compared with just 750m tonnes for the rest of the world. Analysts said the sustainability of Chinese demand would be the main factor determining the direction of prices in the second half of the year. But supply disruptions could also have an impact, and not just in Brazil where Covid-19 is still spreading rapidly. In Australia, big operations that were running at full strength

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in June are planning maintenance work on rail and port facilities. Shipbroker Braemar ACM noted that last month it saw record levels of shipments from Port Hedland, the world’s biggest iron ore loading facility, in the Pilbara region of Western Australia. But so far this month, it said, Australian iron ore listings had averaged slightly more than 2.2m tonnes a day, about 18 per cent lower than in June. Brazilian exports have also stumbled, with shipments down 23 per cent week on week to 5.3m tonnes in the seven days to July 12, according to UBS. The rally in prices comes as some of the world’s biggest iron ore producers are due to update the market on their production and shipments. UBS estimates Rio Tinto, @Businessdayng

which is due to issue a production report on Thursday, shipped 88.1m tonnes in the three months to the end of June, up more than one-fifth from the preceding quarter. At current prices, analysts say the company could generate more than $10bn in free cash flow this year — potentially paving the way for a bumper dividend alongside half-year results in August. “The persistent strength in Chinese steel output, combined with lacklustre volume growth in the seaborne market, have led us to upgrade prices for the remainder of 2020,” said Dominic O’Kane, analyst at JPMorgan. “Higher Brazil exports should dampen some of the tension, but we now expect prices to hover over $90 a tonne for the next two quarters.”

Thursday 16 July 2020

BUSINESS DAY

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Thursday 16 July 2020

BUSINESS DAY

news

$37.8bn needed to bridge universal social protection gap — NLC JOSHUA BASSEY

he Nigeria Labour Congress (NLC) has said that about $37.8 billion would be required as Global Fund for Universal Social Protection for the first five years to close financing gaps. Social protection entails policies and programmes designed to reduce poverty and vulnerability by promoting efficient labour markets, diminishing people’s exposure to risks, and enhancing their capacity to manage economic and social risks, such as unemployment, exclusion, sickness, disability and old age. Ayuba Wabba, NLC president made this known in Abuja during an International Labour Organisation (ILO) virtual summit with the theme: “Covid-19 and the world of work building a better future of work,” which held Wednesday. “There is the urgent need to institutionalise a Global Fund for Universal Social Protection to enable the poorest nations respond to the pandemic and build resilience for future economic, health and climate shocks. “Already, some $10 trillion has been pledged by governments and international financial institutions for economic recovery. “According to pre-crisis estimates, a Global Fund for Universal Social Protection will need some $37.8 billion for the first five years to close the financing gaps. This represents a small fraction of the total global funding to build recovery and

resilience; and combination of both comprehensive contributory social security schemes and non-contributory social security guarantees,” he said. Wabba said that in Nigeria, over two billion workers were earning their livelihoods in the informal economy, which represented over 60 percent of workers globally and 90 per cent of total employment in low-income countries. According to him, ILO says 71 per cent of people globally have little or no access to social protection and Covid-19 has exposed the vulnerabilities of working people in every country in the world. “Job losses, loss of income and livelihoods, lack of paid sick leave and lack of access to healthcare during the pandemic have resulted in whole communities being vulnerable. “Also faced with lockdown measures, people are finding it very difficult to manage local and national uncertainties of health and socio-economic impacts, ‘’ he said. Wabba also noted that other practical measures to bridge the massive vulnerability gap included conditional wage subsidies and the extension of unemployment benefits. He described other measures as universal access to health care, payment of sick leave allowance to workers, including casual workers, the self-employed, platform workers and workers in the informal economy including migrant workers. He however called on trade unions to connect with civil society allies nationally and globally to promote universal social protection.

Senate approves N168.8bn 2020 budget for FIRS …confirms appointment of Rahmon as REC, Hassan RMAFC commissioner Solomon Ayado, Abuja

he Senate on Wednesday approved the sum of N168,809,476,220 to fund the proposed personnel, overhead and capital expenditure cost of the Federal Inland Revenue Service (FIRS) for the 2020 fiscal year. The approval came following the consideration of a report by the Senate committee on finance. Chairman of the committee, Solomon Olamilekan Adeola (APC -Lagos West) while giving a summary of the 2020 budget for the FIRS said N1.56 trillion was projected for oil revenue; N4.502 from non-oil revenue; N180.086 billion projected for four percent cost of collection; N11.279 billion as projected two percent cost of collection ceded to the Nigeria Customs Service; N168.80 net projected four percent cost of collection available rose FIRS to be appropriated by the National Assembly; and Value Added Tax (VAT) at 7.5 percent.

