BusinessDay 16 Sep 2020 by BusinessDay

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news you can trust I ** WEDNESDAY 16 september 2020 I vol. 19, no 652

₦ 4,998,039.32 56.40 +1.73

Crude Oil

$40.43

I N300

Foreign Exchange

Sell

I&E FX Window CBN Official Rate as at September 14, 2020

386.00 379.00

$-N 445.00 461.00 1m £-N 580.00 602.00 Currency Futures 30-sept-20 389.54 €-N 515.00 542.00 ($/N)

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MTN Nigeria plc CP

0.00 1.51

0.00 4.48

3m 2m 28-oct-20 25-nov-20 392.38 395.23

Axxela Nsp-spv Funding 1 (Natural Gas) PowerCorp plc plc

-0.03

9.00

8.13

6m 12m 24-feb-21 25-Aug-21 403.75

420.81

-0.04

0.01

9.05

11.16

60m 36m 30-aug-23 27- aug-25 498.32

590.10

Two months after domestic flight resumption, airlines record 60% load factor IFEOMA OKEKE

banks to expand loan books uptake may spur defaults as COVID-19 pressures businesses

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Low yields push Nigerian ome Nigerian banks are aggressively looking to expand their loan books, making it a key performance indicator (KPI) for their relationship officers who are

Dangote Cement plc

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

Hadiza BalaUsman (2nd l), managing director, Nigeria Ports Authority; Babajide Sanwo-Olu (3rd l), governor of Lagos State; Rotimi Amaechi (3rd r), minister of transportation, and others, as the Federal and Lagos State governments stopped barge operations along the Marina coastline, yesterday.

Iheanyi Nwachukwu & Hope Moses-Ashike

FGN

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

Market Buy

ntb

Benchmark Sovereign & Corporate Bonds

constantly reaching out to individual and corporate customers. This new push by Nigerian lenders comes despite the Covid-19 pandemic, which has pressured many businesses into not meeting up with their loans repayment obligations.

“Banks are forced to create loans to avoid the punitive Cash Reserve Ratio (CRR) regime and also preserve profitability as yield on treasuries remains at single digit,” a banker with one of the Tier-1 lenders told BusinessDay on phone.

The Central Bank of Nigeria (CBN) had in its latest disciplinary measures last month hit deposit money banks with a debit of N321.6 billion in CRR related requisitions. The CRR is the minimum amount Continues on page 30

wo months after domestic flight operations resumed in Nigeria, airlines are recording about 60 percent load factor, BusinessDay’s findings show. Load factor is the number of passengers an aircraft is able to carry in relation to the size of the aircraft. A visit to the Murtala Muhammed Airport, Terminal Two Tuesday showed a reasonable number of passengers being processed for flights to Abuja, Port Harcourt, Owerri, and other frequently visited destinations across the country. In March, the Federal Government shutdown airports across Continues on page 30

Inside

InfraCredit completes drawdown of AfDB $10m subordinated unsecured 10-year facility P. 2 FG, Lagos order stoppage of barge operations on Marina coastline P. 31

Wednesday 16 September 2020

BUSINESS DAY

news InfraCredit completes drawdown of AfDB $10m subordinated unsecured 10-year facility HOPE MOSES ASHIKE

nfraCredit, a ‘AAA’ rated specialised infrastructure credit guarantee institution, has announced that the drawdown of $10 million subordinated unsecured 10year facility has been completed under the Subordinated Loan Agreement with the African Development Bank (AfDB), an international financial institution and multilateral development bank. According to a statement by Stefan Nalletamby, the bank’s director of Financial Sector Development at the time of the bank’s board approval of the facility, “The Bank’s support will strengthen the capital base of InfraCredit, underpinning the expansion of the company’s core business of guaranteeing of bonds issued to fund infrastructure projects. “This adds to the Bank’s existing initiatives to mobilise domestic institutional savings and stimulate non-sovereign local debt capital market development in Nigeria. This ultimately helps to increase private sector financing for critical infrastructure projects in key sectors including energy, agriculture, water, health and education, through local capital markets.” Specifically, this facility will help to increase private

sector financing for critical infrastructural projects in sectors such as power, renewable energy, telecoms, healthcare, transportation, agriculture, among others. Analysts say this investment by AfDB demonstrates the strong investor confidence in the fundamentals of InfraCredit’s business and will promote the deepening of the local debt capital market. Pursuant to the drawdown, InfraCredit’s capital base will increase to $146 million (c.N58.5bn). According to the CEO of InfraCredit, Chinua Azubike, ‘’Despite the impact of COVID-19, and changes to macroeconomic assumptions, we are pleased to have reached yet another milestone in our pursuit to strengthen our robust balance sheet and guarantee issuing capacity. “Notwithstanding challenging market conditions, we have continued to demonstrate our strong fundamentals, solid underlying portfolio performance, proven track record and profitability. With the admission of AfDB to our capital structure, we are confident of our continuing ability to deepen market penetration and support access to long term domestic credit for the growing pipeline of infrastructure projects that will create jobs and support local economic growth.”

Buhari tasks Nigerian banks to redouble efforts to attract foreign investments, create jobs Endurance Okafor

igeria’s financial institutions are in the position to partner the government in its effort to diversify the economy and reposition the country for a sustainable future, according to President Muhammadu Buhari. The president made this known through the minister of finance, Zainab Ahmed, as she represented him on Tuesday at the 13th Annual Bankers Conference by the Chartered Institute of Bankers of Nigeria (CIBN). “You must redouble your efforts to mobilise domestic resources to attract foreign investments to create quality job opportunity for our youth and to lift a lot of Nigerians out of poverty,” Ahmed

quoted Buhari to have said. Meanwhile, President Buhari’s led administration plans to lift 100 million Nigerians out of poverty over the next 10 years. But Nigeria’s title as the poverty capital of the world means that the citizens of Africa’s largest economy have become poorer. This, according to analysts, has been aggravated by the impact of the COVID-19 pandemic as it has eroded consumers’ purchasing power. Exacerbated by the impact of COVID-19 lockdown, which was enforced to contain the spread of the novel coronavirus, Nigeria’s economy contracted for the first time in three years at -6.1 percent in the second quarter of 2020. This means the economy is a quarter away

L-R: Mahmood Yakubu, chairman, Independent National Electoral Commission (INEC); Adeleye Oyebade, deputy Inspector General of Police, representing Inspector General of Police; Matthew Kukah, Bishop of Sokoto Diocese/member of the National Peace Working Committee (NPWC); Osagie Ize-Iyamu, All Progressives Congress’ (APC) candidate for the 2020 Edo governorship election; Abdulsalami Abubakar, former head of state/chairman of the National Peace Committee, and Godwin Obaseki, governor, Edo State/People’s Democratic Party (PDP) candidate for the 2020 Edo governorship election, after the signing of the peace accord by the 2020 Edo governorship election candidates in Benin City, yesterday. NAN.

Food shocks, high energy cost to push prices higher in coming months BUNMI BAILEY & MERCY AYODELE

he persistent pressure on food supply coupled with the recent hikes in prices of essential utilities such as petrol and electricity, and foreign exchange restriction on food imports could further push domestic consumer prices, otherwise known as inflation, higher in coming months. According to analysts, petrol, power and food contribute a significant part of the inflation basket that could thus accelerate further. “Looking ahead, we expect inflationary pressures to remain elevated to the upside. The recent ban preventing food importers from accessing foreign exchange is expected to put upward pressures on food prices in coming months,” Ayorinde Akinloye,

a consumer analyst at CSL Stockbrokers, says. Akinloye states that electricity tariffs recorded considerable increases at the beginning of September, and that the deregulation of the downstream oil and gas sector in the same month has led to upward pressure on the price of petrol. Data from the August 2020 inflation report by the National Bureau of Statistics (NBS) released Tuesday showed that inflation rose monthon-month by 13.22 percent, marking the 12th-consecutive uptrend since September 2019 and the highest in 29 months. The current inflation rate is 1.34 percentage points higher than the rate recorded in July 2020 (12.82%). The increase is driven by increases recorded across both the food sub-index and core sub-index.

Food inflation, which accounts for more than half of the inflation basket, rose to 16 percent in August 2020, the most since March 2018 when compared to 15.48 percent in July 2020. The rise in the food index was caused by increases in prices of bread and cereals, potatoes, yam and other tubers, meat, fish, fruits, oils and fats and vegetables. Core inflation, which excludes the prices of volatile agricultural produce, stood at 10.52 percent in August 2020 when compared with 10.10 percent in July 2020. According to the report, the biggest increases in the core sub-index basket were recorded in Passenger transport by air, Pharmaceutical products, Hospital & Medical services and Passenger transport by road. Omotola Abimbola, a mac-

ro and fixed income analyst at Lagos-based Chapel Hill Denham said, the spike in food inflation can be attributed to an underwhelming harvest season, which has long been pointed out, due to delay in planting as a result of COVID-19 disruptions, delay in rainfall in Southern Nigeria, and recent incidents of flooding in northern Nigeria. “Core inflation was driven by weak FX liquidity, increase in fuel prices and impacts of COVID-19 on supply chains,” Abimbola further added. With inflation rate at 13.22 percent and unemployment rate at 27.1 percent, Nigeria now has a misery index of 40.32 percent, an indication that there is a mismatch between the cost of living and the earning capacity of people in Africa’s most populous country.

Oil prices below $40: What it means for Nigeria, local oil firms, banks DIPO OLADEHINDE

he price of Brent oil, the benchmark of Nigeria’s crude oil, has fallen to $39 as bearish factors mount and sentiment shifts add another wrench in the recovery for oil prices still reeling from the pandemicdriven blow to consumption. Brent futures dropped 4.1 percent to $38.95 a barrel as at Monday 2pm Nigerian time, while US crude dropped by 1.10 percent, to $37.67. One major factor behind the fall in oil price is the concerns over rising exports from the Organisation of Petroleum Exporting Countries (OPEC) and allies Continues on page 30 in third quarter of 2020, with the

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… as inflation hits 29-month high in August 2020

possibility of a total breakdown of the OPEC+ agreement. Also, Libya has announced plan to reopen its oil ports as soon as this coming weekend. Groups affiliated with General Khalifa Haftar’s Libyan National Army blockaded the country’s oil terminals in January, suspending exports and effectively decimating production from over 1.2 million bpd to less than 100,000bpd. Another factor is the possibility of the market weighing down by concerns that oil demand recovery is slowing due to a resurgence of coronavirus infections globally. COVID-19 cases are rebounding in the UK and France, with the number of daily cases reported exceed-

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ing 3,000 cases in the UK and 10,000 cases in France. What it means for Nigeria With oil prices at $39 and Nigeria’s crude oil output down to 1.4 million barrels per day, the Federal Government inevitably has a revenue problem. Nigeria faces a greater challenge than many other countries from the pandemic as a result of being the largest economy in Africa, with a population of about 200 million. “Specifically, we expect the performance in the oil sector to remain downbeat due to lower oil prices and reduced production levels in compliance with OPEC+ cuts,” analysts at CSL Stockbrokers said. The government reported

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a 60-percent drop in revenues in the first half of the year while foreign inflows have also fallen to $1.29 billion compared to $5.8 billion. Nigeria is in the midst of a foreign currency crisis that has led to multiple devaluations in March, July, and in August 2020. Pressure from the World Bank has also led to a unification of the exchange rate, which is now between N380 and N386/$1. What it means for oil producers Nigerian crude producers are having a rough time with $40 crude oil prices, as they have started counting their losses. The current low price of

Continues on page 30

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NEWS

Planned 25,000 MW suffers setback over delay in award of letter of contractual agreement OLUSOLA BELLO

he Federal Government’s plan to achieve 25,000 megawatts of electricity by 2025 is facing a setback due to the delay in the issuance of contractual agreement letter by the ministry of finance to Siemens Power, the company working on the Presidential Power Initiative (PPI). This has also led to delay in the release of part of the Federal Government counterpart funding for the project which is estimated to be N8.64 billion. The letter for the contractual agreement is supposed to spell out terms, conditions and the scope of the project. Unless this happens there would be no commencement of works by Siemens Power, an industry source told BusinessDay in Abuja. What is holding back the letter according to industry sources could be the unnecessary bureaucratic processes between the ministry of finance, the presidency and ministry of power.

The issuance of letter of contractual agreement was expected to have followed almost immediately after the approval of the pre-engineering contract which was ratified by the Federal Executive Council (FEC) sometimes in July this year, the sources said. The scope of pre-engineering contract include Power System Simulation and Training and System Development Studies that would be considering the 25,000megawatts scenario of the Presidential Power Initiatives (PPI), in relation to existing grid network infrastructure from distribution to transmission and generation. But work on these things cannot happen now until the letter is issued. According to Tolu Ogunlesi, a presidential aide in the Vice President’s office when he made public the approval of the pre- engineering contract, “This phase 1 focused on “quick-win” measures to increase the end-to-end operational capacity of Nigeria’s electricity grid to 7000 megawatts. Transmission

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projects proposed under phase 1 include 132/33 kV mobile substations; 132/33 kV (60 MVA) transformers, and containerised GIS substations. The approval of pre- engineering itself guarantees the commencement of preliminary activities for the implementation of the phase one of the project but the company handling the project has been able to move forward because it has been waiting to hear from the government. Such activities include the pre-engineering and concessionary financing aspects of the Presidential Power Initiative (PPI). PPI is a power infrastructure upgrade and modernisation programme agreed to by the Federal Government and Siemens AG of Germany, with the support of the German Government. The ultimate goal of the initiative, according to the government, is to modernise and increase the Nigerian electricity grid capacity from its current capacity of about 5000 megawatts to 25000 megawatts.

External reserves to cover 8 months of imports - Emefiele ...as naira stable at N460 HOPE MOSES-ASHIKE

igeria’s external reserves currently stand at $36 billion and are sufficient to cover 8 months of import of goods and services, Godwin Emefiele, governor of the Central Bank of Nigeria (CBN) said on Tuesday. Emefiele said with the decline in the country’s foreign exchange earnings and subsequent adjustments in the value of the naira against the dollar, the CBN has continued to implement a demand management framework, which is designed to support improved production of items that can be produced in Nigeria, and further conservation of our external reserves. These measures, he said, have helped to prevent a significant decline in our reserves. He spoke at the 13th annual Chartered Institute of Bankers of Nigeria (CIBN) banking and finance conference, in Abuja and Lagos. Emefiele said the band between the parallel mar-

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ket and the official exchange rate over the past months, has narrowed recently due to some of the measures taken by the CBN to curb illegal forex transactions. The drop in crude oil earnings as well as the drop in foreign portfolio inflows significantly affected the supply of foreign exchange into Nigeria. In order to adjust for the decrease in supply of foreign exchange, the naira depreciated at the official window from N305/$ to N360/$ and to N380/$. These adjustments along with increased efforts to restrict undue speculative activities, has led to a growing unification of rates across all the FX market segments. Naira was stable at N460 on the black market on Tuesday. The local currency gained N1.00k as the dollar was sold at N461 on Tuesday as against N462 sold on the previous day at the Bureau De Change segment. The foreign exchange opened on Tuesday with an indicative rate of N386.50k at the Investors and Exporters (I&E) forex window. This signals N0.12k dep-

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recation when compared with N386.38k opened with on Monday, data from the FMDQ revealed. Daily forex turnover rose significantly by 1,540.56 percent to $340.58 million on Monday from $20.76 million recorded on Friday last week, data from FMDQ revealed. Emefiele noted that the impact of the pandemic and the resulting slowdown in economic activity, led to a significant outflow of funds from emerging market economies. Nigeria was not exempted from the drop-in flows, as capital importation into the country declined from $6bn in Q2 of 2019 to $1.2bn in Q2 of 2020, he said. Bayo Olugbemi, president and chairman of council, CIBN, said business continuity plan under the Covid-19 challenges has been focused on enhancing competency and quality services to the teeming members and stakeholders through adoption and adaptation of high-level digital applications. “There is no gain saying that the future of banking is digitisation,” he said.

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APC, PMB & CBN: Listen to Nigerians!

Franklin Ngwu

ith the very reactive way that APC, the Presidency and the CBN react to alternative views and suggestions, one is left wondering if we are still under a democratic or different form of governance. From the dictionary and even basic knowledge, democracy is a form of government by the people and for the people, in which the supreme power is vested in the people and exercised directly by them or by their elected agents under a free electoral system. By the nature and rules of engagement in a democracy, every action or inaction of the government should be subjected to cycles of critical examination and criticism for a better society. If this is the type of government we claim to have, one is left wondering why APC, the Presidency and the CBN are very uncomfortable with criticisms, feedbacks and suggestions on how to move the country forward. It is important to remember that offering yourself to be elected and to lead comes with willingness and expectation to be criticised and then the humility to appreciate and utilise

the feedback. This seems to be unappreciated and disappearing in Nigeria under the present PMB led government. While there are many instances, two very recent events buttress this increasing unwillingness on the part of the government to take criticism and feedback. The first is the very reactive response of CBN to the 15 Matters of Urgent Attention published by Nigeria Economic Summit Group (NESG) on Tuesday September 8th, 2020. Even if the CBN is not very pleased with the issues raised by NESG, the response should be professional and focused on the issues raised. A situation where a whole CBN will descend so low using demeaning and somewhat insulting words is to say the least most unprofessional and inappropriate. Moreover, there is nothing raised by NESG that has not been noted in different forms and write-ups. For instance, it is known and agreed by all and sundry that the CBN intervention in different sectors of the economy is not sustainable. This is also the case with the multiple exchange rates CBN currently operates. Since 2015, there have been countless views all echoing that we need more coherent monetary and fiscal policy to move the country forward. However, it seems that the more the views increase, the more reactive our policies become with no interest in using the concept of forward guidance for our policies particularly the monetary ones. As CBN is interested and focused in creating a better Nigeria, so is NESG. There is therefore no justification for the reactive approach of CBN. Given that it is the foremost regulatory and monetary

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As the voice of the people is the voice of God, we implore the PMB government, APC and CBN to appreciate that power is transitory and short. What will be lasting is the legacy they create and leave for Nigerians at the end their tenures

policy institution, CBN should know that its activities are too important to our individual and national life to be left unchecked. Interestingly, there is no other agency that is in a good position and with the mandate to review and criticise CBN and other government policies than NESG. As the foremost aggregation of private sector leaders, they are in a vantage position to feel and assess the impact of government policies. Stating their position on key policy issues is therefore expected and commendable. Of course, CBN stated that NESG should have approached it directly given the direct link that exists between them, the truth is that most of the time, the government and government agencies can be impenetrable and unwilling to listen to alternative views. Even when they grant audience and listen, another big challenge is their commitment to accept and genuinely act on the feedback provided. What is expected of CBN is more leadership through focused clarification of issues and possible invitation of NESG for a dialogue. The second situation that seems to confirm the increasingly unwillingness of the government is the continuous rejection of the views of Afenifere, Ohaneze, PANDEF, Middle Belt Forum, Northern Elders Forum and other prominent groups and Nigerians on the need to restructure Nigeria. This is most disturbing given the glaring evidence that the country is becoming more complex, divided, and insecure and fast sliding into more crises and doom. Again, the government should remember that as it is presumably interested in creating

a united and prosperous Nigeria, so are other Nigerians. As this demand has been echoed by almost all critical segments of our dear Nation, the approach of the government is sad and counterproductive. If we have used the present structure of governance for over forty years and the outcomes clearly shows that we are seemingly failing with the very limited positive results, applying common sense shows that a quick rethink of our approach to governance is most pertinent. Moreover, as this suggestion enjoys wide support from almost all segments of the society, it is therefore bewildering why the present government is unwilling to listen to the views of the majority of Nigerians. Are we still in a democracy where the will of the majority dictates government’s actions and inactions or are we now in another form of governance where the will of the majority is irrelevant and unappreciated? As the voice of the people is the voice of God, we implore the PMB government, APC and CBN to appreciate that power is transitory and short. What will be lasting is the legacy they create and leave for Nigerians at the end of their tenures. That legacy should be one(s) that reflect genuine consideration of the will of the people, majority of Nigerians that yearn and demand for a better society through a listening and truly inclusive democratic government. Dr. Ngwu, is an Economist/Associate Professor of Strategy, Risk Management & Corporate Governance, Lagos Business School and a Member, Expert Network, World Economic Forum. E-mail- fngwu@ lbs.edu.ng

Who’s this government’s advisor?

iven the enormous tasks of governance, politicians and various leaders in this space usually employ the services of technocrats and advisors. The purpose is to help develop, execute and communicate policy which can transform lives of the entire citizenry. Wise leaders and politicians who had been successful across the globe understand the impacts of these technocrats and advisors and they usually select carefully, based on experience and extensive proven services these individuals had done in the past. The selection and appointment of these technocrats usually aid and stabilise the knowledge of the politicians and civil servants who are already in place. Where sentiments, tribalism, ethnicity as well as favouritism rule in the selection of these technocrats, the effects are always visible in the kind of policy and pronouncement the government promotes. Though beyond selection of qualified hands, ability of the politicians to listen and embrace the expert’s advice initiated by these technocrats is also crucial. In Nigeria, it appears the nation had been cursed with bad leadership. Year-in year out, the system keeps producing and pushing forward the worst of us. Ethnicity, religion and other issues dominate the discourse instead of developmental conversation which rests on vision, capability, capacity and character. Apathy and helplessness of the masses had killed the morale of the majority of the citizens who should be active contributors. As Nigeria takes one step forward, within four years, it will take hundred steps backward. We were heavily in debt before President Obasanjo’s regime. By stroke of luck and vision, Obasanjo and his team were able to deal with the debt burden. No one says Obasanjo’s regime was free of its own maladies. Power projects

and heavy investment in this industry had not shown any appreciable progress. The evils of People’s Democratic Party’s sixteen years rule are still here till date. We had oil surplus and abundance, but this was squandered by clueless and highly selfish individuals who presented the front of patriotic citizens. A desire for change made many Nigerians to opt for the alternative in 2015. The change came with lots of hopes and aspiration which today has become a huge ‘burden of Jeroboam which is heavier than the hands of Solomon’. The first four years were used on finding excuses about the damage the previous government had done. As if the leading actors had no clue about governance and the demands such can make on their skills, expertise, knowledge and know-how. Security issues had not been abated, power and roads problems had not witnessed any significant progress even though there seems to be efforts. The rail project has become another conduit channel through which the nation continues to bleed profusely. NDDC, NSIT and many other apparatus of government meant to change the fortune of the citizens had become avenues for daylight robbery. Nigerians have become chess board where those who know how to play the game can continue to ‘dictate’ the fortune. Many panels of enquiries and committees had been set up just to give outward impressions the leadership of this nation really care. Many of these enquiries had become toothless bulldogs which cannot bite. This year, COVID-19 pandemic became an equalizer. An international crisis which tests the capacity of various national governments and its leadership. A keen observer by now knows how Nigeria had handled so far the epidemic. The pandemic had become an opportunity for some of our looters or leaders to feed fat. While many nations, which had better health

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infrastructure continue to build more capacity, Nigeria’s government looked out for a “quickfix-it” strategy. Yes we must acknowledge it was better managed, but nothing had changed in our health industry which inefficiency showed glaringly during the COVID-19. In many nations, including Nigeria, many people experienced job loss. Some were placed on half-salary while a few were placed on temporary holiday. These measures were put in place to reduce financial pressure on the organisations. In advanced nations which care so much about the fortune and well-being of their citizens gave several palliatives. Some organisations or industries were supported so they can remain afloat. The aim of the palliatives is focused more on those on the floor of the economic ladder. What do we have here? Comfortable and average top leaders within government parastatals used the opportunity to enrich themselves. Being in any position is not about service but to ‘take my portion of the national cake’. The palliatives by the Ministry of Humanitarian Affairs are shredded in mystery. The more one looks the less one sees. Billions were shared to ‘imaginary Nigerians’ without bank statements which showed clear transfer of who got what. Children’s school feeding project thrived even though no school was opened. One can only weep for this nation. The drama in the National Assembly continues to be one that increases an average Nigerian’s blood pressure. As if the above are not enough, the government continues to push its limits with the introduction of various taxes and policies. While one can pity the government which continuously claims it is running on empty purse, national borrowing continues to skyrocket. Within this lockdown which created lots of

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Yinka Olaito

hardships, financial hardship is in the forefront, the government has introduced house rental fees, electricity tariff increases and now increase in the pump price of petroleum. That the prices of food stuff had gone beyond the reach of average Nigerian is not much of a concern. A bag of local rice is selling for Twenty seven Thousand Naira while others range from thirty two to thirty five. Transport fare had gone up by almost fifty to hundred percent, depending on your route. Thanks to COVID-19 protocol which requires commercial motor operators to take in about fifty to seventy percent of a bus initial capacity. With all these, the hardship of average Nigerian brother Jero, seems not to see an end in sight. While the government is looking for money, what has it done in curtailing looting among its officials? Is compounding the hardship of the average Nigerian on the street the best strategy? Even if it is, is the timing right? I am beginning to think the government should tread softly. Many Nigerians are now being pushed to the wall. When a blind, deaf and dumb man begins a fight, it can really be bloody. Yes government rides on the knowledge Nigerians are docile and will never react. But for how long will that philosophy rule? Government’s masquerade should be careful now as the ground is becoming more slippery. Olaito is a Media and Communications specialist with interest in policy and development.

