BusinessDay 17 Mar 2020

Explosion: Resources to manage disaster beyond Lagos - Sanwo-Olu JOSHUA BASSEY

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ithout directly inviting the Federal Government to wade in, the Lagos State government says the

... sets up N2bn relief fund, investigative panel as death toll rises to 20 resources required to resettle victims and manage the scale of disaster triggered by Sunday’s

explosion at Abule Ado are beyond one government.

Sanwo-Olu was at the explo-

sion scene early Monday morning where he also announced a N2-billion relief fund and a

donation of N250 million to imContinues on page 38

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news you can trust I ** tuesDAY 17 march 2020 I vol. 19, no 521 Onyinye Nwachukwu, Abuja

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i g e r i a’s c e nt ra l bank Monday unveiled a six-point response to the impact of the Coronavirus outbreak as apex banks around the world mounted concerted efforts to keep the global economy healthy.

Some of the new policy thrusts of the CBN include granting all commercial lenders leave to consider temporary and timelimited restructuring of the tenor and loan terms for businesses and households most affected by the outbreak of Covid-19, particularly in the oil and gas, agriculture, and manufacturing sectors.

The CBN said it would work closely with the banks to ensure that the use of forbearance is “tar-

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Global central banks step up battle against virus CBN to provide liquidity, unveil N50bn facility US Fed slashes rates to near zero, to buy $700bn in bonds

geted, transparent and temporary, whilst maintaining individual deposit money banks or DMB’s financial strength and overall financial

Continues on page 38

Inside

Nigerian crude settles below cost of production P. 2 Lagos gas explosion revives concerns about weak LPG retail business regulation P. 2

Jim Ovia (m), chairman, Zenith Bank plc, flanked by Ebenezer Onyeagwu (l), group managing director/ CEO, and Adaora Umeoji, deputy managing director, at the 29th Annual General Meeting of the bank held at the Shehu Musa Yaradua Centre, Abuja.

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Tuesday 17 March 2020

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news Nigerian crude settles below cost of production

… drops below $30 first time since 2016 DIPO OLADEHINDE

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he price of Brent crude, the benchmark of Nigeria’s major export grade, dropped below its cost of production, settling at $30 on Monday, bringing ugly resonances of the economic downturn of 2016.

Nigeria has one of the highest crude production costs among Organisation of Petroleum Exporting Countries (OPEC), which falls within the range of $27 to $30, depending on whether the field is offshore on onshore.

International Brent crude fell 10.9 percent, or $3.71, to trade at $29.13 per barrel, its lowest level since at least February 2016.

“Unlike 2016, there is no alliance anywhere. Nigeria is currently producing oil at a loss due to its relative higher production cost,” Daniel Akin-

boye, an oil trader reacting to the outcome of the oil price said.

“The refineries are docile; the country is so reliant on oil precisely because its leaders have paid lip service towards diversification,” Akinboye said.

Mele Kyari, group managing director, Nigerian National Petroleum Corporation (NNPC), said last week that the average cost of production for a barrel of crude for Nigeria was $30, saying, “If crude oil goes to $30-$32, you are already out of business.

“That therefore depresses the possibility of coming out of the impact of the coronavirus for a long time to come, at least 3 months.”

Nigeria also has about 35 unsold April-loading cargoes due to a drop in demand, according to traders with NNPC putting the total number at around 50. “There is a strong

supply of competing crude, plus dwindling storage options,” a trader said.

The oil price war is expected to intensify in coming weeks as Saudi Arabia prepares to unleash as much as an extra 2.6 million bpd on the market in April, the United Arab Emirates (UAE) is ready to add another 1 million bpd, and Russia promises to boost production.

London-based global information provider, IHS Markit said the oil market is heading for the largest-ever crude glut in the first half of 2020, which could be two to nearly four times bigger than the biggest surplus recorded so far.

According to an IHS Markit note released on Monday, the glut in H1 2020 could reach between 800 million barrels and a staggering 1.3 billion barrels, more than two and up to nearly four times larger

than the previous biggest glut of 360 million barrels in late 2015-early 2016.

“The last time that there was a global surplus of this magnitude was never,” Jim Burkhard, vice president and head of oil markets at IHS Markit said. “Prior to this the largest six-month global surplus this century was 360 million barrels. This will be twice that or more.”

IHS Markit noted that “what is coming could be a glut on a monthly basis of between 4 million bpd and 10 million bpd between February and May.” “Oil demand in the next two months could be down by as much as 10 million bpd,” the analytics and consultancy firm said.

Jeremy Batstone-Carr, chief economist at Charles Stanley, warns that further

Continues on page 38

ANALYSIS

Biggest banks earned N824.28bn from T-bills in 2019 BALA AUGIE

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igeria’s largest banks realised N824.28 billion from interest income from government securities in 2019, which may be tougher to replicate this year.

The amount raked by them in 2019 represents 11.43 percent increase from N739.32 billion they made in 2018, according to data gathered by BusinessDay. A breakdown of the figures shows the tier 1 lenders, who have good asset quality and cash to play in the market, raked in more money in government securities as they earned N745.15 billion, which represents 90.13 percent of the total figure.

However, there was a 51.01 percent increase in income from investment in government securities by banks in 2017, when yields hovered between 22 percent and 18 percent as steep inflation, a lack of foreign exchange and high levels of unpaid loans weighed on banks risk appetite.

“The money they made was when interest rates were high in the second quarter (Q2), and before the stringent rules started in September,” according to Yinka Ademuwagun, research analyst at

United Capital Research.

“The question is where interest income will be at the end of the year amid the current global and local macroeconomic uncertainties,” Ademuwagun says.

If the current reality of coronavirus that is raving global economy is sustained through the year, then central bank will have to relax its stringent policies so as to encourage local investors like financial institutions to partake in the fixed income market, Ademuwagun states.

Analysts say Nigerian banks are caught in a conundrum as a string of regulations that started last year will continue to make it practically difficult for them to deliver sustainable earnings growth.

The central bank raised the cash reserve requirement for lenders to 27.50 percent of total deposits, from 22.50 percent, to curtail excess liquidity in the industry, but analysts are of the view that the move is an aggressive way of tightening liquidity.

In October last year, policy makers barred individuals and non-banking firms like pension funds from buying high-yield short-term government bond, which pushed down T-bill rates sharply.

“We conclude that the

Continues on page 38

Only 30% of constituency projects funds released in 2019 – Reps James Kwen, Abuja

H L-R: Aisha Ahmad, deputy governor, financial system stability, Central Bank of Nigeria (CBN); Godwin Emefiele, governor; Edward Adamu, deputy governor, corporate services, and Folashodun Shonubi, deputy governor, monetary policy, during the media briefing on Covid-19 (Coronavirus) and Economy, at the CBN headquarters in Abuja, yesterday. Pic by Tunde Adeniyi

Lagos gas explosion revives concerns about weak LPG retail business regulation ISAAC ANYAOGU

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igeria’s quest to replace dirty fuels with Liquefied Petroleum Gas (LPG) may be a success story having grown over a thousand percent within the last 10 years.

But the inability to properly regulate the retail aspect poses a grave and growing danger.

The recent explosion at Abule Ado, a Lagos suburb, according to Ibrahim Farinloye, spokesman for the National Emergency Management Agency (NEMA), was triggered when a truck hit some gas canisters stacked up in a gas processing plant near a pipeline in Abule-Ado area of Lagos.

The explosion, which led

to over 17 deaths, injury to hundreds of others, destruction of over 100 houses, rendering thousands homeless and the burning of many vehicles, revives concerns about lax regulation that has seen hundreds of LPG retail shops springing up on street corners against extant rules.

The Department of Petroleum Resources (DPR), a government agency that regulates the oil and gas sector, last year said it would ramp up enforcement in the sector.

In September, Muinat Bello-Zagi, controller of operations, DPR, during a meeting with Cooking Gas Skid Proprietors Association of Nigeria, Ogun State chapter in Abeokuta, warned illegal cooking gas skid operators to www.businessday.ng

either regularise their operations or risk being shut down and prosecuted.

But few months later, it released new rules requiring entrepreneurs applying for an LPG licence to include land titles as part of their applications.

Some operators said buying two plots of land to set up an average LPG capacity of 20 metric tons could cost over N60 million in many parts of Lagos, and would triple their business cost in addition to carrying out environmental study that could cost above N2 million.

Operators, who had hitherto run their businesses from inside petrol stations exploiting a loophole in the rules that allowed an LPG plant in a petrol station as add-on facility for auto-gas vehicles, were

ordered out of petrol stations.

Some operators questioned the motives of these rules, which did nothing to check the rampant opening of LPG skids in city slums.

As the fires simmer at Abule-Ado, recall that a similar explosion occurred on January 4 at Sabon Tasha area of Kaduna metropolis, which led to the deaths of many people.

The DPR, following an investigation, found that the explosion was caused by illegal decanting (transfer) of LPG into another cylinder.

Paul Osu, DPR head of publicrelations,saidthedepartment would continue to monitor and sensitise members of the public on the safe handling of petroleum products to prevent the occurrence of such incidences.

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ouse of Representatives Committee on Constituency Outreach on Monday disclosed that only 30 percent of the budgetary allocation to constituency projects was released in the 2019 financial year.

Bello Kaoje, chairman, House Committee on Constituency Outreach who disclosed this while briefing journalists on the outcome of the Committee’s recent retreat in Owerri, called on the executive arm to ensure adequate release of constituency projects funds for effective execution and implementation.

Kaoje said at the end of the retreat that the Committee resolved to utilise its powers and mandate to ensure proper education and improve citizens understanding of constituency projects and effective ways of engaging lawmakers on constituency project implementation, as this would build public trust and promote democratic accountability.

According to Kaoje, the Committee also resolved: “To ensure proper implementation and release of funds for members’ constituency projects in line with the demands of their constituents. @Businessdayng

The committee also commits to providing an updated database of constituency projects as allocated in the Appropriation Act annually for ease of monitoring and assessment of constituency projects.

“To deploy its oversight powers to ensure that members set up functional constituency offices as statutorily required.

This will enable effective communication between constituents and their representatives and deepen legislative accountability. The Committee is committed to promoting regular engagement between constituents and their representatives to promote inclusive governance.”

The chairman added that the retreat among others highlighted the mandate of the Committee to include: “Ensuring the maintenance of constituency offices by members; liaising with appropriate Ministries, Departments and Agencies’ (MDAs) responsible for the coordination of constituency development projects; monitoring and supervising constituency projects, and reporting to the House; and annual budget estimates.

“Discussions focused on oversight, constituency projects for inclusive governance, constituency engagement and democratic accountability in Nigeria”.

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Proposed bill on generator ban: Will there be light at the end of the tunnel?

STRATEGY & POLICY

MA JOHNSON “We will make electricity so cheap only the rich will burn candles” – Thomas Edison, 1879 lmost 140 years after the above remarks from Thomas Alva Edison was delivered, his dream has become a reality in most parts of the world – but not all of it. Nigeria is one of the countries where electricity is not cheap, and the rich do not burn candles - they burn liquified natural gas and crude oil. In order to provide electricity for almost 200 million people, the federal government has spent billions of dollars, and it is still spending by the grace of God, on power project in Nigeria. Unfortunately, the power supply situation in the country has not improved. What a pity?

Data released by the International Energy Agency (IEA) towards the end of 2018, show that the number of people worldwide without electricity has fallen below one billion for the first time in modern history. Most of the improvements, according to The Economist edition of 20 November 2018, comes from India where 400 million people have gained access to electricity since the year 2000.

Although, some 22 million household are still in the dark in India, according to an NGO, “investment in India has so far focused on large-scale, grid – connected wind and solar projects.” The report further shows that the country will need to incorporate off-grid methods as well, which currently makes up only 2 percent of investment, if it is to achieve its goal of

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universal 24- hour electricity by 2022. In the case of China, the country is reported to have taken up to 20 years to provide electricity to the remaining 10 percent of its population without power.

In Nigeria, consumption rate has been more than electricity generating capacity in the country for more than four decades. This resulted in the privatisation of the power sector to improve its efficiency. With privatisation, the Power Holding Company of Nigeria (PHCN) ceased to exist, and Nigerian Electricity Regulatory Commission (NERC) was born.

The privatisation of the country’s power sector with all intent and purpose is to enable enough electricity supply for Africa’s largest economy. But privatisation of the power sector has not helped matters. Why? The country has lost more Mega Watts (MW) in the post privatisation era due to corruption, vandalization of gas pipelines and other acts of restiveness in resource-bearing communities among other social challenges.

Today, Nigeria’s power sector remains in shambles because 3000MW is what is technically available to consumers of electricity. But this is too small to cater to the electricity demands of a country of about 200 million people aspiring to industrialise.

Consequently, power failure has been a fact of life in Nigeria as most households, companies and government offices now operate their own electric generating plants with attendant implications for costs and disruption of production. This terrible situation in a country with abundant gas and oil reserves is tragic.

The latest news trending is that the Senate of the National Assembly (NASS) through a bill is proposing 10 years jail term for generator importers and sellers in Nigeria. The proposed bill has passed the first reading in the Senate. Is the proposed bill being pushed because of frailty of institutional memory? The lawmakers in the Red Chamber of the NASS must be reminded that one of the

reasons why privatisation of the power sector fails to deliver is attributed to acts of sabotage and corruption by some “powerful people” benefitting from the importation and use of generators.

If the proposed bill sailed through the NASS, it would certainly open a can of worms in the power sector. This is because as those in authority are trying to solve some of the problems of epileptic power supply, the proposal to ban the importation and use of generators will complicate issues and create more troubles. On the positive side, fuel consumption will go down and there will be reduction in noise pollution. There will be savings in forex. But almost all manufacturing companies may close shop. The public and private sectors will be affected negatively. Unemployment figures will rise astronomically etcetera.

It is good to have a clean environment that is void of any form of pollution and its effect. The ban of generator in the country without first, instilling the culture of good governance and provision of alternative sources of energy will further exacerbate instability and uncertainty in Nigeria’s power sector.

Despite privatisation, the federal government (FG), has reportedly spent trillions of Naira on the power sector and it is still contemplating borrowing billions of dollars in addition. Experts have expressed their disappointment over the situation in the country’s power sector. If one peeps at the faulty sale of distribution companies (Discos), the FG bailout, huge debts that have affected the financial outlook of a few banks, and weekly political statements that has created confusion in the power sector, you are tempted to ask: Will there be power at the end of the tunnel?

There are so many activities happening concurrently in the power sector.

There is a committee chaired by the Kaduna State Governor, Nasir El-Rufai, to review government’s 40 percent stake in the in the Discos amid speculation on cancellation of licenses or sale of the same Discos to Siemens. There are

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Privatisation of the power sector has not helped matters. Why? The country has lost more Mega Watts (MW) in the post privatisation era due to corruption, vandalization of gas pipelines and other acts of restiveness in resourcebearing communities among other social challenges

accusations and counteraccusations between the government and Discos.

For instance, there are reports that the Minister of Power, Saleh Mamman, expressed regret that even when the Discos receive 3000 MW, they short-change the system by paying for only 1000 MW, adding that the FG could no longer continue to subsidize their inefficiency.

Before signing the proposed bill into law, one would have expected those in government to tap into every available opportunity to increase power generation by encouraging the siting of power generation plants by private individuals and firms. In the short term, there should be a strong regulatory intervention from NERC that will make Discos to step up their performance. If Discos are unable to improve their performance, they should please, step aside. The entire arrangement should be decentralized with mini grids at local, state and federal levels.

If there was going to be light at the end of the tunnel, off- grid is the way to go. Off-grid electricity would generate a reasonable quantum of electricity for Nigeria. The FG must, therefore, allow as many companies as possible come into the electricity generation net in Nigeria.

If not, the country will be oscillating from darkness to darkness for many more years to come.

Advanced countries provide electricity which would meet their social and economic needs because they do not neglect opportunities for generation.

If the legislative and executive arms of government place a ban on the importation and use of generators, it will not automatically make electricity available in the country. Those in authority should remember that no single factor is responsible for underdevelopment, and no single policy or strategy can set in motion the complex process of economic development. Thank you!

Johnson is an author and a retired naval engineer who has passion for African development and good governance

Coronavirus: Combating the pandemic through effective behaviour-change communication

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very major health disaster or pandemic such as the case of coronavirus COVID-19 often has the potential to trigger fear and cause anxiety which can bring about behaviours that may increase the inherent risk, thereby exposing more people to the danger of being contaminated, and by that, increase the spread, instead of containing it. People would likely contract diseases when they act out of fear emanating from wrong or inadequate information more than they would if they stayed well-informed and prepared.

Effective communication is essential during major health crises the goal of which is to model the right or expected behaviour and more importantly communicate such behaviour in a manner that would be easy and quick to imitate and replicate. Effective communication in health crises should seek to debunk rumours, myths and religion-induced and mostly unscientific views that are most likely to cause people to throw caution to the wind with the risk of further spread.

Ensuring the right attitudes and beliefs are fundamental to addressing the fears and negative behaviours towards any health crisis. When people are well-informed, they would take the right action voluntarily to avoid the spread of negative health conditions. In the same manner, they will have a very positive expectations that, by maintaining the right behaviours and by following laid down preventive procedures, there are high chances of avoiding the negative health conditions such as coronavirus and, more importantly, pass on their learned expe-

riences, with the positive behaviour, to their circle of influence such as friends, family and business partners.

On the issue of coronavirus pandemic, there is already an uncountable number of media report which focuses on just informing the public about the extent of the spread of the virus, much to the extent of further creating anxiety and more panic instead of seeking to provide an answer to how the spread can be curtailed or prevented. These mass media report, at the moment, provide multi-angled analysis on the dimension of this health crisis and the expected consequences on the economy, on social relations and globalisation. Most of these media reports also seek to magnify and mystify the problem without necessarily speaking to possible solutions.

It is important to note that certain risky health behaviours, according to reliable sources and reports brought about the existence of the coronavirus. This was equally made worse by the decision of those who gained early wind about the outbreak, and the very poorly conceived decision to conceal or hide information regarding the existence of the virus. Early warning signals would have provided enough space for proper control and prevention or containment of the virus – again, it underscores the failure or poor management of information or perhaps the lack of appreciation of the role of communication in managing the healthrelated crisis.

So far, Nigeria has only recorded two reported cases, which have been adequately www.businessday.ng

managed. However, it remains a source of important attention for the healthcare system to be prepared and ready, ensuring that in the case of an unexpected or the unforeseen outbreak, the necessary measure would be taken to arrest the situation.

Because of the nature of the disease and its mode of transmission, it is not unlikely that there are cases that are yet not detected and these can surface at the most unexpected time.

Effective communication thus becomes a vital tool in preparing and towards ending the pandemic.

Whether at the national, state and local government levels or in the corporate world, it is important to have a well-designed health communication plan and a behaviour-change policy or strategy that should be an integral part of national health communication policy, organisational policy, pre and post any epidemic or pandemic, as in the case of coronavirus.

While at the national level, there appears to be a regular update and briefing on the steps taken to combat coronavirus, not much is heard of at the state level, except in Lagos, and especially at local government levels, as it concerns concerted efforts to control the spread of the disease, bearing in mind that there is a shortage of primary health facilities in most rural areas in Nigeria. In the same vein, it is not likely there is any well-thought-out and properly designed communication action plan addressing the information needs of the less educated rural residents who are not, in any way, insulated from the raging pandemic.

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VICTOR IKEM More still needs to be done in Nigeria in the area of designing appropriate behaviour change communication and effective messaging, and using the right language and channels to address this health crisis, and in promoting the right behaviours to dampen the possible risk associated with the wide and rapid spread of the virus.

Such behaviours as regular hand washing, keeping safe distances, avoiding large gatherings, ensuring proper hygiene at home and in public places as well as other helpful behaviours should be taught and encouraged, using every possible medium and language to demonstrate, and integrate such important behaviours, and mainstreaming same into the lifestyle of people, using the right channels, language and instruments to achieve the necessary results.

It is often said that old habits die hard, but effective communication can lead to a fast and easy change of behaviour.

Ikem is a communication expert and executive officer at Conversation Media Ltd

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Good economics for African times (1) Rafiq Raji

“Be vigilant, resist the seduction of the ‘obvious,’ be skeptical of promised miracles, question the evidence, be patient with complexity and honest about what we know and what we can know” (Banerjee & Duflo, 2019). he field of economics would probably provide better answers to the world’s many puzzles if the above statement by Abhijit Banerjee and Esther Duflo – MIT economics professors, couple and Nobel laureates, highly distinguished and controversial in almost equal measure – in their 2019 book “Good Economics for Hard Times: Better

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Answers to Our Biggest Problems” is imbibed by all of its academics and practitioners. Alas, this is not always the case.

Like you probably discerned already, Banerjee & Duflo’s approach to economics is unorthodox and – quite understandably – tends to rub off on some of their still mostly conservative contemporaries the wrong way. That they are mavericks is what appeals to me. That, and the likelihood that their success would embolden many more in the profession who remain shackled by orthodoxy.

What they espouse – vigilance, scepticism, patience, and honesty – does not come easily to fellow economists. Ordinarily, they should. But they do not. Because if they did, we should have more answers than doubts about the many questions that remain unanswered in the affairs of men.

“Economics is too important to be left to economists” Many an e conomist w ould swear by his or her rigour, objective scepticism, transparenc y and openness to new ideas. The evidence suggests otherwise. If you want to know how entrenched the mainstream types are, observe their reactions when some littleknown colleague proposes something very “brave” or “courageous”.

Of course, the same novel idea could very well find acceptance if a more accomplished type pro-

poses it; usually with a few tweaks here and there and a new fancy name. The more recent case of Modern Monetary Theory (MMT), the backlash it has received from mainstream economists, and the increasing likelihood it may become “orthodox” in due course, is a good example.

Banerjee & Duflo (2019) highlight how economists are not as trusted as they once were; ranked almost the same as politicians in a poll conducted by YouGov in the United Kingdom, for instance.

Why is this the case? Economists have not been “modest and honest about what [they] know and understand” and have not shown a willingness to try new ideas and solutions and be wrong.

Economists’ predictions have been wrong most times than they have been right. But we continue to make forecasts anyway. (They are useful in other ways.) And continue to be wrong most of the time.

For example, we know now for sure that markets are not efficient and that humans do not always behave rationally. And yet these are key pillars upon which much of conventional economics rest on. There is certainly a realisation in the profession of a need for a radical rethink of our ways.

Change is slow and difficult, however. This is understandable.

After all, it would be irrational for people who built their stellar ca-

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Self-preservation is rational, not correcting errors is not. The clearly rational irrationality of some mainstream economists in holding on to proven fallacious orthodoxies, as if they need them to breathe, is evidence enough that what is currently accepted knowledge should be queried

reers on these fallacies over many decades to simply just do a turnaround, wouldn’t it? Still, by digging their heels in on these proven untruths, economists prove the point of human beings not being always rational. Yes, behavioural economics now blossoms. But it took a while.

Self-preservation is rational, not correcting errors is not. The clearly rational irrationality of some mainstream economists in holding on to proven fallacious orthodoxies, as if they need them to breathe, is evidence enough that what is currently accepted knowledge should be queried. And this should apply to all intelligent endeavours. In other words, learn the orthodoxy, but do not accept it as gospel. It is not religion.

Banerjee & Duflo are exemplars of this ethos. Their 2019 book does not purport to have all the answers as much as it suggests a more sceptical and open approach to unravelling the still many mysteries in the so-called dismal science and the world at large. Is free trade always a positive? Is there a formula for growth? The duo did not provide straight answers to these and other pertinent questions. That is all very well. Africa must find its own answers.

“Dr Raji is chief economist at Macroafricaintel.

He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

Africa’s borders are artificial, showing up in the failure of Buhari’s border closure

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hen the Europeans colonised Africa, they cared only about one thing, profit. Whether it was gold from Guinea, rubber from the Congo or diamonds from South Africa, the goal was to extract resources from the hinterlands and send them back home through the continent’s long coastline. This led to the drawing of African borders in an unnatural pattern.

There is a theory in geopolitics that holds that the most stable, natural countries, are formed along longitudes, not latitudes, and the reason is climate.

Before technology changed the way that people worked and lived, moving within the same lines of longitudes made sense.

The climate was broadly the same, so the adjustment was easier. This aided the formation of states along those similar climatic zones, and this applied in Africa as well. The great empires of the ancient world (including those on the continent) tended to follow these zones. The Roman Empire was largely one built around the Mediterranean climate, the Islamic Caliphate was largely a desert empire, the Mongol Empire was strongest on the steps of Central and East Asia. Even in Africa, the great empires of Mali, Shongai, Sokoto and Benin, as examples, did not have major climatic variations within their borders.

The borders that the Europeans drew in Africa discarded this natural law and ran along latitudes, simply because they were designed for extraction, not for development. This resulted in cohesive nations

such as the Masai of East Africa, being divided between British Kenya and German East Africa, an area which later became known as Tanzania. The bigger the nation was, the more divided it often became, so the Yoruba nation today, straddles English Nigeria, French West Africa (Benin) and German Togoland (now French Togo). Directly north of the Yoruba is the Hausa (or Fulani) nation, which was divided in half between English Nigeria and Ghana, and French West Africa. This is not to mention smaller nations that were split. A colleague of mine from today’s Akwa Ibom has cousins in South-West Cameroon, which is today rebelling against the government in Yaounde. Imagine someone coming into pre-EU Europe and creating a country that is half of Spain, half of France and throws in a bit of Belgium and the Netherlands.

That is a simplified version of what Nigeria and most other African countries are.

In the worst cases, these borders created a mess of civil wars within many African countries as the people try to better align their countries to their nations. Following artificial border designs, African communities have not moved freely in their daily activities and nomadic practices, which has inflicted economic hardship and social inconvenience. The mass reordering of the lifestyle and structural systems of African communities that colonialism brought negatively affected traditional life, administrative structures, and economic well-being. This deprived African borderland communities of economic opportu-

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nity by hindering their movements, and forcing them to live differently than their traditional life. For example, many African ethnic groups are pastoralist and nomadic people that need vast land for grazing and water. However, artificial borders limited borderland people to herding on limited land and forced them into resource competition and confrontation due to limited mobility with other borderland peoples.

These problems, often expressed in resource conflict and elaborate smuggling operations, still exist as reminders of just how impactful lines on a map can be. Or cannot be.

Nigeria’s borders have, officially at least, been closed since August 2019. But increasingly, the evidence is showing that the border closure is, in reality, an annoyance for formal businesses and people in the headline border crossings where the Nigerian state can muster total control of the levers of coercion such as Seme and Idiroko. In other places such as Jibiya, Dorofi and Ekok, it is (almost) business as usual, and goods and people are still moving through. The ancient nations are still very much alive, while the artificial countries are suffering from internal stress through sticking incompatible peoples with each other.

That basic human instinct to make a living and provide for themselves and their loved ones is alive and well. A 2019 Brookings study showed that the informal sector throughout West Africa represents approximately 50 percent of GDP (70

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CHETA NWANZE

percent in Benin, in fact) and 90 percent of employment. A significant proportion of that regional trade is Nigeria-bound.

While policymakers in Abuja crow about the success of the border closure (which is hard to measure), it is worth noting that Benin’s dependence on Nigeria is not apparent from official trade statistics, as the country’s reported trade with Nigeria accounted for only 6 percent of Benin’s exports and 2 percent of Benin’s imports in 2015-17. These official statistics are very misleading, however, as they do not reflect the vast, centuries-long informal trade along a border in which one predominant ethnic group, the Yoruba, live and work on both sides. It is safe to stay that the odds are stacked against Customs officials who clearly do not have the geographic and cultural knowledge that the residents of these communities possess and utilise.

The great thing about borders and what these disasters prove is that borders are just that. Lines on a map that can be changed. So, if we now know that the present borders don’t work for Africa, we have to ask ourselves a truly searching question, can the borders of Africa be fixed?

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Tuesday 17 March 2020

BUSINESS DAY

EDITORIAL Publisher/Editor-in-chief

Frank Aigbogun

Managing the impact of covid-19: Honesty is the best policy

editor Patrick Atuanya

CBN and other authorities can learn from the NCDC example

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

C

hina, the factory of the world and a big importer of Nigeria’s crude oil, has sneezed and the world economy has caught a cold. But it’s no common cold.

Not much is known about this more lethal strain of coronavirus but its impact on lives and economies unfolds daily as governments around the world grapple with this pandemic.

This much is known: 25 to 70 percent of people in an infected country are vulnerable – it is transmitted directly or indirectly from contact with “respiratory droplets generated via coughing, sneezing or talking” according to the Nigeria Centre for Disease Control (NCDC) – and it will slow down the global economy as production freezes in China and countries cease to interact in order to prevent the virus from spreading. No antivirals or vaccines have been discovered.

Nigeria is not immune to the health and economic implica-

tions of covid-19 but government action or inaction can make a huge difference. Timely information to prevent panic and the spread of misinformation can douse the fear, uncertainty and doubt that make people take terrible decisions at times like this.

Since the first case of covid-19 in Nigeria on February 27, the NCDC has issued several situation reports and, lately, a 39-page interim guideline for health professionals to manage the disease.

This proactive response is commendable.

Information on how to identify, diagnose and manage the virus must be spread faster than the disease itself. It gives those who will be at the forefront of treating infected cases a head start. Even though there have been no reports of community spread in Nigeria, what happened in China, where the outbreak started, and is happening in Europe and the US shows the extent to which controlling the spread of this new respiratory infection can strain even the best and most

developed public health systems in the world.

Nigeria, unfortunately is illequipped to manage an outbreak; our public health system barely copes with treating malaria.

Measures taken in China and the West to reduce the transmission of the virus such as social distancing limit the interaction of people in public spaces; factories, offices and stadiums have been shutdown as people are forced to stay indoors. Hubei province in China with almost 60 million people and the location of Wuhan, the city where the virus first emerged, was locked down for 50-days – the largest quarantine in history.

These restrictions on movement of people have affected trade and travel; and consequently the global economy. It has destabilised the crude oil market.

What’s more, an oil price war between Saudi Arabia and Russia has made a bad situation worse, a nasty headache for Nigeria. Both are pumping millions of barrels of oil daily in a battle for market

share. Oil prices are expected to tumble further to $20 a barrel, way below the $57 the 2020 budget of Nigeria is based on.

Last week, in response to what many expect to be a torrid time for the foreign reserves of Nigeria which is solely and overly dependent on oil revenues, the exchange rate of the naira to a dollar went berserk, rising to as high as 420 naira per dollar. The central bank responded with a terse press release more reminiscent of a riot act read out by a disciplinarian headmaster to recalcitrant students during assembly.

Authorities at the apex don’t realise that their inaction is what is triggering panic; the surge in the black market is based on experience. Investors, households and other economic agents know about the consequences of the outbreak of covid-19. Don’t tell them not to panic, show them why they shouldn’t. Because they all know what happened the last time the CBN could not meet the demand for dollars.

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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Tuesday 17 March 2020

BUSINESS DAY

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Nigeria’s dysfunctional healthcare delivery system and COVID-19 incubus

CHIEDU UCHE OKOYE

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igeria is grappling with multifarious and hydra-headed problems, which are traceable to the rudderless, visionless, clueless, bumbling, inept, wasteful, and corrupt political leaderships and military regimes that had existed in the country in the past. Now, one of our national problems is our depressed economy. Our economy has become stagnated owing to the mismanagement of our oil wealth by past successive military juntas and corrupt political governments for eon period.

Consequently, now, some roads in the country have become deathtraps, what with pot-holes dotting and pock marking them. The pitiable and unsightly state of those roads brings back memories of roads in war-torn countries. Are our leaders aware that good road network opens up a country for rapid industrialization? And, we should not gloss over the state of our public schools, ranging from the kindergarten to the University level, not being unconscious of the fact that education is the bedrock of national development. Is the insanitary condition as well as the pitiable condition

of most public-school buildings not one of the causes of the dysfunctional state of our educational system? Not surprisingly, our pupils and students attending public schools do not receive qualitative education.

More so, since our government – owned hospitals were once described as mere consulting clinics in the 1980s, the state of our healthcare delivery system hasn’t improved a bit, what with well-heeled Nigerians seeking treatments for their illness in India, Europe, and America. So, today, Nigeria loses whopping sums of money yearly via medical tourism embarked on by the country’s political leaders and other well-heeled Nigerians.