The Senate while adopting the recommendations of the committee’s report, called for the digitisation of all processes in the administration of tax in FIRS, so as to bring the Service up-tospeed with rapidly increasing online economic activities. The upper chamber also approved a one-off special purpose intervention fund to the tune of N100 billion to assist the FIRS complete its head office within 12 months; six training schools; 30 prototype tax operations office; purposebuilt facilities for efficient taxation of upstream petroleum industry and ICT infrastructure to identify and track digital transactions.

CHANGE OF NAME

I, formerly known and addressed as MISS SAFIYYAH KEHINDE SIYANBADE now wish to be known and addressed as Mrs Safiyyah Kehinde Abobade. All Former documents remain valid. General public please take note. www.businessday.ng

Nigerians face food insecurity, lack access to safety nets, NBS warns in new report Cynthia Egboboh, Abuja

new report by the National Bureau of Statistics (NBS) on the impact of Covid-19 on the economy has revealed that a large number of Nigerian households face severe food insecurity. Many citizens also reported they lack access to safety nets or other forms of support. “The food security situation in Nigeria has substantially worsened since the start of the pandemic. About 30 percent of households interviewed in June experienced severe food insecurity due to lack of money or other resources,” the data office stated in its Covid-19 Impact Monitoring report. “The incidence of severe food insecurity in June 2020

was nearly three times higher than in July/August 2018 and nearly six times higher than in January/February 2019.” Moreover, 77 percent of households interviewed in June reported moderate or severe food insecurity. There has also not been any significant improvement in safety nets or other sources of income assistance from institutions and/or remittances”. According to the second round of its Nigeria Covid-19 National Longitudinal Phone Survey ( NLPS) conducted in June, the NBS noted that 38 percent of households that engaged in agriculture reported having to modify their farming plans due to Covid-19. Out of these, 52 percent reported reducing the area they planted, 30 percent planted crops that take less time to ma-

ture, and 25 percent reported delaying planting time. But the commerce, agriculture and services sectors which were the hardest hit by the Covid-19 crisis, according to the report, experienced the largest recoveries in the share of respondents working. “Those engaged in nonfarm household businesses reported facing challenges associated with Covid-19. The most widely reported challenges faced by non-farm businesses are difficulty raising money”. Of the 87 percent of households owning non-farm businesses, 77 percent had difficulty buying and receiving supplies and inputs, while 70 percent had difficulty selling goods and services. The NBS in the report also noted that frequent handwashing with soap which

tops as a preventive measure against Covid-19, as advised by the government was majorly impossible as insufficient access to soap and water for washing was prevalent in some households. “The most readily available Covid-19 preventative measure is washing ones hands with soap and water; however, insufficient access to soap and water for washing is a hindrance for some households, with 24 percent having insufficient soap and 7 percent insufficient water for washing hands,” it stated. However, vast majority of respondents practice safety measures to minimise the risk of contracting the virus. 73 percent of respondents reported wearing a mask and 77 percent washing their hands all or most of the time after being in public.

L-R: Tolulope Aderibigbe, famous brand training manager, UAC Restaurants; Eustesia Ogunsusi, marketing service manager, UAC Restaurants; Dabrella Friday, teacher, and Funmilayo Taoreed, marketing assistant, UAC Restaurants, during the first anniversary of the UAC Restaurants Northwest Store celebration in Lekki Lagos.

Ngige asks Senate to step down Oyo commissioner seeks attitudinal to combat Coronavirus banking, financial institutions bill change hand washing. REMI FEYISIPO, Ibadan ...wants public hearing suspended Solomon Ayado, Abuja

inister of labour and employment, Chris Ngige has urged the Senate to stand down the banking and other financial institutions bill (BOFIA) and also suspend further public hearing on it. The bank and other financial institutions Act enacted 29 years ago is being considered for repeal and re-enactment. The bill seeks among other things, to enhance efficiency in the process of obtaining and granting banking licenses. It is co-sponsored by Uba Sani, (Kaduna Central) and chairman of the Senate committee on banking, and Betty Appiafi, who represents Rivers West. The Senate on Wednesday held public hearing on the bill. Stakeholders including the Central Bank of Nigeria (CBN) federal ministry of finance,

Nigeria Deposit Insurance Corporation (NDIC), chattered bankers, ministry of labour among others, attended. Making his presentation, Ngige, who was represented by the director of productivity and labour standards, Eyewumi Neburagho said the BOFIA bill is against labour and industrial relations. According to him, apart from the fact that the bill is not well circulated to stakeholders, Section 45 of the bill which covers labour and industrial relations should be expunged. He said if allowed, it will contravene labour laws and affect global best practices. “The minister is engaged in weekly federal cabinet meeting and he asked me to represent him. Even though the bill is not sent to the ministry, we understand that Section 45 covers labour and industrial relations which is in breach of labour laws.