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Insecurity and the death of rural credit markets (1) Small Business handbook

Emeka Osuji

ome time ago, I did a series on what I called, Poverty Generators – phenomena that helped to fuel poverty in Nigeria. Now I wish to make a few notes oh how these elements are still working against all efforts to curb abject poverty in the country. Over the past several years, Nigeria has been hot on the hills of poverty, using various means to fight it. The use of microfinance as a strategy of poverty reduction was made manifest in 2005, the International Year of Microcredit, when the country launched its National Framework for Microfinance. Since then, a lot of things have been done to reduce poverty. These efforts came alongside the financial inclusion programme, which seeks to integrate many of Nigeria’s unbanked communities into

the financial system. The Central Bank has, in its now increasingly activist role as banker to the government and its chief economic adviser, introduced many funds for the benefit of the Micro, Small and Medium Enterprises (MSME) sector of the economy. Indeed, it is difficult to argue that the Nigerian Governments of the past decade have not taken poverty reduction seriously. Instead, one can state with a significant degree of confidence that the government has done a lot to reduce poverty among the citizens. Unfortunately, the results have been disappointing. Not only did we fail to reduce the headcount of poor people among us, we took over the leadership of poverty-stricken people from India. By implication, either India stood still (they held poverty on the spot) or we were producing more poor people then they were, despite the huge difference in the population of the two countries. That could not possibly be the source of the differential in the performance of these countries. Perhaps, we need to look a bit harder inwards. I have some phenomena that I believe make nonsense of our poverty reduction efforts, and will hold us down until we resolve them. The first is insecurity. How many of us are ready to stake our finances in an environment in which we are afraid to live? We have been reading some stories about capital inflows

to Nigeria, over the past few months or in the last one year. The numbers have not been anything to write home about. We have blamed the pandemic for everything, including the increase in divorce rate among married couples. We have insisted that if not for the pandemic, foreign investment, both direct and portfolio, coming into Nigeria would have been much higher. Well, it may be true or false but we cannot say with any significant level of confidence that it would have been either way. However, we must concede that, going by the rampancy of attacks by bandits and herdsmen, the security situation before the pandemic may be better than what we have now. In that regard, it would be foolhardy to bank on increased foreign capital inflow into such an environment. The same situation applies to local investment. How many of us have invested a kobo of their own in the troubled sections of the Northeast, over the past several years. Although capital may be a seeker of high returns, it is also a shameless coward. Capital is not emotional. It loves life and will never exchange its life for high returns. Prior to this insecurity debacle, on which I don’t think we are dealing decisive enough blows, rural credit was a factor in agriculture, especially peasant farming. People borrowed money to prepare the farms, plant and harvest. They paid back when the harvest was done. Indeed, an

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Although capital may be a seeker of high returns, it is also a shameless coward. Capital is not emotional. It loves life and will never exchange its life for high returns

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

If only

omebody I hold dear and admire greatly for his keen insight on life issues says something which never fails to strike me each time, because it’s an obvious truth that very few people actually see. He says an individual who doesn’t have plans for his life runs a very high risk of being conscripted into the plans of others. And more often than not, this “other” will see him only as a means to fulfilling his own selfish agenda rather than seeing the individual as an end in himself. Let me give you an example. The thugs our dear politicians use to cause mayhem and intimidate supporters of political rivals as elections approach, perfectly exemplify the rudderless individual who patently failed to make any plans of his own, making him an easy target to be used and abused by a smarter man. Education serves many purposes for both the individual and the society he or she lives in. If we start listing them all now, I won’t be able to pass any other message across in this article because the list is literally endless. Some are; to prepare one for his career; to bring development in all ramifications to society; to equip an individual to be able to provide for himself and live a useful life; as a process which conduces holistic development of the individual, to raise solution providers and to mould the ideal citizen are just a few. Nwagwu and Fafunwa both define it in ways I particularly like. Fafunwa avers, “education as the aggregate of the process by which a child or young adult develops the abilities, attitude and other forms of behaviour which are of positive value to the society in which he lives.” Nwagwu on the other hand defines education as, “the process

used by society to preserve and upgrade the accumulated knowledge, skills and attitude of its people and foster the wellbeing of mankind.” There are others who insist education loses its definition if it doesn’t provide the mental capacity and an interrogative mind that challenges accepted norms to prove their efficacy. However, if we’re to come down to the basics, we may need to start by saying the primary aim of education is furnish the individual with the ability to reason and think for himself. This forms the foundation of almost every other definition. Returning to our “lost boys” who appear to have failed to plan, I often wonder if they’re always entirely at fault. Why would a grown man risk his life fighting for a politician who he may never meet? And for how much? Sometimes, for as little as N500 or N1000 by the time the money is shared. There are few things in life more dangerous than a man devoid of hope. He will always be the first to bring the whole house crashing down. Why care about an entity you don’t think you have a stake in? No man in his right senses will use his hands to destroy his own house. This is the predicament our nation currently faces. With bourgeoning youth demography, accounting for about 65 percent of a total population of over 200m Nigerians, most of whom are unemployed and many, unemployable, we’re sitting on a ticking time bomb. But that’s not new, it’s been said before. How different things might have been though, if we people could put aside how we look and focus on what’s really important. An army where everyone wants to be a General and no one wants to be a foot soldier cannot win a

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single battle because it’s common knowledge Generals don’t fight, they only command and coordinate. I wonder how different things could have been if successive governments had cast their sights in the direction of countries such as Finland who separate into two groups at the beginning of senior secondary school, those who will take matriculation exams to gain admission to university in three years’ time and those whose strengths obviously lie in their technical abilities. They too are prepared for several years before gaining admission to technical school. So there’s a deliberate policy to cater for both academic and vocational further education equally, without a hint of bias. Being an egalitarian society, both University educated and technical school trained citizens can look forward to equally respectable and rewarding careers. The positive effect this must have on their students, who having acquired the ability to reason through basic education, can decide for themselves which path to toe so they can become their best selves are immeasurable. Equally impossible to quantify is what these options, which enable them to make viable plans during their formative years, does to boost confidence and build up self-esteem. Self-esteem often comes from having hope for the future. Education is not solely an academic enterprise but is also a moral venture. The fact that it enables self-actualisation is of moral value in itself as every human being has the right to try to become the best he can possibly be. The moral benefit shouldn’t end with the individual though. It should also serve the moral purpose of raising individuals who will place the interest of their society alongside

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increase in credit used to translate to an increase in agricultural output. Now, it is not even sensible, both for the lender and borrower, to talk of putting borrowed funds into the farms nowadays. Microfinance, as an instrument of poverty reduction, thrives on the key features of the informal credit market. One such feature is information asymmetry. As Aryeetey and Udry notes in their work on the subject, “a loan involves the exchange of current resources for future resources. It therefore involves a promise. If a loan transaction occurs in a risky environment and if a complete set of markets for contingent commodities does not exist, then the promised transfer of future resources may not be certain”. We are told that insurgents are harvesting our farms and making money thereby destroying the promise in the underlying credits. This alone makes lending in unstable areas, which the whole country is fast becoming, at least in the rural areas that can be attacked freely, very difficult. The money lender may be unserious and a lover of money but not when his life is at risk. Those lending money to rural farmers and poor households in the Northeast will tell you that it is not possible to finance people whose farms are under the threat of occupation.

Character Matters with Daps

Dapo Akande

their own. Anything short of this may pass as schooling but lacks the moral foundation to be termed education. I’ve often asked why a country like ours “blessed” with leaders in possession of multiple academic certificates is in such a state. And by leaders, I don’t mean only those in the political sphere. Our educational system needs to be critically examined so it churns out more people with ingrained leadership traits and less clever crooks who use their “cleverness” to devise increasingly ingenious ways to loot and defraud. Whenever I come across our “lost boys” I can’t help but think, “if only”. Changing the nation...one mind at a time. Akande is a Surrey University graduate with a Masters in Professional Ethics. An alumnus of the institute for National Transformation and author of two books; The Last Flight and Shifting Anchors. Contact: dapsakande25@ gmail.com

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Wednesday 16 September 2020

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“Cross River State is a tourism hotspot” and other fairytales

David Hundeyin

nce upon a time in the vassal kingdom of Cross River, there lived three men named Prince, Tortoise and Tech Bro. Prince was the vassal king, tasked with bringing the kingdom’s 3.7 million inhabitants out of poverty. The other two were his advisers - Tortoise, the independent adviser who always tried to steer Prince toward the facts of every matter to act in the public interest, and Tech Bro the mercenary contractor whose only interest was currying favour with Prince so as to make money. One day Prince called his two advisers and put a question to them: “Our overlords in the imperial capital city of Abuja have granted me a rebate from our annual tribute in the sum of $500 million - what shall I do with this money? You both are well aware that I believe that Cross River has a lot of tourism potential. What can I do with $500 million to showcase Cross River to the world?” In his usual manner Tortoise replied, “I think we should first of all consult the facts before deciding what to do with the money.” “Go on,” said Prince. “You see,” said Tortoise, “The data and numbers really do not support the idea of Cross River as a tourism centre at all. I do not think that tourism should be your key strategic focus.”

“Preposterous!” chorused Prince and Tech Bro. “Everybody knows that Cross River is Nigeria’s number one state for tourism. We have Obudu Cattle Ranch and the old Nigerian capital city and an old slave port and beautiful green hills and...well you get the point. What else would we do with all this tourism potential?” So the thing is,” said Tortoise, “None of those things you have mentioned is actually central to tourism at all. Cross River kingdom lacks a comparative advantage in tourism.” “Comparative advantage? What is that?” said Prince. Tortoise continued, “Comparative advantage means that you explore what you are already good at. So Cross River focuses on what it is already good at and spends this money on assisting the ecosystem around that thing to develop. For example in the 2013-2017 NBS subnational GDP breakdown, Cross River ranks third nationwide in Agriculture with over N1 trillion worth of output. Cross River is actually a net exporter of food. Take cocoa for example, the Nigerian Export Promotion Council has stated that Cross River has a comparative advantage in cocoa and rice exports. In particular Ikom Ogoja, Boki, Obudu may have even surpassed Ondo as Nigeria’s top cocoa producer. But these places suffer up to 45 percent post-harvest losses due to lack of adequate storage and processing facilities. What if we spend $100 million on such infrastructure for them? We could help them minimise their losses and put more money in their pockets. Also the increased export income would give us more leverage in the imperial capital city.” “But I like tourism!” said Prince. “OK, so let’s look at tourism and see whether Cross River has a comparative advantage there,” said Tortoise as Tech Bro sulked, muttering something about “this guy always talking” under his breath. “I am going to present data from two academic papers. The first is from a 2017 paper titled ‘Assessing the

Seasonal Patterns of Visitor Arrivals as an Index for Hotel Industry Growth in Calabar, Nigeria’ by Titus Amalu and Eja Eja of the University of Calabar. This paper, which was published in the Ottoman Journal of Tourism and Management Research shows that the all time peak of visitor arrivals in Calabar between 2006 and 2015, measured using Calabar hotel lodging statistics was in 2015 - a grand total of 18,227 visitors. A field survey from the same study shows that 12 percent of visitors came for the Christmas festival, 65 percent for the Calabar carnival, 10 percent for sightseeing and holidaying, 8 percent for cultural events, 3 percent for religious events and 2 percent for academic seminars. This means that as at when last measured in 2015, Calabar had a non-seasonal tourism economy worth 23 percent of 18,227 people 4,192 people. Good luck building a Las Vegas tourism economy on that. The same study also found that in a survey of hotel industry entrepreneurs in Calabar measuring their biggest challenge, 19 percent complained of lack of patronage, 19 percent complained of lack of electricity supply, 18 percent complained about high taxation, 14 percent complained about government policies and 15 percent complained about lack of tourism activities. That says it all doesn’t it?” “I’m not convinced,” said a frowning Prince. “OK let’s look at the second study published in 2019 in the International Journal of Academic Research in Business and Social Sciences by Mary Ojong-Ejoh, Edet Emmanuel Eteng and Eja Eja. the study is titled ‘Assessing Visitors’ Leisure Time and Constraints to Tourism Resort Utilization in Calabar, Cross River State, Nigeria.’ The study shows that a 2018 survey of tourism entrepreneurs in Calabar showed that lack of patronage was their number one problem (32 percent). And that is not the worst part. You know the worst part? According to the NBS GDP breakdown I mentioned before, Cross River State ranks in the

‘

Everybody knows that Cross River is Nigeria’s number one state for tourism. We have Obudu Cattle Ranch and the old Nigerian capital city and an old slave port and beautiful green hills and...well you get the point. What else would we do with all this tourism potential?

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

How to ‘blow’ half a billion dollars

t just may be that today P&ID regrets not taking the last out-of-court settlement Nigeria offered them. Recent headlines state that Nigeria now says that any offer for settlement is off the table. P&ID took Nigeria to arbitration alleging that Nigeria had repudiated a contract to build a wet-gas plant in Cross River state. In 2017 they won $6.6 billion at the arbitration, which over the years with the accrued interest, totals $10 billion as of date. During the arbitration and subsequent appeal process Nigeria had dabbled with the option of a settlement, and varying sums were allegedly offered to P&ID at different times, but these offers were never accepted; decisions P&ID may by now regret given the judge’s conclusions in the latest ruling. Every court case bears some risk; “open and shut case” is a common enough expression, but in reality very few cases are purely open and shut because there usually is a loophole. Even if unseen at the start of litigation, it can emerge in the course of it. The probability of a loophole unravelling a case may seem low, but its viability should be kept in mind. And so at a certain point in a court battle the

perceived strength of a case can (and should) rise and fall based on an informed assessment of viable loopholes that could determine the outcome of the case. You don’t want to be too cocky, or underrate your opponent. The stakes were high, and P&ID knew early on what the greatest loopholes were: they had made or authorised questionable payments to Nigerian officials involved around the time they procured the contract. How this fact did not motivate them enough to accept a quick settlement will no doubt be the subject of articles, books, and maybe a documentary or two in time to come. The said judgment of Sir Cranston of the English High Court has likely ended all hope of any settlement. Dismissing P&ID’s vigorous though “inconsistent” arguments against an opportunity for Nigeria to prove fraud, the judge agreed that Nigeria’s submissions before him revealed that P&ID lacked real capacity to execute the contract in the first place, that they misled the arbitration tribunal by perjury, and that they breached several anti-corruption statutes by various payments and gifts to Nigerian officials. There were also no factors weighty enough to stop a late challenge to the

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enforcement of the award in the face of the foregoing. This ruling sets the stage for Nigeria to approach the court again to argue that for these same reasons, the award should not be enforced. So the fireworks are not over yet, but we can already see the finish line: P&ID’s goose is nearly cooked. It has been reported that earlier this Irishowned company was offered as much as $250-million dollars cash, or alternatively a combined deal of $100-million plus $500-million in cash and concessions to settle out of court. They allegedly refused these offers. It must have seemed like a short-change to accept less than a billion to forgo a judgement award of $10 billion. Yes, but remember the loopholes. They say he who comes to equity must come with clean hands. In their legal arguments, Nigeria’s lawyers successfully played up the principle that “fraud unravels all”. And rightly so. As the judge observed, no justice system should be eager to lend its courts and its judicial process to the perfection of a fraudulent scheme. It destroys the integrity of the arbitration process, and also the courts that underpin it. And having described the

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bottom three nationwide for services - including tourism. I didn’t make that up, you can check it yourself. Cross River State is third from bottom in services GDP nationwide, behind Gombe, Ekiti, Jigawa and Bauchi.” Tortoise took a dramatic pause and looked at prince. “When you take all of this data into consideration as Cross River State governor, what then should your budget spend strategy be? Shouldn’t you focus on improving rural-urban transport links to aid evacuation of agricultural produce from farms? Shouldn’t you invest in post-harvest storage facilities to stop losing 45 percent of your cash crops every year? Shouldn’t you perhaps invest in research and development capacity for your state to become better at what it is already good at?” Tech bro interjected, “None of the above! What you should do instead, my visionary sir, is spend $450 million on a tourist resort. When you do that, then spend another N21.46 billion on an International Conference Centre that has never actually hosted anything significant in its entire existence. Afterward you should then spend $36 million on a monorail linking the two white elephants to each other and then sit back and watch it all die with sickening, predictable inevitability.” Tortoise cried, “Are you really advising the prince to ignore data, economics and common sense when spending scarce public funds and instead lavish them furiously on these monuments to human foolishness in the middle of nowhere?” Unable to look the tortoise in the eye and reply directly, tech bro replied, “20 minutes from Calabar is not the middle of nowhere. Your faves are loudmouths with zero vision and why our generation is regarded as a joke.” Prince said, “I like Tech bro’s idea better.” And they all lived miserably ever after.

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Edozie Uka

F a

wet-gas transaction as “a fraud that is complex and continuing”, it appears most likely that the entire $10-billion arbitration award is heading for the trash can. And to think that not too long ago they turned away a cool $250 million. Nigeria convinced the court that the $40 million P&ID claimed to have expended towards design and blueprints for the wet-gas plant was not even their own money, but that of a Nigerian oil company, provided for another project. At some point in this dispute, it is possible that even a modest settlement proposal of $20 million would have turned a fair profit for P&ID if accepted. Right now it is doubtful that Nigeria would offer even $1,000,000 to be rid of this case.

Wednesday 16 September 2020

BUSINESS DAY

Editorial Frank Aigbogun

Do not rig Edo election

editor Patrick Atuanya

The state’s interest is and should always be supreme over an individual’s ambition

Publisher/Editor-in-chief

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

he much awaited Governorship election in Edo state will hold on Saturday 19th September, 2020. We are worried that the election, if not properly managed, would be marred by heavy gun fire, late arrival of voting materials, killings, reports of ballot box snatching, technology failures, results manipulation and even violence as recently witnessed in other states. Nobody should rig the election for whatever reason. State and non-state actors, political parties and youths of Edo state must comply with electoral guidelines. As a democratic principle, elections make a fundamental contribution to good governance. Elections enable voters to select leaders and to hold them accountable for their performance in office. Accountability can be undermined when elected leaders do not care whether they are re-elected or when, for historical or other reasons, one party or coalition is so dominant that there is effectively no choice for voters among alternative candidates, parties, or policies. Nevertheless, the possibility of controlling leaders by requir-

ing them to submit to regular and periodic elections helps to solve the problem of succession in leadership and thus contributes to the continuation of democracy. Moreover, where the electoral process is competitive and forces candidates or parties to expose their records and future intentions to popular scrutiny, elections serve as forums for the discussion of public issues and facilitate the expression of public opinion. It is in the light of the above that electorates look forward to the day of election to exercise their franchise guaranteed by the Nigerian constitution. But this inalienable right cannot be done under a tensed atmosphere. The electorate needs to be assured of his safety before going out to vote. He also must be assured that his vote would count after voting. Experiences from some states such as Imo, Rivers, Kano, Bauchi, and most recently, Kogi do not give much to cheer. Last week, political parties and their candidates signed a peace accord in Benin City with a promise to ensure free and fair election across the State. Before then, the Oba of Benin had a meeting with candidates of the major political parties, Governor Godwin Obaseki of Peoples

Democratic Party (PDP) and Pastor Osagie Ize-Iyamu of the All Progressives Congress (APC). It is common knowledge that previous peace accords at both federal and state levels were not respected. What would make the Edo episode different would be if the contending parties respect and honoured the agreement and caution their supporters. While we have confidence that the electoral umpire, INEC, will conduct a free, fair and credible election, however, the perception with the public is that the election will be manipulated. Sadly, this has become the common rhetoric in the state with insinuations that it doesn’t matter what happens in the polling units, that the federal might would be deployed to ensure the election is rigged. Whether true or false, that perception has been reinforced by both the calibre of people leading the campaign in the state, their utterances as well the huge deployment of soldiers across Edo state. Why would a governor from another state come to Edo with a full complement of soldiers? Many families in Rivers and Kogi States are still mourning their loved ones who died from gunshots during the 2019 general elections. Actions such these instill fear in the electorates and may if

not carefully managed, affect voter turnout on the day of election. INEC must come out very clearly to prove that it is truly independent by addressing these and other contending issues. The campaigns witnessed pockets of violence and attacks. President Muhammadu Buhari must provide adequate security for the citizens and ensure there is no form of violence during and after the election. INEC alone cannot resolve all the challenges facing the electoral and political system. A lot will depend on the collaboration and support of other key stakeholders in the electoral process, including political parties, security agencies, media, and civil society organisations. Rather unfortunately, INEC does not have control over these actors. All those involved in the Saturday governorship election must maintain the peace, respect electoral law and the wishes of the people. While we urge the eventual winner to be magnanimous in victory, the losers should accept the fact that election is not a do or die affair. No person’s blood is worth shedding. The interest of the state and the nation is and should always be supreme over an individual’s ambition.