In his first term in office, President Muhammadu Buhari spent considerable length of time in a London hospital undergoing treatment. Were our hospitals equipped with modem pieces of medical equipment, and the morale of medical personnel boosted, a majority of Nigerians would not contemplate seeking cures for their diseases in foreign countries, not to talk of their travelling to those countries for health reasons. However, sadly, the obverse obtains here.

In today’s Nigeria, doctors who work in government-owned hospitals, both at the state and federal levels, do embark on incessant industrial action to call attention to their welfare condition. But, when medical practitioners down tools, it will lead to loss of human lives as they are under obligation not to give medical help to those lying critically ill in hospital beds. But are our leaders with the virtues of empathy and common touch?

The indisputable fact is that successive political administrations in the country had failed to address holistically and comprehensively the issues impeding the growth of our

health sector. That’s why highly educated and eminently qualified Nigerian medical practitioners, who possess medical expertise, are migrating to foreign countries in droves for greener pastures. The brain-drain or mass exodus of Nigerian medical practitioners to Europe and America has become our loss and other countries’ gains.

So, the parlous and comatose state of our health sector induced fear in us and caused panic among us when there was an outbreak of Ebola disease on the African continent in 2014.

Then, a Liberian attending conference in Nigeria (who was the index case in the country) brought the dreaded and deadly disease to us. But for the professional expertise, patriotism, and diligence displayed by the Late Stella Adedovoh, the disease could have spread to every nook and cranny of Nigeria and claimed many lives, as well. She paid the supreme price while working to halt the spread of the disease in Nigeria. Today, Stella Adedovoh has become a heroine and martyr for our national interests and collective good.

Now, the success we recorded in halting the spread of Ebola disease in Nigeria in the past has imbued us with the belief and confidence that we can check the spread of the corona virus in our country. Sadly, an Italian man has brought the disease to our shores.

Another person has tested positive to it, too. Expectedly, Nigeria has risen up stoutly and confidently to the Covid- 19 challenge, with the quarantining and isolation of the index case victim in a hospital in Yaba, Lagos.

Those who came in contact with the sick and unfortunate Italian are being traced in order that they should be tested and screened for the disease.

This action is harmony with government’s effort and policy to check the spread of the hitherto incurable disease (Corona Virus) in Nigeria.

‘

The indisputable fact is that successive political administrations in the country had failed to address holistically and comprehensively the issues impeding the growth of our health sector

As covid-19 disease has no known cure, we should adopt and implement measures for the early detection and isolation of those who have contracted the disease. This is important because it has been discovered that the early treatment of infected persons will stand them in a good stead to recover from the disease and live normal life thereafter.

Again, the entry points in the country should be adequately guarded.

Visitors to the country should be screened for the disease at the international airports. Our health personnel at the airports should maintain a high level of vigilance and diligence while doing their jobs. They should know that covid-19 has no known cure, and that it has caused huge fatalities in such countries as China, Italy, Iran, and others.

More importantly, governments at different levels in the country should educate the masses on the nature and symptoms of the deadly scourge called Corona Virus and sensitize them to the need to maintain a high level of personal hygiene. And, Efforts should not be spared to disseminate information about covid-19 to rural dwellers.

And the state governors should equip hospitals in their states with drugs and pieces of equipment and train their medical personnel on how to tackle cases of Corona Virus.

We should note that contracting Corona Virus is not a death sentence.

It is on record that many a man who got infected with the disease recovered from it. But our taking proactive action aimed at its containment has become an imperative. I would leave you with this message: Health is wealth.

Okoye, a poet, wrote in from Uruowulu-Obosi, Anambra State08062220654

Reading versus aliteracy

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nce upon a time, Nigeria paraded the best set of authors and publishers in Africa. Then, reading was an innate affection for both young and old. This reading culture reflected so much on the quality of leadership and civil discipline that brought pride to Nigerians anywhere in the world.

Now, the rich literacy history the country was famous for is gradually been eroded. A new type of reading problem is sweeping our country. It is called aliteracy. Aliteracy is defined as the quality or state of being able to read but being uninterested in doing so.

Yes, reading – which was once indulged in as a pleasure – is now often spurned as a chore.

Nigeria has been rated by the World Culture Score index as one of the countries in the world with the lowest reading culture.

Available statistics from the National Commission for Mass Literacy, Adult and NonFormal Education show that 38 per cent of Nigerians are non-literate, as 4 in 10 primary school children cannot read for comprehension. Regrettably, this adverse development is an ominous challenge that the country seems not to be paying the needed attention.

What are some of the factors that contribute to the poor reading culture in the country? The downturn in reading and book readership actually has a global dimension, especially given the onslaught of the digital revolution. Globally, the influence of new technology has altered the disposition to reading. Perhaps the most time-consuming

competitor of reading is television. Also, the decline in the standard of education has seriously affected reading ability. Before now, schools engage and participate in reading activities to enhance the thinking and creative ability of students. But lack of availability of suitable reading materials, absence of well-designed reading activities, insufficiently trained staff to prosecute reading culture in schools and ineffective monitoring and evaluation of readership promotion programmes are constant challenges currently affecting readership development.

Another possible factor contributing to the poor reading culture in Nigeria is perhaps that our socio-economic environment is not reader friendly. The daily struggle for economic survival provides little or no time for people to cultivate a good reading habit.

Equally, high cost of books, particularly imported ones, as well as a dearth of dedicated quiet reading spaces like libraries, has contributed to low readership promotion in the country.

Why is reading important, and what benefits come from developing a good reading habit? Reading is the key to unlocking many kinds of knowledge, skills and enjoyment.

Reading stimulates the imagination, develops verbal skills by helping us build up a good vocabulary, and reading also promotes the fine, godly quality of patience. Also, studies have shown that there is an almost symbiotic relationship between reading and intelligence. The analytical skills that

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provide the ability to understand issues and solve problems are the product of intensive reading. Reading regularly is also a way to mental health, which enhances emotional intelligence, helps with self-awareness, empathy, social skills and managing relationships more effectively. Reading also provides a therapeutic effect and inner tranquility, while also slowing mental decline.

Thus, the relationship between reading, knowledge acquisition, intelligence and personal development is crucial for economic and social development. A critical mode of thinking is lost in the absence of reading.

True, the ability to read with ease and fluency does not come without real effort.

But for the effort we put forth now, we will be repaid many times. In our waking hours, we daily face things to read: signs, labels, books, magazines, newspapers, forms, also letters. All of this can be an unpleasant chore for those who read poorly. However, if you learn to read well, you will find your life greatly enriched in a pleasurable way.

How can parents help their children become good readers? They can do this by (1). Setting a good example of being good readers themselves. (2). Having lots of books around. Children will read if books are readily available. The incentive to read will be even greater if the books are part of their own personal library. (3). Making reading enjoyable. They can do this by (a) setting limits on television time (b) creating an atmosphere that is conducive to reading (for

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DANIEL IGHAKPE example, quiet times and areas with good lighting). (c) Not forcing reading. Make the materials and opportunities to read available, but let the child develop the desire.

It is commendable that certain individuals and organizations are making concerted efforts to revive the reading culture in the country. To improve the reading culture among young ones, more books should be procured for children than smart phones and tablets. Nigerian homes need to be fitted with more bookshelves and bookcases than flat screen TVs and laptops. There should be increased funding for the education sector and the government must take an active role in resuscitating good reading habits.

Existing libraries should be refurbished, and there should be a redesign of the school curriculum to incorporate more reading activities. There should also be effective campaigns to bring back the libraries to our schools and communities. Also, efforts should be made to reduce environmental noise, which is inimical to reading.

If these steps are taken, it will result in an improvement in the reading culture among young ones and old alike.

NB: Some content of this article was sourced from a writeup by Kehinde Akinfenwa, of the Lagos State Ministry of Information & Strategy, [Alausa, Ikeja].

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Tuesday 17 March 2020

BUSINESS DAY

Media business Why Nigerian brands should join fight against Coronavirus …Brands in Nigeria should not behave as if they are immune to the effects of the virus Daniel Obi

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igerian organisations and celebrities, between 1950s and 1990s, deeply joined to fight racial segregation otherwise known as Apartheid in South Africa. Freedom was finally achieved in 1994 after Nelson Mandela was freed on February 11, 1990. Afterwards, business relationship deepened between both countries.

Since then, Nigerian organisations, brands and celebrities have not in the same spirit and collectively joined to fight any global cause with such intensity and financial commitment. Coronavirus, which is causing the world to quake, presents such platform for Nigerian brands and celebrities to totally join in the fight to achieve freedom from the disease. They stand to gain later as consumption will continue without coronavirus restricting associations.

Unfortunately, as of today, the public is yet to see many organisations leading conversations on coronavirus and healthy living. A few of them in this fight are from the perspective of marketing their health brands.

It is heart-warming, therefore to hear Aliko Dangote Foundation (ADF) pledge N200million to support current effort of the Nigerian

government towards curbing the spread of Coronavirus or Covid-19 in the country.

Other brands, celebrities and institutions are expected to unilaterally join in the conversations against the disease and healthy living to checkmate the global challenge to enhance free brands consumption.

According to a marketing professional, brands in Nigeria should not behave as if they are immune to the effects of the virus which is now threatening the world peace and economy.

In China, brands are being affected as consumers are staying at home.

Already, the disease is said to have cost the manufacturer of Corona beer by Anheuser-

Busch In Bev, which owns some of the world’s largest alcohol brands £132 million, a development which is not clear whether consumers are avoiding the brand because of its name or because consumers are staying at home.

Restaurants and public eating places are being affected as consumers are avoiding such places to avoid contamination.

Companies like Diageo with China as strong market are forecasting sales drop.

In Italy, football fans are also staying at home largely due to the disease discovered in December 2019 which experts say are large families of viruses that cause illness ranging from the common cold to

more severe diseases such as respiratory problems.

What this means is that the revenue that should have accrued from ticket sales would not come; the soft drinks that should have been sold at the stadium would no longer be sold, which means huge revenue losses to the manufacturers, and revenue that should have accrued to transport owners would also not come Abroad, companies have joined in the fight against the disease. It is said that Alibaba has established $160 million fund for medical supplies; “Tencent and Baidu follow with commitment of $43.2 million each” “Other major foreign brand

Paga, Visa collaborate to promote mobile payment solutions Daniel Obi

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aga, foremost emerging markets mobile mone y and payments platform has announced a new strategic partnership with Visa, which will enable both companies to work closely in accelerating secure and convenient mobile payments for merchants and consumers in markets where Paga operates.

This partnership is in line with Visa’s goals to drive alternative payment channels, in this case, mobile wallets, within its global ecosystem.

For Paga, partnering with Visa is one step further in Paga’s global expansion plans.

Through this partnership, all Paga account holders will have access to Visa credentials (physical and virtual cards) tied to their Paga accounts and thus the ability to transact anywhere in the world Visa is accepted.

Both companies are also working together to launch

a number of innovative merchant acceptance solutions which range from QR codes and NFC for instore merchant payments, online payments, and international remittances all processed through Visa’s network.

Speaking on this new partnership, Tayo Oviosu, Founder and Group CEO, Paga commented in a statement ; “We are excited to partner with Visa, a leader in payments globally, as it is constantly building worldclass solutions for consumers and businesses. Our goals are well aligned. As we scale our wallet across emerging markets such as Nigeria, Mexico,

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and Ethiopia, partnering with Visa to give both consumers and businesses, who have been underserved, access to Visa’s global network made sense to us. Furthermore, it was clear to us in all our engagements the alignment of our goals towards solving the issues of cash, digitizing cash transactions and delivering financial services using new and innovative approaches.

We are very happy to have signed a long-term relationship with Visa.”

Merchants who use Paga’s payment collection suite will also benefit from this partnership. They will be able to accept non-card based pay-

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donors include L’Oréal, Dell, Microsoft, PepsiCo, Shell, Procter & Gamble, Apple, and Estee Lauder. Brands are also providing supplies and in-kind support. For example, Nestle and several brands under its umbrella are providing $5.7 million in cash and products to Wuhan, focusing on bottled water, milk powder and nutritious cereals, while Yum Brands China, which operates the KFC and Pizza Hut chains in the country, is providing free meals to Wuhan hospital workers”, report monitored in ChinaFilmInsider website said.

“Top Chinese celebrities, almost all of whom play key roles in the country for international brands, have also been actively involved by making pledges, collecting supplies and sharing videos to express support for those in Wuhan and provide information on virus prevention measures”, the report said.

Back home, an anti-septic brand is said to have joined the fray to fight the disease by creating awareness about healthy living. But brands outside health sectors should join in the conversation and allow other product promotion messages and campaigns take backseat for now.

Latest situation report from the World Health Organisation shows 78,630 confirmed cases and 2,747 deaths in Wuhan, China where the case was

first discovered. The disease is equally taking its toll in other countries. In the wake of this carnage, people are staying home. That means tons of businesses — especially less essential ones like bars and restaurants — are closed.

If there are massive cases of the disease in Nigeria, brands will be severely affected, hence they need to start sensitising consumers now to avoid the spread.

WHO says Coronaviruses are zoonotic, meaning they are transmitted between animals and people. Common signs of infection include respiratory symptoms, fever, and cough, shortness of breath and breathing difficulties. In more severe cases, infection can cause pneumonia, severe acute respiratory syndrome, kidney failure and even death.

World Health Organisation further said that standard recommendations to prevent infection spread include regular hand washing, covering mouth and nose when coughing and sneezing, thoroughly cooking meat and eggs. Avoid close contact with anyone showing symptoms of respiratory illness such as coughing and sneezing.

The time to fight the disease in Nigeria is now, by creating healthy living awareness and sensitising the citizens about it. Brands should key into this cause as doing otherwise would prove detrimental.

Rosabon empowers female entrepreneurs with N1m grant ments from customers of any bank in the world who offer Visa products. This will lead to much-improved customer experience and in the longrun, growth in sales.

Reflecting on why Visa chose to partner with Paga, Otto Williams, Visa’s Vice President, Head of Strategic Partnerships, Fintech & Ventures for Central Europe Middle East and Africa “We are excited to have Paga plug into our network, as a company we remain grounded on the principles of partnership, innovation, trust and openness. This development ushers in a new era of speed and convenience beyond borders. It also allows us to continue working towards innovating robust platforms through which merchants using Paga’s payment collection suite can benefit from international money transfers and the growing eCommerce industry.”

As part of this partnership, Paga will join Visa Fintech FastTrack Program.

Daniel Obi

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s part of programmes to celebrate the 2020 International Women’s Day, Nigeria’s foremost nonbank financial institution, Rosabon Financial Services, in partnership with MamaMoni, has empowered 100 industrious women in Lagos State with a N1 m grant.

At an event to mark the day which held at the MamaMoni headquarters, Amuwo Odofin, recently, Stephen Shofu, Marketing Communications Manager, Rosabon Financial Services, presented a cheque of N1 Million to the founder of the MamaMoni foundation, Nkem Okocha.

Speaking after the cheque presentation at the event which featured a business pitch session, Shofu in a statement said the grant would help attain a gender-equal world and enable female entrepreneurs who often face more difficulty accessing business funds than their male coun@Businessdayng

terparts.

“Running any business is a big deal. That’s why for over 27 years, we have worked with SMEs and business owners to provide affordable financial services that help business growth and drive economic sustainability.”

The grant, according to Shofu, “will be made available to over 100 ambitious female entrepreneurs who are doing amazing things with small businesses, in line with Rosabon’s commitment to recognise and support the wellbeing of the SMEs in Nigeria”.

Also speaking at the event, according to the statement, founder of MamaMoni Empowerment Foundation, Nkem Okocha, expressed her delight for the grant, saying: “I am thrilled that Rosabon Financial Services has celebrated this year’s International Women’s Day by giving N1 Million in grant to MamaMoni- empowered women to help them scale their businesses and to attain economic equality faster”.

Tuesday 17 March 2020

BUSINESS DAY

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ADVERTISING Oil price fall below budget estimate dims hopes of marketing agencies’ recovery Daniel Obi

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opes of recovery of Nigeria’s struggling marketing communication industr y following the slight economic growth from 2.21% to 2.27% last quarter 2019 appears to be dimming again as crude oil price falls drastically.

The falling international crude oil price by over 40% to $37 dollars per barrel due to the ravaging coronavirus outbreak, exacerbated by Saudi Arabia and Russia price war is likely to hit Nigeria hard which heavily depends on oil sales to run the economy.

President Buhari had signed the 2020 budget of N10.6 trillion into law based on crude price projection of $57. According to analysts, if the price stays below this projection for long, it could push Nigeria into another recession. Though, government has started moves to review the 2020 budget.

The oil price staying below 2020 budget projections will affect the Central Bank of Nigeria, CBN’s ability to fund the foreign exchange market and reserves. What this

means is that most companies that marketing communication agencies rely on for businesses will find it difficult to access foreign exchange for necessary imports for their operations.

“Companies that depend on forex for import for their operation will find it difficult to operate”, an analyst told BusinessDay. He said that these companies will therefore be cautious in their expenses including marketing communication costs an area that has always taken the hit when companies go through difficult time.

Steve Babaeko, CEO of X3M Ideas, a creative agency described the situation of oil price fall as precarious which will affect businesses across board. “The situation is cloudy and challenging time ahead as clients the agencies work for will be affected.

In his assessment, Kayode Oluwasona of 1201 agency, who frowned at mono product economy of Nigeria as disappointing said the present situation of price fall will increase cost of running businesses.

Stating that companies will

BD Brand Talk

How brands can survive Coronavirus crisis Nigel Hollis, Michael Umogun

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he office is an organized environment that encourages focus and productivity however these are difficult times that have seen the office become suddenly not too attractive to many people and working from home is much preferred for health reasons.

Unlike humans, brands cannot isolate themselves so easily part of a brands primary objective is to be visible so that it can be chosen at the moment of truth. With the full effects of the Corona Virus outbreak still to be realized in many markets what can management and marketers do to ensure the continued health of their staff and brands?

First, put plans in place to continue business and protect employees and customers. Second, recognize that every business in the same industry is likely to take a hit. Third, how well you ride out the crisis will depend on responding to it more effectively than your competitors.

How can your brand best ride out the turmoil? And how can you ensure a swift return to business as usual? Doing dry run and rehearsal of possible worst-case scenarios matters as you would be better prepared for the challenge before it occurs. If your resident IT and statisticians can model the possible impact for you and how to respond

effectively that could also be helpful. Bottomline do not be too relaxed and caught out, play out the different consequences and as the boys scout would say it ‘be prepared’ Beyond the immediate response, when facing something like Corona Virus the response to people’s feelings is going to be critical. To do so effectively, management and marketers must suspend their own viewpoint and put themselves in their customer’s shoes. Good time for emotional intelligence 101. How do they feel? What help might they need – functional or emotional? And how might they expect the brand to respond? People’s response to a crisis is going to vary by their basic attitude to life, and it is important to align your brand’s response with its existing positioning and values or it will seem inauthentic. Ultimately it is about how your brand can improve its relevance in a time of need and defuse any potential concerns related to your business. For instance, home delivery might seem like a great idea but only if the delivery person has sanitized their hands.

This is the best time brands playing in the health and related sectors should collaborate with relevant authorities to create visibility and relevance for the society. It is disheartening that marketers of sanitizers and hand wash are making a kill instead of showing empathy. It would be fair to say though that the laws of demand and supply are at play the truth remains that brands that show empawww.businessday.ng

thy now would be remembered and rewarded during better days.

Brands that have invested in technology would also benefit when there is a clamp down or restriction of movement. Good news is our situation in this clime (Nigeria) have not gotten that bad, but we would like to note that even in China Kantar is still talking to thousands of consumers via WeChat and What’s App. A good number of our home panels are still running, and this is a delight as we can provide service in difficult times to our clients.

While it might seem callous to say so, crises can also offer the opportunity for growth. In China, Luckin Coffee began delivering alcohol-based sterilizers and antibiotic hand soap in addition to its beverages and stocking its network of vending machines with the sanitizer products. Whether this proves a successful strategy or not, the demand for DTC services and delivery is only likely to grow in the coming weeks and will likely have a longterm impact on consumer behaviour.

I would like to close with the cheering news that our first case of Corona Virus has fully recovered and may be leaving the Infectious Disease Hospital in Yaba (Lagos) very soon.

So, to the Nigerian brand managers how have you been coping with the whole Corona virus palaver?

Nigel Hollis (Chief Global Analyst, Kantar) and Michael Umogun (Lead, Marketing and New Business Kantar Nigeria)

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though adopt dynamic ways of running their business, Oluwasona who was president of Association of Advertising Agencies of Nigeria said the situation calls for rationalization of expenditures by companies with regrets that communication budgets will be affected.

Akonte Ekine, CEO of Absolute PR said the oil price fall will compel companies to slow actions on certain activities while they will search for effective but cheaper communication channels.

However, since the border closure, some operators in the FMCG

sector have intensified efforts to rely on local source of materials and this is expected to increase domestic production but it is yet to witness a boost in spending for marketing communication.

Already, due to the harsh operating environment occasioned by certain government policies, companies have not only cut marketing communication budgets but elongated period of payment sometimes upto 6 months for campaigns and other media jobs executed, a situation that have strained the agencies who borrowed money to execute those assignments.

The difficulty suffered by agencies recently pushed Biodun Shobanjo, chairman of Troyka Group to suggest 60 days on media contract payment by clients through legislation.

This is as an option of saving the marketing communication business as debt within the industry between clients, service providers, media owners and advertising agencies, with its implications, need to be checkmated. But resolution of this will require a tripartite meeting between agencies, clients and the regulatory body to enhance appreciation of each other’s situation.

OMD named Global Media Agency of the Year 2020 by Adweek

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MD Worldwide, an Omnicom Media Group Agency, has been named Global Media Agency of the Year 2020for the second consecutive year by Adweek, a leading advertising industry publication globally.

The accolade marks the sixth time that OMD has been named Adweek Global Media Agency of the year since 2010. Profiling the agency in its February 24th issue, Adweek credits OMD for sustaining the stunning 2018 comeback globally that earned it the Global Media Agency of the Year title last year; and for leveraging that momentum to support the continuing investments

in talent, technology and process that would make winning a repeatable process in 2019, and into the new decade.

In the COMvergence Media Agency New Business Barometer report released on recenlty, OMD globally tops the ranking with $2,027m in net new business values (As defined by the standard industry calculation i.e. wins + retentions – losses).

The COMvergence New Business Barometer completes a trifecta of first place net new business rankings for OMD in 2019, following reports from global consultancy R3 and media agency research company RECMA published earlier this year.

9mobile expands 4G-LTE coverage in Kaduna

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mobile has added Kaduna to the list of cities that now enjoy superior quality service, thanks to the expanded coverage of the telco’s 4G-LTE service in the historic city.

Amidst high-pitch entertainment, fun, games and showers of gifts that delighted the residents, 9mobile switched on its uniquely superior highspeed 4G-LTE service which enables new and existing customers of the telco in Kaduna and its environs to enjoy quality voice and data services.

Speaking at the fun fair, Head, @Businessdayng

Region North, Sales, 9mobile, Kabiru Kazaure, said as a caring network, the expanded coverage of 4G-LTE in Kaduna as well as the rewarding of new and existing customers through the presentation of valuable gifts items underscored the telco’s commitment to empowering subscribers to achieve more.

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Tuesday 17 March 2020

BUSINESS DAY

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14

Tuesday 17 March 2020

BUSINESS DAY

Tuesday 17 March 2020

BUSINESS DAY

COMPANIES & MARKETS

17

COMPANY NEWS ANALYSIS INSIGHT

CONSTRUCTION

Julius Berger proposes 2.75 kobo final dividend, share bonus after N10.3bn profit SEGUN ADAMS & OLUFIKAYO OWOEYE

J

ulius Berger (JB) has proposed a final dividend of 2.75 kobo per 50 kobo and a bonus issue in the proportion of one new ordinary share for every five existing ordinary share held, the construction giant said Friday.

The final dividend is subject to shareholders’ approval and appropriate withholding tax will be paid to shareholders whose name appear in the Register of Members as at the close of business on May 29, JB said. This compares to a final dividend of 200 kobo for 2018, 100 kobo for 2018 and no dividend for 2017.

However, it must be noted that there was no bonus offered in 2018.

Also, it should be noted that while a share bonus increases the total number of shares issued and owned, it does not change the value of the business.

Julius Berger announced it made a profit of N10.3bn as profit for the full-year ended 31st December 2019 which saw the price of the company’s shares almost 10percent gain with its the highest volume traded since

June 26, 2015.

Amid an economic recession, the company plunged into N2.39bn loss in 2016.

Understandably, the construction-giant relies on public spending (Federal and State Government) spending.

During the economic contraction, the company was left exposed to a huge foreign exchange acquisition loss of N14.23bn.While the foreign exchange losses have reduced with an improved economy, they remain sig-

nificant. Further, a devaluation in the nearest future (no matter how slim) could hurt the company’s results.

Julius Berger has since found the path of profitability, thanks to improved economic growth, though

L–R: Ranti Oviebor, Lagos State coordinator Agro-Processing, Productivity Enhancement and Livelihood (APPEALS) Project; Olalekan Pereira Sheteolu, programme manager, Lagos State Agricultural Development Authority (LSADA); Abimbola Okoya, executive director, British American Tobacco Nigeria Foundation (BATNF), and Ayoade Abiola, Lagos State Director of Agricultural Services, at the donation of smoking kiln to beneficiaries during the grand finale of the 3-day capacity building workshop on production and processing of catfish at LASDA office, Agege, Lagos.

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sluggish, with an uptick in capital expenditure spending by government. In 2017, the company recorded a bottom line of N2.51bn, while in 2018, it ballooned to N6.1bn.

In its recently released consolidated unaudited fourth-quarter result for the period ended 31ST December, revenue ballooned to N264.55bn from N194.61bn.

Marketing expenses increased to N168.32m from 126.8m in 2018. Administrative expenses stood at N35.31b from N34.46bn in 2018, leaving profit after tax at N10.3bn from N6.1bn in full-year 2018.

Further breakdown of the revenue segments of the group show that civil works segment recorded N150.79bn from N110.15bn in 2018, Building works segment recorded N89.94bn from N65.70bn in 2018, facility management services recorded N23.81bn from N17.39bn in 2018.

18

Tuesday 17 March 2020

BUSINESS DAY

COMPANIES&MARKETS MARKET

Nigerian stocks still ahead African peers despite record plunge SEGUN ADAMS

T

he Nigerian stock market saw its worst week in four years which pushed year ’s gain to the worst in 2020, but the bourse remains one of the continent’s leading market despite heavy losses.

Compared to peers, the Nigerian Stock Exchange (NSE) which shed almost N2trillion off its capitalization with its main index falling to a 4-year low, is in relatively better-off position in terms of year-to-date return than comparable markets in Africa.

As of Friday, NSE was down by 15.3 percent, but its 2020 performance stood higher than Egypt’s 27.31 percent decline, South Africa’s 22.61 percent slump (JALSH) and Kenya’s 19.68 percent. Although, Morocco and Mauritius stock markets stood at -13.54 percent and -9.04 percent each.

In terms of valuation, Nigerian stocks remain cheap at nearly half the average of the big African bourses.

NSE as of Friday had a P/E ratio of 6.68x, which meant investors were will-

ing to pay about 7 times of each local currency unit of earnings.

C o m p a re d t o S o u t h Africa’s 12.22x , Kenya’s 9.33x, Egypt’s 8.34x, Morroco’s 20.01x and Mauritius’ 13.96x, and an overall average of 11.76x for the six bourses, the demand for Nigerian stocks are weak (although some analysts say its reflects expectations

of weaker growth for Nigerian firms in line with the broader economy).

The poor performance of the African bourses can be seen as reflecting the widespread impact of the coronavirus outbreak, although for the likes of South Africa, which recently entered a recession, macroeconomic conditions are weighing on investors’ sentiment.

For the NSE, analysts believe that positive outcomes in the oil market will lift stocks from their lows.

This would result in stocks paring their losses at least.

A gain of up to 10 percent in eleven trading days

by Nigerian stocks put the domestic bourse ahead of continental peers earlier in the year, and seemed to suggest better outcomes in 2020

for the stock market which had sustained a bearish-run for two straight years.

In 2019, Morocco gained 8.38 percent, Egypt gained 7.33 percent, South Africa gained around 8 percent Kenya declined by 6.33 percent compared to Nigeria’s almost 15 percent decline.

But in January 2020, while NSE was having its best start to a year in more than a

decade, the Kenyan, Moroccan and South African exchanges had delivered less than four percent, while Egypt had sub-zero returns.

The euphoria for investors on the NSE didn’t last as a move by the Central Bank of Nigeria’s Monetary Policy Committee (MPC) to put brakes on inflation by raising banks’ ratio of mandatory deposit with CBN (Known as Cash Reserve Ratio or CRR) to 27.5 percent.

Banking stocks started to sell-off as soon as the market resumed trading. But none of that can compare to the average daily loss of 8 percent suffered in the first four trading days last week.

The sell-off was seen across the board – not just the banks. By the end of last week, the market had plunged around 23 percent off its year-high.

Analysts at Lagos-based investment bank United Capital in an outlook report at the beginning of the year said they expect NSE to return 5.3 percent in 2020.

A best-case scenario from the analysts suggest a 23.6 percent rally while the worst-case scenario would be -16.3 percent, they said.

know that they will always remain members of the Ecobank family,” the Board’s chairman said.

Shares of ETI gained 4.55 percent to close at N4.6 per share in Lagos Friday.

ETI is as of Friday, yet to declare its 2019 full-year result, but the pan-African

lender announced a crossborder remittance partnership with Alipay that seeks to promote more inclusive financial services to users.

The bank said the partnership would facilitate instant transfers from Rapidtransfer, Ecobank’s remittance solution, to users of Alipay, which serve more than 1.2 billion people globally together with its local e-wallet partners.

“This provides an additional channel option which increases options available to users, helps lower transaction costs and enhances the quality of service in the market,” Ecobank Transnational Inc. is a bank holding company. The Company, through its subsidiaries and branches, provides a full range of wholesale, retail, investment and transaction banking services and products to governments, financial institutions, multinationals, international organizations, medium, small and micro businesses and individuals.

APPOINTMENT

ETI announces key changes to Board SEGUN ADAMS

E

cobank Transnational Incorporated, ETI, the Lome-based parent company of the Ecobank Group, has announced the appointment of Georges Agyekum Nana Donkor and Zanele Monnakgotla as Non-Executive Directors to its Board of Directors.

Donkor will be replacing Bashir Mamman Ifo as the representative of Ecowas Bank for Investment & Development (EBID) on the Board of ETI following his appointment as president of EBID. Bahsir Ifo retired from his role as president of EBID, said ETI. On the other hand, Monnakgotla, appointed Non-Executive director and nominee of the Public Investment Corporation (PIC) of South Africa on the Board, is replacing Daniel Matjila who resigned from the ETI board when he left his role as Chief Executive Officer of PIC, ETI

said in a note published by the NSE Friday.

“I warmly welcome both Dr. Donkor and Mrs. Monnakgotla and believe that their respective expertise would be most beneficial to the board,” said Emmanuel Ikazoboh, Chairman of the Board of ETI. According to the pan-

African Bank, Donkor is a lawyer, banker and marketing consultant with over twenty-five years’ experience in Senior Management capacities across several fields such as Finance, Strategic Management, Marketing, Legal, Compliance and Administration.

His counterpart, Monnakgotla, has over 20 years’ public and private sector experience in Structured Finance and Strategy.

ETI said it thanked Mr Ifo and Dr Matjila for their contributions to the Board and their tireless dedication to the Ecobank Group. “We

L-R: Tiye Femi-Raji, human capital management division, CITITRUST Holdings plc; Margaret Fajemirokun, group chief, Human Capital Management; Yemi Adefisan, group chief executive, CITITRUST Holdings Plc; Florence Alao, group head, legal, CITITRUST Holdings plc, and Titi Omotosho, investment analyst, during the company’s commemoration of Year 2020 International Women’s Day, in Lagos. www.businessday.ng

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Tuesday 17 March 2020

BUSINESS DAY

COMPANIES&MARKETS

19

Business Event

CONSUMER GOODS

Food & Beverage makers touch 52-wk low as shares shed N101bn SEGUN ADAMS

S

hares of food and beverage makers fell to their 52w e e k l ow , w i t h some almost just short of the mark, after investors nearly wiped N2trn off market capitalization in last week’s market rout.

Nestle, Cadbury, Unilever and Nascon lost a combined N101.7bn last week BusinessDay estimates based on the product of their respective total number of shares and the difference in unit price of shares week-on-week.