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yo State commissioner for information, culture and tourism Wasiu Olatubosun has called for attitudinal change to combat the ravaging Covid-19 pandemic. Olatubosun speaking at a oneday training for reporters on Covid-19 in Ibadan, Oyo State on Wednesday, observed that human survival would only be achieved if people attuned what he called ‘the newnormal’throughsocialdistancing, use of nose covers and regular

“Some of the questions that come to minds are: will I and my family survive? What will happen if I lose my job and income? How can I create a win-win situation in this changing global environment? “Thus, a time of crisis as we have today forces and creates in us that opportunity to evaluate, change and improve, it is either we manage change or allow change to manage us, the biggest inhibitor to change lies within ourselves, and without doubt, change is the biggest precursor of better things,” he said.

FAMILY CHANGE OF NAME NNADI EDWIN ONYEBUCHI is the father of 1. NNADI CHIDERA SCHOLASTICA 2. NNADI CHIEMELIE EDWIN 3. NNADI CHIMAOBI BONAVENTURE 4. NNADI CHIBUCHI EVARISTUS and 5. NNADI CHIDUMAGA. Now their surname want to change from NNADI to ONYEBUCHI that they now wish to be know, called and addressed as 1. ONYEBUCHI CHIDERA SCHOLASTICA, 2. ONYEBUCHI CHIEMELIE EDWIN 3. ONYEBUCHI CHIMAOBI BONAVENTURE 4. ONYEBUCHI CHIBUCHI EVARISTUS and 5. ONYEBUCHI CHIDUMAGA. Former documents remain valid. General public and concerned authorities should please take note. @Businessdayng

Thursday 16 July 2020

BUSINESS DAY

news TCN clears Phase3 telecoms for operation after 18 months halt in business

. . stakeholders keen on stability for National Broadband Plan success Jumoke Akiyode-Lawanson

ransmission Company (TCN) has written to the Nigerian Communication Commission (NCC) to grant operational licence to Phase3 Telecoms and Alheri Engineering Limited for seamless operation of concessionaires. Phase3 Telecom3, an independent fibre optic infrastructure and telecoms service provider, had its operations halted in 2018

after the company was accused of owing the Federal Government of Nigeria N27.18 billion over fibre optic agreement with TCN and its concession agreement was terminated. Although the company strongly refuted the allegations, saying despite challenges faced in deploying infrastructure - including multi-year delays in linesmen allocation by TCN and devaluation/depreciation of

Continues on page 31

Dangote Cement’s ‘Bag of Goodies’ promo season 2 to produce 9 millionaires daily

o reward consumers and improve the livelihoods of its consumers around Nigeria, Dangote Cement plc Wednesday unveiled plans to produce an astonishing nine millionaires daily in its new Spell and Win “Bag of Goodies 2” consumer promo. The promotion, scheduled to run from Wednesday, July 15, to November 15, is expected to produce 1,000 millionaires within 16 weeks. Besides, consumers also stand a chance to win tricycles, motorcycle, television sets, refrigerators, Dangote Food Goodies packs, recharge cards and many other exciting gifts. To be a part of the promotion, “all the consumer needs to do is to buy any promo bag of Dangote Cement during promo period, pick out the scratch card inserted in the bag, scratch open the inserted card to see what you have won, go to the nearest redemption centre to collect your prize. To win a million naira, the consumer is expected to collect cards to spell, D-A-N-G-O-T-E and win star prize of N1 million”, the company disclosed. The manufacturing giant also noted that the Dangote ‘Bag of Goodies 2’ Consumer Promo is a huge investment aimed at rewarding new and existing consumers, especially in this period of COVID-19 with the much-needed palliatives. At the unveiling of the promo in Lagos, Michel Puchercos, group managing director, Dangote Cement, in his remarks, said it was part of the company’s strategies to continuously reward consumers who are the backbone in the cement business. “It is to reward valued consumers for their unflinching partnership in ensuring that our range of cement products remains today the first choice for construction purposes across the country,” he said. Puchercos stated: “The prizes we are offering in the promo are specifically tailored towards changing the living

