BusinessDay 19 Aug 2020 by BusinessDay

Frequent obstructions on Escravos channel hurt shippers, FG’s revenue … NPA urged to dredge channel, enforce cargo laws ISAAC ANYAOGU

arge vessels are getting stuck across the Escravos channel, a tributary of the Niger River, which

flows for 57 kilometres, ending at the Bight of Benin off the Gulf of Guinea where it flows into the Atlantic Ocean, due to low water levels causing economic loss to the Federal Government and

Biggest Gainer N12.3

and MV Zola have run aground within the last three weeks, according to a shipper. Since the maximum draft at the channel during high tide is 6.2 meters, large vessels wait for

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Conoil 2.44pc N16.9 25,136.49

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hurting shippers. Four ocean-going vessels owned by Matrix Energy and other ship owners/charterers including MV Adebomi 3, MT Matrix Triumph, MT Matrix Asa,

high tides to navigate across the channel. Some heavily-laden vessels have run aground requiring heavy machinery to get them out. Until they are towed, they clog the channel, obstructing

-9.76 pc

Foreign Reserve $35.6bn Cross Rates GBP-$:1.29 YUANY - 55.41 Commodities Cocoa US$2,423.00

Gold $1,996.61

news you can trust I **WEDNESDAY 19 AUGUST 2020 I vol. 19, no 631

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N300

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($/N)

fgn bonds

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3M 0.00 1.21

12m NGUS jul 28 2021 421.79

0.06 1.31

-0.01

10 Y 0.00

30 Y 0.00

6.43

8.48

9.88

36m NGUS jul 26 2023 495.26

60m NGUS jul 30 2025 581.52

Nigerians face liquidity squeeze as diaspora inflows dry up on COVID-19 N

Nigeria’s long-awaited oil reform bill to go to president – Reuters

MICHAEL ANI & OLUWAFADEKEMI AREO igerian households dependent on families abroad risk increased liquidity squeeze this year, as diaspora inflows shrink on the back of a health pandemic that has rendered millions of people in advanced countries jobless. Africa’s largest economy rides on the gains of diaspora inflows to attract dollar liquidity from its over 1.78 million populace living abroad that send money to their families back home. But the global collapse of economic activities due to the pandemic could see such gains eroded, as analysts foresee a huge drop in diaspora inflows. Diaspora remittances into the country could fall to $17 billion in 2020, a 32 percent drop from the $25 billion inflows recorded in 2019, according to projecContinues on page 31

igeria’s oil ministry will present a long-awaited oil and gas reform bill to the president in the coming days aimed at boosting output and attracting foreign investment, three sources close to the negotiations told Reuters. Once President Muhammadu Buhari signs off on the draft, it will go to the Federal Executive Council before being transmitted to the National Assembly, which is controlled by his All Progressives Congress party. The reforms, 20 years in the making, are particularly urgent

this year as low oil prices and a

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Inside

RE: Investors dump Lagos as Ogun becomes new industrial hub P. 11 L-R: Mahmud Tukur, outgoing MD/CEO, Eterna plc; Shehu Dikko, chairman, and Nnamdi Obiagwu, incoming MD/CEO, during the company’s 27th annual general meeting in Lagos, yesterday. Pic by Olawale Amoo

Mali President detained in coup attempt P. 31

Wednesday 19 August 2020

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Prudential Zenith donates $100,000 to Slum2School towards fighting effects of Covid-19

rudential Zenith Life Insurance has donated the sum of $100,000 to Slum2School Africa to help combat the impact of the COVID-19 pandemic on education in disadvantaged communities in Nigeria. The donation was made through a corporate social responsibility (CSR) Fund from the Prudence Foundation, the community investment arm of Prudential plc in Asia and Africa. Slum2School Africa is a leading volunteer-driven developmental organisation, transforming society by empowering underprivileged children in slums and remote communities with quality education, entrepreneurial skills and psychosocial support to enable them realise their full potential and become social reformers. Speaking at the presentation of the cheque, Chuks Igumbor, managing director/CEO, Prudential Zenith Life Insurance Limited, said: “Our contribution to Slum2School’s activities demonstrates our corporate social responsibility action plan, which is targeted towards communities most in need of the support we provide.” He noted, “The coronavirus pandemic has impacted all aspects of our lives including the education sector, with a

steep widening of education inequality as children and youths from underprivileged communities are unable to access the learning materials that students from affluent backgrounds are able to access. “The strategic partnership between Prudential Zenith Life and Slum2School, therefore, aims to bridge this gap and engage learners from Nursery to Senior Secondary School across twenty slums and communities in Lagos State.” The $100,000 donation will be used to procure 300 tablets with internet connections, 34 laptops for Slum2School facilitators, 34 whiteboards, markers and board eraser sets, state-of-the-art learning studio for 50-90 pupils per session, stationery for students, as well as learning programmes and software. In addition to the cash donation, relief foodstuff was also provided to less privileged families within the identified communities to assist in these trying times. Prudential Zenith Life Insurance Limited is part of Prudential plc, one of the oldest and most strongly capitalised life insurance companies in the world. It provides a range of insurance and investmentlinked savings products designed to suit corporate and individual customers’ budgets.

COVID-19: ‘Impact on real estate may take 3 years before rebound happens’ …sector may lose 50% revenue CHUKA UROKO

s Nigerian economy commences gradual reopening amid widespread fears that it may slipintorecessionpostCovid-19, practitioners in the real estate sector say the sector, being a laggard, may take about three years before it turns the corner. Describing the impact of the novel virus on the sector as the biggest in history, the practitioners fear that the current experiencearisingfromthecoronavirus impact could take the sector back to a similar situation in 2005, when the global economy passed through a crisis. The practitioners, drawn from different African countries including Nigeria, South Africa, Botswana, and Ghana, spoke on the ‘Effect of COVID19 on real estate in Africa: The impact of Foreign Direct Investments (FDIs) and palliatives’ at a webinar hosted by the Nigerian Institution of Estate Surveyors and Valuers (NIESV), Lagos State chapter. As part of effects of the virus, many companies are struggling financially such that rent and lease renewals are becoming, increasingly, difficult. Many of

the companies have resorted to wage cuts and lay-offs in extreme cases. It is expected that there would be a 50 percent drop in revenue and this may be more in the real estate sector. Nigeria or Africa is not alone in this. Advanced economies such as the US and UK are also hard hit. In the US, for instance, Edison Research says over 62 percent of renters are concerned about being able to make the rent. “Welcome to the newest symptom of the coronavirus: the 2020 Rental Housing Crisis,” it says. A PropertyWire report notes that, with over 43 million renters nationwide, the rental market makes up nearly 40 percent of all housing in the US, where at least 20 million jobs were lost in April. “While out-of-work renters scramble to make their payments,landlordsarewondering how to service an avalanche of debt and unpaid taxes,” the online property portal notes. Butitisnotgoingtobeallgloom alltheway,accordingtotheAfrican practitioners. “FDIs will still come into Nigeria as the nation is an emerging market as witnessed in the last recession,” Jemil Dawodu, managing director, CBRE Excellerate,Nigeria,hopes. www.businessday.ng

L-R: Ruth Ebe, head of operations, Slum2School Innovation Hub; Chuks Igumbor, MD/CEO, Prudential Zenith Life Insurance; Otto Orondaam, executive director/founder, Slum2School Innovation Hub, and Isioma Olowu, chief commercial officer, Prudential Zenith Life Insurance, during the cheque presentation of $100,000 donation to support Slum2School efforts at bridging the education gap among the less privileged students during this COVID-19 pandemic.

Nigeria’s exchange rate crisis pushes demand for bitcoin upward ... as BDCs switch to bitcoin for international trade FRANK ELEANYA

igeria’sexchange rate crisis is pushing many business owners towards bitcoin (BTC) as a preferred means of buying goods from manufacturers outside the country. The pressure on naira is projected to be heading towards N480 per dollar later this week. As of Monday morning, the dollar traded N477/$, representing an N2 depreciation compared with N475 sold the previous day on the black market. The weakening in the value of the naira is said to be due to high demand by end-users amid dollar scarcity.

For businesses, the weakening means more pressure as they are unable to get dollars to buy new supplies or order necessary equipment abroad. While the queue in the official market gets frustratingly longer, Bureau De Change (BDC) operators, which are usually the better alternatives, are also unable to meet up with demands for dollars despite selling it at very high rates. Thus, in recent times a few BDC operators have tried to take education in bitcoin operation. “Many of them are coming to ask us how it works, and the ones that already know are switching to BTC for international trade,” a source in one of the exchanges in Nigeria,

informs BusinessDay on condition of anonymity. Bitcoin has been attracting institutional attention since the beginning of the year. The COVID-19 pandemic, which has affected the economies of many countries negatively, has also served to cement the importance of the cryptocurrency as an alternative means of exchange. Peer-to-peer trading volume in bitcoin in countries like Argentina, Chile, Venezuela, and Morocco peaked marking new all-time highs in the month of April. A study released in May by the Tokenist showed that there was a growing trust in bitcoin over traditional investments like gold, stocks and real estate. The market researchers leveraged a sur-

vey that was taken in April 2020 (5,421 participants in 24 countries) and collated several surveys from 2017 as well. In Nigeria, demand for bitcoin has continued to set records. According to a report by Blockchain.com, Nigeria was the leading country in the second quarter of 2020 in peer-to-peer bitcoin transactional trades valued at $34.4 million on the African continent. Following Nigeria was South Africa; Kenya ($7.8m); Ghana ($640,000), and Tanzania ($600,000). “There are certainly a lot more use-cases for bitcoin in Nigeria,” Yele Badamosi, CEO of Bundle, an Africa-focused social payments app for cash and cryptocurrencies, told BusinessDay.

Unilever Overseas Holdings raises equity stake in Unilever Nigeria ... acquires additional shares worth over N1bn Iheanyi Nwachukwu

nilever Overseas Holdings B.V, the majority shareholder of Unilever Nigeria plc, has increased its stake in the company. In the latest translations, Unilever Overseas Holdings B.V purchased 67.09 million ordinary shares of the company valued at N838.69 million, details of the insider share dealing at the Nigerian Stock Exchange (NSE) show. The transaction done last Friday, August 14, in Lagos was on the basis of N12.5 per share. It had on August 10 purchased 17.023 million ordinary shares at N12 per share valued at approximately N204.3 million. These acquisitions of Unilever Nigeria shares add substantially to Unilever Overseas

Holdings stake in the company, which before now is the single largest investor with circa 60 percent shareholding in the company while other investors account for just 40 percent of its equity. Unilever Nigeria manufactures and markets consumer products primarily in the home, personal care and foods categories. The company sells products such as Omo washing powder, Key soap, Royco bouillon, Lipton tea, Pears baby care goods, Vaseline petroleum jelly, Lux soap, and Close Up toothpaste. In recent times, the fortune of the once colossus in the consumer goods space has been on a free fall, no thanks to the intense competition in the sector, which has seen price sensitive consumers shift to cheaper brands. Insider purchases are

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usually an indication of how shareholders perceive the company’s valuation. It could also mean possible capital raise towards the strengthening of their existing holdings and some other things. With a market capitalisation slightly above N71 billion, the multinational has about 5.75 billion outstanding shares with Unilever Overseas Holding B.V. as the majority shareholder. Unilever plc, the parent company of Unilever Nigeria, had earlier this month disclosed plans for strategic review of its global tea business, which includes brands such as Lipton, Brooke Bond and PG Tips. The multinational said it would retain only the tea businesses in India and Indonesia, and the partnership interests in the ready-to-drink tea joint ventures. @Businessdayng

The decision, according to Unilever, will make the rest of its tea brands and geographies and all tea estates have an exciting future, “and this potential can best be achieved as a separate entity.” The tea business that will be separated generated revenues of €2 billion (N1.06trn) in 2019. A process will now begin to implement the separation, which is expected to conclude by the end of 2021. Unilever Nigeria has notified the NSE. “We shall keep the Nigerian Stock Exchange informed of any subsequent development on this matter as it affects Unilever Nigeria plc. The disclosure is made for and on behalf of the Board of Unilever Nigeria plc,” according to August 5 note signed by Abidemi Ademola, general counsel and company secretary, Unilever Nigeria plc.

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CAMA 2020: Encouraging but more reforms needed

Franklin Ngwu

ith the signing of the new Companies and Allied Matters Act (CAMA 2020) into law on 7th August 2020 by President Muhammad Buhari, the feeling of elation across the Nigerian business community is visible and expected. Not only did it replace the out-dated CAMA 1990, the new CAMA 2020 came with revisions and additional provisions that can be described as current, innovative and business friendly. Divided into seven parts and 870 sections, there is no doubt that good thinking and foresight were applied in drafting the act. Reading through the pages of the act rekindles the hope for a better Nigeria given the issues covered with about 167 new provisions, the refinements made in addition to the clarity and details provided. Of the revisions and new additions, a most interesting one is the expansion of the board of Corporate Affairs Commission (CAC) to include a member each from the National Association of Small and Medium Enterprises and Institute of Chartered Secretaries and Administrators of Nigeria. This commendable inclusive approach will undoubtedly lead to a more diverse and skilled board, and the accommodation of the interests of all relevant stakeholders. With the revisions made and new provisions included, the CAMA 2020 can be said to be principally focused on three key areas: Growth of Small and Medium

Enterprises (SMEs), promotion of better management and corporate governance of Nigerian firms, and enhancing ease of doing business in Nigeria. For promotion of SMEs growth, some of the key provisions include the opportunity for an individual to register a business (single director and single director small firms), reduction in fees for registering a business, the exemption of small companies with single shareholders from the requirement of holding annual general meetings and having company secretaries. In pursuit of better and more accountable management and corporate governance of firms, the provisions include i. the separation of the positions of the chairman and that of the managing director that cannot be held by one individual mainly for public quoted companies. ii. the restriction of the number of board membership that an individual can hold to five in public companies and the requirement for disclosure of individuals with significant control. iii. The requirement for public companies to display in their websites the audited accounts on the business. iv. The need for disclosure of both board members and managers remuneration and requirement to increase the number of independent non-executive directors from one in CAMA 1990 to five in CAMA 2020 for publicly quoted firms. v. Disclosure of not only shareholders with significant ownership which has been reduced from 10 percent to 5 percent but also individuals such as managers with significant control in a firm. Other provisions that can be described as enhancing ease of doing business in Nigeria include the acceptance and validity of electronic copies of business documents and provision for private firms to hold virtual annual general meetings provided it is done in line with the Articles of Association of the firm. There are also provisions for

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A common demand of many businesses especially SMEs is the need to reduce the multiple formal and informal regulations and costs they are faced with. A situation where a small business will have to attend and comply with the demands of over ten regulatory agencies from federal, state and local government areas is counterproductive

ease of mergers and acquisitions and the introduction of “Minimum Issued Share Capital” to replace “Authorised Share Capital” and Electronic transfer of shares among other encouraging provisions. Even as there is no doubt on the importance of the new CAMA 2020 act, the challenge will be more in the effective implementation of the act. The problem with Nigeria is not really the lack of excellent laws and policies; it is in the determined leadership to ensure execution and achievement of results. As CAMA 2020 will be used within the Nigerian economy and business environment, the question is if the supportive business environment is available for effective execution of CAMA 2020 act. The effectiveness of a law depends on the extent to which the law is understood, accepted, internalised to enhance willingness to comply. While the CAMA 2020 act is widely perceived as a big improvement of the CAMA 1990 act, it is important that wider awareness and advocacy are pursued to deepen its understanding and benefits especially for informal small and medium scale enterprises. This will help in reducing the perception of the Act as a somewhat deliberate strategy to lure informal businesses into the formal sector for better regulation and tax purposes. With a clear and continuous explanation of the benefits, the understanding and acceptance of the Act as being in the interest of business will increase and expectedly will widen participation and willingness to use and comply. While there is no question whether the CAMA 2020 is a good act, achieving its aim starts with effective and robust engagement of the relevant stakeholders on the benefits of the act especially SMEs. In addition to the need for wide sensitisation of the benefits, CAMA 2020 is just one of the factors needed

for a better business environment in Nigeria. Its success depends on how it is complemented with other policies. A common demand of many businesses especially SMEs is the need to reduce the multiple formal and informal regulations and costs they are faced with. A situation where a small business will have to attend and comply with the demands of over ten regulatory agencies from federal, state and local government areas is counterproductive. To realise the benefits of CAMA 2020 particularly to attract SMEs into the formal sector, it is important that the number of regulatory agencies and consequent burden and costs to businesses are reduced. As it is with SMEs, so it is for the large firms. A very good example is the financial sector where banks for instance will have to comply to the rules and regulations of the Central Bank of Nigeria, Nigeria Deposit Insurance Corporation (NDIC), Securities and Exchange Commission (SEC), Financial Reporting Council (FRC), Federal Inland Revenue Service (FIRS), Economic and Financial Crimes Commission (EFCC) among other agencies even in Federal, state and local governments. As most of the regulatory agencies in the financial sector are focused on two major issues- prudential and conduct regulation, a bold approach to complement CAMA 2020 is to merge many of the regulatory agencies into twoPrudential Regulatory Authority and Financial Conduct Authority. It is this kind of approach of deliberate reduction of regulatory burden and costs that will complement and enhance the acceptance, usage and benefits of CAMA 2020. Dr. Ngwu, is an Economist/Associate Professor of Strategy, Risk Management & Corporate Governance, Lagos Business School and a Member, Expert Network, World Economic Forum. E-mail- fngwu@ lbs.edu.ng

Liberalising the power sector for efficiency – create a willing buyer willing seller market

he journey of a thousand miles to any destination starts with a single step. In order to get to one’s destination as efficiently as possible however, he must not forget the destination he set out to travel to and must shun distractions along the way no matter how tempting. Nigeria’s journey to creating a liberal power sector, where parts of the value chain (fuel producer and transporter, GenCos, Transmission Company and DisCos) as well as the consumers engage in a willing buyer-willing seller trade amongst each other, began a few years ago. This started with the Electric Power Sector Reform Act (EPSRA) of 2005, and then the creation of the Nigerian Bulk Electricity Trading Plc (NBET) in July 2010. The government’s role in this entire journey is to set effective regulations that guide the power sector and stimulate private sector investment in Nigeria. As the manager and administrator of the electricity pool in the Nigerian Electricity Supply Industry (NESI), NBET purchases electricity from Generating Companies (GenCos) through Power Purchase Agreements (PPAs), and uses Vesting Contracts to resell to Distribution Companies (DisCos) and other large customers who off take electricity from the transmission system. NBET essentially sat between GenCos and DisCos and was to act as a shock absorber of some sort to ensure that GenCos did not have any shortfall in revenue from DisCos. The company was conceived as a Special Purpose Vehicle (SPV) with a 5-year lifespan, which will expire once a transition market to willing buyer willing seller takes effect. The expected transition has not happened and the company remains in a quagmire, saddled with underpay-

ment issues that are largely caused by the broken NESI value chain. Nigeria has succumbed to distractions along the way and seems to have forgotten its destination. The transition market has not happened as planned, and NBET still bears the burden of playing middle man between GenCos and DisCos. From January 2020 through May, NBET received a total invoice of N294.16bn from the GenCos but paid only N57.98bn, representing 19.7 percent of the invoiced value. In the same 5-month period, the 11 DisCos were invoiced N292.93bn for the power they received in that period, but only remitted N56.3bn, representing 19.2 percent of the invoiced value. In this pack, Eko DisCo had the highest remittance of 33 percent and 35 percent in April and May 2020 respectively, with Ikeja as the second highest with 40 percent and 20 percent in February and March, respectively. At the lower end of the spectrum, Kano DisCo remitted nothing (0 percent) for three straight months March to May, and Kaduna followed suit with 3 percent in February, 0.04 percent in March, and 0 percent in April and May. With this abysmal payment performance from the DisCos, the government needs to step in to provide funds to NBET to pay the GenCos enough to avoid a total collapse of the NESI. In a free market setting, a DisCo would only procure electricity that it can pay for from a GenCo, and no more. In order to serve its customers, the onus then lies on the business to ensure that it’s able to get its product to the consumer and more importantly, that it’s able to collect payment for the product. In the current dispensation, however, DisCos still receive power which cannot be fully paid for, and in some cases, pay absolutely nothing for, and the government through NBET is

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expected to step in with bailout funds. Such bailout funds have so far come in the form of a CBN interest bearing loan titled “Payment Assurance Fund (PAF I and PAF II)”. The PAF I fund assured that the 25 grid-connected generating companies received payment for up to 80 percent of their total monthly invoice from January 2017 to December 2018. A combination of PAF I and II was used to augment the market collections and pay the GenCos 100 percent of their invoices in January and February of 2019, while PAF II was used to make up monthly payments to 100 percent from March 2019 till September 2019 when the funds were exhausted. From October 2019 till date, with the exception of Azura Edo IPP, NBET is only able to pay GenCos an average of 25 percent of their monthly invoices. In the thirty three months that the PAF loan lasted, NBET has spent up to N988.93bn of borrowed funds to pay the generating companies. The hard fact is that this is money spent to compensate for poor performance by the DisCos. Under the stipulated agreed rules of the privatisation, monthly collection by the DisCos should be improving steadily as they reduce ATC&C losses, strengthen their distribution networks and improve metering according to the individual bids they submitted during the privatization. Nearly a decade after privatisation or semi-privatisation of the sector, the government is still neck-deep in the sector, giving loans that will probably never be paid to fund invoice payments in the sector. The N988.93bn may have been better spent as a low-interest rate loan to the DisCos to fund their efforts to rapidly improve and strengthen their networks, and ultimately make them independent. If monthly remittances by DisCos are an indication of network improvement, Eko and Ikeja

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Chukwueloka Umeh seem to be in the lead. NNPC, the Nigerian Gas Company (NGC), as well as the Nigerian Gas Marketing Company (NGMC) are making strides to make more gas available for power generation. As their supplies increase, however, the lacuna between GenCos and DisCos vis-a-viz the abysmal collection by the DisCos to pay for the power they receive will become more glaring. NBET’s indebtedness to the GenCos will continue to increase as a result, calling into question the bankability of the PPAs signed by those GenCos. In this sort of scenario, private investors will of course be unwilling to invest their hard earned money, thereby forcing the government to sink deeper into the abyss of government investment in the NESI in spite of its seemingly noble effort to divest from it. We see this happening with the proposed N61b investment the government has committed to make through Siemens, as well as the 4,000MW that NNPC is committing to make in the Northern part of the country. No matter how one analyses the NESI and what it needs to survive, the critical mind will realise that the only solution is liberalisation of the market. Dr. Umeh is the Managing Director/CEO of Century Power Generation Ltd and the Group Chief Operating Officer at Nestoil Group.

