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news you can trust I ** wednesDAY 17 june 2020 I vol. 19, no 586

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Nigerians dissatisfied with government’s response to COVID-19 …Call for subsidy removal, naira devaluation MICHAEL ANI & SEGUN ADAMS

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articipants at the ongoing BusinessDay national discourse on Nigeria’s response to the coronavirus pandemic have expressed dissatisfaction with the government’s response to the coronavirus pandemic.

The participants also voted for a removal of the petroleum subsidy which experts have advised would allow Nigeria to redirect resources to more productive uses and make the downstream oil sector more attractive.

They also voted for the devaluation of the country’s currency, the naira, noting that it would help in building investor confidence and attracting more dollar investments into the country.

They, however, expressed doubts Continues on page 29

Inside

Edo 2020: Obaseki, Shaibu dump APC, to press on with fight against P. 28 godfathers How Nigeria’s power sector bleeds over N40bn monthly P. 28

L-R (1st row): Paul Collier, professor of Economics & Public Policy, Blavatnik School of Government/director, International Growth Centre; Mansur Ahmed, president, Manufacturers Association of Nigeria; Ibukun Awosika, chairman, board of directors, First Bank of Nigeria Limited; (2nd row): Zainab Ahmed, minister of finance, budget and national planning, and Frank Aigbogun, publisher, BusinessDay Media, during a panel session tagged ‘Mapping Nigeria’s fiscal strategy and response’, at the BusinessDay digital dialogues with the theme ‘A National Conversation: Mapping Nigeria’s Response to COVID-19’, yesterday.

COVID-19 provides catalyst for economic reforms in Nigeria – finance minister T HOPE MOSES-ASHIKE, ENDURANCE OKAFOR & OLUFIKAYO OWOEYE

he COVID-19 pandemic that has ravaged the global economy has served as a catalyst for economic reforms in Nigeria, Zainab Ahmed, minister of finance, budget & national planning, said

Collier: A unified exchange rate works for everyone Experts urge implementation of bolder reforms

on Tuesday.

Ahmed said Nigeria, just like everybody in the world,

today finds itself in a global health crisis that has very quickly snowballed and become global

See full coverage of BusinessDay National Conversation on pages 30,31

economic crisis.

But the pandemic has helped the country to take a very criti-

Continues on page 29

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Edo 2020: Obaseki should be supported!

Franklin Ngwu

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ith the Edo state governorship election fixed for 19th September 2020, late night meetings, permutations, alignments and strategies are on top gear to win the primaries of the two main political parties- All Progressives Congress (APC) and Peoples Democratic Party (PDP). Reason being that the next governor of the state will most likely emerge from one of the two parties. While such politicking is expected, what is worrying are the criteria being used in deciding the most suitable candidate. Under normal circumstances, the focus should be on the candidate with the requisite understanding and capability to provide good governance of the state.

In our dear country Nigeria and presently in Edo state particularly in APC the reverse is the case and the more you look, the less you see. In ranking the factors currently being used to select the APC candidate, it seems that deep understanding of the development needs of Edo state and capability to deliver are seemingly not included. If they are, the unnecessary and enervating animosities within the party and its consequent polarisation

would not be the case. The more disturbing aspect of the quarrels is that it is mainly ego driven and consequently to the detriment of Edo state citizens.

Nobody is questioning the credentials and possible capability of candidates such as Osagie Ize-Iyamu, but the factors behind their sudden realignment and support suggest that the overriding interest and focus is the removal of Godwin Obaseki and not the inclusive and sustainable development of Edo state.

Having followed the policies, actions and inactions of the 36 governors in Nigeria, Godwin Obaseki will be ranked among the top five in terms of understanding what good governance entails and the capability to deliver.

Even with the needless squabbles between him and Adams Oshiomhole that have caused unimaginable costs and distraction, Obaseki’s policies are clear and his inclusive sustainable development strides are very visible.

During the governors’ roundtable in the last Nigeria Economic Summit which I moderated, his contributions were thorough, deep and convincing.

In my interactions with participants that attended the session, the verdict was unanimous that he is focused and endowed to lead Edo state on the part of meaningful and lasting progress.

Many wished that they had leaders like Obaseki as their governor!

As one of the few islands of governance rectitude in a sea of governance turpitude, it is important that all hands are on deck to support him particularly to win his second term. And this is particularly important and a task for all Edo elders, leaders and anyone interested in the sustainable progress of Edo state and Nigeria. Given Obaseki’s policies and actions in Education/ human capital development, Agriculture, Vulnerable groups like pensioners, infrastructure and other sectors, Edo state is emerging as a reference state of visionary leadership. In the

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With such encouraging performance, all concerned should implore Adams Oshiomhole to please consider the wider interest of Edo people particularly the poor and support Obaseki’s second term bid. In the same vein, Obaseki should do all within his power to make peace with Oshiomhole and other warring factions without mortgaging the larger interests of Edo people

last report on poverty and inequality in Nigeria by the National Bureau of Statistics (NBS), Edo state was ranked as the sixth state with the lowest poverty rate in Nigeria with only about 12 percent of her citizens classified as being below the poverty line.

With such encouraging performance, all concerned should implore Adams Oshiomhole to please consider the wider interest of Edo people particularly the poor and support Obaseki’s second term bid. In the same vein, Obaseki should do all within his power to make peace with Oshiomhole and other warring factions without mortgaging the larger interests of Edo people. While ego is inherent in men, it is important to appreciate that good legacies will be better and more lasting than temporal exuberance of power and influence.

As Oshiomhole is 68 years and Obaseki 60 years, a fundamental question is how many years they have left before they are recalled for an audit of their actions and inactions while here on earth. Life expectancy in Nigeria is about 54 years!

Given their close relationship and circumstances that led to Obaseki’s emergence as the governor of Edo state in 2016, it is important for Oshiomhole to realise that Obaseki’s failure is also his failure and his success, also his success. Having worked closely for many years, the good and endearing qualities of Obaseki should be remembered in the present gang up to crucify him. He might have been wrong in some of his actions, inactions and utterances but as his focus and determination for a better Edo state remains unshakeable, they say that to err is human and to forgive is divine.

It is in this context that many nonEdo state indigenes that have intervened in the matter are concerned and imploring PMB, APC leaders, Edo elders and leaders of thought to increase their efforts in resolving the matter to

ensure Obaseki’s second term. This is not the time to be on the fence or take sides, it is time to stand up for the good and progress of Edo state and Nigeria.

That has been the overriding interest of many including one of our revered religious leaders that I must not fail to appreciate. Even though not from Edo state, he has selflessly and most commendably tried to intervene in Edo political crisis including the intractable faceoff between Oshiomhole and Oyegun.

If history and experience can be appreciated and used by Nigerian politicians and leaders, it is glaring that supporting candidates mainly on the personal interests of supposed god fathers is counterproductive.

With instances in almost every state in Nigeria, it is time for our politicians and leaders to appreciate that what should be central in supporting a candidate is the observed capability and disposition of the candidate to the sustainable growth and development of the society. As Godwin Obaseki has convincingly proven that he has both the capability and inherent desire to make Edo state one of the outliers of success in Nigeria, I implore those he has offended particularly Comrade Adams Oshiomhole to forgive and support him! While Galatians 6:9, counsels us ‘’not to become weary in doing good, for at the proper time we will reap a harvest if we do not give up, Philippians 2:3 tells us to ‘do nothing out of selfish ambition or vain conceit. Rather in humility value others above yourselves”. Proverbs 29:2 also states that “When the righteous are in authority, the people rejoice but when the wicked rules, the people groan”.

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.

Digital transformation? Let’s start with your digital quotient

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any businesses succeeded by doing what worked and fine tuning that formula to stay ahead of the curve. This formula has become long standing and ensured success, creating an “inhouse style” or “way or working” that shuns every other model. But what happens when the winning formula doesn’t work as well anymore? Or just doesn’t work anymore?

Many organisations have gotten to this point and find it difficult to pivot in order to keep ahead of that curve they once were.

Some try to tweak the former model in the hopes that things will improve; but it is rarely enough to get the company back on a long term, sustainable path.

The answer then becomes apparent in the need to change modus operandi, design a new method and adapt in order to get things working again. A real need for a transformative approach that will regenerate the organisation and return its viability.

If you have thought about change at all, then you have begun the journey towards success again. Adapting may take some time but it is not the destination so much as it is the journey that situates you for the next big thing.

Do you know the consumer of today?

Today’s consumer is peculiar. They are digital, global, informed and trendy. They want products and services that push the boundaries of your brand promise. They want

service delivery that is unparalleled and want the same feat repeated the next day.

If there’s been an “Act of God”, they want to know what your opinion on the matter is, if you have one, and if you don’t have one, they wonder why you don’t have one.

They want to associate with symbols and identities that reflect their aspirational views for a better tomorrow.

They are involved in social issues and want to feel like they’re consuming products or services from a company whose brand also has a stand on social issues.

Their loyalty can be fickle but once you get it, it’s yours for keeps.

How do you measure up?

So, let’s look at some of the parameters that measure your readiness to transform your business and ensure it stays ahead of this curve, for a long time to come.

How bold is your business vision?

A business vision may be grand or simple but it must be tenable. When you think of the future of your business, the vivid mental images you envision must be clear and focused with a representation of the essence or core of what your business is about. Your vision should contain an element of inspiration as it lays the groundwork for your employees to work out the fine prints towards achievement.

Are you open to new ideas?

Are you stuck on the old ways or can you

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reinvent yourself? Keeping an open mind involves positioning your business to appeal to the times while maintaining your essence.

If you are a products company, have you considered offering delivery services, receiving payments via mobile transfers or setting up a virtual shop? New ideas can be as simple as developing a communications policy to customers or adopting digital footprints for better reach.

How ready are you to adopt a digital process?

Have you considered that your everyday business operations can be streamlined by making a simple shift towards digitizing the process? It may involve holding quick virtual check-ins on WhatsApp with your team instead of having long physical meetings that would require hours of commute. How about automating processes such as invoicing or taking bookings through a scheduling tool widget like simplybook.me What would your new digital technologies comprise?

In the long line up of digital technologies that aid CRM, marketing automation, Enterprise Resource planning, Accounting, Payroll amongst others, which of these would your organization be readily able to adopt?

Remember that acquiring technology is one thing, equipping employees with the skills required to fully utilise them, is another.

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Ndidi Obinwanne

How cloud savvy is your organisation?

Have you ever had a meeting in one part of town and as the meeting progressed, realised that additional information was required and you wished you could access it where it lay, on your desk, in another part of town? If this sounds more than familiar to you perhaps it’s time to explore cloud services - storing data in a virtual storage system that can be accessible anytime, anywhere.

Before thinking digital transformation, determining your digital quotient and readiness to transition your processes will reverse the tides in your favor for the big wins of the future.

Ndidi Obinwanne is the Client Success Manager at Squad Digital Nigeria. She’s adept at Digital Transformation, Brand Building, Voice Over Artistry and passionate about building sustainable solutions for the African continent.

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Crisis or opportunity = remove or reinvent Small Business handbook

Emeka Osuji

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he present pandemic may not have been our best wish for 2020. It was a terrible gift from whoever it was that manufactured and unleashed it upon us. Bad as it may be, there is nothing in this world that is patently bad. Without exception, there is always something good about every situation. Last week, I said something to the effect that even when a product is most successfully launched, it could still fail. When that happens, those impacted naturally feel bad. However, the failure of a product could teach us great lessons that could inform the next generation of innovative products. There is therefore nothing that is without a bright side. As Christians should recall, the Scriptures say that God made them male and female. The laws of Physics also tell us that action and reaction are equal and opposite. There are years of plenty and those of adversity.

Indeed, the world is naturally dualistic, permitting, almost always, the beneficial coexistence of phenomena that are often antagonistic.

Opulent Victoria Island could hardly exist without the squalor that used to be known as Maroko. The two communities had a symbiotic relationship, in the sense that the rich in the former needed the services of the artisan in the latter but

opposed its existence. Maroko eventually lost its life to the internecine feud between the two neighborhoods. While it lasted, the bad thing was that Maroko provided services that were vital to the survival of Victoria Island, including shoe-shiners, tailors and such. There are always two sides to a coin, a head and a tail. There is also always a fair side and a dark side of every event and our duty is to find the fair side. The current pandemic is not an exception. It therefore follows that one of the key ingredients for survival at this time, and thriving thereafter, is the ability to see and recognize the fair side of the pandemic and work it.

If you run a business (especially in the MSME sector), and cannot point to what you have done differently that has made you hopeful that things are not going to get better, then you need to do more.

The preparation for the next season of plenty is already in high gear elsewhere.

Over the past several weeks of lockdown, some have discovered many cost-saving ways of doing things that they are grateful about. For instance, the resort to online activity has slashed corporate travel costs in half. If anyone has not noticed this, then something is going wrong in their shops. Not only should we be pointing to concrete action plans for the next phase of our businesses, we should actually have alternative business ideas now lining up.

Anything short of that would suggest that one has been going through this crisis without much observation or with scant attention to developments. Some new business ideas have come ashore and people are already trying some out on a pilot basis. Any entrepreneur that is unaware of these events is like a pastor who claims that God has called him when indeed, he called himself. He

probably heard his own voice and said the Lord had spoken. While there is no way to avoid the massive hardship that is ahead, there are good things that await survivors. Finding them is the task of your strategists.

From the midst of the pandemic, two clear words have resounded very loudly, for those who are paying attention. The clear words are: Crisis and Opportunity.

Those words are ringing out to businesses, individuals and corporate entities, to be aware that a new era is breaking in business. For the agile organisation, the new era begins with a clear understanding that the crisis at hand could wipe out, not just a lot of businesses but also their owners. The implication is that both individuals and businesses must do all that they can to survive the pandemic.

While individuals must strictly adhere to the safety guidelines issued by the NCDC, companies must take a variety of steps, some of which we had discussed in earlier editions of this column, not just to survive, but to be able to run at the gun.

An important underlying principle that would guide corporate survival action is the understanding that the pandemic will pass and prosperity will return at the end of it. This principle is anchored on the indubitable fact that every crisis brings something good but only the survivors can taste of it.

The fact that the same word or symbol represents both crisis and opportunity in Chinese is a well-canvassed and discussed motivational topic. Despite some errors in the interpretation of the symbol, the concept of crisis and opportunity being kindred spirits is now internalised. Those going through a crisis must therefore have deeper reflection on its connection to opportunity and prosperity, and be on the lookout.

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The pandemic may be a crisis and an opportunity commingled but it is also an invitation to reinvent oneself or be removed.

Only those who transform themselves to exploit the opportunities will remain.

However, this ability to exploit will call for both internal and external reforms process, including technological adaptation

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

A man for all seasons

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any Christians like myself have often asked why, of all the great and distinguished men of God, God seemed to be uncommonly partial to David. After all, God Himself called him “a man after His own heart” despite all his well celebrated frailties, leaving little room to dispute God’s partiality. It’s worthy to note however that it wasn’t because David was in any way perfect.

Phew! Good to know there’s still hope for me yet. At this point, I feel I must let you know that I do not in any way or form qualify to be called a Bible scholar. My inquisitive mind just gets the better of me at times, that’s all.

Many postulate that this special fondness is because of David’s big heart of continual gratitude to God and his humble mien. We know he was always quick to repent and he praised God almost unceasingly. This heart of gratitude aligns perfectly with my acronym, MINDS. This is an acronym of virtues and ideals which I formed and propagated, with the belief that they could go a long way in transforming our society if they become widely and genuinely adopted by us all.

The first letter, “M”, represents manners and the rest are “I” for integrity, “N” for neighbourly love, “D” for discipline and “S” for success. I believe any well-schooled primary school child will tell you, without thinking too hard, that in addition to prefixing your requests with the word “please” and saying “sorry” when you’re wrong or have hurt another, the other sacrosanct of good upbringing is to say those simple words, “thank you”. It’s not only men who love it when you express gratitude to them, God does too.

Or perhaps this partiality, which God sees no reason to disguise is because David had a burning desire to build a house for Him. This was a longing which didn’t appear to feature too high in the aspirations of David’s predecessors as leaders. Not even the beloved Moses. Was it David’s humility?

As the Ark of the Covenant made its triumphant

entry into Jerusalem, David danced like a man who had no cares in the world. Least of all, what his subjects thought of his very public display of gratitude to the almighty God. His attitude was a classic example of: “Those who exalt themselves will be humbled and those who humble themselves will be exalted.” God in His infinite mercy had taken him from the lowly occupation of being a mere shepherd boy and even being the least in his family, to the throne of his nation. What more could one ask for? But still, scripture tells us that of all the people on the face of the earth in Moses’s day, there was none as humble or as meek as Moses, so even this is not enough to explain David’s very special place in the heart of God. Don’t get me wrong. Each and every one of these attributes is truly excellent and is worthy of emulation but there must have been something extra, that stood him out amongst so many extraordinary leaders.

I’ve taken more than a cursory look into the life of this larger than life character and one thing I observed again and again was that David gave of himself completely. Every talent he was endowed with was nurtured and expended for the good of others, his nation and to the glory of God who gifted him with these talents in the first place.

He used all his talents to the full and this pleased God immensely.

I daresay David went to his grave with no gift unutilized. How many of us could boast of this, if God was to call us up today? As a warrior he was not only great, but almost unrivalled. Where king Saul slayed a thousand, to his chagrin, the women sang that David killed ten thousand. As a fearless youth he defeated and killed the Israelites’ nemesis, Goliath, who nobody else dared to fight.

Even when still a shepherd boy, he employed all inherent skills to excel.

As a prophet he was up there. We seldom think of David as a prophet but he was. Many of his Psalms were highly prophetic. As a poet, well,

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we need look no further than the Psalms, that wonderful book of prose, to see ample evidence of his gift with words. Furthermore, as a musician he was so skilled that when King Saul needed an able musician in the palace to temper his evil mood swings, he was the one sought out. His skill, talent and diligence literally made room for him and brought him before the king, just as the good book promises:” A man’s gift makes room for him and brings him before great men.”

As a man of uncanny faith, David trusted that God would certainly do what He said He would do. Hence why he repeatedly resisted the urge to kill Saul in order to accelerate his ascendancy to the throne, despite what appeared like numerous “God given” opportunities. This alone speaks volumes of self-discipline, one of my MINDS’ virtues.

He saw no need to “help” God. The lesson I see here is; bide your time. Remain under tutelage and humble yourself to leadership until you’re truly ready to stand on your own. Combat every urge of over ambition, no matter how alluring.

Failure to do so has stunted and even spelt the end of many otherwise glorious destinies. Wait for your time. As a king, David’s nation reverend no one quite like they do him, till date. Amongst other things, he’s credited with having brought his people back to God. He also shaped his environment rather than allow the environment to shape him. Too many of us have acceded to the less than noble dictates of our environment; giving in to societal aberrations instead of marking society with our stamp of good character.

David was a man of tremendous integrity who acknowledged his mistakes and was ever ready to make amends. He exemplified uncommon neighbourly love and compassion when he insisted on sharing the spoils of war equally amongst the four hundred soldiers who fought to recover all they had lost at Ziklag, with the two hundred soldiers who were too feeble to complete the journey, let alone fight. Albeit, in spite of the legitimate protest

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It follows that there is always a price tag (apologies to James Hardly Chase), the famous British novelist. The pandemic may be a crisis and an opportunity commingled but it is also an invitation to reinvent oneself or be removed. Only those who transform themselves to exploit the opportunities will remain.

However, this ability to exploit will call for both internal and external reforms processes, including technological adaptation. The reforms will not be limited to operational modalities but would involve much more, including a review of the entire purpose and mission of the entity.

The role of technology in the coming era is enormous and pervasive. It will not be an optional but a compulsory component of the new driving forces of business.