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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 Konyin Ajayi

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tax issues Nollywood: Could the increased VAT rate of 7.5% stifle the industry’s sluggish growth? Adesegun Adetoro

ilm is arguably America’s greatest export. Hollywood, as the American film Industry is popularly referred to, is the reason why a young lad growing up in 90s in Lagos believed that the American Police would appear in seconds once someone dialed 911. Many Nigerians probably interacted with brands like Kentucky Fried Chicken via Hollywood before the outlets started popping up in the Country in the 2000s. Every year, Hollywood earns billions of dollars in revenue. However, a better statistic for the export value of the industry is that of the $41.7billion dollars earned in 2018, just $11.9billion (29percent) was generated within America. An even better statistic is that the highest grossing film of all time in Nigerian cinemas is Black Panther – a Hollywood film. But this article is not about the export value of Hollywood, but about its steadily growing counterpart, the Nigerian Film Industry – popularly called Nollywood. There are no specific claims as to who coined or conceptualized the name Nollywood. However, it is reported that it first appeared in an article by Matt Steinglass on “Film: When There’s Too Much of a Not-Very-Good thing” published in the New York Times in 2002, and is suggested to be a generic merger of the words “Hollywood” and “Nigeria”. Away from the history and description of the term Nollywood, is that the Nigerian movie industry has become a force to reckon with in West African Culture. In the article, “Nigerian Film Industry” by Dr. Gloria Emeagwali, it was reported that Nollywood movies dominate television screens across the African continent and by extension, the diaspora. In 2015, it was reported that the Nigerian movie industry was recognized as the second biggest film producer in the world behind Bollywood of India. It was further reported that Nollywood was worth $5billon, with an expected worth of $5.3billion as at 2018. But these numbers have been difficult to back with definitive public data. In-fact before 2018, Cinema practitioners did not officially disclose Box Office revenues for films released in Nigerian cinemas. However, since the advent of the Cinema Exhibitors Association of Nigeria (CEAN)’s weekly Box Office information, released in collaboration with renowned measurement and analytics company Comscore, film practitioners, investors and other stakeholders in the Nigerian Film Industry can now track the performance of a subset of Nollywood – films released to cinemas. So, what are the numbers saying? Before I delve directly into what the numbers are reporting for the period between 4 January 2019– 29 December 2019, it is important to share some background as to the business of releasing a film in Nigerian cinemas. There are three major parties involved in the release of a Nollywood film to cinemas. The Producer – This is most times the owner of the intellec-

tual property and brain behind a film project. In Nigeria, a large percentage of filmmakers are independent producers who source investment to create their films. In simple terms, the producer generally sources and spends the money required to make the film. The Distributor – The role of the distributor is to coordinate the release of a completed film project in Nigeria. In other words, the distributor is the intermediary between the producer and the exhibitors (cinema houses). Roles of the distributor include securing release dates, organizing screening times, working with the producer to ensure that adequate marketing is carried out and taking a cut of film proceeds. The Exhibitors – For the purpose of cinematic release, the exhibitors are the cinema chains established across Nigeria. They are the sellers of the completed film product and deal directly with the consumers. In this relationship, the exhibitors sell the tickets and are the ones who collect the proceeds for the films released in cinemas. How does the relationship then work financially? – In a regular Nollywood film project, the exhibitors collect the sales proceeds from the film, remove appropriate taxes, then take their cut of the proceeds for screening the film – Note that there are multiple exhibitors, and this will be done by all of them. Next, the distributor takes their percentage of the proceeds – However, there’s just one distributor, so though the distribution percentage is lower, it goes to just one party. Lastly, the balance is for the producer – who hopes that there is enough to cover production costs to be able to return investor funds at a profit. Now back to the numbers! Between 4 January 2019– 29 December 2019, an analysis of the Box Office information released by CEAN shows that a total of about 293 films screened in Nigerian cinemas during the period, generating over N6.1billion. Of that amount, N4.6billion (about 75percent) was earned by 154 foreign films from Hollywood, Bollywood, www.businessday.ng

Britain and other African countries. The remaining 139 Nollywood films earned the balance of N1.5billion. This shows an underperformance by Nollywood titles where 47percent of the total films released during the period earned only 25percent of the revenues. Drilling further down, it is clear that Nollywood titles struggle to generate huge box office revenues. Of the 139 films released, only 3.6percent earned up to N100million each, while 5.7percent made up to N50million. In addition, 8.6percent made up to N30million, 10percent made up to N25million, 12.1percent made up to N20million, 15.7percent made up to N15million and 22.9percent made up to N10million. Based on the numbers, over 77percent of the Nollywood titles during the period earned less than N10million in gross revenues with about 30.1percent earning even less than N1million. How does that play into the revenue split for Film Producers? As previously mentioned, exhibitors sell the tickets to watch the films and collect the gross revenues. Before 1 February 2020, when the implementation of the new Value Added Tax (VAT) rate of 7.5percent kicked-in, the general profit-sharing ratio was: Description N Gross 100 Less: Entertainment Tax @5% (5.00) Value Added Tax @5% (5.00) Balance 90.00 Less: Share to exhibitors @ max 55% of balance (49.50) Less: Share to distributors @ 10% of balance (9.00) Share to producer 31.50 This figure represents box office revenues generated between 4 January – 29 December only. Some film titles started screening before 4 January and earned a portion of their revenue before then (such revenue has been excluded), while some titles were still screening after 29 December 2019 (revenues after 29 December have also been excluded). Revenue sharing ratio based on discussions with different producers in Nollywood. This meant that only about 31.5per-

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cent of a film’s box office revenues in Nigeria got back to the producer to cover the costs of production. Putting this in context, only 3.6percent of film producers earned up to N31.5million from their films during the period, while 5.7percent made up to N15.75million. In addition, 8.6percent made up to N9.45million, 10percent made up to N7.88million, 12.1percent made up to N6.3million, 15.7percent made up to N4.73million and 22.9percent made up to N3.15million. Therefore, 77percent of the Nollywood producers during the period earned less than N3.15million with about 30.1percent earning even less than N320,000. This doesn’t reflect well for the recovery of production costs and profitability. Now that VAT is 7.5percent? With the new VAT rate of 7.5percent, film producers in Nigeria are going to need their films to gross more at the Box Office to break even on production costs. Specifically, because the new rate will erode producer’s margins as depicted in the revised sharing ratio below: Gross 100.00 Less: Entertainment Tax @5% (5.00) Value Added Tax @7.5% (7.50) Balance 87.50 Less: Share to exhibitors @ max 55% of balance (48.13) Less: Share to distributors @ 10% of balance (8.75) Share to producer 30.63 It is therefore important that filmmakers, the Government, and relevant stakeholders in Nollywood play a more active role in the business of the Nigerian Film Industry. The industry is plagued with a lot of challenges which include but are not limited to; understanding and enforcement of intellectual property laws, poor distribution channels / limited digital distribution, absence of a comprehensive and enforceable regulatory framework, inadequate financing and limited government fiscal incentives. Will the new VAT rate further increase these challenges? What next? It’s time for filmmakers and other practitioners in Nollywood to take advantage of any and every incentive available to them, to enable them to maintain their viability in the quest to grow Nollywood. There have been various outliers when it comes to Nollywood titles earning large Box Office revenues, with reports indicating that two films have made over N400million, one within the N300million range, four within the N200million range and five between N150million and N200million. But these are the exceptions, and Nollywood needs more films to generate better revenues at the cinema. Simply, the industry is not sustainable with only two Nollywood films having earned over N126million for their Producers from the cinemas, one more above N94.5million, another four above N63million and five more above N47million. Interestingly, just as the Finance Act, 2019 increases the VAT rate by 50percent, it also provides specific incentives for small and medium @Businessdayng

companies in Nigeria. These include: Small Companies: a. Exemption from the obligation to charge or remit value added tax (VAT) or file monthly VAT returns on its revenue. b. Exemption from taxes under the Companies Income Tax (CIT) Act. This includes CIT, tertiary education tax (TET), minimum tax or withholding tax (WHT) on their revenue. Medium Companies: a. Reduced CIT rate of 20percent Unfortunately, film producers may be unable to escape the charge of VAT on the sales of tickets for their films. This is because the producers do not sell directly to customers, but through exhibitors whose revenues exceed the N25million threshold and consequently must charge VAT. However, they may be able to enjoy the other incentives listed above. In addition, motion picture, video and television programme production, distribution and exhibition is a pioneer sector in Nigeria. Thus, filmmakers involved in the creation of digital movies, animations, videos, television programmes, commercials, online distribution and exhibition can potentially obtain the Pioneer Status Incentive and enjoy a tax holiday on their profits for three (3) to five (5) years. I guess the elephant in the room is, ‘are the filmmakers ready to regularize their financial records, set-up the appropriate business structures , register for taxes with the FIRS, maintain proper records, and file other appropriate returns to enjoy the above incentives?’ The enjoyment of every available incentive is even more important to filmmakers producing films for Cinema release, considering the COVID-19 pandemic and its potential impact on revenues for the foreseeable future. More filmmakers need to ensure that they set-up proper business structures to position themselves for bigger scale investment opportunities and arrangements especially as multinational players such as Netflix stamp their footprint in the Nigerian market. The sustainability of Nollywood is dependent on a balance of creativity and business. Otherwise, the Nigerian film landscape will continue to operate below its potential. Small companies as defined in the Finance Act, 2019 are companies that earn a gross turnover of N25,000,000 or less. Medium companies as defined in the Finance Act, 2019 are companies that earn a gross turnover above N25,000,000 but less than N100,000,000 To enjoy the CIT exemption for small companies, practitioners in Nollywood, whether filmmakers, costumers, lighting experts, sound technicians etc. would need to register and operate limited liability companies. This is because unincorporated entities e.g. individuals, sole-proprietorships, partnerships, are liable to tax under the Personal Income Tax Act which does not confer the same exemption. Adetoro is Manager, Consumer and Industrial Markets - Tax, Regulatory & People Services, KPMG Advisory Services

Wednesday 16 September 2020

BUSINESS DAY

insurance today

E-mail: insurancetoday@businessdayonline.com

Loss Adjusters seek better understanding of roles in claims handling for insurance business …upbeat on underwriter’s recapitalisation Modestus Anaesoronye

oss Adjusters under the umbrella body of the Institute of Loss Adjusters of Nigeria (ILAN) has emphasized the need for better understanding and appreciation of their role in the success of claims handling administration in insurance business. Reginald Egbuniwe made the call in Lagos during his investiture as the 12th President of ILAN held virtually and attended by chieftains of the industry within and outside Nigeria. On the contemporary place of loss adjusters, Egbuniwe said ILAN need to influence contemporary thinking about insurance and claims administration to ensure that all participants in the claims cycle take proper account of the value and benefits that loss adjusting services bring to the claims process. He said loss adjusters have a lot to offer to underwriters, the regulator, brokers and the insuring

L-R: Femi Hassan, immediate past president; Reginald Egbuniwe, newly sworn-in president; Odion Adeloje, administrator of Oath; Lebi Omoboyowa, past president, all of the Institute of Loss Adjusters of Nigeria (ILAN) during the investiture of Egbuniwe as the 12th President of the Institute in Lagos

public as they deal with the challenges of emerging risks of a rapidly changing world. “As Loss Adjusters, we have a deep understanding of information and relationships. We understand its vulnerabilities, its sensitivities

and of course its long term value, and, if we do it right, I know our contributions will be acknowledged and appreciated”. On the ongoing recapitalisation in the insurance industry, he observed that

the changes in regulation sweeping through the insurance industry as regards underwriters and recapitalisation are to protect the insuring public. Egbuniwe who leads ILAN for the next three years,

said all need an insurance industry with strong players who can fulfill their contractual obligations to their clients, both the insured and service providers like us.” Besides, he said the recapitalisation exercise was a “welcome development which was long overdue.” He noted that some underwriting companies might find meeting up with NAICOM requirement challenging, but believes that with creative thinking, a willingness to put the industry first and a positive attitude to change, our industry and the insuring public will be better off. Nwakibie Egbuniwe, father of the new President who remarked virtually charged members of ILAN to start to embrace the new normal of today in their delivery and operations to the insurance industry. He said “Automation, artificial intelligence, and data are all beginning to have an influence on the industry and invariably will impact on the loss adjusting sector.” He noted that the changes has come to stay and new

development will continue to disrupt and lap on the previous set order,. Nwakibie Egbuniwe said, “Of course, this is transformational, and we are only at that journey and the industry must embrace it,” “The daunting challenge of matching notwithstanding, Egbuniwe said can be achieved, and the sure way to get this done, “In my opinion … to follow and catch up with the emerging changes is by maintaining and upgrading one’s skill and knowledge.” Nwakibie further observed that the challenge is not for the new president to achieve all by himself alone, but for all to achieve, imploring them to support the president in his efforts in facing these challenges as they may affect the loss adjusting profession. For his son Reginald, who is also the managing director, Grand Metropolitan Associates, he said, “Three years term may seem long but when you have lived to my age you realise that the term is also short and must not be wasted.”

Law Union & Rock Insurance shareholders Africa Re shows strong performance H1, records 30% growth in profit accept new investor’s offer for shares Modestus Anaesoronye

hareholders of Law Union and Rock Insurance Plc have accepted an offer of N1.23 per share for every 50 kobo ordinary share they held from the new owner of the company, Verod Capital Management. The Board of Law Union and Rock secured the exit payment from its new investor in the quest to get full value for the investment of shareholders of the Company. Basically, the offer was secured from Verod Capital to purchase the entire issued share capital of the Company to which the Company signed a Transaction Implementation Agreement (“the TIA’) with Verod, through its investment vehicle, Kanuri LUR limited, which sets out the broad framework for the acquisition of the entire issued capital of the Company by Kanuri LUR. The agreement for the exit payment was reached by the Board and shareholders at Law Union and Rock Insurance 51st Annual General

Meeting and Court Ordered Meeting held at Muson Center, Lagos, where the Scheme of Arrangement for the proposed acquisition of the company was discussed. The development is due to the mandatory regulation by the National Insurance Commission (NAICOM), increasing the minimum paid up share capital of all insurance and reinsurance companies with a deadline of June 30, 2020. Based on this, the minimum paid up capital of Law Union and Rock was increased from N3 billion to N10 billion. Remi Babalola, chairman, Law Union and Rock Insurance said during the Court Ordered Meeting which followed the AGM that the Company initially explored merger discussions with other insurance companies and communicated initial recapitalisation plan to NAICOM. He however noted that they found that the shareholders of Law Union would not maximise shareholder value if such merger discussions crystallised, which led them to seek more optimal avenues for shareholders to www.businessday.ng

get better value for their investments in the Company, through acquisition by Verod, using the Kanuri LUR SPV. “Following negotiations with Kanuri LUR and further to advice from its advisers, the Board resolved to recommend the Proposal to the Shareholders for their kind consideration at a meeting to be convened by an order of the Federal High Court. The Board has further resolved to effect the proposal by way of a Scheme of Arrangement under Section 539 of the Companies and Allied Matters Act Chapter C20, laws of the federation of Nigeria 2004 as your Board believes that same will serve the best interests of both the Company and its shareholders.” The Chairman further stated that Kanuri LUR’s proposal formally stated its intention to acquire Law Union resulting in the Company being re-registered as a private company, noting that the proposal will be implemented through Kanuri LUR and its designated nominee, who will receive all the shares under the Scheme upon the Scheme taking effect.

Modestus Anaesoronye

he African Reinsurance Corporation (Africa Re) has recorded a gross premium income of $393 million at the end of the second quarter of 2020, compared to $431.87 million reported in the same period of 201 9, being 8.99 percent below prior year. This is as net profit of the first six months of 2020 was $18.72 million, outperforming the comparative period in 2019 (net profit of $14.39 million), an increment of 30.03 percent. While the impact from the Covid-1 9 pandemic was almost nil in underlying performance, the depreciation of some original operating currencies was the main cause of the decline. The year-to-date claims experience as measured by the net incurred loss ratio remains generally moderate at 64.66 percent compared to 68.03 percent in the same period of 2019. The improvement over prior year was largely due to

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the cumulative impact of the actions taken to improve the quality of the underwriting portfolio, the low economic activity during the lockdowns and favorable claim reserve development. Regarding Covid-1 9 related insurance claims, Africa has generally experienced very low mortality rates when compared to other continents. In addition, there are very few insurance policies in Africa Re’s portfolio, which covered the business interruption for modifiable and infectious diseases. As such, our claims experience has not been affected significantly either by mortality or property/casualty losses arising from Covid—1 9 pandemic. As a result, the combined ratio at the end of June 2020 stood at 98.12 percent, outperforming prior year. The net underwriting performance resulted into a profit of $5.47 million compared to a loss of $14.32 million in the same period in 2019. Investment income for the six months to 30 June 2020 was at $18.59 million, a significant improvement over the loss @Businessdayng

recorded in the first 3 months of 2020 (loss of $6.51 million). The positive performance was driven by a recovery of financial markets especially the global equity markets. Although, the year-todate performance of $18.59 million is below the comparative period in 201 9 (investment income of US$31.54 million), it is much better than the massively negative scenarios anticipated at the end of the first 3 months of 2020 during the early days of the Covid-19 outbreak. While commenting on the unaudited financial performance at the end of the first half-year of 2020, Corneille Karekezi, the group MD/CEO of the Corporation, remains optimistic for the outlook of 2020. Karekezi stated that, “Although, there is still uncertainty surrounding the full impact of the Covid-79 pandemic on businesses and economies, the Corporation’s financial performance for the first six months is generally positive and we remain cautiously optimistic for the rest of the year, barring any unforeseen major losses.“

Wednesday 16 September 2020

BUSINESS DAY

Wednesday 16 September 2020

BUSINESS DAY

INSIGHT

Changing the narrative during and post COVID-19 for Nigerian international health travelers DOROTHY JEFF- NNAMANI

nternational health travel must not be confused with having an unplanned surgery in a foreign country due to an unexpected illness or injury. International health travel as medical tourism means intentionally going to another country for medical care. In all its definitions, it can be agreed that medical tourism occurs when one travels outside his/ her place of residence in search of health or medical care for whatever reason. It could either be inter-state in a country or from one country to another. In recent times, medical tourism has been considered as a worldwide multibillion-dollar phenomenon that is expected to grow considerably in the next decade. Be it for general wellbeing, cosmetic surgery or lifesaving procedures, people are expected to traverse from developing countries to developed countries to access health care mainly driven by various factors such as affordability, easy access, quality and sometimes just a simple getaway. Patients from these developed countries such as United States, United Kingdom and Europe who seek health care in less developed countries such as India and China are more interested in low cost healthcare and no waiting period. As it has been widely reported, the cost of healthcare in the US is the most evident key factor that encourages US citizens to seek health care outside the country. This has inevitably proven that medical tourism is the norm for cutting and lowering costs which has continued to excessively soar. In this part of the world, Nigeria, the case is different. A multitude of reasons conspire to push patients out of the country for health care. Nigerian authorities have stated that the country is losing more than $1 billion annually to medical tourism as tens of thousands of Nigerians travel abroad in search of the best treatment. Whether it is cost (financial and non-financial), access (physical and skilled workforce) to quality of care, there is an unspoken increasing preference to travel overseas for health care at the slightest opportunity or just for the pleasure of it. Many Nigerians are known to have a GP abroad who tends to their every need, even to a negligible cough. Just before the COVID-19 pandemic, a friend had informed me of his travel plans, solely for his annual medical check-up. Another friend also stated that after he was diagnosed of hernia and was scheduled for surgery in Nigeria, he opted to fly out to see his GP for a second opinion. These and many more are clear rea-

sons that attribute to the loss of over $1billion in medical tourism in Nigeria; while International Medical Travel Journal and Global Medical Travel and Tourism estimates that inbound medical tourism generates a whopping $3.5 billion of revenue for the USA. During the recent commissioning of a Federal Medical Center in the Northern part of Nigeria, the Medical Director identified the following as common challenges faced in running the facility – ‘lack of an X-ray machine, scarcity of potable water, shortage of consultants and indiscipline amongst staff’. I dare to say that these challenges can be ameliorated. Although it has been argued that in a perfect world, people should need not travel in search of medical care, either way, both antagonists and protagonists of medical tourism can agree that the international health travel is a thing of choice and people should not be forced into making those choices. It is worthy to note that a major factor responsible to this choice is the ease of travel. Our increasingly globalized world has made international travel faster, cheaper, and more accessible. Even though the financial implication to travel abroad is a bit high priced, families and friends usually rally round the patients to offset cost of procedures in foreign lands. Some people who can afford the travels may even see it as a tourism opportunity to explore the foreign lands and recuperate after their procedure - using one airline ticket to kill two birds. COVID-19 has devastatingly affected several medical travel destinations, making countries to look inward in correcting the deficiencies that promote undue seeking of medical treatments abroad and thus reducing the high number of billions lost annually over the past decades. Since the lockdown and travel restrictions, Nigerians at home have been forced to patronize the health sector in its present condition. With the light beamed on the industry, health care professionals have had to standup to the challenge in their different capacities. While we hear stories of people visiting hospitals in the country for the same reasons they would have travelled abroad cosmetic surgery, brain surgery, broken arms, sprained ankles, heart attacks and other medical emergencies, there is no available data to compare the country’s health indices in the past five months before the lockdown and travel restrictions. However, the industry recorded some technological advancements especially around Telehealth, knowledge sharing through remote medical applications with other health experts outside the country and digital subscription for health