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Entrepreneurship and the economics of insecurity in Nigeria Small Business handbook

Emeka Osuji

ast week, I did the last piece in the Recovery Series in which I tried to suggest strategies for the Micro, Small and Medium Enterprises (MSME) sector in Nigeria, to get back on their feet, following months of devastating lockdown. In that series, which had nine articles, I tried to establish certain inalienable facts about recovery of businesses following a debacle of the kind we currently face. I posited that the first recovery imperative is Business Continuity, by which I mean the return to production of goods and services by business entities, despite the occurrence of a disaster. Clearly, it would be simplistic to expect that business houses will spring back into normalcy after a disaster of the magnitude of this pandemic. With a disruption of the kind being currently experienced; we are talking about total annihilation of certain businesses and severe damage to others; restarting will take more than a passing exertion. Indeed, it will take, not just time but also effective strategic actions, to restore businesses that did not get out rightly obliterated. One of such preliminary actions would be to put businesses in a position to begin, once again, to serve customers and clients.

It is usual for organisations to establish and maintain Business Continuity plans, often epitomised by Disaster Recovery Facilities. Such facilities are mandatory in certain strategic sectors, including banking, pension fund management and some high-tech services. However, small businesses do not always consider the establishment of Disaster Recovery facilities necessary, nor do they have the capacity to maintain effective business continuity plans. In the course of the recovery series, I suggested that concerted effort, on the part of operators and government, to help small businesses secure the momentum to restart, was inescapable. Graciously, the government has done quite a bit in this regard, which must be acknowledged. I also did highlight the importance of disposable income in the restoration of consumer demand – a key element in the drivers of national income. The need to restore the spending power of households, which would help production to restart, is fundamental to boosting consumer confidence. Needless to say that nobody makes more goods when the warehouse is full and demand is almost nonexistent. However, in addition to all the individual operators’ and public policy efforts to restore economic activity, I also suggested that cost containment should be the current mantra for all economic agents, public or private. Cutting costs is the definite corollary of income generation. Saving money is another way of making money. Although cost containment is not usually a popular project in any organisation, for obvious reasons, it is no longer possible to look the other way as avoidable expenses drain life out of the business. Cash flows have dried up and costs must, at best, be kept down.

The time for paying lip service to cost reduction, as they do in the public sector, is gone, at least for entities that have Balance Sheets and Profit and Loss Accounts to present at the end of the year. The Speaker of the House of Representatives recently spoke of the need to reduce the cost of governance. The reaction from the public was that of unmitigated pessimism - nobody believed him. Government officials have always said that but never able to match words with action. Reducing the cost of governance in Nigeria has been in the burner (not sure if it’s the one in front) since the First Assembly. And nothing significant has been done. Many of those in this Ninth Assemble have been around through several assemblies in the past. While we do not ascribe any atom of exhaustiveness or finality to our suggestions, in regard to business recovery, we shall rest that conversation for now and attend to another important issue in the daily menu of our business community and entrepreneurs, in particular – security of the business environment. It is good to marshal out as many recovery strategies as we can articulate, and there are lots of them. However, doing so without reference to the need for a secured business environment is an incomplete exercise. This is so because the most important conversation anywhere in the country today is insecurity. Even in the boardrooms of the corporate giants, the pervasive insecurity in the country, occasioned by unfathomable banditry and terrorism, has occupied the center stage. Regrettably, whatever success the security agencies may have achieved in the fight against insecurity appears to be dwarfed by the shared audacity of brazen and unabatingly constant raids by terrorists. I am convinced therefore, that

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We are in the middle of the business continuity stage, which one could say is proceeding successfully. Although the country is still partially locked down, many business houses have reopened. We keep an eye on them and move over to something more life-threatening

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

Just do it

’ll begin today’s article with a quote I saw somewhere and it says, “In every field of human endeavour, there are always three categories of people; those who make things happen, those who watch things happen and those who end up wondering what happened.” The following story of someone very close to me, I believe will speak to a couple of people out there and if it even serves to inspire them too, then that would be all well and good. This my egbon, while telling me his story said, “I never knew I could fly a plane until the first time I got into a cockpit and actually flew a plane. And the first person I told about my first flight greatly discouraged me. I didn’t think I could ever be a radio presenter until I got the chance to present a programme on radio and I did it. And the people around me at the time did their level best to tear me down, every time I came off the radio, at the end of a show. From this, I learnt two important lessons. First, there are some things in life that you’re never going to be able to do until you just do them. Second, some people only resent the greatness in you because it exposes their mediocrity. Did you know that the establishment of this radio station (name withheld) was never originally meant for me? I was happy living in England and I never prayed or asked for God to send me to Nigeria. The idea of the radio station was passed on to me because the young woman to whom God gave the idea initially decided not to pursue it. She didn’t think the concept of such a station made sense. How sad then, that after

the station was set up, she ended up applying for a job there, seeking to be an employee at a place where she should have been the employer. There are great projects that God has planted inside you, waiting to be birthed. They are too important for Him to let them be buried with you. If you don’t run with them now, they will be taken from you and given to someone else. Then you will suffer the indignity of watching another take credit for what should be ascribed to you. God forbid that should ever be your experience. Oftentimes, the things God has in store for us are so big, we get scared and end up running in the opposite direction. We see ourselves as “grasshoppers”, too small, inadequate or unqualified to take up such a gargantuan challenge. And then sadly, we have some people who have the required vision, the best of ideas and all the ability to succeed but still lack one crucial ingredient. Success has never been for the faint hearted and greatness has never been nor ever will be the portion of those who fail to dare. Those who succeed in life aren’t always the strongest or the best qualified. It will often come down to those who “just do it”. We must model what we want to see in our children otherwise we’ll just be deceiving ourselves and wasting our time. I’m also one of those who sincerely believe we should be very careful who we point to as role models for our younger ones. It is better we sing the praises of those who made it in spite of the system, (often the biggest obstacle) but without having to cheat the system. Unfortunately, it’s the ones who cheat the system that we tend to admire

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and look up to. To use our lingo, they are the “smart” ones. I believe young people need to know that no matter which career path they decide to take in life, by achieving excellence in it, they too can be recognised and they too can become good role models to others. They don’t need to become banking gurus, oil magnates or telecom kings before becoming worthy of recognition or emulation. It’s important we get this message across to the younger generation loud and clear, so they can play to their strengths and enjoy the incomparable satisfaction of self-actualisation, rather than to seek in desperation, what they think society most applauds. While we’re at it, we can also bring to the attention of our people the simple fact that one’s age cannot in any way limit their ability to inspire others. A twenty five year old is just as deserving to be regarded as a role model to a forty year old, as if it was the other way round; so long as he inspires the forty year old to be better and to actualise what he has in him to be. The late Tolu Arotile readily comes to mind. Arotile became Nigeria’s first ever female combat helicopter pilot last year and was hailed for her bravery in defending her country against the Boko Haram terrorists. Her tragic death in July at the age of just twenty four hit everyone hard. Not a few would have been inspired by her obvious ability, without which she wouldn’t have qualified, her courage and her sheer determination to break convention despite what must have been intense pressure to subsume her ambition. Against all odds, she broke new grounds and the nation is all the better for it. Arotile just did it.

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postulating on business restoration and continuity, cash flow rebound and customer retention, when the domain of many microenterprises are being raided almost every day, is short of the mark. Accordingly, I intend to do a few pieces, going forward, on the impact of the current state of insecurity on entrepreneurship activity in Nigeria, especially with regard to small businesses, and the socioeconomic wellbeing of the nation. By so doing, I hope to draw attention to some of the challenges that arise when policy makers try to influence economic outcomes through financial support to economic agents of their choice, and not those selected by the market. I hope thereby to throw some light on the micro relations of insecurity and entrepreneurship in an environment like ours, and probably give some lead to the reasons behind the seeming ineffectiveness of public policy in this regard. I would therefore like to close the Recovery Series by restating that we are in the middle of the business continuity stage, which one could say is proceeding successfully. Although the country is still partially locked down, many business houses have reopened. We keep an eye on them and move over to something more life-threatening. Over the past several years, the risk of getting killed by Boko Haram terrorists, herdsmen or bandits (a group that is getting more and more indistinguishable) has moved rapidly north. Talking business without security now seems like a shot in one’s own foot. Perhaps it may be wise if we do something in the realm of entrepreneurship and the economics of insecurity, beginning next week.

Character Matters with Daps

Dapo Akande Such are what role models and national heroes should be made of. May her soul rest in peace. Failure to promote deserving role models is part of the reason we have the likes of hushpuppi and other suspect moneybags, some outright crooks and those whose sources of income remain opaque at best, filling the apparent vacuum. Such people continue to degrade our society by presenting themselves as role models to a generation of Nigerian youths, who have been conditioned to believe all that matters is a fat bank balance and a flashy lifestyle. If we truly desire a social renewal then we need to first identify and second, deliberately promote individuals who embody the values needed to provoke this renewal. We know to come to a full understanding of what needs to be done and then “just do it”. Changing the nation...one mind at a time Akande is a Surrey University graduate with a Masters in Professional Ethics. An alumnus of the institute for National Transformation and author of two books; The Last Flight and Shifting Anchors. Contact: dapsakande25@ gmail.com

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RE: Investors dump Lagos as Ogun becomes new industrial hub Tayo Ogunbiyi

he above story, published in BusinessDay of Monday, August 10, 2020, purportedly based on a study done in the last five years, made certain allusions that need prompt clarifications. It was alleged in the report, though with no empirical rationalisation, that local governments touts, terrorise corporate organisations to collect multiple taxes and levies in Lagos State. Since the above allegation is rather weighty, one would have anticipated the writers to come up with factual cases of such harassment, stating where, when and how it happened. Until such issues are properly addressed, the claim would remain nothing but a spurious and baseless assumption. Not only that, it is equally pejorative because it gives potential investors the false impression that the state is a lawless jungle where touting reigns supreme. Is this really the true picture of Lagos? No! Lagos is run on law and order. Any study giving the impression that Lagos is a place where corporate organisations are attacked at will is at best spurious and at most dubious. In the last 12 years, through the Lagos State Security Trust Fund, the Organised Private Sector (OPS) and the state government have been battling to put in place a seamless security plan with the aim of creating an

environment conducive for economic undertakings. The success of this novel model has made other states replicate the same. Now, how could such a model state suddenly become a pariah for investors? The imbalance in the said story is quite obvious in many other perspectives. For instance, the writers stated that Lagos and Kano are responsible for Nigeria’s jump to 131 from 146 in the 2020 World Bank Ease of Doing Business Report. True, Lagos was presented with the Presidential Enabling Business Environment Council (PEBEC) Award on Ease of Doing Business (EODB) in recognition of the state’s performance at the 2018 EODB Sub-National Ranking in Abuja by Vice President Yemi Osinbajo. The question, however, is how a state with such a prospect could abruptly become unsuitable for business. Another issue raised in the write-up is that of traffic and Apapa port congestion. But then, this did not just start five years ago. The port question has always been recurring, since the days of military rule. Trucks come from across the country to the port for obvious reasons. Though the port is the sole responsibility of the Federal Government, the Lagos State government has always been working closely with the federal authorities to ensure business interests are protected. The report leaves no room for all the measures taken to address the congestion. Governor Babajide Sanwo-Olu recently spent over five hours on a working tour of the Apapa axis, inspecting projects being developed by both the federal and state governments to improve traffic around Costain, Iganmu, Apapa and Mile-2 areas. The state government has also donated 30 hectares of land in Ijora for a trailer park as part of the enduring solution initiated to address the traffic situation. These, no doubt, are clear indications that the government is creatively

and passionately working to enhance business opportunities. To further underscore this, it recently signed the $629 million financing facility aimed at completing the Lekki Deep Seaport with China Harbour Engineering Company (CHEC). This is a reflection of the state government’s plan to explore investments and partnerships that would accelerate growth and benefit residents of the state. It is also a reflection of the state government’s resolute commitment to a private sector-driven economy where the OPS sets the agenda, makes things happen and probably drives the public sector. It is this strong belief in the private sector that propels the government’s collaboration with the OPS in various vital areas of the THEMES Agenda of the Sanwo-Olu administration’s development strategy. It is this same firm conviction that informed the regular meetings with the business community to discuss issues of mutual interest. The meetings, which began about 18 years ago, have provided an avenue for the public and private sectors to discuss quite a number of issues. The latest in the edition was held last month. This clearly shows that there is never a communication breakdown between the state and the OPS, as being insinuated in the report. Hence, saying that investors are unhappy with Lagos could only, at best, be in the imagination of the writers. With regard to multiple taxation and levies, the government has always affirmed that there is nothing of such in the state. Indeed, the government has commenced the implementation of additional reliefs and measures to further ease the impact of the COVID-19 pandemic on taxpayers and businesses. These additional measures and incentives are sequel to the initial three-month extension of the deadline for filing of annual returns (from March 31 to June 30, 2020). Also, taxpayers are to enjoy a waiver

‘

Without a doubt, Lagos is truly ready for business and things can only get better

Note: The rest of this article continues in the online edition of Business Day @https:// businessday.ng Ogunbiyi is deputy director, Public Affairs, Lagos Ministry of Information & Strategy, Ikeja.

The decoupling of the US and China has only just begun

Gideon Rachman

Business logic has been displaced by strategic rivalry

hen a familiar and comfortable situation changes dramatically, the human instinct is to believe that things will soon get back to normal. The idea that life may have changed permanently is too unsettling to deal with. We are seeing this mentality with Covid-19. We are also witnessing it as business responds to the downward spiral in US-Chinese relations. After 40 years of ever deeper economic integration between the US and China, it is hard to imagine a real severance of ties. Many executives believe that politicians in Washington and Beijing will patch up their differences when they realise the true implications of “decoupling” the world’s two largest economies. The hope is that a trade deal will stabilise things, even if it has to wait until after the US presidential election. But that is too complacent. The reality is that decoupling has much further to go. It is already spreading beyond technology and into finance. In time, it will affect every large industry, from manufacturing to consumer goods. And all multinationals — even those based in Europe — will be affected, as they navigate disrupted supply chains and changes in American and Chinese law. This process is being driven by a fundamental shift in the way both the US and China see their relationship. For the past four decades, business logic has prevailed over strategic

rivalry. But we are in a new world in which political rivalry overrides economic incentives — even for a US president who prides himself on being a dealmaker. When Donald Trump was informed that his new order — forcing US companies to cut ties with WeChat, a Chinese messaging app — would hurt American sales in China, his response was, “whatever”. This is not just Trumpian folly. There is now bipartisan consensus in Washington to get tough on China, even if it hurts corporate profits. A bill to force Chinese companies to delist from US stock exchanges if they do not open their books to US regulators was passed unanimously by the senate in May. In Beijing, too, the political imperative to assert sovereignty now overrides the business incentive to avoid confrontation with the US — China’s largest export market. Since President Xi Jinping took power in 2012, China has built military bases across the South China Sea, ended the autonomy of Hong Kong and imprisoned millions of Uighur Muslims in Xinjiang. Military threats to Taiwan are becoming more overt. Both sides blame the other for starting hostilities. The Chinese point to Mr Trump’s unilateral imposition of tariffs. The US responds that Google and Facebook were blocked in China more than a decade before the US took serious action against Chinese tech companies such as Huawei and ByteDance.

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Whoever fired the first shot, both sides are now locked into a retaliatory logic. If the US takes more measures against WeChat and Huawei, Beijing is likely to respond by further restricting US tech companies in China. As political tension mounts, so American consumer brands will be vulnerable to boycotts by a nationalistic Chinese public. That is potentially bad news for high-profile American brands such as Starbucks and the National Basketball Association. Emotions aside, decoupling is also driven by new assessments of risk. The vulnerability of Chinese companies including ZTE and Huawei to bans on sales of US computer chips has intensified China’s drive to become selfsufficient in key technologies. US companies are also hedging their bets. Apple, which has built its business around manufacturing in China, is making its latest iPhone in India, as well as China. The emerging field of conflict is banking and finance. Over the past decade, the US has deployed financial sanctions against countries including Iran and Venezuela to often devastating effect. Now it is beginning to use this tool in its struggle with China. Government officials in Hong Kong and Xinjiang have been targeted with sanctions, in effect shutting them out of the US financial system. Given the centrality of the dollar to global trade, international banks are wary of

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of penalty for late payment of liabilities under PAYE (Pay As You Earn) that was due during the period of MarchMay 2020 when the state was under COVID-19 lockdown. In addition, a waiver of penalties due on late filing of 2020 annual tax returns known as “Form A” is also granted, while a remarkable waiver of interest and penalty on liabilities arising from 2009 to 2015 tax audit for taxpayers who can pay up on or before December 31, 2020 is also part of the deal. Similarly, in appreciation of taxpayers that have supported the state government in the fight against the pandemic, the government is equally granting tax credit of 20 percent of all cash and kind donations made towards COVID-19 by individuals resident in the state for the 2021 Year of Assessment (subject to a cap of 35 percent of tax due). The 2018 Land Use Charge (LUC) Law has been reviewed to bring a huge relief to all, including corporate organisations. The penalties for 2017, 2018 and 2019 have been waived. This translates to over N5 billion potential revenue losses for the government. There is also 48 percent reduction in the Annual Charge Rates, just as the annual rate for agricultural land has been reduced from 0.076 percent to 0.01 percent, which represents an 87 percent reduction from the old rate. In collaboration with the private sector, the state government has, in the last 12 years, built 13 Independent Power Plants (IPPs) across the state. In furtherance of this, the Sanwo-Olu administration, in collaboration with Eko Innovation Centre, has unveiled a Smart Meter Initiative tagged ‘The Lagos Smart Meter Hackathon 2020’.

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violating these. That risk is manageable, while it is confined to a few individuals. But what happens if and when financial sanctions are applied to major Chinese companies? Wall Street banks, which have made a lot of money listing Chinese companies in New York, are assuming that even if further listings are banned, they can bring companies to market in Hong Kong. But that would rely on the forbearance of both the American and Chinese governments — neither of which can be taken for granted. European or south-east Asian countries and companies are unlikely to be able to stay on the sidelines. The UK’s decision to open its 5G telecoms market to Huawei — in the teeth of US opposition — proved to be unsustainable. HSBC, which is headquartered in the UK and makes 80 per cent of its profits in Asia, has been dragged into the rivalry through its role in giving evidence in the US prosecution of Meng Wanzhou, chief financial officer of Huawei. Big business will want to stay neutral in the emerging cold war between the US and China. But that may prove impossible. The past 40 years of world history have been built around globalisation and the rapprochement between the US and China. But that world is fast disappearing.

F a

Wednesday 19 August 2020

BUSINESS DAY

Editorial Publisher/Editor-in-chief

Frank Aigbogun editor Patrick Atuanya

COVID-19: Fast-track cashless policy With growing enthusiasm towards cashless transactions, Nigeria mustn’t be left out

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

he COVID-19 pandemic has dramatically changed the world of banking and payments. For us in Nigeria, it provided an opportunity to realise the importance of the e-payment system. With the observed lapses during and after the lock-down period, there is the urgent need for the government to expedite action on the implementation of the existing cashless policy to meet growing customers’ needs. In February this year, the World Health Organisation (WHO) advised people to wash or sanitise their hands after handling physical money. And service providers world over became more emphatic in their demand for cashless transactions to ensure the health and safety of both customers and employees. COVID-19 came with a change in people’s banking habits. Around the world, bank customers now prefer to do business from the comfort of their homes and offices than banking halls. But in Nigeria, the story is

not entirely the same. Huge crowds still surge around banks’ premises. What was witnessed in June when the federal government temporarily lifted the lock-down was a pointer to the fact that the cashless policy is yet to be embraced by millions of Nigerians. When the Central Bank of Nigeria introduced the cashless policy in December 2011, it was expected that the impact would lead to the modernisation of Nigerian payment system, reduction in the cost of banking services as well as reduction in high security and safety risks as well as curb bank frauds and foster transparency. But the card system technology, especially the Automated Teller Machine (ATM) remains a nightmare with long queues and faulty operations. In recent times, there have been an upsurge in armed robbery attacks in banks. They were attracted by the presence of huge cash in banking halls. Internet banking frauds, epileptic power supply across the country and faulty technology compound customers’ woes. On a daily basis, more and more customers throng the banks premises to

resolve one problem or the other. This should not be so. With growing enthusiasm towards cashless transactions, Nigeria should not be left out of the global movement. In the United Kingdom for instance, by April this year, consumer research found that only one in 10 percent of UK residents still wanted to pay in cash. The same scenario was witnessed in Switzerland which fell by nearly 50 percent between mid-March and mid-April, while more than 11,000 vendors joined a cashless payments system. Other countries including Canada, Greece, Ireland, Malta, Poland, and Turkey, Mastercard and Visa actively worked with the governments to provide a touchfree experience to customers and make it easier for merchants to accept cashless payments. A cultural shift was noticed in cash-loving Germany as well. For the first time ever, both the country’s biggest retailers and small businesses – who used to accept only banknotes and coins – joined the war on cash and actively began to promote

the use of cashless payments. Overall, 57 percent Germans use cashless payment methods now more than they did before the pandemic. Japan, which is one of the most cash-based economies in the advanced world, is also contemplating a federal growth strategy to promote a cashless society culture as a response to the needs of a post-COVID era. In Nigeria, restrictive government regulatory policies limit investment in several sectors of the economy. The CBN’s desire to have 80 percent of adults use mobile money by the end of this year is not feasible. But it can do other things such as license more mobile money agents, strengthen existing card systems, and improve online banking security, citizen awareness and sensitisation on the benefits of e-payments. With more people staying home, Nigeria and indeed, global online payment platforms would continue to witness increase in payment volumes. Therefore, there is no other time than now for an accelerated move to a new cashless paradigm.