The massive sell-offs in the market last week pushed shares to new lows but opened up opportunities to position in fundamentally sound stocks in anticipation of positive triggers to improve sentiments on the market.

Nestle last week closed at N915.3, around 11 percent above its 52-week low.

Cadbur y and Nascon closed at their 52-week low of N4.95 and N9.5 respectively. Similarly, Unilever (which has non-food aspects of its business) closed 10.43 percent above its 52-week low of N10.55.

As a result, price of the stocks compared to their earnings weakened further, with a comparison to South African peers showing an average P/E ratio of 12.14x for the Nigerian stocks compared to 17.11x for their southern peers.

The South Africa stocks were RCL Food Ltd, AH-Vest Ltd, AVI Ltd and Pioneer Food Group Ltd. Crookes Brothers with a P/E ratio of 112.02x proved to be an outlier.

However, Nigerian companies have a higher price

to book value than SA peers at 4.95x to 2.28x.

While Nigerian stocks may seem cheap considering their P/E, concerns about the outlook for growth in the economy, consumer spending and infrastructure remain the paramount indicators of future industry performance.

The Food and Beverage Industry with Food, Beverage and Tobacco as proxy in the GDP report, grew by 2.17 percent year-on-year in 2019 which is below 2.93 percent seen in 2018.

The sector’s growth was also below the broader economy’s 2.27 percent.

Last year Nestle reported a profit of N45.68bn, a growth of 6.2 percent but Unilever slipped into a loss.

Cadbury grew profit by an impressive 53.94 percent to N1.27bn while Nascon pared profit to N1.94bn.

L-R Martha Kayode, a participant; Yemi Faseun, HR professional and thought leader and Omole Imosemi, founder, BrandLee Solutions at the annual Global Bookbased Learning Summit themed The Enabled Woman: Winning and Positioning Strategies for Work-Life Success, designed around the book, “Lean In” by Sheryl Sandberg and organised by BrandLee Solutions, at ZoneTech Gbagada, Lagos

COMPANY RELEASE

Lipton drives the equality conversation through Rubbin’ Minds special for International Women’s Month

E

ach year on International Women’s Month, corporate organizations around the world join activists and advocates to contemplate the place of women in contemporary life and what roles everyone must play in ensuring women are more represented in public spaces. It is a time for much celebration and much introspection, and hopefully lasting solutions.

With all the activity around #IWD, it can become easy to lose sight of the real challenge we are trying to shed light on. Are we going to stop advancing conversations around equality for all?

This year’s campaign theme for International Women’s Day, #EachForEqual, is the beginning of an ongoing conversation to foster equality. Each organization has to play its part in getting the message out.

For Rubbin’ Minds, #IWD has always been an opportunity to offer their platform to women, amplify their stories and celebrate their successes.

This year, the show is taking things a little further by collaborating with a major lifestyle brand to air an explosive month-long series for women who have been front and center in the fight for equality and they are leading by example by ceding the show to a female guest host.

Zimbabwean actress, model and television personality, Vimbai Mutinhiri is a stellar example, highlighting the power of a platform. Ms. Muthinri’s career skyrocketed after she was featured on international reality showcase, Big Brother Africa, and she has leveraged the visibility it gave her to launch an impressive media career, hosting high profile events, interviewing aspirational guests and bringing a spotlight to issues dear to her.

For #IWD this year, she joins Ebuka Obi-Uchendu, Rubbin’ Minds resident host to feature and celebrate powerful women who have pushed beyond windy boundaries and rebuilt pyramids from the ashes of the unavoidable.

These women educate, motivate, mobilise and inspire a new generation of women to drive new realities for women in Nigeria – Africa too.

But Rubbin’ Minds is not doing this alone. Lipton is actively helping to push the equality narrative and will not be stopping anytime soon.

When most corporate bodies were paying lip service to ‘equality in the workplace place’, Unilever, Lipton’s parent company, was taking measured steps to ensure equal opportunity, treatment, and representation in all its global holdings. And www.businessday.ng

on March 3rd, 2020, exactly a year ahead of its own target of 2021, Unilever announced that it has attained its goal.

No wonder the company will partner with Rubbin’ Minds to advance its goal.

With a lineup of formidable women from different walks of life, the special edition of Rubbin’ Minds celebrates history too. Being a home brand for generations, every story of success for these women could have a Lipton backdrop.

The International Women’s Month special has since began airing, beginning with a first episode featuring two powerhouses in their different fields, former World Bank Vice President and onetime presidential candidate, who is the co-convener of the unrelenting #BringBackOurGirls movement, Oby Ezekwesili, and Nollywood maestro Sola Sobawale, who made a power comeback onto the scene with her role in the box office hit – King of Boys – in 2018.

Subsequent episodes will feature business leader’s CEO Medplus, Joke Bakare, MD. Cadbury Oyemika Adeboye, Founder Genevieve Magazine, Betty Irabor, Founder Terra Kulture, Bolanle Austen-Peters, Chairman Access Bank, Dr. Ajoritsedere Awosika, Senator Florence Ita-Giwa among others.

Atiku Bagudu, governor of Kebbi State, presenting the overall winner Trophy of the 2020 Argungu Motor Rally, won by PAN Nigeria to Joseph Adesanya, head of marketing, PAN Nigeria, at the grand finale of the 2020 Argungu Fishing Festival in Argungu, Kebbi State on Saturday.

L-R: Adebola Williams, CEO, RED| for Africa; Joke Bakare, CEO, Medplus; Vimbai Mutinhitri; guest, host Rubbin’ Minds and Oyemika Adeboya, MD, Cadbury Nigerial plc, at the Rubbin’ Minds special for International Women’s Month in Lagos.

L - R Affi Ibanga, a guest; Global Convener Women Entrepreneurs & Professionals Development Networks. Iyalode Alaba Lawson, programme analyst, United Nations Women; Thea Restovin, and chief executive officer, NextGen Media; Chinny Stevens, during private screening of Chatroom Movie at residence of the deputy British High Commissioner, at Ikoyi to celebrate the International Women’s 2020 in Lagos, on Friday.

Photo: Global Convener Women Entrepreneurs.

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20

Tuesday 17 March 2020

BUSINESS DAY

The ‘student’ of leadership who seeks to inspire his employees The Novartis boss realised he had to radically change his traditional management ideas Sarah Neville

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novative medicines. But, as a self-described “student of leadership”, underlying all his plans is a conviction that “more than anything else, culture drives performance”.

The son and grandson of scientists — his father was a chemist, his mother a nuclear engineer — he had been raised to understand that with privilege comes obligation. “My grandparents [and] my parents came from very modest beginnings in India, some of the first people in their families to go to high school and college.”

Grounded in eastern philosophy while he was growing up in Pittsburgh, Pennsylvania, he had absorbed from the Chinese text Tao Te Ching the notion of “servant leadership”, the idea that “leaders inspire and remove obstacles and that, in some ways, the greatest leaders eventually become invisible in the sense that the people do the work on their own”.

After becoming CEO in February 2018, he had free rein to put his management ideas into practice. Influenced by a book by business leaders Lars Kolind and Jacob Botter, which seemed to him a contemporary reworking of “servant leadership”, he borrowed its title to launch the “unBoss” initiative at Novartis.

To some of his older employees this must have sounded like jargon from the pages of an MBA textbook.

Did he encounter internal resistance?

“A lot. I think the first six to nine months were just spent trying to explain ‘what did it mean?’ for leaders who had led a different way in the company for a long time.” www.businessday.ng

‘‘

One of the lessons I’ve learned is that in this role you have to almost take a 360 [degree] view of situations . . . I think in our industry, you don’t get the benefit of the doubt, which certainly I’ve learned

‘‘

as Narasimhan’s leadership epiphany occurred a little over a decade ago, as he contended with circumstances uncannily similar to today’s coronavirus crisis.

In 2009 Dr Narasimhan, now chief executive of Novartis, was running the drugmaker’s North American vaccines division when swine flu struck the region and he was charged with leading efforts to develop a treatment.

Eagerly expounding a management approach that seems equal parts Eastern philosophy and management primer, he describes how his moment of enlightenment came about.

By chance, he picked up Drive: The Surprising Truth About What Motivates Us by Daniel Pink and had a shaft of insight: leadership “was much more about how do I inspire incredible performance rather than direct incredible performance?”

He rushed to put the new approach into practice. “Mostly because I didn’t feel like I had a choice. We were on what seemed like impossibly tight timelines — I learnt that I could no longer be on top of every detail or take every key decision,” he recalls.

“Up until then, I had very much taken a traditional approach to leadership — be really smart, give your people orders, set objectives, key performance indicators.”

Clad in jeans and trainers, and operating from an open plan office, Dr Narasimhan exudes a cerebral intensity despite the lack of obvious CEO pomp.

Expanding on his vision for the company, he describes using artificial intelligence to improve operations across the business.

This is part of a broader ambition to turn Novartis from a conventional pharma business into a “data science company”, a principal focus since he was appointed, aged just 41, to lead the group where he has worked for more than 15 years.

So, too, has been his determination to slim down what he believes was an over-diversified company, by shedding in short order parts of the business that were not specifically related to its core aim of producing in-

The approach is yielding tangible results, he says. Staff on the manufacturing floor at one of its sites have taken the lead in overhauling processes to drive productivity, while “self-directed” digital teams are mimicking the speed and reactiveness of the tech industry as they develop digital applications.

Arguably his own most public and intense leadership calvary occurred last summer when Novartis had to tell the US Food and Drug Administration that its subsidiary AveXis, a gene therapy company, had manipulated data during early stage testing of a treatment for spinal muscular atrophy.

The medicine, Zolgensma, which appeared to cure the young children treated, was already controversial because of a $2.1m price tag that had made it the most expensive medicine ever produced. Suspected wrongdoing had been identified internally in March, but Novartis told the FDA only in June after it had conducted its own investigation.

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Damaging for any CEO, the discovery threatened particular harm for Dr Narasimhan who had made much of “trust” as a guiding principle for Novartis after taking the helm.

Did he worry that he had undermined his own brand as a strongly ethical leader?

“I certainly worried that we had such great momentum in the whole of [our] transformation strategies, and would this be something that, even in a small way, derailed that?” he recalls.

Among the most damaging accusations was that the company had delayed informing the FDA in part, at least, to avoid jeopardising regulatory approval for Zolgensma. This, he says emphatically, is “not true”. (The approval was unaffected by the data issue.)

However, he seems now to accept that he underestimated how the episode would play out in the court of public opinion at a time of widespread hostility towards the pharma industry.

Would he handle things differently if a similar situation @Businessdayng

arose? “I think we did everything the right way and we did everything according to the rules and the regulations. But seeing how the events transpired in terms of how it was viewed in the public domain, I think you would at least have to consider a different approach,” he concedes.

He adds: “One of the lessons I’ve learned is that in this role you have to almost take a 360 [degree] view of situations . . . I think in our industry, you don’t get the benefit of the doubt, which certainly I’ve learned . . . even as a public health physician who really just does this to try to find medicines and get them to patients all around the world.”

Three questions for Vas Narasimhan Who is your leadership hero?

My grandmother. She came from a small village in India and only received a primary-school education, but with her compassion kindness, and ability to listen, she raised an amazing family of 11 children and touched lives all around the world. She even had obituaries written about her in six cities.

She taught me the impact we leave is through the people we inspire.

If you were not a CEO, what would you be?

A physician-scientist searching for better medicines for the world. I would also still be a dad and husband — the most important titles I hold.

What was the first leadership lesson you learnt?

People are not motivated by carrots and sticks. They are motivated by purpose, autonomy and the opportunity to improve themselves.

Tuesday 17 March 2020

BUSINESS DAY

21

Kathryn Mitchell, Derby university’s vice-chancellor

Derby education leaders train students in practical potential and ‘Midlands grit’ Teaching geared to developing ‘ability to use wide range of career skills’

K

athryn Mitchell can see right across Derby from her desk, and she hopes to make the city feel a little less distant than it has been.

Over the past four years, Derby university’s vice-chancellor has set about making it part of the city’s economic life. She is doing so by recruiting students locally who put their training to work in local businesses.

“Derby university felt a bit remote when I arrived,” says Ms Mitchell. “I wanted to take a much more integrated approach to how we can move the region forward. It shouldn’t be, ‘everyone nips in and out’” of the university, she adds.

A university since 1992, the institution dates to 1851. It had 19,280 students in 2018/19, up 18 per cent over four years, with just under half coming from the East Midlands and 9 per cent from abroad. The university is lo-

cally regarded as having a crucial role as a centre for innovation.

Its courses emphasise practical knowledge over academic theory and focus on “what the employers think, what we think, what innovation might look like in the future and what would be the applied research that might underpin them” says Prof Mitchell. One important subject is automation, she forecasts a third of the region’s jobs will “soon be totally automated”.

However, while the university tries to meet the needs of businesses, Prof Mitchell says they cannot expect it to produce workers able to do a job on day one. This is because “the purpose of a degree is to provide an ability to use a wide range of skills over a career”, rather than train people for a specific job, knowledge that might be out of date in a few years.

Local business has warmed to having a university in its midst that is more of the city than one that breeds a “town and www.businessday.ng

gown” mentality. Longstanding employers such as clockmaker Smith are among those now employing more graduates then previously.

Across town is Derby College, a further education body with 12,500 students, whose work with employers to design and deliver its curriculum was praised in 2016 as “outstanding” by government inspectors. April Hayhurst, deputy principal, says the college has relationships with 3,000 employers, including work placements and appren-

ticeships.

“We constantly have to predict the needs of industry and make sure that our curriculum modelling actually meets those future needs,” she says.

Ian Birtley, sales director of IT group RDS Global, says it takes Derby College students on work placements as IT support engineers, with a view to hiring some as apprentices. RDS is also developing a new product in partnership with the university.

Mr Birtley describes relations with the college as “great, not just

‘‘

We constantly have to predict the needs of industry and make sure that our curriculum modelling actually meets those future needs

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‘‘

Conor Sullivan

@Businessdayng

to give young people an opportunity, but for us as a talent pool”.

Prof Mitchell oversees a body aiming to improve standards in the city’s schools, where underperformance is an important concern. “Our city schools have improved quite dramatically by working in a more collective way and looking at the outcomes for all children in the city,” she says.

At the other end of the spectrum, Repton School offers a noexpense-spared education. Set in picturesque grounds, some of its buildings date back many centuries, while modern facilities include its science building, theatre and sports complex.

Former New Zealand swimming Olympian Scott Talbot joins the school this year to coach pupils.

Headmaster Mark Semmence says the school, where term fees start at £9,100, aims to produce well-rounded young adults, not just with good grades but also some “Midlands grit” and who can thrive in the diverse modern world.

22

Tuesday 17 March 2020

BUSINESS DAY

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

Experts return poor verdict on education Mark Mayah

N

igeria’s educational system is in disarray, according to report of experts commissioned by Federal Education Ministry.

The report, billed for submission to Education Minister, Adamu Adamu before the end of April 2020, States in part that “policy planning is uncoordinated, funding is too meager, man power development is waning, was funded by the World Bank and British overseas Development Administration (ODA).

English Language, Mathematics and science are poorly taught in schools, a result of shortage of relevant text books, libraries are virtually empty and generally stuffed with outdated and costly books and parents are so disenchanted that they now make fishers and traders of their children in place of schooling, the report adds.

Adamu Adamu

Book shortage is so pathetic that the ratio of 50 pupils shares one book unlike in less endowed countries such as Bangladesh and Pakistan where one book is available to one pupil. Tanzania boasts of one book to 15 pupils and even China, which has more than one billion people, provides

one book for one pupil.

The scary scenario of Nigeria’s Primary, Secondary and Tertiary education was painted in a report of experts commissioned by the Federal Ministry of Education and Funded by the World Bank and British overseas Development Administration.

FG fixing 43 internal roads in tertiary institutions - Fashola SIKIRAT SHEHU, Ilorin

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inister of Works and Housing, Babatunde Fashola has disclosed that Federal Government has intervened in the fixing of no fewer than 43 internal roads in tertiary institutions across the country.

The minister stated this in Offa, Kwara State at the commissioning of the rehabilitated 2.23 kilometres road within the Federal Polytechnic, Offa at the weekend.

Fashola says: “to date 18 out of the 43 interventions have been completed and today we hand over this one in Federal Polytechnic, Offa as a critical contribution to support education.”

The Minister, represented

by Wasiu Atitebi, Kwara Federal Controller of Works and Housing, said that with the interventions “We are expressing a renewed enthusiasm with regard to attending classes because some defective roads have been restored to motor ability.

“And the point must be made that although this is a civil works project, it is an investment in education. It is undebatable that quality education will be impacted by the quality of infrastructures and learning environment and those who doubt it should simply listen to some of the

feedback from students in the schools where this type of intervention has taken place.

“During the construction, 41 people were employed in the process, contributing to job creation initiatives of the government, and it is hoped that the school will ensure that this asset is used properly and not abused.

“The gap of infrastructure needs is steadily being bridged by a gradual process of repairs, renewal and construction on major highways and it has reached the schools.”

Earlier, the Rector of the Polytechnic Lateef Olatunji (Dr), hailed the government for the intervention, seeking for more of such interventions.

“We would not cease to modestly request for more of this kind gesture as there are other feeder roads in the polytechnic requiring similar attention.

“This road will be further cherished by the polytechnic community as it has not only added to the physical aesthetics of the school, but has also aided and eased movements to and from the polytechnic.

“More importantly, it has given a psychological relief to the staff of the polytechnic who hitherto experienced excruciating movements on the road because of its former deplorable State,” said Olatunji.

An outline of the study of the book situation in 28 out of the 36 States and Abuja shows that • There is serious under provision of text books in most of the states where less than 10 percent of the students possessed required books in English Language, Mathematics and basic sciences; • Science is not being taught properly in primary schools because teachers lack training in science subjects and parents do not provide their children with required textbooks because science Subjects are not regarded as important.

• There are no library facilities in the primary and junior secondary school system while the libraries in the senior secondary and tertiary institutions are stocked with out-dated reading materials • The inability of the Nigerian Newsprint Manufacturing company, Oku-Iboku, to feed the printing and publishing industry with locally produced newsprint to facilitates mass production of needed text books is also unhelpful;

• Severe lack of relevant and appropriate supplementary materials at primary school level, mainly due to absence of purchasing power on the part of institutions and parents; and • Lack of access to foreign exchange to purchase essential materials from overseas.

Although, Nigeria’s education system has been under a steady decline in the past 10 years, the World Bank report indicated that the situating is fast deteriorating under the present down-turn in Nigeria’s economy.

In Lagos, Anambra, Enugu, Ebonyi, Cross-River, Oyo and Osun States for instance, the report said, the drastic drop in the school enrolment was a result of frequent strikes by teachers as well as parents apathy toward education cause by the present economic hardship and lack of appreciation of the importance of primary school education.

In Rivers, Kogi, Plateau, Kwara and Benue states lack of textbooks and the prohibitive cost of the available ones

have forced parents to divert the attention of their children to the farms and markets as bread winners.

In Kano, Akwa Ibom, Katsina, Kaduna, Taraba and Sokoto states recorded highest numbers of out of school primary pupils. Children are withdrawn from schools during farming and harvesting seasons to assist their parents on farms.

The reports described the entire North East as a “sorry situation due to the activities of Boko Haram insurgents”, as most school age pupils are out of school.

“The nation seems to be heading for breeding generation of illiterates resulting from the current insecurity, starvation of text books, appropriate reading materials, libraries, infrastructure etc, the”, the experts said.

Although, government officials blame the situation on lack of fund, but the experts showed that with proper planning, Nigeria could boost its present level of availability and distribution of text books.

Let excellence be your focus, FUTA VC urges 3, 200 new students Mark Mayah

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ice-Chancellor, Federal University of Technology, Akure (FUTA), Joseph Fuwape (prof), has urged newly matriculated students to make use of every possible opportunity available in the course of their academic sojourn to make things happen and break new grounds in research and innovation as part of their contributions to national development.

He stated this during the 37th Matriculation ceremony for the no fewer than 3,200 students admitted into the university for the 2019/2020

academic session.

The vice chancellor said the university has enough resources and facilities to help the student’s achieve their laudable dreams.“When it comes to the future, there are three kinds of people, those who let things happen, those who make things happen and those who wonder how things happened. I challenge you to position yourself for success, your own reality and be committed to your dream. Position yourself for excellence, your success is guaranteed as you study hard and stay focused”. He said.

Fuwape reiterated FUTA’s Zero tolerance to all acts inimical to peace on campus especially thuggery, disruptive, fake post on social media, vandal-

ism, stealing, academic fraud, hooliganism and cultism.

He announced that the university management would not hesitate to deal with recalcitrant offenders within the ambit of the university regulation.

He therefore urged the fresh students to imbibe the ethics of hard work, moderation and discipline in order to achieve academic excellence.

He implored the students to dress according to socially acceptable standards that install a sense of integrity and appreciation of values and ethics as stipulated in the university dress code. “Students should have respect for human dignity and learn how to relate with other people in a decent and acceptable manner.

Provost charges new students to shun violence, misconduct Mark Mayah

T Babatunde Fashola www.businessday.ng

he provost, Federal College of Education (Technical) Akoka, L a g o s, Ad e m o l a Azeez Dr. has advised the newly admitted students to combine both academic and moral excellence during years of studentship in the college.

He warned the students to desist from any form of examination misconduct, admission

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fraud, certificate forgery, cultism, fighting, theft, extortion, rape and illicit drug dealings among others.

The provost, while administering oath on the new students enjoined them to attend lectures regularly and punctuality, as their success will be measured by the result of the academic work.

Aside he encouraged the new students to engage in sporting activities and join for leisure and good mental devel@Businessdayng

opment rather than engaging in secret society, unregistered clubs and hooliganism so that their goals and expectation will not be cut short.

‘I appeal to you to reciprocate the good gesture of the college by working diligently in order to contribute your quota to the development of our country. This is an academic environment with its unique norms and values, you are expected to familiarize yourselves with them, he added.

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EDUCATION Going to school in Nigeria may leave students stranded in 5G world STEPHEN ONYEKWELU

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rom electricity to internet-based lifestyles, the world is changing at a dizzying pace and Nigeria comes across as unprepared to take advantage of the opportunities that come with deep technology-driven societal transformations.

One sign that Nigeria is wobbling through these fastpaced changes is in the state of its educational sector, which determines the quality of the country’s human capital stock.

In a world where countries battle to deploy and exploit 5G networks. This is the fifth-generation wireless technology for digital cellular networks that began wide deployment in 2019, which is set to enhance new levels of innovations.

Many Federal universities in Nigeria are yet to reap the benefits that came with the application of electricity since the 1900s. They lack electric sockets in lecture halls and

Masters Students are still compelled to produce handwritten research works. A practice that is unimaginable among the country’s peers in Asia and Europe where students are registering patents for artificial intelligence.

With a labour market that has become both global and borderless this means that Nigerian students are failing to acquire the required skillsets needed to compete with peers from more advanced economies in a fast-changing world.

Additionally, half of the white and blue-collar jobs that exist today will be automated away

and the jobs of the future may elude these Nigerian students.

“Nigerian universities at this point are struggling to modernise and equip their computer science laboratories. Some of the universities are still not able to introduce and use basic technology in the classroom,” said Terae Onyeje, managing director, Wowbii Limited a technology company that produces interactive board and classroom teleconference facilities.

In the race for innovation in technologies including artificial intelligence and 5G networks, Universities from

China, Korea and Taiwan are registering more patents than even their US peers in wireless communications but Nigerian computer science faculties are still looking for funds to buy computers.

Emmanuel Mkporjiogu, head of department computer science, Veritas University, Abuja said curriculum is a big problem as old computer science professors regard artificial intelligence as a component of computer science.

“Artificial intelligence comprises natural language, voice and text processing. It also includes robotics, machine learning and big data analytics. These things are not taught in our universities,” Mkporjiogu said.

To prepare for the future, in China primary and secondary schools teach AI courses in classrooms and technology like Squirrel. AI is building personalised learning platforms with AI. But many public secondary school students in Nigeria still stare at laptops with a sense of wonder.

Nigeria has ranked poorly on the World Economic Forum’s Human Capital Index, a measure of the extent to which countries and economies optimise human capital through education, skills development and deployment throughout the life-course.

Although on the average, sub-Saharan Africa presently captures 55 percent of its full human capital potential compared to the global average of 65 percent, many African peers have left Nigeria behind. Mauritius, Ghana and South Africa fall with within 67 – 63percent range but Nigeria joined Mali and Chad in occupying the 49 to 44 percent range, below the sub-Saharan Africa average.

Based on another of WEF’s reports, ‘The Future of Jobs and Skills in Africa’ there are four core strategic focus areas Nigeria needs prioritise at this point including: “ensuring the ‘future-readiness’ of curricula, especially through a focus on Science Technology Engineering and Mathematics (STEM)

fields. Investing in digital fluency and ICT literacy skills is another critical area.

Providing solid, respected technical and vocational education and training (TVET) and creating a culture of lifelong learning, including the provision of adult training and upskilling infrastructure are all necessary components Nigeria needs to factor into a Grand National strategic plan for human capital development.

No Nigerian university has a patent in any of the latest technologies. The most some Nigerian universities have done is set up discussion groups pretending to be hubs or mention AI in passing at an introduction to computer classes.

“The National Universities Commission needs to invite professionals who understand current AI trends to review the curriculum. Some older professors of computer science still see it as an arm of mathematics but this has to change,” Mkporjiogu said.

Stakeholders call for more public libraries as foundation donates books to over 400 students Desmond Okon

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takeholders have called on governments, both at the Local, state and federal level, to establish more libraries in order to revive the dwindling culture of reading and facilitate easy access to books.

The charge was made at the second edition of World Book Day celebration organised

by Leadout Education Foundation (LOUTEF) in Lagos, sponsored by Nosak Group, MTN Nigeria, FIPs Multilinks, and others.

Speaking at the occasion, Emmanuel Okoro, founder of Booktent Resources, described the lack of public libraries, which results in poor

access to books, as one of the dilemmas of Nigeria’s education system.

He said there were still children who are struggling to have access to books.

“I took a survey from LekkiRoundabout to Ekpe, we have only two libraries that I could locate and one of them has been refurbished and changed to a LASRRA office. The other library is at Ekpe. Now if you want people to read and there are no libraries, no functional book clubs, how would the people read?

“That for me is the message I’ll to pass out this day, that we should try and make access to books easy,” he told our correspondent.

The event brought over 400 students from two schools— King Ado and Isale Eko sec-

ondary schools—both in Lagos Island, to learn the benefits of reading through the theme: Reading for Value Creation and Transformation.

They organisers said the global event is significant because observation shows that the country is losing the value for reading and the celebration of the annual event presents an opportunity to have solution-based dialogues.

According to them the event was a reminder to the children, adults and everyone that “there is need to read because knowledge, wisdom are all hidden in books of value which we all know and we read some of them.”

Re p re s e nt i ng No s a K Group, Kenneth Adejumoh, Corporate communications manager, Nosak Group urged

Irene Udosen, founder, LOUTEF; and Adejumoh, Corporate communications manager, Nosak Group with students at the World Book Day celebration. www.businessday.ng

the students to look beyond the event and be closer to their books than other frivolous engagement in the society “because there is value in books. Any child who wants to succeed must be close to the books.”

He adds: “We need to revamp our library system, the government should go back to the system of having libraries, even in schools, there should be deliberate efforts for students to go there and consult books in their areas of passion, interest and area of study.”

Apart from the donation of books, the core objective of the foundation—spurring students back to academic responsibility—was demonstrated through a reading session. There was also a movie screening which focused on academic excellence, all in a bid to instil the culture of reading.

Irene Udosen, founder, LOUTEF had explained that everything about this year’s celebration, especially the theme, was to help students find a connection between their present and future aspirations and give them a purpose to read.

“Undeniably, there is a dwindling reading culture.

It’s our passion to see qualitative and knowledge-driven education against paper qualification-driven education, as we raise competent and productive individuals in our society and Africa at large,” Udosen said.

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Tunji Disu, deputy commissioner of police, commander Rapid Response Squad painting with Slum Art beneficiaries to mark #MyFreedomDay at Ijora Badia, Lagos

Slum Art drives mindset transformation, marks #MyFreedomDay with paint exhibition STEPHEN ONYEKWELU

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lum Art has marked #MyFreedomDay and created a niche that uses art to help children and young adults living in slums develop creative abilities through painting and other art forms. #MyFreedomDay is part of a global campaign against modern slavery championed by the international cable network titan CNN. The event is celebrated across six continents and 100 countries and over the years it has seen the participation of students globally through creative expressions calling for an end to all forms of modern slavery.

In Nigeria Slum Art Foundation, a Corporate Social Responsibility capacity building project marked the day with the theme #Paintingwiththegoodguys. Through mentoring and experiential learning methods the foundation seeks to develop the creative talents @Businessdayng

of children living within slums and held an exhibition and painting session with the kids in the slum to commemorate #MyFreedomDay in Ijora Badia, Lagos.

“At Slum Art foundation, we are able to provide an enabling learning environment and platform for children in the slum to acquire skills in art, thereby taking them off the streets after school and empowering them to be more useful members of our society,” Adetunwase Adenle, co-founder of the Foundation and four-time Guinness World Record holder said at event.

Tunji Disu, commander of Rapid Response Squad (RRS) DCP and his team were delighted to see various art works done by the excited children as they collaborated in painting various art works to mark the globally celebrated day. He also encouraged other donors and Nigerians to positively input their quota in making the society a safe and better place for everyone.

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BDTECH

In association with

E-mail: jumoke.akiyode@businessdayonline.com

‘Organisations should test for vulnerability often to reduce spending on cyber attacks’ Jumoke Akiyode-Lawanson

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n an ever changing and highly digitalised marketspace, the need to have digital assets protected becomes more imperative. Countries and business organisations have lost a lot of money due to cyber breaches lately - Nigeria inclusive. Having this in mind, Tanta Innovative Limited, an indigenous information technology (IT) and software development firm based in Lagos has encouraged firms in the country to invest into cyber security solutions with emphasis on penetration testing for Nigerian firms in order to limit their exposure and security breaches.

Over $270.22 million was spent in 2018 to prevent cyber attacks by organisations and government in 2018. This prompted Tanta Innovation Limited to introduce cost effective penetration testing for organisations.

Speaking on the importance of penetration testing for organisations, Abraham Tanta, the chief executive officer of Tanta Innovative Limited said, “We strongly believe at Tanta Innovative that penetration testing for organisations in Nigeria should be a thing that corporates do on a periodic basis. It offers the organisation insights on the areas

of vulnerabilities and how they can protect themselves better against cyber breaches. We have made this pen testing a simple process and cost effective.”

“The importance of penetration and vulnerability testing is critical to us. We follow the laid down pro-

cesses of penetration testing such as planning and data gathering, scanning, gaining access, maintaining access and more importantly covering tracks. We also look at various methods which we might deploy such as external testing, internal testing, blind testing and tar-

geted testing. We apply a high level of skill to properly identify all of the exploitable vulnerabilities,”Tanta said.

As the country has embraced digital payment, the need for periodic testing for organisations with online presence especially those

with digital payment portals and gateway has become increasingly inevitable. Having partnered with reputable international firms, Tanta Innovative plans to bring the best global practices to Nigeria.

The company reiterated the need for Nigerians (Corporates and privates) to start looking inward for their software needs. Known to have developed robust software solutions for firms, Tanta Innovative Limited has promised Nigerians a bouquet of IT solutions to meet their specific needs. Solutions such as eHealth software, School Management Software and also ERPs that are bespoke. With a robust after sales in place, the company said that patronising locally developed software would encourage the IT ecosystem and save the much-needed foreign exchange for other developmental projects.

“We are creating solutions that can change how people work and make life easier. With a lot of collaboration in place, we have a mission to bring to the fore indigenous robust solutions that would make people forget about all these foreign products and focus on locally made ones because we are trying to solve their problems better than the other ones they buy over the counter,” Abraham Tanta said.

Airtel further crashes data tariffs for customers Jumoke Akiyode Lawanson

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ollowing BusinessDay’s exclusive story on the ongoing data price war between telecommunication service providers in Nigeria who are fiercely competing for market share in internet data service provision, identified as the future revenue booster, Airtel Nigeria has further driven down its prices for internet data bundles.