Anyone leading a business, whether as an entrepreneur or a professional manager, that is yet to see the thin lines that would define the coming era in business, especially in the area of technology, should be genuinely worried. Smart business people are using the lockdown to improve their skills. Last week I said we should all seek our own Blue Oceans and aspire to build our own monopolies. It is trite that a well-trodden part leads to no fortune. Only a monopoly, used here to encompass new ideas, improvement to existing technologies or completely new ones, can bring uncontested fortune. One good thing about the pandemic is that it came early enough; just before anyone began the implementation of their 2020 budgets. It destroyed all assumptions behind our budgets and plan. We can therefore make new ones based on better insights.

Character Matters with Daps

Dapo Akande of the former group.

A wise man once said, “there are those who go through life holding on to the sides”. David cannot be said to be such a man. He took risks, stared down both physical and mental adversaries and used everything he had at his disposal to overcome and succeed in his life assignment.

He rose up to every occasion. The world currently finds itself in perilous times as the majority of citizens of just about every country, stare into the abyss of an uncertain future.

If we are to take a cue from David who for many years suffered hunger, deprivation and constant fear as he fled for his life in the wilderness, this is the time to dig in, discover and nurture latent talents while wisely developing new skills for this period characterised by a whole new set of “normal”. This is the time to position oneself as the man for this season. As Johann Wolfgang von Goethe once rightly noted: “Talent develops in quiet places. Character, in the full current of human life.” Like David, let every season bring out the best in you.

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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The Nigerian economy five years under Buhari

Olanrewaju Rufai

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ive years ago, President Buhari became the first challenger to unseat an incumbent president in Nigeria’s history and was sworn-in amid great hope and enormous good will. Following his inauguration, the country was awash with optimism that his government would reignite a fading economy. More pertinently, it was hoped that President Buhari would lay the foundation for a long overdue implementation of fiscal federalism and further diversify the national economy, as promised in the APC manifesto.

Half a decade under his governance, the Buhari administration has fallen short of expectations vis-à-vis his electoral promises will be an understatement. Poverty, corruption and social injustice remain characteristics of the Nigerian state while stagnation best describes the current state of the nation’s economy.

That President Buhari inherited a frail economy is not in doubt. Prior to President Buhari’s inauguration, the economic headwinds were apparent, especially in Nigeria’s banking system, as a result of the crash in global crude oil prices in the summer of 2014.

Crude oil, whose exports accounted

for 90 percent of Nigeria’s federal revenues, sold for $122 per barrel in June 2014. At his swearing-in ceremony in May 2015, the price of a barrel had crashed to $65. Nevertheless, Nigerian remained hopeful.

Unfortunately, their hopes have been all but dashed. Five years into the Buhari administration, the state of poverty in Nigeria attained multidimensional levels as the nation overtook India to claim the ignoble position of being home to the highest number of poor people globally.

Unemployment has also attained unprecedented levels, with the unemployment rate in Africa’s largest economy rising from 8.2 percent in 2015 to 23.1 percent in the third quarter of 2018.

For young people aged 15 to 35, the figures are even worse as 55 percent of the youth population are unemployed or underemployed. In addition to these galling figures, the nation continues to fail to prepare future generations for a fast-changing world, with over 10 million children currently out of school.

The nation is also straining under the weight of its debt, as the national debt stock has soared in the last four years to over N27 trillion. Currently, debt servicing consumes over 60 percent of the nation’s revenue. In clearer terms, this implies that for every Naira the government generated as income in 2019, more than 60 kobo went to servicing the nation’s debts, leaving little to build badly needed infrastructure and fulfil other developmental obligations.

Furthermore, Nigeria under President Buhari has adopted protectionist economic policies, exemplified by the doubling down on unfruitful policies

geared towards maintaining a strong Naira; as well as the government’s decision to close the country’s land borders to all good in October 2015.

The dire state of Nigeria’s economic performance under President Buhari comes to the fore when examined in numbers. The nation’s GDP growth rate for 2019 was a meagre 2.1 percent, a rate below those of Uganda, Benin and even war-torn Syria. Furthermore, the nation’s inflation rate remained high at over 12 percent. Overall, there is no doubt that President Buhari’s management of the Nigerian economy has been nothing but abysmal.

It is not all doom, however. The Buhari administration has made significant progress in some areas; the implementation of the Treasury Single Account, increased budgetary allocations for capital expenditure, etc. However, these smatterings of progress are insufficient to compensate for the self-inflicted damages to the economy resulting from woeful economic policies.

Such is the state of the Nigerian economy five years into the Buhari administration. Despite coming into government with promise, there has been little or no significant economic progress, and with less than three years to go, there might be insufficient time to make any significant progress.

Nevertheless, President Buhari can help lay the foundation for a better economic future, perhaps by focusing on addressing some key issues in the last three years of his administration.

First, there must be an urgent will to address pressing issues such as the nation’s reliance on oil earnings, the archaic land use act and the nonpractice of fiscal federalism, all of

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Despite coming into government with promise, there has been little or no significant economic progress, and with less than three years to go, there might be insufficient time to make any significant progress

Rufai holds a first class degree in Management and Masters degrees in Management and Finance. He is a finance and strategy analyst and can be found on Twitter @LanreRufai_.

Implications of the Tiv-Jukun conflict in Taraba State

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he state of human insecurity in Nigeria flouts any exhaustible description. While ethnic clashes rage in several parts of the country, an Islamic terror group popularly referred to as Boko Haram contemporaneously unleash mayhem on innocent unprotected and defenceless civilians conspicuously clad in poverty and despair due to many years of economic inactivity and political betrayal.

This is concatenated by the horrendous onslaught of Fulani herdsmen on farmers as they perpetuate Rambo-style extermination of farming communities in a bid to secure grazing fields for their livestock. The synchronous banditry attacks on unprotected villagers in the North-East of the country where many are killed, raped or abducted to be rescued only by fat ransoms completes the equation that makes Nigeria a very dangerous place for human habitation at the moment.

One can write volumes about the state of human insecurity in Nigeria, the focus of this article is to explore the economic, social and security implications of the Tiv-Jukun ethnic clashes in Southern Taraba and to suggest better ways of addressing the conflict to reduce its economic, social and security implications on the people.

The conflict relationship between the Tiv and Jukun ethnic groups is as hoary, antediluvian, primordial and antiquated as their primus happenstance. Is this an artefact of colonialism, post-colonialism, deprivation or economic subjugation? This is better irradi-

ated, perhaps, by the socio-economic realities of these people than by any theoretical or conceptual suppositions.

Superiority claims over military might, traditions, customs, and value systems between ethnic groups are not completely uncommon just as clatters and tussles over lands; natural resources, power and economic resource distribution aren’t alien to many simple societies. The reasons for which these mundane nuances have been blown out of manageable proportion between the Tivs and the Jukuns of Taraba State raises many eyebrows.

Many media and academic experts have traced the sources of the conflict to land encroachment, primordial hatred, marginalisation and claims over which group is autochthonous or heterochthonous. Conflict and social identity theorists do offer a general explanation of ethnic conflicts such as that between the Tivs and Jukuns of Taraba State.

Conflict theorists posit that there is a reciprocal relationship between conflict and ethnic solidarity. This is further explained

by Social identity theorists who argue that group solidarity among in-group members make them form certain hallucinatorynon-existent positive imaginaries about themselves as in a direct contraption to those they form of out-group members. This often breeds conflict, they conclude.

Instrumentalists also argue that when people fail to acquire political power through laid down procedures, they tend to explore

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other means including ethnic identities or consanguinity. The extent to which the Tiv-Jukun conflict has political colourations is something that is worth further investigations. One may ask, where do they get the arms and ammunition? Who are their suppliers, why is the state equipped with the military and police unable to quell the conflict? What are the needs of both factions?

Answers to these questions may un-wrap the onion layers and reveal the true nature of the conflict.

The Tiv-Jukun conflict has led to the disruption of farming and commercial activities, destruction of properties including houses and food stores, killing and displacement of people, increased cases of kidnapping, abduction, rape and rising levels of food insecurity in the region. For people who live on less than a dollar a day, this is even more catastrophic. Taraba as a whole is considered to be one of the poorest states in Nigeria. This is epitomised in the records of their internally generated funds. About 83 percent of the population are farmers, so if people cannot go to the farm for fear of being killed, the long-term economic consequences will be indescribably devastating.

Diplomacy over Violence History has shown that there are neither winners nor losers in ethnic conflicts, be it symmetrical or asymmetrical. The Irish war, the Lebanon war, the Rwandan, Congolese, Burundian, Liberian, Sierra Leonean and South Sudan wars are all examples of ethnic

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which combine to hinder the nation from realising its potential.

In addition, the nation’s ticking time bomb of youth unemployment must be resolved through the enactment of viable job creation policies and enhancement of labour productivity. This however will not be possible without sustainable investments in education and infrastructure development. Investments in education, particularly STEM education, are critical in order to prepare the young generations for the jobs of the future. Thus, there is a need for the prioritisation of sustained investment in education in the remaining years of the Buhari administration Subsequently, Nigeria’s ballooning debt problem must be swiftly addressed. If left unchecked, the national debt stock might soon reach the level last attained prior to the debt relief in 2005. We only need to look at countries like Venezuela, Greece, and Zimbabwe to see how dangerous a public debt crisis can be. Therefore, the rising national debt volume must be tackled with urgency, perhaps starting with reducing government spending on recurrent expenditure.

Overall, President Buhari’s economic achievements thus far have been all but noteworthy. However, he still has an opportunity to shape Nigeria’s economic future and salvage whatever is left of his economic legacy in the last three years of his administration by focusing on fiscal prudence and addressing youth unemployment.

Will he seize this opportunity?

@Businessdayng

TSEER TOBIAS

conflicts that produced no winners or losers.

Guns win battles, wars are never won.

People who lose battles go back to regroup, re-strategise and launch a reprisal.

The vicious circles continuous until conflicting parties descend together into the abyss.

I believe the Tiv and the Jukuns in Taraba State don’t need to tow this line. If anyone feels genuinely marginalised or maligned, one can choose diplomacy over violence to express one’s dissatisfaction.

You are no enemies to one another; you are in fact friends, brothers and sisters because you share much in common. You share in the humanity bestowed on us by God, the dignity of which is inalienable even at death, you share in the same colonial and political history, you share in the same social and economic conditions, you are both victims of a failed state, orchestrated by concatenating kleptocratic regimes, and you have a common enemy to fight against poverty. Drop the guns and get to the negotiation table. Say no to violence Tobias is a PhD scholar at the University for Development Studies, Ghana

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Editorial Publisher/Editor-in-chief

Frank Aigbogun

CBN bearing unnecessary burden despite options Nigeria risks dire consequences just like we saw in 2016

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

Bashir Ibrahim Hassan

T

he COVID-19 pandemic outbreak accompanied by economic and health crisis, among other disruptions, have dashed the expectations of experts and government officials who hoped for a fruitful year, 2020.

However, in most economies of the world, the precarious events arising from the pandemic have necessitated a synchronisation of monetary and fiscal policies put in place to battle the pandemic and restore growth.

To this end, Morgan Stanley economists have doubled down on a V-shaped global recovery.

Sadly, this is partly the case in Nigeria, the largest economy in Africa. We see the federal government and Central Bank of Nigeria (CBN) seemingly work at cross purposes as each goes in a different direction from the other.

The FG has made clear its strategies to help the country avoid a recession or at best recover quickly. Whether or not these strategies are effective in achieving this is a discourse for another day.

But the current CBN’s capital control measure, just like in 2016, may see the economy collapse on the altar of foreign exchange scarcity despite boasting that there is enough liquidity to meet legitimate dollar demand.

Our analysis shows that Nigeria’s foreign exchange demand backlog is estimated at $7 billion.

This comprises manufacturers FX demand at $2 billion while foreign equity investors and foreign holders of CBN’s OMO bills account for roughly $5 billion.

Given importation of raw materials, a major factor ensuring business continuity in the manufacturing space, unmet dollar demand will only stiffle activities, making GDP (which measures business activities) growth a mirage considering the significant contribution of the manufacturing sector.

Also, a pandemic situation like this usually sees investors (foreign and domestic) apply caution; some even exit the market. The sluggish recovery of crude oil prices in the advent of a second wave of COVID-19 virus in China and the US puts Nigeria in a precarious situation.

We are really worried that with crude oil prices barely holding up at $38 per barrel and the CBN applying a capital control measure will only worsen investors’ confidence and deter foreign portfolio inflow, especially in the equities market.

It is worrisome too that despite the cheap valuations of the fundamentally strong stocks on the Nigeria stock exchange market (NSE) amid rising COVID-19 induced risk and the slump in oil prices, foreign investors have refused to take advantage with concerns over dollar scarcity and FX disparity.

Analysing 2020 data from the NSE we see a surge in foreign portfolio investment outflow by 31.79 percent year-on-year to N218.80 billion. Meanwhile, inflows dipped significantly by 35.03 percent to N86.25 billion within the same period. Given that Nigeria’s economy mirrors stock market performance, we are afraid 2016 may replay itself all over again.

It is sad to recall that, in 2016, the Nigerian economy contracted as the CBN’s capital controls exacerbated an already precarious situation while still battling with a slump in oil prices and local production.

The apex bank’s demand management strategy didn’t work in 2016 and it is very unlikely to work now. This is why we urge the CBN to seek other ways to complement lower dollar receipts from crude oil sales to meet dollar demand.

We see every need for the CBN to align all its conflicting exchange rates to bring clarity and confidence into the market. For us, that is the next best thing to do in the circumstance.

It is our belief that anything short of this will put Nigeria at the risk of a dent on the credit rating of Nigerian banks; affect trade which contributes 17 percent to GDP. Also, the CBN risks losing the confidence of foreign investors who are trapped in the long queue for dollars.

But investors’ confidence is not an option. Neither is business survival nor credit rating. All three are consequences.

It is rather unfortunate that the CBN has decided to go the same route it trod in 2016, prioritising its exchange rate over the economy.

We are yet to recover fully from the 2016 crisis which resulted to loss of jobs, incapacitated foreign investments, saw inflation spike and businesses shut.

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

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

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news

Shippers’ Council raises alarm as overtime cargoes take 85% of port space ... seeks CBN intervention in maritime industry Onyinye Nwachukwu, Abuja

E

xecutive secretary, NigerianShippers’Council(NSC),HassanBello, on Tuesday lamented how overtime cargoes had now taken up about 85 percent of Nigeria’s port spaces since the COVID-19 pandemic broke.

Speaking in Abuja, Bello said the situation had not just created operational challenges at the Nigerian ports, but had also created a spill-over in the seaside, extending ship turn-around time and cargoes dwell time.

“Some of the terminals are

CHANGE OF NAME

I, formerly known and addressed as Ozimi Maureen Oghenero now wish to be known and addressed as Kohwe Maureen Oghenero. O. All former documents remain valid. General public please take note.

CHANGE OF NAME

I, formerly known and addressed as Miss Oguname Oghogho Rachael now wish to be known and addressed as Mrs Izibili Oghogho Rachael. All former documents remain valid. General public please take note.

85 percent occupied. We are therefore using this opportunity to plead with you to bring these things out because a port that has 80 or 90 percent yard occupancy is inefficient,” Bello told a press meeting, and urged importers to urgently clear their goods from the ports.

But he said the impact of the COVID-19 pandemic had brought up lessons including the urgent need to fully digitalise the ports, saying the target was to ensureupto90percentdigitalisation

by March 2021, from the present 60 percent.

On the steps taken so far on ports decongestion, Bello said the Council had set up a Maritime Task Team, comprising various stakeholders to synergise on how toensureimportersevacuatetheir cargoes during the COVID-19 lockdown.

“We built synergy, including terminal operators, NIMASA, NPA, Customs, Police and other

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General public please take note.

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stakeholders held consultative forum with the unions. We met every week, we were at the ports every day, Customs also sent staff to every terminal and we were able to keep the ports open,” he said.

He said experience during the lockdown had also shown the importance of keeping the ports operational round the clock, and they were partnering the Nigeria Customs Service and Ports Authority to ensure this was achieved.

He said another lesson was that cargoes could be evacuated through roads, barges and rail, which will drive efficiency and reduce costs.

He said currently to transport a 20-foot container from Apapa to Funtua (in Kastina State) would cost up to N800,000 by truck, however “with rail, we will have competitive pricing and easy, fast evacuation of cargoes.

“Our dwell time for cargoes will reduce from the current 20 to seven days if we have 24 hours of works and multi-evacuation means.”

He also spoke on the urgent need to digitalise the ports to make them more efficient and competitive, as physical contacts were contributing to making the ports very inefficient.

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15

news

Dangote Cement records good performance in 2019

…shareholders approve dividend of N16 per ordinary 50k share …firm to intensify clinker export

D

espite a harsh operating environment, leading cement manufacturer Dangote Cement plc has leveraged on its size and strength to post an impressive performance in the year 2019, with the shareholders approving a dividend payout of N16 per ordinary 50k share.

Excited representatives of shareholders at the virtual 11th Annual General Meeting (AGM) held in Lagos commended the management for the company’s resilience to record the profit despite the global economic challenges.

Aliko Dangote, chairman of Dangote Cement plc, told the shareholders that the year 2019 was a strong year given the tough business environment across most of its operating geographies, disclosing that the Group recorded volumes of 23.7 million metric tonnes and revenues of N891.7 billion.

“We recorded a strong EBITDA margin of 44.3 percent. As a result of this performance, the Board has recommended for your approval a dividend of N16.00 per ordinary 50 kobo share,” he said.

Speaking on the local Nigerian operations, he said, “Nigeria’s cement market grew slightly in 2019.

We estimate that total market consumption was up between 2-3 percent on the 20.7Mt estimated in 2018.”

Dangote explained that the modest performance was in spite of the fact that the market generally was impacted negatively by the disruptions related to the 2019 election cycles, heavy rains and the loss in land export volumes due to the border closure.

“Dangote Cement’s Nigerian operations remained at 14.1Mt in 2019, including export sales of 0.45Mt. Domestic sales in Nigeria were nearly 13.7Mt, compared to 13.4Mt in 2019. This implies a

2 percent growth mirroring the estimated GDP growth for the year.

However, land exports reduced to 0.45Mt from 0.7Mt for the full year owing to the border closure in the last few months of 2019. The Bag of Goodies promotion, launched in July, drove strong increases in our Nigerian volumes in the third quarter,” Dangote said, adding that the innovative marketing effort enabled the company to maintain its market share despite the 4.5Mt new capacity which came into the market during the year.

He alluded to the new feat by Dangote Cement in commencing export of clinker via shipping from the Apapa and Onne ports to West and Central Africa, adding that the management was encouraged by the performance of its offshore operations.

Dangote noted that pan-African operations sold 9.44Mt of cement in 2019, up 0.8 percent on the 9.37Mt sold in 2018. “Including clinker, Pan-Africa volume was 9.6Mt. The total Pan-African volume represents 40.1 percent of Group volumes. Pan-African revenues of N282.7 billion were 0.2 percent lower than FY 2018 and represented 31.7 percent of total Group revenues. The region’s EBITDA contribution of N47.9 billion (before central costs and eliminations), represented 12.1 percent of Group EBITDA, at a regional margin of 16.9 percent, compared to a margin of 17.3 percent in 2018.”

According to him, stronger performance was recorded in Tanzania, Senegal and Sierra Leone.

“Looking ahead, we expect to further deploy our clinker and cement export strategy across West and Central Africa. The completion of our 1.5Mt grinding plant in Cote d’Ivoire is expected by the end of 2020,” he said.

UBA Foundation commemorates 2020 International Day of the African Child

U

BA Foundation, the corporate social responsibility arm of United Bank for Africa (UBA) plc, has joined the rest of the world to celebrate African children in this year’s edition of the International Day of the African Child.