insurance. As simple as these may seem, they are progress made in pushing the industry in the right direction, which is part of the solution for the common reasons why Nigerians readily travel abroad for healthcare. If the health industry and consumers of care can hold each other accountable, seeking health care abroad would drastically reduce over time. Over 99 countries recorded confirmed cases of COVID-19 leading to governments banning flights to certain countries as well as restricting travelers from affected regions and changing visa requirements. These restrictions and virus fears have greatly impacted the travel industry negatively. Countries, businesses, and healthcare providers cannot just fold their arms and wait for things to get back to normal. The Nigerian government in reaction released 100-billion-naira health intervention fund through the CBN leading to opened opportunities for new leadership, collaboration, growth, and infrastructural development in the industry. Reducing the outflow of undue international health travel and limiting capital flights may be influenced on how much our country was affected by the pandemic, what the government did or did not do, and the post COVID-19 view of risk by the potential medical travelers in the next few years. Following the relaxation of lockdowns, many countries have started relaxing the travel restrictions. Airlines are seen resuming international travels and many people are looking to commence travelling amidst the strict biosecurity measures, international travel guidelines and territorial restrictions. Will people still want to fly long distances? Travel will get more expensive, inconveniencing in terms of time zones, connections for long flights, etc., pre-travel preparations, requirements, and longer lines in the airport for screening, reduced inflight movements will be quite discomforting and post travel quarantine. WHO still warns that sick travelers and persons at risk including elderly travelers and people with chronic diseases or underlying health conditions, should delay or avoid travelling internationally to and from areas with community transmission. It is reported that COVID-19 appears to be deadlier than seasonal influenza, but far less deadly than SARS, MERS or Ebola, with a death rate average of 3.5% that could drop to 1%. However, there is still much we do not know about this disease. Many medical travelers fall into the high-risk categories and so are mostly at risk. The risk of severe disease gradually increases with age starting from around 40 years. It is important that adults in this age range protect themselves and in turn protect others that may be more vulner-

able. According to the World Economic Forum (WEF), “Pandemics top national risk-management frameworks in many countries and each outbreak of a potentially dangerous infection prompts authorities to ask a rational set of questions”. Countries must then strike a fine balance between protecting health, preventing economic and social disruption, and respecting human rights. The American CDC is the first to openly admit that the effects of the pandemic could last into 2021, and if this is the case, the fall out effect of international medical travel could be significant. Consumers of health care and potential medical travelers in Nigeria needs to be encouraged to use available health providers in the country from 2021 going forward as well as to encourage both new and existing customers to pool funds in the industry which would lead to hospitals and clinics having more income and customers locally. Not planning now for the future may be a major catastrophic and tactical mistake and this is where health insurance comes into play. Health insurance guarantees peace of mind that one can access medical care when you are at home. This significantly takes care of issues of access and affordability of health care while reducing undue seeking of health care abroad. International health insurance will serve individuals who have real health needs abroad especially regarding cases that cannot be managed in the evolving and growing health sector in the meantime. Identifying this category of people and market will help in protecting individu-

als from the cost of both travel and unsustainable purchase of health care abroad. Hospitals, clinics, and health maintenance organizations (HMO) may be able to use modern marketing techniques to help encourage new and returning customers. But they can only do so if the customers feel safe and putting patients experience as top priority. Patients on the other hand must see themselves as consumers of health with a sound knowledge of what they are looking for in health care, local or abroad. According to Price Waterhouse Coopers (2016) report, 60% of the over $1 billion dollars spent on medical tourism by Nigeria are based on four key specialties namely: oncology, orthopedics, nephrology, and cardiology. This figure may have increased given that the medical tourism business has witnessed a boost in the last 3 years. With COVID - 19 in 2020, cases that fall into these specialties have been forced to stay back and seek health in the country. The question then is, how can we sustain this or at least reduce the preference for health care abroad significantly? Since the pledge by African Union countries (at a conference in Nigeria’s capital Abuja) to set a target of allocating at least 15% of their annual budgets to improve the health sector within their borders, Nigeria is yet to meet that budgetary allocation. In 2018, our health budget is approximately 4% of the 2018 proposed national budget and these allocations to the health sector continue to decline. This leaves a huge deficit in government spending for health and it is no wonder that public spending has failed to address abnormalities in the sector. Nigeria has relied on donor funds for years and unfortunately these funds are also steadily drying up. A key element of the budgetary allocation for health that is greatly challenged is the 1 percent of the

Consolidated Revenue Fund amounting to N51.22 billion which has been earmarked for the Basic Health Care Provision Fund. Meanwhile, Capital flight due to international health travel is five times more than this much needed allocation. As the Managing Director and Chief Executive Officer of a Healthcare organization, I have had the opportunity to interact with businesses and industry leaders outside the health sector. Evidently, to successfully impact and improve any institution, irrespective of the size, - leadership plays a major role. The health industry needs its sector players to tackle and promote that which is obtainable within the country instead of seeking international health travel. Such quick wins will support the pooling of funds into the industry, optimize the opportunity that COVID-19 presented and remedy the general perception of

the industry which is sadly very poor. For many potential health travelers, access to skilled workforce is pertinent. While funds can tackle the pervasive lack of infrastructure, the industry players and private sector can bridge the gap in lack of human resources of health workers compared to their global counterparts through Professional development. This will help leaders to retool themselves across the sector. They must be able to communicate openly, listen to people and operate in a more fluid environment. Health care teams must be nurtured and provided with relevant trainings to carry out their roles for the good of the patient. In as much as brain drain continues to pose a challenge for the sector, the World Health Organization

classifies Nigeria among the 44 percent of nations that have less than one percent 10 of physiciansper-1,000 population as of 2010. It is reported that the number of Nigerian trained doctors practicing in the United States and the United Kingdom stood at 2,392 and 1,529, respectively. Industry leaders must create professional development programs that will reattract exchange of knowledge with other global counterparts and offer certification opportunities for continuous skill and personal growth to limit this brain drain. This will be aligned with better rewards and incentives for professionals who build skill and capacity for growth and in-turn attract more consumers to their facility. The technical/academic expertise of a health professional must be matched with professional expertise which comes from developing various capacities needed to adapt to the many more dramatic changes forecasted in the healthcare space. Incidentally, it has been reported that some of the best doctors in the world who have made remarkable contributions in the field of medicine come from Nigeria (Akande, 2015). Healthcare leaders can invest in the same leadership capabilities at home and especially now that the Coronavirus pandemic has challenged how sectors operate in different economies. Remote global healthcare developmental programs are a great resource for developing new learnings. For facilities, accreditation will help not only to improve the standards of hospitals and clinics but will offer safety, comfort, and better patient experience. This confidence can be even stronger if accreditation is followed by an affiliation with reputable hospitals or health care systems in industrialized countries. Once healthcare providers are accredited and become a part of international referral networks, they can be appropriately rated for risks which provides sense

of safety for patients. For those travelling abroad for healthcare who are concerned with quality, there are two major components of the service quality in the health care sector described as technical or mechanical quality. This is at the core of a patients’ diagnostic algorithm and could be serviceable or functional quality which is measured by the service offered in the healthcare centers (such as the services of staffs, nurses and, most importantly, the doctors towards the patient and their assistants). In recent years, the Nigerian health system has experienced numerous strike actions involving doctors, nurses and allied healthcare workers coupled with the negative attitude of health professionals to patients and medical negligence among health professionals. These in turn unfortunately encouraged medical tourism outside the country. This negative attitude influences the service quality which is a vital part in the preference of consumers of health in seeking care abroad. Industry leaders must hold themselves accountable and empower consumers of care with patients experience as top priority. Affordability also influences the decision to travel abroad mostly for those travelling from developed to less developed or developing countries. Health care is cheaper in developing countries. However, due to the poverty rate, this affordability can be said to be relative. Dynamic initiatives to offer health insurance even at the lowest level of the social strata including public health programs that support detection of diseases at the early stages to prevent huge financial loses when treating complicated cases is key. When trying to save lives, families have had to go to any extent selling their lands to seek care abroad. The richer social class are forced to spend significant amount of their life savings. Paying huge sums of money has no direct correlation with quality of

care. Health insurance helps to provide the affordability within the community. It is reported that the primary reason that clinics and hospitals in the developing countries can lower their prices is directly related to the nation’s economic status. Explaining further, the direct correlation with per capita gross domestic product of the country is observed, which is a proxy for income levels. Consequently, surgery prices are from 30% to 70% lower in developing countries when compared to the US. Globally it was a manufacturing economy before now; in present times it is a service, information, and creative economy. Daily, we are confronted with new and possible ideas to help drive the health sector. Some of the ideas are coming from other sectors and will need a platform for collaboration. We need leadership with broad functional orientation to promote intersectoral collaboration, explore opportunities, make other sectors real partners and stakeholders to drive the flow of revenue and resources and bridge infrastructure gap. Partnerships are crucial for sector growth especially in a technology advanced world as we are today, of which the health sector yearns greatly for it. Other targeted collaborations can help ensure that unnecessary barriers are removed or relaxed to alleviate pressure posed on vulnerable groups like the retirees for health care. These group fall into the risk group who have had to make the difficult choice to leave home in search of health care abroad or spend their entire retirement benefit when seeking health care. Can the Nigeria health sector boast of leveraging on advancements in the face of COVID-19? Many healthcare professionals may not understand how simple technology or refined processes can bridge existing gaps and infuse growth in our sector or adopt evolving healthcare trends. For example, Telehealth offers a revolutionary approach to better patient care and global access from home for people who seek better care or improved hospital visitations when necessary by simplifying and improving processing/visit times where practical. It is therefore a sector leadership essential to lead discussions on new ideas and partnerships for the industry to redirect the over $1 billion naira lost through undue international health travel and grow the industry especially as the present government is bogged with competing needs from different sectors in the face of limited resources and the COVID-19 pandemic.

Dorothy Jeff-Nnamani, a medical doctor who runs Novo Health Africa.

Wednesday 16 September 2020

BUSINESS DAY

MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

How OnePort 365 facilitates trade through investment in logistics infrastructure To grow the volume of non-oil export from Nigeria requires investment in logistics infrastructure, which is currently in short supply. However, logistics firms such as OnePort 365 are doing extraordinary things to ensure the country takes its rightful place in export business, writes AMAKA ANAGOR-EWUZIE

he National Bureau of Statistics (NBS) recent statistics show that the value of export trade in the first quarter of 2020 stood at N4.1 trillion, showing a decrease of 14.4 percent relative to the fourth quarter of 2019, and 9.98 percent decline compared to the value recorded in the first quarter of 2019. Though, the slowdown in 2020 can be partially attributed to the outbreak of Covid-19 pandemic, but it has become worrisome that the country is experiencing decline in export. Specifically, there has been a steady decline in export in the last three quarters. Also, the statistics show that Nigeria is at a point where there is need for greater participation in international trade to lift the teeming population and economy from underdevelopment. Therefore, it is now imperative for policy makers and visionary organisations to take steps that will facilitate export trade especially as it relates to non-oil export. Interestingly, one organisation that has taken the initiative of promoting export business in Nigeria is OnePort 365. Headquartered in Lagos, this Nigerian firm is facilitating export by providing inland transportation, shipping, warehousing, Customs brokerage and marine insurance services, through its revolutionary web-based platform. Apart from providing a solid platform that is geared towards growing export, OnePort 365 has mastered

the Nigerian market while at the same time maintaining international expertise and reach. At present, it has an extensive network of vendors accessible via its platform that are offering vetted services to a broad array of clients that cut across Nigeria and beyond. How OnePort 365 operates OnePort 365 model was largely inspired by inefficiencies in the African logistics landscape. This includes the cost associated with moving cargo within and outside the continent because Africa is seen to be the most expensive continent to ship from and to. Meanwhile, as the continent makes moves to deepen internal and external trade through the establishment of the Africa Continental Free Trade Area, there is greater need for logistics efficiency. Nigeria, which is the largest economy on the continent, has been one of the worst hit and this has truncated the prospect of non-oil trade over the years. Interestingly, the OnePort 365 platform is a homegrown, web-based solution that streamlines and optimises companies’ end-toend freight processes and is accessible globally. It offers services by using technology to structure and automate freight management processes, which have been traditionally delivered through cumbersome, manual methods in the past. Findings show that OnePort 365 gives individuals and corporates operational efficiency through greater oversight and control of their

Hio Sola-Usidame, lead partner, OnePort 365

shipment and freight forwarding processes. Clients are able to scale their trade operations while minimising the associated cost of scaling. In the last eight months, OnePort 365 has processed over 13,000 tons of containerised cargo through its platform. These requests came from clients who used the OnePort 365 online platform and those who were more inclined to traditional methods of face-to-face interactions. The latter are assisted by client service officers who use the online platform to execute the clients’ requests satisfactorily. “Exporters and importers who go on the online platform have the opportunity of accessing a variety

of services including inland haulage services, shipping, warehousing, Customs brokerage and marine insurance services, all at one spot and without the usual additional stress of running between different physical locations to submit and process documentation for each distinct service,” said Hio Sola-Usidame, lead partner, OnePort 365 at a recent interview with newsmen. OnePort 365, according to him, has approximately 40 warehouses in its network that are available on pay-as-you-go basis, which means exporters and importers pay only for space and time used as opposed to an annual payment, which results in avoidable waste of

Contribution to national imperatives Analysts believed that digitisation of processes are critical to solving many of Nigeria’s age-long problems, especially in the area of trade facilitation. By simplifying import and export procedures, providing quick access to quality and vetted cargo transport services at competitive rates, offering real-time tracking of freight for enhanced physical security and tailored Customs clearance services, the company is significantly fast-tracking the growth of international trade.

“Digitalisation is the next big step for Africa. In five years, platforms that offer online bookings will become the minimum standard in the sector. It would become easy to book export/import services, just the way we currently book flights via online travel agencies,” said Sola-Usidame. He said that it is fast becoming the trend in other climes, including the United States, India and Europe, where online based digital platforms are fast gaining ground in the freight forwarding business. “We see more consolidations in varying forms among freight forwarders, as the industry realises the strength in collaboration using technology. This could also further standardise processes in logistics operations,” he added. According to the World Bank, trade is an engine of growth that creates jobs, reduces poverty and increases economic opportunity. Over 1 billion people have moved out of poverty because of economic growth underpinned by open trade since 1990. Industry stakeholders however believed that it is quite commendable that in the midst of a very challenging economic climate, a Nigerian company has created a platform that is supporting an open, easily accessible, predictable process that deepens trade. This, they say, requires some encouragement from the government by way of improving basic infrastructure to help transport infrastructure.

perative to trade facilitation as it will enable shippers in the hinterland to import and export without having to travel to Lagos seaports or other seaports. For instance, with the Kaduna Port, importers in any part of the world can indicate it as Port of Destination for their goods instead of using seaports,” Bello said. He said that businessmen from the north can also export through Kaduna Port without having to go through seaports. In terms of movement of goods, Bello has assured that the Federal Govern-

ment through the Transport Ministry was working on rail connection between the dry ports and seaports to ensure smooth cargo movement. On the Truck Transit Project (TTP), he disclosed that progress is also being made in respect of the Lokoja project as the Kogi State Governor has concluded arrangements to pay compensation for the council to advertise PPP project. Bello further disclosed that the Federal Capital Territory, Abuja, will be donating 108 hectares for the Truck Park along Abaji local government area.

resources. Particularly, an exporter or importer who needs a warehouse for a few months can specify the length of time he/she wants to use, and a specific warehouse from the variety can then be engaged for the service. Also, the online platform is available to individuals residing in Nigeria as well as around the world and it provides access to several vendors and pricing per vendor across different services it offers. In terms of logistics, OnePort 365 offers real time tracking and monitoring for shipments that is being processed from anywhere in the world. The system is technology based, and clients can simply log on to view their cargo’s real-time location and progress throughout the period of handling. These processes are orchestrated online without piles of contract paperwork, spreadsheets and printed documentations.

Kano boosts dry port project with N2bn infrastructure amaka Anagor-Ewuzie

assan Bello, executive secretary of the Nigerian Shippers Council (NSC), has said that the Kano State Government has demonstrated keen interest in the Dala Inland Dry Port in Kano by committing about N2 billion worth of infrastructure necessary for the port project. According to him, the state government has already awarded contracts for the infrastructure development. He disclosed that the Dala

Inland Dry Port, which is the concessionaire of the dry port project, has gotten technical partners, a development which is expected to fasten the pace of the project. Bello, who was not pleased with the pace of work at the Isiala Ngwa dry port in Abia State, expressed concern that so much was yet to be done on the project. Recall that worried about the slow pace of work on some of the Inland Dry Ports (IDPs) in the six geo-political zones of the country as a result of paucity of funds, the Council had last year www.businessday.ng

considered assisting concessionaires to attract investors and funding. The dry port projects include the Kaduna, Kano, Jos, Isiala Ngwa in Abia State, Maiduguri, Ibadan and Benin in Edo state. Currently, apart from the Kaduna Port, which started operations about two years ago, the rest of the Inland Port projects were yet to be completed by the concessionaires due to lack of fund. However, the Council had approached the Commonwealth Enterprise Investment Council (CWEIC) to

be involved in the search for interested investors for the port projects. At that time, Bello led the management team of the Council to attend the Advisory Council Meeting of CWEIC held in Lagos last year during which a lot of business opportunities across and beyond Nigeria were laid bare. Aside from Dry Port projects, the Council is also interested in getting investors for other transport infrastructure projects such as Truck Transit Parks (TTP) and Border Information Centres. “The dry port project is im-

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Wednesday 16 September 2020

BUSINESS DAY

BANKING

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

Banking system liquidity at N450bn exceeds regulatory benchmark in May Stories by HOPE MOSES-ASHIKE

igeria’s banking system liquidity moderated but remained buoyant at N450billion in May 2020, exceeding the Central Bank’s benchmark of N313.8 billion. This was due to the net effects of the Loan to Deposit Ratio (LDR) policy and the Cash Reserves Ratio (CRR) debits on banks aimed at strengthening credit to other sectors of the economy. The CBN’s economic report for the month of May 2020, revealed that there was a net decrease in liquidity, with the industry position closing at an average of N368.90 billion compared with N518.84 billion in April. Withdrawals from the banking system arose from provisioning and settlement

of foreign exchange purchases, auctioning of CBN Bills, FGN Bonds and Nigerian Treasury Bills (NTBs) as well as CRR debits. The industry liquidity position was moderated through the reduction in repayment of matured CBN bills, Nigerian Treasury Bills (NTBs) and fiscal disbursements to the three tiers of Government.

A classification of the various liquidity instruments showed open market operations (OMO), primary market activities and standing facilities as the main sources. Despite the downturn in the global financial markets, oil market challenges, and capital flows constraints, the domestic financial sec-

tor remained stable in the review period, as shown by key financial soundness indicators. The health of banks was generally sound although their asset quality, measured by the ratio of Non-Performing Loans (NPLs) to industry total outstanding loans, at 6.5 per cent in May 2020, sur-

passed the 5.0 per cent prudential benchmark. At 14.9 per cent, Capital Adequacy Ratio (CAR) remained unchanged from the level at end-April and exceeded the regulatory benchmark of 10.0 per cent. The liquidity ratio, at 37.8 per cent, has continued to decelerate in response to the implementation of the LDR policy, but remained above the 30.0 per cent threshold. Private sector credit in May was driven largely by other depository corporations’ credit; hence, reinforcing the effectiveness of the Loan-to Deposit ratio policy of the regulator. Bank credit to the private sector grew by 8.1 per cent in May compared with 7.3 per cent in April. This was driven, largely, by other depository corporations’ credit. Sectoral credit utilisation by the ‘other sectors of the economy at N18.63 trillion, rose by 0.53 per cent over its level at end the end of April

2020. Analysis of the composition of the credit indicated that industrial and services sectors constituted 37.5 per cent and 38.5 per cent of the total allocation; a slight decline from 37.3 per cent and 38.4 per cent a month earlier. Agricultural and construction sectors accounted for 4.6 per cent and 4.5 per cent in May 2020, respectively, compared with their respective shares of 4.7 per cent and 4.5 per cent in the preceding month. Consumer credit outstanding, at N1.34 trillion, declined by 11.0 per cent below the level in April. At that level, outstanding consumer credit constituted 8.1 per cent of claims on private sector. The decline was due to the lull in economic activities caused by the COVID-19 pandemic. The breakdown of consumer loans indicated that personal loan advanced to customers with low risk of default dominated consumer credits.

Sterling Bank pioneers work-study for secondary Ecobank advocates private sector school leavers, offers 65% scholarship participation in funding education

n a continued effort to secure a knowledgebased future that is diverse, Nigeria’s Sterling Bank Plc has recently launched the “Grow With Sterling Initiative”. The initiative which finds its roots in one aspect of the Sterling HEART Sectors- Education, seeks to contribute to the educational development of young Secondary School Leavers. Understanding that an investment in knowledge pays the best interests, the bank recently signed an agreement with Washington DC-based Nexford University by sponsoring secondary school leavers in Nigeria to earn international undergraduate degrees under a maximum duration of three years. To also gain hands-on expertise, they will be concurrently engaged by Sterling Bank to serve in specific capacities in a work-study arrangement. According to a statement made available by Temi Dalley, chief human resources officer of Sterling Bank PLC, the program is part of the

Bank’s new-to-the-world opportunities for young Nigerians to get access to quality and affordable education while gaining cognate work experience. The statement further noted that the financial institution will pay not less than sixty-five percent tuition fee of the learners admitted into the program, marking a significant investment in the education of young Nigerians. In the statement, Dalley was quoted as saying, ‘Grow

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with Sterling’ initiative is a co-branded social impact program that will enable Nigerian secondary school leavers to further their education under a unique partnership arrangement with the Bank as the financier and Nexford University as the learning provider.” Listing other benefits, Dalley added that learners will get complimentary access to 20 percent tuition discount, free enrolment on online learning platforms amongst other things.

takeholders at Ecobank digital series have advocated more private sector investment, tax concession, import duty waivers for educational equipment and special intervention funds to revamp the sector in the face of the negative impact of the COVID-19 pandemic. The stakeholders comprising public and private sector participants who spoke during the Ecobank Digital Series titled “Education in Nigeria - The role of private investment” noted that education is a critical sector that contributes to human capital development and sustainable future for the country and must therefore not be overlooked. They called on the private sector to invest more in education in the form of corporate social responsibility (CSR), scholarships, provision of palliatives, support to reconstruction and rehabilitations of schools across the country. In his presentation, Professor Olabode Ayorinde,

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Keynote speaker and ProChancellor Achievers University, stressed the need for government at all levels to place high priority on the education sector when providing intervention funds, urging commercial banks to also lend more to this sector at low interest rate. According to him, “The private sector has played a significant role in education development. However, funding has been a major issue. A critical analysis shows inadequate infrastructure, lack of equipment and teaching aids, high teacher to student ratio, all of which requires a loan facility to solve. Regrettably, we see the government and its agencies providing intervention funds @Businessdayng

to the aviation sector, agriculture, creative sector without considering the education sector.” On his part, Suleiman Ramon-Yusuf, of the NUC, attributed the poor state of the nation’s economy to the inability of the private sector in making the right impact on the education sector, noting that endowments, scholarships and bursaries would create access for schools to admit more students. He disclosed that the NUC will continue to provide an enabling environment for education and learning to thrive in the country, urging the private sector to invest more in human capital development, while limiting undue interference from the investors. Also on the Ecobank Digital series platform, Muda Yusuf of the LCCI, called for government’s intervention in the education sector, especially at the foundation level, maintaining that it was not easy to sustain the education sector with loans from the commercial banks because of high interest rates.