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COMPANIES&MARKETS These African countries have been tipped to suffer the worst of COVID-19 Oluwafadekemi Areo, Favour Olarewaju & Mercy Ayodele

ccording to the International Monetary Fund (IMF ), S u b -S a h a r a n Africa has been projected to contract by 3.2 percent in 2020, with oil exporting and tourism dependent economies dipping the most. Net oil-exporting and tourism dependent economies in SSA experienced an unprecedented twin shock in 2020. The Net oil-exporting countries had to deal with the global economic contraction effect of the coronavirus pandemic as well the biggest oil price shock in modern history. To u r i s m d e p e n d e n t economies on the other hand were faced with the spiralling effects of the pandemic as well as restrictions on international flights which reduced the arrival of tourists to a single digit. On the 2020 contraction projection ranking for oil exporting countries in SSA , Congo Republic is expected to contract the most at 8.6 percent and closely following this

rate is Equatorial Guinea which will contract by 8.1 percent. Nigeria and Angola are expected to contract 3rd and 4th place in the contraction projection ranking for SSA at 5.4 and 4 percent respectively.

Nonetheless, South Sudan is projected to experience a slower growth rate of 4.7 percent in 2020 as against other contracting oil exporting SSA countries. Surprisingly, South Sudan has the highest inflation projection of 24.5 per-

cent whereas Equatorial Guinea which was ranked second on the list of SSA oil exporting countries to suffer the most contraction is projected to have the least inflation level at 1.7 percent in 2020. Overall, inflation in the

NIWA opens talks with UK, Swiss firms to remove wrecks on waterways …vows to strengthen safety guidelines, curb boat mishap AMAKA ANAGOR-EWUZIE

etermined to ease vessels and boat navigation on the nation’s inland waterways, the National Inland Waterways Authority (NIWA) said it has begin discussions with some United Kingdom (UK) and Swiss Marine firms to remove wrecks littered on the inland waters. George Moghalu, managing director of NIWA, who disclosed this in Lagos during a stakeholders’ meeting with boat operators organised by the Authority’s Lagos Area Office, said the firms when engaged, will remove the wrecks for other purposes and pay the Federal Government in return. According to him, NIWA is determined to make Nigerian inland waters navigable for 24/7 in order to promote safety and encourage water

transportation. He said the authority will not leave any stone unturned in tightening the safety regulatory procedure on passenger boats in order to curb accident on inland waters, adding that over five avoidable boat mishaps happened in the last one month across the nation. “We are going to enforce all safety regulations for operations on the waterways. We are going to recertify all boats and retrain all boat captains. NIWA would also impound all boats that aren’t worthy to be on the waterways,” Moghalu said. Moghalu, who described life lost on waters as huge loss to the nation, said that operators must adhere to speed limit rule because the authority would commence rigorous patrol on the waterways. Stating that the buy in of stakeholders including boat

operators, jetty owners and was pertinent in enforcing safety regulations, he said that most of the boats in the country aren’t designed for night operation but stubborn operators have continued to flout this rule. “Most of these accidents happen at night and the takeoff was not from NIWA jetties. This shows that compliance isn’t in doubt at NIWA jetties for certified operators. Our random checks would also include visit to boat yards,” he said. He however pointed out that the authority would also streamline the use of lifejacket in terms of quality and colour. Given insight into things operators would see going f o r wa rd , Jo s e p h O ro ro, general manager, Marine Department of NIWA, said it would no longer be business as usual for operators because the accidents have

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become too many. According to him, NIWA ha s n o t o n l y l i s t e d t h e responsibilities of both operators and passengers, but will also insist that operators balance the boat and ensure that the boat is not overloaded. He sa i d t h e re w ou l d be more safety awareness campaign to teach operators and passengers on the practical ways of averting mishap. “We are going to train and certify operators going forward. We are presently fine tuning the course content before commencing the training while re-fresher courses would be organised for already trained operators in order to revalidate their certifications,” he said. Ororo also stated that safety talks would be given to passengers on NIWA jetties before boats would be allowed to takeoff.

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oil exporting SSA countries has been projected to skyrocket from 11.7 percent in 2019 to 13.3 percent in 2020. The contraction projection for tourism dependent economies revealed that Seychelles will contract the most at 13.8 percent followed closely by Mauritius, Botswana, and South Africa at 12.2, 9.2, and 8 percent respectively. Meanwhile, according to CEIC data, Mauritius’s To u r i s m R e c e i p t s w a s about US$562.9 million (at exchange rate of 39.80 MUR) in March 2020. This records a decrease from the previous number of US$ 716.5 million ((at exchange rate of 39.80 MUR) for December 2019. Also, CEIC data records that Mauritius had a dras-

tic decline in tourist arrivals from 55,863 in March 2020 to an average of 13 persons between April and June 2020. Similarly, Kenya’s tourist arrival dropped from 47,296 in March 2020 to 12 in April 2020, according to CEIC data. Overall, within the first qu a r te r o f 2 0 2 0 , i nte rnational tourist arrivals w o r l d w i d e d ro p p e d by 22% due to the corona virus pandemic, the United Nations World Tourism Organization (UNW TO) reported. UNW TO proceeds to forecast that international tourist numbers could decline by 60-80% in the year 2020. This resulted in a decrease of 67 million in international arrivals and about $80 billion loss in exports. In retrospect, unlike the double-digit inflation projection for oil exporters in SSA, IMFs 2020 projected inflation for tourism dependent economies is single digit. While Tunisia takes the lead on highest inflation projection at 6.2 percent, Botswana is estimated to have the least inflation rate at 2.1 percent among tourism dependent economies in the SSA region.

WAPIC gets shareholders approval for change of name to Coronation Insurance Plc Modestus Anaesoronye

apic Insurance Plc has secured the approval of its shareholders to change the Company’s name to Coronation Insurance Plc. The change of name came as a Special Resolution during the Company’s 61st Annual General Meeting held in compliance with Covid-19 directives. Mu t i u Su m o nu , n e w chairman of Wapic who presided over the meeting said the decision was aimed at enabling the Company reflect its independence, achieve set goals and in line with ongoing transformations in the nation’s insurance industry. Sumonu assure d the shareholders that this resolution was in the best interest of the Company and would reflect the direction it is going as a leading player in the industry. The shareholders, including Sunny Nwosu, national coordinator, Independent Shareholders Association of @Businessdayng

Nigeria and Boniface Okezie, chairman, Progressive Shareholders Association of Nigeria applauded the immediate past chairman, Aigboje Aig-Imoukhuede for leading the transformation of Wapic Insurance that has not only brought the Company back to position of relevance , but as major player in the industry. They however urged the new chairman to step in the shoes of Imoukhuede and bring more value to shareholders, while giving their promise to support the new board to take the company to greater heights. Adeyinka Adekoya, managing director/CEO, Wapic Insurance speaking on the performance of the Company in 2019 financial year said the Group recorded a 17 percent growth in gross written premium to N15.20 billion from N13.89 billion in 2018. While this could not translate to huge profitability, she said the year 2019 was a challenging year for the company as it was only able to achieve marginal growth in her Gross Written Premium.

Wednesday 19 August 2020

BUSINESS DAY

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USTDA subsidises Konexa’s 2.5MWp electrification project in Kaduna MIKE OCHONMA

lectricity provider; Konexa is receiving a grant from the US Trade and Development Agency (USTDA) to expand its operations in Nigeria. The grant is part of Prosper Africa, a U.S. government initiative to increase two-way trade and investment between the United States and Africa. Konexa aims to generate 2.5 MWp of electricity from several solar photovoltaic systems and distribute power to Kaduna. The small solar power plants will be installed to supply mini power grids serving residential (household), commercial and industrial customers in the

northern part of Nigeria. Although, the USTDA did not specify the amount of its subsidy, the financial institution indicates that its support will enable the technical and financial studies to be carried out. The studies will also address the regulatory and legal requirements of the minigrids project. “This project will support the development of critical energy infrastructure and an innovative business model to improve the generation, transmission and distribution of electricity in Nigeria, as well as to improve the supply of electricity to off-grid customers,” said Thomas R. Hardy, acting director of the

USTDA. According to U STDA sources, an American company will be selected on a competitive basis to carry out the studies. The company selected at the end of the process will also carry out the environmental and social impact studies, assist in the selection of the meters and thus provide an analysis of the expected impacts of the development of the minigrids. The USTDA grant is also intended to support the acquisition of 30 MW of hydropower capacity from an existing but decommissioned plant. The electricity will be distributed through the Konexa grid.

L-R: Dr. Richard Ajayi, Company Medical Adviser, Nigerian Breweries Plc; Dr. Onwuamah Chika, Senior Research Scientist of Nigerian Institute of Medical Research (NIMR); Joy Egolum, Corporate Affairs Manager, Nigerian Breweries Plc and Aneke Chinyere, Medical Lab Scientist, Nigerian Breweries Plc. during the donation of drinks, sanitizers and nose masks to the Nigerian Institute of Medical Research (NIMR) in Lagos.

Cititrust promotes Afolabi Martins to Group Executive Director, Finance IFEOMA OKEKE

ititrust Holdings Plc has announced the promotion of Afolabi Martins to Group E xecutive Dire ctor, Finance & Strategy. Prior to the p ro m o t i o n , h e w a s t h e company’s Group Chief Finance Officer. Afolabi holds a Bsc in

E c o n o m i c s f ro m L a g o s State University, MSc Economics from the University of Lagos and M.Phil. Development Finance from the University of Stellenbosch, Cape Town South Africa. He is an Associate of the chartered Institute of Stockbrokers and Fellow of Chartered Institute of Accountants of Nigeria. Afolabi has a cumulative

20 years work experience in the Nigerian financial and capital markets. He has previously worked with a number of capital market companies, including, Futureview Financial Services Ltd, Standard Alliance Capital and Assets Management and was also Chief Executive Officer of Kinley Securities Ltd.

L-R: Chairman/Chief Executive Officer, Westgate Technologies , Casmir Ezeudu, Delta State governor representative/Commissioner for Science and Technology, Matthew Itsekiri and Delta State Commissioner for Finance, Fidelis Tilije, at the commissioning Westgate ICT Centre in Asaba

VDT breaks new grounds with 100% service uptime

DT Communications, a broadband service provider in Nigeria, has broken new grounds by being able to deliver 100 percent service uptime to those customers who cannot afford any downtime in their internet service provision. This VDT does by multiple redundant trunk deployment for such customers. Apart from ensuring 100 percent service uptime, this technology also offer several other benefits to the customers such as increased speed, increased operational flexibility with the multiple redundant trunks and reduced latency as a result of lower congestion if the primary trunk fails, according to David Ese, the company’s marketing communications manager. This technology reinforces a high level of service reliability and quality. Moreover, it saves the customers enormous cost and time by eliminating the need for multiple broadband vendors. VDT Communications Limited, an ISO 9001:2015

and the 1st ISO 20000:2011 internationally certified telecom company in Nigeria for excellent IT service management is passionate about consistently offering the highest possible quality of service to her customers. Also, the company provides excellent after-sales services through her well trained and adequate personnel. In a recent survey conducted the company’s speed of response is arguably the fastest in the industry. This is made possible due to the company closeness to her customers throughout the country with over 130 POPS/business offices spread across all the states and FCT Abuja. The consistent premium quality of services offered VDT Communications has made the organisation the toast of the financial sector which relies on highest quality of broadband communications services for optimum operation. As a result, VDT provides services to about 90% of banks and 80% of insurance companies among several other bluewww.businessday.ng

chip multi-national and indigenous companies across all sectors in Nigeria. The Enterprise broadband communications services offered by VDT include: Digital Leased Circuit, Metro Wireless Access, Metro Fibre, Corporate Internet, ATM solutions, Wifi Hotspot and Cloud services. In addition the company also offers SMEmpower; providing affordable broadband solutions to small and medium size companies as well as 4G Lte Advanced Retail Internet Services based on popular demand. In all her service provisions, the company strives to maintain world class service quality and best practices in terms of customer-services, satisfying and delighting her customers. With the introduction of the 100% service uptime technology, several customers are taking advantage of the service to eliminate the cost of having multiple vendors, yet ensure smooth running of their businesses without the hindrances due to downtimes, unreliable or slow or networks.

L-R: Okanlawon Adelagun, executive director, technical ; Daniel Braie, managing director; Joshua Bernard Fumudoh, chairman, and Moses Omorogbe, company secretary, all of Linkage Assurance Plc., at the 26th annual general meeting of the company in Lagos. Pic by Pius Okeosisi

L-R: Ebuka Obi-Uchendu; Chima Patience Ebor, head priority and premium banking; David Idoru - head, retail banking Nigeria, and DJ Obi, at the launch of the Premium Banking segment of Standard Chartered Bank’s Retail Banking business in Nigeria recently.

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Wednesday 19 August 2020

BUSINESS DAY

INTERVIEW ‘HIVE Leagues is helping football players actualize professional sports aspirations’ Henry Koko is the Founder and CEO of the HIVE Leagues; a Sports and recreation management company that creates sporting events for regular, active people to enjoy the physical, mental and social benefits of team sports as well as for the aspirational youth who dreams of going professional with their talent and love for sports. In this interview with BusinessDay’s Endurance Okafor, the CEO who in October 2019 facilitated the participation of a team of everyday Nigerians, from different professions, ages and backgrounds to attend the 6-a-side Socca World Cup held in Greece shares insight on how HIVE Leagues is contributing its quota in growing Nigeria’s sports industry. Excerpt:

ell us about yourself I am co-founder/ CEO of the HIVE Leagues and President of Socca, Nigeria which is an affiliate to the International Socca Federation, the world governing body for small sided football. I have a Chemical engineering degree from the University of Science and Technology, Port Harcourt and a Master in Environmental Technology from the University of Manchester, United Kingdom. I am also an alumni of the Johan Cruyff Institute of sports management, Barcelona. I am currently a career engineer with about 13 years’ experience and counting. I have been blessed to work within a very structured & people-focused organization and I feel blessed to be able to deploy technology to create real solutions, every single day. My sports journey over the years has been football – table tennis – pool/ billiards – bowling then lawn tennis and tennis does win the title of best other sport. I started playing four years ago and ever since it gets harder and harder to stay away from the courts. Thoroughly enjoyable sport. Growing up, my favourite footballer was the one and only Diego Maradona; I used to mimic his runs, leaps to evade tackles when playing myself. I simply adored the man, the legend back then. I can’t say I supported any football club team as a young lad, but I certainly did favour a club side called Sharks FC of Port Harcourt (growing up I lived in Port Harcourt). I remember my uncle going to watch this team regularly. That’s the closest I have been to support a team as a boy. Of course, the huge influence of the Premier league soon got me supporting the best team in London. I have always enjoyed and participated actively in recreation and sports but my sports entrepreneurial journey only commenced in 2019 with the establishment of the HIVE Leagues. You have an engineering background but you founded a sports company. What is the

stimulating good quality local sportswear manufacturing. What are your prospects for HIVE Leagues, say in the next five years? Within the next five years, we intend to: - build a reputation as a dependable intermediaries for youth helping them into sports careers (local or international) - establish playing hubs and leagues in every state of the federation including ones exclusively for women - develop routine events targeted at corporate organizations for wellbeing and increased productivity - Host at least one international sports event in Nigeria - continue to have regular participation of everyday Nigerians in annual international events

Koko

idea behind setting up the HIVE Leagues? At the core of the HIVE Leagues is organizing sports and recreational events for pleasure, wellness and social interaction for everyday people. During my master degree in the UK, I found myself organizing the weekly football sessions for my hall of residence. Since I started my engineering career, I have also frequently found myself in an organizing role for sports, recreation and team building activities at work. Looking back now, I have been helping people to engage in sports and recreation for nearly 15 years. The common thread running through all my experiences is that there is always a need for someone to plan and organize these recreational events. This inspired the creation of the HIVE Leagues. Since inception, how many Nigerians have been able to tap from or enjoy the services you offer at HIVE Leagues? Since we began setting up events from mid-2019, at least 500 individuals have participated in our “open pitch” events, socca leagues or even played at the 6-aside World Cup in Crete, www.businessday.ng

Greece. Of course, the pandemic has disrupted our plans and schedule for this year but we hope to get back on track as soon as it is safe to do so. How has HIVE Leagues contributed its quota in supporting Nigeria’s sports industry? To mention a few of our contributions, our leagues and events give developmental opportunities and visibility to young aspiring sportspeople. The working class is not left out, as our business and corporate leagues encourages and gives workers an opportunity to keep fit, healthy and network. We also encourage local sports businesses by patronizing them for sports goods, merchandise and facilities. What differentiates HIVE Leagues from other sporting companies in the country? At the HIVE Leagues, we give individuals in cities and communities across the country access to organized participatory sports and excellent sport-themed experiences. Our online platforms give participants visibility, locally and internationally and we are currently building the capability

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to help players actualize their professional sports aspirations. What are some of the challenges you have encountered in running HIVE Leagues? Some of the challenges include lack of facilities, funding and strategic partnership What are some of the opportunities you see in Nigeria’s sporting industry and how best can it be harnessed? Some of the opportunities in Nigeria are; - real estate; building accessible, secure and functional sports arenas and facilities for sports participation and spectatorship - merchandising and manufacturing; can we get the Nigerian alternative to Nike? Functional and accessible facilities in secure locations will encourage the organization of more sports events, and participation from members of the public either as players or spectators at these events. More people will pay to play in or watch exhilarating games. With more events, more participation and viewership, there will be an increased demand for kits and other apparel thus increasing the market size and @Businessdayng

What advice do you have for young Nigerians who are aspiring to become sportsmen and women and those who want to become CEOs? For an aspiring (professional) sportsman/ sportswoman, I would say getting basic education is very important so please don’t skip school. You must love the sport you have chosen to ‘go pro’ with so that work can be rewarding on all levels. Please start as early as possible and train daily – shoot for 10,000 hours to become a Master. Finally, talent is important but you need tenacity and a plan. In the words of Samuel Johnson, “Great works are performed not by strength/ talent, but perseverance”. On the other hand, to be a successful CEO (whether within an organisation you have founded or one where you have been employed/ appointed), you will need these 3 critical abilities: - Decision making (since your primary job function is to make good, timely decisions) - Perspective (to see the big picture and yet plan with the finer details at the same time) - Influence (the ability to win with people, inspire & motivate, in any situation) Remember to be confident, seek support, share credit with your team and always be your authentic self.

Wednesday 19 August 2020

BUSINESS DAY

INTERVIEW

‘Education leaders must embrace positives from Covid-19 to deepen teaching, learning outcomes’

International examinations in Nigeria and Sub-Saharan Africa are increasingly gaining traction, driven chiefly by demand for foreign certifications and global standards recognition. JUAN VISSER, regional director for Sub-Saharan Africa at Cambridge Assessment International Education in this interview with KELECHI EWUZIE, speaks on how the organisation is leveraging collaboration with schools, universities, governments and key education organisations to boost the number of Outstanding Learners across Sub-Saharan Africa. Excerpt: What are the biggest challenges facing Sub Saharan Africa when it comes to external examinations? How does the Cambridge international award help to address these? he challenges vary from one African country to the other as with many regions globally. There is the challenge around distance and standards, but one of the biggest advantages of the Cambridge curriculum is that it allows learners, teachers to think. The standards set by Cambridge are the same globally and this means that teaching and learning standards in each country has to be on par for our schools. A core part of our curriculum is that learners are taught to be independent thinkers and apply knowledge gained. So basically, we find that institutions of higher education tell us that learners that have studied via the Cambridge path are sought after by institution of higher education. There are many universities that wish to increase their percentage of Cambridge learners because of the benefits of our study approach and the robustness of our examinations. This is because by studying Cambridge Curriculum, they have been exposed at a very young age to the process of starting to apply knowledge. This process helps students to be able to think cross curricular and stand them in good stead to be a good fit when they actually go into higher education. The curriculum is designed so that it will be practical application based and also learner centered. We also have excellent support in terms of textbooks that backup our curricula printed by our partner the Cambridge University Press and several other publishers. So having these background resources means that learners are able to get the necessary information and expertise that they need. Obviously these materials are ably supported by the schools and I think the fact that learners do so well within Nigeria points to the excellent quality of schools that offer the Cambridge curriculum because schools have to go through a very rigorous process to become accredited. Just like our examinations, it’s the same process for each individual school, if they are based in Nigeria, as anywhere else globally, it means that the schools are world-class.

of the schools, once inspections are completed, and they also ensure the school meets global standards. The British Council assists us to ensure that the school meets the necessary quality standards.