June 16 every year, has been set aside by the United Nations as the International Day of the African Child to celebrate children in Africa where it recognises the courage of students who marched for their right to better education in Soweto South Africa, and as an institution that cares about the education and welfare of the African child, UBA through its Foundation marks this all important event annually.

Due to the Covid-19 pandemic and the resultant lockdown on educational institutions, UBA Foundation was not able to visit schools and community centres as is its usual practice, however, the Foundation held activities online, where students of secondary schools were afforded the opportunity to watch and listen to virtual mentoring and reading sessions.

During the virtual session, the managing director, UBA Foundation, Bola Atta, spoke to the students on various issues, ranging from financial literacy and

the importance of imbibing good reading culture to nation building. She also explained why UBA Foundation centres on three key pillars of Education, Empowerment and Environment, adding that the bank through its foundation, recognises the huge role that education and indeed a good reading culture has to play in the lives of the youth.

She said, “These days school children barely make out time to read and are easily distracted by the presence of electronic social media such as Facebook, Twitter, Instagram and others; and to curb this declining culture of reading across the continent, UBA Foundation came up with the ‘Read Africa’ project, designed to resuscitate the reading culture amongst our youths across the African continent.

“As a pan-African institution, we believe that the future of Africa lies in her youth and for this reason, UBA Foundation is actively involved in facilitating educational projects and bridging the literacywide gap on a pan-African scale, and is helping to rekindle the dwindling reading and literacy culture amongst African youths as they pursue their education,” Atta said. www.businessday.ng

Respect judicial process, BUA Group tells Dangote

B

UA Group has described the publication of Dangote Group wherein it stated that BUA misinterpreted the fact about a pending court case as untrue and full of misrepresentations.

A statement by BUA Group explains that Dangote failed to justify the alleged misinterpretation in its publication but stylishly stated that it had appealed the judgment while accepting the recent court order, which granted BUA the right to peaceful possession and operations of three of its mining sites in Obu, Okpella, Edo State.

“In the said publication by Dangote Group, it was alleged that the initial publication of the BUA Group was riddled with misrepresentations and deliberate distortions of facts. We however note that the Dangote Group failed to identify any specific fact, which was distorted.

“On the contrary, the Dangote Group reiterated the fact that the judgment of the court indeed

restrained DIL and the other Respondents, as contended by BUA, albeit stating that the judgment of the Court constitutes complete aberrations and contains manifests contradictions; and it has exercised its legal right to appeal the decision of the Court.

“While we consider this attempt to disparage the Court on the pages of print media as an affront, we shall not be joining issues with the Dangote Group, as we are of the view that the Court can protect itself and DIL reserves the right to appeal the decision of the Court.

“The Dangote Group also questioned the right of BUA to institute the BUA Fundamental Right Suit on the basis that it was a clear abuse of court process as there are two other pending suits – the BUA Suit and Suit No. FHC/B/CS/74/2016: Dangote Industries Limited & Anor. v.

BUA International Limited & Ors (“Dangote Suit”).

“This is notwithstanding that the Dangote Group itself ironi-

cally commenced the Dangote Suit during the pendency of the BUA Suit. Moreover, it is trite law that any fundamental right suit is an independent claim, which does not impede a pending dispute. In this instance, the suit was deemed necessary in view of Dangote Groups use of the Nigeria Police Force to disrupt the possessory right of BUA Group and to safeguard the lives of BUA Group’s employees.

“Indeed, Court confirmed this in the BUA Fundamental Rights Suit where it was stated: “that the 1st and 2nd Respondents (Police) allowed themselves to be used by the 3rd and 4th Respondents (DIL and Dangote Cement)” “It is imperative to note that the Dangote Group’s use of the Nigeria Police Force to disrupt BUA’s operations was done brazenly after DIL had applied to Court for a restraining order against BUA in Suit No. FHC/B/ CS/74/2016, which was granted ex parte, but set aside by the Court upon a robust challenge by BUA.

“Interestingly, the Dangote Group did not deny resorting to self-help in its publication.

It is our contention that no one should be above the law, no matter how highly placed, powerful or influential as the rule of law is the pillar and foundation of any democracy,” according to the statement.

BUA further corrected Dangote on it claim that BUA was granted its mining lease from the Governor of Edo State restating that the authority to grant a mining licence was within the sole jurisdiction of the Ministry of Mines and Steel Development through the Nigeria Mining Cadastre Office, which granted the BUA licences. BUA also dismissed Dangote’s claim to BUA’s mining sites in Edo as absurd and frivolous as Dangote’s mining license was granted under Kogi State while BUA licenses and mining sites respectively cover and are located in Obu, Okpella in Edo State.

Adamu Bello, zonal manager, Olam Nigeria Limited, Kano office, and other staff of the company, in a group photo with some Almajir beneficaries of the Cooked Food Project distributed by the company.

COVID-19: Olam initiates awareness campaign, distributes food in selected Northern states Adeola Ajakaiye, Kano

O

lam Nigeria Limited, a leading agro-commodity company in Nigeria, says it has commenced the implementation of an awareness campaign on Covid-19 in some selected states in Northern part of the country, as a way of assisting the Nigerian government to curb the spread of the disease.

The campaign is designed to address the identified widespread ignorance among a large segment of the people in the selected states, on the spread of coronavirus as well as educate them on preventive measures to be adopted in controlling the disease, especially in rural communities.

The company has also commenced the distribution of cooked food to over 2,500 vulnerable people in the states where the awareness campaign is being mounted, in partnership with a private eatery outfit - ‘Big

Bite,’ under a special initiative conceived to cushion the effects of the challenges posed by the pandemic to ordinary Nigerians.

Adamu Bello, zonal manager of the company in Kano, who made this disclosure while presiding over the food distribution, said the company was implementing the initiative in order to support measures being taken by the Nigerian government to tackle the suffering brought about on Nigerians by the pandemic, particularly, among people in the states where the campaign was being implemented.

According to Bello, the food distribution campaign is geared primarily at helping the vulnerable segment of the society, in addition to supporting the company’s workforce in the upcountry locations.

“Nigeria, Africa’s most populous country, has become the third African country to record over 10,000 cases of COVID-19 as of the 10th of June. At the moment, the total identified cases

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stood at over 15,000. The governments at all levels in the country have put in place restrictions while continuing to discourage unnecessary travel.

“The initiatives have been implemented by Olam, under it, Edible Nuts Preposition recognises the tremendous efforts of the Nigerian government which inform our resolve to mount this awareness campaign to tackle the widespread ignorance on the spread of coronavirus, so that people can start taking preventive measures to control its spread.

“The action plan, which we are executing in the initiatives, targets people residing mostly in the rural communities in the Northern states. The awareness campaign is directed at the most vulnerable segments of the society, while at the same time we intend supporting our workforce in the upcountry locations,” Bello explained.

Providing more sights on the interventional initiatives of the company, the zonal manager @Businessdayng

further disclosed that the company had developed radio jingles with WHO prescribed safety and precautionary measures that had been aired for a period of 15 days in Kano, Jigawa, Bauchi and Katsina states.

“Under the awareness campaign component of the initiatives, the radio jingles have aired a slot per day on Radio Kano and Freedom Radio, which are being received in the neighbouring states of Jigawa, Bauchi, and Katsina.

“In the same vein, three slots of the radio jingles were also broadcasted on a radio station in Benue, which is being listened to in Kogi and Nassarawa states. The jingles were aired 3 slots per day in local languages in the states.

“We have also produced banners with informative precautionary messages which were strategically displayed at all the Company’s buying points in Kano, Katsina, Jigawa, Gombe and Bauchi,” Bello pointed out.

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19

FINANCIAL INCLUSION

& INNOVATION

‘Sparkle will not drive financial inclusion through a physical banking infrastructure’ Uzoma Dozie is the Founder and CEO of Sparkle, a technology-driven ecosystem that provides financial and business support services. The last MD of defunct Diamond Bank shares insights on how he (Sparkle) is going to merge his banking experience with a mobile-first approach to increase access in this interview with BusinessDay’s Endurance Okafor. Excerpts: What is the idea behind setting up Sparkle? parkle is a digital ecosystem that provides lifestyle, financial and business support services, powered by technology and data and the principles of trust and transparency For individuals, we are providing an ecosystem that allows us to align our lifestyle with financial services.

What do you want to do today? How can we help you achieve it? We can because we have built our platform to connect, collaborate and share with other platforms to deliver a seamless lifestyle experience. Pay how you want, access credit because you are worth it, save without thinking, secure your future.

On the business side, you focus on your business, and the non-core but important services that you need for your business are taken care by the platform, taxes, legal, your numbers and even data required to access the right financing that you need.

With Sparkle, we are building a lifestyle and financial ecosystem for our tribe of digital natives who want to make payments, manage their money, run their business - all from one app [iOS and Android]. Focussing on freedom and transparency, we want to anticipate the online financial needs of Nigerians who are increasingly coming online to manage all aspects of their lives, and provide tools and services that meet their distinct needs.

The idea behind Sparkle is a combination of my years of experience in the retail and banking sector in Africa with my interest in using technology to build and scale products that can impact millions of people.

S

A lot of technology-driven financial services companies have been created in the past few years. How is Sparkle different from them?

Sparkle is different from other digital financial services in the market because we are providing a platform to remove the barriers and friction faced

by Nigerian SMEs. Harnessing Nigeria’s entrepreneurial spirit, when designing Sparkle, we spent a lot of time looking

at all the different aspects of what business owners require every day, in terms of finances and admin, to keep their companies running smoothly and efficiently.

Our research showed that they needed easy, simple, reliable access to business tools such as digital inventory support, calculating and paying tax, paying bills, access to a current account, a selection of payment options [send and receive] and access to credit too. Sparkle is working to provide all of this and more via one platform, which is where I believe our point of difference lies. As a Sparkle user, you can go about your business seamlessly, and move on with the rest of your day.

I learnt Sparkle recently partnered with VISA, Network International, PWC Nigeria and Microsoft. What is the reason for the collaborations?

One of the core tenets of Sparkle is building trust with our digital audience. Part of that comes from being transparent about what we do, and another aspect of the trustbuilding comes from building long-lasting and impactful partnerships with global industry leaders and brands.

Working with experts such as VISA, PWC and Microsoft allows us to strengthen core areas of our platform, as they will provide industry expertise in APIs, cloud computing, data science, machine learning, tax and financial advisory services, for the benefit of our customers.

We now live in a world where sharing and collaboration must be core to your overall strategy. People don’t just buy any more. Everything is a service, allowing more people access to services that were once the preserve of a few. That’s one of the benefits of digital. It allows us to democratize almost anything. We are at the forefront of this new movement.

As the MD of Diamond Bank, you channelled a lot of attention to retail and financial inclusion drive, what is the key experience you will be bringing from the bank to Sparkle?

A country’s economy can

nancial inclusion. One can have a bank account but have no reason or capability to use it, or indeed want to for that matter. Without an identity recognisable to the system, access to credit is not possible. So our leaders must create that through legislation. We need to develop the right infrastructure for people to access and register their identity. You have a job and you’re still not financially included and therefore can fall back into the poverty trap if you are not socially included (or not set up for social support, which is the case in Nigeria). You have no job and financially included…. go figure.

Uzoma Dozie

never really truly operate to its full potential without financial inclusion. Nigeria is a nation of the underbanked, and that’s what platforms like Sparkle, and our other fintech counterparts, and alongside the banks and regulators, need to come together to tackle. At Diamond Bank, we were able to drive financial inclusion and increase our customer base through the roll-out of various digital products and services - and the impact we had was significant and something I am incredibly proud of. With Sparkle, my explicit intention is to carry on in this vein and, using a mobile-first approach, and through product development and innovation, my goal is to empower those currently underserved.

Part of the drive for financial inclusion is also bringing more people into the formal economy, which will benefit the Government and individuals - if we are going to become a better functioning economy, we need to improve tax collection and financial transparency.

Our strategy is not to do it by lowering standards, but playing our role in ensuring every Nigerian should have an identity. That is the gateway to inclusion, a fundamental for trust in a tribe, an ecosystem.

With one of the highest financial exclusion rates in Africa at 36.8percent, Ni-

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geria has over 40 million unbanked adult population.

What role will Sparkle be playing in deepening access?

We will use the infrastructure that we have to hand to ensure Nigerians have better access to financial products - the mobile phone.

Simply put, we will not drive financial inclusion through a physical banking infrastructure - it’s too costly and logistically impossible. The future of financial services in Nigeria, its headquarters, is the cloud, not a plot of land on Lekki expressway.

Using technology to scale, applying machine learning and AI to make unbiased decisions concerning financial services and credit ratings, will allow for far deeper financial inclusion, for many Nigerians who have historically been excluded from the system because the banks don’t hold enough information on them and what they do hold, doesn’t paint the entire picture.

Almost eight years after the CBN launched the NFIS, Nigeria’s financial exclusion rate is still high, what do you think has been the barriers to broader financial inclusion?

Legislation and infrastructure are crucial here. If everyone has their own biometric identity and it is stored in a central database, then you are automatically socially included. We talk about fi-

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Industry analysts have said inclusion for all can largely be driven through technology- Telcos and Fintech.

What are the challenges you see in the Fintech industry that needs urgent attention?

I agree. I would also add that inclusion also needs to be driven by central regulators as well - not in terms of innovation, I believe that that comes from the Fintechs and the telcos. However, we need to ensure we have a robust, regulatory framework - led by the likes of the CBN, but with input from financial institutions, banks and Fintechs, to give our sector the requisite structure we need to build trust.

We also need the Government to lead on a coordinated push to drive digital identification for all Nigerians, creating a database so we can authenticate people and bring them into the [digital] system. And I’ll emphasise digital here as written records are completely unworkable and unscalable. Of course, we do currently have many digital identification systems in place; these include telcos and their sim card registrations; passport identification [although only a minority own a passport]; drivers’ licences, voters’ cards, BVN and NIMCS’. But the various agencies do not speak with one another - the system is fragmented, for dispirited segments of society and is currently operating in silos.

We need a centralised system from which telcos and Fintechs can work from. @Businessdayng

So yes, I agree with the industry analysts that telcos are critical to driving financial inclusion; they are the arteries from which Fintechs will need to work from to reach millions of more Nigerians. They provide the infrastructure from which to innovate around and build products that meet the needs of millions of more people, they hold huge volumes of data that, with machine learning, can be used to analyse and build a better picture of Nigerian consumers and SMEs, which in turn, allows companies a Fintechs, like Sparkle, to build the best products for them.

What are your plans for Sparkle, where do you see the ecosystem in the next five years? Also, what should Nigerians be looking out for with Sparkle?

Sparkle is connected seamlessly to other platforms to help people achieve what they want to do. Over the next five years, we want to scale this to bring millions of more people into our community, building our ecosystem of digital natives who see Sparkle as their primary means of managing their money, managing their businesses, essentially managing their lives.

As well as this, we will continue to push for financial inclusion across the country in an ideal world, this will no longer be a talking point, and we will see the vast majority of Nigerians already in the financial system; but realistically, this may take longer than five years. Importantly, we have to make sure we are building for the long-term.

In the immediate future, we will be building more products and services that meet the needs of our Sparkle customers. Very soon, we hope to offer credit to our users, as we work with them to invest in and build their businesses. And because we will have access to much of their day-to-day financial data, we will be able to make fast, well-informed, unbiased decisions regarding their creditworthiness. We will also be launching a Visa card and virtual card in the next few weeks with features and functionality to facilitate eCommerce for Nigerians.

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FEATURE How NNPC plans to diversify to mitigate oil sector challenges ‘

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n a bid to cushion the impact of crude oil volatility and remain profitable through business diversification, state-owned Nigerian National Petroleum Corporation (NNPC) is considering spreading its business portfolios to other key major sectors of the economy such as housing, power, and medical sector in order to survive the pandemic period.

Diversification has been a topical issue discussed in several fora, especially when the global oil price war began a few months ago, which is why most experts have always advocated for more investments in other major sectors of the economy.

NNPC is considering investing in other businesses which may not have any linkage to oil and gas, but can easily provide cushion during difficult times as the corporation seeks to sustain revenue generation for Nigeria, and cope with the boom and bust cycles which are gradually becoming a feature of the global crude oil market.

“The NNPC what we want to do is to create an energy company, not just an oil and gas company.

And that’s why we are moving into renewable energy. We have initiatives around solar that are paying off,” NNPC’s Chief Operating Officer, Ventures and Business De-

Mele Kolo Kyari, NNPC GMD

velopment, Roland Ewubare said.

“We have biofuel agreements with various state governments.

We are trying to activate those programmes more rapidly. Within NNPC itself, we have a bunch of non-core businesses. NNPC is one of the biggest landlords in this country,” he said.

Also, NNPC is partnering with private developers to reduce the housing deficit in the country and also partnering with medi-

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cal centres to provide innovative healthcare for Nigeria.

“Here in Lagos, just behind Chevron, we have 90,000 hectares of land in a country where there’s a housing deficit, we are happy to collaborate with private developers to develop these assets,” Ewubare said in a statement.

Ewubarem noted that NNPC has hospitals and clinics all across the country and is looking to create centres of medical excellence

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All kinds of initiatives we have that are currently at incubation level.

When they mature fully, the Nigerian nation will see the benefit of it and you and I as shareholders of NNPC will also get the benefits of it

‘

BALA AUGIE

which will save the country lots of foreign exchange.

“We have a bunch of non-core directorates. What we are trying to do now is to expand the businesses but primarily in collaboration with the private sector whose core business is around these areas. Because we are oil men, not running hospitals. So, if we have a medical type company that wants to collaborate with us, we will be happy to talk to them,” Ewubarem said.

Ewubarem also explained that NNPC is having a conversation with some of the biggest logistics providing companies in Nigeria to have the state corporation as a partner in their businesses.

“All kinds of initiatives we have that are currently at incubation level. When they mature fully, the Nigerian nation will see the benefit of it and you and I as shareholders of NNPC will also get the benefits of it,” Ewubarem said.

As part of moves to improve profitability, the NNPC also announced plans to drive crude oil production cost down to $10 per barrel by Q4 2021.

This according to the statement would be done by systematically and gradually beating down logistics costs.

The Corporation’s revenue took a major hit in 2020 due to the slump in global oil prices, and @Businessdayng

this, in turn, affected the Nigerian budget given that oil proceeds account for a significant fraction of her income.

“When you have a low commodity price regime, as the case now, the only way we can squeeze out some reasonable cash and financial gain to the nation is by curtailing and constraining our costs in line with the GMD’s aspiration to push for a $10 per barrel cost of production,” Ebuware said.

Nigeria, Africa’s largest economy, is so over-dependent on crude oil that it makes up about 90percent of its export earnings and more than 60 percent of Nigeria’s revenue. So when low prices caused by the Coronavirus pandemic started, Nigeria’s economic growth paused.

“We have a seismic company, Integrated Data Services Limited (IDSL), in Benin for example, which I was Managing Director of, it was a very small company six to seven years ago, but last year the company posted revenues above $100 million. That’s still not too much money, but in an environment where you are looking for every penny to run the national budget, it is critical,” Ebuware said.

Ebuware noted that last year, National Engineering and Technical Company (NETCO) did over $150 million in revenues.

“So, there are different ideas and plans we have in place to diversify the income base of the corporation for the greater good of the nation and over the next few months you will see these things rolling out,” Ebuware said.

There is also an ongoing collaboration with selected partners to commercialise flared gas, a move which is expected to create thousands of new jobs, spur domestic gas demand, generate electricity, create an opportunity to diversify revenue of the Nigerian government, strengthen the country’s revenue base and turn Nigeria into a dominant geopolitical player in Africa, using its gas resources, just like Australia, Russia or Qatar.

This would be done by converting it to Compressed Natural Gas (CNG) and Liquefied Natural Gas, for sale to consumers.