A few days after the published story, Airtel, Nigeria’s third largest mobile network operator with 49.9 million subscribers, announced that it has dropped data bundle tariff under its revised tariff plans, and is now offering customers 15GB for N5,000 on its monthly bundle and 6GB for N1,500 on its weekly bundle.

Airtel further said it plans to continue on this path of affordability and quality internet to ensure more Nigerians enjoy the benefits of its

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superior 4G Data Network.

Speaking on the telco’s commitment to drive affordable mobile broadband in line with the plans of the federal government of Nigeria, Dinesh Balsingh, chief commercial officer, Airtel Nigeria, said the company strongly believes in the Government’s drive of democratizing broadband, extending quality mobile internet services to the remotest location in the country as well as ensuring that Nigerians regardless

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of income level can afford data/mobile Internet services.

He also said that prevailing consumer trend indicates a growing demand for data/mobile internet and Airtel is well positioned to take the lead in providing the right value offerings as it currently has the largest 4G network in the country.

“As the preferred mobile internet services provider, Airtel is committed to offering superior value to telecoms consumers across the country

@Businessdayng

and our newly revamped data plans is a testament to our commitment to empower our customers. With these new data plans, our customers now have higher data allowance to do much more and get more out of life; to succeed, to become more productive and to do so much more” he said.

Balsingh said that to activate the Airtel data plans, customers are advised to dial *141#. The data plans are available to all prepaid and postpaid customers on the Airtel network.

Tuesday 17 March 2020

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E-mail: jumoke.akiyode@businessdayonline.com

Why Facebook removed several Nigerian and Ghanaian pages Jumoke Akiyode-Lawanson

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ast week Thursday, there was a network takedown of Instagram, Facebook and other internet platforms belonging to users in Nigeria and Ghana.

Facebook said it removed a network of 49 Facebook accounts, 69 pages and 85 Instagram accounts for engaging in foreign interference — which is coordinated inauthentic behavior on behalf of a foreign actor. According to Facebook, this network was in the early stages of building an audience and was operated by local nationals — some wittingly and some unwittingly — in Ghana and Nigeria on behalf of individuals in Russia. It targeted primarily the United States.

Nathaniel Gleicher, head of security policy, Facebook said that “the people behind this network engaged in a number of deceptive tactics, including the use of fake accounts — some of which had already been disabled by our automated systems — to manage pages posing as non-government organisations or personal blogs, and post in groups.

They frequently posted about US news and at-

tempted to grow their audience by focusing on topics like black history, black excellence and fashion, celebrity gossip, news and events related to famous Americans like historical figures and celebrities, and LGBTQ issues. This activity did not appear to focus

on elections, or promote or denigrate political candidates. They also shared content about oppression and injustice, including police brutality. Although the people behind this activity attempted to conceal their purpose and coordination, our investigation found

links to EBLA, an NGO in Ghana, and individuals associated with past activity by the Russian Internet Research Agency (IRA).”

“We detected this network as a result of our internal investigation into suspected coordinated inauthentic behavior ahead of

US elections. The network was linked to the activity we had previously removed and attributed to the IRA in April 2018, July 2018 and November 2018. Our assessment benefited from our subsequent collaboration with a team of journalists at CNN. We’ve shared information with our industry peers, policy makers and law enforcement and will continue working with others to find and remove this kind of behavior from our platform,” he said.

Facebook revealed that about 13,500 accounts followed one or more of these dubious pages and around 265,000 people followed one or more of these Instagram accounts (about 65 percent of which were in the US).

As for advertising, less than $5 was spent on ads focused on people in the US, none of which were political or issue ads. Facebook’s systems repeatedly rejected attempts by this network to run issue or political ads in the US because the people behind it were not authorised to run political ads in the US. In total, Facebook identified approximately $379 in spending for ads on Facebook and Instagram paid for in US dollars, the

majority of which were run before this operation began by people who wittingly or unwittingly joined this network in the second half of 2019.

“We’re constantly working to detect and stop this type of activity because we don’t want our services to be used to manipulate people. We’re taking down these pages and accounts because this activity was linked to individuals associated with the IRA, an entity we had previously banned from Facebook, they also used fake accounts and coordinated with one another and to mislead people about what they were doing. That behavior was the basis for our action, not the content they posted.

In addition to announcing this enforcement action today, it will also be included in our monthly CIB report for March 2020,” Gleicher said.

“We are making progress rooting out this abuse, but as we’ve said before, it’s an ongoing challenge. We’re committed to continually improving to stay ahead.

That means building better technology, hiring more people and working more closely with law enforcement, security experts and other companies,” he said.

Firm launches uLesson learning app for African students

…Provides analytics, data reporting to monitor academic growth Jumoke Akiyode-Lawanson

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igeria’s Ed-tech startup, uLesson Education Limited has officially launched the uLesson app. The app offers students in Nigeria (SS13), Ghana (SHS1-3), Liberia (Grade 10-12), Sierra Leone (S1-3), and Gambia (S1-3) a holistic curriculum-relevant learning experience in Mathematics, Physics, Chemistry and Biology preparing them for critical regional examsWASSCE, SSCE, GCE and UTME as well as international tests like the SATs. uLesson employs a simple and personalised approach to learning, leveraging quality lesson plans from the best tutors to amplify each student’s learning ability. Thus, encouraging deep and continued

learning for students.

The learning content from the app is planned, executed and reviewed by subject matter experts using videos, interactive animations, quizzes, assessments and several years of official WAEC past examinations along with solutions.

Commenting on the app, Sim Shagaya, founder and CEO of uLesson Education Limited, said, “Learning is a crucial part of a child’s quest for academic excellence and success in life. The kind of universities and other tertiary institutions that they get into and, to some degree, the future that awaits them beyond their school years is largely determined by the learning opportunities and platforms available to them in their secondary school years. It is imperative then that investments www.businessday.ng

are made in education that will help students be the best they can be, and in learning platforms that prepare them for a future in various disciplines and subjects, thus making them citizens for the world of tomorrow. It is with this knowledge that we designed the uLesson App; to particularly meet the needs of African students at the secondary school level and at all levels in the future.”

Also speaking on the App, Al-hassan Yusuf Junior vice president, marketing and analytics uLesson, said the App has been built to help students learn and maximise their academic potential. “uLesson is the first of its kind in Africa. We have leveraged technology to provide a learning solution that is of high-quality, affordable and accessible.

Our team of passionate and talented people have built a learning experience that is unprecedented in richness, scope, interactivity, and effectiveness. Our personalised learning approach, the depth of our content, and our service which allows users to request free counselor visits from uLesson set us apart.

We also go a step further to provide analytics and data reporting for parents and guardians to monitor their child’s academic growth and guide them to optimise their learning experience,” he said. uLesson is creating a platform to revolutionise the way students learn and study for their exams.

While only four subjects are available now, the brand promises to include other subjects as well as expand to other regions in Africa.

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Seamfix donates ICT materials, others to impact children

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n a bid to improve the overall quality of education and skills of the less privileged in the country, Seamfix, leading provider of identity management solutions has donated educational items like laptops, exercise books, pens, pencils and internet to the children of Bethesda Child Support.

Its 2020 corporate social responsibility (CSR) initiative is themed: Seamfix Making an Impact.

According to Chimezie Emewulu, the managing director, Seamfix, “Community development is at the heart of our business which is what we seek to do every day; inspiring and investing in future leaders of tomorrow.” @Businessdayng

“We initiated this gesture to put smiles on the faces of the school children, staff, entire management with the gifted items and our cheerful presence. Seamfix assures you that it is not the end of her quest to make an impact and invest bountifully in the future generation,” he said.

Ijeoma Nwachukwu, the program director extended her appreciation to Seamfix for the generous gifts donated to the children of Bethesda Child Support and staff who received them with so much joy and gladness. She went further to commend the commitment to making a difference and helping the underprivileged children secure a better future through education.

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property&lifestyle Why over 40m working class Nigerians can’t access mortgage even at single digit rate CHUKA UROKO

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n unchanging principle of mortgage is that a loan seeker must be gainfully employed with regular income flow. But market realities show that gainful employment and regular flow of income are not always enough because some incomes are too low to sustain a mortgage loan.

In Nigeria, people whose income is below N1.2 million per annum are classified as low income earners.

National minimum wage in the country today stands at N30,000 per month. That wage cannot, in a strict sense, be called national because many states of the federation are unable to pay.

This means that all civil servants who earn minimum wage are automatically excluded from mortgage loan even if the interest rate is as low as 6 percent which is the lowest interest rate only offered in the country by the National Housing Fund (NHF).

Based on the terms of mortgage structuring which requires repayment of not less than one third or 33.3 percent of a monthly income, borrower on N30,000 per month has to deduct approximately N10,000 for loan repayment, and a monthly payment of this sum for 30 years, as required by law, will mean that the prospective home owner

will contribute only N3 million for the 30-year period.

However, apart from the fact that there is no decent accommodation for N3 million in a good location, there is also no 30-year mortgage available for loan applicants. Besides, given that minimum wage remains N18,000 for some workers, 33.3 percent of N18, 000 will be N5, 994 and a monthly payment of this sum over 30 years period will amount to only N2.15 million.

“Many households cannot own homes through mortgage because, given their low per capita income, they won’t qualify for mortgage,” confirms Adeniyi Akinlusi, CEO, Trustbond Mortgages.

Mortgage deficit, he notes, stands at N49.05 tril-

lion and out of a population of 180 million people, with 30 percent representing the 44.4 million working class, the mortgage-able adults are only 19.9 million, representing 45 percent of the total population.

This is why mortgage experts insist that job creation is critical to ease homeownership They maintain that government and private sector developers could build all the affordable or social housing they want to build, but people have to have jobs to be able to buy either cash or through mortgage.

Nigeria is one the world’s most expensive housing markets where the cost of renting a three-bedroom apartment ranges from N15 million to N20 million per

annum in highbrow areas like Victoria Island and Ikoyi in Lagos; Asokoro, Maitama in Abuja; GRA phase 2 in Port Harcourt or Trans Amadi also in Port Harcourt, among other areas in Nigeria.

The country’s latest effort at improving access to housing finance was the establishment of the Nigerian Mortgage Refinance Company (NMRC) which is aimed to provide liquidity in the mortgage system by raising money from the capital market and using same to refinance primary mortgage banks for on-lending to loan applicants. But, four years down the line, the company is still struggling.

A report on The Lagos Housing Market by Pison Housing Company notes

that a mortgage period of 30 years and a housing unit of N2.15 million are hardly available, and this amount excludes interest rate on the mortgage facility. Consequently, even the middle income earners struggle to have access to affordable housing.

The report notes further that Nigeria is faced with a multi-dimensional housing problems stemming from poor planning. It recalls that many initiatives have been launched in the past which did not translate to visible results.

“The country is fraught with abandoned low cost housing projects, inadequate funding, regulatory bottlenecks, lack of focus on residential housing development and unsupportive finance mechanisms,” the report says, pointing out that in most developed countries, affordable housing at different income levels is achieved through assistance from government through planning incentives, tax credit, land provision, infrastructural support and required building approval concessions.

The bane of mortgage access in Nigeria is high interest rate which ranges from 18 percent to 27 percent and this is one of the major reasons for the low homeownership level in the country whose housing deficit is in excess of 20 million units.

Roland Igbinoba, Vice Chairman, Roland Igbinoba

Real Foundation for Housing and Urban Development (RIRFHUD), laments that, though Lagos currently has the most vibrant property market in Nigeria, home ownership level is still at less than 20 percent.

“With a daily intake of 3,000 immigrants, the housing supply has failed to keep up with rapid urbanization and population expansion, especially in the low income market. The housing demand estimate in Lagos is roughly 4.4 million units while the estimated current supply in the state is 1,417,588 units”, he reveals.

“This leaves a gap between demand and supply at roughly 3 million units; output is relatively low although there has been increased participation in housing projects from both the government and private sector,” he noted The extent of housing shortage in Lagos is enormous and the deficit is both quantitative and qualitative, such that 72 percent of Lagos residents are tenants paying rent as high as 50 percent of their monthly income while most of the existing accommodations are provided by private landlords.

On the qualitative housing deficit side, most low income earners live in congested settlements usually characterized by buildings with structural defects, bad roads, poor drainages and pollution, posing health hazards for the inhabitants.

Here’s what experts say Nigerians should do to grow economy, inspire foreign investor-confidence CHUKA UROKO

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f the economy is not growing and investment is not happening at expected level in Nigeria despite its huge potential, it means that either the environment is not right or the right actions are not being taken, or both.

One sector of the economy where this slow growth of the economy is well reflected is real estate. With a housing

deficit estimated at 20 million units, about 25 percent home-ownership level and a very active rental market, investment interest in the sector remains low.

When, therefore, experts and sundry stakeholders gathered recently for the annual Real Estate Investors Series (REIS) in Lagos, the focus was on the state of the real estate market and what could be done to inspire investor-confidence in the economy and, by extension,

in the sector.

Among other things, the experts were of the view that the surest and easiest way to grow the economy is to invest in the economy and this investment has to come from local investors.

“Nigerians need to invest in Nigeria to grow the economy and to inspire confidence in foreigners,” said Andrew Nevin, Partner at West Africa Financial Services, and Leader/Chief Economist at PricewaterCoopers (PwC).

A cross section of participants at the Real Estate Investor Series 2020 www.businessday.ng

Nervin whose view was contained in his keynote speech at the REIS event explained that “international investors would not invest in Nigeria unless Nigerians start investing in Nigeria.”

REIS is an annual real estate event organized in Lagos

by Fine & Country West Africa International, one of Nigeria’s leading marketing, advisory and consultancy firm, to draw attention to identified real estate market problems.

The series is reputed for high level conversations and this year’s edition, which was well attended by business leaders and investors, was staged in collaboration with PwC and Udo Udoma & BeloOsagie as knowledge partners.

It took a multi-dimensional approach to point smart investors to strategic opportunities in the market as well as guide them through efficient visioning, planning, and management of their investments.

The series also addressed the current state of the real estate market, regulatory updates, challenges, opportunities, new growth areas and the focus for the year 2020

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with contributions and perspectives by experts from marketing, legal, taxation, and finance.

Udo Okonjo, CEO/Chairperson, Fine and Country West Africa, disclosed that event was also aimed to lay the roadmap to develop a strategic framework to enable investors and professionals create new strategies, fill in the gap and address the areas that have not worked.

As part of approaches to inspiring investor confidence in the economy, the experts offered insights into structuring real estate deals and the strategies for ensuring optimal returns for every real estate project.

In her keynote speech on ‘Inspiring Investor Confidence’, Okonjo called attention to the nature of the Nigerian market which, in her view, comes in cycles and for each cycle there is a right strategy to adopt.

Lolade Ososami, Partner at Udo Udoma & Bello-Osagie, along with other experts at the event including Obi Nwogugu, principal partner at African Capital Alliance, and @Businessdayng

Olawale Opayinka, CEO, Eko Development, highlighted the factors that define the Nigerian real estate market.

These factors which should guide a potential investor are the financial risks, changes in taxation policies, the objectives of the investor in a changing market, the role of government and policy making in land and urban regulations, and the need for innovation in the real estate sector.

The highpoint of the day’s event was the unveiling of ‘The Nigerian Real Estate Market Report’, an insightful report compiled by Fine and Country with contribution from PwC and Udo Udoma & Belo-Osagie.

The Report reviews the economy and the opportunities it offers. It gives an in-depth review/study of the residential real estate market; dead capital and its effect on asset classes; in-depth review/ study of the commercial real estate market; land registry reforms that facilitate development in Nigeria, and Blockchain technology as a viable regulatory tool for land reform.

Tuesday 17 March 2020

BUSINESS DAY

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property&lifestyle Nigeria’s real estate market at risk as falling oil price shows 2016 trend ENDURANCE OKAFOR

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hile Nigeria’s real estate sector recorded the fastest growth in three years at -2.36 percent in 2019, the market may be at risk of the falling oil price and hence the growth expectation may be cut short.

Despite ending 2019 in contraction mode, the growth reported by the property sector last year was 4.5 points better than the -6.86 percent recorded in the comparable period of 2016, as compiled from data by the National Bureau of Statistics (NBS).

But the recent oil price shock due to the coronavirus outbreak may drive the property sector which is in need of an estimated N200 trillion back to its 2016 contraction mood, analysis by BusinessDay shows.

History has shown that prolonged periods of depressed oil prices does not only push the Nigerian economy to the south but also affect the country’s real estate market.

Oil plunged as low as $30 per barrel last week Monday shedding about 31 percent after the coronavirus outbreak tested the strength of OPEC+ alliance, prompting fears that Nigeria could be set to repeat 2016.

Before the coronavirus outbreak which has now led to a falling crude price, industry analysts projected Nigeria’s real estate sector to grow at

2.65 percent in 2020 while the industry sub-sectors were also expected to stabilize but the growth performance of the property market is now in limbo.

“The Nigeria real estate industry as a whole is stabilizing and it has the potential to fully stabilize and report growth in 2020, and this is because it is recovering from the effect of the recession,” Ayo Ibaru, COO /Director at Northcourt said.

Prior to the commodity price crisis of 2015/2016 that saw oil prices go below $30 in early 2016, the largest corporate occupier and demand driver for luxury residential property came from the oil industry. This changed significantly and led an even greater amount of vacancies in an already saturated market.

“Nigeria’s real estate trajectory has risen and fallen with international oil markets,” Oxford Business Group said.

According to Broll Nigeria, Oil & Gas and Tech industries championed the bulk of the grade-A office transaction that led to the record of the largest take-up in 5years at 20,100 square metres in 2019.

For the first time since 2014, Nigeria’s grade-A office reported the largest takeup on the back of increased demand from Tech and Oil & Gas industries, data from Nigeria’s Office Market Viewpoint H2:2019 by Broll Nigeria shows.

“The bulk of concluded transactions were driven by

the tech and oil & gas industries,” Broll Nigeria said.

While industry analysts projected a low vacancy rate for commercial real estate market in 2020, the falling oil price may cut short the expectation as Oil & Gas companies are known for occupying the grade A office for example and are likely to be hit the most from a drop in crude price.

According to Andrew S. Nevin, Partner - West Africa Financial Services Leader and Chief Economist, PwC real estate is the most important sector to create jobs and alleviate unemployment.

“No other sector can have the multiplier effect of real estate and no other sector can compensate if real estate languishes,” Nevin said.

With homeownership rate at 25 percent, one of the lowest compared to Indonesia’s 84 percent, 75 percent in Kenya and 56 percent in South Africa, Nigeria’s residential real estate was projected to ride on the surge in the demand for smaller apartments like 1-bed and 2-bed flats to report growth in 2019, as compiled from an industry survey.

Professionals, 60 percent of whom are within their first 3 years of employment, and the high rate of urbanization are key factors expected to catalyze the growth.

But with the risk of economic downturn and the fear of a possible naira devaluation, Nigeria’s low-income earners whose purchasing power is yet to recover from

2016 recession may not be able to afford the products that may be available in the market.

“If 2016 repeats itself, and there is naira devaluation and the dollar becomes scarce, it will affect real estate products because developers still import most of their materials,” a real estate analyst who asked not be identified said.

Real estate properties in most Nigerian cities recorded a high vacancy rate in 2016 amid recession and currency devaluation.

According to data by Northcourt, the average vacancy rate for residential property in Abuja stood at 25.67 percent; Port Harcourt at 12.02percent; while Lagos recorded the highest of the three with a figure of 31.46 percent. Oniru, Victoria Island, Lekki Phase 1, and Ikoyi respectively had 64.8percent, 53.5percent, 46.7percent and 45.6percent vacancy rates in the review year.

An economic downturn from falling crude price and naira devaluation would mean that developers will spend more on construction due to weaker currency and a higher cost of acquisition for home buyers, industry experts explained.

Battered by the global drop in crude price to $50 per barrel from around $100 two year earlier, Nigeria devalued its naira in 2016, and from a peg of N197/$ before the devaluation, the naira lost its grip against the dollar as it traded at N500/$ fueled by the excess

demand from Nigerians who were in search for dollar to meet their personal, business travel, importation, medical, and school fees needs.

With two currency devaluation under his belt, the Central Bank Governor, Godwin Emefiele is prepared to fight off naira depreciation even though it may be doing that at a high cost.

Nigeria’s Central Bank said it has not and will not devalue the naira which has come under immense pressure as people mop up dollars amid concerns that the impact of the ravaging coronavirus coupled with crashed oil prices on the local currency could get worse.

The naira took another sharp hit on Thursday as money changers traded the local currency at N410 against the dollar at the black market.

“The size of Nigeria’s foreign exchange reserves remains robust and comfortable, given the current realities of Nigeria’s genuine and legitimate FX demand, as such, the CBN remains able and willing to meet all genuine demand for foreign exchange for legitimate transactions,” the apex bank said.

Analysts at EFG Hermes however, posited that the apex bank could be forced to devalue the naira later in this year.

“A self-driven devaluation would be a precedent in Frontier markets, as usually central banks are forced to devalue rather than seek it,” they said.

Opportunity to own homes underway as construction begins on Kara Residence CHUKA UROKO

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or young Nigerians aspiring to own homes, opportunity to do so is here as Uraga Real Estate Limited, a member of the Honeywell Group, has commenced the construction of its new development known as Kara Residence.

The new development, located in Osborne Phase One in Ikoyi, Lagos, is a luxury residential facility offering spacious apartments well finished with a welcoming and tranquil ambience.

According to its promoters, the luxury development also offers a unique living experience by providing a suite of vibrant spaces and luxurious leisure facilities including a swimming pool, gymnasium and a private garden.

“One of the major ideas that triggered the development of the Kara Residence is the urge to create a serene space that will capture the real essence and spirit of

family living with its elegantly crafted and timeless design, “ explained Moyo Ogunseinde, Executive Director, Uraga Real Estate Limited.

Ogunseinde explained

further that “the company’s expertise in design, planning and execution has been utilized to deliver unique lifestyle products to its clients across the major real estate sectors in Nige-

ria, ranging from hospitality to residential.

He disclosed that the company had been enjoying rapid growth which, he said, was reflected in their growing workforce

L-R: Kunle Fashogbon, director, Property and Facilities Management, Uraga Real Estate Limited; Juliana Esezobor, Head, Group Human Resources and Administration, Honeywell Group; Yemisi Busari, Senior Advisor, Special Duties, Honeywell Group; Moyo Ogunseinde, Executive Director, Uraga Real Estate Limited, and Seun Akinyemi, Team Lead, Risk and Internal Control, Honeywell Group, at the groundbreaking event of the Kara Residence, Ikoyi, Lagos recently. www.businessday.ng

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and quality project delivery in and around Lagos and its environs.

Over the last 10 years, Uraga Real Estate, as a real estate company committed to creating long-lasting communities by providing creative and sustainable solutions, has created and reinvented some of the most recognizable buildings in Nigeria.

The company, which has a long-term commitment to Africa and is known for its design-led philosophy and creative approach to development and sustainability goals, has delivered over 39, 000 square meters and $38.7 million of end value development.

Authorities of the company reveal that, every day, “Uraga brings people together to work for a prosperous future- sharing in a collective wisdom and business acumen of multiple project partners, leading to the development and management of valuable spaces, increasing the wealth and well-being of Africa and beyond.” @Businessdayng

Developer gives reasons Agbara Estate is new destination for residential, commercial property CHUKA UROKO

D

evelopment of new, and improvement in available critical infrastructure and other top-notch amenities are some of the reasons Agbara Estate is the new destination for people looking for residential or commercial property, the developer and the estate promoters have said.

The Estate, which sits about 31 kilometres from Lagos and within 32kilometres of Nigeria’s border with Republic of Benin with easy access to all parts of Nigeria, was developed by a company called Agbara Estates Limited which was launched over 40 years ago.

The company is today one of Nigeria’s oldest real estate companies and its main asset, the Agbara Estate, is Nigeria’s pioneer mixed use industrial, commercial and residential real-estate development.

The estate is already host to around 40 operational factories, including international conglomerates such as Unilever, Nestle, Reckitt Benckiser and GlaxoSmithkline, and local companies like Beta Glass and Pharma-Deko.

A major part of the reasons for being new destination of choice, according to Nibukun Lawson, the Group Executive Director of Land Afrique Holdings—the parent company to Agbara Estates Limited, is that “the estate is well situated and easily accessible from either Lagos or the neigbouring West African countries.”

Lawson explained to our correspondent that Agbara Estate was designed in such a way that industrial, commercial and residential developments could co-exist, pointing out that the size, strategic geographical location, intersection by two major federal highways, and the existing infrastructure on the Estate make it a preferred destination for home seekers and industrial concerns.

The estate boasts newly refurbished internal roads, street lighting, connection to Shell Gas pipeline and PHCN, as well as an upcoming Independent Power Project, giving it an invulnerable advantage.

Nadhan Kutty Ramachandran, the managing director of Agbara Estates, disclosed that amenities in the Estate such as recently upgraded security, garbage disposal, Central Sewage Treatment system, Street cleaning, Bonded warehousing and other Industrial/Commercial facilities, which make living in the Estate worthwhile, were being well managed by the on-site Agbara Estates Property Services, where a new operations manager has just been appointed.

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Tuesday 17 March 2020

BUSINESS DAY

INTERVIEW

“Downstream operators to use more technology to drive profitability” ABAYOMI AWOBOKUN, CEO, Enyo Retail in this interview with Olusola Bello, talks about how the company is riding on technology platforms to boost business performance. He also shared the company’s vision for the future. Excerpts: Can you give an overview of Enyo Retail and the company’s role in the industry in Nigeria? nyo was founded in 2017 as a downstream retail company, seeking to compete favorably in the marketplace. Enyo sees an opportunity to use technology to boost business performance in a unique way, we have built a retail business on a technology platform which has allowed us to scale the business quite quickly.

We are distributing via our branded retail stations up to 2% of the petrol consumed in the country, we have about 90 operational stations and a few under construction.

We intend to close the year 2020 in a much stronger position than we started. In addition, we are also investing in other parts of the value chain including auto-mobile repair centers, liquified petroleum gas filling plants and other related businesses. Our auto-repair centres are branded Vehicon, meaning “Vehicon Concierge”, we have 22 sites currently opened across the country, repairing and maintaining up to 4,000 cars a month. We are also investing in our own distribution capacity and have up to 320 trucks in our fleet partly owned by us and other professional haulers. Nationwide, we have approximately 1000 employees directly and indirectly and we operate out of two offices in Lagos and in Abuja.

MechTech initiative?

The MechTech (Mechanic and Technicians Academy) initiative is Enyo’s effort to support auto mechanics across the country. A significant number of new cars are serviced or maintained by the OEM dealers, but we have an influx of cars which were not originally bought from the OEM dealers, which are still in good working condition. These cars have new technologies which a lot of mechanics do not know how to fix and interact with. The MechTech initiative equips mechanics with the technical expertise required to correctly diagnose and repair even the most technologically advanced automobiles, our sweet spot is cars as young as 2 years old. Leveraging in-depth training by seasoned professionals in the auto-industry, we seek to upgrade local technical competencies to international standards so as to bridge a skill gaps and allow the mechanics earn more for themselves and their families.

E

Can you give insight into Enyo’s technology platform?

Historically, the narrative associated with the downstream industry has not been as positive as it can be. Most people associate us with our historical challenges as an industry rather than with our successes and the value we create or services we render. It also does not help that a lot of players rather than focus on innovation would rather spend their resources requesting for margin increases and other incentives from the Government.

In most countries in the world the Downstream is a low margin sector, successful brands leverage non-fuel income to make their fuels retailing viable. Locally we have suffered increasingly tighter margins and have seen some highprofile divestments by international and local majors as a result of this.

We are therefore very clear and this is evident in our business model that tech-based innovation is key to our business sustainability.

To this end, partnering with

Abayomi Awobokun

a handful of tech companies, Enyo utilizes and has deployed affordable tech-driven processes to make our value chain more efficient, less costly to run and more transparent. Our processes spanning fuel ordering, order fulfillment and sales are more visible to all participants in those process value chains via our technology platform. We are able to manage and support our sites through this platform and as such are able to replenish in a more efficient manner.

We are also taking the technology to the consumers with self-service options to be implemented soon and also significant improvement in our payment systems. Enyo allows customers to manage their fleet through the data received from our tech-platform and also ensures fleet owners have visibility of all products bought at any of our sites nationwide. We have also successfully implemented a loyalty program called ENYOthankU, which is gaining popularity with customers, we reward customers with every litre bought from our stations and those rewards are redeemable at numerous partner www.businessday.ng

outlets, spanning from fast moving consumer goods to food and beverage business, we want to use our tech platform to deepen our intimacy with our customers thereby growing their loyalty.

Can you walk us through your value chain management in terms of B2B? Enyo buys fuels locally from competitive suppliers, most of the fuel in Nigeria is ultimately sourced by

‘

Our points of sales machines provide us better value than the traditions terminals used by most of our competitors

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the government. We have access to some of the terminals we buy from and can thus embed some technology there to manage inventory levels. With regards to our sites, we manage inventory requests using computerized minimum and maximum levels which ensures that our points of sales enjoy automatic replenishment with very little human intervention. At the stations, we also have equipment that manages inventory automatically and each site works autonomously with very little supervision from the head office.

Our points of sales machines provide us better value than the traditions terminals used by most of our competitors. Ours are increasingly more integrated to our techplatform and where the customer provides their email addresses we can share information with them as pertains to their purchases from us. At the customer’s discretion, we can also collect some information about the wellness of their vehicles and provide services to them in addition to their fuel purchases, we always seek to deliver more value than our competitors.

Can you give insights into Enyo’s @Businessdayng

To what extent do security risks affect Enyo’s operations?

Enyo operates out of 19 states and there are security risks both for the trucks in transit and the operations of the stations. We have put in a lot of thinking into how we keep our staff and sites protected. We keep very little cash on the forecourt, if at all, and are deeply invested in cashless sales. We do a significant amount to educate the public and our customers to be vigilant. We are also working with technology partners to ensure cybersecurity.

What is Enyo’s vision for the future?

I believe that within the next 24 months, there will be some consolidation in the fuel’s distribution space and this will create a new handful of successful brands on the high streets. Enyo Retail & Supply will be one of these prominent and successful brands in the country and we will be category leaders especially in the tech-driven downstream segment. We want to promote an ethos for change and create the necessity to deliver value to customers. We are focused on expanding our goods and services within the country in the first instance; and while opportunities abound regionally and beyond, they will always be secondary to us as our mono-focus is on Nigeria.

We are currently in 19 states of the country out of 36.

Tuesday 17 March 2020

BUSINESS DAY

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FEATURE

PPP: Driving a viable economy in Lagos through structural growth The state of infrastructure in Nigeria has remained a matter of concern given the importance of infrastructure in the economic wellbeing of the populace and the growth and development process of the economy. Osa Victor Obayagbona writes that the inability of the government to meet up with the increasing responsibility to provide and maintain infrastructure in the country, especially with the huge population at the moment and the need to regulate the contribution of private individuals to infrastructural development, led to the concept of Public-Private Partnerships (PPPs).

I

t is commonly believed that the government should provide the basic social amenities and infrastructure for its populace, largely through taxes paid by citizens. But in reality, taxes paid by citizens are not sufficient to ensure that these social amenities and infrastructure are provided for.

The World Bank estimates that every 1 percent of government funds spent on infrastructure leads to an equivalent 1 percent increase in Gross Domestic Product (GDP), which invariably means that there is a correlation between any meaningful inputs in infrastructure development, which reflects on economic growth indices, hence the value of infrastructure cannot be underplayed.

However, it is no news that there is shortage of funding available for essential services and infrastructural development by the government in Nigeria and in almost every country in the world, thereby creating gap non-governmental organisations (NGOs) and companies through their corporate social responsibilities (CSR) has attempted to fill.

Unfortunately, various performance indicators in respect of these infrastructural facilities point to the fact that their performance remained unsatisfactory. It seems to be a well-known fact that infrastructural facilities in this country are grossly inadequate to meet the need of industries; both old and new, and the population.

A report by the African Development Bank on Nigeria’s Infrastructure Plan in 2013 had estimated that Nigeria would need to invest about $350 billion in its infrastructure sector in 10 years to be at par with its peers.

The fact is that the government cannot be the sole provider or promoter of infrastructure projects, as private sector investment in infrastructure sector is also required.

A public-private partnership (PPP) can be described as a cooperation between the public and the private sector, in which the government and the private sector jointly carry out a project on the basis of an agreed division of tasks and risks, each party retaining its own identity and responsibilities.