standards of consumers who are the end-users of our products. These prizes have great economic value as they can be used to kick off small scale businesses especially in the face of the COVID-19 global pandemic with many families losing their source of livelihood. “Dangote Cement ‘Bag of Goodies Promo Season 2’ is to serve a dual-purpose, allow consumers of our products to continue their projects while at the same time stand a chance of becoming a millionaire or proud winner of prizes such as tricycles, motorcycles, etc. “Here in Dangote Cement, we adhere strictly to best global standards in producing our range of cement which makes them the best in the market. Our products; BlocMaster, 42.5R, 42.5N, and Falcon are all top-ofthe-range brands developed to ensure that cement users have a choice on the type of product suitable for their projects. Much research and tests went into the developmentandproductionof these products as we are determined to offer consumers the best quality and experience eitherinbuildingpersonalhouses or in commercial construction work.” Consumers are important and a fundamental factor of production without which the company’s ability to remain in business becomes impossible, explaining the reason for staging the consumer promo, Dangote Cement marketing director, Funmi Sanni, said. According to Sanni, “To grow our business, we must constantly create value in terms of quality, product, service, competitive pricing and depositing in consumer’s emotional bank accounts in order to become their the preferred choice of the brand at the point of purchase. “As a business, we recognize the importance of every member of our value chain- distributors, wholesalers, and retailers, as such, we have invested in growing their businesses through various empowerment schemes.” www.businessday.ng

Electricity consumers in Apapa face supply disruption over faulty transformer Olusola Bello

lectricity consumers in the port city of Apapa in the heart of Lagos, Nigeria’s commercial capital, and its environs will suffer power supply disruption for some time to come as the 30MVA transformer at the 132/33kv transmission substation that services the area has packed up. A new source of supply is being looked for pending when a replacement would come. The 40-year-old 30MVA transformer with 24-megawatts capacity packed up because of overloading, BusinessDay gathers. It was said to be carrying between 26MW and 27MW consistently over a long period with just four fans as against eight

fans that should have been used in the cooling process. The rating of the transformer is a function of its cooling. It can only supply 24MW if all the eight fans are working, a source close to the power industry told BusinessDay. “So if all the fans are not on, you cannot expect the transformer to carry 24MW,” the source said. “Before it finally packed up, it was said to have tripped off about seven times, an indication that the transformer is beyond repair.” Unfortunately for Apapa, home to Nigeria’s two busiest seaports, the two additional transformers that were already positioned at the substation to reinforce power supply to the area were removed to Egbin and Ilupeju sometime ago when

it was alleged that there was a proposal that Japanese Agency for International Cooperation indicated interest in replacing the transformer with 2no 100mMVA in Apapa area. But sadly, the COVID-19 pandemic has stalled their coming into the country. To mitigate the effect of the faulty transformer at the substation station, BusinessDay learns that an arrangement has been made to get supply from the transmission station located at Otto Wharf, called Amuwo-Odofin transmission substation. The implication is that supply to both consumers at Amuwo-Odofin and those in Apapa would have to be rationed or go through load shedding, meaning that business and homes in Apapa would have to buy more

diesel to power their generators to enjoy minimum level of services. BusinessDay found that a fairly used or refurbished transformer, which may also not last, is being sought from a company in Ikorodu, Lagos State. When BusinessDay sought the reaction of Eko Electricity Distribution Company over the matter, Segun Kosoko, its public relations manager for Apapa Business Unit, confirmed that to mitigate the effect of the faulty transformer at Apapa, the company had to connect to the transmission substation at Otto Wharf for supply. “Aside from that, there are efforts being made to link up with another transmission substation from Tin Can to link up with a 33kv line to also supply Apapa,” Kosoko said.

L-R: Boss Mustapha, secretary to the Government of the Federation; Vice President Yemi Osinbajo, and President Muhammadu Buhari, during a virtual meeting of the Federal Executive Council at the Presidential Villa in Abuja, yesterday. NAN

Mobile devices seen taking over media consumption as COVID-19 disrupts industry FRANK ELEANYA & BUNMI BAILEY

roliferation of mobile devices will eventually be the primary channel for consuming media services, and could be the death of traditional media organisations that fail to adapt to new realities as a result of the COVID-19 pandemic. Experts at the Masters of Marketing Series, organised by BusinessDay Wednesday, acknowledged that the media landscape in Nigeria was at a critical time in which existing players should learn and implement new strategies as quickly as possible, or face an existential crisis. The lockdown that took effect from April saw huge growth in the consumption of music streaming, movies streaming, online gaming, social media activities, podcasting, etc. This is not entirely surprising as consumption of these services has been on the rise even before the lockdown was

imposed, notes Femi Adelusi, group managing director, Brand Eye, who spoke on one of the panel sessions. The growth went over the roof during the lockdown because consumers’ appetite for entertainment surged, as people looked for ways to distract the boredom of being asked to stay indoors. “Many media types such as radio listenership, print have seen a significant decline in this period,” Adelusi says, noting, “It is important for these challenges to involve new formats, new content pillars, and new financial models in the view of changing demographics and growth of the mobile and internet across Nigeria.” He sees more big changes coming for the industry, hence the need for businesses to quickly move to understand consumer dynamics and prioritise sustainable business areas that optimise their strength as well as explore new opportunities that unlock mar-