“I do agree that the associated gas that we flare right now through an intelligent programme, we can sequester and capture those molecules and use it for the benefit of the broader economy. We haven’t done a good enough job, working with our IOC partners to see how to utilise that gas efficiently,” Ebuware said.

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Experts call for policy, sensitisation to tackle Nigeria’s protein deficiency Josephine Okojie

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utritionists and public h e a l t h experts have called for the enactment of a national policy and sensitisation of Nigerians on the importance of protein consumption to tackle the high rate of protein deficiency in the country.

The experts spoke at a recent webinar on Nigeria’s Food Culture and the Challenges of Protein Deficiency organised by the Protein Deficiency Awareness.

“We need to sensitise our communities on the importance of protein consumption taking into cognizance the knowledge, attitude, and practices of the various ethnic groups,” Omadeli Boyo, medical director, Pinecrest Specialist Hospital. and a public health expert said.

Boyo said there must be awareness campaign regarding the benefits of meals rich in proteins t h rou g h c o o p e rat i ve s, traditional institutions, religious organisation, town, and labour unions

among others.

He also called on government at all levels to enact policy that will ensure that children are educated f ro m e a r l y c h i l d h o o d through to universities on the importance of protein.

He added that food is part of culture and is a reflection of the way of life of a people.

According to him, culture change can be very difficult and can only happen over time using various tools

such as ; studies of the knowledge, attitude, and practices of the various ethnic groups.

He noted that it is very difficult to change the food culture of Nigerians which is mainly carbohydrate form of foods as humans always resist change to what they are already used to.

He says most Nigerian families can hardly afford foods with high nutritional value, forcing them to feed mostly on starchy foods

which are very high in carbohydrates and are often cheaper.

He defined protein as nutrients needed by the human body for growth and maintenance as well as used in membranes, such as glycoproteins.

He added that when proteins are broken down into amino acids, they are used as precursors to nucleic acid, co-enzymes, hormones, immune response, cellular repair,

Sesame tops Nigeria’s agric export amid COVID-19 pandemic Josephine Okojie

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espite the novel coronavirus outbreak that obstructed global trade, Sesame has topped Nigeria’s agric export for the first quarter of the year.

Data from the National Bureau of Statistics (NBS) shows that sesame was the most exported agricultural commodity in the first quarter of 2020 with a total value of N49billion worth of the crop exported to Japan, Turkey, and Europe.

Sesamum seeds worth N9.8billion, N9.5 billion, and N9.3billion were exported to Japan, Turkey, and China respectively.

Experts say the export numbers are an indication that the sesame production has the capacity to grow and earn the country huge f o re i g n e x c h a n g e a n d create hundreds of jobs in the country amid and postCOVID-19 pandemic.

Mutairu Mamudu, national president of Sesame Farmers Association of Nigeria said that sesame

has lots of potentials, adding that the crop has both commercial and medicinal value.

Mamudu stated that oil extracted from the seeds is better than every other oil seeds. “It is 100 percent cholesterol-free and that is why the demand for it is very huge both locally and internationally,” he said.

He noted that the country is still not exploiting the full potentials of sesame, urging the government to encourage more investments in the value chain of the crop.

Also, during the quarter, total trade in agricultural goods stood at N387.7billion, of which exports accounted for N126.3billion, which higher than N68.2 billion in the fourth quarter of 2019 and N73.2billion in the corresponding quarter of 2018.

The figure indicates that the value of agricultural exports grew by 85.2percent in the first quarter of 2020 compared to the preceding quarter in 2019 and 46.76percent compared to the corresponding quarter of 2019. www.businessday.ng

The sector accounts for 4.7 of the country’s total trade for the period, while sesame accounts for 1.2percent share of total exports.

Sesame seed has numerous health and industrial benefits and is widely used for baking, medicine, cosmetics, and animal feeds. It also has a high oil content of between 44 and 60 percent.

Considering its numerous health benefits and the growing preference for organic foods, the demand for the commodity has continued to grow and this is positive for Nigeria.

It remains in high demand abroad by pharmaceuticals and industries that produce soap, shampoo, lubricants, paints, cosmetics, and vegetable oil. A popular w o m e n ’s b o d y l o t i o n Neutrogena’ is made from sesame oil.

Currently, Nigeria is the largest producer of sesame seeds in Africa, and the third-largest in the world, with about 580,000 tonnes produced in 2017.

The oil extracted

from the seed is used in making vegetable oil and for medicinal purposes for the treatment of ulcers and burnt. The stem, as well as the oil, is used by the cosmetic industry in the production of soaps and other beauty products.

Sesame is mainly grown in the northern region of the country.

While sesame remains key agricultural export commodities in Nigeria, the products like other agri-commodities are traditionally exported in an unprocessed form which creates a loss in value addition.

Therefore, there is need for increase private sector investments in sesame processing and this will re q u i re i n v e s t m e n t i n processing facilities.

Currently, the country has only three functional processing plants for sesame seeds – two in Kano and one in Lagos with a combined estimated processing capacity put at 300 tons, indicating that each has a production capacity of 100 tons.

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and other molecules essential for life.

He stated that bean is the most commonly consumed protein-rich food because of the high cost of animal form of proteins.

Boyo added that the timing of food is also very important and that Nigeria does not have a well-known and acceptable time of food while calling on the government to develop a national food culture.

Protein deficiency is today a major cause of malnutrition which is described by the World Health Organisation (WHO) as ‘the gravest single threat to the world’s public health.’

Lanre Fasakin, MD, Communication and Market Research Group Limited (CMRG) - a leading research firm, while speaking on the outcome of a recent protein deficiency survey conducted by his firm in the country, said that Nigerians appreciate the essence of protein with health and wellbeing.

Fasakin says the study finds that despite Nigerians have high knowledge of protein-based foods, carbohydrate form of foods still account for the larger

proportions of what they eat.

He noted that affordability and availability are the two key factors that are drivers of the kind of food Nigerians consume.

“The study finds that 1 in every 5 households eat their carbohydrates without any form of protein. And it finds that one-quarter do not consume all the six leading protein food in their household,” he said.

Similarly, Ezekiel Ibrahim, president, Poultry Association of Nigeria (PAN) said that the high rate of poverty in the country has prevented Nigerians from consuming foods that are rich in either plant or animal protein.

He called on the government to build an effective and efficient a g r i c u l t u ra l s e c t o r t o improve farmers’ yields per hectare, thus, driving down the prices of food.

He noted that the prices an egg in the country is quite expensive at N30, saying it is supposed to be sold for at most N5, but owing to the high cost of production, farmers cannot afford to sell at that price and remain in business.

Three Crowns excites consumers with ‘Voices of the Heart’ campaign Josephine Okojie

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hree Crowns, Ni g e r i a’s l e a d i n g low cholesterol and heart-friendly milk has thrilled consumers with its Voice of the Heart campaign to mark the 2020 World Milk Day. The day which is initiated by the UN’s Food and Agricultural Organisation (FAO) on the 1st of June yearly is to showcase the importance of milk as global food and encourages its consumption as part of a daily diet.

To mark the 2020 World Milk Day, Three Crowns came up with exciting engagements and rewards for mums and their families on digital, TV, radio, and select retail stores in Lagos and Oyo state.

Omolara Banjoko, marketing manager, Three Crowns explained that the brand elevated its ‘Care for your heart’ story, and dialled up its functional benefits by showcasing the different things a healthy heart could do through the World Milk Day campaign.

“Every time the heartbeats, it speaks and its voice is so @Businessdayng

unique that only very few can hear and interpret. Luckily, Three Crowns is one of the few that understands and can interpret well the voices of the heart,” he said.

“With the World Milk Day 2020 celebration we have translated the voices of mums heart and brought them to the forefront for her family and everyone to hear,” he further said.

The celebration kicked off with a teaser where the brand demonstrated what a healthy heart can do when nourished with Three Crowns low cholesterol heart-friendly milk.

This was followed by series of consumer engagements on digital where mums were asked to record and upload 30-second heartfelt voice notes expressing how much they care for their loved ones with a pledge to always stay healthy for them with Three Crowns milk on the brand’s website.

At the end of the campaign, the top 20 most emotive voice notes of mums who took the pledge on social media were rewarded w ith shopping vouchers.

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insurance today

E-mail: insurancetoday@businessdayonline.com

How insurance industry recapitalisation will be affected by Covid-19 pandemic The most obvious potential impacts of the Covid-19 on insurers are the pressure on sales from reduced business activity, the upsurge in claims arising from life, health, travel and business interruption insurance etc. The covid-19 impacts no doubt has affected the implementation of the ongoing recapitalisation exercise in the industry. Pius Apere, chairman /CEO, Achor Actuarial Services Limited, an actuarial Scientist and Chartered Insurer in this article reviews the industry, the recapitalisation exercise and post Covid-19 pandemic ear. Modestus Anaesoronye presents the report.

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here had been a lot of great expectations from the investors and the insuring public when the insurance regulator first announced the recapitalization guidelines for the insurance companies operating in the Nigerian insurance industry about two years ago. The recapitalization exercise had been designed to provide the required capital base to address some critical challenges facing the industry over the decades in order to reform the sector for sustainable economic growth and development. The key critical challenges to address are inability to pay genuine claims, lack of innovation in product development, inability to underwrite bigger risks, low market penetration, just to mention a few.

The recent extension of the recapitalization deadline to 30th September 2021 is a welcomed development, as it would allow insurers space to review their strategic initiatives/plans to meet the recapitalization deadline.

This write-up highlights some critical lifestyle changes, possible challenges and opportunities which could arise from recapitalization and/or covid-19 pandemic that would affect the Nigeria insurance industry.

Conduct of Insurance Business Marketing and distribution channels The impact of covid-19 on businesses (e.g. business interruption), economy (e.g. volatility of markets) and human lives (e.g. death) has put pressure on insurance business sales resulting from reduced business activity e.g. less use of face-to-face channels, social/physical distancing etc. Covid-19 has induced a considerable use of direct marketing (i.e. internet, telephone, social media, such as Twitter and Facebook) both for marketing and selling insurance products, as information about customers could be obtained from online sources. In this regard, insurers may need actuarial services to cope with the operational challenge of quickly adjusting pricing models in a fast-changing business environment.

This underscores the importance of actuarial departments for insurers in the recapitalization era.

Digitalization of Insurance Systems and Processes Recapitalization will provide an insurer with the required resources to invest in acquiring appropriate modern software and hardware technologies (e.g. laptops, mobile devices, remote connectivity systems, video conferencing facilities etc.).Insurers with these capabilities will be in a much stronger and competitive position than others in terms of creating new digital products, underwriting, claims management, and administrative processes. Digitalization will no doubt lead to an

Pius Apere

increase in sales, insurance penetration and profitability of an insurer over the long term.

Change in Work Culture The concept of working remotely from home is not new in the advanced economies but it could be entirely new to developing economies where the level of digitalization is low.

Covid-19 has led to a change in work culture from total reliance on physical co-locations of people to remote working (i.e. use of virtual work-place). In this case, a greater percentage of the staff workforce are expected to be working from home, with only a fraction of staff onsite for managerial duties and/or critical jobs that cannot be done remotely. The change in work culture still has a challenge in dealing with complex operations such as high value claims where evaluating the physical evidence and obtaining expert reports in-person is frequently a key part of the claims management process.

The insurance industry should embrace the new work culture moving forward (even in the post covid-19 era) because, if it is well managed, it would increase the efficiency and profitability of an insurer.

Human Capital Development The recapitalization would also place all insurers at least on the same level playing field in terms capital base being the most important critical success factor. The second key critical success factor for an insurer is the availability of appropriate human capital (i.e. the crop of www.businessday.ng

professionals with good change management and leadership skills). Thus, a company’s staff recruitment and training policy is crucial in the recapitalization era.

Staff Recruitment and Training The insurance industry is at the crossroad to recruit and retain a new crop of professionals in order to meet the new challenges that will face the insurance companies during the recapitalization era. In the same vein, the importance of retraining of existing employees (e.g. CIIN qualified members) to bridge the skills gap in order to keep abreast with modern and international best business practices cannot be overemphasized.

Therefore, there is an urgent need for the insurers to have small functional libraries equipped with adequate study resources (e.g.

CIIN study materials, basic and/or advanced Excel textbooks etc.) for self-training purpose.

The Chartered Insurance Institute of Nigeria (CIIN) has recently restructured its curriculum in line with international best standards and the production of appropriate study textbooks to meet the new curriculum is a step in the right direction.

Virtual Learning and Online CIIN Examinations CIIN has the primary responsibility of catering for the manpower development needs of the Nigerian insurance industry. Covid-19 pandemic had made it impossible for CIIN to

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fulfill this importance duty i.e. the usual faceto-face learning process and conduct of professional examinations have been hampered as result of Covid-19 lockdown. There is still great uncertainty whether the industry will ever return back to status quo prior to covd-19. Thus, CIIN should be prepared to move forward by considering alternative ways in fulfilling its primary responsibility even beyond covid-19 pandemic.

As an alternative, virtual learning process and online CIIN Examinations could be introduced, as similar learning methods and examination process have been deployed successfully by some international professional bodies during the period of covid-19 lockdown.

Although there are likely to be challenges in conducting such online professional examinations in Nigeria due to unreliable internet network connectivity, irregular electricity power supply, candidates without personal computers and/or typing skills etc. Despite these challenges, the online examinations could be conducted successfully, after careful planning process, particularly for the Foundation Courses to start with where the number of student enrolments may be high, using the following process: Online examinations can be written by candidates in their respective companies using their office computers being set in a training or Board room. This would guarantee access to reliable internet connectivity, the supply of electricity power, availability of computers provided by employers and meeting the social/ physical distancing requirements.

At least two qualified CIIN members in the company may be trained as invigilators to avoid possible cases of examination malpractices such as plagiarism, collusion etc.

At the start time of any examination, candidates will access the written examination paper from the CIIN online platform.

Answers will be typed if there is no provision for handwritten answers allowed for the particular examination. In this case, answers will be typed into either Word or Excel depending on the examination. At the end of the examination the electronic ‘examination scripts’ will then be uploaded onto CIIN online platform. A separate arrangement (i.e. using one examination hall) will be made in the CIIN office for the few very candidates without employers.

Conclusion The challenges from covid-19 had no doubt impacted on the recapitalization exercise leading to the recent extension of the deadline by the regulator. Therefore, the insurance industry stakeholders are expected to be prepared to manage the above challenges effectively to achieve the benefits of the recapitalization moving forward.

@Businessdayng

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Wednesday 17 June 2020

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PTONA members lament N200bn loss on COVID-19 MIKE OCHONMA Transport Editor

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embers of interstate road transport operators under the aegis of Public Transport Owners of Nigeria Association, PTONA, are lamenting the huge loss of an estimated N200 billion following the ban on interstate commercial transportation by the federal government as one of the measures to curtail the spread of the corona virus pandemic that has continued to impinge on the global economy.

PTONA members constitute majorly of all the biggest names in the public transportation system and the association is the biggest stakeholders, apart from the government.

An analysis of the statistics of permanent losses due to the ban on commercial transportation made available to BusinessDay by Isaac Uhunmwagho, president of PTONA a result of the government ban on interstate travels indicates that for the first four, eight and 12 weeks, there was estimated loss of N50billion, N120billion and N200billion respectively loss to the national gross domestic product.

While appealing o the authorities concerned that, the ban on interstate transportation be lifted as soon as possible, the PTONA president said the issue of ban on inter-state transportation is something that affects everyone in particular and the economy in general.

To cushion the effects of the Covid-19 affliction upon their return to the roads, members had already written their plea for financial assistance and palliatives to the Economic Sustainability Committee headed by vice president Yemi Osibanjo.

MIKE OCHONMA

M L-R: Executive director, Izu Chukwu Transport/Financial Secretary, PTONA, Nonso Ubajaka; MD, Famous Motors/PTONA PRO, Valentine Uduebor; and Chairman, EFEX Executive/PTONA President, Isaac Uhunmwagho, at the PTONA press conference hosted by Efex Executive/Efosa Motors, Yaba, Lagos recently.

He appealed that government should face the challenge of ensuring that Nigerians comply with the guidelines and protocols which will be introduced for long-distance travels, as well as encourage strict adherence to every guidelines as contained in the Covid-19 rules and regulations.

Some of the negative effects of the lockdown, Uhunmwagho pointed out is that “the longer the ban on inter-state travelling lasts, the much more will be the number of small and big business that will die permanently, adding that” the earlier the ban is lifted, some businesses will be able to recover”.

In expressing fear that some commercial fleet owners will go bankrupt on the back of the fatal injuries that may be inflicted on them after the Covid-19 era, PTONA suggested that government needs to financially aid the transport sector such that the operators do not have to transfer the entire burden on to the poor hapless travelers who are

already very weak financially because of all the scorching effects of Covid-19 pandemic.

Part of the negative effects of the many weeks of ban on passenger commercial vehicles is the inability to continue payment of staff salaries which they lamented has been the plight of many transporters, as the funds are no longer there.

Furthermore, thousands of vehicles have been parked for almost 3 months while it will cost millions of naira towards the restoration of these redundant fleet back to sound functional condition.

According to Isaac Uhunmwagho; “The reliability of many of these vehicles will not be the same anymore.

Vehicles were never designed to be left idle, and even if they may re-start, numerous mechanical, electrical and system faults are bound to arise, including tyres, and the transport owners have very little funds left to meet up with these challenges. Some transport owners who have rented premises may be unable to continue

using some of such premises”.

As part of preparations to return back to their passenger transportation business, Uhunmwagho however, assured that PTONA is working closely with the federal ministries of transportation, works, the Federal Road Safety Corps, the Nigerian Police as well as the various state governments in line with the Covid-19 safety guidelines.

In the post Covid-19 operating conditions, vehicles are expected to carry approximately 50 percent of passenger as well as spend money on additional sanitation and health facilities. ‘’If a vehicle takes 50 percent of passengers, simple arithmetic will dictates that the transport fare will have to double. The airlines have already come up with a similar answer.

The question is, can the Nigerians, whose average level of income has been adversely hit by the effects of Covid-19 be able to pay significantly increased transport fares?”. The PTONA president explained.

Stallion fumigates 28 dealer outlets, VON assembly plant over Covid-19 … Customers and employees safety priority, says Group CEO MIKE OCHONMA

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ith various businesses picking up gradually following the battering of the global economy by the ravaging coronavirus pandemic, Stallion automobile group is deploying every necessary safety measure to ensure the safety of its institutional, fleet, individual customers and that of its employees considered paramount with the fumigation and decontamination of dealerships and showrooms across Nigeria.

In a telephone chat with BusinessDay last Monday, Anant Badjatya, group chief executive officer of Stallion group which has franchise for Hyundai, Honda, Nissan, Porsche and Changan brands stated that a total of 28 showrooms locations are being routinely fumigated with a special anti-virus treatment along with the regular pesticide treatments for rodents.

The safety of our customers and our employees are paramount. We want to keep them safe from the pandemic while business continues.

The complete antivirus treatment is very effective against all kinds of flu virus and recommended every

Online vehicle purchases upbeat amid Covid19 - Cheki

Stallion’s Porsche showroom located in V/Island, Lagos

three months. We are maintaining the scheduled treatment for everyone’s safety.

The decontamination exercise involves the surface cleaning of all the showrooms furniture and equipment with anti viral clorex and daily hypo application on the floors, table tops, workshop areas, parking bays. The overall fumigation is done once in three months.

The daily cost of surface cleaning, sanitizer, bleach spray in all the showrooms including Stallions’s VON assembly plant that goes through the same treatment according to the general manager is not without its huge cost implication which she said www.businessday.ng

is not worth the safety and lives of its customers and employees.