It is also a way for governments to mobilise funds and deliver what they would not have otherwise been able to provide, that is, the public

infrastructure and services that the citizens require.

The underlying principle of PPPs is that, the public sector needs to be responsible for the delivery of a particular service; it does not have to be involved in the actual provision of the service or for undertaking the investment themselves. In this way, all actors of a PPP can concentrate on doing their part of the agreement.

It therefore means that PPP agreements are aimed at optimising the input of knowledge and resources from both sectors.

Major public infrastructural developments have always been undertaken by the private sector under contract. The major difference between a normal contract from the government and a private sector and PPPs is the fact that the private sector can be regarded as a full-fledged contributor.

In Nigeria, the Infrastructure Concession Regulatory Commission (ICRC) established under the Infrastructure Concession Regulatory Commission Act 2005 is saddled with the responsibility of addressing Nigeria’s physical infrastructure deficit, which hampers economic development.

The body has been active in the development of PPPs and part of their activities is the establishment of Nigerian Public Private Partnership Network in collaboration with the Lagos State Public www.businessday.ng

Private Partnership Office, which is now headed by Ope George, as the director-general.

OPPP Lagos, playing its part in attracting investment The legal framework of Lagos State PPP was established in 2011 to, among others, provide vitality for the operations of PPPs and boost investor confidence in the availability, suitability and security of the investment opportunities in the state. Following the creation of the PPP disclosure portal by the ICRC, 70 percent of foreign investors have continued to flood the Nigerian economy as well as in Lagos State where investment in infrastructure is taking a giant leap.

One of the mandates of the Office of Public Private Partnership, Lagos, is to serve as a check against unrealistic government promises or expectations, increase the efficiency of the government’s investment and allow government funds to be redirected to other important socioeconomic areas.

It may be early days for the Babajide Sanwo-Olu-led administration but the administration’s constant engagement with the state Public Private Partnership Office is yielding fruits.

Even though the Lekki refinery project started before the tenure of the governor, he has described as “exciting” the decision of the

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Dangote Group to site its petroleum, fertilizer and petrochemical company in Lagos, and added that it would lead to real growth and development in the Lekki area and the state in particular.

On how the state will play its part, Sanwo-Olu said, “Part of the things we will be doing here is a comprehensive new infrastructure that will be coming to this corridor. We are closing up on two different road connections out of this place. One will go straight to Epe and the other will go towards Ijebu-Ode”.

Furthermore, to curtail the traffic congestion, the Governor recently deployed about 14 commercial boats while assuring its citizens that that before the end of the year the ferryboats would be increased to 30 adding that more than 500 buses would be injected into the state bus transport system to ease transportation problems.

The 500 buses to be deployed according to a source is in partnership with an unnamed company who sunk in funds to partner with the government on distribution of these buses.

Furthermore, it was reported that more than N250 billion is said to be lost to traffic annually, thus it is not surprising that the Sanwo-Oluled administration in partnership with the PPP and major construction companies, has embarked on massive road rehabilitation across @Businessdayng

the state.

As regards to housing, which is one of the challenges facing Lagos environs, The Lagos State Governor, promised that the current administration will do everything possible to provide decent homes to ensure it plays its part in reducing housing deficit in Nigeria.

So far, over more than 492 homes have been allotted out to individuals and Governor Sanwo-Olu says he will do more.

According to him, “Our vision of a greater Lagos in which everyone prospers, embraces all irrespective of social or economic status.”

Governance is about making an impact in people lives and so we are happy that this has restored some form of hope to the allottees. We will continue to develop mortgage solutions and I am assuring those who missed out in this scheme, not to lose hope as more innovative housing schemes are on the way”, he said.

Sanwo-Olu further said as a matter of policy, the state government is strategizing and intervening at all points to ensure more and more homes are made available through budgetary allocation.

“We are currently engaged in discussions with our partners to see how we can solve the housing challenges so that we can build more housing units and make it at low cost for our people to get access to it”, he said.

It is obvious that the Lagos State government has a true appreciation of the Office of Public Private Partnerships as it has seen that publicprivate partnership’s return on investment (ROI) might be greater than projects with traditional, allprivate or all-government fulfilment. Innovative design and financing approaches become available when the two entities work together.

Risks are fully appraised early on to determine project feasibility.

In conclusion, there should be promotion and increment in PPP participation in Nigeria as the benefits are immense in contributing towards building a sustainable economy. It is, however, important that the government or the public sector and the private sectors embrace transparency and accountability while working together to ensure that the basic needs of the populace being the targeted beneficiaries of these partnerships are considerably met.

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Tuesday 17 March 2020

BUSINESS DAY

Investments

ENERGY INTELLIGENCE

Market Insight Companies Commodity Tracker Policy

OIL

GAS

PETROCHEMICALS

POWER

Market

Four lessons Nigeria can learn from OPEC+ breakdown, oil price crash STEPHEN ONYEKWELU

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ast Monday, Nigeria awoke to a world where oil prices had lost more than one-fourth of the value and there was no sign in sight of prices finding a floor.

The coronavirus outbreak had slowed demand for oil due to a reduction in economic activities. Factories were shut down in China, which accounts for some 80 percent of global oil demand, people commuted and travelled less, meaning transport took a hit.

The aviation industry alone lost over $100 billion.

Additionally, Russia had recoiled from the three years old OPEC+ alliance which had kept oil markets stable since 2016 by keeping out about 1.7 million barrels a day from the global oil market to shore up prices. Then Saudi Arabia shocked the world by deciding to slash oil prices for its Asian customers by as much $8 per barrel, sparking a price war, which saw oil prices fall to a 30-year low of $32 per barrel.

“The debacle in the global oil markets are yet another reminder to Nigeria, perhaps the last major one before oil’s relevance becomes history as a result of innovation-driven alternatives,” Kingsley Moghalu, a political economist and a presidential aspirant Nigeria’s 2019 elections tweeted. “Our reliance on crude oil for the past 50 years has made us a poor country.”

News reports also indicated that oil traders in Africa were unable to find buyers for fifty-five Nigerian oil cargoes as global demand crashed.

Here are four lessons Nigeria can learn from the OPEC+ collapse and oil price slide.

Rainy days are inevitable. Nigeria’s economic managers have

been rudely reminded again that saving rainy days is important.

People familiar with the cyclical nature of the oil industry say this happened in 1979, 1985, 1991, 2008, 2014 and now in 2020. Nigeria has a little over $70 million in its Excess Crude Account, as of last month, down from $324 million.

“This problem is foreseeable, it is built into the nature of the industry and Nigeria must learn how to save,” Gbite Adeniji, partner, Advisory Legal Consultants.

Strong manufacturing and agriculture base create buffers against oil price crashes. Nigeria has over half of its 200 million people living in poverty but has been failing to aggressively diversify to the economy through industrialisation and large scale

agriculture, which are sure bankers for job creation.

“Since 1979 that I came to Lagos, people have been talking about the diversification of the Nigerian economy. You can only diversify the economy through manufacturing and agriculture,” Aliko Dangote, founder of the Dangote Group of companies with a net worth of $10 billion said in an interview.

This is Nigeria’s chance to go bullish on infrastructure development. Nigeria has an enormous market thanks to the country’s exponential population growth but this market is poorly interconnected due to bad road networks and the absence of a cross country rail network for haulage.

For example, the uncompleted Lagos-Kano railway project has

the potential of linking up two of Nigeria’s biggest commercial cities.

“Anything that facilitates the ease of moving people and their goods and services will certainly have a big impact on economic activity,” Ayo Akinwunmi, relationship manager, corporate banking at FSDH Merchant Bank told BusinessDay in an earlier report.

Nigeria’s most critical resource is still its people. In January 2016 oil prices had touched a low of $26 dollars per barrel this made economists forecast diaspora remittances into Nigeria would overtake oil sale proceeds for the first time.

The government’s portion of oil export proceeds was expected to average about $21 billion that year,

the value of diaspora remittances in the same period was seen in the range of $23bn-$24 billion, Bismarck Rewane, the lead economist and CEO of Financial Derivatives Company told BusinessDay. This means Nigeria’s export of people and knowledge is a critical resource that when cultivated by improving education standards the country would have created a sustainable buffer given its largely youthful population.

Diaspora remittances into the country surged 20.6 percent to $25.1 billion in 2018, from $20.8 billion in 2014, revenue from oil plunged 57.4 percent to $18 billion in 2018, from as high as $42.7 billion in 2014, according to data obtained from the Central Bank’s quarterly reports and analysed by BusinessDay.

Tuesday 17 March 2020

BUSINESS DAY

31

ENERGY INTELLIGENCE Explainer

How the oil price war will affect homes, businesses and what you should do For business the situation is complicated with the border closure compounding the woes of companies in the country.

ISAAC ANYAOGU

S

ale of crude oil accounts for at least 85 percent of the government’s earnings and the bulk of these earnings is used to pay salaries of civil servants. The government’s activities including how it spends or save money affects businesses so everyone has a good reason to be paranoid over this price war among producers.

Why the price war The bulk of the world’s oil or 10million barrels a day is bought by China, representing a third of all supply is consumed by factories in China.

Since the outbreak of the Coronavirus, these factories have been shut down and flights to China has been cancelled. So there are more oil than buyers.

This led to a fall in oil demand which affects prices – law of supply and demand.

So to keep prices high, a club of oil producers known as the Organisation of Petroleum Exporting Countries (OPEC) and some other producers who are not part of OPEC, including Russia, …. Met to reduce their production.

OPEC led by Saudi Arabia proposed cutting production by 1.5million barrels a day but Russia refused to go along.

These are the two big boys in the agreement.

Russia said more cuts will

allow US shale producers flood the market with their own oil which is actually more expensive to produce and cede the market to them.

Saudi Arabia gave Russia a day to think about what it wants to do, but the Russians have had enough vodka and made up their minds.

So Saudi Arabia decided to flood the market with oil and bury everyone else along just because it can. Saudi’s crown prince, is young and needs to prove something.

But Putin is watching the market uneasily. Russia’s budget is based on $40 dollar oil but it has $560bn reserves, Saudi needs it at $80 but can produce oil at $3. So the war is on.

A report by research firm HIS Markit says oil producers like Nigeria face the biggest drop ever in demand for their product with forecasts now suggesting demand collapse levels that will be steepest on record and far worse than the during

the 2008 global financial crisis.

The 2020 budget, was based on oil production of 2.18 million bpd with an oil price benchmark of $57 per barrel. The government is indicating it may review this projection.

How it will affect businesses For businesses, this is a painful time to be alive. Nigeria’s foreign exchange reserves is seeing a decline and this could set off fiscal crisis, adding pressure on the Naira.

Businesses are already struggling to get access to foreign exchange due to decline in dollar earnings. This will endanger their ability to replace raw materials and meet the demands of their customers.

The oil price war and the coronavirus has also led to the fall of stock markets across the world. This has severally impacted the stock price of shares of many businesses. Some will be forced to merge or others will be forced out of business.

How it will affect households For individuals and households, a difficult business climate will lead to fall in incomes and many companies will be forced to lay off staff thereby increasing the poverty situation in the country.

It will trickle down to basic commodities as they will likely see a rise in prices including cost of transportation. This will raise inflation numbers and may yet trip the country into a recession if the economy continues to strain under the weight of low oil prices.

Analysts say Nigeria should ramp up efforts to diversify the economy as over reliance on crude income exposes the economy to shocks.

“We need to take efforts to diversify the economy more seriously and implement policies that help us get private capital because it’s the way to go,” Muda Yusuf, director general of the Lagos Chambers of Commerce and Industry recently told BusinessDay. But each year, data from the National Bureau of Statistics still show the country is yet to wean itself from dependence on oil as it accounts for 90 percent of dollar earnings.

Policy

Bala Wunti: The new head of Nigeria’s oil asset, NAIPMS DIPO OLADEHINDE

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xpectations filled with optimism and pessimism is expected to trail the appointment of Bala Wunti following his appointment to the position of the Group General Manager, National Petroleum Investment Management Services (NIPMS).

The body is the asset management subsidiary of stateowned Nigerian National Petroleum Corporation (NNPC) and subsequently oversees the corporation’s joint upstream investments with the major oil-producing companies in Nigeria.

NAPIMS represents a critical piece of Nigeria’s upstream management structure, and also the prosecutor of federal government agenda. The organisation is also responsible for delivering approvals at every point in the contract cycle and often blamed for bureaucratic delay in progressing exploration and field development programmes.

Bala Wunti has worked

with five GMDs and has vast experience in working with the top hierarchy of NNPC, however the job before Bala Wunti will be quite enormous. Piecemeal tax hikes, and a growing lack of certainty around terms, have made companies wary.

“It’d be challenging for him,” Charles Akinbobola, an energy analyst at Sofidam Capital said. “His biggest task will be attracting investment towards Nigeria’s docile oil fields.”

Chevron is selling assets in Nigeria. Total’s stake in the profitable Bonga offshore field is also on the block,

while ExxonMobil is looking to shed Nigerian fields as part of a global retrenchment strategy.

Also, Fiscal uncertainty has delayed a decision on a multi-billion expansion, known as Bonga Southwest,

by Royal Dutch Shell and its partners.

“Investors are not charity organisations. When they are not sure of making their money, they will walk away, the new man in charge of NAPIMS will have to give directions,” Ademola Henry, Team Leader at Facility for Oil Sector Transformation (FOSTER) said.

With over 25 years’ experience, Bala Wunti is known in the oil industry as the initiator of ‘Operation White,’ a system put in place to promote transparency and accountability in the distribution of petroleum products across the country is indeed an accomplished oil and gas technocrat.

Wunti, a thoroughbred oil and gas industry professional is a graduate of Chemistry from the Ahmadu Bello University, Zaria, with an MBA in Marketing from the

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Tafawa Balewa University in Bauchi and a Postgraduate Diploma in Management from the same school.

Wunti joined the NNPC in 1994 as a Production Programming Officer at the Eleme Petrochemichal Complex, Eleme. Between 1998 and 2004, he was the Assistant Chief Market Research Officer, Marketing Department, Commercial Division, Eleme Petrochemical Limited, Port Harcourt.

From 2004 to 2010, he was Head of Market Research, Brass LNG Limited, Lagos.

Between 2016 and 2017, he was General Manager/ Technical Advisor Downstream to the GMD, NNPC and from 2017 to 2019, he became the Group General Manager, NNPC Corporate Planning and Strategy.

NAPIMS came under fire last year from the House of Representatives’ Committee on Gas which last May released a report alleging serial violations of the Procurement Act in the form of unapproved cost overruns and flouting rules on conflict of interest.

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Opportunity for Nigeria to attract investors as solar, wind displace coal igeria’s abundant sunshine and wind places it in a position to attract investors divesting from coal assets as new research by Carbon Tracker Initiative see renewable energy sources becoming cheaper than coal.

The new research, released last Thursday, shows that nearly $640 billion of investment in coal power capacity worldwide is at risk because it is becoming less expensive to generate electricity from wind and solar

coal projects immediately and progressively phase out existing plants.”

This is an opportunity for Nigeria to attract investors into its renewable energy space. The huge potential for renewable energy in Nigeria is mostly untapped. Barriers to the development of renewables include: the large oil and gas production in together with government fuel subsidies, the lack of clarity and market information on private sector opportunities, and a general knowledge gap concerning financial support mecha-

power. The report examined the economics of 95 percent of coal plants which are operating, under construction or planned worldwide.

Globally, some 499 gigawatts (GW) of new coal power capacity is planned or under construction with an investment cost of $638 billion. Meanwhile, more than 60 percent of global coal plants are currently generating electricity at a higher cost than could be produced by building new renewables.

A confluence of factors is displacing coal’s dominance, most notably lowcost renewable energy.

The other factor is that institutional investors are increasingly turning away from fossil fuel companies due to the risk their assets will become stranded as tougher emissions-cuts targets discourage their use and renewable energy becomes even cheaper.

“Renewables are outcompeting coal around the world and proposed coal investments risk becoming stranded assets which could lock in high-cost coal power for decades,” Matt Gray, Carbon Tracker co-head of power and utilities and co-author of the report, said in a statement.

“The market is driving the low-carbon energy transition but governments aren’t listening. It makes economic sense for governments to cancel new

nisms available within the country.

Nigeria has enormous solar energy potential, with fairly distributed solar radiation averaging 19.8 MJm2/ day and average sunshine hours of 6h/day. The assumed potential for concentrated solar power and photovoltaic generation is around 427,000 megawatts (MW). According to estimates, the designation of only 5 percent of suitable land in central and northern Nigeria for solar thermal would provide a theoretical generation capacity of 42,700 MW. But the wind energy potential in Nigeria is very modest, with annual average speeds of about 2.0 metres per second (m/s) at the coastal region and 4.0 m/s at heights of 30m in the far northern region of the country. This is based on wind energy resource mapping carried out by the Ministry of Science and Technology.

Wind speed of up to 5m/s was recorded in the most suitable locations, which reveals only a moderate and local potential for wind energy. The highest wind speeds can be expected in the Sokoto region, the Jos Plateau, Gembu and Kano and Funtua. From the study, Maiduguri, Lagos and Enugu also indicated fair wind speeds, sufficient for energy generation by wind farms.

STEPHEN ONYEKWELU

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33

Live @ The Exchanges Market Statistics as at Monday 16 March 2020

Top Gainers/Losers as at Monday 16 March 2020 LOSERS

GAINERS Company

Closing

Change

WAPCO

N10.65

N10

-0.65

0.9

DANGSUGAR

N10.15

N9.85

-0.3

N6.6

0.6

UBA

N5.35

N5.05

-0.3

VOLUME (Numbers)

N5.5

N6

0.5

FBNH

N4

N3.7

-0.3

VALUE (N billion)

N3.75

N4.05

0.3

SKYAVN

N2.57

N2.32

-0.25

Closing

Change

JBERGER

N20.2

N22.15

1.95

ZENITHBANK

N11.9

N12.8

N6

UBN EKOCORP PZ

Company

ASI (Points)

Opening

Opening

DEALS (Numbers)

MARKET CAP (N Trn)

22,705.19 6,981.00 551,483,188.00 5.755

Global market indicators FTSE 100 Index 5,162.38GBP -203.73-3.80%

Nikkei 225 17,002.04JPY -429.01-2.46%

S&P 500 Index 2,503.32USD -207.70-7.66%

Deutsche Boerse AG German Stock Index DAX 8,800.42EUR -431.66-4.68%

Generic 1st ‘DM’ Future 21,078.00USD -1,761.00-7.71%

Shanghai Stock Exchange Composite Index 2,789.25CNY -98.17-3.40%

11.832

Stock market fails to close in green

... investors lose N14billion Stories by Iheanyi Nwachukwu

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igeria’s stock trading session on Monday March 16 closed in the red zone. The NSE All Share Index decreased by 0.12 percent to 22,705.19 points.

Stocks lost N14billion at the sound of trade closing gong as at 2:30 pm.

The market failed to sustain early morning gain.

Lafarge, UBA, FBH Holdings, and Dangote Sugar were on offer, while Julius Berger and Zenith Bank saw increased bargain. In 6,981 deals investors exchanged 551,483,188 units valued at N5.755billion. “ H o w e v e r, n e g a t i v e developments in the oil price war or coronavirus could spark further selloffs in local equities”, said market analysts at Lagos based Vetiva.

“This week, seeing as the

L-R: Saadatu Faruk, head marketing Consultancy Research and Mobilization, Nigerian Capital Market Institute; Francis Binuyo, head accreditation department, Center for Management Development and Ismaila Ville, acting managing director NCMI during a Meeting between NCMI and CMD in Abuja.

market closed up only on Friday in the previous week, we could see the market

rebound, as investors dive into stocks w ith strong fundamentals and attractive

Vibrant Commordities Market will create jobs, end poverty - Osinbajo

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ice President Yemi Osinbajo has stated that a vibrant commordities market will create jobs and reduce poverty in Nigeria.

O s i n b a j o, s p o k e a t the beginning of a 2-day International Conference on the Nigerian Commodities Market (ICNCM 2020), with the theme: Commodities Trading Ecosystem: “Key to diversifying Nigeria’s economy” organized by the Securities and Exchange Commission (SEC), in Abuja.

Represented at the ocassion

by Ambassador Maryam Katagun, the Minister of State, Industry, Trade and Investment, the Vice President, stated that Nigeria is endowed with favorable atmospheric conditions for farming as well as abundant natural resources and teaming youthful population.

According to him, efficient use of these resources will benefit both the public and

private sectors of the economy.

“Distinguished ladies and gentlemen our country is endowed with favorable atmospheric conditions for farming as well as abundant natural resources and teaming youthful population.

“Hence efficient use of these resources will benefit both the public and private sectors of our economy. “ With a vibrant commodities markets jobs will be created. Poverty will be reduced micro economic situation of the country will improve.

“Definitely every responsible government is interested in seeing these improvements and this is at the heart of our administration ‘s policies and projects implementation “In realisation of these objectives, the federal government has put many initiatives in place to develop the agriculture and solid mineral sectors” stated the www.businessday.ng

Vice President.

In her address, Zainab Ahmed, Minister of Finance, Budget and National Planning, noted that the theme of the conference has always been relevant in Nigeria’s national discourse as several national plans, programmes and projects have targeted diversifying the production and revenue sectors of the economy.

According to the minister, while achievements have been made in these areas, there are needs to do more ensure that the country’s production and export base more robust and less vulnerable to external shocks as well as provide more opportunities for the growing population.

She noted that the recent outbreak of Coronavirus h a s f u r t h e r s t re n g t h e n the federal government’s resolve to diversifying the economy hence the theme of the conference was apt and timely.

dividend yields, given the current depressed prices.

“This week, seeing as

the market closed up only on Friday in the previous week, we could see the market rebound, as investors dive into stocks with strong fundamentals and attractive dividend yields, given the current depressed prices. However, negative developments in the oil price war or coronavirus could spark further selloffs in local equities”, analysts at United Capital research said.

Nigeria’s stock market was down by 13.49percent in the trading week ended March 13.

In value terms, this represents a loss of about N1.85trillion.

As Coronavirus (COVID-19) continues to spread around the world, the virus is not only infecting people but also financial markets.

The Nigeria stock market entered the bear zone with record negative return of -15.30percent year-to-date (YtD).

Notably, the pressure on

financial markets escalated after the OPEC+ meeting ended in a deadlock, with Saudi Arabia commencing a full-blown crude oil price war.

As a ripple effect, the spot Brent crude oil price dropped to a 4-year low (sub $40/barrel levels), prompting investors to pull out funds from risk-assets to safety assets like gold and government treasury.

Last week, NSE All Share Index (ASI) decreased from week open high of 26, 279.61 points to close the week at a record low of 22,734.07 points. Likewise, the value of listed stocks on the Nigerian Stock Exchange (NSE) dipped from N13.695trillion to a new low of N11.846trillion.

With most stocks trading at deep discounts to their expected fair value in the face of massive sell pressure last week, market watchers expect a number of stocks to enjoy positive investor patronage this week.

SEC expects outcome of commodities market conference to spur capital market, economy

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he Securities and Exchange Commission (SEC) said the outcome of the International Conference on Nigeria’s Commodities Market (ICNCM) 2020 will make the much desired impact on the commodities trading that would stimulate Nigeria’s capital market and economic growth.

TheSECthroughtheactivities of the Technical Committee (TC) on Commodities Trading Ecosystem is hosting the conference which whose outcome is expected to make the much desired impact on the

capital market and economy in general.

The Technical Committee draws members from various stakeholders in the commodities ecosystem including the Central Bank of Nigeria, Financial Markets Dealers Quotations (FMDQ), Nigeria Stock Exchange (NSE), Standards Organization of Nigeria (SON), Bank of Agr iculture (B OA), The Nigeria Incentive-Based Risk Sharing System (NIRSAL), Financial Systems Strategy (FSS 2020), AFEX Commodities Exchange Ltd and the Nigerian

Commodity Exchange (NCX).

“We are going to have two days of robust discussions from Monday March 16 to Tuesday March 17 on what we need to do to have a vibrant commodities ecosystem in Nigeria”, said acting Director General of the Commission, Mary Uduk.

Uduk stated that the commodities trading ecosystem in Nigeria has been one to watch for the past couple of years, with the Federal Government intensified efforts towards diversifying the economy and reducing overdependence on crude oil.

Nigerian Capital Market Institute to expand operation

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n a bid to provide excellent capital market education to stakeholders, which will help deepen the Nigerian Capital Market, the Nigerian Capital Market Institute (NCMI) is to operate from three centres in Nigeria.

This was stated by acting Dire ctor-G eneral of the Securities and Exchange Commission (SEC), Mary

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Uduk during a meeting with the accreditation team from the Centre for Management and Development (CMD).

The NCMI is the educational and training arm of the Nigerian capital market regulator, the SEC. Represented by acting Managing Director of the In st i tu te, Is ma i la Vi l l e, Uduk said the accreditation @Businessdayng

will be beneficial to the Institute and to the capital market community at large, saying that the Institute had previously been identified

by Chartered Institute for Securities & Investment, CISI to be an accredited training (ATP) provider that will provide global certification to capital market operators within Nigeria.

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BUSINESS DAY

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Tuesday 17 March 2020

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No going back on suspension of Lagos lawmakers - Obasa Iniobong Iwok

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he Speaker of the Lagos State House of Assembly, Mudashiru Obasa has said that there was no going back on the suspension of four lawmakers by the House.

Obasa’s stance came as the state’s lawmakers passed a vote of confidence in the Speaker over the controversy that the purchase of vehicles worth N2.4 billion for the members of the Assembly has generated in recent days.

The lawmakers suspended last week for “gross misconduct” included former Chief Whip, Rotimi Abiru (Shomolu 2); former Deputy Majority Leader, Olumuyiwa Jimoh (Apapa 2); Moshood Oshun (Lagos Mainland 2) and Raheem Kazeem Adewale (Ibeju-Lekki 2).

At plenary Monday, a petition was however, brought to the House by Rotimi Olowo (Shomolu Constituency 1)

under Matter of Urgent Public Importance.

The petition sent to the office of the Economic and Financial Crime Commission (EFCC) and addressed to the office of the chairman of the commission was titled: ‘Petition against Lagos State House of Assembly Speaker, Mudashiru Obasa on gross financial misconduct, criminal breach of public trust and abuse of office.’

Executive Director, Buna Olaitan Isiak of the petitioner, Human Rights Monitoring Agenda (HURMA), however, claimed that popular demand necessitated the petition, stressing that it was a demand by some members of the public who accused the Speaker of gross financial misconduct and abuse of office.

Olowo stated that he went through the petition and that it was malicious and that it was against the image of the House.

According to him, “It was stated that the House bought vehicles worth N2.4 billion.

Mudashiru Obasa

Since I joined the House of Assembly, we always got two vehicles before the end of the Assembly.

“In 2007, I got a vehicle and a backup vehicle before the end of the Assembly. The

vehicles are always budgeted for and it has been like that right from the time of Adeyemi Ikuforiji.

“We always told the Speaker that the 8th Assembly could not wind up without a

Lagos explosion: Razak condoles government, victims’ families

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n elder statesman and chieftain of the All Pro gressives Congress (APC) in Lagos State, Lanre Razak has sent his heart-felt condolence to the Lagos State government, families of the victims and the entire people of the state over the sad incident.

Early Sunday morning, the people of Lagos State were shaken with a deafening bang emanating from a pipeline explosion at Abule-

Ado in Amuwo Odofin Local Government Area of the state that claimed several lives, destroyed several properties and rendered thousands of residents homeless.

Razak, who in a statement, described the incident as sad, unfortunate and tearinducing, sympathised with Governor Babajide SanwoOlu and families of the affected families, praying the almighty God to rest the soul of the departed and grant the

injured quick recovery.

The elder statesman was full of pity over the lives of the innocent students, who he described as “future leaders,” that died in the inferno, believing that the good Lord would adequately console their parents over the irreparable loss.

While commending Sanwo-Olu for rising to the occasion, Razak also lauded the efforts of all the agencies involved in the emergency ac-

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he Action Democratic Party (ADP) has expressed sadness over the loss of lives and damage to properties occasioned by an explosion that rocked Lagos State and its environs on Sunday morning, calling for an extensive investigation to be carried out by the Federal Government in collaboration with the state authorities to clear the air over the matter.

ADP made this call on Monday in a statement issued by the national publicity secretary of the party, Adelaja Adeoye, while commiserating with victims, all

Lagosians, and the families of those affected by this tragedy.

The party, while describing the event as a national tragedy that could have been avoided, said it was important that a thorough investigation was carried out.

“The probe was imperative as the National Emergency Management Agency (NEMA) has said in its earlier report that the disaster was not due to pipeline explosion while NNPC gave a contrary report to what happened.

“The level of damage done by the loud explosion makes it very difficult to accept or reject what the cause could have been, but an extensive www.businessday.ng

investigation should be carried out by the Lagos State government and the Federal Government to clear the air over this matter,” the party said.

The party posited that the frequency of the disasters, ranging from midnight market fire, explosions and other tragedies across the country, was a serious source of worry and concern that threaten the existence of the country.

It therefore, called for an urgent review of Nigeria’s disaster management, saying “measures must be put in place to avert the occurrences of these black days.”

The party said it deeply sympathises with all victims,

them.

“The official vehicles for the 9th Assembly not the issue; It was a deliberate action to paint the House in bad light. The people that stole the vouchers that were leaked to the press are the issue.

“I thank you for all you have said about the petition.

We have discussed issues relating to divulging the discussions in the House. I said that the issue that came out in the Guardian Newspaper is traceable to Moshood Oshun,” he said.

According to him, “He was asking me for documents of the vehicle given to him; he was the one that called me on the telephone that his vehicle was seized by Customs Officer.

“I once said that someone stole the vouchers of the vehicles. Where did he get it from if not for the role played by a member of the House? The writer of the petition is close to Olumuyiwa Jimoh. Some of the things he wrote were parts of what we have discussed.”

Appeal Court orders stay of execution of Oshiomhole’s suspension Felix Omohomhion, Abuja

tivities for their prompt intervention that assisted in rescue operations that reduced the number of casualties at the scene of the inferno.

The former Public Transportation Commissioner in the state also praised the governor for the relief efforts being directed to the victims, just as he appealled to the Federal Government to rally round the state government in its efforts at rehabilitating the displaced victims.

…ADP seeks thorough investigation, sympathises with victims Iniobong Iwok

backup vehicle.

“The Speaker used to tell to us that the resources were not available and we later got the back-up in April, 2019.

In the 9th Assembly, we just got our official vehicles in November/December, 2019.

“None of the 11 new members got two vehicles. We insisted on Prado Jeep and Mr. Speaker didn’t want to give us, but we insisted on it.

“We are all beneficiaries of the largesse and yet we go about making insinuations and leaking information to the whole world,” he said.

While adding that the write-up and petition was written in bad faith, he said that there was no iota of truth in it.

“We also said that the buses that we were using for committee works were bad and we insisted that he should buy a new set and he did.

Speaker Mudashiru Obasa stated that the issue was not about official vehicles, but the backup vehicles and the money spent purchasing

especially the residents of Abule-Ado, students of Bethlehem Girls and St. Joseph School, Abule Ado, who are currently at the Nigerian Navy Reference Hospital, Navy Town receiving medical care.

ADP also sympathised with the family of Henrietta Alokha, the principal of Bethlehem Girls High School, Abule Ado who died, while trying to save the lives of girls inside the school, under her care.

“She was indeed the heroine, who laid down her life, just to save the lives of others.

We pray for her soul to meet the Lord in heaven,” the party added.

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he Court of Appeal sitting in Abuja on Monday ordered a stay of the execution of the suspension order placed on the National Chairman of the All Progressives Congress (APC), Adams Oshiomhole by an Abuja High Court on March 4.

In a unanimous ruling by the 3-man panel of justices of the Appeal Court, led by Justice Abubakar Yahaya, held that the suspension order be lifted until the determination of hearing of the substantive suit.

In an exparte application filed by Oshiomhole, he prayed the court to halt the suspension order on the grounds that there would be no status quo before they came to court, if the appellate court fails to intervene.

His lead lawyer, Wole Olanipekun (SAN) had informed the Court that there is a National Executive Committee meeting of the APC slated for Tuesday March 17, wherein the applicant would be excluded going by the suspension order of the lower court.

Olanipekun submitted that the order has already created a state of disorder in the party that could degenerate if the appellate court failed to intervene. @Businessdayng

The senior lawyer who noted that time is of essence because of the seriousness of the issue, said that there will be an irredeemable damage if the court does not intervene.