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ket growth and also involve business processes that reduce expenses and overhead. In the new reality, the primary way of reaching the consumer is through their mobile devices. It is important to also note that 30 percent of these mobile devices across the continent are smartphones, which also throws in the dynamics of mobile applications, vice and connections. “So, in one smartphone, you can potentially have a minimum of 10-20 connections because every app that is connected to the internet or cuts to the internet on a monthly or weekly basis is a connection,” notes Elo Umeh, CEO of Terragon Group. In essence, offline would continue to be relevant. But profitability would be the result of adapting to the online market and maintaining a strong print front. The past four months have also seen a significant change in the attitude of media con@Businessdayng

sumers, the majority of whom have moved online. Kachi Onubogun, CEO of Frutta Juices, states that what this means is that in terms of value, cost patterns such as what consumers hold dear and viewership have all fundamentally changed. “If marketing is about connecting your consumer or shaping your consumers’ perception then the important thing is to understand who the new consumer is and how you reach him, appeal to him and what matters to him,” Onubogun said. Advertisers are among the worst segment in the media industry. Between April and June, several of them were forced to cut down significantly in the advert spend. Lampe Omoyele, MD, Nitrol 121, projects that the firsthalf numbers of the advertising sector will show there has been reduced spend across board, as long as FMCGs were hit by the COVID-19 pandemic.

Thursday 16 July 2020

BUSINESS DAY

News Multiple checkpoints by Customs, agencies... Continued from page 1

ports has further made it near impossible for importers to enjoy a friendly business environment at the ports. This totally negates the Federal Government’s Ease of Doing Business policy, creating cargo clear-

ing delays, compounding the woes businesses face as manufacturers and importers that do business at the ports pay dearly - as demurrage to shipping companies and rent to terminal operators. Repeatedly, Nigeria has failed in meeting the 48-hour cargo clearance target as cargo dwells for a minimum of 21 days (three weeks) in the nation’s seaports with its attendant cost implications for cargo owners. Presently, the Nigerian Customs Service (NCS) has over 12 different units at each port, which include Enforcement, Valuation, Customs Intelligent Units (CIU), Residence, Taskforce, Strike Force, CG Squad, Headquarters Strike Force, Customs Police, Special Weapons and Tactical Team (SWATT), Abuja Alert and the Federal Operations Units that mount checkpoints right at the port gate. These units are involved in cargo clearance such that importers and their agents are made to pass through their clearing documents to obtain approval from each of the units before the cargo is released. BusinessDay search shows that these units from the NCS are currently creating bureaucratic bottlenecks, and delaying cargo clearance as against the objectives of the Federal Government’s Ease of Doing Business policy. Jonathan Nicol, president, Shippers Association of Lagos State, who calls for restructuring of the NCS, points out the need to reduce the number of government agencies operating at ports. Nicol says the Federal Operations Units (FOU) is gradually becoming a terror to traders such that it has turned itself to an unauthorised terminal where containers duly released from ports are laid on the highway or sent to FOU for re-examination. The duplication of Customs units shows that the NCS management lacks trust on their officers, which does not go down well with the trade facilitation drive of the government, especially at this time the ports are heavily congested, he states. “There is need to provide accelerated clearing methods to decongest the ports. Customs should be made to follow the rule of engagement without militarising the trade environment with gun throttle officers intimidating the public. FOU should be discontinued,” he notes. Ari Ayuba, a clearing agent, who frowns at the creation

of multiple Customs units at the ports, says their presence constitutes obstacles to trade facilitation at the ports. “Customs keeps bringing different units to the port under the guise of checks and balance, and this is what encourages corruption at the port. This has made clearance of cargo at the port very difficult and clumsy. For instance, one wonders what Customs Police is policing when there is Customs Intelligent Unit (CIU). They are just there to make cargo clearance difficult for us at the port and the system more corrupt,” he laments. According to Ayuba, it has become very offensive when a Customs officer conducts an examination on an import, writes his report and releases the goods, only for another unit to seize the released goods after few metres away from the port. Tony Anakebe, managing director, Gold Link Investment Limited, a Lagos-based clearing and forwarding company, says there are several bottlenecks hindering timely clearance of goods at the ports. According to Anakebe, the clearing procedure has become very tough with Customs having over 12 different units that must authorise the release of the consignment, and this is aside other government agencies that must also authorise the cargo release before the importer is allowed to take delivery of his consignment. “Our ports are currently congested and it is bottleneck such as this that delays cargo from leaving the port. For instance, it takes a minimum of three weeks to clear a container with genuine documents out from the port due to the delays that come with the bureaucracy of passing the document of one container to multiple units of Customs and other government agencies at ports,” he says. Stating that multiple units of Customs will only breed corruption at the ports, he calls on government to take decisive step in reducing the number in order to make it easier for Nigerians take delivery of their consignments within 48 hours. Recall that as part of efforts to improve efficiency in port operations, the Vice President/ chairman of the Presidential Enabling Business Environment Council, Yemi Osinbajo, directed the Nigerian Ports Authority (NPA) to ensure only eight Federal Government agencies were allowed to operate and have physical representation at all ports. The agencies include Customs; Nigerian Maritime Administration and Safety Agency (NIMASA); Nigeria Police Force; National Agency for Food and Drug Administration and Control (NAFDAC); Department of State Security (DSS); NPA; Nigerian Immigration Service (NIS) and Port Health, while other are allowed to operate www.businessday.ng