Wednesday 16 September 2020

BUSINESS DAY

FINANCIAL INCLUSION

& INNOVATION

‘All signs point to fintech, e-commerce as standout sectors during and post-pandemic’ Jadesola Opawumi is the Co-founder/CEO of Spredda, an online Marketplace and PayQart, a financial technology company focused on providing consumer financing at merchants’ checkout both online and in-store. In this interview with BusinessDay’s Endurance Okafor, she shares insight on how Nigerians are adjusting to the new normal of online shopping and digital payment. Excerpt:

Tell us about yourself think I am slowly becoming a serial entrepreneur. Over the years my passion has largely revolved around Fintech and E-commerce. I am currently the co-founder/CEO of PayQart, a financial technology company focused on providing consumer financing to shoppers at merchants’ checkout. I am also the Co-Founder/CEO of Spredda, an online marketplace that specializes in offering a variety of instalment payment options to shoppers. Having worked in consumer finance for over a decade, I have gained extensive experience in various aspects of lending covering areas such as product development, loan origination, underwriting, loan structuring and collections e.t.c. My expertise has always been in developing innovative financial products around everyday needs of consumers and work out a way to leverage technology to deliver it, make it more streamlined, more efficient and more profitable. I love doing startups. The work is very challenging, diverse and rewarding. It is exciting to be able to build something new from the ground up and find other people who want to join you on your journey to deliver value to customers and solve global problems. How do you think the coronavirus pandemic affected Nigeria’s fintech and e-commerce industries? The ongoing pandemic has no doubt tested the resilience of financial institutions. Both traditional banks and digital lenders have taken a major hit as defaults on loans have increased significantly. Rising unemployment and uncertainty has led to consumers being unable to pay back their existing loans. Fintechs in lending have drastically reduced fresh disbursements and hardened their risk controls as well as loan approval requirements.

What has become abundantly clear during this unprecedented time is that many digital lenders were not prepared to respond quickly to the demand for loans, the desire for payment deferral or the potential for future loan demand. On a positive note, Fintechs in payment and e-commerce financing have enjoyed significant growth and maybe doing better than preCOVID. Nigerians who used to be sceptical about online shopping and payments are increasingly adjusting to their new normal. Categories such as generators, Smart TVs, Washing Machine and laptops picked up serious steam as Nigerians adjusted to stay-at-home conditions. As consumer shopping behaviours are evolving, Brick and Mortar retailers are investing in e-commerce to access new markets and improve customer experience. Fintechs such as Paystack and Flutterwave recently launched retail solutions to help retailers easily set up e-commerce stores and collect payments online. The solutions are simple enough that retailers who are not necessarily tech-savvy can create their online store straight from the app and the best part is that it’s free to use unlike if a retailer were to join a marketplace. With skyrocketing prices and low purchasing power due to the economic downturn, consumers and retailers have also accelerated the demand for instalment payment options known as buy now, pay later or BNPL. While BNPL service used to be more popular with in-store retail, providers like Payqart and Credpal are redefining instalment payment through checkout financing for online shopping. What are the opportunities that exist for e-commerce and Fintech companies amid COVID-19 pandemic? Regardless of the sector, every company needs to be in an intensive learning mode. The last few

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lenders may soon realize that the historical data they use in making underwriting decisions could be less reliable in today’s environment and they will have to adjust their credit risk models.

Jadesola Opawumi

months have become a landmark for shifting consumer behaviours and the pandemic is serving as a catalyst for change. E-commerce companies have the unique opportunity to study these shifts in order to learn what value means to their consumers, what products and categories they are favouring, what kind of price sensitivity they have and so on. This will enable them to package and design offers that really respond to the psychological mindset of the consumers. Today, we see consumers selecting more affordable alternatives; prioritizing functionality over expensive name brands. Ecommerce companies that focus on curating their merchandise will see more conversion than the ones who do not. All signs point to fintech being a standout sector during this pandemic and beyond. The sector is well-positioned for the new global reality that is starting to emerge. Fintechs have the opportunity of innovating to create new products that address the rapidly evolving economic environment. Although, it’s imperative they critically reexamine their business models. Digital

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What has been your experience as a female founder of tech startups? It’s been a ride. Trying to build anything from scratch is always challenging with a lot of learning curves. Navigating two very complex industries like Fintech and E-commerce in Nigeria with very few visible female role models has not been an easy feat. It takes guts, an unusual kind of resilience and the right team who wants to win as much as you do to succeed as a tech startup founder. With digital technology businesses, there are so many ‘’behind the scenes’’ that nobody talks about. Consumers only interact with the final product or service. I have been fortunate to have good mentors and a strong support system who help out when it gets tough. However, I have found that being a non-technical female founder of tech startups has been more of an advantage than a disadvantage as many people would like to believe. This allows me to see our products and services from a consumer’s vantage point and I can’t overemphasize how important this is. Women have strong innate abilities and intuitions and I’ve learnt to make them work for me. I’ve also learnt to play to my strength and focus more on the business side of things. Overall, it’s always rewarding when you see your product or service solving critical needs for consumers. What are some of the challenges that are daunting the growth of startups in Nigeria, especially those in the technology space? It may sound cliche, but some of the top challenges facing tech startups in Nigeria are mostly centered around funding, infrastructure and

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talent. Access to funding has always been a constraint to the growth of many startups and this is not peculiar to Nigeria alone. Why do you think Nigeria has lagged its peers in financial inclusion drive and what are your recommendations? Nigeria remains an exciting market for digital financial service innovation and has been growing at an impressive rate, but digital financial inclusion still has a long way to go to truly reach the low-income and unbanked segments. Nigeria’s unbanked population have largely been excluded from access to fintech products because as a sector, we are still far from finding productmarket fit to reach these underserved population and facilitate their financial lives in a holistic way. For many years, the delivery of financial services has been done the same way. You go to a financial service provider to save or access a loan product and once the exchange happens you are left to get on with life. While enlightened and educated people may tolerate this transactional business approach, it is unlikely to work with the unbanked. The unbanked population is characterized by the low level of trust and there has to be a deliberate attempt by financial service providers to gain their trust. It is not like they are not ‘’banking’’, they just trust the informal methods that have worked for them for centuries better. They save in less formal ways e.g. individually at home, or collectively through savings groups and also prefer to carry out their economic activities using cash. Another reason for the weak uptake of digital financial services is because fintech innovators concentrate in the urban areas. This may be because the products and services they offer are designed for skills, resources, and access points that most unbanked don’t have.

Wednesday 16 September 2020

BUSINESS DAY

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

NRC, shippers count loses over Apapa haulage shut down MIKE OCHONMA

Autochek owned by Ex-Cars45 CEO acquires Cheki Nigeria, Ghana … to transform auto buying, selling experience for consumers MIKE OCHONMA Associate Editor

utochek, the automotive technology c o mp a ny re cently founded by Etop Ikpe, former Cars45 chief executive officer, has announced the acquisition of Ringier One Africa Media-ow ned (ROAM) vehicles marketplaces of Cheki operations in Nigeria and Ghana. The new platform will relaunch by the end of 2020. BusinessDay checks on the development reveals that Autochek plans to use technology backbone to transform the automotive buying and selling experience for African consum-

ers, by creating a single marketplace for consumers’ automotive needs, from sourcing and financing to after sales support and warranties, having identified a number of challenges in the car purchase market on the continent,. Despite the average price of used cars in Africa standing at $5,000 (almost three times the current GDP per capita – $1,720), with credit penetration in the auto market at less than one percent, almost every used car is bought without any institutional finance. In a telephone chat with our reporter last Monday, Etop Ikpe confirmed that Autochek aims to address this issue by making auto financing more accessible to consumers across Africa,

as the new company is also now working to standardise solutions around warranties and maintenance, to enable dealers to offer these services more readily to consumers. ROAM, Cheki’s parent company, has transferred ownership and operational control to Autochek, and all Cheki Nigeria and Cheki Ghana outlets will now be rebranded as Autochek. The leading cars marketplace Cheki Kenya remains fully owned and operated by ROAM Africa. Building on Cheki’s 10 years of progress with a network of more than 500 paying dealers, Autochek is set to introduce additional technology solutions that will make it easier for dealerships to service their

customers better. Speaking on the acquisition, Etop Ikpe, Ceo of Autochek says, “We are really excited by this new opportunity to drive the African automotive space forward. Our aim is to create a onestop shop for consumers’ automotive needs, embedding technology at every stage of the process, thereby making the journey of car ownership easier for everyone. Our goal is to continue the great work (of the Cheki team), as well as expand operations into other African territories from 2021 onwards.” The current Cheki Nigeria and Cheki Ghana team remains intact with Cheki Nigeria’s current CEO, Chimezie Okonkwo, staying on with the new company.

igerian Railway Corporation (NRC) re v e nu e g e n e ra tion profile is expected to drop drastically in the next two months following the planned resumption of standard gauge project yesterday from the Ebutte Metta Junction of the Nigerian Railway Corporation (NRC) linking into the Apapa seaport by Chinese Civil Engineering & Construction Corporation (CCECC). Rail to port and port to rail freight haulage operations on the old narrow gauge tracks by the NRC was officially suspended yesterday to enable Chinese Civil Engineering & Construction Corporation (CCECC) resume work along the corridor which was earlier suspended during the out of the coronavirus pandemic. Apart from the enormous revenue loss that will be recorded by the NRC, others like APM Terminal with a larger chunk of rail connectivity for freight movement, ENL and Dangote group and other corporate organisations will also have to pay more by road for the movement of containers in and out of the Apapa port when compared what it costs to transport it by rail. In total, there are six rakes of wagons that can carry either 19 units of 40 feet containers or 38 units of 20 feet containers out of Apapa for different shipping companies. The NRC was operating two shifts daily at some point, but had to drop to one trip a daily as a result of the coronavirus scourge. Due to complete suspension of freight movement that will last between September 15 and Novemver 14, Jerry Oche, Lagos regional district manager (RDM) said, the NRC will be entering into another phase of revenue squeeze. This is coming at a time

when the new Warri-Itakpe standard gauge rail corridor is yet to commence operations as well as the AbujaKaduna standard gauge rail line that is designated strictly for passenger services. While the RDM declined to estimate the exact amount the NRC will lose within the period of freight haulage shutdown, he said, the loss in rvenue will will be enormous. Checks by BusinessDay reveal that throughout the 60 days period when the standard gauge construction by the Chinese company will last, there are speculations that, the locomotives used for the wagons may be deployed to complement the mass transit train services (MTTS) return trip operations from the Iddo to Ijoko terminals. During the last inspection tour of the project by Rotimi Amaechi, Nigeria’s minister of transportation, the CCECC project team said that, there are plans to shutdown the narrow gauge line from September 15 to November 14, 2020 to enable commence project works from the Ebute Metta Junction (EBJ) to link Apapa seaport. The rail line extension to Apapa was an addendum to the $1.5 billion Lagos-Ibada standard gauge. The successful completion will fast track movement of cargo by rail, reduce the pressure from the road as a well as allow free traffic flow within Apapa which has become a national embarrassment over the years.

Rotimi Amaechi

German’s Tipp Oil rebottles deposit policy in Nigeria game changer MIKE OCHONMA

ipp Oil, leading german premium lubricants producer, has assured that its rebottle deposit scheme, which comes with its quality lubricants, will surely change the game in the Nigerian lube market. The assurance is in line with its resolve of its ‘grand plan’ to play in the Nigerian lube market. Tipp Oil plastic container deposit and buy-back scheme is the world’s first in the lube industry as it buys back its 1, 4 and 5 litre engine oil plastic containers from customers

as a way of protecting the environment. With the buy-back system, the lube takes back empty lubricating oil bottles from its customers for a fee, clean and refill the bottles as a way of saving resources and reducing the burden of nature with plastic waste. The lubricant is currently expanding its distribution network with a global campaign for new distributors for its award-winning and proudly ‘Made in Germany’ quality products. Nigeria is one of the markets in West Africa where the German premium lube manufacturer has received good expression www.businessday.ng

of interest. Maintaining its interest in playing actively in the local lubricants market, Tipp Oil

said it would go through the country’s legal and regulatory processes in achieving this aim. Olaolu Olusina, managing editor, Auto Report Africa, agent for Tipp Oil in Nigeria, said the move is based on the interest expressed by Nigerians in the company’s products following the recent launch of a global campaign for distributors by the company. “Our deposit system (plastic buy back) in the circulation system is generating enthusiasm worldwide. We have received real interest in our products from Nigeria and we are coming into the

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market, fully, soon with our premium lubricants, using our plastic deposit system as a great incentive”. ,” Olusina, quoting Tipp Oil managing director, Sebastian Maier, said The plastic buy back scheme is fast receiving a warm embrace in the markets where the product operates with distributors now using it as incentive to also boost sales. “In Nigeria, Tipp Oil plans to use the deposit scheme to also boost self-employment among the teeming youth, thereby assisting the government in tackling a major problem. The beauty of it all is that the jobs to be created @Businessdayng

through this scheme would be sustainable as the lubricant is also planning to establish a training centre for youth development,” Olusina said. Already in Angola, Ghana, Guinea, Togo and a few other African markets, the range includes car engine oil, gear and hydraulic oil, agricultural machinery oil, marine oil and many others. Offering powerful and innovative lubricants for various applications, it ensures that all its products meet national and international standards and are carefully monitored during design, production, filling as well as during marketing.

Wednesday 16 September 2020

BUSINESS DAY

FEATURE AMES Edo Inland Dry Port capacity can service South-South region - Charles Akhigbe Atlantique Marine and Engineering Services (AMES) is a private firm, promoting the establishment of AMES Edo Inland dry port located in Benin City, Edo State. In this interview with BusinessDay, the Managing Director of the port, CHARLES AKHIGBE speaks on the huge potential of the project, current status of the port and delays in getting operational license from the Federal Government. CHURCHILL OKORO brings excerpts:

hat are the objectives of AMES inland dry port? The objectives of the project is to bring shipping activities to manufacturers and drive industrialisation in Edo State and by extension neighbouring states. The project would be designated a custom port after receiving the federal government approval as a port of origin and destination. This project has a multiplier effect, especially on the socioeconomic aspects for growth and development of Edo state. In September 2018, government agencies led by the Nigerian Shippers’ Council, Infrastructure Concession Regulation Commission (ICRC), federal ministry of finance and transportation, visited the site after the Economic Recovery and Growth Plan (ERGP) workshop for a final inspection. The agencies were all fully briefed and informed about the project. I am sure the Nigerian Shipper’s Council has not relented in continuously interacting with the agencies to ensure that there is value added service to the populace. The Nigeria Customs Service is a government agency under the ministry of finance, upon approval of this site as an inland dry port, then it becomes a custom port because the custom will move in here to perform their duties. So, the approval we are looking for from government is to grant us license to be able to import and export which is called origin and destination. What will be the benefits of the inland dry port to Nigeria’s economy and manufacturers around this region? Manufacturers and industrialists automatically will have no need to go to Lagos to bring their goods and containers to this part of South-South because Edo State is a logistics hub. This means that

industrialists and manufacturers in the South-East, South-West, and here in the South-South, as well as the northern part of the country will have absolutely no reason to go and get congested in Lagos. All the necessary facilities and equipment will be provided for the the industrialists and manufacturers to offload, load their containers either for import or export. The whole idea is to bring shipping much closer to the people, to manufacturers and industrialists. The freight forwarders, clearing agents, shipping line officers will be here. As a matter of fact we plan to build a freight forwarders’ house which will accommodate all these stakeholders in the maritime industry. Apart from making it closer to manufacturers, it will also make outputs and products cheaper. That is why we are hoping that the federal government will consider rerouting the rail line either from Agbor to Benin or reroute the coastal rail line from Lagos to Ore

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to Benin, Warri and then Onitsha to Calabar. We are looking forward to that because the project is of strategic national importance and we know that if government supports us with also support from the state government within the next few months the governor will be able to invite President Muhammadu Buhari to commission the dry port, so that all industrialists in SouthSouth, South-East, South-West will have an inland dry port where the shipping lines will bring the containers directly to their doorsteps. The Inland Dry port will contribute tremendously to the economy. First we anticipate that it should be able to create more than 30,000 jobs both direct and indirect within the next three years. This is a custom port. So, if you want to export you do not need to go anywhere but come here, fill your forms, interact with customs and export your agricultural products, solid minerals and other things allowed by the government.

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Also, the urban generation that will take place with a lot of buildings, construction and various aspects of the maritime value chain that will be set up especially warehousing, logistics, training and freight forwarding, clearing agents, growth of the community and all kinds of stakeholders that will be involved. Our plan is to imbibe them in our activities. So, both the social and economy parts we see a spike in increase. Revenues to federal, state and local government will increase. One of the key things that excite us so much is the socioeconomic impact. Based on the feasibility study we did we know that the social impact will be great, and even from the Environmental Impact Assessment we did, we are confident that the federal, state and local government will benefit from the project tremendously. What capacity of containers can it handle? The port has a capacity of 20,000 twenty-foot equivalent unit (TEU). So at any point in time you can fit it in here at a height of four containers per stack which I believe is a very good start to be able to accommodate the capacity and volume looking at the huge number of Edo people in the diaspora, and the fact that we are central to the South-South. We have Warri port around here, this Inland dry port will further energise economic activities around the Warri port. Why ship your containers to Lagos when you can bring it to Warri port and consigned to the Inland dry port where you can load new containers. At any point in time, we have the capacity to be able to support all the regions that are around us. The port is made to service neighbouring states effectively. What phase is the project ? At the moment, we are in the phase one of the project, phase two will @Businessdayng

commence as soon as we get license from the federal government. The grant of the license is the precondition given to us by our potential investors to be able to complete it. It will not take us six months as soon as we get the necessary funding to complete phase one, and hopefully after that, we will invite the regulatory authorities such as the ICRC, Nigerian Shipper’s Council, and every other stakeholders. The phase one is 80 per cent completed and so at this stage we need the support of the federal government to be able to get the necessary approval so that international investors will be interested and they will know that there is the hand of the government on the project. If we don’t have that license it is difficult to get major investors to get any iota of belief or confidence for them to be able to invest their money on project. So, we are talking to a few organisation that can help us to raise funds but we are eagerly waiting for our approval from the federal ministry of transport to be able to approach these investors to come and join hands with us so that we can finish this project. And thereafter, look forward to the President Muhammadu Buhari to come and commission it to start accepting containers into Edo State. Which partnership options have you explored for a successful business operation? We are looking at a lot of stakeholders to partner with us. We will partner with everybody for the success of this inland dry port which is the first in South-South Nigeria. We are open to partnership or joint venture with anybody to make sure that this project get the necessary funding and expertise that will ensure that the country begin to reap benefits from it. We have had investors who wrote to us for partnership but unfortunately because of lack of our federal license, the investors are on hold right now. One actually offered to give us about N6.5billion ($20million) in 2018, to finish the few works that need to be done and also ensure that we put all the necessary security which will give us our International Maritime Organisation (IMO) license to ensure goods and services are not tampered with. Unfortunately, everything is on hold, until we get the federal government to do the needful, and we are working with them very closely, and hopefully they will issue us the license very soon. Edo State government under the leadership of Godwin Obaseki has been of tremendous help and support to this project. The governor approved the Certificate of Occupancy for this project which we eventually issued to the federal government to show that there is no encumbrance.