Can you tell us about the Cambridge International examination awards? How have students from Nigeria performed since the inception of the awards? Firstly, to provide a bit of background, Cambridge International operates in over 160 countries globally. We have more than10,000 schools around the world and the country with the largest number in Sub Saharan Africa is

Juan Visser

Nigeria with over 384 schools that offer the Cambridge curriculum. It is an incredible feat as every year, Nigeria produces winners. The purpose of the outstanding Cambridge international learner awards is to recognise excellence. We have very strict categories like Top in the world and Top in country. In some categories, we compare these learners to all other learners entered for the same Cambridge examination in schools globally. We also compare with learners within Nigeria. We look at the performance of Nigerian schools as a whole. So, the candidates will be ranked against their peers. Since we offer an international curriculum and the same examination globally that the learner sits, what we do is that Cambridge can compare learners in different schools. This allows us to recognise the top achievers. Again, what makes the process fantastic is that a learner sitting for the examination in a country like Singapore, England or the USA will be taking the same examination for any particular subject. So getting Top in the World means that candidates have competed against the entire globe which is excellent and a very good showing for a very high number of students who actually have achieved this accolade. I will not like to give a comparison of country by country, but I can say that Nigeria always produces a very high number of Outstanding Learners every year, which is excellent. In the last five years, how would you assess the performance of students from Nigerian schools in the awards? Well, as I said, we don’t give the actual ranking, but what we do is basically give the awards after the examination. www.businessday.ng

However, we are aware that the marks are standardized. Once the marks are standardized, we are then able to assess which learners have got the highest marks in that subject globally, or within the individual country as the case may be. We also make sure that there is a critical mass of examinations for that subject within that country. If it’s really low numbers within the country taking a specific subject, we will not issue and award for that subject. Basically, learners would need to achieve a certain threshold grade. Therefore usually it could only be between learners that have got an A or A star grade are put against each other in other words, the very best performers. How has the partnership with British council and other agencies helped improve schools, and also the students over the years? You have touched on a very important point. In Nigeria, all our schools are registered via the British Council. So, the biggest benefit with that is the schools then have a local Point of Presence with British Council offices, in large cities including Lagos and Abuja. So, there is a point of presence on ground. We also have an in-country representative who is based in Lagos and is our territory manager for Nigeria. We have people on ground that make sure the schools are served if they need assistance. We also have global support systems in Cambridge, so they are able to link into them to receive accurate information. The partnership with the British Council meant we had people on the ground to ensure very strict standards of adherence with the British Council in many countries globally. They operate as an associate for payments, they will ensure inspection

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We have the new normal enforced upon by Coronavirus pandemic across the globe. How has that the pandemic impacted on your operation and what steps have you taken to ensure the smooth operation of examination going forward? As you know, the new normal will be quite different to what we experienced. Cambridge as an organisation has been in operation for well over 100 years. We have to learn to deal with difficult circumstances for example even during the Second World War our school examination then still took place. This puts the current pandemic into perspective. Cambridge, like most exams boards switched to an assessed grade system for the June 2020 examination series as the safety of our learners and school staff is paramount. The grades were assessed by the teachers at the school and then forwarded to Cambridge for moderation very similar to the old systems that were used by many other Examination Boards because physical examinations were just not possible and also for the safety of learners. Quite literally, we have to build the system from scratch, we did this in record time, almost like we were flying the airplane and building it at the same time. But in short, we have been able to ensure that learners impacted by COVID who were supposed to sit for examination in the June series have not been impacted. They will still be able to get grade results and will continue with further studies. As COVID showed us we found certain innovation and ways of doing things as in any time of crisis using systems where we are able to adapt, this is some of the things we want to take forward such as offering online teacher training to our schools. Our examination results have been released on 11th of August and then once we get through that, the next major target is running our November examination series. We plan to still run paper based physical examinations as per normal. We will keep assessing the situation. One of the developments because of Covid-19 might be more use of digital resources in education as the world adapts. We should seek to keep the useful innovations that this time has created. For example: Cambridge will continue to run online teacher training supplemented by face to face teacher training. Due to the Coronavirus, we have had to innovate, and we will retain the best innovations. We will also publish a lot of support @Businessdayng

for our schools. We will extend support for schools and have an entire section on our website dedicated to teaching and learning so schools that are closed can still find support systems over there. Some of our materials and systems been made freely available to our schools and learners. We have school online community tools for supporting real life teaching and learning webinars, online training resources as well as e-books from our Cambridge University Press publishing partner. The next phase is we are looking at a series of assistance to schools when they return to learning. This support would come from Cambridge International, the British Council as well as Cambridge University Press. We will be looking to work on our support systems, for example is how do you measure a learner’s readiness/ progress who is just back after several months of not being at school? From your experience over the years, what would you advise Africa leadership to boost the education system in the region? In a nutshell, I will advise Africa leaders to embrace what has happened and see what learning’s they can take from these terrifying times. Covid-19 has happened, there is nothing we can do about it, rather leaders should ensure that they learn from it and try to keep teaching and learning going, even when schools are closed. Essentially, African education leaders to embrace what is taking place and look for the positives which they can take from there and apply those learning. I know we will all come out of this Covid-19 pandemic stronger than ever. Where do you see the Cambridge international examination awards in the next 5 years especially as it affects Nigeria? I would see Nigeria within the next five years continuing to be a part of the educational systems on offer. Also, we will like to see closer cooperation and working with local examinations boards so we can understand what each other is doing. We are open to such engagement and using the current circumstance to understand all the challenges that have occurred in other organisations. We continue to receive applications from schools in Nigeria at this time to be accredited to offer the Cambridge Pathway and we will be honoured to continue to be part of the educational landscape of Nigeria. I’d like to see us moving from our current over 380 accredited schools in Nigeria to over 1000 during this period to be able to positively impact the lives of as many learners as possible. We appreciate the effort of all our school to keep learning active during this time. I pray that the global situation will return to normality by early 2021.

Wednesday 19 August 2020

BUSINESS DAY

insurance today

E-mail: insurancetoday@businessdayonline.com

Insurers positive African Trade Insurance Agency will expand market operations for growth Modestus Anaesoronye

igerian Insurers are positive that the African Trade Insurance Agency recently accented by President Mohammadu Buhari will expand market operation for growth. Muftau Oyegunle, president, Chartered Insurance Institute of Nigeria reacting to the development stated that the growth of the Agency would go a long way in creating an enabling platform for foreign trade and equally engender economic activity within the sector that would ensure improved contribution of the insurance sector to the Nation’s G.D.P. Oyegunle who lauded the signing of the instrument of accession of the agreement for the establishment of the African Trade Insurance Agency by President Muhammadu Buhari, expressed excitement. Reacting to statement credited to The Senior Special Assistant to the President on Media and Publicity, Garba Shehu, which said that President Muhammadu Buhari has

signed the instrument of accession of the agreement for the establishment of the African Trade Insurance Agency, Oyegunle stated that the Government under the leadership of President Muhammed Buhari had demonstrated first-hand its commitment to the growth of the Insurance industry in Nigeria. “ATI is a Pan-African institution that provides political risk insurance to companies, investors, and lenders interested in doing business in Africa. Its deep African roots have positioned the organization to understand and assess the risks synonymous with the region and to help mitigate them. Its reputation as well as its credibility, financial strength, underwriting capacity, its robust risk solutions and risk assessment has ensured that it is credibly rated by Clients.” Oyegunle stated that the growth of the Agency would go a long way in creating an enabling platform for foreign trade and equally engender economic activity within the sector that would ensure improved contribution of the insurance sector to the Nation’s G.D.P. A memorandum from

Muftau Oyegunle

the Attorney General and Minister of Justice Abubakar Malami SA, equally stated that the request for the President’s signature on the agreement was sequel to the directive of the Federal Executive Council, that the instrument be prepared and forwarded for execution.

The ratification was adopted at Grand Bay in the Republic of Mauritius on the Eighteenth Day of May, 2000 and the purpose of the Agency is to provide, facilitate, encourage and otherwise develop the provision of, or the support for, insurance, including

coinsurance and reinsurance, guarantees, and other financial instruments and services, for purposes of trade, investment and other productive activities in African States to supplement those that may be offered by the public or private sector, or in cooperation with the public or private sector. Highlighting the timely nature of the Act, Oyegunle stated that it was coming at a time when the Insurance industry was in need of all the benefits that the Act would bring to the fore. He stated that the signing of the Act by President Muhammadu Buhari would inspire confidence in foreign entities and investors who have an eye on the Nigerian Market and this would result in more partnerships as well as exchange of ideas and technology. Oyegunle urged the Presidency to retain the faith in the industry and goodwill that has extended in recent times stating that the Industry would repay with significant contributions to the growth of the economy. He said “it is heartwarming to see that President Muhammad Buhari is actively promoting the growth of the Insurance industry. As one of the four pillars of financial

inclusion, this Act signed by the President for the take-off of the Africa Trade Insurance Agency is a worthy enabler for the industry to boost growth and improve the economic fortunes of the Country. It is a much welcome development for the industry and we are excited about all the positives that it will bring. We have not scratched the surface in terms of what Insurance can bring to the table and the emergence of this Agency along with credible initiatives being implemented by our Regulator, NAICOM, will help to significantly harness the potentials inherent within the Nigerian Insurance Industry.” Oyegunle equally commended the Commissioner for Insurance O.S. Thomas for his stewardship of the National Insurance Commission so far and stated that this development is an indicator that the Insurance industry is on an upward curve. He called for Insurance professionals to continue to uphold the values of professionalism in line with the code of ethics and professional conduct as stipulated by the Institute to ensure the industry sustains its growth.

Anchor Insurance grosses N5.1bn premium YTD Modestus Anaesoronye

nchor Insurance Company Limited, a fast rising underwriting firm in the country, has grossed a premium of N5.1 billion in 2020 year to date, compared to N4.2 billion premium income as at the end of 2019. Speaking with Journalist in Lagos, Ebose Augustine, managing director of the Company disclosed that despite the effect of Covid-19 pandemic on business operations, Anchor Insurance was still able to achieve this result, noting that the underwriting organization’s production would have been above N7bn by now if the pandemic had not set in. According to him, “we started the year well and from all our efforts and aggressive marketing, it was clear we were going to hit at

least N7bn by mid-year 2020 but for the pandemic since March which has made the insuring public to review their insurance budgets downwards.” According to him, “despite the Covid-19 challenges, we have surpassed the N4.2 billion premium

Ebose Augustine Osegha www.businessday.ng

income we wrote in 2019 as I can confidently tell you that as at second week of this month of August, our performance stood at N5.1 billion,” stating that for the remaining months in the year, he was sure the Company will raise this result to a greater figure.

Responding to how the Company has been doing its marketing since the advent of Covid-19, Ebose explained that “it was like we at Anchor Insurance foresaw this pandemic period when we invested in most modern information technology to drive our business. “So, it was not difficult for us to continue to navigate the insurance market using what we had already put in place and it has really helped in ensuring we never suffered any panic in this era of doing business differently,” he noted. He said “this manifest new approach to doing insurance business even before the advent of Covid-19 alongside other giant strides made by the Company earned us an award as the “Insurance Company of the Year 2019. Ebose explained that the Company whose 2019 accounts has been approved

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by the National Insurance Commission (NAICOM) and Annual General Meeting (AGM) accordingly fixed for September 4th is not looking back at pushing up its premium income and attending to genuine claims requests with utmost concern. He hinted further that the company was strongly pursuing its recapitalization in line with the order of the National Insurance Commission, noting that Anchor Insurance was recapitalizing without any merger plan to retain its brand identity. “As for the recapitalization ordered by our regulator, our Board of Directors does not want anything that will alter the company’s identity. It is, therefore, our resolve to recapitalize alone as Anchor Insurance Company Limited. We do not have plans for now to acquire any company that might not be meeting up @Businessdayng

with the recapitalization requirements but we can buy over their policy portfolios where the need arises,” he explained. Highlighting the Company’s performances in 2019, the Managing Director disclosed that Anchor Insurance recorded N4.2bn premium income as against N3.4bn in 2018, achieved a profit after tax of N220.2m from its 2018 N163.8m feat and paid claims totalling N929.6m compared to N816.9m administered in the corresponding period of 2018. He noted that “the selling point of the company are its stable ability and deliberate policy of responding to genuine claims request speedily, continually meeting global best practices, religiously adopting good corporate governance in all its dealings and ensuring adequate return on investments to shareholders.”

Wednesday 19 August 2020

BUSINESS DAY

BANKING

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

Bank agents offering account opening services drop by 70% Stories by HOPE MOSES-ASHIKE

he percentage of agents who offer account opening services has decreased by about 70% since 2015 according to Financial services Agents Survey 2020 report by Enhancing Financial Innovation & Access (EFInA). Agent banking is the provision of financial services to customers by a third party (agent) on behalf of a licensed deposit taking financial institution and/or mobile money operator (principal). This speaks to gaps in product development and financial inclusion efforts. Financial Service Providers (FSPs) are encouraged to offer more incentives to agents to drive account opening and push financial inclusion from commercially viable business models. Account opening/ registration dropped by 19 in 2020 from 51 percent in 2017

Source: EFInA

and 68 percent in 2017, the report stated. Over the same period, the percentage of agents who offer Cash-In-Out (CICO) transactions has increased significantly. Consequently, cash-out (cash withdrawal) rose from 57 percent in 2015 and 74 percent in 2017 to 95 percent in 2020. Account opening, institutional registration, bill payments and balance enquiry top the list of sought-after transactions by customers

although not commonly offered by agents. Agents choose principals based on some critical business model considerations, including remuneration, platform reliability, bestowed trust and level of convenience attributed to access. Agents surveyed by EFInA are signed up by different principals/service providers. Nevertheless, First Bank (First Monie), OPay, QuickTeller, and MTN top the list of principals with a majority share of

agents. Agents mostly operate from business centres and kiosks. Point-of-Sales (POS) and Smartphones are the most used delivery channels for running the business. Opportunity to make additional income is the major motivation for becoming an agent. Others are anticipated marketing activities from principals, increased footfall for pre-existing business and customer request. Banking agents increased by 220 percent from 83,560 in

December 2018 to 267,627 as at 29 February 2020, according to Shared Agent Network Expansion Facility (SANEF) as published by the Central Bank. Investigation shows that number of agents is more than the stated figure as more agents are opening up across the streets with no umbrella body to monitor their activities. The rising number of banking agents springing up across every street corner is seen as a good development for the economy but moni-

toring and regulating them becomes a challenge, stakeholders said on Monday. Olusegun Akintunde, financial market analyst at Polaris Bank Limited, said “it’s through that the banking agents are on the increase because banks have realised that is the only way to bank the un banked. However, he said they belong to a body called SANEF. They are also registered by banks and thus regulated by CBN through banks. Liquidity management has continued to be a huge problem for agents. The report shows that 6 out of 10 agents run out of cash usually weekly. FSPs should explore partnerships that will support agents’ liquidity management, EFInA recommended. “There is need for better alignment in support provided by principals, as the study result shows a mismatch between what is needed and what is provided,” the report said.

Ecobank Nigeria enhances customer Access Bank DiamondXtra savings initiatives produce over 9,000 winners experience with business Banking App

eading retail bank in Nigeria, Access bank Plc, has rewarded over 9,000 lucky customers in the DiamondXtra campaign tagged XtraWins; a seasonal offer leveraging the ongoing DiamondXtra campaign to reward customers for saving and transacting on its digital channels. The XtraWins initiative, was borne out of the need to encourage customers to remain safe as they carry out their transactions in these times. The initiative is also aimed at rewarding loyal customers for choosing digital channels, giving them the opportunity to win cash prizes for performing transactions daily using the Access Bank USSD code *901# or the AccessMore App. Adaeze Umeh, head, consumer banking, Access Bank Plc, explained that the Xtrawins initiative was born out of the need to transform the lives of the bank’s customers who have been transacting with the bank’s digital platforms especially with nationwide restricted movement in response to the Covid pandemic. “In our own little way of showing appreciation to our

customers for their patronage and better returns on their savings, we launched the XtraWins campaign to ensure our loyal customers are rewarded. We have rewarded more than 100 customers every day and over 1,000 every week with various cash prizes since the beginning of the campaign which started about 10 weeks ago. Lucky customers can win from N500 – N1million when they maintain a minimum of N1,000 in their accounts and conduct at least 5 transactions daily using our USSD code *901# or the Access More app to purchase airtime, pay bills, make transfers and so on. The beauty about the Xtrawins campaign is that customers can win repeatedly as long as they keep transacting with our digital channels and carry out the number

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of transactions required to qualify for the daily draws. Adaeze concluded.” Some of the XtraWins lucky winners took to their social media platforms to express their excitement and gratitude towards the Bank. Ube James, @UbeJames N100,000 XtraWin winner tweeted: @accessbank_more can’t thank your guys enough for the opportunity of being one of the winners. Had to invest the money so as to always remember such feat. I’m so greatful. #Xtrawins. Another winner Hamstylez , @Hamstylez1 also tweeted : #Xtrwins ..I got rewarded and it seems lika a dream… To join the winning train, simply conduct at least 5 transactions daily using the Access bank USSD code *901#, or the Access More app or to purchase airtime, pay bills and carry out NIP transfers

cobank Nigeria has launched an Application for Businesses. Known as Omni Lite App, it is targeted at enhancing the banking experience of its large pool of Commercial Banking customers. The Ecobank Omni Lite App is a highly secure, world-class and integrated electronic banking platform designed to help Clients manage their Business accounts online in a secure, flexible, efficient and convenient manner. It is a fully integrated multi-geography, multi-lingual and multicurrency online, web-based cash management platform. The App is being launched by the Ecobank Group across 33 countries in Africa where the Bank operates. Speaking in Lagos, Carol Oyedeji, executive director, commercial banking, Ecobank Nigeria, said the new App is in line with Ecobank’s policy direction to meet and surpass customers’ expectations, noting that it will bring flexibility, safer and convenient banking to the users. She disclosed that it is available

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to existing Omni Lite users, urging them to download it from the Apple Store (IOS) or the Play Store (Android). “With the new Omni Lite App, users can view their accounts and transactions in one place, make payments and pay bills with ease, set up multiple users with different access launch, make and manage loan payment, book time deposits and view exchange rates. This electronic portal also allows customers manage all their online business, banking transactions and information 24/7. With easier navigation and experience that is perfectly suited to smartphones, clients can enjoy features similar to the desktop version.” She stated. @Businessdayng

The Ecobank Omni Lite App enables faster processing of instructions with loading option or file import for mass payments. It also features a customizable environment with choice of language, time zone and comprehensive user-friendly navigation menu. It’s stateof-the-art architecture meets international safety standards and it is designed to enhance productivity and manage cash flow. These largely enhance the cash management capabilities of Businesses which include account services, payments, collections, liquidity management, detailed and customisable reports, amongst others.

Wednesday 19 August 2020

BUSINESS DAY

FINANCIAL INCLUSION

& INNOVATION

Why Nigeria is among seven biggest unbanked nations Stories by Endurance Okafor

ccess to basic financial services is widely considered a critical building block in reducing poverty and promoting economic growth. The importance of financial inclusion especially for a developing economy like Nigeria is made clearer by the fact that it is considered an enabler for seven of the 17 United Nations’ Sustainable Development Goals. Nigeria’s financial exclusion rate of almost 40 percent, one of the highest in Africa mirrors the country’s poor economic growth. In the last five years the economy of Africa’s most populous country has been growing at a pace lower than its population growth rate. In need of an economic catalyst to lift more than 90 million of its population from poverty, Nigeria was listed among the globe’s top seven unbanked nations by a July report by BNP Paribas, a French international banking group with the title: ‘Fintech in Emerging Markets’. According to Ayo Akinwumi, Head of Research FSDH, Merchant Bank, financial inclusion can ease Nigeria’s poverty rate because “when people and small businesses are financially included they can have access to credit which will enable them to

expand operations, employ more people, and achieve what they would have not been able to achieve before when they were not financially included.” For emerging markets, BNP Paribas said the path to progress and prosperity is made more difficult by considerable structural challenges. “These challenges, such as entrenched economic interests, weak institutional checks and balances and overall lack of physical infrastructure, create barriers to inclusive growth and sustain-

able development,” it said. With an ambitious target to include 80 percent of its adult population into the formal financial system by 2020, Nigeria is ranked alongside Pakistan and five other countries as the biggest unbanked nations due to these following reasons: Poor population With more than 83 million extremely poor population, higher than India’s 73 million, Nigeria’s low per capita income level means that many adults in Africa’s largest economy cannot afford to

own a bank account. Exacerbated by the impact of COVID-19, the weak purchasing power of many Nigerian adult is one of the reasons for the country’s low financial inclusion rate. “People will remain financially excluded because they are financially disempowered,” Yele Okeremi, MD/CEO of PFS said, adding that Nigeria still has “large population living below two dollars a day, and so how are they supposed to be included them?” Overly conservative policy While industry analysts ex-

pected that models like Kenyan’s M-PESA would spread like wildfire throughout other nations like Nigeria with similarly low levels of banking system reach and high mobile phone penetration, it has not. As at the time Nigeria was considering the optimal approach needed to leverage new, innovative technology to deliver financial services to its people, the Central Bank analysed in some detail how to structure the guidelines and the regulatory environment to deliver the benefits on offer, without compromising the integrity of the financial system. Africa’s largest economy needed to see how the regulation of mobile money could evolve owning to significant volumes of currency that could be circulating in mobile wallets, and may not be visible to the regulatory authorities. As such it was clear that a better balance between the market and the regulatory structures was required. “In Nigeria, mobile money has been available and growing, but has not scaled as rapidly as M-PESA, which now spans seven countries. Perhaps this is due to overly conservative policy,” BNP Paribas said, adding that “it will be fascinating to see how this develops for this key market in Africa, particularly as it stood among the globe’s top seven unbanked nations as of the latest Findex.”

In furtherance of its mandate to promote a sound financial system in Nigeria and the need to enhance access to financial services for the unbanked rural segments of the society, the CBN on October 2018 proposed Payment Service Banks (PSB). But after almost two years, the fate of the scheme has remained unclear as the apex bank is yet to give any licence to the applicants. Distance to access points A survey by BusinessDay shows that financial exclusion rate is highest in the rural part of Nigeria due to lack of access to a physical point of financial service. To access a basic financial service, some Nigerians, especially those in the rural communities travel for hours to access a service point at the nearest town. Even though there has been growth in agent network targeted at providing financial service to the last mile, the high cost of transaction remains a barrier for many who still prefer to walk a long distance to access the nearest ATM. “Mobile money could be the enabler,” Rafiq Raji, chief economist at Macroafricaintel said. According to Ayodeji Ebo, MD, Afrinvest Securities limited, there is still a wide communication gap between telecos and the banks “which can only be addressed by the CBN.”