L-R: Folake Ani-Mumuney, group head, marketing and corporate communication, First Bank of Nigeria; Seyi Iwayemi, senior group head and project director, Maxximedia Global Communications; Alero Balogun, head, corporate communications and CSR, Oando plc; Tolu Tomori Adedeji, marketing director, AbInBev, West Africa, and Rahul De, chief marketing officer, MTN Nigeria, at BusinessDay Masters of Marketing series sponsored by Tolaram Group and Terragon Group, in Lagos.

Stock market readies for rough start to... Continued from page 1

and release their results for

the period to June 30. The Q2 results are expected to more precisely reflect the impact of Covid-19 pandemic-driven decline in economic activities with corresponding impact on many businesses. This is evidenced in earnings warnings issued ahead of the scorecard releases. Earlier this month, Guinness Nigeria plc, Nigeria’s second largest brewer, notified the regulators and the investing public about material circumstances with impact on its full-year financial results for financial year 2020. The company said the adverse impact of the sharp contraction in economic activities and the knock-on effect of the Covid-19 lockdown took a toll on the on-trade segment of the business across all our markets. “Production and revenues have thus been negatively affected. “Due to a combination of the impact of Covid-19 and the asset impairment, we expect the profitability of the Company for the Financial Year to June 30, 2020, to be impacted,” Guinness said.

“We expect many companies to report significantly weak numbers, save for Telecoms, Logistics, Pharmaceuticals and Food focused companies,” FSDH Research says in their recent note to investors. The Nigerian stock market has gone farther into the bear zone with -10.15 percent decrease seen this year amid increasing sell pressure in the remote trading sessions. More banking stocks are also seen on investors offer radar as they foresee reportage of increased non-performing loan (NPLs) due to Covid-19 lockdown. “In our opinion, risks remain on the horizon due to a combination of the increasing number of Covid-19 cases in Nigeria and weak economic conditions,” note research analysts at Cordros Capital. “We continue to advise investors to trade cautiously and seek trading opportunities in only fundamentally justified stocks,” the analysts say. The current bearish trend that has thrown the market to a new low will not easily disappear despite the attractiveness of a number of fundamentally sound stocks. The continued spread of

TCN clears Phase3 telecoms for operation... Continued from page 30

the Nigerian currency, the company made sure to pay all equipment rental and concession fees. With this new development, Phase3 Telecoms and Alheri Engineering can now have access to their point of presence (POPs) in the TCN substation after about 18 months it was down and out of service. The new directive by the TCN grants operational access to Phase3 Telecoms and Alheri Engineering to POPs, concessioned fibre optic cable and power supply connectivity. Recall that Phase3 complained at the time that it inherited dilapidated fibre

optic networks from TCN but was still able to deploy more than 2000km of fibre and installed state-of-art transmission equipment along with the rehabilitation of the existing fibre. “We have thus far expended more than $100 million as capital and operating expenditure on the project,” the company said in a statement at the time signed by Adebayo Azeez, director, legal/regulatory services, Phase3 Telecom. Speaking with BusinessDay on what this means to Nigeria’s telecoms industry and plans to deepen broadband penetration, Olusola Teniola, president, Association of Telecommunications Companies of Nigeria (AT-

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Covid-19 and its negative impact on major global and domestic economic indicators remain a source of worry to analysts, investors and businesses. “Equity market returns have not preserved capital for investors over the long term, even when adding back the generous dividends paid to investors. “Nigerian investors are faced with difficult choices as interest rates have crashed. The alternatives are either to simply wait for rates to rise again in future, or to accept more risk in order to increase returns,” say analysts at Coronation Merchant Bank. In response to the Covid-19 pandemic, the Federal Government through the Central Bank of Nigeria (CBN) announced some stimulus packages aimed at easing the overall negative impact of the pandemic on businesses. “The quantum of the stimulus compared to the size of the Nigerian economy may mean there would only be a marginal impact,” according to Lagos-based analysts at United Capital. Price of Brent crude, Nigeria’s major source of dollar revenue, has continued to fluctuate. It stood higher at $43.36 per barrel as at 1pm on