Wednesday 16 September 2020

BUSINESS DAY

FEATURE Banks as catalyst for SME growth across Nigeria, Africa

he capacity of Small and Medium Scale Enterprises (SMEs), to perform their role, as the engine of growth in an economy, is often hampered, by challenges such as, lack of access to finance, modern technology, and market with unfair competition to imported goods, among others. The Central Bank of Nigeria defines small and medium enterprises (SME) in Nigeria according to asset base and number of staff employed. The criteria are an asset base between N4 million and N500 million, and a staff strength between 10 and 100 employees. Catalysts for economic growth and national development- if their impact in developed and developing countries alike is anything to go by- the SME sector in Nigeria accounts for most Nigerian jobs and contributes nearly half of the country’s GDP in nominal terms. There are over 37 million MSMEs (Micro, small and mediumscale enterprise) in Nigeria and this number contributes almost 50 percent of GDP in nominal terms and account for 84 percent of all Nigerian jobs. This is according to the most recent survey on the sector carried out through collaborative efforts of SMEDAN and NBS (National Bureau of Statistics). SMEs are catalysts for economic growth in many countries, because they have more flexible production opportunities compared with large enterprises. They adapt to the changes in demand in a short time and meet conditions for competition quickly. Thus they contribute to national income, employment, productivity and entrepreneur training. Most of the conglomerates, corporations and multinationals of today started as SME’s or mere business ideas that were nurtured before they blossomed into the big deals they have become today. Access to funds has been labelled the most challenging obstacle in enhancing SME’s productivity, market watchers have unanimously submitted. This is the reason some visiondriven financial institutions are quick to identify growth oriented businesses, provide the necessary financial back up for them in their teething stages and help them actualize their potentials. A good number of these Nigerian financial institutions have now prioritized this in their products and CSR to-do list. Evidence of this is contained in the numerous products, business plans, SME workshops, forums of financial institutions, all targeted at catalyzing their growth. Also any organization that commits its resources to the growth of an uncertain business does so at a huge risk. A list of the top four banks who have stood out in the support of SME’s propelling them towards attaining their lofty dreams include: UBA, First Bank, Fidelity Bank, and Wema Bank. These banks have done extremely well in oiling the engine

Tony Elumelu, Chairman of UBA

of growth for SME’s providing the needed capital and impetus for them to thrive. First Bank In the case of First bank, there may be a perception that the bank doesn’t support SME’s adequately, that is not the case as they offer a handful of benefits to SMEs. There are three ways in which small businesses can benefit from the banks: they include, Invoice Discounting Facility, Contract Finance, Cash backed. If you are determined and you have a viable business to show, then go for it. The bank gives loans with a 25% interest rate — the highest on this list. However, they try to help businesses enlisted under them by marketing them to all their customers. This small feat has helped considerably. Wema Bank As for Wema Bank, the bank has more dealings with retail businesses. They have built their structure around retail banking, conducting transactions with market women and SMEs. It is worthy to note that Wema Bank gives loans from ₦100,000 to ₦1 million without any collateral. All you need is to have steady transactions for 6 months in your corporate account. Their customer care service is also quite impressive, doing their best to answer to all your needs and inquiries. To show you their eagerness to give out loans, they even have a loan calculator on their website which helps you calculate how much the bank would be making from your loans. Fidelity Bank Currently, Fidelity Bank runs a www.businessday.ng

radio program on Inspiration FM, Lagos, to educate SMEs and give the necessary insights to accessing loans from the bank. Fidelity Bank has also done well to create a Managed SME Division within the bank structure to cater for SMEs. Giving them a one-on-one advisory touch, accessing markets for their customers, and to guide aspiring entrepreneurs that are naive about how to run a business. United Bank for Africa Pan African Financial Institution, United Bank for Africa is one out of many that tops the chart of Nigerian banks pulling its weight and judiciously putting its money where its mouth is. It has done this relentlessly for years and continues to innovate in helping to build businesses in Nigeria and across Africa in the 20 countries it has presence. A lot of businesses owe their success stories to its backbone support and prowess in financial management, with which it provides guidance and requisite knowledge to Nigerian start-ups. Their goal is to build requisite capacity in order to produce future business leaders of tomorrow. Quite a number of established business owners have been on their radio programme to share their experience. This is a step in the right direction and in 2016, they recorded massive increase in their SME customers. Some of the following products have done well to inject the needed impetus for SME growth in Nigeria; The UBA SME Account: low cost account for SMEs, way cheaper than the regular corporate account is one that was conceptualised with budding entrepreneurs in mind.

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Structured with a low interest facility, business owners able to get ahead with little to bother about. Most importantly free advisory services are on hand to help put the customer’s business on a sound footing UBA SME Asset Finance Loan: This package comes with up to N50m for a period of 3 years particularly for business asset acquisition or expansion. Also, the UBA School Loans: gives a strong push of up to N100m payable over 5 years for school asset acquisition, purchase or lease of school buildings, buses etc and short-term loans to buffer cash flow needs of the school. Another invaluable product is the Capacity Building Initiatives (UBA Business Series and MSME Workshop) which supports the growth of Micro Small and Medium Enterprises(MSME) as well as equip them with the necessary tools needed to strengthen and sustain their businesses. The bank also makes available Business registration services to provide quick support for unregistered businesses looking to regularize their companies. This service helps remove the hurdle of weeks or even months of delay in getting their businesses registered. As for the UBA MSME workshop which underscores the banks passion in building Small businesses to their full potential, it has proven to be instrumental since it was inaugurated and acted as a propellant to success for most SMEs. The MSME Workshop is a capacity building initiative held regularly, where business leaders and professionals proffer tips and share insights on best business practices and how small and medium-scale enterprises can build a successful and sustainable business brand especially in Africa’ challenging business climate. The last edition of the bank’s MSME workshop specifically targeted financial record-keeping in businesses which is known to be a thorn in the side of small business owners. Ifeanyi-Eze who took the first session on Bookkeeping and Accounting Basics for Small Businesses, gave practical tips on how Accurate bookkeeping is a necessity for MSMEs, stating that even though It may seem tedious at first, it is very important for business owners to keep track of their income and expenditure. She explained the need for proper stewardship in the business, as the information generated is crucial for potential investors, lenders, tax authorities, Corporate Affairs Commission and so on, adding “When you open a business, you are a steward to yourself and to many other people. Capturing and documenting every income and expenditure will boost your business in ways you cannot imagine, therefore, stewardship and decision-making are two main reasons of book-keeping.” UBA’s Group Head, Consumer and Retail Banking, Jude Anele, who spoke ahead of the workshop, @Businessdayng

pointed out that small businesses are the engine of any developing economy, hence the bank is committed to their growth. According to him, MSMEs should be armed with the necessary tools that will help galvanise their businesses, a factor necessitating the regular UBA-powered workshop for MSMEs, to assist both customers and non-customers alike and to boost their businesses. He said, “UBA is committed to the overall growth of its customers beyond banking services, and its passion is hinged on ensuring that customers and entrepreneurs run businesses that can stand the test of time” This according to him should be done with the knowledge and experience required to take their businesses to the next level in Nigeria and across Africa particularly in the 20 African countries where UBA is present. UBA’s Group Head, Marketing and Customer Experience, Michelle Nwoga, said the seminar is open to all business owners and leaders across Nigeria. She reiterates its importance because of the long-term impact which range from confidence, skills, knowledge, and resources. Also the UBA market place which held in Abuja and played host to 20,000 visitors, 100 small and medium enterprises both leading private and public sector players reinforces UBA’s passion for entrepreneurs and SMEs across Africa, most of whom gathered at the continent’s biggest entrepreneurial fair and got a unique opportunity to showcase their products before a sea of patrons. The event held on July 26 and 27, 2019, on the side-lines of the Tony Elumelu Entrepreneurship Forum, the largest gathering of the entrepreneurship ecosystem in Africa. At the master-class sessions which held during the UBAmarketplace2019, small and medium scale businesses had a rare opportunity to network and get solutions to some of the challenges they face in daily operations. Also, entrepreneurs who are beneficiaries of the Tony Elumelu Foundation (TEF) had the opportunity to make innovative presentations as well as pitch their businesses with a grand prize of a grant, courtesy of UBA. Group managing director, Kennedy Uzoka, speaking about the event, stated that “UBA has always been at the forefront of entrepreneurship across Africa, undertaking many projects aimed at contributing to supporting Africa’s growth and economic integration. The birth of the UBAmarketplace and this entrepreneurial fair is a testament of our commitment to African SMEs. Because of this evident impact of SME’s all over the world, there is no gain saying that more financial institutions should join the laudable efforts of UBA in this laserfocused contribution and support of Small businesses whose impact and overall contribution cannot be quantified.

Wednesday 16 September 2020

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Climate change, low farm yields spark fears of food insecurity Josephine Okojie

i g e r i a ’ s population is rising rapidly, yet the country has failed to make appreciable efforts in increasing its farm yields with effects of climate change intensifying, sparking fears of food insecurity in Africa’s most populous nation. Climate change has been altering and disrupting the farming cycle in the country for the past three years. The widespread flooding currently in the country has caused crop losses and low production as farms were submerged in floods, leading to high food prices and imports. The situation has also lead to the loss of billions of naira worth of investments in rice and other major staples especially in the northern region where the bulk of the country’s food crops are cultivated. AfricanFarmer Mogaji, chief executive officer, X-Ray Consulting Limited said, said that climate change has become a critical issue for smallholder farmers and that the impact on agriculture is becoming more intense. “It will be a major determinant of food production and Africa’s

vulnerability to climate change is closely linked to the continent’s low adaptive capacity and increasing dependence on resources sensitive to changes in climate,” he said. Mogaji said the country must now increase its mechanisation and improve its storage to reduce postharvest losses to meet the ever-increasing mouths needed to be fed. “Government needs to attract more private capital to agriculture. Inputs are expensive and high-quality seeds are lacking. We need

investments and government intervention in these areas,” he said. Apar t from changing climate, low yields p er hectare in almost all crops grown in Nigeria, Africa’s most populous nation is another major challenge to the country’s food security quest. The Federal Government has mouthed support for agriculture over the years, yet the country’s farm yield per hectare has remained poor and one of the lowest among its peers. “We currently cannot

produce the food we need to feed 201 million people because our yield per hectare is still low but we are making progress,” Ibrahim Kabiru, p re s i d e n t , A l l Fa r m e r s Association of Nigeria (AFAN) said. “Nigeria as a country needs to do more as a country and farmers also have to do their part in increasing our yield per hectare. We need to embrace biotechnology and improve methodology in planting,” Kabiru said. He says that biotechnology crops are safe for consumption and

that no nexus exists between genetically modified crops and cancer, as it has not been scientifically proven. Recent data from the Food and Agricultural Organisation (FAO) shows that Nigeria has the least average yield per hectare of four selected most consumed crops, among its African peers such as Ghana, Kenya, and South Africa. For tomatoes, the average yield per hectare in Nigeria is 6.4 metric tons (MT), Kenya’s average yield for the crop is 21.2MT, Ghana tomato yield is 8MT and South Africa’s average yield for the crop is 75.5MT. Similarly, for maize - which is the most consumed grain on the continent, Nigeria’s yield per hectare is 1.6 on the average despite being the second largest grower of the crop while Kenya and Ghana have the same average yield of 2MT per hectare and South Africa’s average yield is 6MT per hectare. For potatoes, which is the best-rounded and nutrient root in all of Africa, Nigeria’s yield per hectare for the crop is 3.7MT, Kenya average is 15.5MT and South Africa average yield for the crop is 38.8MT. Nigeria’s average yield per hectare for rice paddy is which is the most consumed staple in the country is 2MT, while South Africa and Ghana

have the same average yield per hectare of 3MT. Kenya is 4.2MT per hectare. Owing to the low crop yields, Nigeria now records huge demand-supply gaps in most of its staple foods, even as the population growth rate stands at 3.2 percent per annum and projected to surpass the 300 million people mark by 2050, according to The World Population Prospects 2017. Nigeria’s population is now 201 million people who must be fed with rice, beans, tomatoes, and potatoes among others. “Nigeria has one of the lowest yields per hectare globally. We abandoned agriculture for a very long time when other countries were developing theirs. It is now we are coming back to it and there is still a lot that has to be done,” Emmanuel Ijewere, vice president, Nigeria Agribusiness Group (NABG) said last year at a CEO’s breakfast meeting in Lagos. “In tomatoes, for instance, only one percent of Nigerian farmers plant their tomatoes using hybrid seeds and s e e dlings. In Ghana 40 percent of their farmer’s farm with hybrid seeds and in Kenya it is 68 percent of their farmers that use improved seeds and seedlings,” Ijewere said.

Pangolin conservation gets boost as University of Ibadan allocates 3.5acres for research Josephine Okojie

h e Un i ve rsi t y o f Ibadan has once again shown its pride of place as the Premier University in Nigeria as it allocates 3.5acres of land for pangolin conservation and research in the country. This is a huge step in the right direction for pangolins and other endangered species conser vation in Nigeria, experts say. When fully built, it will serve as a rehabilitation center for pangolins and a hub for conser vation, research, and education. It will be a haven of education for school children, a research hub for higher institutions of learning and it would create a reservoir for wildlife populations against extinction in the wild. Wildlife experts noted that the center will promote conservation, education, and tourism. The land was approved by Professor Abel Idowu Olayinka, Vice-Chancellor, UI, and handed over to

Olajumoke Morenikeji, a Professor at the University of Ibadan, and also the chair of the Pangolin Conservation Guild Nigeria (PCWGN). The allocation places the University of Ibadan as the first higher institution of learning to address pangolin conservation in the country. Profess or Morenikeji expressed gratitude to the Vice-Chancellor while describing him as a high achiever who has given the University quality leadership that has greatly lifted the institution. “ In h i s f i v e ye a r s o f leadership, he has made notable landmark changes to the University. Prof Olayinka will be leaving a great legacy behind as he has done a lot in improving teaching, learning, research, and innovation,” she said. The need to actively and aggressively conserve the pangolins stems from the fact that it is the most illegally trafficked mammal in the world. This is due to the increasing demand for their www.businessday.ng

meat, which is eaten as a luxury dish in some parts of the world, and their scales and other body parts that are used in many traditional medicines. This high demand is causing unsustainable levels of poaching and illegal trade, driving pangolins to the brink of extinction. Experts from the International Union for Conser vation of Nature (IUCN) - pangolin specialist group say over a million pangolins have been taken from their natural habitats since the year 2000.

The extent of Pangolin exploitation from Nigeria has become increasingly alarming in very recent times. This is evident in the volume of shipments that have originated from the country and discovered in the illegal wildlife trade, while in some instances enroute from other source locations in Africa. In 2019, two huge shipments of pangolin scales totalling 25.6 tons supposedly from Nigeria were intercepted in Singapore bound for Vietnam. In a separate incident, customs officials in the

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northern Vietnamese port of Hai Phong discovered 1.4 tons of pangolin scales in a shipping container sent from Nigeria. In 2 0 2 0 , t h e Ni g e r i a Customs Service Zone A, seized about 147 sacks of pangolin scales weighing 9,504.1kg worth N10.26 billion. The Nigeria Customs Service Area 1 Command, Port Harcourt, disclosed a seizure of 32 packages of p a n g o l i n s ca l e s, w h i c h weighed 1,500kg with an estimated black market value of N826million.

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Other threats that have affected the forest habitat of pangolins in Nigeria include timber exploitation resulting in deforestation, urban development, road and oil pipeline construction, and shifting agricultural practice among others. As these threats have continued with little success in forest conservation efforts, the implication is that there is probably no habitat for pangolins left in Nigeria that has not witnessed some form of human disturbance or the other. These threats have the potential to drive the remaining pangolin population to extinction if urgent multi-pronged approaches are not used for pangolin conservation. Prof Morenikeji who was earlier quoted has been at the forefront of pangolin conservation in Nigeria. Her group has created a lot of awareness of pangolins since the year 2016. They have rescued, rehabilitated, and released pangolins to protected forest areas.

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news L-R: Adejoke OrelopeAdefulire, SSA to the president on SDGs; Bayo Olugbemi, president/chairman of council, Chartered Institute of Bankers of Nigeria (CIBN); Zaniab Ahmed, minister of finance; and Patrick Akinwuntan, chairman, conference planning committtee/ managing director, Ecobank Nigeria, during the 2020 Banking and Finance conference of CIBN, theme, “Facilitating a Sustainable Future: The Role of Banking and Finance” in Abuja, yesterday. Pic by Tunde Adeniyi.

Low yields push Nigerian banks... Continued from page 1

banks are expected to retain with the CBN from customer deposits.

In January, the CRR was increased by 500 basis points to 27.5 percent by the CBN Monetary Policy Committee (MPC) in line with the decision of the apex bank to address monetary-induced inflation while retaining the benefits from the CBN’s loanto-deposit ratio (LDR) policy. The CBN increased the minimum loan-to-deposit ratio (LDR) of commercial banks to 65 percent, a measure that was among a range of regulations aimed at forcing banks to boost credit, mainly to farmers, small-and-medium-size businesses and consumers. “It is pertinent to note that the appetite of banks for risk assets is a function of liquidity in the banking sector. If the uptake of risk assets is on the rise, then it appears in sync with the CBN’s recent regulatory posture aimed at increasing credit flow in the economy. “Specifically, the LDR of 65 percent as well as the recent lowering of the minimum threshold for interest rate on savings deposits to 10 percent of Monetary Policy Rate (MPR) are measures capable of increasing the size of risk assets in the banking industry,” said Uche Uwaleke, a professor of capital market, Nasarawa State University Keffi. He noted further, “Without a doubt, increased credit especially to the real sector of the economy is desirable. But it is equally important to ensure

that the uptake in loans or risk assets does not translate into increase in non-performing loans (NPLs). To this end, the CBN should continue to ensure through effective supervision that deposit money banks (DMBs) follow all credit guidelines in relation to their customers and are not over exposed to the point of jeopardising their asset quality.” The Nigerian economy contracted 6.10 percent yearon-year (y/y) in second quarter (Q2) of 2020, mainly due to the Covid-19 lockdown in major cities across the country. With all banks’ half-year (H1) results finally released, Vetiva analysts say they sought to ascertain the net effect of the economic slump on the performance of banks within their coverage. “As a result of the shutdown, many businesses were unable to carry out activities to generate income; this meant an increase in default risk on loans given out by banks amid the minimum loan to deposit ratio (LDR) regulation set by the CBN,” Joshua Odebisi, analyst at Lagos-based Vetiva said in a September 14 note. Nigerian bank loans are not cheaper either. Banks commercial loan interest rate ranges between 19 percent and 25 percent. The interest rate for on-lending facilities like that of Bank of Industry (BoI) is 13 percent; Development Bank of Nigeria (DBN) is 14.6 percent for 3 years and below, and 16.6 percent for facilities above 3 years; while the on-lending facility of African Development Bank (AfDB) goes at an interest

Buhari tasks Nigerian banks to redouble... Continued from page 2

from its second recession in four years. But, long before the pandemic started spreading across the globe late last year, Nigeria’s economy had been crippled by underlying challenges. An evaluation of Nigeria’s macro-economic indicators before the pandemic exposes how the pandemic only made what was already a bad situation worse. With an economic growth that is too slow to create

sufficient opportunities for a rapidly rising population, Nigeria, Africa’s largest economy, has been a tough country for millions of its citizens who, in the last five years grew progressively poorer. Nigeria’s economy, which has been gasping for breath since 2015, means more of its citizens are falling into extreme poverty as more than 82 million of them live on less than $2 (N750) a day. Its economic growth averwww.businessday.ng

rate of 13.5 percent. The National Bureau of Statistics (NBS) on Tuesday, September 15, released the inflation figures for August 2020. Notably, the headline inflation rate rose from 12.82 percent year-on-year (y/y) in July to 13.22 percent y/y in August – the highest since April 2018, driven by a 1.34-percent jump in the month-on-month (m/m) changes in general prices (versus 1.25% m/m in July 2020). NBS data show that out of the N18.9 trillion gross loans of banks as at Q2 2020, the NPLs stood at N1.21 trillion; this is against gross loans of N15.48 trillion and NPLs of N1.44 trillion in Q2 2019. In Q1 20 banks gross loans stood at N18.56 trillion and NPLs printed at N1.185 trillion in Q1’20. In terms of credit to private sector, the total value of credit allocated by the banks stood at N18.82 trillion as at Q2 2020. Oil and Gas and Manufacturing sectors got credit allocation of N3.62 trillion and N3.07 trillion to record the highest credit allocation as at the period under review. Looking at the Tier-1 lenders results for the half-year to June 30, Access Bank NPL ratio improved to 4.4 percent in Q2 20 (previously 5.8%). Zenith Bank asset quality concerns appear to be under control with NPL ratio at 4.7 percent. FBN Holdings NPL ratio has remained in single digit and continues to decline to 8.8 percent from 9.9 percent at year-end. UBA maintains its prudent risk appetite, even as NPL ratio for the Group moderated to 4.1 percent (from 5.3% in 2019 full year. aged 1.2 percent between 2015 and 2019. The problem with that is that the population grew two times faster at an average of 2.6 percent per year. According to Godwin Emefiele, governor of the Central Bank of Nigeria (CBN), the apex bank has seen the resilience of the Nigerian economy as stakeholders have adopted a new business model to adapt to the pandemic. “Following the implementation of the intervention in the agriculture and manufacturing sectors and the significant up-

NBS also notes in its quarterly sectoral change in NPLs that agriculture, finance and insurance, information and communication, professional, scientific and technical activities, and real estate contributed majorly to the 2.27 percent growth in NPLs from Q1 to Q2, 2020. Looking forward, the analysts note they do not expect a significant worsening of NPLs in 2020 “due to the expected recovery in economic activity, rebound in crude prices and the restructuring. “Among our coverage banks, loan loss provisions went up 115 percent quarteron-quarter (q/q), with two banks bearing the brunt of the effect in nominal terms – Zenith Bank and FBN Holdings - both reported provisions of N20 billion in Q2 alone. Even banks with historically low provisions reported extraordinary surges q/q such as GTBank (+353% q/q; Q2: N5.5bn) and Stanbic (+126% q/q; Q2: N4.4bn),” Vetiva Research analysts note. “However, this surge in provisions was actually not the worst case scenario, thanks to the approval of the CBN for the restructuring of about 40 percent of industry loan book (about N7.5trn), which meant that a large proportion of Stage 2 (Doubtful) loans were given new repayment tenures or different interest charges to ensure continued payment. Without this, industry provisioning would have likely been almost doubled the current figure. Thanks to this strategy, we do not expect provisions to worsen significantly in H2, as the economy continues to open up and business activities resume,” Vetiva says. tick in economic activities, we do expect that the GDP growth in Q3 will reflect the significant recovery relative to the secondquarter growth,” Emefiele said at the bankers’ annual conference that simultaneously took place in Lagos and Abuja on Tuesday. In response to the current health and economic crisis occasioned by the COVID-19 pandemic, the CBN governor said the Federal Government had rolled out both fiscal and monetary packages in the form of domestic interventions.

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Two months after domestic flight... Continued from page 1

the country to contain the spread of COVID-19, and opened Abuja and Lagos airports in July for domestic flight operations and other airports were opened subsequently.