Responding to how is Stallion taking the welfare of staff as business resumes amid Covid 19 pandemic, the company group CEO has this to say; ‘’Our employees are our responsibility and we do not compromise on keeping them safe. The showrooms are open but owing to low footfalls, the staff is being rotated to cover all days.

The cost of productivity has gone up substantially’’. ‘’We have committed on making full salary payment despite low demand and staff buses are picking up employees from home to office and back to ensure minimal contacts

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during this pandemic. The buses are operating on low capacity but with high cost, even as each employee is given masks and sanitizer complemented with the service team that is given full personal protective equipment (PPE) gear while handling cars’’. He concluded.

The nationwide showrooms cleansing exercise is coming few weeks after the business conglomerate launched what it called Stallion Africar multi-brand auto sales portal which is designed and targeted at helping meet customer expectation during the COVID era.

It will also provide the customers tools to take an informed decision on the choice of car in their budget and a virtual relationship manager to guide them through the chat functionality.

It offers an opportunity to do crossselling and upselling and reduces their dependence on driving walk in traffic to the point of sale.

The simple design of Stallion Africar enables the consumer to take a decision on buying a new car and servicing their existing car. Soon, there will be a feature addition of buying a preowned car where the consumer can get their old car evaluated and uploaded to get the best deal and exchange it for a new. @Businessdayng

any Nigerians looking for brand new and used cars to buy spend more browsing online for fear and as precautionary measure of getting infected with the coronavirus pandemic.

If you a car dealership trying to navigate the uncertainties brought about by the COVID 19 pandemic, it is important that you have relevant and up to date data about the purchasing public that are regarded as your customers, according to an automotive online marketplace.

Cheki, the online car marketplace shared a few interesting and expository facts they recently observed regarding the behaviour of car buyers in the past couple of weeks in the face of ravaging coronavirus scourge.

In the last 21 days weeks for instance, Cheki observed a rapid increase in organic visits to their online car marketplace. Another trend they observed was that the increase in visits had gotten to levels higher than what it was in the weeks before the coronavirus-induced lockdown.

This increase in visits also correlated with an increase in leads for sellers on the website. This means that car sellers in Cheki’s marketplace were getting contacted more frequently than in the periods before the lockdown was enforced.

In summary, what this means for car dealers is that, there is currently a higher chance of selling their cars online than ever before. Ikenna Oyenta, marketing manager at Cheki gave three reasons that are accountable to this interesting development.

The first reason is that more people want to avoid public transportation for hygienic and personal space purposes. So owning personal cars have become a high priority.

Secondly, physical movement from dealership-to-dealership has become less appealing. This is because movement, in general, is now seen as risky. So browsing cars online has risen as buyers can see more options from the safety of their homes.

Thirdly, Cheki offers car financing that the online marketplace consider as flexible. With most of the cars on Cheki available for financing, more car shoppers are using the online platform to access finance in buying their new cars.

Fielding questions from BusinessDay on what happens in order for car dealers to keep their businesses running in the instance that the federal government enforces another lockdown, Ikenna recommends that they have at least five high-quality pictures of each car they have on sale. He explained that this would enable car dealers to easily upload all their cars with every specifications and technical details to their Cheki dealer page for visiting car buyers.

Cheki is a digital marketplace for quality vehicles. The online platform provides private car sellers and car dealerships of all sizes with the most qualified leads while simultaneously providing car buyers with a wide variety of quality cars.

The sprawling automotive online platform offers a range of supplementary services that include car loans, insurance, and car buying concierge.

Cheki is a division of Ringier One Africa Media (ROAM), Africa’s largest digital classifieds group.

Wednesday 17 June 2020

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NEITI lauds NNPC for publishing audited accounts …urges corporation to make it a routine practice HARRISON EDEH, Abuja

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igeria Extractive Industries Transparency Initiative (NEITI) has hailed the decision of the Nigeria National Petroleum Corporation (NNPC) to make public its audited accounts for the first time with the publication of its 2018 Audited Financial Statement (AFS) on its website.

NEITI acknowledges that this development fulfils a pledge made by the GMD of NNPC, Mele Kyari, to the management of NEITI at a meeting on August 6, 2019, a pledge, which Kyari reiterated on November 25, 2019, during the official visit to Nigeria of Mark Robinson, executive

director of the global EITI. During the August 2019 advocacy meeting, the NEITI management had urged the then new GMD of NNPC to consider demonstrating his espoused commitment to transparency by making public the corporation’s audited accounts; Kyari acceded to the request on the spot.

“We welcome the eventual fulfilment of this important pledge and obligation,” said Waziri Adio, executive secretary of NEITI. “Given NNPC’s antecedents and its prominent role in the sector and in the country, the publication of its audited accounts is positive, signalling more openness for the oil and gas sector and for Nigeria.

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Lagos stops re-opening of religious centres indefinitely as COVID-19 spikes Joshua Bassey

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agos State government has stopped the re-opening of churches and mosques earlier slated for this weekend.

The government earlier in the month announced it would allow mosques re-open from June 19 while churches were to follow from June 21, 2020. They were, however, to limit their congregations to 40 percent of their capacities and strictly observe all other COVID-19 guidelines and protocols, including compulsory wearing of face masks.

But in a twist of event, the state governor, Babajide Sanwo-Olu, while briefing on developments related to COVID-19 on Tuesday,

said the religious centres would no longerre-open.Theyaretoremain closed indefinitely due to the increasingcasesofthevirusinLagos.

As at midnight of Monday, June 15, Lagos had a total of 7,319 confirmed cases of COVID-19.

Of this number, 1,137 have fully recovered and discharged, while 82 have died, leaving 6,100 active cases under management in the state.

Lagos remains the epicentre of the coronavirus pandemic in Nigeria, with about 44 percent of the total number of confirmed cases nationwide.

Against this development, Sanwo-Olu said: “We have been closely monitoring the situation and have now concluded that

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we cannot proceed with any form of re-opening for places of worship in Lagos State, until further notice.”

Speaking further, he said “this is not a decision that we have taken lightly, it is simply in line with our ongoing evaluation of evolving scenarios regarding the course of the infection in Lagos State and the corresponding public health advisory guidelines issued by the experts.

“So, let me say this again: we are now hereby suspending, with immediate effect, the plan to reopen religious houses and places of worship in Lagos State, until further notice. We will continue to monitor the situation closely, and continue to base our decision-

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making on data modelling; as well as on the responsibility we have to act in a manner that ensures the protection of all of you the people of Lagos State.”

The also governor said that social and events centres, and social clubs, would also remain closed, for now.

He observed, however, that the steady increase in number of confirmed cases in the state was not unexpected considering the rate of infection and increased testing. But said that the cheering news was that, based on the statistics emerging from Lagos State, more than 90 percent of the people who test positive will go on to fully recover under supervision.

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Nigeria in financial crisis: Robbing our children to pay for our greed Atiku Abubakar

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othing has shocked me in my entire life in public service as the revelation from Nigeria’s first quarter 2020 financial reports in the Medium Term Expenditure Framework and Fiscal Strategy from the Federal Ministry of Finance, Budget and National Planning, which show, alarmingly, that whereas Nigeria spent a total sum of N943.12 billion in debt servicing, the Federal Government’s retained revenue for the same period was only N950.56 billion.

This means that Nigeria’s debt to revenue ratio is now 99 percent.

No one should be deceived.

This is a crisis! Debt servicing does not equate to debt repayment. The reality is that Nigeria is paying only the minimum payment to cover our interest charges. The principal remains untouched and is possibly growing.

We are at a precipice. If our revenue figures do not go up, and go up quickly, Nigeria risks a situation where our revenue cannot even sustain our debt servicing obligations. Meaning that we may become insolvent, and our creditors may foreclose on us, as has occurred in Sri Lanka and the Maldives.

In my opinion editorial of December 17, 2019, titled ‘Endless Borrowing Will Lead Nigeria to Endless Sorrowing’, I had cause to counsel the Federal Government to desist from indiscriminate lending, and offered suggestions on ways to both increase revenue, and reduce expenditure. However, my counsel fell on deaf ears. And now we have come to this.

Again, on May 15, 2020, I counselled that the Federal Government ought to reduce Nigeria’s budget by at least 25 percent, to reflect the economic realities of the times that we live in. Again, my entreaties were brushed aside.

As part of an administration that paid off Nigeria’s entire

foreign debt, I am concerned by the alarming and avoidable unprecedented increase in our debt to GDP ratio and debt to revenue ratio. The alarm I sounded last year is now sounding louder.

Not only have we squandered our opportunities, we have also squandered the opportunities of our future generations by bequeathing them debt that they neither incurred nor enjoyed.

As a matter of utmost urgency and importance, I call on the Federal Government to take immediate steps to drastically reduce its expenditure, especially on wasteful projects, such as maintenance of the Presidential Air Fleet, and unnecessary renovations of buildings that could serve as is, limousine fleet for top government officials, overseas travels and treatments, and the N4.6 billion Presidential villa maintenance budget, etc.

We cannot be on the verge of economic ruin, while still maintaining a Presidential Air Fleet that has more planes than the Presidential fleets of those from whom we take these loans.

In fact, Nigeria must sell those planes and channel the revenue to other vital areas of need, while taking additional steps to reduce the cost of running our government.

The Federal Government cannot continue to justify these unsustainable numbers by pointing at Nigeria’s debt to GDP ratio. That is only half the picture.

Our debt to revenue ratio paints a much more realistic portrait of our financial situation, especially as our revenues are majorly tied to a mono product, oil and gas, which are very vulnerable to global shocks.

Again, I warn that Nigeria is facing a crisis, and we cannot continue to keep up appearances by taking out more loans to prop up our economy. That will amount not just to robbing Peter to pay Paul, but to robbing our children to pay for our own greed!

Atiku Abubakar, former Vice President of Nigeria, 19992007

No state can exist without borrowing - Akeredolu James Kwen, Abuja

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overnor of Ondo State, Oluwarotimi Akeredolu, has said that no state or nation, including the United States of America (USA), can exist without borrowing.

Akeredolu made this declaration while fielding questions from journalists after submitting his expression of interest and nomination forms at the All Progressives Congress (APC), national secretariat in Abuja.

The governor, who is seeking the party’s ticket to contest second term in the October 10, Ondo Governorship election, said he had since inception been spending within limits as he inherited debts that had been paid back.

“We have paid the debt we met before we initiated a move to have a borrowing of N30 billion. At the end of the day, DMO said with our debt profile we are not entitled to

Edo 2020: Obaseki, Shaibu dump APC, cite injustice, to press on with fight against godfathers IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin

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do State governor, Godwin Obaseki, has announced his resignation from the All Progressives Congress (APC), noting that the action is a fallout of a battle that arose from his refusal to subvert the will of the people for the interest of a predatory group of godfathers and political thugs.

The governor, who addressed journalists, after meeting with the Chief of Staff to President Muhammadu Buhari, Ibrahim Gambari, noted that he shall pursue his aspiration for a second term in office on another platform.

In a statement, the governor’s special adviser on media and communication strategy, Crusoe Osagie, said Governor Obaseki’s resignation came as result of his resolve to continue the battle to protect the resources of Edo people and

… as reactions trail formal resignation from APC sustain good governance in the state.

Meanwhile, the deputy governor, Philip Shaibu, also resigned from the APC. In his resignation letter addressed to the Ward chairman, APC Ward 11, Etsako West Local Government Area, he said, “I write pursuant to Article 9.5 (i) of the Constitution of the All Progressives Congress (APC) to formally resign my Membership of the All Progressives Congress and to inform you of my formal withdrawal from all or any of its proceedings and processes whatsoever.”

Meanwhile, the resignation of both has elicited divergent reactions from politicians in the state.

Those that spoke with BusinessDay on telephone are, Anselm Ojezua, factional chairman of APC in the state; David Imuse, also a factional chairman of the party in the

state; Peter Obadan, former deputy governor to John Odigie-Oyegun; Peter Aguele, chairman, Esan South-East Local Government; Frank Okiye, speaker, Edo State House of Assembly, and Frank Ilaboya, chairman, Owan West Local Government.

There are speculations that the governor will formally defect to the main opposition party, People’s Democratic Party (PDP), today, June 17.

Speaking on the governor’s resignation, Ojezua stated that the party had lost an asset in the person of the governor in the state. Ojezua, who is the chairman of the faction loyal to the governor, said the resignation of the governor did not come to him as a surprise.

“The resignation of the governor did not come to me as a surprise though I am very saddened by the development.

I think APC has lost a huge as-

set,” he said.

On whether the faction is going with Obaseki, he said, “We met last Saturday and the state working committee of the party is meeting tomorrow and after our meeting we will make a statement.”

He however said that at the moment, he was still the chairman of the APC, as he was elected, and the matter was in court and would pursue it to a logical conclusion.

In his reaction, the former deputy governor of the state, Peter Obadan, argued that the resignation of Obaseki from the APC would not affect the fortune of the party in the forthcoming September 19 governorship election in the state.

Obadan, who was deputy to John Odigie-Oyegun on the platform of Social Democratic Party, said the decision to resign from the party was entirely that

Hope Uzodimma (r), governor, Imo State, with Ibrahim Gambari, chief of staff, after a meeting with President Muhammadu Buhari at the Presidential Villa in Abuja.

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more than N15 billion, so we have gotten N15 billion, but all of that have gone on infrastructure development. We have to pay salaries that are primus; I believe that every worker deserves his wages.

“But I can assure you, we have done a lot of work before the loan came so the loan had to be used to pay a number of our contractors because we have adopted a way of doing our business, which is different from any other person.

“We made it a policy, any contractor that wants to work for us, start the work. You must attain up to 30% with your own money before we start paying you that allows for quality jobs,” he said.

Akeredolu further disclosed plans to improve the Internally Generated Revenue (IGR) in state to N4 billion per month after the COVID-19, which is negatively impacting economic activities not only in the State but across the country. www.businessday.ng

How Nigeria’s power sector bleeds over N40bn monthly ISAAC ANYAOGU

...in uncollected revenue

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cent from their tariff because the Federal Government is funding it, and the balance of N20bn should go to the DisCos. “But the numbers don’t add up,” said Kester Enwereonu, director at Enugu DisCo. “This is the bane of the Nigeria electricity supply industry.”

DisCos cumulatively collect an average of N40 billion monthly out which the Central Bank of Nigeria, which tracks their collections, removes N3 billion as first-line charge to repay the Nigeria Electricity Market Stabilisation Facility (NEMSF), a loan it disbursed to the market in 2015, and other legacy debts; N2 billion goes to the Federal Inland Revenue Service (FIRS) for Value Added Tax (VAT); N8.5 billion is paid to TCN on the average while the Nigerian Bulk Electricity Traders receives N12 billion to pay GenCos, and DisCos get

n analysis of cash-flow into Nigeria’s electricity supply industry paints a disturbing picture of a sector losing on average over N40 billion monthly due to poor collection and weak technical facilities, BusinessDay can report.

Power generation companies (GenCos) generate about 3,600 megawatts (MW) out of which 100MW is dispatched to Niger Republic, Togo and Ajaokuta Steel, leaving 3,500MW which, at the average monthly tariff of N32 per kWh, should yield N80.5 billion monthly.

According to contracts signed by industry players, GenCos through the Nigerian Bulk Electricity Trading Company (NBET) should receive N52bn, the Transmission Company of Nigeria (TCN) should get N17bn, but the regulator has cut out 50 per-

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N14 billion.

This situation is largely caused by the inability of DisCos to recover all the money for power generated and tariffs that do not guarantee a commercial return, analysts say.

“All the parameters that fed into tariffs including exchange rate, gas prices and inflation changed, but prices remained the same. This was a major problem,” said Chuks Nwani, an energy lawyer based in Lagos.

However, in real terms, it is a bit nuanced. Power generated daily sometimes falls lower than 3600MW. For example, in the fourth quarter of 2019, the regulator said electric energy generated was 8,101,193MWh or 90,013.25MW a month, which comes to around 3,000MW daily.

But the same pattern of losses is replicated every month as many consumers remain un@Businessdayng

metered. According to data from the Nigerian Electricity Regulatory Commission (NERC), of the 10,374,597 registered electricity customers, only 3,918,322 (37.77 percent) have been metered as at the end of the fourth quarter of 2019.

Thus, 62.37 percent of the registered electricity customers are still on estimated billing which has contributed to customer apathy towards payment for electricity, according to NERC’s report.

But here is where it gets sticky.

There are roughly 10.4 million customers in a country with over 20 million buildings and facilities connected to the electricity network, DisCos say.

“Out of the 10.4m customer accounts, more than 20 percent are inactive. Thus, less than 8m customers are paying for electricity consumed by over 20m consumers,” Enwereonu said.

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news Nigerians dissatisfied with...

Continued from page 1

about willingness of the

government to right-size the country’s ministries, departments and agencies (MDAs) which are a drain on its resources.

These views were expressed in surveys conducted during the first day of the two-day BusinessDay digital dialogues themed ‘A National Conversation: Mapping Nigeria’s Response to COVID-19’.

Eighty-two percent of respondents in the poll voted for immediate removal of petrol subsidy, and 66 percent said they believe devaluation of the naira will boost confidence in the economy. However, 69 percent of respondents said they do not think government will downsize its MDAs. This is despite recent moves by the government to rationalise the MDAs to cut cost of governance.

More than 70 percent of the respondents to the surveys said they are unhappy with the country’s response to the pandemic.

The displeasure, they said, was as a result of not just the timing of the government’s response to the virus, but also its failure to provide personal protective equipment for medical professionals in the frontline of the pandemic.

In Africa, Nigeria is the second-most affected country by the virus, just behind South Africa, with a total infected cases put at 16,658 as of 16th June, according to data from Worldometer, a service that tracks statistics real-time.

That figure includes 5,349 patients that have been discharged and 424 that have died from it.

After missing the timing of quickly restricting international flights from coming into the country, a delay that resulted in the country recording the index case of the virus, the government of Africa’s biggest economy enacted a five-week lockdown that began on March 30, a move meant to check the spread of the virus.

However, unlike many other countries that enacted a lockdown, Nigeria failed to utilise the lockdown period to ramp up testing in order to assist in isolating those that might have been infected with the virus.

Meanwhile, in the process of enacting the lockdown, the livelihood of millions of the citizens were threatened, given that about 58-60 percent of Nigerian population falls in the informal sector.

That is, they live by what they earn on a daily basis.

The World Bank in a recent report highlighted that the lockdown measures, copied from the advanced world, might not be favourable to

African nations due to the poor identity management system to channel any kind of fiscal stimulus to its vulnerable populace.

The lockdown was, however, lifted without the country improving on its testing capacity.

From the survey, 63 percent of respondents said the “lockdown curbed the spread of the virus in Nigeria”.

Fast forward to 16th June, the country has recorded over 16,000 cases, with average daily cases put at 400, analysis of NCDC data shows.

With the low level of testing seen in the country, 88 percent of the respondents in the survey feel the COVID-19 numbers in the country do not reflect reality.

Analysts say the country is yet to reach its peak on the infections curve, with the number of cases rising daily.

Already, with the increasing numbers, the country’s health sector is overwhelmed as the cases have outnumbered bed spaces in isolation centres.

The government is proposing home care delivery treatment for those with mild cases of the virus, a move that has generated wild spread criticism from all fronts.

Medical personnel have also cried out on issues of inadequate Personal Protective Equipment (PPE), with many health workers infected with the virus.

In the survey, 86 percent of Nigerians said medical professionals are not well equipped to handle the virus.

The coronavirus pandemic so far has exposed Nigeria’s weak economy as virtually all sectors of the economy have been battered.

It has also exposed the country’s poor governance structure, according to 95 percent of the people surveyed.

Seventy-seven percent of those polled agreed that Nigeria’s fiscal strategy to battle the coronavirus has been poor, with 9 out of 10 voting that the government was over-borrowing.