Stakeholders expect ATMs to serve as bank branches as lenders step up digitization

utomate d Tell er Ma c h i n e ( AT M ) must evolve amid rapid changes in the economy and rise of digital payment alternatives to meet the evolving needs of current and future customers, according to stakeholders form Nigeria’s financial industry. Recognizing that ATM will continue to play a complementary role in the banking and payments channel mix in Nigeria integrated to and

supporting both the physical channels and virtual channels, the industry players said there is need to roll out additional ATMs to meet the current shortfall and build capacity for the large unbanked population being onboarded via the numerous financial inclusions initiatives. The industry players made this known at a recent virtual conference organized by Fintech1000+ in its webinar series with the theme: ‘What

Future for ATMs in NigeriaDeath Resurgence.’ According to Tope Dare, Executive Director, Infrastructure Business at Inlaks banks in Nigeria are investing heavily on ATM not just for it to be used for cash withdrawals but deposits. “There is a bank that’s using that to drive their business in the north,” Dare said, adding that “what we also see is transitions to cashless transactions where the ATM

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will become the point of customer engagement for digital product and service the banks can deliver.” Bob Nwojo, the Group Head, Acceptance Business at First Bank is optimistic that in the nearest future, more bank customers will start using non-card ways of doing a transaction at the ATM; “they will be using USSD, and QR code to make transactions at ATMs.” Meanwhile, CBN’s 2012

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and 2018 CBN Financial Inclusion Strategy Documents set 93,000 ATM target for the year 2020. However, the 24% achievement (over 70,000 shortfalls) confirms the urgent need for closer collaboration between CBN and related stakeholders for a detailed review and timely execution of related policies for the resurgence of the channel. “Yes, we need more ATM because the ones we have is

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not enough and yes, we can make the ones we already have to be more efficient, “Akeem Lawal, Divisional Chief Executive Officer at Interswitch Group said. But to set up an ATM that won’t record failed transactions Lawal said: “It means you will have to put power in place, get clean currency notes, manage logistics and this is only possible with the right investment to solve the problems.”

Wednesday 19 August 2020

BUSINESS DAY

AGRIBUSINESS

In association with

ag@businessdayonline.com

$13.7bn spices market opens opportunity for Nigerian growers Josephine Okojie

igerian ginger, turmeric, and garlic growers can tap into the $13.7billion global spices and seasoning ma rke t to e a r n f o re ig n exchange to create wealth a s t h e c ou nt r y e x p l o re opportunities to grow its non-oil export. Ginger, turmeric, and garlic - some of the most widely used spices in modern diets could play a vital role in earning substantial dollars for the country as local and global demand for the crops continues to rise especially amid the COVID-19 pandemic. Since the global outbreak of the pandemic was first reported in Wuhan, China in December 2019, lots of people globally are now consuming spices and herbs as part of their daily diets in a bid to boost their immunity against the virus. They serve as by-products t o n u m e ro u s f o o d a n d beverage industries. Experts say that turmeric and ginger suppress various

inflammatory molecules that are responsible for the causes of harmful viruses owing to its anti-inflammatory component called curcumin. “Globally, people are now consuming more of ginger and other herbs due to the pandemic to boost their immune,” said Florence Edwards, national president, Ginger Growers, Processors &Marketers Association.

“As a result, Nigeria is seeing a surge in demand for its ginger currently since we have the spiciest variety globally,” Edwards said. She noted that crops can be grown in all states of the federation but currently it is farmed in 32 states with Kaduna, Nasarawa, Benue, Niger, Gombe, and Kano, Kastina states growing bulk of the crops.

Establish intervention funds for natural rubber - farmers tell FG MIKE ABANG, Calabar

takeholders in the rubber production subsector in the country have called on the federal government to set aside intervention funds for the development of rubber plantations, processing and manufacturing. The stakeholders who made the call in Calabar, Cross River state recently at a meeting to chart the way forward for the production of the crop says rubber production is a goldmine that can be an export earner for the country. Peter Igbinosun, the n e w l y e l e c t e d nat i o na l president of National Rubber Producers, Processors and Marketers Association of Nigeria (NARPPMAN) said the the intervention fund should attract a single digit interest rate of 3 and 5percent with a monatorium period of four years considering the gestation period of the crop. Igbinosun recommended that the repayment period should spread over 10 to 15 years. He called for the selection of a development bank to handle the processing and disbursement of the intervention fund. As a way of easing the challenges faced by

natural rubber farmers and processors, he advocated the establishment of an agency for bulk purchase of machinery/ equipment, saying it will facilitate the acquisition of tractors, implements, land development machineries and equipment. He added that the rural development policies of government at all levels should be integrated to farm plantations in order to create the necessary infrastructures such as roads, br idges, electricity and water. Igbinosun enumerated that the county will benefit greatly if the rubber subsector which has been long neglected, is well positioned although it is a capital and labour intensive industry. “Rubber, grown in 24 states of Nigeria, including Kaduna, Taraba, Kwara and Adamawa among others has the capacity to create wealth; enhance non-oil sector foreign exchange earnings and can also greatly reduce crime and youth militancy,” he said. “ There are array of other benefits from natural rubber. Planting rubber trees generate carbon pits and fit with the Clean Development Mechanism (CDM) of the Kyoto protocol. A 30 years old rubber plantation mobilizes 200 tons of C/Ha,” he further said. www.businessday.ng

“Rubber is in high demand all over the world, plays a major role as a foreign exchange earner and contributor to the growth of our national economy. Natural rubber is a strategic material as it cannot be replaced in many important applications,” he added. According to him, there are over 50 by-products of rubber cutting across all major sectors of the economy, disclosing, too that it used for manufacturing of consume, hand-gloves, PPE uses in fighting COVID19. He listed some of these to include natural rubber latex products such as adhesives, mattresses, pillows, Seat cushions, car seats, baby feeding bottle teats, condoms, su rg i ca l , d o m e st i c a n d industrial gloves among others. To reduce unemployment, he said the subsector can e mp l oy 6 4 0 , 0 0 0 p e o p l e directly and 160,000 indirectly as service providers, adding t hat t h e y hav e 2 0 0 , 0 0 0 hectares of rubber plantation in Nigeria both small holders and industrial plantations. A l s o s p e a k i n g , Us e n Umoh, general manager of Royal International Farms and Estates limited, said rubber farmers face increasing challenges and would need medium and long term facilities.

Nigeria, Africa’s most p opu l ou s nation is th e fourth largest grower of ginger with national output put at 31,000 metric tons per annum by the Federal Ministry of Agriculture. There are currently no production records for turmeric and garlic in the country. Most herbs and spices can be consumed in different forms which include powder

or fresh. They also used as spices in a wide array of dishes. P o w e re d g i n g e r a n d turmeric are used in the production of flavour and colourants which is utilised in a variety of recipes such as cakes, cookies, bread, crackers, ginger ale, and beer. Their roots are us e d as raw materials in the manufacturing of health products and drinks. Nigeria exports the majority of its ginger which makes the country the third highest exporter of the crop globally. The country exported about N1.9billion worth of ginger in the first three months of the year, according to data from the National Bureau of Statistics (NBS) Trade Report. Despite the potential in the production of these crops, the country is yet to fully harness the economic value of growing them on the account of low use of technology and yield per hectare. Mo s t s p i c e s f a r m e r s are not using tractors and other machines for land preparation. This is hindering o u r a b i l i t y t o i n c re a s e

production because farmers cannot increase their farming areas owing to the huge manual labour involved but with tractors, we can farm on a larger scale,” said Zackari Mohammed, a ginger/ turmeric farmer in Kastina. “We are still using a local knife to split harvested ginger rhizomes and turmeric but in China and India, there is a machine for that. We lack modern processing machines for washing, peeling, splitting, and drying kilns. “Getting quality seeds is also a major issue for us farmers. It is difficult to get quality ginger seeds and most of the seeds in the country are of low quality. These are some of the reasons why we are yet to increase our yield per hectare. He stated that the demand for the country’s spices is increasing yearly but the production to meet up with the huge demand has been stagnant. This shows that there are opportunities for investors who would want to invest in seeds and in the provision of easily fabricated machines in splitting the harvested ginger rhizomes and turmeric.

COVID-19: Three Crowns ‘Jara’ campaign to reward customers Josephine Okojie

hree Crowns, Nigeria’s leading low cholesterol and heart-friendly milk, has announced the start of ‘Jara’ campaign to deliver more value to consumers, especially mums who have done well amid the COVID-19 pandemic. The ‘Jara’ campaign will run simultaneously across all trade channels including the open retail market and neighborhood stores in Lagos, Abuja, Ibadan, Ilorin, Aba, Benin & Enugu respectively till October 2020. To p a r t i c i p at e i n t h e ca mpa ig n , s h o p p e rs a re required to buy products worth N3,000 or N5,000 within a selection of Three Crowns product range including the refill pouch, big family pack refill pouch, and evaporated milk in cans; to win free sachets of milk and lots of gifts. This offer is valid while stocks and gifts last. Explaining the purpose of the campaign, Omolara Banjoko, marketing manager, Three Crowns said that the b ra n d a i m s at e n s u r i n g mothers in particular and other consumers of Three Crowns milk get more value for their purchase – that is the ‘jara’ which means ‘extra.’ “‘Jara’ is our ‘Thank you’ from Three Crowns to all purchasing mums for all they do for their

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families, especially in these uncertain times, which have impacted the spending power of many families to provide adequate nutrition,” Banjoko said. “If a consumer buys N3,000 or N5,000 worth of products within the refill pouch, big family pack refill pouch and evaporated milk in cans range, they would instantly receive gifts and extra milk at no extra cost,” Banjoko said. She further explained, adding that Three Crowns brand ambassadors would be stationed at retail stores to reward shoppers that buy within the specified assortments. As an extension of the campaig n an d to create excitement at these retail outlets, there would be consumer activation on certain days of the week where shoppers can also buy to participate in the ‘Plan a Healthy Breakfast or Smoothie Puzzle Challenge.’ Shoppers who participate in this challenge are required to create a healthy breakfast or smoothie within a time frame to win exciting gifts. Digital savvy Three Crowns fans are also not left out. T h e ‘ Ja r a’ c a m p a i g n includes product puzzles for Three Crowns evaporated and powdered milk, cooking sessions, and an exciting family dance series. Providing more details, @Businessdayng

Chioma Otisi-Igwe, brand manager, Three Crowns, said that each activity would be posted on the brand’s social media stories. “We encourage people to participate with their friends and family members to win exciting prizes which include product freebies and shopping vouchers,” Otisi-Igwe said. During the campaign, there will be an Instagram live cooking session as an opportunity for mums and their families to prepare healthy breakfasts with chefs. Entries will be judged based on creativity and meal presentation and rewarded with shopping vouchers and other exciting gifts. In September, there will be a digital Family Dance Off during which a choreographed dance in traditional attire will be created and posted. Consumers will then be asked to recreate the video showing their mums and family members representing their tribe. Posted and properly tagged videos will be collated and judged to reveal the top five (5) entries; which will be selected and posted on the brand’s page for followers to pick the top three (3) winning families. Entries will be judged according to the synergy and creativity in each dance routine created. Freebies and shopping vouchers are guaranteed.

Wednesday 19 August 2020

BUSINESS DAY

Harvard Business Review

ManagementDigest

A Post-Pandemic Strategy for US Higher Education Vijay Govindarajan and Anup Srivastava

niversities have many pressing short-term issues to deal with right now: large budget cuts, a growing reluctance among students to pay full tuition fees for online education, demands for reimbursement, the possible disappearance of international students who pay full fees, the large-scale deferral of admissions, a sharp spike in the need for financial assistance among students as a result of the pandemic and ensuing recession and, finally, the question of whether and how to reopen. Nevertheless, university leaders should not spend all their time putting out fires and forget about the long term. The current crisis also creates opportunities to remake institutions. THE NEW HIGHER ED AGENDA Three external forces have come together to create a perfect storm for American colleges: The cost of higher education has been skyrocketing. Student debt has reached unacceptable levels, leading to a public outcry. Higher education, which more people will need in an automated world, must become more affordable and accessible. The new generation of digital technologies have matured, so immersive and personalized education can be provided online at scale at a much lower cost than that of conventional education. The current experiment with online instruction has significantly lowered the psychological barriers among parents, students, faculty and university leaders. This article is intended to set the agenda for university leaders, who must choose between three paths. 1. AUGMENTED IMMERSIVE RESIDENTIAL MODEL Online teaching is making the superior value proposition of immersive, four-year residential programs more salient. Students get to live on college campuses, away from their families — perhaps for the first time in their lives — and engage in openended discussions, joint problem-solving, experience-based learning and conflict management in classrooms (and in their dorms). Interactions with other students generate confidence, brand loyalty, camaraderie, lifelong friendships and a unique feeling of community. They develop communication skills, emotional intelligence and networking skills. An intense

residential experience builds a “sense of place,” which richly fosters identity and self-reliance. For all its benefits, the fouryear residential, immersive college experience comes with a high price tag. The superiority of personal, connected and transformative experience of a fouryear residential program should not be used as an argument to make it the only choice available for college education. Topranked universities with all their structural advantages — global brand recognition, access to world class scholars and teachers, prestigious employers and influential alumni — now have the opportunity to explore how their recent experience with online learning can help strengthen their traditional model. These institutions should be asking: How can new digital capabilities make the residential experience even better? How can the residential experience be opened up to more high-achieving students from historically underrepresented minorities and students from low-income families? Can we offer more scholarships? Is it possible to supplement the gold-plated residential learning degree with a hybrid certificate that is more accessible to many more students? What are the different bundles of experiences universities can offer? 2. HYBRID MODEL The current experiment with online teaching is providing universities with real-time data about which aspects of their courses can be substituted, www.businessday.ng

which can be complemented or augmented and which can’t be replaced by the digital medium. They must start determining the varying degrees of face-to-face, real-time virtual, and asynchronous-virtual experiences required for each course. Consider, for instance, physics. The basic concepts can be taught using graphics and the audiovisual techniques of a software program. Students can learn at their own pace, repeat as many times as required, do keyword searches, link concepts and rearrange teaching modules based on the own skill levels. Nevertheless, certain aspects of learning in the sciences need the hands-on experience provided by a lab. Humanities courses such as one on Roman culture and democracy, which benefit from extensive discussion, can be taught through virtual meetings. In contrast, building a robot or learning ballet require the coming together of an instructor and fellow students at a common time. Boards and university presidents should consider the following issues: Which of our offerings can only be manifested in person? Universities now have the data to ascertain the optimal percentage of face-to-face, real-time/ virtual, and asynchronous/virtual components required for each course. That can provide insights into how a degree can be completed in less than four years. The hybrid model will simultaneously preserve the benefits of a residential experience while lowering the cost of education.

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Which proprietary assets are differentiators in the hybrid model? The cornerstone of Northeastern University’s educational model, for instance, is the co-op program where students alternate semesters of academic study with periods of full-time work. Northeastern University can use this experiential learning as a differentiator in its hybrid model. What is the optimal tuition fee? By using a hybrid model, universities can balance a lower tuition per student against higher enrollment. 3. FULLY ONLINE MODEL There is a need for a good quality college education whose annual tuition cost is, say, under $5,000 and the degree is awarded by a reputable public university. Online college degrees are not new, but when reputable universities enter the picture, it will change the landscape. Public universities must debate the following issues: How do we orchestrate an ecosystem to offer low cost and high quality? Universities usually follow a vertical integration model where they do everything in house, from the admission of students to the awarding of degrees. Instead, universities must outsource areas where others possess superior core competencies at scale by orchestrating an ecosystem of partners: content creators such as Outlier.org; technology platforms such as edX; and Silicon Valley edTech startups, especially those whose lineage is in the gaming industry. How do we assemble a consortium of corporations to make @Businessdayng

a low-cost model work? One strategy to consider: If 100 companies invested $10 million to underwriting the annual college education of 2,000 employees each, that’s 200,000 students and an annual revenue of $1 billion. Asynchronous online courses scale at nearly zero marginal cost, so an annual tuition fee of $5,000 might make it economically viable. QUICK CHANGE IS NOT TOTAL CHANGE We do not believe that digital technologies will make the current university system obsolete. Consider retailing: Although Amazon started e-commerce almost 30 years ago, by 2019 online sales accounted for only 9% of total U.S. retail sales. Still, university leaders and faculty have individually responded to the shock of COVID-19 incredibly well, migrating to digital platforms in as little as a week. The coming months are a great opportunity to build on that momentum and transform higher education into something that is customizable and affordable to the vast majority of people. The time to act is now.

Vijay Govindarajan is the Coxe Distinguished Professor at Dartmouth’s Tuck School of Business and Faculty Partner at the Silicon Valley incubator Mach 49. Anup Srivastava holds the Canada Research Chair in Accounting, Decision Making, and Capital Markets and is an Associate Professor at Haskayne School of Business, University of Calgary.

Wednesday 19 August 2020

BUSINESS DAY

MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

WACT set new standards with historic visit of largest containership in Onne amaka Anagor-Ewuzie

istory was made on Saturday at the Onne Port, Rivers State as leading container terminal operator, the West Africa Container Terminal (WACT), received the largest containership ever to berth at any Nigerian port. The huge ship named Maersk Stadelhorn, with length overall of 300metres and beam of 48.2metres, has capacity to carry about 10,000 Twenty-foot Equivalent Units (TEUs) of containers. Before now, the regular containerships calling at Nigerian ports are those in the class of WAFMAX with maximum capacity of 4,500 TEUs. Maersk Stadelhorn successfully berthed at WACT, Onne on Sunday 15th August at 1600hrs and currently situated at berth 8 and overlapping on Berth 9 due to the very large size/frame. “We are excited at this historic achievement. We thanked the Nigerian Ports Authority (NPA) for dredging the channels and for professionally piloting the vessel to the port. Without the effort, support and approval of NPA, this would not have been possible,” Klaus Laursen, Country Manager of APM Terminals Nigeria, said. In addition to the support of NPA, Laursen said, the huge investment by APM Terminals in WACT also made it possible for the terminal to upgrade its services with modern cargo handling equipment to be able to handle very large container carriers. “The feat recorded here at WACT is impressive. The significance of this development is that even the ports in Lagos will now play catch up with the new standards set by WACT. It is also important to mention that this is happening at this critical time when economies of the world are

facing a lot of challenges due to the COVID-19 pandemic. This is a mark of confidence in the Nigerian economy. The COVID-19 challenges are temporary, and the economy will certainly record positive growth in the nearest future,” Laursen said. Aamir Mirza, managing director of WACT, who spoke via telephone, said, “Over the last four years, we have continued on the journey to develop our business by investing in our people and container handling equipment and handling of this vessel is in line with our vision to make WACT the best performing container terminal in West Africa.” Mirza said that the successful handling of the 10,000 TEUs vessel shows the terminal has once again proved to its customers that the terminal is capable of competing with other ports in Nigeria and West Africa. Noah Sheriff, Commercial Manager of WACT, said the terminal has become the gateway to East Nigeria and a strong alternative to ports in Lagos over the years with the multimillion dollars investment made in information technology and modern cargo

handling equipment. “The rapid growth you see at WACT today is partly because of our e-commerce capabilities that allow landside customers to do business with WACT from literally anywhere across Nigeria coupled with our continuous investment approach, which has resulted in such upgrade from our liner customers. We are excited about the significant milestone recorded today in WACT, Onne,” he said. Sheriff further said that it is a positive development for Onne Port and the entire business community because large vessels come with many benefits for authorities, liner customers, and landside customers. “Recall that in December 2019, we handled a containership measuring 265 metres in length overall which at the time was the first gearless vessel and the largest containership to visit a seaport outside the Lagos area. It took us only 2.75 days to turnaround the vessel. Also in January this year, we handled another large gearless containership with a capacity of 3,081 TEU deployed by Pacific International Lines

(PIL). So, we have continued to enhance our capacity, capabilities, and you can see another example today with the berthing of Maersk Stadelhorn,” he said. Continuing, Sheriff said: “Before now, it would be difficult to imagine that such a ship could berth in Nigeria, but here we are with the ship at our berth. We must thank the Nigerian Ports Authority for the dredging of the channel to make it possible for this ship to come in. The NPA Managing Director has indeed been very supportive.” Recall that in 2019, WACT invested $14 million in the acquisition of sophisticated modern cargo handling equipment including two Mobile Harbour Cranes, 14 Specialised Terminal Trucks and two Reach Stackers. In 2020, the company announced a further investment in its Phase Two upgrade. The Phase Two upgrade includes the acquisition of three additional Mobile Harbour Cranes, bringing the total in operation to five; 20 Rubber Tyre Gantry Cranes; three Reach Stackers; 13 terminal trucks and trailers and an empty container handler.

Noah Sheriff (r), commercial manager of West Africa Container Terminal (WACT), presenting a plaque to Pranay Sharma, master of Maersk Stadelhorn, the largest containership ever to berth at a Nigerian port, at WACT terminal, Onne Port, Rivers State.

Nigeria Customs intercepts smuggled vehicles, rice with N10bn Duty Paid Value

he Federal Operations Unit (FOU), Zone A of the Nigeria Customs Service (NCS) said it has intercepted smuggled items with Duty Paid Value (DPV) of N10 billion. According to a statement signed by Peter Duniya, Public Relations Officer of the unit, which was made available to newsmen at the weekend, the acting Customs Area Controller, Usman Yahaya said the seizure were

made at Ido-Eruwa road in one day. He said the contraband comprised of 34 fairly used and new vehicles laden with second hand clothes, Indian hemp and foreign parboiled rice. “We are showcasing a large scale of smuggled vehicles laden with different kinds of contraband goods. Some economic saboteurs met their waterloo when our operatives acted based on credible information and www.businessday.ng

made a single seizure at Ido, Eruwa Road-Ibadan of Oyo State,” he said. According to him, there was stiff resistance from the smugglers, who resisted arrest, but Customs’ operatives displayed high level of professionalism and restraint to secure the contraband to Customs’ warehouse in Lagos. He how ever warne d smugglers to desist from engaging in activities that could sabotage government policies of making Nigeria self-

sufficient in food production. “While we appreciate the support and the cooperation of patriotic members of the public in carrying out our mandate by providing timely and useful information, however, recalcitrant economic saboteurs should note that, they would continue to count their losses because Customs is better mobilised, organised and backed by the extant laws to be always ahead of them,” he said.