Wednesday, July 15. Oil prices rose on Wednesday after a sharp drop in US crude inventories, with the market waiting for more direction from meeting on the future level of production by OPEC and its allies. In an effort to save pressured naira against the US dollar in the FX market, the CBN moved closer to unifying exchange rates in the official market and Investors and Exporters (I&E) window, as it devalued the naira to N380.5/$1 in the official market. “The unification of the exchange rate could provide offshore investors with guidance on the value of the naira relative to the US dollar and possibly help attract much needed foreign direct investment (FDI) to the country, to spur economic growth,” research analysts at Vetiva Securities, say. “With the continued spread of the coronavirus pandemic across countries and its severe impact on major global and domestic indicators, we envisage a persistently pressured market in the meantime, despite the attractiveness of a number of fundamentally sound stocks hence, a cautious trading strategy is advised,” Vetiva research analysts add.

CON), says, “The industry is keen to understand whether the issue has been totally finalised because we want stability. “This is a welcome move as it also helps towards the 120,000km of fibre that the Nigerian Broadband Plan (NBP) seeks to build by 2025. Phase3 Telecoms and Alheri Engineering have contributed over 3,500km of fibre, but while the fibre wasn’t available and there was a dispute, alternative arrangements have been made by the industry players. Over the 18 months period when they were halted, we had access to other fibre networks that were used for national long distance fibre. “We now need to know that there is certainty in

ensuring that this fibre will now be available at the quality expected, so that we can plan and include the thousands of kilometres of fibre in the NBP.” Stakeholders say this will necessitate harmonisation of the Right of Way (Row) charges for deployment of fibre optics on power lines (concession fees) to be at par with other RoW charges available in the telecom industry. Industry watchers expect that this move will allow the companies continue to provide affordable and robust service solutions that will see customers and other businesses rapidly leveraging the opportunities of reliable broadband internet across Nigeria, and creating a truly digital economy.

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industry Insight

BUSINESS DAY Thursday 16 July 2020 www.businessday.ng

A critical look at CBN’s FX restriction on maize Odinaka Anudu

n July 13, 2020, the Central Bank of Nigeria (CBN) extended foreign exchange (FX) restriction to importation of maize/corn. The apex bank directed all authorised dealers to submit the list of Form Ms already registered for the importation of maize/ corn using a designated format on or before the close of business on July 15. It said the move was part of efforts to increase local production, stimulate rapid economic recovery, safeguard rural livelihoods and create jobs. “As part of efforts by the Central Bank of Nigeria to increase local production, stimulate a rapid economic recovery, safeguard rural livelihoods, and increase jobs which were lost as a result of the ongoing COVID-19 pandemic, Authorised Dealers are hereby directed to discontinue the processing of Forms M for the importation of Maize/ Corn with immediate effect,” the CBN said in a circular signed by O. S. Nnaji, its director, trade and exchange department. “Accordingly, all Authorised Dealers are hereby requested to submit the list of Forms M already registered for the importation of Maize/Corn using the attached format on or before the close of business on Wednesday July 15, 2020. Please ensure strict compliance,” the bank further said. With the FX restriction on maize, the number of items prohibited from the FX market is now 44. Analysts expect that more items, especially foods, will be added to the long list. The apex bank’s FX restriction has some upsides. It has provided an opportunity for local farmers to expand capacity, increase revenue and earn more foreign exchange. For some time, farmers have complained of low patronage and criticised unbridled importation of food products into the country, which often rivalled theirs. Consequently, since the announcement of the FX restriction, they have been in exciting mood. Abdul Umaru, a maize farmer in Bauchi State said, “We have often complained about maize importation. We have always said that local maize farmers can produce enough for Nigeria. The country does not really need importation, especially as we spend a lot of money on planting.” An import ban, technical or otherwise, is expected to stimulate local patronage and local production. For instance, after the closure of Nigeria-Benin border in August 2019, rice farmers excitedly said the policy had changed the trajectory of their business. “We are making so much

profit in the sale of rice right now. I am buying paddy and milling it in the north to supply to markets in the south,” one trader in Kebbi told BusinessDay. Also, Aminu Goronyo, national president, Rice Farmers Association of Nigeria told BusinessDay, said in January, 2020, that lots of rice farmers were increasing their production areas because of huge market for paddy fuelled by the border closure. “This is because millers are patronising rice farmers now and ‘off-taking’ all that they produce immediately,” Goronyo had said. Protectionists argue that placing a ban on a food product would not just stimulate production, but also expand jobs and boost agriculture contribution to the gross domestic product (GDP). However, there are downside risks to the CBN decision to place a technical ban on maize. In the first place, maize/corn is not just a food crop but also a cash crop. It is eaten raw and used by food companies as an important input. It is used in the production of many products including noodles, starch, cornflakes, sweeteners, oil, beverages, glue, industrial alcohol, and fuel ethanol. Nigeria is Africa’s secondlargest maize producer after