The results come after data showed Nigeria’s debt to revenue at a record-high of 99 percent in the first quarter of 2020 on dwindling oil and non-oil incomes.

Nigeria paid a total of N943bn in debt service from N950.56bn revenue in the period resulting in the country’s worst debt servicing record since 1999 at least.

In the face of a severe slump in revenue and inadequate cash, Nigeria has sought more debt including a record $3.4bn IMF facility.

On the way forward for the country, respondents asked the government to focus more on building the country’s educational sector and also the health sector. www.businessday.ng

Philip Shaibu, deputy governor, Edo State, announcing his resignation from the All Progressives Congress (APC), at the Government House in Benin City, yesterday.

COVID-19 provides catalyst for...

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cal look at its health infrastructure as well as fast-track key economic reforms which were too difficult to do before now.

Among the reforms that Africa’s largest economy has been forced to undertake due to the impact of the pandemic, according to the minister, are the right-sizing of government agencies, removal of fuel subsidy, the move towards a single window exchange rate, among others, she said at a panel session tagged ‘Mapping Nigeria’s fiscal strategy and response’ at the BusinessDay digital dialogues with the theme ‘A National Conversation: Mapping Nigeria’s Response to COVID-19’.

The session was moderated by Frank Aigbogun, publisher, BusinessDay Media, with panellists that include Finance Minister Zainab Ahmed, Paul Collier, a professor of Economics and Public Policy at Blavantnik School of Government, Mansur Ahmed, president, Manufacturers Association of Nigeria, and Ibukun Awosika, chairman, First Bank of Nigeria.

“Because of the decline in crude oil prices it became easy to pull out of fuel subsidy, so we used this opportunity to exit fuel subsidy. We also had an opportunity to critically look at some of the key developments that have been going on in the oil and gas sector. It gave us opportunity to look very closely at the cost of operations of the oil and gas sector which is reported as the highest in the world today,” Ahmed said.

“Currently, we are looking at how to right-size government by doing some alignment of some government agencies and departments.

We are able to further deregulate the exchange rate moving from official rate of N305 to N360. We are also on the journey to merging to a single exchange rate. It is a

process, we made a commitment and we are going to get there,” she said.

She said during this period the economy managers were able to get the federal and state governments to step back and take stock and rationalise expenditure. She cited the reviewed of the budget to accommodate critical expenditure that is required.

“Just Thursday last week we passed the amendment to the budget. One and a half week before then we passed the amendment to MTEF. It is now allowing us to vigorously move ahead with implementation of key government programmes and projects that are required to reflate the economy,” she said.

She said the government would also be looking at how it can extend stimulus package.

“We have a suite of incentives we are working on. Some of them are already encapsulated in the Finance Bill that was signed up on January 13.

Finance Bill provided relief to small businesses by zeroing taxes for them, so we have businesses in Nigeria with turnover of N25 million and below that are paying no income tax; their company income tax is zero.

The middle category – N25 million to N100 million – have a reduced tax rate of 20 percent,” Ahmed said.

She said the government is also looking at how to provide tax relief for businesses that are not within these first two brackets. “We are trying to encourage businesses to keep jobs so that they do not downsize to maintain production and so that they don’t have to stop productive activities,” the minister said.

“Special attention is being giventoservicesector,especially aviation and hotel industry and such like so that they are able to come back to operation and manage at a level that enables to retain jobs. We will be going to Nigeria capital market to raise funds. We had earlier done that

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even last week. We closed up on a sukuk bond. We set out to raise $150 billion. Sukuk bond is meant for building of roads specific across the country. The turnout was $650 billion which meansthereisalargeappetitein Nigeria and also there is a large capacity,” she said.

‘A unified exchange rate works for everyone’ Speaking during the panel session, Paul Collier said Nigeria’s multiple exchange rate regime has created room for sharp practices, calling on the government to unify the nation’s exchange rate window.

“A unified exchange rate works for everyone,” he said.

The Economic Sustainability Committee chaired by the Vice President Yemi Osinbajo had recently also recommended the unification of the exchange rates in a bid to maximise naira returns to FAAC from foreign exchange inflows.

The experts at the digital dialogues stressed the need for Nigeria to take advantage of the current global pandemic and change the narratives around its economy.

On this note, Collier said the fall in global oil price would not be reversed anytime soon, adding that three areas of opportunities for government to unlock include food production. He lamented a situation whereby the country still imports processed foods.

“It is a waste of foreign exchange,” he said.

He, however, challenged the government to be more actively involved in agro food processing which would create more jobs for teeming youths.

Mass housing is another area of potential that needs to be unlocked. According to Collier, a stress-free land rights and mortgage system would further open the economy.

Lastly, he stressed the need forthecreationofclusterfirmsin major cities around the country.

Onhispart,MansurAhmed, president, Manufacturers Association of Nigeria, said there has been an increase in anxiety among manufacturers in @Businessdayng

the country due to lack of clarity from the government as the global pandemic continues to batter global economies. He called on both the fiscal and monetary authorities to use the crisiscreatedbythepandemicto resolve issues around exchange rate and access to financing.

“We are in a situation where we do not have all the answers, and cannot predict where we are heading. The pandemic is introducing new limitations,” Mansur said.

Need for government, private sector partnership Also speaking at the panel session, Ibukun Awosika, chairman, First Bank of Nigeria, said the COVID-19 is a double whammy for manufacturers due to plunging of oil price as factories are closing down due to the ravaging pandemic.

She called on the government to partner with the private sector on creation of cluster firms across the nation.

As countries across the globe continue to battle with COVID-19 pandemic, crash in the price of crude oil and dwindling revenues as a result of the impact of the coronavirus pandemic on the global economy have put some more pressure on Nigeria’s oil-dependent reserves.

Apart from the recently approved $3.4 billion in IMF RFI funding, Nigeria is planning to receive an additional roughly $3.6 billion from the World Bank, African Development Bank, Afreximbank, and Islamic Development Bank to help cushion the impact of the virus.

The external reserves of Africa’s largest crude exporting nation fell below $36 billion mark in March, touching its lowest levels in 29 months.

The reserves which show the nation’s ability to weather external shocks dropped to $35.7 billion as at March 24, according to Central Bank data. That’s the lowest level since October 2017 when the country managed to limp out of five quarters of negative growth. External reserves at the time stood at $34.3 billion.

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BusinessDay national conversation on Nigeria’s COVID-19 response market can deliver Nigeria out Nigeria’s economy seen in sharp plunge in Q2 Capital of current challenges, says FMDQ CEO ... with 91% of sectors trodden by virus LOLADE AKINMURELE, BUNMI BAILEY & SEGUN ADAMS

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igeria’s economy is forecast to see a sharp plunge in the second quarter (Q2) of 2020 with 91 percent of sectors ravaged by the coronavirus pandemic, according to early estimates

by Yemi Kale, the country’s chief statistician and head of state data agency, National Bureau of Statistics (NBS).

With the chances of a pick-up in the economy slim, it means Nigeria could be in a technical recession between July and September 2020, the second economic decline for Africa’s largest economy in five years. Economists say that will most likely lead to increased job losses and rising poverty.

Preliminary numbers showed that only a small fraction of the 46 sectors of

the Nigerian economy didn’t contract in the second quarter of the year, according to Kale, who spoke at a BusinessDay webinar, Tuesday.

“Forty or so sectors had significant challenges in the second quarter and that is what the numbers are showing,” said Kale, who didn’t give a specific figure. “From the numbers we have, although we are still collating, we should expect a very, very negative performance in the second quarter.”

Kale also expects the economy to contract by the end of the year with a long road to recovery, despite a positive first quarter in which the economy grew by 1.87 percent.

The impact of an initial lockdown of key states, Lagos, Abuja and Ogun, in the second quarter weighed on household spending, which accounts for about 70 percent of the GDP, Kale said.

In the second quarter, the Agriculture sector was not affected significantly because much movement is not needed for farming activities and due to the fact that 90% of activities are subsistence-based, Kale said.

Trade, however, has been affected by the disruption to international trade and domestic manufacturing.

Manufacturing was also hard hit in Q2 while there were little activities in Real Estate and Transport.

On the positive side, however, Kale said the telecommunications sector recorded strong growth as data consumption rose in the period.

Other sectors that make up 30 percent of the economy, like hotels and restaurants expectedly struggled in the quarter.

“The ban on concerts, art exhibitions, cinema, etc also impacted negatively on arts

and entertainment sectors.

Construction was not left out,” he said.

Experts hope the slow reopening of the economy since May will lessen the effect of the lockdowns that put around 38 percent of workers out of job, helping to soften blows to the economy.

The move, however, by Nigeria and countries across Africa to start reopening our economics before hitting their peak in infections might prolong the pandemic and cause the virus to spread more, said Acha Leke, Africa Chairman, McKinsey & Co. International Trade is also expected to be affected.

“As we reopen our domestic economies, the concern is how much of the international economy will be willing to trade with us when we have not reached our peak yet and I think that Continues on page 31

Rotimi Akeredolu (l), governor, Ondo State, presenting his expression of interest form to President Muhammadu Buhari, during his visit to the Presidential Villa in Abuja, yesterday.

. . as firm restates commitment to facilitating private capital ... attractive FX market needed for foreign capital inflows Iheanyi Nwachukwu

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igerians hope that leaders of the country will one day free themselves from personal interests and take decisions for the good of the entire economy. This renewed optimism comes as countries battle COVID-19 and its current/future impacts on their economies.

While the pandemic continues to dry major sources of revenuetoNigeria,stakeholders believe that its capital markets stillhavethepotentialtofundthe nation’s critical infrastructure, a situationwhichthegovernment must admit and without further delayoiltheprocessesofreaping the benefits.

Speaking during a fireside chat session at the BusinessDay digital dialogue titled ‘National Conversation: Mapping Nigeria’s Response to COVID-19’, Bola Onadele.

Koko, CEO, FMDQ Group, gave status update on the capital market and the key features that define its future.

He added that government finances alone cannot deliver all the infrastructure the country needs, such as in education, power, housing, roads, etc.

The fireside chat, titled ‘Challenges, opportunities and outlook for the Nigerian capital market in the aftermath of COVID-19’, was moderated

by Frank Aigbogun, publisher, BusinessDay Media.

“Capital market is the sector that can deliver Nigeria out of the current challenges. The capital market is very critical at this point in the economy,” Onadele.Koko said.

On how Nigeria can take opportunities from COVID-19 challenges to develop the capital market, he said, “Let us look at what we have in place and what we need to put in place...

in terms of infrastructure.”

He said for the market, there are solid people and infrastructure in the capital market – NSE, FMDQ, CSCS, FMDQClear.

“So if you look at the box of infrastructure, the people to drive the business, Nigeria has them. What we need is the legal framework. Without the legal framework, we cannot attract the required capital,” he said, noting that rigid rules can’t help in efforts to attract market liquidity.

Nigeria’s total bond market (non-sovereign), which is less than N1 trillion amid rising pension funds remains a source of worry to the stakeholders.

“We need to say what is our philosophy. We have to cancel the question on what is our philosophy. A simple alignment of our philosophy with government regulation will help us succeed, otherwise we will have to struggle for long,” Onadele.Koko said.

“We need to ask, how do we begin to create the kind of alignment between private sector and government in relation to capital market? How can capital market support the SMEs? The private sector should be interested in what is in it for it,” he said.

On economic diversification and capital flow, he said, “I’m not sure we are sincere in the issue of diversification. Sorry to say, leadership is very critical in the issue of diversification.

We need the leaders that can see 40 years of Nigeria without crude oil. If we are not careful, we are going to miss the opportunity again. Thanks to CBN for opening the opportunity for private capital. Our ambition is to be the leading private capital destination come 2024. Private companies must be able to unleash the entrepreneurial potential of the country.”

‘Pharmaceutical, aviation industries must harness effort for Nigeria to make meaning of testing’ … as experts map Nigeria’s response to COVID-19 IFEOMA OKEKE, ANTHONIA OBOKOH, TEMITAYO AYETOTO & GODSGIFT ONYEDINEFU

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igeria’s effort at strengthening its testing capacity across the country might not make meaningful impact if the pharmaceutical industry remains in doldrums, behind advanced technological resources being activated in the wake of the coronavirus outbreak around the world. Also without the integration of the aviation prowess in ferrying essential medical supplies around the country, the outcome of Nigeria’s coronavirus situation

could get grimmer than it is.

Speakingduringtheopening session of the two-day BusinessDay digital dialogues titled ‘National Conversation: Mapping Nigeria’s Response to COVID-19’,Maurice Iwu, president, Bioresources Development Group (BDG), said it was essential for the pharmaceutical industry to be encouraged to roar into relevant actions capable of resolving pandemics without a vulnerabledependenceonwhat arrives at the seashores.

While there are homegrown explorations into the development of compounds, the professor regrets that none of the large pharmaceuticals in the country has manuwww.businessday.ng

factured base ingredients, a situation he described as an offshoot of poor investment in research and development (R&D) to address the gap.

“My own take is that the entire pharmaceutical industry has to change. We have to embrace the fact that we do not have to rely on others for our own medical need without in-country synthesis of active ingredients. We are so vulnerable that even if we do all the tests in the world and we do not have a means of taking care of ourselves, we are very vulnerable,” Iwu said during the panel session titled ‘COVID-19: How is Nigeria and Africa’s trajectory differ-

ent from the rest of the world?’

The session was moderated

by Chinny Ogunro, CEO, WellSpring Health, and had Akin Abayomi, Lagos State commissioner for health, Funke Adeyemi, regional director, Africa, International Air Transport Association (IATA), Christie Happi, director, African Center of Excellence for Genomics of Infectious Diseases (ACEGID), Redeemer’s University, Maurice Iwu, chairman, Bioresources Development and Conservation Program, Fola Laoye, founder & CEO, Health Markets Africa, and Abubakar Sadiq Mohammed, vice-chair, ANAP Foundation COVID-19 Think Tank as panellists.

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“The CBN intervention is doing some good job, but I think the major issue is that we should move out from being a consumer nation to a nation that produces,” he said.

Nigeria is expected to see the production of COVID-19 vaccines from a partnership with United States Health Institute that compared some Nigerian sourced compounds against COVID-19. The result of that comparison is three active compounds, patented and awaiting clinical trial to commence market readiness.

In his opening address earlier on Tuesday, Frank Aigbogun, publisher, BusinessDay, beamed a light on how @Businessdayng

unsettling the last few months have been not just individuals, small and large businesses, but nations as well.

Even as events continue to unfold, Aigbogun said the pandemic may be universal, but the management of it has not been uniform across the globe and surely the outcomes have not been the same.

This, he said, was why Nigeria’s foremost business daily has assembled speakers to provide historical context to what the countrycurrentlyfacesandhow theNigeriangovernmentandits agencies are responding to the severeeconomiccrisisfollowing

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BusinessDay national conversation on Nigeria’s COVID-19 response

Nigeria’s quest for good governance hangs in balance over poor selection, accountability, responsibility JAMES KWEN (Abuja), MICHAEL ANI & INIOBONG IWOK (Lagos)

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igeria’s quest for good governance has continued to hang in the balance over poor process of selecting leaders and lack of accountability and responsibility by those in the saddle.

Panellists at the BusinessDay national discourse on Nigeria’s COVID-19 response made these observations, Tuesday, while speaking on the topic ‘Governance and Optimising Nigeria’s Response to COVID-19’.

The panellists comprising former political office holders and stakeholders in governance said for Nigeria to come out of bad governance, effect of which is evident in the difficulty in the containment of COVID-19 pandemic, there must be a total overhaul of the system. The sessions was moderated by Olisa Agbakogba, senior partner, Olisa Agbakogba Legal.

Peter Obi, a former governor of Anambra State, said the failed government seen in Nigeria today is as a result of the cumulative effect of leadership failure over the years, caused by poor recruitment process.

According to Obi, no matter the kind of plans one puts or has in Nigeria, with the kind of leaders Nigeria has, nothing good will come out of it, insisting that there must be an overhaul from the federal to states down to the local government.

While likening Nigeria to a plane carrying passengers by pilots that lack direction, the vice presidential candidate of the People’s Democratic Party (PDP) in the 2019 general elections said, “Our leader-

ship selection must change”.

Identifying failure in leadership responsibility, Obi cited a scenario that every local government in Nigeria receives at least N100 million monthly yet the state can’t afford N15 million to set up a testing laboratory for COVID-19.

“Also, a ventilator which cost about N10 million, many states can’t afford, yet we saw their State Assembly buying and sharing a fleet of cars,” he said.

He noted that Nigeria’s low budgetary funding to health and education, the two sectors necessary for improvement in human capital development, is like that of a failed state.

Compared to South Africa, Obi said Nigeria’s spending on education and health combined in the last four years is not up to the $17.6 billion earmarked by South Africa for just its health sector alone.

Obi, while speaking on the governance structure in the country, said Nigeria needs to look out for a new political arrangement that will decentralise the power of the Federal Government.

The former Anambra governor stated that the Executive Order 10, signed by President Muhammadu Buhari, was commendable, as this would assist in channelling needed funds to the judiciary, independent of the state government, in the discharge of their duties, and called for an Executive Order on savings and investment.

Also speaking, Oby Ezekwesili, a former minister of education, said it was impossible to get good leadership in Nigeria if Nigerians do not get the right people into public positions.

Ezekwesili advised that Nigeria must focus on the longer

Nigeria’s economy seen in sharp...

Continued from page 30

is the challenge we are going to face,” he said.

Long road ahead Positive numbers from leading economies like the US retail data have renewed hope that the global economy might see a V-shaped recovery after all.

Charlie Robertson, global chief economist at Renaissance Capital said key variables to watch out for are oil price, coronavirus infections trajectory and retail trade data.

US retail sales rebounded by a record 17.7 per cent in May as American consumers began spending and states gradually reopened their economies following the pandemic lockdowns.

That was the biggest monthly gain on records dating back to 1992, suggesting the country’s stimulus package have helped keep cash in consumers’ pockets.

A quick recovery of Nigeria from the recession, however, is unlikelybasedonthestructure of the economy and historic data on previous recessions, speakers at the BusinessDay conference noted.

Way Out Robertson said Nigeria’s government needs to get education and electricity right to attract necessary investments that will boost the economy.

“Nigeria has not hit the 70% metric of adult literacy which has for 200 years now www.businessday.ng

term and plan for the future to be able to deal with challenges when they break, such as the dreaded coronavirus.

The former presidential candidate in the 2019 election said there must be constitutional provision on how Nigeria uses the proceeds it gets from the sale of crude oil.

Ezekwesili said the plan to diversify the nation’s economy had not been done because the citizens have not demanded a standard of performance from their leaders.

Speaking further, she said the country needs strong citizen engagement that is data driven and analytical, stressing that leaders must carry the citizens along in governance of the country.

While stressing that citizens need to be at the centre of good governance in Nigeria, she said, “We need to have

a structure that is inclusive.

Nigerian leaders must think beyond oil and urgently deregulate the petroleum sector.”

Ezekwesili said there is nothing to celebrate about the fight against COVID-19 in Nigeria when a large percentage of the population is still locked in severe poverty, saying Nigerians need to have structures that work for them in the 21st Century and guarantee accountability and prosperity.

On his part, Philip Asiodu, former minister of petroleum, said bad governance in Nigeria is associated with the decay in the Civil Service which is the engine room of government and called value reorientation for better output.

Asiodu who decried the high cost of governance as one of the indices of bad leadership called for review of the salaries of political office

holders beginning from the president to other government officials as done in the early 1960s where political leaders reduced their earnings by 10 percent.

He also called for the return to old ways of doing things in the early post independence era where quota allocation was not the yardstick for employment and appointments but things were done on merit.