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We’ve paid N880.6m to FG as rent for Tarkwa Bay land in last two years - LADOL amaka Anagor-Ewuzie

h e L A D O L F re e Trade Zone said it has been compliant with the landlord-tenant agreement with the Federal Government through the Nigerian Ports Authority (NPA), and has paid a total of N880.6 million in the last two years as full rent. LADOL, which had been fully operational for eight years now, is one of the few wholly privately developed NPA’s terminals and a beacon that attracts private sector investment. Oladipo Jadesimi, chairman of LADOL, who disclosed this in a statement, said this was contrary to claims that the Federal Government is not getting full value from its land at Tarkwa Bay, where LADOL Free Zone is situated. Jadesimi said the alleged lease of part of LADOL’s land to Samsung Heavy Industries Nigeria Limited, which was recently terminated, would have halved FG’s income from the LADOL area to N230.3 million – the amount said to have been charged Samsung. According to him, the Vice-President Yemi Osinbajo not only highlighted the role of LADOL in economic development on 10th August 2018, when he toured LADOL Free Zone, but also commended stakeholders in LADOL for continued private investment and local content drive. Speaking during the Vice President’s visit, Hadiza Bala Usman, managing director of NPA, said that the successful berthing of Egina FPSO was as a result of operational efficiency and very robust synergy between the NPA, LADOL and other stakeholders. While the Managing Director of Shell confirmed that his company had gained 40 percent cost savings from working with LADOL, saving Nigeria hundreds of millions of dollars, and helping to make Shell’s investments in Nigeria internationally competitive. On the controversial FPSO integration yard, Jadesimi said that LADOL, which has invested hundreds of millions building the Zone for 19 year, needs government’s protection after putting USD$40.5 million as part payment for the construction of the Total’s Egina FPSO integration yard in LADOL. “Samsung has not invested in the yard, a view the Federal Government of @Businessdayng

Oladipo Jadesimi

Nigeria (FGN) strongly holds and has expressed. Therefore, attempt to allocate the land on which the shipyard stands is tantamount to a gift to Samsung of a strategic asset belonging to the Nigeria, being a legacy of the multi-billion dollars national investment made into the Egina field development,” Jadesimi said. He explained that “Total contract awarded to Samsung was about USD3.2 billion for engineering, procurement, and construction of the Egina FPSO. Samsung was given the sum of USD214 million for the construction of the Yard, which is in addition to the USD40.5 million from LADOL. Jadesimi however stated that Nigerian government is supposed to reimburse Total’s payments to Samsung, making government the primary investor in the yard. “Investors in the yard are LADOL, its stakeholders and the Nigerian government. Samsung was a contractor and a tenant of LADOL, not an investor in the yard. The yard itself is an important local content legacy development and key benefit left in Nigeria from the Egina project. He described the initial sublease agreement between LADOL and Samsung, which was approved by NPA in a letter dated 12th March 2014, as ‘willing seller willing buyer’ relationship entered into as local content plan for the Egina project. “Though, LADOL was entitled to collect the contracted income from that sublease – they did not, instead allowing Samsung to hold back 90 percent of the rent due, USD40.5 million for construction of the yard. Leaving LADOL with USD4.5 million for five years, amounting to USD900,000 per year,” Jadesimi said. He noted that NPA has been a fair and just landlord that protects the rights and investments of its tenant, LADOL, adding that NPA has also played a significant role in leveling the playing field in the maritime, industrial and petroleum sectors – ensuring that all Nigerian companies can participate.

Wednesday 19 August 2020

BUSINESS DAY

TRANSPORTation Motoring

RailBusiness

ModernTravel

Roads

$1.6bn Lagos-Ibadan SGR takes-off as train stations await completion … transportation minister issues 21 days ultimatum

MIKE OCHONMA Transport Editor

here are very strong indications that, unless the Chinese Civil Engineering & Construction Corporation (CCECC) takes the order issued by Rotimi Amaechi, Nigeria’s minister of transportation to speed up construction work on the train stations located on the ongoing Lagos-Ibadan standard gauge rail corridor seriously and implement same in the coming weeks,, the planned commencement of passenger train services may face some some hurdles. During the weekend’s project inspection tour by Amaechi and Lai Mohammed, minister of information, beginning from thw Ebute Metta mega station to the yetto-be-started strategic train station inside the Apapa port, other major and minor stations along the 156.5 kilometer Lagos-Ibadan standard gauge rail corridor that are at various stages of completion are located at Ebute Metta Junction (EBJ), Agege, Agbado, Kajola,

Picture shows the new train that will start passenger service on the Lagos-Ibadan standard gauge rail track. Inset is a picture of one of the many yet-to-be-completed train stations located along the corridor

Papalanto, Abeokuta, Olodo, Omi-Adio and Ibadan. In total, there are 10 trains; four in Lagos, three in Ogun and four in Oyo states respectively. Out of this numbers, there are three mega stations; one at EBJ in Lagos, one in Kajola in Ogun state which houses the proposed wagons and coaches assembly plant

and another one near Ibadan, where the planned dry port will be located. With only rubbles of demolished structures seen at the strategic proposed train station inside Apapa port complex, completed physical structures for the three major stations and other seven smaller stations in Lagos,

Ogun and Oyo states are without fittings yet. There will also installation of electrical, signallying and other equipments when these stations are completed. The minister of Transport Rotimi Ameachi said the commissioning of the Lagos Ibadan Railway will likely take place in January 2021. While express-

ing dissatisfaction on the level of work done in some of the stations, Amaechi gave Xia Lijun; the project Coordinator CCECC, 21 days timeline to ensure completion of the stations. Meanwhile the contractors blamed the slow progress on Covid-19 pandemic. “You need to speed up the conclusion of these stations. Covid has come to stay, and government has to run. We have to deliver our promises to the people because that’s why we are elected we can’t wait for Covid to end because we don’t know when it will end. Let’s be hopefully that by January this project will be ready”. The transportation minister insisted. Fielding questions from newsmen, Fidet Okhiria, managing director of Nigeria Railway Cooperation (NRC), disclosed that operations will resume at Yaba to Ibadan by mid September, while construction progresses in other stations. According to him, there will be 16 passenger round trips daily with the 24 new coaches and a set of Diesel Multiple Units (DMUs) with 8 coaches attached to each set already on ground.

Nigeria reaps from Hyundai MEA’s $2.4m Covid-19 largesse … Stallion group corporately, socially responsible – LASG

yundai Motor Company is donating sets of medical equipment and personal protection items worth over $2.4 million to countries across the Middle East and Africa (MEA) in an effort to help tackle the coronavirus (COVID-19) pandemic. Nigeria is one of the 37 countries across the MEA region that will benefit from the largesse with Hyundai contributing 27,000 numbers of items worth N35million to assist front-line medical workers and the public during these unprecedented coronavirus devastating disruption. The contribution to assist the federal government includes 25,000 face masks and 2,000 protective suits to help combat the ravaging coronavirus scourge. Presentation was made to the Lagos state government recently towards its Covid-19 relief program at an event presided over by Solape Hammound, head, sustainable development goals (SDGs) and investments and also the special adviser to the governor. At the event Anant Badjatya, chief executive officer, Stallion group stated that, the contribution is part of Hyundai’s commitment to support those in need in the region.

L-R: Solape Harmond, head, sustaianable development goals (SDGs) and investment/special assistant to the Lagos state governor during a formal presentatIon of COVID-19 gifts from Anant Badjatya, chief executive officer, Stallion group, at the governor’s office Alausa, Ikeja. recently.

The protective gears will be distributed to all the hospitals involved and supporting the Covid-19 fight in Lagos state. The CEO added that the situation in Nigeria could have been very different if not for the speed and timeliness adopted by the state government and sincerely thanked governor BabaJide Sanwo Olu for his vision and the able team for efficiently handling and tacking the situation headlong. Responding, Solape Harwww.businessday.ng

mond who runs the office of the Sustainable Development Goals (SGDs) and Investment and a special adviser to the Lagos state governor described the Hyundai Motors Corporation donation as represented by the Stallion group in the country towards the Covid-19 fight in the state as a magnanimous, civic responsibility gesture. She said, the government of Babajide Sanwo-Olu appreciates the effort of Stallion group as a special partner towards the

development of the state. According to her, ‘’Stallion group has always been corporately and socially responsible. They pay their taxes and invest in the state. She also mentioned that it was heartening to see positive stories of altruism by corporates and individuals bringing back hope, reassurance and confidence that we shall overcome this situation and emerge stronger. On his part, Gaurav Vash-

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isht; Hyundai brand manager of Stallion group said that, in recent weeks, Hyundai has helped those in need around the world through donations and contributions of medical equipment and personal protection items. For Bang Sun Jeong, vice president, head, Hyundai Motor Company Middle East and Africa headquarters; “Caring for humanity has always been at the heart of Hyundai’s vision and having assisted those in need in countries around the world, we are proud to expand our support to countries across the MEA region that have been hardest hit by the pandemic. Sun Jeong declared that, the contributions of personal protection items are another step forward of making positive difference and believed that, with team work, the coronavirus scourge will be overcome. ‘’We sincerely hope our efforts will contribute towards making a difference in this fight. We are committed to supporting communities in the region, and hope this helps in ensuring the safety and well-being of people. If we stay together, we can overcome anything. We hope this pandemic can soon come to an end and we can help people get back to their daily lives”. He noted. @Businessdayng

FRSC Zone 4 command mobile courts convict 131 driv

otorists have been advised to be safety conscious as the last quarter of 2020 otherwise referred to as ‘ember months’ approaches. Kayode Olagunju, assistant corp marshal and zonal commanding officer (ZCO) of Federal Roads Safety Corps (FRSC) in charge of Plateau, Benue and Nasarawa States warned motorist to be conscious of the fact that there will be increased mobility during the period which could also result to high incidence of road traffic crashes (RTC). This call came on the heels of four mobile court sit-

tings conducted in Plateau, Benue and Nasarawa States convicting 131 traffic offenders for varying violations. A mobile court presided by Isa Zalla sitting in Pankshin last month convicted 30 offenders arraigned. In Benue, IF Ajim sitting in Makurdi also on August 14, 2020 convicted 71 traffic offenders out of 73 arraigned, while in Nasarawa Gwahimba Vincent convicted 30 out of 35 offenders arraigned on the same date. The convicted drivers were jailed for two months with option of fines ranging between N2,000 and N10,000 in line with the FRSC Establishment act,2007 and the National Tratfic Rgulations,2012. The most prevalent offences were overloading, seat belt, tyre violations and mechanicaly defective vehicles. Terry Hoomlong, deputy route commander and acting zonal public education officer., said the ZCO assured the command will continue the prosecution of erring drivers especially those with critical offences such as overloading, dangerous driving, speed limit violations, tyre violations, route violations, use of phone while driving, driving under influence, mechanically deficient vehicle and failure to fix speed limiting devices. He said that, the zone is putting in place measures to address traffic situations in the coming ember months, adding that road safety is a collective responsibility and that therefore, the motoring public must also take responsibility to ensure they obey traffic rules and be disciplined for a safe and successful ember month.

Wednesday 19 August 2020

BUSINESS DAY

feature

How executive order five enables NAF, Tranos potential partnership Two years ago, President Muhammadu Buhari signed into law an executive order that enables the promotion of Nigerian content for science, engineering and technology components in public procurement. Stephen Onyekwelu shows how the Nigerian Air Force and Tranos, an indigenous engineering and manufacturing company are taking advantage of this legal framework.

delegation from the Nigerian Air Force has visited the headquarters of Tranos, an indigenous engineering and manufacturing company in Ikeja, Lagos to explore the possibilities of a partnership, leveraging on executive order five. Executive order five became law in February 2018 and was designed to improve Nigerian content in public procurement with science, engineering and technology components. Nigerian engineers have repeatedly said that engineering and manufacturing are synonymous with the development of nations. Sustainably developed countries invest heavily in their engineering and manufacturing sectors. So, the executive order five forms part of the Federal Government’s efforts to promote the application of science, technology and innovation within Nigeria. It is a step towards achieving Africa’s most populous country’s developmental goal of improving all sectors of the economy. Desirous to build on the provisions of this executive order, the Nigerian Air Force led a high-level delegation to Tranos. At the head of the delegation A. Olabisi, an Air Vice Marshall sought to explore how both organisations can work together to design and manufacture equipment that will be most useful to the Force. This is based on the technological and innovative track record of Tranos in the last few years as well in terms of reliable standards and capacity. The selection of Tranos for this visit and partnership is connected to Chief of Air Staff of the Nigerian Air Force’s belief that the indigenous company has the capacity, offers premium service as well as research and development. This builds Nigerian capacity and reduces the reliance of the Air Force on foreign original equipment manufacturers (OEMs). “Partnership is a huge component of what we do at the Nigerian Air Force and the NAF leadership is looking at ways of sourcing some of the inputs of its operations locally,” said Olabisi who is also the commandant of

Air Vice Marshal A. Olabisi and Jude Abalaka

Air Force Institute of Technology. Tranos offers a broad range of engineering and technology products such as enclosures, cable management systems, racks and storage systems, LV & MV electrical control panels and switchgear. Others are special generators for specialised applications; electrical and mechanical process skids and housings, switches and sockets. Tranos also offers fabrication, installation and maintenance services for the most critical projects requiring precision and professional finishing. “For us as a company, we like partnerships because that is how you grow and we think that this is a very good partnership to have and from what we have seen, we noticed that the Air Force values technology,” Jude Abalaka, managing director at Tranos said. Abalaka explained that Tranos is a technology company which has engineering and manufacturing capabilities and focuses on delivering innovative solutions. Based on NAF’s interest in partnering with Tranos, the company will look out for challenges that the Nigerian Air Force is facing and seek to develop solutions in the mechanical and electrical www.businessday.ng

Hawa Ajisafe, clients relations manager taking the Nigerian Air Force team on a tour of Tranos facility

areas. The delegation inspected Tranos’ facilities; from the engineering design to the cutting, welding, powder coating and assembly sections and noted the highly trained staff and the semi-automated facility which ensures consistency in the finished product. Ibikunle Daramola, an air commodore and director of public relations and information at the Nigerian Air Force said that “the visit was at the instance

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of Air Marshal Sadiq Abubakar, the Chief of Air Staff,” and that the Nigerian Air Force is looking inwards to develop partnerships that will produce cost-effective local solutions that paves a way for realising self-sufficiency both for the Nigerian Air Force and the Nigerian nation. It is worth noting that engineering education in Nigeria faces many obstacles. Some engineering graduates have acquired skills in the use of computeraided design (CAD) software by @Businessdayng

watching YouTube videos and joining online communities. If those engineers had adequate opportunities to learn under experienced instructors and had industry experience in companies such as Tranos, the situation would be different. But engineering and manufacturing companies, in turn, need an enabling environment and the support of government to keep their doors open, according to a paper Tranos presented to the Nigerian Society of Engineers, recently. South Korea is a good example of how engineering leads to sustainable national development. Over the past four decades, South Korea has demonstrated incredible economic growth and global integration to become a high-tech industrialised economy. A major factor for this growth was how fast the South Korean government embraced technology and engineering. Engineering and technology can not only help countries to climb up the value chain but also presents a chance to push back some of the environmental limits with new technologies for radically increased resource productivity people familiar with the matter have said. All countries have a part to play, whether it is in adopting, adapting or developing such technologies. It is in light that the partnership between the Nigerian Air Force and Tranos manifests a thrust forward that offers opportunities to build local capacity and gradually nudge Nigeria towards becoming self-sufficient in terms of engineering and construction. This also advances R&D and the emergence of hightech companies. The Nigerian Airforce team was led by the Commandant, Air Force Institute of Technology, Air Vice Marshal A. Olabisi. Some of the officers in the NAF delegation were; Air Vice Marshal RN Ekeh, chief of Standards and Evaluation, HQ NAF; Air Vice Marshal MO Olatunji, chief of Aircraft Engineering, HQ NAF; Air Vice Marshal MA Yakubu, chief of Logistics, HQ NAF; Air Vice Marshal PO Jemitola, director Research and Development, and Group Captain OC Ubadike, dean School of Aircraft Engineering, AFIT.

Wednesday 19 August 2020

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Tuesday 18 August 2020

Top Gainers/Losers as at Tuesday 18 August 2020 2020 LOSERS

GAINERS Company

Opening

Closing

Change

DANGSUGAR

N12.3

N12.6

0.3

FLOURMILL

N18.3

N18.5

0.2

UBA

N6.5

N6.65

0.15

UPL

N1.11

N1.22

0.11

OANDO

GUINNESS

N15.4

N15.5

0.1

FIDSON

Company

Opening

Closing

Change

CONOIL

N16.9

N15.25

-1.65

ARDOVA

N13.95

N12.6

-1.35

N36

N35

-1

N2.48

N2.24

-0.24

N3.79

-0.21

ASI (Points)

25,136.49

DEALS (Numbers) VOLUME (Numbers)

3,693.00 271,001,986.00

VALUE (N billion) MARKET CAP (N Trn)

2.460 13.112

Nigeria’s stock market gains N2bn as investors buy attractive counters Stories by Iheanyi Nwachukwu

he stock market of Africa’s largest economy stopped record loss trend on Tuesday August 18 as investors moved in to buy attractive counters. A good number of fundamentally sound stocks are currently trading at lower bands, making analysts expect investors to see value in them despite the high volatility in the market amidst global uncertainties. This month, the market has increased by 1.79 percent. At the close of trading session, the market’s negative return year-to-date (YtD) decreased to -6.35 percent. The Nigerian Stock Exchange (NSE) All Share Index (ASI) increased by 0.02 percent to 25,136.49 points from preceding day low of 25,132.67 points.

L-R: Frank Aul, head, Finance and Accounts Securities and Lamido Yuguda, Exchange Commission director general, SEC and Ibrahim Boyi, executive commissioner corporate services, SEC during a 5 day Interactive Session on the 2021-2023 Medium Term Expenditure Frame work and Fiscal Strategy Paper at the National Assembly.

The market’s positive close was driven by stocks like Dangote Sugar Refinery Plc which moved up most from N12.3 to N12.6, after adding 30kobo, up 2.44percent. Flour Mill also increased from N18.3 to N18.5 add-

ing 20kobo or 1.09percent; while UBA followed by increasing from day open low of N6.5 to N6.65, up by 15kobo. The value of listed stocks rose by N2billion to N13.112trillion from a low of N13.110trillion recorded

the preceding trading day. In 3,693 deals, investors exchanged 271,001,986 units valued at N2.460billion. Zenith Bank, GTBank, Lasaco, Access Bank and Transcorp were actively traded stocks on Tuesday.

Securities dealers identify how Commodities Exchanges can boost forex earnings

op Securities Dealers in Nigeria have urged the Federal Government to expand agriculture to create job opportunities for youths and leverage commodities exchanges to grow the country’s foreign exchange earnings in view of dwindling income from the international oil market. Besides, the Securities Dealers have identified the need to put in place relevant structures that will enhance the growth of local industries, highlighting the benefits of commodities exchanges. The Chairman, Association of Securities Dealing Houses of Nigeria (ASHON), Onyenwechukwu Ezeagu, at the weekend explained that the negative impacts of COVID-19 pandemic on most sectors of

the economy had made it imperative for the government to enhance the growth and development of commodities exchanges as alternative sources of revenue. “ The need to encourage the establishment and growth of Commodities Exchanges in Nigeria cannot be overemphasized in the wake of the crippling impact of oil glut and the COVID-19 pandemic. If Nigeria is serious about diversification of her economy and forex earnings, the route to take is via functional commodities exchanges where all asset classes: agricultural, hydrocarbon and solid minerals etc are tradable in a most efficient and transparent manner and the quality of tradable commodities are guaranteed. This is even more so for local www.businessday.ng

induatries that need to be assured of regular and uninterrupted raw materials supply as their production input. The farmers, miners etc would benefit from an efficient commodities exchange platform as they have opportunity for prices discovery and an assurance of off takers of their output. “ The economy would be better off as economic activities are catalysed and sustained. Consequently, any serious minded government cannot but be conscious of the importance of viable commodities exchanges and use them as catalysts for economic development and sustainance. This informed part of the reason why ASHON and other progressive minded Nigerians floated the Lagos Commodities and Futures Exchange so

that through its establishment, we can assist the government of the day in not only doing all the above, but also in helping to create employment for our teeming youths in this country.”, said Ezeagu. Corroborating him, the Managing Director and Chief Executive Officer, Lagos Commodities and Futures Exchange, (LCFE), Akin Akeredolu – Ale who volunteered information that LCFE would soon commence trading on Agricultural Commodities, Solid Minerals, Currencies and Oil and Gas submitted that at this critical period, a credible option for Nigeria’s accelerated economic revival would be for the government to put in place structures to promote agriculture and commodities exchanges.