BusinessDay’s checks show that when flights resumed, airlines had as low as 20 to 30 percent load factor, but barely 11 days international flights resumed operations, domestic airlines are seeing between 55 percent and 60 percent load factor. Ado Sanusi, managing director, Aero Contractors, told BusinessDay that when Aero resumed operations he anticipated passenger turnout would be gradual and it was like that. Passenger confidence has grown in the past two months and load factor has increased from 20 to 30 percent to about 50 to 60 percent, Sanusi said, adding that the opening of the international airports has had some impact on domestic operations. “We have had to scale down operations. Before COVID-19, we had three Boeing 737 and one Dash 8 aircraft we used to service our routes. After COVID-19, we now use three aircraft instead of four. We have also had to reduce frequencies into Abuja, Port Harcourt and Yola. For instance, we operated into Yola daily before COVID-19, but now we have reduced to five weekly flights,” he said. The challenge has however been access to foreign exchange, he said. “We are struggling to ensure we buy spare parts and do our maintenance. Aviation is purely dollar denominated when it comes to cost. We sell our tickets in naira but do our maintenance and buy spare parts in dollars,” he said. A source at Dana Air who craved anonymity told BusinessDay that on certain days like Fridays, Mondays and Sundays, the load factor could be up to 65 to 70 percent but some other day’s load factor could be between 50 and 60 percent. The source also associated the increase in load factor to

international flight resumption. Checks also show that Air Peace, which operated over 120 flights daily before COVID-19, scaled down to about 20 when flights resumed but after some weeks, the airline now operates about 45 to 55 flights daily. As airlines struggle to survive post-COVID-19 era, experts have however suggested some recovery models that could keep local carriers afloat. Seyi Adewale, CEO of Mainstream Cargo Limited, suggests that government stimulus and incentives should be given to limit the negative impact of the pandemic on the aviation sector. These, Adewale says, include loans, grants, tax waivers, special forex windows and rates, airport infrastructure - deliberate upgrades or construction, and reduction of airport taxes or surcharges. He states that locally, the government can consider expanding the definition of aircraft spare parts to include other important aircraft items such as brake ASSY, safety appliances, rafts, aircraft tires in order to enjoy zero percent duty waivers. Olumide Ohunayo, an aviation analyst, says Russia, USA, Canada, Britain and some other countries have come up with one measure of support or another for the aviation sector, adding that Nigeria should look at options of supporting the aviation industry to help kick start the economy after the coronavirus crisis. “There are so many options before the government in helping support airlines. It is either they give direct financial incentives to the aviation industry or they give loans to organisations to get back up again. “Another option could be approving corporate bonds through the Central Bank of Nigeria, tax waivers could also help and waiving some charges to ensure airlines get back on their feet. What we have before us is not a matter of liquidation but insolvency and disappearance of organisations. These options are what we should take to save the airlines,” Ohunayo states.

Oil prices below $40: What it means for Nigeria... Continued from page 2

crude oil has significantly constrained the revenues of firms like Aiteo E&P, Seplat Petroleum Development Company and at least 50 small to mid-sized Nigerian producers pumping between 1,000 and 100,000 barrels. Aside this, most of the indigenous oil firms are highly leveraged and as a result some of them may not be able to meet debt service, with a significant risk of bankruptcy. Bankruptcy will result in more job losses at a time Nigeria is grappling with record levels of unemployment. @Businessdayng

In a virtual interview with BusinessDay, Roger Brown, new CEO of Seplat Petroleum Development Company, said some other local producers had pushed for more consideration in the allocation of production quotas by the Federal Government to meet with Nigeria’s supply cap of 1.4 million bpd. “In terms of demands by indigenous operators, they do need a chance, they really need to be able to grow as a sector in the market, otherwise, you have the dominance of major oil companies and then the government and that is not great in any oil mix,” Brown said.

Wednesday 16 September 2020

BUSINESS DAY

NEWS Lagos picks front runners in smart meter hackathon

L-R: Kehinde Daodu, member, Capital Market Solicitors Association (CMSA); Efeomo Olotu, chair, planning committee, CMSA 2020 virtual annual business luncheon conference; Benjamin Obidegwu, chairman, CMSA; Edefe Ojomo, partner, George Etomi and Partners; Adeleke Alex-Adedipe, member planning committee, CMSA 2020 virtual annual business luncheon conference, and Otome Okolo, social/welfare secretary, CMSA, at the CMSA 2020 virtual annual business luncheon conference in Lagos, yesterday. Pic by Olawale Amoo

FG, Lagos order stoppage of barge operations on Marina coastline …as NPA to revoke companies approvals JOSHUA BASSEY

he Federal and Lagos State Governments on Tuesday ordered the immediate stoppage of barge operations and other related activities along the Lagos Marina coastline. The action is aimed at regaining the lost beauty and serenity of the coastline which, in the past, attracted visitors from within and outside the country. Consequently, the Nigerian Ports Authority (NPA) is to revoke barge approvals granted some companies operating in Lagos State. The state governor, Ba-

bajide Sanwo-Olu, and minister of transportation, Rotimi Amaechi, gave the stop-work order during a joint inspection tour around the Marina coastline, yesterday. The governor and minister were bewildered, seeing the long row of trucks and containers that have constituted health and security hazards on the Marina. The duo decried the level of devastation of the coastline, describing it as ‘shocking’ and ‘unacceptable’. The minister spoke of an urgent need to sanitise the entire Marina coastline and restore its tranquillity and beauty. He ordered that trucks must immediately stop going to Marina to load. Amechi said the National

Inland Waterways Authority (NIWA) did not grant anyone the permission to carry out barging operations, insisting that all such activities must stop immediately. “The Federal Ministry of Transport has agreed with Lagos State Government to ensure that whoever is making use of Marina coastline should stop. We have agreed with Commissioner of Police to stop those using the roads and we have agreed with NPA to cancel all barge permits pending when each person will come back to NPA, NIWA and Lagos State Government to renew such approval,” he said. Sanwo-Olu, on his part directed the Commissioner of

Police to arrest and prosecute anyone who flouts the order to stop the unauthorised activities along the Marina coastline. He said the state government would do everything to bring sanity to the coastline. “We are also talking to the Federal Ministry of Works and Housing because we understand that some of the approvals were from that ministry. So, we are also taking up that responsibility and we would do what we need do,” the governor said. Also at the inspection were the managing directors of NPA, Hadiza Bala Usman, representatives of NIWA, Lagos State ministries of works and waterfront, as well as the police.

Edo poll: Obaseki, Ize-Iyamu, others sign peace pact …Use election as reference point for future polls - Abdulsalam

CHURCHILL OKORO, Benin

do State Governor and People’s Democratic Party (PDP) governorship candidate, Godwin Obaseki his main challenger, Osagie Ize-Iyamu of the All Progressives Congress (APC), and other candidates, on Tuesday pledged to embrace peace, irrespective of the outcome of the election. The signing of the peace accord by Edo State governorship candidates was organised by the National Peace Committee (NPC), and took place at the Oba Akenzua Cultural Centre in Benin City. Addressing contestants, the chairman of NPC, Abdulsalam Abubakar urged all stakeholders to commit to the spirit of the accord. The former Head of State, who urged the candidates to use the Edo election as a test for future election in the country, called on the electorate to cast their votes in the September 19 governor-

ship election, without fear of intimidation or coercion. He explained that those who signed the peace accord have committed themselves to ensuring peace in Edo State and Nigeria at large before, during and after the election. “The tension and anxiety associated with election necessitated the set up of the National Peace Committee that is to support peaceful election process and enthrone culture of peace. “In 2014, the committee conveyed efforts to support peaceful election as well as ensuring peaceful transition. The intervention of the committee contributed immensely to the success of 2015 election. The NPC has since successfully intervened in the general election to ensure peaceful outcome to the 2019 general election,” he said. According to him, “The governorship election in Edo State is only a few days away and we want peace during and after the election. We want to see Nigeria as a place where people come out peacefully www.businessday.ng

and vote during election to cast their election without deprivation and Edo state deserves this. “As you are aware the election will not come without peaceful atmosphere, and most importantly disharmony among political parties hinders developmental efforts. “As we go into the election, we have been given assurance by the Independent National Electoral Commission (INEC) that they will conduct free, fair and credible election. The rest is left for the voters to do what is right.” “We therefore, call on everyone to work towards peaceful election to ensure peace reign during and after the election,” he further said. In his remarks, Governor Obaseki appealed to the committee to extend the accord to other actors who have influence in the political space so as to ensure that the exercise is complete. Obaseki, who restated his commitment to ensuring peaceful poll, added that he would lead by example. “I am grateful to the Inde-

he Lagos State Government has picked front-runners that will participate in the final hackathon design event slated for September 16 through 18, 2020 when the state governor, Babajide Sanwo-Olu will announce the overall winner from each competing entries in hardware and software categories at the grand finale. Five contenders each emerged from both categories of the competition, and the two winners will share the prize money of seven million naira. The finalists were shortlisted after a transparent, rigorous and competitive process. The hackathon received 274 entries: 127 bid in hardware category, while 147 competed in software group. However, only 65 hardware and software prototypes were submitted by applicants. The shortlisted five finalists from hardware category are: Cosmo Automation, Smart Energy, Techwizard, Power Bit Cruchers and Gadozz Electricals, while the five software finalists are: Vectorians, Zeena Platform, Magnitronics, Chosen Soft Tech and Gideon. This initiative of the Lagos State ministry of energy and mineral resources is aimed at providing affordable electricity meters to the populace by facilitating the design and production of meters that will accelerate efforts towards achieving improvement in energy distribution, monitoring and prevention of revenue leakage. Over 60 percent of Lagosians and Nigerians are estimated to be unmetered due to unavailability and the high cost of meter acquisition. The Lagos State government is, therefore, leveraging bright

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pendent National Electoral Commission, Police and the Oba of Benin. Today, we agree that a unique type of history has been made in Edo State where all contestants sign the peace accord for a violencefree election. As the Chief Security Officer, I have no choice than to ensure peace reign,” he said. On his part, Osagie IzeIyamu promised to talk to his supporters to conduct themselves in a bid to achieve peaceful poll. “We are grateful to the peace Committee, INEC and the Police. We are also grateful to the Oba of Benin because what we are witnessing today was actually initiated few weeks ago,” he said. Earlier, the Oba of Benin, Oba Ewuare II, thanked President Muhammadu Buhari for the assistance in ensuring peaceful poll in Edo. The Oba of Benin who was represented by the Esogban of Benin, Solomon Edebiri, appealed to Edo sons to shun violence, noting that when two people contest, only one emerges as winner.

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I, formerly known and addressed as Miss Adedamola Rashidat Jummai now wish to be known and addressed as Mrs. Mufutau Rashidat Jummai. All former documents remain valid. General Public please take note.

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local talents to design and produce affordable smart electricity meters. Speaking on the hackathon judging process, Doja Ekeruche, advisory board member, Eko Innovation Centre, curators of the hackathon, noted that 19 judges with expertise in the power and tech ecosystem participated in the shortlisting process that produced the finalists. “We asked companies in the energy and tech ecosystem to nominate representatives to serve on the selection panel, tasked with shortlisting the top five finalists from both hardware and software tracks to proceed to the final hackathon events,” she explained. She added: “At the end of the shortlisting phase, a session was held with the judges to discuss the reviewing process, and an analytics team ranked the submissions by all judges to arrive at the top finalists.” Recall that Governor Babajide Sanwo-Olu during the launch of the programme on July 30, 2020, noted that the smart meter hackathon initiative marked a significant milestone in the implementation of the state government’s plan towards improving access to electricity as it aligned with the Sustainable Development Goal 7 of the United Nations targeted at achieving universal access to affordable, reliable, sustainable, and modern energy for all by 2030.

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CORRECTION OF NAME This is to notify the general public that my name was wrongly written as Sarah Efemodoro Onodjohwoyovwe on my BVN instead of my correct name Daniel Alphonsus Mbey. All former documents remain valid. General public should take note.

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This is to notify the general public that my name was wrongly written as Adebayo Olajide Iyanuoluwa on my GTB account and as Iyanu Oluwa Olajide on my FCMB account National Identity card that I wish to be known and addressed as Adebayo Oluwamopewa Comfort. All former documents remain valid. GTB, FCMB, NIMC & general Public should take note.

Wednesday 16 September 2020

BUSINESS DAY

NEWS

Developers adopt commercial approach to property use as land market booms …small-size family apartments still in high demand CHUKA UROKO

s part of the fallouts of the coronavirus pandemic, especially with social distancing rule, investors and developers alike have adopted commercial approach to property use, converting residential houses to offices, shops, centres and other facilities. This cuts across many Nigerian cities, particularly Abuja, Lagos and Port Harcourt where places like Maitama, Jabi and Wuse, Ikeja GRA, Lekki, Victoria Island, etc have seen conversions, leading to the creation of lodges, education centres, shops and restaurants. The impact of the pandemic notwithstanding, the land market has seen what is easily a boom as analysts report that enquiries have increased, confirming market assumption that properly guided land investments hold well under challenging economic circumstances. A recent report by Northcourt Real Estate says the market, in the first half of this year, recorded more local investors than international, estimating that over 60 percent of the closed transactions reported in

the luxury assets category were by Nigerians. “Large sums held in foreign currency that can’t easily be converted without much public attention is also finding its way into the land market. Property marketing firms offer installment payment plans as a strategy. Monthly payments less than N80,000 seem to be the sweet spot,” affirmed Ayo Ibaru, Northcourt’s chief operating officer. Ibaru noted in the report that, in the last few years, the economic recession and political shifts have encouraged moderation in the luxury real estate market, citing a recent survey which indicated that most residential occupiers in Lagos are renters with only 29 percent confirmed to be homeowners. Analysts cite government’s anti-graft fight as another reason for the slowdown in the luxury real estate market and the situation is such that the high-end areas in Lagos (Ikoyi, Victoria Island and Banana Island) and Abuja (Maitama and Asokoro) have the most luxury houses that have been empty in the last five years. “Luxury sale prices in Victoria Island and Ikoyi range between N160 million - N200

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million and N250 million N300 million respectively for an average 3-bed apartment. Banana Island rentals average N15 million and N25 million respectively per anum,” Ibaru disclosed. However, due to a general decline in purchasing power, the demand for these large and expensive luxury homes has reduced while that for small-size 1-bed and 2-bed apartments is growing. This is also reflected in the luxury real estate market as developers are re-designing projects to provide smaller and pricier condos. “Nobody is looking for these large-size apartments any longer. Of the 100 percent of people looking for homes today, more than 60 percent are looking for small-size homes to buy or rent,” MKO Balogun, CEO, Global PFI, affirmed in an interview. He also affirmed that developers of large size apartments are redesigning or partitioning them into smaller units of onebedroom and two-bedroom apartments that are in high demand, adding that it was not true that there was a glut in the housing market. “If you build right with the right pricing, you will not be able to satisfy the demand,” he stressed.

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Wednesday 16 September 2020

BUSINESS DAY

NEWS

Paxful expands beyond bitcoin, adds tether to platform BUNMI BAILEY

L-R: Allen Jia, sales manager, CHINT Nigeria; Igwilo Allena, head, medical services, Eko Electricity Distribution Company; Michael Chen, Nigeria country manager, CHINT West Asia and Africa; Aik Alenkhe, chief human resources officer, Eko Electricity Distribution Company; Babatunde Lasaki, assistant general manager, brand management and corporate communications, and Yusuf Saliu, team leader welfare, during the presentation of 5,000 face masks to Eko Electricity Distribution Company by CHINT Group to fight against the Covid–19, in Lagos, yesterday. Pic by Olawale Amoo

Electoral offenders face UK, US visa ban, asset seizure ahead Edo, Ondo polls INIOBONG IWOK

arely 24 hours after the United States government imposed additional visa restrictions on Nigerians whom it said are undermining the country’s democracy in the run-up to the September and October 2020 Edo and Ondo State elections, the United Kingdom has said it would take action against individuals who mastermind violence during the forthcoming governorship elections. In a statement published on its Twitter handle on Tuesday, the British High Commission in Nigeria said the sanction could include restrictions on the eligibility of the affected politicians to travel to the UK, restrictions on access to UKbased assets, or prosecution under international law just as it did after the 2019 elections.

Catriona Laing, the British High Commissioner to Nigeria, in the statement said she has held meetings with the leaders of the All Progressives Congress (APC) and the People’s Democratic Party (PDP) on the Saturday governorship election in Edo State. The commission explained that the parley focused on the need for the parties to prevail on their supporters to avoid violence before, during, and after the elections. “The UK takes a strong stand against election-related violence and just as we did in the general election in 2019, we will continue to take action against individuals we identify as being responsible for violence during elections,” the statement said. “This could include restrictions on their eligibility to travel to the UK, restrictions on access to UK-based assets or prosecution under interna-

Small businesses, job seekers to get post COVID-19 support as Google unveils initiatives CALEB OJEWALE

oogle on Tuesday announced plans to help businesses, job seekers, educational institutions and vulnerable populations as they try to rebuild and recover from the devastating impacts of the coronavirus pandemic. Over 500,000 small businesses across sub-Saharan Africa are to benefit from funding, training and services across identified sectors, while 25,000 teachers will get access to free online training sessions and resources to boost their capacities. In executing its plans in Nigeria, Google is also partnering with the federal ministry of youth and sports development to provide support for youthowned small businesses. The partnership is also expected to provide jobseekers in Nigeria with support in acquiring marketable skills through certifica-

tion and training programs. “We are focused on creating an enabling environment that promotes youth and social development in Nigeria. This partnership with Google in Nigeria is critical at this period and we look forward to seeing the positive impact it will have on SMBs’ recovery, enhancing the skills of jobseekers and improving the digital effectiveness of the education sector,” said Sunday Dare, minister of youth and sports development during an online briefing hosted by Google. Google also says it has set up a digital hub that provides free tools and resources to businesses and individuals. Through the hub, 500,000 small businesses will receive help getting online or improving their digital presence through Google My Business (GMB), which helps them connect with millions of users every month. www.businessday.ng

tional law,” it said. The statement further said the UK welcomed the signing of a peace accord by the governorship candidates in the state. The commission disclosed that it would be deploying observation missions to both Edo and Ondo polls while supporting civil society-led observation. It could be recalled that the US government imposed additional visa restrictions on Nigerians who it said are undermining the country’s democracy in the run up to the September and October 2020 Edo and Ondo State elections and their actions surrounding the November 2019 Kogi and Bayelsa State elections. The US State Department did not name those affected but said the visa sanctions were targeted at some individuals who were involved in election violence, not the gen-

eral population. These individuals have so far operated with impunity at the expense of the Nigerian people and have undermined democratic principles, according to a statement issued September 14 by the Morgan Ortagus, Department spokesman. The US said it was a steadfast supporter of Nigerian democracy. “We commend all those Nigerians who participated in elections throughout 2019 and have worked to strengthen Nigerian democratic institutions and processes. We remain committed to working together to advance democracy and respect for human rights and achieve greater peace and prosperity for both our nations. We condemn the acts of violence, intimidation, or corruption that harmed Nigerians and undermined the democratic process.

Prize has transformed my wife’s business - winner in Glo Rewards Cashtoken BUNMI BAILEY

s first set of winners in Glo Rewards Cashtoken promo receive their prizes across the country, one of the winners, William Ubi, has expressed his gratitude to Globacom for helping to transform his wife’s business. Ubi, a civil engineering student of Cross River State University, won N200,000 in the promo, he said he invested in his wife’s business. According to Ubi, “This is my first time of winning in any promo. So when I got a call from Globacom, I was very happy. The money has helped to transform my wife’s business. We added more stocks, especially those that were in demand which we don’t have before. Now, we are selling more and making more profit, thanks to Glo. I pray that God will reward Glo for this unex-

pected gift.” Other winners include Warri-based Anthony Iyemi who won N100,000; Mohammed Tijani, a Kaduna-based farmer; Ugochi Nwabiokeze, a businesswoman in Onelga, Port Harcourt; Sarah Sadiq, a student of Ogun State Institute of Technology, Igbesa; Benson Polycab from Igueben, Edo State, and Ayomide Ibukun, a 300-level student of Marketing at the Ekiti State University, among others, who won N20,000 each as prize. Globacom in a press statement released in Lagos on Monday said the winners emerged from Lagos, Port Harcourt, Abuja, Calabar, Kaduna, Warri, Ilorin, Igueben, and Ibadan. It added that it would continue to provide different empowerment opportunities from time to time, in which they will benefit from the network.

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lobal peer-to-peer bitcoin marketplace, Paxful, has announced the addition of Tether (USDT) to its platform. The inclusion of USDT, the world’s largest stablecoin by market value, will assist users in combating a volatile market, protecting their assets, and expanding their portfolio. The industry has seen a surging demand for a stable digital currency amidst fears of an economic recession in both traditional and digital markets. In the last 12 months, Tether has established itself as a champion amongst stablecoins, with a market capitalisation of over $13 billion. “We consider this a big step for us since this is the first cryptocurrency other than bitcoin we have on the platform,” said Ray Youssef, CEO, and co-founder of Paxful. “We always listen to our users. We understand that they go to Paxful for wealth generation and turn to crypto for stability when their national currency is affected by inflation. We hope that this

can aid them to be more in control of their finances,” Youssef said. The addition comes with a hedging option, allowing users to instantly convert BTC to USDT and vice versa, helping the users to protect their funds during bitcoin price fluctuations. The company also plans to enable USDT trading on the platform. Same as with the bitcoin (BTC) trading in the Paxful marketplace, users can buy and sell USDT with over 300 payment methods. The USDT balance is accessible via the wallet page, where the current market price for both coins is displayed. The launch of this feature marks Paxful’s first step towards potentially adding new cryptocurrencies in the future. The company recently announced that the platform Paxful has hit 4.5 million registered wallets, reached 4.6 billion USD in trading volume, and reduced dispute levels to under 1 percent. Since inception, they have added 1 million users per year and so far in 2020 and are on track to sign up an additional 2 million users by the end of the year.

Rising concern for intellectual property protection as online learning soars MODESTUS ANAESORONYE

ovid-19 pandemic has resulted in exponential transition to online and digital learning across the world, raising concern for intellectual property protection and increasing plagiarism among education experts. According to UNESCO reports, 776.7 million school children worldwide have been affected by school closures since the Covid-19 pandemic, resulting in increased digital course enrolments, and investor interest in education start-ups looking for capital. Experts at NoCopyCopy, an eduTech start-up that has been a witness to these increased activities and its fallouts, has developed the capacity to stand on the frontline of intellectual property protection with its plagiarism checker. According to them, while students study from home, educational bodies will need to ensure that, without their usual systems for invigilation, they would need technological systems in place to protect the integrity of intellectual property attributed during academic assess@Businessdayng

ments. Seeing the increased supply of information as a product, it is important to safeguard the rights of authors and creators and ensure decorous exchange of information within this ecosystem including creators, consumers, researchers and publishers, says EmoreOgho, the chief operating officer, NoCopyCopy. “As a plagiarism checker, NoCopyCopy will help to provide proper referencing of intellectual work to students, lecturers, bloggers, executives and individuals while also preventing plagiarisation of intellectual property across universities and institutions in Nigeria and West Africa.” “We are keeping our focus on driving and supporting the future of online learning,” Emore Ogho said. NoCopyCopy, the foremost indigenous plagiarism checking platform is a social impact Lagos-based educational technology start-up that is pioneering the value of ethics and originality in the Nigerian market by providing a broad spectrum of web platform service and mobile application which verifies the authenticity of documents.