“The destruction of the Civil Service in 1975 compounded again in 1988. It is so painful, for instance, in 1975 we abandoned value. They abandoned the discipline or value and the dramatic puncture of the civil service brings in the idea of making hay while the sun shines. People were dismissed or retired whether you are good or bad... this brings about corruption,”

Asiodu said.

“We should review the salary structure from President downwards. What we have now is most wasteful. When we talked about these things, we do not mean rocket science. We should just go back to the simple honest says,” he said.

On his part, Aliyu Modiboo Umar, former FCT minister and chairman, Raviya Media Services Limited, said there is a void in governance in Nigeria, and to solve it, the country needs to look critically at the recruitment process in the civil service.

According to him, there needs to be a bridge in the gap between political authority and central bureaucracy in the country, a situation where the political elite is influencing the processes in the civil service.

Rauf Aregbesola (l), minister of interior; Georgina Ekoma Ehuriah (2nd l), permanent secretary; Ja’afaru Ahmed (2nd r), comptroller general, Nigerian Correctional Service, and others, during the inauguration of new set of 59 operational vehicles comprising 36 Green Maria, 18 Escort Duty Vehicles and 5 Customised Green Maria Buses at the Service headquarters in Abuja, yesterday.

been the essential level that a country needs before it can industrialize,” he said.

According to Robertson, Ghana has three times electricity per person than Nigeria, their adult literacy is nearly 80 percent compared to Nigeria’s 62 percent. As a result, foreign investors are more likely to put their investment in Ghana than Nigeria.”

Sutura Aisha Bello, PPP Component lead, UK Nigeria Infrastructure Advisory Facility said ignoring the private sector to partner in provide infrastructural services will delay the recovery of Nigeria from the recession.

“It is important for the government to try and work with the private sector,” she said. “They need to bring

them in both locally and internationally to be able to provide some of the infrastructure that we need in order for the economy to grow.”

Bello said that while debt isn’t bad, it must be channelled to productive sectors.

A silver-lining for Nigeria amid the pandemic is the opportunity to send investors a very clear signal regarding PPPs in the country.

“So it is very important for the country to have postCOVID very clear pipeline of critical transformational, investable projects that are people-focused,” said Bello, noting that such would help reduce income-disparity between rich and poor Nigerians already worsened by the virus.

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‘Pharmaceutical, aviation industries...

Continued from page 30

COVID-19 and the constraints faced in that response.

For Funke Adeyemi, regional director, Africa, International Air Transport Association (IATA), without aviation’s active role in moving cargoes, the number of deaths as a result of COVID-19 would have worsened.

Even as air travel is expected to resume in the coming weeks with the potential to increase the number of infections, she said the industry is working to strengthen measures of protection especially for the demographic most at risk. “ Aviation is one of the hardest hits sectors from the Covid-19. Over the last three months, passenger travel reduced by 90 percent and that @Businessdayng

put about 3.2 million jobs at risk. For Nigeria, this means a lot also. The industry lost about $7 million and about 90,000 jobs at risk across the entire aviation. So this is the economic impact,” Adeyemi said.

Christie Happi, director, African Centre of Excellence for Genomics of Infectious Diseases (AGEGID), Redeemers University, said actions and efforts are being synchronised globally to ensure that vaccines, when developed, are equitably accessible by all nations.

The Centre led by Happi was the first on the African continent to produce a genomic sequencing – information on the behavioural pattern of Covid-19 to the global medical community.

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BANKING Here’s what CBN can do to avert imminent Covid-19 induced recession HOPE MOSES-ASHIKE

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he International Monetary Fund (IMF), in its April 2020 World Economic Outlook (WEO), said the global economy would experience its worst recession since the Great Depression, exceeding that seen during the financial crisis a decade ago.

The forecast is premised on Covid-19 induced economic shock, which is mainly characterised by disruptions to the global supply chain, on account of the mitigating measures put in place by various governments to contain the spread of the disease. The effects on the global economy have been unprecedented and, indeed, severe.

These include significant stock markets crashes, exchange rate volatilities, rising corporate and public debt, rising levels of unemployment, tightening financial conditions, capital flow reversals, and negative impacts on commodity prices, among others.

Global growth projection by the IMF shows that output growth forecast for 2020 was downgraded by 3.0 per cent in 2020, compared with an initial growth projection of 3.3 per cent.

According to World Bank forecasts, the global economy will shrink by 5.2 percent this year. That will represent the deepest recession since the Second World War, with the largest fraction of economies experiencing declines in per capita output since 1870, the World Bank says in its June 2020 Global Economic Prospects (GEP).

Nigeria, the African region’s largest economy and most populous country in the region, is expected to shrink by 3.2 percent in 2020, the World Bank Group said in its June 2020 GEP. This year’s contraction in activity is set to be the severest in four decades and this is as a result of the unprecedented collapse in oil prices.

The Nigerian economy managed to eke out a positive growth rate of 1.87 percent in Q1, 2020. This performance is expected to drop, especially in Q2, owing to low crude oil prices and the negative impact of COVID’19 on the economy, said Uche Uwaleke, a professor of finance and capital markets, chair, banking and finance department, Nasarawa State University Keffi, Nasarawa State.

Zainab Ahmed, minister of finance, budget and national planning, on March 27, 2020, raised alarm that Nigeria might go into recession if the coronavirus pandemic continued for the next couple of months.

Godwin Emefiele, CBN governor

According to a report by the monetary policy department of the CBN, recession is a business cycle contraction, and it refers to a general slowdown in economic activity for two consecutive quarters.

During recession, there is usually a decline in certain macroeconomic indicators such as GDP, employment, investment spending, capacity utilization, household income, business income, and inflation, with the attendant increase in the rate of unemployment. Technically, when an economy records two consecutive quarters of negative growth in real GDP, it can be said to be in recession.

Nigeria, effectively, slipped into a technical recession in the second quarter of 2016 and maintained negative growths in all quarters of that year, driven largely by the downside effects of global shocks, which led real GDP growth to plunge sharply from 6.2 percent in 2014 to 1.6 percent contraction in 2016.

The global shocks at the time included widespread and rising geopolitical tensions along critical trading routes in the world, crude oil prices, and normalization of monetary policy by the united states’ federal reserve system.

The CBN intervened with various policies which also included a bailout to sub-national governments who could not pay their workers for several months.

Other interventions were the introduction of an Investors and Exporters (I&E) FX, which allowed www.businessday.ng

investors and exporters to purchase and sell foreign exchange at the prevailing market rate, a cycle of tightening which culminated in a July 2016 hike in the Monetary Policy Rate from 12 percent to 14 percent.

The bank introduced a demand management approach in order to conserve the nation’s reserves and support domestic production of items that can be produced in Nigeria, growth-enhancing fiscal policy and development finance intervention among other measures.

Consequently, after 5 consecutive quarters of negative growth beginning in the 1st quarter of 2016, a coordinated approach by the fiscal and monetary authorities supported a rebound in the nation’s economy during the second quarter of 2017.

However, analysts polled by BusinesesDay were of the view that the CBN can do more to avert the imminent Covid-19 induced recession, looking at reducing the Cash Reserve Ratio (CRR), review its FX control rules and promoting private investment.

In order to avert a technical recession, meaning two quarters of negative growth in GDP, the government should gradually lift movement restrictions and reopen the economy while making people aware of safety measures including use of face masks.

In line with what is common knowledge, Uwaleke said the government has to pump more money into the economy, especially in

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agriculture, health, education and critical infrastructure up to a minimum of 10 percent of GDP. He said what has been injected so far by way of stimulus packages including CBN interventions are still less than 5 percent of GDP. To be able to do this, he said the government needs a lot of money.

“Given that the CBN cannot print money owing to inflation and exchange rate concerns and considering that the government has borrowed so much to the extent that debt service to revenue Ratio in Q1 is reportedly over 90 percent, the government is advised to sell some of its assets to raise the required funds. For instance, the government can list the NNPC and NLNG on the Stock Exchange and then do an IPO to raise money while still maintaining controlling interest”.

On its part, the CBN has done a lot but can still complement this effort by reducing the Cash Reserve Requirement from the current 27.5 percent considered high by the banking sector to enable them make more credit.

The CBN has responded in several ways by supporting hospitals and pharmaceutical industry with low interest loans to immediately deal with the public health crises.

The bank is also working with the private sector Coalition Against COVID (CACOVID) to support the Presidential Task Force o n C O V I D - 1 9 across its response, while mobilizing palliatives for the poor and vulnerable.

On March 16, the Central Bank of Nigeria announced new measures, including a one-year extension of a moratorium on principal repayments for CBN intervention facilities; The reduction of the interest rate on intervention loans from 9 percent to 5 percent; strengthening of the loan to deposit ratio policy (i.e. stepped up enforcement of directive to extend more credit to the private sector); creation of N50 billion target credit facility for affected households and small and medium enterprises; granting regulatory forbearance to banks to restructure terms of facilities in affected sectors.

Others are improving FX supply to the CBN by directing oil companies and oil servicing companies to sell FX to the CBN rather than the Nigerian National Petroleum Corporation (NNPC); additional N100 billion intervention fund in healthcare loans to pharmaceutical companies and healthcare practitioners intending to expand/ build capacity; Identification of few key local pharmaceutical companies that will be granted funding facilities to support the procurement of raw @Businessdayng

materials and equipment required to boost local drug production.

N1 trillion in loans to boost local manufacturing and production across critical sectors, adoption of a unified exchange rate system for Inter-Bank and parallel market rates to ease pressure on forex earnings as oil prices continue to plummet.

CBN adopts the official rate of N360 to a dollar for International Money Transfer Operators rate to banks.

For on-lending facilities, financial institutions have been directed to engage international development partners and negotiate concessions to ease the pains of the borrowers, provision of credit assistance for the health industry to meet the potential increase in demand for health services and products “by facilitating borrowing conditions for pharmaceutical companies, hospitals and practitioners,” analysts at KPMG pointed out.

On the fiscal side, the Federal Government reduced the crude oil benchmark price from USD 57 to USD 30. The Central Bank pledged to pump NGN1.1 trillion (USD 3 billion) into critical sectors of the economy.

A three-month repayment moratorium for all TraderMoni, MarketMoni and FarmerMoni loans, commenced.

Similar moratorium to be given to all Federal Government funded loans issued by the Bank of Industry, Bank of Agriculture and the Nigeria Export-Import Bank.

“I do not think the current palliatives are enough measures to grow the economy and prevent it from entering into a recession.

What I think will grow the economy is private investments strongly supported with government measures to protect such investments,” Ayodele Akinwunmi, relationship manager, corporate banking, FSDH Merchant Bank Limited, said. He said these measures would provide job opportunities for the people and stimulate economic growth.

Many companies are looking to restructure their operations to address challenges posed by the pandemic including securing their supply chains.

However, various rules around foreign exchange control are inhibiting their options and flexibility according to Taiwo Oyedele, head, tax and regulatory services, PwC. “It will help if the CBN can review its exchange control rules with a view to simplifying and relaxing those that are constituting undue restrictions to investment and business efficiency,” he said. Such rules include certificate of capital importation and the list of items classified as ‘Not Eligible for Foreign Exchange’.

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Wednesday 17 June 2020

FINANCIAL TIMES

World Business Newspaper

US retail sales rebound almost 18% in May as consumers return Biggest monthly gain on record as spending at stores is more than double economists’ expectations MAMTA BADKAR

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S retail sales rebounded by a record 17.7 per cent in May as American consumers began spending and states gradually reopened their economies following the pandemic lockdowns.

It was the biggest monthly gain on record, dating back to 1992.

The rise surpassed the October 2001 reading of 6.7 per cent and followed a decline of 14.7 per cent in the previous month. It was also more than double economists’ expectations of an 8.2 per cent increase.

Sales of clothing and accessories, electronics and appliances, sporting goods, home furniture and motor vehicles all surged last month after steep declines in April.

So-called control sales, which strip out more volatile items such as food, petrol and building materials, rose 11 per cent, also ahead of expectations.

Despite the monthly surge, retail sales were down 6.1 per cent from the same period a year ago.

The data follow indications from department store chains Macy’s, Kohl’s and Nordstrom last week that sales at reopened stores were improving from their

Retail spending in May surpassed economists’ expectations of an 8.2% increase © Chris Delmas/AFP/Getty

depths, while monthly auto sales also climbed in May from the previous month.

The increase in spending came as 2.5m Americans returned to work last month and as household incomes were aided by federal support in the form of direct deposits to bank accounts, expanded unemployment benefits and the Paycheck Protection Program aimed at keeping employees on the payroll.

The figures were cheered by US president Donald Trump who wrote on Twitter: “Wow! May retail sales show biggest one-month

increase of ALL TIME, up 17.7%.

Far bigger than projected. Looks like a BIG DAY FOR THE STOCK MARKET, AND JOBS!” US stocks were set to rally on Tuesday and the data gave the S&P 500 an extra boost. S&P 500 futures were up by 1.9 per cent ahead of the data release and the index opened 2.6 per cent higher.

“The key point here is that it’s now pretty easy to imagine a full reopening of the economy taking all components of retail sales back to their pre-Covid level by, say, July, with the exception of food service, where capacity

constraints will hold down sales for the foreseeable future,” said Ian Shepherdson, economist at Pantheon Macroeconomics.

However, he noted that after July “much depends on what Congress does to the enhanced unemployment benefits, currently scheduled to end at the end of the month”.

To date, the administration has been opposed to extending unemployment payments based on the argument that the financial support measures are a disincentive for a return to work.

Mr Shepherdson said that if

benefits ended “with millions of people still unemployed, sales will drop back”.

A separate report from the Federal Reserve showed manufacturing was also gradually recovering, with industrial production up by 1.4 per cent higher in May — rising for the first time in three months.

However, output remained “15.4 per cent below its pre-pandemic level in February”.

While the easing of social distancing restrictions boosts an economic recovery, weak demand, supply chain disruptions, low oil prices and uncertainty are expected to continue to weigh on the industrial sector.

“The recovery will likely be two-phased: a shortlived, partial snapback in output, followed by a sluggish and extended rebound,” said Gregory Daco, economist at Oxford Economics.

While America has been gradually rebooting its economy since May as coronavirus cases slowed, the outbreak has spread in western and southern states that were among the earliest to reopen, heightening fears about another round of shutdowns.

However, both US Treasury secretary Steven Mnuchin and White House economic adviser Larry Kudlow have said in recent days that the US cannot shut down the economy again.

Powell warns of ‘significant uncertainty’ over US recovery Fed chair strikes a cautious tone in testimony to Congress despite early signs of rebound JAMES POLITI

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ay Powell, the Federal Reserve chair, has warned Congress of “significant uncertainty” surrounding the “timing and strength” of the US economic recovery, after some encouraging data stoked hopes of a swift exit from the recession triggered by the pandemic.

In prepared remarks to the Senate banking committee, Mr Powell struck a cautious tone about America’s economic prospects, in line with most Fed officials’ expectations that they will have to keep interest rates close to zero until at least the end of 2022.

The Fed chair’s wariness came despite figures last week showing a surprise bounce back in job creation in May after a flood of lay-offs a month earlier. Data released on Tuesday also revealed a larger-than-expected rebound in retail sales last month.

“Recently, some indicators have pointed to a stabilisation, and in some areas a modest rebound in economic activity,” Mr Powell said. “That said, the

Jay Powell stuck to his message about the need for additional fiscal stimulus on Tuesday, as lawmakers haggle over the size and details of further measures © Bloomberg

levels of output and employment remain far below their prepandemic levels, and significant uncertainty remains about the timing and strength of the recovery.”

Until the public is confident that the disease is contained, a full recovery is unlikely Jay Powell, June 16, 2020 testimony to Congress With the US still facing the threat of new infection spikes in several states, Mr Powell added that the biggest factor weighing www.businessday.ng

on the outlook was “uncertainty about the path of the disease and the effects of measures to contain it”.

“Until the public is confident that the disease is contained, a full recovery is unlikely,” he added.

Speaking to lawmakers, Mr Powell detailed all the measures taken by the US central bank since March to cushion the pandemic’s blow to markets and the economy, including slashing the Fed’s main interest rate to

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zero, launching wide-ranging asset purchases and setting up a series of emergency facilities to help troubled borrowers access financing.

Mr Powell reiterated that the Fed was “committed to using our full range of tools to support the economy in this challenging time”, but offered no additional signal about the form or timing of any further monetary policy action.

Mr Powell has repeatedly made clear to Congress that they should consider additional fiscal stimulus on top of the $3tn already approved since the pandemic began. He stuck to that message on Tuesday, as lawmakers haggle over the size and details of further measures.

“The Cares Act [approved in March] and other legislation provide direct help to people, businesses and communities,” Mr Powell said. “This direct support can make a critical difference not just in helping families and businesses in a time of need, but also in limiting long-lasting damage to our economy.”

With the US in the grips of a @Businessdayng

wide-ranging debate over racial and economic inequality, Mr Powell stressed that the burden of the Covid-19 downturn had “not fallen equally on all Americans” and had a disproportionate impact on low-income households.

“If not contained and reversed, the downturn could further widen gaps in economic wellbeing that the long expansion had made some progress in closing,” he said.

The Fed chair also made a commitment to transparency in its own emergency lending programmes, amid pressure on both the Fed and Treasury from Democrats to be as clear as possible about which companies are benefiting from taxpayer support during the crisis. The Fed has said it would disclose names and terms of participants in its loan programmes on a monthly basis.

“We embrace our responsibility to the American people to be as transparent as possible, and we appreciate that the need for transparency is heightened when we are called upon to use our emergency powers,” Mr Powell said.

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FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Deferred pension payments spread alarm in $3.9tn muni bond market Widening funding gaps pose a threat to US states’ credit ratings, analysts say BILLY NAUMAN AND COLBY SMITH

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o n d i n v e s t o r s a re keeping a keen eye on widening public pension deficits in the US, where the coronavirus pandemic has piled pressure on states and cities already struggling to stay afloat.

New Jersey, which has one of the biggest gaps between its pension assets and what it is projected to pay retirees, at $62bn, announced in May that it would defer a $950m top-up payment by one month as it tries to fill a hole in its budget opened up by Covid-19.

Meanwhile, Illinois is in danger of falling further behind on efforts to close its own $140bn pension funding deficit, according to credit rating agency Fitch.

The state was the first to tap into a special Federal Reserve facility designed to alleviate effects of the economic shutdown.

In the midst of a global pandemic that has jeopardised the ability of municipalities to pay police, firefighters, teachers and medical workers, such considerations may not be front of mind for state treasurers. Voluntary pensions contributions might “seem like a bit of a luxury”, said Vikram Rai, head of municipal strategy at Citigroup.

But missed payments risk creating a funding crisis, strategists warn, that could come back to haunt these states and investors in their debt. Pension recipients would probably be treated as se-

A combination of extra expenses from coronavirus and a steep decline in revenues from tolls and taxes has increased the deficit for New Jersey and other US states © FT montage; Getty Images

nior to bondholders in the event of bankruptcy, according to analysts.

Some public pension plans are on pace to run out of money as soon as 2028.

Missed payments create a “double whammy” for states that are already struggling to keep up with their obligations, said Dan Barton, head of municipal research at Mellon Asset Management. “That’s a very bad situation to be in.”

One big problem with deferring pension payments is that they must be made up with interest, said Todd Kanaster, analyst at rating agency S&P Global. This is because these pension plans bake in an assumed rate of return from their investment portfolios into their projections — and those

earnings need to be made up, in addition to the original missed payment. These assumed rates of return typically sit somewhere around 7 and 8 per cent, so things can spiral out of control quickly when states start to skip payments, Mr Kanaster said.

Investors have penalised states with severely underfunded pensions. In early May, Illinois — the country’s lowest-rated state — put on pause a planned $1.2bn sale of short-term debt after investors demanded significant premiums to buy it. Around the same time, the state placed a $1bn debt auction on a so-called “day-to-day” status, meaning the timing of the sale depends on market conditions.