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Global market indicators FTSE 100 Index 6,076.62GBP -50.82-0.83%

Nikkei 225 23,051.08JPY -45.67-0.20%

S&P 500 Index 3,389.60USD +7.61+0.22%

Deutsche Boerse AG German Stock Index DAX 12,881.76EUR -38.90-0.30%

Generic 1st ‘DM’ Future 27,723.00USD -52.00-0.19%

Shanghai Stock Exchange Composite Index 3,451.09CNY +12.29+0.36%

Fixed Income, Currency Market turnover rises by 13.66% to N18.72trn

urnover in Nigeria’s Fixed Income and Currency (FIC) markets for the month ended July 2020 was N18.72 trillion. This implies a month-onmonth (MoM) increase of 13.66percent (N2.25trillion) from the turnover recorded in June 2020 (N16.47trillion), and a year-on-year (YoY) increase of 14.43percent (N2.36trillion) from the turnover recorded in July 2019 (N16.36trillion), FMDQ Securities Exchange monthly report shows. As at July 29, 2020, yearto-date (YtD) turnover was c. N136trillion, representing a YoY increase of 0.30percent (N0.41trillion) on the YTD turnover of N135.58trillion recorded in July 2019. OMO bills and Money Market transactions (Repurchase Agreements [Repos] and Unsecured Placements/ Takings) remained the highest contributors to the FIC markets in July 2020, jointly accounting for 60.16percent of the total FIC market turnover. Foreign Exchange (FX) Market: Total FX market turnover in July 2020 was $10.82billion (N4.20trillion), representing a MoM increase of 25.38percent ($2.19billion) from the turnover recorded in June 2020 $8.63billion (N3.34trillion). Analysis of FX market turnover indicates that FX Derivatives accounted for 70.32 percent ($1.54billion) of the total MoM increase in FX market turnover in July 2020. In the OTC FX Futures market, the near month contract (NGUS JUL 29 2020) with a total outstanding notional value of $1.37billion matured and was settled, whilst a new long-term (60-month) contract, NGUS JUL 30 2025 was introduced at a rate of $/ N581.52. The total notional value of open OTC FX Futures contracts as at July 29, 2020 stood at c.$12.69billion, representing a 3.64percent ($0.48billion) decrease on the value of open contracts as at June 30, 2020 (c.$13.17billion), and continuing the downward trend in the value of open contracts since May 2020, while the total notional value of OTC FX Futures contracts traded since inception stood at $48.85billion as at July 29, 2020.

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On July 7, 2020, the Central Bank of Nigeria (CBN) Official Spot US$/N exchange rate closed at $/N381, representing a decrease of $/N20 (5.54percent) in the Official Spot FX rate compared to the closing rate of $/N361 as at July 6, 2020. Further, this represents the first (1st) $/N FX rate devaluation by the CBN since March 20, 2020, when the Official Spot FX rate was adjusted to $/N361 from $/N307. Consequently, the CBN Official Spot FX rate closed at an average of $/N377.19 in July 2020, representing a decrease of 4.48percent ($/N16.19) from $/N361 recorded in June 2020. At the Investors’ and Exporters’ (I&E) FX Window, the Naira depreciated against the US Dollar, losing 0.28percent ($/N1.09) to close at an average of $/N387.48 in July 2020 from $/N386.39 recorded in June 2020. Similarly, in the parallel market, the Naira depreciated against the US Dollar losing 3.38percent ($/ N15.29) to close at an average of $/N467.67 in July 2020 from $/N452.38 recorded in June 2020 Fixed Income (FI) Market (T.bills, OMO bills and FGN Bonds). In the primary market, average discount rates on the 91-day, 182-day and 364-day T.bills decreased MoM by 47bps, 38bps and 50bps to 1.43percent, 1.74percent and 3.38percent respectively in July 2020. The discount rates on the 82 – 89 day, 159 – 194 day and 334 – 348 day OMO bills remained unchanged MoM and stood at 4.95percent, 7.79percent and 8.99percent respectively in July 2020. Further, the marginal rates for the 15-year and 30-year FGN Bond re-openings decreased by 150bps and 220bps to 9.50percent and 9.95percent respectively in July 2020, compared to the marginal rates for FGN Bond re-openings in June 2020. During its monthly FGN Bond Auction in July 2020, the Debt Management Office did not re-open the 5-year FGN Bond, instead it re-opened the 10-year FGN Bond at a marginal rate of 6percent and introduced a new issue with a 25-year tenor at a marginal rate of 9.80percent.

Wednesday 19 August 2020

BUSINESS DAY

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Wednesday 19 August 2020

BUSINESS DAY

News Frequent obstructions on Escravos... Continued from page 1

vessels that follow draft

L-R (on the podium): Godwin Obaseki, Edo State governor and candidate of the People’s Democratic Party (PDP); John Yakubu, PDP chieftain, and Philip Shaibu, deputy governor and running mate, addressing suporters at the governor’s re-election campaign rally in Ward 9, Illushi, Esan South East Local Government Area of Edo State.

Nigerians face liquidity squeeze... Continued from page 1

tions by Financial Derivatives Company (FDC), a consultancy company led by economist Bismarck

Rewane. When that happens, the country could witness an increased inequality gap, a further drop in standard of living and worseningpovertylevels,according to Moses Hameed, research analyst at Lagos-based financial services firm, Investment One. It would also put pressure on Nigeria’s reserve and inflict more pains on its economy at a time in which it needs more dollar inflows to keep its naira stable againstthedollarandsettlesome of its dollar bills, Hameed says. FDC’s projections of declining diaspora inflows align with that from the indigenous rating agency, Agusto & Co, which notes that diaspora remittances

into Nigeria in 2020 would plunge by 20 percent, slowing to its lowest level in a decade, fuelled by the pandemic. In a forecast released in May, the consulting arm of the rating agency noted that the projected drop would further put the naira under some more pressure. “With an economic crisis in several Western nations, Nigeria could see a slowdown. We are forecasting a 20 percent drop in the diaspora remittances to $20 billion,” Agusto & Co. said. Like other sources of liquidity inflows including oil receipt, foreign direct investments (FDI), foreign portfolio inflows (FPI), grants and external borrowings; diaspora remittances have been one of the biggest sources of dollar inflows into the country. In 2019, diaspora remittances hit an all-time high of $25

Nigeria’s long-awaited oil reform... Continued from page 1

shift towards renewable energy have made competition tougher to attract investment from oil majors. Fiscal uncertainty has delayed a decision on a multibillion dollar expansion by Royal Dutch Shell and its partners, while Chevron, Total and ExxonMobil are selling various Nigerian assets. A spokesman for the PetroleumMinistry,whichledthebill’s drafting,didnotreplytoarequest forcommentandthepresident’s office declined to comment. Royal Dutch Shell, the largest international operator in Nigeria, said a botched reform effort would be “putting at risk and making unviable most of the planned projects.” “We hope that the final bill would be one that would unlock potential investments that Nigeria’s rich resource base truly deserves,” a spokesman for Shell companies in

Nigeria said. A draft summary seen by Reuters included provisions that would streamline and reduce some oil and gas royalties. One of the sources described even the government’s reduced take of oil revenues, through taxes, royalties and other fees, as “aggressive” compared with other nations. Some African countries are trying to cut red tape and taxes in order to make developing their oil and gas reserves attractive to companies. It proposes to boost the amount of money companies pay to local communities and for environmental clean-ups. It would also alter the dispute resolution process between companies and the government, though specifics of the changes were not included in the summary. The bill also included measures aimed at pushing www.businessday.ng

billion from the $18.37 billion inflows recorded a decade ago. That is about 80 percent of the Federal Government’s budget, 5 percent of Nigeria’s gross domestic product, and 10 times more the FDI flows in the same period. But the high figures from diaspora inflows were only those made through official channels. Analysts believe the numbers might be more if inflows done through unofficial means were captured. In Africa, Nigeria has led the continent with the most diaspora flows, and it was not until 2018 it dropped to second place behind Egypt. Th e u np re c e d e nt e d growth in diaspora remittances is due to Nigeria’s youthful populace scattered around other countries in search of greener pastures. Notably, the United States, United Kingdom and Cameroon were the highest remit-

tances sending countries to Nigeria, according to a 2017 PWC report that captured diaspora inflows into the country. At that time, some $6.19 billion was sent into Nigeria from theUS,whileNigeriansintheUK and Cameroon sent in $4.1 billionand$2.5billion,respectively. But for the virus outbreak, which has forced analysts to reverse projections of inflows, the global consulting firm while analysing past trends, estimates Nigeria’s diaspora remittances could grow over a 15-year period to $29.8 billion in 2020 and almost double its current size to $34.89 billion by 2023. The downgrade in the outlook for diaspora inflows may appear plausible given the developments seen in the global economy. The US, which is home to more than 280,000 Nigerian emigrants, is fighting tooth and nail to contain the spread of the virus.

companies to develop gas discoveries and a framework for gas tariffs and delivery. Commercialising gas, particularly for use in local power generation, is a core government priority. The bill will be presented in one piece with four chapters, the sources said. An effort to pass reforms by breaking them into several bills in 2018 fell flat; just one portion made it to President Buhari’s desk, and he never signed it.

The alignment of the presidency and the assembly give the measure the best chance of passage it has had in years. The law underpinning oil, the financial lifeline for Africa’s biggest exporter, has not been updated since the 1960s. Pumping its oil has historically been hugely profitable, but changes late last year that hiked Nigeria’s take of oil earnings, and a VAT increase, frustrated companies.

rules on vessel capacity, and reducing how much revenue the NPA can earn as charges. Operators are concerned that each time the channel is blocked ship owners and charterers incur significant losses. Sometimes the tides are only high enough for one hour out of the 24 hours in a day, and so ships have to take turns in an awkward manner to go through within that one-hour window, leading to huge time and revenue losses, which have gone unaddressed for years. Sources tell BusinessDay that some shippers have had to engage ocean-going tugs to pull out vessels blocking the channel to enable other vessels/tankers cross the channel. The Escravos channel, however, is an important tributary used by most seagoing crude vessels on the Delta ports area for the transportation of crude to off-take platforms on the high seas. Chevron, a major US oil company, has its main Nigerian oil production facility at the mouth of the Escravos River with an over 400,000 barrel per day capacity terminal. While it is not unusual to have narrow export channels on routes for oil exports, as can be seen in the case of Gibraltar, Suez Canal and the Straits of Hormuz, the problem with the Escravos channel is that it has been left to gather silts for years and as result ships must wait for high tide to be able to go through this channel. To worsen the situation, some operators are not adhering to the regulations guiding vessels that pass through the channels. For instance, the Suez Canal has a vessel called the Suez max, which is the maximum size that is allowed to pass through it. To reduce the risk of collision, ships moving through the Strait of Hormuz follow a Traffic Separation Scheme (TSS): inbound ships use one lane, outbound ships another, each lane being two miles wide. The Escravos Bar has restrictions against heavy-laden ships and large ships since its depth is only 6.2 meters, but these are frequently flouted. The NPA awarded Dredging International Nigeria Limited the contract of dredging the channel in 2018 but the contract ran into troubled waters when rival bidders accused the company of being convicted

Mali President detained in coup attempt

ali President Ibrahim Boubacar Keita was detained on Tuesday by mutinying soldiers in the capital Bamako, two security sources told Reuters. Soldiers had earlier in the day mutinied at the Kati military base about 15km (9 miles) outside of Bamako and rounded up a number of senior civilian and military

officials. A spokesman for Keita could not be reached for comment. A mutiny in 2012 at the Kati base led to a military coup that toppled then-President Amadou Toumani Toure and hastened the fall of Mali’s north to jihadist militants, who continue to operate across the north and centre of the West African country. Keitahasfacedmassprotests

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sinceJunecallingforhisresignationoverallegedcorruptionand worsening security. Earlier on Tuesday, Prime Minister Boubou Cisse issued a brief statement calling for dialogue and urging mutinous soldiers to stand down. The United States, France and the Economic Community of West African States (ECOWAS) all condemned the mutiny. @Businessdayng

by a law court in Switzerland hence unqualified, triggering an investigation by the NPA and a hearing by lawmakers, which have slowed the project. Operators say the NPA should ensure the impasse is resolved and the channel is fully dredged as oil companies, ferry equipment offshore bringing petroleum products into their operating fields from offshore Lagos or Lome go through the channel. Some oil companies including Shell, Eland, and local oil companies use it to export crude oil through barges to floating storage offloading (FSO) platforms, while others use bulk carriers to import corn/maize. Some dredging companies also operate through the channel, BusinessDay gathers. The net effect is that Nigeria does not fully utilise the canal, and in turn gets limited value from it. The NPA realised $45.2 million from the Delta ports in the first six months of 2019, but it could have doubled this revenue if the Escravos channel had been dredged, operators say. “I want to appeal to the contractor handling the dredging of the Escravos/Warri River to expedite action so that the work can be completed in record time,” Simon Asite, vice president, Delta Shippers Association (DelSA), said in an appeal last month. As a short-term measure, operators say the NPA should maintain stricter oversight on the issue of draft restrictions in order to avoid the incidence of the blockage of the channel by overloaded vessels that cause untold hardship and revenue losses to compliant operators. Nigeria is ceding a competitive advantage by not fully operationalising its ports. Worse still, it is hurting the local economy. The Warri Association of Chambers of Commerce, Industry, Mines and Agriculture (WACCIMA) recently urged exporters in Warri and its environs to patronise the Delta ports for seamless shipping of goods and services to boost the economic growth of the Niger Delta region. Since the construction of the Escravos Bar in 1964, the breakwater has become the passage into the Escravos channel while the channel has in turn become the passageway into the Delta ports. Over the years, the Escravos breakwater has been submerged and the channel silted. This has resulted in its gradual abandonment by heavy tonnage merchant ships alongside the ports that it serves, namely the Warri, Koko and Sapele ports, which have gradually grown dormant. It was last dredged in 1997 but this should be done regularly. Presently, only coastal tankers transporting refined petroleum products from offshore to the ports can navigate the shallow channel because of their relatively lighter deadweight tonnages; bigger deepsea ocean-going vessels are unable to.

Wednesday 19 August 2020

BUSINESS DAY

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Wednesday 19 August 2020

BUSINESS DAY

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Exporters, cocoa farmers lament neglect by govt AMAKA ANAGOR-EWUZIE

xporters and cocoa farmers have expressed regret over the neglect of the cocoa industry, calling on the Federal and State Governments to support the private sector to boost production and enhance the value of the product. Speaking at the Ships & Ports Virtual dialogue with the theme, “maximising the gains of Nigeria’s cocoa export in Lagos on Tuesday, Sayina Riman, outgoing president, Cocoa Association of Nigeria (CAN), said that Nigeria was once the highest producer of cocoa but after the discovery of crude oil, the government neglected the sector despite its huge potential. He, however, advocated that 5 percent of the oil revenue to be ploughed back to the cocoa industry. Riman identified lack of finance, Nigeria’s low production per hectare, neglect of extension service and lack of encouragement for youth participation in farming as some of the factors responsible for the constant decline of Nigeria’s cocoa output. “Cocoa built the foundation of the oil industry and it sustained the economy in time past in the 80’s. But because of the discovery of oil which

cocoa monies were used to build, what we have seen today is the total neglect of the industry. Cocoa is now being priced internationally because it is not a product of concern. Internationally cocoa is being priced because those who produce cocoa do not consume and those who consume cannot produce it at a competitive price,” he said. According to him, banks still give facility to cocoa farmers and expect the repayment within 24 months for a produce that has three to four years gestation period. “Cocoa farmers and the private sectors have not failed the country but the country has failed those who still produce what we still call the golden egg. If cocoa has given so much to Nigeria, what has Nigeria given into cocoa?,” he questioned. Riman noted that the cocoa sector still has the potential to be one of the country’s strongest employers of labour if given the needed attention it deserves. Obiora Madu, managing director, Multimix Academy, who also decried government’s neglect of the cocoa sector, stated that the country cannot get it right with the sector without paying attention to value addition through processing rather than pride itself as raw cocoa exporters.

Sunu Assurance holds annual AGM INIOBONG IWOK

he annual general meeting of Sunu Assurance Nigeria Plc, a foremost pan-would take place on Thursday, August 20, at the company’s headquarters on Victoria Island, Lagos State. A statement by the company Tuesday, said that attendance at the AGM which is the 33rd edition would be strictly by proxy in keeping with the government’s directive on physical distancing and the restriction on the maximum number of people allowed in every gathering due to current pandemic. The company said that members entitled to attend and vote at the AGM were advised to appoint either the chairman of the board, Kyari Abba Bukar, the managing director/CEO, Samuel Ogbodu, the president of the Nigerian Solidarity Shareholders Association, Matthew Akinlade or representatives from the Lagos zone shareholders association to do so on their behalf.

The company further revealed that in addition to electing members of the company’s audit committee, shareholders had ratified the appointment of KarimFranck Dione as non-executive director as well as re-elected non-executive directors, Kyari Abba Bukar as chairman, Taizir Ajala as vice chairman and Ibikunle Balogun, amongst other approved resolutions. The statement said that the chairman of the board, Kyari Abba Bukar, assured the shareholders that the company is on course to achieve the minimum share capital of N10billion as approved by NAICOM, adding that shareholders had earlier approved the company’s recapitalisation plans at an Extra-ordinary General Meeting held in March 2020. Sunu Assurance, however, revealed that a video live stream had been made available on the company’s website in order to enable shareholders with internet access to follow the meeting’s proceedings online.

L-R: Jane Ekomwererem, executive director; Adeyemo Adejumo, director; Sheila Ezuko, company secretary, and Benjamin Agili, MD/CEO, all of Royal Exchange General Insurance Company, at the 12th annual general meeting of the company, in Lagos, yesterday. Pic by Pius Okeosisi

Nigeria to wait till October for feedback on $1.5bn World Bank loan request

World Bank ’s budget support loan of $1.5 billion which Nigeria is seeking may not be approved before October, a huge blow to hopes of the country’s small businesses that are struggling under the weight of a severe dollar shortage. BusinessDay reported on August 6 that the World Bank was unlikely to grant the approval in August as planned due to concerns over the slow pace of desired reforms. Nigeria’s finance ministry directed queries from Reuters to the World Bank and in a statement, the lender said discussions were at an advanced stage, but con-

firmed that it had not presented the loan to its board. “Of particular importance are the steps the government is taking to marshal the needed fiscal resources for a pro-poor response to the crisis and undertake the reforms that will help ensure a robust recovery,” the statement said. A delay in financing from multilateral lenders could leave Africa’s biggest economy and top oil producer, battered by low crude prices, unable to fully finance a record 10.8 trillion naira ($28.35 billion) budget. The central bank has said Nigeria’s balance of payments gap this year will balloon to $14 billion.

The World Bank, which has said Nigeria could be heading toward its greatest fiscal crisis in 40 years, had aimed to bring the loan to its board for approval on August 6, but the sources said negotiations over what Nigeria will do to secure it were incomplete. “They are not convinced about the reforms,” a source close to the government told Reuters. All three sources declined to be named due to the sensitivity of the negotiations. The source added that the currency was the core issue. World Bank loans are often contingent upon reforms. It has not outlined any demands, but said pre-

viously that it was “recommending” a more unified, flexible exchange rate. Fuel subsidies and electricity tariffs are also being discussed. Nigeria’s policy of supporting the naira has become more costly since the oil price slide, as it relies on oil for 90 percent of its foreign exchange. It has devalued the naira twice this year, but the sources said that was not enough for the World Bank, which wanted fuller reform of the naira policy. Nigeria also said it had eliminated fuel subsidies through a “floating” price cap, but two of the sources said the World Bank felt the mechanism was not sufficiently transparent.

Carrington foretold my arrest, incarceration by Aba cha in 1995 – Obasanjo RAZAQ AYINLA, Abeokuta

…says late US ambassador helped restore democratic rule in Nigeria

igeria’s former President Olusegun Obasanjo says the late Walter Carrington, United States Ambassador to Nigeria between 1993 and 1997, foretold his arrest and incarceration by late Sani Abacha, military head of state from 1993 to 1998. The former president, however, said he failed to listen to Carrington’s prophesy and came back to Nigeria to be arrested. Obasanjo said Carrington’s warning came at a time when he was on the way to Copenhagen where he was to attend World Social Summit as the Human Development Ambassador of the United Nations Development Programme in 1995. He said the late ambassador even offered him asylum to escape Abacha’s arrest but he refused and returned to Nigeria to the den of incarceration and tor-

ture under the Abacha military junta. Speaking through a condolence letter that was personally signed and addressed the wife of late US Ambassador who died at 92, Obasanjo revealed that Carrington was very instrumental to the easing of the move to democratic rule in the country, saying his contributions in Africa and the world could never be over-emphasised. “I write to convey, on behalf of my family and on my own behalf, our profound sympathy and solidarity with you over the death of your beloved husband and one of the most outstanding diplomats of our time in the world, Amb. Walter Carrington,” Obasanjo wrote in the letter addressed to Arese Carrington of 85 Devonshire Street, Suite 1000, Boston, MA, 02109, United States. “I must say I received the news of the demise of this

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great brother and friend with mixed feelings of sadness and gratitude to God. I was sad because we will miss his contribution to the building of a new world of his dream and an Africa of our joint dream but I am grateful to God for his life well spent in the service of God and humanity,” he said. Obasanjo said throughout his spectacular life, Amb. Carrington was devoted to something greater than he was and was committed to improving humankind through the fairness, kindness, optimism and intelligence he brought to bear on all his undertakings, and through the righteousness, humanness and harmony he promoted in the US as a human rights activist and indeed across the world. “Walter wasn’t just a pride to America and Americans, he was also a pride to all the people of African descent. His involvement in the many causes in Africa cannot be @Businessdayng

over-emphasised. He was always looking out for his kinsfolk both at home and abroad,” Obasanjo said. He said Carrington was the initiator of many wideranging diplomatic operations, particularly during his tenures as the US Ambassador to Senegal from 19801981 and Nigeria from 1993 to 1997, and that he engendered policies that strengthened political and economic ties between these two countries and America. “Indeed, Africa gained a friend who cared about its well-being. He was such a committed humanitarian who did not just talk about peace-building but lived his life building peace and trying to make the world more wholesome,” he said. Obasanjo said throughout Carrington’s tenure as American Ambassador to Nigeria, he helped in easing the move to democratic rule in the country.