South Africa. The country produces 10.5 million metric tons of maize per annum with a demand of 15 million metric tons, leaving a supply-demand gap of 4.5 million metric tons (MT) annually, according to data from the Federal Ministry of Agriculture and Rural Development. The gap is often met by imports from many countries especially Argentina. Like other crops placed on the CBN’s long list of items not eligible for FX access, the country is not sufficient in maize production contrary to claims by farmers or people aiming to profit from the policy. Nigeria is not even sure of producing up to 10.5 million tons currently due to security challenges in the north occasioned by Boko Haram insurgency and herdsmen attacks. Many farmers have fled their maize farms and taken up other businesses to avoid being killed by herdmen or Boko Haram insurgents. Maybe a more recent statistics could have shown that the country’s maize industry is in a precarious situation. More so, local maize is deemed expensive due to low production and high cost of farming . For instance, a ton of local maize sells for N140,000 to N160,000, whereas the landing price of an imported ton is N120,

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Many manufacturers seem to like the CBN directive on maize, but they complain that the policy, as usual, fails to provide adequate time for planning, thereby exposing factories to disruptions

000 to N125,000, according to market sources. Rationality demands that firms using maize as inputs will buy imported maize rather than local ones—as long as both provide the same value. “Our problem is that we are yet to understand that local producers are not competitive. So, any policy must factor in this, otherwise you keep killing different industries,” one representative of a multinational company said. Many manufacturers seem to like the CBN directive on maize, but they complain that the policy, as usual, fails to provide adequate time for planning, thereby exposing factories to disruptions. And this is basically rational because policies on agriculture naturally require time because production of foods or agricultural products is inelastic. They cannot be increased suddenly even when farmers desire to. A proper consultation by the CBN should have also revealed the supply challenges in the maize value chain which are yet to be addressed. For instance, can maize farmers suddenly meet the quality requirements of multinationals without adequate training and support? This is why before taking a step to place any item on FX restriction, adequate care should be taken and gestation period provided, commodity analysts say. Moreover, some of the country’s strategic grain reserves are depleted. Maize is particularly important for companies creating jobs for the economy including Nestle, Flour Mills, De-United Foods, among others. How will these companies cope, especially in an atmosphere where many of them are struggling to get FX to import other inputs? Furthermore, poultry farmers, who also use maize as feed, say

that their industry is already on the brink of collapse owing to the negative impact of the COVID-19 pandemic and the FX restriction would bring it to its knees. “We are only asking for a window to import maize now because of the scarcity and sharp rise in the prices of maize,” Ibrahim Ezekiel, national president, Poultry Association of Nigeria (PAN), said in a response to questions. “It has been a difficult moment for poultry farmers since the pandemic. But with this action by the CBN, I do not think the poultry industry will survive,” Ezekiel further said. President Muhammadu Buhari has never hidden his disdain for food imports. On August 13, 2019, he had directed the CBN to stop providing foreign exchange for the importation of food, saying his administration had achieved food security. “Don’t give a cent to anybody to import food into the country,’’ the president was quoted as saying. “We have achieved food security, and for physical security we are not doing badly,’’ he had said. However, Buhari’s statements about food security were far from reality. Even his Ministry of Agriculture and Rural Development would not agree to that. The problem is that leaders and policy makers often make rash decisions that are not based on science or research. Most times the policies are just based on emotions. Data from Agriculture Ministry show that the country has not achieved food sufficiency even in cassava and yam which it is the largest producer in the world. Nigeria is the largest producer of yam with 40 million metric tons per annum but yam demand in the country is 60 million metric tonnes per annum (MT), leaving a gap of 20 million MT. Nigeria produces 42 million MT of cassava but has a demand of 53.8 million MT of the crop, leaving a gap of 11.8 million MT. National supply for Irish potato is put at 900,000 MT per annum but with a demand of 8million MT and a gap of 7.1 million MT. Similarly, local production of sweet potato is estimated at 1.2 million MT, while demand is 6million MT, leaving a gap of 4.8 million MT. More so, Nigeria produces 400,000 MT of wheat annually but with a demand of 4 million MT, which leaves a gap of 3.6million MT. And so on and so on. In conclusion, the CBN’s policy may not be totally bad, but it is somewhat wrongly timed. Making such decisions requires time to avoid disrupting the value chain and achieving a direct opposite of what was originally intended.

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