Illinois eventually sold $800m

worth of debt, including bonds that mature in 2045 at an elevated yield of 5.85 per cent — roughly three times the average yield on highly rated 30-year municipal bonds at the time. Kentucky, another state with a pension funding headache, has a 2045 bond trading at a 2.8 per cent yield, also a substantial premium to peers.

Illinois has not announced pension contribution cuts, but Fitch calls the state’s budget a “work in progress” and has warned that even before the pandemic politicians were not allocating enough money to close its funding gap.

Some in the sector say fears of a nationwide pension crisis are overblown. “I’ve argued with people that if they say there’s

a pension crisis that [means] there’s a commensurate mortgage crisis,” said Chris Ailman, chief investment officer of the $240bn California State Teachers’ Retirement System, the second largest pension fund in the US. “You’re acting as if everybody’s 30-year mortgage is due today.”

States and cities are not in danger of liquidation even if they go bankrupt, so it is not clear to some investors that they need to be prepared to pay out all of their pension benefits at once.

“From an investor’s perspective, I don’t know if any of us want the pensions to be 100 per cent funded today,” said Scott Diamond, co-head of municipal fixed income at Goldman Sachs Asset Management. “If a municipality had 80 per cent or even 70 per cent of its pension funded, that would be pretty good.”

Yet states such as New Jersey, Kentucky and Illinois are so deep in the hole that they have no choice but to keep pouring money into their funds. Laws in these and other states prohibit the government from slashing payouts to retirees. Analysts say it is important for investors to see that they have enough money on hand to meet their obligations.

“The path out of the problem is more money,” said Doug Offerman, analyst at Fitch, alluding to top-ups. The states that have managed to reduce their deficits have not done so with “high-profile financial engineering”, he said.

“They’ve done it with steady contributions a bit higher than what actuaries say is necessary.”

Global stocks climb on expectation of support for US economy Retail sales bounce, Fed interventions and news on Covid-19 drug combine to cheer investors BRYCE ELDER, HARRY DEMPSEY AND HUDSON LOCKETT

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all Street rallied on expectations of new aid for the US economy from the federal government and central bank, as retail sales came back more strongly than expected last month from their pandemic low.

The S&P 500 rose 1.8 per cent and the tech-heavy Nasdaq added 1.6 per cent by late morning on Tuesday.

It followed a strong performance in Europe, where markets had their first chance to respond to news late on Monday that the US Federal Reserve would start buying individual corporate bonds via its emergency lending programme.

London’s FTSE 100 ended the day 2.9 per cent higher and in Paris the CAC 40 benchmark climbed 3 per cent.

But stocks slipped back from their session highs after Beijing’s city government raised its

Covid-19 emergency response level and announced that schools would be shut from Wednesday.

China’s health authorities had reported 27 new coronavirus cases in Beijing at the end of Monday, accounting for the bulk of 40 new infections in the country.

A Bloomberg report stating that the US administration was preparing a $1tn infrastructure spending package to stimulate economic growth helped to fuel the upbeat mood in the markets, said Jim Reid, strategist at Deutsche Bank.

“The prospect of further stimulus was already known,” he said, “however the size and timing was more up in the air”.

We are committed to using our full range of tools to support the economy in this challenging time Jay Powell, Federal Reserve chairman Much of the spending would be earmarked for infrastructure such as roads and bridges but some would go towards improving America’s digital network through improved rural broadband and 5G www.businessday.ng

wireless infrastructure, Bloomberg reported. It remained unclear how the US administration would fund the measures — or its prospects of getting the plan through Congress.

Sentiment was helped by May data showing a record rebound in US retail sales and by research suggesting a cheap steroid can reduce deaths from coronavirus.

The optimistic news came a day after the US central bank expanded its intervention to prop up the economy and financial market.

The Fed said on Monday it would begin purchasing a “broad and diversified portfolio” of individual corporate bonds, having previously bought exchange traded funds that track corporate debt.

Corporate bond markets rallied after the Fed announcement.

Some investors and analysts had grown concerned the facility — first announced three months ago — would not be enacted, given that the volatility caused by the pandemic had subsided.

The Fed shifted its bond-buying plan to creating an index that

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abides by its eligibility criteria, instead of companies self-certifying that they were eligible. Analysts and investors had warned that the initial plan could have resulted in few companies signing up for the new facility because they would not want to signal that they were in distress.

“We view this largely as the Fed following through on their promise to start ETF and individual bond secondary market purchase,” noted Matthew Mish, an analyst at UBS. “A marginal positive for those that doubted the Fed would go ahead.”

Jay Powell, the Fed chairman, warned Congress on Tuesday of “significant uncertainty” surrounding the “timing and strength” of the US economic recovery, but said the central bank remained “committed to using our full range of tools to support the economy in this challenging time”.

In Europe, a top policymaker raised investors’ hopes of a further expansion in stimulus measures in the eurozone. Fabio Panetta, @Businessdayng

executive director of the European Central Bank, said in an interview with Le Monde newspaper that the central bank was ready to consider “if necessary” buying “fallen angel” bonds that had recently lost their investment-grade rating.

In the Asia-Pacific region, Japan’s Topix index rose more than 4 per cent, while Australia’s S&P/ ASX 200 gained 3.9 per cent and Hong Kong’s Hang Seng climbed 2.4 per cent.

In South Korea, equities trading was briefly suspended after Kospi 200 futures rose more than 5 per cent from the previous day’s close, triggering a short cool-down period. The index closed up 5.5 per cent.

Shares in Tokyo rose sharply after the Bank of Japan said it expected it would pump ¥110tn ($1tn) into the economy through various support programmes, up from a previous estimate of ¥75tn.

But traders in Japan’s capital played down the impact of the central bank’s move on equity markets.

Wednesday 17 June 2020

BUSINESS DAY

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cityfile Rotary Club of Eko Atlantic donates water 28 tanks to LASG ENDURANCE OKAFOR

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Bukar Talba, representing governor of Borno, distributes COVID-19 pandemic palliatives to residents of Chibok Local Government Area of Borno.

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EFCC recovers N304m from suspects in Edo, Ondo, Delta IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin

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enin zonal office of the Economic and Financial Crimes Commission (EFCC), said it has in the last one year recovered N303, 828,641 and $7000 from suspects in Edo, Delta and Ondo States.

Adamu Danmusa,

the head of the zone, at a press conference in Benin, said of the sums, a total of N274,507, 723 was returned to victims of the crime.

While noting that the zone received a total of 1246 petitions in Edo, Delta and Ondo States which is under its jurisdiction, he added that 788 of the petitions were found worthy and approved for investigations, while a total of 132 cases were transferred to the police and other

sister agencies.

He also disclosed that the zone secured 88 convictions, secured final forfeiture of a 4-bedroom bungalow at Ughelli and a petroleum filling station in Udu local government in Delta State.

“We also secured the final forfeiture of 14 exotic cars, 10 Laptops and 28 phones which were recovered from fraudsters’, he said.

He, however, urged members of the general public to be more vigilant and circumspect in order not to fall victims to misguided elements who are bent on reaping from where they did not sow.

“Any business or investment proposal that look very attractive with outlandish returns may be fraudster lurking around.

Be careful, be watchful,” he warned.

Abia declares Aba epicentre of coronavirus

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bia government has declared Aba, the state’s commercial hub, a red zone and epicentre of coronavirus following the number of positive samples emanating from the city.

Okeiyi Kalu, Abia State information commissioner, stated this while answering questions on Monday during a phone-in programme on COVID-19 update in the state.

Abia which recorded 15 new cases on Sunday, June 14, moved to the 16th position, with 166 confirmed infections, on the log of states with highest coronavirus cases in Nigeria. Out of this number only three persons were reportedly nursed back to health and released from isolation centre which Kalu said compounded Abia’s case

with very few spaces left for confirmed cases.

Kalu decried Aba residents’ non-challant attitude to the pandemic adding that they vehemently refused obeying governments’ directives on COVID-19 including wearing of face masks and observing of social/physical distancing. He said such attitude threw the city into a grave danger.

He also blamed churches and mosques for refusing to adhere to simple directives or telling adherents what was right to do.

The commissioner noted that report coming from Aba central mosque, on Hospital road, was worrisome.

He said that Abia interministerial committee on COVID-19 had directed www.businessday.ng

the Aba South local government transition committee chairman to directly enforce regulations at the mosque on Friday and during other prayer sessions.

Kalu further said that many health workers in Aba might have been infected with coronavirus as a result of attending to infected people without full protection.

“At the moment, Abia is having more samples than any other state in the south-east which is good, because unless we identify where this problem is coming from, we may not be able to deal with it.

“We’ve done our mapping by local government and one thing is clear, majority of the new cases are coming from the Aba area and it’s alarming.

“It looks like all the sensitisation, all the efforts made by the media, have not worked because Aba people continued to violate the regulations with regard to face masks wearing, and social distancing.

“The churches are part of the problem. It looks like Aba is a red location for COVID-19 infection and all hands should be on deck now to stop the spread there,” he said.

Kalu expressed regrets that people were busy endangering their lives and others instead of working together to stop the spread of the virus.

He said that the facts emanating from the level of infection of health workers in the city were disturbing hence the government’s unwillingness to unveil all the facts.

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he Rotary Club of Eko Atlantic has donated 28 water tanks to the Lagos State government to encourage handwashing across the 20 local government areas with the aim to contain the spread of COVID-19 also known as coronavirus President of the club, Sunit Deb Roy said the donation became necessary due to the increasing rate of the virus in Lagos.

According to him, this donation will encourage handwashing, which is one of the few known preventive measures against virus.

“We have seen that Lagos has a very high rate of COVID-19 infection, and the best thing that should be done in this situation is to wash our hands, maintain social

distancing and wear a mask,” said Roy while handing over the water tanks recently.

Conceived by the Rotary Club of Eko Atlantic, the Covid-19 water tanks project was, however, sponsored by two corporate companies- Geepee Tanks Nig. Ltd and Chellaram Nig. Ltd as they both donated 21 tanks( 500 litres each) and seven tanks (1000 litres each) respectively, with G O C Bada as the project leader.

Wale Ahmed, the Lagos commissioner for local government and community affairs, represented by Zhenfah Dosunmi, a director in the state, appreciated the Rotary Club of Eko Atlantic for supporting the fight against COVID-19.

“The most important protocol of fighting COVID-19 is hand-washing and so the tanks we have received from the club will go a long way in the fight,” Ahmed said.

Police place N5m bounty on Adamu Aliero-Yankuzo, Katsina bandit kingpin

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he police in Katsina have declared one Adamu AlieroYankuzo, Katsina bandits’ kingpin, wanted, and placed N5 million bounty on his head, dead or alive.

Aliero-Yankuzo, aged 45, is believed to be leading bandits operations that led to many deaths in Katsina and Zamfara States.

The Commissioner of Police, Sanusi Buba, made this known on Monday in Katsina, saying “the command hereby declare Adamu Aliero, 45, of Yankuzo village of Tsafe local government area of Zamfara State wanted.

“Aliero, is a notorious leader of groups of bandits terrorising Katsina and Zamfara States. Similarly, the command has placed bounty of N5 million on his head, dead or alive.

“Any person or group of persons that have useful information that may lead to his arrest, should please report to the nearest police station or call these numbers: 08033666059 or 08035448128 or 08076666207,” he said.

Buba revealed that the command had carried out various sting operations after the Kadisau village attack, where over 20 people were killed by bandits.

Uzodimma inaugurates Imo policing, advisory committee SABY ELEMBA, Owerri

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overnor of Imo State, Hope Uzodimma has inaugurated the Imo State Community Policing/ Advisory Committee with a charge to members to ensure they work hard to fish out criminals in Imo communities and villages.

The governor at the event which held at Government House, Owerri, informed that the Federal Government has approved of such inauguration all over the country.

According to him, Uzodima, the committee is aimed at ensuring peaceful co-existence of indigenes and nonindigenes, ethnic groups and tribes in Imo communities.

The governor informed that the community polic-

@Businessdayng

ing was not an alternative to the Nigerian security agencies like the police or army, rather the outfit would partner with them to ensure that the communities were properly secured.

He added that the committee would work to ensure that people live together in harmony as well as smoke out all criminals, reduce acrimonies among Nigerians and ensure peaceful co-existence.

“They should work hard to identify all social vices and deal with them according to the law”, he said.

He charged the Commissioner of Police, Imo State, to work out modalities towards the creation of the zonal, local government and community prototype of the committee, promising to give them all necessary assistance to succeed.

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BUSINESS DAY Wednesday 17 June 2020 www.businessday.ng

A warning from South Korea: The ‘fantasy’ of returning to normal life Vigilance and nimbleness over coronavirus outbreaks are critical in restarting economies Song Jung-a and Kang Buseong in Seoul and Edward White

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y the time eight-yearold Lee Ji-ho is bundled out the door for his one day a week of in-class schooling, his mother has already completed an online form detailing his temperature, any signs of a cough or other respiratory complaints, and whether any family members have recently arrived home from overseas or are in quarantine.

Once at school in Seoul’s Seocho district, he sits metres apart from classmates and is instructed not to talk to friends — not even during lunch, where instead he eats in solitude, separated from the other children by a plastic divider.

The rigour faced by the young Ji-ho and his parents is just one example of an ever-expanding series of guidelines, rules and regulations imposed on a country of 52m by health officials desperately trying to avoid fresh waves of coronavirus.

It is more than three months since South Korea’s coronavirus infection rate peaked. In that time political leaders and health experts around the world have credited the government of President Moon Jae-in for teaching important lessons in the swift deployment of mass testing and aggressive contact tracing to counter what was for a time the worst Covid-19 outbreak outside of China.

Yet Seoul’s continued difficulty in controlling new outbreaks demonstrates that governments need a persistent state of vigilance and a willingness to change tack as they attempt to reopen their societies — a state of affairs that many people could find every bit as difficult as the lockdown itself.

South Korea has recorded just over 12,000 infections and fewer than 280 deaths while avoiding a national lockdown. Yet despite its relative success in reducing the spread of the virus, there have been an increasing number of outbreaks in recent months flaring up at churches, call centres, nightclubs, conference halls, logistics centres and even a Zumba dance studio.

“Coronavirus is constantly attacking society’s vulnerable classes and spaces,” says Park Won-soon, the mayor of Seoul.

“We must shake off the fantasy that we can go back to the past we were accustomed to.”

The stark warning comes as governments from Madrid to Washington and London move beyond the initial public health crises and seek to plot a path out of crippling lockdowns — periods which have already sparked mass unemployment and sent large

swaths of the global economy tumbling towards a deep recession.

This attempt to revive trade and commerce inevitably involves allowing much greater human interaction. Some experts are concerned that health systems remain vulnerable to being overwhelmed by the disease, especially in densely populated metropolises such as London and New York.

In the latest demonstration of the continuing risks, China, which has seen some of the most stringent virus control measures, is now facing its most serious upsurge in infections in months, with half of Beijing’s districts reporting new coronavirus cases on Monday.

Ben Cowling, a professor in epidemiology at Hong Kong University, says South Korea’s experience reflects that “governments are going to need to stay nimble” for the foreseeable future.

“As the numbers [of infections] go back up again, we know that early action in terms of bringing back social distancing is particularly effective, but [governments] are going to be reluctant to act so soon after relaxing measures,” he says. “Then, we are going to get into a cycle of needing more aggressive measures when case

numbers get even higher.”

Learning to adapt South Korea has been trying to avoid that cycle. Its daily infection rate hit a two-month high in late May, according to official data, a blow for the government that had just celebrated zero new local infections for several days a month earlier.

With most outbreaks occurring in Seoul, a sprawling city of 10m people, the emergence of these clusters spooked health and economic planners. Officials acknowledged that mistakes had been made — too many people had been allowed back into crowded spaces unchecked, and too early.

City officials have subsequently executed a series of Uturns and toughened controls.

The return of school students to physical classrooms full-time has again been delayed. Nightclubs and bars — which had initially remained open — have been closed and access to public spaces such as museums, parks, conference halls and indoor sports facilities is restricted.

For the past two weeks the country’s daily infection rate has fluctuated between about 25 and 80. Seoul plans to keep its measures in place until the city again sees new infections fall

‘‘

As the numbers [of infections] go back up again, we know that early action in terms of bringing back social distancing is particularly effective, but [governments] are going to be reluctant to act so soon after relaxing measures

into single digits. On the national level controls have also been strengthened, with the wearing of masks now mandatory in public transport and taxis. From last Wednesday, anyone entering one of about 80,000 bars, restaurants, nightclubs and other entertainment venues across the country has to register via a QR code, making it easier for officials to trace any large-scale outbreaks.

The rules were tightened despite huge pressure to fully open an economy suffering its steepest job losses since the aftermath of the 1997 Asian financial crisis.

Gross domestic product is forecast to shrink 0.2 per cent this year, according to the country’s central bank, but the tougher controls underscore the priority given to public health.

Conceding that there have been setbacks, Seoul’s mayor believes the city is demonstrating to the world that economic reopening can only be achieved alongside stringent prevention and containment measures, as well as the humility to pivot, backtrack and admit mistakes.

“People can’t live alone at home forever . . . If we abide by strict disinfection and quarantine rules, check temperatures and wear masks, these [flare ups] are not likely to lead to massive outbreaks,” says Mr Park.

At Geumho-dong, just north of the Han river that slices across Seoul, staff from the Royal Singing Room, home to several floors of the country’s ubiquitous karaoke rooms, known as noraebang, disinfect each room between customers — microphones included.

Nearby, at Vogue 2, a basement-level computer gaming parlour, customers’ temperatures are checked on entrance and they are required to wear a mask.

In the same neighbourhood, at Matdakko, a no-frills restaurant serving Korean staples of fried chicken and draught beer, em-

ployees regularly give similar treatment to every table, chair and door knob. Doors are kept open to increase air circulation, despite the stifling summer heat.

Spiritual life, too, has adjusted.

In a country where more than half the population identify as religious, places of worship pose a key threat, exposing often elderly congregations more vulnerable to illness. At Palbok Presbyterian Church, in a quiet residential area of Incheon, a port city on Seoul’s outskirts, worshippers must register electronically before donning latex gloves and surgical masks to enter and quietly sit on the white spots marked out on the church’s wooden pews. The services have been cut from daily to twice a week.

Son Young-rae, a health ministry spokesperson, says it has become clear that the “only viable option” to enable economic activity to return while the virus persists is to “harmonise our daily lives with containment efforts”.

“People’s co-operation is essential for successful containment,” he says. “It is very important that citizens, businesses and institutions follow the rules.”

Contingency plans When health officials were dispatched to Daegu, the country’s fourth-biggest city, in late February in a desperate bid to track down members of the Shincheonji Church of Jesus who had been exposed to the virus, it took about two weeks to find and test 9,000 followers of the quasi-Christian sect — at the time the feat was impressive by international standards.

By late May, when workers fell ill at a logistics centre belonging to the country’s biggest ecommerce company, Coupang, a team of investigators, part of a Korean Centers for Disease Control and Prevention “rapid response” unit, were able to identify and test 5,000 people within three days.

The episode illustrates just how far the organisation has progressed in the speed and accuracy of its “trace and test” methods since the start of the outbreak.

It is part of a broader series of improvements made across the bureaucracy, which has underpinned officials’ confidence in keeping most businesses and institutions open.

“In the case of the first patient in the Shincheonji cluster, it took about five to six days to find out her exact itinerary. But now we can get basic data in just 10 to 20 minutes,” says Mr Son, at the health ministry. “If we need to find out the itinerary of about 40 people who came into contact with a patient, we can do it within a day. It makes a big difference if you can do it within a day or a week. The slower the process is, the more people get infected.”

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