Wednesday 19 August 2020

BUSINESS DAY

NEWS

NSIA commissions $5.5m cancer diagnostic centre in Umuahia ANTHONIA OBOKOH, CYNTHIA EGBOBOH, GIFT ONYEDINEFU

igeria Sovereign Investment Authority (NSIA) has set up a $5.5million modern medical diagnostic centre in partnership with the Federal Medical Centre, Umuahia (FMCU), to invest in the country’s critical healthcare service delivery. The centre is designed to serve the South East and South-South geo-politicsl zones of the country. It is the third facility in NSIA’s expanding healthcare portfolio alongside the modern diagnostic facility also established by the NSIA in Kano, the NSIA Kano Diagnostic Centre (NKDC) and the NSIA LUTH Cancer Centre, Lagos (NLCC). Uche Orji, managing director and chief executive officer of the NSIA, at the virtual meeting commissioning of the centre said: “In the course of selecting the segments of NSIA’s healthcare strategy, diagnostics was flagged as a key segment as we discovered that there was an acute deficit of modern and automated medical diagnostic infrastructure, which had led to the prevalence of delayed and inaccurate diagnosis for critical care cases.” Orji further said that “Following years of project development, the NSIA-Umuahia

Diagnostic Centre was built in 18 months and at a cost of approximately $5.5 million. This is the largest and most modern diagnostic centre in the South-East and SouthSouth region of the country and is expected to raise the bar in the quality and standard of diagnostic services for the benefit of the Nigerian people.” According to him, “Our vision for healthcare is a three-fold one which centres on reducing medical tourism, developing and investing in centres of excellence which will provide world-class healthcare services domestically and lastly, providing tools which will ensure that our healthcare professionals are able to deliver at the highest level. “Within the first year of its operations, the centre is expected to serve as many as 70,000 clients and provide direct employment opportunities to about 47 people and we are hopeful that our partnership with FMCU will continue to bear fruit as we give consideration to collaborating with them on other specialties in line with our healthcare strategy.” Speaking on the project, Okezie Ikpeazu, governor of Abia State, said apart from investments in healthcare, the state was looking at several policy adjustments to broaden access to the most vulnerable within the state.

Future of risk management seen to have no boundaries HOPE MOSES-ASHIKE

he future of risk management is seen to continue to have no boundaries and rapidly dynamic as capacity required to effectively manage emerging risks will continue to change. Magnus Nnoka, president, Risk Management Association of Nigeria (RIMAN) said this at the association’s membership induction programme recently held in Lagos. “The risk management approaches of yesterday and today will not suffice for the risk of tomorrow,” Nnoka said. He urged the risk managers to take advantage of the various training and capacity building programmes including certified risk managers of the association to remain abreast of skill requirements in their profession. He noted that the risk management is in a new age of catastrophe and increasing uncertainty, faced with major challenges in dealing with natural and technological hazards in an increasingly interdependent and inter connected world. “We must begin to envi-

sion the changing risk landscape that lie ahead of us as well as how we can come to terms with the many ways of managing the inevitable consequences on the society,” he said. From his perspective, the only way to truly understand the global transformations that are underway – along with their impacts – is to think laterally. In other words, to use “peripheral vision” and approach associated risk management problems creatively. “As we formally welcome you today (Saturday) into Nigeria’s elite professional association of risk managers, I am very clear in my mind that you have all accepted to lead the rest into the future of risk management that will be characterized by uncertainty,” he said. “As I welcome you today on behalf of the Board of Trustees, Executive council and entire members of RIMAN, second of its kind in sub-Saharan Africa, take a moment and reflect on what kinds of risks we would all be facing at the end of this decade,” Nnoka said.

L-R: Yusuf Aboki, Nigeria’s candidate for the post of executive secretary of West African Telecommunications Regulatory Assembly (WATRA); Isa Ali Ibrahim, minister of communications and digital economy; Umar Garba Danbatta, executive vice chairman, Nigerian Communications Commission (NCC), and O.Y. Asaju, director, special duties, NCC, during a courtesy visit to the minister in Abuja.

No hiding place as banks recover N50.32m bad loans in 9 days with GSI HOPE MOSES-ASHIKE

igerian banks have within seven days of implementing the Global Standard Instruction (GSI) recovered N50.32 million loans from individual borrowers, Kevin Amugo, director, financial policy and regulation, Central Bank of Nigeria (CBN), said on Tuesday. GSI is essentially a mandate authorising recovery of due loan obligations from any and all deposit accounts maintained by a defaulting borrower. The CBN on July 13, 2020, issued a guideline on GSI to enhance loan recovery across the banking sector, effective from August 1, 2020. Amugo spoke during the Chartered Institute of Bankers of Nigeria (CIBN) advocacy dialogue on ‘Non-

Performing Loans (NPL) and GSI policy: impact and insight for financial stability’ held in Lagos via zoom. Industry summary of the GSI activation as disclosed by Amugo showed that banks so far triggered a total of 26,057 bad debts with a total value of N1.67 billion between August 1 and 9, 2020. The CBN is currently working on the protocols for GSI for non-individual and would soon release its operational guidelines. Amugo also disclosed that the CBN had commenced the on-boarding of mobile money operators unto the GSI platform, and the regulator had also commenced on-boarding of other financial institutions (OFIs) onto the Credit Risk Management System (CRMS) and thereafter to the GSI platform. Other financial institutions include Microfinance Banks, Primary Mortgage

Banks, development finance institutions and finance companies. Adesola Adeduntan, managing director/ CEO, First Bank of Nigeria, said it was a positive one with high prospect, to have recovered N50.3 million within a space of nine days. Represented by Olusegun Alebiosu, chief risk officer at First Bank of Nigeria, he said after one year the number of recoveries would increase, noting that banks were supposed to support customers access cheap funds by way of guarantees but the problem was trust. “If the economy is to move ahead, trust environmentalist must be improved,” Adeduntan said at the panel session on the webinar. At its meeting on February 18, 2020, the Bankers’ Committee approved the go live on the GSI. The objectives of GSI include to facilitate an improved credit repay-

ment culture; reduce NonPerforming Loans (NPLs) in the banking industry, and watch-listing consistent loan defaulters. The Nigerian banking sector NPLs ratio improved marginally to 6.4 percent in June 2020, from 6.6 percent in April 2020, though higher than 5 percent regulatory threshold. Godwin Emefiele, governor, CBN, noted at the last Monetary Policy Committee (MPC) meeting that Aggregate Domestic Credit (net) grew by 5.16 percent in June 2020 compared with 7.47 percent in May 2020. The Committee commended the CBN Loan-to Deposit Ratio (LDR) initiative to address the credit conundrum as the total gross credit increased by N3.33 trillion from N15.56 trillion at the end of May 2019 to N18.90 trillion at end-June 2020.

‘$1m business registration, other conditionalities too much for Nigerian traders in Ghana’ JOSHUA BASSEY

resident of the Association of Nigerian Traders in Ghana, Chukwuemeka Nnaji, says majority of Nigerian traders in Ghana cannot afford the $1 million and other conditionalities that small businesses are being asked to fulfil to continue doing business in the West African country. As a result, the Nigerian traders have asked the Federal Government of Nigeria to engage the Ghanaian authorities leveraging the ECOWAS protocol. Nnaji, who spoke on a radio programme, Political Platform, on RayPower FM (100.5) on Tuesday morning, said if this diplomatic engagement fails to yield the desired result, the traders would be willing and ready to return to Nigeria. He insisted that the conditionalities put forward by the Ghanaian government were above the capacity of most Nigerian small businesses operating in that country. According to Nnaji, the con-

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ditionalities include payment of $1 million or its equivalent in share equity, employment of at least 25 Ghanaians, and not operating in areas where Ghanaians have their businesses. “These are too much for us to fulfil. Majority of Nigerian traders in Ghana cannot afford $1 million,” he said on the programme monitored by BusinessDay in Lagos. He lamented that the registration charge was raised from $300,000 to $1 million, adding, “We have raised the ECOWAS protocol with the Ghanaian authorities, telling them that we’re West African citizens and should not be treated like other foreigners, but they have insisted that in spite of the ECOWAS protocol, their law is king.” Nnaji, who painted a pathetic picture of Nigerian traders in Ghana, said their shops and business premises are being locked up despite having business permits. On what he thinks the government back home can do, he said, “We want the Nigerian government to engage the

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Ghanaian authorities on the basis of the ECOWAS protocol. But if this fails, we plead with the Ghanaian government to give us some time to pack our loads and go back home.” The ECOWAS protocol agreed to by the member states in 1979, which are in phases, stipulates the right of ECOWAS citizens to enter, reside and establish economic activities in the territory of other member states. The first phase deals with

the right of visa-free entry; phase two deals with the right of residency, and phase three concerns the right of establishment in another member state.

CHANGE OF NAME

CONFIRMATION OF NAME This is to notify the general public that Osarenoma Robert Ogbonmwan and Ogbonmwan Osarenoma Victory refers to same and one person. All former documents remain valid. Banks and general public should take note.

I, formerly known and addressed as Samson Blessing Emmanuel now wish to be known and addressed as Fowowe Blessing Olamipos. All former documents remain valid. General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Ikeh Michelle Chigozirim now wish to be known and addressed as Mmaduabuchi Michelle Chigozirim. All former documents remain valid. General Public please take note. @Businessdayng

CHANGE OF NAME

I, formerly known and addressed as Ramoni Kazeem Kajogbola now wish to be known and addressed as Olagunju Kazeem Gbolagade. All former documents remain valid. General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Buchi-Ikeh Gideon Kamsiyochukwu now wish to be known and addressed as Mmaduabuchi Victor Kamsiyochukwu. All former documents remain valid. General Public please take note.

Wednesday 19 August 2020

BUSINESS DAY

NEWS

P&ID: FG arraigns Briton, 6 Muslim students seek end Stakeholders urge FG to consider 22 airport terminals in concession plans firms over alleged complicity to killings in S/Kaduna IFEOMA OKEKE FELIX OMOHOMHION, Abuja

he Federal Government on Tuesday arraigned more suspects in connection with botched Process and Industrial Development (P&ID) deal. A Briton, James Nolan and six firms were dragged before the Federal High Court, Abuja, over their alleged complicity in the gas deal between Nigeria and the Irish firm. The government arraigned Nolan, who is already facing charge in a related matter alongside two others said to be at large (Adams Quinn and Niel Murray) and six other firms. Nolan, Quinn and Murray were charged as directors of the firms. The six firms are: Ecophoenix Nigeria Limited, Babcock Electrical Projects Limited, Marshpearl Nigeria Limited, L. I. R. Resources Nigeria Limited, Kristholm Nigeria Limited and Lurgi Consult Limited. The Economic and Financial Crimes Commission (EFCC) in the six separate charges accused the defendants of failing to declare

their activities as specified under the Money Laundering Act 2011, as well as failure to develop programmes to combat money laundering, amongst others. While Nolan pleaded not guilty to all the charges in the six different suits, the trial judge, Justice Ahmed Mohammed, entered a not guilty plea for the six firms even when they were not represented by any lawyer. Following Nolan’s not guilty plea, his lawyer, Paul Erokoro, moved an oral application for his bail. Erokoro informed the court that his client had already been admitted to bail by the same court in a sister case and urged the court to recognise the bail, particularly as varied by the Court of Appeal on July 7 this year. Counsel to the EFCC, Bala Sanga, however did not oppose the request for bail, stating that the major concern of the prosecution is the presence of the defendants in court throughout the trial. In a short ruling, Justice Mohammed adopted the conditions as varied by the Court of Appeal in admitting Nolan to bail and adjourned till October 5, 2020 for trial.

uslim Students’ Society of Nigeria (MSSN) has urged both the Federal and Kaduna State governments to stop the continued killings in Southern Kaduna. President of the Lagos Area Unit of the society, Miftahudeen Thanni, made the call while speaking with news men in Lagos, saying it was high time the government put stringent measures in place to ensure the safety of lives and properties in Southern Kaduna. Thanni, who recently took over as the president of the society, while addressing salient national issues, on Tuesday, urged the government to fish out those perpetrating the heinous crimes. “One of the primary responsibilities of government is to secure the citizens and the properties of the citizens. Because of this we implore the government to do the needful, the government is trying but they have not done their best, if they can do better I think this will be a forgotten issue. “I also want to implore citizens and indigenes of Kaduna especially Southern Kaduna in particular to

embrace peace at all time, not only by speech but by all their activities. “They should be tolerant at all time in order to enthrone enduring peace in Kaduna at all time,” he said. Thanni also called on both the Academic Staff Union of Universities (ASUU) and the Federal Government to reach a consensus on the controversy surrounding the Integrated Payroll and Personnel Information System (IPPIS). MSSN said the controversy is saddening and weakens the hope in the reformation of the education sector, “It will be unfair for the resolvable difference to affect the resumption of millions of Nigerian students at the end of the coronavirus lockdown,” he said. It further decried the poor funding of education in the country, saying it is having negative effect on output across all levels. “The government must understand that massive investment in education is a guarantee for achievements in economic development and the well-being of their citizens.”

takeholders in the aviation industry have urged the Federal Government to consider all 22 airports managed by the Federal Airports Authority of Nigeria (FAAN) in its current airport concession plans. In a communique arising from a recent webinar by Aviation Round Table Initiative (ARTI) and made available to the media by Olumide Ohunayo, the spokesperson of ARTI, participants urged the federal ministry of aviation to, however, ensure that the terminal concession process was transparently conducted in compliance with the extant laws and due process to avoid post-agreement controversies and rancour as previously experienced. The webinar was themed “Nigerian airport concession: How far so far?” According to the communiqué, the webinar acknowledged the necessity for government to concession airport terminals in order to reduce financial burden on the Federal Government for airports infrastructure de-

Escaped suspect: NANS calls for arrest of Oyo police boss MARK MAYAH

ational Association of Nigerian Students (NANS) has called for the immediate arrest of the Oyo State Commissioner of Police, Nwachukwu Enuwonwu following the alleged escape of serial rapist and killer, Sunday Shodipe from police custody in Ibadan. The student’s umbrella body also called on the Inspector-General of Police (IGP), Mohammed Adamu to order the police commissioner to produce the suspect within the next 72 hours. NANs in a statement signed by its national public relations officer, Azeez Adeyemi, on Tuesday, insisted that, if the Oyo CP failed to produce the suspect within 72 hours, he should be made to stand trial in place of the suspect. Shodipe, a 19-year-old alleged serial rapist and killer, who was facing trial for alleged killings in Akinyele local government area of Oyo State reportedly escaped from police custody on Tuesday, August 11. Oyo State police command in a statement by its spokesman, Olugbenga Fadeyi confirmed Shodipe’s escape to journalists on Sunday. But, NANS while reacting to the development said all those responsible for the escape of the suspect should be arrested and charged to court.

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velopment management. “The concession of the terminals should not just be a departure from the status quo but with an objective to deliberately drive regional competitive hubs as well as mega carriers that will operate in those hubs. “The session was informed of the recruitment of a strategic Communication Consultant who is expected to disseminate important information on the concession process for the benefit of all stakeholders. Therefore, the government should define and clarify what is to be concessioned within the airport.” The communique further stated that all existing legal, labour, and other complications arising from previous experiments (Nigeria Airways (WT), Nigerian Aviation Handling Company NAHCO) be conclusively resolved. The participants stressed the need for government to allay the fears of the unions and employees of FAAN with regards to the planned concession, adding that the process must be fair and transparent.

Insight

BUSINESS DAY Wednesday 19 August 2020 www.businessday.ng

Building resilience and survival for MSMEs post COVID-19

he 2008 global financial crisis, World War II and the Great Depression were some major global crises (or “shifts”) that brought with them changes that have defined the years – and decades – after. The economic harm caused by the COVID-19 pandemic in a few months is likely to rival or exceed that caused by the global financial crisis in 2008 over three years, indicating that the effects will be long-term and likely to outlast the pandemic itself. Consequently, the far-reaching impact of the COVID-19 pandemic is changing how central banks, government and private sector leaders are implementing solutions to build up resilience and support the most marginalised facets of communities – in particular Micro, Small and Medium Enterprises (MSMEs) – to get through the crisis but also as a buffer against the next. After all, the next shift is sure to come whether it is in the form of a pandemic, extreme weather or massive explosions. And we might even still be recovering from COVID-19 when it does. It is commonly accepted that MSMEs are the backbone of many economies and play an outsized role in livelihoods, employment and national gross domestic product (GDP), particularly in emerging markets like ours; representing 48.5 percent of Nigeria’s GDP and the most critical component of industrialisation as set out in Nigeria’s Economic Recovery and Growth Plan (ERGP). Yet, during times of crisis and “shifts”, MSMEs are often more vulnerable and the least resilient to economic shock because of their size. A recent survey of the Korean Federation of MSMEs showed that, of the 407 surveyed SMEs, 42.1 percent could continue business for no more than three months on a cash flow basis, and 70.1 percent for no longer than six months. In Nigeria, of 1,554 micro-enterprises surveyed, 30 percent reported that their businesses would not survive the economic impact of

Godwin Ehigiamusoe, chief executive officer, LAPO Group.

the COVID-19 pandemic because of cash flow, sales and revenue constraints. Resilience is as much a tool for surviving during crises (or “shifts”) as it is for thriving. The wealth of nations is determined to a large extent by how well they do in creating an enabling environment for businesses to thrive. Successful businesses drive growth, create jobs and pay the taxes that promote economic growth and development. For MSMEs in Nigeria, already having to contend with a sluggish economy that is increasingly less attractive to operate in – much less re-invest in – additional shocks from COVID-19 are putting further pressure on their operations. An enabling environment and policies that have an intentional focus on providing more significant opportunities for MSMEs to thrive and participate in the economy would have done well to build their resilience prior to COVID-19. Imagine the potential of Nigeria’s 41.5 million MSMEs if they had a more stable and supportive environment in which to grow their enterprises. There’s a proverb that goes: “The best time to plant a tree is 20 years ago. The next best time is right now.” Put simply, just because Nigeria, as with so many other developing countries and economies, was not prepared for a pandemic does not mean we cannot build short, medium and long-term resilience during it. Right now is the time to plant the tree to equip MSMEs to bounce back from the collapse of markets, leap forward into new markets and address systemic challenges MSMEs face as a buffer against future economic downturns. Fighting for survival: What does an ideal environment for MSMEs look like?

To borrow from the words of Oumar Seydi, International Finance Corporation (IFC) Director for Africa, “Accessible and inclusive financial products and services will help SMEs realise their potential.” The COVID-19 pandemic reminds us that access to finance is a crucial challenge for many MSMEs, and they can only be as productive as the policy environment they operate in allows them to be – especially in developing countries. A World Bank Enterprise Survey found that access to finance is disproportionately difficult for smaller firms in the least developed countries (LDCs). 41 percent of SMEs in LDCs report access to finance as a significant constraint to their growth and development, by comparison to 30 percent in middle-income countries and only 15 percent in high-income countries. To better understand what an enabling environment for MSMEs looks like and the opportunities in the sector, let’s consider a few examples. In America’s Silicon Valley, we see how the dynamism of small firms allows them to create and compete efficiently. For example, companies such as Amazon and Instagram have used new ideas and technologies to transform traditional industries. America’s Silicon Valley is a living example of the process that Joseph Schumpeter termed “creative destruction”. Put simply, a process in which new technologies, new kinds of products, new methods of production and new means of distribution make old ones obsolete, forcing existing companies to adapt to a new environment or fail quickly. It is no surprise that 73 percent of small businesses in America can access and use financing to purchase inventory, expand their businesses, and strengthen their

financial foundation. Closer to home, ‘JazaDuka’ (fill up your store) is an innovative solution in Kenya that addresses the lack of access to capital as a significant barrier to growth for MSMEs. Having acknowledged that MSMEs cannot produce financial reports to enable financial institutions to assess their repayment capacity and default risk, Unilever in partnership with Mastercard and Kenya Commercial Bank (KCB) launched ‘JazaDuka’. JazaDuka is a digital working capital platform that empowers micro-entrepreneurs with working capital through offering credit in a cashless system that will enable the retailer to buy what they can sell. The platform combines distribution data from Unilever and analysis by Mastercard, on how much inventory a retailer has bought from Unilever over time. The results from the analysis are used to provide a micro-credit eligibility recommendation to KCB. Interestingly, we see Mastercard, a Fintech solution provider, leveraging data, artificial intelligence, and machine learning to help traditional banks better assess credit risk. They are consequently enabling MSMEs in Kenya to move from a cash-based system to a more formalised way of doing business with new opportunities for obtaining credit. The ‘JazaDuka’ platform was launched in 2017 and has already reduced cash-flow challenges of over 20,000 merchants and small distributors by providing working capital, with enrolled businesses experiencing a 20 percent growth in sales on average. Also, about 62 percent of participating merchants have been able to access formal bank credit lines for the first time. All hands on deck: Refocus and reprioritise It is clear that sustained invest-

ment into a country’s MSME sector not only unlocks the nation’s growth potential but helps them build resilience. Kenya is a typical case point in this matter, illustrating that small business owners who have access to resources and opportunities are better able to confront challenges such as the COVID-19 pandemic. Kenya’s digital platforms have been critical in helping MSME owners find workaround solutions in response to COVID-19, especially given that most already accepted digital payments via M-Pesa. This may be because digital platforms like ‘JazaDuka’ and M-pesa were already widely available and used by MSMEs in Kenya. Kenyan digital platforms have not only allowed participating businesses that were already online to ramp up their digital interactions and online presence; they continue to encourage MSMEs that were not previously online to utilise digital platforms for survival. For example, Kenya’s KopoKopo enables small business owners to accept digital payments, as well as access to credit through the ‘Grow Cash Advance’ product, which provides cash advances based on prior electronic business performance. By factoring in business owners’ previous electronic transactions, KopoKopo transforms a customer’s operation history into the necessary credit information needed to assess their repayment capacity and default risk. The business owner then selects the percentage of daily sales to dedicate to repayments via the KopoKopo digital platform, and KopoKopo automatically deducts that percentage each time the customer receives a payment. This arrangement keeps repayments fluid, bite-sized, and in line with cash flow. COVID-19 has made digital the new normal. Now we see a vast majority of MSMEs taking steps to innovate and pivot their businesses in response to the new normal. However, they are going to need broader policy and regulatory support if they are to emerge stronger from the crisis. Government policies and actions determine in no small degree the scale and quality of economic growth and the private sector’s role in it. Therefore, the survival and long-term success of MSMEs is dependent on a more holistic and joint public-private sector collaboration to strengthen the underlying ecosystem in which they operate. Kenya’s ‘JazaDuka’ as a case study illustrates that by working together, public and private institutions can promote and implement the policy solutions needed for the long-term success of the MSME ecosystem postCOVID-19.

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