In its ruling, the appellate court held that status quo can only be maintained if the order of the lower court is stayed.

“We have looked at the application and we are of the view that the image of emergency has been painted. There is an information that NEC would hold meeting tomorrow and the applicant will not be there,” Justice Yahaya.

“Justice would not have been served if the applicant is not in that meeting. The status quo can only be maintained if there is a stay.

“We find merit in the application “We hereby order a stay of execution of the lower court made on March 4, 2020, pending the hearing of the notice of appeal slated for Friday, March 20, 2020”, the panel held.

The court in addition ordered all parties in the suit not to take any further steps that would affect the ruling of the court.

“We hereby give an order of injunction restraining the respondents or their agents from taking further steps until the determination of the substantive suit.”

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news

Nigeria gears up for commodity trading as pressure intensifies for economy diversification Hourly train service on Commodities market with the was plans to establish Agricul- country’s production and exAbuja-Kaduna route begins April Cynthia Egboboh, Abuja theme, “Commodities Trading tural Industrial Parks (AIPs) port base more robust and less MIKE OCHONMA

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hortage of coaches for passenger services on the Abuja-Kaduna train services is expected to gradually end as the Nigerian Railway Corporation (NRC) is planning to commence train service on an hourly schedule on the Abuja-Kaduna standard gauge route in April.

Currently, the train service operates on a three-hour interval, to the frustration of travellers, but authorities at NRC have assured of improved service delivery beginning from next month.

This means that passengers that miss a particular train departure schedule would no longer wait for nearly three hours for another service, but would rather depart on the soon-to-be introduced hourly service.

Fidet Okhiria, managing director/chief executive of NRC, who made this known at the weekend in Asaba, Delta state, also said the two locomotives and eight coaches recently procured are expected to arrive Kaduna by first week of April and will be commissioned immediately and put to use.

With the new capacity, more express services will be introduced for all categories of individuals that would

want to travel fast without the disruptions of stopping at every station, but this w ill will come with a higher price.

“Two locomotives have arrived. You know it’s not easy to move them by road.

We hope that in the next three weeks, the two locomotives and eight coaches would have arrived Kaduna. “Immediately, we will commission them and start operations with them. With that, we can have the hourly train, Okhiria said.

When the service is fully deployed, there will be nonstop return trip train services from Abuja to Kaduna. At the same time, the price will not be the same again because of the seats there.

In terms of categories, there are coaches for 24 passengers and another two coaches that can accommodate 56 people and the normal one depending on the class of ticket purchased by the passenger.

“So, we don’t expect people who will relax on their chair to also pay the same price,” he explained.

The NRC boss explained that there will be no general price review except the new extra comfort service. He further said that the revenue profile of the corporation is looking up, adding that in a month, the company’s turnover is almost N200 million.

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ressed by recent global developments, Nigerian government authorities are now discussing various ways of diversifying the economy, including developing a vibrant commodity trading platform that would help create jobs and reduce high poverty levels.

Vice President Yemi Osinbajo said developing a commodities trading ecosystem had become important considering that Nigeria’s agriculture and solid minerals sectors present emerging opportunities to be further enhanced and fully explored to spur growth in the economy.

“With a vibrant commodities market, jobs will be created, poverty will reduce and the macroeconomic situation of the country will improve,” Osinbajo noted at the 1st International Conference on Nigerian

Ecosystem: Key to Diversifying the Nigerian Economy” organised by the Securities and Exchange Commission in Abuja.

Represented by Maryam Katagun, the minister of state, industry, trade and investment, the Vice President stated that Nigeria was endowed with favourable atmospheric conditions for farming as well as abundant natural resources and teaming youthful population.

According to Osinbajo, efficient use of these resources will benefit both the public and private sectors of the economy.

Osinbajo said the need to develop other channels of generating revenue and foreign exchange was critical, which further underscored by the recent drop in the global price of crude oil - a major threat to achieving planned government expenditure.

He said one of Federal Government efforts in this regard

across the six-geopolitical zones, to enable it create jobs, drive food security and harness the comparative advantage in each zone.

He said the conference was well suited for this time as government identified and maps out strategies for developing our commodities markets as a major driver of the economic diversification efforts.

In her address, Zainab Ahmed, minister of finance, budget and national planning, noted that the theme of the conference had always been relevant in Nigeria’s national discourse as several national plans, programmes and projects had targeted diversifying the production and revenue sectors of the economy.

According to Ahmed, while achievements have been made in these areas, there are needs to do more ensure that the

vulnerable to external shocks as well as provide more opportunities for the growing population.

She noted that the recent Coronavirus outbreak has further strengthened the Federal Government’s resolve to diversifying the economy hence the theme of the conference.

“Through this conference, I can see the Capital Market community add its voice to the need to further diversify our economy, while also suggesting that one of the ways to this is to develop a vibrant commodities trading ecosystem.”

In her opening remarks, acting director-general of the SEC, Mary Uduk, said one of the key initiatives of the 10year Capital Market Master Plan was the development of a thriving commodities trading ecosystem as part of the capital market’s contribution to the national economy.

BPP boosts public funds expenditure with procurement officers’ training

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he Bureau of Public Procurement (BPP) has recorded improvements in the implementation of public procurement and public funds expenditure for procurement officers.

Speaking on Monday at a three-day conversion course for procurement officers in Lagos, BPP director-general, Mamman Ahmadu, said this year’s training programme for officers converting to the procurement cadre in the Ministries, Departments and Agencies (MDAs) would institutionalise procurement reform in the Federal Civil Service.

According to Ahmadu, the programme was designed to develop capacity for procurement officers in the MDAs, entrench professionalism and ensure that public procurement decisions by procurement experts were in line with strict provisions of the Public Procurement Act, 2007, (PPA).

This conversion training is one in the series of capacity development and training programmes organised by the BPP on a yearly basis to ensure that the public procurement system fulfils its purpose in a way that the Federal Government ensures the right allocation or use of resources, which is why the BPP is busy strengthening the Public Procurement Reform through continuous training.

Ahmadu, who was represented by director Energy Infrastructure, Bureau of Public Procurement (BPP), Baba-

tunde Kuye, said some of the improvements in the Public Procurement and expenditure of public funds, is that Due Process as listed in the Public Procurement Act, 2007 is now followed in the award of contracts.

“You will recall that the nine essential steps of public procurement start with efficient procurement plan driven by needs assessment. Then, there has to be Adequate Appropriation, followed by Advertisement, and Transparent Pre-qualification. Bid Submission and Bid Opening Process followed by Bid Evaluation process have to take place as well. Afterwards we have Tender Board or Federal Executive Council (FEC) Approval, and then Contract Execution. This is becoming entrenched in the Public Service as good credit for the reform,” he said.

He disclosed that only certified Procurement Officers will be allowed to be posted as Procurement Officers.

“The Head of Procurement Department or Unit as you are aware reports directly to the Accounting Officer of their respective MDAs and no one else, but where there are no certified Procurement Officers as yet, the schedule officer in charge will have to take responsibility in the meantime and should report to the Accounting Officer as appropriate. We need to begin to get things right as it can no longer be business as usual,” he disclosed. www.businessday.ng

L-R: Zainab Ahmed, minister of finance, budget and national planning; Ibikunle Amosun, chairman, Senate Committee on Capital Market; Mary Uduk, acting director- general, Securities and Exchange Commission (SEC), and Mariam Katagum, minister of state for industry, trade and investment, during the international conference on Nigerian Commodities Market, theme “Commodities Training Ecosystem: Key to Diversifying Nigeria Economy” held in Abuja, yesterday.

Pic by Tunde Adeniyi

Coronavirus: Nigeria puts 8 countries on priority list as high-risk nations Godsgift Onyedinefu

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igeria has designated eight countries as high-risk nations in its bid to control the importation of the Coronavirus pandemic, Minister of State for Health has said.

This followed a review of Nigeria’s case definition, which led to the addition of three new countries – France, Germany and Spain - to the list, in addition five nations that were previously placed on it, Olurunnimbe Mamora told journalists in Abuja Monday.

The five countries previously on the list are China, Japan, Iran, Italy, and Republic of Korea.

“Travellers from these eight countries will undertake secondary screening at the point of entry. They are also advised to self-isolate for 14 days on entry,” the minister said.

The minister confirmed that isolation centres in the Nation’s capital are not yet ready, despite the rapid spread of Covid-19 (Coronavirus) across the world, including

Africa.

Mamora noted that Nigeria is at a high risk for Coronavirus. He however said government was still working to equip the centres in Abuja and across states with international airports to include Lagos, FCT, Port Harcourt and Kano.

“I assure you that we are doing everything possible to in terms of facilities in the isolation centres. I can assure you that there have been remarkable improvements and the centres in Abuja are almost ready,” the minister said.

Reacting to rumours that Africans are likely immune to the virus, the minister also advised Nigerians not to be complacent, noting that the consequence is huge.

“I have heard people say that the black man’s gene is resistant and so COVID-19 is not for us. Don’t forget, some black men even from Africa, even from Nigeria have died, unfortunately. We heard the story of one doctor who lived in Italy, a Nigerian, a black man.

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Nigeria to delay proposed $3.3bn Eurobond on coronavirus concerns Onyinye Nwachukwu, Abuja

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igerian government will delay this year’s issuance of the $3.3 billion it had initially planned because “the time is not ripe,” finance minister, Zainab Ahmed, said on Monday.

Speaking on the side-lines of the 1st International Conference on Nigerian Commodities market organised by the Securities and Exchange Commission (SEC) in Abuja, Ahmed said the government was still monitoring the markets and was yet to send in a formal request to the National Assembly for approval to enable it go ahead with the borrowing.

“We are in the process of doing that, I can tell you that we are not going out immediately because the market indication is not in favour of external borrowing at his time, even if we get the approval, we will defer it and watch the market, and go out only when the timing is right,” she told reporters.

The new Eurobond, the first after the 2018 issuance, @Businessdayng

will be used to partly fund the 2020 budget deficit and refinance an existing $500 million Eurobond due in January next year, the DMO had said.

Ahmed said the new coronavirus pandemic had now presented a situation for government to look inwards and diversify revenue sources away from oil. “First of all, it is a reality call for us, that we must develop a non-oil attitude to everything that we do, it is a time for us to review what we have planned,” she said.

According to Ahmed, government will prioritise spending in favour of major capital expenditure that will have greater impact, create jobs and visibility and also enhance the ease of doing business in the country.

“Any expenditure that is not critical, we must defer to do it at a later time when things become more normal,” the minister noted. As soon as we have approval from the president and the national economic council and also when we round up our consultation with the parliament.

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news Explosion: Resources to manage...

Continued from page 1

mediately boost the fund.

L-R: Valentine Buraimoh, chairman, Amuwo Odofin Local Government; Hakeem Odumosu, commissioner of police, Lagos Command; Tayo Bamgbose-Martins, commissioner for special duties and inter-governmental relations; Babajide Sanwo-Olu, governor, Lagos State; Obafemi Hamzat, deputy governor; Gbenga Omotoso, commissioner for information and strategy, and Anofiu Elegushi, commissioner for home affairs, during the governor’s visit to the scene of Abule Ado fire explosion in Lagos, yesterday.

Global central banks step up battle...

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stability of the system.”

The CBN also established a N50-billion facility through the Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) microfinance bank for households and small- and mediumsized enterprises (SMEs) that have been particularly hard hit by Covid-19, including but not limited to hoteliers, airline service providers, health care merchants, among others.

These are part of the six immediate policy measures the CBN announced on Monday to help combat the impact of the Covid-19 scourge on the economy.

The new policy measures come ahead of next week’s Monetary Policy Committee meeting where, according to CBN governor, Godwin Emefiele, there would be decisions on whether to cut benchmark rates or not.

But the CBN however slashed interest rates on all its applicable intervention facilities from 9 to 5 percent per annum for one year effective March 1, 2020.

Announcing these policy measures at an emergency press conference on Monday, Emefiele said the ravaging coronavirus scourge had given impetus for the CBN to provide support for affected households, businesses, regulated financial institutions, and other stakeholders in order to cushion the adverse economic impacts of the Covid-19 pandemic.

“All CBN intervention facilities are hereby granted a further moratorium of one year on all principal repayments, effective March 1, 2020. This means that any intervention loan currently under moratorium is hereby granted additional period of one year,” Emefiele said.

“Accordingly, participating financial institutions are hereby directed to provide

new amortization schedules for all beneficiaries,” he directed.

The Covid-19 pandemic has already led to unprecedented disruptions in global supply chains, sharp reduction in crude oil prices, turmoil in global stock and financial markets, widespread cancellations of entertainment and business events, lockdown of large movements of persons in many countries, and intercontinental travel restrictions across critical air routes in the world.

These outcomes have had serious adverse implications for key sectors, including but not limited to oil and gas, airlines, manufacturing, trade and consumer markets.

The Federal Reserve also swept into action in an effort to save the US economy from the fallout of the coronavirus, slashing its benchmark interest rate by a full percentage point to near zero and promising to boost its bond holdings by at least $700 billion, comprising of $500 billion of Treasury securities and at least $200 billion of mortgage backed securities (MBS).

Fed chairman Jerome Powell told a press briefing that the virus’ disruption to lives and businesses meant second quarter growth would probably be weak and it was hard to know how long the pain would last.

“We do know that the virus will run its course and that the US economy will resume a normal level of activity. In the meantime, the Fed will continue to use our tools to support the flow of credit,” Powell said.

The Fed pulled out some of the biggest weapons in its arsenal by cutting its key rate to 0.25 percent, matching the record low level it hit during the 2008 financial crisis and where it was held until December 2015.

The US central bank also www.businessday.ng

announced several other actions, including letting banks borrow from the discount window for as long as 90 days and reducing reserve requirement ratios to zero percent.

In addition, it united with five other central banks to ensure dollars are available around the world via swap lines. Powell said he did not think negative rates, which have been used in Europe and Japan, would be appropriate policy in the US. As the fallout spreads across the economy, the risk of a recession is mounting.

Goldman Sachs cut its GDP forecasts. It’s now predicting zero growth in the first quarter and a 5 percent contraction in the second for the American economy.

Africa’s second largest economy, South Africa declared a national state of disaster over the coronavirus outbreak and announced the continent’s most drastic measures yet to curb its spread. Stocks slumped to a six-year low, bonds fell and the rand weakened.

The government is imposing travel bans on some nationals, shutting schools and banning public gatherings of more than 100 people, President Cyril Ramaphosa said in a televised address to the nation, after an emergency cabinet meeting. The state is also finalizing a package of measures to minimise the effect of the global pandemic on the economy, he said.

“We have decided to take urgent and drastic measures to manage the disease, protect the people of our country and to reduce the impact of the virus on our society and on our economy,” he said. “There can be no half measures.”

South Africa, which reported its first confirmed Covid-19 infe ction on March 5, now has 61 cases of the disease. The bulk of those infected had travelled to other countries previous-

ly hit by the disease. Health authorities expect it is only a matter of time before local transmissions increase, and aim to minimize and slow those as much as possible to alleviate the impact on an already overburdened public health system.

Nationals from the US, UK, China, Italy, Germany, South Korea, Iran and Spain will be denied visas, while any foreigners who have visited a high-risk country in the past 20 days will also be refused entry, Ramaphosa said. Travellers from medium-risk countries such as Portugal, Hong Kong and Singapore will be required to undergo high-intensity screening.

To meet potential inc re a s e i n d e ma n d f o r healthcare services and products, the CBN has also opened for its intervention facilities, loans to pharmaceutical companies intending to expand/open their drug manufacturing plants in Nigeria, as well as to Hospital and Healthcare practitioners who intend to expand/build the Health facilities to first class centres.

Emefiele explained that the CBN would also consider additional incentives to encourage extension of longer tenured credit facilities. Banks are encouraged to continue to build capital buffers in order to improve resilience of the sector.

“The CBN stands ready to provide liquidity backstops as and when required in view of its role as banker to the Federal Government and lender of last resort. The CBN shall continue to monitor developments and will issue further updates as may be appropriate,” the CBN governor further assured.

Central bankers and investors have pressed governments to do more to support their economies, given monetary ammunition is running low and because fiscal policy can be targeted at corners of an economy that need it most.

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“The process of rebuilding this place is beyond what the government, either at the national level or state, can also undertake on its own. Given the level of destruction, I am immediately setting up what I have called an Abule Ado/Ado Soba Emergency Relief Fund.

It is a N2-billion relief fund and the state government will immediately be putting N250 million in that fund,” the governor said.

Three banks have opened accounts for the fund.

The governor also constituted an investigative panel to unravel the remote and immediate cause(s) of the explosion, which the management of the Nigerian National Petroleum Corporation (NNPC) linked to a gas pipeline.

The investigative panel, according to Sanwo-Olu, will have not more than two weeks to do an extensive investigation and come up with its findings.

So far, the death toll in the explosion has climbed to 20 after three more bodies trapped under the rubble were pulled out Monday. Lagos State Emergency Management

Authority (LASEMA) had on Sunday confirmed 17 people dead and 25 injured and taken to a hospital for treatment.

The committee will, also, based on its findings, recommend to the government what needs to be done to avert future occurrence of similar disaster. The committee headed by the deputy governor, Obafemi Hamzat, has commissioner for special duty as co-chairman.

Other members are the commissioners for education, finance, environment and water resources, permanent secretary; ministry of health, permanent secretary; works and infrastructure, Nigeria Police, senior special assistant on security and chairman of Amuwo Odofin Local Government.

Others are representative of the community development committees (CDC) and community development associations (CDA), representative of St. Bethlehem Girls College, which was reduced to rubble, commissioner for the ministry of physical planning, representative of the NNPC, national emergency management authority (NEMA) and two representative of the host community.

Nigerian crude settles below cost...

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price falls could really start hurting the big firms while Alan Gelder, of oil analysts Wood Mackenzie, says many North Sea oil operators are “beginning to really feel the pain” at current prices.

Already, many analysts have slashed their 2016 oil price forecasts, with Morgan Stanley analysts saying that “oil in the $20s is possible”, if China devalues its currency further.

Economists at the Royal Bank of Scotland say that oil could fall to $16, while Standard Chartered predicts that prices could hit $10 a barrel.

Big oil companies such as British Petroleum, Shell, Total and Exxon Mobil have weathered the storm by cutting back on billions of pounds of investment, and thousands of jobs have been cut.

For instance, Chevron is aggressively offering its 40 percent stake in the shallowwater Oil Mining Lease (OML)

86 and OML 88, which produce approximately 6,200 barrels of oil equivalent per day.

OML 86 and 88 contain 55 million barrels of yet-to-be exploited oil barrels and 79.3 billion cubic metres (2.8 trillion cubic feet) of undeveloped gas reserves, the document said.

Current oil price is a disastrous level for Nigeria’s economy, heightening fears of a second naira devaluation in four years since the plunge in oil prices which has led to dwindling export revenue and fast depleting foreignexchange reserves.

Nigeria’s stock trading session on Monday, March 16 closed in the red zone with about N14billion lost at the close of trading as at 2:30pm.

“However, negative developments in the oil price war or coronavirus could spark further selloffs in local equities”, said market analysts at Lagos-based Vetiva.

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CBN is likely to hold out on FX strategy changes for as long as possible, meaning the chances of further unorthodox policies are high,” analysts at Renaissance Capital Limited said in a recent report.

“Thus, the banks are likely to continue to bear the cost of macro stability. This has strategic implications for how the banks approach the future,” the analysts say.

In order to force Deposit Money Banks (DMBs) to extending credit to the economy, the apex bank hiked @Businessdayng

minimum Loans to Deposits ratio to 65 percent.

Despite the new LDR rules, the cumulative interest income on loans and advances of the 10 largest lenders increased by 2.87 percent to N1.44 trillion in December 2019, from N1.40 trillion in 2017, that compares to 8.89 percent increase in 2018/17 financial years.

The novel coronavirus that has killed over 6,500 and infected over 100,000 people across the world has disrupted global supply chain and upset the fragile balance in the oil market.

Tuesday 17 March 2020

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news Ounce of prevention is worth a pound of cure Continued from page back page

tainment measures. The most extreme models project the potential to have 50-80% of people will be infected, globally, and suggest up to 5% mortality rates from coronavirus.

The NCDC and the state and Federal Ministries of Health are doing laudable work to contain the cases that are known. The Emergency Operations Centres set up to manage exactly this type of pandemic, are working – and the staff are working hard to trace contacts and to locate people potentially exposed to the virus. The abundance of hand sanitizer and temperature checks at businesses are a step in the right direction. However, the risk of the unknown cases remains – and we do not have enough testing kits.

We need to take bold steps in Nigeria to address coronavirus before the unsettling projections manifest.

First, the Government of Nigeria should take the step to close our borders to non-Nigerians arriving from countries with any covid-19 cases. All people arriving from countries with cases need to stay under strict self-quarantine for 14 days – with continued follow up from the state and federal health teams working together with NCDC. This must be a strict requirement, and all arrivals, including VIP arrivals and those arriving by land need to be screened and documented.

Second, we should promote social distancing, preemptively cancelling non-essential inperson meetings, close universities and schools, cancel religious and social events, including weddings and funerals, and stop shaking hands for at least 30 days. This may seem extreme.

However, we have had extreme measures in the past – schools and universities have closed

for longer time periods due to student or teach strikes, and we restricted movements over the course of two weekends last year for the rescheduled elections.

Further, we have not yet closed our borders, and social distancing can help to protect the most vulnerable in the society. While we do not yet have evidence of community transmission, experience globally suggests that this will happen soon.

If the government will not order this level of social distancing, business leaders should take heed – we can make a difference if we take bold actions before it’s the trend , before we look more like South Africa or the UK than our present case load suggests.

Third, we need to deploy the best of artificial intelligence that already exists to help detect potential high impact locations, predict where the coronavirus may spread next, inform decisions by state and local executives, and contact individuals.

Finally, we need to make urgent investments in increasing our capacity to respond to the most extreme cases – we need more ventilators on standby and medical supplies, particularly protective wear for our medical professionals.

The argument is that we will not see many cases in Nigeria.

With a global pandemic, the aim is to be proactive, rather than reactive – one day of delay in strict measures, whether border closures or social distancing measures can have a significant impact on the outcomes. We need a clear plan in place to deal with the worst-case scenario, with continued hopes and prayers that it does not come into existence.

I think the “ounce of prevention is worth a pound of cure” motto attributed to Benjamin Franklin is still valid today.

We need to continue work to transform the economy and to

Source: Novel Corona Virus (COVID-19) epidemiological data since 22 January 2020. The data is compiled by the Johns Hopkins University Center for Systems Science and Engineering (JHU CCSE) from various sources including the World Health Organization (WHO), DXY.cn. Pneumonia. 2020, BNO News, National Health Commission of the People’s Republic of China (NHC), China CDC (CCDC), Hong Kong Department of Health, Macau Government, Taiwan CDC, US CDC, Government of Canada, Australia Government Department of Health, European Centre for Disease Prevention and Control (ECDC), Ministry of Health Singapore (MOH).

address preemptively the shock coronavirus could have directly and immediately on our people.

Nneka Eze is Partner and Nigeria Director at Dalberg Advisors, a global group working to build

a more inclusive and sustainable world.

Africa’s struggling health-care system face the Coronavirus test Continued from page back page

of how to deal with outbreaks.

As the disease—far more virulent than coronavirus, but less communicable—spread across Africa in 2014, Nigeria avoided an epidemic by tracking and isolating potential cases.

“The structures and emergency response strategies that worked well for Ebola are being reactivated,” says Niniola Williams, head of a nonprofit that battles infectious diseases in Nigeria.

Chikwe Ihekweazu, who leads Nigeria’s Center for Disease Control, is overseeing the country’s

response.

In February the German-trained epidemiologist joined a WHO

mission on a visit to Wuhan, the epicenter of the outbreak in China.

Since his return two weeks ago,

‘‘

The abundance of hand sanitizer and temperature checks at businesses are a step in the right direction. However, the risk of the unknown cases remains – and we do not have enough testing kits www.businessday.ng

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he’s been in voluntary isolation, working from a cramped studio at his home in an upscale neighborhood in Abuja.

While places such as the university hospital, with clean wards dating from the 1980s oil bonanza, are preparing, he says Nigeria is ill-equipped for an outbreak.

Clinics in smaller cities and the countryside lack everything from bandages to beds to physicians, and he has a staff of just 250, with five laboratories to test new infections in a country of 200 million.

The U.S. Centers for Disease Control and Prevention, by contrast, has 11,000 employees and @Businessdayng

hundreds of labs.

Ihekweazu fears the prevalence of malaria in Africa could make it hard to trace cases, as the ailments’ early symptoms are similar, and the widespread incidence of HIV has left many vulnerable to Covid-19.

“It’s a challenge around diagnoses, a challenge around care,” he says, hunkered in his home office, as two assistants work at the table in the adjacent dining room.

“My nightmare scenario is a situation like Italy, in which significant transmission has already started by the time you have a chance to control it.”

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Tuesday 17 March 2020

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41

news

Coronavirus: Why many are still at risk amid hand-washing practice …’58% of homes in Nigeria do not have hand-washing facilities’ CHUKA UROKO

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hough hand-washing remains the single most cost-effective do-it-yourself vaccine for preventing Coronavirus and other infectious diseases, many Nigerians are still at risk of contracting them.

It is believed in health management circles that hand-washing with soap and water can drastically reduce the risk of people contracting infectious diseases like the dreaded Coronavirus, which is now recognised as a public health emergency of international concern.

Furthermore, hand-washing is one of the simplest and most effective disease prevention methods available. It’s been shown to reduce cases of all respiratory diseases by 20 percent and diarrhoea by 30 percent, and can help healthcare centres be better placed to support a

response to an outbreak.

It is argued that if everyone, everywhere had a place to wash their hands with soap and water as often as needed, it would go a long way towards helping to contain and prevent the spread of many diseases.

But concerns remain. Figures from the WHO/UNICEF 2019 Joint Monitoring Programme (JMP) reveal that 58 percent of homes in Nigeria do not have hand-washing facilities with soap and water.

Added to that, WaterAid, an international not-for-profit organisation which works in 28 countries to change the lives of the poorest and most marginalised people, says the population of those in Nigeria that lacks access to handwashing facilities with soap and water is about 150 million, citing national statistics.

In Nigeria, only 5 percent of health facilities have combined basic water, sanitation and hygiene services while

just 13 percent of schools in the country have basic water and sanitation services.

It is against this backdrop that WaterAid, which is working to make clean water, decent toilets and good hygiene normal for everyone, everywhere within a generation, laments that no one is spared.

“Against this sad reality, large segments of the population—healthcare workers, babies, children, public workers – and indeed everyone – are at risk of contracting diseases like the Coronavirus,” confirmed Evelyn Mere, country director, WaterAid Nigeria, to BusinessDay. Mere emphasised that hand-washing with soap and water could reduce disease spread by nearly half, quoting the World Health Organisation 2019 public advisory which recommends regular and thorough washing of hands with soap and water to protect oneself and others.

Nigeria’s uLesson app to ease learning for secondary school students STEPHEN ONYEKWELU

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igeria’s education technology start-up uLesson has created a learning application for secondary school students across West Africa, designed to help them master different subject matters with ease.

The app offers students in Nigeria (SS1-3), Ghana (SHS1-3), Liberia (Grade 10-12), Sierra Leone (S1-3), and Gambia (S1-3) complete curriculum-relevant learning experience in Mathematics, Physics, Chemistry and Biology.

It prepares secondary school students for critical regional examinations such as the West African Secondary

School Certificate Examination, Secondary School Certificate Examination, General Certificate Examination and the Unified Tertiary Matriculation Examination. The app also covers international tests such as the Scholastic Aptitude Tests. uLesson employs a simple and personalised approach to learning, leveraging quality lesson plans from the accomplished tutors to amplify each student’s learning ability. This encourages deep and continued learning for students.

The learning content from the app is planned, executed and reviewed by subject matter experts using videos, interactive animations, quizzes, assessments and several years of official WAEC past exami-

nations along with solutions.

“Learning is a crucial part of a child’s quest for academic excellence and success in life.

The kind of universities and other tertiary institutions that they get into and, to some degree, the future that awaits them beyond their school years is largely determined by the learning opportunities and platforms available to them in their secondary school years,” Sim Shagaya, founder and chief executive officer of uLesson Education Limited said in an email to BusinessDay. It is with this awareness that we designed the uLesson App; to particularly meet the needs of African students at the secondary school level and at all levels in the future, Shagaya said.

5th Nigeria Energy Forum focuses on advancing sustainable energy development Isaac Anyaogu

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pcoming 5th Nigeria Energy Forum (NEF 2020) will focus on achieving the Sustainable Development Goal 7 and on how to facilitate investments in sustainable electrification, clean energy growth and efficient energy technologies, the organisers say.

Adekunle Makinde, former national chairman, Nigerian Institute of Electrical and Electronics Engineers (NIEEE), confirmed that the Power Africa Nigeria Power Sector Programme will deliver a capacity building workshop on scaling up the off-grid sector in Nigeria.

The Forum will be held from April 1 to April 2 at the Admiralty Centre, Naval Dockyards, Victoria Island, Lagos, Nigeria.

Makinde said a high-level

representative of the USAID Missions in Nigeria is expected to make a keynote presentation at the conference. The confirmed keynote speakers at NEF2020 are Chiedu Ugbo, MD/CEO, Niger Delta Power Holding Company; and Kings Adeyemi, NIEEE National Chairman”.

Chairman of the Forum, Oluwole Daniel Adeuyi, said: “This year’s forum will address key themes pertinent to accelerating clean energy growth, increasing distributed generation connections and facilitating private investments for sustainable energy development in Nigeria”.

Adeuyi said, “NEF2020 will feature over 4 top-class hands-on capacity building workshops on Industrial Energy Management, by UNIDO; The Nigeria Power Sector Program, by Power Africa NPSP; Women Leaders Energy Panel, by NIEEE-NEF; www.businessday.ng

and Clean Energy Trade and Investment Roundtable, by the UK Department for International Trade”.

Over 300 participants are expected to attend 8 different technical, investment and training sessions, acquire new skills through practical exposure to modern energy technologies, and engage with expert speakers, exhibitors and training providers.

Makinde commented that “30 expert speakers have will be participating at the forum including Jesse Otegbayo, Chief Medical Director, UCH, Nigeria, Weibe Boer, MD/ CEO, All On, Nigeria, Rolake Akikugbe-Filani, MD/CEO Energy Inc. Advisors, Sade Fagbola, General Manager, Solarquick, Nigeria and Segun Adaju, CEO Consistent Energy Ltd and President, Renewable Energy Association of Nigeria.” https://www.facebook.com/businessdayng

@Businessdayng

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news

Dollar closes at N378 as CBN Rivers Port to take delivery supplies $100m to BDCs of first RoRo vessel in April Hope Moses-Ashike

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oreign exchange market closed on Monday with naira appreciating to N378/$ from the earlier trading of N380/$ across Lagos.

The Central Bank of Nigeria (CBN) on Monday sold about $100 million to 5,000 Bureau De Change (BDC) operators across the country.

Aminu Gwadabe, president, Association of Bureau De Change of Nigeria (ABCON), told BusinessDay that the operators access $75,000 from the International Money Transfer Operators (IMTO).

He said the CBN should continue to give assurance on maintaining adequate liquidity in the financial market, and described the CBN’s six policy measures to combat the impact of coronavirus on the economy as a good development.

The policy measures announced on Monday include the creation of a N50 billion credit facility for households and Small and Medium Enterprises (SMEs) hard hit by the coronavirus.

With strong bargaining power you can buy dollar at the rate of N377 at Eko Hotel and Festac areas of Lagos State. But in Apapa, the foreign currency traded at N380 per dollar in the morning.

Other policy measures an-

nounced by the CBN include interest rate reduction on all intervention funds from 9 percent to 5 percent per annum for one year, effective March 1, 2020, regulatory forbearance for deposit money banks, strengthening of Loan to Deposit Ratio (LDR) policy, credit support for healthcare industry and one year extension of moratorium for all CBN’s intervention facilities.

Last week, the CBN fined the BDCs N5 million for selling dollars to unauthorised users. On Thursday last week, the CBN issued a statement, saying that it has begun a robust and coordinated investigation in collaboration with the Nigerian Financial Intelligence Unit (NFIU) and related agencies to uncover the unscrupulous persons and FX dealers who are creating this panic, and the full weight of our rules and regulations will be meted out to them, including, but not limited to, being charged for economic sabotage.