Wednesday 16 September 2020

BUSINESS DAY

Live @ The Exchanges Nigeria’s stock market fails to sustain gains Iheanyi Nwachukwu

n Tuesday S e p t e mb e r 15, the stock market of Africa’s largest economy was unable to sustain previous day’s gains, no thanks to investors in oil & gas counters. More investors offered shares of Seplat Petroleum Development Company Plc which affected the pricing. Seplat led the losers table after moving from N390 to N385, down by N5 or 1.28percent. Red Star Express Plc share price also dipped, from N3.75 to N3.52, losing 23kobo or 6.13percent. Dangote Sugar Refinery Plc decreased from N12.05 to N11.9, losing 15kobo or 1.24percent. Oando Plc share price was also down from N2.38 to N2.25, losing 13kobo or 5.46percent; while NPF Microfinance Bank Plc dipped from N1.38 to N1.25, down by 13kobo or 9.42percent. The negative sentiment seen around oil & gas stocks on the Nigerian Bourse –NSE Oil & Gas Index (-1.16percent) – comes despite that crude oil prices rose on Tuesday, but forecasts of a slower than

expected recovery in global fuel demand due to the Covid-19 pandemic still weighed. Brent crude was up 44 cents, or 1.1percent, at $40.05 a barrel by 1209 GMT, while U.S. West Texas Intermediate (WTI) crude futures were up 52 cents, or 1.4percent, at $37.78 a barrel. Both contracts fell on Monday. Gains in stocks like Lafarge Africa (+3.45percent), Chemical and Allied Product (+1.19percent), and GTBank (+0.20percent) could not reverse the negative. At the close of trading session, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) decreased by 0.03 percent to 25,597.96 points, from preceding day’s high of 25,605.59 points. Likewise, the valued of listed stocks (market capitalisation) decreased by N4billion to N13.354trillion as against preceding day high of N13.358trillion. The stock market’s negative return year-todate (ytd) increased to -4.63percent. In 3,597 deals, investors exchanged 245,139,497 units valued at N3.013billion. Banking stocks were actively traded, led by FBN Holdings, GTBank, Zenith Bank, Stanbic IBTC and Access Bank.

Crypto investments: SEC identifies what will be regulated, who will be regulated Iheanyi Nwachukwu

igeria’s Securities and Exchange Commission (SEC) has indicated its intention to regulate cryptotoken or crypto-coin investments when the character of the investments qualifies as securities transactions. SEC in a statement on digital assets and their classification and treatment indicated what will be regulated as well as who will be regulated in the new order. Digital assets offerings provide alternative investment opportunities for the investing public; it is therefore essential to ensure that these offerings operate in a manner that is consistent with investor protection, the interest of the public, market integrity and transparency. The general objective of regulation is not to hinder technology or stifle innovation, but to create standards that encourage ethical practices that ultimately make for a fair and efficient market.

Section 13 of the Investment and Securities Act, 2007 conferred powers on the Commission as the apex regulator of the Nigerian capital market to regulate investments and securities business in Nigeria. In line with these powers, the SEC has adopted a threepronged objective to regulate innovation, hinged on safety, market deepening and providing solution to problems. This will guide its strategy, its regulations and its interaction with innovators seeking legitimacy and relevance. What will be regulated? The position of the Commission is that virtual crypto assets are securities, unless proven otherwise. Thus, the burden of proving that the crypto assets proposed to be offered are not securities and therefore not under the jurisdiction of the SEC, is placed on the issuer or sponsor of the said assets. Issuers or sponsors are expected to satisfy the burden of proving that the virtual assets do not constitute securities by making an initial assessment filing. However, where

the finding of the Commission is that the virtual assets are indeed securities (not structured to be exclusively offered through crowdfunding portals or other exempt methods), then the issuer or sponsor must register the digital assets. The registration process for virtual assets will therefore involve a two-prong approach – an initial assessment filing to satisfy the burden of proof and a filing for registration proper, either made directly by the issuer or sponsor or where the burden of proof is not satisfied. Similarly, all Digital Assets Token Offering (DATOs), Initial Coin Offerings (ICOs), Security Token ICOs and other Blockchain-based offers of digital assets within Nigeria or by Nigerian issuers or sponsors or foreign issuers targeting Nigerian investors, shall be subject to the regulation of the Commission. Existing digital assets offerings prior to the implementation of the Regulatory Guidelines will have three (3) months to either submit the initial assessment filing or documents for

Nestlé S.A pays N286.9mn for additional 229,697 shares of Nestle Nigeria

n a deal consummated on the Nigeria Bourse on September 11, Nestlé S.A, a Swiss multinational food and drink processing company has further increased its equity stake in the Nestle Nigeria Plc. The world’s largest food & beverage company purchased additional 229,697 units of Nestle Nigeria Plc ordinary shares at N1, 249.65 per share, amounting to N286.9million. The price at which the shares were exchanged represents a discount when compared to reviewed target price (TP) of N1, 343.2 per share which United Capital analysts set for the stock in their August 4 note to inves-

tors. In that note, the analysts maintained their “Buy” rating on the ticker. Nestle Nigeria Plc’s financial result for half-year (H1) 2020 show both revenue and profit after tax declined by 0.6 percent year-on-year (y/y) and 16.8percent to N141billion and N21.8billion, respectively. This was as all the cost items save for selling and distribution expense grew y/y across the board. Nestlé S.A is the largest food company in the world, measured by revenues and other metrics. Nestlé’s products include baby food, medical food, bottled water, breakfast cereals, coffee and tea, confectionery, dairy products, ice cream, frozen food, pet foods, and snacks. www.businessday.ng

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registration proper, as the case may be. Who will be regulated? Any person, (individual or corporate) whose activities involve any aspect of Blockchain-related and virtual digital asset services, must be registered by the Commission and as such, will be subject to the regulatory guidelines. Such services include, but are not limited to reception, transmission and execution of orders on behalf of other persons, dealers on own account, portfolio management, investment advice, custodian or nominee services. Issuers or sponsors (startups or existing corporations) of virtual digital assets shall be guided by the Commission’s regulation. The Commission may require Foreign or nonresidential issuers or sponsors to establish a branch office within Nigeria. However foreign issuers or sponsors will be recognized by the Commission where a reciprocal agreement exists between Nigeria and the country of the foreign issuer or sponsor.

Wednesday 16 September 2020

BUSINESS DAY

POLITICS & POLICY

PDP urges INEC, security agencies to fulfill promises on credible, peaceful poll in Edo IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin

he People’s Democratic Party (PDP) on Tuesday asked the Independent National Electoral Commission (INEC) and security agencies to fulfill their promises on the conduct of free, fair and credible Edo State governorship election on Saturday. The party also called for the end to godfatherism in the country. The National Chairman of the party, Uche Secondus; Rivers State Governor, Nyesom Wike and Sokoto State Governor, Aminu Tambuwal made the call at the party’s governorship election mega campaign rally in Benin City. Wike, in his goodwill message, said INEC and security agencies have no reason not to conduct the election in line with their promises The Rivers State governor, who urged the electorate not to take the promises by the electoral umpire and security agencies seriously, advised them to be vigilant and defend their votes against rigging.

“Security agencies said nobody will rig the election while INEC said the election will be free, fair and credible but never take their words serious. “Anybody that wants to eliminate godfatherism must on Saturday vote for the reelection of Governor Godwin

Obaseki,” he said. According to Wike, “The end to godfatherism in the country must start from Edo State. If you don’t vote for Obaseki godfatherism will continue. “If we must fight and put an end to godfatherism in Nigeria, it must start on Sat-

L-R: Olubeshe of Ibeshe Kingdom, Oba Richard Ogunsanya; Adeboruwa of Igbogbo Kingdom, Oba AbdulSemiu Kasali; the candidate of All Progressives Congress (APC) for Lagos East senatorial by-election, Tokunbo Abiru and Ayangbure of Ikorodu, Oba Kabiru Shotobi at the meeting of Lagos State Ijebu Traditional Rulers at the palace of Odo-Noforija, Epe… Monday.

he candidate of the All Progressives Congress (APC) for the October 31 Lagos East senatorial by-election, Tokunbo Abiru has appealed to the party faithful and leaders in the senatorial district to use the forthcoming byelection to prove the voting strength of Lagos State to the entire country. Abiru, former commissioner for Finance in Lagos State, has also pleaded with the party faithful to go from community to community, house to house and local council to local council, convincing about two million registered electorate in Lagos East to vote the APC and his candidate in the next bye-election. He made the appeal at a meeting with the APC leaders in Epe Division on Monday, promising them people-oriented representation and assuring them that he would always put people and party first if and when elected. The meeting, held at the residence of a Governance Advisory Council (GAC) member in Epe, Akanni Seriki, was attended by the Vice Chairman of Lagos APC, Kaoli Olusanya; the husband of Ogun State Deputy Governor, Bode Oyedele, and a member of the

House of Representatives, Hon. Wale Raji, among others. After the meeting with the party leaders, Abiru had another meeting with the Council of Lagos State Ijebu Traditional Rulers at the palace of the Aladeshonyin of Odo-Noforija, Oba Babatunde Ogunlaja, also in Epe Local Government Area. The monarchs, who were at the council meeting, include the Ayangbure of Ikorodu, Oba Kabiru Shotobi; Oloja of Epe Land, Oba Kamorudeen Animashaun; Olubeshe of Ibeshe, Oba Rasheed Ogunsanya and 15 others. Abiru, the immediate past group managing director/chief executive officer, Polaris Bank Limited, told the traditional rulers that voting the APC in the by-election “is a decision no resident of Lagos East will ever regret,” reeling out programme of action he had mapped to make a difference if elected. He reminded the traditional rulers that the INEC “has already scheduled our by-election for October 31. It is only six weeks away. We need your support to win this by-election. We also need the support of your subjects to vote for my party and me on the day of the election.” According to him, “We must use this by-election to show the strength of APC not www.businessday.ng

be vigilant and ensure that Obaseki wins.” “Obaseki must be voted for to kill godfatherism in Nigeria. The Edo election is important as it will show the way out for godfatherism in Nigeria”, he further said. On his part, Sokoto State governor, Aminu Tambuwal urged the people of the state not to sell their freedom. He also appealed to INEC to conduct free, fair and credible election while security agencies should maintain law and order and not to intimidate voters in favour of any political party. “If you are intimidated don’t be afraid. We will be in the state for you on the Election Day. Vote for continuity, vote for Governor Godwin Obaseki. Protect your integrity and freedom. “The right thing to do on Saturday is by voting for good governance and continuity,” he said. Also speaking, the National Chairman of PDP, Uche Secondus said that Nigeria’s democracy was on a keg of gun powder because of rigging. Secondus, who said rigging must be stopped in Edo state, noted that if it is not stopped

it will be difficult to conduct election in Nigeria. “Security agencies have made promises and we want to see how they are going to fulfill the promises. Without fulfilling their promises there will be no election again in Nigeria,” he added. He said as a performing governor, the state governor toured the 192 wards across the 18 local government areas to campaign. In his remarks, Edo state Governor, Godwin Obaseki called on Edo people to come out en masse to vote for PDP and ensure that he returns to consolidate his developmental achievements in the state. “Democracy is not government of godfathers but it is a government by the people, for the people. In Edo we have been fighting godfatherism and by Saturday we will put an end to it in Edo State and after that come for the one in Lagos and put an end to godfatherism in Nigeria. “The godfather disturbing Nigeria came up this morning, he is afraid because he knows when we finish that of Edo, we will come for him in Lagos and finally end godfatherism in Nigeria,” he said.

Ondo 2020: ZLP candidate, Ajayi, accuses Akeredolu of frustrating party’s campaign rally

Prove Lagos voting strength with by-election, Abiru tells APC leaders INIOBONG IWOK

urday in Edo State. It’s an opportunity to put an end to godfatherism in Nigeria. “IGP has assured us of a secured election in Edo and INEC Chairman also assured Edo people of a free, fair and credible election but don’t let us go and sleep with all these promises but stay awake and

only in Lagos East, but also in Lagos State to the entire country. We must reach out to those who have decided for our party and those who have not decided for our party. We must prevail upon them all to vote for us massively.” He also promised to focus on the welfare of his constituents in Lagos East and use the position of a senator, his energy and resources to ensure their empowerment, prosperity, security, welfare and well being. He said that he would work with the Governor of Lagos State, Babajide Sanwo-Olu “to ensure completion of all infrastructural projects in Lagos East. With his support too, Mr. Governor will initiate new projects in Lagos East in line with his agenda. Speaking on behalf of his colleagues, Oloja of Epe Land, Oba Kamorudeen Animashaun commended the APC for putting forward a quality candidate, who served in the banking industry and public service in different capacities for over three decades with untainted record The monarchs urged the senatorial candidate to put the interest of the people first at all times. Collectively, the monarchs prayed for Abiru that he would emerge victorious in the forthcoming by-election.

KORETIMI AKINTUNDE, Akure

andidate of the Zenith Labour Party (ZLP) in the forthcoming October 10 governorship election in Ondo State, Agboola Ajayi, has alleged that his boss, Oluwarotimi Akeredolu was frustrating all efforts of his party to hold its campaign rally in Akure. Ajayi, who is the deputy governor of the state, said his boss, Akeredolu had introduced policies that never existed in the state before in order not to allow him kick start his campaign rally at the state capital. The state governor, has however, denied the allegation, describing it as tissue of lies. Recall that the ruling APC and PDP have kick-started their campaign rallies while ZLP is about to flag-off its own. The deputy governor, who had raised concerns over an alleged plot by Akeredolu to frustrate the launch of his campaign rally, said, “It is disheartening that Governor Akeredolu, a Senior Advocate of Nigeria, can preside over a government that would deny the ZLP the use of any public facility especially the

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Democracy Park built under the visionary leadership of Dr. Olusegun Mimiko, who is the national leader of the ZLP.” The deputy governor, through his Special Adviser on Media, Allen Sowore, alleged that the state government failed to release the Democracy Park to the party for the conduct of its rally despite adhering to all laid down rules of the government. “The Office of the Ondo State Deputy Governor and candidate of the ZLP, Agboola Ajayi is again constrained to draw the attention of the general public, particularly, the good people of Ondo State to the growing intolerance and undemocratic temperament of Governor Rotimi Akeredolu towards the people’s choice as the October 10 governorship election approaches. ‘Let it be known that the Zenith Labour Party applied for the usage of the MKO Abiola Democracy Park, Akure, to flag off its campaign rally. After the successful completion of all due process, the agency responsible, acting on the instruction of Ondo State governor deliberately hiked the price from the original N5million, which the venue was given out to the People’s Democratic Party (PDP) for @Businessdayng

its own rally on Saturday, 12th September, 2020. ‘Even at that, the ZLP was ready to pay the N11million charged but the official in charge disappeared. It then became clear that Governor Akeredolu was ready to frustrate the ZLP. This is a condemnable act.” According to him, “Ondo State belongs to all of us and nobody should use the mere privilege of leadership to ruin our prestige as the state of courageous and enlightened people. “We, therefore, call on all elder statesmen, religious leaders, lovers of democracy and all discerning minds to advise Governor Akeredolu to toe the path of honour and desist from undemocratic and perfidious acts,” Sowore said. But Tobi Ogunleye, special adviser to the governor on transport, who spoke with BusinessDay on the allegation, said: “The allegation started on the premises of lies because the issue of N11million did not in anywhere arise. That is number one lie; please ask them to give you the authentic story. “Even the issue of negotiation is not within my purview. So, they should not shift this lie to me; I take exception to blackmail.”

Insight

BUSINESS DAY Wednesday 16 September 2020 www.businessday.ng

Women empowerment is economic empowerment Nkem Okocha

eingFemaleInNigeria means that as a rural woman, you are not likely to have the title deed for land – a vital source of collateral for accessing business loans. The extent to which female business owners are neglected is most evident when it comes to access to credit and formal financial services that they need to start or grow their business. This affects women like Rakiyah, a private school teacher and mother of young twin girls, who was unable to take out a loan for her petty trade and salon because, as a woman, she did not have the collateral required by conventional banks. Most financial systems have been designed by and for men, resulting in systemic obstacles to women’s financial inclusion. That is especially true for the marginalised women at the bottom of the pyramid in Nigeria who disproportionately face financial access barriers that prevent them from participating in the economy and from improving their lives. Five years ago, Nigerian women started a global conversation – inspired by Chimamanda Ngozi Adichie’s “We Should All Be Feminists” talk – that allowed Nigerian women to share their experiences of gender inequality, sexism and misogyny in the country using the hashtag #BeingFemaleInNigeria. Refreshingly, some men also took to the hashtag. One common thread that runs through most of the #BeingFemaleInNigeria stories is the gap between what women know their potential to be and what society would deem it to be. The impact of #BeingFemaleInNigeria points to broader discussions we should be having about gender and sustainable development. Global movements, like #BeingFemaleInNigeria are refocusing attention on the discrimination that women face in their social and professional lives. However, we must not forget that in the most impoverished communities, poverty, hunger, domestic violence and discrimination remain endemic obstacles to achieving real progress regarding the situation of women in society. The women at the bottom of the pyramid care more about feeding their children, educating them, growing their businesses and not having to worry about whether or not one small illness will be the straw that renders them homeless. How can we ensure that movements like these translate to a better life for ALL women? How can we achieve inclusive and equitable economic growth if women do not have access to the same opportunities to thrive and be successful?

The cost of gender inequality Gender discrimination is not just wrong; it is expensive. Evidence suggests that gender and income inequalities can impede labour market productivity, which is one key component of economic development; however, this effect is even more detrimental to Nigeria’s growth due to the significant role women play in the economy. Data from the National Bureau of Statistics (NBS) shows that 49.5 percent of the population is female. Consider how gender inequality may affect our economic growth and development ; by excluding half of the population from participating fully in economic activities, we are automatically reducing the quantity and quality of skilled labour as a factor of production. Let us take agriculture as a reference point. In Nigeria, agriculture remains one of the most important sectors of the economy and women contribute between 40 percent to an estimated 60-79 percent of the labour force in Nigeria’s agricultural sector depending on if you agree with the World Bank or Food and Agriculture Organization of the United Nations (FAO). Consequently, when female farmers are not empowered and do not have access to credit to make better decisions about land that they work, it is impossible for them to effectively utilise land as a means of food production and income generation. In the same vein, a micro-business entrepreneur can hardly save for the rainy days. With 59 percent of women in Nigeria living in rural areas, many of them have limited access to banks, mobile phones and economic activities. Looking at China, data on the effect of gender-specific earnings on gender inequality shows that increasing female income, holding male income constant, improves survival rates for girls and increases educational attainment of all children. In contrast, increasing male income, keeping

female income steady, worsens survival rates and educational attainment for girls, with no impact on boys. The data illustrates that there is significant economic value that empowering women will add to addressing and correcting institutional constraints that feed gender inequalities, which hurt economic growth. Ripple effect All data points in the same direction: investing in women’s economic empowerment is critical to unlock their economic and social potential. Yet, they are continuously side-lined in critical roles and Nigerian women continue to rank lower on all indexes of human development. One of the most effective ways to create an enabling environment for women anywhere, especially the women at the bottom of the pyramid, is to promote their financial independence. Empow-

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When female farmers are not empowered and do not have access to credit to make better decisions about land that they work, it is impossible for them to effectively utilise land as a means of food production and income generation

ering them with information and needed skills that can be commercialised within their small area of influence is a good start. When a woman is able to feed herself and her children in dignity, she is encouraged to imagine the possibility of a better life and future for her children which includes better nutrition and schooling. By providing small sustainable loans that are easily accessed either via co-operatives or microfinance banks, Rakiyah can increase her business stock, diversify her income by setting up a salon, manage her finances in a way that she can successfully repay it, making room for more women to access even more loans. The value proposition of non-conventional banks is the guarantee of access to credit at zero to low interest rates, requiring no collateral. In our work at Mamamoni, we have found that encouraging the financial independence of women helps increase the awareness and respect for women’s human dignity. A few months ago, Joy was brought to our Innovation centre by her sister-in-law. She was despondent and contemplating suicide because she had no means of taking care of herself or her children. The lockdown was in its second month and we had just received some food palliatives from the Federal Government’s Victim Support Fund (VSF); so, we gave her a bag. Then we launched the Mamamoni Covid-19 Relief Grant and gave her a small loan to start a petty business. She bought cooking oil, crayfish, garri, melon and other soup condiments for sale in small bits – she literally transformed physically because of this new source of livelihood. She laughs more, is happy and does not default on her loan repayment which is structured to suit her cash flow. She is planning to put her kids in school next January. If financial inclusion is ensuring that every person within the adult population of a country can access financial services, then non-conventional approaches

need to be encouraged to drive inclusion and empower the vast number of marginalised women who continue to strive to accomplish so much, despite having so little. However, for us to realise the full potential of women, microfinance institutions need to focus more on investing time and targeted resources to address infrastructural inadequacies that will ensure the most disadvantaged in society have access to the same opportunities to thrive and be successful. Em p owe r i n g wo m e n i s smart economics In terms of gender equality and development, Nigerians may be becoming more aware of gender discrimination and having the necessary thought-provoking conversations on gender roles thanks to social media. However, Nigeria still has quite a long way to go. While societal limitations and cultural traditions often undervalue and underestimate women’s potential, women face all kinds of hidden barriers to accessing finance – just because they are women. This is a status quo that must change - not only because it is the right thing to do, but because it is the smart thing to do. More importantly, the issue of empowering women cannot be seen as coming at the expense of men. The discussion so far illustrates that we all gain more. As we engineer solutions to solve our exclusion rates, it requires collective and intentional efforts from men and women to make fundamental changes to ensure that future generations of Nigerians have a different attitude towards gender roles. More directly, as we continue on the long march to parity and to have our voices heard, I think it’s time to have that #BeingFemaleInNigeria conversation again. This time, there is a tremendous amount to be learned from people like Rakiyah and Joy at the bottom of the pyramid who bear the brunt in a world that continually finds new and ingenious ways to tear them down.

Okocha is founder/CEO, Mamamoni

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