“In light of current circumstances and macroeconomic fundamentals, the CBN has not devalued the Naira.

Consequently, the CBN will invoke the full weight of applicable sanctions on any persons and authorized dealers found to be involved in such disruptive and speculative market behaviour,” the regulator said.

AMAKA ANAGOR-EWUZIE

E

fforts by the management of the Nigerian Ports Authority (NPA) to improve vessel traffic to the Eastern Ports has started yielding result as the Rivers Port in Port Harcourt is now expecting its first Roll on/Roll off (RoRo) vessel in the next couple of weeks.

This vessel, which would be the first RoRo vessel to berth in the history of the Rivers Port, is scheduled to depart the United States of America in the middle of March and arrive in Port Harcourt in April. RoRo vessels are usually loaded with automobiles.

According to a statement signed by Jatto Adams, general manager, Corporate and Strategic Communications of the NPA, the coming of the RoRo vessel, would be a milestone in the history of Rivers Port and the whole of the Eastern Ports.

“The introduction of RoRo operations will in no small measure increase the revenue base of Rivers Port in particular and NPA as a whole. The achievement is traceable to intentional commitment and landmark reforms that the current management of the NPA has instituted towards ensuring that all ports in

Nigeria become optimally functional,” Jatto stated.

Jatto further stated that the NPA has taken several steps to improve the volume of traffic in the Eastern Ports. He listed the steps to include the introduction of 10 percent discount in harbour dues on some categories of cargoes berthing at the eastern ports, dredging of Escravos Channel in Warri, and the deployment of equipment as well as machinery to improve operational efficiency of those ports.

He said others include constant engagement with stakeholders towards achieving industrial harmony and peaceful co-existence, conversations with shipping companies, which saw the deployment of flat bottom vessels to Calabar, working with the Nigerian Navy, the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Port Police Command to combat crimes on the nation’s waterways.

Jatto also stated that NPA was also engaging with the Federal Ministry of Works to ensure the rehabilitation of access roads to and from ports in the region.

He however stated that the management of the NPA has assured of its commitment to ensuring that all ports in Nigeria operate at maximum capacity to the advantage of all Nigerians.

WAEC commits to improve technological innovations in conduct of examinations KELECHI EWUZIE

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anagement of the West African Examinations Council (WAEC) has reaffirmed its commitment to bring about more technological innovations in the conduct of examinations and generation of income, as it marks 68 years of operation Monday.

The WAEC formed on March 16, 1952, remains the only colonial institution to have survived the centrifugal forces of the post-independence era in the West African sub-region.

Patrick Areghan, the head of Nigeria National Office of the WAEC, said the examination body would continue to strengthen the management of relationship with stakeholders, provision and improvement of working tools/ environment, managementstaff relations, promotion of industrial harmony.

Areghan speaking at the 68th anniversary of the Examinations Council in Lagos Monday observed that in the last 68 years, the Council had played an important role in the educational sector of Nigeria and the subregion at large.

According to Areghan, “It has recorded significant landmarks on the educational, economic and social land-

Lagos explosion: All Bethlehem Girls College students reported safe BUNMI BAILEY

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ll students from Bethlehem Girls College, which was d e va s t at e d by t h e Su n day gas explosion at Abule Ado, are safe, the Catholic Archbishop of Lagos State, has said.

All the students were rescued with the help of the first respondents and some t h a t w e re i n j u re d w e re rushed to the hospitals, according to Alfred Martins, the Archbishop, said in an emailed statement.

“The other students have been released to their parents and gone to their different homes. I want to state that all students of the school were reported safe.

Those who sustained injuries were promptly attended to in various hospitals within the environments,” Martins said.

Th e A rc hb i s h o p a l s o noted that the education department of the school along with the administrators of other Archdiocesan schools will see how the students of the college can be accommodated in the other schools so that their education is not disrupted.

Henrietta Alokha, the administrator of the s chool, an unidentifie d female security guard and other staff who died in the process of recusing the stu-

dents were commended for their brave act.

The impact of the explosion destroyed the staff quarters, administrative bui l d i ng, t he re f e c tor y, hostel buildings except the convent housing the nuns in charge of the school.

The Archbishop commended the Lagos State Emergency Management Agency (LASEMA) Nigeria Emergency Management Agency (NEMA), the Red Cross, and various security agencies for their prompt response in ensuring that the situation did not get worse.

“We are grateful to Babajide Sanwo-Olu, the governor of Lagos state for his call to express the sympathy of the government and for setting up a Committee to investigate issues surrounding the explosion.

We also wish to commiserate with the families of all those who died in this sad incident and pray for the repose of the souls of the departed, the quick healing of the injured and those who lost their properties,” he said.

The explosion was triggered by a truck that hit gas bottles stacked up in a gas processing plant near a pipeline in Lagos occurred in the early hours of Sunday morning, the statement explained. www.businessday.ng

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scape of the country; ensuring sustainable human capital development that has impacted positively on national development”.

The head of Nigeria National Office further assures that the present Administration would build on the achievements of the immediate past Administration, improve on them and also implement new ideas and programmes/projects that will enhance the services of the Council to its stakeholders.

Pateh Bah, the registrar, WAEC, called on staff to double their effort to ensure that they consign the leakage of question papers permanently to history and suppress all other forms of malpractice towards extinction.

Bah, who oversees operation as registrar in The Gambia, Ghana, Liberia, Nigeria and Sierra Leone, assured that before long, examination administration and most other operations must be technology-driven.

“Best conditions of service and motivational packages are to be replicated across the national offices as a matter of urgency. Officers of high intellectual standing shall be identified and sponsored to deliver academic papers at international conferences to brighten the Council’s image”, Bah said.

Tuesday 17 March 2020

BUSINESS DAY

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Tuesday 17 March 2020

news

Appeal Court orders stay of execution of Oshiomhole’s suspension Felix Omohomhion, Abuja

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he Court of Appeal sitting in Abuja on Monday ordered a stay of the execution of the suspension order placed on the National Chairman of the All Progressives Congress (APC), Adams Oshiomhole by an Abuja High Court on March 4.

In a unanimous ruling by the 3-man panel of justices of the Appeal Court, led by Justice Abubakar Yahaya, held that the suspension order be lifted until the determination of hearing of the substantive suit.

In an exparte application filed by Oshiomhole, he prayed the court to halt the suspension order on the grounds that there would be no status quo before they came to court, if the appellate court fails to intervene.

His lead lawyer, Wole Olanipekun had informed the Court that there is a National Executive Committee meeting of the APC slated for Tuesday, March 17, wherein the applicant would be excluded going by the suspension order of the lower court.

Olanipekun submitted that the order has already created a state of disorder in the party that could degenerate if the appellate court failed to intervene.

The senior lawyer who noted that time is of essence because of the seriousness of the issue, said that there will be an irredeemable damage if the court does not intervene.

In its ruling, the appellate court held that status quo can only be maintained if the order of the lower court is stayed.

“We have looked at the appli-

cation and we are of the view that the image of emergency has been painted. There is an information that NEC would hold meeting tomorrow and the applicant will not be there,” Justice Yahaya.

“Justice would not have been served if the applicant is not in that meeting. The status quo can only be maintained if there is a stay.

“We find merit in the application. We hereby order a stay of execution of the lower court made on March 4, 2020, pending the hearing of the notice of appeal slated for Friday, March 20, 2020”, the panel held.

The court in addition ordered all parties in the suit not to take any further steps that would affect the ruling of the court. “We hereby give an order of injunction restraining the respondents or their agents from taking further steps until the determination of the substantive suit.”

The court of Appeal in addition made an order of accelerated hearing in the matter.

Justice Yahaya however, implored politicians to learn to resolve their problems without involving the courts. The court had earlier on Monday adjourned without a new date or any reason for the adjournment.

The appellate court, which announced through one of the registrars that the court will no longer sit in the appeal, did not offer any reason for the sudden change of mind especially when the date had already been slated for hearing of the suit filed by Oshiomhole challenging his suspension as the National Chairman of the party.

Zenith Bank fetes shareholders with dividend payout of N87.9bn SEGUN ADAMS

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hareholders of Zenith Bank plc, on Monday, at the 29 annual general meeting (AGM) at the Shehu Musa Yaradua Centre, Abuja, unanimously approved the proposed final dividend of N2.50 per share, bringing the total dividend payment for the 2019 financial year to N2.80 per share with a total value of N87.9 billion.

This followed the recent release of the bank’s audited financial results for the 2019 financial year.

According to the audited financial results, Zenith Bank recorded a profit after tax (PAT) of N208.8 billion, an increase of 8 percent from the N193 billion recorded in the previous year, thus achieving the feat as the first Nigerian bank to cross the N200 billion mark.

The Group also recorded a growth in gross earnings of 5 percent, rising to N662.3 billion from N630.3 billion reported in

the previous year.

This growth was driven by the 29 percent increase in noninterest income from N179.9 billion in 2018 to N231.1 billion in 2019. Fees on electronic products continue to grow significantly with a 108 percent Year on Year (Y-o-Y) growth from N20.4 billion in 2018 to N42.5 billion in the current year. This is a validation of the bank’s retail transformation strategy which continues to deliver impressive results.

Profit before tax also increased by 5 percent growing from N232 billion to N243 billion in the current year, arising from topline growth and continued focus on cost optimisation strategies. Cost-to-income ratio moderated from 49.3 percent to 48.8 percent.

The drive for cheaper retail deposits coupled with the low-interest yield environment helped reduce the cost of funding from 3.1 percent to 3.0 percent. However, this also affect-

ed net interest margin, which reduced from 8.9 percent to 8.2 percent in the current year due to re-pricing of interest-bearing assets. Although returns on equity and assets held steady YoY at 23.8 percent and 3.4 percent respectively, the Group still delivered improved Earnings per Share (EPS), which grew 8 percent from N6.15 to N6.65 in the current year.

The Group increased its share of the market as it secured increased customer deposits across the corporate and retail space as deposits grew by 15 percent to close at N4.26 trillion. Total assets also increased by 7 percent from N5.96 trillion to N6.35 trillion.

The Group created new viable risk assets as gross loans grew by 22 percent from N2.016 trillion to N2.462 trillion. This was executed prudently at a low cost of risk of 1.1 percent and a significant reduction in the non-performing loan ratio from 4.98 percent to 4.30 percent.

Prudential ratios such as liquidity and capital adequacy ratios also remained above regulatory thresholds at 57.3 percent and 22.0 percent, respectively.

In recognition of its track record of excellent performance, Zenith Bank was voted as the Best Commercial Bank in Nigeria 2019 by the World Finance and the Best Digital Bank in Nigeria 2019 by Agusto & Co. The Bank was also recognised as Bank of the Year and Best Bank in Retail Banking at the 2019 BusinessDay Banks and Other Financial Institutions (BOFI) Awards.

Most recently, the Bank emerged as the Most Valuable Banking Brand in Nigeria, for the third consecutive year, in the recently released Banker Magazine “Top 500 Banking Brands 2020”, the Best Bank in Nigeria 2020 in the Global Finance World’s Best Banks Awards 2020, and the Bank of the Decade (People’s Choice) at the Thisday Awards 2020.

Air France-KLM to ground its entire Airbus 380, Boeing 747 fleet over coronavirus IFEOMA OKEKE

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ir France and KLM Airlines have said they will be grounding the entire Airbus 380 and Boeing 747 aircraft on their fleet as a result of the coronavirus (COVID-19), which has had a drastic effect on passenger traffic.

Faced with these growing restrictions on the possibility of travelling and a strong downward trend in demand, which has resulted in a drop in traffic and sales over the last few weeks, the Air FranceKLM Group is obliged to gradually reduce its flight activity very significantly over the next few days, with the number of available seat kilometres (ASK) potentially decreasing between 70 and 90 percent.

This reduction in capacity is currently scheduled to last two months, and the group will continue to monitor the evolution of the situation on a daily basis and adjust it if necessary.

The COVID-19 crisis has continued to spread in recent days, leading many countries to take increasingly stringent measures in an attempt to slow the rate of spread of the epidemic.

Some countries have imposed constraints on the

movement of travellers from France, the Netherlands or more broadly from Europe.

In France, the transition to a level three public health emergency requires the closure of all non-essential services since last weekend. To deal with this situation, the group has already taken a number of strong measures to secure its cash flow.

Additional savings measures have been identified, which will generate €200 million in 2020, an initial review of the investment plan has reduced the capital expenditure plan by €350 million, to which will be added the impact of the decline in activity on the amount of maintenance investments.

Air France and KLM will be consulting with their elected employee representatives on measures to take into account the impact of the expected decline in activity, including a project to implement partial activity.

Last week, the Air France-KLM Group drew a revolving credit facility for a total amount of €1.1 billion and KLM drew a revolving credit facility for a total amount of €665 million. As of March12, the Group and its subsidiaries had more than €6 billion in cash and cash equivalents.

L-R: Olubunmi Ogunbo, unit head, management information system, Wema Bank; Oluwatoyin Karierin, chief compliance officer, Wema Bank; Abimbola Agbejule, head, corporate sustainability and responsibility, and Chika Adun, unit head, business process re-engineering, during the International Women’s Day event held at the Wema Towers in Lagos.

Access Bank completes milestone N15bn Green Bond cross-listing

Nigeria’s formal retail sector key to unlocking new growth frontiers - expert

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Daniel Obi

ccess Bank has completed the listing of its N15 billion green bond on the Luxembourg Stock Exchange (LuxSE).

The 15.50% fixed rate, unsecured climate-credential green bond, is the first of its kind to be issued by a Nigerian corporate and represents a major milestone in the development of the local green finance market.

The bond was first listed on the Nigerian Stock Exchange (NSE) in 2019.

According to Herbert Wigwe, group managing director, Access Bank, the cross-listing of the bond was done to “make a material contribution to addressing climate change, and provide institutional investors with a means of accessing sustainable investments using a familiar, low-risk vehicle.”

He further affirmed that “the Bonds would deliver increased visibility for issuers, as crosslisting improves the green bond issuers’ access to a deep

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pool of green capital domestically and internationally.”

The net proceeds from the issue, which has a maturity period of 5 years, will be directed towards financing new loans and refinancing existing loans, per Access Bank’s Green Bond Framework.

Stating the bank’s position on the milestone listing, Omobolanle Victor-Laniyan, the head, sustainability, Access Bank, said, “Access Bank supports the global climate change mitigation and adaptation agenda which seeks to promote responsible green lending globally, across its banking network.

Being a pioneer, both in domestic and international capital markets, Access Bank views the global drive for responsible and sustainable green financing as an opportunity for the Bank to raise capital for the creation of assets through climate financing.”

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mid growing concerns about falling oil prices and the Coronavirus epidemic slowing global stock markets, stakeholders in the Nigerian retail sector have been charged to reposition the sector to offer a buffer against looming economic uncertainties.

Ade Sun-Basorun, CEO, FoodCo Nigeria Limited, made the call in a statement while reacting to recent media reports of a slump in growth projections for the country, currently ranked as Africa’s largest economy.

He said: “The present precarious economic climate emphasizes the need for all stakeholders to collaborate in actualising government’s efforts at diversifying the economy.

“Forinstance,theretailmarket segment is currently the third highest contributor to GDP at 16.1 percent and the Nigerian Stock Exchange (NSE) estimates that it will grow by 20.4 percent to hit @Businessdayng

N454 billion by 2025. The current challenges notwithstanding, it is clear that the sector is critical to driving new growth frontiers for the country particularly if more formalized structures are put in place to optimally harness opportunities within the ecosystem.

“In its current state, the organized consumer goods sector presents a paradoxical situation.

While some Fast-Moving ConsumerGoods(FMCG)companies have delivered poor results within the past few years, there have also beennotableexpansionsbysome key players, especially within the formal retail space.

“Looking at the future, there are still ample grounds to be optimistic about opportunities within the sector given the country’s bourgeoning consumer market currentlyestimatedat52million,a large middle class, pre-dominant youth population and rapid urbanization. It therefore behoves sector stakeholders to make a critical assessment of inherent potentials across the value chain to chart new channels for growth.”

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Tuesday 17 March 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

US workers brace as coronavirus ripples through real economy

Service industries that have driven jobs growth look among the most vulnerable Andrew Edgecliffe-Johnson and Brendan Greeley

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t was November 2007 when Paul Steven Singerman’s Florida law firm led the Chapter 11 bankruptcy filing for Levitt and Sons, the largest by a homebuilder in US history at the time. The fallout from the coronavirus pandemic may not be as lasting as the recession which that corporate collapse heralded, he thinks, but — in the short term at least — he sees it being more severe.

Mr Singerman was in bankruptcy court again on Monday last week, expecting a smooth sign-off on a sale of the Palm steakhouse chain to Golden Nugget, a casino operator. As the Dow shed 2,000 points that afternoon, however, the buyer demanded $5m off the $50m price tag it had agreed just 10 days earlier. “Our client didn’t have an alternative” but to consent, Mr Singerman said.

If housebuilders led America into its last recession, restaurants, casinos, hotels, cruise ship operators and airlines are leading the way this time. And after just four weeks in which US equity markets swung from hitting highs to pricing in the reversal Mr Singerman fears, the impact is starting to show in the real economy.

The outplacement firm Challenger, Gray & Christmas last week attributed more than 600 job cuts so far to the pandemic, including 145 drivers at the Port of Los Angeles and 18 at a toy company, both of which it traced back to the virus bringing Chinese suppliers to a temporary halt.

But the greater toll may be in in-

People stand outside the gates of Disneyland Park on the first day of its closure due to the coronavirus © AFP

dustries that have nothing to do with global supply chains, economists believe. Ioana Marinescu, a labour economist at the University of Pennsylvania, predicted a collapse in what she called “human contact industries” such as restaurants, bars and theatres.

Most services are human contact, and that’s exactly what people are trying to avoid Ioana Marinescu, University of Pennsylvania Even before cities from New York to Chicago decided this weekend to close bars and restaurants, many were suffering because their customers chose to avoid crowds.

Gotham Bar and Grill, a New York staple, announced last week that it was closing for good because “the unforeseen situation created by the

coronavirus has made operation of the restaurant untenable”.

The Stranger, an indie newspaper in Seattle which relies on ads for the places to which crowds go, similarly reported that it had “temporarily” laid off 18 employees because of what it called “the hellscape of unforeseen economic events brought on by the coronavirus”.

Broadway theatres, baseball stadiums and The American Dream Mall, a shopping centre where New Jerseyans could ski indoors, have closed. Even WWE had to withdraw its earnings guidance last week, unable to say how much longer its wrestlers could keep performing for the crowds.

“It’s not just that people feel less spend-y right now, it’s that they’re terrified to be in those places,” said David

Autor, professor of economics at the Massachusetts Institute of Technology, who sees the people who work in services being hardest hit.

The food services industries alone employ 12m people in the US, up 30 per cent in the past decade.

“It’s not a long-term thing, but it’s going to cause a huge amount of pain,” Mr Autor predicted.

While the likes of Disney, which shut its theme parks for the first time since 2001, pledged to keep paying idled workers, few small businesses have the resources to do so for long.

Most recessions weigh harder on manufacturing than on services, Ms Marinescu points out, as people tend to still need haircuts even if they cannot afford to buy a car. Early survey data from China, however, show that during the peak of the

outbreak there, services collapsed.

“Most services are human contact, and that’s exactly what people are trying to avoid,” she said.

Those industries also tend to be dominated by smaller businesses with less cash on hand and less access to credit, she notes. Restaurants in particular have a high failure rate at the best of times. “We can expect those businesses to fail,” she said.

Even as some cities encourage food delivery to keep restaurants afloat, gig economy workers are also at risk as the pandemic changes consumers’ behaviour, added Karen Harris, managing director of Bain & Company’s macro trends group.

“If you decided to take your kids out of school and stay at home you’re going to spend more on groceries but if you have a dog walker you don’t need that person, so you are withdrawing spend.”

Concern about the human cost is growing with economic fears. A group of large New York landlords has agreed to go easy on eviction notices, while the Salvation Army warned that it was preparing for “a significant increase” in the need for emergency assistance from lowwage employees facing lay-offs.

Travel and hospitality workers were among those most at risk, it noted, and these are industries that have driven much of the job growth in the US since the last recession.

As events were scrapped and companies clamped down on travel, hotel occupancy in New York fell 13 per cent in the week of March 3 while Seattle experienced a 26 per cent drop, according to STR, a hospitality data company. By last week, one hotel investor told Mr Singerman, occupancy in some properties had fallen to single digits.

Saudi Aramco doubles down on output hike as price war intensifies State-backed company says it can sustain 12m barrels a day for up to a year Anjli Raval

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audi Aramco’s chief executive doubled down on the kingdom’s commitment to raise production in a price war with Russia and other oil nations, saying the state energy giant can sustain maximum levels of output without any additional capital spending.

A week ago Saudi Arabia slashed selling prices and announced plans to ramp up exports after Moscow refused to back a plan by Saudi Arabia-led Opec to deepen production cuts in response to the coronavirus outbreak, which has slashed demand.

Amin Nasser, speaking to analysts on Monday after Saudi Aramco’s full-year results announcement, said the company could sustain its maximum production

capacity of 12m barrels a day for up to a year without any additional capital expenditure and could ramp up further “if required”.

In April, Saudi Arabia will supply the market with 12.3m b/d including oil from storage. Mr Nasser said levels in May were unlikely to be any different, comments that added further pressure on oil prices which have fallen to four-year lows Mr Nasser said the company had been issued a directive by the government to expand maximum capacity to 13m b/d, which Saudi Aramco is doing on an “accelerated” timeline. “We see the increased level of production having a positive impact on our financials in the long term,” said Mr Nasser.

In the lead up to the company’s December stock market offering, Saudi Aramco sought to show www.businessday.ng

itself as no different to other international energy majors. But the latest moves by the kingdom emphasise the extent to which it is an arm of the state, which owns 98 per cent of the company.

On Monday, Brent crude, the international oil benchmark, fell below $30 a barrel for the first time since 2016 as the spread of the coronavirus hits the global economy and financial markets.

Saudi Aramco said it would cut capital spending in a lower oil price environment to between $25bn and $30bn in 2020, down from $35bn in 2019. The new targets would not include the expenditure required to deliver the 13m b/d maximum capacity target ordered by the government, the company said.

It was still unclear how long it would take for Saudi Aramco

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to reach this goal, with historical capacity increases taking years, Mr Nasser said.

Saudi Aramco until now has consistently tested oil production levels of around 11m b/d. But it will take billions of dollars of investment into how Saudi Aramco manages its reserves, oil production and exports to increase maximum capacity beyond 12 b/d.

Neil Beveridge, senior oil and gas analyst at Bernstein, said: “We expect this [13m b/d maximum capacity] can be achieved by 2023 with facilities expansion and increasing flow rates from existing fields.”

In a sign that the world’s most profitable company and largest oil producer is preparing to live with low prices for some time, Saudi Aramco’s chief financial officer Khalid al-Dabbagh said he was @Businessdayng

“very comfortable” with crude prices of around $30 a barrel.

Saudi Aramco, he said, was able to meet its $75bn annual dividend payout commitment even in this environment.

Saudi Arabia relies on Saudi Aramco’s dividend to fill government coffers. The company, while still hugely profitable versus other international oil majors, took a financial hit in 2019, with net income down 21 per cent year on year to $88.2bn, as crude prices fell and it suffered from lower chemicals and refining margins.

This is the first earnings announcement since it listed its shares in a mega $29.4bn offering that valued the company at $1.7tn.

Saudi Aramco’s stock price has fallen below its flotation price of SR32 to SR28.70 amid the oil market turmoil.

Tuesday 17 March 2020

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FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Wall Street stocks tumble 6% despite sweeping Fed intervention European markets also dive as fears grow over economic disruption caused by coronavirus FT reporters

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S sto cks tu mb l e d in volatile trading on Monday after sweeping central bank intervention failed to prop up investors’ confidence or staunch the wave of volatility that has shaken global markets.

The S&P 500 index lost as much as a tenth of its value before trimming its losses to around 6 per cent. The fall came even after a “circuit breaker”, meant to ease panicky selling, kicked in and paused trading for 15 minutes.

The FTSE 100 tumbled more than 7 per cent as a burst of selling rippled through stock markets despite a one percentage point rate cut by the Federal Reserve before markets opened overnight.

The London blue-chip index has fallen to its lowest level since 2011 as losses this year spiral to more than 30 per cent.

The declines were even more severe across continental Europe, as Germany’s Dax and France’s CAC 40 each lost around a tenth of their value. The Stoxx Europe 600 index, a barometer of the region’s largest companies, fell 10 per cent.

Airline stocks were especially hard hit as carriers around the globe grounded the majority of their fleets and took steps to conserve cash. British Airways parent IAG tumbled more than 25 per cent, while Air France-KLM dropped 18 per cent and Germany’s Lufthansa shed 11 per cent.

Shares in lenders also came under intense pressure. The S&P 500 bank index plummeted 17 per cent in the worst fall for the gauge since the depths of the 2008-09 financial

crisis. JPMorgan Chase, Bank of America, and Citigroup dropped nearly 20 per cent, while Wells Fargo fell 14 per cent. Goldman Sachs and Morgan Stanley, Wall Street’s two biggest investment banks, fell more than 10 per cent.

The Federal Reserve cut US interest rates on Sunday and joined forces with other central banks in an attempt to prevent a more severe economic downturn and market dislocation caused by the coronavirus pandemic. The Fed slashed its main policy rate by a full percentage point to between zero and 0.25 per cent — a level last seen in 2015. It also announced at least $700bn in asset purchases.

“The Fed has thrown everything at this. If we are now facing the end of central bank action, it means we are on our own,” said Seema Shah, chief strategist at

Principal Global Investors. “There is a fear settling in the market; investors are terrified that this was all that was left.”

Volatile trading in global stocks has reached its fourth week as the extent of the pandemic’s economic disruption becomes clear. US stock markets fell nearly 10 per cent on Thursday, before swinging higher by the same proportion in the following session, in outsized daily moves not seen in more than a decade.

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Sign up here Joachim Fels, Pimco global economic adviser, said the concern was “what currently looks like an inevitable recession . . . turning

into a depression, and financial markets [going] from a drawdown to a meltdown”.

The 10-year US Treasury yield slid 0.17 percentage points to 0.7810 per cent as investors moved into the haven debt and responded to the Fed’s cut. Yields fall as bond prices rise.

The yen, also seen as a haven during times of uncertainty, rose more than 2 per cent to ¥105 a dollar.

Oil prices plunged as the virus started to hit demand in Europe and North America. Brent crude, the international marker, fell almost 10 per cent to just over $30 a barrel.

While the Fed’s measures were stronger than expected, news of the outbreak’s spread over the weekend had meant that investors were already girding themselves for another market drop.

Zach Pandl, an analyst at Goldman Sachs, said that central bank action “should significantly ease funding market stress, particularly the dollar shortage overseas”. More government spending will be needed to damp demand for US treasuries, he added.

The Fed might need to keep its benchmark rate at the so-called zero lower bound until the end of 2022 and increase its asset purchases, UBS said on Monday.

The Bank of Japan on Monday followed the Fed’s actions by announcing it aimed to double its purchases of exchange traded funds to ¥12tn ($112bn) a year.

However, the central bank left its key policy rated unchanged at -0.1 per cent. Japan’s benchmark Topix closed 2 per cent lower after the announcement.

In other Asia-Pacific markets, Australia’s S&P/ASX 200 index plummeted 9.7 per cent while Hong Kong’s Hang Seng index fell 4 per cent and China’s CSI 300 closed down 4.3 per cent.

“After the Fed’s rate cut, it is getting difficult to rule anything out from what central banks will do,” said a Tokyo-based broker. “I have to tell clients that anything’s possible.”

Meanwhile, China’s central bank on Monday injected about Rmb100bn ($14.3bn) of liquidity into financial markets via its medium-term lending facility.

But traders said it was unlikely to cut its benchmark lending rate immediately because this might not help the real economy, with supply chains and other industries hit by the coronavirus.

New Zealand’s central bank also cut interest rates by 0.75 percentage points to 0.25 per cent.

Bank of Japan ploughs deeper into stocks to ease coronavirus fears

Central bank signals willingness to cut rates further into negative territory ‘if needed’ Leo Lewis and Kana Inagaki

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he Bank of Japan took its controversial equity-buying programme deeper into uncharted territory on Monday, doubling its annual purchasing target to ¥12tn ($112bn) while also rolling out a new lending facility, in an attempt to match the shock value of the US Federal Reserve’s interest rate cut at the weekend.

Analysts said the moves could provide some stability to markets but may not be enough to blunt the economic effects of the coronavirus shock. Critics also argued that the measures exposed a shortage of options left to a bank that has long been pursuing ultra-loose monetary policy, holding rates at zero or below for about a decade.

The decision “indicates that the BoJ has effectively reached the limit of monetary accommodation”, Citigroup economists Katsuhiko Aiba and Kiichi Murashima said in a note to clients.

The package represented Japan’s contribution to a co-ordi-

nated central bank response to the market turmoil that has gripped all asset classes as the coronavirus outbreak has spread. The decision came with a pledge to provide ample yen funds and continue buying Japanese government bonds, and followed an emergency meeting that the BoJ brought forward by two days.

The BoJ opted not to lower interest rates further into negative territory, but its governor, Haruhiko Kuroda, signalled that more cuts were an option. He stressed that for now, the priority was to provide smooth corporate financing and stability to financial markets. The benchmark Topix index slipped after the bank’s announcement, closing down 2 per cent.

The BoJ has been buying exchange traded funds for almost 10 years to stabilise the market, lower the risk premium and encourage investment. The new upper limit gives the BoJ the scope but not the obligation to buy twice its current target amount.

The increase puts the central www.businessday.ng

bank on a possible course to overtake the Japanese state pension fund, the GPIF, as the biggest holder of domestic stocks by the end of the calendar year. By then its portfolio of ETFs could exceed ¥40tn ($372bn).

But traders noted that the BoJ was conspicuous by its absence from the market on Monday, buying only ¥2.7bn of real estate investment trusts and ETFs and breaking its traditional pattern of buying big in the afternoon sessions when the market has dropped more than 0.5 per cent in the morning. So far in March, the central bank has bought a little over ¥600bn of ETFs, about 80 per cent of which track the Topix index.

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To help companies cope with the pandemic, the BoJ also said it would set up a new one-year facility that would offer loans against

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corporate debt as collateral at a zero per cent interest rate. It also increased the upper limit for its purchases of commercial paper and corporate bonds by ¥2tn.

Mr Kuroda said the current turmoil differed from the 2008 Lehman crisis, which stemmed from troubles with financial institutions, but he warned that there was high uncertainty about the depth of the virus’s impact on the global economy.

Shortly after the BoJ decision, Japanese prime minister Shinzo Abe described it as “swift and appropriate”, in light of the market turmoil around the world.

Despite the eye-catching increase in the bank’s equity purchase target, some economists said it would not make a significant impact.

Marcel Thieliant, a Japan economist at Capital Economics, said that Monday’s measures “lack teeth” and that the BoJ would be forced into eventually lowering its short-term policy rate.

Others suggested the BoJ had @Businessdayng

held off from cutting rates since the US dollar had not weakened to the ¥100 mark, which would put pressure on Japan’s exportdependent businesses. On Monday it was trading around ¥105, little changed over five days.

“The BoJ may have preserved the option for a cut in interest rates to prepare for what could be a long battle,” said Takahide Kiuchi, executive economist at Nomura Research Institute and a former policy board member of the BoJ. Masamichi Adachi, Japan economist at UBS, said he was sceptical that the BoJ’s move would produce any economic boost, but warned that when considering the likely effects on markets and the economy, the focus should be on what would have happened without it.

“This was an emergency backstop by the lender of last resort,” he said. “It is about turning a big negative into a smaller negative.

If they had not done this, the situation would have been much worse.”

Tuesday 17 March 2020

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ANALYSIS FT Containing coronavirus: lessons from Asia

The effective response in Taiwan and South Korea has been shaped by traumatic memories of Sars Kathrin Hille and Edward White

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hen Su Ih-jen looks at the latest coronavirus statistics, he cannot help but feel proud. With just 59 confirmed cases and one death as of Sunday, Taiwan has managed to avoid a major outbreak of a disease which has paralysed neighbouring China. Apart from most people wearing masks on public transport, life goes on as usual.

The experience is a stark contrast to 2003, when Prof Su, then the director of Taiwan’s Centers for Disease Control, was at the forefront of the battle to contain severe acute respiratory syndrome, which had a devastating impact on the country.

The mood in Taiwan also drastically differs from the sense of panic and confusion in Europe and the US, where the arrival of the pandemic at their doorstep has come as such a surprise to many.

“The situation in other countries now resembles the situation we were in during the first few weeks of the Sars spread in Taiwan in early 2003,” says Prof Su. “You are not ready, you have no experience.”

The good news for the western governments now scrambling to respond is that the measures Taiwan and other Asian countries have implemented over the past three months have been shown to slow and even blunt the impact of disease.

Early travel restrictions, aggressive testing and screening of contacts and strict quarantine rules have been key. Universal healthcare, clear management structures for the public health response and proactive communication to get the population on board have also helped.

These policies have managed to contain the virus in Taiwan and Singapore and reduce or slow infection rates in South Korea, Hong Kong and Japan.

While the World Health Organization has suggested other countries learn from China, which it has praised for “perhaps the most ambitious, agile and aggressive disease containment effort in history”, some health experts believe that Asia’s democracies, such as Taiwan and South Korea, may be better models for epidemic management in western countries, given the different nature of the Chinese political system.

“One of the most important factors in the success of our response has been transparency,” says Chang Shan-chwen, a leading expert on infectious diseases and convener of the expert advisory panel to the Central Epidemic Command Center, which manages Taipei’s response. “In [China’s] autocratic system, every citizen

will stay at home when told so.

But this is something which cannot be easily achieved in free and democratic countries.”

The bad news for western governments, however, is that one vital component of the Asian response cannot be replicated.

The region’s approach has been shaped by the traumatic memories of other recent epidemics — most notably Sars — which meant that governments were better prepared to react fast and forcefully and populations much more willing to co-operate.

Leighanne Yuh, an expert in Korean history and culture at Korea University, says the experience from Sars and other recent epidemics, as well as watching the rapidity of the coronavirus’s spread through China, has instilled a “sense of urgency” and adherence to “social courtesies” across the country.

“Because South Korea has had these types of outbreaks already occur, they know the kind of steps that need to be taken and how serious the danger is,” she says.

“If we compare it to the United States, which hasn’t really been exposed to these things, at least for a long time, their response has been quite different.”

For South Korea, the Asian country that suffered the biggest outbreak apart from China, testing as many people as possible has been a key pillar in its strategy for combating coronavirus.

At “drive-through” testing facilities, officials clad in white hazmat suits can be seen leaning into cars to take fluid samples from the driver and passengers. The test results are returned in a matter of hours and help reduce crowding and contamination exposure at www.businessday.ng

hospitals.

Even more ubiquitous are alerts flashing on smartphone screens updating the public on new infections in their area, as well as health officials’ twice-daily broadcasts updating containment efforts. The focus on open communication, coupled with an online system to track those people who have been infected, has helped limit the spread of the virus.

The approach appears to be working. South Korea was stunned in late February after a cluster of cases connected to the Shincheonji Church of Jesus, a quasiChristian sect, saw the number of infections soar to more than 5,000 from fewer than 50 over the course of 10 days. Now, 270,000 tests and countless alerts and press conferences later, the number of daily new cases has declined from more than 900 at its peak to 76 on Sunday, with a total of 8,162 people infected.

The country is not yet out of the woods — 100 cases discovered at a call centre in Seoul last week left officials on edge about further clusters. But the success to date reflects that tough lessons have been learnt from the Middle East respiratory syndrome coronavirus, which infected 185, killed 38 and caused public panic in 2015.

In June that year a special WHO committee lambasted Seoul for a series of critical shortcomings including a lack of awareness of the virus among both healthcare workers and the general public, poor infection control measures in hospitals and infected patients failing to remain isolated.

Jegal Dong-wook, a professor of laboratory medicine at the Catholic University of Korea Seoul St Mary’s Hospital, says

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many hospitals have since been equipped with infection control units and negative pressure rooms, which are used to isolate infected patients. The country’s infectious disease guidelines were also overhauled, advising people with respiratory symptoms to first visit a specialist screening centre rather than hospitals.

The Mers outbreak also exposed a lack of access to adequate testing kits, which left hospitals scrambling to deal with a rising number of suspected cases.

Hong Ki-ho, an official at the Korean Society for Laboratory Medicine, says a new regulatory system was introduced to fasttrack approvals for newly-developed testing kits when the nation faces the threat of emergency situations, like infectious disease outbreaks.

“One of the companies I know took around two weeks from the application point to its actual use [during the coronavirus outbreak].

This development of test kits and their use for coronavirus was possible thanks to the adoption of that new emergency use approval system,” Mr Hong says.

Outside the Shincheonji followers, which have accounted for more than half of South Korea’s cases, public adherence to common sense protective measures like the wearing of masks, using hand sanitiser and limiting human-to-human contact is nearuniversal, leaving little need for strict government enforcement.

A population ready to comply with strict controls has also been key for Japan in containing coronavirus. The government’s handling of the failed quarantine on the Diamond Princess cruise ship and its policy of testing rela@Businessdayng

tively few people have come under heavy criticism. But experts say social and cultural norms that impose self-discipline and obedience to official guidance are one of the reasons Japan has so far managed to limit the number of infections.

“There is a social norm that you should not cause trouble to other people,” says Kazuto Suzuki, an expert on international politics at Hokkaido University. “If you don’t take care of yourself and become ill, that is taken as causing problems for other people.”

The coronavirus outbreak has resulted in the rigorous use of hand sanitisers and washing of hands, while not wearing a mask on the train would attract immediate disapproval.

Japan’s obsession with wearing masks predates Covid-19. Sales exploded during the 2009 H1N1 swine-flu outbreak. Mask sales for households are expected to reach ¥35bn ($330m) this year, surpassing the 2009 peak of ¥34bn, according to research firm Fuji Keizai.

Hong Kong’s government has been one of the most proactive.

The city suspended classes, closed most public facilities and told residents to avoid gatherings when the number of confirmed coronavirus cases was below 20.

Hong Kong has turned to a police “supercomputer” normally used to investigate complex crimes to trace potential supercarriers and hotspots in the city following its successful deployment during Sars. Health authorities also regularly update a map showing which buildings Covid-19 patients live in or last stayed at.

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48

Tuesday 17 March 2020

BUSINESS DAY

NATIONAL NEWS FT Chinese economy suffers record blow from coronavirus Industrial output falls while urban unemployment rises

China economist Ting Lu. Officials in Beijing attempted to put a positive spin on the numbers, saying the impact was temporary.

“The economic development in the first two months was affected by the outbreak of Covid-19,” said Mao Shengyong at the National Bureau of Statistics.

“However, from a comprehensive perspective, the impact of the viral disease is short term, external and manageable.”

But the data bode poorly for the country’s economic outlook in 2020.

The coronavirus outbreak that started in the central Chinese city of Wuhan in December has led to a widespread lockdown across the country. The movement of migrant workers looking to return to factories has been hindered, resulting in a significant hit to urban unemployment.

The poor economic data come as new cases of coronavirus in China have plummeted while the number of infections has soared across the rest of the world.

China initially suffered a supply shock, with its factories unable to operate. But many economists are concerned the country could face a plunge in demand as the rest of the world cuts imports.

“A V-shaped recovery seems unlikely as the virus is spreading everywhere, which will pose a downside bias for external demand for China,” said Zhou Hao, senior emerging markets economist at Commerzbank.

China’s central bank has taken some monetary policy measures to help boost the economy but analysts said policymakers would need to do more.

Other central banks, including the US Federal Reserve, have unleashed huge stimulus packages to cushion growth as the outbreak sweeps across the US and Europe.

information became available about transmission paths and incubation periods, Taipei tightened quarantine requirements. It also cast its net more widely by testing respiratory diseases patients for coronavirus who had tested negative for influenza — an initiative that uncovered Taiwan’s first local transmissions and helped stop them before a community spread developed.

International experts praise the response. “Taiwan is an example of how a society can respond quickly to a crisis and protect the interests of its citizens,” concluded a group of US-based scholars in a paper published earlier this month.

But western governments do not appear to have taken much notice. “Maybe there are some health experts hoping that we can help them with testing,” says Prof Chang. “But with regard to public health management, nobody has been in touch for advice.”

Singapore: city-state has so far seen no coronavirus deaths Despite being one of the first countries outside China to be hit by the coronavirus, Singapore has yet to record a single death.

The city state of 5.7m people has had 226 confirmed cases, about half of which have fully re-

covered and have been discharged from hospital. Thirteen remain in critical condition in intensive care units, while 121 patients are mostly stable or improving.

Experts say that the fact most infected individuals have been below the age of 65 helps to explain the lack of deaths in Singapore.

“Once the health system gets pushed beyond its breaking point as in Italy, then the number of deaths goes up,” says Dale Fisher, professor of infectious diseases at the National University of Singapore. “It certainly is no magic trick. It’s just that we’re getting the cases, we’re looking after them well, fortunately many have been young and we’ve got strong ICUs”.

Ooi Eng Eong, deputy director of the emerging infectious diseases programme at Duke-National University of Singapore Medical School, adds: “Because everyone that has needed a ventilator or other medical support has had access to [them], we have not been overwhelmed.”

Clear messaging from the government is one area where analysts say the US and Europe could learn from Singapore. Tough punishments for non-compliance with strict rules have also helped limit contagion.

Don Weinland and Xinning Liu

C

hina’s industrial output contracted at the fastest pace on record in the first two months of this year and urban unemployment hit its highest rate ever in February, as the coronavirus brought the world’s second-largest economy to a standstill.

The official data — some of the worst official figures ever reported by China — suggest President Xi Jinping’s attempts to expedite an economic recovery in late February have not had the desired effect.

Industrial output tumbled 13.5 per cent in the first two months of this year, the National Bureau of Statistics said on Monday. This would represent the largest contraction on record, according to Reuters data. The urban unemployment rate also surged to 6.2 per cent in February, the NBS said.

The latest economic data also showed that China retail sales plummeted 20.5 per cent year on year in January and February and fixed asset investment fell 24.5 per cent, down from 5.4 per cent growth when the data were last reported.

The numbers were well below analysts’ expectations with many

Retail sales in China have plummeted, with some analysts predicting coronavirus will have a deeper impact on the Chinese economy than the global financial crisis © ALEX PLAVEVSKI/EPA-EFE/Shutterstock

China experts expressing surprise that government officials were willing to report such devastating figures. “ The latest activity and spending data were much weaker than expected and point to a far deeper downturn than during the global financial crisis,” said Capital Economics in a note on Monday.

Growth in services production contracted 13 per cent in the first two months, accord-

ing to official data. Coupled with the industrial production figure, the data suggest that China’s gross domestic product contracted 13 per cent during the first two months of the year, according to Capital Economics.

“The actual shock could be much bigger than those deeply negative January-February numbers suggest, because the lockdowns started only from 23 January,” said Nomura’s chief

Containing coronavirus: lessons from Asia Continued from page 47 Residents have been strictly following expert advice to wash their hands and wear face masks, as the memories of Sars, which took almost 300 lives in the city, are fresh in their minds.

But nowhere have the lessons of Sars made as big a difference as in Taiwan. Seventy-three people died from Sars but, as a result of the isolation from international governing bodies demanded by China, it was largely left to its own devices.

After the Sars epidemic calmed down, Prof Su — who was then the director of Taiwan’s CDC — spent several months in the US to study its procedures, before returning in early 2004 to overhaul Taiwan’s entire public health system.

Taiwan reinforced its capacity by adding dozens of doctors to the staff of the CDC, more than 1,000 negative pressure rooms in hospitals and infectious diseases labs that can host viral testing.

“Previously, only the CDC did that, but during an outbreak they can’t cope. So by enlisting labs at medical centres on a contractual basis, we now can test 2,400 people a day, and we can easily expand that capacity just by add-

ing people,” says Prof Su. Taiwan also built a logistics system with stockpiles of basic items — including an inventory of 40m surgical masks.

But the biggest effect came on the political front in a country where politics is usually every bit as partisan as anything in Washington. After frequent quarrels and miscommunication between central and local governments during the Sars outbreak, Prof Su devised a unique management structure: infectious diseases specialists at medical centres across Taiwan are seconded to a body called the Central Epidemic Command Center, which is run out of CDC. The chair of this expert panel has equal rank with government ministers. Medical professionals and government officials say the structure helps override politics and ensure a rapid response.

Through a sweeping legislative overhaul, Taiwan created a legal basis for limiting civil liberties under an epidemic and allowing it to fine those who violate quarantine rules.

All those reforms were tested during the H1N1 influenza outbreak in 2009. “It allowed us to spot things that didn’t work, and many amendments were made www.businessday.ng

since then,” says Prof Chang.

The current epidemic has put the system fully to the test — one that Taiwan appears so far to have passed. Although it has more frequent exchanges with China than almost any other country, with over 1m of its citizens living or working there and more than 2.7m Chinese visiting the island last year, Taiwan now ranks just 50th in terms of confirmed coronavirus cases worldwide.

Taipei was alerted to the outbreak in Wuhan early. In late December, health officials started screening passengers on flights arriving from the Chinese city before allowing them to disembark. On January 23 — when the lockdown in Wuhan began — Taipei suspended all flights to and from the city, barred Wuhan residents from entering the country and imposed daily health monitoring for people with respiratory symptoms who had arrived from anywhere in China.

On January 26, Taiwan became the first country to bar practically all Chinese citizens from entry.

The immigration and health insurance departments linked up their databases, allowing the government to spot people with higher risk of infection. As more

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Tuesday 17 March 2020

BUSINESS DAY

49

NEWSFEATURE

Abule-Ado: The collapse of a community TEMITAYO AYETOTO

B

y a pile of shattered pillars and slabs that had rapidly changed from wearing grey to smoky black, Mrs. Ojo stood hands akimbo, desperately calling out Kolawole Ojo, her son. Whether beneath the rubble she anxiously gazed at or from any other heap of ruins around, she wanted an answer to erupt from the familiar voice she had always known. It was 1:14pm on Tuesday and Kolawole, one of the most efficient hands that Bethlehem Girls College (BCG) had on its security team, was not reachable by phone anymore.

“Please help me find him. I want to see his face. I want to know the truth about his condition,” she said.

Her last conversation with him was about 6am on the ill-fated Sunday, three hours before the explosion attributed to disruption of a gas facility. But after the explosion, Kolawole’s phone rang endlessly without a response. By 1:14 pm when three more bodies had been recovered from the evacuation carried out by The Lagos State Emergency Management Agency (LASEMA), there was no shadow of Kolawole.

But he was not the only one missing and yet to be identified among the casualties. His colleagues, Geoffrey and Alli were equally still missing and were suspected to be buried under the rubble from the collapse of the giant gate ushering into the catholic school.

The sudden explosion that ravaged the Abule-Ado on Sunday not only left a quiet community with horrid sights similar to images of destruction from war-torn Syria, it was a near collapse of the community that sent shivers into people. The shocking tremor and thunderous strike from the explosion severed many buildings from their foundation with other features transported far beyond reach. There were ignitions splashed around, killing for instance, the owner of Lin-Daves Group of Schools, Mr and Mrs ObiJackson, their son who had returned to Nigeria for his wedding next month and their domestic worker, as they set for church that morning.

With the severity of the devastation, the growing evidence of insecurity in the country and a fragile level of trust in government,

the majority in the community kicked against the theory of a truck hitting gas cylinders stacked in a gas processing plant as the cause of the explosion, as stated by the Group General Manager, Public Affairs Division, Kennie Obateru, on Sunday. They vehemently held on to the suspicion of bomb explosion targeted at ruining the state. Some other faction saw the explosion as an attempt to dispossess traders of the popular Trade Fair Market, which had its parts ruined by the explosion.

While speculators have frowned at indiscriminate construction of buildings around pipelines, heavy criticisms have trailed the government of Lagos state for approving buildings to be cited within the perimeter of danger.

As of Tuesday, three bodies were retrieved from the rubble including

that of a cook to a reverend in the Catholic Church that suffered one of the major damages. Chioma, one of the security personnel lost her colleague, Harry, tearfully said “my tight friend Harry, is dead. On Sunday morning when I closed from work, I went to meet her. Her sister is planning to wed and she asked me to come and take her cloth my tailor. We were together until I left around 7am.”

All students of BCG saved When BusinessDay visited the scene on Tuesday, Tomi Oshin, a teacher at the Bethlehem Girls College confirmed none of the students were lost in the incident, as opposed to widespread view that parents were writhing from the pain of loss. But to verify, some of the parents seen within the premise of the school were questioned, and confirmed that

none of them lost their child with the relentless help of Rev. Henrietta Alokha, the Principal of Bethlehem Girls College, Abúlé Ado. “What saved them was that they were all gathered in the church listening to sermon when the explosion happened. If they had been scattered around their hostels, it would have been another story entirely,” explained the mother of Moji, one of senior secondary school students.

In the school’s refectory, the bread to be baked for breakfast, sliced yam, and fried eggs were sloshed across the huge room, gradually growing into decay. Relief workers from the Catholic Mission and the Red Cross Society were found around trying to gather what was left of the ruined.

Outside the school, officers of

Pics by Temitayo Ayetoto www.businessday.ng

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the Federal fire service, LASEMA, Lagos State Material Testing Laboratory (LSTML), the National Emergency Management Agency (NEMA) among others continued the search for bodies.

Wale Olabiyi, one of the landlords, who controls about 10 flats in the area lamented, saying “We woke up to a black Sunday. It is hard for me to believe. We want government to do their investigation and come up with the report.”

“We are landlords here, we have our lives here and properties and everything that we live for here.

So we want justice done. God will judge. I have been here for more than 10 years.”

Another resident, Oluwagbemi Gabriel, a building contractor in the area appealed to the government to encourage all the landlords in the environment to let everyone leave the buildings for now. “From now till weekend, most buildings could collapse anytime,” he said.

Affected, unaffected buildings to undergo integrity test All buildings encircling the heart of the devastating explosion at Abule-Ado will be subjected to integrity test from Wednesday to ascertain their fitness for living and avoid further loss of lives, Afolabi Tajudeen, Lagos State Material Testing Laboratory (LSTML) General Manager said on Tuesday.

Following the wreckage that the explosion left on the environment, the manager said the integrity of all buildings in the surrounding was already compromised, whether in cases with partial destruction or complete dilapidation.

“We will start the integrity test tomorrow. We can’t say how long it will take but we will make it as fast as possible in order to submit a preliminary report,” he told BusinessDay during a visit to the scene.

“The magnitude of the damage is huge and has multifarious effect. From what we see, most of the houses can’t stand the test of time.

We need to still come and subject them to non-destructive integrity test for all the houses because of the tremor. The explosion has shaken the soil and affected the foundation of the building.”

The agency could not give certain figures of structures affected as its officer were still enumerating but said the even the best quality of material would have been ruptured from the explosion.

Speaking on the opportunities that the state failed to explore in averting the incident, Tajudeen said people should observe appropriate distance from pipeline as set under building code while the government should avoid approving buildings that fail to make the observation.

“We could have prevented this incidence if the setback expected from a pipeline is observed. For a pipeline, no house should be built 50 metres close to it. We advocate 100 metres so that after an explosion like this, we won’t have this kind of damage,” he said.

Tuesday 17 March 2020

BUSINESS DAY

51

POLITICS & POLICY

No going back on suspension of Lagos lawmakers - Obasa Iniobong Iwok

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he Speaker of the Lagos State House of Assembly, Mudashiru Obasa has said that there was no going back on the suspension of four lawmakers by the House.

Obasa’s stance came as the state’s lawmakers passed a vote of confidence in the Speaker over the controversy that the purchase of vehicles worth N2.4 billion for the members of the Assembly has generated in recent days.

The lawmakers suspended last week for “gross misconduct” included former Chief Whip, Rotimi Abiru (Shomolu 2); former Deputy Majority Leader, Olumuyiwa Jimoh (Apapa 2); Moshood Oshun (Lagos Mainland 2) and Raheem Kazeem Adewale (Ibeju-Lekki 2).

At plenary Monday, a petition was however, brought to the House by Rotimi Olowo (Shomolu Constituency 1)

under Matter of Urgent Public Importance.

The petition sent to the office of the Economic and Financial Crime Commission (EFCC) and addressed to the office of the chairman of the commission was titled: ‘Petition against Lagos State House of Assembly Speaker, Mudashiru Obasa on gross financial misconduct, criminal breach of public trust and abuse of office.’

Executive Director, Buna Olaitan Isiak of the petitioner, Human Rights Monitoring Agenda (HURMA), however, claimed that popular demand necessitated the petition, stressing that it was a demand by some members of the public who accused the Speaker of gross financial misconduct and abuse of office.

Olowo stated that he went through the petition and that it was malicious and that it was against the image of the House.

According to him, “It was stated that the House bought vehicles worth N2.4 billion.

Mudashiru Obasa

Since I joined the House of Assembly, we always got two vehicles before the end of the Assembly.

“In 2007, I got a vehicle and a backup vehicle before the end of the Assembly. The

vehicles are always budgeted for and it has been like that right from the time of Adeyemi Ikuforiji.

“We always told the Speaker that the 8th Assembly could not wind up without a

Lagos explosion: Razak condoles government, victims’ families

A

n elder statesman and chieftain of the All Pro gressives Congress (APC) in Lagos State, Lanre Razak has sent his heart-felt condolence to the Lagos State government, families of the victims and the entire people of the state over the sad incident.

Early Sunday morning, the people of Lagos State were shaken with a deafening bang emanating from a pipeline explosion at Abule-

Ado in Amuwo Odofin Local Government Area of the state that claimed several lives, destroyed several properties and rendered thousands of residents homeless.

Razak, who in a statement, described the incident as sad, unfortunate and tearinducing, sympathised with Governor Babajide SanwoOlu and families of the affected families, praying the almighty God to rest the soul of the departed and grant the

injured quick recovery.

The elder statesman was full of pity over the lives of the innocent students, who he described as “future leaders,” that died in the inferno, believing that the good Lord would adequately console their parents over the irreparable loss.

While commending Sanwo-Olu for rising to the occasion, Razak also lauded the efforts of all the agencies involved in the emergency ac-

T

he Action Democratic Party (ADP) has expressed sadness over the loss of lives and damage to properties occasioned by an explosion that rocked Lagos State and its environs on Sunday morning, calling for an extensive investigation to be carried out by the Federal Government in collaboration with the state authorities to clear the air over the matter.

ADP made this call on Monday in a statement issued by the national publicity secretary of the party, Adelaja Adeoye, while commiserating with victims, all

Lagosians, and the families of those affected by this tragedy.

The party, while describing the event as a national tragedy that could have been avoided, said it was important that a thorough investigation was carried out.

“The probe was imperative as the National Emergency Management Agency (NEMA) has said in its earlier report that the disaster was not due to pipeline explosion while NNPC gave a contrary report to what happened.

“The level of damage done by the loud explosion makes it very difficult to accept or reject what the cause could have been, but an extensive www.businessday.ng

investigation should be carried out by the Lagos State government and the Federal Government to clear the air over this matter,” the party said.

The party posited that the frequency of the disasters, ranging from midnight market fire, explosions and other tragedies across the country, was a serious source of worry and concern that threaten the existence of the country.

It therefore, called for an urgent review of Nigeria’s disaster management, saying “measures must be put in place to avert the occurrences of these black days.”

The party said it deeply sympathises with all victims,

them.

“The official vehicles for the 9th Assembly not the issue; It was a deliberate action to paint the House in bad light. The people that stole the vouchers that were leaked to the press are the issue.

“I thank you for all you have said about the petition.

We have discussed issues relating to divulging the discussions in the House. I said that the issue that came out in the Guardian Newspaper is traceable to Moshood Oshun,” he said.

According to him, “He was asking me for documents of the vehicle given to him; he was the one that called me on the telephone that his vehicle was seized by Customs Officer.

“I once said that someone stole the vouchers of the vehicles. Where did he get it from if not for the role played by a member of the House? The writer of the petition is close to Olumuyiwa Jimoh. Some of the things he wrote were parts of what we have discussed.”

Appeal Court orders stay of execution of Oshiomhole’s suspension Felix Omohomhion, Abuja

tivities for their prompt intervention that assisted in rescue operations that reduced the number of casualties at the scene of the inferno.

The former Public Transportation Commissioner in the state also praised the governor for the relief efforts being directed to the victims, just as he appealled to the Federal Government to rally round the state government in its efforts at rehabilitating the displaced victims.

…ADP seeks thorough investigation, sympathises with victims Iniobong Iwok

backup vehicle.

“The Speaker used to tell to us that the resources were not available and we later got the back-up in April, 2019.

In the 9th Assembly, we just got our official vehicles in November/December, 2019.

“None of the 11 new members got two vehicles. We insisted on Prado Jeep and Mr. Speaker didn’t want to give us, but we insisted on it.

“We are all beneficiaries of the largesse and yet we go about making insinuations and leaking information to the whole world,” he said.

While adding that the write-up and petition was written in bad faith, he said that there was no iota of truth in it.

“We also said that the buses that we were using for committee works were bad and we insisted that he should buy a new set and he did.

Speaker Mudashiru Obasa stated that the issue was not about official vehicles, but the backup vehicles and the money spent purchasing

especially the residents of Abule-Ado, students of Bethlehem Girls and St. Joseph School, Abule Ado, who are currently at the Nigerian Navy Reference Hospital, Navy Town receiving medical care.

ADP also sympathised with the family of Henrietta Alokha, the principal of Bethlehem Girls High School, Abule Ado who died, while trying to save the lives of girls inside the school, under her care.

“She was indeed the heroine, who laid down her life, just to save the lives of others.

We pray for her soul to meet the Lord in heaven,” the party added.

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T

he Court of Appeal sitting in Abuja on Monday ordered a stay of the execution of the suspension order placed on the National Chairman of the All Progressives Congress (APC), Adams Oshiomhole by an Abuja High Court on March 4.

In a unanimous ruling by the 3-man panel of justices of the Appeal Court, led by Justice Abubakar Yahaya, held that the suspension order be lifted until the determination of hearing of the substantive suit.

In an exparte application filed by Oshiomhole, he prayed the court to halt the suspension order on the grounds that there would be no status quo before they came to court, if the appellate court fails to intervene.

His lead lawyer, Wole Olanipekun (SAN) had informed the Court that there is a National Executive Committee meeting of the APC slated for Tuesday March 17, wherein the applicant would be excluded going by the suspension order of the lower court.

Olanipekun submitted that the order has already created a state of disorder in the party that could degenerate if the appellate court failed to intervene. @Businessdayng

The senior lawyer who noted that time is of essence because of the seriousness of the issue, said that there will be an irredeemable damage if the court does not intervene.

In its ruling, the appellate court held that status quo can only be maintained if the order of the lower court is stayed.

“We have looked at the application and we are of the view that the image of emergency has been painted. There is an information that NEC would hold meeting tomorrow and the applicant will not be there,” Justice Yahaya.

“Justice would not have been served if the applicant is not in that meeting. The status quo can only be maintained if there is a stay.

“We find merit in the application “We hereby order a stay of execution of the lower court made on March 4, 2020, pending the hearing of the notice of appeal slated for Friday, March 20, 2020”, the panel held.

The court in addition ordered all parties in the suit not to take any further steps that would affect the ruling of the court.

“We hereby give an order of injunction restraining the respondents or their agents from taking further steps until the determination of the substantive suit.”

Thebigread

BUSINESS DAY Tuesday 17 March 2020 www.businessday.ng

Africa’s struggling health-care system face the Coronavirus test With 16% of the global population but just 1% of medical spending, the region risks being overwhelmed by an outbreak

By Alonso Sotoand James Paton

I

n a red-roofed building at the edge of the University of Abuja Teaching Hospital campus, the walls are freshly painted, a crew is laying pipes for refurbished bathrooms, and others are hauling in furniture.

The single-story concrete structure, meant for trauma victims at the largest health-care facility in the Nigerian capital, is being rapidly repurposed to quarantine patients diagnosed with the coronavirus, putting it on the front lines of Nigeria’s— and Africa’s—efforts to contain the illness.

“We are moving, we are going to get there,” Yunusa Thairu, the leader of the hospital’s coronavirus response team, tells staff crowded into an auditorium next door. “Let’s be confident. This is not a death sentence.”

Across Africa, officials are bracing for a rapid spread of the pathogen.

The worry is an outbreak could devastate the region, which accounts for 16% of the global population but just 1% of health-care spending.

There’s little money for ventilators and other life-support equipment needed for severe casesof Covid-19, and any sustained fight against the coronavirus would steer resources away from malariaand HIV, which kill hundreds of thousands every year.

If Italy, with 41 doctors per 10,000 people, is struggling to contain the disease, virus trackers fear what would happen if it were to sweep across Africa, where there are just two doctors per 10,000. “It will be worse in an African setting,” says Nathalie MacDermott, an infectious disease specialist at King’s College London.

Nigeria is where the virus first made landfall in sub-Saharan Africa, on Feb. 27, when an Italian businessman tested positive in Lagos, the country’s sprawling, congested commercial capital. It has ap-

peared in at least 10 other African nations, sparking a flurry of responses.

On March 2, Senegal reported a French national had been infected. A few days later, Egypt said it had

48 cases, most linked to a Nile River cruise ship.

Kenya has set up isolation facilities in Nairobi, activated an emergency operations center, and secured extra protective

gear. “A lot still needs to be done,” says Isaac Ngere, a member of Kenya’s national coronavirus task force.

“Our schools are crowded. Our living areas are crowded. Our public trans-

port is crowded. That’s a good environment for the disease to spread.”

The International Monetary Fund on March 4 pledged to make $10 billion available at zero inter-

‘‘

My nightmare scenario is a situation like Italy, in which significant transmission has already started by the time you have a chance to control it

Ounce of prevention is worth a pound of cure

By Nneka eze

T

he global covid-19 pandemic and the resultant reduction in global demand for oil and falling oil prices are precisely why we need to diversify and transform Nigeria’s economy. We are especially at risk in Nigeria given our already depressed, low-growth economy – GDP growth was projected at 2.5% for 2020 – and the wider socioeconomic conditions – the high levels of inequality, widespread poverty, limited social safety nets, and high and rising

unemployment rates. These longterm stresses weaken our ability to respond to and recover from the shocks of pandemics, fires, explosions, or global economic shifts.

Over the past few days, the global situation has arrived more visibly in Africa. The case counts and deaths are rising drastically – Africa’s covid-19 confirmed cases rose from 83 on 8 March to 313 by 15 March, and people are wondering how this happened. When Gabon originally introduced its strict travel limitations on travel from countries that had any covid-19 cases, I wondered why they were

being so harsh. Countries such as Ghana, Kenya, Rwanda, and South Africa, have now followed in their footsteps, although for the latter, it is likely too late for a containment strategy.

In Nigeria, in-person meetings, religious events, sports activities, social events and school continue amid a global pandemic. We feel justified that our case numbers are so low, so we are free to socialize.

However, a few million people could die in Nigeria if we are not able to put in place rigorous conContinues on page 39

est to help poor countries, especially in Africa, tackle the virus.

The World Health Organization has supplied testing equipment and training throughout the continent while focusing on 13 countries with strong links to China, the region’s top trading partner.

Muhammad Ali Pate, a former Nigerian health minister now with the World Bank, fears the virus could devastate “the crevices of society” where health systems are weak.

“If you look at a map, you will see areas where cases have not been detected,” Pate says. “That may reflect that the virus isn’t there. But it may be telling us something else: that they may not have the capability to test.”

Health authorities fret that efforts to fight the coronavirus will indirectly contribute to an increase in deaths from illnesses such as malaria, which kills about 400,000 Africans a year.

The 2014-16 Ebola epidemic, which left more than 11,000 dead, highlights the risk of overwhelming health-care systems. Across West Africa, the Ebola crisis disrupted treatment of malaria, HIV, and tuberculosis: Many clinics shut down, and patients with other ailments avoided doctors for fear of contracting Ebola.

“More people died from a lack of general health services than from Ebola,” says Jimmy Whitworth, a professor of public health at the London School of Hygiene & Tropical Medicine.

“We must make sure we don’t neglect those services while we fight the coronavirus.”

With 60% of Africans under 25, the disease may not be as deadly there as it is in European or Asian countries with older populations.

Unlike in the West, with its nursing homes, the elderly in Africa usually stay with their families, reducing clusters of vulnerable people.

And Ebola may have given Africa a better sense Continues on page 39

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